PROPERTY CAN – Wood 2017/2018 FULL CAN

WHAT IS PROPERTY (1.1-1.3)

Property – an enforceable claim of right to hold, use and/or benefit from some item, which will be enforced
by society or the state by custom, convention, or law
Property Law – a system of rules creating and regulating relationships among people regarding access to,
use and disposal of items

Property as a Bundle of Rights

 Points of Consensus on Bundle Contents
o Right to exclude others from access/use | immunity against unauthorized taking
o Right to consume, use or enjoy | duty not to use as to harm others |maybe right to destroy?
o Right to transfer |by sale, gift, or will |entire interest or a portion |can be arbitrary (lottery in a will)
 Property rights > possessory rights | property is a norm while possession is a fact
 Public property = gov’t has the bundle of rights | common property = all members of a group have rights

Three Schools of Thought About the Right to Exclude

 Single Variable essentialism: right to exclude is core attribute of property; both necessary and sufficient
 Multiple-Variable essentialism: right to exclude is necessary but not sufficient; other rights necessary
 Nominalism: right to exclude neither sufficient nor necessary; each legal system picks what is in bundle

Yanner v Eaton [1999 Australian HC]:**AUSTRALIA** What interest in fauna

does gov’t have after Fauna Act said ‘is the property of the Crown’?
M: Crown had only partial property interest in fauna: in this case property was
a label for a bundle of limited wildlife management rights | nominalism
D: ordinary meaning of property applies so Crown can exclude others from
using fauna | essentialism

Harrison v Carswell [1976 SCC]: do striking workers have the right to picket in a
private shopping centre?
M: cannot distinguish from Peters v The Queen (boycotting grapes in front of a
Safeway) and thus should follow the precedent: owner of a shopping mall has
sufficient possession of public area to force member of public to leave by invoking
trespass
D: need to weigh interests involved (freedom of expression and property ownership)
and distinguish from Peters because here is a labor dispute: mall owner can only
exclude for misbehavior or illegality and the strike was sanctioned by law
NOTE: BC Labour Relations Code says no action for petty trespass on land the public is
allowed upon for valid strikes, lockouts, or picketing
AFTER HARRISON: amendments to Man Trespass Act saying can communicate true
statements outdoors on property normally open to public without trespass action

Justificatory Theories of Private Property: property is enforceable because it is thought to be a human right
1. Discovery/occupancy: first to discover and possess a thing owns it (rare today but used for land law in
the ‘New World’) | doesn’t justify transfer or inheritance or rights of use/disposal
2. Lockean Labour: when you mix your own labour with something from labor you make your property =
entitled to fruits of labour | issues with multiple peoples’ labour | doesn’t justify transfer or inheritance
3. Liberty/Autonomy: private property necessary for human freedom and independence | tension w/
equality
 4. Social Contract: original owner gains property via consent of all (necessarily fictitious)
5. Historical Entitlement: chain of legit transactions confers property | doesn’t justify original acquisition
a. Variant: ‘legal precedent’ = property right only valid if has already been recognized by courts
6. Social Welfare/Utility/Efficiency: Private property maximized social happiness and productivity b/c
puts resources in hands of those who value them most | ignores inequality and distributive justice
7. Economic Efficiency: dominant justification for PP | protects exclusivity by enforcing individual
entitlements; universality b/c as many owners as possible can exchange goods; transferability b/c
goods move to those who value them most (these are three features of efficient property rights)
a. Is private property the key to (economic) development? Capitalism unsuccessful in non-
Western world b/c wealth on margins of legal system |no title = no collateral = no loans = no
investment

Tragedy of the Commons/Anti-Commons

 Tragedy of commons: everyone individually rational in common ownership = overconsumption =
ruination
o Misnomer: a commons has rules about access while an open-access area does not and thus gets
ruined
 Tragedy of anti-commons: too many ownership rights stop innovation (patent thicket): Michael Heller
 Comedy of commons: waterways and roads only work b/c held as commons to whole community: Carol
Rose

Types of Property
 Common property = each member of ownership group has right to access and use collectively
established rules
 Non-property/open access = no individual has duty to refrain from accessing or ability to stop others
from accessing
 State/public property = state determines rules of access and duty to manage resources for the public
(individual members must obey access rules)
 Private property = owners have exclusive right to exclude non-owners but can only do socially
acceptable uses

NOVEL CLAIMS (1.4)

Novel Claims Re: Spectacles

International News Service v Associated Press (INS v AP) [1918 US SC] **USA**
F: INS reading AP papers on east coast and publishing on west coast
I: what is the degree of property in the news
M (Pitney): service of news reporting is valuable but if stolen INS may go out
of business (social utility/efficiency) | takes effort to create news (labour
theory) | publication isn’t abandonment b/c have to look at position
between competitors not between publisher and public | INS is free-riding =
unjust enrichment | unauthorized interference and unfair competition
**note that doctrine of unfair competition only in USA** | there is quasi-
property in the news (is property while it’s ‘hot’; property against
competitors)
D (Holmes): property doesn’t arise from value/labour, law has not recognized this as property and hasn’t
excluded it from interference and thus not property | just has to acknowledge source
D (Brandeis): essential element of property is legal right to exclude others, not only value/labour | after
voluntarily communicated to others not property | hasn’t been previously recognized
Victoria Park Racing v Taylor [1937 HC of Australia] **AUSTRALIA**
F: D builds tower besides racecourse and commentates broadcasts with live radio reports of races and odds;
P loses business
I: Is there property in a spectacle?
M (Latham + C Dixon): no property or quasi-property in spectacle | can just build a higher wall |not direct
competition b/c one spectacle and one is broadcast = different markets | not complete free riding because
putting in effort | P may lose money but not go out of business | property comes not from value/effort but
from legal recognition
D (Rich): platform is unusual interference with P’s right to pursue profits/enjoyment of land |
unprecedented claim but is nuisance

Pittsburg Athletic Co v KQV Broadcasting [1938 PA] **USA**

F: one company given exclusive broadcasting rights of games and another had people stand outside and
broadcast themselves
A: SAME PRODUCT which is live broadcasts distinguishes from Victoria Park |directly interfering with a
contract |following doctrine of unfair competition (only USA thing) | held to be unlawful

Chicago Cubs Wrigley Field Rooftops **USA**

F: people who owned houses next to Cubs field and sold seats to view games on the rooftops
A: is direct competition because selling the spectacle | free riding because didn’t create spectacle| Cubs
couldn’t create a higher wall |interference with Cubs business would have depended on many factors (sell
out crowds?)
C: settled out of court for rooftop owners paying 17% of revenues and Cubs promoting the authorized
rooftops

NBA v Motorola **USA**

F: Moto and STATS gather game stats from TV and radio NBA games and transmit in real time to subscribers
over pagers and internet, no permission from NBA | NBA does not provide a similar stats service
I: Does the NBA have a quasi-property in real-time game stats as against Moto and STATS?
R: Five elements to “hot news” INS-type claim: 1. P generates/gathers info at a cost | 2. info is time sensitive|
3. D’s use of info is free-riding |4. D is in direct comp with product or service of P |5. ability of other parties
to free-ride on P’s effort would substantially threaten existence of quality of product/service (‘not worth it’)
A: not direct comp b/c different products (info about game vs spectacle) | not free riding b/c calculating and
disseminating themselves | not taking business away from NBA people who want to go to the game will still
go (direct comp not really there)
C: NO quasi-property |Moto and Stats allowed to do this

Morris v PGA **USA**

F: PGA has volunteers gathering stats at each hold and relaying (using expensive and complex system) to
onsite media centres to give to authorized medial companies who broadcast on websites but cannot sell to
third parties. Morris is a media company which is suing to make PGA allow it to syndicate real-time data and
stats
I: Does the PGA have a quasi-property right in the stats it complies?
A: there is direct competition both providing real-time stats to other companies | free-riding because PGA is
gathering and compiling stats |different from Moto because PGA is already compiling the stats and Morris is
doing nothing
C: has property right in stats (vanishes when scores are in the public domain) but doesn’t have to give to
Morris
 AP v INS Victoria Park Pittsburgh v Wrigley NBA v Morris v PGA
KQV Rooftops Motorola/STATS
(Cubs)
Direct Yes- Directly No- they are YES- they were Yes- same No- NBA providing YES. Both have real
Competition competing to both in the creating a marketplace the spectacle, time stats
make profits business of competing same time- both Motorola providing syndication services.
from the same providing a broadcast watching live the stats. Different Morris trying to
product in the spectacle. BUT (directly baseball products, serving literally take their
same field at one is creating a competing with different market, stats and sell them.
the same time race itself, the each other to not taking business
other is provide the exact away.
broadcasting an same good)-
account of the distinguish the
race. Different broadcast
products, account of the
market for each game from the
is somewhat actual game- two
different. different
products with
two different
markets.

Free Riding Yes- cannot Not entirely- Put in effort to They built NBA providing PGA employs
allow INS to put in the effort create own signal stands and spectacle, M and S hundreds of staff to
reap where it to build the (not following renovated… but providing statistics. gather and compile.
has not sown platform and entirely) they are selling Putting in effort of Morris just trying to
(taking fruits make their own experience of generating the stats package and resell.
of someone broadcast. live game themselves (created
else’s labour) done NOTHING system for
to contribute to dissemination to
experience? subscribers)
Argument it
enhances
experience of
paying
spectators.

Degree of So substantial Nobody Directly They are not Not interfering with Yes.
Interference that it would suggesting VP interfering with a taking any NBA’s ability to
put AP out of will go out of contract business away- make a profit-
business business (not so already sell-out people not
severe it will crowds. Argue dissuaded from
take away all possibly going to games
profitability) stopping cubs because of the stats.
from raising
prices and
expanding
stadium b/c
increasing
seating?
Self-Help Just build a Wall? They
taller wall- law tried, prohibited.
will not make a Can’t self-help
wall for them. here.

Doctrine of YES NO YES YES Maybe? Maybe?

Unfair
Competition
Used (USA only)

DECISION Against For thieves Against ‘thieves’ Settled out of For thieves Against ‘thieves’
‘thieves’ court
Novel Claims Re: The Human Body

Moore v Regents of University of California [1990 Cali] **USA**

F: P had leukemia and doctors at UCLA removed his spleen and tissue
samples during treatment | they developed and patented a profitable cell
line | although had consent for surgery never disclosed research or
commercial use of tissues | brought P in to get more tissues for cell line
without telling him the reason | early in claim, D made move to dismiss
b/c no action but failed – this means facts of case are recognized as true
I: claim for lack of informed consent, breach of fiduciary duty, and
conversion (latter allows to share in profits)
H: no claim to conversion b/c right to tissues ends after they are removed
from body | claim allowed for lack of informed consent and breach of fiduciary duty
A (MAJ): no precedent for this | legislation says once excised P has no control of tissues anymore | cell line is
what is unique and this cell line is distinct from the cells excised || interest in human autonomy adequately
served by other causes of action and outweighed by social utility in scientific research | this should be left to
the legislature not judiciary | recognizing property rights allows Moore to free-ride on effort of others
A (MIN): no precedent for this but also none against it | he could have done the same contracting as the
doctors did and thus control is equal for both | uniqueness which made cell line profitable was the
uniqueness of his spleen cells and thus line is not distinct from the original cells b/c has the same properties
as his cells || patents are hindering medical research so should grant property rights to respect dignity of the
human body | courts have a duty to recognize claims they think are sound and just | this is not free-riding it
is unjust enrichment if we do not recognize the property right b/c Moore made a substantial contribution

Henrietta Lacks
 Without notice or consent doctor harvested cancer cells from poor, dying patient and developed
them into a cell line that generated massive scientific advances and profits | family never received
compensation, released a book hoping people who benefited would do something to honour her |
according to Moore people have no legal obligation to do so

JCM v ANA [2012 BCSC]

F: a lesbian couple had extra sperm straws at a sperm bank | they are breaking up both want the straws |
Canada has laws against buying sperm and other bodily things
I: are the sperm straws property for the purposes of the property division agreement?
A: sperm was treated as property from everyone else involved | just because there are limits on the types of
usages that can be made doesn’t mean not property | once a person gets sperm by purchase or donation it is
property to use as they see fit | should be divided equally in division agreement

Lam v UBC [2015 BCCA]

F: P deposited sperm at a sperm bank and the freezer malfunctioned and destroyed the sperm
I: is the sperm property for the purposes of commercial warehousing legislation?
A: just b/c cannot trade goods in marketplace doesn’t mean not property | each donor still had substantial
rights over what happened to sperm and thus had substantial ownership | yes, they are property

Harvard Mouse  cannot have property rights on higher life forms

The Irreversibility of Commodification – Bruce Ziff

 Numerus clausus (the number is closed) principle means that in order to show a property right the
person must show the interest fits in an already existing ‘legal box’
  Numerous clausus comes from civil systems but now has been borrowed and adapted for common
law as well (not as strict  door has been left slightly ajar)
 There is a valid economic efficiency argument for numerus clausus  if people didn’t know what
could be determined to be a property right there would be significant external costs on people who
are concerned about it (but the other side is that legitimate objectives might not be met if it was
strict)
 Irreversibility is also a valid argument: doctrinal mistakes are hard to reverse so must be cautioned
against recognizing too many new property rights

Te Urewera Act, 2014 (NZ)

 The Act created and established a legal identity and protected status for the Te Urewera park
 Given all the rights, powers, and duties of a legal entity (exercised by a board)
 Land no longer belongs to the Crown but instead belongs to the land itself, inalienable

SOURCES OF CANADIAN PROPERTY LAW (2.1)

English Feudal Land Law

 Vassal/tenant gave land, loyalty and services to lord in exchange for protection
 Vassal then held the land ‘of’ the lord
 After the Norman conquest (1066), the King emerged as supreme lord of all land
 The doctrine of free tenure is one of the most basic features of English law that was received into
Canada (unfree tenure never received)
o The only form of tenure that was introduced into Canada was socage – vassal serving lord’s
needs for subsistence and other residual needs
 There were also obligations called incidents that benefited the lord
o During a tenant’s life there was homage (becoming a tenant), fealty (oath), suit of court, aids
(money)
o After death
 Escheat (land back to lord if no heir)  precursor to modern intestacy
 Relief (before land goes to heir, lord gets 1 year income)  precursor to inheritance
taxes
 Forfeiture (land returned to lord if tenant convicted of a felony
 Wardship (lord managed land for himself during heir’s minority
 Marriage (lord selected ward’s spouse)  grew into a market in itself
 Statute Quia Emptores in 1290 abolished subinfeudation  can only substitute but got rid of need for
lord’s consent for substitution
o Fundamental part of Canadian land law  expressly received sometime in 1800s
 The Tenures Abolition Act of 1660 abolished incidents and converted all free tenures to socage with
no services and no special incidents (except escheat to the Crown)
o Therefore, socage was the only kind of tenure introduced in Canada

Similarities to English Feudal Law in Current Canadian Law

1. Crown has underlying title to all land (comes from King being the ultimate lord and all land
being held in free and common socage)
2. Substitution is the sole way to transfer interests in land (from Quia Emptores)
3. Statutory equivalents of escheat (Wills, Estates, and Succession Act; Escheat Act)

Reception of English Law

 Rules of Reception
o Conquered or ceded (surrendered) territories retained pre-existing legal regimes until altered
  Quebec retained key elements of civil law
 FN has treaties seen as surrendered but in reality FN legal systems ignored until 1970s
o Settled territories had English statutes and common law received insofar as were appropriate
 In practice generally received without question
 In BC: Law and Equity Act, RSBC 1996, c 253
 2. Subject to section 3, the Civil and Criminal Laws of England, as they existed
on November 19, 1858, so far as they are not from local circumstances
inapplicable, are in force in British Columbia, but those laws must be held to be
modified and altered by all legislation that has the force of law in British
Columbia or in any former Colony comprised within its geographical limits

English Property Law and the Suppression of the Canadian Legal Identity – Bruce Ziff
 general trend is that English law is the law in Canada, with a few exceptions
o esp in Ontario seemingly outdated laws accepted and applied without question
 The Newfoundland anomaly: b/c a fishing colony unlike all others, had policies based on this which
included a lack of permanent settlement and no land titles for first 100 years
 Why adhere (blindly?) to English Law?
o Instrumental reasons: why reinvent the wheel? Too costly and time consuming to reconstruct
such a complex system of property law
o Ideological reasons: strong belief in Britain and colonies that British legal system and common
law superior (imperialist and supremacist ideas)

PROPERTY, CLASS AND POVERTY (2.2)

Victoria (City) v Adams [2008 BCSC]

F: there are 5-8 homeless ppl for every 1 shelter spot in Victoria | homeless ppl set up a tent city in Cridge
Park | were evicted 2 weeks later | 10 charged with contravening a bylaw that says no person may ‘take up a
temporary abode overnight’ in a public park (anything laying over body is fine but shelters overhead not
allowed)
A: D are not trying to assert a property right b/c they are not trying to exclude others, no evidence shown
that use of park is depriving others of using it | only trying to say that City cannot assert its rights in a way
that interferes with their ability to be safe and warm | the bylaw prevents ppl from exercising their right to
protect their bodily integrity (sleep and shelter, protection from elements) and thus violates s. 7 of Charter
NOTE: 2 days after the decision a new bylaw enacted stating can put up overhead shelter only from 7pm-
7am and not in certain places | arrested an evicted again from a different park following this new bylaw
NOTE 2: the court decision said have right to have shelter when sleeping, not only while it is night! But
issues of disturbing others relate to time of day…is the new bylaw an appropriate solution?

Abbotsford (City) v Shantz [2015 BCSC]

F: homeless ppl sleep in tents, boxes etc in parks and public areas, city bylaws prohibit sleeping or being
present in public space overnight and erecting shelter without permit | city first tried cajoling, pepper spray,
even chicken manure | then went to the courts to try to prevent the homeless people from erecting shelters
in public parks | homeless group countered saying that the bylaws violated Charter s. 7
A: the bylaws are overbroad and they do breach s. 7 | denying overnight access to public spaces and denying
shelters is grossly disproportionate to benefit City gains (doesn’t pass minimal impairment of Oakes test) |
City must allow homeless to erect temporary shelters between 7pm-9am and this strikes a good balance

Homelessness and Freedom – Jeremy Waldron

 To be free, people must be free to do things  and to do things, you must have a space to do them in
 Homeless people only free to extent that they have the right to do activities in public spaces
  People who say that we must tolerate inequality often say we should not tolerate homeless people
using public spaces to fulfill basic human needs  a matter of human agency and freedom
 Adams  more about needs than rights (can camp only insofar as City failed to meet needs for
shelter)
 Shantz  more about security of the person (positive acts to protect from the elements) than liberty

Other Topics
 Most major Canadian cities now have anti-panhandling laws with common elements
o Time restrictions  not at night (anxiety about assault and robbery)
o Place restrictions  not where anxiety about beggars is highest (ATMs, public transit)
o Manner restrictions  cannot be aggressive like following, persisting, threatening
 Ontario’s Safe Streets Act - R v Banks
o Ontario CA ruled that ban on squeegeeing in the roadway was justified by goal or regulating
pedestrian-car interaction and that it overrides freedom of expression of the squeegeers

BASIC DIVISIONS OF PROPERTY LAW

Real Property (realty)

 Largely land, heirloom, keys to a house – usually land and
things affixed to the land
 Hereditaments: on death, descends to the heir
 Corporeal – A right to physical possession
 Incorporeal - Property right w/o possession, less than
possession (ex. right of way, easement, “mineral rights”)

Personal Property (personalty)

 Chattels Personal
o Choses in Possession
 Personal property that you hold (physically), tangibles
o Choses in Action
 Items of personal property that one can only enforce through court, intangibles
(trademark, copyright, shares in company)
 Things you can’t physically possess
 Chattels Real
o A lease (it’s a K, but it’s also property b/c you can enforce it against the world)
o Remember, originally leases were outside the feudal system (therefore not in realty)

Sui Generis  “Of its own kind”

 Aboriginal title – historically used to defend the fact that aboriginal rights are not property rights
 Other

PROTECTIONS FOR PRIVATE PROPERTY (2.3)

Introduction
 Canada’s constitution doesn’t have a provision for defending property rights (still protected by
statute and common law though)
o Note that Aboriginal Rights are protected (section 35)
 Property rights excluded from the Charter (unlike USA 5th Amendment)
 o Still indirectly affected by various Charter rights (s. 8 unreasonable search and seizure, s.2
freedom from expression (limits state’s right to control public property though leafletting and
picketing), s. 15 right to equality (anti-discrimination)
 With a lack of constitutional protection, statutory protection can be modified or repealed by
legislature

Expropriation and “Regulatory Taking”

 Expropriation: gov’t removes property from owner (entitled to compensation)
 Regulatory taking (‘de facto expropriation): gov’t action infringes on property rights to the point
where it is de facto taken
o At some point, excessive regulation becomes essentially equivalent to confiscation (removing
all ability to exercise the ‘bundle of rights’ and just leaving the bare title
 USA regulatory taking law requires compensation to be owed despite no transfer of property
o Note that in USA regulatory taking as an entrenched definition (Constitution)
 In Canada, non-charter entrenched protections capable of being overridden by express legislation
o No rule against ‘regulatory taking’ without compensation  regulatory taking never held to be
sufficient to constitute expropriation
o However, real and personal property cannot be taken without compensation
 USA has a more articulated doctrine of regulatory taking with the Penn Central test:
o What is the potential economic impact of the state action?
o What extent does it interfere with reasonable investment-backed expectation?
o What is the character of the gov’t action?

United States Cases

Pennsylvania Coal Co v Mahon **USA**

F: homeowners in Scranton, PA sue to prevent Penn Coal from causing homes to subside (settling of land
and house structures causing damage) due to coal mining | such subsistence was rare and companies took
great care to avoid it | there was a Kohler Act which said cannot mine coal if it causes subsidence of a house |
coal company had combo of property rights (right to the coal underground) and contractual rights (right to
no liability for damage done) but the Kohler Act admits to destroy these rights
A (MAJ): the act makes it commercially impossible to mine certain coal and thus has the same effect as
completely destroying the property right to the coal | thus because in USA there is a principle for
compensation giving when there is a regulatory taking of property Penn Coal must be compensated
A (DIS): every restriction on use of power has some deprivation of rights, but restrictions to protect public
health and safety is not a taking | just a prevention from making a use which interferes with right of public |
no compensation

Lucas v South Carolina Coastal Council **USA**

F: P purchases some coastal land for development | two years later gov’t passed Beachfront Management
Act, which allowed council to designate lands to be unavailable for development | legislation had direct
effect of stopping P from building any permanent structures on his land
A: following Mahon, there are two types of per se compensable regulatory takings: physical invasion AND
when regulation denies all economically beneficial or productive use of land | Act is a taking and P gets
compensation

Canadian Cases
 Differ from American cases b/c extensive regulation of land use is the norm here (not a ‘taking’)
 Standard is higher here: needs to be more than deprivation of all economic value
 o Test: has the owner been deprived of the ENTIRE bundle of rights such that there is a virtual
extinction of idenfiable rights?

Mariner Real Estate Ltd v Nova Scotia [1999 NS CA]

F: prov enacted Beaches Act, which said there could be no development on public and private beaches
without approval from Minister | P applied to build houses on Kingsburg Beach but were denied due to a
study which said that was in best interest of public and property owners to have no construction b/c of
sensitivity of land forms
A: Canadian law considers only two things: valid legi action may significantly restrict owner’s enjoyment of
private lands AND courts may order compensation for such restriction only where authorized to do so by
legislation (here what applies is the Expropriation Act) | USA and Australian constitutions have protections
for property but Canada does not | loss of economic value ≠ loss of land under Expropriations Act | to have a de
facto expropriation in Canada must be a confiscation of “all reasonable private uses of the land in
question” AND there must be an acquisition of interest in land (enhanced value not enough) by the
expropriating authority (Crown) | applying this, they still have some rights (campfires, singalongs) and the
Crown didn’t acquire anything so NO COMPENSATION
R: Test for de facto expropriation in Canada: must be a confiscation of all reasonable private uses of land
(entire bundle of rights) AND there must be an acquisition of some interest in the land (more than just
enhanced value) by the Crown

R v Tener [1985 SCC]

F: Tener held a Crown grant of title to subsurface minerals and rights to use surface land to extract them | in
1973 BC included land in prov park so mining prohibited, denied permit to authorize it for Tener
A: Reaquisition of property right was enough to mean the Crown acquired a right | denial of park use permit
amounted to recovery by Crown as a part of the right granted originally

Canadian Pacific Railway Co v City of Vancouver [SCC 2006]

F: in 1886 prov Crown granted CPR a corridor of land for a railway, called Arbutus Corridor | eventually
discontinues the railway | CPR wants to sell to the city | City passed a bylaw designating corridor as public
thoroughfare for transport and greenways (everyone agrees this confined CPR to only uneconomic uses of
land)
A: two part test: acquisition of beneficial interest in property or flowing from it (by gov’t) AND removal of all
reasonable uses of property (from private owner) | b/c there are still reasonable uses and City has no
beneficial interest, neither requirement met and thus not de facto expropriation
NOTE: there is also legislation in Vancouver Charter which protects Van against claims of regulatory taking
so even if facts supported it, interference negated by express legislation

Manitoba Fisheries v R [1979 SCC]

Recognized that a fish marketing company had a property interest in the goodwill it generated by operating
business and Crown, by nationalizing fish marketing industry, had in effect taken goodwill = compensation
Class Discussion: What Should be the Legal Standard for De Facto Expropriation in Canada?
1. Standard of Deprivation: keep Canadian (entire bundle) OR American (economically productive)?
2. Acquisition by state: should this be an element or not?
3. Personal property: should the same rules apply as they do to real property?

Constitution of the Republic of South Africa

o Tried to balance redistributive policy and guaranteeing security of title for existing owners
o Say cannot be deprived arbitrarily, only though law of general application and expropriation must be
for a public purpose or in the public interest
o People in communities with insecure title entitled to get secure tenure or comparable redress
o People who were disposed of property have similar entitlement

BOUNDARIES: AIRSPACE & SUBSURFACE (3.1)

 Land title documents typically only recite lateral dimensions, not air or subsurface rights (sometimes
mineral rights are mentioned)
 So how to determine who owns airspace and subsoil?

Airspace

Didow v Alberta Power Ltd [1988 AB CA]

F: D erects power lines alongside P’s farm | the cross-arms and wires intrude 2m into airspace 15m above
the farm | P sues for a declaration of trespass
L: jurisprudence falls into two categories: permanent structural intrusions into low level airspace (almost
always considered a trespass) and transient intrusions into airspace (decisions differ, usually a trespass if
interfere with normal use and enjoyment of land but not otherwise
A: two legal principles that could apply: cujus est solum, ejus est usque ad coelom et ad inferos (owner of land
owns everything above and below) OR an owner of land only owns airspace that is within ordinary use ||
crossbars analogous to permanent physical intrusion not aircraft; use ordinary use test b/c Latin maxim
should not be given literal effect with new tech | determine natural use of land based on land use patterns in
the area, reasonableness | here Didow couldn’t plant trees, operate machinery, and aerial seed/spray fields
as he could before | thus is a trespass b/c interferes with ordinary use
R: an owner of land owns the airspace above it to the height that is within ordinary use of the land only
NOTE: after this ruling the gov’t just changed the laws and created a statute saying was allowed

Other Airspace Cases (some cited in Didow)

Lacroix v R [1954 Eng] **ENGLAND**
 Planes flying overhead for final approach not a trespass b/c owner does not own unlimited air space
above but only what he can “possess or occupy for the use and enjoyment of his land”

Lord Bernstein of Leigh v Skyviews & Gen Ltd [1978 Eng] **ENGLAND**
 Sued company who flew over estate to take pictures of property | not trespass b/c at height that
didn’t interfere with use of land

Air Can v R [1978 Man CA]

 Manitoba tried to impose a tax on all commercial flights going over prov at cruising altitude | held
that airspace up that high is common so nobody can have a private property right to it

U.S. v Causby [1946 USA] **USA**

 Aircraft flying 83 feet above the surface and scaring chickens was trespass  effect of commotion on
livestock meant usage of the airspace extended to that height

Airspace Parcels
 Began being traded in the 1900s in Chicago and NYC (example is building above Grand Central
Station)
 In 1971 BC had Air Space Titles Act  owner can sever fee simple interest in airspace parcel from
interest in land itself
 Comes into play further wrt strata title and condos: land ownership divisible vertically and
horizontally

Subsurface

Edwards v Sims [1929 Kentucky CA] **USA**

F: P made tourist attraction out of entrance into Great Onyx cave which was
on his land | Lee thinks 1/3 of cave located underneath his land | Lee cannot
access caves from his land | Lee commenced action for trespass and judge, D,
(Sims) said survey should be taken of the cave
A (MAJ): ownership of caves governed by cujus est solem, but a Court of
Equity can invade rights of ownership to determine a case | this is because no
real difference between caves and mines | for mines Court of Equity can
compel mine owner to permit inspection when suit raised if claim is bona
fide, inspection necessary, and property owner allowed to have spoken in
court about the issue | all conditions met here, so inspections allowed
A (DIS): cujus est solem not true in fact or law just never been tested before|
better rule is you own everything above and below which may be used for profit or please and subjected to
control | should not apply same rules as for mining | owner of a surface should have no rights to a cave
unless he owns the entrance to it (entrance owner has discovered, put in labour into it) | Court of Equity
should not be allowed to compel an inspection

Property Law and Economics

 Coase Theorem: if there is smooth bargaining (no transaction costs), the initial assignment of
property will not affect the ultimate use of it (state allocation will be adjusted privately through
rational parties to get most economically efficient outcome)
 The initial allocation will determine who enjoys profits but not who makes use of resources
 o Ex Great Onyx Cave: if E values use of cave more than L values keeping E out of portion under
L’s land, and both rational actors, E will use the cave regardless of who owns it (and vice
versa)
 SEE DIDOW WORKSHEET
 Theorem is more interesting if you introduce transaction/bargaining costs and other factors that
interfere
o Problems with large number of parties: hold-outs; free-riders
o Bilateral monopolies (animosity gets in the way when only bargaining with one person)
o Common cognitive biases
 Ex: endowment effect (give more value to something you currently own than you
would to buy it if you didn’t own it)
o Transaction costs (costs to identify and reach bargain w/ interested parties, regulatory costs)
 Thus because of these other issues, initial assignment of property rights (statute/courts) is
important!

Do property rights matter?

 YES
o Enable bargaining to occur (otherwise more powerful person just gets property)
o Influence the bargaining environment
o Have distributive consequences (who gets profit as per worksheet)
o Can correct market failure
 How should they be designed?
o To remove impediments to bargaining
o To achieve efficient outcomes where bargaining fails (correct market failure)
o To nudge actors towards socially desirable outcomes (adjust incentives to nudge in right
direction)

LATERAL BOUNDARIES (3.2)

The Right of Support

Blewman v Wilkinson [1979 NZ CA] **New Zealand **

F: D owns land and subdivides and excavates it | P buys, knows about excavation but doesn’t retain or put
plants on bank | P builds house, bank gradually erodes (P does nothing just allows it)| P brings action for
interference with natural right of support (not negligence)
A: common law rule is that a landowner has the right to enjoy his land in its natural state, unaffected by
excavation and if excavation interferes, owner has right of action against original excavator | this should not
follow the rule in Byrne v Judd for two reasons: NZ conditions are steep and sloping and often require
excavation so it seems unfair to impose strict liability AND the law of negligence is better suited to such an
issue (negligence hadn’t expanded to this area when Byrne v Judd decided)
R: where a subdivision has been manifestly created by excavation (excavated and then subdivided and sold)
the owner is not liable to a subsequent owner under the right to support if interference occurs because of
excavation BUT negligence law applies

Byrne v Judd [1908 NZ] **New Zealand, but represents the law in Canada as per textbook**
R: if an adjacent or subjacent land has excavation which has interfered with support of land causes damage
by subsistence, the current landowner has right of action against original excavator | liability strict and
negligence need not be proven

Dalton v Angus [1881 Eng] **ENGLAND**

R: landowner has a right of support from adjoining soil but NOT a right to have the adjoining soil remain it
its natural state | “when he severs the ownership and conveys a part of the land to another, he gives the
person to whom it is conveyed…not a right to complain of what has been already done, but a right to have
the support in future”
NOTE: not sure if this means can sue for fresh subsidence caused by old digging or not (plus this is obiter)

Petrofina Canada v Moneta Porcupine Mines [1969 Ont CA] **CANADA**

F: if a landowner mines on his land and then sells surface only, owner of surface can recover for subsidence
caused by old mine (fresh subsidence caused by old excavation) | In this case the new purchaser didn’t know
about the mines

Land Bounded by Land

 There are many ways to describe land as set out in a grant, mapping with square parcels of land is
predominant method used in Canada
 When subdivided in irregular ways, may create a survey plan to allow for ease of identification and
description
 However, if descriptions are unclear or they conflict, there is a hierarchy to be followed:
o Natural boundaries > lines actually run and corners actually marked > if lines and courses of
adjoining tract called for, lines extended to them > courses and distances

Land Bounded by Water

R v Nikal [1996 SCC]

F: Aboriginal man fishing, both sides of the river are a reserve | charged with
fishing without a permit (allowed to get a free permit under Fishery
Regulations but he didn’t) | man saying Regulations do not apply to him b/c of s.
35(1) of the Constitution Act (b/c he says the river is on the reserve)
I: is the river part of the reserve? Does ad medium filum aquae apply?
A: ad medium filum aquae = presumption that boundary of a piece of land
bounded by a body of water is the centre line of the body of water. But
remember this application only applies if water is non-navigable
If water navigable  Crown intends to reserve fishery rights  ad medium
filum aquae DOESN’T APPLY
To determine navigability, look at entire length from mouth to the point where
becomes non-navigable: non-navigable waters within these limits are considered navigable (this comes
from Keewatin Power Co v Kenora)
Application: water is navigable b/c is navigable above and below reserve | river not part of reserve land b/c
Crown has reserved fishery rights | acquitted b/c infringing aboriginal rights
NOTE ALSO: right to fishery flows from possession of the bed BUT right to fishery also severable from title

Accretion vs avulsion
 Where land is granted using body of water as a boundary, title extends to the land as added to or
detracted from by accretion (Southern Centre of Theosophy v South Australia)
 Accretion must be gradual and imperceptible (based on convenience and fairness)
 If instead the water changes via avulsion (substantial and recognizable change in boundary), the
original location becomes a fixed boundary  also means cannot be changed by further accretion
(Robertson v Wallace)

Robertson v Wallace [2000 AB QB]

F: two properties were bounded by a river – D got west and north of west bank of river and P got east and
south of west bank of river | two events occurred: an oxbow in river broke which added to land in west
bank; island in existence at time of grants became part of west bank (river now running east of both) | D
claimed both parts b/c now running west of the river flow
A: change had been rapid = avulsion | was not gradual and imperceptible = legal test for accretion | therefore
original location of river still defines the boundary AND now the boundary is fixed forever

Southern Centre of Theosophy v South Australia [1982 Eng PC] **ENGLAND**

R: accretion changes the boundaries of water because of convenience and fairness

 Note that the water’s edge wrt accretion is the ordinary high water mark (p 221)

Eliason v Alberta [1980 AB QB]

R: a lakebed belongs to the owner of the surrounding land if the drying up happens by accretion (if by
avulsion the property line becomes fixed at the shore)

• A “gradual and imperceptible” addition to a riparian owner’s shoreline becomes part of their land.
(Monashee)
o Note: This only benefits a riparian owner. Thus, if A’s land is separated from the shoreline by a
strip of Crown land, A cannot claim accretion (as the Crown is the riparian owner, not A).
(Monashee)

 Land owners have an incidental right to lateral and vertical support for their soil.
o This right is lost if a building is erected on that soil.
o At common law, if a building had been standing for 20 years (without any substantial increase in
weight), you could get an easement for support on the adjoining property, under the law of
prescription.
o Note: The Land Title Act s. 24 abolishes this prescriptive process. (Rytter)

FIXTURES AND CHATTELS (3.3)

 A chattel = a tangible item of personal property; good

 When a chattel becomes a fixture it becomes part of the
realty (no longer personal property)
 Canadian Courts determine whether an item has been
transformed into a fixture using La Salle Recreations

Stack v Eaton [1902 Ont]

R: 4 details of test for determining when an item is a chattel or a
fixture
1. Articles not otherwise attached by more than their own weight are presumed chattels (unless shown
to be intended as fixtures)
2. Articles affixed to land even slightly are presumed fixtures (unless shown intended not to be)
3. Can rebut presumptions only be objective evidence of contrary intention (‘patent for all to see’)
which look at the degree of annexation and the purpose of annexation
o purpose of annexation = better use of realty as realty or better use of goods as goods? (Haggert v
Brampton)
4. Intention of person affixing only matters as far as can be presumed from degree and object of
annexation

La Salle Recreations Ltd v Canadian Camdex Investments Ltd [1969 BCCA]

F: carpeting purchased by hotel under conditional sales agreement with P wherein P retains title until full
price paid and this agreement properly registered with company but not in land titles office | wall-to-wall
carpet installed in building | hotel had mortgage with D which was properly registered in land titles office |
hotel went bankrupt and now both P and D are claiming the carpet
I: is the carpet a fixture? (If fixture the mortgagee of land gets carpet)
L: Conditional Sales Act says that when goods become affixed, security interest not binding against
mortgagee unless registered in land titles office || Stack v Eaton is foundational case which sets out the basic
rules for a fixture (above) | Haggert v Brampton: if a chattel is attached to enhance value/usefulness of land
and if it has been shown that there is an intention of permanent affixing (not occasional) then articles are
fixtures
A: permanent in Haggert taken here to mean the carpet remains as long as it serves its purpose (need to take
into account type of good when determining permanency)  permanency not affected by fact that carpet
can be replaced if worn out | degree of annexation in this case is ‘slight’ b/c of method used to attach | here
purpose of annexation in this case was better and effectual use of building as a hotel | carpet attached to
land as such to be a fixture
R: to determine whether a chattel is a fixture must look at the degree and purpose of annexation: must be at
least slightly annexed  intended to be permanent not occasional and must be for the purpose of enhancing
the value/usefulness of land (rather than the better use of goods as goods)

Re Davis [1954 Ont]

F: bowling alleys attached to a building | easily removed just attached by bolts and clips
A: following Haggert: if objective is to improve the realty then even if only slightly affixed deemed to be
fixtures, but if purpose is better enjoyment of chattels remain chattels even if affixed | purpose here was to
efficiently carry out bowling thus alleys are chattels not fixtures

Tenant’s Fixtures

Frank Georges Island Investments Ltd v Ocean Farmers Ltd [2000 NS SC]
R: Tenant’s fixtures = fixtures that form part of freehold but tenant has right between himself and landlord
to make them chattels again by un-attaching them | this applies only if chattels are placed for: purposes of
carrying on a trade, ornamental, or domestic convenience AND can be removed without damaging the
freehold AND right to removal must be exercised before lease expires
NOTE: Affirmed Carabin v Offman (1998) which says that tenant’s right to remove leasehold improvements
must be exercised before the term expires otherwise forfeits to the landlord

Levesque v J. Clark & Son Ltd [1972 NB QB]

R: if you add fixtures or make alterations during your commercial tenancy w/ landlord’s permission, when
these additions complement the use to which premises normally put (like a roof sign) then the tenant
cannot remove them

Elwes v Maw [1802 Eng KB] **ENGLAND**

R: agricultural fixtures are generally excluded from the common law definition of tenants’ fixtures

Diamond Neon (Manufacturing) Ltd v TD Realty Co [1976 BCCA]

F: P and Uptown Motors had an agreement for the manufacture and installation of a pole and sign an
separate sign at car dealership | signs had little placards on them that said Diamond | agreement said display
remains property of Diamond and shouldn’t be deemed a fixture | eventually land vacated and signs
remained b/c P thought another dealer would come | D bought land and didn’t know about agreement and
sold the signs
A (MAJ): both degree and object of annexation (as per La Salle) point towards signs being fixtures before D
bought land | D had no obligation to inquire as to whether were chattels | D acquired title to signs when
bought the land so did nothing wrong when sold them
A (DIS): sign has ability to speak to itself on a matter of intention of tenant and owner wrt sign is a part of
land or chattels | following La Salle 2nd principle the wording of the sign constitutes showing they are not
meant to be fixtures | analogy: two brass plates affixed same way but one has history of building other has
name of doctor working there, clear second meant to be chattel and first meant to be fixture | D should have
inquired if fixture
R (MAJ): Even if there is an agreement for things to remain chattels, if it is clear from object and degree of
annexation that a buyer not knowing of the agreement would assume they are fixtures, they will be deemed
to be fixtures  TEST FOR FIXTURES NOT ABOUT INTENTION (about what is plain to see)

 Personal property security legislation typically modifies the common law (can allow creditors to
protect their interests against the common law)

INTANGIBLE RESOURCES (3.4)

Monsanto Canada Inc v Schmeiser [2004 SCC]

F: P planted canola that was genetically modified to be resistant to Roundup herbicide | farmer D never
purchased the Roundup Ready canola nor obtained a license to plant it | tests showed that 95-98% of his
crops was Roundup Ready canola | P suing for patent infringement | D claims doesn’t know how canola got
there
A: A Patent is a time limited exclusive right to make, construct, use and sell invention (in exchange for
patent, must publicly disclose how it works) | D didn’t make the cells but he did use them  following a
three-pronged analysis (1. purpose of patent is to give inventors full enjoyment of monopoly which D
deprived of; 2. Patent Act contextual analysis says that any commercial benefit derived from invention
should go to patent holder and here inventor has been deprived of fruits of invention; 3. case law says it is
infringement to use an unpatented whole that contains a patented part like lego structure) not an innocent
bystander just because ‘plants grow themselves’ | doesn’t matter that never sprayed Roundup
R: it is an infringement to use any genes and cells of a living plant BUT it is not infringement to just keep
what strays onto your land  only if you use it without permission

POSSESSION: BASIC CONCEPTS (4.1)

 Possession is an important concept but it is flexible at the margins
 Plays a role in ordering, proving, and perfecting property claims
 "possession is good against the whole world except the person who can shew good title" (Asher v
Whitlock Eng QB 1865)
 "a person in possession of land in the assumed character of an owner and exercising peaceably the
ordinary rights of ownership has a perfectly good title against al the word but the rightful owner
(Perry v Clissold PC Australia 1907)

Popov v Hayashi [2002 Cali SC] **USA**

F: Bonds hit record breaking home run ball | P tried to catch it in his glove and it landed in upper webbing |
then a mob of bandits descended on him and despite trying to secure the ball it slipped out | eventually D
(who did nothing wrong as per court decision) saw ball on the ground and picked it up | P got up said he had
the ball and wanted to keep it but D pulled it away | P suing D for the ball b/c worth a lot of money
A: before ball was hit it was property of MLB and after hit became intentionally abandoned property so first
person to possess is new owner (this based on the specific customs of sport of baseball) || definition of
possession is key to this case: 2 core elements are physical control over object and intent to control it or
exclude others from it | both parties had will to possess so issue is physical control (stopping momentum vs
complete physical control after all incidental contacts) | should take a contextual control that requires as
much control as the nature and situation as thing permit, in light of custom and practice | baseball is
possible to take complete control of and custom is need complete control after incidental contact  Popov
did NOT have requisite control | however b/c of mob Popov gets a qualified pre-possessory interest (equity
and fairness should have been able to try to complete the catch!) | Hayashi has no cloud on title b/c not a
wrongdoer | both men have greater claim than everyone else but equal claim against each other  sell ball
and split profits!

Other Examples of Possession (some in Popov)

Keron v Cashman
 boys passing around a sock and turns out was full of money: physical control clear but intent
ambiguous (opposite of Popov)  split the money equally
 possession requires both physical control and intent to reduce to property to one’s possession (the
two must also be concurrent)

Net Example (Paul Russo)  caught ball through net, let roll to security guard who gave to someone else
 was there intention? No ability to actually remove it and have physical control…

Pierson v Post [1805 USA] **USA**

F: D conducts a fox hunt and is in hot pursuit of fox when P kills and bags for himself
A: P owns the fox b/c rule is once a wild animal has been mortally wounded it is your possession (as long as
you do not stop pursuing) | however, if all you are doing is pursuing no mortal wound there is no possession
Whales  if attached to boat by harpoon is yours
Seals  NFLD has special rules saying killing them not enough need to have collected carcasses on board in
order not to lose right to them

ADVERSE POSSESSION (4.2)

 since 1975 at the latest it is impossible to acquire land by adverse possession in BC

o but may still be a live issue in other common law jurisdictions and some unique cases

Nelson (City) v Mowatt [2017 SCC]

F: D are owners of a registered lot (RL) right next to the disputed lot (DL)| from 1909-Jan 1916 Cooper lived
on DL, Gouchers lived on DL for some time after Coopers left (1920 latest were there) | in 1920 land
company transferred land to Annable and DL supposed to be road but actually remained with land company
| 1922 Thorpe purchased RL and rented DL | residence on DL burned down in 1923 | in 1930 land company
dissolved and DL escheated to Crown | IN 1959 Thorpe transferred RL to children, daughter transferred RL
to Mowatts in 1992 and now Mowatts claiming title to DL
L: Statute of Limitations says action to recover land from adverse possessor must be brought within 20
years (for land owned by Crown it is 60 years not 20 | Limitations Act says adverse possession abolished
July 1, 1975 (against Crown possibly abolished in 1970)
A: D could show continuous possession for 20 years before 1930 (adverse possession against Land Co) OR
continuous possession for 60 years before 1970/75 (against Crown) || Elements of adverse possession are:
1. actual possession (intention to possess and physical possession)
2. must be open and notorious (anyone who comes to site would be aware)
3. must be without permission (adverse)
4. must be exclusive
5. must be peaceful
6. must be continuous BUT tacking on from successive possessors is allowed
inconsistent use requirement says possessors use of land must be inconsistent with true owner’s present or
future enjoyment/intended use of land  determined this does NOT apply in BC b/c according to Pye v
Graham (England) it was never really part of English law and BC took test for adverse possession from
England || while continuous possession can be somewhat sporadic/intermittent occupation, the burden was
with Mowatts to prove continuous possession and they did not meet that burden (evidentiary gap from
1916-1920)
R: test for adverse possession | inconsistent use requirement not in BC | adverse possessor must prove
continuous possession (which can be sporadic) but cannot have too large of an evidentiary gap

Adverse Possession Elsewhere

 lots of cases in 1990s and 2000s in UK for expensive homes where title given to squatters
o legislative backlash: 2002 said squatter must apply to Registrar that want to assert title before
limitation period ends and true owner gets notified
o 2012: squatting in a residential building is a crime, not just a tort
 NYC: since 2008, adverse possession can only happen if possessor has honest and innocent mistake
that they already had title
 Florida: notice provision since 2011, since 2013 squatting in residential properties is a crime
Rationales
 Why award title by adverse possession?
o Punish true owner's neglect (use it or lose it)
o Encourage and reward squatter's productive use of land?
o Protect settled expectations of long term possessors and those they deal with (law agree with
social realities and expectations)?
o 'Quiet title' - adjust formal entitlements to reflect reality on the ground, to promote certainty
in dealings and facilitate transactions?
 Why not?
o Ex turpi causa non oritur actio: don't encourage people to act wrongfully in hope of getting
something for nothing; one should not profit from their own wrongdoing

FINDERS (4.3)

Trachuk v Olinek [1995 AB QB]

F: Signalta had an easement from Marathon (owner) to have a pipeline connected to well site | Amoco had a
surface lease for well site | Signalta hired Olinek as independent contractor to disconnect | Olinek hired
three subcontractors | Trachuk is a farmer who leases section from Marathon under agri use lease allowing
grazing and cultivation | Trachuk previously build a fence on well premises to stop animals form going there
| Trachuk didn’t plant grass on well site and didn’t restrict any access || Trachuk had oral lease at time of
event | On May 6, 1992 Olinek and sub-contractors found a plastic bag with money in it ½ m below the
surface on well side of the fence
I: who has a better claim to possession of the money, Trackhuk or four workers?
A: when money is deliberately hidden the presumption is the occupier has higher right over finder |
Trachuk was not occupier of the land (no de facto possession) because he didn’t manifest an intention to
exercise control over it (built fence, didn’t keep anyone out, didn’t keep weeds down in well site) || thus
Trachuk didn’t have any control over lands where money unconvered and this also applies to subsurface | 4
workers have a stronger claim than Trachuk
R: General rule that finder of a lost chattel has better claim against all
except original owner does not apply when the chattel was deliberately
placed and forgotten rather than lost (recovery cases different than
true finder cases)  need to look at possession, occupation, etc
Other Rules About Finders (Discussed During Trachuk)
 Generally, occupier > landowner (Trachuk makes little distinction but other cases do)
 Amoco was the surface lease inside well site but the uses of lease shows they had subsurface rights 
Amoco is occupier but didn’t make a claim |
 An easement just allows access/use but NOT possession (Signalta not possessor of land in Trachuk)
 Agency/employment relationship  according to Parker if money found in course of employment
goes to employer
 True Owner prevails over anyone else UNLESS money came as result of a crime (Baird v BC; Bird v
Fort Frances) OR abandoned: caveat of abandonment: if had unequivocal intention to abandon then
ownership extinguished and belongs to person who takes possession
o If deliberately placed easier for true owner to say they forgot but never meant to abandon
 Treasure Trove doctrine only applies to gold and silver, usually to a long-buried treasure (goes to
province)
 Where money is hidden somewhere (not lost), occupier of land vs finder has different authorities
o Trachuk says even when object buried occupier has to meet manifest intention test (shown
manifest intention to control the place and things on or in it) to prevail over finder
o Parker says manifest intention test only applies to loose items and if item attached or
deliberately buried occupier automatically wins

Parker v British Airways [1982 Eng] **ENGLAND**

F: someone lost bracelet in VIP section of airport | passenger found it on the floor | no signage about
taking property of lost goods | cleaners and security only have finding lost items as incidental to
employment
H: finder of the bracelet has a better claim than the airport (occupier)
Rules:
 Finder has no rights unless object abandoned or lost and finder takes possession of it
 Finder has limited or no rights if dishonest or trespassing
 Finder has rights against all but true owner, one claiming through true owner, or one with prior
subsisting right
 Finder finds on behalf of master or principal if object found in course of employment
 Finder must care for the thing and take reasonable steps to alert owner
More Rules:
o occupier (person in possession of or entitled to possession of land) beats the finder if chattels are
in/attached to land or attached to building regardless of intention or awareness
o for loose items (not attached) occupier only prevails if before thing found they manifested intention
to control the place and everything within it
o manifestation of intention may be express or implied from circumstances (ex innkeepers obliged by
law to accept liability for chattels lost upon premises)

Clark v Maloney [1840 Deleware) **USA**

 someone who found logs, lost them, and then someone new finds them
 First person has better title than second even though only originally had finder’s rights

Moffatt v Kazana [Eng QB 1969] **ENGLAND**

F: new owner finds money in chimney flue, which previous owner had hidden 30 years earlier and forgotten
about
A: previous owner gets the money | cannot abandon something by forgetting, there must be a positive
intention to abandon
Note: If someone dies before abandoning, still not considered abandonment: goes to the estate and the heirs
can claim it “through the true owner”

Toronto case (settled out of court)

 New homeowner hires reno contractor whose employee breaks open ceiling and $50 k rains down
 If not abandoned and not criminal previous owner has best claim
 If had abandoned, presume that a homeowner has intention to control things in a private house so
manifest intention test is met
 Employement issue: employee found as agent for contractor, contractor as agent for homeowner

Weitzner v Herman [Ont SCJ 2000]

F: D is new homeowner finds fire extinguisher with $130k in cash | all dates from before previous owner’s
(P) husband (conducted mainly cash business) fell into a coma | D tried to be sneaky and get P to sign away
rights | tried to rely on house contract which said sold ‘as is’ | husband dead so cannot give evidence
whether abandoned
A: seems likely husband had hidden during life, had never meant to abandon it and just didn’t have a chance
to tell wife about it | angry about D’s sneakiness | money goes to P

Perry v Gregory [PEI 2003]

F: P& D scanned a farm with metal detectors with owner’s permission | P got a signal and began to dig,
asked D to verify signal so P moved away to avoid interference | D dug up 200 year old artifact | had
previously done this process on various occasions and had always had the verifier give back to original
finder
A: big factor is the past practice of legal position, should begin to follow this | P gets artifact

Bird v Fort Frances [1949 Ont HC]

F: 12-year-old boy found money on private property while trespassing |money taken to police | no claim
made by true owner of land or an alleged true owner of money
A: boy entitled to the money even though was trespassing when found it

Baird v British Columbia [1992 BCCA]

F: P admitted haven stolen money which was seized by Crown | never charged criminally | tried to get
money back but Crown refused
A: does not get the money b/c a person should not be able to gain from one’s own wrongdoing (exturpi
causa non oritur actio) | court said distinguished from Bird b/c in that case there was not the degree of
criminality or culpable immorality to support an exturpi plea

Millias v BC [1999 BC PC]

F: P was off duty police officer who found $1 million in trash can in public park
A: no genuine ownership claims emerged | court awarded money to officer

GIFTS (4.4)

Principles of Gifts for Choses in Possession Inter Vivos

Three possible methods are necessary for a valid gift (Nolan v Nolan)
1. Deed = document under seal
2. Declaration of trust = signing an instrument which says donor
declares they hold title in trust for the donee
3. Delivery

For Delivery method, there are three necessary elements (Nolan v Nolan)
 1. Intention of donor to make the gift
 Usually expressed by words but words are not strictly necessary
 Words/intent need not coincide exactly with delivery but delivery must occur while donative
intention subsists
2. Intention on part of done to accept the gift
3. Delivery
 Can be actual (physical/manual) or constructive (if manual delivery impossible/impractical)
 Donor must completely part with possession and relinquish all present and future control over it
 In common establishments, there generally must be some evidence of an act of delivery

Symbolic vs Constructive Delivery

 Symbolic is when “instead of the thing itself, some other object handed over in its name and stead”
o Ex handing over photograph of church organ to gift the organ
o SYMBOLIC DELIVERY NOT SUFFICIENT TO MAKE A GIFT
 Constructive is one of two possibilities
o No direct handing of the object but means of getting at it and controlling it conferred solely on
done
 Ex handing over a key which gives access to things
 Probably would be effective subject to ordinary delivery being impossible
o No change of factual possession, but change in capacity in which that person has possession
 Ex done already in possession of subject matter and then gift made

Nolan v Nolan & Anor [2003 Victoria SC] **AUSTRALIA**

F: Sidney Nolan was married to P’s mother Cyntthia | P’s mother died and P was beneficiary, estate had
many paintings by Sidney | after mother died, 3 paintings in question remained in Sidney’s possession until
he died | there are some documents that refer to the paintings as “Cynthia’s” |P claiming that Sidney had
made gift of three paintings to Cynthia before Cynthia had died thus should be in her estate
A: equity will not complete an imperfect gift the elements must be established by P | possession prima facie
evidence of property (Sidney and his wife were in peaceable possession for 27 years) | witnesses to gift are
dead so reliance on documents which MUST be approached with caution and suspicion ||
three elements of valid gift by delivery: intent to gift, intent to receive, and delivery | documents do not
amount to words of gift but that is okay because they are not strictly necessary (following obiter in Corin v
Patton) | evidence that Sidney believed he had made a gift and didn’t desire to retract would be capable of
showing intention (Re Ridgeway)  BUT documents do not show this | delivery must occur while donative
intention subsists | donative intent not proven b/c catalogues not written by Sidney and other docs
ambiguous
Court did not discuss intention on part of donee to accept gift
Delivery: is allowed to be constructive or manual | for common establishments there needs to be some sort
of evidence of physical act of delivery (National Trustees v O’Hea; Re Cole) | no evidence here that paintings
even in matrimonial home | Cynthia toured them without Sidney’s knowledge or authorization so this is not
delivery | NO delivery proven

Corin v Patton: just mentioned in Nolan as having obiter that states donative intention need not be
manifested by words of gift (even though it normally will be)

Re Ridgeway [1885 QB Eng] **ENGLAND**

 Donor believed had made gift of port to children and acknowledged it as “Tom’s port” etc
 Was accepted as donative intention (but delivery didn’t exist so not valid gift)

National Trustees Executors and Agency Company Ltd v O’Hea [1905 Eng] **ENGLAND**
  On deathbed man said he wanted to gift coach and horse to servant
 Intent clear
 No change in possession occurred and horse and coach remained at deceased’s premises
 Delivery NOT satisfied b/c nothing done to indicate a change in possession

Re Cole [1963 Eng CA] **ENGLAND**

F: Man rents a large mansion and furnishes it lavishly | brings wife in and shows furniture, she touches some
of it and he says “It’s all yours”| they live together in house for years, both believed furniture was hers but
insured in his name | Cole goes bankrupt and trustee sells furniture, wife claims it was hers
A: court says furniture is not the wife’s because there was no change in possession | wife has use of furniture
by virtue of position as wife but no more
NOTE: there are many statutory rules now regarding fraudulent transfers of this nature before bankruptcy

Thomas v The Times Book Co [1960 Eng] **ENGLAND**

F: Welsh poet Dylan Thomas finishes his master manuscript but misplaces it before leaving for US lecture
tour | his editor had made a copy and brings it to him at airport | poet tells editor: “you’ve saved my lfe” and
“if you find it you can keep it” and gives names of pubs where it might have been lost | editor finds original at
one of pubs | poet dies few weeks later in US and now wife is claiming it
A: Intention of gift?  reasonable person would interpret “if you find it it’s yours” as you own it | there was
also evidence that Dylan had a generous and impulsive personality and had done this before with other gifts
|| Delivery effected when editor actually found it and took into possession (if you go here you can have it is
akin to delivery
C: manuscript goes to the editor not the wife because it was a valid gift

JB Baron, "Gifts, Bargains, and Form"

 Our law draws a difference between gifts and bargains
 Gifts require formalities: delivery, signature, attestation
 Contracts require: offer, acceptance, consideration
o Difference because of difference in goals and settings of gifts and contracts
 Goal of gifts = effectuate donative intent so formalities put that intent beyond question
 Goal of contracts = protection of expectation and security of transactions
 Setting of gifts = one-sided transfer which redistribute existing wealth (less important
= no legal enforcement without formality)
 Setting of contracts = two-sided exchanges with create wealth (important =
enforcement without formality)
 There are reasons to question this fit though
o Human behavior in gifts is benevolent, then why must be formal which implies unreliability
o Human behavior in contracts is self-interest, then why not formal which implies
trustworthiness
o Fit requires that gifts and bargains are truly different transactions, not always so --> gifts
involve exchange of non-commodities like status, obligation, etc
 So is there any reason to treat gifts differently than typical bargains? Do we really need formalities
with gifts?
o If a gift giver is just as self-interested as contract person why need more formalities?
o Formalities foster deliberation, calculation, precision and quantification: against spontaneity
of gift giving
o Why should expectations of gift exchange be less important just because they are non-
economic?
o However note that legal intervention might be inappropriate for the complicatedness of
emotional and social aspects of gifts
 The arguments for treated differently are not compelling --> just based on the past
o This gives message that gifts are uncommon, untrustworthy, and unimportant
 PROPERTY CAN 2 – Wood Winter 2018
COMMON LAW ESTATES (Ch. 5)

INTRODUCTION (5.1)
 Feudal doctrine of estates allowed numerous people to hold an interest in the same parcel of land
consecutively, each owning not the land but a slice of time in the land
 Types of Estates
o Freehold estate
 Fee simple  closest to absolute ownership, survives as common law estate today
 Fee tail  inheritable right of limited duration (basically extinct)
 Life estate  continuous with life of grantee, still exists in Canada but almost always as an
equitable interest behind a trust
o Leasehold estates  have a certain duration
o Unfree (copyhold) estates  never introduced in Canada
o Aboriginal title  sui generis, unique to Canada

THE FEE SIMPLE ESTATE (5.1)

 The ‘largest’ estate because can potentially last forever, owners can come and go through conveyance
(transfer while alive) or inheritance and estate remains
 If the owner dies with no heirs the estate escheats to the Crown
 Traditionally created by the words “To A and his heirs”
o But can, in some situation, be created using different words

Thomas v Murphy [1990 NB QB]

F: P bought some land from the grantees, and D was the lawyer hired by P to ensure the grantees had clear
fee simple to land | the land was granted unto the Grantees, their successors and assigns (no mention of
heirs)
A: at common law traditionally for an inter vivos FS grant, the deed HAD to use the word ‘heirs’ regardless of
intention of party but to devise a FS, didn’t need the word heirs only needed to indicate intention | there are
now statutes that relax rules | the NB statute says don’t need to say heirs you can just say ‘in fee simple’ | the
Ont statute says you can use ‘in fee simple’ or any other words sufficiently indicating intent | need to
determine what the grantors intended and what NB statute says if neither ‘heirs’ nor ‘in fee simple’ used |
clear that grantors intended to give grantees full, unlimited title so could sell land | NB statute silent on
other words so interpret as the same as Ont statute | grantees had FS title, Murphy not liable for malpractice
R: there are statutes that relax the rules to allow the granting of a FS estate inter vivos without using the
word ‘heirs’

BC Property Law Act, s. 19

(1) - sufficient to use words 'in fee simple' without saying 'heirs' (similar to NB)
(2)- if no words of limitation used, passes fee simple or greatest interest person has unless
expressly says lesser estate is being transferred (similar to Ont)
 But still has gap: what words work other than heirs and in fee simple?

Land Title Act, s. 186

(5) - if no express words of limitation, passes fee simple estate
 (6) - If contains express words of limitation, transfers the freehold estate in accordance with
the limitation
(8) - subsections 4 to 7 do not transfer estate greater than estate that the transferor has

Wills, Estates, and Succession Act., s. 41

(3) - a gift in a will
(a) takes effect according to its terms, and
(b) Subject to the terms of the gift, gives to the recipient of gift every legal or equitable
interest in the property that the will-maker had the legal capacity to give

Note that interpretation of intent is done on the face of the document only, you cannot use extrinsic
evidence (cannot just ask the person what intention was)
  Traditional common law rule
Grant o Rule: to create FS, exact terms heirs
necessary; if no words of limitation, grant
passes LE only (presumption of LE, FS
requires 'heirs')
o "to A" = life estate
o Need to say 'heirs' to convey FS
Current BC Statutory rule
o Rule: ' and heirs' unnecessary ; "in FS"
passes FS; transfer in accordance with
words of limitation; if no words of
limitation used passes full estate unless
expressly less (presumption of FS, LS
requires clear words)
o "to A" = fee simple passed
o Don’t need anything specific to convey FS

Devise o Rule: To pass FS, words indicating
intention to convey FS necessary (weak
presumption of LE, FS requires clear
words)
o "to A" = life estate
o Need to have explicit words showing
intention to pass FS
o Rule: Devise passes full estate, subject to
terms of will (presumption of FS, LE
requires clear words)
o 'To A" = FS passed
o Don’t need anything specific to transfer FS

D’Arundel’s Case [1225 ENG]

F: Henry II granted land “to Roger and his heirs” for knight service | Roger conveys all his rights in land to
William of Arundel and his heirs | after Roger’s death his heir, Radulf, sues to recover the land because he
says Roger had no right to sell Radulf’s interest as an heir
A: ‘and his heirs’ conveyed NO INTEREST to Radulf | ‘and his heirs’ are words of limitation delimiting the
potential duration of estate to Roger (ie forever) | only ‘to Roger’ are words of purchase | Radulf had no
interest in land when conveyed to Roger, Roger could sell it  don’t want to limit ability of owner to
sell/use property based on heir
R: ‘and his heirs’ denotes the potential duration of a FS estate as forever, they do not grant any interest in
the land to the heirs
NOTE: What if Radulf had won? That would mean the most Roger could have sold was a life estate, so that as
soon as Roger died his heirs owned the land

SOME EXAMPLES
o To Anastasia for life, then to Boris and his heirs
o Creates LE for Anastasia and then FS for Boris

o X grants land “To A during his lifetime, and upon A’s death, to B forever”
o A has a life estate
 o B not so easy  fee simple? Or another life estate? Need to prove intention of X to divest
oneself of the entire FS interest
o If a person does not fully divest themselves of ownership, then upon the cessation of the
stacked life estates, reverts to the (estate of) original owner

ADVANTAGES OF FEE SIMPLE ESTATE

o Flexible, versatile tool to manage wealth over time
o Low transaction-cost device to induce owners to conserve resources for future generations
o Tries to fix the tragedy of commons wherein it is economically rational to use something up
until exhausted rather than save for future
o Gives a rational incentive to manage estate with a mind to future generations

THE LIFE ESTATE (5.1)

o Typically created by the words “To A for life”
o A life tenant can convey interest or rent out land (but cannot give more than LE)
o LE can be bought and sold, no requirement person actually live on the land
o Generally duration is for the life tenant’s lifetime (pur sa vie)
o But can also be for another person’s lifetime (pur autre vie)
 This would happen if life tenant A transfers interest to B  B’s interest only remains
for the lifetime of A (the ‘measuring life’ or cestui que vie)
 Note here if B predeceased A, would go to B’s heirs until A dies

Some Examples
o X grants “to A for life”
o A gets LE, X retains reversion  FS estate reverts to X on A’s death
o If X predeceases A, then the reversion goes to X’s estate, doesn’t change things
o X grants “To A for life, then to B and his heirs”
o A gets life estate, B acquires a fee simple remainder (B = remainderperson)
o A remainderperson CANNOT have previously owned the property interest (that would be
called a reversion)
o B gets a FS estate upon A’s death, such that X retains nothing
o If B predeceases A, the FS remainder is inherited by B’s first in line heir

Re Walker [1924 ONT CA]

F: Walker’s will said the following: “I give unto my wife all my property and also should any portion remain
in [her] hands at the time of her decease undisposed of by her such remainder shall be divided as follows”
I: what happens with the parts of widow’s estate that was previously Walker’s?
A: first question is always what was intention of testator | here though had inconsistent intentions 
wanted to give wife full ownership but also gives others remaining things on her death | to resolve need to
ascertain W’s dominant intention and reject the subordinate intention as repugnant | either wife gets FS and
the gift over fails or wife gets LE and the gift over succeeds | there is one apparent exception where you
grant a life estate with a power of sale (so no remainder left) but the will here doesn’t support it |
determined that the gift to widow is dominant intention and it prevails, cannot deal with the rest of
the estate in a matter repugnant to the gift to widow | FS to widow
R: if there are two inconsistent intentions in a will you must give power to the dominant one and reject the
subordinate one which is repugnant to the dominant one
Re Taylor [1982 Sask Surrogate Court]
F: Taylor’s will said “I give all my estate to my wife to have and use during her lifetime. Any estate of which
she may be possessed at the time of her death is to be divided equally between my daughters”
A: prime directive for construing wills is to ascertain testator’s intention from will as a whole and give effect
to it | intention was to give life estate to wife  operative language different than Walker b/c says ‘for her
lifetime’ | here intentions not inconsistent b/c gave LE with the power to encroach on capital for
personal maintenance only | gift over to daughters logically follows intention to give LE to wife
R: clear operative language of a LE plus right to use for maintenance is not inconsistent with gift of
remainder and both can be given effect following intention of testator

Christensen v Martini Estate [1999 ABCA]

F: Testator wrote a will saying “I give to my wife 2203 31Ave SW for her use. When she no longer needs [it]
that she give said property to S &S Christensen” | S&S were old friends of testator who used to live in the
other side of the property (a duplex) with testator and first wife, not the widow here
A: must give effect to intention | testator intention here was to benefit both the wife and the
Christensens by creating a life estate with the remainder to the Christensens | wife did not have the right
to use/encroach the property because then it would not remain “said property” when went to the
Christensens | LE without power to encroach, with remainder to the Christensens  this is the only way to
give effect to dual intentions
R: cannot grant encroachment on a LE if intention is to grant the whole estate

THE EFFECT OF A “POWER TO ENROACH”?

 In all of the following cases, it was held that A got an absolute interest with the gift over to B failing
o Re Rankin: “To A to be used by her and at her death if any is left to B”
o Re Minchell’s Will Trusts: “To A for her life time, and if anything should be left over, to B”
o Townshend v MacInnis: To A to be used and disposed of as she wishes during her lifetime. Any
that is left at her death to B”
o Re Scott: “To A,” followed by gift over to A’s sister of “whatever property remains in A’s hands at
the time of her death”
o You cannot give absolutely to wife and at the same time control the destiny of it upon her
death  cannot be done under common law
 In all of these cases they give an unlimited power to encroach for any purpose whatsoever:
inconsistent with LE  diff from Taylor which only gave power 2 encroach 4 personal maintenance
o But this is not 100% clear that this is the way to distinguish cases
o The use of the word ‘lifetime’ could be important  more important than ‘use’
o Might be whether it gives impression of absolute then tries to gift over (Scott) vs clear words
about intending a limited interest like ‘lifetime’ (Taylor)
 Illustrate a common problem in property law: an owner purporting to part with ownership and yet
control the destiny of the thing given (Walker)
 THESE CASES ARE UNCLEAR AND VERY FACT SPECIFIC WHICH IS WHAT GIVES RISE TO THE
INCONSISTENCIES  always look to intention as per Walker, can still use precedent too tho

LIFE ESTATE vs FEE SIMPLE: WHY DOES IT MATTER? (5.1)

 Affects who gets the property when the holder of the LE/FS dies  the concrete issue in most cases
(battle of the beneficiaries)
 Also affects what the holder may do with property during her lifetime
 Specific bequest: I give ‘X’ property to ‘Y’ specific people
 Residual clause: I give all the rest, residue, and remainder to X (most wills include one in case
anything was forgotten)
o If no residual there are statutory rules for who gets (intestacy rules)
 THE RIGHTS AND OBLIGATIONS OF A LIFE TENANT (5.2)
 Waste = activity that reduces value of real estate for the future owner (damages in some way)  ex
drilling for oil, tearing down house, letting house fall into disrepair
 Interests of present and future owners are balanced by the law of waste
o Fee simple owner may generally commit waste
o Life tenant may not commit waste unless authorized by instrument
o Remainderperson may get damages, injunction, or accounting of profits for unlawful waste,
but may not dictate who may use land

The Life Tenant

 Has all rights of ownership, within limits  may occupy and use land, rent it, sell life interest
 But is liable for voluntary waste (unless instrument makes unimpeachable) and equitable waste
(even if unimpeachable, unless instrument expressly covers it)
o Voluntary waste = positive action that causes injury or damage to land
 Cutting trees, if the trees are considered ‘timber’
 Knocking down buildings
 Exploiting minerals or oil
o Equitable waste = voluntary waste that is wanton and malicious
 If a will says “A is unimpeachable for waste still liable in equitable waste UNLESS also
says “including wanton and malicious destruction”
 Life tenant is NOT liable for ameliorating waste (unless it completely changes the character of
property) or permissive waste (unless duty to repair in instrument)
o Ameliorating waste = act that change physical character of land in a way that benefits the
remainderperson
 Completely changing character would be dramatic, remainderperson can stop that
from happening or get remedies if they don’t like the change
o Permissive waste = opposite of voluntary waste = inaction that damages land
 Ex erosion that could only have prevented by planting plants
 Note also that the remainderperson can waive their rights voluntarily if they want
May a life tenant:
 Make major renovations/build an addition  If doesn’t change character yes
 Harvest timber  Probably not, but might depend
 Clear forest for farmland  Yes
 Cut down shade trees  Yes? but might depend on local custom and how many cut
 Burn down trees  Either voluntary or possibly equitable, depending on context but either way
probably no
 Drill for oil  No: voluntary waste
 Operate a gravel quarry?
o Voluntary waste to open and work a mine but not to work an already open mine (page 381)
o This idea might also apply to oil wells
 Tear down buildings  Depend on context, probably no (maybe voluntary or equitable waste)
 Rent, sell or mortgage  Can rent, can only sell your own life estate, mortgage(??)

Must a life tenant:

 Pay property taxes?  YES
 Pay mortgage payments?  Interest vs principal  LT pays interest, RP pays principal
 Pay for utilities  YES: even if trustee of remainder has discretion to pay utilities out of capital (as in
Powers)
 Keep the property in good repair?  NO
o But, if repairs are done, who pays?
 Recurrent (routine) = LT; necessary for preservation = RP
 Even though replacing roof shingles is recurrent, considered necessary for
preservation so RP pays
 Repainting interior of house = LT
 Replacing the furnace = RP
 Mowing the lawn = LT
 Insure the property and pay the premiums?  NO, for some
o Court in Powers says fire insurance more like property taxes so premiums payed by LT
o But if there is insurance to replace furnace or something then RP pays premiums
o But RP has the duty to ensure, while LT pays for the premiums
 EQUITABLE INTERESTS (Ch. 6)
THE ORIGINS OF EQUITY (6.1)
HISTORY OF EQUITY
 Two justice systems developed alongside one another: “law” and “equity”
 Common law became rigid and formalistic which led to justice not being done
o Ex: refused to allow disposal of land by will  common law demanded always to eldest son
o Ex:continued to enforce feudal incidents even when were extortion
 Wealthy landowners used conveyance to uses to escape restrictions of common law
o First arose when knights went on Crusades: conveyed legal title to land to trusted friend with
instructions to hold for the knight until his death and after to hold for the use of whoever
knight designated in his will
o Also arose in religious orders  son takes vow of poverty but father conveys land to a friend
to hold for order’s use and benefit so son gets comfort still

THE CONVEYANCE TO USES

 X conveys land to A and B as joint tenants to hold to the use of persons designated by X
o Or “to hold for the exclusive use, benefit and enjoyment of”, “in trust for”
o Joint tenants to avoid escheat and relief when one of them dies b/c other just gets right of
survivorship not inheritance = no inheritance taxes
o Person to whom land conveyed = feoffee to uses
o Person for whose benefit land held = cestui que use
o X (person who conveyed the land) = conveyor
 Why would the conveyor do it?
o Circumvent primogeniture (eldest son getting all land)
o Circumvent restrictions on monastic holdings
o Insulate the cestui que use from wardship, relief, and escheat
 Only the person seised of land (legal title to land) liable for these  common law
considered only the feoffee to uses to be seised of land
o Avoid relief and escheat all together by having feoffees to uses as joint tenants
 Why would the feoffee to uses do it?
o Religious reasons  motivation as ‘getting into God’s good books’
o Loyalty and gratitude to cement a bond with the conveyor
o Overtime became a matter of being paid fees to do it
 If the feoffee reneged, common law would NOT enforce  the Court of Chancery emerged to
administer principles of what would be known as equity
BASIC FEATURES OF EQUITY AND THE USE
 Equitable remedies always discretionary (no ‘right’ to a remedy)
 Equity supplements the common law if gaps arise but equity also prevails in conflict
 Chancellor enforced conveyances to uses by binding the feoffee’s conscience
 Chancellor also enforced beneficial interests of the cestui que use against all others who could not in
good conscience disregard: only the bona fide purchaser for value without notice got to keep the
interest despite being a pre-existing beneficial interest
o Beneficial > someone who got legal title as gift
o Beneficial > purchasers for value who knew or ought to have know of use
 A new range of proprietary interests emerged  ownership could be legal or equitable interests
(either FS or LE, applied by analogy from doctrine of estates)  The flexibility of creation of interests
not known to common law is the reason the use persisted after all incidents abolished
THE STATUTE OF USES
 King Henry VIII wanted his revenue back from his incidents so he forced the Statute of Uses on
Parliament in 1535
o Where a person is seised of land to the use of another person or corporation, the latter is deemed
to have legal title to the same estate to which he had equitable title
 This means the beneficiary now has both legal and equitable title, the feoffee has
nothing
 The Statute was said to “execute the use”
 Limitation of the Statute of Uses  does not apply:
1. Where the feoffee has active duties (collecting rent) to perform: only applies to bare uses
2. Where feoffee holds a leasehold estate b/c then feoffee is not seized of land
3. Where the feoffee is a corporation
4. To uses of personal property
5. Where the feoffee is seised to his own use (holds legal FS by common law)
6. To a use upon a use (after the Tenures Abolition Act in 1660)
 X to F and his heirs to the use of A and her heirs to the use of B and her heirs  A has
legal FS, B has equitable FS and X,F have nothing
NOTE: still applies to a use after a use  X to A and her heirs to the use of B for life, then to use of C and his
heirs  B gets legal LE, C gets legal remainder FS

THE MODERN TRUST

 Language of ‘use’ replaced by ‘trust’  X to F and his heirs to the use of A and his heirs in trust for B
and her heirs (with the ‘use’ being executed by Statute of Uses)
 Terminology compressed over time  became “X to the use of A in trust for B”
o Note that “X to A in trust for B” doesn’t work, just becomes executed by Statute
 Devises against primogeniture legalized by Statute of Wills, 1540
 Statute of Uses eventually repealed in places (in BC was received but has no litigation around it)

EQUITY AND WOMEN

 Doctrine of coverture: at common law upon marriage a wife’s legal identity merged with husband’s
 couldn’t own property, sue or be sued, no rights over child or $
 Equity could be seen to help  could convey property to trustee before marriage (but this only really
helped wealthy women)
 Equity also harmed  could use trust to deprive of inheritance rights or deprive widows of common
law dower (1/3 income of husband’s real property); equity didn’t help separated women
 Coverture abolished not by equity but by legislation as wider suffrage reform movements

EXPRESS TRUSTS (6.1)

 An express transfer from settlor to trustee to hold for someone’s benefit
o Settlor = person who owned property and transferred it
o Trustees = people who settlor transferred the property to
 Purposes
o Minimize tax liability, prove for dependents or loved ones, manage family property, pursue
charitable objectives, acquire land stealthily, conserve nature
 Must be drafted in a way to avoid the Statute of Uses
 Must satisfy three certainties: intention to create trust, subject matter, objects (beneficiaries and
purpose)
 RESULTING TRUSTS (6.2)
 Arise by operation of law in favour of a person who transfers legal title to another but retains a
beneficial interest (usually done in accordance with parties’ intentions)
 Equity recognizes in two circumstances
1. Filling a gap in an express trust document (failed to dispose of all beneficial interest in the
property)  presumes a resulting trust for benefit of settlor
 "To Acme Trust in fee simple to hold in trust for B for life"  equity imposes resulting
trust to give equitable interest to settlor once B dies
2. Gratuitous transfers: equity presumes not a gift unless evidence otherwise, presumed to be a
trust
 If A buys property/transfers an interest to B and wants title under B’s name, equity
presumes A wanted B as trustee with legal title but A with equitable interest 
presumption can be rebutted if can show intended to make gift to B
 The beneficial ownership is said to result back to A
 Exceptions have been recognized when occurs between family members
 Between husband-wife or father-minor child, the presumption flips to be a gift
not trust = presumption of advancement
o Text says the spouse presumption probably no more, statute deals with it
now in many provinces
o Parent to adult child is presumed resulting trust but can be rebutted by
evidence of dependence and intention (Pecore)
 Usually a matter of ascertaining the true intentions of the parties

Pecore v Pecore [2007 SCC]

F: D’s father had $ and transferred assets into joint accounts with D, his married daughter | was evidence
that D and husband, P, depended on father for $ | father didn’t want to pay taxes to wrote letters saying was
100% owner of assets | D never accessed or controlled accounts only father | father’s will left most of estate
to D and residue of estate between D and P, will didn’t list the accounts in the list to D | P divorced and wants
half of joint accounts saying they are residue of father estate, D saying she had right of survivorship
I: What presumptions apply, how can they be rebutted, and what was intention of father?
A: rebuttable presumption allocates the burden of persuasion with standard of proof being BOP so
presumption just prompts introduction of evidence | presumption for parent-minor child should be
presumption of advancement | presumption between spouses should be resulting trust | parent to adult
child should have rebuttable presumption of resulting trust whether dependent or not (worried to
presume advancement when really parent only need help with $) but if child is dependent on parents is
evidence to rebut
Application: father and D very close, D relied on father for $ and he was concerned about looking after her
and had intention consistent with a gift | presumption of resulting trust applies but is rebutted by the
evidence such that joint accounts are gift not part of estate
R: A transfer of property between two unrelated people is presumed to be a resulting trust | A transfer of
property from a parent to a minor child is presumed to be an advancement | A transfer of property/joint
account transfer from a parent to an adult child is presumed to be a resulting trust but this presumption can
be rebutted by evidence of dependence and intention of parent
NOTE: Even though obiter, the presumption of advancement for husband-wife is now resulting trust

**CONNECT WITH GIFTS: DONATIVE INTENT SHOWS PART OF GIFT COMPONENT AND THEN REBUTS
THE PRESUMPTION OF RESUTLING TRUST IF SHOWS INTENTION TO GIFT**

Madsen Estate v Saylor [2007 SCC]

F: similar situation to Pecore where father put money in joint accounts with adult daughter and then dies |
sisters want to be part of estate so they share in it, daughter wants all
A: presumption of resulting trust because sister is adult | evidence of intention of gift insufficient to rebut
presumption
NOTE: Pecore and Madsen have very similar facts but end up at different results  perhaps a difference is
that in Pecore the siblings supported claim against husband while in Madsen the siblings contested claim 
give us clear rules but unclear how to apply to facts

CONSTRUCTIVE TRUSTS (6.3)

INTRODUCTION
 Imposed where demanded by justice, often against the legal title holder’s intentions
 Two main kinds in Canada
1. Remedial constructive trust
 New and evolving tool used to remedy unjust enrichment, used mainly in family law
disputes where spouse w/out title contributes to property value
 Title holder would be unjustly enriched unless equity compelled sharing
2. Institutional constructive trust
 Has been around for centuries, occurs when a person acquires property for his own
benefit at expense to another to whom owes fiduciary duty
 Trustee meddling with trust property, agent breaching loyalty to principal,
vendor refusing to perform a contract to sell land

JUDICIAL HISTORY OF THE REMEDIAL CONSTRUCTIVE TRUST IN FAMILY LAW

 Murdoch [1973 SCC]  wife worked with husband on ranch, no money provided SCC said no
financial contribution = no equitable interest via resulting trust
o Note that Laskin in dissent suggests an “unjust enrichment constructive trust” to remedy this
 1970s (1979 in BC)  prov legislation gives common law partners equal share in family property
upon breakdown  anything acquired during marriage is fam prop
 Rathwell [1978 SCC]  married wife who worked on and contributed $ to acquisition of ranch has
equitable ½ interest via common intention resulting trust
o Theory that both spouses would have intended wife to share in property
o Minority (Laskin +2) would have also awarded constructive trust due to unjust enrichment of
husband
 Pettkus [1980 SCC]  common-law wife who contributes $ to family but not directly to farm
acquisition has equitable ½ interest in property via constructive trust but NOT common intention
resulting trust (artificial to say such common intention)
 Sorochan [1986 SCC]  common-law wife who works on + maintains farm husband brought into
relationship has 1/3 equitable interest via constructive trust
 Rawluk [1990 SCC]  constructive trust interest noted to be different than share of property that
comes from being married (an unregistered constructive trust gives beneficial owner priority over
creditors but not over BFPFVWN)
 Peter v Beblow [1993 SCC]  a common law wife who did domestic work at a home the husband
brought into relationship a 100% equitable interest in property via constructive trust (even though
no $ to acquisition or contribution to maintenance)
o Majority held that a constructive trust is appropriate under 3 conditions
1. Claimant can establish direct link between contribution and property
2. Contribution was substantial
3. A monetary award would be inadequate
Kerr v Baranow; Vanasse v Seguin [2011 SCC]
I: Is there still a role for the common intention resulting trust in such cases | should court treat claimants as
co-venturers or hired help when determining $ remedies for unjust enrichment | what roles do conferral of
mutual benefits + legit expectations of parties play
A (common intention): NO ROLE for this in trust claims for domestic partners  artificial
A (unjust enrichment): requires three elements for successful claim
1. Enrichment of, or benefit to, D  could be better off or avoided a negative thing
2. A corresponding deprivation of claimant  could be direct $ transfer or indirect loss of opportunity
3. Absence of a juristic reason to allow enrichment to stand
o Claimant must show no established category reason (gift, contract, statute)
o Defendant has burden to show another ‘new’ reason (parties’ legit expectations, public
policy/morality, mutual benefits where parties benefitted equally)
o Spouse’s duty or affection are NOT reasons to allow D to retain benefit (Peter v Beblow)
A (remedies): two main kinds of awards, both have purpose of restitution (reversing UE)
1. Proprietary award: imposition of constructive trust giving P beneficial title to D’s assets, given in
proportion to contribution given by P
o Available only where claimant can establish: direct link between contribution and property;
contribution was substantial; monetary award would be inadequate
2. Monetary award: what is actually at issue here, should it be quantum meruit (fee for service) vs share
of asset value (usually bigger b/c value increases over time)
A (choosing remedy): there are three kinds of UE and three kinds of remedies
1. Where P makes direct and substantial contribution to specific property = constructive trust remedy
proportionate to contribution (proprietary remedy)
2. Where P and D are engaged in joint family venture and their joint efforts contribute to the
accumulation of wealth (but not to a specific asset) = remedy is monetary award corresponding to
P’s proportion of contribution (share of asset value) **NOT a constructive trust**
3. P provided unpaid services but can’t link contribution to joint family venture or specific property =
remedy of quantum meruit (fee for service)
A (What is a joint family venture): depends on an open, overlapping list of factors
1. Mutual effort  did parties work collaboratively towards common family goals
2. Economic integration  were parties interdependent and integrated economic unit
3. Actual intent  did parties actually intend to share the wealth
4. Priority of family  did parties give priority to family by sacrificing for sake of family
A (Mutual conferral of benefits): Wood did not think this was important
 In joint family venture cases  once P shows contribution to family venture and wealth
accumulation, respective contributions considered in P’s proportionate share
 In provision of services cases  mutual conferral of benefits may be evidence of a contract or of
reasonable expectations at the juristic reason stage of analysis
F (Kerr): K and B lived together unmarried for 25 years, B took care of K b/c she was paralyzed for 15 years
| when broke up K sued for share in property which B had title to | B counterclaimed saying K had been
unjustly enriched by his housekeeping and care
Application (Kerr): unable to determine whether there was unjust enrichment (going either way) or joint
family venture because of a lack of evidence  go back for new trial
F (Vanasse): V and S lived together unmarried for 12 years | V gave up her job so S could pursue his IT stuff,
V did the domestic worked and cared for children | S made millions off his entrepreneurial business | broke
up now V wants ½ home interest and ½ $ assets
Application (Vanasse): There was a joint family venture | S couldn’t have built up company but for V’s
assumption of house and childcare work (direct causal link) | V awarded ½ share of S’s increased wealth
(constructive trust not asked for in appeal), minus what S had already given in divorce
BC Family Law Act, SBC 2011, c 25
3(1) A person is a spouse for the purposes of this Act if the person
(a) is married to another person, or
 (b) has lived with another person in a marriage-like relationship, and
(i) has done so for a continuous period of at least 2 years...
81
... (b) on separation, each spouse has a right to an undivided half interest in all family property as a
tenant in common, and is equally responsible for family debt

INSTITUTIONAL CONSTRUCTIVE TRUSTS

 Two Stages of Real Estate Sale
1. Agreement of purchase and sale  both parties sign a contract specifying the agreed terms of
sale and set a date for transfer of title | purchaser gives deposit
2. Closing or completion  vendor executes the title docs and hands over possession | purchaser
pays balance of purchase price | title docs registered
 Between the two dates, things could go wrong and either party could want to renege
 However, all is not lost
o A valid agreement of purchase and sale doesn’t convey legal title, but it conveys beneficial
ownership  vendor holds title on a constructive trust (retains right to purchase price and right
to possession until price paid, has to take reasonable care of property)
o Lysoght v Edwards
 A valid contract must have required contract elements, vendor title proven, terms sufficiently precise
to support specific performance, and in writing signed by party against whom enforcement sought
 Shift in equitable title from vendor to purchaser originally started b/c every piece of land was unique,
so damages are an inadequate remedy for breach of contract  specific performance always
available to compel performance
o However, this may not still be true: in Semelhago v Paramadevan SCC 1996, court said that
specific performance will only be awarded where there is no comparable substitute
property  question whether damages adequate
o Question: whether, if SP is not automatically available, whether a valid contract for sale still
transfers beneficial ownership? HAS NOT BEEN ADDRESSED IN CANADIAN COURTS YET

**constructive trust remedies arise in relation only to PROPERTY**

 QUALIFIED TRANSFERS AND FUTURE INTERESTS (Ch. 7)
FUTURE INTERESTS (7.1)
 Future interest is an interest in property where the right to possession and enjoyment is
postponed to a future time
o Future interests allow the present owner to determine when and on what conditions the future
owners may enjoy possession of the land
o Still a presently existing interest and part of the total ownership of the property

Stuartburn (Municipality) v Kiansky [2001 MAN QB]

F: In Manitoba, to hold elected office someone must be an owner or occupier of land in the town | D is an
elected official (a reeve) | D sells his house, moves out of town but holds a remainder interest in town land
that will take effect when his grandmother dies (she has LE and he has remainder FS) | can he be reeve?
A: “owner of land” here means you must be a present owner of a currently existing freehold estate in
land | remainder DOES count because it is a presently existing, vested (certain he will get it) estate in land
even though not yet entitled to possession | he can be the reeve

Another Example
o In 1990, Mulroney appoints senators, the Constitution requires senators to be seised of land worth
$4000
o Forrestall, an appointee, holds only a remainder interest in land
o Forrestall is NOT qualified b/c seisen rests only in the owner entitled to immediate possession and
the remainderperson is not entitled to immediate possession until the life tenant dies
Types of (Future) Interests
1. Vested  the interest is certain
o Vested in possession  holder is entitled to immediate possession
 Someone has a life estate
o Vested in interest  holder is certainly entitled to possession one day, but not immediately
 An estate is vested in interest if it meets ALL THREE requirements:
 The holder exists (is alive, if human)
 The holder’s identity is ascertained
 There is no condition precedent to be met (ending of a life estate doesn’t count b/c is
certain
 Example: To A for life, remainder to B and her heirs (A and B both alive)
 Examples of NOT VESTED
 To A for life, remainder to A’s firstborn (A has no children)  fails on (1) no holder
 To A for life, remainder to A’s widow  fails on (2) don’t know widow when A dies
 To B if and when she is admitted to the practice of law  fails on (3)
2. Contingent  something else must happen first so the interest is not certain
o ANY NON-VESTED INTEREST IS CONTINGENT
o Contingent interests typically treated with more hostility by the courts
McKeen Estate v McKeen Estate [1993 NB QB]
F: Dr. M died in 1981 leaving his estate to his widow for life, the residue to be divided equally among his two
sisters "if they are both alive at the time of the death of the survivor of me and [my widow]. IF only one of
my said sisters Is alive at the time of the death of the survivor of me and my said wife, I direct my Trustees to
deliver the residue of my estate to the surviving sister, the same to be hers absolutely” | both sisters died
before the widow did | who gets the residue?
I: Was the gift contingent upon the sisters surviving the widow? (if so, residue passes by intestacy rules)
A (Principles of Will Interpretation): Three aspects of will interpretation | 1  prime directive is to give
effect to the subjective intention of testator: look at outside evidence and what reasonable person would
have intended | 2  Presumption against intestacy so in cases of doubt, presume testator did not intend
to die wholly or partially intestate | 3  construction in favor of vesting: prefer to hold a gift vested rather
than contingent if will allows that interpretation
A (Two types of conditions): 1  condition precedent = makes an interest contingent upon the
occurrence of an event that may or may not occur | there is a presumption (can be rebutted with contrary
evidence) (Browne v Moody) that says an interest is prima facie vested if the postponement is simply to
allow for a prior life estate  “the survivor at time of death of life tenant” is interpreted not to mean has to
be alive at time of LT death, preferred to be vested | an interest is prima facie contingent if reason for
postponement is personal to donee like marriage (Browne v Moody) || 2  condition subsequent =
defeats a vested interest upon the occurrence of an event that may or may not occur
APPLICATION 1: “If they are both alive at the time of death of the survivor”: plain meaning difficult, look at
the rest of will combined with the principles of interpretation  what M intended was for bulk of estate to
go to sisters/survivor of sisters after wife passed | sufficient ambiguity to apply the vested construction and
this agrees with presumption against intestacy and his intent | applying Browne means since the condition
is just related to being a life tenant there is a life estate not a CP: both sisters get a remainder vested
interest (first condition not a condition at all)
APPLICATION 2: “if only one of my sisters is alive at that time”: this is a condition subsequent | saying that
the vested remainder interest was divestible subject to this condition  if one sister dies before widow
but other doesn’t, the condition is met and then the living sister gets full remainder interest as long as she
outlives widow  dead sister is divested of interest if other outlives widow
APPLICATION 3: Both sisters died before the widow, so the condition subsequent in (2) above has not
occurred | both of the interests of sisters are therefore no longer divestible b/c they became absolute
upon death of second sister before widow  both sisters estates now vested half of remainder each

**BROWNE RULE ALWAYS APPLIES  a life estate with remainder to X if alive with no additional language
that indicates intent to be a condition precedent of actually being alive means it is vested remainder for X
 Intent to rebut this must be extremely clear, b/c often that intent might give intestacy as well

Examples of CP vs CS
 1 – CP: To A for life, remainder to B in FS when and not before B turns 25  B’s remainder is subject to
a condition precedent, vests in interest when B turns 25 and vests in possession when A dies  A’s
death is not a condition precedent because it is inevitable
o A CP makes a future interest contingent on that event occurring
 2 – CS: X to A and her heirs on the condition that she not remarry, but if she remarries, the interest shall
revert to X  A has a FS vested in possession, but subject to divestment if she remarries; X has a
contingent right to recover FS, will vest in interest and possession if and when A remarries
o A CS makes a vested interest subject to divestment on that event occurring
Two Types of Estates that can be Terminated upon an Event
1. Estates subject to a condition subsequent
o Usually use words like “But if”, “on condition that”
o Holder’s estate is vested until the divesting event
o The other person (grantor) holds a contingent right of entry (right of entry for condition
broken)  grantor must assert their rights by entering property and retaining possession when
the condition occurs in order to vest the interest
2. Determinable Estates
o Usually use words like “so long as”, “until”, “during”
o Holder’s estate is vested until the divesting event (same)
o The grantor retains a possibility of reverter, which in Canada is considered vested  upon the
terminating event it operates and automatically reverts to the grantor

 Why does it matter which?

o A contingent right of entry (1) is more likely to be invalidated than a vested one (2) due to the
rule against perpetuities: states that any interest must vest within a certain period (usually
75-80 years after instrument takes effect) or else it is void
 Thus, if discussing events that happen in the far future, vested would be valid while
contingent might not be

Caroline (Village) v Roper [1987 AB QB]

F: In 1949 Roper’s widow transferred 1 acre to the Caroline community centre on the condition that it “shall
revert back to the Late Thomas Roper Estate is used for other than a community center” | eventually
transferred to village of Caroline | the community centre burned down in 1982 | the village wants to sell the
land for commercial purposes, no community hall plans while the estate wants it returned
I: Did the village receive a FS subject to a CS, or a determinable FS  if the former, condition is void b/c rule
against perpetuities but if the latter, valid and enforceable b/c not subject to perpetuities rule in Can
A: to tell apart the two options, look at the specific language and grammatical structure as well as the
common words used above | if ideas separated grammatically with commas, semi colons periods  likely FS
with CS b/c that is seen more as an independent clause added to a FS | in contrast, “to the school board as
long as it shall be used and needed for school purposes and no longer” = determinable FS (Re Tilbury West
Public School Board) | here, the clause looks like a FS absolute with the extra condition added to defeat the
FS if it is used for other than a community centre | condition subsequent and is void as against the rule
against perpetuities
NOTE: the condition was void but the court took pity on laypeople drafting it so used statutory powers to
rectify the document to make it a determinable fee simple and revert back to Roper estate  says that gives
effect to the parties’ common intention
 STATE LIMITATIONS ON PRIVATE POWER: PUBLIC POLICY (7.2)
 The question of this chapter is when will the law overrule a property owner’s desire to control how
and by whom his property is enjoyed in the future

Re Leonard Foundation Trust [1990 ON CA]

F: Leonard, a wealthy philanthropist, established a trust in 1923 to give scholarships to young people | the
preamble said a whole lot of stuff about the White Race being greatest to advance civilization | the trust
eligibility requirements said you had to be a subject of the White Race and Protestant Christian, with
preference for children of particular occupations | also had a rule that females could only get max ¼ of the
total scholarships each year | the Trustees are now taking the trust to court to determine validity after there
were lots of complaints about it from Human Rights groups | trail found didn’t violate public policy
I: Do the terms of the trust contravene public policy | If so, is the trust save by the cy-près doctrine?
A (Robins: PP): public policy should be invoked cautiously for a number of reasons | 1  judicial
idiosyncrasy: danger of unelected judges imposing own values | 2  separation of powers this should be
left to the legislature | 3  freedom of contract and proprietorship let people do what they want | however
here the harm to the public is incontestable, not depending on judge values | Foundation stands for
propositions that White Race and white, Christians students are the best for advancing civilization, racial
and religious supremacy, and British nationalism | clearly contravenes contemporary public policy b/c
against democracy, equality rights and the multicultural heritage of Canada
A (Tarnapolsky conc: PP): need to recognize court is breaking new ground here in both Canada and UK |
there are a number of previous cases which have NOT struck down instruments on PP grounds | but by
looking @ the large number of anti-discrimination legislation that exists (Charter, Human Rights Codes, int’l
agreements support that public policy is anti-discrimination | trust is void on grounds of PP b/c it
discriminates on the grounds of race, religion, and sex
A (cy-près doctrine – Robins): if it becomes impossible or impracticable to carry out a trust created for
charitable purposes, the court may revise the trust to carry out the settlor’s intentions “as nearly as
possible | requires 4 things to apply | 1  trust has a charitable purpose (poverty relief, education,
religion, benefit to community | 2  charitable purpose in (1) must be the exclusive purpose | 3  must
promote a public benefit (both beneficial and not harmful to public AND benefit available to a sufficient
cross-section of public) | 4  the trust must have been practicable when created but is not
impracticable to administer now || here, the trust has the wholly purpose of advancement of education
and does promote a public benefit = education available to sufficient cross section | the trust was valid at the
start b/c the PP issues were not issues when created but now has become impracticable due to public policy
| trust altered by getting rid of all the initial recitals and all restrictions based on nationality, religion, race,
colour, ethnic origin, and sex | can keep the parts that specify preference for children of certain occupations
NOTE: In obiter, the court mentioned that discrimination in favor of a historically disadvantaged group
might be okay on a case by case basis  women, aboriginal peoples, handicapped, etc

Noble and Wolf v Alley [1949 ONT] upheld 1951 SCC *about covenant not trust* (mentioned in Leonard)
F: was a racially restrictive covenant that land could not be sold or transferred to leased to anyone of Jewish,
Hebrew, Semitic, Negro or coloured race or blood b/c Grantor only wanted Caucasians enjoying it
A: court held this covenant to be okay at that date  didn’t violate PP
NOTE: many jurisdictions now have statutory laws against such covenants

Re Ramsden Estate [1996 PEI SC]

F: the AG & Eliza Jane Ramsden scholarship is set up at the Uni of PEI only to be awarded to Protestant
students
A: nothing that suggests blatant notions of supremacy or racism as in Leonard: this restriction of eligibility is
okay absent any blatant evidence
University of Victoria Foundation v BC [BC SC 2000]
F: Florence McConnell Bursary says only available (as per will) for a practining Roman Catholic student
A: this is okay b/c no blatant supremacy
Blathwayt v Baron Cawley [1976 UK HofL]
F: B left his real estate to a series of descendant beneficiaries provided they not be or become Roman
Catholic
A: court says this is okay, doesn’t violate public policy b/c is private  not a charitable trust

Re Tuck’s Settlement Trust [1977 ENG CA]

F: Sir Tuck settled a trust for future baronets so long as they were married to a wife of Jewish blood and
continued to worship according to the Jewish faith
A: court held did not violate PP (but did have some issues with certainty)

Fox v Fox Estate [1996 ONT CA]

F: Ralph Fox’s will made his widow the executor and trustee and gave ultimate power to encroach upon
estate to benefit grandchildren | gave son Walter residue if he survived widow | son had bitter divorce from
grandchildren’s mother and married secretary who was not Jewish | widow close to grandchildren, she
transferred entire residue of estate to grandchildren mostly b/c secretary not Jewish
A: widow had abused powers b/c used considerations extraneous to duties conferred in will | Galligan JA
also suggested that it may be contrary to public policy for testator to disinherit a beneficiary under a
will b/c married outside the faith (and if a testator cannot do that, neither can executor)

Spence v BMO Trust Co [2016 ON CA]

F: Spence was not white | his daughter started relationship with white man and became estranged prior to
father’s death b/c he didn’t like relationship | when father died his will said bequeathed nothing to her b/c
had had no communication with him for several years and shown no interest in him as father
A: court does not interfere: terms of will are unobjectionable so respects testamentary freedom regardless
of the motivations

McCorkill v McCorkill Estate [2014 NB QB] *LOOKED OUTSIDE THE WILL FOR DISCRIM INTENTIONS*
F: M left essentially his whole estate to the National Alliance in Virginia (neo-Nazi group) | no discriminatory
conditions or outward racism or supremacism in will just a gift to an organization
A: court voided will based on obvious nature of beneficiary as against public policy b/c their goal is to
promote hatred against non-whites and promotion of hatred is a crime in Canada

Royal Trust Corp of Canada v The University of Western Ontario [2016 ON SC] **SEE HANDOUT**

SUMMARY OF THE RULES ON PUBLIC POLICY – MAYBE?

An owner’s attempt to control the future ownership or use of property will be void as against public policy
when…
1. The instrument contains discriminatory conditions or qualifications (but affirmative action may be
okay) AND (Leonard)
The instrument conferring ownership contains blatantly racist or supremacist motivations or goals
AND (Re Ramsden, University of Victoria)
The instrument creates an arrangement that has a public character (eg charitable trust) (Blathwayt,
Re Tuck)
2. The instrument is unobjectionable but the executor/trustee has discriminatory motives (Fox)
o Still a question what happens if testator has discriminatory motives  maybe void as per Fox
but maybe okay as per Spence
 3. The transfer is absolute and unconditional but the recipient has reprehensible or illegal aims or
activities
o If beneficiary killed testator, if beneficiary gives to terrorist organizations (lecture)
o If beneficiary has aims contrary to PP and pursues aims by illegal means (McCorkill)
Ziff ‘Newest Unworthy Heir’
 If you murder someone you don’t get the proceeds of their will (unworthy heir)
 This can be extended maybe to doing any crime to get the $$ being no good
 Can be extended then to stuff like funding terrorism, seems to line witth McCorkill b/c the Neo-Nazi
group was doing illegal things as per the Canadian CC

STATE LIMITATIONS ON PRIVATE POWER: UNCERTAINTY (7.3)

HJ Hayes Co v Meade [1987 NB QB]
F: Thomas Hayes left ¼ of his land to his son James on the condition that he reside on the said land and
cultivate it | if didn’t do so, property would go to son Harold, he paying James $1000 | James didn’t take
possession and moved to US | Harold never paid $1000 | James returned in 1968 to live on property and
died in 1983 | Harold descendants claiming it
I: what kind of conditions are “reside on and cultivate” and Harold paying the $1000  conditions of
acquisition (CP) or condition of retention (CS or determinable limitation)
A: CP has loose standards for uncertainty  valid as long as it can be determined that we are practically
certain the particular beneficiary meets the conditions | condition of retention (CR) has a more stringent
test: the court must be able to see from the start precisely and distinctly for all potential situations what
event will terminate the interest (Re Down) || Also different consequences of invalidity  for CP, if the CP is
void for any reason the entire interest is void | for CR if a CS is void, only the condition struck out with
the interest now being unconditional; if a determinable limitation is void, entire interest is void
APPLI: testator intention was wanted all sons to benefit somehow (property or $1000) | if is CP, James gets
nothing b/c didn’t reside and cultivate and if paying $1000 also CP, alternative gift to Harold fails too and
the lot goes into intestacy which is bad | following the rules for wills they want to view as vested =
conditions of retention | these are CS (don’t know why not determinable) | CS on James is VOID for
uncertainty: when did he have to take up residency, could he take vacays  condition struck out and lot
simply gifted to James
NOTE: although the logical progression is determining the type of condition and then determining whether
it is void or not, in reality the courts look at them together to be fair and give effect to intention
NOTE 2: to achieve Hayes’ objective, could draft will that uses statute-based criteria to provide more
certainty: ‘property principal residence for tax purposes’ ‘farm produces X produce, X amount of farm
income is declared for tax purposes’

Fennell v Fennell [2012 NL SC]

F: mother died in 2008 and left home in NFLD to her 5 children who didn’t live there | left it "With the
condition that all of my family can make use of the said house at any time without costs provided that they
share in the upkeep of the said house"
A: family use and shared upkeep both CS  continuing requirements ongoing basis | the purpose of
uncertainty test is to give predictability as to what required of recipients | will must provide a practical level
of clarity so that we can understand clearly and distinctly what is required | objectively verifiable and
practically clear criteria must be provided and here there is no ‘standard’ for who is family or what it means
to share in the upkeep so VOID for uncertainty
NOTE: compare this case to Re Brace [1954 ENG], where father left the house to his married daughter on the
condition that she would always “provide a home” for the disabled other daughter | court said that if seen as
a condition, “provide a home” would be void for uncertainty | however, the actual way to interpret it was
simply as a request made by testator not a condition so married daughter gets house absolutely
NOTE 2: To actually achieve Fennell’s objective, would need to define family (divorce, marriage) and ‘share
in the upkeep’ (schedule of payment for each stirpes) OR add a dispute resolution mechanism to determine
which interpretation is correct in the event of disagreement
Re Down [1968 ON CA]
F: will stating “when my son Harold arrives at the age of 30 years, provided he stays on the farm, then I give
all of my estate unto my sons Stanley and Harold”
A: achieving age of 30 is a CP | ‘provided he stays on the farm’ is VOID FOR UNCERTAINTY (no criteria for
determining nature and degree of presence required)  and because it is a condition of retention (a CS =
keeps the land as long as stays on the farm) it is struck out and Harold gets unconditional vested interest
shared with Stanley

Philpott v Philpott Estate [1989 NLSC]

F: will “to my grandson Bruce Greening my dwelling house and all its contents…it is to be clearly understood
that the said Bruce Greening is to take care of his grandfather…and to see that in the event of death he is to
be decently and properly interred"
A: court determined were just statement of wishes of testator not conditions | but if had been conditions 
CS would be void for uncertainty or CP that would be okay and have been fulfilled

Davis Estate v Thomas [1990 BCCA]

F: "The house at 792 Mapleton Place Victoria to Gerald F Thomas, IF he wishes to live in it. IF he doesn’t wish
to live there, then it shall be sold and half the money go to him [other half to other named people]"
A: this is a condition precedent on ownership: before gets the interest must decide to live there | to avoid
uncertainty all that needs to be determined is whether claimant has satisfied | court issues ordering saying it
was CP and Gerald had to make written declaration wanted to live there and has 1 year to occupy

Kotsar v Shattock [1981 Victoria SC]

F: "to Oilme Kotsar if and when she shall attain the age of 21 provided that upon attainment of such age she
shall then be resident in one of the countries of the British Commonwealth of Nations"
A: age is clearly a CP | the second part is a CS but literally only for the one day when she turns 21: has to be a
resident on that day | residency condition usually a problem w/ uncertainty b/c impossible to determine
without some kind of measure but not a problem for one day you can tell where residing as defined in the
legislation | no perpetuities issue b/c what is in the Commonwealth is specific to her lifetime and therefore
will happen within the perpetuity period | she didn’t satisfy the condition anyway was nowhere in the
Commonwealth

Sifton v Sifton [1938 Judicial Committee of the PC]

F: “the payments to my said daughter shall be made only so long as she continue to reside in Canada”
A: void for uncertainty b/c impossible to figure out what “reside” means
 STATE LIMITATIONS ON PRIVATE POWER: ALIENATION (7.3)
 Struggle between making land freely alienable (able to be sold to someone else) and allowing
landowners to use right of ownership to restrict what their successors can do with the land
 Courts have determined there are some limits on what landowners can control what happens to their
land once in the hands of a successor

Trinity College School v Lyons [1995 ON GD] **GD = superior court of justice
F: in 1965 the Bennetts gave their neighbour and employer, Trinity College School (TCS) a right of first
refusal shall they sell land during their lifetimes | also gave an option to buy land for $9k upon the death of
the survivor of them | in 1978 they purport to gift land to daughters and Tom dies | in 1991 Mildred died |
TCS is demanding to buy land for the option price of $9k | land is now worth $135k
I: Is TCS’s fixed price purchase option void as an unlawful restraint on alienation?
A: a condition that would take away the necessary incidents of a freehold estate (eg the power to alienate) is
void as repugnant to the estate | an absolute restraint on alienation, even temporary, is void b/c takes
property out of commerce and [wealth] || the rule is that a restraint on alienation that goes along with a
grant of land to a new owner will be void (Re Rosher, Re Cockerill), but a restraint on alienation you impose
on yourself as current owner is ok (Stephens below)
APPLI: the inter vivos right of first refusal at a fixed price was NOT VOID even though had the $9k fixed
price: people can sell their land for a bad price | however people CANNOT bind a third party to such a bad
agreement as a condition of getting the land  couldn’t pass property to their estate, in this case, and force
the estate to take the land subject to TCS’s right to buy at fixed price | the post-mortem pre-emptive
option to purchase at a fixed price of $9k is VOID as a restraint on alienation esp. since it was
exercisable at the choice of TCS whether the executrix of will wanted to sell or not

Re Rosher [1884 Chancery]

F: testator granted son his property but provided that if son wanted to sell during lifetime of testator’s wife,
she should have option to purchase it for £3000 and had to be offered to her | testator died and value of
property was £15,000
A: the requirement of the son to have to sell at 1/5 of the value was equivalent to absolute restraint on sale
during life of widow and void as repugnant to having the estate in FS

Re Cockerill [1929 Chancery]

F: testator devised land to devisee on condition that if he desired to sell lands within 20 years of testator’s
death, a School should be given option to purchase it at £300/ acre | at time of death worth £670/acre
A: condition requiring land to be offered to School void as a restraint on alienation

Stephens v Gulf Oil [1975 ON CA]

F: S wanted to purchase part of Palen’s land for $32,000 which Palen was good with but Palen had given a
right of first refusal to Gulf | Gulf agreed but the terms included a righ t of first refusal from Stephens to
Palen at that fixed $32k price as well as Palen giving Stephens a right of first refusal to Palen’s remaining
property at price of $64k
A: need to distinguish between the two rights of first refusal | the one being imposed on Stephens for the
land he is buying, as a term of the sale, is VOID as a restraint on alienation | however the right of first refusal
for the remainder of the land is not void b/c Palen was not acquiring new title just granting a right of first
refusal for land he already owned
SEE HANDOUT ON COMBINING ALL STATE LIMITATIONS ON PROPRIETARY FREEDOM (KAY CASE)
 LEASES, LICENSES AND BAILMENTS (Ch. 8)
THE NATURE OF A LEASE (8.1)
 A lease is about dividing title/ownership from possession  landlord gets title to land and the tenant
holds exclusive possession
o The interest a landlord retains during a lease is a reversion interest
Lease vs License
 Lease
o Proprietary estate conferring the right to possess a parcel of land for a limited time
o Leasehold estate is a form of land ownership: divides ownership of freehold with possession
o Types: fixed term, periodic, at will and at sufferance
o Terminology
 Landlord or lessor  owner
 Tenant or lessee --> possession
 Demise  act of granting a leasehold estate ('a demise of the land' = creation of leasehold
estate)
 Leasehold  interest that is created
 License
o A mere permission to enter the land, with or without additional permission to perform specified
acts there
 Eg parking car in a commercial parking lot  acquiring license to enter premises for
purposes of parking, as long as you pay the fee you have the right to occupy the space
taken up by the car but wouldn’t be considered a tenant
o Terminology
 Licensor  one granting the right to enter
 Licensee  one being given the right to enter
LEASE LICENSE

Tenant is conferred right of possession Licensee gets mere permission to enter land and
maybe perform specified acts there
Leasehold estate is a form of land ownership No type of land ownership conferred

Tenant has rights against the whole world,
including subsequent purchaser of land
Breach remedies: recovery of possession AND
damages
Special statutory procedures, tribunals, remedies
Personal agreement so doesn’t usually bind third
parties/new purchasers of land even with notice
Breach remedy is just damages
No special rules or procedure
Fatak Ltd v Commissioner of Inland Revenue [2002 NZ CA]
F: Puhinui owned 10 hectares near Auckland | it granted Atlas the right to quarry on part of the land for 12
years, reserving a general right of access as long as didn’t obstruct A’s permitted activities | Puhinui then
sold the land to Mt Wellington which entered into contract with A reserving for itself the right to quarry
everything but basalt, do lots of work provided didn’t impede A’s quarrying operations | the question at
hand is whether A’s two agreements were leases or licenses b/c in NZ who is responsible for the GST
payment of the land sale depends on the status of arrangement
A (The Test for a Lease): Classic test is whether the holder has an exclusive right of occupation of the land
but can be subject to certain reservations or restriction of purposes for which it may be used (Glenwood
Lumber) | then Denning took a detour saying it depends on the intention of parties to create a merely
personal privilege vs an interest in land and exclusive possession not determinative | modern test is a
return to exclusive possession test saying that an agreement is only “personal” if it doesn’t confer a right
of exclusive possession (Street v Mountfort, HL 1985)
A (Exclusive Possession): the effect of the agreement is the key consideration  does the agreement
satisfy all the requirements of a tenancy?  doesn’t matter what the parties intended to create | intention
wrt legal classification or personal character irrelevant only intentions wrt exclusive possession relevant
A (Refinements): a lease is STILL a lease even if there are serious restrictions on use of land as long as
still have exclusive possession and ability to exclude others | a lease is NOT STILL a lease if the owner
reserves the right to enter at any time with or without notice even if cannot impede use  this means no
exclusive possession | NOT STILL a lease if owner has exclusive possession of only a small part of
agreed upon premises | if no rent is charged, could still be a lease  rent points toward being one but is
neither necessary nor sufficient | if the lease is terminable subject to another legal relationship
(being a student, being an employee, being a priest) then is NOT STILL a lease
A (labelling done by the parties): in the UK and NZ, holds that this is irrelevant to determining whether is
lease || in CANADA, however, there is some weight given to it (SEE METRO MATIC)
APPLI: “The fundamental distinction between tenant and licensee is that the former alone has the right to
exclusive possession" | here the following facts are important: (no provision for rent, contract labelled
license agreement  these two the court said don’t really matter), P had general right of access and Mt. W
had a whole lot of rights of access | no clearly defined area where A had exclusive use let alone substantial
portion of entire premises | ISSA LICENSE
Metro-Matic Services Ltd v Hulmann [1973 ON CA]
F: apartment building owner enters into “Lease Agreement” w/ MM | uses typical lease terminology (to
have and to hold the devise of the premises for 5 years) and provides premises shall be used only for
laundromat business | tenant has exclusive right to install & maintain equipment | tenant’s agents have free
access to premises at all reasonable times to purposes of inspection repair and money collection | building
residents have free access to premises at all reasonable times | landlord agreed would obtain agreement
from purchaser of land to also be bound | new owner buys building with full knowledge of lease, accepts two
rent cheques then tries to terminate agreement
I: Is this a lease or a license (b/c matters to whether new owner can kick out or not)
A: the fact that it explicitly grants tenant’s agents access sounds like license (lease would be automatic) | fact
that the building residents cannot be excluded also sounds like license | HOWEVER, court determined was a
LEASE || label on the arrangement and the terminology uses is a strong indication  absent evidence
to the contrary that will indicate which type of arrangement it is | the tenant right didn’t take away from
being a lease just clarified rules about the machines as fixtures | building residents having access was just
being clear that ppl could do things associated with a coin-operated laundry business and didn’t take away
from MM’s exclusive possession | severe resrictions on use don’t change away from being a lease || new
owner bound by lease so MM can remain for rest of the lease term

Re B.A. Oil Co. & Halpert [1959 ON CA]

F: service station operator signed a “Service Station Lease” and “Retail Dealer Sales Agreement” that used
typical lease terminology | it prohibited orperator from any construction, alteration or advertising w/out
landowner’s consent | allowed landowner (P) to place signs on premises | required operator to sell only P’s
products and provide facilities for storage, display and sale of P’s products
A: looked like a lease w/ terminology | restrictions don’t make it not a lease b/c the possession remains
exclusive in the fact that nobody else could do business there (Glenwood Lumber) | reservation of right to
place signs not a significant interference | restrictions on selling products don’t take away from
exclusivity of possession | ISSA LEASE

IN CANADA THE TERMINOLOGY AND LABELS USED BY PARTIES MATTER

Shell-Mex v Manchester Garages [1971 ENG CA] *part of the Denning detour but likely still stands in UK*
F: service station operator signed “License” agreement that allowed operator to occupy premises | required
only to sell landowner’s products | allowed landowner’s employees to enter premises at any time w/out
notice and required operator not to impede landowner’s right of possession and control
A: ISSA LICENSE | degree of rights reserved by landowner is too high for a lease (different from BA Oil)
 this would likely even be enough alone (as suggested in Fatac) | PLUS said operator couldn’t interfere
w/ landowner’s possession  no doubt the two combined mean no absolute right of possession for
operator

Street v Mountfort [1985 UK HofL]

F: UK renters rent housing under a “license” agreement that gives the owners the right to enter the premises
at any time w/out permission and to assign additional lodgers at will | owners never enforce and never
intended to enforce provisions but drafted docs so would be construed as licenses to get around legislation
that protects tenants under leases
A: language you use doesn’t matter even if what you say you created and intended to create is different |
what matters is what was actually created | only intention that matters is intention to grant exclusive
possession | here what was created was a LEASE b/c had exclusive possession
NOTE: this kind of issue has not arisen in Canada b/c the lease/license distinction is rarely relevant in cases
b/c of the Residential Tenancy Acts which don’t care about that distinction… however it could matter for
other situations like hotels….

Re Canadian Pacific Hotels Ltd & Hodges et al [1978 ON SC]

F: Mr. H and fam live in a suite at the Royal York hotel for 15 years with no written agreement, pay a reduced
rate for long stay | install some of their own furniture but use maid service, phone and other amenities like
other guests | check out owing $13k
I: Is this a lease or a license? (if lease, the landlord tenant act provides for expedited procedures for hotel to
get their $$)
A: did Hodges had exclusive possession  the hotel always retained access to the room through maids but
that is almost always true for landlords of apartment buildings too | however this is different from landlord
b/c typically landlord restricted in how and why can use key, hotel can access premises for a wide range
of reasons and it is expected they will exercise right as needed so the Hodges did NOT have exclusive
possession required for a lease | ISSA LICENSE
 LANDLORDS’ AND TENANTS’ INTERESTS AND OBLIGATIONS (8.2)
Merger Restaurants v DME Foods Ltd [1990 MAN CA]
F: two restaurants rent adjacent lots from the same landlord | an expansion on one lot leads to a parking
shortage | new landlord grants DME parking rights on the lot occupied by Merger | Merger objects that its
lease with the prior landlord gives it exclusive parking rights for its customers on the common areas of lot
I: Is the new landlord bound by the previous landlord’s promise of exclusive common area rights?
A: to bind the new owner, the covenant (contractual promise) must be found to “run with the land” |
when there is no privity of contract but there is a privity of estate as here (see picture below), only REAL
COVENANTS run with the land | real covenants are those that ‘touch and concern’ the subject matter of
lease (aka the land itself) vs being merely personal to the tenant | real covenants bind both the landlord’s
assignees and the tenant’s assignees | test for whether a covenant touches and concerns the subject
matter of the lease: does it affect the nature, quality, use or value of the land itself? | here, yes it does
b/c the extent and availability in the shopping plaza affects value of land so DME cannot use the parking
spaces b/c covenant binding on new landlord b/c covenant runs with land
NOTE: the court here distinguished the BCSC 1986 case Kontogonis (where a landlord being required to
provide parking space for a restaurant was held to not to run with the land) from the situation here in a
number of ways | 1  Kontogonis involved a restaurant on the ground floor of an office building, not a
shopping mall so there would be less volatile parking and less demand b/c restaurant mostly served office
workers who are there anyway | 2  the lease in Merger had stronger language: right to common areas vs
obligation of landlord to provide parking space | 3  disagreed with the reasoning in Kontogonis that said
the covenant was a separate contract from the general lease

 Landlord tenant have privity of contract

(PC) and privity of estate (PE)
 If landlord assigns interest to a new
landlord (assignee) the landlord’s
interest is called a reversion | there is a
landlord-tenant relationship still so
there is PE but NOT PC
  If a tenant assigns her rights to an
assignee, then T’s assignee and the
landlord have PE but not PC
 If both parties assign rights, the two
assignees have PE but not PC
 If a tenant does a sublease (transfer
something less than entire interest like
less than the lease time) then tenant and
sub-tenant are now in landlord-tenant
relationship and have PE and PC |
landlord under main lease has neither
PC or PE wth sub-tenant  must go
after tenant instead
**REMEMBER: if there is PE BUT NOT PC, only real covenants
are enforceable between parties: must ‘touch and concern’ subject
matter of lease = affect nature, quality, use or value of subject matter***
A real covenant (aka covenant that touches and concerns) runs with the land as long as there is
privity of estate in a leasehold context  regardless of whether the covenant is positive or negative
(for freehold has to be negative and needs other factors too

Sundance Investment Corp v Richfield Properties Ltd [1983 AB CA]

F: S, a tenant in Calgary’s Heritage Mill mall, wants to sublet portion of premises for a Swiss Chalet | lease
says may not sublet w/out landlord’s consent, which shall not be arbitrarily or unreasonably withheld |
refusal not unreasonable if other major tenants object to the “nature of [proposed] business” | Landlord (D)
withholds consent b/c major tenant Beaver Lumber (B) objects due to parking space concerns
I: Was D entitled to rely on B’s objection? | Was D’s refusal unreasonable independent of B’s objection?
A (entitlement to rely MAJORITY): Yes, Beaver objected to the ‘nature of the business’ of SC b/c
availability of parking and patterns of parking (static) generated by a particular tenant are in the nature of
business of SC, not inherent to any business
A (entitlement to rely DISSENT): parking is inherent to any business in a shopping mall | contractual
rights on subletting should be construed narrowly b/c restrain alienation | location of entrance was what
was actually being objected to not nature of business | B objecting to successful businesses w/ many
customers not nature of business
A (unreasonable anyway? MAJORITY): always the party alleging unreasonableness who has burden of
proof | question is whether any reasonable landlord could have reasonably withheld consent (not ‘would
have’) | landlord can rely on any genuine reason, whether given at time of refusal or not | if landlord
refused b/c of adverse impact on own financial interest this is always a valid reason to withhold
consent (Coopers & Lybrand) | consent reasonably withheld  no delicious chicken
A (unreasonable anyway? DISSENT): landlord shouldn’t be able to use reason that profits will
decrease (have agreement with B for % of sales) b/c if allowed to withhold consent for this reason would
amount to rewriting lease to provide minimum revenue for landlord  wasn’t unable to interfere with
Sundance’s business success or failure, so shouldn’t be able to give this as reason | Coopers & Lybrand was
about proposed sub-tenant being permitted to do business the actual tenant was not permitted to do, fact
that refusal was reasonable not decided on concept of adverse impact on landlord’ finances
NOTE: On page 627 the case of 1455202 Ontario Inc v Welbow Holdings Ltd [2003 ON SC] mentions that
reasonableness of refusal can only depend on “the information available to – and the reasons given by – the
Landlord at the time of the refusal – and not any additional, or different, facts or reasons provided
subsequently to the court” || not clear whether this means info the Landlord actually knew or just that he
could have known at time of refusal || but appears to state that any additional reasons given after the fact
may not be considered  ON EXAM ACKNOWLEDGE THIS CONFLICT SAY BC COULD GO EITHER WAY
The Covenant of Quiet Enjoyment
 At common law, freedom of contract prevailed such that there were few implied terms and most of
those could be negated (default only)
 However, there was one term that could be implied and CANNOT be negated: the covenant of quiet
enjoyment
 Typical formulation is “Landlord covenants that on paying the Rent and performing the covenants
contained in this Lease, Tenant will peacefully and quietly have, hold and enjoy the Premises for the
agreed Term”

When Will the Noise of Other Tenants Breach Covenant  UNCLEAR

 Albamor Construction v Simone [2004 ON GD = superior court of justice]  if landlord is aware of a
other tenant making disturbance and sits idly by, may be liable
 Curtis Investments v Anderson [1981 MAN Co Ct]  if landlord actively authorizes, endorses,
consents to or participates in noisemaking the landlord is required to take some positive action, but if
no contribution then sitting idly by is okay
 b/c both low level decisions and not from BC COULD GO EITHER WAY IN BC COURTS
 EXCEPT note that the BC Res Ten Act says that a landlord who gets complaints so knows of the
issue has to act (from Guest Lecture)

Southwark London Borough Council v Tanner [2001 HofL]

F: social housing tenants in south London complain of excessive noise due to a lack of sound insulation in
apartments | apartments had always had a lack of insulation | claim violates landlord’s covenant not to
interfere w/ right to quiet enjoyment of premises | no warranty claims available to them, duty to repair and
keep remises in good repair doesn’t mean a duty to improve so no claim there either
A: covenant of quiet enjoyment means that the tenant’s ordinary and lawful possession will not be
substantially interfered with by acts of the lessor or those lawfully claiming under her (includes
workers and any other tenants of the same landlord) | quiet = without interference or interruption of
enjoyment = full benefit of possession rights | substantial interference could be excessive noise alone but is
not here b/c the tenants were not being unreasonably noisy the problem was the lack of sound
insulation which is due to the inherent character of the building itself, pre-existing when tenancy began
which means covenant is not breached | excessive noises must be due to conditions that didn’t exist
when lease began, or acts that were not in parties’ mutual reasonable contemplation when lease
began (ex adding a rooftop terrace) | covenant not broken, Parliament hasn’t imposed duty on social
housing landlords to sound insulate and not appropriate for courts to modify common law in such a
significant way

Pellatt v Monarch Investments Ltd [1981 ON Co Ct]

F: landlord’s extensive renovations disrupted P’s ability to study for the Ontario bar admission course | they
renovated even her own kitchen | landlord had offered termination or free alternative housing but P had
declined | now suing on covenant of quiet enjoyment
A: the landlord acted reasonably by offering alternatives and compensation | but nevertheless, the question
is whether substantially interfered with possession and DID  covenant breached
NOTE: Why did Pellatt succeed and Tanner above failed?  crucial difference is P’s complaint didn’t have to
do w/ the pre-existing condition of the premises, the renos happened long after lease began | this was more
than just noise and vibrations from the ordinary use | activities done by agents of landlord not other tenants
| involved direct physical entry into apartment and therefore direct intrusion on possession

RESIDENTIAL TENANCY IN BC (GUEST LECTURE – 8.3)

 SEE OTHER PAGE

BAILMENT (8.4)
 Bailment is like the “lease” of a chattel
 To distinguish bailment from a license  turns on whether the possession has been transferred
 Bailment is “delivery of personal chattels on trust, usually on contract, ... that ... the chattels be
delivered in either their original or an altered form as soon as a time for which they were bailed has
elapsed.” (Punch v Savoy’s Jewellers)
 Unlike lease, a bailor (like a landlord) CAN sue a sub-bailee (like a sub-tenant) (Punch v Savoy)
 Person parting with possession = bailor
 Person taking possession = bailee
 Two main questions to ask
 Does a bailment exist?
 If so, what are the consequences, esp. if something happens to the bailed item?

**A FINDER IS A BAILEE BEFORE THE OTHER OWNER IS DEEMED TO HAVE ABANDONED IT**

Letourneau v Otto Mobiles Edmonton [2002 AB QB]

F: OM repaired L’s Tripe E Topaz camping trailer | the L’s requested some further repairs | OM’s manager
told them (didn’t invite them, but rather directed them) to leave the trailer in the adjacent parking lot
after hours, padlock it and lock the key in the water compartment to be picked up next morning by OM | this
was OM’s standard practice for after hours delivery | the L’s following instructions, also ran into another
couple doing the same thing | trailer disappeared before OM went to pick it up the next morning
A (Was there a bailment of the trailer to OM): if no bailment, L left trailer at own risk, if bailment than OM
had duty to safeguard | essential element is where there was a transfer of effective (doesn’t have to be
exclusive) possession of the trailer | must show bailee took possession of item (physical control +
intent to control) | there are a number of factors to consider | 1  alleged bailee’s instructions: L’s were
given precise instructions and complied which strongly indicates bailment b/c goes to intent to control | 2
 alleged bailee’s established practice: standard practice favors a bailment and this was a standard and
agreed upon practice just like in Hefferman | 3  alleged bailee’s knowledge: helps establish intent to
control whether had knowledge of how to gain control and here OM had knowledge b/c of instructions | 4 
whether possession is necessarily incidental to the service to be performed by bailee (was there a
contract for service): here, possession must necessarily be transferred to effect repairs; another example
is valet parking (Appleton) leans towards bailment | 5  location of the chattel: if placed on premises of
bailee supports bailment so this was big part of OM’s defence b/c never physically took possession of trailer
and not on property: court says location of chattel not determinative (Hefferman) and being on the other lot
doesn’t negate bailment || THERE WAS A BAILMENT and transfer was effective upon moment L’s
completed the instructions so was in possession of OM when was stolen
A (Did OM meet SOC applied at bailee): Bailee has a duty of safekeeping: modern standard is a general
reasonableness standard which says bailee must take the same care of the goods as would a prudent
owner acting reasonably in the circumstances considering who was benefiting, how bailment came about
relationship b/w the parties, value of item, cause of loss || here, OM failed to provide reasonably safe
storage = didn’t take reasonable care to ensure trailer reasonably safe so didn’t meet the SOC
A (Did failure to meet SOC cause loss): yes, the failure to provide safe storage made it easier for someone
to steal the trailer so contributed to the loss
A (were Ls contributorily negligent): L’s took reasonable precautions | L’s had no reason nor duty to
inquire into the adequacy of the arrangements, they were advised the instructions were good | were given
specific instructions to leave the key in the water compartment and did so
A (Even if OM otherwise liable, can they rely on waiver of liability from the previous repair work
order?): Waivers of liability construed strictly against the party in favor they are for, even more so in an SFC
| interpreted “not responsible for loss or damage to vehicles beyond our control” to only apply to the
earlier repairs and these new repairs were a new contract so when trailer stolen, no paperwork for new
repairs so there is still liability
NOTE: There was a traditional categorical approach for SOC of bailee but not used anymore | if bailee’s
sole benefit then bailee liable for slight negligence | if for bailor’s sole benefit (gratuitous bailment) then
gross negligence is the standard | if mutual benefit then bailee must take the care a prudent owner would
(Punch v Savoy) and is liable for an employee’s negligence or theft
NOTE 2: a bailee company is responsible for acts of employees or agents  bailee would have to show they
took reasonable steps to employ trustworthy and responsible agents/employees  esp if loss due to neglect
or misconduct on part of employee | and EVEN THEN would prob be liable if employee steals it

Hefferman v Elizabeth Irving Service Center [1980 NFLD SC, TD]

F: P parked his truck at side of D’s service station | truck was demolished when taken w/out P’s consent |
was typical practice of P to leave truck there, give keys to employee, and call station 1-2 days later to say
what repairs were required
A: “only too evident” that a bailment relationship existed b/c of the past typical practice

Appleton et al v Ritchie Taxi et al [1942 ON CA]

F: customers would pay for parking and leave vehicles and keys with attendant at front gate | attendant
would move each vehicle to final destination in lot | P left vehicle and keys with attendant but car stolen
from lot
A: D became bailees when attendant, as agent of D, took charge of car at front gate since possession of car
was delivered to D for safe custody | manner in which parking executed (attendant) made possession a
necessary incident to the parking

Parking Lot Puzzles

 Does a parking lot operator become the bailee of your car or merely grant you a license to enter the
land and park your car?
 Factors weighing towards bailment  active supervision and control of car via surrender or keys,
provision of attendant, serially numbered ticket to show to get car back, jockeying of cars (operator
moves them around)  classic valet parking
 Factors weighing towards license  disclaimer that “charges are for use of parking space only”, lack
of any attendant or giving away keys  classic shopping mall parking

Minichiello v Devonshire Hotel [1978 BCCA]

F: P left car and keys with valet, paid 40c for parking and told valet there were valuables in the trunk | there
were $16,000 worth of jewels in the trunk | car was stolen from the lot
A: court held the jewels were bailed | bailment covers contents of car which one would reasonably expect
to be in the bailed chattel | and bailment covers content one might not reasonably expect but of which
the bailee had actual or constructive notice | liable for the jewels b/c didn’t meet onus of taking
reasonable steps, statement of being valuables in the trunk was enough to put them on notice | if had put a
sign up saying are not liable for items in car that would probably be enough to resolve of liability

UBC PARKING – LEASE, LICENSE OR BAILMENT?

 Waiver of liability on sign says do not have liability for damage or loss to vehicle, rent space only
  Ticket terms and conditions say accept no responsibility for loss or damage to vehicle or contents,
don’t take custody of vehicle but only rent space
 Doesn’t really follow the things from above (valet) that looks like a bailment  lease vs license?
o Uses word rent and you have exclusive use fo the parking space while paid  lease
o But if you leave early don’t get to come back, any person could stand in the space even if car in
there, occupier cannot prevent them or parking attendants from occupying  license
o More likely would be license, court would see word ‘rent’ as a colloquialism not intention to
create a lease

Punch v Savoy’s Jewellers [1986 ON CA]

F: P left a $11,000 ring with SJ to do repairs | SJ sent to another Jewellers Harry Walkers to do repairs, by
registered mail with $100 declared values (usual practice) | due to postal strike, HW sent it back with a new
courier, CN Rapidex | SJ agreed to this but terms of shipment not discussed | Punch entirely unaware of this |
HW sent it with $100 declared value, no insurance | CN’s shipping form limited liability to $50 absent extra
insurance | ring disappeared, CN no explanation except maybe driver stole it
A (HW liability): HW is liable to Punch b/c did not act as a reasonable and prudent owner who would have
recognized value of ring and insured it | can have a bailment relationship between initial bailor and
sub-bailee absent a contract: standard is the same of a reasonable and prudent owner
A (Savoy liability): Savoy liable to Punch b/c did not act as a reasonable and prudent owner | agreed to
new form of shipment with no history and no assurance of security w/out consulting Punch |
reasonably prudent owner would have insured the ring in that situation and Savoys did not
A (CN liability): not liable to HW b/c of the limited liability clause | is liable to Punch in a bailment
relationship b/c they were a sub-bailee who was aware of a bailor who was not a party to contract and
thus owes DOC (know aware b/c their liability clause said intended limitation to apply to anyone who is
claiming ownership) || also liable to Savoy: principle is that an owner is bound by conditions if expressly
or impliedly consented to bailee making sub-bailment containing those specific conditions, but not
otherwise (Morris) | since Savoy didn’t consent to no insurance and limited liability not bound
A (waivers of liability): HW is actually not even bound: the liability clause said that only $50 ‘whether such
damage arises through negligence or otherwise’  strict interpretation means this doesn’t cover
intentional theft would have had to have been more explicit || modern rule for whether bailee can
exclude liability for ‘fundamental breach’ comes from Tercon: applies to situation, not unconscionable at
time made, and enforcement not contrary to PP
 SHARED OWNERSHIP (Ch. 9)
CO-OWNERSHIP BASICS (9.1)
TWO MAIN TYPES OF CO-OWNERSHIP
1. Joint tenancy  two or more people own the same interest
o Has two main features
i. The Four Unities  possession, interest, title and time
 Unity of Possession: each JT is entitled concurrently with other tenants to possession and
enjoyment and use of the land subject to tenancy
 Note is also a fundamental characteristic of tenancy in common
 Unity of Interest: each JT has interest that is the same in ‘extent, nature and duration’
 Counterexample would be two co-owners with one legal title the other equitable or if
one has a vested interest and the other has interest subject to a condition
 Tenants in common do not have this b/c each tenant has an identifiable % interest
 Unity of Title: each JT’s interest must have been derived from the same doc or event
 If one co-owner traces title to a will and other to a deed/transfer, cannot be a JT
 Unity of time: each JT’s interest must vest at the same time
 One exception: not required for a joint tenancy created by a will or conveyance
employing a use
 Ex if both JT have vested interest to become JT at time turn 21 those happen at
different times for both ppl that is okay
ii. Right of Survivorship (AKA jus accrescendi)
 The right of surviving joint tenants to take the interest of the pre-deceasing joint tenant:
ownership becomes shared with one less person
 Each JT “holds everything and yet holds nothing”  everything b/c entitled to full use and
enjoyment of the entire article but holds nothing b/c the moment a JT dies the interest is
automatically extinguished
o If a co-ownership has the four unities  it is a JT  it has the right of survivorship (don’t use right
of survivorship as a diagnostic tool)
o JT can be converted into a tenancy in common by a process called severance (see below)
2. Tenancy in common
o Each T in C owns an undivided fractional share of the whole
o Only unity required is unity of possession, but often have unity of title or time coincidentally
(cannot have unity of interest)
o No right of survivorship: the interest forms part of the deceased’s estate and passes in will, doesn’t
go to the surviving co-owner

CREATING CO-OWNERSHIP
 At COMMON LAW there was a presumption of joint tenancy with a right of survivorship as long as
the four unities existed and intention to create tenancy in common not established
 But EQUITY presumed a T in C instead, b/c right of survivorship has a severe impact that might not
have been anticipated or understood or was unfair  T in C presumed esp in 3 circumstances
1. Unequal contributions  if multiple people buy an item in unequal shares
2. Mortgagees  avoids a creditor being considered a JT to ensure estate would get the portion
of equitable title for what amount of debt had been paid off before debtor died
3. Business partners  equitable interest T in C according to share contributed
 STATUTORY PRESUMPTION TODAY  flips the presumption to be T in C for land only: personal
property presumption still from common law/equity rules  from s. 11 of the Property Law Act
 Property Law Act, RSBC 1996, c 377
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.
(3) If the interests of the tenants in common are not stated in the instrument, they are presumed to be
equal.

Re Bancroft Estate [1936 NS SC]

F: Samuel B has four children: Percy, Aubrey, Florence, Minnie | Minnie predeceased Sam but she did have
children first: Paul (who had four kids himself) and Jean | When Sam dies, his will said that money was to be
paid during his widow’s lifetime in “four equal shares”  Percy, Aubrey, Florence and Minnie’s children |
Paul later died, leaving his four kids with widow still alive
I: Does the money go to Paul’s children or to Jean  did Minnie’s kids take money as JT or T in C?
A: money is not land, so the presumption is of joint tenancy unless there is contrary indication in document
as per the common law presumption | what rebuts the presumption is “anything which in the slightest
degree indicates an intention to divide property” | that would be anything which indicates fractioning of
ownership itself or proceeds upon sale, any references to “equal”, “equally”, “share and share alike”, “share”,
“respectively”, enumerated fractions or percentages | here, the words ‘four equal shares’ indicate T in C but
only relate to the three children and Minnie’s children, no language to suggest a division between Paul and
Jean themselves | Minnie’s children held their interest in JT so now Jean gets Paul’s share by right of
survivorship | but now Jean and her uncles and aunt each hold ¼ share in T in C
TWIST: the will says after the widow dies, then it is determined that if one of Minnie’s children dies, the
money is to be divided between Paul’s descendants and Jean’s descendants | shows intended to benefit the
grandkids and points towards Paul and Jean being T in C | however court says the absence of this clause in
the part where widow is alive indicates was no intention to create T in C in widow alive situation
NOTE: Wood thinks it is likely now that the Court would take a purposive approach to the whole will and
say grandchildren were meant to benefit regardless of whether widow alive or dead and do a T in C  if “not
1 in 100” testators appreciate the distinction between JT and T in C, is it likely that Sam intended to treat the
kids differently before and after widow’s death?

SUMMARY OF PRESUMPTIONS
1. JT in land requires clear wording indicating appreciation of distinction between JT and T in C: need to
show courts you turned your mind to the difference and purposely created a JT
o “jointly” or “as joint tenants” alone probably not enough
o “with right of survivorship” or “not as T in C” will do
2. JT in personalty need no special words
o don’t need words at all but to be safe should use “jointly” or “as joint tenants”
3. JT in personalty presumption is negated by even the slightest indication to the contrary
4. Parties may hold JT in law but T in C in equity
o A and B purchase car in unequal shares with both names on title, no language to indicate
division and A dies
 B is surviving JT so has sole ownership of legal title, but holds title in trust in proportion to
the unequal contributions
 B holds 100% legal title as trustee  holds own equitable interest % in trust for self and A’s
equitable interest in trust for A’s heirs  equitable interests held as T in C
SOME EXAMPLES
1. (inter vivos) The boat ‘Thunderbird’ is now owned jointly by myself and Shirley Watt. [signed] R.J.
Watt PS If the boat is sold while under this joint ownership, moneys realized will be divided evenly
o JT presumption b/c is a boat, but is actually T in C b/c the “PS” showed an indication to divide
in the case of sale, notwithstanding the word ‘jointly’

2. (will). The rest and residue of my Estate, both real and personal, I give to my son Charles and my two
daughters Hazel and Dorothy, to be theirs jointly in equal shares. If one or more predecease me, the
residue to the successor or successors
o Presumed T in C for the land and ‘jointly’ is not enough to change that
o For the personalty, reference to ‘in equal shares’ overpowers presumption of JT and makes T
in C as well – notwithstanding the ‘jointly’

3. (will drafted without legal advice). I devise unto Walter and Dolena, jointly, my real estate situated at
Englishtown, Nova Scotia
o Presumption for land is T in C, drafted by a layperson, determined use of ‘jointly’ was on
colloquial sense meaning co-owners not legal sense meaning JT | is a T in C

4. (will drafted by lawyer). After my wife’s death, to convey the larger cottage on my summer property
to my two daughters to their joint and absolute use, the smaller to my two sons to their joint and
absolute use, and if one of the cottages is destroyed before my wife’s death, the remaining property
shall be conveyed in equal shares between the two parties
o Destruction clause wasn’t triggered but one of the daughters died
o ‘jointly’ used in a technical sense b/c drafted by a lawyer and created JT
o Outlier decision

SEVERANCE
 Key reason to sever a JT is to get out of the right of survivorship
 Three ways to sever a JT
1. Unilateral act by any JT that destroys any of the four unities effect severance of that JT’s share
2. Mutual agreement among JTs effects severance of their shares
3. Course of dealings sufficient to show that all JTs mutually treated their interests as constituting a T in
C severs all shares
 Onus of proving severance is always on the party claiming it
Sorensen v Sorensen [1977 AB CA]
F: the Sorensens were a divorced couple who owned land as JTs | in 1971 they agreed to sell part of the land,
lease the house to the ex-wife for her life and place a charge against the husband’s interest to secure child
support payments | in 1974, dying of cancer, the ex-wife executed a trust deed declaring she held her
interest in the land in trust for her developmentally disabled son, had executed a transfer of the land to him
which her solicitor would register upon her death, and had done this to sever the JT | she also executed a
will leaving her property to daughters in trust for son | moved for partition but died b4 motion heard | ex-
husband claimed sole ownership of land as surviving JT, which would deprive the son’s trust of almost all
assets
I: was the joint tenancy severed?
A (Unilateral Act): all S needed to do was make a conveyance to a 3rd party or even to oneself that
would have changed the time and title unities BUT she did not | did she sever it unilaterally by her other
acts? | 1 by declaring in the trust deed that she was severing the JT  NO, was simply a statement of
intent not enough | 2 by commencing an action for partition = court declaration of severed and
portioned land to be sold  NO b/c was incomplete at time of death no declaration yet |
3 by executing land transfers to son and delivering to lawyer to hold until she died  NO b/c didn’t go
through with it, have to register before died to sever b/c after she dies her interest disappears immediately
upon death | 4 by executing a will leaving her property to daughters as trustees for son  NO b/c
when one JT writes a will it has no effect on the JT same as a declaration of intent and will cannot operate to
change status of what you own during life b/c only takes effect upon death (note that if every JT wrote a will
like this could be evidence of severance by course of dealings but not the case here) | 5 by declaring in the
trust deed that she now held the land in trustee for son  YES b/c the declaration makes legally
effective gift of the beneficial interest to her son so eliminates the unity of interest b/c now she only has
legal title and ex has legal and equitable
A (Express Mutual Agreement): there must be an act relied upon that is inconsistent with the right of
survivorship | Did the 1971 settlement sever the JT by agreeing to divide title to matrimonial home
and sell vacant lot  NO b/c S did more stuff afterwards showing didn’t think was severed (don’t know if
this would be enough absent other acts) | by leasing the matrimonial home to wife for her lifetime 
NO b/c the lease for her life doesn’t interfere with survivorship (a lease to a third party for a fixed
term/their lifetime would have sufficed b/c then if one JT dies the other cannot enjoy full property  also
raises a question if it had been a lease to her for a fixed time not her lifetime) | by charging the husband’s
property interest as security for payment of child support  LIKELY NO b/c in most jurisdictions
statutes have been passed to say that a charge does not transfer legal estate to the charge but court doesn’t
have to consider it anyway b/c a charge on interest means the interest goes away when husband or wife
dies and thus doesn’t interfere with the right of survivorship
A (The Result): the declaration of trust severs the JT so that wife and husband hold legal title as T in C, wife
holds her share in trust for son and husband and son hold equitable title as T in C || when wife died, the
daughters took wife share by devise so that H and daughters hold legal title as T in C and daughters hold
share in trust for son | husband and son have equitable title as T in C | lease and charge terminate on wife’s
death
SEVERANCE BY COURSE OF DEALINGS
 JT can be severed by a course of dealing indicating that the interests of all JTs were mutually treated as
T in C
 Negotiations without formal agreement can suffice
o Many of them arise in the context of spousal breakdown with animosity and bittnerness
 Havlik says courts should be more prepared to find severance in course of dealings with
animosity cases b/c less likely they would mend fences and go back to being JTs
Havlik v Whitehouse [2002 AB QB]
F: an uncle and neice owned a cottage as JTs | through lawyers, uncle communicated with to sever JT |
niece’s lawyer replied ‘without prejudice’ that was agreeable to that | communicated back and forth several
times but never signed a transfer | uncle died now widow claiming JT was severed
A: the fact that the letters were without prejudice indicates might have changed mind or wanted to change
mind | while negotiations were underway, had not proceeded to the point where they mutually considered
the JT to be at an end yet | still a JT so niece gets it all
RELATIVE ADVANTAGES OF JT AND T IN C
 JT  intimacy and efficiency
o Enables intimate partners to provide for surviving partner
o Consolidation of title in the last surviving owner reduces fragmentation of ownership,
enhances marketability and facilitates title searching
 T in C  fairness and predictability
o Protects owners from survivorship’s arbitrariness and unpredictability as well as JT’s drastic
and sometimes unanticipated consequences
o Often better reflects parties’ actual intentions and contributions
EXAMPLES
 A & B are JTs. A murders B.
o Survivorship applies to legal title, but murderer holds victim’s share on constructive trust for
victim’s heirs (Schobelt v. Barber Ont HC 1966)
 A & B are JTs of land. A enters valid contract to sell to C, but dies before closing date
 A, B & C are JTs. A transfers her interest to D.
o B and C are JT of 2/3 share, tenants in common with D who has 1/3
o Within the 2/3 share they are joint tenants
o Like the Bancroft case
 A, B & C are JTs. A murders B.
o A and C have joint tenants between them  legally for a 2/3 share
 And 1/3 share held aside for B’s estate  carve that out right away in law not equity 
murder equivalent to unilateral severance by B
o Could say it is the same as B doing a unilateral severance (like in previous question above)
 A & B are JTs. A is adjudged bankrupts
o Bankruptcy means debts erased get fresh start
o Trustee in bankruptcy divides up assets for creditors (not everyone gets all that is owed) 
once this is done then debts erased
o Does the bankruptcy of a JT sever the tenancy?
 YES  legal title transferred to trustee in bankruptcy so no unity in title and time  A’s
portion goes to creditor payments

**FOR UNILATERAL SEVERANCE YOU ALWAYS LOOK BEHIND THE ‘SEVERING’ DOCUMENT TO SEE
WHETHER THE ACT ON THE GROUND ACTUALLY SHOWS INTENTION TO SEVER**
 CONDOMINIUM LAW (9.2)
Condominium: Individual ownership of a single unit in a multi-unit development, shared ownership of
common elements through condominium corporation, and right to participate in governance of
corporation

WHY CONDOMINIUM?
 Purpose is to facilitate multi-unit residential and commercial development by stacking land ownership
interests in a vertical column
 Other methods of vertical stacking land ownership had limitations
o Leasehold (residential apartment rentals)  tenant doesn’t share in value increase of asset and
doesn’t have same security of tenure as a fee simple owner does: limited participation
 Long term leases like 99 years are a wasting asset b/c loses value over time b/c worth $0 at
the end of 99 years b/c tenant has no asset
 However, only actually loses value in the last 30 years: probably why people are
currently okay with buying and selling but eventually will be recognized as wasting
assets
o Housing co-ops (cooperative housing)  allow shared ownership interest so each person shares
the increase in value but many banks will NOT lend against your security in a co-op so can be
difficult to finance (like owning shares in a company)
 So condominium, a statutory creation, emerged in the US in 1961 and in BC (first in Canada) in 1966
through the BC Strata Titles Act  throughout the common law world by 1970

Key Terms in BC
 Strata lot  can be dealt with in same way as a piece of land = lot shown on strata plan
 Strata plan  creates strata lots
 Common property  property not part of individual strata lot that everyone who owns a SL can
access and use  anything that isn't a strata lot
 Ducts and cables, wires, pipes are necessarily common property
 Anything else can be whatever the strata developer chooses  almost always hallways, lobbies,
elevators, exterior walls
 Limited common property  property not part of individual strata lot but space that owner of strata
lot has exclusive access and use (ex balconies, patio, garden, parking space)
 Strata corporation  comes into existence when strata plan deposited in land title office; owners of
strata lots are members; has all power and capacity of natural person; must have a council and must
have bylaws
 Bylaws  provide for "the control, management, maintenance, use and enjoyment of the strata lots,
common property and common assets of the strata corporation and for the administration of the strata
corporation"
 Air space parcel  air is land, it is where the building is built, a volumetric parcel, anyone who owns
fee simple to land can create airspace parcel(s) which can be treated as land; may be divided in
accordance with Strata Property Act
MISBEHAVIOUR
 While there are numerous things you might do against a fee simple owner neighbour who is
misbehaving, you CANNOT force them to sell and vacate land because of it
 Not the case with condo owners

Metropolitan Toronto Condominium Corporation No 747 v Korolekh [2010 ON SC]

F: a resident of a 30-unit townhouse condo persistently threatened, intimidated, watched, beset her large
dog on, verbally abused and physically assaulted other residents | vandalized their property (egging, killing
plants), terrorizing them and destroyed the utility of their shared courtyard | she ignored repeated
demands to stop | condo corporation is suing for order requiring her to sell and vacate her unit
A: s. 117 of the Condominium Act prohibits conduct that is likely to damage property or cause injury to an
individual and s. 134 gives a broad remedial power to enforce compliance with Act, declaration, by-laws, or
the rules | P has the onus of establishing that D has violated Act or condo rules and that an order to
sell and vacate is necessary and appropriate to enforce compliance | violation of rules is pretty clear
here: has literally caused personal injury and damage to property || usually the order given wouldn’t be
a force to sell but in this case the remedial power can go that far due to a number of factors | 1 
community is relatively small | 2  units all share a single common courtyard as backyard and this
courtyard was vibrant community centre before D came now she has destroyed its utility | 3  her
behavior is extremely broad, persistent, vindictive and continuous | 4  she was warned to stop but didn’t
at all | 5  she is in denial b/c hasn’t even changed her ways now that the suit has been launched | 6  any
compliance order would require the court in managing every aspect of her life and doing that long term is
not feasible (they can do it short term while she tries to sell unit) || order to sell and vacate is thus
required in these circumstances (plus an injunction while she sells it)
R: There is no right to continue membership in corporation and community of condominium once intention
to harm community and inconsistency with rules is shown

The Owners Strata Plan LMS 2768 v Jordinson [2012 BCCA, 2013 BCCA]
F: for years the owners of a Surrey condo subjected their neighbours to excessive noise, abusive language
to excessive noise, abusive language, threats, harassment and obscene gestures | they ignored repeating
warnings and 30,000 in condo fines | strata corporation sued for an order forcing sale of the unit
A: 2012, the court ordered the owners to sop the offending behaviour but refused to order eviction and
forced sale b/c owner not (yet) in breach of a court order to stop the offending behaviour; 2013 owners
ignored the court order, court found them in contempt, ordered eviction and sale of condo | “If
the objects of the injunction ... cannot be realized other than by a forced sale, then a court must be
empowered by subsection (c) to take this final step”
NOTE: “A large and liberal interpretation of s. 173(c) should empower the court to provide an effective
remedy. The competing private property interest which supports strict interpretation must, in my
opinion, yield to the rights and duties of the collective as embodied in the bylaws and enforceable
by court order. The old adage “a man’s home is his castle” is subordinated by the exigencies of modern
living in a condominium setting” [Jordison 2013 para 25]
 Does it matter that in most forced sale cases the offending behaviour was at least in part due
to mental disorder?
IMPACTS OF THE RISE OF CONDOMINIUM
 Increases density of private home ownership interests
 Changes the character of cities
 Increases the availability of home ownership…
o For affluent professionals at the expense of affordable rental housing?
o While fueling rising home prices?
 Changes the meaning of private property?
o Does embedding private property within “vertically gated” communities inculcate virtues of
cooperation, trust and honesty while weakening an individualistic, detached, despotic sense of
private property
 Does it interfere w/ personal autonomy by limiting what owners can do (ex rent it freely?)
 Does it limit affordable housing when the condo bylaws have rental minimums?
o Or does it enhance that detached individualism by limiting “community” to a small group of
owners?
 Creating exclusive affluent groups and excluding those without ‘desired characteristics’

GS ALEXANDER, “GOVERNANCE PROPERTY”

 Exclusion theorists or property think concept of proper only considers the relationships between
owners and nonowners --> doesn’t care about internal relationships between multiple owners
o Only care about owner's right to exclude nonowners
 This is misleading view of property
 Two types of property: exclusion property (EP) and governance property (GP)
o EP consists of one owner with all control over asset, has absolute rights over it
o GP is multiple-ownership property, requires devices to regulate internal relationships
of ownership
 Rights could vary from full ownership to limited rights to use
 Fragmentation of various sorts of coinciding rights is the reason why GP is different
and needs rules internally
 Actual property institution or ownership is somewhere between EP and GP
 For GP, the owners may be concurrent, sequential, or something combined
 GP is not the same as the commons --> GP doesn’t include open-access resources which are non-
ownership
 Main theses of the article
o GP is the dominate mode of ownership today --> reverses the agglomerative tendency
 Says that this shows right to exclude no longer at core of private ownership
o Ownership of GP (and not EP) contributes to development of certain virtues that
promote human flourishing (honesty in dealings, trust, community building)

SERVITUDES: COVENANTS, EASEMENTS, PUBLIC ACCESS (Ch. 11)

  A servitude gives an owner the right to enter and use the land for particular purposes
 Not a possessory right but a non-possessory interest that constitutes a burden on a landowner’s
possessory rights
EASEMENTS (11.1)
 An easement is a right annexed to one parcel of land to use another’s land in a particular manner
(positive) or to prevent the owner of the other land from using their land in a particular manner
(negative)
 a privilege without profit annexed to land to utilize the land or a different owner (which does not
involve the removal of any part of the soil or the natural produce of the land) or to prevent the other
owner from utilizing his land in a particular manner for the advantage of the dominant owner
TYPES OF EASEMENTS
 positive (most easements)  give the owner the right to do something on or to his neighbour’s land
 travel over, flood, take water, erect signs, place wires or pipes, excavate tunnels, deposit
effluent, smoke or soot, emit noise, use the kitchen or bathroom
 negative  give owner of land right to stop neighbour from doing something on neighbour’s own
land
 block air or light, remove support
 supposedly, easement that allows you to do a nuisance is negative but Wood disagrees thinks
only makes sense to be in positive category
CHARACTERISTICS OF EASEMENTS (Re Ellenborough Park, 1955 ENG CA)
1. There must be a dominant (benefitted by easement) and servient (burdened by easement) tenement
o In Canada easements CANNOT exist in gross generally  BUT Land Title Act s. 218 allows them
as ‘statutory rights of way’ when deal with granting to the Crown or a municipality
o Also means easements cannot benefit a person other than owner of dominant tenement
2. Easement must accommodate and serve the dominant tenement
o The test is whether the right makes the dominant tenement a better and more convenient
property (see Ellenborough)
o Must happen by enhancing the normal enjoyment of the dominant tenement, benefitting the
property itself and not the owner personally
3. Dominant and servient tenements cannot be owned and occupied by the same person
o HAS BEEN ABOLISHED BY STATUTE IN BC: Property law Act, s. 18
4. Easement must be capable of forming the subject matter of a grant (recognized as property interest)
**FP would likely test on where you think to draw the line on this requirement**
o Cannot be too vague of language
 Ellenborough: ”use of park as pleasure ground” is okay
o Rights cannot be full possession: can’t be joint occupation and cannot substantially deprive land
owner of proprietorship or legal possession
 Ellenborough: grant not inconsistent w/ owner property rights b/c limited class of people
allowed in park and no restriction on owner to also use for recreation & pleasure
 Robinson v Pipito failed on this aspect
o RIGHT CLAIMED MUST BE OF UTILITY AND BENEFIT (not frivolous)
 Acts as a vague catchall for courts to maintain control over what rights can be easements
 Ellenborough said easement not just used for amusement but also taking babies for walks
so it is okay
Re Ellenborough Park [1955 ENG CA]
F: the owner of a park sold nearby lots to builders, agreeing that the purchasers and their successors would
have “the full enjoyment at all times hereafter” of the park as a pleasure ground | is valid easement?
A: question whether the easement actually accommodates and serves the building lots | using a ‘garden’ is
part of the normal enjoyment of a house, natural extension of the home itself | therefore does make the
lots better and more convenient property | Park is a place to relax, get out of the house, walk babies |
enhanced the use of homes as homes and made homes a better and more convenient property | contrast to
perpetual entry to a zoo or sports games  not part of normal use of home but relaxing in garden is || ALSO
said that dominant and servient tenements must be ‘neighbours’  difficult to see where you draw the
line but need some kind of sufficient proximity to fulfill the accommodate requirement

Shelf Holdings Ltd v Husky Oil Operations Ltd [1989 AB CA]

F: pipelines have long been held to be easements | servient tenement owner cannot erect works on the right
of way strip, cannot interfere with right of way but otherwise free to use the land | pipeline easement holder
can erect structures on the strip | if damage to pasture easement holder has to compensate and cannot
interfere with pasture, if pipeline removed have to return land to prior state | Shelf arguing that pipeline
right of way severely restricts usage of that strip and inconsistent w/ right of possession
A: pipeline right of way, even though grants a possessory interest, is still validly an easement b/c you apply
a flexible standard to the test | can still operate the land as a farm w/ little or no interference from the
pipeline | only real restriction is that the servient tenement cannot erect structures or dig in the area but
they don’t do that anyway they graze cattle or grow stuff | servient tenement still has high degree of
possession and control w/ only low level of interference from dominant tenement and thus doesn’t
detract from land owner’s rights | also if had ruled otherwise would have insane effects on pipeline
industry

Robinson v Pipito [2014 SCC]

F: the owner of 2 lots near Mission registered an easement granting the owner of lot 1 free and
uninterrupted access to and use of 80% of lot 2 for farm and recreational uses, plus full rights to all timber,
gravel and fill | easement also obliged owner of #2 not to erect structures of obstruct farm and rec uses in
easement area | owner then sold lot 2 | relations soured and owner of #1 suing to enforce easement while
#2 owner counterclaiming for declaration that easement invalid

Law: Property Law Act (what Pipito is using to counter-claim)

o 35  (1) A person interested in land may apply to the Supreme Court for an order to modify or
cancel any of the following charges or interests against the land…:
(a) an easement; ….
(2) The court may make an order under subsection (1) on being satisfied that the application is
not premature in the circumstances, and that …
(e) the registered instrument is invalid, unenforceable or has expired, and its registration should
be cancelled

A: intuitively think you should allow easement to stand b/c reflected in purchase price but that is NOT
supported by common law or statute  if instrument was invalid ab initio, easement never existed so
theoretically cannot have affected purchase price | language of ‘ easement’ **NEED TO LOOK ONLY AT
LANGUAGE NOT OUTSIDE IT** shows it’s really not an easement | grant of free and uninterrupted use
for farm and rec purposes over 80% of land | all ancillary rights to bring workers on | plus obligation of
servient tenement not to interfere in any way | combination means that Robinsons could plant crops on
80% of land and Pipitos couldn’t even step foot on that area b/c would constitute an interference |
essentially destroyed all property interests of servient tenement and thus not an easement
CREATION OF EASEMENTS
1. Express grant or express reservation from grant  most effective way to create an easement
o Vendor V severs and sells lot to Purchaser P, granting P a right of way over V’s remaining lot to
access P’s lot (this is a grant included with a grant of land)
o Owner of A grants owner of lot B a right of way over A to access B (independent of land grant)
 o Vendor V severs and sells lot to purchase P, reserving for V a right of way over P’s lot to access V’s
remaining lot (reservation included with a grant
o Should identify clearly: dominant and servient tenements, nature scope and duration of easement,
and the parties’ rights and responsibilities wrt the easement (see Shelf for example)
2. Easements can arise from implication **NOT EXAMINABLE**
3. Easements of necessity (Nelson)
o An easement must be necessary for the enjoyment of the dominant tenement:  dominant
tenement absolutely inaccessible or useless w/out the easement
o Owner of dominant tenement must be able to trace back title to the property to a grant where the
owner subdivided a single parcel but failed to include the easement of necessity  both
tenements had common prior owner whose disposal of dominant tenement rendered all use
impossible unless easement is implied
4. Easements arising from the doctrine of prescription  ABOLISHED IN BC
5. Right to an easement through doctrine of promissory estoppel **NOT EXAMINABLE**
6. Easements created by statutes (without agreements by any parties)
o In favor of condo units and common elements, public utilities, land conservation groups
NOTE: a public right in the same nature as an easement is created when a landowner dedicates a land for
use as a ‘public highway’  requires 3 steps as per Nelson

Nelson v 1153696 Alberta Ltd [2011 AB CA]

F: in 1985 Ken Nelson bought some land near Edmonton accessible only by private road over a
neighbouring farm | he sought approval for water ski park, city said could develop as long as got permission
to use the road, he didn’t get permission but developed it anyway | farmer never granted easement to use
the road but he and his customers did so for 20 years | D new owner and stopped from using the road | there
was also a ski resort next to Nelson who had negotiated a lease with the previous farmer for use of road,
when lease expired D refused to renew
A (Public Highway - Paperny + everybody): b/c involves full extinguishment of a property right, court
needs to find clear evidence following 3-part test | 1  actual positive intention to dedicate | 2  intention
carried out by the way being thrown open to the public | 3  use of the way as a highway has demonstrably
been accepted by the public || often intent inferred from circumstances b/c original owner gone but here
can just ask: said DID NOT intend to dedicate public highway | existence of lease with Ski resort also
evidence of collecting rent for usage | extensive public use is not enough  a single act of interruption by
owner weighs more than multiple uses by the public | not dedicated as public highway
A (Easement – McDonald MAJ): Nelson was the author of his own misfortune  didn’t inquire b4
buying land, failed to remedy situation and forged ahead anyway | crucial piece of evidence missing at trial
which was the original Crown grant for the piece over which easement claimed  needed that to see order
of land grants to see if the second part of easement of necessity test is met | even though the evidence is now
found and does show that the piece of land Crown retained was inaccessible and thus needed easement, will
NOT admit the evidence now it is too late | also easement of necessity is confined to use made at time of
easement wouldn’t have been the exact road claimed now (Wood thinks red herring and wouldn’t actually
have extinguished it if they had allowed the evidence)
A (Easement – Paperny DIS): should admit new evidence which shows easement was necessary | also
considers if maybe don’t need easement b/c of the river but it is b/c not practical to access by river when it
freezes for substantial portion of year | access by water cannot operate to negate easement
NOTE: municipality ended up expropriating road and paying D compensation to do so
Hirtle v Ernst [1991 NS SC]
F: a lakefront lot on Big Mushamush Lake, NS, was accessible only by private paths unfit for vehicles over
neighbours land | water access limited to small pleasure craft so no construction materials transport | P
tried and failed to purchase a right of way, bought lot anyway | now wants vehicular access over
neighbouring lots to build and use a cottage
A: lot was completely inaccessible without vehicular right of way | allowed easement of necessity b/c of
the ‘right of development’ that all landowners have as fundamental aspect of ownership | if you have
access that doesn’t allow you to build, equivalent to not having access | PP: land should be able to be used or
else is waste | case law has evolved pas ‘absolute necessity’ to ‘practical necessity  ask is it practically
necessary to have the access in order to make use of the land?

ACCESS TO PUBLIC AND PRIVATE PROPERTY (Guest Lecture, 11.2)

 A right of access to public or private property for expressive purposes can be thought of as a
servitude
SEE OTHER PAGE
COVENANTS (11.3)
 A covenant is a contractual promise to perform (positive) or refrain from performing (negative)
certain acts in relation to land
 Covenantor (promisor)  bears the burden of covenant, must fulfill promise
 Covenantee (promisee)  enjoys the benefit of the covenant

TYPES OF COVENANTS
 Restrictive (negative)  requires the covenantor to REFRAIN from doing something
o Classic test: can you comply by doing absolutely nothing? If yes, is negative covenant and if no,
is positive covenant
o Not allowed to build, not allowed to operation certain business, not alter existing structure
 Positive  compels the covenantor to do something
o Erect or maintain structure, pay costs of security or a facility
 Freehold covenants  given in connection with a grant of a freehold estate in land
 Leasehold covenants  given in connection with a grant of a leasehold estate

CONTEMPORARY RELEVANCE
 used prominently as a private land use planning tool
o restrict competition or share costs of commercial development
o create and maintain economic ghettos
 to control use and appearance of a residential community or a commercial complex
o size, style, materials, colour schemes and buildings
o solar panels, wind turbines, clotheslines, satellite dishes, basement apts, suites, home
businesses, parking
o landscaping, grass height, swimming pools, holiday decorations, window coverings, succahs
on balconies

ENFORCING COVENANTS
 not a problem between original parties b/c they have privity of contract
 not a problem between landlord and tenant b/c as long as covenant touches and concerns the
premises (real covenant), enforceable due to privity of estate
 but enforcement against the covenantor’s successor in title, or by the covenantee’s successor in title,
can be problematic
o at common law, freehold covenants unenforceable in absence of privity of contract
 o HOWEVER, equity can come in and save the day sometimes  restrictive covenants ‘run with
the land’ in equity and remedies granted usually injunctions
Tulk v Moxhay [1848 Chancery Court] **suing in equity**
F: P sold some ground described as Leicester Square garden with a statute to Elms with the covenant that
“Elms, heirs, and assigns should keep and maintain the ground and garden as a garden and pleasure ground,
in open state uncovered by buildings” | P had some houses around the square, tenants used the garden as a
pleasure ground | land passed into the hands of D whose deed didn’t contain the covenant but he was given
notice of it | D wanted to alter character of garden by building, P wants to get injunction
A: at law, the burden of a covenant DOES NOT run with the land b/c of privity of contract, applies to
both negative and positive covenants | at EQUITY, however, the question is not about whether a covenant
runs with the land, but whether a party should be permitted to use land in a manner inconsistent with the
contract entered into by vendor when he had notice upon purchase | the original price was affected by the
covenant so inequitable to allow successor with notice to ignore it  would allow to purchase land at
artificially low price which is unjust enrichment | injunction granted
THE MODERN RULE FOR COVENANTS RUNNING IN EQUITY (colloquial meaning of ‘run with land’)
1. Covenant must be negative/restrictive: can the obliged party comply by doing nothing?
o Don’t be tricked: any dwelling must be at least 2000sf is negative b/c you could not build at all
o Covenant in Tulk included upkeep so not really negative but the main part which was the no
building was negative and that’s what was at issue
 If a contract lends itself to being split into separate covenants then MAYBE could happen
o Does this requirement make sense?  why can’t neighbours covenant to upkeep shared space and
pass this on to future owners?
2. Must have been intended for burden to run with the land and land must be sufficiently described
o Must have been intended to bind successors, not just the covenantor personally
o Usually covered by the language ‘heirs, successors and assigns' or 'intended to run with the land
and bind successors in title'
3. Must benefit another dominant land sufficiently identified in document
o Need a dominant tenement and servient tenement with proximity between them
o Covenants ‘in gross’ (benefits person not land) are unenforceable absent privity of contract
**THIS IS DIFFERENT THAN EASEMENTS DON’T MIX THEM UP**
 classic example is if homeowners association makes purchasers of land sign covenants but
association doesn’t own land: no dominant tenement so later purchaser not bound
 Ex if landowner promises conservation group to ensure protection of wetland on their land
but group doesn’t own benefitted land so next owner not bound (Ducks Unlimited)
o Also means the covenant must be actually capable of benefitting the dominant land  not
enough that it intended to benefit the other land, needs to be capable
 Covenant must TOUCH AND CONCERN the dominant land: effect the mode of occupation of
land or directly affect the value of land
o Does this requirement make sense?  acts as a rationale for enforcing promises against people
who didn’t make promises, provides ongoing certainty to the successors of the covenantor as to
who has the ability to sue them: only the owner of the dominant tenement
4. Equity must otherwise be prepared to enforce the covenant (usually saying someone with notice is
bound but someone without it not
o Successor in title must take it with notice; unenforceable against bona fide purchaser for value
w/out notice
o Not a problem today due to registry systems
o Also need other equity principles like clean hands

FOR FREEHOLD COVENANTS DOESN’T AUTOMATICALLY RUN WITH LAND JUST BECAUSE IT
‘TOUCHES AND CONCERNS’  NEEDS TO BE NEGATIVE AND HAVE THE OTHER 2 REQUIREMENTS AS
WELL
ANTI-COMPETITION RESTRICTIVE COVENANTS
 Is often a question whether these covenants truly touch and concern the dominant land
 Do they just increase the dominant tenement’s value indirectly by excluding competitors? (as in
Norcross v James, Mass SC 1885)
 Canada and Mass now have REJECTED Norcross  consensus is now that the non-compete
covenants are capable of touching and concerning land as long as there is adequate proximity
 Consider the different types of restrictions
1. Ban on all or virtually all business in a residential area  clearly affects both value and mode
of occupation: satisfied touch and concern test
2. Ban on specific kinds of businesses (gambling, strip clubs, sex toys) different from covantee’s
 generally touch and concern met here as well (maybe – unsure but don’t care)
3. Ban on the same kind of business as the covantee’s - this is where proximity matters

Swan Properties Ltd v Irving Oil [2004 NL SC]

F: covenant on a lot in a small town (6000 ppl only) prohibiting use as a restaurant or selling confections |
dominant tenement was restaurant 3.8-5.2km away called Big Stop |
A: proximity requirement is met b/c the land is within the competition radius of the dominant tenement and
thus does mee thte touch and concern requirement b/c the properties compete for business within that
radius | clientele to Big Stop would be depleted if new restaurant opened there b/c small town

880682 Alberta Ltd v Molson Breweries Properties Ltd [2002 AB QB]

F: In 1994 Molson closed and sold Calgary brewery with a covenant attached that prevented use of land in
Calgary for a brewery for the benefit of Molson who was 300km north in Edmonton
A: Edmonton brewery serves all of AB including Calgary so competition would take sales away (Molson
argument) | however competition radius argument here failed | if allowed this to be within competition
radius would allow it for basically everywhere in the world if a company like Microsoft claimed it | must cut
off the competition zone at some point

DRAWING A LINE: WHAT SHOULD THE STANDARD BE?

 Operation within the dominant tenement's geographic competition zone?
o Ziff says this must be shown at a minimum but this is not enough by itself
 Plus appropriation of location-specific commercial advantage enjoyed by the dominant land?
o Due to customer traffic, ease of access, cost of land, locations of competitors, nearby
development plans, supply & distribution costs, etc
o Calgary location in Molson differed from the Big Stop case on this aspect
 Plus non-trivial impact on dominant land's business?
o What if there was another location where they could set up or market saturated with
competitors already -- wouldn’t change anything!
PRIORITIES AND REGISTRATION (Ch. 13)
PRIORITIES AT COMMON LAW AND EQUITY (13.1)
 The question is how to rank competing property claims to the same item, often between innocent
parties (true owner v good faith purchaser)
 Criteria  fairness? Economic efficiency (resources in hands of ppl who value them most)? Ability to
take precautions against loss (insurance)? Ability to absorb loss? Emotional attachment?
 Common law and equity have developed their own rules, now supplemented by statutory systems for
registering and ranking property
The Basic rule is always “first in time is first in
right”  b/c nemo dat quod non habet: one cannot
give what one does not have

These are all exceptions to the basic rule

Note that if equities are unequal you give to the

greater equitable interest: only look to timing if
they are equal

1. Two Legal Interests  RULE is earlier legal interest prevails over later
o This rule was argued by the Chippewas, but because AT is both equitable and legal, this rule was
held not to apply  the equitable aspect of the Chippewas title that rises from the fiduciary duty
of the Crown acted to defeat the interests of the Chippewas
2. Legal interest then equitable interest  RULE is prior interest wins if equities are otherwise equal
o Northern Counties v Whipp  if equities are equal than legal prevails  equities being equal
means the parties have ‘equally clean hands’
 Look to whether owner of legal estate assisted or connived in a fraud, gave the mortgagor the
ability to borrow and mortgagor improperly represented the resulting equitable estate as
having priority, was grossly negligent in relation to later estate, or was otherwise estopped
from asserting priority by virtue of representations or appearances
3. Equitable then legal RULE is prior interest wins unless later is bona fide purchaser for value w/out
notice
o Often occurs when A concludes valid agreement of purchase and sale of land with B, then conveys
land to C at a better price before the deal with B closes (gazumping)  B gets equitable title when
contract occurs but then C gets legal title when purchase closes
o No notice = no actual notice (where party acquiring the interest subjectively knows of the prior
interest) OR imputed notice (where agent of the purchaser has actual notice) OR constructive
notice (reasonable person in position of 2nd party ought to have known of prior interest)
o Equitable doctrine of notice  usual rule for how long back to look is 60 years
o Court in Chippewas says that as long as the prior interest has some equitable characteristics
then the bona fide purchaser rule applies (this is why this applies to AT)
 Also says rule should be relaxed in AT cases if denial of title is substantial or egregious
4. Prior equitable vs later equitable  RULE is prior interest wins as long as equities are equal
o equities are unequal  holder of earlier interest guilty of fraud, negligence, or undue delay
o “As between persons having only equitable interests, if their equities are in all other respects
equal, priority of time gives the better equity” Rice v Rice (Ch. 1853)
Chippewas of Sarnia [2000 ON CA]
F: Anishnabe ppl occupied much of southwestern Ont b4 English settlement | in 1827 they retained only a
large tract near present-day Sarnia | in 1839 Malcolm Cameron tried to purchase 2500 acres of land from
Anishnabe | the land was NEVER properly surrendered to the Crown (as required in RP) but the Crown
decided to grant FS title to Cameron in 1853 anyway | land was subdivided and sold to many owners, all of
whom were unaware of any irregularity in Cameron’s title | Anishnabe sued for a declaration of title in 1995
 wanted declaration that the grant to Cameron in 1853 was void so they entitled to possession
A (legal v legal?): the Chippewas AT is sui generis, a mix of both legal and equitable (b/c of fiduciary
duty aspect) | landowner interests are all legal | Chippewas argue that failure of following RP surrender
requirements render grant to Cameron void so the landowners actually have NO INTERESTS b/c Cameron
never did b/c the Crown never had anything to give him (nemo dat) | court decides the NEMO DAT
PRINCIPLE DOES NOT APPLYO TO CROWN PATENTS b/c a party relied on the gov’t to their detriment is
a defence of officially induced error and no purchaser would think it necessary to go beyond a Crown patent
to determine validity of it
A (equitable v legal?): good faith purchaser rule applies as long as the prior interest has some
equitable characteristics and here it does | protecting innocent parties who rely on appearances through
the bona fide purchaser rule is a fundamental aspect of property law system | purchasers here were bona
fide b/c they relied on the Crown grants no reason to look behind them, dominant cultural tide
wouldn’t have ppl aware of underlying AT at the time of sales  no reason in settler legal and political
system for them to care | rule should be relaxed in AT cases if denial of title is substantial or egregious but
here it was not b/c at the time the leaders of the Anishnabe ‘accepted’ the terms of the transaction w/
Cameron | bona fide purchasers win
A (The Remedy): Chippewas were seeking a legal remedy of a writ of possession | but the court said that
they were invoking equity too (seeking declaratory judgement subject to discretion of the court) which
means the equitable doctrine of laches and acquiescence should apply and it bars a remedy | the
Chippewas waited too long to bring a claim and would be unfair to disturb innocent purchasers after a
150 year delay || court also says even if there was no surrender of lands, the purpose of the proper
surrender (extinguishment) process was followed by the Crown when they granted the letters patent
NOTE: Reynolds says that the court here says that an equitable remedy means the doctrine of laches and
acquiescence applies  but the equitable doctrines are only supposed to apply when the interest involved is
equitable, it has nothing to do with the remedy sought | shouldn’t have been barred from seeking a legal
remedy of writ of possession by an equitable doctrine
NOTE 2: many scholars said that the doctrine of laches should not apply b/c before the 1970s there was
really nothing for Aboriginal people to do about title until it was recognition of Aboriginal title in Calder |
was previously a criminal offence to advance land claims so it was reasonable to wait as they did!!

Northern Counties Fire Insurance Co v Whipp [1884 ENG CA]

F: Crabtree borrowed $$ from his employer company, secured by a legal mortgage over his land | company
took the title deeds and placed in a safe to which C had a key | C borrowed money from Mrs. Whipp, handed
her the deeds, executed an equitable mortgage over his land in her favour | Whipp knew nothing of the
mortgages in favour of the company, and company didn’t know about her
A: company had legal title, Whipp had subsequent equitable title | law prevails b/c the equities are equal
(both parties have clean hands)  here, court said that gross negligence is not enough to be considered
unclear, has to be actual fraud or misrepresentation | company gets it
NOTE: current view is that gross negligence by prior holder can suffice to give the later holder priority
(Tyrell v Mills 1924 BC)

TITLE REGISTRATION (13.2)

THE HISTORY OF TITLE REGISTRATION IN CANADA
 1. Common Law Conveyancing  prior to 18th century
o Traditional priority rules applied such that purchaser bore the risk of defective title
o Purchaser had to satisfy of vendor’s title by tracing chain of title through all prior transactions
 Look at original documents
 Also look at the circumstances on the ground to see if land had signs of occupation contrary
to person trying to sell to you (examination of manifest circumstances)
 Eventually this was limited to only having to trace back 60 years
o Clear preference of security of existing interests over the ease of transfer BUT with one exception
of the prior equitable interest vs later legal bona fide purchaser w/out notice

2. Deeds registration  began in 18th century

o First set of rules to modify the common law
o Title documents stored in a registry office and listed in a register
 Eased title search but provided no guarantee of title  purchaser still had to search the
chain of title and determine validity of interests
o Often modified priority rules, basing priority on date of regi (w/ exceptions for notice & fraud)
 Earliest registered interest had priority over later registered interests AND priority over
unregistered interests
 Notice (actual, imputed, constructive) of an earlier interest means it takes precedent
 Fraud needed to have occurred for earlier interest to take precedent
o Still preferred security of existing interest over ease of transfer  but title insurance emerged to
protect purchaser
o Pretty much a relic of the past in Canada

3. Title registration  spearheaded by Sir Robert Rottens in South Australia in 1858, spread quickly to
BC and beyond
o TITLE IS CREATED BY REGISTRATION  not merely recognized
o Guarantees that the person registered as holder of title is the title holder
o THE CURTAIN
 State draws a curtain between the registry and all prior transaction, such that prior
transactions are irrelevant to title (whether formal, informal, registered or unregistered)
 Principle of registration says that registration itself creates the interest, interest does not even
exist until it is registered
 Upon registration, title is indefeasible  no past dealings can come out of the woodworks to
defeat interest of the registered holder
 ONE EXCEPTION: not against a person deprived of land by fraud in which the
registered owner participated
o THE MIRROR
 The register is a conclusive reflection of all interests  reflects goal of certainty
 Indefeasible title is unaffected by notice of prior unregistered interest
 Again, exception for fraud by registered owner
 ABOLISHED EQUITABLE DOCTRINE OF NOTICE
o THE NET
 A person deprived of title by operation of the Act or administrative error is compensated
VARIANTS OF INDEFEASIBLE TITLE: IMMEDIATE AND DEFERRED
  Immediate indefeasible title means the purpose acquiring the interest holds indefeasible title even if
they acquire the interest in good faith but on the basis of a forged instrument (1 step removed from
fraud gets the interest)
o A person deprived by fraud still gets compensation but loses the house
 Deferred indefeasible title means that indefeasible title is delayed until the person acquiring interest
does so from the registered owner and thus is more than 1 step away from fraud
o Person who is deprived by fraud hopefully gets rectification if they catch it in time

Lawrence v Wright [2007 ON CA]

F: P lives in her home which she had a mortgage on | in Oct 2005 a fraudster posing as P retained a lawyer to
sell P’s home, gave forged agreement of purchase and sale to sell to another imposter, D for $318,000 | D
made application to Maple Trust to get a mortgage for alleged purpose of buying it | was approved, by the
time case got to CA Maple Trust was held to be innocent b/c did their due diligence and had no notice of the
fraud | on Nov 2005 a fraudulent transfer of property in favour of D was registered and Maple advanced
money for the mortgage | P applied to have fraudulent transfer and mortgage set aside
Arguments: Ms. Lawrence’s position is common law nemo dat b/c the fraud  not valid under title registry
say | Maple Trust says immediate indefeasibility b/c they are innocent party purchasing from fraudster |
Ontario says deferred indefeasibility to give slight more protection to Lawrence and requiring one more step
removed from fraudster
A: Act gives possibility of interpretation for deferred or immediate | however, deferred is preferred because
of the following reasons| 1  consistent with the interpretation of relevant sections | 2 deferred
preferable for PP reasons b/c it better protects an innocent homeowner who giving damages too is simply
not the same as a lifelong home | 3  real property not fungible, shouldn’t give money in exchange for home
but having lender take money is okay | 4  homeowner has no way to prevent fraud, Maple Trust could
have done more to avoid it so this interpretation encourages vigilance by placing the burden of fraud on the
party who has the opportunity to avoid it | deferred defeasibility accords with the act, so a party acquiring in
interest in land from the fraudster is vulnerable to claim from the true owner, but a subsequent purchaser
has the best claim | Lawrence wins against Maple Trust
NOTE: Wood was not happy because the reasoning in this case is specific to the situation of homeowner and
mortgagee but the principles will apply to everyone | 2  protecting innocent homeowner could apply to
deferred as well (could easily do two transactions same day) | 3  not all situations are lender vs owner so
real property being fungible argument is arbitrary | 4 even a second owner has an opportunity to prevent
fraud so why should they not have a burden to investigate | pretty arbitrary to make one step removed the
“magic number”  an attempt to have indefeasibility and protect prior owner at same time but that’s not
really what title registration is supposed to do
 Land Title Act, RSBC 1996, c 250
20 (1) Except as against the person making it, an instrument purporting to transfer, charge, deal with or
affect land or an estate or interest in land does not operate to pass an estate or interest, either at law or in
equity, in the land unless the instrument is registered in compliance with this Act. …
 Principle of registration (part of the curtain)
23 (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…
(i) the right of a person deprived of land to show fraud, including forgery, in which the registered owner has
participated in any degree.
 Principle of indefeasibility (part of the curtain) with exception for fraud
 There are other exceptions too but we don’t really need to worry about (qualified estates, restrictive
covenants and easements)
29 (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 …
 This is the mirror principle
 A subsequent purchaser will not be defeated by a prior equitable interest simply b/c have notice
(abolished doctrine of notice)
 Only defeated if participated in fraud --> the common law standard which means you have to have
done something dishonest/morally blameworthy to be defeated
296(2) A person, … (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 … 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.
 The net
 Have 3 years to claim for compensation
 Land Title Act, RSBC 1996, c 250
25.1 (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.
 Fraudster gets nothing
(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. (Enacted 2005)

 BC operates under immediate indefeasibility, at least for fee simple estate transfers
o Open question whether would affect a charge or an easement, whether would protect an
innocent mortgagee like Maple Trust
o Also remember the innocent first owner still gets compensation (market value of home)

 The principle of indefeasible title protects the person registered on title [second innocent person] at
the expense of the person wrongfully deprived of their interest in land  ESPECIALLY IN BC this
reflects a definite policy choice that shows property law affects lives in a real and serious way

BC LAND TITLE ACT OVERALL  not at the end of the right b/c of the fraud exception

Land Title Act, RSBC 1996, c 250  when an easement in gross is allowed in BC

218 (1) A person may and is deemed always to have been able to create, by grant or otherwise in favour of
(a) the Crown or a Crown corporation or agency,
(b) a municipality, a regional district, the South Coast British Columbia Transportation Authority, a local
trust committee under the Islands Trust Act or a local improvement district,
(c) a water users' community, a public utility, a pulp or timber, mining, railway or smelting corporation, or a
pipeline permit holder as defined in section 1 (2) of the Oil and Gas Activities Act, or
(d) any other person designated by the minister on terms and conditions that minister thinks proper, an
easement, without a dominant tenement, to be known as a "statutory right of way" for any purpose
necessary for the operation and maintenance of the grantee's undertaking, including a right to flood.

(2) To the extent necessary to give effect to subsection (1), the rule requiring an easement to have a
dominant and servient tenement is abrogated.