Property and Justice

Craig Rotherham*

Those ... who make use of the word, property, or right, or obligation, before they have explain‟d the origin
of justice, or even make use of it in that explication, are guilty of a very gross fallacy, and can never reason
upon any solid foundation. A man‟s property is some object related to him: This relation is not natural, but
moral and founded upon justice. „Tis very preposterous, therefore, to imagine, that we can have any idea of
property, without fully comprehending the nature of justice ... The origin of justice explains that of
1
property.

T HERE is a strong temptation for legal cultures to draw a sharp distinction between legal
adjudication and politics. Such a separation seems to be demanded by modern ideals of
political legitimacy. However, the aspiration to maintain this distinction faces special difficulties
with respect to the common law, where the judiciary has the power to make law. In response to
these difficulties, courts and commentators have often sought refuge in a conception of the
private law as a system of corrective justice that is supposedly insulated from the concerns of
distributive justice that dominate the political process. This paper examines the effect of this
perspective on our understanding of property.
The first section compares two conceptions of property. The first is a notion of property as
pre-legal and absolute – one that is often found at the heart of an essentially libertarian vision of
the private law as a system of corrective justice that is removed from political concerns. The
second is a conception of property as a social construct – the product of policy choices that
inevitably involve considerations of distributive justice. The second section examines a series of
questions about the nature and limits of property that emerge in the determination of rights to
resources. This serves to emphasise the impossibility of the establishment of a baseline of
entitlements without making distributive choices. In addition, it points to the nature of the
choices being made and the role the two conceptions of property have in influencing those
choices. The third section examines how fidelity to the absolutist conception of property is often
maintained only at the level of form and not in substance. The final section explores how we
might construct a normative discourse of property through understanding both the value of the
absolutist paradigm of property and its limits.

* Gonville and Caius College, Cambridge.

1 David Hume, A Treatise of Human Nature LA Selby-Bigge and PH Nidditch eds 2nd edn (Oxford: Clarendon Press,
1978) 491.
 I. Two Conceptions of Property and Private Law
This section outlines two conceptions of property. These are best understood as ideal-types.
While they are useful analytical models, they can never entirely reflect the complexity of the law
found in any jurisdiction at any particular time. The first conception was most fully realised in the
late nineteenth century in English private law and in American constitutional law. Today, while
the influence of these premises is diminished, they still exercise a surprisingly strong hold on
English legal thought. In contrast, American property discourse has come to more closely reflect
the second conception of property outlined below.

1. PROPERTY AS THE FOUNDATION OF LAW

Property has often enjoyed a special place in political theory. In Locke‟s work it was the very
reason for which governments were created.2 Notions of fundamental property rights have
performed a number of important functions in accounts of the law. First, some have looked to
property to indicate the extent to which the state could legislate to regulate the lives of its
subjects. This understanding is clearly seen in constitutional law in the United States at the turn
of this century, where property largely marked the limits of state power.3 Secondly, this
perspective equally suggests the basis of a theory of how the state should regulate interaction
among its citizens – the subject matter of the private law. In particular it lends itself to an
account of the private law as a system of corrective justice that is independent of the concerns of
distributive justice. According to this account, property delineates a zone of personal freedom
for the individual from other individuals. Thirdly, such a conception of property can serve to
differentiate the role of the judiciary from that of the legislature, thereby suggesting that the
courts‟ powers to shape the common law are subject to important constraints. According to this
understanding, the role of the courts is to enforce property rights and contracts; the judiciary has
no role in redistributing property – this being a matter of distributive justice and therefore within
the sole province of the legislature.4
The particular conception of property that has performed these roles is an absolutist one that
Thomas Grey refers to as the notion of “thing-ownership”,5 Tony Honoré as the “basic model”
of the “full liberal conception of ownership”6 and JW Harris as “full-blooded ownership”.7 This
evokes an image of property as the exclusive and inviolable ownership of discrete things,

2 Locke, Two Treatises of Government Bk II § 123.

3 Jennifer Nedelsky, Private Property and the Limits of American Constitutionalism (Chicago: Chicago University Press,
1990).
4 See Rotherham, “Conceptions of Property in Common Law Discourse” (1998) 18 Legal Studies 41 at 51-3.
5 Thomas Grey, “The Disintergration of Property” in Penncock and Chapman eds Nomos XXII: Property (1980) 69 at
81.
6 Tony Honoré, “Ownership” in Guest (ed), Oxford Essays in Jurisprudence (Oxford: OUP, 1961) 107 at 147.
7 Harris, Property and Justice (Oxford: Clarendon Press, 1996) 29-30.

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whereby the owner is invested with absolute powers within rigid boundaries.8 An owner is seen
as necessarily enjoying all the entitlements in the bundle of rights that is property: the rights to
use, exchange, to derive income, to exclude and to immunity from expropriation. This suggests a
conception of the private law whereby the courts should interfere only to protect individuals‟
personal security and integrity and their property rights. If no one else‟s rights of property or
personal security are infringed the courts will not restrain owners in the exercise of their property
rights. What is more, those rights are regarded as inviolable save by legislative intervention and
only then with due compensation.
An example of this vision of the private law can be found in nineteenth century England.
The period marked, in the words of one commentator, “the consecration of the spirit of
unrestricted egoism.”9 This attitude is apparent in developments in the law of nuisance during
this period. In AG v Birmingham BC,10 the House of Lords indicated that considerations of the
public good were irrelevant in determining whether the defendant had committed a nuisance.
The fact that enjoining the city‟s sewage system might result in its populace being up to their
knees in effluent would not sway the Court in its decision that this system was creating a
nuisance. At issue were the rights of individual citizens – considerations of utility were beside the
point. In City of London Electric Lighting Company v Shelfer,11 the public good was pleaded once
again. On this occasion, the defendant asked that, instead of issuing an injunction curtailing its
electricity generating operation, the court limit the plaintiff‟s remedy to damages. Lindley LJ
declined the plea, concluding that to restrict the plaintiff to damages would amount to the
confiscation of the plaintiff‟s property rights and that such “[e]xpropriation, even for a money
consideration, is only justified where Parliament has sanctioned it.”12
More recently, the disinclination to expropriate property rights was apparent in the House of
Lords‟ decision in Moorgate Mercantile Ltd v Twitchings.13 The defendant, the owner of a motor
vehicle in the possession of another under a hire-purchase agreement, it had failed to register its
interest under a scheme run by the industry. Subsequently, the hirer had sold the car onto the
plaintiff and the question was whether the plaintiff took the car subject to the defendant‟s rights.
Lord Fraser, in finding for the defendant, argued that, “an owner of property is entitled to be

8 For an account, see Joseph William Singer, “No right to Exclude: Public Accommodations and Private Property”
(1996) 90 North Western University Law Review 1283 at 1453
9 HC Gutteridge, “Abuse of Rights” (1935) 5 Cambridge Law Journal 22. For illustrations of this attitude see, for
example, the judicial disinclination to impose any duty of care on owners for the welfare of trespassers (see below
n 54) and to restrain abuses of private power (see below nn 68-71). For accounts of the judicial ideology of the
period see also Atiyah, The Rise and Fall of Freedom of Contract (Oxford: Clarendon Press, 1979); Stein and Shand,
Law and Values __; and
10 (1859) K & J 528, 70 ER 220.
11 [1895] 1 Ch 287.
12 Ibid at 316.
13 [1977] AC 890.

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careless with it if he likes”.14 Thus, in Lord Fraser‟s view, it was axiomatic that property could
pass only with consent and that fault was not a basis for denying proprietary protection.
This understanding of property also explains the hostility felt toward the notion of the
“remedial constructive trust” in English law. Thus, the Court of Appeal rejected the concept in
Re Polly Peck International plc (in administration) (No 2)15 in part because it countenanced the
redistribution of property rights. In Nourse LJ‟s view: “You cannot grant a proprietary right to
A who has not had it beforehand without taking some proprietary right, away from B. No
English Court has ever had the power to do that, except with the authority of Parliament.”16

2. PROPERTY AS THE PRODUCT OF LAW

A contrast to efforts to depict the private law as a system of corrective justice insulated from
politics is provided by a perspective that has dominated American legal thought since the advent
of the legal realist movement. According to this understanding, the judiciary is inevitably
involved in a process of policy-making and must make a choice as to which values it wishes to
promote. Property is no longer seen as a pre-legal boundary between law and politics but as the
product of judicial policy.
This shift in perspective was aided by Hohfeld‟s analysis of property as a bundle of discrete
legal relationships between people.17 Others built on Hohfeld‟s insight that the interests
collectively known as ownership were separable and that there was no reason why the presence
of one interest should imply that of others.18 It followed that there was no reason to suppose
that the protection afforded over a resource should be absolute. This insight revolutionised the
received understanding of the nature and proper limits of private power.19 Notions of
“ownership” came to be regarded with suspicion, with analysis shifting instead to the individual
rights in the bundle known as property.20
American constitutional jurisprudence on the state‟s power of eminent domain or “takings”
demonstrates how problematic the concept of property has become. English courts tend to take
the view that a taking occurs only when owners are deprived of physical possession of their
property.21 By contrast, in American law it is accepted that at some point regulation of resources
may so limit the ability of owners to exploit their property economically that it is analogous to a

14 Ibid at 925.
15 [1998] 3 All ER 812.
16 Ibid at 831.
17 Wesley Newcomb Hohfeld, “Some Fundamental Legal Conceptions As Applied in Judicial Reasoning” (1913) 23
Yale Law Journal 16; and (1917) 26 Yale Law Journal 710.
18 Horwitz, The Transformation of American Law II: 1870-1960 (New York: Oxford University Press, 1992) 145-167.
19 See, for example, Hale, “Rate Making and the Revision of the Property Concept” (1922) Columbia Law Review
209; Bearle and Means, The Modern Corporation and Private Property (Commerce Clearing House, 1932) at 333-9.
20 Ackerman, Private Property and the Constitution (1977) 26.
21 See, for example, Government of Mauritius v Union Flacq Sugar Estates Co Ltd [1992] 1 WLR 903.

4
physical taking and should be treated as such.22 This approach has resulted in the courts‟ making
ad hoc assessments of whether the diminution in value in question is sufficiently marked to
amount to a “taking”.23 This demands an approach that involves balancing the interests of the
state and the individual – an approach that removes any illusion of property providing a sharp
boundary protecting the citizen from state interference. Consequently, as Jennifer Nedelsky
observes, “it is now widely accepted that property is not a limit to legitimate governmental action,
but a primary subject of it.”24
Thomas Grey has characterised this shift in understanding as “the disintegration of property”
and has concluded that “the substitution of a bundle-of-rights for a thing-ownership conception
of property has the ultimate consequence that property ceases to be an important category in
legal and political theory.”25 Yet, this is not necessarily something to be lamented. It is true that
this disaggregative perspective of property is essentially empty of content – in that we can no
longer assume that the owner of a resource enjoys any particular set of rights. However, this
feature of this conception of property is its very attraction. In post-realist legal analysis, legal
concepts have become nothing more than tools for the implementation of policy objectives; they
have been subordinated to the normative concerns that underlie them.26 According to this view,
the content of a particular conception of property should be the conclusion of a process of
implementing a particular normative theory or pursuing particular policy objectives,27 and should
not be inhibited by a priori understandings of what property is. Thus, it is accepted that property
is a conclusion and not a fundamental justification, a product of the law and not a reason for it.
These rights are recognised for reasons of policy and limited where policy demands it.28

II. The Implications of Different Conceptions of Property

1. DETERMINING THE BOUNDARIES OF PROPERTY

Conceptions of property shape the process by which we determine entitlement to resources. This
section points to particular issues that have to be resolved in allocating entitlement to resources
and identifies divergences in the treatment of these issues in English and American law.

22 Pennsylvania Coal Co v Mahon 260 US 393 (1922). See Margaret Jane Radin, Reinterpreting Property (Chicago: Chicago
University Press, 1993) 126-130; and Stephen Munzer, Private Property (Cambridge: Cambridge University Press,
1990) 445.
23 See Justice Brennan's judgments in Penn Central Transportation. Co v New York City 438 US 104 (1978) (judges must
indulge in “essentially ad hoc, factual enquiries”) and Agins v Tiburon 447 US 255 at 260 (1980) (a taking will be
found where a regulation “denies an owner economically viable use of his land”).
24 Nedelsky op cit n 3 at 231.
25 Grey, “The Disintegration of Property” op cit n 5 at 81.
26 Kronman, The Lost Lawyer (Cambridge, Mass: Harvard University Press, 1993) at 19.
27 See, for example, Coleman and Kraus, “Rethinking The Theory of Legal Rights” (1986) 95 Yale Law Journal 1335
at 1340.
28 See, for example, State v Shack 277 A 2d 369 at 373 (NJ, 1971) per Weintraub J.

5
 1. The resources and/or relationships that are or may be the subject of property rights.
Sometimes the recognition of entitlements is justified on the basis that some resources and/or
relationships somehow are naturally proprietary or non-proprietary. This can be seen for instance
in Boardman v Phipps29 where beneficiaries were awarded a constructive trust over shares that had
been acquired as the result of the use of information obtained by the defendant in his capacity as
a fiduciary. A number of the judges both in the House of Lords and in the courts below justified
the outcome on the basis that the information was the beneficiaries‟ property.30
In contrast, the approach taken to this issue in American law increasingly became policy-
driven. This is apparent in the judgment of Justice Holmes in De Nemours Powder Co v Masland.31
When faced with the argument that trade secrets were property, Justice Holmes responded that
the characterisation of the plaintiff‟s rights as property “was an unanalysed expression of certain
secondary consequences of the primary fact that the law makes some rudimentary requirements
of good faith.”32 Holmes took a similar approach the following year in International News Service v
Associated Press.33 While upholding the Associated Press‟s claim to injunctive relief in order to
prevent a competitor from “stealing” its news, Holmes declined to resolve the matter following
the view of the majority of the court that the anything that had market value was property. In his
view, “Property, a creation of law, does not arise from value, although exchangeable – a matter a
fact. Many exchangeable values may be destroyed intentionally without compensation. Property
depends upon exclusion by law from interference.”34 Subsequently, the realist scholar Felix
Cohen branded as “transcendental nonsense” the tendency to justify the protection of a novel

29 [1967] 2 AC 46. Another illustration is the recent controversy over the question of a bank‟s ability to obtain a
charge over the account of one of its own customers. While this had become a widespread custom, in Re Charge
Card Services Ltd [1987] Ch 150 Millett J argued that its was “conceptually impossible” to have a charge over one‟s
own liability to pay another. Subsequently, Roy Goode added his weight to this view: Legal Problems of Credit and
Insolvency (2nd ed, 1988) 124. The view was recently rejected by the House of Lords in Re BCCI SA (No 8) [1997] 3
WLR 909 where Lord Hoffman argued that “the law is fashioned to suit the practicalities of life and legal concepts
like „proprietary interest‟ and „charge‟ do not have a life of their own from which the rules are inexorably derived.”
On the other hand, this might be contrasted with that judge‟s refusal to consider placing any restrictions on the
ability of those creating floating charges to provide for automatic crystallisation clauses in Re Brightlife Ltd [1987]
Ch 200. Hoffman J recognised that “public interest requires a balancing of the advantages” conferred upon
secured borrowers by such clauses against the “possibility of injustice to unsecured creditors”. However, in his
view this was a matter for Parliament and not the courts. While the floating charge was a common law creation, in
Hoffman J‟s view it was no longer “open to the courts to restrict the contractual freedom of parties” to exploit
these devices on the grounds of public policy.
30 See the judgments of Wilberforce in the High Court ([1964] 1 WLR 993 at 1012; Russell LJ in the Court of Appeal
[1965] Ch 992 at 1031; and Lords Hodson and Guest in the House of Lords [1967] 2 AC 46 at 107 and 115. These
may be contrasted with the persuasive criticism by Lord Upjohn, who argued that, while equity would restrain the
transmission of information in some circumstances, this did not make such information property, and that there
were good policy reasons for not regarding it as such; ibid at 127-9.
31 244 US 100 (1917)
32 Ibid at 102.
33 248 US 215 (1918).
34 Ibid at 246.

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interest on the basis that it simply was somehow inherently proprietary rather than by weighing
the consequences of imposing a particular degree of protection.35
2. Entitlement to Compensation for Damage to Property. Nowhere are the difficulties of
insulating the law from policy considerations clearer than in the context of negligence and
nuisance. Some libertarians have argued that liability for causing damage to property and person
should be strict.36 However, where a plaintiff who is injured in pursuing an activity seeks to hold
a defendant liable, the accident can be said to be caused exclusively by the defendant‟s actions
only if certain normative considerations are smuggled into the equation.37 More commonly the
common law provides that liability is dependent upon fault. However, this too is a criterion that
can be given content only by privileging certain activities over others in a process that is
inherently political.38 As a consequence, it seems impossible to formulate a standard for liability
that does not involve some balancing in individual instances that can appear overtly political in
hard cases.
English law has been rather uncomfortable with the policy dimension of negligence and
nuisance. While there are certainly instances where English courts have quite openly taken
account of considerations of social utility in determining whether a defendant is negligent,39 they
have never developed a test for fault that explicitly takes into account the social utility of the
conduct in question.40 Instead, the courts have principally emphasised foreseeability of harm as
the basis for liability. While liability might nonetheless be denied, despite a finding of fault, on
the basis of policy considerations, this is viewed as an exceptional measure and its proper scope
remains unclear.41 Such issues are most likely to be subsumed into that vaguest of concepts, that
of “proximity”. At times the English courts have attempted to abrogate responsibility for
difficult policy questions by characterising them as not justiciable. In some instances, this
argument has been used to preclude recourse to policy considerations to deny relief after a
finding of reasonable forseeability, concluding that it is for Parliament to weigh policy factors.42

35 Felix Cohen, “Transcendental Nonsense and the Functional Approach” 35 Columbia Law Review (1935) 809 at
814-817.
36 Epstein, A Theory of Strict Liability: Toward a Reformulation of Tort Law (San Francisco: Cato Institute, 1988).
37 Coleman and Ripstein, “Mischief and Misfortune” (1995) 41 McGill Law Journal 91 at 103-108.
38 Ibid at 109.
39 See, for example, Watt v Hertfordshire County Council [1954] 1 WLR 835.
40 Markesinis and Deakin, Tort Law 3rd edn (Oxford: OUP, 1994) 146.
41 For the modern orthodoxy, see, for example, Spring v Guardian Assurance plc [1994] 3 All ER 129 at 153 per Lord
Lowry (presumption against resorting to public policy considerations to deny relief). For an analysis of the lack of
a rationality in this area, see Richard Mullender, “Prima Facie Rights, Rationality and the Law of Negligence” ___.
42 For an indication of the suspicion of such a denial of relief, see, for example, McLoughlin v OBrien [1983] 1 AC 410
at 431 per Lord Scarman (“policy issue as to where to draw the line” on recovery for nervous shock “is not
justiciable”).

7
In other instances this reasoning has been used to preclude imposing any duty of care and
therefore liability.43
On the other hand, in American law tests for liability in negligence and nuisance turn in part
on the social utility of the action in question and other questions of efficiency. Thus, most
famously, in United States v Carroll Towing,44 Learned Hand J concluded that a defendant would be
liable for negligence only where the cost of avoiding the harm would have been less than the
product of the magnitude of the risk and the gravity of the possible harm.45 Similarly, there is a
tendency in American law to insist that a interference with land will only be characterised as a
nuisance if it is unreasonable, with that criterion being determined by “balancing ... the gravity of
harm to the plaintiff against the utility of the defendant‟s conduct, both to himself and to the
community.”46 Thus, the judiciary have been content to portray their role in terms of an
accommodation of conflicting interests, rather than the enforcement of pre-existing and absolute
rights – a depiction that makes the notion of a clear-cut separation of law and policy untenable.
3. Entitlement to recover profits made from breaches of property rights. If they cannot
demonstrate loss, are owners limited to nominal damages, or may they strip defendants of any
profits earned through the breach of the owners‟ rights? Outside the equitable jurisdiction
exercised over fiduciary relationships, the English courts have traditionally allowed recovery for
profits earned from wrongs only when property rights have been involved,47 although relief is
often disingenuously framed in compensatory terms.48 In the past, the courts have been
unwilling to allow recovery of profits earned as the result of a breach of contract, although the
recent House of Lords decision in AG v Blake49 indicates that such a remedy will be available in
special circumstances. The special treatment given in the past to profits earned in breach of
property rights suggests a conception of property according to which owners have the absolute
right to control the use made of their assets and to any profits derived from their property.50

43 See, for example, Rowling v Takaro Properties Ltd [1988] AC 473 at 501 per Lord Keith. Subsequently in Osman v UK
(1998) 1 LGLR 431 the European Court of Human Rights indicated that treating certain exercises of discretion by
public authorities as not justificiable might amount to the denial of the right to “a fair and public hearing”
guaranteed by Article 6(1) of the European Convention of Human Rights. Thus, it may be that in the new
environment created by the incorporation of that convention into English law, the courts can no longer completely
avoid weighing up matters of public policy in such matters.
44 159 F 2d 169 (1947).
45 Subsequently, the Californian Supreme Court recognised the importance of factors including “the moral blame
attached to the defendant‟s conduct, the policy of preventing future harm, the extent of the burden to the
defendant and consequences to the community of imposing a duty to exercise case with resulting liablity for
breach, and the availability, cost and prevalence of insurance for the risk involved”. See Rowland v Christian 443
P2d 561at 564 (Cal, 1968).
46 Robie v Lillis 299 A 2d 155 (NH, 1972) applying § 826 Restatement of Torts (1939).
47 For judicial support for this distinction, see Stoke-on-Trent City Council v W & J Wass Ltd [1988] 3 All ER 984 per
Nourse LJ; and Surrey County Council v Bedero Homes Ltd [1993] 3 All ER 705 per Dillon LJ. However, this tendency
was criticized AG v Blake [2000] 3 WLR 625 at 637 per Lord Nicholls.
48 Peter Birks, Civil Wrongs: A New World (London: Butterworths, 1991) 57.
49 [2000] 3 WLR 625 at 638.
50 See Dagan, Unjust Enrichment (Cambridge: Cambridge University Press, 1997) 18.

8
 By contrast, in the United States there has been a willingness to allow recovery for profits
made from at least some breaches of contracts.51 Generally, relief is allowed only where the
breach is characterised by reprehensible behaviour.52 In any event, in American law the debate
on this question has turned on questions of efficiency and morality and not on distinctions
between personal and proprietary rights.
4. Duties owed to trespassers. In classical liberal theory, one is liable only for voluntarily
undertaken obligations and for the invasion of others‟ rights.53 There is a reluctance to impose
liability for omissions. Adopting this view, English law long refused to accord rights to
trespassers. In the early nineteenth century the courts had declined to hold landowners liable for
causing injury to trespassers by setting spring guns on their property.54 While this view softened
somewhat over the next century, landowners‟ obligations remained relatively limited. Thus, in
Robert Addie and Sons (Collieries) Ltd v Dumbreck,55 it was held that a landowner was liable in tort to
a trespasser only for acts “done with the deliberate intention of doing harm to the trespasser, or
at least some act done with reckless disregard of the presence of the trespasser.”56 Subsequently,
the courts moved from this position to imposing a duty of “common humanity” that nonetheless
remained less onerous than the ordinary duty of care.57 Eventually, the legislature felt compelled
to intervene to provide more wide-ranging protection.58
The position in America is rather different. In 1934 the First Restatement of Tort recognised
a duty to trespassing children.59 The Second Restatement took the stance that, where an occupier
knows or has reason to know of the presence of a trespasser, an ordinary duty of care is owed. 60
Subsequently, an increasing number of states have extended the ordinary duty of care to
trespassers.61
5. The limits on an owner‟s power to exclude. Rights of access to property may offer a
response to problems of private power. Prior to the nineteenth century a theory had developed
stipulating that some property, rather than being purely private, was “affected with a public

51 See, for example, Federal Sugar Refining Co v US Sugar Equalization 268 F 575 (SDNY 1920).
52 See Dagan op cit n 50 at 102-105.
53 See Unger, “Legal Analysis as Institutional Imagination” (1996) 59 MLR 1 at 12.
54 See, for example, See Ivor v Wilkes (1820) 3 B & Ald 304, 106 ER 674; John Finnis, “Intention in Tort Law” in
David Owen, Philosophical Foundations of Tort Law (Oxford: Clarendon Press, 1995) 229 at 231-2.
55 [1929] AC 358.
56 Ibid at 364.
57 British Railways Board v Herrington. [1972] AC 877 at 898-9 per Lord Reid.
58 Occupiers‟ Liability Act 1984.
59 § 339 of the Restatement of Torts (1934). Duties to children had previously been developed by the courts in the
United States. However this was generally done employing fictions of licence pursuant to the “attractive nuisance”
doctrines. The Restatement did away with this obfuscation.
60 Restatement of Torts 2d § 336.
61 The seminal decision is Rowland v Christian 443 P 2d 561at 564 (Cal, 1968). For a recent discussion of the area, see
Jones v Hansen 867 P 2d 303 at 310 (Kan, 1994).

9
interest”.62 Owners of such property were subjected to certain obligations to provide essential
services and access to essential facilities. The law of common callings reflected a similar
philosophy whereby those providing certain services had a duty to offer them to all at a
reasonable price. However in the nineteenth century the former doctrine had lapsed into
obsolescence and the latter was increasingly seen as an anomaly. More recently, English courts
have declined to limit rights of exclusion in the context of privately owned property generally
open to the public.63
In situations where particularly significant resources are in private hands, American law has
employed the “public trust” doctrine to limit the rights that owners may assert over such
resources.64 In addition, some state courts have restricted the rights of exclusion of private
owners who open their premises to the public.65 Some cases even envisage a general common
law principle of reasonable access.66 Nonetheless, the orthodoxy remains that the limitation of
the right to exclude applies only to those pursuing a “common calling” and that, in the absence
of statutory restrictions, proprietors of other businesses may exclude who they wish without any
need to justify themselves.67
6. Limits on the use of property. The English common law has been slow to place limits on
the use of private power, beyond restricting interference with the rights of others. In particular,
English courts were disinclined to develop an abuse of rights doctrine to prevent the immoral use
of property rights. This is illustrated by Mayor of Bradford v Pickles,68 where the defendant drained
his own land to decrease the amount of water percolating into the city‟s water supply in order to
force the corporation supplying the water to pay him off. The House of Lords concluded that
the defendant had acted within his rights. Moreover, the court suggested that an otherwise
lawful act could not become a tort merely because it was done in bad faith.69 Nor were English
courts prepared to proscribe the exploitation of property for anti-competitive ends. Thus, in
Mogul Steamship Co v McGregor Gow & Co70 the plaintiff was unsuccessful in bringing an action

62 See Paul Craig, “Constitutions, Property and Regulation” (1991) Public Law 538.
63 British Airports Authority v Ashton [1983] 3 All ER 6; CIN Properties v Rawlins [1995] 2 EGLR 130.
64 The landmark case was Illinois Central Railroad v Illinois 146 US 389 (1892). See Rose, “The Comedy of the
Commons: Custom, Commerce, and Inherently Public Property” in Property and Persuasion (1994) 105.
65 See Kevin Gray and Susan Francis Gray, “Private Property and Public Propriety” in Janet McLean (ed) Property
and the Constitution (Oxford: Hart Publishing, 1999) 11. Most cases have involved attempts to curb free speech
challenged on the basis of rights conferred by the First Amendment or state constitutions. See, for example,
PruneYard Shopping Centre v Robins 447 US 74 (1980); State v Schmid 423 A 2d 615 (1980); New Jersey Coalition Against
War in the Middle East v JMB Realty Corp 650 A 2d 757 (NJ, 1994).
66 See, for example, State v Shack 277 A 2d 369 (1971, NJ); Uston v Resorts International Hotel Inc 445 A 2d 370 (1982).
67 See, for example Brooks v Chicago Downs Association Inc 791 F 2d 512 (7th Cir, 1986); Joseph William Singer, op cit n
8 at 1442.
68 [1895] AC 587.
69 See, for example, [1895] AC 587 at 600 per Lord Macnaghten. On the other hand, there are a number of first
instance decisions in which liability has been imposed for otherwise lawful acts that were done maliciously: See, for
example, Christie v Davy [1893] 1 Ch 316; Hollywood Silver Fox Farm Ltd v Emmett [1936] 2 KB 468.
70 (1889) 23 QBD 598 (CA), affirmed [1892] AC 25 (HL).

10
against a shipping cartel that had financed a “fighting ship” to carry cargo at prices that “would
not repay a ship owner for his adventure.” Bowen LJ defended the cartel‟s actions on the basis
that an individual “has a right to study to promote his own advantage, or to combine with others
to promote their mutual advantage”71
In contrast, American State courts developed a concept of malicious use of rights, preventing
“spite fences” and “spite wells” that were designed merely to annoy neighbours or to extort
payment from them.72 In addition, the Supreme Court also accepted the relevancy of ulterior
motives in the exercise of otherwise lawful rights in other contexts.73 Similarly, in the American
common law of the late nineteenth century, price-fixing agreements were generally void and
unenforceable,74 and the courts would intervene to prevent unfair competition.75
7. Freedom from Expropriation. According to Blackstone, property remains in its owner “by
principles of universal law, till such time as he does some other act which shows an intention to
abandon it.”76 We have seen signs of this attitude in the decision of the English Court of Appeal
in Shelfer v City of London Electric Lighting Co,77 a late nineteenth century authority that has yet to be
overturned.78 This perspective is also apparent in the law relating to the distribution of property
on the breakdown of intimate relationships. In refusing to alter property rights where the parties
had not bargained for it, the English courts have adopted a more restrictive approach than that
found in other major common law jurisdictions.79 According to this view, “[a]ny power to alter
ownership must be found in statutory enactment.”80

71 (1889) 23 QBD 598 at 619 (quoting Earle LJ in R v Rowlands (1851) 2 Den 364 at 388, 169 ER 540 at 550.
72 The seminal decision was delivered by the Supreme Court of Michigan in Flaherty v Moran 45 NW 381 (1890). See
Patrick J Rohan (ed), Powel’s Real Property (New York: Matthew Bender, 1970) § 62.05; Drukker, “Spite Fences and
Spite Wells: Relevancy of Motive in the Relations of Adjoining Landowners” (1938) 2 California Law Review 691
at 693. Of course, today such issues are more likely to be resolved with reference to local planning regulations.
73 See, for example, American Bank & Trust Co v Federal Reserve Bank of Atalanta 256 US 350 (1921) (use of its powers
by the Federal Reserve); and Morton Salt Co v GS Suppiger Co 314 US 488 at 493 (1942) (improper use of patent
rights). For a discussion, see Hale, “Bargaining, Duress and Economic Liberty” (1943) Columbia Law Review 603
at 609-610.
74 Peritz, “The „Rule of Reason‟ in Antitrust law: Property Logic in Restraint of Competition” (1989) 40 Hastings
Law Journal 285 at 289.
75 See, for example, Tuttle v Buck 119 NW 946 (Minn, 1909).
76 William H. Blackstone, Commentaries on the Laws of England 4 vols (Chicago: Chicago University Press, 1979) vol ii at
9.
77 See above n 11 and accompanying text.
78 Thus, in Allen v Gulf Oil [1981] 1 All ER 353 the House of Lords recognised that Shelfer precluded awarding
damages in lieu of an injunction. However, they managed to allow the defendant to continue its activity by
finding, rather dubiously, that the nuisance in question was statutorily authorised, tbereby denying the plaintiffs any
remedy.
79 See, for example, the liberal doctrines developed in Pettkus v Becker (1980) 117 DLR (3d) 251 (Canada); Baumgartner
v Baumgartner (1987) 164 CLR 137 (Australia); Pasi v Kamana [1986] 1 NZLR 603 (New Zealand). For an analysis,
see Simon Gardner, “Rethinking Family Property” (1993) 109 Law Quarterly Review 263.
80 Lord Morris in Gissing v Gissing, 1971] AC 886 at 898. For similar remarks, see Pettitt v Pettitt [1970] AC 777 at 805
per Lord Morris, 811 per Lord Hodson, and 817 per Lord Upjohn. For a recent affirmation of this position, see
Lloyds Bank v Rossett [1990] AC 107.

11
 In contrast, American courts have been prepared to take considerations of utility into account
in determining the availability of injunctive relief in nuisance cases. Thus in Boomer v Atlantic
Cement Co81 the New York State Court of Appeal concluded that the harm that an activity was
causing to the plaintiff had to be weighed against the detriment that would be suffered by the
defendant if an injunction were issued.82 Similarly, in regulating entitlements on the dissolution
of intimate relationships, some American states have been prepared to give relief on the basis
that contributions toward the economic success of a relationship must be fairly rewarded.83
8. The Passing of Title. When there is an agreement to transfer property, at precisely what
point does obligation mature into ownership? Perhaps the primary significance of the decision is
that it allocates risks that flow from loss, damage or the vendor‟s bankruptcy. While initially the
common law insisted on physical transfer, the courts subsequently took the view that property
passes at some earlier point.84 In American legal thought it was increasingly accepted that title
was not a very useful concept in sales law. In particular, Karl Llewellyn criticised the tendency to
treat title as a “lump-concept” that required the allocation of all the incidents of title to one of
the parties and precluded a sensible distribution of risks and benefits during transitional stages of
sales transactions.85 Subsequently, Llewellyn drafted the Uniform Commerical Code without
using the concept of title. The continuing tendency in English law to allocate risk through a
unitary notion of title was apparent as recently as the House of Lords‟ decision in the Aliakmon.86
In that case, because property remained with the sellers, the buyers were not permitted to recover
for damage to goods on board ship even though, under the contract of sale, they were bearing
the risk of their loss.
A further question concerns the ability of the parties to contract to reduce the risks borne by
the seller in the event of the buyer‟s insolvency through reservation of title clauses that delay the
passing of title to some point after delivery. In English law, sellers may make the passing of title
contingent on the payment of price,87 or even on the buyer‟s meeting of unrelated obligations
owed to the seller.88 Such arrangements are not treated as security interests that need to be
registered to be valid. In contrast, in the United States those developing Article 9 of the Uniform

81 257 NE 2d 870 (NY, 1970).

82 See also Monroe Carp Pond Co v River Raisin Paper Co 215 NW 325 (Mich, 1927).
83 Jones v Jones 532 So 2d 574 at 580 (Miss, 1988); Watts v Watts 405 NW 2d 303 at 313 (Wis, 1987); Connell v Francisco
898 P 2d 831 (Wash, 1995); Marvin v Marvin 557 P 2d 106 at 121(1976).
84 Baker, An Introduction to English Legal History 3rd edn (London: Butterworths, 1990) 433-4. If a contract is for the
transfer of a particular good in a deliverable state, property passes once the contract is complete: s 18 r 1 Sale of
Goods Act 1979. If the contract is for unascertained or future goods, property passes when those goods are
unconditionally appropriated to the contract: s 18 r 5 Sale of Goods Act 1979.
85 Llewellyn, “Through Title to Contract and a Bit Beyond” (1938) 15 New York University Law Quarterly Law
Review 159.
86 Leigh and Sillivan v Aliakmon Shipping Co Ltd [1986] 785.
87 Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 1 WLR 676.
88 Armour v Thyssen Edelstahlwerke AG [1990] 3 All ER 481.

12
Commercial Code preferred to treat these arrangements functionally as giving rise to charges that
required registration if they were to be effective.89
9. The effect of vitiation of consent. What is the effect of a person‟s intention to pass title
being vitiated in some manner? Should a mistake, for instance, prevent title passing; or should
title pass, with the mistake merely giving rise to personal relief? At common law the notion
developed that a sufficiently fundamental mistake might render a contract void ab initio rather
than merely voidable. However, the rationale for this distinction is obscure and the case law is
contradictory.90 More recently, attention has shifted to equity and focused on to the extent to
which vitiation of intention may give rise to a constructive or resulting trust.91 The primary
significance of the position taken at law concerns priority between the original owner and
subsequent third party transferees. In contrast, in equity, where bona fide purchasers for value are
protected, the primary issue at stake is the distribution of loss in bankruptcy between the
transferor and the transferee‟s creditors. This is a very confused area in English law. There is
little agreement on where the lines should be drawn in this area, and the discussion has been
striking for its formalism; there has been remarkably little analysis of policy. This is largely
attributable to an attitude that finds its clearest expression in the assertion of Professor Peter
Birks that property is a concept that “ought never to be deconstructed.”92 In Birks‟ view, “the
conceptual approach” that limits the inquiry to asking whether something is someone‟s property
rather than the normative question of whether it should be, “creates a barrier between the law
and an impossibly difficult political question … [as to] whether a claim deserves priority in
insolvency…”93
In contrast, in the United States, at least among academic commentators, the debate has been
framed in terms of the provision of a fair and efficient allocation of risk94 and of achieving
corrective justice in bankruptcy.95 The Federal Court of Appeals of the Sixth Circuit has taken
the dramatic step of concluding that claims for constructive trusts based on vitiated consent are

89 Bridge, “Form, Substance and Innovation in Personal Property Security Law” (1992) Journal of Business Law 1.
90 See for example, Cundy v Lindsay (1878) 3 App Cas 459; Ingram v Little [1961] 1 QB 31; Lewis v Avery [1972] 1 QB
198.
91 Chase Manhattan v Israel-British Bank [1981] Ch 105; Nesté Oy Ltd v Lloyds Bank Plc [1983] 2 Lloyd‟s Rep 658;
Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669. The burgeoning literature on the role of the
resulting trust in this area includes: Swadling, “A New Role for Resulting Trusts?” [1996] Legal Studies 110; Birks,
“Trusts Raised to Reverse Unjust Enrichment: The Westdeutsche Case” [1996] Restitution Law Review 3; Robert
Chambers, Resulting Trusts (Oxford: Clarendon Press, 1997); Millett, “Restitution and Constructive Trusts” (1998)
114 Law Quarterly Review 399.
92 Birks, “The End of the Remedial Constructive Trust” [1998] 12 Trust Law International 202 at 214.
93 Ibid.
94 Alan Schwartz and Robert E Scott, Commercial Transactions: Principles and Policies 2nd edn (Westbury, New York:
Foundation Press, 1991) 489-491; Menachem Mautner, “‟The Eternal Triangles of the Law‟: Toward a Theory of
Priorities in Conflicts Involving Remote Parties” (1991) 90 Michigan Law Review 95.
95 Sherwin, “Constructive Trusts in Bankruptcy” [1989] University of Illinois Law Review 297; David Paciocco, “The
Remedial Constructive Trust: A Principled Basis for Priorities over Creditors” (1989) 68 Canadian Bar Review 315
at 334.

13
not enforceable in bankruptcy.96 This conclusion has been made possible by the acceptance in
American legal thought that the constructive trust used in this context is essentially a
redistributive proprietary remedy.97 The notion that interests created in this way are not effective
in bankruptcy is difficult to square with judicial authority.98 However, this response is
understandable as a matter of policy,99 reflecting the view held by many that, with their profligate
use of the constructive trust, the courts “have created a monster.”100

III. Property Rites: Form and Substance in Proprietary Reasoning101

Often the law adheres to the conventional paradigm of property in form rather than in substance.
If the need to provide for a readjustment of proprietary interests is felt sufficiently strongly it will
be achieved through a mode of conceptualisation which does not advert to that readjustment. By
manipulating the formal expression of a decision, judges may endorse an outcome that in
substance diverges from a fundamental premise to which their legal culture is committed without
bringing the validity of that premise into question. This practice ensures that, at the level of
form, the law can change in substance while still adhering to its sacred premises, thereby allowing
us to avoid fundamentally rethinking our normative commitments.102
This phenomenon is apparent in the use of fictions. For instance, the doctrine of prescription
came to incorporate the fiction of a “presumed lost grant”, suggesting that it was essentially
concerned with the consensual transfer of property.103 Another example is the manner in which
with the “attractive nuisance” doctrine, American courts at the turn of the century imposed
liability in negligence upon landowners for injury suffered by children who were in reality
trespassers through the artifice of a fictional invitation.104 Similar effects are often achieved
through evidential devices. For example, estoppels may be used to prevent owners from relying
on their rights without requiring that those rights be formally qualified.105 In addition, evidential

96 XL/Datacompp Inc v Wilson (In Re Omegas Group Inc) 16 F 3d 1443 (6th Cir, 1994).
97 See, for example, Palmer, Law of Restitution vol i at 171; GG Bogert, The Law of Trusts and Trustees 2nd ed (Veron
Law Book Co, 1979) § 472.
98 See, for example, Cunningham v Brown 265 US 1 at 11 (1923). For an analysis, see Andrew Kull, “Restitution in
Bankruptcy: Reclamation and Constructive Trust” (1998) 72 American Bankruptcy Law Journal 265.
99 For an analysis of the matter in these terms, see Re Dow Corning Corp 192 BR 428 at 436 (Bankr. ED Mich, 1996)
per Spector J.
100 Dawson, Unjust Enrichment: A Comparative Analysis (Boston, Little Brown, 1951) 30.
101 For a fuller account, see Rotherham, “Restitution and Property Rites: Reason and Ritual in the Law of Proprietary
Remedies” [2000] 1 Theoretical Inquiries in Law 205.
102 The classic study of this phenomenon remains Fuller Legal Fictions (Stanford: Stanford University Press, 1967) at
51-53.
103 William H. Blackstone, Commentaries on the Laws of England 4 vols (Chicago: Chicago University Press, 1979) vol ii at
263-266. See AWB Simpson, A History of the Land Law (2nd edn, Oxford: Clarendon Press, 1986) at 109.
104 This fiction was subsequently abandoned in the First Restatement of Tort. See above n 59 and accompanying text.
105 Judith Nicholson, “Owning and Owing: In what circumstances will the Responsibilities of Ownership Preclude or
Postpone the Assertion of the Rights of an Owner?” (1988) 16 Melbourne University Law Review 784.

14
presumptions – even if patently counterfactual – may be used to provide the basis for inferring
the consent conventionally demanded for a valid transfer of property.106
Nowhere are these rites more prevalent than in the law of proprietary remedies. The reason
for this is easy enough to comprehend. If the term “proprietary remedy” is taken to refer to the
redistribution of property rights, rather than the enforcement of existing ones,107 then it appears
inconsistent with absolutist notions of property as inviolable. Hence, we find in the law of
proprietary remedies that the reality that property rights are being readjusted is suppressed. One
way this is achieved is through notions of transmutation. Thus, in tracing, plaintiffs are allowed
to treat certain assets as if they were assets that they already owned.108 Something similar occurs
in subrogation. For example, guarantors who have met their principal debtors‟ liabilities are
treated as if they were lenders who bargained for rights of security.109 Fictional contracts perform
a similar function. Thus, in an alternative description of subrogation, the doctrine is expressed in
terms of assignment, as if the plaintiff himself had bargained for security.110 Finally, evidential
presumptions may be used to manufacture the appearance of consent. This is apparent in AG for
Hong Kong v Reid.111 Reid, who had held a series of positions of considerable responsibility in
Hong Kong‟s legal administration, was convicted of accepting bribes. The Hong Kong
government argued that Reid held the proceeds of the bribes on constructive trust for his former
employer. The Privy Council held that when a fiduciary receives a bribe, it must be presumed
that the fiduciary intended to hold it on trust for his or her principal. To this presumption it then
applied the maxim “equity looks on as done that which ought to be done” and, thus, proceeded
on the basis that this counterfactual intention had actually been carried out.
These doctrines represent decisions to give a particular class of claimants priority in
insolvency. Yet in each, a departure from the conventional paradigm of property, suggesting a
shift from the province of the judiciary into the province of the legislature, is obscured. Rhetoric
is employed to provide the illusion that these doctrines involve the observance of existing

106 See, for example, AG for Hong Kong v Reid [1994] 1 AC 324.
107 As it was, for instance, in Lac Minerals v Corona (1989) 61 DLR 14 at 50 per La Forest J.
108 The notion of tracing captures the idea that “sometimes, for certain legal purposes, one asset stands in the place of
another”: Lionel Smith, The Law of Tracing (Oxford: Clarendon Press, 1997) 3. According to this perspective,
property belongs to the plaintiff, “notwithstanding any change which that property may have undergone in its
point of form…” See Taylor v Plumer (1815) 3 M & S 562 at 575, 105 ER 721at 726 per Lord Ellenborough. For a
fuller analysis, see Rotherham, “The Metaphysics of Tracing: Substituted Title and Property Rhetoric” (1996) 34
Osgoode Hall Law Journal 321.
109 The term “subrogation” is used “to describe a process by which one party is substituted for another so that he may
enforce that other‟s rights against a third party for his own benefit”: Charles Mitchell, The Law of Subrogation
(Oxford: Clarendon Press, 1994) 3.
110 See, for example, Re McMyn (1886) 33 ChD 575. In Baroness Wenlock v River Dee Company (1887) 19 QBD 155 at
165, Lord Justice Fry described the process in the following terms: “The Court closes its eyes to the true facts of
the case, … and assumes on the contrary that the quasi-lender and the creditor of the company met together and
that the former advanced to the latter the amount of his claim against the company and took an assignment of that
claim for his benefit.” Cited in Birks, Introduction at 94.
111 [1994] 1 AC 324. For a fuller analysis, see Rotherham, “Proprietary Relief for Enrichment by Wrongs: Some
Realism About Property Talk” (1996) 19 University New South Wales Law Journal 378

15
entitlements, rather than a redistribution of the parties‟ rights and obligations. In substance,
tracing, subrogation and the doctrine in Reid depart from and thus threaten to undermine the
orthodox understanding of property. Yet, at the same time, the rhetorical strategies employed
disguise this departure and draw upon the symbolic power of the classic liberal understanding of
property to insulate these doctrines from controversy. In these rites of denial, in the very process
of transgression, property is affirmed as a powerful cultural symbol – marking an inviolable
boundary between law and politics.
The concept of property forms part of a conceptual system that organises and gives meaning
to our private law. It is part of an order in which notions of autonomy, consent and fault are
invested with a specific normative significance and take on a particular meaning. These concepts
structure our understanding of the extent of freedom that individuals enjoy from the demands of
others. In the process, they often allow us to interpret the law not as just an exercise of ad hoc
discretion or the application of isolated rules, but as moral. It is this normative order to which the
rituals of tracing, subrogation and the formula found in Reid seek to connect us. Their power as
speech acts depends on the extent to which they succeed in this endeavour. Yet, ultimately, there
is no escaping the reality that these are fictions. Their connection with the normative structure of
our private law is contrived. While these rituals suggest the continuing importance of our existing
conceptual framework, they also suggest that it provides insufficient resources to explain and
justify our intuitions about justice.
The tendency to utilise ritual in legal reasoning is related to a legal culture‟s commitment to a
vision of the private law as system of corrective justice that is distinct from the difficult decisions
inevitably involved in effecting distributive justice. In the contemporary law of proprietary
remedies, it is apparent that there is a strain of jurisprudence coming from England that is of a
different character from the discourse found in other common law jurisdictions. Perhaps no
better comparison can be provided than that between the judgments of the Privy Council in AG
for Hong Kong v Reid112 and that of the Canadian Supreme Court in Lac Minerals v Corona Ltd.113 In
the latter case, the plaintiff and the defendant had negotiated with a view to entering into a joint
venture to acquire mining rights. The defendant then exploited information gained in confidence
to acquire the rights for itself. On one level, the problem faced Reid and Lac was the same:
awarding proprietary relief would have been inconsistent with the conventional view that the
judiciary cannot create property rights. Whereas the difficulty was dealt with in Reid by resort to
what one commentator has characterised as the “incantation of silly maxims”,114 the Canadian
Supreme Court confronted absolutist notions of property and rejected them in favour of a more
instrumentalist approach. Thus, La Forest J in his judgment indicated that the courts may create

112 [1994] 1 AC 324. For a brief account of the case, see above, text accompanying n 111.
113 (1989) 61 DLR 14.
114 McKendrick, (1994) Law Quarterly Review 509 at 513.

16
property rights as well as enforce them. Moreover, he concluded that proprietary remedies
should be given only “if there is reason to grant to the plaintiff the additional rights that flow
from a recognition of a right of property”.115

IV. Toward a Normative Discourse of Property

The development of legal concepts, such as property, inevitably gives rise to basic questions of
justice. When these issues are suppressed, as they often are in English law, two observations
might be made. First, we have failed to offer a legitimate justification for the outcome in the case
before us and for the precedent it creates. Secondly, we have failed to provide a defensible
rationale or principle to guide the application and development of the relevant legal norm in the
future. In working with the court‟s ratio decidendae, future decision-makers, as Hume observed,
“can never reason upon any solid foundation.”116 This section considers the form a more open
discourse of property might take.

1. DEFINING THE OBJECTS OF PROPERTY

The determination of the objects of property raises a set of normative issues relating to
competing considerations of liberty, desert and efficiency. Generally, it is thought that everything
capable of being owned should be assigned an owner.117 Property provides owners a sphere of
freedom in which they are free from the claims of the state and from other citizens and in which
they can cultivate relationships with resources that are central to their personal development. In
addition, this protection of relationships with resources through property rights is favoured
because it encourages the efficient exploitation of resources. Nonetheless, exceptions may be
made because of competing claims of liberty and efficiency.
This balancing process is apparent in the law relating to the fragmentation of rights in land. In
some circumstances we are asked to give proprietary status to use rights that amount to less than
ownership. Such claims need to be balanced against the interest of owners in controlling the
access to and use of the land.118 In addition, they must be weighed against the interest that society
has in ensuring that property rights in land do not become so fragmented that they become a
minefield for third party purchasers. In seeking a balance, we have accorded proprietary status to

115 (1989) 61 DLR 14 at 51. This difference in attitude was noted recently in an extra-judicial address at a Festschrift
for Professor Gareth Jones by Paul Finn a noted equity scholar and justice of the Federal Court of Australia: Finn,
“Equitable Doctrine and Discretion in Remedies” in Cornish, Nolan, O‟Sullivan and Virgo (eds), Restitution: Past,
Present and Future: Essays in Honour of Gareth Jones (Oxford: Hart Publishing, 1998) 251 at 263-4
116 See text accompanying n 1.
117 Thus, according to Blackstone, “the legislature of England has universally promoted the grand ends of civil society,
the peace and security of individuals, by steadily pursuing that wise and orderly maxim, of assigning to every thing
capable of ownership a legal and determinate owner”: op cit n 76 v ii at 15.
118 Consider, for example, the question of whether an owner has the right to eject those who have contracted for the
right to enter onto the owner‟s land. For the changing view of the law relating to this question, see Wood v
Leadbitter (1845) V & B 388, 153 ER 35 and Hurst v Picture Theatres Ltd [1915] 1 KB 1.

17
leases and easements. On the other hand, while we specifically enforce licences and spousal rights
of occupation against the licensor119 or husband,120 we will not give them effect against third
parties.121 In other contexts, in order to encourage the alienability of land and to ensure the
freedom of future owners, we limit the power of owners to bind third parties with lesser interests
carved out of the owner‟s set of entitlements. Thus, we allow restrictive covenants to “run with
the land” but refuse to enforce positive covenants against third parties.122 While the balance that
has been struck is perhaps defensible, the route to it has often been tortuous. The courts have
often struggled with preconceptions regarding the nature of property that have precluded or at
least hindered an open consideration of the policy issues at stake.123

2. DETERMINING THE SCOPE OF RIGHTS OVER RESOURCES

The unwillingness to acknowledge that our law needs to determine the scope of property rights
may in part be attributed to the fear that a move beyond the absolutist notion of property might
mean that the designation of something as property will no longer foreclose arguments
concerning entitlement to resources. According to this fear, once we move beyond a monolithic
conception of property and recognise that rights to resources need to be shaped to fit the
circumstances, “property” loses its power to resolve legal controversy.
A willingness to engage in normative argument need not require us to rethink the common
law anew. We might seek to treat existing departures from the absolutist paradigm not as
anomalies, but as the basis for developing a justifactory theory of qualified property rights. The
private ordering model associated with the absolutist conception of property can still offer a
paradigm. It may not be natural or inevitable, but it contains a core of good sense; in general, it
offers an effective means of securing individual autonomy.124 Thus, departures from the
orthodox paradigm of property need not result in ownership losing its meaning. Even if property

119 Hurst v Picture Theatres Ltd [1915] 1 KB 1; Winter Garden Theatre (London) Ltd v Millenium Productions Ltd [1946] 1 All
ER 678; Hounslow LBC v Twickenham Garden Developments Ltd [1971] Ch 233.
120 Weldon v Weldon (1883) 9 PD 52; Shipman v Shipman [1924] 2 Ch 140
121 Ashburn Anstalt v Arnold [1989] Ch 1; National Provincial Bank v Ainsworth [1965] AC 1175.
122 Tulk v Moxhay (1848) 2 Ph 774, 41 ER 1143; Austerberry v Oldham Corporation (1885) 29 Ch D 750.
123 Consider the following conceptual hurdles that courts have encountered in regulating interests in land:
(a) the view that contractual licences could not be specifically enforced against the licensor because this would be
to give them proprietary effect: Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605 at 617 per Latham J.
(b) the argument that for a spousal right of occupation to be proprietary it need to be “definable, identifiable by
third parties, capable in its nature of assumption by third parties, and have some degree of permanence or
stability”: Lord Wilberforce in National Provincial Bank v Ainsworth [1965] AC 1175 at 1247-8. For a criticism of the
circularity of these criteria, see Gray, “Property in Thin Air” [1991] CLJ 252 at 292.
(c) the argument that, while “[e]nforcement of negative covenants lies in property”, the enforcement of positive
covenants necessarily lies in contract and so breaches the rules of privity: Lord Templeman in Rhone v Stephens
[1994] 2 AC 310. For a bemused reaction, see Posner, Law and Legal Theory in the UK and the USA (Oxford:
Clarendon Press, 1996) 42-3.
124 On the value of maintaining a private law that is relatively free from considerations of distributive justice, see N.E.
Simmonds “The Possibility of Private Law” in John Tasioulas (ed), Law, Values and Social Practices (Aldershot:
Dartmouth, 1997) 129.

18
rights are understood as conventional, rather than natural, there might still be consequences that
customarily arise with the allocation of property rights. These consequences would generally
include the rule that property cannot be expropriated and that property confers priority in
insolvency. However, through convention we might establish exceptions where, in the interests
of justice, these ordinary consequences of property would not apply.
Such an approach should not preclude the realisation of one of the core premises of our legal
tradition: the notion that we should have a private law – a body of law that provides for a sphere
of individual freedom through a set of rights the enforcement of which is relatively free from
distributive considerations. Thus, we might still conceptualise the private law as a system of
corrective justice. On the other hand, it cannot be conceived of as being fundamentally
independent of distributive concerns. For the system of entitlements that is safeguarded in such
a system of corrective justice must be established in process that inevitably raises questions of
distributive justice.125
The determination of the limits of freedom from expropriation, rights of exclusion, and rights
to use resources raises fundamental issues of liberty. A problem with the equation of property
rights with freedom is that one‟s rights over property have an impact on the lives of others and
unregulated private power may impinge unduly on the autonomy of others. Here we have a clash
between two conceptions of liberty. On the one hand, negative liberty emphasises the right to be
free from the power of others.126 On the other hand, positive liberty suggests that the
development of real freedom requires a certain minimum level of access to resources and
opportunities.127 In this way, the claims to autonomy of owners and of the wider community
come into competition.
Up to a point, private property and freedom of contract can provide a satisfactory basis for
ensuring individual freedom within the private law.128 However, we ought to be prepared to
intercede when the premises upon which our faith in private ordering is based are absent. In part,
this requires an understanding of when markets fail. For example, common law rules curbing
anti-competitive conduct might be justified in order to encourage properly functioning markets.
In addition, property rights might be qualified in response to impediments to bargaining such as
informational asymmetries, high transaction costs and holdouts. The latter two problems are
used to explain the willingness in American law to restrict plaintiffs to damages in certain

125 See, for example, “The Distributive Foundation of Corrective Justice” (1999) 98 Michigan Law Review 138.
126 Isaiah Berlin, Four Essays on Liberty (Oxford: Oxford University Press, 1969) 131.
127 For philosophical defences of positive liberty, see Charles Taylor, “What‟s Wrong with Negative Liberty” in
Philosophy and the Human Sciences (Cambridge: Cambridge University Press, 1985) 211; Waldron, The Right to Private
Property (Oxford: Clarendon Press, 1988) 408-415.
128 For the view that a properly functioning market is “a morally free zone” see Jules Coleman, Risks and Wrongs
(Cambridge: Cambridge University Press, 1992) at 4; R. Epstein, “Property and Necessity” (1990) 13 Harvard
Journal of Law and Public Policy 2 at 4.

19
nuisance cases.129 Finally, we might qualify property in response to systematic cognitive failings
that prevent individuals acting as rational maximisers of their own welfare. This might justify
intervention in the context of intimate relationships by explaining why we might provide relief
when parties have failed to bargain to safeguard their own welfare.130
In addition to market failure, intervention might be justified to remedy problems of private
power that typically result from the agglomeration of property in the large corporations. Property
rights might need to be qualified to prevent social exclusion and to promote equal access to
resources that are regarded as essential for human flourishing. It is in this light that we might
justify rights of access to quasi-public spaces.131

3. ALLOCATING RISK
Much of the process of defining the boundaries of property concerns the allocation of risk. First,
where property is damaged the law must determine whether the loss falls on the owner or the
person who caused the loss – a question that again raises a mixture of questions of liberty, moral
desert and efficiency. Secondly, the risk of damage to goods must be allocated between buyer and
seller in sales transactions. Thirdly, the law must determine whether the owner or an innocent
transferee should bear the loss of theft and fraud, where the property is sold on by the thief or
fraudster. In these three situations, we might ask whether liability can or should be determined by
moral fault, or whether we should promote efficiency by placing liability on the party in the best
position to prevent the loss in question.
Finally, the law must allocate the risk of bankruptcy between the buyer and seller in sales
transactions and between those who claim ownership of particular assets and third party
creditors. Bankruptcy raises a different set of problems, as it already represents an interference in
the market, where assets are marshalled and are distributed equally among creditors of the same
class. Against this background, courts have, through the provision of proprietary remedies,
stepped in and readjusted property rights in order to give priority to certain creditors rather than
leaving them to share pari passu with general creditors. Here we might have regard to
considerations of the relative moral desert of particular claimants and general creditors. First,
much attention has focused on the relevance of the fact that a particular claimant might be said
to be an involuntary creditor who has not assumed the risk of the bankrupt‟s insolvency.
Secondly, it has been argued that restitution claimants have a stronger claim to priority if their

129 Calabresi and Melamed, “Property Rules, Liability Rules and Inalienability: One View of the Cathedral” (1972) 85
Harvard Law Review 1089 at 1106-1110.
130 On the systematic tendency to underestimate drastically the risks of intimate relationships failing, see Lynn A
Baker and Robert E Emery, “When Every Relationship is Above Average: Perceptions and expectations of
Divorce at the Time of Marriage” (1993) 17 Law and Human Behaviour 439 at 443 (1993); Paul Van Lange and
Caryl E. Rusbult, “My Relationship is Better Then - and not as bad as - Yours Is: The Perception of Superiority in
Close Relationships” (1995) 21 Personality and Social Psychology Bulletin 21 at 32.
131 Singer op cit n 8 at 1477.

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deprivation has swollen the pool of assets available for distribution in bankruptcy. Thus, it has
been suggested that claimants who satisfy both these criteria should be accorded priority over
other creditors in bankruptcy.132 On the other hand, we might consider whether these are matters
that can be readily proved133 and whether the administrative costs involved would justify such
intervention.

V. Conclusion

Property rules are socially constructed and contingent – whether they deviate from the absolutist
paradigm or adhere to it. It is better that this choice is openly acknowledged and exercised
thoughtfully, reflecting a vision of social order that is the product of open debate, rather than
continue to be obscured in the abstract conceptual rhetoric that presently characterises much of
the discourse of property in our law. By more openly acknowledging instances where the law
departs from the absolutist paradigm of property, rather than hiding such departures through an
array of obfuscatory devices, we might formulate a better understanding of the normative
foundations of property. In the process we might develop what the common law has long
lacked: a justificatory theory for the recognition, distribution and qualification of property
rights.134

132 See, for example, Kull, “Rationalising Restitution” [1995] 83 California Law Review 1191 at 1217; Sherwin op cit n
95; Pacciocco op cit n 95.
133 In particular, it is generally thought that an approach that focused on whether that part of the defendant‟s estate
that would be available for distribution in bankruptcy has been swollen as the result of an enrichment at the
expense of the plaintiff would be totally unworkable. The rules of exchange product tracing are sometimes
regarded as a second-best substitute for a “swollen assets” approach: see, for example, Sherwin, op cit n 95.
However, if so, it represents a rather crude substitute.
134 For one scholars efforts to develop a conceptual theory for the qualification of rights of property, see Joseph
William Singer, op cit n 8; and “The Reliance Interest in Property” (1988) 40 Stanford Law Review 611.

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