Table of ContentsAirspace..................................................................................................................................4

Subsoil (Ad Inferos)..........................................................................................................................6

Encroachment.........................................................................................................................6

Strata Property........................................................................................................................7

Fixtures...................................................................................................................................8

Water Rights..........................................................................................................................10

Accretion and Erosion............................................................................................................14

Support.................................................................................................................................16

Equity....................................................................................................................................17Equitable Interests..........................................................................................................................17Equitable Maxims...........................................................................................................................17

Freedom of Alienation (selling; transferring).........................................................................18

Relationship between Real and Personal Property.................................................................19

Crown Grants........................................................................................................................20Rights Reserved--Land Act, s 50(1)(a)—...........................................................................................20

Sale of Land (Inter Vivos Transfer).........................................................................................211. Contract of purchase and sale: Law and Equity Act, s 59:.............................................................212. Completion/Closing....................................................................................................................213. Registration of transfer (+ mortgage to finance purchase)...........................................................21

Inter Vivos Gifts.....................................................................................................................23

Incomplete Gifts....................................................................................................................24Presumptions of transfers to volunteers.........................................................................................25

Wills: Testate Disposition......................................................................................................26Validity Requirements:.......................................................................................................................26

Lapsed Gifts:...................................................................................................................................27

Intestate Disposition.............................................................................................................28

Mental Capacity for Disposition.............................................................................................29Minors............................................................................................................................................29People lacking mental capacity.......................................................................................................29

Proprietary Estoppel..............................................................................................................30Test of unjust enrichment...............................................................................................................30

Equitable damages vs. injunction/specific performance........................................................31A. Building/fence encroaching on land/airspace (Property Law Act, 36)..........................................31

1

B. Any other situation: injunction, unless… (Shelfer Test) Kelsen................................................31C. Unjust enrichment......................................................................................................................31D. Proprietary estoppel...................................................................................................................31

Leases....................................................................................................................................32Short-term lease (<=3 years)...........................................................................................................32Long term lease (>3 years)..............................................................................................................32Assignment/Sublease/Novation.....................................................................................................32

Trusts....................................................................................................................................33

Torrens System......................................................................................................................34Torrens Principles:..........................................................................................................................34

Mirror principle..................................................................................................................................34Curtain principle (s.29(2))...................................................................................................................34Assurance principle............................................................................................................................34Advantages:........................................................................................................................................35

Torrens Process.....................................................................................................................35The Cadastral Concept....................................................................................................................35Previous Systems............................................................................................................................36Fee Simple......................................................................................................................................36

Effect of Registration.............................................................................................................37What can be registered?.................................................................................................................37What cannot be registered?............................................................................................................37

Fee Simple & Indefeasibility..................................................................................................38Indefeasibility.................................................................................................................................38Exceptions to indefeasibility - statutory..........................................................................................38Adverse Possession.........................................................................................................................40

Registration of Title...............................................................................................................41Duplicate Certificate of Title...........................................................................................................41

Charges.................................................................................................................................42Effect of Registration..........................................................................................................................42

Builder’s Lien..................................................................................................................................45Caveat............................................................................................................................................47Easements......................................................................................................................................47Certificate of Pending Litigation......................................................................................................48Judgments......................................................................................................................................49Mortgages......................................................................................................................................50Equitable Mortgages.......................................................................................................................51

Assurance Fund.....................................................................................................................52Who can make a claim?......................................................................................................................52

Unregistered Interests (Against Person).................................................................................55

Fraud (Exception to Indefeasibility).......................................................................................59Fraud against registered owner (forgery)........................................................................................59

Effect of registration of void instrument (LTA, s 25.1)........................................................................59

2

Fraud against holder of unregistered interest.................................................................................61

In Personam Claims (Exception to Indefeasibility)..................................................................65

Applications to Register.........................................................................................................66

FEE SIMPLE............................................................................................................................68Creation of Fee Simple....................................................................................................................68Repugnancy in disposition..............................................................................................................69

Life Estate..............................................................................................................................72Creation of life estate:....................................................................................................................72Rights of a life tenant:.....................................................................................................................72Responsibilities of a life tenant:......................................................................................................73

1. Responsibility of LT: Refrain from Waste........................................................................................732. Responsibility of LT: Liability for Taxes, Insurance, etc...................................................................73

Waste....................................................................................................................................74Vane v Lord Barnard, 1716.................................................................................................................74New Westminster v Kennedy.............................................................................................................75

Co-Ownership up to page 11-8..........................................................................................76Tenants in Common........................................................................................................................76Joint tenant....................................................................................................................................77

Aboriginal Title......................................................................................................................78Basic Principles...............................................................................................................................78Aboriginal Rights............................................................................................................................79Aboriginal Title...............................................................................................................................79Features of Aboriginal Title (Delgamuuwk).....................................................................................80Test for AT (Delgamuuwk):.............................................................................................................80Duty to consult (Tsilhqo’tin)............................................................................................................81Extinguishment & Infringement......................................................................................................81Evidence.........................................................................................................................................82

Table of Cases........................................................................................................................83

Legal Concept of landProperty as a “bundle of rights” : Right to Exclude: the right to exclude others within limits;Right of Transfer [Alienability]: the right to sell, lease or gift.Right of Possession: The right to live in or on land.Right of Enjoyment: The legal use of property by the owner.Equity’s Darling: The BFPVw/oN.Interpretation Act, RSBC 1996, c 238, s 29 : “land” includes any interest in land, including any right, title or estate in it of any tenure, with all building and houses, unless there are words to exclude building and houses, to restrict the meaning.

3

Airspace 1. Airspace rights belong to owner of surface (Kelsen)

o Airspace invasion a trespass (actionable per se): Kelseni. Trespass: deliberate entry to property without consent of owner

o see test for equitable damages2. Rights extend only to height of ordinary use and enjoyment (Bernstein)

o Above this could be nuisance: interference with use or enjoyment of property3. Airspace is land, and may be sold, subdivided, etc. (Land Title Act - below)

Misc. class notes: Air space parcels may project over water (e.g. Vancouver terminal) Airspace parcels may be underground Things that require easement/licence for use of airspace:

o Signs overhanging sidewalkso Booms on cranes above propertyo Utility lines (generally have statutory easements)

owner of property has right to fell overhanging branches, and to remove protruding roots, of a tree on a neighboring property

o owner of property is supposed to return felled branches to owner of tree Neighbors have no right to to erect structures overhanging or passing over their neighbors’ land

Kelsen v Imperial Tobacco 1957 EngCA Tobacco shop sign; D had permission from owner, not lessee (Kelsen); injunction granted.

Sign hanging over plaintiff’s property; as a leaseholder, plaintiff had exclusive possession of the property for the time of the lease and the right of exclusion. Plaintiff “owned” the airspace the sign was occupying; claims trespass. Court ordered an equitable injunction to remove the sign—to avoid sanctioning the indefinite continuance of a wrong. Ownership of land includes airspace—invasion amounts to trespass.

Ratio: Airspace rights belong to owner of land below (cujus est solum ejus est usque ad coelem)

Decision: Trespass—Injunction ordered because damages would have allowed sign to stay up

Shelfer test to determine whether equitable damages should be substituted for an injunction or specific performance: 1. Is the injury to the plaintiff's legal rights small? (Yes)2. Is it capable of being estimated in money? (Yes)3. Can it be adequately compensated by a small money payment? (No)4. Would it be oppressive to the defendant to grant an injunction? (No - Imperial Tobacco had received good value

for its investment in the sign.)All requirements must be met. Most cases where damages are granted are accidental trespasses.

Lord Cairn’s Act: Equitable damages (damages that deal with the future and past) can be given in substitution for an injunction.

Laches: Because the situation had changed (from 4" to 8" encroachment), his delay was not unreasonable waiting too long to have right remedied.

4

Bernstein v Skyviews , 1977 QB Aerial photos; P sues D for trespass; no trespass found restricts cujus est soelemP operated aerial photography company and took a picture of D’s house

Ratio: Air space rights extend only to the height necessary for ordinary use and enjoyment of the land and the structures on it-- not by what the plaintiff is actually using, but what the plaintiff could use.No action in trespass results from reasonable flight of aircraft over airspace. If not reasonable, could be nuisance.

“Use and enjoyment”what P could use, not what is being used

Above that height, property owner has no greater right to the airspace than members of the general public. Vague standard. Above this limit, could be nuisance (noise, air pollution)

Land Title Act

Air space parcels=s 138: 3D parcel of land S.139: airspace parcels are land and lie in grant S. 140: do not automatically grant an easement for access to parcel – requires an easement. Title of the

airspace around the plan still belongs to the title holder s. 141(1):Owner in fee simple may create many parcels and get indefeasible title in them. These parcels

may be dealt with just like regular land. Done by registering plan s 141(2): may be transferred, leased, mortgaged, etc. s 141(3): may be subdivided s 142: may be created above highways by the Crown or municipality s 143: Rules for depositing an air space plan

LAND TITLE ACT, RSBC 1996, c 250 p1-16 s 138—DEFN: An airspace parcel is a 3D parcel of land. Airspace plan is described in the title as a plan for how

airspace is divided. Parcel must be on a plan and a plan may have several parcels. s 139 – AIR SPACE IS LAND –air space constitutes land and lies in grant s 140(1)—NO EASEMENT grant of AS parcel does not transfer an easement, covenant restrictive of use, … s 140(2)—Airspace around parcel lies w/ grantor unless expressly granted, title to AS above/AS below parcel

remain with grantor s 141: SUBDIVISION

o 1) owner in fee simple may create 1>= AS parcels and get indefeasible titles in them o 2) AS parcel may be transferred, leased, mortgaged or otherwiseo 3) AS parcel may be subdivided with Strata Property Act

s 142(1): HIGHWAYS – may create AS parcel over highway, obtain municipality permission if possession vested in them – like walkways at Pacific Centre

o (2) MUNICIPALITIES Lt Gov w/ minister of Transportation Act, may authorize municipality to create AS parcels

o (3) highway title vested in municipality, municipality may apply w/ bylaw for reg of title and then create AS parcels

s 143(1): AIR SPACE PLAN AS plan not accepted unless a) title to land AS parcels part is registered in register of indefeasible fees, and b) land which AS parcels is part is shown as single parcel on a subdivision plan deposited

o (2) if ok, assign the plan a serial deposit number and register new indefeasible titles for AS parcels

5

Subsoil (Ad Inferos) does not cover to center of earth Bernstein applies above surface because of advances in airspace and communications—there are no analogous

human activities underground Bocardo 2010 UKSC: ad inferos extends ownership of the subsurface to an undefined depth below which

physical factors such as heat and pressure from the Earth’s core would render impractical and “absurd” a claim of ownership to deeper substrata

o Entry to subsurface at depth between 800-2800 feet below the surface constituted trespass in this case when oil/gas company drilled underneath property

Under English Common law, crown retains mineral rights even while they are in the ground. Must be expressly transferred

Encroachment Property Law Act, s 36: when encroachment involves a building or fence of another adjacent titleholder meant to supplant and improve equity by giving judges greater discretion

36(1) – owner for s 36 includes a person with an interest in, or right to possession of land36(2) – if on survey, building encroaches, or fence improperly located to enclose, SC may on application:

a) – an easement for encroacher and compensation for person encroachedb) – vest title to land encroached/enclosed in owner encroaching/enclosing, for compensation determined by the courtsc) – order removal of encroachment or fence – mandatory injunction

Application Courts take a braod equitable approach to the application of s 36 (Gainer v Widsten, 2006, BCCA) Courts expand the scope of “building” to include a sidewalk, septic tank, retaining wall, stone patio or koi pond:

Watson v Charlton, 2016 BCSC, West Vancouver v Liu 2016 BCCA) To resolve dispute, courts exercise statutory discretion on equitable considerations of the balance of

convenience and the equities b/t parites, trying to achieve a just result. Factors include: financial cost and hardship to the parties, conduct of the parties, knowledge of the

encroachment by the parties, size, nature and duration of the encroachment, value of the properties and even degree of animosity b/t parties as incompatible neighbors.

In Gainer case, courts take an expansive approach of s 36 by ordering transfer of entire property encroached upon to the encroaching neighbor, partly because of hostility b/t parties

6

Strata Property Starta corp. manages building (no ownership); hires building managers to fix common property; manages

conringency fund for unexpected emergencies Owner may subdivide air space above land, and therefore, it is possible for different owners to own different

floors or rooms in a building Land Title Act (above) outlines how airspace parcelling and planning function; airspace constitutes land; like

land, it can be registered in title. The Act allows for a division of fee simple, leasehold, or airspace into strata lots. Registration of “strata plan” in the LTO.

Under strata title: each owners owns his or her own personal space, and jointly owns common areas with other owners

Misc. Class Notes Property tax/strata fees: calculated in accordance with the portion of the strata (unit square footage/total

square footage) that you own ie. If you own 1/8th of strata, responsible for 1/8th of tax and cost of maintenance Voting rights are on a per unit basis (each unit gets one vote within the strata corporation) if strata unit owners wish to tear down entire building, then they need 80% consensus strata corporation is a legal person: passes bylaws and rules; often hires bulding management company;

charges fees for common expenses or special assessments hierarchy of power in strata corp.: unit owners (shareholders) strata council: elected from unit holders (board

of directors) property management (management) common property def.: exterior walls and roof; hallways, lobby stairways and elevators; amenities e.g.

clubhouse, tennis courts, golf courses, etc.; plumbing, heating and cooling systems; parking areas (unless otherwise allocated) and garages

Strata Property Act , SBC 1998, c48:

s 1: Bare land strata plan = boundaries on a horizontal plane w/ ref to survey markers s 66: Each strata lot (individual unit) owner owns the common property in proportion to the size of their

unit. S 67: Parcel of land = unit + inseparable share of common property/assets

o Tax assessment: each strata lot + share of common = separate parcel of land (67) s 68: Unless otherwise specified, each other of a strata lot owns up to the middle of the wall/structure

separating the strata lots. s 69: Automatic easements: Property owners and strata corp. have implied easements through walls to

inspect, maintain, repair, and replace structural supports, water, sewage, gas, electric, etc., as necessaryo Support, water, sewage, drainage, gas, oil, elec, garbage, heating, cooling, other, telephone, radio,

tv pipes, wires, cables, chutes, ducts, other facilities for use by strata lot/common propertyo S 69(1)(c): Shelter for other parts of building: o S 69(3)(a): Easements exist without registration o S 69(3)(e): Includes right of entry to inspect, maintain, repair and replace: o S 69(4): Strata corp may enforce easements

s 70: Combining lots/removing walls: May remove all/part of a wall with prior written approval from strata. corp.. Must approve unless it violates gov’t regs or interferes with provision of services to other lots

s 71: Significant changes to appearance or use of common property/land requires ¾ vote at annual or special general meeting (UNLESS changes necessary for safety)

s 72: Maintenance to common property and assets presumptively done by strata corp., unless bylaws assign maintenance to owners

o 72(1) strata corp must repair and maintain commonso 72(2) Strata Corp. may by bylaw make an owner repair/maintain limited common property (decks)

or common property other than limited property by regulation subject to restrictionso “Limited common property”: e.g. balconies, parking spots & decks common property, but

accessible only by one unit owner.o 72(3) Starta corp may, by bylaw, take responsibility for repair and maintenance of specified

portions of strata lot

7

Fixtures Per s 29 of Interpretation Act "land" includes any interest in land, including any right, title or estate in it of any tenure, with all buildings and

houses, unless there are words to exclude buildings and houses, or to restrict the meaning;”o Fixtures: are part of the land—real property. Immoveable.

Presumed to be included in sale/mortgage. o Chattels: not part of the land. Personal property.

Presumed to be excluded in sale/mortgage.o Appurtenances: things attached to a fixture (e.g. vacuum hose). Have no use without something

attached to the property. Would lose essential character if detached. Presumed to be included in sale/mortgage.

Quicquid plantatur solo, solo credit: Whatever is attached to the soil becomes part of the soil

Misc. Notes potential issue: if a tenant (say a manufacturer) installs and affixes machinery in a leased building, does the

machinery belong to the owner or the tenant? Simplification of test: 1) Degree: permanent/temporary? ease of removal/serious damage or destruction?; 2)

Object/Purpose: To better enjoy chattel or improve freehold?

Test for Determining Between chattel/fixture: “better use” testZellstoff Celgar Limited v British Columbia, BCCA , 2014 : Authority, combining Re Davis [1954] ( (1) & (2)) and qualified by (1-5) from Stack 1) Degree of affixation: determined by: (a) how securely; (b) permanent or temporary; (c) ease of removal or

serious damage or destruct that would result from removal. 2) Purpose of the affixing: determined by: (a) who authorizes the affixing; (b) what was their intention in the

affixing; (c) was the affixing to improve the freehold; if so, then it is a fixture; (d) or to enjoy the item itself; if so, then it is a chattel; and (e) whether (d) is weightier than (c), or vice versa (Zelstoff/ Stack v eaton)

Test for purpose: Stack v Eaton Test (Zellstoff Celgar)Improve freehold or better use? 5 part test

1. Attached only by own weight, removed without damage: presumed to be chattels. Plugged in? Chattel. (CMIC) UNLESS express intention to be fixtures

2. Articles attached (even slightly) are presumed to be fixtures UNLESS express intention3. Prima Facie presumptions above can be rebutted by circumstances (size, value, nature) which indicate

otherwise (CMIC) Circumstances which show degree of annexation and object of such annexation, objectively To better enjoy chattels: presumed to be chattels (Davis) To better enjoy realty: presumed to be fixtures (Davis) Intended to remain affixed for the duration of their reasonable life (e.g. carpets): presumed to be

fixtures (La Salle) Removal causes damage? Fixture (CMIC/Royal Bank) - Sheppard

4. Intention of owner relevant only so far as it can be presumed from degree/object of annexation5. Tenant’s trade fixtures can be chattels again if tenant removes and restores the premises to exactly

same condition in which it was received (CMIC)-include all relevant circumstances incl objective intention with respect to duration of annexation and use of lands

Examples: Carpets in hotels, intended to be used for duration of usable life, are fixtures in spite of small degree of

affixation. (La Salle, qtd. in Zellstoff Celgar) Bowling alleys are affixed in order that bowling might be more efficiently carried on (Re Davis).

8

Re Davis (1954) Bolted down bowling alleys: chattels or fixtures? Degree and “Better use test”. Decision: Bowling alleys = Chattels.

Better use test: if object of affixing chattels is to improve freehold, then, even if chattels are only slightly affixed to realty, they may become part of realty

Pre-Stack v Eaton, but uses object test:1) degree of affixation – permanent or temporary? Easily removal or serious damage or destruction?2) Better use test: object/purpose of affixing – better use/enjoyment of item OR improve freehold?

Zellstoff Celgar v BC (2014 BCCA) Pulp mill equipment: chattel or fixture? Fixtures. -Degree/object of affixation? Decision: Pulp mill equipment = Fixtures-Industrial equipment is a fixture because degree of affixation is substantial (over 50 years). The object of affixation is to better use land as pulp mill. -Items are fixtures if they are intended to remain affixed for the duration of their reasonable life. (E.g. carpets are a fixture.) (LaSalle)

CMIC Mortgage Investments Corp v Rodriguez (2010) Tent that is not fixed in cement blocks: chattels or fixtures? Chattels.

Evidence demonstrates that owner intended tent to remain as chattel. Cover-All 1: Bolted to concrete Cover-All 2: Not bolted

Backs owners stated intention.

9

CMIC Mortgage Investment Corp v Rodriguez, 2010 BCSC 308. Cover-All. 6 CriteriaCoverall #2 a chattel: not affixed to ground and intent to be chattelCover-All #1: mounted in a buried foundation (affixed to concrete blocks underground) as permanent equestrian center (fixture). Cover-All #2: blocks above ground, intention always for portable.1. an item unattached, except by weight, that can be removed w/o damage, is a chattel2. any item plugged in and can be removed without damage is a chattel3. any item which is attached even minimally is a fixture4. Fixture: part attached to structure could be removed but rendered useless (loses essential character). Chattel: Remove w/o damage and item retains essential character. 5. Tenant’s fixtures can be removed. (must repair damages)6. Exceptional circumstances: Purpose test: eg if item is unattached, but intent was fixture, fixture. Rebut presumpCover-All #2 = chattel b/c object not attached, very large/expensive fixture then purpose can be consideredRoyal Bank of Canada v Maple Ridge Farmers Market Ltd, [1995] BCJ No 1696 (SC) – provides test for CMIC. Don’t use

Water Rights Water is always in motion and cannot be owned in same way as land Riparian rights: rights relating to shore or bank of any body of water. Riparian/littoral owners maintain common

law rights unless removed by a license of another Most Riparian rights have been subrogated by statute Littoral: seaside or lakeshore; Riparian=stream/river banks; riparian rights: relating to shore or bank of any

body of water Recorded water: right to diversion or use is held under authorization or enactment ie. controlled by gov’t (WSA:

s 1)

Summary: Ownership vested in Crown

o Ownership and use rights are vested in the Crown. (WSustainabilityA 5; WProtectionA 3)o Right to use and flow of all water at any time in a stream, or percolation or groundwater (WSA s 5)o Vest water and percolating water to gov’t (WPA s 3(1), 3(2))o Use of waters req authorization (WSA 6, types p1-38), not acquired by prescription (5)o Rain, snow owned by Crown as soon as they hit the ground; before that, up for grabs.

Riparian rights are enforceable to the extent that they do not conflict with licenses (Johnson v Anderson; Steadman v Erickson)

Protection against unauthorized inference (Johnson v Anderson) A party using/diverting water unlawfully cannot collect damages for interference with use (Schillinger v H

Williamson Blacktop) Pollution is never lawful (Steadman v Erickson Gold Mining Corp.) Right to use water/quality until superseded by license (Steadman v Erickson) Water licence passes with land when it’s sold (where notice is given to water manager before sale) (WSA 25)

Riparian Rights: Current riparian rights (indefeasible):

1. Right of access (to and from the water)2. Right of drainage (flood-proofing land)3. right of reasonable use – abolished (WSA s 5,7; WPA s 3(1)) – req authorization, except domestic use of

unrecorded water or prospecting for minerals (hand held tools, not mechanical disturbance of surface (def’n s1)

4. right to undiminished flow – abolished (WSA s 6,7; WPA s 3(1)) –no cause of action if lawful activities of licensee

5. right to use and flow for “domestic purposes” w/o license, WSA s 2, 6(2) – Johnson v Anderson. Subject to others’ water licenses

6. Right to undiminished quality of water (unpolluted, no contamination) – lots of statutes7. Right of accretion as long as gradual/imperceptible8. Right to protect land from erosion9. right of ownership of waterbed (ad medium filum = to the middle line) –Now, Crown owns bed up to mean

high water mark, no private ownership [LTA 1996, s 55, 56].

Permissions (defeasible by/vulnerable to licence):1. Right to reasonable use of water for domestic purposes (fragile right, defeasible)

WSA 6(2): Use/divert any unrecorded (i.e., unlicenced) water for domestic purposeso “Domestic Purposes” (Water Sustainability Act s 2):

Single family dwellings only (can be one or more) Drinking water, food prep, sanitation, fire prevention, water for animals (pets or

household use), and irrigation of garden (plot under 1000 m2 that is adjoining and occupied with a dwelling)

WSA 6(1) :Other uses require licence 2. Right to undiminished/unaltered flow for domestic purposes (WSA; Johnson)

10

Precedence of licences (Water Sustainability Act s 22):1. Date of authorization; then2. Type of use:

Domestic; Waterworks Irrigation Mineralized water

Water Sustainability Act

s 2: No licence is required for domestic use. Domestic purposes = household requirements, sanitation, fire prevention, watering of domestic animals, irrigation of a garden.

s 5(1): Water, percolating water and ground vested in government, except insofar as private rights have been established: ie. domestic purposes, licenses

Domestic use: 6(1) Uses other than domestic purposes require license (above)6(2) A person is not prohibited from using unrecorded water for domestic purposes

Other use: No diversion of water from streams or aquifers without a license or regulatory authorization (2)

unless it’s used for fighting a fire Water licence passes with land when it’s sold (where notice is given to water manager before sale)

(25)

Licensee rights: 7(1) rights must be specified in license Divert & use water; Construct works required to divert water/create hydro; Make changes in the stream necessary for the diversion; Construct fences/screens to conserve fish or wildlife

Precedence of licences: 22 (first in time, first in right) older license has precedence3. Date of authorization; then4. Type of use:

a. domestic; b. waterworks c. irrigationd. mineralized water

Where both date and use are the same, precedence is equal.

S 25: Authorization passes with disposition of land (1), must give notice to water manager before completing disposition (2)

Johnson v Anderson [1937] BCSC Unlawful stream diversion interferes w/unlicensed riparian right

Facts: Johnson (P) was downstream owner; Anderson (D) was upstream owner D diverted the flow of a stream that flowed through P’s property.

11

P used water from stream for domestic and stock-watering purposes. P sought damages, an order for the demolition of the works diverting the flow, and an injunction. P had no water license. The D had a license, but it did not authorize the diversion in question.

Issues: Does the traditional riparian right to make use of the water flowing by a property owner’s land in a way that does not interfere with recorded rights of other parties still hold? YES. If it does, did the D’s actions interfere with P’s right to use the stream? YES

Decision: For the P

Ratio: Common law riparian rights stand to the extent that they do not conflict with licences.

“Unless and until records or licenses have been granted for all the water flowing by or through the plaintiff’s land, which I find is not the case here, the plaintiff still has the right to use the water flowing by or through his land subject of course to any rights granted.” Riparian owners have a remedy against unauthorized diversions of water.

Reasoning: The D had no license to divert the flow of the stream, and, as such, the P’s riparian rights hold.

Remedy: Order to demolish dam (=positive injunction) + prohibit it from being rebuilt (=negative injunction) granted, no damages.

Schillinger v H Williamson Blacktop [1977] BCCA P using creek illegally. D pollutes creek. No remedy.

Decision: P is not entitled to damagesFacts: P used Barre creek for commercial fish cultivation.

P has a water use licence, but it only authorized use of Hairsine Creek (a tributary of Barre). unlicensed commercial use

D (upstream from P) deposited silt into the water, which killed off P’s fish. P brings negligence and nuisance suit against D. P’s licence did not cover the location of his diversion. Riparian owners are entitled to use water, but not

divert it. The siltation was a consequence of P’s diversion of Barres creek, which was unlawful under the Water

Act.Ratio1. A party using water unlawfully cannot collect damages for the pollution of that water. 2. Siltation is never lawful.3. right to recover for unlawful contamination in industrial setting requires valid license4. Riparian owners entitled to use land but not divert it (well maybe some)

Steadman v Erickson Gold Mining Corp [1989] BCCA P uses water domestically. D pollutes water. Remedy.

Facts: P’s home was supplied with water from a spring-fed dugout, which was lawful. P did not have a licence. D built a road uphill from P, the construction of which caused silt and mud to contaminate the water

system. P operated a diamond saw commercially, but only used a bit of the water so okay minor industrial use

constituting domestic use

12

Action: P sued for damages

1. Riparian rights are enforceable, unless the rights of a licencee supersede them. P can sue in nuisance if party makes use of unrecorded water unusable through contamination.2. Contamination cannot be licensed.

Decision: D found liable for contamination of the water Groundwater: “The authorities are clear that you can use ground water even to the extent that it

causes your neighbour’s well to go dry, but you cannot contaminate it.” Surface water: P’s riparian right is enforceable (though can be superseded by a licence).

Note (Steadman): once WSA comes into effect, you will need a licence to dig a well (unless domestic user). Water act (s. 42): not an offence to divert unrecorded water for domestic purpose or prospecting for

mineral, but person diverting water must prove it is unrecorded Case decided in 1989: since then, groundwater has been vested in gov’t

Protection against unauthorized interference Johnson v Anderson, [1937] BCSC. D diverted flow which had natural course through P’s land. P had no license. D did not have license for this purpose. Common law rights continue except as changed by statute. Grant order to demolish diversion and prevent rebuild, subject to future license.Party using water unlawfully cannot get damages for contamination – Schillinger v H Williamson Blacktop & Landscaping Ltd (No 2), (1997), BCSC. P used stream water for fish cultivation. P had license for Hairsine Creek, used water from Barres Creek. D caused silt to appear in creek, bad for fish. No damages b/c unlawful use.Right to use water/quality until superseded by license - Steadman v Erickson Gold Mining Corp, (1989), BCCA. P had dug out small water source for domestic use. D built a road nearby which caused silty water. P dmg in nuisance. P had right to use water so long as no person with a license to use the water. Can recover damages.Ownership of beds of water – common law rule ad medium filum, but Land Act, RSBC 1996, c 245 ss 55, 56 p1-56: gov’t owns all water and land below, Crown owns water below mean high water mark

Accretion and Erosion Accretion: gradual/imperceptible buildup of soil (causes: fluvial action, wind, man mode oper.)Avulsion: immediate and dramatic loss of soilErosion: gradual and imperceptible depletion of soilNatural boundary: wavy line on plan (high water mark)Fixed boundary: straight line on plan

Doctrine of accretion (Theosophy):1. Wavy, movable line (plan in LTO)2. If accretion/erosion is “gradual and imperceptible,” rights given/taken away to/from riparian owner.

o Imperceptibility measured on a day-to-day scale. (Theosophy)

13

3. Applies to both natural and manmade changes, except intentional changes made by the claimant (Theosophy) – water, wind, humans, precip/evap (except deliberate action of claimant)

Erosion Erosion – riparian owner may lose as well as gain (Theosophy), allowed to install works to prevent The doctrine can be overridden by a contractual exclusion, but that exclusion must be explicit. Sudden and perceptible erosion does not shift property line in favour of Crown (Yukon Gold v Boyle

Concessions Ltd. [1916] BCCA) Where the Crown reserves a strip of foreshore, accretion goes to Crown unless grant specifies to the contrary

(Monashee Enterprises v BC (1981) BCCA) Raising of river bed = vertical process; rights retained by Crown (BC (AG) v Neilsen, [1956] SCR)

Southern Centre of Theosophy v South Australia [1982] Lake boundaries move. Do property lines? Property boundaries are tethered to high water mark, so long as gradual and imperceptibleFacts:

P = perpetual leaseholder from Crown of 500 acres of land bordered by water P’s land abutted the shore of Lake George when it was purchased in 1911. The lake’s high water mark receded by 20 acres over the years. The P seeks declaration that the property boundary is tethered to the high water mark.

Ratio: Natural cases of accretion are valid insofar as accretion is gradual and imperceptible.

Doctrine of accretion: Where land is bounded by water, the forces of nature are likely to cause changes in the boundary between the land and the water. Where these changes are gradual and imperceptible, the law considers the title to the land as applicable to the land as it may be so changed from time to time. Does not apply to substantial/sudden changes in boundary.

Decision: For the P. Declaration that property boundary is tethered to high water mark.Misc. Findings:

The doctrine can apply to inland lakes; There is no reason why the doctrine cannot apply to land leased by the Crown; The doctrine can be overridden by a contractual exclusion, but that exclusion must be explicit. The doctrine applies to all natural (fluvial or wind action) and man-made changes to the high water mark

(except those brought about by deliberate actions of the claimant). What is ‘imperceptible’ can be subject to dispute; measured on a day-to-day scale, not changes over long

periods of time. Imperceptible in progress, not over time. Does not apply to property whose boundary on plan is not expressed to be water’s edge

Misc. Cases on Erosion/Accretion Vertical Accretion Not Accretion—BC (AG) v Nielson [1956] SCC: gradual rising of a riverbed by deposit

was a vertical process and was different from gradual retreat of waterline.o Vertical accretion is not an accretion and property in the raised land (part of a river) remained in the

crowno Applies where the line of the water forms the boundary line of the property.

Small crown strips b/t property and water gets the accretion—Manashee Enterprises Ltd v British Columbia (1981) BCCA: crown had retained small strip between property and water on the edge of land it had granted, which ran ran parallel to a high watermark. Subsequent accretion happened and it belonged to the crown.

Sudden Erosion does not change ownership—Yukon Gold v. Boyle Concessions (1916) BCCA: where erosion is sudden and not imperceptible, ownership of the eroded area remains unchanged. Suddenly inundated

14

areas as the result of an erosion do not pass into the ownership of the crown by reason of it now being part of a creek bed

Disputes over accretion are a matter for the courts, not Surveyor General—Bryan’s Transfer Ltd v. Trail (City) 2010 BCCA

Support right to rely upon neighbor for structural support provided by structural elements of building Owner of raw land entitled to lateral and vertical support from adjacent and subadjacent land

Lateral support: support that stops structures/walls from moving sideways Natural state: removal of support strict liability (no need to show negligence, damage or causation) (Gillies) Improved: onus on P to show negligence ie. land would not have collapsed w/o removal of lateral support

(Gillies v Bortoluzzi) (Rytter v Schmitz), if loss foreseeable, negligence likelyo Liability for loss of support requires: negligent excavation, nuisance, trespass or acquired right to

lateral support (no longer exists)o Improved includes soil brought onto the land to raise it (Welsh v Marentette)

Vertical support: support that stops structures/walls from moving up and down

15

Natural or Improved: is an strict liability tort regardless of whether the property is improved or in natural state. (Gillies v Bortoluzzi)(Rytter v Schmitz)

Requires authorization; otherwise, trespass Discharge of water that undermines vertical support = trespass (Engemoen Holdings v 100 Mile House – failure

to maintain pipe causes leak, undermines support)

Gillies v Bortoluzzi, 1953, Manitoba Facts:

D (= two parties) excavated basement next to building P leased. Following the excavation, the wall of P’s store parallel to site collapsed. P sued for damages, claiming that the excavation was done negligently. D says it was the P’s own negligence which led to the damages.

J finds that D dug under the bottom of Ps wall, thereby undermining both its lateral and vertical support. Even if hadn’t removed vertical support, would still have been negligent in removing lateral.

Ratio: If land is developed/not in natural state, must show that land would have subsided regardless of extra weight of structure. D liable for lateral support sufficient to maintain soil on adjacent property in its natural state.

Decision: For the P; damages assessed.

Rytter v Schmitz Removal of lateral support: natural state=strict liability. Improved=negligence requiredRemoval of vertical support: strict liability (trespass) improved or natural

D excavated next to P’s building, which caused the building to partially collapse. D excavated over property line and didn’t underpin as he went. P had right to vertical support. Damages assessed.

Equity Legal Interests Describes the division of interests in land by statute in Canada; the Crown, as grantor, grants parcels of land as

absolute owner, sold as a fee simple as a buyer—and that buyer, a grantee, is required to register that land in the Land Registry, which lays out the interest in land of different parties (charges); i.e. a public record of all property in the province. Legal interests in land are acquired through the proper registration of title/charge through the Registry.

Equitable Interests Interest in land held as a benefit from legal owner of land—lesser right Interests created in equity are the same as those that can be created at common law: e.g., trusts, unregistered

interests, donee of an imperfect gift, restrictive covenants, interests created from proprietary estoppel. Vulnerable to Bonafide purchaser for value without notice. Still applies to:

16

o Trust of personaltyo Unregistered interest in land (equitable interests)

Trusts Unregistered interests (e.g. before title is registered, but after document of transfer is signed) Donee of an imperfect gift Proprietary Estoppel Restrictive Covenant Modern Trust: aspects to keep in mind

o 1. Legal title always remains with the trustee. Beneficiary relies on courts to see that trustee holds legal title for his benefit

good against everyone, a right in the property itself beneficiary can enforce fiduciary duties against trustee

o 2. Interests created in equity correspond to those in common law e.g. equitable fee simples, life estates, estates pur autre vie, etc

o 3. Trustee may transfer legal title to a third party. Beneficiary is vulnerable against bona fide purchaser for value without notice that a transfer is in breach of trust. If purchaser knew about trust at time of transfer, must respect trust

Beneficiary has right “in personam” for damages against trustee who sold but no remedy to recover property

express notice: what transferee knows constructive notice: what transferee ought to know if there had been the investigation a

reasonable person ought to have made

Equitable Maxims Equity follows the law (as in Zwicker) Equity will not assist a volunteer (MacLeod; Ross) Equity will not force a donor to complete that which is incomplete (MacLeod) Everything that can be done must be done to perfect a gift Equity assumes bargains not gifts Where equities are equal the law prevails; b/t equal equities, the first in order of time prevails Parties must come to equity with clean hands unconscionability Nemo dat quod non habet: no one can transfer a better title in property than he or she has. Equity regards as done that which ought to be done (Ross v Ross; ) Equity looks to the substance rather than the form (Ross v Ross) Equity abhors a forfeiture Equity aids the vigilant, not those who slumber on their rights Equity does not allow a statute to be used as a cloak for fraud

Freedom of Alienation (selling; transferring) Generally, interests in land are freely alienable aim of British Land law Can be disposed inter vivos or on death. Disposition: sale, mortgage, gift, lease

Three requirements for freedom of alienation: o (i) an owner for the time being of an estate must have technical freedom of disposition; o (ii) in disposing of property, an owner must not have the power to impose excessive restraints on the

freedom of alienation of any transferee; o (iii) the actual mechanics of transfer must be as simple as possible.

Restraints to Freedom of Alienation: Direct: prohibited

o Cannot put clause in transfer purporting to prohibit disposition ie. fee tail

o Exception: restraint on leasehold assignments are valid;

17

o statutory agricultural land reserve: restriction on alienability of agricultural lando Aboriginal title only alienable to Crown

Indirect: Certain Indirect restraints are permitted: e.g.: Trusts (LTA s.80): Registered trust on title requires trustee to hold property for benefit of beneficiaries and not

to dispose of ito If trustee sells trust, Breach of trust unless they have consent of beneficiary or court ordero Imposes personal liability on trustee, and if registered, buyer must return property

Life estates: prevents life estate holder from disposition by will. Fee simple holder restricts right of alienability of life estate holder

Joint tenancy: No disposition by will—Right of survivorship to surviving joint tenantso Last surviving joint tenant has right of dispositiono Joint tenancy can be severed (by registration) and turned into tenancy in common by unilateral act by

joint tenant No legal obligation to give notice about severance

o Tenancy in common does not have right of survivorship Future interests (e.g. life estate remainderman)

o Rule against perpetuities: max. 80 years of granting righ Certificate of pending litigation (LTA s. 215): Person who is suing owner claiming an interest in the property

is not on register as owner of interest, but is suing and there will be a court case to determine true ownershipo Certificate gives warning to any potential transferee that title of property is in dispute; Filed

electronically in Torrens Caveats LTA s.282: prohibiting registration of a dealing with the land either absolutely or in the manner or to

the extent expressed in the caveat.o Does not create an interest in property, gives warning to public that you may be subject to caveator’s

claim on propertyo Suspend process of registration until conflicting claims have been settledo Ex. Caveat for unpaid condo fees by condo assoc.

Land (Spouse Protection) Act: allows non-owning spouses to put notation on title requiring their permission for disposition of land protects from unilateral sale

Wills, Estates and Succession Act: prevents disinheritance of spouse/child, who can bring claim in ourt seeking to rewrite testator’s will in case they have been disinherited

Family Law Act: Relationship breakdown non owning spouse can file claim (caveat or COPL) claiming share of family assets, including family home. Generally divided 50/50 in these circumstances

NOT PERMITTED: Fee tails: Abolished in 1833; Future interests: Cannot have future interests/life estates in perpetuity

Relationship between Real and Personal Property Doctrine of Estates In theory, personal property operates on the basis of absolute ownership which excludes the doctrine of estates.

(strictly applied to fungibles)o Ie. Granting case of beer to A for life is same as saying A is absolute owner

Relationships corresponding to legal estates in land can be created in personalty (e.g. the leasing of cars serves the same purpose of a lease of land and resembles it in some ways).

Equitable interests are allowed in personalty (besides fungibles)o Ie. Most trusts today are of shares and bonds rather than land

Courts have been willing to give effect to a succession of legal interests in personalty, creating what are in substance estates

18

Re Fraser (1974) BCCA Life estate can be created in personalty; entitled to revenue, must specify expressly or impliedly power of encroachment for capitalFacts: Deceased leaves a will revoking all former wills—with the respondent as executor. The will leaves a life interest in estate and property to wife, with all else left to a charity.

Issue: Can there be a life estate in personalty?:

Decision: Court on appeal affirmed that there is no life estate in personalty, but held that the trustee cannot stop widow as having absolute power of encroachment on the personalty. Successive interests in personal chattels may be created by will

Can the widow encroach upon the personalty during the term of her life interest? The Court argued: “Life estate,” when used in a will, referring to personalty means: the recipient of the life

interest may enjoy the revenue derived from the corpus and no more unless the testator has expressly or impliedly indicated an intention that the recipient of the life interest should have the power of encroachment.

The will indicated no power of encroachment; equity imposes upon the widow as trustee an obligation to preserve the personalty in its entirety for the ultimate recipient.

Crown Grants Document that grants private ownership of Crown (public) land, forms root of title. changes public land to

privateo Typically sold as fee simple, but could be other estate interest. o May be subject to land use requirements (e.g. must be used as a ski hill)

Usually, owner of the property gets surface rights (access rights, agriculture and timber rights, development rights, and air rights), and the government gets riparian rights and mineral rights

Initial crown grant must be registered; subsequent transfers do not need to be (but should). Before issuing, legal survey is undertaken Crown grant forms root of title on which Land Title system operates Initial crown grant must be registered; subsequent transfers do not need to be (but should).

o (LTA, s 54). Must be surveyed first LTA s 169(1)(a)

19

Rights Reserved--Land Act, s 50(1)(a)— Reserves the following rights following Crown grant, automatically applies to crown grants unless otherwise specified: i) Right of Resumption: gov’t may resume any part of the land for making roads, canals, bridges, other public

works o so as long as there is no building on that part of the land or garden or otherwise o up to 1/20th of the whole propertyo no compensation

ii) Right to enter land and remove minerals: Enter, raise, and get out of land any geothermal resources, minerals, coal, petroleum, and gas or gases.

o Reasonable compensation iii) Right to water: gov’t authorized person can take and occupy water privileges and carry water

over/through/under as reasonably required for nearby mining/agricultureo reasonable compensation

iv) Public works materials: right to take gravel, sand, stone, lime, timber or other material that may be required in the construction, maintenance or repair of a road, ferry, bridge or other public work

o No compensation No interest in resources is transferred by grant: 50(1)(b): Conveys no subsurface rights. Conveys no

right/title/interest to geotherm, minerals, coal, petroleum, gas, fossils found in or under lando only surface rights of access, development rights and air rights are transferred

(c) If highway through land at time of grant, no rights/interest/title in highway s.50(3-3.1): Disposition with express terms contrary to above may be made on those terms (benefit for

landowner OR Crown)

Sale of Land (Inter Vivos Transfer) 1. Contract of purchase and sale: Law and Equity Act , s 59 : Inter vivos transfer: Vendor agrees to transfer an interest in land to a purchaser Enforceability requirements (makes transfer enforceable against vendor): Law and Equity Act 59(3):

o (a) In writing & signed by parties to be charged (incl. 3 Ps: property, price, and parties) o OR (b) Part performance: Party to be charged has done an act or acquiesced to an act that indicates

that a contract has been made (e.g. payment/acceptance of payment[4]), OR [b]o OR (c) Reliance/Estoppel: Party alleging disposition has reasonably relied on it & only equitable

resolution (w/regard to both parties’ interests) is to enforce [c] Person alleging contract, in reasonable reliance, changed position that an equitable result,

having regard to both parties’ interests, can be avoided only by enforcing the contract However, still vulnerable to lack of validity in contract (consensus ad idem)

20

MAXIM: “Equity will not allow a statute to be used as an instrument of fraud” (hence relaxation of written/signed requirements)

MAXIM: “Where equities are equal, first in time prevails”race to register Clauses that can be included: Deposit (non-refundable; deducted from purchase price); liquidated damages

clause (damages in excess of deposit for breach); conditions: inspection, solicitor’s approval, financing, etc.; closing date. May be electronically written and signed

Disposition does not include: trusts, testamentary disposition (LEA s.59(1)) or apply to leases less than 3 years (LEA S.59(2))

Property law act: Land transfers contracts do not need to contain terms of art/words like “grant” or “contract of purchase or sale” [PLA s15] and Contract need not be executed under seal [PLA s16]

2. Completion/Closing Vendor delivers signed registrable transfer instrument (form A) to buyer (PLA 4-5 requires delivery). Transferor must provide registrable description of property [PLA s7]

o A) Title must be cleared of all charges by vendor (unless otherwise agreed upon)o B) To transfer title, transferor must have registered title. [PLA 6]

Buyer pays vendor in full (gives proper consideration) Form of transfer: must be on a single page (LTA s185). Section does not apply if registrar is of opinion that its

proper to accept another form. Where title is registered and contract requires purchaser to bear cost of preparing documents, purchaser must

prepare documents but vendor must be ready at appropriate time to sign (Shaw Industries v. Greenland Enterprises Ltd., 1991 BCCA)

3. Registration of transfer (+ mortgage to finance purchase) Upon registration, legal title passes from the provincial crown (not seller) to the buyer/transferee, Unregistered interests does not pass title (LTA 20), effective only at registration s 22 Registration is not compulsory, but if you don’t register, the instrument doesn’t confer legal or equitable

interests [LTA 20] o Unregistered interest is only good against the person making the transfer, but not the world – s 20(1)

– “Except as against the person making it” equity allows for specific performanceo This makes interest vulnerable to BFPFVWON (seller would be liable for fraud/breach of contract). o No need to register interest for lease <3 years (LTA 20(3))

“First in time” starts upon date of application to register. Title passes on registration, irrespective of date of execution [LTA 22] application date is sued to rank (LTA, s 153, 37)

Registrar must be satisfied that there is a sufficient description of land and that instruments provided confers on vendee a marketable title.

Once registered, the purchaser gets a certificate of indefeasible title from the LTO Registration relates back to date of application to register: LTA ss 29(1), 27(1)

Section 59 Summary1. There must be a valid contract.2. The writing can be in any form. The writing need not have come into existence to satisfy the requirement of the section, and it may come into existence after the contract has been entered into.3. The section is only concerned with the enforceability of the contract, not its existence.4. The writing must be signed by the party to be charged or that party’s agent.5. Two documents, if they expressly or impliedly refer to each other, may be combined to satisfy the requirements of the section.3 ways to prove a contract 1. Writing and signed by person against who you wish to enforce. 2. Part performance, including paying a deposit. 3. Acquiescence or estoppel (promise, reliance, unconscionable)

Misc. Class “immediate indefeasibility”

o if transferee is BPFV, they get indefeasible title when they pay for property

21

o innocent owner fraudulent intermediary innocent buyer innocent owner has a claim for financial compensation, but the BPFV gets title under Torrens system, a forger can pass better title than they have because the Torrens system

gives title from the crowno Torrens wanted to abolish the idea of notice registration is constructive notice to all

3 principles of Torrens system1) Mirror principle Certificate of title (register) accurately and completely reflects state of title

o Sets out All the rights that are held in propertyo HOWEVER, “not a bulletin board” there is information about title that does not always appear on

register eg. easements do not appear on title, unpaid property taxes, balance owing on mortgage potential buyer will search register and find:

o identity of registered owner (fee simple)o all the registered rights held by third parties

2) Curtain Principle (LTA, s20(1)) potential buyer is only concerned about registered rights of ownership

o no need to search beyond or behind the registered rights registration concerns indefeasibility on the BFPV of fee simple (save for fraud) not concerned with unregistered interests

o mortgagee-balance owing; local government property taxes owing

3) assurance principle Compensation is available to a fee simple holder that incurs loss due to fraud/mistake (innocent victims relying

on the Register) (LTA ss 294.1-294.9); does not protect against surveyor mistakes. This only applies to Fee Simple holders. Cf. The Assurance Fund.

Inter Vivos Gifts Complete gift: no consideration; registered in Land Title Office Registry;

Requirements: Intention to donate immediately, not on death (Zwicker) Sufficient act of delivery to the donee (PLA 5) qualified by Ross

o Registrable instrument of transfer (Form A) [LTA 5(1)] o Unregistered instrument is enforceable against the person making it, but not against the whole

world [LTA 20(1)] Acceptance is required by the donee. The donor has the right to revoke the gift prior to completion: Ross NB: s 59 of LEA does not apply. Check for proprietary estoppel!

Requirements of Gifts on Death:

22

Must follow WESA. Equity will not enforce a gift made on death unless it complies with WESA (“equity follows the law”) (Zwicker)

Deathbed gifts: Donatio Mortis Cause (DMC) “I won’t need ______ anymore” requirements:

o 1. intention to make gift in contemplation of imminent death; o 2. sufficient delivery to donee; o 3. death as contemplated (i.e., of same cause); it will be void if other causes of death besides that

contemplated. Courts may view donation mortis cause with suspicion, as it may contradict testate disposition; i if it is found to be valid, it will be given effect over a will.

Common Law Elements of Gift (Ross)1. Donor has intent2. Acceptance by donee3. Delivery: donor wishes to be immediately and unconditionally bound, actual physical delivery not

required. Equity says intention>form.

Torrens Elements1. Donor delivers registrable transfer (PLA s 4,5)2. Donee obtains registration at LTO.

-equity can jump requirements if intention is there (Ross)-Torrens adds additional hurdle. Intention must be clear (MacLeod v Montgomery)

Complete: registration in name of transfereeIncomplete: donor dies before registration-at law this gift fails, but equity says they can perfect the gift where clear intention

Incomplete Gifts incomplete gift: donor dies before registration (LTA, s 20) courts look to intent of donor

o incomplete gift gives only equitable interest (vulnerable to BPFVWON) Retaining possession of a deed will not render it inoperative, unless there is strong evidence that the transferor’s

intention was to do so (Ross) An imperfect gift can be made perfect if donor intent sufficient (equity looks to intent of donor) Equity looks to intent over form (intent > lack of delivery). Otherwise equity will not assist a volunteer

(Ross) – deed in purse, not delivered An inter vivos gift cannot take effect on death. If a person wants to give a gift upon their own death, they must

make a will (Zwicker) Where there is evidence that a transferor did not intend to complete gift, court will not give effect to it

(MacLeod) o Donor obliged to do what can be done, equity will not assist a volunteero UNCLEAR INTENT b/c Montgomery had duplicate certificate of title outstandingo Donor do what can be done, looking at the full circumstances of the individual

The law requires an act (registration) to give legal effect to a transaction (LTA, s 20(1), 22); equity can assume the act occurred when it should have but did not (“equity regards as done that which ought to be done”).

23

Ross v Ross 1977 (NB: pre-Torrens – PLA requires delivery)Facts:Deed signed, witnessed, and attested to, but not delivered to grandson. Discovered upon death in purse. Daughters sued for ownership over grandson.Issue: does non-delivery make a deed unenforceable? NO

Reasoning:Deed held to be valid on the basis of intention to give immediate gift, but retain life estate:

Close relationship w/grandson Her wish to remain in house until death Kept it w/important documents Had ample opportunity to destroy the deed

Ratio: Retaining possession of a deed will not render it inoperative, unless there is strong evidence that the

transferor’s intention was to do so. Deeds do not need to be delivered (physically or otherwise) to take effect; intention can suffice to make

transfer operative. Donor must wish to make themselves immediately and unconditionally bound by gift.

Maxims:Equity looks to the intent (substance) and not the form (delivery)Equity regards as done that which ought to be done.Equity may complete an incomplete gift.

Zwicker v Dorey 1975 NSSC gold digger case Gift to take effect on death; not in a will.Facts: Mr. Zwicker sought to convey land to Dorey in 1959, but included clause: “not to be recorded until after my passing away.” Later (1968) conveyed same land to himself & his new wife. Gift invalid as a result. Gift to take effect on death; not in a will.

Reasoning: Zwicker’s conduct was inconsistent with gift as it suggested it was not intention to be immediately and unconditionally bound by the gift. Deed was testamentary in nature.Ratio: An inter vivos gift cannot take effect on death. If a person wants to give a gift upon their own death, they must make a will in accord with WESA. A deed can be delivered so as to be immediately operative, or delivered in escrow upon happening of

specified event, but a deed signed by grantor and held to be delivered on his death is not validly delivered as escrow because it is a testamentary document

MacLeod v Montgomery 1980 AltaCA POST-Torrens – fussier with registrationGives transfer form but doesn’t deposit duplicateFacts: D executed a transfer of land to P; the transfer instrument was delivered but not the duplicate certificate of title, and thus P was unable to register the transfer. P asked D for the duplicate, but D never gave it to her solicitor. P filed caveat on title, claiming the title.

Issue: does execution of a transfer with delivery but w/o duplicate certificate of title, although delivery was promised, constitute a complete or incomplete gift? Donor intention? Decision: INCOMPLETE

Reasoning: Montgomery could have received the duplicate certificate from her solicitor.Court won’t enforce the transfer because there is evidence that the donor did not intend to complete the gift.

24

Didn’t instruct solicitor to give the claimant the duplicate certificate.

Ratio: Duplicate certificate of title freezes title. Where there is evidence that the D did not intend to complete a gift, the court will not give effect to

it.

Equitable Maxims: Equity will not assist a volunteer (volunteer is donor giving gift) There is no equity to perfect an imperfect gift (i.e., without intent).

o Equity will not force a volunteer to complete that which is incomplete Donor must do what can be done (“everything that could be done to perfect the gift”)

Presumptions of transfers to volunteers Equity assumes bargains, not gifts

Rebutting a presumption of resulting trust: In instances of unregistered gift, in the absence of proof, equity applies a rebuttable presumption that the transferor intended to create a trust, not to give property away as gift (PLA, s 19(3)).

The onus is on the transferee to establish that the transferor provided a gift by adducing evidence to prove transferor’s intention to create gift.

Equitable presumption of advancement Voluntary transfers from parents to dependant, or spouse, may result in an applicable presumption not of

trust but of gift (advancement). It is presumed that the transferor intends to confer the benefit of the property on the transferee;

if the transferor wishes to refute the assumed intent, the onus is on the transferor to prove on a BOP that the intention was for the transferee to hold legal title for the benefit of the transferor.

EXCEPTION: this is not the case in transfers from parent-to-child where the child is to facilitate management of the parent’s assets presumption of resulting trust

Torrens presumption of indefeasibility: registration applies to voluntary transfers of realty if a BFPFVw/oN becomes a registered owner, their title is said to be indefeasible under LTA, s 23(2). If an acquirer of a fee simple does not provide consideration and is a volunteer, courts interpret the

provision not to be conclusive, but rebuttable o imposes the burden of proving that the registered owner is not beneficially (equitably) entitled

to the realty on the transferor or other opponent. Does not preclude possible application of equitable presumptions of resulting trust or advancement

Wills: Testate Disposition Will speaks at death of the maker, not date of execution Disinheritance of a spouse or child is subject to judicial review: WESA ss 60-72.

o does not make adequate provision for proper maintenance and support? Adequate, just and equitable – broad power and discretion – put reason for disinheritance in will

Changes by “codicil” document executed as a will that changes 1 provision of a will Revocable during testator’s lifetime. If there are multiple wills, last one takes effect. “To X, his heirs” creates fee simple If testamentary gift lapses because of death of donee, it will pass according to WESA, s 46(1)(b)\ Anyone older than 16 and mentally capable can make a will (WESA, s 36) Residuary clause: provides for distribution of assets not specifically named Revocation clause: revoke all former testamentary dispositions Advantages: more efficient, easy and quick distribution of wealth among successors. Also reduces need for

length and expensive legal disputes

25

Validity Requirements: WESA s 37-39

1) In writing [37(1)(a)] 2) Signed at the end by the will-maker [37(1)(b)] or signed elsewhere in such a way that intent of will-

maker is clear [39(1)] 3) Signed by 2 or more witnesses [37(1)(c)] OR, the court orders it to be effective under s 58 [37(2)(a)]

Witnesses: WESA s 40

Witness must be 19+ [40(1)] Witnesses may receive a gift under the will, but gift may be void under s 43 [40(2)] Will is not invalidated by incapacity of witness [40(3)]

Court order curing deficiencies: WESA s 58

If a court determines that a record represents the testamentary intentions of deceased/ intention to revoke/alter of will [58(2)], it may be declared to be a will under 58(3)

o Need evidence to prove intention Record incl. docs that are electronic & can be read by a person [58(1)]

Survivorship: WESA s 162

Right of survivorship for joint tenants share of land/property held by deceased joint tenant passes automatically to other joint tenant(s). Does not go to probate.

o When one joint tenant dies, other joint tenant becomes 100% owner NO Right of survivorship for tenants in common: do not enjoy right of survivorship. Portion of

property/land held by deceased tenant passes in accordance with will. o There may be probate fees

162: devolution and administration of land: unless there is a right by survivorship, land devolves and is vested in the deceased owner’s personal representative in the same manner as personal property

o (2)(a): the rep holds the land as a trustee for the person beneficially entitled to ito (2)(b): the person beneficially entitled to the land has the power to require a transfer from the

personal representative o Probate Fees: amount of estate that must be paid on execution depends on size of estate ($x

per $1000 of estate)

Lapsed Gifts: WESA s 46(1) If a gift in a will cannot take effect for any reason, including because a beneficiary dies before the will-maker, the property that is the subject of the gift must, subject to a contrary intention appearing in the will, be distributed according to the following priorities:

A) To the alternative beneficiary of the gift, if any, named or described by the will-maker B) If the beneficiary was a brother, sister or descendant of the will-maker, to their descendants C) To the surviving residuary beneficiaries, if any, named in the will, in proportion to their interests.

(2) Applies whether the beneficiary's death occurs before or after the will is made.

Wills cases about repugnancy: all in Fee simple: Repugnancy section Tottrup v Ottewell, 1969 SCC Re Walker Re Shamas Cielen

26

Tottrup v Ottewell , 1969 SCC Note: Result legislated by WESA, s 46(1)(b)Facts Will beneficiary dies before testator; who gets estate?

Frank left the residue of his estate to his twin Fred: “To Fred, to hold unto him, his heirs, executors and administrators, absolutely and forever”.

o They had reciprocal wills—both left everything to each other Fred (1965) died before Frank (1967). Frank’s testators proceeded with dividing up the estate

as if he died intestate. Fred’s only daughter (his heir apparent) sued Frank’s estate. Argument hinges on wording:

o “Fred and his heirs” would pass fee simple and gift would fail Why? Because intention is to create a personal gift to Fred, not to his heirs

o “Fred or his heirs” would make Fred’s heirs alternative beneficiariesIssues Where a will beneficiary dies before the testator, who gets the estate? Decision The gift lapsed and passed back into the residue of the estate.Reasons Daughter argues that the comma should be read as “or,” not “and” (words of substitution, not

limitation) Court finds that it should be read as “and,” not “or.” As a result, the gift lapses, falls into the residue of Frank’s estate, and passes according to rules

of partial intestacy.Ratio 1. “To X, his heirs” creates fee simple

2. If a fee simple lapses because of death of donee, it will pass into residue of estate – residue=assets not specifically named disposed of according to rules of intestacy

Note Result legislated by WESA s 46 and would be decided differently today

RELATIONSHIP BETWEEN REAL AND PERSONAL PROPERTY (RE FRASER: create successive interests in chattels)Re Fraser, [1974] 6 WWR 560 (BCCA). Deceased left a life interest in his estate and property. All the rest and residue of his estate property, both real and personal, devise and bequeath to a society. -equity imposes upon the widow and the trustee an obligation to preserve the personalty in its entirety for the ultimate recipient, the charity-successive interests in personal chattels may be created by will

27

Intestate Disposition Intestacy: dying without a will or with invalid will

Property disposed of in accordance with WESA (part 3: s 19-s25)o S. 20: spouse but no descendants to spouseo S. 21: spouse and descendants

Household furnishings to spouse Preferential share of intestate estate to spouse ($300,000 if descendants are common to

testator and spouse; $150,000 if descendants are not common to spouse and testator) o Essentially, spouse descendants parents relatives

If no family member can be found: o Real property escheats o Personal property becomes bona vacantia. o Both mean that they are returned to the Crown.

Financial assets like pensions and life insurance can be disposed of by designating a beneficiary. This avoids probate (in the case of a will) and administration (in the case of intestacy).

Partial Intestacy: will partly covers assets of deceased, but not been kept up to date Some property disposed of by will Some property disposed of in accordance with WESA part 3

Residuary Clause Sweeping up clause, which covers all of the assets that are not specifically named

Debt If someone dies with lots of debt and no will, administrator is obligated to pay off the debts before distributing

the estateo If they don’t do this in accordance with WESA, then they become personally liable for the debts

If someone dies with more debt than assets, then it is bankruptcy and the creditors must “eat the debts”

Legal incapacity in transfer and disposition Legal Capacity (competency): is required to dispose or transfer property rights; several statutes outline

the capacity of groups/persons: Age of Majority Act : minors are those less than 19 years of age. Minors can take property, but cannot

dispose of property by will or inter vivos transfer until the age of majority. Evidence Act : establishes the requirements for competency of a witness; children under 14 are not

competent witnesses of a will. Public Guardian and Trustee Act : provides substitute decision making for adults with disabilities and

infants. Patients Property Act : courts can appoint a committee after the loss of mental capacity to handle the affairs

of an incompetent individual. Power of Attorney Act : an agent assigned by the individual in advance of incapacity have the ability to

handle financial and legal affairs on their behalf. Representation Agreement Act : Creates a living will in advance of incapacity that provides for someone to

represent an individual’s affairs, but excludes realty.

28

Mental Capacity for Disposition Minors People under the age of 19

Minors may take title to property. Ordinarily, property would be held by a trustee. Inter vivos transfers are voidable – subject to review at 19. 16+ can make will [WESA 36] 14+ to witness & testify to a will (at time of testifying) [Evidence Act]

People lacking mental capacity If at the time of making the will (or inter vivos disposition), the maker lacked mental capacity, the will is

void. May require somebody to act on their behalf (a substitute decision-maker):

o If no one is available the public appoints a trustee (Public Guardian and Trustee) o “Committee of the estate/person” (Patients Property Act)

Court appointed Cares for property/medical decisions

o “Enduring power of attorney” (Power of Attorney Act) Authorizing an agent to act for a person despite intervening loss of mental capacity

o “Representation agreement”/“living will” (Representation Agreement Act) Authorizing management of a person’s financial affairs (excluding real estate) and

medical care in advance of incapacity o “Adult Guardian” (Adult Guardianship Act)

Court appointment of adult guardian for a mentally disordered person Prevents elder abuse and neglect

o “Public Guardian and Trustee” Appointed if no one else is available.

29

Proprietary Estoppel Requirements – “modern approach”: Clarke v Johnson

1. Equitable fraud: Owner of land induces, encourages, or allows claimant to believe that he has/will have some right/benefit over land. (encouragement or acquiescence)

a. By encouragement: promisor ensures promise that they will receive property interests; creates the belief in promisee;

b. By acquiescence: promisor is aware that the promisee was relying on the promise and by virtue of their omission, has lead them to believe they have an interest in the property.

2. In reliance on this belief, claimant acts to his detriment to the knowledge of the owner.a. Includes expenditures and countervailing benefitsb. May be express or inferred

3. Owner seeks to take unconscionable advantage of claimant by denying him the right or benefit. Use as a sword: Can be used as the sole basis for a civil claim of action. When found, it creates an

equitable interest in someone else’s property (without complying with the written requirements of the LTA). Applied only if it would be unfair, unconscionable, or inequitable not to acknowledge the interest: the court will estop the promisor from going back on their promise.

Remedy: A court has broad discretion to fashion an appropriate remedy; equitable interest as minimally necessary to make good the belief; i.e., it will be applied only as necessary to “satisfy the equity”.

SEE ENCROACHMENT

Clarke v Johnson ONCA 2014 Johnson owns camp. Clarke uses & maintains camp over 20+ years. Clarke seeks to evict Johnson following a dispute about children’s access to camp. Proprietary estoppelJohnson owned property; Clarke had married into the family and later divorced out of it; he had built a cabin on the property; he continued to use the property for 20 years, made improvements and paid taxes on the property; he later decided to exclude his son from use. This caused Johnson (mother-in-law) to sue for trespass.

Issue: can be proprietary estoppel be invoked?

Finds proprietary estoppel on the basis of test above: 1. The appellant induced and encouraged the respondent to believe he would own the camp by

acquiescing in his use of it. (he had used property for 20 years)2. In reliance, the respondent contributed significantly to the construction, maintenance, and improvement

of the camp with the knowledge and consent of the appellant.3. Denying the respondent use of the camp would be unconscionable because he invested significant

emotional and financial resources in the property in belief that his usage would continue.

Decision: granted Don an exclusive equitable license to occupy camp for life, subject to conditions. Equitable remedy: Monetary damages were inadequate given the emotional attachment that existed between the respondent and the camp. Money is always considered first—sufficient in most cases. Unregistered equitable license is vulnerable to BPFVWON—personal license, not transferable, vulnerable to sale, not registrable. Equitable easements and life estates can be registered.

Class Comments Acquiescence: standing by while a wrong occurs (41) Shield: D’s defence to civil claim; Sword: Ps cause of civil action Proprietary estoppel as a sword creates an “equity” in someone else’s land (52)

o Minimum equity to do justice in the circumstances (81) Basis of claim to an equitable remedy

Test of unjust enrichment : Clarke v Johnson , 2014 ONCA 237 :

30

1. Plaintiff must prove an enrichment (finding of fact)2. A corresponding deprivation (finding of fact)3. Absence of a juristic reason for the deprivation.

a. “No reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff, making its retention ‘unjust’ in the circumstances”

b. May take into account parties’ expectations

Clarke v Johnson Unjust enrichmentClark owns camp. Johnson uses & maintains camp over 20+ years. Clark seeks to evict Johnson following a dispute about children’s access to camp.

Finds unjust enrichment on the basis of test above: 1. Enrichment: Johnson made significant contributions to the camp.2. Deprivation: The benefit of using the camp did not offset contributions.3. Absence of juristic reason for enrichment: appellant offered no such reason.

Equitable damages vs. injunction/specific performance Lord Cairn’s Act: Equitable damages (damages that deal with the future and past) can be given in substitution for an injunction.

A. Building/fence encroaching on land/airspace ( Property Law Act , 36 ) If party A builds structure/fence built on party B’s land, the Court may: Grant an easement to A and compensation to B (for a period to be determined by the court); Vest title to the encroached land to A and compensation to B Order that A removes the encroachment/enclosure

B. Any other situation: injunction, unless… (Shelfer Test) Kelsen 1. Is the injury to the plaintiff's legal rights small? 2. Is it capable of being estimated in money? 3. Can it be adequately compensated by a small money payment? 4. Would it be oppressive to the defendant to grant an injunction? (No - Imperial Tobacco had received good

value for its investment in the sign.)All requirements must be met. Most cases where damages are granted are accidental trespasses.

C. Unjust enrichment 1. First, consider monetary award. 2. If monetary award is inappropriate or insufficient, proprietary award (incl. licence, fee simple, constructive

trust, etc.) is available.

D. Proprietary estoppel 1. Equitable remedies are flexible, and should be chosen to “respond appropriately to the substance of the

problem put before [the court].” (Clarke v Johnson)2. “The court must look at the circumstances in each case to decide in what way the equity can be satisfied.”

(Clarke v Johnson)3. Award should be minimally intrusive.

Clarke v Johnson

Remedy for proprietary estoppel Reimbursement would be inadequate b/c of emotional attachment to camp. Constructive trust reflects legitimate expectations of parties Minimally intrusive award. Awarded a personal license, which would not be effective if the owner sold the property.

31

Leases Def: ownership for a fixed term; tenant acquires a right of occupation and exclusive possession

Short-term lease (<=3 years) Does not need to be in writing (Law and Equity Act s 59 (2)) and can’t be registered Cannot be registered, do not need to be registered to be enforced (LTA S 23(2)(d))

o Insofar as there is actual occupation under the lease or agreement, then the lease is valid & enforceable (can stay for 3 years even after sold); personal inspection for actual occupation should occur.

o The onus of determining whether or not there are short-term leases on a property is on the buyer; “granny in the attic” principle, s 59 (2)(b).

Vendor who purchases a property that has a short-term lease must abide by the lease Under LTA, 20(3), this estate can pass even if not registered, and under PLA, s 5(2), a landlord doesn’t

have to deliver a registrable instrument.

Long term lease (>3 years) Landlord must deliver a registrable instrument (PLA 5(2)) If unregistered, vulnerable to BFPFV (Serving for Success)

o To be given effect after sale, purchaser must have: Notice Dishonesty + immorality (i.e. deliberately misleading vendor about intent)

o Example: Serving for Success: lease extinguished by purchaser w/notice

Assignmen t/Sublease/Novation Assignment

Transfer of entire interest Lease usually stipulates that landlord’s consent is required, but will not be unreasonably withheld.

Otherwise, consent is not required freedom of alienability. After assignment, the original tenant is still ultimately responsible for payment of rent because of their

contract w/landlord.

Sub-lease Head-lessee signs lease with landlord, and in turn signs lease with sub-lessee. Consent of landlord is required only if the lease requires it.

Novation Original lease is cancelled in its entirety with consent of both parties.

Lease of part of a parcel of land enforceable73.1 (1) A lease or an agreement for lease of a part of a parcel of land is not unenforceable between the parties to the lease or agreement for lease by reason only that

(a) the lease or agreement for lease does not comply with this Part, or(b) an application for the registration of the lease or agreement for lease may be refused or rejected.(2) This section does not apply to an airport lease, as defined in section 41 of the Municipalities Enabling and Validating Act (No. 2).

32

Trusts Trust

o Legal ownership = trusteeo Equitable interest = beneficiary

“In Trust” requires partial registration (LTA 180)o Trustee can register title. “In trust” noted on title. (LTA 180 (3)) instrument held by LTO

Registration protects beneficiaries due to constructive noticeo Registrable in BC only; trustee’s name appears on title w/ reference number linking to terms of trusto Trustee can be compelled to register trust on title.

Parties:o Settler/testator creates trust then “drops out” as a general rule; o trustee holds legal title as registered owner of fee simple, owing fiduciary duties to beneficiary,

trustees can charge up to %5o Beneficiary holds an equitable interest in the property and can enforce fiduciary duties against trustee

“in personam” relationship b/t Trustee and beneficiary Beneficiary gets the same benefits as a usual legal title holder ie. interests created in equity

are equivalent to those created in common law entitled to income

Trustee, being legal owner, can transfer legal title to a third party:o If registered, 3rd party has constructive notice and beneficiary can enforce ito If 3rd party is aware of the trust, beneficiary can enforce it (actual knowledge)o If 3rd party does not have knowledge, beneficiary cannot enforce it (if BFPV w/oN)

But transfer is a breach of trust and beneficiary can make “in personam” claim w/o notice means express notice or constructive notice

o If 3rd party is volunteer, they cannot refuse to recognize trust 5 elements of a trust

o Trust provisions; trust fund; beneficiaries; grantor; trustee ASSURANCE FUND – breach of trust not covered by assurance fund – 303(b)(i)

McRae v McRae Estate Facts Trust notation removed from title on transfer. Do beneficiaries have rights?

In 1924, Mr. Fraser died and left property to his wife Harriet, on trust for herself for life, remainder to their children, John, Catherine and Farquhar. Mrs. Fraser was registered as fee simple owner, with an “on trust” notation on the title. In 1949, Mrs. Fraser transferred the property to Farquhar for nominal consideration, and Farquhar was registered as fee simple owner without any trust notation. He died in 1989, leaving his property to his wife and his siblings. In 1990, John and Catherine found out about the terms of their father’s will and commenced proceedings.

Issues Do John and Catherine have in personam rights against Farquhar?Decision YesReasons Farquhar is not a BFPFVWON because “in trust” was on the title. He had constructive notice, and

probably had actual knowledge too. Harriet and Farquhar committed a breach of truth, and the transfer from Harriet to Farquhar should not have occurred.

Ratio A beneficiary has in personam rights against a trustee, even if the trust is unregistered. Even if a trust is not registered on the title, where there is constructive notice, the RO is

bound by the trust.

Conduct made him party to breach of trustIn personam breach of trust claim

EVEN IF TRUST IS NOT REGISTERED ON TITLE, RO IS BOUND BY TRUST

33

Torrens System Torrens Principles: Each lot has individual parcel, lots generated from Crown grants, fee simple guaranteed (LTA 23(2))Original Crown grant must be registered (LA s 54)Mirror principle The certificate of title mirrors accurately and completely the state of the title and interests – LTA s 20; note

exceptions in 23(2) If something isn’t on the title, don’t worry about it Exceptions:

o All rights, “not a bulletin board”o Not: location of house, fixtures, zoning restrictions, sewers/utilities easements

Surrey v Dukart: register of instruments, not interests Potential buyer search: identity of registered owner/all registered rights by third parties, physically inspect

property, zoning/utility easements Private easement plan not included, but existence listed

Curtain principle (s.29(2))o All necessary information to determine ownership is on the certificate of title

o You don’t have to look behind the curtain, the title tells you the whole storyo Registered owners get a certificate of indefeasible title

o But, this only applies to bona fide purchasers for value. Registration by fraud is defeasible

Mortgagee-balance owing, local gov’t property taxes owing – determine outside of title (fluctuating) BC: registration confers indefeasibility to BFPVWON of fee simple, fraud defeasible Mortgages, leaseholds, life estates, easements, restrictive covenants registered for: ranking by chrono order,

constructive notice (notice by registration), don’t get indefeasibilityAssurance principle

Accuracy of the register is guaranteed, compensation to person affected by flaws in the register o Only fee simple protected

An assurance fund compensates you if there’s an accident in the Torrens System – LTA, ss 294.1-294.9: does not protect against surveyor mistakes

o Only applies to fee simple holders Compensation is provided for fraud and mistake An innocent victim can apply to recover from the insurance fund

34

Advantages:

1. Equitable interests not vulnerable to BFPFVWON (security of title) Registered interests = constructive notice Everyone has right to register their interest (except leases, which aren’t vulnerable)

2. Title by registration/certainty of title Not vulnerable to defects = security of tenure Improvement from system of deeds In deed systems, registered charge holders were vulnerable to nemo dat

If there was a “break in the chain” the registered owner would have nothing

3. Simplification of transfer Livery of seisen is ridiculous Deeds are no longer necessary (they are replaced by “agreements of transfer and sale”)

“Transferring” as opposed to “conveyancing” There are simple, short transfer forms which are very straightforward

4. Efficiency Searching for the title is no longer necessary (one stop, no historical search necessary)

5. Fairness and justice Unregistered interests are not enforced (except in equity)

6. Land can be used as collateral security for credit (e.g. mortgages) A duplicate indefeasible title cannot be issued if the title is subject to either a registered mortgage or an

agreement for sale

Torrens Process After closing date, the purchaser applies to the LTO for registration The purchaser gets a certificate of indefeasible title from the Registrar

o This certificate is from the province, as opposed to the vendor Each registered owners essentially gets a new Crown Grant

o Any missing links/documents are irrelevant The title includes:

o The registered owner(s)o Charges – interests less than a fee simple (mortgages, life estates, easements, restrictive

covenants) Don’t get indefeasibility, but give notice to the world of their interests

o Are ranked chronologically by order of the applications to register It’s important to register early

Certificate holder is the registered owner and has the fee simple

The Cadastral Concept Digital records Each parcel of land has a separate title (and a separate parcel identifier number) and can have separate

ownership Title gives dimensions of lot

o Not guaranteed/indefeasible (LTA 23(2)) (Winrob v Street)

35

Previous Systems Common law conveyancing of deeds: Subsequent purchaser could not rely on the evaluation of title made by a solicitor in earlier dealings Expensive because necessary work had to be repeated each time a transfer occurred. Transfers were delayed while root of title was established. Title insurance required to protect transferees courts settled disputes surrounding roots of title No central place to hold all deeds. Left with legal titleholder. As a result, could be lost. Nemo dat

The recording system: No scrutiny of deeds by staff, so nemo dat continues. However, solves issue of holding documents centrally. Registered interests took priority, but registry did not assure good root of titleprior defects could still render

transfer invalid requires title insurance

Title by registration (Torrens) meant to replace conveyancing and recording the Crown (grantor) grants parcels of land as absolute owner, sold as a fee simple to a buyer—buyer (grantee) is

required to register that land in the Registry, which lays out the interests in land of different parties (charges) records all titles and other interests in the province ie. public record of all property in province. Records fee

simple holder, and all subsidiary charges or interests in land (e.g. leaseholds, mortgages, etc.). Register is filled with “instruments”

Upon registration, title holder is given an indefeasible title—protects against prior defects. Only applies to fee simple holder. No need to go further than register to determine state of fee simple title.

Solves prior problem of Nemo Dat Originally, registration of title was a 2 step process: 1) Registration of absolute fee: title was registered, but

subject to a 7 year holding period during which title could be disputed. 2) Registration of indefeasible fee: if absolute fee was not disputed, title would become indefeasible.

Absolute fee no longer exists (converted into indefeasible title) BC was first North American jurisdiction to implement Torrens—Land Title Act (THE Act) General Pattern of Registration: BC has 7 land title districts and 3 offices (New West, Vict, Kloops) Two categories of interests: 1) legal fee simple, 2) all other registrable interests (charges) R v Kessler (1961) : Registration is for interests in land, not anything that merely affects title ie. registration may

be refused unless the instrument sought to be registered conveys an interest in land Skeetchestn Indian Band v BC (2000) : AT is not recognized in the Torrens system and not registrable. Nothing

can be registered which is not authorized by statute. Further, it is not registrable because it is inalienable.o Decision: to lodge a caveat or CPL, must be in relation to interest in land that is registrableo For AT and AR, a claimant must give actual personal notice, and cannot rely on statutory/constructive

notice.

Fee Simple Fee simple owner = owner of land surface. (LTA 179 (1)) Owner of land above or below surface can only register their interest as a charge. (LTA 179 (1))

o Exceptions: Strata lots are registrable if they comply with SPA (Strata Property Act 239(2)) Airspace parcels are registrable (LTA 141)

36

Effect of Registration What can be registered? Registration is for interests in land, not anything that merely affects title (Kessler)Aboriginal title cannot be registered (Skeetchestn) Legal estates Equitable interests Trusts

o Trustee can register title. “In trust” noted on title. (LTA 180 (3))o Beneficial interests/other particulars of trust are not registered on the title. o Trust instrument number also noted on title. Instrument held by LTO. o Trustee can be compelled to register trust on title. o This protects trustees from BFPVWON

Caveats – ss 282-294 CPL – ss 215-217 Judgments – ss210-214 Foreclosure on a legal mortgage (type of encumbrance) Restrictive covenants (s 182) and easements – if registered, runs with land ALR designation – Agricultural Land Commission Act s 17 Land (Spouse) Protection Act/Family Law Act, s 99 claim by spouse on family property Family Relations Act s 63; Heritage Conservation Act, Local Government Act, Van Charter “Green Zone” designation Heritage designation Builder’s lien

What cannot be registered? Personal licenses (eg Clarke v Johnson, personal license not property interest)

o Exclusive or shared occupationo No interest in propertyo Personal, not transferrable.

Short term lease Aboriginal Title (Skeetchestn)

o Not caveat CPL for things that cannot be registered Zoning bylaws (Kessler) Property taxes (are they up to date?) Equitable mortgages/lien (LTA s 33)

o There is a notation on title, because of withdrawal of duplicate indefeasible title. However, mortgage is not registered.

o No right to file caveat or CPL, because you must be claiming a registrable interest in the property to do so (Skeetchestn)

Particulars of trust (beyond trustee, “in trust”, reference to trust instrument number) Federal Crown Lands (First Nations Reserves) not part of the Torrens system, in spite of the fact that Crown

is trustee Not sub-agreement for sale by a registered owner to purchase land – s 200

37

Fee Simple & Indefeasibility Fee simple owner = owner of land surface. (LTA 179 (1)) Owner of land above or below surface can only register as a charge. (LTA 179 (1))

o Exceptions: Strata lots are registrable if they comply with SPA (Strata Property Act 239(2)) Airspace parcels are registrable (LTA 141)

Indefeasibility Fee simple is guaranteed/indefeasible (LTA s 23(2))

Indefeasibility granted to BFPFV on registration (regardless of whether instrument is valid/void) (25.1(2)) Crown grants must be registered, unless issued before April 6, 1968 (LTA 54)

o NB: Once land is under the register, no one ever has to register again Indefeasibility means that registered owner is not subject to defects in history of title (Creelman v HBC: the

fact that HBC took its title contrary to its rules of incorporation does not affect its title once issued.) immediately indefeasible (LTA s 25.1(2))(e.g. Frazer v Walker)

Registration of a volunteer does not confer indefeasibility: (LTA 25.1(2)(b)) This is debatable – no cases have dealt with it yet

Exceptions to indefeasibility - statutory Land Title Act (LTA 23(2))

a) Crown Grant limitations of the original Crown Grant are carried through to the transferee: LA s 50(1)(a)(i):

Crown right of resumption; up to 1/20th can be resumed without compensation for unused land (no gardens/buildings); mineral rights, water, timber.

b) Taxes Prov. and fed. gov’t taxes can impose liens on property owners and charge against the title Unpaid taxes can be attached to property even if they don’t appear on the title—no way for

purchaser to check Taxes run with land (third party becomes liable for tax debt)—vendor or purchaser can be liable Solution: holdback money to cover possible taxes

c) Municipal charge, rate or assessment ( Municpal Act s. 396(1)) Municipal property tax debt

o Can inquire at City Hall about the state of property taxo If the tax hasn’t been paid in 3 years, the city will take steps to sell (e.g. New West)

Local improvement charge (for sidewalks, curbs, etc.) d) Short term leases ( s. 23(2)(d)

Actual occupation AND Original term of lease + options to renew = less than or equal to 3 years the purchaser has to inspect; cannot have equitable notice. No need/cannot be registered.

e) Highway or public right of way, watercourse, right of water or other public easement ( s. 23(2)(e) ) Only public easement are given such protections; private easements must be registered Easements exist across everyone’s property so that utility companies can come in and inspect and

do their work (sewers, telephone lines, etc.) Can’t build on top of sewer mains, because the government will occasionally require access.

f) Right of expropriation or to an escheat under an Act ( s. 23(2)(f) escheat = death w/o will, no spouse or next of kin heir Property reverts to Crown Expropriation: the Crown can involuntarily force a transfer of property back to it, and provide

compensation to the fee simple owner (takes into account all improvements); Escheat: intestacy with no identifiable beneficiary, the property escheats back to Crown

ownership. Not a creature of private law, but is an attribute of sovereignty

g) Certain charges registered before or after registration of purchaser’s title ( s. 23(2)(g) )

38

Most common: builders lien—a purchaser can buy the property with no registered charge, but the charge can be later added: e.g., builders’ liens can be registered against a new owner, even if work done on the property was for the former owner (Carr v Rayward);

h) Correction of “wrong boundaries” (LTA, 23(2)(h)) Boundaries are not guaranteed indefeasibility or conclusiveness does not extend to location or

boundaries of property (Phillips v Keefe) Where boundaries are proven to be incorrect, the LTO may correct them. Title is subject to this

correction. Conveyancers are not responsible for verifying dimensions unless special instructions are given

and accepted. It is up to the purchaser to verify the lot lines using a surveyor (Winrob v Street)i) Fraud/forgery: see Fraud (exception to indefeasibility)—s.23(2)(i) j) Rights under the Forest Act : LTA , s 23(2)(j): rights under the Forest Act endorsed on the title are

consistent with indefeasibility of title, but not otherwise.k) Unregistered In Personam Claims: LTA s 23(4 ): this section provides an exception to indefeasibility for

unregistered personal rights against the registered owner: e.g., Clarke v Johnson. Cf. In Personam Claims.l) Registration of a Volunteer: LTA s 25.1(2): protection only extends to those who give consideration. Cf.

Transfers to Volunteers.m) Agricultural Land Commission Act n) Adverse Possession: Cf. Adverse Possession

Crown Right of Resumption: (LTA 50(1)(a)) see Crown Grants p.19 Crown can take up to 1/20th without compensation for road construction, other public works. Crown grant transfers surface rights Crown grant reserves to the Crown subsurface rights, water rights.

Agricultural Land Commission Act Cannot use ALR land for non-farm purposes (20)(1) Soil removal and replacement is non-farm purpose (20)(2) Cannot subdivide ALR land unless permitted in the act (21)(1) Can apply to commission to subdivide land (21)(2) If a parcel of land contains both ALR and non-ALR land, the regulations apply only to the ALR portion

(28) ALR does not need to be recorded on title if issued before June 29, 1973. After that date, ALR must be

registered on title. (60)

Exceptions to indefeasibility - common law Unregistered personal claim (like in Clark) – in personam only Bylaws (Kessler)

Creelman v Hudson Bay Insurance Co, 1920 PC: Facts

Hudson Bay (vendor) brought action for breach of contract of sale against Creelman (purchaser) Creelman's defence: under federal act, HB could not acquire or hold real property unless it was required

for purposes, use or occupation of that company; since HB did not acquire land under these requirements, it had no power to hold or dispose of land

Analysis of Lord Buckmaster (JCPC): "Certificate [of title] which, while it remains unaltered or unchallenged upon the register, is one which

every purchaser is bound to accept" To claim otherwise would "defeat the very purpose and object of the statute of registration" Creelman bound to accept certificate and comply with all their obligations under the contract Fact that HB was registered, even if registration was a mistake, gives it a real enforceable right =

indefeasible title; can validly dispose of land.Holding: Appeal dismissed

39

Adverse Possession Adverse possession does not affect registered title (LTA 23(3)) “squatter’s rights” Adverse possession is abolished except as provided in ss(2) where full period of adverse possession was

completed prior to 1975 statute (Limitation Act s 28) LTA s 23(3): protects indefeasible title against adverse possession except for narrow exceptions:

o Exception: if a squatter can demonstrate adverse possession existed for 20 years against the first owner (the Crown grantee) prior to acquisition or registration of title (LTA 23(4))

o Exception: if a squatter can demonstrate possession of unregistered property for 20 years against private true owner or 60 years for Crown Grant completed before July 1, 1975 (Limitation Act, s 28)

True owner is exempted from limitations that would otherwise apply to enforcement of judgments and can bring action for possession at any time and evict squatters and (Limitation Act ss 3(1)(b,h), 2(1)(e))

Encroachment is a form of adverse possession that may yield rights in rem: see (PLA 36) Cannot get interest in Crown land by adverse possession – LA s 8 (EXCEPT 60 years prior to 1975)

Mowatt v British Columbia (Attorney General), 2017 SCC: Mowatt attempt to establish adverse possession to unregistered landRequirements for adverse possessionFacts: Mowatt were owners of a lot adjacent to a lot which had never been registered under Torrens (“disputed lot”) and was subject to a string of unclear transactions in the deed system, so was vulnerable to adverse possession. Mowatts thought predecessors had established adverse possession.

Decision: Mowatt could not prove continuity resulting in a 4 year gap in possession (1916-1920)—registration in favour of Crown.

Ratio Gist of action is that if true owners fails to eject possessor within limitation period, right to eject is lost and

possessor acquires title free of compensation Requirements for adverse possession that possessor must prove on a BOP to establish claim: act of

possession must be open and notorious, adverse, exclusive, peaceful (not by force), actual (generally) and continuous.

o 1) Actual: actual possession of property. Distinction b/t occupation and possessionPhysical occupation for entire period of possession is not required. Property can be possessed without being occupied at all times

Still meet requirements if using property for same or similar purpose as intended by owner Adverse possessor who obtains title does not need to be same person who’s adverse

possession triggered running of limitation period Must only be continuous in that there must always be someone who the true owner can sue

o 2) Open and notorious: if true owner was reasonably diligent, would know or should know about possession by squatter, b/c it was plain to see.

Sqautter who possesses secretly so as to avoid detection by owner fails to establish title by adverse possession

o 3) Adverse: conflicts with true owner’s possession. If permission from true owner, not adverseo 4) Exclusive: possession must be exclusive to squatter against true owner and others ie. gate, fenceo 5) Peaceful and not by force: squatter must not intimidate or threaten true owner to gain possessiono 6) Continuous: uninterrupted. Periods of possessions by successive possessors can be added up to

meet requirement Inconsistent use doctrine is NOT a part of the law in BC

o Doctrine: the possessor’s use of the disputed lot must have been inconsistent with the true owner’s present or future enjoyment of the land

Reasons: Nelson is not the Crown, so 20 year rule applies.

40

Registration of Title Initial Crown grant must be registered

This is the only statute that compels registration; otherwise, owner can decide whether they want to register or not. (Land Act s 54)

Procedure for registering title (LTA 169 (1))The registrar must register the title if satisfied that:

a. The boundaries of the land are sufficiently defined by the description or plan on record/provided by the applicant (acceptable survey – Part 7, ss 58-120)

b. A good safe holding and marketable title in fee simple has been established by the applicant. i. “Safe holding” means a title conferring possession that is safe from attack and cannot be displaced

ii. “Marketable” means a title that is freely alienable, and not so defective that a reasonable purchaser could refuse it (Smith v Graham, 2009 BCCA 192)

Procedure for filing application Ensure that all the documents supporting the application are attested to and executed as required by (LTA s

41-50) Must file a completed property transfer tax form Pay fees to LTO Once these requirements are met, the application is received by LTA (stamped with date and time of receipt

and assigned a serial number). It then goes to the registrar for scrutiny.

Effect of Registration Registration is “conclusive evidence at law and in equity” that the person named is “indefeasibly entitled to

an estate in fee simple.” (LTA S 23(2)) legal fee simple is guaranteed and becomes indefeasibleo Section is heart of Torrens System

Date of Registration Registration takes effect from date/time application was received (LTA s 37)

Priority of Registration Date application was received (LTA 153)

all other interests and estates in the land are charges on the register; interests on a fee simple can be altered by agreement.

Duplicate Certificate of Title Duplicate certificate of title can be issued to owner by Registrar (LTA 176) Criteria for issuance (LTA 176)

o (1) Registrar must issue duplicate upon application, unless the title is subject to either a registered mortgage or agreement for sale.

o (2) Contains all the information in the register relating to the land in question, including all conditions, exceptions, reservation, charges, liens, or other interests to which the title may be subject.

If an application for a mortgage/agreement for sale is received when duplicate is withdrawn, duplicate must be returned before it will be registered (LTA 195)

When duplicate is withdrawn, the title is frozen – nothing will be registered on it. State of title certificate: produced by Registrar on application (ss 307, 308)

Charges Charge means an estate or interest in land less than the fee simple (LTA s 1).

41

Also encumbrances: judgment, mortgage, lien, Crown debt, etc. Registered charges are binding on purchasers of title.

Effect of Registration statutory constructive notice LTA s 27: Gives notice of existence of contents of interests creating a charge to

every person dealing with the title to the land if a charge is registered, persons are deemed to have had actual knowledge, even if they had no idea it actually existed.

LTA s 26: Charges “deemed” valid. Interpreted in Credit Foncier: this creates a rebuttable presumption that the owner of the charge is entitled to an interest in property.

o Charge is scrutinized, but not guaranteed by LTO it is only evidence of an interesto Registration does not confer indefeasibility.

Charges differ from fee simple: charges on the Registry simply show the existing and potential interests; they do not act as conclusive evidence that the purported interest is valid.

o Nemo dat applies to anyone who is taking the charge. Registered charge may be defeated by past defects.

Notation on title is not guaranteed to be accurate. Only the content of the instrument to which notation refers is relevant (Dukart v Surrey)

Charge obtained by fraud: defeasible: LTA s 25.1 Nemo dat applies: registration of void instruments do not confer any interest on charge-holders, even if:

o They were not party to fraud o They relied to their detriment on the register exception to mirror principle

No compensation to bona fide charge holder E.g. Gill v Bucholtz: mortgage obtained by fraud struck off the title

Ranking of Charges Charges rank in chronological order based on time and date of application to register (LTA s 28)

The Meaning of Registration: No definition of “registration” is provided by the LTA; definition derives from Dukart v Surrey; the dictionary

meaning is used: acceptance + record in a public office. o This is significant given that LTA s 197 says: on being satisfied from an examination of an application

and any accompanying instrument that the applicant is entitled to be registered as the owner of a charge, the Registrar must register the charge claimed by the applicant to be entering it in the Register.

Procedure for registering charges: (LTA 197) 1) Registrar must register charge when satisfied by inspection of instrument that applicant is entitled to it. 2) May refuse if:

o a) Good safe-holding and marketable title is not established; Evidence of “good safeholding and marketable title”:

Instrument from fee simple owner creating a charge in favour of the applicant Assignment to the applicant of an existing charge Creation of a sub-charge in favour of applicant.

o b) The charge is not registrable under the Act.

Cannot be created by someone other than the registered owner (LTA s 198) An instrument purporting to create a charge executed by someone who is entitled to be registered as owner of

fee simple must not be registered unless/until that person has been registered as the owner of the fee simple.

Dukart v Surrey 1978 SCC Facts Notation incorrect (says trust not foreshore reserve), removed as a result. Effective?

Land on Crescent Beach in front of Dukarts’ property (foreshore reserves) got into hands of District of Surrey by tax sale

42

o Foreshore Reserves was owned privately, but the owners didn’t pay taxeso Three years outstanding permits the municipality to step in to take title and sell ito In this case, Surrey didn’t sell the title, just held it.

Ultimately used it to build a “comfort station (toilet?)” Dukarts looked into the history of the title, found restrictive covenant providing them with access

to Boundary Bay (“foreshore reserve”). Contained within instrument described as trust on title. Dukarts argue that the toilet violates restrictive covenant.

o HOWEVER, purchaser of title in a tax sale takes it free of a trust. So when Surrey obtained the title, the reference to holding the property in trust was wiped off the title.

Issues What is the effect of misdesciption of a charge? Decision For Dukarts: should not have been removed from title.Reasons It expressly says in the statute regarding tax sale that all charges are removed from a title, except

for any easements registered against the land and any restrictive covenants registered against the land. So it was a mistake of the LTO staff to remove the trust from the title

SCC says that although the title describes the instrument as a trust, the instrument actually contained within it an easement providing free access to the beach/Boundary Bay.

o LTA does not deny the possibility of registration of an easement as a term of a trusto Result of trust registration was registration of easement

Surrey says that it must be registered on the title, which it wasn’t once the trust notation was removed from the title.

o SCC doesn’t accept this argument: says it was taken off by mistake, can be corrected. Torrens purists will say that this is forcing Surrey to go beyond the title. This is true, but fairness

demands that we go behind the title and respect the easement. Certificate did not accurately reflect the registered instrument Surrey was not a purchaser, so not BFPFVw/oN. If they were, result would be opposite.

Ratio Register of instruments; notation on title not guaranteed to be correct.

Credit Foncier v Bennett 1963 BCCA Facts Forged mortgage assigned to BFP. BFP tries to foreclose. Result?

The Bennetts (Ds) were registered in fee simple. Allen, an officer of Todd investments, forged a mortgage ($7400) on the Bennett’s property

which was registered against the lands, purportedly from the Bennetts to Todd Investments. Allen assigned mortgage from Todd Investments to Stuart, a real estate agent. Stuart then assigned the mortgage to Credit Foncier (P). Before completion of the purchase, Credit Foncier had its solicitors search the title and found the

mortgage registered. Credit Foncier wrote to Bennett notifying him of the assignment and requesting an

acknowledgment of the amount owing; Bennett did not receive the letter. Credit Foncier send a second letter, but the Bennetts ignored it thinking it a mistake. Credit

Foncier brought action against the Bennetts for foreclosure.Issues Does the registration of charges confer indefeasibility?Decision NoRatio Registration does not guarantee the validity of a charge. Now codified in s 25.1

o Nemo dat applies to anything less than the fee simple o Anything less than a fee simple is presumed to be valid, but that presumption is

rebuttable (can adduce evidence to show fraud or other defect in the mortgage) A mortgage is only security for the amount actually owing and advanced

o the onus is on an assignee of a mortgage to check the amount actually owingReasons Registration of a charge only creates a rebuttable presumption of validity. In this case,

presumption rebutted as mortgage was created by fraud Would not have succeeded even if mortgage had been validIn this case, there was no money

advanced under the mortgage to the Bennetts, and therefore, the mortgage secured nothing

43

Canadian Commercial Bank v Island Realty 1988 BCCA Facts Fraudster forges and registers discharge of mortgage in order to register another mortgage. What is

the effect? Park Meadow Estates (RO, Mortgagor) mortgaged their property to Imperial Life (1st lender); it

then granted another mortgage to Island Realty (2nd lender). Park Meadow asked Almont for a third mortgage.

Imperial Life (1st mortgage - registered) senior mortgage; ranks first, based on date of application to register. Paid off in full out of the proceeds of sale before Island realty will get anything out of it.

Island Realty (2nd mortgage - registered) junior mortgage; has mortgage on equity of redemption. Riskier than the 1st mortgage, so higher rate of interest.

Cowan (fraudster) forged and registered a discharge of the Island Realty mortgage & then sent Almont a copy of the certificate of title showing the Island Realty mortgage being discharged.

Island Realty had not agreed to have mortgage discharged Almont advanced funds. Cowan absconded and Park Meadow filed bankruptcy. There were

insufficient funds to pay both Island Realty and Almont.Issues Is Almont entitled to 2nd place or have their interests been discharged through the forgery?Decision Almont gets 2nd place. Discharge given effect.Reasons TJ held that Credit Foncier applied: the fraud was not effective to discharge the mortgage.

CA distinguished Credit Foncier that case dealt with an assignment, and this one deals with a discharge/novation treats differently

In this case, forgery was effective to remove the charge from the title, which means that Island Realty dropped off the title and was replaced by Almont.

o Court considered Almont to be a BPFV w/o N NB: novation/discharge requires the agreement of both parties. NO LONGER GOOD LAW BY VIRTUE OF s 25.1 the discharge of Island Realty’s

mortgage was done by fraud, which makes it a void instrument.Ratio Now, governed by s 25.1: discharge by void instrument not effective.

44

Builder’s Lien Exception to indefeasibility of title (LTA 23(2)(g)) Example: Carr v Rayward: title is subject to builder’s liens filed after application to register. Builders, material suppliers, contractors, sub-contractors, etc. have a right to file a lien against the property for

debts owing for construction. (Builder’s Lien Act, s.2)o Can file against interest of the owner in improvement, improvement itself, land where

improvement is located or the material delivered to land Limitation period: BLA, 20

o 45 days from completion, abandonment, or termination of the construction contract to file a lien. o 1 year from date a lien claim is filed to start a lien action. Must file a CPL.

Lien has effect from time the work began or materials were supplied and it has priority over all judgments, executions, attachments and receiving orders recorvered, issued or made after that date (BLA, 21)

Can be registered after the title has been purchased. (Rayward) Can result in the sale of the property to satisfy the lien obligations.

Carr v Rayward (1955 BC County Ct) Facts: Lien filed for unpaid work done for previous RO. Legit? Carr took a contract to do plumbing and filed a mechanics’ lien before the completion of the work, but after the land had been sold to Bell (D), and a certificate of indefeasible title issued in his name.

Carr: Unpaid plumber Rayward (RO#1) contracts Carr for plumbing, doesn’t pay Rayward sells property to Bell (RO #2)

Decision: For Carr

Ratio: (Mechanics) liens can be registered after title has changed hands.

Issue: Can a mechanics’ lien be effective against the lands if not filed in the land registry office until after the owner for whom the work was done and material supplied has sold the lands and the purchaser has obtained a certificate of title from the land registry office showing him as owner free of encumbrances?

Holding: Carr is entitled to a mechanics’ lien and personal judgment against Rayward.

Note: A way to avoid this problem is to postpone the closing and search the title to see if any lien has been filed after 45 days have passed.

Bell can pursue an action against Rayward.

Carr must file a CPL on Bell’s title when he starts the action.

Builders Lien Act, SBC 1997, c 45 S 2 – contract, subcontractor or worker has a lien against the owner, the improvement, the land or the materials

for any monies not paid in respect of the work S 20 – any lien may be filed within 45 days of the times specified in the Act, one of the times being the issuing

of a certificate that work is completed S 21—Lien not filed within the times specified in the act it is extinguished Lien has effect the time that the work began or the materials were supplied, and “it has priority over all

judgment, executions, attachments and receiving orders recovered, issued or made after that date”

45

Limitation period14 An action by a beneficiary or against a trustee of a trust created under section 10 must not be commenced later than one year after

a) the head contract is completed, abandoned or terminated, orb) if the owner did not engage a head contractor, the completion or abandonment of the improvement in

respect of which the money over which a trust is claimed became available.

Limitation and notice to commence an action33 (1) If a claim of lien has been filed, an action to enforce the claim of lien must be commenced and, unless the claim of lien has been removed or cancelled under section 23 or 24, a certificate of pending litigation in respect of the action must be registered, not later than one year from the date of its filing, in the land title office or gold commissioner's office in which the claim has been filed.(2) Despite subsection (1),

a) an owner, orb) a lien claimant who has commenced an actionc) may serve on a lien claimant, or other lien claimants, as the case may be, a notice to commence an action to

enforce the claim of lien and to register in the land title office or in the gold commissioner's office, as the case may be, a certificate of pending litigation within 21 days after service of the notice.

(3) The notice served under subsection (2) must be in the prescribed form, and service is validly effected if the notice is

a) served personally on the lien claimant, orb) mailed or delivered to the address for service given in the claim of lien.

(4) If service is by mail the notice is conclusively deemed to have been served on the eighth day after deposit of the notice in the Canada Post Office at any place in Canada.(5) Unless an action to enforce a claim of lien is commenced and a certificate of pending litigation is registered within the time provided in this section, the lien is extinguished.

46

Caveat Can be lodged by:

o Any person who claims to be entitled to an interest in registered land (LTA 282)o Registered owner (LTA 283) o Registrar (LTA 285)

Expires after 60 days (LTA 293)o Non renewable. Once civil proceedings are filed, a CPL can be filed until litigation resolved

Title holder may force person filing caveat to file suit within 21 days or withdraw the caveat (LTA 293) Can only be lodged in respect of registrable common law, equitable, or statutory interest in property

(Skeetchestn).

Purposes of lodging caveat: Does not provide an interest in property; it is a statement or warning of caveator’s interest in property Protects unregistered, equitable, and other vulnerable interests. If claim to which caveat relates is established, caveator has priority over other interests made after

date of lodging of caveat (LTA 31) established by judgment or order or an instrument Gives constructive notice of the estate or interest claimed.

Effect of Caveat (LTA s 288 (1)) Prevents any change in boundaries affecting the land described in the caveat, unless consented to by the

caveator. Prevents registration of any instrument affecting the land described in the caveat – “freezes the title”

o Exception: if the instrument is expressed to be subject to the claim of the caveator Exception to the exception: an instrument expressed to be subject to the claim of the caveator

may be registered unless the claim of the caveator, if successful, would destroy the root of title of the person against whose title the caveat has been lodged

o (2): an instrument expressly subject to caveator may be registered, unless claim of caveator, if successful, would destroy the root of the title against whose title the caveat has been lodged

Further Caveat provisions Discharge by court order (289) Withdrawal (290) Possibility of lodging one more caveat (291) if caveator has withdrawn the caveat.

o If it has lapsed or been discharged, can not register another caveat

Easements s. 181: (1) On an application to register a person as owner in fee simple of land under an instrument by which

(a) an estate or interest in the land transferred remains in the transferor,(b) a restrictive covenant is entered into by the transferee for the benefit of other land registered in the

name of the transferor, or(c) a condition, exception, reservation, easement, statutory right of way or other right in land or on the

land covered by the application is imposed, reserved, or created that, despite this section, could be registered as a charge under s 197.

the existing indefeasible title must be cancelled and the estate or interest remaining in, and the rights reserved to the transferor or imposed or created must, on application, be registered as a charge against the new indefeasible title.(2) The applicant for the registration of the fee simple is authorized to make, on behalf of a transferor, any application necessary to give effect to subsection (1).

47

Certificate of Pending Litigation Any person who has commenced or is a party to a proceeding may register a CPL as a charge (LTA 215) registration in the LTO provides notice of commencement of litigation affecting the land/title; usually a claim of

a proprietary interest. Not an interest in property—simply a statement or warning of pending litigation If CPL established, person who registered has priority over subsequent charges (LTA 31) General effects:

o 1) protect litigants and litigation process from third parties (sales)o 2) gives constructive notice to the world of that if a party deals with the property, they will take subject

to the outcome of the litigation (and to the owner s 215(3)).

Registration of CPL (LTA s 215) Who can register? 215(1): any person who has commenced or is party to a proceeding (215(1)(a)) and who

is claiming a registrable estate or interest in land AND 215(8): judgment creditors Registration done in same manner as charges—Must file supporting documents. Must mail a copy of CPL to owner against whose title CPL has been registered. (s 215(3))

Effect of registered CPL (LTA 216) Prevents registration of anything, except:

o Lodging a caveat (2)o Indefeasible title or charge, IF subject to outcome of litigation (2(a))o Assignment of a charge, if registered before CPL was registered (2(d))o Sublease, if lease was registered before CPL (2(e))o A certificate of judgment, order, notice, claim of builders lien, CPL or any other involuntary charge

(2(f))NB: Anything registered when CPL is in effect may be subject to outcome of litigation. (3(b))

Effect of CPL if prior application is pending (LTA 217) Rudland codified Applications received prior to CPL may be registered (1) If prior applicant is party to CPL litigation, title will be subject to outcome of CPL (2(a)) If prior applicant is not party to CPL litigation (and is BPFV w/o N), CPL will be cancelled (2(b))

Rudland v Romilly 1958 BCCA Received legislative approval: LTA s 217 Facts Nov 21: Romilly (RO#1 in fee simple) executed a deed conveying fee simple to Lindsay (RO#2,

alleged fraudster) for considerationDec 14: Lindsay applied to register that deed and became RO#2 and quickly flipped the propertyDec 16: Lindsay executed a deed to Rudland (BPFV) as collateral for a loan due December 23rdDec 29: Lindsay obtained a certificate of title free of chargesDec 29: Rudland applied to the deed from Lindsay Jan 16: Romilly lodged a CPL on the title, claiming that Lindsay’s registration was fraudulent

Because of the CPL, Registrar refused to complete the registration of Rudland’s title. Rudland sues to expunge CPL.

Issues Where a CPL is lodged after an application to register title by a BFPFVWON is filed, but before the BFP’s title is registered, whose claim takes effect?

Decision For Rudland—she was a BPFV w/o N of CPLReasons If there is something that is not registered, the highest you can say is that they have equitable

claims to the property. Equitable rules apply: first in time, first in right/where the equities are equal, the law prevails.

Ratio Notice that is given after the entire transaction of purchase and sale has been executed cannot affect the title of a BFPVw/oN. if prior application to register is pending, CPL does not take effect

48

Judgments Who can obtain a money judgment (an order for debtor to repay money) Creditor can obtain judgment in following situations: don’t respond to summons mailed by creditor; don’t

respond to motions for civil claim; show up in court but lose case If a P obtains a money judgment against a D, P may register it as a charge against D’s title

o Not an Interest in the Property: the judgment creditor is an unsecured creditor; judgment provides a very limited form of protection for the creditor. Prior interests, registered or otherwise, can still be applied (nemo dat). The creditor only takes whatever interest remains after all other interests remains after all other interests are accounted for, subject to the equities (s 86(3)).

NB: applies to money judgments only. Judgments which create an interest in land will be reflected by direct alteration of title.

Registered like a charge – LTA s 210, Court Order Enforcement Act ss 88, 91 When judgment registered, registrar req to notify the owner of the land or charge, COEA 89

Effect of registration Allows creditor to obtain a writ of seizure and sale execution sale

o Execution sale may be far below market value Nemo dat applies:

o Registered and unregistered interests that rank ahead of the judgment will limit the amount that the creditor can get out of the property

o If, e.g., the property is subject to a mortgage (whether registered or not), the judgment creditor can only sell the interest of the debtor in the asset. COEA S 86(3)(c)

Judgement which affects title will be reflected by a direct alteration of the title

Court Order Enforcement Act (s 86 (3)) Once registered, the judgment forms a lien and creditor holds a charge on the land of the judgment debtor. Nemo dat applies:

o Judgment can be enforced only to the extent of the judgment debtor’s interest in the land (86(3)(a))o If the registered owner is a trustee, judgment can only be executed to the extent of the beneficiary’s

debt and interest (86(3)(b))o If BFPFVWON purchases the title/acquires an interest in the land before judgment is registered

on the property, BFP’s interest takes precedence (even if BFP has not registered) (86(3)(c)) If a judgment is registered after agreement for sale, but before close of sale, purchaser gets

title free of judgment (unless it is a scheme to defeat judgment) Martin Commercial If a judgment is registered after a sale is agreed to, but before the sale closes, purchaser takes property free of

creditor’s interest (Martin Commercial Fueling)

Judgment creditor who w/o reasonable cause causes registration on wrong owner, may be liable to compensate: COEA s 90

Martin Commercial Fueling v Virtanen Facts Judgement registered after sale agreement, but before sale closestakes subject to equities Applying s 20(1), the phrase “except against the person making it,” meant the debtor, as registered owner,

was personally bound to perform the unregistered contract of sale, despite lack of registration. The binding obligation made by the debtor, or “equity,” preceded registration of the judgment. The unregistered purchaser had an in personam claim against the vendor arising on the making of the binding

agreement. Registration of a judgment creditor means the creditor takes its ranking on the register “subject to the

equities”, i.e. the creditor can only seize and sell the debtor’s interest remaining after taking into consideration the debtor’s unregistered personal obligations indirectly affecting title.

Unregistered interests rank ahead of the registered judgmentRatio If a judgment is registered after agreement for sale, but before close of sale, purchaser gets title

free of judgment (unless it is a scheme to defeat judgment)

49

Mortgages Property serves as loan security. Mortgagor = debtor; mortgagee=creditor

o There are two rights involved in a mortgage: (1) loan contract (in personam); (2) the encumbrance of a security interest ie. collateral security (in rem).

Transfer: registration on title, the security is only for the amount actually advanced, and parties should verify how much is actually advanced under the mortgage (Credit Foncier).

Two types of mortgage transfer: (1) keeping the existing agreement and assigning it, transferring the rights only; (2) novation: substitution of a new agreement/party and cancellation of the old—all parties must agree.

Default If the mortgagor defaults on their loan, the mortgagee has the right of foreclosure, i.e. seizing and selling the

title to recover debt (“real recovery”). Requires judicial order for the sale of the property. o Property is sold to pay the lender what they are due and any surplus is given to the borrower

However, Equity allows the mortgagor in default a reasonable time period to redeem the property/regain title by paying the debt Pacific Savings

o 1) usually 6 months redemption period equity of redemptiono 2) additional redemption period in the court’s discretion

Mortgagee only gets to recover amount of debt; any surplus will be returned to the mortgagor. Strict foreclosure : holding the title until the property rises in value so that the mortgagee can recover loan

principle. Foreclosure wipes charges registered after the mortgage off the title

o If an easement is created after a mortgage, the person seeking the mortgage should require it to be given priority ahead of the mortgage so that it will not be wiped of in foreclosure Would require consent of the mortgagee.

Mortgagor can sue mortgagee in negligence if they sell property at too low a value/sell without following normal market practices.

Changing priority of registered changes: Is it possible for the priority of instruments to be changed?: Can be done through a subordination clause

(agreement b/t two parties with registered charges); such an agreement reorders the priority. Foreclosure removes only financial charges from the title; easements and statutory rights of way remain.

CREDIT FONCIER V BENNETT 43FORGED MORTGAGE ASSIGNED TO BFP. BFP TRIES TO FORECLOSE. RESULT?

REGISTRATION DOES NOT GUARANTEE THE VALIDITY OF A CHARGE. NOW CODIFIED IN S 25.1A MORTGAGE IS ONLY SECURITY FOR THE AMOUNT ADVANCED

CANADIAN COMMERCIAL BANK V ISLAND REALTY 44FRAUDSTER FORGES AND REGISTERS DISCHARGE OF MORTGAGE IN ORDER TO REGISTER ANOTHER MORTGAGE. WHAT IS THE EFFECT?

NOW, GOVERNED BY S 25.1: FRAUDULENT DISCHARGE DN TAKE EFFECT.GILL V BUCHOLTZ 57

FRAUDSTER FORGED TRANSFER TO AN ACCOMPLICE. ACCOMPLICE TOOK OUT 2 MORTGAGES. EFFECT?REGISTERED CHARGES ARE NOT INDEFEASIBLE. NEMO DAT APPLIES.CHARGES OBTAINED BY FRAUD WILL BE STRUCK OFF THE TITLE.

Pacific Savings and Mortgage Corp v Can-Corp Developments 1982 BCCA Facts Mortgagee forecloses on property. Mortgagor files CPL to have redemption period extended.

The registered mortgagees (Pacific Savings) commenced foreclosure proceedings and obtained an order (against Can-Corp), and then a certificate of indefeasible title.

Can-Corp then gave notice they intended to redeem (to pay off mortgage and get title back), and filed a notice of claim motion to reopen the final order, and obtained a lis pendens in an attempt to prevent Pacific Savings from transferring title.

50

The 6 month redemption period had expired. The mortgagees later accepted an offer to purchase the property. (Lis pendens was filed before acceptance of transfer)

P subsequently obtained funds to redeem mortgage, and went to court and asked to have order re-opened. Filed CPL

D said this was impossible, because they had obtained indefeasible certificate of title. Issues Are the mortgagors entitled to redeem?Decision For Can-Corp: mortgagee’s title subject to mortgagor’s right of redemptionReasons The rights of the mortgagor rank ahead of the rights of the purchaser because the mortgagor filed

a CPL on the property (with that CPL they gave notice to the world that the mortgage was going to be reopened and that if the court was sympathetic, they would be given a second chance to redeem the property).

o Note: if innocent 3rd party purchaser had bought before the CPL was filed, then the CPL would have been too late

“Equity abhors a forfeiture”: it will give a mortgagor every chance before forcing it to give up property, including recognizing the CPL past the 6 month period for redemption.

Mortgagor still held the property (though had accepted an offer). If it had sold it to a BFPFVWON, mortgagee would have had no claim against it.

Court says that as a mortgagee, you have right of foreclosure, but you also have the responsibility of right of redemption.

The issuance of a certificate of indefeasible title, while offering absolute protection to the BFPVw/oN, is not a bar to claims at law or in equity against the registered owner made by persons asserting an interest in the lands described in the certificate.

Ratio After foreclosure, rights in property in favour of the mortgagee, but subject to personal rights (right of redemption) of mortgagor.

Equitable Mortgages Cannot be registered on title (LTA s 33) There is a notation on title of withdrawal of duplicate indefeasible title. Created by deposit of duplicate title. Legal effect of depositing duplicate title is unclear:

o Royal Bank of Canada v Mesa Estates (BCCA 1986) Where a duplicate title is deposited, it may be

For safe keeping; To ensure a borrower does not deal with the land; With the intention of creating an equitable mortgage.

It is for the party alleging the existence of a mortgage to prove that was what was intended. o North West Trust Co (Alta CA 1990)

Deposit of duplicate creates presumption of intention to create an equitable mortgage.

51

Assurance Fund If certain conditions are met, a person may be able to claim compensation for the loss of an interest in land.

These conditions are not easy to satisfy. Protect innocent parties who have been deprived of their ownership in fee simple because of the conclusiveness of the registry.

Who can make a claim? (LTA 297) Current or former registered fee simple holders only Must have acquired the title in good faith for valuable consideration

What is covered? Cost (not value) of land (excluding buildings & other improvements)

Under what circumstances can someone make a claim? (LTA 296(2))a. A person who is deprived of an estate or interest in land

i. Because of the conclusiveness of the register, ANDo I.e., if you would have been able to re-acquire land under common law, but due to

immediate indefeasibility, it is impossible to do so.o E.g. McCaig v Reys – no claim because the loss would have happened even without

Torrens (option lost because title sold to BFP)ii. Due to fraudulent/wrongful registration of someone other than the owner, AND

b. Who is unable to bring an action for Possession/recovery of the land, OR Rectification of the register (Registrar can only rectify minor mistakes, NOT allocation title)

- OR - A person who sustains loss or damage as a result of an omission, mistake, or misfeasance of the registrar (LTA 298)

How does it work? (LTA 296) (2) P must bring claim against person whose wrongful act deprived them of land. (3) Must join the minister as a nominal defendant in the suit.

o Minister may use any/all defences to protect the fund. (4) If person liable for damages is dead/not found in BC, claimant may proceed against minister. (5) The minister must pay the balance out of the assurance fund on the account of person liable if:

o Final judgment in proceedings is given, ando The court certifies that the plaintiff has taken all reasonable steps to recover the amount of

judgment from the person liable, but has been unable to do so (in part or in whole).

Time limitation (LTA 296(8)) 3 years after the deprivation is discovered by claimant.

Assurance fund is a remedy of last resort First recourse: wrongdoer/other insurance: (LTA 296(2)(b)) Malpractice coverage/law society (in case of lawyer error): (LTA 296)

52

Who cannot make a claim? (LTA 303)(a) Types of owners not covered:

i. Undersurface rights ownersii. Equitable mortgagee (Royal Bank; now in statute: 303(a)(ii))

(b) Types of losses not covered:i. Breach of trust (trust beneficiaries not covered by fund) (303(b)(i))

ii. Misdescription of parcel boundaries (303(b)(ii))iii. Improper use of corporate seal/signing authority iv. Dissolution of a corporation, or lack of ability to hold and dispose of landv. Issue of a provisional certificate of title

(c) Mistakes in Crown Grant (e.g. multiple grants were issued for the same piece of land)(d) Error or shortage in area of lot, or shortage in air volume of air parcel(e) If the plaintiff, served with notice or knowing that the registrar was about to alter title improperly,

unless the P took appropriate steps to prevent the error from occurring If the plaintiff caused or contributed to the loss/damage/deprivation through an act, negligence or

default Volunteer/donor (LTA s 297) Charge holders (LTA s 297) Mortgagees (Gill v Bucholtz)

McCaig v Reys , 1978 BCCA McCaig lost option to land because of the dastardly Jerome. Claim to Assurance Fund denied.Facts Mccaig’s option to purchase land was never registered. Land was subsequently sold in agreement

with no reference/notice to unregistered option for which McCaig gave consideration; the sale subsequently extinguished any right of McCaig to the option; the land passed twice, from Rey to Rutland (Jerome as agent) to Jabin. The buyer, Jabin, took title as a BFPVw/oN of McCaig’s equitable interest as Jerome failed to mention option—therein acquiring a good safeholding and marketable title (indefeasible title). Reys, who granted the option, was aware of its existence—this info was passed onto Jerome; by quitclaim Jerome sought to remove McCaig’s interest by fraud.

Issues Can McCaig recover from the fund?Decision No—his claim would have failed in common law, as BPFV w/o N has always been protectedReasons Test – In order to succeed against the Assurance Fund, a claimant must show: LTA, s296

1. That he has been deprived of land or an estate or interest therein2. The loss was occasioned as a result of the operation of the statute (the Land Registry

Act) 3. That it was occasioned by fraud, misrepresentation, or some wrongful act in the

registration of any other person as owner of the land or interest in land4. He is barred from bringing an action for rectification of the register

He is barred from succeeding in action against assurance fund because of 2: he would have suffered the loss if the common law governed (because the BFP takes precedence over unregistered interests). Note that now, statute bars recovery for interests less than fee simple. (recovered against fraudulent seller)

Ratio Loss must be occasioned by operation of the register. Legal title trumps prior equitable title.Comments

Claimed against Rutland and Jerome, against assurance fund, but none against Jabin who gets land

53

RBC v BC , 1979 BCSC Facts Equitable mortgage granted, but duplicate removal not recorded. Subsequent mortgage registered.

Walsh became registered fee simple owner of a parcel; the Land Registry Office gave him a duplicate certificate of title; he deposited that certificate to plaintiff as security for loans. When the LRO delivered the certificate, it was not entered in the office delivery book. Walsh subsequently acquired a mortgage from Scotiabank; when the mortgage was filed, the duplicate was absent. Plaintiff, RBC, advanced loan to Walsh after registration of mortgage; the plaintiff was unable to recover loan from Walsh it made against Assurance Fund for the loans made by it after Scotiabank mortgage was registered. Plaintiff claimed it was by “mistake or omission” by Registrar in accepting Scotiabank mortgage for registration resulting in loss to plaintiff.

Issues Can mortgagees recover from the fund?Decision NoReasons The Registrar owed no duty to Royal Bank but only to those seeking to utilize the services of the

Registrar (one cannot obtain compensation built up by others’ contributions; Royal Bank cannot be given the protection afforded by registration); the person alleging loss as a result of mistake of the Registrar must show that the loss flows naturally and directly from the mistake.

Ratio 1. Mortgagees cannot collect from the Assurance Fund, nor can those whose losses do not result from the mistake of the Registrar.2. Those who seek to rely on equitable mortgages must accept the risks inherent in such securities.

Gordon v Hipwell , [1952] (BCCA): Facts Registrar had incorrectly removed a caveat which had been filed by Gordon against Hipwell’s title.

Hipwell had bought land from Gordon; Hipwell registered as a fee simple owner after paying with stolen diamonds. Hipwell then left Canada and the diamonds were confiscated by police. Gordon filed a caveat on the title; Hipwell then got the caveat removed after wife sold the land to a BFPVw/oN that became the registered owner. Gordon claimed against the Fund.

Issues Can Gordon recover against Fund?Decision YesReasons the interest Gordon has was analogous to a trust—his caveat was therefore “permanent” and wasn’t

to be removed;Comments

Current Act has no provision for “permanent” caveats

54

Unregistered Interests (Against Person) Unregistered instrument does not pass estate (LTA 20) Unregistered instrument is only effective against the person making it creates rights in personam…

o Third parties who acquire unregistered interests will be given effect against the person making them (L&C Lumber – timber license)

o E.g. If A grants interest to B, and B grants it to C, it is effective against A Unregistered instrument not effective at law or equity against anyone else …not in rem

o 3rd party purchasers are not encumbered by unregistered interests (Sorenson– easement across land) Registration is not compulsory, except for initial crown Grant (LA s 54) There is strong incentive to register: immediate indefeasibility, priority based on chronological order

Effect of notice of unregistered interest (29(2)) Notice has no effect, except:

o Fraud o A lease of three years if actual occupation.

Having suspicions raise and failing to ask questions not enough to constitute fraud (Sorenson)

Judgments Registration creates (COEA s 86) If a judgment is registered after a sale is agreed to, but before the sale closes, purchaser takes property free of

creditor’s interest (Martin Commercial Fueling) – nemo dat

Prohibited Transactions-Int’l Paper v Top Line – unenforceable b/c did not follow subdivision rules, now 73.1-Follow Top Line before May 31, 2007

Before Torrens: Legal interests effective against the whole world Equitable interests effective against everyone but the BFPFVWON

Sorenson v Young , 1923 BCSC – enforcing unregistered interests Facts Unregistered easement across land; property sold; new owner builds a gate.

Sorenson purchased a lot and subdivided it into two and sold a lot to Roch (RO#1), reserving a right of way to his own lot.

One of the plots didn’t have access to the public road. Sorenson owned this lot; Roch owned the other.

Sorenson created easement and build a road across Roch’s property. Roch agreed not to impede access. Easement was never registered.

Young (RO#2) bought the lot from Roch; Sorenson continued to use the right of way for 4 years, then Young erected a fence, claimed he was a BFPVw/oN.

Sorenson seeks declaration of right of way and for fraud for deprivation of right of way. Issues Is Young’s title encumbered by the easement? Is easement enforceable?Decision Young was BFPFVWON and took title free of easementReasons Sorenson alleges fraud: Young had actual knowledge/wilful blindness.

Problem: he who asserts must prove: Sorenson did not adequately discharge this burden. Only showed circumstances that would have raised Young’s suspicions (tire tracks across property; garage at end of road), which is not enough.

But if he had been suspicious, he would have gone to the LTO & found that it wasn’t on the title.Ratio Unregistered interests do not have effect against a BFPV w/o N, even where constructive notice

is likely.Notes Many changes to LTA since this case. S. 181 was added to allow registered owner to retain

unregistered easement and enforce against a BFPV. Could argue estoppel or implied license, given that Young permitted Sorenson to cross the

property for three years.

55

Martin Commercial Fueling v Virtanen 1997 BCCA – judgments v. unregistered int. Facts Judgement registered after sale agreement, but before sale closes purchaser gets title free of

judgment. On October 10, 1991, a registered vendor (RO#1, debtor) agreed to sell to the Virtanen (URO#1). On October 25,1991, a judgment creditor, Martin (creditor), registered a judgment against the

vendor’s interest. On November 6, 1991, the sale closed. Virtanen registered title. Received title subject to judgment

Issues Is the purchaser’s interest subject to the judgment.Decision The purchaser’s interest is not subject to the judgment.Reasons Applying s 20(1), the phrase “except against the person making it,” meant the debtor, as

registered owner, was personally bound to perform the unregistered contract of sale, despite lack of registration.

The binding obligation made by the debtor, or “equity,” preceded registration of the judgment. The unregistered purchaser had an in personam claim against the vendor arising on the making of

the binding agreement. Registration of a judgment creditor means the creditor takes its ranking on the register

“subject to the equities”, i.e. the creditor can only seize and sell the debtor’s interest remaining after taking into consideration the debtor’s unregistered personal obligations indirectly affecting title.

Ratio If a judgment is registered after agreement for sale, but before close of sale, purchaser gets title free of judgment (unless it is a scheme to defeat judgment)

L& C Lumber v Lundgren , 1942 BCCA Facts Timber license assigned to 3rd party; what is the effect? 3rd party can enfore against “person making

it” (original party) Lungdren sold standing timber on her land with a right to enter and cut (a profit-a-prendre; type

of easement) to McDonald (license)o They sold it for cheap, McDonald got such a good deal that they could sell it again

McDonald (assignor) assigned all his rights under the agreement to L&C Lumber (assignee), who gave due notice in writing to Lungdren that they were the license holders.

Neither the license agreement nor the assignment was registered. When L&C Lumber attempted to cut, the Lungdrens refused entry and tried to justify their

refusal under the Land Registry Act (now s20(1) of the Land Title Act), because of the failure to register.

Issues Is the profit a prendre enforceable by a 3rd party (L&C) against the person making it (Lundren)?Decision L&C Lumber could enforce the personal rights in the instrument against Lundgren as she was the

initial party to the profit-a-prendre.Reasons The purpose of section 34 (now s 20(1) of the Land Title Act) is to protect purchasers for value

without notice, and enable them to rely on the state of the register when they search the title. Because of the lack of registration, s 20(1) prevents enforcement only of rights in rem, but

permits enforcement of otherwise valid personal rights against the party. The assignment of contractual rights to L&C Lumber was valid and enforceable against

Lungdren personally. As Lungdren was still the RO, personal enforceability of the contractual rights had the same

effect for practical purposes as indirectly enforcing an interest in property. Ratio Unregistered instruments are enforceable by 3rd party purchaser against the person who

created them.

Carlson v Duncan, 1931 BCCA – invalid assignment 3rd party can not enforce unregistered interest against a person who was assigned the unregistered interestmust register assignment for enforceability.

56

Herrling granted timber rights to Kelliher (license/easement). Registered against Herrling’s title. Transfers: HerrlingAgassizCarlson=RO Kelliher died intestateheirs quitclaimed interest (unregistered) Duncan. Duncan want to log, Carlson say no.

Decision: for Carlson—Duncan could not enforce interest against 3rd party, only against person making it agreement to pass interest in land is not operative to pass any estate or interest in land until registered Quitclaim enforceable against party making it, but not against Agassiz or Carlson b/c not registered.

Reasons Distinguishable from Lundgren: here, enforcing against third party Carlson, whereas in Lundgren, 3rd

party was attempting to enforce “against the person making it” Takeaway: assignment must be registered Quitclaim is an assignment that shifts all the risk to the receiver

International Paper v Top-Line , 1996 BCCA prohibited transactions Facts Top Line owned rural land; International Paper wanted to put a recycling depot on Top Line’s

land; they made agreement to lease a portion of the land by way of subdivision; the lease was not formalized.

The parties prepared their own lease for a term of 51 months subject to a right of renewal (>3 years)

o No mention was made of whether the lease was to be registered. Top Line wanted out of the deal and argued that the lease unenforceable or void because of s 73

of the LTA.o A lease of a part of bareland requires subdivision, and an instrument in contravention of

this section is not registrableIssues What is the effect of s 73 on the validity of proprietary and personal rights, if any, arising under a

lease agreement entered into by parties who were unaware of the provision? Should s 20(1) apply so as to bind “the person making it” ie. topline?

Decision For Top LineReasons The written but unregistered agreement to lease part of a larger parcel of vacant land illegally

bypassed s 73(1), zoning imposed by local government, and registration required by the Torrens system.

Under s 73.1, only initial parties to the lease of a portion of a larger parcel of vacant land can enforce it against each other even though the lease is unregistered and was not preceded by subdivision.

Ratio Section 73 can take priority over s 20(1); an interest that breaches a statute is not enforceable against the parties making it.

An unregistered lease of part of a vacant, or undeveloped, or unsubdivided, lot is contrary to public policy and unenforceable. Section 73 requires the formality of subdivision as a matter of public policy. NB: Now overruled by s 73.1

Note Note: Critics of this decision persuaded the Legislative Assembly of BC to reverse it. The result was enactment of s 73.1

(which restores the possibility of in personam enforcement of leases of portions of raw land, despite the lack of subdivision), but it has also been criticized as failing to solve the problem (the BCCA interpreted s 73.1 as having prospective effect only; Top Line applies to invalidate pre-2007 transactions as illegal and unenforceable).

Under s.73, you can lease subdivided land if subdivision is approved Prior to this decision, it was generally accepted that effect of s.73 was that a lease of a part of an

unsubdivided parcel of land did not create a registrable interest but created personal rights enforceable as between the original parties to the lease e

57

Idle-O Apartments Inc v Charlyn Investments Ltd, 2010 BCCA 450-s 73.1 has prospectus effect only. Top Line to be followed prior to May 31, 2007

Restrictions on subdivision73 (1) Except on compliance with this Part, a person must not subdivide land into smaller parcels than those of which the person is the owner for the purpose of

(a) transferring it, or(b) leasing it, or agreeing to lease it, for life or for a term exceeding 3 years.

Lease of part of a parcel of land enforceable73.1 (1) A lease or an agreement for lease of a part of a parcel of land is not unenforceable between the parties to the lease or agreement for lease by reason only that

(a) the lease or agreement for lease does not comply with this Part, or(b) an application for the registration of the lease or agreement for lease may be refused or rejected.(2) This section does not apply to an airport lease, as defined in section 41 of the Municipalities Enabling and Validating Act (No. 2)

58

Fraud (Exception to Indefeasibility) General Despite registration, a fraudster has a defeasible title and an innocent owner of the fee can recover the property

(LTA 23(2)(i), 25.1 and 29 govern fraud) Agent’s fraud imputed to principal S. 25.1 is an attempt to resolve the uncertainty resulting from conflicting reasoning in Frazer and Gibbs, but

BCCA rendered a controversial interpretation of s.25 in Gill v Buccholtz

LTA Fraud provisions s 23(2)(i) Where a person participates in fraud to gain an interest in property, that instrument or interest is void; s 25(1) Lesser interests (than fee simple) are not indefeasible by registration of a void instrument. s 25(2) Where someone receives land through a void instrument, but they are a BFPVw/oN, they will acquire

title.

Two types of fraud in the Torrens system: a. Title fraud/fraud on the registered owner

E.g. Gill v Bucholtz: mortgage obtained by fraud struck off the title.

b. Fraud on the holder of an unregistered interest E.g. McCaig v Reys: Jerome committed this type of fraud by selling property without

ensuring the unregistered interest will be honoured. LTA 29(2): notice of unregistered interest is relevant in the case of fraud

Fraudulent Conveyance transfer to defeat creditor Where debtor sells title in attempt to protect it from money judgment to someone in cahoots with them. Creditor can apply to set aside transfer, get property put back into debtor’s name and execute on the

property. Indicators (“badges”) of fraud:

o Was the transfer to an insider?o Was the transfer hidden?o Was the transfer around the time a substantial debt was incurred?o Did the debtor retain possession or control of the property?o Was the debtor insolvent at the time?

Fraud against registered owner (forgery) Effect of registration of void instrument (LTA, s 25.1)

(1) Registration of a void instrument does not confer estate/interest in land (2) HOWEVER, if fee simple is transferred to a BFPFV, they get indefeasible title

o Does not apply to volunteers (e.g. if a fraudster dies, person who inherits the property will not benefit from immediate indefeasibility. Title will be defeasible until it’s sold).

Title obtained by fraud LTA s 25.1(2): Even though an instrument purporting to transfer a fee simple estate is void, a BPFV in good

faith and named in the instrument is deemed to have acquired that estate on registration of that instrument LTA s 23(2)(i): Title defeasible if taken by fraud in which the registered owner has participated in any degree If title is held by…

Fraudster: defeasible (LTA s 23(2)(i)) Held by accomplice of fraudster: defeasible (LTA s 23(2)(i)) Held by volunteer: defeasible (LTA s 25.1(2)) Held by BPFV: immediately indefeasible (LTA s 25.1(2)) (e.g. Frazer v Walker)

59

Charge obtained by fraud: defeasible (LTA s 25.1) (Gill v Bucholtz: mortgage obtained by fraud struck off the title), Dukart inaccurate title

Nemo dat applies: registration of void instruments do not confer any interest on charge-holders, even if: o They were not party to fraud o They relied to their detriment on the register exception to mirror principle

No compensation to bona fide charge holder Forgery is not distinct from fraud and Gill applies to voidable and void mortgages (First West Credit)

Gill v Bucholtz , BCCA Facts: Fraudster forged transfer to an accomplice. Accomplice took out 2 mortgages. Effect? Mr. Gill, P, owned Lot 4. A fraudster, “John Doe”, forged Mr. Gill’s signature on a transfer of Lot 4 to

Gurjeet, who was an accomplice of the fraudster. Gurjeet purported to grant a mortgage to the Ds (Bucholtz), who, in reliance on the register, advanced

$40,000 to Gurjeet and filed the mortgage with the LTO at same time as forged transfer (Nov. 25, 2005) Gurjeet later negotiated a second mortgage in favour of the corporate D, registered on Dec. 9 P filed a caveat before the second mortgage could be registered (but the corporate D had already advanced

$55,000 under it). None of the lenders had knowledge of fraudulent root of title and they had sought and confirmed Gurjeet

Gill’s identity before advancing funds. Mr. Gill’s title was restored to him under the fraud exception to indefeasibility (LTA s 23)

Issue: Will the Ds’ fraudulent mortgages continue to encumber P’s restored title?

Parties: Gill: true owner, registered owner 1, victim of fraud John Doe: fraudster Gurjit Gill: registered owner 2, accomplice Bucholtz: registered mortgagee holders

Decision: For Gill—mortgagees did not acquire any interest in Lot 4 upon registration of their instruments b/c Ms. Gill became a registered owner by fraud and never actually acquired a valid interest in the land, so she had no interest to grant to the lenders. Instruments were therefore void at common law and under LTA nemo dat

Ratio: Registered charges are not indefeasible: nemo dat applies. Mortgagees and other chargeholders are

merely "deemed" to be entitled to the benefit of a charge, and the presumption of a valid charge may be rebutted.

Charges obtained by fraud will be struck off the title.

Reasoning: LTA s 23(2)(i) title is defeasible on the basis of fraud; Bucholtz’s mortgage is rendered void; nemo dat

applies to the current registered owner LTA 26(1): A registered owner of a charge is deemed to be entitled to the estate, interest or claim created or

evidenced by the instrument in respect of which the charge is registered…” creates a rebuttable presumption that the registered owner of a charge is entitled to that charge.

LTA s 25.1(1): Charges do not receive indefeasibility if the instrument is void, so is your estate or interest The phrase “void instrument” includes a mortgage issued by a person who obtained title by fraud or forgery. The mortgagees did not acquire any estate or interest in Lot 4 on registration of their instruments because

they were void under s 25.1(1). In this case, Gill was able to rebut the presumption created by s 26(1).

60

Frazer v Walker , 1967 EngPC Note: no facts given. Ratio: “Immediate indefeasibility”: Once C became the registered holder of the fee, C keeps the title, and A should be the innocent victim left to seek monetary compensation from B/assurance fund.

Reasoning: This preserves public confidence in the Torrens system (otherwise would return to common law nemo dat). C derives title from registration, not from B’s defective title.

Gibbs v Messer 1891 AusPC – overruled by Frazer Ratio: “Deferred indefeasibility”: A (legal owner) B (fraudster) C (Innocent purchaser) D (innocent purchaser) A can recover the title from the first innocent purchaser (C), but cannot recover if transfer made from C to D. In that case, A’s only recourse is for monetary compensation from B.

Reasoning: Strictly a common law rule. No basis in statute. If fraud occurs, A (innocent owner of the fee) should recover title, because although both A and C (innocent

victim) were innocent of B’s (fraudster) fraud, C actually dealt with fraudster B, and A had no involvement.

Many courts felt that this was fairer. 1. C is dealing with the fraudster and could have taken measures to ensure that the person they were dealing

with were not fraudsters2. A has a longer-term attachment to the property3. C would have a claim for compensation against B or possible the assurance fund.

BUT, this would mean that everyone would have to go behind the register, which is contrary to the mirror and curtain principles of the Torrens system.

Note: No facts given. Not current law.

Fraud against holder of unregistered interest 2 lines of cases: 1) says equitable fraud can occur based on actual notice of equitable interest alone; 2) requires

dishonest conduct on top of actual notice of unregistered interest second line is correct as per Serving

Test for fraud against holder of unregistered interest (Serving for Success)1. Actual knowledge/willful blindness of unregistered interest

o Constructive notice is not enough (Kearns)o Knowledge must arise prior to entering into agreement for purchase (Saville Row)o Lawyer’s knowledge is ordinarily imputed to client, except fraud by lawyer or honest belief

previous transfer was invalid (Greveling)o Agent’s fraud is imputed to principal (McCaig v Reys)o If you have notice of a registered option but Registrar has refused it, then you may disregard it

(Saville Row)o Willful blindness can equal knowledge (Assets co v Mere Roihi in Greveling)

2. Dishonesty/dishonourable conduct that violates common morality (Serving for Success)o Fraud: doing “any act for the direct purpose of bringing himself within the words of the section

[…] and thereby prejudicing the holder of the unregistered title” (Kearns)o Not fraud: interest extinguished in the “ordinary course of business” (Kearns) e.g. Serving for

Successo Dishonesty/dishonourable conduct that violates common morality (Serving for Success)o Presumption against fraud (Saville Row)

OR: Willful blindness without dishonesty: (Greveling v Greveling) Burden of proof is on person alleging fraud (Greveling)

61

Notice and dishonest assessed at the time the agreement is made (Serving for Success)Effect of notice Fraudster is affected by notice.

o 29(2)(b) abolishes effect of notice of unregistered interests on registered owners (express, implied or constructive), but makes an exception in the case of fraud.

o E.g. McCaig v Reys: actual notice of McCaig’s unregistered interest + promises Reys to honour the interest (deception) + subsequent sale to defeat the interest.

BFPFV is not affected by notice of interest in the absence of dishonesty. o E.g. HBC v Kearns and Rowling:

Rowling may have had his suspicions raised by the discounted price of the property, but did not have actual notice.

s 29(2) Notice, either express, implied or constructed, is abolished; except in the case of fraud in which the purchaser participated in the fraudulent activity: a fraudster is affected by notice of an unregistered interest, but if the property gets past the fraudster, as in McCaig v Reys, then the unregistered interest is not enforceable.

McCaig v Reys Facts Unregistered option sold by the nefarious Jerome

McCaig (holder of an unregistered interest (option to purchase 24 acres granted by Reys; victim of fraud) Reys (RO #1) Jerome/Rutland (RO #2) FRAUD to Jabin

IssuesDecision For JabinReasons Jerome carried out a scheme of deception that enabled him to dispose of the interest without

disclosing to the purchaser. Jerome’s dishonesty was that he promised to honour the unregistered interest, but then

deliberately suppressed the existence of the option when he sold the property to Jabin. If Rutland had gotten notice after agreeing to purchase would not be committing fraud.Result Reys should never have sold to Rutland and is guilty of breach of contract because he created the

situation that caused McCaig to lose his option. Rutland’s title is defeasible because he got it through fraud. However, the title was flipped to

Jabin, and McCaig has no remedy against Jabin (BFP).Ratio Example of true fraud (but no remedy, because in the hands of BFP)

An intending purchaser who learns of an unregistered interest (gets express notice) and acts dishonestly to defeat it is estopped from claiming the benefit of s 29(2).

Any who gets past the agreement of purchase and sale stage w/o knowledge and has a binding agreement is not guilty of fraud.

However, full notice + entering into agreement of P&S to defeat the unregistered interest = actual fraud

o There must be an element of dishonesty (intention to extinguish the unregistered interest)

An agent’s fraud is imputed to the principal

Hudson’s Bay Co v Kearns and Rowling , 1895 BCCA Qualified by Vancity Facts Purchaser takes land w/o seeing title deeds (which are deposited w/mortgagee). BFP?

Kearns (registered fee simple owner) owed Hudson’s Bay $800. She mortgaged her property interest to the company to secure her debt, delivering her title deeds

(duplicate certificate of title). Unregistrable under s 33 The mortgage was not registered for 15 months. In that time Kearns offered to sell the property

to Rowling at half its value. Rowling searched the title, found it clear and entered into a verbal agreement to purchase the

property and paid half the purchase price. Rowling asked to see the title deeds and Kearns said that they would be produced.

62

They were not produced but Rowling still paid the rest of the purchase price and become the registered owner. HBC seeks a remedy.

Issues Issue: what interest wins out: 1) an earlier equitable mortgage by deposit of the title deeds, or 2) a subsequent BFPVw/oN, without fraud or expression notice who becomes registered on the title.

Decision For Rowling (BFP unaffected by equitable mortgage)Ratio 1. Someone purchasing or taking a charge from a registered owner with actual notice of an

existing unregistered interest will acquire the title or charge subject to that unregistered interest = fraud under s.29(2)2. Section 29 of the LTA protects a BFPVw/oN from unregistered interests if notice is constructed or implied. Constructive notice is not enough to undermine s 23 protection. 3. Negligent/Careless – no notice or dishonesty; not fraud

Reasons Fraud will not be imputed in the absence of express notice. Actual notice prior to purchase = fraud, maybe.

o If B, with knowledge A’s unregistered interest, deliberately carries out the purchase, which, without the aid of a statute aimed at the suppression of fraud would be null and void, a Court of Equity will hold B estopped from setting up the provisions of such statute when to permit him to set it up would be to enable him to commit fraud.”

Anything less than express notice is not fraud. The effect of s 23 is to grant absolute protection to a purchaser for value against attack on the

ground of notice of any character or nature whatsoever. o However, it is subject to the qualification that a person with actual knowledge of an

unregistered interest and registers his title to benefit from the indefeasibility of s 23, must be held guilty of actual fraud and estopped from invoking the protection of the enactment. (s.29(2))

This is because equity will not permit a statute to be used as an instrument of fraud.

Vancouver City Savings v Serving for Success , 2011 BCSC Facts Registered interest with actual knowledge of prior unregistered int. vs. unregistered int.

City Centre owned a hotel property, and entered into long term leases (5 years with option of renewal) with Serving for Success and KBBL, which were not registered. Vancity granted City Centre a mortgage, which was registered on title. Vancity was aware of the existence of above unregistered leases. City Centre defaulted on the loan, and Vancity filed for foreclosure with vacant possession (which would extinguish the unregistered leases). Serving for Success wanted to remain as a tenant and argued Vancity had notice of their interests and had committed equitable fraud.

Issues Does the fact that Vancity had actual knowledge of the unregistered leases deprive it of the benefit of s 29?

Decision No (for Vancity)—even if they had actual knowledge of leases, there is nothing to suggest they acted outside the normal course of business or violated any principle of common morality

Ratio Knowledge is not enough to constitute actual fraud. Fraud requires 1) actual/express knowledge prior to entering into the agreement AND 2) dishonesty/dishonourable conduct that violates common morality

Reasons Time to assess knowledge of lender is when they granted the mortgages, or at the latest, the time when the mortgages were registered on title.”

o At that time, they did not intend to interfere with the leases. The law requires more than simple notice of the respondents’ unregistered interest in the

property. To prove fraud, it must be established that: 1) The party acquiring the interest in land had sufficient actual knowledge of the conflicting

interest in the property to cause a reasonable person to make inquires as to the terms and legal implications of the prior instrument.

2) There was some other circumstance to take the matter out of the ordinary course of business or to show some clear intention to use the statute to defeat the respondents’ interests in circumstances contrary to common morality such that it would be inequitable for the court to allow reliance upon the statute as protection.

63

Greveling v Greveling , 1950 BCCA Facts Same property transferred twice. Effect on BFP?

As part of divorce settlement, Mrs. G transfers title to Mr. G. Mr. G did not register his interest. 7 years later, Mrs. G re-sells the same property to Blackburn using the same lawyer that originally handled the transfer to Mr. G.

The lawyer’s knowledge of Mr. G’s title is imputed to Blackburn.Issues What is the effect of the lawyer’s knowledge of the previous transfer? Did he commit fraud?Decision For Blackburn—second element of fraud is lacking (dishonesty)Ratio 1. “actual fraud” includes wilful blindness without dishonesty: “if his (Greveling’s) suspicions

were arouse, and he abstained from making inquiries for fear of learning the truth […] fraud might properly be ascribed to him.” Shepherd: difficult to prove2. Ordinarily, a solicitor’s knowledge is to be considered equivalent to the personal, actual knowledge of their client, except under certain circumstances: if lawyer commits fraud, or if the lawyer does not believe the earlier transfer was effective

Reasons The solicitor’s knowledge should not be imputed to Blackburn if the solicitor was helping Mrs. Greveling to perpetrate a fraud or if he was honest (in believing that the deed from Mrs. Greveling to Mr. Greveling could not be enforced).

There was no element of dishonesty on Blackburn’s part, or the lawyer doing the conveyance. Second element of fraud is lacking.

Re Saville Row Properties , 1969 BCSC Facts Attempt to have option registered denied. Effect if BFP knows this?

Frew had an unregistered option to purchase the property from Eldred, the registered owner. Eldred sold the property to Saville Row, which registered its title on Apr. 28. Frew tried to get the option registered on Apr. 23, but the Registrar refused to register it due to defects in the application. Two months later, Frew sued Eldred and registered a CPL on title.

Issues 1. Can Saville Row take title to the property free of Frew’s unregistered option? 2. Did Eldred commit fraud and was Saville Row a party to Eldred’s fraud? Or a BFPFVWON?

Decision For Saville Row—CPL taken off title and proper title conferred on SavilleRatio If you don’t have notice of interest until after you purchase property, you can disregard it.

If you have notice of a registered option but have reason to think it’s void, then you may disregard it.

The law presumes against fraud: The burden of proving fraud rests with the person alleging it.

Reasons The evidence adduced does not prove bad faith and Saville can claim protection of registration b/c: while Saville knew of the existence of the option, it also knew of the rejection of the Registrar,

and so it could not be affected by notice of the unregistered interest. Further, Saville did not get notice until after the purchase and application to register. Notice was

too late to affect Saville.

64

In Personam Claims (Exception to Indefeasibility) In Personam claims are an exception to indefeasibility conferred by LTA s 23(1); it is an exception to

indefeasibility for unregistered personal rights against the registered owner. LTA, s 20(1): except as against the person making it, an instrument purporting to transfer, charge, deal with or

affect land or an estate or interest in land does not operate to pass an estate or interest, either at law or in equity, in the land, unless the instrument is registered in compliance with this Act

An unregistered instrument has no effect either at law or in equity in rem; but, an unregistered transfer gives a title in equity enforceable against the transferor based in breach of contract (in personam)

o -eg personal licenses: enforceable even if unregistered against those who granted them (Eg Clarke, shack in the back)

o -eg mortgagors: mortgagor retains an equitable right enforceable against the mortgagee (in personam) to redeem the mortgage within 6 months and regain title: equity of redemption (Pacific Savings)

in personam rights can morph into in rem rightso -eg trustees: trustee owes in personam obligation to beneficiaries (McRae v McRae estate)

unregistered trust not enforceable against BFPVWON beneficiaries can register their trustconstructive notice becoming RO, even w/o trust notice, does not extinguish rights/obligations created by trust

Other In personam Claims

Pacific Savings and Mortgage Corp v Can-Corp Developments o Mortgagee forecloses on property. Mortgagor files CPL to have redemption period extended. o After foreclosure, rights in property in favour of the mortgagee, but subject to personal rights (right

of redemption) of mortgagor.

McRae v McRae Estate , 1994 BCCA, leave to appeal to SCC refused 1994 Facts Trust notation removed from title on transfer. Do beneficiaries have rights?

In 1924, Mr. Fraser died and left property to his wife Harriet, on trust for herself for life, remainder to their children, John, Catherine and Farquhar. Harriet was registered as fee simple owner, with an “on trust” notation on the title. In 1949, Harriet transferred the property to Farquhar for nominal consideration, and Farquhar was registered as fee simple owner without any trust notation. He died in 1989, leaving his property to his wife and his siblings. In 1990, John and Catherine found out about the terms of their father’s will and commenced proceedings.

Issues Do John and Catherine have in personam rights against Farquhar?Decision Yes—executors held lots on terms of Mr. Fraser’s willRatio A beneficiary has in personam rights against a trustee, even if the trust is unregistered.

Even if a trust is not registered on the title, the RO is bound by the trust UNLESS they are a BFPV w/o N

Reasons Farquhar is not a BFPFVw/oN because “in trust” was on the title. He had constructive notice, and probably had actual knowledge too. Harriet and Farquhar committed a breach of trust, and the transfer from Harriet to Farquhar should not have occurred.

o He was not bonafide, was not a purchaser, and had constructive/actual noticeo Therefore, he was a trustee and is personally bound by the terms of the trust

Breaches: 1) Harriet: selling property without carrying forward trust notation; 2) Farquhar: disposing of property to wife/children under his will

Note Note: if Farquhar had sold the property to a BFPVw/oN that would have extinguished the rights of the beneficiaries.

Heffner and Heffner v. Price Waterhouse 1986 BCCAFacts: Heffner’s registered some land that they bought in their and their son’s name as joint tenants in fee simple.Son made no contribution to purchase price and later made an assignment in bankruptcy. A claim by the trustee that son’s assets included an interest in the land was disputed by the Heffners.

Trial History: TJ held that so far as title was registered in the son’s name there was at law a presumption of gift in his favour of the son

65

Applications to Register Process of Application to Register: 1) Transaction; (2) Registration process: (a) application to register (LTA, ss 28,37); (b) scrutiny by the LTO; (c) refusal or acceptance; (3) registration (date relating back to the date of app.).

After application has been submitted, but prior to registration on title Incomplete registration of interest creates equitable interest only. The ranking of these interests is according to the equitable rules: equity operates from the date of creation and

not the date of registration or application. o Priority over intervening interests is codified in LTA, s 29(2)(c): application at the prior date will take

priority over any intervening interests.

Rules of Equity that Apply—to resolve competing equitable claims, consider: unresolved by LTA 1. Are the equities equal?: Is one party culpable in the creation of the situation? Look to the moral positions

of the parties involved (Breskvar v Wall).2. If the equities are equal, is one an equitable interest and the other a legal interest?: “Where equities

are equal, the law prevails”: the law—the holder of the legal title/registered interest will prevail over the equitable interest holder. Equity aids the vigilant, not those who slumber on their rights

3. If the equities are equal, who was first?: If the equities are equal, first in time prevails. Based on date of execution (Rudland v Romilly). “Where the equities are equal, first in time prevails.”

a. 1. Who was first? 2. What are the equities? 3. IS one a legal interest? (Breskvar v Wall)

Effect of CPL if prior application is pending (LTA 217) Applications received prior to CPL may be registered (1) If prior applicant is party to CPL litigation, title will be subject to outcome of CPL (2(a)) If prior applicant is not party to CPL litigation, CPL will be cancelled (2(b)) About protecting the purchaser who has relied on the register

When do you become a BFPV? -to be a BFPVWON you actually have to be registered -once agreement of purchase and sale is signed, anything derogatory of the title after does not take effect

(Saville Row)

Rudland v Romilly 1958 BCSC Received legislative approval: LTA s 217 Facts CPL lodged after title registration application submitted.

Nov 21: Romilly (RO#1) executed a deed conveying fee simple to Lindsay (RO#2) for considerationDec 14: Lindsay (alleged fraudster) applied to register that deedDec 16: Lindsay executed a deed to Rudland as collateral for a loan due December 23rdDec 29: Lindsay obtained a certificate of title free of chargesDec 29: Rudland applied to register the deed from Lindsay Jan 16: Romilly claiming that Lindsay’s registration was fraudulent, lodged a CPL on the title. If Lindsay had committed fraud, her title would have been defeasible.

Because of the CPL, Registrar refused to complete the registration of Rudland’s title. Rudland sues to expunge CPL.

Issues Where a CPL is lodged after an application to register title by a BFPFVWON is filed, but before the BFP’s title is registered, whose claim takes effect?

Decision For Rudland—Rudland was BFPV w/ legal title and no fraud proven on Lindsay eq. int. defeatedReasons If there is something that is not registered, the highest you can say is that they have equitable

claims to the property Romilly only had an equitable claim to the property and did not adduce evidence about Lindsay’s fraud

Ratio If a prior application to register title is pending, CPL does not take effect. Now legislated: s 217.Equitable rules apply: first in time, first in right; where the equities are equal, the law prevails.

Note Nature of fraud is not specified here

66

Breskvar v Wall 1972 Aust HC Facts Blank xfer form as security; fraud; BFP; ranking of unregistered BPFV vs caveat=BPFV wins

Breskvars (RO#1, victim#1) were joint tenants and registered owners in fee simple. Petrie (alleged co-fraudster) gave Breskvars a loan. As security, Breskvars gave an instrument of

transfer with the transferee left blank. Breskvars were to pay back the loan in a year, at which time Petrie would return the document. transfer form intended to operate as security only

Petrie registered the title in the name of his grandson, Wall (RO#2, alleged co-fraudster).o Initial transfer was void and inoperative due to fraud (forgery) and nemo dat

Petrie then negotiated the sale of the land from Wall to Alban (BPFVWON, victim#2) Nov 7: transfer executed Dec 13: Breskvars lodged a caveat, registration complete on March 6th of following year Jan 8: Alban filed application to register

Issues What is the interest of the Breskvars vs Alban?Decision For Alban—equities were not equalReasons Both Breskvars and Alban have equitable (unregistered) interests in the property:

o Breskvar’s interest—created when the equitable mortgage was formed Did not have legal title as Wall had legal title, but had equitable interest to re-

obtain legal title once loan repaido Alban’s interest—created when he purchased the property=equitable claim to register

Alban could not registrar because of the Breskvars’ caveat The equities are not equal: the conduct of the Breskvars was more blameworthy by virtue of

being insufficiently vigilantmade it appear to 3rd parties that transfer to Wall was legitimateo Giving Petrie blank transfer essentially created situation where fraud could occur o Delaying registration of the caveat

Equity aids the vigilant, not those who sleep on their rights Where the equities are equal, the law prevails

Ratio Where there are two unregistered interests/equitable claims, consider equities/first in time Who was first? What are the equities? Where the equities are equal, first in time prevails (only applies if

equities are equal)o “Equity aids the vigilant”: Where a party ha a superior equitable right, it will take

priority ahead of another lesser right that was created first. Is one an equitable interest and one a legal interest? Where the equities are equal, the law

prevailsNote Bresqvars could have recovered property as against Wall and Petrie b/c of forgery fraud, but

Alban was BPFV so obtained better title than Wall and Petrie could give Bresqvar filed in personam claim against Wall and Petrie and obtained money damages in a

separate action “Torrens is not a ‘registration of title’, but a system of ‘title by registration’” confirmed by

s.25.1(2-3)

67

FEE SIMPLE Creation of Fee Simple Disposition at Common law: to pass Fee Simple, needed to say “to B and his heirs.” Otherwise, presumed to

transfer life estate ie. “to B in fee simple” and “to B in fee” or “to be” = INVALIDo Words of purchase: “To B” o Words of limitation: “and his/her heirs”o Had the advantage of certainty but disadvantage of creating life estates where fee simples were

intended PLA s 19: This format is no longer required: “to B” passes greatest estate that transferor can give

o “to B in Fee simple” also valid Alienation: Agreement of purchase and sale. Section s 186 of the LTA provides that the transfer of a freehold

for consideration operates to transfer the freehold estate whether or not it contains express words to do so; o 186(5): where there are no words of limitation, then the whole fee simple is transferred; o 186(6): where there are words of limitation, transfer occurs in accord with the limitation.o 186(8): s 186(4-7) do not operate to transfer a greater estate than the transferor’s estate (nemo dat)

Types of Fee Simple The LTA, ss 184(4)-186(8), creates 3 types of freehold estates:

o Fee Simple (absolute)o Determinable Fee Simple: if condition precedent is satisfied, property automatically reverts

While,” “during,” “as long as,” “until” Fee simple ends automatically when satisfied: e.g., “to A in fee simple until X.” The right of alienation remains intact, but if the condition precedent occurs, the property

automatically reverts.o Fee Simple on Condition: if condition comes to pass, reversionary interest holder has the right of

reentry, but it is not automatic. “Provided that,” “on condition that,” “but if,” “if it happens that”

Conditional and determinable fee simple cannot be tied to one of the incidents of the fee simple (e.g., sale of property), nor something that will definitely happen (e.g. death).

The events that determine conditional fee simples or determinable fee simples have to revolve around the person, not around the dealings with the land (lest they be repugnant).

Fee Simple is a bundle of common law rights (Sheppard Slide) Real estate ownership is, in actuiality, the ownership to rights to land. Largest bundle available = fee simple

Occupy and use Build Grant easements Mortgage Mine, drill, farm Restrict use Covenants Exclude others

Sell Refuse to sell Give away Abandon Rent or lease License Devise by will

WESA s 41 – Property that can be gifted by will (3) a gift in will

o (a) takes effect according to its terms, and o (b) subject to the terms of the gift, gives to the recipient of the gift every legal or equitable interest in

the property that the will-maker had the legal capacity to give

68

Repugnancy in disposition Issues involving contradictory, incompatible or inconsistent provisions in transfer: e.g., “To A in fee simple,

remainder to B.” Or, e.g., a testator expresses a gift in absolute terms and adds words that apparently leave a remainder to someone else.

Where there is a repugnant gift, the court will determine the testator’s predominant intention and subordinate intention. (Re Walker) – look at circumstances of the will known to the testator when making the will (testators “arm chair”)

o To determine what is given under a will, the critical time is at the time of deatho To determine the identify of the recipients, the critical time is at the dime of making the will

Different possible outcomes of a repugnant gift (Re Walker):1. Gift to the first-named person prevails, gift over fails as repugnant2. Gift to the first-named person is a life estate, the gift over of the remainder prevails3. Gift to the first named person is a life estate, with a power of sale/encroachment on the principal, to

maintain the recipient, with a gift over of the remainder (usually a trust) Where a will is unclear or contradictory, construction is based on the testator’s intentions (Re Shamas)

o Intention is determined by “sit[ting] in the testator’s armchair,” i.e. “gathered from the language of the will read in light of the circumstances in which the will was made.”

o Note that this means that if you create a will giving your property to your spouse (S1), then split with S1 and have a different spouse at death (S2), the property will go to S1

Can’t control an incident of fee simple ownership (Cielein v Tressider) “I give and devise unto _____ all my real and personal property” (fee simple absolute)

Critical Attributes of Fee Simple Absolute—can’t control these rights in a will Alienable: able to be sold/gifted Reducible: able to be reduced to a lesser interest Devisable: able to be given by will or intestate Lasts for perpetuity: forever—no limitation of time

Tottrup v Ottewell, 1969 SCC Note: Result legislated by WESA, s 46(1)(b)Facts Will beneficiary dies before testator; who gets estate?

Frank left the residue of his estate to his twin Fred: “To Fred, to hold unto him, his heirs, executors and administrators, absolutely and forever”.

o They had reciprocal wills—both left everything to each other Fred (1965) died before Frank (1967). Frank’s testators proceeded with dividing up the estate

as if he died intestate. Fred’s only daughter (his heir apparent) sued Frank’s estate. Argument hinges on wording:

o “Fred and his heirs” would pass fee simple and gift would fail Why? Because intention is to create a personal gift to Fred, not to his heirs

o “Fred or his heirs” would make Fred’s heirs alternative beneficiariesIssues Where a will beneficiary dies before the testator, who gets the estate? Decision The gift lapsed and passed back into the residue of the estate.Reasons Daughter argues that the comma should be read as “or,” not “and” (words of substitution, not

limitation) Court finds that it should be read as “and,” not “or.” As a result, the gift lapses, falls into the residue of Frank’s estate, and passes according to rules

of partial intestacy.Ratio 1. “To X, his heirs” creates fee simple

2. If a fee simple lapses because of death of donee, it will pass into residue of estate – residue=assets not specifically named disposed of according to rules of intestacy

Note Result legislated by WESA s 46 and would be decided differently today

69

Re Walker , 1925 ONCA Facts Will gives fee simple absolute and gift over

John Walker dies in 1903. His will creates a fee simple absolute: “I give and devise unto my said wife all my real and personal property…”

But also a gift over to nephews: “…and also should any portion of my estate still remain in the hands of my said wife at the time of her decease undisposed of by her such remainder shall be divided as follows…” removing alienability from fee-simple

Competing claims: 1) those claiming under husband’s will; 2) those claiming wife took the property absolutely

Issues How should the repugnant gift be dealt with?Decision For the wife; attempted gift over is voidReasons Problem: If you create a fee simple absolute, you can’t then control an aspect of the owner’s

rights. In this case, the gift over purports to take away right of testamentary disposition. Where there is a repugnant gift, the court will determine the testator’s predominant intention and

subordinate intention. o Repugnant=restrict alienation on a fee simple

To do so, look at the circumstances at the making of the will. Here, asks: who was closer to testator? Who was he intending to favour?

Different possible outcomes of a repugnant gift:1. Gift to the first-named person prevails, gift over fails as repugnant2. Gift to the first-named person is a life estate, the gift over of the remainder prevails3. Gift to the first named person is a life estate, with a power of sale/encroachment on the

principal, to maintain the recipient, with a gift over of the remainder (usually a trust) In this case, the testator’s predominant intention was to give a fee simple to his wife

Ratio Where there is a repugnant gift, the court will determine the testator’s predominant intention and subordinate intention.

Notes Can’t give a fee simple and retain rights which would normally be available under fee simple

Re Shamas , 1967 BCCA Facts Will gives everything to wife until kids turn 21: LT w/right of encroachment

Will: “I give all I own to my wife. I want her to pay my debts-raise the family. All will belong to my wife until the last one comes to the age of 21. If my wife remarries she should have her share like the other children if not, she will keep the whole thing and see that every child gets his share when she dies.

Wife believes this gives full estate to her Children believes it gives everything to them after age 21

Issues What interest in the estate should be taken by the widow and the children?Decision Will gives wife a life estate (with power of encroachment until and after children turn 21, until her

remarriage or death). Children get a remainder interest.Reasons In this case, the testator’s intention was for his widow to use the estate to provide for their

children. Because the estate was worth very little, this would require that she be able to encroach on the principle (she could not get by on investment income alone).

Circumstances leading to this determination: testator had a wife and 8 children; at time of will, if estate was invested, widow could not properly live and raise her family; only way a provision for his wife and children could be sustained was if wife carried on business which he and she had jointly carried on, and if necessary, to encroach on capital for maintenance of herself and children

o Wording of the will was open to the interpretation that widow was entitled to encroach, if necessary, on capital after youngest child reached age 21

Ratio Where a will is unclear or contradictory, construction is based on the testator’s intentions. Intention is determined by “sit[ting] in the testator’s armchair,” i.e. “gathered from the

language of the will read in light of the circumstances in which the will was made.”o Testator may use unexpected words – a dictionary of his own

70

Cielein v Tressider 1987 BCCA Facts Will gives fee simple, dictates what distribution of profits in event of sale

The will-maker lived with Ms. Rich and her son for 12 years. Made will to effect that Rich was to receive his property/assets but also included a problematic clause.

Problematic clause: “All the rest and residue of my estate I devise and bequeath to Naturcia Rich. However, upon the sale or disposal of the real estate described above [on Saturna], the proceeds shall be divided equally between her son and my children.”

On construction, chambers judge found: Rich took a life estate, and on death, property was to be sold and proceeds distributed equally b/t 5 children and son of Mrs. Rich

Issues What was the intention of the testator?Decision Mrs. Rich—testaor demonstrated clear intention to benefit Rich; will cannot be construed to divest

Rich of her interestReasons The testator’s intention is manifest: he intended to give property in fee simple to Mrs. Rich.

Made clear by a clause giving her the property and another giving her the residue.s The testator’s attempt to dictate the division of proceeds upon sale is a repugnant to the fee

simple. Ratio Testator can’t impose conditions to control an incident of fee simple ownership

Ie. Where property is given absolutely (in fee simple), a condition cannot be annexed to the gift inconsistent with its absolute character; and where a devise (a leaving of realty by will) in fee simple is made upon condition that the estate shall be shown of some of the necessary incidents, such conditions are void because they are repugnant to the character of the estate.

71

Life Estate Life estate appears as a charge on the property (LTA s 1, “charge”)

o Finite (ends on death) but indeterminate duration (ie. freehold)o Cannot sell and not inheritableo Two interests: 1) present estate/interest (life interest); 2) future interest (fee simple)

Right to possess and use for the lifetime of the original guarantee Right to transfer only the rights for the lifetime of the original grantee, it is alienable

o Nemo dato Transfer would create an estate pur autre vie “To B for A’s lifetime”

Fee simple either reverts back to the life estate grantor or the remaindermano Life tenant is merely temporary owner while the remainder is the permanent owner

Creation of life estate: By Act of the Parties Must be made explicitly: “O to A for life” (fee simple reverts to O without specific words)

o without these words, will pass greatest estate held by transferor [PLA, s 19(2) and WESA s 41(3)(b)] Estate pur autre vie: “To A for the life of B” (B is measuring life—B gets nothing) O to A for life then to B = life estate with remainderman (future interest)

By StatuteLand (Spouse Protection) Act: Married or unmarried spouses can make a filing on the title of the spousal home (“homestead”) that is in the

name of the other spouse (incl common law spouses) to prevent the RO from selling it w/o noticeo After, any disposition of property w/o consent (in writing) of the spouse who filed entry is void (s 1)o Filing entitles the filing spouse to life estate in the property on the death of the other spouse (s 4(2)).

This applies despite any testamentary disposition to the contrary (s 4(2)) Spouse Amendment act: includes common law, or at least two years of cohabitation, includes same-sex However, life estate is subject to the rights of foreclosure and judgment creditors (s 4(1)) Same rights are fulfilled in s4 of the WESA, save for mortgage foreclosures and judgment creditorsWESA s 26-35: surviving spouse gets the option to purchase the house from estate of dead spouse

Rights of a life tenant: 1. Possession, occupation, use, and profit

o Exclusive physical possession, live rent-free, rental income, source of income for life Capital receipt (ie. appreciation of property, tree) remainderman or reversionary interest Revenue (ex. dividends, fruit) receipt life estate

o Donor/will-maker should expressly provide for liability 2. Alienable inter vivos: life tenant can transfer, but ONLY to the extent of their interest nemo dat (i.e. for the

remainder of their life) o Cannot dispose (of fee simple) or mortgage the property without consent of the remainderman

3. Devolution on death: ordinary life tenancy (to A for life) ends with the death of the life tenanto an estate pur autre vie (to A for the life of B) ends with the death of the other person, Bo if A dies before B and A is intestate, the estate for the life of B devolves on intestacy like other real

property until B dies. if A, however, has a will, the estate can pass according to A’s will

4. At end of measuring life, will revert to fee simple holder (reversionary interest holder or remainderman)

Remainderman Rights Present right of future possession; right to receive the property in substantially the same condition as when

received by LT

72

Responsibilities of a life tenant: As a general principle, the LT is under a fiduciary duty to maintain the property as they receive it for the

remainderman (Mayo v Leitovski). Limits placed on the creation of waste.

LT Responsible for Minor upkeep and repair Not permissive waste Operating expenses Property taxes (Mayo v Leitovski) Mortgage interest payments Property insurance premiums (neither), but

whoever does gets proceeds Fiduciary duty to keep property going

Remainderman Capital – eg renovations

o Ie Large purchases/repairs Mortgage principal repayments Present right to future possession RIGHT TO RECEIVE PROPERTY IN

SUBSTANTIALLY SAME CONDITION AS RECEIVED BY LT

Fiduciary duty to look out for LT’s interests Big ticket items should be footed by the remainderman; daily expenses by the life tenant If the repair is for the benefit of the remainderman, likely liable for payment1. Responsibility of LT: Refrain from Waste See next section2. Responsibility of LT: Liability for Taxes, Insurance, etc. LT is responsible for the payment of:

o 1. property taxes. If they are not paid, the property may be taken and sold by the taxing authority (Mayo v Leitovski) this can defeat remainder’s interest if valid

o 2. Mortgages A portion is interest and a portion is principal. Remainderman is responsible for principal LT is responsible for interest payments.

o 3. Remainderman is responsible for liability and fire insurance (Re Verdonk)

Mayo v Leitovski Facts LT doesn’t pay taxes, sold at tax sale, extinguishes remainderman’s interest

LT didn’t pay property taxes, so property was seized and sold at a tax sale. LT’s daughter purchased the property and gave it to the LT. LT applied to register the fee simple. Remainderman filed suit: interest had been defeated by non-payment of taxes.

Issues Can an LT extinguish a remainderman’s interest by purchasing after tax sale?Decision No; LT and remainder restored to original positionReasons LT has a duty to protect remainderman’s interest

Equity looks on that as done which ought to have been done and imputes an intention to fulfill an obligation Court assumes that the transaction in which the LT got the property was a fulfillment of

obligation to pay taxes/to restore the remainderman to original position. Note that if the property had been sold in tax sale to someone other than the LT, the

remainderman’s right would have been extinguished.

Ratio LT cannot defeat remainderman’s interest through default on taxes Remainderman’s interest can however be defeated through a valid tax sale Equity looks upon that as done what ought to have been done Equity imputes an intention to fulfill an obligation

Life Estate Cases Ross v Ross: intervivos gift with intention of life estate in donor – purse case Cielein v Tressider: life estate to second spouse, remainder to children of first relationship Re Shamas; Re Walker: LT power to encroach (on capital) – can be a feature of life tenancy (dip into corpus) Re Fraser – life estate and remainder in residue, Life estate in personalty

73

Waste Waste is an action of the life tenant which reduces the value of the future interest in the property Applies to life tenants (Vane) and any other holder with future vested interest (New West) Balance rights and responsibilities of the two parties – Can be brought against life tenant or lessee of a leasehold estate; tenants in common or joint tenants;

mortgagors and mortgagees

1. Permissive Waste ie. normal wear and tear Passive inaction by tenant LT not responsible to reversion or remainderman unless expressly made

responsible by creating instrument: Homfray v Homfray

2. Voluntary waste: A life tenant is liable for voluntary waste: Waste that results from the positive activities of the LT

o any act of the life tenant which causes permanent damage to the land, (ex. cutting timber; exploiting mines; demolishing or altering buildings; changing the use to which the land is put (zoning)) OR

o any act of the LT which changes the nature of the land, whether for better or worse (limited by doctrine of ameliorating waste)

Ameliorating waste (making property more valuable): life tenant not liable for damages and will not have injunction agains them

Remedies for voluntary waste for remainderman: injunction or damages

3. Equitable waste: Reversionary interest holder may expressly permit LT to commit voluntary waste by specifying that the LT is

“unimpeachable for waste” in the instrument creating the life estate.o An estate for life without impeachment of waste does not confer […] on the tenant for life a legal right

to commit equitable waste, unless an intention to confer that right expressly appears by the instrument creating the estate (Law and Equity Act, s 11)

However, equity may still restrain the LT from making unconscionable use of the apparent legal right to commit waste

o E.g.: Vane v Lord Barnard: Lord had LT in Raby Castle—Stripped the castle of its valuable chattels, but was

unimpeachable for waste, so no common law remedy. Court of Equity prohibited equitable waste and forced him to repair the property. (mand. inj.)

Waste applies to tenants under a lease (New Westminster (City) v Kennedy ) ; tenants in common and joint tenants; mortgagors and mortgagees.

Vane v Lord Barnard , 1716 Facts LT is unimpeachable for waste. Strips castle’s valuables.

D, on marriage of his son (P), settled a castle on himself for life, remainder to his son for life. After taking some displeasure against his son, D stripped the castle of the lead, iron, glass-doors and board to the value of 3,000l.

Vane: son/life estate in remainder Lord Barnard: father/life tenant LT unimpeachable for waste; no common law remedy

Issues Can an LT unimpeachable for waste strip the building for valuables?Decision For the P. Reasons The Court granted an injunction to stay committing the waste, and then held that the injunction

should continue and the castle should be repaired and put into the same condition it was in.Ratio Even if a life tenant is unimpeachable for waste, they can be liable for equitable waste. Now in s

11 of the Law and Equity Act: “An estate for life without impeachment of waste does not confer and is deemed not to have conferred on the tenant for life a legal right to commit equitable waste, unless an intention to confer that right expressly appears by the instrument creating the estate.”

74

New Westminster v Kennedy Facts House sold at a tax sale stripped the house during the period in which the owner could redeem the

property by paying the outstanding taxes.Decision Equitable waste; repair orderedRatio The principles of equitable waste also apply to a landlord and tenant and property in

foreclosure.One in possession will be restrained from using his legal power unfairly (unconscientiously) so as to destroy or depreciate the subject matter. This can be applied to tenants, mortgagor and mortgagee, partners, against a purchaser who “is in equity by the effect of the contract the owner of this estate,” having taken possession under contract, at the suit of the vendor who is in the “situation of an equitable mortgagee.”

75

Co-Ownership up to page 11-8 Transfer of property to multiple people presumptively creates TIC: (PLA s 11)

Exception: housing co-ops/leases (Robb v Robb) common law presumption of JT applies Common law presumed joint tenancy; equity liked TC

Four Unities Time: must take title at same time Title: must take under same instrument Interest: must hold the same kind of estate Possession: equal right to possess and use property

Tenants in Common Creation:

Presumptively created where property is transferred to multiple people. Unless otherwise indicated on the title, tenants in common will hold equal shares Language indicating creation of tenancy in common:

o “To A B and C in equal shares” there are no shares in joint tenancyo “To A, B, and C equally” implies shareso Equally; in equal moieties; share and share alike; respectively; as they shall severally die; to each

of their respective heirs; between; amongst; each; all to have part and alike every one of them to have as much as the other

Features: Tenants hold separate shares. Shares can be of unequal value.

o Must be explicit about unequal shares – otherwise presumed to be equal shares PLA: s.11.3o If property produces income, it is shared in accordance with proportion of shares.

Cotenant can sell or deed or will their share without permission of other cotenants Share in property passes to cotenant’s heirs upon death Unity of possession: Each cotenant entitled to possession/access of entire premises

o One TIC cannot exclude another from property (Ouster) they can bring an action in trespass seeking repossession of the property, claiming they have been ejected

An excluded TIC can claim compensation for the period of the exclusion.o If only one TIC lives on property, other TIC is entitled to rent.

Unity of title: TCs can take under different instrumentso Can hold separate certificates of title

Unity of interest: TCs can hold different estates or interests Unity of time: TCs can arise at different times

Termination: 1 TIC buys out the other(s) Sell the property and divide the proceeds in proportion to their ownership (sale in place of partition) Physically subdivide the property – partition (statute) If they cannot agree on how to end TIC, the court can order partition or sale in place of partition. Partition =

physical division of the property.

76

Joint tenant Creation Must be expressly on the title/transfer document:

o To A and B jointlyo To A and B as joint tenantso Does not arise by implication where co-owners have four unities.

If not explicit, presumed to be a tenancy in common

Features Each tenant owns the entire estate (not divided into shares, unlike TIC). Four unities must be present Right of survivorship without probate (jus accrescendi: acquisition by accretion, not inheritance).

o Property cannot pass by will (with the exception of the last remaining joint tenant). Attempts to dispose of estate by will are repugnant and will be void.

Creditors cannot get at survivor’s interest JT can be severed by one of the parties – without even having to tell the other party or register A JT alone is not an owner of the property so cannot create…(ex. airspace parcel) Unity of possession: JT are entitled to identical rights to possession of the entire property

o JTs cannot exclude each other from any part Unity of title

o JTs must hold their title under the same instrument – same transfer or willo Eg. A to B, C, D as JTs in fee simple; C transfer to E B/D JT for 2/3, in TC with 1/3 E

Severance terminates C’s JT (unities of time and title), creates TC Unity of interest: Equal ownership in nature, extent, duration, share Unity of time

o JT’s interest must vest at the same momento Eg 2 children have a remainder interest in land when they reached 21 years, there could be no unity of

time (unless they were twins) EXCEPTION TO UNITY OF TIME: if interest arises by gift by will, and if other unities exist, a joint tenancy

will be created

Termination Can be severed (i.e. terminated and turned into TiC) without notice to other tenant: PLA s 18 May assign personal property to yourself: Law and Equity Act, s 30 Occurs upon:

o Act of alienation (e.g. mortgaging or transferring interest)o Divorceo Partition (physical division of property) or sale in place of partition, if partition isn’t feasible

77

Aboriginal Title Basic Principles Three categories: Indian Reserves, Treaty Settlement Lands, AT lands Indian Reserves – Indian Act

o Title to these lands in federal gov’t; leaseholdo Canada holds title (fiduciary) for the use and benefit of the band

Treaty Settlement Landso Tsawwassen First Nation (2009)o Results of treaty: money payments, land, management rightso Band can put land into Torrens system if the ywisho Treaty FN own their lands in fee simple

Source of Aboriginal Rights & Title Royal Proclamation, 1763 rejected as the source of Aboriginal title in Canada Source:

o (1) Physical occupation—derived from the Canadian legal principle that occupation is proof of possession in law.

o (2) The relationship between common law and pre-existing systems of Aboriginal law: this is used for showing that title exists but it does not affect the actual content of what

Aboriginal title “means”; title is itself defined by common law and not reflective of or affected by Indigenous systems.

Constitution Act 1982, S 35(1): “The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed.” Does not create aboriginal title or aboriginal rights, but confers constitutional status on “existing” rights as of

1982o This is evident through case law and treatieso Does not create or define these rights, but give them constitutional protection

Existing rights must be proven in court or by agreement in a treaty

Honour of the Crown (Mitchell) Obligation to treat AP “fairly and honourably, and to protect them from exploitation.” The Crown has a fiduciary duty to aboriginal peoples

Reconciliation

Aboriginal Rights v Aboriginal Title Aboriginal rights which are recognized and affirmed by s 35 fall along a spectrum with respect to their degree

of connection with the land: o (1) practices, customs and traditions are integral to the distinctive aboriginal culture—non-land

aboriginal rights; o (2) non-site specific aboriginal right; o (3) activities which take place on land and might be intimately related to a particular piece of land

(“might” = site-specific right); o (4) AT itself confers the right to land itself—proprietary interest.

78

Aboriginal Rights Aboriginal Rights (Delgamuuwk) Rights to follow practices, customs, and traditions and to conduct activities on specific sites (e.g. hunting,

fishing) – integral to the distinctive aboriginal culture of the claimants (at para 138, p 3-20) Easter to establish than title (at para 139, p 3-20)

Establishing an aboriginal right (Mitchell)1. What is the Aboriginal Right Claimed? Three factors that should guide the court’s characterization of a claimed

aboriginal right:a. The nature of the action which the applicant is claiming was done pursuant to an aboriginal rightb. The nature of the governmental legislation or action alleged to infringe the right (i.e. the conflict

between the claim and the limitation)c. The ancestral traditions and practices relied upon to establish the right

2. Has the Claimed Aboriginal Right Been Established? The claimant is required to prove:1. The existence of the ancestral practice, custom or tradition advances as supporting the claimed right2. That this practice, custom or tradition was “integral” to his/her pre-contact society in the sense it marked it

as distinctive3. Reasonable continuity between the pre-contact practice and the contemporary claim

Establishing the content of AR (Marshall) Both aboriginal and European common law perspectives must be considered.

o The court must:(1) Examine the pre-sovereignty aboriginal practice and (2) Translate that practice into a modern right.

How to do this?1. Examining the nature and extent of the pre-sovereignty aboriginal practice in question. 2. Seek a corresponding common law right . 3. Determine the nature and extent of the modern right.4. Goal: reconcile the aboriginal and European perspectives. The range of aboriginal rights

o Taking the aboriginal perspective into account does not mean that the particular right claimed, like title to the land, will automatically be established.

o The question is what modern right best corresponds to the pre-sovereignty aboriginal practice, examined from the aboriginal perspective.

Aboriginal Title Fee Simple v Aboriginal Title

Fee Simple Aboriginal TitleDerived from the Crown Precedes Crown ownership Delgamuuwk,

Para 114Marketable-alienable Inalienable, except to Federal crown Delgamuuwk,

Para 113, 129Ownership and possession individual Ownership and possession communal or

collective – incl future membersDelgamuuwk, Para 115

Freedom of use Restricted use – cannot use the land in a way that would disadvantage later users

Delgamuuwk, Paras 125-128

Registered on title Not on title – can’t file a caveat or CPL if you are asserting a claim over property

Skeetchestn

Site specific or cadastral Territorial (used collectively and regularly) Tsilhqot’in 50/56

Similar to beneficiary of trust Beneficial interest – use, enjoy and profit T 70Ownership and management: decide how land used, right of enjoyment and occupancy, right to possess, right to economic benefits, right to proactively use and manage the land – SUBJECT to inherent limits of group title held for future generations

T 73/94

79

Features of Aboriginal Title ( Delgamuuwk ) AT is a right in land

o encompasses the right to exclusive use and occupation of the land held pursuant to that title for a variety of purposes, which need not be aspects of those aboriginal practices, customs or tradition which are integral to distinctive aboriginal cultures as in establishing AR

Sui generis form of ownership o not fee simple, but similar to ito it is inalienable to third parties

Arises from prior occupation before assertion of British sovereignty. Predates crown grant. Held communally – including for future generations Inalienable : cannot be transferred, sold, or surrendered to anyone other than the Crown.

o Because Aboriginal title has a non-economic component: the land has inherent and unique value in itself.

o Also because fee simple can only derive from a Crown grant. Inherent limitation : cannot be used in a way that deprives future generations of the control and benefit

of the land.o E.g., if it’s established with reference to hunting, the group that establishes that claim cannot

use it in a way that makes such a use impossible (e.g. strip mining). o E.g., if group claims a special bond w/land for ceremonial purposes, certain types of

developments may be forbidden (e.g. a paved parking lot). Inconsistent with and cannot be registered under the Torrens system (Skeetchestn)

o Form of title not contemplated by Torrenso Torrens is derived from the notion that the Crown is the absolute owner of the land and

individuals purchase interests derive from the Crown Not site-specific, but territorial : title can exist not only over villages/settlements, but territories that are

traversed/used regularly (Tsilhqo’tin) Beneficial interest – use, enjoy, profit from its economic development (T)

Test for AT ( Delgamuuwk ): 1. Occupation prior to 1846 (sovereignty)

a. Occupation must be sufficient. i. The key to sufficiency: establish that the Aboriginal use of the land “evinces an intention

on the part of the Aboriginal group to hold or possess the land in a manner comparable to what would be required to establish title at common law.” (Tsilhqo’tin)

b. The notion of occupation must reflect the way of life of the Aboriginal people, including those who were nomadic or semi-nomadic.

c. May be established in a variety of ways, ranging from the construction of dwellings through cultivation and enclosure of fields to regular use of definite tracts of land for hunting, fishing or otherwise exploiting its resources (Marshall)

d. Must be sufficiently regular and exclusive occupation to comport with title at common law (Marshall)

e. Seasonal occupation = AR (Marshall) Tsilhqo’tin overturns this.i. Seasonal hunting and fishing exercised in a particular area will be AR, not AT

ii. They will transfer into the common law right of easement or profit a prendre, for examplef. Not site-specific, but territorial : title can exist not only over villages/settlements, but territories

that are traversed/used regularly (Tsilhqo’tin)g. regular and exclusive occupation, not intensive and site-specific occupation (Tsilhqotin)

2. Continuity a. If present occupation is relied on as proof of occupation pre-sovereignty, there must be continuity

between present and pre-sovereignty occupation (Tsilhqo’tin)

80

b. “Continuity simply means that for evidence of present occupation to establish an inference of pre-sovereignty occupation, the present occupation must be rooted in pre-sovereignty times.” (Tsilhqo’tin)

c. Can be interrupted if there is “substantial maintenance of the connection” (Delgamuuwk)

3. Exclusivity : ability to exclude others at sovereignty a. Exclusivity is the “intention and capacity to retain exclusive control.”b. The fact that other groups were on the land does not necessarily negate exclusive occupation.c. Intention and capacity may be demonstrated by:

i. Exclusion of others from land;ii. Granting or refusal to grant of permission for others to access land;

iii. Treaties;iv. Lack of evidence of challenges to occupancy

Duty to consult ( Tsilhqo’tin ) Before AT is established (claim stage): Crown has a duty to consult and accommodate in good faith about proposed land use If appropriate, must accommodate the interests of such groups. Level of consultation and accommodation varies with the strength of Aboriginal claim and the seriousness of

the effect upon the interest claimed. Remedies for failure to consult

o Includes damages o Order that consultation be carried outo Injunctive relief

After AT is established: Crown must seek consent Establishment of AT is retroactive – invalidates prior consultation, accommodation, and legislation.

If consent is not given, Crown must justify infringement. Almost AT – 91

Where a claim is particularly strong—for example, shortly before a court declaration of title—appropriate care must be taken to preserve the Aboriginal interest pending final resolution of the claim

97 – gov’t and individuals proposing to use or exploit land, whether before or after a declaration of AT, can avoid a charge of infringement or failure to adequately consult by obtaining consent

Extinguishment & Infringement Extinguishment (Delgamuuwk at para 172)

Province cannot extinguish aboriginal rights. Federal government can, but only with the consent of the band (treaty) or infringe where justified.

InfringementJustification (Tsilhqo’tin; Delgamuuwk)The Crown must show:

That it discharged its procedural duty to consult and accommodate; That its actions were backed by a compelling and substantial objective;

o Agriculture, forestry, mining, and hydroelectric power, the general economic development of the interior of BC, protection of the environment or endangered species, the building of the infrastructure and the settlement of foreign populations to support those aims (Delgamuukw)

That the governmental action is consistent with the Crown’s fiduciary duty to the group.o Must not substantially deprive

Infringement of AT will ordinarily require compensation (unlike infringement of AR).

Evidence Evidence (Delgamuuwk)

81

4. FN rely on songs, legends, myths, figures on totem poles that surround the occupation of the land can be adduced in support of claim.

5. SCC said that failing to acknowledge this evidence was dismissive and disrespectful of the types of proof that FN had access to.

6. SCC did not give guidance on how to assess this evidence.

Admissibility of oral histories (Mitchell) Oral histories reflect the distinctive perspectives and cultures of the communities from which they originate

and should not be discounted simply because they do not conform to the expectations of the non-aboriginal perspective.

Admissible as evidence where: - SEE BOLD Useful in the sense of tending to prove a fact relevant to the issues of the case They may offer evidence of ancestral practices and their significance that would not otherwise be

available Oral histories may provide the aboriginal perspective on the right claimed Reasonably reliable; unreliable evidence may hinder the search for the truth more than help it.1. Does the witness represent a reasonably reliable source of the particular people’s history?1. TJ should inquire as to the witness’s ability to know and testify to orally transmitted aboriginal

traditions and history may be appropriate both on the question of admissibility and the weight to be assigned the evidence if admitted.

Even useful and reasonably reliable evidence may be excluded in the discretion of the trial judge if more prejudicial than probative

Common law rules of evidence must be applied flexibly.

Weighing evidence (Mitchell)2. Equal and due treatment should be given to evidence presented by aboriginal claimants.3. Evidence adduced in support of aboriginal claims must not be undervalued4. Should not be interpreted or weighed in a manner that fundamentally contravenes the principles of evidence

law, which, as they related to the valuing of evidence, are often synonymous with the “general principles of common sense”

5. Admissibility is a question of law for the judge6. Interpretation or weight – question of fact (appeal court’s deference to trial judge’s findings of fact; equal

and due weight to other evidence)

Airspace..................................................................................................................................4Kelsen v Imperial Tobacco 1957 EngCA

82

Ratio: Airspace rights belong to owner of land below (cujus est solum ejus est usque ad coelem)Bernstein v Skyviews, 1977 QB.........................................................................................................5

P operated aerial photography company and took a picture of D’s houseRatio: Air space rights extend only to the height necessary for ordinary use and enjoyment of the land and the structures on it-- not by what the plaintiff is actually using, but what the plaintiff could use.

Encroachment.........................................................................................................................6

Strata Property........................................................................................................................7Strata Property Act, SBC 1998, c48:...................................................................................................7

Fixtures...................................................................................................................................8Re Davis (1954)...................................................................................................................................

Bolted down bowling alleys: chattels or fixtures? Degree and “Better use test”.Zellstoff Celgar v BC (2014 BCCA)......................................................................................................9

Pulp mill equipment: chattel or fixture? Fixtures.CMIC Mortgage Investments Corp v Rodriguez (2010).......................................................................9

Tent that is not fixed in cement blocks: chattels or fixtures? Chattels.

Water Rights..........................................................................................................................10Water Sustainability Act.................................................................................................................11Johnson v Anderson [1937] BCSC....................................................................................................12

Unlawful stream diversion interferes w/unlicensed riparian rightCommon law riparian rights stand to the extent that they do not conflict with licences.

Schillinger v H Williamson Blacktop [1977] BCCA............................................................................12P using creek illegally. D pollutes creek. No remedy.

1. A party using water unlawfully cannot collect damages for the pollution of that water.2. Siltation is never lawful.

Steadman v Erickson Gold Mining Corp [1989] BCCA.......................................................................13P uses water domestically. D pollutes water. Remedy.

1. Riparian rights are enforceable, unless the rights of a licencee supersede them. P can sue in nuisance if party makes use of unrecorded water unusable through contamination.2. Contamination cannot be licensed.

Accretion and Erosion............................................................................................................14Southern Centre of Theosophy v South Australia [1982].................................................................14

Lake boundaries move. Do property lines?Property boundaries are tethered to high water mark, so long as gradual and imperceptible

Support.................................................................................................................................16Gillies v Bortoluzzi, 1953, Manitoba................................................................................................16

Ratio: If land is developed/not in natural state, must show that land would have subsided regardless of extra weight of structure. D liable for lateral support sufficient to maintain soil on adjacent property in its natural state.

Rytter v Schmitz..............................................................................................................................16Removal of lateral support: natural state=strict liability. Improved=negligence requiredRemoval of vertical support: strict liability (trespass) improved or natural

Equity....................................................................................................................................17

Freedom of Alienation (selling; transferring).........................................................................18

Relationship between Real and Personal Property.................................................................19Re Fraser (1974) BCCA.....................................................................................................................19

83

Life estate can be created in personalty; entitled to revenue, must specify expressly or impliedly power of encroachment for capital

Crown Grants........................................................................................................................20

Sale of Land (Inter Vivos Transfer).........................................................................................21

Inter Vivos Gifts.....................................................................................................................23

Incomplete Gifts....................................................................................................................24Ross v Ross 1977.............................................................................................................................24

Deed signed, witnessed, and attested to, but not delivered to grandson. Discovered upon death in purse. Daughters sued for ownership over grandson.

Retaining possession of a deed will not render it inoperative, unless there is strong evidence that the transferor’s intention was to do so.

Zwicker v Dorey 1975 NSSC.............................................................................................................24gold digger case Gift to take effect on death; not in a will.

Ratio: An inter vivos gift cannot take effect on death. If a person wants to give a gift upon their own death, they must make a will in accord with WESA.

MacLeod v Montgomery 1980 AltaCA.............................................................................................25Gives transfer form but doesn’t deposit duplicate

Ratio: Duplicate certificate of title freezes title. Where there is evidence that the D did not intend to complete a gift, the court will not give effect to it.

Wills: Testate Disposition......................................................................................................26Tottrup v Ottewell, 1969 SCC..........................................................................................................27

Note: Result legislated by WESA, s 46(1)(b)Will beneficiary dies before testator; who gets estate?

1. “To X, his heirs” creates fee simple2. If a fee simple lapses because of death of donee, it will pass into residue of estate – residue=assets not specifically named disposed of according to rules of intestacyResult legislated by WESA s 46 and would be decided differently today

Intestate Disposition.............................................................................................................28

Mental Capacity for Disposition.............................................................................................29

Proprietary Estoppel..............................................................................................................30Clarke v Johnson ONCA 2014..........................................................................................................30

Johnson owns camp. Clarke uses & maintains camp over 20+ years. Clarke seeks to evict Johnson following a dispute about children’s access to camp.

Proprietary estoppelClarke v Johnson.............................................................................................................................31

Unjust enrichment

Equitable damages vs. injunction/specific performance........................................................31Clarke v Johnson.............................................................................................................................31

Remedy for proprietary estoppel

Leases....................................................................................................................................32

Trusts....................................................................................................................................33McRae v McRae Estate....................................................................................................................33

Trust notation removed from title on transfer. Do beneficiaries have rights?

84

A beneficiary has in personam rights against a trustee, even if the trust is unregistered. Even if a trust is not registered on the title, where there is constructive notice, the RO is bound by the trust.

Torrens System......................................................................................................................34

Torrens Process.....................................................................................................................35

Effect of Registration.............................................................................................................37

Fee Simple & Indefeasibility..................................................................................................38Creelman v Hudson Bay Insurance Co, 1920 PC:..............................................................................39Mowatt v British Columbia (Attorney General), 2017 SCC:...............................................................40

Mowatt attempt to establish adverse possession to unregistered landRequirements for adverse possession

Registration of Title...............................................................................................................41

Charges.................................................................................................................................42Dukart v Surrey 1978 SCC................................................................................................................43

Notation incorrect (says trust not foreshore reserve), removed as a result. Effective?Register of instruments; notation on title not guaranteed to be correct

Credit Foncier v Bennett 1963 BCCA................................................................................................43Forged mortgage assigned to BFP. BFP tries to foreclose. Result?

Registration does not guarantee the validity of a charge. Now codified in s 25.1 A mortgage is only security for the amount actually owing and advancedo the onus is on an assignee of a mortgage to check the amount actually owing

Canadian Commercial Bank v Island Realty 1988 BCCA....................................................................44Fraudster forges and registers discharge of mortgage in order to register another mortgage. What is the effect?

Now, governed by s 25.1: discharge by void instrument not effective.Carr v Rayward (1955 BC County Ct)................................................................................................45

Lien filed for unpaid work done for previous RO. Legit?(Mechanics) liens can be registered after title has changed hands.

Rudland v Romilly 1958 BCCA.........................................................................................................48Notice that is given after the entire transaction of purchase and sale has been executed cannot affect the title of a BFPVw/oN. if prior application to register is pending, CPL does not take effect

Martin Commercial Fueling v Virtanen............................................................................................49Judgement registered after sale agreement, but before sale closestakes subject to equities

If a judgment is registered after agreement for sale, but before close of sale, purchaser gets title free of judgment (unless it is a scheme to defeat judgment)

Pacific Savings and Mortgage Corp v Can-Corp Developments 1982 BCCA.......................................50Mortgagee forecloses on property. Mortgagor files CPL to have redemption period extended.

After foreclosure, rights in property in favour of the mortgagee, but subject to personal rights (right of redemption) of mortgagor.

Assurance Fund.....................................................................................................................52McCaig v Reys, 1978 BCCA..............................................................................................................53

85

McCaig lost option to land because of the dastardly Jerome. Claim to Assurance Fund denied.Loss must be occasioned by operation of the register. Legal title trumps prior equitable title.

RBC v BC, 1979 BCSC.......................................................................................................................54Equitable mortgage granted, but duplicate removal not recorded. Subsequent mortgage registered.

1. Mortgagees cannot collect from the Assurance Fund, nor can those whose losses do not result from the mistake of the Registrar.2. Those who seek to rely on equitable mortgages must accept the risks inherent in such securities.

Gordon v Hipwell, [1952] (BCCA):....................................................................................................54

Unregistered Interests (Against Person).................................................................................55Sorenson v Young, 1923 BCSC – enforcing unregistered interests....................................................55

Unregistered easement across land; property sold; new owner builds a gate.Unregistered interests do not have effect against a BFPV w/o N, even where constructive notice is likely

Martin Commercial Fueling v Virtanen 1997 BCCA – judgments v. unregistered int.........................56Judgement registered after sale agreement, but before sale closes purchaser gets title free of judgment.

If a judgment is registered after agreement for sale, but before close of sale, purchaser gets title free of judgment (unless it is a scheme to defeat judgment)

L& C Lumber v Lundgren, 1942 BCCA...............................................................................................56Timber license assigned to 3rd party; what is the effect? 3rd party can enfore against “person making it” (original party)

Unregistered instruments are enforceable by 3rd party purchaser against the person who created them.Carlson v Duncan, 1931 BCCA – invalid assignment.........................................................................57

3rd party can not enforce unregistered interest against a person who was assigned the unregistered interestmust register assignment for enforceability.

International Paper v Top-Line, 1996 BCCA prohibited transactions............................................57Note: Critics of this decision persuaded the Legislative Assembly of BC to reverse it. The result was enactment of s 73.1

Fraud (Exception to Indefeasibility).......................................................................................59Gill v Bucholtz, BCCA.......................................................................................................................60

Fraudster forged transfer to an accomplice. Accomplice took out 2 mortgages. Effect?Ratio: Registered charges are not indefeasible: nemo dat applies. Mortgagees and other chargeholders are merely "deemed" to be entitled to the benefit of a charge, and the presumption of a valid charge may be rebutted. Charges obtained by fraud will be struck off the title.

Frazer v Walker, 1967 EngPC...........................................................................................................61“Immediate indefeasibility”: Once C became the registered holder of the fee, C keeps the title, and A should be the innocent victim left to seek monetary compensation from B/assurance fund.

Gibbs v Messer 1891 AusPC – overruled by Frazer...........................................................................61McCaig v Reys.................................................................................................................................62

Unregistered option sold by the nefarious JeromeExample of true fraud (but no remedy, because in the hands of BFP)

Hudson’s Bay Co v Kearns and Rowling, 1895 BCCA Qualified by Vancity....................................62Purchaser takes land w/o seeing title deeds (which are deposited w/mortgagee). BFP?

86

1. Someone purchasing or taking a charge from a registered owner with actual notice of an existing unregistered interest will acquire the title or charge subject to that unregistered interest = fraud under s.29(2)2. Section 29 of the LTA protects a BFPVw/oN from unregistered interests if notice is constructed or implied. Constructive notice is not enough to undermine s 23 protection.3. Negligent/Careless – no notice or dishonesty; not fraud

Vancouver City Savings v Serving for Success, 2011 BCSC................................................................63Knowledge is not enough to constitute actual fraud. Fraud requires 1) actual/express knowledge prior to entering into the agreement AND 2) dishonesty/dishonourable conduct that violates common morality

Greveling v Greveling, 1950 BCCA...................................................................................................64Same property transferred twice. Effect on BFP?

1. “actual fraud” includes wilful blindness without dishonesty: “if his (Greveling’s) suspicions were arouse, and he abstained from making inquiries for fear of learning the truth […] fraud might properly be ascribed to him.” Shepherd: difficult to prove2. Ordinarily, a solicitor’s knowledge is to be considered equivalent to the personal, actual knowledge of their client, except under certain circumstances: if lawyer commits fraud, or if the lawyer does not believe the earlier transfer was effective

Re Saville Row Properties, 1969 BCSC.............................................................................................64Attempt to have option registered denied. Effect if BFP knows this?

If you don’t have notice of interest until after you purchase property, you can disregard it. If you have notice of a registered option but have reason to think it’s void, then you may disregard it.

64 The law presumes against fraud: The burden of proving fraud rests with the person alleging it.

In Personam Claims (Exception to Indefeasibility)..................................................................65 Pacific Savings and Mortgage Corp v Can-Corp Developments..................................................65o Mortgagee forecloses on property. Mortgagor files CPL to have redemption period extended.o After foreclosure, rights in property in favour of the mortgagee, but subject to personal rights (right of redemption) of mortgagor.

McRae v McRae Estate, 1994 BCCA, leave to appeal to SCC refused 1994........................................65Trust notation removed from title on transfer. Do beneficiaries have rights?

A beneficiary has in personam rights against a trustee, even if the trust is unregistered. Even if a trust is not registered on the title, the RO is bound by the trust UNLESS they are a BFPV w/o N

65Note: if Farquhar had sold the property to a BFPVw/oN that would have extinguished the rights of the beneficiaries.

Applications to Register.........................................................................................................66Rudland v Romilly 1958 BCSC..........................................................................................................66

CPL lodged after title registration application submitted.If a prior application to register title is pending, CPL does not take effect. Now legislated: s 217.Equitable rules apply: first in time, first in right; where the equities are equal, the law prevails.Nature of fraud is not specified here

Breskvar v Wall 1972 Aust HC.........................................................................................................67Blank xfer form as security; fraud; BFP; ranking of unregistered BPFV vs caveat=BPFV wins

87

Where there are two unregistered interests/equitable claims, consider equities/first in time Bresqvars could have recovered property as against Wall and Petrie b/c of forgery fraud, but Alban was BPFV so obtained better title than Wall and Petrie could give Bresqvar filed in personam claim against Wall and Petrie and obtained money damages in a separate action “Torrens is not a ‘registration of title’, but a system of ‘title by registration’” confirmed by s.25.1

FEE SIMPLE............................................................................................................................68Tottrup v Ottewell, 1969 SCC..........................................................................................................69

Note: Result legislated by WESA, s 46(1)(b)Will beneficiary dies before testator; who gets estate?

1. “To X, his heirs” creates fee simple2. If a fee simple lapses because of death of donee, it will pass into residue of estate – residue=assets not specifically named disposed of according to rules of intestacyResult legislated by WESA s 46 and would be decided differently today

Re Walker , 1925 ONCA...................................................................................................................70Will gives fee simple absolute and gift over

Where there is a repugnant gift, the court will determine the testator’s predominant intention and subordinate intention.

Re Shamas, 1967 BCCA....................................................................................................................70Will gives everything to wife until kids turn 21: LT w/right of encroachment

Where a will is unclear or contradictory, construction is based on the testator’s intentions. Intention is determined by “sit[ting] in the testator’s armchair,” i.e. “gathered from the language of the will read in light of the circumstances in which the will was made.”o Testator may use unexpected words – a dictionary of his own

Cielein v Tressider 1987 BCCA.........................................................................................................71Will gives fee simple, dictates what distribution of profits in event of sale

Testator can’t impose conditions to control an incident of fee simple ownership

Life Estate..............................................................................................................................72Mayo v Leitovski.............................................................................................................................73

LT doesn’t pay taxes, sold at tax sale, extinguishes remainderman’s interest LT cannot defeat remainderman’s interest through default on taxes Remainderman’s interest can however be defeated through a valid tax sale

Waste....................................................................................................................................74Vane v Lord Barnard, 1716..............................................................................................................74

LT is unimpeachable for waste. Strips castle’s valuables.Even if a life tenant is unimpeachable for waste, they can be liable for equitable waste. Now in s 11 of the Law and Equity Act: “An estate for life without impeachment of waste does not confer and is deemed not to have conferred on the tenant for life a legal right to commit equitable waste, unless an intention to confer that right expressly appears by the instrument creating the estate.”

New Westminster v Kennedy..........................................................................................................75House sold at a tax sale stripped the house during the period in which the owner could redeem the property by paying the outstanding taxes.

The principles of equitable waste also apply to a landlord and tenant and property in foreclosure.

88