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PROPERTY SUMMARY

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					1) INTRODUCTION TO PROPERTY AS A RELATIONSHIP, AND INTRODUCTION
TO PROPERTY CLAIMS .................................................................................................. 1
   Types of Objects ............................................................................................................. 1
   Real Property: rights in relation to land .......................................................................... 1
   Types of Subject ............................................................................................................. 1
   Victoria Park Racing and Recreation Grounds Co. Ltd. v. Taylor (Australian case
   1973): deals with establishing/protecting property claim ......................................... 1
   International New Service v. Associated Press (US case 1918): new property claims
   ......................................................................................................................................... 2
2) ALTERNATIVE VISIONS AND PROPERTY CLAIMS; THE CONCEPT OF FIRST
POSSESSION ..................................................................................................................... 6
   Moore v. Regents of the Uni. of California (Calif. Sup. Ct. 1990, p.63): using
   property to address new issues (body parts), do we own our body/body parts? .... 6
   Mabo v. Queensland (1992, p.81).................................................................................. 9
   The Concept of First Possession (p.91) – Sources of Interests ................................ 10
   Pierson v. Post: the principles of possession-> physical control and intent to possess
   ....................................................................................................................................... 11
Finders and First Possession (p.100) ................................................................................ 14
   Armory v. Delamirie (p.100): Finders are Keepers except w.r.t. T.O. .................... 15
   Hibbert v. McKiernan: trespassers don‟t get finders rights ....................................... 15
   South Staffordshire Water Co. v. Sharman: chattels attached to building ............... 15
   Bridges v. Hawkesworth: factors that indicate degree of intention to control for
   determining possession ................................................................................................ 15
   Parker v. British Airways Board (CA, 1982) .............................................................. 16
   City of London Corporation v. Appleyard ................................................................... 17
Possession in relation to land, Possession and Aboriginal Title (p.135) .......................... 17
   Asher v. Whitlock (1865, QB p.136) ........................................................................... 18
   Historical Development Of Principles Of Possession And Seisin (p.138) .............. 19
   Aboriginal Title (p.142) .............................................................................................. 19
   Possible underlying justifications to the statutes of limitations that bar actions by
   the T.O. ........................................................................................................................ 20
   Carol Rose, “Possession as the Origin of Property” (p.149) ................................... 21
   Ontario Limitations Act ............................................................................................. 23
   Policy reasons for Adverse possession and criticisms: Ziff ..................................... 23
   Rationale for the adverse possession: ........................................................................... 24
   Piper v. Stevenson (1913, p. 154) ................................................................................ 24
   Possessory Claims Among Co Owners (p.162) ......................................................... 26
   Possessory Claims and Tenancy at will (p.163) ........................................................ 26
   MacLean v. Reid (1978, p.163).................................................................................... 27
   Fairweather v. Marylebone Property Co. Ltd (1963 HL, p. 168) .............................. 28
   Madison Investments v. Ham (1958): intention to exclude T.O from intended use.. 28
   Keefer v. Arillotta (CA 1976, p.170) ........................................................................... 29
   Brian Bucknall “The Two Roads Diverged: Recent Decision On Possessory Title”
   (p.177) ........................................................................................................................... 30
   Beudoin v. Aubin: ........................................................................................................ 30




                                                                                                                                            1
  Brian Bucknall “The Two Roads Diverged: Recent Decision On Possessory Title‟
  ....................................................................................................................................... 31
Doctrine of Tenure and Doctrine of Estates ..................................................................... 33
  The Doctrine of Tenure – where it came from (history of seisin, escheats, etc) .... 33
  Statute of Qui Emptores: abolished subinfeudiation. Upholds substitution ......... 34
  Tenure and Native Title (history and rights of aboriginals) p. 231 ........................ 35
  Royal Proclamation Act : aboriginal rights existed before declaration of British
  sovereignty ................................................................................................................... 36
  St. Catherine Milling and Lumber Company v. The Queen ...................................... 36
  Calder v. British Columbia (1973 SCC, p.242) .......................................................... 36
  Guerin v. the Queen (1984 SCC, p. 243) .................................................................... 36
  R v. Sparrow (1990 SCC, p.243) ................................................................................. 37
  Delgamuukw et al v. British Columbia (1993 BCCA, p.243) (1997 3 SCR 1010
  Lamer J.) ...................................................................................................................... 37
  The Doctrine of Estates .............................................................................................. 38
  Conveyance And Law Of Property Act, RSO 1990: abolishes „heirs‟ requirement,
  ....................................................................................................................................... 40
  Ontario Succession Law Reform Act, RSO 1990, s.26 (applicable to devises) ..... 40
  Ontario Conveyancing of Law of Property Act, RSO 1990. c.34 s.4 (abolishes Fee
  Tail and applied to devises/grants) ............................................................................ 40
  Qualified Estates ......................................................................................................... 40
  Remoteness -> Rule against perpetuities .................................................................. 42
  Factors that may void conditions............................................................................... 42
  The Effect of a Void Condition on each type of qualified estate (p.260) ................ 43
  Re Waters (1978 HC, p. 279) ....................................................................................... 45
  Re McColgan (1969 Ont.HC, p.282) .......................................................................... 46
Bailment, License and Leases (p. 347) ............................................................................. 57
  Heffron v. Imperial Parking Co. (1974 Ont. C.A., p. 350) ........................................ 58
  Bata v. city Parking ...................................................................................................... 59
  Burden of Proof: on the bailee unless bailee dissappeared ..................................... 60
      Those who are suing (bailor) they have to prove ...................................................... 60
      1. Authorized subbailment ........................................................................................ 61
      2. Unauthorized sub-bailment ................................................................................... 61
  Bailment and the employment relationship .................................................................. 61
  Bailment and injury to third parties ......................................................................... 62
  What happens if the chattel is negligently damaged by the third party? .............. 62
Leases and Licenses .......................................................................................................... 63
  Highway Properties Ltd. V. Kelly Douglas and Co. ................................................... 64
  Lightman‟s article: A Community of Interests: Nursing Home article ................. 65
  Re British American Oil Co. and DePass (1959 Ont. CA, p.374) ............................. 66
  Addiscombe Garden Estates v. Crabbe ....................................................................... 66
  Shell-Mex and BP Ltd. V. Manchester Garages Ltd. (1971 CA, p. 381) .................. 67
  Metro-Matic Services Ltd v. Hulmann (1973 Ont. CA, p. 381) ................................ 67
Residential leaseholds ....................................................................................................... 68
  Kay v. Parkway Forest Developments (p. 410) ........................................................... 69
  Peel Non profit housing v. McNamara and Cherry (1990 Ont. Dist. Ct., p. 425) ..... 71



                                                                                                                                          2
  CAN A TENANT TERMINATE A TENANCY? ....................................................... 72
Gifts................................................................................................................................... 74
  Cochrane v. Moore (1890 CA, p. 436) ........................................................................ 74
  Policy Reasons for Maintaining Delivery as a requirement for an oral gift: ........ 75
  Constructive Trust (p.445) ......................................................................................... 76
  Irons v. Smallhorse: there must have been a deed of gift or actual delivery by donor
  ....................................................................................................................................... 76
  Re Cole (1964 CA, p. 447) ........................................................................................... 76
PRIORITIES AND REGISTRATION ............................................................................. 77
Conveyances and Contracts for sale ................................................................................. 78
  Lysaght v. Edwards (1876 Ch.D, p. 483) .................................................................... 79
  Rights of each party between K of sale and closing ..................................................... 80
  Semelhago v. Paramadevan (1996 SCR, p.486) ......................................................... 80
Non-Possessory Interests in Land: Easements, covenants, profit a prendre ..................... 82
  Easement ...................................................................................................................... 82
  Gypsum Carrier Inc v. The Queen (p. 537) ................................................................ 82
  The 4 requirements for Creating an Easement ........................................................ 83
  Akroyd v. Smith (1850 p. 539) ..................................................................................... 83
  Re Ellenborough Park (1956, p. 542) ......................................................................... 84
  Hill v. Tupper (p. 543) ................................................................................................. 84
  Jengle v. Keetch (p. 545) .............................................................................................. 85
  Legal Easements (p. 555) ............................................................................................ 85
  Equitable Easements ................................................................................................... 86
  The Creation and Transfer of Easements ................................................................. 86
  Hill v. Attorney General of Nova Scotia (1997 p. 555) ............................................... 86
  Implied grants: necessity, common intention and Non-Derogation ....................... 86
  Hirtle v. Ernst (1991, p. 556) ....................................................................................... 86
  Wong v. Beaumont (p.) ................................................................................................ 87
  Principle of Wheeldon v. Burrows (p. 560) ................................................................ 87
  Barton v. Raine (p. 560)............................................................................................... 88
  Prescriptive Easements ............................................................................................... 88
  Phipps v. Pears (p.) ...................................................................................................... 89
Covenants .......................................................................................................................... 91
  Austerberry v. Corporation of Oldham (p.580)........................................................... 93
  Policy reasons as to why burdens should not run: ................................................... 93
  4. Principle of Halsall v. Brizell (1957): ..................................................................... 94
  Tito v. Waddell (1977):................................................................................................. 94
  Government Insurance Office v. K.A. Reed Services Pty Ltd (1988, p. 585 *).......... 94
  Tulk v. Moxhay ............................................................................................................ 94
  Policy rationale for enforcing covenants ...................................................................... 95
Concurrent Interests and “Family” Property..................................................................... 96
  McEwen v. Ewers and Ferguson (1946 Ont. HCJ, p.634) ........................................ 96
  Robichaud v. Watson (1983, p.646): ........................................................................... 99
  Morgan v. Davis (1984, p. 646) ................................................................................... 99
  What happens when one joint tenant murders another? use of constructive trust (p.
  647) ............................................................................................................................... 99



                                                                                                                                          3
  Knowlton v. Bartlett (1984, p. 649) ............................................................................. 99
  Policy Argument- should you be allowed to sever JT w/out the others‟ notice or
  consent?....................................................................................................................... 100
  Accounting principles, Statute of Anne, when a co owner has to pay another........... 100
  Cook v. Johnston ( 1970, p. 656) ............................................................................... 101
  Knowlton v. Bartlett (1984, p. 658) ........................................................................... 101
  Murdoch v. Murdoch (1975, p. 668) ......................................................................... 103
  Caratun v. Caratun (1992, p. 672) ............................................................................ 103
Charles Reich Article: The New Property (p. 741)......................................................... 104




                                                                                                                                   4
PROPERTY SUMMARY

1) INTRODUCTION TO PROPERTY AS A RELATIONSHIP, AND INTRODUCTION
TO PROPERTY CLAIMS
Readings:
pp.1-24

Property is the relationship among people in respect of objects. Specifically it comprises of
bundles of mutual rights and obligations between subject, object, and other people

Property triangle: property is the relationship b/w the below triad (subject, object, and others)

                                        Subject (owner)




        Object (stuff)                                               Other People



Types of Objects
Personal Property (moveable prop)      v.   Real Property (immoveable prop i.e. Land)
Intangible Property (e.g. idea)        v.   Tangible Property (e.g. a book)

Real Property: rights in relation to land
Personal Property: everything else

Types of Subject
Individual
Co-ownership

Rights of the Subject of Property:
   1) Dispose of it (destroy, sell, give away)
   2) Exclude others from it
   3) Use it (enjoy it)
The existence of these rights create value in the object: property is legalized wealth


Victoria Park Racing and Recreation Grounds Co. Ltd. v. Taylor (Australian case 1973): deals
with establishing/protecting property claim
Facts: V.P (P) is a racing track which charges admissions to people who place bets on the races.
        Taylor (D) is a neighbour of V.P. and built a platform on his land to view the races/odds
        and broadcasted this info to other people who then called and placed bets (off-track
        betting). Essentially Taylor gets the profit at the expense of V.P. Taylor‟s broadcasts
        were systematic and would go on indefinitely unless stopped. (Note that the building of
        the platform doesn‟t contravene any building bylaws.)



Property                                                                                            1
Issues: Does V.P. have a successful claim against Taylor? The V.P. tries to win using four
        different arguments. But we focus on the 1st two arguments

1) PROPERTY: Is there a property interest in the Spectacle that might enable VP to successfully
claim against Taylor? Should a „Spectacle‟ be Property? In the absence of a clear precedence how
should the courts respond? a) Should the courts fashion a new property right? b) or should the
courts decline a new property right? When is it appropriate for the courts to fashion a new
property right?

2) NUISANCE: Is Taylor being a nuisance to VP? In order to claim nuisance VP has to prove
that there was ‘an unreasonable and significant interference with their use and enjoyment of the
property‟.

3) PRIVACY: VP has the right to be free from prying eyes (didn‟t discuss in class)

4) NON-NATURAL USE OF PROPERTY (Rylands v. Fletcher argument): If Taylor used
property in a non-natural manner and there is an escape of this and there is a damage as a result
then VP would have a successful claim. Note that there are 3 elements to this claim: non-natural
use of land (built platform?) + Escape (conveyance of odds?) + Damage (damage to VP).

Decision
The courts found that VP‟s claim on all four counts were unsuccessful (but strong dissent).
Reasoning
1) PROPERTY: The majority found that there is no property interest in a spectacle. There was
no clear precedence and the majority chose to decline a new property right. Minority: should
look at the principles – there are binding principles but should be flexible.
2) NUISANCE: The majority found that there was no nuisance. Classical examples of nuisance
is noise, smell, vibration, smoke, while VP‟s argued that we should add the „act of looking over
and broadcasting the subject‟s going‟s on” should also be a nuisance. The majority argued that
historically we can‟t expand nuisance to include Taylor‟s actions. Since a „view‟/blocking one‟s
view‟ is not considered a nuisance, the court did not expand nuisance to include Taylor‟s viewing
and broadcasting the view. (Note: In class we contradicted the majority by saying that yes is
could be seen that there was an „unreasonable and significant interference with the use and
enjoyment of the property (racetrack)‟ b/c Taylor‟s activities interfered with the use of the
racetrack, which was to make $ for the subject. Also the interference was significant b/c the
consequences were very high.). What is competition? Note dissent: view is not unrestricted.
4) NON-NATURAL USE OF PROPERTY: the majority found that building the platform was not
unnatural b/c it wasn‟t against nay by-laws.
Ratio:
     A „Spectacle‟ is not property
     The act of looking over and broadcasting the subject‟s going‟s on is not a nuisance b/c it
         is „unreasonable and significant interference with the use and enjoyment of the property
     In the absence of a clear precedence how should the courts respond it is not appropriate
         for the courts to fashion a new property right if the object is of private concern

International New Service v. Associated Press (US case 1918): new property claims
Facts: AP Press (P) sued INS (D) to stop them from copying news in earlier editions of AP
        newspapers on the east coast and selling it to INS customers on the west coast. This was
        at a time when newspapers were very important b/c lack of radio (WWI). To do this AP
        had to establish the concept of property in news.



Property                                                                                       2
Issue: Should „News‟ be Property? In the absence of a clear precedence how should the courts
       respond? a) Should the courts fashion a new property right? b) or should the courts
       decline a new property right? When is it appropriate for the courts to fashion a new
       property right?

Decision/Reasoning: The court found that News could be property, and that AP had property
over the news it published.

Ratio:
     News is property
     In the absence of a clear precedence how should the courts respond it is appropriate for
       the courts to fashion a new property right if the object is of public concern

NOTE: How do you reconcile the difference b/w the court‟s decision in VP and INS?
VP- Spectacle not property (the spectacle viewed, the races, were of private concern (i.e. a few
people bet on the races) v. INS- News is property (the news is of public concern, public interest).
Therefore the cases are different b/c in one the object is of public concern and in the other
the object is of private concern which leads to a different conclusion/precedent.

Propertization
Is it better to create individual property rights or is it better to leave it as common property?
Hardin‟s Thesis: support for privatization
When things are left open to the public they are wasted, either by overuse or under-investment so,
It is good to privatize, as you get better management of resources.
Gives us the Scenario of the “Tragedy of the Commons”. All the villagers use the land to feed
their cows. And as economists propose, people try to maximize their own benefit and thus they
put more and more cows on the common b/c each individual gets a lot of benefit (heavy cow) but
low losses (b/c losses shared by all the villagers) and the common is destroyed. Harden says that
if you divide the common up into little pieces and give to each individual villager (privatization)
each villager will manage the common/ resource better.

Rose‟s Thesis (Contradicts Harden‟s)
She says that if property is legal wealth why not create common property (e.g. highways, parks)
and confer on all property rights. When you have common property rights the capacity to
increase wealth is almost infinite (you invest in infrastructure, you build a better community,
increase economic efficiency). Good to keep common rights in property.
-common property has the power to enhance sociability. Can this be applied to VP where by
making the race course common property it would enhance sociability by being accessible to the
public at large?

Frameshifting: method for explaining different approaches

Frameshifting is an important part of legal reasoning. It highlights that judging is a human
process and as such different perspective/frames are used which result in different findings and
conclusions. Frames that are used include narrow v. broad, logical v. relational and personal
v. institutional.

E.g.‟s of Narrow v. Broad
Narrow: in the VP case the majority saw land as land (and thus Taylor didn‟t infringe on the land
directly)



Property                                                                                         3
Broad: while the dissent saw an infringement on the land when things interfere with the use of the
land. (and thus found Taylor interfering with the property/land)

Narrow: in VP case the majority had a narrow interpretation of “unreasonable interference” in the
nuisance argument. They focused on the actual offending activity (building of the platform) to
see whether it was unreasonable. (found that b/c the actual activity of building the platform
wasn‟t against municipal bylaws it was not unreasonable)
Broad: dissent focused on the consequences of the offending activity to ascertain
unreasonableness. (Found that the consequences of building the platform were unreasonable
since it significantly infringed upon VP‟s use and enjoyment of their property.)

Carol Gilligan discusses Logical and Relation frames and how they can also result in different
outcomes.
Eg‟s of Logical and Relation Frames
Logical: the logical frame is for the most part a device designed to promote unity, certainty by
following old precedents. This frame says that in the interests of certainty, reliance and
uniformity we have to stick with the old law and it is not for us to change the law, only up to the
legislature to change the law. The majority of the VP case used this frame.
Relational: This frames says that we have too understand the impact/relation one side has on the
other and if this impact is negative, even if the law (precedent) goes one way e must find a
solution and change the law or add to it. The dissent of the VP case took this approach.
.-world is comprised of relationships rather than of people standing alone. A world that coheres
through human connection rather than through systems of rules.

Summary of Week 1
Property is about relationship.
Victoria Park – how far can property take us?
The 4 causes of action based on by the plaint. Nuisance and property of spectacle are emphasized
in this class. Nuisance is indirect interference therefore not trespass.
Nuisance:
What is “unreasonable”? Objective test. Def.‟s activity unreasonable or the impact on the plaint.
from the def. reasonable activity is unreasonable? Court typically goes for the 2nd option. But
recently has stressed the def.‟s activity. Court stressed the wealth creation by def.‟s act.
Change of focus: land as land or the use of land.
Why want to propertize spectacle? Exclusion rights from the others.
Common law tends to recognize public property/resources on public interest. (1st two paras. p.
16). For example, beach land. Implied dedication of road to the public.

Legal issues:
1. On what basis court chooses one legal rule/interpretation over the other? Which route is
     more compelling or persuasive? What is the justification of persuasiveness?
2. VP and INS: if believe the facts are similar, how the different results can be explained?
     Change of decision based on change in social preference.
3. Institutional question: court or legislature is better to define the scope of property? And why?
     Dissent in INS said that not duty of court where it is better for legislature to set regulations
     for the scope of property.

Additional:

The right of prospect is the right to a view. Court respects this right but impose the limits on such
right (dissent of VP).


Property                                                                                           4
The view of a property can be the single most valuable right to the property. May be enjoyed for
a long time. But the long-term enjoyment would not give rise to a cause of action to reframe
others to modify the view.
Hypothetical: you use solar panels for energy (i.e. right to light); can this be enforced in case?
Probably yes, because of right to light rather than the view.




Property                                                                                         5
Week 2

2) ALTERNATIVE VISIONS AND PROPERTY CLAIMS; THE CONCEPT OF FIRST
POSSESSION
Readings pp. 63-87, 91-101
Small group questions/problem p87 -- Q1, p.88 – Q3

Joan Gilmour: “ „Our‟ Bodies: Property Rights in Human Tissue”.
Discusses the Moore case below:

Moore v. Regents of the Uni. of California (Calif. Sup. Ct. 1990, p.63): using property to
address new issues (body parts), do we own our body/body parts?

Facts:
Moore‟s cells were taken by Dr‟s who were doing research on cancer. UCLA made a cell line out
of Moore‟s cells to help with cancer. Moore wants to launch an action under the tort of
conversion, an action dependant upon finding that Moore had some property interest in his bodily
tissues.

Issues:
Does Moore have a property interest in his cells? Does UCLA have property interest in the cell
line?

Decision/Reasoning:
 Moore had no property interest in the cell, but UCLA had a property interest in the cell line
 dismissed the possibility of the human source owning the cells both ∵of lack of the requisite
  degree of control & ∵the cells were not unique
 However the SCC said that the researchers had a property interest in the cell line thru. their
  labors which created the cell line (labour-added theory- Locke theory)

Ratio:
Court espouses the labor-added theory of property: i.e. someone has a property interest in
the thing which she adds labor into. (but note that we now use a possessory argument though)

Problems (offensiveness):
1. Lack of consent from Moore
2. Unjust enrichment on UCLA
3. Collapse of subject/object – destroy relationship describing property
4. Human dignity – medical experts use people‟s body parts to make profit out of it
5. Special relationship between doctor and patients (fiduciary relationship) – conflict of
     interest: cure, research, and commercialization.

Solutions:
1. Analogue to creating idea? Therefore, property is not the way forward
2. If property is the solution, a bunch of right comes with the solution; including exclusion of
     doctor use. Remedy of conversion (direct interference with property that is not yours) –
     civil theft, converted the use, strict liability; therefore no defence.
3. Legislation is controlling the use and sale of body parts
4. Patent law – regulate patent and copyright law that fully informed consent from Moore.
     This can be part of a contract between the doctor/patient.



Property                                                                                      6
Advantages of Each Solution:
1. Property:
        Exclude others – include consent
        Simple regime, well established/understood by the public; series of existing rule
         to be enforced by court
        Good and easy remedy in conversion
        Freedom to choose the uses
        Distribution/creation of wealth to those with property rights

Disadvantages:
1.   Property:
         Alienable – created a market for body parts – possible to be exploited
         May significantly detrack from the protection of human dignity
         Boundary drawing – is genetic information kind of body parts?
         Wealth concentration – could hold the society at ransom by an individual (but could
          be ransomed by the doctor and enterprise anyway)
         Conflict of interest in doctor/patient relationship
         Property carried certain constraints in forming regulations because property comes
          with certain expectations. i.e., a blunt instrument.

Half-way House option:
1. Sui genecis – special relation/kind of property
2. Legislation contest – protect Moore for human dignity and also protect the social benefits
     and the pharmaceutical companies. Therefore, has more flexibility more sophisticated than
     property law.
3. Could this be a tort case?

Joan Gilmore discusses (p.63):
Reason for the Propertization of human cells
 Respect for individual rights/human dignity
 Stop unfair/unjust enrichment of the researcher that might be enjoyed by the researcher at the
   expense of the individual cell provider.
 To stop the lack of control over the end use of the cells.
 Privacy- informed consent

Reason not for the Propertization of human cells
 If you have property rights in a cell then you can use, exclude and dispose of it how you
  choose -- it could lead to a Slippery slope -- you would be able to sell your parts for money.
  Which would most probably lead to the poor selling there parts to the rich (vast inequality
  ∵the poor would be more likely to sell their parts for money than the rich).
 If people are going to go & sell their body parts which really does nothing for human dignity

Gilmore says that „Property‟ may not be the best way to argue issues in relation to bodily
integrity. The majority inappropriately mixed patent requirements with ownership requirements
in considering whether Moore could have a property interest in his cells. The element of cell‟s
uniqueness is only relevant to the award of patent, not to a property interest (p.65).

Advantages and Disadvantages of the Judicial v. Legislative Process.
COURTS: Advantages of the judicial process
 Independent/impartial


Property                                                                                      7
 Plaint. has the control to go ahead and they have some control of the process
 Courts tend to move faster than the parliament ∵courts have procedural safeguards to speed
 Courts heightens the sense of the particular -- focus‟s on the facts of the particular dispute

LEGISLATURE: advantages of the legislative process
 Looks broadly at the issue – they worry about the implications of the decision made
 Legislature looks prospectively at the issue (looks forward and doesn‟t have to look back, like
  the courts)
 More accessibility
 More flexibility to make adjustments to the law, no precedent.

Alternative Visions of Property (p.77)
2 Different Conceptions of Property

1) Western Conception of Property (system which we have been discussing)
    A system where the 1st owner of land is the Crown. The Crown always has absolute
     ownership over land and just transfers an interest in the thing (not that actual thing itself)
     to others, so that others have an interests or rights, which are equated with ownership -- (i.e
     use, dispose, exclude), in the property. Leasehold
    The crown transfers and interest in the property but still has absolute control over the land
     and as such ahs the power to impose obligations (eg. Building, permits…etc). The Crown
     also has the capacity to expropriate (i.e. take it away).

2) Aboriginal Conception of Property (Lee Roy Case)
    Aboriginal conception of property is very different than western conception of property
     and pre-dates the British Crown. In common law, the rights from the Crown.
    The land is owned by the creator and people have community rights in the land and no
     individual rights in the land. Rights derived from the creator. The community rights in
     the land are the right to use, but it doesn‟t consist of the right to exclude others/alienate or
     dispose of.

Nature of aboriginal interest
 Animate/inanimate objects both have rights to the land
 used to be described as a personal and usufructory right (mere right to use for a limited
   purpose over a limited time i.e. communal right), but its more than that. Court has no
   protection to such rights.
 its sui generis
 Aboriginal interest is inalienable. It cannot be sold, transferred or surrendered to any other
   party.
 rights enjoyed by different (past and future) generations
 differs because of its source from Creator and from Crown. It preceded British law
 different conception of use: Western – manipulate the land; Aboriginal – would not destroy
   the integrity of the land
 meaning of ownership: Western – right to exploit; Aboriginal – “owe”, custodian of the land,
   respect the land and other parties to the land.
 Fiduciary relationship with Crown recognition


Sources of Aboriginal Interests (fr. Mabo)
1. Possession required; and
2. Sense of community that is organized/aboriginal customs or governance



Property                                                                                           8
Aboriginal interests accompanied by the Crown recognition and self-government; including the
activities carried out on the land. Setting up of reserve for the aboriginals.

What did the Indians surrender when they signed treaties with European nations?
-they were under the impression that they were sharing the land with newcomers and not handing
over their rights. But:
    1. sharing doesn‟t mean Europeans got the same rights as natives ∵ Europeans weren‟t
        descendants of the original grantees.
    2. Indians couldn‟t give unconditional fee simple to Europeans ∵ they themselves do not
        have fee simple ownership
    3. couldn‟t have given an interest even equal to what they were originally granted

Johnson v. McIntosh (Case that created all the problem but it has now been discredited)
Ratio: Aboriginal rights don‟t give rise to rights ∵ they are based on community interests (not
individual rights) and as such it is an interest that can‟t be transferred to others.

Mabo v. Queensland (1992, p.81)

Followed by later Canadian case and subsequent common law cases; therefore, aboriginal
rights recognition. The court described aboriginal title as a burden to the rational crown
leasehold title.

Solutions to conflicts between titles
1. Negotiation for a resolution; failing that;
2. Legislature to set rules to extinguish the title

Facts:
The Meriam people claimed propriety interest to the land on the Murray islands in the Torres
straits. Court found that they had a property interest in the lands.

Ratio (top of p.82):
-can't really reconcile aboriginal interest with western view. But the two can co-exist.
- Aboriginal rights cannot be ignored.
-Crown has the ultimate title to the land, but there is a burden on the crown which is this
  aboriginal interest in the land.
  So before the crown does anything with the land (i.e. decide to give interest in it to other
  people) they must address this burden either by 1) forming an agreement/contract with
  aboriginal peoples which extinguish aboriginal title to the land or by 2) making legislation that
  extinguishes aboriginal title to land -- but either way they have to address aboriginal title to the
  land. (not a good idea though!)
-problems in proof -- doesn‟t change the fact that aboriginals have a proprietary interest.

Classification of Property Interest (p. 85-87)

Real Property v. Personal Property (this distinction is derived from the 2 different remedies
available in medieval legal procedures of the return of property)

1. Real Property:
When the P is entitled, by way of remedy, to the return of the object itself or (in latin) in “res”. In
this case, the P‟s action was called an action “in rem” or in “real action” and the property that



Property                                                                                             9
could be recovered in such an action was called real property. Land, which was regarded as
unique was recoverable by a P launching an action “in rem” so it became real property.

2. Personal Property:
Definition:
The fact that the object itself could not be recovered by an action but con only be recovered by an
action against the person interfering the object: action in “personam”. That is, an action against
the D personally.

In contrast to land (which is unique), other forms of property were not recoverable. Rather, the P
was entitled to the value of the property, as damages. Property for which the P could recover
damages alone became known as “personal property”.

               Personal (Chattels)                                        Real

      Chattel Real – leasehold interest e.g. Corporeal – possessory interest
       tenancy                                     Incorporeal -- Easement/reciprocal right of
      Personal – everything else                  ways; no one is allowed to possess.
           Tangible – choses in possession
           Intangible – choses in action (patent)

Mobile home problem – when does it becomes real property

The Concept of First Possession (p.91) – Sources of Interests
Possession falls into different categories: actual possession, constructive possession, the right to
possess, and pedal possession (i.e. the land you possess under your feet).

• Actual possession - possession that your enjoy, i.e: when in your home; holding your book
• Constructive possession - Where the titleholder of the property doesn‟t possess it, b/c a 2nd
  party is in actual possession of the property; here, the tile holder (owner) is in constructive
  possession of the property. (e.g. Osgoode has actual possession of the land they are on even
  though they don‟t own it & York has constructive possession of this land, as they are the tile
  holders) (i.e. it‟s a control or dominion over a ppty w/o actual possession or custody of it)
• Right to possession – relates to future interests
• Pedal possession - You possess the item b/c you are standing on it (used to describe actual
  possession of land).

Concept: Property Rights/Possessory Rights are Relative
people have property rights in relation to each other - this concept allows people to obtain
property that they didn‟t actually purchase ∵ mere possession can create property rights. First in
time to possess is first in rights.

Doctrine of Adverse Possession: Allows people to obtain property w/o purchasing it
The Limitation Act says that T.O. must bring the action within 10 years of B‟s possession and if
T.O. doesn‟t bring an action B‟s interest becomes a superior possessory interest. 10 years starts
when the possessors properly stepped into the property.

SUMMARY:
Therefore the person in first possession of it has superior possessory interest over other people,
except the T.O., unless the T.O. doesn‟t bring an action within 10 years which would result in the
person having superior possessory interests.


Property                                                                                            10
Carol Rose “Possession as the Origins Of Property” (p.92)
Rose gives us different ways to theorize how things become to be owned

1.   Locke‟s Theory of Added Labor: When you add labor to something you acquire property
     rights to it. But there is a criticism to this b/c this isn‟t always the case b/c someone can
     add a glass of tomato juice to the sea and it doesn‟t mean that you own the sea. So
     what is the scope of property? Therefore, the assumption of labour is not appropriate; or;

2.   Contract Argument: The original owner got title through the consent from the rest of
     humanity.

3.   Possessoary argument: This is our common law approach. If you possess the thing you
     acquire property rights to it.


     Pierson v. Post: the principles of possession-> physical control and intent to possess

     How would one acquire a right to property which belongs to no body? Effort/labour
     modify or against the idea of possession? Does labour constitute to property right?
     Facts:
     Fox hunt. Wild fox, not owned by anyone, on the verge of being shot by A. There is no
     escape for the fox and the hounds are about to attack. Then a B shoots and kills the fox.

     Issues:
     Which party has the better claim of ownership/property over the fox? If common law
     awards property to the first possessor then who is the 1st possessor in this case?

     Decision/Reasoning:
     courts award the 1st possession to B, the one who mortally wounded or killed the fox b/c
     B had 1) Certain control, not speculative control and 2) Intent to possess the property.

     Ratio:
      Closeness of the control does not count, physical control required
      Common law awards property to the 1st possessor.
      Possession is defined as:
         a) Having certain control (i.e. not speculative control that the thing was to
            be controlled, but that it was actually under the clear control) – there
            must have control or domination; and
         b) Having the intent to control it/to have possession of it/express intent to
            control (mental element).

     Note      Rose‟s criticism of this decision:
      This outcome doesn‟t reward those who put labour in or do productive activities. It
         doesn‟t give a reward for useful labour (i.e. hunting the fox and chasing it for an
         hour wasn‟t rewarded)
      However, court said that in general common law of first possession does reward
         useful labour. The useful labor is the very act of expressing intention and
         controlling the property
      The above criteria made the aboriginals difficult to claim “possession” – use,
         communal, and temporary; therefore, no domination of property


Property                                                                                         11
Richard Epstein “Possession as a Root of Title”: problems with using common law to
develop first possession concept (p.98)
Adjudication the best way to assign the property? Focuses on the deficiencies of the judicial
process in finding the answers about the treatment of property rights:
 Common law judges have only limited remedies to apply to redress a violation of a
    substantive right. A court with modest remedial powers is not apt to choose property
    doctrines whose enforcement requires elaborate administrative machinery. Thus, they
    will pick the simple way out based on broad general proposition, not one that is based on
    numbers or formulas (eg. you must leave 10cm or 10% of your land vacant on either side of
    your lot - is not likely to happen in the courts).

    A process with 2 kinds of remedy (injunction and damages): court decision only yes or
    no, right/wrong and how much -- simplistic

   The courts can‟t order the docket of cases that come before it (p.99). The succession of
    cases forces the common law to commit themselves to a succession of little points (precedent
    can bind their hands on theoretical issues). This denies them the freedom to switch ground
    when the large issues are formally presented for adjudication

   Courts do no control who would be in the dispute. The jurisprudence process does not
    include all parties relevant to the issues.


Small Group 15 Jan. 2004

Distinction between chattels and real property: personal property (chattel) does not pass with the
real property unless specified, fixtures are passed on by default unless specified.

p.87 Q.1

Traditional analysis first, note the ambiguity and problem, then mention the frameshifting
approach.

Strategy:
Introduction:
1. Begin with the question being asked: e.g. “John has the following remedies… in order to
     claim he must have a successful action against Bloggs and/or the film crew.”
2. Bring in Victoria Park: where the four possible causes of action; bring in by mentioning
     similarity
3. Prediction of the results

Discussion
1. Summary of the possible causes of action – mention relevant facts in each cause
2. Dismissive sentence on Ryland vs Fletcher
3. Start with nuisance then discuss privacy is weak. Define nuisance and say how ambiguous
     it is. Decision depends on how to interpret the definition. The core of facts gives an
     inclusive answer but based on VP is properly a weak
4. Privacy: not filming Adams himself, how far is the filming, dissent in VP: overlooking is
     not unlimited



Property                                                                                       12
5.   Property: wildlife is not Adams‟ property? Pierson v Post. Fenced area? VP is an old case.
     Today we recognize spectacle is a property. INS. No facts or evidence of causal
     connection between the filming and the loss profit.

Legally permissible:
Victoria Park;

Legally not permissible
Privacy: filming and photographing vs. radio
Nature of activity: horse racing (unique) vs. wildlife documentary (repetitive)

Remedies: injunction to film and circulation


p. 88 Q.3




Property                                                                                    13
Week 3

p. 102 – 117, 135 – 153

Small group:
Q. 1 Parker an appropriate theme of the court? Why not legislature takes the role?
Q. 2 Attached on/in distinction? Private and pubic distinction? Draft a notice in the lounge.
Q. 3. Negotiation the settlement in the Parker case.

Recap of Last Week: possession: 1. physical element (control/domination); 2. mental (intent).
These often overlap.

Examine the above principle in chattels and land this week.

                              Finders and First Possession (p.100)

Case study example – possession of personal property (p.100):
Facts: lawyer purchased house. Contractor, whom she hired to do renovations, tore down old
       plaster and money started to rain down. Money handed over the police. T.O. did not
       claim. Who is entitled to the money? Lawyer? Contractor? Daughter of the former
       house owner? It is essential that the T.O. did not claim because their rights always
       prevail the others unless the rights have extinguished.

Claims made by:
1)   lawyer who owns house
     if property is embedded in the house, then you could argue that possession of the money
     belongs to the owner of the house. She would thus have prior claim to the money in
     comparison to the finders. Ownership constitutes to constructive possession. In terms
     of possession, could imply the intention to own everything that is in the house regardless of
     whether you are aware of the existence of the property. Need to argue that the money is in
     the wall and is therefore a fixture. Had control by handing over to the police. (South
     Staffordshire)

2)    contractor whose workers found the money – finder/keeper w.r.t. T.O.; found the money
      while working for the employer. Owner not aware of it (Parker and Bridges). Employer
      vs. the employee claims depends on the arrangement or contract between them.

3)    former owner of the house
      o argue that the money is the chattel not fixture; therefore, there is no intent to transfer
          the valuable chattels to the present owner. Just left behind by the previous owner.
      o she had ownership of the house and therefore first possession. But these rights were
          transferred when the house was sold if considered as fixture.
      o all the chattels attached should be considered a „fixture‟ of the house and therefore
          rights to all „fixtures‟ were transferred when the house was sold.
      o whether title to money was passed in the sale of house will depend on whether the
          money was considered a fixture or chattel. If it is a chattel, then the title to it would
          not be transferred unless it was specified in the contract.

What question should be asked to determine who‟s got the strongest claim? Who has first
possession? Did someone have possession immediately prior to the thing being found?



Property                                                                                        14
Principles:
1. First possession: finders had the 1st possession. Who has the right/possession of the money
     immediately prior to the finder? (Back to the above); and
2. Bailment argument.


Armory v. Delamirie (p.100): Finders are Keepers except w.r.t. T.O.
Facts: Chimney boy found jewel and takes it to jeweler to be examined. Jeweler refused to pay
       price acceptable to boy and also refused to return the jewel to the boy. Says he has just as
       much right to it.

Ratio: finder does not have absolute ownership but his claim over the jewel is stronger than
       anyone else's except for the true owner. Some qualifications to this rule, such as if the
       finder was a trespasser on the land (this is a matter of public policy. Wrongdoers
       shouldn‟t benefit from their wrongdoing). Finders are keepers except if the true owner
       shows up.

Where is the owner of the house and the employer of the chimney?
Epstein‟s article: court has no control of the parties presented in trial – Armory would be better
is the owner of the house was also represented. Problem with common law and the capability
control who comes forward.

    Hibbert v. McKiernan: trespassers don‟t get finders rights
    Facts:     theft of golf balls on the private land of a club.
    Issue:     could the property in the golf balls be laid in someone other than the alleged
               thief?
    Ratio: Property to golf balls given to the occupier of the land b/c the finders were
           trespassers.

    South Staffordshire Water Co. v. Sharman: chattels attached to building
    Facts:    D was employed by the occupier of land to remove mud from the bottom of a
              pond. Found two gold rings embedded in the mud.
    Decision: occupier entitled to rings
    Ratio:    if chattels are attached to realty (land or buildings), finder may have some
              rights, but occupier of land or building will have a better title.

    Bridges v. Hawkesworth: factors that indicate degree of intention to control for
    determining possession
    Facts:    P was in D's shop and when leaving found package on the floor that contained
              £65. P asked D to keep money until T.O. claimed it. T.O. never claimed it. P
              asked for it back and D refused.
    Issue:    Who had a stronger claim? Who had the sufficient degree of physical control
              and intent to control the money?
    Held:     Goes to finder because shop owner could not establish first possession.
    Ratio:    finder of a lost article is entitled to keep it even though it was found on the
              land occupied by D. The unknown presence of chattel on property that is
              not attached to the land or building in any way doesn't give D right to it.
              One can't assume intention to control. In addition, the notes were on the floor
              of shop in front of counter, an area open to the public. As the ability to
              control access to the area increases (the more private the area), the
              assumed intent to control the thing also increases.


Property                                                                                        15
Parker v. British Airways Board (CA, 1982)
rights and obligations of finders vs occupiers, the necessary degree of intent to control
Facts: P found valuable bracelet on the public floor of the executive lounge of BA while
        waiting for flight. He handed bracelet over to anonymous employee of BA and asked that
        the bracelet be returned to him if the T.O. was never found and gave his name and
        address. T.O. never found and BA sold and kept proceeds which amounted to £850. P
        succeeded in suing D for the amount of bracelet and was awarded damages and interest.
        D appeals.

Relevant facts:
          Parker is a passenger and not a trespasser
          Not attached to the ground
          BA no manifest control (e.g. a sign or staff procedure) over the bracelet
          Parker did not relinquish the right to possess
          BA has strict control over the lounge
          BA had no knowledge of the existence of the bracelet
          Public accessible area – not behind the counter or a private area (Bridges)

Issue: Who has the strongest claim to bracelet?

Decision:       for Parker. Appeal dismissed.

Ratio: establishment of 1st possession principle: physical and mental elements to discern the
       relevant facts. Parker is therefore the true finder.

The relationship between the property and the land: attached in/on/public or private (Bridges).
What is the bailment argument that the court used to award claim to the finder?

Bailment: ownership and possession is divided e.g. owner of a computer lend it to a friend to use
it. Bailee has obligations to the bailor imposed by laws. The courts in Bridges and Parker asked:
could the store owner or BA be a bailee who has responsibility to the T.O.? No, because they had
no knowledge (not a fatal reason). The fatal reason is that BA do not have any responsibility to
the T.O. Therefore, they do not have any possessory interests before the finders. Note the
doctrine of involuntary bailee. (Search bailment in other summaries).

General Rights and obligations of finders (p.110)
   1. finder of chattel acquires no right over it unless it has been a) abandoned or b) lost.
   2. finder will have very limited rights if it was found with dishonest intent or while
      trespassing
   3. finder does not acquire absolute property or ownership in chattel, but acquires right to
      keep it against all but T.O. or anyone who can prove that they had a prior possession at
      the time the finder took it.
   4. any employee, servant or agent who finds something in the course of employment does
      so on behalf of employer who acquires finder‟s rights.
   5. finder has to take reasonable measure to find T.O. But failure to do so not necessary
      disqualify the finders‟ right to claim.

General Rights and obligations of occupier




Property                                                                                      16
    1. occupier of land has rights superior to those of the finder of chattels if they are attached
       or embedded in the land, regardless of whether the occupier is aware of the chattel‟s
       existence.
    2. an occupier of building has rights superior to those of finder over chattels upon or in, but
       not attached to building only if before the chattel is found, he has manifest intention to
       exercise control over the building and the things which may be upon or in it.
    3. have to take reasonable measures to find T.O.
    4. occupier of chattels such as cars, ships, etc. are bound by these rules too

Application to case at hand: issue was there intention to exercise control over the lounge
and all things that might be in it?
Status of Finder:
o not a trespasser, not an employee
o bracelet wasn‟t attached to anything. Found in a public area
o Bank vault analogy: owner of the bank had prior possession to money found on floor.
   Controlled access to this area of bank implied increased intent.
o level of control to waiting area: it was not totally public, in that it was a first class waiting area
   so access was restricted. Parker invited in there for very specific purposes.

Ratio: in order for the occupier to claim prior possession, have to determine whether they had
       expressed sufficient intention to control the lost article. Factors relating to control
       include access to area where thing was found, whether the chattel is attached to
       land, look at all factors that indicate degree of control. There wasn‟t sufficient
       intention to possess on the part of BA needed to positively assert possession.

A controlled area/lounge – begin the argument of control of everything within the lounge. Parker
invited to go behind the counter of a store?
Policy: if awarded to BA, discourage the finer to voice out. Finders would just pocket it.
Therefore, not fair to the T.O. – increase the frequency of lost items to T.O. and awarding honesty.

Frameshifting: preference for honest individual and preference against the dishonest institution.

      City of London Corporation v. Appleyard
      employees have no finders rights; express intent to control objects on property
      Facts: workmen demolished a building found $ in a safe which was recessed in
               one of the walls. The lease from the corporation to the building owners
               preserved the corporation's right to any article of value found in the
               buildings.
      Decision: for the corporation
      Ratio: Servant or agent who finds in the course of his employment or agency is
               obliged to account to his employer or principal. Contractor similarly bound
               to account to the corporation. When the occupier clearly states intention to
               control over things which may be upon or in it, then if something else is
               found, whether by an employee or by a stranger, the presumption is that the
               occupier has possession of that thing. (i.e. If you tell everyone that if
               anything is found it belongs to the occupier – then that is so)


            Possession in relation to land, Possession and Aboriginal Title (p.135)




Property                                                                                             17
T.O. ownership could be statutory barred by the Limitation Act. So no action can be brought.
Also, the title to the land is extinguished.

Perry v. Clissold (1907 PC, p. 136)
person in possession of land behaving like T.O. has title against everyone but T.O.
Facts: claim for compensation related to land resumed by the state government for a public
        school site in 1891. At that time the land was in possession of Frederick Clissold who
        had fenced the land and had exclusive possession of it until his death. Clisold had leased
        the land to various tenants and had regularly paid rates and taxes.
        -government argued that Clissold was a mere trespasser.

Ratio: basically says that a person who behaves, performs all the duties of an owner, excercising
       the ordinary rights of ownership has a perfectly good title against all the world but the
       rightful owner. Case of constructive possession. Mere possession gives rise to
       interest.

Asher v. Whitlock (1865, QB p.136)
possession is good title against everyone but T.O. or someone claiming prior possession.
Facts: Williamson (third party occupier) enclosed part of the other‟s land, takes possession of
        the T.O.‟s land in 1842 and furthers the possession in 1850 (possessory interest).
        Williamson the possessor dies and leaves a life estate to his wife (Lucy) and then the
        remainder to his daughter (M.A.) in 1860. Lucy re-married and the possessory interest
        passed on to the daughter. The daughter dies (intestate), then the wife dies, and the
        wife‟s new husband who occupied the land after his marriage in 1861 wants to claim the
        land and so does M.A.‟s heir at law (Asher). The heir launches a claim against the new
        husband in 1865.

Issue: who has possession of the land? The heir of the new husband?
       If the heir is found to be the first possessor, was the new husband in adverse possession
       long enough to claim 1st possession? Def. argued that he had possession all the time.

Decision/Reasoning:
       The court finds that M.A.‟s heirs in essence are the original/1st possessors of the land.
       The divisible/unbroken interest was passed from father -M.A.- M.A.‟s heirs. As for the
       question was the new husband in adverse possession long enough to claim 1st possession?
       The answer is no b/c the new husband only had adverse possession for three years. Thus
       M.A.‟s heir is the 1st possessor of the land. Note that the possessory interest that
       Williamson had was passed to his wife even before the expiration of the limitations
       period

        Possessory interest is relevant and relative. 1st possession only against other 3rd
        party.
Ratio:
    After expiration of the limitation period, the adverse possessor of the land becomes the
       original/1st possessor.
    Possessory claim (adverse) may be passed by testamentary disposition at any time, even
       prior to the expiration of the limitations period.

Tacking: unbroken chain of possession, passed the title to the last possessor




Property                                                                                           18
Jus tertii – a defence raised by a party who is sued in respect of property alleging that some 3 rd
party has a better claim than the plaint. or possessor of land action against the govt. when
interfered by the Crown (Crown reinserting the paramount title of the land); no compensation is
payable in common law; only payable according to statue. Can the Crown prevent compensation
by saying someone has a better then the possessor. No, as per court. Crown cannot use this to
defend.

Relative title in land:
1) Title holder
2) Possessor (mere interest but deserve compensation even title holder has a better title)
3) 3rd Party
Create certainty in terms of who is using (by boundary around the land) but also
uncertainty (different between the actual use and what the survey says)

Historical Development Of Principles Of Possession And Seisin (p.138)

The concept of “seisin” is described as the special nature of the possessory entitlement of an
“owner” to the land or real property. Prior to Will Act, the land can only by transferred to the
heir at law. Not all persons “in possession” had seisin (eg a tenant was in possession, but didn‟t
have seisin). It is only the person who seized the land who could avail himself of an owner‟s
rights in respect to the land. Note that possession is often evidence of seisin, and seisin is
evidence of ownership. Describe their special relationship land owners have to or with the land.

-seisin has influenced development of common law property principles, particularly emphasis on
rights flowing from factual possession by contrast with abstract title.
Grantor passes to grantee thru. a ceremony – how to prove? Therefore, the idea is to get as many
people/witnesses to the ceremony.
Organic element of man and land – quotation in mid of p.139 and excerpt at bottom of p.139.

Remedy: The Self-Help Alternative
Instead of seeking legal action to recover possession, there is another remedy called self-help;
which is physically removing the person in adverse possession. However the courts do not
look very favorably on the remedy of self-help b/c it can sometimes lead to violence, but
sometimes the court sanctions it. Note that the owner can‟t initiate self-help if the statute of
limitations has barred legal action by the owner b/c the statute has also extinguished the T.O.‟s
title, you should only think of self-help when the 3rd party hasn‟t been in adverse possession so
long that the statutes of limitations has expired.

T.O. did not discover he had certain property until a survey was done. The property is occupied
by an occupier. E.g. Home depot case – asked the police to remove the homeless. Classic
example of self-help in recovering land. Faster and more efficient method.


Aboriginal Title (p.142)
Why is the issue of aboriginal possession up for debate?
Because they definitely occupied the land for many years and therefore don‟t they have a 1 st
possession right?
One stance is that No, aboriginal possession was not the type of possession that gave rise to
possessory rights over the land because:




Property                                                                                        19
1) nature of the use of the land was one in which they didn‟t possess it (didn‟t put up fences and
   such), rather they used it in a transitory/temporary way so that most they have a usafractory
   right and that is not enough to beat other‟s possessions
2) Unequal power
3) Problems in proving title.

K. McNeil, “Common Law Aboriginal Title” deals with this issue (p.143).
McNeil says that aboriginal „use‟ wasn‟t enough to constitute a possessory right. This led the
court to find that Aboriginal rights are unique. Why the possessory interest is not clear or met?
The use is not sufficient to establish possession.
Caller case? Recognize the aboriginal right but lose the case 3:2 due to procedural point rather
than merit aspect.

R v. Guerin- said that the nature of aboriginal rights is sui generis: a unique interest that is neither
beneficial nor personal; and usafructory in nature. Indian interest is best characterized as an
inalienable (unable to exclude others to others), non-transferable, and a communal/non-individual
interest. Govt. exploiting the aboriginal use of land in Vancouver. Held breach of fiduciary duty
by the govt. and $10 mil was awarded.

As a result the Crown, who has the ultimate title to the land, has burden on it which is this
aboriginal interest in the land. So before the crown does anything with the land (i.e. decide to
give interest in it to other people) they must address this burden either by:
     1) forming an agreement/contract with aboriginal peoples which extinguish aboriginal
        title to the land, or
     2) making legislation that extinguishes aboriginal title to land- but either way they have
        to address aboriginal title to the land (and such legislation has never been passed).
        (Delgamuuk/Mabo v. Queensland- also back this up).

-note: aboriginal rights is still very uncertain area of law in Canada.

Possible underlying justifications to the statutes of limitations that bar actions by the T.O.
Statute of limitations define the relationship b/w a person with an interest based on possession
and the person who is the true owner (person with „paper title‟).
-statute of limitations builds on common law emphasis on physical possession rather than abstract
title and the insistence of relativity of title rather than absolute ownership.

Charles Callaghan‟s “Adverse Possession” examines justifications why we have the statutes
of limitations barring the actions of the T.O.
1.    The law is punishing the owner for neglect in relation to the land (this theory is rejected by
      Callaghan b/c he sees punishment as criminal law and as having no place in the context of
      statutes of limitations)
2.    These statutes serve to encourage the use of land by rewarding the active use of the
      possessor (rather than punishing the paper holder). (Callaghan rejects this as well- he
      questions whether we need to encourage the use of land)
3.    „clearing of title to land‟ justification: there may be a need for some legal means of
      „curing” titles so that registered descriptions on parcels of land are congruent with the
      locations of boundary fences. If we are market economy, adverse possession is convenient
      way of recognizing what exists in fact. Legal confirmation of existing state of affairs
4.    Efficiency of use of society
5.    Encourage protection the land they used



Property                                                                                             20
6.    Create certainty in terms of who is using (by boundary around the land) but also
      uncertainty (different between the actual use and the what the survey says)

-no one has objected and therefore accept and therefore give legal confirmation of the facts

Carol Rose, “Possession as the Origin of Property” (p.149)
o    2 possessors in San Francisco
o    1st possessors traced to have fence at the landside and created boundary with sea. Use:
     raised cattle.
o    Seasonal possession only and others can access the land from water. And big development
     moving towards the land; therefore, the land is not efficient or appropriate or beneficial
     used in the context of the nearby area. The question is whether the notice to the world is
     clear enough to amount a possession. The court is clear that the above facts are not clear
     enough to be possession.
o    possession is built on concept of notice. When someone does something, as a result of
     doing that communicates to rest of world that "this is my land and not yours" if message is
     clear enough and continues unchallenged for a sufficiently long period of time. --
     Limitations act varies from jurisdiction to jurisdiction. Clear and continuous. She argues
     that we are giving effect to what people believe to be, the state of possession and land
     ownership.
o    goes on to say that when we give effect to what appears to be clear, give effect to efficient
     land use.
o    society is worse off in a world of vague claims. If no one knows whether he can safely use
     the land, or from whom he should buy it, the land may end up being used by too many
     people or by on one at all. People are afraid of their hard work being enjoyed by others.
o    If you know land is yours you will use to in most efficient manner.
o    She says that the statute of limitations is not designed to punish the owner or reward the
     trespasser rather it is designed to require the owner to assert her right publicly. The statute
     requires her to make it clear that she is not a trespasser on the land, rather she is the owner
     as she is the person to deal with if anyone should which to buy the property or use some
     portion of it.
o    possibility of transferring titles through adverse possession serves to ensure that members
     of the public can rely on their own reasonable perceptions of what is actually happening on
     the land (ie: someone who pays taxes on the land is a matter of public record) and an owner
     who fails to correct this will lose his title.
o    stresses the importance of property owners making and keeping communications clear. It
     facilitates trade and minimizes resource wasting conflict. Ambiguous claims invite
     litigation, contention, insecurity.
o    if property claims are clear, anyone who can make better use of my property can buy or
     rent from me and make better use of the land and everyone is better off (title enables
     property to traded at its highest value).

Discussion notes on p.152
Registry Act:
 control the lower 1/3 of Ont. land
 register the instrument regarding the land, do a title search to determine the good title of a
    person, possessory interests and prescriptive right of way could not be registered because it is
    arising from facts).
Land Title Act:
 northern 2/3 of Ont.



Property                                                                                         21
    Register the title, possessory interests and prescriptive uses are not possible.

 It is possible to convert registry land to land title, then the land would not be susceptible to
 adverse possession and prescriptive use.

 What role does innocence/negligence/and intention play? Intention of adverse possessor and the
 intention of the victim. (does the intention of the victim consistent with the adverse possessor?
 How is the intention play in the justification of adverse possession?)



 Small Group 22 Jan. 2004

 Notice to Passenger
 All passengers please note BA would be responsible for any lost items found in our passenger
 lounge. Please kindly return the found items to any BA staff. We would spend our best effort to
 return the items to the respective true owner.
 No removal/return? BA is inspected and monitor the area. Reward the finder. Lost & Found.
 Refer to further policy.


 Framework for Finder-Keeper
1.   Status of Finder
      true or honest finder
      attempt to find the T.O.
      Note: (trespasser has right against other trespasser)
2.   Status of Object
      really lost or abandoned? Misplaced or mislaid?
      Where it is found? Note the distinction between owner (fixture & embedded & integral
        part of the property) and possessor (chattel).
      Implied intent on the owner to control the physical part of the land.
      Occupier may have claim with objects on or in the building. Occupier has to claim
        against the finder.
      Possessor has the implied intent to control all things of values, except those items that
        the possessor has no intent to control (found in public area).
      Lawn case – the finder is a trespasser? The intent to control is lost the moment the bill
        is blown off by the wind.
      What is public/private? Public accessible place in a private property?

 What is the legal basis for finder‟s obligation to find the true owner?
 Bailment separates bailee (possessor) and bailor (owner). Bailee has an obligation not to treat the
 object negligently. Therefore, bailee has the duty to find the T.O. But the problem is the
 bailment is involuntary. In such case, the obligation is very limited.
 The other argument is policy: to re-unit the lost item with the T.O. But some implementation or
 result suggest that the function of the regulations were set up against the policy.




 Property                                                                                        22
Week 4

p.153 – 189

                                       Adverse Possession

Ontario Limitations Act
s. 4:  The paper title holder shall bring an action to recover land w/in 10 years after the right to
       bring such an action accrued to the person bringing it.

s. 5(1): Where the person claiming an interest in land was formerly in possession and was
         dispossessed or has discontinued possession, the right to bring an action to recover the
         land shall be deemed to have accrued at the time of the dispossession or discontinuance
         of possession.

Begins to run when the possessor does an act either dispossess the T.O. or lead the court to
believe there is discontinued possession. Possession is likely to be constructive possession.
Dispossession and discontinued possession could be due to the same act.

Policy reasons for Adverse possession and criticisms: Ziff
 paper title holder is forced to take positive action to work or occupy the lands in order to limit
    the risk that the property might be lost to an adverse claimant.
 reward the efficient use of property and penalize the holder of the paper title for failing to do
    so

Critcisim: can be seen as promoting exploitation at the expense of resource preservation. Fears
           that the law of adverse possession can undermine private conservationist practices
           by rewarding the exploitative interloper have prompted at least one call for a rule
           that excludes the operation of the doctrine for wilderness holdings.

-does the reward/penalty explanation really help to promote productivity? It seems like a
harsh punishment to get kicked off land with no compensation. Furthermore all the paper title
holder has to do to prevent adverse possession is to sue squatter a few times. May not actually
increase productivity of the land.

-also land sometimes has to be left idle by its owner in order for its most optimal use to develop.

-perhaps better explanation for the rule is that it protects the settled expectations of an adverse
possessor who has acted on the assumption that her occupation will not be disturbed.

-would be unfair to boot someone off land after a long period of time. Good rationale when
possessor has made lasting improvements with the belief that she holds paper title.

-By fixing a period of time, the law makes potential squatter to take precautions before investing
in the property, while also limit the T.O's ability to take advantage of any improvements that the
adverse possessor might have made to the property

Doctrinal elements of adverse possession
-person asserting squatter's rights must have intention to possess and some degree of physical
control



Property                                                                                          23
-degree of physical control needed to maintain an adverse claim is unclear.

-to succeed, acts of adverse possession must be open and notorious, adverse, exclusive,
peaceful (not by force) actual and continuous.

-use has to be adverse.


Rationale for the adverse possession:
 To penalize those who don‟t use their land
 To reward those who use their land
 To give legal effect to what is happening on the ground
 Rose in “Possession as the Origin of Property” offers a different justification: she says that
     adverse possession is necessary to create certainty that is necessary for the most efficient use
     of the land. She says that when someone uses the land in effect they are giving notice to the
     rest of the world that this land is mine. If the message is clear and continuous then after ten
     years we give effect to what appears to be clear through the statute of limitations.

Note: Limitation Act doesn‟t transfer rights from the paper title owner to the occupier, it simply
extinguishes the title of the paper title holder, and as such the rights of the possessor becomes the
strongest b/c the T.O. doesn‟t have anymore rights

Piper v. Stevenson (1913, p. 154)
Definition of dispossession
Facts: Piper arranged to have the 6 lots of land she purchased enclosed but accidentally ended
        up fencing in 8 lots. They were completely enclosed from 1901 until 1912 when here
        neighbour brought action of trespass against her. During that time Piper, plowed,
        harvested, worked all the land. Buildings built after the potential limitation period.

Issue: Were Piper's actions since 1901 sufficient to constitute dispossession as defined in the
       statue of limitations act? Was there the necessary intent for possession?

Held: Actions = dispossession. Therefore, appeal was beyond limitation period.

Ratio:
1. Possession requires intent and control. (this case doesn‟t really deal with intent)
2. The control of the land must be clear to the world and continuous.

   It was held that Piper had dispossessed her neighbour in 1901.
   Enclosure: fenced in the land sending out clear message of notice to owner
   Her possession was continuous (even though she only used it 6 months out of the year, this
    was ok due to the nature of the land- farmland), and she did everything “that an owner in
    actual, constant occupation would do”. Neighbor‟s title is extinguished by the expiration
    of the limitation period. Her actions constituted a clear act that started the commencement
    of the limitations period.
   Construction of building is not the crucial point but signs of continuous possession.
   She did not intent to defect the other interests but had the intention to use the land as a T.O.
    and the defect of paper holder title is the consequence. Therefore, motive did not matter.
   A case where mistake was made. If you own the land, you must know it and take care of it.




Property                                                                                          24
Re St. Clair Beach Estates Ltd. v. MacDonald (1974)
requirements of intention for AP
Facts: Small piece of disputed land. The appellant‟s use of land was normal domestic and
        recreational use. Ms had septic tank on disputed land from 1954; tending to land, set up
        dog run, sandbox, flowers, swings, picnic table, removed trees, fertilized, etc. Ms did
        not enclose the area. Ms used the land without permission or consent of the owners. Ms
        knew the land was not included in their parcel. M‟s acknowledged owner‟s title by
        making offers to purchase disputed land twice. T.O. picked cherries from time to
        time on disputed land. Compare the facts with Piper. (Questions on p. 154)

Note: This was a case of Land Titles Act land; therefore, not susceptible to A.P. Originally, the
      land is under the Registry Act but St. Clair is trying to move the land into the Land Titles
      Act. In notifying the neighbour about the transfer, MacDonald said he had a claim.
      Usually happened to large development because land is more efficiently administered as
      is free from physical complication.

Issue: Have the claimants established possessory title of the land in question?

Decision: Claimants failed to establish dispossession. Appeal dismissed.

Ratio:
   No fence – therefore, no clear message to the world.
   Ms tried to purchase the land twice – therefore, recognize the superior title of the grant.
   Prescriptive easement – discharge septic overflow into Grant‟s land but fell short of the
    limitation period.
   Ms laid low and did not oppose the survey stakes years before the case. Lord Denning held
    that law should not award those who did not warn the T.O. about the A.P.
   The use of land by Ms deserve the award rationale? The Grant had a good reason to leave
    the disputed land unfarmed.

This case is an example of the court injecting requirements that don‟t exist in the statute. The
statue did not include the adversity of the possession or the openness of possession. The statue
only says possession must displace or dispossess the constructive possession of the T.O. implied
from his title. The statue does not reflect the rationale of A.P.; therefore, the court created
requirements not in statue.
In order for adverse possession to succeed must show:
a. actual possession for the statutory period by themselves and those through whom they
     claim
b. intention of excluding from possession the owners or persons entitled to possession and
c. discontinuance of possession for the statutory period by the owners and all others, if
     any, entitled to possession

   Significant consideration is given to intent, while there is no consideration of intent in Piper.

b) the issue of intention: Animus possidendi/intention to possess through adverse possession
 The Ms had never any intention of excluding the title holders. This is demonstrated by the
   fact that they offered to buy the land from them on two occasions.
 An argument is to be made that animus possidenti is implicit in the act of dispossession (e.g.
   Parker).
   Dispossession requires possession; Possession involves animus possidenti – this case reads
   intent to possess as intent to exclude and defeat claim of the other; occupation with the


Property                                                                                           25
    intention of excluding the owner and other people. As well, that intent must be adverse to
    the intent of the true owner.

c) test of Discontinuance of Possession:
 As long as the T.O. intends to make of the land that is consistent with the intended use of the
   land -- there is no discontinuance.
 A smallest act by the T.O. would be sufficient to show that there was no discontinuance of
   his possession. This is in contrast to a stringent standard required for a clear act of the
   possessor.
 T.O. continued to pick cherries (in contrast to Piper). It is not required that such positive acts
   be performed all of the time. i.e: you are not excluding T.O if he wasn‟t intending to use the
   land and was only saving it for development. Expanded interpretation of statute to include
   both the requirement of discontinuance and dispossession.


Possessory Claims Among Co Owners (p.162)
 Joint tenancy: property transfer by survivorship (equal split)
 Tenant-in-common: no survivorship (not necessary equal undivided shares)
 Both situations entitled to undivided shares of the land.
 This is often a part of “family arrangements” where a parent dies, leaving joint interests to
   children. While some of the children remain in possession, others leave the property. In
   Paradise Beach and Transportation Co. Ltd. v. Price-Robinson (1968) the court held two
   sisters remaining in possession was enough to dispossess other siblings who did not live
   there. P.C. rejected the idea that anything more than mere possession was required to start
   the running time of the limitation period. There is no requirement of intention. However,
   there is a heavy onus on the claimant in cases such as these.
 Paradise problematic because opposed idea of co-owner.
 If a co-owner failed to exert their possessory right for a long period of time, it would be
   inequitable to allow them to re-exert their rights.

   In Re O‟Reilly (No.2) (1980) the court applied the equitable principle of “laches”
    (unreasonable delay) to bar the claim of beneficiaries who allowed their siblings (also
    beneficiaries) to run the farm. The court held that it was unfair for one party (possessory
    owner) to assume all expenses and responsibilities and then for others to assert their rights to
    the property at a later date. The delay should be longer than the limitation period.

Laches are equitable principles are not strictly limitations: No certain period is prescribed for an
action to be brought. Rather, it may become unconscionable to allow enforcement of a right in
equity after a long period of time. Thus, there will be more flexibility (and less certainty)
about when such a claim may be sustained. By contrast, the Limitation Act provide greater
certainty in defining the length of time after which claims by a true owner are extinguished.

Possessory Claims and Tenancy at will (p.163)
Tenancy at will occurs when owner gives you permission to occupy property. Statute of
limitation starts to run 1 year after tenancy at will is created – if no time period is specified (s.5(7)
of Ont. Limitations Act.). Therefore, if in St. Clair, Grant gives a permission to Ms, the limitation
period would start to run 1 year after the tenancy.

More likely to happen in the cases of easement and right of way.




Property                                                                                              26
Leases
   Long-term lease of 21 years to tenants
   A third party begins to occupy the land adversely
   T.O. failure to exert
   2 ways in court (Fairweather):
    1. the right of adverse possessor is defected once the lease is surrender followed by a re-
          grant (T.O. is innocent in the transaction, should allow the T.O. to terminate the lease);
          but this would award tenant who is negligence. UK Law Reform preferred this since
          the problem is small and the A.P. has no knowledge of the lease. Therefore, A.P. does
          not know how long he can possess and has no long-term expectation and law has no
          expectation to protect.
    2. the statue extinguish the right of the leasee and the leasee has nothing to surrender and
          the adverse of possessor enjoy the land for the balance between the limitation period
          and the lease term.
 Court continue to squeeze A.P. out of the jurisdiction.


MacLean v. Reid (1978, p.163)
tenancy at will  adverse possession, reflect upon the quality of the possession
Facts: Clarence Reid bought land in 1935. Respondent (David Reid) lived on property in
        question his entire life with the exception of 6 month period in 1960s and another period
        in 1950s when he was working elsewhere but came back on weekends. Property was
        owned by respondent's parents who had conveyed land to respondent's brother. The
        brother then conveyed the land to the appellant (MacLean) in 1971. Appellants brought
        order asking respondent to vacate land. Respondent said he had acquired title to property
        by adverse possession because he had been in possession of land for more than 21 years.
Key facts:
 Brother had told David that he could stay as long as he liked there in 1936 (i.e. tenancy-at-
    will; therefore limitation period started in 1937)
 David was the one who spent all his life working the land, farming it, buying the necessary
    machinery, etc. Possessed as if he was the T.O. Brother just came back to farm on
    weekends. Didn't do anything on farm.
 David was the A.P., paid taxes and improvement works.
 For 25 years, brother never set foot on the property (rationale to award and penalize?)
 David‟s possession was open and clear but nothing to do with the quality of possession.

Issue: Did respondent establish title to land by adverse possession?

Held: Respondent acquired title by adverse possession.

Ratio:
 Mere re-entrance onto the property by the T.O. is not enough to stop the statute of limitations
   from running and interrupt the adverse possession.
 p.167 – middle, the factors considered in determining the quality of possession:
      "In my opinion the respondent was a tenant at will of Clarence Reid from no later than
      1946. This was ended by statute in 1947. From that time on, the respondent had, to
      the knowledge of the appellants, actual, continuous, open visible and notorious
      possession of the lands in question. This possession extinguished the right and
      title of the registered owner and consequently of the appellants no later than
      1968."




Property                                                                                         27
Note: Limitation Act does not run against those are legally disabled.


P.169 Quality of Possession under Statues

Fairweather v. Marylebone Property Co. Ltd (1963 HL, p. 168)
(limitation period and leaseholds -- A.P. is always against the tenant not the T.O.)
Facts: Property company buys a piece of farm property, but company is not a farmer. Company
        rents land to the tenant - 99-year lease. Someone else enters the property and goes into
        adverse possession of a part of the property for 11 years. Squatters knew about the terms
        of the lease.

Issue: Against whom does the adverse possession run, the T.O. or the tenant?
Held: Since the possession was only adverse to the tenant, then the adverse possession runs
        against the tenant and thus only runs as long as the tenants interest does.

Ratio:
 If someone goes into adverse possession of land that is occupied by a tenant, the limitations
   runs against the tenant and only lasts as long as the tenant‟s interest does (i.e. tenants rights
   can be extinguished, and the adverse possessor has the best title until the lease comes to an
   end).
 Note that the tenant can avoid this by surrendering his lease to the T.O.

Madison Investments v. Ham (1958): intention to exclude T.O from intended use
Facts: Ham rented 100 acres of land with intention of living on it in 1958. Ham built airstrip on
it, flew planes on it, farmed and fenced land. Landlord defaulted on mortgage and land reclaimed
by Masidon Investments. Ultimately landlord reclaimed half the land (of which Ham lived on) the
other half, where the Ham had build the airstrip was reclaimed by Masidon but. Ham continued to
use the airstrip until Masidon brought action against him in 1979
Issue: did Ham effectively exclude the possession of the true owner to gain title through adverse
possession?
Decision: Ham did not acquire possessory title. Didn‟t meet intention requirements
Ratio: A holder of paper title who has no interest in coming on the land cannot be excluded by
the person in possession.
 -reliance placed on the doctrine of adversity. Concluded that whatever action Ham took could not
be inconsistent with Masidon's intention to sell the land at a future date for development. Ham
could not do anything inconsistent with Masidon's intentions because Masidon had no intention,
Masidon's rights were inviolable.

Adverse possessor needs to possess the land and to intend to possess and exclude the owner from
using the land in a manner he intends to (doctrine of adversity)

Key Themes:
A.P. arises out of a factual situation.
Failure to take action within limitation period: 1. title to action barred; 2. paper holder title
extinguished and elevated the title of the A.P.
P.179 of Bucknall article

Past exam question based on Fairweather
Legal issues
Squatter adverse possession runs against the tenant or the T.O.?


Property                                                                                         28
Extinguishments of tenant‟s title, anything to surrender? Leasee can pay less rent.

Potential courses of action
A.P. runs against the tenants
Either surrender or squatter enjoy the balance period

Your recommendation
Law Reform Committee
Fairness to landlord (just a reduction of rent? Because of tenant‟s negligence?)
Fairness to squatter: no expectation but the squatter knew about the terms of the lease. A good
principle to be based on?
Respect the statue and follow the clarity of the Act; therefore, possessory interest should prevail
Argue that A.P. never has any expectation anyway.


Keefer v. Arillotta (CA 1976, p.170)
high level of intent required for AP
Facts: A strip of land which includes a grassy area, driveway and a garage are in dispute.
        Keefer (respondent) attempted to establish a possessory title over this land, over which
        they had only the right of way. K argued that their acts over the years constituted
        possession. These acts included parking a car (blocking passage for others), keeping car
        in garage, putting gravel on the driveway, keeping it free of snow, & barbecues, picnics,
        ice rink on the grassy area. A, who just purchased his land from previous owner Cloy,
        argued that Cloy used the strip of land for deliveries, access to the apartment, customer
        parking. Therefore, Cloy essentially stopped the running of the statute of limitations by
        his presence on the right of way.

        Difficulty of this case: Keefer had right-of-way from the owner to use the driveway.
        Keefer used it beyond the granted in the right-of-way. But maintaining the right-of-way
        could be consistent with the right-of-way.

        Note: the Keefer‟s property is the dominant property (enjoys the right-of-way) and the
        Arillotta‟s property is the servient property (the property which the right-of-way burden
        upon). The enjoyment of right-of-way must be related to a piece of property.

Issue: Was K in adverse possession? What is the level of intent required (Re. St. Clair Beach)
       for adverse possession? If K was in adverse possession did Cloy do anything to interrupt
       the adverse possession?

Held: the acts were not sufficient to establish possession in relation to the driveway or the
      grassy area, but were sufficient to establish possession in relation to the garage

Ratio: It was not enough for the adverse possessor to merely exclude the T.O., but rather the
       adverse possessor must do something which interferes or frustrates the T.O.
       intended use. Therefore, doesn‟t meet requirements b and c.

This case follows St. Clair Beach w.r.t. the interpretation of the requirement of intent.
A person claiming possessory title must establish (Pflug and Pflug v. Collins 1952, p.174):
a.    actual possession for the statutory period
b.    that such possession was with the intention of excluding from possession the owner or
      persons entitled to possession.


Property                                                                                        29
c.    discontinuance of possession for the statutory period by the owner and all others (this
      means excluding owner from using the land the way he wanted to use it).

Adversity: not only to the interests of the T.O. but also adverse to the future plans of the T.O. in
using the property.

Application:    no intent to exclude the true owners. The relationship has been friendly and
                accommodating.
                Court determines that discontinuance of possession could not be proven except
                for the portion at the rear occupied by respondent's garage where the constructive
                possession of owner was displaced by the actual possession of the Keefers.
                Therefore, the only adversity in the construction of garage. However, w.r.t. the
                rest of it, the owners made such use of it as they wanted.

NOTES:          The problem with this is that it rewards the careless landowner, who immunizes
                himself from adverse possession by having no intended usage. But, the T.O. is
                still presumed to have some basic usage because in this case we see that when an
                adverse possessor interferes dramatically (as building a garage on the true owners
                property), it is considered good adverse possession whereas the skating rink and
                driveway reverted back to the T.O. because his intended use had not been
                frustrated there. This is an attempt to repeal and frustrate the doctrine of adverse
                possession. Much like Denning tried in St. Clair Beach Estates v. MacDonald
                with his implied license.

Bucknall says that this 3rd level of intent should only be used when it is ambiguous difficult
case, (and it usually supports the T.O.), otherwise we use Piper‟s intent to possess. (it should
not be used in simple cases as it was in Madison). This test should only be used in the case of
the knowing trespasser and not in the case of an honest error


Brian Bucknall “The Two Roads Diverged: Recent Decision On Possessory Title” (p.177)

Beudoin v. Aubin:
only intention to possess required
Facts: B bought land and thought that the land included the disputed strip of property and used
        this strip of land as if it were his own. However it really belonged to A. A didn‟t know
        that the strip was theirs. Well after ten years, A found out that they had paper title to the
        property so they disputed B‟s rights.

Issue: Did B meet the requirements for adverse possession?

Decision:    The court found that since A had no idea that the property was his and neither did B,
             there could be no adverse possession and no intent to possess adversely.
Ratio:
     Goes the other way by saying that to exclude what the owner intended to use the
         land for is not necessary for proving intent in the adverse, only intent to possess.
         (rejects the adversity test)
-Justice Anderson said that in this case the possession of the land was certain and unequivocal
and the intention could therefore be presumed.




Property                                                                                          30
Brian Bucknall, "Two Roads Diverged: Recent Decisions on Possessory Title"
   critique of adverse possession.
   comparison between two very factually similar cases with two different outcomes. Piper v.
    Stevenson and Masidon v. Ham
p.179

Could have argued this in Piper v. Stevenson, but didn't
Policy justification for the decision:
    unlike the policies that applied 60 years ago where there was strong emphasis to use land as
     much as possible, there is now policy for development land. Let the land sit and wait for
     development to arrive. Which is why the adverse possession characteristics is stricter
    want to ensure that the developer doesn't lose his land.
    land is more valuable and therefore want to preserve its value.
    Registry Act = certainty. In past, hard to know who's land was who's because no registration
     so it made most sense to give title to whoever was using it. Now, registration of title gives
     certainty. Adverse possession undermines the registration system we have in place today.

Critique of Masidon judgement
    has the basic doctrine of possessory title been misunderstood?
    in traditional analysis, Limitations Act had no relationship whatever to the acquisition of or
     obtaining of possessory title. Possession was in it‟s nature, a species of title assertible
     against the entire world other than the T.O.
    by analysis, in the cases of Ham, Piper and Beaudoin, they had obtained possessory title to
     the lands which they claimed at the time that they went into possession. The Limitations Act
     does not create the title. Rather it establishes situations where the owner's title becomes
     indefeasible through the lapse of time. When a limitation period had elapsed against a
     person who had established a possessory title, the former title is extinguished. This has
     nothing to do with the creation of a new title or a transfer of title from the former owner to
     the new owner.
    main issue in Masidon was that the use which Ham made of the property was not appropriate
     for the running of the limitations period
    relied on statement in Keefer: “The use an owner wants to make of his property may be a
     limited use and an intermittent one”

Brian Bucknall “The Two Roads Diverged: Recent Decision On Possessory Title‟
Gives us a very interesting critique of adverse possession:
   starts with Piper v. Stevenson: the principle to go into possession is so simple. Possession
    (control/intent to control) creates possessory title, but the paper title holder has paramount
    rights.
   The limitation act after 10 years the paper title is extinguished and once it is extinguished the
    possessory title becomes the best title.

-Masidon v. Ham - a very similar case to Piper comes to the opposite conclusion because the
common law changed. The intent that is required for possession is different. Instead of intent to
possess, the occupier must have intent to exclude what the paper title-holder wanted to do with
the land. It isn‟t enough that you possess the land, you must possess it in a way that excludes
what the T.O. wanted to do with the land (implied is that the occupier has knowledge of what the
T.O. intended to do with the property).

The policy reasons for this approach:



Property                                                                                          31
   Unlike in the past when we wanted to make people use the land, now we should encourage
    people to speculate with land -- i.e. to leave it dormant with the intent to speculate/develop
    the land. So this new principle makes it so difficult for an occupier to claim adverse
    possession of the land b/c in order to fulfill the „intent‟ requirement for possession they have
    to exclude what the owner intended to do with the land- i.e. in most cases this means actually
    doing something with the land that would stop the owner from developing -- like building a
    house. The new test is so difficult to meet that an adverse possessor will never win and as
    a result it has completely undermined the statute of limitation.
   Also unlike the system which existed 100 years ago where it wasn‟t clear who owned the
    land now we have a modern survey registration system and what the adverse possession
    system does makes the registry system less certain. So by having such hard test for to fulfill
    the requirement of adverse possession, the registry system is more certain.

Then Bucknall says that Masidon v. Ham is not the law b/c Beudoin v. Aubin goes the other way
by saying that to exclude what the owner intended to use the land for is not necessary for proving
intent in the adverse possession doctrine. That you only need intent to possess, but then Keefer
goes back up to the 3rd level.

Bucknall says how do we make sense of this- and thus criticizes the doctrine of adverse
possession for not fully telling us what the intent requirement is. He says that we should only
use the third intent requirement when it is ambiguous difficult case,(and it usually supports
the T.O.). Otherwise we should require intent to possess (Piper)

Reconciliation of the above cases – statue and policy rationale.




Property                                                                                         32
Week 5 (2 Feb. 2004)

p. 221 -- 260

Doctrine of Tenure and Doctrine of Estates

Taking property and fracture it into different interests. The division of interests e.g. ownership
and possession.

Imagine land is divided into:
   Tenure – held by the Crown; ownership – hold land of the Crown
   Estates – present possessory interest or postponed; divide interest over time
   Leasehold – divide exclusive possession and ownership
   Legal and equitable interests – simple definition but difficult in application. Complicated
    by the different protection offered by the common law court (legal) and the Chancery court
    (equitable). For example, “transfer Blackacre to C in fee simple for the benefit of C‟s kids”.
    Common law say the transferor transfer the absolute interest to C there is nothing left for the
    transferor to transfer. C‟s kids say they have an equitable interest in the land. What is
    created is a trust where C is the trustee and the kids are the beneficiaries of the land. The
    kids benefit from the proceeds or rent derived from the land. In a conflict, equity prevails
    over legal interest.
   In a mortgage, the bank is the title owner. The mortgagee has the possessory interest and
    the equitable title/interest to redeem (equitable redemption) the property from the bank.
   Joint tenant and tenant-in-common (difference is survivorship, default arrangement is
    tenancy-in-common)
   Lease: exclusive possession; licence: non-exclusive possession

The Doctrine of Tenure – where it came from (history of seisin, escheats, etc)

Describe the chain of title:
1. Crown
2. Tenants-in-chief: responsible to the Crown
3. Mesne lords: responsible to tenants-in-chief
4. Tenants

Within the chain, interests were held by the preceding level. Each has obligation to the above and
the obligations originates from the uses the land or related to the land.

-division of property rights between crown and everyone else
     tenure developed in feudal times. Functioned as social and economic network
     Crown was absolute owner of all land and parceled out land to lords.
     Property came with obligation as well as rights
     Obligations were owed by the person who had this property to the person from whom
        they derived their interest in the property. In addition to services of tenure, there were
        also incidents of tenure. When doctrine passed to heir, certain financial requirements
        fell on the new owner/occupant of the property. And these requirements had to be paid to
        the person who passed you the property. L would have to pay to the crown
     Only doctrine of escheat survives today which says that if land is ownerless (person
        dies intestate or without heir), it goes back to crown
     Owner today holds land of the Crown



Property                                                                                        33
       Crown can re-appropriate the land without compensation – compensation is solely
        statutory.

    Seisin
      More than one people can owe obligation to more than one people
      Seisin interplay with tenure and estates
      feudal system very concerned with enforcement of the incidents and services associated
        with tenure. Person 'seised' of the land was the person against whom feudal services
        could be enforced.
      lots of people could be seised of land at one time. i.e: tenant seised of land and owed
        duties to demsne. Demesne owed duties to mesne lord, etc.
      it was essential to know who was seised of land at all times because it determine the
        distribution of burdens and benefits in the feudal system.
      common law hated an abeyance of seisin (not knowing who was seised of the land) and
        this has played crucial role in evolution of interests in real property
      Livery of seisin: formal ceremony where person seised of land (feoffor) could convey it
        to another (feoffee)

    Alienability
     tenant didn't have unrestricted right to alienate the land or make a will disposing of the
        land.
     in effect, occupier of the land did not hold both the right to possession and alienation of
        the land.
     two types of alienation available to tenants:
        1. substitution: B, who holds A's land, conveyed his entire interest to C. Then, C would
           occupy the land and be solely responsible for all of the incidents of tenure owed to A.
           B would no longer have any role and would no longer owe any incidents of tenure.
        2. subinfeudiation: B could decide to become a lord himself. B could alienate his
           interest to C in exchange for which C would assume tenurial duties toward B. B
           would continue to render duties to A and C would render duties to B. Lords hated this
           because it diminished the incidents of tenure they received and ability to reclaim land
           in escheat.


Statute of Qui Emptores: abolished subinfeudiation. Upholds substitution
 confirmed right to alienate any interest in land without the consent of the lord (which is the
   root of the policy of free alienation of land in property law)
 abolished subinfeudiation. All alienation of land was to be done by substitution. No new
   tenures could be created.
 this flattened out the pyramid and got rid of all the intermedial lords
 over time, services and incidents of tenure got rid of by Tenures Abolition Act.
 today crown remains feudal lord, but relationship doesn't really have any effect because no
   longer associated with incidents and services of tenure except for escheat.
 statute of wills: passes to your legal descendants, passes to your eldest male heir. Concept of it
   passing to the eldest male is doctrine of primo genetor (its been abolished)
 property is not something you have an absolute interest. Its held in interest of the crown
   with respect to tenurial relationships though most of them abolished except for escheats.
   Its held of free and common socage. Note: crown as the power to expropriate lands.

    Pro Tenure


Property                                                                                         34
       Certainty/predictability- in every situation we should be able to figure out who actually
        has title to the land. Tenure allows for certainty (eg. when someone dies intestate we
        know that it goes to the crown)
       Increase efficiency/max. land use- tenure allows for the expropriation of lands maybe for
        more efficient uses
       Equitable distribution: tenure allows for the expropriation of lands in order to make land
        ownership more equitable
       Reduce complexity- eliminates complexity as the crown holds everything (eg. when
        someone dies intestate we know that it goes to the crown). This would increase
        administrative efficiency
       Balance societal and individual interests

    Against Tenure
     Security- that land won‟t just be taken away from us. Tenure doesn‟t allow fro certainty
       b/c land can be expropriated by the crown. Would allow fro more aboriginal security as
       well.
     The having no tenure works ok in the U.S. and therefore should be able to work for us as
       well.
     Aboriginal title would probably be against tenure.

    It is out of sync with what we imagine as property rights. Equitable wealth, sustainability,
    etc. tenure could justify this. But doesn't mean that the government can't regulate these issues.


Tenure and Native Title (history and rights of aboriginals) p. 231
 Native title of lands is not tenurial because it does not originate form a crown grant, instead
   its arises by operation of law for a pre-existing right based on their historical
 Possession and occupation of the lands in question.

Aboriginal Title (Ziff p.64)
 aboriginal title is sui generis (of its own class and kind). Their property holding is unique, so
   much that it is unwise to assume that any particular rule of property law applies to land held
   under aboriginal title. Can't really place aboriginal land rights in any conventional
   pigeonhole.

Features of aboriginal title recognized by SCC
    o It is inalienable except to the crown. It cannot be sold, transferred or surrendered to any
         other party.
    o It is held communally by the members of an aboriginal nation
    o Differs from other kinds of holdings by virtue of its source

   clear that crown asserted sovereignty over native lands in Canada
   "there was from the outset never any doubt that sovereignty and legislative power and indeed
    the underlying title to such lands vested in the Crown" (R v. Sparrow)
   although claims of native sovereignty not recognized in Canadian law, the concept of native
    title has been frequently considered and upheld.
   although British crown asserted sovereignty, acknowledged that the native occupants of
    Canada had a pre existing and legally recognized interest in their lands.




Property                                                                                          35
Royal Proclamation Act : aboriginal rights existed before declaration of British sovereignty
 reserved all land not within established colonies in British NA and outside land granted to
   Hudson Bay's company to the aboriginals.
 proclamation established the fundamental principle that no native lands in America were to
   be taken by British subjects without consent.
 Proclamation did not create the aboriginal title but recognize the title. It created the
   duty to dispose off the aboriginal title by the govt.
 The cultural difference in treaty negotiation where the aboriginals respect what was
   discussed. Govt. emphasized the written treaty only.
 Can extinguish title by legislation, with compensation now.
 but aboriginal title is not contingent on the Proclamation (St. Catherines Milling &
   Lumber). Instead it is a pre-existing right recognized under the common law and simply
   reflected in the Proclamation. Proclamation viewed as having affirmed or declared the
   existence of a right that preceded the assumption of British sovereignty.

St. Catherine Milling and Lumber Company v. The Queen
old law-> aboriginal rights are a usafructory right
Facts: involved a dispute between federal and provincial governments arising from the
        ownership of lands which had been ceded by the Salteaux Indians in a treaty. However,
        there was no Indian representation before the courts.
 while affirming existence of concept of aboriginal title or native title to the land based on the
    Royal Proclamation of 1763, stated that "the tenure of the Indians was a personal and
    usufructory right, dependent upon the goodwill of the sovereign."
 It‟s the right to hunt, fish, etc. but it is not a right that would give rise to self government. It‟s
    a use right and it‟s a very fragile right and is subject to being defeated by anything that
    contradicts it.

Calder v. British Columbia (1973 SCC, p.242)
created uncertainty as to aboriginal title, forced government to negotiate with aboriginals
 The Nishgas, who had never signed a treaty of cession with either the colonial or Canadian
    governments, sought a declaration that their aboriginal title to the Nass Valley had never been
    extinguished.
 SCC accepted that aboriginal or native title is recognized at common law and was not
    extinguished merely by the acquisition of crown sovereignty.
 case went to SCC and 3 judges held that the aboriginal title had been extinguished by colonial
    land legislation. 3 others held that the Nishga rights had not been extinguished. Another judge
    held against Nishgas on a procedural point.
 creates perfect env't for negotiations. The greatest negotiation in light of Calder was the
    Baker lake agreement. Courts realized they didn't want this uncertainty so had to negotiate

Establishing Native Title: Baker Lake v. Canada (p.243)
 the nature, extent or degree of the occupation of the claimed land is determined by a
   subjective. test.
 Claimants need not establish that their ancestors occupied the land in European ways, with
   clearings, fences, etc. Claimants only need to establish ancestral land use that was consistent
   with the social and economic needs of aboriginal peoples.


Guerin v. the Queen (1984 SCC, p. 243)
aboriginal rights are sui generis


Property                                                                                             36
   held that native title does not amount to beneficial ownership (fee simple) in the land.
   Instead aboringial rights to land are sui generis (unique at law) a unique interest that is neither
    beneficial nor personal; and the right is a use right. But that there is a fiduciary obligation
    emanates from the crown towards the aboriginal people

R v. Sparrow (1990 SCC, p.243)
aboriginal rights give rise only to a right to occupy and exploit the land in a manner consistent
with traditional practices. Aboriginal rights can only be alienated by the crown.

Delgamuukw et al v. British Columbia (1993 BCCA, p.243) (1997 3 SCR 1010 Lamer J.)
most recent description of aboriginal title
Issue: Does native title give rise to certain rights of self government in addition to rights to
       occupy and exploit the land consistent with traditional practices

     Aboriginal Rights are Sui Generis- unique b/c it is 1) communal right and 2) inalienable
      to every one but the crown

        Crown has the ultimate title to the land, but there is a burden on the crown which is this
        aboriginal interest in the land. Crown has a fiduciary obligation to the aboriginal people:
        So before the crown does anything with the land (i.e. decide to give interest in it to other
        people) they must address this burden either by 1) forming an agreement/contract with
        aboriginal peoples which extinguish aboriginal title to the land or by 2) making
        legislation that extinguishes aboriginal title to land- but either way they have to address
        aboriginal title to the land.

      Two propositions about aboriginal title:
    1) Aboriginal title encompasses the exclusive use and occupation of the land held pursuant
       to that title for a variety of purposes and uses (don‟t necessarily have to be uses that gave
       rise to those rights). Para 117 of SCC
    2) Those protected uses that are a part of aboriginal title must not be irreconcilable w/ the
       use that gave rise to the title in the first place (e.g. if the hunting use gave rise to the title,
       although it is not limited to that use, they must not do anything to the land that is
       irreconcilable with that use that gave birth to the title – eg. Strip mining). Para 129 of
       SCC
    3) Para 132 of SCC

Aboriginal title is constitutionally protected but with limits: The states ability to extinguish
native title is now subject to constitutional constraints. S.35 of C.A 1982 recognizes and affirms
existing aboriginal and treaty rights of the aboriginal peoples of Canada. While the section does
not confer complete legislative immunity on aboriginal entitlement; however if a law interferes
with an aboriginal right, then the state now bears the burden of justifying the violation and
establishing that there had been appropriate compensation. Land can be expropriated, but would
have to be very precise legislation and there would have to be compensation for it.

Can aboriginal title (as explained in Delgamukw) give rise to self-governance?
The courts have left uncertainty to what exactly is aboriginal title and whether it gives rise to
aboriginal self-governance. Investment in province uncertain because of lack of certainty.

Statute of Tenures: All future grants were to be of free and common socage




Property                                                                                               37
The Doctrine of Estates
 while tenure fragmented property interests along the lines of exploitation and alienation,
   doctrine of estates divides property rights over time (succession)
 determines quantity of interest (period of time they will have possession of the land)
 the kids in the example is the remainder interests and they are present estate (life estate +
   remainder interests)
 estate pur autre vie = an interest in property for the lifetime of someone else


Freehold and Leasehold Estates (fee simple, life estates, fee tail,)

Freehold Estates                              Leasehold Estates (non-freehold)
  3 types -> Life Estates, Fee Simple         have a fixed term, are of a maximum duration.
    and Fee Tail.                              either for a fixed term ie: 99 years or it can be
  two types of estates exists today: Fee        terminated on sufficient notice at any time.
    simple and life estate                     lessor holds a fee simple estate in land, conveys
  characteristic of freehold estates is         possession to tenant for period of time.
    that its duration is uncertain or          Lessor retains right to possession of property at
    indefinite                                   expiration of lease. The interest reverts back to
  Cannot be passed thru. generation             original grantor.
                                               historically, tenants in leaseholds were not
                                                 seised of the land, the seisin still remains with
                                                 the lessor as the lessor remains responsible for
                                                 any incidences of tenure associated with be
                                                 seised of the land in question
                                               can be tenancy-at-will which is made notice
                                                   with definite notice

X to A for life.
Interests go to A (life tenant) and then it will automatically revert back to the X (grantor) when A
dies b/c the grantor only gave a life interest to A. The grantor has a reversionary interest.

X to A for life and then to B
 A is known as the life tenant, acquires life estate
 B acquires a remainder interest – can be alienated
 X, having alienated land by substitution, retains nothing
 Both A and B have a present estate (life + remainder) in land. If B dies before A, then title
   goes to B's heirs.
 Note: reversion interest reverts back to grantor, while remainder remains away from the
   grantor
 If B dies, the fees simple interest goes to the people in his will.
 if B dies intestate then the interest goes to his heirs, and if he has not heir it goes to the crown
   (b/c of escheat).

Note that life estates can be sold or transferred, but the buyer will only have the land as long as
the seller lives.

Fee Simple
 most common way today to hold an interest in land and the largest in the common law.



Property                                                                                           38
 Indefinite duration possession. It is expected to possess perpetually.
 The interest will endure as long as there are heirs (broadly defined to include any of the
  possible heirs on intestate succession or by testamentary disposition) and isn't subject to
  services or incidents of tenure. This interest most closely resembles "ownership" idea of civil
  law though the land is still held of the crown.
 statute of wills (1540): tenants acquired the right for the first time to make testamentary
  dispositions of their property to anyone by executing a will and designating a person as their
  heir.

Fee tail (abolished in 1956)
 abolished in all common law provinces except for Manitoba.
 the fee tail estate was created by a grant "to A and the heirs of his body". It lasted only so
   long as there were lineal descendants.
 If A conveyed his interest to B, A could convey only his life interest. Upon A's death, B's
   interest would terminate and A's lineal descendant would take the land.
 purpose of fee tail was so that wealthy families could ensure that an estate would remain
   forever in the family.
 now they will be construed as fee simple


Creating Freehold Property Interests: Inter vivos Transfer and Succession (p.251)
 before conveyancing of property act, had to use very precise wording to create an estate longer
  than the life estate.
 historically, common law favoured creation of life estates rather than estates in fee simple
 determine transfer land to whom before death (enabled by the Wills Act)
 nowadays, created by grant or testimony

Common law and Statutory distinction in creating estates (p.252)
Common law
 Fee simple “…to A and her heirs”: “A” = word of purchase, “her heirs” = words of limitation
  describe the limit of estate given to A

For Grants under common law:
 Under common law the phrase “and his heirs” had to be used. E.g. to X and his heirs.
 „To X forever‟, or „to X in fee simple‟ were not enough to transfer a fee simple interest
   (grantor has a reversionary interest)

For Devises under common law:
 The courts are more generous with wills, and are more willing to give effect to the testator‟s
  intention, even if the testator failed to use the precise words required at common law to
  convey a fee simple estate.
 e.g. testamentary dispositions “to X forever” or “to X and his issue‟ were enough to convey
  fee simple estate in a devise
 But if no evidence of intention to convey fee simple can be ascertained (such as simply „to
  X‟), then a will would only convey a life interest.
 Note: the term „and his heirs” doesn‟t convey the actual estate to X‟s heirs, but merely
  determined that X has acquired a fee simple estate.

-conveyances taking place post 1956 cannot create a fee tail.



Property                                                                                      39
The rules now, as modified by statute: unless contrary intention occurs in the grant, then the
grantor will be deemed to have given to the grantee all of the interests held to the grantor
irrespective of the words used by the grantee

Conveyance And Law Of Property Act, RSO 1990: abolishes „heirs‟ requirement,
Said that after the July 1 1886, c.34, s.5
 For any conveyances, it is not necessary to use „and his heirs‟ in order to convey fee simple
   estate. You can instead use „in fee simple‟ or any other words that indicate that you are
   conveying fee simple estate.
 And, where no words indicating conveyance of fee simple estate are used and (no words that
   contradicting conveyance of fee simple are used) all the right/title/interest/claim of the
   grantor/testator is conveyed.

Ontario Succession Law Reform Act, RSO 1990, s.26 (applicable to devises)
 for wills/devises except when contrary intention appears in the will, where property is devised
  to a person without any words of limitations, the devise passes the fee simple or the whole
  estate that the testator had power to dispose of by will.. Thus if testamentary disposition of “to
  X” will convey the entire estate of the testator (so if testator was in fee simple, it is conveyed
  to X)
 Deemed to grant all estate to the grantee or the beneficiary-at-will unless there is evidence
  with said this otherwise. Therefore, grantor has the obligation to limit the estate to be
  transferred.

Ontario Conveyancing of Law of Property Act, RSO 1990. c.34 s.4 (abolishes Fee Tail and
applied to devises/grants)
It says that any attempt after May 27, 1956 to create fee tail estate by the use of words “to X
and the heirs of his body” will be construed as conveying to X the greatest estate held by the
grantor. And fee tail is abolished as a result.

Variations on the Fee Simple Estate (p.256)

Fee simple absolute: Largest interest at least measured over time known to the common law
(what we have been assuming so far). The estate can only be terminated when the holder of
the estate dies without an heir and the land will go back to the crown (escheats).

Qualified estates:        less than an absolute fee simple. Qualified fee simple estates can
terminate not only on the death of the tenant without an heir (as in the case with all estates in fee
simple), but also at an earlier date in certain circumstances. At the point of termination, the
grantor or the testator‟s estate may recover the land from the grantee. The qualified fee simple
allows the grantor/testator to retain some ongoing control over the use of the land.

 arise when grantor/testator wishes to grant a fee simple estate that will terminate on the
  happening of some event.

Qualified Estates

Grantor Qualified fee simple estate                    Future Interest to grantor/3rd party
/testator                                              or consequences




Property                                                                                          40
           Fee simple determinable                  Possibly reverter:
            “to C until alcohol is served on the  no steps are required by the grantor
              property”                               i.e. automatic
            limiting condition is embedded in the  rule of perpetuity does not apply
              grant (an integral part of the grant)   because condition is an integral part
                                                      of the grant
                                                     does not want someone to rule land
                                                      from the grave

           Fee simple subjected to a condition Right to re-entry:
           subsequent                               grantor has to take positive steps to
            “on condition that no alcohol is        exert the right
              served on the property”               rule of perpetuity applies – must vast
            given the property with additional      within 21 years of the death of
              condition separate from the property   grantor and with certainty at the time
                                                     of grant made

Subdivision of Condition of retention (this analysis applies to life estate as well)
Determinable fee simple                          Fee simple subject to condition subsequent
will automatically determine on the occurrence  Present interest: Fee-simple subject to a
of some specified event                               condition-subsequent.
  o Determining event sets the limit for the          o there is a condition subsequent that is
     estate granted. Words such as “so long               added as an independent clause that
     as”, “during”, “while” and “until” create a          may terminate the fee simple absolute.
     determinable fee simple. (Re Essex)              o Words such as “on condition that”,
  o if the condition is void, then whole grant            “provided that”, and “but if” tend to
     fails (there was never any grant since the           create a fee subject to a condition
     determining event is inherent in the                 subsequent. (Re Essex)
     definition of the grant).                        o Can easily become a fee simple
(B) Future interest: linked to a possibly                 determinable
reverter                                          Future interest: As the property goes
                                                      back to the original owner, reversionary
                                                      interest becomes a right of re-entry.
                                                 If recipient has met condition and if I fail re
                                                 claim the property back right away (right of re
                                                 entry), the Limitations Period begins to run
                                                 against me. The property may be possessed
                                                 adversely
Both right of re-entry and the possibility of reverter are reversionary interests

Fee simple subject to a Condition Precedent
 Deals with the acquisition interest condition
 condition subsequent may defeat an estate that has already been granted and is therefore a
   condition of retention. In contrast, a condition precedent is a condition of acquisition
 X to A on the condition that she marry B
 A will take no interest unless the condition is fulfilled.
 often really difficult to tell whether something is condition precedent, subsequent or a
   determinable fee.
 characterization of the grant or devise is often crucial to the basic question of whether the
   grant will take effect.


Property                                                                                      41
Remoteness -> Rule against perpetuities
 law doesn't like interests that might arise at very remote point in the future b/c these interests
  tend to cloud the title of land and restrict alienation and development.
 Rules against perpetuities: common law has long favoured policies permitting the free
  alienation of land and has developed complex system of rules to limit extent to which such
  interests could arise in future.
  o Example: Property granted subject to condition-subsequent. Can regulate use of property
      well into future and heir‟s uses with the condition, and if heirs meet the condition, can lose
      property.
  o Rule against perpetuities: judiciary rule that says you cannot control forever the use of
      the property.  would be inefficient since don‟t know what is the best use for the land in
      the future. Thus, if a condition subsequent is too far in the future, the right of entry will be
      disallowed
 In past only right of entry (condition subsequents) were subject to rule against perpetuity and
  not reverter (determinable), but that's been changed by statute. (only applies to reverter
  instruments executed after 1966)


Factors that may void conditions

1)      if inconsistency/repugnancy: court may find the condition void as it has so restricted
        rights (ie, condition that can‟t sell – well, if can‟t sell, don‟t have the right to alienate,
        which is a basic property right). To find void depends on how substantially limited.
         Example: condition that you must sell to my family.
         If the family is very small – very limited. Repugnant to the 3 rights and fee simple?
             If the condition unduly restricts fundamental property rights such as right to exclude,
             use and alienability, then should be declared void.
         If the family is large – then condition perhaps not void since condition has not
             unduly limited property rights.
         Void: total prohibition on sale or mortgage of the land (re Corbit)
         Void: provision that land can‟t be alienated w/out the consent of another (McRae v.
             McRae)
         Void: total restraints even for a limited amount of time (Re Carr)

2)      Contrary to public policy: Do not want people to undermine values of society. i.e.
        leaving spouse. Providing that child does not live with my mother and wife.
           Void: Conditions that incite people to commit crimes or encourage
            separation/divorce ( Hindley v. Marquis of Westminister)
           Void: that children does not live with my mother and wife (Re Thorne)
           Void: forbid a change in religion (Wainwright v. Miller)
           Void: total restraints on marriage (but cond‟s against marrying persosn of a certain
            class, persons, religion are valid) (Re truck settlement trusts)
           May also be Void: if against constitution – discrimination

3)      Too uncertain (eg „reside‟ is too uncertain). Note there is a different test for uncertainty
        if it is a condition precedent/determinable, condition subsequent/determinable.
        o Courts has to decide where the condition is void and what type of conditions
        o Court inclines to uphold the grant. So they made a decision whether the condition
               should be void based on the consequence to be resulted, then court interprets the
               condition


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        o    Condition precedents:
              Test: Evidentiary uncertainty let‟s wait and see. (also applies to life estate
                determinable)
              Example: Fee simple left to me, provided that I marry a Jewish person. Debate:
                who is/is not Jewish. Void for uncertainty? But, if find someone that qualifies as
                Jewish, not a problem. (only void it on grounds of uncertainty if the uncertainty
                arises, if the uncertainty doesn‟t arise don‟t void it)
        o    Determinable life estate Nature of test that applies: evidentiary uncertainty. (lets
             wait and see if the uncertainty arises and if it does then we void it, if it doesn‟t it still
             stands)
        o    Condition subsequent
              Test: Conceptual uncertainty  Must know from outset whether there is or is
                not uncertainty. Unlike condition precedent, must know who is/is not Jewish,
                rather than waiting to see to find out.

The Effect of a Void Condition on each type of qualified estate (p.260)
 crucial distinction between condition precedent, condition subsequent and determinable fees.
    1. If condition precedent is void, then the entire grant will fail. (integral)
    2. if condition subsequent void, then cut off condition and qualified estate is transferred into
       fee simple absolute.
    3. if a determinable fee simple is void then entire grant fails because determining event is
       void and current occupant will be dispossessed of land even though there wasn't a breach.
 courts will often try and construe these determinable fee simples as condition subsequent to
   avoid that result
 court would try to save grant (a vesting construction = a construction that saves the grant, 1st
   para. p.260)
 Tuck case – marry a person of Jewish faith. The condition was uncertain but the condition
   was met.
 In a condition of subsequent, the court requires certainty from the outset (conceptual
   uncertainty)

How do avoid confusion in future grants?
Clear wording of right of re-entry or revertion in the grant.

Re Essex (County) Roman Catholic Separate School Board and Antaya
Facts: Respondent's father granted certain property to the applicant. Deed contained a covenant
that the property was "to be used for school purposes only" and continued as follows The said
grantor reserves to himself and his heirs the preference to buy the said property at the current
price should the same cease to be used for the purposes intended
Issue: is the grant in question a determinable fee simple or a fee subject to a condition
subsequent?

Qualified Life Estates
-can be condition precedent or subsequent or determinable

X to my widow for life so long as she remains unmarried
 widow acquires determinable life estate with two natural termination points- her death or her
    remarriage, whichever comes first so grantor's estate retains both possibility of reverter and a
    reversion in fee simple.




Property                                                                                               43
X to my widow for life provided that she does not remarry.
 natural termination is widow's death. however, if she remarries, estate can be cut short by the
    executor of the grantor's estate if the executor exercises the right of entry.
 problem with qualified estates is that it is unclear whether testator or grantor intended to
    create a qualified life estate or merely a personal license to occupy lands for a period of time.
 license is merely a contractual right, granted by the owner, permitting another to enter onto
    the land usually for a specified purpose
 given that it is only a contract governed by doctrine of privity of contract, license does not
    create an estate in land that will bind subsequent purchasers of the land in question.

1.   Reference to text on p.262 – looking exclusively to the language
2.   Recognize the consequences
3.   The responses in drafting a grant for the client in terms of definition and including the future
     interests.
p.276 – 8 for Thurs.




Property                                                                                          44
Week 6 (9 Feb. 2004)

p. 276 – 290, p. 306-317

Court looks for reasons to strike down the condition to make the property less incumbent.

Life estate is qualified as freehold.

Re Waters (1978 HC, p. 279)
Subjective factors to consider in determining grant/device is license or qualified life estate
Facts: The testator makes a provision in his will: “I give the use of 48 Walker Avenue to Ellen
        Jones for as long as she lives or until she remarries or gives to my executors and trustees
        a written notice that she no longer needs and desires the use of the property, at which
        time it shall become the residue of my estate.” The residuary beneficiaries wanted the
        property and claimed that the grantee really had a lesser interest of a life estate.

Issue: What is the nature of the interest that has arisen? How can you tell the difference b/w a
       license and a qualified life estate? What is the nature of the qualification? Is the
       condition void for some reason? What is the consequence if the condition is void?

Analysis: The court looks at the rule of construction (p. 280 *). Courts determine what kind of
          interest has been created (whether qualified life estate, or licence). “… a cardinal rule
          of construction that the Judge must endeavor to place himself in the position of the
          testator at the time the will was made and try to ascertain the intention of the
          testator, having regard to …”  try to ascertain the intention of the testator using:
           1. language used
           2. context in which the language is used.
           3. circumstances in which the will in question was made (e.g. relationship
               between the beneficiary and testator, resources of the beneficiary)

1) Language used:
 “for as long as she lives”  a life estate on face of words
 “or until she remarries”  creates a qualified life estate – condition subsequent even “until”
    was used which suggest determinable life estate
 “or gives to my executors and trustees a written notice that she no longer needs and desires
    the use of the property.”  another condition subsequent

2 & 3) Context and the circumstance:
 The circumstance that she‟s entitled to property, suggests that this is bigger than just a
   personal license to occupy.
 Fact that she dealt with furniture imply title not just a license.
 The will also states that she is also responsible for the liabilities too -- which seems to suggest
   more than a license.
 The Strongest argument: look at the relationship – clearly a close relationship. Irrespective
   of marriage, wanted to leave her something of substance (thus larger than a licence).
 She‟s allowed to rent the premises or collect rental income and as a licensee she is not
   allowed to do so as a licence is a personal K that doesn‟t entitle her to rent it out.

Repair vs. Improvement




Property                                                                                          45
It is common for the testator to require the life tenant to take care of repair and the upkeep of the
property. Improvement benefits the right-of-entry by increasing the property value. Therefore,
improvement should be the responsibility of the reversionary interests holder not the life tenant.

Held: it‟s a qualified life estate, rather than a personal license. It is a qualified life estate,
      subject to 2 conditions subsequent:
      1.       If she remarries – life estate comes to an end
      2.       If she gives notice – life estate comes to an end.

Ratio: To determine whether it is a licence or a qualified life estate it is not something that is not
       determined objectively, but rather subjectively. You must use the rule of construction.

Discussion question: if the devise created only a personal license, why would the devisee have
“no right to rent the premises and collect a rental income”? b/c a licence is a personal contractual
right and therefore she is not entitled to rent it out.

Difference between life estate and a mere personal licence:
1. Licensee cannot alienate property to another person. It is a mere contractual relationship
     between 2 parties. If licensor sells the property, new owner not bound by the licence. A
     licence does not create an interest in the property and does not bind successor of the
     property.
2. A licence usually contains a specific/limited purpose.
3. The licensee can only bring an action against the licensor for breach of contract and cannot
     bring an action against the land for the use of the licensee for a particular purpose.

Life tenant interest vs. Remainder interest/Reversionary interest (p. 291 doctrine of waste)
Settle Estates Act (p. 292)


Re McColgan (1969 Ont.HC, p.282)
steps for determining whether will grants a life estate or license
Facts: “I give the following trusts: to hold my property as a home for Mary Kavalchick until her
        death (sounds like a life estate) or until she is not residing therein personally (seems to
        deter from life estate now), whichever shall first occur and thereafter to hold such
        property as a home for Carrie, until her death or until she is no longer residing therein
        personally, etc… property.. all taxes, insurance, repairs and .. shall be paid from a fund
        sufficient to cover”
     Qualified life estate 
     To A (Mary) for life, then to B for life (Carrie), then remainder to C (J.A.) in fee simple
     Creates a reversionary interest – right of re-entry or reverter.

Issues: What is the nature of the interest given to Mary? You have to ask several questions:
1. life estate or mere personal license?
2. If life estate, what kind of life estate is it?
3. Is the condition void? If yes what are the results?

Analysis:
1.What is the nature of the estate? A life estate or mere personal license?
Courts say: life estate
o The courts use Waters: “you must construe the will: look to the language in context to the
    testator‟s intention, circumstance.”


Property                                                                                           46
o    However, the court also adds that, as the Perrin v. Morgan (p. 285) highlights, the question
     is not, of course, what the testator meant to do when he made his will, but what the written
     words he choose to use mean in the particular case – what are the “expressed intentions”
     of the testator. [i.e. doesn‟t matter what the testator really meant to do, but what the words
     mean (expressed intention)]
o    looking at the circumstances and language that the testator desired to give a much bigger
     interest than just a license. The courts found that there was a life interest given.
o    Context: “home” suggests it is a life estate rather than licence
o    Circumstances: the relationship between the testator and the beneficiary

2. If it is a life estate? What kind? Qualified: determinable/subject to condition subsequent?
o Court no doubt about it  qualified life estate. Use of the word “until” qualifies, and “until
      her death” – the determining event is important for the qualification.
o The use of “until” is usually determinable, but since the court thought that if it was found
      void the beneficiary Mary would get nothing (and it was clear that this was not the intention
      of the testator), they found that it was a life estate subject to condition subsequent.
o Courts in determining the nature of the qualifications are much more concerned with the
      consequence.

3. What about the condition? Is the condition void? If it is, what is the consequence?
o Look at the word and the conception of integral part of the grant
o one of the conditions were „residing‟- is this uncertain b/c what constitutes as „residing‟? It is
    important to note that the courts view uncertainty differently depending on the context.
o Since the courts found if a life estate subject to condition subsequent, the test for uncertainty
    is conceptual uncertainty and in this case the courts found „residing‟ was conceptually
    uncertain.

Held: Courts find life estate condition subsequent – condition is void and condition falls off.
      Beneficiary therefore receives an unqualified estate, giving effect to testator‟s intention.

Ratio:
In order to find out what the interests of the grantee are, ask three questions:
            o Life estate or personal licence? (Consider waters/Perrin case)
            o How is it qualified? Determinable/subsequent/precedent (courts are more
                concerned with the consequence)
            o Is condition void? If yes, what is consequence?

Test for whether void for uncertainty: condition must be such that the court can see from the
beginning, precisely and distinctly upon the happening of what event it was that the preceding
vested estate was to determine.

Aside: Will; probated; executors have legal title of the assets; beneficiaries have equitable
interests to the assets and this equitable interests bind the executors to pass the legal title.

Shelley‟s Case (p. 294)
  A trap for estate lawyer – easy to fall into
  Assume A has 3 kids
  T grants Blackacre to A for life and remainder to A‟s heirs (“A‟s heirs” words of limitation to
   A‟s interest rather than word of purchase)




Property                                                                                         47
   Court interpretation: a life estate in estate + a fee simple estate = a fee simple absolute to A
    and nothing to kids because the words are unequivocal and court would not look at context or
    circumstances
   Solution: named the children or the remainder


Present and Future Interests (p. 306)
Future interest: interest in property in which the right to possession and enjoyment of the property
is postponed until sometime in the future.

Re Tillbury West Public School Board and Hastie
Facts: deed to school trustees granted the property "for so long as it shall be used and needed for
school purposes and no longer."
Issue: Is it a fee simple determinable or a fee simple subject to condition subsequent
Raito:
-essention distinction between them appears to be that the determining event in a determinable fee
itself sets the limit for the estate first granted. A condition subsequent on the other hand, is an
independent caluse added to a complete fee simple absolute which operates so to dereat it.
-words such as while, during, as long as, whilst are generally determinable
-words such as "on condition", "provided that", "if", "but if it happen," raise interests of condition
subsequent

X to A for life, remainder to B in fee simple.
B's estate is a future interest because B will not be entitled to possession and enjoyment of the
estate until A's death. BUT B also has present estate (not possession) in the property because B
can convey to third parties by grant or will -- even prior to A‟s death.
o grant gives B a present interest in property known as an estate that is vested in interest at the
   time of the grant.
o a vested interest = the future holder is known/ascertained AND no condition precedent has to
   be met other than the natural termination of the prior life estate. i.e. nothing stands in the way
   of the interest
o B's estate will only vest in possession at the time of A's death.
o B's estate is called a remainder.

Vested and contingent affect future interests.

    Contingent interest = future holder is unknown and/or there is a condition precedent which
     has to be met
    Contingent is the problem.

X to A in fee simple but re-enter if alcohol is served
A future interest subjected to a condition precedent. Therefore, a contingent reversionary interest.

Particular estate = an estate that is less than a fee simple i.e.: life estate
Prior Particular estates = estates that precede one another in a series.

X to A for life, remainder to B for life, and then remainder to C in fee simple.
o A acquires life estate vested in interest and possession at the time of the grant.
o B acquires life estate vested in interest at time of grant and will vest in possession after A's
   death



Property                                                                                           48
o C acquires remainder in fee simple that is vested in interest at time of grant and will vest in
  possession after A and B's death.
o Both B and C have acquired future interests because their right to possession and enjoyment of
  the property is postponed until a future time.
o Note: B might never enjoy his life estate. Even though B acquired an estate vested in interest
  at the time of the grant if B dies before A.
o but if C dies before B or A the remainder will just go to C's heirs.

X to A for life
o A acquires life estate vested in interest and in possession at time of grant.
o there's no remainder so upon A's death, the estate reverts back to grantor

X to A for life, remainder to B in fee simple.
o Vested in interest and in possession to A.
o Vested future interest to B. B has no possession until A dies.


Future Interests at Common Law
 Reversionary – revert back to grantor
 Remainder – remain away from the grantor

Two types of remainders (p.309):

1. Vested remainder
     A remainder that has no contingencies.
     An estate may vest in possession = the holder of the estate is entitled to immediate
        possession of the property.
     An estate may vest in interest prior to vesting in possession if the entitlement to
        possession arises only at the determination of a prior particular estate:

    X to A for life, and then the remainder to B in fee simple
    o In this case, A is has a life estate and has immediate possession. A has an estate vested in
        possession and interest at the same time. A's estate = prior particular estate.
    o B acquires fee simple remainder vested in interest at the time of the grant. Estate only
        vests in possession when A dies.

2. Contingent remainder
     a remainder that has yet to be vested in interest

    X to A for life and then the remainder to B in fee simple when he turns 21 (B is only 15)
     In this case, A has life interest vested in possession and in interest.
     B's interest is subject to a condition precedent and thus is called a contingent remainder

    Contingencies include
       i. remainder person is not in existence. E.g., "To A for life and the remainder in fee
            simple to A's first born child." A doesn't have any children yet so remainder won't
            vest in interest till first child is born. If A has no children then the remainder interest
            never vests and the fee simple will revert back to the grantor.
       ii. The remainder person is not ascertained (don‟t know which one). E.g. “My
            widow” is not ascertainable until death



Property                                                                                            49
         iii. Subject to some condition precedent that must be met before the remainder
              receives the interest
               Example: To B for life, remainder to A if she graduates from Osgoode.
               Condition precedent must be met – graduate.

Note: the possibility of reverter is the interest that remains in a grantor who has conveyed a
determinable fee simple. A possibility of reverter, although contingent on whether terms of estate
are breached is considered to be vested in interest (Re McKellar)

P. 312

Common law remainder rules (p. 313)
 Historical revolution of contingent remainder interests
 stage 1: all contingent remainder interests are void, only vested and reversionary interests are
  allowed
 stage 2: cL to agree that contingent interest is only valid if vested during the prior life estate
  because CL does not prefer the development the possibility of abeyance of seisin (not
  knowing who owned the land). Common law does not accept a future interest would suddenly
  spring up in the future
 common law does not allow contingent remainder interests to cut short the life estate
  prematurely. Only the grantor or his heirs can do this based on his right of re-entry and
  benefit from cutting short the prior life estate (e.g. to A for life, but if sell alcohol, then to B in
  fee simple – is not allowed)

 common law courts developed a series of rules that greatly restricted the creation of
  contingent remainders.
 remainder rules only apply to common law interests and not to equitable interests in property.
  Interests created at common law are known as legal interests in property, distinguishing
  from equitable interests and legal executory interests.
 With regards to possibility of reverter and the right of entry for condition broken, could not be
  conveyed to stranger

   Rule 1: No legal remainder after a fee simple (overriding rule)
       o In common law a remainder cannot follow a fee simple. Nor can you have a
           remainder that prematurely cuts short a prior supporting estate.
       o E.g. to A and her heirs – complete disposition therefore no remainder
       o E.g.: To A in fee simple (there can be no interest that can follow a fee simple estate)
           except a reversionary interest
       o Apply to condition subsequent and determinable
       o Once an estate granted to A in fee simple, A receives all of Blackacre and there
           could be nothing that could follow. This rule applies to qualified estates as well.
       o E.g.: X to A in fee simple so long as the CN Tower stands, and if and when it falls
           down, to B in fee simple. The grant to A is a determinable fee simple. The
           remainder interest is void because no remainder after a fee simple.

         Additional notes:
          once grantor has disposed of a fee simple, the grantor has disposed of all interest and
            has nothing further to grant. Thus if you grant, "to A and his heirs, remainder to B
            and his heirs," the remainder is thus void and B acquires nothing.




Property                                                                                              50
          rule also applies to qualified fee simple, making it impossible for grantor to convey
           to a stranger the possibility of reverter or right of entry. Because common law did
           not allow a vested interest to be defeated in favour of anyone other than the grantor or
           the grantor's heirs, the possibility of reverter or right of entry for condition broken
           could not be conveyed or granted to a stranger.

  Rule 2: No Springing Freeholds: no remainder that sprung up in the future.
      o A remainder must be supported by a prior particular estate of freehold created
      o E.g. X purports to grant to A‟s children, but A has no children
           Gives up interest, but receiver does not receive it. Common law cannot support
             this gap in seisin. Therefore, cannot advise a client to leave property to a
             grandchild that is not yet born.
           Instead, what you could do is: grant to A for life, then remainder to A‟s children.
             Now we have a life estate to bridge the gap between the grant and the birth of A‟s
             child.
      o E.g.: X to A at the age of 21. (A is 15).
      o E.g.: X to A upon A‟s marriage (A is unmarried).
      o E.g.: to A for life, remainder to A‟s kid at 21 old.
      o What happens if try to support contingent remainder with a leasehold estate?
          Answer: does not work since a leasehold estate is not a freehold estate and therefore
          there is a gap in seisin.
      o E.g.: Grantor to give M leasehold on Blackacre for 2 years, remainder to H if and
          when she marries. This does not work since cannot support the contingent
          remainder to H. Trying to give H something in the future, but not supported by a
          freehold estate. What we have is Blackacre lease to M for 2 years.

       particular rules apply to leasehold estates. Leasehold estate is not seisin of the land
       because seisin remains with the freeholder (the landlord). Accordingly, a grant "to A for
       two years and then to B and her heirs upon attaining 21" (B is only 20) doesn't create a
       valid contingent remainder to B. The 2 year lease is valid, but seisin remains with
       grantor's estate. B takes nothing under grant because a prior particular estate of freehold
       does not support B's contingent remainder interest. BUT, if B is 21 at the time of the
       grant, then B's interest is no longer contingent and B will take seisin immediately at the
       time of the grant.


  Rule 3: Timely Vesting:
      o A contingent remainder is void unless it vests in interest by the end of the prior
          particular estate. Common law does not want any gap in seisin between successive
          estates.
      o E.g. of prior supporting life estates: to A for life, remainder to A‟s first born child.
      o E.g.: X to A for life and the remainder to B in fee simple upon attaining 21.
          According to rule, B's interest must vest by the end of A's life estate. B must turn 21
          before A dies or B's interest never takes effect. If B doesn't vest in time there will
          be a reversion back to grantor.
      o Contingent remainder must vest on the prior particular supporting freehold estate.
          Remainder in favour of B will fail.
      o Basically, as long as there's no gap it is ok. i.e: “To A and B remainder to survivor”
          is fine because results in no gaps. On the other hand if “To A and then one year later
          remainder to B” , contingent remainder will be void.
      o Festing v. Allen side rule:


Property                                                                                        51
            To A for life and remainder to kids over 21: only those reach 21 at time of A‟s
             death. The class closed at the point of A‟s death.

   Rule 4: No Shifting Freehold
      o Cannot prematurely cut short the life estate in favour of the remainder person.
      o A remainder is void if it operates so as to defeat the prior particular estate of
           freehold. A remainder is required to beset in possession only upon the natural
           determination of the prior particular estate.
      o This rule applies in one case only where there is a life estate subject to a condition
           subsequent, with a remainder to a stranger.
      o E.g: X to A for life, but if A goes bankrupt, then the remainder to B in fee simple
           (life estate subjected to a condition subsequent). Common law does not allow the
           grantor to convey a right of entry to a stranger as illustrated by the no remainders
           after a fee simple rule. Because the remainder in this case purports to defeat the
           prior particular estate in favour of B if A goes bankrupt, the gift to B violates the
           remainder rule is voidable.
      o Remainder in favour to B is void – gave a qualified life estate to A (subject condition
           subsequent) and retained a right of entry. While the grantor can cut short the life
           estate and reserve the right of entry, grantor cannot convey to a third party the
           benefit of a condition subsequent applied to a life estate.
      o Does not apply to a determinable life estate – since has a limiting condition
           embedded in the grant. Courts not prematurely terminating the life estate, rather pre-
           existing.
      o E.g.: to A for life until…= determinable life estate
      o EXAMPLE of determinable fee simple: “to A for life or until the CN tower falls,
           and if the CN Tower falls, then the remainder to B in fee simple.” A's life estate will
           terminate naturally upon A's death or when the CN Tower falls, whatever comes
           first. B acquires valid remainder that will vest in possession either upon A's death or
           when the CN Tower falls. B's remainder interest is not operating to defeat
           prematurely the prior particular estate thus doesn't violate rule. B's remainder
           interest takes effect upon the natural termination of the prior particular estate,
           whether that be upon A's death or when the CN Tower falls.

      These four CL rules continue to apply today. But very difficult in practice. Therefore,
       law developed conveyance to attract equity.

   Stage 3: Equitable Estates
   Concurrent interests in law 1) Common law 2) Courts of equity

   “to A and his heirs and to the use of B for life but if…”
     CL say the interest stops at A because of fee simple
     But equity say no, B has an equitable interest
     So now we can create a strong freehold in A and attach with various conditions

   Stage 4: The Statue of Uses connects the strong fee simple interests back with the equitable
   interests and make the remainder interest legal and equitable

   Stage 5: But this conflict with the desire to separate legal and equitable interests

   308, 312, 322



Property                                                                                       52
Week 7 (16 Feb. 2004)

p. 317 -- 338, p.

Future interests
 Abolition of contingent future interests, only reversionary and vested future interests are kept.
 Relaxation on certain contingent remainders and must not violate the 4 rules.
 “for life until” = limitation on the l.e. therefore a determinable l.e. and did not cut short the l.e.
   therefore does not violate rule 4 of shifting interest.

The conveyance of uses
 Differed from common law conveyance
 Method of evading feudal incidents. (made it possible to make testamentary dispositions and
  to evade the costly incidents of tenure)
 Was a device under which legal title was granted to one person to hold for the benefit of
  another. Under a grant to uses, land was transferred by A, the FEOFFOR of uses to B, the
  FEOFFEE, to be held for the benefit of C, the CESTUI QUE USE.
 The goal of such a conveyance was to place legal title in B, who was intended to hold it for
  uses destined to serve C.
 The cestui que use had no legal title to the land, feoffee was the person who was actually
  legally entitled to the land

•     G grants to A in FS to the use of B in FS

•     G is the feoffor to uses (G has no further interest in the land)
•     A is the feoffee to uses (A holds legal title and seisn, and pays incidents, holds land for the
      use of another)
•     B is the cestui que use (B holds equittable title and enjoys possession could not enforce the
      feoffee's obligation in courts of common law but in courts of equity)


X to A and his heirs to the use of B for life and then the remainder to the use of C and her heirs
(prior to Statue of Uses)
 A acquires legal fee simple
 B has equitable life estate
 C has equitable remainder in fee simple
 The courts of equity didn't care about seisin. The feoffee to uses remained seised of the land

Courts of equity didn't apply common law remainder rules to future equitable interests.
Thus springing and shifting interests were allowed

X to A and his heirs to the use of B when he turns 21 (prior to the Statute of Uses). B is currently
15 years old.
 A has acquired legal fee simple and remained seised of the land
 B has an equitable springing interest that will occur when he turns 21. (Note: this would not
     be possible in common law because of 'timely vesting' rule.)
 A remained seised of the land in fee simple, retaining legal title at all times, but A was
     required to hold the land for B if and when B reached 21.




Property                                                                                            53
   Until B reaches 21, the courts of equity imposed a resulting use in favour of the grantor X.
    Whenever the beneficial entitlement to the land is unclear, the courts of equity determined
    that beneficial ownership would 'result back' to the grantor.
   In this case grantor gets equitable fee simple, defeasible on B attaining 21.

X to A & his heirs to use of B in FS so long as bridge stands, and if and when it falls, to C in FS
(prior Statute of Uses)
o Court of Equitty also permitted SHIFTING INTERESTS in property.
o A gets a legal FS.
o B gets an equittable determinable FS.
o Remainder interest to C would be void at CL b/c there can't be a remainder after a
     determinable FS and grantor can't convey a possibility of reverter to a stranger so interest
     can't shift to C if bridge falls.
o Under equity shifting interests are enforceable. As a result, C acquied a “gift over” of an
     equitable shifting interest to C if and when the London Bridge falss.

These new equitable interests are known as EXECUTORY interest [i.e. equittable springing &
shifting]. Because they have yet to be executed and will only vest sometime in the future.

RATIONALE for Conveyance to Uses: Allowed people to convey land to heirs prior to the Wills
Act 1540.

X to A and his heirs to the use of B for life, remainder to the use of B's children who attain 21.
o Under CL, these children must attain 21 during B's life or their contignent remainder is void
     [VESTING TIME rule]
o This outcome could be avoided if the future interest was created in equity.
o Under equity, any children who attained 21 before or ater his death shared equally int the
     remainder interest.

Potential Problem with Conveyance to Uses:
o What if the feoffee to uses decided to renege on promise to hold only legal title and to take
    possession of the land fromthe cestui que use?
o The feoffee to uses has legal title, and seisn, and is recognized as the owner of the land. The
    cestui que use has no legal right to the land and thus no remedies in the CL.
o BUT remedies were provided for the cestui que use by the Lord on the basis of EQUITY and
    good conscience. As more and more land was held in conveyance to uses, there was a lot of
    work relating to the protection of the interests of the cestui que use, and eventually, there
    was a spearate ct (COURT OF EQUITY) estbalished which applied these principles.
o This new range of property interests persisted until there was a short lived attempt to
    eleimiate them in the STATUTE OF USES (1535)

   security of equitable estate similar to that of legal estate except that courts of equity wouldn't
    use jurisdiction to disadvantage the bona fide purchaser for value without notice.
   Courts of equity exercised powers to prevent unconscionable behaviour.

The Statue of Uses
 reunited legal and equitable title by removing the legal title from the feoffee to uses and
   giving it to the 'cestui que use' thereby "executing" the use.

STATUTE OF USES (1535)
•  As a result of the adoption of substitution as the method of transferring interests in land,


Property                                                                                           54
    most of the land in England was held by the Corwn. The king was the one to benefit from
    feudal incidents. The conveyance to uses menat that feudal incidents were being avoided.
    To avoid this from happenning all EQUITABLE estaes were converted to LEGAL estates.
    This was the purpose and role of the statute.
•   Statue was part of CL and remains a key part in Cdn law today.

LANGUAGE OF STATUTE:
Where one person (A) was seised of land to the use of another person or corporate bodies (B), the
legal interest held by A will be executed and that interest will be transferred to B. B shall be
seised of the land, making B liable for all incidnets that B had previously evaded. B holds the
same entitilement as B previously held under the use as orgiinally granted. B's entitilement will
simply be converted into a LEGAL interest rather than an EQUITABLE interest.

X to A and his heirs to the use of B and his heirs
 A's interest in fee simple is transferred to B and B becomes seised of the land and after the
    statute, B's entitlement becomes a legal rather than an equitable estate.

X to A and his heirs to the use of B for life and then the remainder to the use of C and her heirs
 use is executed and B acquires a legal life estate, and C acquires a legal vested remainder.
 B is seised of the land, C has a vested interest at time of grant that will vest in possession
    upon B's death.

Limits of the Statute of Uses- Application and Non Application (p. 324)

Application:
1. When person A is seised to the use of another B.
2. When any person (feoffee to uses) is seised to the use of "any other person or corporation"
3. Where a person is the cestui que use and seisin is an individual, the use is executed.

Non-Application (separation of legal and equitable holder):
1. To A for 999 yrs to the use of B for 999 years. [This is because A is not seised of the land,
   but instead holds a leasehold estate]. A will hold the land for the use of B for 999 years.
   The equitable interest does not re-unite with the legal interests.
2. where the feoffee to uses is a corporation i.e. grant to a corporation for the use of B in FS
   [Corporation remains seised of the land and retains legal title in FS, holding the land to the
   use of B. B acquires an equittable estate in FS.]
3. If the feoffee to uses is given active duties to perform in the grant i.e. if feoffee to uses has
   to manage property and pay profits to the cestui que use. Modern trusts employ this. E.g. “to
   my trustees, to hold on trust for A, B, and C”. Such trusts require trustees to manage
   property, and thus are not executed by Statute.
4. Does not apply to personal property i.e. stocks, bonds, $, commercial instruments. Statute
   related to seisin.


X to A and his heirs to the use of B at 21 (B is 19)
 BEFORE Statue: A acquire legal fee simple and was seised of land. B acquired equitable
     springing interest that would vest in interest and possession when he turned 21

   AFTER statue: use is executed and seisin passes from A to B. B holds same interest as he
    held before (in the same quality manner, form and condition as he had before") but statute



Property                                                                                         55
     forces CL courts to recognize that B holds the same interest as before even if in common law
     conveyance it wasn't allowed. B acquires legal executory interest that will spring up on
     attaining 21. X retains legal fee simple defeasible upon b attaining 21.

X to A and his heirs to the use of B and his heirs, but if B marries C, then to the use of D and his
heirs
 Before Statute: A was seised of the land and held a legal FS. B held an equitable FS with a
     a gift over of an equittable shifing executory interest to D, contingent on B marrying C. In
     equity, B's interest can also be described as a equittable FS with a gift over to D if B married
     C.
 After Statute: A's interest is now executed. B acquires a legal FS subject to a legal shifting
     executory interest in FS (a gift over) to D if B marries C. Compare to

G grants to b for life, but if B marries C, then to D and his heirs
Deals with a shifting interest. This is a CL interest and attracts the legal remainder rules and the
gift over to D and his heirs is void b/c it is the part that shifts.

The Rule in Purefoy v. Rogers: applies to contingent remainders contained in conveyance to
uses (p.326)
 Possibility of failure of future interests.
 Grant with a wait-and-see situation, the court concluded that if there is a possibility of vesting
    prior to the termination of the prior estate.
 “to A in f.s. to uses of B for life remainder to.1st kid reach 21.”. A gets nothing under the
    statue. B got legal and equitable life estate. Kid has springing interests but if did not happen
    in B‟s life time, the remainder is void.
 if a legal executory contract can comply with common law remainder rules then it must.
    Legal executory interest will be void if it can comply with common law remainder rules but
    fails to do so.
 Put your right back into the timely vested rule in common law.
 Solution 1: “remainder to 1st reach 21 or one day after B‟s death” – eliminate a wait-and-see
    situation, created a second problem with springing problem (a gap in seisin) in additional to
    time-vested problem
 Solution 2: create a double uses “to A and heirs to the use of B and his heir to the use of C..”.
    The Statute executed the first use (to B) and exhausted the Statue. The equitable interests
    move forward to C. Therefore, divided legal and equitable interests even under the effect of
    conveyance (p. 331). The language reduced to “unto and the use of B in f.s. in trust form …”.
    Use equity to avoid Purefoy v. Rogers.

p. 328 and p. 330 exercises

Statue of Uses and Testamentary Disposition (p. 330)
The legal remainder rules do not applies to devices of testamentary disposition to allow for
flexibility.
Wills (p. 334): legislation now creates that a testator‟s property passes to the personal
representative (usu. the executor) who holds in trust for the beneficiaries of the will. The
legislation creates the trust even the will does not say so after probation. The personal rep. then
distributes the estates to the beneficiaries.

Modern Trust (p. 336)
 “Unto the use of …in trust form…” – modern trust


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   Active duties
   p.335 exercise
   The resulting trust describes the situation in future interest and a perpetuity in transfer of
    interests.
   Assumed there is no gift unless proven – hard to prove under the Fraud Act. Court is
    reluctant to award gift therefore favours the idea of trust so that the legal title can be regained.
   Constructive trust – established by court to do equity. One member of the couple holds the
    property in trust for the other and for himself (p.337 – 338). E.g. Crown and First Nation.
   Common law and now statute says cannot grant property 21 years beyond the death of the life
    tenant (life in vine) – not examinable.



Bailment, License and Leases (p. 347)

Distinction between ownership and possession. Draw a line between those interests.

Bailment
 = temporary transfer of personalty under which the goods of a bailor (owner) are handed over
    to a bailee (exclusive possessor). (involves a blend of contract, tort and property law)
 maybe contractual (car rental) or gratuitous (when you lend a book to a friend)
 relationship is typically consensual, although it may arise when there‟s no consent or
    agreement between the bailor and bailee. (i.e: finder of lost property might be considered to
    be the bailee of lost property)
 might also arise where person is in possession of another person‟s goods mistakenly, thinking
    they are his own.
 The bailor has a reversionary interest.

Questions
1. Is there a bailment? Has there been a transfer of control (physical and mental by bailee)?
   Has the owner given up both physical and mental control? Don‟t assume there is bailment.
   If not, the court would find a licence is created.
2. What type of bailment? Historically strict liability of the bailee to take care of the goods –
   modified by the tort law and negligence. This to determine the standard of care applicable.
3. Does the arrangement have the effect to modify the standard of care which the court imposed?
   E.g. contractual terms and exculpatory clause, expands or limits the liability. Have the
   parties vary the liability thru. contract?
4. Has there been a fundamental breach of the bailment contract therefore the bailee may not
   be able to rely on the exculpatory clause? If there is a fundamental breach, what is the effect
   of it? A rule of construction or rule of law? A rule of construction with strict construction
   and with no ambiguity.
5. What is the scope of the bailment relationship? Just the car or include the diamonds in the
   trunk? Expressly bought to the attention of the bailee and the things ordinarily in a car?
   Unconsciousability.

Bailment defined as:
delivery of personal chattels in trust, on a contract, express or implied, that the trust shall be duly
executed and the chattels redelivered in either original or an altered form, as soon as the time or
use for or condition on which they were bailed shall have elapsed or been performed (refer back
to Parker & Bridges)


Property                                                                                             57
License:
the grant of such authority to another to enter upon land for an agreed purpose as to justify that
which otherwise would be a trespass and its only legal effect is that the licensor until the licence
is revoked is precluded from bringing an action for trespass

Obligations of bailee  Duty of care
imposes certain obligations on the bailee with respect to the chattel in question. Bailees generally
held liable only on the basis of fault and a different level of care was imposed depending on the
nature of the bailment:
1. Low: if bailment is for the sole benefit of the bailor. (i.e: gratuitous deposit for safekeeping
     that benefits bailor only) bailee assumes low duty of care and is only liable for gross
     negligence.
2. High: if the bailment is for the sole benefit of the bailee. (i.e: gratuitous loan of a car for the
     sole benefit of bailee). Bailee assumes a much higher duty of care and is liable for slight
     negligence.
3. Medium: bailment for mutual benefit (where there is an exchange of consideration and K
     exists), a duty or ordinary diligence applies, unless otherwise altered by terms of the K. i.e.
     negligence. E.g. coat check in a restaurant. Very common situation. Bailee to prove he or
     she did not behave negligently – hard to prove. Bailor has to prove damages or loss of goods
     during the period of bailment.

But what does gross, minimal and ordinary negligence mean? Best to just assume a general
standard of negligence in light of circumstance
 Note: What may appear to give rise to a bailment may only give rise to a licence. This may
    arise where the owner of a car parks in a commercial parking lot. Where a sufficient control
    of the car has not been transferred, the owner of the car is merely purchasing a license to
    enter onto the parking lot and park the car. Characterization is crucial. If there is only a
    licence, the parking lot will not be held liable for any damage. An exculpatory clause in
    the bailment may effectively alter the duty of care otherwise owed under bailment.

Characteristics of a bailment (vs a license)
-control and possession of object has been transferred

Heffron v. Imperial Parking Co. (1974 Ont. C.A., p. 350)
factors to determine whether it‟s a bailment or license
Facts: respondent parked his car in the parking lot of the appellants in downtown Toronto
        paying the evening flat rate charge and receiving a return ticket that contained the hours
        of operation and the following exculpatory clause, “Parking conditions: we are not
        responsible for the theft or damage of car or contents, however caused” and the hours of
        operation. At request of appellants‟ attendant, respondent left the keys in the car. The
        lot was marked with signs that had the same exculpatory clause as the ticket.

        respondent returned to lot hour after it was closed. Car was missing and was found 3 days
        later damaged and abandoned elsewhere. The normal practice was for the attendant to
        bring keys of cars that weren‟t claimed at closing to the parking lot across the street

Issue: Was this a bailment or a license? If characterized as a bailment, is the exculpatory clause
       valid?

Held: it‟s a bailment. Exculpatory clause is unenforceable. Bailment with mutual benefit.


Property                                                                                           58
Principles:     in order to determine whether the relationship is one of bailment of license have
                to look at whether there was a transfer of control:

Ashby case:      similar to case at hand but found that the relationship was that of a licensor-
licensee. Owner had his own designated parking spot, didn‟t require that the keys be handed over
to the attendant so that he could move cars and make more money – different from this case.

Evidence of bailor-bailee relationship vs. to licensor-licensee  evidence of transfer of control
a) car owner delivered the key and car and therefore the control over the car to the attendant
b) parking ticket had a serial number  indicate that the surrender of the specific ticket would
   be necessary in order to obtain delivery from the attendant of the automobile.
c) provision of the attendant raises a reasonable inference that he is supplied by the owner of the
   business for more than the mere function of receiving money upon the parking of the car.
d) Closing hours: during of bailment and liability terminates after the period.
e) Parking lot closed, according to the conditions announced on the ticket and signs, at midnight
   and no conditions were imposed concerning the removal of cars prior.
f) Notice of a closing hour reasonably infers an active operation of the parking lot rather than a
   passive allotment of parking stations from which the car owner could at any time, day or
   night, unilaterally withdraw his parked vehicle
g) Practice of parking lot owner was to place the keys left in the cars at the end of the day in the
   office of the appellants‟ car parking garage across the road.
h) Whether the person had a dedicated parking space on the land (license)

Bailment is a legal conclusion. It does not affect what was said in the contract but court tends to
look at the actions and facts happened rather than what is called.

Does it matter if the owner has another sets of keys with him?
What if the lot is fenced and the entrances are barred? – evidence of the intent to control
Power and responsibility do not give them the requisite to control? Compare to car rental,
the control is much less in this case.

Is the exculpatory clause valid?
-or does it not operate b/c it‟s a breach of a fundamental term

Exculpatory clause on p. 350. Does it excuse the bailee negligence?
Fundamental breach – frustrate the whole purpose of the arrangement/relationship; deny the
heart of the contract/arrangement/relationship.
What is the effect of the exculpatory clause in the case of a fundamental breach? The clause is
too vague and broad. The bailee did not expressly contract out of liability from fundamental
breach. E.g. specifically deny liability of negligence; therefore too broad and lack of clarity.

Second bailment (?) did not have the exculpatory clause. Therefore, there was liability (scope
include content). If there is a second one, it is for the exclusive benefit of the bailor.

Bata v. city Parking
license was found
illustrates a licence: In the parking lot scenario the court found it to be a licence b/c the
signs/ticket clearly said that the „charges are for the use of parking space only‟- thereby
illustrating that they didn‟t control the car (or have a supervisory role over the car) or have the
intent to control the car, merely only gave a licence to use the parking space.


Property                                                                                         59
Minichiello v. Devonshire Hotel
constructive bailment of things attached to the principle chattel (i.e: tools in car)
If it would be typically seen that these goods would be inside the car then the bailment includes
these goods (eg. tools, clothing, radio, tape player..etc) or if the bailee‟s attention is drawn to
these existence of these valuables then it is included in the bailment -- (e.g. jewels in Minichello),
but if the goods are of a type you wouldn‟t typically see in the car, then the bailment doesn‟t
extend to these goods.

Length of term of bailment
 could be for a fixed term, i.e: long term lease of machinery, or at will
 owner‟s right of possession in case of bailment is postponed until its over unless bailee is in
   such serious breach of K that bailor is permitted to retake possession.

Burden of Proof: on the bailee unless bailee dissappeared
-there is a presumption of negligence in bailment cases and the burden of proof is on the bailee.
Those who are suing (bailor) they have to prove
a) that there is a bailment
b) that the item/car was actually lost
The defendant (bailee)
C once the above is prove has to prove that they were not negligence. Note that it is very difficult
to prove a negative - so, basically once the bailor has proved bailment and loss, unless there is a
contractual term that negates liability- the bailee will often be found negligent.

*But Exception to this: But if the Bailee and the bail goods disappear, then the burden shift to
the bailor to prove negligence of the bailee. But note that it is difficult for the bailor to prove the
bailee‟s negligence b/c evidence is difficult to find, so the bailee will often get off the hook.
(taylor case)
Ie: bailee, guy flying plane and plane disappear. The burden shifts to bailor to prove negligence.
The bailee is liable for negligence. The bailor cannot prove negligence because he just has a
story, a hypothesis that he can't prove. So bailee/bailee's estate is off the hook.




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Assignment and sub-bailment
-bailee may assign or sub bail his or her interest, providing that the terms of the original
bailment expressly or impliedly permit it.

1. Authorized subbailment
A bailee may sub-bail his or her interest, provided that the original bailment agreement
expressly or impliedly permitted it. The bailor has a direct right of action against the sub-
bailee.
Eg. A gives a ring to B for repair, and B may assign the work to C, if the ring is lost while in C‟s
possession:
A may bring an action against B (in contract) and C (in tort), given that there is no contractual
relationship b/w A and C. However if the sub-bailment b/w B and C contains an exculpatory
clause relieving C of liability for the loss of the goods, C can only rely on the exculpatory clause
only if A expressedly or impliedly consented to a sub-bailment containing the clause. (Punch
v. Savoy‟s Jewellers)

2. Unauthorized sub-bailment
If a bailee sub-bails to another w/out the implied or expressed permission of the bailor, the bailee
is strictly/absolutely liable (no defence) for any damages caused to the item.
NOTE: If the bailor doesn‟t say anything (i.e. doesn‟t specifically say to the bailee don‟t sub-bail)
the bailor would have to prove that even though he didn‟t particularly say anything, he implied
no authorization to bail and the court may decide based on the nature of the bailment and the
nature of the goods that there was an implied term stating no authorization for sub-bailment.

Example of sub bailment problem
A bails to B, B sub-bails to C, question about whether that is authorized. And D destroys the
bailed goods. D crashes into C when he is driving.
What rights does A have? If A forbade B to lend it, he is totally liable. Can A sue C ?
-C has an exclusionary clause that excludes liability for negligence
C can rely on exculpatory clause in a contract with B only if A expressly or impliedly consented
to sub-bailment containing such a clause. Otherwise, not a party to a contract but C is liable for
negligence. B is liable for sub-bailment. If D smashes the car, (D is third party, no relationship
to A), C may successfully sue D for loss of possession (C has possessory interest). A can sue D
for permanent damage (reversionary interest) in the car. Sue for loss in ownership interest. C is
not liable (wasn't negligent). C can sue D in tort. A can sue D in tort.

Bailment and the employment relationship
-an employee is not a bailee of the employer‟s property.
-an employee is not in possession of the employer‟s property, but rather in custody of the
employer‟s goods and will not be liable in bailment for negligence. (you‟re in custody of them
and not actually in possession)

Common carriers and innkeepers continue to be at law strictly liable though its been varied by
statute. Innkeeper's act sets out specifically what the liability is of the innkeeper and what liability
it owes to guest.
-innkeeper strict liability ahs been altered by statute. In Ontario innkeepers liability is limited to
40 dollars unless goods lost through willful act of innkeeper or were deposited expressly for
reason of safe custody to the innkeeper.




Property                                                                                             61
Bailment and injury to third parties
What happens when bailed goods cause injury to third parties?
-3 situations in which bailor/owner of chattel may be liable
1. if bailee is acting as the bailor‟s agent
2. bailor may be guilty of some personal negligence
3. bailor may bail complicated machinery along with an operator.         Bailor responsible for
    operator‟s negligence


What happens if the chattel is negligently damaged by the third party?
 Though no longer in possession of goods, the bailor still maintains an interest in the bailed
  good (reversionary interest).
 Thus the bailor has an interest in any permanent damage to the goods and can sue the
  negligent 3rd party, and the bailor can sue the bailee as well (but the bailee can be excluded
  if there is an exculpatory clause in the contract).
 Although the bailee is merely in lawful possession of the bailor‟s property, the bailee may
  maintain a right of action against a third party who has damaged or wrongfully deprived the
  bailee of the bailed property.

 this is another way of describing the interest in the goods themselves.
 bailee's interests are the interests of a possessor. Bailee can sue for the loss of the bailed
  goods for the term of the bailment contract.
 Bailor, who has the reversionary interest, can sue for any permanent damage to the bailed
  goods.
 Each have an action against the negligent third party who has interfered with the bailed goods.
 These rights can be varied by contract. If bailor leases car to bailee, may impose on bailee
  liability of damage to car irrespective if bailee has been negligent. But w/o any changes to
  normal relationships and responsibilities. Bailee sues for loss of use to the third party.




Property                                                                                      62
Week 9 (1 Mar. 2004)

p. 364 -- 388, p. 406 -- 432

p.431 and 432 (prob 1&2)

Leases and Licenses

Similar to bailment, lease separates ownership and possession but more complicated because
1. Situation could be described by a written/oral contract just like bailment
2. Creates an interest in land; CL gives rights and obligations flow with leases; e.g. exclusive
     possession (bare in mind the definition of possession) and reversionary interest to the owner.
     These rights and obligations can be varied by contract and (3) below
3. Affected by legislation and not the contract alone; statue superimposed on contract
     especially residential leases.

Lease                                 License
  grant of exclusive possession       contractual right to enter onto the land of another (no
   giving rise to an estate in land      interest in land!); usu. for a particular purposes
   (creates a legal interest)          constitute little more than a defence to an action in
  owner has reversionary interest       trespass
   in land                             under privity of contract, its not binding on third parties
  tenant has a right to the           if licensor sells his interest to third party, they can take
   exclusive possession of the           the land free of any obligation to the licensee, even if the
   leased premises, and the right        third party had actual notice of the outstanding license.
   to exclude all others including     Licensee only has an action against the licensor (not
   the lessor.                           the 3rd party). Problem if the licensor is a shell
  creates an estate in land,            corporation.
   binding on the world
  as an estate in land, if the       Priorities and Registration
   lessor sells his reversionary       problem occurs when there are a number of different
   interest to a third party (an         proprietary interests in relation to chattels or land in
   Assignee), this third party           existence at the same time.
   generally takes reversion           principles for establishing priority necessary as a way of
   subject to outstanding                determining relative priority among number of
   leasehold estate; i.e. bound by       competing interests.
   the existing lease                  development of system for registration of property
                                         interests that accord priority based on the order in which
Remedy for breach: if tenant             documents are registered.
wrongfully evicted from leasehold
estate, he/she may bring an action    Remedy for breach: if licensor in breach, licensee will
to recover the leasehold estate       generally be able to recover only monetary damages under
and might be protected by             contract law and is not protected by the various statutory
remedies available under              protections available to residential tenants.
applicable landlord and tenant        might be able to find an equitable interest in land under
legislation. (ie: Landlord and        principles of estoppel and unjust enrichment (might bind
Tenant Act). Same if tenant is in     subsequent purchasers as a result) ie: if owner of land
breach of leasehold agreement.        request or allows licensee to spend money on the land
                                      under a reasonable expectation created by the owner of the
                                      land, the licensee will be permitted to stay on the land
                                      (inwards v. baker)


Property                                                                                          63
The historical purposes of leases were to circumvent the usury prohibition. But the lender does
not have an action or protection against the land. The contract only provides remedies against the
borrower for damages. The court over time developed the remedy of ejectment to the owner.
Therefore, this make leases both personal and real property following the ejectment creation
(lease is chattel real property).

P. 367
The policy questions on boarding houses:
Statue -- security of tenure concerns in the Landlord Protection Act 1) definition of leasehold
property 2) rights to assign and sublet by the tenant 3) security deposit cannot exceed 1 month of
rent
Should the LL protection act extend to boarding houses? Definition of residential premises

For
Common areas (e.g. kitchens) – logical to treat differently
Economic aspect – the rent is lower
Alternative market –
Possession is short, inefficient to provide the same protection to tenants

Against
could still have exclusive possession in the tenant‟s room;
The tenants are more vulnerable therefore Act should be extended to protect them
Emotional attachment

Highway Properties Ltd. V. Kelly Douglas and Co.
leaseholds are a combination of K and property law, and K law should be the theme
Facts: LL leases mall space to Kelly store. Since the Kelly store is a big draw, many other
          stores also lease the space too. The mall doesn‟t do well and Kelly wants out of the lease.
          Kelly leaves. Under the property doctrine
Under Property Law: The LL is entitled to continue to charges rent to tenancy until they get a
new tenant to fill the space. This pretty much relieves the lessor the duty to mitigate his losses
(i.e. to find another tenant), since he is still getting payment form the tenant that has left -- This is
neither an efficient or desirable outcome.
So, the courts invoked contract law to vary the property doctrine:
Under K law the lessor had a duty to duty to mitigate his losses (i.e. find another tenant).

Ratio: Leaseholds are a blend of property and contract law because property law wasn‟t
       yielding efficient and desirable results (letting the mall property sit idle).

    o   shows us how the principles of K law became more relevant b/c LL and tenant -- e.g. of
        how the courts have increasingly incorporated contract law remedies, and obligations in
        the event of a tenant breach)

    o   So, once you establish that a contract is a lease and you want to find out what the rights
        and obligations of the LL and tenant are look at:
        1. Look at the property law
        2. K law (b/c it can vary the property doctrine)
        3. legislation might vary property doctrine that determines rights and responsibilities of
             LL and t.



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Lightman‟s article: A Community of Interests: Nursing Home article
Nursing Homes -- are they leases or licenses?
Certain legislative protections will flow depending on how it is categorized (i.e: if it‟s a lease it
will be protected under Landlord and Tenant Act). They are leases but until recently they weren‟t
expressly covered under the landlord tenant legislation.

The nursing homes are not regulated and not inspected. Therefore, the owners could exploit the
occupiers.

Lightman lists all the awful things and cond‟s that exist in nursing homes and suggests that it can
be handled one of two ways
1.     By regulation: setting mandatory minimum standards that is enforced by the gov‟t who
       checks to see that they are up to par.

        Disadvantages: Residents become dependant on the gov‟t - which may not be a good
        thing b/c the gov‟t isn‟t always the most active and the resources to enforce. Loss of
        individual rights. Monitoring is inefficient – a better use of resources to create a home
        advocacy body. Can over-regulate and increase the costs of nursing homes and reduce
        competition and availability in the market.
        Advantages: residents are anonymous and are less likely to be subject to reprisal. Better
        use of resources b/c they won‟t have to deal with problems on a claim-by-claim basis.
        Consistency and uniformity among the treatment for the homes.

2.      Give residents rights: a bill of rights so that they can sue when their rights are breached.

        Disadvantages: Residents have to pay, and not all residents have the sophistication or
        money to bring a claim before a tribunal for adjudication. Complain may not come from
        the people who need assistance. The residents don‟t know that they can complain or how
        to complain. There are also power concerns since the residents are dependant on the staff
        they may be unwilling to bring a claim against them b/c fear of reprisal. This approach
        would require significant resources on case-by-case basis. The market profit attracts
        more competition in Option 1 (?).
        Advantages: The remedy lies in the hands of the people that most care/or affected by this
        problem -- direct action. Ability to take direct action.

Now as a result of Lightman‟s article, the Landlord and Tenant Act now includes nursing homes
so essentially it gives tenants in nursing homes the right to sue. But in Emonds view- it doesn‟t
have to be one or the other- it can be both.- we do need regulation as well.


Can you not use both methods? In selecting bill of rights, he elected a set of minimum standards.
There is some capacity to regulate and to ensure that standards are being met.
o regulator adapts agenda of regulator and fails to protect the rights of the individuals that it
    was their objective to regulate for.
o bill of rights relates to substantive actions
o this isn't really a question of license/lease. But how best to achieve the goal
o Emond doesn't see this situation as an either or option. Could be a regulated situation but
    ensure that individuals have rights to bring individual actions to the court.

Why does anyone care whether something is characterized as lease or license?



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1)   determine whether the owner or occupant may avail itself of the provisions of the applicable
     landlord and tenant legislation
2)   determine whether on the sale of the land, the occupant‟s interest will bind the subsequent
     purchaser.

Re British American Oil Co. and DePass (1959 Ont. CA, p.374)
test to determine whether lease or license
Facts: landlord seeking to employ summary proceedings under the relevant landlord and tenant
         legislation to evict a commercial tenant. The agreement was a document described as a
         service station lease. DePass claims that since he didn‟t have exclusive possession it is a
         licence b/c: 1) if it is a licence the eviction process is more complicated/more difficult
         to evict b/c if it is a licence it would not fall under the jurisdiction of the Landlord
         Tenant Act and it would be more difficult to evict 2) remedies with licences are
         damages and the remedy is on who the K is with.

        BAoil claims it is a lease b/c 1) it is easier to get an eviction under leases b/c can use the
        legislation. On the same day, they also signed a separate agreement described as an
        equipment loan and retail dealer sales agreement

Issue: is the agreement a lease or license?
Held: it‟s a tenancy (lease)
Conclusion on p. 377: reversion, creation of an estate, transfer of possession, and control of
premises
Principles:
Test for distinguishing between leases and licenses
(a) Exclusive possession is the test to determine relationship though it is not determinative.
(b) look at the terms in the contract. Does it use the words tenant, lease, demise, etc. The words
    of a contract are indicative of intention though not determinative.
(c) look at the actions and conduct of each party and whether they fit characteristic of lease or
    license; court often finds actions are more important.
(d) look at the number of restrictions and reservations to determine whether there has been in
    fact been a transfer of possession and effective control of the premises (the other side of
    exclusive possession)
(e) nature of business -- how they typically carry out business and contract with one another
(f) look at surrounding circumstances: consistency with the statue and the contract created.
(g) does the person have free use and enjoyment of property?

Note * paras. on p. 378-380.

Lease                                           License
  exclusive possession                             mere permission to occupy land for a very
  free use and enjoyment of property                specific purpose.
  transfer of possession and control from          no transfer of possession, its not an interest in
   landlord to tenant                                land.

In this case, although there were some restrictive provisions, they don‟t go so far as to restrict the
use to just mere occupation of land. The language of the agreement demonstrated lease,
restrictions are not extraordinary, the very nature of their business required exclusive possession.

Addiscombe Garden Estates v. Crabbe
doesn‟t matter what agreement is called have to look at true construction-> intention


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Facts: trustees of tennis club enter into agreement with owners to use and enjoy club for 2 years.
       There were lots of restrictive clauses for repair and maintenance, for letting the grantor
       into inspect and re-enter.

Ratio: have to look at agreement as a whole. Although described as a license, on its true
         construction it created the relationship of landlord and tenant and not licensor and
         licensee.
“Wherever the relationship of landlord and tenant exists there is present the element of
permission or consent on the part of the landlord, and subordination to the landlord‟s title and
rights on the part of the tenant. There must be a reversion in the landlord, the creation of an
estate in the tenant, and a transfer of possession and control of the premises to the tenant”

It‟s a question of intention. Have to ascertain the intention of the parties. The contract was
worded as a lease. The lessees had exclusive possession of a lease subject to certain restrictions
which are no different from restrictions in other leases. No signal of lessor intending to retain any
control
nature of business required them to have exclusive control

Glenwood Lumber Co. v. Phillips
Facts: Govn‟t of Newfoundland had granted a license to the respondent giving him an exclusive
       right of occupation of the land subject to reservations and to a restriction as to its user.

Ratio: the relationship is not a question of words but of substance. If the effect of the
instrument is to give to the holder an exclusive right of occupation, though subject to certain
reservations or to a restriction for which it may be used, it is in law a demise of the land itself.

Shell-Mex and BP Ltd. V. Manchester Garages Ltd. (1971 CA, p. 381)
determined agreement was a license
Facts: Manchester signed license with Shell-Mex to occupy a filling station. The agreement
         provided that Manchester was to occupy the premises for one year and to sell only Shell-
         Mex products. Shell-Mex attempted to terminate agreement pursuant to terms of license
         but Manchester argued that it was in fact a lease.
Issue: license or lease?
Decision: a license
Ratio: court looked at whether agreement was a personal privilege given to a person (a license)
         or whether it was an estate in land transferable to their parties (a lease). Whether an
         agreement is a license or lease depends on the substance of the transaction and not just
         the language used.
court found that these provisions created a license. Provisions required them to sell only Shell-
Mex products, and most importantly, the agreement contained provisions allowing Shell-Mex
employees to enter onto premises at any time.

Reconciliation with BA Oil: free to re-enter in Shell-Mex therefore the control is less and lower
end on the exclusive possession continuum. The intent is also clear in Shell-Mex.

Metro-Matic Services Ltd v. Hulmann (1973 Ont. CA, p. 381)
court found it was a lease, look at terms, actions conduct of parties
Facts: Appellant has business of leasing and operating coin-operated washing machines and
        installed machines in the apartment building. Document in question is the „lease‟
        agreement between the appellant as the tenant and the apartment as landlord. The LL
        wanted to sell and end the relationship with the appellant. The tenant sues the landlord


Property                                                                                          67
        for breach of a lease. The tenants installed the machines for this purpose. The tenant
        wants it to be a lease, the LL wants it to be a licence so the tenants would not have an
        estate in the land. The K itself provided for the “quiet enjoyment” (exclusive possession
        of the tenants) and said words such as „demise‟ and „lease‟ all of which indicates that it
        was a lease, but on the other hand, other provisions detract from the fact that it is a lease
        such as:
            b) spelling out that the tenants have free access to the property indicates that there is
             a licence b/c if it was a lease the tenants would certainly have free access to the
             property
            e) granting access to all other tenants in the building to use the laundry whenever
             they wanted to, which takes away from the exclusivity of a lease.
            The contract was only for a specific purposes regarding the laundry service

For lease: conditions are only restrictions on the possession; the language of “lease”, “demise”
implied the intention of parties; the document was presented to the third party as a lease during
assignment; the third party accepted 2 months rent and is the equitable? Errington v. Errington (p.
385) the LL acted as a LL and tenant relationship. Therefore, he should be estopped from the
action against Metro-matic Services.

Issue: is the agreement a lease or license?
Held: the agreement is a lease
Principles:
Analysis:
o anytime the words “for quiet enjoyment” is used, its evidence of exclusive possession.
o however, there was also a term that said the premises shall only be used for the purpose of
     carrying on the business of the automatic laundry (indication of license)

Ratio: look at terms, actions, conduct of the parties. Though there are restrictions in the lease
       agreement, court analogizes these restrictions to a residential lease stating that it doesn‟t
       make it any less exclusive. None of the covenants result in a relinquishing of control by
       the appellant to the landlord or make it any less exclusive. Courts use this analogy to get
       around the fact that it might be a license.

Note: if court had found that Metro matic agreement was license, maybe could argue that they
had created an equitable interest which would prevail against subsequent legal interest.


More detail analysis:
   Once a lease is found between the parties, CL imposes rights and obligations on the
    relationship. One of them is quiet enjoyment of the land superimposes on the contract
    clauses e.g. “no pet” clause and rent. Covenants that touch and concern the land
    (material covenants) runs with the land and bind the subsequent parties to the land. i.e.
    affect the land as land.
   Statutory provisions on the contract as well.
   Assignees of the tenant and/or LL are both bound by the interest created by the lease.
   The original tenant is still bound by the lease unless LL agreed to relief the tenant.

Residential leaseholds
o residential tenancies are different from commercial tenancies for at least two reasons:
    1. residential tenancy is the tenant‟s home and represents a great deal of emotional
         investment.


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    2. there may be a huge discrepancy in bargaining power
o   that‟s why there‟s regulation to provide additional security for tenure
o   but still there has to be attempt to strike balance b/w protection of LL‟s reversionary interest
    in land, security of tenure of tenant and freedom to contract
o   LL cannot distrain the possession of the tenant if the tenant is behind his rent therefore
    unlike commercial leasehold.

Termination of Leases
Bill 96: the new landlord and tenant act: replaces part 4 of the old act. The landlord and tenant
act regulates the relations of lessors and tenants in the context of both commercial and residential
settings. But part 4 deals only with residential leases. (includes any place used for residential
purposes, any place for receiving long term care, mobile homes, etc.)

-the act is now administered by tribunal and not a court.
s.107: specifies the grounds on which a lessor may terminate a residential tenant‟s lease.

-there are fault and no fault bases for terminating a lease.
-if upon notice the tenant corrects the wrong in question within 7 days, the notice of the
termination is null and void.

Statutory Interpretation
4 steps to terminate:
1. There must be a statutory ground to terminate
2. LL must give notice to tenant indicating the intention to terminate
3. LL must bring application to the Tribunal to terminate
4. The Tribunal could to exercise the overarching discretion in fairness to terminate

For Fault Termination p.409           No fault bases
o not paying rent                     o requires term to come to an end. Tenant is protected
o undue damage                          during term, but after, landlord can do what he wants.
o substantial interference with       o tenant enjoys security of tenure. Entitled right to renew
  other tenants                          If the tenancy comes to it‟s natural end
o overcrowding with risk to              If the LL requires the premises for family or personal
  health standard                          use
o running an illegal business            If the LL has permission to demolish it
o the safety, privilege or interest      If the LL has renovations/repairs to do and can‟t do it
  of any other interest on the             while the tenants are living there
  residential premises has been          Tenant is persistently late on the rent
  seriously impaired by an act or     o examples: landlord is converting apartment to condo
  omission of the tenant              o repairs needed are so extensive its not possible for the
                                        tenant to stay

Note: just because you breach a lease doesn‟t necessarily mean that you will get evicted. . in
order for eviction have to prove:
a) breach of K
b) it‟s a breach based on fault grounds.

Kay v. Parkway Forest Developments (p. 410)
s.107, there must be substantial interference and this depends on facts of case
Facts: tenant lives with son in landlord‟s apartment. A term in the lease stated that they weren‟t
         allowed to keep pets. But tenant had a dog. Lots of other neighbours had dogs as well.


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         Landlord wrote asking to get rid of dog and tenant didn‟t‟ reply so they issued notice of
         early termination.
Issue: is remedy of termination available to landlord?
Held: no termination
Principle:        Definitely a breach of contract but not every breach of a lease will permit a
                  termination of that tenancy. A mere breach of the lease would not constitute to
                  termination. The Landlord and tenant act sets out those circumstances that must
                  be proven before a tenancy agreement can be terminated for cause.

Ratio: in order for a landlord to rely on remedy of early termination, the landlord must prove on
the balance of probabilities that the conduct of the tenant substantially interferes with the
reasonable enjoyment of the premises by the landlord and other tenants.
 What is substantial interference? The determination of substantial interference depends on
     the circumstances of the case including the nature of the conduct complained of, its
     duration, extent and seriousness.
 Is physical interference necessary? Or economic and psychological interference suffice?
 complaints of other tenants have to be taken into account
 the expectations interests of other tenants should be looked at. Were pets allowed by other
     tenants? Against the expectation of the other tenants = substantial interference?
 The remedies available to LL are injunction and damages. But injunction is hard to get
     and damages to the LL is hard to justify and prove.

we must look at facts/circumstances of the case:
o Nature of the conduct: i.e. its duration, extent, and its seriousness

o    Nature of the premises: i.e. whether the nature of the premises specifically made the breach a
     big deal- e.g. Thin walls

o    Complaints: whether other tenants complained

o    What were the reasonable expectations of the tenants when they signed the lease

o    Whether all the tenants signed the lease that forbid dogs/that action as well

o    Note that this case also shows that when other tenants were are also in breach of the K in the
     same way but the LL only went after this specific tenant, the court might have a tendency to
     take side with the tenant. No uniformity among the tenants.

In this case, some tenants were allowed pets and others weren‟t which is unfair.
Note: if you break agreement, though you may not be evicted but LL can still seek damages or
injunction.

M and N Properties v. Ryll (p. 414):
Facts: tenants kept cat and refused to get rid of it even though it was against the tenancy
       agreement which didn‟t allow pets. There‟s info about the tenants‟ poor health and
       financial situation but really isn‟t relevant to the case. Problem in this case is that the
       tenants lied in their documents when creating the tenancy of agreement.
Issue: did the breach of pet clause count as substantial interference so as to warrant early
       termination of lease?
Held: substantial interference found
Ratio:


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    looking at circumstances of the case: tenants lied on numerous occasions about having a pet.
     Import the required of morality into contract.
    no discrimination against them. None of the tenants in the building were allowed pets.
     Substantial interference to maintenance of building.
    Emond: this was a case with a conclusion w/o reasoning to support it.

s.107 -- evicting on the basis that having pets that “substantially interfere with the reasonable
enjoyment of the premises by the LL and other tenants” can still be grounds for eviction
only if the court is satisfied that the tenant is keeping the animal and
o The past behaviour of an animal of that species has substantially interfere with the reasonable
    enjoyment of the premises by the LL and other tenants or;
o presence of the animal causes a serious allergic reaction to any of the tenants or the LL or;
o The presence of an animal of that species is inherently dangerous to the safety of the LL or
    the other tenants.

s.65(1), [previously 61(2)], is similar to s.107. -- „no pets‟ clauses are void, but it provides that a
LL can issue a notice of termination if the tenant has committed an act or omission that
“seriously endangers the safety of another tenant”.

p.419 – 2/3 down: “In the case,.. conduct of the tenants …. lying…” – where is the reasoning?
Avoid!!

Questions on p.420
1. Expectation of tenants that it is a pet-free building because they all sign?
2. Freedom of contract: statue enabled tenants to exploit the LL? LL should be aware of the
    law. Beware of equitable estoppel.

Peel Non profit housing v. McNamara and Cherry (1990 Ont. Dist. Ct., p. 425)
interpretation of s.121 and court‟s discretion to grant eviction
Facts: McNamara fails to disclose Cherry‟s additional income which was a term of the lease
        agreement. Non-profit housing wants to evict them. McNamara is a disabled man who is
        run by his younger partner who eventually left him and the kids. They signed false
        declarations about their income (he was forced to by Cherry on child custody). If Henry
        is evicted, he‟ll have no where to go
Issue: Does LL have right to evict him?
Held: no eviction b/c it would be too harsh a punishment on Henry and his kids
Principles:
How to interpret “it” and “unfair”?
„unfairness‟ stated in s.121 does not just refer to unfairness to the landlord
 s.121(2) [now 82(2)] under any application of a landlord for writ of possession a judge may
     notwithstanding any other provisions of this act or tenancy agreement refuse to grant the
     application unless he is satisfied that under the circumstances it would be unfair.
 Previously, the unfairness must be to the LL because it is about a refusal to grant the
     application.
 unfairness should be looked at with consideration to the impact the refusal to evict would
     have on a) the landlord b) the tenant and c) public interest (to the extent that it is a
     relevant consideration)
 two public interest issues at stake:
     1. general deterrence: if people aren‟t following the income disclosure requirements and
        court allows this, then it will be even more difficult to enforce



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     2. if people are cheating on income requirement, they are cheating more needy people who
        actually require the subsidized housing. So have to consider unfairness wrt to public
        interest, landlord and tenant. Court concluded a minimal impact

Ratio: eviction is disproportionate penalty to Henry. Court has broad discretion to determine
       what is unfair. Court says that it isn‟t really unfair for public (tax payers) because they‟d
       have to subsidize Henry in some other way and not evicting him, doesn‟t hurt profit of
       applicant in anyway

s121 is now s79: situations where court will refuse to grant eviction (the word “serious” was
added to it‟s a tougher test to meet)
 upon any application of a landlord for a writ of possession is a judge may notwithstanding
    any other provision of this Act or the tenancy agreement,
    a) refuse to grant the application unless he is satisfied having regard to all the circumstances
    that it would be unfair to do so

s. 121 is talking about whether it would be unfair to the landlord


Bill 96- s.84 (1) [previously s.79(1)}
Upon an application for evicting, the tribunal may refuse to evict, even if fits into the fault or no-
fault basis, unless it is unfair to refuse to evict (unfair either to the tenant, LL or public).

The addition of the words changed the effects of Peel? The wording is still not specific and the
legislature chose not to be specific. Therefore, this would not change the interpretation of the
court.

Bill 96 -- s.84(2) [previously s.79(2)]
Provides a variety of examples where the tribunal is required to refuse to allow the LL to evict if:
a) if landlord is in serious breach of the LL‟s responsibilities under this or any other act
b) if the reason the application is brought is b/c a tenant complained to a governmental
     authority about the LL‟s violation of health, safety, housing or maintenance standards (i.e.
     revenge)
c) If the reason for the application being brought is that the tenant has attempted to secure or
     enforce her legal rights (i.e. revenge)
d) If the reason for the application being brought is that the tenant is a member of a tenant
     union (i.e. revenge)
e) If the reason for the application being brought is that the unit has children in it and it is not
     overcrowded (finally find its way into the Act).


CAN A TENANT TERMINATE A TENANCY?
A tenant can terminate his tenancy in two ways
1) After the tenancy period he can decide not to renew the tenancy
2) During the tenancy in a few very specific circumstances:
        a) Assignment: Giving T2 the exact same interest as T1
        b) Sub-letting: giving T2 less than the interest T1 maintains. (If T1 sublets to T2, then
            T1 becomes the LL of T2, but is still the tenant of the original LL, so that if T2 does
            anything against the lease then T1 is still liable unless T1 has been released from her
            K with the LL)



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        c) Tenant can also terminate if the LL unfairly refuses to allow the tenant to sub-
           let or assign

Priorities at Common law
-transferor cannot confer on a transferee a tilte that is greater than that held by the transferor
-In property law, transferee needs to ensure that the title being conveyed is the same as that which
the transferor purports to be able to convey.
Statute of Frauds: transfer of legal interest in land must be in writing. But there are two exception
of 1. Tenancy (which may be created orally). Has to be greater than 3 years otherwise won‟t
enjoy priority??? 2. adverse possession




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Week 10 (8 Mar. 2004)

p. 433 -- 457, p. 481 -- 493


Gifts

Personal property:
1. Chose in possession (actually possess) – transfer has to comply with the CL requirements
2. chose in action (right to an action) -- transfer needed to comply with requirements in the
    statues.


Transferring real property through gift: The Conveyance Act and the Statute of Frauds says that
real property (land) has to be transferred by written document. with the exception of:
1. tenancy, which can be created orally, however if the tenancy is longer than 3 years it needs
      to be written, and
2. adverse possession

Transfer by deed: no consideration.

Transferring personal property through gift: no such requirement that it needs to be written.
In order to transfer personal property thru. gift, common laws required the donee to prove:
1)    Intent to give
2)    Delivery (constructive, symbolic, or actual) from donor to donee
3)    Intent to receive, i.e. acceptance – this is usu. presumed when the gift is of certain values
      unless evidence suggest otherwise.

 gift of real or personal property can be made by a deed of gift, a document in writing that is
  sealed and delivered and almost always signed by donor.

Personal property can be transferred by
1. Contract
2. Deed
3. Gifts: inter vivos (only problem in this course) and wills

Cochrane v. Moore (1890 CA, p. 436)
leading case on requirement of delivery and use of trust
Facts: Horse owned by B. B states an attempted gift to Moore for 25% of horse. Subsequently,
        Cochrane lent money to B and B promises to pay note to Cochrane. But in attempt to
        repay debt to C, B promises to give him a bunch of horses including the one he promised
        to Moore. There is a letter from B to Yates expressing his intent to give to Moore but
        subsequently sells horse to Cochrane who has knowledge of gift to M and actually says
        “he‟ll take care of it” (this was the key fact that led to a finding of a trust). Moore had
        no knowledge of the sale and argues that there was no actual delivery of the horse and
        therefore no gift
Issue: Was there a gift to Moore? Was the ¼ part of horse able to meet „delivery‟ requirement
        of gift?
Held: Actual delivery is required – no gift but there was constructive trust.
Ratio: Delivery is an essential requirement for a valid oral gift of Chattels, and that there was
        no such delivery here.


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TRUST Argument (court solve the problem with equity)
 Yet ct awarded Moore ¼ of the value of the horse and ordered Cochrane to be a trustee for
   Moore's interest.
 Ct does not indicate how we can deliver quarter of a horse. So, in this respect the case is not
   helpful. Ct decided that we don‟t have to discuss whether 1/4 of a horse is delivered b/c
   there was a CONSTRUCTIVE TRUST (in order to have a valid gift, there must be
   delivery, but in order to have a trust, no delivery required).
 The trust arose when Cochrane said “It‟ll be okay” b/c by saying that he made himself the
   trustee and Moore is the beneficiary of 1/4 of the horse. So, Cochrane becomes the legal
   holder and Moore the equittable beneficiary and so when Cochrance sells the horse Moore
   will get his $. This is exactly what Moore wanted to establish and did.
 Promissory note was void as not truly stating the consideration for which it was given.
 One may construe this case as equity being used to perfect an imperfect gift?
 Escher (p. 441): Physical delivery is not just evidence of a legal gift, it is a requirement for a
   legal gift. Devliery is an evidence to intent to give. There could be no strong evidecne of
   the intent. Delivery is the very essence of the gift itself – at the core of the gift. It is one of
   the facts to be proved. A letter is not adequate – it is not a contract, deed, or a will.

NOTES : Trusts and gifts are separate, and in this case ct decided that it would be better to fit the
promise into a trust. And there is no need to consider whether the gift was valid. This decision
gives rise to the question, why must delivery be essential to a validate an oral gift? The
requirement of actual delivery provides clear evidence of the donor's intent.

Another possible argument?
Ie: the letter was constructive delivery. But Moore had no knowledge of the letter, which might
have been a problem. Did letter represent symbolic delivery? These arguments would probably
fail.


Policy Reasons for Maintaining Delivery as a requirement for an oral gift:
    Provides clear evidence of the donor's intent to give the gift.
    Protect property of the indl against ill founded and fraudulent claims of gift
    Coercion on the donor – what if the donor died? Puff statements? Rely on conducts rather
     than words.
    Donor may change his/her mind.
    Donor has proper title? Affect the interests of some third party.
    Court believe in the business transaction and becomes suspicious about gifts in the socety.

What exactly constitutes delivery? Where is this from?
1) actual delivery
2) constructive delivery: providing someone with access to the property in question ie: give
   keys to safety deposit (provided one set of keys only).
3) Symbolic ie: some ceremony


Trusts
1.     Express Trust (p.443)
o trustee has an equitable duty to the beneficiary and the duty is enforeceable against the
    subsequent purchaser.



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o    To create a trust:
     1. normally execute a deed of trust
     2. defining the property that is to and from the trust,
     3. identifying the trustee and beneficiary and specifying the trustee‟s duties.
o    there must be:
     1. intention to create the trust
     2. the subject matter of the trust
     3. and the objects of the trust.

2.       Resulting Trust (p.445)
o    arises when there is a transfer of property without an intention to create a gift (that is, there
     is delivery and no intention to gift) in a resulting trust
o    the recipient of the propety holds it in trust for the transferor.
o    might also ariese when one person purchases property in the name of another without
     intending to make a gift

But equity would not perfect an imperfect gift (p. 445). Therefore, it is either to argue for a gift
(delivery was done) or aruge that a trust was resulted. DO NOT argue that equity makes the gifts
perfect.

Constructive Trust (p.445)
 to ensure a just result in cases where a person without tilte to property has made a significant
   contriution to acquiring or maintaining it, thus preventing unjust enrichment of thet tilte
   holder.
 ie: in case of cohabiting couples where one party has made significant contributions w/rt to
   money, labour to propert so that it would be unjust not to recognize an interest on the part of
   the non title holder. In that case title holer is constructive trustee and person who made
   contribtuion is the beneficiary.

Irons v. Smallhorse: there must have been a deed of gift or actual delivery by donor
Winter v. Winter:
P put into actual possession of barge by his father and worked as father‟s agent when father gave
it to him by word

Rawlinson v. Mort (p.450)
gift of church organ. Symbolic delivery is ok. Donor put his hand on itin the presence of donor
accompanied with words of gift

Re Cole (1964 CA, p. 447)
if gift is something that doesn‟t lead itself to delivery, look for change in use
How far does the rule of delivery take us?
Facts: involves purported gift of furniture from husband to wife. Husband says “its all yours”
          subsequently he goes bankrupt. The husband owes money to creditors and they want his
          personal stuff. He says that he gave the furniture in his house to his wife as a gift when
          the wife moved into the new house. The husband was known to be very sophisticated
          and use deed/documents to transfer the ownership of homes/chattel to his wife, but in this
          instance he doesn‟t -- he said „it‟s all yours” to his wife as a gesture of a gift. Note that
          the wife handles the furniture and uses it, but so does the husband.

1.   Intent to give: “it‟s all yours”, matrimonial home, she touched the articles
2.   Intent to receive: presumed!


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3.   Delivery (a change of possession): insurance was with the husband, live together in the
     house, no change to the furniture, wife just used it, husband was well-advised and had
     transferred property thru. deed.

Issue: does it fulfill the requirements of gift? What more has to be done to complete the gift?

Held: the court finds that it fulfilled 2 requirements (intent to give and receive). But the
      requirement of delivery is up for debate as how can one deliver bulky goods to a person
      who lives in the same house? The court concludes it doesn‟t meet the requirements for
      delivery because there was no change in use or change in control to conclude that there
      had been a delivery, so there was no delivery.

Ratio: when the nature of the gift doesn‟t lead itself to delivery, look for a change in the use
        or control instead to conclude that there has been delivery
Note:
1. Other reasons for the decision: the gifts were given out by husband in order to defraud
    creditors.
2. we think that this case is badly decided because what more could the wife have done to show
    delivery (change in use or control)? It seems like the judge was wrong. One way he may
    have showed it was a gift is to prove trust instead of delivery (i.e. the husband was a trustee
    of the furniture for his wife).

Kilpin v. Ratley (p.452) – hard facts make bad law? Is there a change of possession in this case?
Because the father did not live in the house? Therefore, the daughter got title instead of son-in-
law?

The conduct that constitutes delivery must not be equivocal (p.453)

Smith v. smith: where couple living in same house and owner expresses himself as making a gift
of the chattels to the other party, the words of gift operate without further physical delivery to
transfer the possession for title. (rejected in Re cole)

Problem on p.456
Delivery? Touch? Can be delivered? No change in the control, use, maintenance or insurance of
the piano. The intent to give was withdrawn at a later stage. Rawlinson – symbolic delivery
where the subject matter is not easily delivered.

The transfer or delivery of access could constitute the delivery of gift. E.g. delivery of keys to
safety box provided that there is only one set of key.


TRANSFERRING INETERSTS IN LAND (p.481)



PRIORITIES AND REGISTRATION

PRIORITIES
There will often be a number of proprietary interests in relation to chattel or land in existence at
the same time. Establishing the priority of these interests is important to figuring out whose
interest prevails.


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We need to look at priority principles when there are 2 interests on a single piece of land that are
inconsistent. (e.g. The purchaser thinks that he has the title to the land, or is it a prior interest
holder than ha the title?)

RULE: THE PRIOR INTEREST ALMOST ALWAYS PREVAILS, with exceptions.

1ST INTEREST 2ND INTEREST                PRIORITY RULE SAYS:
Legal              Legal                 prior prevails
Equitable          Equitable             prior prevails, but only if the equities are equal (i.e. if there
                                         is no defraud)
Legal              Equitable             Prior prevails
Equitable          Legal                 Prior prevails. But if the purchaser is a 1) bona fide
                                         purchaser 2) for value 3) without notice of the prior
                                         interest, then the subsequent interest prevails.


REGISTRATION ACT
When either party registers, it also helps us to figure out which interest prevails.

Registry Act Rule: The FIRST TO BE REGISTERED is the prevailing interest
Exception: this rule only applies to those legal interests that arise by way of document (i.e. legal
interests that arise by way of document - so that interests that arise by different ways, like AP, or
prescriptive easements, this rule doesn‟t apply)

1st interest                   2nd interest                 PRIORITY RULE SAYS
Adverse possession (legal      Legal title which is         Prior interests prevails because the
interest)                      registered (legal            registry act doesn‟t apply to AP b/c AP is
                               interest)                    incapable of being registered. Which is
                                                            why its so important to have your land
                                                            surveyed!
Oral contract and part         Property sold to a           The registered title will defeat the prior
performance. Courts            purchaser who registers      interest
might construe this as an      the title (legal)
equitable interest
Unregistered legal             Registered (legal)           Registered defeats the unregistered.

Note: registration doesn‟t make a document anymore valid in a deeds registration system. Torrens
system is different.


Conveyances and Contracts for sale

Steps in a real estate transaction
1. vendor and purchaser sign an agreement of purchaser and sale. Purchaser gives a deposit as
    consideration for the agreement. Agreement must be specific enough that parties know what
    is to be done. This gives rise to certain equitable interests.
2. conveyance of legal title usually followed by registration. Vendor makes up deed and
    registers the deed.



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3.   transfer of legal title is known as the closing. This is where vendor delivers the deed and the
     purchaser registers the deed.

The P&S (purchase & sale) contract does not change the legal title of property. The purchaser
has an equitable interest (beneficial title) in the property – the vendor has a duty to fulfill the
transaction as per the agreement. After the agreement, the property is the responsibility of the
purchaser – therefore insurance. Closing essential transfer the legal title.


Requirements of the Statute of Frauds
 transfer of legal estate occurs at closing, as long as the statutory requirements have been met.
 the creation of a freehold estate must be in writing and signed by the parties.
 failure to meet these requirements would result in an estate only.
 leases for period of less than 3 years need not be in writing (exception)
 leases are void unless made by deed.
 though purchaser may not have legal interest in land between signing of agreement and
   closing, equitable principles have developed to protect vendor and purchaser in relation to
   agreement.
 Exception: adverse possession creates an interest in the property without a written legal
   instrument
 Exception: easement -- equity would enforce an oral agreement with part performance.

Transfer of real property (Lysaght)
 There must be a contract – the K does not affect the legal title that still remains with the
    vendor.
 There is a closing specified in the K
 K creates an equitable interest to the purchaser -- ensure that the specific performance of the
    K, i.e. closes the deal as per K and convey the title to the purchaser.
 Vendor becomes the trustee of the purchaser, title held in trust for the benefits of the
    purchaser.
 Vendor also has a lien for the property for the outstanding amount of money from the
    purchaser in the K – security for money.
 Vendor as the legal owner has the right to possess the property but has to respect the
    equitable interests of the beneficiary; need to maintain and behave as a reasonable owner
    who holds the benefits of the purchaser.

Aside: the person who signed the contract would be held personally liable for the K even his right
was assigned to someone else.

Purchaser (equitable interest) should register the K as equity prevails legal title except for a bona
fide purchaser for value without notice of the equitable interests.

Lysaght v. Edwards (1876 Ch.D, p. 483)
content requirements for contract of purchase and sale/ rights or vendor and purchaser
Facts: vendor, Edwards entered into agreement to sell his interests in land to Lysaght.
        Purchaser paid deposit and they agree on closing date. They had agreed on all details
        before closing date. Vendor dies and purchaser brought an application for specific
        performance against vendor‟s heirs.

Issue: what was the effect of the contract for sale?


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Ratio: two interests are created at the time of the K: purchaser has equitable title, and vendor has
       legal title at time of the K
Need 3 things to create a valid K (to make the K binding on both parties):
1. K sufficiently specific in form and substance so that there is no ground for setting it aside
    as between V and P;
2. Vendor must be able to transfer title.
3. In writing (statute of frauds)


Note: purchaser plans to buy Blackacre but there‟s an adverse possessor on the property.
      Therefore, vendor can‟t convey to purchaser what is offered. Purchaser can either accept
      what vendor can give, or renegotiate an offer to buy. Usually, what happens is contract
      completed with reduction in price for the loss of the adversely possessed land. That‟s
      why it is so important to investigate, do survey before entering into a sale.


Rights of each party between K of sale and closing

                           Before K                  K                        Conveyance
Law                        Vendor (fee simple)       Vendor (fee simple)      Purchaser (fee
                                                                              simple)
Equity                     Vendor (fee simple)       Purchaser (fee           Purchaser (fee
                                                     simple)                  simple)

p.485

Assume a closing period of 9 months. $ of property increase during the period and vendor
refuses to convey. Purchaser sues for specific performance or damages at trial. The $ of the
property increases during the trial. The damages is calculated at the end of trial since that‟s the
time when the court has the chance to assess specific performance or damages.

Semelhago v. Paramadevan (1996 SCR, p.486)
equitable interests and the remedy of specific performance
Facts: vendor reneged on agreement for sale of home because of rising prices in the house
        market.: parties enter into agreement, there‟s a contract. Had contract for 225,000 (P1),
        but sold it to another (P2) for 250,000.
Issue: What are respective rights of parties?
Ratio: there‟s equitable interest here, so under doctrine of specific performance, force the vendor
        to transfer title (Ontario CA). Sopinka at SCC noted in obiter that not all land is unique.
        i.e: if a subdivision of homes and looked the same as every other house on the block.
        Thus, may not afford specific performance. In this case, appropriate to use date of trial to
        assess the purchaser‟s loss in this case. Sopinka: should treat real property as a personal
        property, then the use traditional contract remedies i.e. plaint. needs to mitigate. This was
        mentioned in Kelly Douglas v. Highway case. Contract law finds its way into property

Property for $250,000. very short closing. What are purchasers‟ rights:
 equitable interest P1
 equitable and legal interest for P2

P1 prevails UNLESS P2 is a bona fide purchasers for value without notice.
 protect P1 by registering the agreement because that gives the world notice.


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What if vendor refuses to close?
fights are generally w/rt to whether contracts are specific enough. These days, vendors don‟t
want to sell because prices keep going up. They will be forced to sell unless they can find
something in contract to void it. So really important to draft contracts carefully.

Walsh v. Lonsdale (1882 CA, p.488)
equitable interest prevails over legal in this case
Great case because: Came right after the fusion of equity and common law

Facts: There was a K (agreement to a lease, not a lease) that specified that rent was payable in
       advance of each period. Therefore, distinguished from Lysaght. The rent was based on
       the number of looms operating in the property which could not be pre-determined. At the
       signing of the agreement, tenant gains equitable interest, but the lease was not actually
       entered into. Parties never executed deed of the lease.

Then at sometime in the future, the tenant instead 1) possessed the land, and 2) pays the rent (at
the end of every year). The factual situation creates a lease -- a periodic legal lease through
factual situation. The LL proceeds against the tenant to distrain against the tenant (i.e. seize all of
the tenants property and sell it to pay for the rent), but the tenant says „I am not in breach b/c I
pay at the end of every year according to the lease‟.

Issue: Since the tenant first got an equitable interest b/c of the K and then gets a legal interest
       through the actions - in order to find out which terms prevail we need to find out – does
       equity or legal prevail?

Decision:        First, the court found that K is enforceable because sufficient certainty of terms.
Second, the court found that equity prevails (b/c of priority rules and the 2nd interest isn‟t a bona
fide purchaser), and as a result he is supposed to pay at the beginning of each month. But since
distress (claim furniture) is a legal remedy to the LL; therefore, it is not applicable in equity.

Ratio:
 If a person 1) goes into possession, and 2) pays the rent; then a periodic lease arises (legal
    interest)
 If a person obtains equitable interest through a K to enter into a lease and later obtains a
    legal interest through actions (possession and rent), the equitable interest prevails and as
    such the terms of the K prevail.

The agreement to enter into a lease as good as the lease itself? Need to look at the certainty of the
agreement. The agreement is an agreement for specific performance – behaviour may fall short.
A lease prevails over the whole world. The agreement in equity would not enforce against bona
fide purchaser for value without notice.




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Week 11 (15 Mar. 2004)

p. 533 -- 546, p. 555 -- 570
Small group: 558-559,568-570, 562

Transfer personal property: deed, gift, contract, and will
Transfer of land: writing – statue of Fraud

Non-Possessory Interests in Land: Easements, covenants, profit a prendre

Limit the ways a possessor owner to use the land.
Why there are 3 ways?
Why not just a single law of burden or servitude?
Bear in mind public regulations, when does it become insensible to have these burden prescribed
in private law?

Profit a prendre
 A proprietary right not a contractual right; therefore, a right attached to the land and binds
   subsequent owners as well.
 entitle a holder of this non-possessory interest to enter onto the land of another to extract
   some part of the natural produce, such as timber, crops, turf, soil, etc.
 similar to a license, since both permit the use of another‟s land for defined purposes.
   However a profit a prendre is not revocable in the sense of a license which is generally
   terminable at any time upon reasonable notice (p. 535).
 Aboriginals have the right to take produce from the land – worth to be protected by the court?
   No, because it is usfactory and sui generis. The rationale is that the right is unique and
   should not be treated the same. Court worries that the recognition would over burden the
   land because of the perpetuity of the burden and reduce the value of the land.

Easement
 an arrangement or a right annexed to land to utilize other land of different ownership in a
   particular manner (not involving the taking of any part of the natural produce of that land or
   of any part of its soil) or to prevent the owner of the other land from utilizing his land in a
   particular manner)
 Licence is contractual (less). Easement is a property interests. What is the nature of the grant?

Gypsum Carrier Inc v. The Queen (p. 537)
Distinguish licence from easement, need to demonstrate intention to create an easement
Facts: ocean freighter owned by Gypsum crashes into bridge owned and constructed by the
       govt. Bridge used only by railway companies to connect their properties on the 2 sides.
       Gypsum held liable to repair the bridge for the government. Railway companies made
       claims for their expenses in rerouting their trains during the bridge closure. Gypsum
       argued that no damage was caused to any property owned by the railway companies or to
       any property in which they had a proprietary interest. Railway companies argued that
       they had an easement; not a merely contractual right to use the bridge.
Issue: has contract given rise to a right to land or easement?
Held: no easement
Ratio: the documents „superficially‟ contained the so-called essentials of an easement. But
       intention of the parties must be ascertained. Court found that when the agreements are
       read as a whole, there was no intention to create easements but rather a purpose to



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        create certain contractual rights whereby the railways were permitted to run their trains
        over the bridge and approaches. No intention to create any rights annexed to land, or nay
        interest in land.

What would you have to do to create an easement?
Call it an easement. In Gypsum, the parties did not say they were creating an easement. There
was no intent to create a right in the land. If they had intended to, they would have used words
such as easement.

Emond: But one can argue that the 4 requirements are satisfied in Gypsum. Court said
expression (of form) is more important than the conduct of the parties that substantiates the
relationship. 5th requirement of clear intention to create an easement.

The 4 requirements for Creating an Easement
1. There must be a dominant tenement (enjoys the benefit of the easement) and a servient
    tenement (that is burdened).
     Well-accepted requirement in Canada and U.K
     This requirement eliminate easement in gross: in U.S allowed easements in gross --
       possible for someone who does not hold an interest in adjoining land to have an easement
       over a servient tenement.
     Easement in gross allows trucking companies to use rest area along the side of the
       highway. They want a long-term property interest. But there is no 2 pieces of land.
     Easement must be a relationship with 2 parcels of land. One over which the easement is
       exercised and one in favour of which the easement is created.

     Akroyd v. Smith (1850 p. 539)
     doesn‟t meet first requirement that easement must be for the specific benefit of dominant
     tenement
     Facts: P‟s predecessor in title had entered into an agreement to permit the defendant‟s
             predecessor in title to use a road to cross the plaintiff‟s land.
     Issue: was this a license or an easement?
      problem: the contract says that the right is for the benefit of owners and occupiers of land
        B and to “all persons having occasion to resort thereto.” Therefore, it wasn‟t just a right
        for land B. It was for the benefit of all persons who many wish to use it and may have
        nothing to do with land B.
      the right of way was a license because it may have conferred a right on those other than
        the owner of the dominant tenement.
      Therefore, Akroyd does not meet requirement #1 (also cited for proposition that an
        easement must accommodate the dominant tenement).
      Court is reluctant to increase burden the land forever – unless the easement is
        abandoned (p. 540 *)

2.   Easement must accommodate the dominant tenement (the most difficult aspect)
      the right confers benefit upon the dominant tenement and not merely some purely
       personal advantage upon the dominant owner. The criterion of benefits rests ultimately
       upon whether the right in question makes the dominant tenement “a better and more
       convenient property.” In other words an easement must accommodate not persons but
       land – connection between the benefits and the land.
      What is qualified as accommodation? Benefits land as land or for other purposes?
       Benefits = increase the value of land but not determinative. Benefits land as land and not


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       to the owner – but the benefits have to relate to the use of land e.g. park and residential
       area. If just normality is used to judge, court is bound to increase the burden on the land.

    Re Ellenborough Park (1956, p. 542)
    the easement „accommodates‟ the dominant tenement and is not just a personal benefit.
    Facts: there were a number of houses in a square with a garden (Ellenborough Park) in the
            centre. The houses were close to but not adjacent to the part. The park served as
            garden of the houses. Title to the garden was vested in the trustees and each of the
            owners of the houses around the garden paid a proportionate cost of maintaining the
            garden. Only those who resided in the houses were entitled to use the garden or
            park. The owner of the park wanted to sell the land.

    Issue: do they have an enforceable right in respect to use and enjoyment of Ellenborough
           park? Did the park significantly connected to or annexed to the houses? To
           validate this right, there had to be an easement.

    Held: the right to use the garden or park conferred a benefit on the dominant tenement and
          not merely a personal advantage to the dominant owner.

    Ratio: the park was a communal garden for the benefit and enjoyment of those whose
           houses adjoined it or were in its close proximity. The park was like a backyard of
           the houses.

    What if some owners have no interest to use the park? Benefits the owner -- therefore a
    personal right. No contractual obligation to the new owner.

    Hill v. Tupper (p. 543)
    granting easement is a value judgment
    Facts: owner of land adjoining a canal was granted the exclusive right to let boats out for
             hire on the canal. He tried to restrain another neighbour from doing the same thing.
             The dominant owner was the land used in connection with boating operations and
             the servient was the body of water with the canal.
    Held: no easement
    Ratio: the situation is no difference from the case of Ellenborough park (in that the canal is
             a benefit to the land, there is a connection between the two)
     but courts didn‟t want to grant an easement because the plaintiff was really trying to set
       up an monopoly under the guise of an easement (communal purpose is worthy of
       protection but economic interest does not?)
     Courts argument: the business advantage had no connection with the ordinary use of his
       land
     easement has to benefit the land as land rather than particular activities for which the
       dominant tenement owner is using; i.e: a garden actually benefits the land but boating
       doesn‟t. Parks seen to have connection land as land.
     Benefits depend on the preference or expectation of the owner.
     Emond: recreation is ok, but business and monopolies aren‟t: no real reason why
       easement can‟t serve business as it does residential.
     element of a value judgment. Some things deserve protection while others don‟t.
     Court is reluctant to increase the burden on the land.




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     Jengle v. Keetch (p. 545)
     Facts: 3 adjoining land. B had easement over A and C only had access to the land by water
             only. C wanted an easement over A and B. A refused to grant easement to C. C
             then leased a parking lot in B and started driving over A.
     Held: no easement
     Ratio: The easement did not benefit the dominant tenement B but benefits C. Therefore,
             there was no easement. Rigid application of the requirements.

Note: Court would look at scope of easement as restriction (Birch Island case)

3.   the dominant and servient tenements cannot be both owned and occupied by the same
     person.
      possible to have easement in landlord/tenant relationship even though both parcels of land
        owned by landlord

4.   the easement must be capable of forming the subject matter of a grant
      Easement is a non-possessory interest so it cannot be created by a transfer of possession.
        There is a need for a grant. The grant recognizes the need for benefits connected to land.
        A grant that grant right to an individual a right over land is in gross and fails this criterion.
      A contract can anticipate a grant
      Some have considered this right both obscure and unhelpful
      Factors affecting fourth requirement:
        o The rights claimed were too vague, need to be precise, not too novel interest
        o The rights claimed amounted to a claim to joint occupation of the park or would
             have substantially deprived the owners of proprietorship or legal possession and
        o The rights claimed were ones of mere recreation and amusement and were not of
             utility and benefit.
        o There has to be a grantor/grantee, it cannot require the servient owner to spend
             money.

Legal Easements (p. 555)
1. arise by way of grant; or
2. by reservation: easement reserved in favour of the retained land. In reservation, the
    reservation of easement has to be expressed. Because if easement was implied, the court
    allows the grantor to derogate from the grant which says the land is not encumbered.

3.   express grant: passing of title in which the title includes a grant of easement over servient
     land; or
4.   implied grant. For example: I own property and subsequently divide the property into two.
     A and B. but there‟s a driveway on B that owner always uses to get to A. but owner then
     sells property A to someone. The owner makes no mention of this driveway or „quasi
     easement‟. But the easement is a necessary, obvious advantage that goes with lot A. The
     courts will imply a grant or easement as part of the conveyance.
5.   Prescriptive easements: very similar to the doctrine of adverse possession: at the end of 10
     years, Limitation Act bars the cause of action that the true owner would have had. Same
     thing happens with regard to easements. Time period is 20 years. It must be open, must be
     continuous. This must be the presumption of a grant. Understanding is that one would have
     used this right of way pursuant to a type of grant. There is a presumed grant. It‟s a
     presumption based on long standing use.
6.   Easements can also be created by statute esp. in relation to public utilities



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Equitable Easements
 there was no express easement, but they still found easement. Found government
    representations that they would provide a ramp. They were oral representations and letters.
    There was reliance on it. And there was part performance.
    1. Representation
    2. Part performance
    3. Reliance

These give rise to equitable easement. And it is not by grant.


The Creation and Transfer of Easements
 Easements generally created by way of grant or reservation. In case of grant, vendor sells
    part of a larger parcel of land to a purchaser, granting purchaser right of way over land
    retained by vendor for example.

Hill v. Attorney General of Nova Scotia (1997 p. 555)
doctrine of part performance-> equitable easement
Facts: appellants claim entitlement to compensation as result of provincial expropriation of an
         easement. Province expropriated farm land then owed by appellant‟s father to construct
         highway. It cut his land into two parts, north and south. Government created ramps from
         the north to the south. Subsequently, highway expanded again, but the access ramps were
         abolished. Equitable easement because an oral agreement with part performance. No
         legal instrument; therefore no a case of Statue of Fraud.
Issue: was there an easement?
Held: there was an easement
Ratio: government made representations orally and through letters permitting him to cross
         highway with cattle and equipment. Hill relied on these representations and did so to his
         detriment. The crown intended it to be used and it was used for over 27 years.
Thus the factors: representation, part performance and reliance were met to create an
                       equitable easement

Implied grants: necessity, common intention and Non-Derogation
 One may not derogation from grant – even though not express, the grantor cannot take away
    interests from the grant which are normally expected in the grant. The easement would be
    implied. Cannot purport to take back from the grant.
 Exception: easement of necessity has been recognized where a parcel of land has been
    transferred and is completely landlocked and without access, so long as there is adjoining
    land retained by the vendor over which an easement can be created. But what is considered
    inaccessible?
 Ziff: an easement of strict necessity will arise in favour of land that is landlocked at the time
    of the transfer, provided that there is some land retained by the grantor over which this
    access can be exercised.

Hirtle v. Ernst (1991, p. 556)
easement of necessity
Facts: applicant purchased parcel of land bounded on 3 sides by Big Mushamush Lake and on
        the fourth side by neighbouring parcel of land, without access to a roadway. Applicant




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        purchased land knowing it was landlocked and even tried to purchase a right of way.
        Wanted to build a home but it would be difficult to get all the materials needed by water.

History of the properties was important in this case. Land isn‟t very valuable because there‟s no
access to the road. But the only way to find an implied easement is to prove that the land was
at one point held in common ownership. In this case went back to 1857, when land was
divided between two brothers, stating that an easement of necessity had been created at that
time. Looked at the development history and go to implied easement.

Ratio: An easement will be implied when:
       1. The land should be able to be used. Do things to make the land more valuable.
       2. although there can be no right of way of necessity where there is an alternative
           inconvenient means of access, the requirement of an absolute necessity has been
           relaxed to a rule of practical necessity
       3. Water access: is there a right to access the water. Is the water navigable?

Held: This case meets all 3 requirements and therefore, an implied easement is found

Wong v. Beaumont (p.)
common intention
 In addition to easements of necessity, implied easements may be created by the common
   intention of the parties, taking into account the purpose for which land has been granted.
 Implied easement existed with respect to the construction of a ventilation duct in a restaurant
   because it was required by public health regulations. Even though the landlord objected to
   the tenant‟s need for the ventilation duct, the court held that the tenant was entitled to have it
   constructed since the landlord knew of the tenant‟s intended use of the premises as a
   restaurant when the lease was signed
 Ratio: implied easement can arise out of common intention. Where the intention for an
   easement can be construed from the actions/terms of lease (ie: intention to set up restaurant)
 Difference b/w intention and necessity is really hard to distinguish. Ziff: Wong is not a case
   of necessity since the premises could have been used for purposes other than a
   restaurant, in which case the ventilation duct would not have been needed. Rationale for an
   implied easement based on common intention is the vendor‟s obligation of non derogation.
   That is, “ it would have amounted to a derogation from the grant not to recognize the
   easement over part of the property retained.”

General Principle: thou shalt not derogate grant: court will not imply easement in favour of
grantor, but there are exceptions

Principle of Wheeldon v. Burrows (p. 560)
Thou shall not derogate from grant; you must reserve expressly
 Courts will not imply an easement in favour of the grantor and will not imply a reservation of
    an easement. But they will do it for grantee. However, there are exceptions:
    1. necessity: the same principle dealing with in context of implied grants.
    2. reciprocal easements: easement of support (the wall of the houses that‟s shared); each
        enjoying each other easement equally.
    3. simultaneous conveyance (closely related) of the two properties; all treated equally, the
        second conveyance would not need reservation.
 easements may be implied in the above exception




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   a vendor who holds a parcel of land, and who uses a path across one section to gain access to
    another, may create an implied easement at the time of a transfer of one section to a
    purchaser. Division of the parcel of common ownership and transfer to a purchaser
    creates an implied easement. Situation prior to division and transfer sometimes called a
    quasi easement.
   for Wheeldon principle to be attracted the quasi easement must be in use at the date of the
    transfer. Furthermore, it must be reasonably necessary for the enjoyment of the property
    and/or be continuous and apparent.
   well established that Wheeldon rule doesn‟t apply to reservations

Barton v. Raine (p. 560)
intention and implied reservation of easements
Facts: vendor owned two adjoining city lots with a mutual driveway between them. Conveyed
        one lot to his son and daughter-in-law (reciprocal, implied because it is obvious at the
        time of grant and existed prior to the grant; s.15 Property Act – benefits and enjoyment
        that can be reasonably included in the land should be included). The son and his family
        had been living in the adjoining home for over a decade before the transfer of title, and
        had used the driveway mutually with father. Mutual driveway isn‟t stated in the sale.
        After transfer, both families continued to use the mutual driveway. Property line was
        drawn in such a way that both needed access to the driveway to get out. When the
        property was transferred to 2 different owners, dispute over right to use driveway. Son
        received the easement. When sell to strangers, Raine receives easement from son, but
        Barton didn‟t get it from the father.
Issue: was there an implied easement of reservation for the father? Why would one property
        get the easement and other not because of sequence of conveyance?
Held: implied easement of reservation based on common intention
        Prinicples: registration of title doesn‟t defeat grant because grant did not arise in a way
        that could be defeated by registration.

       Sandom v. Webb: LL argued that implied term in the lease where there is an implied
       easement allowing the LL to put up signs. In order to find an easement based on common
       intention, there had to be affirmative evidence admitting of no alternative possibilities
       of the parties‟ intention (3rd para. p. 560). High burden standard.
Ratio: intended easements may arise by implied reservation, though it has been suggested that
       this implication will less readily be drawn in the case of a reservation because to do so
       goes against the notion that the vendor not be permitted to derogate from the grant by
       impliedly imposing an easement on the land that has been sold.

Barton lowered the requirement from Sandom and could be inferred from constructive evidence
of the circumstances.
A common intention can be inferred from the parties (p. 560 bottom to p. 561). A 4 th exception?
This may well be an exception.

Anything in the grant that limits the scope of the easement: words, circumstances that existed at
the time (court is ready to modify the scope based on changes in society but not ready to increase
the number of people enjoying the easement).

Prescriptive Easements
 the rights to an easement may emerge out of continuous use, under the rules for prescription
 an easement was granted at some time in the past, as evidenced by long, uninterrupted use.



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   doctrine protects reliance on, and enjoyment of, long-held unchallenged rights.
   courts very careful when applying this, because it could punish neighbourly behaviour

Prescription                                      Adverse Possession
 applies to non possessory rights so it can be    in most jurisdictions adverse possession
   supported by acts amounting to far lower          serves to extinguish the right of action of
   degree of control required to make out a          the true owner and pretty much leads to
   squatter‟s claim.                                 usurpation of that owner by the squatter.
 involves the acquisition of a right that         require evidence of a much higher degree
   encumbers some other landowner‟s interest         of control.
   and may limit further use of the servient       10 years
   tenement                                        Determine the point of time when
 Determine when the action is brought, then         possession first occurred, then go forward
   look back the immediate 20 years prior to         to see the possession. Doesn‟t matter what
   the action (backward). What happened              happened after.
   before doesn‟t matter.
 There is 1 grace year prior to the action;
   therefore, need use as-of-right for the last
   19 years.
 Oral permission: after one year becomes
   as-of-right
 The use and enjoyment is pursuant to the
   permission.

Common law has devised 2 methods of acquisition through prescription and a third has been
added by statute.
1. based on claim of use extending back to time immemorial (1189). After 20 years a
    presumption arises that the grant was ancient. Can‟t really use this in Canada
2. Doctrine of lost modern grant: prescriptive right can emerge out of continuous use for a
    specified period; normally 20 years.
3. Common law also reflected in legislation. Must have been continuous 20 year period of use
    under Ontario statute. The 20 year period is measured from the time you bring action and
    goes backwards. But have one year grace period.

How to kill off an easement: either agree to it or abandon it. Abandonment is an indication of
intention.

Phipps v. Pears (p.)
definition of +ve and -ve easements
Facts: There were two houses side-by-side and D tore down his house to build a new one, but
         the other house relied on D‟s house as support for the house and to protect it from the
         weather since it was not weatherproof

P argues that D‟s house is its support and if not, it is there as protection from weather for P‟s
house

Issue: are there easements that allow you to stop servient tenement owner from doing something
       on their land such as stopping them from taking down wall for protection from weather?

Held: no negative easement



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Ratio:
o courts reluctant to create new negative easements
o there are two kinds of easements:
    1. +ve easement: gives the owner of land a right to do something on or to his neighbour‟s
       land
    2. -ve easement: such as right of light that gives him right to stop his neighbour doing
       something on neighbour‟s own land.
       o in order to protect such a right, have to contract with neighbour and make a
            covenant. i.e, there is no right to a view.

Rationale:
o would unduly restrict neighbour in his enjoyment of his own land.
o would hamper legitimate development. In this case if you had stopped him from pulling
    down wall, would have prevented him from making legitimate improvements.
o there is no such thing as an easement to be protected from weather.
o in this case claimant tries to argue that its an easement of right of support which Denning
    says is a positive easement. But it wasn‟t really case of support as walls weren‟t even
    touching. And it clearly wasn‟t obvious. One owner had no idea that the other was relying
    on it for protection




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Week 12 (22 Mar. 2004)
p. 570 -- 595, p. 631 -- 642

Covenants

   must arise from a contract
   create non-possessory interest or control on land, bind subsequent owners
   contrast with public control (zoning by-law, overall plans, subdivision control); usu. these are
    guidelines; building codes as well.
   covenant is private control
   combination of land law and contract law.
   there are two principles: privity of estate and privity of contract
   common owner who sells adjacent lot to purchaser with a covenant so that the purchaser
    would not excess the building height.
   covenantee is the person who benefits (~ dominant tenement), covenantor is the person who
    bears the burden (~ servient tenement)
   covenantor sells the land to assignee and/or covenantee sells the land to assignee – the
    covenant does not bind the assignee(s), ∵ not the original parties to the covenant.
   Legal analysis then equity analysis

Privity of Contract            Privity of estate
 may enforce rights            a relationship of tenure b/w the parties which in modern law
    under contract                 only exists between landlord (lessor) and tenant (lessee)
    (damages or equity)            relationship (after abolishing tenure)
 generally a matter of         need to distinguish assignment (assign remaining interests to
    freehold estates               the assignee) and sub-lease (sub-let and intent to return)
 ie: purchaser and             If the lessor assigns the reversion or the lessee assigns the term
    vendor or lessor and           of the lease, privity of estate will exist between the following:
    lessee                         1. an assignee of the lessor and the original lesee
                                   2. an assignee of the lessee and the original lessor
                                   3. the assignees of the lessor and lessee
                                   no privity of estate b/w lessor and sublessee
                                the obligations do not bind sub-tenant but landlord enforces
                                   obligation thru. the lessee by contract.

What covenants would run with the land and bind assignees (leasehold)?
Those touch and concern the land runs with the land. Therefore, personal obligation will not
bind subsequent assignee and both benefits and burden runs with the land.
 if neither privity of K or privity of estate exist a covenant is not enforceable, subject to 2
    exceptions:
   1. in equity, the benefit and the burden of a restrictive covenant
   2. at law, the benefit, although not the burden of a positive or negative covenant that
        touches and concerns the land can run with an estate in the land.

ANALYSIS ON LAW

1. Leasehold interests
 if the tenant had actually sublet and not assigned. Then there is NO privity of estate. A has
    privity of estate with B and A has privity of estate with C when he sublease to him.



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   Spencer‟s Case: both the benefit and burden of covenants that touch and concern the land
    passed to the assignee of leasehold estates. To determine whether something touches and
    concerns you have to look at whether it affects lessor as lessor and tenant as tenant.

2. Freehold Covenants
 enforced by privity of K; does not enjoy privity of estate
 burden at law is not enforceable; only the benefits that touches and concerns would run with
    the land at law (continues to enjoy the benefit)
 assignee of the covenantee can enforce the covenant against the covenantor but not the
    assignee of the covenantor
 GENERAL PRINCIPLE: the benefit of a covenant that touches and concerns the land runs
    with the land but not the burden. Benefit held by covenantee, and if covenant affects land in
    some fundamental way, then the covenant runs and assignee can enforce the contract against
    convenantor even with no privity of contract.


ANALYSIS ON EQUITY (FREEHOLD)

   Adopts the rigid rules from the law and prevent injustice
   Covenantor (burden) and covenantee (benefits) both assigned; at law the assignee of
    covenantor could escape the obligation.
   Equity says burdens still runs (Tulk v. Moxhay) – even no privity between the assignees but
    purchaser with notice.
   In what circumstances the covenant runs in freehold?
   The person acquired the land had notice of the burden, an equity created on the covenantee
    and/or his assignee and the assignee of the covenantor has the legal title. Legal title says no
    burden runs, but the equity says the equitable interests prevail unless the purchaser is bona
    fide without notice.


BACK TO LAW (FREEHOLD)
General principle – benefits runs but not the burden

For benefit to run in the assignment of a freehold at law:
1. the covenantee (and his assignee) must have legal interest in land
2. the assignee of the covenantee must have the same legal interest in land as the original
     covenantee or the assignor (Emond thinks this is too tough)
3. the benefit must touch and concern the land. Kind of like the situation in Ellenborough
     Park for it to affect “land as land”. The benefits enhance the land as land.

Note:
Smith and Snipes v. River Douglas (p. 578*)
Ratio: the covenantor need not own land

   Legal principles make no distinction between positive and negative covenants.

The Burden of the Covenant
 burden of a covenant relating to land cannot pass at law.(Keppell v. Bailey)




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Austerberry v. Corporation of Oldham (p.580)
burdens do not run at law for freeholds. Didn‟t meet 3rd requirements for benefit to run
Facts: There was a covenant to maintain and build road. Elliott is the covenantee and trustee is
        the covenantor. The two original covenanting parties sell their freehold land to others
        (Elliott to Austerberry and Trustees to town of Oldham). Now there are two parties who
        do not enjoy privity of K.
Issue: Can Austerberry enforce the covenant against Oldham even though there‟s no privity of
        K? Do the burdens and benefits run?
Held: no, the burden does not run with the land
Reasoning: the only way A can enforce the covenant is if the burden and the benefit runs with the
land. Legal benefit can only run if fulfills 3 requirements:
1. Legal interest: yes b/c freehold estate
2. Same interest: yes b/c sold the same freehold interest
3. The court found that the benefit did not touch and concern the land b/c there was no
     obvious connection b/w that property and the road since the roads were for the general
     benefit of the neighborhood (p. 581 *).
Therefore the legal benefit did not run, and as such A couldn‟t enforce the covenant.
The court also said that even if the legal benefit had run, the general rule is that a legal burden
does not run -- so A would still not be able to enforce the covenant.
Ratio:
o The 3 requirements for benefits to run
o The general legal principle says that a legal burden does not run with the land


Policy reasons as to why burdens should not run:
1. it will burden and encumber the land. It becomes less alienable b/c who‟s going to want to
     buy something burdened with so many obligations? Spend money and derive no benefit?
     One of the objectives of property law is to encourage the alienability of land.
2. makes land less alienable
3. perpetuity problem. Interest in land forever until the parties have agreed not to or abandoned
     this particular interest in land. This would have a dramatic impact on value.
4. notice. People would have no notice of the covenant before they bought property. There
     was a problem of notice in past but now there‟s registry so its fine now.

Reasons why burdens should be upheld
1. to prevent windfall. If burden doesn‟t run, O buys land at discount and then sells it and
    makes money because the land goes up in value when the burden doesn‟t hold. There‟s a
    windfall.
2. sometimes spending money on a piece of land might actually increase the value of the land
    (i.e maintaining gardens)  argument against the encumbering argument


Exceptions to burden at law to run by:
1. Statue
2. rent charges: pay a nominal amount to enable the enforcement of positive covenants.
3. enter into chain of personal covenants. Therefore privity of contract is maintained.
  o Vendor and purchaser hold covenant. Purchaser can require a similar covenant from
       subsequent buyers. Purchaser will do so because he will remain liable to the vendor for
       any breach of covenant, even after the subsequent resale, by reason of privity of contract.
       Vendor can sue original purchaser for breach and original purchaser can in turn sue the
       transferee. The chain is only as strong as the weak of the link – not a good option.


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   o    term in contract requires anyone who sells enter into that chain. As a term of that
        covenant, only if parties do what they contracted them to do. This is fine until there is a
        broken link.

4. Principle of Halsall v. Brizell (1957):
acceptance of a benefit may entail a related burden  can only be used in cases where
covenantor gets a benefit and a burden (reciprocal burdens)
o person who claims the benefit of a deed must also take it subject to the burdens. It will
     operate only if there is a benefit to be claimed under the deed, and further, it will operate
     only so long as the assignee of the covenantor continues to claim that benefit.
o Burden runs with land if there is reciprocal benefit.

Tito v. Waddell (1977):
application of the Halsall v. Brizell principle. Exception to idea that burden cannot run at law
Facts: Mining company has the burden to restore the land and the residents on the island enjoys
        the benefits. The mining company sold mine to present owner just before finished
        mining and the new company said no obligation to restore.
Issue: could the covenant be enforced by subsequent owners?
Held: covenant upheld. Burden to be enforced.
Ratio: can‟t take benefit (even not encapsulated in covenant) of the right to mine without
        accepting the burden. Court accepted this is an application of Halsall -- broad
        interpretation.

Government Insurance Office v. K.A. Reed Services Pty Ltd (1988, p. 585 *)
rejects application of Halsall v. Brizell
Facts: A (builder of an office tower) enters into covenant with neighbouring building B
         regarding height of building and windows. Subsequently A sells to C and B sells to D.
         Attempted to enforce against assignee of convenantor.
Issue: can covenant be enforced based on principle of Halsall?
Ratio: Court refused to do so because its based on an “illusory foundation”. The rationale for
         not permitting burdens to run with land was set out in Keppel Bailey  shouldn‟t
         encumber land. Have deleterious effect on alienability of land. This is the case which
         invites the statues to be reviewed regarding servitude on land.

Under what circumstances for a court to make law? And make it prospective to the future?
Logical development of Halsall and step back in Govt. Insurance? 2 lines of authority and which
one is more persuasive?

Policy: p. 579

Note: Covenants like this actually enhance the value of land! Americans do land use planning on
private agreement. No land use control in Texas. These covenants are meant to increase the
value of land. Restrict people from doing things to reduce value of land surrounding them.
Keppel v. Bailey: rationale is becoming suspect.


BACK TO EQUITY (FREEHOLD)

Tulk v. Moxhay
breakthrough case that allows burden to run. Main requirement is notice to assignee of
covenantor (Note Ellenborough Park easement)


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Successive at equity – created an equity for the convenantee by the notice and enforce equity
on the convenantor. The equity is a proprietary right in the land and binds the subsequent
owners of the land provided that they have notice of the benefits of the covenantee.
Facts: Tulk owned gardens and houses in Leicester Square. Conveyed the garden and square to
        Elms and his heirs. Covenant in deed to Elms and his heirs and said that they would
        maintain the square and the statue and not put up any buildings. Years later garden
        conveyed to Moxhay and heirs. Conveyance didn‟t include covenant but Moxhay was
        informed of the covenant when deed was conveyed to him but he intended to cut down
        trees and put up a building anyways. Tulk brought an application for an injunction to
        prevent him from doing so.
Issue: Can the covenant between the original covenantee and the assigned covenantor run?
        There‟s no issue as to whether the benefit runs. The question is can the burden run?
Held: Burden runs with land.
Ratio: decision in extended the enforceability of the burden of covenants in equity, beyond
        privity of contract and privity of estate. However, in order for the burden to run in
        equity, it is subject to certain requirements (p. 593):
    1. notice to assignee of the covenantor  the covenant won‟t be enforceable if the
        assignee is a bona fide purchaser for value without notice. “If an equity is attached to the
        property by the owner, no one purchasing with notice of that equity can stand in a
        different situation from the party from whom he purchased.”
    2. covenant must be negative  rationale: courts do not have the institutional competence
        to oversee the project, prohibition is easier to interpret. It was argued that the covenant in
        question was hybrid (maintain the park [+ve] and don‟t build anything [-ve]) but the
        essence of it was negative because it was designed to prevent them from building on it
        o Determination of –ve or +ve: form not important; what is important is the true nature
            of the duties that are imposed on the covenantor. i.e.: a covenant may be stated in
            positive terms, but the true nature of it might be negative (restrict the use of land).
        o Not to build was upheld but not the maintenance of the park.
    3. covenantee must retain land benefited by the covenant.
        o It is important for the covenantor and assignees of the covenantor to be able to identify
            precisely which lands are benefited by a covenant for purposes of both litigation and
            the negotiation of discharges of covenants.

Note: In Tulk, there is none of the exceptions to the common law rule of no running burdens- i.e.
no chain, and no reciprocal covenants. But the court found that since M knew that when he
purchased the land that the previous owner had a burden, and now M wants to develop the land
and the house prices will go down b/c the purchasers bought their houses at a higher price b/c it
was by a park -- the court found the situation particular egregious. So the court used equity to
enforce a running burden onto M.

    After Tulk v. Moxhay: these two requirements were added:
    4. a covenant that touches and concerns the land and not merely a personal covenant.
    5. intention on the part of the covenantor to bind successors and not just the covenantor
        personally. The intention can be found in the covenant.

Policy rationale for enforcing covenants
1. enforcement of long standing covenants give business efficacy to longstanding arrangements
2. argument against Keppell argument. Covenants may actually enhance alienability since they
     operate to protect the amenities of neighbourhoods and the competitiveness of businesses
3. system of land registration in Canada means that there should be no problem ascertaining
     what covenants may bind successors in title to the covenantor.


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Benefits in equity
Why would you care about whether benefits run in equity when they already in law?
1. if assignee only has an equitable interest (beneficial) in land then legal principles won‟t be
    available.
2. if equity was used to enforce burden then benefits must comply with the equitable rules for a
    benefit to run.

Equitable rules of Requirements
1. touch and concern
2. demonstrate entitlement to benefit
   a. covenant was annexed to the land –either expressly or impliedly and thus passed with
        the conveyance of the interest in land. Annexation of a covenant occurs when a deed
        expressly provides that a covenant is for the benefit of an identified parcel of land.
        Implied annexation possible too, but less likely.
   b. An expressed assignment of the benefits to the assignee on top of the transfer of land. .
   c. Creation of a development or building scheme.

Law: benefits, then burden (not allowed therefore turn to equity); freehold: no privity of estate
Equity: Burden, benefits


Concurrent Interests and “Family” Property

Four types of concurrent interests:
a) joint tenancy
b) tenancy in common
c) tenancy by the entireties
d) co-parcenary

note: the word tenant here is completely different from the use of this word wrt to leasehold estate

How are joint tenancy or tenany-in-common created? P. 634 * -- “jointly” suggested joint tenant
but “equal shares” suggested tenancy-in-common.

Use 2 lenses to analyse:
CL – prefers JT. Joint tenancy have the right of survivorship. E.g. “grant Acre to X in fee
simple to the use of…” X can be a group of people in joint tenancy. Advantage to own jointly to
avoid tax or expenses purposes. But to sell it, all joint tenants have to agree to sell. Tenancy-in-
common can sell the shares separately.
Equity – prefers TiC because not to create a lottery on who dies first
Statue – prefers equity

Must clearly express joint tenancy and not TiC otherwise use statue to interpret and equity
preferred.

McEwen v. Ewers and Ferguson (1946 Ont. HCJ, p.634)
where there is a doubt as to whether its TiC or JT, will consider is a TiC
Facts: “jointly and should they decide to sell the said property each of them is to have an equal
       share of the proceeds of the sale”; one of the daughters dies and the other sister sells the


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       whole property. The major consequence here is that, if it had been a joint tenancy, then
       Bertha‟s interest was extinguished upon her death and she had no interest in lot 18 that
       could be devised by will (in her will, she left her part of the property to her brother)
Issue: was is a joint tenancy or tenancy in common?
Ratio: where there is a doubt as to whether the property is held in joint tenancy or tenancy in
       common, the courts will construe it as a tenancy in common.
The courts look at the words in the will to discern intent:


Joint tenancy                                                               Tenancy in common
   Right of survivorship                                                   only unity of possession
   considered more simply/more efficient/convenient especially in
    the context of title searching.                                            interest in an
   often the easier way to deal with things within a marital situation-        undivided share of the
    just goes to the surviving partner                                          whole though cannot
   corporations by statute can also hold in JC, if one dissolves it goes       locate the exact share
    to the other.                                                               b/c of unity of
                                                                                possession enjoyed by
   if the joint tenants die at the same time, or its unclear who died          all tenants in common.
    first they will be deemed to have held a TiC (Ontario succession
    law reform act)
   Four unities
    a) unity of possession
    b) unity of interest (each joint tenant has an interest in the whole
         property)
    c) unity of title
    d) unity of time

   JT have a unified in interest in the whole land
   the four unities mean that JT must have interests of the same
    quality and duration; they must derive them through the same title
    documents and their interests must commence at the same time.
   meeting these four requirements are not determinative. Also have
    to look at the language adopted by testator

CL prefers JT because they are efficient and convenient in terms of title searching.
Equity favours TiC because of faireness. (this is now a statute s.13 of the conveyancing and law
of property act)-> preference for TinC.

When to use joint tenancy
    married people do it for simplicity.
    one in which client intends to leave property to his children. Client has 3 children. Might be
     appropriate when all 4 have joint interest in property. Transfer at the death of testator.
    children pursuant , might do it for tax reasons. Under joint tenancy wouldn‟t pay taxes.
     (land transfer taxes – stamp duty?)
Campbell and soverign securities.: preference to a tenancy in common, does not apply to
agreement of purchase and sale. Wife received full interest in this case




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Week 13 (29 Mar. 2004)

Left over from last Tues.
    Common law prefers JT because of consolidation of ownership -- simpler
    But equity prefers TiC (p.641)
    Statue prefers TiC but exempts trustee and executor (have legal title on behalf of the
     others). b/c if one of the executors dies, the title is consolidated by JT.
    Unusual feature of the Statue: under a will, A & B hold title as JT but hold shares as TiC in
     accordance with the prescription in will.
    Go to Campbell (p. 642): K of purchase and sale is ambiguous; therefore, turn to statue
     which prefers TiC (p. 641). But there is a contract but no conveyance – does the statue
     applies? Held: statue not applicable. But equity says contract and conveyance are the same


p. 644 -- 684

Severance of Joint Tenancies

Williams v. Hensman: 3 ways – either one can sever a joint tenancy (p.644)

1.   One of the JT operates upon his own may create a severance – breaks a unity. (Williams).
     o If 3 JT, C convey to D, A+B holds TiC with D but hold as JT between them?
     o e.g. by conveyance, or mortgage but not a will (b/c if one of the JT‟s mortgage their
       share then they convey the title of the house to the bank) – completely inconsistent with
       the idea of JT and unity.
     o A „mere encumberance‟ such as an easement or leasehold agreement may not suffice
     o NOTE: if it is family property being severed both sides have to give permission to the
       conveyance/mortgage-Family Statute

2.    A JT may be severed by mutual agreement b/w the JT. (Williams)
      2 ways under this rule:
      (a) Mutual agreements in the form of a registerable deed suffice.
      (b) Negotiations (even if not successful) can also suffice but only when it shows mutual
           intent to sever it:
      show intent to severe the JT/change the status quo/ clear from the negotiations that
         they regarded themselves as TiC (e.g. interests had been severed and all that was at
         issue was the price of the interest) (Watson – divorced husband murdered).
      However, if the parties accept the same situation after the negotiations as before (i.e
         JT)- and no change in the status quo- then negotiations do not sever a JT (Morgan --
         divorced husband died)

3)   any course of dealing sufficient to intimate that the interest of all were mutually treated as a
     TiC (Williams) common intent to sever
     o i.e. conduct by one of the parties from which an intention to severe can be inferred.
     o Keep in mind the act should but irrevocable (p.647 bottom); or
     o Act disqualify or estopp a JT to claim a right of survivorship (p. 647)
     o A will is not a course of dealing to sever because a will is revocable.
     o Course of dealing is a manifestation of the mutual intent like mutual statement and a
        will is unilateral
     o A negotiation is revocable; therefore, not course of dealings.
     o Judgment in favour of creditors does not sever but the execution of the judgment does.


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Caselaw dealing with severance:

Robichaud v. Watson (1983, p.646):
negotiations of divorce sufficient intent for severance
Facts: separation/divorce in which the couple were JT. The lawyers were carrying on
        negotiations to settle what the wife‟s claim for her share of the value of the house was.
        An agreement wasn‟t reached b/c could not agree merely on the price- the parties
        however were clear that they wanted severance and regarded themselves as TinC.
Issue: is negotiations enough to severe a JT, even if not successful?
Held: Yes, the JT was severed into a TinC
Ratio:
o Unsuccessful negotiations are enough to severe a JT, if it is clear from the negotiations that
    they regarded themselves as TinC (eg. interests severed and only price was at issue) --
    (what are the arguments for this outcome?)
o courts argued that the parties had made a CLEAR agreement to sever. The only matter at
    issue was the amount to be paid for the interest

Morgan v. Davis (1984, p. 646)
divorce negotiations not enough to sever JT
Facts: very similar to Robichaud. Divorce negotiations. The divorce decree was silent with
        respect to property settlement. There was simply an offer, and an unreasonable
        counteroffer, but no agreement.
Issue: are negotiations enough to sever a JT ?
Held: No, since there was simply an offer, and an unreasonable counteroffer, but no agreement
        at all -- the parties accept the situation after = before the negotiations (i.e. JT)-no change
        in the status quo.
Ratio:
o if the parties accept no change in the status quo- then negotiations do not sever a JT.
o no real support for this argument?
o court concludes that documents never addressed the fact that no agreement, therefore no TiC

What happens when one joint tenant murders another? use of constructive trust (p. 647)
o right of survivorship vests in surviving tenant (Schobelt v. Barber p. 648)
o But use device of constructive trust to impose on the surviving JT -- the obligation of a
   trustee to hold the property in trust for the heirs of the deceased JT.
o Heirs become beneficiary of the trust.
o Policy: one should not benefit from their own wrongdoing.
o Argument against this: they are charged and convicted, so they are already punished. There
   are criminal and civil remedies, so is there really a need to punish them in a third way,
   through the right of survivorship?


Severance in a “Family” Context

Knowlton v. Bartlett (1984, p. 649)
a person may convey to themselves in order to severe the JT
Facts: property was JT b/w wife and husband. Wife left the marriage. Sometime later the wife
       executed a deed from herself to herself and then in her will gave her share of the land to
       her brother Knowlton. The brother says that she conveyed to herself and thus severed the



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        JT making it a TinC, and thus he is allowed to have ½ of the land, while the husband says
        that there is still a JT which was not severed by the conveyance and thus he is entitled to
        the land after her death.
Issue: Can a conveyance from a JT to herself sever the JT?
Principles:
o JT can be severed by mutual consent, by conduct of parties from which an intention to sever
    can be inferred. JT may also be severed by the act of one of the JTs (Williams).
o P. 650 & 651 s23(3) (NB) and s42 (Ont.) are different.

Held: a person may convey to himself in order to sever the JT. In practical terms this only
       allows the person to give their property to anyone in their will -- won‟t really allow them
       to sell the property from underneath the other. Title derives from the conveyance
       therefore, sever the JT (p. 651).
Ratio: a person may convey to themselves in order to severe the JT. Break unity in title and
       time.

Policy Argument- should you be allowed to sever JT w/out the others‟ notice or consent?
Goals of Legislation: to promote fairness, protect the underdog, allow freedom to contract with
people as you choose.
o B.C. statue requires first advice the JT and then consent from the JT.
o if not dealing with family homestead then one should have the right to do what she/he wants
     and should not be required to get the other‟s consent.
o Analogous to not letting couple divorce without a consent
o But violate the expectation of a JT. But expectation changes with time.
o in the interest of family relations you should give the family member notice at least -- even if
     convey to herself they should advise the other side that severance has occurred.
o The notice could worsen an already sour relationship

Family Property Statues (p. 653)
o In conveyance, need vendor‟s affidavit saying the property is not a matrimonial home and
    have the vendor‟s partner to sign a consent to sell.
o Family property statutes often prohibit disposition of an interest in property by one party
    w/o others‟ consent b/c concerned that the idiot in the relationship mortgaged his part of the
    property and then legal title  mortgagee; and if the mortage is never paid, then there is the
    potential the mortgagee can seize the property b/c the idiot didn‟t pay off the mortgage.
    family property statute that does not allow selling JT property w/o consent is not allowed.
o Without consent, disposition (mortgage or conveyance) is void.
o BUT convey property to yourself sever the JT is OK. A disposition merely to sever joint
    tenancy is OK. On the other hand, a mortgage w/o consent of another is void.


Rights and Obligations of Co-Owners: General Principles (p.654)
Unity of possession: means that each co-owner is entitled along with all other co-owners to
possession of the whole of the land.
Co-owners entitled to possess the whole property; therefore, there is no adverse disposition.

Accounting principles, Statute of Anne, when a co owner has to pay another
1) A Co-owner in possession has ousted the other – concept extended to constructive
    exclusion (a husband would be required to pay the wife rent if she was forced to leave due to
    abuse; Dennis v. McDonald); occupation rent is payable to the non-occupying co-owner



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2)   co-owners have made an agreement regarding occupation & occupation rent with shared
     expenses (this is in common law rule)
3)   the circumstances require the co-owner in possession be regarded as agent for the non-
     occupying co-owners; ~ an agreement
4)   The Statute of Anne -- a co-owner in possession was required to pay benefits to other co-
     owners a proportioned share, if the co-owner in possession receive a benefit from a 3rd party
     (e.g. sublet a room, sale of produce) more than a just share with expenses deducted.

     “An action for accounting may be brought by a JT or TiC against a co-tenant for
     receiving more than the co-tenant‟s just share”


Termination of Concurrent Interests (p. 656)
Partition Act: can sell and divide the proceeds. Court has the discretion to postpone the partition
or the sale.

Court prefers partition (Cook). But may not be practical as required municipal to create another
lots, e.g. lots are too small to divide.
Then no choice but go for sale. But would not sell if REAL hardship is created.
What is a real hardship? Knowlton

Cook v. Johnston ( 1970, p. 656)
partition is preferable unless partition would cause undue prejudice to one of the parties
Facts: The appellants contended that the remedy should be sale rather than partition. Deals with
        a piece of land in cottage country.
Issue: what does the court prefer?
Held: The court prefers to partition, but they recognize that in lots of circumstances partition is
        not the best choice (b/c municipal by-laws prohibiting it, or better to sell the property).
        Cooks got the piece of land with the cottage on it and the Johnston got the other half.

Knowlton v. Bartlett (1984, p. 658)
courts have power to refuse grant for partition if it causes undue hardship
Facts: property doesn‟t lend itself to partition. Wife and husband own property as JT. Husband
        awarded custody of kids and was residing in the house. Argument was made by husband
        that this created hardship for his children and himself and request for partition/sale should
        be refused.
Issue: when should the court order the property to be sold and proceeds split?
Held: No sale.
Ratio:
o a co-owner has a prima facie right to sell/sever his property
o but court can refuse an application to sell and divide the proceeds if imposes hardship onto
    the occupying co-owner if sold, or imposes hardship on the non-occupying owner if not
    allowed to sell.
o Each case must be looked at in light of its particular circumstances- look at both sides,
    balance of hardship test
    1) the sale and division of proceeds create a hardship for the occupier  no sale
         One of the parties occupying the house is a dependant child
         The resident is old and plans to live out her life there
         Long occupation time -- 30year
         Circumstances surrounding the acquisition of the property (eg. given by their
           mother, in family for many years)


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        Note: improvement to property treated differently

    2) the sale and division of proceeds create a hardship for the non-occupier  sale
        May be the best offer price that they‟ll ever get
        Could deflate the price of the house if they don‟t sell now
        If the applicant really needs the money


History/study of legislative reforms concerning Family Property (p. 660)

PAST:
o Tangible property becomes husband‟s and earning belongs to husband (p.662)
o much worse for women, especially when they married -- as they gave all their property rights
   to their husband.
o Dower right (CL doctrine): entitled women to get 1/3 life estate in all property which her
   husband owned/seised during their marriage or proceeds or produce from the property. So if
   husband dies, even if property sold to someone else, wife was entitled to it. As a result
   people would not buy property unless it was dower-barred. Also to avoid dower, men often
   acquired property through the use of equity so that they were not seised of the land.
o During life time, the right is inchoate – waiting to happen at the death of husband
o Purpose: to protect wife who husband decease – promoter(?) doctrine where all husband‟s
   property passed to the oldest son.
o Wife involve in the transaction of the property or claiming on the right of dower –
   affect the transaction today.

NOW:
o What is the value of dower today?
o Life of male: 78, female: 84 years. But dower won‟t kick in until death of husband.
  Therefore, the present value is low but still exist.
o Statue is more beneficial than dower.
o But dower has been replaced and has been changed via legislative reform (p.665):
o applies emergency relief for women, allowed women to have property, allowed women to
  have control over their earnings, and promoted equality.
o Equalization provision of the Family Property Act is an example of these equalizing statutes.
o Provision, appears to be good/equalize b/c it requires the equalization of property, but
  women generally have a harder time b/c equalization doesn‟t really mean equalize -- so what
  do we do about this?
o equalization provisions appear attractive b/c requires them to equalize assets upon
  dissolution of the relationship. Following dissolution, not withstanding equalization
  provisions of the statute, women have a much more difficult time economically than men.
o if equalization doesn‟t really equalize situation, should something else be done?
o equalizes actually ruins each. The capacity of each separate unit to function is less than what
  could‟ve been done together. The capacity of women to survive in this situation is a lot less.
o take into account age.
o Allows alienation of respective property
o women‟s job at home, raising kids, not recognized as labour. Economic labour vs. private
  labour. How should this be recognized?
o Statue is more beneficial than dower.




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Murdoch v. Murdoch (1975, p. 668)
Contribution is merely a contribution from a regular ranch wife
Dissent: Laskin – constructive trust and they were partner and it was like a business.

Pettkus v. Becker (p. 670)
Statue for married couple but what about co-habiting couples?
Should be treated as if married, court held on constructive trust – the legal title held by the male
has a constructive trust benefiting the female. Here, male refused to pay, female commit suicide
because of non-payment.

Family Law Act – ensure the people to move forward separately. Is division of property a point
from which the people would be treated and progress separately?
(p. 670 bottom) – include Pension Benefits
What is property? Caratun

Caratun v. Caratun (1992, p. 672)
professional licence is not property but this doesn‟t coincide with the equalization principle
Facts: Mrs. Caratun took a shitty job, and paid for her husband‟s MD study. 2 days after
        becoming a doctor, he rejected Mrs. Caratun as his wife. At the time, the family assets
        were next to nothing, but his future earnings was substantial.
Issue: Is property defined broadly enough to include a professional licence (lawyer/med)? Does
        this fit with the equalization principle in Family Property Act?
Held: No, professional licence is not property subject to the division at divorce.
Ratio: Licence is not property b/c:
         non-transferable/inalienable; unique to a person  it can‟t be property (v. traditional)
         even if assumed the licence is a property, it doesn‟t have tangible value but the
            practice does. And the profit derived from the licence requires much future effort
            and is somewhat uncertain. The idea in Family Property Act is to add to value of the
            properties of the persons and then divide.
         But what about the recognition of a professional licence in a mortgage?

But note that this doesn‟t fit with the equalization principle in the Family Act:
o the purpose of the legislation is fairness/equalization, reimbursement
o but wife put money into him and got nothing out of it
o have to figure out how to reimburse her (is it just simple reimbursement for out-of pocket
    expenses or it is opportunity costs as well?)

p. 676
1. Compare with Victoria Park – both cases took very traditional approach; concern about
    extending the definition of novel property and creates uncertainty; fear of the unknown led
    to an answer “no”; both ignore the contribution (labour) and expectation of the party; the
    differences in competition between parties
2. How should a couple organize their properties? How to address the individual inequity when
    they breakup? How to redefine property to address the inequity? – treat partnership as an
    economic unit. Holds the professional licence in trust for her and she has a beneficial interest
    for a certain period of time. Co-ownership analogy, she has an interest in the licence but not
    from the effect he spent on the practice after divorce, he ousted her and notes the obligations
    in a co-owner.
3. If property describes relationship, what is the appropriate relationship between the parties as
    in Caratun?



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4. Analogy to business partnership? Anticipate profit from the premium and breakup of a
   partnership – provisions cater for these. Can this be used in Caratun?

Solution (p. 681):
o drawing an analogy b/w marriage and a business partnership.
o In the Business Act, upon dissolution of the partnership they pay off debts and split the
    profit.
o And if one party pays a premium to enter the partnership and is unable to get a return on
    his premium (b/c partnership cut short) –then that party will get all/some of the premium if
    she is not responsible for the dissolution
o analogize this to a marriage -- one side pays a premium (e.g. puts husband through school)
o if the marriage is cut short and she doesn‟t receive on her premium as a result- then she
    should get her premium back if she didn‟t cause the divorce- just like in a business
    partnership.
o In addition when determining the price of a practice, assess the price of the tangible assets
    and goodwill (human potential and capacity of the organization based on its reputation to
    earn money in the future), so may be goodwill should be allowed in marriages as well.
o While this goes against the marriage act, this does look fairer.
o the analogy has its problems: business partnership (for profit) and marriage (not for profit).
o Social ideas of encouraging break up of marriage vs. breakup of partnership. The living
    standards of women after separation usually do not improve.

Just ignore what aspect of law it should fall into; just keep the goal and equality in mind and
legislate for the goal.


Charles Reich Article: The New Property (p. 741)
  What are the sources of wealth today? What is wealth today?
  more of our wealth takes form of rights or status rather than tangible goods today. Ie: our
   professions more valuable than house.
  for unemployed, their status as governmentally assisted may be their main thing of value
  A job is wealth, their pension, licence to drive of a driver
  Old age security, EI – govt. wealth to citizen
  Evolution of forms of property as more things are qualified as property.
  But has to call wealth a property. What is the aim of qualifying the job, old age pension, or
   social assistance as property? What does that give to the recipient?
  They get a bundle of rights with property. But oust the definition of alienability as a personal
   situation. The right also comes with procedural safeguard; therefore, cannot take away
   without due process (Epstein)
  Downside: calling property would invoke the courts to look at it closely but court may not be
   able to handle the issue e.g. aboriginal rights and tough to recognize novely.
  Why change definition rather than legislate? Due process could be inefficient and expensive.
   With limited resources in society, the resources could be spent on the due process rather than
   on the benefits.
  So what is the problem and the what should be the solution?
  Problem: distribution of wealth in the society to prevent internal exile; respect; empowerment;
   dignity, potential. But what role does property play? A very crude instrument with
   undesirable by-products.
  May restrict govt. environmental law enforcement.




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There are four tenancies:
        a) term: lease agreement sets out term of tenancy
        b) periodic tenancy: defined by time of period by which your rent is paid. Ie: weekly rent,
weekly tenancy.
        c) tenancies at will: owner giving you permission to use property. Once you start paying,
it becomes a periodic tenancy. Moment you pay converts tenancy at will into periodic. It could
also happen that owner wants to end it. and if he says it's over then the arrangement dissolves
        d) tenancy at sufferance: moment proceed against you, known as tenancy of suffereance

For exam: 1.5 minutes per mark
-look at the legal dimensions stuff
-answer the question exactly as it is asked of you
-don‟t need to cite too much




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