6. EQUITY/TRUSTSResulting Trusts (requires transfer of property)

1. Beneficial entitlement not fully transferred: “Once a trustee, always a trustee”o “to A in fee simple and in trust to B for life”

B’s equitable interest reverts back to grantor; B holds reversionary equitable interest, A holds legal

2. Gratuitous transfer or gift: equity presumes bargains, not giftso Oren gifts title to Nick Nick holds legal title in trust for Oren

Rebuttable presumption: show that grantor intended to gift both legal + equitable interesto Presumption of advancement: presume beneficial interest transferred if parent child or spouse

spouseo Pecore v Pecore: evidence showing father intended to give beneficial interest/right of survivorship

Common intention: usually implicit agreement b/w spouseso E.g. 1 party not on title has contributed to acquisition, preservation, enhancement of property

Pecore v Pecore (no resulting trust) —Presumption of resulting trust for gratuitous transfers. Presumption of advancement only parents minor children. F: Father/daughter joint account; father pays all the tax on accounts and controls them. Father writes letter to bank

saying that he was “100% owner of the assets and the funds are not being gifted to Paula”. Paula is poor and married; father leaves most of estate to her, residue split b/w daughter and son-in-law. Daughter divorces, son in law [paralyzed/care facility/remarries] claims half of joint accounts, arguing that they are residue of father’s estate/resulting trust; daughter argues right of survivorship.

I: resulting trust, i.e. daughter holds legal in trust for father’s estate? Or intention to gift both to her/right of survivorship?

A (Rothstein): decides no presumption of advancement for parents adult children, or to adult dependent childreno Evidence to rebut presumption of resulting trust (intention to gift over right of survivorship):

Large residue in estate; if intended to distribute through estate, would have told his lawyer Said “not being gifted” to bank only to avoid capital gains tax Witnesses testify that father was concerned about Paula’s financial well-being

Constructive Trusts Imposed regardless of intention; no transfer of property needed 1. Institutional: usually imposed b/c of misbehaviour by trustee (equity = good conscience of CL)

o Soulos v Korkontzilas: after contract but before closing, realtor holds in constructive trust

2. Remedial: remedy for unjust enrichment, particularly family lawo Murdoch v Murdoch (1973): material contribution to acquisition, but no common intention no

resulting trust Laskin J dissent : unjust enrichment, should impose constructive trust

o Rathwell v Rathwell (1978): material contribution to acquisition; common intention resulting trust Minority : pick up Laskin J’s dissent, would have imposed remedial constructive trust:

(1) Enrichment; (2) corresponding deprivation; (3) No juristic reason for enrichment

o Family Relations Act (1979): each entitled to undivided half interest (tenants in common) in family assets

Family Law Act (2011): split evenly in any “marriage-like relationship”; undivided half interest as tenants in common; responsible for family debt (s 81)

Therefore, small window where CL cases might still apply: for non-marriage like relationships

o Petkus v Becker: extend remedial constructive trust for (1) UE; (2) CL spouses* (cite this case) (No common intention, but remedial constructive trust)

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o Sorochan v Sorochan (1986): no material contribution to acquisition; contribute to farm labour; CL spouses remedial constructive trust

o Peter v Beblow (1993): domestic work alone sufficient grounds for remedial constructive trust

Kerr v Baranow ; Vanesse v Seguin (remedial constructive trust) —If show (1) joint family venture, (2) contributed to accumulation of wealth entitled to monetary award proportionate to contributions (not quantum meruit); —If show (1) joint family venture, (2) contributed to accumulation of wealth; (3) AND monetary damages insufficient entitled to remedial constructive trust proportionate to contributions L (Cromwell): unjust enrichment should be flexible to correspond to needs of society; unmarried domestic

partnershipso No more common intention resulting trusts (unsound; artificial intention; misread HL; other remedies are

better)o UE : (1) Enrichment (2) corresponding deprivation (3) no juristic reason for enrichment

(3): e.g. intention to make a gift; contract; if outside established categories, may consider legitimate expectations of the parties, moral and policy-based arguments whether enrichment was unjust

o Joint family venture : Q of fact: (1) Mutual effort: “pooling of effort”; decision to have children; length of relationship; stay at home

parents (2) Economic integration: if purposefully kept separate, may infer intent to not have joint family

venture (3) Actual intent: considerable weight; look at economic integration, may be implicit (4) Priority of the family: detrimental reliance by disadvantaged party

o Monetary award insufficient : probability of recovery, or any other reasono Mutual benefit conferral : evidence of juristic reason for enrichment; otherwise, consider at defence & remedy

stage (i.e. P’s award = less $ equal to D’s contribution) A: Vanesse: stay at home mom, Ottawa-Halifax-Ottawa; “Mr Seguin could not have made the efforts he did to build up

the company but for Ms Vanesse’s assumption of these [household and child-rearing] responsibilities” (507).o Trial didn’t consider 4 considerations per se, but wife would have successfully made out claim

Kerr : CL spouses, wife injured, husband divorces and send her to a homeo No analysis of joint family venture at trial new trial

Soulos v Korkonztilas (institutional constructive trust) —Constructive trust based on FD: 4 conditions F: Realtor K for S. S makes offer, vendor responds with higher counter offer. K never informs S, K’s wife purchases

property and names K as joint tenant. Property declined in value; S has not suffered any financial detriment. Claims constructive trust (not UE)

I: can constructive trust be used as remedy where D has not been unjustly enriched per se to the detriment of P? A (McLachlin): basis of constructive trusts in equity: equity = conscience of CL, aims to remedy wrongful conduct.

Ensure good conscience of the Crown upheld. Discretionary remedy may impose for UE or wrongful conducto Realtors have duty of loyalty to clients; K breached that dutyo 4 conditions:

1. D must be under equitable obligation in relation to activities giving rise assets in their hands2. Assets in D’s hands must have resulted from D’s breached FD3. P must show legitimate reason for seeking proprietary remedy (rather than specific performance)4. No factors that would render imposition of constructive trust unjust in all the circumstances

8. LEASES

Nature of a LeaseGeneral characteristics

Combo of property + contracto “chattels-real”o Property interest = exclusive possession for a defined term

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Presupposes a larger estate: nemo dat quad non habeto Leases always carved out of larger estate

Usually a freehold estate But can come out of longer/larger leasehold estate

o Property interest that runs with the land (binds subsequent owners)4 types of leases:

1. Fixed term: e.g. 10 yearso Maximum length must be certain

2. Periodic: month to montho Continues until terminated

3. Tenancy at will: no set periodo Terminated by either landlord or tenant

4. Tenancy at sufferance: when tenant overholds after expiration Perpetual lease : may only be granted by statute

Essential elements of a lease: Property + parties/persons Starting date + maximum duration

o Must be ascertainable (fixed term) Demise (grant of the leasehold interest) Price NOT essential

o Lease may be given as a gift

Privity of Contract + Privity of Estate Privity of estate : refers to the legal relationship that 2 parties bear when their estates constitute 1 estate in law

o Landlord may enforce conditions that fall within privity of estate; things that pertain to property interest Shows “property-ness” of the lease: runs with land

o Conditions and obligations travel even thought no privity of K Assignment of a lease: privity of estate b/w tenant 2 + landlord

o Privity of estate defines limits of what tenant 2 may do to the property, b/c no privity of K Sublet : privity of K AND privity of estate b/w tenant + sub tenant; also both b/w tenant and landlord

o NO privity of K or privity of estate b/w subtenant and landlord If landlord unhappy, must go through tenant

Factac Ltd v Commissioner of Inland Revenue (license) —Test for lease = exclusive possession: look at substantive rights; requires defined term; may not be terminated by external relationship F: Owner of land grants right to operate quarry to Atlas. Landlord retained general right of access; Atlas only had right

to quarry basalt, not other materials; landlord had right to stockpile and remove all material other than basalt; Atlas had right to only small area relative to the whole, as result of distribution of basalt. Original agreement contained the word “license”.

I: lease or license? Proper test for lease? L: lease/tenancy = exclusive possession for defined period; license = temporary defence to trespass

o Go back to looking at substantive rights, NOT intentiono Exclusive possession limitations and requirements:

Defined term is necessary (not terminable at will of landlord) Rent may be indicative of intent to be bound, but not dispositive Limitations on use do NOT negate

o Where tenancy CANNOT be found: If landlord precluded by statute Landlord’s right to re-entry inconsistent with exclusive possession If exclusive possession may be terminated by relationship extraneous to landlord/tenant:

Employment relationship; purchaser in occupation; mortgagee in possession; occupation pursuant to holding an office; exclusive possession of small area relative to entire contracted property

A: landlord retains general right of access; restricted use (only basalt); resultant access to small area of property license

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Metro-Matic Services v Hulman (lease vs license) F: agreement for laundry services in apartment building. Supporting lease:

o Defined 5 year term; rent; called a “lease”; only lessee could operate laundry in said property; quiet enjoyment; not terminable by external relationship

Supporting license:o All tenants + landlord have access to said property; only authorized employees at reasonable times have access

for laundry purposes; limitation on use; no subletting allowed

Obligations of Landlord/Tenants

Southwark London Borough Council v Tanner (quiet enjoyment) —Quiet enjoyment = right to use without substantial interference by landlord or anyone claiming under them; not against noise. Breach of right to quiet enjoyment requires something not in parties’ contemplation at time of lease. F: tenants hear everything in unit above them: walking, yelling, cooking, sex, etc. Bring claim for breach of right to quiet

enjoyment; alternatively, claim in nuisance. L: Jenkins v Jackson: “quiet” = without interference—without interruption of possession

o Kenny v Preen: “enjoy” exercise and use the right and having its full benefit, NOT “deriving pleasure” from it A: (1) Contract principles: landlord gives no implied warranty as to condition of premises; absurd to make landlords

liable for noise disturbances; would be expensive, and social housing is legislative decision, not judicialo (2) Construe lease against known background facts: tenant can’t complain about presence of neighbouring

tenants, thus only complaint goes to lack of soundproofing; this is “inherent structural defect for which landlord assumed no responsibility”; thus no breach of right to quiet enjoyment,

Pellatt v Monarch Investments: law student granted relief for breach of quiet enjoyment when landlord renovated kitchens in all units, provided notice, and provided external study space away from noise; because it was a physical intrusion

Curtis Investments v Anderson: require consent or active participation of landlord to find breach of covenant

Petra Investments v Jeffrey Rogers (derogation from grant) —Derogation test = whether landlord’s action makes premises “unfit or materially less fit to be used for the particular purpose for which the demise was made” F: J has 25 year lease from P in mall catering to women’s fashion. Business not going well, P brings Virgin megastore

“magnet”. During construction, J’s business suffered, so P offered ‘service charge holiday’ in return for J not taking any legal action. After Virgin store opened, business still bad, J stops paying rent. P sues, J claims derogation. No explicit term or agreement that mall confined to women’s clothing; clause allows for works as long as disturbance minimized.

A: Chartered Trust v Davies: derogation where landlord leased to pawnshop and failed to control the effect of the pawnshop on business; rental per se not in derogation rental to Virgin per se not in derogation

o Could perhaps claim derogation if landlord altered such that premises ceased to be a retail shopping mallo Landlord not legally responsible for consequences of poor commercial judgment in letting Virgin in

“Lease into which J entered left the landlords free to make such commercial judgments”

10. TITLE REGISTRATION

IntroLevmore: “Variety and Uniformity in the Treatment of Good-Faith Purchaser”

Thief (T), Owner (O) and Buyer (B): different systems will allocate risks differently to incentivize different partieso Because “B and O are vital links in nabbing the thief” (899): O must ID his property and describe thief, B

should notice shady behaviour and allow his new property to be inspectedo “Some legal systems may always allow the owner’s claim to prevail, while others may do the opposite and

look to owners to take better precautions against thieves” (900)

Youdan, “Length of Title Search in Ontario” Before registration, required abstract going back 60 years to prove good title; incumbent on purchaser/buyer

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o Still didn’t affect ability of 3rd parties wrongly deprived to claim outstanding legal interest (not indefeasible)

Harris, review of The Law of the Land Registration changes deed system: owners no longer protected

o “Title registration guarantees that the person registered as the holder of title is the title holder” (925)o “Title registration draws a curtain between the registry and all prior transactions” (925)

As a result, not just a repository of instruments, it is a “mirror that reflects existing state of title” (925)

Van. Island first adopted; waited 5 years to institute indefeasible title (to allow outstanding claims)o Spreads across Canada, but Quebec doesn’t like anglo law; Maritimes have old system, and solicitors resist

Canada more receptive to state regulation of land title than US, where deed insurance used

Allocation of Risk Q = where does law allocated risk if there is a defective transfer, and there is competing claims to the same

interest?o Registration shifts risk and promotes economic transactions

CL puts risk on purchaser or buyer:o Nemo dat quad non habet: no one can give that which they do not owno Ceveat Emptor: buyer beware

Static security: title is protected; only title holder can transfer the interest o Risk allocated to purchaser (CL deeds)

Dynamic security: purchaser/buyer is protected over holder of the interesto Redistribute risk so not all on purchaser; transaction is protected

Property justification: economic efficiency, land as commodity rather than sociological Denning: “In the development of our law, two principles have striven for mastery. The first is for the protection of property: no

one can give a better title that [s/he] … possesses. The second is for the protection of commercial transactions: the person who takes in good faith and for value without notice should get a good title. The first principle has held sway for a long time, but it has been modified by the common law itself and by statute so as to meet the needs of out own times.”

Common Law Priorities1. Prior equitable subsequent equitable : first in time is first in right or nemo dat

a. Rice v Rice: “In a contest b/w persons having only equitable interests, priority of time is the ground of preference last resorted to; i.e. that a Court of Equity will not prefer the one to the other, on the mere ground of priority of time, until it finds upon an examination of their relative merits that there is no other sufficient ground of preference between them, or, in other words, that their equities are in all other respects equal”

2. Prior legal subsequent legal : first in time is first in right or nemo dat

3. Prior legal subsequent equitable : first in time is first in right or nemo data. UNLESS, holder of legal interest induces holder of equitable interest to believe they were acquiring

something that they weren’ti. Northern Counties of England v Whipp: could postpone prior legal interest to subsequent

equitable interest (here, two mortgages) IF holder of prior legal interest committed fraud or induced subsequent equitable interest holder to lend the money/acquire the equitable interest

4. Prior equitable subsequent legal : bona fide purchaser for valuable consideration without notice of prior equitable interest?

a. If yes, subsequent legal > prior equitable; if notice or mala fide/bad faith, prior equitable > subsequent legal

Overview: 4 Principles in the LTALand Title Act, RSBC 1996, c 250

Registration principle: s 20(1)—nothing happens until instrument registeredo “Except as against the person making it, an instrument purporting to transfer, charge, deal with or affect

land or an estate or interest in land does not operate to pass an estate or interest, either at law or in equity, in the land unless the instrument is registered in compliance with this Act.”

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Fee simple = Form A, signed by transferor Charge/mortgage = Form B, signed by mortgagor/borrower

Indefeasibility principle: s 23(2)—conclusive evidence at law and equity for a fee simpleo “An indefeasible title, as long as it remains in force and uncancelled, is conclusive evidence at law and in

equity, as against the Crown and all other persons, that the person named in the title as registered owner is indefeasibly entitled to an estate in fee simple to the land described in the indefeasible title, subject to the following…”

Subject to exception, namely (2)(i): right of a person to show fraud in which registered owner participated

o Lawrence v Wright: Ontario has deferred indefeasibility (encourage purchasers due diligence; banks more able)

o Harris, “Indefeasible title in BC”: 23(2) + 25.1(2) = immediate indefeasibility (irrebuttable presumption?)

Abolition of notice principle: s 29(2)—if purchaser knows about prior unregistered interests, doesn’t mattero “Except in the case of fraud in which he or she has participated, a person contracting or dealing with or

taking or proposing to take from a registered owner(a) a transfer of land, or(b) a charge on land, or a transfer or assignment or subcharge of the charge,is not, despite a rule of law or equity to the contrary, affected by a notice, express, implied, or

constructive, of an unregistered interest affecting the land or charge …” BUT, fraud is undefined (see Jager the Cleaner; Woodwest; Szabo; Holt Renfrew; McCulloch)

Assurance principle: s 296(2)—if deprived, b/c of registrar, could have recovered at CL, fraud $o A person, in this Part referred to as the "claimant",

(a) (1) who is deprived of any estate or interest in land (i) (2) because of the conclusiveness of the register, in circumstances where, if this Act had not been passed, the claimant (3) would have been entitled to recover the land from the present owner, and(ii) (4) in consequence of fraud or a wrongful act in respect of the registration of a person

other than the claimant as owner of the land and (5) is barred from bringing an action [25(2] … may proceed in court for recovery of damages against person by whose fraud or wrongful act claimant has been deprived of the land

Immediate vs Deferred Indefeasibility, AKA Title Registration & Fraud

s 20: transfer instrument does nothing until registered s 23(2): once registered, indefeasible/conclusive evidence (subject to 2(i): show fraud by title holder) s 25.1(2): immediate indefeasibility (i.e., even if void instrument, bona fide purchaser for $ gets title) s 296(2): if claimant (1) deprived of interest (2) b/e of registrar (3) could have recovered at CL (4) consequence of

fraud, (5) barred form bringing action under 25(2)o When would a purchaser NOT be able to recover at CL?

Prior legal/subsequent equitable where prior legal induced holder of equitable interest to acquire (Northern Counties of England v Whipp—mortgages)

Prior equitable subsequent legal where subsequent legal holder had notice

Lawrence v Wright —Policy reasons for deferred indefeasibility = encourage due diligence by purchasers, more equitable to restore interest back to original owner (e.g. house) and compensate party who acquired from rogue with damages. Multiple interpretations possible (indefeasibility of a mortgage) F: L = original owner, W fraudulently gets on title. Mortgages (transfer legal) to Maple Trust; MT registers charge

against fee simple. MT bona fide purchaser for value without notice. L wants land back. I: does MT, who acquired title from rogue, hold indefeasible title? A:

o L : argues CL registry principle/nemo dat—W never had title, so couldn’t transfer to MT. L retains title.

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o MT : argues immediate indefeasibility based on s 78(4), which provides an instrument upon registration is deemed to “be effective according to its nature and intent, and to create, transfer, charge or discharge…the land or estate or interest therein”

o Ontario (AG) : argues deferred indefeasibility based s 155 + s 68. s 155 says “subject to this act…any disposition of land or of a charge on land that, if unregistered, would be fraudulent and void is, despite registration, fraudulent and void in like manner” [deferred indefeasibility]. BUT, “subject to this act” means that this provision could be altered by others.

s 68(1): only registered owner may dispose of interest in land Since L never transferred to MT, MT’s claim isn’t valid

o Both interpretations are possible, but Policy: Better to compensate homeowners by returning land, and mortgagees with damages; and

original owner has no opportunity to discover fraud, but purchaser should be vigilant deferred indefeasibility.

o (“As Wright obtained title by means of a fraudulent transfer, it was void. As the transfer was void, it was of no effect and Wright never became the registered owner. Section 68(1) of the Act provides that only the registered owner may dispose of an interest in land. MT never took from the registered owner and therefore cannot rely on 78(4) vis-à-vis L, the true owner. However, MT was a bona fide purchaser for value without notice. It registered its charge. The fact of registration enabled MT to pass a valid title to a third party, so long as the third party is also a bona fide purchaser for value without notice. This third party (the deferred owner) relies on both ss 68(1) and 78(4). Unlike W, MT did not take by way of fraud so it is a registered owner for the purposes of 68(1). And, the deferred owner is, therefore entitled to rely on the charge pursuant to 78(4). On this view, all of ss 68(1), 78(4), and 155 are given effect” [933])

Harris, “Indefeasible Title in British Columbia” Indefeasibility protects registered owner at expense of person wrongfully deprived of land

o Prefer sanctity of transaction over settled property interestso Compensation rather than rectification must suffice

November 2005 amendments:o Eliminate s 297(3), which provided that person taking under void instrument acquires no interest

(deferred)o Add s 23(2)(i), which creates indefeasible title subject only to fraud by person on title

25.1(2): Even though instrument is void, purchaser of fee simple that is bona fide and for value is deemed to have acquired the estate

Immediate indefeasibility Conclusion: immediate indefeasibility with possibility of person wrongfully deprived rebutting the presumption in

25.1(2)o Harris: reallocates risk rather than increasing security

Increase in security for purchasers (25.1(2)), loss of security for owners deprived by fraud (impossibility of rebutting 25.1(2) presumption)

Charges Charges are treated differently in the LTA than fee simple interests. Unlike the fee simple interest, holders of

registered charges are only “deemed” to be entitled to that charge (s 26), subject to the owner of the fee simple demonstrating fraud in the instrument that granted the mortgage/charge in the first place (Credit Foncier). In contrast, registered fee simple title is “conclusive evidence in law and equity” of the indefeasibility of that title. Thus it is not rebuttable as the charge is under s 26. Moreover, s 25.1(1) preserves the nemo dat rule for charges. That is, a charge is not effectively transferred if it is based on a void instrument or if the registered owner of the underlying fee simple does not in fact hold indefeasible title (Gill v Bucholtz). This stands in contrast again to the fee simple interest, which is still held to be valid under s 25.1(2) if transferred on a void instrument: even though an instrument purporting to transfer a fee simple estate is void, as long as the purchaser is named in the instrument and is a bona fide purchaser for value without notice, they are “deemed” to have acquired that fee simple estate.

o Credit Foncier: rebut s 26 presumption b/c fraud at root of titleo Canadian Commercial Bank: can’t rebut s 26 presumption b/c no fraud at root of title (distinguish CF)o Gill v Bucholtz: 25.1 preserves nemo dat for charges (based on non-indefeasible underlying fee simple)

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CF + G v B: if mortgage based on fraudulent instrument, OR fraudulent underlying fee simple void

Bring in s 25.1(2): different for fee simple; if acquired through void instrument, still fine as long as no fraud; 23(2)(i) only way to rebut registered fee simple is showing fraud

s 23(2) indefeasibility: conclusive evidence in law and equity applies only to fee simple, not charges s 25.1(1): nemo dat—can’t acquire interest in land based on void instrument

o For chages, nemo dat still applieso (25.1(2) says that for fee simple, still “deemed” to have acquired even if void instrument, as long as bona

fide purchaser for value without notice) s 26: registered owner of charge is “deemed to be entitled”; not conclusive evidence at law and equity (s 23 for fee

simple)o s 27: take charge subject to existing equities and states of accounts b/w mortgagor & mortgagee, vendor &

purchaser

Credit Foncier v Bennett —Mortgages acquired through fraudulent instrument are void; if root of registered charge is void, all subsequent transfers of that charge are also void. F: Bennets hold registered fee simple. Allen forged mortgage to Todd investments, registered. Todd assigns mortgage

to Stuart, registered. Stuart assigned mortgage to Credit Foncier, registered. Bennets make no payments. Credit Foncier begins foreclosure proceedings. Bennets seek to clear title.

I: what does it mean to be “deemed to be entitled” to the charge on the land? A: Registered fee simple interests are “conclusive evidence” at law and equity of indefeasible title (23(2)); holders of

registered charges “shall be deemed” to hold that charge (26(1)). o “The omission of ‘conclusive’ from [s 26(1)/charges section], together with the use of the word ‘deemed’,

which is capable of meaning ‘rebuttably presumed’ implies that the legislature intended such an omission to be observed by assigning a meaning not ‘conclusive’ and raising only a rebuttable presumption”.

To rebut: show fraud or forgery anywhere along the line of title/assignments (here, was at root)

Canadian Commercial Bank v Island Realty —Mortgagees entitled to rely on land registry; as long as root of registered charge is valid, charge/mortgage is valid. —If mortgage fraudulently discharged in line of mortgages, mortgagee fraudulently deprived of their interest has claim against rogue or assurance fund; next in line is entitled to rely on registry. F: Park Meadows has fee simple. 1st mortgage to Imperial life; registered. 2nd mortgage to Island Realty; registered. 3rd

mortgage to Almont; registered. Park Meadows forges discharge of 2nd mortgage by Island Realty (“paid off”). Thus Almost assumes 2nd position, advances loan to Park Meadows. Park Meadows files for bankruptcy; not enough money to pay out 2nd and 3rd mortgagees.

I: Who gets priority in line of mortgages, Island Realty (original) or Almont? A: distinguish Credit Foncier because there, root of mortgage charge was void. Here, Almont acquired mortgage on valid

instrument. Entitled to rely on registry. A takes priority over IR; IR has claim against fund or rogue.

Gill v Bucholtz —Mortgages acquired based on non-indefeasible/fraudulent underlying fee simple are void. F: Fraudulent transfer of fee simple by rogue to rogue. Rogue, on title, transfers mortgages to secure loans; innocent

mortgagees/lenders. Mortgagees hold title insurance (can recover either way). Original owner seeks to restore title unencumbered by mortgages.

I: are the mortgages valid, though based on defeasible fee simple? A:

o If valid mortgages owner has claim against assurance fund (1) Deprived of interest in land; (2) b/c of conclusiveness of registrar (s 26?); (3) could have

recovered at CL [prior legal > subsequent legal]; (4) consequence of fraud; (5) barred from bringing a claim

o If invalid mortgages mortgagees can’t recover from assurance fund (1) Deprived of interest in land; (2) b/c of conclusiveness of registrar (25.1(1)?); (3) could have

recovered at CL NO [subsequent legal < prior legal]o “The Act preserves the nemo dat rule with respect to charges – even where the holder has relied on the

register and dealt bona fide with a non-fictitious registered owner. The mortgagees in this case did not acquire

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any estate or interest in Lot 4 on registration of their instruments because having been granted by a person who had no interest to give, those instruments were void, both at common law and under s. 25.1(1).” (para 26)

o “It may be that in a perfect Torrens system, any person lending money bona fide on the security of a mortgage granted by the registered owner, would have a valid charge. But there are sound policy arguments on both sides of the question. The Legislature of British Columbia would appear to have adopted the policy that the cost of frauds perpetrated against mortgagees and other chargeholders should be borne not by the public (as the funders of the Assurance Fund) but by lenders and other chargeholders themselves. Whether this policy choice is a good one or not is not for us to decide. We must give effect to the language of the statute in its ordinary and grammatical meaning.” [para 27]

NoticeNotice:

1. Actual – heard it from the horse’s mouth2. Imputed – knew through actions of an agent3. Constructive – Ought to have known of prior interest

29 (2) Except in the case of fraud in which he or she has participated, a person contracting or dealing with or taking or proposing to take from a registered owner

(a) a transfer of land, or(b) a charge on land, or a transfer or assignment or subcharge of the charge,

is not, despite a rule of law or equity to the contrary, affected by a notice, express, implied, or constructive, of an unregistered interest affecting the land or charge other than

(c) an interest, the registration of which is pending,(d) a lease or agreement for lease for a period not exceeding 3 years if there is actual occupation under the lease or agreement… (not affected by notice unless there is a lease of less than 3 years and actual occupation. I.e. if there is a lease of less than 3 years and actual occupation, purchaser with notice is affected by that notice.)

Harris & Au, “Notice in BC” Strict Torrens system abolishes notice altogether: minimize transaction risk 3 variations over the 20th century:

o Absolute abolition of notice (e.g. Vancouver Island, early on)o Abolition of notice except in the case of fraud; fraud undefined (Queensland; current BC)o Abolition of notice except in case of fraud; fraud defined such that mere notice ≠ fraud (Alta)

BC: 1970s “except in the case of fraud” and fraud left undefined (equitable or CL?)o Case law has swung back and forth; Jager the Cleaner strongest authority that knowledge alone ≠ fraud

Common threads in BC case law:o More likely to find fraud if notice is express (not imputed or constructive); in relation to fee simple; and if

notice comes before contract for purchase and sale

Jeager the Cleaner v Li’s Investments —Notice alone does not amount to fraud F: prior unregistered lease; purchaser of fee simple had actual knowledge. A: fraud cannot be presumed lightly; must be established on the facts of each case. “Fraud is never lightly inferred”

[para 15].o “A consideration of the authorities cited shows clearly that under the British Columbia land registry system a

purchaser who takes with knowledge of an unregistered interest may be guilty of fraud if he were thereafter to seek protection of the Land Registry Act so as to defeat the claim of the holder of that interest. But I do not accept the proposition that this result must follow in every case so that, in effect , the courts have repealed s. 44 [ s. 29] of the Land Registry Act. The various decisions in which it is stated, even in unqualified terms, that notice of an unregistered interest before closing bars the purchaser from protection of the Act, like all other decisions of the courts, are authorities only in relation to the facts of a particular case. While the language may in some cases be broad, I do not think that they can be said to lay down a rule of universal application. The question in every case must be whether a fraud would in fact be committed if the purchaser were to claim the protection of the Act; fraud, which is never lightly to be inferred, must, I think, be established by the particular facts of the case and cannot be presumed.” [para 15]

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Szabo v Janeil —Notice alone does not amount to fraud; requires dishonesty by transferor. F: PL holds fee simple to Lot A. Some wench has fee simple to neighbouring Lot B. There is a pipe that runs from B to A, but there is

no easement. In 1991 the previous owner of B gave PL a “water easement” in exchange for a “hydro easement”, but forgot to register it. It remained unregistered when wench bought Lot B. P wants specific performance of easement agreement.

A: Suspicions aroused enough to have heightened duty to figure out whether easement agreement existed b/w neighbour (S) and previous owner of their lot. Refer to Rogers, where woman held to have constructive notice of easement after she knowcked on neighbours door but got no answer. Thus not too onerous to suggest constructive notice here.

o BUT, Jager: fraud cannot be “lightly inferred”. o “Here, there is simply no evidence to warrant the inference that the conduct of the Hansens was sufficiently

dishonest to deprive them of the protection of s. 29.” (para 48)

Woodwest Developments Ltd v Met-Tec Installations —Notice alone can amount to fraud [knowledge prior to contract for P & S; haste] F: prior unregistered lease. Purchaser of fee simple had notice, before contract. A: notice before contract for P & S; hastily registered fee simple after transaction

o As I have already stated, I have found that the plaintiff had notice of the unregistered lease prior to the contract being signed through the statement of facts prepared by the realtor, through the copy provided and also through the statement made by the realtor to the president of the plaintiff during their discussions. There could be no doubt in the mind of the president of the plaintiff that a lease was in existence prior to completion of the interim agreement. The fact that the plaintiff did not take steps to secure a signed copy of the lease raises questions as to whether the plaintiff was bona fide in its actions. Also, within a matter of days of registration being completed, the plaintiff attempted to use the provisions of the Land Title Act to defeat the interest of the defendant. [para 26]

Holt Renfrew v Henry Singer Ltd (Alberta – notice ≠ fraud) —[Majority]: registered title documents > lawyer’s representations for purposes of establishing fraud; can’t infer reliance on lawyer’s remarks if offer “based only on encumbrances as in title deed”—[Minority]: MR + failure to correct + knowledge that vendor wanted to sell subject to lease = CL fraud F: HR has long, unregistered lease with owner of building. Owner selling building to Henry Singer (D), whose lawyer

says that the lease “would not be a deterrent” to their client’s interests. In vendor’s interest to sell subject to lease, or else could be liable in damages to HR under lease agreement (?). D sees copy of the lease, and a copy of title registration. Certificate of registration indicates that lease is not registered. After this, D’s lawyer finds out that D would rather purchase the property not subject to the lease; but lawyer does not inform Owner/vendor. Purchase goes through “subject only to the encumbrances endorsed upon the said annexed photocopy of the certificate of title”, which showed old, expired caveat for HR, but no up to date caveat for HR lease. After purchase, new owner D files caveat to try and defeat HR’s lease.

I: did Pekarskey’s conduct (D’s lawyer) amount to fraud? An (minority—McDermid):

o (1) MR by Pekarsky that purchaser didn’t care about lease; once Pekarsky learned this, he had a duty to correct the MR and inform Owner

o (2) Reliance: Pekarsky knew that Owner intended only to sell subject to lease, because or else would be liable in damages to HR (which did happen)

o (3) Misled by MR: fOwner orwarded copy of lease to Pekarsky, who didn’t refuse it, and Owner says that he “considered that the purchaser would accept the lease in favour of HR” (945)

A (majority—Moir)o Can’t infer that Owner relied on Pekarsky’s statement, because Owner saw the title deed that did not have an

up to date caveat for HR; thought they had filed one themselves.o “Nowhere in the evidence am I able to find that Dickson [Owner] said that he recalled the letter of 4th May and

that he relied upon it” [letter saying that D would purchase with lease] Because title deed didn’t have lease, and Owner accepted it, cannot infer that Owner relied on

Pekarsky’s MR when he decided to sell the building no fraudo “…For the representation of 4th May to amount to fraud it must have been relied upon and induced the

contract. There is simply no evidence that the letter had this effect” (947)

Alberta v McCulloch (notice ≠ fraud) —Knowledge + haste may be sufficient to infer fraud.

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F: M acquires land subject to caveat and restrictions by province (e.g. buyback option), aware of these restrictions. Mistake and land title office results in caveat being discharged; M phones office to enquire, finds out they didn’t know about the mistake. In the meantime, M transfers interest to a numbered company, of which he and his family are presidents and majority shareholders. [caveat in Alta = charge].

I: fraud? A: timing: M transferred interest right after he learned that caveat was discharged. M claims it was for tax purposes.

Judge says too coincidental; satisfied that M transferred “for the purpose of defeating the department’s interest in the land” (953).

o (Hard to reconcile with HR above; very different bars for finding fraud)

11. Aboriginal TitlePolitical History of Aboriginal TitleTrade-centred Colonialism

NWC strategy = follow rivers inland HBC = establish posts on the coast; higher prices

o 1670 monopoly granted by Crown to HBCo 1821 NWC + HBC merge; 1827 Fort Langley

Royal Proclamation, 1763 Though at first to be “origin” of Aboriginal title (see Delgamuukw)

o “Recognition” of Aboriginal Title (Lamer CJ) British conquest of New France provision for indigenous allies

o British allied with Iroquois; French with Huron All land west of Appalchians = “Indian” country (allies of British); no settlement

o All land east of Appalachians = land to be settled Indigneous-held land can only be surrendered to the Crown (HoC; protect First Nations from speculators)

Two Row Wampum Indigenous recoginition of British presence; parallel lines that connect and co-exist but are separate

o Iroquois: sovereignty, jurisdiction, control

Trade Settlement Policy Treaty of Oregon 1846: establish 49th parallel from Rockies west to Pacific

o Indigenous perspective: negotiations now depend on British or American dealingso HBC Fort Vancouver (Washington/Columbia River) Fort Victoria

1849 proprietary colony of Vancouver Island to HBC settlement policyo Fundamental transition from HBC as trading company to settlement company

Trade = collaborative; Settlement ≠ collaborative

Initial Treaty Making 1850 Douglas = mixed race, 2nd governor of Vancouver Island 15 treaties; first 9 over course of 3 days at Fort Victoria E.g. Teechamitsa Tribe (b/w Esquimalt & Point Albert)

o Village sites & enclosed fields kept for own use (reserve) British conception of property: agriculture At liberty to hunt and fish on unoccupied lands BUT, indigenous oral histories don’t remember these as cession treaties, but as agreements to share

space Interpretation of Treaties :

o 1. Entire agreement contained in written document o 2. Text = treaty, but need surrounding extrinsic evidence to understando 3. Text ≠ treaty; agreement, but written treaty isn’t the terms, only a piece of evidence as understood by

Britisho (Power of empire: Douglas treaties based on template from NZ with Maori)

Why no more treaties?

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o 1. Douglas didn’t think they needed anymore lando 2. Too expensive: cut off funding from London; Cowichan realized they had bargaining powero 3. Ambiguity over nature and legal standing of indigenous property interests in the land

Douglas used to dealing with Indigenous people as business partners, not competitors Douglas granting large reserves, e.g. Shushwap & East FV; with intention that Indigenous communities become

part of mainstream as they wisho Replaced by Trutch: reduces reserve size, 10 acres/family (white folk get 160/family)

BC and Confederation 1871 join confederation: Indigenous Relations falls to feds under 91(24) Terms of Union : BC pulls a fast one

o s 13: “Policy as liberal as that hitherto pursued by BC shall by continued by dominion gov’t” [10 acres/family/Trutch]

BC knew prairie policy more liberal; don’t want treaty making Joint Indian Reserve Commission 1876-78

o Federal/provincial; feds back out because too expensive Indian Reserve Commission 1878-1907

o Results in current Reserve geography of BCo 1910 Laurier gov’t almost takes BC to court over failure to recognize Aboriginal Title

Royal Commission on Aboriginal Affairs for Province of BC, 1913-16o 5 commissioners tour province, trying to find spaces to reserve land; make sure enough space for settlers

Ditchburn Clark Agreement, 1924o Confirms Royal Commissiono Federal and provincial gov’t: reserves are not a resolution of land claims

Some lawyers begin working with indigenous communities House of Commons Committee, 1927

o After 50 years, agreement b/w gov’ts about reserve geography 0.3333% of BC’s land Reflects land-based fishery geography

o Leads to law prohibiting legal counsel for Indigenous (under guise that solicitors would take advantage of Indigenous folk and waste their money b/c Aboriginal Title a moral, not legal, claim)

Legal History of Aboriginal Title

St Catharines Milling & Lumber Co v The Queen (1888): personal and usufructary Treaty 3; federal gov’t grants timber license to St. Catharine’s, claim acquired title from Ojibway

o 91(24): Indians and lands reserved for Indianso 109: Crown land in provinces = provincial Crown land

JCPC holds that Ojibway didn’t have title and couldn’t pass it to federal gov’to Therefore treaties negotiated for political and moral purposes, not legalo 91(24) doesn’t apply to lands acquired by treaty cession

R: Aboriginal title/Indian property interest in land are personal and usufructary rights to use, inhabit; but not to own; Crown can do away with at any time

R v White and Bob (1964): Douglas treaties legit; treaty rights matter Treaty right defence to regulatory offence under Wildlife Act Are Douglas Treaties treaties?

o BCSC: noo BCCA Norris JA: don’t apply strict interpretation of document; must ascertain common

intention/understanding Look to intention (connect to Marshall) treaties, valid defence

R: treaty rights more significant than before; confirmed w/o reasons by SCC

Calder v BC (AG) (1973): recognition of Aboriginal Title Nisga’a never accepted reserve geography; seeking declaration of Aboriginal Title Trial : Title existed, but extinguished by 13 colonial land ordinances BCCA : aboriginal title “personal and usufructary” (St Catharine’s)

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SCC : refuses to grant declaration, buto 6/7 judges find Aboriginal Title existed

3: existed but extinguished by colonial land ordinances 3: existed and not extinguished Pigeon J: some sort of technicality (never sought permission to sue Crown)

Aftermath Mackenzie Valley Pipeline Commission

o Specific Claims policy Wrongful taking of Aboriginal land or reserves Existing Aboriginal property interests (usually failure to manage in best interest, e.g. Guerin)

o General claims policy Unresolved questions of Aboriginal title Northern Quebec, James Bay, Yukon & NWT

White Paper 1969: “separate is not equal”/Brown v Board of Education climateo Separation creates inequalities assimilation (abolish Indian status, bands, Indian Act)

Calder comes down: ok, need to negotiate meaningfully with Indigenous communities

Aboriginal Title: Cases & Context

Overstall, “Encountering the Spirit in the Land” Daxgyet: Chief’s authority over land through intial supernatural/spiritual interaction with the land

o Connect lineage/history with the land these are title Yukw: feasts and gathering, through which daxgyet remains legitimate

o Forum in which people formalize social, political, legal affairso Claims made and witnessed; through witnessing, they are recognized

1. People respect land and achieve balance in natural and social life 2. Power-giving encounters recreated and re-legitimized in yukw

Adawk: formal oral history that describes territorial acquisitions Ayuuk: crests, art, etc. that evince territorial boundaries and relationship to land Overstall conclusions:

o 1. Self-gov’t structures of Indian Act have failed; fail to recognize true indigenous governing structures or principles

o 2. Legal impact of not recognizing distinction b/w the 2 structures: constitutional ramifications if treaties fail to recognize Aboriginal legal institutions as title-holding entities

E.g. Gitxsan, primacy political entity = houseo 3. Property arises out of reciprocal relationship; created in space b/w 2 legal entities

Delgamuukw v BC —Test for Aboriginal Title; Incidents of Aboriginal Title—Aboriginal title is a right in land to exclusive use and occupation for a variety of purposes, subject to inherent limit of maintaining the land for future generations. Procedural History:

o 1984 sue for jurisdiction and ownership; lead evidence from Chiefso Hierarchy of evidence:

Written accounts of traders, missionaries Expert witnesses (BUT, advocates or objective?; historians > anthropologists) Oral histories: only helpful if additional documentary evidence to corroborate

o McCechran CJBCSC dismisses claim, quoting Hobbes (dick) Non-exclusive right to villages and subsistence rights; extinguished by 13 colonial land ordinances

o Change in gov’t b/w trial and appeal Province now argues no extinguishment by ordinances, but infringement

o MacFarlane JA: unextinguished rights, but non-exclusive aboriginal rights other than ownership or property interest

o Wallace JA: non-exclusive right of traditional occupation Not extinguished, but also non-exclusive

o SCC: change pleadings from self-gov’t jurisdiction; ownership Aboriginal title Collective title and claims rather than one for each house

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Goes back to trial; not for SCC to reconstruct evidence General features of Aboriginal Title: somewhere b/w fee simple and bundle of aboriginal rights; sui generis

o Inalienable : alienable only to Crown (Royal Proclamation/inherent limit)o Source : intersection of CL + prior occupation

Royal Proclamation is NOT the source of Aboriginal title; a recognition (analogy to Charter rights) Arises from possession prior to sovereignty, whereas other property interests arise after

AT lies at the intersection of legal systems; can’t speak of AT pre-sovereignty (not yet a burden)

o Communal : held collectively can’ destroy for future generations Content of Aboriginal title:

o 1. Aboriginal title includes right to exclusive occupation & use of the land for a variety of purposes, which don’t need to be IDC of that First Nation

A right in land itself, not bundle of other substantive rightso 2. Subject to Inherent Limit: can’t be used in a way that destroys it for future generations

Can’t use it in a way that destroys the activity that gave rise to title in the first place Relate to inalienability and communally-held features “Not a limitation that restricts use of the land to those activities that have traditionally been carries

out on it. That would amount to a legal straightjacket” (para 132) Analogy to equitable waste: can’t completely change nature of land or destroy its uses

Proof of Aboriginal title: occupation replaces “IDC”; pre-sovereignty rather than contacto 1. Sufficient occupation prior to sovereignty

CL perspective: occupation; aboriginal perspective as well 1846 Oregon Boundary Treaty (AT crystallizes at sovereignty; not concerned reaction to Euros;

practical)o 2. Continuity : “substantial maintenance of the connection”o 3. Exclusive occupation at sovereignty : “intention and capacity to retain exclusive control”

Equal weight to CL + aboriginal perspective Evidence of trespass can support finding of exclusivity

Justification of Incursion/Infringemento 1. Valid Legislative Objective : reconcile pre-existence of aboriginal communities with Crown sovereignty and

“broader political community of which they are a part” Balance interests b/w aboriginals and non-aboriginals based on % of population History of white people in the area/industry/trade Economic growth Regional fairness Settlement of foreign populations for these purposes

o 2. Consistent with Fiduciary Duty : use Gladstone priority framework Consent/consultation Accommodation (e.g. reduce license fees; minimal) Compensation if expropriation

Tsilhqot’in v BC —“Regular use” sufficient for occupation, rather than continuous; reject postage stamp approach to; AT is a beneficial interest in land to use, enjoy, and profit from development Procedural history:

o BCSC Vickers J rejects postage stamp approach: “impoverished view of aboriginal title”; would inhibit genuine negotiations

Proof of Aboriginal title:o 1. Sufficient pre-sovereignty occupation : take into account group size, manner of life, resources, character of

land Sufficiency will vary with culture, economies, and land CL perspective imports possession and control element; “act in a way that would communicate to 3rd

parties that it held the land for its own purposes” (para 38) Somewhere b/w adverse possession & subjective intent

Don’t need regular presence; regular use can suffice (e.g. hunting, gathering, resource exploitation) Here : regularly used large tracts of land for hunting; land was harsh and couldn’t support big

population sufficiento 2. Continuous occupation

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Here: geographic proximity b/w sites of recent occupation & those with direct historic evidence supports inference that present occupation rooted in pre-sovereignty occupation

o 3. Exclusive occupation at sovereignty : intention and capacity to control E.g. showing others needed permission; even lack of challenges (para 48)

Question of fact for trial judge Here : lots of evidence that they repelled people from their land

SCC rejects postage stamp approach Content of Aboriginal Title:

o Content of Crown’s underlying title is what’s left when subtract AT from it (para 70) AT = beneficial interest in land: use it, enjoy it, profit from economic development Crown does NOT retain beneficial interest; underlying title, but AT uses up all uses of the land

o Ownership rights: similar to fee simple—decide use, enjoyment and occupancy, possession, economic benefits, proactive management

o Inherent limit rooted in connection b/w people to land that must be preserved for future generations Justifiable Infringement:

o Procedural duty to consult/accommodate, where Crown as real or constructive knowledge of claim Strength of claim vs adverse effects

o Valid LO backed by “compelling and substantial objective” Reconciliation; Gladstone

Settling of foreign populations for economic growth; agriculture; forestry; hydroelectric, infrastructure (Delgamuukw)

o In line with Crown’s FD 1. Infringement can’t destroy Aboriginal group’s ability to continue using the land (inherent limit)

(para 86) 2. Proportionality: benefits vs adverse impacts

Reigns in wide ambit of valid LO’s that can justify infringement

Aboriginal Title & Registration

LTA: everything registered against fee simpleo But can register non-property interests: caveat; certificate of pending litigation (lis pendens)

In BC, caveat = temporary registration of notification that there is something at issue with titleo s 282: person claiming “under an unregistered instrument which is incapable of immediate registration”o s 288: registration of caveat freezes title; can still register interest but just subject to caveatoro s 293: caveat lasts for 2 monthso s 216: pending litigation freezes title, but can still register indefeasible title or charge, recognizing that

it is subject to outcome of litigation (sub 2)o s 37: important date = application, not registration

Chippenwas of Sarnia Band v Canada (AG) (2000) —Equitable mishmash: asking for equitable remedy, therefore, equitable considerations apply consider laches + 3rd party rights. Misstates CL priorities. Only BFPV without notice takes legal interest free and clear of equitable interest. Takes away possibility of AT claim…(based off of first illegal transfer, present day peeps would have subsequent equitable interest, not legal). Problematic application of CL priorities. F: portion of reserves transferred from Band to Cameron in 1830s. 1853 Crown issues grant (“letters patent”) to

Cameron for the land, but band never formally surrendered the land to the Crown (RP 1763). Band argues that legal interest should have never transferred b/c never surrendered it to the Crown (nemo dat)

I: should equitable doctrines apply? A: AT not exactly legal interest; sui generis. Elements of both legal and equitable doctrines. Purchasers subject to 150

delay of the claim, and they were bona fide purchasers for value without notice. Because not strictly legal, should be subject to these equitable doctrines/considerations. Therefore, subsequent legal interest of purchasers/current homeowners takes priority over band’s prior legal interest (b/c prior legal interest sui generis, not strictly legal). **(?)

Reynolds Critique: in no situation should a subsequent equitable > prior legal (*who has the equitable??). Court muddied waters

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Skeetchestn Indian Band and Secwepemc Aboriginal Nation v Registrar of Land Titles, Kamloops —Aboriginal title not included in title registration system; not recognized as interest in land under LTA. Can’t register lis pendens under s 215 for Aboriginal Title. F: band file s 215 lis pendens against proposed golf course development. I: whether, if successful, P would be entitled to registrable interest in land in issue. A: nothing in the legislative history of the Act to indicate that legislature intended to include Aboriginal title within the

language of “claiming an estate or interest in land”. P’s claim is “upstream” of title…?

Property on Indian ReservesFirst Nations Land Management Act: allows nations to develop land management schemes (see legislation)

Nicola Band et al v Trans-Canada Displays —No legal interests in land on reserves unless requirements of Indian Act are met; because held communally, cannot transfer to non-band member, and allotments of land interest must be approved by majority of electors; no interest based on traditional occupation. F: Shuter claims ownership over portion of reserve, based on “traditional or customary” use and occupation by his

family. Shuter leased large portion to Trans Canada for billboards beside the Coquihalla. No council resolution allotting parcel to Shuter or his present children. Also acquired portion of the land previously from non-band member.

I: whether individual traditional or customary land claims exist on Indian reserves, and if they do, how they may be reconciled with the systems of collective land ownership by an Indian band as set out in the Act.

A: scheme of Indian Act = “maintain intact…reserves set apart for [Indians]…regardless of wishes of any individual to alienate for his own benefit any portion of the reserve”

o s 2 : band exercise power with majority of electors; s 20: band can grant individual interest/Certificate of Possession with majority vote; s 24: person lawfully in possession of parcel can transfer to another band member; s 28: anything that purports to transfer to non-band member is void.

o Shuter never had legitimate interest b/c non-band member couldn’t transfer it to him (only council); and no possession by traditional/customary use, because need approval of majority of electors. Land use decided by band in trust for all community members.

12. Qualified Transfers

Vested vs Contingent; Defeasible vs DeterminableVested or Contingent?

“To A and B for their lives and then to B in fee simple”o A = vested interest + possession for life estateo B = vested interests + possession for life estateo B = vested remainder interest for fee simple (Browne)

“To A and B for their lives and then to the survivor of them in fee simple”o A = vested interest + possession for life estateo B = vested interest + possession for life estateo Remainder is contingent for both: A’s interest contingent on B dying, and vice versa

“To A for life and then to C in fee simple if C marries D”o A = vested interest + possessiono C = contingent interest fee simple if C marries D

If C marries D while A alive, C = vested in interest only (+ possession when A croaks) “To A for life and then to B in fee simple if, and only if, B attains the age of 19 years”

o A = vested in interest + possessiono B = contingent remainder until 19

Once 19, vested in interest Once 19 + A dies, vested in interest + possession

E.g. delay until ID of transferee known; transfer to first daughter upon marriage

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Test to be valid:o “The condition is capable of being given some plausible meaning” (Ziff)

Stuartburn; McKeen Estate

Defeasible Estates: Condition Subsequent [Provided that]; [on the condition that]; [but if]; [but when]; [if it happens that]; [if it should occur that]

o Bring estate to abrupt end; outside event that ends estate Right of re-entry: is contingent and must be exercised by grantor “I, Cecil Green, give my house and grounds to UBC in fee simple, [provided that] UBC shall use the house and

grounds for university and student residences” “To A, but should the land ever be used as a hospital, this interest shall revert to the grantor” Test to be valid:

o “The donee must be able to see clearly and distinctly from the outset those actions that will lead to a loss of the interest” (Ziff)

Caroline (Village) v Roper

Determinable Estates: Defined from the Outset [While]; [whilst]; [during]; [so long as]; [until]

o Connote the flow of time; determining event defines quantity of the interest; we know the expansiveness of the estate by the determining event

Possibility of reverter: is automatic and therefore vested “I, Cecil Green, give my house and grounds to UBC in fee simple [until] UBC no longer uses them as student

residences” “Devise to school in fee simple [until] it ceases to publish its accounts” Test to be valid:

o “The donee must be able to see clearly and distinctly from the outset those actions that will lead to a loss of the interest” (Ziff)

Why does the distinction matter? Income:

o Defeasible: if right of re-entry not acted on, rental income continues to go to current estate holdero Determinable: reverter is vested and therefore rental income automatically goes to grantor

Invalidity:o “To A [provided] that she does not sell to a British Columbian”o “To A [so long as] she does not sell to a British Columbian

Effects of invalidity:o Invalid CS: void condition and absolute transfer (stays with grantee)o Invalid determinable: void transfer (goes back to grantor)

Because determining event defines the estate, if it is invalid, the entire estate is invalid

Stuartburn (Municipality) v Kianski (vested/contingent) —Remainder & reversionary interests are presently vested; present right to future enjoyment (vested in interest, not possession) F: Mayor wants to get re-elected, but is required to be “in his own right an owner of land” in the municipality. He has a

remainder fee simple interest in land to which G-Ma currently has life estate. I: is his remainder interest vested or contingent? A: “No abeyance of seisin”: there must always be an owner or claimant to an interest in land, so that it can be

transferred, and so that someone could pay incidents of tenure and there would be someone against whom actions could be brought. Life estate holder is seised (vested in possession), and there must also be someone who is vested in interest, so that when life estate owner dies, someone else is seised of the land. Seisen links concept of estate (quantity of interest in land) with physical thing of the land. Seisin cannot be fragmented (only 1 party in possession), but estate/ownership can be presently shared while seisin remains only with person in possession reversionary and remainder interests = vested.

Forestall: senators must be “legally or equitably seised as of Freehold for his own use and benefit of lands or tenements held in free and common socage, or seised or possessed for his own use and benefit”. Senator doesn’t have present possessory interest not seised of land and therefore ineligible.

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McKeen Estate v McKeen Estate (vested/contingent) —Give primary weight to testator’s intention; presumption against intestacy; construction favouring vesting F: “To divide the residue of my estate equally between my sisters Alice McKeen and Beatrice McKeen if they are both

alive at the time of the death of the survivor of me and my third wife. If only one of my said sisters is alive at the time of death of the survivor of me and my said wife, I direct my Trustees to deliver the residue of my estate to the surviving sister, the same to be hers absolutely.” Both sisters die before wife. [assumes that at least 1 sister will still be living when last survivor dies; doesn’t contemplate what happens if both dead and possibly no vested interests]

I: if gifts contingent on sisters surviving wife, CP can’t be met and no vested interest intestate. If gifts vested in interest “at the effective date of testator’s will”, then vested interest for sisters goes into sisters’ estates.

A: 1. intention: did not contemplate intestacy; careful testator, will “reflects precision to which a surgeon is accustomed”. Finds intention to be “I want the residue of my estate divided b/w my sisters…or the survivor of them”.

o 2. Presumption against intestacy : “provided that on a fair and reasonable construction there is no ground for contrary conclusion”

o 3. Construction favouring vesting : “where the words used and the will as a whole admit of a construction that will result…in early vesting”. If not prima facie contingent, favour vested interest.

o 4. Browne v Moody : gift is prima facie vested if postponement is to allow for prior life estate (applied).o 5. Re Francis : where the reason for postponement is personal to donnee, prima facie gift is contingent (e.g.

must reach the age of 21, must marry, complete law school, etc) Here: personal to donnee = sisters being alive DOES NOT APPLY THIS

H: goes to sisters’ estates.

Caroline (Village) v Roper (determinable/defeasible) —Determinable = determining event itself sets limit for estate first granted—Defeasible = independent clause added to a complete fee simple absolute which operates to defeat it F: “This acre… Transferred to the Caroline Community Hall this day, Shall revert back to the late Thomas Roper Estate

if used for other than a community centre…” I: if defeasible, right of re-entry contingent/not vested and offends rule against perpetuities invalidate transfer. A:

o “The key words in the document given Mrs. Roper are “This acre… shall revert… if used for other than a community centre”. Those words use the future tense and the future action depends on something occurring which may or may not occur in the indefinite future, thus offending against the rule against perpetuities. The words seem to make the fee simple that was given that day defeasible if a future event occurs. They do not put a condition on the fee simple that it is good only so long as a certain use is made of it. For these reasons, I would hold that the document in its present form is void and unenforceable…” (539)

o “In short, if the terminating event is an integral and necessary part of the formula from which the size of the interest is to be ascertained, the result is the creation of a determinable interest; but if the terminating event is external to the limitation, if it is a divided clause from the grant, the interest granted is an interest upon condition.” (Cheshire)

H: defeasible and therefore whole transfer void, but rectify offending clause based on common intention of parties.

St Mary’s Indian Band v Cranbrook: look to intention behind transfer of Indian land to municipality. “Should at any time said lands cease to be used for public purposes, they will revert to the [band] free of charge”. Determinable or defeasible? SCC: particular form not definitive; look to intention…

State Limitations on Private Power

Effects of invalidity:o Invalid defeasible/CS: absolute transfero Invalid determinable: void transfer

Public Policy 1. Efficiency

o Uncertainty Test for contingent/CP: “The condition is capable of being given some plausible meaning” (Ziff) Test for determinable or defeasible: “The donee must be able to see clearly and distinctly from the

outset those actions that will lead to a loss of the interest” (Ziff) HJ Hayes v Meade

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o Restraints on Alienation Mode of alienation

Sold/leased/mortgaged Class of recipients

Not to this individual; racist restrictions Time of alienation (MAY be ok)

Can’t sell for first 10 years Trinity College

2. Social policyo (Conditions that require recipient to violate Criminal law; prohibition on carrying out of public duties;

general restraints on marriage [class notes March 15])o Re Leonard Foundation Trust

Rule Against Perpetuities DO THIS

HJ Hayes Co v Meade (efficiency: uncertainty) —Where ambiguous, interpret conditions as conditions subsequent because favours early vesting F: “I give and bequeath to my son James… on the following conditions that my son James reside on said land and

cultivate the same. Should my said son James desire not to reside on said property or cultivate same then that portion hereby bequeath to be the property of my son Harold he paying to my said son James the sum of one thousand dollars.”

I: The provisos in the disputed clause are either conditions precedent or conditions subsequent. Conditions precedent must be met before the property vests in the beneficiary. Conditions subsequent allow for immediate vesting of the property subject to its loss if the conditions are not subsequently met. If a condition subsequent is uncertain it is said to be void for uncertainty.

Trinity College School v Lyons (efficiency restraints on alienation) —Right of first refusal upon death may be unacceptable restraint on alienation, b/c makes fee simple a life estate. F: 1st option: should they sell, school has first option to buy at fixed price. 2nd option: on their death, have a right to buy

at fixed price. 2nd option removes any agency; fixed price so low that is nominal. Although Bennetts hold fee simple, this converts it into a life estate (by restraining alienation)

I: “A condition that would take away the necessary incidents of the estate, such as that the holder shall not take the profits, or shall not have the power to alienate, either generally or for a limited time, is void as being repugnant to the estate created. The reason such restraints are void is because they keep property out of commerce and tend to result in a concentration of wealth.”

A: It is reasonable to say that where an estate is bestowed, of which the power of alienation is an incident, that one conveying such an estate to another shall not have the power to alter its character, and to make it something wholly different from what it has been made by the law. To do so is to assume the power to make an estate unknown to the law. It is an attempt not simply to convey away an estate, but to exercise a legislative power, and to create a new form of property in land…

Bernard Estate v Bernard —asdlfkh F: “to my son STEWART BERNARD all my estate, real and personal, of whatsoever nature and kind and wheresoever situate

to be his absolutely subject only that should my son FLOYD BERNARD decide to return to live here, that a lot of land of three acres along highway No. 2 be transferred to him.”

A: In the present case, the late Charles Bernard was an Indian whose estate consisted of land situated exclusively on the St-Basile Indian Reserve. There can be no doubt that his intention was to give his land to his son Stewart upon his death while giving his other son Floyd a place to live if he should ever decide to return to the reserve. I find that the proviso is a condition of retention of the gift absolute to Stewart and as such is a condition subsequent which is not void for uncertainty. I also hold that the land to be transferred to Floyd is sufficiently identified in the words of the proviso that is "a lot of land of three acres along highway No. 2" so as not to be void for uncertainty. There is authority to hold that in such a situation the first devisee, in this case Stewart, can decide which 3-acre lot will be given to the second devisee, Floyd. (17)

Re Leonard Foundation Trust (social policy)

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Re Ramsden Estate:

Fox v Fox Estate

Estate of EG McConnell:

Spence v BMO Trust Company

12. Qualified TransfersHAVE NOT COMPLETED RULE AGAINST PERPETUITIES

Q’s for doug: clarify Chippenwas case; Skeetchestn; determinable estates/right of reverter means that interest is vested? Stuartburn: just a restatement of the rule in Re Browne?

o Does “seised” of land mean the same thing as being vested in possession? How to use Caroline, if we looked at it just for def’n of defeasible/determinable St Mary’s Indian Band: what was the outcome? What does an “absolute” transfer mean?

Easements: look at practice exam notes (can’t “substantially interefere with possessory interest”)McDonald: trial finds pool easement invalid; BCCA finds valid for exclusive use of the pool. Case goes back to trial b/c dominant tenement builds pool house and gazebo that covers 90% of easement area (particular plan is invalid)

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