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Part I - Common Law Property
PROPERTY – In law, property is the legal recognition attributed to people
with respect to a thing; i.e. a right. Blackstone defines property as:
“That sole and despotic dominion which one person claims and exercised over
the external things of the world in total exclusion of the right of any other
individual in the universe.”
Blackstone describes property not as a thing, but the exercise of a
“dominion”. This definition is limiting on the basis that it considers property
as being claimed by a single person. Also, what things can be the objects
of property? What about things internal to human conscience – like
intellectual property? The notion of total exclusion suggests that subjects
of the right are isolated; this is a claim about what we can do with things to
which we have a property right. A person does not always have sole
ownership of property, since an eminent title may exist.
Private property may be rationalized for reasons of:
 Economic maximization (“tragedy of the commons”, reward for
research and development/input of labour vs. who could use the
property to its most efficient state);
 Establishes boundaries around things, to avoid uncertainty of tender,
which could lead to violence;
 Recognition of the acquisitive nature of the human personality;
 God has recognized the fundamental nature of property;
 Private property is related to autonomy or freedom of the person.
People will express themselves through the material world – which
depends on private access over things in the world.
We have to consider the limits of the reach of the notion of property.
Some things are not property either because they are inherently
incapable or being appropriated or commodified or because they
should not be appropriated due to ethical questions. For example in
International News Services v. Associated Press, the court held that news
(the words of the newspaper) was not susceptible to appropriation under
the first category.
International News Services v. Associated Press
Reasoning: Knowledge of the facts of events in the world is not protected
by copyright law. The news lacks the element of exclusivity, which
denies the possibility of appropriation by a person. The addition of
labour and capital is not enough to make an object property.
Had the court granted an injunction in this case because news is property,
the news could be copyrighted and made exclusive. Perhaps, nothisng is
inherently incapable of appropriation; rather, the law refuses to recognize
the possibility of appropriation.
The legislature must determine whether the news represents property.
Caratun v. Caratun (1992) Ont. C.A.
Facts: A marriage breaks up, and the wife claimed that her husband’s
dental license represents part of the marital property.
Issue: Is the license property?
Held: No.
Reasoning: In order for something to be property, it must be transferable
and alienable. A license is extremely valuable, because the husband can
obtain great benefit. However, the court can award support based on
likely income and need.
The license was produced as a result of personal efforts by the licensee.
Work to be performed in future does not qualify as assets for division. The
license is worthless if not used by the licensee.
The law cannot consider the time and effort expended into obtaining the
license as part of the creation of property. Instead, it must treat potential
earnings as a result of employment as a consideration. Therefore, the
solution of a constructive trust does not work, because the license is not
property (and therefore the court required a one-time payment instead).
Rationale: A professional license does not constitute property.
The court had to find an equitable solution to the problem. The plaintiff
was entitled to compensation that included costs related to lost
opportunity. Note that courts have also held that pension is property and
therefore those assets are divisible, per Clarke v. Clarke.
Victoria Park v. Taylor (1937) Australian High Court
Facts: The owner of a racecourse claimed that his neighbours interfered
with his property right. One neighbour built stands to view the races.
Another provided commentary and another broadcast the race.
Issue: Was the course entitled to a legal remedy? Are there property
rights to a spectacle that are open to public view?
Held: No.
Reasoning: The owner made three claims to protect its property:
1. Incursion onto the claimant’s property - The viewing amounted to a
nuisance or an unlawful interference with the spectacle,
2. Taking the claimant’s property - The spectacle belongs to the
claimant and therefore, by broadcasting it, they are taking the property,
3. Misuse of the defendant’s property - The neighbours are unnatural
users of their own property to benefit from the racecourses.
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The neighbour has the prerogative to build a higher fence to make the
course more exclusive. The law could have made it exclusive by
granting the injunction. This may be problematic, by taking property
rights too far toward the protection of private interest by interfering with
what is commonly accessible.
Rationale: A person can only claim a property right to something that
is appropriable.
Analysis: Gray explains that since the spectacle was available to all
persons, it must be “common property”. The “owner” cannot exclude
others from enjoyment. MacPherson explains that common property
means that no one is excluded.1
Moore v. Regents of the University of California
We can consider the appropriateness of self-ownership and ownership of
others or parts of others. In Moore v. University of California, the plaintiff
wanted a property interest in his cell line. Moore sued under the TORT OF
CONVERSION for return of the cells or its value (but a successful claim
requires a personal right in the object taken) – Moore is deprived of the
economic rewards generated from his cell line. Moore could sue on the
basis of fiduciary obligation or tort of battery (lack of consent), but not
under conversion.
The Court of Appeal treated the cells as “objects” over which Moore had
dominion. This decision is consonant with the principle that people are in
possession over their bodies (as expressed by the common vernacular).
The Supreme Court of California held that based on Locke’s “labour
added” theory, the cell line belonged to the university. The patient loses
control over his cells once they leave his body.
Both holdings make claims to human dignity. The Supreme Court of
California held that it is an affront to human dignity to consider parts of
the human body as property. The state criminalizes possession of those
parts. There is also a danger if the courts accept the language of control
and ownership of body parts, because this imports a market-model when
people’s bodies are at issue. However, consider the case of a bloodsoaked handkerchief. Who owns the blood from a dead person? Without
recourse, a prior possessor may face an attack for that object (i.e. social
order argument).
Who can exercise a property right vs. who is entitled to exercise that right.
The person who is dead may have had a proprietary right in the blood.
Now that the person is dead, the estate would have the right. Perhaps the
state has a right to the property, or the owners of the handkerchiefs (since
This can lead to the “tragedy of the commons.” If property belongs to everyone
and no one, then no one will regulate the resource and the property can become
overused. Whereas “state property” is held on behalf of everyone but is regulated
by the state. This can avoid the tragedy, if property is properly managed.
1
they exercise their labour or initiative to acquire a right, or through
artificial accession).
Classification of Property
The major division in the common law, as in the civil law, is real property
(realty) and personal property (personalty). Real property was the subject
of a real action, which meant that the action could lead to the recover of
the object itself.2 A personal action does not necessarily result in the
recovery of the object.
Unlike the civil law, ownership in the common law is not absolute in its
application to real property, as the state has the highest form of ownership
(“eminent domain”). Real property is divided into corporeal and
incorporeal hereditaments. Incorporeal hereditaments are not tangible;
they are akin to “servitudes” in the civil law.
A CHATTEL is the common law term for movable property. A CHATTEL
REAL is a leasehold in land. PURE PERSONALTY is also divided into
CHOSES IN POSSESSION, which are tangible movables, while CHOSES
IN ACTION, which are not tangible.3
The common law is complicated by the nature of ownership in the common
law. In this system, two kinds of ownership exist: legal and equitable.
Additional Notes:
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2
For example, an heirloom is an example of real property, while a lease in land is
personal property. Today, the court has obviated the distinction between real and
personal actions.
3
A share, like money, is a chose in action. It represents a debt owed by a
corporation or a bank. The right holder has a right of action against the holder.
Fixtures and Realty
A FIXTURE is a chattel that by virtue of becoming annexed has lost its
character as personalty and has become realty.
Biss v. Saskatchewan Government Insurance Office (1981)
Facts: The plaintiff filed an insurance claim for damage to a pool tarp.
The defendant claimed that the tarp was either a fixture, or “outdoor
equipment” per the insurance contract and therefore not covered.
Issues: Was the tarp a fixture?
Holding: No.
Reasoning: The following test is used to assess whether a thing is a
chattel or a fixture (re Holland v. Hodgson):
Is the thing attached to the ground (is it a fixture)?
1. Articles attached to the land by their own weight are presumed not part
of the land, unless the circumstances show that they are intended to
be part of the land.
2. Whereas, an article which is affixed to the land is presumed to be part
of the land, and the onus is on the person claiming it is a chattel to
establish it as a chattel.
3. Assuming that the object is attached, to overcome the presumption in
number 2, the court will consider the circumstances that show the
degree and purpose of annexation (objective inquiry).
4. Assuming that the object is not attached, to overcome the presumption
in number 1, the court will consider the degree of “annexation” as
opposed to “attachment”, and the purpose of the object. Is the object
on the land for the fulfillment of the object as a chattel or land?
The tarp was attached for a temporary purpose and therefore it is covered.
The degree and object of attachment rebutted the presumption.
Rationale: Where the degree of annexation is temporary and limited,
the object continues to be a chattel.
Royal Bank of Canada v. Beyak et al. (1981)
Facts: The mobile home in question has a deck, it is resting on blocks, it is
connected to a septic tank, it is landscaped, and it has access to power.
Issues: Is a mobile home a chattel? Can Royal Bank recover its security
for the chattel mortgage?
Holding: Yes, when it lacks the degree of attachment to the land.
Reasoning: The mobile home lacks a foundation, which represents the
connection to the ground. The mobile home was not placed on the ground
for permanent use, and the owner of the land and trailer were different.
The trailer was only attached to the ground by weight.
Addition to the trailer was intended to make the trailer more usable as a
mobile residence, but it did not intend to make the trailer part of the
freehold.
Rationale: A mobile home is a chattel unless attached with
permanence to the ground.
Critique: The circumstances in this case may have influenced the judge’s
decision. Since Royal Bank had a security in the mobile home as a
chattel, the judge held that the mobile home was a chattel to realize the
security.
Chelsea Yacht & Boat Co. Ltd. v. Pope (2001)
Issues: Is a houseboat a chattel or a fixture?
Holding: No.
Reasoning: The houseboat is a converted D-Day landing craft placed
inside a barge and is attached to the wall of the river by hooks and to the
bed of the river by an anchor. The boat rests on the land at low tide.
The court applies the Holland test and determines that it is a chattel. The
court equates the boat to a trailer – which rests by its own weight on the
ground. A houseboat, the court claims is not a dwelling-house and
therefore cannot be the object of a lease.
Rationale: Temporary attachments to the land that can be easily
removed makes the object a chattel not a fixture.
Critique: The nature of the difference in ownership of the land is different.
Presumably, the yacht is a fixture to the bed or the wall. If the boat
becomes a fixture to the land, the Chelsea would lose ownership,
because the land-owner – the state – would own the fixture.
The parties treated the boat as land in the tenancy agreement, since they
signed a tenancy agreement for real property. The court, however, rejects
this argument. The terms of the agreement could not create the terms of
annexation. Intention can only be inferred based on the objective
realty of the attachment (condition #4). This is inconsistent with
Canadian authority, see North York below.
North York Hospital Foundation v. Armstrong (2004)
Facts: The owner of the land and immovable above are different.
Issues: Can the parties agree that a fixture ordinarily is a chattel? Can the
parties agree that the owner of the fixture and land is different? This
seems to contradict the principle as articulated in Chelsea Yacht.
Holding: Yes.
Reasoning: The parties have agreed by contract that the buildings are not
considered part of the estate. The Kiwanis test considers this when:
1. There must be express intention and agreement,
2. The contract must give the tenant complete control over the house
without interference with the use or enjoyment,
3. The tenant has the right to remove the house at the end of the term.
Rationale: The parties in contract can render a construction on realty,
personalty, for the purpose of separating ownership.
Perhaps the parties in contract can treat a fixture as a chattel and viceversa in a private agreement. Parties cannot affect the rights of those not
in privity of contract. Once, however, a third party is introduced, the
objective test applies (see Ziff at 107). North York governs Ontario law,
not Chelsea Yacht. Third parties may not be aware of the contractual
arrangements of the parties in contract.
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Personal Property and Possession
At the root of the concept of possession are the concepts of:
1.
2.
animus possidendi (intention to possess and therefore, the
intention to exclude others, see Keefer), and
factum (physical control).
Possession is an important aspect in the law. Recall Carol Rose’s article:
a fox is res nullius, and two people compete for occupation of the fox – the
person who is about to catch the fox, or the person who shot it?
Possession can be the origin of property rights (simply by taking possession). A possessor can displace a title-holder through adverse
possession (acquisitive prescription). The law can vindicate possessory
rights; it is an independent basis for property rights.
Why give recognition to mere possession? There is an argument for
efficient use of resources, if others do not use property. Additional rights
provide support of the state to avoid conflict between potential
possessors (brute force would govern property relationships, see Popov v.
Hayashi). Possession may give notice of ownership. Possession
involves the expenditure of labour and therefore rights are based on
desert or merit.
CONSTRUCTIVE POSSESSION – a legal fiction that exists when an
intention to possess exists with a low level of subjective awareness.
ADVERSE POSSESSION – a person who retains control over an object
without legal title. That person can obtain an “inversion” of title once the
limitation period in statute has expired. The rules reward a squatter who
uses the property (avoidance of waste). A TORRENS system – a system
of land registration – has led to the abolition of adverse possession claims;
however, boundary errors can still quiet titles.
Elements of Possession
The “Tubantia” (1924)
Facts: Both the plaintiffs and defendants allege that they have rights over
a sunken ship and the treasure within it. The plaintiff did not have
continuous physical control. The plaintiffs are suing on the basis of
TRESPASS – an interference with possession. The owners of the ship
are not present at the litigation.
Issue: The issue is not who owns the wreck, but who has possession?
Holding: The plaintiffs established that the defendants were trespassers.
Reasoning: The ship and its contents are “derelict or abandoned” because
the owners are not in possession or control of it. The plaintiffs marked the
area around the wreck with buoys and they had employed vessels to do
the salvage work.
1. Total control over the object was difficult, if not impossible, because the
object was buried, and because of the weather. The court realized that the
wreck was deeply buried and that the defendant could not exercise the
same degree of control over it without violence to the plaintiff. The
plaintiffs were doing what was reasonably possible to exercise control
(and therefore, control is relative and not absolute).
2. As for intent, the plaintiffs had intended to work on the wreck as a
whole, but the weather prevented them from accessing certain parts of the
ship. This, however, should not preclude possession of the ship.
Rationale: Physical control over a chattel is not a requirement, where
the possessor evidences a degree of control such that others would
have to use force to remove the possessor.
Popov v. Hayashi (2003)
Facts: The plaintiff and defendant disputed possession over Barry Bond’s
73rd homerun ball. Popov catches the ball, but is assailed by bandits. Mr.
Hayashi picks up the ball and walks away. The cause of action is
conversion.
Issues: Does Popov have rights to support an action in conversion?
Assuming Popov demonstrated intends, did Popov have control?
Holding: The value of the ball was “equitably” divided.
Reasoning:4 The ball belongs to MLB, but MLB abandons the ball once it
leaves the field. The court accepts Prof. Gray’s test – when incidental
contact knocks the ball loose, the person who picks it up acquires
possession (and ownership).

However, in this case, Popov suffered an assault by a “gang of
bandits” and the contact is not incidental. The court states a rule for
this scenario: if the effort is interrupted by the wrongful activities
of others while possession is incomplete, the possessor has a
pre-possessory interest.
Popov did not have legal possession, but a “pre-possessory interest”. One
of the objectives of the law is deterrence of anti-social behaviour. The
court also discusses “equity” – what is intuitively fair.
Hayashi should not be penalized, because it is uncertain whether Popov
could hold on to the baseball.
4
Perhaps in terms of the motion of the baseball and its high velocity, the court
might consider the factors that warrant control. Is stopping the baseball sufficient
to exercise control? Does a person have to catch the baseball in his glove? This
is the debate between Prof. Gray and Bernstein.
Note: Had this been the law at the time of Pearson v. Post, supra, the
chaser, and not the shooter, would have a pre-possessory interest,
because he has “taken significant but incomplete steps to take
possession.”
Keron v. Cashman (1896)
Facts: Crawford found a stocking filled with money. The other boys
played with it without examining the contents. The stocking breaks and
the money is discovered. The title-holder is absent.
Issues: Who has possession?
Holding: All of the boys in common.
Reasoning: Physical control is not an issue in this case. The boys treated
the stocking as a toy, and therefore, none of the boys intended to
appropriate the contents (intention was incomplete). It was at the point the
sock erupted did the intention crystallize. Since the discovery of the
money occurred during the play by all of the boys, all of the boys “found”
the money in common.
Rationale: The period at which the “intent” was formed is relevant to
consider who is in possession of an object.
In this case, Crawford did not have a pre-possessory interest because he
did not intend to appropriate the contents of the container.
Keron v. Cashman presents a rule for appropriation of contents:
1. The court does not consider the premise that intention to appropriate
the container means that the requisite intent to appropriate the contents is
presumed.
2. The nature of the container is also relevant: a person does not normally
find money inside a sock. The “Tibantia” was also a container. The
plaintiffs in that case made an effort to appropriate the contents of the
container.
What makes this case interesting is the “weight” in the sock. Crawford
could have argued that the sock and money are 1 object.
Possession and Ownership
The Wilson case raises the point of jus tertii – the right of a third party in
disputes over possession.
Wilson v. Lombank (1963)
Facts: A finance company provided financing to a party for a car (no title).
Possession of the car is transferred without title. The plaintiff acquires
possession of the car and takes it for repair. The defendant, however,
paid for the car, but the defendant found the true owner and returned the
car to it. Both the plaintiff and defendant have paid for the car.
Issues: Is the plaintiff entitled to damages?
Holding: Yes.
Reasoning: The defendant interfered with the possession of the plaintiff,
and therefore the defendant committed a trespass.
Although the garage owner was the bailee of the chattel (because he was
doing the repairs and because he had the car in his possession), because
the plaintiff paid the owner monthly for repairs and the plaintiff could
recover the chattel at any time. We could say that the plaintiff had prepossessory rights to the car.
Rationale: A court will vindicate possession even when someone
returns the item to the title-holder.
Note: The court should not reward the stupidity of the plaintiff and
defendant, who paid for an item without acquiring title to it. The decision is
aimed to prevent a chaotic situation. The decision gives a possessor
some legal recourse to protect random taking of objects.
Critique: In this case, problems in the legal reasoning does arise:
1. The garage has actual possession of the car, and the plaintiff
transferred possession to the garage (therefore no constructive
possession either). The plaintiff has no right to possession, because
the plaintiff has not paid for the car. The garage has a mechanics’
lien.
2. In the alternative, the jus tertii defence applies. Since the third party
has a “better right” the plaintiff should be precluded from filing an
action for trespass.
3. Can the garage and the plaintiff both exercise possession at the same
time when they are not joint-possessors? Either one or the other has
control over the object.
The jus tertii plea is generally unavailable, because the claim in trespass
does not depend on infringement of title, per se, but on possession. The
claim is available when:
1. The plaintiff has actual possession (not constructive possession), and:
a. The defendant is defending the claim for the owner,
b. The defendant “recapted” the item for the owner.
The Wilson case rejects the defence of jus tertii when:
c. The defendant returned the chattel to the owner.
The Wilson case also rejected the defence, when the plaintiff has no actual
possession, only a “right to possession” and the true owner had a better
title. In Wilson, the defendant returned the item to the true owner, but the
court found in favour of the plaintiff.
The distinction between the points in Salmond’s test are minimal and
semantic. Either way, the lawful owner receives his property back – the
only difference is the owner’s knowledge of the process of the return by
the defendant.
Note: that the Real Property Limitations Act, S.O. 2002, c. 24 will have an
effect on the ability of a true owner to use his title to reclaim possession of
his land. Once the limitation period expires, so will the validity of the title
against an adverse possessor.
Finding Lost Property
Armory v. Delamirie (1722)
The finder’s rights vs. the rights of a trespasser
Facts: A boy found a jewel and brought it to a goldsmith for examination.
The goldsmith’s apprentice kept the jewel.
Issues: Does the boy have a right of action (in trover)?
Holding: Yes.
Reasoning: The Armory test reads as follows:
The finder does not acquire ownership, only a claim against all but the
owner.
1. Confirms the action against the master for act of apprentice.
2. The finder is entitled to a claim to the highest value of the object
against the defendant, if the defendant does not return the item.
Note: If the goldsmith lost the jewel to another person, the goldsmith
would have a possible claim in trover (but not against the finder, the
finder’s master, or the true owner, who would have better claims).
Parker v. British Airways (1982)
The finder’s rights vs. the rights of an occupier
Facts: Parker found a bracelet on the floor of the terminal. British Airways
kept possession of the object, claiming that Parker found the object on its
property.
Issues: Is Parker entitled to the bracelet?
Holding: Yes.
Reasoning: A finder does not have a possessory right in an object that he
finds when trespassing on someone’s land. In this case, Parker was an
invitee. The court relied on the rule from Bridges v. Hawkesworth.5
In Bridges v. Hawkesworth, a traveller found a small parcel on the defendant’s
shop floor that belonged to neither of them. The court awarded the contents of the
parcel to the finder, and not to the storeowner.
5
The bracelet was not in the custody of the defendant. The bracelet was
an “unknown presence” that was removed by the plaintiff.
As for the argument of attachment, the bracelet lay loose on the land and it
was not placed there for the purpose of becoming a fixture. Therefore, it
would fail the Holland test.
Rights and Obligations of Finder
1. Finder acquires no rights unless the chattel is abandoned and finder
takes it into its care and control.
2. Rights are very limited if the finder is a trespasser.
3. The right is superior to all others, except for the true owner or anyone
who can assert a prior claim.
4. A servant who finds a chattel in the course of employment does so on
behalf of its master.
5. Obligation on the finder to locate the true owner and care for the
chattel in the interim.
Rights and Liabilities of Occupier
1. Occupier has superior rights over the finder, when the object is
attached to the realty, whether the occupier is aware of the attachment
or not. Therefore, if the occupier can treat the object as a fixture, the
occupier will have a superior claim.
2. Where no attachment, the occupier has superior rights when the
occupier has an intention to exercise control over the things in the
building.
How do we consider the manifest intent?
 Consider the nature of the place. For example, a bank vault or a
private house is an example of a place where the occupiers intend to
exercise control.
 Consider the indicia of control. For example, a sign, a routine to
search for lost items, or a lost and found system.
3. Obligation, therefore, to take reasonable measures to acquaint the true
owners with their lost property.
4. Ships, cars, and planes are the same as buildings for this test.
Rationale: The nature of the place is sufficiently public and the
procedures are inadequate to demonstrate exercise of control on the
part of the occupier.
The Parker case raises some important questions:
I. Was the finder permitted on the land? If the finder is a trespasser, then
presumably the finder should have a lesser right than the occupier,
because otherwise, the law might encourage trespass.
II. What is the relationship between the thing and the land? If the thing is a
fixture, then it is realty and title vests with the owner. If the thing is
attached, but not a fixture (embedded in the land) then the occupier has
a better claim. One rationale is that the chattel is an integral part of the
realty that is incapable of being lost. Lord Donaldson envisages a
situation where the thing is not a fixture (i.e. Is this a quasi-fixture or
intermediary category?). If something is incapable of being lost, it is
therefore incapable of being found.
Otherwise, the finder would receive a better right, even though the finder
might have interfered with the realty or damaged it to obtain possession.
A licensee without permission to remove something from the land will not
have a better right than the occupier, unless the license permits the
licensee to remove objects. Giving a license does not always mean that
the occupier has a prior right, only if the object is attached.
III. What if the finder is an employee? Found possessions of employees in
the course of the employment is treated as possession of principal.
IV. A land occupier will have a better right only if the occupier has a
manifest intent to exercise control over.
Consider a case of the Manitoba Court of Appeal referenced in Parker. In
Kowal v. Ellis, 76 D.L.R. (3d) 546, the finder finds a pump on the land.
The Court of Appeal presents a test: the finder is deemed to be acting for
the true owner. The occupier can only assert a superior right if he is a
bailee of the object or if the true owner has abandoned the object.
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6
Have the claimants become bailees for the property for the true
owner? Therefore, the test that would give the occupier a superior
right appears to be more burdensome for the occupier.
However, these tests are the same, if manifest intent to take control, is
the same as bailment for an unidentified object.
The term “bailment” tends to involve consent on the part of the true
owner. Per the reasoning of the Manitoba Court of Appeal, the court
creates a legal fiction whereby the true owner of a lost object gives
implicit consent to the bailment (either by the land-owner or the finder).
This can establishes that consent is not a condition of a
bailment.6
We can critique this approach because bailment requires a sufficient act of
transfer of possession. In Heffron, the process of analysing the relationship
between the plaintiff and defendant shows that simply because the defendant was
in possession of the car did not mean that it was the bailee. The holding in Kowal
is more consistent with a “license” – such that the finder is prevented from suit in
trespass by the true owner, but the occupier should still have the right to possess.
In conclusion, the Parker case assumes that the finder derives his rights
from possession, and not from the true owner. In Kowal, the rights derive
from possession, but under a legal fiction of consent from the owner.
Relate this to Keron v. Cashman the finder must have an intent to
possess. The court will not always presume a constructive possession,
but constructive possession must be established by showing that the
occupier has intended to take control over the object.
Moffat v. Kazana (1969)
The finder’s rights vs. the rights of the owner
Facts: The defendant purchased a bungalow belonging to the plaintiffs.
Three years after the purchase, a workman of the defendant discovered a
tin of money, who brought it to the police. The police returned the money
to the defendant, but the plaintiffs sued.
Issues: To whom does the money belong?
Holding: The plaintiffs.
Reasoning: Under the Parker test, the occupier has a manifest intent to
possess the objects in the house. The workman was also an “employee”
of the occupier, and the workman found in the course of employment.
Thirdly, the object could have been attached to the building.
With respect to the true owner, the court determined that the true owner
never “abandoned” the tin, but that he merely forgot about it (see definition
of abandonment below). The true owner never sold or divested himself of
the rights to the object (even though moving out of the house might appear
to indicate a divestment of the property inside) and therefore the court held
that the property belonged to the true owner.7
Rationale: The true owner was entitled to a right of reception, as the
sale of the house did not include the sale of lost items found within it.
ABANDONMENT – intention on the part of the owner to divest itself of the
property and a significant act of divestment.
By conferring title upon the finder, the finder receives an award for
returning the property to social use. Otherwise, with not conference of
title, people would compete for title.
The Kowal test makes the burden on the occupier more difficult because the
finder’s right derives from possession transferred from the true owner.
7
The court might have decided this case differently if the plaintiff was merely a
previous possessor and not the true owner, because as a prior possessor, that
person would no longer have the requisite intent to possess.
Additional Notes:
Containers – Appropriation of the Contents
1.
2.
3.
Keron v. Cashman determined that there is no presumption that
appropriation by possession of a container leads to the appropriation
of the contents. The possessor must show requisite intent, although
the burden may be very low, see The Tubantia.
Possession of a container can mean constructive possession of its
contents (see Heffron v. Imperial Parking).
Delivery of a container creates a reasonable inference of delivery of
the contents inside (see Heffron, supra).
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Bailment (applies only to chattels)
The BAILOR is the lawful owner of the chattel, while a BAILEE has lawful
possession of the personalty. The bailee owes a duty of care to the bailor
with respect to the property in the bailee’s possession.
In Fairly & Stevens, the judge provides a definition for bailment. Note that
an employee in possession of his employer’s property is not in bailment of
it, but is in custody only. A bailment is a transfer of possession from one to
another for a limited time and purpose.
1. Gratuitous bailment for
 sole benefit for bailor (i.e. storage)
 sole benefit for bailee (i.e. borrowing)
2. Contractual bailment with benefits for both parties.
 Bailor pays for the bailment (i.e. storage agreement)
 Bailee pays for the bailment (i.e. rental agreement)
A bailee can recover possession from a third party that adversely
possesses a chattel if the bailee can establish that it had a “right to
possess”, rather than actual possession. Whereas a bailor can file a claim
against a third party that has caused damage to the chattel for permanent
injury to it, a bailee can file a claim for less serious injury (see Mears v.
London and South Western Railway).8
Heffron v. Imperial Parking (1974) OCA
Facts: The plaintiff parked his car in the defendant’s lot. The parking
ticket contained an exculpatory clause. The lot required its clients to leave
the keys in their cars.
Issues: Was the garage in bailment of the car? Was the garage liable for
damages?
Holding: The garage was a bailee. The garage was liable for damages.
Reasoning: Estey J.A. determined whether the garage was in bailment or
in license. Under a bailment, the garage has a positive duty to safeguard
the property: a higher obligation than a licensor (the garage) owes to
licensee (the plaintiff). If it is a license relationship, the licensee must
show conditions for negligence. Under a bailment, however, the court
presumes that the bailee exercises care and has an obligation to return the
object in reasonable condition.
Estey JA reasons that the relationship was a bailment – has the bailor
delivered possession to the bailee?
8
A LICENSE is a grant of authority to another to enter upon property for an agreed
period that would otherwise be a trespass. If applied to Heffron, the garage would
have issued a license to the plaintiff to leave his car on the lot.




Delivery of keys signified a change of control from owner to attendant,
Surrender of the ticket was required for recovery of the vehicle,
The attendant performs a function beyond collecting money,
Assumed responsibility for car after hours, and keys were stored at
end of day.
Estey also held that some tools, clothing, and radio could all be
constructively included in the possession, because it would not be
unreasonable for a person to have such objects in a car. This is a
container-contents issue, see Keron v. Cashman.
The exculpatory clause did not apply because the garage was in
fundamental breach of the contract (and because the parties were of
unequal bargaining power).
Rationale: The (contractual) relationship will determine the
responsibility of the bailee for the object in its possession.
Relationships can change from bailment to license. Perhaps when a
bailment ends (such as a car is ready for pick up), the bailee becomes the
licensor and therefore, a higher burden on is on a potential plaintiff to
attribute responsibility to the defendant.
Liability for Damage of Bailed Goods
Fairly & Stevens v. Goldsworthy (1973) NSTD
Facts: The defendant, a prospective purchaser, damaged an automobile
owned by the plaintiff, dealer. He drove it during a blizzard and flips the
car. The plaintiff and defendant had come to a prospective agreement,
subject to the approval by the defendant’s wife.
Issues: The dealership wants to recover the value of the car. Was the
defendant liable for damages?
Holding: Yes.
Reasoning: The plaintiff and defendant are in a bailment relationship. The
standard of care owed to the bailor will vary with the nature of the benefits
afforded to each party. The factors that the court will consider are:



gratuitous nature of the contract,
the nature of the object, its portability, its value, and
the choice of bailee.
The judge recognized that the courts have moved away from gross
negligence, nevertheless, the judge considered the type of bailment at
issue to choose the appropriate standard of care. Although the
relationship appears to be a gratuitous bailment (“a test drive” to facilitate
the sale of the car), the defendant took control of the car so that his wife
could approve of its purchase (the reward). The bailee also gets to use
the car to see how it performs. The bailment, the judge argues, was for
mutual benefit.
In obiter, the court found gross negligence on the part of the defendant, so
that even if the bailment was gratuitous, the defendant would be liable.
Rationale: The standard of care owed to the bailor will depend on the
relationship and benefits afforded to the parties. However, the court
will be able to find mutuality even when one party appears to
possess the property gratuitously.
Note: The dealership might have argued that the parties completed the
contract once the buyer’s wife fulfilled the condition precedent.
Perhaps the defendant breached the bailment agreement. The defendant
owed a duty to return the car to the plaintiff. Recall that a bailment is a
transfer of possession for a limited purpose and time. After the
defendant’s wife accepted, the bailment was complete. Perhaps, liability
should be strict if the defendant did not follow the terms of the bailment.
Liability of Third Parties to Bailor and Bailee
The “Winkfield” (1902) England CA
Facts: Mail is lost. Customers of the Post Office (title-holders) bail their
mail to the Post Office. The Post Office arranges for the mail to be sent by
ship, the “Mexican”, as a sub-bailment. The “Mexican” collides with the
“Winkfield” and the “Winkfield” is at fault. The Post Office sues the
“Winkfield”. The “Mexican” has possession and not the plaintiff. The Post
Office only has a right to possession.
Issues: Can a sub-bailor/bailee recover against the third-party
wrongdoer? What limits are there on the right of the bailee to sue?
Holding: Yes.
Reasoning: The defendants did not plead that the plaintiff was not in
“actual” possession. The Court of Appeal proceeded as if the Post Office
was the bailee. We can therefore forget about the “Mexican”.
The court rejected the holding in Claridge. The bailee can only sue third
parties only if the bailee liable to bailor. A bailee is not an insurer, and
therefore, the bailee is liable only if he is negligent. The bailee in this case
is not responsible for the loss to the bailor. 9
Rationale: The court holds that the bailee’s right to sue arises from
9
Like Kowal, the right of a finder arises from the original owner as a bailor. This
means that we can question the holding in Kowal, because right derive from
possession and not necessarily from the true owner.
possession itself.
T
he bailee does not get to keep the damages, since the bailee had a
contractual obligation to return the item to the bailor. This is an incident of
the suit against the third party, and not a condition. Had the Post Office
been unable to recover, the customers could not recover from the Post
Office, because the Post Office was not negligent. The damages in
Winkfield are a substitute for the goods bailed.
Additional Notes:
Normally, the bailor is not liable to third parties with regard to injury caused
by its property. There are exceptions: (1) the bailee acts as the bailor’s
agent, (2) the bailor provides negligent operating instructions, (3) the bailor
provides a defective product.
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Real Property and Possession
Asher v. Whitlock (1865)
Facts: The true owner of the cottage is a Lord, who is absent from the
picture. The testator - possessor - builds a cottage on the Lord’s land, and
leaves property to his wife. After the death of the wife, possession will
transfer to his daughter. The wife and daughter both die, but her second
husband continued to reside on the realty. The plaintiff was the daughter’s
heir and she claims title to the property.
Issues: Does the heir have a right to repossess the property?
Holding: Yes. The plaintiff’s claim in EJECTMENT is valid.
Reasoning: The original occupier had rights to possession, and he made
a will in which he granted a determinable life estate to the wife (X to A for
life until A remarries). Once the wife remarried, the daughter captures the
remainder (the whole estate in fee simple). When the daughter dies, all of
her property goes to her heir-at-law.
The defendant would have had to argue that he had been in sole
possession. Once the daughter dies, possession would have expired. If
possession gives rights, and possession ends, should not the next
possessor acquire rights.
Per Cockburn CJ, the plaintiff maintains her right to the land, because the
possession is passed in succession to her. Based on the testator’s
possession, the law grants the testator a right in the land that he can
transfer to others. Once rights in possession are crystallized, they can be
transmitted, even if the person to whom the rights are transferred is not in
‘actual’ possession.
Per Mellor J, possession is evidence of prima facie title, however, it is not
equivalent to title. The defendant would have to show that the person with
earlier possession has a bad title or that he has a superior one. The
defendant did not do so in this case.
Rationale: A person can derive rights from possession and then that
person can pass the rights on to others. Once the rights are
transmissible, the right is transmissible by will.
Possession involves physical occupation and intent to possess. Is the
holding in Asher not in consistent with the definition of possession? The
court alludes that the defendant was not in possession long enough to
have rights to make his possession superior to the original possessor.
Adverse Possession of Real Property
A statute of limitations will limit the period to which a title-holder to sue a
trespasser or adverse possessor for return of its land (see Ontario Real
Property Limitations Act). Once the period expires,10 the trespasser does
not necessary obtain possession, but the authority of the paper title is
decreased. The possessor now has the best right – but not necessarily
title. Over time, the owner’s title may extinguish as well. The court treats
the owner as having lost superior rights to the rest of the world.
Why justify adverse possession?
Callaghan rejects the theories that adverse possession punishes
complacent landholders and rewards possessors, since there is no
evidence that statutes of limitations reward possessors. Callaghan
explains that statutes function to clear titles to land because the registry
system may not accurately represent the actual possession interests in
land.
Ziff explains that claims resultant from adverse possession often rectify
mistakes in fact. A person may have acquired realty with a defective title,
honestly believing that the land belonged to him. Limitations Acts
recognize that other people may rely on inaction. The courts may deem
that a person has abandoned the property.
Carol Rose, “Possession as the Origin of Property”
Rose contends that possession is the origin of property, because the
possessor must communicate its intentions to keep the property to the
world. The doctrine of adverse possession functions on the basis of
communication: if the title holder fails to communicate the trespass to the
world, while the adverse possessor does so continuously over a period of
time, then the title holder will lose possession and ultimately, lose the title.
Economists suggest that communication as to possession is important
because communication minimizes waste. It provides certainty as to
claims to entitlement, which means that people will not duplicate or waste
resources to develop realty. People can then bargain to trade their rights
in property, without competing for them.
In terms of possession, it is prima facie evidence of seisin in fee (see
Mellor J’s judgment in Asher). Now, however, common law jurisdictions
have registry systems. The Registry Office will verify who the true owner
is.
Environmental critique of the law of adverse possession: lands may be
exploited by possessors. Adverse possession also amounts to private
expropriation without compensation.
10
In Ontario, the time-period is 10 years.
To show adverse possession a person must establish the following:
 Open,
 Peaceful,
 Continuous,
 Acquiescence, where the true owner does not object,
 Exclusive, with the intention of excluding the true owner, and also, the
true owner must discontinue possession,11
 Actual possession for the statutory period (not constructive),
 Adversity, where the possessor cannot be in possession of the realty
with the permission of the owner. Once permission is granted, the
adverse possession ends. Then the use of the land becomes akin to a
license.
The owner does not need to know that the squatter is acting on the
owner’s land, only that the actions are open and discoverable.
Intermittent use can still be “continuous” (as with a winter cottage). Also
possession can be passed on consensually, such that a subsequent
possessor can benefit from the accumulated possession of the previous
possessor (see Mulcahy v. Curramore).
Keefer v. Arillotta (1976) OCA
Facts: The parties are in dispute over possession of a strip of land
between their properties. The land contains a garage, a grassy area, and
a driveway. The defendants (Arillotta) used the strip for delivery access for
their business. The plaintiffs (Keefer) used it to park their car, they built a
garage over part of it, and they built a skating rink over it in the winter. The
defendants had title with an easement granted to the plaintiffs for a rightof-way over the strip.
Issues: Who has possession of the strip of land?
Holding: The defendants have possession, with the exception of the
garage.
Reasoning: Wilson J.A. held that the plaintiff who claims adverse
possession has the burden of establishing his right by possession. If
possession was the result of a grant, such as an easement, this burden
becomes more difficult to establish, because the plaintiff will have trouble
showing adversity.
Wilson also identified a problem of exclusivity. Although the defendants
used the strip sparingly, this did not establish that the defendants had yield
possession of the strip. Possession of part of the strip was sufficient to
establish a constructive possession of the whole property, since the
defendants were the title-holders. The defendants merely allowed the
11
This is a general intention to exclude others, which means that the doctrine of
adverse possession applies to MUTUAL MISTAKE.
plaintiffs to overstretch their right-of-way, as good neighbours.
Wilson identifies a test that measures the adverse possession against the
use of the true owners make of the property. Wilson notes that the
defendants did not care whether the plaintiff’s place a rink there or park a
car – and that they used the land sparingly. This is problematic because if
the title-holder has minimal or no intention to use the land it may never be
possible to acquire title by adverse possession, because the possession is
not inconsistent with the use of the owner.
Rationale: When a plaintiff cannot establish the intent to exclude
others, including the owner, then the plaintiff fails to establish the
animus possidendi required to claim title by adverse possession.
Critique: MacKinnon JA dissented. He found that the limitation period had
expired and therefore the defendants had no title to the strip. The plaintiffs
sufficiently established intent to possess, by treating the land as their own,
regardless of the right of way.
The case imposes a higher burden on a person with permission to use the
land, as opposed to a trespasser. However, in the case of a trespasser, it
is obvious for the owner to identify the trespasser. It would be unfair to the
true owner to exercise the vigilance against the person who has the
permission to be on the land.
By the same reasoning, since the title-holder does not object to the
placement of the garage, Wilson could have found that the defendants
implied consent. However, when the plaintiff occupied the land under the
garage, it denied access to the defendant.
Additional Notes:
In Ontario, the doctrine of adverse possession only applies to the registry
system (per the Registry Act). Under the land titles system, the doctrine of
adverse possession does not apply (per the Land Titles Act).
An owner does not seem to have to do as much to re-assert possession as
a person with the burden of establishing possession by adverse
possession (see Keefer).
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The Acquisition of Property Interests
Original Acquisition
By taking possession of objects that are res nullius, a person acquires
rights by the very taking of possession (with the exception of discussion in
Kowal v. Ellis).
Gifts of Personal Property – Property Rights are Derivative of Another’s
As a general rule, there are three requirements to transfer a gift
successfully: intention to donate, acceptance (presumed), and
sufficient act of delivery.12 The sufficient act is different from a promise,
because exchange of promises is the matter of contract. The purpose of
the delivery condition is to allow the donor to change his mind. Delivery is
the ceremony by which a donor demonstrates the giving of a gift.
From Milroy v. Lord, in order to render a voluntary settlement valid, the
settlor must do everything necessary to effect the transfer. The settlor can
either transfer the property to the person. The settlor can transfer the
property to a trustee (either himself or someone else).
There are exceptions, however, in which delivery of the chattel is not
required. One such exception is if the donor agrees to hold property in
trust. However, the distinction between the creation of a trust and a
promise to alienate is minor. Another exception occurs if the donee
becomes the executor of the donor’s estate. Thirdly, the transfer of the gift
can occur by transfer of a representation of the gift, such as a deed (or
keys). In that situation, delivery is complete when (1) the donor no longer
retains control over the gift and (2) all that can be done has been
done to divest title in favour of the donee.
When gifts are made in the contemplation of death, the rules are relaxed.
Land cannot be given validly as a gift under this circumstance. The donor
must be in “sudden peril” such that there is an apprehension of death on
the part of the donor. In some cases, a symbolic or constructive delivery
might be sufficient to fulfil the requirements.13
12
Possession requires delivery so the donor feels the wrench of parting with an
object. Delivery provides proof of transfer.
13
Note: In State v. Weinstein, a scrap dealer was convicted of theft for collecting
newspapers left on the side of the curb for collection, because title passed from the
citizens to the city through this action.
Cochrane v. Moore (1890)
Facts: Benzon owed the horse originally. Cochrane claimed that he had a
contractual right to the horse. Moore claimed that Benzon gave him an
undivided ¼ interest in the horse before the sale, leaving ¾ to Cochrane.
Yates is in possession of the horse, and Benzon tells Yates about the
transaction to Moore. The trial judge considered that the exchange of
intent and acceptance is sufficient to establish a gift.
Issues: Was the transfer a valid gift?
Holding: No, delivery is required to transfer by gift. It is possible to
transfer a chose-in-possession by deed or by receipt (sale).
Reasoning (obiter): The problem in this case is absence of delivery. The
court rejected the statement that assent to communication of a gift is
sufficient to fulfil the requirements for delivery. The court reaffirmed that a
“change of possession” is required to show that a person received a gift.
One could say that communication to Yates, a third party, and transfer of
the horse to him, represented delivery. The court ignores this.
Reasoning: The court decided Moore was the beneficiary of a one-quarter
share in the horse. Before the execution of the bill of sale, Cochrane
accepted Moore’s interest in the horse, even though neither party
mentioned a trust.

[B construes property to C for a ¾ benefit in C and a ¼ benefit in M].
To create an EXPRESS TRUST, three things must be certain: intention to
create, the subject matter of the trust, the objects of the trust.
Rationale: Change in possession is a requirement for transfer.
Critique: In Milroy v. Lord, the court held that the court cannot use one
form of gift to uphold another. Therefore, if the transfer is intended to be a
direct gift, courts of equity should not construe the exchange as a trust.
Note: The holding in this case was applied in Watt v. Watt Estate, where
the court held that delivery of keys of a boat to a marina did not constitute
a gift, because the owner still retained control. However, after the owner’s
death, the court ruled that the marina had a half-interest in the boat (an
express trust as well).
There are two other types of trusts other than express trusts:
1. A RESULTING TRUST – generally occurs when one party purchases
property (and paid for it) on behalf of another (see Hussey v. Palmer
below). The other has the legal title, but a resulting trust may grant
equitable title to the purchaser. Equity may presume that the other
holds the property on behalf of the purchaser. This presumption can
be rebutted.
2. A CONSTRUCTIVE TRUST – arises when a person without title to
property has made contributions to it. Therefore it would be an unjust
detriment to that person, should he not obtain any benefit from the
property (see Lac Minerals v. International Corona below).
Re Cole (1964)
Facts: A husband took his wife to a fully furnished new home and
declared, “its all yours.” The parties lived in the homes as if the property
belonged to the wife.
Issues: Did the husband give a gift to his wife?
Holding: No.
Reasoning: No transfer over the dominion of the furniture in the house
occurred such that the husband effectively delivered the property to his
wife. Both the husband and wife were in common possession of the
furniture (he did not leave the house and the furniture to her).

“There is no equity in this court to perfect an imperfect gift.” Chattels
that a bulky can be transferred by symbolic delivery. The introduction
of the wife to the furniture within the house was insufficient to evidence
a change in possession.
The husband intended to retain possession but give his wife use and
enjoyment of the property. The husband could have given the wife title to
the furniture but he did not. There was ambiguity as to whether the
delivery is effected.
Rationale: Change in possession is a requirement for transfer.
Critique: The court could have treated husband’s declaration as an
express trust.
In Kilpin v. Ratley, a father purchased furniture for his daughter, which was
kept in her house. The father said, “It’s yours now,” and the court accepted
this action as a valid delivery.
 There is evidence of the ‘wrench’ of delivery.
 There is no possibility of confusing the father’s intention to
continue to remain in possession of the chattels (the act is
unequivocal), as he does not live in the house, and so he will not
benefit from them.
 He leaves the furniture in her control.
In 1873, the Judicature Act recognized the assignment of choses in action
without consideration was recognized at common law if they were
absolute, in writing, and if written notice was given to the debtor.
Requirements for Effective Transfer of a Share (chose in action): execution
of the transfer, delivery of the share certificates, registration of the transfer
(up to the company’s directors to decide – at their discretion if the person
should hold the share). Only after these requirements will the person
receive legal title.
Re Rose (1949)
Facts: A legatee and another dispute title to shares owned by a testator.
The legatee claims that the testator never passed the title to the other
person.
Issues: Were the shares a gift to the other person?
Holding: Yes.
Reasoning: The testator did everything in his power (required of him) to
divest himself of the shares. Although legal title would not be perfected
until the directors of the company approved, that was not an act that
the testator had to do.
Rationale: Where the actions or approvals of third parties are
irrelevant for the purposes of the gift, then the transfer of the
property does not depend on those actions or approvals.
This case discussed what the relationship was between the donor and
donee from the time he has done everything in his power to the time the
3rd party performs the event that is required for the transfer to be
completed. The donor effectively creates a trust until the transaction is
complete. Does this, however, violate the principle in Milroy v. Lord, such
that the court will not perfect an imperfect gift?
Thomas v. Times Book Co. (1966)
Facts: The administratrix of Dylan Thomas’ estate sued for the return of
an original manuscript from the defendant, Thomas’ friend and editor.
Thomas lost the manuscript while in England and told the editor “if he
found it, he could keep it.” The editor found the manuscript.
Issues: Was this a gift?
Holding: Yes.
Reasoning: The words “you can keep it” seem clear that this is a transfer.
The editor got possession of the manuscript where Thomas had lost it.
Thomas had consented to the transfer (as he told the editor of possible
locations that he could find the manuscript). There does not have to be a
concurrence of time between intent and the taking of possession.
Rationale: The words “you can keep it” with qualification and
possession, constitutes the sufficient requirements to show the
transfer of a gift.
The problem in this case is the lack of testimony on the part of the
deceased, Thomas. Perhaps the editor might have believed a gift was
intended, but his state of mind is not at issue. The editor might have
wanted the manuscript and therefore his state of mind was influenced by
this want.
The word “keep” in this context involves a transfer of title, rather than a
bailment. Arguably, if Thomas had changed his mind, the intention would
have ended.
What happens if a finder found the manuscript before the editor?
The editor’s right has not crystallized until he takes possession. The editor
could act as an agent of the true owner, and on the basis of an agency
relationship, the editor can claim possession. The editor can “estop” the
owner from reclaiming possession based on the prior intention to transfer
the object. One could also claim that the finder acts as a bailee, per Kowal
v. Ellis. Here, the editor has a precedent prior relationship would allow
editor to make a claim against the finder (pre-possessory rights).
Transfers of Interest in Land
A conveyance of land can occur by an actual change of possession or by a
representative form (like a deed or will). In the olden days, the grantee
gets an interest in livery of seisin, which is a change in possession.
The grantor cannot convey future interests in land by livery of seisin,
because the future interest does not have possession. Therefore, future
interests require deeds.
The Statute of Frauds, RSO 1990 c. S19 requires that all transactions in
realty must be signed in writing in order to be binding.
Modern real estate transactions involve two steps: the purchaser tenders a
deposit, and then the purchaser makes the final payment to close the
transaction. If the title is satisfactory and the purchaser can obtain
financing, the parties will exchange the deed and keys. However, the
purchaser may be unable to secure financing, the vendor may die, or the
property may become unusable during this intermediary period.
Lysaght v. Edwards (1876)
Facts: The vendor died prior to the closing of the transaction for an
interest in land.
Issues: To whom does the land belong? How do we characterize the
property interests as they change over time?
Holding: The purchaser.
Reasoning: This situation is essentially a trust, but it is not an express
trust. The vendor becomes a trustee for the purchaser beneficiary.
1. The parties form the contract of sale. Beneficial ownership passes to
the purchaser, once the purchaser has to check to see if the title is
unencumbered (i.e. purchaser is buying a fee simple, not a life estate).
The vendor has a lien on the property for the remaining payment of the
purchase price. The position of the vendor is akin to that of bare owner
and mortgagee. The unpaid vendor (mortgagee) has a right to foreclose
in the purchaser is in default.
2. Once the vendor has accepted the title, the contract is fully binding.
3. In this case, since the purchaser accepted the title during the lifetime of
the vendor, the contract continues even though the vendor is deceased.
The purchase money becomes part of the vendor’s estate. A valid
contract will change the ownership of the house to the purchaser in equity.
4. If, however, anything happens to the estate during this period, the
liability is on the purchaser unless the parties have contracted otherwise.
The purchaser should thus acquire insurance. Likewise, the vendor is not
entitled to treat the estate as his own and is responsible for damage that
he wilfully causes to it.
Rationale: Subject to non-payment of the purchase price, a contract
of sale of real estate will transfer equitable interest of the estate to
the purchaser, once the purchaser finds the title to be valid. The
vendor retains legal title.
In order to make sure that one’s rights are good against third parties, a
person must register its interest in the land. This emphasizes the notion of
publicity to give effect to a right in common law.
Intervention of Equity
A DEED OF GIFT – a written, documentary evidence of an act of delivery,
which can be less ambiguous that the act of delivery on its own. In
Schilthuis v. Arnold, the Ontario Court of Appeal held that a gift between
lovers was conditional upon marriage, even though the trial judge held that
the deed was unconditional. Since the marriage plans fell through, the
deed did not represent delivery of the gift.
Recall Cochrane v. Moore, where in that case the court did not find that
the plaintiff had a legal title, but that he had an equitable interest in it.
Cochrane owns $4000, but Moore has a $1000 equitable interest from the
sale.
Hussey v. Palmer (1972)
Facts: The plaintiff paid for an addition to the defendant’s home. She
lived there for 15 months but eventually moved out and asked for support.
The defendants refused to pay for support and the plaintiff sued for the
value of the addition.
Issues: Is the plaintiff entitled to compensation?
Holding: Yes, based on an equitable interest in the property.
Reasoning:
1. The payment by the plaintiff did not constitute a loan because the
plaintiff did not ask for repayment, nor did she intend that the defendants
repay the money.
2. Denning held however, that when one person contribute the
construction of a home, the owner of the home holds that contribution in
constructive trust for the contributor even in the absence of intention to
create a trust (hence the term “resulting trust”). Denning imposes the
trust based on “justice and good conscience”.
Phillimore agreed with Denning. The plaintiff did not intend to make a gift
of the money because she could not afford to do so.
Rationale: When a party contributes to the purchase or development
of an object without the express act of deliverance of a gift, the result
is that the contributing party will hold an equitable interest equal to
the value of the contribution in the object.
Critique: Cairns held that because of the parental nature of the
relationship, the arrangement was a loan. Cairns orders a new trial for the
plaintiff to present more evidence to establish her case as if the claim was
a loan (repayable on demand). All of Hussey’s testimony reveals that it
was a loan. The evidence did not support the cause of action that
Hussey’s attorney pled.
Denning expresses the concept of equity in bold terms.
The resulting trust applies in Hussey. Palmer holds the property on
behalf of both of the parties, since the plaintiff contributed money toward
the property. This result benefits Hussey because: the equitable interest is
a property interest and may be a security in the house, it may be protected
from seizure from Palmer’s creditors, the property value may increase and
therefore, the value of the interest may increase.
Additional Notes:
The Statute of Frauds does not apply in the case because the statute
excludes trusts imposed by law. These trusts are imposed ex post facto
and therefore it does not make sense to have the writing requirement
added retrospectively.
Part II - PROPERTY INTERESTS IN LAND
A person does not own land. An owner is a tenant in free and common
socage, for an estate in fee simple, in Blackacre.
Doctrine of Tenure
A person who holds land, a tenant, holds the land for the allodial owner.
However, the Law Reform Commission recognized that the doctrine of
tenure is irrelevant today, since the practical implications of tenure have
disappeared.
When William conquered England, the Crown took ownership of all of the
land. William set up a hierarchal system of title, whereby lords and their
tenants had reciprocal (personal) obligations to each other. Common
labourers held their land in “unfree tenure” because the services due to the
lord were not predetermined. The occupier of the land did not have the
discretion to alienate the land without the permission of his lord.
Not only did tenure bring obligations by service, but also incidents. These
incidents include wardship, which allows the lord to obtain guardianship of
an heir of the tenant and benefit from the profits. The lord can obtain
relief, which included payment upon the death of the tenant and
acquisition by an heir. The lord also had the right of escheat, which
returns the property to the lord if the tenant dies with no heir. These
incidents have an impact upon our law.
The effect of the incidents are profound. Avoidance of the incident of
escheat led in part to the creation of the trust. A tenant’s friends could
hold land on behalf of the tenant’s infant heir, to avoid the burden of the
incidents on the heir. If the friends breached their obligations, the heir
could seek relief from the Court of Chancery.
Two types of alienation were available: substitution and subinfeudation.
Under a substitution, the lord consents to a new tenant who forms a
personal relationship with the lord. Under subinfeudation, a person could
become a lord himself and create a tenurial relationship with another
person. The tenant-in-chief would lose his right to reclaim the land under
escheat, and could lose all revenue from the land as well. The 1290
Statute Quia Emptores eliminated alienation by subinfeudation, and
therefore, only the Crown, could grant new tenures. The statute made
land freely alienable, but limited it to substitution.
The 1660 Tenures Abolition Act abolished all incidents of tenure but
escheat and all tenures except for free and common socage.
In Canada, the Crown granted all land in free and common socage
(without any services of tenure).
Doctrine of Estates (Absolute Estates)
The tenant owns an estate in the land. The doctrine of estates
fragments land over time. Estates allow a number of people to hold
interests in the same piece of land. Holders of estates can enjoy
possession in succession. Tenure determines the quality of the interest,
while the estate determines the quantity (period of time).
A FEE SIMPLE – one person and his heirs have an interest in land [to X
and his heirs].14 A person can convey a freehold estate by inter vivos
grant or by a will. This is an estate in inheritance unlike the life estate pur
sa vie that cannot be acquired by inheritance. 15 This estate endures so
long as the estate has heirs.16
To convey a fee simple estate inter vivos, the court required specific
language: to X and his heirs, otherwise the grant would be a life estate.
X acquires an estate measured in duration by X’s heirs and not the
grantor’s. The court is more generous with testamentary grants.

“To X and his heirs” must be defined further. This grant sounds like X
and X’s heirs have a shared interest. The common law interpreted the
grant as yielding the fee simple to X, because a person does not have
heirs until he dies. Heirs are identified at the death, which will stand to
inherit. The words “and his heirs” are words of limitation, because they
limit the size of the estate.

Conveyancing of Law and Property Act of Ontario reverses the
common law position which does not require “and his heirs” to grant a
fee simple. Where no words of limitation are used, the grantee
receives a fee simple (therefore, “to X” is sufficient). To create a life
estate, the grantor must use explicit words, “for life”.
A LIFE ESTATE or FEE FOR LIFE – one person acquires an interest in
land for his life, and upon death, possession passes to another person [X
A FEE TAIL – “To X and the heirs of his body” is lesser interest in land, because
only lineal descendants can maintain the interest. It is obsolete in all provinces but
Manitoba. This is an inheritable estate. The grantor retains the fee simple. A
grantor might want to keep land in the family – to control their property well into the
future. The tenant in tail, like the tenant for life, may not have an incentive to repair
or improve the property. Now, grants of fee tail are treated as fee simple.
14
15
A life estate pur autre vie can be inherited, but title presumably terminates once
the person of “autre vie” dies.
16
Heirs can be transferred to lineal heirs (descendants) or collateral heirs (other
blood relatives and their descendants).
to A for life, and then to B].17 B is the remainder-person. If there is no
remainder-person then interest reverts to X [X to A for life].
All of these interests are present interests in the land. For example,
consider X to A for life, B for life, C and his heirs of the body, and D and
his heirs. D has a present interest in the land, but intermediate interests
exist that make the present interest less valuable.
A pure life estate or a pure fee simple estate has no furthering condition. It
has no qualification that may limit the possibility of acquisition or
retentions.
The Rule in Shelley’s Case
The right to relief was a benefit of a lord that formed a new tenancy with a
substitute tenant. The lord would only acquire a relief if the estate was
conveyed mortis causa (because the lord would consent to a conveyance
inter vivos).
Consider, the following grant: X to A for life, remainder to the heirs of A in
fee simple.18 X, the grantor, would grant two interests or two estates.
The first estate was to A and the second to A’s heir. Because A’s heir
acquires his interest with the grantor was alive, A’s heir would not owe
relief to the lord. The Rule of Law in Shelley’s Case states that the words
“heir” provide a limitation and not the size of the estate. The Rule provides
that A’s heir has no interest in the land (no estate), unless A’s heir pays
relief to the lord.
Note: the Rule also applies when the grant to the heirs is postponed by an
intermediate grant (X to A for life, then to B for life, then to A’s heirs).
Perhaps the rule should no longer apply because relief is no longer paid.
Also, the word heirs does not include an oldest male son. Heirs can have
real meaning – who could very well be alive.
Note: A grantor can grant a life estate without invoking Shelley’s rule by
stating: “To X for life, remainder to X’s children”.
Re Rynard (1980)
Facts: A mother, Maggie, conveys her farm in death to her son, Kennedy,
and then upon his death, to his heirs. The will also contained a clause
which circumscribed a “protective trust” that stated that her son could not
sell or dispose of his interest in the land and that it was protected from
seizure by creditors.
Issues: Does the Rule in Shelley’s case apply?
17
18
Consider also: “X to A for the life of B” that grants a life estate pur autre vie.
See also, “To A for life remainder to X for life remainder to the heirs of A.”
Holding: No.
Reasoning: The Rule is a rule of law, which can defeat the intention of the
testator. The court considered whether the Wills Act overturned Shelley’s
rule by providing a definition for the word “heirs”. The court held, however,
that the Act merely provided clarification of the term given that an heir is no
longer the eldest male son. The court recognized that it took an explicit
act, the Law of Property Act, 1925, (UK) to overturn Shelley’s case in
England, to which no counterpart was legislated in Ontario.
Kennedy wants to sell the farmland, but the plaintiff, his daughter, claimed
that her father only had a life estate in the farm.
What does Maggie have? Maggie’s father grants Maggie the farm for “her
use and benefit during the term of her life” and “after the property” it goes
to her heirs in tail. Wilson acknowledged that Shelley’s Rule applied.
Maggie acquired the fee simple by dis-entailing deed.
What does Kennedy have? Wilson suggest that Maggie, by stating the
words “heirs” did not intend to use words of limitation but words of
purchase. Wilson says that “heirs” means next of kin, because the heirs
are determinable (the children, plaintiffs). Secondly, Kennedy’s estate is
limited to a life estate, since the word “life” is repeated throughout the will.
By virtue of clause 5, Kennedy’s rights to alienate are limited. Shelley’s
rule does not apply to qualified life estates.
Kennedy’s lawyer submitted that the “repugnancy rule” applies, where a
grantor cannot give an interest but then limit so severely. Wilson holds
that the repugnancy rule only applies in cases of interests subject to
conditions subsequent and not determinable estates.
Rationale: Wilson makes to determinations (both of which are
questionable).

Firstly, the court will consider whether the testator intended to
use heirs as it applies to a line of succession or to the next of
kin – and then it will determine whether Shelley’s rule applies
(question of construction, before question of law).

Secondly, Shelley’s rule does not apply to qualified life estates.
We can critique several aspects of this judgment. Perhaps Maggie only
had a right of use in the land and not a life interest in the estate.
This virtually kills the rule in Shelley’s case, because Wilson places the
rule of construction ahead of the rule of law.
Life Estate – Created by Formulation of a Grant
To grant a life estate, historically, the life estate was the default position
(i.e. “To X forever” or “To X”). This has changed because of s-s. 5(3) of
the Conveyancing of Law and Property Act. To cut the grant down to a life
estate, the grantor must be explicit:

“To X for life”

“To X for as long as she lives”

“To X and after her death, to Y”

“To X, remainder to Y”19

“To X, then to Y”
Where is the fee simple? If the grantor specifies a remainder using the
words:

“then”

“remainder”
Then the remainder goes to that person in fee simple. Otherwise, the
property reverts to the grantor’s estate.
Note: that the owner of a life estate pur autre vie continues after death of
the other person continues to possess after the death, that “owner”
becomes an adverse possessor.
Re Waters (1978) Ont. Sup. Court
Facts: The deceased devised his wife use of the home for “as long as
she lives.” Upon her death, re-marriage, or renunciation, the home reverts
to the deceased’s estate. She wanted to rent the property. A life estate,
she owns an estate for the period of her life – and she can alienate that
estate. A license is a mere personal right, we she can exercise, that she
cannot alienate. A property interest makes a difference.
Issues: Did the wife receive a life estate or did she have a license
(something less than a life estate)?
Holding: She had a life estate.
Reasoning: A judge, when interpreting a will, must put himself in the
position of the testator at the time of the will. Pennel J construed the
meaning of “as long as she lives” as a life estate. The grant also required
the wife to pay the necessary taxes and make the necessary repairs. The
wife can be charged with the obligation to repair if those repairs are
reasonable.
19
Historically, on that language, X and Y would only get life estates with a
reversion. Legislation has changed that, but the legislation now says, “to X” now
gets a fee simple. You cannot have an estate after a fee simple. Since “remainder
to Y” and “then to Y” creates limitations, the grant may be a life estate.
If the property is a mere license, the property would still be part of his
estate. He parts with the estate for a period, and then it reverts to his
estate, which demonstrates that it is a life estate.
Rationale: A person with a life estate can alienate that interest in the
land.
We have seen the word “use” before. The word “use” suggests a personal
engagement with the property, which is different from a property interest.
In addition, she may only have a life estate so long as she uses the estate
– making it a qualified life estate. Pennel rejects these arguments in
favour of the life estate.
Waters highlights a conflict with successive devolution of property. The life
estate holder will seek to maximize its enjoyment of the property, while the
remainder-person will want the estate holder to preserve the property for
the remainder-person’s future use. A life tenant is not required to maintain
the property in good repair (see Patterson v. Central Canada Loan). A
donor may render an estate holder UNIMPEACHABLE for waste.
Qualified Estates
A QUALIFIED ESTATE – a condition is attached to the conveyance of an
estate. The estate can terminate not only on death, but on another
circumstance. The purpose of a qualified estate with a condition
subsequent is to compel compliance on the pain of forfeiture. 20
A DETERMINABLE ESTATE (condition to retain) will revert automatically
on the occurrence of some event. The qualification marks the size to
begin – which is intrinsic to the grant. Words that create a determinable
fee simple include:
 “so long as”
 “during”
 “while”
 “until”
The grantor has a possibility of a reverter. The estate is lost automatically
once the determining event occurs.
A DEFEASIBLE ESTATE ends when an event, or a CONDITION
SUBSEQUENT, defeats the estate. The condition is something extrinsic
20
For example, in Rynard, the life estate to Kennedy was a qualified estate.
Kennedy’s lawyer said that because the condition subsequent was repugnant – “on
condition that he does not sell” – it should fall away. Wilson J. held that the event
was a determinable estate, so that the estate continues while Kenendy does not
sell it. The language in the grant was all mixed up – making the guidelines
per Laskin J.A. not authoritative. The rule in Shelley’s case does not apply to an
estate less than an absolute estate.
that interrupts the estate. Words that create a condition subsequent
include:
 “on the condition that”
 “should”
 “if it happens”
 “unless”
 “provided that” … “thereafter”
 “but if”
The grantor retains a right of re-entry. The estate is not lost automatically,
but only when the grantor exercises the right of re-entry.
THESE WORDS ARE NOT DETERMINATIVE, see Re McColgan.
Laskin J.A. said that a grantor can use the terms “determinable” or
“defeasible” expressly in the grant to clarify. The grantor can also specify
the consequences. If the grantor uses language of “time” and makes the
condition integral to the grant, then these grants generally are
determinable. If the grantor uses language words that are “conditional”
and uses a divide clause separate from the grant, then the grants
generally are defeasible.
If a condition subsequent is uncertain or void for other reason, the qualified
estate becomes absolute. However, if the determinable event is uncertain
or void, the whole estate is void. This distinction creates unnecessary
uncertainty.
A CONDITION PRECEDENT is a condition for acquisition, not of retention.
A person will not acquire the interest unless the condition is fulfilled [X to A
on the condition that A person some task].
What does this all mean?
1. Per Rynard, a determinable estate allows for limitations on alienation,
while a defeasible estate does not. The estate will endure as long as
the event does not occur (and therefore, there is no repugnancy).
2. If the determining event is invalid, the whole estate collapses, since
the determining event sets the size of the estate. If a condition
subsequent is invalid, the condition disappears because it is external
to the grant.
3. The possibility of a reverter is a present & “vested” interest in the land
(although it is not vested in possession). A right of re-entry is not a
present or vested interest. After 1966, the Perpetuities Act, like the
right of re-entry, the right of reverter is not a vested interest.
Therefore, if the grant occurred before 1966, this is a potential issue.
Re Essex County (1977) Ont. Sup. Court
Facts: The devisor devised property in fee simple to the school board, but
“should the land cease to be used for school purposes, the grant ends.”
The clause stated that the grantor’s heirs had a right in preference if that
condition ceased.
Issues: Is the qualification valid? Is this a determining event or condition
subsequent.
Holding: The clause stipulates a condition subsequent. The school board
has an absolute fee simple. The condition falls away because of the rule
against perpetuities and is therefore invalid.
Reasoning: A condition subsequent is added to a full grant, which can
defeat the grant of the condition becomes true. Even though the heir has
the option to purchase and title does not revert automatically, that makes
no difference on the nature of the condition as a subsequent one.
The grantor added the condition on top of the grant rather than forming an
integral part of it – which would characterize it otherwise as a determinable
fee simple.
Rationale: When the grant is in fee simple a condition subsequent
provides another person a right to cease the grant once an event
occurs. However, due to the Perpetuities Act the interest is no longer
a vested interest.
Re McColgan (1969) Ont. Sup. Court
Facts:
1. The testator devised all of his property to his trustee (fee simple).
2. The testator devised the equitable fee simple to his intimate friend,
Mary, to “hold my property as a home until her death or until she is not
residing therein personally”. The grant is followed by another qualified
estate not at issue in this litigation.
3. The will continued: “while such property is held, all taxes, insurance,
repairs and other charges shall be paid from a fund sufficient in the opinion
of my Trustee to cover the same.”
-
-
-
Ideally, Mary would want to plead that she has a defeasible life
estate, with void conditions that fall away, and the grant is
absolute.
Secondly, Mary would want to argue that the conditions (either
determinable or subsequent) are valid, but those conditions have
not been fulfilled. This is not as good, because she may have to
ensure that she meets the condition.
Thirdly, Mary would want to have a licence with the estate.
Issues: Does Mary have an equitable life interest in the house or merely a
license to use it? Is the condition subsequent valid? Who pays for repairs?
Holding: An equitable life interest was granted, the condition was void for
uncertainty, and the trust pays for the upkeep.
Reasoning: Keith J explains that the interest was more than a license
because the testator told the beneficiary to hold the property as a home.
This evidenced an intention to create an interest in the property.
“Until she is not residing therein” represents an external limitation to the
estate – even though the clause contains the word “until.” 21
However, the condition is void for uncertainty because the term “residing”
is ambiguous. The court could not determine what the testator meant by
residing, because due to the facts of the case – the friend’s health,
economic status and he frequent travel to and from the house – made it
difficult for the court to consider “from the beginning, precisely and
distinctly of what event” would terminate the estate.
The court also considered the nature of the relationship between testator
and beneficiary. Keith reasoned that since the testator knew of the
beneficiary’s financial situation, he would not have wanted to burden her
with the upkeep of the estate. This might also have had an impact on the
determination that the estate is defeasible with a void condition.
Therefore, the court held that the trust should pay for the repairs.
Likewise, because the estate was a life estate without condition, the
beneficiary was entitled to lease it free and clear of charge against the
other beneficiaries.
Rationale: Where the words of a condition cannot determine the
event that will trigger a reverter, the condition is void. The nature of
the relationship between the parties will impact the court’s
determination as to the rights of one party as beneficiary.
The grant could have stipulated: “To Mary for life until she no longer resides
there”; “A life estate to Mary until she no longer resides there”; “To Mary for life for
the determinable period that she resides there.”
21
Re Down (1968) O.C.A.
Facts: The impugned grant in the will stated, “When my son, arrives at the
age of 30, provided he stays on the farm, then I give…” The trial judge
determined that both conditions are precedent conditions, because they
reflect a continuation of a way-of-life, after which the devisee will receive a
legal share in the property.
Issues: Is the age condition a condition precedent or subsequent? Is the
condition, “provided he stays…” a condition precedent, subsequent, or
determinable condition?
Holding: The age condition is a condition precedent, the “provided…”
condition is a condition subsequent.
Reasoning:
1. Laskin considers whether the “provided” condition is merely precatory,
meaning that it is an expression of a hope, but not binding in law. He
rejects this claim, because the words state an express condition, unlike in
Re Brace.
2. Laskin determines that attainment of age 30 is a condition precedent to
acquire. However, the “provided” condition appears more like a retention
condition, rather than one of acquisition.
Condition Precedent
i. the testator gives the interest after the condition is obtained.
ii. the two conditions are stated together
Condition Subsequent
i. the verb “stays” is a present action, required for retention
ii. staying on the farm occurs after the interest is acquired
iii. the will envisages that Harold will stay and live on the farm.
Given that the characterization is ambiguous, Laskin resorted to maxims of
interpretation:
i. in case of will, the court should confer the intended benefit, and all
parties should receive a benefit
ii. the common law favours vesting (and therefore fewer conditions
precedent)
Laskin, however, finds that the condition is void for uncertainty, because
“to stay” on the farm can have many meanings. Once the devisee reaches
age 30, he will receive his ½ share (interest) in the farm. Had the
condition been a condition precedent, it would have ruined the whole
grant.
Rationale: Where there is ambiguity as to the condition, as a
precedent or subsequent, the court will use maxims of interpretation
to make a determination.
Types of problematic qualifications:
1. REPUGNANCY – per Rynard, the restraints on alienation (the giving
and taking away of a right) can make a condition invalid
2. UNCERTAINTY – per Down, if a qualification is too vague to know
when it is can be breached, the law will not enforce it
If the court is going to defeat a vested estate by a subsequent
condition (or determining event), the court must see “from the
beginning, precisely and distinctly, upon the happening of what event it
was …” (see Down, Clavering v. Ellison). A court can find a condition
subsequent void for uncertainty, because it does not destroy the grant.
The court will be more tolerant of uncertain conditions precedent,
because the common law favours vesting of estates. As long as the
person before the court can be said either within or outside it, the
condition can be applied with certainty. Voiding a condition precedent
will void the whole grant.
This may suggest that the tests to assess the validity of the conditions
is different.
3. PUBLIC POLICY - see Mossman and Flanagan.
Try an example: “X to A for life, providing he stays on the farm, but if he
does not stay on the farm, then to C.” Under common law, the remainder
fails because of the rule against shifting freeholds. Suppose this grant is in
a will, the condition subsequent fails, because it is uncertain (Re Down).
We cannot say precisely what event will terminate the estate (Re Down).
However, we can say that the condition precedent is invalid. We can say
too that the condition is valid, and C acquires an interest when A “no
longer stays on the farm”. It is unclear whether C gets possession or a
mere interest.
In re Tuck’s Settlement Trusts (1978)
Facts: Tuck placed the money in trust on the condition that each baronet
marry an “approved wife”. The trust provided a definition of an “approved
wife” and a settlement clause in case of dispute. The plaintiff submitted
that the definition of “approved wife” was void for uncertainty.
Issues: Is the clause uncertain?
Holding: No, the settlement is valid. The clause sets out a condition
precedent.
Reasoning:
At each stage, the condition was a precedent condition to receive
payment. The court treats the “approved wife” condition as a condition
precedent to receive the payment from the trust.
1. Denning and Russell determined that the “Jewish blood” condition was
enough to satisfy the condition. The minimalist definition of the condition
provides some certainty.
2. Denning held that there is not reason why a third party (in this case the
chief Rabbi of London) could not settle the dispute, so long as the decision
is made in good faith and is binding. The parties still have the possibility to
go to court to adjudicate. The Chief Rabbi clause (settlement clause)
overcomes the conceptual uncertainty over what constitutes an
“approved wife”.
Rationale: A devise that provides a mechanism to resolve uncertainty
can be acceptable to maintain the grant.
Future Interests: Sequential Ownership of Interests in Land
We know that many people can have interest in land (doctrine of estates).
A remainder-person may wish to restrain a party from committing waste
that may interfere with the remainder-person’s interest in the property.
A remainder in property can be express [X to A for life and B in fee simple]
or implied [X to A for life] in which title in the property will revert to X upon
A’s death. Conditions attached to the grant will also create future interests
in the property, because of the possibility of reversion based on the nature
of the condition.
The common law, however, is suspicious of future interests in land
because of the possibility of an “abeyance of seisin” (see above).
Therefore, the common law has established a set of remainder rules when
a situation of a CONTINGENT REMAINDER is present; that is when the
grant is contingent or dependent on the unfolding of an event, which at the
time of the grant was uncertain.22
There is a difference between:
1. “To A for life, then to B” – nothing will prevent the taking for the future
interest (there is certainty and the future interest is VESTED), and,
 A has a life estate vested in possession (and interest),
 B has a fee simple in remainder vested in interest; when A
dies, B can take possession. B presently owns the interest,
and it is alienable. It can go to his heirs. Recall, that there are
words of purchase.
22
For example, suppose B is 15 at the time of a grant of a property to A by X [X to
A for life, then the remainder to B in fee simple when B turns 21]. Since B has yet
to turn 21, this remainder is contingent on this event, thereby creating an
uncertainty as to who will be seized to the property.
2. “To A until he marries B” – there is an element of uncertainty, because
the reversion is only a possibility. The possibility of reverter is
CONTINGENT on A marrying B.
Try an example: “To A for life, then to B’s heirs” (B is alive) – A has a
vested interest in possession, B’s heirs have a fee simple in remainder but
it is contingent, because there is uncertainty as to who can take. We do
not know who B’s heirs/next-of-kin are until B dies. Once B dies, the
interest becomes vested in interest until A dies, to become vested in
possession. Recall, these are words of purchase.
Three types of uncertainties can exist:
1. Is the person in existence? – the person charged with the remainder
may not “exist”, such as, an unborn child.
2. Is the identity of the person ascertained? – identity of the person at
the time of the grant may not be ascertainable, such as, a widow if the
grantee is unmarried. A person’s heirs are not ascertained until death.
3. Has the condition precedent been met? – a condition over which a
person may or may not have control.
In any of these cases, the property will revert to the grantor if an abeyance
of seisin results.
For a simple common law grant –with no mention of use or trust
The Remainder Rules clarify discrepancies and confusion in the
conveyance of title for inter vivos grants. A contingent interest must vest
no later than the end of the prior vested estate. Otherwise, the contingent
interest falls always.
Rule 1 – NO REMAINDER AFTER FEE SIMPLE: A grantor cannot grant
a reminder in fee simple if the grantor has already disposed of the property
in fee simple. There is nothing left to give.



“X to A in fee simple, then to B in fee simple” is invalid.
“X to A and his heirs, remainder to B and his heirs” is invalid.
“X to A and his heirs of his body, then to B in fee simple” is invalid,
since fee tails are now converted to fee simples by Conveyancing Law
and Property Act.
Rule 2 – TAKER IS VESTED IN IMMEDIATE POSSESSION/NO
SPRINGING FREEHOLDS: A grantor cannot grant an estate that will
spring up eventually, with the result that an abeyance of seisin exists
under that condition is realized. The rule does not apply to leaseholds,
because the landlord is in seisin at all times. The interest must pass at
present.

“X to A upon age 21 (A is 15)” is invalid.
Rule 3 – NO GAP IN SEISIN: A gap cannot exist between grants. The
common law, according to Mossman and Flanagan, adopts a “wait and
see” attitude to these grants. The remainder must vest no later than the
end of the previous estate.



X to A for life, the remainder to B in fee simple upon attaining 21.
X to A for life, then to B’s heirs.23
X to A for life, remainder to B if B marries C. It is possible that the
marriage may take place during the lifetime, and therefore, the
common law will wait to see.

X to A for life, then to A’s children, who are 21. If a child has reached
21 at the time of the grant, that child has a vested interest. If no
children is 21, the court will take a “wait and see” approach before the
end of A’s estate. Only those members of the class who satisfy the
contingency will receive the interest. Why not allow other
children to receive an interest? This is the rule in Festing v. Allen.
In a common law grant, where interests are contingent, only those
members who satisfy the contingency by the end of the prior estate
can benefit, and the others do not.
The contingency must be satisfied before the vesting.
Rule 4 – NO SHIFTING FREEHOLDS (applies to life estates only subject
to conditions subsequent).
23
If B dies after A, no one will have the interest.

“X to A for life, but if A goes bankrupt, then to B immediately” is invalid.
A would seem to have a qualified estate, but B’s interest cannot spring
up. The right of re-entry benefits the owner only.
It does not apply to determinable conditions, since the determinable
condition is part of A’s estate. If the determining condition occurs, it
“naturally” terminates the estate, and B can take over.

“X to A for life or until an event occurs, and if that event occurs, then
the remainder to B in fee simple” is valid.
Equitable Interests
Before the Statute of Uses (1535), we could consider the following grant:
To A (and his heirs) to the use of B (and her heirs). The common law
court recognizes the legal fee simple. The courts of equity recognized a
concurrent fee simple in equity.


A gets the legal title vested in possession (and interest).
B gets equitable title vested in enjoyment (and interest).
Why create an equitable interest? The grantor can avoid the incidents of
tenure. The grantor could not dispose of real property upon death except
to heirs (in which the rules of primogeniture applied).
Consider an example: To A to the use of B for life.



A has possession (legal fee simple), but no use.
B has an equitable life estate vested in enjoyment.
O (the grantor) has the resulting use (reversion in equity). O has a
present, vested interest.
This way we can account for the whole equitable fee simple. IS THE
WHOLE EQUITABLE FEE SIMPLE ACCOUNTED FOR? The default
position is that the owner holds the remainder in resulting use.
Equity was not bound by the common law remainder rules. Equity was not
preoccupied with the concept of seisin.
Rule 1 – NO REMAINDER AFTER FEE SIMPLE - To A (and his heirs) to
the use of B (and her heirs) then to the use of C (and heirs). C gets
nothing.
Consider for example: To A and his heirs, to the use of B and his heirs, but
if B marries C, then to the use of D and his heirs. This is equivalent to rule
1 and not rule 4, because rule 4 deals with life estates.




A is essentially a trustee: A has a legal fee simple vested in
possession.
B’s fee simple (vested in enjoyment) is a qualified estate, subject to a
condition subsequent. In equity, “to the use of D” is a valid interest.
The owner can create a contingent remainder after an equitable fee
simple, only if the remainder and the qualified fee simple are both
equitable grants.
D’s interest is vested automatically once B marries C. D has an
equitable executory (contingent) interest, “in the nature” of a fee
simple, contingent upon B and C’s marriage.24 D does not have an
estate vested in interest or enjoyment.
O has nothing left.
Rule 2 – NO SPRINGING FREEHOLDS – To A (and his heirs) to the use
of B (and his heirs) at 21 (and B is at age 15).



A is essentially a trustee: A has a legal fee simple vested in
possession.
B has an equitable executory interest, in the nature of a fee simple,
contingent upon his reaching 21.
O has the equitable fee simple (by way of resulting use) vested in
enjoyment subject to defeasance when B turns 21.
Rule 3 – NO GAP IN SEISIN – To A in fee simple, to the use of B for life,
then to the use of D and his heirs if/when after B’s death, C marries D.




A is essentially a trustee: A has a legal fee simple vested in
possession.
B has an equitable life estate.
D has an equitable executory interest, in the nature of a fee simple,
contingent upon its marriage to C, after B’s death. It is not a vested
interest!
O has an equitable fee simple (by way of resulting use) vested in
interest subject to defeasance, if C does not marry D after B’s death.
Now consider the rule from Festing v. Allen. “To A in fee simple, for the
use of B for life, then to the use of B’s children at age 21” will allow B’s
children to have an equitable interest, even if they do not reach 21 before
B’s death.
Rule 4 – NO SHIFTING FREEHOLDS – To A in fee simple to the use of B
for life, provided B does not marry C, but if B marries C, then to the use of
D.
24
D gets nothing until B marries C, therefore it is not an estate.



A is essentially a trustee: A has a legal fee simple vested in
possession.
B has an equitable life estate, subject to a condition subsequent.
D has an equitable executory interest, “in the nature of a fee simple”,
contingent upon B and C’s marriage, and contingent upon the
execution its right of re-entry.
 Each of the subsequent interests must be equitable, otherwise the
common law remainder rules apply! Be careful that the words “to the use”
are included in the contingent remainder.
Statute of Uses (1535) reproduced p. 212 in Mossman and Flanagan
The impetus for the statute was the problem with the avoidance of the
incidents of tenure by the creation of equitable interests. Consequently,
the statute allowed for the creation of legal interests, that earlier, would
have violated the common law remainder rules.
The statute applies to some uses, and not to others:
1. The Statute does not affect uses of personal property.
2. It does not apply if the trustee (feoffee to uses) is a corporation. For
example, the statue does not apply - “To A Corp. for the use of B”
3. The Statute does not apply when the legal and equitable grant are in
the same circumstanced: “To A for the use of A”
4. The Statute does not apply when the trustee/feoffee has an active use;
the Statute was meant to address bare uses.
After the Statute of Uses was passed, consider: “To A in fee simple to the
use of B in fee simple.”


A gets nothing
B gets a legal fee simple. The statute executes the use.
Consider the following grant: “To A in fee simple, to the use of B in fee
simple at 21”
Pre-Statute of Uses
A gets the legal fee simple vested in
possession
B gets an equitable executory
interest, in the nature of a fee
simple, contingent upon B’s turning
21
O has the equitable fee simple,
vested in enjoyment, by way of
resulting use, defeasible, once B
turns 21
Post Statute of Uses
A is left with nothing.
B gets a legal executory interest
in the nature of a fee simple,
contingent upon B’s turning 21.
O has legal fee simple, vested in
possession, defeasible when B
turns 21
The common law remainder rules do not apply to post-Statute of Uses
grants to uses, with one exception: the rule in Purefoy v. Rogers.
The rule in Purefoy v. Rogers states that if the interest can comply with the
remainder rules, it must. If the grant does not comply with the rules, then
Purefoy v. Rogers does not apply. This affects rule 3 in particular:
X to A for life, then to the use of B in fee simple upon attaining 21.
If B does not obtain 21 before A dies, B gets nothing according to the rule.
The grantor can get around this rule by adding the following words: X to A
for life, then to the use of B in fee simple upon attaining 21, either before or
after B’s death. This grant cannot possibly comply with the common law
remainder rules, and therefore the rule in Purefoy v. Rogers does not
apply.
The Trust – Post 1660 Uses
Consider the following grant: X to A in fee simple, to the use of B in fee
simple, to the use of C in fee simple.” Well, after the Statute of Uses, A
gets nothing, B gets the legal estate, and what would C get? Presumably,
there is nothing to give to C, because B would have the legal and equitable
fee simple. However, the statute only acts upon the first use. After 1660,
C gets the equitable fee simple.
When the grant gives a use upon a use, the Statute operates on the
first grant to uses in fee simple only. The Statute is exhausted in
situations with use upon use. There is a difference between use upon
use and use after use. The Statue fails to execute only after the second
fee simple!!!!
Consider the following: “To A to the use of A [or To and unto the use of A]
to the use of B.” Again, A gets the legal interest, via the execution of A’s
use, and B gets the equitable fee simple. This can defeat the operation of
the Statute of Uses.
Trusts are not subject to the rule in Purefoy v. Rogers or the common
law remainder rules!!!!!!
Consider the following: “Unto and to the use of A in fee simple, to the use
of C, when C becomes 21.” (C is 15).25 A has the legal fee simple, vested
in possession. C has an equitable executory interest, in the nature of a fee
simple, contingent upon C’s attaining 21. O has the equitable fee simple,
vested in enjoyment, by way of resulting use/trust, defeasible when C turns
21.
25
The Statute of Uses does not apply.
Testamentary Dispositions or Devise
BE CAREFUL, “grant” applies to inter vivos grants, while a “devise” applies
to dispositions (or real property) by a will.
Before the Wills Act, 1540, testator could not make a devise after death.
An unanticipated effect of the Statute of Uses, 1535, was that people could
not give their property to whom they wanted, because equitable interests
became legal ones. The common law remainder rules do not apply
except:
There are two approaches to looking at testamentary dispositions:
1. Treat all interests as legal executory interests, post-Statute of Uses,
with the rule in Purefoy v. Rogers in application.
Re Crow (1984) OHCJ
Facts: The testator has devised property to his grandsons for the life of
each (two parallel life interests for the life estate). On their respective
deaths, the “remainders” to his great grandchildren. In 1944, one
grandson dies (and there are no grandchildren), in 1983, the other dies,
and there are 10 grandchildren.
Issues: What happens to the first ½ of the life estate?
Holding: It reverts to the testator’s estate.
Reasoning: This gives rise to common law remainder rule 3. The
remainder is contingent upon there being children. Under rule 3, there is a
“wait and see” approach.
Since the rule in Purefoy v. Rogers applies, they are out of luck with
respect to the other ½ of the fee simple. That ½ interest will revert to the
testator’s estate. Since the interest could meet the contingency, it must.
The grandchildren had not satisfied the contingency before the first
grandchild’s life estate.
Rationale: The rule in Purefoy v. Rogers applies to wills.
Had the devise said: to the grandchildren born “before and after” would
have avoided the rule in Purefoy v. Rogers. The term “after” could not
satisfy the common law remainder rule, because there will be a built
in gap and therefore the rule does not apply.
2. Section 2 of the Estate Administration Act states that the real property
of a deceased person becomes vested in the executor of the estate, as
trustee, for the benefit of those who are entitled under the will. The trustee
is the person who holds the legal estate. The word “benefit” suggests that
the beneficiaries have an equitable interest. This would mean that every
interest in a will is an equitable interest. They are not subject to the rules
in Purefoy v. Rogers.
Had the court taken this view in Crow, the interests would have been
immune from the rule in Purefoy v. Rogers and the grandchildren would
have taken the impugned interest.
Re Robson (1916) UK
Facts: The testator grants property to and unto the use of H for life, then,
to the use of H’s children when they turn 21. At the time of H’s death, two
children were older than 21, and 2 that were younger.
Issues: Do we have legal interests in which only 2 qualify or equitable
interests in which all 4 qualify?
Holding: All 4 qualify.
Reasoning: This language is not adequate to create a trust.26 However, in
all cases when a person dies, the trustee/personal representative has the
legal estate.
The problem with this grant is that to create a trust the lawyer would have
to had said: Unto and to the use of H (which gives the legal fee simple), to
the use of H for life (which gives an equitable life estate), then to the use of
H’s children at 21 (which gives the equitable fee simple in remainder).
Rule Against Perpetuities
Is there a problem, if we create an indefinite sequence of life estates: “To
X for life, then to X’s son for life, then to X’s first grandson for life…” In
each case, the contingency must be resolved before the death of the
previous estate. The grantor could have indefinite control over the
property.
The rule against perpetuities limits how far the grant can control the
divestment of the property the future.
26
The testator grants property to and unto the use of H for life, then, to the
use of H’s children when they turn 21. At the time of H’s death, two
children were older than 21, and 2 that were younger. If you collapse to
and unto the use of H for life to a legal life estate, who has the legal fee
simple when the children take the use? Who is the trustee?
Consider the following: Unto and to the use of X, in trust, for the first of my
descendants to graduate law school in the 23rd century.
There are several models that the common law could adopt: it could
exclude interests by limiting the number of contingencies, the number of
generations, or a fixed period (such as 80 years). Of course, the common
law takes more nuanced approach.
“The interest must vest, if at all, within the lives in being, plus 21 years.”
The reason for this: a father wants to provide for his child, who is alive, but
also for a grandchild who will turns 21. It applies to all grants and
devises, legal or equitable, of real or personal property.
1. The interest must vest – if the interest is already vested, the rule does
not apply. It can vest in interest, possession, or enjoyment. Essentially,
we are looking at situations in which a contingent interest will vest outside
a person’s lifetime. If the person is already alive, there is no problem.
It is not enough that there was a possibility of vesting; the grantor has to
say with absolute certainty that it would vest. This is what makes a rule
severe against potential grantees. If I can imagine any scenario that the
property would not vest, then it is invalid.
2. If at all – if the contingency is satisfied, it must do so within the period.
For example, consider: “To X to the use of Y when Y completes the Boston
Marathon” (Y=100). There is no perpetuities problem, because if Y does
satisfy the contingency, Y has to do it while Y is alive.
The contingency does not have to be satisfied.
3. The life in being – is someone in existence at the time the disposition
takes effect. There are two categories:


IMPLICIT – where the grantor has not pointed to the person (perhaps
the grantor, the parent of a unborn child, a uterus, the grantee).
EXPLICIT – to extend the period, people will use a class of other lives
to set the period (i.e. Royal descendants clause).
The assessment is made at the time of the execution of the grant, or at the
time of the testator’s death (when the will takes effect).
Consider an example: “To X to the use of my first child to marry.” This
grant would fail, because the first child could marry 21 years after X’s
death. The later born child may not satisfy the grant in the perpetuity
period, if the grantor and the other children die one year after the death. It
would be an acceptable devise, because there is no possibility of the
grantor having another child after the grantor’s death. The only children
that could satisfy the contingency are those children that are alive.
They may not satisfy it, but that it ok.
Consider some more examples:
Grant - “To X to the use of my first child to marry”
X has a valid legal executory interest. It is a contingent interest, so is there
a perpetuities problem?
What are the lives in being? The grantor, X, and the living children.
Common Law
Perpetuities Act
The grantor can have a third child
Section 3 reverses the absolute
(C3), one year later. The grantor, X, rule. A mere possibility that it will
and the living children die. Once
not vest should not render the
the lives end, the third child may not conveyance invalid.
get married until he is 30.
Therefore, the contingency could be Section 4 presumes that the grant is
satisfied more than 21 past the
valid or confirm that the interest is
group’s death.
incapable of vesting.
The common law will “wait and see”
if C3 will satisfy the grant before
vitiating it.
The grantor could have said: To X to the use of my first child to marry 21
years after my death.”
Grant - “To B for life, remainder to B’s 1st child to marry for life, remainder
to the last survivor of B’s children. All three grants satisfy the remainder
rules (rule #3).
Common Law
Perpetuities Act
B has a vested interest, a life
estate, and therefore there is no
perpetuities problem.
The contingent interest for B’s 1st
child must vest before the end of
B’s life. Therefore, there is no
perpetuities problem.
The interest can vest 21 years after
B’s death because of the grant to
B’s 1st child to marry. This
remainder would fail for the
perpetuities problem. The fee
simple reverts to the grantor.
Section 4 of the Perpetuities Act,
takes a “wait and see” approach.
Be careful: the common law considers that a woman can have children all
the days of her life. The Perpetuities Act presumes that a woman is fertile
from age 12 to 55.
Grant - “To X to the use of my 1st child to reach 30” (The Statute of Uses
applies, therefore the breach of the remainder rules does not void the
contingency).
Common Law
Perpetuities Act
O could have another child after X’s Sections 4 and 8 would save the
grant. The Perpetuities Act reduces
death, 22 years later, which would
fail the perpetuities condition.
the age of the grant from 30 to the
age of the child, if the child falls
outside the perpetuities period. The
age condition is read down.
Grant - “To C for life, remainder to C’s widow for life, remainder to C’s
eldest surviving child at the death of C’s widow. All the interests will vest
accordingly.
Common Law
Perpetuities Act
If C’s widow lives longer than 21
Sections 4 and 9 save the grant.
The Perpetuities Act deems that the
years after C’s death, which fails
the perpetuity period.
“widow” is a life in being, which
resets the perpetuity period.
The Perpetuities Act is meant to prevent grants from failing the perpetuities
problem to recognize family arrangements.
Additional Notes:
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
CONCURRENT INTERESTS AND FAMILY PROPERTY
Concurrent interests require grantees to share possession.
McEwen v. Ewers and Ferguson (1946) Ont. HCJ
Facts: The will read: “the property… is to become property of my
daughters Bertha and Janet jointly and should they decide to sell the said
property each of them is to have an equal share of the proceeds.” Janet
claimed the right of survivorship because of joint tenancy. Robert claimed
that the property was held in common so that he could inherit his sister’s
share.
Issues: Was the grant for joint tenancy or tenancy in common?
Holding: The property is held tenancy in common.
Reasoning: Under the Conveyancing and Law of Property Act, if the will is
unclear to give intention to the grant, the court will presume that tenancy
is in common. The use of the words “equal share” indicate an intention to
divide the property.
Rationale: The words “equal share” indicate a division of the
property as tenancy in common.
We can critique this case since perhaps the interests will only be 50-50
when the property is sold and therefore the interest in the property is not
divided into shares, only the proceeds.
Secondly, perhaps the condition of division upon sale is repugnant.
If one joint tenant dies, the other joint tenants’ shares enlarge
correspondingly. Joint tenancy allows for the consolidation of title in one
person (which was the motivation for favouring joint tenancy in the
common law). However, this is balanced against the interests of fairness,
to persons who wish to convey their “interest” to someone else after they
die. When all of the joint tenants die at the same time, then the law will
presume that they held the property in common (see Succession Law
Reform Act).
Note: the Conveyancing and Law of Property Act presumes tenancy in
common in cases of realty. It makes an exception for trustees/executors.
Joint Tenancy and Tenancy In Common 27
Joint Tenancy
These tenants share all four unities:
possession, interest, title, and time.
27
Tenancy in Common
These tenants only share unity of
possession.
Corporations can also hold property as tenants in common. The dissolution or
“death” of the corporation will result in the consolidation of the title in the other
tenants.
Note: in McEwen, the sisters
interests shared all four unities,
though the court held that the grant
was for a tenancy in common, and
not a joint tenancy. Therefore,
these principles are not sufficient to
determine joint tenancy.
By shared possession, in both cases, one tenant cannot demarcate part of
the property since the tenants hold and interest in the entire property.
A joint tenant has an interest in the
While a tenant in common has a
whole estate. Unity of title means
fractional share in the undivided
that the joint tenants acquire their
whole.
interest at the same time and in the
same quality and duration.
For example: “To A and B in fee simple; ½ to A and ½ to B” creates a
tenancy in common.
Joint tenancy gives the right of survivorship to the others, which
means that a joint tenant cannot devise its interest because it
automatically dies with the tenant.
Why create joint tenancy?
1. Reduces the number of eventual owners of the property.
2. Avoids inheritance taxes.
3. Simplifies the devolution of property.
4. Better in situations with trustees.
Equity presumes that when the legal title is taken by one, but another
has provided the value for the acquisition, the first holds the property
in trust for the other.
Law Reform Commissions have investigated whether persons could be
joint tenants with unequal interests in the estate: to maintain the right of
survivorship, while at the same time, it might preclude a party from seizing
half the property (if the estate is held in jointly by two parties). 28
28
Tenancy by the Entireties adds a fifth unity: the unity of the person. When
property is conveyed to a husband and wife, together, they become tenants in
entirety. The right of survivorship, according to J.M. Glenn is “indestructible”.
Co-parcenary exists when a property owner dies intestate and the property is held
in common by female heirs, if no male heir survives the deceased.
Rights and Obligations of Co-Owners
A co-owner in possession may have to pay “occupation rent” to other coowners when: (1) the possessor has ousted the other [i.e. when a coowner threatens violence], (2) by agreement, or (3) possessor is acting as
an agent or bailee for the others.
Co-owners may be compelled to partition the estate.
Osachuk v. Osachuk (1962) M.C.A.
Facts: A husband and wife separated, each living in one of two houses
that they had purchased while married. The husband rented part of the
house he occupied, and the wife sued asking for an accounting of the
rental income.
Issues: As a “joint tenant” is the husband responsible to account to his
wife?
Holding:
1. Occupation issue
Both the husband and wife are full owners (given that that are tenants in
common) and therefore, neither is precluded from exercising its tenancy.
No party can claim against the other for occupation rent unless it means
one of the three conditions above (Mrs. Osachuk’s claim fails).
2. Rent issue
When the apartment was rented, the income derived is income generated
from the realty and therefore it is shared by both tenants (Mrs. Osachuk’s
claim succeeds).
When the apartment is occupied, but not rented, the other co-tenant could
have insisted upon the payment of rent (Mrs. Osachuk’s claim fails).
Likewise, the other tenant could have found a paying renter. A court may
order rent to be paid, if one co-tenant offers free occupation to a third
party. The court dismisses Mrs. Osachuk’s claim that not renting the
property is wilful neglect of it.
3.Disbursements
The court reversed the finding of the trial judge that compelled the wife to
repay all of the mortgage payments. All co-tenants must share the
payment on the capital of the mortgage in proportionate shares
because that contributes to the increased value of the house. The
occupier is responsible for the current interest on the mortgage, taxes,
bills, etc. because this is cost associated with the upkeep of the realty and
it does not increase its value.
If one co-tenant claims for the interest (or any other current disbursement)
then it will have to pay occupation rent.
4. Material changes to the land (not in Osachuk).
The court will not impose liabilities on a co-tenant that is not in occupation
of the realty. At the time of the sale, however, if the value of the property
increases, then the co-tenant that made any improvements can ask for an
accounting and receive a return on its costs. If, however, the
“improvements” decreased the value, then the occupier may be
responsible for the loss (as waste).
Severance of Joint Tenancy
Severance of joint tenancy will extinguish the right of survivorship.
A.J. McClean, “Severance of Joint Tenancies”
The Chancery Court in Williams v. Hensman articulated three mechanisms
to sever joint tenancy:
1. A joint tenant may act unilaterally to sever the share,
2. Mutual agreement,
3. The parties treated the property as tenancy in common, and therefore
severance can be inferred.
Courts of equity favour tenancy in common and this is presumed in
Canada unless express grant of joint tenancy is made. In fairness to
third parties transacting with a joint tenant, the court will consider
this as an act of severance so that the third party can have an
undivided share.
Mossman and Flanagan explain that contracting for a mere encumbrance,
like an easement, will not render the joint tenancy a tenancy in common
(see Re McKee).29
29
In the context of death during divorce - in Robichaud v. Watson, parties
that were in negotiations to separate their property could be assumed to
be tenants in common. The attitude and intention during the negotiation
will dictate the nature of the tenancy: for example, if the parties do not
address the matter of joint tenancy, the court will maintain joint tenancy
(see Morgan v. Davis). See also, Kissick Estate v. Kissick, where although
the parties lived in separate dwellings, there was no evidence or
agreement that either spouse intended to sever joint tenancy.
In the context of a murder – in Re Pupkowski, the court decided that the
estate would accrue to the survivor (murderer) with an undivided half
interest in a constructive trust for the victim’s estate.
1. Knowlton v. Bartlett (1984) NBQB (by unilateral act)
Facts: The respondent and his wife owned property as joint tenants.
Following a marital dispute, the court ordered that the respondent pay his
wife a lump sum in exchange for her interest in the property. This
exchange never occurred. The wife executed the deed for herself and left
it to her brother, the plaintiff, who claims the share in tenancy in common.
Issues: Did the wife and respondent hold the estate in joint tenancy?
Holding: No. They held it as tenants in common.
Reasoning: The NB Property Act allows a person to convey property to
himself. Per Murdoch v. Barry, this action would sever joint tenancy –
which the judge found occurred in this case. As for the divorce decree, it
did not vest any title in the respondent. He also made no effort to pursue
the judgment to acquire full title.
Rationale: A party can unilaterally sever joint tenancy by conveying a
property to himself.
We can critique this judgment on several grounds:
1. The relevant provision NB Property Act did not conform with a similar
Ontario statute, or with the other sub-sections of the section. The subsection was missing the key words “in a like manner” which would suggest
that a joint tenant can convey property to itself in a common law grant
(without having to resort to a making a grant to uses).
2. If this is a recognition of the common law position (legislation is not
supposed to overrule the principles of the common law, subject to express
statement) then the wife did not convey the property in a way that would
sever the joint tenancy.
2. Burgess v. Rawnsley (by mutual agreement)
In Burgess v. Rawnsley, one party offered to buy the interest of his joint
tenant after the break up of the relationship. The parties never settled on a
final offer; however, Denning held that this constituted a sufficient
“agreement” or one could say consensus that the property was no longer
to be treated as subject to a joint tenancy.
The negotiation was evidence of the state of mind of the parties to treat
their interests as separate shares as tenants in common.
In the context of unequal payments – where the contribution is unequal,
the unity of interest is unmet and therefore tenancy is held in common (see
Re Ali).
Robichaud v. Watson (1983) O.H.C.J. (by course of conduct)
Facts: The plaintiff, Robichaud’s mother, sought a declaration that
residency of an estate held in joint tenancy among his son and wife, the
defendant, was severed before her son’s death. Both parties purchased
the estate as joint-tenants and they possessed the house together for
three years, until 1974. The wife made all of the mortgage payments until
she left in 1974. The husband continued to make improvements until his
death in 1979. After the wife fled, she instructed her attorney to recovery
her share in the property in 1975. The property was sold in 1979 after he
husband’s murder.
Issues: Is the plaintiff entitled to severance of the joint tenancy?
Holding: Yes,
Reasoning: The plaintiff submitted when the parties attempted to
negotiate a settlement in 1975 that was enough to sever the joint tenancy.
The court must look at the intentions of the parties. A “course of dealing”
is sufficient to find that the parties severed the joint tenancy. This can
include letters or correspondence with the other party.
The judge distinguishes another case, Rodrigue v. Dufton, in which
the husband abused his wife, she left, and he continued to reside in the
home. The court found in that case that joint tenancy had not been
severed. This is a problem in this judgment!!!
In this case, the court determined that all that the defendant wanted was
her “beneficial interest” and then she would have released the property to
her husband. The plaintiff, therefore, recovered her son’s share less the
occupational rent.
Rationale: If both parties negotiate on the basis of holding separate
shares in the property, then they treat the property as being subject
to tenancy in common.
We know from this case that although the dissolution of a relationship is
likely not sufficient to sever a joint tenancy, but the conduct of negotiations
in which the parties both believed that they could treat their interests
as tenancies in common is sufficient.
Partition
1. Is partition or is sale appropriate?
Cook v. Johnston (1970) O.H.C.J.
Facts: Section 3 of Partition Act provides that a “guardian may take
proceedings for the partition of land or for the sale, if the sale is considered
more advantageous to the parties.” In this case the parties co-owned an
island with two separate cottages. A cottage was built on part of the
island. The parties have something of a “timeshare” arrangement.
Issues: Should the island be partitioned or sold?
Holding: It should be partitioned.
Reasoning: The parties had used the island as a summer home for a long
time. If it was sold, both parties would lose the ability to spend summer
vacations there. The money received from a sale would not provide
adequate compensation for loss of the rights to the property. The property
could be suitably divided, based on the interests of the two parties.
Rationale: Partition may be a favourable option, where the sale of the
property would provide less benefit to the parties.
The court however fails to consider that the partition of the island might
reduce its value.
2. Can the court say no to partition?
Recall Knowlton v. Bartlett. In that case the plaintiff wanted to bring an
action for the sale of the land. Although the judge in that case held that
partition would not be feasible, we can ask ourselves whether this is true
given that the estate is quite large.
The judge delays the sale, given that the defendant, Mr. Bartlett is elderly,
has been living in the home for a long time, and the property has been in
his family for more than one generation. We can see the analogy here
between Mr. Bartlett as a dependent and children in referenced cases.
Additional Notes:
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RIGHTS IN THE LAND OF ANOTHER
There are many situations in which one party exercises rights in land
which can compromise the exclusive dominion of ownership. Examples
include: co-ownership, adverse possession, qualified estates, “natural
rights,” personal rights, and granted proprietary rights, such as a
easements.
The court might decide that a particular grant is a license or a mere
personal right if it does not accommodate the dominant tenement.
The court might also decide that it is a possessory right if it displaces the
servient owner.
Easements
The Gypsum Carrier case shows reluctance in the common law to
recognize new interests in land. We have seen this before (in Statute Qua
Emptores) with respect to subinfeudation, as well as with the Associated
Press and Victoria Park cases.
Gale on Easements identifies the four requirements:
1. Dominant tenement and a servient tenement
 These tenements must be adjacent (Ackroyd v. Smith). Mossman
and Flanagan suggest that policy justification for limiting who can
hold an easement – that is, to limit the burdens on the land – is not
relevant today, because of the modern registration systems.
2. Easement must accommodate dominant tenement
 It follows that the right must attach to land. If it merely benefits a
person it presupposes that the right is a personal right like a
license. By implication, however, a right in land will probably
benefit its occupier.
In re Ellenborough Park [1956]
Facts: Homes were built adjacent to (and in a short distance away from) a
park. The vendors granted the purchasers a right to enjoy the park.
Issues: Did the right constitute an easement? Did the right benefit the
dominant tenement?
Holding: Yes.
Reasoning: Evershed MR of the Court of Appeal determined: “the use of a
garden undoubtedly enhances and is connected with the normal
enjoyment of the house to which it belongs.” The judge seems to be
making a fairly subjective assessment of what it means to be a homeowner in England at the time. Had this been free access to a zoo,
however, the court would not have accepted the grant as an easement.
The right of enjoyment to these few [non-adjacent houses] does not
negative the presence of the necessary “nexus” between subject matter
enjoyed and the premises to which the enjoyment is expressed belong.
The judge also had questions in relation to the utility of the easement.
Evershed held that the right was for the benefit of the health of the
residents of the dominant tenement. He was also critical of the utility
requirement, as he referenced Duncan v. Louch in which the court
acknowledged jus spatiandi.
Rationale: In some situations, the dominant and servient tenement
need not be directly adjacent, so long as the “nexus” exists.
The right to walk over someone else’s land may be sufficient to form
the subject matter of a grant.
Perhaps the grant supplies something that is deficient or lacking in the
dominant tenement.
Mossman and Flanagan suggest that this case represents an exception to
the general rule, because of the nature of the interest involved: that being
a communal garden (not a business interest).
Jengle v. Keetch and Depew v. Wilkes seem to be conflicting judgments
with respect to parking as exceeding a right of way. The cottage owners in
Depew showed that parking “was reasonably necessary for the better
enjoyment of their property.”
3. Independence of ownership
4. Easement must be capable of forming the subject matter of a grant.
The English Court of Appeal in Ellenborough Park determined that a
grant may fail to meet the fourth requirement because:

The rights claimed are too vague (this could have been an issue in
Ellenborough Park, however, the court understood what it meant to
enjoy the park for recreational purposes),


The rights substantially deprived the owner of proprietorship or
possession (an easement will always interfere with possession, but
the question becomes whether it displaces possession),
The rights were of mere recreation/amusement and not of
utility/benefit.
Shelf Holdings Ltd. v. Husky Oil Operations Ltd. 1989 Alta. CA
Facts: Husky obtained a grant from a farm owner to build a pipeline under
the farm. The grant used the language of “easement” and “right of way.”
Husky agreed to compensate the grantor for damage caused. Husky was
entitled to make repairs to the pipeline.
Issues: Is the grant a right of way or another interest?
Holding: An easement (right of way).
Reasoning: The court recognized that no easement exists if the grant
looks like a complete transfer of rights to the grantee. The court
distinguished this case from Metropolitan R. Co in which the claimant in
that case had built a tunnel (and the court subsequently found that the
claimant had a right of ownership, not an easement, because exclusive
use of the land does not equate with an easement).
The examination of this grant revealed that Husky did not detract from the
grantor’s rights of ownership. The owner was prohibited from erecting
works over the strip where the pipeline was placed, but otherwise, the
grantor had full use and enjoyment of the land. Husky was also prohibited
from interfering with the drainage of the lands and would have to
compensate the grantor for such damage.
The court will consider possession in one of two levels of generality – it
accepts from a broad perspective that a pipeline will only displace
possession of a small strip of subterranean soil, relative to the whole farm;
not that the farm owner is deprived of exclusive use over that space.
Phipps v. Pears [1965]
Facts: The plaintiff wants to recover for damage done to a wall between
its house and the adjacent house, after the adjacent house was torn down
(exposing the wall to the elements).
Issues: Does the plaintiff have an easement?
Holding: No.
Reasoning: The plaintiff alleged that it had a right of protection from the
weather. Denning explained that the common law is weary about creating
new negative easements, because they unduly restrict a neighbour from
enjoying its land. This poses an undue limitation on the land because it
hinders the land’s development.
Note that there is not express grant of an easement in this case, which
creates an added difficulty. Easements by prescription require
publicity and notoriety, but this would be difficult in the case of a
negative easement, because they do not require the dominant owner to do
anything publicly.
Rationale: The common law does not recognize a right of protection.
The distinction that Denning makes seems unusual, since both positive
and negative easements place restraints on the servient tenement.
In Laurie v. Winch, the Supreme Court of Canada determined that even if
the grant makes no express reference to the dominant tenement, the
easement can still be created expressly (so long as the servient tenement
is mentioned).
The court also finds that it can interpret the changing circumstances to
specify or narrow down the easement.
1. Non-derogation: in Wheeldon v. Burrows the court articulated two
related principles if and when at one point multiple domains were part of
the same property and the original owner exercised a “quasi-easement”
though the third requirement per Ellenborough was absent.
If the owner grants the “dominant” part of the land, and retains the
servient, the court will presume that the grantee can continue to exercise
the easement over the new servient land. That is “all continuous and
apparent easements necessary for reasonable enjoyment of the property
are granted.
However, if the owner grants the “servient” part of the land, and retains the
dominant, the court will not recognize the easement, subject to the
following exceptions:
 Express reservation in the grant,
 Necessity,
 Factual reciprocity.
2. Necessity: courts have recognized these easements in cases where a
person’s land is landlocked: otherwise the land will not be able to be used,
practical necessity is sufficient (over absolute necessity), water access is
not sufficient. In Hirtle, the court decided that mere inconvenience was
not sufficient to give an easement (peninsula case). However, absolute
or practical necessity was sufficient. Water access to the land,
especially when the waterway is not used for navigation and transportation
probably will not count as a reasonable means of access.
We should note, however, that it would seem fairer for the “dominant”
owner to prove the necessity, and not for the “servient” to have to go to
court to defend the exclusivity of its interest in the land.
Note that in Wong, Lord Denning held that since the Public Health
Authority required Wong to build a ventilation unit, and because Wong was
required to meet the terms of his lease, Denning recognized an easement
by necessity otherwise Wong would have been unable to use the
premises for the purposes that the parties had envisaged.30
3. Common intention: in Barton v. Raine, the Ontario Court of Appeal held,
“there was, by necessary inference from the circumstances in which the
conveyance was made, a common intention on the part of both the father on the
one hand and the son on the other, that after the conveyance, each of them
would continue to use the driveway in the same manner, as in fact, it had been
used since the late 1920s.”
There was no need to make an easement because they did not consider
that the father would have to ask permission to use the driveway. Since
the property was conveyed to family, the inference that the easement
exists is easier to make.
When circumstances change, the easement may disappear. For example,
if a party has an easement by necessity, and the state builds a road that
connects to the party’s land, the easement by necessity will end.
It would have been difficult to argue necessity, because the parties could
have accessed the garages at issue by another means, or they could have
used it for other purposes.
4. Mutuality/Reciprocity: Recall the situation in Wheeldon with a twist – the
divisions of the land both act as “dominant” and as “servient” tenements.
In such cases, if one or both parts are alienated, the quasi-easements will
continue, if the reciprocity flows to and from the lands involved (i.e. the
flow onto and subsequent drainage of water).
Easements are supposed to remedy defects in the land, so it makes sense
to imply easements in these four situations.
30
Easements can arise in lease situations.
In Gypsum, the court found that the right of a railway to pass over a rail
bridge was merely a personal right (licence) but the facts of the case seem
to suggest that the right met the four requirements of an easement. Even
if the grant of an easement was not express in the contract, the holding in
Barton might suggest that the parties in Gypsum intended to create
proprietary rights so that if one railway merely replaced another, if would
also have an easement over the rail bridge and subsequently, if would not
have contract with the bridge owner.
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