Land Titles: Lesson Plan #1 - Amazon Web Services



Table of Contents TOC \o "1-3" \h \z \u Chapter 1: Introduction PAGEREF _Toc500316804 \h 5Introduction PAGEREF _Toc500316805 \h 5Basic land law concepts PAGEREF _Toc500316806 \h 5Core values in land titles registration PAGEREF _Toc500316807 \h 65 Basic Approaches to Risk Allocation PAGEREF _Toc500316808 \h 7Chapter 2: Priorities at Common Law and in Equity PAGEREF _Toc500316809 \h 9Introduction PAGEREF _Toc500316810 \h 9L v L PAGEREF _Toc500316811 \h 13L v E (e.g., an equitable mortgage) PAGEREF _Toc500316812 \h 14the law in 2017 PAGEREF _Toc500316813 \h 15E v L PAGEREF _Toc500316814 \h 15E v E PAGEREF _Toc500316815 \h 17Rice v Rice, (1853) 61 ER 646 (Ch D) (E v E) PAGEREF _Toc500316816 \h 17Australian Guarantee Corp (NZ) Ltd v CFC Commercial Finance Ltd, [1995] 1 NZLR 129 (CA) [priorities btwn unregistered mortgages] PAGEREF _Toc500316817 \h 18Chapter 3: Deed (or Recording) Registry Systems PAGEREF _Toc500316818 \h 21Introduction PAGEREF _Toc500316819 \h 21Styles of Deeds Systems (Mapp) PAGEREF _Toc500316820 \h 21race (to register) PAGEREF _Toc500316821 \h 21notice (Massachusetts statute) PAGEREF _Toc500316822 \h 22race-notice PAGEREF _Toc500316823 \h 22Resolving Priority Issues PAGEREF _Toc500316824 \h 23CIBC v QUASSA, [1996] NWTJ No 17 (SC) (variation of notice model) PAGEREF _Toc500316825 \h 23CIBC v Rockway Holdings, (1996) 29 OR (3d) 350 (Gen Div) (race-notice-notice) PAGEREF _Toc500316826 \h 24Foster v Beall 1868 CarswellOnt 142 PAGEREF _Toc500316827 \h 25The Assignment and Registration of Crown Mineral Interests PAGEREF _Toc500316828 \h 26Crown Lands in Alberta: Generally PAGEREF _Toc500316829 \h 26Registries for Crown Lands (Bankes) PAGEREF _Toc500316830 \h 28Hawker v Hawker, (1969) 3 DLR (3d) 735 (Sask QB) PAGEREF _Toc500316831 \h 29Chapter 4: Introduction to the Torrens System: Title by registration PAGEREF _Toc500316832 \h 31Introduction PAGEREF _Toc500316833 \h 31Mirror, curtain, net PAGEREF _Toc500316834 \h 33the introduction of Torrens in Alberta (Taylor; An Introduction to Alberta Land Titles) PAGEREF _Toc500316835 \h 33Church v Hill, [1923] SCR 642 (equitable interest in land before closing, regardless of s 53/54) PAGEREF _Toc500316836 \h 34The idea of indefeasibility PAGEREF _Toc500316837 \h 34Chapter 5: Qualifications on Indefeasibility Part I PAGEREF _Toc500316838 \h 37The key exception – Fraud PAGEREF _Toc500316839 \h 37Ikea Rule PAGEREF _Toc500316840 \h 38Hackworth v Baker, [1936] 1 WWR 321 (Sask CA) (Torrens Fraud, notice is not fraud) PAGEREF _Toc500316841 \h 39Holt Renfrew and Co Ltd v Henry Singer Ltd, (1982) 37 AR 90 (CA) PAGEREF _Toc500316842 \h 41Alberta (Ministry of Forestry, Lands & Wildlife) v McCulloch, (1991) 116 AR 261 PAGEREF _Toc500316843 \h 42McCulloch, 1991 CA PAGEREF _Toc500316844 \h 43Ontario has succumbed to notice-gloss PAGEREF _Toc500316845 \h 43Waterstone Properties Corp 2017 ONCA 623: PAGEREF _Toc500316846 \h 43recent disputes PAGEREF _Toc500316847 \h 44Darnley v Tennant, 2006 ABQB 575 (fraud: when you create the interest then try to extinguish it through clean title under s203) PAGEREF _Toc500316848 \h 441198952 Alberta LTD v 1356472 Alberta Ltd, 2010 ABCA 42 (Numbered Companies Case) PAGEREF _Toc500316849 \h 45Nature Conservancy of Canada v Waterton Land Trust Ltd, 2014 ABQB 303 PAGEREF _Toc500316850 \h 46Ziff’s Other Potential Grains of Fraud PAGEREF _Toc500316851 \h 46LTA s. 170? A sleeping giant? PAGEREF _Toc500316852 \h 47Dollars and Sense Finance Ltd v Nathan, 2008 NZSC 20 PAGEREF _Toc500316853 \h 47When is title indefeasible? (Neave) PAGEREF _Toc500316854 \h 48Gibbs v Messer [1891] AC 248 (PC) PAGEREF _Toc500316855 \h 48Frazer v Walker PC (standard for immediate indefeasibility) PAGEREF _Toc500316856 \h 49Hermanson v Martin (1987), 52 Sask R 164 (CA) (has someone pose to forge signature) PAGEREF _Toc500316857 \h 50Paramount Life Ins Co v Hill (1986), 75 AR 249 (CA) (forged signature himself) PAGEREF _Toc500316858 \h 52Beneficial Reality Ltd v Sun Bae (1996), 182 AR 356 (QB) PAGEREF _Toc500316859 \h 53De Lichtuer v Dupmeier, [1941] 3 WWR 64 (Sask KB) (before Frazer) PAGEREF _Toc500316860 \h 53mortgages (Credit Foncier Franco-Canadien v. Bennett) PAGEREF _Toc500316861 \h 54Credit Foncier Franco-Canadian v Bennett (1963), 43 WWR 545 (BCCA) PAGEREF _Toc500316862 \h 54the in personam exception PAGEREF _Toc500316863 \h 55Pecore: presumption of resulting trust, between gratuitous transfer between parents and adult children PAGEREF _Toc500316864 \h 55Bezuko v Supruniuk, 2007 ABQB 204 PAGEREF _Toc500316865 \h 55Thorsteinson v Olsen, 2014 SKQB 237 PAGEREF _Toc500316866 \h 55JEB Management Limited v Grubz United Whanau Trust, [2015] NZHC 157 PAGEREF _Toc500316867 \h 57mayhem in Ontario PAGEREF _Toc500316868 \h 58Lawrence v Wright: PAGEREF _Toc500316869 \h 58Reviczky v Meleknia, (2007) 88 OR (ed) 699 PAGEREF _Toc500316870 \h 59Chapter 6: Indefeasibility and Its Qualifications Part II PAGEREF _Toc500316871 \h 611.Introduction PAGEREF _Toc500316872 \h 61Turta v CPR, [1954] 1 SCR 427 PAGEREF _Toc500316873 \h 61Public Trustee v Pylpow, (1972 QB): PAGEREF _Toc500316874 \h 642.Misdescription PAGEREF _Toc500316875 \h 64misdescription and adverse possession (Edwards v. Duborg; Limitations Act; L.T.A., s. 74) PAGEREF _Toc500316876 \h 66LTA 74 PAGEREF _Toc500316877 \h 66Edwards v Duborg, [1982] 6 WWR 168 (AB QB) PAGEREF _Toc500316878 \h 67Bowers v Bowers (2002), 4 RPR PAGEREF _Toc500316879 \h 68instances of misdescription? PAGEREF _Toc500316880 \h 68Kristiansen v Silverson, [1929] 3 WWR 322 (Sask CA) PAGEREF _Toc500316881 \h 68Burden v Alberta (Registrar of Titles) (1913), 5 WWR 112 (Alta SC) PAGEREF _Toc500316882 \h 683. Prior Certificate of Title PAGEREF _Toc500316883 \h 69LTA 62(2) PAGEREF _Toc500316884 \h 69LTA 60(2) PAGEREF _Toc500316885 \h 694.Volunteers PAGEREF _Toc500316886 \h 70Passburg Petroleums Ltd v Landstorm Devel Ltd, ABCA 1984 PAGEREF _Toc500316887 \h 70Curtain does not fall for d/ee PAGEREF _Toc500316888 \h 70Darnley v Tennant, 2006 ABQB 575 PAGEREF _Toc500316889 \h 71detrimental reliance (Law of Property Act, s. 69) PAGEREF _Toc500316890 \h 715. Writs of Enforcement PAGEREF _Toc500316891 \h 71the old approach PAGEREF _Toc500316892 \h 71the new rules (ss 122-125) PAGEREF _Toc500316893 \h 726.Corrective Powers PAGEREF _Toc500316894 \h 73registrar’s powers: nature and function (ss. LTA 187-188) PAGEREF _Toc500316895 \h 73Heller v Registrar, [1963] SCR 229 PAGEREF _Toc500316896 \h 74judicial powers (LTA ss.189-91) PAGEREF _Toc500316897 \h 75Chapter 7: Overriding Interests PAGEREF _Toc500316898 \h 771.Introduction PAGEREF _Toc500316899 \h 772.LTA Overriding Interests PAGEREF _Toc500316900 \h 77Crown reservations (s. 61(1)(a)) PAGEREF _Toc500316901 \h 77Portage La Prairie v Canadian Superior Oil, [1954] SCR 321 PAGEREF _Toc500316902 \h 78easements LTA 61(1)(f) & 61(1)(c) PAGEREF _Toc500316903 \h 78public easements, etc. PAGEREF _Toc500316904 \h 81how to record (LTA s. 67) PAGEREF _Toc500316905 \h 81utility rights of way (LTA s. 69) PAGEREF _Toc500316906 \h 82taxes (s. 61(1)(b); Municipal Government Act s. 553) PAGEREF _Toc500316907 \h 82leases (s. 61(1)(d)) PAGEREF _Toc500316908 \h 82the possession element PAGEREF _Toc500316909 \h 84expropriation (s. 65(1)(e)) PAGEREF _Toc500316910 \h 843.Overriding Interests Outside of the LTA PAGEREF _Toc500316911 \h 85Lis pendens PAGEREF _Toc500316912 \h 85Aboriginal entitlements PAGEREF _Toc500316913 \h 86Soldier Settlement Act (SSA) PAGEREF _Toc500316914 \h 89the NRTA PAGEREF _Toc500316915 \h 90Others: Tax recovery/Municipal Government Act s 430-431 PAGEREF _Toc500316916 \h 91Chapter 8: Caveats PAGEREF _Toc500316917 \h 931.Introduction PAGEREF _Toc500316918 \h 93Basic Rules (LTA, s. 130-152) PAGEREF _Toc500316919 \h 94the basic effect of a caveat PAGEREF _Toc500316920 \h 952. what is amenable to a caveat? (1244034 Alta. Ltd. v. Walton International Group Inc.) PAGEREF _Toc500316921 \h 983.drafting a caveat PAGEREF _Toc500316922 \h 100the rule in Ruptash PAGEREF _Toc500316923 \h 101the Calford qualification PAGEREF _Toc500316924 \h 102other drafting concerns (Holt Renfrew v. Henry Singer; Darnley v. Tennant (Part 3)) PAGEREF _Toc500316925 \h 1044. Some Priority Issues PAGEREF _Toc500316926 \h 107Chapter 9: The Assurance Fund and Related Matters PAGEREF _Toc500316927 \h 1111. The Assurance Fund (ss. 164-182, 183) PAGEREF _Toc500316928 \h 111the basic entitlement in s. 168 PAGEREF _Toc500316929 \h 111loss arising out of the LTA (Barty v. Kerr; McWhorter) PAGEREF _Toc500316930 \h 113Barty v Kerr (1975), 8 Alta LR (2d) 275 (Dist Ct) PAGEREF _Toc500316931 \h 1132. no claim to the mud (ss. 168, 183) PAGEREF _Toc500316932 \h 1144. Limitation Periods PAGEREF _Toc500316933 \h 115the assurance fund (LTA, s. 178, Hill; McWorter) PAGEREF _Toc500316934 \h 115Chapter 10: Title Insurance PAGEREF _Toc500316935 \h 1191. Introduction PAGEREF _Toc500316936 \h 1192. Title Insurance (Ziff) PAGEREF _Toc500316937 \h 119Gold Policy: PAGEREF _Toc500316938 \h 120Chapter 1: IntroductionGeneral Description and Objectives:The purpose of this lesson is to introduce the general framework of the course, and to identify the core values that inform the relevant legal principles. You should be able to identify how these values play out in the remaining lesson plans. As we proceed through the course, you will also see the importance of understanding basic land law principles.* * *Introductionregistration as a form of priority settingthe procedural nature of registrationthe substantive impact of registration and prioritiesBasic land law conceptsDefinitionsfreeholds: an estate of land held in fee simpleleaseholds: a tenant’s possessory estate in land or premiseseasements: An interest in land owned by another person, consisting in the right to use or control the land, or an area above or below it, for a specific limited purpose (such as to cross it for access to a public road). The land benefiting from an easement is called the dominant estate; and the land burdened by an easement is called the servient estate. Sometimes easements need to be on title.mortgages: A conveyance of title to property that is given as security for the payment of a debt or the performance of a duty and that will become void upon payment or performance according to the stipulated terms.Licences: A privilege ranted by a state or city upon the payment of a fee, the recipient of the privilege then being authorized to do some act or series of acts that would otherwise be impermissible.Trusts: The right, enforceable solely in equity, to the beneficial enjoyment of property to which another person holds the legal title; a property interest held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary). profits à prendre: A right or privilege to go on another’s land to take away something of value from its soil or from the products of the soil (as by mining, logging, or hunting).Restrictive covenants: A private agreement in a deed or lease that restricts the use or occupancy of real property (i.e. specifying lot sizes, building lines, architectural styles, and the use to which the property may be put)law v. equityadverse possession: A defence to an action to recover possession by the title holder, conditional on the squatter having possession of the “correct nature” i.e. open and notorious, peaceful, adverse (no permission), exclusive, actual & continuous >10 years.Guiding Preceptsownership is divisible (into joint/shared tenancies, into trusts).title is relative (doctrine order and prioritizes property rights)Core values in land titles registrationfundamental justifications for private property ownership: economic efficiency, personhood values, and the promotion of freedom, etc. efficiency and the minimization of transaction costthe allocation of ‘risk’nemo dat quod non habet; caveat emptornotions of prudence and fairnessLaw’s internal triangle: Thief/rogue (T/”B”) steals an owner’s (O/A) property and sells it to a buyer (B/”C”):LEVMORELegal RuleProsT is availableO retrieves the property from B. B collects from TDeter T and permit the innocents, O and B, to be made whole againEncourages O and B to assist in the capture of TEncourages investment in acquiring and improving propertyDeters TO sues TT is judgment proof (must allocate loss between O and B)Disallow O’s claim against B (assumes innocent buyer)O will guard against theftO internalizes costs to protect against theft (locks, security systems)Logical b/c an innocent buyer cannot protect against theftAllow O to retrieve his property from B and attempt to encourage B to monitor his sellersRealistically, B is not na?ve to the fact he is buying stolen property and can tell by the dress, price, location, and reputation of the seller/thiefLegal rule that threatens the repossession of some stolen property from B would influence the behavior of some B’s and ultimately the profitability of thieveryB keeps property (no legal system seems to adopt such rule)O may have already replaced the stolen propertyEfficient to leave property in hands of buyer (who might be attached to new goods)B pays O precisely what B paid T for the goods in questionEX: A sells Blackacre to Bm reserving mines and minerals. B registers the transfer and an error is made I her favour. Namely – A’s M&M are wrongfully added to B’s title. B sells to C. Which of two innocent parties – A or C – is entitled to the internal estate?Turta is famous case in AlbertaIn Alberta Land Titles system C, innocent buyer prevails. Ability to absorb, diversify, or insure against the risk or loss:O may be better insurerB/c theft insurance is more readily available than title insuranceTheft insurance is less susceptible to a moral hazard problem than title insurance????Difficult for O to insure any idiosyncratic value he places on his propertyPlace burden of insurance on he who deals more regularly in the sort of property that is at issueIf B regularly purchases stolen items he is in a better risk bearing positionWhen T innocent intermediary buyer: intermediary can best predict, and therefore bear the lossesCons: lots of fact finding for individual case-by-case identification of superior insurerCan the state (or other 3rd party) claim stolen property?No. B and O are vital links in convicting thiefB but notice shady behaviour and allow possession to be inspectedO must identify his propertyPublic prosecution of property offences remains heavily dependent on the cooperation of interested private parties.5 Basic Approaches to Risk AllocationSue the lawyer if the lawyer is guilty of negligence in examining titlesCommon law (including equity) priority rulesFIRST IN TIME IS FIRST IN RIGHTRISK – equity aside, risk with purchaser. The buyer bears the risk of a defect; original owner is protected (can’t protect both).Title to land is not absolute – relative to the rights of othersCan only prove title by showing you got it lawfully from someone elseLaw can either protect security of title or facility of transfer (favoring innocent purchaser) Protective measures to be taken by purchaser (assuming no registry): purchaser must ask that seller covenant that you have title and sue if you don’t have title. Ask for the papers and a “chain of title” for past 40 years. Lawyers would keep documents of title, then purchaser would go to look at easements, leases, etc. from lawyer. Even if everything was perfect – a claimant can still come forward and claim documents were forged or can enforce dower rights.Abstract” showed your title back to the “good root”Elements of CL and equitable rules retained within Alberta’s Land titles registration system3rd party with LEGAL interest could enforce interest against purchaser regardless of lack of notice3rd party with EQUITABLE interest is not enforceable against a bona fide purchaser without notice (constructive or actual)Systems CONS: even with contractual fall back and 40-year search, it doesn’t matter how thorough or innocent the purchaser is the risk is always on purchaser and always resolved in security of title and NOT facility of transfer.ExpensiveTime-consumingPerilousPurchaser can discover he holds bare husk of legal title as a trusteeDeeds systems: adopted some but not all the common lawTwo deed systems in AlbertaTheory: government would create a repository for the filing of deeds and other deeds relating to title (no longer with lawyers) and system encouraged people to deposit them. Now: one can go to registry and pull them and prepare a list (like at common law). If the document was not registered on title it could have severe implications for whoever was held under that document so you were IMPELLED to register so you were noticed on a sale.Just registering the document in no way validates the thing being claimed in the document – you registered for what it was worth (it might have been a forgery). No guarantee that what was on the title was VALID. Someone could come late, and say “I didn’t sign that deed, I’m actually the owner, the deed your rec’d is also a forgery”. Risk is somewhat alleviated for purchaser; true owner must put stuff on the booksIssue: still need to do search and search might not be conclusiveTitle system: expensive and doesn’t get rid of all errorsAdverse possession: if someone is in possession for 10 years and if there is an adverse interest, it will be wiped out, where it can “quiet the title” and smooth over the defects. AP is a counter balance to the risk the purchaser assumes. Required to register b/c if you don’t an innocent purchaser will take free of them. Government certifies/validates title “Certificate of Title” Certificate is remarkable b/c if you have certificate then the buyer doesn’t need to search the title b/c they can see certificate of ownership – no historic search is neededPurchaser is entitled to rely on certificate without need to determine validity IF THERE IS A MISTAKE: the purchaser can KEEP THE LAND (Reversal of CL)Where did the poo go? Where did the risk go? Innocent purchaser no longer bearing risk of fraud (they go home), the seller takes the risk. So, if buyer gets certificate through rogue the owner gets kicked out.Buyer privileged over security of tenure. Owner is entitled to make claim against government. Everyone with land titles systems fronts some money to fund issues where there if fraud the purchaser keeps the property and the original owner gets money to be made whole.YOU CAN GIVE A BETTER TITLE THAN YOU”VE GOTROGUE can give a title. “You can’t give that what you don’t have” Latin crap is gone in land titles. Not everything has to be on title: i.e. Short-term leaseFacilitates transfer of land, economic efficiency (might sacrifice personhood values)Title insurance:Insurance is a common way to protect against risk. In the US, land registries are spotty and title insurance is BIG. Usually it’s the purchasor who buys the insurance and they bear the risk.Chapter 2: Priorities at Common Law and in EquityGeneral Description and Objectives:In this lesson, we examine the rules devised by the common law and equity to resolve priority issues. As you might anticipate, the general rules are affected by numerous exceptions and qualifications. Given that my goal here is to set the stage for the study of systems of registration, the treatment of this topic will dwell on general rules and policies. In the lessons to follow you should consider the ways in which the modern rules of land registration conform with or deviate from the common law and equitable rules studied here.As a preliminary matter, we will have to consider a substantive point relating to the nature of mortgages, including ‘equitable mortgages’.IntroductionThe Common Law Style of Conveyancing (Youdan; Neave)RULE: Qui prior est tempore, potior est jure – first in time is first in rightstill apply to some personal propertyOne can have a legal or equitable interest, their strength over each other can come into question then you have 4 permutations: L v LFITFIRQui prior est tempore, potior est jure (first in time, first in right) & Nemo dat quod non habet (you can’t give what you don’t have)Even BFP second in time will loseL v E Prior L estate postponed if L was fraudulent and E was BFPE v L Legally will normally win if BFPE v E (when purchaser doesn’t always bear all the risk)When the equities are equal, law prevails, first in timeThe good root of titleThe effect of proving good titleIntrinsic and extrinsic defectThe importance of adverse possessionTitle to land is not absoluteAbstracts with summary of documents and events relevant to the vendor’s title were documented“An instrument of disposition dealing with or proving on the face of it (without the aid of extrinsic evidence) the ownership of the whole legal and equitable estate in the property sold, containing a description by which the property can be identified, and showing nothing to cast any doubt on the title of the disposing parties” - Limits the vendor’s obligation to prove his titleApplied absent other contractual provisionsDoes not affect claims made by 3 parties3rd party equitable claims not enforceable against BFPFVWN w/ legal title insecurity of the purchaserinvestigation of chain of title does not protect purchaser from interests created by operation of law (dower, fraud). Searches were expensive Searches needed to be repeated afresh on each dealing of landleases: Landlord sells property occupied by tenant. Tenant is first in-time and lease is conveyed with property. Valid leases include: Identification of the partiesDescription of the “demised premises”A demise of the premises for a certain termDate of commencement (present or future)Rent, if any (not requirement can grant term of years for free). Written requirements – leases for over 3 years need to be done in writing or not legal lease (may be equitable lease). If you want to lease part of premise may actually need approval for “subdivision”. Leases under three years can be oral and have legal effect. Mortgages: legal or equitableThe idea of postponement: a mortgage postponement can take the form of replacing an existing mortgage with a later mortgage (becoming higher in priority). Basically, you’re drawing up your loan again with your lender and moving the due dates back. Your interest costs go up, and there may be a new origination fee that you roll into the loan,?Mortgage 101Money borrower = mortgagorMoney lender = mortgagee (usually bank)X is mortgagor. Y Bank Co. wishes to gouge X (Mortgagee).Mortgagor’s contribution of X: conveying title. At common law a deed of mortgage is conveyed to the bank as security.What does mortgagor retain? They retain an equitable interest – equity of redemption. At CL: X, in return for the loan conveys legal title of Blackacre to Y Bank Co as security.Proviso for reconveyance: if the loan plus interest is paid off on time legal title returns to mortgagor.Legal day or law day: when payment is due. If payment is late (doesn’t matter by how much time) the proviso for reconvayance would not be engaged. AT CL the lender had no obligation to reconvey if mortgagor defaultedEquity intervened and said “this is transfer of title for security purposes, if law day has passed yet the mortgagor pays principle and interest (make the lender whole) then equity will protect the borrower. Terminating the equity of redemption: foreclosure. To allow foreclosure in purest form and whip equity of redemption and give full title to lender is overreaching so equity can order a sale of the property (lender is paid in full, and residual funds are given back to borrower). Second mortgage? Legal or equitable?? Second mortgagee is second in line so they usually ask for a higher interest. Second is equitable: because there is no title to hand overOther equitable mortgages are possible (equitable liens…). On sale of property where full purchase price isn’t paid equity implies a vendor’s lien (can be negated by contract). Equitable mortgage can arise where bank agrees to lend and asks property owner not to convey but asks owner to deposit title documents with the bank so bank can secure interest in eyes of equityEX: Property was once worth 1.9M it is now worth 1.2M. 1st mortgage: 500,000 owing (was once worth 600,000). 2nd mortgage 800,000 now owing. 3rd mortgage 250,000 now owing. 15.5 M Total Owing. First mortgage might wish to bring foreclosure. 1st situation: if the first mortgage succeeds in foreclosure all the subordinate interests of lender are whipped out. They are not binding on the first party. When the first mortgagee wipes out the borrower’s equity of redemption it wipes out everything clamped onto that. 2nd and 3rd couldn’t make any applications against the land. Possible court would say: we should sell land and divvy proceeds. 2nd and 3rd are adverse to full foreclosure but a sale would mean 1st would get 500K, the 2nd would take a hit b/c there would be only 700K left after first sale. 3rd wouldn’t get ANYTHING. Second and 3rd mortgagee might wish to pay off first mortgagee to redeem that mortgage. They can take it on as their own asset. Any of the subordinates can redeem. FORECLOSE DOWN: wipes out all subordinate interests at common law REDEME UP: 2nd or 3rd mortgagee pay off 1st mortgagee and acquire legal title. Charge: borrower keeps legal title Vendor’s lien: 1.?Real estate.?A seller's lien on land as security for the purchase price. ? This lien may be foreclosed in the same way as a mortgage: the buyer usu. has a redemption period within which to pay the full purchase price. — Also termed?grantor's lien.2.?A lien held by a seller of goods, who retains possession of the goods until the buyer has paid in full.Land Titles Act treatment (ss. 58, 59, 103)Implied covenants in transfer58(1)??In every instrument transferring land for which a certificate of title has been granted, subject to mortgage or encumbrance, there shall be implied the following covenant by the transferee both with the transferor and the mortgagee: That the transferee will pay the principal money, interest, annuity or rent charge secured by the mortgage or encumbrance, after the rate and at the time specified in the instrument creating it, and will indemnify and keep harmless the transferor from and against the principal sum or other money secured by the instrument and from and against the liability in respect of any of the covenants contained in the instrument or under this Act implied on the part of the transferor.(2)??If a transferee declines to register any such transfer, the transferor or the mortgagee may by notice call on the transferee or any other person or persons that a judge may direct to show cause why it should not be registered, and on the return of the notice the judge may order the registration of the transfer within a time named or make any further or other order and on any terms as to costs and otherwise that to the judge seem proper.RSA 1980 cL5 s62Negation and modification of implied covenants59(1)??Every covenant and power declared to be implied in any instrument by virtue of this Act may be negatived or modified by express declaration in the instrument.(2)??In an action for a supposed breach of any such covenant, the covenant alleged to be broken may be set out and it may be alleged that the party against whom the action is brought did so covenant, precisely in the same manner as if the covenant had been expressed in words in the transfer or other instrument, any law or practice to the contrary notwithstanding.(3)??Every such implied covenant has the same force and effect and is enforceable in the same manner as if it had been set out at length in the transfer or other instrument.(4)??When any transfer or other instrument in accordance with this Act is executed by more parties than one, the covenants that are by this Act to be implied in instruments of a like nature shall be construed to be several and not to bind the parties jointly.RSA 1980 cL5 s63L v LQui prior est tempore, potior est jure (first in time, first in right)& Nemo dat quod non habet (you can’t give what you don’t have)Even BFP second in time will loseHypothetical: EX: A conveys legal title to Blackacre to B, A then purports to convey Blackacre to C. B prevails, first in time & B had nothing to convey to C.EX: A owns Blackacre. A leases Blackacre to B. A sells Blackacre to C. C made reasonable inquiries and undertook a reasonable inspection of the premises, but is nevertheless unaware of the lease. C is bound by lease, RULE first in time first in rightL v E (e.g., an equitable mortgage)Whipp v Northern Counties of England Fire Insurance, (1884) 26 Ch D 482 (legal v equitable)Facts: Crabtree mortgaged two of his company’s properties (Northern Counties of England Fire Insurance) and handed over the title deed as security so Crabtree can’t sell the property. Deeds & mortgages were put in a safe for which Crabtree had a key. Crabtree removed deeds (not mortgages). Crabtree then got a third mortgage from Mrs. Whipp and when this was executed Crabtree did not show Mrs. Whipp the deeds for the other mortgages that existed. Foreclosure brought against Mrs. Whipp and Crabtree’s trustee in bankruptcy by 1st mortgagee. Mrs. Whipp counterclaimed asking that the securities be declared fraudulent and void against her or in the alternative that they might be postponed to her security (so she would be 1st mortgagee) and that the company might be ordered to convey the property to her. Trial: Company postponed (order reversed) to Mrs. Whipp, company appealed. Issue: What conduct in relation to the title deeds on the part of a mortgagee who is the legal estate, is sufficient to postpone such mortgagee in favour of a subsequent equitable mortgagee who has obtained the title deeds without knowledge of the legal mortgage?Analysis: When legal mortgagee (bank) does not obtain possession of the title deedsE v L: prior equitable interest & BFP w/ legal interest: L winsFRAYD EXCEPTION E v L: prior equitable interest and the legal mortgagee knew of this, E wins b/c:L is mala fide purchaser/ taking an interest with knowledge of prior interest is fraudulentWhen legal mortgagee (bank) has obtained possession of title deeds, and subsequently gives them up Not possible for bank to be a bona fide purchaser for value because you saw the deeds!E v L: E wins, b/c L saw titles and must respect them (first in time)L v E: if L gave up deeds to enable the mortgagor to defraud a subsequent mortgagee, then fraud. E wins, even though L was first in time.RULE: Court will postpone the prior legal estate to a subsequent equitable estate Where the owner of the legal estate has assisted or connived at the fraud which has led to the created of a subsequent equitable estate, without notice of the prior legal estate; of which assistance or connivance the omission to use ordinary care in inquiry after or keeping title deeds may be, and in some cases has been, held to be sufficient evidence, where such conduct cannot otherwise be explainedWhere the owner of the legal estate has constituted a mortgagor, his agent with authority to borrows and the estate thus created has by the fraud or misconduct of the agent been represented as being the first estate[OVERTURNED IN ALBERTA] BUT that the court will NOT postpone the prior legal estate to the subsequent equitable estate on the ground that any mere carelessness or want or prudence on the part of the legal ownerCarelessness on part of PL, maybe gross negligence but that’s still not enoughMrs. Whipp wasn’t induced to lend moneyLEGAL (1st mortgagee) V EQUITABLE (Whipp)1st in time is first in right, unless the A (company) is guilty of fraud and would move a court to postpone their interest. Company was careless, documents were in a place where Crabtree had access.the law in 2017MgGarryin Way 3rd ED: Legal mortgage followed by equitable mortgages: 954: it was held that an earlier legal mortgage couldn’t lose priority by carelessness or gross negligence but only by fraud. BUT the law appears rather to have been by gross negligence in failing title deeds, or perhaps failing to retain them, the mortgagee could lose priority against a later mortgagee who exercised due diligence.Tyrell v Mills [1924] 3 W.W.R. 387 adopts thisGross negligence in handling of title documents COULD likely PRODUCE POSTPONEMENT in Canada in 2017.E v LLegal wins if: BFPFVWN1) Bona fideNo notice of prior interestCome with clean hands2) Purchase3) of legal estate (lease, mortgage, land)4) For Valuable Consideration (non-nominal5) Without noticeActual (subjective awareness)Constructive (out to have known. In the eyes of equity, you ought to know if there were necessary steps to act prudently to find the true state of affairs)Imputed (on behalf of an agent)6) Of the Equitable interestHypothetical: Agreement to sell Blackacre. Real-estate agents are Rob & June. Buyer signs. New buyers (B2) offer more money. Sale 2 gets completed first. First deal is equitable (interest in land before conveyance). 2nd transaction brought to completion. Rob & June go Rogue. Legal wins, though second IF BFP of the legal estate FOR VALUABLE CONSIDERATION WITHOUT notice of the equitable interest they gain priorityBona fide is different from without noticePurchase vs valuable considerationGlenelg Homestead LTD v Wile, 2005 NSCA 4 (equitable v legal, deviates most from 1st in time is first in right, dominant in Torrens title) (Purchaser for Value)Facts: Wile (appellant). Leon (appellant’s father) acquired two lots of land by warranty deed from his mother in 1972. Land was said to be 3 acres and bound on the north by lands of Nathan Hirtle, Zenas Hirtle, and John Mossman. In 1974 land was surveyed by Neiff Joseph and described lot as being 2.55 acres and bound on the north by Rose Bay.Based on survey, land sold from Mr. Wile to Glenelg for1800 after walking an inspecting lot based on survey. Lawyers wrote in transaction “the second lot as described in a deed from Lena M Wile) to Leonard Wile. In 1996 Leo conveyed his remaining lot to his son Kevin Wile though neither of the knew where it was stationed and deed registered in 1996. Mortgage to Faye.Deed registered by Glenelg in 1998 before selling (20 years after buying).2001 – Kevin’s interest was transferred to Faye. Kevin first to register, second to buy. Analysis: Valuable ConsiderationS 18 of the Registry Act states that “valuable consideration must exist”Marriott v Feener: $1.00 was valid consideration but DF unable to prove they were purchasers for valueMcNair (citing Marriott): distinguishing “nominal consideration” from the payment of “valuable consideration”$1.00 was not valuable consideration in the context of section 18 of the Act, the money would be sufficient in a dispute to enforce required performance of the bargain between parties. Kevin was not a purchaser for value. Kevin’s “valuable” time, effort and funds after rec’ing the deed to search title location and were also not enough to be “valuable” under the Act. Anything done voluntarily or subsequent to the delivery of the deed to improve the worth of the property to the grantee, which is not in return for the deed, cannot logically constitute the consideration for the previous bargain to convey the propertySale valid, but not enough to give Kevin priority as a BPVDeed Under Seal Is “Valuable” consideration needed when the deed is under seal?A deed under seal does not remove the necessity of proof of valuable consideration in s 18 of the Registry Act to defeat the title of the previous purchaser for valueHolding: Deed to Glenelg should be rectified.E v EWhen all else is equal, then first in time, first in right (FITFIR).Rule of equity: between two persons whose equitable interests ae of precisely the same nature and quality, and in that respect precisely equal, the possession of the deeds gives the better equity (Rice)**mortgage by deposit of title deeds creates an Equitable Mortgage.Rice v Rice, (1853) 61 ER 646 (Ch D) (E v E)Facts: M Rice purchased from G Rice Moore and L Rice (PLs) a leasehold property. Only Moore rec’d his share of the money. Title-deeds were delivered up to the purchaser (M Rice). M Rice deposited assignment and title-deeds (equitable mortgage) with Ede and Knight (DFs) with memorandum of deposit to secure an advance, M Rice then absconded. Ede is equitable mortgagee.Bill was for payment of purchase-money (financing): Issue: Who has priority? The vendors (Vendor’s lien: lien for unpaid purchase-money) or the equitable mortgages (Ede)?Analysis: RULE for adverse equitable interests:As between persons having only equitable interests, if their equities are in all other respects equal, priority of time gives the better equity or qui prior est tempore potior est jureApplicationBoth parties have equitable interests – must consider nature and condition of their respective interests, the circumstance and manner of their acquisition, and the whole conduct of each party with respect theretoRule of equity: between two persons whose equitable interests ae of precisely the same nature and quality, and in that respect precisely equal, the possession of the deeds gives the better equityDF have better equity, cannot apply qui prior est tempore potior est jure The PLs/vendors chose to leave part of the purchase-money unpaid, yet executed and delivered to the purchaser a conveyance, in effect assuring the mortgagee that the mortgagor had an absolute indefeasible title both in law and equityPlus, the assignment document said that A had been paid in full, when in fact they had not. This leaves Ed with the impression M Rice has legal and equitable Mortgagee was justified in trusting to the security of the equitable mortgage by deposit of the deedsRatio: only when both parties have exactly the same equity interests does the maxim qui prior est tempore potior est jure apply. Otherwise the circumstances, nature and condition of their respective interests, the circumstance and manner of their acquisition, and the whole conduct of each party with respect thereto determine who has the more equitable interest. Australian Guarantee Corp (NZ) Ltd v CFC Commercial Finance Ltd, [1995] 1 NZLR 129 (CA) [priorities btwn unregistered mortgages]Facts: AGC becomes first in time AGC entered hire purchase agreement with Dante (borrower) for an advance of 100,320 for purchase of Mercedes. It was a term of the mortgage that the property was not subject to any encumbrances and that Dante would not further encumber the property without consent of AGC. Mortgage not in registerable form. AGC did not require the title to the Blackacre property to be handed over. CFC becomes second in time Four days later CFC lent Dante 125,000 secured by a mortgage given by Dante as mortgagor to CFC as mortgagee over the property at Blackacre (CFC did a search of the title, showing unencumbered). AGC files caveat. Title of Blackacre was handed over to CFC with signed memorandum of mortgage (equitable)AGC registered a caveat at the land registry office claiming estate in Blackacre with collateral deed of mortgage and memorandum. CFC first to registers charge. CFC registered its mortgage at the Companies Office in the Register of Charges. Two months later CFC and AGC became aware of each other’s mortgagesNov 25: CFC to AGC: letter requesting consent for CFC to register 1st mortgage. CFC files caveat. Caveat by CFC on Dec 15April 1988: Letter CFC to ACGApril 1988: Letter from AGC to CFC: pending Mercedes valuation, they will consider annexing consent Early 1988 Dente in defaultSept 1988: final instalment of 103K not paid, default notice issuedCFC seeking a declaration that it was first charge over the Blackacre propertyTrial: CFC was entitled to priority and was first charge over Blackacre.Analysis: The priority of equitable interestsRULE: to consider whether the secondary equity holder has established, at the time of the decision, that there has been conduct sufficient to discharge the first equity holder’s prima facie priority. It will be if the conduct is of such significance that the merits are no longer equal. That will be so if the conduct of the first equity holder has led the second equity holder to believe that there was no prior equity, by clothing another party with the means to confer an interest apparently not subject to the prior interest. Court should have regard to all relevant conduct of both parties before and after the creation of the equities. Factors:AGC’s delay in registering its caveatFailure to register a caveat may justify a reversal of priorities of equitable charges [very circumstantial]Monday Sept 14 hire-purchase agreement and collateral deed of mortgage were completed, 4 days later AGC wrote to Hamilton solicitors with instructions to lodge caveat. 5 days later caveat (Wed Sept 23) caveat was lodged. No explanation for delay. Reasonable turnover is 1 day. CFC searched title Sept 16. But for the delay CFC would have had notice of prior charge.AGC would have had to move promptly, but knowing Dante might be approaching further lenders they should haveAGC’s action in not requiring the title to the Blackacre property to be handed over on settlementEquity holders can lose priority by allowing evidence of title, such as deeds, share certificates, to remain in the possession of the borrower thereby allowing borrow to lead a second equity holder to believe that a charge was a first priorityThe prudent lender would: obtain written evidence of the loan and to possess himself of the documents of title to the property offered as security to 1) prevent the borrower from fraudulently disposing of or encumbering the property on the footing that it is unencumbered and 2) facilitate realisation of the security in the event of default (citing Cash Resources). CFC would not have made its advance had the title not been available, which it would not have been had AGC insisted on the registered proprietor’s copy of the little being handed over on settlementCFC’s delay in challenging AGC’s priorityDelay was significantCFC became aware of AGC’s caveat November 25. Six months later CFC took action (April 1988) wrote to AGC (no response)Eight months later (December 1988) CFC wrote again to AGCIn April 1989 (1y5mo) after discovering caveat that CFC notified AGC of its intention to challenge AGC’s priorityIs CFC estopped due to delay because it left AGC to believe it was the 1st priorityHolding: CFC wins. The combination of AGC’s delay in registering the caveat and the failure to obtain the title justify reversing the priorities.Relief: Even a year after CFC learned of AGC’s interest there was adequate security for full recovery by both parties, deterioration resulted from fall in value of land and the high penal interest accruing to both lendersUpon CFC learning about AGC, AGC was owed 54K and <150K owing to CFC. Market value probably exceeded these combined. Put AGC in the position it would have been had CFC note delayed, so AGC is owed 54K and its proportionate share of the interest earned from the time of the sale of land on the net proceeds of saleComments: Neither mortgage registered so Torrens does not apply – rely on CL rulesAG delayed registering so when CFC searched they found nothingAGC did not require title to be handed over so they armed Dante with power to get second mortgageSubsequent conductAGC did not realize security promptly, meaning interest accrued Take away: Conduct after creation of interest is relevantCourt dealing with equity Is not bound by “winner takes all” approachEven in a Torrens rule, CL rules built into new systemChapter 3: Deed (or Recording) Registry SystemsDocuments: Solicitor’s Abstract; title opinion Approximate Time Allocation: 2 classesGeneral Description and Objectives:The purpose of this lesson is to introduce the distinction between deeds and title registration systems, and to explore the general nature of the deeds approach.In this lesson, you will see that the effect of a deeds system is to alter the common law and equitable rules concerning priorities. The nature of this alteration depends on the specific elements of the system at issue. In this lesson, three models will be introduced. You should keep in mind, however, that these represent only general approaches to registration.In the latter part of the lesson, we will attempt to apply this learning to the registries that exist in relation to Crown land in Alberta. As an aspect of this, we will broach several issues concerning Crown grants and the ownership of Crown land.MAINLY SOLVES PROBLEM OF UNKNONN INTERESTSIntroductiondeeds v title – the core differencesQuebec still uses deedsNewfoundland, Nova Scotia New Brunswick are deedsOntario almost finished transition Deeds to Land Titles (decades)Parts of Manitoba are deeds, but close to all Land TitlesAlberta still has elements of deeds systemsStyles of Deeds Systems (Mapp)EX: B conveyed Blackacre to X by a perfectly valid deed that X did not register. B subsequently purported to convey Blackacre to C by a deed that would have been effective if B had still owned Blackacre. race (to register)No ownership shall pass under conveyance until it is registeredCommon-law first in time, first in line just slightly modified hereEX: unregistered conveyance from B to X was in abeyance; B retained ownership; C need only register before X registers in order to acquire BlackacrePrior knowledge by C of prior conveyance to X does not deprive him of the victory gained if he wins the raceEquity intervened and said, notwithstanding statute, C would be bound by the prior equitable interest of X unless C acquired legal ownership through registration as a purchaser for value WITHOUT noticeNewfoundland Keystone Provision: Section 10An instrument made after March 27, 1862, and not proved and registered, and a mortgage by deposit of deed without writing, shall be judge fraudulent and void both at law and in equity, as against a subsequent purchaser or mortgagee for valuable consideration who first registers his or her instrumentThis appears to be a “race” legislationAnalysed in Caribou 1997: “where notice of the instrument is acquired otherwise than through the Registry of Deeds, the legislative purpose is accomplished and the party having such notice will not be able to claim priority merely by registration. This has consistently been considered the legal effect of s 10, and its counterparts, notwithstanding the absence of explicit wordsBecause of judicial interpretation, what appear to be “race” statute, in the context of the Deed system may be supplement by “notice gloss”. Statute says no such thing about notice being relevant but court adds notice.notice (Massachusetts statute)conveyance effective as between the grantor and his heirs, and the grantee, even if it were not recordedIf you purchase land without notice of prior interest they achieve priority by virtue of being a purchaser without notice; EX: X acquired Blackacre through unrecorded conveyance from B. B retained no interest in Blackacre. B had statutory power to divest X’s ownership by conveyance to one who satisfied the requirements of the statute. C must be purchaser for value and innocent of any notice of prior unrecorded conveyance to X when he purchases By recording X can give C statutory notice and prevent him from purchasing without noticerace-noticeEnglish Registry Act for Middlesex Country 1708X acquiring Blackacre through his prior unregistered conveyance from BAct states a conveyance is VOID only against a subsequent purchaser who first registers his conveyanceC must acquire his conveyance from B as a purchaser without notice of X’s interest (before X registers – notice), and register before X registers (race). S 18 of the Registry Act of Nova Scotia (Glenelg) is race notice.To what extent do these systems attempt to supplant the common law and equitable priority rules?These rules can be modified by Statute (not in constitution)Resolving Priority Issuesthe continued relevance of the common law and equitable principlesunregistered interests application of principle (Quassa; Rockway Holdings)CIBC v QUASSA, [1996] NWTJ No 17 (SC) (variation of notice model)Facts: Paul and Elisapee Quassa are lessees of Lot 39 (Iqaluit) and are in default. Lessor is Commissioner of NW Territories. Lot 39 is Crown land. No certificate of title has been issued so the property is not registered at Land Titles registry. Qussas’s leasehold is registered with ad hoc Department of Municipal and Community Affairs (Yellowknife) (registry not based on statute but has been used by government and solicitors).On July 22, 1993, the Quassas executed a mortgage of their leasehold interest in favour of the CIBC Mortgage Corporation (this could be a legal mortgage, but court says bank has equitable. IF exam, this would imply legal mortgage). The amount was $256,250.00 secured by lease on Crown land.On July 21, 1994, the Quassas made an agreement to sell their interest in the property to the defendant Logothetis. The agreement was a handwritten document reciting a total purchase price of $230K payable by a down payment of $35K and monthly instalments of $4K.? The respondent made the down payment and took possession of the property (Quassa were on the lease, Logothestis only paid partially so equitable).The mortgage was already in default by the date of the agreement.In March of 1995 the CIBC commenced foreclosure proceedings.? The mortgage debt is now in excess of $268,000.00This mortgage was consented to by the Commissioner as lessor and a copy of the mortgage was deposited at the department office in Yellowknife.Not negligent for not “raising title”: adding the title to the voluntary deed system.Issue: To determine priorities between a mortgagee and a subsequent purchaser who claims to be a bona fide purchaser for value without notice of the mortgagee’s interest. – THIS SHOULD NOT BE THE CONTROLING QUESTION the BFP as the controlling rule ONLY HAPPENS WHEN IT IS E V L. Analysis: parties are agreed that, in the absence of statutory registration provisions as in this situation, the common law applies. Past case law (Pitts) judicially upholds ad hoc registryNorm to use ad hoc registryLogothetis argues CIBC should have registered mortgage pursuant to Land Titles Act so he would have known about the mortgage. However admits he did no search of title whatsoever so it is only speculative to assume this would have fixed the situationAd hoc registry was maintained for many years so CIBC was not negligent in failing to raise title and no evidence that title could have been raised ???No reason to displace rule of equity “first in time”Is Logothetis a purchaser for value?Logothetis has not paid full purchase price and now has noticeLAW: Purchaser must pay the full amount of the purchase before receiving notice of the prior charge to claim priority as a purchaser for valueZIFF: apparently this is the law but what if you had paid almost all?Actual and constructive noticeConstructive notice: where the purchaser has either deliberately or carelessly abstained from making inquiries that a prudent purchaser would makeDid the purchaser have some knowledge which ought to have put him on inquiryWould purchaser have acquired the necessary information but for his own gross negligenceGross negligence: aggravated carelessness of someone who disregards the standards of care of the reasonable person and indicates a lack of concern for consequences of one’s conduct though the risks are obviousLogothetis did not hire a solicitor and relied on vendors when they told him there were no encumbrances but, if there were, they were minor and would be clearedLogothetis ‘s care was gross negligence – with complete disregard for the care that a prudent purchaser would takeRespondent therefore had constructive notice or mortgageLogotheits will have to sue Quassas to recover his $40,000.RIGHT RESULTS, flawed analysis.No explanation for why CIBC’s interest is equitable. What type of registry system was used here (race, notice, or race-notice)NoticeNo statute – so no requirement by statute to use officeIf you don’t you run the risk of not supplying sufficient noticeThe placing of documents provided notice for whatever use that has at common law or equity – LIMITED NOTICE SYSTEM CIBC v Rockway Holdings, (1996) 29 OR (3d) 350 (Gen Div) (race-notice-notice)Facts: B grants to A “something” (profit a prendre, gravel to be extracted)B grants to C a security interestKatmos owns Concession XIICharge on property was registered in 1991 to secure 1250K loaned from CIBC to KatmosIn 1989 Katmos has “licence” agreement with Rockway Holdings for exclusive to remove all gravel from the property“licence” agreement registered on title 1992 (after CIBC’s registration) – licence is not an estate in land but an agreement between parties CIBC submitted a review of their opinion of the property with a draft declaration of possession to a credit clerk within CIBC (Benaszek)Draft declaration: “There are no leases or tenancies affecting the Real Property save and except for a gravel pit agreement with Rockway Holdings Limited”. Benaszek reviewed declaration.Issue: Who is to prevail CICB or Rockway? CIBC was second in time, but first to register. Did CIBC have notice? What type?Law: Section 70(1)?of the?Registry Act?provides: 70(1) After the grant from the Crown of land, and letters patent issued therefor, every instrument affecting the land or any part thereof shall be adjudged fraudulent and void against any subsequent purchaser or mortgagee for valuable consideration without actual notice, unless the instrument is registered before the registration of the instrument under which the subsequent purchaser or mortgagee claims.Section 71 of the same Act provides:71. Priority of registration prevails unless before the prior registration there has been actual notice of the prior instrument by the person claiming under the prior registration.Analysis: C must have notice, not constructive notice.Ziff: imputed notice should be good enough, if lawyer knows you knowWas there notice on facts? Held YESNo requirement that there be actual notice of the precise terms of the agreement, such as the amount of the consideration passing between the parties or the term of the agreementTEST: whether the registered instrument holder is in receipt of such information as would cause a reasonable person to make inquiries as to the terms and legal implications of the prior instrument.Application of facts: actual notice was given in declaration of possessionJudge says there is “profit a prendre”Is notice of a licence equivalent to profit a prendre? Profit a prendre is interest in land and licence is notHeld: you don’t have to have details of the interest to have notice.What if you have 1 document? – it refers to another document – the “agreement” – is that actual notice of the “referred to agreement”. Comments: If Exam: describe type of registry system of section 70 and section 71Notice-raceRace notice in purest form: you purchase without notice and win race. Here: purchase without notice – rec’v notice – register. 71 – lose if you get notice after purchase and before registerRace – notice – notice. Purchase without notice, register without notice.ROCKWAY WINS Foster v Beall 1868 CarswellOnt 142A holds mortgage over owner. B’ acquires property from B; conveyance states it is subject to mortgageB grants mortgage to CC registers before AA v CA claims: “that C is affected with notice of the PL’s (A’s) mortgage by reason of one of the conveyances in his (C’s) chain of title (the conveyance to James Beall (B’s)) being made subject to it. Mr. Blake’s contention is, that he has thereby actual notice – actual, though imputed only, and not proved.Court: “I doubt this: I incline to think it is constructive notice only, and that actual notice of a nature to affect his conscienence is necessary in order to avoid the effect of Smith’s (c) prior registration).Reference in document to third document is NOT ACTUAL NOTICE BUT IS CONSTRUCTIVE NOTICE.Is this different from Rockway? Client didn’t see profit document but was told about it. The Assignment and Registration of Crown Mineral InterestsPresent system: Two types of instruments capable of registration: transfers and security notices pursuant to the terms of Mines and Minerals Act (all other interests are unregisterable)Unregistered interest priority is based on common law or equityTransfers: in relation to an agreement a specified undivided interest in an agreement or part of the location contained in an agreement, a transfer in the prescribed form and capable of registrationTransfers must be approved by officials with the Department to ensure it is accordance with s 91 of the Mines and Minerals Act, then can be registered. Under Act Crown claims it is only right to deal with the current registered leaseeCrown only bound by a transfer from the time of registration (not on receipt of application)Crow can ignore anyone other than the holder or record for the time being of its leaseCrown may not enforce obligations under the lease against anyone other than its holder of recordHypothetical: A gets copies of deeds, sells to B first and C second. C registers. Who wins?Orthodox view: C wins. In keeping with Deed system.Unorthodox view: C would not succeed if he had actual or constructive notice of B’s interest or was not a purchaser for value. Not in statute BUT “notice gloss”, it is equitable fraud to then register. Assumption that equity supplements the statusCrown Lands in Alberta: Generallypatented and unpatented landsCrown patent is how the Crown grants land (confers a fee simple via patent or “notification”)Letters patents then generate certificate of titleEX: Crown grants “Blackacre to A”No words of limitations, A gets fee simpleCujus est solum “from heavens to hell”, which would imply the inclusion of mines and minerals BUT s 35 Public Lands Act deems reservation of some minerals (some grants to CPR and Hudson Bay company before this act)EX: Crown grants “Blackacre to A, including mines and minerals”Minerals except gold and silver as reserved by Mines and Minerals Act s 10EX: Crown grants a “grazing lease” (little bit like a profit a prendre) to A, where does A register?? Grazing leases are themselves transferableANS: Public Lands Act registryEX: Crown grants Musky Oil a mineral lease (often a profit a prendre): where does Musky Oil register?ANS: Mines and Minerals Act registryPLA s 115Public Lands ActEffect of registration of assignment115(1)??Notwithstanding anything in an assignment, but subject to this section, the interest of an assignor in a disposition ceases on registration of an assignment of the disposition and, on that registration, the assignee becomes the holder of the disposition.(2)??An assignment registered under this Part is valid against and takes priority over any unregistered assignment.(3)??Insofar as an assignment affects the Crown, the assignment is deemed to take effect from the time of its registration.notice or race?Mines and Minerals Act s 91-94Registration of Transfer: 91(6)??Insofar as a transfer affects the Crown, the transfer is deemed to take effect from the time of its registration. RACE SYSTEM Literally, but notice due to implication of equitable principles [no case law to support this theory]Registration of Security Notice: 94(4)(4)??A security interest in respect of which a security notice is registered has priority?????????????????????????? (a)??? over any other security interest acquired before the registration of that security notice unless a security notice in respect of that other security interest is registered before the registration of the firstmentioned security notice,?????????????????????????? (b)??? over any transfer acquired before the registration of that security notice unless that transfer is registered before the registration of that security notice,?????????????????????????? (c)??? over any builder’s lien acquired before the registration of that security notice unless that builder’s lien is registered before the registration of that security notice, and?????????????????????????? (d)??? over any interest, right or charge acquired after the registration of that security notice. Some high stakes for deeds and they are regulated by just a few subsections. In comparison, the land system is regulated by a statute of ~200 sections.Crown grant of mines and minerals (Public Lands Act, s. 35; Mines and Minerals Act, s. 10; Law of Property Act, ss. 55-58). grant by private holder (Law of Property Act, ss. 7, 55-58)ownership of beds and shores (Public Lands Act, s. 3)Registries for Crown Lands (Bankes)surface lands under the Public Lands Act (ss. 113-117)registration under the Mines and Minerals Act, Part 6.Transferssecurity interestsunregistrable interestsother matters application of principle (Hawker v. Hawker)Hawker v Hawker, (1969) 3 DLR (3d) 735 (Sask QB)Facts: Lee Hawker (PL) seeking to recover seven mining claims (Guissie 4-10) that were sold and transferred by the DF June to PL. PL then recorded by records officer. In June 1964 the AR staked 3 claims (Gussie 1-3) and gifted them to June. These were recorded in June’s name. In August 1964 claims 4-10 were staked and June’s name was written on corner stakes. AR paid for staking. 4-10 were not contiguous on 1-3. Gussie 4-10 recorded in June’s name. Certificates were kept in dresser drawer.Feb 1965, June left the home taking the children and wrote “ I hereby sign over all interest in Gussie 4- 10 claims, Tags and B.B. Forms as of today to A.R. Hawker of Uranium City, Sask. to do with as he sees fit.” June left with claim certificates 1-3. AR gave June signed check and told her to go to the office and get the claims recorded.Issue: Who is entitled to the staked claimsAnalysis: Presumption of giftWhen a husband causes property which he has acquired to be recorded or registered in his wife’s name that he intended to make and made a figt of it to his wife. Evidence rebuts this presumptionAR never intended to give the claims to JuneThe PL’s rightsRegulation s 11: Subject to these regulations, a claim holder shall have the exclusive rights to explore and prospect for the minerals in his claims; and he may hold his claim from year to year for a period of ten consecutive years from the date of the claim certificates. Recorded claim may be transferredClaim holder may obtain certificate of improvements and become entitled to rec’d a lease of the claimReg 3(c): “a plot of ground staked out or acquired as a minimal claim under these regulations”. June thus had an equitable interest in the land included within the boundaries of these claims. The resulting trustGeneral rule: When property is conveyed to someone other than the purchaser, a resulting trust will be presumed in favour of the purchaser (rebuttable presumption)Presumption of advancement: when land is conveyed to spouse of purchaser, the presumption is that there is not a resulting trust as between themJune has is a mere depository of 4-10, she having legal title and holding in trust for the use and benefit of the ARThe obtaining of duplicate claim certificatesJune lost claim certificates for Gussie 1-3In April 1966 she requested new Gussie 1-10 certificates and did not advise AR she was obtaining duplicatesJune advertised 1-3 for saleHeld: Equitable title in 4-10 in husbandCONTEST: E (husband) v L (Trustee June to Lee)Is Lee BPV? Court held yes… But really? Must be free of notice (constructive or actual). Lee was aware of matrimonial problem.. Should he ask for more? Did not ask for proof of title or check registry. This wouldn’t have done any good, because it would have shown June had title. [is this opposite from QUASSA case where they said they had constructive notice b/c he didn’t hire someone to o as an agent to Yellowknife ].ASSUMING CASE WAS IN ALBERTA: what would happen?AR’s interest is under an unregistered (and unregisterable) trustThen this means common law applies and you get the same outcome Chapter 4: Introduction to the Torrens System: Title by registrationDocuments: Form 8; Certificate of TitleGeneral Description:In this lesson we introduce the main elements that underlie Torrens systems generally, and the law of Alberta in particular. In the lessons to follow we will encrust these general principles with various provisos and exceptions, etc. (That process will even start here). It is my hope that with the fundamentals in place you will be able to take the additional qualifications on board rather easily. * * *IntroductionTorrens’ vision and influences (Mapp; Whalan)English Group (Land Registry Act, 1897): England, Ireland, Nova Scotia, and OntarioTorrens group (from Statute of South Australia): Australasia, 19 US States, Alberta, BC, Manitoba, and SKPros of the Torrens SystemSecurity and Certainty of TitleDiminution of Delay and ExpenseSimplification of Titles and DealingsAccuracySecurity and certainty of titleAllows Bona fide purchaser for value to obtain titleSecures title to mortgagee, lessee, or other person in good faith and without noticeAbolish the doctrine of notice in relation to registered land and excluded No more need for retrospective investigation of title Substituted clearness and brevity for obscurity and verbiageRemoving retrospective investigation of title gives accuracyCompensation for loss when mistakes occurCardinal Features of the Torrens SystemA base of Land and Not PeopleThe Register & Survey (Pillars)Security of Register Proprietor (Security)Guarantee by the State of Compensation for LossOfficial record at given place that can be consulted by prospective purchaserBased on permanent and immovable nature of the unit of land itself whereas in deeds certificates passed from person-to-personConsists of individual grants, certificates or folios contained within it at any given timeIdeally all interests are recorded to protect a BFPFVWNInterests outside register (trust, contracts)Unless registered a BFPRVWN will take free from unregistered WEAKNESS: some registrations aren’t disclosed b/c of statute Necessary to have accurate surveysSubdivisions must be registeredIf one becomes registered as proprietor of an interest in the Torrens land in good faith, then his interest will be subject only to those interests notified on the Register as having priorityAbolishes first in time, first in right. Where a person is deprived of any estate or interest in land by the operation of the system or suffers loss through any omission, mistake or misfeasance of the Registrar, the person who sustains the loss will be entitled to compensation1670: King Charles II granted a royal charter to the Hudson’s Bay Company, giving it extensive rights to ownership, trading and government in Rupert’s Land (Winnipeg – Rocky Mountains) [granted w/ mineral rights] 1869: AB&Sask&Yukon&Nuavut&NWT (“NWT”) surrendered by HBC to Dominion [granted w/ mineral rights], Manitoba created as province1884: Only about 300 patents had been issued, making it easy to have a Torrens system’s state-run register1885/1886: provinces (or provinces to be) rec’d Torrens system; NWT under federal legislation, Manitoba as province.Until 1887 mineral rights were granted with surface rights1905: Provinces SK, AB, and NWT were freed from federal suzeraintyIn 1905 when AB and SK became provinces they brought the Torrens system under provincial legislation, each province passing the Land Titles Act in 19061930: power to grant both surface and mineral rights was transferred from the Dominion to ABThe Drafted LegislationLegislation drafted by relying on existing Australian legislatingLegislation lacked protection for women’s interests afforded by the law of dower Act required future patents to be fwd’d to the registrar and the Torrens title issuedNWT enjoyed the “purest” Torrens system b/c it only had a few hundred patents issuedMirror, curtain, netMirror: if you look at the title, it should reflect all the existing interests (same idea as registry). Mirror gives you the opposite of what you’re seeing so Ziff argues metaphor should be “photo”Curtain: If you’re dealing with a certified owner, in theory, you can rely on the owner’s certificate of title (aka “top title”). You shouldn’t have to worry how the title was obtained or worry about a flaw in the transaction that gave them that title. The historic search of title is therefore, in theory, not required. The government interposes themselves to act as a repository for the claims and issuing the title and giving certificate. You can give that which you don’t have – a rogue can confer a good title to innocent purchaserTitle of owner is indefeasible, something not possible under deeds, CL or equity. Protects against errors or dishonesty Doesn’t protect against future loss against a rogue who deprives you of your land and sells to a different purchaser. Though indefeasible, still vulnerable (subject to adverse possession and sale by fraud)Net: assurance fundProtects deprived original ownerthe introduction of Torrens in Alberta (Taylor; An Introduction to Alberta Land Titles)The realityThe best parts of other jurisdiction’s statutes were pasted together. Therefore, the drafting sucks – mosaic, tapestry. Unpleasant overlap. System promotes facility of transfer, where people are imperfect and mistakes are covered off. Security of transfer TRUMPS security of original title. Ranges go N/WTownships go E/Wthe insinuation of the state (ss. 53-54; Church v. Hill)Land Titles ActS 53Legal title does not pass until registration. Registration is final step.“no instrument is effectual to pass any estate or interest in that land … unless the instrument is executed in accordance with this Act. … on the registration… the estate or interest … passes…”S 54How does this differ from 54? If not identical… virtually so. Poor drafting.EX: you buy a house. At common law: Before closing you have equitable interest arising from a constructive trust assuming that equity is prepared to grant specific performance.LTA s 53/54: Nothing passes prior to registration. Church v Hill: authority to implement equity under an Land Titles system so the buyer gets an equitable interest before closingChurch v Hill, [1923] SCR 642 (equitable interest in land before closing, regardless of s 53/54)Issue: Can an equitable interest belonging to the purchaser under a sale agreement before closing prevail in a land titles system?Analysis: S 41 LTA [today LTA s 53]: no instrument until registered under this Act shall be effectual to pass any estate or interest in any landEquitable interests, though, cannot be excluded from Land Titles Act No authority under Torrens excluding equitable interests as suchThe idea of indefeasibility some other pivotal provisions: ss. 1, 15, 60-2, 130-1, 168, 183, 203 Land Titles Act OverviewS 29When patents (from Crown) are issued, they are fwd’d to LTO, which creates a COT under the LTSS 47A trustee has legal title as owner (trustee’s name on certificate) with no entry of trusts made on the title, expressed, implied or constructive.?Maybe b/c Torrens was a non-lawyer who wanted to eliminate equitable interestsOpens to fraud interests by trustee – can sell trust property you are not entitled to sellBeneficiary can file caveat on certificate to provide noticeS 58(1)Transferee (buyer) is liable to the mortgagee (someone who they don’t have contractual privity).You buy w/ notice of a mortgage, you pay the remaining mortgage. S 103Legal title does not transfer to mortgagee/bankMortgage is security but not a transfer of the land charged by itCL concept of conveying title to borrower is being replace. You keep title with security interest “clamped” onto it Can have X number of charges b/c you don’t give up legal title60Bound by only what is on title if innocent acquirer , RACE SYSTEM62Same as 60… but other exceptions… RACE SYSTEM203Torrens is a RACE system. Actual or constructive notice IS NOW IRRELEVANT Race, resist the NOTICE GLOSSDoes section effectively repel the notice-glossChapter 5: Qualifications on Indefeasibility Part IDocuments: Factums from the McCulloch caseGeneral Description:In this lesson, the most significant qualification on defeasibility will be examined: fraud by the person acquiring title. The meaning of that term will be considered alongside the principles governing postponement and notice addressed in the earlier chapters. The rules governing the timing of defeasibility will be considered, as will the so-called in personam exception. In this lesson and those to follow we will reflect on the ways in which the mirror principle is tarnished and the curtain principle is shredded, and the implications of such limitation on the ease of conveyancing that the Torrens systems claims to enhance. What kinds of off-title searches must be undertaken?Note also that in Unit #8 (caveats), we will study a case called Farm Credit Canada v. Mainline Pulse. The analysis there will be used to frame some of the discussion in this unit concerning the edges of the concept of Torrens fraud. You may even wish to read that case at this point.* * *The key exception – FraudIndefeasibilityWhen you have certificate of title you can assume that your title cannot be attacked by some previous act, however flawed your title is, once you’re fully indefeasible you are free from challenges‘fraud dissolves all’If you’re guilty of fraud, you are no longer indefeasible Land Titles ActObligation affecting land 60(1) The owner of land in whose name a certificate of title has been granted shall, except in case of fraud in which the owner has participated or colluded, hold it, subject (in addition to the incidents implied by virtue of this Act) to the encumbrances, liens, estates and interests that are endorsed on the certificate of title, absolutely free from all other encumbrances, liens, estates or interests whatsoever except the estate or interest of an owner claiming the same land under a prior certificate of title granted under this Act or granted under any law heretofore in force and relating to title to real property. Examples of fraudB forges a transfer in B’s name and registers itB forges a transfer in favour of C; C is aware of the forgeryTorrens fraud: C suspected but deliberately refrained from inquiring [crim wilful blindness equivalent] (Privy Counsel)NOT FRAUD: C should have realized it was a forgery (careless is not enough)NOT FRAUD: What if C is aware of an unregistered interest? If E v L: equity binds legal buyer with notice. In Deeds race to register, notice will defeat subsequent taker. Under s 60 is this fraud?Ikea RuleIkea Rule: you always build the furniture, fail then read instructions. In Land Titles Act: instructions aren’t always clear. Always start with statute. fraud and Torrens If Torrens resist notice gloss, your system is simplified. Pressure to reserve the race aspectdoes notice = fraud? (Hackworth; Holt Renfrew; McCulloch (Q.B.) and (C.A.); s. 203)Land Titles Act203(2)??A person contracting or dealing with or taking or proposing to take a transfer, mortgage, encumbrance, lease or other interest from an owner is not, except in the case of fraud by that person,?????????????????????????? (a)??? bound or concerned, for the purpose of obtaining priority over a trust or other interest that is not registered by instrument or caveat, to inquire into or ascertain the circumstances in or the consideration for which the owner or any previous owner of the interest acquired the interest or to see to the application of the purchase money or any part of the money, or?????????????????????????? (b)??? affected by any notice, direct, implied or constructive, of any trust or other interest in the land that is not registered by instrument or caveat, any rule of law or equity to the contrary notwithstanding.(3)??The knowledge of the person that any trust or interest that is not registered by instrument or caveat is in existence shall not of itself be imputed as fraud.(4)??This section is deemed to have been in force since the commencement of?The Land Titles Act, SA 1906 c24, in place of?section 135?of that Act and similar sections in successor Acts.Notice=not fraudThis part of the statute resists notice-glossHackworth v Baker, [1936] 1 WWR 321 (Sask CA) (Torrens Fraud, notice is not fraud)Facts Short: Halcro sells Blackacre to Hackworth (unregistered). Baker wants Blackacre. Baker is aware that Hackworth has unregistered interest in land, but known Halcro is registered owner. Baker buys Blackacre from Halcro.Facts: Lot: Margarete Halcro’s home built just before her husband’s death on BlackacreMortgage on Blackacre in favour of Mrs. Matilda CourtneyMargarete Halcro owned Blackacre.1922: Blackacre Sold b/c of taxes unpaid in 1930 & 1931.July 1933: Mr Halcro was concerned b/c he could not pay taxes on his land and he was worried his wife would be put off the land if he died. It was agreed that Blackacre would be transferred to Mrs. Hackworth/daughter and the Hackworths would try to save the property for Mrs. Halcro. November 4, 1933: Blackacre transferred to Halcro’s daughter, Ms. Hackworth (PL) (unregistered, b/c of fear of being liable for outstanding mortgage in LTA).March 1944: Mrs. Hackworth redeemed land by paying $40.60April 13, 1934: Letter from Baker to Mr. Hackworth asking to purchase Blackacre, reply stated that Mrs. Hackworth owned property and it was not for sale. ~April 1934: Mrs. Hackworth and Baker had conversation b/c some of the buildings occupied by Halcros were on Baker’s adjacent property. Baker asked Mrs. Hackworth if she would sell property, she said no. April 18, 1934: John (Mrs. Hackworth’s son) had conversation with Baker about how Hackworth owned land and John was going to farm it. October 1943: Baker learns the taxes on Blackacre have not been paid for several years. Baker calls Municipality where he learned lot was under Mrs. Margarete Halcro’s name with $36.33 in taxes unpaid and penalties of $80.93 and $600 mortgage. In favour of Mrs. Courtney.October 9, 1934: Baker bought Mrs Courtney’s mortgageOctober 10, 1943: Baker visited Mrs. Halcro. Transfer of Blackacre from Halcro to Baker (DF) for $500 and allowed Halco to stay in her house, rent and tax freePL seeks to have transfer of Oct 10, 1943 set aside and Blackacre vested in PL. PL alleges Baker was aware of her interest Issue: Does the doctrine of notice apply? Held: No. [Large focus on statue]Ratio: LTA establishes: “That a person taking a transfer from the registered owner shall not, except in the case of his own fraud, be affected by any notice given him of another’s equity or unregistered interest in the land; … knowledge of such equity or unregistered interest shall not be considered a fraud; and it is expressly set out that this protection is to be given to the purchaser “any rule of law or equity to the contrary notwithstanding.Analysis: Baker not be affected by the notice of Mrs Hackworth’s unregistered interest. Nothing short of fraud will make Baker’s title indefeasibleTo rely on one’s legal rights created by statute is not fraudMrs Hackworth could have protected her title by registeringDoesn’t matter if the holder of an unregistered interest is “hurt” or “deprived of his property” by the act of a person who, with notice of that interest acquires and registered an adverse interestIt matters not how notice or knowledge came to Baker (directly or constructively, or otherwise)If buyer seeks out knowledge of unregistered interests or purposely abstains from doing so doesn’t matter because statute states knowledge on the part of the person shall not itself be imputed as fraud.If a buyer searches registry it is not logical to then make him account for extra-statutory notice given to him 6-months priorHackworth in the context of prior case law/commentary:HOGG (1905), discussing Australian Torren’s system: “A very logical distinction is there suggested between mere knowledge of the existence of an unregistered interest which may not necessarily be hurt by the transaction attacked and knowledge that the effect of that transaction will be to injure or destroy that interest, the knowledge that such will be the effect is obviously something more than mere knowledge of the existence of that interest.” Concept REJECTED by Hackworth at para 68. It is not realistic that X could register an interest with notice and without the will destroy the prior interest...Ruthenian, [1922] 3 WWR 872 (KB): “if there is present the element of intention to deprive others of their just rights, that constitutes the essential characteristic of actual – as distinguished from legal – fraud”.In Ruthenian: A sells to B (unregistered); A then transfers land to C. C had knowledge of B’s purchase. C registered. Transaction set aside by courts. C dealt with A with knowledge of the rights of others (B) and there was clearly present an intention on this part to shut out those rights. C was guilty of Torrens fraud on the Hogg reasoningIt could be said A was induced by C to breach contract with B.Hackworth rejects Hogg, but accepts Ruthenian. Ruthenian is based on Hogg. TK: Pre-Hackworth case law and literature shows that fraud can exist when there is knowledge of an unregistered interest and the buyer deals with title owner to purchase interests in hopes of defeating and hurting the unregistered ments: Possibility that the case was decided on the basis that Baker didn’t ACTUALLY believe Hackworth’s story about their transferHolt Renfrew and Co Ltd v Henry Singer Ltd, (1982) 37 AR 90 (CA)Facts Short: Singer purchased building with knowledge there were tenants in the building (Holt). Holt’s lease was not registered. Singer originally stated the tenants would not be a deterrent to the sale. Before purchasing land, Singer changed his mind. Registered transaction NOT subject to Holt lease in attempt to defeat lease.Facts: Lease from 1950-1957 between Landlord and Holt Renfrew (tenant), w/ caveat registeredLease extended from 1957-1973; Lease extended from 1973-1990 – no lease caveat filed upon extension. In 1978 Singer's lawyer calls landlord about purchasing the propertyMay 4th, 1978: Singer's lawyer wrote letter to Dickson "With respect to the matter of the existing tenant of the property, we do not believe that situation would be a deterrent to our client’s interest.’"Singer's lawyer saw all relevant documents, including existing lease: ACTUAL NOTICE~ > August 28, 1978: Singer no longer interested in buying real estate subject to the lease. Lawyer did not advise Dickson. September 11, 1978: Offer of 800K for property "subject only to the encumbrances endorsed upon the said annexed photocopy of the certificate of title". [only encumbrance disclosed on photocopy was the 1950 caveat]. March 7, 1979: Offer accepted for 1,320K w/ same conditions as aboveMarch 8, 1979: Singer's lawyer filed a caveat in the land titles office [Singer won race, but 2nd in time]Vendor was open during process and kept tenant advised Tenants filed caveatSinger knew of unregistered interest and knew he could defeat it by concluding the transaction and registering a new caveatJ: Singer's lawyer did not attempt to mislead or deceiveIssue: Is there notice-gloss in Alberta? Was Singer's lawyer's conduct fraudulent (I.e. is knowing about an unregistered interest and trying to defeat it by concluding a transaction fraud under LTA 203?)?Held: Appeal dismissed, Singer not guilty of fraud. Analysis: 5 judges/5 opinions.Ratio: Principle (court in agreement): Knowledge of the existence of an unregistered interest, coupled w/ knowledge that the unregistered interest will be defeated by concluding the transition, is NOT sufficient to constitute fraud within the meaning of 203. There must be an additional element.[debate in Alberta: what is the additional element?]Additional element could be fraudulent misrepresentation – 3 judges stated no fraudulent misrepresentation; 2 found fraudulent misrepresentation.MOIR JA: No reliance, no misrepresentation, no fraudNo reliance on the part of Dickson on the evidenceDickson did not rely on the May 4th letter but the photocopied certificate of title, which he read wrongNowhere on the evidence did Dickson say that he relied on the May 4th letter when determining if he should accept officeNever did Dickson state he was misleadKERANS JA: no fraudAgrees with MOIR's evidence analysis"no deterrent" is not equivalent to agreeing to unconditional covenant to honour the leaseSTEVEVENSON: No fraud. McDermid (dissent): YES, Singer was fraudulent.Singer’s lawyer made a representation [that the lease was no deterrent] but then sought to get tenants OUT without correcting that representationIt was not appropriate for Singer's lawyer to remain silent b/c he had already led Dickson to believe the lease was not a deterrent. Silence not appropriate after representation is madeFraud within meaning of 203, Dickson relied on the misrepresentationPROWSE JA (dissenting), FraudConcurring with McDermidTransaction not protected by LTAThe appellant is deprived of the protection of s 203 b/c their conduct was a calculated course from beginning to end to lead the vendor's solicitor into false sense of security as to the purchaser's intentionsAlberta (Ministry of Forestry, Lands & Wildlife) v McCulloch, (1991) 116 AR 261Facts: March 1, 1978 [Original agreement]: Department sold land located along McLeod River Inc. a residential parcel (west) and a millsite parcel (east) with multiple conditions to SvedbergCertificate of title transferred and caveat filed by Department to protect its interestsSeptember 3, 1985: McCulloch's private company incorporatedMarch 7, 1986: Original certificate of title was cancelled and replaced by two new certificates (one residential, the other for the millsite parcel)Millsite parcel was sold by Receiver to McCulloch subject to original caveatMcCulloch was aware of Department's interest in the landDecember 29, 1986: New certificate of title issued to McCulloch with original caveatIn 1987 caveat was mistakenly discharged from McCulloch's title (mistake by LTO)Spring 1988 McCulloch learned of the errorApril 13, 1988 McCulloch executed a transfer of his title to a numbered company for which he is the shareholder, director and officerApril 15, 1988: new certificate issued w/o original caveatMay 25, 1988: Department filed new caveat against title claiming the first right to repurchaseNovember 1988: McCulloch & his wife each hold 50% voting shares in companyIssue: was transfer tainted with fraud?/Is title issued to numbered company defeasible?Ratio: Fraud is when there is no other good reason for transfer other than to defeat the prior interestAnalysis: There was knowledge but nothing moreKnowledge alone is not fraudFraud only when you do something unjust or inequitable with knowledgeFraud: when knowledge is used for an unjust or inequitable purposeThe company must be deemed to have acquired this knowledge because Mr McCulloch was one of its directors and its president“I believe the transfer to the limited company was also made for the purpose of defeating the Department’s interests and of relieving Mr. McCulloch from his obligations to the Department”In all circumstances I am of the opinion that title to the Millsite parcel was acquired by the numbered company in circumstances that amounted to fraud as that term is used in the Land Titles Act. Judgement for MinistryComments: Gov factum does not actually allege what the additional element is in this case…Maybe some argument that there was never a transfer since he was the controlling mind of the corporation (not argued)Seems to be evidence that the only reason it was transferred was to defeat the interest; no good reason may be the element of dishonestyIf there had been a tax reason, may have been able to get away with it.Claimed tax reason but court didn’t buy itMay be creating a “notice issue” againMcCulloch, 1991 CAFacts: McCulloch appealed. Analysis: Agree with TJOften transferor’s intent is irrelevantBut here, transferor and transferee are almost one in the sameTransferor/transferee shared intent of fraudMore than mere knowledge, but INTENTOntario has succumbed to notice-glossWaterstone Properties Corp 2017 ONCA 623:“it is well-established that the Land Titles Act has not abolished the equitable doctrine of actual notice…In rejecting the argument that the LTA in Ontario abrogated the principle of actual notice, Spence J in Dominion Stores Ltd SCC 1977 stated for the majority: However, in Ontario, only a few years after the enactment of the?Land Titles Act, the courts have expressed a disinclination to imply such an extinction of the doctrine of actual notice. There is no doubt that such doctrine as to all contractual relations and particularly the law of real property has been firmly based in our laws since the beginning of equity. It was the view of those courts, and it is my view, that such a cardinal principle of property law cannot be considered to have been abrogated unless the legislative enactment is in the clearest and most unequivocal of terms.It is thus clear that in Ontario the doctrine of actual notice is applicable even if the lands in question are in the Land Titles system”recent disputesDarnley v Tennant, 2006 ABQB 575 (fraud: when you create the interest then try to extinguish it through clean title under s203)Facts Short: Darnleys (Husband and wife) had two pieces of adjacent land. The smaller part was sold to Tennant with a 1-acre panhandle (road) included so Tennant can access his land across Darnley’s land. Letter of intent at time of sale explained that if Tennant no longer needed panhandle to access his property, it would be sold back to Darnleys for $1 and if Darnleys sold their land the letter of intent will must be accepted by new buyer. 2002: Husband transferred large piece of land to wife free of “letter of intent” (Letter was not caveated). Subsequently, in 2003: Tennant filed caveat over Darnley’s land. Darnley wants to sell land not subject to caveat, arguing she took the land free of caveat per 203.Facts: Applicant & husband owned triangular-shaped landNovember 29 2002: Land subdivide into 4.4 acres & 15 acres sections, titles to the two new lots were placed in the name of the Applicant and her husband. Same day: 15-acre land transferred to Applicant (part of divorce settlement) w/o caveat Darnley took land as volunteer.For road access, strip along hypotenuse of whole piece (“panhandle”) had to be savedDecember 17, 2002: Title issued for 4.4 piece to RespondentLetter of intent: November 15, 2002??? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??LETTER OF INTENT?In the event the ‘panhandle’ that borders the 4.4 acres being purchased by Gwen & Brad Tennant at 97 Canal Court, Plan 7911308, Lot 9, is no longer required for road access for remaining 15 acre development of lot 9, and upon the approval of Rockyview, it, (the one acre panhandle) will be sold to Gwen and Brad Tennant for the sum of $1.00. Also, in the event that Don and Reggie Darnley sell the back 15 acres, this letter of intent will be presented to and agreed to by the new buyer.February 26, 2006: Respondent filed caveat on Applicant (15 acres) land claiming an interest under letter of intentApplicant wants to sell 15-acers of landBuyers want removal of the respondent’s caveatApplicant has brought application to remove caveat, taking the position that the caveat does not protect a registerable interest in the landIssue: Is the Applicant’s conduct “something more” than mere notice amounting to injustice, dishonesty or inequity. / Did Darnley take land free of the unregistered caveat when transferred from husband to herself, though she knew about the existing Letter of Intent & was part of its drafting?SLATTER JFraudFraud inc deceit and dishonesty Fraud is not mere knowledge of an unregistered interest (Holt)Applicant was a covenantor who created the interest that she is now trying to defeat by operation of 203, this is “something more” than mere knowledgeWould still be an in personam claim between the parties from the contractWas more than a transferee, had made contractual agreement with the party she was trying to excludeRatio: If you are a covenantor who created an interest you are not entitled to rely on s 203 to defeat that interest1198952 Alberta LTD v 1356472 Alberta Ltd, 2010 ABCA 42 (Numbered Companies Case)Facts: Landlord has lease with tenants > 3 years, no caveats to protect those leasesLandlord sold propertyIn Offer to Purchase agreement: “within 5 days of acceptance of the offer, the vendor would deliver “true copies of all existing leases”. This was done.Purchaser removed all of the “subject to” conditions inc conditions respecting the leaseOffer to Purchase provided that on closing vendor would provide purchaser “an Assignment of all leases”…Assignments were not sent with the other closing documents they were eventually tendered on the appellant purchaserAppellant purchaser refusing to accept leases stating it is not bound by unregistered leasesTenants brought application that leases were bindingCJ: “fraud within the meaning of 203Issue: Whether the appellant purchaser of commercial property and the appellant mortgagee are bound by the unregistered leases of the respondent tenants.Interpretation of the OfferPurchaser agreed to accept leasesBefore closing, purchaser emailed to say that on closing they would waive the assignment of the leases.But, by this time the purchaser had no ability to unilaterally amend the contractVendor never agreed to amendments and purchaser is bound to honour leasePriority of Leases Since the leases were more than 3 years, they should have been registered, which engages s 203Fraud must include an additional element to notice (Holt)Appellant agreed to buy property and to assume leasesHaving closed the transaction it cannot now argue that it need only take the benefits of the property without assuming the burden of the leases, SOMETHING MORE: purchaser agreed (made promise/covenant) to buy leases then tried to explicitly contradict thatIf lease is not binding in rem (b/c of failure to register), it is binding in personam by the covenants in the Offer (specific performance)If you agree to respect an unregistered interest, it may create a constructive trust, giving the tenant an in personam right against the purchaserBy 203, purchaser doesn’t have to take leases b/c he had noticeBUT he did covenant to take assignments, these are “additional element” sufficient to overcome 203Ratio: The fact that the appellants disclosed their intention to repudiate the leases prior to the closing does not provide any basis to distinguish these cases. Once the agreement became unconditional the appellants had covenanted to assume the leases. Even if the closing was not yet to occur.Appeal dismissed. Leases bindingNature Conservancy of Canada v Waterton Land Trust Ltd, 2014 ABQB 303Facts: PL, Nature Conservancy of Canada (“NCC”) owed a cattle ranch “Property”DF, Thomas Olson bought the PropertyProperty is important for movement of wildlife in AlbertaBefore the sale, NCC arranged for a conservation easement (CE) to ensure future wildlife migration would not be impededOlsen built fences for bisonNCC said fences are too highOlsen argues NCC knew he would be raising bison and the new fences did a better job of keeping in his bison and therefore allowing wildlife migrationNCC brought action requiring Olsen to modify his fencesCE was only partly register on Certificate of Title due to error by solicitorOlsen sold property to partnership/corporate trustee to hold Property through future generationsNCC wrote to Olson to ask for help in correcting registration error and he did not replyOlsen shortly afterward conveyed the PropertyDF argued: partnership did not assume all of the responsibilities of Olson to the NCC b/c purchase agreement only included covenant as is registered on titleNCC only plead fraud late in litigation after Olson tried for summary dismissalIssue: Is the fence height restriction in the CE binding on the successor in title to Olson and can NCC seek relief against those interests?Analysis: Olsen did nothing to take advantage of that knowledgeOlsen continued to negotiate with the NCC in good faith and disputed fence height Olsen had always intended to transfer the Property to a trust arrangementTransfer of property was not done solely to defeat NCC’s interestPresumption of the court is always against fraudDirectors were named defendants and allegations made against them, though they should not have been named at allComments: Different from McCulloch in that the transferee did not exist for the purpose of defeating the prior unregistered interest. what about inducing breach of trust or contract?Ziff’s Other Potential Grains of FraudInducing breach of contract/trust (Rutherian Church)Looking at Hackworther, Baker did the same thing in getting her to not follow through on agreement with the HackworthsHolt: By convincing landowner to sell, may be inducing a breach of tenant’s right to quiet enjoymentFocus not on A and C, but on B. Wrongdoing by B is not per say relevant. The focus is often on C. But consider the relationship between C and B and in particular whether C is doing anything to B that might be that one grain of Torrens fraud.It could be said A was induced by C to breach contract with B.Hypo: Focus on the party that enables the fraud (“B”).Something extra: the behaviour of C in their conduct with B, so that C was trying to induce B to break contractual obligation with A.LTA s. 170? A sleeping giant?Alberta Land Titles ActProtection of bona fide purchasers and mortgagees170(1)??Nothing in this Act is to be so interpreted as to leave subject to action for recovery of damages, or to action of ejectment, or to deprivation of land in respect of which the purchaser or mortgagee is registered as owner, any purchaser or mortgagee bona fide for valuable consideration of land under this Act on the plea that the purchaser’s transferor or the mortgagee’s mortgagor has been registered as owner through fraud or error, or has derived title from or through a person registered as owner through fraud or error, except in the case of misdescription as mentioned in?section 183(1)(e),?if the purchaser or mortgagee has made all reasonable efforts to confirm that the transferor or mortgagor is the registered owner of the land.(2)??The protection for a purchaser or mortgagee referred to in subsection (1) commences when the purchaser’s or mortgagee’s instrument is registered.Raises questions about immediate or differed systemDo we apply immediate or deferred in AB?Ikea rule – s 60 LTA: immediate indefeasibilityS 170: except fraud of misdescription – deferred183(1): supports nothing we can discern?Case law: Immediate is probably the lawimputed fraud (Dollars and Sense Finance Ltd. v. Nathan)Dollars and Sense Finance Ltd v Nathan, 2008 NZSC 20Facts: Dollars agreed to lend Nathan 245K conditional on Nathan’s parents being security for Nathan’s liability. Memorandum of mortgage to Dollars of Nathan’s parents’ jointly owned house. Solicitor thought patents lived together, but they were separated for many years and Mom lived elsewhere. Knowing his mother wouldn’t sign the mortgage, Nathan forged his Mom’s signature. Dad died. Mom took house by survivorship. Nathan defaulted. Issue: Since Nathan forged his Mom’s signature, under the fraud exception to the indefeasibility provisions of the Land Transfer Act is the title as mortgagee defeasible? Should mortgage be removed from the registrar?Analysis: Nathan’s forgery is Torrens fraudBut was Nathan acting as an agent of Dollars?Did Dollars make it Nathan’s task to obtain execution, thereby creating an agencyDollars did not have any dealings with NathanCommercially unrealistic to assume that Nathan was not an agent in any capacityNathan was an agent of Dollars and he was to obtain the signatures of his parents on the documentation with appropriate witnessing. Unjust for bank to collect against MomA principle, by taking the benefits of such agent, is assenting to agent’s fraudulent actionsIf agent is acting outside of scope, of it in unauthorized method then fraudKey: principle does not benefit from actions of agent (agent commits fraud, principle shouldn’t benefit)When is title indefeasible? (Neave)Two opposing theories:Deferred indefeasibility of titleGibbs v Messer [1891] AC 248 (PC)Facts: Mrs Messer was registered proprietor under of land under Torrens system. She left the country, leaving the duplicate certificate of her title to her land and POA in favour of her husband, in possession of solicitor Cresswell. Cresswell forged a transfer of the land to non-existent person Cameron and registered. Cresswell obtained mortgage (as a solicitor on behalf of the non-existent Cameron) using land as security, mortgage registered.Messer sued, requesting new title certificates be ordered, free of the mortgage. Mortgagee argued indefeasibility by registration.Issue: Is the Mortgagee’s title indefeasible since it was registered?Analysis: Held: purpose of system is for he who registers to be satisfy of the validity of title. All BFP for value from registered proprietor and enders deed shall acquire indefeasible rightStatue protects purchaser who deal with proprietor whose name is upon the register Purchaser who deal with a forger who uses his name do not transact on the faith of the register, and cannot by registration then obtain valid title. However, this purchaser can pass valid title to third parties.Mortgagee did NOT deal with registered proprietorCASE NOT turning on Cameron being fictitiousCourt order: certificates of title in the name of Cameron be cancelled and titles in the names of Messer be substituted. Mortgage invalid.If Cameron was Real& his name was fraudulently registered, his certificates of title would be liable to cancellationMortgage executed by Cameron himself (knowing of Creswell’s fraud) would be valid in favour bona fide mortgagee.The protection which the statute gives to persons transacting on the faith of the register, is limited to those who actually deal w/ and derive right from a proprietor whose name is upon the register.Those who deal with the forger, not proprietor, do not rely on faith of registrarThose who deal with the forgery and register pass good title to third parties who purchased from them in good faith for valuable considerationCameron is not real: Cameron couldn’t execute a transfer or a mortgageCameron was not Cresswell’s alias, Creswell never asserted his designation as Cameron/Mortgagees understood Cameron to be separate person from Creswell.The real character of criminal acts perpetrated by Cresswell differs in no respect from what it would have been, had Hugh Cameron been a real person, whose name was put upon the registrar by him and use by him in a forged deed creating an incumbrancer [pg 2051-2052]Registrar can’t make root of a valid title under a null deedSince mortgagees dealt with agent and forger of title holder, they cannot transact on the faith of the registry immediate indefeasibility of titlean innocent purchaser who registers, which is void through forgery or breach of a statutory or common law requirement, should attain an indefeasible title by registrationPolicy reason for registration is to PROTECT BUYERTorrens legislation was not intended to override the functional common law rules favouring void instrumentsIndefeasibility is “deferred” to the second purchaserA void instrument, when registered, can form the root of a good titleFrazer v Walker PC (standard for immediate indefeasibility)Facts: Alan Frazer and wife Flora were registered proprietors of a farm, subject to a mortgage in favour of B. Flora, purporting to act on behalf of herself and her husband, arranged a further mortgage over the property. She signed and forged her husband’s signature. L3000 borrowed was used to repay the 1st mortgage. First mortgage discharged. 2nd mortgage registered in favour of the Radomskis. Mortgage defaulted. Radomskis exercised their power of sale, farm sold to Walker (registered).Walker began proceedings against Fraser for propertyFrazer resisted basis of the forgery of his signatureAnalysis: The transfer that Walker registered is not forgeryWalker dealt with the Radomskis who were registered proprietorsStatutory interpretation lead PC to determine the registered proprietary have indefeasibility of titleQualifications to indefeasibility of title: 1) principle does not deny a PL the right to bring an action in personam against a registered proprietor if he can base such an action on equity (In personam: registered proprietor cannot shelter behind the register to protect himself against equitable interests he himself has created)2) Register can cancel entries entered by fraud or wrongfully obtained or wrongfully retainedApplies to void instruments, not just invalid due to forgeryHeld: the Radomskis were entitled to rely upon their registration for protection, when Walker’s title was necessarily indefeasible.Regardless of fraud on the part of other parties, a newly registered owner, if innocent of any fraud himself, acquires an indefeasible title whether he dealt with the registered owner or only with someone passing as the registered owner, subjection, however to the registrar’s power of ments: Distinction based on “Cameron” from Gibbs being fictitiousBased on Frazer, indefeasibility, is probably the law in AlbertaEX: B forges A’s signature on a transfer, and title is, as a result, placed in the name of BB, the rogue, sells Blackacre to CDoes the curtain fall to protect C?Under an immediate system, C gains titleUnder a deferred system, Gibbs would say C does not get title.Under Dupmeier (below) application Alberta Land Titles ActObligation affecting land60(1)??The owner of land in whose name a certificate of title has been granted shall, except in case of fraud in which the owner has participated or colluded, hold it, subject (in addition to the incidents implied by virtue of this Act) to the encumbrances, liens, estates and interests that are endorsed on the certificate of title, absolutely free from all other encumbrances, liens, estates or interests whatsoever except the estate or interest of an owner claiming the same land under a prior certificate of title granted under this Act or granted under any law heretofore in force and relating to title to real property.Hermanson v Martin (1987), 52 Sask R 164 (CA) (has someone pose to forge signature)Facts: Val and Ed were marriedValerie and Edward bought Blackacre as joint tenants [right of survivorship] (registered)Val and Ed divorced, no settlement on property. Property is a homesteadVal moved to Calgary and remarriedEd sold property to Martin for 13,5001st mortgage in favour of Coop Trust Company for 12, 271 (registered)2nd mortgage in favour of Ed for 2,220 (registered)1,007 in down paymentVal was needed to execute transfer, so Ed brought imposter and introduced her as ValTransfer Ed to Martin transfer registered Ed diesVal learns of Ed’s death and has her solicitor investigate matrimonial propertyVal made complaint of fraud to RCMP for forgeryImposter cannot be found by RCMP, no charges to be laidIssue: Val claiming transfer is void and she is entitled to become sole registered owner, should mortgages be null and voidDoes Martin have good titleDoes Val hold valid title subject to mortgage in favour of CoopLegislation: Sask Land Titles Act s 68: land owner hold “absolutely free” from all “encumbrances, liens, estates, or interests”…Analysis: BROWNRIDGE JAMartin did not perpetuate fraud and did not know of fraudTWO EXCEPTIONS TO INDEFEASIBILITY:1) when the actual fraud by an owner, fraud by which the rightful owner is deprived of his land, or fraud on the part of the transferee from the person guilty of the original fraud2) transfer from that registered owner to a volunteer who thereby becomes the registered owner, even though that transferee ay be bona fide FOUR EXCEPTIONS TO CONCLUSIVNESS:1) The conclusiveness of the subject to the exceptions and reservations implied under the ActThe Conclusiveness does not apply in the case of fraud wherein the owner has participated or colludedThe Conclusiveness does not apply against any person claiming under a prior existing certificate of title granted under the act in respect to the same landThe Conclusiveness does not apply so far as it is regards any portion of the land wrongfully described,Reliance on the registry is a prerequisite to indefeasibility; therefore registration cannot operate to confer an indefeasible title where the bona fide transferee acquires his interest under a forged instrumentAssets Co (PC): “A person who presents for registration a document which is forged or has been fraudulently or improperly obtain is not guilty of fraud if he honestly believes it is to be genuine document which can be properly acted upon”Frazer: Registration confers immunity to adverse claims, with exceptions listed in statute. Martin was BFP untouched by fraud acquired land from Ed, true registered owner of propertyBAYDA CJ (concurring)Exceptions to s 68:The incidents implied by virtue of Land Titles ActSuch encumbrances, liens,… are endorsed on the certificate of title, A case of fraud wherein Martin has participated or colludedThe estate or interest of an owner claiming the same land under prior existing certificate of titleS 213: Certificate of title is conclusive evidence against all persons whomsoeverMartin’s certificate is conclusive evidenceScope of fraud: fraud is limited to the new owner’s fraud, aka fraud in which he participated or colluded Ex-wife restricted to claim damages against ex-husband’s estate and from assurance fund. Paramount Life Ins Co v Hill (1986), 75 AR 249 (CA) (forged signature himself)Facts: Paramount, mortgageeMortgage given to it by Laidlaw on property acquired by a forged transfer from AudreyAudrey Hill owned property (registered) subject to mortgages and writs of executionMr. Hill sold home to Laidlaw with agreements Hills could rent house from LaidlawMr. Hill brought transfer (purportedly signed by Audrey)Laidlaw mortgage to Paramount with Hill house as securityLegislation: Alberta Land Titles ActEffect of registration54???So soon as registered every instrument becomes operative according to its tenor and intent, and on registration creates, transfers, surrenders, charges or discharges, as the case may be, the land or the estate or interest in the land or estate mentioned in the instrument.Protection of bona fide purchasers and mortgagees – LTA s 170Protection of person accepting transfer, etc. – LTA s 203Analysis: Is Paramount’s mortgage protected?Immediately on registrations the transferee becomes the registered owner with right to conveyA forged transfer gives root to a good title and a mortgagee is protected if it deals with the holder of that titleRegistration protects an encumbranccee even if certificate is not issued until some later timeMortgage valid, Mrs Hill to be protected by assurance fund provisionsWas Paramount guilty of fraud through its agent?Solicitor was not agent of Paramount for obtaining transfer b/c solicitor authority from Paramount was to obtain a mortgage from LaidlawNo agency relationshipMrs Hill cannot sustain judgement on the grounds of a fraud attributable to paramount through agencyBeneficial Reality Ltd v Sun Bae (1996), 182 AR 356 (QB)Facts: PL registered a mortgage and a caveat protecting an assignment of rents on the propertyNeither DF were involved in getting mortgages; someone forged the DF’s signature to the mortgage and assignment of rents. DF did not rec’v benefit of mortgageRogue made a few mortgage payments, then stoppedPL commenced foreclosure proceedingsPL argued mortgage granted by rogue is indefeasibleIssue: The DFs delayed submitting a response b/c they assumed the papers served were a mistake (they never took out a mortgage). Can they still file statement of defence?Analysis: In Gibbs: bona fide mortgagee was registered and original owner title was restored (Supports DF)In Hermanson: indefeasibility principle upheld and original owner forced to claim damages through assurance fund. (supports PL)Paramount: a forged transfer gives root to a good title and a mortgagee is protected if it deals with the holder of that titleCourt should excuse DF’s conduct. To take their property b/c of criminal activity would be unequitable. Nisi: DF can file statement of defenceDe Lichtuer v Dupmeier, [1941] 3 WWR 64 (Sask KB) (before Frazer)Facts: DF: BMO (mortgagee)Dupmeier (mortgagor)When mortgage was made, Dupmeier was registered owner at land titles officePL alleges Dupmeier became registered title owner through forgery to which Dupmeier was a partyPL wanting transfer set aside Land was by forgery to a real existing person, that person knowing of the forgery, executed a mortgage to the DF’s bank for valuable consideration in good faith on the part of the mortgageeIssue: is the mortgage valid? Is mortgagee acquiring charge from rogue takes free? Yes, curtain fell.Analysis: Per Gibbs, situation #1, we have the exact same thing. “but a mortgage executed by Cameron himself, I the knowledge of Cresswell’s fraud, would have constituted a valid encumbrance in favour of a bona fide mortgagee” –TJ: “that is exactly what happened here”Bank was bona fide mortgagee, they had no knowledge of fraud or reason to suspect fraudDF bank holds a mortgage for valuable consideration that is a good and valid charge against the land in question. Mortgage will not be set asideComments: “c” operated on faith of registry, in Gibbs and Dupmeier, Rouge was on title. Then when Rogue mortgaged to “C”, Rogue signed his real name. Rogue was certified owner.Ontario: “hyper-deferred system” and they have taken Gibbs too far, even past this.mortgages (Credit Foncier Franco-Canadien v. Bennett)Credit Foncier Franco-Canadian v Bennett (1963), 43 WWR 545 (BCCA)Facts: DF, Bennett, are registered owners of Vancouver estate in fee-simpleJan 1961: Mortgage registered against land to Todd Investments ltd, forged by Allen (Bennetts unaware) – for $7400.6 days later: Assignment of mortgage from Todd Investments to Stuart for $5400. Stuart did not inquire with Bennetts (Stuart can collect on original full amount and bout mortgage for less)5 days later: Stuart assigned mortgage to Credit Foncier Franco-Canadian (innocent) for $6,600. Credit wrote to Bennetts informing them of assignment, Bennetts assumed it was a mistake and disregardedNo payments were madeCredit brought action for foreclosureIssue: Will court order nisi for foreclosure with directions for an account under the mortgage, and allowing 6 months to redeemAnalysis: S 41, based on past case law can be interpreted to meanS 41 is a rebuttable presumption as the owner of the security and does not expressly deal with the amount of the debtThe assignee as registered owner of a mortgage shall be deemed to be entitled to the actual interest which the mortgage confers by law and equity upon the mortgagee, that is apart from an estoppel Distinguishes Gibbs b/c of “fictitious” person to a mortgagee Mortgage was a nullity by virtue of forgery, notwithstanding registration of assignment to Stuart and the further assignment by Stuart to the PLFurther, if the mortgage were valid, in equity the mortgagors don’t owe anything b/c they didn’t rec’v anything – NO MONEY ACTUALLY OWED UNDER MORTGAGE; therefore should be dischargedMortgage dischargedComments: In AB: Foncier holds an indefeasible title under Alberta lawIn BC, indefeasibility DOES NOT ATTACH TO A MORTGAGE by virtue of statue s 41Does AB have equivalent?YES, based on Paramount case – mortgage was indefeasible Foncier did not inquire with Bennett’s or bank in absence of knowledge b/c all the sales were happening within a few days b/c they could assume mortgage hadn’t been much paid back in 10 days…Land Titles makes no comment about how much money is owed:So what would you do?? Can’t rely on title b/c amount stated is not guaranteed.Must contact Bennetts or Bank (Todds)Want indefeasible system on fast, cheap, efficient systemBut this is an example of additional need for inquiry. Need system from bank.the in personam exception general nature Pecore: presumption of resulting trust, between gratuitous transfer between parents and adult childrenthe resulting trust as in personam claimBezuko v Supruniuk, 2007 ABQB 204Facts: House transferred into Charlyne’s name gratuitouslyIssue: Does a Resulting Trust (not being on title) arise in Blair (transferor); can resulting trust arise under Torrens system? Does Torrens system trump assumption of resulting trust?Analysis: Passburg Petrolium, 1984 ABCA: interest in land under Land Titles Act of AB may be created and may exist independent of the register between the “immediate parties” or volunteers claiming through the immediate parties”Common Law of resulting trusts arising from gratuitous transfer recognizes one of the number of circumstances where an interest in land arises by operation of law and exists independent of the land titles register between immediate parties or volunteers claiming through them. Held: Yes, resulting trust enforceableThorsteinson v Olsen, 2014 SKQB 237Facts: Farm Land of Thorsteinson transferred into joint tenancy with OlsonThorsteinson moved into assisted living and left the farmThorsteinson lost trust in Olsen’s motives for caring for farmIssue: what are the legal ramifications flowing from a gratuitous gift of land from an elderly parent to an adult child and the parent’s subsequent desire to revoke that gift?Held: The doctrine of resulting trusts is inapplicable where the impugned transfer of land has been registered in SK LT system.Analysis: Must consider Pecore in light of principles of conclusiveness of titles established by TorrensResulting trust is inapplicable where the impugned transfer of land has been registered in SK land titles system. Thorsteinson’s claim would require court to look beyond the certificate of title and give effect to an equitable doctrine Comments: Olsen and Bezuko completely at odds with each other Ziff’s position Olsen v Bezuko: No doubt in Ziff’s mind that Bezuko is right. Olsen case is naive, ill-informed and wrong.SK has failed to appreciate the important element of Frazer v Walker (standard for immediate indefeasibility, which is regime in AB and SK): Lord Wilberforece (Frazer) “This principle [immediate indefeasibility] in no way denies the right of a PL to bring against a registered proprietor in a claim in personam, founded in law or in equity, for such relief as a court acting in personam may grant”. This is uncited in Bezuko, but supports Bezuko.Canadian judges overall, don’t understand this element of Bezuko.Cited in Frazer v Walker as obiter.Trying to return to notice gloss:expand definition of fraud (Hogg) – nope overturnedIn personam – Peter Butt, Land Law, 4th ed at 667: “a purchaser under a contract for sale can enforce the contract against the vendor who is the registered proprietor”“a beneficiary can compel performance of a trust despite the trustee’s status as registered proprietor”This includes resulting trust (Bezuko)Or where a registered proprietor’s conduct rendered the transfer void and voidable, even though registered owner was not guilty of Torrens fraudMisrepresentationAction, short of Torrens fraudErosion of indefeasibility“Whilst purchase with “mere” notice is not enough to raise a personal equity courts will not be reluctant to find in the circumstances additional factors indicating the purchaser’s agreement to recognise and be bound by the unregistered interestpurchaser w/ title is liable to in personam claim based on these factsUnlike other examples, there is no direct contact between parties describedEX: O owns Blackacre. QT buys Blackacre and tells O to transfer title to “T[rust]”. T Is not part of transaction. NO CONNECTIONEX: Tennant and Numbered Companies CasesNumbered companies: got land with understanding they would protect unregistered interests. No actual transaction between unregistered interests and new owner. Peters says in personam claimguidance from the antipodesJEB Management Limited v Grubz United Whanau Trust, [2015] NZHC 157Facts: JEB applied for removal of a caveat registered against Otara property. Trust established in 1989 by a group of Otra residents who sought to better the lives of young by providing recreational facilities and workshops. Original trustees have diedTrusts’s activities have been effectively abandonedBuyer interested in Otara property (Manu)Agreement for sale of propertyTrust’s solicitor provided JEB with copies of trust deed (2011)2014: Trust registered a caveat over the Otara propertyTrust claiming Manu was not authorized to sell propertyIssue: Has the caveator (Trust), the former registered proprietor of the property, shown it is reasonably arguable that it is a caveatable interest in the property. Analysis: Trust asserts:Not all trustees were dead, fraudulent statement by Manu [fraud claim failed]Trust believes it retained proprietary interest in property b/c JEB was not purchaser of good faith (arguing JEB knew about Manu’s plan b/c three days after new trustees were appointed sale plans started. Trustees appointed specifically b/c they were willing to sell)In personam exception:Distinct from fraudFraud (statutory exception): if prove applicant is entirely as of right to the appropriate remedyIn personam: made against the registered proprietor personally and the relief granted is equitableYou challenge freedom of the registered proprietor to disregard an equity arising out of his or her acts or omissions (not challenging validity of title)Should not conflict with indefeasibilityIs the reasonably arguable that JEB is liable in knowing receipt?Trust seeking constructive trust of and return of propertyCannot bring a claim of knowing receipt of a trust property as an in personam exception to indefeasibilityLiable for knowing receipt of trust: where he rec’d property belonging to a trust knowing that it had been given to him in breach of trustThreshold of knowledge: knowledge for establishing constructive knowledge is lower than that for establishing land transfer fraudKnowing receipt failed in personam claim b/c it goes against concepts of Torrens systemYou can be in knowing receipt if you “out to have known”/constructive knowledge. If we allow in personam claim based on constructive knowledge then that is a notice-gloss that is inconsistent with Torrens system. Rules of in personam claims: the remedy cannot be used to undermine the fundamental concepts of the Torrens systemMust be unconscionable conduct on the part of the current registered proprietorNot much of a filter, not often when this conduct is not unconscionableClaim in personam must encompass only known legal or equitable causes of actionUndue influenceResulting trustsHeld: in order for a trust to establish a reasonably arguable case that it has a caveatable interest in the land, it must show that it is reasonably arguable that JEB committed fraud to the land transfer standard It is not enough to say that it is liable under the principles of knowing receipt.mayhem in Ontariothe mortgage-fraud epidemicLawrence v Wright: In Oct 2005 an imposter posing as Lawrence retained a lawyer to sell Lawrence’s home. The imposter gave the lawyer a forged agreement of purchase and sale (“The Agreement”) under the terms of which the Property was to be sold for 300K to another imposter, Thomas Wright.Wright made an application to the Maple Trust Company for the alleged purpose of funding the purchase of the Property. After following its usual due diligence procedures, Maple Trust approve the mortgage application. It has no knowledge of the fraud being perpetrated against Ms. Lawrence…A fraudulent transfer of the Property in favour of Thomas Wright was registered. On the same day, Maple Trust advanced money pursuant to the mortgage and the TD Bank mortgage on the Property was discharged. The Maple Trust charge was registered against the Property for 200K on Nov 2005 after the transfer from Lawrence to Wright had been registeredHELD: Ontario has a deferred system and “therefore” bank loses per Gibbs Is this consistent with Gibbs Ziff: no. Case comment “Looking for Mr Wright”Who is Thomas WrightThe real name of the rogue (Like dumpier)The former commission of the CFL (who the rogue is impersonating)- identify fraudFictitious person (like Hugh Cameron/Santa)An alias used by the rogueIn a deferred system:Gibbs: indefeasibleOntario: DefeasibleIn a deferred system:Gibbs: defeasible (forging commission’s signature is fraud)Ontario: DefeasibleIn a deferred system:Gibbs: defeasibleOntario: DefeasibleIn a deferred system:Gibbs: Indefeasible (scenario 2 Gibbs)Ontario: Defeasible- [privity with Rogue]Notes: In Gibbs: “Cresswell” was the rogue, “Cameron” was a fictitious person, for whom Cresswell acted as agent.In other words, they were alleged to be two different people – principle and agentHeld: the BFPs were defeasible b/c the person allegedly on title did not exist, and therefore could not hold title, sign name, etc.Neave at 102 “If “Cameron” had simply been as alias of Cresswell, albeit a Cresswell who obtained a transfer of the land fraudulently (the Cs, i.e. BFPs) registration would have afforded them protection”Per Gibbs: Alias: A man cannot with any propriety assume a name or alias unless he acts personally under that name or asserts it to be his own designation.Per Lawrence (Ontario Law) (Thinks they’re following Gibbs, Ziff disagrees)Evidence that a party dealt with a fraudster establishes that the party had an opportunity to avoid the fraud ii. Having an opportunity to avoid the fraud makes the party’s interest in land defeasible in favour of the true owner.C is not innocentsome of the fall-outReviczky v Meleknia, (2007) 88 OR (ed) 699Facts: Mr Rev became sole owner of Toronto propertyJune 2006: Mr. R found bill in name of Mr. Meleknia for hydroProperty purportedly sold to Mr. Meleknia May 15, 2006Frauds claimed to have power of Attorney for Mr Rev and sold houseCharge application from buyers to bankBank bringing action arguing title is indefeasible Analysis: Supporting deferred indefeasibility:Innocent homeowner can’t protect himself, but buyer couldTransactional privity of solicitors allowed discoverDue diligence isn’t enough if you’re in proximity to the fraudIn Ontario now, if you’re buying a property and taking a mortgage you better be careful!! You must make inquiries to determine legitimacy of title with who you’re dealing. How does buyer say to vendor and say, “is this the real owner” – you’re asking for much forensic analysis with every house closing and mortgagePurpose of Torrens: some risk, fly without net.Held: Charge was not validComments: A: ReviczkyB: Rogue with POA; Caplan was his agentC – Meleknia (plus solicitor)D – Bank (same solicitor)Difference between this and Lawrence is that C in innocentIt is a deferred system, and so C’s interest is defeasible b/c they dealt with titleD is not in the clear - hyper deferred. Solicitor deals with fraud’s lawyer and that is enough to defeat indefeasibility claim. Upside to Lawrence: if you take mortgage or buy house in Ontario and don’t feel protected by Land Titles system b/c of fear of dealing from Rogue (even Rogue with title) so you get title insurance. Case undermines transactional facility of parison with Albertaunder defeasibility, deferred owner has no opportunity to defer fraud, so good against world Chapter 6: Indefeasibility and Its Qualifications Part IIDocuments: Certificate of Title and Caveat from the Turta case; Surveyor’s Real Property ReportGeneral Description and Objectives:In this unit we continue the examination of the ways in which the land titles system in Alberta deviates from, or qualifies, the Torrens paradigm. This builds on the analysis of the fraud exception introduced in Lesson Plan #4. Similarly, in the discussion of overriding interests, which will be treated in the next lesson plan, this theme will be pursued further.As you consider the items considered below make sure that you attempt to discern the reasons for derogations from Torrens, and also the factors that should influence the judicial interpretation given to the Land Titles Act.Perhaps the most famous case on Torrens decided in Alberta is CPR v. Turta. We have provided you with a short extract from the trial decision, and also the main Supreme Court of Canada judgments. Turta allows basic Torrens concepts to be assessed and reviewed, and it provides some important guidance on the meaning and significance of ‘misdescription’ and ‘prior certificate of title’. It is important that you read this case carefully. It is loaded with valuable insights into the workings, advantages, and perils of land titles. 1.IntroductionTurta v CPR, [1954] 1 SCR 427Facts: CRP owned section 17 including mines and minerals1908: CPR sold NWQ to Podgorny “all coal and petroleum” reservedBUT: Certificate of title: Podgorny “reserving all coal” [title did not reflect petroleum]Mistake at land titles office 1910: CPR’s certificate cancelled but replaced but did not include the NWQ1918: Turta acquired the whole NWQ s 171943: registrar’s corrections; petroleum added to the reservationPetroleum deposits in province and registrations hadn’t focused on mineral estates so during war the registrar made changes where they though mistakes existed.1944: Anton transfers ? to Nick Turta & ? to Metro Turta, reserving all coal and petroleum to CPR.1947: oil is worth a lot1949: Reference in the reservation to CPR was struck out of each certificate.1951: CPR leased of petroleum rights to Imperial OilAnton claim to be owner of petroleumTurta claims “I’m not guilty of fraud, I acquired title, paid good money, no reservation of petroleum, BFP without notice”TJ: Anton didn’t understand English, knew nothing about mineralsCorrections were of complete nullityAnton was BFP with no misdescription, with valuable considerationTitle indefeasible“Since the CPR did not acquire ownership of the petroleum by virtue of the reservations contained in the foregoing transfer, its ownership must either have remained in the PL, or have been transferred to Nick and to Metro and Bessie Turta. I somewhat anticipated a defence on the ground that, if any right of action lies, it lies in Nick, Metro and Bessie Turta, but while such defence is set forth in the pleadings, it was not raised in argument. I take it from the absence of such argument that the defendants concede that the consent of Nick Turta and the assignment from Metro and Bessie Turta, referred to in the PL’s examination for discovery conferred…. [missed end of slide quote]CA, aff’dWhen Anton purchased he was no interested in minerals or petrolNo authority by registry to correct certificate Held: Turta wins. Only in mistake to boundaries do you have an exception to indefeasibility. Sometimes mistakes won’t be fixed to uphold integrity of the system.Analysis: RAND J CPR states that the original error was a misdescription, which can be then by s 106 of LTA be asserted against subsequent purchaserPer Gibbs: certificate is conclusive evidence of his title in favour of any person dealing with him in good faith and for valuable considerationTwo types of misdescription: 1) today LTA s 183(1)(e): “no action for recovery against owner EXCEPT … person is deprived of land… due to misdescription of land or of its boundaries” leaves original owner’s rights unaffected even against a BFP. LTA s 62, same exception “by wrong description of boundaries or parcels”. EXCEPTION TO INDEFEASIBILITY.NO CURTAIN WILL EVER FALL with mistakes to boundaries or parcels “deprived” must be interpreted narrowlygenerally assume recovery is foreclosedapplies for land not under Torrens system (no requirement to register grants from before 1887) 2) Today LTA s 168: “any person deprived of any land by the registration of any other person as owner … by error, omission or misdescription in certificate of title… is barred from bringing an action…can bring action against Registrar” bars the original owner and gives him rights to damages against Registrar. NEW OWNER IS INDEFEASIBLE“If, in this case, the duplicate had been examined by the C.P.R., the errors would have been apparent as the scheme of the statute contemplated. The existence of such a protection to the owner is almost conclusive that the provisions of the Act preserving rights against a bona fide purchaser do not extend to a misdescription concealed from him but exposed to the original transferor.If misdescription is concealed from BFP but exposed to original transferor, no protection to BFP.Prior Certificate of Title: NOT relevant: the omission from the memorandum of cancellation and the new certificate cannot prevail against a subsequent purchaserFor PCT to work you need two live certificates of title b/c on transfer to Podgorney that part of the certificate was cancelled.[If Imperial had won, it would gut system, you would have to do prior search to find who had title before. Defeats principle of Torrens]Were 1943 Corrections Authorized?No, corrections only allowed for things that were conveyed without valuable considerationPodgorny conveyed to Turta every interest in land for consideration (inc petrol)CPR argues: Turta not BFP b/c he didn’t pay for mineral estate and his amount paid was not related – [NO: court can’t parse consideration, parcel was bought as a whole]cannot embark on an inquiry of what the mindset of the buyer was… then no title would be secureESTEY JMisdescriptionS 183 allows action against owner if there was a misdescription of land, CPR claims minerals are land and can claim against Turta60: references prior certificate but NOT misdescription62: misdescription = wrong description of boundaries or parcels183: misdescription = of the boundaries or parcels of any land”“other land”, “boundaries” and “parcels” in this context mean AREAS OF LAND DEFINED IN THE SURVEYS MADE UNDER THE DOMINION LANDS ACT Omissions by registry of a profit a prendre does not fall within meaning of misdescriptionDid Registry have authority to cancel CPR certificate of titleNo, exceeded jurisdictionOnce transferred to Turta it derives its force and validity by virtue of statutePrior Certificate of TitleImplies two certificates of title for the same landCPR did not have title, their certificate was cancelledDISSENT/Renford (blew gasket)Land per s 2(a) includes minerals, petroleum is a mineral In the transfer from the C.P.R. to Podgorny, it may be repeated, coal and petroleum were specifically excepted and reserved to the C.P.R. the coal and petroleum excepted and reserved in the transfer to Podgorny were severed from the estate transferred to the latter and they became separate and distinct from the estate If the certificate had been issued to Podgorney with petroleum was not an error but a certificate in land t of which he had not right… issuing would have been ultra vires on the part of the registrarPARADOX: registrar has power to issues certificates and they are indefeasible BUT if it makes a mistakes, it issues a certificate that is ultra varies and not in accordance with Act and Act does not protect certificates issued without power.Podgorney’ certificate was complete nullity and could never be good root of title [Ziff – sorry registry can make mistakes that are to a point fixable]Podgorney fraudulently transferred estate with petrol to Anton, BFPs for valuable considerationPodgorney did not intend to sell or transfer petrolAnton did not intend to buy…So how is there consideration for petrol?How do you acquire something in good faith that you never intended to purchase?If no authority to issue certificate, no authority to cancelAppeal allowedShould Podgorny win per Ziff?No!Statute allows for correction of errors as long as BFP doesn’t intervenePodgorny got it added on, the type of mistake the registrar can CORRECTIn personam claim can defeat immediate indefeasibility – record does not reflect CPR-Podgorny deal. Torrens wasn’t relied on, it was a gift What about the reservation to the CPR? Did it not return the petroleum to the CPR?Even though Turta was given rights, did he not return them to the CPR, that reservation appears 8 timesTJ: “it is not possible to reserve to some person an interest in land which that person did not own prior to the instrument containing the reservation” (Ziff thinks this is right)You can’t in a reservation, convey to a 3rd partyWho then gets the mines and minerals?Do they stay with Turta b/c reservation is of no effect or do they pass to family b/c reservation is of no effect?What about the 1943 changes? Why fixableNo one relied on the changes? But is that the caseWhy wasn’t Imperial Oil a purchaser for value too?Imperial was BFP b/c they had a lease.When Imperial purchased imperial lease Turta had caveat, giving notice of interest so Imperial was with notice of Turta claim“At the time of the option agreement between CPR and Imperial in 1942, which was before the alterations made by the registrar to the PL’s certificate the PL was the registered owner of the petroleum and at the time of the lease of those lands by CPR to Imperial in 1951 both CPR and Imperial had notice of the PL’s claim to petroleum by virtue of the caveats filed by him in 1950 (Good per Ziff)Public Trustee v Pylpow, (1972 QB): “what was the effect of the erroneous reservation to the Crown? Even though it clearly granted no interest to the Crown, was such a reservation effectual to prevent the passing of the minerals?”Citing: Shorb v Public Trustee, aff’d ABCA: [i.e. preventing the passing of the mineral estate] ‘should be limited to those cases where the grantor knows he owns the oil and gas and intentionally attempts to reserve them to a stranger, and not to a case… where the reservation to a stranger is mistakenly and unconsciously made”… Apply this to Turta: reservation was likely a mistake and unconsciously made because he had no idea he had mineral title and his English wasn’t very good.TJK: You can give something you don’t know you have (you transfer land to someone, not knowing it is rich with oil, that is lucky for buyer), but you cannot reserve something unconsciously. Where misdescription of boundaries is an exception to indefeasibility, what do you do as a lawyer?Most lawyers just pray b/c you never really know2.MisdescriptionApply IKEAS 60S 62S 168S 183 the nature of surveys Misdescription of a boundary presupposes you know what the actual boundary is. Description of boundary can be ambiguous, Elements of description that don’t “jive”EX: meats & bounds descriptions: “starting at the westbank of the river, go 200 ft east to the old oak tree”. But the Oak is 250 years and now there is a problem, does the tree or the measurement govern? Ambiguous Legal Description: Batting order of consideration (Mapp book)1) Most probative: Natural monuments (Oak tree)2) Artificial monuments (“Smith farm”)3) Abutting boundaries4) Courses (off-angle)5) Distances6) Least probative: Acreagemisdescription and adverse possession (Edwards v. Duborg; Limitations Act; L.T.A., s. 74)LTA 74LTARegistration of judgment quieting title, etc.74(1)??Any person recovering against a registered owner of land a judgment declaring that the person recovering the judgment is entitled to the exclusive right to use the land or that the person recovering the judgment be quieted in the exclusive possession of the land, pursuant to the?Limitation of Actions Act, RSA 1980 cL15, or pursuant to an immunity from liability established under the?Limitations Act, may file a certified copy of the judgment in the Land Titles Office.(2)??Subject to?section 191, the Registrar shall?????????????????????????? (a)??? enter on the certificate of title a memorandum cancelling the certificate of title, in whole or in part, according to the terms of the judgment, and?????????????????????????? (b)??? issue a new certificate of title to the person recovering the judgment.In AB law, there is a fallback to the “misdescription” exception to indefeasibility. If there has been a misdescription over the years Title insuranceAdverse possession – if you hold title where certificate misdescribes but you have been in possession for 10 years, then the prior claim is defeated for that reason.Ziff: AB has it right. Still chance of misdescription (62 says so) but adverse possession fills the gapEX: misplaced fence Ziff’s backyard (adverse possessor (AP) property lineTrue Owner (TO) fenceAt Common Law: AP 1 was on land for 6 years. AP2 moves in. AP1 sells everything (including acquired time) they have to AP2. AP2 moves in with 6 years on the clock.TO1 sells to TO2 after six years: clock restarts b/c of Land Titles system. TO2 checks certificate of title and no mention on certificate of Adverse possession interests. Can put caveat on title from adverse possessorZiff: limitation period in AB is 10 years for land and it starts again if the squatted property is sold to BFP (TO1 TO2)S 3(8) Limitations Act: (8) If the right to recover possession of real property first accrued to [TO1] in title of [TO2] from whom the [TO2] acquired the title as a donee, proceedings to recover possession of the real property may not be taken by [TO2] except within 10 years after the right accrued to [TO1]. If TO2 has taken as a donee (gift) the clock doesn’t restart. Time based on when donor first had right of actionIf you purchased property, presumably there is a different starting point, it starts with your title.Only by implication that clock restartsEdwards v Duborg, [1982] 6 WWR 168 (AB QB) Facts: from 1919 Duborg’s predecessors owned a peninsula in a lake that was on LSD 7 and the West ? of LSD 8. Edward’s predecessors owned the SEQ (LSD 1,2,7,8), EXCEPT LSD 7 and the W1/2 of LSD 8.There was an incorrect survey of land done, that seemed to imply there was no land on LSD 8 (just lake)Registry struck “W1/2 of LSD 8” from Duborg’s predecessor’s titleWhen Duborg acquired title it included ONLY LSD 7SEQ was transferred many times and at some point the transfer only said SEQ 13 “except” LSD 7 and failed to mention anything about the W1/2 of LSD 8.In 1966, registry corrected both Edwards and Duborg’s title so add W1/2 of LSD 8 to Dubog’s and strike it from Edwards’s title. Issue: Does adverse possession correct issues?Analysis: Registry made correction in favour of Duborgs in 1966, Edwards commenced action in 1978 – are they statute bared?Edwards claims they are not taking action but seeking unauthorized entries to be expunged and that they never “lost” ownership.Court: no, Edwards is taking action to recover lands that were adversely possessed by Duborgs.Adverse possession:Edwards did not know they were purchasing peninsula After discovering, they ran add to sell peninsula in 1972, which is the first point in time when Duborgs could have had notice of Edward’s interestEdwards never tried to fence property or protest to Duborg’s grazingLand could only be accessed via Duborg’s land and Edwards never asked for accessDuborg’s use was substantial and continuousUsed, grazed, used for recreational purposesRefused to let surveyor on landPaid taxesNever relinquished their possessionHELD: finding of adverse possession on behalf of respondent, Edward’s action barred. Should have taken action within 10 years of 1966 when registrar made title correctionMisdescription: Land should always have been in Lawrence’s chain. Both changes were permissibleMisdescription is exception to indefeasibilityExtinguished title under substantive property lawPer s 66 (62 today) of LTA: “wrong description of boundaries or parcels”Turta stated misdescription exception did not apply to mineral rights, but here we are only dealing with boundaries.Bowers v Bowers (2002), 4 RPR “The general rule …where there is an ambiguity in the grant is to give most effect to those things about which men are least liable to mistake. … the things by which the land granted is described, have been thus marshalled;first, the highest regard had to natural boundaries; second, to lines actually run and corners actually marked at the time of the grant: thirdly, if the lines and courses of an adjoining tract are called for, the lines will be extended to them, if they are sufficiently established; fourthly to courses and distances, giving preference to the one or the other according to circumstances” - TAKE AWAY: acreage is so irrelevant, it’s not even listed hereinstances of misdescription? Kristiansen v Silverson, [1929] 3 WWR 322 (Sask CA)Facts: HBC owned all of s 8HBC sold NWQ, containing 160 acers (more or less) to PL [K]HBC sold NEQ, containing 160 acers, more or less, to the defendant [S]Survey was done correctlyPits placed as survey mounds were done incorrectlyNWQ actually had about 180 acers/ NEQ actually had about 140 acres PL (NWQ) claims injunction to restrain DF from trespassingPL seeking declaration that monument is property boundary, regardless of area/acreage Held: Monument on the ground that wins EVEN if it was incorrectly placedIssue: Missed signal in grant, told ? and 160 acersContest: Artificial monuments v AcreagesAnalysis: Though the acreage was wrong, the monument wins (even if it is wrong)From the Dominions Land Surveys Act, court inferred that recourse to incorrectly placed mounds, posts, monuments or boundaries erected, marked, placed or planted in the survey must be awardedMound and monuments WIN over patents, certificates of title, or other instrumentsBurden v Alberta (Registrar of Titles) (1913), 5 WWR 112 (Alta SC)Facts: Certificate issued in 1891 for NWQ of s 24, containing 27 acres (due to river). Certificate passed many times. Land is actually 17.9 acres (mistake in original survey). PL purchased title at a price per acre on the assumption he was purchasing 27 acres. Issue: Is Registrar liable for the survey mistake in acreage due to making a “Mistake” Held: Acreage is not guaranteed by certificate of title.Analysis: The registrar only guarantees seller is owner in fee simpleRegistrar does not certify acreage3. Prior Certificate of Titlerelevance and meaningOverlap: Two certificates can be issued for the same parcelFailing to cancel: sale to subsequent owner without cancelling title to original ownerEX: Two Crown Grants:A: 1910 1990 2017B: 1920 1940 1980 2017In land titles, last in time is first in right (even if flawed). But if two people hold top title, then you reverse system – first in time, first in right.But A wins… you go back to original sale.LTA 62(2)LTA 62 (2)??For the purpose of this section, that person is deemed to claim under a prior certificate of title who is holder of or whose claim is derived directly or indirectly from the person who was the holder of the earliest certificate of title granted, notwithstanding that the certificate of title has been surrendered and a new certificate of title has been granted on any transfer or other instrument.GO Back in time to first certificateHow to compute prior certificate of titleGo back through cancelled certificatesAlso mentioned in 60(2)LTA 60(2)LTA60(2)??Such priority shall, in favour of any person in possession of land, be computed with reference to the grant or earliest certificate of title under which the person claiming priority or any person through whom that person derives title has held possession.Same resultwas Turta correctly decided?CPR’s certificate was cancelled so there weren’t two certificatesLTA S 60/s62: the owner holds it free from other claims not on titled except for fraud or “someone holding under prior certificate of title”. Imagine the sale to P, which included petroleum and a failure to cancel CPR title that would be consistent with sale (oil added to P’s title but not cancelled from CPR’s). Now, if we go back to T1 to determine who has prior title then it is CPR. Both are connected to 1st certificateNo answer to problemNo cases, so problem not worth discussing4.VolunteersGeneral Rule: Curtain does not fall for doneeIn AB, it has long been assumed that: “The curtain of indefeasibility will NOT fall on a transfer by way of gift”. A donee acquires no greater interest than that held by the donor. Kaup (SCC): “the conclusiveness referred to in s [now 62] is for the benefit of the bona fide purchaser for valuable consideration only”.Passburg Petroleums Ltd v Landstorm Devel Ltd, ABCA 1984S 3(8) Limitations Act, Adverse possession, TO2, 3(8) ADDED 2009Holt v Singer HypoDarnley v Tennant, 2006Curtain does not fall for d/ee Curtain does not fall for d/eeCurtain does not fall for d/eeCurtain falls for d/ee “[The volunteer] does not rely on the register. The volunteer does not look to the register to decide whether or not he will accept a gift. He gives no valuable consideration. He is happy to rec’v whatever interest the registered owner has to give. The volunteer is in the same position as the registered owner who may have created an old numerous unregistered interests. Accordingly, the volunteer cannot use the Act to better his position. It is designed to protect third party purchasers for value. This is made abundantly clear by the unanimous judgement of the SCC in Kaup v Imperial.If TO2 is donee clock does not restart, provision only added a few years agoAdded on the assumption that they were tracking the dichotomy of the case lawZiff thinks 3(8) was drafted in errorInconsistent with LTAAssume Singer was volunteer and acquired property as gift.Unregistered lease on propertySince he cannot acquire more than the donor, he cannot acquire possession (b/c donor did not have possession)No reason for Holt failed to avail itself of the system. Per LTA, curtain falls for donee, b/c act specifies that curtain doesn’t fall for donee acquiring property by fraud, so implied it does fall for other donees (see below).But LTA s 60/62 doesn’t say anything about needing to be a BFP. Franz Slatter does not say you need to be BFPZiff thinks Slatter is right. Many past statements about BFP/donees have been made in obiter VOLUNTEERS REMAIN A QUESTION MARKDarnley v Tennant, 2006 ABQB 575Facts: Application to remove caveat from title based on it not being registered, which the applicant herself helped create.Issue: Was the Applicant a purchaser for value?Analysis: Applicant rec’d title as a result of divorce settlement, which qualifies as value for s 203LTA s 183(1): no action (indefeasible) EXCEPT from fraudster or a volunteer who acquired title from fraudster (BFP for value acquiring title from fraudster is indefeasible per 183)LTA s 170: an owner who obtains title by fraud can only pass good title to a purchaser for value Held: Applicant was not fraudulent, title is indefeasible and applies regardless of consideration.Goes against general rule Interesting that they didn’t address 60/62, neither of which indicate buyer must be BFP for valuable consideration.detrimental reliance (Law of Property Act, s. 69)Law of Property ActImprovements made on wrong land through error 69(1) When a person at any time has made lasting improvements on land under the belief that the land was the person’s own, the person or the person’s assigns (a) are entitled to a lien on the land to the extent of the amount by which the value of the land is enhanced by the improvements, or (b) are entitled to or may be required to retain the land if the Court is of the opinion or requires that this should be done having regard to what is just under all circumstances of the case. (2) The person entitled or required to retain the land shall pay any compensation that the Court may direct. 5. Writs of Enforcementthe old approach61(1)(e) used to read: “The land mentioned in any certificate of title granted under this Act is, by implication and without any special mention therein, subject to… Any decrees, orders or executions, against or affecting the interest of the owner of the land, that have been registered and maintained in force against the owner.”Land Titles Office used to have a General Register so you may know what land debtor had, so you don’t know against which property to register the judgement. Then, you buy land you check for writs under the name of the seller. AbolishedToday, search by name and place against property. (LTA ss 16-17)the new rules (ss 122-125)priority (Martin Commercial Fuelling Inc. v. Virtanen)Martin Commercial Fueling Inc v Virtanen (1977), 144 DLR (4th) 290 (BCCA)Facts: Mr. Virtanen owned 1/3 of BlackacreOct 10: Mr. Virtanen & co-owners to sell Blackacre to Gill for $275,000, free and clear of all financial charges and encumbrances (Blackacre was subject to two prior mortgages and a tax sale notice), Gill paid 5K deposit. Sale not put on title (can do so by caveat).Oct 25: Martin registered judgement against Blackacre for $140,000Nov 5: Addendum to agreement – Gill to pay money to Virtanen’s lawyer, who would discharge financial charges from title. Lawyer fucked up: lawyer did not recheck title and was unaware of Martin’s registered judgementMartin was not paidJune: Martin sought order to sell Virtanen’s 1/3 interest in Blackacre and recover his debtTJ: vendors held Blackacre in a constructive trust for the purchasersIssue: Is Martin’s judgement enforceable against the purchasers whose transfer was registered subsequent to the registration of the judgement?Agreement with Gill was first-in-time, but the transfer was registered second-in-time (after the writ was filed)Held: Gill, second in time, is not subject to writ.Writ only enforceable against equity of debtor, which in this case was sold.Analysis: BC has held that debtor (purchaser on facts) takes “subject to the equities” arising between a registered owner and a third partyOn constructive trusts: buyer gets equitable interests Church v Hill: Equitable interests can exit within Torrens, cites Jellett.Jellett v Wilkie APPLIED: SCC: writ can only be attached to an interest the judgement debtor actually has. When writ was placed on title, sale had occurred. So all debtor had was judgement against proceeds of sale. Can enforce specific performance of contract Martin’s judgement is subject to the equities Normally purchaser dealing with registered owner relies on faith of registry and takes not of chargesHere, buyers will retain title free of chargesWhy not protect judgement debtor?Judgement creditor (imposing writ) is like a volunteer – they haven’t bought the property. They found it and attached a writ. They are NOT BFPs vis a vie writ. Fraz: why should it matter? They are on title first Hypothetical Example: A judgement is registered against Blackacre, as in Martin, there is a prior unregistered agreement for sale. The judgement creditor shortly afterwards assigns the writ of enforcement to a collection agent for 75% of the debt owned. The transfer of title is then registered. What is the correct state of title?ANSWER UNKNOWNNo longer volunteers – bought on strength of title. If BFP is needed to take benefit of LTA, that is present. Jellett: no greater interest than debtor had, and you are trying to gain better interest. Like a mortgage, you don’t know how much is due you should check. It’s easy to find debt owed on mortgage, hard to find out how much is owed here.Maybe: protect BFP even if it is inconsistent with Jillett b/c LTA confers good title when purchased from thief (not OK at CL). LTA often makes something out of nothing (inc. forged title).OPEN QUESTION – maybe it doesn’t matter if they are a volunteer (Martins maybe wrong on this point?). 6.Corrective Powers registrar’s powers: nature and function (ss. LTA 187-188)Land Titles ActCorrection of instrument187(1)??If it appears to the satisfaction of the Registrar?????????????????????????? (a)??? that any instrument has been issued in error or contains any misdescription of land or boundaries,?????????????????????????? (b)??? that any entry, memorandum or endorsement has been made in error on or omitted from any instrument,?????????????????????????? (c)??? that any instrument, entry, memorandum or endorsement has been fraudulently or wrongfully obtained, or?????????????????????????? (d)??? that any instrument is fraudulently or wrongfully retained,the Registrar may by written demand, that may be in the prescribed form and that shall be served on the person or be mailed to the person’s last known post office address, require the person to whom the instrument has been issued, or by whom it has been obtained or is retained, to deliver it up for the purpose of being cancelled, corrected or completed, as the case requires.(2)??If any person refuses or neglects to comply with the written demand or cannot be found, the Registrar may apply to a judge to issue a summons for that person to appear before the judge and show cause why the instrument should not be delivered up to be cancelled, corrected or completed.(3)??If the person when served with the summons either personally or in the manner directed in the summons neglects or refuses to attend before the judge at the time set out in the summons, the judge may issue a warrant authorizing and directing the person so summoned to be apprehended and brought before the judge for questioning.(4)??In the case of any instrument that comes within the provisions of subsection (1), the Registrar, whether or not the instrument is in the Registrar’s custody or has been produced to the Registrar in answer to the Registrar’s written demand, so far as practicable without prejudicing rights conferred for value, may do one or more of the following:?????????????????????????? (a)??? cancel, correct or complete the register;?????????????????????????? (b)??? wholly or partially cancel any instrument;?????????????????????????? (c)??? correct any error or make any entry or addition in the instrument or in any entry, memorandum or other endorsement on it or in any memorial, exemplification or copy of any instrument;?????????????????????????? (d)??? supply entries omitted.Entry of correction188(1)??In the correction of any error or in the making of any cancellation, correction or completion or in the making of any entry or addition, the Registrar shall keep a record of the original words and the Registrar shall mark the date on which the cancellation, correction, completion, entry or addition was made or supplied.(2)??Every cancellation, correction or completion in the register and every instrument or entry cancelled, corrected, completed or added to has the like validity and effect as if the error had not been made or as if the entry or addition had not been omitted.application Heller v Registrar, [1963] SCR 229Facts: Respondent (Heller) Feb 1958: wife presented at LTO and transferred land from her husband to herself for $1, conveyance registered and certificate issued under her nameRegistry fucked up, thought they had the duplicate certificate, but didn’tJan 1959: Husband wrote registry requesting title be returned to himselfRegistry declined b/c deed seems proper on its faceHusband appealed registry’s decision to BCSCRegistrar refusedPer Martland J “it is no part of the function of the Registrar, under this section [today 187], to adjudicate upon contests rights of the parties, for the determination of which it would be necessary for him [sic] to hear, rec’v and weight evidence. [S]he can only act on material which is [in the] records”Analysis: Constitutional issue: the registrar is given power to correct fraud. Martland is doubtful this would be intravaries. S 96 judge issues that ONLY a s 96 judge can adjudicate and to allow registrar to do this would violate this. Registrar can only do fixes based on face of recordComments: In Turta there was a mistake on the face of the record b/c there was reservation that didn’t show up on titleWhat can the registrar do? (Assuming Martland is right)Anything making a finding of fact, the registrar cannot do (i.e. comparing signatures and saying they are different so declining registration). Solution: Kraut – today s 151 – registrar may place caveat on title – cannot adjudicate 151 is broad but title is “Caveat for Crown or person under disability”Kraut: 151 has two parts 1) power on registrar to file caveat on part of crown or person under disability and 2) to prohibit the dealing with any land in any case in which it appears to the Registrar that an error has been made in a certificate Per Ziff Kraut is correct.Heading is misleadingjudicial powers (LTA ss.189-91)Questioning and orders by judge189???On the appearance before a judge of any person summoned or brought up by virtue of a warrant as aforesaid, the judge may question that person on oath and if it appears right to do so may order the person to deliver up the instrument as aforesaid, and on the person’s refusal or neglect to deliver it up, pursuant to the order, or to be put under oath, or to be questioned, or to answer any question touching the matter after being sworn, may commit the person to the nearest common jail for any period not exceeding 6 months, unless the instrument is sooner delivered up or sufficient explanation is made why this cannot be done, and in that case, or if the person has absconded so that summons cannot be served on the person as hereinbefore directed, or if a period of 3 months from the time of mailing the demand to the person has elapsed without the instrument having been returned to the Registrar, the judge may direct the Registrar to cancel or correct or complete the instrument in the Registrar’s possession or any memorandum on it relating to the land and to substitute and issue if necessary any instrument or make whatever memorandum the circumstances of the case require, and the Registrar shall obey the order.RSA 2000 cL4 s189;2009 c53 s95Power of judge to cancel, correct, etc., duplicate certificate190(1)??In any proceeding respecting land or in respect of any transaction or contract relating to it, or in respect of any instrument, caveat, memorandum or entry affecting land, the judge by decree or order may direct the Registrar to cancel, correct, substitute or issue any certificate of title or make any memorandum or entry on it and otherwise to do every act necessary to give effect to the decree or order.(2)??In particular and without limiting the generality of subsection (1), in any case where a title to land has been issued and the owner has entered into any contract relating to the sale or disposition of the land and if it can be shown to the satisfaction of the judge that?????????????????????????? (a)??? the applicant is entitled to a transfer of the land and to be registered as its owner and the registered owner has no further interest in the land, and?????????????????????????? (b)??? the registered owner is dead and no transfer of the land to the purchaser has been made or the registered owner has not been located after a reasonable inquiry and no transfer of the land to the purchaser has been made,the judge on the giving of any notice to any persons that the judge may require, may by order direct the Registrar to cancel the existing certificate of title and issue a new certificate of title in the name of the purchaser.RSA 1980 cL5 s180;1999 c10 s35Registration of judgment, order or certificate191(1)??Subject to subsection (3), the Registrar shall not register a judgment, order or certificate made in any proceedings of a court that operates to cancel a certificate of title, terminate an interest in land or discharge an instrument or a caveat unless the judgment, order or certificate?????????????????????????? (a)??? is consented to by all the parties to the proceedings or their solicitors,?????????????????????????? (b)??? was granted ex parte and states that it does not have to be served on any person,?????????????????????????? (c)??? is accompanied with a written undertaking from those persons having a right to appeal from the judgment, order or certificate, or their solicitors, that no appeal from the judgment, order or certificate will be commenced,?????????????????????????? (d)??? is accompanied with a certificate of the clerk of the court that issued the judgment, order or certificate to the effect????????????????????????????????? (i)??? that no defence or demand of notice of proceedings has been filed in the proceedings on behalf of any defendant, or??????????????????????????????? (ii)??? that the time for appeal from the judgment, order or certificate has expired and that no notice of appeal has been filed,?????????????????????????????? or?????????????????????????? (e)??? is accompanied with a certificate of a solicitor to the effect????????????????????????????????? (i)??? that an appeal to the Court of Appeal has been finally disposed of or discontinued, that the time for an appeal to the Supreme Court of Canada has expired and that no notice of appeal has been filed, or??????????????????????????????? (ii)??? that the judgment, order or certificate has been appealed to the Supreme Court of Canada and that the appeal has been finally disposed of or discontinued.(2)??If a judgment, order or certificate referred to in subsection (1) has been appealed to the Court of Appeal or to the Supreme Court of Canada, a copy of the final judgment shall accompany the solicitor’s certificate referred to in clause (e) of that subsection.(3)??This section does not apply to?????????????????????????? (a)??? an order removing a builders’ lien or removing a certificate of lis pendens with respect to a builders’ lien, or?????????????????????????? (b)??? a judgment, order or certificate that expressly states that it shall be registered notwithstanding the requirements of subsection (1).MINI QUIZHYPO: A owns Blackacre; she leases the land to B. B tenders a lease in proper form for registration; it is registered. The lease provides that the term will continue so long as the lessee holds shares in the company; B holds shares. The freehold is sold by A to C. B is not a rogue!!!! B’s rights are challenged by C. CommentLease is indefinite – so under substantive law governing landlord/tenant, lease is invalid and it was registered. So too bad, doesn’t matter. Substantive law governs.Title is frail despite registration. Registration doesn’t validate interest contrary to substantive law.Chapter 7: Overriding InterestsGeneral Description and Objectives:Further exceptions to the basic Torrens model. Here, we will consider interests which are binding on BFP’s of land, even though those interests are not registered on title. It will be seen that these overriding interests can arise by virtue of the LTA, or through laws external to that Act. You should attempt to understand how these ‘invisible clouds on title’ arise, and the policies that underlie their acceptance within the system.1.Introduction sourcescommon lawLTAs61(1) – six overriding interests other statutesFederal Interface: Soldier’s Act – cannot override this with LTA due to constitutional reasonsAboriginal Title: LTA and aboriginal claims Provincial: Some provincial statutory provisions that create overriding interests 2.LTA Overriding InterestsCrown reservations (s. 61(1)(a))LTAImplied conditions61(1)??The land mentioned in any certificate of title granted under this Act is, by implication and without any special mention in the certificate of title, subject to?????????????????????????? (a)??? any subsisting reservations or exceptions, including royalties, contained in the original grant of the land from the Crown.Until 1949, the Act also provided that land was subject to the s 61 listed items “unless the contrary is expressly declared”Today, this is gone, the title could say “Blackacre to X” you lose your mineral estate b/c the Crown reservation is implied, even if it inconsistent with statute.If you acquire grant before 1949, then you can probably keep mineral estateReservation of minerals need not be expressly stated b/c it rises by implication of s 35 of Public Lands Act Portage La Prairie v Canadian Superior Oil, [1954] SCR 321Facts: Nov 1948: Registrar issued certificate to Hiebert … certificate deemed subject to “any subsisting reservation contained in the original grant of the land from the Crown.Issue: Are oil rights included in subsequent purchases for value to whom certificates of title were issued?Analysis: KERWIN JLand in act is defined as “mines, minerals and quarries, unless excepted”BUT s 25 of Manitoba (s 61 equivalent in AB): No grant from Crown operates to convey gold, silver, or other minerals unless expressly conveyed. S 25 (AB equivalent s 61) meaning: if a specific declaration that gold or silver mines of any minerals are NOT included unless expressly mentionedSecuring registered title does not change thisRAND J: Certificate had reservationS 21 reserved minerals in original transferSucceeding certificates were also subject to reservations easements LTA 61(1)(f) & 61(1)(c)Methods of CreationMatter of intention between parties & can contract out of easement creation express or grants and reservation Implied grants and reservation (e.g. necessity)If land is landlocked with no access to public way then implied easement Necessity: necessary AND no express agreement to the contrary AT THE TIME OF THE GRANT. If access is lost to your property after grant is issued, you cannot retroactively state you have easement due to necessity. Servient owner determines where easement is and it must be reasonable.Estoppel: estops servient owner from saying you don’t have right of accessStatute: EX condominium property act where easements to run wires and pipes are impliedPrescription (?): long uninterrupted use. Similar to adverse possession. But easement by prescription has been abolished by statute in Alberta but is live elsewhere in Canada.LTA s 61(1)(f)LTAImplied conditions61(1)??The land mentioned in any certificate of title granted under this Act is, by implication and without any special mention in the certificate of title, subject to??????????????????????????? (f)??? any right of way or other easement granted or acquired under any Act or law in force in Alberta.basic elements of easements (Shelf Holdings)Easement TEST (Ellenborough) must be a dominant and servient tenementeasement must accommodate the dominant tenementdominant and servient owners must be different personeasement must be capable of forming the subject matter of a grant (3-sub parts)Is the right to wide and vague?Is the grant inconsistent with the proprietorship or possession of the alleged servient owner?Is it a mere right of recreation without utility of benefit?Shelf Holdings (1989), 94 AR 241 (CA)Facts: March 1967: unpatented land sold from Crown to PeregrymOctober 1974: Easement to Husky registered in LTOMay 1975: Plan of Survey pipeline right-of-way survey registered in LTOAug 1977: Certificate issued to Crown without Easement or Plan of Survey [clerical error]November 1977: Crown sold land to Peregrym without Easement or Plan of SurveyOctober 1979: Peregrym sold section to FenwoodFeb 1989: Fenwood’s interest assigned to ShelfMay 1981: Registrar endorsed Shelf’s Certificate of Title w EasementShelf Holdings has ? sectionHusky built a pipeline across landInspector registered easement after Shelf being registered ownerIssue: Is the title of Shelf Holdings Ltd subject to an easement (registered)Is easement incorporeal non-possessory OR possessory interest in land (like lease)??/How much control does pipeline have over servient land? (Since pipeline takes up physical space, instead of just being a right-of-way)Held: Easement conferred un Husky certain rights of occupation without divesting the owner of the servient tenement of its proprietary rights. Easement attaches to property by implication and WITHOUT endorsement of titleAnalysis: Must look at intentions of contract, and if no contract intentions of testator or grantor Easements detract from right of owner to exclude people from his property – when does it reach a point that the right in question detracts so substantially from the right of the servient owner that I must be something more than an easement (“The nature of an Easement” article)Purpose of easement is to convey benefit on dominant tenementHusky’s easement is valid and enforceable under 61(1)(f)If you meet requirements of easement, it is overriding.the meaning of s. 61(1)(f) (Petro-Canada)Petro-Canada Inc v Shaganappi Village Shopping Centre LtdFacts: Petrocan had dominant tenement (after changing hands)Shaganappi has servient tenement (after changing hands)Fencing on shopping center reached easementIssue: is the easement enforceable by Petrocan against Shaganappi despite the fact that, when Shaganappi took title, the easement was NOT registered against the title NOR protected by caveat?LTA S 61(1)(f): title subject to easement granted under any Act or law in force in Alberta.Analysis: Contract law doesn’t work b/c neither Petrocan or Shaganappi were original parties in contactEasement was acquired by contract – is that “under law” in AB?Torrens system stands for indefeasibility – don’t want to mess with thatNo reason private easements should be except from indefeasibilityNo policy reasons for easement to be overriding interest without registration – why would we favor easements over all the other hundreds of things that you could register Will read “granted under any law” narrowly b/c other provisions use works “however created”Held: Petrocan loses, their easement was not created under an Act or by law“ANY LAW”: meaning those implied by necessity (implied by law), statute, estoppel (maybe)Express grants must be registeredComments: Counterintuitive – necessity is “invisible” – no reference in granting document, no need to put on title and no presence needed on the ground but they remain protected by 61(1)(f).Petro-can becomes landlocked – so don’t they get easement of necessity? NO b/c a necessity is not mentioned in grant and Petro didn’t protect it property. Necessity won’t fill these gaps.reconciling Shelf and Petro-Canada The fact that express easements weren’t part of 61(1)(f) WASN’T argued in Shelf Holdings,Everyone assumed in 61(1)(f) “granted under law” was to be interpreted broadly, Shaganappi argued it otherwise and WONPipeline wasn’t actually implied b/c it was a private agreement/express. So based on Shaganappi Pipeline easement would not have been “granted under any law” within 61(1)(f) either.Pipeline Act also allow easements without consent. public easements, etc.LTA s 61(1)(c)Land Titles ActImplied conditions61(1)??The land mentioned in any certificate of title granted under this Act is, by implication and without any special mention in the certificate of title, subject to?????????????????????????? (c)??? any public highway or right of way or other public easement, howsoever created, on, over or in respect of the land,Stockwell (1985), 64 AR 335 (CA)Facts: A road over private land exists; municipal government argues the road has become a municipal highway.Issue: Has there been a creation of a public highway by dedication?TEST: There must be, on the part of the owner, the actual intention [subjective] to dedicate (proved with objective evidence – i.e. fences)It must appear that the intention was carried out by the way of being thrown open to the public and that the way has been accepted by the publicAnalysis: Road not heavily usedSituated since 1928Long uninterrupted public usersLimited use does not detract from there being public useNo signs or gates Owner fenced land and left contour for road, no attempt to block roadDoctrine of dedication: need to be record on title.Held: anyone who had reason to go down that road went down it and believed he was entitled to do so, this satisfies provision**Creation of highway is another unregistered interest in the Torrens system. how to record (LTA s. 67)Land Titles ActAcceptance of payments by landlord67 The acceptance of payments by a landlord that the landlord is entitled to receive either as compensation for use and occupation by an overholding tenant or for arrears of rent does not, unless the parties so agree, operate as(a) a waiver of a prior notice to terminate the tenancy, or(b) the creation of a new tenancy on the same terms as the prior tenancy or with modified terms.1991 c18 s49Memorandum is submitted and it is impressed on both dominant and servient utility rights of way (LTA s. 69)Land Titles ActImprovements made on wrong land through error69(1) When a person at any time has made lasting improvements on land under the belief that the land was the person’s own, the person or the person’s assigns(a) are entitled to a lien on the land to the extent of the amount by which the value of the land is enhanced by the improvements, or(b) are entitled to or may be required to retain the land if the Court is of the opinion or requires that this should be done having regard to what is just under all circumstances of the case.(2) The person entitled or required to retain the land shall pay any compensation that the Court may direct.(3) No right to the access and use of light or any other easement, right in gross or profit a prendre shall be acquired by a person by prescription, and no such right is deemed to have ever been so acquired.On registration it can take effect though there is no dominant tenementSubstantive law rules inserted into LTAEasement “in gross” call utility right of way.taxes (s. 61(1)(b); Municipal Government Act s. 553)Land Titles ActImplied conditions61(1)??The land mentioned in any certificate of title granted under this Act is, by implication and without any special mention in the certificate of title, subject to?????????????????????????? (b)??? all unpaid taxes, including irrigation charges and drainage district rates,If you buy property where money is owing, you are subject to that levy City sued X for outstanding utility arears. X said that utility is not a “tax”. ABQB: since this is an exception to indefeasibility, we will read 61(1)(b) very narrowly and not include utility arears within “taxes”In response: Municipal Government Act passed s 553 which states that unpaid municipal public utilities may be added to tax roll. And the amount is “deemed for all purposes to be a tax”.TAKE AWAY: utility fees fit within 61(1)(b) based on Municipal Government Act s 553leases (s. 61(1)(d))Land Titles ActImplied conditions61(1)??The land mentioned in any certificate of title granted under this Act is, by implication and without any special mention in the certificate of title, subject to?????????????????????????? (d)??? any subsisting lease or agreement for a lease for a period not exceeding 3 years, if there is actual occupation of the land under the lease or agreement,First National Investment Co v Oddson, [1919] 3 WWR 591 (Man KB)Facts: Buyer acquired property that had unregistered 5 year lease beginning 1915. Buyers bought property when there was < 3 years remaining on the lease.Issue: Is buyer bound by unregistered lease? Original term or unexpired term? HELD: ORIGINALAnalysis: Tenants argue that the unexpired portion of their lease of a period not exceeding three years when the new certificate of title was issued, so the provision [ALTA equivalent: LTA s 61(a)(d))] applies.Held: leases were total five years, and since unregistered, new certificate is not subject to lease. It is not the remaining unexpired portion of the lease that is relevant when the new certificate is issued, it is the original duration of the lease.This is an exception to indefeasibility so it will be narrowly construed. the relevance of a right of renewalEX: lease for two years with option to renew for another two years? Reasoning 1: lease is only 2 years and option to renew is distinct element, which suggests lease is protected BUT option won’t be because you can’t be in possession of option not yet exercised.Reasoning 2: 4 year commitment – doesn’t fit with act.the possession elementTrotzuk v Silka, [1943] 3 WWR 442 (Sask CA)Facts: Jan 1941-1944: 3 year lease from LL Hunter to tenantMarch 1944-1947: Lease renewed, not registeredPL farmed land, did not live on landFall 1944: PL was only on land to haul away grainDF bought land in March 1, 1945 and started farming itIssue: Is DF, buyer, bound by unregistered lease – was tenant “in actual occupation of the land”Analysis: PL/leasee was not in actual possession of landLeasee may have been in construction occupation, but that falls short of actual occupationImmaterial if LL2 had notice of lease (Baker) – Ziff – true, these cases line ments: Must have possession at time of transfer Must have trappings of presence Issue on facts: how can you expect a leasee farmer to have possession in March in SaskatchewanPurpose of actual occupation is to put purchaser on notice? expropriation (s. 65(1)(e))Land Titles ActImplied conditions61(1)??The land mentioned in any certificate of title granted under this Act is, by implication and without any special mention in the certificate of title, subject to?????????????????????????? (e)??? any right of expropriation that may by statute be vested in any person or corporation or Her Majesty, andAdded for purpose of clarityb/c these rules are in Expropriation Act 3.Overriding Interests Outside of the LTAgenerallyif they are Overriding interest the LTA does not affect themThese are not in the s61 list of the LTAGenerallyFor successful aboriginal claim, they must show that at the time crown sovereignty, was the claimant Band in exclusive occupation of territoryBefore 1982, Aboriginal title could be extinguished by unilateral (otherwise valid) act of the state with plain and clear intention to extinguish title.Does grant of fee simple estate of Blackacre to X, otherwise amenable to aboriginal claim In Australia, this extinguishes pre-existing Aboriginal title.In Canada, unclear. Lis pendensa formal notice of pending legal actionLTA s 148(1)LTARegistration of certificate of lis pendens148(1)??A person claiming an interest in any land, mortgage or encumbrance may, instead of filing a caveat or after filing a caveat, proceed by way of action to enforce the person’s claim and register a certificate of lis pendens in the prescribed form.(2)??A person who has proceeded by way of action to call into question some title or interest in any land may register a certificate of lis pendens in the prescribed form.Aboriginal entitlements prior to Tsilhqot’in NationSkeetchestn Indian Band v BC (Registrar of Land Titles), 200 BCCA 525Facts: Kamlands Holdings owns landRegistrar refused to register a caveat on land as requested by Skeetchestn band for aboriginal right to these landsSkeetchestn argue that the current use of the land as a ranch is compatible with aboriginal title but intensive resort development with hotels, condos, and golf courses would be incompatible TJ upheld registrar’s position, to refuse to place caveatIssue: Does a certificate of title mean you take free your land from aboriginal claims?Is an aboriginal claim in land a claim in an estate or interest in land within the context of the LTA (AB section equivalent s 148)?LTA aside, does fee simple to private citizen on otherwise aboriginal land?Held: LTA (BC) not applicableAnalysis: SOUTHIN JA: Skeetchestn claim aboriginal right to land per DelgamuukwRegistrar argues they are confined by act LTA and don’t have authority to place caveat“The claim of the appellant is upstream of the certificate of indefeasible title. The Registrar’s duties are downstream of the certificate”BC LTA states: “person claiming an estate or interest in land” / AB LTA “A person claiming an interest in in any land, mortgage…”While aboriginal claims can be made for land, those claims are not registerable“Sooner or later, the question of those who hold indefeasible title are subject to claims of aboriginal right must be decided”MACENZIE JA (concurring):Torrens system in LTA does not contemplate aboriginal titleAboriginal title is inalienable except to the Crown, so it lacks the “good safe holdings and marketable title” the foundation of the registration under the LTAKamlands argues that the continuation of aboriginal rights in land alienated by the Crown is an issue of infringementAboriginal title Crown title fee simple Aboriginal title presupposes Crown title, but registrar is only supposed to deal with interests derived from fee simple so it doesn’t include caveats or certificates of pending litigation based on aboriginal title. Cook, Lac La Rong Indian Band Chief v Beckman, [1990] 4 WWR 221 (Sask CA)Facts: Band filed caveat against Candle Lake resort area, claiming possible aboriginal title. Candle Lake resort area on Treaty No 6 land per Transfer Agreement (March 1930), where land was transferred from crown to Provinces. Band of the opinion that land was reserve land or held in trust by feds for the Band.Issue: should caveats be maintained on land until trial?Analysis: IF land was held by feds in trust, then land could not pass to provinceIF land was Indian Reserve it could not be alienated Band argues that indefeasibility provision of LTA does not apply to them, but also argues that b/c of LTA they may maintain the caveatsJudge: can’t have your cake and eat it tooSince Indian title is generally inalienable, it does not have a place in a Torrens systemIndian title is not registerable under LTA so lis pendens system doesn’t apply eitherTorrens system never intended to be and has not been in practice, applied to Crown lands held for IndiansLitigation between gov and Indians, so caveats cannot be placed against private owners (Candle Lake Cabin owners)Held: caveats cannot be maintained. LTA not applicable where claim that land is said to be federal reserve, but lis pendens may be filed on unpatented land.James Smith Indian Band v Saskatchewan (Master of Titles) (1995), 123 DLR (4th) 280 (Sask CA)Facts: Interest for beneficial and real interest in Treaty 6 lands to James Smith Indian Band to hung, fish, trap and gather on Treaty No 6 lands. Registrar declined to place caveats on land b/c they were not interests in land. Issue: was Master of Titles entitled to refuse to register caveats submitted by James Smith Indian Band, who were claiming interest in land. Held: interest in land not disclosed; but the majority held that some aboriginal interests may be amenable to registration under LTA (SK).Analysis: Can’t have cake and eat it tooInterest is in land founded on aboriginal interestsTake AWAY:Aboriginal title claims do not fit within Torrens systemFor constitutional reasons, Aboriginal interests are overriding interests under the system (ziff hopes this is what they are saying)B/c if those claims are outside system, they cannot be expunged by the system.Constitutional Argument: similar to Snider: how can provincial legislation extinguish Aboriginal title by claiming property is now held by BFP. This argument is different b/c we aren’t worrying about inconsistent grant. Land held by BFP without notice of Aboriginal claim. Before 2014 – this is a constitutional road block.the potential impact of Tsilhqot’in Nation v. British ColumbiaJ Bororws, “Aboriginal Title and Private Property” (2015): The SCC in Tsilhqot’in was careful to note that the declaration of Aboriginal titles did not apply to “privately owned … lands”. In fact, title over such lands was no asserted. Canadian sense of entitlement to these types of lands likely prompted a narrow framing of issues. The stakes would have been much narrower framing of issues. The stakes would “An important question of the T decision raises is whether “private” and Aboriginal titles conflict under the SCC’s new framework. Will Aboriginal title oust privately held beneficial interests in land, or will privately owned land prevent declarations of Aboriginal title over such lands.” … ANSWER “It depends”…Canada is undecided on the status of a grant of fee simple on pre-existing aboriginal title claims. Tsilhqot’in – Interjurisdictional immunity doesn’t applyMany interjurisdictional arguments raised“The doctrine of interjurisdictional immunity applies where law enacted by one level of government impair the protected core of jurisdiction possessed by the other level of government. IJI is premised on the idea that since federal and provincial legislative powers under s 91 and 92 of the BNA 1867 are exclusive, each level of government enjoys basic unassailable core of power on which the other level may not intrude.?“I conclude that the doctrine of interjurisdictional immunity should not be applied in cases where lands are held under Aboriginal title.? Rather, the?s. 35?Sparrow?approach should govern.? Provincial laws of general application, including the?Forest Act,?should apply unless they are unreasonable, impose a hardship or deny the title holders their preferred means of exercising their rights, and such restrictions cannot be justified pursuant to the justification framework outlined above.? The result is a balance that preserves the Aboriginal right while permitting effective regulation of forests by the province, as required by?s. 35?of the?Constitution Act, 1982.” Post Tsilhqot’in: LTA might apply to Aboriginal title. If provincial legislation it infringes Aboriginal rights then use Sparrow analysis. TODAY provincial legislation can infringe aboriginal rightsPreliminary question: [107] “Whether a statute of general application such as the?Forest Act?was?intended?to apply to lands subject to Aboriginal title — the question at this point — is always a matter of statutory interpretation.”1) Can we interpret LTA today to effect Aboriginal title without an IGI barrier?2) If LTA affects our interpretation, what happens when private owner in fee simple, acquires certificate of title and is BFP w/o notice FV, do they take free of aboriginal claim?IF LTA subordinates aboriginal title, this CANNOT pass constitutional muster (s 35 BNA).R v Van de Peet: ??subsequent to s 35(1) Aboriginal rights cannot be extinguished and can only be regulated or infringed consisted with the justificatory test laid out by this Court in Sparrow??Marshall/Bernard: “prior to constitutionalization of aboriginal rights in 1982, aboriginal title could be extinguished by clear legislative act . Now that is not possible”.Ziff: operation of LTA w transfer to BFP cannot constitutionally abrogate aboriginal title to private owner. sales post-1982. Pre 1982 transfer, IGI might apply and Tsilhoqot’in only applies post 1982 b/c you need s 35 to balance the removal of IGI.Soldier Settlement Act (SSA)purpose of legislationImmerge in many common wealth countries post WW1Used by government to encourage westward development by giving returning veterans land and with funding to buy farm equipmentGrants made under SSA, not intended to include mineral estatesS 57: deemed reservation of mineralsthe impact of Federal lawRe Director of Soldier Settlements (1960), 31 WWR 647 (Alta SC)Facts:Director of soldier settlement applying to cancel certificate of title for S 9 owned by Nickel with all mines and minerals whether solid, liquid or gaseous other than coal and petroleum, Feb 1920: Canada Soldier Settlement Board RESERVING coal & petrolSept 1940: Soldier SB Weicker (Veteran) RESERVIN coal and petroleum to Calgary & MINES & MINERALS to Soldiers certificate of title issued w/o reservation to SSB, registrar cancelled Soldier’s certificateApril 9, 1945: Weicker Nickel (BFP) sold w/ reservation to CalgaryJune 1948: Nickel Amalie w/ reservations of coal and petroleum to CalgaryJan 1959: Amalie granted gas lease to Mic Mac Oils, who filed caveatIssue: Is LTA, as it protects the registered owner, effective against the right of the director of soldier settlement?Analysis: Amelie is BFPUnder Soldier Settlement Act, director may sell, dispose of, convey etc his landS 51 of SSA is “shall have the same and full effect as grants from the Crow of previously ungranted Crown lands”S 57 SSA: “all mines and minerals shall be and shall be deemed to have been reserved [to SS Board], whether or not the instrument of sale or grant so specified”Amalie relies on LTA provisions that support indefeasibilityAmalie also relies on Turta, stating she is entitled to land included in the certificateHELD: SSA is valid and prevails over LTAConstitutional Argument: SSA is valid federal legislation and cannot be defeated by provincial LTA/ Provinces can’t foreclose federal entitlement.Overriding interest applies: S 51 SSA make the transfer from the director to Weicker to have the same effects as a Crown grant of unpatented land, and brings transfer within the context of s 64 LTA [today s 61(1)(a) of LTA which allows reservation w/o special mention in Crown grants.Amelia’s title to be cancelled as to mines and minerals whether solid, liquid or gaseous except coal and ments: Here SSB wins, in comparison in Turta BFP wins (Turta & Amalie are equivalent b/c both BFP).the NRTACanada (Director of Soldier Settlement) v Snider Estate, [1991] 2 SCR 481Facts: Appellant: director of Soldier Settlement, requesting certificate of Snider to mines and minerals be cancelled.Res: Snider Estate1901: Blackacre transferred by Crown to CPR w/ mines and minerals1912: CPR sold land to Herman Dierck, reserving coal1919: Dierck sold land to SSB, reserving coal to CPR1928: Blackacre transferred from SSB to Lynn, coal plus mortgage (registered)1928: Lynn transferred to Snider, reserving coal1943: south half of Blackacre transferred to Tillie reserving coalSnider and Tillie transferred their surface rights but retained mines and minerals, less coal. Snider and Tillie have paid mines and mineral taxes1979: Director of SSB seeking to claim mines and mineral in Blackacre.Issue: Does BFP win? HELD: BFP, Snider wins.Analysis: Stevensonwere lands federal lands at 1979 (when litigation began) or had been transferred to provincesIf they are federal, then same interjurisdictional immunity as Re Director Property passed by virtue of NRTA to provincial hands so BFP was conferred on Snider and LTA rules.NRTA transferred land from feds provinces, so why is Snider’s property subject?HOLDBACK provision on NRTA: s 13: Mortgage granted is not advance as described by provision. Could not have been advance on mineral estate (b/c it was supposed to be excluded from grants)13 is VOID b/c preconditions of advance did not occurNRTA: s 18: more general – Specialia generalibus derogant – specific overrides the general and s 13 ments: If this case is correct, then grants under SSA are NOT overriding interests. After all, Snider took free of Crown’s unregistered claim to minerals. True that SSB concerns have been significantly minimized by this case. Purchase/Sale of mineral estates under LTA you have high stakes acquisitions. If you saw SSB under any search, you were in for trouble, but this case closes that door.Today, very small chance of SSB claim occurring for any grant after 1930 b/c then it is part of land not transferred in 1930 agreement. Concerns from 1960 case, now dealt with by Snider EXCEPT: for the 61(1) argument from Re Director - which Snider did not address. Snider IGNORES this issue.EX: you do historic search and you see SSB – do you have to worry?They are good citing TurtaThey are vulnerable to 61(1)(a)*Stevenson most important UofA alumni. Others: Tax recovery/Municipal Government Act s 430-431(including dower, railways lands, tax recovery, etc.(Law of Property Act, ss. 59-61; Municipal Government Act, ss. 430-1)LPA s 59-60Law of Property ActMinerals underlying roads59(3)??When the ownership of mines and minerals underlying a road, trail or road allowance diversion is shown as being acquired by the Crown under a plan of survey or return of survey filed before February 16, 1912, as mentioned in subsection (1), and the mines and minerals are not shown as having been expressly purchased by the Crown, the Registrar shall do all things necessary to correct the relevant certificates of title.RSA 1980 cL8 s55Confirmation of corrections60(2)??Subject to subsection (1), all acts done before March 29, 1956 by a Registrar, or by a person acting under the authority of a Registrar, with regard to correcting or reviving certificates of title so as to indicate that the mines and minerals under streets, avenues, roadways, highways, lanes or thoroughfares or other land reserved for public purposes shown on an original, amended or substituted plan of subdivision filed before March 21, 1950, were vested in the owner of the mines or minerals at the date of the filing of the original, amended or substituted plan of subdivision, are hereby made and declared to be lawful and are confirmed as, on and from the time of the performance of those acts, and the Registrar and the person acting under the Registrar’s authority are hereby freed, discharged and indemnified, as well against the Crown as against all persons, from all legal proceedings of any kind in respect of those acts.(3)??Subject to subsection (4), when the ownership of mines and minerals under streets, avenues, roadways, highways, lanes or thoroughfares or other land reserved for public purposes shown on an original, amended or substituted plan of subdivision filed before March 21, 1950 was shown to be vested in the Crown or was cancelled out of the title of the owner at that time of the mines and minerals, the Registrar shall, except when there has been an intervening bona fide purchaser or lessee for value of the mines and minerals, do all things necessary to reinstate or vest the title of those mines and minerals in the owner of them.(4)??Nothing in this section shall be deemed to prejudice, abrogate or affect the title to any mines and minerals referred to in this section of a bona fide purchaser of it for value from the Crown or a person shown on the records of the land titles office at the time of the purchase as being the registered owner of those mines or minerals.RSA 1980 cL8 s56Tax recovery proceedings61???When under any tax recovery proceedings a title to land including any mines and minerals has been cancelled in full and the surface only of the land has been vested in the name of the taxing authority or in a bona fide purchaser for value from the taxing authority, the Registrar is hereby authorized to reinstate the title as to the mines and minerals in the name of the owner at the time the title was cancelled in full.Municipal Government Act s 430-431Municipal Government Act RSAMinerals430???If, as a result of proceedings under this Act or any other Act providing for the forfeiture of land or minerals, or both, for arrears of taxes, minerals are vested in the Minister or in a municipality that later passed or passes to the control of the Minister, the minerals are the property of the Crown and no person has any claim to or interest in them, despite anything in this Act or the Act under which the minerals were forfeited.1994 cM26.1 s430Acquisition of minerals431(1)??In respect of any parcel of land or minerals?????????????????????????????? (a)??? acquired by a municipality before or after March 5, 1948, pursuant to a tax recovery notification or caveat endorsed on the certificate of title by the Registrar, and????????????????????????????? (b)??? subsequently registered in the name of the municipality,the municipality is deemed to have taken or to take title only to those minerals that the municipality was authorized and empowered to assess at the time of the issuance of the certificate of title in the name of the municipality, and any corrections to the records of any Land Titles Office made before March 5, 1948 into effect this purpose are hereby confirmed and validated.(2)??A municipality must not transfer, lease, mortgage or otherwise dispose of or deal in any minerals or any interest in minerals without first obtaining the written consent of the Minister, and any disposition or dealing made without the consent of the Minister has no effect.(3)??Any certificate of title issued in the name of a municipality before or after March 5, 1948 to or including any minerals, other than minerals that the municipality was authorized and empowered to assess at the time of the acquisition, may be corrected under the?Land Titles Act?to limit the certificate of title to the minerals the municipality was authorized and empowered to acquire, and all other necessary corrections may be made under the?Land Titles Act?on other certificates of title.(4)??This section does not affect an interest in minerals acquired by any person from a municipality before March 5, 1948.Tax recovery: if default of taxes, then land can be sold, the taxes paid and any remaining profit from the sale of the land will be returned to the landowner. Hypothetical: X owns Blackacre with minerals. X is in default of taxes, so city acquires estate and mineral estate was included BY MISTAKE. Blackacre is sold from city to Y [BFP]. Mineral estates were included by mistake. Alberta realized they had made mistake and tried to correct mistake.If estate hadn’t been sold to Y, minerals could be returned to original owner b/c city was not BFPIf municipality subsequently sells to BFP…S 431(3) (together with sub (4)) Municipal Government Act discloses an overriding interest:For sale before or after 1948 s (3) allows for the correction to a municipalities’ title For sale after 1948 s (3) together with s (4) allows for all other necessary corrections BFP is not protected and minerals can be returned to rightful owner.(2) should prevent post-1948 sales to BFP from happening b/c you need permission from Ministers for transactionSub (1) validates pre-1948 alterations.?Chapter 8: CaveatsDocuments: Safeway caveat; Certificates of Title from the Imperial Oil v. Conroy case; Land Titles Policy Manual extract (CAV-1)The system of caveats operates as an appendage to Torrens ‘registration’. A caveat confers some of the benefits of registration of title under Torrens, but there are also elements of the rules concerning caveats that resemble a ‘race’ system of deeds registration. In this lesson we examine the basic features of caveats. You should understand the extent to which the recording of a caveat produces the same effect as registration, as well as those instances in which the rights accruing to a caveated claim differ from registered interests.In general, you should be familiar with the cases and statutory provisions relating to creation, registration, and removal of caveats, together with the principles governing priorities.* * *Introductionbasic meaning of the term ‘caveat’Black’s law dictionary: caveat:?A warning or priviso‘recording’ v. ‘registration’Registration (proper): document submitted to registrar and they register it on the certificate of title. If transfer, new certificate of title issued accordingly.Some acts require mortgages to be registeredLeases > 3 years must be registeredNot everything can be registered, no list of what can beRecording/lodging: filing a caveatWhat cannot be registered can be caveated?the Alberta approachWilliam Hurlburt QC: “registration of a caveat does not have anything to do with the existence, validity or ownership of the caveated interest. Caveats have to do with priority only” you caveat an interest for what it’s worth, registration doesn’t validate invalid interestsTom Mapp: “in operation, the caveating system under the Alberta Act is virtually the same as a typical modern North American recording system”.Caveats allow otherwise valid claims to establish priority by being in the system and giving noticeBasic Rules (LTA, s. 130-152)Filing of caveat130???A person claiming to be interested in land for which a certificate of title has been issued or in a mortgage or encumbrance relating to that land, …may cause to be filed with the Registrar a caveat on the person’s behalf in the prescribed form against the registration of any person as transferee or owner of, or any instrument affecting, the estate or interest, unless the certificate of title is expressed to be subject to the claim of the caveator.Requirements of caveat131(1)??Every caveat filed with the Registrar shall state the name and addition of the person by whom or on whose behalf it is filed and, except in the case of a caveat filed by the Registrar as provided, shall in this Act be signed by the caveator or the caveator’s agent and shall state some address or place at which notices and proceedings relating to the caveat or the subjectmatter of the caveat may be served and the nature of the interest claimed and the grounds on which the claim is founded.(2)??Every caveat, except in the case of a caveat filed by the Registrar as provided, shall in this Act be supported by an affidavit?????????????????????????? (a)??? that in the belief of the deponent the person by whom or on whose behalf the caveat is filed has a good and valid claim in respect of the land, mortgage or encumbrance intended to be affected by it, and?????????????????????????? (b)??? that the caveat is not filed for the purpose of delaying or embarrassing the applicant, or owner, or any person claiming through the applicant or owner,and the affidavit may be in the prescribed form.“claiming to be interested in land” really means “having an interest”s 151???“The Registrar may file a caveat on behalf of the Crown, or on behalf of any person who may be under any disability, to prohibit the transfer or dealing with any land belonging or supposed to belong to the Crown or to that person, and also to prohibit the dealing with any land in any case in which it appears to the Registrar that an error has been made in any certificate of title or other instrument, or for the prevention of any fraud or improper dealing.”Doesn’t say prohibit UNLESS subject to caveat. But in procedures the forms do include “subject to the caveat”Form says, “registrar claims interest in land” what interest does the registrar have if they suspect fraud? Strikes Ziff as odd.Section 147 LTA: “Registration by way of caveat … has the same effect as to priority as the registration of any instrument under this Act” Also see s 135, 203.147 tells us that registration gives priority, We DO NOT HAVE notice race, or race-notice RACE SYSTEMthe basic effect of a caveatImperial Oil Ltd v Conroy (1954), 12 WWR (NS) 569Facts: June 1928: Blackacre sold from Conroy to Berthiaum, registered with mines and minerals reserved to Conroy (wrongfully) [equivalent of the reservation to Turta, but here wrongfully motivated (not error by registrar)]Aug 1948: Controy leased the petroleum and natural gas to Imperial Oil. Imperial search and found Conroy’s title free and clear of encumbrancesAug 1948: Imperial Oil registered caveat for leaseJune 1950: Berthiaum discovered reservation, began proceedings for specific performance of trust agreement and WON – Judgement 1951, Conroy’s title cancelledBerhiaum refusing to honour Imperial Oil’s leaseIssue: Is lease valid by virtue of caveat? It is carved out of Conroy’s ill-retained mineral title?Analysis: Does the trial judgement act retroactively, hence invalidating the lease?IO contracted in good faith for valuable consideration, relying on registered where Conroy had good titleNothing in judgement to have the effect of retrospectively vitiating the leaseAssuming fraud, IO was by virtue of LTA acquired better title as lessee to the leasehold estateFirst submission rejectedCaveat filed by IO claimed the leasehold interests is not a “registration of title” within the LTAIn LTA caveat has same effect as to priority as registrationCaveats give notice to worldRegistering lease gives certificate of title to leaseLease lapsed through default of tenderingBerthiaum refused to accept rent payment but it was offered IO did all it could to make rent paymentsHeld: caveat allowed to standComments: Unintuitive consistent with Hurlburt’s statement (above): “Caveats have to do with priority ONLY”. Conroy wasn’t supposed to have minerals but was on title at time of leaseAt time of lease, he had defeasible interest, but it was an interestAt common law, contest: B held prior equity v IO subsequent law (legal lease/profit from Conroy)C wrongly holding mineralsB didn’t have legal title, but right to have deed rectified (equitable doctrine) at law this is a “mere equity” C holding legal title w/ legal lease passed to IOProbably same result assuming IO is BFPSame result under pure “race” deed systemTAKE AWAY: Caveats are ONLY about NOTICE, don’t enshrine validity BUT here transfer wasn’t invalid, it was rectifiable but not void.Farm Credit Canada v Mainline Pulse Inc, 2006 SKCA 7Facts: Mineline had crop processing plant where past grain elevator was located on railway w/ right of way owned by CPR and location leased to grain elevatorJuly 2001: Mainline entered into lease agreement w CPR for landJuly 2001: FCC loaned Mainland 3M for construction of plant, secured by land owned by CPR. NOT REGISTEREDAug 2001: Mainline secured financing from RM with land as security, registered.Sept 12 2001: Mainland agreed to purchase elevator from past owner and purchase land from CPJan 18 2002: Land subdivided and in title of MainlineRM mortgage was registered against Mainline’s fee simple interest Jan 28 (second in time, first to register with no reference to FCC mortgage)April 2002: mortgage registered by FCC (first in time, second to register). Issue: Does RM or FCC have priority? [case failed to discuss leasehold, which was on title and was first before both mortgages]TJ: leasehold gave FCC no enforceable rights against Mainline’s fee simple interest in the mortgage property, reasoning that the transfer of the fee simple title to the land to Mainline by the CPR effectively terminated the lease leaving no interest to which the leasehold mortgage could be attached. leasehold mortgage to be ignored.Both mortgages registered NOT protected by caveatAnalysis: LTA provides that any security granted by Mainline to the RM is subject to the prior security interest of FCCRM was granted mortgage subject to priority of FCCRM’s agreement clearly states it is subject to FCC’s security interestsRM cannot, simply by registering, create an interest greater than that to which it was entitled by its agreement with MainlineThe fee simple mortgage of the respondent has PRIORITY of the free simple mortgage of the RMThe facts in the present case are distinguishable in that the mortgage created in favour of the R.M. in this case was, indeed, a registrable mortgage, and, moreover, it did not, on its face, limit the interest mortgaged to the "equity" of the mortgagor But regardless subordinated. Ziff thinks this is the wrong way to analyze outcome, though this is right answer.Held: FCC wins. First in time wins/Second to regiterb/c it was understood in mortgage agreement that there was a prior mortgage and indeed RM agreed to be second in line and postpone You can agree to subordinate (RM agreed to be subordinate) regardless of who registers firstSt Mary’s Parish Credit Union v TM Ball (cited by Mainline):Zirtz “pledge of title (mortgage by deposit of title)” equitable mortgage to Appellant; not noted on title as all while in this form Zirtz equitable mortgage to Respondent; caveat filed; first charge to be noted on title. “The respondent asked Zirtz to give a charge and mortgage "on his equity in the land" for the sum of $6,000.”Zirtz legal mortgage to Appellant; registered [second charge to be noted on title]Held: appellant (second in time) had priority“the two equitable mortgages which are in competition are not the same. That of the respondent, by its terms, was expressly limited to a charge upon "my equity". It was, therefore, a mortgage of only a limited interest in the land.” In Zirtz the mortgage given second in time was by its terms only a mortgage of whatever the mortgagor had left to secure (remaining equity). In that way, it can been seen by its own terms as being second in time. KEYWORDS” “his equity” in second mortgage documents.Law: When the second mortgage is of a different thing, the order of registration DOES NOT MATTER & caveat only protects interest for what it is worthTwo other ways to argue Mainline and get to the same result. In personam claims Created the interest Darnley & Tenant / Numbered companies – is this Torrens fraud?In both cases, similar facts occurred. Covenanted to respect the interest and subsequent denial of unregistered interest following covenant has been found to be fraud within LTABased on this since RM agreed to take postponed position, then seeking to be 1st mortgagee purported same move?In Numbered companies: purchaser of freehold had agreed to respect unregistered leases so failure to do so was fraud?These are preferable analysis because this looks like first in time doesn’t win. 2. what is amenable to a caveat? (1244034 Alta. Ltd. v. Walton International Group Inc.)Prior to 1966: in land, you could count on specific performance, it was the norm and therefore a purchase agreement gave rise to an equitable interest in land.Semelhago: only if damages are inadequate, then specific performance may be ordered. NO presumption of specific performance. If land is unique, maybe specific performance [stated in obiter]Ziff hates this case, and wrote an article called “Death to Semelhago”Ziff thinks for substantive law policy reasons, that seller who doesn’t close should be forced to transfer property to buyer, specific performance ordered.Alta LTD v Walton International Group Inc, 2007 ABCA 372 - caveat can ONLY protect interest in LANDFacts: Walton purchased Blackacre and sold 151 undivided interests with intention to sell and make profit for inventorsSale to be approved by 60% of investorsRight of first refusal (RFR): investors could exercise within 14 days of offer a right to purchase the land on the same terms/RFR disclosed in caveat [registered]LTD bought parcelPurchase sale agreement from Walton to LTD “under no circumstances shall the purchaser be entitled to register any caveat, instrument or notice of this agreement or any other interest in lands, in any office prior to the closing date”RFR triggeredBailey (investor) exercised rights of RFRWalton notified buyer that transaction could not close b/c of RFRBuyer filed caveat that was discharged by court (Chambers judge)Walton appealed to have caveat re-instatedTJ: no chance SP will be ordered, so might as well remove caveat now. – Majority of ABCA upheld this.Issue: Should caveat placed by purchaser be removed? LTA 143 for “otherwise appears to be a case in which the caveat should be removed”Analysis: BERGER JA & Hunt concurringHELD: purchaser cannot maintain its caveat against the landSCC: to order specific performance for property, the property must be “unique” and damages an adequate remedy Once it has been determined that damages are an adequate remedy there is no “interest in land” capable of protection by caveatSpecific performance is not warranted and so caveat must be dischargedSLATTER JA (dissenting)S 143(1) LTA: if a) the caveator … claims an interests in land ... by virtue of a contract in writing for the sale and purchase of the land … and (B) that there has been no default under the terms of the contract, … then the court may, and, unless it otherwise appears to be a case in which the caveat should be removed, shall REFUSE to order the removal of the caveatAppellant is not in default of purchase agreementSP for unique properties where substitute would not be readily available (Semelhago)Validity of caveat is not dependent on being able to enforce SP at time of registration, doing so would mean the registrar is doing the job of the courts by only registering caveats that allow for specific performanceA caveat need only “claim” an interest in land and its prima facie validity does not depend on demonstrating with certainty that any particular remedy is available in the long runAleander v Gesman: at equity PL could not have enforced SP, but due to caveat they did, supporting that the caveat need NOT depend on the availability of SPCaveat should be maintained if there is a triable issueCaveat should be maintained if it essential in protecting priority (here three caveats have been filed, not fair to discharge one and give the others default priority)Comments: Ziff: majority judgement doesn’t change the law, but others disagree.ALRI Report: “The most likely conclusion from Walton is that a purchaser will acquire an interest in land and will be able to file and maintain a caveat at the time only if they can show that they will, upon performance of their obligations, be entitled to call for specific performance of the contract. Even if SP is likely to be available remedy, the reasoning in Walton if correct, gives rise to a logical problem in saying that this likelihood is in itself enough to confer an interest in land that will support the caveat. The problem is that specific performance is a discretionary remedy that is subject to a number of defences that may or may not apply in a given case: it cannot be said that SP is available until a court has made an order. If the Walton logic were applied, even a purchaser of a parcel of land that has the appropriate unique would not, until SP is decreed, have an interest in land that would support maintaining the caveat.”ZIFF: this is an overstatement. – the sky will not fallALRI: “that a contract for the sale and purchase of land should confer on the purchaser an interest in the land and if the land is subject to a certificate of title, a right to file a caveat protecting that interest. The legislation provided for in [ALRI’s LTA amendment] will restore the law as it existed before Semelhago and will thus confer on the purchaser an interest in land and the right to file a caveat protecting the interest.”drafting a caveatLTA s 131(1)Requirements of caveat131(1)??Every caveat filed with the Registrar shall state the name and addition of the person by whom or on whose behalf it is filed and, except in the case of a caveat filed by the Registrar as provided, shall in this Act be signed by the caveator or the caveator’s agent and shall state some address or place at which notices and proceedings relating to the caveat or the subjectmatter of the caveat may be served and the nature of the interest claimed and the grounds on which the claim is founded.Document that gives rise to the interest in land need not be filed as long as you describe it Sometimes businesses don’t want to disclose their proprietary rights so they file a caveat without a caveat.Issue: must state name and addition. What is an addition?Addition: in law, a title annexed to a man’s name to show his rank, occupation or place of residence (John Doe, Esq; Richard Roe, Gent; Robert Dale, Manson; Thomas Way, of New York). Examples of drafts“A leasehold interest for a period of 10 years, and a right to renew for a further period of 10 years, under a lease dated X”“All the rights contained in the attached lease document” [full lease attached]“An interest in land under an agreement dated X” all you’re claiming is an interest in land and nothing elseSome Views “if the interest claimed is stated with reasonable certainty the caveat has the effect of contemplated by the statute, although in some particular it should not be in strict compliance with the prescribed form: McKillopIf seems that a claim under an agreement in broad terms will protect whatever interests the agreement confers – ALRIThe document creating the interest claimed may be attached to the caveat but the nature of the interest must be ascertainable from the information in the caveat. If the interest cannot be determined sufficiently to establish registration fees, the caveat should be rejected (CAV-I, Land Titles Procedures Manual). Land Titles Procedures Manual has not authority, but it might be correctTariffs of Fees Registration: caveat costs X dollars (section 5). Mortgages cost more to register so what if you caveat a mortgage.the rule in RuptashRuptash v Zawick, [1956] SCR 347Facts: WZ owned 119/332Zawick (respondent) owned 213/332Block needed improvements, Zawick had money for renovationsThey entered into an agreement providing including many things (paying rents, his share of repairs) including Mutual rights of pre-emption. Nov 1951: Zawick filed a caveat specifying as the interest which he claimed his right of pre-emptionWZ claims he sent four letters to Zawick asking if Zawick wanted to carry out his option of pre-emptionJan 1953: WZ transferred 2/3 of his interest to Ruptash and 1/3 to Lumsden. Transfer registered May 1953May 1953: Zawick filed caveat stating that Zwick is in full power to repair building collect rent, for 12 years.Issue: Is the title of the appellants subject to a lien in favour of the respondent of the amount expended by the latter in repairing the building based on Nov 1951 caveat ?Caveat: “I claim a right of first purchase … found in an agreement of X, which agreement provides, inter alia, as follows”.Analysis: Caveats give notice against the landThe agreement gave Zawick many rights, but he only filed a caveat for his right to buy firstBuyers can then only have notice of the terms from the agreement filed in the caveatExpressio unius est exclusio alterius: means express mention of one thing excludes all others.?HELD: caveat protected only Zawick’s right to first purchaseComments: Ziff: seems to think that had there been a claim in SCC for right of first refusal the caveat would have been valid. However, right of first refusal were not considered “an interest in land” until by statute in 1984 was implemented in Alberta. Ziff, surprised SCC didn’t comment on how the first of first refusal was not an interest in land.the Calford qualificationCalford Properties Ltd v Zeller’s (Western) LtdFacts: 1947: agreement to Lease as of January 1 1948-1978 by Royal Exchange Assurance as lessor and Zeller’s (Alta) Ltd as leasee for 30 years w/ clause for option to renew for 10 yearsJan 27, 1948: Zellers ALTA registered caveat for lease “Zellers claims an interest in and to the lands by virtue of a lease in writing…, for a term and on the condition therein set forth and contained therein of.” Feb 1953: Zellers (Alta) assigned interest to Zeller’s (Western) LtdJuly 1955: Zeller’s (Western) registered caveat against leased lands “[Alta] assigns to [Western] the residue unexpired in [the lease]”.Dec 1970: Fee simple estate in leased land transferred to Calford (registered)Calford disputes if the respondent’s right to exercise the option to renewIssue: Do the caveats filed by Zellers protect the interest or right of the lessee under the option for renewal contained in the lease notwithstanding that such option is not mentioned in the said that or do they individually or collectively set out the “nature of the interest claimed” by the caveatorHeld: the caveats set out the nature of the interest claimed to include right to renewalAnalysis: Court cites Zawick and the Expressio unius est exclusion alterius Zellers urges that reference to the term of 30 years does not limit the notice contained in the caveat to that provision of the leaseTJ: Ruptash must be confined to a situation in which that Latin doctrine does clearly apply … The first caveat it falls within the LTA permitting as stipulating the nature of the claim and includes “conditions… contained therein”Caveat is a warningAnyone searching the title should immediately be alerted to the fact that the caveator claims an interest under a lease and is thereby put upon inquiry as to the terms and conditions thereofThe right to renew is related to the “nature of the interest claimed”Caveat stated, “nature of the claim” with reasonable certainty“common knowledge that leases frequently contain provisions entitled the lessee to renewals of the terms totally unrelated to the “nature of the interest claimed””TAKEAWAY: new owners Zellers west rely on previous caveat of interest it acquired.TAKEAWAY2: As assignee and you undertake previous caveats you run the risk of the caveat being challenged and you not being privy to that notice about the caveat being challenged.SAMPLE EXAM QUESTION: Is the term in the agreement covered?Agreement: “For valuable consideration… the lease shall have an option to purchase the within described land by way of a right of first refusal of any bona fide offer to purchase the same, on the following terms and conditions…”CAVET: Interest claimed, “as lessee under a lease Agreement in writing dated X between Lloyd Johnson, Attorney for Millie, as Lessor and Alan Powers as the Lessee, both of Marsden, in the Province of Saskatchewan”.ANALYSIS: No terms of the lease are specified Buyer would have to seek out lease b/c everything within is being claimed A right of entry is not “common knowledge” and not frequently part of lease so perhaps right to renew is not covered to renew Powers v Walter 1981 Sask CA: “In Zeller’s … the option protected a right of renewal and not the conferring of the additional or new right or interest. In the instant case the argument of the appellant, in effect, is that the caveat protects two interests, that of the lease and that of the option. These are completely different rights, and it seems to me that it would be straining the meaning of the words of the section to say that the claim of the caveator as optionee was stated in the caveat. It is apparent from the cases that exact precision of terminology and description is not always required. There is a limit, and a line must be drawn somewhere. In my view, the learned chambers judge reached the proper conclusion here.” HELD: Caveat did not cover option to purchase. other drafting concerns (Holt Renfrew v. Henry Singer; Darnley v. Tennant (Part 3)) Holt Renfrew & Co Ltd v Henry Singer LtdFacts: see Chapter 5. Caveat filed by Holt’s solicitor as agentIssue: When the LTA requires the caveator’s name and interest in land to be described, can the caveator’s agent be listed in lieu?Analysis: McDERMID JAAgent may sign for caveatorHowever, at the beginning of the form it expressly states the name of the caveator must be inserted More than a technicality b/c person searching registrar might actually need to know who hold caveatMOIR JALegislation says, “by whom or on whose behalf” and an agent satisfies thisAddress for service is essentialNature of interest is essentialAgent can be listed CONDITIONAL on agent having interest in land. Agent acting for disclosed principleAgent acting for undisclosed principalAgent acts for a disclosed but unidentified principal (CURRENT CASE)Agent must be able to enforce contract of his own right, if he cannot then he cannot have an interest in the land. Agent had no interest in landPROWSE (dissenting)Caveat requires name of the person claiming that interest in the landSTEVENSON & KERANS JAAgent had no interest, legal or equitableUnder s 131 of LTA “person” cannot be agent but must be principalService cannot be with only address so name of principal is important What if you don’t want to identify who the buyer is?/How do you maintain anonymity?Calford case: Pekarsky/lawyer purchaser, lawyer (Pekarsky’s??) file caveat then assign interest to hennery singer. Does this make mock of Singer Principal – the name eon caveat for years wasn’t name of owner of the lease. S210 says that there may be imperfections – caveat does not have to be perfect.S131: caveat shall state name and addition – per Moir (Holt), absence of addition does not invalidate.Darnley v Tennant, 2006 ABQB 575Facts: See above, chapter 5. Issue: Is caveat valid?Analysis:SLATTER J: - matter of degree of error – does error prevent caveat for error (citing s 210)Does improper commissioning invalidate caveat?Assistant Deputy Registrar affixed her name stamp but neglected to signThis was an oversight, doesn’t invalidateDoes the use of a nickname on the caveat work?Caveat was registered with “Reggie Darnley” but name on title is “Regina Darnley”Does incorrect land description invalidate caveat? Title reserves mines and minerals, caveat does not. Who cares.Realistically no confusion that the caveat is protecting mines and mineralsIs option an “interest in land”yes, a valid conditional contract for sale of land creates an interest in landGeneral notesTechnical deficiencies do not invalidate caveatProcedures manual does not suggest that a deficient instrument is somehow invalidREVIEW S 134 – S 134(2): no caveat may be registered for which no certificate of title has been issued.135 & 147: create parody for priority for registered interestRace is ruleAssuming valid, priority is based on time of registrationAfter Durish case, we know caveat is PURE RACES 136: Referenced in Durish Added in 1982Allows caveat to be transferredS 138: Lapse of caveat & s 141: allows caveat to be discharged & 146: removal of registrar’s caveat138 & 141: Ziff doesn’t know why you need both. Both allow for a proceeding that results in removal of caveat. 138 may be for challenging validity and 141 remove caveat that was valid and is now spent (discharge caveat from expired lease). CAV-2 does not clarify. Likely cut & paste error.S 143 – Walton case no breach of agreement148 & 149: Allow for filing of lis pendends 149: lis pendrs EX: in matrimonial property act there is differed equal sharing – on divorce presumption of 50-50 split, so you apply for divorce then file for “pending litigation” b/c you don’t have interest in land but you’re suing to get one.149: if you file lis pendents w/o grounds you can be liable for damages * clouding title unnecessarily144: liable for damages if you file caveat without reasonable basis (if it prevents sale)CAV-1no force of lawLicenceConventional view: licence is not an interest in land.In case law, sometimes licences have been protected by trusts where it would be uncautionable not to and where proprietary estoppel would warrant. (Rare, but possible)What if SCC holds that licence is interest in land.1995: aboriginal rights claims Registrar is entitled to make call about whether interest is interest in land. (James Smith) Ziff overreach to allow registrar can make the call. S 96 – to decide what is and isn’t an interest in land is a judicial function. Ziff: law should be that the caveat system contains few filters – almost everyone can caveat if you satisfy formal requirements. It may or may not be valid. That filtering happens when if you have no basis you can liable and caveat can be challenged and removed. If caveat is technically valid, registrar must accept.Solicitor’s lien4. Some Priority Issues the Durish case (Durish v. White; Hurlburt) Durish v White, [1995] 1 SCR 633Carlson only had equitable title. In AB there is a practice to treat an agreement for sale as a “form of security agreement” so VOLD would pay purchase price in installments and until the last installment was paid, the legal title would not be transferred [akin to a common law mortgage]. This explains the enduring caveat on the agreement for sale. At time of Pawnee – the executors are constructive trustees so whyyy did they grant mineral lase??? So At 11/71 VOLD has a superior interest to the Pawnee lease.Subsequently, separate titles are created b/c they have across the board they make surface and mineral rights under separate certificates of title (started in 1972)ADD TO MAP – VOLD SOLD SURFACE TO HUGHES (SURFACE IRRELEVANT)All claims are conflicting – they all belong to the same mineral grants Haida defends caveatWHY doesn’t VOLD defend his caveat, who holds freehold? VOLD is still interested in property b/c he grants mineral lease to White (after his caveat is whipped)Caveat is just a notice of right, and the right itself DOES NOT DISAPEEAR with the caveat – the right survives the discharge of the caveat. SO VOLD’s interest just becomes unprotectedVOLD is effectively landlord in equity and so DURISH tries to buy freehold from VOLD to acquire royalties as landlord. “Reversionary rights”Durish then buys HAIDA lease – LL and maybe tenant1985 – HAIDA assigns caveat to DURISHX FREEHOLD – SURFACE – sold, not relevant FREEHOLD – MINERALSLEASEHOLD – MINERALS (real interest is a profit a prendre)BRASCAN – removed caveat – assume different facts where Haida was trying to get priority based on Brascan’s caveat Article:(Vold caveated for agreement for sale)a) Haida first in timeb) White caveat (from VOLD acquired mineral lease)c) Durish (interest acquired from Haida)Who has priority vis a vie mineral leases (we know Durish owns freehold and that is separate issue)?First argument “at no time did Durish deal with the registered owner of the lands at the time he acquired his interests … s (today 203) only applies to registered owner and BFP”Meaning: since DURISH had notice of the (then uncaveated) Vold interest, that Durish took subject to it!! (constructive or actual notice of VOLD interest though it was not caveated)This shouldn’t matter in Torrens where only notice is notice on registrar and even is DURISH did know of VOLD interest, it was notice outside the register. TJ: applying IKEA, if you look at how s (today 203) is worded it only applies to someone is dealing with registered owner. DURISH dealt with caveat holder, not registered owner so s 203 doesn’t apply.Prior to this case, everyone read 203 to mean that “registered owner” meant anyone.CA said, TJ you’re wrong. 203 means everyone. Law reform institute recommended change. Today 203 reads “including owners of caveats. Interests etc. … “Argument #1 failed, Durish is not bound by constructive or other notice ARGUMENT #2 White caveat was in place when Durish bought Haida’s leaseTrue. (CA ruled this way)Rejected by SCC; “backwards leapfrog”Durish had its own caveat but also wants to rely on Zellers’s caseRELIED ON FIRST CAVEATDurish can rely on white to get priority over white135.1 (today 136) added to allow caveat to be explicitly assigned. If you rely on earlier caveat, you risk not getting notice of challenge to caveat – so then you do get notice of challenge. ARGUMENT #3: Lapse of Vold caveat did not affect priorityWhite wanted to rely on Vold’s place in line b/c if it could backwards leapfrog it would have (VOLD) interestWhen White acquired interest it was second to VOLDHaida’s interest, when created was “burdened “ by the Vold caveat, which was then still place; Durish acquired the Haida caveat, “burden” and allREJECTEDIn obiter: “Vold himself could not have regained priority by re-caveating his interest” – SIGNIFICANTPoint: priorities were effected by lapse there is no BFP issue hereIF after lapse of caveat ,Vold had filed new, it wouldn’t had made difference, though no BFP intervened. LAPSE of caveat means that interest IS SUBORDINATE TO OTHER INCUMBERANCES. WHY?? – why do you lose b/c of lapse? Hypo: B owns Blackacre, having purchased from A; registered: C has a mortgage, granted when A was the owner caveated. D has a lease; caveated. C’s caveat lapses. PRIORITY OF C IS LOST OVER DC’s claim against B is not otherwise affectedPRACTICE QUESTION1) Identify the relevant interests1st mortgageBB mortgageCastle MortgageDonald writ of enforcement(AA has remainder interest)2) Discuss relevant interests1st mortgage not relevant – stands registered.Registration vs caveat – 135/147 – caveat upholds pecking ordered if caveat is validCaveat doesn’t validate mortgage but registration does Is BB charge valid?UNSIGNED issue: you don’t even have to put agreement, so not an issue that it’s tacked on an unsigned. Caveat challenged under 138: Durish – lapsed caveat so BB out.DD has writ of enforcement and caveat is gone. Mortgage underlying caveat is not gone. The interest survives. (Martins)Writ can only be attached to interest held by ARMSTRONG. So if Basin caveat never existed, then result would still be the samePriority not lost to BB.Castle mortgage registered after BB. Under Durish – CC moves up before. Does B mortgage lose priority to C based on Durish. However, in Farmland Credit v Mainland it said that if you took mortgage with the understanding of an existing mortgage, then you can’t take priority by way of invalidating the caveat. In Farm credit, it was a “subordinate interests”. Here on facts, either way is debatable.BB mortgage is mortgage of “his equity” – Zurtz decision (St Mary’s Parish Credit Union v TM Ball)ANSWER: nothing changes, C might move up depending on whether case is distinguished from mainland.Certificates of Title Conroy CaseNo exception on Certificate for mines and minerals. So if mines and minerals were held they were part of Conroy’s title.Registrar poking around – “ok re M&M 1943 JS”.No obvious problem on face.Ziff, surprised things were ok b/c in bottom left it says there were transactions to “SSB” – if they got a mineral estate from SSB maybe they shouldn’t have. It may have been mortgage not grant but unclear.Certificate cancelled in full re: mines & minerals in 1951 in favour of AnnieAnnie’s certificate: “except mines & minerals originally” but crossed out due to Judge Order. Imperial Oil’s Lease (originally on Fred), then they put stamp on Annie’s and write on lease in favour of Imperial Oil.Chapter 9: The Assurance Fund and Related MattersGeneral Description and Objectives:The main purpose of this lesson is to introduce the basic features of the final basal element of the Torrens system – the net principle. As with our discussion of ‘curtains’, ‘mirrors’, the bulk of the analysis will centre on limitations and qualifications on the application of this principle.Resort to the assurance fund is not the only remedy available to a party suffering a loss in a real estate transaction. The other available remedies will also be set out and placed within the context of the assurance fund remedy. Included in this analysis will be a consideration of limitation periods, as these apply both to the LTA and in relation to other remedies. * * *1. The Assurance Fund (ss. 164-182, 183)the basic entitlement in s. 168LTA s 168LTAActions against Registrar168???Any person?????????????????????????? (a)??? who sustains loss or damage through an omission, mistake or misfeasance of the Registrar or an official in the Registrar’s office in the execution of the Registrar’s or official’s duties, or?????????????????????????? (b)??? who is deprived of any land or encumbrance or of an estate or interest in any land or encumbrance????????????????????????????????? (i)??? through the bringing of it under this Act,??????????????????????????????? (ii)??? by the registration of another person as owner of the land or encumbrance, or?????????????????????????????? (iii)??? by an error, omission or misdescription in a certificate of title,??????????????????????????????????? and who by this Act is barred from bringing an action for the recovery of the land or encumbrance or interest in the land or encumbrance,may bring an action against the Registrar for the recovery of damages.Generally, the claimant must have lost the mud, and that loss must have been caused by the systemAs to the two causal element, see Barty v KerrLarge fund, when it reaches its cap, money is transferred to general provincial revenueTarrif Fee Regulation section 1(2) states that 10% of fees collected through transactions goes into the assurance fundHow much actually gets paid out?In 2017 they paid ~25K… not very much loss arising out of the LTA (Barty v. Kerr; McWhorter)Barty v Kerr (1975), 8 Alta LR (2d) 275 (Dist Ct)Facts: Barty induced by fraud of Kerr to execute transfer of farm land (Blackacre). Transfer was registered. Kerr sold land to BFP for value to Kelsch (and are therefore protected under s 167 LTA, today 170/183). Kelsch sold land back to Barty (at cost) b/c they felt bad. The plaintiff testified that Kerr deceived her by his assurances that her execution of the document was a mere formality for the purpose of raising money and that the document would be placed in trust to protect the land. Moreover, she was told by Kerr that if she refused to sign the transfer she would lose the money she had already invested in the salvage operation. Note: Kerr was liable for his fraud, but whether he could pay if you sewed him is unlikely.Issue: Is insurance fund responsible. HELD: NOAnalysis: Non est factum: written agreement invalid b/c PL was mistaken about its contentsBarty claiming damages accordingly under s 168Law: if the character of a document is misrepresent to a person/person is materially mislead about document contents … transaction will be void ab initio (from the beginning)To recover from registrar under non est factum must be a common law cause of action against purchaserThe function of the assurance fund under the Torrens system of land titles is to compensate for loss suffered by those persons whose common law remedies to recover land of which they have been deprived wrongfully or by a mistake of the registrar have been extinguished by the operation of the statute affording protection to bona fide purchasers for value by securing their titles.Statute gives compensation when common law right to action is extinguished by statuteElements of non est factum cannot be met b/c women is literate, had experience dealing with estates before, document was clearly marked and not difficult to comprehend. In big letters across the top, it was written “Land Transfer” Barty was not diligent Fraud occurred but she signed transfer freely and voluntarilyWas affidavit invalid?Affidavit is to verify and authenticate the signatureAffidavit valid on its faceS 168 dealing w omissions or mistake contemplate an omission or mistake which goes to the root or substance of the transaction and of the instrument itself and its registration NOT to an oversight in observing correctness in the formality of proving execution Comments: At common law, if you made out non est factum, then you have void transfer and fraudster has nothing that he can pass, not even to a BFP. At common law she would have not lost anything. In Torrens system, BFP is protected. Assume case is right: Does this mean that one cannot recover for the loss of an equitable entitlement?NOThese are always vulnerable to a BFP of the legal estateImagine, for instance, that a caveat protecting an equitable mortgage has been fraudulently discharged, and the land then sold: the BFP has no notice of wrongdoing so at common law you lost your mortgage. Ziff doesn’t think this argument would be made b/c there is no caveat at common law. With caveat, we are outside the paradigm of common-law. To say you’re worse off at common law does not compute. Ziff believes you would be able to recover.What if BFPs would not have been BFPs under equity?BFP at equity vs BFP under statute? Under Torrens BFPs knowledge of unregistered interest is not fraud, and if you acquire property from a rogue and you have no knowledge they are rogue but you are not a BFP if you have constructive knowledge in equity.2. no claim to the mud (ss. 168, 183)some limitss 171/172: you must try to sue the guilty party, then only after that judgement is registered against the registrar. 174: you have to give 3 months notice, so limitation period is really 5 years and 9 months (not 6 years)the first claim against the rogueapplicabilitythe action requiredthe subrogationthe monetary limitsgenerallymines and mineralsS 179: monetary limits for mines and minerals. Arose due to concern about Turta. Limit of $25,000 for each hectare of each mines and minerals. Very puzzling way to state limitations. Hectares is very 2D but mines and minerals is more 3D. You cannot make claim unless at time of registration you have a mineral certificate Registrar must determine if there is valid title to minerals, then issues mineral certificate. In tarrifs: issuance of mineral certificate is only $5 – BUT that doesn’t seem like enough b/c they must search title way back to confirm mineral certificate is correct, and if that certificate gives you mineral insurance then people are probably willing to pay A LOT for this certificate.4. Limitation Periodsrecovery of landa return to adverse possessionthe effect of running out the timequieting title (LTA, s. 74)correctionsgenerally (LTA, ss. 187, 190)the assurance fund (LTA, s. 178, Hill; McWorter)McWorther v Registrar North Alta Land Registration District (1989), 67 Alta LR (2d) 71 (CA)Facts: Land taken under Tax Recovery Act. Only surface should be taken, but Registrar made a mistake and the new title contained mines and minerals in favour of Municipal District. Municipal District sold lands to Krautt without any mineral reservation. 1946: attempted to correct this error and removed all the mines and minerals from Krautt’s title and issued titled in favour of Meyers. 1973: Registrar released their corrections were mistake and filed caveat against Meyers giving notice of mistake. 1978: Krautt sued for declaration that he was the owner1981: Krautt lawfully acquired minerals b/c he relied on existing certificate of title*Notes: Truly, Meyer’s minerals and Krautt is BFP.Analysis: Beyond dispute, Registrar’s error meant Meyers was deprived of minerals. Limitation period over, error was almost 50 years ago Comments: Municipal Act s 431(1): municipality is deemed to have taken to have taken only to those minerals that the municipality was authorized. … ANY correction to the records of ANY LTO made before 1948 are confirmed and validated . correction made in 1946 to give title back to Meyers. 431(1) state that corrections are confirmed and validated.So how could Kraut win?? Why didn’t we rely on 431(1)? b/c 431(4) states that none of this applies to MINERAL before 1948.LTA 168 creates a 6 year limitation period from time of deprivation.When did deprivation occur?Meyers stating they were on title until 1981Meyers were actually deprived in 1943 when Krautt purchased land b/c at this point mistake could not be corrected. For 168 you must be barred from action … this is magic moment and until 1944 Meyers could have applied to have registrar corrected.Judge: Meyers should have realized the wrong correction in 1946, had it corrected and sued the assurance fund… Ziff: really, who does this? REVIEW QUESTION: 46-81 title was in Meyers’ name. During this time, Meyers’ was enjoying “fruits of mines and minerals”… Whether they did or did not exploit mineral estate does not matter. … CLAIM FOR ADVERSE POSSESSION?? MaybeUnder colour of title, they believe they are the owners and that gives the squatter enhanced position Duncan v Joslin: hypothetically it is possible to have adverse possession of minerals“Whether there can be a prescriptive title to a fugacious mineral such as petroleum and natural gas and related hydrocarbons without the substances themselves being brought into possession in the sense that they are and have been under the physical control of the claimants, is a question that need not now be dealt with. It is sufficient to say that the acts relied on by the appellants as supporting their claim to adverse possession fall far short of the kind of possession which the Limitation of Actions Act contemplates in that there has been no physical or legal possession or occupation at all, much less one that is exclusive, continuous, open and notorious.”Hill v South Alta Land Registration District (1993), 8 Alta LR (3d) 379 (CA)Facts: March, 1977 Mrs. Hill is registered owner of the matrimonial home.May 9, 1977 - Mr. Hill registers a forged transfer of the land to another man, without Mrs. Hill’s knowledge or consent. The same day, Paramount agrees to give that “transferee” a new larger mortgage.May 16, 1977 - A new mortgage by that “transferee” to Paramount for $56,000 is registered against title, without Mrs. Hill’s knowledge or consent.May 18, 1977 - Mr. Hill secures another transfer from the previous “transferee” back into Mrs. Hill’s name, again without her knowledge or consent. August, 1977 - Transfer back into Mrs. Hill’s name is registered, still without her knowledge or consent. December 29, 1977 - When discussing a possible separation, Mr. Hill tells Mrs. Hill that she will “have a hell of a time with the mortgage”. She quotes in reply the name and details of the old mortgage, but he ripostes “Try Paramount”. November, 1981 - Mrs. Hill finds some correspondence about the new mortgage which Mr. Hill had hidden, thus learning what lawyer had apparently acted in putting on a new mortgage. Mrs. Hill immediately complains to the Law Society that that lawyer has been part of a conspiracy to put on her house a mortgage which should not be there.APRIL 26 1982 – 6 YEARS BEFORE ACTION COMMENCEDSeptember 2, 1982 - The new mortgagee sues to foreclose on the new mortgage, on which no payments have been made. December 22, 1982 - Mrs. Hill counterclaims against the new mortgagee and the individuals involved in the new mortgage, alleging that the mortgage is a forgery and nullity. June 3, 1987 - The Court of Queen’s Bench rejects tenders, vests title in the mortgagee, and orders Mrs. Hill to vacate the home within 30 days. April 26, 1988 - Mrs. Hill starts the present lawsuit against the Registrar to claim compensation from the Assurance Fund.TJ: deprivation was at time of foreclosureCA: deprivation was on the indefeasible registration of the mortgage Issue: when does the 6 year limitation period in the LTA run? / Is Mrs Hill to late in claiming Loss was when mortgage was put on titleDepravation occurred before limitations period.Discoverability: Does the 6 year period only run when there is deprivation or when it was discovered or discoverable?Using discoverability standard, the 6 year period would not have run…. Wrong could not and would not have been discoveredCA: unresolved. Statute doesn’t invite discoverability doctrine or contemplate its possibility.Unresolved b/c even with discoverability, discoverability happened before the limitations periodMany things put her on enough notice: EX: Mr. Hill said “good luck with mortgage”Being in touch with law society Ziff’s concern: you are not entitled to seek money from assurance fund UNLESS you are barred from bringing an action for recovery of land. Mrs. Hill didn’t know she wasn’t going to get the land back until the CA ruled against her. She was trying to get the land back and accusing Paramount of fraudulent conspiracy, but they ruled against her b/c of the mortgage being indefeasible. It seems like you have limitation period falling on another legal action. Hill hoping to take free and clear of mortgage. Hill could have appealed to SCC, do you have to wait until appeals are all exhausted? Maybe, might not be a good rule because then only then do you know you don’t have a shot at the land.Ziff: per case “in no sense was the litigation an assertion of rights against the fund, nor was it a condition precedent to suing the fund” Ziff: IDK! Assume you’re the register’s office. Mrs Hill brings law suit to set aside deal and sues assurance fund, registrar says Mrs Hill is suing prematurely b/c unless she loses land you don’t know you’ve been deprived of the land. Maybe the court could handle this situation by allowing you to file claim against registrar and stay claim pending other litigation (doesn’t really make sense, you can sue though your claim hasn’t crystalized).Chapter 10: Title InsuranceDocument: Sample Title Insurance PolicyApproximate Time Allocation: 1 classDescriptions and Objectives:In this unit we will consider the use of title insurance, a relative newcomer to the Canadian scene, and the interplay between title insurance and land registration.* * *1. IntroductionUS mostly has registration systems, which don’t work very wellLSUC saw insurance and title policy as a threat – why do a title search when you can just buy insurance and hope for the best.Each Title Insurance policy must be accompanied by certificate from solicitor to protect themselves.2. Title Insurance (Ziff)origins and naturein its traditional form: for purchaser or mortgagee and it is BACKWARD looking. It protects against defects (much like Torrens). Policies have been adjusted to meet market circumstances. recent developments in Canadacurrent title insurance advertisements promise lawyers that they will be “stronger together” and that “not to worry, it will keep business in your office”. Advertising that lawyer’s do not have to worry about title insurance will not strip lawyers of their jobstitle insurance and Torrens: is there a useful mix?Gold Policy:Structure of First Canadian:Covered risks, exclusions, conditions, schedules/endorsements, commitment to insureCovered RISK [know these for exam]: AFTER the olive date, forgery of an instrument by which someone else claims to own an interest in or have lien on your title (after policy protection)AFTER policy: for someone who builds a structure that encroaches on your landEXCLUSIONS: 4) title risks b) that are known to you but are not known to us on the Policy date d) that first affect your Title and the Policy Date that does not limit the coverage in Issue x…Title Plus structure: was started by LSUC b/c they decided, if you can’t beat them, join them so they created their own insurance company. It operates as a stand-alone company today. LSUC had to change the rules of professional conduct to prevent lawyers from encouraging title insurance and referring to Title Plus NOT COVEED: Reservations, limitations, provisos and conditions expressed in the original crown patent, inpatient mining claims and Indian Land Claims… many of these are overriding interests so Torrens doesn’t cover you eitherAny unregistered easements or rights of way which affect the land. This exception does not limit the coverage.Any facts, rights, interests, SEE SLIDESWhy would someone in a Torrens want Title Insurance given that the purchaser takes FREE from prior defects (subject to exceptions)Assurance fund is time consuming, Title insurance is easier. They don’t pay out much. Their claim ratio is low in compared to other claimsFaster, more convenientIf you acquire property but curtain hasn’t’ fallen you’re not protected by Torrens but you by are by title insuranceTorrens has many overriding interests, so then you need title insurance Lender requires it. Gold. 16: “you are forced to remove or remedy you existing structure ...”. 17: “After Policy Date, someone else builds a structure other than a boundary” —> THESE ARE OFF TITLE RISKS. Torrens doesn’t protect you from these. Torrens doesn’t protect you against whether the fences are where they are supposed to be. You can have a perfect description on title, only to discover the fences are wrong. This is dealt with by arranging the deal. Before Title Insurance you would get a REAL Property REPORT to make sure there isn’t encroachment (done by surveyor). Title insurance does this. STANDARD HOME BUYER AGREEMENT: 10 days before completion sell provides buyer a real property report reflecting state of property with evidence of municipal compliance. Buyer and seller may agree to obtain a Title Policy to replace or supplement real title report… Let’s not get a survey done. If there’s a problem, we’ll have it covered through title insurance.This is important use for purchasers and mortgages. Mortgagees lend on security of the property but if there is a problem and it can be solved by money then they’re happy to acquire title insurance that can cover this. In parts of Rural AB with large properties, ordering a survey can be expensive. Deal may be struck to say there was a survey done 5 years ago, lets buy title insurance instead of paying for a survey. Final ThoughtsOntario established Title Insurance firm to compete with American Title insurance companies.In Western Canada they tried to stem the tie.Western Canadian Conveyancing Protocol. Concept: better mouse trap than title insuranceWhen you have protocol closing, when documents are submitted to LTO they are given a number and can only be processed slowly so there is usually a gap between submission and registration. Possible that a documents will get punted before COT is issued. Lawyers had to be careful of this and banks were hesitant to advance money until mortgage was registeredIn Western Canada you can adopt for a closing the Western Canadian Conveyancing Protocol and the lawyer’s insurance occurs DURING THE GAP (2-3 gap). Or… buy title insurance. For mortgage companies, the love this. All they care about is money.Market for title insurance to protect from overriding interests, unless Schedule B prevents, mode of recovery that is superior, slight risks for which money can be paid to make them go away (gap insurance), and off title risk. ................
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