Someone bringing a claim needs to first show that they are entitled to do so – i.e. “standing”. Proving standing generally means proving that the party who says they suffered the loss actually owned the property, or that they were a “bailee”.
Ownership
Ordinary ownership is reasonably straightforward and means much the same in a court as anywhere else: the person owns the property, has the right to control it, and damage to the property counts as damage to the person; however, proving ownership varies depending on the nature of the property.
In Australia, land ownership must be registered with the Land Titles Office, and that registration is conclusive proof of ownership unless another person can somehow show fraud or a similar defect in how the title registration came to be altered away from the true owner. Not only is the record in the register proof of ownership, documents to transfer ownership typically do not take effect until the transfer is registered (see, for example, section 40 of the Transfer of Land Act 1958 (Vic)). Even if a contract or deed is signed, the sale is only complete when it is recorded.
Proving motor vehicle ownership is more complex because there is no equivalent register to the Land Titles Registry. We often see Plaintiffs claim to be the “registered” owner of a vehicle because they have a registration certificate. Strictly, registration simply grants a right for that vehicle to be driven on public roads and does not prove ownership. A registration certificate is usually a good indicator that the person is probably the owner, but formal proof of ownership would typically require stamp duty forms or a signed contract of sale for the vehicle. In some rare cases, it may take a witness statement or other evidence to demonstrate that someone is the true “owner” – take for example, a classic vehicle passed down through a family over generations.
Bailment
A bailee means a borrower, a person who has the permission of the true owner to hold or use the property. A bailee will generally be responsible to the owner to maintain and protect the property, and repair any damage to it, which means that as long as a Plaintiff can prove they are a bailee, they will generally have the same standing as the owner. This was established in the Overseas Tankship (UK) Ltd v The Miller Steamship Co [1967] 2 All ER 709 (also known as The Wagon Mound (No 2)).
Proving bailment (being a borrower) requires that the Plaintiff prove who actually owns the property and then show that they were authorised to borrow the property. Usually, this comes up where a family member borrows property from another family member. The Courts will usually take the Plaintiff’s word in family situations unless there is clear evidence to the contrary.
Equitable ownership
Equitable ownership is much more involved than either ordinary ownership or bailment, and fortunately is a reasonably rare claim. In essence, equitable ownership means that the person acknowledges that they are not legally the owner of the property (i.e.: the property is held and managed by, and if relevant registered to, another person), but the person asserts a right to be treated as the owner anyway. The Courts have emphasised that there are a wide range of different types of “equitable ownership” and each has different consequences (this is discussed at length in Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) [1965] HCA 17). Situations where equitable ownership might be claimed include:
- If property is held by a family trust, a member of that family might claim to be an equitable owner.
- If a parent gives a vehicle or a house to an adult child, but formally keeps the property in the parent’s name for registration, stamp duty, taxation or other purposes, the child might claim to be an equitable owner of the property.
- If a person has a vehicle through a leasing arrangement or mortgage, the lessor or lender may still hold the legal title to the vehicle, under an agreement to transfer title on repayment, but the lessee or mortgagee still acts like an owner and generally has the same rights as the owner.
If someone claims equitable ownership then we consider that the matter warrants further investigation.
The content of this article is intended to provide a general guide to the subject matter. Specific advice should be sought about your specific circumstances.
