Property Law Summary

CML 1108 D Property
Professor Paul Daly Fall 2010

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Summary

A. Bundle of rights

Property as a bundle of rights: Property refers to particular rights of persons or entities
with respect to scarce tangible or intangible resources. According to Honore, there are
eleven aspects of property rights (reducible to six):
a. Possession (see A.2); management; and control
Fee simple / life estate (see C).
Exclusion: The power of control to exclude is commonly identified as the
chief element of property law from the perspective of single-variable
essentialism.
b. Income and capital
c. Transfer inter vivos (see A.2.c.(I)) and donatio causa mortis (see A.2.c.(II))
d. Protection under law
e. Liability to seizure / execution
f. Prohibition on harmful use
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1. Boundaries

a. (Vertical boundaries) Airspace: Cases involving alleged trespass into airspace can
be divided into two groups:
Literal interpretation of the maxim is impractical. A balance had to be struck
between the owners right of use and the public interest in using modern
technology. Test: land owner has rights to the height necessary for the ordinary
use and enjoyment of his land and the structures on it; above that, no greater
rights than the rest of the community in the airspace.
The two concepts that become apparent are firstly, that the courts will not give
literal effect to the Latin maxim and secondly, the proper remedy for interference
with a landowners airspace with a permanent fixture is in trespass as opposed to
nuisance [which requires proof of harm].

(I) Permanent structural intrusion: Cases involving permanent structural projections
into the air space above anothers land: The weight of authority favours the view that
direct invasion by a permanent artificial projection constitutes a trespass. However,
according to Lacroix v. R [1954], by putting up buildings or other constructions the
owner does not take possession of the air but unites or incorporates something to the
surface of the land.
Airspace test: In Bernstein v. Skyviews [1978], the court developed an airspace
test that Haddad interpreted as saying that a landowner is entitled to freedom
from permanent structures which in any way impinge upon the actual or potential
use and enjoyment of his land.

(II) Transient invasion: Cases involving a transient invasion into the airspace above
anothers land at a height not likely to interfere with the land owner.

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b. (Vertical boundaries) Subsurface: The Latin maxim is more absolute in
subsurface boundaries. In Edwards v. Sims, the Court held that the owner of the surface
was entitled to prevent a neighbour from using parts of a cave beneath his land despite
not having access to the cave himself based on the following principles:
Whatever is in a direct line between the surface of the land and the centre of the
earth belongs to the owner of the surface
Certain limitations imposed by statutory and common law rules prevent
interference,
Caves are just like mines so survey can be ordered where there are reasonable
grounds to suspect trespass.

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c. Chattels vs. fixtures: Quicuid plantatur solo, solo cedit.

Chattel: An article of personal property, as distinguished from real property.
Fixture: An article in the nature of personal property which has been so annexed to the
realty that it is regarded as part of the real property.

In La Salle Recreations Ltd. V. Canadian Camdex Investments Ltd., the court combined
tests developed in Stack v. Eaton (1902) 4 O.L.R. 335 and Haggert v. Brampton (Town)
(1897) 28 S.C.R. 174 to create the La Salle fixtures test:
Contracts are not controlling: Whether or not a chattel becomes a fixture,
which is based on the degree/purpose test, cannot be conclusively controlled by
contract or outside agreement.
1
In Diamond eon (Manufacturing) Ltd. v.
Toronto-Dominion Realty Co., the court held that a contract that provides that a
chattel shall not by attachment or otherwise be deemed a fixture will not resolve
the issue of chattel / fixture characterization because the purpose of annexation
must be objectively patent for all to see.

(I) Several objects have been confirmed to be chattels or fixtures: Confirmed chattels
include a statute on a plinth, a sundial on a pedestal, and a houseboat. Confirmed fixtures
include a fireplace, panelling, machines attached by nails, statutes / figures / vases / stone
garden seats where vital to the architecture of the property. In La Salle Recreations Ltd. v.
Canadian Camdex Investments Ltd., the court held that hotel wall-to-wall carpeting
constituted a fixture.

(II) Degree of annexation (Stack annexation test):

(i) If the article is resting on its own weight, it will be presumed to be a chattel. This
presumption can be rebutted if it is shown that the article was intended to be a fixture.

(ii) If the article is affixed - even slightly - to the land, it will be presumed to be a
fixture. This presumption can be rebutted if it is shown that the article was intended to be
a chattel.
Carpets: In La Salle Recreations Ltd. v. Canadian Camdex Investments Ltd., the
court held that the degree of annexation of wall-to-wall carpets is slight.
Outdoor signs: In Diamond eon (Manufacturing) Ltd. v. Toronto-Dominion Realty
Co., the court held that outdoor signs were clearly affixed to the property.

(III) Purpose of annexation (Haggerty intention test):
Permanent / occasional: In La Salle Recreations Ltd. V. Canadian Camdex
Investments Ltd., the court held that the permanence of a chattel/fixture should be
determined by its ability to serve its purpose. For example, the need to replace
hotel carpets every five years does not undermine its permanence.

1
Bruce Ziff, Principles of Property Law 4
th
ed. (Toronto: Thomson Carswell, 2006), 103
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(i) If a reasonable person would think that the purpose of the attachment is to
enhance the land, then it is a fixture.
Carpets: In La Salle Recreations Ltd. v. Canadian Camdex Investments Ltd., the
court held that the object of the annexation of hotel carpeting was the better and
more effectual use of the building as a hotel because unfinished flooring is
unsuitable for a hotel and annexation was reasonably required for the
completion of the floors as such.
Outdoor signs: In Diamond eon (Manufacturing) Ltd. v. Toronto-Dominion Realty
Co., the court held that the object of the annexation of outdoor signs was for the
enhancement of the land.

(ii) If a reasonable person would think that the purpose of the attachment is for the
better use of the chattel, then it is a chattel.
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d. Removal of tenant fixtures:

(I) Determining fixation: La Salle fixtures test (c).

(II) Removal of tenant fixtures test: In Frank Georges Island Investments Ltd. v.
Ocean Farmers Ltd. 563 A.P.R. 201, the court established the basic principles governing
the removal of tenant fixtures:

(i) Several considerations about the nature of the fixture make it removable:
Trade: Trade fixtures are defined as Things which tenant has fixed to the
freehold for the purposes of trade or manufacture.
Ornamentation
Domestic convenience

(ii) Several contextual considerations of the fixture may forfeit the right of
removability:
Removal would cause material injury or irreparable damage to the property
Contractual provisions that preclude removal
Untimely attempt to remove: In Carabin v. Offman (1998), 222 A.P.R. 407, the
court confirmed that a tenants only right was to make use of those
improvements during the term of the lease and remove them before the end of that
term if he wished to have any further benefit from them.

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e. (Intellectual Property) Copyright: In Theberge v. Galeria d'Art du Petit
Champlain inc., the Court affirmed that the Copyright Act "is usually presented as a
balance between promoting the public interest in the encouragement and dissemination of
works of the arts and intellect and obtaining a just reward for the creator."

(I) Criteria for copyright (LDMA, performances, sound recordings, signals)

(i) Originality: Originates from an author and is not copied from another work;
Product of an authors exercise of skill and judgement; Efforts must be more than trivial.

(ii) Fixation: Copyright exists as soon as the work is fixated in some reasonably
permanent form; Low threshold to add certainty.

(iii) Connection to Canada: Work created in Canada; Work created by a Canadian;
Work created by a citizen or ordinary resident of a country that is a signatory to a variety
of international treaties (e.g. Berne, Rome, WTO).

(II) Copyright infringement tests

(i) Infringement of economic rights:
Note: In Theberge v. Galeria d'Art du Petit Champlain inc., the Court held that
Theberge attempted to assert "a moral right in the guise of an economic right."

Has there been copying / a reproduction with a public element?
o Reproduction: In Theberge v. Galeria d'Art du Petit Champlain inc., the
Court held that "Division cannot logically be characterized as
reproduction." Consequently, the transfer of the ink from a legally
obtained reproduction poster to a canvas does not constitute a reproduction
because "The process began with a single poster and ended with a single
poster."
Has the infringer taken a substantial part of the work?
Has there been consent?

(ii) Infringement of moral rights: There are three enforceable moral rights that are
intended to prevent prejudice to the honour and reputation of the author:

Attribution: The right of attribution allows authors to ensure taht their names are
attached to the work. In Theberge v. Galeria d'Art du Petit Champlain inc., the
Court noted that "the respondent could have asserted a moral right to be publicly
identified with his artistic work" in response to the elimination of his signature.
Integrity: The right of integrity provides an author with a further degree of control
over the work after it is sold. In Snow v. The Eaton Centre Ltd. (1982), 70 C.P.R.
(2d) 105 (Ont.H.C.), the court held that decorating Snow's legally acquired artistic
work with Christmas ornaments constituted a violation of the integrity of his
work.
Association / disassociation:
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(III) Defences:

(i) Fair dealing involves the legitimate use of a work for private study, research,
criticism, review, or news reporting. In making its determination a court will look to:
The purpose of the dealing
The character and amount of dealing
Whether or not there were alternatives to copying
The nature and effect of the copying on the work

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f. (Intellectual property) Trademarks: A trademark is a word or words, symbol, or
design that is used to distinguish one person's good or services from another's in the
marketplace. In Mattel Inc. v. 3894207 Canada Inc., the Court stated that trademarks are
a guarantee of origin and inferentially, an assurance to the consumer that the quality will
be what he or she has come to associate with a particular trademark.

(I) Criteria for trademark:

(i) A trademark is a word and/or symbol that is used in relation to goods or services
and distinguishes a traders goods or services from that of another.

(ii) Prior or actual use of a mark is necessary for both common law and statutory
protection. In the absence of use, a registered mark can be expunged pursuant to Trade-
Marks Act s.45(3).

(iii) There are three types of trademark: Ordinary marks: Words/symbols that
distinguish the goods or services of a specific firm; Certification marks: Goods/services
that meet a standard set by a governing organization; and Distinguishing guises: Shaping
of wares or their containers, or a mode of wrapping or packaging wares.

(II) Trademark infringement tests

(i) Infringement: Violation of the exclusive right to use the mark.
Passing off:
o Reputation (or goodwill) acquired by the plaintiff in the mark
o Misrepresentation leading to confusion (see trademark confusion at ii),
as determined either by an expert witness or survey data.
o Damage to the plaintiff caused by confusion, such as decrease in sales or
damage to reputation through confusion.

(ii) Confusion: In opposition proceedings under the Trade-Marks Opposition Board,
the applicant must establish on a balance of probabilities that there is no likelihood of
trademark confusion, which arises if it is likely in all the surrounding circumstances
that the prospective purchaser will be led to the mistaken inference "that the wares or
services associated with those trade-marks are manufactured, sold, leased, hired or
performed by the same person, whether or not the wares or services are of the same
general class." There are five non-exhaustive factors to be considered under the notion of
surrounding circumstances:
The inherent distinctiveness of the TM/N and the extent to which they have
become known
The length of time the TM/N have been in use
The nature of the wares, services, or business
The nature of the trade
The degree of resemblance between the TM/N in appearance or sound and the
ideas suggested by then.

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(iii) Dilution: Use of a similar mark that may tarnish the marks image or reduce its
drawing power.

(III) Defences

(i) No defence of lack of intent to trespass: Since trademarks are deemed to be
proprietary rights in accordance with Edelsten v. Edelsten (1863), 1 De G.J. & S. 185, 46
E.R. 72, if the respondent's activities constitute trespass on the marketing territory
established by the trademark, then it would be no defence for the respondent that it did
not intend to trespass.

(IV) Remedies: Available remedies include (a) damages resulting from the
infringement of the exclusive right, (b) accounting of profits after unjust enrichment, (c)
injunction, and (d) delivering up the infringing materials.

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g. (Intellectual property) Patents:

(I) Criteria for patent: Patent law protects inventions (defined as "any new and useful
art, process, machine, manufacture or composition of matter") and "new and useful
improvements of existing inventions." There are four criteria for patentability:

(i) Patentable subject matter: Patents cover the embodiment of an idea and therefore
do not apply to newly discovered natural law, scientific principle, or abstract theory (e.g.
business methods and higher life forms in Canada).

(ii) Novelty: The invention must not have been previously disclosed and become
known or otherwise made available to the public.

(iii) Non-obvious: The item for which a patent is sought cannot be immediately
obvious to technicians fluent in similar technologies. In Apotex Inc. v. Sanofi-Synthelabo
Canada Inc. (2008) SCC 61, the Court held that the proper approach to non-obviousness
is to ask if a technician would "in the light of the state of the art and of common general
knowledge as at the claimed date of invention, have come directly and without difficulty
to the solution taught by the patent."

(iv) Utility: Precludes products that have no useful function or that do not work.

(v) Registration requirements: Title page, abstract, disclosure, claims

(II) Patent infringement test:

(i) Claims construction: Construe the patent to determine whether it is valid and to
determine the scope of the monopoly (based on the claims in the patent):
Validity: Criteria for patent (see I)
Scope: The reasonable applicability (e.g. patent on vacuum vs. car)

(ii) If the patent is valid, the court will determine whether the infringing product
"appropriates the substance "(pith and marrow). If the defendant uses the "essential
teachings of the claims compared to the prior art," then there is infringement. In
Monsanto Canada Inc. v. Schmeiser [2004] 1 S.C.R. 902, 2004 SCC 34, the Court held
that t basic principle in determining whether the defendant has used a patented
invention is whether the inventor has been deprived, in whole or in part, directly or
indirectly, of the full enjoyment of the monopoly conferred by the patent.

(III) Defences:

(i) Experimental and non-commercial uses are not infringements

(IV) Remedies: Available remedies include (a) damages resulting from the
infringement of the exclusive right, (b) accounting of profits after unjust enrichment, (c)
injunction, and (d) delivering up the infringing materials.
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2. Possession

Trespass can be defined as an unjustifiable interference with possession.

a. Possession: Possession can create proprietary interests. However, possession is
relative and may play a role in the extinguishment of property rights. Possession has two
main factors and can be remedied equitably based on fairness:

(I) Intent

(II) Control: The requisite extent of control is determined by the context: the unique
nature and the custom and practice of the conduct in question:

(i) Full control: According to Grays rule in Popov v. Hayashi, the actor must retain
control of the [item] after incidental contact with people and things.
Baseballs: In Popov v. Hayashi, the court held that Popov did not achieve full
possession because has not established by a preponderance of evidence that he
would have retained control of the ball after all momentum ceased and after any
incidental contact with people or objects.

(ii) Partial control (constructive possession): Cases that recognize possession before
full control is achieved require that (a) the actor be actively and ably engaged in efforts
to establish complete control and (b) such efforts must be significant and they must be
reasonably calculated to result in [full control] at some point in the near future.
Hunting and fishing wild animals: In Pierson v. Post 3 Caines 175 (S.C.N.Y.,
1805), the Court affirmed that a wild beast mortally wounded, or greatly
maimed, cannot be fairly intercepted by another, whilst the pursuit of the person
inflicting the wound continues.

(III) Pre-possessory interests: In Popov v. Hayashi, the court held that possession is a
process that culminates in full possession. A pre-possessory right is a qualified right to
possession which can support a cause of action for conversion. A legally recognizable
pre-possessory right can be established on two factors: (a) significant but incomplete
steps to achieve possession of a piece of abandoned personal property and (b) the effort is
interrupted by unlawful acts of others.

(IV) Fairness: In Popov v. Hayashi, the court held that where more than one party has
a valid claim to a single piece of property, the court will recognize an undivided interest
in the property in proportion to the strength of the claim [tenants in common, see
B.2.d.].

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b. Acquisition of title by adverse possession (squatters): Title can be ousted by others
that are able to make a claim for a possessory title. The onus of establishing title by
possession is on the claimant (squatter). In Pflug and Pflug v. Collins, [1952] O.R. 519,
the court developed the Pflug squatters test for attempting to establish a possessory title:

(I) Actual possession for the statutory period by the squatter or through those whom
the squatter claims.

(II) Such possession was with the intention of excluding from possession the owner or
persons entitled to possession. In Re St. Clair Beach Estates Ltd. v. MacDonald et al.
(1974) 5 O.R. (2d) 482, the court held that the test for exclusion is whether the squatter
precluded the owner from making the use of the property that s/he wanted to make of it.
In Keefer v. Arillota, the court held that the historical owners of the contested strip
and the historical squatters had an amicable relationship.

(III) Concurrent discontinuance of possession for the statutory period by the owners
and all others entitled to possession. In Great Western R. Co. v. Lutz (1881), 32 U.C.C.P.
166, the court held that the constructive possession which a legal owner has of the whole
property is not ousted simply because he is not in actual possession of the whole in
other words, possession of the part is possession of the whole if the possessor is the legal
owner.
In Keefer v. Arillota, the court held that the historical owners of the contested strip
of land did not discontinue their possession of any party of the strip of land other
than the portion at the rear occupied by the [squatters] garage. Thus while the
garage has passed to the squatters, the rest of the strip was in use.

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c. Relativity of title (finders):

(I) Abandonment and loss: Finder of a chattel only acquires rights to it where the
chattel has been abandoned or lost.

(i) Finders/occupiers have the greatest claim when the chattel has been abandoned.
There are two components to an abandonment:
Intention to relinquish the title or an indifference to the fate of the chattel
A sufficient act of divestment
In Chappell v. United States 119 F.Supp.2d 1013 (U.S. Dist. Ct., W.D. Missouri, 2000),
the Court held that money found in a cars gas tank during a criminal investigation was
(a) sufficiently divested (b) in pursuit of an intent to relinquish the chattel. However, the
government has been on constructive notice since the 1970s that drug criminals often
stash items in the car, thereby undermining their claim.

(ii) Loss: Loss is distinguished from mislaid. No rights are acquired f the chattel was
mislaid, and it is instead treated as being in the finders custody until the true owner
materializes.

(II) Rights of the finder: Finders acquire a possessory interests, but not full owernship
of the chattel: a finder [of abandoned property] acquires title good against the world,
except those with a continuing antecedent claim i.e. a previous possessor. In Parker v.
British Airways Board, the Court established five rights and obligations of the finder:
The finder of a chattel acquires no rights over it unless (a) it has been abandoned
or lost and (b) he takes it into his care and control.
The finder of a chattel acquires very limited rights over it if he takes it into his
care and control with dishonest intent or in the course of trespassing.
Subject to the foregoing and to point 4 below, a finder of a chattel acquires a
right to keep it against all but the true owner or those in a position to claim
through the true owner or one who can assert a prior right to keep the chattel
which was subsisting at the time when the finder took the chattel into his care and
control.
o Rationale: In Parker v. British Airways Board, the Court state that lost
property would be subject to a free-for-all in which the physically weakest
would go to the wall in the absence of this rule.
o In Armory v. Delamirie (1722), the Court held that the jeweller clearly
had no rights in relation to the jewel immediate before the boy found it
and any rights which he acquired stemmed from the boy himself.
Unless otherwise agreed, any servant or agent who finds a chattel in the course
of his employment or agency and not wholly incidentally or collaterally thereto
and who takes it into his care and control does so on behalf of his employer or
principal who acquires a finders rights to the exclusion of those of the actual
finder. Different rules apply to collateral finding and contractors.
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A person having a finders rights has an obligation to take such measures as in
all the circumstances are reasonable to acquaint the true owner of the finding and
present whereabouts of the chattel and to care for it meanwhile.
o In Bridges v. Hawkesworth (1851), the Court held that by giving the item
to the Hawkesworth to advertise to the original owner, Bridges was
reasonably exercising his duty to acquaint without abandoning the
property.
o In Parker v. British Airways Board, the Court held that by giving the item
to BAB on conditions, Parker was reasonably exercising his duty to
acquaint without abandoning the property.

(III) Rights of the occupier: Constructive possession seems to be relevant, but it
doesnt arise automatically there must be (a) a manifest intention to exercise control
and (b) reasonable efforts in pursuit of this intention. In Parker v. British Airways Board,
the Court established four rights and liabilities of the occupier:
An occupier of land has rights superior to those of a finder over chattels in or
attached to that land and an occupier of a building has similar rights in respect of
chattels attached to that building, whether in either case the occupier is aware of
the presence of the chattel. In Elwes v. Briggs Gas (1886), the Court held that
chattels lodged in the land should be treated as analogous to fixtures. However,
this would appear to confer a right to the occupier greater than the original owner.
An occupier of a building has rights superior to those of a finder over chattels
upon or in, but not attached to, that building if, but only if, before the chattel is
found, he has manifested an intention to exercise control over the building and
the things which may be upon it or in it.
o In Bridges v. Hawkesworth (1851), the Court held that Hawkesworth
never had custody and protection of the item prior to Bridges discovery.
o In Parker v. British Airways Board, the Court held that BAB was required
to manifest their intention explicitly and failed to do so, indicated that in
certain contexts an intention can be inferred (e.g. bank vaults, private
homes)
An occupier who manifests an intention to exercise control is under an
obligation to take such measures as in all the circumstances are reasonable to
ensure that lost chattels are found and, upon their being found to acquaint the
true owner of the finding and to care for the chattels meanwhile
o In Parker v. British Airways Board, [1982] 1 Q.B. 1004, the Court held
that while BAB exercised control over individuals and particular types of
prohibited items, it did not take the necessary steps to regularly search for
such non-prohibited items.
An occupier of a chattel, e.g. a ship is to be treated as if he were the occupier
of a building

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d. Transfer of titles through delivery (gifts): A gift is a gratuitous transfer of the
ownership of property. It is one of two primary means of passing title (bargain/sale and
gift). Gifts are distinguished by an absence of consideration. In effect, a valid gift
transfers title from the donor to the donee. Once the requirements for a gratuitous transfer
have been satisfied, the transfer is irrevocable. Equity will not perfect an imperfect gift.

(I) Inter vivos (IV) gifts: The plaintiff bears the onus of establishing the necessary
elements of a gift of chattels effected by delivery. There are three essential elements of a
valid gift of a chattel IV:

(i) Intention to gift: A voluntary intention to make a gift concurrent with delivery.
The donor must have the capacity to give the gift the ability to comprehend the legal
effect of the gift. Intention may be proved in two ways:
Words of gift usually accompany gifts and serve to evince (a) the intention and
delineate (b) the object, (c) timing, and (d) extent of the intended benefaction.
o In Re Ridgeway (1885) 15 QB 447, the court held that referring to port as
Toms port or Alices port constituted words of gift.
Unusual circumstances may be imagined where other means fulfil those functions
where the purported donee proves the existence of a present, unequivocal
donative intention, attended by the requisite certainty as to object, extent, and
whether the gift would take immediate effect (Nolan v. Nolan & Anor).

(ii) Intention to accept: Intention to express on the part of the donee to accept the gift.
Intention to accept requires (a) an understanding of the transaction and (b) a desire to
accept the title. There is a presumption of acceptance.

(iii) Delivery is the legal act essential to complete the gift by transferring both
possession and ownership of the chattel to the donee.
Action: In The National Trustees Executors and Agency Company Limited v.
O;Hea [1905] 29 VLR 815, the court stated that It would be dangerous to relax a
rule which requires some visible act as an essential, when the only other essential
is that certain words should be spoken. In Nolan v. Nolan & Anor, the court held
that while some cases of common establishments suggest that more relaxed rules
should apply, maintaining the requirement of an act may forestall litigation.
There are five types of valid acts of delivery:
o Substitution / declaration of trust: A declaration that the donor will be held
on trust for the donee will be binding.
o Actual delivery: Manual or physical transfer of the goods.
In Re Ridgeway (1885) 15 QB 447, the court held that there was
no delivery because the port remained within the fathers
possession in the cellar.
In Re Cole (1964), the court held that there was no attempt by the
husband to give up control to his wife.
In Re Bayoff Estate, the court held that the transfer of the keys but
not the paperwork for a safety deposit box does not constitute
sufficient delivery for IV.
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o Constructive delivery: Relevant considerations are (a) whether the donor
retained the means of control and (b) whether all that can be done has been
done to divest title in favour of the donee.
Where the nature or bulk of the goods renders manual delivery
impossible or impractical, acts falling short of manual delivery
have been held sufficient to signal a change in possession. For
example, transferring a key without retaining a duplicate
constitutes constructive delivery.
Where the donee is already in possession or has custody of the
chattels. In Stoneham v. Stoneham [1919] 1 Ch 149, the court held
that where possession precedes manifested intention, a further
delivery or a change of possession is unnecessary.
o Symbolic delivery: Where goods are virtually incapable of being
transferred manually, some representation of the goods may be handed
over, rather than effective means of control (e.g. a photograph of the items
may suffice). However, it is unlikely to be appropriate (mention on exam).
o Deed: Physical delivery can be replaced by transfer with a deed. Deeds are
almost certainly more effective than delivering the object.
Authorization: In Nolan v. Nolan & Anor, the court held that there was no valid
delivery because Unauthorized appropriation by the purported donee could not
constitute a valid delivery on any view.

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(II) Donatio Mortis Causa (DMC) gifts: In Canada, DMC does not apply to land. In
Rushka v. Tuba (1986), 50 Sask. R. 152 (Sask. Q.B.), the Court held that there were three
essential elements of a donation mortis causa gift:

(i) Impending death from an existing peril: The gift must be made in contemplation
(though not expectation) of impending death. There is no need to be in a state of extremis
or sudden peril. However, it is unclear whether the test is subjective, objective, or both.

(ii) Delivery or constructive delivery of the subject matter: In Kooner v. Kooner 100
D.L.R. (3d) 76, 1979 786 (S.C.), the Court held that the standard for transfer of control is
lower in DMC cases than IV cases, such that a transfer of partial control that would not
validate an IV gift could validate a DMC gift. See c.(I)(iii).
Terminating donor control: In Re Bayoff Estate and Re Lillingston [1952] 2 All
E.R. 184 (Ch.D.), the court held that the transfer of the keys but not the
paperwork for a safety deposit box constitutes sufficient delivery for DMC (but
not IV) because the transfer of the keys deprived the owner of further direct
access.

(iii) The gift is only to take effect upon death and will revert to the donor should
he/she recover.
Presence of wills: In Re Bayoff Estate, the court held that by his words [Bayoff]
indicated that he wished Simard to have immediate ownership of the contents of
the safety deposit box and did not suggest that the gift was to take effect only if
he died because he was simultaneously writing a will, thereby dividing issues
between those that take effect upon death (in the will) and those that take effect
immediately.

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(III) Perfecting gifts: Equity will not perfect an incomplete gift.
Deed: In appropriate cases a gift may be perfected by deed without actual
delivery.
Death / executor: In Strong v Bird (1874) All E.R. Rep. 230 (Eng. Ch. Div.), the
court held that a gift if left unfulfilled will be enforced if (a) the intention to make
gift continued until the death of the owner and (b) the donee is named and later
becomes an executor under the will of the donor, since executors assume control
which is a functional equivalent to delivery.
o In Re Bayoff Estate, the court held that Simards status as the executrix
permitted her to activate the exception.

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B. Shared ownership

1. Creation and presumptions of shared ownership

a. Personal property / personalty: There is a common law presumption to create a
JT for personal property. In Re Bancroft, the Court held that a bequest to a number of
persons without any accompanying explanatory words creates a [JT]. The presumption
can be rebutted in two ways:
Words of severance: see 3.a.(I).
Equity is contrary to the principle of survivorship. In cases of (a) two or more
people advancing money on a mortgage, (b) partnership property, or (c) purchase
prices being provided unequally, equity holds that TIC will be established based
on contribution.

b. Land: There is a statutory presumption in favour of TIC for land (Conveyancing
and Law of Property Act, s.13): applies to land transferred by any letters patent,
assurance or will ... in fee simple or for any less estate but not to personalty or
partnership property (Partnership Act s.23). The presumption can be rebutted where (a)
an intention to create a joint tenancy can be evidenced with either strict language (i.e. "To
A and B as joint tenants") or similar language supported by contextual factors (i.e. "To A
and B jointly") and (b) the four unities are present.

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2. Types of shared ownership:

a. Tenancy by the entireties: Based on the doctrine of marital unity. No longer
relevant in light of modern legislation and social norms.

b. Coparcenary: Where at common law or by custom land descended on intestacy
not, as usually was the case, to a single heir but to two or more persons. No longer
relevant in light of s.14 of the Estates Administration Act, which holds that this situation
is ruled by tenants in common.

c. Joint tenancy (JT): Two or more people together own the same interest. This
fundamental concept gives rise to two main features:

(I). Four unities established by Blackstone must all be present for the creation and
continuation of a JT:

(i) Unity of possession: Each joint tenant is entitled, concurrently with the other joint
tenants, to possession of the whole of the land that is the subject of the joint tenancy.

(ii) Unity of interest: Each joint tenant must be the same de juris (not de facto)
interest in terms of their extent, nature, and duration (see Freehold interests at C.1).
Different future interests will defeat unity of interest.

(iii) Unity of title: Each joint tenants title must be derived from the same document or
occurrence.

(iv) Unity of time: Each joint tenants title must vest at the same time. However, the
unity of time is not required for a joint tenancy created by (a) a will or (b) a conveyance
employing a use.

(II). Right of survivorship: Where one of the joint tenants dies, their interest passes to
the other joint tenants to the exclusion of the descendants of the joint tenants.

d. Tenancy in common (TIC): Express creation requires certain words: Failed
attempts to create a joint tenancy will create a TIC. Operation of law (e.g. CLPA s.14).
Where a joint tenancy has been severed.

(I). Unity of possession: The only unity that is required is unity of possession. Each
joint tenant is entitled, concurrently with the other joint tenants, to possession of the
whole of the land that is the subject of the joint tenancy.

(II). Passes to estate (will or intestacy)

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3. Severance: There are two general connotations of 'severance' relevant to
distinguishing JT and TIC:

a. Words of severance: In the determination of whether a JT or a TIC has been
initiated, words of severance are taken to denote an intention to create a TIC: equally,
amongst and even jointly (depending on context) are seen as words of severance.
In Re Bancroft, the Court held that words of severance (specifically "in equal
shares per stirpes") in a clause relating to one contingency could not be read into
a clause relating to a different contingency.

b. The transformation or conversion of a JT to a TIC by one of four general means
whereby either the unities of title or interest or the right of survivorship is destroyed. In
Re Denny [1947] .J.R. 1029 and Flynn v. Flynn, [1930] I.R. 337, the court held that the
onus to demonstrate that there has been a severance lies on those who so contend.

(I) Unilateral action (common law):

(i) Transfer to a third party: If A and B are JT and A conveys to C, then B and C are
TIC (no time, title). Likewise, if A, B, and C are JT and C conveys to D, then A and B
continue to hold as JT while D holds a 1/3 interest as a TIC.
DMC: In Re Sorensen & Sorensen, the court held that an attempted gift of land
was insufficient because (a) there was no effective delivery and (b) there is no
DMC in respect of land in Canada.

(ii) Transfer to joint tenant: If A and B are JT and A conveys to B, then B has sole
title.

(iii) Declaration of trust: Declarations of trust are sufficient delivery for an IV gift.
In Re Sorensen & Sorensen, the court held that "the only act that severed the titles
was the gift to the son by declaration of trust of the wife of the beneficial interest
in the titles."

(iv) Lease for a term of years to a third party: In Cowper v. Fletcher (1865), 122 E.R.
1270, the court held that a lease for a term of years by one joint tenant severs the tenancy.
If A and B are JT and A conveys to C for a term of years, B and C and subsequently A
and B are TIC.
In Re Sorensen & Sorensen, the court held that the lease arrangement was
insufficient: did not interfere with the chief characteristic of a joint tenancy, viz
survivorship

(v) Insufficient: Several unilateral actions have been deemed to be insufficient for
severance:
Granting an encumbrance, such as an easement
Lease for a term other than years: In Re Sorensen & Sorensen, the court held that
the lease arrangement for the lifetime of the wife was insufficient because it did
not interfere with the chief characteristic of a joint tenancy, viz survivorship: (a)
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death of wife: lease terminates, husband retains full ownership; (b) death of
husband: husband retains full ownership and lease merges in the fee.
Discontinued action by one party: In Munroe v. Carlson, [1976] 1 W.W.R. 248,
the court held that the bringing of an action alone for partition where the action is
subsequently discontinued is not sufficient o constitute a severance.
Mortgage: In Re Sorensen & Sorensen, the court held that mortgage was
insufficient because it did not interfere with the right of survivorship: upon the
death of either the husband or wife the security would not continue
Will: In Sorenson, the Court held that the execution of the will was insufficient:
execution of a will cannot sever a [JT] because the right of survivorship
activates before execution.
Unilateral declarations: In Re Sorensen & Sorensen, the court recognized that "the
weight of authority is that the declaration by one party of an intention to sever
alone without any other act an without acceptance by the other joint tenants does
not sever the tenancy."

(II) Mutual agreement (equity): Need not be an enforceable agreement. The aim is to
prevent people from reneging on a commitment to give up their right to survivorship.
Subsequent conduct: In Re Sorensen & Sorensen, the court held that Mrs.
Sorensen's "subsequent conduct" (e.g. making alternative attempts at severance)
prevents the inference that the "Settlement Agreement" which agreed to the
division of the title to the matrimonial home (ostensibly undermining the unity of
title) constituted severance.

(i) Insufficient: Several mutual agreements have been deemed to be insufficient for
severance (unless there is an agreement to divide the proceeds of sale):
Sale or lease by all of the joint owners: A sale or lease by all of the joint owners
does not result in severance because this arrangement is compatible with the
continuation of joint ownership in relation to the proceeds of sale (e.g. If A and B
are JT and sell to C and D, JT may continue in the profit earned by A and B as
well as the land under C and D).
Agreement to sell in the future

(III) Course of dealing (equity): Any course of dealing sufficient to intimate that the
interests of all were mutually treated as constituting tenancy in common.
Mutual or joint wills: In Szabo v. Boros (1967), 60 W.W.R. 754, the court held
that the right of survivorship is eliminated where all joint tenants leave the
property to each other in their wills as a course of dealing.
Failed negotiations: Even failed negotiations can lead to a finding of severance,
although this seems harsh and counter-intuitive.

(IV) Operation of law (statute and common law):

(i) General legal exceptions: Examples include bankruptcy, lawful execution,
murder, and the Ontario Family Law Act.

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(ii) Judicial order of partition or sale: Where co-owners cannot agree on how to
govern the real estate, then, at the demand of any one or more co-owners, the co-
ownership relationship will be ended by court order and the co-owned property will be
partitioned or sold:
Partition: Property divided up, with discrete portions of the fee granted
exclusively to each co-owner by the court in accordance with the co-owners
proper co-ownership interests therein.
o In Re Sorensen & Sorensen, the court held that "the bringing of an action
alone for partition where the action is subsequently discontinued is not
sufficient o constitute a severance."
Sale: When the property does not lend itself to partitioning, court can order the
co-owned property to be sold, with the net proceeds from the sale distributed
amongst the co-owners in their proper proportions.
o In Popov v. Hayashi, the court held that "both plaintiff and defendant have
an equal and undivided interest in the ball" and "the ball must be sold and
the proceeds divided equally between the parties."

4. Rights and responsibilities of share ownership: Courts have broad jurisdiction to
make just and fair allowance allowances on termination of co-ownership. There are two
main categories for repayment:

a. Accounting for benefits of occupation:

(I) Occupation rent as of right: where one co-owner unlawfully ousts the other.
Actual ouster: Physically locked out
Constructive ouster: Conduct of co-tenant deprives enjoyment

(II) Occupation rent by consent: where there is an agreement that the occupying co-
owner will pay occupation rent to the non-occupying co-owner.

(III) Entitlement to a just share: An action for an accounting may be brought by a
joint tenant or tenant in common against a co-tenant for receiving more than the co-
tenants just share (Courts of Justice Act s. 122(2))
Note: Only applies to benefits from the land itself (e.g. mining, rents), not things
on the land (e.g. farming, business venture profits).

(IV) Waste: Use of the land which would unreasonably diminish the value of the
property (see Waste at C.2.b.II).

(V) Equitable accounting for improvements made and encumbrances suffered
(appears to be restricted to partition and sale or analogous proceedings).

b. Expenditures relating to property: Generally, tenants are liable for capital and
current expenditures in proportion to their share of the property (e.g. mortgage payments,
improvements, etc.)
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C. Freehold estates

1. Freehold interests: Whether an interest is vested or contingent is a matter of legal
characterization by the courts. The courts have developed several presumptions that
influence the characterization process:
Presumption against intestacy: While it is possible that a testator would intend to
die partially intestate, courts generally presume that the purpose of creating a will
is to avoid the rules of intestacy. Where there is vagueness or ambiguity (i.e. two
or more possible constructions), the courts will favour a construction that the
whole estate is to be disposed of by the will.
Construction in favour of early vesting: In McKeen Estate v. McKeen Estate, the
court reaffirmed that The courts are inclined to hold gift vested rather than
contingent wherever the words used and the will as a whole admit of a
construction that will result in early vesting.
o In McKeen Estate v. McKeen Estate, the court held that there was
sufficient ambiguity or about to activate the construction in favour of
early vesting because the phrase if they are both alive at the time of the
death of the survivor of me and my said wife made it was unclear
whether the gifts to the sisters were contingent on their surviving the wife.
Browne v. Moody postponement rule: In Browne v. Moody, [1936] O.R. 422
(P.C.), the court held that a gift is prima facie vested if the postponement is to
allow for a [LE].
o In McKeen Estate v. McKeen Estate, the court held the reason for
postponement of the distribution to the testators sisters is simply that a
[LE] was previously given to the widow.

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a. Vested interests are present rights to present or future enjoyment.
Vested in interest: Present right to future enjoyment.
Vested in possession: Present right to present enjoyment (seisin).
Note: The right of reverter produced by determinable interests (see b.II.ii) is a
vested interest.

(II) Condition subsequent (now until): Present right to present and future enjoyment
(vested in interest and possession), but subject to the possibility of divesting on the
occurrence of a specified event.

(i) Defeasible interests are produced by are conditions subsequent that brings an
estate to a premature end (where the terminating event is external to the limitation a
divided clause from the grant). The grantor retains a right / power of re-entry, which is
a contingent interest because termination is not inevitable.
Magic words: provided that, on condition that, but if, if it happens that
Effects of invalidity: Invalidity destroys the condition and produces absolute
ownership.
o In Re Czykalenko (1983), the court held that a provision that gives the
trustee absolute discretion over the distribution of the gift was a condition
subsequent that was invalid for uncertainty.

(ii) Determinable interests are produced by a condition subsequent that brings the
estate to its natural end (where the terminating event is an integral and necessary part of
the formula from which the size of the interest is to be ascertained). The grantor retains a
right of reverter, which is a vested interest because termination is inevitable (see a).
Magic words: while, during, as long as, until, whilst
Effects of invalidity: Invalidity destroys the whole transfer of gift because the
condition and property are integral.

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b. Contingent interests are future rights that are dependent upon the occurrence of an
event. Very small differences in the language can produce vastly different results for
invalidity.

(I) Conditions precedent (not until): No present right to present or future
enjoyment; The condition must be met before the interest vests.
Magic words: when, at a given age, upon, shall attain
Effects of invalidity / impossibility: Usually destroys the whole transfer (see 4.a.I).

o Cy-pres doctrine (see public policy at 4.b.III): Where conditions
precedent in trusts for valid charitable purpose[s] are rendered
impossible /invalid after some time, the cy-pres doctrine permits courts to
revise the terms so as to carry out the settlors intention as nearly as
possible. In order to achieve charitable status, a trust must (a) have a valid
charitable purpose (i.e. poverty relief, education, religion, or other benefits
to community), (b) be wholly and exclusively charitable in purpose, and
(c) promote the public benefit.
In Re Leonard Foundation Trust, the court held that It is
appropriate and only reasonable that the Court should apply the cy-
pres doctrine and invoke its inherent jurisdiction to propound a
scheme that will bring the [extremely racist] trust into accord with
public policy.

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2. The common law recognizes three forms of freehold estate:

a. Fee tail (FT): To A, and thereafter to the heirs of his body. The FT was an
interest in land impressed with a special rule of descent: it passed to the heirs of the body
of the first taker until the particular line of descent became extinct. The FT is effectively a
series of LEs. The initial grantee is the tenant in possession and his/her heirs are the
tenants in tail. For all intents and purposes the FT no longer exists in Canada.

b. Life estate (LE): To A for As life or to A for Bs life. The LE grants full use
of the property for the duration of the measuring life or cestui que vie (CQV). In
attempting to characterize conveyances, the court focuses on the intention of the
conveyance magic words of LE conveyance are not necessary.
Where the CQV is the grantor, the LE is an estate pur sa vie (PSV).
Where the CQV is the grantee or one of several grantees, the LE is an estate pur
autre vie (PAV).
o If the grantor predeceases the grantee / CQV, the grantees / CQVs
interest ends and the FS returns to grantor.
o If the grantee / CQV predeceases the grantor, the property will devolve
with the rest of the grantees / CQVs estate for the period of the grantees
/ CQVs life.

(I) Power of encroachment: LEs can be conveyed with a power to encroach upon
capital for proper maintenance.

(II) Waste: Technically, waste consists of any act which alters the nature of the land,
whether for the better or for the worse. Its object is to prevent a limited owner, such as a
tenant for life or years, despoiling the land to the prejudice of those in reversion or
remainder. Remedy is to bring an action for damages or to apply for an injunction. Types
of waste:
Ameliorating waste: alterations that improve the land. Counter-intuitively, this
may be actionable especially if it changes the character of the land but
generally is not.
Permissive waste: failure to conduct repairs and to do other things that ought to be
done. Unless a duty to repair is contained in the document granting the interest
(grant), a life tenant cannot be compelled to repair.
Voluntary waste: the doing of that which ought not to be done, which damages the
land. Extends to cutting timber, but not non-timber, trees; opening new mines, but
not exploiting old ones.
Equitable waste: grant may render the life tenant unimpeachable for waste, but
liability remains for flagrant voluntary waste and wanton acts of destruction.
Equitable waste is that which a prudent man would not do in the management of
his own property.

(III) Heating, repairs, and insurance:

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c. Fee simple (FS): To A and his heirs. The FS is the closest approximation to
absolute ownership in the Canadian tenurial property law regime: property is held
exclusively and is in principle transferrable for an infinite period, though if there are no
heirs the interest escheat to the Crown in accordance with the Escheats Act.

(I) Power of disposition: FS includes a general power of disposition IV that is not
possible under LE. In Re Taylor, the court stated that The interest more closely
approximates an absolute interest because he may exercise for himself one of the
incidents of ownership; namely, the right to freely alienate during his lifetime.

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3. Conveyance: Conveyances can be either inter vivos (IV) or testamentary. It often
falls to the courts to characterize conveyances.

a. Rules of interpretation: There are different rules of interpreting IV and
testamentary conveyances:

(I) IV conveyances: Under the Ontario Conveyancing and Law of Property Act s.5,
words of limitation are not necessary to transfer a FS IV where there are any other
words sufficiently indicating the limitation intended but only if an as far as a contrary
intention does not appear from the conveyance.

(II) Testamentary conveyances: Under the Ontario Succession Law Reform Act s.26, a
grant in a will of a FS is presumed even absent words of limitation except when a
contrary intention appears by the will. The court has developed a number of principles
of testamentary interpretation:
Whole will and intention: The leading principle of construction is that the
testators intention is collected from a consideration of the whole will taken in
connection with any evidence properly admissible and the meaning of the will and
of every part of it is determined according to that intention.
o Dominant > subsidiary intention: In Unger v. Gossen, the court held that
the testators dominant intention or overriding concern was to benefit
her nephews and her subsidiary intention was to avoid benefitting a
communist state; the dominant intention overrode the condition that the
nephews immigrate to Canada because (a) it represented a subsidiary
intention that (b) was no longer relevant, (c) the testator did not know that
it was legally impossible, and (d) the testator was mentally incapable of
amending the will between drafting and death.
o Presumed intention to gift where condition precedent is impossible: In Re
MacDonald (1971), 18 D.L.R. (3d) 521 (Ont. H.C.), the court held that
where a testator grants a bequest subject to a condition which is
impossible, the dominant intent must be the gift, subject to the possibility
of rebuttal where it can be shown that the principal concern of the testator
was the condition.
Shellys case: The rule in Shelleys case stipulates that a LE conveyance that
extends the grant to the grantees heirs is effectively a FS conveyance.
Doctrine of repugnancy: In Re Walker, the court affirmed that The Court has
then to endeavour to give such effect to the wishes of the testator as is legally
possible, by ascertaining which party of the testamentary intention predominates
and by giving effect to it, rejecting the subordinate intention as being repugnant to
the dominant intention.
o Logical inconsistency: Repugnancy analysis requires some logical
inconsistency between competing options. In Re Taylor, the court refused
to apply a repugnancy analysis because There is no logical inconsistency
requiring the court to choose between two alternative intentions which are
opposed.

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b. Characterizing conveyances:

(I) LE vs. FS

(i) Power of disposition: In Re Jones [1898] 1 Ch. 438, the court held that where a
LE conveyance is coupled with a power of disposition IV, the donee takes an absolute
interest.
In Re Walker, the court held that the testamentary provision that sought to convey
any undisposed property after a LE conveyance to the deceaseds wife was by
negative implication a conveyance of the power to dispose and consequently
effected a FS conveyance.

(ii) Power of encroachment: In Re Taylor, the court held that Where the testator uses
plain language to indicate an intention to give a [LE] only, that interest is not enlarged to
an absolute interest because the testator has declared that the donee is to have the right in
her discretion to encroach on capital for her proper maintenance.
Depletion: In Re Taylor, the court held that the possibility that encroachment may
deplete the property and consequently deprive the remainderman does not create a
FS.

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4. Impossibility and invalidity: The courts may declare conditions precedent or
conditions subsequent to be impossible or invalid, thereby altering the character of the
conveyance (see 1).

a. Impossibility: A condition is impossible if it cannot be fulfilled.
In McKinnon v. Lundy (1893), the court held that Where a condition precedent
becomes impossible of performance, and though there be no default or laches on
the part of the devisee himself, the device fails [W]here the condition is
impossible in its creation, if the condition is precedent, the devise being of real
estate is itself void.

(I) Realty: If the condition cannot be performed, the gift fails.

(II) Personalty: If the condition was the sole motive and cannot be performed, the gift
fails. However, if the condition was not the sole motive for the conveyance, then:

(i) No conditions, absolute transfer: The impossible conditions will be disregarded
and an absolute interest conveyed in one of three scenarios:
The grantor knew that the conditions are impossible to perform (see the
presumption in Re MacDonald at 3.a.II).
The acts of the grantor cause the impossibility.
Performance of the conditions would be contrary to law.
o In Unger v. Gossen, the court held that the testators dominant intention or
overriding concern was to benefit her nephews and her subsidiary
intention was to avoid benefitting a communist state; the dominant
intention overrode the condition that the nephews immigrate to Canada
because (a) it represented a subsidiary intention that (b) was no longer
relevant, (c) the testator did not know that it was legally impossible, and
(d) the testator was mentally incapable of amending the will between
drafting and death.

(ii) No conditions, no transfer: The impossibility of the condition voids the transfer
in one of two conditions:
The impossibility was unknown to the grantor.
The impossibility arose subsequently due to an act of God, operation of law, or an
act of the grantor.
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b. Invalidity: There are four main grounds for invalidity:

(I) Uncertainty: If the condition is too imprecise, it will be invalid for uncertainty. A
different standard applies depending on whether the condition is precedent or subsequent:
Condition precedent (lower standard): The court must know with certainty
whether a particular claimant has me the condition: condition must be capable of
being given some plausible meaning.
Condition subsequent (higher standard): The court must know in advance of the
even what will bring the grantees interest to an end: in Claverling v. Ellis, the
court held that the donee must be able to see precisely and distinctly from the
outset of those actions that will lead to a loss of the interest. Conditions
subsequent are more vulnerable to invalidity based on uncertainty.
The different standards can lead to problematic results because it does not give effect to
the testators intention, perhaps on the basis of a minor difference in language.

There are two types of uncertainty:

(i) Evidential uncertainty: has the grantor expressed intent clearly enough?

(ii) Conceptual uncertainty: are the words in the condition too vague for the courts to
apply?

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(II) Breach of the legal remainder rules: According to Ziff, the legal remainder
rules have ceased to have contemporary significance. While the rules do not generally
apply to wills, equitable transfers, or trusts, the fourth rule sometimes applies to wills and
all rules apply to IV conveyances.

(i) Remainder after a FS is invalid.

(ii) Remainder must be supported by a prior freehold estate because there can be no
abeyance of seisin.
E.g. From A to C if she attains 21 is invalid because there is no seisin prior to
the condition precedent but From A to B for life, remainder to C if she attains
21 is valid because B has seisin until death with a possible reverter to A if B dies
before the condition precedent.

(iii) Remainder must await the end of the prior estate.
E.g. To B for LE on condition that B does not marry C but if B marries C,
remainder to D in FS is invalid because the FS cuts down the defeasible LE but
To B for LE until B marries C, remainder to D in FS is valid because Bs
marriage is a determinable limit on Bs LE.

(iv) Remainder must vest during the prior estate or at the moment that it determines.
A remainder is initially valid but may not survive it if fails to vest on the termination of
the prior estate (the wait and see rule).
E.g. Re Crow (1984): To R and W for life, remainder to their children. If R and
W have no children, remainder to their nieces or nephews. Testator died in 1926
and both R and W have no nieces and nephews at death. However, some nieces
and nephews appeared after Ws death. The court held that Ws share went back
into the residue.

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(III) Public policy: Conditions to conveyances cannot violate public policy. Courts
have looked to widespread or generally-accepted principles as a guide to defining the
public policy (e.g. constitutional principles, legislation, international treaties).
Note: The Charter of Rights and Freedoms is not binding in property matters
within the public sphere.
CLPA s.22 stipulates that: Every covenant made that restricts the sale,
ownership, occupation or use of land because of the race, creed, colour,
nationality, ancestry or place of origin of any person is void and of no effect.

(i) Cy-pres doctrine: Where conditions precedent in trusts for valid charitable
purpose[s] are rendered impossible /invalid after some time, the cy-pres doctrine permits
courts to revise the terms so as to carry out the settlors intention as nearly as possible. In
order to achieve charitable status, a trust must (a) have a valid charitable purpose (i.e.
poverty relief, education, religion, or other benefits to community), (b) be wholly and
exclusively charitable in purpose, and (c) promote the public benefit.
In Re Leonard Foundation Trust, the court held that It is appropriate and only
reasonable that the Court should apply the cy-pres doctrine and invoke its inherent
jurisdiction to propound a scheme that will bring the [extremely racist] trust into
accord with public policy.

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(IV) Rules against perpetuities (RAP): [N]o interest is good unless it must vest, if at
all, not later than 21 years after some life in being who was alive or en ventre sa mere at
the creation of the interest. The rule does not apply to vested interests only interests
that will vest at some point in the future. In determining whether the time is too remote,
consideration will be given to the possible rather than the probable. There are four
elements to the RAP:

(i) The RAP applies to contingent remainders and executory interests not to vested
interests.

(ii) The date of the creation of the interest is dependent upon the nature of the
instrument containing the gift.
Testamentary: The perpetuity period begins with the death of the testator.
IV transfer: The perpetuity period begins from the date the instrument takes
effect.

(iii) To constitute a life or lives in being, four conditions must be met:
1. Measuring lives must be human.
2. The person(s) must be living at the date of the creation of the interest (see ii).
3. A group of persons, if used, must not be capable of increasing in number after the
date of creation of the interest (see ii). E.g. Is it possible that more people will
enter the group more than 21 years after the creation of the interest (see ii)? There
is a presumption of fertility:
Fertile octogenarian: E.g. to A [80 yrs] for life, then As children for their
lives, then to As grandchildren who attain age 21. Only A is a life in
being because she could theoretically have more children.
Precocious toddler: E.g. to A for life, then for such of As grandchildren
living at my death or born five years thereafter who shall attain age 21.
Only A is a life in being; A could have a child that has its own child in less
than five years, thereby increasing the number of grandchildren.
Perpetuities Act, s.7(1)(a) provides that it shall be presumed, (i) that a
male is able to have a child at the age of fourteen years or over, but not
under that age, and (ii) that a female is able to have a child at the age of
twelve years or over, but not under that age or over the age of fifty-five
years
To maximize the perpetuity period, a royal lives clause may be added to
the instrument vesting of some interests are postponed until 21 years
after the death of the last lineal descendent of a named sovereign living at
the date of the creation of the interest.
4. A group of persons, if used, must be ascertainable at the date of creation of the
interest (see ii). The group designated cannot be so numerous so at to be
unascertainable.

(iv) If, at the commencement of the perpetuity period, it is theoretically possible to
construct circumstances in which vesting would occur outside of the period, then the
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RAP is infringed. However, Ontario has adopted a wait and see policy under the
Perpetuities Act:
s.3: No limitation creating a contingent interest in property shall be treated as or
declared to be invalid as violating the rule against perpetuities by reason only of
the fact that there is a possibility of such interest vesting beyond the perpetuity
period.
s.4: (1) Every contingent interest in property that is capable of vesting within or
beyond the perpetuity period is presumptively valid until actual events establish,
(a) that the interest is incapable of vesting within the perpetuity period, in which
case the interest...shall be treated as void or declared to be void; or (b) that the
interest is incapable of vesting beyond the perpetuity period, in which case the
interest shall be treated as valid or declared to be valid
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5. Public policy and restraints on alienation

Not all restraints on alienation are legitimate. The standard for restraint validity is
whether the condition takes away the whole power of alienation substantially. The
standard is flexible and may be breached if one, two, or all three of the types of restraint
have been imposed:

a. Forfeiture

b. Promissory

c. Disabling restraints: Disabling restraints prohibit alienation in one of three ways:

(I) Mode of transfer:

(II) Class of recipients:
First refusal: Pre-emptive rights of first refusal are generally not objectionable.
However, pre-emptive rights of first refusal combined with a fixed price that does
not change to reflect changed circumstances are generally objectionable.
o In Re Rosher (1884), 26 Ch. D. 801, the court held that a restraint holding
that a son could not sell the land without first offering it to his mother for
$3000 despite the actual value of $15,000 was an invalid restraint on
alienation and the transfer was valid. Note: Had the mother simply been
given the right of first refusal at the prevailing market rate, there probably
would have been no difficulty.

(III) Time period of transfers:

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D. Trusts: A means of holing property pursuant to which the legal and equitable
interests in the same property are held by two different entities or persons. The common
law only recognizes the legal interests (LI) while equity protects the holder of the
equitable interest (EI). LI remains with the trustee while the beneficial interest / EI is
held by the beneficiary. The trustee is subject to equitable obligations consistent with the
position they were put in vis--vis the beneficiary. Where the trustee does not act in the
best interests of the beneficiary or breaches their obligations, the beneficiary can take
action against the trustee.
Use, confidence, and trust are synonymous.
Executed vs. executory trusts: Executed trusts are those in which the settlor has
specified the objects of the trust/ executory trusts are those in which some further
action must be taken before the objects [].
Bare vs. simple trusts: Bare trust arises where the settlor can reclaim his or her
property. A simple trust is any other trust that is not a bare trust.
Higher vs. lower sense: In the higher sense, a trust refers to an abstract fiduciary
duty. The lower sense refers to ordinary trusts.

1. Actors: Trusts have three main actors:

a. Settlor / feoffor: The person who creates the trust. If a trust is created in a will,
then the settlor is the testator.

b. Beneficiary / cestui[] : The person that holds the equitable title to the property. []

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c. Trustee / feoffee: The person that holds legal title to the property and owes certain
obligations to the beneficiary. Failure to exercise the powers or fulfil duties may be a
breach of trust which will in turn give rise to an equitable remedy for the purpose of
putting the beneficiary in the position they should have been.

(I) Fiduciary relationship: Trustee must act in the best interests of the beneficiary,
placing the beneficiarys interests ahead of its own interest. There are three characteristics
of a fiduciary relationship:
The fiduciary has scope for the exercise of some discretion, because they are
vested with powers.
The fiduciary can exercise their discretion so as to affect the beneficiarys legal or
practical interests.
The fiduciary must exercise their discretion in the interests of the beneficiary.

(II) Trustee Act duties: The TA imposes several duties: duty to safeguard, preserve
and enhance the assets of the trust; duty to distribute the trust assets to the beneficiaries;
obligation to act impartially; duty to keep accounts ready for inspection by the
beneficiaries; duty to provide information.

(III) Agency: An agent has express or implied authority to act on behalf of another
person the principal. Distinct from a fiduciary relationship:
An agency relationship is personal whereas trust relationship is based on property.
Agents generally do not have title to property while trustee must have title to the
trust property
Agency arises by agreement between parties

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2. Types of trusts: There are two broad types of trusts:

a. Express trusts: Trusts that are created intentionally.

(I) Types of express trusts: There are two main types of express trusts:
A trust for persons sets out the individuals by name or class who are to enjoy trust
property.
A trust for purposes sets out a task that the creator of the trust wishes the trustee
to perform through use of the trust property

(II) Requirements: There are four main requirements for express trusts:

(i) Capacity: Must be of legal age; must have sufficient mental capacity; must have a
property interest that can constitute the trust (see iii).

(ii) Three certainties:
Certainty of intention to create the trust: The settlor must have manifested an
unequivocal intention to create a trust. There must be an intention that the trustee
is placed under and obligation to hold property on trust for the benefit of some
person(s) / purpose(s).
o Certainty is a matter of construction (i.e. no magic words).
o Trusts of real property must be in writing. Trusts of personalty need not be
in writing.
Certainty of subject matter:
o A trust must have property that can be clearly identified as its subject
matter. Property must be either ascertained or ascertainable:
Ascertained: Where property is a fixed amount or a specific piece
of property.
Ascertainable: Where a method by which the subject-matter can be
identified is available from the terms of the trust or otherwise.
o The terms must define the portion each beneficiary is to receive or must
vest the discretion to decide the allocation in the trustee. The trust must set
out the property which each beneficiary is entitled to share.
In some circumstances, courts will rely on the equitable maxim
that equity is equality to resolve any uncertainty.
o There must be certainty of objects. The beneficiaries must be described in
terms clear enough that the trustees obligations can be properly
discharged:
With fixed trusts, the trustee has no discretion as to distribution, so
the beneficiaries must be listed or readily identifiable as a class
With discretionary trusts, the trustee has discretion as to
distribution, but certainty is necessary as to the criteria for
distribution

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(iii) Constituted: Trust is constituted when title to the property is conveyed to the
trustee. Once constituted, the trust cannot be undone by the settlor unless there is a power
of revocation built into the trust. There are two types of conveyance:
Direct transfer: e.g. Unto and to the use of A on trust for B
Automatic: e.g. I hold this property on trust for B

(iv) Observe formalities: Certain technical requirements, often statutory, must be
satisfied or the trust will be void. These vary depending on whether the trust is inter vivos
or testamentary. These formalities are often less rigid in the context of the trust because it
is an equitable remedy, and any court is going to exercise its equitable jurisdiction in
determining whether or not a trust exists.

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b. Trusts created by operation of law: There are two types of trusts created by
operation of law:

(I) Resulting trusts: In Pecore v Pecore, the SCC held that [a] resulting trust arises
when title to property is on one partys name, but that party, because he or she is a
fiduciary or gave no value for the property, is under an obligation to return it to the
original title owner. The property then springs back to the original owner. The principle
difference between resulting trusts and other trusts relates to intention: Concerned with
presumptions about the intention of the title holder.
E.g. The resulting trust arises as soon as an equitable obligation on B to hold
property upon trust for C. B may need to obtain a court judgement if C resists Bs
request for transfer of the property but judgements merely declare the trust and do
not cause it to arise.

(i) Resulting trusts can be created in three ways:
(Automatic) Where a trustee holds property under the terms of an express trust
and the trust fails in whole or in part.
o E.g. From A unto and to the use of B to the use of C until she turns 21.
If C turns 21 or dies before 21, there will be property left over held by B
on resulting trust for A.
(Presumed) Where A purchases property and title is taken in the name of B, or
jointly in the names of both A and B.
(Presumed) Where A voluntarily and gratuitously transfer property into the
name of B or into the joint names of A and B.

(ii) Presumptions:
Presumption of resulting trust: Equity prefers bargains to gift. Gratuitous transfers
are treated with suspicion. Another area where a presumption of resulting trust
applies is in respect of the common intention resulting trust. This will arise in
cases where the parties expressly or implicitly shared an intention that property
held in the name of B was to be shared by A and B. Note that, as with almost all
presumptions, the presumption of resulting trust can be rebutted if sufficient
evidence is provided
o E.g. If A purchases property with her own money but places LI in the
hands of B, equity will require that A retain a beneficial interest .
Presumption of advancement: In some circumstances, a resulting trust is not
presumed; rather, there is a presumption of an intention to benefit a particular
individual. The presumption arises by the beneficiarys membership of a
particular class of people. Despite equitys reluctance to perfect imperfect gifts,
this is one area in which the law aims to give effect to beneficent intentions.

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(II) Constructive trust: Constructive trustees are distinct: constructive trustees are no
subject to the full list of obligations the main obligation is usually re-conveyance of any
ill-gotten gains. There are two types of constructive trusts in Canada:

(i) Good conscience constructive trusts: In Soulous v Korkontzilas, the court
developed a four-point test for GCCTs:
The defendant must have been under an equitable obligation in relation to the
activities giving rise to the assets in his hands.
The assets in the hands of the defendant must be shown to have resulted from
deemed or actual agency activities of the defendant in breach of his equitable
obligation to the defendant.
The plaintiff must show a legitimate reason for seeking a property remedy either
personal or related to the need to ensure that others like the defendant remain
faithful to their duties.
There must be no factors which would render imposition of constructive trust
unjust in all the circumstances of the case (e.g. the interests of intervening
creditors must be protected).

(i.i) Institutional constructive trust (ICT): ICTs are considered to be a GCCT. ICTs
will be applied to property obtained by a wrongful act of the defendant, most notably
property obtained as a result of a breach of fiduciary duties. When a defendant has
obtained property by wrongful act, a constructive trust may be imposed in favour of the
beneficiary.
See Attorney General for Hong Kong v Reid (1994).
The existence of a fiduciary relationship imposes significant restraints on the
actions of the fiduciary (absent informed consent of the principal). The standard
may be breached even if the fiduciary acts in good faith.

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(ii) Remedial constructive trusts: A constructive trust that may be imposed as a
remedy to unjust enrichment. A pre-existing fiduciary relationship is unnecessary: [t]he
imposition of a constructive trust can both recognize and create a property right (Lac
Minerals v International Corona Resources). However, on the facts of a particular case,
other forms of remedy might be more appropriate.
Unjust enrichment occurs where there the plaintiff proves the first three and the
defendant fails to prove the fourth:
o Enrichment: Has the defendant been enriched in some way as a result of
the plaintiffs actions?
o Deprivation: Did the receipt of benefits by the defendant result from a
deprivation of the plaintiff?
o Absence of juristic reason: Is there any juristic reason for the enrichment?
The plaintiff must show that no juristic reason from an established
category exists to deny recovery. Established categories include: contracts,
donative intent (gift), or other valid common law, equitable, or statutory
obligation. A defence may fall into an established category or may be a
special reason that does not form an established category or simply fail.
o Reasonable expectation / public policy: The defendant attempts to raise
issues to rebut unjust enrichment.
The traditional scope of unjust enrichment has been to provide remedies either for
(1) an unintended transfer or (2) a total failure of consideration.
o E.g. Accidentally paying a bill twice the second payment is unjust
enrichment of Rogers.
Note: See Peter v Beblow for additional rules.

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E. Priority and registration

1. Common law priorities: The common law determined priority by looking for
seisin and documents.

a. 1-LI 2-LI: Qui prior est tempore, porior est jure (Prior) First in time is first in
right. E.g.: If B transfers to C where A is the rightful owner,
Caveat emptor: Burden is on C to ensure that good title is being passed.

b. 1-EI 2-LI: Equitys darling A bona fide purchaser for value without notice
will defeat prior EI. E.g. A agrees to sell to B (creating an EI) but subsequently conveys
to C; if C had no notice of Bs prior interest, Cs claim prevails.
Any fraud on Cs part will defeat their claim: She who comes to Equity must come
with clean hands
C must give adequate consideration: Equity will not assist a volunteer

c. 1-LI 2-EI: Nemo dat quod non habet (Nemo) One cannot give that which one
does not have. However, this is not an absolute rule. E.g. If A purports to sell to C but
had already sold to B, then B is the actual owner. Generally, the LI prevails, but fraud or
gross negligence on the part of the holder of the legal interest might cause the equitable
claim to prevail
In Northern Counties v Whipp, the court held that a 1-LI prevailed over a 2-EI on
the grounds that a 2-EI will prevail only where the owner of the 1-LI (or her
agent) has assisted or connived at the fraud which has led to the creation of the
subsequent equitable estate but not because of mere carelessness or want of
prudence on the part of the legal owner.

d. 1-EI 2-EI: Qui prior est tempore, porior est jure (Prior) First in time is first in
right. However, anyone relying on an equitable interest must have clean hands, so any
fraudulent or unfair behaviour will relegate one of the equitable interests.
Exception for 1-EI fraud: In CIBC Mortgage Corp v Quassa, the court recognized
that courts have refused to recognize a priority under this rule where there is
evidence of fraud or negligence on the part of the mortgagee claiming a prior
interest. However, Logothetis was not in a position to take advantage of this
exception for four reasons.

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2. Registration of title: The failure to register a property interest alters the priorities
that would otherwise govern that entitlement. A person registering without proper notice
of a prior interest can claim priority over it.
E.g. A grants an easement to B but does not register it. A sells the land to C. Does
C have to respect Bs right of easement?
Validity: Where a Torrens system is in place, the risk is transferred to the owner
of the property. At common law, the risk was borne by the purchaser who had to
ensure that good title was being passed. Under Torrens, adverse possession is less
important.

a. Torrens System: The Torrens System in Ontario is governed by three main
principles:
Title search: In Ontario, a title search is required. The search need only extend 40
years, unless there has not been any conveyances in that period.

(I) Indefeasibility: Registration acts like a curtain and behind it nothing is open to
question. There are two main type of indefeasibility:

(i) Immediate indefeasibility: The curtain drops on registration.

(ii) Deferred indefeasibility: The curtain drops when Y passes the interest to Z
Hyper-deferred indefeasibility (Torrens): dealt directly with the fraudster or had a
reasonable opportunity to suspect fraud

(II) Mirror: Register is a mirror image of the interests relating to a particular piece of
land.

(III) Insurance: Those who are wrongfully deprived of interests in land should be
compensated from a general fund.

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b. Ranking in registration: Most disputes will be settled by the registrars rules.
However, some instances may require ranking. There are three possible means of
determining whose interest prevails:

(I) Race: Priorities follow the order of registration (not creation of the interest).
Notice of existing interests is irrelevant.

(II) Notice: A subsequent transaction is void if made with knowledge of a prior
transaction. Registration would constitute actual notice in and of itself, but notice may be
present without registration.

(III) Race-notice: Priority is accorded to the party who takes an interest without notice
of a prior interest and who registers before the prior interest. Registration constitutes
actual notice.
RA s.71: Priority of registration prevails unless before the prior registration there
has been actual notice of the prior instrument by the person claiming under the
prior registration.

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Aboriginal law

1. Constitutional foundation of aboriginal rights

Section 35: Purpose: (a) [T]o extend constitutional protection to the practices, customs
and traditions central to the distinctive culture of Aboriginal societies prior to contact
with Europeans (R v Cote). (b) Reconciliation: the aboriginal rights recognized and
affirmed...must be directed towards the reconciliation of the pre-existence of aboriginal
societies with the sovereignty of the Crown (Van der Peet)
(1) The existing aboriginal and treaty rights of the aboriginal peoples of Canada are
hereby recognized and affirmed
Scope: The claimed right must exist as of 1982, but the phrase existing
Aboriginal rights must be interpreted flexibly so as to permit their evolution over
time (R v Sparrow).
Definition: Definition of Aboriginal rights:
o an activity must be an element of a practice, custom or tradition integral to
the distinctive culture of the aboriginal group claiming the right
o the perspective of native peoples should be taken into account, but framed
in terms cognizable to the Canadian legal and constitutional structure
(2) In this Act, aboriginal peoples of Canada includes the Indian, Inuit and Mtis
peoples of Canada

Section 35.1
The government of Canada and the provincial governments are committed to the
principle that, before any amendment is made (a) a constitutional conference
composed of the Prime Minister of Canada and the first ministers of the provinces, will
be convened by the Prime Minister of Canada; and (b) the Prime Minister of Canada will
invite representatives of the aboriginal peoples of Canada to participate in the discussions
on that item

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2. Proving and characterizing aboriginal rights

Van der Peet test for aboriginal rights:

a. Identify the nature of the claimed right
Court must consider the nature of the action which has occurred, the nature of the
regulation, statute or government action impugned, and the practice, custom or
tradition relied upon to support the right
The right must be of central significance to the aboriginal society in question
that it was one of the things that truly made the society what it was
Must be independently significant, not incidental
Need not be unique

b. Establish continuity with the practices, customs and traditions that existed prior
to contact with European society
Conclusive evidence unnecessary, but evidence has to demonstrate which aspects
of the community have their origins pre-contact
The courts must not undervalue the evidence presented by Aboriginal claimants
simply because that evidence does not conform precisely with the evidentiary
standards applied in other contexts
Whether a practice, custom or tradition continued post-contact and was adapted
due to contact with Europeans, is not relevant (unless it arose solely as a
response to European influences)

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3. Interference with aboriginal rights

a. Extinguishment: recognition of the sovereignty / power of the Crown. Whether
there was a clear and plain intention on the part of the sovereign with respect to a
specific right. There are two means of extinguishing title:

(I) Surrender to the Crown

(II) A unilateral state action that manifests a "clear and plain intention" to extinguish
title. Only the Federal government can extinguish title; however, it is doubtful that they
could do so after the CCRF.

(i) Sparrow: the Sovereigns intention must be clear and plain if it is to extinguish
an Aboriginal right

(ii) Adams: must be a clear and plain intention with respect to a specific right
E.g. in Adams what might have been a clear and plain intention to extinguish
Aboriginal title in a fishing area was not a clear and plain intention to extinguish
an Aboriginal right to fish for food

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b. Infringement: rights that are recognized and affirmed but that are not absolute.
In Delgamuukw (1997), the court held that infringement must be:

(I) Infringement must be in furtherance of a legislative objective that is compelling
and substantial.

(i) Infringement must be related to one of the objectives underlying s. 35(1):
recognition and reconciliation.
Reconciliation is achieved both by affirming aboriginal rights, but also limiting
them in accordance with the legitimate objectives of the wider community.
The courts have recognized several legitimate objectives for infringing aboriginal rights:
conserving fisheries; economic and regional fairness; participation by non-Aboriginal
groups. The courts have also recognized several legitimate objectives for infringing
aboriginal title: development of agriculture, forestry, mining and hydroelectric power;
general economic development of the BC interior; protection of the environment;
infrastructure; settlement of foreign populations. The courts have rejected several
illegitimate objectives for infringing aboriginal title (e.g. protecting sports fishing).

(II) Infringement must be consistent with the special fiduciary relationship between
the Crown and Aboriginal people. This will vary according to context.

(i) Sparrow: The fiduciary relationship does not demand that aboriginal interests
always take priority. Where they are not accorded priority, several factors must be met:
Minimal impairment
Fair compensation for expropriation
Consultation: The more serious the interference, the more consultation required.
In Haida Nation v British Columbia, the SCC held that the Crown has a duty to
consult:
o Scope: The scope of the duty is proportionate to a preliminary assessment
of the strength of the case supporting the existence of the right or title. It
also depends on the seriousness of the potential adverse effect upon the
right or title claimed." Meaningful consultation appropriate to the
circumstances. [R]egard may be had to the procedural safeguards of
natural justice mandated by administrative law. The duty has a spectrum
of obligations:
Weak claim: right to notice, disclosure, discussion.
Strong prima facie claim: deep consultation aimed at satisfactory
interim solution with submissions, formal participation, and
provision of written reasons.
o Accommodation: The effect of good faith consultation may result in a duty
to accommodate. Does not give Aboriginal groups a veto over what can be
done with land pending final proof. Accommodation is seeking
compromise in an attempt to harmonize conflicting interests and move
down path to reconciliation. Not the duty to agree.

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(ii) Degree of scrutiny: The degree of scrutiny required in the discharge of fiduciary
duty will vary depending on the nature of the aboriginal right at issue:
Limited right (e.g. fish for ceremonial purposes)
Unlimited right / title (e.g. fish for commercial purposes): The government is
simply required to take Aboriginal rights into account in a respectful manner.
Appropriate accommodations include:
o Participation in development
o Conferring fee simples for agriculture
o Conferring leases and licences for forestry and mining
o Reducing economic barriers to participation (e.g. lower fees)

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4 Nature and content of aboriginal rights

a. Sui generis nature:

(I) Inalienability: It cannot be transferred, sold or surrendered to anyone other than
the Crown. This does no render Aboriginal title merely a license or usufruct: it simply
means that it does not have the attribute of alienability.

(II) Source: Aboriginal title arises from prior occupation of Canada by aboriginal
peoples. Common law estates in land could only arise after the settlement of Canada;
thus, by Crown grant and not by transfer from First Nations.

(III) Communal: Collective right held by community.

b. Content:

(I) Aboriginal title encompasses the right to exclusive use and occupation of the land
held pursuant to that title for a variety of purposes, which need not be aspects of those
Aboriginal practices, customs and traditions which are integral to distinctive Aboriginal
cultures (i.e. the uses to which the land can be put need not be intimately related to
Aboriginal culture: to require that would be to place First Nations in a legal
straitjacket).

(II) Those protected uses must not be irreconcilable with the nature of the groups
attachment or "special bond" to that land.

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5. Proving and characterizing aboriginal title

Delgamuuk test for aboriginal title:

a. The land must have been occupied prior to sovereignty.

(I) Occupancy: Aboriginal and common law perspectives are relevant in determining
occupancy:

(i) Aboriginal perspective: "If, at the time of sovereignty, an aboriginal society had
laws in relation to land, those laws would be relevant to establishing the occupation of
lands which are the subject of a claim."

(ii) Common law perspective: There must be "occupation sufficient to ground title."
The courts have recognized several types of occupation proving title:
Construction of dwellings
Enclosure / cultivation of land
Regular use of defined tracts of land for specified activities

(II) Prior to sovereignty: Sovereignty is the appropriate point for determining title for
three reasons:
Aboriginal title is a burden on the Crown's underlying title. However, the Crown
did not gain this title until it asserted sovereignty.
There is no difficulty in distinguishing between traditional activities and those
influenced by contact with Europeans: occupation is enough to ground title.
The date of sovereignty is more certain than the date of first contact.

b. If present occupation is relied on as proof of occupation pre-sovereignty, there
must be a continuity between present and pre-sovereignty occupation.
The fact that the nature of occupation has changed does not undermine the claim.
It is not necessary that continuity be unbroken.

c. At sovereignty, that occupation must be exclusive. Occupation short of exclusivity
can create aboriginal rights - but not aboriginal title. Aboriginal and common law
perspectives are relevant in determining exclusivity:

(I) Aboriginal perspective:
Intention and attempts to control territory will be sufficient.
Trespass by other aboriginal groups will not undermine the claim.

(II) Common law perspective: "premium is placed on the factual reality of
occupation."

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Theories of property law

A. The Concept of Property and Property Rights

Property is a legal construct, an enforceable claim of a person to some use or benefit of
something. It is a collection of rights over things enforceable against others and
enforcement implies state machinery and consequently a legal aspect.

Property is a right rather than a thing because it: (a) applies very broadly to many
different items (tangible and intangible), (b) has a wide range of enforcement
mechanisms, and (c) many people can hold an interest in the same object.

Hofeldian analysis of legal relationships (jural opposites, jural correlatives): A useful way
to think about rights and obligations, chiefly applicable to private law.
Right: The term rights tends to be used indiscriminately to cover what in a given
case may be a liberty, a power, or an immunity, rather than a right in its strictest
sense.
Duty: That which one ought or ought not to do
No right: No single term available to express this conception (e.g. if X has a
liberty to enter, Y has a no right to prevent X from doing so)
Liberty: The absence of a restrictive duty.
Power: Legal ability, a power to effect a particular change of legal relations
Liability: Arises from the exercise of a power (altering the legal relation)
Disability: simply the antonym of power.
Immunity: Ones freedom from the legal power or control of another as regards
some legal relation.
Munzer argues that Hohfelds vocabulary has no serious rival of its kind in intellectual
clarity. However, the concepts may no be distinct, complete, irreducible, or exhaustive.

There are several categories of property law:
Real property (rights to land)
Corporeal: interests capable of being held in possession (e.g. freehold
estates in land)
Incorporeal: interest not capable of being possessed (e.g. easement or
right of way over land)
Personal property (rights to things other than land)
Tangible property rights: include the right to possession of some thing,
also known as choses in possession
Intangible property rights: do not include the right to the possession of
some thing, also known as choses in action
Real action (plaintiff entitled to return of the property)
Personal action / chattels (plaintiff entitled to compensation

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Nominalismvs. formalismviews on defining property
See commentary on Yanner
Essentialismvs. bundle views on defining property
See commentary on Moore.

Reception of legal systems
Reception imports all of the English law in place at the time, statutory and
common law (insofar as they are applicable).
Settlement: settlers bring with them the law of the settling country. Settlement
classification entailed the automatic reception of English law.
o These rules of settlement apply in disregard of the presence of Aboriginal
peoples. According to colonial law, the principle of terra nullis applied:
the land being settled was unoccupied. The territory was not recognized
as belonging to another political entity.
Several justifications existed:
The original habitants did not possess political rights or
underlying title that required recognition by the colonizers
Religious grounds
Racist evolutionary distinction between civilized and
uncivilized cultures.
The Royal Proclamation. 1763: Aboriginal peoples had a right to
use and occupy their land, and no settlement could be undertaken
of that land until Aboriginal rights had to be surrendered. In
implementing the new treaty obligations of the Crown, existing
treaties and compacts with the Aboriginal nations were sacred and
inviolable.
Common law doctrine of aboriginal rights: Aboriginal laws remain
the place unless ousted by the common law or statute. Aboriginal
legal orders are (a) not static and (b) evolve to deal with
contemporary legal issues.
Conquest: the law of the conquered people remained in place except to the extent
necessary to establish and operate the governmental institutions of colonial rule or
until specifically changed.
o Quebec constitutes a conquest.
The Royal Proclamation, 1763: Set out the boundaries of the
newly-acquired province of Quebec, abolished French law, and
placed Quebec under British rule.
Quebec Act 1774: Laws made pursuant to the Proclamation relative
to the Civil Government and administration of justice in the
province were revoked and made void. Restored the pre-conquest
French civil law as the law existed in Quebec.
Consequently, the property law in Quebec is governed by the Civil
Code, not by common law. There is in practice much convergence
between the common law and civil law, but the systems are
distinct.

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Colonial law:
o Statutes ex proprio vigore: Applied to the whole Empire. Could only be
repealed by Westminster (until the 1931 Westminster). These were
imperial law, but there was a presumption (which remains today) against
the extra-territorial application of law.
o Regular statutes: Because Canada was considered settled, British laws
came with the settlers. But to put the matter beyond doubt, provincial
legislatures specifically adopted British laws. Generally the adoption
statutes provided that British laws had to be suitable to the circumstances
in Canada; otherwise, they would not carry over.
o Common law: Subject to suitability and was often included in the general
statutes adopting English law.
Purpose of reception
o Instrumental reasons: flexibility; avoids consequences of selectivity;
continuity
o Normative reasons: principles of fundamental justice

Constitution: Division of Powers
Each level of government is prohibited from enacting laws whose dominant
characteristic (pith and substance) falls within the legislative scope of the other
level of government.
Section 92(13): property and civil rights in the province
o Not very broad
o Most aspects of property law we study fall under provincial jurisdiction
o Property law varies from province to province
Section 91(2): trade and commerce; POGG
Shared authority: Both levels of government can and do assert jurisdiction over
other areas which are no expressly allocated (environment)

Hierarchy of Protections
Constitutional protection
Legislative protection
o Rules of Statutory Interpretation
o Compensation provisions
o Criminal law
Common law protection
o Tort
o Expropriation
International law
o NAFTA

Charter protections: No explicit protection for property in the Charter, but any
protection would be subject to s.1
Search and seizure (s.8)
Equality (s.15)
Fundamental freedoms (s.2)
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59

Rules of statutory interpretation
Morguard Properties v Winnipeg (1983), SCC: the courts require that, in order
to adversely affect a citizens rights the legislature must do so expressly
R v Colet (1981), SCC: any statutory provision authorizing police officers to
invade the property of others without invitation or permission would be an
encroachment on the common law rights of the property owner and in case of any
ambiguity would be subject to a strict construction in favour of the common law
rights of the owner.

Expropriation legislation
Sets out procedural guarantees to ensure that the owner receives timely notice and
a fair hearing before expropriation can be carried out.
Usually accompanied by.
Also bolstered by rules of statutory interpretation
Leiniao v Val Belair (1991), SCC: Canadian law has consistently favoured a
restrictive interpretation of statutes enabling expropriation.

Regulatory takings / de facto expropriation
Mariner Real Estate: The only question for the courts is whether the regulation
in question entitles the respondents to compensation under the Expropriation Act,
not to pass judgement on the way the legislature apportions the burdens flowing
from land use regulation.
De facto expropriation test:
o An acquisition of a beneficial interest in the property or flowing from it
and
o Removal of all reasonable uses of the property: The relevant point of view
from which reasonable uses test is applied is a reasonable contemporary
Canadian
The bundle of rights associated with ownership carries with it the possibility of
stringent land use regulation.

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B. The case for private property

Private property philosophical problems
First-order problem: Should we protect?
Second-order problem: How and what to protect?
Third-order problem: How to achieve?

1. Utilitarianism: Under the utilitarian approach, the total or average happiness of
society will be greater if resources are owned and controlled by individuals.
Bentham: life is ruled by pain and pleasure and laws should aim to achieve the
greatest good for the greatest number
Standard: society should seek to enable people to satisfy their preferences,
whatever those preferences are, to the greatest possible extent
Critiques:
o Practicability
Rests on the assumption that the fulfilment of human desire is
quantifiable.
How do we compare utility between people inter-personal
comparisons of utility are difficult
o Ethical restraints
These may be required:
A rule or action that is beneficial for a majority might lead
to extreme suffering for others
The strong preferences of utility monsters will have to be
satisfied
But if ethical restraints are allowed, utilitarianism is no longer the
criterion
o Indeterminacy
Unclear whose preferences are to count
Benthams use of security to undermine expropriation also might
determine determinacy
o Unclear implications for property
The redistribution of wealth may result in greater net societal
happiness

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2. Law and economics: The application of economic concepts to legal problems,
principally to maximize efficiency
Positive: describes the current law; Normative: provides a standard against which
legal decisions can be measured
Efficiency criterion: On either criterion, private property promotes the efficient
use of resources.
o Would a transfer be Pareto-Superior (i.e. to make at least one person better
off but leaving nobody worse off)?
o Would the transfer satisfy Kaldor-Hicks (i.e. would the beneficiaries be
able to compensate those who lost out)?
There are three factors that property law should guarantee:
o Exclusivity: Property rights are assigned to individuals exclusively
o Transferability: Permits holders of exclusive interests to transfer their
holdings freely
o Universality (of items and of holders): Include as many objects and
holders as possible in the system; no exclusion
Misunderstandings:
o Not utilitarian: although utilitarianism and welfare maximization are
often practically synonymous
o Wealth maximization:
Wealth is the value in dollars or dollar equivalents of everything in
society. It is measured by what people are willing to pay for
something, or, if they already own it, what they demand in money
to give it up.
Coercion is forbidden: voluntary transactions only, save for severe
market failures
o Posner: I do not believe that economic can compel a moral judgement.
According to Posner, wealth maximization:
Coheres better with our ethical precepts
Can more easily accommodate ethical demands, including those
for rights and corrective justice
Is more determinate than utility (look for concrete values)
Critiques of law and economics
o Is wealth maximization the only valid criterion?
o Is Kaldor-Hicks a legitimate test?
o Inequalities: the result of a system that promotes economic efficiency
above all other values, will result in inequality and may not resolve
distributional inequalities

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3. Tragedy of the commons: Hardin
Hardin worried about overpopulation, offering an arresting image
If a pasture could be grazed upon freely, then farmers would let their cattle graze
to such an extent that the pasture would be ruined
No individual farmer would have an incentive to stop grazing, so the socially-
optimal position would not be reached
Private ownersip controls the benefits and burdens of exploitation
Critiques
o Collectivizing the herd would also avert the tragedy
o Regulated common property may not suffer the same fate
o Ellickson and Ostrom: norms may emerge even in the absence of property
rights (more common in small groups)
o Privately-held property can also be exploited against the general interest.
o Tragedy of the anti-commons: Multiple owners are each endowed with the
right to exclude others from a scarce resource, and no one else has an
effective privilege of use. Governments can create too many property
rights and too many decision-makers who can block use.
Economic development can be inhibited by too much private
property
Transaction costs: too many holders
Transaction costs: too many hold-outs

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4. Freedom
Property can be empowering an enabling; it confers on owners the power to
control their own lives and shape their own destinies
Contributes to a private sphere
Where property is controlled by even a small number of private owners, there are
more opportunities to bargain than where property is controlled by the State
(Friedman)
Critiques
o Imperium: power of exclusion may curtail liberty
o Dominium: power may also be a means of exercising power over others
(Keynes: property can channel aggression; allows for harm-free
development)
o Other forms of property (communal) may promote freedom in a positive
sense; collective property might promote freedom in a negative sense.

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5. Personhood (Hegel, Green)
o Private property as intrinsically connected to personhood
o Hegel, Green saw the freedom embodied in property as ultimately
positive freedom
o Radin: to achieve proper self-development to be a person an individual
needs some control
o Critiques
Acquisitiveness may not be a good thing; affluenza
Personhood can be developed in the public sphere
Even for Hegel, property was just an aspect of personhood, not in
the be all and end all

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6. Labour: John Locke
People own their bodies, are commanded to work by God, and therefore own their
bodies
A person who has mixed their labour with a piece of land, or acquired it
legitimately from someone else has an ownership interest in the property
Limits: Spoiling and waste offend the law of nature: after use, there must be
enough and as good left in common for others
Utility: solves the second and third order levels, but this may collapse into an
argument, based on incentives, for the optimally wealth-maximization position
Critiques
o Mixing is a metaphor
o Scarcity

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7. Occupancy
First occupier should retain control over / own a thing
The effect of discovery justifies the allocation of an interest to the discoverer
Nozick: subsequent transfers are then valid as long as they are consensual
Critiques
o No normative foundation
o Inefficiency: land may not be allocated optimally and resources may be
wasted
o Inequality: permits large disparities in holdings
o Unfair

8. All of the above
o Epstein: Even with land, the origin of property rights is a mystery that no
one has been unable to unpack, at least to the satisfaction of others
o Munzer: Private property rests on justifications of utility and efficiency;
justice and equality; and labour and desert
o All of the above may be relevant to allocation

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9. Waldron:
Poverty and public property
Jeremy Waldron:
Full privatization means that homeless people cannot exist
Over-regulatinon of public space means that homeless people cannot perform
rudimentary taSKS SUCH AS COOKING OR SLEEPING
Ellickson:
Costs: chronic street nuisances or misconduct; compassion fatigue
Response: becomes a problem of land management to combat the tragedy of
common space
Suggests red / yellow / green zones as a land-management tool
Waldron: Distress at seeing people in difficult conditions is not a cost. Ethical
disapproval cannot be considered a cost.
Laissez-faire
Regulation

WHO IS YOUR DADDY?

MFD.

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CML 1108 D Property

Professor Paul Daly Fall 2010

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