Summary
Property Law
Winter 2009
Joanna Nefs
Definition of Property, Chapter 1
Overview:
Property is the relationship among people in respect of objects. Specifically it comprises of bundles of mutual
rights and obligations between subject, object, and other people. The rights of property are the ability to
exclude others, the ability to dispose of, and the ability to use and enjoy. Actions not interfering with these
rights are not actionable (Victoria Park).
The range of subjects and objects has changed over time, and continues to evolve. For example humans are no
longer considered objects of property, but ideas are starting to be considered objects of property. Objects of
property can be categorized into 4 groups: Personal Property (moveable prop, chattel),Real Property
(immoveable prop i.e. Land), Intangible Property (e.g. idea), Tangible Property (e.g. a book)
Comentary:
In the Western Conception of Property the 1st owner of land is the Crown. In this system others can have an
interests or rights, which are equated with ownership (i.e use, dispose, exclude), in the property but the
Crown always has absolute ownership over land. This way the Crown retains absolute control over the land
and has the power to impose obligations (eg. Building, permits…etc). and the capacity to expropriate (i.e. take
it away).
In Aboriginal Conceptions of Property the land is owned by the creator and people have community rights in
the land and no individual rights in the land. Rights derived from the creator. The community rights in the land
are the right to use, but it doesn’t consist of the right to exclude others/alienate or dispose of. (Lee Roy Case)
Concepts of Common Property:
Garret Harden and the Tragedy of the commons, From the perspective of each individual using the commons, it
is advantageous to add one more cow to the commons. The benefit to the farmer is +1, and the detriment
to the commons is -1, but the detriment to the farmer sharing the commons with 6 others is (-1/6).
Eventually the commons will be destroyed.
Carole Rose’s Thesis (Contradicts Harden’s), If property is legal wealth why not create common property (e.g.
highways, parks) and confer on all property rights. When you have common property rights the capacity to
increase wealth is almost infinite (you invest in infrastructure, you build a better community, increase
economic efficiency). Good to keep common rights in property, common property has the power to enhance
sociability.
Frame-shifting is an important part of legal reasoning. It highlights that judging is a human process and as
such different perspective/frames are used which result in different findings and conclusions. Frames that are
used include narrow v. broad, logical v. relational and personal v. institutional. For example, Narrow: in the VP
case the majority saw land as land (and thus Taylor didn’t infringe on the land directly) Broad: while the dissent
saw an infringement on the land when things interfere with the use of the land. (and thus found Taylor
interfering with the property/land)
Classifications Of Property:
Summary
Property Law
Winter 2009
Joanna Nefs
P roperty
R eal Propert y
In R em
to rec ov er the thi ng
C orporeal Heredim ents
ex. pos s es s i on, land
P ers onal P roperty
A CT I ON S
Inc orporeal H eredim ents
ex. a ri ght of way
In P ers on
to rec ov er money
R eal Chat tel s
ex. l eas es
C hatt els Pers onal
C hos es i n P os es s ion
(t angibl e)
C hos es i n A c ti on
int angibl e
ex. s t oc ks
Cases:
Victoria Park Racing and Recreation Grounds Co. Ltd. v. Taylor (Australian case 1973), pg. 6.
(explores the oute limits of proptery, is speciticle property?)
Facts: P is a racing track which charges admissions to Nuisance is Defined: “unreasonable and significant
people who place bets on the races. Taylor (D) is a interference with the use and enjoyment of the
neighbour of V.P. and built a platform on his land to property” and is judged by an objective test
view the races/odds and broadcasted this info to considering the impact on the complainant and
other people who then called and placed bets (off- the reasonable perspective of the defendant.
track betting). Essentially D gets the profit at the Common property, for those that can see and
expense of P. D’s broadcasts were systematic and report the spectacle from their own land, the
would go on indefinitely unless stopped.
spectacle has become common property. A
Issues: Does V.P. have a successful claim against Taylor? ‘Spectacle’ is not private property
The V.P. tries to win using four different arguments. Instiutional Capacity, the court says that the the
But we focus on the 1st two arguments Holding: For D. legislature and not the court should make new
Reasoning:
law. Issue of retroactive law, and uncertainty
1) Spectacle P argued: spectacle is property, the
issues.
value of the object to the creator, should be a
factor in whether or not a thing should be recognized as property. The amount of effort should be a
factor. Majority Says: There is no precedent, spectacle is not property. Minority Says: underlying principles
can support this position.
2) Nuisance, P argued: D is being a nuisance, there is an unreasonable and significant interference with the
use and enjoyment of P’s property. Majority Says: No nuisance, act of looking over does not interfere.
Court should not expand the categories of nuisance. Minority Says:
3) Privacy, Court found that there was no right to privacy (but later a right to privacy was established, today
the answer might be different)
4) Non-Natural Use of Property, P argues: from the case of Rylands v. Fletcher, (see below) non-natural use
was broadcasting, escape is broadcasting, damage. Court says: building a platform is a natural use of the
property.
Policy Considerations: is property the right instrument to achieve what you want to achieve. There may be
better ways to accomplish your objectives.
Summary
Property Law
Winter 2009
Joanna Nefs
Rylands v Fletcher (Non-Natural use of Land Case Refered to in Victoria Park).
Non Natrual Use Defined: Has 3 parts:
1) Non-natural use (storing garbage is non-natral, building a platform is natural Victoria Park).
2) Escape, the non-natural use, or a consequence of it must effect adjoining land (flood of water)
3) Damage, to the adjoining property.
Possession, Finders
Overview:
There are several different types of ‘possession’, it can be:
 Actual possession - possession that you enjoy, i.e: when in your home; holding your book
 Constructive possession - Where the titleholder of the property doesn’t possess it, b/c a 2nd party is in
actual possession of the property; here, the tile holder (owner) is in constructive possession of the
property. (e.g. Osgoode has actual possession of the land they are on even though they don’t own it &
York has constructive possession of this land, as they are the tile holders)
 Right to possession – relates to future interests, dealt with in week (5) below
 Pedal possession - You possess the item b/c you are standing on it (used to describe actual possession of
land).
Adverse possession is recognized by the Limitations Act. It allows people to obtain property without
purchasing it. According to the Act, a title owner must bring the action within 10 years of the adverse
possession or else the occupier’s interest in the land becomes a superior possessory interest.
Justification: Historically there were 3 main justifications for the statute of limitations.
1) To punish the owner for neglect,
2) To reward the use of land and facilitate development and
3) To give legal effect to legitimate expectations and actions of those involved. Policy, (this argument
makes sense in an land regulation system where the description of lands was not very good. But today
there are surveys that allow us to know precisely what land you are entitled to (the title becomes more
certain).
The statute of limitations is not concerned with the possessor’s intention, the courts introduced that idea later
on. Intention is discussed in week (3) below.
Adverse possession Ethics presentation,
There is a disconnect between the words of the statute and the way the courts deal with it. The courts have
effectively re-written the statute. The courts’ interpretation is so disconnected from the statute that it
litigation is fuelled by it.
Commentary:
Carol Rose “Possession as the Origins Of Property” (p.92)
Rose gives us different ways to theorize how things become to be owned
1. Locke’s Theory of Added Labor: When you add labor to something you acquire property rights to it. But
there is a criticism to this b/c this isn’t always the case b/c someone can add a glass of tomato juice to the
Summary
2.
3.
Property Law
Winter 2009
Joanna Nefs
sea and it doesn’t mean that you own the sea. So what is the scope of property? Therefore, the
assumption of labour is not appropriate; or;
Contract Argument: The original owner got title through the consent from the rest of humanity.
Possessoary argument: This is our common law approach. If you possess the thing you acquire property
rights to it.
Epstein: Possessory Interests and Common Law Decision Making
 Concept of first possession is justified because it has been the “organizing principle of most social
institutions, and the heavy burden of persuasion lies upon those who wish to displace it.
 In dealing with the rule of 1st possession, it is important to keep in mind the institutional features that bind
all common law
1. Remedies available are simple; so the questions must be as well. Common law judges only have at
their disposal limited remedies to apply to redress a violation of substantive rights. The rule that
possession is at the root of title is one that a court can understand and apply; absent a better
alternative it becomes an attractive starting point for resolving disputes over ownership
2. courts have no control over who participates in the process
3. the common law court cannot order the docket of cases it hears; there is no guarantee that the
question of how ppl obtain rights against the world will be 1st on the judicial agenda. The intellectual
process forces common law courts to commit themselves on a succession of little points, which in
turn denies them the freedom to switch ground when the large issues are formally presented for
adjudication.
Cases:
Pierson v. Post – clear act of possession
Facts: A hunter on abandoned land chased down a fox.
To show possession there must be a clear act that
He had a good shot at a fox he was chasing when
brings the property within ‘certain control’ and that
someone else shot it first and ran away with it.
shows the unequivocal intention to possess; the
Analysis:
clear act is needed so that the whole world
The majority: discuss the practice of fox-hunting and understands the nature of the possessor’s rights
what is common to sport. It emphasizes the need
for certainty which protects reliance and fairness.
The Dissent: says that property is obtained when it is within reach and when there is a reasonable prospect of
successfully gaining possession of it. They want to reward useful labour, (policy), not the “Suacy intruder”
Rose’s criticism of Post:
 This outcome doesn’t reward those who put labour in or do productive activities. It doesn’t give a
reward for useful labour (i.e. hunting the fox and chasing it for an hour wasn’t rewarded)
 However, court said that in general common law of first possession does reward useful labour. The
useful labor is the act of expressing intention and controlling the property
 The above criteria made the aboriginals difficult to claim “possession” – use, communal, and
temporary; therefore, no domination of property
Insightful Things re. Post
Summary
Property Law
Winter 2009
Joanna Nefs
 On closer examination, the 2 positions do not seem far apart, Although the majority decided in favour of a
clear rule, it tacitly conceded the values of rewarding useful labour. Its rule for possession would in fact
reward the original hunters most of time unless tons of interlopers.
 On other hand, the dissent also wanted some definiteness in the rule of possession. He was simply
insisting that the acts that sufficed to give notice should be prescribed by the relevant community, namely
hunters or sportspeople
 Pierson illustrates the prob that occurs when a clear sign (killing the fox) comes only relatively late in the
game, after the relevant parties have already expended overlapping efforts and embroidered themselves
in a dispute
 Pierson v. Post suggests that in order for there to be possession there must be an element of physical
control and intent to control.
Finders of Lost Objects and First Possession (pp. 106-124)
The claim will be between the finder and the property’s occupant, can the occupant establish possession
immediately prior to the finding. Must establish control (comes from the control of the things that you already
own, the house, and my ), dominion over, and intent to control.


Prior possession still serves as the principle mode of proving title for personal possession
but also rule in Armorie
Policy: Why Confer Rights on Finders
1. Rewards someone who brought an item back into social use
2. Can facilitate the return of the goods to the rightful owner b/c finder assumes a responsibility to take
reasonable steps to return the item (motivate them to not just pocket it, if they know the owner of the
property would just keep it – encourages them to turn it in)
3. Would be problematic not to confer title b/c then not a crime to take from a finder- would encourage a free
for all
4. , A finder in position inferior to True Owner but superior to those arising after  timing is central
Cases:
Armory v Delamirie (1722)
Facts: Boy found jewel (chimney sweeper) and took it to D’s shop (goldsmith) to find out what it was worth. D.
refused to return the jewel.
Ratio: Principle: finders keepers, finder prevails against the world except the owner.
Notes: i) The remedy of ‘trover’, means recovering for the value of the property taken. Now called conversion,
is good when property is destroyed. ii) The owner of the house could not have brought a claim for the jewel,
they had no control, no knowledge.
Parker v. British Airways Board (1982)
Facts: P finds bracelet in boarding lounge, no true owner. P gives bracelet to airline official, stated that he was
not relinquishing possessorary interes, wants it back if they don’t find the true owner. Alirline sells it and keeps
the cash.
Issues: P. didn’t have a ‘right’ to be in the lounge, he was granted permission. There were no signs in the
lounge indicating that D. had intent to control found items. D. was the occupier not the owner of the premises.
Summary
Property Law
Winter 2009
Joanna Nefs
Analysis:
Parker’s claim: finders keepers, Armort v Delamirie. P left the money in bailment, (bailment is when ownership
and possession is separate, ex. lending your laptop to your friend).
Airline’s Claim:
Attempt to show that they had rights to the bracelet immediately prior to it’s discovery by Parker. Occupier of
the land has rights over all lost chattels which are on the land, whether or not the occupier knows of their
existence.
Ratio: (uses Bridges).
1. Where person has possession w/ manifest intention to exercise control over it and things which may
be upon or in it, if something found, presumption is that occupier owns it
2. Qualification: intention of control must be manifest; mere right to exercise such control is not enough,
cannot overrule B v. H ie: MUST have sign or something, can’t just say “we could have had a sign up”
The Finder is not always 1st possessor, must look to situation before chattel found
Insightful notes Re. Parker
 Re. Tresspassers, the occupier of the land has a better claim to possession than tresspasers for policy
reasons, wrongdoers should not benefit from their wrong.
Bridges v. Hawkesworth
Facts: P found a small parcel with $ in it; gave it to shop owner and asked him to keep until true owner claimed
them. 3 yrs later P asked D for the $ back and offered to pay him for the expenses he incurred to find true
owner.
Issue: Occupier v. Finder
Ratio: There was no manifest intention to exercise control before the notes were found, Occupier has no
rights to the notes.
Arguments that are favourable to the Finder: Rights and Obligations of the Finder
1. Finder is merely a bailee once they find the object; thus they have an obligation to return the found
object to the T.O
2. Finder acquires no rights unless it has been a) abandoned/lost; b) finder takes it into care and control
(must be more than being aware of its presence) Parker only deals with cases where the object has
been abandoned/lost
3. Will acquire limited rights if takes chattel with wrongdoing
4. Subject to pt. 4, finder prevails all but true owner, agent of true owner, or one who can assert prior
right before finder found chattel—Armory v. Delamirie
5. Unless agreed otherwise, agent who finds chattel in course of employment take it into his care and
control on behalf of his employer
6. Finder has an obligation to find the true owner
Arguments that are favourable to the Occupier: Rights and Liabilities of an Occupier/owner
1. Occupier has superior rts. if chattel found is attached to the property, whether or not occupier is aware
of its presence: owner would have a better claim in a case where the object is attached to the property;
occupier will have a better claim if the object is found on the property…
2. Occupier has superior rts. over chattels not attached to property if there is a manifest intention to
control over the property and things upon/in it
Summary
Property Law
Winter 2009
Joanna Nefs
3. Occupier who manifests an intention to control over a building and the things upon/on it so as to
acquire rights superior to the finder is under obligation to find TO; manifestation of intention may be
express or implied from the circumstances (ie. may be obliged by law)
4. An occupier of a chattel, ie. Car/airplane, is to be treated as if he were the occupier of a building for the
purposes of the foregoing rules
Policy Considerations: the principle that things attached to the land go to the owner/occupier, you could argue
that this is without reason, (someone steps on the ring pushing it into the ground so the owner gets it, no
one steps on the ring, the finder gets it). Illusory distinction.
REVIEW: POSSESSION, FINDERS AND OCCUPIERS (Checklist)
1. Was the object found in an abandoned place or not? (Pierson)
2. Was there an intruder who came after some work had been done? (Pierson)
3. Was there a clear act that showed intent to possess? (Pierson)
4. What is the position of the parties? Occupier, employee, finder, etc
-The finder has a better title than all but the true owner (Armory)
-the finder has a right against all but true owner OR one who can assert a prior right to keep object
existing at time finder took possession (Parker)
-one who has never occupied premises has no claim on object (Hannah)
-the employer has a better title than a finder or an occupier (Sharman)
5. Was the finder an honest finder or trespasser? Did he discharge his duties? (Parker)
6. Was there a statute that has rules about this particular finding? (Canada Shipping Act)
7. Was the object attached or unattached? (Bridges, Parker)
8. Did the occupier manifest a clear intent to have custody and control? (Parker)
9. Was there a contract that said who should get the finding? (Appleyard)
RULES OF POSSESSION - quick snapshot
1) need a clear act that brings the object within certain control and clear intent to possess Pierson)
2) the finder has a better title to object against all except true owner: finder’s keepers rule (Armory v.
Delamirie)
3) honest finder acquires the right to keep object against all but true owner or one who can assert a prior
right to keep the object existing at the time when finder took possession (Parker)
-in obiter: if finder is a trespasser, the occupier rule is preferred
4) where an unattached object (pro-finder)
o
occupier needs knowledge of object and clear intent to possess before object is found
(Bridges)
o
clear intent to possess and custody and control over the premises and anything in or on it
(Parker)
o
owner who has never occupied the premises has no claim to the object (Hannah)
5) Where an attached object (pro-occupier):
‘the possession of land carries with it in general, by our law, possession of everything which is attached to
or under that land, and, in the absence of a better title elsewhere, the right to possess it also. And it makes
no difference that the possessor is not aware of the thing’s existence’ (Pollock, pg 41)
o
Occupier has a better claim to title (obiter in parker)
o
Finder has to chow clear intent to possess and exercise custody and control (obiter in Parker)
Summary
Property Law
Winter 2009
Joanna Nefs
***attached means buried or hidden, not loose or lying in an obvious manner
6) In employee/er context, employer owns found object whether attached or unattached (South
Staffordshire)
7) If there is a contract over who owns what when (e.g.a potential find), contract prevails (City of London
v. Appleyard)
RULES FOR A FINDER AND RULES FOR AN OCCUPIER (from Parker)
Rules and Obligations of Finder (Parker)
1) the finder of a chattel has no rights over it unless it has been abandoned or lost and he takes it into his
care and control
2) the finder of a chattel acquires very limited rights over it if he takes it into his care and control with
dishonest intent or as a trespasser
3) a finder of a chattel while not acquiring any absolute property or ownership acquires aright to keep it
against all but the true owner or those who are in a position to claim through the true owner or one
who can assert a prior right to keep the chattel
4) any servant or agent who finds a chattel in the course of his employment and who takes it into his care
and control does so on behalf of his employer or principal who acquires a finder’s rights to the
exclusion of those of the actual finder
5) a person having a finder’s rights has an obligation to take such measures as in all the circumstances are
reasonable to tell the true owner about the finding and to care for the chattel in the meantime
Rules and Liabilities of an Occupier (Parker)
1) an occupier of land has rights that are superior to those of a finder over chattels in or attached to that
land and an occupier of a building has similar rights in respect of chattels attached to that building,
whether in either case the occupier is aware of the presence of the chattel
2) an occupier has rights superior to a finder over chattels that are in but not attached to the building but
only if, before the chattel is found, he has shown an intention to exercise control over the building and
the things which may be upon it
3) an occupier who shows an intention to exercise control over a building and things which may be in it so
as to acquire rights greater than a finder’s is under an obligation to take all measures that are
reasonable to ensure that lost chattels are found and to tell the true owner about the findings whether
made by him or another person ***the manifestation of intention may be express or implied from the
circumstances, including the circumstance that the occupier manifestly accepts or is obliged by law to
accept liability for chattels lost upon his premises e.g innkeeper liability
4) an occupier of a chattel (ship, car, etc) is to be treated as if he were the occupier of a building
January 29:
Possession in relation to land (pp. 142-150)
It is important to note that adverse possession can’t be concealed, it has to be open.
Beneficiary of will: devisee
Devisor: The person who makes the will.
Intestate: when you die without a will, any interest goes to your legal heir.\
Fee Simple:
Summary
Property Law
Winter 2009
Joanna Nefs
Perry v. Clissold, (UK, 1907) p 143 , DEFINITION OF POSSESSION
Facts: Clissold was in adverse possession for 10 years, when the government expropriated the land. He paid
taxes on the land, fenced it in and leased it to someone.
Reasoning: “A person in possession of land in the assumed character of an owner and exercising peaceably
the ordinary rights of ownership has a perfectly good title against all the world but the rightful owner” –
Clissold had possessory title; he regularly paid taxes/rates and used land. If owner doesn’t come forward in
time, his right is forever extinguished and possessor acquires an absolute title. Clissold is entitled to
compensation for the expropriation.
Asher v Whitlock (UK, 1865) p 143, Rights re. Land pass to heir.
Facts: Williams, fences in and occupies property for 15years. He had no orginal title, but has possessorary
rights. Leaves property to his wife until she remarries and then to daughter. Wife remarries, wife and daughter
both die. New husband wants the land. P is the heir of the daughter’s estate (intestate). New Husband D. is
the adverse possessor.
Issue: Who has the better claim?
Analysis: Possession is good title against all but the true owner (title holder). P traces an unbroken chain of
‘first possession’ from himself back to Williams (the adverse possession of D hadn’t lasted long enough to get
rid of that line of possession, D’s possession is a new adverse possession, P has claim to an older adverse
possession). All the rights of the daughter with respect to the land have passed to the daughter’s heir. Since,
after 10 years Williams was the true owner, he had the right to eject people. That right passed to his daughter,
and then to Asher.
Insightful Notes Re. Asher
 The principle that periods of possession by different persons on succession may now be added together to
create a “chain” of possessory title, an important basis for creating a statutory limitation period (daughter
tacked her possession to mother and to fathers which gave her 14yrs. D only there from 61-64 and couldn’t
tack possession)
Remedy of Self-Help:
 Example of a time that self help would be appropriate: The true owner doesn’t know they own the land;
didn’t know until a survey was conducted but by then other parties already had possession of the land.
 They proceeded by using self-help; anything that goes beyond the line of appropriate for the circumstances
may turn out to be assault. (basically a nice way to say they kicked you off).
 Using ejectment a la Home Depot—homeless people ejected b/c of fear of liability
 Self help tends to be an effective devise b/c a judicial action will literally take years before a decision is
reached.
Historical Development of Principles of Possession and Seisin
 Possession is good title against all but the true owner or someone claiming prior possession
 “seisin” in early land lawfrom about the 15th century, described the special nature of the possessory
entitlement of an “owner” to land or real property.
 Not all persons in “possession” of land had seisin, the easiest example being the leaseholder or tenant
who (according to historical principles) had possession but not seisin. Entitlement to seisin was
Summary
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important in a context where procedural rights to recover land after being dispossessed depended on
whether or not a claimant could show seisin prior to dispossession.
Livery of seisin: passing on of the land to another individual; passing on of a twig or sand from land with
witnesses (young children) who would then testify if a dispute ever occurred
Common law tends to favour factual evidence by the community of entitlement rather than a so called
privilege or right to possession…
Possession and aboriginal title to land (pp. 150-156)
McNeil, Common Law and Aboriginal Title
In English law title arises from occupation of land. Factual occupation  possession  seised land 
fee simple estate. Possession not wrongful is presumed to be rightful. An occupier of land is therefore
presumed to have not only a fee simple estate, but a valid title as well. Re. Aboriginal possession, Difficult to
establish possessory records because their history is not written but oral; but the aboriginals had wars among
themselves for land so that could be a way of establishing some kind of demarcation of the land.
McNeil is trying to make an argument based on possession in relation to Aboriginal peoples in Canada. When
Europeans came to North America, Natives were already in possession, but wasn't recognized.
1. Indigenous people not in a position to make a claim based on English law since they weren't in a
position to understand English common law
a. The whole notion of property in land/possession in land is not part of the Native American
worldview
b. The Acts that they might have done to establish possession were inconsistent with nomadic
lifestyle
2. Ethnocentric view - The proposition that in English law indigenous people of North America/Australia
had the same rights to lands occupied by them as fee simple tenants with valid titles had to their
cottages and gardens in England was probably beyond contemplation
3. Not in interest of colonizers to formulate arguments that would tend to make acquisition of lands
costlier and more difficult

If it can be shown that the reception of English law had the effect of establishing aboriginal land rights,
those who have relied on that law to deny the existence of such rights would undermine its legitimacy and
authority were they to turn around and contend that it does not apply.
Sui generis: (a league of its own) a unique interest which is neither beneficial nor personal and usufructory in
nature. The Crown has a fiduciary obligation to deal with lands for the Indians’ benefit.
Where occupied lands which were neither purchased by treaty (nor otherwise) nor confiscated by valid
legislation are involved, this could mean that any taking of those lands from the Indian occupiers would have
been unlawful. Thus, by English law a right to fee simple estates did vest in indigenous occupiers, then
(statutory bars aside) no one can contend that it is too late to declare the law, and enforce the right. However,
statutes of limitations – protects the present-day holders of land. But public lands or lands that have never
been developed may still be in question.
Summary
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Joanna Nefs
If so, what is at stake is not so much lands which have already passed into private hands, as lands which
have been regarded as part of the public domain, but which in many areas have never been developed and
are often still occupied by Indians.
Summary
Property Law
Winter 2009
Joanna Nefs
Week 4
February 19
Chapter 3 – The Docterine of Tenure and the Fundamental principles governing interests in land
According to the common law, individuals and corporations may “hold interests” in land of the Crown; there is
no outright ownership (a.ka. “allodial” rights). This result flows from the doctrine of tenure (the French word
“tenir” means “to hold”). Each land owner “owned” not the land, but a slice of land in time. Essentially this
chapter is about the how these doctrines divide interest in land. The doctrine of estates defines the “quantity”
or “duration” of an interest in land. Certainty comes from replicating the past. Those in power want to
preserve the conditions that got them there.
In feudal times tenure was a series of relationships between the crown and those that hold the land of the
crown, (Lords, serfs, etc.) with each new relationship a series of new relationships were created. These
relationships were called tenure. With the doctrine of subinfudations (see below) and the statute of Qua
Emptores (see below),These relationships came to an end through the Tenures Abolition Act of 1660.
Seisin and Alienation: The person ‘seised of the land’ Today the only remaining tenure is “free and
was the person against whom feudal services could
common socage;” the only remaining “incident”
be enforced so it was important to know who was
of tenure is “escheat”. Now there is only the
‘seised of the land’ at all times. This played a crucial
crown and an estate, the obligations that existed
role in the evolution of interests in real property.
have virtually disappeared, but you could say that
You couldn’t alienate your land (and the duties that
the crown’s control over environmental standards
came with it), you had to give it (and duties) to
could be analogized to the old interest of the
someone else (Substitution) or you had to become a crown to control land.
landlord and get duties from others, to pay your
duties, (Subinfeudation) Prior to 1540 you had no capacity to determine where the land went after death, it
HAD to go to your legal heir.
Statute Qua Emptores of 1290 Did two things:
(1) It confirmed the right to alienate any interest in land without the consent of the lord (toward free
alienation)
(2) It provided that all alienation of land was to be done by substitution only, and prohibited any further
subinfeudation of the land.
Consequences: because no new tenures could be created when land escheated back to the lord the lord could
not subinfeudate the land to another tenant. The lord could only alienate the land by substitution, which
meant that the tenant held the land on the same terms as the lord – not of the lord. Holding the land on the
same terms as the lord, started to mean that most ppl started to hold land “of the Crown.”
Various traties and acts have led to the adoption of the British law in Canada. Some prominent documents in
that group were; the Imperial Constitution Act of 1791, and the Property and Civil Rights Act of 1792.
Tenure and Aboriginal Title Aboriginal title arises as a matter of law, there was pre-existing occupation and use
of the land. Aboriginal title pre-dates the crown’s interest. The courts have struggled with trying to give effect
to this interest. It arises out of operation of law out of a factual situation. Now what does it mean? The people
who have this interest have, a right to self government? On the other hand it could mean a mere right to use
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for limited purposes. A mere burden on the crown’s paramount title. That can be trumped by the crown
revoking title. Aboriginal title doesn’t fit the Anglo Canadian context. Ownership was a limited concept. It was
held by the creator, and used by the community.
Ways of Dividing Estates
Feudal relationships
The King owns rights to all
land in England, regulation
required duties, back and
forth from different levels
of tenants.
Property law was greatly
influenced by the struggle
between landholders
trying to enforce
obligations and others
trying to evade them.
Time
You could have a life
estate, a fee simple
estate (virtually
indefinite but subject
to doctrine of
escheats)
Or divide into
present interest
barring some event,
then passes to
someone else
Title – Use
Divide
I own the
property
and I lease
it to you
(confers
exclusive
possession)
or a license
(right to
use)
Legal / Equitable
Co-Ownership
the person who
holds the mortgage
has the legal
interest, the “home
owner” has the
equitable title.
Joint tenants: If one
of the joint tenants
outlives the other
then the survivor
gets all of the
property
Or in trusts the
trustee has the
legal title and the
kids (beneficiaries)
have equitable title.
Tenancy in common:
I leave my interest to
whoever I want, or
my heirs if I don’t
have a will.
Free hold estates, Life estates, fee simple estates and fee tail
Lease hold estates are of a Certain duration. (For example 99 years). Free hold estates are of non-specific
duration.
There are 3 types of Free hold estates:
1. The life estate, (the duration of a life, not necessarily his own life, could grant a life estate for the length of
Bob’s life.)
2. The fee simple estate, ongoing unless the guys dies intestate without a legal heir (escheats)
3. Fee Tail which we don’t worry about as they are almost all gone, (had to have been created before 1956)
The Life Estate is a grant by a device (like a will) or a grant “inter vivos” (created between living people), that
transfers land from the grantor to the tenant for life. (The word tenant here has nothing to do with leases
here). Reversionary Life estates, meaning that the grantor retains the fee simple, and after the life of the
tenant the estate reverts back to the grantor (or heirs). This is the standard.
Remainder Life estates, meaning that the grantor grants the fee simple to another party, and after the life of
the tenant the fee simple estate passes to them.
The doctrine of waste is: common law obligations not to destroy the property so that there is something left
for whoever is going to get it after. We aren’t there yet, we’ll talk about it later, it has been codified in
legislation.
Regarding Wills: Before 1540 you had no capacity to determine where the land went after death, it HAD to go
to your legal heir. Now you can have inter vivos conveyances. The court assumes that the testator’s intention
is to pass all of the property that she has to the heir unless a contrary intention appeared in the will.
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Fee Simple Estate. It used to be that in order to create a fee simple estate the words “and his heirs” had to be
used, but now the law assumes fee simple unless otherwise stated (Succession Law reform Act s.26). Fee
simple estates can be divided into 2 kinds:
1. Fee simple absolute: means that the estate ends only if no heirs exist, (or in the case of a life estate the
life of the tenant ends). Bob gets everything, this is the default, no qualifications.
2. Qualified Fee simples means that certain events must/must not come to pass in order for Bob to
get/keep the estate. Qualified Fee simple the estate can be divided into 2 kinds:
a. fee simple “subject to a condition subsequent” (FS,SCS)
b. fee simple “determinable” (FS,D)
FS,SCS
FS,D
Language
On condition that,
Provided that, But if
Theory
The condition is
‘added’ to the
Grant
As long as, while,
during, until
The grant
depends on the
event
Consequences
If the event occurs the Grantor has the “right of
reentry”, this is optional on the part of the Grantor,
not automatic. A void condition will cause the clause
to fail.
The event automatically determines the state of the
grant, called “possibility of reverter”. A void
condition will cause the entire grant to fail.
Void Conditions
Void for remoteness There has to be some limit on the qualifications, social ideas change, So the court said
that you can’t reach out any further than 21 years (its more complicated but this is a fine number for this class).
If there is any likelihood that the even could not occur within 21 years then the condition fails. The rule against
perpetuities limits the period to at the latest 21 years after the death of last identifiable individual living at the
time the interest was created. (applies to Right of Reentry but not to possibility of reverter)
Void for policy considerations Conditions that are prohibited by the government as being contrary to public
policy. For example saying that the land can’t be sold to certain people (colour, race etc.).
Void, repugnant to the grant Conditions that are repugnant to the grant, for example: If you own land then
you have the right to alienate it. If I say I have granted you property but you can’t alienate it, that is repugnant.
You can list some restrictions on alienation, but they can’t go too far.
Void due to Uncertainty Uncertain conditions are void.
Interpretation
Re. Waters and Re. McColgan talk about principles for interpreting wills (devises) where the language
is unclear.
1. The court’s preference is to save the grant and to leave property as unencumbered as possible. So a court
is inclined to find that the clause was a SCS, sometimes called a ‘vesting interpretation’ they want to give
effect to the grant and leave it unencumbered.
2. If there is conceptual uncertainty (ex. “what does ‘being part of the Christian faith’ mean?) then the court
will say that it is too indeterminate and they strike the clause.
3. In the case where a FS Determinable condition is uncertain the court looks at the facts of the case in
applying the condition, to see if there is some practical application to the grant that has been met, (ex. I
put in the condition so that she would keep cats, she is keeping cats, so the effect is the same).
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Moore v. Royal Trust and Re McLean.
These 2 cases illustrate the difficulties in arriving to a conclusion and this is why language in each will is
important
Moore v. RT 1956: “I direct my trustees to permit my son and his wife as long as either of them shall occupy the
same to have the use and enjoyment of my property free of any duty and upkeep shall be paid by my estate”
SCC held that was created was a licence and not an interest or estate
Re McLean 1940: words of a gift in a will requiring trustees to hold property to allow the testator’s son to
occupy and enjoy for her life gave him a life estate to occupy property
The Rule in Shelley’s Case
Eg. #1: G grants to A for life, remainder to B and his heirs
Eg. #2: G grants to A for life, remainder to the heirs of A in fee simple
The Rule: In a grant of freehold to A, followed (whether or not immediately) by a remainder grant to the heirs
of A, the word “heirs” is a word of limitation, not a word of purchase.
Result: In Eg.#2, there is a grant to A in fee simple (a life estate and a remainder in fee simple are merged to an
immediate fee simple estate). The heirs of A receive nothing by this grant.
Rationale: Feudal concerns to ensure that A’s heir would have to pay relief to obtain an interest in the land at
the death of A, not obtain it by way of a present interest from G’s grant. Query: who “won” the benefits of this
interpretation: those higher or lower in the feudal pyramid?
Application: The Rule in Shelley’s Case is a rule of law; this means that it applies regardless of the intention of
the grantor or testator. But it does not apply to words such as “children” or named heirs. It is a “trap for the
unwary” in real property law.
Life Estates,
 Can be given with a SCS or a determinable. So mostly same as above.
 Look at the grantor and try to ascertain the grantor’s intention, did they intend to create a property
interest in favour of some substance or value. (Say Alice wants to rent it) or a license to occupy?
 Courts look at the financial capacity of Alice, the relationship between G and A etc.
Week 5
Common Law Principles: Present and future Interests stem from the idea that you need to have an orderly
transfer of interests: no abeyance of seisin.
Vested Interests vs. Contingent Interests: A vested interest is an interest in favour of a 3rd party who is: alive,
ascertained and must not be a Subject to a condition precedent. Future interests not meeting these criteria are
called contingent, not vested interests. There are 2 types of vested interests:
1) Vested in possession, means that the holder is entitled to possession
2) Vested in interest, means that the holder has full entitlement to the interest and may or may not
be entitled to possession. These can be transferred ‘inter vivos’ or by device.
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Common Law Remainder Rules
Historically There were 4 future interests in common law, Simple reversionary (after a life estate, reverts to G’s
heirs), right of reverter (After a fee simple or life estate determinable), Right of re-entry (in favour of the
grantor that follows the fee simple or life estate SCS), Vested remainder. The courts of law don’t want
contingent remainders. There are 4 legal remainder rules to prevent contingent remainders.
Rules re. Vested Remainder
1. No legal remainder after a fee simple.
2. No springing legal reminders (pg. 304) No remainders that would spring up in the future. (for ex., X
grants B/A to Y’s first born child, when Y has no kids). This would lead to an abeyance of seisin, no one
owns it until the kid is born.
3. Timely Vesting. (pg. 305) For ex., X grants B/A to Y for life fee simple until B turns 21 and then goes to B.
(The interest in favour of B must vest (the condition precedent (being 21)) must happen within the
supporting life estate, if B dies there could be a gap). This is also known as a prior particular estate.
4. No shifting Legal Remainders. This is a clause that in some sense pre-maturely cuts short the prior
particular estate. For ex., To A for life, on condition that alcohol not be served then remainder and then
to B in fee simple. (the shifting is away from A in favour of B, you are trying to cut short the life estate
of A for B). So the remainder at common law is void.
These rules meant that there were very few contingent remainders. (they all had to follow a life estate, rare).
Today if you advised your client to leave B/A fee simple (SCS) and if/then to B, it would be illegal so don’t do it.
Introduction to Trusts, Legal vs. Equitable Interests
“The essence of the trust is the idea that the formal or titular interest in some asset (eg the legal estate in fee
simple) is vested, in a nominal capacity, in one or more persons as trustee. The ... duty of [trustees] is to deflect
all beneficial enjoyment of the asset to the beneficiaries or cestuis que trust, who are together entitled to the
equitable interests (eg the equitable estate in fee simple.) It is, in short, the beneficiaries who benefit under a
trust.” K Gray and S Francis Gray, Land Law 4th ed (Oxford U Press, 2006) at 23-25. Some vestiges of the
distinction between legal and equitable rights still remains today.
The History of Trusts, Legal vs. Equitable Interests
Historically the distinction was based on the jurisdiction for 2 separate courts, the courts of law (under judges)
and the courts of equity (under the direction of the King’s chancellor). In relation to remainder, the rules of the
common law (above) were causing problems, people wanted to leave land to their heirs in ways that were not
permitted by the courts of law. The courts of equity made it possible to separate legal and equitable interests
in land through the
conveyance of uses.
Scrooge grants Bob in FS  “to the use of” Tiny
Tim
So Bob (is called the
Feoffee, the forerunner of
trustee) gets the legal FS, recognized by Common law. Bob is seised of the land. Tiny Tim gets an equitable FS,
giving Tiny Tim use and possession even though Tiny Tim was not siesed of the land. The Courts of Equity were
not burdened by the common law legal remainder laws (discussed above), they ignored them. Using the
words “to the use of” transfers the whole document to the jurisdiction of the courts of equity.
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But this left Tiny Tim vulnerable to Bob, in that Tiny Tim had no legal title to his land. In addition, the occupiers
of land (Tiny Tim) avoided the payment of feudal dues. To remedy this The Statute of Uses was passed, in 1535
(it remains a part of Ontario Law today). It reunited the legal and equitable title. So Tiny Tim has the Legal
AND Equitable, and Tiny Tim had to pay taxes to the King. This once again introduce the problem of gaps in
seisin. The remedy was that for the length of the gap the land would revert to the Grantor or her heirs, (or the
Crown in the case of escheats). The terminology in the text book is: “A resulting use in favour of G. subject to
de-feasence, in favour of the first child to reach 21 on the happening of that event”.
The exhaustion of Uses. There were times that the parties involved Wanted to have the legal and equitable
interests separate. In order to accomplish this you would have to use a ‘double use’ statement. For example:
Darla grants to Angel and his heirs // to the use of Drucilla and her heirs // to the use of Spike and his
heirs.
Here the statute of uses is exhausted on the first “to the use of” so that Angel has no interest, Dru has legal
fee simple and the equitable title is passed to Spike.
After this trust language emerges.
The Rule in the case of Prefoy and Rogers
Provides a rational for the last development (devision between legal and equitable interests) Pg. 315. The legal
remainder rules were not completely ousted by employing a use. Because there is an exception, there
remained one critical and knotty exception, the rule applied to contingent remainders, contained in a
conveyance to uses.
e.x G  A and Heirs to the Use of B for life and then  B’s first kid at 21, B has no children.
There is potential for a legal remainder to spring up in the future. The legal reminder rule still applies : if there
was a possibility that the future interest (the legal reminder executory interest) of it vesting within the
duration of the prior particular life estate then it must vest within the period and if it didn’t then it failed even if
you used the “for the use”. The reason he mentioned this is because if you do a double use then it avoids
Perfoy and Rogers. Or you could build a garanteed gap (one day after the life of B).. or you could do Double
Use and that is what (later in history) becomes a trust.
Clavering v. Ellison
Delgamuukw v. British Columbia
THE DOCTRINE OF ESTATES
AND FUTURE INTEREST
Estates fall into two broad categories:
Leasehold estates (estates of a certain duration). The best example is a lease for 2 years. But note that leases or
tenancies also include periodic tenancy (a tenancy that is established on the basis of the rent period, e.g., month to
month or year to year) and tenancies at will.
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Freehold estates (estates of uncertain duration)
-
Joanna Nefs
life estate
fee simple estate
fee tail estate (abolished in Ontario in 1956)
Future interests (or successive interests) can also be divided into two broad categories:
Reversions (future interests that “revert” back to the grantor); and
Remainders (future interests that “remain away” from the grantor in favour of a third party).
The simplest example of each are:
(1) X grants Blackacre to A for life A receives a life estate
X retains a simple reversion i.e., on A’s death, the estate reverts back to X
(2) X grants Blackacre to A for life, remainder to B in fee simple
A receives a life estate
B receives a fee simple remainder after A’s death
Note also the effect of the grant of a lease. It also creates a reversion or reversionary interest in the landlord. Here
is an example of that:
(3) X grants Blackacre to A for 20 years
A is a tenant with a leasehold estate (a tenancy for a term of 20 years)
X is the landlord who retains the reversion in the leased land and, at the expiration of the lease,
possession reverts to the grantor.
REVERSIONS
Let’s begin our discussion of future interests with reversionary interests. They are more complicated than suggested
in the simple example presented above. The easiest way to understand them is in chart form.
The Grant (or will*)
X grants Blackacre
X grants Blackacre
Present Estate
To A for life (life
estate)
To A in fee simple, on
condition that A
graduates from law
school, and if not, X
reserves a right of reentry
Fee simple subject to a
condition subsequent
Grantor’s Reversionary interest
(future estate) i.e. the estate that
reverts back to the grantor
Simple reversion in fee simple
Right of re-entry on condition
broken
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X grants Blackacre
(a qualified fee simple
estate)
To A in fee simple or
until A serves alcohol
on the property.
A determinable fee
simple (a qualified fee
simple estate)
Joanna Nefs
A possibility of reverter
*Wills or devises are a relatively “modern” method of transferring property interests. Wills were not possible until
the Statute of Wills was passed in 1540.
Note that life estates can be qualified in the same way as fee simple estates. The reversionary interests (the
future interests) that follow a life estate are the same as those that follow a fee simple, namely, a right of re-entry for
condition broken or a possibility of reverter.
The theory behind these two types of qualified estates is easy to explain but difficult to apply. Here is the
theory. Words such as “so long as,” “until,” during,” and “while” all suggest that the determining event (i.e. the
event that, if it occurs, “determines” or “automatically terminates the qualified estate) is an inherent or integral part
of the grant. On the other hand, words such as “on condition that,” “provided that,” “but if” suggest that the
condition (i.e. the determining event, if it occurs, may terminate the qualified estate) is a condition that is added to
the grant; one that is external to the grant. I say “may” terminate because the qualified estate will only terminate if
the grantor takes active steps to re-enter the property as a result of the broken condition. While the grantor’s reentry need not occur immediately, it must happen soon enough that a court cannot conclude that this reversionary
interest has been abandoned by the grantor.
Not all conditions or determining events are valid. Courts have found that the following are void. Those
that are:
(1) uncertain or vague
(2) inconsistent with the very essence of a fee simple or life estate (i.e. repugnant to the grant). For
example, a determining event or condition that unduly restricts the owner’s right to alienate (transfer) the
estate
(3) contrary to public policy
The impact of a void event or condition varies depending on whether the estate is subject to a condition
subsequent or is a determinable estate. In the former, if the condition fails (is void), it is struck off the estate,
leaving the recipient (grantee) with an unqualified estate. The reason for this result is that because the condition is
added to or “external” to the estate, once a court finds that it is void and is struck down, the estate is left unqualified
or unencumbered by the condition. With a determinable estate, the result is the opposite. If a court concludes that
the determining event is void, then the whole grant fails, leaving the recipient with nothing. The reason for this is
that because the event is integral to the grant, and hence an essential element of the grant, its failure means that the
whole grant fails.
The application of this theory to particular grants can be difficult. A good strategy for analyzing a grant is
the following:
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(1) Look first to the words – what type of qualified estate do they suggest or indicate?
(2) Next, are there any circumstances that either confirm or refute the result suggested or indicated by the
words? (In other words, try and interpret or make sense of the grantor’s intentions from other words in the
grant or the circumstances in which the grant or will was made). Thus, if the grant stated that the grantor
could re-enter onto the property if the condition was broken, it would be logical to conclude that the grantor
had created an estate subject to a condition subsequent.
(3) Finally, note the effect of a void condition or determining event. Courts generally try and “save the grant.”
Hence, if you conclude that the condition is void, the interpretation that will save the grant is an “estate
subject to a condition subsequent” (see above).
Note. Watch for a fee simple subject to a condition precedent. A void condition precedent will always defeat the
fee simple.
REMAINDERS
Remember, these are future interests created in favour of a third party. They are considerably more
complicated than revisionary interests.
The first important distinction to note is between vested and contingent remainders. Let’s deal first with
vested remainders because they are straightforward and not particularly difficult to understand. “Vested” refers to
both possession and entitlement. Thus, an estate may be vested in possession (the holder of the estate is entitled to
possession) and/or vested in interest (the holder of the estate has full entitlement to the estate or interest). By “full
entitlement” I mean that:
(1) the remainder person (the holder of the estate) is alive and specifically identified; and
(2) there is no condition precedent that must be met as a condition of obtaining the estate.
A contingent remainder is just the opposite of one that is vested in interest, i.e. the remainder person is not in
existence; in existence but not known; or the remainder is subject to a condition precedent.
Just as an aside, reversionary interests may also be either vested or contingent. A possibility of reverter is
vested in interest at the time of the grant; a right of re-entry is a contingent interest (it is subject to a condition
precedent, namely, the condition that is attached or added to the estate).
For the balance of this note we will focus on contingent remainders. At this point, it is important to divide
our discussion into legal and equitable remainder interests.
Legal Remainders
These interests are alive and well in Ontario today and continue to pose problems for the unwary estates
lawyer. First, note that all legal remainders must comply with the four so called legal or common law remainder
rules. The rules are:
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Joanna Nefs
(1) no legal remainder after a fee simple;
(2) a remainder must vest before or at the moment of the termination of the prior estate (normally a life
estate). This is often referred to as the “timely vesting” rule;
(3) no springing remainders, i.e. no contingent remainders intended to “spring up” in the future, after the
termination of the prior estate;
(4) no shifting remainders, i.e. no contingent remainders that prematurely cut short the prior estate. This
rule requires you to reconsider the distinction between determinable and estates subject to a condition
subsequent (something discussed in the context of reversionary interests). The only event that
prematurely terminates a prior estate is the condition subsequent. A determining event – one brought
about by words such as until or as long as – are inherent to or an integral part of the grant and as a
result lead to a “natural” as opposed to a premature termination. So a shifting contingent remainder
will be:
1. one that follows a life estate (a fee simple would offend rule 1); and
2. the life estate is subject to a condition subsequent
The problem with rule 4 can be avoided by drafting a grant that creates a contingent remainder that follows a
determinable life estate, e.g. G grants Blackacre to A for life or until she marries B, remainder in fee simple to
A’s children.
As long as a legal contingent remainder does not offend one or more of the legal remainder rules, it is valid.
Otherwise, it is void.
As if the rules themselves were not restrictive enough, there are two additional ways in which a grantor’s
intention might be frustrated. The first relates to a class of grantees, such as the children of the life tenant. At
common law a class closes with the termination of the prior supporting life estate. In the grant “to A for life,
remainder to the children of A who reach 21” the class closes at A’s death and only those children who satisfy
the condition precedent (reach 21) before A’s death participate in the grant, even though their siblings might
turn 21 in the next few years. (Festing v. Allen). The second problem is known as “The Rule in Shelley’s
Case.” The rule and the problem are best explained in this simple example: “X grants Blackacre to A for life,
remainder to the heirs of A in fee simple.” The intent is clear – a life estate to A followed by a remainder in fee
simple to A’s heirs. Unfortunately the Rule requires this interpretation: “a fee simple to A” The Rule states “in
a grant of freehold to A (in our example, the life estate), followed (whether or not immediately) by a remainder
to the heirs of A, the word ‘heirs’ will be interpreted as a word of limitation (one that determines the type of
interest granted to A) rather than as a word of purchase (a word that determines who or what groups of people
receives the interest).
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From The Legal Remainder To The Modern Trust In Four Easy Steps
While these steps cover several hundred years of history and simplify or ignore many of the reasons for the
developments that are described below, they represent an easy way of understanding the evolution from legal
remainders to the modern trust and the equitable interests created by the trust.
Step 1
Frustrated with the restrictions of the legal remainder rules, the common law conveyancers stumbled upon
the clever device of the “use.” Here is how it worked: grant the legal fee simple interest to X (a trusted friend or
group of friends) and then specify the “uses” to which the property would be put (who was to receive what) and
hope that X would carry out the grantor’s wishes. If the trusted friend (X) reneged, then, with any luck, equity
would enforce the obligations entrusted to X. That is exactly what happened. More importantly than simply
enforcing the obligations imposed by the grantor, the Courts of Equity concluded that they were not bound by the
legal remainder rules and, as a result, virtually all the restrictions imposed by those rigid rules could be
circumvented through the device of employing a “use”. Here is an example of how it worked.
Grantor grants Blackacre to X in fee simple, to the use of A in fee simple, but if A marries B, then
remainder to the use of A’s children in fee simple.
At common law this contingent remainder would fail for two reasons: it followed a fee simple and it shifted
away from or prematurely cut short the prior estate. Neither problem worried equity, with the result that X received
a legal fee simple, A received an equitable fee simple subject to a condition subsequent and A’s children received an
equitable contingent remainder (known as an executory interest), the contingency or condition precedent being A’s
marriage to B. How could this happen? Well, the common law courts saw the fee simple grant to X and concluded
that the grantor had fully disposed of all his or her interest to X. There could be no legal interest following the grant
of the fee simple to X and hence any interests in favour of A or A’s children were void at law. But of course equity
took a different view and recognized that A and A’s children’s interest were valid and, as a result, these interests
became equitable interests.
A note on terminology. I have been writing about grantors, trusted friends and subsequent equitable interest
holders. The correct terminology is grantor – the feoffor to uses; trusted friend – the feoffee to uses; others – the
cestui que use.
Step 2
The use was a clever idea, but it didn’t last long. Because the legal title remained with the “trusted friend,”
legal title didn’t pass and the lords were denied the incidents of tenure
that were collected when legal title
passed from one person another, namely cash to support their many wars. The solution was to pass The Statute of
Uses (1535). What this statute did was to reunite the legal title with the equitable interests, leaving the trusted
friend with nothing. With the titles reunited, each time the equitable interest passed form one person to another, so
too did the legal title pass and once again the incidents of tenure could be collected. Using the example above, here
is how it worked: X the trusted friend (or friends) received nothing (that interest was “executed” by the statute and
was reunited with the subsequent equitable interests); A received a legal and equitable fee simple, subject to a
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condition subsequent; A’s children received a legal and equitable contingent remainder in fee simple, now known as
a legal executory fee simple interest, of a shifting nature.
It is important to remember that the statute did not execute all uses. Excluded from the reach of the statute
were:
(1) uses in which the grant imposed active duties on the feoffee to uses;
(2) grants in which the feoffee to uses was a corporation;
(3) grants in which the feoffee to uses held a leasehold estate. (The statute only applied to freehold
interests);
(4) grants that disposed of personal property, rather than freehold interests.
While a combination of the use and The Statute of Uses enabled grantors and solicitors to create legal
contingent remainders (legal executory interests) that avoided the legal remainder rules, one problem remained
and that was the Rule in Purefoy and Rogers. That rule stated that if a legal executory interest could vest prior
to the termination of the prior particular estate (remember common law remainder rule 2), then it must vest. Or,
to put the matter more dramatically, if it did not vest, it failed. So, how might conveyancers avoid this problem?
One technique was to contravene one of the other 3 rules (it would not then be a “wait and see” situation,
waiting to see if the timely vesting rule would be breached , but rather a clear breach of a rule. The other
approach was to invoke equity yet again, by separating legal and equitable estates, thereby avoiding the last
vestiges of the legal remainder rules.
A note about wills. Five years after The Statue of Uses, Parliament enacted the Statute of Wills (1540).
Landowners were now permitted to make testamentary devises of their land. From the beginning, the common law
courts were less rigid about interpreting devises, with the result that the common law remainder rules were not
applied to devises.
A further note. You will recall that with legal remainders the class closed with the termination of the prior particular
estate (Festing v. Allen). Equity ignored this rule and permitted the class to remain open until all class members
met the contingency (usually reaching a certain age).
Step 3
The Statute of Uses executes the use (reunites legal with equitable interests), but it only works once. By
adding a second or double use the conveyancers could once again create equitable future interests. Here is how it
worked:
Grantor grants Blackacre to X in fee simple to the use of Y in fee simple to the use of A in fee
simple, but if A marries B, then remainder to the use of A’s children in fee simple.
The statute executed the first use (the legal fee simple title was executed to Y) but then the statute’s effect was
exhausted. The result was that the legal fee simple estate now remained with Y and all subsequent interests
were equitable.
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Over time the awkward language of the double use was shortened to “unto and to the use of.” And finally the
term “use” was followed by “trust.” Here is how it looked fifty to a hundred years ago.
Grantor grants Blackacre unto and to the use of X in fee simple in trust for A in fee simple,
but if A marries B, in trust for A’s children in fee simple.
As you can see, the language changed again. No longer is X the feoffee to uses and A and A’s children the
cestui que use. X is the trustee and A and A’s children the beneficiaries of the trust. Consistent with the above
analysis, the trustee holds the legal interest and the beneficiaries hold the equitable interests.
Step 4
Seldom do you encounter the complex language of the use today. In fact, in many common law jurisdictions the
Statute of Uses has been repealed (not Ontario). Today, it is the language of the trust or “to the use of T in fee
simple in trust for the following beneficiaries, under the following terms and conditions.” T, of course, holds
the legal interest, which is good or enforceable against all the world, and the beneficiaries hold the equitable
interest, which is enforceable against all the world except a bona fide purchaser for value without notice. As
between the beneficiaries and the trustee there are both common law and statutory rules that govern their
relationship, but those rules are the subject of another course.
In this short description it would be easy to forget that the grantor’s (or testator’s estate) may enjoy certain
future equitable interests that are not reversionary interests (Reversions are legal interests). Here is an example
of a grantor who has a future equitable interest.
Grantor grants Blackacre unto and to the use of X in fee simple in trust for A when he reaches 21.
(A is currently 16). X, of course, has the legal fee simple title. A has an executory interest of a
springing nature (it will spring up in the future). But who has the equitable interest while we wait for
A to turn 21? What happens to the interest if A dies before she reaches 21? The answer is that there
is a “resulting use” in favour of Grantor, subject to divestment upon A satisfying the condition
precedent, namely, reaching 21. If A does not reach 21 the use remains with Grantor and there is no
divestment.
Provisions (especially statutory) which enable the beneficiary to ensure that the trustee protects the legal estate
and manages the property for the benefit of the beneficiaries are again the subject of another course.
CONCLUSION
Is there more to know? Are there other things to worry about? Of course. This exposition did not touch on
the Rule vs. Perpetuities. Nor did it take you through all the examples and exercises set out in the casebook or
discussed in class. It has, however, given you the basics and, I hope, a good start on mastering future interests.
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March 4th and 5th, Chapter 4: 363 – 384, 405 – 420
BAILMENT
Definition:
 In the case of bailment there is a division between “ownership” or title to the property, and lawful possession, or use of the
property
Bailment
 Entails a splitting of possession & ownership
 Anything less than possession is mere custody giving rise to license.
 Possession is temporary
 Can be contractual or gratuitous (no consideration), consensual or non (i.e. mistaken possession or finders)
 Contract law only applies when there is consideration
 Often conflict/intersection here between contract/property/tort laws.
 Finders are sometimes referred to as quasi-bailees
 Doesn’t have to be for a pre-determined set time
Bailment vs. Licenses
 License refers to land; Bailment refers to chattel
 License only gives permission to use, not possess another’s property
 Leases allow possession
 Licensee does not owe the licensor a duty of care, whereas a bailee does
Steps in Answering a Bailment Question
1.
2.
3.
4.
5.
Is there a bailment?
What is the scope of the bailment relationship?
If there is bailment, what kind of bailment is it?
Is there a contract?  Are there clauses that alter liability?
Even w/ a contract, has there been a fundamental breach
1. Is there a bailment?
 Bailment requires transfer of possession, w/out which have license
 Possession  physical control & intent to control
2. What is the scope of the bailment relationship?
 Bailment only includes those things that the bailee is aware of or should reasonably be aware of.
3. If there is bailment, what kind of bailment is it?
 Mutual/Non-Mutual  This will determine the duty of care & liability imposed
4. Are there clauses that alter liability?
 The standard of care that flows from the bailment relationship flows from the legal relationship established btw the parties.
This relationship can be varied by contract (waiver), thus varying the obligations of the bailee to the bailor.
 Must always ask in this case if the clause applies!!
5. Has there been a fundamental breach?
 If there is a fundamental breach, they will narrowly apply the clause.
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Duty of Care
 Bailment imposes obligations on the bailee re the chattel
 Originally the bailee was held strictly liable for any damage to the bailor’s property
 This standard was replaced by laws of negligence  different levels of care are imposed accd to the nature of the
bailment:
1.
2.
3.

Bailment for sole benefit of the bailor  liable for gross negligence only
Bailment for sole benefit of bailee  liable for slight negligence
Bailment for mutual benefit  Duty of ordinary diligence unless otherwise altered by contract
More recently, case law suggests that these various standards of care have been replaced with a general standard of
negligence that is determined by a review of all the facts.
Bailor’s Duty of care
 A bailor for reward (eg car rental company)  has duty to ensure that chattel is reasonably fit
 Bailor is liable for any defect known or ought to have known
 A gratuitous bailor  has duty to inform bailee of known defects
Burden of Proof
 After bailor establishes damage to chattel during the course of bailment, burden shifts to the bailee
 Bailee has burden of proving non-negligence.
 Contrast to a license where the licensee need only prove that he honoured the contract.
 Reason for shift in burden  bailee is in a better position to know the reason for the negligence.
 When the bailee & the bailed goods disappear or perish together, the burden doesn’t shift & the bailor must prove both
loss & the bailee’s negligence
Exculpatory Clauses
Factors in assessing exculpatory clauses:
1. Whether the words of the contract were known, or reasonably ought to have been known (constructive knowledge)
2. Whether the terms of the contract were ambiguous  ambiguity is interpreted against the maker
3. Whether the exclusion covered a fundamental breach  not allowed at law, but allowed in Canada if parties do so in
clear & unambiguous manner
4. Whether the arrangement was unconscionable  duress, undue influence, unequal bargaining power
Assignment & Sub-Bailment
 A bailee can assign or sub-bail his interest provided that the terms of the original bailment expressly/impliedly permit
it
 When bailor has an immediate right to terminate the principal bailment, the bailor has a direct action against the subbailee (in tort b/c have no contract w/ sub-bailee)
 Assignment  First bailee drops out, is replaced by new bailee
 Sub-Bailment  controlling contract is between the bailor & the bailee
Bailment and the Employment Relationship
 An employee is not a bailee of the employer’s property

Distinction btw custody and possession is a fine one: a person merely in custody of another’s goods may not be
liable in bailment for negligence. W/ custody, the owner of the goods retains dominion over them; there is no
intention to hand over control and possession.
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See: Weibe v. Levy (1974) Man. CA
Strict Liability of Common Carriers & Innkeepers
 The law of negligence replaced the historical standard of strict liability of the bailee.
 There are two exceptions to this rule: COMMON CARRIERS AND INNKEEPERS remain strictly liable for damage to
the property of persons for whom they provide their services.
 Common carrier: contracts w/ other parties for the transportation of goods. Unless their liability is altered by statute or
contract, they will be held strictly liable for any damage to the goods transported  Brookins v. Canadian National
Railway Co. (1974) PEI SC
 Innkeepers: the strict liability today is typically altered by statute. In Ontario, the Innkeepers Act s. 4 provides that the
innkeeper’s liability for loss or injury to the guest’s property is generally limited to $40, except where they have been lost,
stolen or damaged through the willful act or neglect of the innkeeper or EE or the goods have been deposited expressly for
the safe custody w/ the innkeeper. S. 6 states that this limited liability will not be available unless the innkeeper
‘conspicuously’ posts a copy of s. 4 in the office and public rooms and in every bedroom in the inn.
 Laing v. Allied Innkeepers Ltd (1969) ON HC: although proper notice had been posted in the P’s room, the hotel was
found liable b/c it was unable to establish that the proper notice had been posted in all the other locations required by s. 6.
Bailment & Third Parties
Liability to a third-party
When bailed chattel through misuse or defect cause injury or damage to a party other than the bailee
Owner of chattel may be liable to a third party in 3 cases:
1. Agency
- If bailee is acting as the bailor’s agent, bailor might be liable for their negligent acts
2. Negligence
- Bailor will be liable in negligence if defect was in existence at time of bailment & bailor knew or ought to have
known of the defect
3. Complicated Machinery
- If bail machinery w/ an operator, bailor is liable for the operator’s negligence
Chattel damaged by third party
Bailee can sue the third party
- bailee can bring an action against a party that damaged or wrongfully deprived the bailee of the bailed property
- Can sue b/c there is an interference w/ possessory interest in the bailed goods
Bailor can sue the third party
- Bailor sues on ground that he is entitled to recover his proprietary interest in the bailed goods
- Only applies if there is interference w/ the bailor’s reversionary interest
- Test is permanent damages  anything less is not interference w/ the reversionary interest
- Less serious injury may only be recoverable by the bailee
CASES
Parking Cases:
Key Issue: Was the arrangement for the purpose of parking my car (license) OR was the arrangement to take care of my car,
thereby having it in their possession?
Heffron v. Imperial Parking Co. (1974) Ont. CA (p.350)
FACTS: At the request of the parking garage owner, Heffron left his car keys with the attendant. The appellant communicated the house of
operation to Heffron. When he returned to get his car, it was gone. When the car was later found, it was damaged & the personal property
in the car was gone. Imperial Parking owned a garage across the street. It was common practice for the attendant when leaving the parking
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lot at midnight to give the remaining keys to this second garage. Keys were not there or in original lot. No explanation was given as to
what happened to the car. There was a posted exculpatory clause that stated that IP wasn’t responsible for theft or damage of the car or
contents, however, caused. Also three signs with same message.
Issue: Was there a bailment? How does the exculpatory clause apply?
Decision: ESTEY JA. There was a bailment (transfer of possession). No mutual intention of merely parking the car.
Bata v. City Parking Canada Ltd. (1973) ON CA
FACTS: P parked his car in a parking lot and left his keys in the car upon the request of the attendant. Words on two signs and the back of
the ticket said “charges are for use of parking space only”. The car was stolen. P brought an action against the parking lot. This case
came before Heffron.
ISSUE: Is the relationship a license or a bailment? Can the duty of care be altered (from bailment to license) by the
exculpatory clause.
DECISION: Court found for the parking lot, finding the relationship a license rather than a bailment.
Minichiello v. Devonshire Hotel Ltd. (1978) BC CA
FACTS: P left his car (and his keys) w/ the parking attendant. He paid 40 cents to park the car and informed the attendant that there were
“valuables” in the car. A suitcase of $16, 000 of jewels was in the trunk and disappeared.
DECISION: P recovered the amount of the jewels on the grounds that the P’s statement to the attendant was sufficient to
enable the court to conclude that one could reasonably anticipate that property of such value might be in the car.
Dixon and Zelinski v. City Parking Canada Ltd. (1981) AB QB
FACTS: Parking lot was full, parking lot attendant instructed P to leave his keys in the ignition. Words on the ticket provided that “charges
are for use of parking space only”. Car was stolen.
DECISION: Court found that terms of contract were changed by attendant who had to double park cars since lot was full and
asked P to leave keys. There was bailment. Parking lot liable.
Issues – Legal Reasoning and Rules:
Relationship - Bailment or license? – Defining transfer of Possession (Physical Control + Intent)
 HEFFRON – Factors favouring bailment rather than license.
 The owner gave the keys to the attendant who was there to watch the car, thus the attendant had physical control
over the chattel. (Surrendering Control)
 As well, the parking ticket had a serial # which would indicate that the surrender of the specific ticket would be
necessary in order to obtain delivery from the attendant of the car.
 Provision of the attendant raises a reasonable inference that his function is more than just taking money.
 The parking lot closed at midnight & no conditions were imposed re the removal of cars prior thereto
 The notice of closing hours infers an active operation of the parking lot rather than a passive allotment of parking
stations form which the owner could at any time unilaterally w/draw the car.
 The practice of the attendant of taking the keys to the office every night also infers it’s a bailment.
 No unique parking spot or area for the exclusive use of the bailor indicates that this was not use (i.e. license)
 BATA – Including the word “for use” creates a license – The words “charges are for use of parking space only”, exclude at
once any notion that the arrangement entered into is one of bailment. Located on back of ticket, and on two signs. Also
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combined with exclusion clause that that the company assumes “no responsibility whatsoever for loss or damage due to
fire, theft, collision …”
DIXON – Term created by using “for use” altered by attendant thus bailment – The parking attendant imposed upon the
plaintiff – who accepted – a change in the terms of the contract by instructing the P to leave his keys in the car if he double
parked. Double parking was the only alternative since lot was full, thus bailment for hire was created.
Scope of the bailment relationship? – What is bailee aware of?
 HEFFRON – Personal property (clothes etc) are reasonably expected - W/ respect to the content of the car, the goods were
generally of a type, which one might reasonably be expected to carry in an automobile. Thus, these items were
constructively included in the bailment arrangement and were property included in the claims made. It makes no
difference whether the property is in the trunk or car.
 MINICHIELLO – Stating there are “valuables” to attendant is sufficient awareness – Plaintiffs statement to the attendant
was sufficient to enable the court to conclude that one could reasonably anticipate that property of such value might be in
the car.
Kind of bailment and Duty of care
 HEFFRON – RULE: Bailee has burden - Court says that all the bailor need prove is the bailment contract & the nondelivery. Then the bailee must prove either: 1) Loss w/out fault (if proven  no liability). 2) If it is his fault, it was a fault
he was excused from (through the exclusion clause). The onus is on the bailee to rebut the presumption of negligence.
 HEFFRON – RULE: No Burden for licensee - Contrast w/ license where licensor is not subject to the same onus; the
licensee need only prove that he honoured the contract
 Bailee was negligent because breached duty to exercise reasonable care to safeguard the keys.
Clauses that alter liability
 HEFFRON – Communicating clause– Exculpatory clause and conditions printed on back of ticket + on three signs on lot
were considered taking all reasonable measures to communicate when bailor claims he did not read back of ticket.
 HEFFRON – Fundamental Breach makes exculpatory clause inapplicable – “Whether...by applying the doctrine of
fundamental breach as a matter of contract construction or as an independent law, it is clear that the phenomenon is alive
and prospering in the law of this province.” NOTE – ALTERED SEE BELOW
Has there been a fundamental breach
 HEFFRON – There was fundamental Breach – Implausible to assume that the parties contemplated that the parking lot
operator would be free leave the car and keys unprotected and escape liability. This assumption would make meaningless
the purpose of parking in a supervised lot with an attendant, who takes your keys, and gives you a ticket with a serial
number to recover your car. Clause does not operate by reason of fundamental breach of a term of the contract due to the
disappearance
 HEFFRON – Exculpatory clause ran out, thus breach of implied terms - There was a 2nd bailment that occurred after
midnight in which no exclusion clause applied. Though the original term of the bailment may expire, the consequential
duty to make reasonable provision to safeguard the keys continued. In this case lot owner was liable.
Reconciling Heffron and Bata
Problem Between the 2 cases:
 On an abstract level:
 Heffron  words alone cannot get you out of liability
 Bata  words alone can get you out of liability
 Judge here had no problem allowing the party in power to use words to exclude liability
As between Bata and Heffron, each comes to different conclusions
 They might be distinguished based on their differences in contract language
 Which is the better result?
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Bata might be the better result b/c it corresponds to the expectations of the parties
If the difference in language doesn’t explain the different results, then decide on policy
Important note on Clauses Excluding Liability
 It is now clear that the doctrine of fundamental breach is merely a rule of construction and not a rule of law. The
distinction is crucial.
 Previous case law suggested it was a rule of law: in the event of fundamental breach of the contract, the clause excluding
liability would not be enforced, even if the clause itself expressly and clearly excluded such liability.
 Now, the parties to the contract can freely and knowingly negotiate a clause excluding liability even for fundamental
performance under the contract. Providing that there is an equality of bargaining power btw the parties, there is little
reason not to enforce such clauses.
 Thus, as a rule of construction, the courts have determined that the exculpatory clause will not be interpreted, or
‘constructed,’ as excluding liability for fundamental breach unless the clause does so in a clear and unambiguous fashion,
and without unconscionability.
 If clause is not obviously and prominently displayed, the courts may ignore it.
Employment Relationship Case
Weibe v. Levy (1974) Man. CA
Facts:
Decision:
 Court found that the employee driving one of his employer’s trucks was not a bailee of it
 An employee is not in possession of the employer’s property
 The employer is only in custody of the employer’s goods
 A person merely in custody of another’s goods may not be liable in bailment for negligence
 This rule has been criticized
 It has been traced to the incapacity of slaves to own or possess property independently of their masters

Baliment
 Heffron v. imperial parking
 Beta v. City Parking Canada Ltd.
 Minichiello v. Devonshire Hotel
 Clauses excluding liability
 Length of term of the Bailment
 Brden of Proof
 Bailor’s duties
 Asignment and sub-bailment
 Bailment and the Employment relationship
 Strict Liability of Common Carriers and Innkeepers
 Bailments and 3rd parties

Title Posession and Leasehold Estates in Land
 Highway proerties v. Kelly Douglas
 Leases and Licences
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Principles of Property and contract In Leaseholds: Termination Remedies
Termination of Leasehold Estates
Commercial leaseholds
 Highway Properties v. Kelly Douglas & Co.
 Property Law Remedies for a Tenant’s Repudiation of the Lease
 Contract law remedies for a Tenants Repudiation of the Lease
 Lanlord’s Duty to Mitigate
 Pacific Centre Ltd. v. Mirro Base Development Corp.
 Notice
 Residential tenancies and the Duty to mitigate
 190 Lees Ave. Ltd. Partnership v. Dew, Tanguary and Whissell
 Bailment and protective Loss
Is property Unique: Sammel hagel case. Laskin’s decision in Highway properties is important.
Chapter 5, March 11- 12 : pp. 439-453, 487-504, 516-524, 535-540
11th of March 2009
Gifts:
Policy Considerations – The potlatch, the Indian Act outlawed potlatches in 1884, the reasons were: because is
was ‘wasteful and the antithesis of the protestant work ethic’ and because it giving away or destroying
property debased the commodity upon which white capitalistic society was (is) constructed. The idea is that
societies that are organized in an individual system, we’re able to make more money than those where the
focus is community. (see the importance of equity speech at 13 min. to 18 min.)
Requirements for a Valid Gift Inter Vivos In order to have an inter vivos gift, you must establish:
1. Intent to give
2. Intent to receive
3. Delivery
It should also be noted that “equity will not perfect an imperfect gift” (Milroy v Lord 1862 UK). But once all 3
elements are in place the gift is irrevocable, as if the recipient had obtained the title by contract.
3 Ways of Giving Personal Property
Deeds: If you properly execute a deed there is no question about whether the item was a gift. The deed must
be signed (and sealed). There is no need for delivery if there is a deed of a gift. The deed is a clear expression
of the donor’s intent.
Testamentary Gift: comes from a will (or other written divise) the will tramsfers no interest in the property
until the death of the testator, and the recipient has no claim against the living testator.
Inter Vivos Gift: are gifts with no written documents. There must be intent to give, intent to receive, and
delivery.
Delivery the only times you do not need delivery are when you have a contract, a deed, or another instrument
(like a will). The courts will apply the need for delivery very strictly (Cochrane). Delivery can take the form of:
Actual delivery (take the thing and move it from here to there),
Symbolic Delivery (by some smaller gift or ceremony, how do you give someone the furniture?) and
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Constructive Delivery, (providing access to the donnee to the subject matter of the gift (ex. giving the key to
the safe deposit box, or newspaper bundles on the curb (State v. Weinstein 1944 US)).
Examples: In the unnamed boat situation there was no valid gift. The keys did not constitute constructive
delivery because it was not exclusive access to the boat, the marina owner continued to have keys. BUT
what the Maria owner did and said created a trust, that made him and his estate a trustee in the ½ interest of
the boat.
Irons v Smallpiece (1819 UK), pg. 447
Ratio: Delivery Is delivery, the delivery and the gift are one and the same. Delivery must be established
because delivery is a “part of the proposition itself”.
Policy Considerations: The donor should be bale to change her mind. We need clear boundaries, and certainty
in society, the donor must put the item out of the donor’s reach. The idea of seizen, we must know who has
control over the thing so that we know who has the liability and responsibility for it.
Cochrane v. Moore (1890 UK) – There will be a very strict application of delivery requirement.
Facts: Horse owned by B. B. tells jockey (M.) that he is giving M. of %25 of the horse. B wrote a letter to Y,
saying he had given M. %25 of the horse. Also B. owes Cochrane money. To repay the debt B gives the horse to
Cochrane. Cochrane was told about the %25, and said “I’ll take care of it”, Cochrane argues: no delivery.
Ratio: There was no gift, but there was a constructive trust. Delivery is an essential requirement for a valid oral
gift of chattels, and there was no delivery here.
Policy Considerations: The gift may have been given in a moment of passion. An emotional outburst. There
wasn’t really the requisite intent to give. Here Moore argues for a 4th exception to delivery: clear evidence of
intention clearly communicated and accepted (court says no).
Emond Tip: Try to establish a gift, and/or see if there is another way of addressing the claim, but equity will
not perfect an imperfect gift (Millroy v. Lord 1862 UK). If you can’t establish a gift, then don’t try to argue it.
Policy Considerations: Improving the Law of Gifts: We must deal with all of the policy considerations (Irons v.
Smallpiece) and he likes just making a deed or a will required for a gift. The book makes special note of the
idea of seisen, and suggests that the court’s using the idea of seissen is just a smoke screen to protect
personal property from an debatable oral assertion that there was a gift.
Gifts and Trusts
Trusts can be created in 3 ways:
1. Express trusts, an intention to create a clear description of the subject mater of the trust and a description
of the purpose of the trust.
2. Constructive Trust: The court in Cochrane held that the conversation between Moore and B had the effect
of creating a constructive trust, with Moore as the beneficiary. Cochrane had notice of the interest that B
intended to create in favour of Moore, Cochrane recognized that there was an interest and then denyed
that there was an interest.
3. Resulting trust, I give, but retain some interest. Then there is a resulting trust in favor of the donor.
12Mar09
Transferring Interests in Land, Legal and Equitable Interests
For gifts of land you must put thing is writing, according to the Stature of frauds. Remember; to transfer
interests in land is a 2 step process, (contract and closing). The contract establishes the rights of the parties,
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pertaining to the transfer of title (equitable, not legal interest). There are 3 things you need in order to
establish a valid K (See Lysaght below).
The Statute of Frauds – basically everything has to be in writing
s. 1: All deals concerning interest in land must be in writing, & All leases for land are void unless made by deed.
s. 3: This does not apply to leases for terms of less than 3 years
s. 4: No action shall be brought unless the agreement upon which the action is brought is in writing.
Exceptions: If the P can show reliance (first) and then part performance then an oral agreement may be
sufficient in a contract regarding land, but this is the exception for cases where there is inequity through the
law (Maddison v. Alderson) See Taylor below. BUT this is an oral agreement that gives rise to an equitable
interest that cannot be registered with the land registry system.
Another example of an interest that arises other than by way of document: adverse possession, prescriptive
easement.
Taylor v. Rawana (1990) pg. 503 – The principles for part performance.
Ratio: “the performance must be referable to a contract, the acts relied upon to establish part performance
must be carried out by the plaintiff, the K must be capable of specific performance, there must be clear and
proper evidence of the existence of a K, in addition to anything the P asserts”
Equitable Interest
Lysaght v. Edwards (1876 UK)
Facts: vendor, Edwards entered into agreement to sell his interests in land to Lysaght. Purchaser paid deposit
and they agree on closing date (almost a year later). They had agreed on all details before closing date.
Vendor dies and purchaser brought an application for specific performance against vendor’s heirs.
Ratio: two interests are created at the time of the K: purchaser has equitable title, and vendor has legal title at
time of the K. The vendor is a trustee for the purchaser. The Purchaser has the equitable title.
Need 3 things to create a valid K (to make the K binding on both parties):
1. K sufficiently specific in form and substance so that there is no ground for setting it aside as between V
and P;
2. Vendor must be able to transfer title.
3. In writing (statute of frauds)
Equitable Interests and the Remedy of Specific Performance
Semelhago v. Paramadevan, 1996 SCC (pg. 492) –specific performance is not always required for land.
Facts: vendor reneged on agreement for sale of home because of rising prices in the house market.: parties
enter into agreement, there’s a contract. Had contract for 225,000 (P1), but sold it to another (P2) for
250,000.
Ratio: There is an equitable interest here, under the doctrine of specific performance to force the vendor to
transfer the title. But the court says that specific performance is an outdated idea here, the appropriate
remedy is damages. Not all land is unique. If there is uniqueness then specific performance should be
ordered.
Policy Consideration: This case also shows the rise in contractual ideas as being okay in property law. But if the
court is going to merge contract and property law the question of mitigation of losses must also be
considered, but the court does not do this because the transactions were separate.
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Notes: windfall, would it be appropriate to impose a duty to mitigate losses and what would the scope of the
duty be?
Uniqueness – Specific performance will only be granted if the plaintiff can prove that the subject property is
unique in the sense that a substitute is not readily available.
John E. Dodge Holdings Ltd. V 805062 Ont. Ltd (2003 ON CA)
Facts: Defendant vendor had agreed to sell some commercial land to the plaintiff. Land was near theme park
which was crucial as he wanted to build a hotel. Defendant breached but argued that land was not unique
enough and therefore plaintiff should have mitigated his loss.
Ratio: Specific performance will only be granted if the plaintiff can demonstrate that the subject property is
unique in the sense that its substitute would not be readily available. This quality should be related to the
proposed use of the property and be one that is particularly suitable for the purpose for which it was
intended. Here property is unique.
Policy Considerations: Critics of this decision have suggested that it interjected too much uncertainty into the
law at the expense of innocent plaintiffs.
Specific Performance and Equitable Interests in Land
 If 2 parties have equitable interest the dominant interest is the one that was established first.
 A prior equitable interest can prevail over a legal interest if the holder of the legal title was a bona fide
purchaser with notice, or if the title holder was not a bona fide purchaser.
 An agreement to lease will establish an equitable lease, a lease will create a legal lease. (Walsh).
A valid Contract: To have a valid K you need sufficient detail and sufficient certainty. So that a court knows
precisely what it is that is being performed. The court in Walsh was willing to order specific performance
because there was a valid contract.
Walsh v. Lansdale (1882) pg. 499
Facts: There was a contract arrangement, that said rent was payable in advance at the beginning of each year,
but the parties never executed the lease (due to some other detail). At some later point the tenant
possessed the land and started paying rent monthly. In equity there was a valid K, that said rent should be
paid a year in advance. In law, tenant paying month rent creates a legal periodic tenancy.
Ratio: The equitable contract prevails. Parties are treated as if they had executed the lease, BUT this is only
because there was a “valid contract” that was sufficiently certain. An agreement to lease will establish an
equitable lease, a lease will create a legal lease.
Policy Considerations: The tenant gains form the equitable contract as well there were more protections
under it than in common law. ALSO note that specific performance may be denied in the party has dirty
hands. ALSO shows that as between law and equity, equity prevails.
Unjust Enrichment
 Does the claim lead to an interest in land?
 if yes:
 then it only arises out of a trust (constructive, or resulting) and you must find something that
shows the original title holder did something that a courts could conclude that a trust was
established. There must be evidence that there was intent to establish a trust.
 Or you can do a claim for damages.
 If no evidence, then you can claim unjust enrichment or a constructive trust.
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Hussy v. Palmer (1972 UK)
Facts:
The consequence of a trust is to create an equitable lean on the property.
Vendor --- (k) --- Purchaser
P has an equitable interest, what could be called an equitable lein, the outstanding debt will be the
deposit subtracted from the purchase price, there is an equitable lein oin th property in that amount.
Pg. 521, this is the disussion form Hussy and Palmer, is the contribution by way of a loan? If yes there
was no resulting trust.
There was a class discussion about this
A Note on Priorities and Registration (535 – 540)
Priorities
You must first understand the situation at common law and then understand the situation in the realm of
registration
Common law,
There are legal and equitable interests, they can arise in this order:
 Legal  Legal
 first in time is first in right, ex. first possessor, and then an adverse possessor, the first possessor
can eject the second.
 Legal  Equitable
 Legal interst will prevail unless the legal interst holder was engaged in some kind of inequitable
conduct.
 Equitable  Legal
 Equitable interest prevails unless the legal interest holder is a bone fiede purchaser for value
without notice
 Equitable  Equitable
 first in time is first in right, unless someone has unclean hands
The common law is superseded by statutes.
Registration
The registry and the land titles act.
For these interst to be valid they must be registered. The order in which interest are registered becomes
the controlling principle. (This is important for realestate).
It is good to register whatever interst you have in land, but it is not the case that any unregistered interst
is automatically defeated.
When an interest arises out of a fact situation (adverse possession, or proscriptive easement, or oral
equities) facts are not documents, and it will not be defeated by a contrary interest.
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Title Holder Vendor, sells to purchasor,
There is an adverse possession that has arisen through a fact situation.
Purchaser registers the title, makes no mention of the adverse possession interest,
The registration that make no mention of the adverse possession then the registration has no effect over
the adverse possession interst.
(Also good for part perfomance of an oral agreement).
Land titles are gaining ground (no pun intended) over registry act.
Chapter Six, Non-posessopry Intersts in Land: March 18 the to March 25
March 18th, 2009
Profit a Prendre is a right to take something from another person’s land. In the case of
License or Profit a Prendre? A license is the right to use for a specific purpose revocable with appropriate
notice. BUT Licenses can develop into easement, with reliance over a long period of time, and property
interests can develop. A Profit is a proprietary interest. Profits can exist in gross, the person who enjoyed the
benefit of the profit need not have land that benefited it is a benefit to the individual. This is different from
easements and covenants.
Mason v. Clarke (1955 UK), a profit a prendre is distinguished from an easement: easment is a right to use the
land, Profit a prendre is a right to take form anothers land, and…
R in Right of British Columbia v. Tener (1985 SCC) the right to access land for the purposes of taking form the
land.
Aboriginal Right: R. v. Sparow: Sui Generis Aboriginal Rights,
The court is reluctant to characterized the Aboriginal interest using common law categories. Instead they call it
a ‘sui generis right’. ‘Sui Generis’ is a unique or indefinable right. The reasons sighted for this distinction are
that aboriginal rights are community rights. BUT the common law has recognized some categories of common
rights (for example ‘the commons’ or co-ownership). Saying that aboriginal right are unique means that the
rights don’t have the same kind of protections that the common law rights have.
Some reasons why the courts may be reluctant to recognize aboriginal rights as common law rights, is that the
nature of the use didn’t correspond with the kind of use that the court would have expected. Aboriginal
concepts might include the right to take, for brief periods throughout the year. A nomadic people didn’t fit
into the common law mould.
This categorization seems to betray a preference of one group over another based on extra-legal
considerations. Decisions are being made based on the court’s goal of achieving outcomes it considers
desirous.
Qualifications For Easements Easements
Gypsmu Carrier v The Queen – Sets out the four requirements for an easement, and the consideration of
intention. Intention is important in many different settings: the courts look to the substance of the
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agreement and not he form, so while what parties have called it may be important it is what the parties have
done in substance that is more important.
Also there is a judicial reluctance to create new categories of easement, and preference to find that the right
created was a personal license.
A useful technique used to discover intention is to ask: did the parties intend the consequences that will arise
from finding that there was an easement?
Gypsum Carrier v. The Queen (1968 Canada Federal Court)
Facts: Railway bridge is built, rights to pass over the bridge is established (in exchange for a fee). Bridge is
owned by the government of Canada, railway companies own the land going up to the bridge, on either side.
The rights are without limit. A ship damages the bridge, railway companies have to divert their trains and thus
suffer losses.
Issue: What kind of interest must be established before the railways can collect for damages?
Ratio: Four easement requirements established (see below). Intention of the parties is an important tool to
discovering of there is an easement. To discover intention look at: the contract’s words, and the
consequences of finding there is an easement (could the parties have intended those consequences)? Here,
despite the language of the contract there was no intention to create an easement. (Only to create
contractual obligations not property rights)
The Test For Finding an Easement
First consider if there was an intention to create an easement.
1. There must be a dominant tenement (that enjoys the easement) and a servient tenement (that is
burdened). (Policy questions of Easements in Gross see below)
 There must be an obvious connection between the pieces of land (does not mean a physical
adjacent connection necessarily) Ellenborough Park,
2. The easement must accommodate the dominant tenement
 See Defining the Nature of “Accommodation”below,
 see also: Ellenborough Park
 In Depew there was no benefit to the ‘parking lot’ section of the land.
3. The dominant and servient tenements cannot both be owned and occupied by the same person
4. The easement must be capable of forming the subject matter of a grant
 The servient tenement know precisely the nature of the burden on her land, as outlined in
Ellenbrough questions raised should be: Is the right too wide or vague? Is the grant inconsistent
with the possession of the servient owner? Is it a mere right of recreation without utility or benefit?
 What part of the land, who can cross? (Ackroyd v. Smith)
 Shelf Holdings Ltd. v Huskey Oil Operations Ltd.
There must be a dominant tenement (that enjoys the easement) and a servient tenement (that is
burdened).
In re. Ellenborough Park (1956 UK)
Facts: There is a private development, adjacent to a park. The ogiginal developer sold the houses with the park
as a feature of the development. Time passes and now the developer sells the parkland to another
developer.
Issue: Are the qualifications of easement met? Is there a benefit to the land as land?
Ratio: There is an easement, the park does benefit the other land. ALSO Lays out requirements for finding that
Policy Considerations: Residential land makes a difference. (see Hill v Tupper below).
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Hill v. Tupper (pg. 554) Considered in Ellenborough Park
Facts: There is A, who owns land and rents boats for use on a canal. There is B who owns the canal and has
given A the exclusive right to use the canal. And rent boats for use on the canal. B sells to C, Can A enforce
its rights against the new owner?
Issue: Does the exclusive right to rent boats benefit the land as land?
Ratio: This is not an easement, only a contractual right. Commercial land, ascertion of a monopoly, consider
intention: no intention to perpetuate the monopoly forever.
Policy Considerations: Business relationships should be organized on the basis of contract, not on property
rights. For business you want future flexibility as to how land is used, want to maximize land’s value.
Easements exist in perpetuity.
Ackroyd v. Smith (1850 UK),
Facts: There is an easement over the road to allow access to a development. The license says that a right to
use the easement had been granted to ‘all person’s having occasion to resort thereto’
Ratio: The courts said that this was not a sufficiently concise definition of persons. You must limit the range of
the scope of those enjoying the right.
Policy Considerations, should Canadian law allow easements in gross (without a connection to the land)?
 Pro: What public benefit could be served by allowing easements in gross?
 Con: An easement is a property interest, survives contracts, Courts do not want to burden land (potentially
indefinitely)
The easement must accommodate the dominant tenement:
Defining the Nature of “Accommodation” is about Shrinking and expanding the uses that the dominant
tenement wishes to make of the easement.
Emond Tip: Use phrases like “normally or frequently associated with land” “reasonably necessary for the
better enjoyment of land” These are the courts use that the courts use to find the “nexis”, the relationship of
land. Using these phrases are good.
Birch Island Estates (Not in readings) –
Facts: Agreement for single family use of easement expanded to 40 cottage lot.
Ratio: Easement being used for an “improper purpose”. The court here was concerned about the easement
being used for something that was not intended at the formation of the easement.
Jengle v. Keetch (1992 On. Ca.)
Facts: A, B, and C all have land, B has an easement over A’s land. A refuses to sell C an easement for the same.
C ‘leases’ a part of B’s land as a “parking lot” and thus makes use of B’s easement.
Ratio: This is an “improper use” of the easement, it was not the intention of the original parties that C would
have access to the easement. C’s use of the land does not benefit B’s land. The easement must benefit the
dominant tenement, there must be a benefit to “the parking lot”, which is not the case here.
Depew v. Wilkes (2002, On. Ca.)
Facts: A series of cottages have an easement over ‘Willow Beach Ln.’. There is no parking available on the
cottage lots, people are parking on the lane,
Issue: How far can the easement be extended?
Ratio: The easement can extend to parking cars on the easement, because this benefits the dominant
tenement or it is reasonably necessary for the enjoyment of the land.
March 19th, 2009
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The Easement Must be capable of Forming the Subject Matter of a Grant
As above, the easement must be capable of forming the subject matter of a grant, The servient tenement
know precisely the nature of the burden on her land, Emond Tip: Note that this has a relationship to
intention.
As outlined in Ellenbrough questions raised should be: Is the right too wide or vague? Is the grant inconsistent
with the possession of the servient owner? Is it a mere right of recreation without utility or benefit?
Other questions are: What part of the land, who can cross? (Ackroyd v. Smith)
In re. Ellenborough Park (1956 UK)
Facts: See above
Ratio: There is an easement, the park does benefit the other land. ALSO Lays out requirements for finding that
the Easement is capable of forming the subject matter of a grant. 1. Can’t be too vague, 2. Can’t deprive the
owner of legal posession (ex. exclusive right to use or occupy cannot be an intended easement) 3. The right
in question must be of some benefit or utility to land. (See easements in gross)
Policy Considerations: This is related to intention.
Shelf Holdings Ltd. v. Husky Oil Operations Ltd., (1989, AB CA).
Facts: There is a buried pipeline, crossing another’s land, the servient owner enjoys the use rights. If it is an
easement it is protected by the Land Titles Act.
Issue: Has this gone beyond an easement, is it a posessorary easement?
Ratio: This is an easement, goes through the five steps of finding an easment (intention + 4) and goes through
requirements for ‘forming the subject matter of a grant’. The degree of possession is not enough to detract
from the servient owner’s right of ownership. Grants of easements for pipe lines are common.
Note: The court mentions that “the degree of occupation or possession will be governed by the document
conceding the grant”.
Policy Considerations:
The Dominant and Servient Tenements Cannot be Owned of Occupied by the Same person
Fairly self explanatory. We don’t need to get into this one too much. If someone buys both A and B there may
still be a quai-easement. Just remember “Thou shalt not derogate from your grant”
Principle of non derogation:
 If I am selling and the purchaser would benefit form an easement over my land and I don’t mention it, it
continues to exist (I am retaining land B)
 Opposite you can’t later say that there is a reservation easement if I don’t mention it (I am retaining land A)
Policy Considerations, The Ascendancy of Contracts
 What we see is the ascendancy of contract law ans principles and with thtat comes the ascendancy of the
idea of the contract concept that there is a duty on the damaged party an obligation to mitigate,
 Samehagel case, court abandons specific performance, and believes that the best remedy is damages, (K
remedy), How far does the obligation to mitigat go?
 With increase of k law comes with an enthusiasm to include other k princiopels like mitigating your
damages.
Policy Considerations, Easements in Gross
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We have profits in Gross as a precedent. Also, easements in gross are permissible in the U.S. If something
requires dominant and servient land, then easements are very much private property tools for private land
holding individuals.
BUT today there is less private property ownership today, and as a result it may be better to move from this
(up) paradigm, to something that involved public property or “common’ proerty”. The relationship does not
eliminate from 2 private property owners.
The Creation of an Easement: General Principles
Express Grant or Reservation
To establish an express Grant or Reservation: (Gypsum)
4. Was there an intention to make an easement? (did the parties intend these consequences?, what was the
easement meant to accomplish?)
5. To be an express easement the easement msut be sufficient to form the subject matter of a grant. Oral
agreement with reliance and part performance is sufficient to form an equitable easement (Hill v. AG of
NS), not a legal easement.
6. Clearly identify in the document the benefiting and serving lands, failure to mention the dominant
tenement is fatal to the easement.
Hill v AG of Nova Scotia (p 567) (will likely be on the exam, a conversation leading to an equitable easement)
Facts: The trans Canada Highway. Hwy goes through Hill’s farm land, but he could go across the high way.
NS wants to expand the highway and now he can’t get across any more. There were representations followed
by part performance, promising access, building and maintaining ramps.
Ratio: This is an enforceable agreement with regard to land not withstanding that it is a oral agreement,
because Hill is able to establish reliance, part performance, and Equity therefore supports him.
Implied Grant or Reservation: Necessity, Common Intention and Non-Derogation
See also the principle of non-derogation above. It is important to note that for all of these easements (up)
there must be some point (in the past or at present) when both pieces of land in question were owned by the
same person, other wise it would be a prescriptive easement (see below). The following are considerations
that the court will use when deciding if there is an implied easement: Necessity, Common intention, “The
doctrine in Wheeldon v. Burrows” (non-derogation).
An Easement of Necessity can be implied when a parcel of land is transferred that is completely land-locked, or
mostly land locked (Hirtle)
Hill v AG of Nova Scotia (p 567)
Facts: The trans Canada Highway. Hwy goes through Hill’s farm land, but he could go across the high way.
NS wants to expand the highway and now he can’t get across any more. There were representations followed
by part performance, promising access, building and maintaining ramps.
Ratio: This is an enforceable agreement with regard to land not withstanding that it is a oral agreement,
because Hill is able to establish reliance, part performance, and Equity therefore supports him.
Hirtle v. Ernst (1991, NS CA). pg 569
Facts: B, is land locked, only way is over A, or by a difficult access by water.
Issue: What can establish an implied easment of necessity?
Ratio: You must first establish that at some point the properties were both owned by the
same person. There is an easement because: public policy (see below), the policy of absolute necessity has
developed and can be relaxed, water access is not the same as land access especially when (as in this case)
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the water access is not a right.
Policy Considerations: land should be use-able, and not rendered useless. However courts are generally
cautions about finding an easement of necessity.
An Easement of Common Intention is when an easement is created by considering the purpose for which the
land ha been granted (Wong).
Wong v. Beaumont (1965 UK), pg. 572
Facts: The basement of a building is rented to someone who intends to establish a restaurant. He needs to run
a ventilation duct through the building to satisfy health codes.
Ratio: The building owner knew that the lessee intended to put in a restaurant when he signed the lease
Policy Considerations: is common intention any different from necessity? In some situations they are like each
other (as here), but there will be other situations where they are separate and independent.
The Principle of Wheeldon v. Burrows, is basically the principle of reciprocity (or non-derrogation, or common
intention)
BUT, with a mutual or reciprocal easement it creates implied easements in the context of the reciprocity that
normally arises in things like a mutual drive, where there are reciprocal easements on the part of the 2
property owners.
Common intention serves as an exception to the non-derogation rule in the case of a granted easement, with
respect to reservation (Sandem) the P must prove that there was no other possible intention.
Because of Barton there are other situations where equity recognizes something like a reciprocal easement .
Wheeldon v. Burrows (1872 UK) pg. 572
(Facts not given) Ratio: “A vendor who holds a parcel of land, and who uses a path across one section to gain
acces to another may create an implied easement at the time of transfer of one section to a purchaser. ”,
Principle of non-derogation, If I am selling and the purchaser would benefit form an easement over my land
and I don’t mention it, it continues to exist. (also see Principle of non-derogation above).
Sandom v. Webb, pg. 575
Facts: There is a sign on the outside of the building, rests partially on the leased property. After a while, the
tenant wants to get rid of the sign. The landlord claims an implied reservation.
Ratio: Unless you can show affirmative evidence, admitting no possibility of alternatives, no common
intention, and  no implied reservation. P must show that there was no other possible intention (extremely
high standard).
Barton v. Raine (1980 Ont. CA) pg. 573
Facts: Adjacent properties left to a brother and sister has a mutual driveway, subsequent owners dispute the
use of the mutual drive.
Isses: According to the principles of non-derogation and Wheeldon v. Burrows and Sandom the mutual drive
could be used by the dominant land, but not by the servient land, this seems unfair.
Ratio: This is a case of reciprocal easement. With necessity, and common intention you can establish an
implied reservation through equity.
Policy Considerations: The city has an interest in people parking their cars off of the street. (there are rules
against tearing down a garage).
POLICY QUESTIONS: Should we require an easement to an landlocked property over servient land with a
requirement that the parties determines where the easement be located and with payment worked out too. It
makes land more valuable, BUT this is happening with the objection of the subservient owner, and the desires
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of the owner and the owner’s capacity to exclude others is important. (Case of 3 cottage properties and rentin
the parking lot triangle)
The Scope of Easements
Intention can play a role in the scope of the easement. In Giecewicz v. Alexander the court held that the extent
of the easement can be ascertained by the wording of the instrument and circumstances existing at the time of
the grant. And that changes in circumstance may alter the justification for an easement.
Easements by Perscription
A prescriptive easement is created is created as a result of ‘length of user’ of servient land on the part of the
owner of the dominant tenement. If you have been using the easement for 40 years, and your way was
blocked, and you bring suit for prescriptive easement it is only the 20 years next before the bringing of the
action that is considered. The time that you examine is the time immediately before the action was brought.
(you have a 1 year grace period to bring your action).
Negative Easements: the Relationship Between Easements and Covenants
A negative easement is something that prevents you form doing something.
Phipps v Pears (1965 UK) pg. 580 (will probably be on the exam, policy issues)
Old
New
Facts: Building #16 was knocked down and rebuilt, The owners of #14 want to knock down
that building but if #14 is removed, #16 would be exposed to a frost problem. 16 claims a
negative easement, that has grown over time, of protection from the weather.
Ratio: There is no right to protection here, but you can acquire a negative easement though express grant
(covenant), and the covenant will be binding on subsequent purchasers with notice through equity.
Policy Considerations: A negative easement will have a greater impact on the land. A negative easement arises
without notice, there is no opportunity for the burden land to object. (There may be a difficulty in defining
the scope of the easement). The court does not like to impose rights without compensation.
Emond Tip: When asked to make a argument for something that is a big stretch use language such as: “it will
be extremely difficult, but there are some arguments, and an extremely innovative and creative court may be
receptive”
The Issue of Perspective Rights to Light and Air basically you have no property right to light, air, or a view.
Policy Considerations: The Rise of Contracts in Property Law: There are tensions in property law, the rights of
property owners to contract, (for whatever purpose they wish) versus a public policy concern that relates to
the free alienability of land, the potential for development. The more contracts there are the more restrictions
are placed on land. The cases that grapple with covenants deal with theses concerns.
Cases where this is picked up particularly: Re. Drummend Ren and Noble Wolfe and Alley the restrictive
covenants spoke to race and/or religion. An individuals right to contract was faced with public policy concerns
about the inappropriateness of discriminatory covenants, these were struck down by the common law, a
classic example of the clash. (not necessary to read these cases).
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Covenants there are 3 kinds of covenants:
1. Between two parties when they have privity of contract
2. Between two parties who have privity of estate (lessee and landlord with reversionary interest)
3. Between tow parties who do not have privity of contract or privity of estate
Terminology:
“A”, Covenantee: gets the benefit of the K,
“B”, Covenentor: gets the burden of the K,
When A sells to X
When B sells to Y
If the benefit runs then X can sue B
If the burden runs then A can sue Y
X is the assignee of A
Y is the assignee of B
If both the benefit and the burden run then X can enforce the burden against Y
20th March, 2009
Leasehold Covenants
In an agreement between landlord and tenant, the contract will contain a number of covenants. Because there
is privity of estate the covenants are enforceable to assignees so long as they ‘touch and concern’ the land.
That is they effect the landlord AS landlord and the tenant AS tenant. (Spencer’s Case, 1583 UK).
Tichborne v Weir (1892 UK), Squatters
Squatter takes possession against a lessee, the squatter is not an assignee of the lessee, and thus the landlord
could not enforce covenants against the squatter.
Freehold Covenants
The Benefit The rule at law is that the benefit will pass, there are 2 restirctions: (Smith and Snipers Hall Farm)
1. The coventee’s assignee must have a legal interest in the land
2. The covenenat msut touch and concern the land
Just because the land is increased in value does not necessarily touch and concern the land, although it can be
a consideration. When the covenant does not touch and concern the land, then you may be able to bring up
the question of easements.
Note there is no distinction between positive and negative covenants.
Smith and Snipers Hall farm Ltd. v. River Douglas Catchment Board (1949 UK)
Facts: The burden in this case was keeping the banks of the river in good repair, a positive covenant
Ratio: as above, benefit will pass (with 2 restrictions).
The Burden when considering policy to have a burden run is confusing and inconvenient. It would encumber
the land into the future. The burden of the covenant does not run at law (in the UK, Keppell, Austerburry in
Canada Parkinson).
Exceptions: To make the burden run at law: you could use:
1. A chain of personal contracts, (If the K between A and her assignee X contained mention of the
covenant, then B or assignee Y may be able to enforce the burden). But if someone goes bankrupt then
the chain breaks, and the burden does not run.
2. A rent charge
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Winter 2009
Joanna Nefs
3. If it is a reciprocal covenant (Halsall v Brizell, and Tito v Waddell) BUT this has been over turned in
Canada by Amberwood, and Reed Services in Australia
Keppell v. Bailey (1834 UK).
Facts: Made a covenant to transport all their lime stone with a specific railroad, sold their business
Ratio: The burden of a covenant does not run.
Parkinson v. Reid (1966 SCC)
Facts: Covenant between previous owners, to repair stairway, all sell new owners want new stairs.
Ratio: Positive covenants do not run with the land in Canada
Austerberry V. Corporation Of Oldham (1885 UK)
Facts: “Trustees” and Elliott have a covenant, ‘trustees’ will maintain road, they sell to the City of Oldham,
Elliott sells to Austerburry. Can Austerburry sue Olham
Ratio: The covenant is positive, but it is to repair the whole road, so it does not touch and concern the P’s land.
So the benefit might not run. At law the burden will not run.
Halsall v. Brizell (pg. 598)
Facts: Cvtr must maintain the road, Cvtee pays cvtr to maintain the road, assigned,
Ratio: You cannot take the benefit of a reciprocal covenant without paying your end of the burden
Tito v. Waddell (1977 UK)
Facts: a mining co. enters a K with a gov. to mine the property and then replant trees when the mining is done.
New company buys out the old co. and says that the burden doesn’t run They don’t have to plant trees
(relying on Asuterburry)
Ratio: Liability cannot be founded on K because there is no contract. Halsall applied reciprocal benefit
therefore burden runs. If you are relying on the benefit of the covenant then you must accept the burden.
Amberwood (pg. 601) – closes the door on reciprocal
Facts: Condo Corp pays developer to build a recreation centre, developer agrees to help pay for upkeep of rec.
centre. Developer bought out by Amberwood, does burden run in Canada?
Ratio: Burden does not run in Canada, Tito v. Waddell is no good.
Note: This (no reciprocal covenant thing) is also supported in Australia by Government Insurance Office v. K.A.
Reed Services Pty. Ltd.
To make the burden run in Equity:
The burden will run in equity, unless there is a bona fide purchaser without notice (Tulk v Moxhay).
The courts have, however, restricted this principle:
 The burden must be a negative consideration, (to not develop, Haywood v the Brunswick Permanent Benefit
Building Society, (1881 UK).
 A bona fide purchaser without notice will escape. (watch out for someone who got it as a gift, bound even
without notice)
 The covanantee must retain land benefited by the covenant (suit can’t be brought by a ‘home owner’s
association, re. British United Automobiles Ltd. and Volvo Canada Ltd.)
 The Covenant must touch and concern the land
 Must intend to bind assignees of the covenantor.
Tulk v. Moxhay (1848 UK).
Facts: Developer sells lots surrounding Lester Sq. enters a covenant not to develop Lester Sq. for the benefit
of the neighborhood to enjoy (and increase land values). Lester Sq. falls into disrepair, Developer’s assignee
Summary
Property Law
Winter 2009
Joanna Nefs
wants to develop Lester Sq.
Ratio: The burden does not run in law, there were no chains of personal Ks. The courts establish a new
equitable interest, “for if an equity is attached I the property by the owner, no one purchasing with notice of
that equity can stand in a different situation from the party from whom he purchased”. So the burden runs in
equity.
Policy Considerations: This gives business efficacy to long-standing agreements (pg. 606)
Law reform Commission Report: write a summary about this.
The running of the Benefit in Equity, for the benefit to run at equity, express or implied, or an express
assignment of the covenant. You must be very precise in the way in which you describe the benefited land
(beaver lumber, MacDonalds case). Be very clear as to the identification of the benefiting land. (Annexation is
just a form you fill out, don’t worry about it too much).
 Covenant must touch and concern the land
 The assignee must demonstrate entitlement to the benefit
 By showing express or implied that the covenant and the benefit of the covenant has been annexed to
the land
 Express: in words in the covenant
 Implied pg. 612 “although there have been cases in England ….these principles have tended to be
less accepted in Canada as a result of…” So really this isn’t an issue, usually they say there wasn’t
enough speficity. (courts don’t like implying annexation).
 If the covenant has been expressly assigned form the cvntee to the assignee of the cvntee.
Summary of Covenants:
The covenant will run when there is privity of contract
The covenant will run when there is privity of estate if the covenant “touches and concerns the land”
 remember that a sub-lessee is not an assignee, the benefit or the burden remains with the lessee.
 re. squatters, the squatter is not an assignee (Tichborne v Weir)
When do Covenants Run When there is No Privity of K or Estate?
Relationship Benefit Runs?
Burden Runs?
In Law
Yes (Smith and Snipers Hall Farm) when the
No (Keppell, and Amberwood), but chain of
interest of the assignee is legal and the benefit
contracts, rent charge, easement are
touch and concern the land.
alternatives to covenants.
In Equity
Yes:
Yes :
1. if the nature of the interest is equitable, or
with conditions (Tulk v. Moxhay) , must be a
2. If you are relying on equity for the purposes
negative burden, must have notice, etc.
of the running of the burden.
AND there is express/implied annexation.
Policy Consideration: Why would equity be harder to achieve re. the running of the benefit? (we don’t know it
doesn’t make sense) this would be a strong case for reforming the law of covenants.
Summary
Property Law
Winter 2009
25th March, 2009 – Review Day
Chapert 7,
Joint tenenacies, Tenancies in common
4 Unities of joint tenancies.
There is an Exception
(no tenancies by entioreties, no co-parosnary)
petkuss v becker  Today. And the evolution of property stuff, for a co-habiting couple
Chapter 8
Reform change, brief (3 pages)
3 challenges,
- native Title, (look at it wholisticly)
- consitutional entrenchment of proerty right
- property law reform.
Joanna Nefs
Summary
Property Law
Winter 2009
Joanna Nefs
Dictionary of Property Law Terms
Grants inter vivos: conveyances or transfers between live persons or corporations: generally take effect at
date of transfer (now also subject to registration statutes).
Devises (testamentary = by will): transfers take effect on death
Pur Autre Vie – when the life estate is created to last for the life of someone other than the recipient
word of purchase: a word in a deed or will that shows who is to receive the estate
word of limitation: word in a deed or will esp. following the name of an intended grantee or devisee that
serves to describe the nature or extent of the estate granted or devised
Equitable Interest, and Unjust Enrichment
The courts may also compensate one party for improvements to land made under mistake through the
imposition of a constructive trust or by awarding damages for unjust enrichment. If there is more than one
equitable interest in the property the interest that was acquired first will prevail, unless there is an honest third
party who has paid value and has no notice of the pre-existing equitable interest.
Garvey v. Garvey Estate (1987), [1988] 2 W.W.R. 195 (Sask. Q.B.) (wife of deceased improving land and
trailer in belief deceased sole owner; deceased in fact holding land and trailer as joint tenant with
defendant; on deceased's death, land and trailer impressed with constructive trust in favour of wife for
value of improvements);
In order to obtain equitable relief on the basis of unjust enrichment, the applicant must prove that the
respondent was enriched; that the applicant was correspondingly deprived; and that there was no juristic
reason for the enrichment.
Notice of Equitable Interests in Land
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Property Law
Winter 2009
Joanna Nefs
Table of Cases
Case
Ch. Topic
Ackroyd v. Smith
Amberwood
Armorie v. Delamirie
Asher v Whitlock
6
6
2
2
Easements, dominant tenement
Freehold Cov.'s, burden in law
Finders
Posession
Austerberry v Corp. of Oldham
Barton v Raine
bata v City Parking Canada
Beaudoin v Aubin
Beaver Lumber
Birch island Estates
Bridges v. Hawkesworth
Brumagin v. Bradshaw
Calder v. AG of BC
Campbell v BC
Caratun v Caratun
Clarke v Clarke
Clavering v. Ellison
Cocherane v. Moore
Cook v. Johnson
Corless v Corless
Delgamuukw et. al. v. BC
Delgamuukw et. al. v. BC
Depew v Wilkes
Ellenborough Park
Erington v Erington
Fairweather v. Maryebone
Giecewicz v. Alexander
Guerin v. The Queen
Gypsum Carrier v. The Queen
Halsall v Brizell
Heffron v. Imperial Parking
Hill v AG of Nova Scotia
Hill v AG of Nova Scotia
Hill v Tupper
Hirtle v. Ernst
Horne v Horne
Hussy v Palmer
Irons v. Smallpeice
Jengle v. keetch
John E. Dodge Holdings Ltd. v 805062 Ont.
Keast v Keast
Keefer v Arllotta
Kelley Douglas v Highway Proerties
Keppell v Bailey
Knowlton v Bartlett
Knowlton v Bartlett
6
6
4
2
6
6
2
2
Freehold Cov.'s, burden in law
Easements, wheeldon and B.
Bailment vs, Licenses
Element of Intention
Freehold Cov.'s benefit in equ.
Easements, accommodate dom.
Finders
Adverse Posession
Common Law Ab. Title
Aboriginal right to self gov.
Property and Divorce
Property and Divorce
Interpretation, and uses
Delivery
Termination of Concurrent Inter.
Property and Divorce
Interpretation, and uses
Aboriginal Title
Easements, accommodate dom.
Easments, subj. matter of grant
Commercial leases & licences
Limitation Period and Lease hold
Scope of easements
Resulting Trusts
Qualification for Easements
Freehold Cov.'s, burden in law
Bailment vs, Licenses
Easments, express grant
Easments, Implied grant
Easements, dominant tenement
Easments, Implied grant
Severance of Joint Tenancy
Unjust Enrichment
Delivery
Easements, accommodate dom.
Uniqueness of land
Property and Divorce
Element of Intention
Equitable interests in land
Freehold Cov.'s, burden in law
Severance of Joint Tenancy
Termination of Concurrent Inter.
A
A
7
7
3
5
7
7
3
A
6
6
4
2
5
3
6
6
4
6
6
6
6
7
5
5
6
5
7
2
5
6
7
7
Summary
Property Law
Winter 2009
Leichner v Can
Leroy Little Bear
Linton v Linton
Lysaght v. Edwards
MacDonalds
MacLean v. Reid
Masidon v. Ham
Mason v Clarke
McEwan v Ewars
Metro-matic Services Ltd. v. Hulmann
Milroy v. Lord
Minichiello v Devonshire Hotel
Moore v. Royal Trust
Murdoch v Murdoch
Pacific Wash-A-matic v. RO Booth Holdings
Paradise Beach v. Price-Robinson
Parker v. British Airways
Parkinson v Reid
Perry v Clissold
Phipps v Pears
Pierson v. Post
Piper v Stephenson
Prefor v Rogers
R. v Guerin
Re. Britih American Oil and Depass
Re. Cole
Re. Ellenborough Park
re. Essex Roman Catholic School Board
Re. McColgan
Re. McColgan
Re. McLean
Re. O’Reilly
Re. Waters
Re. Waters
Rylands v. Fletcher
Sandom v. Webb
Savoy Jewelers
Selmelhago v. Paramadevan
Shelf Holdings Ltd. v. Husky Oild Operation
Shelley's Case
Silva v Silva
Smith and Snipers Hall Farm v. River Douglas Catchment
Board
Spencer's Case
St. Clair Beaches v Macdonald
Taylor v. Rawana
Tichborne v. Weir
Tito v Waddell
Tulk v Moxhay
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1
7
5
6
2
2
6
7
4
5
4
3
7
4
2
2
6
2
6
2
2
3
4
5
6
3
3
3
3
2
3
3
1
6
4
5
6
3
7
Element of Intention
Concepts
Property and Divorce
Equitable interests in land
Freehold Cov.'s benefit in equ.
Tenancy at Will
Element of Intention
Profit a Prendre
Joint tenancy 4 unities
Commercial leases & licences
Gifts
Bailment vs, Licenses
Interpretation of wills
Property and Divorce
Commercial leases & licences
Posesory Claims among co-owners
Finders
Freehold Cov.'s, burden in law
Posession
Negative easements
Posession
Adverse Posession
Statute of uses
Common Law Ab. Title
Commercial leases & licences
Symbolic Delivery
Easements, dominant tenement
Fee Simple Estates
Interpretation of wills
License vs. Life Estate in a will
Interpretation of wills
Posessory Claims among co-owners
Interpretation of wills
License vs. Life Estate in a will
Non-Natural Use of Land
Easements, wheeldon and B.
Assignment and sub-bailment
Equitable land, specific perf.
Easments, subj. matter of grant
Interpretation of wills
Termination of Concurrent Inter.
6
6
2
5
6
6
6
Freehold Cov.'s, benefit in law
Leasehold covenants
Adverse Posession
Statute of Frauds
Leasehold covenants
Freehold Cov.'s, burden in law
Freehold Cov.'s burden in equ.
A
Summary
Property Law
Winter 2009
United Seeel Workers v. US Steel Corp
Victoria Park v. Taylor
Walsh v. Lonsdale
Weibe v Levy
Wheeldon v. Burrows
Wilks; Child v. Blumer
Willaims v Hensman
Wong v. Beaumont
Woodsworth v Woodsworth
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1
5
4
6
7
7
6
7
`
Concepts
Equitable land, specific perf.
Bailment and Employment
Easements, wheeldon and B.
Severance of Joint Tenancy
Severance of Joint Tenancy
Easment of common intention
Property and Divorce
Table of Legislation
Legislation
Abolition Act
Conveyance & law of Ppty Act
Imperial consitituion Act
Land Titles Act
Ontario Family Law Act
Ontario Limitations Act
Partition Act
Property and Civil Rights Act
Registry Act
Statute of Anne
Statute of Uses
Statute Qua Emptores
Sucession law reform Act
Tenant Protection Act
Ch
3
7
3
2
7
2
7
3
2
7
3
3
3
4
Topic
Feudal tenure
Joint Tenancies, 4 unities
Feudal tenure
Adverse posession
Property and Divorce
Adverse posession
Termination of Concurrent interests
Feudal tenure
Adverse posession
Rights and Obligations of Co-owners
History of Equitable Estates
Feudal tenure
Fee Simple Estate
Residentioal Leaseholds