Equitable interests - cans.ubclss.comcans.ubclss.com/application/media/cans/Harris (Doug)_L… ·...

PROPERTY CAN – TERM 2EQUITABLE INTERESTS.............................................................................................................................................3

Trusts (cont’d)............................................................................................................................................................3Soulos v Korkontzilas (1997)........................................................................................................................................ 3

CONDITIONAL GIFTS...................................................................................................................................................4Contingent Interests & Vested Interests....................................................................................................................6

Stuartburn (Municipality) v Kiansky (2001)................................................................................................................... 6McKeen Estate v McKeen Estate (1993)...................................................................................................................... 7

Three Types of Conditional Gifts/Transfers...............................................................................................................8Caroline (Village) v Roper (1987)................................................................................................................................. 9St Mary’s Indian Band v Cranbrook (City) (1997).........................................................................................................9

State Limitations on Private Power............................................................................................................................9Unger v Gossen (1996)............................................................................................................................................... 11HJ Hayes Co v Meade(1987)...................................................................................................................................... 11Re Leonard Foundation Trust (1990)..........................................................................................................................11Ziff, “Unforeseen Legacies: Reuben Wells Leonard and the Leonard Foundation Trust”...........................................11Trinity College School v Lyons (1995)........................................................................................................................12

LEASES AND LICENCES...........................................................................................................................................13Lease or Licence?....................................................................................................................................................13

Fatac v Commissioner of Inland Revenue (2002).......................................................................................................14Metro-Matic v Hulman (1973)..................................................................................................................................... 14

Tenant’s Right to Quiet Enjoyment..........................................................................................................................14Southwark LBC v Tanner (2001)................................................................................................................................ 15

Landlord’s Duty Not to Derogate..............................................................................................................................15Petra Investments v Jeffrey Rogers (2000)................................................................................................................. 15Chartered Trust v Davies (1997)................................................................................................................................. 15

Residential Tenancy Reform....................................................................................................................................16

SHARED OWNERSHIP...............................................................................................................................................16Basic Concepts and Creating Shared Interests.......................................................................................................16

Re Bancroft Eastern Trust v Calder (1936).................................................................................................................19Property Law Act, s. 11(2).......................................................................................................................................... 19

Severance of Joint Tenancies..................................................................................................................................20Re Sorensen & Sorensen (1977)................................................................................................................................ 20Property Law Act, s. 18............................................................................................................................................... 21

Resolving Concurrent Ownership Disputes.............................................................................................................21“Accounting for Benefits of Occupation”, Ontario Law Reform Commission...............................................................21

Co-Ownership in Family Property Law....................................................................................................................22Co-Ownership in Condominiums & Cooperatives...................................................................................................22

SERVITUDES OVER PROPERTY..............................................................................................................................22Easements...............................................................................................................................................................22

“Report on the Basic Principles of Land Law,” Ontario Law Reform Commission......................................................23Profit à Prendre........................................................................................................................................................24

British Columbia v Tener (1985)................................................................................................................................. 25Access to Public and Private Property.....................................................................................................................25

Director of Public Prosecutions v Jones (1999)..........................................................................................................25State v Shack (1971).................................................................................................................................................. 25Michelin v CAW Canada (1997).................................................................................................................................. 25

Covenants................................................................................................................................................................26Tulk v Moxhay (1848)................................................................................................................................................. 26“Restrictive Covenants: The Basic Ingredients”, B Ziff................................................................................................27“The Impact of Restrictive Covenants on Affordable Housing…”, P Filion..................................................................27

Servitudes for a Public Purpose...............................................................................................................................28Land Title Act, s. 219.................................................................................................................................................. 28

ABORIGINAL TITLE AND LAND RIGHTS ON INDIAN RESERVES........................................................................28History of Aboriginal Title and Indian Reserves in British Columbia........................................................................28

Royal Proclamation (1763), “Indian Provisions”..........................................................................................................28

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Douglas Treaties (1850-54)........................................................................................................................................ 29British Columbia Terms of Union (1871), Article 13....................................................................................................29Constitution Act (1867), ss. 91(24), 109...................................................................................................................... 29Constitution Act (1982), s. 35, “Aboriginal and Treaty Rights”....................................................................................29

Aboriginal Title.........................................................................................................................................................30Delgamuukw v British Columbia(1997) – Lamer CJ...................................................................................................31“Beyond the Indian Act”, Flanagan, Alacantra and LeDressay...................................................................................34R v Bernard, R v Marshall (2005)............................................................................................................................... 35Tsilhqot’in Nation v BC (2007).................................................................................................................................... 35

Overview of Aboriginal Interests in Land & Land Rights on Reserves....................................................................35

COMMON LAW PRIORITIES......................................................................................................................................36Northern Counties of England Fire Insurance v Whipp (1884)....................................................................................37“Security of Property Rights”,PA O’Connor.................................................................................................................37Chippewas of Sarnia Band v Canada (AG) (2000).....................................................................................................37“Aboriginal Title: The Chippewas of Sarnia”, J Reynolds............................................................................................37Rice v Rice (1853)...................................................................................................................................................... 38

TITLE REGISTRATION...............................................................................................................................................39“The Length of a Title Search in Ontario”, Youdan.....................................................................................................40“Review of Greg Taylor, The Law of the Land”, Harris................................................................................................40

Relevant Sections of Land Title Act.........................................................................................................................40Fraud & Indefeasible Title........................................................................................................................................44

“Indefeasible Title in British Columbia: A Comment on the Nov 2005 Amendments”, Harris......................................46Lawrence v Wright (2007)........................................................................................................................................... 46

Registration of Charges...........................................................................................................................................47Credit Foncier v Bennett (1963).................................................................................................................................. 49Canadian Commercial Bank v Island Realty (1988)...................................................................................................49Gill v Bucholtz (2009).................................................................................................................................................. 49“Finding Nemo Dat in the Land Title Act”, Harris & Mickelson....................................................................................50

Notice of Prior Unregistered Interest........................................................................................................................50Holt Renfrew & Co v Henry Singer Ltd (1982)............................................................................................................50Alberta (Ministry of Forestry, Lands and Wildlife) v McCulloch (1991)........................................................................51

Title Registration, Aboriginal Title and Non-Proprietary Interests............................................................................52Skeetchestn Indian Band v. British Columbia.............................................................................................................52

Brainstorm................................................................................................................................................................54

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EQUITABLE INTERESTS

Trusts (cont’d)

Constructive Trusts*CTs are a remedy imposed where “good conscience” demands it (Soulos)

Remedial CT Where D has not acted wrongly in obtaining property but would be unjustly enriched if allowed to keep the property (Becker v Petkus)

Institutional CT Where property was obtained by the wrongful act of D (Soulos v Korkontizilas)

Soulos v Korkontzilas (1997)CONSTRUCTIVE TRUST MAY EXIST EITHER: (A) IN PRESENCE OF WRONGFUL CONDUCT BUT ABSENCE OF UNJUST ENRICHMENT (this case), OR (B) IN PRESENCE OF UNJUST ENRICHMENT BUT ABSENCE OF WRONGFUL CONDUCT (Becker v Pettkus). K was acting as real estate agent for S. S made an offer to purchase, and seller replied w/ a counteroffer but K did not communicate this counteroffer to S. K’s wife bought the property in her own name, and then transferred title to herself and K as joint tenants. S had no established loss, and no unjust enrichment b/c property dropped in value. Does constructive trust exist even in absence of D’s unjust enrichment and P’s corresponding deprivation? McLachlin J said constructive trust may arise even in absence of D’s unjust enrichment in order to “condemn a wrongful act and maintain the integrity of the relationships of rust which underlie many of our industries and institutions”. More broadly, constructive trusts are imposed where “good conscience requires” (whether there is unjust enrichment, or wrongful act like breach of fiduciary duty). [SCC]

Four requirements for wrongful act institutional constructive trust, per Soulos v Korkontzilas :

1. D must be under equitable obligation to P (e.g. fiduciary obligation);2. Acquisition of property by D must have resulted from breach of equitable obligation; 3. P must show legitimate reason for seeking the proprietary remedy, e.g. personal, or related to need to

ensure others like D remain faithful to their duties; and,4. There must be no factors that render imposition of a constructive trust unjust, e.g. if there are third

parties that might be harmed by a transfer of property back from D to P, it would not equitable to impose a constructive trust)

Constructive trusts and real estate transactions:

The purchase and transfer of land involves two stages: (1) agreement of purchase and sale; (2) transfer of the legal interest from vendor to purchaser. In intervening period between formation of agreement and the transfer of the legal interest on the closing date, the vendor holds the property as an institutional constructive trust for the purchaser. If the vendor refuses to transfer the land, what remedy does the purchaser have? Vendor has legal interest, purchaser has equitable interest. In the past, remedy for breach of K involving property = specific performance. But in Semelhago, Sopinka J said it is no longer the case that specific performance will be the automatic remedy in cases of real property sales (damages might be a more appropriate remedy, if the property isn’t “unique”). Need to assess appropriate remedy on case-by-case basis.

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CONDITIONAL GIFTS

Conditional gift in will: is it contingent or vested?

Start with the 5 rules of construction (the anchors!):

1. Testator’s intention is paramount in construction of wills: Crt in HJ Hayes said, “[t]he cardinal rule of interpretation of wills is that effect must be given to the intentions of the testator. Those intentions must be ascertainable from the language of the will.” Look at the language of the will as a whole, per Re Taylor, as well as the surrounding circumstances, per Christensen v Martini. Example: providing for children.

2. Presumption against intestacy: if a will can be constructed in a way to find a home for property, the court will adopt this construction to avoid (partial) intestacy, per McKeen Estate and HJ Hayes. Example: if condition precedent + void, gift would be incomplete = intestacy; if condition subsequent + void, gift would be total; if determinable interest subject to determining event + void, gift would be incomplete = intestacy (so presumption in favour of condition subsequent > immediate vesting, subject to divestment).

3. Presumption in favour of early vesting: as between a contingent interest (condition precedent) and a vested interest (condition subsequent, determining event) courts will prefer the vested interest, per Sifton v Sifton (affirmed in HJ Hayes)

4. Rule from Browne v Moody: a gift (remainder interest, gift over) is prima facie vested if that interest is being delayed to allow for a prior life estate; this rule was applied by the Court in McKeen Estate. Example: “to A for life, and remainder to C if they are both alive at time of A’s death”.

5. Rule from Re Francis: where the reason for postponing a gift is one personal to the recipient/donee, the gift is prima facie contingent > presumed to be a condition precedent. Examples: “to the first daughter to marry”, “to the first child to reach age of 25”, “if B attains the age of 19 years”, “to the survivor of them”. But note: in McKeen v McKeen, the Court declined to apply the rule from Re Francis to the gift of a remainder in fee simple to the testator’s sisters “if they are both alive” at the time of his wife’s death, finding that the reason for postponing the gift was not personal to the sisters.

Prima facie = contingent (condition precedent)? or vested (defeasible interest subject to condition subsequent? determinable interest subject to determining event?)

If the interest is prima facie vested, is the vested interest is defeasible or determinable? Language that indicates the conditional gift is for a defeasible interest subject to a condition

subsequent, per Caroline (Village) v Roper [words of a defeasible interest connote an abrupt end, that the interest will end if the condition subsequent occurs]:

o “if”o “but if”o “but when”o “provided that”, “providing that”o “if it happens that”o “if it should occur that”o “on the condition that”

Language that indicates the conditional gift is for a determinable interest subject to a determining event, per Caroline (Village) v Roper [words of a determining event connote the flow of time, that the interest will continue until it reaches its end]:

o “while”, “whilst”o “during”o “so long as”, “as long as”

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o “until”

Next ask: is the condition invalid? CONDITION PRECEDENT: if a condition precedent is invalid, the transfer fails (b/c condition precedent

= words of limitation, so if no words of limitation, nothing can be transferred).o Is the condition precedent contrary to public policy? A condition will be void as against public

policy if it discriminates on the basis of race, sex or religion, as per Re Leonard Trust. A condition also may be void as against public policy if it prohibits marriage.

o Is the condition precedent a restraint on alienability? If a condition imposes a restraint on alienation, that condition will be void, as per Trinity College. In Trinity College, the school’s second option to buy the Bennetts’ land for a nominal fixed price, far less than fair market value, was held by the court to constitute an improper restraint on alienation, effectively transforming the Bennetts’ fee simple interest into a life estate.

o Is the condition precedent uncertain? Test for uncertainty of a condition precedent: the condition precedent must be “capable of being given some plausible meaning” > the requirement for certainty is knowing whether the claimant has met the condition.

If condition precedent is void as against public policy, void as an improper restraint on alienation, or void for uncertainty, the transfer fails and the transferor retains the interest (the transferee gets nothing). In the case of the will, the gift would remain with the testator’s estate (= intestacy).

CONDITION SUBSEQUENT: if a condition subsequent is invalid, the transfer is total and the interest is vested unconditionally (b/c the condition subsequent is severed from the grant, and the property transfers unconditionally, destroying the grantor’s right re-entry and rendering the transfer absolute).

o Is the condition subsequent contrary to public policy? A condition will be void as against public policy if it discriminates on the basis of race, sex or religion, as per Re Leonard Trust. A condition also may be void as against public policy if it prohibits marriage.

o Is the condition subsequent a restraint on alienability? If a condition imposes a restraint on alienation, that condition will be void, as per Trinity College. In Trinity College, the school’s second option to buy the Bennetts’ land for a nominal fixed price, far less than fair market value, was held by the court to constitute an improper restraint on alienation, effectively transforming the Bennetts’ fee simple interest into a life estate.

o Is the condition subsequent uncertain? Test for uncertainty of a condition subsequent: “the donee must be able to see clearly and distinctly from the outset those actions that will lead to a loss of the interest”. In Re Down, “arrives at the age of 30 years providing he stays on the farm” = void for uncertainty b/c staying on farm was a proviso that could be given no legal effect; in HJ Hayes, the condition that son live on land and cultivate it = void for uncertainty.

If condition subsequent is void as against public policy, void as an improper restraint on alienation, or void for uncertainty, the transfer is total and unconditional > the transferor loses their right of re-entry.

DETERMINING EVENT: if a determining even is invalid, the transfer fails (b/c determining event = words of limitation, defining nature + extent of estate, so if no words of limitation, nothing can be transferred).

o Is the determining event contrary to public policy? A condition will be void as against public policy if it discriminates on the basis of race, sex or religion, as per Re Leonard Trust. A condition also may be void as against public policy if it prohibits marriage.

o Is the determining event a restraint on alienability? If a condition imposes a restraint on alienation, that condition will be void, as per Trinity College. In Trinity College, the school’s second option to buy the Bennetts’ land for a nominal fixed price, far less than fair market

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value, was held by the court to constitute an improper restraint on alienation, effectively transforming the Bennetts’ fee simple interest into a life estate.

o Is the determining even uncertain? Test for uncertainty of a determining event is not clear. Could be that the test is the same as the test for certainty of a condition precedent (“capable of being given some plausible meaning”) because the consequence of invalidity is the same (transfer fails). The test of certainty is knowing what event will cause the grantee’s interest to revert the grantor.

If determining event is void as against public policy, void as an improper restraint on alienation, or void for uncertainty, the transfer fails and the transferor retains the interest (the transferee gets nothing). In the case of the will, the gift would remain with the testator’s estate (= intestacy).

Contingent interest subject to condition precedent: vesting is delayed pending the occurrence of the condition precedent.

Defeasible interest subject to condition subsequent: vesting is immediate but subject to divestment because the transferor retains a right of re-entry (should the condition subsequent occur, the transferor has the option of exercising their right of re-entry; not automatic). Remember: condition subsequent is an independent, additional clause > not words of limitation.

Determinable interest subject to determining event: vesting is immediate but subject to divestment because the transferor retains the possibility of reverter (should the determining event occur, the determinable interest ends and the interest transfers back to the transferor automatically). Remember: the determining event of a determinable interest are words of limitation b/c the determining event defines the nature and extent of the estate.

Contingent Interests & Vested Interests

Three ways to hold a property interest

1. Vested in possession: being seised of the property2. Vested in remainder: where property is granted on, e.g. holding remainder in FS following LE3. Vested in reversion: an interest that reverts back to the transferor

A party can be vested “in interest” or vested “in possession”, or both. Example: “to A for life, reminder to B in fee simple” = A is vested in interest and possession, and B is vested in interest only.

Stuartburn (Municipality) v Kiansky (2001)MULTIPLE ESTATES MAY EXIST SIMULTANEOUSLY BUT NOT ALL CONCURRENT OWNERS ARE IMMEDIATELY ENTITLED TO POSSESSION > EXAMPLE: HOLDER OF CURRENT LIFE ESTATE IS VESTED IN POSSESSION + HOLDER OF REMAINDER IN FEE SIMPLE IS VESTED IN INTEREST. K sought to be elected to municipal office but all elected officials were required to be an “owner of land” per s. 5(1) of MB Local Authorities Elections Act. Definition of “owner of land” = the present owner of a freehold estate. Remember: freehold estate is a measure of the nature and degree of person’s interest in land (the “quantity”), and includes life estates and freehold estates. K’s grandmother held a life estate in property in the municipality, and K held the remainder interest in fee simple for this property. Is K “owner of land” for purpose of s. 5(1)? Yes! K’s remainder interest in fee simple means that he is vested in interest (= present entitlement to future enjoyment of the freehold estate). K’s grandmother is vested in possession for the duration of her life (= present entitlement to present enjoyment of the freehold estate. [MBQB]

5 Rules of Construction to Determine if a Gift is Contingent or Vested

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1. Testator’s intention is paramount in construction of wills: Crt in HJ Hayes said, “[t]he cardinal rule of interpretation of wills is that effect must be given to the intentions of the testator. Those intentions must be ascertainable from the language of the will.”

2. Presumption against intestacy: if a will can be constructed in a way to find a home for property, the court will adopt this construction to avoid intestacy, per McKeen Estate and HJ Hayes

3. Presumption in favour of early vesting: as between a condition precedent (a contingent interest) and a condition subsequent (a vested interest), courts will prefer the vested interest (so courts are inclined to interpret conditions as conditions subsequent), per Sifton v Sifton (affirmed in HJ Hayes)

4. Rule from Browne v Moody = gift is prima facie vested if postponement is to allow for a prior life estate: remainder interest is prima facie vested if that interest is being delayed to allow for a prior life estate

5. Rule from Re Francis = where the reason for postponing a gift is one personal to the recipient/donee, the gift is prima facie contingent: a condition that is personal to the recipient is presumed to be a condition precedent (a contingent interest), e.g. “to the first daughter to marry”, “to the first child to reach the age of 25”

McKeen Estate v McKeen Estate (1993) PRESUMPTION AGAINST INTESTACY, AND PRESUMPTION IN FAVOUR OF VESTING (BOTH REBUTTABLE W/ EVIDENCE TO CONTRARY). A GIFT IS VESTED IS PRIMA FACIE VESTED IF POSTPONEMENT IS TO ALLOW FOR A PRIOR LIFE ESTATE, PER BROWNE V MOODY. Testator died, leaving his wife a life estate and the remainder in fee simple to be divided b/w sisters “if they are both alive” at time of wife’s death. Neither sister survided the wife. Did testator intend that gift to sisters be contingent on them surviving his wife (partial intestacy, residue of estate to be distributed to relatives), or did he intend that the gift to his sisters create vested interest (property would pass to their estates)? Intention of testator of paramount importance when interpreting wills. Presumption against intestacy: presumption that a testator intends to dispose of all of their property by will to avoid partial intestacy. Presumption in favour of vesting: presumption that testators intend to create vested rather than contingent interests. Rule from Browne v Moody: a gift is prima facie vested if the reason for postponement is to allow for prior life estate. Applying presumptions + rule from Browne v Moody, Crt determined that testator’s intention was to leave the residue of his estate to his sisters (vested). Crt declined to apply rule from Re Francis, finding that the reason for postponing the gift was not personal to the sisters. [NBQB]

Practice Questions A: contingent or vested?

1. “to A and B for their lives, and then to B in fee simple”2. “to A and B for their lives and then to the survivor of them in fee simple”3. “to A for life and then to C in fee simple if C marries D”4. “to A for life and then to B in fee simple if, and only if, B attains the age of 19 years”*What is the blue part, and what is the orange part?

1. A and B both hold a life estate that is vested in interest and in possession; B holds a fee simple interest that is vested in interest but not in possession (rule from Browne v Moody: gift is prima facie vested if postponement is to allow for a prior life estate)

2. A and B both hold a life estate that is vested in interest and in possession; A and B both hold the remainder in fee simple as a contingent interest subject to the condition precedent of one of them being the survivor (rule from Re Francis: where the reason for postponing a gift is one personal to the

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recipient/donee, the gift is prima facie contingent)3. A holds a life estate that is vested in interest and in possession; C holds remainder in fee simple as a

contingent interest subject to the condition precedent of C marrying D; if C marries D will A is still alive, the remainder in fee simple becomes vested in interest, but not in possession while A is still alive; there is also a contingent reversionary interest to the donor if C does not marry D (rule from Re Francis: where the reason for postponing a gift is one personal to the recipient/donee, the gift is prima facie contingent)

4. A holds a life estate that is vested in interest and in possession; B holds the remainder in fee simple as a contingent interest subject to the condition precedent of attaining the age of 19; if A is still alive, B’s contingent remainder in fee simple becomes a fee simple interest vested in interest; there is also a contingent reversionary interest to the donor if B does not reach the age of 19 (rule from Re Francis: where the reason for postponing a gift is one personal to the recipient/donee, the gift is prima facie contingent)

*Blue = words of transfer/purchase *Orange = words of limitation

Three Types of Conditional Gifts/Transfers

Conditional Gifts/Transfers

Contingent interest subject to a condition precedent

A contingent interest is subject to a condition precedent. Vesting is delayed pending occurrence of the condition precedent > so the condition precedent must occur before the interest vests.

Defeasible interest subject to a condition subsequent“on the condition that”“if”“but if”“but when”“provided that”“if it happens that”“if it should occur that”

A defeasible interest is subject to a condition subsequent. Vesting is immediate.With a defeasible interest, the transferor retains a right of re-entry. This right of re-entry is a contingent interest (contingent on the transferor exercising their right). Should the condition subsequent occur, the transferor has the option of exercising their right of re-entry (not automatic).The condition subsequent of a defeasible estate is an independent, additional clause (the condition subsequent are not words of limitation!).*Words of defeasible interest connote an abrupt end, that estate will end if condition subsequent occurs.If a condition subsequent is invalid, the condition subsequent is struck and the property transfers to the transferee unconditionally.

Determinable interest subject to a determining event“while”“whilst”“during”“so long as”“as long as”“until”

A determinable interest is subject to a determining event. Vesting is immediate.With a determinable interest, the transferor retains a possibility of reverter. This possibility of reverter is not a contingent interest. Should the determining event occur, the determinable interest ends and the interest transfers back to the transferor automatically.The determining event of a determinable estate are words of limitation (b/c the determining event defines the nature and extent of an estate).*Language of determinable interest connotes the flow of time, that estate will continue until it reaches its end.If a determining event is invalid, the transfer itself is defeated > the whole transfer becomes void, so the transferor retains everything and the transferee gets nothing [nothing transferred b/c the determining event defines nature and

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extent of the estate, words of limitation].

Caroline (Village) v Roper (1987)GRANT = DETERMINABLE FEE IF IT INCLUDES LANGUAGE LIKE “WHILE”, “DURING”, “AS LONG AS”, “UNTIL”. GRANT = DEFEASIBLE FEE SUBJECT TO A CONDITION SUBSEQUENT IF IT INCLUDES LANGUAGE LIKE “PROVIDED THAT”, “ON CONDITION THAT”, “BUT IF”, “IF”. Mr. Roper allowed community group to build community hall on his land on strict understanding that it would only be used for community purposes. After Mr. Roper died, Mrs. Roper transferred title in the land to the community group on condition that hall would continue to only be used for community purposes (document stated land would revert to Mr. Roper’s estate if used for any other purpose = “The acre… shall revert… if used for other than a community centre”). Mrs. Roper died, son inherited her estate, and then the community hall burnt down. The current title holder (the Village) wants to sell land to use for commercial purpose. Does the condition in question offend the rule against perpetuities? Where a grant is for determinable fee subject to right of reverter, the rule against perpetuities does not apply b/c the determining events sets the limit for the estate granted. Where grant is for a fee simple subject to a condition subsequent, the terminating event (condition) may or may not occur > this offends rule against perpetuities. Word “if” in the grant suggests that the deed gives rise to a fee simple subject to a condition subsequent > therefore, the deed violates the rule against perpetuities. But Crt says common intention of parties was that land would revert back to Ropers should it not be used as community hall > so Crt rectified deed to express this intention + property conveyed back to Ropers. [ABQB]

St Mary’s Indian Band v Cranbrook (City) (1997)WHERE NOT CLEAR WHETHER CLAUSE GIVES RISE TO DETERMINABLE OR DEFEASIBLE INTEREST, CRTS SHOULD LOOK AT INTENTION OF PARTIES AND NOT BE BOUND BY FORMALITY. Clause: “that should any time the said lands cease to be used as an airport, they shall revert to the Band”. SCC decided that this particular form was not determinative. SCC concluded it would be fundamentally unjust for them to find that this clause was a condition subsequent, just b/c Band made mistake of using “should” rather than “until” > Court must look at the respective intention of the parties and not be bound by formality. [SCC]

Practice Questions B: defeasible or determinable?

1. “to my widow for life, so long as she remains unmarried”2. “to my widow for life, providing that she does not remarry”*What is the blue part, and what is the orange part?

1. This conditional gift creates a determinable life estate. The determining events = the widow remarrying, and death. If either of the determining events occurs, the life estate ends and the fee simple interests reverts automatically to the transferor (= possibility of reverter).

2. This conditional gift creates a defeasible life estate. The condition subsequent = the widow remarrying. If the condition subsequent occurs, the transferor has the option of exercising their right of re-entry. Remember: condition subsequent is an independent clause.

*Blue = words of transfer/purchase *Orange = words of limitation *Black = independent clause

State Limitations on Private Power Not all conditional gifts will be enforced. Proprietary freedom in Canada is extensive, but not absolute. If a condition is found to be contrary to public policy, courts will not enforce that condition. The effect of an invalid condition depends on the nature of the condition/the form of the grant (condition precedent,

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condition subsequent, or determining event). Public policy described as an “unruly horse”. Balancing process characterized by private/public divide: balancing the freedom of individuals to dispose of their property as they please with society’s interests as a whole.

Things that invalidate conditions

Contingent interest subject to a condition precedent

Invalid condition precedent = transfer fails. If a condition precedent is invalid, no transfer can ever actually occur [condition precedent = words of limitation that define nature and extent of estate; if no condition precedent, no words of limitation so nothing can be transferred].A condition precedent will be invalid if it is:

Contrary to public policy (e.g. discriminatory on basis of race, sex, religion, as per Re Leonard Trust ; if condition prohibits marriage)

Uncertain (the requirement for certainty is knowing whether a claimant has met the condition; the condition precedent must be “capable of being given some plausible meaning”)

Impossible (exception to general rule: Unger v Gossen) Restraint on alienation (Trinity College)

Defeasible interest subject to a condition subsequent

Invalid condition subsequent = transfer total, unconditional. If a condition subsequent is invalid, the condition subsequent is severed from the grant and the property transfers to the transferee unconditionally. Severing a condition subsequent destroys the grantor’s right of re-entry, rendering transfer absolute.A condition subsequent will be invalid if it is:


Uncertain (the requirement for certainty is knowing what events will give rise to grantor’s right of re-entry; “the donee must be able to see clearly and distinctly from the outset those actions that will lead to a loss of the interest”); e.g. Re Down [“providing he stays on the farm” = void for uncertainty], HJ Hayes [condition that son live on land and cultivate it = void for uncertainty]


Determinable interest subject to a determining event

Invalid determining event = transfer fails. If a determining event is invalid, the transfer itself is defeated > the whole transfer becomes void, so the transferor retains everything and the transferee gets nothing [nothing transferred b/c the determining event defines nature and extent of the estate, words of limitation]. Both determinable interest and the grantor’s possibility of reverter are destroyed.A determining event will be invalid if it is:


Uncertain (the requirement for certainty is knowing what event will cause the grantee’s interest to revert to the grantor > but not clear what standard to apply)


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Unger v Gossen (1996) EXCEPTION TO RULE THAT GIFT WILL FAIL IF CONDITION PRECEDENT INVALID. WHERE A CONDITION PRECEDENT IS IMPOSSIBLE, CRTS MUST CONSIDER TESTATOR’S INTENTION. WHERE IT IS CLEAR THAT TESTATOR’S DOMINANT CONSIDERATION WAS THE GIFT, NOT THE PERFORMANCE OF THE CONDITION, THE CONDITION SHOULD BE DISREGARDED. Aunt left $50k to three nephews subject to stipulation that they become Canadian residents w/in three yrs of her death (= condition precedent). Crt found testator’s intent was to benefit nephews and prevent money from going to Communist state; not her dominant intention that they become Cdn residents. If condition precedent remained, transfer could not occur b/c nephews now too old to qualify as Cdn residents > this would frustrate testator’s intention. Crt severed the condition precedent, but allowed money to vest in interest and in possession to nephews (= exception to general rule that the severing of a condition precedent will cause a transfer to fail). [BCSC]

HJ Hayes Co v Meade(1987)PRESUMPTION IN FAVOUR OF EARLY VESTING. WHERE THERE IS UNCERTAINTY WHETHER A CONDITION IS A CONDITION PRECEDENT OR SUBSEQUENT = CONDITION IS PRIMA FACIE A CONDITION SUBSEQUENT TO ALLOW FOR IMMEDIATE VESTING SUBJECT TO TRANSFEROR’S RIGHT OF RE-ENTRY. IF CONDITION SUBSEQUENT IS UNCERTAIN, IT IS VOID > INTEREST IS VESTED UNCONDITIONALLY. Testator provided son James was to receive property on condition that he live on the land and cultivate it, and if James did not want to live on the land and cultivate it, property could go to testator’s other son upon Harold paying James $1000. James did not live on land, and Harold took property but never paid $1000 to James. Did testator intend to create contingent interest subject to condition precedent, or a defeasible interest subject tot a condition subsequent? If condition precedent, disputed property would vest in neither James nor Harold b/c condition precedent never met > disputed property would go to residue of testator’s estate = partial intestacy (*presumption against intestacy!). Also presumption in favour of early vesting, so Crt concluded that condition = a condition subsequent. Crt noted: “The cardinal rule of interpretation of wills is that effect must be given to the intentions of the testator. Those intentions must be ascertainable from the language of the will.” But Crt found condition subsequent was uncertain and therefore void, per Re Down [ONCA found condition that son “arrives at the age of 30 years providing he stays on the farm” void for uncertainty b/c staying on farm was a proviso that could be given no legal effect] > property in this case vested unconditionally in James. [NBQB]

Re Leonard Foundation Trust (1990)A CONDITION THAT DISCRIMINATES ON BASIS RACE, RELIGION, SEX IS VOID AS AGAINST PUBLIC POLICY. Terms of charitable trust/scholarship established by Reuben Wells Leonard in 1923 discriminated on basis of gender (mostly men, fewer women), race (hites only), religion (Protestant Christians only), citizenship (British Nationality) = conditions precedent for receiving a scholarship (not void for uncertainty b/c they had been followed for 65 yrs w/o any trouble). Crt found the charitable trust “void on the ground of public policy to the extent that it discriminates on grounds of race…, religion and sex” > Crt struck out those conditions precedents that were void for public policy. But Crt noted: “This case should not be taken as authority for the proposition that all restrictions amount to discrimination and are therefore contrary to public policy” (e.g. scholarships restricted to visible minorities, women, other disadvantaged groups). [ONCA]

Ziff, “Unforeseen Legacies: Reuben Wells Leonard and the Leonard Foundation Trust”PRIVATE/PUBLIC DISTINCTION + WHEN CONDITIONS ARE VOID AGAINST PUBLIC POLICY. Ziff argues that distinction b/w private and public is unhelpful when trying to draw the line b/w permissible and non-permissible discrimination. For most part, owners are entitled to do whatever they wish with their property, even to extent of destroying it. In private realm, rights of ownership continue to prevail over public policy values like equal treatment (e.g. not against public policy to only allow white people into your home). But in Re Leonard Trust, Crt made clear that condition precedents were void for public policy if they discriminated on

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basis of race, religion, sex. How was this different from Reuben Leonard choosing who or who not to let into his home? Foundation had a “public” dimension > unlike the home, the Foundation was a charitable trust that was not purely private, like the family home. Ziff notes three forms of actions characterized by public/private divide: (1) state action = public, (2) private conduct in the public domain = public, (3) private conduct outside the public domain = private. But dividing line b/w these categories is blurry. A private family gift may require legal enforcement > so even though gift is private, it may be public in the sense that crts will enforce all valid testamentary gifts (and crts are public institutions).

Note re Restraints on Alienation: issue = to what extent should the law allow the current holder of a property interest to limit its alienability? This issue reflects tension b/w desire of property holder to fetter subsequent uses of property, desire of present owner to be as free as they can to do as they please w/ the property. A push for removing fetters as land transforms into an increasingly fungible commodity > push towards free alienability and transferability, away from restraints on alienation. Justifications for increasing fungible nature of property: personhood justification (people should be free to do what they want with their property), and economic justification (economically efficiency > private property is best able to distribute property most efficiently).

Trinity College School v Lyons (1995) IF CONDITION IMPOSES A RESTRAINT ON ALIENATION, THAT CONDITION IS VOID. Bennetts and TCS residential school made agreement that gave option to TCS to purchase Bennetts’ land for fixed price ($9375) upon their death. When Bennetts died, TCS sought to exercise their option (by this time, fair market value = $135k). But Bennetts had already transferred the land to their children. Was option to purchase for fixed price void as improper restraint on alienation? Crt said alienation should not be restrained for two reasons: (1) RonA keep property out of commerce and tend to result in concentration of wealth; (2) RonA tend to prevent improvements to property b/c landowner would be reluctant to make improvements if they cannot sell the property. Crt concluded option = void as restraint on alienation. [Ont Gen Div]

Practice Question C: defeasible or determinable?

1. “To my son STEWART BERNARD all my estate, real and personal, of whatsoever nature and kind and whatsoever situate to be his absolutely subject only that should my son Floyd Bernard decide to return to live here, that a lot of land three acres along highway No. 2 be transferred to him” > Contingent interest subject to condition precedent, or defeasible interest subject to a condition subsequent?

Start with the 3 rules of construction (= the anchors!):a. Testator’s intention paramount [to provide for both sons > give land to Stewart but also give his other

son a place to live if he ever decided to return]b. Presumption in favour of early vesting [presumption in favour of condition subsequent, so interest

vested immediately w/ Steward upon son’s death]c. Presumption against intestacy [if condition precedent + void, gift would be incomplete = intestacy; if

condition subsequent + void, gift would be total to Stewart > so presumption in favour of condition subsequent]

Prima facie condition subsequent. Next ask: is the condition void?No public policy concerns, no restraint on alienability, not impossible. But possibly uncertain. Test for uncertainty for condition subsequent: “the donee must be able to see clearly and distinctly from the outset those actions that will lead to a loss of the interest”. Sufficiently clear that 3 acres of land would be transferred to Floyd if he ever returned, so condition subsequent not void for uncertainty.

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LEASES AND LICENCES

Lease or Licence? Principal difference b/w a leasehold and a freehold estate (life estate, fee simple) is the quantity of estate defined. Leasehold estates are of fixed duration, whereas freehold estates are of non-fixed durations (either “forever” w/ fee simple, or until end of interest holder’s life w/ life estate).

Three Forms of Leases

1. Fixed terms lease (e.g. 1 year)2. Lease for periodic tenancy (e.g. recurring period of time, e.g. month-to-month)3. Tenancy at will (no set term; terminates w/ notice from landlord or tenant)

Lease or Licence?

Lease = an interest in land conferring the right to possess it for a limited period (an estate in land), which is generally binding on the world. Tenant holds the leasehold interest, and landlord holds the reversionary interest. Upon sale of land by landlord, rights and responsibilities related to a lease generally run w/ the land, and do bind subsequent owners.Essential elements of a lease

1. Grant of exclusive possession2. Identification of:

a. Partiesb. Propertyc. Date of commencementd. Rent [not essential, per Street v Mountford, affirmed in Fatac]

Remedy in case of breach by landlord: tenant may bring claim to recover their interest in the land

1. Exclusive possession = the fundamental test for tenancy, per Fatac; “A tenant enjoys those fundamental… rights of ownership that stem from exclusive possession for a defined period”)

2. Limitations on purpose for which occupier can put the land does not negate tenancy, per Glenwood Lumber (affirmed in Fatac)

3. Rent is not necessary for tenancy, per Street v Mountford (affirmed in Fatac)4. Terminology used by parties is not determinative > functional analysis. The intention of the parties

matters, but only their intention wrt substantive rights, not classification.5. No tenancy if occupier’s right to possession can be terminated for reasons extraneous to the

occupation of the land (e.g. Professor Harris has right to exclusive possession of office but this right depends on his employment w/ the University > not a lease)

6. No tenancy where there was no intention to enter into a legally binding relationship7. If right to exclusive possession is to a small area in relation to large area over which person has right to

use (but no exclusive possession), crts inclined to view relationship as a licence

Licence = mere permission to be on the land (no interest/estate in land created), subject to doctrine of privity. Upon sale of land by licensor, rights and responsibilities related to licence do not run w/ the land (licences do not bind subsequent owners).Remedy in case of breach by licensor: licensee limited to remedies in contract law

1. No right to exclusive possession (licensee may only enter upon and use the land to the extent that permission has been given)

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Fatac v Commissioner of Inland Revenue (2002)EXCLUSIVE POSSESSION TEST = THE FUNDAMENTAL TEST FOR TENANCY. Agreement giving right to operate quarry on land for 12 yrs formed in 1991. In 1996, property was sold. Was the land “tenanted property” as described in the sale document? Was agreement a lease, or a licence? Crt found quarry operator’s right of occupation was far from exclusive (no clearly defined area of the quarry over which the quarry operator had exclusive use). Crt concluded agreement = a licence, not a tenancy/lease. [New Zealand CA]

Metro-Matic v Hulman (1973)LEASE OR LICENCE ANALYSIS. Agreement b/w Metro-Matic and Jameson apartment building for laundry room. Building sold. Purchaser discontinued service w/ Metromatic, hired new laundry company. Was the agreement b/w Metro-Matic and Jameson a licence (would not run w/ land) or a lease (run w/ land and bind purchaser)? Parties labeled agreement as “lease”, all necessary elements of lease were present, and included clause that said lease would be binding on all future parties. But trial crt found agreement was licence b/c landlord had keys to laundry room, and people living in building could have “free access to the demised premises at all reasonable times” > evidence that tenant lacked right to exclusive possession. CA reversed trial decision and found that parties intended to create lease w/ exclusive possession (CA applied a hybrid Denning intention of parties + exclusion possession test in its “lease or licence?” analysis). [ONCA]

Steps for determining whether agreement is for lease or licence

1. How did the parties label the agreement? If labeled as “lease”, not determinative (Fatac).2. Are all the necessary elements of a lease present?

a. Exclusive possession?b. Parties?c. Property?d. Date of commencement?e. Rent? Rent simply evidence of intent to be bound, not precondition for lease (Factac).

3. Are there restrictions on the use of the property interest? Restrictions do not disqualify an agreement as a lease; exclusive possession can still be subject to heavy restrictions (Glendwood Lumber, affirmed in Fatac).

4. Is there exclusive possession over a small area, but a licence over a larger area?5. Is there evidence of parties’ intention to create a property interest, binding on future parties? (Metro-

Matic > hybrid “classic exclusive possession + Denning’s intention test”; in Canada, intention of parties is relevant, but exclusive possession test remains paramount)

Tenant’s Right to Quiet Enjoyment The core right of a tenant is the right to quiet enjoyment. This right can either be expressly written into a lease, or implied via statute. “Quiet enjoyment” does not mean “quiet”. Quiet enjoyment = peaceful occupation, right not to be interfered w/, right to occupy w/o interruption of possession. “The covenant for quiet enjoyment is… a covenant that the tenant’s lawful possession of the land will not be substantially interfered with by the acts of the lessor or those lawfully claiming for him” (HofL in Southwark).

Two kinds of interference can give rise to breach of quiet enjoyment: (a) direct interference, e.g. landlord coming onto property w/o sufficient notice, or (b) indirect interference, e.g. nuisance such as noise, odour arising from building renovations undertaken by landlord [law exam case > crt found building renovations interfered w/ student’s right to quiet enjoyment). But to constitute breach of right to quiet enjoyment, cause of noise must be such that “could not fairly have been within the contemplation of the parties” when the tenant took the lease (Southwark).

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To be liable for a nuisance created by another tenant, landlord must have taken some positive action that makes him or her responsible for the nuisance, per Malzy v Eichholz (tenant operating restaurant brought claim against landlord for breach of right of quiet enjoyment b/c of noise caused by another tenant, an auctioneer, but crt found “a lessor is not liable in damages to his leesee under a covenant for quiet enjoyment for a nuisance caused by another of his lessees because he knows that the latter is causing the nuisance and does not himself take any steps to prevent what is being done”) and Curtis Investments v Anderson (intolerable noise from upstairs apt that could not be remedied by landlord did not constitute breach of tenant’s right to quiet enjoyment b/c no active participation or consent on part of landlord).

Southwark LBC v Tanner (2001)TENANT’S RIGHT TO QUIET ENJOYMENT. Claim for breach of quiet enjoyment. Lord Hoffman acknowledged “regular excessive noise” could “constitute a substantial interference with the ordinary enjoyment of the premises”. But crt held that noise from other tenants was not interference in this case b/c lease agreement contained no implied warranty that the building was “fit” for the purpose for which it was leased (a tenant takes their property as it was leased, e.g. building w/ thin walls) > “[i]t is sufficient that the tenants must reasonably have contemplated that there would be other tenant’s in neighbouring flats” (unlike law exam studying case) > there would only be breach of covenant for quiet enjoyment if cause of noise was some act by landlord or another tenant which “could not fairly have been within the contemplation of the parties when the plaintiff took his lease”. Landlord only liable for acts of other tenants if they actively participate or actively consent to acts (Curtis Investments v Anderson; Malzy v Eicholz). [House of Lords]

Landlord’s Duty Not to Derogate In Moulton Buildings v City of Westminster, LDenning described landlord’s duty not to derogate as follows: “If one man agrees to confer a particular benefit on another, he must not do anything which substantially deprives the other of the enjoyment of that benefit; because that would be to take away with one hand what is given with the other”. If A leases a plot of land to B, A may not act in a manner that frustrates the purpose for which the parties intended the land be let when the lease was agreed to. Test for breach of duty not to derogate: whether landlord’s act rendered leased premises “unfit or materially less fit to be used for the particular purpose for which the demise was made”, per Petra.

Petra Investments v Jeffrey Rogers (2000)LANDLORD’S DUTY NOT TO DEROGATE. Tenant had 25-yr lease in shopping mall, beginning in 1988. In 1996, landlord undertook renovations to mall to bring in Virgin music megastore. Landlord offered tenant a “service charge holiday” until construction work complete. Following Virgin opening, tenant’s women’s fashion business did not improve, and tenant attributed this to new megastore. Was landlord under an implied obligation not to derogate (= duty not to render premises “unfit or materially less fit” for purpose that lease was originally made)? Crt said mall did not breach implied duty not to derogate b/c clear from outset that landlord did not commit to maintaining the mall as a women’s high-end fashion retail space (landlord only had implied duty not to alter or use common parts of mall such that mall would lose its character as a retail space). [England High Court]

Chartered Trust v Davies (1997)LANDLORD’S DUTY NOT TO DEROGATE. Crt found mall owner leasing space to pawn broker amounted to breach of duty not to derogate owed by landlord to toy store tenant b/c pawn broker fundamentally altered the nature of mall space, marketed as “high-class retail units”. [England CA]

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Residential Tenancy Reform 1960s and 1970s > increasing move to provide additional protection for tenants (concern about power imbalance b/w landlords and tenants; importance of one’s residential space). Residential Tenancy Act imposed statutory requirements on landlord:

Section 4 of Residential Tenancy Act: does not apply to living accommodation (a) rented by a not-for-profit housing co-op, (b) owned or occupied by an educational institution, (c) in which tenant shares bathroom or kitchen facilities with owner of accommodation; (d) included w/ premises primarily occupied for business and rented under single agreement, (e) occupied as travel/vacation accommodation.

Section 5 of Residential Tenancy Act: landlords and tenants may not contract out of the Act. If there is a conflict b/w the Act and the lease agreement, the Act will trump. “5 (1) Landlords and tenants may not avoid or contract out of this Act or the regulations. (2) Any attempt to avoid or contract out of this Act or the regulations is of no effect.”

Section 12 of Residential Tenancy Act: there is a set of standard terms that are part of every residential tenancy agreement, whether or not those terms are included in the written K > these standards terms are prescribed in regulations (Residential Tenancy Regulation)

Section 13 of Residential Tenancy Regulation: refers to Schedule for list of standard terms. Schedule, Residential Tenancy Regulation: sets out the standard terms, including inspection, pets,

payment of rent, rent increases, subletting, locks, landlord’s entry, ending tenancy. Residential Tenancy Agreement:

Core of the landlord-tenant relationship (exclusive possession + right to quiet enjoyment) is set out in Part 13 of the Residential Tenancy Agreement, and s. 11 of the Residential Tenancy Regulation, as follows: “For the duration of this tenancy agreement, the rental unit is the tenant’s home and the tenant is entitled to quiet enjoyment, reasonable privacy, freedom from unreasonable disturbance, and exclusive use of the rental unit.” Subsection 2 provides that landlord may only enter rental unit if: (a) 24 hrs written notice given no more than 30 days before entry, (b) emergency and entry necessary to protect life and property, (c) tenant gives landlord permission to enter no more than 30 days before entry, (d) tenant has abandoned rental unit, (e) landlord has court order or order from Director of RTB, (f) landlord is providing housekeeping or related services and entry is for that purpose and at reasonable time.

SHARED OWNERSHIP

Basic Concepts and Creating Shared Interests Private property does not equate to individual ownership. Private property interests are shareable, and infinitely divisible > one property can have multiple co-owners. Examples of shared property rights: tenancy in common, joint tenancy, condos and co-operative housing, aboriginal title, corporate shareholders. The nature of coownership depends on grant language and what has happened since the grant (e.g. severance). Two main forms of co-ownership: joint tenancy, and tenancy in common.

Joint tenancy or tenancy in common? per Ontario Law Reform Commission

A. Common law presumption in favour of a joint tenancy . If the four unities are satisfied, there is a presumption at common law that a transfer of title to co-owners creates a joint tenancy, per Re Bancroft. Presumption rebuttable w/ any evidence of testator’s intention to create a tenancy in common: “[a]nything which in the slightest degree indicates an intention to divide property must be held to abrogate the idea of a joint tenancy and to create a tenancy in common” (Re Bancroft). Words of severance that indicate testator’s intention to create TinC:

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“equally” “equally amongst them” “equally to them” “to share and share alike” “severally” “to be divided between” “to be distributed in joint and equal proportions”

B. Equitable presumption in favour of a tenancy in common, in certain circumstances : Where co-owners are mortgage lenders Business partners in commercial context Where purchase price provided unequally (e.g. A provided 25%, B provided 75%)

C. Statutory presumption in favour of tenancy in common . Section 11(2) of BC’s Property Law Act creates presumption in favour of tenancy in common (reversing common law presumption in favour of joint tenancy). But s. 11(2) statutory presumption only applies to land “transferred or devised in fee simple, charged, or contracted to be sold” (does not apply to personal property); also, presumption does not apply to partnership property.

JOINT TENANCY TENANCY IN COMMON

The Four Unities1. Unity of Possession: requires that each JT be

entitled to possession of the whole land, concurrently w/ other JTs

2. Unity of Interest: requires each JT hold same interest, in extent, nature + duration

3. Unity of Title: each JT’s title must be derived from the same document/event

4. Unity of Time: each JT’s title must be vested at the same time (exception: unity of time not required if joint tenancy create by will or conveyance employing a use)

Joint tenants are seised “per mie et per tout” = each JT holds the whole jointly, not separately.Right of Survivorship ( jus accrescendi ) The right of surviving JTs to take the interest of a pre-deceasing JT. When on JT dies, the survivors get a bigger “slice of the pie” (sharing the whole interest with one less person). Legal fiction underlying joint tenancy = there is really one tenant. In Re Bancroft, two siblings found to be joint tenants > after Paul’s death, all $ to Jean.Process of SeveranceA joint tenancy can be converted to a tenancy in common through the process of severance. Severance denotes transformation of an existing JT into a TinC.

Unity of Possession OnlyThe only required unity for a tenancy in common is the unity of possession: tenants in common must be entitled to possession of the whole land, concurrently with other TinC.Distinct, Separate InterestsTenants in common hold distinct, separate interests (no unity of interest, no unity of title, and no unity of time).No Right of SurvivorshipWhen a TinC dies, his or her interest in the land forms part of the deceased’s estate and passes in accordance to his/her will or intestacy rules. Only tenants in common can transfer their share on death (joint tenants are constrained by the right of survivorship).Words of SeveranceTenancies in common are characterized by words of severance, e.g. “share and share alike”, “equally”, “equally amongst them”, “equally to them” [*note: words of severance are different from process of severance].

How to Terminate Co-Ownership

Divide co-owned whole into parcels to be

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Per Williams v Hensmand (1861) and Lord Denning in Burgess v Rawnsley (1975), affirmed in Sorenson, JT may be severed in three ways:1. One party acting on their own [but declaration by

one party that is not communicated to other party is not sufficient to operate as severance]

2. Mutual agreement3. Any course of dealings sufficient to intimate

tinterests mutually treated as constituting TinCOnus of demonstrating that JT is severed lies w/ the party who contends it has been severed.

individually owned by former co-owners. Sell undivided property to third party, and

then divide proceeds amongst co-owners. One or more co-owner(s) can sell their

interest(s) to remaining co-owner(s). One co-owner sells their interest in the co-

ownership to a third party, so that third party becomes a co-owner w/ the remaining co-owners.

Co-owner can apply to courts for partition or for sale of the property.

Steps for determining whether co-ownership is joint tenancy or tenancy in common

1. What was parties’ intention? What does the instrument indicate?a. Does the instrument expressly indicate that the co-ownership is a joint tenancy? If yes, the

form of co-ownership will be a JT so long as the four unities are present and none of the parties have severed the JT.

b. Are there words of severance? Words that indicate testator’s intention to create TinC: “equally”, “equally amongst them”, “equally to them”, “to share and share alike”, “severally”, “to be divided between”, “to be distributed in joint and equal proportions”

c. Is there any other evidence of testator’s intention to create a tenancy in common? “Anything which in the slightest degree indicates an intention to divide property must be held to abrogate the idea of a joint tenancy and to create a tenancy in common” (Re Bancroft)

2. If parties’ intention is unclear, what presumption applies?a. If land, presumption is of a tenancy in common, per Property Law Act, s. 11(2)b. If personal property, presumption is of a joint tenancy, per common law presumption (Robb v

Robb: husband and wife were co-owners in a housing co-op > the occupancy agreement did not specify whether parties held as JTs or TinCs, so CL presumption of a JT applied b/c the property interest was shares in the co-op, not real property)

3. If the common law presumption of a joint tenancy applies, does one of the equitable exceptions apply?

a. Did co-owners contribute unequally to the purchase price? If co-owners contributed unequally, equity creates a trust where beneficial/equitable interest held in proportion to contribution (legal title would remain as a joint tenancy).

b. Were co-owners in a business relationship, in a commercial context? If co-owners were business partners, equity presumes that they hold as tenants in common.

c. Were co-owners mortgage lenders? If co-owners lent money as part of the mortgage, equity presumes that the co-owners hold as tenants in common (to ensure that a co-owner does not lose their security in the loan if they die).

4. If parties intended to create a joint tenancy, does it fail b/c lacking one of 4 unities?a. Unity of possession: each co-owner must be entitled to possession of the whole land,

concurrently with other co-ownersb. Unity of time: each co-owner’s title must be vested [exception: JT created in a will]c. Unity of interest: each co-owner must hold same interest, in extent, nature, durationd. Unity of title: each co-owner’s title must be derived from the same instrument/event

5. If there is a joint tenancy, has one of the parties severed the joint tenancy?a. Has one of the co-owner acted on their own to sever the JT, and communicated this action to

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the other co-owners? (Williams v Hensman, affirmed in Sorenson)i. Has the co-owner transferred their interest to a third party? = severanceii. Has the co-owner transferred their interest to themselves? = severance, per Property

Law Act, ss. 18(1) and 18(3)iii. Has the co-owner mortgaged their interest? At common law, transferring interest to

mortgagee as security for loan = the same as transferring interest to a third party. But under BC title registration system, no longer clear that mortgages involve transfer of interest.

iv. Has the co-owner granted a lesser interest, e.g. life estate, lease? = severanceb. Did co-owners mutually agree to sever? (Williams v Hensman, affirmed in Sorenson) Per

Havlock (cottage property co-owned by uncle and niece as joint tenants), negotiations not sufficient > for severance, there must be actual mutual agreement.

c. Any course of dealings/pattern of behaviour sufficient to intimate parties understood their co-ownership was a TinC? (Williams v Hensman, affirmed in Sorenson)

d. If a party has done everything in their power to sever a JT, a court may find that the JT was severed, per Feinstein v Ashford (property in Pitt Meadows held by co-owners as JTs; Ashford signed application to sever but lawyer never filed this application until right after Ashford’s death; Feinstein sought declaration of joint tenancy but Crt found Ashford had done everything his power to act on his share, so JT was severed)*Note: you cannot sever a JT in a will b/c transfer to surviving JTs takes place at time of death.

Re Bancroft Eastern Trust v Calder (1936)COMMON LAW PRESUMES THAT GIFT W/ MULTIPLE RECIPIENTS W/O EXPLANATORY WORDS CREATES A JOINT TENANCY; BUT IF ANYTHING SUGGESTS TESTATOR INTENDED OTHERWISE, COMMON LAW PRESUMPTION REBUTTED > TENANCY IN COMMON EXISTS. Samuel Bancroft left a gift of money to be divided “into four equal share”, three portions to go to children Percy, Aubrey and Florence, and fourth portion “to the children of my deceased daughter Minnie” (Minnie’s children = Paul and Jean). Trustee paid ¼ of money to Paul and Jean, who each got equal shares, but then Paul died. Did Paul and Jean hold the gift as joint tenants (right of survivorship > $ to Jean upon Paul’s death) or as tenants in common (no right of survivorship > $ to be distributed per Paul’s will/to his estate)? Crt began w/ common law presumption that gift without accompanying explanatory words creates a joint tenancy. Crt then looked for evidence of testator’s intention to rebut presumption and create tenancy in common, but found none (no words of severance like “equal”, “equally amongst them” qualifying the gift to Jean and Paul). Crt concluded Jean and Paul were joint tenants > all money to go to Jean following Paul’s death. [NSSC]

Property Law Act, s. 11(2)Tenancy in common

11 (2) If, by an instrument executed after April 20, 1891, land is transferred or devised in fee simple, charged, or contracted to be sold by a valid agreement for sale in which the vendor agrees to transfer the land to 2 or more persons, other than personal representatives or trustees, they are tenants in common unless a contrary intention appears in the instrument.

Practice Questions D: what is the form of co-ownership?

1. A transfers Strawberry Fields to “B, C, and D as joint tenants for the life of A” (B, C and D = life tenants pur autre vie… the life of A). Then D dies. In her will, D leaves all her property to E.

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2. C transfer SF to “A and B, and their heirs”.3. “To A for life and to B for 10 years as joint tenants.”4. “To A for life, remainder to B for life.”5. “One-third to A, two-thirds to B as joint tenants.”6. R transfers “to C for life, remainder to C’s children and heirs when they reach the age of 21”7. Will says: “To A for life, remainder to the children of A as joint tenants.”8. “SF to B, C and D as joint tenants in fee simple”. C then transfers her interest to E.

1. B and C hold the whole interest in SF as joint tenants for the life of A b/c of right of survivorship. E holds nothing. A holds the reversionary interest.

2. Applying the common law presumption: A and B hold SF in fee simple as joint tenants. C holds nothing (no reversionary interest, b/c transfer was of fee simple).

3. Unequal duration = no unity of interest, so A and B cannot hold as joint tenants but can hold as tenants in common.

4. Successive life estates = no unity of interest, so A and B cannot hold as joint tenants but can hold as tenants in common.

5. Unequal share in estate = no unity of interest, so A and B cannot hold as joint tenants but can hold as tenants in common.

6. No unity of time, so no joint tenancy.7. No unity of time, but there is an exception to the requirement for unity of time if property is transferred

in a will (when a JT created in a will, no need for unity of time) > each child will be vested in interest when born, but all children not be vested in possession until after A dies.

8. No unity of title between E, and B and D. E holds as a tenant in common against B and D. B and D continue to hold as joint tenants as between themselves. If E dies, their interest goes to their estate. If B dies, B’s interest goes to D through the right of survivorship.

Severance of Joint Tenancies

Re Sorensen & Sorensen (1977)SEVERANCE OF A JOINT TENANCY THROUGH CO-OWNER’S TRANSFER OF HER LEGAL INTEREST TO HERSELF (STATUTE), AND THE TRANSFER OF HER EQUITABLE INTEREST TO HER SON (SUFFICIENT AT COMMON LAW). Husband and wife owned land as joint tenants in Calgary. They separated, and wife continued to live in family home, paying rent of $1/yr to husband. Wife became ill with cancer and worried about the financial security of her son who suffered from a mental disability. Wife executed a trust deed, which left her interest in land in trust for her son (equitable interest to son; legal interest remained w/ wife). Wife then filed motion to partition the lots (= to sever the joint tenancy), but died before motion heard. After wife’s death, husband claimed sole ownership of property as surviving joint tenant (this would leave no property to support son’s trust). Daughters were the trustees of their mother’s estate. Was JT severed before wife’s death? Were any actions sufficient to sever the JT? Options: (a) separation agreement, (b) $1/yr lease, (c) family home as security for support payments, (d) execution of trust deed, first to herself and second to daughters in trust for her son, (e) execution of wife’s will, (f) motion for partition. Crt found only (d) was an act sufficient to sever the joint tenancy > the transfer of legal interest to herself was sufficient to sever her interest via statute (think: s. 18 of Property Law Act), and transfer of equitable interest to son was sufficient to sever JT at common law [Crt noted (b) and (c) would have qualified had the lease or security been to a third party; but between one co-owner to another co-owner, these acts do not constitute severance]. Outcome: daughters held legal

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interest as tenants in common w/ their father, in trust for their brother (who held the equitable interest as tenant in common).[ABCA]

Property Law Act, s. 18Rules for transfer and ownership to oneself

18 (1) A person may transfer land to himself or herself in the same manner as to another person, and, without restricting that power, a joint tenant may transfer his or her interest in land to himself or herself. […] (3) A transfer by a joint tenant to himself or herself of his or her interest in land, whether in fee simple or by a charge, has and is deemed always to have had the same effect of severing the joint tenancy as a transfer to a stranger.

Resolving Concurrent Ownership Disputes

“Accounting for Benefits of Occupation”, Ontario Law Reform Commission General rule: a co-owner does not have the obligation to account to other co-owners for the benefits

derived from possession, b/c the occupying co-owner is lawfully exercising his or her rights (unity of possession applies to joint tenancies + tenancies in common: each co-owner has right to possession of the whole land concurrently with other co-owners).

Occupation rent. In exceptional circumstances, an occupying co-owner may need to account to other non-occupying co-owners for the benefits of occupation. Occupation rent can arise in the following circumstances:

o Ouster : where co-owner unlawfully ousts another co-owner by making it intolerable for other co-owner to remain (e.g. threats, violence, intolerable conditions), or physically expulsing them.

o Agreement : where co-owners have agreed to one having sole possession on the terms of making rental or other payments (e.g. in Sorenson v Sorenson, husband and wife agreed that wife would have sole possession in exchange for rent payments), or where one co-owner has agreed to act as “agent” or “bailiff” for other co-owner.

o Statute of Anne : where a co-owner has received a benefit from third parties related to the property, that co-owner may have to pay other co-owners occupation rent for the amount of that benefit (but not benefits received from the property/land itself).

o Waste : co-owner may be liable to compensate other co-owners for conduct that “would unreasonably diminish the value of the property”, or any act amounting to “destruction” of the property (e.g. digging clay for making bricks) > what constitutes waste not clear.

o Equitable Accounting : courts have equitable jurisdiction to require that a co-owner pay occupation rent to another co-owner if the former has made extra mortgage payments that increase the value of the latter’s equity, or the former has done renovations that increase the selling value of the property (*unless these payments or improvements done as gifts from one co-owner to another).

How to calculate occupation rent? No clear method. In Irsack v Irsack (1978), occupation rent set at half market rent. In Dennis v McDonald (1982), occupation rent set at the “fair rent” value, factoring out scarcity. In Leake v Bruzzi (1974), occupation rent made equivalent to the interest on mortgage payments made by co-owner in possession. In Baker v Baker (1976), occupation rent set at amount of mortgage payments made by co-owner in possession.

Right of reimbursement. Co-owner may be able to obtain reimbursement from other co-owners for expenditures related to the property, including mortgage payments, improvements, taxes, fire insurance premiums, upkeep, expenses from litigation w/ a third party. But right of reimbursement can

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only be claimed at time of partition or sale, when improvements become “liquid assets” (b/c some improvements may be done w/o consent of other co-owners, and co-owners should not be liable for costs that they were not a liberty to refuse).

Co-Ownership in Family Property Law Family assets are subject to the presumption of equal sharing But the obligation to share property with a non-title holding spouse only arises w/ occurrence of

specific event, like separation, divorce, death of spouse Ontario’s Family Law Act treats all property acquired during marriage as subject to equal division b/w

spouses, unless property was received by gift to one spouse only (exception: family home), as damages for personal injury, or under a life insurance policy

Parties entitled to leave marriage w/ equal share of accumulated property, unless on spouse can establish that equal division would be unconscionable (= more than just “unfair”)

Right to possession of family home. No matter which spouse holds title, both spouses have equal right to possession of the family home.

Co-Ownership in Condominiums & Cooperatives Equity co-ops: property is owned by the corporation, members hold shares in corporation, and their

right to live in a specific unit is set out in an occupancy agreement Non-profit co-op housing: members have right to occupancy + security of tenancy provided they

comply w/ co-op’s by-lses; each member has one vote to participate in governance Condominiums: individual owners of units are tenants in common wrt common areas (e.g. roof,

parking garage, elevator); condo corporation owns the common property, and each individual owner is a member shareholder of the corporation; remember, condos are creatures of statute

SERVITUDES OVER PROPERTY

Easements An easement is a non-possessory interest in land; a type of servitude (other types of servitudes: profit a prendre, restrictive covenants, charges) that confers a proprietary interest in land falling short of possession. Easements travel w/ the land. Person who holds an easement is never seised of the land (being seised = holding the possessory interest. Most common form of easement = a right of way.

Easement and covenants have been described as a form of “private zoning” > used by private parties to construct relationships between themselves, to either allow or restrict the activities of others. Easements and covenants often used to maintain the particular characteristics of buildings or neighbourhoods.

Steps for identifying an easement, per Re Ellenborough Park (England CA)

1. Dominant and servient tenements > need not be side by side, but must be in reasonable proximity. Exception to dominant/servient tenement rule in s. 218 of Land Title Act, which allows for creation of a conservation covenant, or a “statutory right of way” (but general rule still applies to private landowners).

2. Easement must accommodate the dominant tenement > easement must be “reasonably necessary for the better enjoyment of that tenement” (something that enhances the monetary value of a dominant tenement is a factor to consider, but not determinative of an easement).

3. Dominant and servient tenements cannot be owned by the same person > at common law there must be separate owners. But this common law rule has been changed by statute: s. 18(7) of Property Law Act provides that “common ownership and possession of the dominant and servient

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tenements does not extinguish an easement”.4. Right must be capable of forming the subject matter of the grant > the transfer of an easement

must occur by way of grant (express or implied), whereby the transferor carves out some portion of his or her estate and transfers it to the dominant tenement.

a. Too vague? In Re Ellenborough Park, Crt held that “the full enjoyment… at all times hereafter in common with other persons… of the pleasure ground” was not too vague.

b. Mere recreation and amusement? The reciprocal benefit of an easement must have some utility, and cannot be for “mere recreation and amusement”. In Re Ellenborough Park, England CA held that a park/garden is “the purest of pleasures” but has utility and is not merely for recreation and amusement. Appears to be a very low standard.

c. Does the easement extinguish the possessory interest? The grant of an easement cannot be so extensive that it extinguishes the servient tenement’s right of possession. In Re Ellenborough Park, England CA held that the easement benefiting the homeowners did not extinguish the servient tenement’s possessory interest b/c they could access the park/garden too. In Shelf Holdings v Husky Oil Operations (1989), ABCA held that a pipeline, despite its permanent presence on the servient tenement’s land, qualified as an easement b/c servient tenement (landowner/farmer) retained “a high degree of possession and control with only a low level of interference from the dominant tenement” (pipeline) > farmer could still graze cattle over pipeline

“Report on the Basic Principles of Land Law,” Ontario Law Reform CommissionFour Necessary Elements of an Easement, per Re Ellenborough Park

1. There must be a dominant and a servient tenement. An easement cannot exist in gross. In order to have an easement, there must be a property burdened by the easement and another property that benefits from the easement (rationale: reciprocal benefit for each burden).

Dominant tenement: the property that benefits from the easement; e.g. holder of dominant tenement is the one who has right to cross onto someone else’s property

Servient tenement: the property burdened by the easement; e.g. holder of servient tenement is the one who owns the property through which the holder of the dominant tenement has the right to pass through

2. The easement must “accommodate” (benefit) the dominant tenement. The easement must provide some benefit to the dominant tenement (rationale: burdening a property only makes sense if another party benefits). Measure of benefit = what is “reasonably necessary for the better enjoyment of that tenement”. In Re Ellenborough, CA found that access to the park (a “garden”) benefited the homeowners, therefore accommodated the dominant tenement.

3. There must be reasonable proximity b/w the dominant and servient tenement. The dominant and servient tenements must be close, but need not be right next to each other.

4. Dominant and servient tenements must not both be owned and occupied by the same person (= common law rule). This common law has been reversed by statute, s. 18(7) of Property Law Act, which states: “Common ownership and possession of the dominant and servient tenements does not extinguish an easement.”

5. The right must be capable of forming the subject matter of a grant. The easement must be created by a grant, either express or implied, whereby the grantor (holder of the servient tenement) carves out a portion of their estate and transfers it to the grantee (holder of the dominant tenement).

a. The right conferred in the easement cannot be too vague.b. The right conferred in the easement cannot be a mere right of recreation.

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c. The grant of the easement cannot extinguish the right of possession of the holder of the servient tenement.

Re Ellenborough Park (1956): park was the servient tenement and homeowners were the dominant tenement. War office took control of park and paid compensation to park’s former owners for loss of use of property. Homeowners claimed compensation too, on the basis of their easement (= a property interest). CA concluded that homeowners held an easement b/c access to benefited them.

Two Main Categories of Easements (*but list not closed; courts can create new easements)

1. Positive easements: gives the owner of land a right to do something on or to their neighbour’s land, e.g. right of way, right to take water, right to have drainage pipes and sewers under land

2. Negative easements: gives the owner of land a right to stop their neighbour from doing something on or to the neighbour’s own land, e.g. erecting a building that would cut off the sunlight on neighbouring property [*very few negative easements]

Three Ways that Easements Can Be Created

1. Express grant of an easement: A (owner/occupier of the servient tenement) gives B (the owner/occupier of the dominant tenement) a non-possessory right to make use of A’s like for the purpose identified in the easement.

2. Express reservation of an easement: A (servient tenement) subdivides their land and reserves the right to continue use the land transferred to B (dominant tenement) to enable access to A’s remaining land.

3. Grant or reservation of an easement by implication: a. Rule from Wheeldon v Burrows (1879) is that crt must consider how a parcel of land was used

before it was divided into separate parcels under separate ownership to determine if there are any implied easements (aka quasi-easements). Three criteria to be an implied grant of easement: (1) quasi-easement must have been used by owner/occupies of whole property at time of grant for the benefit to be granted, (2) existence of quasi-easement must have been “continuous” and “apparent”, e.g. there must be some observable physical evidence of its existence, like a road, (3) quasi-easement must be necessary for reasonable enjoyment of property granted. If criteria from Wheeldon not met, parties may still be able to acquire an implied right to an easement if they can establish that the easement is necessary to give effect to the common intention of the parties.

b. Easement of necessity: easement must be necessary for enjoyment of the alleged dominant tenement (it cannot merely make property more convenient or efficient); e.g. if property would otherwise be landlocked, with not access to public way, easement of necessity may be implied

c. Easement by prescription: where use of the alleged servient tenement is “as of right” (w/o force, w/o secrecy, w/o permission > nec vi, nec clam, nec precario); right to acquire a prescriptive easement has been abolished completely in some provinces

Components of a Well-Drafted Easement

a. Identification of the dominant tenementb. Identification of the servient tenementc. Definition of the nature and scope of the easementd. Definition of the time period for which the easement continuese. Any rights and responsibilities either party has wrt the easement

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Profit à Prendre A profit à prendre is the non-possessory right to go onto somebody else’s property to cut wood, catch fish, dig turf, extract minerals, etc. A profit à prendre travels w/ the land (if land is burdened by profit à prendre, the profit à prendre transfer to the new owner when the land is sold).

British Columbia v Tener (1985) DEFINITION OF PROFIT A PRENDRE. Profit à prendre defined by Wells J in Cherry v Petch (1948) as: “a right to enter on the land of another person and take some profit of the soil such as minerals, oils, stones, trees, turf, fish or game, for the use of the owner of the right. It is an incorporeal hereditament, and unlike an easement it is not necessarily appurtenant to a dominant tenement but may be held as a right in gross, and as such may be assigned and dealt with as a valuable interest according to the ordinary rules of property”. E.g. holder of a profit à prendre does not own minerals in situ (part of the fee); rather, the holder of profit à prendre owns the mineral claims and the right to exploit the minerals. [SCC]

Access to Public and Private Property The rights of individuals to use both public and private property as venues for public assembly or the exercise of free speech are easement-like entitlements.

Director of Public Prosecutions v Jones (1999)HIGHWAY AS A PUBLIC SPACE WHICH THE PUBLIC ENJOYS THE RIGHT TO ACCESS AND USE FOR ANY REASONABLE PURPOSE, INCLUDING PEACEFUL ASSEMBLY, SO LONG AS THEIR ACTIVITY DOES NOT INTERFERE W/ TRAFFIC, OTHERWISE CONSTITUTE NUISANCE. Margaret Jones and others protested the erection of a fence around Stonehenge on a public highway nearby. House of Lords found that highway was a public space that the public can enjoy for any reasonable purpose, so long as an activity does not interference w/ traffic or otherwise constitute a nuisance. Lord Hutton quoted Lamer CJ’s judgment in Committee for the Commonwealth of Canada (case that decided that the use of Pearson International Airport as a site for distributing pamphlets was constitutionally protected): “No one could agree that the exercise of the freedom of expression can be limited solely to places owned by the person wishing to communicate: such an approach would certainly deny the very foundation of the freedom of expression.” [House of Lords]

State v Shack (1971) STRIKING BALANCE B/W PROPRIETARY RIGHTS + PUBLIC VALUES. Lawyer + field worker attempted to meet migrant farm workers, but owner of farm refused to allow this meeting in their private living quarters. Farmed sued for trespass, but NJSC struck down this claim. Wientraub CJ said: “The farmer… is entitled to pursue his farming activities without interference”, but “the employer may not deny the worker his privacy or interfere with his opportunity to live with dignity and to enjoy associations customary among our citizens. These rights are too fundamental to be denied on the basis of an interest in real property and too fragile to be left to the unequal bargaining strength of the parties.” [New Jersey SC]

Michelin v CAW Canada (1997)THE THRESHOLD FOR PROHIBITING FORMS OF EXPRESSION IS HIGH, BUT NOT SO HIGH THAT USE OF ANOTHER’S PRIVATE PROPERTY IS A PERMISSIBLE FORM OF EXPRESSION. ANOTHER EXAMPLE OF BALANCING PROPRIETARY RIGHTS + PUBLIC VALUES. Canadian Auto Workers Union distributed leaflets, posters at Michelin tire plants in effort to unionize employees (leaflets, posters included word “Michelin” and corporate logo, the Michelin man). Michelin sued for breach of trademark and copyright. Union argued that they were entitled to use Michelin’s private property based on freedom of expression, s. 2(b) of the Charter. Crt distinguished this case from Committee for the Commonwealth b/c airport = public property + backdrop for free expression, not vehicle for free expression as Michelin logo and name was in this case. Balancing

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proprietary right (Michelin’s control of copyright > no copyright, little left) and public interest (union’s right to free expression > if they lost their right to use logo, still had many other means of expression their views). [Federal Court]

Covenants

Restrictive covenants that run w/ land

Covenants are a method of private zoning, a method of local and private control > like defeasible and determinable limits, covenants provide another mechanism for landholders to place limits on and to control the use of land.

Two types of covenants:1. Positive covenants (compel holder of land to take positive action)2. Restrictive covenants (compel holder of land not to do certain things)

As contractual promises, covenants raise the following issue: to what extent does a contractual promise in the form of a covenant run w/ the land?

Burden of a positive covenant does not run with the land, neither at law nor in equity. Why? Crts are hesitant to impose positive burden on future land holders (privity).

Burden of a restrictive covenant does not run with the land at law, but may run with the land in equity as per Tulk v Moxhay.

Requirements for burden of restrictive covenant to run w/ the land, per Tulk v Moxhay 1. Covenant must be negative in substance2. Must be intended that the burden will run with the servient land > intended by who?3. Burden must be for the benefit of the servient land

a. The burden must enhance the dominant tenementb. The burden must touch and concern the land [burden must affect the nature, quality or value

of the land, or its mode of use]i. Covenant that is only a restriction on alienation will not run [an alienation restriction

does not touch and concern land]ii. Restraints on trade will be subject to rule of “strict construction” [crts will not read

restrictive covenants that restrain trade expansively b/c of underlying policy argument that restraints on trade are bad]

c. All general limitations on equitable principles will apply [bona fide purchaser for value without notice of a restrictive covenant will not take their interest burdened by that restrictive covenant, per Tulk v Moxhay]

Restrictive covenant will be void if it discriminates on basis of “account of the sex, race, creed, colour, nationality, ancestry or place of origin of a person”, per s. 222(1) of BC’s Land Title Act. In Re Drummond Wren (1945), crt held that a covenant restricting land from being “sold to Jews, or persons of objectionable nationality” was void because of public policy.

Tulk v Moxhay (1848)RESTRICTIVE COVENANTS RUN WITH LAND IF A PURCHASER HAS NOTICE (IN EQUITY). P owned several houses around Leicester Square, plus a vacant lot. P then sold the vacant lot to Elms as a “garden or pleasure ground” > transfer doc said: “Elms, his heirs, and assigns should, keep and maintain the said piece of ground and square garden, and the iron railing round the same in its then form, and in sufficient and proper repair as a square garden and pleasure-ground…”. Elms then sold property to D, but this transfer doc did not include

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the covenant regarding use of land (but D had knowledge of covenant). D sought to change character of the property; P sought an injunction. Do restrictive covenants run with the land? Lord Cottenham said: “nothing could be more inequitable than the original should be able to sell the property the next day for a great price, in consideration of the assigned being allowed to escape from the liability which he had himself undertaken”. Conclusion: a restrictive covenant runs with the land if the purchaser of land had notice of that prior equitable interest > “if an equity is attached to a property by the owner, no one purchasing with notice of that equity can stand in different situation from the party from whom he purchased”. [England]

“Restrictive Covenants: The Basic Ingredients”, B Ziff Under common law, covenants cannot run w/ the land b/c of the doctrine of privity of K; but in equity,

covenants can run w/ the land, per Tulk v Moxhay (1848). Four Requirements for Covenant to Run with the Land

1. Covenant must be negative in substance.2. Burden of covenant must have been intended to run w/ the servient land, and that land

must be sufficiently described in the covenant document.3. Covenant must be taken for the benefit of the dominant lands > the covenant must “touch

and concern” the dominant land.4. Equity must be able to enforce the covenant.

Acceptable Forms of Covenants o Restricting a property to residential useso Preserving land for use of amenities, e.g. parkingo Restricting competitive business activitieso Conservation and heritage covenants

“The Impact of Restrictive Covenants on Affordable Housing…”, P Filion Covenants can be effective instruments to protect and enhance neighbourhood amenities b/c they can

narrow the broad development standards set by planning law, and focus on detailed obligations beyond the purview of municipal zoning by-laws

Some argue that zoning should be privatized b/c it represents excessive public sector involvement in the land development process (e.g. Houston, TX, has no zoning legislation > some attribute Houston’s abundance of affordable apartments to this lack of zoning by-laws b/c by-laws tend to severely confine the areas in which multi-unit buildings can be built)

Restrictive covenants are better alternative to public sector zoning b/c they are unaffected by the political system, and more efficient at protecting land value (b/c restrictive covenants are created for economic, not political, reasons)

Shortcomings of restrictive covenants:o Restrictive covenants are inflexible. Difficult to delete or alter a restrictive covenant once it is in

place (unlike zoning by-laws, which are more easily updated). o Restrictive covenants are only enforceable if owner of dominant land takes legal action. But

high cost of litigation can be a deterrent to enforcing restrictive covenants. o Restrictive covenants are not concerned w/ broad society-wide needs or objectives (unlike

zoning by-laws, which can be designed to address the current and future needs of neighbourhoods and cities, and broader social objectives, e.g. affordable housing).

Filion suggests potential clash b/w public policy planning objectives and restrictive covenants. e.g. in a city like Waterloo, restrictive covenants might burden most single-family residential property, leaving only multi-unit housing unburdened (= often low income residential areas) thereby creating “ghettos”

o Capacity of restrictive covenants to allow for private zoning > more affluent communities are able to put restrictive covenants (can only erect buildings, need marble staircases instead of

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concrete… you cannot say no Jews, but you can say no trailer parks) > so you can create an exclusive community by putting neutral restrictions (so privately zoning a residential community) > communities that don’t have these restrictions attached will become “the home of everyone else” (in US, restrictive covenants used to construct racial divisions > on their face, the restrictive covenants are neutral, but the effect is to divide communities along coloured lines) > so need to be conscious of this capacity to privately zone, and its possible larger effects on communities, cities

Servitudes for a Public Purpose Only restrictive covenants will run w/ the land in equity. But some positive covenants may run w/ the land b/c of statute, for example conservation and heritage covenants. Conservation covenants or easements can exist in gross > they can bind a servient tenement without a corresponding dominant tenement (unlike regular covenants + easements, which require dominant tenement that benefits from the servitude). Conservation easement or covenant is a legal agreement b/w landowner and another legal entity who becomes the holder of the easement, e.g. provincial, fed or municipal govt, or conservation organization. Landowners can obtain income tax benefit if they burden their land w/ a conservation covenant or easement if the servitude reduces the market value of the property. Section 219 of Land Title Act provides for creation of conservation covenants in BC.

Land Title Act, s. 219219 (1) A covenant described in subsection (2) in favour of the Crown, a Crown corporation or

agency, a municipality, a regional district, the South Coast British Columbia Transportation Authority, or a local trust committee under the Islands Trust Act, as covenantee, may be registered against the title to the land subject to the covenant and is enforceable against the covenantor and the successors in title of the covenantor even if the covenant is not annexed to land owned by the covenantee.

(4) A covenant registrable under subsection (3) may be of a negative or positive nature and may include one or more of the following provisions:

(a) any of the provisions under subsection (2);(b) that land or a specified amenity in relation to it be protected, preserved, conserved, maintained, enhanced, restored or kept in its natural or existing state in accordance with the covenant and to the extent provided in the covenant.

(5) For the purpose of subsection (4)(b), "amenity" includes any natural, historical, heritage, cultural, scientific, architectural, environmental, wildlife or plant life value relating to the land that is subject to the covenant.

ABORIGINAL TITLE AND LAND RIGHTS ON INDIAN RESERVES

History of Aboriginal Title and Indian Reserves in British Columbia

Royal Proclamation (1763), “Indian Provisions”MAIN SOURCE OF CROWN’S FIDUCIARY OBLIGATION TOWARDS ABORIGINAL PEOPLES. JUSTIFICATION: ABORIGINAL PEOPLES BEING TAKEN ADVANTAGE > NEED FOR CROWN PROTECTION, CONTROL OVER RELATIONSHIP B/W ABORIGINAL PEOPLES + SETTLERS; NEED TO ESTABLISH, PRESERVE TRADE + EXPAND COLONY. FORMAL RECOGNITION OF ABORIGINAL TITLE. Justifications for “Indian Provisions”: “it is just and reasonable, and essential to our Interest, and the Security of our Colonies, that the several Nations and Tribes of Indians with whom We are connected, and who live under our Protection, should not be molested or

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disturbed”; “And whereas great Frauds and Abuses have been committed in purchasing Lands of the Indians, to the great Prejudice of our Interests, and to the great Dissatisfaction of the said Indians”. Hunting grounds: the Indians shall not “be molested or disturbed in the Possession of such Parts of Our Dominions and Territories as, not having been ceded to or purchased by Us, are reserved to them, or any of them, as their Hunting Grounds”. No private purchases of land from Indians: “no private Person do presume to make any purchase from the said Indians of any Lands reserved against the said Indians… but that, if at any Time any of the Said Indians should be inclined to dispose of the said Lands, the same shall be Purchased only for Us, in our Name, at some public Meeting or Assembly of the said Indians”.

Douglas Treaties (1850-54)THE BEGINNING AND END OF TREATY-MAKING IN BC. Beginning in 1950, Governor Douglas negotiated treaties, the Douglas Treaties, with aboriginal peoples on Vancouver Island = 14 total b/w 1850 and 1854. Single page: first para described location, second para described terms (“The condition of our understanding of this sale is this, that our village sites and enclosed fields are to be kept for our own use, for the use of children…”), third para set out price. Chiefs marked blank pieces of paper with Xs, and these Xs were then appended to the template treaty text provided by colonial authorities). Treaties provided land would be surveyed and set aside as reserve land (subsequently, Douglas adopted a very generous reserve allocation policy > but this generous policy was undone Douglas’ successor, Joseph Trutch, who became the BC Land Commissioner in 1864).

British Columbia Terms of Union (1871), Article 13 DOCUMENT ADMITTING COLONY OF BC INTO DOMINION OF CANADA. ARTICLE 13 GAVE FED GOVT RESPONSIBILITY OVER INDIANS AND LAND RESERVED FOR INDIANS BASED ON “A POLICY AS LIBERAL AS THAT HITHERTO PURSUED BY THE BRITISH COLUMBIA GOVT”. Article 13: “The charge of the Indians, and the trusteeship and the management of the lands reserved for their use and benefit, shall be assumed by the Dominion Government and a policy as liberal as that hitherto pursued by the British Columbia Government shall be continued by the Dominion Government after the Union.” “To carry out such policy tracts of land of such extent as it has hitherto been the practice of the British Columbia Government to appropriate for that purpose, shall from time to time by conveyed by the Local Government to the Dominion Government in trust for the use and benefit of the Indians on application of the Dominion Government...”

Constitution Act (1867), ss. 91(24), 109FED GOVT JURISDICTION OVER “INDIANS, AND LANDS RESERVED FOR INDIANS”. PROV JURISDICTION OVER “LANDS, MINES, MINERALS AND ROYALTIES”. Section 91(24): “Indians, and Lands reserved for Indians.” Section 109: “All Lands, Mines, Minerals, and Royalties belonging to the several Provinces of Canada, Nova Scotia and New Brunswick at the Union… shall belong to the several Provinces of Ontario, Quebec, Nova Scotia, and New Brunswick in which the same are situate or arise…”

Constitution Act (1982), s. 35, “Aboriginal and Treaty Rights”CONSTITUTIONAL RECOGNITION AND AFFIRMATION OF ABORIGINAL RIGHTS AND TREATY RIGHTS. Recognition of existing aboriginal and treaty rights, s. 35(1): “The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed.” Definition of “aboriginal peoples of Canada”, s. 35(2): “In this Act, “aboriginal peoples of Canada” includes the Indian, Inuit and Metis peoples of Canada.” Land claims agreements, s. 35(3): “For greater certainty, in subsection (1) “treaty rights” includes the rights that now exist by way of land claims agreements or may be so acquired.” Aboriginal and treaty rights are guaranteed equally to both sexes, s. 35(4): “Notwithstanding any other provision of this Act, the aboriginal and treaty rights referred to in subjection (1) are guaranteed equally to male and female persons.” Commitment to participation in constitutional conference, s. 35(5): “The government of Canada and the

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provincial governments are committed to the principle that before any amendment is made to Class 24 of section 91 of the “Constitution Act, 1867”, to section 25 of this Act or to this Part, (a) a constitutional conference that includes in its agenda an item relating to the proposed amendment… will be convened by the Prime Minister of Canada; and (b) the Prime Minister of Canada will invite representatives of the aboriginal peoples of Canada to participate in the discussions on that item.”

Aboriginal Title History of Treaty-Making in British Columbia & BC’s Reserve Geography

In 1849, the colony of Vancouver Island was established. There was transition in the relationship b/w aboriginal peoples and Europeans > while they had originally been partners in commercial trade (the land-based fur trade), they had become competitors for land. At this point, treaty making process began in BC > the Douglas Treaties (14 total b/w 1850 and 1854). But that was it! Various theories for why there were not treaties after 1854: Douglas was a pragmatist (thought he had acquired enough space > didn’t need to acquire more land); high cost of treaty-making. The Douglas Treaties provided land would be surveyed and set aside as reserve land. Subsequently, Douglas adopted a very generous reserve allocation policy > but this generous policy was undone Douglas’ successor, Joseph Trutch, who became the BC Land Commissioner in 1864. Trutch viewed aboriginal peoples are competitors for land, and developed policy that set aside no more than 10 acres per family for reserves (whereas preemption grant for Europeans settlers was 160 acres). In 1871, BC joined Confederation > ceded jurisdiction over Indians and land reserved for Indians to fed govt. Terms of Union said that fed govt would adopt “a policy as liberal as that hitherto pursued the British Columbia Government…” (but BC policy under Trutch was NOT liberal!). BC’s reserve geography emerged out of contested process b/w prov and fed govts. There are 1500+ small reserves in BC, but all reserve land only amounts to 1/3 of 1% of BC’s land area = postage stamp reserve systems. Following SCC’s decision in Calder, fed govt established two land claims processes: comprehensive claims process (negotiating treaties) + specific claims process (negotiating size of reserves). But BC govt refused to become involved in negotiation process until 1990 > finally, in 1993, the BC Treaty Process was born. Product of the BC Treaty Process: the Tsawwassen Treaty.

Key cases in development of common law doctrine Aboriginal Title

St Catherine’s Milling (1888): arose out of dispute b/w ON and fed govt, and fed govt’s grant of timber licence to St Catherine’s Milling. Privy Council interpreted RP 1763 as giving Indians merely a personal and usufructuary right (= a non-proprietary right of occupation; aboriginal title as merely a burden on Crown land); starting point of Cdn jurisprudence on aboriginal title.

Calder v BC (1973): case brought by Nisga’a, seeking declaration that their aboriginal title not extinguished; SCC held aboriginal title was not derived from RP 1763 (it pre-dated it), and is more than a “personal and usufructuary right” = aboriginal title as a legal interest; 6 judges said aboriginal title existed, but 3 extinguished by thirteen land ordinances + 3 not extinguished; 1 judge dismissed Nisga’a claim on a technicality. SCC’s decision in Calder prompted fed govt to initiate comprehensive and specific land claims processes (Nisga’a treaty concluded in 1990).

R v Guerin (1984): aboriginal title is sui generis and inalienable except to the Crown; surrender of aboriginal title to land gives rise to Crown’s fiduciary duties.

R v Sparrow (1990): fiduciary duty identified in Guerin imported into the constitutional framework, requiring justification for any infringement of aboriginal rights (Sparrow was the first SCC case to interpret the new s. 35) > SCC held Musqueam had aboriginal right to a food, social and ceremonial fishery, and articulated three stage test for interpreting s. 35: (1) Is there an aboriginal right?, (2) Has the right been infringed?, (3) Is infringement justified?; SCC also articulated priority scheme for fishery management: (1) conservation, (2) Indian food, social and ceremonial fishery, (3) sport and commercial fisheries.

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R v Van der Peet (1996): building on Sparrow, SCC further developed test for defining an aboriginal right > to be an aboriginal right “an activity must be an element of a practice, custom or tradition integral to the distinctive culture of the group claiming the right”.

R v Gladstone (1996): herring roe on kelp + aboriginal right to a commercial fishery; SCC held that compelling and substantial legislative for infringement of aboriginal right could include “the pursuit of regional and economic fairness, and the recognition of the historical reliance on and participation in the fishery by non-aboriginal groups”; SCC concerned that aboriginal right to commercial fishery had no internal limitation (= potential to be exclusive).

Delgamuukw v BC (1997): definition of aboriginal title, test for proof of aboriginal title, test for justification of infringement of aboriginal title; Crown argued aboriginal title was not more than an amalgam of aboriginal rights; Hereditary Chiefs argued aboriginal title amounted to an inalienable fee simple interest in land > SCC held aboriginal title was something in b/w these two positions = a sui generis property right.

Haida Nation v BC (2004): the Crown’s duty to consult aboriginal peoples where an aboriginal right has been claimed but not yet proven or formally recognized under the law.

R v Bernard, R v Marshall (2005): building on Delgamuukw = exclusive occupation standard > moving away from aboriginal perspective, back towards common law perspective.

Tsilhqot’in Nation v BC (2007): BCSC case in which Vickers J made no declaration of aboriginal title but recognized its existence inside and outside the claim area = the first judicial demarcation of aboriginal title land.

Delgamuukw v British Columbia(1997) – Lamer CJ THE CONTENT OF ABORIGINAL TITLE, HOW ABORIGINAL TITLE IS PROTECTED BY S. 35(1), WHAT IS REQUIRED FOR PROOF OF ABORIGINAL TITLE, AND JUSTIFICATION TEST FOR INFRINGEMENT OF ABORIGINAL TITLE. Amalgam of 133 individual claims brought by hereditary chiefs of the Gitksan and Wetsuwet’en > claim for ownership and jurisdiction of traditional territories (on appeal, concepts shifted to claims for aboriginal title and self-government). 300+ trial days before McEachern CJ. First time adaawk (formal oral histories of territorial acquisitions) and daxgyet (body of law defining Gitksan relationship w/ animals, land > Richard Overstall describes daxgyet as “the ownership of territory is a marriage of the Chief and the land”) introduced into courtroom. BCSC and BCCA held that thirteen colonial land ordinances extinguished claimants’ right to land. [SCC]

Characteristics of Aboriginal Title

Lamer CJ in Delgamuukw described aboriginal title as a right in land (a property interest): “Aboriginal title is a right in land and, as such, is more than the right to engage in specific activities which may be themselves aboriginal rights. Rather, it confers the right to use land for a variety of activities, not all of which need be aspects of practices, customs and traditions which are integral to the distinctive cultures of aboriginal societies. Those activities do not constitute the right, per se; rather, they are parasitic on the underlying title. However, the range of uses is subject to the limitation that they must not be irreconcilable with the nature of the attachment to the land which forms the basis of the particular group’s aboriginal title.”Aboriginal title is a sui generis proprietary interest, distinct from other proprietary interests like fee simple b/c can only be explained by reference to common law and aboriginal legal perspectives.Three characteristics of aboriginal title:

1. Inalienable: lands held pursuant to aboriginal title cannot be sold or surrendered to anyone other than the Crown; lands held pursuant to aboriginal title are inalienable to third parties; remember that one of the rights in the bundle is alienability > but property right can exist w/o the full bundle of

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sticks > so the limit on alienability does not preclude aboriginal title from being a property right.

2. Source is prior occupation of land: source of aboriginal title is prior occupation of Canada by aboriginal peoples, (not RP 1763, as Privy Council suggested in St Catherine’s Milling).

a. Physical occupation: “What makes aboriginal title sui generis is that it arises from possession before the assertion of British sovereignty, whereas normal estates, like fee simple, arise afterward.”

b. Relationship b/w common law + pre-existing aboriginal legal systems: aboriginal title has as its source in aboriginal legal systems prior to assertion of sovereignty, but only emerges out of interaction w/ the common law > aboriginal title is a result of the intersection b/w aboriginal law and common law.

3. Communal: aboriginal title cannot be held by individuals; aboriginal title is a collective right to land held by the community of an aboriginal nation as a whole. Though SCC did not grapple w/ self-govt in Delgamuukw, the fact that aboriginal title is a collective right suggests that some measure of self-govt must exist (need collective body to determine how aboriginal title land is to be used) = implicit recognition of aboriginal self-govt.

Chief Joan Ryan, Hanamuxw: “it is not your personal property, but rather you are designated as the person to manage that property not just for yourself but for all members of your house.”

Content of Aboriginal Title

The content of aboriginal title:1. The right to exclusive use and occupation of the land.

a. Content aboriginal title not restricted to those uses that are elements of a practice, custom, or tradition that is integral to distinctive culture of aboriginal group claiming the right.

b. But aboriginal title does not “amount to a form of alienable fee simple either.”

2. The right to choose to what uses the land can be put, subject to the ultimate limit that those uses cannot be irreconcilable with the nature of the group’s attachment to land (uses cannot destroy ability of land to sustain future generations of that community) = inherent limit on aboriginal title

a. E.g. if occupation established w/ reference to use of land as a hunting ground, group who has successfully claimed aboriginal title cannot use that land in a manner that destroys its value for such a use, for example by strip-mining it.

b. E.g. if group claims a special bond to the land b/c of its ceremonial or cultural significant, it may not use that land in a way that would destroy that relationship, for example by turning it into a parking lot.

c. “What the inalienability of lands held pursuant to aboriginal title suggests is that those lands are more than just a fungible commodity. The relationship between an aboriginal community and the lands over which it has aboriginal title has an important non-economic component. The land has an inherent and unique value in itself… The community cannot put the land to uses that would destroy that value.”

d. This limitation does not restrict use of aboriginal title land to traditional activities > “[t]hat would amount to a legal straitjacket”.

How Aboriginal Title is Protected by s. 35(1)

Section 35(1) did not create aboriginal rights. Rather, it constitutionalized aboriginal rights, which were recognized well before 1982. Aboriginal title “is one species of aboriginal rights recognized and affirmed by s. 35(1)” (Lamer CJ, Delgamuukw). The range of aboriginal rights protected and affirmed by s. 35(1):

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aboriginal rights that are practices, customs and traditions integral to the distinctive aboriginal culture of the group claiming them; aboriginal rights that are site-specific; aboriginal title, which confers more than the right to engage in site-specific activities that are aspects of the practices, customs, traditions of a distinctive aboriginal culture. Aboriginal title confers a right to the land itself.

Test for Proof of Aboriginal Title

Drawing on test for aboriginal rights (“integral to a distinctive pre-contact culture”) from Van der Peet, SCC in Delgamuukw developed a test for identifying aboriginal title. This test was then limited by the SCC in Bernard and Marshall, and applied by the BCSC in Tsilhqot’in.

1. The land must have been occupied prior to sovereignty.a. Date of assertion of sovereignty in BC: 1846 (Oregon Boundary Treaty).b. Lamer CJ in Delgamuukw said: “Aboriginal title is a burden on the Crown’s underlying title.

However, the Crown did not gain this title until it asserted sovereignty over the land in question. Because it does not make sense to speak of a burden on the underlying title before that title existed, aboriginal title crystallized at the time sovereignty was asserted.”

c. Lamer CJ in Delgamuukw said: need consider both aboriginal + common law perspectives when understanding meaning of “occupation” > common law understanding of occupation built around physical occupation, aboriginal understanding of occupation more expansive (“occupied by a system of law”).

2. If present occupation is relied on as proof of occupation pre-sovereignty, there must be a continuity between present and pre-sovereignty occupation.

a. No need to establish an unbroken chain of continuity, but there must be “substantial maintenance of the connection” b/w the people and the land

b. The fact that the nature of occupation may have changed b/w sovereignty and present does not matter, as long as substantial connection b/w people and land is maintained

3. At the time of sovereignty, occupation must have been exclusive.a. Lamer CJ said that proof of exclusivity must rely on both the common law and aboriginal

perspectives. “Exclusivity is a common law principle derived from the notion of fee simple ownership and should be imported into the concept of aboriginal title with caution. ...the test required to establish exclusive occupation must take into account the context of aboriginal society at the time of sovereignty.”

Presence of other aboriginal groups can reinforce finding of exclusivity b/c this suggests aboriginal group claiming title had exclusive control of land (other groups had to ask for and be granted permission to use the land); e.g. Professor MJ told us Wetsuwet’en had 7 words for trespass, which suggests they took concept seriously).

Joint aboriginal title, shared between multiple aboriginal groups, also possible. If the group claiming the right cannot show that they occupied a piece of land

exclusively, “it will always be possible to establish aboriginal rights short of title. These rights will likely be intimately tied to the land and may permit a number of possible uses. However, unlike title, they are not a right to the land itself. Rather… they are a right to do certain things in connection with that land.”

b. But SCC in R v Bernard; R v Marshall shifted away from aboriginal perspective, back towards common law perspective, shoe-horning the aboriginal perspective into the common law perspective (not what the SCC envisioned in Delgamuukw!); McLachlin CJ said: “exclusive possession in the sense of intention and capacity to control is required to establish aboriginal title. Typically, this is established by showing regular occupancy or use of definite tracts of land for hunting, fishing or exploiting resources… The ultimate goal is to translate the pre-

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sovereignty aboriginal right to a modern common law right.”To date, there is no judicially recognized aboriginal title land. There are reserved lands, treaty lands (e.g. Nisga’a and Tsawwassen treaty lands), and even judicial opinion about where aboriginal title might exist (Tsilhqot’in Nation v BC). But no aboriginal title (lots claimed, but none recognized).

Justification Test for Infringement of Aboriginal Title

Justifiable infringement came out of Sparrow, was embellished in Gladstone, and dealt with in the context of aboriginal title in Delgamuukw.General justification test for infringement of aboriginal rights set out in Sparrow and Gladstone :

1. Infringement must be in furtherance of compelling + substantial legislative objective2. Infringement must be consistent with the Crown’s fiduciary duty to aboriginal peoples

Justification test for infringement of aboriginal title, per Lamer CJ in Delgamuukw 1. Infringement of aboriginal title must be in furtherance of a compelling and substantial legislative

objective, which may include:a. Development of agriculture, forestry, mining and hydroelectric powerb. General economic development of the interior of BCc. Protection of the environment or endangered speciesd. Building of infrastructuree. Settlement of foreign populations to support these principles

2. Infringement of aboriginal title must be consistent with the Crown’s special fiduciary relationship with aboriginal peoples, which gives rise to two requirements:

a. Duty to Consult: where there is infringement of aboriginal title, the Crown has a duty consult the aboriginal group to determine whether the infringement is justified; Lamer CJ said, “The nature and scope of the duty of consultation will vary with the circumstances.” Sometimes, where the breach is “less serious or relatively minor” the duty to consult will involve “no more than a duty to discuss important decisions”. But in most cases, the duty to consult will require more: “Some cases may even require the full consent of an aboriginal nation, particularly when provinces enact hunting and fishing regulations in relation to aboriginal lands.” In all cases, consultation must be in good faith, “and with the intention of substantially addressing the concerns of the aboriginal peoples whose lands are at issue”.

b. Fair Consultation: Lamer CJ said, “The amount of compensation payable will vary with the nature of the particular aboriginal title affected and with the nature and severity of the infringement and the extent to which aboriginal interests are accommodated”.

Towards ReconciliationLamer CJ in Delgamuukw said that reconciliation entails recognition that “distinctive aboriginal societies exist within, and are a part of, a broader social, political and economic community.” The underlying purpose of s. 35(1) is “the reconciliation of the pre-existence of aboriginal societies with the sovereignty of the crown” (Lamer CJ, Van der Peet). Lamer CJ’s closing words in Delgamuukw: “Let us face it, we are all here to stay.”Vickers J (BCSC) in Tsilhqot’in said: “Reconciliation is a process”. In the interest of all Canadians to begin to engage in this process as soon as possible to achieve honourable settlement w/ Tsilhqot’in [and other aboriginal peoples, more generally].

“Beyond the Indian Act”, Flanagan, Alacantra and LeDressay

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ADVOCATING FOR INDIAN LAND OWNERSHIP. “We believe that Indians should own their own lands and are capable of managing them, and that those First Nations who wish to tae over that responsibility should be able to acquire the title to their reserves from the Crown.” “By facilitating economic development on reserves, property rights reform will doubtless create more Indian millionaires. We don’t apologize for that… property rights reform is not only, or even primarily, for the well-to-do. Its greatest benefits will fall upon ordinary First Nations people, especially through the improvement of housing on reserves.”

R v Bernard, R v Marshall (2005)QUESTION OF PROOF OF ABORIGINAL TITLE: APPROPRIATE STANDARD OF OCCUPATION TO ESTABLISH ABORIGINAL TITLE IS EXCLUSIVE POSSESSION (= CAPACITY TO CONTROL, ESTABLISHED BY SHOWING REGULAR OCCUPANCY OR USE OF DEFINITE TRACTS OF LAND) > SHOE-HORNING ABORIGINAL PERSPECTIVE INTO COMMON LAW PERSPECTIVE. One case involved unlawful possession of spruce logs, other case involved unlawful cutting of timber > Bernard and Marshall argued actions justified b/c of aboriginal title. SCC considered what standard of occupation necessary to establish aboriginal title, going back to Delgamuukw test. McLachlin CJ said: “The ultimate goal is to translate the pre-sovereignty aboriginal right to a modern common law right.” > shoe-horning the aboriginal perspective into the common law perspective, by considering whether “activity was sufficiently regular and exclusive to comport with title at common law”, whether practice “viewed from an aboriginal perspective” corresponds w/ common law, and whether practice at the time of assertion of sovereignty compares w/ common law [3 Cs] > illustrates transformation of a body of law (aboriginal law!) into a body of evidence, moving away from the ideal of legal pluralism.

Tsilhqot’in Nation v BC (2007)APPLICATION OF TESTS FOR IDENTIFICATION OF ABORIGINAL TITLE AND JUSTIFICATION OF INFRINGEMENT FROM DELGAMUUKW. FIRST JUDICIAL DEMARCATION OR ABORIGINAL TITLE LAND, BUT NO JUDICIAL DECLARATION. Claim by Tsilhqot’in and Xeni Gwet’in for aboriginal title in part of Cariboo-Chilcotin region (Claim Area ~438,000 hectares). Vickers J (BCSC) held that aboriginal title exists both inside and outside Claim Area, but did not make a declaration of aboriginal title b/c of problems w/ pleadings. Vickers J applied 3-stage s. 35(1) test from Sparrow: (1) Is there aboriginal right > aboriginal title? Yes. Applying test for aboriginal title from Delgamuukw = land occupied prior to sovereignty, continuous occupation, and exclusive control over Claim Area; (2) Has the right been infringed? Yes. Provincial forestry management scheme amounted to clear denial of aboriginal title; (3) Is infringement justified? No. Applying test for justification of infringement of aboriginal title from Delgamuukw = forestry can be a substantial and pressing legislative objective but in this case no b/c “impact of forestry activities on the plaintiff’s Aboriginal Title is disproportionate to the economic benefits that would accrue to British Columbia or Canadian society general”, and the Crown did not meet its duty to consult. [BCCA said that Vickers J misapplied Marshall and Bernard by rejecting the postage stamp approach to aboriginal title and not applying common law standard for occupation > now before the SCC]

Overview of Aboriginal Interests in Land & Land Rights on Reserves Types of aboriginal interests in land: (1) aboriginal title lands, (2) reserve lands, (3) treaty lands.

Reserve lands are held in trust for Band by fed govt. Indian Act provides for allotments to individual band members, in form of Certificates of Possession or Certificates of Occupation (described by DH as “fee simple with training wheels”). Certificates of Possession exist like fee simple interests but cannot be transferred to anyone outside the Band (*but Certificates of Possession can be leased).

Treaty lands are not s. 91(24) lands (unlike aboriginal title lands and reserve lands). Example of treaty lands: ~2000 square km in lower third of Nass River Valley that became Nisga’a Treaty Lands through the Nisga’a Final Agreement. Chapter 3 of Nisga’a FA says: (a) Nisga’a Nation owns Nisga’a lands in fee simple, the largest estate known in the common law; (b) Nisga’a Nation may dispose of whole of its estate in fee simple, or any

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parcel, to any person; (c) Nisga’a Nation may also dispose of any lesser estate in the land, to any person. The Nisga’s fee simple interest in their land describes the longest time in land known to the common law (= estate). But Nisga’a were not prepared to accept the common law doctrine of tenure, which holds that all interests in land emanate from Crown. Remember: doctrine of estates determines “quantity” of interest in land; doctrine of tenure determines “quality” of interest in land. Nisga’a willing to accept doctrine of estate, but not doctrine of tenure.

Nisga’a Landholding Transition Act passed in 2009 but not yet in force. Nisga’a Treaty Lands are divided up b/w land held by Nisga’a Nation and land held by 4 Nisga’a Villages. Act proposes to grant Nisga’a Villages the power to transfer fee simple interests to individual Nisga’a (provided land does not exceed 0.2 hectares and principal use of land is residential).

COMMON LAW PRIORITIES

Common law priorities is concerned w/ the allocation of risk, per Levmore in “Variety and Uniformity in the Treatment of the Good-Faith Purchaser”. With common law priorities, risk tends to be allocated to purchasers > purchaser needed to determine if others held interest in a property, in order to safeguard their own interest. Focus of common law priorities is static security for landholders, not dynamic security (as w/ title reg system).

Priorities at Common Law and Equity

Legal interest followed by legal interestL v L

Prior legal interest will have priority over the subsequent legal interest, following the principle “first in time is first in right”. The basis for this principle are the two Latin maxims : nemo dat quod non habet (one cannot give that which one does not have), caveat emptor (buyer beware).

Legal interest followed by equitable interestL v E

Prior legal interest will have priority over the subsequent equitable interest, subject to the caveat that the holder of the prior legal interest did not act fraudulently. Northern Countries of England Fire Insurance v Whipp (1884), England CA held that a registered mortgagee did not act fraudulently to induce Mrs. Whipp, the holder of an equitable interest in the property, to lend her money and therefore the registered mortgagee’s legal interest had priority over Mrs. Whipp’s equitable interest.

Equitable interest followed by legal interestE v L

Subsequent legal interest will have priority over the prior equitable interest provided that the holder of the prior legal interest was a bona fide purchaser for value, without notice of that prior equitable interest (three types of notice: express, implied, constructive). Rule applied by ONCA in Chippewas of Sarnia (though not clear if aboriginal title = a prior equitable or prior legal interest > if aboriginal title prior legal, first in time is first in right).Three Types of Notice:

1. Actual notice2. Imputed notice3. Constructive notice (the purchaser didn’t know, but ought to have

known given the circumstances, or ought to have made inquiries which would have led him to know)

Equitable interest followed by equitable interestE v E

Prior equitable interest will have priority over the subsequent equitable interest, following the principle “first in time is first in right” (provided that all other equities are equal, per Rice v Rice).

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Gifts In order to benefit from the bona fide purchaser for value rule (E v L), you must be a purchaser for value. If there is a prior equitable interest, and a party has acquired a subsequent legal interest by gift, the prior equitable interest has priority b/c the bf purchaser for value rule does not apply.

Two Stage Process for Transferring an Interest in Land

1. Contract for purchase and sale2. Transfer of interest in land (“closing date”)

Northern Counties of England Fire Insurance v Whipp (1884)A PRIOR LEGAL INTEREST HAS PRIORITY OVER A SUBSEQUENT EQUITABLE INTEREST UNLESS THE HOLDER OF THE PRIOR LEGAL INTEREST ACTED FRAUDULENTLY. Registered mortgagee did not act fraudulently to induce Mrs. Whipp, the holder of an equitable interest in the property, to lend her money > therefore registered mortgagee’s prior legal interest had priority over Mrs. Whipp’s subsequent equitable interest. [England CA]

“Security of Property Rights”,PA O’ConnorCONSTRUCTIVE NOTICE = IF PURCHASER DID NOT EXERCISE DUE DILIGENCE SEARCHING FOR PRIOR INTERESTS (PROOF OF TITLE 60 YRS BACK), PURCHASER DEEMED TO HAVE CONSTRUCTIVE NOTICE OF PRIOR INTERESTS. Constructive notice is an equitable doctrine, developed in the 17th cent. Meant to give purchasers an incentive to seek out information about prior interests. Allocating risk to purchasers (property as static, not dynamic security).

Chippewas of Sarnia Band v Canada (AG) (2000)EQUITABLE DOCTRINES OF LACHES, ACQUIESCENCE. EXCEPTION TO RIGID APPLICATION OF BONA FIDE PURCHASER FOR VALUE RULE: RULE WILL NOT BE RIGIDLY APPLIED WHERE DENIAL OF ABORIGINAL RIGHT IS “SUBSTANTIAL AND EGREGIOUS” (NOT HERE). Chippewas agreed to sell land to Cameron. Crown issued letters patent to Cameron, when in fact land had never been surrendered by Chippewas to the Crown (RP 1763). Land transferred hands many times in following 150 years. Then Chippewas disputed title to the patented lands. Crt said need to reconcile Chippewas’ rights with rights of third parties and public interest. Crt said it was reasonable for third parties to rely on Crown patent, “accepted by all as the basis for rights to real property and no purchaser would consider it necessary to go behind the patent to determine whether or not it had been validly granted”. Chippewas argued nemo dat quod non habet (Crown had nothing to grant, therefore Cameron patent could not convey fee simple in lands unencumbered by aboriginal title), and that aboriginal title was purely legal, not equitable right (Crt held equitable principles applied b/c Chippewas were themselves seeking an equitable remedy, a declaratory judgment). Present landowners argued in defence that they were bona fide purchasers for value. Crt held that “where the denial of the aboriginal right is substantial and egregious, a rigid application of the good faith purchaser for value defence would constitute an unwarranted denial of a fundamental right”. But here no such “substantial and egregious” denial of aboriginal right, therefore bona fide purchaser for value rule upheld in favour of present landowners. [ONCA]

“Aboriginal Title: The Chippewas of Sarnia”, J ReynoldsBONA FIDE PURCHASER FOR VALUE RULE IS NOT AN EXCEPTION TO NEMO DAT RULE. Reynolds critically discusses application of bona fide purchaser for value rule by ONCA in Chippewas of Sarnia v Canada > says this rule only applies where interest being defeated is a prior equitable interest (and if interest being given priority is a subsequent legal interest). Reynolds argues that bona fide purchaser for value rule is an exception to rule that property interests rank in order of creation (“first in time is first in right”) > but Reynolds argues bona fide purchaser for value rule not exception to nemo dat rule (one cannot give what one does not have). The Chippewas argued that their prior interest was purely legal, not equitable, but the court said aboriginal

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title is a sui generis property interest that is not strictly legal (the court treated the Chippewas’ aboriginal title like a prior equitable interest, not a prior legal interest > applying the bona fide purchaser for value rule). Chippewas is an example of case in which the courts misconstrued the common law priorities (the landowners arguably did not hold any legal interest at common law, because the Crown had nothing to transfer in the first place < nemo dat!).

Rice v Rice (1853) AS BETWEEN TWO PARTIES WITH EQUITABLE INTERESTS, IF THEIR EQUITIES ARE IN ALL OTHER RESPECTS EQUAL, FIRST IN TIME IS FIRST IN RIGHT. In a contest b/w parties holding equitable interests, crts will look at other factors to determine if there another reason for giving priority to one party over the other (e.g. nature and condition of their equitable interests, circumstances and manner of their acquisition, conduct of each party). Only where two parties’ equities are “in all other respects equal” will priority of time determine which party has priority. [England]

Practice Questions A: common law priorities

1. B contracts to transfer fee simple in X to C. B then receives a better offer from D, and contracts to transfer the interest to D. B has not transferred title in X either to C or D. Who has the better claim at CL?

2. B transfers fee simple in X to C. B then transfers the fee simple interest in X to D. Who has better claim?3. B transfers fee simple in X to C, in exchange for a loan (a mortgage) for half the value of the property. B

then transfers the remaining interest in X to D, in exchange for another loan for the remaining half of the value of the property. B defaults on loan payments, and the value of X ends up being insufficient to cover the value of the two loans. Who has the better claim at CL?

4. B contracts to sell fee simple in X to C, the parties to complete the transaction at a future date. B then receives a better offer from D, and transfers title to D. Who has the better claim at CL?

5. B contracts to sell fee simple in X to C, the parties to complete the transaction at a future date. B then transfers the fee simple in X to D, as a gift. Who has the better claim at CL?

1. There are two stages in the process of transferring an interest in land: (1) contract for purchase and sale; (2) transfer of the interest in land. Contract for purchase and sale gives rise to equitable interest. Legal interest does not vest with purchaser until the transfer of the interest in land on the closing date. C and D both hold equitable interests (B retains the legal interest) > E v E = first in time is first in right, provided equitable interests are equal. Therefore, C’s equitable interest (first in time) takes priority over D’s equitable interest (subsequent equitable interest).

2. C has the prior legal interest, D has a subsequent legal interest > L v L = first in time is first in right, and applying the nemo dat principle, C has the better claim b/c B had nothing to give D.

3. C holds a prior legal interest as the first mortgagee, and B retained the equitable right of redemption. B then transferred this equitable right of redemption to D, so D holds a subsequent equitable interest > L v E. As between a prior legal and a subsequent equitable interest, the prior legal interest will have priority (subject to the caveat that the holder of the prior legal interest must not have participated in fraud to induce the hold of the equitable interest to acquire that equitable interest).

4. C holds a prior equitable interest (arising from contract for purchase and sale; no legal interest yet b/c no transfer of land). D holds subsequent legal interest > E v L. As between a prior equitable and subsequent legal interest, holder of subsequent will have priority provided they are a bona fide purchase for value, without notice of the prior equitable interest. At CL, C can only bring a claim against B for breach of K.

5. C has a prior equitable interest (arising from contract for purchase and sale), and D has a subsequent legal

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interest. But D is not a bona fide purchaser for value, b/c B transferred fee simple in X to D as a gift! C has the better claim, because equity does not assist a volunteer (D, not a purchaser for value).

TITLE REGISTRATION

Policy choice in the title registration system: protecting the bona fide purchaser for value. This is a policy choice to provide dynamic security, an attempt to make it simpler and easier to transfer interest in land (shift from static security, protecting settled interest in land). Big step towards turning property into a fungible, transferrable commodity (rather than treating property solely as a source of socio-economic power). Lord Denning said: “In the development of our law, two principles have striven for mastery. The first is our protection of property: no one can give better title than he possesses. The second is for protection of commercial transactions: the person who takes in good faith and for value without notice should get good title.” SHIFT FROM STATIC TO DYNAMIC SECURITY > SHIFT FROM PROPERTY AS SOURCE OF SOCIO-ECONOMIC POWER TO PROPERTY AS A FUNGIBLE, TRANSFERRABLE COMMODITY.

Reallocation of risk by the title registration system: the title registration system reallocates risk in two ways, (1) by drawing a curtain on all past transactions, and (2) by curing all defects in interests in land. These two acts are embodied in the state guarantee set out in s. 23(2) of the Land Title Act, which provides that the registered owner of a fee simple interest is indefeasibly entitled to that estate in fee simple (= “conclusive proof at law and in equity”), though subject to certain conditions including the fraud exception at s. 23(2)(i) and the exception for leases that do not exceed 3 yrs w/ actual occupation at s. 23(2)(d).

Title registration provides a procedural veneer that gives us a mechanism for recording interests in land. Title registration does not create interest in land, it simply provides a mechanism for ordering interests in land.

Fee simple interest at the core of the title registration system: under the title registration system, the holder of the fee simple interest is the one who holds “title”. All other interests in land (e.g. lease, life estate, mortgage, easement) are registered against the fee simple interest as charges.

General Principles of Title Registration1. Registration Principle

An interest in land does not exist in law or in equity unless that interest is registered, per s. 20(1) of the Land Title Act. This provides that the title registry is everything.

Registration is effective as of the time of application for registration, per s. 37(1) of the LTA. Form A is the transfer instrument for land, per s. 185(1) of the LTA. With this transfer

instrument, only the transferor signs (whereas w/ K for purchase and sale, both the transferor and the transferee sign) > example of doc in this form = Douglas Treaties (only Chiefs signed).

2. Indefeasibility Principle The essence of title registration is the state guarantee that the person registered as a holder of

the fee simple interest is the holder of that interest (registration is conclusive proof at law and in equity that the registered owner is the holder of the fee simple interest), per s. 23(2) of LTA. This state guarantee pulls down the curtain, and cures all prior defects.

The indefeasibility principle only applies to fee simple interests, it does not apply to charges (lesser interests), per s. 26(1) of the LTA which provides that the holder of a charge is “deemed to be entitled” to that interest (not indefeasibly entitled; a charge holder’s interest gives rise to a presumption of entitlement that may be rebutted w/ evidence of fraud).

Also note, depending on the title registration system, indefeasibility may either be immediate (likely the case in BC) or deferred (for example, Ontario). In a system of deferred indefeasibility, the moment of indefeasibility is delayed until a purchaser is one step removed from the rogue/ forged instrument, as in Lawrence v Wright. In a system of immediate indefeasibility, the

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moment of indefeasibility occurs immediately upon registration of a fee simple interest (in BC, at the time of application for registration, per s. 37(1) of the LTA).

3. Abolition of Notice Principle The title registration system abolishes the common law doctrine of notice for prior unregistered

interests, per s. 29 of the LTA. At common law, if a purchaser had knowledge of a prior equitable interest, they would take their interest subject to that equitable interest; if a purchaser did not have knowledge of the prior equitable interest, they would take their interest unencumbered by that prior equitable interest, as per Taulk v Moxhay. Under the title registration system, even if a purchaser has notice of a prior unregistered interest, as the registered holder of the interest they are unencumbered by that prior unregistered interest.

4. Assurance Principle The title registration system includes an assurance fund to compensate people fraudulently

deprived of their interest in land as a result of the operation of the Act, per s. 296(2) of the LTA. To recover from the assurance fund, a person deprived of their interest would have to be able to recover their interest at common law.

“The Length of a Title Search in Ontario”, YoudanHISTORY OF TITLE SEARCHES, DEEDS REGISTRATION SYSTEM > PRIOR TO TITLE REGISTRATION SYSTEM. Prior to title registration system, proof of title facilitated by use of abstracts (summaries of all the documents, e.g. wills, original deeds, etc, relevant to vendor’s title). Purchasers needed to investigate root of title for 60 yr period. If equitable interest arose before 60 yr proof period, holder of legal interest could argue they lacked constructive notice of this interest (they exercised their due diligence in verifying good root of title back 60 yrs) so owned property free of third party’s prior equitable interest (bona fide purchaser for value, without notice). Then deeds registration systems established in 18th cent > purpose of deeds system was to minimize purchaser’s risk in land transactions > reallocating risk, away from purchasers. Deeds reg system encouraged owners of property interests to register their interests, so purchasers could rely on registry to determine if title registered was in fact valid. But deeds reg system did not guarantee the validity of registered title.

“Review of Greg Taylor, The Law of the Land”, HarrisDEFINING CHARACTERISTICS OF TITLE REGISTRATION SYSTEM. HISTORY OF TORRENS SYSTEM. Defining characteristics of title reg system: (1) title reg system “cures any defects in title”, guaranteeing that the person registered as holder of title is actually the holder of title, unlike like common law or deeds reg systems where holder of interest could always be subject to claim of third party wrongfully deprived of their interest; (2) title reg system abolishes common law doctrine of notice; (3) title reg system designed to simplify and facilitate transfers of interests in land. History of Torrens system: Title reg first established in South Australia in 1858, by Robert Richards Torrens. Colony of Vancouver Island passed Land Registry Act in 1860: first jurisdiction in Canada and second common law jurisdiction in the world to establish a title reg system. Initially, colony + BC (following 1866 union) had two-tiered title reg system = title holder acquired “absolute” title upon registration, but only acquired “absolute and indefeasible” title 5 yrs after registration [during first 5 yrs, title vulnerable to challenges from those w/ competing claims]. But two-tiered system abolished in 1921 > all registered interests became indefeasible from day one. Today: Que + Maritimes do not have title reg system.

Relevant Sections of Land Title Act

Land Title Act, s. 1Definitions: charge, indefeasible title, instrument, lease less than 3 yrs,

"charge" means an estate or interest in land less than the fee simple and includes(a) an estate or interest registered as a charge under section 179, and

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(b) an encumbrance;"indefeasible title" means

(a) a certificate of indefeasible title issued by the registrar under this Act or the former Act, at any time before August 1, 1983, and(b) that part of the information stored in the register respecting one title number, that is required under section 176 (2) to be contained in a duplicate indefeasible title;

"instrument" means(a) a Crown grant or other transfer of Crown land, and(b) a document or plan relating to the transfer, charging or otherwise dealing with or affecting land, or evidencing title to it, and includes, without limitation

(i) a grant of probate or administration or other trust instrument, and(ii) an Act;

"lease or agreement for lease for a term not exceeding 3 years if there is actual occupation under the lease or agreement" means a lease or agreement for lease for a term that, at its beginning, does not exceed 3 years if there is actual occupation under the lease or agreement, and, if an option or covenant for renewal is included in the lease or agreement, the option or covenant must not extend the total lease periods beyond 3 years;

Land Title Act, s. 20 REGISTRATION PRINCIPLE

An interest in land does not exist in law or in equity unless that interest is registered, per s. 20(1) of the Land Title Act. This is an embodiment of the registration principle underlying the title registration system, and provides that the title registry is everything.Unregistered instrument does not pass estate20 (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.(2) An instrument referred to in subsection (1) confers on every person benefited by it and on every person claiming through or under the person benefited, whether by descent, purchase or otherwise, the right

(a) to apply to have the instrument registered, and(b) in proceedings incidental or auxiliary to registration, to use the names of all parties to the instrument, whether or not a party has since died or become legally incapacitated.

(3) Subsection (1) does not apply to a lease or agreement for lease for a term not exceeding 3 years if there is actual occupation under the lease or agreement.

Land Title Act, s. 23(2) PRINCIPLE OF INDEFEASIBILITY + FRAUD EXCEPTION

Section 23(2) sets out the principle of indefeasibility for fee simple interests, providing that indefeasible title is “conclusive evidence at law and in equity” of ownership. This is the state guarantee, the essence of the title registration system, that pulls down the curtain and cures all prior defects. Section 23(2) also lists a series of exceptions to the rule that a person registered as a fee simple owner is indefeasibly entitled, including the fraud exception at s. 23(2)(i), and the exception for leases less than 3 yrs + actual occupancy at 23(2)(d).Fraud exception, s. 23(2)(i): if a person on title has participated in fraud, they are not indefeasibly entitled and their registered fee simple interest is vulnerable to a claim by the true owner who has been deprived of their interest as a result of the fraud.Lease exception, s. 23(2)(d): if a fee simple interest is subject to a unregistered lease for a period less than 3 years long (*option to renew must be factored in too) and the lessee is occupying the premises, the person registered on title as the holder of that fee simple interest holds their interest subject to that lease.Effect of indefeasible title23 (2) An indefeasible title, as long as it remains in force and uncancelled, is conclusive evidence at law and in equity, as against the Crown and all other persons, that the person named in the title as registered owner is indefeasibly entitled to an estate in fee simple to the land described in the indefeasible title, subject to the following:

(a) the subsisting conditions, provisos, restrictions, exceptions and reservations, including royalties, contained in the original grant or contained in any other grant or disposition from the Crown;(b) a federal or Provincial tax, rate or assessment at the date of the application for registration imposed or made a lien or that may after that date be imposed or made a lien on the land;

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(c) a municipal charge, rate or assessment at the date of the application for registration imposed or that may after that date be imposed on the land, or which had before that date been imposed for local improvements or otherwise and that was not then due and payable, including a charge, rate or assessment imposed by a public body having taxing powers over an area in which the land is located;(d) a lease or agreement for lease for a term not exceeding 3 years if there is actual occupation under the lease or agreement;(e) a highway or public right of way, watercourse, right of water or other public easement;(f) a right of expropriation or to an escheat under an Act;(g) a caution, caveat, charge, claim of builder's lien, condition, entry, exception, judgment, notice, pending court proceeding, reservation, right of entry, transfer or other matter noted or endorsed on the title or that may be noted or endorsed after the date of the registration of the title;(h) the right of a person to show that all or a portion of the land is, by wrong description of boundaries or parcels, improperly included in the title;(i) the right of a person deprived of land to show fraud, including forgery, in which the registered owner has participated in any degree;(j) a restrictive condition, right of reverter, or obligation imposed on the land by the Forest Act, that is endorsed on the title.

Land Title Act, s. 25.1 NEMO DAT PRESERVED FOR CHARGES, EXCEPTION FOR FEE SIMPLE INTERESTS

Preserving nemo dat rule for charges (consequence = the registration of a charge does not confer indefeasibility; the registration of a charge only gives rise to a rebuttable presumption of entitlement, rebuttable w/ evidence of fraud, per Credit Foncier, Island Realty, Gill v Bucholtz). But ss. 25.1(2) and 25.1(3) create an exception to nemo dat for fee simple interests acquired in good faith and for valuable consideration. This suggests BC = immediate indefeasibility system.Void instruments — interest acquired or not acquired25.1 (1) Subject to this section, a person who purports to acquire land or an estate or interest in land by registration of a void

instrument does not acquire any estate or interest in the land on registration of the instrument.(2) Even though an instrument purporting to transfer a fee simple estate is void, a transferee who

(a) is named in the instrument, and(b) in good faith and for valuable consideration, purports to acquire the estate,

is deemed to have acquired that estate on registration of that instrument.(3) Even though a registered instrument purporting to transfer a fee simple estate is void, a transferee who

(a) is named in the instrument,(b) is, on the date that this section comes into force, the registered owner of the estate, and(c) in good faith and for valuable consideration, purported to acquire the estate,

is deemed to have acquired that estate on registration of that instrument.

Land Title Act, s. 25(2)Protection of registered owner against actions for recovery of land25 (2) An action of ejectment or other action for the recovery of land for which an indefeasible title has been registered must not be commenced or maintained against the registered owner named in the indefeasible title, except in the case of

(a) a mortgagee or encumbrancee as against a mortgagor or encumbrancer in default,(b) a lessor as against a lessee in default, (c) [Repealed 2005-35-13.](d) a person deprived of land improperly included in an indefeasible title of other land by wrong description of boundaries or parcels,(e) 2 or more indefeasible titles having been registered under this Act in respect of the same land, the registered owner claiming under the instrument that was registered first,(f) a right arising or partly arising after the date of the application for registration of the title under which the registered owner claims, including, without limitation,

(i) the right of a purchaser claiming under a contract with the registered owner for the sale of the land, and(ii) the right of a beneficiary if the registered owner is a trustee, and

(g) a right arising under section 23 (2).

Land Title Act, s. 26 REGISTRATION OF CHARGES = “DEEMED TO BE ENTITLED”

Registered owner of a charge deemed to be entitled”, not indefeasibly entitled. Credit Foncier, Island Realty, Gill.Registration of a charge

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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, subject to the exceptions, registered charges and endorsements that appear on or are deemed to be incorporated in the register.(2) Registration of a charge does not constitute a determination by the registrar that the instrument in respect of which the charge is registered creates or evidences an estate or interest in the land or that the charge is enforceable.

Land Title Act, s. 27(3)Notice given by registration of charge27 (1) The registration of a charge gives notice, from the date and time the application for the registration was received by the

registrar, to every person dealing with the title to the land affected, of(a) the estate or interest in respect of which the charge has been registered, and(b) the contents of the instrument creating the charge so far as it relates to that estate or interest,

but not otherwise.(2) A payment made by a mortgagor under a registered mortgage, or by a purchaser under a registered agreement for sale or subagreement for sale, is not a dealing with the title to the land affected.(3) A transferee of a mortgage, or of a vendor's interest in an agreement for sale, takes subject to the equities and to the subsisting state of accounts between, respectively, mortgagor and mortgagee, or vendor and purchaser.

Land Title Act, s. 29(2) ABOLITION OF COMMON LAW DOCTRINE OF NOTICE, EXCEPT IN CASE OF FRAUD

Section 29(2) provides that notice is abolished except in the case of fraud. But not clear whether “fraud” refers the common law understanding of fraud (where fraud requires something more than notice, knowledge) or whether it refers to the Court of Equity’s understanding of fraud (where notice, knowledge is sufficient to amnt to fraud).Effect of notice of unregistered interest29 (1) For the purposes of this section, "registered owner" includes a person who has made an application for registration and becomes a registered owner as a result of that application.(2) Except in the case of fraud in which he or she has participated, a person contracting or dealing with or taking or proposing to take from a registered owner

(a) a transfer of land, or(b) a charge on land, or a transfer or assignment or subcharge of the charge,

is not, despite a rule of law or equity to the contrary, affected by a notice, express, implied, or constructive, of an unregistered interest affecting the land or charge other than

(c) an interest, the registration of which is pending,(d) a lease or agreement for lease for period not exceeding 3 years if there is actual occupation under lease or agreement, or(e) the title of a person against which the indefeasible title is void under section 23 (4).

Land Title Act, s. 37(1) REGISTRATION = TIME OF APPLICATIONRegistration effective from time of application37 (1) An instrument or application so registered is deemed to have been registered and to have become operative for all purposes in respect of the title, charge or cancellation claimed by the application for registration, and according to the intent of the instrument or application, as of the date and time when the application was received by the registrar.

Land Title Act, s. 197Registration of charges197 (1) On being satisfied from an examination of an application and any instrument accompanying it that the applicant is entitled to be registered as the owner of a charge, the registrar must register the charge claimed by the applicant by entering it in the register.(2) Despite subsection (1), the registrar may refuse to register the charge claimed if the registrar is of the opinion that

(a) a good, safeholding and marketable title to it has not been established by the applicant, or(b) the charge claimed is not an estate or interest in land that is registrable under this Act.

Land Title Act, s. 296(2) ASSURANCE FUND CLAIMSRemedies of person deprived of land296 (2) A person, in this Part referred to as the "claimant",

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(a) who is deprived of any estate or interest in land(i) because of the conclusiveness of the register, in circumstances where, if this Act had not been passed, the claimant would have been entitled to recover the land from the present owner, and(ii) in consequence of fraud or a wrongful act in respect of the registration of a person other than the claimant as owner of the land, and

(b) who is barred by this Act or by any other Act, or otherwise precluded from bringing an action(i) for possession, or any other remedy for the recovery of land, or(ii) for rectification of the register,

may, subject to subsections (3) and (4), proceed in court for the recovery of damages against the person by whose fraud or wrongful act the claimant has been deprived of the land.

Fraud & Indefeasible Title

Who holds title if there is fraud?

BC’s title registration system is designed to cure any defects in a fee simple interest upon registration. The principle of indefeasibility is set out in s. 23(2) of the Land Title Act, which provides that indefeasible title is “conclusive evidence at law and in equity” of fee simple ownership.

Prior to the 2005 amendments to the Land Title Act, it was not clear whether BC’s title registration system was one of immediate or deferred indefeasibility. In a system of deferred indefeasibility, the moment of indefeasibility is delayed until a purchaser is one step removed from the rogue/ forged instrument, as in Lawrence v Wright. In a system of immediate indefeasibility, the moment of indefeasibility occurs immediately upon registration of a fee simple interest. However, the 2005 amendments made clear in s. 25.1 of the LTA that BC’s title registration system was one of immediate indefeasibility. This means that if a bona fide purchaser for value acquires land from the registered holder of title who is a rogue, that bona fide purchaser for value is indefeasibly entitled to the land.

Subsection 25.1(1) sets out the nemo dat rule in statutory form, providing that “a person who purports to acquire land or an estate or interest in land by registration of a void instruments does not acquire any estate or interest in the land on registration of the interest”.

Subsections 25.1(2) and 25.1(3) then set out an exception to the nemo dat rule for bona fide purchasers for value of fee simple interests, providing that a bona fide purchaser for value who has acquired title on the basis of a void transfer document is rebuttably presumed to hold the fee simple interest (“deemed to have acquired that estate”). Importantly, there is nothing to rebut this presumption for fee simple interests in ss. 25.1(2) or 25.1(3). Thus, s. 25.1 suggests that BC is operating within an immediate indefeasibility system.

Section 23(2), which sets out the principle of indefeasibility, also lists a series of exceptions to the rule that a person registered as a fee simple owner is indefeasibly entitled, including the fraud exception at s. 23(2)(i), and the exception for leases less than 3 yrs + actual occupancy at 23(2)(d).

Innocent party (true owner of title)+

ROGUE (poses as true owner, forges true owner’s signature on transfer document+

Innocent party (bona fide purchaser for value)

Can the true owner recover title from the bf purchaser for value? In a system of immediate indefeasibility : no, the true owner cannot recover b/c the bona fide

purchaser for value is immediately indefeasibly entitled upon application for registration. Unless that purchaser for value participated in fraud, the true owner cannot rely on fraud exception in. s. 23(2)(i).

o Can the true owner bring a claim against the assurance fund, per s. 296(2) of LTA? First the

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true owner will need to exhaust their remedies against the rogue (suing the rogue along with the Attorney General); once claim against rogue exhausted, true owner will be able to make a claim against the assurance fund (requirements met).

Deprived of interest of land: yes. Because of conclusiveness of the register: yes. Would be entitled to recover absent a title registration system: under CL priorities system,

true owner has prior legal interest and bf purchaser for value has subsequent legal interest; L v L = first in time is first in right, based on the two Latin maxims nemo dat quod non habet (one cannot give that which one does not have), caveat emptor (buyer beware) > the rogue had nothing to transfer is the first place).

Deprived as a result of fraud or an unwrongful act: yes.

In a system of deferred indefeasibility : yes, the true owner can recover at this moment b/c the moment of indefeasibility is delayed until one step removed. Added party: if the bf purchaser for value contracts tell sell the fee simple interest to a third party (another bf purchaser for value) and at this point the true owner discovers the fraud/forgery, the true owner can still recover b/c the moment of indefeasibility is delayed until the third party actually registers the Form A (if only K for sale and purchase, no transfer has actually taken place yet); however, if the true owner discovers the fraud/forgery after the third party (bf purchaser for value, one step removed) registers their interests in the title registry, the true owner cannot recover their interest b/c this third party is now indefeasibly entitled.

o If the true owner recovers title, can the first bf purchaser for value bring a claim against the assurance fund, per s. 296(2) of LTA? No, b/c the bf purchaser for value does not meet the requirements to make a claim for the assurance fund, particularly b/c they would not be able to recover absent a title registration system.

Deprived of interest of land: yes. Because of conclusiveness of the register: yes. Would be entitled to recover absent a title registration system: under CL priorities system,

true owner has prior legal interest and bf purchaser for value has subsequent legal interest; nemo dat quod non habet > the rogue had nothing to transfer to the bf purchaser for value.

Deprived as a result of fraud or an unwrongful act: yes.

Requirements to bring claim against assurance fund, under s. 296(2) of Land Title Act

1. Deprived of interest of land2. Because of conclusiveness of the register3. Would be entitled to recover absent a title registration system (at common law)4. Deprived as a result of fraud or an unwrongful act5. Barred from bringing an action to recover land, s. 25(2).

Legal interest followed by legal interest[L v L]

Prior legal interest will have priority over the subsequent legal interest, following the principle “first in time is first in right”. The basis for this principle are the two Latin maxims : nemo dat quod non habet (one cannot give that which one does not have), caveat emptor (buyer beware).

Legal interest followed by equitable interest[L v E]


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Equitable interest followed by legal interest[E v L]


Actual notice Imputed notice Constructive notice (purchaser didn’t know, but ought to have known given the

circumstances; ought to have made inquiries which would have led him to know)

Equitable interest followed by equitable interest [E v E]


“Indefeasible Title in British Columbia: A Comment on the Nov 2005 Amendments”, HarrisTITLE REG SYSTEM PROVIDES DYNAMIC SECURITY, PROTECTING “THE SANCTITY OF THE TRANSACTION”, FACILITATING TRANSFER OF PROPERTY, PROTECTING THE PERSON REGISTERED ON TITLE AT THE EXPENSE OF THE PERSON WRONGFULLY DEPRIVED OF THEIR INTEREST IN LAND (PROVIDED PERSON ON TITLE DID NOT ACQUIRE THEIR INTEREST VIA FRAUD). At common law, Latin maxim nemo dat quod non habet (no one can give that which they do not have) is the foundational rule for the transfer of property interests = nemo dat places the onus on the purchaser to confirm the vendor’s title (purchaser needed to trace title back 60 yrs) > common law protected settled interests over purchaser’s interests, even if a purchaser acquired their interest in good faith (if purchaser failed to exercise due diligence in verifying if root of title was good going back 60 yrs, deemed to have constructive notice of prior interests, and would hold interest subject to the prior interests). But in title reg system, principle of indefeasibility secures registered owner’s interest unless that person participated in fraud to acquire the interest. Harris says: “Title registration systems protect the sanctity of the transactions; they provide dynamic security”. Title reg system is designed to facilitate the transfer of property, and protects the person registered on title at the expense of the person wrongfully deprived of their interest in the land. Two types of indefeasibility in title reg systems: (1) immediate indefeasibility: person who acquires land as bona fide purchaser for value holds indefeasible title even if they acquire their interest through a forged instrument, directly from a rogue (purchaser is immune from any challenge from the true owner); (2) deferred indefeasibility: indefeasible title is delayed until the person who acquires interest is one step removed from a rogue or forged instrument. What type of system does BC have? When colonial govt introduced title registration in 1860s, not clear whether system was one of deferred or immediate indefeasibility. In Nov 2005, BC made significant amendments to Land Title Act > these amendments suggest that BC now operates under a system of deferred indefeasibility. [MORE DISCUSSION ABOUT RATIONALE]

Lawrence v Wright (2007)CASE DISCUSSING ALLOCATION OF RISK (BUT NOTE: IN CONTEXT OF INDEFEASIBILITY OF MORTGAGES, WHICH DOESN’T APPLY TO BC > FEE SIMPLE SUBJECT TO STATE GUARANTEE). DEFERRED INDEFEASIBILITY = “INTERMEDIATE” OWNER (WHO ACQUIRES THEIR INTEREST FROM A ROGUE) IS VULNERABLE TO A CLAIM FROM THE “TRUE” OWNER (DEPRIVED OF THEIR INTEREST BY THE ROGUE); BUT ANY SUBSEQUENT “DEFERRED” OWNER (1+ STEP REMOVED FROM ROGUE) ACQUIRES INDEFEASIBLE TITLE. Susan lived in her home, encumbered by $120k mortgage. Then a rogue, posing as Susan, sold the home to another rogue (Thomas Wright) for $318k. Wright got a mortgage from Maple Trust (unaware of any fraud), and Maple Trust registered its charge. At common law, Maple Trust’s mortgage would be void b/c of nemo dat (rogue Thomas

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Wright had not good title to give Maple Trust). In title registration system under system of deferred indefeasibility, Maple Trust’s interest is also subject to Susan’s claim (true owner) b/c Maple Trust acquired its interest directly from the rogue (“deferred” owner/encumbrancer). Summary of law: under ON’s Land Title Act, a party (“intermediate owner”) who acquires an interest directly from a rogue does not have indefeasible title > their interest is subject to a claim from the true owner [b/c the intermediate owner had an opportunity to avoid the fraud]. However, any subsequent purchaser (“deferred owner”) who takes indefeasible title = w/o notice of fraud, deferred owner is bona fide purchaser for value. True owner (deprived of their interest by the rogue) can only bring claims against the rogue and the intermediate owner, not against the deferred owner.

Policy choice b/w deferred and immediate indefeasibility, discussed by ONCA in Lawrence v Wright Policy choice moving from deed to title registration system: protecting the sanctity of land

transactions, and protecting the purchaser in order to encourage, facilitate, and make cheaper and simpler transfers of land (land as an increasingly fungible commodity).

Maple Trust argued for immediate indefeasibility framework, allocating risk away from a purchaser, which is a core goal of all title registration systems.

Susan Lawrence argued for deferred immediate indefeasibility b/c a purchaser dealing w/ a rogue is in the best position to prevent fraud (better than the true owner, who is totally removed from the rogue).

In this case, the court decided that Ontario’s act was open to both interpretations but that the system of deferred indefeasibility was the better choice (in the context of mtgs) b/c there is little a homeowner can do to avoid fraud and a system of deferred indefeasibility encourages lenders to be vigilant, allocating the risk of fraud to the party who had the opportunity to avoid fraud.

KEY = DISCUSSION ABOUT ALLOCATING RISK! (discussion in this case applied to mortgages: the question was whether a bf encumbrancer who dealt

directly with a rogue held a valid interest)

Land Act, s. 54Registration of Crown grants.Delivery and registration of Crown grants54 (1) A Crown grant issued after April 5, 1968 for land sold or for the issue of which provision is made under this Act or any other Act, general or special, must, on its issue, be transmitted to the proper land title office for registration.(2) If the registrar is satisfied that the boundaries of the land are sufficiently defined by the description, the registrar must

(a) register the title granted in the register, subject to the provisions of the grant, in the name of the grantee, without application for registration, and(b) give notice of the registration to the grantee.

(3) [Repealed 2004-66-56.](4) A Crown grant issued before April 6, 1968 is registrable under the law in force immediately before that date, but the fees for registration are those currently applicable and, on registration, the grantee is entitled to become the registered owner of the indefeasible title to the land.

Registration of Charges

Is the registered charge valid?Case Registration of Charges Outcome & Rule

Credit Foncier (1963) BCCA

Registered fee simple owner = the Bennetts. Rogue registered forged mortgage against the

Bennetts’ property. Transferred mtg to Stuart. Stuart registered charge (acquired mortgage

from rogue in good faith, relying on the registry). Credit Foncier registered charge (acquired

mortgage from Stuart in good faith, relying on

Is Credit Foncier’s registered charge valid? No. Mtg created by void instrument. Credit Foncier’s interest subject to Bennetts’ claim.A registered owner of a charge is only “deemed to be entitled”, per s. 26 of the current LTA. This provision gives rise to a rebuttable presumption of entitlement,

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the registry).ORIGINAL CHARGE FORGED BY A ROGUE. Two innocent parties on either side of rogue.

which can be rebutted with evidence of fraud (with evidence that charge was created with a void instrument).

Island Realty (1988) BCCA

Registered fee simple owner = Park Meadow. Park Meadow granted first mortgage to Imperial

Life. Imperial Life registered its charge. Park Meadow granted second mortgage to Island

Realty. Island Realty registered its charge. Park Meadow forged the discharge of Island

Realty’s mortgage (= fraudulent discharge). Park Meadow granted third mortgage to Almont.

Almont registered its charge, thinking it was the second mortgagor (b/c of forged discharge).

INSTRUMENT DISCHARGING MORTGAGE FORGED. NO INSTRUMENTS TRANSFERRING CHARGE FORGED. CHARGE ACQUIRED FROM NON-FRAUDULENT REGISTERED HOLDER OF TITLE.Rogue forged discharge of second mortgage.

Is Island Realty’s fraudulently discharged mortgage have priority over Almont’s mortgage? No.If a registered charge is acquired bona fide and for value from the registered fee simple owner, that charge is valid in the absence of a forged transfer instrument.The presumption of entitlement for a charge, considered in Credit Foncier, is only rebutted where one of the charge’s transfer instruments was forged (where there is a forgery in the chain of title creating the charge). If a forgery is outside the chain of title creating a charge, fraud will not rebut the presumption in s. 26 b/c fraud not part of the chain of title that created the charge.Can Island Realty recover from assurance fund? Yes. Island Realty had prior equitable, Almont had subsequent equitable > first in time is first in right.

Gill v Bucholtz(2009) BCCA

Registered fee simple owner = Amritpal Gill. Rogue forged transfer of property to Gurjeet

Gill, also a rogue. Gurjeet Gill became the registered fee simple owner, acquiring title through fraud.

Gurjeet Gill granted mortgage to Bucholtz’ (acquired mortgage from rogue in good faith, relying on the registry).

Gurjeet Gill granted a second mortgage to Company (acquired mortgage from rogue in good faith, relying on the registry).

CHARGE ACQUIRED FROM A ROGUE WHO WAS THE REGISTERED HOLDER OF FEE SIMPLE BUT WHO ACQUIRED TITLE VIA FRAUD.Two innocent parties on either side of rogue.

Were Bucholtz’ and Company’s mortgages valid charges against A Gill’s title? No.Land Title Act preserves the nemo dat rule with respect to charges, by virtue of s. 25.1. Where the registered holder of a charge has relied on the registry and dealt in good faith from the registered owner, but that registered owner is a rogue (rogue acquired title through fraud), the holder of the charge has no valid interest b/c rogue had nothing to give in the first place. Registering a charge does not cure any defects in that charge. Title holders can only give what they validly hold; if they hold title b/c of fraud, they have nothing to give.Can the Bucholtz’ or the Company recover from the assurance fund? No. They would not be able to recover at common law b/c of nemo dat. Paid out by title insurance.

Requirements to bring claim against assurance fund, under s. 296(2) of Land Title Act

1. Deprived of interest of land2. Because of conclusiveness of the register3. Would be entitled to recover absent a title registration system (at common law)4. Deprived as a result of fraud or an unwrongful act5. Barred from bringing an action to recover land, s. 25(2).

Legal interest followed by Prior legal interest will have priority over the subsequent legal interest, following the

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legal interest [L v L] principle “first in time is first in right”. Basis for this principle are 2 Latin maxims : nemo dat (one cannot give that which one does not have), caveat emptor (buyer beware).

Legal interest followed by equitable interest[L v E]


Equitable interest followed by legal interest[E v L]


Actual notice Imputed notice Constructive notice (purchaser didn’t know, but ought to have known given

circumstances; ought to have made inquiries which would have led him to know)

Equitable interest followed by equitable interest [E v E]


Credit Foncier v Bennett (1963) REGISTERED OWNER OF A CHARGE IS “DEEMED TO BE ENTITLED”, NOT INDEFEASIBLY ENTITLED. LANGUAGE OF ACT GIVES RISE TO REBUTTABLE PRESUMPTION OF ENTITLEMENT FOR CHARGES (REBUTTABLE W/ EVIDENCE OF FRAUD). The Bennetts were registered fee simple owners of a property in Vancouver. A rogue registered a fraudulent mortgage against the Bennetts’ property, and this mortgage was assigned from the rogue to Stuart, a real estate and mortgage broker. Stuart registered his charge. Stuart then assigned his interest to Credit Foncier. Credit Foncier registered its charge. Then Credit Foncier sought payments towards their mortgage from the Bennetts. Sheppard JA found Act’s provision that a registered owner of charge “shall be deemed to be entitled” gives rise to a rebuttable presumption of entitlement, not an irrebutable (indefeasible) presumption of entitlement. [BCCA, Sheppard JA]

Canadian Commercial Bank v Island Realty (1988) THE PRESUMPTION OF ENTITLEMENT FOR A CHARGE, CONSIDERED IN CREDIT FONCIER, IS ONLY REBUTTED WHERE ONE OF THE CHARGE’S TRANSFER INSTRUMENTS WAS FORGED. If a registered charge is acquired bona fide and for value from the registered fee simple owner, that charge is valid in the absence of a forged transfer instrument.

Gill v Bucholtz (2009)LAND TITLE ACT PRESERVES THE NEMO DAT RULE FOR REGISTERED CHARGES. IF A CHARGE WAS ACQUIRED BONA FIDE AND FOR VALUE FROM A ROGUE (FRAUDULENTLY REGISTERED AS FEE SIMPLE OWNER), THE HOLDER OF THE CHARGE DOES NOT HAVE A VALID INTEREST. Where the registered holder of a charge has relied on the registry and dealt in good faith from the registered owner, but that registered owner is a rogue (rogue acquired title through fraud), the holder of the charge has no valid interest b/c rogue had nothing to give in the first place.

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“Finding Nemo Dat in the Land Title Act”, Harris & MickelsonINDEFEASIBILITY AND CHARGES AFTER GILL. COMMON LAW PRINCIPLE OF NEMO DAT STILL APPLIES UNDER THE LAND TITLE ACT FOR ALL INTERESTS IN LAND LESS THAN FEE SIMPLE (CHARGES). One of the results of Gill will likely be increased use of title insurance, because the holders of charges are subject to the claim of a person wrongfully deprived of their fee simple interest, even if the holder of a charge acquired their interest from the registered holder of title. Another possible outcome from Gill is a larger destabilizing effect on the title registration system = a diminishment of public confidence. Achieving the goal of facilitating transfer of interests in land requires public confidence in the title registration system. Public confidence in the system is established primarily through the state guarantee of title in s. 23(2) of the Land Title Act, the principle of indefeasibility for registered fee simple interests acquired in good faith and for value. But Gill confirms that there is no state guarantee for charges. Before Gill, holders of charges could at least benefit from the state guarantee when they dealt with the registered holder of the fee simple interest, per Island Realty. But after Gill, holders of charges cannot have the same confidence because even if they acquired their interest from the registered holder of the fee simple interest, their charge might actually be void if the registered holder is a rogue. Harris & Mickelson’s proposed solutions: amend LTA to enhance protection for charge holders, either extending indefeasible title to mortgages or compensating mortgagees for losses b/c of fraud from the assurance fund. Another solution: just more title insurance?

Notice of Prior Unregistered Interest Common law doctrine of notice: if a person takes a legal interest without notice of a prior equitable interest, they take that interest unencumbered by the prior equitable interest; if a person takes a legal interest with notice of a prior equitable interest, they take that interest subject to the prior equitable interest; this principle was articulated in Tulk v Moxhay, in the context of notice of a restrictive covenant.

Notice in the Title Registration System: the title registration system abolished the common law doctrine of notice via s. 29(2), except in the case of fraud. But it is not clear whether “except in the case of fraud” in s. 29(2) refers to the concept of fraud understood by the Courts of Equity (where notice or knowledge is sufficient to amount to fraud), or the concept of fraud understood by common law courts (where there must be something more than mere notice or knowledge, like deception, an intent to deceive, or some other clear fraudulent conduct, in order to amount to fraud).

Holt Renfrew & Co v Henry Singer Ltd (1982)KNOWLEDGE OF PRIOR UNREGISTERED INTEREST IS NOT SUFFICIENT TO MEET TEST FOR FRAUD (APPLYING CL UNDERSTANDING OF FRAUD = MORE THAN MERE NOTICE, KNOWLEDGE). Thompson & Dynes owned a building, which was leased to Holt Renfrew. After several renewals, HR signed a 17 yr lease which was never registered. In 1979, Singer offered to buy the building and the sale documents stated that the sale was subject only to those encumbrances listed on the certiticate of title (HR’s 17 yr lease was not there). After acquiring the building, Singer immediately registered an interest to try to defeat HR’s unregistered 17 yr lease > Singer’s charge got priority over HR’s charge (once HR realized what had happened and registered its lease). Singer was a purchaser for value who had prior notice of HR’s lease. One of the purposes of the title registration system is to abolish the common law doctrine of notice = even if a bona fide purchaser for value takes a legal interest with notice of a prior unregistered interest, they are not subject to the prior unregistered interest. The Court held that fraud requires something than simply knowledge (“notice” plus), “dishonesty of some sort, must be shown”. Majority found there was no evidence of misrepresentation, so lack of proof of fraud > but Singer’s charge was nevertheless fatally flawed, so did not take priority over HR’s lease. [ABCA]

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Alberta (Ministry of Forestry, Lands and Wildlife) v McCulloch (1991)KNOWLEDGE OF PRIOR UNREGISTERED INTEREST ALONE SUFFICIENT TO MEET TEST FOR FRAUD (APPLYING EQUITABLE UNDERSTANDING OF FRAUD = NOTICE, KNOWLEDGE SUFFICIENT). Millsite land was sold to McCulloch, but govt retained the option to repurchase and this option (a charge) was registered. But then there was a mistake, and the govt’s charge was accidentally discharged (govt was left with a non-registered prior equitable interest). As soon as McCulloch became aware of the error, he transferred the millsite to a numbered company, which he was also the director of. McCulloch clearly had notice of the govt’s unregistered interest. Court found that McCulloch’s purpose in transferring the property “to himself” was to defeat the govt’s unregistered equitable interest, and McCulloch’s knowledge in this instance was sufficient to amount to fraud. [ABQB]

*Note: Alberta’s Land Title Act has a provision that states that “knowledge that any trust or unregistered interest is in existence shall not itself be imputed as fraud” > expressly saying knowledge is not sufficient to amount to fraud. But BC doesn’t have similar provision to bring clarity to meaning of fraud in s. 29(2) LTA.

Is a purchaser’s notice of a prior unregistered interest sufficient to amount to fraud under s. 29(2)?

1. First, look at what type of notice the purchaser had of the prior unregistered interest.a. Express notice? If a purchaser had express notice of the prior unregistered interest, courts will

be more likely to construe the purchaser’s notice as “fraud” under s. 29(2).b. Implied notice?c. Constructive notice? (should have known; would have known had they made inquiries) If a

purchaser simply had constructive notice of the prior unregistered interest, courts will be less likely to construe the purchaser’s notice as “fraud” under s. 29(2).

2. Next, look at when the purchaser had notice of the prior unregistered interest.a. If the purchaser had notice of the prior unregistered interest during negotiations/before the

contract for purchase and sale was finalized, courts will be more likely to construe the purchaser’s notice as “fraud” under s. 29(2).

b. If the purchaser did not have notice of the prior unregistered interest until after the contract for purchase and sale was finalized (before the transfer of title), courts will be less likely to construe the purchaser’s notice as “fraud” under s. 29(2).

3. Finally, consider as a whole where the purchaser’s notice was sufficient to amount to “fraud”.a. Should the common law definition of fraud apply? Knowledge of the prior unregistered

interest is not sufficient, as in Alberta’s land title act and the case Holt Renfrew v Singer. Something more than knowledge is required to amount to “fraud”, for example some dishonesty or misrepresentation. Example of BC case where something more than constructive notice was required: In Szabo v Janeil (2006), the BCSC held that the purchasers’ constructive notice of an unregistered pipeline easement was not sufficient to amount to fraud, and therefore purchasers did not acquire title subject to the easement (court noted the purchasers did nothing “sufficiently dishonest to deprive them of the protection of s. 29”). In BC, it appears courts becoming willing to apply the CL defn of fraud, rather than the equitable defn.

b. Should the equitable definition of fraud apply? Knowledge of the prior unregistered interest is sufficient to constitute fraud. ***Problem: the equitable definition of fraud seems to undo what BC’s title registration system is trying to achieve in s. 29(2), doing away with the common law doctrine of notice. Possibility: if a purchaser has express notice of the prior unregistered, before the contract for purchase and sale was finalized, a BC court might be willing to stray from their approach in Szabo v Janiel (which involved constructive notice, not express notice, and apply the equitable definition of fraud, rather than common law defn.

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Title Registration, Aboriginal Title and Non-Proprietary Interests

Skeetchestn Indian Band v. British ColumbiaABORIGINAL TITLE IS NOT A REGISTERABLE INTEREST UNDER THE LAND TITLE ACT > ABORIGINAL GROUPS CANNOT REGISTER CAVEATS PENDING THE RESOLUTION OF ABORIGINAL TITLE CLAIMS. ABORIGINAL TITLE IS AN INTEREST IN LAND, PER THE SCC IN DELGAMUUKW, BUT NOT AN INTEREST IN LAND W/IN MEANING OF S. 215(1) OF THE LAND TITLE ACT. Relying on SCC’s decision in Delgamuukw, the Skeetchestn Indian Band claimed aboriginal title to certain lands within the Kamloops area (including Kamloops lake and golf course) and sought to register a caveat, or certificate of lis pendens, pending the resolution of their claim. Under s. 216 of the LTA, once a caveat is registered, “the registrar must not make any entry in the register that has the effect of charging, transferring or otherwise affecting the land described in the certificate until registration of the certificate is cancelled” in accordance with the LTA. But Southin JA found that the Band could not register a caveat based on their aboriginal title claim in the land title registry. Southin JA said: there is nothing in the legislative history of our province, “up to and including the enactment in 1978 of the statute now in issue,” that warrants the conclusion that the BC Legislature intended that aboriginal title be registerable under the title registration. Why? Because when the title registration system was set up, the Legislature did not conceive of including aboriginal title in the land title registration system.[BCCA]

Relevant sections of Land Title Act : ss. 31, 37(1), 215(1), 216, 282(1), 288, 293

Land Title Act, s. 31If a caveat has been lodged or a certificate of pending litigation has been registered against land, they will have priority over any other subsequently registered interests in the land.Priority of caveat or certificate of pending litigation31 If a caveat has been lodged or a certificate of pending litigation has been registered against the title to land,

(a) the caveator or plaintiff, if that person's claim is subsequently established by a judgment or order or admitted by an instrument duly executed and produced, is entitled to claim priority for that person's application for registration of the title or charge so claimed over a title, charge or claim, the application for registration, deposit or filing of which is made after the date of the lodging of the caveat or registration of the certificate of pending litigation, and(b) if proof of service of notice of claim to priority on the subsequent applicant is provided to the registrar before registration is effected, the registration of the title or charge claimed by the caveator or plaintiff relates back to and takes effect from the time of the lodging of the caveat or registration of the certificate of pending litigation, and that time, as well as the time of the application for registration of the title or charge so claimed, must be endorsed on the register.

Land Title Act, s. 37(1)If the litigation or the claim underlying the caveat is resolved, the interest in question is deemed to be registered from the date that the caveat or certificate of pending litigation was filed.Registration effective from time of application37 (1) An instrument or application so registered is deemed to have been registered and to have become operative for all purposes in respect of the title, charge or cancellation claimed by the application for registration, and according to the intent of the instrument or application, as of the date and time when the application was received by the registrar.

Land Title Act, s. 215(1)Registration of certificate of pending litigation in same manner as charge215 (1) A person who has commenced or is a party to a proceeding, and who is

(a) claiming an estate or interest in land, or(b) given by another enactment a right of action in respect of land,

may register a certificate of pending litigation against the land in the same manner as a charge is registered, and the registrar of the court in which the proceeding is commenced must attach to the certificate a copy of the pleading or petition by which the proceeding was commenced, or, in the case of a certificate of pending litigation under Part 5 of the Court Order Enforcement Act, a copy of the notice of application or other document by which the claim is made.

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Land Title Act, s. 216Effect of registered certificate of pending litigation216 (1) After registration of a certificate of pending litigation, the registrar must not make any entry in the register that has the effect of charging, transferring or otherwise affecting the land described in the certificate until registration of the certificate is cancelled in accordance with this Act.(2) Subsection (1) does not apply to the lodging of a caveat or to the registration of

(a) an indefeasible title or a charge, if the instrument supporting the application is expressed to be subject to the final outcome of the proceeding,(b) an indefeasible title or a charge in respect of which the applicant, in writing,

(i) elects to proceed to registration subject to the final outcome of the proceeding, and(ii) authorizes the registrar to register the title or charge claimed subject to the certificate of pending litigation,

(c) a priority or postponement agreement,(d) an assignment of a charge, if the charge was registered before the certificate of pending litigation was registered,(e) a sublease, if the lease from which it is derived was registered before the certificate of pending litigation was registered, or(f) a certificate of judgment, order, notice, claim of lien under the Builders Lien Act, certificate of pending litigation or any other involuntary charge.

(3) Registration under subsection (2)(a) does not constitute a determination by the registrar that what was registered is not affected by the final outcome of the proceeding, and(b) is subject to the final outcome of the proceeding if what was registered is affected by that outcome.

Land Title Act, s. 282(1)If you have an interest that you cannot yet register, e.g. a K for purchase and sale, which is not the transfer interest, but you want to put the world on notice that you have this K for purchase and sale, you can register a caveat.Lodging caveat282 (1) A person, in this Act referred to as the "caveator", claiming

(a) under an unregistered instrument which is incapable of immediate registration,(b) by operation of law, or(c) otherwise,

to be entitled to land the title to which is registered under this Act, may by leave of the registrar, granted on terms, if any, the registrar may consider proper, lodge a caveat with the registrar prohibiting registration of a dealing with the land either absolutely or in the manner or to the extent expressed in the caveat.(2) A committee or the Public Guardian and Trustee acting under the Patients Property Act may lodge a caveat with the registrar if the committee or Public Guardian and Trustee certifies

(a) that he or she has been appointed committee or is the committee under the Patients Property Act, and(b) that the land of a patient is or may be endangered.

(2.1) An attorney acting under an enduring power of attorney may lodge a caveat with the registrar if the attorney certifies(a) that the attorney has the authority to act as attorney under Part 2 of the Power of Attorney Act, and(b) that the land of the person for whom the attorney is acting is or may be endangered.

(3) Section 293 does not apply to a caveat lodged under subsection (2), but the registrar may withdraw the caveat(a) on receiving a withdrawal notice under section 290, or(b) on application by any person, if the registrar considers it proper to do so.

Land Title Act, s. 288Once a caveat is filed, the caveat “freezes” what happens in the land title registration system. If something else is registered, it is subject to the caveat (subject to the resolution of the claim in the caveat).Effect of caveat288 (1) As long as a caveat lodged with the registrar remains in force, the registrar must not

(a) register another instrument affecting the land described in the caveat, unless the instrument is expressed to be subject to the claim of the caveator, or(b) deposit a plan of subdivision or otherwise allow any change in boundaries affecting the land described in the caveat, unless consented to by the caveator.

(2) An instrument expressed to be subject to the claim of the caveator may be registered or deposited, unless the claim of the

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caveator, if successful, would, in the opinion of the registrar, destroy the root of title of the person against whose title the caveat has been lodged.

Land Title Act, s. 293A caveat is just a temporary notice mechanism. A caveat expires after 2 months (e.g. time between agreeing to K for purchase and sale, and time of registering the Form A).Lapse of caveat293 (1) A caveat lodged under this Act lapses and ceases to affect the title to land after the expiration of 2 months after the date it was lodged with the registrar, unless within that period the caveator commences an action to establish the caveator's title to the estate or interest claimed and registers a certificate of pending litigation.(2) Despite subsection (1), if a caveatee, in accordance with the caveat serves, at least 21 days before the expiry of the 2 months referred to in subsection (1), a notice in the form approved by the director on the caveator or the caveator's solicitor or agent filing the caveat, as the case may be, to withdraw the caveat or take proceedings in court to establish the claim made in the caveat, the caveat lapses and ceases to affect the caveatee's title to the land after the expiration of 21 days after the date of service, unless within the 21 day period the caveator commences an action to establish the caveator's title to the estate or interest claimed and registers a certificate of pending litigation.(3) This section does not apply to a caveat lodged by the registrar.

Brainstorm Answer the question “WHY!?” Set out law, cite cases and topics as examples, and say what I think about. WHY.

1. Land as an increasingly fungible commodity Justifications for increasing fungible nature of property: personhood justification (people should be free

to do what they want with their property), and economic justification (economically efficiency > private property is best able to distribute property most efficiently).

History : History of property law can be characterized as a tension between two competing sources. On the one hand, land and relationships to land are a source of social and political order and stability > the law of property established a particular social order (relationships between people in relation to things). On the other hand, property as a transferable, tradable commodity embedded in a marketplace > freedom to do with property as you please. Tension between generations. Seats in the House of Lords was based on land ownership.

Improper restraint on alienation : conditions void if improper restraint on alienability. Reflects tension b/w desire of property holder to fetter subsequent uses of property, desire of present owner to be as free as they can to do as they please w/ the property. A push for removing fetters as land transforms into an increasingly fungible commodity > push towards free alienability and transferability, away from restraints on alienation. (T2, p 12)

Switch from deeds to title registration system : This is a policy choice to provide dynamic security, an attempt to make it simpler and easier to transfer interest in land (shift from static security, protecting settled interest in land). Big step towards turning property into a fungible, transferrable commodity (rather than treating property solely as a source of socio-economic power). Lord Denning said: “In the development of our law, two principles have striven for mastery. The first is our protection of property: no one can give better title than he possesses. The second is for protection of commercial transactions: the person who takes in good faith and for value without notice should get good title.” SHIFT FROM STATIC TO DYNAMIC SECURITY > SHIFT FROM PROPERTY AS SOURCE OF SOCIO-ECONOMIC POWER TO PROPERTY AS A FUNGIBLE, TRANSFERRABLE COMMODITY. (T2, p 39)

Push for private property on reserves: There has been some push to open up these certificates of possession, or at least to entrench the idea of private property on reserve, to construct interests that look more life fee simple. Argument: allow band member capacity to transfer their interest, so the property becomes a fungible, transferrable interest that becomes useful as a commodity, and as a security for a loan. This is very controversial within First Nations community, because this is seen as a way of breaking up the land, of breaking up reserves (b/c control of the land could potentially shift elsewhere). At the end of the 19th century, the Dawes Act in the US allowed for the sale of reserve land, and much reserve land was lost.

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The economic justification is also central to the debate over whether and how the federal government should enact legislation allow First Nations members on reserves to hold land in fee simple. Proponents for this legislation argue, as Ibbitson and Smith pointed out in their articles on the subject, that such legislation would enable band members to build equity and finance entrepreneurship, transfer wealth to their children, provide social stability and therefore greater job opportunities, allow the government to tax the reserve property to raise revenue for infrastructure development, and enhance the business potential on reserve land thanks to the legal certainty that a property regime makes possible. (T1, p 6)

Aboriginal title as inalienable (example of non-fungibility) : lands held pursuant to aboriginal title cannot be sold or surrendered to anyone other than the Crown; lands held pursuant to aboriginal title are inalienable to third parties; remember that one of the rights in the bundle is alienability > but property right can exist w/o the full bundle of sticks > so the limit on alienability does not preclude aboriginal title from being a property right. Lamer J in Delgamuukw said:“What the inalienability of lands held pursuant to aboriginal title suggests is that those lands are more than just a fungible commodity. The relationship between an aboriginal community and the lands over which it has aboriginal title has an important non-economic component. The land has an inherent and unique value in itself… The community cannot put the land to uses that would destroy that value.” (T2, p 32)

2. Balancing public interests and private interests Public access to private property: Harrison v Carswell, Michelin tire case, Stonehenge case, Canadian

Commonwealth: private mall owner’s right to exclude and public access > larger frame: public access to private property [important distinction: Victoria Racing and AFP = engages the question of when a property interest should be identified].

Expropriation and regulatory taking/de facto expropriation: capacity of state to eliminate a private interest for the public good; at what point is regulation too much? > probably clearest example of balancing the public and the private, balancing is what this area of law is all about.

Conditional transfers void as being against public policy: when public policy ought to invalidate a conditional transfer; two sides of the public policy discussion that we looked at, (1) overturning a restraint as in Trinity Schools case b/c it seemed to undermine an element of the property interest [fixed price to buy from Bennetts = wanting to promote efficiency of property interests, alienability], (2) Re Leonard Foundation, a condition being void for public policy.

Justifiable infringement test: aboriginal law justification for infringement of aboriginal title, articulated in Delgamuukw = compelling and substantial objective (history of non-aboriginal participation in fishery etc. after Gladstone; and development of province after Delgamuukw).

Title registration system and the choice it makes to protect the purchaser over the settled owner, moving from static to dynamic security, part of a larger public choice to promote transferability of property, property as a fungible, transferrable commodity (the broader, underlying narrative we have been looking at throughout the course).

3. Economic Justification v. Personhood Justification a. Economic Justification : Among all the forms of property in society, private property is able to allocate

resources the most efficiently. Protecting exclusivity through private property also spurs productivity, because exclusivity incentivizes people to work towards producing or improving something. Example: no incentive for a farmer to tend to his carrot patch if right before harvest anyone could take his carrots. The economic justification was evident, alongside the labour justification, in International News Service v AP, where the majority found that AP had a quasi-property interest in the news they gathered because without an interest, AP would have no economic incentive to gather the news (and this in turn served a socially valuable function, which touched on the utilitarian justification). The economic justification is also central to the debate over whether and how the federal government should enact legislation allow First Nations members on reserves to hold land in fee simple. Proponents for this legislation argue, as Ibbitson and Smith pointed out in their articles on the subject, that such legislation would enable band

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members to build equity and finance entrepreneurship, transfer wealth to their children, provide social stability and therefore greater job opportunities, allow the government to tax the reserve property to raise revenue for infrastructure development, and enhance the business potential on reserve land thanks to the legal certainty that a property regime makes possible. (T1, p 5)

i. Moore v Regents of the University of California : The issue in this case was whether there is property in excised cells, and whether the tort of conversion (the unlawful appropriation of a property interest) should be extended to include excised cells as property). The majority found that Moore did not retain a property interest in his excised cells, particularly because invention is key to patent and property interests and Moore did not invent anything, he simply provided the raw materials (labour justification), and because recognizing excised cells as property would limit scientific research and development (economic justification). (T1, p 7)

ii. Expropriation and regulatory taking in the US : The American question of what constitutes a “public use” was considered in Susette Kelo v City of New London. A majority of the US Supreme Court in Kelo determined that economic development, such as creating new jobs and revitalizing a depressed urban area, was a valid “public use” under the Takings Clause of the Fifth Amendment, even though the city transferred the land to a private company, Pfizer. (T1, p 8)

iii. But regulatory taking in Canada : To qualify as a regulatory taking in Canada for which compensation is owed, there must be: (1) a confiscation of all reasonable use of the land from the owner, and (2) a corresponding benefit to the expropriating authority, as per Mariner Real Estate Ltd v Nova Scotia and CPR v City of Vancouver. A regulation that simply diminishes the economic value of land does not qualify as a regulatory taking, and no compensation is owed. This is because the Expropriation Act compensates for a loss of an interest in land, or the whole bundle of rights, rather than simply the economic value as seems to be the case in the United States, for example in Lucas v South Carolina Coastal Council where the court found compensation was owed if a regulation denied all economically beneficial and productive uses of the land. (T1, p 8)

iv. Criticisms of the Economic Justification : *Tragedy of the anticommons: when too many people have a right of exclusion, the efficient allocation and use of resources may be compromised. Example from post-communist Moscow: storefronts remained empty but street carts flourished because the operation of a store had too many users involved > the interest had been subdivided too much. (T1, p5) *Inequality > abject poverty: in a society that allocates property rights in pursuit of economic efficiency there is bound to be inequality - so while there can be significant wealth, at the other end of the spectrum there will also be significant poverty. (T1, p5)

b. Personhood Justification : Humans are containers of free will, and exercising our free will involves taking some authority over the material world. Exercising our free will over material world is what makes us human. Developed by German philosopher Hegel. Personhood justification was evident in the Moore v Regents of the University of California’s dissent, where Mosk J suggested Moore did have a property interest in his excised cells because there is “a profound ethical imperative to respect the human body”. Likewise, in his piece “Homelessness and the Issue of Freedom”, Waldron discussed the importance of property as a space in which to be human, and perform even the most elementary human activities. The personhood justification also emerged in Victoria (City) v Adams, where Ross J found that a bylaw prohibiting temporary shelters in public spaces interfered with homeless peoples’ ability to keep themselves safe and warm. (T1, p 4)

i. Aboriginal title as communal : Example of the personhood justification at a community level. One of the three characteristics of aboriginal title identified by the SCC in Delgamuukw. Aboriginal title held at a community level, giving rise to the community’s rights and identities. Chief Joan Ryan, Hanamuxw: “it is not your personal property, but rather you are designated as the person to manage that property not just for yourself but for all members of your house.” Also Richard Overstall’s description of the Gitksan conception of property coming from the relationship between people and the natural world, based on reciprocity rather than exclusivity: Overstall describes property, the thing possessed, is created in the space between two legal entities,

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between the people and the natural world. Daxgyet is the Gitxsan word for the property interest that emerges from the marriage between an ancestral line and the contemporary hold of that line’s power. The feast, yukw, is the Gitxsan’s legal forum in which property claims are recognized or not recognized, and the House, wilp, is the principal unit of political authority in Gitxsan society. The Chief of a House is a trustee who holds the legal right to the land for the benefit and use of the House. (T1, p 7)

ii. Restraints on alienation (combo of personhood and economic justifications) : This issue reflects tension b/w desire of property holder to fetter subsequent uses of property, desire of present owner to be as free as they can to do as they please w/ the property. A push for removing fetters as land transforms into an increasingly fungible commodity > push towards free alienability and transferability, away from restraints on alienation. Justifications for increasing fungible nature of property: personhood justification (people should be free to do what they want with their property), and economic justification (economically efficiency > private property is best able to distribute property most efficiently).

4. Giving private property owners the ability to control their property – how it is used, where it goes… Trespass and airspace :

o In US v Causby, the plaintiff Causby sued the US government for trespassing on his land, particularly because the noise from frequent low-flying military planes frightened his chickens. The US Supreme Court stated that the Latin Maxim had “no place in the modern world” because otherwise airlines would be subject to countless trespass suits. The Court decided that “if the landowner is to have full enjoyment of the land, he must have exclusive control of the immediate reaches of the enveloping atmosphere”. The landowner was entitled to all the airspace above their land that they could reasonably occupy or use, and whether they were currently occupying or using this space was immaterial. (T1 p 15)

o The issue in Bernstein v Skyviews was whether airplanes flying over Bernstein’s property trespassed into his airspace. The Privy Council found that ownership of airspace only extends to a height that is necessary for the ordinary use and enjoyment of the land and the structures on it. Griffiths J said: “The problem is to balance the rights of an owner to enjoy the use of his land against the rights of the general public to take advantage of all that science now offers in the use of air space. This balance is in my judgment best struck in our present society by restricting the rights of an owner in the air space above his land to such height as is necessary for the ordinary use and enjoyment of his land and the structures upon it, and declaring that above that height he has no greater rights in the air space than any other member of the public.” The Privy Council concluded that the defendants’ aircraft did not commit a trespass by flying over the plaintiff’s land because it flew “many hundreds of feet above the ground” and by its mere presence so high in the air space did not cause “any interference with any use to which the plaintiff put or might wish to put his land”. (T1, p 15)

Defeasible and determinable limits (conditional transfers) :o Limiting uses of land = defeasible or determinable limits. A fee simple owner can also attach

limits to an estate, by attaching either defeasible (right of re-entry) or determinable limits (possibility of reverter) > these various forms of conditions allow an owner to restrict the use of the land (but the only remedy if that condition is not met is for the property to revert to the transferor – so this is a pretty blunt instrument).

o Conditional transfers that create conditional estates > where the transferor attempts to retain some control of the uses of land, or even the activities of those who hold the legal interest in the land (to whom the property interest has been transferred). In the case of a fee simple interest transfer, the transferor has parted with everything > “to A and his or her heirs”. But the transferor can also attach conditions that restrict the use to which a property is put.

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Covenants (a method of private zoning) :o Covenants are a method of private zoning, a method of local and private control > like

defeasible and determinable limits, covenants provide another mechanism for landholders to place limits on and to control the use of land.

o Limiting uses of land = covenants. Covenants provide another mechanism for placing limits on the use of land, to control the use of land. Covenants are particularly useful in the context of building schemes, e.g. what can be built, where it can be built, types of furnishings allowed > so covenants are useful for maintaining the character of a particular multi-unit development. Similar situation in condominiums.

Evident in concept of Aboriginal Title too : SCC in Bernard and Marshall considered what was the appropriate standard of occupation to establish aboriginal title: Exclusion possession, in the sense of capacity to control, established by showing regular occupancy or use of definite tracts of land.

Limit on control :o When conditions are void (as against public policy, restraint on alienation)o Easement-like public entitlements to private property:

The rights of individuals to use both public and private property venues for public assembly or the exercise of free speech = these entitlements are a form of servitude (if using the term loosely).

Director of Public Prosecutions v Jones (Margaret) (1999) – House of Lords: Was a highway as a site of protest (related to a fence erected around Stonehenge) permissible under the common law? Lord Ivrine Lairg LC said that a highway is a public space that the public may enjoy for any reasonable purpose, including peaceful assembly, so long as the activity does not interfere with traffic or otherwise constitute a nuisance. Lord Hutton noted that Canada has the Charter, which gives an express right to freedom of expression. Lord Hutton quoted a judgment by Lamer CJ from Committee for the Commonwealth of Canada v Canada (1991): “No one could agree that the exercise of the freedom of expression can be limited solely to places owned by the person wishing to communicate: such an approach would certainly deny the very foundation of the freedom of expression.” (Commonwealth was the case that decided that use of an airport as a site for distributing political pamphlets was constitutionally protected).

Harrison v Carswell : AN EXPLORATION OF THE CAPACITY OF PROPERTY OWNERS TO EXCLUDE OTHERS, AND THE LIMITS ON THIS CAPACITY TO EXCLUDE. Shopping malls are a special type of private property, different from a home where we might expect elaborate protection for private property, because the public is invited in. The issue in this case was whether the mall owner had the right to exclude certain members of the public and invoke the remedy of trespass. Dickson J on behalf of the majority found that it was not the Court’s role to balance the right to picket with the right of an owner to their private property. Dickson J upheld the Peters decision that found picketing in front of a grocery store in relation to Californian grapes amounted to trespass. In this case, picketing on mall property as part of lawful labour dispute also amounted to trespass. Laskin J in dissent argued the Court should not pay mechanical deference to stare decisis, and did have a balancing role to play. Laskin J found that the mall owner should not be entitled to exclude a person picketing as part of a lawful labour dispute with an employer who was a mall tenant. (T1, p 3)

Underlying themes : o EXCLUSIVITYo Balancing the virtues of private control with public policy considerations. To what extent can a

private property owner attach conditions to property? To what extent does the public have an interest in allowing or limiting conditions attached to property?

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5. Concept of Possession in Property Law There is a difference between a possessory interest and a property interest. Possessing something is not

equivalent to owning it; however, possession may give rise to a property interest, depending on the context. For example, in the context of wild animals, a hunter has a possessory interest when they capture and kill the animal and this possessory interest gives rise to ownership, per the fox hunting case Pierson v Post (1805). Remember possession/occupancy are also justifications for property. (T1, p 23)

There are two core components of possession: (1) the intention to possess, and (2) physical control . As per Popov v Hayashi (2002), there may also be a pre-possessory right. In Popov, the court found that though Popov’s possession of the ball was fleeting and disrupted by the aggressive crowd, he had a pre-possessory right to the ball that warranted legal recognition. Popov’s pre-possessory interest had to be balanced with Hayashi’s possessory interest in the ball, since he was the first person to establish physical control over it. The court decided that the ball should be sold and the proceeds from it divided equally between Popov and Hayashi. (T1, p 23)

Occupancy justification : The right to property arises through the act of discovering or occupying. The one who occupies or discovers has a better claim than those who do not occupy or did not discover. The occupancy justification was considered in Edwards v Sims, where Logan J in dissent argued that Edwards’ property interest in the Great Onyx cave arose because “no one ought to be allowed to disturb him in his dominion over that which he has conquered and subjected to his uses’. (T1, p 5)

Property Law Act, s. 35 & adverse possession rights: Section 36 of the Property Law Act states that if a building encroaches on an adjoining land or if a fence has been improperly located so as to enclose adjoining land, the BC Supreme Court may on application (a) grant an easement on the land to the party who has encroached if compensation is paid to the owner of the adjoining land, (b) vest title to the land in the party who has encroached after compensation is paid to the owner of the adjoining land, or (c) order that the encroaching party remove the encroachment or the fence. The Court will look at the facts to determine the result: was the encroachment or enclosure an honest mistake? was it intentional? This section of the Property Law Act seems to give some limited adverse possession rights to someone who builds a building or fence on someone else’s land (and this is an exception, because adverse possession was abolished in BC). Adverse possession is the common law doctrine that allowed a person squatting on someone else’s property to eventually acquire legal title to that property (provided that the squatter was visible, stayed there for a long duration of time, e.g. 20 years, and the property’s legal owner never sued in trespass). (T1, p 18)

Exclusive possession test for tenancy (leases) : The fundamental test for tenancy, per Fatac; “A tenant enjoys those fundamental… rights of ownership that stem from exclusive possession for a defined period”). Fatac: Agreement giving right to operate quarry on land for 12 yrs formed in 1991. In 1996, property was sold. Was the land “tenanted property” as described in the sale document? Was agreement a lease, or a licence? Crt found quarry operator’s right of occupation was far from exclusive (no clearly defined area of the quarry over which the quarry operator had exclusive use). Crt concluded agreement = a licence, not a tenancy/lease. [New Zealand CA] (T2, p 14)

Tenant’s Right to Quiet Enjoyment : The core right of a tenant is the right to quiet enjoyment. This right can either be expressly written into a lease, or implied via statute. “Quiet enjoyment” does not mean “quiet”. Quiet enjoyment = peaceful occupation, right not to be interfered w/, right to occupy w/o interruption of possession. “The covenant for quiet enjoyment is… a covenant that the tenant’s lawful possession of the land will not be substantially interfered with by the acts of the lessor or those lawfully claiming for him” (HofL in Southwark). (T2, p 14)

Aboriginal title : Lamer CJ in Delgamuukw said: “What makes aboriginal title sui generis is that it arises from possession before the assertion of British sovereignty, whereas normal estates, like fee simple, arise afterward.” McLachlin CJ in Bernard, Marshall said: “exclusive possession in the sense of intention and capacity to control is required to establish aboriginal title. Typically, this is established by showing regular occupancy or use of definite tracts of land for hunting, fishing or exploiting resources… The ultimate goal is to translate the pre-sovereignty aboriginal right to a modern common law right.”

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