CML PROP - 1
FALL 2014
PROFESSOR GOLD
Identifying Property
Interests – Page 2
Rights (flow) – page 52
Credit to: HAENYO …. ‘Make shapes – not hates’
Texted largely recycled from previous summaries – Especially M. Shortt
REMEDIES
– page 73
CML PROP - 2
Identifying Property
Interests
Present Interest
Easements
Future Interest
Adverse Possession
Single
Ownership
Concurrent
Ownership
Traditional
Revisionary
Interest
Remainder
Interest
Leaseholds
Inconsistent
use
CML PROP - 3
Present Interest
Single Ownership
Freehold Estate (Tenures
abolition act of 1660)
The Conveyancing and Law
of Property Act,s.5
Succession Law Reform Act
s. 26
Term (years or:)
Conditions (specific interests
attached to the fee; NOT DEATH
OR A DATE PASSING );
Amibguity interpreted in favour of
Grantee Re McKellar
“but if”
“for the life
of A”
Life
Estate
“to A
for
life”
“..A and
to heirs”
Fee
Simple
Absolu
te
Walsin
gham
Fee Tail
(invalid)
Re
McKellar
report on joint tenancy & co-owners)
(default in
ambiguity)
Re
McColgan
C not met =
grantor must
got to court to
reclaim land
:Determina
ble
Condition
(Primary
interest in
condi) “as
long as”
Mackay v.
Nagel
Land not
granted till
condition is met
(breach =
C void =
becomes fee
simple
absolute
C void = land
returned to
grantor
Grounds for voidness: Uncertainty (clayton v. ramsden,
Mckay v. Nagel); Public Policy (rare, courts us uncertainty
instead); Restrain on Alienation (LaurenvIronOre )
Equal share
in same
estate; if
one joint
tenant dies,
other(s)
receive(s)
the dead
tenant’s
share
Exclusive possession for fixed time
British American Oil Co & Neda Rahimi v.
Regional OR Intentionally created by parties
Metro-Matic & Read Marketing
Tenancy in
Common
(presumed)
Defeasible
Fee
Adverse poss.
Starts)
Life
Estate pur
autre vie
“to A for
the life of
B”
Concurrent Ownership (BC law institute
Joint
Tenancy
Condition
Subsequent
(Primary
interest is
giving land)
Leaseholds (absolute right to exclusive
possession against all, including the landlord,
for term provided by lease); divisable,
desecndable
Forms: 1-estate for years (fixed term, ends automatically);
2 - Periodic Tenancy (month-month; ends with notice); 3 Estate at will (agreement of parties); 4 - estate at sufferance
(by operation of law; remaining at end of other lease)
holders have
separate estates in
the same land; can
sell/descend estate
Conditions:
Unity of (1)
time, (2)
title, (3)
interest, and
(4)
possession
(must meet
all, or:
Severance
Obligations
Reverts
to
tenancy
in
common
Termination (Surrender
(acceptance by both parties)
Landlord
Tenant
Abandonment (tenant leaves
and stops paying rent).
Covenant insufficient
1. quiet
enjoyment
Owen v.
Gadd; Kenny
v. Preen
2. Non-Derogation
from Grant (indirect
interference)
1. pay
rent;
2.
Follow
use
restrictio
ns
3. Duty
to repair
3. fit for use Smith v.
Marrable; Sutton v. temple;
hart v. windsor
Property Remedies Also Goldhar
Contract: (Highway Properties;
Lehndorff ; Homer)
Notice: North Bay
Mitigation?: Commercial Credit;
Postal Promotions; Grouse
Mechanical; Windmill Place
Revisionary Interest
CML PROP - 4
Future Interest
Conveyancing and Law of Property Act; Succession Law Reform
Act,
any interest retained by the grantor: for example, in the grant
"to A for life" the grantor, assuming that he or she holds the
fee simple absolute, has not disposed of his or her full
interest. The grantor has a reversion in fee simple. A
reversion does not need to be specified, it arises by operation
of law from the failure by the grantor to alienate the entire
interest.
No
Does it cut short the interest of another?
Will grantor regain
property ONLY if
a some condition is
violated?
Yes
No
Does the grantor automatically
regain interest? Or is it a right to a
claim?
Yes
Is there an ascertained person? (vested
interest)
Yes
Vested Interest (specific
person)
auto
right
No
Unvested Interest (don’t know who, ex.
My oldest grandchild) Mackay v. Nagle
Right of Re-entry (follows fee
simple subject to condition
subsuquent) [adverse poss, begins
to run]
Possibility of Reverter
(follows a fee simple
determinable/ condition
precedent)
Remainder Interest
an interest created in a third party which follows the
granting of an estate less than the fee simple absolute. For
example, in the grant "to A for life, then to B", B has a
remainder in fee simple but no right to possess the land
until A dies. Note that in this example the grantor has no
reversion -- he or she has given away the full fee simple.
All are subject to: Doctrine of Waste: tort, liability for current
estate-holder that changes the physical nature of the land/buildings.
Anyone with a future interest in the land can sue you for waste (like
the owner if you’re a tenant). Permissive waste (allowing structures
to fall in to disrepair) is not tortuous – unless the grant specifically
says that it will be for a particular conveyance. Negative waste
(quarrying stone or logging timber) is tortious, but again this can be
changed by declaring that the estate-holder is “unimpeachable for
waste” in the grant. K Gray – Elements of land law
Note: Interest must vest after 21 years to someone who is alive [vested interest]
CML PROP - 5
Adverse Possession
Yes
No
Continuous possession for statutory
period (dispossession 10 years, title 15 years)
Limitations Act s. 4 and s. 15
Treloar v. Nute
How many dispossesors?
Mulcahy v. Curramore (can
be multiple)
multiple
Yes
No, last possessor in AP position
one
No
Adverse
Possession
No
Open and notorious possession? (to put
true owner on notice?) (Lundrigans)
Colour of title? (Exception for
defective title)
Wood v. Leblanc
Yes
(1) Intentional
(Beaudoin v. Aubin and
Gorman v. Gorman
– to exclude all), (2)
Actual ((Lundrigans)
possession of land); (3)
Exclusive?
Re St. Clair Beach
Estates
Evidence list: Mendes
Da Costa and R.
Balfour
Title holder retake possession at any point?
Trustees, Executors and Agency v. Short
No
Yes
Yes
No
No
Does the province have a
relevant Land Titles system, or
is it crown land?
Limitations Act s. 16
No
Yes
Inconsistent use with title holder?
Masidon Investments v. Ham
Teis v. Ancaster Town (does not apply to error);
Keil v. 762098 Ontario Inc et al;
Georgco Diversified Inc. v. Lakeburn Land Capital
Yes
Adverse
Possession!!
See also: Beaudoin v. Aubin (Error irrelevant to adverse possession); Wilkes v. Greenway (adverse possessors get land only not
attached rights – easement)
CML PROP - 6
Easements
is a non-possessory property interest in land, and if valid runs with the title
Requirements (Ellenborough
park)
(1) A dominant and subservient
tenement;
(2) must “accommodate” the
dominant tenement
(“sufficient nexus” between
enjoyment of the right and use
of the tenement);
(3) dominant and servient
owners cannot be the same
person (Re Lonegren et al and
(cannot expand rights
granted) Malden Farms ltd
v Nicholson; Re Gordon et
al and Regan; Wong
Creation
Grants
Prescription / Presumed Grant (Gain
an easement through use) Garfinkle
Express
Grants and
Reservations
Implied
Grants and
Reservation
s (Rules:
(Grants
Interpreted in
favour of
Grantee)
Scope of Easement
Statute (measured
Wheeldon v
Burrows)
backwards from
litigation 20 or 40
years use)
Limitations Act. S.
31 and s. 32
doctrine of
lost modern
grant (any 20
years use)
Storm
Positive Easement
(allows a person to do
something on the
burdened land) Wong
Negative Easement
(imposes restriction on
servient tenant not to do
something); Phillips v. Pears
Interruptions Axler
Exceptions
Reuben)
(4) rights must be ones that can
otherwise be given in a
property grant
A- Rights of way
of necessity Road
Access Act; Nelson
Nickerson v
Barraclough,
(disclaimer in grant)
C - Implied
easements (during
If one standard not met = License
(Hill v Tupper); Cheshire, Modern Real
Property
partition and sale
any necessary
easements will be
implied) Wong;
Nelson
B -Mutual
Easements:
Richards v Rose
(need not be
explicit)
D - Give effect to
intentions of the
parties: Pwllbach
Colliery Co v
Woodman; Sandom v
Webb (rejected);
Barton v Raine
Requirements: Ellenborough
park; Only against fee simple.
use must be: without secrecy,
End of Easements
without violence and without
permission (Storm)
Defences: Oral permission (works only against 20-year
prescription), written permission (good vs both), not “user as of
right” Axler; Storm (good vs both – see below), interruption for
more than one year, no prescription with respect to cables or wires
(Limitation Act s 32), no air or light easements
CML PROP - 7
Present Use
PROPERTY INTERESTS IN LAND
Fee Simple Absolute
•
highest form of estate
•
form: “To X and his/her heirs”
•
“To X” – words of purchase
•
“and his/her heirs” – words of limitation
Defeasible Fees
Types
•
which type of grant depends on the intent of the grantor
•
Courts prefer to grant as high an interest to the grantee as possible
•
an alternative way of saying this is that the courts read the grant against the grantor
•
this means that if the language permits of more than one interpretation, the courts will prefer to find that a grant is a fee simple
subject to condition subsequent over a determinable fee simple since a fee simple subject to condition subsequent is a higher interest
in that on breach of the condition, the land does not automatically revert back
Determinable Fee Simple
•
form: “To X and his/her heirs so long as ...” or similar wording to “so long as”
•
Although courts do not always respect this, particularly if they want to get rid of the condition/limitation
•
the grant is inherently limited by the phrase following “so long as”
•
on breach of the limitation, the land automatically reverts back to the grantor or his/her estate
•
Courts will examine the entire context of the grant and not simply the words used so that, despite using words such as “so long
as” they may not find a determinable fee simple
Fee Simple Subject to Condition Subsequent
•
form: “To X and his/her heirs but if ...” or similar wording to “but if”
CML PROP - 8
•
•
•
the grant is conditioned by the phrase following “but if”
on breach of the condition, the grantor or his/her heirs has a right of entry
only if the grantor etc. exercises the right of entry does the land revert back
Fee Simple Subject to Condition Precedent
•
form: “To X and his/her heirs, on condition that X first ...”
•
the grant does not take place until the condition is satisfied
Fee Tail (not on exam)
•
form: “To X and heirs of his/her body”
•
land passes to children
•
can be more specific about which children (e.g. “male heirs of his/her body”)
•
can no longer be created
Life Estate/ Estate pur autre vie
•
form of life estate: “To X for his/her life”
•
form of estate pur autre vie: “To X for the life of Y”
•
estate is fully alienable but lasts only so long as the life of the person in question
•
if holder of estate pur autre vie dies before the life in question, then heirs of the holder get remainder of the estate
•
life tenant/holder of estate pur autre vie cannot commit waste
o The Conveyancing and Law of Property Act, R.S.O. 1990, c. C-34, s. 5 states:
o
o
o
o
o
o
o
o
5 (1)
In a conveyance, it is not necessary, in the limitation of an estate in fee simple, to use the word "heirs".
(2)
For the purpose of such limitation, it is sufficient in a conveyance to use the words "in fee simple" or any other words
sufficiently indicating the limitation intended.
(3)
Where no words of limitation are used, the conveyance passes all the estate, right, title, interest, claim and demand
that the conveying parties have in, to, or on the property conveyed, or expressed or intended so to be, or that they have power to
convey in, to, or on the same.
(4)
Subsection (3) applies only if and as far as a contrary intention does not appear from the conveyance, and has effect
subject to the terms of the conveyance and to the provisions therein contained.
CML PROP - 9
o
(5)
This section applies only to conveyances made after the 1st day of July, 1886.
Succession Law Reform Act, R.S.O. 1990, c. S-26, s. 26, which states:
26.
Except where a contrary intention appears by the will, where real property is devised to a person without words of
limitation, the devise passes the fee simple or the whole of any other estate or interest that the testator had power to
dispose of by will in the real property.
TENURE AND ESTATES
K. Gray, Elements of Land Law - (p. 149)
o From its earliest origins land law has comprised a highly artificial field of concepts, defined with meticulous precision,
with the result that the inter-relation of these concepts is not unlike a form of mathematical calculus
o The law of land is logical and highly ordered, consisting almost wholly of systematic abstractions.
o It is from this interplay of naked concepts that the creature of modem land law ultimately derives. English law cannot be
properly understood except in the light of its history, and it is in the doctrines relating to tenures and estates that the
historical roots of English land law are to be found.
Megarry and Wade, The Law of Real Property
Words such as "while," "during," "as long as," "until" and so on are apt for the creation of a condition precedent, whereas
words which form a separate clause of defeasance, such as "provided that," "on condition that," "but if," or "if it happen that,"
operate as a condition subsequent.
Walsingham's Case
F
I
D , 'he who has a fee-simple in land has a time in the land without end, or the land for time without end
R "the land itself is one thing, and the estate in the land is another thing, for an estate in the land is a time in the land, or land
for a time, and there are diversities of estates, which are no more than diversities of time".
See: fee simple definition
F
Re McKellar (On-HC, 1972)
a 1925 will gave the testator's property "to my nephew Archie McKellar .... and if Archie McKellar has any family then
...[the land] becomes his own". Alternative dispositions were provided in the event that Archie McKellar did not have any
CML PROP - 10
"family". One proposition advanced at trial was that this should be construed as meaning "to Archie McKellar and his
family" and thus as "to Archie McKellar and his heirs" - that is, as a fee tail.
I
D the court rejected this interpretation in favour of saying that Archie had been given a life estate combined with a
conditional fee simple. The condition was that he have children, and if he met that condition he would receive the fee
simple.
R Courts don’t like to invalidate property rights, use conditional fee simple, to avoid a fee tail finding
See: conditional fee simple (as a way around a fee tail)
Mackay v. Nagle et al (1988),
F
The testator left his property to his wife for life "and thereafter to my living children in equal shares". His four children were
alive when the will took effect, but one died during his widow's lifetime.
I
D
Did the word "living" mean children alive at the time the will took effect, in which case the now-deceased child's interest
would be vested and would descend to his heirs? Or did it mean living at the time the widow's life estate expired, in which case
it would be a contingent interest, the condition precedent being surviving the widow? In coming to the conclusion that the
interest was vested, the court considered extrinsic evidence of the testator's intention when the will was made. But it relied
largely on a series of cases establishing the principle that, in ambiguous cases, "the courts generally follow a rule of
construction favouring early vesting".
R
in ambiguous cases, "the courts generally follow a rule of construction favouring early vesting [= granting]". (means in
ambiguity court will choose to an interest already passed, rather than characterize it as a condition precedent)
Dis
Granting of land interpreted infvaour of the grantee
See: estates; granting of land; future interest in land; condition precendent, interntion, burden of proof
F
I
D
Re McColgan, [1969]
The trust company executing M’s will seek guidance on the interpretation of his will. M bequeathed a house in Ontario to K
“until her death or until she is not residing therein personally, whichever shall first occur, and thereafter to L [on the same
conditions].”
What interest does K have in the home? [A life estate subject to conditions subsequent.]
The rule of construction for wills is to achieve the “expressed intention” of the testator. The question here is whether M intended to convey a mere
license on K, or a life estate. The language of this will goes beyond that expected for the creation of a mere license and suggests a life estate. The
condition, which starts with “until” nevertheless seems to be an external to that grant and is thus a condition subsequent rather than a determinable
CML PROP - 11
estate.
R
Limitations which are “a divided clause from the grant” create conditions subsequent, not determinable estates.
Dis
See: estates; granting of land; future interest in land, condition subsequent
F
I
D
R
Clayton v. Ramsden (p.274)
B left his daughter a large inheritance, but attached the condition that if she “shall at any time…contract a marriage with a
person who is not of Jewish heritage and of the Jewish faith then as from the date of such a marriage” her interest would
“cease and determine.” She married C, who not Jewish in any sense. The Cs attack the validity of the clause.
(1) What kind of condition is this? [Condition subsequent] (2) Is it void for uncertainty? [yes]
: Lord Killowen: Believes both “Jewish parentage” and “Jewish faith” are too vague.
Lord Romer: “It is the duty of the court to solve the [definitional] problem if it be possible to do so.” Romer believes the “Jewish parentage” part is
void for vagueness. This invalidates the entire condition, not just the “Jewish parentage” part (which would leave the “Jewish religion” requirement
intact): “His intention cannot be given effect to because he has not chosen to express it in sufficiently unambiguous terms, but that does not justify
the court in making a new will for him and treating him as if he had expressed a different intention altogether.”
(1) Courts will police restraints on marriage very closely for vagueness; (2) If part of a condition is vague the entire condition
is void for vagueness (i.e. vagueness is not severable within the condition).
Dis
Notes: Context matters, in the case of marrying a roman catholic person, uncertainty wasn’t applied (due to history of cml England
– King and prime minister cannot be roman catholic). These are really public policy arguments. However given the political nature
of religion, uncertainty looks more neutral than using public policy.
See: estates; granting of land; invalidation of condition; uncertainty
Laurin v Iron Ore Company, (NFSC, 977)
F
IOC built a company town. As part of their efforts they subsidized housing for their workers, but to get financing, workers had to agree to a contract
which gave IOC the right to buy the home at a fixed price. This purchase option was triggered if the worker: ceased to be employed by IOC, IOC took
over mortgage payments because the worker was bankrupt, or the worker wanted to sell the property (“the option”). IOC agreed that if the mortgage
was paid off, it would not exercise its option, nor would it do so if the employee sold to another employee. Even this was problematic though, since
no one could get a mortgage on their homes because banks could not repossess the home in case of default – the company got it – and so were wary of
lending.
I
D
(1) Is the option a covenant or a conditional estate? [Condition] (2) If they are conditions, are they a restraint on trade? [yes]
We are concerned here with the distinction between conditions on the grant or covenants bargained for by the parties. “A condition is created by the
testator or grantor. A covenant is made by the grantee.” The judge sets out the test in the ratio, below. He then applies this to the facts, holding
CML PROP - 12
that the restrictions were the trade-off for mortgages and subsidization, but that the workers would not have agreed to them except as a condition
for getting the house. Thus they are conditions. They clearly lower the value of the house, thus they are invalid.
R
: (1) Restrictions on alienation which are reasonable and might have been granted as part of an independent business
transaction are covenants; (2) Restrictions which are unreasonable are conditions, and if they absolutely or substantially
restrain trade they are void; (3) These rules apply only to restrictions contained in a conveyance or that are created
immediately thereafter.
Dis
See: estates; granting of land; invalidation of condition; restrain on alienation
Joint Ownership of land
 Two types: joint tenancy and tenancy in common
 Joint tenancy: holders share the same estate equally; if one joint tenant dies, other(s) receive(s) the dead tenant’s share
 Tenants in common: each holder holds separate estates in the same land; can sell/descend estate as one wishes
 Tenancy in common is now default under legislation
Join tenancy’s four unities:
o Unity of title: interests must have been created by the same act or instrument
o Unity of time: the interests must have been created at the same time
o Unity of interest: interests must be of equal nature, size and duration
o Unity of possession: each co-owners entitled to possession of the whole and none entitled to any part of land to the exclusion
of the others
 In absence of one of the four unities, a tenancy in common arises
Severance of joint tenancy (only affects those joint tenants directly involved; the remainder of joint tenants, as between themselves, remain
as joint tenants):
o Act or transaction with respect to only one joint tenant’s interest
o Mutual agreement
o Course of dealing
o Order for partition or sale
o Family law legislation
 No obligation of one tenant to another for expenses or benefits in absence of agreement except where tenant agrees to act for others in
collecting rent or if ouster of the other tenant

CML PROP - 13
Court can make adjustments based on investments/benefits in case of partition or sale
CML PROP - 14
LANDLORD AND TENANT
Types of Tenancies at common law
Estate for years
• an estate for a fixed period of time at the end of which the tenancy automatically ends
 Longer than 3 years must be in writing
Periodic tenancy
• an estate that lasts for a repeated period, e.g., a month to month tenancy
• to end this tenancy, must give one period notice
 Most common
Estate at will
• an estate that lasts as long as the parties want it to
• ends on request to leave
 Usually children living with their parents. Cannot sue retroactively for trespass
Estate at sufferance
• comes into being by operation of law
• exists when tenant remains in premises after tenancy ended until landlord asks tenant to leave
Differences between Leases and Licences
•
courts try to determine intention of the parties as evidenced by the nature of the transaction itself rather than the label attached
to the transaction
•
exclusive possession: a key characteristic of tenancy as is obligation to pay rent and a known term
•
often difficult in practice to determine whether there is exclusive possession
•
in practice, courts usually accept characterization given by the parties except where there is an attempt to get around legislation
designed to protect weaker party
Application of Property Law and Contract Law
•
a landlord-tenant relationship is governed, at different times and for different purposes, by property law and contract law
•
the lease itself is a mixture of property and contract
•
once an estate has vested (that is, the tenant has taken possession), then anything connected with the estate is governed
by property, and not contract, principles
•
before the estate has vested or after it has been transferred back to the landlord, the lease is governed by contract, and not
property, principles
CML PROP - 15
•
in property, the single most important element of a landlord-tenant transaction is the transfer of the estate
•
all other obligations are secondary and independent of one another
•
under property law, a landlord has no general duty to mitigate
landlords can follow any of the following courses of action on fundamental breach by tenant
1) do nothing and continue to collect rent
2) accept the breach as a surrender and re-rent the premises (but if re-rents, then will be deemed to have mitigated)
3) do not accept the surrender, but rent out the premises on the tenant’s behalf, in which case the tenant owes the landlord the
difference in rent; likely obligation to mitigate
4) accept the surrender and get paid the present value of rent subject to an obligation to mitigate
Landlord’s Obligations
Quiet Enjoyment
•
a landlord cannot significantly interfere in a direct and physical way with the tenant’s ability to use the premises for the
purposes for which they were granted
•
in addition, landlord cannot undertake actions that substantially interfere with the tenant’s ability to use the premises
•
includes only actions by the landlord and the landlord’s agents
Non-Derogation from Grant
•
landlord cannot use the remainder of the landlord’s premises in a manner that undermines the very purposes for which the
premises were granted to the tenant
•
does not seem to cover economic loss
•
includes actions by the landlord and anyone taking the remaining premises under the landlord
Fitness for Use
•
at common law, furnished premises must be fit for use; otherwise, no obligation that premises fit for use (Smith v. Marrable;
Sutton v. Temple; Hart v. Windsor)
•
courts may get around this rule by finding implied obligations to keep premises fit or by finding a correlative duty on the
landlord to keep aspects of the premises fit for use
Tenant’s Obligations
Payment of Rent and Defences
CML PROP - 16
•
there is an implied obligation on tenants to pay rent
Restrictions on User and Duty to Repair
•
at common law, tenant must use premises in a tenant-like manner
•
the tenant may use the premises for any reasonable use
•
tenant must use premises reasonably and thus must keep premises clean, drains unclogged, etc.
•
at common law, tenant must keep premises in a good state of repair except for reasonable wear and tear
•
tenant will be responsible for damage done as a consequence of not repairing premises even where the non-repair is due to
reasonable wear and tear
Other Terms/Covenants
If an agreement is held to be a license, any additional matters not dealing with occupation of the land are contractual terms and are
dealt with accordingly. If the agreement is held to be a lease, these additional stipulations are considered covenants.
Independence of Covenants [477]
Performance of ancillary obligations (obligations beyond the ones outlined above which constitute the lease from the perspective of
the common law) is independent of the duty to perform the other ancillary obligations and of the principal obligations. Thus breaching
a covenant does not invalidate the other covenants, or have any effect on the leasehold estate.
Falleson v Spruce Creek Mining Co, (1942) BCCA [477]: “A lessor cannot re-enter [terminate the lease] for mere breach of
covenant.” Unless re-entry for a particular breach was made as an express term of the lease (in which case it’s treated like a
conditional estate).
Goldhar [482]: “Under concepts of property law a lease is primarily a conveyancing to which the covenants are incidental.”
CML PROP - 17
British American Oil Co. Ltd. and Depass (On-CA, 1959),
F
BA and D signed two documents. One related to D’s lease of a service station, the other was an “equipment loan and retail dealer sales agreement”
both of which described D as a tenant. The lease lasted for 1 month with automatic renewal and involved rent payments by D. The ELRDSA stated that
D would sell only BA products and that BA would provide some equipment to D. D’s use of the premises was to sell gas only, and there were other
limitations on his use of the land (including allowing BA to put up ads).
I
D
Is the legal relationship between BA and D a lease or a license? [lease]
R
: (1) A license is “mere permission to occupy the land for some particular purpose;” (2) The central element in a lease is the
grant of exclusive occupation of the land and this alone distinguishes it from a license.
The true question here is whether the agreements conferred an estate in the land which gave D exclusive possession good against the world, including
the landlord. In this case the lease agreement clearly gave D exclusive possession and the restrictions contained in it and the ELRDSA are “not
extraordinary.” The purposes for which D was to use the property could only be accomplished if he had exclusive possession. D’s attempted analogy
to licenses granted to concession stands in theatres must fail.
Dis
Notes: This case adopts an “exclusive possession” test.
However: Errington v Errington [quoted in British American Oil 466]: “The test of exclusive possession is by no means decisive.”
See: Leasehold estates, lease or license, leases, exclusive possession test
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Metro-Matic Services Ltd. v. Hulmann (ON-CA, 1973),
MM ha an agreement with the landlord of an apartment allowing it to place washing machines in the basement of the
apartment. H and the tenants of the apartment bought it from the landlord, then brought in a new washing machine company
and told MM to leave. The agreement was called a lease of a room to MM, only allowed MM to use it for laundry purposes,
renewed automatically on a 5 year basis, contained a covenant for quiet enjoyment and contained a clause that it would bind
the heirs, assigns, successors, etc., of both parties.
Is the agreement a lease or a license? [lease]
Looking at the lease and all its elements, the judge highlighted the use of the terms lease and demise, which are the words
traditionally used to create an estate in land. He also notes the presence of the covenant for quiet enjoyment. Together, and in
the absence of clear intentions to the contrary, these create a lease, not a license. Further, the restriction of the use of the
premise to washing machines is no more fatal to the document being a lease than a requirement that a leased premise be used
only as a personal dwelling and not a business. None of the other covenants undermine MM’s exclusive possession.
Weight should be given to the words used by the party to describe the lease, and to the global impression of the document
R
Dis
Notes: The final paragraph of 473 speaks against the judge’s argument. He notes that certain clauses are unnecessary if the
agreement is a lease… which implies that the parties would not have put them there unless they thought them important/effective/
CML PROP - 18
necessary, which implies that the agreement is a license.
See: Leasehold estates, lease or license, leases, parties intention test
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Read Marketing Inc. v. Minister of Transportation and Highways (BC, 1995),
the plaintiff operated a gas station and convenience store under an agency agreement with an oil company, which itself leased
the premises from the owner. The ministry acquired the land from the owners for expropriation, and made an agreement with
the oil company. The plaintiff argued they also deserved expropriation compensation
Lease or license? [License]
Whether it did so depended on whether it was an "owner" of land according to the definition in the Highway Act, which in
turn depended on whether it was "a person having an estate, interest, right or title in or to the land". If the agreement to
occupy was a lease, it would do so. If it was a licence, it had no such estate or interest. After reviewing the terms of the
agreement the Board concluded that its "dominant objective" was to enable gas to be sold. It then noted that "nowhere is the
agency agreement described as a lease". In fact it was referred to as conferring "an entitlement to occupy", and as discussing
"occupancy costs" and "licence fees", not rent. The oil company also reserved the right to change the licence fee at any time,
merely by notifying the plaintiff. Indeed, the agreement gave the oil company a "pervasive" right to control the premises. It
specified hours of operation, what kind of advertising was to be used, how sales displays should be mounted, and that the
company could enter at any reasonable time and inspect. Finally, the Board noted that the agreement to occupy was stated to
be personal and non-assignable.
"the foregoing provisions are indicia of an agreed arrangement ... in the nature of a licence rather than a lease. They point to a
personal contractual relationship through which the claimant can ... exercise a personal privilege to occupy premises."
The Board said that
the law was that "the language employed by the parties" was "compelling evidence as to the true nature of the relationship
which they seek to form", and therefore this was a licence.
Dis
Notes: Case by BC expropriation board
See: Leasehold estates, licenses, parties’ intentions test, expropriation, takings
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Neda Rahimi v. Regional Assessment Commissioner Region No. 9, (1997)
the issue was whether someone was liable for property tax, which in turn depended on whether an agreement between an
individual and a church was a lease.
Lease or license? []
Lax J. said that Street v. Mountford "establishes the test for a tenancy at common law", which was that "if the
CML PROP - 19
agreement confers on the occupier exclusive possession, this is prima facie a grant of an interest in land". That is,
Street "stands for the proposition that while the parties may call it otherwise, the grant of exclusive possession is the
singular distinguishing feature between a license and a lease".
R
Upholds exclusive possession test
Dis
Notes:
See: Leasehold estates, leases or license, exclusive possession test
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R
Goldhar v. Universal Sections and Mouldings Ltd. (1962),
G rented a space to U for industrial purposes for $833/month. U left, alleging unfounded breach of contract. G let her husband
use part of the space while she looked for other tenants. Eventually she found someone who paid $500/month.
(1) What remedies are available to G after U repudiated the lease? [a- apartment emplty and collect the full amount of unpaid
rent after the estate ends; b - Take refusal to pay rent as surrender of the estate] (2) Can G use option 3 (sublet on tenant’s
behalf)? [no] (3) Did G’s husband’s occupation of the space constitute surrender? [no]
It is possible for the landlord to re-let the premises with notice to the tenant and then recover the difference in rent. Here
however there was no notice, thus this option is not open. Thus the re-renting that occurred constituted surrender as per option
2. The occupation by G’s husband was by mere license and not by lease, thus there was no surrender. This finding being
justified by the difficult situation landlords find themselves in under Common Law rules.
(1) Confirms existence of options 1-3 outlined above; (2) Contract laws govern breach prior to possession of land by tenant,
property rules after possession.
Dis
Notes: This is an incredibly messy judgement due to the sorry state of lease law. It is explicitly overruled by Highway Properties
See: Leasehold estates, leases, termination of lease
Highway Properties v Kelly, Douglas & Co, (SCC, 1971)
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D broke their lease with H after taking possession of the property. H seeks damage via anticipatory breach.
Does the doctrine of anticipatory breach apply to leases after possession? [yes]
Laskin states that there has been a gradual ascendency of contract law principles over those of property with respect to leases.
It is now time to recognize the doctrine of anticipatory breach applies to leases after possession (it currently applies prepossession). This adds a fourth remedy to the list of 3 existing at the time of Goldhar. This fourth remedy is anticipatory
breach: all future payments come due, the landlord can rent to other tenants, and any money brought in from subsequent rental
R
CML PROP - 20
is applied to offset the lump sum rental payments. This is fair and just – it is ridiculous to treat commercial leases as
conveyances and not contracts
(1) Adds 4th option to the landlord’s legal remedies; Apply contractual doctrine of anticipatory breach. All future rent
payments come due, the landlord may re-rent, in which case any new rental revenues are deducted from the money
due. Notice is required (2) Landlords should have the “full armory” of legal remedies available under contract law.
Dis
Notes: : It is not clear whether there is a duty to mitigate from this case. Laskin merely states that mitigation applies if it occurs. See
Postal Promotions and Windmill Place cases.
Also, is silent on notice: see many decisions since Highway Properties have required specific notice of an intention to claim
prospective damages. A line of cases in the 1970s and early 1980s established not only that there must be notice, but also that the
notice had to be more or less contemporaneous with the notice that terminated the lease and brought about a surrender: see, Northbay;
Fuda v. D'Angelo (1974), 2 O.R. (2d) 605 (H.C.); Gander Shopping Centre Ltd. v. Powell (1982),
See: Leasehold estates, leases, termination of lease; anticipatory breach
F
Lehndorff Canadian Pension Properties Ltd. et al v. Davis Management Ltd. et al (BC-CA. 1989)
Lehndorff owned an office building in Vancouver and Davis leased several floors in the building. Davis decided to move out
and assigned its leases to a third party. These leases contained the following covenant:
10.02
The Tenant covenants that it will not assign or sublet without leave, which leave the landlord covenants
not to withhold unreasonably as to any assignee or sublessee who, in the Landlord's judgment, has a
satisfactory financial condition, has a good reputation in the business community and agrees to use the
Demised Premises for purposes satisfactory to the Landlord.
Lehndorff refused consent to the assignments, and Davis terminated the leases. Lehndorff sued for the remainder of the rent
due under the leases, but lost.
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In the Court of Appeal Carruthers J.A., with whom Toy J.A. concurred, upheld the finding of the trial judge that the refusal to
consent to the assignments was unreasonable. There remained the issue of whether this gave Davis the right to terminate or
merely to sue for damages. Carruthers J.A. rejected a suggestion that the landlord's action had amounted to constructive
eviction and stated: "Rather than construe the Burrard leases as demises of real property, I would prefer to construe them as
commercial contracts.
An examination of the context persuaded the judge that a fundamental breach of contract had occurred when permission to
CML PROP - 21
sublet was refused. Therefore "DML would not be limited to a remedy in damages and would not be liable to Lehndorff for
further rent".
Commercial leases follow the rules of contracts.
Dis
Notes:
See: Leasehold estates, leases, termination of lease, commercial leases as contracts
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Homer v. Toronto Dominion Bank (Sask-CA, 1990),
The tenant bank went into the premises under the terms of a written offer to lease. Although a formal lease was never signed,
both parties and the court accepted that a binding ten-year lease was in effect. Following a dispute about whether a formal
lease should be signed, the tenant bank stated that it was terminating the existing lease, and left. The trial judge found that as
the lease contained no provision for early termination, the action of the bank was improper and it was liable for damages for
the unexpired portion of the lease
Do contract principles apply to commercial leases [yes]
On appeal Sherstobitoff J.A. held that the trial judge had "overlooked entirely the applicable principles of contract law". He
found that correspondence from the landlord demanding that the tenant either sign the new lease or leave represented "an
anticipatory breach or repudiation", a repudiation which the tenant accepted. Since, in his view, Highway Properties had
accepted that the doctrine of anticipatory breach applied to landlord-tenant relationships, the matter was simply one to be
dealt with under the applicable principles of contract law.
R
Supports very full application of contract law principles to commercial leases.
Dis
Notes:
See: Leasehold estates, leases, termination of lease, anticipatory breach
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North Bay TV and Audio v Nova Electronics, (ON-HC, 1983 Ont)
NBTV was the landlord to NE, which had trouble paying rent for several months. NE realized that they would soon be locked
out of their store due to failure to pay rent, and so they began removing stock. NBTV showed up while this was happening,
there were harsh words exchanged. NBTV had the locks changed and placed a notice that anyone entering the store would be
prosecuted. Some of the goods left in the store were sold by NBTV to make up the arrears of rent.
Did NBTV give the appropriate notice to invoke Highway Properties? [yes]
NE abandoned the premises, and NBTV’s changing of the locks constituted surrender. No notice was given to NE that the lease was at an end, but
CML PROP - 22
NBTV did file a statement of claim setting out the damages they were suing for. This constituted adequate notice.
R
Notice to pursue the Highway Properties remedy need not be given at the same time as termination of the lease.
Dis
Notes: leading case on notice for Highway properties
See: Leasehold estates, leases, termination of lease, notice under Highway properties
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Commercial Credit Corp. v. Harry D. Shields Ltd. (ON-HC, 1980)
A commercial tenant in arrears went into receivership. The landlord met with the receiver, and the latter handed over a note
disclaiming the lease and the keys to the premises. Out of concern for security the landlord kept the keys but continued to
assert, orally and in writing, that the lease was in force. The landlord also wrote to the receiver to the effect that it was its
intention to re-let on the tenant's behalf and to hold the tenant responsible for all damages. A week later the landlord executed
a distress warrant, and then sold the tenant's goods for the arrears
Holland J. held that the landlord had not accepted the surrender of the lease, so that it remained in force, and the landlord
therefore had the right to take distress.
No duty to mitigate (likely overruled by postal promotions)
R
Dis
Notes: The failure to impose a duty to mitigate, to balance the benefits given to a landlord who may now sue for the whole benefit of
the lease, is perhaps inconsistent with the general principle of treating the lease as contract not a conveyance, enunciated in Highway
Properties.
Highway properties: "I know that under the present case law the landlord is not under a duty of mitigation, but mitigation is in fact
involved where there is a re-letting on the tenant's account". This seems to suggest that he was not imposing a duty to mitigate, and
this impression is reinforced when one remembers that the old first option - keeping the lease alive - was left available to the
landlord. That is, in the face of a clear repudiation of the lease the innocent party may choose to do nothing but keep the lease alive
and "run up" the damages. This was done in this case.
See: Leasehold estates, leases, termination of lease; mitigation after Highway proprties
Toronto Housing Co. Ltd. et al. v. Postal Promotions Ltd. (On-HC, 1980)
F
PP agreed to a 20 year lease with T. After 11 years, they left the building following a dispute over a lease assignment, which was vacant for a time but
then re-rented to a new tenant at a much higher rate. This generated enough money to repay all lost rent during the vacancy and still retain a
substantial surplus.
I
(1) Did T unreasonably withhold permission to assign the lease? [no] (2) What should be done with the surplus rental money?
CML PROP - 23
D
R
[The surplus mitigates PP’s damages, but PP cannot benefit from its breach of contract by receiving a share.]
The landlord’s refusal was not unreasonable, thus PP abandoned the building. The subsequent lease was for the landlord’s
benefit and not through the tenant (i.e. not option 3). Thus we are in the case of options 1 or 2. The SCC did not rule on the
necessity of mitigation in Highway Properties, yet in a later case they approved of applying the normal rules of mitigation to
leases. Thus there is a duty to mitigate.
(1) If mitigation occurs, it will be applied to accumulated damages (this part is clear); (2) There is a duty to mitigate (somewhat
unclear); (3) If the new rent exceeds the old rent, the excess is applied to accumulated unpaid rent, but the departing tenant
cannot profit from this procedure. [overturned by CA]
Dis
Notes: See CA decision below
See: Leasehold estates, leases, termination of lease; mitigation after Highway proprties
Toronto Housing Co v Postal Promotions, (ON-CA, 1982)
F
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R
[above]
Is there a duty to mitigate? [Unclear – overturns the ratio, but not holding of the previous decision]
The case at bar cannot concern a duty to mitigate, since mitigation occurred. Thus any talk of a duty is mere obiter. The court
declines to rule on the general existence of such a duty. They then state some general rules governing breach of leases.
(1) The tenant as well as the landlord should have full access to contractual remedies and defenses, (2) Leaves open the duty to
mitigate question; (3) Measure of damages for breach of rental contract are the standard contractual measure: “place victim in
same position as if the contract had been performed.”
Dis
Notes: Subsequent courts seem very confused as to where there is a duty to mitigate or not.
See: Leasehold estates, leases, termination of lease; mitigation after Highway proprties
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Grouse Mechanical Co. v. Griffith et al (BC-SC, 1990),
the tenant abandoned the premises and the landlord re-let, having given the new tenant an inducement of four months rent free.
The landlord's damages claim included rent for those four months.
Is there a duty to mitigate [yes]
Cowan J. stated: "Once the tenant breached his obligations or stated his intention to breach his obligations, the plaintiff had a
duty to mitigate his loss". The duty could only be avoided in a situation in which the landlord had "substantial and legitimate
interest in actual performance".
CML PROP - 24
R
Recognized a duty to mitigate [though not clear this is law]
Dis
Notes: contrast with Windmill Place v Apeco of Canada
Law Reform Commission of BC, which had proposed a duty to mitigate in commercial tenancies (Law Reform Commission, British
Columbia, Report on the Commercial Tenancy Act (1989))
See: Leasehold estates, leases, termination of lease; mitigation after Highway proprties
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Windmill Place v Apeco of Canada, (NS-SC, 1976)
Part of a very large building was rented by A. A abandoned the lease and their space was later re-rented, but the building
remained largely empty. The building’s space was fungible and one location was as good as any other.
Did the rental of A’s space constitute mitigation? [no]
When a large building has many equally-attractive locations/units, they should be regarded as fungible. Thus renting A’s space
was not mitigation, because if A had not left, then W would have had two tenants, not just one, since W could have rented
another space to the other tenant.
If subdivisions of a single property are fungible, renting out a tenant’s old space does not constitute mitigation (unless it is the
only space left!).
Dis
Notes: Contrast with Grouse Mechanical Co. v. Griffith et al
See: Leasehold estates, leases, termination of lease; mitigation after Highway proprties
F
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R
Dis
Owen v. Gadd (QB, 1956)
three days after the lease was signed, the landlord “proceeded to erect immediately in front of the shop window and door
scaffold poles in order to carry out repairs, which were urgently needed, on the upper part of the same premises” which they
occupied.
Did the Landlord interfere with the tenent’s quiet enjoyment? [yes]
the court extended the scope of the obligation of quiet enjoyment to cover any direct, physical interference with the tenant’s
ability to use the premises for the purposes for which they were demised. The acts had to be those of the landlord or those
acting as agents of the landlord. This means that physical interference by other tenants in the buildings does not constitute a
breach of the obligation of quiet enjoyment.
Expansion of obligation for quiet enjoyment.
CML PROP - 25
Notes:
See: Leasehold estates, leases, landlord obligations, quiet enjoyment
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Kenny v. Preen (CA, 1962)
the landlord “tried, by a series of threatening communications, to drive [the tenant] out of her possession of the premises. The
threats were not merely of legal proceedings: there were threats of physical eviction of the tenant and removal of her
belongings. Moreover there was an element of direct physical interference by repeatedly knocking on the door and shouting
the threats to her.
Did the Landlord interfere with the tenent’s quiet enjoyment? [yes]
That element of direct physical interference was not trivial but substantial in this case, because it was persisted in and because
it has to be seen against the background of the threatening letters. extended the scope of this obligation still further.” The
court held that this level of intimidation by the landlord was a breach of the obligation of quiet enjoyment. While the actions
were still direct, they was not longer physical in nature.
Expansion of obligation for quiet enjoyment. Actions still need to be direct, but no longer need be physical in nature.
R
Dis
Notes:
See: Leasehold estates, leases, landlord obligations, quiet enjoyment
Smith v. Marrable (1843)
F
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R
S rented a furnished home to M. It was infested with bugs and M refused to move in.
Did S violate an implied warranty that the house was fit for habitation? [yes]
Parke: All leased homes should have an implied condition that they are inhabitable.
Arbinger: Furnished homes should come with a warranty of fitness for habitation.
A man who lets [rents] a ready-furnished house surely does so under the implied condition…that the house is in a fit state to
be inhabited.”
Dis
Notes: Thus will begin a long and silly history of the Common Law, furniture, and fitness-for-use.
See: Leasehold estates, leases, landlord obligations, fitness for use
Sutton v. Temple, (1843)
F
T rented pasture for cows from S. The cows began to get sick and died. Unknown to either party, the manure spread on S’s land the preceding spring
was contaminated with flecks of paint, and this was killing the cows. T repudiated the lease on the basis that the land was not fit for the purpose of
CML PROP - 26
pasturage.
I
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Can T claim the implied fitness for use of Smith v Marrable? [no]
Arbinger: The holding of Smith was clearly based on the high value of the furniture in the furnished apartment, since
warranties attach to chattels, not land. Furthermore, a warranty on land would raise problems any time a business or other
venture failed – flood gates/anti-commons argument.
Parke: The lease contains only two guarantees from the landlord: that the land actually belongs to the landlord, and that the
tenant will not be evicted early. Providing additional guarantees would allow farmers to sue landlords every time their crops
failed.
The warranty of fitness for use applies only to mixed contracts of land and chattels.
R
Dis
Notes: I believe a less-silly explanation for this ratio is that the Common Law does not believe that land can have a purpose, so it is
difficult to fit a concept of warranty in to land law. If the tenant was just going to play cricket, rather than graze cows, the paint
would not have been a problem, for example. You’d also have to adjust the purpose of the land to the subjective intent of the tenant
in many cases, which renders the concept of a warranty even more problematic (plus the CL hates subjective tests).
See: Leasehold estates, leases, landlord obligations, fitness for use
Hart v. Windsor (1843)
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H rented a house to W, but the house was unfit for habitation. W sues, hoping that Smith will be extended.
Can the ratio of Smith be extended to rented dwellings without furniture? [no]
Basically restates what was said in Temple. They add a more explicit floodgates argument, and raise the spectre of force
majeur events like wars, floods or fires imposing liability on the landlord if there was an implied warranty on land. They state
that it might be fair to impose this liability just on dwelling-houses, but say that such a rule could not remain restricted to
dwellings (unclear why this should be so). Hence renters will have to look after their own interests.
No mere lease contains an implied warranty of fitness for use.
R
Dis
Notes:
See: Leasehold estates, leases, landlord obligations, fitness for use
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Future Interests
Reasons to Find Void
- courts may find a limitation, condition, or covenant void for any of the following reasons
- courts are less likely to find covenants void than either limitations or conditions
Public Policy
- where the limitation, condition, or covenant requires illegal conduct, courts will strike it down
- where the limitation, condition, or covenant breaches current norms of behaviour, courts will generally require something
more than their personal beliefs, such as the constitution, statutes, treaties, etc. to support their notions of morality
- courts want to see clear evidence of current norm
Undue Restraint on Alienation
- courts will strike down limitations, conditions, or covenants where the effect of the provision is to materially decrease the
value that the grantee can get for the land on a sale because of restrictions on the group of individuals to whom the land
can be sold: Laurin v. Iron Ore Company of Canada
Uncertainty
- courts will strike down limitations where, at the time of the grant, it is not theoretically possible to list all the events under
which the limitation or condition will be breached (conceptual uncertainty)
- that is, the provision will not be saved even if the grantee can determine whether a particular act will violate the limitation
or condition (factual uncertainty) if the grantee cannot list all the acts that would violate the provision
- for covenants and conditions precedent, there can be conceptual uncertainty as long as no factual uncertainty
Consequences of Finding Void
Determinable Fee Simple
- if a limitation is void, the entire grant is void
- the intent of the grantor is that the grantor would not have conveyed the land but for the limitation
Fee Simple Subject to Condition Subsequent
- if a condition is void, the grant remains, free of the condition
- the intent of the grantor is that the grant of land is primary, the condition only secondary
CML PROP - 28
Fee Simple Subject to Condition Precedent
- if a condition is void, the grant will never occur
Covenants
- the grant is completely independent from the covenant
- breach of the covenant leads to damages or injunctive relief
Conveyancing and Law of Property Act, RSO:
s. 3 - A feoffment’s other than deeds are void.
s. 9 - A partition of land, an exchange of land, an assignment of a chattel interest in land, and a surrender in writing of land not being
an interest that might by law have been created without writing, are void at law, unless made by deed.
s. 10 - A contingent, an executory, and a future interest, and a possibility coupled with an interest in land, whether the object of the
gift or limitation of such interest or possibility is or is not ascertained, also a right of entry, whether immediate or future, and
whether vested or contingent, into or upon land, may be disposed of by deed, but no such disposition, by force only of this Act,
defeats or enlarges an estate tail.
Sale of Goods Act, R.S.O
s. 2 - A thing shall be deemed to be done in good faith within the meaning of this Act when it is in fact done honestly whether it is
done negligently or not.
s. 17 - Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer until the
goods are ascertained.
s. 18 (1) - Where there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer
at such time as the parties to the contract intend it to be transferred.
s. 18 (2) - For the purpose of ascertaining the intention of the parties, regard shall be had to the terms of the contract, the conduct
of the parties and the circumstances of the case
s. 19 – Rules for ascertaining intention
Unless a different intention appears, the rules for ascertaining the intention of the parties for when the property in the goods is to
pass to the buyer:
Rule 1.—Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the
goods passes to the buyer when the contract is made and it is immaterial whether the time of payment or the time of
CML PROP - 29
delivery or both is postponed.
Rule 2.—Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for
the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer
has notice thereof.
Rule 3.—Where there is a contract for the sale of specific goods in a deliverable state but the seller is bound to weigh,
measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the
property does not pass until such act or thing is done and the buyer has notice thereof.
Rule 4.—When goods are delivered to the buyer on approval or “on sale or return” or other similar terms, the property
therein passes to the buyer;
(i) when the buyer signifies approval or acceptance to the seller or does any other act adopting the transaction;
(ii) if the buyer does not signify approval or acceptance to the seller but retains the goods without giving notice of
rejection, then if a time has been fixed for the return of the goods, on the expiration of such time, and, if no
time has been fixed, on the expiration of a reasonable time, and what is a reasonable time is a question of fact.
Rule 5.—
(i) Where there is a contract for the sale of unascertained or future goods by description and goods of that description
and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the
buyer, or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer, and such
assent may be expressed or implied and may be given either before or after the appropriation is made.
(ii) Where in pursuance of the contract the seller delivers the goods to the buyer or to a carrier or other bailee
(whether named by the buyer or not) for the purpose of transmission to the buyer and does not reserve the right of
disposal, the seller shall be deemed to have unconditionally appropriated the goods to the contract
s. 21 - Risk passes with property
Unless otherwise agreed, the goods remain at the seller’s risk until the property therein is transferred to the buyer, but, when
the property therein is transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not, but,
(a) where delivery has been delayed through the fault of either the buyer or seller, the goods are at the risk of the party in
fault as regards any loss that might not have occurred but for such fault; and
(b) nothing in this section affects the duties or liabilities of either seller or buyer as a bailee of the goods of the other party.
s. 22 - Sale by person other than owner
Subject to this Act, where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or
with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is
by conduct precluded from denying the seller’s authority to sell but nothing in this Act affects,
(b) the validity of any contract of sale under any special common law or statutory power of sale or under the order of a court
CML PROP - 30
of competent jurisdiction.
s. 24 - Sale under voidable title
When the seller of goods has a voidable title thereto but the seller’s title has not been avoided at the time of the sale, the buyer
acquires a good title to the goods, if they are bought in good faith and without notice of the seller’s defective title
Succession Law Reform Act, R.S.O. 1990.
s. 2 – Power to dispose of property by will
A person may by will devise, bequeath or dispose of all property (whether acquired before or after making his or her will) to which
at the time of his or her death he or she is entitled either at law or in equity, including,
(a) estates for another’s life, whether there is or is not a special occupant and whether they are corporeal or incorporeal
hereditaments;
(b) contingent, executory or other future interests in property, whether the testator is or is not ascertained as the person or
one of the persons in whom those interests may respectively become vested, and whether he or she is entitled to them under
the instrument by which they were respectively created or under a disposition of them by deed or will; and
(c) rights of entry, whether for conditions broken or otherwise.
s. 3 - A will is valid only when it is in writing.
K Gray – Elements of land law
 it was possible to accord an immediate conceptual reality to each 'slice' of time represented by an 'estate'. In other words,
any particular 'slice' of entitlement in the land could be viewed as having a present existence, notwithstanding that its
owner was not entitled to possession of the land until some future date
 rights to successive holdings of the land as 'present estates coexisting at the same time'. It was ultimately this feature of
the time-related aspect of the 'estate' in land which made it possible for the common lawyer to comprehend the notional
reality of immediate dispositions of, and dealings with, future interests in land
 Precisely because the doctrine of estates recognised the feasibility of successive estates in the same land, rules were
developed ... to restrain the current estate owner from prejudicing the value of the land in the hands of any successor (or
'remainderman'). These rules took the form of a doctrine relating to 'waste', 'waste' being defined as any action or
inaction on the part of the estate owner which altered the physical character of the land.
 More serious is voluntary waste, which includes any positive diminution of the value of the land (for instance, by
quarrying or by the cutting of timber). A tenant for life is liable for such waste unless the terms of his grant give him
specific exemption by declaring him 'unimpeachable for waste'
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Adverse Possession
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Bundles of rights better the earlier they are created
Bundles of rights in land created by possession
Section 15 of the Real Property Limitations Act destroys rights after non-possession for 10 years
My Version of the Doctrine
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Claimant must be in open, notorious, and continuous possession for statutory period
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“Open and notorious” means reasonably known and knowable (Lundrigans)
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“Continuous” to be judged in ordinary course of life
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Land must actually be possessed directly or indirectly, or have colour of right
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True owner must be excluded for statutory period
Exclusion to be judged in accordance with TO’s present use
Where TO has no present use, may be impossible to exclude TO (Masidon v. Ham; Teis v. Ancaster Town; Gorman v.
Gorman)
If mutual mistake, TO’s present use not relevant
If claimant’s possession or TO’s dispossession equivocal, look at claimant’s intention (Beaudoin)
Need intention to exclude everybody, including TO (but not specifically TO) (Beaudoin)
No clear rules about how to determine whether this intention exists
Treloar v. Nute [1976]
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The traditional position can be summarized simply as a restatement of the principles outlined above: exclusive possession as
an ordinary owner would possess for the statutory period of time is adverse to the title holder.
"if a squatter takes possession of land belonging to another and remains in possession for ... [the statutory period] to the
exclusion of the owner that represents adverse possession".
Dis
Note:
See: adverse possession, traditional adverse possession
Mulcahy v. Curramore Ply. Ltd. [1974]
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Note that while possession by the adverse possessor must be continuous for the period of time, this does not mean that the
same person must possess the land for all of that time. Provided there is no gap in possession, the rights acquired by the
potential adverse possessor, the "inchoate possessory title", can pass from one person to another so that at the expiry of the
limitation period "the last successor being then in possession will acquire a title in fee simple good against all the world
including the true owner"
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Dis
Note: converse is The Trustees, Executors and Agency Co. Ltd. v. Short (1888),
See: adverse possession, multiple possessors
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The Trustees, Executors and Agency Co. Ltd. v. Short (1888),
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that if a squatter abandons the land before the expiry of the limitation period the title holder "regains" full rights. He or she
does not have to bring an action for recovery (there being no one in possession against whom to bring such action), nor will a
later adverse possessor get the advantage of the previous possession unless his or her entry was substantially continuous with
the previous squatter's departure:
R
Dis
Note: converse is Mulcahy v. Curramore Ply. Ltd. [1974]
See: adverse possession, multiple possessors, titleholder retaking possession
Lundrigans Ltd. v. Prosper (1981),
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P and his family and friends built a cabin in the middle of the woods in 1956. The cabin was painted green with a black felt roof. The cabin stands in
the center of a very small clearing, 100-200 feet from the Humber river. It is not visible from the river nor from the air. P and the others used the
cabin for hunting a few times a year. They claim that other hunters and fishermen know of the cabin, but this was not proven. L discovered the cabin
only after 3-4 weeks of surveying of the area in preparation for real estate development. They want the cabin removed, P claims adverse possession.
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Was P’s possession “open and notorious”? [no]
The burden is on P to show the required quality of possession. While, as the trial judge found, there was nothing “covert or
secret” about the occupation, this does not mean it was automatically “open and notorious.” Open and notorious “implies at
least the opportunity of the title holder to have knowledge” of the adverse possession. The cabin was well hidden and no
evidence was presented that anyone except the families who used it knew of its existence. Thus P has failed to discharge the
burden of proof about the open and notorious quality of his adverse possession.
: (1) Burden of proving quality of possession lies on the adverse possessor; (2) To be open and notorious, possession must
give the owner some means of knowing about the adverse possession (note this is a possibility of knowledge; not actual
knowledge).
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Dis
Notes: “To constitute adverse possession it is an absolute requirement that the possession be open, exclusive, notorious and
uninterrupted… it is for the adverse claimant to prove the constituent elements of his claimed possessory title.”
The judgment in Lundrigans states that not only did the trial judge hold that the squatters had the right quality of possession, he also
gave them title to "a considerably larger parcel of land" than just the cabin. This was incorrect. An adverse possessor will normally
gain title only to the land occupied, not to other land covered by the real owner's title.
CML PROP - 34
Compare with doctrine of colour of title – see Wood v. Leblanc (1904),
See: adverse possession, open and notorious
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Re St. Clair Beach Estates Ltd. v. McDonald et al. (On, 1974)
M bought a residential home bordering on the Grant Farm in 1961. The part of the GF bordering M’s land is rough, overgrown
with weeds, trees and rubble. M made use of the land “which an owner would make of his own backyard” including cutting
down trees, erecting a dog house, building a large boat over the course of 2 years, etc. M never had the permission or consent
of the owners of GF. The Grants picked cherries in the disputed area from time to time and farmed the accessible southern part
of the disputed land. On two occasions M attempted to buy the land from G. Eventually G sold the farm to S. S applied for
“first registration” under the Land Titles Act. The McDonalds objected on the basis of their adverse possession of the disputed
parcel of land.
Did M have the required quality of possession to adversely possess the parcel of land? [no]
Trial judge held that G had “constructive possession” of the land and did not need to show “pedal possession” of every square
foot of it.
Adverse possession requires three elements (taken from Plfug and Pflug v Collins[147]): actual possession; intent to exclude
the owner and all other persons entitled to possession; discontinuance of possession by the owner and all others. All of these
factors must be true for the entire statutory period. Here M fails on the discontinuance of possession, since the Grants made
use of the disputed parcel in a manner consistent with their ownership of it – there was no reason for them to go there more
than occasionally, and they were found to visit in to pick cherries, among other reasons.
the defence cannot succeed because the McDonalds did not have exclusive possession
R
(1) Enclosure constitutes use of land thereby enclosed without visits by the owner; (2) In case of unenclosed land, occasional
use of land may be break adverse possession depending on the nature of the land; (3) offers to buy land in dispute constitute an
acknowledgement of another owner’s title and thus demonstrate a lack of intention to own.
Dis
Notes: Intention to Exclude
Canada (AG) v Krause, (1956) OAC (quoted in Re St Clair Beach Estates) [149-150]: “Throughout the statutory period… there
must have been, if the defendant is to succeed, (1) exclusive occupation in the physical sense, i.e. detention and (2) the animus
possidendi.”
Littledale v Liverpool College, (1990) (quoted in Re St Clair Beach Estates) [150]: Animus possidendi defined as “occupation with
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intention of excluding the owner as well as other people.” (quoted in Beaudoin) [157]: “When possession or dispossession has to be
inferred from equivocal acts, the intention with which they are done is all-important.”
See: adverse possession, intention to exclude
Wood v. Leblanc (SCC, 1904),
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"The possession necessary under a colourable title to oust the title of the true owner must be just as open, actual,
exclusive, continuous and notorious as when claimed without such colour, the only difference being that the actual
possession of part is extended by construction to all the lands within the boundaries of the deed but only when and
while there is that part occupation."
Exception to regular adverse possession: The doctrine of “colour of title” holds that when a person enters land under defective
title (bought land that did not actually belong to the seller, for example) and occupies part of the land, the occupation will be
considered to have been in constructive possession of the whole parcel of land Wood v Leblanc, (1904) SCC [162]: “The
possession necessary under a colourable title to oust the title of the true owner must be just as open, actual, exclusive,
continuous and notorious as when claimed without such colour, the only difference being that the actual possession of part is
extended by construction to all lands within the boundaries of the deed, but only when and while there is that part
occupation.”.
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if a person enters land under a defective title, and adversely possesses only part of the land for the requisite period, he or she
will be considered to have been in constructive possession of the whole. This is called the doctrine of colour of title.
Dis
Notes:
See: adverse possession, doctrine of colour of title
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D. Mendes Da Costa and R. Balfour, Property Law: (Toronto, 1982)
Evidence of Adverse Possession
maintaining fences, growing vegetable crops, and intentionally grazing horses: see Strickland v. Murray (1977), 17 Nfld.
& PEIR 368 (Nfld. SC TD).
constructing and operating a lumber camp, putting trailers on the premises, digging a well, and hauling a quantity of
fill: see Hughes and Hughes v. Speight, Speight, and O'Dell (1979), 28 NBR (2d) 191 (NB SC TD).
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making regular use of land for the parking of cars: see Brown v. Phillips (1963), 42 DLR (2d) 38 (Ont. CA).
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building and using a small shack where the use included a base for fishing by seine and where the shack was vacant
during the winter: see Re Taylor and Willigar (1979), 99 DLR. (3d) 118 (NS SC TD).
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seasonal farming where the farming activities involved the fertilization and preparation of soil; planting, weeding,
nurturing and harvesting of crops; and the cutting of hay: see Neary's Estate v. Neary (1981), 29 Nfld. & PIER 276
(Nfld. DST. CT.)
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regular planting of crops on part of the land, use as pasture, erection of a fence, and the cutting of logs or pulp: see
Pugh v. Calhoun (1980), 32 NBR (2d) 311 (NB SC QBD)
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farming and lumbering or cutting; activity which went beyond mere isolated acts of trespass and which constituted
the types of acts that would normally and suitably be performed by a lumberman-farmer: see The Queen v. Smith
(1980), 113 DLR (3d) 522 (Fed. CA) and Lester D. Collicutt Ltd. v. Dorey (1980), 42 NSR (2d) 204 (TD).
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building a house, clearing land, and erecting a substantial barn, conducting farming activities and, in relation to a
wooded area, cutting wood for firewood and fences, where the woodcutting was not a seasonal activity but continued
throughout the year and where the land occupied was fenced: see Neary's Estate v. Neary.
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fencing land with the intention of obtaining title, and using the land for pasturing cattle and for cutting wood: see Re
Chaytor (1980), 27 Nfld. & PEIR 310 (Nfld. SCTD).
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establishing and operating a military base used for infantry and vehicle training: see Port Franks Properties Ltd. v.
The Queen (1979), 99 DLR (3d) 28 (FC TD).
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in the case of an Indian band, fishing; farming; cutting pulpwood, firewood, and Christmas trees; berry picking; use of
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the land for religious and burial purposes: see Afton Band of Indians v. Attorney General of Nova Scotia (1978), 85
DLR (3d) 454 (NS SC TD).
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INSUFFICIENT TO DEMONSTATE ADVERSE POSSESSION:
the seasonal use of land, including maintaining a fence, cutting hay, and pasturing cattle: see Hillegass v. Hawco (1977),
15 Nfld. & PEIR 407 (Nfld. Dist. Ct.) and Strickland v. Murray (1977), 17 Nfld. & PEIR 368 (Nfld. SCTD).
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occasional acts of wood cutting on wild lands and payment of rates and taxes: see Re Tri-Development Ltd. (1978), 23
NBR (2d) 439 (NB SC QBD).
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isolated acts of cutting timber on woodland: see H. A. Sempk Ltd. v. Minister of Natural Resources (1976), 13 NBR
(2d) 198 (NB SCAD) and Re Hunter (1979), 25 NBR (2d) 124 (SC QBD).
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the cutting of wood from time to time, even during successive years, where the conduct constituted acts of
intermittent trespass: see Becker v. Cleland's Estate (1981), 35 NBR (2d) 542 (CA).
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casual or periodic cutting of a lawn and minor clearing of undergrowth: see Clarke v. Olscamp and Hughes (1979), 22
Nfld. & PEIR 451 (PEI SC TD).
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the registration of a deed, the intermittent dumping of rubbish, children playing on the land, and the occasional
gathering of apples and berries at unspecified times: see Griffin v. Poirier (1980), 42 NSR (2d) 164 (NS SC TD); appeal
dism'd (1981) 49 NSR (2d) 706 (AD).
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sporadic use of land for duck hunting and the pasturing of cattle: see Attersley v. Blakely (1970), 13 DLR (3d) 39 (Ont.
CA) and Re MacEachern and Macisaac (1977), 81 DLR (3d) 20 (PEI SC in banco).
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use as a driveway, where the title holder had also used the driveway: see Brewer v. Larkin and Larkin (1977), 13 Nfld.
& PEIR 401 (PEI SC in banco) and Pitre and Pitre v. Robinson (1978), 15 Nfld. & PEIR 63 (PEI SC in banco).
F
H has owned the western part of a large parcel of rural land since 1956. The eastern part was owned by MI, which was holding on to it for
development purposes, but never visited it past 1968. Over the course of several decades, H built and operated an airport on the disputed eastern
parcel. The airport consisted of two grass runways, the second of which required significant landscaping. A windsock was visible from the highway and
the airport appears on government charts. The airport was used by 10-12 planes year-round. He also built a dam, a pasture and a road.
Masidon Investments v. Ham (On-Ca, 1984)
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Did H fulfill the requirements for adverse possession. [no - it fails the (newly created) inconsistent use test.]
Restates the trinity of elements for AP [166]. States that the clock runs when the last of the elements comes in to place. Then lists a long line of
cases emphasizing interference with the owner’s intended use of the property. Holds that these cases state a broad principle of “inconsistent use” as
a requirement for dispossession of the owner. When nothing is done with the property, we must look to its intended purpose (note that this is a
subjective test!). If the intended purpose is speculation, Ham’s actions did not interfere with MI’s plans. Finally, the judge ducks the policy issues of
“impossibility of infringement” by saying it would imprudent to speculate on what could constitute infringement of land speculation. He does say that
there are no policy reasons to care about the rights of adverse possessors who are trespassers.
Creation of inconsistent use test.
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Notes: Gold thinks this is a ridiculous judgement, since it (a) reverses the normal process of AP; (b) H had built an airport on the
land, which should count for something; (c) it effectively is impossible to adversely possess against land speculators under this
ruling; (d) there’s no clear policy reason to give speculators a higher level of protection than all other land users; (e) it introduces a
subjective test in to the Common Law, and CL hates subjective tests.
Ledyard v Chase, (1925) Ont HC (quoted in Madison Investments) [166]: “Possession must not be equivocal, occasional or for a
special or temporary purpose.”
Fletcher v Storoschuk, (1981) ONCA (quoted in Madison Investments) [167]: “Acts relied on to constitute adverse possession must
be considered relative to the nature of the land and in particular to the use and enjoyment of it intended to be made by the owner.”
[Originally, the most important part of this rule was the “nature of the land” part, not the intention of the owner, but Madison
Investments changes all that – Mike].
Keefer v Arillotta, (1976) ONCA (quoted in Madison Investments) [167]: “The use an owner wants to make of his property may be
a limited use and an intermittent or sporadic use [i.e. summer cottage, winter ski lodge, hunting lodge]. A possessory title cannot,
however, be acquired against him by depriving him of uses of his property that he never intended or desired to make of it.”
See: adverse possession, inconsistent use
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Teis v. Ancaster Town (ON-CA, 1997),
T claims title via adverse possession to two strips of land located along the border of his property and a public park. Both
parties believed that the strips were owned by T, and the strips were used by T for more than 10 years for farming and
movement of equipment. During this period, the public walked recreationally on some of the strip, and parked their cars on it
in the evenings when baseball games were played in the park.
(1) Does the inconsistent use test apply to mutual mistake cases? [no] (2) If not, did T have exclusive possession of the strips?
[Yes]
To give effect to the doctrine of adverse possession, mutual mistakes should not be treated under the inconsistent use test. Otherwise no claim of
adverse possession caused by a mutual mistake could ever succeed. The policy reasons behind the test (not rewarding trespassers) do not apply to
mutual mistake. T’s tolerance of limited public use of the land was consisted with the behaviour of a generous owner, and does not undermine his
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claim in adverse possession.
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(1) Inconsistent use test does not apply to cases or error or mistake; (2) Granting permission to others to use you land is not
inconsistent with your animus possidendi.
Dis
Notes: In CML the judgements each provide a slight variation on the requirements for adverse possession. The approach in Teis
[176] seems to be the clearest. AP requires:
(1) Actual Possession: This possession must fulfill all of the conditions below for the entire 10-year period.
-Open and notorious: Public possession, not clandestine. Must put the true owner “on notice”. [177]
-Peaceful: No use of violence or fraud to obtain possession.
-Adverse: “The element of adversity means that the claimant is in possession without the permission of the owner.” [177]
-Exclusive: Third parties are excluded in the manner that an owner excludes the world.
-Actual: This part was undefined… I believe it means “possess in the manner of an owner” although I could easily be wrong.
-Continuous: No interruptions, except those inherent in the nature of the property (i.e. seasonal use is okay).
(2) Possession with the intent to exclude the owner (animus possidendi): Includes fulfilling the “inconsistent use” test if applicable.*
(3) Discontinuance of possession by the owner and all others who might be entitled to possession: What acts constitute continued
possession depends on nature of land.
*The inconsistent use test has been placed under both 2 and 3. Teis doesn’t clearly say which branch it fits under.
See: adverse possession, inconsistent use, mutual mistake, test for adverse possession
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Gorman v. Gorman (On-CA, 1998)
Gw and Gm separated and Gw stayed in the home. When they divorced they signed an agreement to sell the home and split the
proceeds equally. Gm visited it to see his kids but for 20 years, did not live there. His one attempt to move back in was
rebuffed by Gw. Gm repeatedly as Gw to buy his share of the home, but she said that she did not have the money. Gw asks for
exclusive title to the home via adverse possession
Is it necessary to prove animus possidendi to establish claim for AP? [yes]
Gw had actual possession of the home for 20 years. Case law is clear that intention is required to activate adverse possession. The only exceptions are
partial ones for mutual mistake, and this is not a case of mutual mistake. Thus Gw must prove intent. The departing spouse may have a variety of
reasons not to live in the family home yet still want to retain a property interest. The remaining spouse must be presumed to know this. Thus Gw has
a very high evidentiary burden to overcome and the evidence suggests that she continued to recognize Gm’s interest in the house.
If the adverse possessor has actual or constructive knowledge of the departing owner’s desire to retain a property interest, the
adverse possessor must meet a high evidentiary burden to establish animus possidendi. Mere occupation is not enough.
Dis
Notes: Arguably, Gw’s response to Gm that she didn’t have the money was an admission of his continuing title, since she implicitly
acknowledges his rights to the house (as with St Clair Estates, you don’t offer to buy what you already own).
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See: adverse possession, animus possidendi, intention to exclude
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Keil v. 762098 Ontario Inc et al (On-Ca, 1992)
one party bought a lot of residential land and applied for a severance of part of it, for development purposes. In litigation over
this severance it turned out that a neighbour was using part of the lot as a driveway, and had done so for over 20 years before the
title owner bought the land
The Court of Appeal agreed with the title holder's argument that recent cases, especially Masidon Investments, had made it
necessary "to demonstrate that use of the land by the occupant in possession is inconsistent with the form of use and enjoyment
that the titled owner intended to make of it". The court summarized the title owner's argument thus: "the intended use was ...
retention of the land in its present form until eventual development as a separate residential parcel. This use ... is not interfered
with by the laying of gravel and the passage of vehicles". But the court also stressed that the owner's intention must relate to the
time during which the limitation period was running. In this case the title owner had no intention when the period was running,
because it did not own the land then. It was the prior owner's intention that mattered, and no evidence had been led on that.
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Dis
Notes: Does this mean that the inconsistent use test actually helps adverse possessors when the title changes hands?
See: adverse possession, inconsistent use, intention to exclude, change of owners
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Georgco Diversified Inc. v. Lakeburn Land Capital Corp. (1993),
the plaintiff Georgco owned five contiguous plots of land on Hayden Street in Toronto, a street parallel to and south of Bloor
Street East. The defendant Lakeburn owned land immediately to the north, on Bloor. Since 1953 the plaintiff and its
predecessors in title had effectively occupied a strip 81 feet long and between two and a half and four and a half feet wide which
according to registered surveys belonged to the defendant and its predecessors in title. Counsel for the defendant conceded that
"the disputed lands have for a period of more than ten years been occupied by the plaintiffs and incorporated as part of the
backyards of the plaintiffs' houses, have been landscaped as part of such backyards, and appear to have been boarded by fences"
The trial judge held that the plaintiffs had had actual possession. Counsel for the defendant relied on Masidon Investments,
arguing that "in order to establish that the claimant to adverse possession has effectively excluded the true owner from
possession, the use by the claimant must be inconsistent with the intended use of the property by the true owner" and that "if the
true owner had no intended use of the disputed land, the claimant cannot satisfy the test of effective exclusion". Ground J.
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accepted that Masidon Investments was the case to be followed, and said this about the owner's intended use:
"The evidence before this court would seem to indicate that, if [the defendant] ... had any intention at all with respect to
the disputed lands, its intention as to use, at the highest, would be that no one should make use of the lands".
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Dis
Notes:
See: adverse possession, inconsistent use, intention to exclude, change of owners
Beaudoin v. Aubin (ON, 1981),
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B ask for a declaration that a 5-foot strip of A’s property be transferred to them. B and A both believed that the strip belonged to B for more than 15
years, and B’s fenced property covers it. Eventually they realized their mistake and A had the fence torn down so that he could reclaim “my land”. A
acknowledges B’s open and exclusive control of the land, but claims that due to error, B cannot have formed an intent to exclude him from it.
Does error bar the application of Adverse Possession? [no]
Reasoning: Intent to exclude the true owner does not need to be a specific intent to exclude the true owner as true owner. It is enough that he be
excluded under a general intent to exclude all of the world, which is the mark of animus possidendi that B clearly demonstrated by his fencing of the
property, among other things.
1) Error is no bar to animus possidendi; (2) “Where there is possession with the intention of holding for one’s benefit, excluding all others, the
possession is sufficient and the animusi is presumed… [such] intention include[s] the intention to exclude the true owner even if his rights were
unknown to the person in possession.”
Dis
“The application of judicial statements, without due regard for the facts of the case in which the statement was made, is a pregnant
and perennial source of error.”
See: adverse possession, error
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Wilkes v. Greenway (1890),
Greenway had acquired land previously belonging to Wilkes by adverse possession, but needed to use a private road belonging
to Wilkes in order to reach that land. He argued that he had also acquired an easement of necessity consisting of a right of way
via the road
The Court rejected Greenway's argument, noting that "there is nothing in the Statute of Limitations to create ways of necessity.
The statute does not expressly convey any title to the possessor. Its provisions are negative only. We cannot impart into
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such negative provisions doctrines of implication [of easements of necessity]".
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The successful adverse possessor acquires only the land itself and not any rights appurtenant to it
Dis
See: adverse possession, easement
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Easements
Less than title, these are non-possessory interests.
3.2.1: Easements (Servitudes)
Easements fulfill the same function of servitudes in the civil law, but are subject to different rules about creation and content/validity.
An easement is a non-possessory property interest in land, and if valid runs with the title. Thus it becomes part of the property interest
to which it is attached, and has an existence independent of the identity of the owner at any given time.
i) Creation
All easements must satisfy the four conditions of Ellenborough Park as a basic requirement of validity.
Re Ellenborough Park (CA 1956)
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In 1855, plots for the construction of homes were granted surrounding EP, and the conveyances guaranteed access to EP by all
homeowners provided they each paid a share of the upkeep. A century later, the new owners of the park want to use it for
building purposes, while the new homeowners want to stop them.
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Did the 1855 conveyances create easements in the park? [yes]
There are four requirements for an easement to exist: (1) A dominant and subservient tenement, (2) the easement must “accommodate” the
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dominant tenement by having a “sufficient nexus” between enjoyment of the right and use of the tenement, (3) the dominant and servient owners
cannot be the same person, (4) rights conferred by easements must be rights that can otherwise be given in a property grant. Here points 2 and 4 are
contested.
The judges first extend the scope of the easement, if it exists, to the 9-10 houses not fronting directly on the park, but seem uneasy about having
to do this. Point 2: The rights to the park clearly enhance the property values of the homes, but this alone is not enough, since an easement must be
“connected to the normal enjoyment of the property.” They state that the park represents something like a “common backyard” since none of the
houses had gardens. This provides a sufficient nexus, since the enjoyment of gardens is a “beneficial attribute of residence in a house as ordinarily
understood.” Point 4: Properly interpreted, the rights in the conveyances are not so excessive that they deprive the park’s owners of their property
rights, nor are they overly vague. They are like a right of passage over the land of another.
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Sets out main requirements for an easement (above).
Dis
Notes: Gold: Point 4 requires that the easement be clear in what it allows the dominant owner to do. It must also not interfere with
the possessory interests of the subservient land’s owner (joint possession or occupancy are not appropriate for easements, since an
easement is a non-possessory right). Disqualification under the “interference with possessory rights” criterion is fairly difficult.
See: easements; requirements for an easement
Cheshire, Modern Real Property (quoted in Ellenborough Park) [338]: “One of the fundamental principles concerning
easements is that they must be not only appurtenant to a dominant tenement, but also connected with the normal enjoyment of the
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dominant tenement…a right enjoyed by one over the land of another does not possess the status of an easement unless it
accommodates and serves the dominant tenement, and is reasonably necessary for the better enjoyment of the tenement, for if it has no
necessary connexion therewith, although it confers and advantage upon the owner…it is not an easement at all, but a mere contractual
right personal to and only enforceable between the two parties.”
Hill v Tupper (quoted in Ellenborough Park) [340]: Owner of land next to a canal was granted exclusive right to rent boats on
the canal. A neighbouring owner also began renting boats and the original boat-renter attempted to stop him, arguing that he had an
easement. This theory was rejected: “It is not competent to create rights unconnected with the use and enjoyment of the land and
annex them to it so as to constitute a property in the grantee.” EP judges’ comment: Plaintiff was trying to “set up, under the guise of
an easement, a monopoly which has no normal connexion with the ordinary use of his land, but was merely an independent business
enterprise.”
Re Lonegren et al and Reuben et al, (1988) BCCA [343]: Ownership of one tenement by Mr R and the other by Mr and Mrs R
as joint tenants does not constitute “the same owner” and thus does not violate the third requirement of Ellenborough Park. Ownership
must be only “sufficiently separate.”
Gold: The “different owners” test applies only at time of creation. If the same owner subsequently acquires both lands, the
easement is suspended, but not dissolved. If one land changes owners, the easement is revived. [In contrast to the Civilian approach]
ii) Content: Negative and Positive Easements
Positive Easement: The owner of the dominant land has a right to do something on the servient tenement. This can including passing
through it, tunnelling under it, right to drain water on to it, right to maintain power lines or sewage pipes, even the right to use a
neighbour’s bathroom! The servient tenement owner must tolerate this interference. Positive easements are relatively easy to create
and justify. There is essentially an infinite variety of them.
Negative Easements: The owner of the dominant tenement can prevent the owner of the servient tenement from doing something with
the servient land. There are a very small number of judicially-recognized negative easements. These include: the right to light, the
right to air by a defined channel, the right to lateral support for buildings, the right to continue to receive water (see also the “natural
rights” of the fee simple, above). Judges are very reluctant to extend this list.
Scope of Easements: The scope of the easement is flexible to an extent (Wong, below). However, easements granted for one purpose
cannot be used for another if this would substantially increase the burden of the easement or require additional legal rights. Malden
Farms ltd v Nicholson (1956) ONCA [386]: Right of access granted to a farmer for animals, vehicles and himself cannot be used by
property developer who buys the farm in order to start a beach resort. Re Gordon et al and Regan et al (1985) Ont HC [386]: Owner
of dominant tenement divided his land in two; right of way easement held to apply to both sections of dominant land as long as this
did not increase the burden on the servient land.
CML PROP - 45
Phillips v Pears, (Eng-CA, 1965)
F
House 14 and House 16 are side-by-side and the walls of 14 are built touching the walls of 16. As a result, 16’s walls are not weatherproof.14 was
demolished as unfit for human habitation. This left 16’s walls exposed to the elements and this caused damage. Ph alleges that by demolishing 16 and
not rebuilding it, Pe has violated an easement of protection from the weather.
I
D
Is there a negative easement for right to protection from weather? [no]
No existing or analogous easement provides protection like this. In fact, the Common Law has explicitly rejected general “rights to air” except along
a defined channel. This suggests a reluctance to grant open-ended atmospheric easements. The general principle is that negative easements which
undermine the fundamental enjoyment of land and its full development are to be avoided.
R
Negative easements must meet a very high threshold to be created, and even then, will likely be limited in scope.
Dis
Notes:
See: easements; negative easements
iii) Creation of Easements
Express Grants and Reservations
The simplest way to crate an easement is to say that it exists in a juridical act like a conveyance or covenant. The general rule of
interpretation is that grants are interpreted in favour of the grantee. Thus an express grant of an easement (“I sell you the dominant
land with an easement attached to it over my land”) will be interpreted generously in favour of the purchaser.
On the other hand, if the land retained is the dominant land, this is a expressed reservation (“I sell you the servient land, and I
attach an easement to it in favour of the dominant land, which I retain for myself”). Express reservations are more difficult to argue for
if the words of the grant are unclear, since interpretation in favour of the grantee means denying the existence of an easement on his
land.
Implied Grants and Reservations
Easements can also be implied in to grants. General Rules: Wheeldon v Burrows, (1878) Ch Div UK [348-349]: Sets out the “general
rules” of implied easements. Rule 1: When a grant is made, all “continuous and apparent” easements are granted with it, along with all
“quasi-easements” (rights that would be easements but for the fact that the land is owned by the same person – like using a right of
passage over your own land) “in other words, all those easements which are necessary to the reasonable enjoyment of the property
granted, and which have been and are at the time of the grant used by the owners of the entirety for the benefit of the part granted.”
Rule 2: If a grantor wishes to reserve any right over the tenement granted, it is the grantor’s responsibility to do so. There exceptions,
one of which is right of way easements which need not be stated explicitly.
CML PROP - 46
4 Exceptions to Rules 1&2:
(1) Rights of way of necessity (above). See also Road Access Act, RSO 1990, c R-34 [350]: Provides for statutory easements
of necessity Nelson v. Stelter [rabbit hil case]. But note the possibility of explicit disclaimer: Nickerson v Barraclough, (1981)
UKCA [349]: Even necessary rights of way can be derogated from explicitly in the grant.
(2) Mutual Easements: Richards v Rose [351]: Mutual easements (like support provided by two buildings depending on each
other) need not be specified explicitly.
(3) Implied easements necessary to fulfill obligations resulting from simultaneous sale of land to two or more grantees [351352]. If you sell half your land to one person and half to another, any necessary easements will be implied in to the grants in favour of
the other land.
(4) Give effect to intentions of the parties: Pwllbach Colliery Co v Woodman (quoted in Wong) [355]: “The law will readily
imply the grant or reservation of such easement as may be necessary to give effect to the common intention of the parties to a grant of
real property, with reference to the manner or purposes in and for which the land granted or some land retained by the grantor is to be
used. But it is essential for this purpose that the parties should intend that the subject of the grant should be used in some definite and
particular manner. It is not enough that the subject of the grant should be intended to be used in a manner which may or may not
involve this definite or particular use.”
F
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Wong v Beaumont Property Trust, (Eng-CA, 1965)
W owns a restaurant in the basement of B’s building. Health inspectors require that W expand the ventilation duct for the
kitchen. B refuses to allow W to expand the duct. W bought out a previous restaurant’s lease on the building, which stipulated
that the lease was for the running of a restaurant business.
Does W have an implied positive easement to put up an expanded duct? [yes]
Denning: This question turns on the law of easements, since W is the successor to a previous restaurant, and B bought the property from its previous
owner. Applying Pwllbach, it is clear that the intent of the original parties was to allow the running of a restaurant. This implies a definite purpose,
which in turn justifies the creation of an easement for ventilation. Thus B must tolerate the enlarged duct.
Salmon (Concurring): The restaurant would be illegal without the enlarged duct. Both parties to the original lease can be presumed to know that
compliance with health inspectors was required to run a restaurant, thus the easement is justified.
(1) “A man who has a right to an easement may use it in any proper way, so long as he does not substantially increase the
burden on the servient tenement”; (2) Implicit easements giving effect to the intent of the parties to a land grant requires that
the original parties intended a very specific purpose.
Dis
Notes:
See: easements; implied positive easement
CML PROP - 47
F
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Sandom v Webb, (UK, 1951)
W was a grocer who leased the upper floors of his building to S, a barber. On the outside of the building, extending up the
walls of S’s floors, were two advertisements. These advertisements pre-dated S’s occupancy. One was for W’s grocery store
(located on the ground floor), which was painted on the bricks, and one for “Brymay safety matches” which was a billboard
attached to the wall. S now alleges that he owns the space used for the advertisements and asks for all monies received by W.
Did W have an implicit easement for advertising? [no]
Begins by discussing the centrality of good faith in the context of exception #4. States: “The question is whether the circumstances of the case…are
such as to raise a necessary inference that the common intention of the parties was to reserve to the landlord… some rights with regard to the display
of advertisements on the outer wall…or such as to preclude the tenant from denying the implied reservation…consistently with good faith.” The
landlord had a duty to reserve these rights explicitly. He failed to do so, thus the onus is on him to prove that this case falls in to the exceptions to
the normal rule. Yet mere knowledge of the ads by the tenant cannot be said to constitute the common intent of the parties: “The most that can be
said is that the facts are consistent with such a common intention. But that will not do. The landlord must show…that the facts are not reasonably
consistent with any other explanation.”
(1) The list of exceptions to the rule in Pwllbach is open [359]; (2) Knowledge of an existing state of affairs by the grantee is
not proof of common intent of the parties.
Dis
Notes:
See: easements
Barton v Raine, (ON-CA, 1980)
F
House 1 was acquired by B’s father in 1921, who bought the neighbouring House 2 in 1924. These two houses shared a driveway on House 1’s property.
In 1952 B’s father sold House 2 to his son and daughter-in-law. They inherited House 1 after the father’s death in 1968. In 1971 they sold House 1 to
R. After an argument, R erected a fence across his property, blocking the driveway’s access to House 2’s garage. None of the property transfers
mentioned an easement over the driveway.
I
D
Does B have an implicit easement to use the driveway? [yes]
Based on case law, the “common intent of the parties” exception for implied easements should be interpreted fairly generously, and not as
restrictively as earlier cases, like Sandom v Webb applied it. The passage of time between the original property transfer and disputes about implied
easements, means that the “affirmative evidence” of Webb will generally not exist. Here it is clear that in 1952, there was not question between the
parties that both sides would have access to their respective garages. Thus there was an implied easement of access.
R
(1) Exception #4 to Pwllbach (common intent of parties) should be interpreted generously; (2) Lowers evidentiary barrier.
Dis
Notes:
See: easements ; implicit easement
Prescription/Presumed Grant
CML PROP - 48
Prescription allows people to gain easements through long use. Again, this contrasts from the CCQ, which forbids acquisitive
prescription of servitudes. Note that the kinds of acts required to gain easements are less than the kinds of acts required for possessory
title. There are two kinds of prescriptive grants: those via statute and those via the “doctrine of lost modern grant.”
Time: Prescription periods are measured backwards from the start of the litigation involving them (via statute) or any 20-year
period (doctrine of lost modern grant – Storm [381]).
Creation: Prescriptive easements do not get created automatically. An action must be brought. It can be brought after either a
20 year period (statute or lost modern grant) or a 40 year period (statute). The only difference will be whether oral permission is a
defence (not under 40-year statutory prescription).
Requirements: The 4 Ellenborough Park conditions must be met here too.
Continuity: Interruptions are judged according to the nature of the right being claimed. See Axler, below. Prescription transfers
between landholders.
Defences: Oral permission (works only against 20-year prescription), written permission (good vs both), not “user as of right”
(good vs both – see below), interruption for more than one year, no prescription with respect to cables or wires (s 32), no air or light
easements (s 32).
User as of right: This is like the “quality of possession.” To get a presumed grant, the use must be: without secrecy, without
violence and without permission. [373, Storm at 383] Note that toleration/acquiescence and permission are different things!
Other requirements: Prescription can only operate for and against a fee simple – it does not work against life estates, by a
tenant against another tenant or against the landlord, etc.
Prescription at common law: This is the “use since before 1189” case, which cannot apply in Canada and is irrelevant.
Limitations Act [371]: s 31 Merely enables the possibility of prescription in Ontario. Removes the “not time immemorial” defence.
Other CL defences can defeat the grant. 20 year period to establish. s 32 after 40 years, oral permission is no longer a defence.
F
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Garfinkle v Kleinberg, (ON-CA, 1955)
The parties’ houses are built upon a common wall, and G’s fireplace uses K’s chimney, which is entirely on K’s side of the
wall. The chimney has been shared since 1912, as found by the trial judge.
Does G have a prescriptive right to use K’s chimney? [yes]
K pleads the defense of secrecy, which requires lack of actual or constructive knowledge. Clearly K did not have actual knowledge of the shared
chimney. But he had constructive knowledge – “the means of knowledge” thus secrecy is no defense.
(1) “Yet actual ignorance…will not in every case prevent the enjoyment from being as of right. There are some things which
every man ought to be presumed to know. Very slight circumstances may put the servient owner upon inquiry, and if he
neglects to make inquiry it may be that knowledge must be imputed to him;” (2) “Where an ordinary owner of land, diligent in
the protection of his interests, would have a reasonable opportunity of becoming aware of the enjoyment by another person of
a right over his land, he cannot allege that it was secret [absent fraud or deliberate secrecy]”
CML PROP - 49
Dis
Notes:
See: easements ; prescriptive right
F
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D
Kaminskas v Storm (ONCA, 2009)
K and S are neighbours. K’s driveway encroaches 3 feet on to S’s property. K parks his car in the driveway, as all preceding
occupants of his home have done for the past 56 years. S objects. K became the owner of his house in 1991, and received a
written letter guaranteeing his use of the driveway from S’s predecessors in title.
(1) Was a 40-year prescriptive easement already in effect at the time of the 1991 letter? [No – thus letter defeats K’s claim] (2)
Was K a “user as of right”? [No – there was permission.]
1) The 40-year period is a statutory creation and must immediately precede the action. Thus the written permission in 1991 broke any statutory
prescription that would date from 2009. Thus K has recourse only to the doctrine of the lost modern grant. (2) However, the letter of 1991 shows that
the K’s predecessor’s use of the driveway was not “as of right” – instead it was with the explicit permission of S’s predecessors in title. This comes out
in the letter and testimony. Thus no “lost grant” prescription either.
R
Confirms existence of doctrine of lost modern grant in parallel with the statutory prescription regime.
Dis
Notes: Gold: The future existence of this doctrine is called in to question by this judgement/judges in general.
See: easements ; prescription; permision
Axler v Chisholm, (1977) On HC [373]: A stored a portable dock on C’s property from Oct to May. Since this was a summer home,
there was no knowledge, actual or constructive (means/possibility of knowledge) by C’s predecessors in title, so A’s action were
secret, and thus not “user as of right”: “It should not be held that an owner of a vacant summer cottage lot has an obligation to inspect
his or her boundaries of the lot at certain seasons of the year, or that failure to do so would be to risk loss of property rights.”
iv) End of Easements [387]
Easements can be ended: by application via statute (BC only); if the purpose of easement no longer exists; if theeasement is abused
(Malden Farms); if the same person holds both dominant and servient land under the same estate (if the estates differ, the easement is
merely suspended); by release. Release may be express or implied. The burden of proof is very high if the owner of the servient
tenement is the one arguing for implicit release. Mere non-use does not constitute release. Intention to abandon the right must be
shown as well.
CML PROP - 50
CML PROP - 51
Rights (flow)
Establishing a property right
Finders Cases: 1st has
prop rights against all,
but true owner
The right to exclude (Merrill)
Creating new property
Abandoned
goods
Waiver of Right
Must establish
legal possession
Possession test (uses factual
context)(must be 1st)
Pierson v. Post;;Tubantia;
Popov v Hayashi
(1) Certain
Control (higher
standards for
inanimate objects).
Direct control: Pierson
v. Post; Indirect
Control: Parker v. BA;
Tubantia; Intention to
control Keron v.
Cashman
(2) Intent
to
Possess
(Legal
possession
not
physical)
Make
argument
for
creation
(or not) of
property
rights.
Labour: Locke,
INS v AP, Victoria
Park; Economic:
Bentham, INS v AP,
Bare License (Contractually
NOT exercising a property right)
does not confer any rights
Tragedy of
Commons:
Demsetz, Intel,
Moore, Southwark.;
Socially useful
activities: INS v
AP, Moore,,
Victoria Park;
Sole License
(not to license
anyone else)
Floodgates:
Intel, Moore,
Unsuccessful: misappropriation
doctrine; WCVB-TV v. Boston; Victoria
Park Racing (rejects quasi-prop); Moore
possession secured, can sue
2nd person for conversion
Exclusive
License
(not to
license
anyone
else, or
oneself)
Bailment Def: Street’s
Foundations of Legal Liability
Arise contractually or by operation
of law (finders, mistake)
Elements (1) Dispossession of chattel
by owner; (2) Possession of chattel by
bailee: (3) Mutual intention that the chattel
will be redelivered to the owner after a
period of time (possibility with
repairs/improvements ).
Duties of the bailee: The bailee must exercise the caution
of a reasonable and prudent owner. Note presumption of negligence
by bailee for damaged / lost chattel (no DofC inherent in licenses)
Mix of both: Quasi Property: INS v. AP
Gratuitous bailee: the
Successful. You have property now sue: remedies ; Pittsburgh Athletic ; Boston
Athletic ; Canadian Admiral Corp (need copyright); Diamond v. Chakrabarty
standard of care is gross
negligence.: Martin v Town
N’ Country Delicatessen
(License);
Parker v. BA;
Bailee for reward: If
consideration passes for the
bailment, then the standard of care is
ordinary negligence. Heffron v
Imperial Parking Co; Punch v
Savoy’s Jewellers (sub bailment.)
CML PROP - 52
Rights
Bases for Getting a Property Right

Establish possession

through direct control over object: Pierson v. Post; or

through indirect control over object (control over space in which object is located): Parker v. British Airways Board;
The Tubantia; AND

with intention to control (Keron v. Cashman)

Economic rationales

Avoidance of free-riding (avoidance of tragedy of the commons)

through investment of labour and money for socially useful purpose: INS v. AP;

Encourage investment in goods embodying reputation: INS v. AP;

BUT avoid extending property rights so far as to create tragedy of the anticommons (too many property rights stifle
economic development or create economic uncertainty): Moore v. Regents of the University of California
The Right to Exclude

A central property right is the right to exclude others from use: Merrell

May be attenuated where the subject-matter of the property right is a public good: Brandeis in INS; Hamidi
Taking of Property

Parliament and Legislatures may take property without compensation

Common law presumption that Parliament/Legislature intends to compensate unless clearly states otherwise: Manitoba
Fisheries Ltd. v. Canada

When has Property Been Taken?

Easy where all rights removed (Mariner; CPR v. Vancouver)

Where only some rights removed or postponed, more difficult to tell

Public policy helps resolve this difficulty

Look at purpose of statute

If promotes true public good, then more likely NOT a taking

This is explicit in US but only implicit in Canada

If transfers economic value between private individuals, then more likely to be seen as a taking

But transfer of economic value without some transfer of property right may not amount to taking (Mariner;
CPR v. Vancouver)
CML PROP - 53



But even if only enhances value to State, may be sufficient: The Queen in Right of BC v. Tener

Look at how much legal rights curtailed

The more rights removed, the more likely is a taking
In US, taking is any regulation that goes beyond nuisance: Lucas v. South Carolina Coastal Council

Court decision may amount to taking: Stop the Beach Renourishment
Under NAFTA, c. 11, any interference with the use of property which has the effect of depriving the owner, in whole or in
significant part, of the use or reasonably-to-be-expected economic benefit of property is a taking: United Mexican States v.
Metalclad Corp
Pierson v. Post (US, 1805)
Post and his dogs hunted, chased and pursued a fox along the beach (which was abandoned land). Pierson was aware of the
chase, and he killed the fox and carried it off. Post claimed a legal right to possession of the animal, and the lower court agreed
with him
I
Does a person obtain possession of a wild animal by chasing it? [No]
D
Intent to Possess = chasing the animal all day; being a hunter
Certain Control = NO certain control
Merely finding and chasing a wild animal does not give a person possession. Even merely wounding the animal will not give
right to possession. The animal must be captured or killed in order to constitute possession.
Possession Test: (1) Certain control, and (2) the intention possess exclusively
Post had the requisite intention, but not sufficient control
Pierson gained possession when he ‘removes the animals natural liberty’ (kills it, even if he is not in physical possession)
We justify the relaxation for the need for physical possession, where it is likely to follow from the legal possession (a high
degree of certainty of control)
R
Mere pursuit of an animal does not give one a legal right to it.
Dis When a person spends his day hunting a wild animal and comes close to reasonably capturing him, another person should not
be allowed to claim possession of that animal
See: abandoned property; possession; legal possession; physical possession
F
F
Tubantia (1924)
Concerns a salvage dispute between two groups of salvors (one of which was led by Sippe).
SS Tubantia was an ocean liner that sank in 1916, along with a large amount of gold coins. In 1924, the wreck was located and
recovery was initiated. Sippe had marked the wreck with bouys, obtained limited access, and sent in divers – but the divers
could only stay down there briefly, and had not yet retrieved anything of real value.
CML PROP - 54
The second ground had a better equipped ship and was able to salvage much if the ship.
I
Did Sippe establish legal possession? [yes] Which would allow him to prevent the second group from salvaging the ship.
D
Intent to possess = going to the dive site; diving in the ship; placing buoys
Certain control = altering the ship; diving into the ship;
Possession requires that a person have sufficient control over the object. Control does not necessarily mean "complete
dominion." Rather, control is subject to the particular context and type of property:
→ Physically demarcating the area under which a wreck is found, accessing the wreck and sending in an exploration team
constitutes sufficient possession in the case of a sunken shipwreck
The court found sufficient possession – Sippe had sufficient control and use of the wreck to support his intention to exclude.
R
Certain control is judged within the particular context of each property.
See: abandoned property; possession; legal possession; physical possession;
Popov v Hayashi (US, 2002)
F
Barry Bonds hit a record home run into the stands. Popov had put his glove up and made contact with the abandoned baseball,
but was prevented from catching the ball when he was illegally attacked by a mob of people. Hayashi, away from the mob, saw
the ball on the ground and picked it up. Popov claimed that the ball belonged to him; Hayashi claimed the same.
I
(1) Did Popov secure possession, or was he about to? [we don’t know, since the Popov didn’t meet his burden of proof, he can’t
be successful] (2) Does Popov have sufficient possession to claim a right against the whole world? [no]
D
Intent to possess = raising his glove, standing where bonds normally hits home runs
Certain control= We can’t tell. Did he catch the ball, was he about to catch the ball, etc.
There are three criteria of possession:
→ 1 -the object must be lost or abandoned
→ 2 -intention to control to the exclusion of others
→ 3 -actual physical control
⇒ If #2 and #3 are met, but actual physical control is prevented by an illegal act, courts may find a pre-possessory right based
on equity.
⇒ physical control may also vary by context, the community of practice, and the object itself.
Decision: Pre-possessory right for Popov, possessory right for Hayashi
Judge uses the pre-possessory right of Popov, and Equity principle to make Hayashi sell the baseball and split the proceeds with
Popov
R
If certain control cannot be established, the bringer of an action has the burden of proof, on the balance of probabilities.
See: abandoned property; possession; legal possession; physical possession;
CML PROP - 55
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Armory v Delamire, 1792
A chimney sweep’s boy found a piece of jewellery and took it to a goldsmith to be appraised. The goldsmith took the jewel “in
order to weigh it” and made an unfair offer to buy it from the boy. The offer was rejected, but the goldsmith refused to return the
jewel. The boy sues in trover (an old variant of conversion).
Who has better title to the jewel? [the boy]
The finder of a thing, even if he does not acquire full and absolute rights over the thing, gains an interest in the property that is
good against “all but the owner.”
Dis
Notes:
See: finders; conversion; property
Keron v Cashman et al, 1896
F
A group of boys were playing by a railroad track when Cr found an old stocking, containing an unknown object and tied at both ends. The boys played
with it for a while until it broke open while Ca “was beating another boy with it.” The boys found $800 in cash. Cr claims all of the money as the first
finder, while the other boys claim an equal division.
I
D
Who found the money? [The boys found it jointly when the stocking broke]
R
Intention to possess a container includes intention to possess its contents only if the possessor is aware of their existence or
possible existence.
: Cr claims that he intended to inspect the stocking but it was taken by the other boys. This testimony was unreliable and is rejected. Instead, like
the other boys he thought of it as a plaything. Thus none of the boys had any intention of keeping or examining the stocking until it broke open. Only
then did they form the idea of keeping the money, which must according be divided equally.
Dis
Notes:
See: finders; conversion; property, intention to possess
F
I
Bird v Fort Frances ( On-HC, 1949)
B found $1400 while playing beneath a building whose owner was recently deceased. He gave it to his mother, who gave it to
the police when they asked for it (no search warrant). The true owner could not be found and the police gave the money to the
town. B sues to recover the money from the town.
(1) What rights does B have over the money? [Those of a wrongful taker] (2) Was taking the money theft and how does this
affect B’s rights? [Unclear but doesn’t matter] (3) Was B’s possession so disrupted at the time at that the police took the
money that he cannot maintain this action? [No] (4) Does B get the money? [yes]
CML PROP - 56
D
Good summary of case law concerning finders at [115-116]. Judge rules that B is not a true finder as the term is used in Common Law, since the
money was not found in a public place, but was obviously hidden deliberately under the house. Thus he is a wrongful taker. Yet the rights of a
wrongful taker against someone other than the owner of the land he found the object on are as good as a rightful taker. B’s possession was not
interrupted by his mother giving the money voluntarily to the police. The town’s claim is only as good as the claim by the police, and they were
merely the bailees of B’s mother. Thus B’s claim outranks everyone
R
(1) If a wrongful taker is dispossessed of chattels, he may sue for their recovery; (2) “Possession will not be lost so long as the
power of resuming effective control remains”; (3) The rights of even a wrongful finder are good against the world, except the
true owner and perhaps the owner of the land the chattels were found on.
Dis
Notes: B is 15 at the time judgement…litigating before he could drive! See also Grafstein, in “other cases” below.
See: finders; conversion; property, possession, dispossession
F
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Moffatt v Kazana, 1969
The Russells were the owners of a bungalow. Mr R had hidden a biscuit tin full of money in the attic. He sold the bungalow to
K and forgot about the tin when he moved out. S, a workman for K, found the tin while doing renovations. S took the tin to the
police, who paid £1,987 to K. K was asleep at the time of the finding but now claims the money is his. R’s family sues for
recovery.
Who owns the £1,987? [The Russells]
It is indeed strange that Mr R forgot about the tin at the time of the sale, given the amount of money inside. Sadly he has died
and cannot testify. However, the judge accepts that the tin belonged to Mr R and that he merely forgot about it. He thus
remains the true owner unless the money was conveyed to K. Such conveyance could occur via abandonment, gift or sale. Yet
there was no gift or abandonment. And sale of a house never includes sale of chattels unless explicitly mentioned. So the
biscuit tin belongs to R. K argues that rights in the tin must go to him, since he could have prevented R from recovering it via
trespass, which is a ridiculous legal situation. The judge states that since this hypothetical difficulty did not arise, there is no
need to let that impede a just solution.
(1) “One does not abandon property merely because one has forgotten about it”; (2) Hypothetical difficulties may not be
pleaded at Common Law; (3) The owner of land on which lost chattels are found has a lower claim than the true owner.
Dis
Notes:
See: finders, Chattels; possession
F
Parker v. British Airways
P found a gold bracelet in an airport lobby. He gave it to BA with a note stating his name and address and asking that the
CML PROP - 57
I
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bracelet be returned if BA could not find the true owner. BA failed to find the true owner, but sold the bracelet and kept the
profits.
Who owns the bracelet? [P]
Notes that the law is unsettled. A few things are clear: finders get opposable rights if the article is found in a public area; trespassers’ rights are
inferior to the owner of the land they are trespassing on; chattels attached to buildings belong to the owner. The rest is unsettled law, and the
appeals court must exercise its law-making power here. The court creates the following test [133-134]
Rights and obligations of finder
1. Finder acquires rights only if (a) thing is lost or abandoned and (b) he takes it in to his care/control.
2. Finder acquires very limited rights if acquired with dishonest intent or while trespassing.
3. Subject to 1-2 and 4, the finder’s rights prevail against all but the true owner, one claiming through the true owner, or someone with a right that
subsisted at the time the item was found (like a secured creditor).
4. Unless otherwise agreed, if the finder is working for someone and the finding is not “wholly incidental or collateral” to his work, the employer gets
the finder’s rights over the object.
5. Finders must make reasonable efforts to find the true owner, and must keep the item in good condition until then.
Rights and obligations of occupier
1. The rights of the occupier of land/buildings are superior than the finder’s rights for chattels in or attached to the land, regardless of whether the
occupier is aware of the chattels (see South Staffordshire Water Co in other cases, below).
2. The rights of a building’s occupier are superior to those of the finder if, before the chattel has been found, the occupier “manifested an intention
to exercise control over the building and the things which may be upon it or in it” (i.e. banks have a policy of controlling the contents of their vaults,
so if you found a bracelet on the floor of a bank vault, the bank gets to keep it).
3. An occupier who uses the rights in 2 is under a duty to take all reasonable measures to find the original owner.
4. Occupiers of chattels (ships, cars, aircraft) are treated like the occupier of a building.
Applying this test to the facts, we see that BA had no pre-existing policy of controlling objects in its lounge; entry was free, there were no signs
posted to this effect, and there is no customary usage to suggest otherwise. The bracelet belongs to P.
R
Creation of test outlined above. Note that the rights of wrongful finders relative to occupiers remain unsettled.
Dis
Notes: BA must argue they claim possession of everything in the lounge regardless of what it is. And they claim this intent to possess
prior to the finding of the bracelet.
Just like the sock case, there must be an intent to possess the sock
If the owner has been found, parker would have fulfilled his obligations under bailment
See: finders, Chattels; bailment
Other Cases
Durfee v Jones (19th century American case) [113]: Bailee of a safe whose duty was to sell it found a sum of lost money
inside. He was allowed to keep this money against the owner of the safe, because the owner never had any conscious possession of the
money.
Buckley v Gross, (1863) UK [117]: Mere possession does not give a right of recovery if dispossession occurs, not for a
wrongful reason, but for a legitimate one, such as confiscation under suspicion of stolen goods.
Hibbert v McKiernan, (1948) UK [115]: Abandoned golf balls taken by a trespasser belong to the course, not the trespasser.
CML PROP - 58
Bridges v Hawkesworth, (1851) UK [129 – full judgement reproduced]: Money found of the floor of a shop belongs to
customer who found it. If the shopkeeper had rights, they would have to pre-date the money being given to him. Yet clearly the money
was never in his control. This is proven by the following conjecture: could the true owner have sued the shopkeeper if the money had
never been recovered? Clearly not, since the shopkeeper never had control or responsibility for the money. Thus mere ownership of
the land upon which something is found gives no rights.
Hannah v Peel, (1945) UK [115]: Broach found in a house of which owner had no knowledge belongs to finder.
South Staffordshire Water Co v Sharman [130]: Parker v British Airways distinguishes this case by the present one by either:
(a) “the rings were in the mud and thus part of the realty” (!) or (b) the finder was employed by SSWC, who had a right to whatever he
found.
Grafstein v Holme and Freeman, (1958) OAC [131]: Employees of a store found a box, which they were ordered to place on a
shelf, unopened. Two years later they opened it and found $38,000. Judges treated moment of opening as time of legal “finding.” But
they held that G had a higher claim because he had taken control of the box and its unknown contents 2 years earlier. They stated that
there should be a legal presumption of possession in favour of the owner of the land on which the thing is found. In obiter they
suggested that a claim by G on the basis that he employed H and F would have failed.
Kowal v Ellis, (1977) Man CA [132]: Finder is considered the bailee of the true owner. This gives him a right to sue for
subsequent dispossession. Owner of the land may not “oust the claim of a bailee by finding…some kind of metaphysical
possession…[instead he needs an equivalent bailship]…The reality is that the defendant, not even being aware of the existence of the
pump, owed no duty with respect to it to its true owner” and thus could not be a bailee.
Finders Perscription
 We don’t have limitations through sec. 15
o Rather it's a 10 year period in the limitation act
o However the act is unclear if the 10 year limit starts at the first conversion, only, or if it restarts with each
additional owner (this changes based on different limitation acts)
 Its clear if you find something, then lose it, and someone else finds it the 10 year period restarts when
they find it
 It’s less clear where you find something then sell it (ie at a pawnshop).
 That’s why people try to introduce legislation that frees the a person who buys something they
didn't know was stolen/found, because they didn’t know.
o Thus does not have the same security as buying land
 So anytime you buy something second hand you take a risk
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J.A. Rahl, "The Right to 'Appropriate' Trade Values" (1962)
o Rahl argues that the misappropriation doctrine should not be employed against competition generally, but only against
competition "where the result would be to destroy either the value created by plaintiff or the market for it".
o That is, "the protection ...[should] safeguard the plaintiff's opportunity to market his trade value"; it should not protect
opportunities to increase profitability.
INS v. AP (US, 1918)
The Complainant, the Associated Press (Complainant) and the Defendants, International News Services (Defendants) are
both involved in the news collection business. The collected news is distributed by the parties to newspapers around the
county. Both parties are in direct competition with each other. International News Service (INS) was unable to report on the
war in Europe due to prohibitions enacted by foreign governments. Consequently INS pirated the Associated Press's (AP)
newspaper by
 bribing the respondent’s employees to furnish AP news before publication,
 inducing the AP member to violate by-laws and permit the appellant to get news prior to publication,
 copying news from bulletin boards and early editions of the respondent’s newspapers.
The appellate court upheld an injunction against the appellant on grounds that the appellant’s actions constituted unfair
competition in trade.
I
(1) Is there property in news? (2)Does published news become common property when published?
D
IP does not cover pure facts. There is not statute covering pure facts. This is a new issue, which has made facts suddenly
valuable.
Also this is a property issue because injunctions are only available with property rights.
The majority then tries to make news property for the injunction.
The reasoning was largely economic, centered around the need to sustain incentives to engage in news-making. As a result
the court held that there is a quasi-property interest in news due to the commercial realities of its production. AP's labour is a
valuable commodity, and INS is benefiting from it for free. Additionally each party is under a duty to conduct its own
business so as not to unnecessarily or unfairly injure that of the other party. It is necessary to distinguish the substance of the
information in news from the particular form it is communicated in; the facts themselves contain no property interest,
however the expression of the idea does give rights to the owner.
Case ended in an out of court settlement.
R
While there is property in the literary aspects of a news story, there is no property in the facts except as between competitors.
However, there is quasi-property to the extent necessary to prevent unfair competition.
Notes The ‘you cannot reap what you don’t sew’ analogy is a false analogy. Yes collecting news facts can be like cultivating a
field. But the news company does not own the people whose stories it is collecting (anagolous to the field the farmer plants
F
CML PROP - 60
his crop on). The analogy is convincing, but it does not work. Also there is also the argument for the labour of INS which is
Lockean argument, laboring over a farm makes it yours, so long as others have the same opportunity, this is also false, as
we don’t reward some kinds of labour.
What the majority (Pittman J) does here is say: Property = Value + Labour
This is not uniformly applied, and is overinclusive, for ex. A restaurant spends labour finding a good location, and a 2nd
restaurant moves there. This is permitted, we don't know why.
Dis
Grandise and Holmes: Concerns itself with accessible news. AP does not serve all of America, so some people won’t receive
news if they cannot publish. Also its good for news if we have more than one company reporting. Creating a new property
right here can have drastic consequences for the future of news and property. And congress already chose not to legislate on
this.
See: Property; Quasi-property; injunction; misapporpiation doctrine; JA Rahl
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Pittsburgh Athletic Co. et al v. KOY Broadcasting Co. (US, 1930)
the Pittsburgh Pirates obtained an injunction to prevent the defendants from making unauthorized broadcasts of their games
from nearby leased premises which overlooked the stadium.
The Pirates had given exclusive broadcasting rights to two other radio stations, rights which Schoonmaker J. described as
property. He said at p. 492 that KQY's action:
"…amounts to unfair competition and is a violation of the property rights of the plaintiffs. For it is our opinion
that the Pittsburgh Athletic Company by reason of its creation of the game, its control of the park, and its
restriction of the dissemination of news therefrom, has a property right in such news and the right to control the
use thereof for a reasonable time following the games.”
R
Dis
See: new property; media; misapporpiation doctrine; injunction
F
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Boston Athletic Association v. Sullivan (US 1989)
concerned a company selling t-shirts with "Boston Marathon" written on them
The BAA was successful in enjoining this
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R
Follows pittsburg athletics
Dis
See: new property; media, boston marathon cases; misapporpiation doctrine; injunction
F
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WCVB-TV v. Boston (1991)
the BAA had sold "exclusive" TV rights to one local TV station, but another one planned to broadcast the marathon simply by
setting up cameras on the streets.
The BAA failed in an attempt to obtain an injunction to prevent this. In the course of its decision the court stated:
"As a general matter, the law sometimes protects investors from the 'free riding' of others; and sometimes it does
not. The law, for example, gives inventors a 'property right' in certain inventions for a limited period of time; ...
it provides copyright protection for authors; ... it offers certain protections to trade secrets.... But, the man who
clears a swamp, the developer of a neighbourhood, the academic scientist, the school teacher, and millions of
others, each day create 'value' (over and above what they are paid) that the law permits others to receive without
charge. Just how, when and where the law should protect investments in 'intangible' benefits or goods is a
matter that legislators typically debate, embodying the results in specific statutes, or that common law courts,
carefully weighing relevant competing interests, gradually work out over time".
R
Contradicts pittsburg athletics
Dis
See: new property; media; boston marathon cases; misapporpiation doctrine; injunction
F
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Canadian Admiral Corporation Ltd. v. Rediffusion Inc., [1954]
the defendant cable company intercepted C.B.C. transmissions of Montreal Alouette games and broadcast them to its
subscribers.
The court held that "no matter how piratical, the taking by one person of the work of another may be, such taking cannot be an
infringement of the rights of the latter unless copyright exists in the work." It then held that such copyright did exist under the
provisions of the Copyright Act.
R
Dis
See: new property; media; copyright
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R
Victoria Park Racing and Recreation Grounds Ltd. v. Taylor and Others (UK, 1937),
P has a horse racing course. T owns land near the race course and erected a tower from which another individual A, observes
the races and comments on them. These commentaries are broadcast over the radio. VP wants the broadcast stopped because it
stops people from paying to see the races.
(1) Does T’s conduct constitute a nuisance? [no] (2) Does VP have quasi-property in their spectacle? [no]
Latham: (1) Attempting to look in to the lands of another is not a legal wrong, and VP should simply build a higher fence if
they want to control T’s visibility: “In my opinion, the law cannot by an injunction erect fences which the plaintiff is not
prepared to provide.” There is also no principle of law preventing someone from describing things he sees, as long as the
description is not defamatory or in breach of contract, which is not alleged here. Thus T did not unreasonably interfere with
VP’s property rights.
(2) Quasi-property has no authority for its existence in English law. It is at best a metaphor. Law cannot be based on a
metaphor.
Dixon: (1) The essence of nuisance is interfering with “natural rights” of the land (i.e. core property rights). Carrying out
business upon land is not part of the natural right of ownership. Thus the “loss of business” claim cannot be used to found
nuisance. Nor can the mere fact of overlooking by T constitute nuisance, as there are no precedents supporting a “right to
views.” (2) Agrees with Brandeis. Quasi-property is property in the market value of a thing, generally as a result of labour
invested in it. Yet property is not created simply through effort by economic actors. Instead, property must fall within the
categories of judicially-recognized rights. [this is tautological though! – Mike] No property right of this nature has been
recognized. Thus there is no property here.
McTiernan (concurring): Reasons unreported, agreed to dismiss the appeal.
Rich (dissenting): (1) Technological change has resulted in a new question for nuisance law. The real issue is “whether
non-natural use of neighbouring land made by him for the purpose of obtaining the means of appropriating…part of the
profitable enjoyment of the plaintiff’s land to his own commercial ends…falls within the [nuisance].” One of the main
purposes of owning land is carrying on business, and some businesses can operate only at the price of exclusion. The business
of horseracing is lawful and reasonable. The appropriation of the benefits of that business by T is unreasonable. Thus nuisance
has occurred. (2) No need to respond.
Evatt (dissenting): (1) “The law of nuisance is an extension of the idea of trespass in to the field that fringes property.”
Looks at all of the surrounding circumstances and concludes that while there is no general right to privacy, there is also no
general right to spy on ones neighbours. Thus in the circumstances, T’s actions were nuisance. (2) Agrees with majority in INS
v AP and states that this is a good example of the law modernizing itself along with technical change.
(1) Rejection of quasi-property approach in English law; (2) “Mere trade competition does not give rise to liability in tort”; (3)
CML PROP - 63
Overlooking the commercial land of a neighbour, even systematically and with a profit motive, is not nuisance.
Dis
Notes: Latham= pure judicial precedent/reasoning; Dixon= looks to core of “what is property” has tautological definition of scope;
Rich = utility and economic arguments; Evans = labour theory, “reap what was not sown.” Gold dislikes the reasoning of the antiproperty side. Gold thinks that since VP created the information by holding races, they should have gotten more protection than
newspapers, who merely report on events that would have happened anyways.
See: new property; quasi-property
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Moore v. Regents of the University of California (US, 1990)
Plaintiff visited UCLA Medical Center shortly after he learned that he had hairy-cell leukemia. Defendant removed
Plaintiff’s spleen to save his life. Even before the operation, Golde and Quan (Defendant), a researcher for the University of
California, both knew that Plaintiff’s blood products could have great commercial uses unrelated to his medical research.
Plaintiff flew from Seattle to UCLA several times after the spleen operation because he was told that it was necessary and
required for his well-being. However, these visits were designed to collect more research materials. Defendants then
developed and patented a cell line from Plaintiff’s cells and licensed them for commercial development. The commercial
rights were substantial and included cash payments and stock options. Plaintiff alleged that Defendants failed to disclose
preexisting research and economic interests in the cells before obtaining consent to the medical procedures. Plaintiff also
seeks to impose liability upon Defendants for the
tort of conversion.
A bit ironic because Moore would have undoubtedly died without the operation.
(1) Are Defendants liable to Plaintiff for conversion in the unauthorized use of human cells in medical research?
(2) Must Defendants disclose personal interests unrelated to the Plaintiff’s health that may affect Defendants’ medical
judgment?
Defendants are liable for nondisclosure. Defendants were required to obtain Plaintiff’s informed consent (should have told
plaintiff about the conflicting economic interests).
 This makes him liable for loss suffered by Moore… but Moore’s loss is he would be dead if the operation didn’t
occur
Conversion protects against interference with possessory and ownership interests in personal property. Plaintiff’s argued that
he continued to own his cells after their removal and Defendant’s unauthorized use of the cells constituted a conversion.
However, no court has imposed conversion liability for the use of human cells in medical research. Plaintiff claims
ownership of the results of socially important medical research, including the genetic code of chemicals that regulate the
functions of every human being’s immune system.
Under current law, the tort of conversion does not extend to the facts of this case. To establish a conversion, Plaintiff must
CML PROP - 64
establish an actual interference with his ownership or right of possession. If Plaintiff has neither title nor possession, he may
not maintain an action for conversion. It is clear that Plaintiff did not intend to maintain possession of the cells after their
removal. After reviewing applicable statutes and cases, the court found nothing to support the claim that a person retains a
sufficient interest in excised cells to suppose a cause of action for conversion.
The court gives three reasons why conversion liability should not be extended to encompass the facts of this case: (1) policy
considerations; (2) defer to the Legislature; and (3) not necessary to protect patients’ rights.
Policy considerations – The court weighs the public interest in a patient’s right to make autonomous medical decisions
against the consideration that the court not threaten innocent researchers engaged in socially useful activities with disabling
civil liability. The court did not extend conversion liability because it would utterly sacrifice the goal of protecting third
parties. Extending liability for conversion would only indirectly protect patients’ right to autonomy. Since conversion is a
strict liability tort, it would impose liability on all those into who work with the cells. It would not protect innocent parties.
Defer to Legislature – It is the legislature that should decide to impose liability if they feel it to be appropriate.
Not necessary to protect patients’ rights – Disclosure obligations will protect patients against the very type of harm Plaintiff
suffered. Enforcement of physician’s disclosure obligations protects patients directly, without hindering the socially useful
practices of innocent researchers.
R
Dis
There are two dissenting opinions.
* (Justice Broussard) I dissent from the majorities’ holding that facts of this case do not state a cause of action for
conversion. Because Plaintiff alleges that Defendants wrongfully interfered with his right to determine, prior to the removal
of his body parts, how those parts would be used after removal, J. Broussard concludes that the complaint stated a cause of
action for conversion under traditional common law principles.
* (Justice Mosk) The majority opinion gives patients only the right to refuse consent and the right to prohibit the
commercialization of this tissue. It does not give them the power to consent to that commercialization on the condition that
he shares in the proceeds. Furthermore, any researcher or physician who is not personally treating the patient does not need
to obtain consent.
Notes Plaintiff must establish he had legal possession of his cells (intent to possess; and certain control). We don't have law here
with living humans, only corpses.
See: new property, possession, abandonment, patenting
F
Diamond v. Chakrabarty (US, 1980)
C invented a bacterium that fed on oil. He claimed patents for (1) the process of producing the bacterium, (2) for a delivery
mechanism, and (3) for the bacteria themselves. The third patent claim was rejected and C appeals.
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Are micro-organisms “manufactures” or “compositions of matter” and thus patentable? [yes]
Majority: Composition of matter and manufacture are both words with very wide scope. By choosing these two words and
putting them in a list preceded with “any,” Congress clearly intended that the scope of patentable material be interpreted
widely. This is particularly true since the Patent Act targets unforeseen technological developments. The laws of nature,
physical phenomena and abstract ideas are not patentable. Yet C did not discover a hitherto unknown species – he invented it
in a laboratory. D’s contention that Congress could not have foreseen genetic engineering must be rejected, since “a rule that
unanticipated inventions are without protection would conflict with the core concept of the patent law.” Likewise, the
doomsday scenarios advanced by scientists are not admissible evidence, since they deal with societal balancing issues that
belong to the legislature.
Dissent: Given the existence of the Plant Patent Act and Plant Variety Protection Act, Congress clearly has decided that plants
fall outside of the scope of patentable subject matter. It is thus not inevitable that the Patent Act includes life forms like
bacteria.
Lifeforms can be patented in the US.
R
Dis
Notes: The US Patent Act § 101 reads “Whoever invents or discovers any new and useful process, machine, manufacture or
composition of matter…” In Canada, higher life forms like plants and animals cannot be patented. Cells, yeast, algae, etc, can be
patented. Canada will come to a similar decision about microorganisms, fungi, etc.
See: new property, patenting life forms
Right to exclude
Blackstone (quoted by Merrill) [195]: “Property is… that sole and despotic dominion which one man claims and exercises over the
external things of the world, in total exclusion of the right of any other individual in the universe.” This right consists of “free use,
enjoyment and disposal.” This is normally reformulated as “possession, use and disposition.”
Merrill, “Property and the Right to Exclude” (1998) [193]: Claims that all property rights can be derived from the right to exclude.
Thus if you have a right to exclude people from something, there are property rights in that thing. Absent a right to exclude, there are
no property rights. Gold: It’s an interesting article, but I think he has it backwards – all property rights are rights to exclude! It’s not
that there’s one magic stick making up property, it’s that all the sticks are magic in the same way
Licences and Property Rights

a bare licence is a privilege to do what is otherwise prohibited

the prohibition may be caused by someone having a right (property or otherwise) or by statutory prohibition

a bare licence simply removes the prohibition with respect to a particular individual but does not confer any rights
CML PROP - 66


bare licences are NOT property since no conferral of rights
a bare licence may be supplemented by other obligations

e.g., not to license anyone else (sole licence)

e.g., not to license anyone else and not to use oneself (exclusive licence)

exclusive licences sometimes treated as tantamount to property if all rights essentially granted to licensee
Bailment

Bailment arises whenever the person entitled to possession of a chattel parts with it on a temporary basis for a specified
purpose

Must determine whether there is actually a bailment relationship or a mere licence to use: see Martin v. Town N’ Country
Delicatessen Ltd.; Heffron v. Imperial Parking Co.

Indicia of bailment include, in parking lot examples, handing over of keys, issuance of ticket, hours of operation,
presence of attendant, etc.

If bailee damages or loses subject-matter of property right, has to show how not responsible: Punch v. Savoy’s Jewellers Ltd.
3.3.2 Bailment
i) Introduction
Street’s Foundations of Legal Liability (1906) [quoted in Martin 433]: “The bailment consists of the delivery of something of a
personal nature by one party to another, to be held according to the purpose or object of the delivery, and to be returned or delivered
over when that purpose is accomplished.” [This is the best definition since it avoids mentioning contract or trust, neither of which are
necessary for a bailment relationship to emerge – Mike]
Palmer v Toronto Medical Arts [quoted in Martin 430]: “Bailment is delivery of personal chattels in trust on a contract,
express or implied, that the trust will be duly executed and the chattels redelivered either in their original or an altered form as soon as
the time or use for, or condition on which they were bailed shall have elapsed or been performed… There is a very wide divergence
between the relationship of a bailor and a bailee, and the relationship of a licensor and a licensee, in that the latter, in the absence of
some special contractual provision, carries no obligation on the part of the licensor towards the licenesee in relation to the chattel
subject to the license.”
Elements of Bailment: (1) Dispossession of chattel by owner; (2) Possession of chattel by bailee: (3) Mutual intention that the
chattel will be redelivered to the owner by the bailee after a period of time (possibility that repairs/improvements will be done to the
chattel in the meantime, but that’s separate from the core of the bailment relation).
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Bailee for reward v gratuitous bailee: If consideration passes for the bailment, then the standard of care is ordinary negligence.
If the bailment is gratuitious, the standard of care is gross negligence. [429]
Duties of the bailee: The bailee must exercise the caution of a reasonable and prudent owner [437]. The level of negligence
depends in part on whether the bailment is gratuitous or for reward. Note: once loss or damage is proven while the chattel is in the
bailee’s custody, this creates a presumption of negligence, which the bailee must disprove! [436] A duty to fix/change/repair the
chattel is created by contract, and is not inherent in the bailment itself, which just requires upkeep of the chattel.
Example Bailments: Pawnshops, dry cleaners, rental cars, some parking lots, grocery deliveries.
Mossman and Flanagan, Property Law: Cases and Commentary (1998) [427]: Bailment can arise contractually or by operation of
law (finders, mistake). It can be gratuitous or for reward. Bailees are liable for damage to the chattel only through fault, with the
standard of conduct being that of a careful and prudent owner. This standard of care can be modified contractually by the parties to
make it higher or lower than the default property law position. Note that in the case of licenses, there is no duty of care inherent in the
license; it can be bargained for separately if desired.
ii) Bailment or License?
Gold: In grey areas, the courts will defer to the will of the parties/the label attached to the transaction. In general, though, the label
applied to the transaction is not important and the courts look to the content.




F
Borrowing, using someone else’s things
What about laundry you leave in the washer/drier at a Laundromat. And someone takes your things home
o If the law is generous and you say you took it in good faith for safe keeping it would be a bailment
o However, where they took it with an intention to sell it is conversion.
Bailment is a property notion not a contract notion
o It arrived pre contract with property
o Thus consideration is not required
There is an obligation to find the true owner
o In Parker v. British Airways this happened
Martin v Town N’ Country Delicatessen, (Man-CA, 1963)
M parked his car at D’s lot, which had attendants, exceptionally, because it was a busy night. Someone who was presumably
an attendant asked him to leave his keys in the car so that it could be moved if necessary, as the lot was quite full. M left his
keys in the car and his car was subsequently stolen and recovered in a damaged state.
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D
Was D the bailee of M’s car? [No, there was merely a license.]
R
(1) Delivery and possession can be actual or constructive; (2) Gratuitous bailments impose a gross negligence standard; (3)
Once damage or loss while in the possession of the bailee is proved, the burden is on the bailee to disprove negligence; (4)
Fairly high bar for possession of automobiles.
Two ways to see what happened:

Bailment
o Bailment starts when the keys are handed over
o When owner comes back to the parking lot and car isn’t there and parking dudes don’t know where it is, this can be an indication of
negligence

License agreement
o Two licences

1 parking attendant has license to take car

the parking space is being licensed to the car owner

Court choose to use license
o Because the parking/license was offered for free, so it wouldn’t be fair to hold the restaurant so responsible
: Majority (4): The parking lot was a courtesy offered by the restaurant and not a commercial venture. Thus even if there was bailment it was
gratuitous and there was no gross negligence here. More importantly, there was no change of possession of the vehicle. The keys were not given to
the attendant, but merely left in the car. Discussion of possession [430-433]. Finishes with unfairness of imposing liability on courtesy lots.
Dissent (2): “Delivery can be actual or constructive, but to constitute a bailment such delivery must exclude the owner’s possession of his property
and give the bailee custody and control over such property for the period of bailment.” Leaving the keys in the car at the attendant’s suggestion
clearly constitutes transfer of possession. This was also bailment for reward, since consideration was the additional business brought in by valet
parking [435]. He then surveys a bunch of bailment cases [435-436]. Since D never led evidence to prove that it showed any care at all, they should be
held guilty.
Dis
Notes: An example of constructive delivery is parking a rental car in the lot of the rental company after hours and putting the keys in
their return slot. They could take full possession if they wanted to/had an attendant, so even if they don’t take possession until the
next day, the law will hold the car to have been returned to them.
See: Bailment; parking lot; licenses
Refresher on fundamental breach: The doctrine of fundamental breach exists to police limitation of liability clauses. After all, it
would be unfair for a party to simply choose not to perform its obligations and then use the exclusionary clause to escape liability –
this would defeat the whole idea of a contract. As Lord Devlin said in Firestone Tire v Volkins “It is illusory to say: ‘We promise to
do a thing, but we are not liable if we do not do it.’” [448] Thus a breach which “goes to the root of the contract” will not be covered
by any limitation of liability clause. All that being said, FB no longer exists in Canada (Tercon v BC a 2010 SCC case) and only
unconscionability is used to police exclusionary clauses now.
CML PROP - 69
Heffron v Imperial Parking Co (On-CA, 1974)
F
H parked his car at IP’s lot. He gave the keys to the attendant and received a numbered ticket. Normal practice was for the keys to be taken to IP’s
parking garage across the street after the lot closed. The keys were not found at the garage, and IP did not call the attendant on duty as a witness.
H’s car disappeared while he was away and was found 3 days later in a damage condition and without the items H left in it. IP claims H was a mere
licensee and it has no duty of care over his car. As a final line of defence, IP points to the exclusionary clause on their ticket that absolves them of all
liability whatsoever. H pleads fundamental breach, which would not allow IP to take advantage of this clause.
I
(1) Was there a bailment relationship? [yes] (2) Did IP violate its duties as a bailee? [yes] (3) Are they saved by their
exclusionary clause? [No – doctrine of fundamental breach] (4) Can H recover for the contents of the car? [yes]
D
Again two ways to see things:

Bailment
o Keys left in car

License
o I gave the attendednt license to move the key from spot to spot. IN return car owner has licence to parking space
There was a clear transfer of control. The keys were left with the attendant, and the attendant was empowered to remove the keys to another
building owned by IP. Discussion of bailment vs license cases at [442-444]. This was accordingly a bailment. Thus the burden of proof shifts to the
bailee [445-446] and IP has completely failed to disprove the charge of negligence. Furthermore, taking reasonable care of chattels is at the heart of
the bailment relationship, so the doctrine of fundamental breach will not allow IP to hide behind their limitation of liability clause.
R
(1) Bailment relationships must be identified according to the entire circumstances surrounding the parties’ interaction [“While
no single factor…” 444]; (2) The bailee must disprove fundamental breach in order to make use of its exclusionary clause; (3)
Actual or constructive knowledge of the contents of a chattel will make the bailee responsible for the contents of the chattel,
unless the parties contract otherwise.
Dis
Notes: This is different from Down and Country in that the car owner paid to park, and received a ticket with a waiver of liability
clause.
This is also different from down and country because down and country was a restaurant, and this is a parking lot, making a profit
from parking. This is enterprise risk. It’s critiquable.
See: Bailment; parking lot; fundamental breach
iii) Sub-bailment
Gold: In the bailment/sub-bailment chain A-B-C, both B and C are bailees of A; C is a sub-bailee of B. Thus both owe duties to A.
Nirrus v CW Martin and Sons [quoted in Punch 456]: “The owner is bound by the conditions [of a contract signed by the bailee] if he
expressly or impliedly consented to the bailee making a sub-bailment containing those conditions, but not otherwise.”
CML PROP - 70
F
I
Punch v Savoy’s Jewellers (On-CA, 1986)
P had an $11,000 heirloom ring. She gave it to S in Sault Ste Marie to repair. S shipped it via mail to W in Toronto for repair.
W repaired it, but could not return it by post, which was the standard industry method, due to a postal strike. W contacted CN,
notified S that it would use CN, but no details were discussed, nor was P informed. When a CN employee arrived to take the
ring, he helped W’s employee fill in the bill of lading and in so doing, wrongly accepted the ring despite a CN policy not to
transfer jewellery worth more than $300. There is no record that the ring ever entered CN’s possession and it is clear that the
driver probably stole it, as CN refused to call the driver as a witness and apparently did not follow up on the matter internally.
CN claims that the bill of lading limits its liability to $50 per item.
(1) What was W’s duty to P? [Bailment – breached] (2) What was S’s duty to P? [Bailment – breached] (3) What was CN’s
duty to P? [Bailment – breached] (4) Does CN’s limitation clause apply? [no]
P
D
S
CP
CN
W
R
Chain of bailment and sub-bailment: P-S-W-CN. Note that S-W and W-CN are also in bailment relations with each other
independent of P. The transfer of the ring between all parties was via bailment for reward. (1) W had to treat the ring in the
same manner as prudent owner. A family heirloom worth $11,000 would be treated with exceptional care by its owner. W
failed to obtain P’s consent for sending the ring by a new and untried method, rather than simply waiting. It also should have
purchased insurance. W breached its duty to P. (2) S accepted W’s transport method without informing or consulting P, which
was wrong. S’s failure to insist on insurance was also a breach of bailment. (3) “Bailment combines elements of both contract
and tort.” If the ring was lost, damaged or stolen by CN’s employee, it is up to CN to disprove negligence on its part. This it
failed to do. Furthermore, P cannot be bound by CN’s limitation clause since she was unaware of it and would not have
authorized S or W to make such a contract. S and W owe P the value of the ring, and CN must pay them for their losses.
Ratio: (1) Bailment can arise independently of a contract between the bailor and the bailee; (2) The sub-bailee’s contracts bind
the owner only if the owner expressly or implicitly authorized the bailee to make such contracts; (3) “The unexplained
disappearance of a bailed chattel constitutes a fundamental breach” of bailment contracts; (4) The burden of proof in bailment
rests on the bailee.
Dis
Notes: not gratuitous bailment, but bailment for hire
See: Bailment;
CML PROP - 71
CML PROP - 72
REMEDIES
(source: Henry Roscoe)
BC law Commission - Report on Wrongful Interference with Goods
Real Property
Nuisance
Trespass
Personal Property
Trespass of
Chattels
Ejectment
Detinue
Who: real
property owners
Who: personal
Who: personal
property possessors
property possessors
Who: owners /
possessors
Who: property
possessors
What: Use of
adjacent land
interfering with
your enjoyment
of your land
(wrong is on
your neighbors
land; incidental
Miller v.
Jackson
What: wrongful
interference with
your own use of
your land (don't
need neighbors;
the wrong
occurs on your
land; direct)
Harrison v.
Carswell
What:
Removal of a
possessor with
not right to
possess the land
Remedy:
Injunction;
and/or damages;
Remedy:
Injunction;
and/or damages;
Remedy:
Injunction;
and/or damages;
Conversion
Who: dominion over the
What:
A person who
takes your things
(has possession,
but not legal: ie
loan to someone
who won’t
return it) and
wont give it
back
What:
Interfere with
use of property
[essentially
trespass] which
causes harm.
Remedy:
damages on date
of award
Remedy:
damages on date
of award
Intel Corp v.
Hamidi
property (you have a
possessory right; but may
not be in possession)
What: Severe
interference with
personal property by
damage, loss, or theft
(either completely
derived of use, or use
for a time). Does not
apply to intangibles
(Only physical object)
Shewish v. MacMillan
Remedy: Damages
calculated from the
date of conversion
CML PROP - 73
Remedies


Real property
o Nuisance: indirect interference with possession/enjoyment of land by holder of adjacent land
o Ejectment: right with someone in title to acquire possession from someone
o Trespass: direct interference with one’s possession of land
Personal property
o Detinue: wrongful failure to return property in possession to one entitled to possession
o Trespass to chattels: wrongly taking or damaging property of person in possession; requires some harm
o Conversion (trover): action in respect of destroyed or lost tangible property brought by person in dominion over chattel
(possessor or person entitled to possession)
 Not available for intangible property
CML PROP - 74
Law Reform Commission of British Columbia, Report on Wrongful Interference with Goods
Activities interfering with property rights fall into three general categories:
 damage to the property itself
 affect ownership
 interfere with possession.
In all of these cases, the law must assess loss while untangling rights of ownership and
possession. The tools it uses are centuries old, originally fashioned in an entirely different social and economic setting, although they
have been modified over the years.
The Common Law Actions [The actions share at least one feature in common: each deals with harm that arises
“intentionally” in contrast to harm that arises negligently or inadvertently. The intentional element refers to the act causing the
harm] - Moreover, once having intermeddled, the wrongdoer will be responsible for any further harm, even if it is out of the
wrongdoer’s control
All three actions protect a person who possesses the property when the wrong occurred.65
Additionally, detinue and conversion protect a person with an immediate right to possession.
 Detinue (derived from an Old French word14 meaning “to detain”) provides a remedy where a person wrongfully refuses a
request to return property.
o Refusing to return rented property is not detinue
o Only detinue allows the court to order the return of property
o England abolished it in 1977 (Canada still has it)
1. Who may sue?
A person entitled to the possession of the property (not
necessarily the owner of the goods).
2. Who is liable?
A person with possession of goods who refuses without
qualification a request to return them to the person
entitled to possession.
3. What is the wrong? Interference with possession (not damage to the goods, or
interference with ownership).
4. What is the remedy? What is the remedy? An order for the return of the goods,
or an award of damages

Trespass to chattels is analogous to trespass to land. It provides a remedy where a person wrongfully takes or damages
another’s property.
o The action is available only to the possessor. An owner who has given possession to someone else may not recover
damages for the trespass
CML PROP - 75
o If the property is recovered, damages compensate for the loss caused by the trespass.
o Trespass requires a direct interference with the goods (although there is no requirement that
o The trespasser come into contact with the goods). Indirect interference is not trespass.
1. Who may sue?
A person in possession of the property (not necessarily the owner of the goods).
2. Who is liable?
A person who wrongfully damages or interferes with goods in the possession of another.
3. What is the wrong? Interference with possession or causing damage to the goods (but not interference with
ownership).
4. What is the remedy? At common law, the wrongdoer had to pay damages measured by the possessor’s loss.

Conversion (also known as “trover”)15 deals with more serious kinds of interference with property, although it overlaps the
other two actions. Conversion provides a remedy where property is destroyed, or wrongfully “converted,” to the use of
another.
o Trespass to chattels and detinue, however, deal with possessory rights. Conversion is concerned with a general notion
of ownership - or dominion - over the goods
o Dependent upon the seriousness of damage (overlaps with trespass and detinue)
o FLEMMING “the action in effect forces an involuntary purchase on the converter”
o Conversion developed later than both detinue and trespass to chattels. Eventually, it almost entirely replaced the need
for either of the earlier actions. In only a very few situations does trespass to chattels or detinue provide a remedy
where conversion does not.
o Conversion protects tangible personal property,45 including documents evidencing rights, such as documents of title,
negotiable instruments, guarantees, insurance policies and bonds. DOES NOT PROTECT MONEY
 Fixtures, trees, crops and minerals are regarded as part of the land. Severing them from the land is not
conversion. Once severed, however, they are personal property. Any further interference with them is trespass
to chattels or conversion
o The rule of thumb is that damages are the value of the goods, calculated at the date of the conversion. The court may
also award damages for consequential loss, taking into account changes in value after conversion.
o The value of the goods is usually determined as either their market value or replacement cost.
o
1. Who may sue?
A person entitled to the possession of the property (not necessarily the owner of the goods)
2. Who is liable?
A person who wrongfully damages or interferes with goods in the possession of another
where the damage or interference is substantial.
3. What is the wrong? Interference with a person’s dominion over the goods.
4. What is the remedy? At common law, the wrongdoer was liable to pay damages measured as the value of the
CML PROP - 76
goods at the date of conversion. The law, however, acknowledges many exceptions to the
general principle.64
While these remedies overlap there are also gaps in the law between them, for example:
(a) A claimant without possession when property is damaged has no remedy under the three
torts if the damage is not substantial;68
(b) A person who keeps goods can be compelled to “buy” them, even in some cases where
the retention is for an innocent reason;
(c) A person deprived of goods for a short time through another’s negligence may have no cause of action.
(d) Different principles of damage assessment apply, depending on the tort involved.
Damages in trespass to chattels are measured as the extent of the loss suffered by the
person in possession. Damages in detinue are the value of the goods at the date of trial.
Damages in conversion are the value of the goods at the date of the conversion. Damage
awards in detinue or conversion may not correspond at all with the plaintiff’s actual
losses. Courts over the years, however, have qualified these positions so that results
achieved are very often similar.71
(f) Different standards of proof apply depending upon the tort involved. Detinue requires
a higher standard of identifying property than trespass to chattels or conversion. This
is because detinue is the only common law action that provides for the return of personal
property. Nineteenth century legislation, however, allows the court to grant that remedy
in any case.
F
I
D
Harrison v. Carswell (1976, SCC)
Carswell is picketing on a sidewalk outside of Harrison’s shopping mall. The sidewalk is private and owned by the mall. She
started picketing on a city sidewalk, but it was too far so she moved to the mall property. Harrison asked her to leave, but she
came back several times. Harrison charged Carswell under The Petty Trespasses Act of Manitoba for trespass despite the fact
that the strike itself was a legal action.
(1) Does the court have a role in balancing public rights and private property rights? [no, private property supreme, unless a
statue says otherwise]
(2) Does a shopping centre owner have sufficient possession of a private sidewalk so as to invoke a trespass statute against an
employee peacefully picketing her employer who is a tenant of the owner? [yes]
(3) Is the mall truly private property after it has been opened to all members of the public? [yes, dissent disagrees]
[Note: Only concerned with the possessor not the owner, b/c this is a trespass case. Thus it doesn’t matter who owns the mall]
CML PROP - 77
R
Dis
(1) The majority states that in general the common law always protects private property unless there is an applying statute that
takes away one's property rights. There is no such statute in this case, and thus the case must be found on the common law bill
of rights, which states that private property is the most important thing to be protected at common law.
(2) The mall has private possession rights. (Laskin dissent says Carswell did not interfere with the malls interest which
trespass was trying to protect. Yes there is trespass, but there is no damage)
(3) Majority uses Peters to justify their decision. Peters was a union members boycott in the mall (where no members were
employees). Whereas this case concerns an employment dispute; where the defendant was picketing her workplace (and
shopping centre was the middleman). Property rights are supreme, regardless if you were invited it (Laskin thinks the law
should take into account the public nature of a shopping mall.)
Comment: Prof thinks this is different from Peters since Carswell is exercising her legitimate labour rights. Laskin’s dissent
agrees
The common law protects private property rights unconditionally unless there is an overriding statute.
In the dissent Laskin CJ says that the common law must be updated to take new phenomena into consideration. There were no such things as shopping
centres like the ones today when the common law developed. These malls are essentially public places – the owners invite all members of the public
virtually without restriction. Therefore there must be a significant grievance to expel someone from the property, which he does not think happens here.
See: Private Property; trespass; statutory interpretation; revision
F
I
D
R
Intel Corp v. Hamidi (2003, US)
Intel Corp. (Plaintiff) brought suit against Hamidi (Defendant), claiming that by communicating with Plaintiff’s employees on
Plaintiff’s email system, Defendant committed the tort of trespass to chattels.
May Plaintiff maintain an action for trespass to property if Defendant sends an unauthorized electronic
communication over Plaintiff’s electronic mail system, which neither damages the recipient computer
system nor impairs its functioning?
Attempt to resurrect Trespass of Chattels cause of action
Court did not accept the harms put forward by plaintiff: i.e employees wasting time; or being forced to take precautions against
the harm
In this case the court refused to hold that the objectionable e-mail messages distributed to a company’s employees constituted a
trespass. An action for trespass to chattels will not lie if there are is no damage to the chattels. Here, the e-mails were only a
momentary disturbance to the employees.
Consider which object is being acted on…….
Dis
See: Personal Property
CML PROP - 78
Shewish v. MacMillan Bloedel Ltd (from Law commission of BC wrongful interference)
F
The defendant logged native lands.
I
The court held, confirming earlier English and Canadian authority, that the issue turned upon whether the wrongdoer acted
innocently
D
A person who knowingly deals with someone else’s property must account for the full value of the goods, less the cost of
bringing the property to market. Where the person acts innocently, however, a “mild” rule for damage assessment applies.
Damages will be adjusted by deducting not only the cost of transporting the property to market, but also other expenses incurred
in extracting, severing, harvesting or manufacturing the property. An allowance is also made for a person who acts negligently.
The reason is the same in each case: the owner could not have profited from the sale without incurring the costs
R
The owner of converted goods is returned the full value (not necessarily profit from sale or extraction)
See: Remedies, Wrongful interference, conversion, damages assessment