Hepburn, Samantha --- "Carbon Rights as New Property: The benefits of statutory verification" [2009] SydLawRw 10; (2009) 31(2) Sydney Law Review 239
[∗] ∗ Associate Professor, Faculty of Business and Law, Deakin University. This article is based on a seminar given by the author, ‘Carbon Rights as Property Interests: Categorization, Creation and Emissions Trading’ (Australian National University College of Law Seminar, Canberra, 21 August 2008).
[1] Charles Reich, ‘The New Property After 25 Years’ (1990) 24 University of San Francisco Law Review 223 at 225.
[2] Ross Garnaut, Climate Change Review: Draft Report (2008) at 2.
[3] See Michael Heller, ‘The Boundaries of Private Property’ (1999) 108 Yale Law Journal 1163 at 1166 where the author notes that ‘[w]ith too many owners of property fragments, resources become prone to waste … through overuse … In well-functioning property regimes, legislatures and courts prevent such waste by drawing boundaries that constrain owners' choices about fragmentation. Outside the boundaries are commons and anticommons property; inside are forms of private property.’ See also Jeremy Waldron, ‘What is Private Property?’ (1985) 5 Oxford Journal of Legal Studies 313.
[4] Frederick Pollock, The Land Laws (1883) at 62.
[5] Heller, above n 3 at 1167–8.
[6] See Morton Horwitz, ‘The Transformation in the Conception of Property Law in American Law, 1780–1860’ (1973) 40 University of Chicago Law Review 248 where the author notes that it was not until the 19th century that it became clear that the conception of absolute dominion over land ownership necessarily circumscribed the rights of others to develop the land and its natural resources.
[7] Id at 290.
[8] For a discussion of the evolving character of property interests see Francis Philbrick, ‘Changing Conceptions of Property in Law’ (1938) 86 University of Pennsylvania Law Review 691; Thomas Grey, ‘The Disintegration of Property’ in J Roland Pennock and John Chapman (eds) Property: Nomos XXII (1980) 69 at 177–8.
[9] Structural and economic limitations involved in incorporating new property into an existing framework are discussed by Heller, above n 3 at 1165, who notes that diverse property doctrines have evolved to ‘prevent and abolish excessive fragmentation and keep resources well-scaled for productive use’.
[10] Donald Carmichael, ‘Fee Simple Absolute as a Variable Research Concept’ (1975) 15 Natural Resources Journal 749 at 751.
[11] Craig Arnold, ‘The Reconstitution of Property: Property as a web of interests’ (2002) 26 Harvard Environmental Law Review 281 at 283. See also ibid.
[12] In National Provincial Bank Ltd v Ainsworth [1965] UKHL 1; [1965] AC 1175 at 1247–8, Lord Wilberforce said: ‘Before a right or an interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability.’ The approach of Lord Wilberforce was adopted by Mason J in R v Toohey; Ex parte Meneling Station Pty Ltd [1982] HCA 69; (1982) 158 CLR 327 at 342. In Western Mining Corporation Ltd v Commonwealth (1994) 50 FCR 305 at 329, Ryan J, before referring to the comments of Lord Wilberforce in National Provincial Bank Ltd v Ainsworth, noted that ‘property is not entirely an indefinable notion to be applied intuitively case by case. Clearly there must be some demarcation between what is and what is not property.’
[13] See Henry Hansmann and Reinier Kraakman, ‘Property, Contract, and Verification: The numerus clausus problem and the divisibility of rights’ (2002) 31 Journal of Legal Studies S373.
[14] Meaning literally ‘closed in number’. For a discussion of the nature and justification underlying the numerus clausus principle see Thomas Merrill and Henry Smith, ‘Optimal Standardization in the Law of Property: The Numerus Clausus Principle’ [2000] YaleLawJl 14; (2000) 110 Yale Law Journal 1; Bernard Rudden, ‘Economic Theory v Property Law: The numerus clausus problem’ in John Eekelaar and John Bell (eds), Oxford Essays in Jurisprudence: Third series (1987) 239. For a discussion of the application of numerus clausus to the Australian context see Brendan Edgeworth, ‘The Numerus Clausus Principle in Contemporary Australian Property Law’ [2006] MonashULawRw 17; (2006) 32 Monash University Law Review 387.
[15] Kevin Gray and Susan Gray, ‘The Rhetoric of Realty’, in Joshua Getzler (ed), Rationalizing Property, Equity and Trusts: Essays in honour of Edward Burn (2003) 204 at 235–7. This is also discussed by Edgeworth, above n 14 at 391 where the author considers the jural status of numerus clausus as a meta-principle which ‘pervades the wide landscape of legal discourse in property law.’
[16] See generally Anthony Scott, ‘Property Rights and Property Wrongs’ (1983) 16 Canadian Journal of Economics 555 discussing the merits of statute and common law in the evolution of property interests.
[17] Statutory land interests have been described as ‘entitlements of a new kind’: Harper v Minister for Sea Fisheries [1989] HCA 47; (1989) 168 CLR 314 at 325 (Mason CJ, Deane and Gaudron JJ). This is discussed by Scott, id at 558.
[18] This point is raised by Merrill and Smith, above n 14 at 66.
[19] See Scott, above n 16. See also Anthony Scott, ‘Does Government Create Real Property Rights?: Private Interests in Natural Resources’ in University of British Columbia Department of Economics, Discussion Paper No 84–26 (Vancouver, 1984).
[20] See for example, the categories outlined by Mathew Storey, ‘Not of this Earth: The Extraterrestrial Nature of Statutory Property in the 21st Century’ (2006) 25 Australian Resources and Energy Law Journal 51 at 54. The author sets out four different categories: (1) Defeasible statutory replication of a common law title; (2) Statutory property bearing no common law parallel; (3) Statutory licence; and (4) A public right created by statute.
[21] The later category has been endorsed in New South Wales, Tasmania and Queensland which have all deemed carbon sequestration rights to constitute ‘profit à prendre’ interests. See also Scott, ‘Does Government Create Real Property Rights?’, above n 19, where the author suggests that statutory property is generally a legislative response to social and economic development. For a discussion of the specific development of statutory rights see further, Anthony Scott, ‘Conceptual Origins of Rights Based Fishing’ in Phillip Neher, Ragnar Arnason and Nina Mollett (eds), Rights Based Fishing (1988) 11.
[22] Western Australia and South Australia have endorsed the carbon sequestration right as a pure statutory form. See Forestry Property Act 2000 (SA) s 3A; Carbon Rights Act 2003 (WA) s 3.
[23] A clear example of this form of interest is an exploration permit under the former Petroleum (Submerged Lands) Act 1967 (Cth) (repealed by Offshore Petroleum (Repeals and Consequential Amendments) Act 2006 (Cth)), which conferred a right to the grant of a petroleum licence but only a limited right to the petroleum itself. See the discussion on the vexed proprietary status of this ‘pure’ statutory form by Gummow J in Commonwealth v WMC Resources Ltd [1998] HCA 8; (1998) 194 CLR 1 at [194] where his Honour noted that the statutory interest was property despite the fact that its ‘defeasance’ did not equate with an acquisition of property in a constitutional sense.
[24] The carbon right has been described as a ‘novel’ right with a complexity that has made it difficult to characterise. See Steven Kennett, Arlene Kwasniak and Alastair Lucas, ‘Property Rights and the Legal Framework for Carbon Sequestration on Agricultural Land’ (2005–06) 37 Ottawa Law Review 171 at 179.
[25] It might be possible, or at least more accurate, to align the interest with the profit à rendre. The profit à prendre was described by Santow JA (Mason P and Beazley JA agreeing) in Clos Farming Estates v Easton (2002) 11 BPR 20,605 at [59] (referring to Peter Butt, Land Law (4th ed, 2001)), as ‘a right or obligation to enter land to put there something of benefit’. See also Permanent Trustee Australia Ltd v Shand (1992) 27 NSWLR 426 (‘Permanent Trustee’), at 431 (Young J), where a profit à rendre was described as an incorporeal hereditament being ‘....a right to go onto the land and to put on it something of benefit to it....’. The character and scope of the profit à rendre was discussed by Brendan Edgeworth, ‘'Profits à Rendre: A Reincarnation?’' (2006) 12 Australian Property Law Journal 200.
[26] This specific definition has been adopted in NSW and Tasmania. See Conveyancing Act 1919 (NSW) s 87A; Forests Rights Registration Act 1990 (Tas) s 5(4).
[27] The effectiveness of carbon sequestration rights or carbon ‘sinks’ is discussed by Daniel Lashof and Bill Hare, ‘The Role of Biotic Carbon Stocks in Stabilizing Greenhouse Gas Concentrations at Safe Levels’ (1999) 2 Environmental Science and Policy 101.
[28] The United Nations Framework Convention on Climate Change, opened for signature 9 May 1992, 1771 UNTS 107 (entered into force 21 March 1994) recognised that Annex 1 countries pursuant to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, opened for signature 11 December 1994, [2008] ATS 2 (entered into force 16 February 2005) could include carbon sequestered on agricultural land in the process of calculating their net greenhouse gas emissions.
[29] Merrill and Smith, above n 14 at 62.
[30] See Department of Prime Minister and Cabinet, Prime Ministerial Task Group on Emissions Trading: Final Report (2007) at para 6.2.
[31] See Ross Garnaut, The Garnaut Climate Change Review: Final Report (2008) at 2. See also, Andrew Thompson and Rob Campbell-Watt, ‘Australia and an Emissions Trading Market: Opportunities, Costs and Legal Frameworks’ (2005) 24 Australian Resources & Energy Law Journal 151.
[32] See Garnaut, above n 31 at 2.
[33] See Department of Prime Minister and Cabinet, above n 30 at 83.
[34] Garnaut, above n 31 at 330–4 where the ‘Overview of the Proposed Emissions Trading Scheme’ proposes unlimited offset credits for net sequestration from forestry.
[35] See generally, Garnaut, above n 2 at 360 (Table 15.1).
[36] See the discussion by Andrew Thompson and Rob Campbell-Watt, ‘Carbon Rights: Development of the Legal Framework for a Trading Market’ (2004) 22 Journal of Energy and Natural Resources 465 at 471 and more generally, Thompson and Campbell-Watt, above n 31.
[37] See also, Nicholas Stern, The Economics of Climate Change: The Stern Review (2007).
[38] The importance of setting up a scheme responsive to exogenous factors, so as to promote a judicious and calibrated ‘linkage’ with other international schemes was outlined as a key point in Garnaut, above n 31 at 2.
[39] The term originated in France, but was frequently utilised in feudal England, where the ‘waste,’ or uncultivated land, of a lord’s manor could be used for pasture and firewood by his tenants. For centuries this ‘right of commons’ conflicted with the lord’s right to ‘approve’ (ie, appropriate for his own use) any of his waste. For a discussion about the feudal origins of the profit à prendre see generally Frederick Pollock, The Land Laws (3rd ed, 1896) at 18–21.
[40] Joan Williams, ‘The Rhetoric of Property’ (1998) 83 Iowa Law Review 277 at 297. See also Carol Rose, Property and Persuasion: Essays on the History, Theory and Rhetoric of Ownership (1994) at 25.
[41] The connection between governance and private ownership is particularly important for natural resource interests and the capacity to regulate valuable resources via State legislation is an additional incentive underlying this type of formalisation. See generally: Gregory. S. Alexander, Commodity and Propriety: Competing Visions of Property in American Legal Thought 1776–1970 (1997).
[42] Conveyancing Act 1919 (NSW) ss 87A, 88AB(1), 88EA; Forestry Act 1959 (Qld) s 61J(5) Forestry Rights Registration Act 1990 (Tas) s 5.
[43] Forest Property Act 2000 (SA) s 7; Carbon Rights Act 2003 (WA) s 6.
[44] Carbon Rights Act 2003 (WA) s 6.
[45] Forests Rights Act 1996 (Vic) ss 3, 4.
[46] See Kennett, Kwasniak and Lucas, above n 23 at 205. See also David Brand, ‘Current Status of Forest-Based Carbon Sinks’ [2004] Australasian Emissions Trading Forum Review 6.
[47] See Kennett, Kwasniak and Lucas, above n 24 at 210 where the authors suggest that it is ‘remarkable how little effort Canadian governments have devoted thus far to developing the required legal framework.’ The only legislative action to date has been Alberta’s Climate Change and Emissions Management Act, SA 2003, c C-16.7 which only deals with the issues in a rudimentary manner.
[48] See Parliament of Western Australia, Parliamentary Debates, Legislative Council, 24 October 2002, at 2340 (Nick Griffiths) where it was noted that the purpose of the Carbon Rights Bill 2002 (WA) was to ‘provide security for the owner of the carbon right in land by enabling a carbon right to be registered on the land title under the Transfer of Lands Act as a separate interest in that land’. See also Peter Butt, ‘Carbon Sequestration Rights: A New Interest in Land’ (1999) 73 Australian Law Journal 235.
[49] This principle is encapsulated within the Latin maxim: ‘cuius est solum eius est usque ad coelum et usque ad inferos’ meaning literally ‘ownership of land extends up to heaven and down to the centre of the earth’. This has been refined by the courts. See Wandsworth Board of Works v United Telephone Co [1884] UKLawRpKQB 123; (1884) 13 QBD 904 at 915 (Brett MR) who described the principle as a ‘fanciful phrase’. For a discussion of the scope and meaning of natural rights held by a land-owner see generally: Dalton v Angus (1881) 6 App Cas 740. See also Janice Gray and Brendan Edgeworth, Property Law in New South Wales (2003) at [2.6].
[50] See Butt, above n 47.
[51] Conveyancing Act 1919 (NSW) s 87A.
[52] Forestry Act 1916 (NSW) s 33C.
[53] Conveyancing Act 1919 (NSW) s 88AB(1).
[54] Conveyancing Act 1919 (NSW) s 88AB(2).
[55] Conveyancing Act 1919 (NSW) s 88EA.
[56] The Electricity Supply Act 1995 (NSW) sets a ‘State Greenhouse Gas Benchmark’. Benchmark participants achieve their individual benchmark by surrendering abatement certificates created from project-based emission reduction activities. The surrender of these certificates effectively offsets a portion of the greenhouse gas emissions associated with their electricitity sales or purchases. See NSW Department of Energy, Utilities and Sustainability, Extending the NSW Greenhouse Gas Abatement Scheme, Policy Paper (2006).
[57] See NSW Department of Energy, Utilities and Sustainability, above n 56.
[58] Forestry Rights Registration Act 1990 (Tas) s 3.
[59] Forestry Rights Registration Act 1990 (Tas) s 5(1), (4).
[60] Forestry Rights Registration Act 1990 (Tas) s 5(2).
[61] Forestry Rights Registration Act 1990 (Tas) s 5(3).
[62] Forestry Act 1959 (Qld) s 61J(1).
[63] Forestry Act 1959 (Qld) Sch 3.
[64] Forestry Act 1959 (Qld) s 61J(3).
[65] Forestry Act 1959 (Qld) s 61J(5).
[66] Forestry Act 1959 (Qld) s 61J(5).
[67] Forestry Act 1959 (Qld) s 61J(5).
[68] Land Title Act 1994 (Qld) s 97E.
[69] Carbon Rights Act 2003 (WA) s 5.
[70] Transfer of Land Act 1893 (WA) s 104B.
[71] Transfer of Land Act 1893 (WA) s 104G.
[72] Transfer of Land Act 1893 (WA) s 129A(1).
[73] Carbon Rights Act 2003 (WA) s 11.
[74] Transfer of Land Act 1893 (WA) s 137.
[75] Carbon Rights Act 2003 (WA) s 6(1).
[76] Carbon Rights Act 2003 (WA) s 8.
[77] See generally Lashof and Hare, above n 27.
[78] Carbon Rights Act 2003 (WA) s 10.
[79] Carbon Rights Act 2003 (WA) s 12.
[80] Carbon Rights Act 2003 (WA) s 10.
[81] Carbon Rights Act 2003 (WA) s 11(2)(g).
[82] See, Parliament of Western Australia, Parliamentary Debates, Legislative Council, 24 October 2002, at 2340 (Nick Griffiths) where the importance of registering a carbon right and carbon covenant are reinforced to ‘remove the risk that a court might find, in the event of dispute between the parties, that despite that person’s investment in the right or covenant, the right to the carbon sequestration benefits belongs to the land-holder’.
[83] Carbon Rights Act 2003 (WA) s 6(3).
[84] Carbon Rights Act 2003 (WA) s 10.
[85] Forest Property Act 2000 (SA) s 3A.
[86] Forest Property Act 2000 (SA) s 3A(2).
[87] Forest Property Act 2000 (SA) s 5(3).
[88] Forest Property Act 2000 (SA) s 6.
[89] Forest Property Act 2000 (SA) s 7(2).
[90] Forest Property Act 2000 (SA) s 7(3).
[91] Forest Property Act 2000 (SA) s 7.
[92] Forestry Rights Act 1996 (Vic) s 3.
[93] Forestry Rights Act 1996 (Vic) s 3.
[94] Forestry Rights Act 1996 (Vic) s 5.
[95] Forestry Rights Act 1996 (Vic) s 12.
[96] Forestry Rights Act 1996 (Vic) s 8.
[97] Forestry Rights Act 1996 (Vic) s 8.
[98] Forestry Rights Act 1996 (Vic) s 9.
[99] Forestry Rights Act 1996 (Vic) s 9.
[100] Gregg Marland, Kristy Fruit and Roger Sedjo, ‘Accounting for Sequestered Carbon: The Question of Permanence’ (2001) 4 Environmental Science & Policy 259.
[101] This issue is raised in Kennett, Kwasniak and Lucas, above n 24 at 190 where the authors note that ‘contractual rights that are binding only to the parties to sequestration transactions can limit flexibility and increase risk’.
[102] The circumscription which has characterised the common law approach to new forms of servitude is inconsistent with the increasing need for flexibility in the recognition and governance of natural resource interests. See Richard Epstein, ‘Notice and Freedom of Contract in the Law of Servitudes’ (1982) 55 Southern California Law Review 1353. For an example of the rigidity of the Australian approach see Permanent Trustee (1992) 27 NSWLR 426. In that case, the right in issue was a ‘licence to plant, grow, tend, harvest and prepare for sale macadamia nut trees’ on a parcel of land (at 429). Young J held that this type of right did not qualify as a profit à prendre because the subject matter taken from the land was not natural produce and a profit is confined to the fructus naturales and does not include artificially constructed products. Hence, because the nut trees needed cultivation after planting they could not amount to profits (at 432). See also Edgeworth, above n 14 at 415.
[103] The ‘restricted list of entitlements’ is outlined by Rudden, above n 14. See also Hansmann and Kraakman, above n 132 at S375. See also John Merryman, ‘Ownership and Estate: Variations on a theme by lawson’ (1974) 48 Tulane Law Review 916.
[104] Merrill and Smith, above n 14 at 3. Heller, above n 3 at 1176 states: ‘At a basic level, property law sharply restricts the allowable forms of property ownership — including, for example, the fee simple, fee tail, and servitude. One can break a fee simple into smaller fee simples, even into defeasible fee simples, but not into a fee complicated.’
[105] Merrill and Smith, above n 14.
[106] Id at 24–42. See also Rudden, above n 14, who outlines the economic argument.
[107] Merrill and Smith, above n 14 at 42.
[108] Hansmann and Kraakman, above n 13 at S397.
[109] Carol Rose, ‘The Several Futures of Property: Of cyberspace and folk tales, emissions trades and ecosystems’ (1998) 83 Minnesota Law Review 129 at 134.
[110] Merrill and Smith above n 14.9 at 3. See also Thomas Merrill and Henry Smith, ‘What Happened To Property in Law and Economics?’ [2001] YaleLawJl 34; (2001) 111 Yale Law Journal 357 at 385. Judicial reluctance does not equate to an absolute prohibition. The capacity of the courts to overcome this ‘discernible conservatism’ is explored by Edgeworth, above n 14 at 394. See also, William Swadling, ‘Opening the Numerus Clausus’ (2000) 116 Law Quarterly Review 354.
[111] See Crawford Macpherson, ‘The Meaning of Property’ in Crawford Macpherson (ed), Property: Mainstream and Critical Positions (1978) 1.
[112] See Susan French, ‘Toward a Modern Law of Servitudes: Reweaving the Ancient Strands’ (1982) 55 Southern California Law Review 1261 at 1304 where the author suggests that the ‘task of creating a modem law of servitudes is … not to change its functions, but to modernize its approach’ and this is best achieved through doctrinal simplification rather than forced legislative endorsements.
[113] In the debates for amendments to the Tasmanian legislation it was expressly recognised that the ‘concept of a carbon sequestration right does not fit within the meaning of a profit à prendre, as it is impossible to enter and take carbon sequestered from trees on another’s land, separately from taking the timber on that land.’ Tasmania, Parliamentary Debates, House of Assembly, 23 April 2002, at 43–103 (Paul Lennon). This is also discussed by Kennett, Kwasniak and Lucas, above n 24 at 206.
[114] French, above n 109 at 1264.
[115] Tulk v Moxhay (1848) 41 ER 1143 at 1144. See also the discussion in Adrian Bradbrook and Marcia Neave, Easements and Restrictive Covenants in Australia (1981) at 1–29.
[116] See generally Paul Jackson, The Law of Easements and Profits (1978) at 1–27. See also Spencer Maurice, Gale on Easements (15th ed, 1986).
[117] Herman H Hahner, ‘An Analysis of Profits à Prendre’ (1946) 25 Oregon Law Review 217 at 218. See also K Kagan, ‘Servitudes in Comparison with Easements of English Law’ [1951] 25 Tulane Law Review 336.
[118] See also Kagan, above n 114.
[119] See Kagan, above n 114. The distinction was outlined by Halsbury’s Laws of England (3rd ed, 1955) vol 12 at 522 in the following way: ‘an easement only confers a right to utilise the servient tenement in a particular manner, or to prevent the commission of some act on that tenement, whereas a profit à prendre confers a right to take from the servient tenement some part of the soil of that tenement or minerals under it or some of its natural produce, or the animals ferae naturae existing upon it’.
[120] It has been held that the word ‘appurtenant’ is the appropriate term to describe the relationship between corporeal land and incorporeal rights which accommodate it because land cannot be appurtenant to other land: Lister v Pickford [1865] EngR 698; (1865) 55 ER 757 at 759 (Romilly MR).
[121] Jackson, above n 113 at 1–27.
[122] See generally R v The Registrar of Titles; Ex Parte Waddington [1917] ArgusLawRp 99; [1917] VLR 603. For a critical evaluation of this area see Albert J McClean, ‘The Nature of an Easement’ (1966) 5 University of Western Ontario Law Review 32 at 36–42.; Michael Sturley, ‘Easements in Gross’ (1980) 96 Law Quarterly Review 557. Easements in gross are well-established interests in the United States. Easements in gross are often created in favour of local councils or State authorities in order to assist with the provision of public services.
[123] Duke of Sutherland v Heathcote [1892] UKLawRpCh 18; [1892] 1 Ch 475 (‘Duke of Sutherland’); see also Mills v Stokman [1967] HCA 15; (1967) 116 CLR 61 at 77; Re Refund of Dues Under Timber Regulations [1935] AC 184 at 193; Reid v Moreland Timber Co Pty Ltd (1946) 73 CLR 1 at 16; Australian Softwood Forests Pty Ltd v Attorney-General (NSW); Ex rel Corporate Affairs Commission [1981] HCA 49; (1981) 148 CLR 121 (‘Softwood Forests’) at 132.
[124] Softwood Forests [1981] HCA 49; (1981) 148 CLR 121 at 132.
[125] Softwood Forests [1981] HCA 49; (1981) 148 CLR 121 at 132.
[126] National Executors & Trustees Co of Tasmania Ltd v Edwards [1957] TASStRp 16; [1957] Tas SR 182 at 187 (Morris CJ); Race v Ward [1855] EngR 168; (1855) 119 ER 259 at 262 (Lord Campbell CJ).
[127] The right to enter another persons land and take away part of the soil or natural produce was outlined in Duke of Sutherland [1892] 1 Ch 545.
[128] Vanstone v Malura Pty Ltd (1988) 50 SASR 110.
[129] Vanstone v Malura Pty Ltd (1988) 50 SASR 110 at 128.
[130] Corporate Affairs Commission v ASC Timber Pty Ltd (1989) 18 NSWLR 577 at 586–92 (Powell J). See also Permanent Trustee (1992) 27 NSWLR 426 at 434–5.
[131] See Lowe (Inspector of Taxes) v JW Ashmore Ltd [1971] 1 Ch 545 at 557 (Megarry J): ‘To be a profit, the right must be a right to take part of the land or the creatures on it; what is taken must, when taken, be susceptible of ownership; and the right must be created by a transaction capable of creating an interest in land. A profit in the soil, giving the right to take sand, gravel and so on, is a well-known form of profit, and so is a profit of turbary, giving the right to dig and take turf or peat for fuel.’ On the distinction between fructus naturales and fructus industriales see Softwood Forests [1981] HCA 49; (1981) 148 CLR 121 at 132–3 (Mason J). See also Young J in Ellison v Vukicevic (1986) 7 NSWLR 104 at 113.
[132] Clos Farming Estates v Easton (2002) 11 BPR 20,605 at [59].
[133] See the discussion by Young J in Ellison v Vukicevic (1986) 7 NSWLR 104.
[134] Jackson, above n 113 at 1–27.
[135] Reid v Moreland Timber Co Pty Ltd (1946) 73 CLR 1 at 13.
[136] William Blackstone, Commentaries on the Laws of England, vol 2 (rev ed, 1825) at 20. Blackstone went on: ‘Corporeal hereditaments are the substance, which may be always seen, always handled: incorporeal hereditaments are but a sort of accidents, which inhere in and are supported by that substance; and may belong, or not belong to it, without any visible alteration therein. Their existence is merely in idea and abstracted contemplation; though their effects and profits may be frequently objects of our bodily senses. And indeed, if we would fix a clear notion of an incorporeal hereditament, we must be careful not to confound together the profits produced, and the thing, or hereditament, which produces them.’
[137] The distinction between ownership of the underlying land and ownership of an appurtenant profit was discussed in Ellison v Vukicevic (1986) 7 NSWLR 104 at 115 where the court noted that a profit does not confer exclusive possession and may arise over a piece of land where the location of the right is to be determined at a future date by the grantee.
[138] Geoffrey Cheshire, The Modern Law of Real Property (6th ed, 1949) at 256.
[139] Clos Farming Estates v Easton (2002) 11 BPR 20,605 at [57].
[140] Clos Farming Estates v Easton (2002) 11 BPR 20,605 at [58].
[141] In Alfred F Beckett Ltd v Lyons [1967] Ch 449 at 482, Winn LJ described the profit à prendre as a right to take ‘from the servient tenement some part of the soil of that tenement or minerals under it or some of its natural produce, or the animals ferae naturae existing upon it.’
[142] See the discussion by Robert Walker LJ in Bettison v Langton [2000] Ch 54 at 60–1.
[143] See the discussion by Rose, above n 106 at 135 where the author notes that ‘under conditions of scarcity, it is much more likely that the resource will respond to what the institution of property can do — that is, encourage investment and contain strife’.
[144] See Ellison v Vukicevic (1986) 7 NSWLR 104 at 113. (Emphases added.)
[145] This is discussed by Lashof and Hare, above n 27.
[146] The deeming provisions are: Conveyancing Act 1919 (NSW) s 87AB; Forestry Rights Registration Act 1990 (Tas) s 5(4).
[147] The comments of Lord Wilberforce in National Provincial Bank Ltd v Ainsworth [1965] UKHL 1; [1965] AC 1175, outlined in n 12 above, setting out that before any right or interest can be classified as proprietary it must be ‘identifiable … and have some degree of permanence and stability’ are relevant in this context.
[148] Kennett, Kwasniak and Lucas, above n 24 at 209 (Emphasis added.)
[149] It has been argued that a carbon right would not constitute property in the absence of statutory classification. See John Taberner, ‘Climate Change and the Kyoto Protocol: Practical Domestic Legal Issues’ [1998] Australian Mining and Petroleum Law Association Yearbook 479 at 490. See also Kennett, Kwasniak and Lucas, above n 24 at 187.
[150] This utility of the conservation easement in the context of Canada is discussed by Kennett, Kwasniak and Lucas, above n 24 at 198. See also Paul Thomassin, ‘Canadian Agriculture and the Development of a Carbon Trading and Offset System’ (2003) 85 American Journal of Agricultural Economics 1171.
[151] Alberta Environmental Protection and Enhancement Act RSA 2000, c E-12 ss 2–24 specifically authorise the creation of conservation easements. This is discussed by Kennett, Kwasniak and Lucas, above n 24 at 198–202. The authors at 199 note that conservation easement legislation which already exists in Canada could ‘serve as a model for sequestration legislation in that it enables agreements to specify required land use controls and sets out who is responsible for the controls and how monitoring and enforcement will secure land use obligations’.
[152] See the comments by Young J in Finlayson v Campbell (1997) 8 BPR 15,703 at 15,706–7.
[153] The need for an easement right to be clear and identifiable was outlined by Evershed MR in Re Ellenborough Park [1956] Ch 131.
[154] See generally Philbrick, above n 8. See also Michael Blumm, ‘Liberty, the New Property, and Environmental Law’ (1990) 24 University of San Francisco Law Review 385 where the author notes the proliferation of governmental regulation, particularly in the area of environmental entitlements. Harold Demsetz has stated that ‘property rights develop to internalize externalities when the gains of internalization become larger than the cost of internalization’. See Harold Demsetz, ‘Towards a Theory of Property Rights’ (1967) 57 American Economic Review 347 at 350.
[155] See Horwitz, above n 6; Kenneth Vandevelde, ‘The New Property of the Nineteenth Century: The development of the modern concept of property’ (1980) 29 Buffalo Law Review 325; Donald Large, ‘This Land is Whose Land? Changing concepts of land as property’ [1973] Wisconsin Law Review 1039 at 1082 notes that: ‘Our property concepts were developed in a time when exploitation of the land's bounty was seen as a social good to be encouraged. While these concepts may have made sense in such a milieu, we are beginning to run out of land to waste. Although many land uses will of course continue, potential uses must now be weighed against the needs of the ecosystem as a whole.’
[156] Charles Reich, ‘The New Property’ (1964) 73 Yale Law Journal 733. While Reich had in mind welfare interests created by the State, it is conceivable that carbon rights are interests founded upon public welfare and their proprietary acknowledgement is dependent upon government largesse. See a further articulation in Reich, above n 1.
[157] The fact that new property is often a variation of old property is discussed by André van der Walt, ‘The Fragmentation of Land Rights’ (1992) 8 South African Journal on Human Rights 431 at 439.
[158] The cohesive foundation of all property is examined by Alan Brudner, ‘The Unity of Property Law’ (1991) 4 Canadian Journal of Law and Jurisprudence 3 at 6–8.
[159] See Margaret Jane Radin, ‘The Liberal Conception of Property: Cross Currents in the Jurisprudence of Takings’ (1988) 88 Columbia Law Review 1667 at 1676 where the author describes ‘conceptual severance’ as a ‘strategy’ whereby strands are taken from the bundle of rights and conceptually construed as a ‘separate whole thing’. This process is also discussed by Heller, above n 3 at 1207.
[160] Heller, above n 3 at 1207.
[161] The distinction between common law and statutory land interests is considered by van der Walt, above n 154 at 437. See also Heller, above n 3 at 1201, where the author notes that ‘[a]nti-fragmentation mechanisms respond to predictable bargaining failures that lead owners to waste jointly controlled resources’. Hence, ‘[t]o be efficient as an economic institution and useful as a theoretical construct’, fragmentation of private property resources must be regulated by practical, regulatory mechanisms as well as formal boundary rules.
[162] See Carbon Rights Act 2003 (WA) s 5 which sets out that a person may lodge an approved form for registration to create a carbon right over freehold or Crown land.
[163] Tulk v Moxhay (1848) 41 ER 1143.
[164] See, for example, Real Property Act 1900 (NSW) s 13G(a) which set out that particulars of a covenant may be recorded on the title as the Registrar-General considers appropriate and the Registrar-General may remove that recording at his or her discretion.
[165] Transfer of Land Act 1893 (WA) s 4.
[166] Section 4 of the reprint of the Transfer of Land Act 1893 (WA) as at 9 February 2001; see also Acts Amendment (Carbon Rights and Tree Plantation Agreements) Act 2003 (WA) s 11(3).
[167] See Mulwala & District Services Club Ltd v Owners Strata Plan 37724 [2000] NSWSC 1040; (2000) 50 NSWLR 458. See also Perpetual Trustees & Executors Association of Australia Ltd v Hoskin [1912] HCA 31; (1912) 14 CLR 286 at 294 where Isaacs J held that an extrinsic document was no more an instrument than a ‘verse of “Omar Khayam,” or a copy of an Egyptian hieroglyphic’.
[168] See Jessica Estates v Lennard [2007] NSWSC 1175; (2007) 156 LGERA 266 at [21] where the New South Wales Supreme Court concluded that the definition of instrument in the Interpretation Act 1987 (NSW) s 3(1) was not for the interpretation of other Acts.
[169] This is set out in Carbon Rights Act 2003 (WA) s 6.
[170] This is set out in Carbon Rights Act 2003 (WA) s 8.
[171] See generally Ronald Sackville, ‘The Torrens System: Some Thoughts on Indefeasibility and Priorities’ (1973) 47 Australian Law Journal 526 at 528.
[172] Epstein, above n 100 at 1355–6.
[173] See generally Robert Stein, ‘The “Principles, Aims and Hopes” of Title by Registration’ [1983] AdelLawRw 21; (1983) 9 Adelaide Law Review 267 at 277 noting that the title should reflect the ‘location, proprietorship and area together with a clear expression of encumbrances (in this respect there may be a need to incorporate complex transactions by reference to the instrument which creates them, for example, registered easements, rent charges and profits)’. This provides a plain and detailed statement of the title, facilitating greater protection.
[174] See Alain Pottage, ‘The Originality of Registration’ (1995) 15 Oxford Journal of Legal Studies 371 at 400 where the author notes that the process of title completion and registration have ‘drifted further and further apart’.
[175] Breskvar v Wall (1971) 126 CLR 376 at [15].
[176] See generally Sackville, above n 168; Frazer v Walker [1967] 1 AC 569 at 580–1 (Lord Wilberforce).
[177] See Merrill and Smith, above n 14 at 61. The authors note that the consequence of such statutory articulation and clarity is a reduction in costs to third parties in identifying the legal dimensions of property rights.
[178] This is so despite the emerging ‘obsolescence’ of the numerus clausus assumptions. See, for example, the discussion by Edgeworth, above n 14 at 388–9.
[179] Daphna Lewinsohn-Zamir, ‘The Objectivity of Well-Being and The Objectives of Property Law’ (2003) 78 New York University Law Review 1669 at 1673 where the author suggests that novel forms of servitude may be justified in accordance with what she describes as an ‘objective theory of well-being’.
[180] For a discussion on the importance of ‘public interest’ in the privatisation of environmental interests see generally Alan Friedman, ‘The Economics of the Common Pool: Property Rights in Exhaustible Resources’ (1971) 18 University of California Los Angeles Law Review 855.
[181] See Health Insurance Commission v Peverill [1994] HCA 8; (1994) 179 CLR 226 at [10] (Mason CJ, Deane and Gaudron JJ) talking about the status of statutory ‘property’ rights as ‘inherently susceptible of variation’.
[182] Georgiadis v Australian and Overseas Telecommunication Corporation (1994) 179 CLR 297 (‘Georgiadis’) at 306 (Mason CJ, Deane and Gaudron JJ). See also Commonwealth v WMC Resources Pty Ltd [1998] HCA 8; (1998) 194 CLR 1; Minister for Primary Industries v Davey (1993) 47 FCR 151. States may acquire property without providing compensation because there is no constitutional requirement. This is discussed in PG Magennis Pty Ltd v Commonwealth [1949] HCA 66; (1949) 80 CLR 382 where the court concluded that States may acquire property pursuant to statute on whatever terms they choose, even where such terms are unjust.
[183] Georgiadis (1994) 179 CLR 297 at 306 (Mason CJ, Deane and Gaudron JJ). Their Honours continue, ‘[a] law which effected the modification or extinguishment of a right of that kind would not have the character of a law with respect to the acquisition of property within s 51(xxxi) of the Constitution’. See also the conclusions of Dixon CJ in Burton v Honan [1952] HCA 30; (1952) 86 CLR 169 at 180; Commonwealth v WMC Resources Pty Ltd [1998] HCA 8; (1998) 194 CLR 1; Minister for Primary Industries v Davey (1993) 47 FCR 151States may acquire property without providing compensation because there is no constitutional requirement: see PG Magennis Pty Ltd v Commonwealth [1949] HCA 66; (1949) 80 CLR 382.
[184] This is discussed by Scott, above n 16.
[185] This tendency is outlined by Blumm, above n 151 at 389.
[186] For a discussion of the public trust doctrine seeJoseph. Sax, ‘The Public Trust Doctrine in Natural Resources Law: Effective Judicial Intervention’ (1970) 68 Michigan Law Review 471. See also Philbrick, above n 8; Friedman, above n 177.
[187] This point is raised in Arnold, above n 11 at 332 where the author argues that the value of property is diminished if it is overloaded with too many functions and given too many rights to fulfil.
[188] The importance of protecting ‘objects’, particularly natural objects was discussed by Christopher Stone, ‘Should Trees Have Standing?: Toward legal rights for natural objects’ (1972) 45 Southern California Law Review 450.
[189] Guido Calabresi and A Douglas Melamed, ‘Property Rules, Liability Rules, and Inalienability: One View of the Cathedral’ (1972) 85 Harvard Law Review 1089 at 1093.
[190] See generally Robert H Nelson, ‘Private Rights to Government Actions: How Modern Property Rights Evolve’ [1986] University of Illinois Law Review 361.