Property Law LAWS205

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Table of Contents The Nature, Purposes and Sources of Property.................................................................................... 11 What is Property? .................................................................................................................................. 11

Understanding property law ............................................................................................................... 11 Introduction ......................................................................................................................................... 11 Definitions of property ........................................................................................................................ 11

Assignable rights ............................................................................................................................ 11 Rights in Rem ................................................................................................................................. 11

The essential characteristics of property rights.................................................................................. 12 Enforceability .................................................................................................................................. 12 The existence of some thing ........................................................................................................... 12 Other essential characteristics ....................................................................................................... 12

Concept of Property ............................................................................................................................... 12 Recognition by the courts of property ................................................................................................ 12 Writing on the meaning of property .................................................................................................... 16

Property in thin air........................................................................................................................... 16 Protection for property ........................................................................................................................ 16 Boundary between property and contract .......................................................................................... 16 Remedies ........................................................................................................................................... 17

Personal and real property interests, land and fixtures (Part 1) ............................................................ 18 The things subject to property rights...................................................................................................... 18

Human tissue ..................................................................................................................................... 18 Property rights to living things ........................................................................................................ 18 Property rights to dead human tissue ............................................................................................. 18 Property rights to living human tissue ............................................................................................ 18

Information.......................................................................................................................................... 19 Freedom of information .................................................................................................................. 19

Creating Rights ...................................................................................................................................... 19 Introduction ......................................................................................................................................... 19 Creation of rights ................................................................................................................................ 19

Consent........................................................................................................................................... 19 Wrongs............................................................................................................................................ 19 Unjust Enrichment .......................................................................................................................... 20 Other events ................................................................................................................................... 20 Importance of Taxonomy ................................................................................................................ 20

Creation of property rights .................................................................................................................. 20 Consent and Transfer ..................................................................................................................... 20 Operation of Law ............................................................................................................................ 20

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Creation of trusts ................................................................................................................................ 20 Title to Goods, Ideas, Financial Instruments and Virtual Property ........................................................ 21

Interests in goods ............................................................................................................................... 21 Estates and Trusts .......................................................................................................................... 21 Security interests ............................................................................................................................ 21

Establishing title to goods .................................................................................................................. 23 The basic principle .......................................................................................................................... 23

Disentitling conduct by owner ............................................................................................................ 23 Sales by a mercantile agent ............................................................................................................... 25 Notes .................................................................................................................................................. 25 Sales by persons with a voidable title ................................................................................................ 25 Other exceptions to the nemo dat rule ............................................................................................... 26

Personal and Real Property Interests, Land and Fixtures (Part 2) ....................................................... 26 Distribution of Property .......................................................................................................................... 26

Public property ................................................................................................................................... 26 Private property .................................................................................................................................. 28

Taxonomy .............................................................................................................................................. 28 Land and Goods ................................................................................................................................. 28 Real and personal .............................................................................................................................. 28 Legal and equitable ............................................................................................................................ 29 Tangible and intangible ...................................................................................................................... 29 Property creating events .................................................................................................................... 29

Rights to Intangible Things .................................................................................................................... 30 Intellectual property ............................................................................................................................ 30

Forms of expression ....................................................................................................................... 30 Scientific Advances......................................................................................................................... 30 Reputation....................................................................................................................................... 31 Confidential information .................................................................................................................. 31

Company shares ................................................................................................................................ 32 What is a company? ....................................................................................................................... 32 What is a share? ............................................................................................................................. 32 Is a share property? ........................................................................................................................ 32 Right to dividends ........................................................................................................................... 32 Right to assets on dissolution ......................................................................................................... 32 Right to vote .................................................................................................................................... 33

Scope and Meaning of Real Property .................................................................................................... 33 Fixtures ............................................................................................................................................... 33

The annexation issue...................................................................................................................... 33

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Tenants’ rights to remove fixtures .................................................................................................. 34 Ownership of Airspace ....................................................................................................................... 34

The conveyance of airspace ........................................................................................................... 34 Extent of surface landowner’s right to airspace.............................................................................. 34

Ownership of subsoil .......................................................................................................................... 35 Land boundaries ................................................................................................................................. 36 Encroachments .................................................................................................................................. 36

Buildings erected under mistake of title .......................................................................................... 36 Encroachments by buildings onto adjoining land ........................................................................... 37

Possession, Seisin and Ownership in Real and Personal Property, and Adverse Possession ............ 38 Possession ............................................................................................................................................. 38

What is possession? .......................................................................................................................... 38 Control ............................................................................................................................................ 38 Intention to possess ........................................................................................................................ 38

Importance of possession .................................................................................................................. 38 Ownership, Title, and Possession ...................................................................................................... 39 Obtaining possession ......................................................................................................................... 39

Possession acquired by consent .................................................................................................... 39 Possession acquired without consent ............................................................................................ 39

Competing Claims to Possession .......................................................................................................... 39 Breach of duty .................................................................................................................................... 39

Trespass ......................................................................................................................................... 39 Conversion ...................................................................................................................................... 39

Responses to breach of duty ............................................................................................................. 40 Direct enforcement ......................................................................................................................... 40 Damages......................................................................................................................................... 40

Rights to possession .......................................................................................................................... 40 Obtaining the right to possession ................................................................................................... 40 Relativity of property Rights ............................................................................................................ 40 Lost and found ................................................................................................................................ 41 Master and servant ......................................................................................................................... 41

Possession ............................................................................................................................................. 41 Concept of Possession....................................................................................................................... 41 Possession as a source of title to goods ............................................................................................ 41

Taking possession .......................................................................................................................... 41 Possession of objects in or on land ................................................................................................ 42 Abandonment of possession .......................................................................................................... 43

Rights flowing from possession of land .............................................................................................. 43

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The relationship between possession and title: Does possession give rise to a presumptive title? ........................................................................................................................................................ 44

The limitation principle: adverse possession ..................................................................................... 45 Commencement of limitation period ............................................................................................... 45 Running of the limitation period ...................................................................................................... 45

Notes from the lecture:........................................................................................................................... 46 Introductory Concepts ........................................................................................................................ 46

1. Ownership .............................................................................................................................. 46 2. Custody .................................................................................................................................. 46 3. Possession in Law ................................................................................................................. 46

Possession of Goods ......................................................................................................................... 46 1. Chattels .................................................................................................................................. 46 2. Finders ................................................................................................................................... 48

Possession of Land: Rights Flowing from Possession ...................................................................... 49 Difficulties with Possession ................................................................................................................ 49

Legal and Equitable Interests in Property (Part 1)................................................................................. 50 Ownership .............................................................................................................................................. 50

Introduction ......................................................................................................................................... 50 Ownership and Possession ................................................................................................................ 50 Bundle of rights .................................................................................................................................. 50 Alienability .......................................................................................................................................... 51 Responsibilities of Ownership ............................................................................................................ 51

Duty to prevent harm ...................................................................................................................... 51 Liability to execution ....................................................................................................................... 51

Tenure .................................................................................................................................................... 52 Introduction ......................................................................................................................................... 52 Feudalism ........................................................................................................................................... 52 Evolution from tenure to Ownership ................................................................................................... 52

Abolition of Subinfeudation ............................................................................................................. 52 Elimination of Feudal Services ....................................................................................................... 52 Nature of the Crown’s Right to Land .............................................................................................. 53

Legal and Equitable Interests in Property (Part 2)................................................................................. 53 Equitable Rights ..................................................................................................................................... 53

Introduction ......................................................................................................................................... 53 Development of equitable property rights .......................................................................................... 54 Equity today ........................................................................................................................................ 54 Specific performance.......................................................................................................................... 54 Injunctions .......................................................................................................................................... 54

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Trusts .................................................................................................................................................. 54 Trustees .......................................................................................................................................... 55 Trust assets .................................................................................................................................... 55 Trust objects ................................................................................................................................... 55 Trust powers ................................................................................................................................... 56 Powers of appointment ................................................................................................................... 56 Beneficial ownership ....................................................................................................................... 57 Types of trust .................................................................................................................................. 57 Development of the trust ................................................................................................................ 58 Modern uses of the trust ................................................................................................................. 58

Nature of equitable property rights ..................................................................................................... 58 Security Rights ....................................................................................................................................... 59

Introduction ......................................................................................................................................... 59 Reasons for taking security rights ...................................................................................................... 59 Types of security rights ...................................................................................................................... 59

Possession ..................................................................................................................................... 59 Ownership ....................................................................................................................................... 60 Encumbrance .................................................................................................................................. 60

Mortgages........................................................................................................................................... 61 Intervention of equity .......................................................................................................................... 62 Mortgages and trusts.......................................................................................................................... 62 Torrens Mortgage ............................................................................................................................... 62

Substance over form....................................................................................................................... 63 Shared Rights ........................................................................................................................................ 63

Introduction ......................................................................................................................................... 63 Four unities ..................................................................................................................................... 63 Unity of possession......................................................................................................................... 63

Agreements regarding the use of shared rights ................................................................................. 63 Sharing non-possessory rights ........................................................................................................... 63

Unity of interest ............................................................................................................................... 64 Unity of title ..................................................................................................................................... 64 Unity of time .................................................................................................................................... 64

Sharing the benefits and burdens of ownership................................................................................. 64 Wrongdoing .................................................................................................................................... 64 Unjust enrichment ........................................................................................................................... 64 Statute............................................................................................................................................. 64

Survivorship ........................................................................................................................................ 64 Corporations ....................................................................................................................................... 65

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Order of death .................................................................................................................................... 65 No survivorship ................................................................................................................................... 65 Creation of shared ownership ............................................................................................................ 65

Common law ................................................................................................................................... 65 Statute............................................................................................................................................. 65 Equity .............................................................................................................................................. 65

Severance and partition ..................................................................................................................... 66 Severance of a joint tenancy .......................................................................................................... 66

Competing Rights .................................................................................................................................. 67 Introduction ......................................................................................................................................... 67

Priority of Legal Rights ........................................................................................................................... 67 Nemo dat ............................................................................................................................................ 67 Innocent Purchases............................................................................................................................ 67 Careless owners ................................................................................................................................. 67 Exceptions to nemo dat ...................................................................................................................... 68 Exceptional Transactions ................................................................................................................... 68 Less Durable Rights ........................................................................................................................... 71

Priority of Equitable Rights..................................................................................................................... 73 Introduction ......................................................................................................................................... 73 Nature of Equitable Property rights .................................................................................................... 73 Bona Fide Purchase ........................................................................................................................... 73

Effect of the defence ....................................................................................................................... 73 Elements of the defence ................................................................................................................. 74

Notice ................................................................................................................................................. 75 Actual notice ................................................................................................................................... 75 Constructive notice ......................................................................................................................... 75 Imputed notice ................................................................................................................................ 76 Knowledge and notice .................................................................................................................... 76

Competing Equitable Property Rights ................................................................................................ 77 First in time ..................................................................................................................................... 77 Postponing the older right ............................................................................................................... 77 Express trust ................................................................................................................................... 78 Mere equities .................................................................................................................................. 78

Resolving Priority Disputes ................................................................................................................ 81 Identify the competing rights ........................................................................................................... 81 Where the older right is legal .......................................................................................................... 81 Where the older right is equitable ................................................................................................... 81

Tenure and Estates ................................................................................................................................ 82

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Estates ................................................................................................................................................... 82 Introduction ......................................................................................................................................... 82 Freehold Estates ................................................................................................................................ 82

Fee simple ...................................................................................................................................... 83 Fee tail ............................................................................................................................................ 83 Life estate ....................................................................................................................................... 83

Leasehold estates .............................................................................................................................. 83 Relationship between landlord and tenant ..................................................................................... 83 Duration .......................................................................................................................................... 85

Other Estates ..................................................................................................................................... 86 Perpetual Lease .............................................................................................................................. 86 Strata title ........................................................................................................................................ 86

Possession ......................................................................................................................................... 86 Future Interests .................................................................................................................................. 86

Contingent Remainders .................................................................................................................. 86 Rule against perpetuities ................................................................................................................ 87 Waste .............................................................................................................................................. 87

Foundational Concepts of Land Ownership: Tenures, Estates, Trusts and Priorities ........................... 87 The doctrine of tenure ........................................................................................................................ 87 Doctrine of estates ............................................................................................................................. 89 Determinable and conditional interests .............................................................................................. 89 Equitable interests – the development of the trust ............................................................................. 90

The trust .......................................................................................................................................... 90 Priorities under the general law land system ..................................................................................... 90 Prior equitable interest against subsequent legal interest ................................................................. 90 Prior legal interest against subsequent equitable interest ................................................................. 91

Native Title ............................................................................................................................................. 92 Native Title ............................................................................................................................................. 92

What is native title? ............................................................................................................................ 92 Rights to land or waters...................................................................................................................... 92 Recognised by Australian Common law ............................................................................................ 92 Traditional Laws and Customs ........................................................................................................... 92 Indigenous Inhabitants of Australia .................................................................................................... 93 Communal, Group or Individual Rights .............................................................................................. 93 Native title in Australian law ............................................................................................................... 93

Native title and Sovereignty ............................................................................................................ 93 Native title and Tenure.................................................................................................................... 94 Proof of Native title ......................................................................................................................... 94

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Public Lands and Land Rights of Indigenous Peoples .......................................................................... 96 Grants of Public Land ......................................................................................................................... 96 Recognition of Native Title ................................................................................................................. 97 The nature and incidents of native title .............................................................................................. 97 The extinguishing of native title .......................................................................................................... 97

Leases and Licences ............................................................................................................................. 98 Licences ................................................................................................................................................. 98

Introduction ......................................................................................................................................... 98 Categories of licences ........................................................................................................................ 98

Bare licence .................................................................................................................................... 98 Contractual licence ......................................................................................................................... 99 Licence coupled with an interest .................................................................................................... 99

Personal right or property ................................................................................................................... 99 Is the right recognised as property? ............................................................................................... 99 Intention to create property ...........................................................................................................100 Steps needed to create property ..................................................................................................100

Enforcing the Licence .......................................................................................................................100 Enforcing the Licence against the grantor ....................................................................................100 Enforcing the Licence against others ...........................................................................................101

Leases ..................................................................................................................................................101 Introduction .......................................................................................................................................101 Types of leases ................................................................................................................................101 Legal and equitable ..........................................................................................................................102 Fixed term.........................................................................................................................................103 Periodic.............................................................................................................................................103 Characteristics of a lease .................................................................................................................105 The rights and duties of landlords and tenants ................................................................................105

Express terms ...............................................................................................................................105 Implied terms ................................................................................................................................105

Assignments and subleases ................................................................................................................107 Legal status of assignees and covenantees in relation to the enforceability of covenants .............108

The determination of leases ................................................................................................................108 Contractual remedies ...........................................................................................................................109 Leases and the Torrens system ..........................................................................................................110

The registration of leases .................................................................................................................110 Leases as a statutory exception to indefeasibility of title .................................................................110

Easements and Covenants ..................................................................................................................111 Non Possessory Rights to Land ..........................................................................................................111

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Profits a Prendre ..............................................................................................................................111 What things ...................................................................................................................................111 Profit a Prendre or sale of goods ..................................................................................................112 Duration ........................................................................................................................................112

Easements........................................................................................................................................112 Benefit of nearby land ...................................................................................................................112 Rights which can be easements ...................................................................................................113 Creation of easements..................................................................................................................114 Changes in use .............................................................................................................................115

Restrictive covenants .......................................................................................................................115 Compared to other property rights................................................................................................115 Privity of contract ..........................................................................................................................116 Rights which can be restrictive covenants ...................................................................................117 Attaching covenants to land .........................................................................................................117

Pastoral rights ..................................................................................................................................118 Possession ...................................................................................................................................118 Property ........................................................................................................................................118

Mineral rights ....................................................................................................................................118 The crowns right to minerals ........................................................................................................119 Right to explore for minerals .........................................................................................................119 Right to take minerals ...................................................................................................................120

Scope and Meaning of Real Property ..................................................................................................120 Fixtures .............................................................................................................................................120

The annexation issue....................................................................................................................120 Tenants’ rights to remove fixtures ................................................................................................122

Ownership of Airspace .....................................................................................................................122 The conveyance of airspace .........................................................................................................122 Extent of surface landowner’s right to airspace............................................................................122

Ownership of subsoil ........................................................................................................................123 Land boundaries ...............................................................................................................................124 Encroachments ................................................................................................................................125

Buildings erected under mistake of title ........................................................................................125 Review .................................................................................................................................................126 Land Use Agreements: Restrictive and Positive Covenants ...............................................................126 Restrictive Covenants ..........................................................................................................................126 The passing of the burden and benefit of covenants ..........................................................................126

Passing of the burden ......................................................................................................................126 Passing of the benefit .......................................................................................................................126

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Discharge and Modification of Restrictive Covenants .........................................................................127 Application to court ...........................................................................................................................127 Agreement ........................................................................................................................................127 By unity of ownership .......................................................................................................................127 By laches or acquiescence ..............................................................................................................128 By subdivision legislation .................................................................................................................128

Remedies for breach of covenant ........................................................................................................128 Planning agreements ...........................................................................................................................128 Positive covenants ...............................................................................................................................128

Parties to the covenant.....................................................................................................................128 Covenants at law ..............................................................................................................................128

Passing of the benefit of a covenant ............................................................................................128 Passing of the burden of a covenant ............................................................................................128

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The Nature, Purposes and Sources of Property

What is Property?

Understanding property law • Tangible and intangible things can be subject to property rights

When dealing with property rights there are three basic things which should be answered:

1. What sort of right is it 2. How was it created 3. What priority does it have

Introduction Property rights are rights to things

• Identify the kinds of things which the law regards as property rights • Identify the kinds of things which can be subject to those rights

Definitions of property • Property, things that people own. • There are personal and property rights. Whether a rights is personal or property depends on

why it matters. • Property right is a right to a thing which can be enforced generally against other members of

society and not just against specific persons

Assignable rights • At its widest, property means any right that can be transferred from one person to another. • For most purposes the definition of property is based on the enforceability of rights and not

their assignability

Rights in Rem • In personam - person • In rem - thing • Rights in rem are rights people have concerning particular things, without much regard to the

people against whom those rights might be enforced • For most purposes, the distinction between personal rights and property rights is based on

their enforceability. It corresponds to the distinction between rights in personam and rights in

rem (Latin words meaning person and thing).

• Rights in personam are so called because they are enforced against particular persons,

without much regard to the things they might have.

• Rights in rem are rights people have concerning particular things, without much regard to the

people against whom those things might be enforced.

• Property law is primarily about rights in rem

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• A right in rem depends upon the continued existence of the thing to which the right relates. A

right in personam does not depend on the existence of any particular thing. Instead, it

corresponds to some person’s obligation to fulfil that right. The value of the right in personam

depends upon the ability of the person to perform the corresponding obligation.

A right in rem depends upon the continued existence of the thing to which the right relates

The essential characteristics of property rights • Property rights always relate to and depends on the existence of some particular thing • The second is that a property right can be enforced not just against specific persons but

against a wide range of persons

Enforceability • Property rights, like all legal rights are also enforced against persons. However unlike

personal rights ,there are no specific persons responsible for their fulfilment

The existence of some thing • An essential characteristic of property rights is that they are enforceable generally against

other persons in society • Property rights must relate to things which are spate and apart from ourselves • Things which are intrinsically connected to us, such as our bodies and reputations, cannot be

subject to property rights.

Other essential characteristics • So far a property right has been identified as a right to a thing which corresponds to a general

duty placed on other members of society not to interfere with that right • Alienability

o It is sometimes said that property rights are alienable meaning that they can be sold or given away to others

o All property rights can be described as ‘alienable’ if that term is understood to mean ‘disposable’ rather than ‘transferable’. Since property rights must relate to something which is only contingently connected to the right holder it must be possible for that person to alienate the thing in the sense of serving her or his connection to it. However that connection can be severed without transferring the right to another

• Excludability o Excludability meaning that the holder of a property right is able to exclude others from

making use of the thing subject to that right • Value

o They usually have some market value

Concept of Property

Recognition by the courts of property

Davis v Commonwealth • Facts

o In Davis (1988), the plaintiffs challenged certain sections of the Australian Bicentennial Authority Act 1980 (Cth) as unconstitutional, and argued that section 83 of the Constitution did not authorise the appropriation of money for the purposes of the Bicentennial Authority or for the celebration of the Bicentenary. Section 22 of the

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Act prohibited the use of certain terms and symbols (such as '1788', '1988') without the consent of the Authority.

• It is only the use of the second of the plaintiffs devices that would expose the plaintiffs to liability for the commission of offences against s22(1)a, b, c in the absence of the written consent of the authority

• Held o Beyond the powers of the government

Victoria park Racing and Recreation Grounds Co Ltd v Taylor • Facts:

o The plaintiff owned Victoria Park, a racing track which charged admissions to people who placed bets on the races. The racecourse was surrounded by a very high fence. Taylor, who had a house and front yard adjacent to the course, allowed the radio broadcasting station 2UW to construct a five-metre high platform on scaffolding from which someone could see into the course and broadcast – with the help of binoculars — the races and information about horses posted at the ground, which facilitated unregulated off-track betting. Attendance at the ground plummeted.

• Issue o This case considered the issue of nuisance and whether or not a racetrack was

entitled to prevent a man who lived next to the racecourse from viewing and broadcasting the races from a platform constructed in his backyard.

• Held at high court o In a 3-2 decision, the appeal was dismissed as no wrong was committed that was

known to the law

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o There was no property in a spectacle ▪ I find difficulty in attaching any precise meaning to the phrase "property in a

spectacle." A "spectacle" cannot be "owned" in any ordinary sense of that word. Even if there were any legal principle which prevented one person from gaining an advantage for himself or causing damage to another by describing a spectacle produced by that other person, the rights of the latter person could be described as property only in a metaphorical sense.

o The case was notable for rejecting the concept of quasi-property

Kent v Johnson • Facts

o The Commonwealth Government's proposal to construct the Black Mountain Tower in Canberra. The tower was to provide communication services as well as a restaurant and public viewing facilities. The plaintiffs argued that the Government did not have the power to construct the tower. In his decision, Chief Justice Barwick stated that there was clear statutory authority for construction of the tower to provide communication services.

• Findings o The interest of even a broad section of the community in the enjoyment of a particular

skyline does not constitute a right in the public of such a nature that invasion of it constitutes a public nuisance.

o For recognition of such interests by law statutory provisions are necessary

Stow v Mineral Holdings (Australia) Pty Ltd Public right is not a property right (does not give sufficient proprietary interest to make an objection

• Facts o Respondent was mining on land adjacent to the South West National Park in

Tasmania. o Appellant lodged objections to mining with the warden on the grounds that

prospecting or mining would damage the Park. o Warden concluded that the evidence suggesting that mining would have a deleterious

effect was “overwhelming’ and refused to grant the respondents a prospector’s licence.

o Respondent’s appeal was successful in appeals to the Supreme Court and Full Court • Issue

o Did the appellants (bushwalkers, campers and naturalists) have a sufficient proprietary interest to make an objection? NO –the rights of the bushwalkers and others were ‘public rights

• Held o Issue is whether the Mining Act confers power on the warden and the effect of an

order made by him. o Warden has no power whatever to accept or reject an application –this is a power

vested in the Minister who is to act upon the recommendation of the Director of Mines.

o The Minister should determine whether as a matter of policy it is desirable that the licence should be granted or refused – “weigh up the relative merits of the economic advantages said to flow from the successful establishment of a mining operation and the other competing contentions as to what it is, in the public interest, a suitable use to which the land may property be put…”

o The objectors did not have an estate or interest in the land and none of them claimed to do so. Estate or interest in land is an estate or interest of a proprietary nature in the