Property SummariesAboriginal Title

Lamar lays out a special approach to interpreting aboriginal evidence in R v Van der Peet that he further elaborates on in Delgamuukw v BC. It involves the sui generis nature of aboriginal rights that require that trial courts must approach the evidence in light of the evidentiary difficulties inherent in adjudicating aboriginal claims and the evidence must be understood against this backdrop (Van der Peet).

Sui Generis

There are three dimensions of aboriginal title which are different from other titles and thus sui generis- 1) Inalienability – aboriginal land cannot be transferred, sold or surrendered to anyone other than the Crown, it is inalienable to third parties, 2) Source/occupation – must have been exclusive pre-sovereignty (unlike other rights acquired from the crown), 3) Collective right to land – not individual right, held by all members of the band.

It also must be done in a manner that does not strain the Canadian legal and constitutional structure (Delgamuukw). Practically speaking this means recognition for the oral histories of aboriginal communities (Delgamuukw). The nature of sui generis can be best understood with reference to both common law and aboriginal perspective (Delgamuukw).

Content of Aboriginal Title

The content of aboriginal title as summarized by Lamar in Delgamuukw is - 1) that aboriginal title encompasses the right to exclusive use and occupation of the land held pursuant to that title for a variety of purposes, which don’t need to be aspects of the aboriginal practices, customs and traditions which are integral to distinctive aboriginal cultures (not frozen in time) and 2) that those protected uses must not be irreconcilable with the nature of the group’s attachment to that land, the “inherent limit” (think equitable waste).

Proving Aboriginal Title

There is a three step test for proving aboriginal title - 1) The land must have been occupied prior to sovereignty (because other dates of first contact are hard to prove) – look to aboriginal pre-existing laws, often oral histories as well as common law notions. 2) If present occupation is relied upon as proof of pre-sovereignty occupation, there must be continuity between the two. 3) At sovereignty, that occupation must have been exclusive (changed in Bernard/Marshall) – look at evidence of other groups asking permission to enter the land (Delgamuukw). If you can’t prove exclusivity then it can still be aboriginal right but not title (diff: title grants exclusive right to use and occupy the land, rights in relation to all resources). In Bernard/Marshall, McLachlin tweaks Lamar’s test for standard of occupation, changing it from exclusive control to effective control. States that evidence of acts of exclusion is not required to establish title; if you can demonstrate effective control of the land by the group, then you

can draw an inference that it could have excluded others had it chosen to do so. When examining a claim for an aboriginal right (Bernard/Marshall) you look at two conceptions. 1) The first is that you examine the pre-sovereignty aboriginal practice and translate that practice into a modern right. To do this you must consider the practice from an aboriginal and European perspective when translating to a common law right. The court should also take a generous interpretation. 2) The second step is to look at what modern right best corresponds to the pre-sovereignty aboriginal practice, examined from the aboriginal perspective. Effective possession (intention and capacity to control) is required to establish aboriginal title, must show regular use or use of definite tracts of land for hunting, fishing or exploiting resources (Bernard/Marshall).

Differences between Bernard/Marshall and Delgamuukw

Oral history evidence is admissible if it meets the requisite standards of usefulness and reasonable reliability (Bernard/Marshall – tighter than Delgamuukw). MacLaughlin says that the ultimate goal is to translate the pre-sovereignty aboriginal right to a common law modern right, approached with sensitivity to aboriginal perspective and fidelity to the common law concepts. Bernard/Marshall places much more emphasis on translating aboriginal rights into a modern right than Delgamuukw. It also never refers to sui generis and places more emphasis on fitting rights into common law system, without which you may lose title. There is also a difference in how they look at exclusivity – Delgamuukw says title will only vest if they show exclusivity which may be done by looking at the groups laws/practices such as granting permission for entrance. In Marshall/Bernard the court acknowledged that pre-sovereignty aboriginals may not have had a law around excluding others and the court can look to a demonstration of effective control of land to draw an inference that it could have excluded others had it chosen to do so (in this case M/B takes more aboriginal perspective).

Tsilhqot’in v BC

In Tsilhqot’in v BC the courts found that there was title to smaller areas claimed however the band had framed the question as a title claim over the entire area, to which the courts did not agree. In the case the courts look at oral traditions, the existence of aboriginal place names in the area, expert anthropologist evidence, and the existence of trial in the area as proof of pre-sovereignty aboriginal use. Case presented a challenge in terms of proving “regular use of definite tracts of land” as set out in Marshall/Bernard, because the band was semi-nomadic it was difficult for them to show signs of cultivated fields or permanent village sites that were occupied all year. The case also didn’t make mention of aboriginal law (another example of attempt to fit in under common law). Trial Judge Vickers says that the SCC raised the bar in Marshall/Bernard, requiring regular use/occupancy of definite tracts of land, says that title does not flow from occasional entry and use. Vickers says that you need to be able to define regular and definite tracts of land in order to get what is essentially a fee simple over the land (if you fail to do this you can still get abo right but standard is higher for title). Vickers also determines the date of sovereignty to be 1846, two years before Treaty of Oregon is implemented and international recognized thus demonstrating ability to control territory. Date is important because the earlier it is, the more the aboriginal group that shoulders the onus of proof has to reach back for evidence. States that evidence of seasonal sites is okay, they don’t need to be permanent, seasonal cultivation sites are okay

but you need to show that they were using the same tracts of land to travel to and from the sites year after year. Takes “postage stamp” approach to hunting and fishing rights – says it is very site specific, that if you show a particular cliff was fished from this is enough to establish a right to that site but not to establish full rights. Vickers says that hunting and fishing practices could be sufficient to ground title if combines with regular and definite use of tracts of land (still postage though). Issue of proving exclusive or effective occupation if you are away in the winter – court says you can prove effective control if one group moves away from the area and it is unlikely that another group will move in because the resources are gone (say berries are not going to grow in winter). Court also looks at the fact that another aboriginal group has not claimed the area.

Origins and Nature of Equitable Interests

Origins

As the common law system was developing, so was equity through the Crown. People were petitioning the crown to seek remedies that were not available to them in common law – the result was the establishment of the law of equity (court of chancellory). The idea of the “use” emerges – idea is that you can transfer land to a trusted friend, in vivos grant – ex: to F and his heirs to the use of A and his heirs. F =’s feoffee to uses – the person with whom the legal title is conveyed, A=’s cestui que use – the person intended to have the benefit of using the land. This system developed as a way of avoiding feudal burdens such as inheritance tax and feudal dues. Potential problems with the idea of ‘use’ – F needed to be trustworthy since he holds the power. Also under common law F was the only recognized owner, this lead to A going to courts of equity to recognize his rights, which they did, meaning that F would hold legal fee simple and A would hold equitable fee simple – splits equitable and legal interest. This meant that under equity someone who received the land from F would be bound to honor A’s interest. If H bought property from F and H did not know about A’s interest then A would not have a remedy – but if H had been given notice then equity could provide a remedy for A.

Statue of Use

The Crown begins to feel the burden of these equitable estates because they are getting less tax and Henry 8th forces through Statue of Use legislation that executed “use” and moved to the fee simple estate. Legislation executed F out – ex: to F and his heirs to the use of A and his heirs”, simply executes F out and gives legal fee simple to A. Ex: To F and his heirs to the use of A for life, with the remainer to the use of C and her heirs – prior to statue, F holds legal fee simple, A holds equitable life estate, C holds equitable remainder in fee simple. After statue, F is executed out, A holds legal life estate, C holds legal remainder in fee simple. Reading the statue carefully people began to find ways around it – companies were not within the legislation so you could therefore say to A company (in fee simple) for the use of B (in fee simple). The statue also didn’t execute active uses so you can say “to A in fee simple to hold the property and manage it and pay rents to the use of B in fee simple”. You could also exhaust the statue of uses by saying “to F and his heirs to the use of A and her heirs to the use of B and her heirs”. After the statue, F would be executed out, A would get a legal fee simple and B would get an equitable fee simple – so essentially exhausting the statue gets around it that way. These techniques were a major step forward in property law as it allowed us to separate the legal and equitable interests.

Resulting Trusts

A resulting trust will be recognized in two main circumstances – 1) where a trust document has failed to dispose of all the beneficial rights – “to Acme Trust in fee simple to hold in trust for B for life” – Acme gets legal fee simple, B gets equitable life estate, the rest of the equitable interest goes back to the estate, resulting trust in favor of the settler (whoever gave it to Acme). Normally we don’t have to go to this doctrine of resulting trust unless someone has failed to deal with the whole of the equitable interest. Ex: to Acme Trust in trust for all my grandchildren who reach 18 years of age – until a grandchild reaches 18 the beneficial interest is held by the settler according to doctrine of resulting

trust. 2) Presumption of resulting trust where there is a gratuitous transfer – equity prefers maxims, not gifts so if A purchases property and places title in name of B or makes a gratuitous transfer of her interest in property to B – it is presumed that A has chosen to retain equitable interest. Presumption is that if you receive a gift, you own the legal interest of the gift but not the equitable interest.

Cases on Trusts

Resulting trusts – Pecore v Pecore – demonstrates that a resulting trust presumption can be rebutted by consideration of the relationship b/w the transferor and transferee. Constructive trusts - Peter v Beblow – sets out that an unjust enrichment involves 3 components – 1) an enrichment, 2) a corresponding deprivation, 3) the absence of juristic reason for the enrichment. If an unjust enrichment is established then there are two potential remedies – 1) monetary compensation – based on services rendered or 2) constructive trust – establishing a part of the title to the property that was once shared. This remedy of constructive trust arises where monetary damages are inadequate and where there is a link between contribution that founds the action and the property in which the constructive trust is claimed. Standard of contribution must be direct and significant, once connection is established the amount of contribution governs the extent of the constructive trust.

Qualified Transfers and Future Interests

Qualifies Estates

There are 3 types of qualified estates – 1) Estates subject to a condition subsequent (dark cloud) – ex: “grant to A in fee simple but if the land is ever used for residential purpose then my estate may re-enter”. A retains a fee simple subject to a condition subsequent, so a right of re-entry is not automatic but may occur if some event comes to pass in the future. Words that hint at condition subsequent are “provided that”, “but if”, “on condition that”, “in the event that” etc. 2) Determinable estates (fence post) – ex: “I grant Blackacre to A in fee simple until the land is used for residential purposes” – A receives determinable fee simple and the estate retains the possibility of reverter. As with a condition subsequent, A receives the land now but their rights may end later. Words that hint at determinable limitation are “while”, “during”, “as long as”, “until” etc. The difference between a condition subsequent and a determinable estate is that if we don’t enforce the end of the determinable limit then the whole gift fails – they must past the fence post, whereas for condition subsequent if it can’t be enforced then it becomes a whole gift without the condition (ex: it would fail if it told you that you couldn’t get married, under condition subsequent this would give you the whole gift while under determinable it would destroy the gift). 3) Condition precedent (bridge) – ex: “I devise Blackacre in fee simple to A but if, and only if, she first obtains a university degree in environmental studies”. A does not receive the property until the event occurs and the condition is satisfied. Until the event occurs the interest is contingent and remains with the grantor, this is different from the other two types which are vested at the outset. Estates are either vested or contingent – ex: to A in fee simple (fee simple estate vested in possession), to A for life, remainder to B in fee simple (A is vested in possession, B is vested in interest), to A in fee simple but only if they do X first (A gets contingent fee simple, condition precedent), from G to A provided that A does not start smoking (A receives fee simple vested in possession but subject to condition precedent – G holds right of contingent right of re-entry, from G to A until A is no longer a student (A holds vested fee simple with determinable condition, G holds vested right to re-entry because the fence post ending is already set up and not contingent on anything).

Cases Involving Qualified Transfers

Stuartburn (Municipality) v Kiansky – one can have a vested interest in the property even if not currently in possession, in this case holding a remainder interest in the property while someone else holds the life estate is enough to constitute a vested interest. Caroline (Village) v Roper – court uses the doctrine of rectification to say that the parties were in complete agreement as to the terms of their contract but wrote them down incorrectly, court rectifies this through doctrine. The grant in actuality is determined to be a fee simple subject to a condition subsequent however that was not the intention of the parties and therefor void through the doctrine of rectification

State Limitation on Private Power

Invalid Elements

When will the state render a condition invalid and what will happen if this occurs. If the grant contains invalid elements under a: i) condition subsequent - then the grant is severed, destroying the grantor’s right of re-entry and rendering the gift absolute, ii) determinable limitation – the entire gift fails, both the determinable interest and the grantor’s right of reverter are destroyed, iii) condition precedent – grant of real property is voided and possibly the grant with it – no bridge to cross anymore. If the court has the option of interpreting the wording as either a condition precedent or a condition subsequent, it will prefer a condition subsequent because the law prefers vesting as soon as possible. Uncertainty (Hayes v Meade) - uncertainty can render a transfer invalid; the grantee should know what it is that they cannot do. Conditions can also be rendered void for public policy, for example conditions like you can’t take public office, join the military or get married.

Cases Involving Voided Conditions

Re Rosher – example of case where the restrain on alienation comes into play. H.J. Hayes Co v Meade – court has option of interpreting condition as subsequent or precedent, chooses condition subsequent in order to respect the wishes of the testator and to avoid the whole gift failing for uncertainty. Case shows that sometimes the courts will interpret a case based on what a fair result would be with respect to the interpretation of the testator (look to will). Sifton v Sifton – “where it is doubtful whether a condition be precedent or subsequent the court prima facie treats it as being subsequent for there is a presumption in favour of early vesting”. Re Leonard Foundation Trust – court determines that the right of an individual to dispose of their property is not absolute – in this case it violates the public policy of equality. Re Ramsden Estate – court does not strike down a clause similar to that of Leonard because it did not equate the qualifications with superiority. Trinity College School v Lyons – court strikes down a restraint on alienation of a fee simple – a right of first refusal is okay but a right of option triggered by death is different and is void as an unlawful restrain on alienation.

Rule Against Perpetuities

The rule against perpetuities (RAP) states that for an interest to be valid it must vest, if it is going to vest at all, within the perpetuity period. This perpetuity period is calculated by reference to a formula which is lives in being (plus 21 years).

Applying RAP

There is a five step analysis for applying the rule against perpetuities. Step 1 – Is the limitation contained in the instrument to which the rule against perpetuities applies? Only applies to contingent and not vested interest. An interest is vested if: the interest is capable of taking effect in possession forthwith and prevented from doing so only by prior particular estate or estates and person or persons entitle to the interest is defined or ascertainable and the size of the interest is ascertainable. Example: if T devises Blackacre to A for life, then to B for life, then to C for life, then to D for life and everyone is

alive at the time of T’s death, RAP would not apply because everyone would have either a vested life estate in possession or a vested life estate in interest and the vested remainder would go back to the estate. Example – gift from D to TRU University on the condition that it continues to operate a law school, would establish a fee simple subject to a condition subsequent and thus a vested interest to TRU, so RAP would not apply – however D would retain the contingent right of re-entry and so for him RAP would apply. Example – T devised Blackacre to A for life, remainder to B and C in equal shares for life, remainder to the survivor of B and C – A gets vested life estate in possession, B and C get life estate vested in interest, the survivor of B and C would get a contingent remainder fee simple in interest (here RAP would apply). Step 2 – what is the date of the creation of interest? The perpetuity period will begin to run on the date of the creation of the interest – this will either by through a will, in which case it begins to run on the death of the testator or through instrument inter vivos, in which case the date the instrument takes effect. Step 3 – who is/are the life/lives in being? To constitute a life in being four conditions must be satisfied – i) the life/lives must be human, ii) the life/lives must be living at the date of the creation of the interest (in utero counts), iii) if a group of people are used as the measuring lives, the group must not be capable of increasing in number after the date of the creation of the interest, v) if a group of persons is used, the group must be ascertainable. Example – T devises Blackacre to all my grandchildren who reach the age of 21 in fee simple and at T’s death, T has two children X and Y – it is a contingent interest because we don’t know who will reach 21, the date of interest is when T dies, although no measuring lives are expressly designated it can be implied that they are T’s children, there can be no increase in the size of the group (T’s children as measuring lives) because when T dies, she is no longer capable of having more kids. Example – G gives Blackacre to trustees upon trust for all G’s grandchildren who reach the age of 21 and at the date the trust is established G has two children, X and Y – it is contingent, the date of the deed is the date the trust is established, the problem is that even if G is 99 years old she could have more children and therefor X and Y cannot be measuring lives because they can increase in number and thus the trust fails. Example – T devises Blackacre to trustees for such of my lineal descendants living at the expiration of 20 years from the day of death of the last survivor of all the lineal descendants of Queen Elizabeth II alive at the time of my death – contingent, interest takes effect at death, the lives in being are the lineal descendants of the Queen that are alive at the time of the testator’s death – clause is drafted in a way as to make it not possible for the group to increase, so it’s fine – they would get 21 years after the last decedent of the Queen that was alive at the time of T’s death to pass the interest. Example – Testator devises Blackacre to A for life, remainder to all my lineal descendants living at the expiration of 20 years from the day of death of the last survivor of all people resident in America on the day of my death – would fail because all the residents of America is not ascertainable. Step 4 – is it theoretically possible to construct circumstances in which vesting would occur outside the perpetuity period? Example – Grantor gives Blackacre to trustees upon trust for all G’s grandchildren who reach the age of 21, at the date of the deed G has two children X and Y – because G is still capable of having more children, G must be the measuring life not X and Y, so it is G plus 21 years, however G could die and none of her grandchildren could have reached the age of 21 by the time she has been dead for 21 years – thus it could vest outside the perpetuity period and fails. Example – G grants his car to the first child of Anne’s to reach 25, at the time Anne is alive and has two children aged 6 and 4 – the measuring life is Anne plus 21 years but it would fail at step four since if Anne’s children both died, even if Anne had a third child and then died, that new child could not reach 25 by the time

the 21 period runs out after Anne’s 21 years – therefore fails (if they had said 21, not 25 it would have been fine). Step 5 – can a limitation which is invalid be saved by the Perpetuity Act RSBC 1996?

Perpetuity Act

The act allows for some differences from the common law including more court interpretation to save the gift. The act only applies to instruments taking effect after December 31st, 1978, anything before that date is void if it offends the common law rule of perpetuities (s.2). Act specified certain beneficial trusts which are immune to the RAP, such as pension funds and property donated to a university (s.4). S. 7 permits a 80 year perpetuity rule which can either be expressly set out or is assumed if there are no lives in being. S. 3 outlines the order in which remedial provisions are to be applied. Start by looking at s. 14 which tells us about future capacity to have children – says that a male 14 and older or a female 12-55 years old is presumed to be able to have children, also allows to evidence to be provided such as infertility. S. 9 is the wait and see rule which says that any interest capable of vesting beyond the perpetuity period is presumed valid until actual events occur which establish that it is incapable of vesting – different from common law where it is void immediately. S 10(2) says lives in being include the person by whom the disposition is made, the person to whom the grant was made, a person having a child or grandchild, a person who takes a prior interest or upon whose death it takes effect, spouses whether or not they are ascertainable at the time (essentially can use almost anyone now). S. 11 outlines age reduction – says that where people put an age (over 21) on the gift that has the effect of invalidating it, if that gift would have been fine if the age was 21, then we will reduce the age to 21. S. 12 – exclusion of class members to avoid remoteness – if some grandchildren get to 25 and others do not at the time of death, you don’t know what share they will get because others will eventually get there, if that’s a problem then you can close the class. S. 13 – general cy pres provision – when it becomes apparent that we are going to have a void under rule but the general intention can be ascertained, someone can apply to the courts to have them try to interpret without voiding.

Leases and Licences

The Nature of a Lease

There are five types of leases – 1) fixed term lease - (ex: a lease for two years), 2) periodic lease - (ex: month to month) – can be set up expressly or implied, 3) tenancy at will – no set period and continues as long as both the landlord and tenant wish. Either tenant or landlord has the right to terminate the tenancy, usually occurs at the end of lease, someone’s lease comes up but they haven’t agreed on new terms yet so the land remains in possession until a new agreement. 4) tenancy at sufferance – when a tenant remains in possession without permission after termination of another tenancy – no consent from landlord. Issues of whether this can even be called a lease because of the circumstances. 5) Perpetual? Issue in debate, under common law you can’t create perpetual lease because the term must be agreed on.

Essential elements of a lease

1) exclusive possession – the difference between a lease or a license depends on this exclusive possession, 2) identification of the parties (landlord and tenant), 3) identification of the property, 4) identification of a term, which must be ascertainable at the commencement of the term, 5) date of commencement and 6) rent, if any, to be paid – rent is a usual but not necessary aspect of a lease. Distinction between leases and licenses – a licence gives you permission to be on the land but it is a non-property right. A lease lets you exclude others, it’s a property right to possess the land for a specified period of time (Factac v Commission of Inland Revenue NZCA). How do you tell if an exclusive right has been given – intention is only relevant to the extent that it tells whether exclusive intention has been granted, the terminology of the parties is not relevant unless it helps distinguish this right to exclusive possession. NZCA – even though if you have limited the uses to which a land can be put in a lease this does not negate the fact that this is a lease.

Cases involving the nature of a lease

Factac Ltd v Commissioner of Inland Revenue – case involved a determination of which party was liable for the payment of GST, which in turn depended on whether the lands were “tenanted property”. The land is determined not to be tenanted property because the court finds no exclusive occupation. Court says that tenancy is an interest in land conferring right to possession for a limited period (creates an estate in land), while a license is a mere permission to be on the land, with or without additional permission to perform specific acts there (no estate in land). The lack of rent in this case is not a precondition of tenancy because a lease can be given as a gift. Court also holds that exclusive possession is not always synonymous with an unlimited range of uses; tenancies can be terminated for non-payment of rent or breach of a covenant related to the use of the land. Restrictions upon the use to which the occupier may put the land are not inconsistent with exclusive possession. There will be no tenancy where an occupier’s right to possession may be terminated for reasons that don’t have to do with the occupation of the land (ex: employee). In this case both parties intended to be bound, even though there was no rent it doesn’t matter, neither does the fact that they used the word license in the documents. In this case the right of occupation was far from exclusive on the facts and therefore there

was no tenancy. Metro-Matic Services v Hulman – previous owner had an agreement with plaintiffs to operate a business in the building, sold to new owners who were aware of the previous relationship but nonetheless excluded the plaintiff. Issue is whether the agreement creates an interest that runs with the property. If it’s a lease it binds the next owner, if it’s a license then it’s only binding between the original parties. In order to determine, look to the language of the agreement – the title of the agreement says lease agreement but this doesn’t matter, restriction in uses is also okay because they can be limited, so is the stipulation that other tenants have to have access. In the end the court decides that because none of the requirements makes the possession less exclusive, a lease had been granted. The language used in the agreement (calling it a lease) is not determinative but it does create a presumption which is not rebutted by any of the restrictions in the contract.

Obligations of Landlords and Tenants

Cases About Obligations of Landlords and Tenants

Southwark LBC v Tanner – case holds that the right to “quiet enjoyment” is only applicable to the actions of the landlord and not the actions of other tenants. Issue in the case is whether landlords are responsible for soundproofing as part of “quiet enjoyment” – a literal reading of the lease would suggest that it does but the technical meaning when reading it is that it protects the tenant from any action of the landlord or those acting for him but not from other tenants. There may be protection from “unreasonable noise” but this noise was not considered unreasonable, just the regular noises of life. In almost every lease there will be a provision for quiet enjoyment, if the contract is silent on quiet enjoyment then it can be implied. What is the right to quiet enjoyment – cases tell us that it reserves the right of the tenant to not be interfered with by their landlord. The tenant’s right to quiet enjoyment is prospective and sounds that are within your reasonable assessment of the circumstances which were the case at the beginning of the lease will not count as interference. Pellatt v Monarch Investments – do noise, odours and mess from renovations to an apartment building and the tenant’s apartment itself constitute a breach of a tenant’s right to quite enjoyment? In this case the landlord gave the tenant a chance to terminate the lease and tried to find alternatives for the tenant because they knew they would be breaching the right to quiet enjoyment and they are rebuffed by the tenant – doesn’t matter, the tenant still has a right to occupy and a right to quiet enjoyment. Case outlines that there are two approaches by the court in terms of unreasonable noise by tenants – i) if the landlord has the capacity to act regarding unreasonable noise that was not anticipated when entering into the agreement, and then stands idly by, then they are breaching the covenant (Albamor Construction), ii) the other approach is that it is only when the landlord is actively authorizing, either through involvement or agreement to the noise that he is breaching the contract (Curtis Investments). Petra Investments v Jeffrey Rogers – Plaintiff argues that the interference should be considered a derogation of the grant. The test for derogation – whether the action complained of rendered the premises “unfit or materially less fit to be used for the particular purpose for which the demise was made”. This case was about if the departure from a woman’s clothing center to introducing a Virgin megastore was a derogation of the grant. If the business operation of one tenant in a mall significantly interferes with the retail trade of another it can be derogation but merely retaining the land in a way that undermines the profitability of a tenant’s business is not derogation. In this case the landlord was free to use the retained land to construct

another store for a new tenant; however the terms of the original lease produced an implied obligation on the landlord not to alter the common area so that they would lose their character as a retail shopping mall. However in this specific case, the plaintiffs had entered into an agreement so accept reduced rent during the new store’s construction, this constituted a new agreement and over-rides the initial agreement regarding common space. Charter Trust v Davies – case example where the court does find derogation of a grant, pawn shop opens in a nice mall resulting in “scruffy” cliental, landlord could and should have taken action – that he didn’t resulted in a derogation of the grant.

Shared Ownership

Basic Concepts and Creating Shared Interests

2 main types of co-ownership (there are 2 others but they are basically extinct) – 1) joint tenancy – two or more people together own the same interest, “per mie et per tout” – each joint tenant holds the whole thing but nothing separately, you own as one and 2) tenancy in common

Joint tenancy

Two main features: 1) the four unities, 2) the right of survivorship. The four unities must be present for the creation and continuation of a joint tenancy – 1) possession – each co-owner is concurrently entitle to possess the whole, 2) interest – “to A for life and to B for 10 years as joint tenants”, doesn’t work because there is no unity of interest, because they have interests for different durations. “One-third to A and two-thirds to B”, or “to A for life and B in fee simple” - again there is no unity of interest because the interests aren’t the same. 3) Title – interests of co-owners need to be created by the same act or instrument – can’t transfer part of the land to A and two days later add B as a co-owner, must be simultaneous transfer in title. 4) Time – interests of the co-owners must be created at the same time, the exception is when a joint tenancy is created by a will – ex: “to A for life, remainder to the children of A as joint tenants”, A gets a vested life estate in possession but the children’s vesting may occur at different times based on when they are born, this is the only okay exception. If any of the above four unities aren’t present there will not be a joint tenancy. Mortgaging your interest in a joint tenancy can sever the tenancy because it is not possible for joint tenants to deal with their “own” interests independently; just about everything they do independently will sever the joint tenancy. Right of survivorship (jus accrescendi) under joint tenancy – on the death of a joint tenant, his or her share goes to the surviving joint tenant. Originally corporations could not be joint tenants because they don’t “die” but under the Business Corporations Act s. 31(1) and (3) they can now be joint tenants with individuals. If A and B hold Blackacre in fee simple as joint tenants and A dies and in her will leaves all her property to C, doesn’t matter because of right of survivorship B gets the title. Pecore v Pecore – if surviving joint tenant has made no contribution, right of survivorship might operate but there is a presumption of a resulting trust in favor of the tenant that contributed unless the presumption is rebutted by showing intention or advancement (younger children).

Tenancy in Common

Differs from a joint tenancy in two ways: 1) the only unity that is required is possession (other unities may be present but they are not required), 2) no right of survivorship – when one tenant in common dies his or her interest in the land does not pass to the surviving tenant but forms part of the deceased’s estate and passes in accordance with the will. “A and B hold Blackacre in fee simple as tenants in common, A dies and leaves her property to C, C gets A’s interest and C and B now hold Blackacre . Under common law, if the four unities are present, there is a presumption of joint tenancy. Under equity there are three circumstances where equity does not follow the common law presumption of a joint tenancy, 1) co-owners have contributed unequally to the acquisition of the property, 2) commercial transactions – situations where investors come forward and want to keep their interest separate from

being able to be usurped by the right of survivorship with business partners, 3) where a co-owner held interest in property as security for a loan.

Creating Joint Tenancy and Tenancy in Common Under Common Law

Joint tenancy at common law is presumed – express: “to A and B as joint tenants, presumed: “to A and B”, instrument is silent but if the four unities are there then it is presumed a joint tenancy. Tenancy in common at common law – express: “to A and B as tenants in common”, common law presumption rebutted by words of severance in the transfer instrument: examples include “in equal shares”, “share and share alike”, “to be divided between equally” – words that indicate that people are holding separate interests. If missing one of the four unities it also creates a tenancy in common.

Statutory Provisions in Relation to Land

Property Law Act – s. 11(2), outlines that under equity, and executed after 1891, then land that is transferred to 2 or more people, other than personal representatives or trustees, the presumption is that they are tenants in common unless a contrary intention appears in the instrument. This is the opposite presumption from under the common law. S. 11(3) – if the interests of the tenants in common are not stated in the instrument they are presumed to be equal. Equity changes everything previous, now if you want to create a joint tenancy you must make this express.

Severance of Joint Tenancies

A joint tenancy may be severed and converted into a tenancy in common in three ways at common law: 1) unilateral action - an act of one joint tenant “operating on his own share. Most but not all unilateral actions that involves the joint tenancy results in the alienation of their share. You look at whether the action has severed one of the four unities. Examples: transfer of a joint tenant’s interest to another person (would sever time and title), transfer of an interest in joint tenancy to oneself will also sever time and title (allowed under s.18(1) and (3) of Property Law Act), a declaration of trust by a joint tenant in favor of a third party because that declaration takes effect the moment it is made as opposed to by will (Sorenson), a mortgage of an individual joint tenant’s interest, severs time, title and interest (because bank now owns fee simple) (Dhillon v Jhutree). There is some controversy over this because under the torrens system the bank doesn’t actually hold interest anymore, it simply holds a registered mortgage. Still most recent BCCA decision says even under torrens system, mortgage does sever title. 2) Mutual agreement of the joint tenants, 3) a course of dealings that indicates that joint tenants are treating their respective interests as if they were tenants in common. No severance occurs by: i) unilateral declaration, can’t just say I’m going to sever this property, or ii) by an individual’s will, too late by then because the right of survivorship applies. More than two parties - If A, B and C all hold property as joint tenants and A sells to D, the share sold to D becomes tenancy in common and the joint tenancy remains between B and C. Failed negotiations – even when negotiations fail the courts are willing to recognize that parties intend to sever their shares, an agreement never reached may still work to sever joint tenancy. Mutual or joint wills – husband and wife create wills providing that everything goes to the survivor for life, remainder to their children. If the property is jointly held and husband dies, the wife would get everything due to right of survivorship, however the court will look at the mutual course of

dealings to find intention that creates the effect of severance to give interest to the children. Severance under Partition of Property Act – order for partition and sale of any jointly owned property, allows for cutting down the middle of land so you don’t have to occupy the land in possession with someone you once co-owned with, you can each occupy separate parts as opposed to occupying the whole together as you once did. Severance under s.5 of the Family Relations Act – joint tenancies severed and converted to tenancies in common on the happening of specific triggered event (divorce). Registration is not required for valid severance, as long as everything is done up to the point of registering, even if the registration hasn’t happened, severance will be taken to have happened.

Cases on Severing Joint Tenancies

Re Sorenson & Sorenson – divorce, wife and husband split interest in properties 50/50, wife leaves a will declaring a trust for her mentally disabled son. Before dying she had attempted to partition the land, court interprets this as her showing the intention to sever but it is not decisive. Court holds that the son has an equitable interest as a tenant in common as a result of the declaration of trust executed by the mother. Even though this equitable interest did not appear on the register, the interest bound the father as a matter of equity and severed the joint tenancy. Says that the granting of a lease by one joint tenant to the other does not work to sever tenancy (wife was leases half of the house that wasn’t hers). Court says that the execution of a trust deed did affect a severance. Court looks at the parties’ conduct, nothing that the husband did to suggest severance and everything in the wife’s conduct to show she recognized the joint tenancy and was trying to sever it. It is not the will or the attempt to partition that determines this case, it is the declaration of trust that severs.

Alternative Conceptions of Shared Ownership

Hofer v Hofer – appellant leaves Hutterites community where property is communal and private ownership is not recognized and tried to claim a portion of the property. Court holds that the appellants freely signed an agreement that they were entitled to no personal property, they were well aware of the communal lifestyle and they can’t go back now.

Principles and Registration: The Torrens System

Property is divisible and all different people can hold different rights, life estate, fee simple, lease etc – this can sometimes result in conflict between parties. In cases of conflict it is important to determine who takes priority because sometimes the person who comes second gets nothing. There are common law and equitable rules to govern these disputes. The first thing that needs to be done is to determine the nature of the interest involved in order to determine which rule to apply

Common Law Rules to Determine Priority

1) A legal interest followed by a legal interest (L v L) – rule is first in time, first in right. Nemo dat – one cannot give away that which one does not have. Common law rule that favors the owner, buyer beware. Ex: prior legal right, followed by a legal fee simple. 2) A legal interest followed by an equitable interest (L v E). Usually the original legal interest is not affected by the subsequent equitable interest unless the subsequent interest is created by the first party or there is something in their conduct that means that it is not fair that they shouldn’t be bound by the subsequent equitable interest. Ex: if A enters into two mortgages, the second one equitable and the first legal, if a dispute arises from the two people holding the mortgages, first in time prevails unless there is something in the conduct that says it shouldn’t (so if holder of legal interest did something shady). 3) An equitable interest followed by a legal interest (E v L). An agreement to sell, before the agreement is finalized will create an equitable interest. If a new person comes along and offers more $ and the person who held the title transfers it to the new person, creating a legal interest after the equitable interest which stays with the person from the original agreement. A bona fide purchaser for value of the legal interest who buys without notice of an equitable interest will not be bound by it. However if notice is given, can be actual, implied (ex: someone acting on your behalf is given notice) or constructive notice (notice that a prudent purchaser would have had if they had made the necessary inquiries) – then you will be bound by it. This is referred to as the bona fide purchaser without notice rule. 4) An equitable interest followed by an equitable interest (E v E) – A enters into an agreement for sale with B and then with C, neither has been finalized. Whoever came first has priority.

Cases Involving Common Law Priority Rules

Chippewas of Sarnia Band vs Canada (AG) – aboriginal claimants argue nemo dat applies to their land claim, no prior interest surrendered and therefore you can’t give away what you don’t have. Court looks at the fact that the band is claiming an equitable remedy (title) and at the same time trying to deny that equitable defences apply to them (laches). First thing you have to do is characterize the interest and while the band claims legal interest, the court says the interest is sui generis and thus different (this characterization is contrary to Delgamuukw saying that the interest is recognized at common law). The court also characterizes the present day landowner’s interests a legal and begins to treat them that way. How could they have acquired legal interest without surrender – court applied equitable defences, says that as a third party they should have been able to have relied on the Crown and thus it is a legal interest. Case turns on the nature of the interest although in this case they seem to also be really considering the nature of the remedy, concerned about what would happen to the present landowners should they grant aboriginal title.

Forgeries under Common Law

At common law, where no registration system exists, P wants to buy Blackacre from V – P has to ask for title duties because under common law that’s how you acquire good title. However if the deed is forged and you are not aware of it, under common law it won’t matter because the risk is still on the buyer. At common law it was necessary for a purchaser to chase back through the history of the title to expose any defect in title that may have existed and could invalidate their interest. However even if you go all the way back the title still may be invalid, at some point someone could have not had the mental capacity or there could be an old forgery, could run into an old nemo dat principle that invalidates the whole thing – creates a lot of risk. To mitigate that risk two other approaches developed, 1) deed registration system – this system gives priority to the first person to register. It’s a good way to incentivise registering but there is still a risk of forgery etc. 2) torrent system – system is still in use today

Torrens System

Under the torrens system the state plays an active role in guaranteeing title. BC Land Act – s.54: whenever Crown land is sold or granted for the first time, the land is transferred into land/title system and when it is a certificate of title is issued. Title becomes stored in the land/title office and the system attempts to guarantee that the person listed as the registered owner is the person who actually owns the land. The register will reflect the new owner whenever there is a transfer, with the goal being to simplify the system and not have to look back at the history of title transfer, instead to provide certainty of title by shifting the risk from the purchaser to the owner of the property. The starting point is the system of registration where all title is issued by the state and registration is the step that creates the interest. Land Title Act – s. 20, s.22, s. 28: makes it clear that legal and equitable interest doesn’t pass until registration (legal lease less than three years is exempt). Says that in order to get an interest you have to register and priority is determined on the time of the registry, have to register under this system, it can’t just pass from person to person. As of January 2004, certain kinds of transfers now need to be registered electronically.

Three Main Principles of the Torrens System

1) Curtain principle – you draw a curtain behind the last transfer so that whoever is the registered owner of the fee simple has indefeasible title. Once you are registered the state is going to certify the fee simple of whoever is the registered owner and guarantee that you don’t have to worry about the past. This allows you to not worry about chain of title, subject to some express stipulations. 2) Mirror principle – what you see at the registers office is supposed to be a mirror reflection of what the interest actually is. There are some exceptions but generally the register reflects that interests that exist and the state vouches for this. 3) Net/Insurance principle – when for some reason, someone is deprived of land, the person who is deprived is compensated. If both parties are innocent, the risk is now on the original owner however there is this net principle there to help them.

Indefeasible Title – Statutory Exceptions

Indefeasible title means that it cannot be defeated, the person named in indefeasible entitled to the land but is subject to exceptions in s. 23(2) (not exact mirror image). Exceptions – 1) anything contained in the original Crown grant is still operable even if it is not reflected of the register – ex: original crown grant reserves gravel on the land or reservation for the building of a road. 2) Any federal or provincial tax rate or assessment is still operable, so if they owe a federal tax on the property, it is still owed. 3) A lease or agreement to lease for a term not exceeding three years is also operable if there is current occupation under the lease or agreement, this is to protect short term leases (lease and option to renew

are factored together). 4) A right to expropriation or escheat, 5) if someone comes along and there is fraud or forgery that the registered owner has participated in to any degree.

Fraud

Where it is not the actual owner who makes the transfer but somebody else does it fraudulently, as long as the purchaser is innocent, you can either use immediate indefeasible title or deferred indefeasible title. It is essentially a policy decision which one you resort to, if it is immediate defeasibility then as soon as the buyer is registered they have defeasibility, if it’s deferred then you still get the same title unless someone else stands up and claims fraud. The debate is about when the curtain goes up, under a deferred system it doesn’t go up right away it waits for no fraud issues. Land Title Act, s.25.1 (1) – outlines something more similar to deferred indefeasibility, says that you can’t rely on a void instrument to acquire title. S.25.1(2) however says that if it is done in good faith, for valuable consideration, suggesting immediate indefeasibility can apply. If immediate infeasibility applies then the original owner gets caught in the net and under s. 296(2), provided they are barred from getting their land or possession back then this section allows them to recover damages against the person whose fraudulent behavior causes it. You look for the rogue for compensation first but if they disappear or are too broke, then remedy is provided to you by the government. The previous sections both refer specifically to fee simple owners, so what about other charges – people who have anything less than a fee simple. S. 26(1) – you can register as a charge (for leases, has to be over three years), and then you are deemed to be entitled to the estate with respect to the interest made. This begs the question of what “deemed to be entitled” means.

Cases Involving Fraud

Credit Foncier v Bennett – rogue forges a mortgage of the original owner, and then that mortgage is subsequently sold and registered. The original owner gets it back because they can rebut the indefeasible title by showing that it is based on a void instrument (forged). Court interprets ``deemed to be entitled`` wording in s. 26(1) with relation to charges to mean deemed to be presumed, thus setting up a rebuttable presumption. So for charges they are presumed to be indefeasible if registered, until the contrary is proven – which it is in this case. After Credit Foncier, s. 26(2) is added, says that registration of a charge does not necessarily bring with it a state guarantee, doesn`t necessary create an enforceable interest in land. S. 27(1) – what registration of a charge actually does is give notice to every person dealing with the title of the land affected. Gill v Bucholtz – rouge transferred the fee simple title from Mr. Gill to Ms. Gill who has collaborating with the fraudster. Ms. Gill then goes out and enters into several mortgages with others. Under s. 23(2)(i) the title is subject to it being shown that there is no fraud, so Mr. Gill is restored free and clear and not subject to the mortgages even though the mortgages are totally innocent. If Ms. Gill had not participated in the fraud then s. 23(2)(i) would not have applied to her or the mortgagees. Case is an example of not fully embracing the torrens system, in some other countries’ systems, because the mortgagees did nothing wrong, Mr. Gill would have been left to sue the fraudster and the government but title would have already became indefeasible. In this case the mortgagees would have argued s. 26(1) but they would also have had to look at s. 26(2) saying that it doesn`t count if it’s a void instrument and s. 25.1 which also lists a void instrument as an exception.

Difference between Charges and Fee Simple under Land Title Act

S. 23(2) is directed at giving indefeasible title to a holder in fee simple, exemptions for void instruments are included in s. 26(2) and s. 25(1). S. 26(1) outlines that charges are ``deemed to be entitled``, this gives them weaker title by using the word deemed. This section also is accompanied with s. 22 which says that not always is title passed upon registration and s. 25(2)(b) which says that if they act in good faith it`s fine. The result is that BC operates in a partial torren system where not everyone is protected; a registered charge does not obtain the same degree of indefeasibility as a fee simple owner. When dealing with charges, essentially the nemo dat rules still apply in relation to fraud. Following Gill ruling, mortgagees start looking for title insurance or anything for protection from getting stuck with fraudulent mortgages.

Recap

Rogue poses as A and forges fee simple transfer to B. Under torrens system, B gets immediate indefeasible title according to BC Land Title Act s. 23.2 subject to the exception that the new owner has not participated in fraud. S. 25(1) supports this – says if you have a void interest, you cannot acquire an interest in land by registering it. S. 25.1(2) – even though an interest specific to a fee simple is void, the transferee is still deemed to acquire that interest as long as it is done in good faith (fraud won`t matter if the purchaser acquires it honestly). One lingering doubt – s.26(1) – language of ``deemed to acquire interest in the estate`` rather than indefeasible interest with respect to charges. Some scholars have interpreted this as a rebuttable presumption. So B would get the property, because they didn`t know about the fraud, and A has to show for his claim through insurance fund that i) he has been deprived of an estate or interest in land and ii) that because of the legislation itself, A couldn`t otherwise recover. If we are dealing with a charge, then B could grant mortgages to C and as long as B was acting in good faith, C also acquires a mortgage because due to immediate indefeasibility it was B`s to give. If it had been the same scenario but B was aware of the fraud, B still becomes the registered owner but subject to 23.2(1), it makes the title defeasible. A can make a claim and recover to get their property back if they can show that B is involved in the fraud. If B is creating mortgages (or any charges) to C, they don`t have the same protection as a fee simple and so nemo dat applies and C gets nothing even though C acted in good faith. C also would not get access to the insurance fund because he is not deprived of an interest by the legislation but by the common law. If B had transferred a fee simple to C, even where B is a fraudster, it`s the same as the first scenario and C gets indefeasible title.

Notice of Prior Unregistered Interests

Our principles say that we should be able to look in the register and see if there are any prior interests but what about unregistered interests. Normally the curtain will drop and it won`t matter but it is different when you have notice of these unregistered interests. Under the common law, you look at actual, implied and constructive notice (reasonable person). Under the torrens system, BC Land Title Act s. 29(1) – registered owner also includes someone who has put in an application to be registered. S. 29(2) – if you are acquiring a fee simple or charge, you are not effected by any unregistered notice

unless it is fraud or except i) when a registration is pending, ii) a lease for a period not exceeding 3 years, iii) deals with squatters rights, but so reduced we don`t have to worry about it. So except in fraud and those three situations, unregistered notice will have no effect. Issue becomes whether simply having notice of an unregistered interest and then going ahead and registering can constitute fraud.

Cases Involving Unregistered Interest

The Hudson`s Bay Co v Kearns & Rowling (1896) – BC Supreme Court says that the English principle that ``a person who purchases with notice of the title of another is guilty of fraud`` applies – but this case is decided way before s. 29(2) of the BC Land and Title Act. Sections of other Canadian Land Act`s seem to generally say that mere notice is not fraud, but doesn`t say that in BC. Jager the Cleaner v Li`s Investments – court recognizes Hudson`s Bay case but says that this doesn`t apply to every case. Says it will depend on the circumstances and facts particular to the case. Says there are certain situations where it would not be fraud such as when the holder of an unregistered interest does not plan to assert it or where you make a substantial investment and only after find out there is an unregistered interest. In some situations like those, it may be the responsibility of the person who has the unregistered interest to register it and instead they suffer. Szabo v Janeil – two adjoining lots that started as one, company put a water pipe across lot A to service lot B. Years later after subdivision, owner of lot A makes an agreement with owner of lot B to grant a water easement in exchange for a hydro easement. The document is done up but never registered and then lot B is sold to new owners, who are aware of the waterline but not the existence of an agreement or part performance. Court determines that new owners still had constructive notice because they were aware of the pipeline and knew there had been negotiations, so a prudent party would have done some checking to find out if there was an unregistered interest. Court determines that it is notice, but looking at the conduct of the parties, there is nothing to show that they had been dishonest in their conduct and therefore it is not fraud and they are not bound under s. 29. Holt Renfrew v Henry Singer – lease renewal is not registered because they didn`t think it was necessary and the building is sold, the new buyers are told of the existence of a long term lease but don`t know how long, search the title and find no registered interest and then buy the building with a price reflecting their belief that there is no other interest. Court determines knowledge of an unregistered interest but that notice here doesn`t constitute fraud (Alberta case where that is written into the Act), case is used as an example that there needs to be reliance for there to be fraud.

Registering non-Proprietary Interests and Aboriginal Title

There are several categories of estates or interests in land that can be registered under the Land Title Act including fee simple interest and charges – covenants, life estates, mortgages, easements, leases, liens. The Land Title Act also specifies certain things that cannot be registered including: 1) equitable mortgages created by deposit of duplicate certificate of title (s.33). Instead of registering the mortgage the bank holds on to the additional copy of duplicate certificate of title – this section means that the house can’t be transferred to sold without that duplicate title held by the bank, so if a duplicate of title exists, you can’t register without it. 2) Trusts (s. 180) – in registering the trustee, the registrar must add an endorsement containing the words “in trust” and reference by number to the trust instrument, which

instrument must be filed with the registrar. S. 180 says it is possible to register a trustee, with this reference to the trust instrument.

S. 215(1) – A person who has commenced or is 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 to land, may register a certificate of pending litigation against the land in the same manner as a charge is registered.