The concept of the ownership of property necessitates an understanding of both common law ownership and equitable ownership. The term ‘property’ may be used for somewhat different meanings. A person’s ‘property’ is basically everything he owns.
Property may be divided into: Real Property i.e. land. In early law, property was deemed ‘real’ if the courts could restore to a dispossessed owner the thing itself, and not merely give compensation for its loss. Consequently, a distinction was made between ‘real property’ (or realty) and Personal Property (personalty) which was not specifically recoverable. Where property other than land was taken, the dispossessed owner could only bring a ‘personal action’ which gave the dispossessor the choice of either returning it or paying to the original owner the value thereof. It can be seen from the above that ships are personalty.
When we talk about a person’s property in goods we mean that person’s legal title i.e. his ownership at common law in those goods. For example, in English Law, the Sale of Goods Act 1979 which applies to all ‘contracts of sale’, defines a contract of sale as being a contract: ‘where the seller transfers or agrees to transfer the property in goods to the buyer’. It refers to those contracts whereby the legal title of the goods is transferred to the buyer.
Ships are goods within the meaning of the Sale of Goods Act 1979, although their sale is not governed only by the 1979 Act. Because of the complexity involved in the sale and purchase of ships, certain additional statutory specialized rules need to be observed in order that title may pass effectively from the seller to the buyer. The basic rules of contract law apply (offer; acceptance; consideration etc), with the regulatory provisions of sale of goods legislation. The relevant acts in England are
- 1979 Act
- Supply of Goods (Implied Terms) Act 1973
- Sale and Supply of Goods Act 1994
The particular nature of the sale of ships will, of course, make the application of the general legislation difficult to apply. Provisions of the merchant shipping legislation are then likely to apply. Shipbuilding contracts are non-maritime (and therefore not within the Admiralty jurisdiction) because there are few (if any) rights or duties which pertain to sea commerce and/or navigation.