Common Law Property

Professor Wendy AdamsFall Semester, 2015

For PubDocs, compiled by Massimo Orsini*Note: This document makes use of several already existing summaries and online resources. Sections may be borrowed in their entirety from the available coursepack, from Wikipedia, or from previous PubDocs (especially Michael Shortt). I am making no representations of ownership or originality.

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Updated Syllabus/Table of Contents

Chapter 1: Introduction to Property Rights

Property as Rights, not Things- Introduction- Macpherson, “The Meaning of Property”

Chapter 2: What Kinds of Rights, and What kinds of things?

2.1: How are we to Decide, and what are the implications?- Theories of Property- Williams, “The Rhetoric of Property”- Singer, “Property and Social Relations”

2.2: Innovation and Disruption- International News v. Associated Press (1918)- Tucows.com Co v. Lojas Renner S.A

2.3: Does the State create Property?- Reich, “The Liberty Impact of Property”- Watson, “Right Economic Rents, Not Inequality”

2.4 Can subjects be objects?- Moore v Regents for University of California (1990)- Dredd Scott v John Sandford (1986)- Reiter, “Rethinking Civil Law Taxonomy: Persons, Things, and the Problem of

Domat’s Monster”- Diamond v Chakrabarty (1980)- National Post, “Sperm Recognized as Property in BC Case”- Nonhuman Rights Project (NHRP) v Stony Brook University (2013)

Chapter 3: Acquisition and Possession

3.1: What is possession?- Pierson v Post, Caines Report 175 [NY SC 1805]- The Turbantia [1924]- Popov v Hayashi [2002]

3.2: Finders- Armory v Delamire [1722]- Keron v Cashman [1896]- Bird v Fort Frances [1948]- Moffatt and Another v Kaza [1948]- Parker v British Airways Board []

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3.3: Adverse Possession- Merill, Property Rules, Liability Rules, and Adverse Possession (1985)- Texas Man Pays $15 to Move Into $340,000 House

3.3.2: Adverse Possession: The Quality of Possession- Re. St Clair Beach Estates Ltd v. McDonald et Al- Da Costa and Balfour, Property Law: Cases, Text, and Materials (1982)- Beaudoin v Aubin [1981]- Lundrigans Ltd v. Prosper [1981]

3.3.3: Averse Possession and the Inconsistent Use Test- Masidon Investments v Ham [1984]- Teis v Ancaster Town [1997]- Gorman v Gorman [1998]

Chapter 4: Exclusion

4.1: The right to exclude, and the right not to be excluded- Merill, Property and the Right to Exclude- Marsh v State of Alabama [1946]- Cadillac Fairview Corp Ltd v. RWDSU [1989]- United Steel of America v US Steel- Singer, The Reliance Interest in Property (1988)

Chapter 5: Limitations

5.1: Easements- Re. Ellenborough Park [1956]

5.1.2: Positive and Negative Easements- Phipps v Pears [1965]

5.1.3: Creation by Express or Implied Grant (Includes Express Grants, Implied Grants, Exceptions, Prescriptive easements)

- Wong v Beaumont Property Trust Ltd [1965]- Barton v Raine (1980)

5.1.4: Creation by Presumed Grant AKA Prescription- Easements by Prescription Intro- User as a Right- Garfinkel v Kelinberg [1955]

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- Kaminskas v Storm [2009]

5.1.5: The Scope of Easements

5.1.6: The Termination of Easements

5.2: Restrictive Covenants and the Common Law- Austerberry v Oldham [1885] Running Benefit

5.2.1: Running the Burden in Equity- Tulk v Moxhay Running Burden in Equity

5.2.3: Negativity and the Requirement of a Dominant Tenant- London City Council v Allen and Others [1914] Equity on Dominant + Servient

Lands- Galbraith v Madawaska Club Ltd [1961] Covenant must touch and concern the

land of the covenantee

5.2.4: Running the BENEFIT in Equity- Re Secretov and City of Toronto [1973]

5.2.5: Restrictive Covenants and Public Policy- North Vancouver (District) v Fawcett [1998]

5.2.6: Termination of Restrictive Covenants

5.3: Expropriation and Regulatory Takings- Keystone Bituminous Coal Ass. V DeBenedictis (Pennsylvania Dept. of

Environmental Resources) [1998]- Lucas v South Carolina [1992]- Kelo v New City London [2005]

Chapter 6: Dividing Estates

6.1: Expropriation and Regulatory Takings Cont’d- Manitoba Fisheres Ltd v. Canada [1979]- The Queen in Right of British Columbia v Tener et Al [1985]- Re Haddock and Ontario (AG) [1990]- A and L Investments v Ontario [1997]- Mariner Real Estate Ltd v. Nova Scotia [1999]

6.2: Tenures and Estates- K Gray, Elements of Land Law (2x)- R Scane, Notes on Life Estates in Fee Tail

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- [Present and Future Interests]- K Gray, Elements of Land Law

6.2.2: Introduction to Conditional Estates- Megarry and Wade, The Law of Real Property- Re McGoldan [1969]

6.2.3: Conditions and Uncertainty- Sifton v Sifton [1983]- Clayton v Ramsden [1943]

6.2.4: Conditions and Public Policy- Re. Noble and Wolf [1949]- Conveyance and Law of Property Act- Re Canada Trust Co and Ontario Human Rights Commission [1990]

6.2.5: Restraints on Alienation- Laurin v Iron Ore Company of Canada [1977]- Title, Proof and Registration

Chapter 7: Dividing Title and Possession

7.1: Leases and Licenses- Metro-Matic Services v Hulmann [1973]

7.2 The Independence of Covenants- Notes

7.3: Law Relating to Abandonment - Notes- Highway Properties v Kelly, Douglas & Co [1971]

7.4 Mitigation- Notes

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Part One: Introduction to Property Rights

CHAPTER ONE: PROPERTY AS RIGHTS, NOT THINGS

Materials designed to achieve two principle purposes:i) Basic principles of the common law of property; both traditional CML

“ownership” and rights less than ownership (ex. Leasehold relationships)ii) The Nature of Property; Ask what the word “property” means to a lawyer and

examine the approach of the courts.

For lawyers, as per Singer, the word “property” refers to that set of rules which govern “the relations among people regarding the control, use and transfer of valued resource.”

Breaking the definition down;

a) Property as a set of “rules” Property does not consist of the things or resources which are the objects of property law, but in the RULES which govern how those resources are to be used

b) Property rules govern “relations among people” Property entitlements never absolute

c) Property rules govern “control, use and transfer”d) Property rules concern “valued resources” but tautological as resources are not

valued until property rules are applied to it.

Property rules are not static.

The Categorization of Property in the Common Law

Principle distinction: Common law property split between real property (land) and personal property (all other forms of property).

Real Property is further sub-divided into corporeal hereditaments – i.e. the Estates System described later, and incorporeal hereditaments; interests less than title such as easements and covenants.

Personal Property sub-divided into the categories of choses in possession (TANGIBLES) and choses in action (INTANGIBLES).

Intangibles refer to things like copyright, trademarks, patents, stocks, bonds, corporate shares, a right to enforce a debt, etc. (Sometimes even if they have tangible manifestations – ex. A share certificate).

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North America moving towards an information economy Legal significance of intangibles increased.

C.B. Macpherson, “The Meaning of Property”

Meaning of property not as something static. Property wrongly associated with the possession of a thing, whereas it truly concerns enforceable rights. Macpherson points to the notion of property as something that develops and evolves over time, as both an institution and a concept, where the latter two influence each other over time.

In common usage, property is things, whereas in law and in the writers, property not things but rights, in or to things.

What distinguishes property from mere momentary possession is that property is a claim that will be enforced by society or the state, by custom or by law.

Property as a right; a right in the sense of an enforceable claim to some use or benefit of something.

Property as a political relation between persons.

“State Property”: Consists of rights which the state has not only created but has kept for itself or has taken over from private individuals or corporations; i.e. airwaves for radio and television communication.

State property not common property as we have defined it: not an individual right not to be excluded.

[…]

The notion of property as things is on its way out and it is being superseded by the notion of property as a right to an income; but this will leave the more basic misconception, that property means exclusive private property.

But with state developments, the concept of property as exclusive, alienable, ‘absolute’ individual or coproate rights in things becomes less necessary.

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CHAPTER TWO: WHICH RIGHTS IN WHICH THINGS?§1: HOW DO WE DECIDE, AND WHAT ARE IMPLICATIONS?

Introduction.

From the Syllabus: How do we decide, and what are the implications?

From Book: This chapter is about novel claims for property rights, where the cases involve courts deciding whether to award property rights in certain things to certain individuals. These cases prove that Macpherson is correct to suggest that “property” is a changing concept.

MacPherson: All societies provide ethical justifications for private property. Property is controversial, and its justification is always thought to be found in basic human or social purpose. For two reasons: (i) property is a right in the sense of an enforceable claim, (ii) while its enforceability is what makes it a legal right the enforceability itself depends on a society’s belief that it is a moral right. It is an enforceable claim because it is thought to be a human right.

Theories of Property [From Chapter Two]

Even where analysis might suggest that the court Is strongly motivated by a desire to attack a particular social problem, one usually finds the decision itself to be making reference to both precedent and theory.

1) Labour Theory

Most commonly-cited justification for private property. Theory goes back to John Locke; Individuals have a natural right to their own labour. When labour was mixed with anything, the thing was removed from the state of nature and became the property of the individual who had worked with it.

You should look for this labour theory in particular in INS v AP and Victoria Park, and it also arises later in the materials in Caratun.

2) Occupancy or Possession

Another justification is that of “occupancy” or possession. The person who first controls or occupies land or a chattel is allocated property rights.

Not a general justification for private property, but a justification for the assignment of particular rights to particular persons.

3) Utility

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Principle of utilitarianism. Originally from Jeremy Bentham, who argued that the guiding principle of all social organization should be the principle of utility; greatest happiness for the greatest number, where happiness measured by the excess of pleasure over pain.

Security in the form of private property was needed to ensure sustenance.

While Bentham thought that equality in property was a contributor to happiness, he saw it as a distinctly lesser goal. “[…] If the lot of the industrious was not better than the lot of the idle, there would be no longer any motives for industry”. […]

Thus utilitarianism can in principle support a degree of expropriation, although such a policy affects the security aspect of utility.

(4) Law and Economics

Two versions of law and economics. (i) “Market Efficiency” A society’s private property regime should therefore

incorporate maximum levels of exclusivity (make all things capable of private ownership), maximum uses (which enhance value), and maximum transferability (which increases exchange). These law and economics scholars assume that all people are rational wealth maximizers.

(ii) Same assumption about human nature, but it uses economic analysis to describe rather than prescribe. Asks what people are likely to do in response to a given rule.

**This school light say that INS v AP is correctly decided because unless some protection is given to the producers of news copy there would be no incentive to on producing it.

(5) Freedom and Personality

The fifth general theory justifying private property is that it enhances human freedom and moral development. Various versions of this.

One version claims that private property gives the citizen freedom from state intervention, thus more individual autonomy. Confers power as against the state.

Critics point out that (i) this is freedom for the few, not the many. (ii) the argument ignores that fact that the state does intervene to protect private property.

Another version of the “human freedom and development” theory starts with Hegel, who argued that private property – assertion of dominance over things which liberated the personality, made human beings human.

(6) Radical Theories

Theories that consider the need to reduce private powers Does this consideration inform Brandeis’ dissent in INS v AP?

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Attention to property as power might mean limiting a landlord’s ability to set his or her own term sin the rental market – rent controls and security of tenure for tenants. Or it might mean insisting that one spouse who participates in the waged economy does not keep all of the fruits of that participation, but must share them with a spouse who performs domestic labour – family property legislation. See the Caratun case. Or, return to residential tenancy example.

Legal analysis tends to assume at times that there is an “essence” to what is property; i.e. only things with certain attributes can be property.

WILLIAMS, Joan: “The Rhetoric of Property

Focus on law as “constitutive rhetoric” dedicated to the “art of constituting culture and community”. Process “by which community and culture are established, maintained, and transformed.”

Historical view of the intuitive image of absoluteness regarding property; i.e. Blackstone’s commentaries. But Historian Forrest McDonald noted that “Blackstone’s sweeping definition overstated the case; indeed, he devoted the succeeding 518 pages of Book 2 of his Commentaries to qualifying and specifying the exceptions to his definition.”

English landowners’ traditional dominion was far from absolute: i.e. Crown owned all the swans/whales/tall timbers, and had extensive powers to take property without compensation.

If property rights have never been absolute, why is the rhetoric of absolutism such a hardy perennial? “Mythology of property”?

Absolutism reflects a strain of theory crystallized by John Locke. […] The “This land is my land” strain of constitutional rhetoric tends to dominate Americans’ self-description of their beliefs about property.

Thomas C Grey: “In the English-speaking countries today, the conception of property held by the specialist (the lawyer or economist) is quite different from that held by the ordinary person.”

Of Foxes, Chimney Sweeps, and Other Pressing Issues:Reference to Pierson v Post: Involves one Mr Post, who initially pursued a fox, and Mr Pierson, who intercepted and killed it.

The starting point for analysis of Pierson is John Locke, who establishes property rights through a narrative of acorns in the wild: “Nobody can deny but the nourishment is his. I ask, them, When did they begin to be his>? When he digested? Or when he ate? Or when he boiled? […] That labour put a distinction between them and common. […] ‘Tis the taking any part of what is common, and removing it out of the state of nature leaves it in, which begins the property; without which the common is of no use.”^John Locke’s acorns; labour as means of acquiring property from what was in the common.

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Finders cases reinforce these messages: “Why not give property to the person who takes it out of the common?”

Williams: Blah blah blah but property doesn’t really work like this (Locke’s possessive absolutism).

SINGER, Joseph William: Property and Social Relations

Property rights regulate relations among people by distributing powers to control valued resources.

Property rights often involve bundles of particular entitlements.

Yet if property involves a bundle of rights, it is not at all clear that all the sticks in the bundle fit comfortably together.

The owner’s right to exclude and power to transfer may conflict with and be limited by the public’s rights of access to the market without discrimination based on race or sex or disability.

Singer on the Classical View: The classical conception is premised on widely shared norms of promoting autonomy, security and privacy. But, The classical model misdescribes the normal functioning of private property systems by vastly over-simplifying both the kinds of property rights that exist and the rules governing the exercise of those rights. It also distorts moral judgment by hiding from consciousness relevant moral choices about alternative possible property regimes.

Singer goes on to show how property rights don’t really work this way; rights are not absolute, nor is title. Examples include land use disputes, or land/resources that has been divided between several parties.

Further, property owners’ rights are often limited to promote the interests of non-owners (ex: public accommodations laws that prohibit business open to the public from excluding or segregating customers on the basis of race).

The most central right associated with property (the right to exclude) regularly limited by federal and state statutes.

Social Relations Model: “A conception of property based on social relations. This model reconceptualizes property as a social system composed of entitlements that shape the contours of social relationships.”

Bundle of Rights: Multiple contexts in which property is owned (ex. Family relations, business organizations, housing)

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Property rights must be understood as both contingent and contextual The scope and extent of property rights are dependent on the effects that the exercise of those rights has on other people.

Property law and property rights have an inescapable distributive component.

Social relations model reimagines property by recognizing important features of property that are obscured by the classical (LOCKE) ownership model:

i) Property rights as relationalii) Property rights held by one person often conflict with property rights held by

othersiii) Property rights limited by non-property rightsiv) Property both an individual entitlement and a social systemv) Distributive issues are central to property lawvi) Owners have obligations as well as rights

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§2: Innovation and Disruption

International News Services v Associated Press (1918)

*Notes taken from case and Wikipedia.

A case where the US Supreme Court enunciated the “misappropriation doctrine” of federal intellectual property law – that a “quasi-property right” may be created against others by one’s investment of effort and money in an intangible thing, such as information or design.

INS extended the prior law of unfair competition to cover an additional type of interference with business expectations: “misappropriation” of “SWEAT OF THE BROW” (borrowing from classic/Lockean conceptions)

MAJORITY DECISION; Written by Justice Pittney for the Majority

Deciding that this was not a matter of copyright, Pitney approached the issue from the perspective of unfair competition. He found that there was a quasi-property right in the news as it is “stock in trade to be gathered at the cost of enterprise, organization, skill, labor and money, to be distributed and sold to those who will pay money for it.”

Given the “economic value” of the news, a company can therefore have a limited property interest in it against a competitor (but not the general public).

The court characterized INS’ behaviour as misappropriation.

The court justified its creation of a “quasi-property right” in these terms:

“[INS] is taking material that has been acquired by AP as the result of organization and the expenditure of labor, skill, and money, and which is salable by AP for money, and that INS in appropriating it and selling it as its own is endeavoring to REAP WHAT IT HAS NOT SOWN, and by disposing of it to newspapers that are competitors of AP's members is appropriating to itself the harvest of those who have sown.”

Court decided that this process amounts to an unauthorized interference.

Further, concerns of equity:

“[…] a competitor who is misappropriating it for the purpose of disposing of it to his own profit and to the disadvantage of AP cannot be heard to say that it is too fugitive or evanescent to be regarded as property. It has all the attributes of property necessary for determining that a misappropriation of it by a competitor is unfair competition because contrary to good conscience.

(Affirming property attributes)

Holmes Dissent

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Began by challenging the Court’s concept of property or “quasi-property” as the majority opinion terms it:

“Property, a creation of law, does not arise from value, although exchangeable – a matter of fact. […] Property depends upon exclusion of law from interference, and a person is not excluded from using any combination of words merely because some one has used it before, even if it took labor and genius to make it.”

Brandeis Dissent

Brandeis objected first to the creation of a new property right, even if called “quasi-property”.

Next, he denied that “reaping where another sowed” is an actionable tort.

He objected to the majority’s saying that “INS cannot be heard to say” such and such “in a court of equity, where the question is one of unfair competition” He said that there was no basis to invoke equity; “no elements of equitable title or breach of trust.”

Fearful of the willy-nilly-ness of the courts in defining Quasi-Property:

“The creation or recognition by courts of a new private right may work serious injury to the general public, unless the boundaries of the right are definitely established and wisely guarded.[…] Considerations such as these should lead us to decline to establish a new rule of law in the effort to redress a newly disclosed wrong, although the property of some remedy appears to be clear.”

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Tucows.com Co v. Lojas Renner S.A.

Motions judge held that a domain name was not personal property within the meaning of Rule 17.02(a) and that, being intangible, it was not located in Ontario.

Appeal was allowed. The bundle of rights associated with the domain name that the appellant had as purchaser and registrant satisfied the attributes of property in that, at present, the appellant could enforce those rights against all others. A domain name was part of the intangible property of the appellant’s business.

The Nature of a Domain Name

An Ontario Superior Court case, Judge Nordheimer:

“It does seem to me to be difficult to characterize a domain name as property. When I say property, I refer to either real or personal property. I appreciate that a domain name, like a copyright or a trademark, could be properly characterized as intangible property. “Judge ultimately concluded that because a domain name lacks a physical presence it was not property in Ontario.

But, developing international jurisprudence and academic commentary appears to be that domain names are a new type of intangible property. American jurisprudence, Kremem v Cohen, held that a domain name is intangible property because it satisfies a three-part test: (i) capable of precise definition, (ii) capable of exclusive possession or control, (iii) capable of giving rise to a legitimate claim for exclusivity.

For the most part, academic commentators also agree that domain names should be considered a form of property; “results in a valuable asset that is freely traded on the open market and that it is occasionally stolen by a bad faith actor” (Jacquieline Lipton in Bad Faith in Cyberspace)

Attributes of Property

No agreed list of required attributes of “property” at common law. Professor Ziff in Principles of Property Law states the following, though:

“From an intuitive perspective the idea of property is perfectly straightforward: the term refers to those things one can own. Although it is both sensible and common to use such language, the law offers a different slant, one that tends to dwell more on the owning element. Property is sometimes referred to as a bundle of rights. That characterization means that property is not in fact a thing, but rather a right, or better, a collection of rights (over things) enforceable against others. Likewise, it has been said that "[t]he concept of ownership is no more than a convenient global description of different collections of rights held by persons over physical and other

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things". Explained another way, the term property signifies a set of relationships among people that concern claims to tangible and intangible items. “

Further, J.W. Harris in Property and Justice states:

“[…] Therefore, 'property' comprises (1) ownership and quasi-ownership interests in things (tangible or ideational); (2) other rights over such things which are enforceable against all-comers (non-ownership proprietary interests); (3) money; and (4) cashable rights. That is what 'property' is.”

Harris and Ziff emphasize that property is a collection of rights over things that can be enforced against others.

In Saulner v Royal Bank of Canada, fishing license considered as property; the bundle of rights attached to the fishing license was sufficient to qualify it as property for the purposes of the bIA and the PPSA. Also, the license unlocked the value in the fisherman’s other marine assets.

The bundle of rights associated with the domain name <renner.com> that Tucows has (as purchaser and registrant) satisfied the attributes of property as described by Harris and Ziff that at present Tucows can enforece those rights against all others.

Requirements of exclusivity as well as, as per Lord Wilberforce in National Provincial Park,

“[B]efore a right or an interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability." A domain name also satisfies this definition of property.”

Based on the above definitions from jurisprudence and academia, Tucows has a bundle of rights that constitutes “personal property”.

Held that the domain name <renner.com? is intangible personal property located in Ontario.

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§3: Does the State Create Property?

REICH, Charles: The Liberty Impact of Property

In a previous book titled The New Property, Reich looks at the possibility of property, liberty and life as being one idea and not separable: a person has no real freedom unless that freedom is supported in some way by a base of economic security.

Traditional forms of property (ex. Land or a house) VS. “New Property” which does not quite belong to individuals, such as a job, a license, or welfare endowments.

New Property as being unable to provide the security that owning a home or land might give a person. Led author to wonder what would happen to the liberty of Americans in a society in which most citizens are dependent upon a type of wealth that has the role of property, but has not been given the protected status of property.

Dependence upon large organizations; “your education/professional license/law firm job [might] mean as much to you as the private property, such as a home or land, that you might hold.” “We have made individuals dependent upon the state with consequences to liberty that are largely unrecognized.”

Individual liberty as being threatened by economic control over people and their resulting excessive dependency.

Reliance on the system for survival; model of independence where we could not survive outside of it.

Examples of abuses of power, example, a state revoking a license from someone being found drinking underage but nowhere near his/her vehicle and without intent to drive. Also examples of the denial of food stamps for strikers, despite striking being a constitutional right.

Law as continuing to treat forms of wealth that have become essentials as mere privileges Example, drivers licenses, welfare, insurance, etc.

“With new property, government is always tempted to use its power over a particular form of wealth to control some unrelated kind of behaviour.”

Example: West Virginia school passing a law providing that students who drop out of high school will have their driver’s licenses taken away.

“If we are to safeguard liberty in the coming age when new property will predominate over all other forms of wealth, we will have to create more ownership rights than now exist.”

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WATSON, Wilson: Right Economic Rents, Not Inequality

“Where people have built themselves a cozy niche safe from competition, we should root them out”.

Discussion about artificial scarcity, and the high costs of taxi and dairy farming licenses.

Discussion on how the high cost of the licenses, which effectively create quasi-monopolies, present political difficulties for reformers.

Defn. Rents: Incomes generated though completely artificial legal barriers to keep competitors out, to the benefit and enrichment of those holding the licenses when their price went up.

“If we’re going to have a policy for distribution of income, it’s rents we want to go after – income earned by virtue of some unfair regulation, advantage or privilege – rather than simple income inequality.”

Again: “Where people have built themselves a cozy niche safe from competition, we should root them out”.

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§2.3: DOES THE STATE CREATE PROPERTY?

Moore v Regents of the University of California et al.(1990)

*Notes from both the case itself, as well as the Wikipedia summary.

The case was a landmark Supreme Court of California decision regarding the issue of property rights in one’s own body parts.

Facts: John Moore underwent treatment for hairy cell leukemia at the UCLA Medical Center under the supervision of Dr David Golde. Moore’s cancer was later developed into a cell line that was commercialized. The CSC ruled that Moore had no right to any share of the profits realized from the commercialization of anything developed from his discarded body parts.

For the MAJORITY was Justice PANELLI.

The defendants, including Golde, were aware that “certain blood products and blood components were of great value in a number of commercial and scientific efforts” and that access to a patient whose blood contained these substances would provide “competitive, commercial and scientific advantages”

After the splenectomy operation, Golde gave instructions to obtain portions of Moore’s spleen following its removal, and the research activities “were not intended to have any relation to Moore’s medical care.” Moore was never notified.

Moore was also instructed to visit Golde’s clinic several times after the operation; “These research activities ‘were not intended to have… any relation to [Moore’s] medical.. care’. However, neither Golde nor Quan informed Moore of their plans to conduct this research or requested his permission.”

Based upon representations “that such visits were necessary and required for his health and well-being, and based upon the trust inherent in and by virtue of the physician-patient relationship.”

Established that there was a Breach of Fiduciary Duty and Lack of Informed Consent.

MAJORITY OPINION: Court found that Moore had no property rights to his discarded cells or any profits made from them.

Regarding Moore’s claim of property under existing law, the court rejected the argument that a person ahs an absolute right to the unique products of their body because his products were not unique; “The cells are no more unique to Moore than the number of vertebrae in the spine or the chemical formula of hemoglobin.”

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Court also rejected the argument that his spleen should be protected as property in order to protect Moore’s privacy and dignity. These interests were already protected by informed consent.

Court also supported legislation regarding the destruction of human organs, and that the property at issue may not have even been cells but rather the cell line created from Moore’s cells.

Policy Concerns: Because conversion of property is a strict liability tort, the court feared that extending property rights to include organs would have a chilling effect on medical research, as laboratories could not be expected to know or discover whether something down the line of their samples was illegally converted.

Further, Moore’s interest in his bodily integrity and privacy already protected by the requirement of informed consent.

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Dred Scott v John F.A. Sandford (1856)

*Very depressing case to read.From P.J. Williams, “Alchemical Notes: Reconstructing Ideals from Deconstructed Rights”

Justice Taney, himself a former slave owner, held that s slaves were not ‘citizens’ for the purposes of the United States Constitution, Scott did not have standing to sue in the nation’s courts.

Justice Taney relied in part on the Fifth Amendment to the Constitution, which protected the right to private property from government expropriation, concluding that “the right of property in a slave is distinctly and expressly affirmed in the constitution.”

Chief Justice TANEY delivered the opinion of the court.

Question of the court: “Can a negro, whose ancestors were imported into this country, and sold as slaves, become a member of the political community formed and brought into existence by the Constitution of the United States, and as such become entitled to all the rights, and privileges, and immunities, guarantied by that instrument to the citizen? One of which rights is the privilege of suing in a court of the United States in the cases specified in the Constitution.

“The question before us is, whether the class of persons described in the plea in abatement compose a portion of this people, and are constituent members of this sovereignty? We think they are not, and that they are not included, and were not intended to be included, under the word 'citizens' in the Constitution, and can therefore claim none of the rights and privileges which that instrument provides for and secures to citizens of the United States. On the contrary, they were at that time considered as a subordinate and inferior class of beings, who had been subjugated by the dominant race, and, whether emancipated or not, yet remained subject to their authority, and had no rights or privileges but such as those who held the power and the Government might choose to grant them. “

Etc. etc. etc.

Case essentially a racist diatribe negating the citizenship rights of African Americans, given their status as mere property. Court relied on an originalist interpretation of the constitution, and held the rule of law above moral consideration.

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REITER: “Rethinking Civil-Law Taxonomy: Persons, Things, and the Problem of Domat’s Monster”

Purpose of the paper: To cast the dichotomy between persons and things as a problem not of classification (what goes where) but of the construction and function of legal categories as normative spaces within which classification takes place. Seeks to do this by “replac[ing] a static view of legal categories as discrete pigeonholes with a dynamic view [of] what emphasizes their interactions.”

Focus of two principle examples which test the confines of taxonomic classifications: Wood’s dried (and lost) leg versus Wood’s involuntary acquisition of the leg through the purchase of a barbeque, and Domat’s “Monsters.”

Dual natures of the leg; i.e. commodity of value (being used as an attraction), versus an object of personhood.

Dual nature of the “monster”: Whether the monster holds human status, or identification as an other.

From the conclusion: Both the leg in the barbeque smoker and Domat’s monster challenge the static and linear view of *Gaius’ scheme*This scheme as introduced at the beginning of the paper, where Gaius wrote of three distinct subjects of civil law: persons, things, and actions (today interpreted as “obligations” or “ways of acquiring property.”

Re. Monsters: Their lack of most of the formal attributes of humanity keeps them out of the category of persons: only in cases where such monsters have a sufficiently human form do they become persons.

And it is these interactions, with their overtones of duty, responsibility, and obligation, that really add complexity – but also interest – to the problem of Domat’s monster.

[Domat’s] recognition of the interplay between form, nature, and particularly community is an excellent illustration of the issues that categorization in law must engage. Taxonomy is a necessary evil in law.

We ought to embrace rather than avoid complexity and multivalence in legal analysis, whether we are dealing with intangibles like the right to privacy or very tangible things like legs discovered in barbeque smokers

One liner about the text: Society’s views of things influence our characterization of these very things, and even then, the boundaries aren’t so clear.

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Diamond v Chakrabarty (1980) (Patenting of bacteria)

*Notes taken from case as well as from Wikipedia.

Case determining whether genetically modified organisms can be patented.

Decision:

In a 5-4 ruling, the court ruled in favour of Chakrabarty, holding that:“A life, human-made micro-organism is patentable subject matter under 35 U.S.C. §101. Respondent’s micro-organism constitutes a “manufacture” or “composition matter” within that state.”

Ruling

Burger wrote that the question before the court was a narrow one – the interpretation of 35 USC 101 which says:

“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.”

Regarding the scope of previous legislation: In choosing such expansive terms as “manufacture” and “composition of matter”, modified by the comprehensive “any”, Congress plainly contemplated that the patent laws would be given wide scope.”

Also found that Congress had intended patentable subject matter to “include anything under the sun that is made by man”; also,

“Judged in this light, respondent’s micro-organism plainly qualifies as patentable subject matter. His claim is… to a nonnaturally occurring manufacture or composition of matter – a product of human ingenuity”

Dissent

Written by William J Brennan, joined by White, Marshall and Powell. The dissent focused on the argument that there is evidence in the legislative record that the US Congress did not intend living organisms to be patented.

Brennan affirms that the court was not confronted with a total legislative vacuum; Regarding the 1930 Plant Act referred to by the Majority:

“If newly developed living organisms not naturally occurring had been patentable under 101, the plants included in the scope of the 1930 and 1970 acts could have been patented without new legislation”

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National Post – “Sperm Recognized as Property in BC Case”

UBC to compensate hundreds of cancer victims whose sperm was inadvertedly destroyed, in a settlement that recognizes for the first time sperm as property.

In 2002, the freezer had a power interruption, which damaged or destroyed the samples.

Case turned on whether sperm is considered property under Canadian warehousing law, which does not allow the warehouse owners to insert a clause in an agreement exempting themselves from liability.

Judge concluded that the lab was similar to warehouse, storing goods for a fee, and that sperm is property and fall sunder the definition of goods under the Warehouse Receipt Act.

Nonhuman Rights Projects (NHRP) v Stony Brook University (2013)

Petitioner is a non-profit organization with a mission to “change the common law status of at lease some nonhuman animals from mere ‘things’, which lack the capacity to possess any legal rights, to ‘persons,’ who possess such fundamental rights as bodily integrity and bodily liberty, and those other legal rights to which evolving standards of morality, scientific discovery, and human experience entitle them,”

Regards the extension of habeas corpus.

*Connection can be drawn to Dred Scott; The past mistreatment of humans, whether slaves, women, indigenous people or others, as property, does not, however, serve as a legal predicate or appropriate analogy for extending to nonhumans the status of legal personhood.

“Persons have rights, duties and obligations; things do not.”

(Connect to property criterion from earlier seen theory):Animals, including chimpanzees and other highly intelligent mammals, are considered as property under the law. They are accorded no legal rights beyond being guaranteed the right to be free from physical abuse and other mistreatment.

In one instance, Oregon’s highest court found that a horse was a “person” under a statute permitting warrantless searches of property (State of Oregon v Fessenden)

Moreover, some animals, such as pets and companion animals, are gradually being treated as more than property (*This points to the role of how things are used/perceived in social relations)

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Feger v Warwick Animal Shelter: “Companion animals are a special category of property”

At least one NY court: “A pet is not just a thing but occupies a special place between a person and a piece of personal property.”

NY: Extension of trusts for pets.

Some commentators: Legal status of animals as “quasi-persons” being recognized as holding some rights and protections but not others.”

Petitioner claims, however, that its effort to elevate the legal status of chimpanzees, and other animals, above the level of things or mere property, is not addressed by animal welfare legislation.

CONTEXT SPECIFICITY The determination of whether an entity or being counts as a legal person is largely context-specific, and not necessarily consistently made:

“In the United States’ CML tradition there is not discrete body of law containing all of the applicable provisions of legal personhood. Legal persons constitute a diverse community […] The common law of legal personhood is disparate and diffuse, found in cases, statutes, and treatises”

From Is the Concept of the Person Necessary for Human Rights: “First, biological human beings are entitled to rights. Second, animals share many of the same characteristics of human beings, at least some of the same rights as human beings. Obviously, this argument only works if the shared characteristics are relevant to the ascription of rights – otherwise the analogy loses force.”

“Social Contract” argument also given to discuss the need of duties/responsibilities for personhood, but from my perspective, this is a terrible argument (i.e. people with disabilities do not qualify?)

Conclusion

The similarities between chimpanzees and humans inspire the empathy felt for a beloved pet. […] Some day they may even succeed. Courts, however, are slow to embrace change, and occasionally seem reluctant to engage in broader, more inclusive interpretations of the law, if only to the modest extent of affording them greater consideration.

Justice Kennedy in Lawrence v Texas: “times can blind us to certain truths and later generations can see that laws once thought necessary and proper in fact serve only to oppress.”

The pace may now be accelerating Confirming changing nature of the common law, and identification of property in CML.

BUT GIVEN PRECEDENT HABEAS CORPUS IS DENIED.

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NB: Self-cognizance of the court to recognize that they may effectively be on the wrong side of history, and that the courts may, at a later time, judge differently.

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§3: ACQUISITION AND POSSESSION

§3.1: What is Possession?

The following three cases deal with objects that, at the time at which they were claimed to be subject to property rights, were free of any previously held property rights.

Pierson v Post, Caines Report 175 (N.Y. Supreme Court 1805)

The question submitted by the counsel in this cause for our determination is whether Post, by the pursuit with his hounds, acquired such a right to, or property in, the fox, although Pierson killed it.

Agreed by the occur that the fox is “an animal ferae naturae” and that property in such animals is acquired by occupancy only.

Reference to Justinian’s Institutes, which adopts the principle that pursuit alone vests no property or right in the huntsman; and that even pursuit, accompanied with wounding, is equally ineffectual for that person, unless the animal be actually taken.

Puffendorf: Occupance of beasts to be the actual corporeal possession of them. Bynkershock coincides with this definition.

“The foregoing authorities are decisive to show that the mere pursuit gave Post no legal right to the fox, but that he became the property of Pierson, who intercepted and killed him.”

The actual bodily seizure is not indispensable to acquire right to, or possession of wild beasts: but on the contrary the moral wounding of such beasts, by one not abandoning pursuit, may, with utmost propriety, be deemed possession of him, since thereby the pursuer manifests an unequivocal intention of appropriating the animal to his individual use, has deprived him of his natural liberty, and brought with him within his certain control.

Also, encompassing and securing such animals with nets and toils, or intercepting them in a manner that deprives them of their natural liberty, may justly be seemed to give possession of them, to those persons who, by their industry and labour, have used such means of apprehension.

*Seems to go back to the Lockean ideals of justification via labour.

Dissent (Livingston) :

The killing of the fox as a thing of public benefit; the decision should encourage its killing.

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The person who shot the fox despite the pursuit is nothing but a “saucy intruder”; “Who had not shared in the honors or labors of the chase, were permitted to come in at the death, and bear away in triumph the object of pursuit? Whatever Justinian may have thought of the matter, it must be recollected that his code was compiled many hundred years ago.”

If men themselves change with the times why should not laws also undergo an alteration?*Indication that laws change according to social needs/Judiciary sensitive to public need

“If as beast be followed with large dogs and hounds, he shall belong to the hunter, not the chance occupant; and in like manner, if he be killed or wounded with a lance or sword; but if chased with beagles only, then he passed to the captor, not to the pursuer.”

But he was with “hounds of imperial stature” Degree of claim based on effort?

Main Points:

Majority: Court reasoned that given the common law requirement to have control over one’s possessions, merely giving chase was insufficient. Something more was needed.

The majority found that though it may have been rude for Pierson to have killed the fox, there was no reason to object as only the person to mortally wound or seize the animal can acquire possession of it.

Also discussed the nature of labour in killing the animal, and depriving it of liberty, highlighting the judge’s appeal toward a Lockean sense of property ownership.

Dissent: Argued that pursuit should be considered sufficient, as it serves a useful purpose of encouraging hunters to rid the countryside of wild noxious beasts.

Lends toward a public interest approach in this manner.

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The Turbantia [1924]

*Notes compiled from casebook as well as from online sources (casebrief.me)

SS Turbantia was an ocean liner that sank in 1916 long with a large amount of gold coins. Sippe had marked the wreck with buys, obtained limited access, and sent in divers, however due to the nature of the depth and the difficulties inherent with the activity, the divers could only stay down there briefly and had not yet retrieved anything of real value.

Issue: What is required for a salvor to have sufficient possession of a sunken shipwreck?

Ratio: Possession requires that a person have sufficient control over the object. Control is subject to the particular context and type of property; does not necessarily have to be complete dominium.

Holding: In favour of Sippe; he had sufficient control and use of the wreck to support his intention to exclude.

NB:

*In the actual case, the judge makes reference to “by reason of the great depth at which the wreck lies the difficulties involved in the work of the plaintiffs are formidable, but that, if I accept the plaintiff’s evidence, they were in effective control of the wreck as a whole; they were in a position to prevent any useful work by newcomers.”

This highlights the limitations to which possession could be exercised, although the intention to exclude remains.

NB 2:

Reference to public policy concerns/considerations: Denying the rights of the plaintiffs would effectively be a disservice: “To my mind [denying rights] would be an unfortunate conclusion, very discouraging to salvage enterprise at a a time when salvage, by means of bold and costly work, is of great public importance.”

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Popov v Hayashi [2002]

*Notes taken from Wikipedia and Casebook

California Superior Court case involving a scope of ownership between parties and conversion regarding a baseball acquired at a MLB game. The baseball was a record-setting home-run ball by Barry Bonds.

Question of the case: Who has ownership of an item when one acquired it legally, but lost it due to the criminal act of another third party, allowing the other person to, by all standard acquire the item legally?

Background: Ball first entered Popov’s glove, but upon getting immediately attacked, the ball fell to the ground. Some craziness later, Hayashi picked up the ball, and put it in his pocket.

Court eventually decided that both parties had legal rights to the ball and neither could be deprived of it lawfully. The best solution was an equitable division.

Decision set a new precedent of qualified pre-possessory interest allowing for both Popov to claim his property had been converted and it was still his, while also allowing Hayashi to have legal rights over the ball.

From Case:

Popov intended at all times to establish and maintain possession of the ball.

Hawyashi had achieved some level of control over the ball, and he intended to keep it.

NB:

From Wikipedia, two “alternate endings” would have been possible, and are inferred from this decision for future cases:

a) If Popov had not been attacked and dropped the ball on his own accord, Hayashi would have been the legal owner.

b) If Hayashi had been one of the wrongdoers he would have committed wrongful conversion and the ball would legally be Popov’s property.

NB/Moral of the Story: Courts are willing to apply equitable division where rightful ownership cannot be distinguished between the parties.

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§3.2: Finders

This section concerns the consequences of gaining property rights over goods already subject to property rights.

Armory v Delamire [1722]*With notes from the case, as well as from Wikipedia

Armory was a chimney sweep’s boy who found a jewel in the setting of a ring. Took the jewel to the shop of Delamire (a goldsmith) to obtain a valuation of the item. Delamire’s apprentice removed to gems from the setting on the pretense of weighing it. The apprentice returned with the empty setting and informed Armory that it was worth three halfpence. Armory refused and asked the apprentice to return the stones and setting in their prior condition Apprentice returned the socket of the jewel without the gems.

Issue: Whether either party had any property rights to the jewel.

Judgment: Both Armory and Delamirie had property rights in the jewel, even though neither was the true owner.

“In trover against the master these points were ruled:

“1. That the finder of a jewel, though he does not by such finding acquire an absolute property or ownership, yet he has such a property as will enable him to keep it against all but the rightful owner, and subsequently may maintain trover.

2. That the action well lay against the master, who gives a credit to his apprentice, and is answerable for his neglect

3. As to the value of the jewel several of the trade were examined to prove what a jewel of the finest water that would fit the socket would be worth; and the Chief Justice directed the jury, that unless the defendant did produce the jewel, and shew it not to be of the finest water, they should presume the strongest case against him, and make the value of the best jewels the measure of their damages: which they accordingly did.”

Defn Trover: common-law action to recover the value of personal property that has been wrongfully disposed of by another person.

Very, very weird case, not clear what it means.

Keron v Cashman [1896]

*Notes taken from Casebook as well as from online summary (casebrief.me)

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Facts: Five boys happen upon a sock. Crawford picks up, ties both ends, and began swinging it. Cashman then gets the sock (unclear whether he snatched it or if Crawford dropped it – varying accounts). Sock eventually broke open while Cashman was beating another boy with it, and money came out.

Judge: “I reach the conclusion that the lost money which is the subject of the present controversy must be treated as legally found while in the common possession of all the defendants.” The item was in actual use by all the defendants as a plaything, and as a plaything only.

When Cashman first got the stocking, he did not proceed to examine it, but commenced playing with it; the only intention or state of mind in any of the boys in relation to the stocking and its contents […] was that the stocking was treated by all of them only as a plaything, and to be used as such.”

As a plaything, the stocking with its contents was in the common possession of all the boys, and inasmuch as the discovery of the money resulted from the use of the stocking as a plaything, and in the course of the play, the money must be considered as being found by all of them in common.

Then the judge goes on to discuss alternative possibilities;

“Had the stocking been like a pocketbook, an article generally sued for containing money, or had the evidence established that Crawford, the boy who first picked up the stocking, retained it or tried to retain it for the purpose of examining its contents, or that it had been snatched form him by Cashman, I think the original possession or retention of the stocking by Crawford, the original finder, for such purpose of examination, might perhaps be considered as the legal “finding” of the money enclosed.

But… Since it was initially approached as a plaything, and was being used as a plaything common to all, it was in the possession of all.

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Bird v Fort Frances [1948]

The plaintiff was playing with a number of other boys in the rear of a pool-room built on private property in the town of Fort Frances. Found a can on a sill, found money inside, took possession it. The Constable, who then took possession of the money, questioned spent money like a fiend. When no rightful owner came forward, the city deposited it in the the city’s account. Does the money belong to the boy or to the city?

Reference to Pollock & Wright on Possession: “If a finder has reason to believe that the thing is abandoned by its owner, then, whether or not it is so abandoned and whether or not a civil trespass is committed, there can be no theft at the first because there does not exist the belief that the appropriation will be invito omino which is essential for animus furandi. […[ A taker upon a loss and finder may, like any other possessor, maintain trespass and theft and trover or detinue against a stranger.””

Invito Domino: Without consent of the ownerAnimus Furandi: The intention to steal

The plaintiff did not have felonious intent.

No authority found for the police officer taking possession of the money. When he was unable to ascertain who the true owner was, in the absence of any other claim, he ought to have returned the money to the custody from which it came.

Judgment for the plaintiff.

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Moffatt and Another v Kazana [1948]

Mr & Mrs. Russell’s bungalow with a hidden biscuit tin full of money hidden in the attic. Bungalow was sold to Mr. Stokes, and the biscuit tin was forgotten in the attic. Years after the sale of the home, Mr. Stokes discovered the biscuit tin, and took the tin and its contents to the police. Eventually police returned money back to defendant (Mr. Stokes). Mr Russell instituted an action for the recovery of his money from the defendant, but died during the course of proceedings.

Issue: Does the money belong the the plaintiff, or the defendant?

Argued on behalf of the plaintiffs that Mr. Russell was the true owner of the money in the tin box in 1951 when he deposited it in the attic’s flue, and as he had never done anything to divest himself of the property in that money, he remained the true owner until the end.

Judges made reference to Corporation of London v Appleyard, where two workmen, in the course of their employment, found a safe. Held in that case that the occupiers of the land had a better title than the finders. Importance attributed to McNair’s Statement: “In any judgment, the notes having been found within the safe, which itself formed part of the demised premises, the party in possession of the premises, […] in the absence of any evidence as to the true ownership of the notes, a better title thereto than the finders.”

From Vaysey in Re Cohen, National Provincial Bank v Katz, “in the absence of any trustworthy evidence of ownership recourse must be had to the legal presumption that the owner of land is, prima facie, the owner of chattels found on the land.”

From these authorities: The true owner of a chattel found on land has a title superior of anybody else.

Only way for Mr Stokes to claim the money was if Mr Russel either abandoned, gifted, or sold the contents of the biscuit tin. He did not abandon it. He did not gift it. Is it part of the sale of the home?

Art. 52 of the Law Property Act. 1925: does not provide that a conveyance of real property shall include a conveyance of chattels. In this conveyance there is no reference to chattels, so it would appear on the face of it that section wholly excludes any possible argument based on conveyance.

If Mr. Russell never got rid of the notes, that is to say, never got rid of the ownership of the notes, he continued to be the owner of them, and if he continued to the the owner of them, […] he had a title to those notes which nobody else would have. The plaintiff (The Russells) succeed and have judgments for the contents of the tin.

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---------------------------

Parker v British Airways Board

*Notes taken from casebook as well as Wikipedia.

(This judgment, the first of which given by Donaldson, is hilarious.)

Facts: Parker found a gold bracelet on the floor of the executive lounge at Heathrow Airport. Aware that “finders keepers” doesn’t work if the true owner claims the article. Parker gave the bracelet to an official of the airport, and asked to have it mailed to him if the owner didn’t make a claim. The owner never came forward, and the airport sold/deposited the value of the bracelet. Plaintiff sues.

Issue: Who has claim to the bracelet:

This case established an important rule regarding the rights and obligations of the finder, and the rights and liabilities of an occupier.

Rights and Obligations of the Finder

1. No rights are acquired unless (a) the item is abandoned or lost and (b) the finder must take the item under their care and control to gain rights.

2. If the finder takes it into their care with dishonest intent or in the course of trespassing, then they acquire only limited rights

3. The finder only acquires any rights against the world as a whole. The true Owner, and anyone with a prior right to keep the item that existed when the finder took it into their care have better rights to the item.

4. Employees finding items in the course of their employment are finding it on behalf of their employer (unless there is agreement otherwise).

5. The finder has an obligation to inform the true owner that the item has been found and where it is by whatever means are reasonable in the circumstances. In the mean time, they have to take care of the item. (Note: Reasonable steps)

Rights and Liabilities of an Occupier

1. The occupier has better rights than the finder to the things embedded in or attached to land. Likewise the occupier has superior rights to things attached to a building, even if they did not know it was there. (Note: Embedded and Fixtures)

2. With regard to items in (or on top of) the building: The occupier has better rights

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only if they have manifested an intention to exercise control over the building and the things in it. (Note: Examples of exercising control)

3. If an occupier has manifested an intention to control they must maintain a Lost and Found facility. (In the manner that is reasonable under the circumstances.)

4. "Occupiers" of vehicles like boats, cars, airplanes, etc. are treated like the occupiers of buildings for these rules.

Defn Occupier: A person occupying the building/land/etc. Could be the owner or tenant.

Defn Embedded and Fixtures: If you find buried treasure on someone’s land, it is there. The antique doorknob from your childhood home since it was sold? The new owners’.

In Case:

The plaintiff was not a trespasser in the lounge. Did not illegally take the bracelet into his care and control, and was acting with honesty. Prima facie, he had a full finder’s rights and obligations.

Claims must be based on manifest intention to exercise control. This was not done in the lounge by the airport.

“It was suggested in argument that in some circumstances the intention of the occupier to assert control over articles lost on his premises speak for itself. I think that this is right. If a bank manager saw fit to show me round a vault containing a safe deposites and I found a gold bracelet on the floor, I should have no doubt that the bank had a better title than I, and the reason is the manifest intention to exercise a very high degree of control. At the other extreme is the park to which the public has unrestricted access during daylight hours. During these hours there is no manifest intention to exercise any such control.”

Contextual importance for the exercise of manifest control/intention.

“As the true owner has never come forward, it is a case of ‘finders keepers’”.

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§3.3: Adverse Possession

Introduction to Adverse Possession

The common law maintains the fiction that the ultimate ownership of all real property lies in the Crown, and no individual can “own” land. Instead, individuals have “title” to land, which can be defined as a right to all uses of real property. Nowadays, title is invariable asserted through a document – a conveyance or a will.

The title to land at common law is relative. It cannot be absolute because e the Crown owns all land, and therefore it is pointless to ask a court to decide who owns the land. Instead, the question is, who has better title?

Principal aspects of adverse possession law:- That of time; all jurisdictions provide a “statutory period” during which a person

claiming a title to land must act to recover land from a wrongful possessor.- While possession by the adverse possessor must be continuous for the period of

time, this does not mean that the same person must possess the land for all that time . Provided there is no gap in possession, the rights acquired by the potential adverse possessor, the “inchoate possessory title”, can pass from one person to another so that at the expiry of the limitation period “the last successor being then in possession will acquire a title in fee simple good against the world including the true owner.”

o Via Mulcahy v Curramore, Fleet v Silverstein

If the squatter abandons the land before the expiry of the limitation period, the title holder “regains full rights”

Also, “Qualities” of possession; “inchoate possessory title”

T. W. Merrill, “Property Rules, Liability Rules, and Adverse Possession” (1985) 79 Northwestern U. L. Rev. 1122

The first justification is one that is commonly invoked in support of statutes of limitations generally – the difficulty of proving stale claims.

A concern about lost evidence. A rule requiring prompt resolution of claims is thus efficient in that it helps to minimize the costs of litigation and trial. Also a fairness concern underlying the lost evidence rationale; fears of claims.

A third reason commonly advanced in support of a system of adverse possession is that it punishes title owners who “sleep on their rights”. Under this view, the shift in entitlements acts as a penalty to deter Title Owners from ignoring their property or otherwise engaging in poor custodial practices.

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This rationale appears to rest on a social policy favouring “active” owners of property, who develop or exploit their land, rather than “passive” owners. Such a policy seems dubious, because it ignores the possibility that passive owners, such as land speculators, may perform a valuable social function by preserving the property for use by future generations.

On closer examination, however, these criticisms overstate what is required of even the Title owner in order to avoid forfeiture. The To does not have to develop his land or even occupy it; all he has to do is periodically assert his right to exclude others. When the TO is required to assert his \right to exclude, therefore, he is in effect being asked to “flush out” offers to purchase his property, to make a market in the land.

A fourth and final explanation for the system of adverse possession focuses on the possessor, and in particular on the reliance interests that the possessor may have developed through long-standing possession of the property. Interest in “preserving the peace”. After a sufficient period of time has elapsed, so the argument goes, the Adverse Possessor’s attachment to the property may be so strong that any attempt by the Title Owners to reassert dominion may lead to violence.

In another form, the reliance argument draws upon the personality theory of personal rights; the AP may have developed an attachment to the property that is critical to his personal identity.

Also exists an economic version of the reliance theory, grounded in an ex post analysis of the AP’s dilemma. AP has built on land which he believed to be his own. Concept of sunk costs or “quasi-rents”. This kind of “extortion” is unfair because it creates a disproportionate penalty given the initial “wrong” of the AP.

Buuut, the reliance rationale is troubling, as it seems to ignore a competing reliance-type interest: The interest of the TO and of society generally in preserving the integrity of the set of entitlements grounded in law. Also, consider third-parties

In sum, there are four traditional justifications or clusters of justifications which support transferring the entitlement to the Adverse Possessor after the statute of limitation runs:

i. The problem of list evidence,ii. The desirability of quieting titles,iii. The interest in discouraging sleeping owners, andiv. The reliance interests of AP’s and interested third persons.

These can be seen as mutually supportive.

Texas Man pays $15 to Move into $340,000 House:

Just YouTube this, or find the Associated Press article. More analogical can anything else.

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§3.3.2: Adverse Possession: The Quality of Possession

The next two sections explore what “quality” of possession is needed to establish an adverse possession claim.

In Re St Clair Beach the Court finds that the defense cannot succeed because the McDonalds did not have exclusive possession. Why not? Likely that if the title holder had gone out of possession, the MacDonalds would have been held to have sufficient possession.

Further point of introduction: It was stated that the adverse possession doctrine serves as a defense. However, in Re St Clair Beach the claim for possessory title is made affirmatively.

A few explanatory sentences on systems of recording:

Two such systems exist in Canadian Common Law;

i) The Registry system permits registration of all documents pertaining to land in the local registry office, but it does not require registration nor does it guarantee title. Used in the Maritime provinces, Southern Ontario, and parts of Manitoba.

ii) The Land Titles or the Torrens System: The government guarantees title as shown on the record. No need to search title in a Land Titles system: One merely obtains the official certificate of the land. Used exclusively in BC, Alberta, Saskatchewan, parts of Manitoba and in Northern Ontario.

Many areas of the country that at one time used only the registry system now have both system, with owners having an option. And this is the context for Re St Clair Beach.

Re. St Clair Beach Estates Ltd. V McDonald et Al [1974]

*Includes a 3 part test for adverse possession*Necessity of an Animus Possidendi for adverse possession, or “The Intention of Possessing”

The question to be determined is whether the appellants have stablished their claim to a possessory title of land in question.

The Grant farm was an irregularly shaped parcel of land. The respondent is the absolute owner in fee simple in possession of the Grant Farm. The appellants purchased one of the residential parcels fronting on Riverside Dr. in 1961. The appellants took possession of their parcel in August 1961 and have occupied it to the present time.

Land in dispute abuts the southerly limit of the parcel of the appellants.

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In august 1961, the land in dispute was partly grass but generally was overgrown in weeds, trees, and rubble,

House constructed on the appellants’ land was constructed in 1954. Weeping tiles for the house’s septic tank are located on the land in dispute.

The appellants’ use of the land in dispute was the normal domestic and recreational use which an owner would make of his own backyard; ie., removal of trees, brush, rubble, they bought a dog, fertilized the grass, put a sandbox, a picnic table, etc.

In so using the land the appellants never at any time had the permission r consent of the owners of the Grant Farm.

Counsel for the appellants contended that there was no evidence to support other findings of the learned trial judge; “I see no reason for different form his findings”.

The limitation on the actual extent of the conveyance was known to the appellants.

Mr Annie Grant and her family were never out of possession of the property in question, but continue to carry on farming operations on so much of the land as was arable having regard to its nature and characteristics.

The Grants and the appellants were on a friendly basis.

The title of the Grant family to the land in dispute was acknowledged by the appellants. On two occasions they attempted to purchase the property in question.

In 1969 the respondent purchased the Grant Farm and caused a line of surveyor’s stakes to be put in which clearly demarked the south boundary of the parcel owned by the appellants.

Reference to the Limitations Act: Appellants claim that more than 10 years have elapsed since they first occupied the land.

Reference to Pflug and Pflug v Collins: In order to succeed, the appellants must show,

i) Actual possession for the statutory period by themselves and those through whom they claim;

ii) That such possession was with the intention of excluding from possession the owners or persons entitled to possession, and

iii) Discontinuance of possession for the statutory period by the owners and all others, if any, entitled to possession

If they fail in any one of these respects, their claim must be dismissed.

As regards the “discontinuance” aspect aspect which I have mentioned, a question arose at trial whether Grants had discontinued their possession of the land north of the plough-line throughout the relevant period.

To reach a decision one must look to the particular circumstances; Leigh v Jack:

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“There is no dispossession of the owner or discontinuance of possession by the owner within the meaning of s.5 of the Limitations Act until there are acts by the claimants which interfere with the purpose to which the owner devoted to the land. The smallest act by the owner would be sufficient to show that there was no discontinuance of his possession.”

Further,

“occasional use of the disputed land by the title holder in a manner consistent with the uses to which such land may be put is sufficient to deprive the claimants of exclusive possession: Walker at al. v Russel et al .”

The owner of a farm cannot be said to be out of possession of a piece of land merely because he does not perform positive acts of ownership all the time.

Littledale v Liverpool College:

“They could not disposed unless the plaintiffs obtained possession themselves; and possession by the plaintiffs involves an animus possidendi. i.e. Occupation with the intention of excluding the owner as well as other people.”

Animus Possidendi: The Intention of Possessing.

APPEAL DISMISSED; Whether there was an intention on the part of the appellants to dispossess the owner was a matter to be considered.

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D. Mendes Da Costa and R. Balfour, Property Law: Cases, Text, and Materials [1982]

The precise nature of conduct required to establish adverse possession varies with the circumstances. In recent cases, the following acts have been held to be sufficient to constitute adverse possession:

- Maintaining fences, growing crops, intentionally grazing horses,- Making regular use of land for parking cards,- Building and using a small shack,- Seasonal farming,- Regular planting,- Fencing land with the intention of obtaining title, - Etc.

Conversely, the following acts have been found to be insufficient to constitute adverse possession:

- The seasonal use of land,- Occasional acts of wood cutting,- Isolated acts of cutting timber,- Casual or cutting of a lawn and minor clearing o undergrowth,- Use as a driveway where the title owner also had use of the driveway- Etc.

Beaudoin v Aubin [1981]

Ratios, via Shortt: (1) Error is no bar to animus possidendi;

(2) “Where there is possession with the intention of holding for one’s benefit, excluding all others, the possession is sufficient and the animusi is presumed… [such] intention include[s] the intention to exclude the true owner even if his rights were unknown to the person in possession.”

This is an action for a declaration that the plaintiffs are entitled to a strip of property at the northerly boundary of their lands where that boundary abuts that of the lands owned by the defendants.

This question involves a consideration of the plaintiff’s possession of the disputed land.

Central to consideration of this is a mutual error as to the location of the boundary as defined by the deeds.

[Facts about the land]

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Conceded by the defense that from 1951 to 1966 the plaintiffs were in exclusive, open, and notorious possession. Also a reference to Seddon v Smith [1877] : “Enclosure is the strongest possible evidence of adverse possession.”

The plaintiff’s possession of the disputed strip was not contested until 1979. Judge not persuaded that in the initial stages of these altercations the defendants had any understanding of the true position relating to the boundary between their property and No. 137; Judge thinks that a full realization of the situation did not arise until they obtained a survey in 1979.

Immediately after the facts disclosed by this survey become known to the defendants, an aggressive programme with respect to the domination of the disputed lands was undertaken by the defendant Aubin which involved, among other things the removal of remaining fences standing on the “line of occupation.”

Reduced to its narrowest compass, the submission on behalf of the defendants is that the statute did not run during the mutual misapprehension that the “line of occupation” represented the boundary as provide by the deeds, and that it was only after 1966 when the plaintiffs appreciated the true state of fact, that their possession was such as to start the running of the statute. Inherent in this is the contention that a specific intention to exclude the true owner is essential.

Beyond any shadow of doubt the plaintiffs were, from 1951 to 1968, in open, peaceable and undisputed possession of the land in question, which was enclosed with the lands of which their landlord was the legal owner and which the purchases. They possessed, occupied and used their land as if it were their own. At any time, the predecessors in title of the defendants could have made an entry or brought an action; they did not do so.

It is contended that because the plaintiffs did not know that they had no title to the disputed land, of which they had possession, their possession was not “adverse”, their animus possidendi was lacking the essential elements of intention to exclude the true owner.

[…] [References to many cases]

There will be a declaration that the plaintiffs are entitled to the northerly 4.7 feet in perpendicular width throughout and from to rear of Lot no.6 according to Registered Plan No. 221, North of Anderdon.

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Lundrigans Ltd v Prosper [1981]

Lundrigans Ltd v Prosper, (1981) NFLCA [159]Facts: P and his family and friends built a cabin in the middle of the woods in 1956. The cabin was painted green with a black felt roof. The cabin stands in the center of a very small clearing, 100-200 feet from the Humber river. It is not visible from the river nor from the air. P and the others used the cabin for hunting a few times a year. They claim that other hunters and fishermen know of the cabin, but this was not proven. L discovered the cabin only after 3-4 weeks of surveying of the area in preparation for real estate development. They want the cabin removed, P claims adverse possession.Issue: Was P’s possession “open and notorious”?Holding: No.Reasoning: The burden is on P to show the required quality of possession. While, as the trial judge found, there was nothing “covert or secret” about the occupation, this does not mean it was automatically “open and notorious.” Open and notorious “implies at least the opportunity of the title holder to have knowledge” of the adverse possession. The cabin was well hidden and no evidence was presented that anyone except the families who used it knew of its existence. Thus P has failed to discharge the burden of proof about the open and notorious quality of his adverse possession.Ratio: (1) Burden of proving quality of possession lies on the adverse possessor; (2) To be open and notorious, possession must give the owner some means of knowing about the adverse possession (note this is a possibility of knowledge; not actual knowledge).

Appeal by the Lundrigans Limited against the refusal by District Court Judge Soper to issue a Certificate of Title via the Quieting of Titles Act. Learned judge held that by virtue of use in excess of twenty years, the respondents had acquired a good possessory title to a portion of the land in question.

Law re.: Sections 3&4 of the Limitations of Actions Realty Act; no person having a right to take an action to recover land may make such an action of possession of the land after 20 years has expired from the date when that possession was taken. The use of land during the period by the person in possession is termed “adverse” possession, and to constitute this adverse possession it is an absolute requirement that the possession be open, notorious, and uninterrupted .

The respondents had established adverse possession not only of the land on which the cabin actually stood, but of a considerably larger parcel of land. No real evidence of usage of this portion of land, not indeed were any metes and bounds given. Only evidence: footpath.

Trial judge found continuous and uninterrupted occupation of the land.

Refutation of the trial judge by appellate court: While the occupation may well have been exclusive and interrupted, Judge does not accept that it was open and notorious.

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Visibility obviously implies at least the opportunity in the title holder to have knowledge and this proposition is also supported y cases (ref. to Sherren v Pearson )

It is for the adverse claimant to prove the constituent elements of his claimed possessory title. This was not done here, because neither openness nor notoriety of possession was demonstrated. The land was wooded and undeveloped, and was what many refer to as “wilderness”. No actual knowledge in Bowater or Lundrigans of the existence of the cabin.

Evidence is clear that the cabin was well hidden; could not be seen from the air, not the nearby river or ground area. Almost totally obscured. Neither did the respondents bring forward any real evidence o knowledge in any other persons besides themselves and, presumably, their immediate families.

Insufficient evidence of open or visible notorious possession.

Uninterrupted, but not open and notorious.

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§3.3.3: Adverse Possession and the Inconsistent Use Test

The new approach of requiring that the squatter’s use be “inconsistent” with that of the title holder is illustrated by Masidon Investments.

Masidon Investments v Ham [1984]

*Re. Animus Possidendi, or the intention to exclude the respondents from possession.*Creation of Inconsistent Use Test

The appeal concerns a claim for possessory title to land. Issues: whether the use made of the land by the appellant, the trespasser, was inconsistent with the use of the respondents, the legal owners, and whether the appellant had the required animus possidendi, the intention to exclude the respondents from possession.

Facts: H has owned the western part of a large parcel of rural land since 1956. The eastern part was owned by MI, which was holding on to it for development purposes, but never visited it past 1968. Over the course of several decades, H built and operated an airport on the disputed eastern parcel. The airport consisted of two grass runways, the second of which required significant landscaping. A windsock was visible from the highway and the airport appears on government charts. The airport was used by 10-12 planes year-round. He also built a dam, a pasture and a road.Issue: Did H fulfill the requirements for adverse possession.Holding: No – it fails the (newly created) inconsistent use test.Reasoning: Restates the trinity of elements for AP [166]. States that the clock runs when the last of the elements comes in to place. Then lists a long line of cases emphasizing interference with the owner’s intended use of the property. Holds that these cases state a broad principle of “inconsistent use” as a requirement for dispossession of the owner. When nothing is done with the property, we must look to its intended purpose (note that this is a subjective test!). If the intended purpose is speculation, Ham’s actions did not interfere with MI’s plans. Finally, the judge ducks the policy issues of “impossibility of infringement” by saying it would imprudent to speculate on what could constitute infringement of land speculation. He does say that there are no policy reasons to care about the rights of adverse possessors who are trespassers.Ratio: Creation of inconsistent use test.

Appellant became tenant of an approx. 100-acre parcel of land owned by Louis Mayzel. Appellant operated an airport consisting of two grass runways on the disputed property. Visible from the highway, buildings were constructed, it had a parking lot. Airport was listed in publications and maps of various organizations including the FD of Transport.

There was construction of fencing, too.

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The respondents never entered or used the disputed property, and no-one representing them went on the property after 1968. The learned trial judge found that there was no dispute about the use the respondents intended to make of the property, which was to hold it for sale at what the respondents considered considered the right price, and that the appellant knew of this intention.

Respondents were unaware of the appellant’s use of the property until it was drawn tot heir attention by a prospective purchaser in 1978. Following this discover, the respondents commenced this action which resulted in the declaratory order of Carruthers J that they held the property free from any right, claim or interest of the appellant.

The appellant’s claims founded on the Limitations Act which provides, in effect, that the title of an owner to land is extinguished y the adverse possession of another person for a period of 10 years.

Clear that a claimant to a possessory title throughout the statutory period must have:

i) Had actual possession,ii) Had the intention of excluding the true owner from possession, andiii) Effectively excluded the true owner from possession.

*Claim will fail unless the claimant meets each of these three tests, and time will begin to run against the owner only from the last date when all of them are satisfied.

[Cases Referenced]

Was the use of the land made by the appellant inconsistent with that of the respondents?

The person claiming a possessory title must demonstrate that his possession effectively excluded the possession of the true owner. Adverse possession is established where the claimant’s use of the land is inconsistent with the owner’s “enjoyment of the soil for the purposes for which he intended to use it” Leigh v Jack

Fletcher v Storoshuk: Owner was a farmer and erected a fence. Not every use of land will amount to adverse possession excluding that of the owner; “the mere fact that the defendants did various things on the land is not enough to show adverse possession.”

Keefer v Arillotta: Use of a strip of land as parking not deprive the other party of his title” The animus possidendi which a person claiming a possessory title must have is an intention to exclude the owner from such uses.”

William Bros Direct Supply Ltd v Raferty: The builder’s intention to develop the land at the rear of the shops was interrupted by the war. From 1940 onwards, an occupant of the apartment used the land as a garden, raised dogs, erected a shed. The court of Appeal held that the use of the land was not inconsistent with the owner’s rights and did not amount to dispossession.

Holiday Camp Ltd v Shell-Mex: since the land was being held for development, the acts of the camp company did not oust the oil company from possession because the acts were not

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inconsistent with the purposes for which the land was held, which were eventual intentions. “In my judgment, the acts of the plaintiffs in cutting the grass or hay getting cattle and occasionally ploughing the defendant’s strip of land, in no way prejudiced the defendants’ enjoyment of it for the purposes for which they had originally acquired it, namely, for the development as a garage or filling station when the time as ripe.”

Carruthers J: “very little would be inconsistent with the use the plaintiffs were making of the lands in dispute during the 10-yearperiod”. He found that the use made of the lands by the appellant was not inconsistent with that of the respondents.

“The appellant has not demonstrated acts of use which are inconsistent with the use of the respondents.”

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Teis v Ancaster Town [1997]

* Inconsistent use test does not apply to cases of error or mistake

Teis v Ancaster Town, 1997 ONCA [174]Facts: T claims title via adverse possession to two strips of land located along the border of his property and a public park. Both parties believed that the strips were owned by T, and the strips were used by T for more than 10 years for farming and movement of equipment. During this period, the public walked recreationally on some of the strip, and parked their cars on it in the evenings when baseball games were played in the park.Issue: (1) Does the inconsistent use test apply to mutual mistake cases? (2) If not, did T have exclusive possession of the strips?Holding: (1) No (2) Yes.Reasoning: To give effect to the doctrine of adverse possession, mutual mistakes should not be treated under the inconsistent use test. Otherwise no claim of adverse possession caused by a mutual mistake could ever succeed. The policy reasons behind the test (not rewarding trespassers) do not apply to mutual mistake. T’s tolerance of limited public use of the land was consisted with the behaviour of a generous owner, and does not undermine his claim in adverse possession.Ratio: (1) Inconsistent use test does not apply to cases or error or mistake; (2) Granting permission to others to use you land is not inconsistent with your animus possidendi.

For more than 10 years, both the Teises and the Town mistakenly believed that the Teises owned these two strips of land.

Town appeals and asks that the Teises’ action be dismissed. The Teises cross-appeal and ask to delete that part of the judgment granting the public a right of way over the laneway.

Main issue: Whether a person claiming possessory title must show “inconsistent use” when both the claimant and the paper title holder mistakenly believe that the claimant owns the land in dispute.”

In judge’s opinion: The test of inconsistent use does not apply to a case of mutual mistake and the trial judge did not err in finding actual possession.

Recall that adversity = the claimant is in possession without the permission of the owner.

Recalling Masidon Investments: to establish possessory title, the Teis “must show that for an uninterrupted period of 10 years […] they intended to exclude the true owners from possession, and the true owners were in fact effectively excluded from possession.” And, “the plaintiffs had open, notorious, constant, continuous, peaceful and exclusive use to the land to the exclusion of the right of the registered owner to such possession and ownership.”

Actual possession: Must be open, notorious, peaceful, adverse, exclusive, actual and continuous.

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Inconsistent Use: Re. Leigh v Jack: “Acts must be done which are inconsistent with his enjoyment of the soil for the purposes for which he intended to use it.”

The town planted trees which it believed were approximately seven or eight feet east of the Teis driveway, so that the branches would not interfere with the Teises’ use of the laneway. The town also erected “no trespassing” signs east of the laneway. Finally, throughout the Teises’ possession of the disputed property, the Town had a policy of stopping residents from planting crops in park land. Before 1989 the Town never asked the Teises to stop using the ploughed strip or the laneway and, according to Mr. Teis, whose evidence was accepted by the trial judge, never told the Teises that they were encroaching on Town Land. All of this evidence reasonably supported the trial judge’s finding that both the Teises and the Town were mistaken about the ownership of the disputed strips.

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Gorman v Gorman [1998]

*This case is redonks. Professor hates it, says not to focus on it. Its just a silly logic game played by the litigator.

Gorman v Gorman, 1998 OAC [183]Facts: Gw and Gm separated and Gw stayed in the home. When they divorced they signed an agreement to sell the home and split the proceeds equally. Gm visited it to see his kids but for 20 years, did not live there. His one attempt to move back in was rebuffed by Gw. Gm repeatedly as Gw to buy his share of the home, but she said that she did not have the money. Gw asks for exclusive title to the home via adverse possession.

Issue: Is it necessary to prove animus possidendi to establish claim for AP?

Holding: Yes

Reasoning: Gw had actual possession of the home for 20 years. Case law is clear that intention is required to activate adverse possession. The only exceptions are partial ones for mutual mistake, and this is not a case of mutual mistake. Thus Gw must prove intent. The departing spouse may have a variety of reasons not to live in the family home yet still want to retain a property interest. The remaining spouse must be presumed to know this. Thus Gw has a very high evidentiary burden to overcome and the evidence suggests that she continued to recognize Gm’s interest in the house.

Ratio: If the adverse possessor has actual or constructive knowledge of the departing owner’s desire to retain a property interest, the adverse possessor must meet a high evidentiary burden to establish animus possidendi. Mere occupation is not enough.

Comment: Arguably, Gw’s response to Gm that she didn’t have the money was an admission of his continuing title, since she implicitly acknowledges his rights to the house (as with St Clair Estates, you don’t offer to buy what you already own).

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§4: EXCLUSION: The Right to Exclude, and the Right not to be Excluded

§4.1: The Right to Exclude

Introductory Note:

As you read the materials, consider the following excerpts:

“An essential element of individual property is the legal right to exclude others from enjoying it. If the property is private, the right of exclusion may be absolute; if the property is affected with a public interest, the right of exclusion is qualified.”

International News Services v Associated Press, 248 U.S. 215 at 246 (Justice Brandeis in dissent)

The first person who, having fenced off a plot of ground, took it into his head to say this is mine and found people simple enough to believe hi, was the true founder of society.” – Jean-Jacques Rousseau, Discourse on the Origin and Foundation of Inequality

Thomas Merrill, “Property and the Right to Exclude”

The Supreme court is fond of saying that “the right to exclude others” is “one of the most essential sticks in the bundle of rights that are commonly characterized as property”.

Essay will argue that the right to exclude others is more than “just one of the most essential constituents” of property – it is the sine qua non.

Article goes on about theoretical justifications (single-variable essentialism, multiple variable essentialism, nominalism). I’ll spare summarizing this.

Marsh v State of Alabama [1946]

Asks whether a State, consistently with the first and fourteenth amendments, can impose criminal punishment on a person who undertakes to distribute religious literature on the premises of a company-owned town contrary to the wishes of the town’s management. Involves a balancing of rights.

The take-aways from this case:

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If More Open More open to the public domain.

Also, attention paid to the type of property; i.e., does it serve a public function?

“When we balance the Constitutional rights of owners of property against those of the people to enjoy freedom of press and religion, as we must here, we remain mindful of the fact that the latter occupy a preferred position.”

Also note dissenting opinion.

Marsh v State of Alabama, 1946 USSC [203]Facts: M was distributing religious leaflets in a company town. The town was located within a thickly-settled municipality and it was impossible to tell that you were on private land except for small signs forbidding solicitation posted inside stores. The surrounding community often used the business district of the company town to do their shopping. The company had the police arrest her after she refused to stop distributing leaflets or leave the property.

Issue: What right to exclude is held by the owner of a private shopping area?

Holding: A qualified one.

Reasoning: Majority: It is clear that if the municipality charged M while she was distributing literature in a public space, this would infringe her right to freedom of religion and freedom of the press. It is equally clear that private homeowner could order her to leave his property. The corporation’s rights fall somewhere in between. But where? It seems odd that by giving all of a town’s land to a company, the municipality could violate fundamental freedoms. Many people live in company-owned towns, “To act as good citizens they must be informed.” Thus the balance between property and fundamental freedoms in this case should tip towards freedom of religion and the press.

Dissent: This case concerns the exercise of religion in private places without the assent of the owner. The citizens of the company town are fully capable of getting religious enlightenment outside its boundaries if they so choose. We should not exaggerate the restrictions placed on M’s freedoms, which are minimal. Further, this case proposes a vague and potentially dangerous rule that will require much nuancing in the future.

Ratio: (1) “The more an owner, for his own advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it”; (2) Policy reasons and the content of right being exercised by the private citizen are important concerns.Comment: Subsequent treatment of Marsh detailed at [249] (narrowing to only areas where a company has effectively replaced local government).

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Cadillac Fairview Corp Ltd. V. RWDSU [1989]

Here, none of the employee access points to the store were on public property; rather, all access points were within the private property of the Eaton Center.

Clear conflict of rights issue; private property rights of Cadillac Fairview on one hand, and the statutory organizing rights of the employees on the other.

“Notions of absolutism have no place in the determination of issues arising under a statute designed to further harmonious labour relations and to foster the freedom of employees to join a trade union of their choice. […] A balance must be struck between competing interests which endeavours to recognize the […]”

Cadillac Fairview v RWDSU, 1989 ONCA [211]Facts: R is trying to organize the workers at Eaton’s in CF’s mall, the Eaton Centre. R has been warned by Eaton’s against entering the store during business hours to solicit employees for the union drive, and were refused access to a list of employees names and phone numbers. R’s organizers took to waiting outside an employee access point inside the mall and distributing leaflets as workers arrived or left work. CF now seeks to bar R from the mall entirely.

Judicial History: The Labour Relations Board found that CF was guilty of an unfair labour practice. CF asks for judicial review.

Issue: Did CF’s exclusion of the union from its mall constitute an unfair labour practice?

Holding: Yes.

Reasoning: CF has a general “no solicitations” policy, although it allows charities and non-profit groups to collect donations at certain times to enhance its corporate image. It claims that it “has a general right to exclude anyone it wishes from the shopping mall for any reason it deems appropriate.” Yet the Labour Relations Act guarantees the right to join a trade union. This entails the right to make a free and informed choice, which in turn implies the right to receive information from the union. The “obvious forum” for such communication is the workplace. Because there are no other entrances to Eaton’s than the ones inside the mall, the union had to use these entrance and did not unduly disrupt shoppers. The Board clearly needed to balance the rights of R and CF, as the legislature must have foreseen when enacting the LRA. “In my opinion, notions of absolutism have no place in the determination of issues arising under a statute designed to further harmonious labour relations… In this area of law, as in so many others, a balance must be struck between competing interest which endeavours to recognize the purposes underlying the interests and seeks to reconcile them in a manner consistent with the aims of the legislation.” Two other cases in which malls were allowed to exclude picketers were distinguished on the basis that they occurred outside of labour relations legislation.

Ratio: The right to exclude is not absolute and must be balanced against the will of the legislature but only where laws exist.

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Comment: This decision does not mirror Marsh, above, because it was distinguished from other “public space” cases by the LRA. The implied ratio is that absent special legislation, CF was perfectly within its rights to exclude anyone from its mall.

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United Steel Workers of America v United States Steel Corporation

Local 1330 USWA v US Steel, 1980 F 2d Cir [796]Facts: USS is closing a plan that employs 3500 workers and is the economic lifeblood of a region, which will suffer a deep decline if they leave. The union has offered to buy the plant from USS, which refused because it is concerned that government subsidies would allow the plant to compete unfairly with their remaining plants. The workers assert a right to buy the plant.Issue: Do the workers at the plant have a property right in the plant sufficient to prevent its destruction?Holding: No.Reasoning: The plant was unprofitable, despite the workers’ best efforts to improve output. Thus closure was reasonable. Furthermore, USS has the right to close and even destroy its plants, since the plants are its property. The union asserts a property right in favour of the workers “from the long establish relation between the community of the 19th Congressional District, [the union] and the Defendant… This right, in the nature of an easement” would prevent USS from withdrawing and leave the community “in a state of waste.” There is no foundation in law for this position; any remedy lies with the legislature.Ratio: Rejection of relational theory of property.

Singer, “The Reliance Interest in Property” (1988)

*Via Shortt

Market economics and property rights discourse are not adequate foundations for property law. In the case of US Steel (above) they acted as blinders, by directing the judge’s attention immediately towards the question of who “owned” the plant. The law has, in fact, granted rights to non-owners over the property of others.

Access to beaches in California and New Jersey are given as examples at [810-812]. There is even a discussion of reliance interests in the Restatement (Third) of Property [813]! All it needed was sufficient judicial courage to recognize and extend it.

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§5: LIMITATIONS

§5.1: Easements

Introduction

An easement is one of the class rights in land known as “incorporeal hereditaments” or sometimes as servitudes. Essentially the right of one landowner to go onto the land of another and make some limited use of it.

Not a natural right, does not come with the fee simple, and must therefore be created as part of the relationship between the two landowners.

Many types, but perhaps the most comment kind of easement is the right of way created by express agreement of the parties.

Characteristics of Easements

The first issue we will look at is that of the kinds of rights the law will consider to constitute valid easements.

The common law will not simply consider any agreement between the two landlords to have created an easement; two qualify, must meet the four-fold test laid out in Ellenborough Park.

In Re. Ellenborough Park [1956]

Re Ellenborough Park, 1956 CA [333]Facts: In 1855, plots for the construction of homes were granted surrounding EP, and the conveyances guaranteed access to EP by all homeowners provided they each paid a share of the upkeep. A century later, the new owners of the park want to use it for building purposes, while the new homeowners want to stop them.

Issue: Did the 1855 conveyances create easements in the park?

Holding: Yes.

Reasoning: There are four requirements for an easement to exist: (1) A dominant and subservient tenement, (2) the easement must “accommodate” the dominant tenement by having a “sufficient nexus” between enjoyment of the right and use of the tenement, (3) the dominant and servient owners cannot be the same person, (4) rights conferred by

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easements must be rights that can otherwise be given in a property grant. Here points 2 and 4 are contested. The judges first extend the scope of the easement, if it exists, to the 9-10 houses not fronting directly on the park, but seem uneasy about having to do this. Point 2: The rights to the park clearly enhance the property values of the homes, but this alone is not enough, since an easement must be “connected to the normal enjoyment of the property.” They state that the park represents something like a “common backyard” since none of the houses had gardens. This provides a sufficient nexus, since the enjoyment of gardens is a “beneficial attribute of residence in a house as ordinarily understood.” Point 4: Properly interpreted, the rights in the conveyances are not so excessive that they deprive the park’s owners of their property rights, nor are they overly vague. They are like a right of passage over the land of another.

Ratio: Sets out main requirements for an easement (above).

Comment: Requirement 2 is as close as the Common Law gets to the idea of “destination” for property.

§5.1.2: Positive and Negative Easements

Positive Easement: A’s Right to do something on B’s Land.

Negative Easement: Easements which give A the right to Prevent B from doing something with his/her land.Examples:

- Right to light- Right to air by a defined channel- Right to lateral support for buildings

Phipps v Pears [1965]

Phillips v Pears, 1965 Eng CA [345]Facts: House 14 and House 16 are side-by-side and the walls of 14 are built touching the walls of 16. As a result, 16’s walls are not weatherproof.14 was demolished as unfit for human habitation. This left 16’s walls exposed to the elements and this caused damage. Ph alleges that by demolishing 16 and not rebuilding it, Pe has violated an easement of protection from the weather.

Issue: Is there a negative easement for right to protection from weather?

Holding: No.

Reasoning: No existing or analogous easement provides protection like this. In fact, the Common Law has explicitly rejected general “rights to air” except along a defined channel.

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This suggests a reluctance to grant open-ended atmospheric easements. The general principle is that negative easements which undermine the fundamental enjoyment of land and its full development are to be avoided.

Ratio: Negative easements must meet a very high threshold to be created, and even then, will likely be limited in scope.

§5.1.3: Creation by Express or Implied Grant

Express Grants and Reservations

Common law maintains that all easements “lie in grant” must be created by one person with an interest in land granting the right to another.

The grant of easement may be separate from the grant of an estate or joined with it.

Express Grant of an Easement: If the seller parts with the landlocked part and gives the buyer an easement, he or she grants both an estate and an easement.

Express Reservation: The seller has kept something back ; if the seller wants to keep the landlocked part and to sell off the part that fronts the road, and in doing so makes an agreement that he or she can have access to the road over the buyer’s land, he or she has reserved the easement in the grant.]

*If the words in the grant are less than clear, the deed will be construed in favour of the grantee.

Implied Grants and Reservations

The law permits the creation of implied easements and prescriptive easements.

Prescriptive easements = established by long use

Exceptions to the General Rules

(1) “Ways of necessity”

It is a fiction that all easements are created in a grant, the traditional position of the common law was that even an access right to otherwise landlocked land were the product of the intention of the parties, not a result of some public policy, even though in the vast majority of cases courts have professed to find such an intention.

(2) Mutual Easements

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An obvious example: two houses touching each other.

(3) Where Necessary to Imply to Allow a Grantor to Fulfill his/her Obligations

Provided by situations in which it is necessary to imply the reservation of an easement in order to permit a grantor to fulfil his or her obligations to a grantee in a simultaneous sale of two pieces of land.

(4) Intent of Parties

“The law will readily imply the grant or reservation of such easements as may be necessary to give effect to the common intention of the parties to a grant of real property, with reference to the manner or purposes in and for which the land granted or some land retained by the grantor is to be used.”

Wong v Beaumont Property Trust Ltd. [1965]

“It seems to be that unless a duct from the cellar to the roof were installed in 1957, it would have been impossible lawfully to carry on the business of a popular restaurant on these premises”

Wong v Beaumont Property Trust, 1965 Eng CA [353]Facts: W owns a restaurant in the basement of B’s building. Health inspectors require that W expand the ventilation duct for the kitchen. B refuses to allow W to expand the duct. W bought out a previous restaurant’s lease on the building, which stipulated that the lease was for the running of a restaurant business.

Issue: Does W have an implied positive easement to put up an expanded duct?

Holding: Yes.

Reasoning: Denning: This question turns on the law of easements, since W is the successor to a previous restaurant, and B bought the property from its previous owner. Applying Pwllbach, it is clear that the intent of the original parties was to allow the running of a restaurant. This implies a definite purpose, which in turn justifies the creation of an easement for ventilation. Thus B must tolerate the enlarged duct.

Salmon (Concurring): The restaurant would be illegal without the enlarged duct. Both parties to the original lease can be presumed to know that compliance with health inspectors was required to run a restaurant, thus the easement is justified.

Ratio: (1) “A man who has a right to an easement may use it in any proper way, so long as he does not substantially increase the burden on the servient tenement”; (2) Implicit

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easements giving effect to the intent of the parties to a land grant requires that the original parties intended a very specific purpose.

Nelson v Stelter [2011] p. 352 Vol. 2

Who owns the road?

Allowance of cross-appeal, an implied easement of necessity.

The appeal is about who owns and who can use the road in the County of Leduc. The Road crosses the appellant’s land and leads to two recreational facilities: The Rabbit Hill Snow Resort, a local ski resort, and Shalom Park, a water ski facility owned and operated by the respondent Nelson.

The Road has been used by the patrons, employees, and owners of both facilities for many years. There is not now, nor has there ever been, any other road or land access to either facility. The appellant now asserts that the Road is private and that the respondent and his patrons, staff, and family are prohibited from using it.

Use of the road for 20+. Nelson was aware of the use upon purchase.

Issue before the court: Whether the trial judge’s conclusion that an easement of necessity would arise in this case if she had available to her certain land title documents is sustainable on the record. “In my view, it is.”

Distinction made between easements off necessity and easements which are merely necessary for the reasonable enjoyment of the property granted.

“Without an implied right of way over the adjoining property to the south, therefore, the Nelson Lands are absolutely inaccessible and unusable.”

Easement of necessity implied. Necessity trigger.

Barton v Raine (1980)

Concerns an implied easement of access.

The issue in this appeal is whether the plaintiff George Barton can be regarded as having established a right of way over the defendant’s portion of the driveway by implied reservation from the conveyance of what is now the defendants’ property.

“In this case the defendants, before they concluded the purchase of their property, had clear cause to suspect an adverse possessory interest, and could readily have called for a declaration of possession by the vendor. Yet there is no evidence that they did so; on the contrary, the evidence is that they accepted the situation as they came to it and continued to

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do so until the time of the incident, involving the parking of the defendant’s car in the driveway, which seems to have triggered the dispute now before the court.”

Barton v Raine, 1980 ONCA [363]Facts: House 1 was acquired by B’s father in 1921, who bought the neighbouring House 2 in 1924. These two houses shared a driveway on House 1’s property. In 1952 B’s father sold House 2 to his son and daughter-in-law. They inherited House 1 after the father’s death in 1968. In 1971 they sold House 1 to R. After an argument, R erected a fence across his property, blocking the driveway’s access to House 2’s garage. None of the property transfers mentioned an easement over the driveway.

Issue: Does B have an implicit easement to use the driveway?

Holding: Yes.

Reasoning: Based on case law, the “common intent of the parties” exception for implied easements should be interpreted fairly generously, and not as restrictively as earlier cases, like Sandom v Webb applied it. The passage of time between the original property transfer and disputes about implied easements, means that the “affirmative evidence” of Webb will generally not exist. Here it is clear that in 1952, there was not question between the parties that both sides would have access to their respective garages. Thus there was an implied easement of access.

Ratio: (1) Exception #4 to Pwllbach (common intent of parties) should be interpreted generously; (2) Lowers evidentiary barrier.

§5.1.4: Creation by Presumed Grant

AKA Easements by Prescription!

Introduced to simplify the rules on “lost modern grants”. Now governs the vast majority of claims.

Not like adverse possession, despite the fact that the limitations act and the notion of long use are common to both.

Prescription applies only to non-possessory rights and requires lesser acts than possessory title does, and it is not formally cast as a defense.

Following points of significance:

Section 31 establishes two different periods for the \creation of prescriptive easements: 20 years and 40 years.

After 20 years of adverse use, an easement cannot be defeated by showing that the user began after 1189 (time immemorial as irrelevant).

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After 40 years of adverse use, the easement becomes “absolute and indefeasible”. Not as definite as it appears: The basic rule that prescription must operate for and against a fee simple estate still applies.

- A tenant cannot prescribe against his landlord

Also a claim based on 40 years’ adverse use may be defeated, as could a 20 year claim, by showing that the user was forcible or secret, or enjoyed by written permission.

A 40 year claim cannot be defeated, as a 20 year claim can, by proving it was enjoyed with oral permission.

Section 31 only comes into play when there is litigation and the relevant period of use must immediately precede the bringing of an action.

So, 40 years does not itself create an “absolute” prescriptive easement. An action must be brought and the necessary period of enjoyment must be immediately prior to the commencement of that action.

Period must be without interruption.

From Shortt:Prescription allows people to gain easements through long use. Again, this contrasts from the CCQ, which forbids acquisitive prescription of servitudes. Note that the kinds of acts required to gain easements are less than the kinds of acts required for possessory title. There are two kinds of prescriptive grants: those via statute and those via the “doctrine of lost modern grant.”

Time: Prescription periods are measured backwards from the start of the litigation involving them (via statute) or any 20-year period (doctrine of lost modern grant – Storm [381]).

Creation: Prescriptive easements do not get created automatically. An action must be brought. It can be brought after either a 20 year period (statute or lost modern grant) or a 40 year period (statute). The only difference will be whether oral permission is a defence (not under 40-year statutory prescription).

Requirements: The 4 Ellenborough Park conditions must be met here too.

Continuity: Interruptions are judged according to the nature of the right being claimed. See Axler, below. Prescription transfers between landholders.

Defences: Oral permission (works only against 20-year prescription), written permission (good vs both), not “user as of right” (good vs both – see below), interruption for more than one year, no prescription with respect to cables or wires (s 32), no air or light easements (s 32).

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User as of right: This is like the “quality of possession.” To get a presumed grant, the use must be: without secrecy, without violence and without permission. [373, Storm at 383] Note that toleration/acquiescence and permission are different things!

Other requirements: Prescription can only operate for and against a fee simple – it does not work against life estates, by a tenant against another tenant or against the landlord, etc.

Prescription at common law: This is the “use since before 1189” case, which cannot apply in Canada and is irrelevant.

Limitations Act [371]: s 31 Merely enables the possibility of prescription in Ontario. Removes the “not time immemorial” defence. Other CL defences can defeat the grant. 20 year period to establish. s 32 after 40 years, oral permission is no longer a defence.

User as a Right

Merely establishing that the right has been exercised for the correct period of time is not enough to make out a claim for a prescriptive easement. Common law rules on the nature and quality of use also have to be adhered to.

Principle rules are twofold:

(1) Use must be continuous, where continuity is judged by the nature of the right being asserted.

(2) The claimant of the easement has to have exercised “user as a right”. This means that the claimant has to have exercised the alleged right in such a way that can be seen as having said “Of Course I have a right to do this!”

The “User as a Right” condition has three sub rules:i) No Secrecyii) No Violenceiii) No Permission

Garfinkel v Kleinberg [1955]

Use of common wall. Prescriptive rights.

Garfinkle v Kleinberg, 1955 ONCA [375]Facts: The parties’ houses are built upon a common wall, and G’s fireplace uses K’s chimney, which is entirely on K’s side of the wall. The chimney has been shared since 1912, as found by the trial judge.

Issue: Does G have a prescriptive right to use K’s chimney?

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Holding: Yes.

Reasoning: K pleads the defense of secrecy, which requires lack of actual or constructive knowledge. Clearly K did not have actual knowledge of the shared chimney. But he had constructive knowledge – “the means of knowledge” thus secrecy is no defense.

Ratio: (1) “Yet actual ignorance…will not in every case prevent the enjoyment from being as of right. There are some things which every man ought to be presumed to know. Very slight circumstances may put the servient owner upon inquiry, and if he neglects to make inquiry it may be that knowledge must be imputed to him;” (2) “Where an ordinary owner of land, diligent in the protection of his interests, would have a reasonable opportunity of becoming aware of the enjoyment by another person of a right over his land, he cannot allege that it was secret [absent fraud or deliberate secrecy]”

Kaminskas v Storm [2009]

Encroachment of driveway. Permission voids prescription.

Kaminskas v Storm, 2009 ONCA [379]Facts: K and S are neighbours. K’s driveway encroaches 3 feet on to S’s property. K parks his car in the driveway, as all preceding occupants of his home have done for the past 56 years. S objects. K became the owner of his house in 1991, and received a written letter guaranteeing his use of the driveway from S’s predecessors in title.

Issue: (1) Was a 40-year prescriptive easement already in effect at the time of the 1991 letter? (2) Was K a “user as of right”?

Holding: (1) No – thus letter defeats K’s claim (2) No – there was permission.

Reasoning: (1) The 40-year period is a statutory creation and must immediately precede the action. Thus the written permission in 1991 broke any statutory prescription that would date from 2009. Thus K has recourse only to the doctrine of the lost modern grant. (2) However, the letter of 1991 shows that the K’s predecessor’s use of the driveway was not “as of right” – instead it was with the explicit permission of S’s predecessors in title. This comes out in the letter and testimony. Thus no “lost grant” prescription either.

Ratio: Confirms existence of doctrine of lost modern grant in parallel with the statutory prescription regime.

Comment: Gold: The future existence of this doctrine is called in to question by this judgement/judges in general.

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The Scope of Easements

An easement granted for one purpose cannot be used for another.

The grantee of a right of way is not entitled to increase the legitimate burden. On the other hand, the legal extent of his right may entitle him to increase the amount of inconvenience placed upon the servient tenement.

And the legal extent of the right must, it seems, be ascertained from the intention of the parties at the time when the right was created.

The appellant’s use of the right of way was an “unauthorized enlargement and alteration in the character, nature and extent of the easement.

The Termination of Easements

Number of ways to extinguish an easement.

(1) Statutory provisions. Only BC does this in Canada.(2) Operation of Law

a. If the purpose for which it is granted comes to an end,b. If it was granted with a time limit and the time expires,c. If the owner of the dominant/servient tenement becomes the same person

(3) By Release, Express or Implied.

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§5.2: Restrictive Covenants

Restrictive Covenants

Restrictive covenants are like easements, a form of incorporeal hereditament.

Recall that covenants are agreements under seal, one contained in a deed.

As with an easement created by express grant, we can use contract law to say that the terms of the covenant are enforceable between the original parties.

But, again similarly to an easement, the issue is when the terms of the covenant becomes attached to the land, as part of title to it, and are therefore enforceable by and against successors in title to the original contracting parties.

Think of a covenant as:

a) Requiring an owner to do something or not do something with his or her own land,b) As an agreement containing terms and conditions that would not amount to an

easement by the characteristics outline din Ellenborough Park or because of the restrictions on negative easements noted in Phipps v Pears.

Covenants principally effect servient land, while easements only do so inferentially.

Covenants are also much wider in scope than easements – although there are limits on which type of covenants can go with tiel.

A paradigm restrictive covenant would be a limit on the kind of development that one land owner could undertake.

The covenantor, the person who agrees to do something or not do something, has what is called the burden of the benefit.

The covenantee, the person for whose benefit the covenant is made, has what is called the benefit of the covenant.

Enforcing burden and being able to enforce the benefit against or for a successor in title to the original party is known as running the burden or the benefit of the covenant.

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§5.2: Restrictive Covenants and the Common Law

Covenants and the Common Law

The general rule at common law is that the burden of a covenant will not run in any circumstance. The covenantee would still have an action in contract against the original covenantor, but this would be useless once that person had conveyed the land to another.

The common la will, however, allow the benefit to run in certain circumstances. In other words successors in title to the covenantee (person for whom the benefit runs) can enforce a covenant against the original covenantor, but not against the latter’s successors.

There are three conditions which must be met before the CML will even allow the benefit to run; they are:

1) The original covenantee must have had the legal estate in the land which is to be benefitted,

2) The successor in title to the original covenantee must obtain the same legal estate as the original covenantee, and the benefit must have bene intended to run with the land, not to have been a mere personal covenant

3) The covenant “must touch and concern the dominant land” (the land to be benefitted.) This is what the Austerberry case is principally about.

Austerberry v Oldham [1885]

Austerberry v Oldham, 1885 UK Ch D CA [391]Facts: Several land owners agreed to build a road through their lands. A company was formed to build the road and it covenanted with the landowners to keep the road in good repair. Aust bought land from E, one of the original landowners. The town of O bought the road from the company, with notice of the repair covenant. It billed the landowners, including Aust, for repair work. Aust seeks a declaration that O is bound by the repair covenant.

Issue: Can Aust run the benefit?

Holding: No.

Reasoning: Cotton: The benefit runs only if it concerns the land. Yet the road was not built on E’s land, but rather on the land that was purchased from him. The form of the covenant also shows that it targets the road itself, not the land of the landowners. Thus the benefit is direct to the road, and only indirectly to the land of Aust and the others. Thus the benefit cannot run.Lindley: The covenant is a promise to repair the road as a whole. No part of it targets the stretch accessible to Aust. Thus it is a covenant about the road as a public highway, not as a route of particular interest to Aust’s land. If the covenant had been worded so as to grant special rights to the landowners, that would be different matter, but it is not so worded.

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Fry: Concurs with reservations about what the other judges say. Is very clear that the burden cannot run.

Ratio: Running the benefit in Common Law is possible only if covenant’s benefit directly concerns the dominant land – indirect benefits are not enough.

§5.2.1: Restrictive Covenants and Running the Burden in Equity

Running the Burden in Equity (From Shortt, Also notes)

In order to run the burden, four conditions must be fulfilled:(1) The covenant must touch and concern the dominant land. Galbraith v Madawaska Club [404] This dominant land must be clearly defined so as to be “easily ascertainable” [408].(2) The covenantee must have land capable of being benefitted by the covenant. Galbraith v Madawaska Club [404] // There must be dominant and servient tenements. Formby v Baker, LCC v Allen [397-398](3) The covenant must be negative (prevents owner of servient tenement from doing something, rather than requiring him to do something). Hayward v Brunswick Permanent Building Society, (1881) CA UK [397](4) The successors in title must have notice of the covenant (Gold/implicit in cases).

Tulk v Moxhay

Case About: Running the Burden in Equity

Tulk v Moxhay, 1848 Ch UK [395]Facts: T held in fee simple an enclosed garden and several houses. He conveyed in fee simple the enclosed garden to Elms, with a covenant attached stating that Elms would maintain the garden and not build over it. E sold the garden to M, and M knew of the covenant. M intended to demolish the garden and erect a building.

Issue: Can T run the burden in equity?

Holding: Yes.

Reasoning: For many reasons, owners of land will want to sell neighbouring parcels to their own with conditions attached via covenants. If these covenants can be violated simply by “flipping” the property to another buyer, then they are worthless. This would block valuable

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and fair land sales. It also penalizes the seller, and unjustly enriches buyers, since the land may be sold at a lower price in recognition of the covenant.

Ratio: Covenants purchased with notice can run the burden.

Comment: See cases below for narrowing and refining of the ratio.

§5.2.3: Negativity and the Requirement of a Dominant Tenant

The need for a dominant tenement was firmly established in the early 20 th century in two cases: Formby v Baker [1903] and London City Council v Allin [below]

London City Council v Allen and Others

About Burden running equity only if there are dominant and servient lands.

London City Council v Allen, 1914 CA UK [Page]Facts: A was granted permission to build a road by LCC on the condition that he would not erect buildings on 2 nearby plots of land, and that he would attach this condition as a covenant to everyone who held the land after him. He sold one plot to a relative, who built a house on it.

Issue: Can the burden be run without the existence of a servient land?

Holding: No.

Reasoning: Based on the reasoning in Talk v Moxhay (protecting the value of the dominant land) and on the need for a dominant land in order for the covenantee to enjoy the benefit of the covenant, it is clear that the agreement between LCC and A cannot be a restrictive covenant.

Ratio: The burden can be run in equity only if there are dominant and servient lands.

Comment: Affirmed in Canada by the SCC in Page v Campbell.

Galbraith v Madawaska Club Ltd [1961]

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Cases discusses the requirement that the covenant touch and concern the land of the covenantee.

Galbraith v Madawaska Club, 1961 SCC [403, 407-408]Facts: G bought a house from M with notice of a restrictive covenant. The covenant specified that the land could not be sold or leased to anyone who was not a member of the club, and required that the bylaws of the club would be obeyed. One of the bylaws stated that the homes could be occupied by non-club members only if the Board of Directors gave their permission.

Issue: (1) Does the covenant concern the dominant land? (2) Is the covenant annexed to land?

Holding: (1) No (2) No.

Reasoning: (1) Quotes Rogers v Hosegood: “The covenant must either affect the land as regards mode of occupation or it must be such as to per se, and not merely from collateral circumstances, affect the value of the land.” In this case the covenant gives the club control over the purchasers of the land. This has nothing to do with the use to which the land is put, and since the purchasers are restricted to members of the club, the benefit is to the club itself as a club, and not to the land it occupies (if someone other than the club occupied the dominant land, they would get no benefit from the club-members only clause!). The sale clause is invalid since it does not concern the land; given this, the occupation clause of the by-laws must be invalid as well. (2) [407-408] Nor is it clear that the covenant was ever affixed to the club’s land in the first place, since the agreement does not precisely define a dominant land; instead it refers only to the club as a corporation.

Ratio: (1) To run the burden in equity, the covenant must affect the use made of the land, or, in a very direct sense, the value of the land to all ordinary purchasers, and not just the current owner; (2) Dominant lands may not be implied in to grants.

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5.2.4: Running the Benefit in Equity (Restrictive Covenants)

The principal rule that must be met before the benefit of a covenant will run with the land of the covenantee in equity is that it must be intended to do so.

Three ways to establish sufficient intention:(i) Benefit can be annexed to the dominant land by express language in the

covenant,(ii) The benefit can be assigned(iii) Both the benefit and burden will run for restrictive covenants contained in what

is known as a “building scheme” or a “scheme of development:

Sekretov Case is an attempted annexation case.

Galbraith v Madawaska deals with this; after discussing the “touch and concern” issue, he stated [..]

Re Sekretov and City of Toronto [1973]

The case concerns a perplexing problem of restrictive covenants said to run with certain land conveyed by a municipality to a resident and imposed partly by means of provisos set out in a transfer of the land made pursuant to the Land titles Act, and partly by means of a resolution of the Municipal Council either already passed to to be passed at a future period, and which was, in fact, passed almost a month after the date of the conveyance as hereinafter set out.

Sets out three rules:

i) Covenant must have a dominant tenement for the burden to run in equity,ii) Content must be clear + definiteiii) If content is defined by an external document, it must exist at creation of

covenant.

Re Sekretov and City of Toronto, 1973 ONCA [409]Facts: O bought land bordering a park from a municipality for $600. The municipality was later absorbed by Toronto. O’s deed of purchase stated that use of the lands was subject to conditions provided by resolution of municipal council. A resolution passed the same day stated that no buildings could be erected. O later sold the land to S for $7000, who applied for a permit to build 2 homes on it. S had no notice of the restriction at the time he applied to the City of Toronto for a building permit, and due to lost records after the merger, the resolution was not found until S is 85% complete with construction. He asks that the restrictions be removed or declared invalid.

Issue: (1) Did the benefit run from the municipality to the City of Toronto? (2) Was it void for vagueness?

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Holding: (1) No (2) The covenant is also void for vagueness of content.

Reasoning: For policy and fairness reasons [413] there must be a dominant land specified in the covenant. None was specified. The content of the covenant was also unclear at time of writing, since it referred to a document that had not been created yet. It is thus invalid on both grounds.

Ratio: (1) Covenants must have a dominant tenement for the burden to run in equity; (2) The content of the covenant must be clear and definite; (3) If the content of the covenant is defined by reference to an external document, that document must exist at the time the covenant is made.

5.2.5: Restrictive Covenants and Public Policy

North Vancouver (District) v Fawcett [1998]

North Vancouver v Fawcett, 1998 BCCA [415]Facts: NV imposed a restrictive covenant on a developer who wanted to build a residence near the North Shore Winter Club. The covenant required the developer to only rent to seniors only, since they would eat at the Club but be light users of its athletic facilities. The covenant described seniors as persons 50 years old or older.Issue: Is the age restriction against public policy via the Human Rights Act?Holding: No.Reasoning: The HRA defines age discrimination as relating to an age between 19 and 64. To comply with both the HRA and the covenant, the residence owner need merely rent to people 65 and older. This satisfies both. Thus the covenant is not against PP.

5.2.6: Termination of Restrictive Covenants

From Shortt:

There are five ways for a covenant to end:

(1) If there was a built-in time limit.

(2) The dominant and servient lands are owned by the same person (does not apply to building schemes).

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(3) Doctrine of Laches: Essentially this is extinctive prescription. If the servient land is used inconsistently with the restrictive covenant for a reasonable period of time (determined on the facts of each case) then the covenant is “presumed to be released.”

(4) Occasionally, changes to the neighbourhood will be held to invalidate the covenant.

(5) Via application to the courts (by legislation only; applies in Alberta, BC, Ontario and PEI).

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§5.3: Expropriation and Regulatory Takings

Introduction

First two “takings” cases are from the USA. The US Constitution has a specific protection for property; the fifth amendment, in part, reads “…nor shall any person…be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

The state may therefore take property from the citizen provided that it is for a public purpose and fair compensation is paid.

Pennsylvania Coal and Keystone cases are about whether the gov’t has taken property at all. If not, no compensation needs to be paid.

Difficulty that arises: Any regulation by govt of any aspect of social or economic life will affect in some way the property rights of some person or persons.

Anti pollution laws, for example, remove a “strand from the owner’s bundle of rights”, but is not considered a taking.

Keystone Bituminous Coal Ass. V DeBenedictis (Pennsylvania Dept. of Environmental Resources) [1998]

Court here reviewed a statute that admittedly destroyed “previously existing rights of property and contract.”

Coal mine subsidence is the lowering of strata overlying a coal mine, including the land surface, caused by the extraction of underground coal. This can have devastating externalities; sinkholes, structural damage to walls and buildings, troughs in land which make it impossible to develop, the loss of groundwater and surface ponds, and future agricultural impossibility.

Mining companies have long been required by various laws to leave coal in certain areas for public safety reasons.

Section 6 of Subsidence Act authorizes the DER to revoke a mining permit if the removal of coal causes damage to a structure or area protected by s.4 and the operator has not within six months either repaired the damage or satisfied any relevant claim.

Question whether the restriction on the use of the petitioner’s property was an exercise of the Commonwealth’s police power justified by Pennsylvania’s interest in the health, safety, and general welfare of the public.

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Did the Subsidence Act effectuate a TAKING?

District Court concluded that under PA law the support estate consists of a bundle of rights, including some that were not affected by the Act. That the right to cause damage to the surface may constitute the most valuable “strand” in the bundle of rights possessed by the owner of a support estate was not considered controlling.

Court of Appeals affirmed; “PA Coal does not control because the Subsidence Act is a legitimate means of ‘protecting the environment of the Commonwealth, its economic future, and its well-being’”.

Support estate viewed as only one ‘strand’ in the plaintiff’s “bundle” of property rights, which also includes the mineral estate.

The destruction of one “strand” is not a taking because the aggregate must be viewed in its entirety

Public purpose justifications cited. Comparisons made to zoning ordinances as ell, which limit property owner’s right to make profitable use of some segments of the property.

Lucas v South Carolina [1992]

Establishment of a “total takings” test.

In 1986, Lucas paid $975,000 for two residential lots on the Isle of Palms, where he intended to build single-family homes. In 1988, SC enacted the “Beachfront Management Act”, which barred Lucas from erecting any permanent habitable structures on his two parcels of land.

State trial court found that this prohibition rendered Lucas’ parcels “valueless”.

This case: Whether the Act’s dramatic effect on the economic value of Lucas’s lots accomplished a taking of private property under the Fifth and Fourteenth Amendments requiring the payment of “just compensation”

The trial court found that the BMA “deprived Lucas of any reasonable economic use of the lots” and rendered them valueless. The court concluded that his property had been “taken” by operation of the act, and ordered the respondent to pay “just compensation” in the amount of $1,232,387.50.

The SC of South Carolina reversed this decision; the court ruled that when a regulation respecting the use of property is designed “to prevent serious public harm”, no compensation is owing under the Takings Clause.

Two justices dissented; would not characterize the BMA’s primary purpose as the prevention of a nuisance.

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Judgment was reversed for Lucas

The “total taking” inquiry we require today will ordinarily entail analysis of, among other things, the degree of harm to public lands and resources, or adjacent private property, posed by the claimant’s proposed activities, the social value or the claimant’s activities and their suitability to the locality in question, and the relative ease with which the alleged harm can be avoided through measures taken by the claimant and the government alike.

Via Wikipedia :

Rule of law

A regulation that deprives an owner of all economically beneficial uses of land constitutes a taking unless the proscribed use interests were not part of the title to begin with. In other words, a law or decree with the effect of depriving all economically beneficial use must do no more than duplicate the result that could have been achieved in the courts under the law of nuisance. As a result, "total takings" analysis requires a consideration of (1) the degree of harm to public lands or adjacent property posed by the regulated activities, (2) the social value of such activities, and (3) the relative ease with which the alleged harms can be avoided through measures taken by either the claimant or the government.

The Majority found that the South Carolina Supreme Court erred in holding that Beachfront Management Act was a valid exercise of the police power and did not constitute a taking.

The majority argued as follows:

(1) Deprivation of all economically beneficial use is, from the perspective of a property owner, deprivation of the property itself. (2) When all economically beneficial use is restricted, it is difficult to assume that the legislature is simply "adjusting" economical benefits and burdens. (3) Regulations that restrict all economically beneficial use may often be a guise of pressing that land into public service. (4) Lucas's lands have been deprived of all economically beneficial use. (5) There is no way to distinguish regulation that "prevents a harmful use" and confers benefits on nearby property. (6) Contrary to Respondent South Carolina's assertion, title is not held subject to the limitation that the state may regulate away all the property's economically beneficial use.

Kelo v New City London [2005]

To determine whether a city’s decision to take property for the purpose of economic development satisfies the “public use” requirement of the Fifth Amendment.

[From concluding paragraph]

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In affirming the City’s authority to take petitioners’ properties, we do not minimize the hardship that condemnations may entail, notwithstanding the payment of just compensation. We emphasize that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power. […] The necessity and wisdom of using eminent domain to promote economic development are certainly matters of legitimate public debate. This Court’s authority, however, extends only to determining whether the city’s proposed condemnations are for a “public use” within the meaning of the Fifth Amendment to the Federal Constitution. […Case law gives an affirmative answer.] We may not grant petitioners the relief they seek.

From Wikipedia

Kelo v. City of New London, 545 U.S. 469 (2005)[1] was a case decided by the Supreme Court of the United States involving the use of eminent domain to transfer land from one private owner to another private owner to further economic development. In a 5–4 decision, the Court held that the general benefits a community enjoyed from economic growth qualified private redevelopment plans as a permissible "public use" under the Takings Clause of the Fifth Amendment.

The case arose in the context of condemnation by the city of New London, Connecticut, of privately owned real property, so that it could be used as part of a “comprehensive redevelopment plan.” However, the private developer was unable to obtain financing and abandoned the redevelopment project, leaving the land as an undeveloped empty lot.[2]

Kelo v. City of New London did not establish entirely new law concerning eminent domain. Although the decision was controversial, it was not the first time “public use” had been interpreted by the Supreme Court as “public purpose”.

DISSENTS:

Thomas:Something has gone seriously awry with this Court's interpretation of the Constitution. Though citizens are safe from the government in their homes, the homes themselves are not.

Thomas also made use of the argument presented in the NAACP/AARP/SCLC/SJLS amicus brief on behalf of three low-income residents' groups fighting redevelopment in New Jersey, noting:

“Allowing the government to take property solely for public purposes is bad enough, but extending the concept of public purpose to encompass any economically beneficial goal guarantees that these losses will fall disproportionately on poor communities. Those communities are not only systematically less likely to put their lands to the highest and best social use, but are also the least politically powerful. [8]

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§6: DIVIDING ESTATES

§6.1: EXPROPRIATION AND REGULATORY TAKINGS; BRITISH AND CANADIAN CONSITUTIONS

Introduction

Neither Britain nor Canada have constitutional entrenchments of property like the USA. The Canadian Bill of rights does contain a protection for property couched in wording every similar to that of the US fifth amendment, but that is not a constitutional document.

Many sections of the Charter do impinge on property law to a greater or lesser degree. The inunction against unreasonable search and seizure, for example, limits the state’s ability to enter pirate property.

Also s.7 has been said to incorporate “Economic rights”; some of these are review in Haddock.

Manitoba Fisheries Ltd. V. Canada [1979]

*With Shortt Manitoba Fisheries v Canada, 1979 SCR [648]

Facts: Manitoba passed a law creating a public monopoly in fish exports. MF was a fishing company which received compensation for its physical assets, but this amounted to far less than the value of the business as a whole. MF asks for compensation, claiming that its business was expropriated by the legislation.Issue: Was creating a government monopoly a form of expropriation?Holding: Yes.Reasoning: Putting MF out of business was not in itself expropriation, since there is no “property right” in running a fish exporting business. However, the legislation forced all of MF’s customers to purchase from the crown corporation, effectively transferring MF’s goodwill to the Crown. This is the expropriation, and since the statute did not clearly state that no compensation would be paid, the government must compensate MF. Goodwill defined at [650-651] but essentially means “loyal customers.” The government is ordered to compensate MF for the value of its business as a whole, minus the physical assets’ value (i.e. the final compensation worked out to the full value of the business).

Appeal; appellant seeks entitlement for compensation for the loss suffered by reason of the provisions of the Freshwater Fish Marketing Act 1970.

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Act prohibited all firms in the industry from carrying on their business of fish exporting, fish that are fished for commercial purposes in a participating province, unless a license was issued by the Corporation or unless a firm was exempted from the prohibition by the Governor in Council.

Main components of the case: (1) Recognition of “good will” as an asset, and (2) a two-party rest regarding regulatory takings; (i) Property must be lost, (ii) Property must be acquired by the gov’t.

From Wikipedia

The court developed a two-part test to determine whether there has been a regulatory taking: first, what the claimant has lost must be "property" in the context of the legislative scheme, and second, the property must have been acquired by the government.

It was held that the legislation rendered the appellant's physical assets "virtually useless" and that the goodwill built up by the business was as much a part of its business assets as its physical property:

[T]he Freshwater Fish Marketing Act and the Corporation created thereunder had the effect of depriving the appellant of its goodwill as a going concern and consequently rendering its physical assets virtually useless and that the goodwill so taken away constitutes property of the appellant for the loss of which no compensation whatever has been paid.The court then applied the common law rule from Attorney General v De Keyser's Royal Hotel Ltd, [1920] AC 508, that "unless the words of the statute clearly so demand, a statute is not to be construed so as to take away the property of a subject without compensation", finding that the appellants were entitled to full compensation "in an amount equal to the fair market value of its business as a going concern as at May 1, 1969, minus the residual value of its remaining assets as of that date".

The Queen in Right of British Columbia v. Tener et Al. [1985]

*With Shortt

The Queen in Right of BC v Tener et al, 1985 SCC [658]Facts: T was granted mineral rights in 1937, in an area that subsequently became a provincial park. Thirty years later, the province passed a law prohibiting mining inside parks without a permit. This permit would be issued only if mining was necessary for the preservation of the recreational value of the park [i.e. never! – Mike].Issue: Did the total prohibition on mining expropriate T’s rights?Holding: Yes.Reasoning: By preventing T from mining in the park, the government solidified its control over Gray provincial park. This represents a complete denial of rights to T, since T’s mineral rights are worthless if the mine cannot be operated. This action must be distinguished from both zoning and from prohibitions of specific activities on certain lands, since these kinds of activities touch the community as a whole [this part is a bit sketchy – Mike]. Here “the action was taken by the government to enhance the value of the provincial park.”

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Ratio: (1) Any transfer or extinguishing of rights which ultimately benefits the government or assets that it holds is an expropriation; (2) Zoning and community-wide regulatory activities do not constitute expropriation.

“The legal story begins […] on July 8th 1937, when the Province of BC, under the Mineral Act, granted the respondents’ predecessors in title an interest in fee simple in the lands now in dispute.”

Grant: “[…] Give and grant WESTERN INVESTMENTS LIMITED [predecessor to the respondents] its successors and assigns, all minerals, under that Parcel or Lot of Land situated in […] and the right to use and possession of the surface of such mineral claim […] including all operations connected therewith or with the business of mining.”

Grant included a clause; “Provided that the grant hereby made shall be subject to the laws for the time being in force respecting mineral claims.”

Re Haddock and Ontario (AG) [1990]

Re Haddock and Ontario (AG), 1990 Ont HC [664]Facts: Ontario imposed rent controls via the Residential Rent Regulation Act. A group of landlords attack these laws on the basis of ss 7 and 15(1) of the Charter.Issue: Does the RRRA violate s 7? Holding: No.Reasoning: The SCC has clearly stated that property rights do not fall under s 7. It applies solely to physical and mental integrity. Any impact on the value of H’s building as a retirement investment does not threaten their physical and mental integrity. An alleged jurisprudential trend towards protection of economic interests is rejected.Ratio: (1) The Charter does not protect property rights; (2) It protects economic interests only in truly exceptional cases.

A and L Investments v Ontario [1997]

Facts: This is another attack on the RRRA. This time the plaintiffs allege expropriation in addition to the Charter.Issue: (1) Is the RRRA expropriation? (2) Does it violate the Charter?Holding: (1) No (2) No.Reasoning: There is no transfer here of the plaintiff’s assets or value of the assets to the state. Nor is there a transfer to tenants via the State. Tenants in this case don’t acquire any new property rights; they simply pay a lower rent, which is an economic advantage but not a property right. Further, if the RRRA was recognized as an expropriation, this would be

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equivalent to conferring Charter protection on property, an approach which was rejected by the legislature and jurisprudence.Ratio: Expropriation defined as “The state must acquire the property from the plaintiff either for its own use or for the purpose of destruction.”Comment: Presumably “its own use” can include permanent non-use of a right (as in Tener).

Mariner Real Estate Ltd v. Nova Scotia [1999]

Nova Scotia (AG) v Mariner Real Estate [676]: Criticizes Harvard Investments, stating that loss of economic value cannot be the foundation of expropriation. “The distinction between the value of the land and interests in the land is, in one sense, highly technical” but it is fundamental to understanding what is or is not an expropriation.

*From CaseBrief.me

Facts: 

Mariner wanted to build homes on a beach area, but was denied by the government due to concerns over the best interest of both the public and the property owners (sensitive nature of the land, and consequences of breakdown for the potential homes).

Ratio: 

Two Step Test to determine whether an action by the government constitutes expropriation:(1) Is it direct expropriation: is the state forcibly acquiring an interest and becoming the owner?

(2) Is it de facto expropriation:a. Is this considered “acquisition (is the state taking a degree of indirect

interest such that it has in effect acquired an interest equal to ownership)?b. Is it a stringent regulation of use of the property? Note that mere loss of

economic value on its own is not adequate for an action to constitute expropriation.

Also consider whether there is an applicable expropriation statute, which may override the common law regarding compensation.

Analysis: 

The provincial Expropriation Act did not apply here.Mariner could have made other use of the land, other than building the homes.

Holding: Against Mariner.

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§6.2: TENURES AND ESTATES, Introduction

Introduction to Tenure and Estates

Although much of the system of tenure explained below is obsolete, a basic understanding of the historical origins of the English law of real property is indispensable to an understanding of the conceptual bases of that law in common law Canada.

As in England, land “owners” in Canada are still not true owners, but are tenants in fee simple of the crown.

K. Gray, Elements of Land Law

The law of today is still heavily impressed with the form of ancient legal and intellectual constructs.

The intellectual constructs of land law move, as Professor Lawson once said, “in a world of pure ideas from which everything physical or material is entirely excluded.”

English law cannot be properly understood except in light of its history.

The Doctrine of Tenure

Norman invasion of England in 1066. King considered himself to be the owner of all land in England. Their newly conquered territory was effectively a system of landholding in return for the performance of services. According to feudal theory, all land was owned by the crown, and was granted to subjects of the Crown only upon the continued fulfillment of certain conditions.

All land in England ‘must be held of the kind of England, otherwise he would not be the king of all England.’ Ownership of land which was not subject to royal rights was “to wish for the state of nature”, so it would make sure that the King held it all to maintain universal authority.

All occupiers of land were at best regarded as "tenants”, i.e. holders of the land who in return for their respective grants rendered services of some specified kind either ot the Kign himself or to some immediate overlord who, in his turn, owed services ultimately to the Crown. Feudal pyramid.

Different methods of landholding were known as “tenures”, each tenure indicating the precise terms on which the land was held. Subdivided; Free, and unfree.

Common labourer (villain tenant) originally had no place on the Feudal ladder at all. Merely occupied land on behalf of his lord, and it was the latter who was deemed by the common law to have ‘seisin’ of the land thus occupied.

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The kinds of service provided by those who enjoyed free tenure included [oldey examples given, like use of horses for battle]. With the passage of time, the military and soccage tenures were commuted for money payments, but all tenures carried with them “incidents” (or privileges enjoyed by the lord) which were often more valuable than the services themselves. **LAND RIGHTS.

Emergency of a kind of feudal pyramid of free tenants, with the actual occupiers of the land forming the base, their overloads standing in the middle – both receiving services and rendering services in their turn – and with the King at the apex receiving services from his immediate tenants.

By the end of the 13th century a more modern concept of land as freely alienable property was beginning to displace the restrictive feudal order, and this evolution culminated in the enactment of Quia Emptores in 1290. Following the enactment of 1290, only the Crown could grant new tenures, and the existing network of tenures could only contract with the passage of time.

All tenants in fee simple today are presumed to hold directly of the Crown as “tenants in chief”.

Under the Tenures Abolition Act 1660, almost all free tenures were converted into “free and common socage” but the conceptual vestiges of the doctrine of tenures lives on. Still all owned by the Crown. Still technically the case that no one owns land except the Crown, and that all occupiers of land are merely, in the feudal sense, tenants.

Tenure of land for an estate in fee simple is now tantamount to absolute ownership of the land – or as close to total control of land as is nowadays possible.

The doctrine of tenures has long been overtaken in importance by the other doctrine which explains much of the English land law; THE DOCTRINE OF ESTATES.

The Doctrine of Estates

Whereas the doctrine of tenures serviced within the freamework of medieval theory to indicate the conditions on which a grant of land was held, the doctrine of estates defined the effective duration of that grant.

Followed that the the king’s subjects were merely “tenants”, occupying the land on the terms of some grant derived ultimately from the largesse of the Crown. Not initially clear what the individual tenant could say he “owned”. The answer to the conundrum was provided by the “doctrine of estates”.

The object of ownership enjoyed by each “tenant” was not the land itself but a conceptual “estate” in the land, each “estate” different from the others in temporal extent.

Provided a functional substitute form of ownership in respect of land. Like the medieval “tenant”, the modern proprietor of land owns in some strict sense not the land, but rather an estate in the land which confers specific RIGHTS and powers according to the nature of the estate.

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“Estates” also introduced a fourth dimension of time into the description of the terms of grant enjoyed by the tenant. Each estate recognized by the CML simply represented a temporal “slice” of the bundle of rights and powers exercisable in respect of land, and in the doctrine of estates was developed a coherent set or rules classifying the diverse ways in which rights in land might be carved up in this dimension of time.

An “estate” denoted the duration of a grant of land from a superior owner within the vertical power structure which emanated from the Crown, and no man could grant another any greater “estate” than that which he himself owned.

Nemo dat quod non habet.

Types of Estates

From Shortt:

There are three “freehold” (non0feudal) estates that are still used in the modern world. What distinguishes these estates from each other is the notion of time and the bundle of rights available.

Fee Simple This is the primary estate in land that is “nowadays tantamount to absolute ownership of land” [260]. It lasts forever, can be devolved by will to one’s heirs, and can be freely sold or otherwise transferred. There are no inherent limitations on the use that may be made of the land (although legislation may impose limitations for environmental or planning purposes).

The “natural rights” of a fee simple include subjacent support for land and buildings (if I buy a house on your land you cannot tunnel under my house even if you own the land under it) and the right to lateral support for land (but not buildings!). [344]

Life Estate This is an estate whose duration is measured by the length of a person’s lifetime, or of several persons. Thus it lasts for a definite but uncertain period. It is not a freehold of inheritance (unlike the fee simple and fee tail) since it cannot be devolved to heirs after death. A life estate may be pur sa vie (for the life of the estate holder) or pur autre vie (for the life of someone other than the estate holder). Life estates pur autre vie are automatically created when the holder of a life estate pur sa vie conveys it to another person. Since the estate holder cannot convey an estate greater than the one he holds, the newly created estate must last for his own life.

Life estates pur autre vie have a special complication that occurs if the estate holder dies before the person whose life measures the length of

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the estate. Example: “To Susan for the life of Joan.” If Susan dies before Joan, there will be “unused time” on the estate. What happens?

There were two special Common Law rules:

(1) If the estate was granted “to Susan for the life of Joan” then the first person to occupy the estate after Susan’s death becomes the “General Occupant” and can enjoy the estate until Joan’s death.

(2) If the estate was granted “to Susan and her heirs for the life of Joan” then Susan’s heir is entitled to occupy the estate until Joan’s death as the “General Occupant.” These rules have been replaced by statutory provisions, below.

In Ontario, the Succession Law Reform Act makes it possible to dispose of a life estate pur autre vie by will. [262] If the holder fails to dispose of it by will, it descends to the next of kin via the Estates Administration Act. [262]

Fee Tail This is a fee simple that can only be transferred to the heirs of the person who holds it. It was intended to control the free disposition of land, and in some cases to restrict inheritance to only male heirs, or to children of a particular spouse. They can no longer be created and are fairly easy to get rid of.

K. Gray, Elements of Land Law

The three freehold “estates” known in the CML were the Fee Simple, Fee Tail, and Life Estate. The key to the distinctions between them lies in the notion of time.

Court of Exchequer in the 16th C in Walsingham’s Case: “the land itself is one thing, and the estate in the land is another thing, for an estate in the land is a time in the land, or a land for a time, and there are diversities of estates, which are no more than diversities of time.”

The estate in fee simple has always been the primary estate in land. Represents the amplest ‘estate’ which a ‘tenant’ can have in or over land. Walsingham’s Case : “He who has a fee simple in land has a time in the land without end, or the land for time without end.”

Insofar as real property represents a “bundle of rights” exercisable with respect to the land, ‘the tenant of an unencumbered estate in fee simple has the largest possible bundle… although in theory each tenant in fee simple is still merely a tenant in chief of the Crown, the estate in fee simple is nowadays tantamount to absolute ownership of land.

In terms of feudal fiction, an estate which endures forever and which is capable, more or less indefinitely, of transfer inter vivos or of develultopn on death.

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The owners of the fee simple estate may come and go but the estate remains, since it is of indefinite duration.

Each new owner steps into the shoes of his predecessor as a tenant in chief of the Crown (modern effect of the Statute Ouia Emptores).

The owner of an estate in fee simple is sometimes called a “freeholder” – the owner of a freehold estate.

R. Scane, “Notes on Life Estates and Estates in Fee Tail”

Life Estate: Estates whose duration is measured by the lifetime of a person, or of persons, a definite period of uncertain duration are estates of freehold, but are not freeholds of inheritance, as are the estates in fee simple and fee tail. That is, at common law, the interest of the tenant of a life estate is not capable of descending to the tenant’s heir.

Life Estate Pur Sa Vie: The measuring life is that of the tenant of the estate. Thus a conveyance of “to A for Life” would be understood as meaning “to A during the period of A’s own life”.

Life Estate Pur Autre Vie: The measuring life might be a person other than the tenant, such as in the conveyance “to Joan, for the life of Susan.” This is known as a “life estate Pur Autre Vie.

- A life estate pur autre vie is also created when the holder of a life estate pur sa vie conveys his or her interest to another.

- The new owner of the estate has an estate measured not by his or her own life, but by the life of the original owner.

- This illustrates a simple but important principle in the law relating to creation of estates in land: you cannot give what you do not have.

Life estates pur sa vie are not estates of inheritance and therefore cannot descent to the life tenant’s heir on death.

This is obvious – once the life tenant dies there is no interest that can be inherited.

But not so obvious in the case of the life estate pur autre vie.

Consider again the example given above, “To Joan for the Life of Susan.” If Susan croaks before Joan there is no issue of succession to the estate, as Joan’s interest has ended.

But, if Joan croaks before Susan, there is still unexpired time to be disposed of; the remainder of Susan’s Life. But at CML all life estates were not to be estates of inheritance, sand so the remaindering interest could not descend to her heir on Joan’s death.

Special Rules of Occupancy

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To get around this problem, the CML developed special rules of occupancy, which depended on the exact form of the original grant.

If the land was originally granted “to Joan for the life of Susan,” then, on Joan’s death before that of Susan, the first person to enter upon the land after Joan’s death, and take possession of it, was entitled the balance of the state (until Susan’s death) as “General Occupant”.

If the land was originally granted to Joan and her heirs for the life of Susan, then the person who was Joan’s heir was entitled to occupy the land until Susan’s death, as a “Special Occupant”.

Present and Future Interests

Preceding pages demonstrate that the estates system recognizes a variety of different interests in land.

The next sections will show that the common law also allows for conditional estates, interests in land which may

- (i) Either not arise until the happening of a certain event, or- (ii) Which may be terminated in the future by the occurrence of a certain event

Once we know that it is possible to have an interest in land less than the fee simple absolute (life estate, fee tail, conditional fee simple), the next question is: What happens to the rest of the fee simple absolute in any given piece of realty?

The answer is that the law recognizes future interests in land.

In fact, the common law recognizes two types of future interests: a reversion and a remainder.

Reversion: Any interest retained by the grantor: For example, in the grant “to A for Life” the grantor, assuming that he or she holds the fee simple absolute, has not disposed of his or her full interest. The grantor has a reversion in fee simple. A reversion need not be specified, it arises by operation of law from the failure by the grantor to alienate the entire interest.

Remainder: An interest created in a third party which follows the granting of an estate less than the fee simple absolute. Example: in the grant “to A for life, then to B”, B has a remainder in fee simple but no right to possess the land until A dies. Note that in this example the grantor has no reversion – he or she has given away the full fee simple.

Shortt On Revisionary Interests, Remainder Interests

Common law recognizes future interests in land, distinct from present interests in land. These interests exist in the present, but concern future possession. This will allow a number

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of important legal operations (like someone with a future interest opposing “waste” of the land in the present).

A Reversionary InterestAny interest in land retained by the grantor. Reversions need not be specified and arise automatically by operation of law. Example: “To A for life.” Assuming the grantor had a fee simple absolute, then the grantor has not disposed of his full interest, which has infinite duration. When A dies, the grantor will take back the land. Thus the grantor is held to have “reversion in fee simple.”

A Remainder InterestAn interest created in a third party which follows after the granting of an estate less than fee simple absolute. Example: A declares “to B for B’s life, then to C.” This conveyance creates a remainder in C, a third party to the grant between A-B. Note that in this example the grantor has no reversion – the full fee simple has been given away.

K. Gray, Elements of Land Law

As the law of real property became distanced from the physical reality of land and entered a world of almost mathematical abstraction, it was possible to accord an immediate conceptual reality to each “slice” of time represented by an ‘estate.

In other words, any particular “slice” of entitlement in the land could be viewed as having a present existence, notwithstanding that its owner was not entitled to possession of land until some future date.

It was this feature of the time-related aspect of the “estate” in land which made it possible for the common lawyer to comprehend the notional reality of immediate dispositions of, and dealings with, future interests in land.

Waste

Because the doctrine of estates recognized the feasibility of successive estates in the same land, rules were developed to restrain the current estate owner from prejudicing the value of the land in the hands of any successor (or ‘remainderman’).

These rules took the form of a doctrine relating to “waste”, “waste” being defined as any action or inaction on the part of the estate owner, which altered the physical character of the land.

Waste can be committed in several ways, but not all forms lead to legal remedy.

Ameliorating Waste: Has the effect of improving the land and enhancing the value.

Permissive Waste: Comprises defaults of maintenance and repair leading to the dilapidation of buildings situated on the land.

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Voluntary Waste: Includes any positive diminution of the value of the land (i.e. quarrying or cutting of timber)

A tenant for life is liable for such waste unless the terms of his grant give him specific exemption by declaring him “impeachable for waste.”

Shortt on Land Waste

Waste is a tort, consisting in action or inaction by the current estate-holder that changes the physical nature of the land/buildings upon the land.

Anyone with a future interest in the land can sue you for waste (like the owner if you’re a tenant, or the person holding a reversion or remainder interest if you have a life estate).

Positive waste (improvements) are not normally actionable.

Permissive waste (allowing structures to fall in to disrepair) is not tortuous – unless the grant specifically says that it will be for a particular conveyance.

Negative waste (quarrying stone or logging timber) is tortious, but again this can be changed by declaring that the estate-holder is “unimpeachable for waste” in the grant.

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§6.2.2: Introduction to Conditional Estates

Introduction to Conditional Estates

Estates in land = temporal “slices” of the rights to the possession, use, and enjoyment thereof.

Thus far, we have considered these estates as “absolute”, as belonging unconditionally to someone.

Estates may, However, be granted subject to conditions. Conditions can be of Two Kinds:

Condition Precedent:

Conditions Precedent – Conditions of Eligibility.

Conditions must be satisfied before the grantee has any right of enjoyment at all.

Example: “to A at 21”, or “to B for life is she should marry Y.” If either die before the condition is met, or if the condition becomes impossible of performance (i.e. if Y dies before B marries him), the interest will be extinguished and nothing passes to heirs.

Conversely, if A becomes 21, or if B marries Y, then the condition is satisfied and the interest becomes a vested interest.

This does not mean that the owner of a vested interest has an immediate right to possession. That is the case in the two examples above, but it is not so in the grant “to A for life, then to B for life if she reaches 21”. At the time of the grant, assuming B is not 21, her interest is contingent. If she reaches 21 while A is alive, her estate becomes vested in interest, but she has no right to possession until A dies.

Courts generally favour early vesting where there is any doubt whether a grantor or testator/testatrix intended to create a vested or contingent interest. See: Mackay v Nagle et al.

Condition Subsequent

Condition Subsequent = Condition of Defeasance.

These operate to defeat an estate which has already vested.

Example: “to C in fee simple, but if he ever becomes a member of the Law Society of Upper Canada, to D in fee simple.” If C acquired the land in 1960 with this condition attached, the estate was vested at that time but was liable to be divested at a future date if C became a lawyer.

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These conditions of defeasance are personal; if C died in possession and never having joined the profession, his heirs will inherent a fee simple absolute. Such an estate is known as a fee simple defeasible on condition subsequent, or, occasionally, a fee simple vested subject to divestment.

Determinable Fee / Determinable Estates

The fee simple defeasible on condition subsequent is not the only estate which may be made subject to a condition of defeasance. Such a condition is also incorporated in a determinable fee, sometimes called a fee subject to a limitation.

Estates Which May Be Made Subject to a Condition of Defeasance

Fee Simple Defeasible on Condition Subsequent

* Right to end the estate

Premised on notion that the grantor has given away a full estate while providing a possibility of later termination via the condition.

When a grantor creates a defeasible fee he or she is left with what is known of a right of re-entry. This gives the grantor, when the condition is broken, the right to end the grantee’s estate: the grantee’s estate is not automatically terminated.

If the condition is attached to a simple defeasible on condition subsequent, and the court holds the condition to be invalid, the condition only is struck, and the grantee takes the estate free of the condition.

Determinable Fee (Fee Fee Subject to Limitation)

* Automatic termination of the estate

Considered to be ab initio something less than a full fee simple estate.

The condition is considered part and parcel of the fee simple, not a separate condition that may end it.

Automatically ends if at the event specified occurs; this right in the grantor is called a possibility of reverter.

If the condition is attached to a determinable fee simple and is found to be invalid, the estate is entirely void and reverts to the grantor. This is because of the nature of determinable estate in which the condition is part and parcel of the fee.

The difference of these two reversions – one a right to end the estate and the other an automatic termination of it – flows from the conceptual difference between the two conditional fees.

Additionally, rules limiting the types of conditions that can be imposed on an estate . This has come to primarily mean that a condition must not be uncertain and nor must it contravene “public policy”.

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As is the case when the holder of a conditional estate breaks the condition, there are different consequences depending on whether the fee is determinable or defeasible when the condition is of the type the the law considers invalid.

If the condition is attached to a determinable fee simple, and is found to be invalid, the estate is entirely void and reverts to the grantor.

Shortt Notes

Conditions Precedent

CP delay the vesting of the property interest until some condition is met. Example: To A when he turns 21; to B in 2013; to C if she graduates from McGill Law; to D if his dog has puppies. Note that unlike civil law, there is no distinction between certain and uncertain events (i.e. between terms and conditions). Until the condition is met, the grantee has NO interest in the property. Thus “To A for life, then to B when he turns 21” does not grant B any interest, even a future interest, before turning 21. Thus B cannot sue under the doctrine of waste or convey his interest to someone else, for example. Instead B has a contingent interest. If the grantee dies before the condition is fulfilled, or if the condition becomes impossible, the contingent interest is extinguished and nothing can pass to the grantee’s heirs.

Where there is ambiguity about the time of vesting of an interest, the Common Law will favour early vesting.

Creation

“To A, on condition that A first” (Gold)“To A when…” (Gold)Generally not as tricky as differentiating between conditions subsequent and determinable estates. Usually clear from context that a CP has been created; difficulties only arise in determining when the condition triggers.

Mackay v Nagel et al, (1988) NBCA [271]: Testator left his property to his wife for life, “and thereafter to my living children in equal shares.” He had 4 children, one of whom died while his wife was alive. This raised the question of when their interests vested. If the interests vested only after the death of the wife, then the 3 remaining children split his property 3 ways, since the 4th child’s interest was contingent and extinguished when he died. If the vesting was immediate, then the property must be split 4 ways between the 3 living children and the estate of the 4th, since immediate vesting created a future interest that devolved to 4th child’s estate upon death. Hence the law suit is over 1/3 or 1/4 shares of the estate. The court relied on a long line of cases that “the courts generally follow a rule of construction favouring early vesting” and gave the 4th child a future interest that vested when the will was made.

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Conditions Subsequent

Also known as: fee simple defeasible on condition subsequent, defeasible fee simple, or fee simple vested subject to divestment. These are estates which have been fully vested in the grantee, but which provide for a possibility of later termination via the condition. The primary element is the transfer of the full estate; the condition subsequent, as implied by the name, is merely imposed on top of the conveyance and thus this limitation is less central to the transaction than it would be in the case of a determinable estate. Courts may also try to interpret them as restrictive covenants.

Personal Nature: Conditions subsequent are personal thus if an estate is granted to A subject to conditions subsequent, if A still has the estate when he dies, A’s heirs inherit a fee simple absolute. [I’m not sure what happens if the land is sold… presumably the condition remains valid until A dies, otherwise it would be too easy to erase conditions by selling property; plus this fits with the maxim about not transferring a greater interest than you actually have – Mike]

If condition breached: The grantor is given a “right of re-entry.” This is an option to end the grantee’s estate, which is not ended automatically. Rights of re-entry can be granted to people other than the grantor, which gives them the reversion right.

If condition invalid: Because the CS is separate from the transfer of the full estate, it can be severed judicially. Thus after removing the condition, all that remains is the full transfer of the estate. Thus “To A provided that he marry B” is invalid as a restraint on marriage, and after invalidation, A keeps the property. A CS is also voided if its fulfillment becomes “impossible by operation of law” and again, all that remains is a fee simple absolute (Cheshire, The Modern Law of Real Property [279]).

Creation of Condition Subsequent

“To A, but if… then…” ([271], Megarry and Wade, The Law of Real Property [274])“Provided that” (Megarry and Wade, The Law of Real Property [274])“On condition that” (Megarry and Wade, The Law of Real Property [274])“If it happen that” (Megarry and Wade, The Law of Real Property [274])… and other words that “form part of a separate clause of defeasance” (Megarry and Wade, The Law of Real Property [274])

Megarry and Wade, The Law of Real Property

Article looks at distinctions between determinable fee and a defeasible by condition subsequent.

Essential distinctions:

Determinable Fee: The determining event sets the limit for the estate first granted.

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Condition Subsequent: An independent clause added to a limitation of a complete fee simple absolute which operates so as to defeat it.

Thus a decise to a school in fee simple “until it ceases to publish its accounts” creates a determinable fee, whereas a devise to the school in fee simple “on condition that the accounts are published annually” creates a fee simple defeasible by condition subsequent.

Words such as “while”, “during”, “as long as”, “until” and so on are apt for the creation of a determinable fee.

Words which form a separate clause of defeasance, such as “Provided that”, “on condition that”, “but if”, or “if it happen that”, operate as a condition subsequent.

Fee Simple Determinable Fee = Sets the Limit

Fee Simple Defeasible by Condition Subsequent = Independent Clause Added

Referred to as a “Condition of Defeasance” in Clayton v Ramsden which is way easier to interpret.

While Provided thatDuring On condition thatAs long as But ifUntil If it happens thatEtc. Etc.Ex. “Until it ceases to publish its accounts” Ex. ”On the condition that the accounts are

published annually”

BUT: Context more important than words themselves; see McColgan.

Re McGolgan [1969]*From Shortt

Re McColgan, 1969 Ont HC [275]Facts: The trust company executing M’s will seek guidance on the interpretation of his will. M bequeathed a house in Ontario to K “until her death or until she is not residing therein personally, whichever shall first occur, and thereafter to L [on the same conditions].” Issue: What interest does K have in the home?Holding: A life estate subject to conditions subsequent.Reasoning: The rule of construction for wills is to achieve the “expressed intention” of the testator. The question here is whether M intended to convey a mere license on K, or a life estate. The language of this will goes beyond that expected for the creation of a mere license and suggests a life estate. The condition, which starts with “until” nevertheless seems to be

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an external to that grant and is thus a condition subsequent rather than a determinable estate.Ratio: Limitations which are “a divided clause from the grant” create conditions subsequent, not determinable estates.

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§6.2.3: Conditions and Uncertainty

Section will consider why the courts will intervene and declare a condition to be void.

Generally speaking one can delineate two reasons the courts will strike down conditions: (i) The condition is either uncertain, or (ii) it is contrary to public policy.

Sifton v Sifton [1983]

Purposes and period not defined; voided for uncertainty.

Sifton v Sifton, 1938 Privy Council [281]Facts: Sc and Sw (“trustees”) want to know how to interpret a provision in a will which reads “Payments to my daughter [Sm] shall be made only so long as she shall continue to reside in Canada.” Sm wants to study abroad and wants to know under what conditions she can do so without violating the will. She also alleges the clause is an uncertain condition subsequent and should be void.Judicial History: The first instance judge held long absences from Canada had to be good faith efforts to complete her studies. Ontario’s court of appeals was divided and rendered 5 opinions, 4 agreeing on “limited” and “temporary” absences being okay, but failing to agree on a definition of either term.

Issue: (1) What kind of condition is the clause? (2) Is it void for uncertainty?

Holding: (1) Condition subsequent (2) Yes

Reasoning: (1) The PC invokes the presumption in favour of early vesting to make the condition a condition subsequent, rather than determinable; (2) It has long been the rule that conditional transfers must precisely and clearly define the conditions under which they revoked. The disparity of judicial opinions in the lower courts, and the fact that none of the Appeal judges attempted to define precisely what actions would violate the clause, both suggest that precise definition is impossible. Hence the clause is invalid

Ratio: (1) A clause is void for uncertainty unless “the court… and…the parties…can see from the beginning precisely and distinctly upon the happening of what events it is that the payments to the appellant are to case.”

Comment: In Clayton v Ramsden, Lord Killowen said of this case that: “The testator clearly having intended that his daughter should be at liberty to leave Canada for some purposes for some periods, he had failed to define either the purpose or the periods. Hence the uncertainty which invalidated the condition.”

Clayton v Ramsden [1943]

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“Uncertainty avoids the whole condition subsequent.”

“My Lords, this is a case in which the testator has sought […] to direct the lives of his children from the grave.” LOL

“The question for our decision is whether the trusts in the will in favour of Mrs. Clayton, the husband and issue, ceased on the marriage. The answer depends on whether the condition of defeasance is a valid condition.”

“The courts have always insisted that conditions of defeasance, in order ot be valid, should be so framed that the persons affected can from the outset know with certainty the exact event on the happening of which their interests are to be divested.”

** “Defeasible by Condition Subsequent” referred to as “Condition of Defeasance” in Clayton v Ramsden. Makes it SO much clearer.

*Via Shortt

Clayton v Ramsden, 1943 UKHL [288]Facts: B left his daughter a large inheritance, but attached the condition that if she “shall at any time…contract a marriage with a person who is not of Jewish heritage and of the Jewish faith then as from the date of such a marriage” her interest would “cease and determine.” She married C, who not Jewish in any sense. The Cs attack the validity of the clause.

Issue: (1) What kind of condition is this? (2) Is it void for uncertainty?

Holding: (1) Condition subsequent (2) Yes.

Reasoning: Lord Killowen: Believes both “Jewish parentage” and “Jewish faith” are too vague.

Lord Romer: “It is the duty of the court to solve the [definitional] problem if it be possible to do so.” Romer believes the “Jewish parentage” part is void for vagueness. This invalidates the entire condition, not just the “Jewish parentage” part (which would leave the “Jewish religion” requirement intact): “His intention cannot be given effect to because he has not chosen to express it in sufficiently unambiguous terms, but that does not justify the court in making a new will for him and treating him as if he had expressed a different intention altogether.”

Ratio: (1) Courts will police restraints on marriage very closely for vagueness; (2) If part of a condition is vague the entire condition is void for vagueness (i.e. vagueness is not severable within the condition).

§6.2.4: Conditions and Public Policy

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Difficult notion to define. Includes conditions contrary to law, meaning conditions either mandating an illegal act or conditions which seek to subvert the course of law (ex. Condition providing for divestment if the grantee becomes a bankrupt).

Beyond this category, difficult to say why the content of certain kinds of conditions attracts judicial disapprobation contrary to “public policy” and others do not.

Most conditions traditionally held to be invalid as against public policy were considered so because they represented restraints on marriage, conditions affecting parental duties, or restraints on alienation.

Issue of concern here is the relationship between private property, public policy, and what we not call unacceptable discrimination.

Note that Noble and Wolf is about a restrictive covenant.

Re Canada Trust is about a charitable foundation and personal property.

Do not worry about these distinctions; only consider what should be the scope of “public policy”.

Re Noble and Wolf [1949]

** Overturned either by statute (Re Canada Trust), or the SCC Appeal.

Re Noble and Wolf, 1949 ONCA [294]Facts: The owners of property in an area joined together in to the Beach O’Pines Protective Association. The company that sold the lake-front property to these owners placed a limitation clause in their deeds which prevented sale of the land to Jews or Blacks before 1962. W attempted to buy N’s cottage and is Jewish. He asks the clause to be declared invalid.

Issue: (1) Is the discriminatory condition void due to public policy? (2) Is it void for uncertainty?

Holding: (1) No (2) No.

Reasoning: Robertson: Distinguishes from Drummond Wren (where a “No Jews” clause was struck down) on the grounds that this clause is temporary and that the lands here have a “special purpose” not present in Wren. Claims that this purpose is ensuring that vacation homeowners get along. Claims there is no public policy argument in play since a “Blacks only” or “Jews only” clause would not be against public policy. Plus this clause doesn’t fit in the conventional categories of public policy. Argues that racial harmony is valuable only if it is genuine, and not forced, so invalidating the clause on moral grounds is counterproductive.

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Henderson: Discrimination is not a ground of public policy. Nor should a new ground of public policy be created here, since this covenant is in no way oppressive to the public. Thus not invalid. As to uncertainty, the existence of racial categories on the census shows that ascertaining the race of a person is not impossible.

Hogg: Says the same things as Henderson.

Ratio: None – both holdings overturned either by statute, Re Canada Trust (below), or the SCC on appeal at the time.

Conveyancing and Law of Property Act

Enacted after Re Noble and Wolf by the Ontario legislature;

“Every covenant made after the 24th day of March, 1950, that but for this section would be annexed to and run with land and that restricts the sale, ownership, occupation or use of land because of the race, creed, colour, nationality, ancestry or place or origin of any person is void and of no effect.”

Re Canada Trust Co and Ontario Human Rights Commission [1990]

Not void for uncertainty, bur void for public policy.

Re Canada Trust Co and Ontario Human Rights Commission, 1990 ONCA [303]Facts: CT was administering a scholarship fund for a rich, dead, racist guy. He set up scholarships restricted to white male Protestants of British nationality. The requirements to qualify for the scholarship were set out in explicitly racist tones.Issue: Is the grant void for: (1) uncertainty? (2) public policy?

Holding: (1) No (2) Yes.

Reasoning: Tarnopolsky: (1) The trust is clearly a valid charity at Common Law. The definition of the class of beneficiaries is a condition precedent. Such conditions must be certain, in the sense that any proposed beneficiary can clearly be classed as eligible or ineligible. “In this case there has been no difficulty over some six decades in ascertaining whether students qualify.” (2) Public policy must be expanded to cover non-discrimination. The judge cites a variety of important statutes forbidding discrimination, notes that human rights codes have been given special status by the SCC, and the international community.

Robins: Public policy is “an unruly horse” but agrees substantially with Tarnopolsky. Puts emphasis on the explicitly racist wording of the trust’s purpose. This implies that a

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scholarship for male Protestants would not be invalid as long as it didn’t say they were better than Catholics/atheists/women.

Ratio: (1) Non-discrimination is a ground of public policy in Ontario; (2) Conditions precedent of charitable gifts are policed loosely and invalidate only the condition, rather than the trust as a whole; (3) Evidence of smooth operation of an eligibility criterion may be used to establish that it is certain; (4) The discriminatory nature of trusts will be evaluated on a case by case and statements of purpose will play an important role in addition to mere eligibility criteria.

Comment: For subsequent treatment see cases at [317-318].

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§6.2.5: Restraints on Alienation

A particular type of condition contrary to public policy: a restraint on alienation; a condition that limits the ability of the grantee to alienate the land.

The Typical Traditional restraint on Alienation Case: This would be an interest in land given in a will, attached to which would be a condition that if the land is sold to certain persons, or used for a certain purpose, or not first offered to certain persons, then the estate ends.

This is sometimes called a “forfeiture restraint” The estate is forget if the condition is broken.

Often said that restraints on alienation are invalid because they are repugnant to the fee simple. That is: the right to freely alienate is a crucial part of the fee simple and you cannot limit it. This is a circular argument.

Argument not only circular, but wrong, for two reasons:

i) “Partial” restraints are permitted.ii) The repugnancy argument does not hold water; very substantial (but not total)

restraints survive court scrutiny if they have been bargained for.

(See p. 315 of coursepack)

Laurin v Iron Ore Company of Canada

Laurin v Iron Ore Company, 1977 NFSC [321]Facts: IOC built a company town. As part of their efforts they subsidized housing for their workers, but to get financing, workers had to agree to a contract which gave IOC the right to buy the home at a fixed price. This purchase option was triggered if the worker: ceased to be employed by IOC, IOC took over mortgage payments because the worker was bankrupt, or the worker wanted to sell the property (“the option”). IOC agreed that if the mortgage was paid off, it would not exercise its option, nor would it do so if the employee sold to another employee. Even this was problematic though, since no one could get a mortgage on their homes because banks could not repossess the home in case of default – the company got it – and so were wary of lending.

Issue: (1) Is the option a covenant or a conditional estate? (2) If they are conditions, are they a restraint on trade?

Holding: (1) Conditions (2) Yes.

Reasoning: We are concerned here with the distinction between conditions on the grant or covenants bargained for by the parties. “A condition is created by the testator or grantor. A covenant is made by the grantee.” The judge sets out the test in the ratio, below. He then applies this to the facts, holding that the restrictions were the trade-off for mortgages and

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subsidization, but that the workers would not have agreed to them except as a condition for getting the house. Thus they are conditions. They clearly lower the value of the house, thus they are invalid.

Ratio: (1) Restrictions on alienation which are reasonable and might have been granted as part of an independent business transaction are covenants; (2) Restrictions which are unreasonable are conditions, and if they absolutely or substantially restrain trade they are void; (3) These rules apply only to restrictions contained in a conveyance or that are created immediately thereafter.

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§6.2.5: Title, Proof and Registration

As one of the main ideas in feudal property was to keep land in the family, common law rules about transferring land were designed to make it difficult.

The registration of deeds or registry system (UK, parts of Canada) helped make the search process easier.

Title Registration, land titles, or the Torrens system changed all this. To make the transfer of land easier, less expensive, and more efficient, the certificate of title, once registered, is guaranteed by the government. What is on the register becomes “the truth”. This is known as indefeasibility of title.

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§7: DIVIDING TITLE AND POSSESSION

§7.1: Leasehold Estates v Licenses

LEASEHOLD ESTATESIntroduction

The principal characteristic of the landlord-tenant relationship at common law is that the leasehold interest is conceived of as an estate in land.

While the relationship of landlord and tenant is created by contract, the relationship itself is not a contractual but a property relationship.

(Not contractual! Property!)

In this sense it is the same as the relationship between a buyer and seller of land; they may contract to buy and sell, but once they have done so they are not in a continual contractual relationship that may be modified by negotiation or even breached.

The buyer has an estate and can exclude the seller; dealings between the two are at an end.

Once the tenant has the lease he or she has an estate and the absolute right ot exclusive possession against all the world, including the landlord, for so long as the term of the lease provides.

All the landlord has is the reversion; the right to retake possession and full rights when the tenants estate is at an end.

Landlord-Tenant relationship thus a relationship created by contract, express or implied in which a person with an interest in real property – the landlord or lessor – grants a lesser title in that property to the tenant or lessee.

Technical term = Demise, and the leased land is often referred to as the demised premises”.

The lesser interest demised is that of exclusive possession of land for a definite or potentially definite period of time.

A leasehold estate cannot be of uncertain duration.

** This chapter: A lease confers an estate in land, not merely certain contractual rights and obligations.

Leases and Licenses

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A lease is the grant of a leasehold estate. Knowing this will not tell you whether a particular agreement constitutes a lease or some other arrangement between the parties over use of the land, though.

Most common “other” legal form to an alleged lease: license.

License = Permission to use land for some purpose. Ex: Letting someone to park in your driveway. *A license is revocable at any time by the licensor.

An example of where it may be difficult to tell apart: a superintendent in an apartment building. He/she works for the owner and usually lives in one of the apartments.If the agreement to occupy the apartment was construed as being only a license, the superintendent would have no legal protection outside any terms contained in the license – the contract.

If the same agreement to occupy was seen as a lease, and therefore completely independent of the employment relationship, the superintendent could claim whatever protection the jurisdiction granted to tenants, whether or not she continued to work for the owner.

Rights are Clear – Difficulty is determining whether a License or Lease

License: Uncertain to duration.

Lease: Certainty of duration is only a necessary, not sufficient condition for a lease

Cases reveal two approaches to deciding whether an agreement is a lease or license:i) If the agreement grants, or intends to grant, exclusive possession for a fixed

time, it is a lease.a. All that matters: Has exclusive possession been granted?b. If it has, the agreement is a lease and grants estate – even if the word

“license” is used a million times.ii) The intention of the parties matter. If they intend to be landlord/tenant, then the

court will give effect to that intention.

Metro-Magic Services Ltd. V Hulmann (1973)

Judge here looked at the words “lease” and “demise” to imply a lease.

Also, regarding the restriction, saw it nothing more than a mere covenant. Does not make his possession any the less exclusive.

If anything, they assure the appellant’s exclusive possession and assure its control and occupancy.

Metro-Matic Services v Hulmann, 1973 ONCA [469]

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Facts: MM ha an agreement with the landlord of an apartment allowing it to place washing machines in the basement of the apartment. H and the tenants of the apartment bought it from the landlord, then brought in a new washing machine company and told MM to leave. The agreement was called a lease of a room to MM, only allowed MM to use it for laundry purposes, renewed automatically on a 5 year basis, contained a covenant for quiet enjoyment and contained a clause that it would bind the heirs, assigns, successors, etc., of both parties.

Issue: Is the agreement a lease or a license?

Holding: A lease.

Reasoning: Looking at the lease and all its elements, the judge highlighted the use of the terms lease and demise, which are the words traditionally used to create an estate in land. He also notes the presence of the covenant for quiet enjoyment. Together, and in the absence of clear intentions to the contrary, these create a lease, not a license. Further, the restriction of the use of the premise to washing machines is no more fatal to the document being a lease than a requirement that a leased premise be used only as a personal dwelling and not a business. None of the other covenants undermine MM’s exclusive possession.

Ratio: Weight should be given to the words used by the party to describe the lease, and to the global impression of the document.

Comment: The final paragraph of 473 speaks against the judge’s argument. He notes that certain clauses are unnecessary if the agreement is a lease… which implies that the parties would not have put them there unless they thought them important/effective/ necessary, which implies that the agreement is a license.

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§7.2: The Independence of Covenants

One of the incidents of the landlord-tenant relationship being a property relationship is the doctrine known as “the independence of covenants”,

Covenants are terms in the lease in addition to the grant of the estate itself by which either or (usually) both parties agree to undertake certain duties.

Ex.: Landlord may provide hea or trim a hedge while the tenant would pay a rent or make repairs.

To say that covenants are “independent” at CML means that a failure by either party to perform an obligation does not give a right to the other to terminate the lease.

§7.3: From Property to Contract? Law Relating to Abandonment

Variety of ways a leasehold relationship can be ended.

Surrender: “The yielding or delivering up of lands or tenements and the estate a man has therein, unto another that has a higher and greater estate”

- Cannot be unilateral- Not brought about merely by the tenant quitting abandonment- Surrender occurs if the tenant obtains the landlord’s agreement (Express or

Implied)

What if tenant wants to surrender half way through a one-year lease and the tenant does not?

Tenant could be liable for damages of breach.

Note that a lease is not a contract but an estate. If granted for 12 months, it lasts for 12 months, unless surrendered; at that point there is an absolute end with no future obligations.

You would have to tell the tenant that whether or not he/she abandons the premise the lease subsists for the whole 12 months and she is liable for the whole term. Landlord has no duty to mitigate damages.

BUT, if the landlord re-enters/changes the locks, he or she will be considered to have accepted that a surrender has taken place and the client is absolved of liability.

Also, finding another tenant would be interpreted as surrender.

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Via Shortt: If Tenant Refuses to Pay; 4 Options (Not all material covered in course)

If the tenant refuses to pay rent the landlord has 4 courses of action to choose from:

1) Leave the apartment unrented and collect the full amount of unpaid rent after the estate ends at the expiry of the lease. All unpaid rent is due. Apartment cannot be rented to anyone and no notice to the tenant is necessary.

2) Take refusal to pay rent as surrender of the estate, accept that surrender and end the lease. Only past unpaid rent is due; the lease ends and no future rent is due. The apartment can be leased and no notice to the tenant is necessary.

3) Attempt to find a sublessee on behalf of the tenant. Allows you to re-rent, sue for past unpaid rent by the tenant and also for the difference between the sublessee’s rent and the original rent (although if the new rent is higher, there is no possibility of recovering the “rent difference” because it is positive, and the extra rent can offset the unpaid rent from before the subletting [Postal Productions]). Notice to the tenant is required of the landlord’s intent.

4) Highway Properties option. Apply contractual doctrine of anticipatory breach. All future rent payments come due, the landlord may re-rent, in which case any new rental revenues are deducted from the money due. Notice is required [Gander Shopping Centre v Powell 498]. It is unclear if mitigation is a duty or merely an option.

Highway Properties v Kelly, Douglas & Co [1971]

Concerns doctrine of anticipatory breach. Found to apply to leases after possession.

Highway Properties v Kelly, Douglas & Co, 1971 SCC [488]Facts: D broke their lease with H after taking possession of the property. H seeks damage via anticipatory breach.

Issue: Does the doctrine of anticipatory breach apply to leases after possession?

Holding: Yes.

Reasoning: Laskin states that there has been a gradual ascendency of contract law principles over those of property with respect to leases. It is now time to recognize the doctrine of anticipatory breach applies to leases after possession (it currently applies pre-possession). This adds a fourth remedy to the list of 3 existing at the time of Goldhar. This fourth remedy is anticipatory breach: all future payments come due, the landlord can rent to other tenants, and any money brought in from subsequent rental is applied to offset the

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lump sum rental payments. This is fair and just – it is ridiculous to treat commercial leases as conveyances and not contracts.

Ratio: (1) Adds 4th option to the landlord’s legal remedies; (2) Landlords should have the “full armory” of legal remedies available under contract law.

§7.4: Mitigation

Before Highway Properties, the law on mitigation in landlord-tenant relationships was clear: it did not apply, being a principle of contract, not leasehold.

[…]

The failure to impose a duty to mitigate, to balance the benefits given to a landlord who may now sue for the whole benefit of the lease, is perhaps inconsistent with the general principle of treating the lease as contract not a conveyance, enunciated in Highway Properties.

Mitigation issue has had inconsistent applications. Post Promotions is considered to be the leading Ontario Case.

Toronto Housing Co v Postal Promotions, 1982 ONCA [509]Issue: Is there a duty to mitigate?

Holding: Unclear – overturns the ratio, but not holding of the previous decision.

Reasoning: The case at bar cannot concern a duty to mitigate, since mitigation occurred. Thus any talk of a duty is mere obiter. The court declines to rule on the general existence of such a duty. They then state some general rules governing breach of leases.

Ratio: (1) The tenant as well as the landlord should have full access to contractual remedies and defenses, (2) Leaves open the duty to mitigate question; (3) Measure of damages for breach of rental contract are the standard contractual measure: “place victim in same position as if the contract had been performed.”

Comment: More discussion of this issue at [511-512].

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