Before you trust this outline, you should know ... - UVic...

Howell – 108B – Property Final Outline

Before you trust this outline, you should know a few things so that you can make an informed decision about whether to use it…

1. I created this outline using my class notes and the Thomson and Ferguson (Keith’s Notes) outlines.

2. I chose to keep this outline minimal to help with the memorization process. You may want more information, and I wish you the best of luck with memorizing more!

3. I attended almost all classes during the year, and received notes from classmates for any missed classes.

4. I generally have a good memory.

5. I received an A minus on the mid-term exam and an A minus on the final exam.

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PROPERTY IN GENERAL

How do we know what is recognized as property and what its scope is?- Matter of policy – eg. Canadian policy allows us to buy, sell, and own land- Decisions are made by either legislature or courts

How can proprietary interests be held?- In Rem - The legal recognition that you have exclusive rights to the enjoyment of

something against all the world- In Personem – a contractual agreement to the use of a property by a person- Bailment – Bailee is whoever possesses a chattel at a point in time (if I borrowed your

car, I am the bailee while I have it)o Bailment can be trumped by ownership (In Rem)

Ways property interests can be protected:- Contract – if property is held In Personem

o WHY? Contractual obligations exist that can’t be violated- Torts – if property is held In Rem or by bailee

o WHY? Right to exclusive enjoyment exists that can’t be violated by rest of the world

o TYPES: trespass to real or personal property, nuisance, negligence, detinue (wrongful detention of a person)

What is property? General and development of classification of property & 2 main types - Ever expanding – debts, shares, real property, personal property, trademarks, celebrity

personalitieso classification developed case-by-case over 1000 years, coming from post-1066

Norman system of feudalism where land was all-important- REALTY (real property) - PERSONALTY (personal property) – chattels real and chattels personal

What are the 2 types of realty?Both are hereditaments – which means they can be inherited

- CORPOREAL HEREDITAMENTS:o you can touch it, have possession of it e.g. land, and normally anything attached

to the land (i.e. fixtures) becomes a part of it e.g. buildings, crops, seeds - INCORPOREAL HEREDITAMENTS:

o rights arising from land, but not land itself – only 2 of these remain Easement: a privilege without profit (e.g. a right of way over

someone else’s land (the dominant title), right to put drain or cable across it) given by grant (usually for a price) or by

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prescription (e.g. historically after 20 years got right of support for artificial structures from neighbours land)

Profit á prendre: right to take the profit from land e.g. wheat, gravel

What are the types of personalty? Describe each- Chattels real – such as a lease, which has become more like realty- MAIN TYPE = ‘pure personalty’: Chattels personal – 2 types:

o Chose in possession – these are tangible things that you can take possession of eg- goods rather than services or moneys

Fungible: general things such as lumber – each item is considered identical and interchangeable and usually sold in units or by weight

Non-Fungible: individualized things o Chose in action – abstract things that only get value through legal action

Debts Commercial Papers- written promises

Bills of exchange – IOUs that can be sold Promissory notes Cheques

Documents of Title – bill of lading Industrial or Intellectual Property – copyrights, trademarks, patents Stocks/Shares

NOT SURE IF NEEDED:(1) Fungible (i.e. each item considered identical, interchangeable e.g. raw materials

– if things sold as ‘so many units’ or ‘so much weight’ they are unascertained, and they become ascertained when the particular things are set aside for delivery; future goods such as wheat, cotton, steel, are the anticipated produce of agriculture or manufacture, and so they are unascertained and hence fungible)

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AIR SPACE

MAXIM – “whoever owns the soil, holds title up to the heavens and down to the depths”

Kelson v. Imperial Tobacco, Co.

RULE – maxim is interpreted literally and accepts ‘up to the heavens’ FACTS –

- Overhanging sign protrudes by 8 inches above land controlled by a lessee (tobacconist)- Property owner had given permission for sign to be there- Lease did not exclude property rights to air above retail space

ISSUE – Does lessee have right to air above land through the lease? If so, what is the solution to the sign?HELD –

- Lessee has property rights unless lease excludes them – so it doesn’t matter that owner approved the sign since the lease didn’t exclude air rights

- Property rights to airspace are unlimited (to the heavens)- Injunction due to trespass (discretionary equitable remedy)

o Not nuisance because no damageo No damages because that would be like putting the lessee’s rights up for sale

Bernstein v. Sky Views and General Ltd.

RULE – maxim is limited to the height necessary for ordinary use/enjoyment of landFACTS – D flew “over” P’s house to take picture of it (not necessarily right over it)

- P claims trespass – even though photos could’ve been taken adjacent to the propertyo WHY? Privacy not recognized by common law until more recently; nuisance

would’ve required multiple actionsISSUE – Is it trespass for a plane to fly over the property?HELD –

- distinguished from Kelson (which would’ve found trespass)- only trespass if it is within a height necessary for ordinary use or enjoyment of land and

the structures on the land- above this height, land owners have same rights as rest of the public- Policy Considerations – balancing rights of land owners with those of public in day of

aircraft

Hashem v. Nova Scotia Power Corp.

FACTS – - P built airport without checking registry about adjacent RoW- D built transmission towers along a RoW on adjacent land (in an easement)- P says he can’t use airport anymore

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- P claims action of both public and private nuisance – not trespasso public nuisance - would’ve had to have interfered with rights common to all (not

as important)o private nuisance – would’ve had to interfere sufficiently with P’s use and

enjoyment of landISSUE – Are the towers a nuisance – public or private?HELD – No nuisances proven

- WHY?o adjacent landowner owns airspace up to the height needed to build towers

(structures as per Bernstein) to exclusion of aircraft using nearby airporto Other pilots could use airport still – problem was in P’s head (subjective problem,

and nuisance requires objective problem)o RoW was already in place when P built airport – so P could’ve known about ito Just because P was using air first didn’t mean he had the exclusive right to use it

- NOTE – if RoW hadn’t been there first there probably would’ve been nuisance which would’ve led to injunction to remove poles

- NOTE – if other pilots had been unable to fly it would have been objective but since Row would’ve still been there first P still would’ve probably lost

AG of Manitoba v. Campbell

RULE – rights go only as high as ordinary use – which doesn’t include useless structuresFACTS –

- Campbell built metal structure to block municipal airport traffic from going over his land- ‘metal finger’ in the sky obstructed night flights- AG claims nuisance

ISSUE – Does Campbell have a right to build the metal finger?HELD –

- Campbell’s rights only extend as high as ordinary use of land - Structure is useless and reflects a tantrum not an ordinary use- Nuisance – finger has to go

Lewvest v. Scotia Towers

RULE – airspace over your land is protected against trespass, even if your motives are poor (ie- you don’t use the airspace and are looking to just make some moola) *uses Woollerton ruleFACTS –

- Contractor uses crane that swings over P’s land (temporary and intermittent intrusion)- D saves over half a million by having crane swing over land- P claims trespass with intent to make money (only values the airspace because D wants

it)ISSUE – Is it trespass, even though P doesn’t use airspace?

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HELD – Trespass has occurred- Doesn’t discuss ‘ordinary use/enjoyment’ rule used in Bernstein- Seems to apply the maxim/Kelsen approach

Woollerton v. Costain

RULE – airspace over your land is protected against trespass, but if your motives are poor (ie- you don’t use the airspace and are looking to just make some moola) judge will try and balance societal needs with your greed FACTS – D is a construction company whose crane swings over P’s land without causing inconvenience

- If D didn’t use airspace then it would have to block the street- P claims trespass

ISSUE – Is it trespass?HELD – yes, it is trespass because there are property rights to air

- Granted injunction to remove crane but delayed its application until D thought they’d be done

- Court didn’t want to set anti-property right precedent but also thought the claim was frivolous

- NOTE – pre-Bernstein so no mention of use/enjoyment height

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SUBTERRANEAN AREAS

Edwards v. Sims

RULE – maxim applies underground – regardless of whether or not you have access to caves- NOTE: Statutes now cover natural resource rights below ground, but this common law

ruling still applies to cavesFACTS – Edwards owns land with an entrance to a cave and gives tours

- Sims (judge), on behalf of Lee (who wants to know if caves are under his land, even though he has no access), orders a survey of cave to see if it does

- Edwards tries to stop the survey- In order for survey to be allowed, it needs to be trespass if the cave is under Lee’s land

ISSUE – Do Lee’s property rights extend downwards (despite lack of access) so that the cave tours would be a form of trespass? HELD – Yes, property rights extend to caves below, even if owner has no accessDISSENT –

- If Lee had access it would likely be trespasso Policy Consideration – whoever can use something should have ownership over

it- Analogizes caves to airspace – doesn’t want to give rights to Edwards though

o You deserve property rights IF you can make use/enjoyment of the caves OR your surface use/enjoyment is affected

o You deserve property rights IF you can bring area under your dominion (have access/control)

- Policy consideration – Lee shouldn’t be allowed to benefit from Edward’s investment in a commercial venture

Hammonds v. Central Kentucky Natural Gas

RULE – maxim applies underground only if it is under your dominion (control) – ferae naturae- When something (gas, water, timber) is in its natural state it is part of real property and

not a chattel. If contained or removed from the land, it becomes personal property (chattel). If it is returned back to the land it once again becomes part of the real property.

FACTS – D pumps gas into natural space below ground (not a constructed container)- P claims gas is trespassing below their land

ISSUE – Is the gas trespassing?HELD –

- It cannot be a trespass.o WHY NOT? o Compares gas to wild animals and water, which are only yours if under your

control/dominion

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o As soon as gas was returned to its natural state (underground natural chamber) then it was no longer a chattel and didn’t belong to anyone (unless they re-assert dominion over it)

- NOTE: If gas could’ve trespassed, it could have been approached like Edwards v. Sims and been a trespass

- NOTE: If it had been after Bernstein, the use/enjoyment test could’ve been applied and made it not a trespass

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FIXTURES

What does it mean to have fixtures in personalty?- Usually the greater in value absorbs the lesser in value through accession

o Accession: the physical integration of parts that remain identifiable as separate parts

- They no longer have a separate existence – at least no in a useful sense- They can’t be taken apart without damage

What does ‘fixture’ mean in terms of realty and how does it happen?- Term that relates to how personalty becomes a part of realty through a joining together

of parts through affixation/annexation

Re Davis (1954) (Ont. H.C.)

RULE – TEST: to decide if something is a fixture, you have to look at the degree of annexation (how well they were connected to building) and object of annexation (why they were affixed to property – to improve the building/land to enhance its value or to improve the usefulness of the thing itself)FACTS – widow had interest in 1/3 of husband’s realty estate, which had bowling alleys clipped down inside a buildingISSUE – were bowling alleys part of realty (fixtures) or were they chattels (personalty)HELD – bowling alleys are chattels not fixtures

- Degree of annexation – not very permanent, just clipped in so easy to remove- Object of annexation – done so that bowling could be done more easily, not to improve

the building

La Salle v. Camdex (1969) (B.C.C.A.)

***LEADING BC CASE ON FIXTURES***RULE – prima facie fixture if attached (accept the first impression unless otherwise refuted)

Stack v. T. Eaton Test (1902) – 3 steps 1. What is the prima facie characterization? This wins unless otherwise refuted

If attached by anything more than its own weight it is a fixture If not, it is a chattel

2. Is it objectively otherwise characterized? – gotta be clear for all to see! Degree of annexation? Object of annexation? Most important: doesn’t matter what the intentions were when the item was

affixed. You gotta stay objective and only consider their intentions to the extent that you can presume them by looking at how well the item is attached and by

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observing the purpose of the attachment… can’t go and ask someone why they attached it and then use that as part of your reasoning.

FACTS – someone is waiting for a carpeting bill to be paid- Carpets were laid down in a hotel- If they are fixtures, the interest in the building should have been registered with land

agency, but they weren’t.- If they are chattels, then there are no issues.

ISSUE – Are the carpets fixtures or chattels?HELD –

Court applied Stack Test – 2 steps

1. Prima facie: fixtures because they are stapled down2. Objective degree of annexation: slight, because easily removed without causing more

than trivial damage – suggests that they are chattelsObjective object of annexation: to improve building as a hotel, which shouldn’t have loose carpets – suggests that they are fixtures

o NOTE: if a building is classified as specialized, it is more likely that the object of annexation will be to improve the building – fixtures not chattels

o But, in a more abstract sense you could just argue that it is a building with multiple rooms, more than it is a hotel… hotel could be turned into hospital where carpets not wanted. So it is important to consider the level of abstraction when deciding the relationship of a chattel to property

- Test Results: Court gave more weight to object of annexation than to degree, and ruled that carpets were fixtures

Diamond Neon v. Toronto Dominion (1976) (B.C.C.A.)

RULE – - a K with a previous owner regarding a chattel on land will only be honoured if it is

registered against the title as a restrictive covenant- If it isn’t, look to degree and object of annexation- DISSENT –

FACTS – - P is a sign maker- Previous property owner had a K with P to make a sign to put on a pole that was sunk

into concrete and attach it to advertise a business- K said ‘sign’ will remain property of P, that it was only leased to previous property

owner, and that it is not a fixture- Property is sold and sign ends up with D, who then removes the sign and sells it

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- NOTE: K doesn’t bind D because it wasn’t registered against the title of the land as a restrictive covenant. If it had, the K would have ‘run with the land’ and D would have had to honour it.

ISSUE – is the sign a chattel or a fixture?- If it is a chattel, D committed tort of conversion- If it is a fixture, the signs were a part of the land when it was sold and P has no remedy

HELD – Sign is a fixture- Decided by looking at degree and object of annexation

DISSENT – - Sign has a separate value, as shown by the fact that it was removed and sold- Since the sign was related to a particular occupant, it should be a chattel (Dr.’s name)- If the sign was related to the property itself, it should be a fixture (address)- BUT if the sign was generic and was likely to apply to future uses of the property, then it

could be a fixture (‘cars for sale’ sign on an obvious car lot)

L&R v. Nuform (1984) (B.C.S.C.)

RULE – if machinery is attached to steady it – it is fixtures. Constructive fixtures (forklift truck, backup parts, etc…) are fixtures too since they are required for running of the operation.FACTS –

- There are 2 security interests in the property – which was used to manufacture papier mache pots

- First is in the building and second is in machinery which is installed in the building- Much of the machinery is anchored to the floor or the building

ISSUE – Is this like Re. Davis, in which the machinery is just inside a building but still separate? Or is it more like La Salle, in which the building is specialized and the machinery is a part of the property?

- Are machinery fixtures or chattels?HELD – Machinery are fixtures. Non affixed tools are “constructive fixtures.”MACHINERY:

- Building and machinery are integrated so as to be a whole entity- Degree of annexation: some evidence that removing key parts of machinery wouldn’t be

trivial and would cause substantial damage AND that key parts were fairly permanently affixed

- Object of annexation: argument was made that the anchoring of machinery was objectively to avoid vibration and make operation of machinery safe

o Court said attaching it to steady it is not inconsistent with doing so to improve the building

CONSTRUCTIVE FIXTURES:- Because building + machinery = single operation, non-affixed tools are constructive

fixtures - WHY? Because they are required for ordinary running of operation- NOT included as constructive? new parts not yet attached or not currently required by

operation

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Lichty v. Voight (1977) (Ont. Co. Ct.)

RULE – In ONTARIO, court rejected LaSalle/Eaton Test, and considers subjective intention instead of just objective.FACTS – P put mobile home on farmland

- Sold farm to D with understanding on both sides that mobile home would be removed- P couldn’t move mobile home before close of sale because of weather- D claimed title mobile home only after learning they could…

o ON Prop. Act said they could keep anything on property not specifically excludedISSUE – Was the mobile home a chattel or a fixture?HELD – Mobile home is a chattel

- Degree of annexation: some degree (septic tank and concrete pad) but could be removed pretty easily without much damage (considered context of it being on farmland)

- Object of annexation: rejected Stack Test as a clear statement of law. Looked to subjective intention, which was clearly that P intended, and D understood, it to be a chattel

- NOTE: common law therefore differs in BC and Ontario, so you could argue for subjective intention at SCC!

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RIPARIAN RIGHTS

DEFINITIONS

What are the 3 categories of water –their definitions and their general property rights?

1. SURFACE WATER – rainwater, snowmelt, any water the ‘squanders’ itself- In case of flood, according to common law:

o you can protect your property (sandbags to divert) even if by doing so you flood neighbor’s property – not obligated to accept the flow of surface water onto your property

o you can’t pump water that is already on your property onto your neighbor’s – if you have had some sort of control over the water, you can’t release it elsewhere

2. WATER IN A WATER COURSE – water in a defined channel, either on surface or underground (lakes, seas, rivers, underground streams, etc…)

- Subject to Riparian Rights- Riparian land is at border of land and water – where the two meet

o Tidal water (seas and tidal rivers) riparian land is at the mean high-water mark

3. PERCOLATING WATER –underground water that trickles/oozes like water through a sponge – not a watercourse because it isn’t in a defined channel

- Rights?

What do we need to know about our riparian rights?- Mostly subsumed by BC Water Act (mostly gone)- Considered a ‘natural right’ that comes along with the land itself- They came from England, which is wet, so not always appropriate in other places where

water isn’t always available

What are common law riparian rights associated with – - Ordinary use? - Extraordinary use? - Flow?- Access?

ORDINARY USE: domestic or stock watering use- Right to deplete water completely as long as used ordinarily

EXTRA-ORDINARY USE: irrigation and commercial use- Right to take reasonable amount without significantly reducing volume/flow OR

form/quality

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FLOW: Right to have its flow relatively unaltered – both in quantity and qualityACCESS: Right to access to and from water is affirmative – Sword more than a shield

2 Conflicting Judicial Opinions in BC – Riparian Rights (1 back-up plan )

- must discuss both in any case, but #2 is likely more persuasive- no SCC decision, only BC

1. Johnson = riparian rights remain for water in defined channelo EXCEPTION: if another party has authorization to it

2. Schillinger (in semi-obiter) and Steadman (trial) (in obiter) = riparian rights have gone

Back-up Plan: - regardless of riparian rights existing or not, a landowner could still sue for nuisance

(diminished use/enjoyment of land)- if you were using water but then it was interfered with, you could always try nuisance- make sure your use is lawful, otherwise you will get screwed, as they did in Schillinger

Johnson v. Anderson (1937) (BCSC)

RULE – JUDICIAL OPINION #1 -riparian rights still exist unless you are up against a party with authorizationFACTS – D had a license to use water but not to divert it from stream

- D diverted water and diminished flow- Stream ran through P’s land- P used water for domestic and stock purposes (lawful by Water Act s.42(2))- P claims that riparian right of flow has been violated

ISSUE – Is there a riparian right to flow for domestic purposes?HELD – right to use and flow exist to protect against an unlawful diversion – diversion was unlawful/unlicensed, so P can claim D was infringing on their riparian right of flow

- Interpreted Cook v. City of Vancouver (1912) (J.C.P.C.) to say riparian right of flow taken away only against someone who had license to divert water NOT to say that riparian right of flow was taken away completely

- Water Act didn’t specifically preserve riparian rights from previous Act, but court interpreted certain rights to have been intended to remain

o Court striving to preserve riparian rights in face of strong indication that legislature wanted to do away with them

- By s.42(2) of Water Act riparian owner could still use water until all water flowing by or through land has been granted by license

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Steadman v. Erickson Gold Mining – PRE-APPEAL (1987) (B.C.S.C.)

RULE – JUDICIAL OPINION #2 – Riparian rights are extinguished (in obiter dictum = not essential to the decision and not establishing precedent)FACTS – P was piping water into his house from spring-fed dugout on his land for primarily domestic purposes

- P’s use was lawful under s.42(2) of Water Act (which allowed diversion and such works as necessary for diversion for domestic uses)

- D built road that resulted in a contaminated water system- P claimed nuisance

ISSUE – nuisance was found – right to unpolluted waterHELD – said Johnson was wrong (obiter dictum) and that s.2 of Water Act took away riparian rights

NOTE in Bryan’s Transfer v. Trail

RULE – It is within the power of PG to extinguish riparian rightsFACTS –ISSUE –HELD –

Schillinger (1977) (B.C.S.C.)

RULE – JUDICIAL OPINION #2 – Riparian rights are extinguished (semi-obiter)FACTS – P uses water downstream from D for fish cultivation

- P has authorization to divert from a point upstream from D- D puts silt in river that kills the fish- P claims nuisance - usually decided by balancing act, in which P’s unlawful actions will

limit their chances of winning

ISSUE – Has D interfered with P’s riparian right to divert water that is un-altered in quality?- If so, can P claim nuisance?

HELD – No riparian right to water use, so no nuisance

Defendant silting water here

Plaintiff actually diverting water from here

Plaintiff authorized to divert water from here

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- P was diverting from a place that wasn’t authorized- P could only have their unauthorized use protected if it was domestic (such use was

protected by s.42(2) of Water Act)- P’s use wasn’t domestic so couldn’t rely on s.42(2)- Court says other riparian rights were extinguished by Water Act, so P can’t rely on them

NOTE – court could’ve considered illegality of pollution and then balanced 2 parties’ without making strict ‘no more common law riparian rights’ rule

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WATER SUSTAINABILITY ACT

MEMORIZE –

S.1 Definitions:

Authorization = a license or use approval (unless referring to drilling authorization)

Groundwater = water below surface of groundNOTE – common law has established that underwater streams fall under riparian rights

Stream includes:o natural watercourse or source of water supply, whether usually containing water

or noto ground water (but see s.5 below)o lake, river, creek, spring, ravine, swamp and gulch

Unrecorded water = water the right to use of which not held under license or under a special or private Act

Aquifer = geological formation(s) and those that provide groundwater

S.2 Defined Purposes:

Domestic purposes = for household (hotels and strata buildings included, but not multi-family apartment buildings) use:

(a) drinking water, food prep & sanitation(b) fire prevention(c) provide to animals and poultry – household use and pets only (d) and irrigating small gardens that are adjoined and occupied with a dwelling

S.5(1) – title and right to use and flow of all water in any stream in BC is vested in government EXCEPTION: if private rights have been established under authorizations

S.5(2) – title and right to use, percolation and flow of all groundwater is vested in government (a) EXCEPTION: if private rights have been established under authorizations

S.5(3) – can’t acquire a right to divert or use water by prescription- prescription = way to acquire property by use/enjoyment of land openly and peacefully

for a prescribed period of time

S.6(3)(a) – it is not an offence to divert unrecorded water for domestic purposes or prospecting for a mineral

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- NOTE: it is lawful but doesn’t give you a right to use unrecorded water- Lawful = shield to protect your actions. You can’t be sued and you can argue nuisance is

somebody interferes with your use/enjoyment - Right = sword to assert your entitlement. You can sue someone for taking it away

S.6(4) – you may divert groundwater for domestic purposes unless regulations say otherwise

UNDERSTAND –

S.6(1)– can’t divert water from, or use water that was diverted from, a stream or aquifer EXCEPTIONS – (a) you have authorization

(b) the diversion is authorizedS.6(2) – not an offence to

(a) divert or store to extinguish a fire as long as you restore it as soon as you are done (b) divert it to test quality, quantity or flow

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PERCOLATING WATER

Bradford v. Pickles (1895) (English H.L)

RULE – Landowners can extract percolating water for any purpose – including wasting itFACTS – D owns land above P

- Water collects underground D’s land and percolates down to P’s land- P collects water and it supplies town- D sinks shaft down and drains percolating water that has collected under his land so that

flow and quality of water that makes it to P is diminished- P suggests D is only doing it to extract money from city- Statute exists that says D couldn’t extract water

ISSUE – Who has right to percolating water and is that right limited to only reasonable use?HELD – D has right to water and his motives for use are irrelevant

- P has no right to receive percolating water- If it had been an underground stream, riparian rights would have applied at the time

o P’s use would not have counted as ordinary!- Statute only gave P right to take or divert water that was already under its dominion

NOTES:1) Distinguished from ‘metal finger in the sky’, in which it mattered how he expressed his

property rights – it was useless so it couldn’t reasonably interfere with airport’s rights2) Compare with wild gas in Hammonds 3) Penno and Pugliese cast considerable doubt upon applicability of this case in Canada today

- Pugliese – no absolute right to percolating water; right needs to be balanced against right to support (also not absolute).

4) Modern legislation probably overrides this case as well.

Steadman v. Erickson APPEAL (1989) (B.C.C.A.)

RULE – Nuisance to pollute groundwater or watercourse water – Groundwater (stream nor percolating) wasn’t in Water ActFACTS – See TrialISSUE – Is it a nuisance if groundwater OR watercourse?

1) If groundwater, since groundwater wasn’t in Water Act, what law applied?2) Was it even a groundwater issue? When does percolating water taken from a spring or

well become a watercourse?HELD –1) If groundwater, common law rules applies.

i) riparian rights apply to underground streams (use and flow in quantity and quality)ii) percolating water is common property, and anyone can appropriate as much as they

like

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But either way it would be nuisance to pollute groundwater to detriment of neighbour, even if neighbour had no proprietary right in water at time of pollution

2) Court couldn’t decide if it was groundwater, so also considered case as if watercourse:- If watercourse P’s use is protected by s.42(2) of Water Act because it was a domestic

use of unrecorded water – right to unaltered flow and quality

DEFINITIONS – Water Protection Act (1995)

- Gave title and right to use of percolating and groundwater to government- Made it so that Water Act applied to both underground streams and percolating water- NOTE: s.42(2) still allowed domestic use of unrecorded groundwater

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OWNERSHIP OF BEDS

GENERAL RULE: - Foreshore, tidal, or navigable water beds = province- Non-tidal and non-navigable water beds = ad medium applied (in the past)

DETAILED RULES:

What is ad medium rule?- riparian land owners on either side own their half of stream bed out to centre of stream,

unless otherwise stated / intended with knowledge on both sides-

What are the riparian rights for the following:- Foreshore?- Sea bed?- River/Stream bed?

Foreshore: where the tide washes- Between low water line and mean high water line (doesn’t include extreme tidal lines)- Owned by province- Land up to mean high water line is riparian

Sea bed: constitutional issue between feds and prov.

River/Stream bed: - Tidal – treated like foreshore, and bed is owned by province- Non-Tidal –

o Navigable – like a highway and vested in province - BCo Non-Navigable –

if there is an old certificate of title, ad medium rule applies if there is a newer certificate of title, ad medium rule does not apply as

per s.55 and s.56 of Land Act

Micklethwaite v. Newlay Bridge (1886) (English C.A.)

RULE – ad medium applies- even if the bed wasn’t clearly shown to be divided on maps or area wasn’t expressly

included in title- UNLESS there is a known intention otherwise

FACTS – P’s predecessor owned both sides of river- Predecessor sold land on one side of river (eventually came to be owned by D)- During sale, described as “bounded on north by river”; map didn’t show ad medium

boundary; calculation of land area also didn’t include half of river bed

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- D now wants to build a bridge across disputed part of stream bed- Bridge would be free and undermine P’s toll bridge

ISSUE – Should ad medium rule apply, although it was never explicitly stated at original sale?HELD – Ad medium applies by presumption

- It is a rule of construction not common law – AKA it should be presumed to apply to assist courts in interpreting property cases (common law would also apply unless expressly contracted away)

- EXCEPTIONS: o if express statement in conveyance says otherwiseo if circumstances, known to both parties, existed at time of conveyance that show

the original vendor intended to make use of the stream bed – must be strong enough to rebut presumption

- Policy Consideration: the half of the stream bed closest to you can be most usefully used by you

Canadian Exploration Ltd v. Rotter (1960) (S.C.C.)***NOTE: See Torrens system outlined below***

RULE – ad medium rule still applies in Torrens system, if property is ‘bounded’ by non-tidal/non-navigable streamsFACTS – P removed large quantities of sand and gravel from riverbed, both on own side and D’s

- P clearly owned own half so no damages due for that ISSUE – Does ad medium rule apply? Did the Land Registry Act exclude the ad medium rule for certain certificates of indefeasible title in BC?HELD – ad medium still applies under BC torrens system for land described as being bound by a non-tidal and non-navigable stream

- Legislation could take ad medium rule away but not with Torrens systemo WHY NOT?o Practical difficulty in surveying middle of streams and staking them outo Ad medium principle is too deeply embedded to be disturbed or doubted

- There was clear intention that half of bed should be transferredDISSENT – the point of Torrens is to stop us from having to look into the past to try and figure out titles

- The majority ruling makes such searches necessary to figure out who has bed rights, if land is bound by non-navigable and non-tidal streams

Simpson v. Ontario (Re: navigability) -

RULE – FACTS –ISSUE –HELD –

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Land Act, 1961 - s. 55 & 56

***NOTE: after Rotter, legislature phases out ad medium rule***

s.55(1) – no part of bed or shore passes to another party acquiring grant- EXCEPTIONS:

o red colour is used on mapo express provision to the contraryo minister directs otherwise

s.56(2) – doesn’t apply to claims decided by court before 1961 OR to indefeasible titles issued before 1961 that specifically include beds

- NOTE: since new certificates are issued every time land is sold, this will slowly phase out the Rotter decision

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ACCESS BY RIPARIAN OWNERS

District of North Saanich v. Murray (1975) (B.C.C.A.)

RULES –1. General ACCESS & MOORING Rights – if you have riparian rights you have right to go to

and from water and to moor your vessel for as long as it takes you to load and unload, regardless of who owns the bed.

2. TIDAL ACCESS Rights – if you have riparian rights (to high mean water mark), you have right to cross foreshore and to use pre-existing structures but not to construct on it (unless crown gives permission)

3. LIMITATIONS – can’t interfere with others’ access rights or public navigation rightsISSUE – Does a riparian owner next to the sea have the right to built structures on the foreshore? (such as wharves)HELD – No right to build structures.

Welsh v. Marantette (1983) (Ont)

RULE – Navigable rights to an artificial waterway exist if the natural version of it was navigable = useful as a public highway, with access and predictability of use to support commerceFACTS – D widened a natural ditch to create an artificial channel to a creek (ad medium not applicable)

- P’s land adjoins the channel- P claims right to navigate the channel to reach the creek

ISSUE – What rights does P have to the channel? Access? Navigation?HELD – artificial waterway doesn’t afford rights – must look to original watercourse, ditch, and then extend its rights to the artificial waterway.

- Ditch had distinct flow, and counted as a ‘stream’ but did not count as a navigable waterway.

o For there to be navigation rights, a watercourse must be useful as a public highway – public could use it for transportation or commerce between terminal points that public can access. Doesn’t include every small watercourse, so ditch didn’t count.

o Doesn’t need to be continuously accessible for navigation rights to exist. BUT any fluctuations in flow that would affect navigability (rapids from swollen flow or freeze-ups) must be predictable and dependable so that commerce can work around it

- So, P has riparian right of access and moorage to channel because ditch was a defined watercourse

- P does not have right of navigation because ditch wasn’t navigable- Policy Consideration – navigable rights exist for waterways if they can support

commerce – public access & predictable

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SUPPORT

What is the right of support?- Natural right attached to land in its natural state- EXCLUSIONS – doesn’t apply to any additions, such as buildings; only applies to

neighboring land- Frequently linked with tort law- Can purchase easement for support for buildings from neighbors

What are the 2 aspects of the right of support?

1. HORIZONTAL/LATERAL SUPPORT – support from the side.- If neighbor removes horizontal support and land with house shifts and results in house

falling over…you must prove that the land in it’s natural state would have shifted if you want to claim that your right to support was violated

- If the weight of the house on the land caused it to shift, then you will have no right to support since it only protects against shifts of land in its natural state

- If you can’t prove right to support was violated, there is always nuisance!

2. VERTICAL/SUBJACENT SUPPORT – support from below- Neighbor digs below you and land falls – house is destroyed- Must prove that land would have fallen in its natural state without the weight of the

house to push it down- Helpful that gravity is always present to force land down and establish right to vertical

support was violated- If you can’t prove your right to support was violated, it could also be a case of trespass!

Cleland v. Berberick (1915) (Ont H.C.)

RULE – FACTS – P owns beachfront property next to D, who is bounded by D’s wife’s (DW) property on other side

- D and DW both remove sand from beaches- Wind and water action increases and moves sand off P’s beach- P claims D’s sand removal caused it- D claims DW’s sand removal caused it

ISSUE – Did D’s sand removal cause P to lose sand?HELD – D’s sand excavations were primary cause of P’s loss through indirect storms

- P had a right to support of his land by D’s land – in its natural state- D’s removal of sand facilitated nature’s interference with P’s beach- it matters who caused sand loss, because only neighbors can violate right to support- If DW is cause then there is no case

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Bremner v. Bleakley (1924) (Ont.App.Div.)

RULE – if sand is naturally blown off of land it no longer belongs to land owner. Neighbor can prevent its return without violating a right to support.FACTS – P has sand on land that is often blown about

- D has neighboring property and digs holes to catch sand off of P’s land- Sand that is caught on D’s land can’t return to P’s- P claims loss of support – not the best case, but they chose it anyways

ISSUE – Does P have a right of support that D violated by digging holes and collecting sand?HELD – P has a right to support but D’s holes didn’t violate it

- there is not a strong enough chain of causation and P doesn’t have a strong enough claim to ownership of sand

- when sand is blown off property it becomes a natural item, which is only owned if trapped – ownership of sand doesn’t stick with P when the wind moves it around

- D did not cause loss of sand, only caused it to not return- claim on nuisance would’ve been better – could argue that P lost enjoyment of property

because of D’s actions

Gillies v. Bortoluzzi (1953) (Man. Q.B.)

RULE – responsible for supporting the natural land, not the weight of additional structures- if you dig under, regardless of whether or not there are additional structures, a loss of

support is assumed to be claimable because of gravity – can’t blame weight of buildingFACTS – P leased a building and D was excavating neighboring land – removed lateral support and vertical by undercutting P’s building

- P’s wall fell down - P claims loss of support, negligence and nuisance - NOTE – could’ve brought action against neighbor rather than contractor

ISSUE – Is D responsible for loss of support? – lateral or verticalHELD – D isn’t responsible for lateral support because weight of building is more than that of natural land

Rytter v. Schmitz (1974) (B.C.S.C.)

RULE – not a right to lateral support when pressure is increased by building being on land. Is generally a right to vertical support, even with a building on land… cuz gravity!FACTS – D excavates on land beside and beneath P’s land

- P’s building partially collapsesISSUE – does P have a right to lateral support of increased pressure to land (caused by building)? Does P have right to vertical support?HELD – P had no right to lateral support of land with added pressure of the building

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- P had right to subjacent/vertical support, because gravity would have caused land to collapse even without the building on it

- NOTE: right to support is strict so no need to show intentHISTORY LESSON:

- There was a law of prescription that awarded a right to lateral support easemento IF the building and land it was on had 20 yrs of uninterrupted support and

everything was on the up and up- These prescriptive rights were cancelled in 1976 under the land registry system, BUT

pre-existing prescriptive rights could be registered before 1976

Welsh v. Marantette (1983) (Ont)

RULE – No right to support of ‘fill’ because it isn’t a natural part of your land – fill is an addition/structureFACTS – D owns widened channel (used to be a ditch) and P’s land borders channel

- P claims D’s widening of channel caused erosion to property – wake of boats, fluctuation of levels, ice grip. Eroded soil was fill.

- P claims loss of lateral supportISSUE – Is there a loss of support if fill, rather than the original land, is being eroded?HELD – no right of support for fill. Because erosion was not of original land the claim must be dismissedNOTE – there must be some point when fill becomes natural. There is no ruling in Canada on this but other jurisdictions have looked to the level of integration between layers

Pugliese v. National Capital Commission (1977) (Ont. C.A.)

RULE – No absolute right to either be supported by or to extract percolating water – negligence and nuisance are your available remediesFACTS – D built sewer and dewatered to allow tunneling

- D had statutory permission to pump out water but pumped more than allowed to pump- P’s homes and lands lowered from lowering of ground water table- Ps claim negligence (should’ve taken more care), nuisance (interfered with use and

enjoyment), breach of statutory duty (took too much)ISSUE – Is there a right to support by percolating water? Is there a right to extract percolating water?HELD –

- RIGHT TO SUPPORT v. RIGHT TO EXTRACT - No absolute right to support of percolating water - No absolute right to extract percolating water - NEGLIGENCE – can be found if there was foreseeable risk and a reasonable person test

is applied to see if proper standard of care was taken- NUISANCE – private nuisance can be found if there is interference for a substantial

period of time with the neighbor’s enjoyment of their property. NOT about if D’s land

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use is reasonable, but whether it was reasonable considering they had a neighbor. NOT a defense to say you took all reasonable care. NOT a prerequisite for negligence

o ALL ABOUT A BALANCE BETWEEN PROPERTY OWNERS

- BREACH OF STATUTORY DUTY – Qs to consider if deciding there is a tort to be had:1. Was the object of the breached provision to prevent the damage that

occurred? AKA - did the statute exist to prevent subsidence? NOPE2. Was provision intended to create a public duty only or to also create

an enforceable duty to those harmed? AKA - did the provision exist to protect P from subsidence? NOPE

3. Were statutory punishments meant to be the only remedies available? AKA – were P supposed go un-remedied by statute if the provision was breached? YUP

4. Would those who would benefit from the provision not being breached be left without options if the provision was breached? AKA – would P be screwed by the breach and without recourse options? NOPE – they have nuisance and negligence

Hence no civil remedy for breach of statutory duty in this case.Note: this tort action restricted by later case Saskatchewan Wheat Pool Case (1982) (S.C.C.)

OPTIONS IN OTHER JURISDICTIONS FOR PUGLIESE:

ENGLAND – - Right to Support v. Right to Extract:

o Acton v. Blundell, 1843 – owner has absolute right to extracto Bradford v. Pickles – absolute right not limited by motivation of ownero THEREFORE: no right to support if percolating water is removedo BUT: right to support if silt, brine, etc… are removed, causing subsidence

- Nuisance and Negligence:o Langbrook v. Surrey, 1969 – no negligence due to absolute right to extract and

fact that you could extract with malicious intent. No nuisance either.AMERICAN –

- Right to Support v. Right to Extract: o Varies between states – some absolute right to extract; some right but limits if

sole purpose is to harm neighbor or waste it. Some use a ‘reasonable use doctrine’.

- Nuisance and Negligence:o Negligence if user could have reasonably avoided harm to neighbors or taken

reasonable precautionso Nuisance also allowed

AUSTRALIAN –

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- Both negligence and nuisance allowed

ACCRETION

What is accretion?- Gradual and imperceptible (in progress – even if you can see the effects eventually)

growth or reduction of land at water’s edge- OPPOSITE = avulsion – sudden or perceptible

MUST BE:- Gradual- Imperceptible- Naturally caused or result of human activities that did not intend to grow/shrink land

How can land at the water line grow or reduce?- GROW –

o banks are built up and extended when deposits are carried in water and left at shoreline

o water recedes and exposes more shoreline- REDUCE –

o Erosion o Advancing water

What happens if shoreline extends in tidal cases?- Becomes part of riparian owner’s land- JUSTIFICATION –

o Fair because riparian owner can experience either accretion (more land) or losses (less land)

o Convenient because the shoreline is bound to change over the yearso Logical because newly exposed land is now manurable and owner should be

allowed to own it for agriculture

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Southern Centre of Theosophy Inc v. State of South Australia (1981) (Privy Co.) ****NOT BINDING IN CANADA****

RULES – 1- Accretion doctrine application is the presumed approach – STRONG presumption2- Accretion principle is extended to include wind-blown sand at a shoreline3- Doctrine of accretion applies to inland lakes and allodial lands4- Accretion can be excluded through explicit terms in documents5- Imperceptible extension of shoreline = not being able to see consolidation taking place

in a way that is clearly a stable advance of landFACTS – Appellant has perpetual lease of lakeside land

- Build up of lakeside land through combo of water receding and deposits in North- Build up of lakeside land from windblown sand dunes in South

ISSUE – Does accretion apply to the extension of land along the shorelines? Is the advancement of shoreline imperceptible and gradual, as required by principle of accretion?HELD – accretion applies and there is a grey area surrounding the idea of imperceptible advancement

AG BC v. Neilson (1956) (S.C.C.)

RULES –1. Accreted land can’t be foreshore. It must be above mean high-water level2. Accretion doctrine applies to tidal, non-tidal, navigable, and non-navigable rivers3. Whether or not land was manurable – AKA the logical reasoning behind accretion – not

relevant in this caseFACTS – 1930 Crown built highway along edge of an island in Fraser River (all highway titles belong to crown)

- Accretion occurs and island enlarges past highwayISSUE – Did accretion begin before or after highway was built? If before, the owner gets the new land; if after, the crown gets new land because it becomes extension of highway ownershipHELD – when the road was built, the edge of the island was still overflowed by river and was foreshore not dry land…SO, accretion happened after and it now is part of the highway and belongs to the crown

Re Bulman (1966) (B.C.S.C.)

RULE – It is only accretion if the shoreline extends, not if the bed comes up and joins. Shoreline owner only gets the new lands if they extended from shoreline.

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FACTS – sand bars and banks are formed where N. Thomson River enters Kamloops Lake and deposits a bunch of crap

- These sand bars and banks are vertically developedISSUE – Does the accretion doctrine apply to these newly formed lands?HELD – Nope. Because they came from below and didn’t spread from the shoreline.

- Whoever owns the bed gets the new lands, not whoever owns the shore.- Policy consideration of manurability is considered irrelevant

Re Monashee Enterprises and Minister of Rec. and Conservation for BC (1981) (B.C.C.A.)

RULE – a strip of land along a shoreline can’t change as the shoreline changes UNLESS explicitly described as having the ability to snake along the shore as it changesFACTS – Crown reserved a strip of land immediately above high water mark

- Private ownership of land above the reserved strip- Crown is riparian owner- Accretion occurs

ISSUE – Does the inland border between private owner and crown shift as accretion or erosion occurs?HELD – Reasons not to let the strip be ambulatory:

o Rejects practical considerations because Crown could prevent erosion of shoreline

o Shows absurd result- if erosion went far enough, crown would own underneath property owner’s house

- Words could have been made explicit enough to make the line ambulatory, but they weren’t

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PRINCIPLES OF LAND LAW

Key point – 2 systems 1. Common law2. Equity

They do not conflict with each other because they are separate

KEY EXAM POINT ON TRUST – legal title from equitable or beneficial interest

KEY EXAM POINT ON ESTATES – you are dealing with slots in time - When doing so, you need to know the measuring factor = measuring line (life?)- Reversions and Remainders should be clear to you

COMMON LAW = Tenure and Estates

Doctrine of Tenure

Tenures = pyramid of land grants; qualitative concept related to social/political/status/wealth set-up

Allodial Ownership = absolute ownership

Freehold Tenures = Granted by king to the following freemen in descending order- Tenants in Chief - Intermediate lords (Personal service tenures)- Low lords (lowest freeholders)- Serfs (copyholders – below pyramid of tenures)

Unfree Tenures = held by copyholders, who were beneath domain lords

4 Types of Tenures: reflected status and conditions of the tenure, which passed on with land; had to be certain (not related to life-span) so freeholders could know and meet obligations and random demands couldn’t be made

- Knight service tenures – Tenants in Chief- Personal service tenures – intermediate lords- Spiritual service tenures - Socage – agricultural obligation – still exists in theory

HISTORY:- 1066 AD – started as a part of feudal system - 1290 AD – Quia Emptores

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o started practice of substitution/ability to freely alienate land by allowing it to be sold. As it was sold, it dropped out of the pyramid, and it gradually flattened out

- 1660 AD – Tenures Evolution Act solidified what had been happening since 1603o tenures ceased to have practical significanceo abolished incidents of tenure but not tenure – only ones left were escheatment

and forfeitureo converted other tenures to socage

Incidents of Tenure:- aids (aid owed to overlords)- forfeiture- escheatment- marriage- wardship

Doctrine of Estates

Estates = legal right to posses and occupy land; quantitative because it is tied to a land for set time period then passes to next owner; uncertain holding because it only lasts a lifetime

- crown retains allodial ownership so it is like owning an interest in the land- when ownership ends it passes on to next owner or escheats to the crown

4 Types of Freehold Estates:1) Fee Simple: Fee = inheritable; Simple = without qualification – can theoretically be held

forever through heirs, who can be anybody. If you die without heirs it escheats back to Crown

2) Fee Tail: abolished in BC in 1921; Tail = heirs of the body - limited to lineal heirs3) Life Estate: owned for time of life span4) Autre Vie: owner for the life span of another person

Present v. Interests Present: an estate in possessionFuture: an estate in expectancy – possession will or may be obtained in the future

Ways Freehold Estates can move between owners:o REVERSION: Fee simple can be granted as life estate with a reversion (= future

interest), so that when owner dies it goes back to original owner (AKA the reversioner)

o REMAINDER: Fee simple can be granted as life estate to A then to B in fee simple, so that first owner can control it from the grave. B gets the remainder (= future interest) and is called the remainderman in this situation, has to wait for A to die.

o REVERSION v. REMAINDER: Fee simple can be granted first as a life estate and then, later, granted to another party in fee simple. The first grant created a

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reversion. The second grant assigned the reversion to the next party, so no remainder created.

o CONTINGENCY & REVERSION: Can make a contingency so that fee simple isn’t granted until contingency is met – automatically creates a reversion if contingency isn’t met

Leasehold Estate: ownership of a temporary right to hold land or property in which you have property rights to the realty, but was generally considered personalty.

Equitable Interests

- Happens when someone else is holding the title for the use or the benefit of someone else

- NOTE: Equity and common law have merged in terms of who makes the decisions – same judge for both now. But doctrinally they are still separate.

HISTORY:- Until 1870 – judges of Common Law could apply Equity laws – previously 2 separate

court systemso Common Law (exchequer for financial matters; common pleas for land matters;

King’s Bench for Ks, torts and crim.)o Equity (covered stuff inadequately addressed by common law; petitions that

were passed from king to Lord Chancellor to clerks of Chancery) didn’t try and overturn common law, just made a different set of rules to

parallel it so there could be different results without different common laws

4 Stages of Use:1) “USE” – up to 1535

o feoffments = A to B in fee simple for the use of C in fee simpleo Common law would only consider the A to B part… so under common law B was

the legal title holdero If C wanted to enforce his right to use the feoffment, he had to go to

equity/chancery o Chancery would not change legal title, but would act in personum (against the

person) to B to make sure C got to use the lando This equity enforced “use” of the property is “USE” – B is compelled by equity

courts to hold property for the benefit of C, not themselveso Why have USE?

Avoid incidents of tenure So organizations could have rights of use even if they weren’t allowed to

have legal title (land couldn’t be passed to ‘dead bodies’ such as corporations or church groups)

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2) “USE” – 1535 – Statute of Useso USE was restricting income from tenure incidentso Statute executed the “USE” and gave legal title directly to C, rather than being

the beneficiary of B’s ownership – AKA beneficiaries became legal ownerso Statute took the land out of equity and put it into common law when it gave

ownership to the beneficiaryo ISSUE: without USE, needed a way to leave land to heirs

3) “USE” – Let’s Find Some Loopholes!!o Loopholes in statute’s wording:

Statute said “anyone seized (possessing freehold) to the use of another” would invoke execution of the USE

LOOPHOLE: avoid the statute by giving leasehold (NOT title) to B for 99 years for use of C for 99 years

Statute said B was a person LOOPHOLE: avoid the statute by making B a corporation instead

of a person Statute was interpreted to only apply if B was passive in their title holding

LOOPHOLE: avoid the statute by giving B some duties –ex. maintenance

o Loophole of simply ‘exhausting’ the statute (main one!): Statute interpreted as executing only a single use – B’s – and giving title

to C LOOPHOLE: add in a second granting of use – A to B for use of C

for use of D. Statute only executes B’s title, leaving C to hold the title for the use of D

4) “USE” – Emergence of Modern Trusto the loophole of exhausting the statute by creating 2 uses became truncated for

simplicity’s sake, because the first use was just being immediately dumped First truncation: A to B to the use of B to the use of C… basically just

avoided having to put the 4th person into the mix Second truncation: A [unto and] to the use of B in trust for C (B = trustee

(user), C = beneficiary) Third truncation: A to B in trust for C

ISSUE: this flirts with the statute of uses because it doesn’t expressly show the 2 uses – statute still applies here in Canada

RESOLUTION: although it should expressly state the 2 uses, courts interpret “trust” to mean the double use

o 3 Certainties considered by courts to create trust:1. certainty of intention to create trust2. certainty in regards to subject matter

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3. certainty as to who the beneficiaries are

DOCTRINE OF NOTICE:

What happens if a trustee sells the trust to someone without telling them about the trust and beneficiary?

- Common law doesn’t care about uses/trusts since they are in equity- Equity developed the Doctrine of Notice = 2 requirements:1) Did the purchaser give value?2) Did the purchaser get notice that the land was being held in trust?

by giving notice to a purchaser that land was owned in trust, the title obtained was subject to trust = beneficiaries are protected

RULE: new owner must honour beneficial element if they gave value and they were given notice

EXCEPTION: Purchaser gets the title without having to honour beneficial interest IF the they gave value and were not given notice (actual or constructive notice – constructive means that they should’ve been about to figure out that there was a beneficiary)

RATIONALE FOR EXCEPTION: there are 2 innocents in this case and one has to lose. Only option available to the beneficiary is to sue the trustee.

Relationship of Real and Personal

5) Unlike estates, personal property is allodial – you can own the very thing, unlike estates, which you own separately from the land because ownership ultimately rests in the crown.

6) Therefore, according to common law, there is generally no ability to treat personalty as estates for the purpose of successive interests – leaving personal property to heirs and future heirs (in trust)

Property (successive Interests)

2 exceptions to the common law limitation on successive interest in personalty:

1) Re Swan (1913) (English Ch. D.)

RULE: Trust can be used to create flexible, estate-like succession for personalty by splitting legal title from use – not sure how it does this part!FACTS: - swan made a bequest (leaving personalty by will) that her jewellery/personalty be left to her daughter

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7) Swan included a remainder in the bequest – that if her daughter died childless that the personalty should go to her son

8) Daughter breaks up some of the jewelry 9) Daughter dies childless10) Son claims proprietary interest from daughter’s estate for compensation, saying that he

should have gotten the jewelry in its original stateISSUE: How should the estate-like bequest be treated? – how should the ownership be classified?HELD: Daughter was a trustee holding the personalty for the benefit/use of son. Thus, she had a responsibility to maintain the jewelry for her brother’s benefit.

How did the Court come to classify the relationship as a trustee and beneficiary?Court considered 5 ways to treat the bequest:

1) CHOSEN WAY: First taker (Daughter) is a trustee for the remainderman (son), subject to her own life interest.

NOTE: compare this model to the model used in estates… Mother to Daughter for use of Daughter for use of Son… truncated down to Mom to daughter in trust for son. 2) Ownership given to executors of estate as trustees for benefit/use of daughter/son3) Ownership belongs to remainderman (son) and daughter only has use of the the

personalty (usufructuary interest)4) Ownership belongs to first taker (daughter) and any later takers (son) have their interest

in the personalty created once the first taker’s ownership is over5) First taker is a bailee (has lawful possession but not ownership), so there is still a need

to choose the owner….(second choice)

2) Re Fraser (1974) BCCA

RULES: 11) wills can be used to grant successive legal interests in personalty – moves beyond Swan,

which only allowed for Trust to grant successive interest12) Title lies with ultimate holder + other life interestFACT: a will gave a “life interest” on all realty and personalty to a widow, with all property going to a charity once her life interest expired ISSUE: Can the widow hold the personalty in life interest? If so, she will have to pay the taxes on the personalty (a succession duty).HELD: 13) @ trial – personalty could be held by widow and she had an absolute right to encroachment

(could use up the personalty herself and leave nothing to the charity when done)14) @ appeal – considering intention in will…widow has successive life interest in the

personalty, during which time the charity (ultimate owner) has a vested interest. Widow only has usufructuary interest in the personalty, which means she can enjoy revenue from the principal, but can’t encroach upon it. She has a fiduciary duty to preserve it for the charity.

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Marital Unity: Common Law and Equity

4 Stages of Marital Unity Legal Development

1. COMMON LAW When a woman and man married marital unity occurred = the estates joined in

ownership for the duration of the marriage, then after the marriage her part of the estate went back to hero CLEAR SLOT IN TIME - marital property existed during this time

Dower = When the husband died, she got 1/3 of husband's portion of estate Curtesy = When wife died 100% of wife's portion of estate – subject to some conditions

2. EQUITABLE POSITION – substantially increased married woman’s legal capacity Trusts could be set up with trustees for women with specific requirements that the

property stick with the wife alone Allowed property to be settled in favour of a married woman in her own right as an

individual beneficiary Really only available to the upper class

3. SERIES OF STATUTES - eg. Married Woman's Property Act Mid to late 19th century Adopted equity rules and said removed common law concept of marital property (as

created by marital unity) Let married woman hold land like unmarried women, who had same rights as men

4. MODERN STATUTES Focussed on distribution, notwithstanding who owns what - distribution > title Property is shared when marriage breakdown occurs, regardless of who actually owns the

property Children and spouses can now contest a will to argue that dispersal of property is unfair

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INDEFEASIBILITY

INDEFEASIBILITY = incapable of being defeated or altered – ‘curtain is drawn’

3 stages in the development of real property title1. common law – upheld effective titles that have existed historically2. deeds registration system – modified common law by saying you had to search for

documents that have been registered with the deed registry3. title registration – once you have registered your title, the curtain has been drawn and

you’ve got indefeasible title – (subject to some exceptions)

BC operates in a TORRENS SYSTEM

What is a Torrens System? - land registration system with 2 functions: 1. Recording the written document 2. Giving legal effect to registration

a) Given by relevant information related to title b) Creates indefeasible title (s.23 Land Title Act)

What principles underlie the Torrens System?1. Curtain – immediate indefeasibility hides any happenings before the registry2. Mirror –

o Registered title = complete reflection of all interests (except those in s.23 Land Title Act)

What is indefeasibility of title?- there is no substantive definition in legislation

o s.1 Land Title Act – provides a purely legislative/administrative definition: Certificate + entry that is digitized in the records – (the focus is on how

records are contained in the land title office)- Frazer– provides substantive definition

o A registered property owner’s “immunity from attack by adverse claim to the land or interest in respect of which he is registered”

What does indefeasible title protect you from?- s.23 Land Title Act – makes it clear that a person has legal title, but it doesn’t include

protection against in personem actions- Frazer – “wish to make it clear that this principle [of indefeasibility] in no way denies the

right of a plaintiff to bring against a registered proprietor a claim in personem, founding in law or in equity, for such relief as a court actin in personem may grant”

What is duplicate certificate title?

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- When you register your title, you receive a duplicate certificate title- You can’t sell your property without it!

o If you have lost it and want to sell your property, you have to advertise your loss in the Gazette before you are allowed to get a replacement

s. 23(2) Land Titles Act, 1996 – as amended in 2005- If you’ve registered title to the land, then you own it in fee simple & title is indefeasible- Does not extend to mortgages in Canada, but does in NZ and Australia- Includes several exceptions – fraud, etc…

CREELMAN v HUDSON BAY INSURANCE CO. RULE: mirror and curtain principles shown

- the introduction of indefeasibility drew a curtain on past title defects – the way it is now is the way it shall be treated by the courts

- Once a title is registered with the BC Land Titles Act, the title becomes indefeasible so that any defects at its root are considered corrected

FACTS:- HBC owns land and there is a K for long-term purchase – land title is registered- Purchaser defaults and claims there was a defect in HBC’s title (HBC could only hold land

for purpose of occupation – couldn’t sell it)

How BC deals with fraud and indefeasible title? s.23(2)(i) Land Title Act - HUGE EXCEPTION TO INDEFEASIBILE TITLE!- Indefeasible title is subject to “the right of a person deprived of land (includes those

who got title via will/gift) to show fraud, including forgery, in which the registered owner has participated in any degree”

o If a void instrument (fraudulently procured/forged document) is registered by a title holder who was involved in the fraud/forgery

o If will is void, then won’t give indefeasible title because s.25.2(2)(c) – title based on nullity/forgery is not title because no consideration given

- FRAUD: something said/done/omitted with design to perpetuate what the person must know is false

- FORGERY: fraudulently making false documentso Under common law, forgery is a nullity – forged document that transfers title is

void and has no effectWhat happens if the new title holder had no knowledge of the fraud/forgery? – do they get good title?2 possible solutions:

1) Deferred Indefeasibility – NOPE – good root of title that will become a good title when the next bona fide purchaser for value receives a good title (GIBBS)

- BC trial courts tend to favour this approach but not authoritatively2) Immediate Indefeasibility – YUP – according to literal wording of s.23(2)(i) Land Title

Act, as long as the owner didn’t participate in the fraud, they get good title (FRAZER)

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GIBBS, 1981 Australia PCWhy Read? Example of deferred indefeasibility

- NOTE – there is not solid answer about indefeasibility in BC, but you can try and apply Gibbs if you are feeling frisky!

RULE:- If property is sold by fictitious person, the buyer has the “root of title” only- “Root of title” can grow into good title if they sell it to another person- Deferred title = eventual good title (means that the title’s legitimacy is deferred until it

grows into a good title through a subsequent sale)FACTS:

- Lady from Scotland (Messer) owns land in Australia and gives her husband duplicate certificate of title and power of attorney to sell the property

- Messer leaves documents with a lawyer in Australia and goes back to Scotland- Lawyer creates a fictitious person and sells the property under the fictitious name to a

family – forged document- Family registers the title- Messer returns and lawyer is long gone- Courts give family the title and allow Messer to recover losses under insurance- Registrar who controls insurance takes it to court – arguing that family should lose title

and Messer should get title back so that they don’t have to give the insurance payoutISSUE:

- Who should get title to the property, when both parties are innocent?HELD:

- Family doesn’t get titleANALYSIS:

- Family dealt with a fictitious seller rather than a registered proprietor- Forged document should be void- Family should only get title if they had sold the property to another party

FRAZER v WALKER, 1967 NZ PCWhy Read? Shows us immediate indefeasibility

- Shows us that indefeasible title doesn’t protect against in personam actions against property owners

RULE:- Once a land title is transferred, immediate indefeasibility applies if there is no fictitious

person (based largely on policy considerations), even if the title comes from a void instrument

- Only official exceptions to immediate indefeasibility can override the registered title- Indefeasibility can arise from a void instrument

FACTS:- Frazers own a farm; wife sells property behind husband’s back, signing both their names- Sells it to a buyer, who then sell it to another buyer- Husband argues that he should get the title on the grounds of nullity – forgery = null doc

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- @ trail courts apply deferred indefeasibility (allow first buyers to have title because it ‘grew’ into good title with the second sale – gave root title to final purchasers)

ISSUE: - Does the husband or the new owner get title? Does deferred indefeasibility apply?

HELD:- New owner – applies immediate indefeasibility

ANALYSIS:- PC focuses on the first buyers and says that they actually got good title, rather than a

root title, therefore, immediate defeasibility rather than deferred applies - Distinguished the facts of GIBBS

o No fictitious person (if you have one, then go with Gibbs)- Even void docs can generally give good title if title is registered - Husband could have made a claim in personem against new owner

o In personem claim: allows court to give title to one person but then impose on them an in personem trust to hold it for the benefit of another (like equity courts used to do)

NOTE: - How do we deal with this in Canada? – depends on the province

POLICY ISSUES:- Why should we give the property to the buyer and not just compensate them, instead of

the original owner?o insurance should cover the party that has lost the property and insurance only

covers the original ownero if the new owner doesn’t get the property, then they will be left out in the cold

(no insurance coverage)

2005 Statutory Amendments to Land Title Act:NOW – s.23(2)(i) = “[indefeasible title is subject to] the right of a person deprived of land to show fraud, including forgery, in which the registered owner has participated in any degree”

- in literal reading is immediate in terms of indefeasibility - may be argued that this statement removes option of trying to apply Gibbs (would then cut out ‘volunteers’)- forgery = creation of a false document (specific example of fraud)- do not confuse forgery with crime of uttering (dealing with a known forged document as if it were real)- common law is clear that a false document gives rise to nothing – it is null and void

NOW – s.25.1 – re: void instruments – get title if you paid for property, but not if it was a gift(1) = “subject to this section, a person who purports to acquire land or an estate or interest

in land by registration of a void instrument does not acquire any estate or interest in the land on registration of the instrument”

- instruments that are void will generally not give title to anything (2) = re: EXCEPTION – even if the instrument is void you can get good title in fee simple…IF

a. you (the transferee) are named in the title and b. you are acting in good faith and give consideration

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Who is left out by s.25.1(2)?People who got it as a gift or in a will (volunteers), because they did not give consideration

Possible avenues for these people who are left out: Sell it on immediately – this will give rise to the application of Gibbs’ of deferred indefeasibility

Bar is divided on whether or not ‘volunteers’ should get indefeasible title: not clear on this!

ONE SIDE: You are dealing with one property and 2 innocent parties – if you have to pick one to lose out, why should it be the one who gave no consideration (the volunteer)???OTHER SIDE: government funds the insurance company, and why should govt. pay for the loss of the second respondent

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MORTGAGES AND INDEFEASIBILITY

PACIFIC SAVINGS, 1982 BCCAWhy read? Asks should principle of indefeasibility be inserted into a dispute about a pre-existing transaction that the parties knew about

BACKGROUND INFO TO HELP YOU UNDERSTAND THIS FUCKERY:Early dispute between borrowers and lenders

- When you borrow money on property, lenders do not own property outright, but have an interest in the property and can foreclose on it

- A borrower gives the mortgage to the mortgagee (bank)- Mortgagor can redeem the property by paying off all the costs and the mortgagee

would have to transfer the title back. - A mortgagee can foreclose on the redemption of the property by the borrower if

installments aren’t paid- If a borrower can’t come up with money, and order absolute is made, and the

mortgagee can sell the property- When the order absolute is made, the mortgagee gets the certificate of title

RULE:- indefeasibility is meant to help bona fide purchasers who have relied on the register,

not those who know what is hiding behind the “curtain”- If a notice of pending dispute is registered before sale to a second buyer, selling party

cannot rely on curtain- If notice registered after sale, curtain may protect the transaction

FACTS:- dispute between the borrower (mortgager) and lender/bank (mortgagee) – mortgage

terminology is attached to the land itself, which is why the owner is the mortgager, since they have mortgaged their land to the bank/mortgagee

- mortgagor defaults on installments- an order absolute is made and this makes the title go to the bank/mortgagee/lender- mortgagors file with the courts to reopen the transaction and file a notice of pending

dispute on the title first thing in the morning- that afternoon a new buyer comes onto the scene – would be subject to the notice of

pending dispute- Mortgagee tries to claim indefeasibility of title so that they don’t have to tell the new

buyer about the notice of pending dispute – wants curtain to be drawnISSUE:

- Did the foreclosure and order absolute give the lender indefeasible title?HELD:

- NoANALYSIS:

- Mortgagee didn’t get the title through purchase, but rather through an antecedent transaction

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- The mortgagee isn’t a new purchasing party – it can’t just rely on the register because they were a part of the original dispute

- Indefeasibility exists to help those who have gotten title to property on the faith of the register – AKA – for strangers that are buying with no knowledge of past disputes

KEY TAKE AWAYS: 1. No question of a 3rd party being involved in the case2. Concerned only with parties to an old/earlier transaction – transaction had reached a

point where they had a title and then tried to insert indefeasibility into the legal dispute - WHY? Can’t depend on the interposition of indefeasibility by complaint that there was a curtain drawn with registry

3. Indefeasibility is only meant to be available to those who have relied on the info on the register (because curtain hides past info)

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NOTICE OF UNREGISTERED INTERESTS – Doctrine of NoticeWhat is Doctrine of Notice?

- Equity courts test to determine if a person was a bona fide purchaser for value without notice

o Only a bona fide purchaser who hadn’t been given notice of an unregistered interest in the land would NOT have to honour the equitable interest

o If not a bona fide purchase OR if given notice, then would have to honour interest

How does s.29(2) Land Title Act try to interact with the of Doctrine of Notice?- Tries to free Torrens system of Doctrine of Notice in land title situations- s.29(2)(a)(b) = unless you are involved in a fraud, if you are involved in getting a land

transfer or land charge, you “are not, despite a rule of law or equity to the contrary, affected by a notice, express, implied, or constructive of an unregistered interest affecting the land or charge” – with some exceptions (c-e)

- (c) interest, registration of which is pending; (d) lease agreement for 3 yrs or less if actually occupied; (e) title is void under s.23(4)

- basically – too bad so sad for the person with an unregistered interest in propertyo takes away courts’ ability to provide justice for deserving individuals with

unregistered interests

How has s.29(2) REALLY interacted with the Doctrine of Notice?- Courts haven’t interpreted s.29 in a way that removes Doctrine – instead they have

interpreted it in TWO WAYS (first is most important):1. Focus on the “fraud” exception – and ask about when exactly the purchaser

really had notice… Interpret a rush to finish the deal when there is knowledge of an

unregistered interest as fraud – removes protection of s.29(2)2. Other than fraud, courts ask if an in personam imposition should be made –

in order to figure this out, they look to the conduct of the party- Gotta interpret s.29(2) in light of case law. – which hasn’t strictly followed the text of

the section- It comes down to timing and conduct – were you opportunistic? (Nicholson)

What is the trend in courts re: fraud determination? – see s.29(3)- if you don’t know about a financing statement, under the Personal Property Security Act

it doesn’t matter “whether or not [you] had express constructive or implied notice or knowledge of the registration”

- unclear what should happen if you don’t have notice just because you were careless- case law is moving towards a focus on ‘express’ or ‘implied’ fraud rather than

‘constructive’ fraud (constructive = lack of due diligence/some cases put carelessness in this category) - Nicholson

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CENTRAL STATION v SHANGRI-LA, 1979 BCSCWhy Read? Shows the mirror principle that underlays the Torrens System

- example of fraud argument surrounding s.29 and the use of a broad definition of ‘fraud’RULE:

- Fraud, as used in s.29 has a broad definition – at least according to courts- s.29 protects a purchaser from unregistered interests if they did not know of that

interest at the time of completion of the transaction (i.e. signing the contract) even if they become aware of this interest prior to registration

FACTS:- Purchaser received notice of a 5-year property lease before registration of the title, but

after the K was completedISSUE:

- Can the tenant enforce their lease?- Was the purchaser being opportunistic to the point that it should be classified as fraud?

HELD:- Nope – Nope

ANALYSIS:- Matters what they knew when K was completed, not what they knew when they

registered the title so they are protected by s.29- Purchaser’s actions were a normal way to protect their title- Opportunism would be if they had known about the lease before the K was

completed/the transaction occurred

ME’N’ED’S PIZZA v FRANTERRA DEVELOPMENTS, 1975 BCSCWhy read? Decided on differ. grounds than Shangri-la– uses in personam obligation to decideRULE:

- If you acknowledge, act upon, and benefit from an unregistered lease, then you will be required to honour that lease by an in personam order (equitable remedy)

FACTS:- Leasee thought his lease was registered against the title – leasing it out for 20 yrs- Purchaser knew about lease and purchase price had been adjusted based on lease- Leasor keeps paying lease to new owner- New owner finds out lease wasn’t registered and tries to get out of it

ISSUE: - Does the new owner have to honour the lease?

HELD:- YES- Requires Leasor to register the lease = recognition of an equitable assignment of

previous owner’s leaseANALYSIS:

- If lease had been registered, buyer would have had to honour it- Not registered - over 3 years, so, according to s.29(2)(d), buyer didn’t have to honour it- BUT court looks to conduct and asks:

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o How did you act after purchasing the property? Accepted rent Communications about payments were made Actions showed acceptance of the lease Had insurance changed to include lease

NICHOLSON v RIACH, 1997 BCSCWhy read? Gives us what to look for when we ask about when notice becomes fraud (s.29(3))

- Example of cases moving away from finding fraud simply because there was a lack of due diligence

RULE:- Participation in fraud = actual notice/arousal of suspicion without follow-up/with an

element of dishonesty in constructive notice- When determining when notice becomes fraud, we aren’t just asking about due

diligence – we are talking about intentional misrepresentation- Courts are looking for an act of dishonesty or lack of opportunity- No general duty to make enquiries – failing to do so does not amount to fraud

FACTS:- Mom and son are co-owners dealing with partition of property- Son assaults 3rd party who then brings civil proceeding against him and wins- Court orders that the son’s half interest in the property be used as payment

o it is hard to sell half interest in a home, so the creditor usually becomes owner of half interest and is then entitled to file for partition

- Mom doesn’t want to sell and split profits and doesn’t want to live with 3rd party!- Mom claims son used undue influence to get into title and claims son is trustee of his

share – she is the actual owner- 3rd party says she has indefeasible title because she had no notice of the ‘trust’ and it

wasn’t registered- 3rd party says court shouldn’t fix any defect on title to do with a trust because it isn’t one

of the exceptions and immediate indefeasibility should protect her title as long as she didn’t participate in the fraud

ISSUE: - Did the new owner have constructive notice of this alleged beneficial relationship

between the mom and son? If so, then did she participate in the fraud?HELD:

- MAYBE, but did not participate in fraudANALYSIS:

- Express notice given? NO- Implied notice given? NO- Constructive notice given (could they have done due diligence and gotten a fuller

picture)? MAYBE but failing to make further inquiries isn’t enough to equate constructive notice with express notice so this should be understood as fraud

- Needs to be something more than just carelessness – gotta be some sort of dishonesty or ‘willful blindness’ for it to be considered fraud

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o Example – are suspicious but purposely don’t as questions to get to truth

Fee SimpleWords of Purchase

- About who the gift is being given to

Words of Limitation - About what is being given to the giftee- Common law presumption that if no words of limitation are used, then the estate given

is a life estate

Residues = what is left in estates after all debts and specific devices and bequests have been taken care of

Property Law Act- applies to INTER VIVOS transfers- Courts will interpret inter vivos documents more strictly than wills- s. 19 Words of Transfer

o (1) Entrenches the fact that we can just say “to A in fee simple” instead of “to A and his heirs”

o (2) If there are no words of limitation (in fee simple/his heirs) or an explicit statement otherwise, the greatest possible interest in the land will be transferred (not a default of life estate, as in common law)

WES Act – formerly s. 24 in Wills Act- applies to WILLS transfers- Courts will interpret wills more broadly than inter vivos documents- s.41(3) Words of Transfer

o If there are no words of limitation or contrary intention, the greatest possible interest in the land will be transferred (not a default of life estate, as in common law)

o Note – with wills only intention required – different from inter vivos, which requires express language

- Courts look to the whole will document when determining intention of how an estate was intended to pass

RE: OTTEWELL, 1969, SCC RULE:

- Words of limitation will be interpreted as such, even if they were unnecessary - Don’t have to use words of limitation, but if you use them the courts will interpret them

that way- Most jurisdictions have statutes on this matter, but courts will always interpret this way

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FACTS:- Brothers made cross-wills dealing with same estate- Both said: “to hold unto him, his heirs, executors and administrators absolutely and

forever” and had nothing in it to provide for the event of one brother dying first- Fred, first brother, dies – will leaves whole estate (except small gift) to brother and none

to daughter- Frank, second brother, dies – will leaves whole estate (except small gift) to dead brother- If a will gives property to a dead person, at common law it has ‘lapsed’ and is invalid- An invalid will is administered according to the intestacy statute, which would divide it

up between all possible heirs- Fred’s daughter claims they should be interpreted as words of purchase (words about

“who”) to mean that Fred’s heirs are substitutes once Fred is dead ISSUE:

- Should the words “to Fred and his heirs to hold” be interpreted as words of limitation or as words of substitution, meant to substitute the daughter in the event Fred died?

HELD: words of limitation not substitutionANALYISIS:

- Should only consider surrounding circumstances to interpret the will if there’s ambiguity- No ambiguity in words of the will, so no interpretation needed- ‘Heirs’ = Words of limitation, so should be given effect as such

DISSENT:- will interpretation has 2 presumptions: against intestacy (no will); every word has

meaning- since words of limitation aren’t needed (could just say “to Fred in fee simple”), then we

don’t have to give the words their technical meaning- therefore, the word “heirs” should be understood as a word of substitution and Fred’s

daughter should get all of estate

Interpretation of wills – see SMITH ESTATE, 2010 (not assigned)- Modern approach to will interpretation:

o Read will as a whole – interpret terms in context of the factual situationo Apply the ‘arm chair rule’ to any lack of clarity or contradiction

Sit in a chair and think about the objectives and motives of the testator Can only do this if there is a contradiction or conflict! if you still can’t, look to the most recent

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Life Estate – RepugnancyREPUGNANCY SCENARIO:

- A to B absolutely- B can do what they want once they take possession, including pass the property on in

their will- Any statements/attempts to control the gift (eg – giving it to someone else) will be

considered repugnant

WALKER, 1925 Ontario Appeal - Court articulates the steps of interpretation- See SHAMUS for criticism that court didn’t look at the whole document when finding

intent as it should have – HOWELL – criticism is misplaced and court did look to whole will. It’s a good case as long as you don’t understand the approach as failing to look at the whole will. It did. Don’t forget that

RULE:- It is legally impossible to give something absolutely and then try and control its destiny- If you want to control the estate, then you need to give some type of a limited estate- HUGE powers of encroachment indicate an intention to give estate as an absolute gift

FACTS:- Guy dies and leaves property to wife, adding a statement regarding a ‘gift over’ –

“should any portion of estate remain after wife’s death (undisposed of), it shall be divided up among…”

- Wife leaves property in her will to beneficiaries- Two groups of beneficiaries fight about whether it was a life estate or absolute gift

ISSUE:- Is the gift a limited gift (life interest or usufructuary interest) or was it an absolute gift

(fee simple)? o If absolute, then the statement about the gift over (dividing remaining portion)

will be repugnantHELD:

- Fee simple and statement is repugnantANALYSIS:

- principles of precedent only relate to the principles you apply, and not the outcomes from previous cases

- If there are conflicting indications, you must determine what the will’s predominant intent

- Classes of gifts:o Complete/absolute gift is dominant – other statements about a gift over are

repugnanto Gift over is dominant - limited gift of life estate with successive interests to other

parties – no encroachment (can’t sell) o Compromise (mini-class) – life estate given with ability to encroach

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- NOTE – power of encroachment in this will was so broad that it is hard to argue that it was intended to be anything other than an absolute gift

RE: RICHER, 1919 Ontario Appeal – example of a situation of pure interpretation of the willRULE:

- Intent of the testator trumps in interpretation of a will, interpretation is NOT based on precedent or the ‘usual’ meaning of a word

- Free use = fee simple unless contrary intention exists in willFACTS:

- Will gives “free use” of property to widow with the intention that the remaining “unspent” estate will go to their kids

ISSUE:- Should the gift be considered absolute gift in fee simple or as a limited gift of a life

estate with remainder and fee simple going to the kids?HELD:

- Limited gift for a life interest with power to encroach on earnings/products of landANALYSIS:

- “free use” typically means fee simple unless otherwise intendedo expectation that kids would be involved eventually show contrary intention

- “unspent” – court struggles to apply the term to land, because it usually only applies to personalty

o decides you can use resources from the land, therefore you can sort of spend ito allows widow to encroach on monies or chattels gotten from land

SHAMUS, 1967 Ontario Appeal RULE:

- court must be as true to a will’s intention as possible – not in order to rewrite an ambiguous or badly written will, but to give effect to testator’s intentions (sit in the “arm chair”)

FACTS:- Widow is given all property in a horribly made home-drawn will – hers until kids hit 21

and if she remarries then she gets the same share as the kids. Unclear what happens if she doesn’t remarry

- Widow doesn’t remarry but maintains inherited business without keeping accounts because she thought it was hers – eventually sells it and freely uses profits

- As kids hit 21, they oppose the widow’s free use - @ trial – life estate with widow and right to encroachment until youngest hit 21

ISSUE:- Did the widow get a life estate with power of encroachment OR did widow merely get a

lease until kids hit 21?HELD:

- life estate with unlimited right to encroachment unless she remarriesANALYSIS:

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- court looks to all circumstances and finds that husband intended for wife to be taken care of

- states it isn’t the court’s job to rewrite the will, just to be as true to the intention as possible

- criticizes WALKER – says it didn’t look at whole document – HOWELL disagreeso says WALKER found predominant intent by focusing on some clauses over otherso HOWELL says they didn’t prioritize certain clauses, just touched on them as it

looked at the whole will

TREMBLAY – not assigned – how to interpret an INTER VIVOS document, as opposed to a WILLRULE:

- In DEEDS, the most important part is the granting clause – ‘I hereby grant…’ - In WILLS, no clause is of greater importance

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Life Estate – CreationBreak this up to sort of follow headings from Syllabus so I am sure I have everything in there:

1) Creation by act of parties – note s.19 Property Law Act and s.41(3) WES Act2) Creation by statute – note Land (Spouse Protection Act) and Part 3 WES Act –

particularly ss.21-26 – SEE CHART @ p354-356 in text – formerly s.96 Estate Admin. Act

BIG QUESTIONS:- Who are you giving it to?- What are you giving?

o Are you giving a gift to a person and then trying to control what they do with it?o Are you trying to control what the giftee does with it after they die too?

- If you are giving less than an absolute gift, what is the measuring line of the lesser estate?

GENERAL RULES IF YOU WANT TO LEAVE LIFE ESTATE:- Property Law Act (s.19) & WES Act (s.41) – if you want to give something less than fee

simple, then you must indicate this using words of limitation (no set words to use)- Identify the measuring line of the estate being given- Interpretation of document may be done to understand testator’s intended type of gift- Interpretation will NOT be based on stare decisis – word “spent” won’t be understood

the same way in two wills, but the principles applied in other cases can be used as precedence (WALKER)

- Repugnant statements will not be considered by court (see ‘Repugnancy’ doc)- Despite existence of repugnancy, a testator can still give defeasible property subject to

conditions (HILTZ)- LIFE ESTATE = estate for length of life; nothing can pass on after death- AUTRE VIE = life of another

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Life Estate – Rights of RelationshipWASTEWhy?

- With life estates there is a risk that a life tenant will exploit the property in a way that reduces its value for successive takers (remaindermen or revisioners – those with the ‘ultimate interest’)

What?- Law that controls how much exploitation can occur during the life estate holding in

order to balance interests of life interest holder and ultimate takero Rights of life interest holder: exclusive possession, general use in fee simple –

gets income from propertyo Rights of ultimate taker: receive land in substantially (but not completely) the

same form as when it was granted to the life holder – gets capital of property- 2 distinct categories: legal and equitable

Legal Waste @ Common Law- LEGAL WASTE: permanent injury or material prejudice to ultimate taker- FOCUS: relationship between life holder, reversioner and/or remaindermen - Divided into voluntary and permissive and ameliorating waste- Voluntary – intentionally doing something that causes waste – active

o RULE = life holder is generally liable and cannot be excused unless the grant contains an exemption expressly permitting waste (if so, try equitable waste law)

o may include failure to pay taxes – in between permissive and voluntary- Permissive – involuntarily/unintentionally doing something that causes waste – passive

o RULE = not liable unless something specific in the grant obliged them to actively avoid waste

o Harm caused by permissive neglect – falling into disrepair because of failure to do maintenance/repairs

o may include failure to pay taxes – in between permissive and voluntary- Ameliorating – changes to property that enhances/increases its value – active

Not necessarily damaging but may be unwanted by ultimate taker Best to prevent changes before they happen If they do, show that the change altered the character of the property to

the point where it is being passed on in form different than was received

HILTZ, 1959 NSSC – HOWELL LOVES THIS CASE – legal waste in action with a dash of defeasible estateRULE: Life holder has an income interest and can make ‘prudent use’ of the land as long as they preserve the capital for the ultimate taker – can’t permanently injure propertyFACTS:

- Mom reserves life estate for herself and transfers remainder to her daughter

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- Qualified gift to daughter – ‘unless daughter pre-deceased mom’ (condition subsequent), in which case it would revert to mom as a defeasible estate

- Mom authorizes sons to cut down trees- Action of waste brought by daughter because it is the only way she can protect the

value of the estate ISSUE:

- Can daughter bring action of waste against brothers if she only holds a future interest?- Is mom allowed to cut down the trees?

HELD:- YES, because they permanently diminished or damaged her future interest – can’t bring

action claim against bros because she doesn’t have present interest- NO

ANALYSIS:- applies modern legal waste test:- Has there been an injury to the inheritance (remainder or reversion)? – question of

fact LEGAL WASTE = permanent injury or material prejudice to ultimate taker Look at nature of property and activity and local circumstances Has injury gone beyond an income interest and cut into the capital? Old English law of waste = okay to take timber needed for repairs/fuel In case –cutting down of trees is unacceptable use of land because the

timber is the main value of the land

Equitable Waste- MAIN TAKEAWAY: in the traditional context, equitable waste will apply a test of

wanton destruction. In non-traditional context, equitable waste will apply a test of reasonableness to determine amount of destruction

- EQUITABLE WASTE: reckless or wanton waste- Very different from legal waste – much broader concept- Can apply in context where legal waste also applies (can limit legal waste)- Uses waste for remedial purposes- Seen earlier in FN property – Lamer talked about the inherent limit in relation to

aboriginal land – analogous to equitable wasteTWO APPLICATIONS

1) TRADITIONAL: Life holder and ultimate taker relationship in which legal waste is allowed (granting document allows it) but the life holder allows absurd amount of waste

o Limits Legal Waste – just because it’s legal doesn’t mean you can be an assholeo Can be applied if life holder engages in wanton destruction (executes right to

create legal waste in a wanton and extreme fashion)- S.11 Law and Equity Act

o Granting instrument of an estate with an allowance for legal waste doesn’t give you the right to commit equitable waste unless express indication to contrary

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If there is such an indication, then it brings up the issue of repugnancy – total right to destroy is pretty much like having the property in fee simple

- VANE, 1716 Eng.o Dad gives himself life estate and leaves castle and remainder to sono Gets mad and starts to demolish castle and sell materialso Equity grants son an injunction against further damage and orders repairs

2) NON-TRADITIONAL: Applies to more than life holder and ultimate taker relationshipso One party has possession but another has a simultaneous interest (tenants in

common or join tenants)o Used as a remedial vehicle

KENNEDY, 1918 BC Co. Ct. – equitable waste in actionRULE: In a situation where the party in possession does not have the right to commit legal waste, equitable waste will not require wanton destruction before it applies – lower threshold FACTS:

- Non-traditional relationship – not a life holder, but still an ultimate taker- Legislation let a city own and sell property if taxes went unpaid - Year grace period before City could sell, in order for party to try and redeem possession - Owners took everything out of house they could and city claimed it was waste even

though there was no life-holder and ultimate taker ISSUE:

- What kind of waste applies, since not necessarily wanton and reckless and non-traditional relationship?

HELD:- Equitable waste

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LIABILITY FOR TAXES AND REMAINDER INTERESTS

MAYO, 1928 ManitobaRULE:

- Life holder can’t benefit from their own failure to keep obligations to the reversioner- Life estate holders hold the corpus of the estate in trust for the reversioner and

therefore must take reasonable precautions to preserve itFACTS:

- Son gives life estate to his mom, which will revert back to him when she dies- Son sells his interest in the reversion/assignment of the reversion to the P- Life holder has an obligation to pay taxes – mom doesn’t meet the obligation- Municipality takes property and sells it- Daughter buys house from municipality, pays taxes and assigns the property to mom- Mom applies for title to land in fee simple- If fee simple title is granted, it would exclude P – who is the reversioner

ISSUE:- Can a life-holder exclude/cut-out a reversioner or remainderman?

HELD:- NO

ANALYSIS:- Court can’t let the life holder benefit from failing on her obligation to pay taxes- Life tenants are obliged to pay taxes- Mom had obligation to preserve the property for the reversioner (daughter could have

sold it to anybody else)- Court applies 2 equitable maxims:

1) Equity looks at the situation as though what ought to have been done was done Since the mother should have paid the taxes, equity will consider that she

did2) Equity imputes an intention to fulfill an obligation

Equity implies that mother intended to fulfil her obligation, so it says that she can have the fee simple, but that she must give it to P when she dies

MORRIS, 1982 Ont. HCRULE:

- Partition can only be used for co-interests and can’t be used on successive interestsFACTS:

- Guy wants to keep farm in family but has no kids- Wills farm to widow as life estate & remainder to sister (presumably his sister has kids)- Widow is stuck on farm by herself – claims estate is providing her no income after

maintenance and taxes- Asks to be allowed to sell the farm under the Ontario Partition Act

o Act – allows partition if there is co-ownership, co-reversioners or co-remainders

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- @ trial orders partition – property must be sold and then the court will divide the profit accordingly

ISSUE:- Can a life estate holder get an order of partition?

HELD:- NO

ANALYSIS:- Doesn’t follow the rules of the Act – not a co-XXX (2+ people must have same interest)- Sale can only be ordered if the life estate holder and the ultimate taker agree to it –

otherwise it defeats one party’s interest- Alternatives:

o Wills Variation Act – life holder can seek assistance in a similar situation b/c the Act allows surviving spouses and kids to contest a will on the basis that they haven’t been fairly provided for – Howell likes this – must happen within 180 days

o Husband could have just created a trust for the widow to make sure she was provided for

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FAMILY/SPOUSAL INTERESTS

HISTORY LESSON – pulled from Term 1

4 Stages of Marital Unity Legal Development

2. MARITAL UNITY When a woman and man married marital unity occurred = the estates joined in

ownership for the duration of the marriage, then after the marriage her part of the estate went back to hero CLEAR SLOT IN TIME - marital property existed during this time

Dower = When the husband died, she got 1/3 of husband's portion of estate – subject to some conditions

Curtesy = When wife died he got 100% of wife's portion of estate – subject to some conditions

3. EQUITABLE POSITION – substantially increased married woman’s legal capacity Trusts could be set up with trustees for women with specific requirements that the

property stick with the wife alone Allowed property to be settled in favour of a married woman in her own right as an

individual beneficiary Really only available to the upper class – cost a lot to set up this type of property interest

4. SERIES OF STATUTES - eg. Married Woman's Property Act, 1882 Mid to late 19th century Adopted equity rules and said removed common law concept of marital property (as

created by marital unity) Let married woman hold land like unmarried women, who had same rights as men

5. MODERN STATUTES – ALWAYS LOOK TO TRIGGERING EVENT IN LEGISLATION Focussed on distribution, notwithstanding who owns what - distribution > title Property is shared when marriage breakdown occurs, regardless of who actually owns the

property Children and spouses can now contest a will to argue that dispersal of property is unfair 1999/2000 – Omnibus legislation

marriage now includes marriage-like situations did not define what this means – 2 yr. timeline; left to courts to define the term

Wills Estate and Succession Act – now in effect and encompasses a lot of stuff BEST EXAM ANSWERS WILL REFER TO WES ACT Replaced Wills Variation Act & Estate Administration Act

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LAND SPOUSE PROTECTION ACT – check for provisions needed in coursebook

TRIGGERING EVENT: registration by the non-owning spouse- Non-owning partner in a formal marriage has to register their interest with Land Title

Office against the ‘homestead’ - s.3 – without registration, the Act doesn’t apply- Homestead = land/interest in the other spouse’s name that has a home that couple live

in now or have lived in within the past year- Registration can only happen after couple has been married a year - my notes say 2 yrs?- Once the spouse has registered, the owning spouse can’t dispose of the homestead

inter vivos without consent in writing from non-owning spouse- S.4 – when owning spouse dies, surviving spouse entitled to life estate despite any

testamentary (will) dispositiono if owning spouse gave land away in will, the giftee must honour the life estate of

non-owning spouse- NOTE: Family Law Act s.388 amends this act to say spouses instead of husband/wife;

s.389 extends the scope of this act to cover marriage-like relationships

FAMILY RELATIONS ACT & FAMILY LAW ACT- only applies to separation, not death, b/c not a triggering event

TRIGGERING EVENT: Marriage breakdown/separation (s.81(b))- These 2 acts only deal with property division – a Divorce Act deals with the rest

Applies to: formal marriages & marriage-like relationships (doesn’t define this or when it starts)

s.81: equal entitlement and responsibility to family property and family debt- (b): at point of separation – right to an undivided half interests in all family property as

a tenant in common and equal responsibility for family debto Means that ‘property pool’ closes on date of separation

s.95(1): allows judicial discretion to order unequal distribution ONLY if there is SIGNIFICANT unfairness – s.95(2): gives list of things that could make it unfair – very high threshold in order to keep people out of courts b/c it’s hard to justify litigation if hard to get favourable verdict

- Court has discretion despite property ownership regime to grant occupancy of family residence to one spouse (where in statute??)

s.84: property = only property acquired from the date of the START of the relationship to the SEPARATION (includes appreciation of value on property owned before, but appreciated since START – this is added to the family ‘property pool’)

- Hard to determine when a marriage-like relationship beganExceptions: gifts; inheritances from 3rd parties Part 6 of Family Relations Act = carried over into this Act

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WALSH, 2002 SCC – shows the SCC’s support of ‘choice’ – HOWELL LOVES THE CHOICE OPTION!RULE:

- It is not discriminatory to allow people the choice of whether they will opt into the property regime of the Act (legal consequences of marriage)

FACTS: - Couple splits from 10 years of living together and two kids- Because not formally married and hadn’t ‘opted in’, the law did not automatically split

their property 50/50 (according to s.81b Family Relations Act)- Woman didn’t own anything so her only option was to sue under constructive trust - ???- This kind of litigation is time consuming and expensive- She argues Act is discriminatory against non-traditional marriage like relationships

ISSUE:- Is the Act discriminatory against marriage-like relationships because it only gives formal

marriage a legislative regime to deal with property division upon marriage breakdown?HELD:

- NOANALYSIS:

- Couple had choice to marry and choice about whether or not to opt into the ‘property regime’ of the Family Relations Act if they didn’t choose marriage

- Decision to marry involves decision to take part in legislative scheme to split property on marriage breakdown

- Constructive trust exists to help those not in regime (no opt-in, non-marriage)

CRITICISM: - SCC essentially ignored possibility of people being in non-equitable positions and always

having the choice of marriage- Pre-gay marriage – but SCC didn’t address how gay couples were discriminated against

because they couldn’t marry – not a choice issue

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WILLS, ESTATES AND SUCCESSION ACT – chart in casebook p.356 Part 4, Division 6, s.60

EXAM – consider why we might want to seek restraint from judicial activism

Note: Can’t K out of WES Act, but courts will take pre-nuptial agreements into account when exercising discretion to adjust

TRIGGERING EVENTS: death without a will (s.3); death with a will that has failed to make adequate provisions (s.4)

- Courts have broad discretion to limit testamentary autonomy and vary the will as it thinks is adequate, just and equitable in the circumstances

s.2: defines spouse – formal marriage/marriage-like (for at least 2 years and includes same sex)

s.3: introduces notion of a ‘preferential share’ instead of a ‘life estate’- If only a spouse, they get estate- If there are descendants, then spouse gets preferential share- If there are descendants from both spouses, then the preferential share is 300,000- If descendants are from just one spouse, then preferential share is 100,000

s.4: court can order a provision that it thinks is adequate, just and equitable- Very tight time period for variation – must be within 180 days of the will being

authorized for administration

TATARYN, 1994 SCCRULE:

- Courts can vary wills, even in the absence of a strong need in order to make sure that distribution of estate is adequate, just and equitable

FACTS: - 350,000 estate with a surviving wife and 2 adult sons- husband gives life estate to widow and rest to the younger son - eldest son gets nothing

ISSUE:- should the will be varied?

HELD:- YES – give widow house in fee simple and life estate. On her death, 1/3 to older son and

2/3 to younger sonANALYSIS:

- Shows adequate, just and equitable being interpreted in different ways- Old way – meant just enough to meet the basic needs so that the parties didn’t end up

on welfare- New way – courts use a broader marital/parental moral duty test to allow them to give

an equitable share in the absence of need

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o Two considerations: Legal Rights/Obligations – there is a continuing legal duty to support

spouse and kids after you die. It is a way to avoid unjust enrichment by ignoring contributions made during a lengthy relationship or ignoring an independent kid’s contributions or ignoring the ability of the survivors to support themselves

Moral Obligations/Social Norms – goes beyond need and is used mostly for huge estates. To consider: size of estate, preservation of a standard of living that the spouse or kid has grown accustomed to – totally subjective way to create testator obligations after death

- Testator autonomy exists but isn’t absolute – Limited by Wills Variation Act- Court looks to WALKER, 1931 – test for judicious father to decide how to discharge the

spousal and parental duties of a testator- Court considers why adult children would be included if legislation only meant to

provide for those in need – this is where it gets its interpretation of ‘adequate’ instead of ‘necessary’ provisions

- BIG PICTURE CONSIDERATION: there is a trend towards diminishing testamentary autonomy when marriage-like situations exist

o If we link with social norms, could we not argue that it is a social norm for marital acquisitions to be split?

HOWARD, 1997 BCCA- Shows court rejecting chance to use Wills Variation Act

RULE:- If you are not an economic unit based on mutual contribution and benefit, then the

court won’t vary the will to treat you as suchFACTS:

- Couple married later in life and had separate assets – each was financially independent- Pre-nuptial said that if either died, their estate would go to their own kids- Husband died and wife brought action for variation

ISSUE:- Should court vary the will?

HELD:- NO

ANALYSIS:- They were not an economic unit and hadn’t entered into a relationship of mutual

benefit and contribution – as evidenced by pre-nuptial agreement- Neither had, no should have had, any expectation of gaining anything from the other’s

estate

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PICKETTS, 2009 BCCARULE:

- Will variation is based on lots of subjective factors:o Size of estateo Moral obligationo Contributions of the P to the testator

- Will variation can go way beyond ‘generous’- When deciding will variation, it is helpful to look to other Acts that provide for division

of marriage property to determine what is appropriate – stick within your jurisdiction though

FACTS: - Man dies at 96 and leaves 18 million dollar estate- Had been in a marriage like relationship for 20+ years- Left his “friend” 2000 a month for life, a condo, 100,000 in household goods, use of

condo in Hawaii for 3 months of the year- Left 40% to eldest son and 60% to youngest son- Sons added a chunk of cash to ‘friend’ fund

ISSUE:- Should court vary the will?

HELD: YES – she should get 5 million and 100,00 per yearANALYSIS:

- Man told friend he would care for her as if she were his wife- Strongly considered: size of estate; lack of legal obligation to grown sons; care she had

given as his health failed over a lengthy period; that she had given up her career when she met him

- Analogizes with family legislation to ask what wife would have gotten had they split up- HOWELL CRITICISM: seems as though we are writing testamentary autonomy out of the

equation – this is a major doctrinal defect!

HALL v HALL, 2011RULE:

- When deciding to vary a will the court can look to relationships and size of estateFACTS:

- One son estranged from parents and one not – son had left and stayed out of touch- Smallish estate – 300,000- Mom did not want estranged son to be told when she died- Mom made a new will that didn’t include estranged son the day before she died

ISSUE:- Should will be varied?

HELD: NOANALYSIS:

- Looked to animosity and context and size of the estate- No need to treat people all equally

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NOTE: If a testator had a will and then changed it just before death to a will that cuts someone out, there is a suggestion of irrationality. Also, people may have been hovering around the death bed and pressuring them

FRAUDULENT CONVEYANCE ACT- Designed to protect creditors b/c in insolvency and bankruptcy proceedings one creditor

is often paid off instead of others before the triggering act of bankruptcy occurs- Act makes it so you can’t make a transfer in order to avoid paying off certain creditors- What the hells does this have to do with wills variation?

o If someone gives property away before the triggering event of their death so that some people can’t get anything, this is a form of fraudulent conveyance

- MAWDSLEY – argument made that beneficiary to testator’s estate is like a creditoro Not exactly the same, because a beneficiary may get funds and are in a position

of expectation while a creditor should get funds and have a present right of payment

o TAKEAWAY – be careful with gifts while you are still alive because some cases suggest that the Fraudulent Conveyance Act will apply

AUSTIN, 2007 BC- Shows court trying to define marriage-like

RULE:- Common law and marriage-like are legally different- Should use term marriage-like because it is what the legislation says

FACTS:- Man married to wife but separated for 6 years- Now lives with new woman- Dies intestate (no will but estate to distribute)- Wife argues he couldn’t have entered a common-law marriage OR a marriage-like

relationship while still marriedISSUE:

- If you are already married, can you enter into a traditional common-law marriage or into a marriage like situation?

HELD:- Common law? NO (it is a legal marriage under Federal Marriage Act)- Marriage-like? YES – tough because there is not statutory definition

ANALYSIS:- Marriage-like?

o Financial dependency – b/c marriage = economic unito Relationship structure – cohabitation not needed but makes differenceo Relationship activities – do things together?o Public displays of marriage-like stuffo Shared bank accounts/vacations together/sex/provide each other with social

services/mutual intent

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o If one was disabled, would the other look after them?

KROMPOCKER, 2008 BCSCRULE:

- Courts can take conduct over subjective or conscious intentions when deciding if a relationship is marriage-like

o Ex – if someone is living with someone and says they don’t want it to be a marriage-like relationship, it can become one without them knowing or authorizing or liking it

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Co-OwnershipWHAT IS IT?

- 2+ owners of present or future interests in real or personal property- Ownership is of the same interest at the same slot in time- Can be created inter vivos (A to B+C in fee simple) or by will (A to D for life, remainder

to B+C in fee simple)- 2 Types:

o Tenancy in Commono Joint Tenancy

- Both types have:o Unity of possession = each owner is entitled to possess the wholeo Destruction by agreement or partition:

agreement = parties agree to split partition = parties do not agree and court orders property to be split

Tenancy in Common:- Ownership model: Each party owns own share, which may be unequal in size- Succession: Individual succession – can be passed on however each party likes, inter

vivos or intestacy (by will); goes to estate on death- Unity: Unity of Possession- Fairly common and the preferred form of co-ownership today

Joint Tenancy- Ownership model: Each party owns the whole equally- Succession: Right of Survivorship –

o key feature of joint tenancy and very different from individual successiono without possibility of survivorship, there is no joint tenancy (no possibility of

survivorship if: A+B for duration of their joint lives; possibility of joint tenancy if to A+B for A’s life, because possible that B dies first and A could get survivorship)

o when a party dies and leaves joint tenancy group, the shares get bigger for remaining parties, unless there is severance

o survivorship can be avoided if a joint tenant severs their interest inter vivos (can’t be by will)

- Unities: if unity of title, interest, or time is violated, then there is severance1. Unity of possession2. Unity of title – JTs must get title from the same instrument – transfer or will3. Unity of interest – duration, size, type (one can’t have freehold and another

leasehold) 4. Unity of time – vesting interest must occur for all joint tenants at the same

time- Severance: if an interest is severed, it converts joint tenancy to tenancy in common

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o severance occurs when unities of title, interest, or time are violated/severedo can be done in secret in BC, although it isn’t recommendedo secret severance is usually done when someone has limited options and limited

time to express their desires- If there were 3 owners, A + B + C, A sells their interest to D, D and ABC are now tenants in

common (so ABC have equal shares of 2/3 and D has a separate, distinct 1/3 that D can pass on through intestacy—survivorship still applies to ABC) ???

- Property Law Act s.18o (1) joint tenant can transfer to themselveso (3) transfer to yourself counts as severance, same as if you transferred to

someone elseo (4) A to A+B jointly counts as severance – creates co-ownership, but not

necessarily joint tenancyWhat if joint tenants die simultaneously?

- Wills Estate and Succession Act s.10(2)o Simultaneous deaths = within 5 days of each other. If this happens, then it

becomes tenancy in common and each portion passes to estateo More than 5-days survival of a party, then they are the survivor, even if they die

How is co-ownership created?Common Law Equity Statute

-preferred to create a JT if 3 extra unities were present-based on doctrine of tenure and Lord’s desire to be certain they would get tenure-this category is pretty much gone since 1660-has been subsumed by equitable rule

-preferred to create TinCs to avoid ‘chance’ of survivorship-never knew who would die first and who would get property-deals with personal propertyPROCESS to create TinCs:1-Interpretation-1 of 3 unities is absent, then TinC-express terms intending TinC-implied terms – words of severance that go against JT – ‘equal shares’/’half-and-half’-Bancroft & Winchester2-Substantive Equitable Remedy -co-owners stay JTs at law-equity can substantively impose TinC and require JTs to act in personum as TinCs

-Property Law Act s.11-prefers TinCs-11(3) if interests not stated, presumed to be equal-any instrument created after April 20, 1981 is a TinC, unless contrary intention appears in the document-ex – reference to survivorship-only applies to land transferred or devised in fee simple – so, common law and equity apply to personal property-Robb v Robb

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-Bull v Bull

BANCROFT EASTERN TRUST CO. v CALDER, 1936- Illustrates 2 outcomes for personal property- Reminds us to be careful when using the word ‘issue’

RULES:- For personalty, if words of shares or severance then it will be TinC – if not, then JT- If land, it will be TinC unless the document indicates otherwise (this isn’t in the case,

but rounds out the idea of what the assumed outcomes will be)- If wording says “leave to my issue,” under succession this means all lineal descendants- If shares go straight to 2 individuals = per capita- If some shares go to a 4-way split of a half share = per stirpes

FACTS:- Testator left life estate in realty to widow, with residue cashed out and invested in 2

equal shares- Half to widow and half to be split between 4 kids (1 kid is dead and had 2 kids)

ISSUE:- How should the court categorize the co-ownership relationships?

HELD & ANALYSIS:- 2-way split = TinC because explicitly refers to equal shares- 4-way split of the half = TinC because explicitly refers to shares for 4 kids- 2-way split of the eighth for the grandkids = Joint Tenancy because no reference to

equal shares

WINCHESTER v MCCULLOUGH, 2000RULES:

- “Jointly” isn’t conclusive indication of intent to create a JT – needs to also be an intent for survivorship

- Reference to successorship indicates an intention that there not be survivorship, which is required for JT

- If ambiguity, err on side of TinCFACTS:

- Will = “to son and 2 daughters to theirs jointly and in equal shares”- Substitution clause in the will used the term “successor”

ISSUE:- JT or TinC?

HELD & ANALYSIS:- TinC because jointly isn’t conclusive indication of intent to create a JT – needs to also be

an intent for survivorship

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BULL V BULLRULES:

- Where 2 people are in possession of a property to which they have both substantially contributed and there is a clear intention that both should have possession, even though only one name appears on the deed, courts can impose TinC in equity without altering the JT relationship law

FACTS:- Mom & son buy house together but son is sole owner on the deed and @ common law- Son pays more, but mom pays significant amount- Son marries and tries to kick mom out

ISSUE:- Can mom get the boot?

HELD:- NO

ANALYSIS:- Courts can apply TinC as an equitable remedy, so that mom and son are still JTs at law, but will

be treated as equal partners- In a TinC relationship, son would need to use partition to get rid of mom- For partition, property would have to be sold to divvy it up- If sold and divvied, each would be reimbursed according to contribution

GENERAL RULES RE: EQUITABLE APPLICATION OF TinC:- Commercial transactions (partnerships) that result in co-ownership are presumed to be TinCs in

equity- Mortgagees are presumed to be TinCs in equity- Unequal investors in JT relationship who are in shared possession of a property will be

presumed to be in TinCs in equity

ROBB v ROBB (not assigned?)RULE:

- TinC only applies to land, unless there is clear contrary intention- @ common law, if personalty granted to 2+ people with no words of severance, they

will be JTs – except equity will treat them like TinCs if property was purchased in unequal shares, is a mortgage and co-owners are mortgagees, or is owned by business partners

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Co-Ownership – Co-Owner RelationsShare of Profits

- Property Law Act, s.13.1 o pure rents should be divided equally between JTs or according to shares of TinCs

or equally if courts have imposed equitable TinCo Co-owners can bring actions against other JTs or TinCs to determine if they have

been receiving more than their just/fair share of the profits = statutory right, not common law action

SPELMAN v SPELMAN, 1944FACTS:

- JTs own 2 properties – Vancouver & Victoria - Vancouver property – complicated co-ownership & co-tenancy of boarding house by JTs

o One JT is runs the boarding house and other is away for 6 years o JT returns, demands acct of rent & profits so she can sue for occupation & rents

One Two ThreeIssue Does the sole occupier of a

property owned via JT or TIC have to provide rent to other co-owners?

Does the sole occupier of a property owned via JT or TIC have to share the income received from ‘pure rent’?

Does the sole occupier of a property owned via JT or TIC have to share income received from a business carried on at the property?

Held No. Yes. No.Rule Each co-tenant has the right

to possess the whole of the property, so they don’t have to provide rent to the other co-owners.

Proclaimed by statute. (see above) Should be divided into the proportion of the share proportion. Each owns the property so each entitled to income from pure rent.

When one tenant is receiving a return for his own labour and capital, they are not receiving more than their ‘just share’ and the co-tenants have no right to it.

Exception If the occupying owner has ousted the other owner, either actively or constructively, then there will be an obligation to pay for rent—OR if there is an agreement in place that rent will be paid.

Court can try to divide up what income is coming from the labour and what is coming from a more ‘pure rent’ source—issue here b/c it was a boarding house BUT court treated whole thing as business anyway.

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SHARE/RECOVERY OF EXPENSES:

Obligations in Common (owed by co-owners to 3rd parties):- @ CL, co-owners may be jointly obligated for expenses to a 3rd party (mortgage)- @ CL, owners can’t compel other co-owners to pay for repairs or recover voluntary

expenses, but statute provides action- Property Law Act s.13 and s.14 = must share expenses proportionally

o s.13 – if co-owner had to pay more than their proportionate share (mortgage, money, rent, interest, taxes, insurance, repairs) b/c other registered owner defaulted, they can apply for relief under s.14

o s.14 – under s.13, court can order lien or sale on defaulting owner’s interest. Applicant may buy defaulting owner’s interest if court orders a sale

- See Bernard v. Bernard

Other expenditures = improvements/unnecessary renovations- See Leigh v. Dickeson

BERNARD v BERNARD, 1987shows how equity acts on partition in regards to common obligations RULE:

- Partition is an equitable principle, so a court may find that an occupying co-owner is liable for occupation rent if they make a claim for expenses when a property is being sold under Property Law Act s.14

FACTS:- Husband and wife settling a JT and figuring out how to divvy up occupation rent,

percentage of partitions, etc…- Co-owners owed a common obligation to a 3rd party mortgagee- Wife had been living there and paying mortgage for 6 years on her own- Wife brings action under Property Law Act, s.13/14 to re-coop her expenses

ISSUE:- How should court divvy up expenses owed to 3rd party on partition of JT?

HELD:- Balance expenses with cost of occupation rent

ANALYSIS:- Generally, b/c owners are entitled to possess the whole, they can’t owe other co-

owners rent unless they have ousted them. Also, non-occupier has no right to collect from occupier.

- BUT, partition is an equitable principle- It wouldn’t be fair to make non-occupying party pay for all expenses without having

gotten the benefit of living in the house- SO, the wife is liable for occupation rent

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LEIGH v DICKESON, 1884shows how to deal with expenditures other than obligations in common - @ request of co-owner or @ unilateral choice of one co-ownerISSUES:

- If the expenditure was made @ request of other co-owner, what happens?- If the expenditure was made unilaterally @ choice of one co-owner, what happens?

RULES:A. Made At the Request of Co-Owner (A asks B to put in a pool)

o B can now recover share of expenses from A immediately. B. Voluntary Payments (B unilaterally puts in a pool)

I. A is given the option to adopta) If A adopts it: must contribute.b) If A rejects it: don’t have to contribute

BUT at partition, equity will require contribution if change results higher price Would be unjust for A to benefit from the increase in value without contributing

II. A is given no option a) At common-law: A won’t have to contributeb) At equity:

At partition, equity will require contribution if change results in higher sale price Would be unjust for A to benefit from the increase in value without contributing

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Co-Ownership – Severance and PartitionCommon exam mistake to not distinguish between severance and partition!

SEVERANCE:- WHAT: Converts joint tenancy to tenancy in common; removes survivorship- SCENARIO: often litigation over survivorship – does property go to survivor or heir?- WHEN – 3 ways:

1. One of the three additional unities (title, interest, time) is destroyed 2. By mutual agreement – either actual agreement or ‘course of conduct’

agreement (both parties treat the tenancy as though it is a tenancy in common)3. Unilateral intention of a single JT

1. Destruction of a unity:- Focus on consequence of an action to see if unity is destroyed (rather than the intent)- Most commonly, the unity of title is destroyed – transfer of legal title to self or other

- S.18(3) Property Law Act – allows transfer of JT to yourself, which severs by destroying unity of title

- Can occur in secret- No severance if:

- Charge or encumbrance is added – ie - mortgage- By unilateral declaration of an intention to sever by one party (gotta do it), by

execution of divorce settlement, by will- Maybe severance if:

- JT leases out their interest

STONEHOUSE v AG of BC, 1962RULE:

- Survivorship = ownership growing because the previous owner dropped out of the pool. It is not passed on, but just changes

- In BC secret transfer without registration performed inter vivos creates severanceFACTS:

- Wife makes transfer with signed, sealed, delivered deed to a daughter from former marriage

- Wife dies and daughter registers deed at land title office day after death- Husband sues registrar for not checking that the deed was 3 years old- Claims deed had to be registered in order for severance to exist

ISSUE:- When is severance complete?

HELD:- When deed is executed – the registration only serves to validate the severance

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Do mortgages destroy unity of title?- At common law? YES

- Mortgage @ common law = conveyance of legal title from mortgagor (owner/borrower) to mortgage (bank/lender), subject to equity of redemption

- Equity protects the redemption (=transfer of title back to mortgagor) so that mortgagee can only take or sell the property after foreclosure

- Therefore, unity of title is technically broken and JT is severed, and even though the title will eventually be transferred back JT can’t be revived because unity of time is destroyed too

- In a pure torrens system? NO- mortgages don’t destroy unity of title – they are charges/encumbrances that merely sit

on the JT’s interest - s.231(1) Land Registry Act – mortgage is a charge on the title

- most torrens systems have a statutory system of foreclosure, which works with the lack of a conveyance of title to the mortgagee

- In BC’s torrens system? Shouldn’t destroy title, but we act like they do in practice…- Unlike most torrens systems, BC has a common law system of foreclosure (not statutory)

- s.231(2) Land Registry Act – BC uses old common-law system of foreclosure and mortgagee has rights as though it is a common law system

- RESULT: In theory, BC is torrens and uses the term “charge” for mortgages, but in practice, BC thinks of mortgages as severances as per common law foreclosure

- HOWELL thinks we can and should argue in court that just because of BC’s practice, in theory there is no conveyance of title to the mortgagee in torrens systems, so in JT situations the unity of title is not destroyed

LYONS v LYONS, Australia Shows how mortgages are charges in Australia’s torrens system RULE:

- When a JT mortgagor dies the encumbrance of the mortgage dies with them, other JTs get survivorship with no charge

ANALYSIS:- The charge is only on the dead JT’s interest, which no longer exists after death- It would be illogical for mortgage to survive, if the interest doesn’t- Mortgagee is at risk of the JT dying and losing out- BUT, mortgagee gets benefit if other JTs dies –charge of the mortgage extends to added

interest NORTH VANCOUVER v CARLISLE

- Shows how BC it is unclear if mortgages are charges or conveyancesRULE: no rule – 3 different explanations

1) Mortgages are conveyed to mortgagees, subject to equity of redemption – just like common law – despite Land Registry Act

2) Mortgages are just charges – like Lyons3) Mortgages should be treated like charges unless foreclosure proceedings begin, then

they should be treated like conveyances of title

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PUBLIC TRUSTEE v MEE, 1972 BCCA - Example of severance in equity through a trustRULE:

- If a JT binds themselves to a trust in equity, it has the same effect as a transfer to a 3P – JT is severed

FACTS:- Husband and wife divorce but remain JTs of property- Husband creates trust for son, with himself as trustee – does not register title- Title doesn’t move, so unity of title is not destroyed at law- Husband dies

ISSUE:- Should severance or survivorship apply?

HELD:- Severance

ANALYSIS:- If he had created a trust with 3P it would have severed the title through transfer, which

destroys unity of title (Stonehouse)- If declaration of trust complies with 3 certainties (=intent, beneficiary, property being

conveyed), then equity will treat it as a severance

FORT v CHAPMAN- Example of a charge on a JT

RULE:- Sale and purchase agreements are charges on a JT’s interest and do not sever unity of title

until they are executed and title is actually transferred- NOTE: law reform committee has recommended that such agreements should sever JT

FACTS:- Mom conveys fee simple to herself and sister as JTs- Mom enters into a sale and purchase agreement with her son – and registers agreement- Sale and purchase agreement is a long-term arrangement during which the debt owed is a

charge on the interest, and once the debt is paid the buyer can “execute” the agreement- Execution of sale and purchase agreement = buyer asks for conveyance and court will

enforce the request – must ask- Mom releases son from obligation to pay and declares debt paid, but dies before

conveyance- Son tries to register but is refused

ISSUE:- Did agreement sever the JT?

HELD:- NO

ANALYSIS:- Survivorship kicked in before son registered the agreement- Until registration of conveyance/transfer of title, the agreement is just a charge that dies

with the JT on whose interest it rests - Lyons

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SORENSEN, 1977 Alberta CA – Howell loves this caseFACTS:

- Husband and wife are JTs on 3 properties – divorce lets wife live at property for $1 lease until end of life

- Wife cares for disabled son and finds out 5 yrs after divorce that she is terminally ill- Files for partition to convert title to tenancy in common – dies morning of partition hearing- Executrix tries several ways to show severance of JT to provide an estate for the son:

- Partition- Will- Divorce Agreement- Lease- Transfer to Son- Trust – succeeds

ISSUE:- Did the wife succeed in severance?

HELD:- YES – via trust

ANALYSIS:- Onus on the party seeking severance to prove it occurred - Did partition succeed in severance?

- No. It is not enough to file and unilateral intention is not enough to sever JT – must be mutual

- Did will succeed in severance?- No. Because will only become effective upon death and that is when survivorship to ex

occurred, her attempt to leave it all to her son failed.- Did divorce settlement create severance?

- No. Wife didn’t act as though it amounted to partition – fact that she filed for partition shows she didn’t think the divorce created severance.

- Did her lease sever the unity of title or interest?- No. Because the lease was just a right of possession and tied to the length of her life, it

didn’t affect survivorship and therefore couldn’t sever JT. If it had been tied to a term beyond her life, there may be an argument.

- Did her attempt to transfer her interest to her son succeed in severing unity of title?- No. She signed and sealed transfers but they were not delivered to her son’s lawyer, so

they do not meet all 3 requirements and didn’t sever title.- Did her declaration of trust in favour of son create severance?

- YES! Even a declaration of trust with yourself as a trustee is treated as severance of unity of title if 3 certainties are present (intent, parties, property)

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2. Severance by mutual agreement of JTs- This is all about mutual intent as evidenced by explicit agreement or implicit

actions/dealings between the parties- Both parties must be found to have acted as though they intended to treat the JT as TIC- Cases dealing with this are super factually focused

FLANNIGAN v WOTHERSPOON, 1953 BCSCRULE:

- If a course of dealings/actions indicate a mutual agreement to sever, severance will occur, whether parties know about or understand technicalities of JT v TIC

FACTS:- Bros are JTs of several lots- Enter into a sale and purchase agreement to a 3rd party that says proceeds will be equally

divided and placed into each bro’s bank account- Bro dies and leaves all real and personal property to daughter – P- Dying bro tells P on deathbed that she will get proceeds from sale and interest on other

incomes from JT properties- Surviving bro hears this and makes no indication he expects otherwise – later tells P she will

get income but that it will be small- After death, bro argues that it’s JT not TIC, so P shouldn’t get anything

ISSUE:- Was there severance based on mutual agreement?

HELD:- YES

ANALYSIS:- Based on totality of evidence of actions:

- Split proceeds (not enough on its own) + separate bank accounts + silence of bro @ deathbed (weak evidence) + conversation with P regarding income

3. Severance by Unilateral Intention of a single JT- Only works in UK – 1925 statute allows notice of intention to sever to create severance

- UK claims the legislation merely brought real property in line with common law treatment of personalty – but no case law supports this

- No similar statute in BC – so unilateral intention that falls short of true destruction of a unity does not create severance

WALKER v DUBORD, 1992 BCCA- Shows BC not allowing unilateral intention to sever JT

RULE:- In BC, unilateral declaration of intent to sever won’t sever – even if notice given to other JTs- You must carry severance all the way through to destruction of a unity

FACTS:- Husband and wife are JTs

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- Wife transfers JT to herself and tries to sever JT in personalty via unilateral declaration regarding investments

- Wife is trying to make sure property doesn’t go to husband via survivorship b/c she has kids- Wife’s lawyer only wrote to bank to declare intention that personalty be held as TIC – no

actual transfer or severanceISSUE: Is unilateral declaration enough to sever JT?HELD: NOANALYSIS:

- Same rules for realty and personalty @ common law- Intent is not enough – she had to transfer title to herself to break the unity of title

SORENSONRULE:

- In AB, unilateral intent is not enough to sever JTFACTS:

- Clear intent to sever, as shown through filing for partition

PARTITION:- WHAT: court ordered destruction of unity of possession (co-ownership) – both JT and TIC- WHEN: parties can’t agree- EFFECT: co-owners become owners in severalty (unlike severance, where co-ownership is

maintained) – NOTE: with property rights you have a prima facie right to get your ownership out of the deal

- HOW: Partition of Property Act- HISTORY: traditionally an equitable jurisdiction that only applied to physical division

- 1868 – English Partition Act – empowered courts to order partition and sale- 1880 – BC adopts Act as BC Partition of Property Act

Partition of Property Act- modern version of 1880 Act- applies only to realty (actions for personalty must look to equity)- s.2 – says who can be compelled to partition and sell, and what it applies to

- JTs, TICs, morgagees, creditors, and any other parties with liens on any realty- Land only – whether estate is legal or equitable

- s.3 – doesn’t have to be a partition (physical division) – can be sale and distribution of proceeds

- s.4 – says who can seek partition and sale – only those with right to possession- only those who have a right under case law - see Nicholson for limitation on who can seek it – not creditors if not co-owners

s.6-8 – deal with sale of property- s.6 – If party seeking sale owns 50% interest or more, then court must order the sale –

not partition (unless there is good reason not to – see Bradwell)- s.7 – If party seeking sale owns less than 50% interest, then court may order it- s.8 – If the court thinks it is fit, the parties may be bought out by other tenants

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Who can apply?

MORROW v EAKIN & EAKIN, 1953RULE: only those with the right to possess can apply for partition and sale – not remainders, not creditors (unless they buy out the other owner and apply for partition)FACTS:

- Judgment made against a JT- Creditor of JT wants to bring action for partition and sale of JT’s interest so judgment

debt can be paid out of proceedsANALYSIS:

- Under case law, as required by s.4, the equitable position is that only those with a right to possess can bring action for partition

RAYNER v RAYNER, 1956 BCSC- Shows how partition is an equitable action at its root – despite being entrenched- Position is softened in Bradwell

RULE:- If you come to equity you must have clean hands – if you have unworthy malice or

vindictive conduct, then the court won’t use its discretion to assist your partition claimFACTS:

- Husband and wife are JT owners of a cottage- Husband leaves wife for employee of her flower shop and convinces her to transfer

shop to the employee – then leaves wife- Husband seeks partition of cottage, which he had exclusive possession of for a long time

HELD: wife gets exclusive occupation rights as long as the husband didANALYSIS:

- Under statute, the court has equitable discretion to grant partition and equitable principles apply

- Statute = can bring in equity features “as justice requires” – must be relevant based on facts of the case

BRADWELL v SCOTT, 2000 BCCA- Backs off from Rayner and limits equitable discretion to personalty

RULE:- There is a prima facie right to partition – court has statutory discretion to order

partition, sale, or nothing (s.2)- s.6 – provides court the chance to deny a 50%+ owner an order of sale for “good reason

to the contrary” = house fitted for disability/party seeking sale wants to expropriate land (Sahlin v Nature Trust) – not enough to be old and retired – HOWELL LIKES

ANALYSIS:- Equitable principles can be considered, but courts don’t have to consider them when

applying statutory discretion

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Future Interests WHAT: present interest that will or may be obtained in the future – 3 natures

1) Vested Future Interest2) Contingent Future Interest3) Divested Future Interest

Estate in possession = present interest with right to immed. possession = Vested in possessionEstate in expectancy = future interest w/ present right to future possession = Vested interest

- Something the will be had- Reversions

Estate not vested = an interest that may be had in the future = Contingent interestGift over = property transfer that will take effect after termination of an estate in possession

Vested Contingent A B for life, remainder to C in fee simple A B for life, reminder to C in fee simple at 21B is vested in possession (and therefore must also be vested in interest)

B is vested in possession (therefore must also be vested in interest)

C is vested in interest (no right to immediate possession) but has a present interest by virtue of which possession will be obtained in the future.

C is NOT vested, but rather contingent on a condition which may never be met—C has a present interest by virtue of which possession may be obtained in the future

Therefore, if you are just waiting for the passing of previous estates and nothing else, the donee’s interest is still vested.

Therefore, a contingency is when in addition to the passing of prior estates, there is some other factor/criteria or event ‘personal’ to the donee that must happen for the interest to vest.

3 REQUIREMENTS for VESTING of INTEREST:1) Conditions met – conditions precedent – if none, then you are good to go2) Recipient is ascertainable – identified or in existence 3) If class gift, group members are ascertainable – class closed – all members identified

Condition Precedent Condition SubsequentCreates a contingency Creates a defeasible interestCreates a contingency that MUST be met before interest will be vested – Delays vesting

Gift vests right away – if condition is met, then gift subsequently divests. Not met? No divesting

If future interest expires before condition precedent is met, the interest is destroyed and recipient gets nothing

A B in fee simple, BUT IF B marries C then it immediately divests

It is a matter of interpretation as to which type of condition a testator or testatrix has created – but becomes very important as they have such different consequences.

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BROWN v MOODY- Example of condition subsequent

RULE:- Condition precedents give nothing until met- Conditions subsequent give non-absolute vested interest subject to divestment- Divestment only occurs if all conditions subsequent are met- Look to intention of testator/testatrix to determine if subsequent or precedent

FACTS:- Lady dies and leaves income to son for life; on his death estate goes to ladies – ½ to 3

daughters and ½ to son’s daughter - Clause: if any of the girls pre-decease lady or son and have a kid when they die, then the

kid get’s the interest their mom would’ve gotten if she had survived - One daughter dies before the son without children

ISSUE:- Is the clause a condition precedent or condition subsequent?

o If precedent, daughter would have had to survive mom and bro before getting interest – interest would revert to estate and couldn’t be distributed in her will

o If subsequent, daughter would have immediate vesting, which would only be divested upon meeting conditions of pre-death and having a kid – interest could be distributed in her will, unless the conditions subsequent led to divesting

HELD:- CONDITION SUBSEQUENT

ANALYSIS:- Look to intention of will – to allow son to enjoy income for life, not to allow son to get

estate- No condition precedent because the only thing that had to happen for gals to get estate

was for life interest of son to expire

Re SQUIRE, 1962 Ont HC- Shows absolute vesting with no conditions

RULE:- When an interest is definitely going to a single person, with no conditions, then it is an

absolute interestFACTS:

- Testator leaves properties to trustees to hold for grandsons until they hit 30, then it goes to them absolutely

- Income supposed to either accumulate and add to total OR guys could encroach on capital to pursue higher education up to a limit

- Gifts for each grandson separated from rest of estate and not bound by any gift-overs- Gifts are absolute

ISSUE:- Can testator deny access to the gifts until 30?

HELD:

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- NO – IT IS AN ABSOLUTE GIFT - court follows Saunders Rule = absolute gifts can only be denied to the recipient if they are under age of majority (21) –Howell says just history

ANALYSIS:- Looks to intention of will:

o Words “upon attaining 30” are not the same as “if you should attain 30” (which would be a condition precedent)

o No gift over mentioned = no conditions subsequent, which would require a destination for the divested property – no gift over is key – Phipps for contrast

o “there is no gift over in the event of death prior to attaining the specified age”

Re CARLSON, 1975 BCSC- Shows condition precedent

RULE:- If the whole of a gift (income + capital) is held for benefit of a party until a certain age, at

which point the remainder gets divvied up, the remainder isn’t vested until the age is reached = condition precedent is met

- General guidelines for interpretation of intention:o “upon” – “when” – “if” – “as” – “as soon as” – “provided” = usually imply a

condition precedento “but if” = likely to imply a condition subsequent

FACTS:- Testator devised residue of estate to be held in trust and invested- Income and capital to be used for maintenance, education, and advancement of

youngest son until he hit 21- When youngest hit 21, remainder to be divided between youngest son (45%), daughter

(45%), and other son (10% for debts) – 1$ to widow- Daughter assigns her share to widow

ISSUE:- Is son hitting 21 a condition precedent for other kids’ interests to vest?

HELD:- YES – no immediate vesting of interests upon testator’s death

ANALYSIS:- Must sit in armchair of testator – to get into the thick of the interpretation- Clear intention for youngest son to get full use of estate until 21 – income & capital- Would be inconsistent for other kids to get their interests before he hit 21 because dad

clearly wanted him to have all the estate at his disposal

PHIPPS v ACKERS, 1842- Shows conditions subsequent based on gift over – contrast with Re Squire- no gift over

RULE of CONSTRUCTION:- SCENARIO: you have a gift to a giftee with a condition precedent and a gift over to a 2nd

giftee if the condition precedent isn’t met- HOW TO FRAME IT: existence of gift over shows testator’s intention for 1st giftee to get

immediate interest subject to condition subsequent that “if they don’t meet the

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condition precedent”, it’ll divest to 2nd giftee. 2nd giftee has a condition precedent on their interest, so it only vests if 1st giftee’s interest divests

FACTS:- Testator devised land to trustees for future conveyance to godson @ 21- If godson doesn’t hit 21 and doesn’t leave issue, the land divests and becomes part of

estate residue – residue goes to widow as a gift-over- Testator dies when godson is 12, and godson hits 21 – widow wants income before 21- Getting to age of 21 is a condition precedent for kid’s vesting- Kid not getting to 21 without kids is a condition precedent for widow’s vesting of kid’s

portionISSUE:

- Who gets income accrued from 12-21?HELD:

- Grandson ANALYSIS:

- It is key that the testator specified a gift over- Court interprets the will as giving godson vested interest with a condition subsequent

that if he conks without kids before 21, then interest is divested to widow- RULE OF CONSTRUCTION: look at what the 2nd party is not going to get should

everything work out with 1st party – assign that to the 1st party with a condition subsequent until they meet their condition precedent

Re BARTON ESTATE, 1941 SCR- SCC holds that Phipps RULE OF INTERPRETATION applies to both personalty and realty

FESTING v ALLEN, 1843- Limits application of Phipps RULE - Shows Rule of Destruction- ALWAYS CONSIDER PHIPPS ALONG WITH THIS CASE TO PUT IT IN CONTEXT

RULE:- Phipps RULE should only be applied in factually identical situations:

Ascertained beneficiary + gift over if they don’t meet age/conditionFACTS:

- Testator leaves land to granddaughter for life then remainder to her kids who “shall attain” 21 – she has no kids when the testator dies

- If no kids hit 21, then land divests to other trusts specified in will- No gift over clause should kids not hit 21- Granddaughter dies with 3 kids under 21

ISSUE:- Do her kids get anything?

HELD:- NO

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ANALYSIS:- Lawyer for kids frames it using Phipps RULE = kids have vested interest that divests if

they don’t hit 21 (not hitting 21 = condition subsequent)- Court notes ‘rule of destruction of contingent remainders’ =

- If remainders are contingent (condition precedent hasn’t been met) when the prior estate ends, they are destroyed

- Would leave an unacceptable gap in seisin – not okay for no one to have a vested interest

- Court distinguishes from Phipps- No gift over- Kids (parties to get remainder) didn’t exist, so couldn’t be ascertained –

therefore, unlike in Phipps, there can’t be immediate vesting in kids with the other trusts having an interest with condition precedent of kids not hitting 21

Without a kid to immediately vest in, the court considers the vesting to be with the trusts unless kids are 21 when mom’s interest expires

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Future Interests – Common Law3 Types of Future Interests:

1) Common Law – likely exam Q with a will drafted in common law rather than equity2) Legal Executory3) Equitable

3 Interests in Common Law Future Interests:1) Reversioner – interest lies in grantor’s estate2) Right of Entry w/ possibility of Reverter – interest lies in grantor’s estate3) Remainder – interest lies in a third party

REVERSIONER A to B for life (implied reversion to A)- Always a vested future interest = must return to grantor- Possession goes to B, but A retains future interest of reversion- A can assign reversion to another party later on – by sale or gift

o If sold or gifted, it is still treated like a reversion- Natural end to an estate- HINT WORDS: Until; For life

RIGHT OF RE- ENTRY

A to B in fee simple BUT IF B marries C, then back to A- Not a vested interest- A defeasible grant with a condition subsequent, which allows for

divestment to A via re-entry- Complete gift given, but the condition subsequent allows

premature termination of the estate- A can bring action for possession via re-entry – but doesn’t have to- Until A chooses to exercise right of re-entry, B can enjoy property- BUT there is a 6-year limitation on action of re-entry- HINT WORDS: provided that; on condition that; if it happens that;

but if – look for words that cut something short – but remember to always look at context

- STATUTORY BACK DOOR: Property Law Act – s.8(3) -a right of entry affecting land on breach of a condition can be made by any person or person claiming under them

o Courts haven’t interpreted this yet- CURRENT COMMON LAW: grant of future interest can’t be made to

a 3rd party through right of re-entryREVERTER A to B in fee simple UNTIL B marries C

- Creates a determinable gift in fee simple or life estate that is subject to divestment – not a defeasible interest, but a determinable one

- Not a complete gift

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- Grantor uses words of limitation to place a condition on the slot of time – should a determining event occur

- If the determining event occurs, ownership of gift automatically reverts to grantor

- If the determining event doesn’t occur, the gift goes to the giftee’s estate and the possibility of reverter dies with the giftee

- Like reversion because it is a natural end to the gift, not a premature termination via condition subsequent

- Different from reversion because the interest doesn’t end with death, rather, it has a possible clear end to the slot in time

- Different from right of entry because gift is not completely given then taken back, rather, it gives something less

- Interest stays with grantor’s estate- HIINT WORDS: until; while; whilst; during; so long as; as long as; but

always remember to read words in context- Look for words that define the end of the slot in time

- These words show that the gift is lesser than the startReverter with invalid words of limitation versusRight of Entry with invalid condition subsequent

- When does invalidity occur? Policy considerations make invalid- EXAMPLE: Clause restrains an option to marry by limiting

possible spouses, lest the estate revert OR lest the grantor get right of entry

Different from an estate that automatically ends when marriage occurs, because it implies that the gift was intended to support her until marriage, not control her choice

- REVERTER = if words of limitation are invalid, whole gift is invalid and grantor keeps future interest (which never left them because it was a determinable estate)

- RIGHT of ENTRY = if condition subsequent is invalid, whole gift stays with giftee (because the got the future interest, subject to condition subsequent)

How courts sometimes respond:- Will sometimes try and strike off the clause by trying their damndest

to find that the clause was a condition subsequent - will do this even if the words are clearly words of

determination/determinable- GOAL: to avoid considering the whole interest/gift invalid- REASON: decisions are all about interpretation, which is tied to

judicial preference- Judges use judicial discretion to override a testator’s intent

to achieve a certain outcome- Be aware that judges can use loose and fast reasoning

doesn’t seem analytical

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REMAINDERSA to B for life – remainder to C in fee simple (if C marries D)

- Only way at common law for future interest to go to a 3rd party- Future interest to C is postponed until B’s possession expires- Can be vested or contingent

- Vested Remainder = A to B for life – remainder to C in fee simple Vested in interest but not possession until B dies

- Contingent Remainder = …if C marries D Because there is a condition precedent, the remainder is

contingent ‘rule of destruction’ = if contingency isn’t met by B’s death,

then interest is destroyed (Festing)4 RULES for remainders @ common law

2 Rules Against Shifting Interests

- avoid both by assigning remainder through determinable life interest

Remainder is void ab initio if it is designed to take effect in possession by defeating the prior particular freehold estate

WTF: if an estate is prematurely terminated (=defeated) by a condition subsequent, it won’t create a 3rd party interest

- key to distinguish between condition subsequent and determinable interest

EXAMPLE: A to B for life, but if B marries C, to D in fee simple = VOIDEFFECT: remainder is void from the start and it is as if gift never existedTO AVOID: use a determinable interest instead of a defeasible interest with a condition subsequent – if the interest comes to a ‘natural’ end, then the estate won’t be defeated and can pass on to 3rd party

- A to B for life, until B marries C, then to D in fee simple =Remainder after a fee simple is void

WTF: if an estate is given in fee simple (whether as a determinable interest or with condition subsequent) there can’t be anything left over to grant to a remainder because you have exhausted the whole EXAMPLES: A to B in fee simple unless B kills queen, if so, remainder to C (cond. sub.) = VOIDA to B in fee simple until B kills queen, then remainder to C (det. interest) = VOID EFFECT: remainder is void and it is as if gift never existedTO AVOID: use a determinable life interest with a remainder (works for both rules against shifting interests)

- A to B for life until B kills queen, then remainder to C2 Rules Against Springing

Remainder must be supported by a prior estate of freehold created by the same instrument as the remainder

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Interests

-no gaps allowed in seisin (possession)

-historically there could not be gaps in services rendered to lords through tenure-fear that another interest would spring up during the gap

WTF: must give a freehold estate with a remainder all at once – not leasehold

- Leasehold = calculated in years- Freehold = life estate/estate autre vie

EXAMPLES:A to B for 2 years, then to C and heirs if C reaches 21 = NOT OKAYA to C in fee simple if C reaches 21 = NOT OKAY

- Both bad examples offend the rule b/c there is a gap in possession pre-C, although both use the same instrument

EFFECT: remainder is void and it is as if gift never existed???TO AVOID: remove the gap in possession A to B for life, then to C and his heirs if C reaches 21 = OKAY

- Note: - C reaching 21 is a condition precedent, but common law is fine

to ‘wait and see’ if the contingency will be met- If contingency isn’t met, when B dies, ‘rule of destruction of

contingent remainders’ applies and the interest will revert back to A

Remainder must be limited so as to be capable of vesting (if it vests at all), before or at the moment of termination of the prior freehold estate

WTF: It must be it possible for the remainder to vest (doesn’t necessarily have to though)EXAMPLES: A to B for life, then to C upon reaching 200 yrs. = VOIDA to B for life, then 1 year after B’s death to C = VOIDEFFECT: remainder is void ab initio and it is as if gift never existedTO AVOID: create a remainder that has at a chance in hell of happening @ point of termination of preceding interestA to B for life, then to B’s first son to reach 21 = OKAY

- B’s son reaching 21 is a condition precedent that might or might not happen (possibility of a gap, but not a certainty of it)

- common law is fine to ‘wait and see’ if the contingency will be met

key point, but don’t confuse it with perpetuities, where common law never waits and sees

- If not, rule of destruction applies (Festing)

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Future Interests – Legal Executory & Equitable 3 Types of Future Interests:

4) Common Law5) Legal Executory6) Equitable

Lay of the land - @ common law there are 4 restrictive rules that limit how interests can be created for 3rd parties

BIG QUESTION: How do you get around these 4 restrictive rules?

1) Legal Executory Interest – invoke a single use2) Go to Equity – double use/trust approach

LEGAL EXECUTORY INTEREST

WHAT:- Arose from Statute of Uses, 1535 – executed equitable interests after a single use,

transferring legal title to the beneficiary- Newly created title = Legal Executory Interest- Common law remainder rules don’t apply to LEIs b/c they are statutory legal interests

that correspond to equitable interests that existed pre-execution- Not an interest in equity, but has same freedom as an equitable interest

HOW TO APPLY:- Change wording in transfers…- BEFORE: A to B in fee simple when B reaches 21 – invalid @ common law b/c of gap- AFTER: A to “X and his heirs to the use of” B and his heirs when B reaches 21

- valid b/c X’s ‘use’ is executed by statute, making the interest given to B an LEI- the use being given to B is a “springing use” b/c it sprung up w/out a prior

supporting freehold estate- RULE: put “X and his heirs to the use of” before any conveyance that would be restricted

by 4 common law remainder rules to create an LEI- If an inter vivos conveyance, you are creating an executory limitation and you

must use the words “to the use of” to create an LEI- If a conveyance by will, courts will read in “to the use of”, and create an

executory device to save the gift, even if a use hasn’t been expressly invoked by the grantor

- EFFECTS:- Springing and shifting gifts will be considered valid as legal executory interests

by the courts

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Courts will not imply invocation of Statute of Uses for inter vivos gifts – must include “to the use of”

Courts will imply invocation of Statute of Uses for gifts by will – subject to exceptions in Purefoy

NOTE : this has nothing to do with Robson

PUREFOY v ROGERS, 1671- Shows an exception to the ‘wait and see’ rule = remainders must vest during

continuance of prior particular estate or at the moment the estate is terminated/endsRULE:

- Court will only imply the words “to the use of” to save an executory devise if the remainder would otherwise be void ab initio

- If the remainder is initially valid at common law, it must remain at common law- EXAMPLE: A to B for life, then to B’s first son to reach 21

- @ common law, court’s prepared to ‘wait and see’ if a son reaches 21 before B dies – if not, subject to rule of destruction

- Does it break common law rule?1) Does remainder defeat the prior particular freehold estate (condition subseq)? NO2) Is remainder being given after a fee simple? NO3) Was remainder supported by a prior particular freehold estate created by same

instrument? YES4) Is the remainder capable of vesting at or before end of prior interest? YES

- Doesn’t break common law rule – court leaves it @ common law & open to rule of destruction of contingent remainders

Re CROW, 1984 Ont HC- Application of Purejoy in Canada

EQUITABLE FUTURE INTERESTS- This will get you around everything EXCEPT rule against perpetuities- immune to common law remainder rules, rule of destruction of contingent remainders,

and Purefoy Rule- allowed to have gaps and springing interests because it is the beneficiary that

has the gap, rather than the legal title having a gap because the title stays with the trustee, and any benefits accrued during the gap go to the trustee

- Therefore – trusts are used extensively today- EXAMPLES:

- “Unto and to the use of X in trust for” A for life, remainder to B and his heirs creates a vested equitable remainder in B

- “Unto and to the use of X in trust for” A for life, remainder to B and his heirs upon B reaching 21

creates a contingent equitable remainder in B- “Unto and to the use of X in trust for” A for life, but if B marries C, then to B and

his heirs

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Creates an equitable executory interest in B- No particular words are required to create a trust – BUT if you don’t use the word trust,

or the word ‘use’ twice, then you are flirting with the statute of uses

Re ROBSON (page 233/234) - nothing to do with Legal Executory Interests and the interest the court implies in wills- considers statutory provisions that vest property in an executor as a trustee, who

administers an estate by handling debts- Howell says Robson is probably wrong – only way to establish an equitable interest is

through creation of a trustRULE:

- Statutory provisions that give estate control to trustees, like executors, make everything in the will in equity – allowing the bypass of common law remainder rules

FOR EXAM: Acknowledge what would happen if Re: Robson were correct – then dismiss it and move on to our analysis, according to Purefoy and Re Crow:

- “If Re Robson is correct, everything in the will is in equity and the following analysis is unnecessary”

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Future Interests – Validity of Conditions and Qualifications Apparently the stuff in the coursepack is a summary of the materials that should cover all we need to know

3 situations in which a condition or qualification may be valid:

1) Restraint on marriage 2) Restraint on alienation3) Uncertainty in expression or intent

Restraint on Marriage:- Area of historical significance- Today it raises a bunch of issues because of the idea of “marriage like” situations and

how we should apply the term marriage- Generally, it is and was fine to restrict marriage to a single person – not an undue

restraint- Restraint that prevented marriage entirely was seen as excessive- Some cases recognized that marriage was referred to in order to take care of a person

until marriage (no intended to deter marriage though) – common among daughters

Restraint on Alienation:- WHAT: if a clause in the conveyance of property tries to prohibit recipient from selling

or transferring property- Prima facie repugnant, b/c the right to alienate is part of what grantor gives the grantee- HOW:

- Condition subsequent is a restraint on alienation that allows grantor to control what happens when property divests, because grantee is given a defeasible estate

BUT, grantor cannot control what grantee does if property doesn’t divest- HOW NOT:

- Determinable interests are outside theories of restraint on alienation because the grantor is giving less than the whole

Grantee is restrained by the natural end to the estate, not on alienation (Leech)

- EXCEPTIONS:- Many exceptions to restraint on alienation have developed over the years- Brown – halted exceptions and gave 2 TESTS

- EFFECTS: - gift in will = into residue; condition subsequent = gift remains; determinable

interest = courts may be results-oriented

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R v BROWN, 1954- TWO TESTS for validity of restraints on alienation

RULE:1) Does the restraining condition take away the whole power of alienation substantially?

- If restricted to a certain type of disposition, it is valid as long as the property can be disposed of in other ways – Re Porter – no mortgages, but wills & leases okay

- Total restraints on alienation cannot be made valid by putting a time limit on them – eg – you can sell 25 years after my death

2) Does the restraining condition deal with class limitation (restrict alienation to a class)? – if so, it will be valid if class is expanding; invalid if class is diminishing

Uncertainty in Expression or Intent:- If court can’t figure out your intention, then the restraint will be invalid- If a condition subsequent is too uncertain, court can get rid of condition and gift

becomes indefeasible - Re Messinger Estate – “while she resides in home” = uncertain condition

subsequent – courts struck down condition- If a determinable interest is too uncertain, court will consider whole gift invalid because

it does not have words of clear limitation - If a condition precedent is too uncertain, the whole gift is invalid- The person who has the interest has to know what will bring things to an end – it has

got to be clear from the beginning- Courts have used uncertainty to render racist and religious clauses void – today are

willing to interpret situations as being contrary to public policy

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RULE AGAINST PERPETUITIES – see Kangaroo guide! Get it to help you follow along as Howell works through the sample problems. If you can regurgitate the Kangaroo steps on the exam you will get plenty of marks… don’t lose too much sleep if you feel like an inadequate lump during these classes.

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Incorporeal Interests – Easements & Profits a PrendreEasementsWHAT:

- intangible rights or obligations in relation to the land but not the land itself – not a right to possession

- recognized and protected by law as ‘proprietary’- distinguishable from purely contractual relationships with accompanying rights and

obligations – BUT, a K between land owners can become attached to the land and affect 3rd parties

- 2 TYPES:o Common Lawo Statutory

Common Law Easements- WHAT: right of use over another’s property- WHEN: can come into existence a few ways – eg: through express words in binding

documents; through prescription = 20 yrs uninterrupted peaceable use (no longer able to be created via prescription in BC)

- WHERE: 2 lots of land – generally adjacent- 1 lot gets the benefit/right and is the dominant tenement (DT) - 1 lot has the burden/obligation and is the servient tenement (ST)

- TYPES: - Positive Easements = lets party with DT do something (benefit) on the property

of party with ST (burden of allowing it) Includes: lots and lots of things – crossing land, fishing in pond…

- Negative Easements = doesn’t let party with ST do something on their property to the benefit of the DT

These have always been strictly controlled – this is a covenant, which can help you get what you want

Includes: right to light Excludes: rights to get or be protected from: wind (unless wind is

in a defined channel); view; shade; weather (Phipps)PHIPPS v PEAR, 1965

- Explains positive and negative easements and touches on covenants- Court refuses to expand the category of negative easement

FACTS:- Original owner had 2 houses next to each other – tore one down and rebuilt it with

shitty siding because other house was right next to it and protected it from weather- Later owner tore down old house, exposing shitty wall- Owner of shittily walled house argues there was a negative easement requiring weather

protection

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ELLENBOROUGH PARK, 1956 – followed by SCC in DUKART- A classic ‘consolidating case’ that brought a lot of confusion about easements to an end

FACTS:- series of homes in a crescent around a garden- only homeowners get a key to the garden- grant said “you may wander in the pleasure garden”

RULE: How to qualify as an easement:Requirements Application to Facts

1. Must be both a DT and an ST- Distinguishes an easement from a public right

where there is no DT- An easement is in favour of some other land (the

DT) and the owner of that land

- in this case, the surrounding houses were DTs and the park was the ST

2. Easement must objectively benefit (accommodate – another way of saying ‘touch and concern’) the DT land itself

- the right granted must inherently benefit the DT land itself no matter WHO owns the land (more than a personal benefit to a particular DT owner)

- benefit must be sufficiently proximate to the DT itself

OBJ TEST: Does the following equation add up?- nature of DT + nature of the benefit = the benefit

accommodates the DT as land.

DT (residential property) + benefit (garden/park) = benefit that accommodates land (gardens benefit all users of houses and garden is close – not too specific of a use either – not like a baseball diamond)

3. Must be the proper subject matter to form an easement1. Sufficient definition- Benefit can’t be too wide or vague. 2. Non-possessory right- Occupation rights can’t be given by easement b/c

they would be inconsistent w/ ST’s possession - So no storage or dumping, or cutting down trees. 3. Can be for mere recreation- No ‘utility’ requirement

1. Not too vague: “wander in the garden” seems vague, but it is limited to owners of only a few houses in a close and defined area

2. Doesn’t conflict with ST’s possessory rights – not a right to camp there, just temp. access

3. Parents walking children in prams is not mere recreation, although it would be ok if it were just for recreation too.

4. Must have been an intention for the arrangement to run with the land itself and bind future parties

- More than a private contractual arrangement, giving a personal privilege for one of the original parties

- Factual determination

Look for language like: “assigns” and “successors” etc.

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Statutory Easements- Court determines if they are binding – registrar’s acceptance of the charge is insuff. evid

Land Title Acts.29 = unregistered interests only affect owners in cases of frauds.221= Easements must be registered as a charge on STs and noted on DTs in order to be binding on future owners – court decides if they are easements

- registrar’s acceptance of the easement as a charge doesn’t prove an easement

Property Law Acts.18(5) = owners in fee simple can grant themselves an easement or restrictive covenant on land they own for the benefit of other land they own – as long as the grant is consistent w/ their interests in each property at time of grants.18(7) = common ownership of DT and ST doesn’t extinguish an easement

Profit a Prendre= right to enter and to take from the root of the land (not personalty on the land)

- Difficult to figure out what was granted – lease, profit a prendre, easement- MOST IMPORTANT – just need to know that if you categorize the grant as a profit a

prendre, then it is proprietary from the beginning

Covenants - Overview- WHAT:

- an agreement (usually a deed) that can be negative or positive (be careful with positive ones)

- Ancient origins since the beginning of the common law – predates K law- No need for consideration when dealing with covenants @ common law- If a covenant “runs with the land”, a future owner can take advantage/be bound

- HOW: 1- If original parties made the covenant, it will be enforced as a K under Privity of K2- If dealing with a lease, a covenant will be enforced by Privity of Estate

PoE – steps in where PoK can’t help in long-term and/or consecutive leases

If the lease terms touch and concern the land, they are tied to the estate instead of the agreement and can be enforced in for new sub-lease parties

- TYPES:- Positive covenant = agreement to do something that benefits dominant land –

pretty much anything that costs money- Negative/Restrictive covenant = agreement to refrain from doing something –

build, plant, block view Major difference between a negative easement and a restrictive

covenant = element of notice required for a restrictive covenant

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Covenants - Common Law - do not need consideration!SMITH v SNIPES, 1949

- Gives common law rules of covenantRULES:

1) Intention: original parties must intend that covenant would run with the land2) Limitations: Only the benefit can run with the land (burden only enforceable against

original covenanter)3) Touch and Concern: Covenant must touch and concern the DT – no ST needed- Burden is only enforceable against the party that originally gave the covenant- Successor to the dominant tenement must have the same interest as their predecessor

If predecessor had fee simple, successor must have same thingFACTS:

- Covenant entered into that required river to be containedISSUE:

- Can successors in title enforce the covenant against the original covenanter?HELD:

- YES ANALYSIS:

- Covenant dealt only with benefit- Touched and concerned the land in a way that wasn’t just for personal benefit- Clear intent for it to run with the land- No need for an ST

AUSTERBERRYRULE:

- Passing on of a covenant is restricted to only benefits that touch and concern DT- Burdens can be enforced through equity, but must be negative

- Negative burden = restriction from doing somethingFACTS:

- Restrictive covenant required the party to preserve and maintain the road = positive covenant

ISSUE:- Can the burden shift to successors?

HELD:- NO – only negative burdens can shift to successors – majority said road doesn’t touch

and concern land – Howell thinks it does

HALSALL v BRIZELL, 1957RULE:

- Court recognizes an ancient law – person can’t take a benefit if the benefit is linked with an obligation, unless they also undertake the obligation. No requirement to take the benefit, but if they do, it is a package deal with the obligation

- Positive covenants don’t run with land and can’t be enforced – but if you want to perks, you have to perform the obligations

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PARKINSON v REID, 1957RULE:FACTS:

- Adjoining lots- Clear intent to bind successors with a covenant that original owners agreed to- Covenant: in return for use of lot #29’s wall, lot #28 would build a stairway and keep it

in good repair (reconstruct if damaged/destroyed)ISSUE: Should current owners of #28 rebuild stairway?HELD: NO

- DISSENT – characterized the stairway as a positive easement – right of access that runs with the land

ANALYSIS:- Because #28 no longer relied on the wall for benefit, they shouldn’t be obliged to build

stairway

Covenants – Equity- Benefit is the same as common law- Only in equity… the burden will bind the successor to the servient land/tenant – TULK –

notice is required but burden can be binding on the successor – but left a mess in wake of decision

- LCC v ALLEN – came after TULK and cleaned up the mess - rationalized the burden binding the successor – did so in a way that is now known as the restrictive covenant that runs with the land

- Key feature of the restrictive covenant is that the burden applies only if it is negative- Note – relationship between this and the negative easement (PHIPPS)

TULK v MOXHAY, 1848- breakthrough case focused on notice –left mess in its wake –gave no guiding principles

RULE:- Must be notice of a restrictive covenant in order for it to bind a successor – can bind 3Ps

FACTS:- Plaintiff owned land that was vacant and had a pleasure garden- Land sold to Tulk in fee simple for him and his heirs- Covenant came with land to keep and maintain the garden in its present form and in a

square form, uncovered, and in neat and ornamental order- Some negative (restrictive) and some positive requirements

- Tulk wants to build on gardenISSUE: How to enforce a restrictive covenant? Can he covenant be enforced?HELD: Covenant is enforceable and injunction remains in force – b/c notice of covenant givenANALYSIS:

- Tulk got land knowing (with notice) that the original parties had a restriction/obligation that they intended to be binding – price reflected restriction

ISSUES w/ judgment:

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- Ignored 2 key features of a restrictive covenant: negative in substance AND touches and concerns a dominant tenement

- Doesn’t consider whether the covenant runs with the land – more concerned that K was entered into with notice

- No comment on whether it was a negative or positive covenantNOTE – negative easement will bind at common law because it is an incorporeal hereditament

LONDON CITY COUNCIL (LCC) v Allen, 1914- Tries to clear up mess left by Tulk – gives us modern law of restrictive covenants

RULES: Equity will enforce a covenant if:1) Intention: original parties must intend covenant to run with the land2) DT: enforcers must have a dominant tenement that is touched and concerned3) ST: there must a servient tenement and successive title holders of it must have notice4) Negative burden: covenant must impose a negative burden on the ST (req. no spending)

**In short, Tulk will only apply if there is a DT that is touched and concerned (without this, notice will be irrelevant). If so, ask if it is a negative not positive burden on the ST. If these conditions are met, then there must be notice of the covenant.FACTS:

- Allen got permission from LCC to lay out 2 streets- Permission given with covenant that Allen couldn’t build on some lots- Successor in title to Allen had notice of restrictive covenant, but built on properties - LCC wants buildings removed – but there is no longer a dominant tenement since LCC

already gave the benefitISSUE: Should covenant be enforced?HELD: NO – won’t enforce a burden if there is no DT.

Covenants – Statutory requirements BC Land Title Acts.219 = a registered covenant is not necessarily an enforceable covenant – test must be applieds.221(2) = Just because covenant is registered as restrictive, doesn’t mean it’s restrictive/enforcs.29(1) = NOTICE: - will only be bound by an unregistered interest

- Where there is no fraud, express or implied notice of an unregistered interest or charge (includes covenants) is not binding on purchaser, except:

o If an interest is pending registrationo If a lease or lease agreement exists that is 3 years or less that includes actual

occupation

If there is notice of an unregistered interest in land? - If you have notice of the unregistered interest when entering the transaction, then you

will be bound – if you pretend that the interest doesn’t matter, it’s a form of fraud- Point of contention – Some think that the registration system should be taken

advantage of if possible. Some people think that it is unjust to ignore the fact that someone had knowledge of an unregistered interest.

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Licence – key to unit is looking at where we came from and guess where we are headingWHAT:

- Permission for licensee to be on licensor’s land – not trespassing – not attached to land- Given gratuitously or for value- Permission to occupy land – unlike easements, profits a prendre and covenants - Must be distinguished from a lease – must consider intent of parties

LEASE LICENCE-confers an estate in land (not freehold) for a fixed/certain term

-personal right to be present on land (defence to trespass) than cannot be given to successor

-only revocable by its own terms and Privity of estate applies

-can be withdrawn at any time

-gives right to restore right of possession – not limited to just damages

-if withdrawn, you must be given reasonable time to get off land – time depends on activity on land

-gives exclusive possession -can give exclusive possession but doesn’t have to

-as occupier, you can sue for trespass and nuisance -cannot sue for trespass

Types of licences:Bare Licence Licence coupled with an

interest in landContractual Licence

-Revocable at will

-Simply provides a defence to a claim of trespass but can be revoked at any point and you will be given a reasonable amount of time to get off the land depending on the circumstances-if you want compensation, look to K law

-Irrevocable – so long as the interest in land is in existence

-eg – if you have profit a prendre (can take fruits off land), then your licence cannot be revoked as long as the interest exists

-if interest is acquired by 3rd party it is proprietary and therefore binding on the buyer

-Possibly irrevocable through a K

STEP 1 – look to K and ask if K gives power of revocation or if it protects against revocationSTEP 2 – find that K says licence can’t be revokedSTEP 3 – Use power of equity to enforce the K

*licence & K are inseparable1) Wood v Leadbitter –

ex of trad. Approach in which licences can be revoked at anytime in common law

2) Thomson v Park – from a property point

1) Hurst2) Vaughn

We may still have situations that fall into this category, but we no longer need to try and force things into this category… because we have

Wintergarden- matter of K interpretation to see if K could be revoked

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of view, a bare licence is revocable at will through equity - even if there is some sort of contractual issue surrounding it

idea Contractual Licence now

HOUNSLOW: According to equity – if K is irrevocable, then the licence is too, and can be enforced with equitable remediesOptions:

- Equity will not help a party breach the K- Equity is most likely to grant injunctions, not specific-performance- Equity will grant an injunction against revocation of licence if there is a threat of

revocation, or a revocation has happened but hasn’t been carried out

HOUNSLOW:- Super important to note that this case does NOT apply to third parties – only concerns

enforceability against the licensor- Example of a bare licence

FACTS- Contractor hired to construct on huge site- K allowed P to terminate the K if certain preconditions were met – tried to terminate- Contractor continue to work- P tried to get injunction to stop further work and tried to get damages for trespass

ANALYSIS:Reviews 2 cases dealing with traditional application of bare licence:

1) Wood v Leadbitter – - told to go to watch a horse race and had a ticket. He went but was removed from

property. Told by courts that his licence to access the land could be revoked at will, and if he wanted compensation he had to seek it in K law

- revocation may involve breach of K, but then you should pursue that avenue- proprietary right to revoke the licence of access at will2) Thomson v Park- school master held lease and allowed another school master to operate on premises- second school master said he would leave property, but then came back and tried to

enter with force- he was restrained from re-entry because his licence had been revoked

NOTE –courts became very results-focused in order to achieve irrevocability. So, they tried to figure out a way to achieve that outcome within the law of licence

- did so by pushing situations into the category of “Licence coupled with an INTEREST IN LAND”

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Cases dealing with forcing facts into a licence coupled with interest in land situation in order to find irrevocability of licence:

1) Hurst - P said they had the right to see a theatre performance to the end, having bought a ticket- Court clearly was trying to find an interest in land – tied the right to see the

performance to the property2) Vaughn- Meeting regarding a financial meeting- People in meeting wanted some other attendees to leave- Courts found that they had an interest in being there

Court calls this “torturing the word ‘interest’” – says there is no need to do this in order to achieve justice – suggests a middle ground of Contractual Licence

Case dealing with contractual licence:1) Wintergarden- Involved grant of a licence to see a play- Could it be revoked? - Court went to K to ask if it could be revoked

Rationale for Contractual licencing – looks to equity - Power of equity and power of common law are exercisable in any court – so it is alright

for equity to override common law rule that licences can be revoked at will- If we didn’t apply contractual licensing, we would be stuck within the confines of

common law, trying to find an interest attached to the land that would make the K irrevocable

Situation when can equity be used?- If there is a threat to revoke- If revocation has forcibly occurred- If there is a desire to revoke and remove, but a K stands in the way – only if it involves

forcible and riotous re-entry – Thompson v Park

ERRINGTON v ERRINGTON, 1952 – shows how 3P successor can be bound by a licence connected to a K

- Denning’s judgment was considered off the wall at the time – now no longer so isolated- However, the judgment has gained greater prominence as personal obligation has

gained popularity in other areaso Parkinson v Reid – to get benefit you must also take burden (example of

personal obligation and personal equity being imposed on a person)o Tulk – picked up idea of personal obligation in another area

RULE: If there is a K that says a licence can’t be revoked, the requirement will be binding on the original party to the K and on any successors – only a bonafide purchaser for value without notice can disregard the K+licence combo and revoke it – equity will protect the licenceeFACTS:

- 1936 – father buys house for son and his wife- Promises that once they pay the last installment, the house will be theirs

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- wife paid installments up until dad’s death, even though title never transferred- Will gave property to widow – son left wife and went back to mum- Wife stayed in house and continued payments – mum tries to kick her out and get house

HELD: Wife wasn’t a purchaser, renter, owner – courts characterized her as a licensee with a K with the Dad

- She has a contractual right to remain – enforceable in equityANALYSIS:

- Applies same reasoning as Hounslow (hadn’t happened yet), but applies it to 3Ps- Looks to Wood v Leadbetter and to Wintergarden cases – finds that there is an

interposition of common law and equity = ability of all judges to apply law from both - As long as there is a K saying that the licence couldn’t be revoked/there is a K in place

that says they have a right to stay there until they stop fulfilling their contractual obligation to makes payments

- “neither the licensor or anyone who claims through him, except a bona fide purchaser for value without notice” is free from being bound – I think I fucked up this quote pretty awesomely

- big difference between this case and Hounslow is that this case involves 3rd parties- mum wasn’t a purchaser for value without notice – she had notice and it was a gift

SPECULATION ALERT!!!!!- Because there are so many areas of related law that are moving towards recognition of

personal obligations in order to counter unjust enrichment, it is a possible development that licencing could go the same route

- Errington was kind of a joke long ago, and even though Hounslow follows the same reasoning, it takes care to distinguish itself from Errington by clearly stating that it is not considering 3rd parties

- EXAM – be on the lookout for a situation in which there is a license involving a 3P successor to the original licence

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Personal PropertyFindersWHAT: lost chattelsLOST: involuntarily loss of possession, and owner is ignorant of its whereabouts (accident usually) – not mislaid, abandoned, treasure trove, cultural artifacts

- MISLAID: owner puts item somewhere deliberately (cached) and owner just doesn’t know where it is. If so, then owner of location of cache is the bailee

- ABANDONED: owner has surrendered the property and rights in the item voluntarily – relinquished all rights, title, and possession (as a matter of both fact and intent). If so, finder becomes the true owner, without being fixed to a bailment

o Howell thinks it is a very interesting thing to think about – when something becomes abandoned…garbage on curb – is it abandoned before it gets picked up by garbage truck?

- TREASURE TROVE: gold, silver, bullion that’s been cached or concealed – the crown owns it under the principle of “treasure trove”

- CULTURAL ARTIFACTS: ownership goes to govt or specific group

GRAFSTEIN – owner of property knows about item – has rights to itRULE:

- to be a finder you must take possession (exert de facto control = power to use and exclude others from using) when no one else had a previous claim of interest.

- If in/under/attached to private land, owner presumed to have control more so than if just on land

- Finders can find items on private land, even if not an ownerFACTS:

- Employee finds box full of money in pile of garbage and gives to employer unopened (no exercise of control by finder) - note if possible Fixture? Mislaid/Cached? Abandoned?

- Employer puts on shelf – thinks might be tools- Years later, 2 new employees cut lock and find 38K, split cost of new lock and relock- Employees tell employer what’s in box & all 3 agree to split it 3 ways (acting like owners)- Wife and employer return with legal counsel and claim it’s husband’s

ISSUE:- Has there been possession/bailment? By who?

HELD: YES – employer/ownerANALYSIS: very fact-based analysis*Bailee is the party that exerted the most control over the item

1) Is it a lost item? YES – not mislaid, abandoned, or cached – nor a fixture2) Did employer take possession of box and create relationship of bailment? YES – so

prima facie presumed to have possession of contents = owed a duty to owner of cash to provide a certain standard of care

3) What was the required standard of care? b/c employer had no knowledge of cash, not high, and no obligation to open box

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4) Did employer meet standard of care? YES - didn’t act like an owner and give it to first finder – no evidence that prior bailee (first finder) took control either – if not, then tort

CRANBROOKFACTS:

- Money found in couch that had been passed around, returned to true owner who had a habit of hiding money.

- Owner was dead so it went to his estate

KOWAL – owner of property doesn’t know about item – no obligations to true owner, less rightsRULE: whoever owes the obligation to the true owner should get the item/rights

- If unattached, then less presumption that owner has possessionFACTS:

- P finds pump on D land – laying on ground, unattached – P had permission to be on land- Owner didn’t know about pump

ISSUE: who gets pump/is the bailee?HELD: P is finderANALYSIS: P took possession and owner didn’t even know about it. P had obligation

PARKER, 1982 = general rule!RULES:

- Finders only get rights to an item if it is:o Lost/abandonedo They took it into their care and control

- These rights are subject to the true owner’s rights and are lower/limited (not cancelled out) if the finder had dishonest intent or was trespassing

- Finder has obligation to reasonably try and find new ownerFACTS:

- Gold bracelet found in airport executive lounge- P leaves it with lounge attendant – exercises some control when he gives it…

o gives instructions that he wants it if not claimedo leaves name and address

- There is no system to deal with lost and found items - Attendant sells it – finder suesISSUE: - does the finder have rights to the bracelet? YESANALYSIS: - the party that asserts the most control has the best claim to an item

- Attendant asserted some control, but it matters that there was no system in place to deal with lost and found

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Bailments (Finders help illustrate the concept)WHAT: a relationship based on you voluntarily taking into custody a chattel that belongs to someone else – same item must be taken that is going to be returned

- can exist without a K- relationship doesn’t exist if you don’t know you have the chattel

NOT: - if you get a cow and agree to give a similar cow back in 3 years, it is simply an

arrangement with a K for a return gift - not a bailment- if it is a licence = you let someone park in driveway (unless you take control of car to

point that you can move it – eg if they leave keys) (Heffron)

BACKGROUND: bailments are common law relationships that are way older than K law; although nowadays most bailments involve a K, bailments don’t depend on Ks – see finders!

OBLIGATIONS: the bailment relationship involves 2 obligations1) Liable for Conversion = if you start acting like you own the chattel, you are

contravening the bailee role and can be liable for conversion – less common2) Liable for Negligence = behaving in a way that breaches a standard of duty. The

standard of duty is determined by the nature of the bailment – most common Bailment for exclusive use of bailee = highest standard of care

- BURDEN: on bailee to provide evidence they haven’t infringed the req stand. of care - IF K EXISTS: can speak to the relationship. Examples:

exclusion clause saying there is no liability in certain circumstances K could clarify the relationship – lets you use space to store a car (not a

bailment) v taking custody/possession of the car- Then we move to torts considerations – either end up with conversion or negligence –

usually negligence

LESSONRULE: to determine a bailment, focus on possession, custody, taking controlFACTS: car left in garage and damaged, but no bailment b/c owner kept keys and had access to take car at convenience

MORRIS, 1965 – how to find out if there’s a bailment1) Is it a bailment?

a. Intent to take into possessionb. Actual taking into possession

- If so, there are obligations in tort for negligence and conversion – Bailee has duty of care2) Did bailee meet the required standard of care? Bailee must prove they met standard- Depends what the bailment was for:

o Lowest standard – for benefit of bailor alone (only liable for gross negligence)o Highest standard – for benefit of bailee alone (liable for least neglect; item can

only be used for the purpose it was leant)

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o Ordinary standard – for mutual benefit- If a K – exemption clauses can limit liability

CRAWFORD, 1952 – explains difference between a bailment and a saleRULE: bailments are about taking possession of an item and then returning the same itemFACTS: cow sold with intent to give different cow back later on – not a bailment but a K of sale

Bailment v Licence

HEFFRON, 1974 – explains difference between a bailment and a licenseRULE:

- must differentiate a bailment from a mere licence b/c otherwise there is not duty of care since licences don’t make you a bailee

- Bailees are liable for possession inside the bailment (car) if it would be reasonable to expect those types of things would be in there

Bailment if…- you can move chattel around at your convenience- the means of control of the chattel are at bailee’s disposal- a ticket indicates how bailor will retrieve the chattel (not just a receipt)- people were hired to look after chattel- there is a system of operation in place

FACTS: car left at a parking garage disappeared – bailment relationship found

Palmer; Martin Town and Country- provide variations in which license might be found…

o Attendant may offer gratuitously to assist a car owner at a time of particular congestion – and can offer to park car

In such a situation, agreement is between the attendant and the owner Analogize Parker– no system in place to deal with the issue – a one-off

event

BATA – looks very much like a bailment, but words of K address the nature of the relationship- Signs said “fee is for use of space only”- Court characterized the words as a reflection of the true nature of the K, not as an

exclusion clause

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Sub-Bailment

WHAT: when a bailor gives an item to a bailee, and then the bailee gives it to a sub-bailee, thus becoming a sub-bailor (very little authority available, despite frequency in society)EFFECT: if sub-bailee screws up, they can be sued directly by the bailor b/c Privity of K doesn’t apply in bailment

MORRISFACTS:

- Bailor gives fur stole to bailee to clean; Bailee gives it to sub-bailee employee who steals it; Bailor tries to sue the sub-bailee

ISSUE: Can bailor directly sue sub-bailee?ANALYSIS:

- Gives 2 approaches to issue of sub-bailment1) Lord Diplock

o Uses basis that the sub-bailee has voluntarily taken into possession that they knew to be the property of someone other than the sub-bailor

o A to B then B to C – C knows the item belongs to someone other than Bo By taking possession voluntarily, they create a proprietary bailment relationship

with original bailor (A) – even though they don’t know them or who they are No K Very much like finders Gives rise to tort liability – conversion or negligence

o Emphasizes conversion tort in the case at hando Emphasizes no need for a K to find bailment and emphasizes the tort of

conversion2) Lord Denning

o When you look at relationship between bailor and sub-bailee, and ask if bailor can sue sub-bailee in the absence of a K between them… we answer yes

“yes” is based on a theory that the bailor has an immediate right to possess the item

this might get funky if sub-bailor has had possession for a couple months

EVEN IF there is no immediate right to possession, if there is damage to the item that is permanent, the bailor can sue directly

RATIONALE: This theory can be compared in tort law to the position of a person who holds a remainder or reversion – such people have no right of occupation (occupation rights lie with prior owner – life holder to sue in trespass)

o BUT, if there is an element of permanent damage or loss, then the holder of the remainder can sue against the activity that is causing the loss

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Howell says Diplock’s approach has a wider scope of application and fits better with our understanding of Finders

PUNCHFACTS:

- Bailor gives jewelry to bailee to clean; bailee insures it for $100 and sends it away for cleaning to sub-bailee; mail strike results in a courier being hired to send it back and it never gets back

- As in Morris, sub-bailee knew that the jewelry didn’t belong to sub-bailorISSUE: can sub-bailee rely on their K with sub-bailor to limit liability to the bailor?ANALYSIS:

- ONCA takes Diplock approach from Morris- Bailment is independent of K, and is established by voluntary taking goods into custody- Looks at burden – says it is on bailee to show that they took appropriate care = most

important thing to keep in mind when looking at Ks with exclusion clauseso Can only be removed if the K said that they were “under no obligation to even

explain what might have happened” – otherwise that burden on bailee remainso Burden: damage occurred without neglect, fault, etc…

- How to determine standard of care:o Look at value of item (11,000 ring); Look to track record of care (had been using

registered mail for 20 years); Generally no obligation on bailee to insure – but certain circumstances might call for it (this is one of those situations)

HELD:- CN, Savoy and Walker all liable- But, ended up on CN and Savoy because of vicarious liability

*** shows that if you have conditions regarding the voluntary taking into possession of an item, then you have got to draw attention to the conditions found in the exclusion clause if you want to benefit from them!

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Gifts- When you look at gifts you are dealing with issues surrounding possession- Following through on Lord Diplock, the important thing is the taking of possession – see

case above on sub bailment

2 Requirements for Valid Gifts:1) Legal capacity to give

o No title, no gift – nemo dato No mental capacity, no gift (kids, mental disabilities, drunks, undue influence

relationships)2) Legal capacity to receive

o Undue influence relationships

3 TYPES:1) GIFTS INTER VIVOS : this is the important one2) DONATIONS MORIS CAUSA: hybrid situation – gift inter vivos + bailment3) WILL

GIFTS INTER VIVOSMust have:

1) Intent to give (make a gift)o Clear intention to divest themselves of the possession, not just bailmento Clear, unambiguous words that are sufficient to change ownership

2) Delivery of gift (includes deed) – this isn’t just evidence of intent to gift, it is necessary o Gift must be given or gifted by deed (signed, sealed, delivered) – not enough to

just say in words or writing that you are making a gifto Can be constructive/symbolic delivery if you can’t actually physically hand it over,

you would hand over something that controls it = keyso RULE: delivery of gift is an element itself, and not an indicator/evidence of

another element – such as intention (COCHRANE)

- Until these two requirements are met, the gifter can change their mind- After they are met, a gift cannot be revoked- Intent and delivery are separate determinations (can’t combo them because delivery is

both a feature of bailment and gifts) (HARDY)- Can be hard to show delivery when parties live together, since both the donor and

donee continue to use the chattel – will often end up in court if one of the parties goes bankrupt and they don’t want to give up all their assets to pay creditors (Re COLE)

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Re COLE:RULE: COMMON ESTABLISHMENT POSES DIFFICULTIES FOR ESTABLISHING BOTH DELIVERY AND INTENT!!! – if 2+ people are involved in common establishment, courts look to legal ownership

o Must ask – what should have been done? Deed of gift Sale contract Execute some other documentation and establish a paper trail – change

registration with insurance company (like a car)- evidence that the donor retained possession can negate a gift- proximity to and handing of chattels is not delivery

FACTS:- Parties live together (in case they are married – but could be roomies/office mates) - Bankruptcy –says he gifted furniture to wife b/c it’s in their interest for her to have it- In interest of both husband and wife at this stage that furniture belongs to wife- For gift: covered her eyes and had a big reveal; she ‘handled the furniture’- Against gift: furniture was a shared item in a shared living space

ANALYSIS:- Can’t distinguish this as a clear delivery of a gift - Law will look to who holds the title – unless they can demonstrate that there was

intention to alter title- Remember the context of the case –

o that it was years later when they brought their argumento that they had a pretty good reason to “sing the same tune” about who owned

the furniture

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DONATIONS MORIS CAUSA

- hybrid situation – gift by will + bailment- A delivery is made, then gifter indicates an intent that if they die it would be a gift OR if

they survive, it will be a bailment- ISSUE – gets funky with safeguards around execution of wills

o Wills require witnesses in order to establish authenticationo Must be looked at carefully if there is a dispute as to a certain itemo Ontario – courts have taken a very strict approach to this issue – other provinces

haven’t – but they haven’t faced similar facts to Thomson 3 elements:

1- contemplation of death (not necessarily expectation of it)2- delivery of subject matter (or symbolic delivery of it – such as a key for a car)3- words of context that indicate intention

CHAUVEL v ADAMS:FACTS: injunction against D from selling property b/c P claims deceased gifted stuff in case of death – gave keys to boat to P (but also to another person) ISSUE: If you know you are going to die, can you make a gift in contemplation of death?

- point of talking about this is that you have got to look at the facts of each case to understand the intention and whether or not delivery has occurred

THOMSON:FACTS:

- person on several occasions before taking a flight would give his lady friend the keys of his car and endorsed ‘change of ownership’ papers because he was afraid of death

- final trip was to Winnipeg, where he died from a heart attackANALYSIS:

1) you have to die from the contemplated peril – he didn’t2) contemplated peril has to be an objective peril – flying/ordinary life not enough peril3) It matters if you had time to make a will – why didn’t they just make a will?

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