CHAPTER 5 – COMMON LAW ESTATES - lsacans.s3.ca-central …



PROPERTY LAW – FINAL CAN TOC \o "1-4" \h \z \u CHAPTER 5 – COMMON LAW ESTATES PAGEREF _Toc5528725 \h 3Introduction PAGEREF _Toc5528726 \h 3The Estate in Fee Simple PAGEREF _Toc5528727 \h 5Thomas v Murphy (1990) NBQB PAGEREF _Toc5528728 \h 5The Life Estate PAGEREF _Toc5528729 \h 5Re Walker (1925) ONCA PAGEREF _Toc5528730 \h 6Re Taylor (1982) SK PAGEREF _Toc5528731 \h 6Christensen v Martini Estate PAGEREF _Toc5528732 \h 7Doctrine of Waste PAGEREF _Toc5528733 \h 7Dower Rights PAGEREF _Toc5528734 \h 8Dower Act PAGEREF _Toc5528735 \h 8The Fee Tail PAGEREF _Toc5528736 \h 9ABORIGINAL TITLE PAGEREF _Toc5528737 \h 10Delgamuukw v British Columbia PAGEREF _Toc5528738 \h 11Tsilhqot’in Nation v British Columbia PAGEREF _Toc5528739 \h 13Indian Act PAGEREF _Toc5528740 \h 15First Nations Land Management Act PAGEREF _Toc5528741 \h 16CHAPTER 6 – THE ORIGINS AND NATURE OF EQUITABLE INTERESTS PAGEREF _Toc5528742 \h 17Origins of Equity – P Butt, Land Law PAGEREF _Toc5528743 \h 17The Statute of Uses PAGEREF _Toc5528744 \h 18Trusts PAGEREF _Toc5528745 \h 19Resulting Trusts PAGEREF _Toc5528746 \h 19Pecore v Pecore, 2007 SCC PAGEREF _Toc5528747 \h 20Constructive Trusts PAGEREF _Toc5528748 \h 21Remedial Constructive Trusts PAGEREF _Toc5528749 \h 21Kerr v Baranov; Vanasse v Seguin PAGEREF _Toc5528750 \h 21Institutional Constructive Trusts PAGEREF _Toc5528751 \h 23Soulos v Korkontzilas PAGEREF _Toc5528752 \h 23Constructive Trust and Specific Performance PAGEREF _Toc5528753 \h 24Bulun Bulun v R&T Textiles PAGEREF _Toc5528754 \h 25CHAPTER 7 – QUALIFIED TRANSFERS AND FUTURE INTERESTS PAGEREF _Toc5528755 \h 26Remainder vs Reversion PAGEREF _Toc5528756 \h 26Stuartburn (Municipality) v Kiansky PAGEREF _Toc5528757 \h 26McKeen Estate v McKeen Estate PAGEREF _Toc5528758 \h 27Vested Interests vs Contingent Interests PAGEREF _Toc5528759 \h 28Defeasible vs Determinable Interests PAGEREF _Toc5528760 \h 28Caroline (Village) v Roper PAGEREF _Toc5528761 \h 29Right of Re-Entry PAGEREF _Toc5528762 \h 29Possibility of Reverter PAGEREF _Toc5528763 \h 29State Limitations of Private Owner PAGEREF _Toc5528764 \h 30Unger v Gossen PAGEREF _Toc5528765 \h 31Grounds of Invalidity PAGEREF _Toc5528766 \h 31Effects of Invalidity PAGEREF _Toc5528767 \h 31Public Policy as a Ground for Declaring Stipulations Invalid PAGEREF _Toc5528768 \h 31Re Leonard Foundation Trust PAGEREF _Toc5528769 \h 31Uncertainty PAGEREF _Toc5528770 \h 32HJ Hayes Co v Meade PAGEREF _Toc5528771 \h 32Fennell v Fennell PAGEREF _Toc5528772 \h 33Restraints on Alienation PAGEREF _Toc5528773 \h 33Trinity College School v Lyons PAGEREF _Toc5528774 \h 34Legal Remainder Rules PAGEREF _Toc5528775 \h 34Ontario Law Reform Commission, Report on Basic Principles of Land Law PAGEREF _Toc5528776 \h 34Application of the Legal Remainder Rules PAGEREF _Toc5528777 \h 35Re Crow PAGEREF _Toc5528778 \h 36THE RULE AGAINST PERPETUITIES PAGEREF _Toc5528779 \h 36Five Steps to Perpetuity Success PAGEREF _Toc5528780 \h 38Alberta Perpetuities Act PAGEREF _Toc5528781 \h 39ALRI Report: Abolition of Perpetuities Law PAGEREF _Toc5528782 \h 40Scurry Rainbow Oil v Taylor PAGEREF _Toc5528783 \h 40CHAPTER 8 – LEASES, LICENSES AND BAILMENTS PAGEREF _Toc5528784 \h 41Leases PAGEREF _Toc5528785 \h 41Licenses PAGEREF _Toc5528786 \h 41Fatac v Commissioner of Inland Revenue PAGEREF _Toc5528787 \h 42Metro-Matic Services v Hulmann PAGEREF _Toc5528788 \h 42The Nature of the Landlord’s and Tenants Interests PAGEREF _Toc5528789 \h 43Merger Restaurants v DME Foods PAGEREF _Toc5528790 \h 43Sundance Investment Corp v Richfield Properties PAGEREF _Toc5528791 \h 44Obligations of Landlords and Tenants PAGEREF _Toc5528792 \h 44Southwark LBC v Tanner PAGEREF _Toc5528793 \h 44Derogation from the Grant PAGEREF _Toc5528794 \h 45Petra Investments Ltd v Jeffrey Rogers PAGEREF _Toc5528795 \h 45Residential Tenancies and Licenses PAGEREF _Toc5528796 \h 46Residential Tenancies Act PAGEREF _Toc5528797 \h 46Bailment PAGEREF _Toc5528798 \h 47Mercer v Craven Grain Storage PAGEREF _Toc5528799 \h 47Crawford v Kingston PAGEREF _Toc5528800 \h 47Letourneau v Otto Mobiles Edmonton PAGEREF _Toc5528801 \h 48Miller v Sinclair PAGEREF _Toc5528802 \h 48Punch v Savoy’s Jewellers Ltd PAGEREF _Toc5528803 \h 49What is Bailment? PAGEREF _Toc5528804 \h 50CHAPTER 9 – SHARED OWNERSHIP PAGEREF _Toc5528805 \h 50Joint Tenancy and Tenancy in Common PAGEREF _Toc5528806 \h 50Re Bancroft Estate PAGEREF _Toc5528807 \h 51Severance PAGEREF _Toc5528808 \h 51Sorensen Estate v Sorensen PAGEREF _Toc5528809 \h 51Resolving Concurrent Ownership Disputes PAGEREF _Toc5528810 \h 52Law of Property Act PAGEREF _Toc5528811 \h 52Value Choices Behind Right to Terminate PAGEREF _Toc5528812 \h 53Shared Ownership of Personalty PAGEREF _Toc5528813 \h 53Frosch v Dadd PAGEREF _Toc5528814 \h 53Matrimonial Property Act PAGEREF _Toc5528815 \h 54Principles of Property Law PAGEREF _Toc5528816 \h 55Condominiums PAGEREF _Toc5528817 \h 55Metropolitan Toronto Condominium Corporation v Korolekh PAGEREF _Toc5528818 \h 56CHAPTER 10 - SERVITUDES PAGEREF _Toc5528819 \h 56Easements PAGEREF _Toc5528820 \h 56Nelson v 1153696 Alberta Ltd, 2011 ABCA PAGEREF _Toc5528821 \h 57Profit a Prendre and Access Rights PAGEREF _Toc5528822 \h 58R v Tener, [1985] 1 SCR 533 PAGEREF _Toc5528823 \h 58Bank of Montreal v Dynex Petroleum, [2002] 1 SCR 146 PAGEREF _Toc5528824 \h 59Access to Public and Private Property PAGEREF _Toc5528825 \h 59Sky City Auckland v Wu (NZ) PAGEREF _Toc5528826 \h 60Covenants PAGEREF _Toc5528827 \h 60Tulk v Moxhay PAGEREF _Toc5528828 \h 60Berry v Indian Park Association (1999, ONCA) PAGEREF _Toc5528829 \h 61Positive Covenants PAGEREF _Toc5528830 \h 62Amberwood Investments Ltd v Durham Condominium Corp, 2002 ONCA PAGEREF _Toc5528831 \h 62Invalidity and Termination PAGEREF _Toc5528832 \h 63CHAPTER 5 – COMMON LAW ESTATESDoctrine of EstatesDoctrine of estates determines the length of time that one holds the landDetermines the nature of the rights of holding the land Each of these slices of time are an Estate estates in the land is a time in the land or land for timeCrown owns all land and merely gives people to hold or use land from a doctrine of tenure own not real property itself but instead the right to hold the land Technically only applies to interest in land (real property) but court may recognize life interests in chattels in a will, the courts are open to recognizing life estatesINTENTION OF TESTATOR is considered above all if intent of the testator is to give life estate court will recognizeThe common law recognizes three forms of freehold estate: (1) Fee simple – most closely approximates absolute ownership Perpetual, exclusive right to use and possession of landFreely alienable through grants and testamentary dispositions(2) Fee tail – an inheritable right of conceptually more limited duration – until the blood line runs out Exclusive right to use and possession of land that only devolves/transfers to lineal descendants Abolished by statute Law of Property Act s.9 “Any devise or limitation that previously would have been fee tail creates a fee simple or any other greatest level of estate” Examples“To A and heirs of his body” direct descendants (fee tail general) “To A and heirs female of his body begotten” (tail female)“To A and his heirs male of his body on his wife begotten” (tail male special)(3) Life estate – lasts until the life of the person Exclusive right to use and possession of land for the life of the holder (pur sa vie) or for the life of another (pur autre vie)Alienable – but any transferred interests only lasts for the duration of the interest (life span)Subject to the interest in reversion/remainder of the fee simple title holder A life estate may be created by a grant, a testamentary disposition or by operation of law Note: Aboriginal rights generally are unique (sui generis). Therefore, it would be an error to treat Aboriginal title as equivalent to fee simple ownership Aboriginal rights do not originate in the Crown but originate from pre-contact occupation of landK Gray & SF Gray, Elements of Land LawThe fourth dimension of land First three elements of land in English law relate essentially (although not entirely) to the world of physical reality. Notional estates in land – English law invented an entire intellectual apparatus of artificial constructs in order to explain various forms of entitlement to land. The device of the “estate” in land articulated the jural relationship between the landholder (i.e. the “tenant”) and his land, but it also did rather more. The single most striking feature of English land law has been the absence, within its conceptual scheme, of any overarching notion of ownership. The doctrine of estates Origins of the medieval theory of land law lay in the Norman invasion of 1066. The king acquired an ultimate or “radical” title to all land in England. It denoted the political authority of the Crown both to grant interests in the land to be held of the Crown and also to prescribe the residue of unalienated land as the sovereign’s beneficial demesne.Mediated the relationship between tenant & landThe interposed abstraction of the estate The object of each tenant’s ownership was an artificial proprietary construct called an “estate”. Each tenant did not own the land, but instead an estate in land with each estate being graded with reference to its temporal duration.The tenant has ownership of an intangible right (i.e. an estate) rather than ownership of a tangible thing. The radical title of the Crown The empirical fact of territorial sovereignty should not be equated with some notion of absolute beneficial ownership of the land. Estates as slices of time Doctrine of estates gave expression to the idea that each landholder owned not land but a slice of time in the land. By identifying a number of conceptual “estates” as potential objects of ownership, the doctrine of estates effectively quantified the abstract entitlement which might be enjoyed by any particular tenant within the tenurial framework. own not property itself but instead right to hold the landPeople in Canada don’t own the landowners, but instead land holders as we own a title to the land, but not the land itself. An estate in the land is a time in the land, or land for a time. The old freehold estates of the common law Three freehold estates known to common law were fee simple, fee tail and life estate. The only one (the fee simple) enjoys any modern significance, the entailed interest and the life interest existing nowadays (if at all) only behind some form of trust. The estate in fee simple As an estate of potentially unlimited duration, it represents the amplest estate which any tenant can hold. It is “for almost all practical purposes, equivalent to full ownership of the land itself”. Although each tenant fee simple merely holds a notional estate in land as a “tenant in chief” of the Crown, the plenary rights of the fee simple can endure forever.At common law if a tenant in fee simple died without an heir, the estate escheated to tenant’s lord (now Crown). Executed for treason would lead to forfeiture whereby the fee simple reverts back to the crown as well.Title will be said to vest in the crown.In AB there is an unclaimed Personal Property and Vested Property Act goes to provincial Crown. The fee simple estate is capable of transfer inter vivos or of devolution on death. Owners of the fee simple estate may come and go but the estate remains, since it is of potentially infinite span. Alienable (transferable) and can be divisible into smaller estates Important public policy considerations require that the fee simple estate in land should remain freely alienable, since unrestricted transferability is a vital precondition of a healthy and vibrant economy. Two Thing Contribute to Rise of Fee Simple: (1) Statute of Quia Emptore, 1290 (no more sub-infeudation), but you can now sell land without Lord’s consent. (2) Statute of Wills, 1540 – can appoint any heirs of his or her choosing, land can be bought, sold, or transferred to anybody Land is now ‘alienable’ One is able to give land through wills so now land is fully alienableThe entailed interest The fee tail or entailed interest was an estate in land which endured so long as the original grantee (the “tenant in tail”) or any of his lineal descendants remained alive landholding designed to retain land within the family. The life interests Plainly coextensive and coterminous with the life of its grantee. It comprises a transferable asset but, if conveyed to a stranger, ranks merely as an interest pur autre vie: it still endures only for the lifetime of the original grantee. Unlike an entailed interest, a life interest cannot be unilaterally transformed into any interest of greater duration. Flexibility in the management of wealthThrough the doctrine of estates, the common law was able to organise the allocation of certain powers of administration, enjoyment and disposition over land in respect of particular periods or “slices” of time. Proprietary rights over land could be fragmented and distributed in myriad ways: Greenacre could be allocated, say, to A for life, thereafter to B in tail, and then to C in fee simple. The doctrine of waste “Waste” being defined as any action or inaction on the part of the estate owner which permanently altered the physical character of the land. Only if the terms of his grant so stipulate can a tenant for life be made liable for “permissive” waste, which compromises defaults of maintenance and repair leading to the dilapidation of buildings situated on the land. More serious is “voluntary” waste, which includes any positive reduction of the value of the land (for instance, by the cutting of timber). A tenant for life is liable for such waste unless the terms of his grant give him specific exemption by declaring him unimpeachable for waste. Even if a tenant for life is at common law unimpeachable for waste, in equity he can be restrained from the commission of “equitable” waste in the form of wanton destruction of the land to the prejudice of his ment First, the granting of a temporary interest in a chattel – a bailment – is possible. For example, borrow a book from the library for two weeks and you will hold a possessory estate-like interest. Second, equity will recognize time-limited gifts of personalty contained in a trust. For example, funds or stocks and bonds may be given to trustees to hold for the benefit of a succession of beneficiaries. Third, it is accepted that the dividing up of the legal title of personalty under a will is valid. Sometimes estate interests in personalty are introduced through statute. Despite all of these qualifications on the general rule, the estates cannot be created over consumable items that do not form part of stock in trade. Even though personal property can be owned absolutely, provision must still be made for the state of the title when the owner of personalty dies with no heirs to whom entitlements can pass. At common law, such property becomes vested in the Crown, by prerogative, as bona vacantia. There seems to be very little difference between the operation of a bona vacatia and the escheat of land. Hence, under modern escheat legislation in Alberta, for example, no distinction is drawn between realty and personalty concerning the ultimate fate of property once held by a person who has died with no lawful next-of-kin. Estates: Creation, Terms & TransfersFreehold estates: 1) Fee Simple; 2) Fee tail; and 3) Life estateOther estates: 1) Leasehold estate (created by contract with term of time) and 2) copyhold estate (never introduced in Canada)Seisin: ownership of freehold estate with obligation of tenurial responsibilities; identifies who is responsible while showing who enjoys benefitSeisin needs to be transferred under common law or nothing has been granted or createdSeisin requires that there was always someone who possessed the estate at common lawEstate is created by:1. By instrument: grant or deviseIn creation by grant the language is importantExample: “TO A” OR “To A in fee simple” The overarching principle governing the interpretation of wills is to give effect to the intentions of the testator, within the parameters of permitted estates in land and interests in chattels 2. Operation of law: “Dower Act”Creates an estate via the lawTermsGrants – signifies a transfer of estate inter vivos Devise – signifies testamentary transfer done by will (after death)For life – right to use and enjoyment of land, that slice of time is measured by the new owner’s lifetimeThe original owner now has a fee simple in reversion, reverts back to him at the end of life estate. Remainder – secondary interest; slices up the time to land in two different people (forward looking, as opposed to reversion) Reversion – return interest once given; something the grantor retains Example:O acquires an estate in Whiteacre in fee simple Crown owns land, but O owns title/estate to the landO owns fee simple, which means he owns title potentially foreverO then grants (still alive) to A in fee simple in land (inter vivos transfer)Crown still owns the land, but now A is the tenant in fee simple. A then devises (takes effect upon death) to B in fee simple,Crown owns the land, but now B owns the land in fee simple as A’s is deadA is dead, we know this because we used the word devise which indicates land was transferred through a will upon A’s deathB grants (gives while still alive) to L for life (owner of estate for life)L does have fee simple in possession for life, but there is a restriction, upon which L’s death the estate is reversed (reversion) back to BL is a tenant for life, life estate (owner of an estate for life)B has a fee simple in reversion upon L’s deathB has fee simple not in possession while L is alive B devises to W for life, remainder to CB is dead (devise means will transfer upon death)W has a life estate (life tenant) – fee simple for lifeC has fee simple in remainder (not in possession) upon W’s death C has fee simple in possession C will hold the exact interest that O acquired originally C will have full fee simple in possessionAutonomy (“dead hand of the past” control rule) – value of property ownershipIdea that you cannot devise with restraints & dead guy cant rule from the grave; autonomy in how you use or possess land“To my widow for life, and my remainder to my children in fee simple” (don’t want widow to remarry and give away land, and keeps kids nice to the widow = d who might not see eye to eye while you are dead).“To William and his heir’s male of the body to his present wife Katy begotten” – estates can only be inherited to the male children of William and Katy – want to ensure dynasty will live on. FEE TAIL “To UofA so long as used for school purposes” – land is now subject to will of the person who could have been dead 100 years – how to balance with economic purposes years later? “To my first grandchild to graduate law school” – make people do what you want for the propertyProblems in Creating Estate: Repugnancy Can occur when an absolute gift (or one that looks absolute) is coupled with an inconsistent gift over of the same property. Sometimes arises as to whether the donee was meant to receive a life estate or the fee simple.Solutions:1. First gift (to A) is absolute fee simple, second gift is discarded as repugnant2. First gift is life estate and not absolute, second gift over is valid3. First gift is life estate with power to encroach, whatever is left of property is valid gift overPower to encroach includes more than life estatei.e A can mortgage, lease, or sell property during A’s lifeSolution – depends on what Court deems to be the DOMINANT INTENTION of the grantorRe Walker – Court found testator’s dominant intention to give wife an absolute interest in the property, therefore gift over was invalid as repugnant to testamentRe Taylor – Court found testator’s intention was to grant wife a life estate coupled with a power to encroach on the remainder for purposes of her maintenanceTestament did not expressly grant a power to encroach, but it was imported by Court – wife had almost a fee simple BUT she didn’t have the right to transfer the property by her will or testament, it had to go to daughters when she died (not a full fee simple)The Estate in Fee Simplemost closely approximates absolute ownership exclusive right to use and possession of land and alienable Establishing a Fee SimpleCommon law rule says in order to really transfer an estate in fee simple you must include “and their heirs” this is NO LONGER REQUIRED though because of S.7, s.9 Property Act & s.9 Wills and Succession ActOLD COMMON LAW = rule of law (def’n: rule applies even if contrary to intention) = strict = must have words of purchase + words of limitation for grant otherwise only life estate; More lenient for wills: fee simple is found so long as language is sufficiently clear to convey that intentionGrants: Magic words – Words such as “To A and his (or her) heirs” or “to A, her heirs, and assignee” or something very similar. “To A in fee simple” or “to A forever” “I grant Blackacre to A” would pass just a life interest – rule of law (will be applied even if some contrary intention is manifested in granting document) as compared with a rule of construction Will (Devise): Fee simple is found so long as language is sufficiently clear to convey that intention MODERN LAW = transfer without words of limitation presumed to be conferring a fee simple, unless the instrument suggests a contrary intention = rule of construction (defn: presumption exists but can be rebutted) Deed (Grant): Presumes a conveyance of land by will is a grant in fee simple even if there are no words of limitation, unless there’s evidence of a contrary intention (Law of Property Act, s. 7(1) = presumes all conveyances of land are grants in fee simple even if there are no words of limitation, unless there’s evidence of contrary intention – rule of construction (intention))Will (devise): s 9 of the Wills and Succession Act (Same outcome – presume fee simple unless there is an intention to the contrary, different statutory authority) – rule of construction (what they likely meant)Law of Property Act s.9 “Any devise or limitation that previously would have been fee tail creates a fee simple or any other greatest level of estate”Law of Property Act s.7: if no words of limitation, entire estate is transferred fee simple unless contract intention is suggested by instrumentWills and Succession Act s.9: unless the person can show intention by instrument, they wanted less than fee simple it will be seen as fee simple.RC Elliickson, Property in LandIdea of utility The preeminent advantage of an infinite land interest is that it is a low transaction cost device for inducing a moral landowner to conserve natural resources for future generations. The fee simple in land cleverly harnesses selfishness to the cause of altruism toward the unborn, a group not noted for its political clout or bargaining power. There is a link between ownership and incentive, if no rights you do not want to make improvements. By having the ability to transfer land while alive or dead makes you a good steward to improve and take care of the land. Thomas v Murphy (1990) NBQB Removal of “And heirs” = fee simpleFACTSGrantor receives property from deceased. In the will of the deceased, the word “heirs” was not used. Under doctrine of strict construction (old laws), this would be a “life estate” because the will did not state to “X and his heirs”. The Grantor attempts to sell the land to Thomas (the “Grantee” who accepts the property or buys it). Thomas hires Murphy as a lawyer to advise him whether or not the title is good. Murphy says yes, and Thomas buys the land. As time passes, Thomas wonders if the Grantor actually had title to the property. Because under strict construction the Grantor had a “life estate”, meaning he/she owns it for the length of their life. However, if he had fee simple, he could sell it to Thomas.ISSUE – Whether the grantee in the trust deed received a fee simple interest in the property which they could convey. DECISION – Fee simple was intended even though the deceased did not use the word “heir”. REASONING: More important to look at the actual intention of the deceased and their will. Murphy actually did not make a mistake, and therefore there is no case in this circumstance. Notes: The stock phrase “To A and her heirs” translates into the transfer of a fee simple in the following way. The words “To A” are words of purchase, describing the intended recipient of the property. The phrase “and her heirs” are words of limitation. They delineate the extent of the right conferred on A. The fee simple will endure so long as A has some designated heir: someone who, whether by sale, gift, will or by operation of law, can take the property. Accordingly, a fee simple can last forever. At common law, only the words “and his heirs” could normally create an estate in fee simple. Nowadays, the magic words “and his heirs” are no longer required – IN THE ABSENCE OF WORDS OF LIMITATION, THE ENTIRE ESTATE IS TRANSFERRED (FEE SIMPLE) UNLESS A CONTRARY INTENT IS SUGGESTED BY THE INSTRUMENT – Law of Property Act. S.7 & 9, also s.9 Wills and Succession ActThe Life EstateThe duration of a life estate is determined by reference to continued existence of a life or lives.A gift of land “To A for life” confers on A what is termed an estate pur sa vie or a life estate It lasts so long as A is alive then reverts to original grantor. Such an interest is fully transferable, though the initial designation of the measuring life is fixed at the time the interest is conferred. Therefore, where A owns a life interest, a transfer to B gives the latter a life estate for the life of A. PREDECEASE LIFE INTERESTWhere A holds a life estate for the life of B, and A predeceases B, there remains an unexpired portion of the life interest. At common law, RULES OF FIRST OCCUPANCY govern ownership of this residual with the rest of A’s estate. Methods to create a life estate:(1) Expressly (O: “To A for life” – words of purchase + words of limitation)A acquires life estate, O retains an interes(2) Language to similar effectO: “To A for as long as she wishes” O: “To A to have and use during his lifetime”(3) By a faulty purported grant of an estate in fee simple(4) By operation in law (e.g.: the Dower Act)Re Walker (1925) ONCA Dominant intentionFACTSWill States: “I give and devise unto my said wife all my real and personal property…and also should any portion of my estate still remain in the hands of my said wife at the time of her decease undisposed of by her, such remainder shall be divided as follows”Contradiction in the Will On one hand the wife purportedly gets a fee simple ownership (absolute ownership), which in part of doing such is giving the power to direct what will happen to that interest of land (power to alienate) thus meaning she would have the right to whom interests will be transferred to next On other hand it is constricting and restricting her ability to alienate and do what she wants with the interest in land upon death.Wife died in 1922, her estate (including what Walker left her) was valued at $38,000Party claiming under Walker’s Will to have some portion of wife’s estate as part of the ‘undisposed’ portion of Walker’s estateParty claiming under Wife’s Will argue that provision of her husband’s Will gave the wife absolute ownership over estate, and husband’s second clause/condition to give any leftovers is not validDECISIONCourt says you cannot give a fee simple and place restrictions on it (dead hand of the past)A will cannot devise a fee simple interest to a party and also direct to whom that party will later transfer the interestSuch an attempted disposition is said to be repugnant to the fee simple estateOptionsSolution #1: Give a fee simple estate and do not place restrictions on death (void the restrictions on her death)Absolute gift (fee simple) given to wife Not possible to give absolute ownership but keep control over what is givenSolution #2: Give a life interest/estate Wife receives a life estate in the real and personal property and her will would not apply to the property. If this is given it is consistent to control interest after the wife dies Solution #3:Life estate with power of encroachmentWife receives life estate with some direction to what happens when she dies, but she withholds the power to sell all the property before she dies (during her living life). If this occurs, the real and personal property is no longer an issue. You have interest for life and you have power to sell if need be but if remains upon death it goes to the other party in provisionHOLDINGSOLUTION = ABSOLUTE GIFT (FEE SIMPLE)Look for dominant intention of the testator: you need to have express language limiting their use of the property during their life to have a life interest. In this case it was the intention that she have this fee simple to the wife, so do not give effect to lesser intention to giving it to someone else after she dies (gift over)Dominant Intention of Walker’s will – Court gives effect to dominant intention and reject subordinate intentionIntention of Walker is clear, but it was an impossible request… thus Court must give effect to the wishes of Walker as best as legally as possible.Gift to wife is dominant intention from Walker’s willTherefore, attempt by Walker to deal with ‘undisposed’ portion after wife dies is not validRATIO - First case to discuss how Court must determine testator’s dominant intentionRe Taylor (1982) SK Power of Encroachment FACTS“I give, devise and bequeath all my real and personal estate…to my wife Kathleen…to have and use during her lifetime…any estate, of which she may be possessed at the time of her death is to be divided equally between my daughters”Aka: I give my property to my wife for her use during her lifetime (life estate), after which I divide equally said property to my daughters.Wife died later, and Wife’s will requested that the estate should be gifted to charity.Daughters argued Wife was given a life estate only and cannot gift Taylor’s estate by will.Wife’s counsel argued that she was given an absolute gift.DECISIONLife estate was given to wife, gift over to daughters was validBasic rule = Dominant intention of testator must be ascertained by a consideration of the will taken as a wholeWhere intention of testator is clear from language, Court must give effect to this intention.Taylor’s will gave wife life estate with the power to encroach with words of limitation:“to have and use” allows wife to encroach and use the capital gleaned from the property“during her lifetime” are words of limitation, limit to within her lifeCourt found Taylor’s dominant intention to be LIFE ESTATE WITH POWER OF ENCROACHMENTPrevious case of Townshend v MacInnis – ‘to be used and disposed of as she wishes during her lifetime’Court in that case held that the wife was given absolute ownershipHowever, case is distinguishable because of language of the testament:“to have and use” versus “to be used and disposed of as she wishes”Taylor’s wife has no power to dispose of the husband’s estate during her lifetimeShe can only use the estate for her own maintenance during her lifetimeHOLDINIGSOLUTION = LIFE ESTATE WITH POWER TO ENCROACH FOR MAINTENANCE ONLYCourt determined this is a life estate with power of encroachment and said that just because you have power of encroachment this does not elevate it to fee simple closest we can get to his intention that he wanted her to have it for life Power of Encroachment – power to sell property or take value out of something to pay off expenses (or whatever they want to do with it); taking actions to monetize the property. Christensen v Martini Estate No power of encroachment FACTS“I give to my wife for [address] for her use. When she no longer needs [address], that she give said property to Christensen’s”DECISIONCourt says there is no less than 5 interpretations of that clause 1) could be a fee simple interest to wife Phrase: For her use; no longer needs2) could be a determinable fee with gift when she no longer needs the propertyGranting an interest with the idea that it will revert when a particular event occursPhrase: No longer need it - reverts to Christiansen 3) conditional fee simple interestIdea that there is a condition that has to be met and if condition not satisfied it is transferred 4) life estate to wife with remainder to Christensen5) License of occupation to wife and a fee simple intertest to Christensen Court look to the Dominant Intention – testator wanted to benefit both widow and CWidow given life estate WITHOUT POWER OF ENCROACHMENT with the remainder over to the Christensen’s If power of encroachment given to wife, the property could be significantly diminished before going to CThis is not what testator intended, according to the language of the testamentIntention for C to ultimately receive the propertyInterpretation of “no longer needs” ambiguous language. Lack of specific language during her life time but rather when she needs it Wife argued this meant property could transfer to C during her lifeCourt found it could also mean that the property would transfer after wife dies tooBoth interpretations of ‘no longer need’ are possibleAbsence of counsel in writing the will leads the court to decide on the interpretation. HOLDINGSOLUTION = LIFE ESTATE THAT BENEFITS BOTH OF THE MENTIONED PARTIES. NO POWER OF ENCROACHMENT. Take-A-Way from Fee Simple & Life EstatesIntention of testator is paramount Where the testator evinces two contradictory intentions that cannot be reconciled within the recognized common law estates the courts will give effect to the dominant intention (Walker)Must give the effect to the intention of testator but doing do within constraints of recognizing interests in land These intentions, however, have to be made to fit within the recognized classes of estates --> numerous clauses You do not want to create new forms of property interests, as it is costly, and they will last in perpetuity. There is a societal interest in “simplicity” on estates and land. In addition, you could look to public policy concerns. Restraints of alienation are bad because they make it difficult to have a mutually beneficial transaction. Furthermore, you do not want to have a “dead hand” of the past directing what occurs today. We have precedent ways of dealing with wills because:Less confusionit could over complicate and confuse the courts with regards to property; It is perpetual thus future 3rd parties could be impacted negatively if no simplistic ways?Economic problemsAlienable nature of property interests can lead to complication?Limitation of autonomy/libertyThe dead hand of the past: people today should not be constrained by the wishes/desires of people no longer aroundTensions in EstatesTensions between life tenant and the reversion fee simple interest holder the issue is that the life tenant may not maintain the land subsequently loosing value for the reversion interest holder Idea that in fee simple your ability to sell incentivizes you to care for the interest because you can prosper- this is why this is not a concern with fee simple holders; idea of utilityImplementation of policing certain actions that devalue the interestIssue of purchasing: if you buy interest from a life tenant you only get right to possession for the rest of their life. This means you are not willing to invest in land because your interest is limited The Fee Tail The fee tail or entailed interest was an estate in land which endured so long as the original grantee (the “tenant in tail”) or any of his lineal descendants remained alive landholding designed to retain land within the family. Direct descendant will have fee simple; estate in land reverts to the heirsWhy did we abolish this in Alberta? It is economically inefficient because it restricts the ability of individuals who higher value the use of the land from buying the land. Impairs alienabilityWhy one would want to keep land in the family? Connection to a parcel of land.Source of connection, not just a commodity. LPA s. 9 (Alberta) – statute bars creation of fee tailsStatutory barring – generally if you try to create a fee tail, you will create a fee simple“any devise or limitation that previously would have created an estate in fee tail creates a fee simple”Doctrine of Waste Waste – any act or inaction that causes physical transformation of the landWaste Law: System of rules required to balance interests of those in present possession versus the interests of those who will/may become entitled to possession in future; reconcile the interest of life estate holder and the holder of reversion/remainder interestLimits extent to which life tenant can alter the physical complexion of propertyFour Types of Waste:(1) AmelioratingAct which results in benefit and not injury – improves the inheritance of the landi.e. turning a pasture into arable land, conversion of old buildings to modern structuresAdding benefit to the property that increases the value Liability is unlikely unless character of property completely changed it’s a problem, courts won’t award damages or grant injunctions for ameliorating waste between life tenants and the remaindermanImprovements can be subjective, not necessarily improvements in eyes of remainderman(2) VoluntaryPositive wrongful action that diminishes value of propertyi.e. cutting down treesLiability unless excluded by the grantUsually liable for waste, although it can be changed by terms of initial grant.(3) Permissive (not default)Failure to act to maintain the property; no positive actions taken by life tenant to maintain failing to take care of weeds or paint the house. By default a life tenant has no liability unless provided for in grantNot immediately liable for this, but this can be changed by the terms of the initial grant (if they said you had to = liable). Positive wrongful act that diminishes value of property, depends on the circumstances(4) EquitableWanton, serious, malicious destruction by life tenant (aka Aggravated Voluntary waste)Deliberately trying to decrease the value Court will order injunction to restrain such destruction by life tenantLiability even if life tenant is held to be unimpeachable for waste under the grantException: grant must have high level of express language to give Life Tenant freedom from liability for equitable wasteEquitable waste by Life Tenant will be liable under Laws of Waste unless clear and express wording of testament Should say ‘free from liability for equitable waste’Section 17 of Law of Property Act codified this requirement.Analogous to limit on Aboriginal titleWhy does it apply in the case of a LIFE ESTATE and NOT FEE SIMPLE? Where you have a perpetual interest, the changes you make are capitalized to a full extent, this occurs in a fee simple. But when there is no perpetual interest, as is the case for life estate, the changes you make are no capitalized.i.e. an 80-year-old holding a fee simple interest in a house who wishes to do a renovation to the house, will receive more value because the value will occur for an extended period of time. Not the case when one has a life estate in a house.Ultimately, this motivates people to think about the future and how the property can be capitalized for the longest period of time – idea of utility Dower Act & RightsHistorical common law rule – estate with no testament is given to eldest son or evenly spread between daughtersSpouse was not protected, therefore common law created dower rightsPurpose was to protect widowsAt common law there were two kinds of life estate: dower (interest of wife in land that was owned by deceased husband) and curtsy (interest of husband in land that was owned by deceased wife)It was a mechanism to provide to spouse following death of spouseDower right of a wife was a LIFE ESTATE in freehold properties of deceased husbandBecame a 1/3 interest in all the freehold property of the deceasedRight of husband to wife’s lands was Curtesy NOTE BOTH ABOLISHED BY STATUTE1887 – Land Titles Act became law in AlbertaDower act abolished because it created an ‘invisible interest’ in a man’s propertyAbolished in Law property act Law property act s.3: No dower rights except as provided by Dower ActLaw Property Act s.4: No curtesy rightsDower Act enacted laterDower rights: mainly protected property from being seized by creditors i.e. husband could not bet the house in a card game and lose itare gender neutral and must be legally married & ends upon divorce provides statutory LIFE ESTATE arising by operation of lawUpon death of one spouse, a life estate is held by the remaining spouse in the “homestead” of the deceased spouse (s.18)The key provision section 18 on death of spouse who holds title to homestead the surviving spouse automatically holds a life estate in homestead → surviving spouse gains property interest despite any disposition in will?Provides that when there is a transfer of a homestead a spouse needs to consent even if not on title (s.4)If you have a sale of home where a married couple lives you need to execute dower rights because even cv are joint tenants or tenants in common, the execution of disposition by them constitutes consent to release dower rights.Section 1(b)(ii): definition of ‘disposition’Transfer, agreement for sale, or lease of more than three yearsMortgage or encumbranceDevise or other disposition by willSection 4 – Providing consent to a dispositionFormal requirements of consent are listed in s. 4Difference between s. 7 and s. 9:Section 7 describes affidavit for release of dower rightsSection 7(4)(a) Property is no longer a homestead when release of dower rights is registeredProperty not homestead – no requirement for consentSection 9 is contract/agreement for release of dower rights requiring valuable considerationOn its own, not enough to dispense with consentIs one of circumstances under s. 10(1) that will get you into court to apply for order to dispense with consentNext you must win on reasonableness/fairness for court to issue order – s. 10(5)Section 10 – Court can dispense with consent requirementS.10(1) grounds that get you into courtroomExistence of enumerated condition allows you to apply to court for order to dispense with consentS.10(5) reasonableness gets you decision from courtCourt uses reasonableness and fairness to determine whether to order dispensing of consentSection 23(1) – spouse has life estate in the personal property that is exempt from seizure Entitled to use and enjoyment of that personal propertySpouse doesn’t just get an empty house!Section 19 – Surviving spouse must select one homestead if the married person dies with more than oneABORIGINAL TITLEIMPORTANT: Aboriginal property interest are generally distinct from common law estates Aboriginal Law vs. Indigenous LawAboriginal law is the law of the Canadian state in relation to Aboriginal peoples It includes common law doctrines like Aboriginal rights and title, treaty rights, s. 35 of Constitution Act, 1982, and legislation. Indigenous law is the law of particular Indigenous groups It includes Indigenous legal traditions that often can be traced back to before contact with Europeans (but that also continue to evolve) It also includes formal laws (including legislation) enacted by Indigenous communities exercising recognized self-government powers. i.e. a First Nation’s land code enacted under the First Nations Land Management Act Framework for Aboriginal Property Interests in Canadian Law Aboriginal Title Common law interest in land that received constitutional protection in 1982. Tenure under Statutory Regimes Indian Act. First Nations Land Management Act. Much more autonomy to first nations to enact their ideasMetis Settlements Act. Tenure under Modern Treaties & Self-Government Agreements i.e. Nisga’a Final Agreement provides for fee simple interest in and under Nisga’a jurisdiction. Customary interests in land within particular Indigenous communities. The Doctrine of Discovery The doctrine of discovery was a principle of international law under which a European government could claim sovereignty over a territory by discovering the territory prior to other European sovereigns (regardless of the prior presence of Indigenous groups) As understood at common law, discovery gave the sovereign the power to govern the territory as well as the underlying (or radical) title to the land, but it did not necessarily give the sovereign a right to possession of land already occupied by Indigenous groups (Johnson v M’Intosh). The Aboriginal property interest that burdened the Crown’s underlying title was known as “Indian title” (today Aboriginal title). Terra Nullius Terra nullius means land belonging to no one; unoccupied or uninhabited Most British territories first settled in the 17th and 18th centuries , were not treated as terra nullius However, some British territories settled in the 19th century were treated as terra nullius including British Columbia and Australia The Crown asserted a claim to both sovereignty and full beneficial ownership of the land, despite prior Indigenous occupation of the land. Terra nullius has since been repudiated by courts in both Australia (Mabo) and BC (Calder). History of Aboriginal Title Aboriginal title has been recognized by common law courts for at least two centuriesHowever, it was recognized prior to that in the colonial practices of the British in North America, in colonial statutes, and in imperial legislation (i.e. Royal Proclamation). The practice of entering into land cession (giving up) treaties (and private land sales) with Indigenous people can be traced to the early days of British settlement of New England in the 17th century. These practices were premised on a recognition of an Indigenous legal interest in lands a group occupied and controlled – though of course there was often inequality of bargaining power. The Recognition of Aboriginal Title in CanadaThe Royal Proclamation, 1763 formally recognized an Aboriginal legal interest in part of the territory that became Canada The Royal Proclamation also provided that this interest could only be transferred to the Crown via a treaty. Can only acquire indigenous land through crown no direct trade with indigenous peoplesAs an instrument having the force of imperial legislation the Royal Proclamation is part of the Constitution of Canada The Royal Proclamation set out much of the basic framework for Crown-Indigenous relations in Canada. Land seisin treaties were pursued in most of Ontario and the Prairie provinces (i.e Treaty 6). Surrender the previous entitlement to land in exchange for the consideration of treaties entitlement, hunting, fishingCrown did not live up to their promises in their treaties In St. Catherine’s Milling v The Queen, the Privy Council described Aboriginal title as a merely “personal and usufructuary (right to use and enjoy) right”. In Calder, a divided panel at the SCC left open the possibility that the doctrine of Aboriginal title applied in BC (most which was not covered by historical treaties), and that titles had not been extinguished through legislation. This raised the prospect of Aboriginal title claims in large portions of BCOngoing land claims in BC since no treaties happened during settlementIn 1982, s. 35 the Constitution Act, 1982, came into force “The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed”The Issue of Outstanding Aboriginal Title ClaimsThe land claim in Calder was ultimately resolved through the Nisga’a Final Agreement, one of the first “modern” treaties between the Crown and an Indigenous group it is the a very long document (compared to older, shorter treaties) it gives aboriginals in BC a fee simple interest. However, a multitude of other potential Aboriginal title claims continue to exist. An extensive treaty negotiation process has resulted in some additional resolution of claims through modern treaties, though most claims remain unsolved. In the absence of resolution through agreement, some groups of aboriginal peoples initiated litigation seeking declaration of Aboriginal title from the courts. This is what led to the Delgamuukw and Tsilhqot’in decisions. Delgamuukw v British ColumbiaClaim brought by the Gitxsan and Wet’suwet’en peoples to Aboriginal title of a portion of territory in northwestern BC The claim was ultimately dismissed by the SCC on procedural grounds (the pleadings at trial had framed the claim as a claim by individual houses and clans, rather than as collective claims brought by the Gitxsan and Wet’suwet’en nations)Was no declaration of aboriginal title However, in dismissing the claim, the Court offered extensive obiter dicta on the nature and content of Aboriginal title, how it may be established and how it may be infringed by governments. Delgamuukw: The Sources of Aboriginal Title Aboriginal title is a unique estate in land (“sui generis”). Its content is informed by both common law and Aboriginal perspective & legal systems. It is based on occupation by an Indigenous group prior to the Crown’s assertion of sovereignty. The Royal Proclamation recognized this interest but did not create it. Sources: (1) occupation of land; (2) relationship between law and pre-existing principles of Indigenous lawOccupation of land has certain form of significance in land The Crown holds the underlying title, as with traditional estates in land, on the basis of asserted sovereignty. Delgamuukw: The Content of Aboriginal Title Aboriginal title is inherently collective in nature and Inherently held by a nation as a whole (nations have claim to it)Right to exclusive use and occupation, subject to unique features and restrictions: Inalienable except to the Crown.Held to be transferable only to the crown not to private partiesCannot be transferred to any other private parties with the exception to the crown Inherent limit on use: uses must not be “irreconcilable (incompatible) with the nature of the occupation of … land and relationship that the particular group has had with the land” … Such as? Strip mining a hunting ground Building a parking lot of culturally significant land However, uses are not restricted to those uses that the group traditionally engaged in. Aboriginal title has a modern, economic component. Why is Aboriginal Title Inalienable? Remember, fee simple interests are alienable, why isn’t Aboriginal title? There is a protective purpose to this inalienability: Alienation is inconsistent with the connection Aboriginals have with the landImpedes AND stops transactions that might be valuable. Traditionally, the government could acquire land from Aboriginal groups for low costs. Lamer CJ’s reasons: Ensures settlers receive their titles from the Crown. Ensures Indigenous peoples are not “dispossessed of their entitlements”. Reflects the relationship and connection an Indigenous group has with the land (more than just a fungible commodity). Other reasons? Historical reasons relating to Crown military and diplomatic relations with Indigenous groups Outdated paternalism towards Indigenous people? Many Indigenous legal systems did not traditionally treat land as an alienable commodity. Ensuring the maintenance of a collective land base as a locus of self-government. Open Questions Lamer CJ justifies restrictions on Aboriginal title based in part on Aboriginal perspectives and Indigenous peoples’ relationship and connection with the land – was he justified in doing so? Tough to say – are you assuming that there is a single Indigenous perspective? Can’t Indigenous cultural commitments change over time? Is this approach based on a frozen conception of Indigenous culture? Is it the role of the Court to define and police restrictions on Aboriginal title based on its view of an Indigenous group’s own culture? Delgamuukw: Establishing A Claim to Aboriginal Title In order to make out a claim to Aboriginal title, a group must show:(1) Occupation of land at the time the Crown asserted sovereignty over the land. Factors: Indigenous laws in relation to the land – laws governing the use of the land Physical occupation (i.e. construction of dwellings, cultivation and enclosure of fields, regular use of definite tracts of land for hunting, fishing or otherwise exploiting its resources). (2) Continuity of occupation if present occupation is relied on as proof of pre-sovereignty occupation(3) Occupation must be exclusive Must be some indication that it wasn’t simply an open access situation Aboriginal Rights and Aboriginal Title In addition to Aboriginal title, Indigenous groups may claim common law (constitutionally protected) Aboriginal rights to engage in specific practices, customs, and traditions. These are rights to engage in specific practices, land (i.e. hunting, fishing, ceremonial practices etc.) rather than rights to exclusive possession of landIn order to make out a claim to an Aboriginal right, a group must establish:(1) that a practice was engaged in before contact with Europeans; and (2) that it is of central significance to the Indigenous society in question (R v Van der Peet). NOTE: Even if a group fails in a claim to Aboriginal title, it may still have a claim to Aboriginal rights in a given area. Delgamuukw: Infringements of Aboriginal Title Aboriginal title is constitutionally protected under s. 35. Government actions may infringe Aboriginal title in some circumstances, but these infringements must be justified In order to meet the justification test: (1) The infringement must be furtherance of a compelling and substantial objective.(2) The infringement must be consistent with the special fiduciary relationship between the Crown and Aboriginal peoples; and (3) The government must meet its duty to consult and accommodate. Aboriginal Title and Traditional Common Law Estates Aboriginal title has both similarities and differences with traditional common law estates in land (i.e. fee simple, life estate etc.). Similarities: Crown holds underlying title. Crown asserts a right to govern and make laws in relation to the land (subject to constitutional restrictions). Like other common law estates, Aboriginal title is enforceable in the courts of the Crown.Differences: Unlike traditional common law estates, which are presumed to ultimately derive from a Crown grant, Aboriginal title is based on occupation prior to the Crown’s assertion of sovereignty, and so is not based on a Crown grant. The content of Aboriginal title is unique and distinct from any other common law estate inherently collective, inalienable, restrictions on useThe content of Aboriginal title is based in part on Indigenous legal systems. Contemporary Issues Government decisions relating to “Crown lands” subject to asserted but unproven Aboriginal title claims. Main answer – until Aboriginal title is established, the Crown does have the authority to make decisions about the land … but, it is under a duty to consult with the Aboriginal group. i.e. the regulatory approvals of both the Northern Gateway and Trans Mountain pipelines were quashed on the basis of inadequate consultation with Indigenous groups, including those with claims to Aboriginal title. Government decisions relating to the Crown land that is later recognized to be subject to Aboriginal title.Aboriginal title claims to private land. Common law metis title?Asserted indigenous authority over land prior to declaration of title or land claim settlement Aboriginal Title Claims to Private Land Example – Blackacre is a parcel of land in BC. An estate in fee simple over Blackacre was granted in 1911 by the Crown to A. A granted the fee simple estate to B, who upon her death devised the estate to C, the current owner. D is a First Nation with a claim to Aboriginal title over an area that includes Blackacre. Which parties can claim a legal interest in Blackacre? C and D The Crown Are these interests consistent with each other? Can we reconcile one party having a fee simple and an Aboriginal group having a title claim? Both give an exclusive use to right and possession conflict!How might these interests be reconciled? First, the Aboriginal group does not have an ongoing right to the possession of this land, but it has a claim to compensation against the Crown. Claiming title:After Delgamuukw it was clear that claims for Aboriginal title could exist – brings us to the Tsilhqot’in Nation v. BC CaseTsilhqot’in Nation v British ColumbiaFACTSFor centuries, the people of the Tsilhqot’in Nation – a group of six bands – have lived in a remote valley, and from their perspective, this land has always been theirs. The Tsilhqot’in nation has an unresolved land claim. 1983 – province granted Carrier Lumber Ltd a forest license to cut trees in part of the territory at issue. One of the six bands objected and sought a declaration prohibiting commercial logging on the land. The dispute led to the blockade of a bridge the forest company was upgrading. The blockade ceased when the Premier promised that there would be no further logging without the consent of the band. 1998 – the original claim was amended to include a claim for Aboriginal title on behalf of all Tsilhqot’in people. The claim is confined to approximately 5% of what the the Tsilhqot’in regard as their traditional territory. The federal and provincial governments both oppose the title claim. PROCEEDINGSTrial judge found that in principles the Tsilhqot’in people were entitled to a declaration of Aboriginal title to a portion of the claim area as well as some outside the claim area 2012, BCCA held that the Tsilhqot’in claim to title had not been established but left open the possibility that in the future, the Tsilhqot’in might be able to prove the title to specific sites within the area claimedFor the rest of the claimed territory, the Tsilhqot’in were confined to Aboriginal rights to hunt, trap and harvest. ISSUESWhat is the test for Aboriginal title to land? If title is established what rights does it confer? Does the British Columbia Forest Act apply to land covered by Aboriginal title? What are the constitutional constraints on provincial regulation of land under Aboriginal title? How are broader public interests to be reconciled with the rights conferred by Aboriginal title? Tshilqot’in ask the Court for a declaration of Aboriginal title over the area designated by the trial judge DECISION: Granted a declaration of Aboriginal title over the area at issue, as requested by the Tsilhqot’inBC breached its duty to consult owed to the Tshilqot’in through its land use planning and forestry authorizations. Ratio: Aboriginal title flows from occupation in the sense of regular and exclusive use of land. Aboriginal title is established over the area designated by the trial judge. Aboriginal title confers the right to use and control the land and to reap the benefits flowing form it. Where title is asserted, but has not yet been established, s. 35 requires the Crown to consult - DUTY TO CONSULTOnce Aboriginal title is established, s. 35 permits intrusions on it only 1) with the consent of the Aboriginal group or 2) if they are justified by a compelling and substantial public purpose and 3) are not inconsistent with the Crown’s fiduciary duty to the Aboriginal group.Was Aboriginal Title Established in this Case? Whether the evidence in a particular case supports Aboriginal title is a question of fact for the trial judgeThe question therefore is whether the Province has shown that the trial judge made a palpable and overriding error in his factual conclusions The trial judge was correct in his assessment that the Tsilhqot’n occupation was both sufficient and exclusive at the time of sovereignty – there was ample direct evidence of occupation at sovereignty, which was additionally buttressed by evidence of more recent continuous occupation Consider “Character of the Land” – this played a large role in determining who the land belonged to. Rugged mountain terrain would not sustain a population regardless. The nature of the signal that particular acts send – say you have lush land and you are only using a limited portion of the land for a limited period of time; the signal will be different. Occasionally hunting in very lush terrain does not send a strong signal. If it was only about exclusivity and the signal sent, you wouldn’t have to look to the character of the land as a separate factor. What Duties were Owed by the Crown at the Time of the Government Action? Prior to the declaration of Aboriginal title, the Province had a duty to consult and accommodate the claimed Tsilqot’in interest in the land. As the Tsilhqot’in had a strong prima facie claim to the land at the time of the impugned government action and the intrusion was significant, the duty to consult owed by the Crown fell at the high end of the spectrum described in Haida and required significant consultation and accommodation in order to preserve the Tsilhqot’in interest. Casebook Notes from Tsilhqot’n caseSummary of Jurisprudence Radical or underlying Crown title is subject to Aboriginal land interests where they are established. Aboriginal title gives the Aboriginal group the right to use and control the land and enjoy its benefits. Governments can infringe Aboriginal rights conferred by Aboriginal title but only where they can justify the infringements on the basis of a compelling and substantial purpose and establish that they are consistent with the Crown’s fiduciary duty to the group and fulfill there duty to consult. Resource development on claimed land to which title has not been established requires the government to consult with the claimant Aboriginal group. The Test for Aboriginal Title Should the three elements of the Delgamuukw test be considered independently or as related aspects of a single concept? High Court of Australia has expressed the view that there is little merit in considering aspects of occupancy separately consider as related aspects of a single conceptTEST: In asking whether Aboriginal title is established, the general requirements are: Sufficient occupation of the land claimed to establish title at the time of assertion of European sovereignty In determining what constitutes sufficient occupation, one looks to the Aboriginal culture and practice, size of group and manner of life, character of lands and compares them in a culturally sensitive way with what was required at common law to establish title on the basis of occupation From the common law: adverse possession is not the right standard rather general occupancyIntention to occupy and hold land for the purpose of the occupant. Signal: Aboriginal group just had to act in a way that would signal to a third party that this was their land. Even if its seasonal, it may still be enough to send the signal Seasonal use of tracts of land sufficient in this caseContinuity of occupation where present occupation is relied on Exclusive historic occupation Justification of Infringement TEST: To justify overriding the Aboriginal title-holding group’s wishes on the basis of the broader public good, the government must show: (1) that it discharged its procedural duty to consult and accommodate (2) that its actions were backed by a compelling and substantial objective The compelling and substantial objective of the government must be considered from the Aboriginal perspective as well as from the perspective of the broader public. the broader public goal asserted by the government must further the goal of reconciliation, having regard to both the Aboriginal interest and the broader public objective. (3) that the government action is consistent with the Crown’s fiduciary obligation to the group The Crown’s underlying title in the land is held for the benefit of the Aboriginal group and constrained by the Crown’s fiduciary or trust obligation to the group which impacts the justification process in two ways: (1) the Crown’s fiduciary duty means that the government MUST ACT IN A WAY THAT RESPECTS the fact that Aboriginal title is a GROUP INTEREST that inheres in present and future and generations. (2) the Crown’s fiduciary duty infuses an OBLIGATION OF PROPORTIONALITY into the justification process. Remedies and Transition: Once title is established, it may be necessary for the Crown to reassess prior conduct in light of the new reality in order to faithfully discharge its fiduciary duty to the title-holding group going forward. Different standard applies before and after a declarationBEFORE DECLARATION of title there is a duty to consult and accommodate. AFTER A DECLARATION of title does the justification test have to be met. More of a policy-based decision regarding the remedy. What happens if the Crown granted fee simple in the past to a private party, and then an Aboriginal title is claimed? Can you say they operate simultaneously? No, they are inconsistent. Could say when the Crown granted that title to settlers, it gave something it did not have. Lavoie Key Ideas re Tsilhqot’n caseRejection of site-specific approachNew explanations for inherent limit on use and alienation restraintsThe court says it is about ensuring future generations are not deprived of the benefit of landBy-product of alienation restraints is the in excess of credit. Ie building and renovating homes/ mortgages… and land mortgages can be used as credit to start a business. Mortgages would not be possible due to the laws surrounding alienation. The bank could not come in and claim a lien on a house for a mortgageAlien restraints are a restriction but also are supported by indigenous people to maintain continuous community and to not risk losing their land.Implications of a declaration of aboriginal title for past crown actions Declaration – idea is that title is not just for current generation but for future and to not encumber the land in a way to disallow future generation the benefit of use of land The implications of a declaration of aboriginal title – in particular what you do with past decision by the crown that it is crown land. Authorizing things such as logging – but there is aboriginal title. What do you do with past decisions?Are those past decisions automatically invalid? – no. past decisions are not automatically invalid. The approach is largely though not entirely prospective approach. From today this is Tslihqot’n land – and at the time of the decisions - it was not a proven right that it was Indigenous land. Crown was able to make decisions on the land subject to consult until the time the title interests are determined.Once title is established the crown needs to revisit past ideas ie project started but not competed – may need to be assessed to discharge a fiduciary responsibilityAboriginal Land TenureAboriginal title = common law interest in land that received constitutional protection 1982Tenure under Statutory RegimesIndian Act → default regimeFirst enacted by fed parliament in late 19th centuryIt established a one size fits all government regime and land tenure regime for all first nationsThe system of gov set up is based on elected council and band members; authority is band council on the lands?Alienation restraints only surrendered to crownEstablished comprehensive mechanisms for oversight?Came to provide for land interest for individualsRight of possession under a certificate of possession - that grants that individual exclusive right of use of a particular part of the reserveCertificate possession is enforceable against the band council Reforming it is no easy task: in part because it has been in place for so long; reliance interest on the land tenure?Idea of unilateral removal would cause the problem of a colonialism 2.0; replacing one with another.Thus you get various mechanism to opt out of different aspects of the Indian act as a reform methodFirst Nations Land Management Act - mechanism to opt out of Indian act regimeMeans to opt out of the Indian act land tenure regimeMuch more autonomy to First nations to enact their own land code;??There are several first nations who adopted their own code under this act?Eg Lheidl T’Enneh Band Land CodeMetis Settlements Act (AB) Land claims treaty with the gov or self-government agreement (fed gov recognizes a broad regime of self-government)Tenure under Modern Treaties & Self-Government Agreements?i.e. Nisga’a Final Agreement provides for fee simple interest in and under Nisga’a jurisdiction.Customary interests in land within particular Indigenous communities.Indian Act Land tenure1. (a) Which party/parties need(s) to issue or approve a grant to an individual of a right of possession in reserve land? Minister and Band Council 20(1) Band council issues certificate of possession Approval by minster required (s.20(1))(b) What is the name of the document that provides evidence of that grant? Certificate of Possession (5) – most robust form of individual property interest one has in reserve land. It is perpetual and gives full right to use of possession. Not as strong as fee simple however. 2. To which parties can an individual right of possession be transferred? To the band or another member of the band (24). only can be held by a registered member idea being that it is a mechanism that allows aboriginal land tenure but avoid non-members to hold an interest3. Which party/parties must approve a transfer of possession? Minister must approve it (s.24) – Oversight rule, where there is a discretionary power held by the minister. 4. Can a band council or a band member with a right of possession unilaterally SELL reserve lands? No 28(1) – void to go outside of the band (continues the policy that goes back to the Royal Proclamation and alienation). Restraint on alienation5. Can a ban council or band member with a right of possession unilaterally LEASE out reserve lands? No section 28(2) outlines that minsters approval is necessary and there is a specific mechanism6. What must a band first do before land can be sold or leased (for more than one year) to a private property? Must be a decision made to surrender the land to Her Majesty (s.38(1)), conditionally or unconditionally (absolute surrender), and then the crown determinesNeed the crown as an intermediary in transactions between parties. Part of what gives rise to the fiduciary responsibility by the crown.7. How are entitlements under the Indian Act similar to, or different from? a. The rights of fee simple owner; Similarities – Crown holds underlying title, right to exclusive use and possession; perpetual interest; enforceable in outside courtsDifferences – restriction on alienation (outsiders and members), approval of Minister, if fee simple owned outside of reserve there is no oversight body that has discretionary power to decline transaction, reserve land has constitutional protection (assuming protected via treaty). b. Entitlements arising under the common law of Aboriginal law? Similarities – Crown holds underlying title, must be surrendered to Crown before sale; collective ownershipDifferences – possible for reserve land to be held individually, oversight role of the Minister – not clear if these would apply on Aboriginal Title lands. First Nations Land Management Act One of the mechanisms that Indians can use to opt-out of the one-size fits all land regime under the Indian Act. 1. Who holds title to land in a First Nation that adopts a custom land code? Crown – but set aside for the use and benefit of the First Nation. The way the land is administered is now up to the land code enacted by the community. Reserve land continues to be Crown land set aside for the use and benefit of the First nation (s.5(a))2. Can a First Nation provide for individually held fee simple titles under a custom land code? No (ss.5(a) & 26(1))Nisga’a would not apply here – different type of agreement made with the Crown. It did not fall under the FNLMA. 3. What types of individual interests can a First Nation provide for under a custom land code? Land Code can provide for all kinds of lesser interests, but not full fee simple title. Nevertheless, can have leasehold interests, certificates of possession (member possessory interest), etc. that are perpetual rights of possession. Subject to the restrictions above, there is a wide range of possibilities4. What restrictions apply to the transfer of individual interests provided for under a custom land code? The minister has to enter into an agreement to create the landcode, but after that they land code governs it.It is up to whatever is in the land code…Though arguably not possible to create a perpetual possessory interest freely alienable to non-member, akin to fee simpleFirst Nation has power to make their own laws, and their own differences based on their own custom etc. The band council or First Nation institution approves the changes, not the minister. 5. What is the role of the Minister in the administration of a custom land code? Generally quite limited, primarily governed by local First Nations institutions.The minister has to enter into an agreement with the FN to set up the land code, but after that the minsters role largely ends (s.18(1)) Formal Indigenous Law Today: Lheidli T’enneh Band Land Code34.3 A person who is not a member shall not be allocated a lot or hold a permanent interest in First Nation Land35.1 A member may transfer or assign an interest in First Nation land to another Member without the need for community approval or the consent of the Council 35.2 Except for transfers under section 35.1 and transfers that occur by operation of Law, including transfers of estates by testamentary disposition or in accordance with a law enacted pursuant to section 39: (a) there shall be no transfer or assignment of an interest in land without the written consent of Council; and (b) the grant of an interest or license is deemed to include s. 35.2(a) as a condition of any subsequent transfer or assignment S Graben, Lessons for indigenous property reform: from membership to ownership on Nisga’a LandsPursuant to the Nisga’a Final Agreemet (NFA), it is now possible for the Nisga’a to sell, lease, mortgage and encumber all Aboriginal title lands demarcated in the NFA special agreement with the Crown. Nisga’a had conferred the power to obtain small parcels of residential lands in fee simple on individual Nisga’a citizens. While the NFA grants title to the Nisga’a Nation, it is the Nisga’a Village Government that hold and dispose of fee simple title to individuals. What is unique to the operation of the Nisga’a entitle, as compared to the certificate of possession on reserves, is that individuals and the Nisga’a Nation have the opportunity to convert their entitlement into individuated title in fee simple. Subject to section 4, if(a) a Nisga’a Village is registered as the owner of the estate in fee simple to a parcel of Nisga’a lands, and (b) a Nisga’a citizen is registered as the holder of an entitlement to the parcel The Nisga’a Village Government of the Nisga’a Village may, by adopting a resolution in the prescribed form, offer the estate in fee simple to the parcel to the Nisga’a citizen, without charge to the Nisga’a citizen. Despite the fact that it provides for fee simple titles that could be transferred to non-title members, the jurisdiction is not affected, if it gets sold to a non-member it is still under Nisga’a jurisdiction, whoever moves there has to follow Nisga’a governance jurisdiction.This differs from reserve land once it is surrendered. Once reserve land is surrendered, the First Nation jurisdiction no longer holds any type of governing power. Nisga’a reforms reflect de Soto’s crucial recommendation to control and plan for economic and social development through certainty. The adoption of the fee simple estate, the allocation of small parcels of land, and the institution of land registries mirror de Soto’s policy prescriptions for obtaining clear title. Ultimately, understanding the goals of the Nisga’a in adopting fee simple title requires recognition of the power vested in owners of private property. Certainty for individual Nisga’a citizens should therefore be identified as part of a process of empowerment and control. Nisga’a Nation Land tenureFinal Agreement between the crown and nisaga Nation (NN)NN agreed not to assert Aboriginal rights and titleCrown insist on this because they want to create greater legal certainty; there is a fair bit of uncertainty for where FN can assert Aboriginal title and what AT brings with it so this creates greater legal certainty which is advantageous as it could create opportunity as well as allow for FN to make decisions with a wealth of knowledgeThe crown recognized nisga’a ownership of a fee simple interest in land within defined boundaries (=2,00 square km)The crown recognized proprietary interests?The crown also recognized significant Nisga’a self-gov powers on Nisga’a land?Using its self-government powers, the NN has enacted legislation creating a process whereby individual members can receive title to parcels of land in fee simpleWhat that meant that an individual member with fee simple would no longer be subject to the restraints of alienation?Using capital value of land to get alonea relatively free hand in mortgaging the land and also in principle the fee simple title holder to sell the land to whoever - member or not?Pursuant to the Nisga’a Final Agreement, it is now possible for the Nisga’a to sell, lease, mortgage and encumber all Aboriginal title lands demarcated in the NFA special agreement with the Crown.?Fee simple title holder to sell land to whomever they wanted including non-member; Fee simple parcels can be mortgages or sold to non-members, but NN jurisdiction is maintained over a parcel of land even if a non-member comes to hold a fee simple interest in itDifferent then Indian Act Despite the fact that NFA provides for fee simple titles that could be transferred to non-title members, the jurisdiction is not affected, if it gets sold to a non-member it is still under Nisga’a jurisdiction, whoever moves there has to follow Nisga’a governance jurisdiction.This differs from reserve land as under said act required to sell to crown first . Once reserve land is surrendered, the First Nation jurisdiction no longer holds any type of governing power.Nisga has expropriation powerOne of the things diff and controversial – there is no guarantee that that person could become a member of the nisga nation. Acquiring land in the nisga nation does not give you that right on nisga land. – unusual from the Canadian legal system.Advantages to Alienable Fee Simple Land: Access to capital – can mortgage fee simple interests etc. increase capital market as non-Indigenous communities. (ie can get a mtg). having alienable rights create prosperity and mechanisms to do so. Level of certainty – detailed provisions that clarify the singular methods for establishing ownership reflect concrete attempts to remove insecurity around past claims or entitlements. Defined land interests with reference to common law. The benefit of being well defined via land title registries (Torrens style registry). Standardization – set up regimes similar to elsewhere incur fewer costs. Utility – economic efficiency. Enhance prosperity of the community Autonomy – respect of interests of fee simple holder – direct course of one’s own life. Power to the individual. Greater degree of individual freedom. If you have an interest in land and the ability to sell it. You have choice.. ie move away, renovate, start a business. “author to ones own lifeDownside to Nisga’a Approach: Deep connection with the land may be undermined if it is held by a non-member. Loss of collective autonomy as a result of losing control People outside the nation can make rules about what goes on in even though they are not a residentJudgment can be enforced against property – can lose fee simple interest (debt collection etc.)Governance jurisdiction is constrained by the market. Community may have to conform to attact outside investment. Possible of losing defacto control – have to conformCHAPTER 6 – THE ORIGINS AND NATURE OF EQUITABLE INTERESTSHistory (Class Notes): Origins: courts of common law & courts of chancery Developed equity on basis of chancery discretionary to remedyCommon law courts set up by the king and adhered strongly to criteria for the writs, People could appeal to the king if they felt they were wronged in the courts. Therefore, the king began to direct these claims to the lord chancellor to be known as the court of chancery where court used discretionary powerequity courts were there to right the wrongs when common law courts sometimes rendered unconscionable decisions.Based on court of chanceryMain way the court of equity was used was for land tenure There were obligations attached to holding lands under feudalism, primary rule was that land was given down to the first son (primogeniture) led to the arise of “USES”Emergence of USE: The main mechanism that arose to combat feudal obligations The party gets to enjoy the use of the land is my son (beneficiary, cestui que use) – idea was that the son would get to use land for whatever purposes he wanted. When the father died there wouldn’t be an issue of transferring the land to the son (feoffee). Avoiding feudal obligations depended on you giving title to the land to someone other than who you wanted to use the land. Didn’t want land to be inherited because then the land would be subjected to feudal obligations, so instead they would assign a separate feoffee to avoid inheritance by death and give the beneficial interest to the son who didn’t actually have the legal title and they couldn’t use the common law courts to enforce their rights turned to courts of equity. Cestui Que Use – son who had right to use and benefit of land according to initial grant Example:To A and his heirs to the use of B and his heirsYou would have a situation where A holds land of the king. B is A’s heir, and B does not want a situation where he has to pay the king. So to solve the issue A is going to transfer title to C,D,E and say they are holding title of use to BHold to the benefit of B?A way to get around owing monetary payments to the kingProblem: A turn land over to C,D,E with intention they are not the real owner but they hold title (on paper) who own the land and if C,D,E decide they don’t want to recognize A&B rights. B could go to the courts where the courts are going to say there is no writ for that and they recognize the party who is owner at law (those who hold title on paper)Response: You end up with a situation of perceived injustice so you get this appeal to the chancellor from the common law → showing you were to have the land to benefit and the chancellor (court of equity)? discretionary power to do justice could step in and hold up the initial promise despite the court of law saying no. Origins of Equity – P Butt, Land LawFaced with the rigidity of the common law, the landowner turned to the “USE”. The basis of this institution was the transfer of property to a trusted friend, who was to hold it not for personal benefit but for the purpose of carrying out the transferor’s instructions. The person to whom the land was transferred for this purpose was the “FEOFEE TO USES”. The person for whose benefit the land was conveyed – the beneficiary – was the CESTUI QUE USE. Three advantages of conveying land to uses: (1) Feudal burdens would be evaded – land would be conveyed to two or more joint feoffees in fee simple “to the use of” the grantor. The feoffees thus became the legal owners of the fee simple, and they alone were subject to the tenurial incidents. (2) Uses could be disposed of by will. A landowner could convey land to feoffees to hold to the uses declared in the conveyer’s will. This bypassed the common law prohibition against devices of land. The feoffees held the land to the conveyer’s use until the conveyor died, and thereafter to the uses declared by the conveyer’s will. (3) Uses provided a means of overcoming many of the rigid rules of common law conveyancing. King was the party who was facing the brunt of this tax evading system – tried to implement STATUTE OF USES. The Court of Chancery and Use (p.463)In 15th century the chancellor came to base his intervention on the premise that the feoffees consciences bound them to observe the terms of use – it was regarded as wrong, though not illegal, for the feooffees to disregards the terms of use. The chancellor aware that the beneficiary did not have tittle, rather feoffee did, AND COMPELLED THE FEOFFEE TO EXERCISE THEIR LEGAL RIGHTS CONSISTENTLY WITH THE TERMS OF USEIn time, THE CHANCELLOR CAME TO ENFORCE THE BENEFICIAL INTEREST not merely against the original feoffees, but AGAINST ALL WHO ACQUIRED INTERESTS IN THE LAND IN SUCH A WAY THAT IN CONSCIENCE THEY WOULD NOT DISREGARD THE INTERESTS. For example, the use bound a person who received the land as a gift; this included heirs or devisees of a sole remaining feoffee. In conscience, a donee could not claim a greater interest than that of the donor. The use bound even a purchaser for value from the feoofees, if at the time of the purchase, the purchaser knew or ought to have known of the existence of use, for to purchase with notice that the feooffees were selling in breach of the beneficiary’s interest was to be a party to the breach. A purchaser’s conscience was not bound if he or she acted honestly and without knowing of the beneficiary’s interest; and so here the purchaser was allowed to disregard the beneficiary’s claims. In this lay the origin of the modern doctrine of “notice”. Doctrine of notice ensures that a beneficial interest affecting the legal ownership of land binds all who come to the land, except those who are bona fide purchasers for value of a legal interest in the land without notice of the beneficial interest. basically it is a principle of equity which says??that when a person takes an estate with notice that someone else had a claim on it at the time of the transfer that claim may still be asserted against the new owner even if it might have been disregarded at law ESSENTIALLY IF THE 3RD?PARTY HAD NOTICE THAT THE TRUSTEE OR FEOFFEE WAS SELLING THIS LAND BUT HAD A BENEFICIARY WITH AN EQUITABLE INTEREST, THE BENEFICIARY COULD HAVE A CLAIM RECOGNIZED?Once the interest of the cestui que use came to be enforceable against third parties in this way, it had acquired the characteristics of a proprietary interest. The juridical basis of the Chancellor’s intervention remained unchanged: what was bound was the conscience of the person into whose hands the legal estate fell, not the land or the estate itself hence, the maxim “equity acts in personam”The Statute of Uses (1535)Dues were owed to overlords at the time when the estate was inherited. Splitting the legal title from the equitable title was cutting into the Kings bottom line. Implemented the statute of uses in response: aimed to prevent the division of legal and equitable title to real propertyStatute said that if one tried to transfer land by way of uses the law will step in and convey the legal title to the party who had the land to use (beneficiary) Where a freehold interest in land was granted to one party “to the use of “another, the statute causes the legal title to be automatically executed to the later party returning legal and equitable title Was an attempt to frustrate those who were trying to split the legal and equitable title It only ever applied to interests in land, not chattels. Statute did not put an end to this Ways were found to get around it.To __ and heirs to the use of ___ and heirs to use of ___Statute only execute first use Examples of Grants: To A and his heirs to the use of B and his heirs Before Statute of Uses – A had legal right and B had the use and benefit (equitable of right) Statute of Uses – A gets nothing, B ended up with both legal and equitable title Idea was to avoid separating the titles. To A and his heirs to the use of B and his heirs to the use of C and his heirsBefore Statute of Uses - Initial grant would give initial legal title to A and equitable title to B and the additional grant would be seen as repugnantStatute of Uses – would bring legal and equitable title to hands of B and recognize the subsequent grant of CA gets nothing, B has legal title, and C has equitable title (statute only executed first use).Way of achieving a split between legal and equitable title Getting around the Statute of Uses either by using corporation or use upon use. A number of mechanisms arose for circumventing the statute, including the “use upon use”“unto and to the use of _A_ in trust for _B_” OR “To_A_ unto and to use of _A_ to use of _B_”Where a grant contained two separate deeds to use, the statute was held to execute only the first one Through careful conveyancing parties could still divide legal and equitable tittle Example of Use Upon a Use: To A and his heirs to the use of A and his heirs to the use of B and his heirsShorthand: Unto and to the use of A (and his heirs) in trust for B (and his heirs) Aim of the statute of uses was disarmingly simple: to divest the legal estate from the feoffee to uses and vest it in the cestui que use “where any person is seised of any lands to the use, confidence or trust of any other person or corporation, the latter person or corporation shall be deemed in lawful seisin, estate and possession of the lands for the same estate as he or it had in the use, confidence or trust”. Purpose was not to abolish uses, but to stifle their employment as a revenue-defeating device. Operation of usesAssume a conveyance of land to a feoffee to uses (F) to the use of a cestui que use (A). The conveyance would take the following form: To F and his heirs to the use of A and his heirs. The words “and his heirs” – known technically as “words of limitation” – ensured that a fee simple interest was conferred, not a lesser interest such as a life estate or an estate tail. The common law might regard one person as the holder of legal title, while equity will enforce a beneficial (equitable) entitlement held by someone else. When this occurs, the general rule is that the equitable right will trump. EXAMPLE ON P. 469 Resulting UsesIs a reversion – See page 465The remnant of the equitable estate – the reversion in fee simple – stays vested in the conveyor: there is a resulting use of this reversionary interest. cuts out the feoffeeActive UsesStatute of uses did not execute active uses, that is, uses where the feoffee had active duties to performThe feeoffee is not cut out see page 466EquityEquitable Property InterestsProcedural fusion of courts of law and equity in the 1870s but not complete substantive fusion → equity lives on?Equity prevails over law in the event of a conflict (Judicature Act, s15)Where there is an inconsistency equitable prevails but there is the maximum that equity follows the law?It is not meant to be inconsistent?Equitable estates in land mirror the common law estatesSection 7 law property act would apply: 1) legal fee simple 2) legal life estate, 3) equitable fee simple, 4) equitable life estate?ExamplesUnto and to the use of A in trust for BA would have legal fee simple interestB would have equitable fee simple?Unto and to the use of A in trust for B for life with the remainder in trust to C in fee simple?A would have a legal fee simple interestB would have equitable life estateC would have equitable fee simple in remainderNote: In trust for = creation of an equitable interest?Equitable remedies are discretionary?The origins of equity were in the discretionary power of the chancellor to do justice in a particular case (do what good conscious requires). Over time that power crystalized in predictable ways that could be exercised (principles and precedents emerged in guiding the discretion). But it is still the case the exercise of equitable jurisdiction is always discretionary?At common law if you establish cause of action you have a right to a remedy but not in equitable remedies; it is always discretionary despite law saying typically it occursModern equityEquity has traditionally been regarded as discretionary, though some areas have crystallized into rules that are seldom derogated (detracted) from common lawEquitable discretion is guided by the maxims of equity Equitable Maxims: Equity follows the lawThe idea where possible principles of equity are developed in a manner consistent with the lawClean hands One maxim of equity is that those seeking equity must come with clean hands. This may prevent a party who has acted wrongfully in relation to the transaction from benefiting from equity Discretionary power of the court to decline to grant a remedy to those who acted in a manner not reasonableEquity acts in personam In personam rights apply between particular parties We don’t mean that there aren’t any equity acts in rem, however what we are saying is that equity acts on the conscience of an equitable person. It does not rule out rights applicable against 3rd parties (i.e. in rem rights)Good faith purchaser for value without noticeExample: A holds legal title, B has equitable title. A enters into transaction with C where C agrees to buy the assets in question. Question is whether C only gets the legal title or does C also get the equitable title? If C is a good faith purchaser for value without notice (without knowing the different interests in the property), a truly innocent party who incurred a detriment and purchased from the trustee, equity won’t hold C in breach, but B (beneficiary) can hold A liable for breaking fiduciary duty.If C wasn’t innocent, then C’s title is subject to B’s interest, or if C ought to have known and failed to make inquiries he should have made, then B’s beneficial title is good against C (C becomes a trustee- only acquires what A had has a legal title) Stems from the idea that equity acts on the conscience of a party. Equity acts in rem to third parties (i.e. C in this case). TrustsThe modern trust (settlor, trustee and beneficiary) The trust, a creature of equity, recognizes and enforces a separation of legal ownership from beneficial (equitable) ownership.EXPRESS TRUSTCreated by an explicit/expressed declaration (in grant or will) that the holder of the legal title to property holds the property for the benefit of another.The terms of an express rust can be tailored based on the intentions of the settlor, within certain limits Most basic, where a grant sets out intent Settlor – the party that sets out to create the trust; the initial owner who owns the interest and has the initial interest to create a trust Trustee – the party who comes to own the legal title; holds the legal titleTrustee is under fiduciary duty for beneficiaryAny powers of the trustee must be exercised in accordance with the trustee’s fiduciary duty to act in best interest of beneficiary may hold legal title but the property is held for the use and benefit of beneficiaryMay or may not have active duties to manage the property for beneficiaryBeneficiary – the party who comes to own the equitable title; gets the benefit and use of the title (equitable title) It is possible for the same party to occupy more than one of these roles– do not need to have 3 separate peopleCould have a settlor who is the same trusteeSettlor can create the trust, but he/she can also be the beneficiary or the trustee. 148145514684749771215543000Trustee49973016377100Settlor Beneficiary Malleability of a trust: different specifications you can makeyou can give the trustee lots of the power with those powers for the benefit of beneficiary or limited powers for no benefit of beneficiary more controlDifferent reasons for setting up trusts:Common example is to provide for minor children but not necessarily want to give a bunch of money without restrictions so might create a trust to hold the money in the benefit for the child Might create a will and not want to give bunch of money to a young adult so you hold some monies in trust Have family assets and want to keep in family you may put in trustPotential option for managing business operationsInvestment purposes Evading taxesLand conservation trusts – specific provisions to prevent land from being developedRESULTING TRUSTSArise when the title holder acquired the property, or the means to acquire the property, in circumstances in which equity presumes that the parties intended that the title holder hold the property wholly or in part in trust for the benefit of another (beneficiary). Refers to instances where there are no express terms setting up a trust – implied trust; implied intent creating a presumption bringing arise to an interestTwo Instances of Resulting: (1) Incomplete grant of equitable interest Where an equitable entitlement is not fully disposed of, there is presumed to be a RESULTING TRUST BACK TO ORIGINAL SETTLOR of the remaining equitable interest (equitable fee); can be rebutted if you make it clear in the grant. Example“From A unto and to the use of B in fee simple in trust for the life of C” presumption is that if you have provided in an incomplete way for the allocation of equitable interest, therefore there is a presumed reversion to A (equitable reversion)A: Equitable reversion in fee simple through a resulting trust (presumption, absent any explicit statement) B: Legal fee simple C: Equitable life estate (2) Gratuitous Transfer There is a presumption of a RESULTING TRUST BACK TO THE ORIGINAL OWNER UNLESS AN INTENTION OF A GIFT can be affirmatively establishedIf you buy something and put someone else on the title, or give title to someone else for free, there is a presumption you retain equitable title and the person you give title is merely a trustee. ExampleWhere property is purchased by A for B, or where property is transferred by A to B for no consideration, B’s title is presumed to be held under a resulting trust in favour of A. A: Equitable reversion in fee simple through a resulting trust (presumption, absent any explicit statement) B: Legal fee simple Presumption of Advancement the presumption of an advancement reverses the presumption of a resulting trust (gratuitous transfer) with respect to transfers between certain types of parties (minor children). In such cases TRANSFERS ARE PRESUMED TO BE GIFTS.Presumption that equitable title is presumed to pass with legal titleHistorically there was a presumption of advancement with respect to transfers from husband to wife, but this has now been questioned by the SCC (Rawluk v Rawluk)The rule has been repealed by statute in AB Section 36 of Matrimonial Property Act negates presumption of advancement between spouses, before or after marriage and adult independent partnersThe presumption of advancement today still applies to transfers from parent to a minor child but not to an adult child (even a dependent adult child) (Pecore v Pecore)Factors include (i) closeness of relationship, (ii) support for claim of intention to gift, etc. NOTE: gifts to dependent adult children can still occur as long as you rebut the presumption of resulting trustPecore v Pecore, 2007 SCCPresumption of advancement or presumption of resulting trust? FACTS: Edwin Hughes – retired miner who was careful with his money and managed to accumulate assets worth approximately $1.2M. In 1994 Hughes began transferring these assets into accounts held jointly with his daughter Paula. In 1996, concerned that the transfers might attract capital gains tax liability, Hughes wrote letters to the financial institutions holding the accounts in which he declared he was the “100% owner of the assets and the funds are not being gifted to Paula”. Hughes continued to control the accounts and pay all of the taxes on them. Hughes’ final will, executed in 1998, named Paula his executor. Hughes left specific bequests to Paula’s husband, Michael, including his coin and stamp collection, but he left most of his estate to Paula. The residue of the estate (assets remaining in the estate after debts were paid and specific bequests distributed) was to be divided equally between Paula and Michael. Hughes died in 1999 and Paula did not turn the joint account over to the estate. Michael filed for a divorce in 2001 and his application, he claimed half of the value of the accounts that Paula held jointly with her father. Michael argued that they became part of the residue of Hughes’ estate, to be divided equally as per Hughes’ will. Paula resisted the claim and argued that the account became hers entirely on the death of her father, by the right of survivorship.ISSUE: Whether Hughes intended to make a gift of beneficial interest in the accounts upon his death to his daughter alone or whether he intended that his daughter hold the assets in the accounts in trust for the benefit of his estate to be distributed according to his will. The focus in any dispute over a gratuitous transfer is the actual intention of the transferor at the time of the transfer, intention if often difficult to ascertain, especially where the transferor is deceased. Common law rules have developed to guide a court’s inquiry. The appeal raises the following issues: (1) Do the presumptions of resulting trust and advancement continue to apply in modern times? (2) If so, on what standard will the presumption be rebutted? (3) How should courts treat survivorship in the context of a joint account? (4) What evidence may courts consider in determining the intent of a transferor? PROCEDURAL HISTORY: Trial Judge – found that Hughes actually intended a gift and held that his daughter may retain the assets in the accounts. Court of Appeal – dismissed the appeal of the daughter’s ex-husband SCC – Appeal dismissed REASONS:Referred to using the common law – advantage of maintaining the presumption of advancement and the presumption of a resulting trust is that they provide a measure of certainty and predictability for individuals who put property in joint accounts or make other gratuitous transfers. THE PRESUMPTION OF RESULTING TRUST IS THE GENERAL RULE FOR GRATUITOUS TRANSFER. Depending on relationship, presumption of advancement may apply and is applied in two situations: (1) TRANSFEROR IS A HUSBAND AND THE TRANSFEREE IS HIS WIFE (Not the case in AB)(2) WHERE THE TRANSFEROR IS A FATHER AND THE TRANSFEREE IS HIS MINOR CHILD Finding that a gratuitous transfer from parent to child should be preserved but be limited in application to transfers by mothers and fathers to minor children; however, this is an adult child – so what category do we use? Rosthein J says it is difficult to define dependency due to uncertainty and unpredictability therefore presumption of advancement cannot apply in this case. However, presumption of resulting trust means that it will fall to the surviving joint account holder to prove that the transferor intended to gift the right of survivorship to whatever assets are left in the account to the survivor. Paula and her family relied on her father for financial assistance. Even though he maintained control of the funds during his life, the trial judge found his concern lay with providing for Paula after his death which is consistent with an intention to gift a right of survivorship when the accounts were set up. Hughes’ statements also showed intention. Constructive TrustsMay be recognized by law in categories of cases in which good conscience requires it, regardless of implied or expressed intentions of partiesNothing to do with intentions unlike express and resulting trustsCourt allocating property interest in a way to ENSURE JUSTICE BETWEEN PARTIESTwo Types of Constructive Trusts (nothing to do with intention):(1) Remedial Constructive Trust(2) Institutional Constructive Trust(1) Remedial Constructive TrustsUsed to provide a remedy in situations in which a title holder of the property would be unjustly enriched unless equity compelled him or her to share the property with someone who contributed to acquiring or improving the property.Used most commonly in disputes about entitlement to property acquired during the course of an intimate partnership, when title to that property is held by only one of the partners. EXAM: IF INTIMATE RELAIONSHIP = REMEDIAL CONSTRUCTTIVE TRUST Establish unjust enrichment and a deprivationUnjust enrichment Elements of a claim in unjust enrichment:1. An enrichment of the defendant by the plaintiff?Must show that he or she gave something to the defendant which the defendant received and retained.Must be a benefit that which has enriched the defendant, and which can be restored to the plaintiff in specie or by money.Benefit must be tangible?2. A corresponding deprivation of the plaintiff Plaintiff’s loss of material only if the defendant has gained a benefit or been enriched3. Absence of a juristic reason for the enrichment There is no reason in law or justice for the defendant’s retention of the benefit conferred by the plaintiff, making is retention unjust in the circumstanceCategories of unjust enrichment1. Mistake in payment - generally no existing contract, not really a trust either, there is not a wrong to a legal rightPaid under the mistaken belief you owe someone money2. Family contextUnjust enrichment Remedy?Restitutionary in nature – may be by either a personal restitutionary award or a restitutionary proprietary reward.???(1) Monetary Award (based on value received or value survived)Obligation to pay the other a certain amount. Difficult to determine what will constitute adequate compensation.Must be invariably calculated on the basis of the monetary value of the unpaid services.Two ways to calculate monetary award in these cases: (1) Value Received – whatever the value of what the defendant actually received (i.e. household chores) (2) Value Survived – whatever is the discrepancy between the assets accumulated and allocate based on whatever the sides of the parties deserve – not monetary value of services, but portion of overall assetsCertain category of relationship where this approach is most applicable – joint family ventures – cases where they are both engaged in activities linked to the generation of wealth. Four Factors: (1) Mutual Effort – pooling effort, team work, child raising, division of labour in the household (2) Economic Integration – sharing expenses (3) Actual Intent is Relative – they did not intend to maintain economic division, infer intent by circumstances (4) Detrimental Reliance – one gave up something because of the reliance of the other(2) Proprietary (ownership) AwardConstructive trust in a specific piece of property – equitable property interest in specific assetConstructive trust is available as a remedy for unjust enrichments where: 1) a monetary remedy would be inadequate in the circumstances and 2) there is a sufficiently direct and substantial connection between the plaintiff’s contribution and property?Must prove a link or causal connection between his or her contributions and the acquisition, preservation, maintenance or improvement of the disputed property.Under What Circumstances is a Constructive Trust More Appropriated than a Monetary Award? (1) A sufficiently and substantial direct connection to the specific property in question. (2) Monetary award has to be inadequate (i.e. sentimental attachment to the property).Why might monetary be inadequate? Personal connection to the thing in question Insolvency – no guarantee money will be paid if there is pre-existing debt If probability of recovery is low for monetary award, then you might end up with a situation where you get their proprietary interest in some asset instead – these trump other creditors if the defendant has debt issues whereby you might not get everything you are owed because of the competing interests from the creditors of the defendant. Cromwell J states that a monetary award does not have to be based on a fee for service basis but on a proportional allocation of assets basisMoore v SweetLawrence and Michelle married. Get divorced but entered into an agreement where she pays the premiums and he will keep her as beneficiaryLawrence changes beneficiary to his new common law partner Risa. Michelle is not made aware and keeps paying the policy – upholds her end of the bargain with the mistaken belief she is still beneficiary.Lawrence dies she becomes aware of the beneficiary change. Insurance fund paid into the court until resolved Q: why not breach of contract claim? In principle could sue. Because the estate does not have the 250k of the insurance policy so has to bring the claim somewhere else. Which is against risa the new beneficiaryTherefore cannot be a breach of contract, and not a tort bc risa did not do anything to michelle. That leaves… Unjust enrichmentMichelle proceeds with an unjust enrichment claimMichelle then advances an unjust enrichment claim without juristic reasonProcedural historyAt trial held that the real owner of the equitable interest is michelle Equitable interest is above the lawCourt of appeal overturns stating no, and Michelle only should get the amount of the 7k in premiums for 3 years. (time between divorce and death)Argument that Risa is being enriched. But the contentious question is if there is a corresponding deprivation to Michelle..Court finds a corresponding deprivation. Michelles failure to receive it is bc Risa was stated to get it. Main juristic reason: the insurance act stating it goes to the beneficiary.The juristic reason has to explain both sides of the coin. So why one was enriched and why the other was deprived. It explains why Risa got the money but not why michelle didn’t. So in this case the act states why risa should get it, but it does not mean it should stay with her due to other obligations or contractual provisionsIn this case the court says that paying the money to risa then to michelle is more complicated and risks michelle not getting her money therefore a REMEDIAL CONSTRUCTIVE TRUST IS AN EASIER REMEDY.(2) Institutional Constructive TrustsImposed in circumstances in which a person has acquired property for his or her own benefit, at the expense of another to whom the person owes a fiduciary duty (to act in the best interact of another)There is no need for a plaintiff to establish a pecuniary (monetary) loss in order to have an institutional constructive trust recognized (Soulos)It is not necessary for there to be a deprivation (do not need a loss in this kind of case)4 pre-req’s for an institutional constructive trust based on wrongful conduct (p.515)(soulous) (1) Defendant must have been under an equitable (fair) obligation(2) Assets in the hands of the defendant must be shown to have resulted from deemed or actual agency activities of the defendant in breach of his equitable obligation to the plaintiff(3) Plaintiff must show a legitimate reason for seeking a proprietary remedy, either personal or related to the need to ensure that others like the defendant remain faithful to their duties?(4) Must be no factors which would render imposition of a constructive trust unjust in all the circumstances of the case i.e. the interests of intervening creditors must be protected. Soulos v KorkontzilasCourt must determine whether a real estate agent who buys himself property for which he has been negotiating on behalf of a client, may be required to return the property to his client despite the fact that the client can show no loss.FACTSK was real estate broker, S was his client. Through K, S made an offer of $250,000 to purchase a building. Vendor made a counteroffer, asking for $25,000 more. S countered with a price that the vendor was willing to accept, but K did not tell S. Instead, K’s wife bought it in her name and then transferred title to herself and her husband as joint tenants. PROCEDRUAL HISTORY Trial and Appeal – K breached fiduciary duty to S. Unjust enrichment did not occur here – K was actually worse off because the property went down in value after this dispute. Damages not applicable – measured according to injury, not technical injury suffered. Fair to say broker did something wrong, but measuring injury in financial terms, there is a negative injury. ISSUE – Whether a constructive trust over property may be imposed in the absence of enrichment of the defendant and corresponding deprivation of the plaintiff. What remedy, if any, does the law afford S for K’s breach of the duty of loyalty in acquiring the property in question for himself rather than passing the vendor’s statement of price to S? Two views in this case: (1) Sees the constructive trust exclusively as a remedy for clearly established loss. On this view, a constructive trust can arise only where there has been an enrichment of the defendant and corresponding deprivation of the plaintiff. (2) Construct trust may apply absent an established loss to condemn a wrongful act and maintain the integrity of the relationships of trust which underlie many of our industries and institutions (Deterrence). SCC finds the second view more compelling. It suggests that the constructive trust is an ancient and eclectic institution imposed by law not only to remedy unjust enrichment, but to hold person in different situations to high standards of trust and probit and prevent them from retaining property which in “good conscience” they should not be permitted to retain INSTITUTIONAL TRUST. The constructive trust imposed for breach of fiduciary relationship thus serves not only to do the justice between the parties that good conscience requires, but to hold fiduciaries and people in positions of trust to the high standards of trust and probity that commercial and other social institutions require if they are to function effectively. Two scenarios where a judge may consider in deciding whether good conscience requires imposition of a constructive trust: (1) Property obtained by a wrongful act of the defendant, notably breach of fiduciary obligation or breach of duty of loyalty. (2) Where the defendant has not acted wrongfully in obtaining the property, but where he would be unjustly enriched to the plaintiff’s detriment by being permitted to keep the property for himself. Prerequisites for an institutional constructive trust based on wrongful conduct: (1) Defendant must have been under an equitable obligation (2) Assets in the hands of the defendant must be shown to have resulted from deemed or actual agency activities of the defendant in breach of his equitable obligation to the plaintiff (3) Plaintiff must show a legitimate reason for seeking a proprietary remedy, either personal or related to the need to ensure that others like the defendant remain faithful to their duties (4) Must be no factors which would render imposition of a constructive trust unjust in all the circumstances of the case i.e. the interests of intervening creditors must be protected. Applied to the Case at Bar: K was under equitable obligation in relation to the property at issue. Failure to pass information to S constituted a breach of his equitable duty to S. Assets in the hands of K resulted from his agency activities in breach of his equitable obligation to the S. K was not monetarily enriched by his wrongful acquisition, but ample reasons exist to impose a constructive trust. S argued that a constructive trust is required to remedy the deprivation he suffered because of his continuing desire to own the particular property. If Court doesn’t enforce a constructive trust, it will send the message that real estate agents may breach their duties to their clients and the courts will do nothing about it unless the client can show that the real estate agent made a profit THIS WILL NOT SUFFICE. WE WANT DETERRANCE. Constructive Trust and Specific PerformanceCommon Law – remedy for contract is damage, not specific performance. Equity – remedy would be specific performance. If specific performance is available, the trust relates back to the point in time at which the contract was made. Criteria for Specific Performance Damages are inadequate – have to prove this to the Court. Contract for sale of goods – involves showing that the goods in question are unique such that it is worth it for the Court to force someone to force over those goods. Used to be that land was presumed to be unique – this meant that if you had a contract for the sale of land, that was a contract presumptively enforceable for specific performance. Obiter in Semelhago – specific performance should, therefore, not be granted as a matter of course absent evidence that the property is unique to the extent that its substitute would not be readily available. Cross Creek Timber – specific performance made sense because the land at issue was unique and especially suitable for the plaintiff’s purposes, and not in the “nature of mass-produced property”. Raymond – also applied to farm land next to the Raymond’s quarter which his parents owned before their death made sense due to strong emotional and familial ties and its proximity to his farm. Contracts for Sale of Land For land transactions it is on the closing date that land is transferred to the purchaser and the money paid fully to the vendor. Until then, legal title does not pass. In the interim period between the contract and the closing the necessary searches, inquiries and other preparations are carried out as need be. During the interim period, what interest does the purchaser acquire in the property? Land is held in constructive trust, so long as a court of equity would be prepared to grant the remedy of specific performance of the contract i.e. an order requiring the parties to fulfil, or perform, their obligations under the contract. If in the interim the seller decides to sell to a third-party, under what circumstances can the buyer go to a third-party and get the land back? Good faithPurchase for valueWithout notice (third-party had no notice of the buyer’s interest) If these three points are satisfied, the third party now has full title and buyer can’t get actual property back but can sue the seller for damages. HOWEVER, this recognition of institutional constructive trust is premised on specific performance, if it’s one of the situations where land is held not to be unique, then specific performance isn’t available against seller. Bulun Bulun v R&T Textiles Novel equitable interestsFACTS B is an Aboriginal artist. One of his paintings was of sacred land in which he got the permission of the Ganalbingu people to paint. Gave permission to Arts of the Dreaming to reproduce the work in its art book. However, a different party, R&T, manufactured and sold fabric reproduced substantial aspects of his work. As legal owner of the copyright, B proceeded against R&T. Milpurrurru joined the proceeding in his own right as the most senior person the Ganalbingu people, who claimed equitable ownership of the copyright in B’s work. The Aboriginal peoples did not cease to observe their sui generis system of rights and obligations upon the acquisition of sovereignty of Australia by the Crown. ISSUE – Whether those Aboriginal laws can create binding obligations on persons outside the relevant Aboriginal community, either through recognition of those laws by the common law, or by their capacity to found equitable rights in rem. Section 35(2) of the Copyright Act 1968 provides that the author of an artistic work is the owner of the copyright which subsists by virtue of the act. It effectively precludes any notion of group ownership in an artistic work, unless the artistic work is a “work of joint ownership” within the meaning of s. 10(1) of the Act produced by the collaboration of two or more authors and in which the contribution of each other is not separate from the contribution of the other author or the contributions of the other authors. In this case, no evidence suggests that anyone other than B was the creative author of the work. Do the circumstances in which the artistic work was created give rise to equitable interests in the Ganalbingu People? It is contended that the customs and traditions regulating this issue of the corpus of ritual knowledge places B as the author of the work in the position of a fiduciary, and moreover, make B the trustee for the artwork, pursuant to some form of express trust, or pursuant to a constructive trust in favour of the Ganalbingu people. Was there an express trust? Existence of an express trust depends on the intention of the creator. There must be intention on the part of the putative creator to divest himself or herself of the beneficial interest and to become a trustee of the property for another party. It is not suggested that he did not receive and retain the sale price for his own use no suggestion that ownership and use of the artistic work itself should be treated separately from ownership in the copyright to the artistic work. The fact of the sale and retention of the proceeds for his own use is inconsistent with there being an intention on the part of B to create an express trust. Artwork was also sold commercially and has been the subject of reproduction, with the apparent permission of those who control its reproduction – Arts of the Dreaming – forecloses any possibility of arguing that the imagery in the artwork is of such secret or sacred nature that it could be inferred that the artist must have had the intention in accordance with customary law to hold the artwork for the benefit of the Ganabingu people. Did B hold the copyright as a fiduciary? Relationship between B as the author and legal title holder of the work and the Ganalbingu People is unique. The “transaction between them out of which fiduciary relationship is said to arise is the use with the permission by B of ritual knowledge of the Ganalbingu People, and the embodiment of that knowledge within the artistic work. The law and customs of the Ganalbingu People require that the use of the ritual knowledge and the artistic work be in accordance with the requirements of law and custom, and that the author of the artistic work do whatever is necessary to prevent any misuse the artist is required to act in relation to the artwork in the interests of the Ganalbingu People to preserve the integrity of their culture, and ritual knowledge.Court finds fiduciary duty Fiduciary Duty – fiduciary undertakes or agrees to act for or on behalf of or in the interest of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense. The fiduciary obligation Central to the fiduciary concept is the protection of interests that can be regarded as worthy of judicial protection. Although B falls under fiduciary obligations to protect the ritual knowledge which he has been permitted to use, the existence of those obligations does not, without more, vest an equitable interest in the ownership of the copyright in the Ganalbingu People their primary right, in the event of a breach of obligation by the fiduciary is a right in personam to bring action against the fiduciary to enforce the obligation. In these circumstances there is no occasion for the intervention of equity to provide any additional remedy to the beneficiaries of the fiduciary relationship. Equity will not automatically impose a constructive trust merely upon the identification of a fiduciary relationship. Equity will impose a constructive trust on property held by a fiduciary WHERE IT IS NECESSARY TO DO SO TO ACHIEVE A JUST REMEDY and TO PREVENT THE FIDUCIARY FROM RETAINING AN UNCONSCIONABLE BENEFIT. If B denied the existence of fiduciary obligations and the interests of the parties asserting them, and refuses to protect the copyright from infringement, then the occasion might exist for equity to impose a remedial constructive trust upon the copyright owner to strengthen the standing of the beneficiaries to bring proceedings to enforce the copyright. DECISION – Milpurrurru and those he seeks to represent have not established an equitable interest in the copyright in the artistic work. Rather they have established that fiduciary obligations are owed to them by B, but as B has taken appropriate action to enforce the copyright, he has fulfilled those obligations and there is no occasion to grant any additional remedy in favour of the Ganalbingu People. REVIEWWhy is equity more prominent in Property Law? Property rights are perpetual. People make long term plans about and rely upon those plans. Certain things we can’t understand unless we understand the history. Statute of Uses Aimed to prevent the division of legal and equitable title to real property. CHAPTER 7 – QUALIFIED TRANSFERS AND FUTURE INTERESTSRemainder vs ReversionTransfers that are somewhat more complicated, not just a straightforward grant of a fee simple or life estateReversion Where a party transfers a life estate to A but does not grant the fee simple, the original grantor is said to hold a reversion or fee simple in reversion. The grantor retains the fee simple, subject to the life estate of A The right of possession reverts to the grantor upon the death of A Remainder Where a party transfers a life estate to A and the fee simple to B, then B holds a remainder or fee simple. B holds a fee simple interest, subject to the life estate of AB will only gain right of possession upon the death of A Stuartburn (Municipality) v Kiansky future interest = vested = ownershipFACTSUnder Manitoba election law, to be entitled to hold office a person must be an owner of land which is assessed in the latest revised realty assessment roll, or else a tenant or occupier of land whose name is entered on the latest poll as owner of right, interest or estate in the land (per s.5 of the Local Authorities Election Act). At the time of the Court application, K had sold his home and moved from the relevant district. However, he continued to hold interest in a prior life estate in favour of his grandmother. ISSUE: Whether K’s remainderman interest is sufficient to classify him as “an owner of land” despite the sale of his resident property and move from the municipality. DECISION – K’s remainder interest allows him to be classified as a present owner of a freehold estate in the Municipality. REASONING:Section 5(1) of the Act – “is, in his own right… an owner of land …” Person must be present owner of a freehold estate in land ownership must be of a currently existing freehold estate. Freehold estate = freehold right, title, or interest in land. K’s remainder interest is of a right to a freehold interest in fee simple = freehold estate in fee simple. REMAINDER INTEREST IS A PRESENT RIGHTIt co-exists with the life estate even though enjoyment and possession of the real property is postponed until termination of the life interest. Concept stems from common law requirement that there could be no abeyance (suspension) of seisin – aka there could be no abeyance of the ownership or transfer of the ownership of the freehold interest if the transfer was to be effective. Instant vesting took place. In present terms, a grant of a life estate to one person with the remainder in fee simple to another, was and remains a grant to each effective as of the time of the grant. Seisin did not require actual possession, although it did require possession in the sense of title or ownership. Estate in Possession – When X is entitled to an immediate life estate, he is entitled to enjoy it in possession. Said to be vested in that they are presently existing aka vested in possessionEstate in Reversion – the estate retained by the grantor when he conveys away a lesser estate Conveyance by G to “A for life and then B in fee tail”. Hence, A has a life estate in possession, B has an estate in fee tail in remainder, and G retains the estate in fee simple in reversion. Said to be vested in that they are presently existing, even though the owners are not all immediately entitled to possession. aka vested in interestEstate in Remainder – When a person is given an estate, but he is not entitled to possession until the expiration of a prior estate created by the same instrument. Said to be vested in that they are presently existing, even though the owners are not all immediately entitled to possession. aka vested in interestNote: A FUTURE INTEREST IS AN INTEREST IN PROPERTY in which the right to POSSESSION or enjoyment of the property is POSTPONED TO A FUTURE TIME. Nevertheless, IT IS A PRESENTLY EXISTING INTEREST IN THE PROPERTY (VESTED IN INTEREST), and it is thus PART OF THE TOTAL OWNERSHIP OF THE PROPERTY. Vested Interests vs Contingent InterestsVested Interest Is an INTEREST THAT IS NOT SUBJECT TO A CONDITION that must be satisfied prior to enjoyment. A vested interest may be vested in possession (if it gives rise to a present right of use and possession) or merely vested in interest (if it gives rise to a present right to future use and enjoyment) Examples A fee simple in reversion/remainder subject to a life estate without any additional conditions, is generally seen as vested in interest because the death of the life tenant is inevitable. These are present right to future enjoyment or vested future interests. grant to A in fee simple with no further words of limitation give A an right that is vested in possession grant to A for life and then to B in fee simple gives rise to a life estate held by A which is vested in possession, and a fee simple in remainder held by B, which is a vested interestContingent Interest Is an interest subject to a CONDITION PRECEDENT the occurrence of which is not certain/inevitable but rather dependent on satisfying the condition precedent . You have to WAIT AND SEE IF THE CONDITION WILL BE SATISFIED. Existence of a condition precedent makes the interest contingent. CONTINGENT INTERESTS ARE NOT PRESENTLY VESTED BUT ONLY VEST WHEN THE CONDITION IS SATISFIEDExamples: grant to A for life with remainder to B, BUT ONLY IF AND WHEN B marries gives B a contingent interest In the example above, when does B’s interest become vested in interest? When B marries When would it become vested in possession? Once B marries and A has died McKeen Estate v McKeen EstateFACTSTestator, Dr. Harry L McKeen, died in 1981. His will directed that his entire estate be held in trust for his wife for her life, and on her death, the trustees were directed, after completing several specific legacies (gifts of money) and a devise (gift of real property), to divide the residue/remainder of the estate (all property not otherwise distributed) Trustees (two sisters) died in 1989, and the testator’s wife died in 1992. wife out lived trusteesNo provisions for alternative gift testator is intestate (not having a will) with respect to the residue of his estate. In that case, the residue would be distributed to the testator’s relatives, in order of priority determined by NB’s legislation dealing with intestacy (dying before will made) In the event that the gifts to his sisters vest in interest at the effective date of the testators will, then the property would pass to their estatesISSUE – Did the testator intend with this wording to make the gifts to his sisters’ contingent on their surviving his wife? Presumption Against Intestacy In cases where the will shows an intention of the testator to dispose of the whole of his property, but, as regards the interests created, two constructions are possible. (1) The will effects a complete disposition of the whole or (2) The will leaves a gap Court prefers the former. Construction in Favour of Vesting When the words are not clearly contingent, and when various other circumstances to be considered in determining the question are favourable to a vested construction, the courts are inclined to call a gift that is prima facie contingent, “vested”. A gift, whether a devise or a legacy, that MAKES NO REFERENCE TO THE TIME OF VESTING should always be held to take effect at the testator’s death, unless that date of vesting would disturb provisions already made in the will, or unless the will as a whole indicates a clear intention that the gift operate contingently and at a later date (not withstanding the rules of perpetuities). The Rule in Browne v Moody A gift is prima facie vested if the postponement is to allow for a prior life estate. Dr. McKeen did not intend a partial intestacy.Residue of the estate vested in the sisters equally at the date of death of Dr. McKeen. The reason for the postponement of the distribution is simply that a life interest was previously given to the widow, so that the residue could not be paid until her death. A construction which gives a vested interest is favoured by the courts where there is ambiguity or doubt. DECISION – Testator did not contemplate an intestacy. Residue of the estate of Dr. McKeen vested in his sisters equally at the date of death of Dr. McKeen, that they or their estates have not been divested of their interest, and that their estates are equally vested and entitled. Defeasible vs Determinable InterestsDefeasible and determinable interests are interests that have VESTED but may be SUBSEQUENTLY TERMINATEDDefeasible Interest Is subject to a CONDITION SUBSEQUENT that may bring the interest to a premature end.Defeasible interest is vested. Language indicative of a defeasible interest: on condition that “but if,” “provided that,” “if it happens that” – conditional words i.e. – to A in fee simple on the condition that if the property is not used as a residence, my estate may re-enter.Condition subsequent & condition precedent is “property not used as a residence”Right retained by the grantor is referred to as a right of re-entry subject to a condition precedent not a vested interestDeterminable Interest Is an interest that is defined as coming to an end when a determinable event occurs – pass to the grantor or that persons estate upon the event occurringDeterminable interest is vested Language indicative of a determinable interest: “while,” “during,” “so long as,” “until” – temporal words (relating to time)Right retained by the grantor is referred to as a possibility of reverter is classified as a vested interest. REMEMBER: Sometimes it is not easy to tell whether a particular wording creates a contingent interest subject to a condition precedent, a vested interest subject to a divestment, or a determinable interest. Caroline (Village) v RoperFACTSConcerns the construction of a deed that transferred the fee simple in a certain property that had been donated for the site of a community hall.“This acre transferred to the Caroline Community Hall, this day, shall revert back to the Late Thomas roper Estate if used for other than a community centre. Conditional words “if used” = defeasible interestISSUE – Whether the grantee could retain the property once it was no longer being used for a community hall.REASON“This acre…shall revert… if used for other than a community centre” are key words. They use the future tense and the future action depends on something occurring which may not occur or may occur in the indefinite future, thus offending against the rule against perpetuities. The words seem to make the fee simple that was given that day defeasible if a future event occurs. The court must feel that if the village gets this land free of charge, there is a bit of an injustice going on. The judge wants to hold this is as a determinable fee, but LOOKING AT THE WORDING OF THE DOCUMENT, he felt forced to conclude it was a defeasible fee simple, and the right of entry could not be exercised as it violated the rule against perpetuities.DECISION – Invoked the EQUITABLE RULE OF RECTIFICATION. Held that it was laypeople who made the document. Court to reflect their original intention. Document should be rectified to show that the transferees received title to the property as trustees for as long as the property was used as a community centre and to be conveyed back to the Ropers at the end of that use. COMMENTS: The fee simple subject to a condition subsequent, referred to above – aka a defeasible fee simple -, is regarded as being vested in the municipality subject to divestment to original grantorThe interest that the grantor retains is called a right of re-entry. It is contingent because before this right of re-entry can be exercised, an event (i.e. condition precedent) must occur the land must no longer be used as a community centre = condition precedent. Because the right of re-entry is a contingent interest, it may be subject to the common law rule against perpetuities. Decision also considers whether the interest created by the deed to the trustees was a determinable fee simple. The determinable fee simple, like the fee simple subject to a condition subsequent, is a vested interest, even though it might come to an end on the happening of the determining event.The right retained by the grantor of a determinable interest is called a possibility, or a right of reverter. Right of Re-EntryThe party that receives an interest if a condition subsequent is satisfied and a defeasible interest comes to an end holds right of re-entry Example: – If A grants to B a fee simple estate subject to the condition subsequent, then A holds a right of re-entry A right of re-entry must be exercised by A in order for B’s interest to come to an end. B’s interest does not come to an end automatically when the condition is satisfied. A right of re-entry is a contingent interest (SUBJECT TO A CONDITION PRECEDENT) – one person’s condition subsequent is another’s condition precedent.Possibility of ReverterWhere one party holds a determinable interest, another party will hold a possibility of reverter If the determining event occurs, the determinable interest automatically devolves to the party holding the right to reverter there is no need to affirmatively exercise the reverter as with right of re-entryCanadian courts have held that a possibility of reversion is a vested interest (unlike a right of re-entry). The Canadian approach seems to rest on a legal fiction, since a determining event is not necessarily inevitable721995000The determinable interest is defined to end at the determining event; both interests are deemed to be vested. The defeasible interest is vested, whereas the right of re-entry is contingent on the conclusion, which may or may not occur.Interpretive PresumptionsThere is an interpretive presumption in favour of early vesting.Where the terms of a grant or devise are ambiguous, courts will tend to avoid interpretations that give rise to contingent interests, i.e. interests subject to a condition precedent. There is also an interpretive presumption against intestacy (not having a will)that there is a presumption that a will is intended to dispose of all interests, and thus not to have interests return to the estate because conditions were not metEXERCISE – Based on McKeen and CarolineWhat were the terms of the disputed grant or devise? McKeen – Life estate to the testators wife, then residue of the estate (remainder in fee simple) to his sisters if they are alive Caroine – Transfer of land that would revert back if not used for a community centerWhat possible interpretations could have been given to the terms of the grant or devise? McKenninterest to the sisters contingent on their being alive at the time of wifes death (i.e subject to a condition precedent of being alive at the time the life estate ends) or a vested remainder to the sisters or their estate, subject to divesting of one sisters interest if one were dead and one alive at the time of wife’s death Caroline – Defeasible (subject to condition subsequent) or determinable (subject to determinable limitation)Which interpretation did the court adopt? McKeen – a vested remainder to the sister or their estate (i.e. not subject to a condition precedent of being alive at the time the life estate ended), subject to divesting of one sister’s interest if one were dead and one alive at the time of wife deathCaroline - DefeasibleOn what basis? McKeen – Presumption against intestacy, presumption in favour of early vesting and presumption in favour of vesting where an interest is subject to a life estate Caroline - language used in the grant refers to a condition in the futureWhat was the significance of the interpretation to the outcome? McKeen – sister’s estates received title even though they had both already died at the time the testators wife died Caroline – The interpretation would have resulted in invalidity under the rule against perpetuities, but the grant was saved by “rectification of the deed” to create a trust with ha direction to transfer it back if not used as a community centerState Limitations of Private OwnerLimitations on what a Private Party Can Do: (p.539)Certain limitations that are imposed based on objectives of government or legal system with respect to property interests.Parties’ autonomy is more restricted than if it was just a contract between two people (in personam), because these are in rem rights (effect everyone) Less deference to party autonomy in this area of law. Therefore, there are more restrictions from the state.What you create has to fall within recognized estates and classifications – numerous clauses principle. Terms have to meet a certain threshold of certainty. Grounds of InvalidityThe terms of a transfer may be held to be invalid because:(1) Impossibility – condition is impossible to perform (2) Uncertainty – cannot tell whether the event has occurred or not (3) Contrary to Public Policy(4) Impermissible (unjustifiable) Restraint on Alienation (5) Violates Rules Against Perpetuities (6) Violates Remainder Rules Effects of InvalidityCondition subsequent (defeasible interests): If an invalid condition subsequent is attached to a grant or devise of real or personal property, the invalid condition is removed, and the grant becomes absolute only the condition is struck out if invalid condition subsequent.Determinable interest: If a determinable limitation (giving rise to a determinable interest) on a grant or devise of real or personal property is invalid the entire grant fails. Condition precedent (Contingent interest): If a grant or devise of real property is subject to a condition precedent that is invalid the entire grant fails.The same rule may or may not apply to grants of personal property subject to a condition precedent – may fail or may be upheldBut see Unger v Gossen where the devise of personal property was upheld, and an impossible condition severed. PLENARY SESSION - Public Policy as a Ground for Declaring Stipulations Invalid Courts have the power to refuse to enforce terms in a contract or in transfers of land the offend against public policy, meaning that they are contrary to good moral or public order.?Examples include prohibitions against carrying out public duties or serving in the military could be voided for such, as could prohibitions against marriage which is supported by public policy.?Re Leonard Foundation TrustRATIO: A condition in a trust (if in the public sphere) can be declared invalid for reasons of public policy. In such cases, courts will apply the cy-pres doctrine to remove only the invalid conditions.FACTSEstablished a scholarship fund with conditions to those who could receive the awardWhite race - believed they best qualified by nature to be entrusted with the development of civilizationThe scholarship was broken down into:RecitalsWhite race is qualified… Enduring importance of the British EmpireImportance of Christian religion in its Protestant formMales and females are entitled to the bursary, but no more than a quarter can be distributed to females on a given scholarshipExclusionPreferred classes (children of Anglican clergy, children whose parents served in armed forces or engineers)General committeeRequired to select the candidates, had to meet specifications of trust itself Summer workCourt applications (article 9 of trust: apply to court for advice, any judge who hears the case must be white-Anglo-Saxon-protestant, didn’t consider this to be an enforceable stipulation) Values Embedded:Progress and civilization EmpireRaceRace and empireReligion EducationPhilanthropy While the Foundation may have been privately created, there is a clear public purpose and administration. Clearly this is a charitable trust which is void on the ground of public policy to the extent that it discriminates on grounds of race, religion and sex. Ontario Human Rights Commission brought a complaint against the Leonard Trust, human rights were going to consider whether these terms were unlawful as discriminatory, this worried the Leonard Trust, so they invoked court application article At Court of Appeal trust was invalid as contravention of public policy Public policy is a judge made concept, and is discerned at looking more broadly at social morals, political signals, legal signals set by thing like the CharterPublic policy should only be invoked in clearest cases, and should not be made on judicial idiosyncrasies of a few judges Leonard Foundation met this threshold DECISION:Trust continues to this day but the discriminatory provisions no longer valid If an invalid condition subsequent is attached to a grant or devise of real or personal property, the invalid condition is removed, and the grant becomes absolute Note: see class notes for majority and dissent specificsUncertainty (560-561)Stipulations cannot be enforced if they cannot be interpreted with certainty a condition or limitation cannot be too uncertain because then it would be an invalid condition thus meaning the condition gets severed or it fails completely A higher standard of certainty is required for conditions subsequent (defeasible interest) and determinable interests than for conditions precedent (contingent interests)Condition precedent: One has to know with certainty only whether a particular claimant has met the conditionCondition subsequent: one must be able to state with certainty what events will give rise to the grantor’s right of re-entryDeterminable limitation: what will cause the grantee’s interest to revert to the grantorPerfect certainty with respect to every eventuality is not required (nor is it possible) however the terms of a grant or disposition must provide parties with a practical level of certainty that can guide their conduct (Fennell)In interpreting a stipulation for retaining property, one has to know in advance (before the event) what will bring the grantee’s interest to an end. Need to be aware of the conditions that would terminate the interest HJ Hayes Co v Meade – uncertainty caseFACTSFarmer dies and leaves half his farm containing the farmhouse to his wife for her life, and then to his son Harold (remainder). He divided the other half of the farm into two lots, and gave one to each of his younger sons, Frank and James, on condition that each of them resides on the land and cultivate it. If they did not, then the lot designated to that son would become the property of Harold and Harold must pay $1000 to the said son. James moves to the US and returned and built a house on the lot designated as his in his father’s will. James executed a deed transferring the front part of the lot, with the house on it, to himself and his sister as joint tenants. James died and the defendants are his successors in title. Plaintiff company is owned by Harold’s widows and children. ISSUE – Whether the testator had intended to create conditions precedent (contingent interest) to his son James obtaining the disputed property, or a condition subsequent (defeasible interest) for retaining the property. Recall if a condition precedent (contingent interest) or determinable limitation is void for uncertainty, the entire grant fails. On the contrary, if a condition subsequent is void for uncertainty, the condition is struck from the grant and the grantee receives the interest free of the conditions. DECISION – It is a condition subsequent, because of the presumption against intestacy. James took an absolute title to the disputed property at the time of his father’s death. REASONING: Court prima facie treats it as being subsequent for there is a presumption in favour of early vesting. Additionally, it is also the only interpretation which gives effect to the testator’s clearly expressed intention to confer a benefit on each of his sons. If the provisons are construed as conditions precedent the property could not vest in James at the time of his father’s death. Nor could it vest in Harold. The condition affecting Harold was never met. He never paid $1000 to James. Treating it as a condition precedent would mean that the bequest of the disputed property fails completely. Cardinal rule of interpretation of wills is that effect must be given to the intentions of the testator. Uncertainty IssueCourt finds it void for uncertainty. We do not know how long he can be away from this land before he comes back. It gives minimal guidance to James and what he has to do to preserve his title in the land. There is a higher level of certainty required for condition subsequent as compared to condition precedent. Potential problem with this idea though. One party may lose title and one party may gain title based on the condition subsequent. One person’s condition subsequent is the other person’s condition precedent. Fennell v Fennell – uncertainty case & restraint on alienationFACTSLady devises house to five children, who don’t live in Newfoundland, with a peculiar condition:Subject to the condition “that all of my family can make use of the said house at any time without costs PROVIDED THAT they share in the upkeep of the said house”. ISSUE: Is the clause invalid? If so, is it a condition subsequent or condition precedent?DECISION - Condition subsequent void as undue restraint on alienation. The children get the interest without any conditions (conditions removed)REASONING: Clause is ambiguous, repugnant and a violation of the fundamental principles of alienation2 elements of ambiguity: what is family and what does upkeep meanIs the condition void for uncertainty? One must ask who falls within the class of family and how is the contribution to the upkeep of the property determined? The standard should be practical certainty, need some meaningful guidance to keep their interest.Only a practical level of clarity is demanded What counts as family and what counts as upkeep?Restraint on alienationCannot impose conditions or limits that unduly restrain the alienability of landDirect power of common-law judges to find invalid terms in a grant testament that unduly restrains the alienability of landDirect restraint: you aren’t allow to transfer land to someone elseIndirect (Fennel): court in addition to finding the interest void for uncertainty, also found Condition Subsequent void for an undue restraint on alienationGrant transfer to 5 children on condition that family can come and stay as long as they like as long as they share in the upkeepIf sold: 3rd party would have to let family stay (condition follows to purchaser)In rem interests (between everyone who could own that land – run with land) and they want to buy the house. Conditions not only between the two people, the condition would follow the purchaser and would be under the obligations placed by the person who placed the conditionsHuge restraint on alienation because no one would buy the house with that conditionif you want to get rid of it – need all consentThis impairs to such a degree that this is no longer an easily alienable interestCondition is struck from the will, and the grant becomes absolute. Five children get title with no condition. RATIO: Devises should not contain qualifications on ownership because they violate the alienability for the landTerms of the grant or disposition must provide parties with a “practical level of certainty” that can guide their conductRestraints on Alienation Restraints on alienation can be direct or indirect (Fennel).A testatrix (women testator) giving an absolute interest in her property cannot, at the same time, impose a condition on a gift which deprives the beneficiary of the rights recognized in law as part of the essential nature of the absolute gift. Conditions that are void because they restrict alienability on the land.Free alienability of land is a serious public policy concern in common law.Direct restraint on alienation: Direct in terms of a restriction stating you are not allowed to transfer to someone else A grant to you in fee simple as long as you keep it in the family this would be invalidIndirect restraint on alienation: Something that impairs the marketability of the property to such a degree it effects alienability (transfer of property)With reference to the Fennel case, if other family members are having access and contributing to the property, if you sell does that condition still continue to exist and now the new owner is bound by a restriction that runs with the land? Yes because in rem right. Can the Fennel family just show up whenever? Yes.It is a condition that future owners would not want and affects marketability of the land. For policy reasons, we do not want these kinds of interests to be created. Mechanisms of Restraint(1) Mode: can’t sell, transfer, lease(2) Class: restriction that says you can’t sell it outside a certain class of people (class of parties eligible vs ineligible to receive property)(3) Time: can’t sell it within a certain time period or duration of restraints These can amount to an illegal restriction on alienation Forms of Restraint(1) Disabling: removing the power to transfer propertyGiving the party the interest and restricting what can be done with it (2) Forfeiture: forfeiture if you attempt to transferGiving party the interest but if you try and sell this to someone else, your interest reverts back to me(3) Promissory: purely contractual restraint, only between two specific people (in personam). If you have a contract with someone not to sell a certain parcel of land, you wouldn’t be able to go to the third party and ask for it back, you might be able to go to the party you originally contracted with. If one can sue for selling the land, it is less likely that the other party will be sued main takeaway is that there is ambiguity in promissory restraints. Policy Reasons for Prohibitions on Restraints of AlienationEconomic - transferrable interests are seen to be economically efficient, you can sell it to the highest value user, person willing to pay the most for it might value it the most.Prevents a certain group from maintaining and controlling the land.Autonomy/individual freedom – can go both ways, present owner’s autonomy vs future owner’s autonomy.Trinity College School v Lyon Indirect restraints on alienation FACTS:Case of a boarding school in Ontario next to a farming family Bennets.Plaintiff brought an application to court to enforce an option to purchase adjoining land. The land belonged to Bennets.In 1963 Family sells some land to the school (Planitiff) and makes other land subject to the right of first refusal (Plaintiff would get first dibs if selling) during the lifetime of the husband and wife AND includes a “post mortem” option to purchase the land when the husband and wife die. Plaintiff was also to pay all the taxes on all of the property, and if the land was sold to a third party, then the Bennets would compensate the school for the taxes.Later on, Plaintiff acquired an option to purchase the rest of the land upon the death of Bennets for $9,000.In 1991, one of the Bennets dies, and Plaintiff sought to exercise its option to purchase the land (now worth $125,000) for the set price. But it turns out that at some point before, the Bennets gifted the property to their daughters D.ISSUE – Whether the option to purchase, for a fixed price upon death, was unenforceable or void as an improper restraint on alienation of an estate in fee simple. DECISION - Court holds that right of first refusal while they are alive is okay, but the option to purchase the land below price after death was not okay, because the executor is unable to sell land to highest value user improper and in direct restraint on alienation specifically economic policy reasonsREASONING:A condition that would take away the necessary incidents of the estate, such as the holder shall take the profits, or shall not have the power to alienate, either generally or for a limited time, is void as being repugnant to the estate created. The reason such restraints are void is because they keep property out of commerce and tend to result in a concentration of wealth. Essentially creases a life estateThis equates to an indirect restraint on alienation. RATIO: a term will only be implied when there is an evidentiary foundation for finding that both parties would have agreed to it and it is necessary for the business efficacy of the contractLegal Remainder RulesRules governing the transfer of legal interests in land (and maybe certain equitable interests) subject to a prior estate (remainder or reversion), condition (contingent interest (condition precedent) or defeasible interest (condition subsequent)) or determining event (determinable interest). These rules reflect certain policies of the common law:Promotion of certainty – restrictions on categories etc. Continuity of seisin (someone always has to be seised of the estate, always need someone with present right of use and possession). Hostility towards future interests and especially contingent remainders. Hostility towards unique forms of property (numerus clauses principle). Promotion of alienability. Ontario Law Reform Commission, Report on Basic Principles of Land LawRule 1: A remainder after a fee simple is void (can’t be directing where fee simple goes after you have given it away). Justification: attempting to direct future transfer of a fee simple estate is contrary to the nature of the fee simple, which is absolute ownershipScope: This rule will void a straight remainder on a fee simple, as well as a possibility of revertor (reversion) or right of re-entry on a fee simple, IF it is transferred to a third party in the same grantThe transferor can retain a right of re-entry or revertor (REVERSION) on a fee in condition grants Don’t want to direct the future transfer of a fee simple estate.Examples of transfer that violate rule:To A in fee simple with remainder to B in fee simple – the remainder to B is void. To A in fee simple, but if the property is not used as a residence, then to B in fee simple – void because it is in the same grant, giving the right of re-entry to a third party on a fee simple estate.Rule 2: An estate of freehold (ownership) is void if it is designed to take effect in the future, unless it is supported by a prior particular estate (need to have provided for the interim).Justification – must be continuity of seisin. Common law will not tolerate a gap. Scope: Applicable to any interest arising in the future (remainder, re-entry (condition precedent), revertor) must be supported by a prior particular estateLaw could have filed in the blanks, but they chose not to. However, a grantor can grant a life estateExample of violation: to A on the day she turns 21Example of valid: a life estate to C, then to A in fee simple, if she turns 21 before C’s deathFrame as determinable interestTo B for life, remainder to ARule 3: A remainder is void if it is to take effect by cutting short a prior particular estate. – a remainder must await the regular ending of the prior particular estate (temporal language)Justification: transfers that violate the rule add undue complexity to the system in estates of land Don’t want to create complexity to the system of estatesScope: applies to defeasible interests, but not determinable interests Example of a non-compliant grant:Non-compliant: “to A for life, on the condition that the property be used as a residence (condition precedent), but if it is not, then to B” --> premature end dateExample of a compliant grantCompliant: “to A for life until the property is no longer used as a residence, then to B”The first example prematurely cuts the interest short whereas the second interest is defined to run only until a certain time.Rule 4: A legal contingent remainder is void unless it vests at or before the termination of the prior particular estate. Justification: Ensuring timely vesting and continuity of seisin, no gaps.Scope: Applies to contingent (unvested) future interestsNote: that because a possibility of reverter is treated as a vested interest in Canadian law, this rule would not apply in the case of determinable interest Three Categories:(1) Contingent remainder guaranteed to vest, if at all, before the termination of the prior interests valid, no gap in seisinTo A for life, remainder to B if he marries before A’s death. Valid as it vest before the termination (2) Contingent remainder guaranteed to vest if at all, after the termination of the prior interest invalidTo A for life, remainder to B, if he marries after A’s death (no way B can satisfy this before A’s death).Void guaranteed gap in seisin (3) Unclear whether contingent remainder will vest before the termination of the prior interest wait and see (invalid if it results in gap in seisin). Solution: wait and see if there is a gap then grant is void To A for life, remainder to B if B marries – if B is married before A dies then it is valid (no gap of seisin), if not it is invalid.Application of the Legal Remainder Rules The legal remainder rules generally APPLY TO LEGAL INTERESTS IN LAND.The legal remainder rules generally DO NOT APPLY TO PURELY EQUITABLE INTERESTS IN LAND. The legal remainder rules do not apply to legal executory interests or gifts under a will, except possibly the last branch of Rule 4 – gifts under a will are treated similarly to legal executory interests. But see Re Robson, indicating that the legal remainder rules may not apply to wills at all (in cases where property under a will is temporarily held in a statutory trust, as appears to be the case in Alberta Devolution of Real Property Act. THE RULE AGAINST PERPETUITIESLike the doctrines of public policy and restraint on alienation, the rule against perpetuities polices the terms of private dispositions. The rule against perpetuities sets a time limit for RESOLVING CONTINGENT INTERESTS (CONDITION PRECEDENT, NOT VESTED). Any interest that might vest “too late” is void at the outset. The RAP applies to contingencies. The Rule Against Perpetuities The rule: An interest is valid if it must vest, if it is going to vest at all, within the perpetuity period THAT PERIOD IS CALCULATED BY TAKING THE “LIVES IN BEING” (living person) AT THE DATE THE INSTRUMENT TAKES EFFECT + PLUS 21 YEARS.?The RAP applies, with some exceptions, to a contingent interest in real or personal property, in including both legal and equitable interest?But the RAP does not apply to vested interests (def: no condition precedent) at common-law; does not apply to defeasible or determinable interests?At common law an interest that could potentially vest outside the perpetuity period is voidAll of the beneficiaries must be people identified by name to the donor OR the beneficiary has to be identifiable within 21 years. An interest can be a legal interest, or an interest created in trust. Given that it must vest, we know that we are talking about unvested interests. ?The RAP acts to prevent uncertainty from property interests from extending too far into the future.Why restrict perpetuities?Promoting legal certaintyPromoting alienabilityProtecting the autonomy of current interest holders from the dead hand of past interest holdersOne thing you can do with contingent is exercise influence on people after they died?e/g gift to grandchild to pay schooling if become lawyerPrecluding the creation of perpetual interests subject to unique restrictions (the numerus clauses principle)Counter argumentsThe complexity of the rule itself gives rise to uncertaintyThe rule restricts the autonomy of grantors and testators?– we are not really worried about people trying to keep property in the family anymore, so do we really need this rule The RAP Workflow (1) Classify – identify the contingent interests.(2) Time – establish the perpetuities period. (3) Prove – prove that remote vesting is possible or impossible. EXAMPLES (1) “To John for life, then to Marcia” John has a life estate and Marcia has a fee simple. John’s is vested in possession and Marcia’s vested in remainder in possession. RAP does not apply b/c vested(1a) “To John for life then to Marcia when she marries” Marcia’s interest is not vested, it is contingent interest, and RAP must apply. (1b) “To John for life then to Nora’s daughter” RAP applies. Question is when will this uncertainty be resolved? (2a) “To Marshall’s first-born child” If Marshall passes away without children, the possibility of having a child disappears and this gift fails. (2b) “To the first lineal descendant of Marshall to receive the Order of Canada” When are we guaranteed to know? When will we know that no one receives the gift – when the last of the descendants pass away. Fail on uncertaintyNote: When we are waiting for closure, the property is set aside for someone. All that while, it is the dead hand that controls that property. THE PERPETUITIES PERIOD BEGINS WHEN THE INTEREST IS CREATED.Examples: (3a) Regina grants greenacre to the UofA, so long as the land is used for student housing inter vivos gift, effective when grant is executed. (3b) Edward devises whiteacre to the UofA, so long as the land is used for educational purposes gift (interest) becomes effective when Edward dies. Consider whether this is a gift by will or was it made my someone alive? A LIFE IN BEING is someone alive when the interest was created; A person in the womb is a living person. (4a) T bequeaths “to the Children’s Hospital Foundation ONLY AS LONG as it operates a hospital in Edmonton” (there are no lives in being) What if this doesn’t happen? Testator’s estate has a right of re-entry and can cut the interest short. When does the perpetuities period begin? It began when T passed away, hence “bequeaths”. Who are the lives in being in this gift? There is no human being involved in this gift that is still standing. So, the perpetuities period begins on the death of T. When does it end? In 21 years of death of T. Is it possible that the Hospital will breach this after 21 years? It can be void after 21 years – you CANNOT leave this sort of gift. Interest is void at the outset T cannot demonstrate that the interest will vest within 21 years. Condition subsequent is void. (4b) “T devises (meaning upon death) to Enid’s first daughter” When is the interest created? It is a will, so it becomes effective upon T’s death. Do we have a contingency? We only have a contingency if Enid has yet to have a daughter. Who is the life in being? Enid, as she is alive. Does the interest have to vest or fail during her lifetime? Yes. If she dies without a daughter, this gift fails. However, we have closure when Enid passes. A GROUP OF PEOPLE CAN SERVE AS LIVES IN BEING IF ITS SIZE IS ASCERTAINABLE AND FIXED.(5a) “X devises to all my grandchildren” Do we have a contingency? The contingency is whether or not grandchildren will be present. Who are the lives in being? X’s children. Once all of X’s children pass away, there cannot be any more grandchildren. Any grandchildren of X must be born during the lifetime of X’s children. (5b) “X grants in trust for all my grandchildren”Who are the grandchildren? Children of X’s childrenWhen does the interest take effect? Takes effect immediately via the trust. Who are the lives in being? X is still alive, and X can have more children. The difference is that we don’t have lives in being in this example X can have more children and the gift is therefore void. Lives of being must be a fixed group and people which are ascertainable. Cannot say all grandchildren will vest. X can have more grandkids in 20 years, X could have another child, and in 60 years that child could have a grandchild and vest, and that is too late – past 21 years. How do we prove remote vesting is possible or impossible? Demonstrating that remote vesting is impossible:If you can identify someone during whose life, or within 21 years of whose death, the contingency must be decided (a “validating life”) – the contingency is good. I.e. “To devises to Enid’s first daughter” Constructing hypothetical circumstances in which remote vesting is possible(1) Imagine a child born after the perpetuities period began (2) Kill off all of the lives in being in your cataclysm of choice (3) If the contingency can be unresolved after 21 years, the contingency violates RAP. For example, “T devises to Otis’s first child to land on Mars” Here we have one generation – Otis – and the next generation – his first child – which may be 21 years later. February 2019, T dies. At the time Otis has a son AW and a daughter BW. February 2021, MW is born to Otis. July 2022, Otis AW and BW perish. March 2045, MW lands on Mars. GIFT VIOLATES RAP, SO ITS VOID FROM THE OUTSET. Review Examples X transfers a sum in trust for Aaron for life, remainder to Aaron’s first child who reaches 21”. Contingency – is there a future interest? Valid – when Aaron dies, whatever happens will happen within 21 years. X transfers a sum in trust to Denise for life, then to Denise’s first child who reaches 25” (Denise has no child age 25 or older) Void – Denise can pass away when the child is 3 years old and it will take 22 years for it to vest. Timothy devises to my grandchildren who reach 21 (Timothy leaves two children and three grandchildren under 21) Valid – grandchildren will have to reach 21. Same as 3, but this time a grant inter vivos. Void - Timothy can produce more children, so there are no lives in being. Blake transfers in trust unto and to the use of Jack for life, then to use of Jack’s widowWhen can we ascertain if Jack has a widow? When she dies. Jack is the life in being. Valid. Five Steps to Perpetuity Success(1) Is the limitation one to which the RAP may apply? At common law, the RAP applies to contingent interests Does not apply to vested interests s. 19 of AB Perpetuities Act extends to RAP to possibilities of reverter/reversion Example of RAP Not applying: “to A for life, then to B for life, then to C for life, then to D in fee simple”RAP does not apply at all because they are all vested interests – no contingent interests or conditions precedent. (2) What is the date of creation of the interest? For an interest under a will, the interest is created on death of the testator. For an interest under an inter vivos transfer, the period will begin to run from the date the instrument takes effect. (3) Who is/are the life/lives in being? Perpetuity period = life in being + 21 years Conditions: (1) Measuring lives must be human (2) Measuring lives must be living at date of the creation of the interestincluding those en ventra sa mere – in utero (3) If a group of persons is used as the measuring lives, that group cannot be capable of increasing in number after the date of the creation of the interest. (4) If a group of persons is used as the measuring lives, that group must be ascertainable. Lives in being may be expressly or impliedly designated. Examples Devise from T: “to all my grandchildren in fee simple” T has two children at her death, X and Y Measuring lives are X and Y – impliedly designated, and they satisfy all four conditions Living humans Part of ascertainable class (T’s children) They cannot increase in number because T is dead. X and Y may continue to have children after T’s death, but the category of grandchildren of T is guaranteed to close within 21 years of the death of X and Y Accordingly, the devise satisfies the RAP If it was inter vivos it would not satisfy RAP because T could technically have more children. Would it make a difference if T was male? Nothing would change due to gestational rule. (4) Is it theoretically possible to construct circumstances in which vesting would occur outside the perpetuity period? This step refers to theoretical possibilities at the commencement of the interest, not practical probabilities or actual events occurring after the date of creation. In considering theoretical possibilities, in effort to simplify the application of the law, there is a presumption of fertility for both males and females regardless of age or physiology – if you are alive you can have a babyExample – Fertile OctogenarianT devises Blackare to trustees on trust for his wife, A, for life, then for A’s children for their lives, then for such of A’s grandchildren who attain the age of 21 years. At the date of T’s death, A is 80 years old and has two children X and Y (60 and 55). A also has three grandchildren, the eldest is 18. Infringement: yesA could theoretically have more children, thus A’s children don’t satisfy the conditions for lives in being, (since they are capable of increasing in number), so we have to rely on A as the life in beingIf A had a child Z, and then A died, and then Z had child, that child would be a grandchild of A who would not reach the age of 21 during the period At common law, this possibility voids the gift at the outset, regardless of what actually occurs Example – Precocious ToddlerTestator (T) devises Black Acre to A for life, then for such of A’s grandchildren living at T’s death or born within five years thereafter shall attain the age of 21 yearsAt the date of T’s death, A is a widow, 65, she has two children and one grandchild, 8 yearsInfringement: YESA has to be the life in being since she technically could have another child. If A dies and then a grandchild of A is born within five years of T’s death, that grandchild would potentially turn 21 years outside the period(5) Can the limitation which is invalid under the general law be saved through an application of statutory modifications to the rule? Alberta Perpetuities Act (p.153)Being with the common law rule: if a transfer satisfies the common law rule, it is valid. The statutory reforms operate to save some transfers that would be invalid under the common law rule. Key Reform Sections 3 – 5- the “wait and see” rule if an interest violates the common law rule because it might not vest until after the perpetuity period, one should wait and see if actual events establish that the interest actually will vest, if at all, during the perpetuity period calculate based on a statutory definition of lives in being. If it actually vests on time or it becomes clear during the period that it will not vest at all it is valid (sections 3-5)In other words, rather than invalidate an interest at the outset, on the basis that it theoretically might violate the perpetuity period, the statute allows us to wait and see if it actually will. Other Reforms:Section 6: Age Reductionif an interest is set to vest at an age greater than 21 and would violate the period, the age of vesting should be reduced to 21 if that will save the interestSection 7: Class Splitting late vesters can be excluded from the class in order to save the disposition for those who vest on timeSection 8: General Cy-Pres Provisionwhere a disposition is invalid solely on the basis that it violates the RAP and it is possible to ascertain the general intention governing the disposition, then the court can order for the disposition to be reformed to give effect to the general intention within the limits of the RAPSection 9: Realistic Assumptions on Capacity to Have (Biological Children)males can have children from ages 14 onwards, and females can have children between the ages of 12-55, actual capacity or incapacity to have children can be established through evidence of living personsOrder of Application to Reform Provisions:(1) Capacity to have children – s. 9(2) Wait and see rule – s. 4(3) Age reduction – s. 6(4) Class splitting – s. 7(5) General Cy-Pres Provision – s. 8Additional Measures*note that these modify the common law from the outset, instead of operating purely as saving measures* Section 18: Special flat perpetuity period of 80 years for commercial interests (rights to acquire interests granted under a contract for valuable consideration, excluding will and inter vivos trusts) – if a contract would have allowed an interest to be acquired beyond 80 years from the date of the contract, the right to acquire the interest is held to expire at 80 years. Section 19:Special perpetuity period of 40 years for: Right of re-entry on breach of condition subsequent (19(1))Possibility of reverter on determination of a determinable fee simple (except for mineral leases – s. 19(5))Possibility of resulting trust on determination of a determinable interest (except for mineral leases – s. 19(5))19(3) determining event is the cessation of a charitable purpose and cessation of the charitable purpose occurs 40 years, interest will be subject to cypress powerNote that RAP would not apply in relation to determinable interests at all but for section 19 (because they are vested) ALRI Report: Abolition of Perpetuities LawThe RAP should be abolished. The functions of the RAP in limiting control of property into the future can be severed by:Tax law, which disincentives late vesting in trusts.Discretionary court powers to vary or terminate trusts.Discretionary court powers to vary non-trust interests.Do these alternatives really fulfill the same functions?Certainty question – can I really convince a court to step in here? Creates uncertainty for beneficiaries. From a Testators perspective, there is a clear line in RAP. The court will not provide this certainty. Are there any shortcomings to this approach?Not providing the same degree of clarity to people on what they can and can’t do in advance. Scurry Rainbow Oil v TaylorFACTSMineral lease – taylor owns mineral rights. Taylor leases mineral right to Imperial Oil for ten years or until it’s no longer producing oil then grants a lease (conditional interest) on top of it.Grant of a top lease: a lease granted to another party if the lease to the original party comes to an end if it is within 42 yearsLease is a non-possessory right in land: right to go on land and extract Conditional interest to Scury RainbowISSUE – does RAP apply? If this is a contingent interest triggering it?DECISION – This violates the RAP as it went beyond 21 yearsREASONINGYes it is a contingent interest – subject to a condition precedent to Imperial Oil’s lease expiring before it vests in Scurry-RainbowCommon law RAP: (stat reforms had not come into effect yet)1. Contingent interest rule applies 2. Creation of interest grant took effect3. Lives in being: none (no reference to human life) 21 period used theContingent interest violates the common law rule, because the uncertainty about vesting could persist for more than the perp periodsCourt holds RAP doesn’t apply because:Top leases are encouraged in commercial cases, because it encourages Imperial Oil to use it or lose itNot bound by the rule because underlying purpose of the rule isn’t reflected in these circumstances Essentially these are policy reasons – alienability etc. Are there issues with the Court doing this? Technically falls under the rule but outside the purpose the rule is supposed to address (about families, land not being tied up for a long period of time, alienability of land)Usually its families involved in the RAP rule – BUT, this is a commercial issue. This does not impair alienability – also a consequence-oriented reasoningCourt afraid that if invalidated, there are lots of similar leases like this that are being relied upon and all would be invalidatedPragmatism of common lawDesigned as incentivizing – lose interest if Imperial stops producing oil***Problems on 575 and 604 – Answers on TWEN CHAPTER 8 – LEASES, LICENSES AND BAILMENTSLeases Considered interests in land that are in rem rights and therefore create obligations on the part of third-parties. Lessee/tenant has a right to exclude third-parties. Tenant have right to exclusive possession – creates an estate in land. Fee simple owner temporarily gives up possession in land Time-limited right of possession in land Both leasehold interests and the reversion (held by fee simple estate holder) are presumptively alienable. Allow for a greater extent of customization in comparison to an estate in fee simple. This is permitted because leases are temporary – allowing parties to do what they want is less of a problem. Residential vs non-residential leases Two bodies of law governing leases: Residential leases are governed by the Substantial law reform of residential leases in Canada Non-residential leases (commercial leases) are governed by common law A lease must relate to a given property between ascertained persons – landlord(s) and tenant(s)Terms of a lease can dictate alienability – if absent of language re alienability =alienableCommon Law Approach to Leases Interface between contract and property.In rem rights Interests governed by terms of agreement. Law governing leases is deferential to the parties in the agreement. When the tenant has possession, the landlord remains seisen of the estate no gap in seisin.Four Types of Leases (1) Fixed term lease – term set out in a lease for when it expiresWhen a tenancy is for a fixed term, its starting date must be ascertainable, and its maximum duration must be certain or ascertainable at the commencement of the term. (2) Period lease (periodic tenancy) – leases for recurring periods of time, month to month lease can be cancelled by other party with notice(3) Tenancy at will – can be terminated at any time by the landlord or the tenant (4) Tenancy at sufferance – arises when the tenant overholds afters the expiration of a term Commonalities Between Lease Types – they do not last forever and they are customizable. ***Disputes arise when it is uncertain whether the agreement created a license or lease. LicensesWithout a license, it would be considered trespass. Personal permission to enter a piece of land. It can be revoked at any time. It is not an exclusive right to possession, rather it is purely personal or contractual. It does not create an estate in land. Does not give holders a right against third-parties - no right to exclusionIt is not an in rem right but rather an in personam right – only applies to the party in possession and the licensee LeaseLicenseGrant of exclusive possession: creates an interest in land (proprietary right – chattel real). An In rem right. A lease is binding on 3rd party purchasers even without notice. (major distinguishing feature)Protection of legislation for tenantGives the holder an exclusive right of occupation of the land, it is a demiseReversioner is also excluded except for right of inspection and repairRent is a central feature but not necessaryIf tenancy is precluded by statute or if there was no intent to enter into a legally binding relationship- no leaseLimitations to which the occupier can put land to do not negate a tenancyPermission to do, that which would otherwise amount to a trespass. License simpliciter is an in personam right (NOT an interest in land) even though it may relate to a given parcel of land.The license is not binding on a 3rd party purchaser of the land over which the license is granted (unless notice is given).A licensee of residential premises may not enjoy the statutory protections afforded to residential tenants.A license can be revoked at will, but some exceptions exist at common lawCan only enter to the extent that permission was givenPurely contractualException to interest in land: profit a prendreHow to Distinguish between a lease and a license: > Key is exclusive possession: if it has been granted then generally the court will find a lease. Concept of exclusive possession is a question of fact: Courts are willing to look beyond the contractual terms of a relationship to determine if there’s a relationship of exclusive possession and if contractual terms are reasonable). > Look at all the circumstances. It is not enough to look at terms and determine if thing is labeled as a lease or license because the question is one of substance, not form. (e.g. even if the thing states that the tenant “shall not have exclusive possession”, you need to determine if the tenant, in fact, does enjoy exclusive rights—if so, a tenancy will be found) > Rationale: protect the tenant. Subjective intention of parties is irrelevant — courts will only look at what is actually occurring between the parties. Fatac v Commissioner of Inland Revenue lease v license: intentions re exclusive possessionFACTS – In 1991, Puhinui granted Atlas the right to operate a quarry (part of land) for 12 years, renewable for a further three years. In 1996: Puhinui agreed to sell entire property to Mt. Wellington. Case involved a determination of which of the parties to the sale agreement was liable for the payment of GST. This in turn depended on whether the lands were “tenanted property” as described in the doc. ISSUE Distinguishing between tenancies and licenses. DECISION – Arrangement with Atlas was a license.REASONING Prior: Used to be a straight-forward test– is there exclusive possession present? Now: It moved to a broader, more malleable test look at the INTENTIONS OF THE PARTIES and whether or not it WAS MEANT TO BE A PERSONAL PRIVILEGE or IF IT RELATED TO AN INTEREST IN THE LAND and therefore an EXCLUSIVE POSSESSION. Exclusive possession is the single most determinable test single variable essentialism. Limitation upon the purposes to which the occupier can put the land do not negate a tenancyExclusive possession is not synonymous with an unqualified range of permitted uses. Where the occupier is found to have a mere license it will be because the initial appearance of a right exclusive possession is found to be critically undermined by the potential for termination for reasons extraneous (inessential) to the occupation of the exclusively occupied area i.e. occupation pursuant to an employment relationship, a purchaser in occupation, a mortgagee in possession, occupation pursuant to the holding of an office and exclusive occupation of an area that is small in proportion to the total area affected by the agreement. Rent is an important indicator of an intention to be legally bound but its absence does not per se negate a tenancy.In the case at bar, the focus is the exclusivity of Atlas’s right of occupation not the terminology of the partiesHowever, terminology can indicate the intention of the parties, but it is it not determinative. Atlas’s right was far from exclusive – it allowed Mt Wellington the right to all quarried materials other than basalt, allowed them to set up a screening plant in the quarrying area, and to stockpile and remove all material other than basalt, so long as this did not impede Atlas’s quarrying operations. Conclusion reached in this judgment is that exclusive possession is the fundamental test. For exclusive possession to be meaningful there must be a minimum finite term, whether fixed or periodic. There is none in the case at bar.RATIO – Exclusive possession is the fundamental test to determining lease v license. Interpret the terminology to gain insight into whether the parties intended to create a right of exclusive possession or if it is simply a personal agreement (license). How is the occupation pursuant to an employment relationship a license? You’re continued employment is contingent for you to be allowed on the land. You don’t have an exclusive right visa via landlord and employer. Metro-Matic Services v HulmannRATIOWords that may indicate lease: Exclusivity, Cannot lease to anyone else, They can install equipment whenever (unimpeded access); All essential elements are met (rmb they’re necessary but not necessarily sufficient), but, clause 6(B) may indicate it’s more of a license since access must be specifically grantedFACTSCase involving the installation of washing machine in the building owned by the landlord. An apartment building has a laundry room in the basement. Pursuant to a written agreement entitled “Lease Agreement” between plaintiff-tenant and landlord, plaintiff installed coin-operated washing and drying machines in the laundry room of the apartment building. Owners of the building sold it to the defendants, who obtained an assignment of the lease agreement (remainder of the term) and, after taking possession of building, required plaintiff to remove machines. Factors for Lease Landlord promises that there will be no parties that will disturb the possession of the tenant. This was seen in favour of a right to exclusive possession. Factors Against Lease Landlord is promising to allow tenants of building to access the laundry room. Factor against the lease because it is the landlord saying he will allow access, not the laundry company per se. Employees of the tenant will have access to premises - Clause 6(B)If it was a lease, this seems superfluous. DECISIONUltimately concludes it is a lease because it is called one, and it is interpreted as a right to exclusive possession; based on language; access provisionCalling it a lease is not determinative, but it can show the common intentions of the parties. However, this is a borderline caseThe Nature of the Landlord’s and Tenants Interests At common law, a right of the lessor to enter the premises must be negotiated with the lessee. The interest in the property held by the lessor under a lease is referred to as a reversion, and both that right and the leasehold interest may be transferred. A transfer of a leasehold can occur in two ways: (1) The tenant may transfer the entire remainder of the lease to new tenant (called an assignment)Assignee will be placed in a direct tenurial relationship with original landlord. Don’t have privity of contract but have privity of estate. Real covenants apply (important parts of the contract)(2) The tenant may transfer some smaller portion of the lease (a sub-lease)In the case of a sub-lease, the original tenant retains an interest in the lease. There is no privity between the landlord and the sub-tenant.Landlord cannot sue sub-tenant. If the sub-tenant faults, and the tenant stops paying rent to the landlord, then the landlord’s recourse is to the tenant. Landlord has right to re-enter once the lease has been dissolved because there is no longer a right to exclusive possession. Privity of contract and Privity of estateNew tenant does not have privity of contract. Only the original tenant and landlordWhat does new tenant have then? – privity of estate. Which means not all terms of the original contract are applicable to the new tenant only the real covenants rules which isL = landlord; T = tenant; S = sub-tenant (new tenant); A = assignment4395470180975LL00LL3604530205564L200L22757278244475L100L11661822195607LL00LL233464180651LL00LL32532741128880 #1 #2 #3 #445979541898650358572326583400306864419774200212077910596400480468026764001468755163830005836606155400229681119920004416425200714T00T3258765264795T100T12123886225168S00S1214350222452T100T15369668175099A00A233045168329T100T11791478231075048920261288100459668411089505215119402100229884112922004398969112584STTz00STTz233099145658S00S = Privity of estate = Privity of contractDiagram 1: Lease & subleaseT1 = landlord against new tenant (T2)No direct legal relationship between original landlord and sub tenant?(T2)Therefore, L cannot bring a claim against T2 butt they would against T1. They would have the right of re-entry Diagram 2:?L T2 =?no privity of contract but privity of estateAssignment so not even term in ordinal agreement are binding just covenant terms of covenant that touch concerns of landHave to distinguish between terms which are real covenants L T1 privity of contractT1 T2 = privity of contractDiagram 3:?When landlord 1 sells a piece of land to landlord 2, then a privity of contract remains between the tenant and landlord 1 and privity of estate is formed between the tenant and landlord 2. Since privity of estate is present, real covenants apply. L1→ L2 landlord transfer?L2 T = privity of estateL1 → T = privity of contractReal CovenantsBind an assignee or a party that purchases the landlord’s reversion SUCH COVENANTS RUN WITH THE LANDOnly the terms that ‘touch’ or concern the new tenant (Merger Resturants) Ie, right to exclude.? Only the real covenants that are about the interest in land, not other things that may have been a purely contractual relationship between the original contract CRITERIA ON DISTINGUISHING REAL CONVENANTS ON P.619Merger Restaurants v DME Foods real covenants = touch or concern subject matter of leaseFACTSMerger operates a restaurant and DME operates a restaurant on the neighbouring property. The properties are almost contiguous and owned by a common landlord. Lakeview became the landlord when they bought the property from the previous landlord.Lakeview re-assigned some of Merger’s parking to DME when DME was under construction. Both Merge and DME are arguing that their lease grants them exclusive rights to parking stalls. Privity of contract remained between Merger and the previous landlord, therefore Merger cannot take action against Lakeview. BUT, the question is whether the parking stalls are real covenants. ISSUE: Do the provisions in Merger’s lease restrict use of the parking areas in lot 2 to Merger and other tenants of lot 2 and their employees? Is Lakeview entitled, from time to time, to alter the common areas, including parking spaces, on lot 2, and to designate parking spaces on lot 2 for the exclusive use of DME’s restaurant and its patrons? Whether the provision in the Merger lease granting a common area rights to Merger is a covenant running with the land, and consequently binding upon Lakeview as the successor in title to the lessor, Brousseau Bros. JUDGMENTTraditional test for a covenant to run with the land is that it MUST TOUCH OR CONCERN THE SUBJECT MATTER OF THE LEASE. To run with the land, covenants must either affect the land itself, that is, the nature, quality or value of the thing demised; or the value of the land at the end of the term. There is no doubt that the extent and the availability of parking spaces in a shopping plaza will directly affect the nature and value of the land. Merger’s common area rights touch or concern the demised premises. Parking facilities are so essential to the operation of Merger’s restaurant, and to the well-being of both Merger and Lakeview, that such rights cannot be considered as merely collateral to the demise. The covenant is not expressed to be personal therefore it is a real covenant. Sundance Investment Corp v Richfield Properties reasonableness to withhold consentFACTSRichfield owns a small plaza. Two major tenants lease the entire plaza. Sundance holds a lease over 60,000 square feet for a 25-year term from February 1, 1973 to January 31, 1998. Under the terms of the head lease between Richfield and Sundance, Sundance may not assign or sublease any of the lease premises without the prior written consent of the lessor. This consent is not to be “arbitrarily” or “unreasonably” withheld, with the further qualification that a withholding of consent is deemed not to be unreasonable if the other major tenant objects to the “nature of the business” to be carried on by the proposed subtenant. Richie has refused to consent to the proposed sublease of Swiss Chalet operating within a 9,600 square foot portion of Sundance’s lease this refusal stems from Beaver, the other major tenant. Parking availability is the primary reason for Beaver’s objection because the Swiss Chalet customers would be competing with the Beaver customers for parking. Swiss Chalet is problematic because of static parking (people stay for longer). ISSUE – Whether Richfield has unreasonably withheld its consent to a proposed sublease by its lessee, Sundance. Does the issue of parking attach the nature of the business? DECISION – Richfield did not unreasonably withhold the consent. REASONINGMajority: Burden of proof is on the tenant to show that the landlord has unreasonably withheld his consent, and it is not on the landlord to prove that he was justified in withholding it. Underlying principle is that consent is not unreasonably withheld if the landlord’s own financial interest will be adversely affected. It is immaterial whether this adverse effect results from competition in sales or from other causes such as congested parking. Parking is not an extraneous matter goes to the nature of the proposed business. Richfield is partially compensated by a percentage of Beaver’s sales. If Beaver’s sales go down due to decreased parking availability, Richfield is also adversely affected. The test is one of reasonableness and what a reasonable landlord would do in the situation. Dissent: Parking is not about the nature of the business. It is not an objective to the nature of the business, but to its success. If you are deferential to landlords, that is encouraging a restraint on alienation.A preferable construction is one which imposes fewer restraints than more. If volume is increased, the landlord prospers. If volume is decreased, the landlord should be allowed to decide that it no longer cares to bear any of that risk. If the submissions of Richfield were given effect, Sundance would be restricted to subletting unsuccessful, even insolvent, subtenants for fear that a successful one would present a risk of congestion of the parking facilities associated with the premises. Test of reasonableness is what reasonable landlord would do in circumstances - on facts, a reasonable landlord would not consent to assignment of lease that would cost him money (prevent him from making what he would have otherwise made from Bs profits).Lease indicates that tenants may object to potential tenant, based on nature of the business—built into Sundance’s lease. Also said Landlord themselves could refuse if they were reasonable.Landlord refused to let Swiss Chalet move in, as their business “touched and concerned” the existing tenants. Test to determining whether consent is UNREASONABLY withheld: (p.622)1. Burden is on tenant. Test is whether a reasonable person would withhold consent, regardless of reasons of specific landlord. 2. Court can only use information available to landlord at time of refusal. Landlord’s refusal need only be reasonable, not necessarily correct 3. Question must be viewed with existing provisions of leaseincluding rights of tenant to assign and right of landlord to deny. 4. Landlord may withhold consent if assignment diminished value of rights or its reversion. Refusal will be unreasonable if designed for collateral purpose 5. Financial position of assignee may be a relevant consideration (i.e. to get the failing tenant out of the premise so he could increase rents and lease to someone else- using dissent reasoning from sundance this would not be ok, but majority might say that landlord has a right to refuse on financial incentive) 6. Reasonableness - question of fact- must include commercial realities of the marketplace and the economic impact Factors in determining if the landlord withholding consent is REASONABLE:1) The landlord should be protected from the land being used in an undesirable way or by an undesirable tenant 2) Refusal must relate to the relationship of the landlord and tenant and the subject matter of the lease. 3) Landlord’s conclusions need only be reasonable (may be reasonably mistaken) 4) A refusal may be upheld even if the proposed use is permitted by the lease 5) The landlord may consider his own interests exclusively, need not consider the tenants Implied Covenants (these are real covenants)At common law, the obligations of landlord and tenant are governed by the agreement between the parties though some obligations are presumedImplied as part of any lease agreement at common law unless explicitly disclaimed?Covenant of Quiet EmploymentUnder the common law, the terms of a lease are a matter of contractual intention, and freedom of contract is the guiding principle. One term is central to the tenant’s rights under a lease – the right to quiet enjoyment. (Implied covenant)Covenant of Quiet Enjoyment Neither the landlord or anyone claiming under landlord will interfere with tenant’s possession. Can be noise if it interferes with ability to use and possess the property in an effective way or it could be someone coming and claiming to take over the premise with permission from landlord Southwark LBC v Tanner covenant of quiet enjoyment; take as you findNote: Case about residential leases. We know that residential tenancies across common law has been reformed by statuteNo term in the statute regarding covenant of quiet enjoymentCommon law understanding of covenant of quiet enjoymentFACTS – T complains about hearing all the sounds made by neighbours. However, the neighbours are not unreasonably noisy; rather, T’s property has no sound insultation. Covenant for quiet enjoyment in T’s tenancy agreement states “The tenant’s right to remain in and to enjoy the quiet occupation of the dwelling house shall not be interfered with by the council”. DECISION It is sufficient that the tenants must reasonably have contemplated that there would be other tenants in neighbouring flats. Soundproofing is an inherent structural defect which the landlord assumed no responsibility. REASONINGCovenant for quiet enjoyment is a covenant that the tenant’s lawful possession of the land will not be substantially interfered with by the acts of the lessor or those lawfully claiming under him. It is about peaceful or undisturbed possession of the premise. In principal can noise violate the covenant of quiet enjoymentTenant will not be interrupted in enjoyment → significant noise could violate a tenants ability to use the premise in the ordinary wayFor present purpose, two points about the covenant should be noticed (1) There must be a SUBSTANTIAL INTERFERENCE with the tenant’s possession – this means his ability to use it in an ordinary lawful way. (2) It is a question of fact and degree whether the tenant’s ordinary use of the premises has been substantially interfered with. To constitute the breach of the covenant for quiet enjoyment, there must be some PHYSICAL INTERFERENCE with the enjoyment of the demised premises, and that a mere interference with the comfort of a person’s using the demised premises by the creation of a personal annoyance as might arise from noise, invasion of privacy, or otherwise is not enough. Second issue is that it is a covenant that the tenant’s lawful possession will not be interfered with by the landlord or anyone claiming under him. It would be entirely inconsistent with this common understanding if the covenant for quiet enjoyment were interpreted to create liability for disturbance or inconvenience or any other damage attributable to the condition of the premise. Covenant for quiet enjoyment is about future acts of interference. The complaint isn’t that their neighbours are unusually noisy, it is about a lack of insultation, which existed at the time of signing the lease same state as T got it. PRESUMPTION THAT THE TENANT TAKES THE PREMISE AS IT IS AT THE START OF THE LEASE. In Pellatt v Monarch the plaintiff was warned about renovations taking place in her unit and was offered accommodation and the ability to terminate lease if need be, by the landlord. Despite this, the Court still found that the noise, the odours, and the mess, constituted an invasion of the tenant’s rights to the “peace and comfort” therefore, breach of covenant for quiet enjoyment. ***Canadian courts have tended to follow England in their extension of what could constitute a breach of Quiet Enjoyment, but there has to be consent or active role of landlord when activities of tenants are dealt with. If the noise is a result of the permission of the landlord, this could qualify. Covenant against Derogation from the Grant Deals with things that a landlord might do that may undermine the purpose for which premises are being leased. Makes premises materially unfit for the purpose they were leased out. Petra Investments Ltd v Jeffrey RogersRATIO The test is whether the action complained of rendered the premises unfit or materially less fit to be used for the particular purpose for which the demise was made. FACTS – L owned small shopping centre and the units were rented to firms marketing mainly women’s clothing. T entered into a 25-year lease. The shopping centre was not a financial success and L then converted a central atrium into a commercial space which was then leased to a music megastore. After the store opened, T’s trade did not improve, which they attributed to the new store. ?It had complained about the effect on its business of the works done to create the extra space. L granted it a service charge reduction in full and final settlement of any claim it might have arising out of the creation of the Megastore (Forbearance). Ultimately, T argued that the creation of the Megastore was in breach of the covenant not to derogate from grant since it gave the impression that the mall was no more than the Megastore. T ceased trading and L sued for unpaid rent. ISSUE – Was this conversion a derogation from the grant? Is changing the tenant mix a derogation in the case at bar?Did this change undermine the purpose of the lease agreement entered in to?DECISION - The plaintiffs had entered into an agreement to accept reduced rent during the new store’s construction, this constituted a new agreement and over-rides the initial agreement regarding common spaceREASONINGThe exercise involves identifying what obligations, if any, on the part of the operator can fairly be regarded as necessarily implicit, having regard to the particular purpose of the transaction when considered at the time the transaction was entered into. Examine circumstances subsisting at the time of the original transaction – obligations expressly undertaken by the parties etc.The landlord was free to use the retained land to construct another store for a new tenant; however, the terms of the original lease produced an implied obligation on the landlord not to alter the common area so that they would lose their character as a retail shopping mall overrode by new agreement. If did something to change premise to change from a shopping mall then it would make it materially unfit under the agreement?But it is whether is made into something other than a mall or just changed tenants → question of degree?Changing the mix of retail is not enough Line drawing exercise as to how constrained the landlord is. There are things the landlord could do that would completely alter character of the building But the court is reluctant to be too restrictive, unless there is a specific term saying this building has to be specifically dedicated to ladies’ fashion, they want to have the ability of the landlord to adapt to market changes. Overlap Between Quiet Enjoyment and Derogation from Grant Scenarios could overlap. Derogation is conceptualized by particular lease in question. Standard for breach of quiet enjoyment is less specific: Turns less on what was the particular purpose of the lease and is more general – does it amount to substantial interference with ordinary use. Residential Tenancies and LicensesResidential tenancies act“periodic tenancy” means a tenancy under a residential tenancy agreement that is renewed or continued without notice, (ii) with provision allowing for renewal or continuation of the tenancy without notice, that part of the tenancy that arises after the respect to a fixed term tenancy that contains an end of the fixed term tenancy, and (iii) with respect to a fixed term tenancy that does not contain a provision referred to in subclause (ii), the part of the tenancy that arises after the end of the fixed term tenancy, where the landlord and tenant by their conduct expressly or impliedly indicate that they intend that the tenancy be renewed or continued after the end of the fixed term tenancy;Page 660 – Function of residential tenancies Function of Residential Tenancies Legislation – Residential tenancies act10 Functions of Residential Tenancies Legislation: common law was seen to be inadequate, can also protect reliance interests, protect not fully rational or informed tenants (courters are that more onerous terms on landlords that you can effect the supply of available residential rent places – rent to commercial entities instead)(1) Greater security of tenure for residential tenants Section 6, (& s.2 of the Residential Tenancies Ministerial Regulation), 14(4), & 29(4)(a)S.6? it limits the purposes for which a landlord can terminate a periodic tenancy; stops arbitrary terminationMonth to month most commonIndicates a notice of termination is not in effect unless its for a prescribed reasons or reasons outline in s.11 or s.12Relative or landlord wants to come inAttached or semi detached and it is sold and new owner wants to request termination?Landlord in tends to demolish or embark on severe construction/renovationsS.11 employeeSection 14(4): can’t increase rent more than once in given year(2) Increased notice periods for termination Section 8 Landlord must give 3 months’ notice for termination(3) Fixing of standard obligations between landlords and tenants in a rational and fair manner Landlords obligations: s. 16 (especially 16(c)), 17, 18, 19, 23 s.16(c) premises must meet a limited standard as prescribed by health housing standards - warranty of habitability?s.16(b) covenant of quiet enjoymentS.17 requirement that landlord provide a service of agreementS.18 tenant must have certain info about landlordS.19 landlord and tenant should inspect premise prior to or after moving in (one week); inspection report providedS.23 regulates landlords power to enter onto the premise; no power to enter without consent unless emergency or belief of abandonment Tenant’s obligations: s 21 and 22S.21 lays out the tenants covenant - rent paid when due and not interfere with rights of landlord or tenants; no illegal actsSection 22: approval to assignment of sublease(4) Increase in tenant’s remedies s. 28 and 37(1) S.28(1)(a) tenant can terminate a lease if the minimum housing standards are not met?(5) Curtailment of landlords’ self-help remedies s. 23, 24, 34 & 34.1 (6) Prohibitions on the bargaining away of statutory rights s. 3 – tenancy agreement cannot violate statutory rights A tenant can waive rights/benefits/protection of the act3(2) residential tenancies act takes precedents over the writing of any agreement(7) Elimination of anachronisms (holdovers) affecting the general law of landlords and tenants ss. 27(5), (6) s.27(5) in circumstances where a tenant can or does repudiate the tenancy the landlord must make repudiation simple and take steps to find a new tenant or you will not be able to get that amount(8) Establishment of dispute resolution procedures designed to be informal, effective, expeditious, and inexpensivePart 5.1 Administrative tribunal set up to streamline the process(9) Establishment of landlord and tenant advisory board Section 59 (10) Rent control Alberta has not implemented rent control but section 14(4) limits the frequency of rent increases. Rent control = limits on how much rent can be increased year to yearIf you inhibit what a landlord can charge, you take away the incentive to renovate, build new properties etc. General Purposes:Why was the common law in need of reform for residential tenancies? Commercial leases are still guided by common law. Gives greater security to tenants because:There is a knowledge imbalance. Tenants need to be protected, they are the vulnerable party. Departing from deference of autonomy to protect the individual.This is someone’s home, landlord sees it as an investment. Different perspective motivates certain protections.Reliance interest in a property that becomes someone’s home. Consumer context – economic assumption is fully informed and rational (commercial-context).Maybe for your typical tenant, this does not apply as much. Bailment the delivery of personal chattels on trust, usually on a contract, express or implied, that the trust shall be executed and the chattels delivered in either their original or an altered form as soon as the time for which they are bailed has elapsed Bailment can be likened to a “lease” of a chattel, for it involves at its core a transfer of possession of goods from a bailor to a bailee. Bailment is a temporary transfer of personality (personal chattel) under which possession of the goods of a bailor is handed over to a baileeBailor – person with right of possession initially, gives up possession temporarily Bailee – gains possession temporarily, has to give it back up to the bailorCan have bailments that aren’t a contractUsually but not always under contract, If you find goods under circumstances that it would be clear that they belong to someone else, you can be considered a bailee as a fact that you have taken possession of goods knowing they belong to someone else. Bailment COMES WITH CERTAIN OBLIGATIONS WITH THE REQUIREMENT OF THE CHATTEL BE RETURNED BACK TO BALIORTIME LIMITED RIGHT IN CHATTEL (e.g. dropping off your laundry, renting a car) May arise where one party voluntarily takes control of another party’s chattelsLike leases and licenses, the question is whether the possession has been transferred – from bailor to bailee. For example, I park my car in a commercial lot, I may be regarded as having balied it to those controlling the lots. If I retain control over the car, a license has been granted to the “bailee”. Bailment obligationsA bailee owes a duty to exercise reasonable care in relation to the chattels of the bailor (according to the standard of prudent owner) – Letourneauu; PunchWhere the bailor establishes that damage to the chattel occurred while it was under a bailment, the onus is on the bailee to establish either:1) that the BAILEE EXERCISE REASONABLE CARE; or 2) that the FAILURE TO EXERCISE REASONABLE CARE DID NOT CONTRIBUTE to the loss (Letourneau; punch)A bailor for reward is under an implied duty to ensure the chattels are reasonably fit and suitable for the purposes of the hire (Miller)The default obligations of bailors and bailees can be modified or limited by contractual limitation clauses (as long as there is privity of contract)(Punch)A sub-bailee (or assignee) owes a duty to the original bailor to exercise reasonable care, despite an absence of privity of contract (Punch) Mercer v Craven Grain Storage bailment possible even if can’t retain specific chattelFACTSPlaintiffs are three farmers working in a partnership who took part in Farmers Cooperative Grain Marketing Scheme, through a company called Crave Grain Storage – whereby they disposed of their grain. Craven’s primary function was to provide storage for the grain deposited by members of the scheme and then to release grain to Craven Grain Limited for sale by the latter company. Plaintiff’s deposited grain in which it was mixed with grain already in possession of Craven from other farms. Craven Grain went insolvent and the farmers were never paid. Farmers sue because Craven was a bailee of the grain and title remained with the farmers they want bailment.Craven was arguing for sale of goods difference is that this transfers title to Craven. ISSUE – Was this a bailment or a sale of goods? Why does this matter? Craven has more outstanding debts than assets. Farmers wish to claim that the grain they transferred is part of their assets, and then creditors cannot get their hands on them – they do not want the grain claimed by the creditors. Main Obstacle to Bailment Claim: The grain is inter-mixed. Conceptually, our understanding of a bailment is that someone is under a duty to redeliver chattels at the end of the bailment. DECISION Best way to give effect to intention of parties is to think of this as bailment. Craven was imply storing the grain, not purchasing it. Property title is held in common All the farmers together become common owners of mixed bulk of grain. Once grain was added to the storage, it was mixed with others therefore it was a sale. However, farmers maintained collective interest in each other’s grain and thus held a collective title to the goods.RATIO – BAILMENT IS POSSIBLE WHERE IT IS NOT POSSIBLE TO GET SPECIFIC CHATTEL BACK. Letourneau v Otto Mobiles EdmontonFACTS - Couple needs trailer repaired. Defendant tells couple to drop it off after hours at adjacent property belonging to different business. The trailer gets stolen overnight. Arguing repair shop owed a duty of care to looking after trailer once it was in their possession. Defendant argues there is no bailment as there was no possession, they wouldn’t do so until the next morning. ISSUE – Did the relationship of bailor-bailee exist between the Plaintiffs and Defendant? DECISION – Possession is a contextual inquiry – the plaintiffs did as they were told and this was the way the defendant’s instructed them to transfer possession therefore, bailment is established. Defendant’s did not discharge the burden of proving that it satisfied the duty and standard of care required. Bailment - Was there indeed a bailment?Bailment does not require a contract What is transferred is the possession of the article rather than title and it must be intended that the subject matter of bailment be returned to the owner or delivered as instructed by the owner either in an original or altered form.Defendants ArgumentDefendants’ argument is they never received the trailer so there is no bailment.Court does not accept this – a change of possession between bailor and bailee occurred; instructions provided to Letourneau indicate that there was an intention to accept the goods once they were left on the lotNo issue on whether goods were in possession of Otto MobileDid Otto Violate Their Duty? Once the bailment is established, in bailment there is a reverse onus Reverse onus it is the bailee that has to establish it either didn’t breach standard of care, or what it did didn’t cause the damage This is so because the bailee has better information to establish what happened, bailor isn’t around – informational imbalance The bailee has undertaken some kind of obligation, it seems fair that the bailee is in a better position to have information STANDARD OF CARE: Balanced test asking what the prudent owner would do under the circumstancesas a prudent owner would do under the circumstances. If for example, the bailment is stolen from the employee or by an employer, the Bailee is liable to the bailor. To escape liability must prove that reasonable care was taken or alternatively that loss was not caused by the baileys failure to take care.?Reverse onus exists because defendants are in a better position to provide information/evidence and establish what happenedThe bailor doesn’t have possession! Should they be expected to prove what happened without the information of proximity?Unlike in typically negligence cases, the bailee has undertaken implicitly some form of obligation and should be required to provide response to their failureWaiver of liabilityA bailee by contract may insert a waiver clause which is strictly construed and moreover if the waiver is for negligence, then it must be either explicitly made or implied unambiguously and thenIf you are bailee you can choose to assume the bailment conditions that you negotiate with bailorUsed to have three categories:Sole benefit of bailor: had to establish gross negligenceMutual benefit: ordinary negligenceSole benefit of bailee: slight negligence would be sufficient COURT DOESN’T FOLLOW THIS APPROACH – have an all things considered balancing approachMove away from rigid categoriesQuestion of gratuitous vs bailee for reward is still relevant (p. 673) Whether bailee receives a benefit or not (gratuitous bailee vs. beneficiary bailee) Holding on to laptop your friend left behind: gratuitous bailee; Being paid to repair laptop: beneficiary baileeDo take into account whether bailee was being rewarded as part of the assessment of reasonable care TEST: - ACT AS IF YOU ARE A PRUDENT OWNER OF YOUR OWN GOODS Not met in this case Defendant didn’t provide safe place to store, doesn’t live up to standard of what a prudent owner would do with his or her trailer.Bailment & Sub-BailmentBailee can transfer property to a third partyBailor -----head bailment → bailee ----sub bailment sub-baileeWhat rights does a bailor have against the sub bailee?May be authorized, implicitly, explicitly or be not authorized?Modern rule: is that the bailor DOES have a cause of action against the sub bailee for either damage or for loss. Circumstances would give right to a RIGHT TO TERMINATE THE HEAD BAILMENT so long as the SUB-BAILEE accepted the good WITH THE KNOWLEDGE that the sub-bailee DID NOT HAVE TITLE.? Nothing prevents the bailor from taking actions against third party for damage or loss in regular tort lawBasis of bailors claim to Sub Bailee: not on contract. Only way is to move against them on the terms of the sub bailment = terms of sub bailment is binding on the baileeIs the bailor affected by the terms of the sub-bailment?The terms would be binding on the bailor including an exculpatory clause in the sub bailment contract.The bailor-bailee relationship apply only to non-real property Punch v Savoy’s Jewellers LtdFACTS – P had expensive ring that needed repairs, took to Savoy in Sault Ste Marie, Savoy had to send ring to Walker (W) in Toronto to complete repairs, postal strike began so W sent ring back via CN Rapidex delivery. Ring never delivered by CN to D, CN delivery service had limited liability clause of $50, P sued all of them.Punch (P) Savoy (D) Walker CN ISSUE – What is each sub-bailee responsible for? Is CN insulated to claims, particularly to Punch, even in the face of the waiver liability? DECISION – All were liableSavoy and Walker are liable to Punch for breach of duty as baileesCN is also liable to Punch CN in its bill of lading (contract for transit) has a limitation of liability clause, Walker agrees with CN to this clause – but does it limit liability to Punch?Duty owed by different bailees is described as the level of a prudent owner Reverse onus applies, once it has been established there has been damage to chattel while in possession of bailee, it is up to bailee to rebut the presumption of liabilityARGUMENTheld CN Rapid X failed in its duites to Plaintiff. CN Rapidex says they had a clause in the contract that limits their liability to 50$. At court of Appeal court says Savoy’s is bailee for reward, and Walkers and Rapid X are sub bailees for reward. So each have a prudent standard of care, and each need to prove they met this standard of care.Duty owed by Walker to Punch:Sent ring without insurance. Did not meet standard of prudent owner – ring was expensive and it should not have been sent with an unfamiliar carrier. Walker is being held under a duty to Punch despite lack of privity – privity of contract not necessary for liability of bailment. Duty owed by Savoy:They consented to use of CN; this was an unfamiliar carrier. No general duty to insure goods, but insurance for value of goods is a term of transportation. Prudent owner would make sure that insurance coverage was available for true value therefore they were in breach. Duty owed by CN:Says we can pay you the 50$ and that is it. Court says you cannot hide behind this waiver clause. Says clause does not cover theft of the goods – this loss was classified by unexplained, but up to CN Rapid to show theft was not the case and that they carefully select their drivers. They could not do this, so they are found liable. They also find S and W did not authorize the waiver since it was not known to them, so they are not bound by this (hard for D since they are thinking they are operating under this waiver and P says I am not bound by this because I did not agree to it – see other side of the coin)!CN has a duty to Punch and has to pay the full amount to clearly hasn’t lived up to standard of prudent owner (ring was stolen). Main defence is limited liability clause. Court decides this clause doesn’t apply at all. Punch and Savoy didn’t consent to this limitation. Only applies between parties to the contract. Exclusion clause must be expressly or impliedly agreed upon by Bailor.The clause does not apply to Punch or Savoy, as neither consented. Exemption clauses are narrowly construed – Clause protected CN from negligence, but not from vicarious liability for employee’s unlawful act of theft.Liability clauses (exemption clauses) – would only apply between CN and Walker due to contractual nature. If CN proved that they used reasonable care in hiring, or if employee testified to taking reasonable care in delivery, CN could have been protected. *** Can have both assignment of bailment and sub-bailment. This is different from sub-lease where a sub-tenant has no privity of contract or estate, so it is not possible to sue under original lease agreement – NOT the case for sub-bailment. RATIO – Obligations of bailee and privity do not work the same as subtenants and landlords. It is possible to limit liability contract, but these types of clauses are subject to privity of contract. Are there problems with this judgment? CN holds a great amount of responsibility and they did not know what the value of the ring was. Maybe they would have charged more if they knew the value or the ring or even chose not to ship it. However, it would also be unfair to Punch if they were not compensated for the lost ring. ***CN could limit their risk by inputting a clause in their contract that Walker would indemnify CN for any liability for X amount. Miller v SinclairFACTS – Millers rented horses from Sinclair Riding Stables. George Miller requested slow horses for himself and his daughter, but rented a more spirited horse for Michael Miller, his son. During the group ride, Michael fell from his horse injuring his left hip. The stirrup had fallen off while he had been riding and this caused the fall. ISSUE – Is the bailor liable? Was there an implied warranty in bailment for reward? Was the waiver enough to avoid liability? Does volenti non fit injuria apply?DECISION – Defective stirrup caused Michael to fall. There was a breach of implied warranty against which care and skill could have avoided and negligence in not ensuring that such care and skill was used in securing the strap or observing that it was defective. REASONING Warranty implied – referred to Hyman v. Nye where court found person who lets out carriages is responsible for defects “which care and skill can guard against” Waiver not enough: he was underage and couldn’t bind himself, also waiver too vague – didn’t include waiver against negligence Volenti Non Fit Injuria doesn’t apply because would have to agree to risks of riding a horse with an improperly secured stirrup for it to applyWhat is Bailment? It is not purely contractual (Punch). We know that liability for bailment can be limited by contractual terms, so there is a contractual element to it. There are cases where there is no contract at all – simply taking possession of someone else’s chattels with agreement. Minicello v Devonshire Hotel Special lossesFact: P parks at hotel parking lot and gives keys to attendant and tells him be careful there are valuables inside. Car gets towed, and there is a waiver on the parking ticket saying reasonable care negates any liability to broken valuables.Issue: who bears liability for the special loss?Analysis: court finds the bailee did not meet the standard of care. Say that P saying there was valuables in the truck was sufficient in making them bailee for the items in the trunk as well (responsible for these special losses). = HOTEL IS RESPONCIBLE FOR LOSS.RATIO: BAILEE NEEDS TO KNOW IN ADVANCE HOW SPECIAL AND IMPORTANT THE GOODS ARE SO THEY CAN TREAT THEM ACCORDINGLY (OTHERWISE OPERATIONS WOULD BE GROSSLY INEFFICIENT) OR TAKE IT TO A SPECIALIST OR DO SOMETHING OF MORE CARE. CHAPTER 9 – SHARED OWNERSHIPExclusion Property – consists of one owner with virtually all control over the asset – therefore, the defining characteristic is that owner’s rights are in rem in nature. Governance Property – multiple ownership property. Requires governance norms – the devices regulating ownership’s internal relations. Co-Ownership: Joint Tenancy and Tenancy in Common two basic categories of co-ownership at common law both JOINT TENANCY and TENANCY IN COMMON give rise to a right of possession for every interest holder of the entire thing (chattel, land, etc) Tenancy In common Joint Tenancy Joint Tenancy – two or more people own the same interest; have a whole interest in property. It gives rise to two main features: four unities and the right of survivorship. Presumption of joint tenancy at common law. Most common: amongst family membersFour Unities (1) Possession – each joint tenant is entitled, concurrently with the other joint tenants to possession of the whole of the land that is the subject of the joint tenancy. The interest of each must relate to the same property(2) Interest – interest of each joint tenant be the same in extent, nature and duration. The interests have to overlap and be the same type of interesti.e. Can’t have one owner with fee simple and the other with a life estate etc. (3) Title – each joint tenant’s title must be derived from the same document or occurrence. (4) Time – each joint tenant’s title must vest at the same time. Exemption: The unity of time is not required for a joint tenancy created by will or by conveyance employing a use. Right of SurvivorshipThe right of the surviving joint tenants to take the interest of a pre-deceasing joint tenantUPON DEATH OF ONE JOINT TENANT, THE OTHER JOINT TENANT AUTOMATICALLY INHERITS THE INTERESTDeath of one joint tenant does not cause an interest to pass to or be taken by the survivors – they are left as before but simply share their ownership with one less person. REMEMBER: JOINT TENANCY --- BECOMES TENANCY IN COMMON (via through severance) Tenancy in Common – two or more parties own separate shares of the interest; have some degree of ownership in the whole parcel of land only unity required is unity of possession. Tenants in common have distinct and separate interests so that there is no reason why they should have unity of interest, title, or time. Most common: in commercial situations. Requires unity of possession. Have equal rights of possession over the whole of the land. NO right of survivorship. When one tenant in common dies, his or her interest in the land does not pass to the surviving tenants in common but forms part of the deceased’s estate and passes in accordance with the will or intestacy rulesNOTE: A JOINT TENANCY REQUIRES ALL FOUR UNITIES, WHILE A TENANCY IN COMMON ONLY REQUIRES A UNITY IN POSSESSION At Common Law = creation of co-ownership interests is joint tenancyAt common law, PRESUMPTION for interests being transferred from one party to another would be a JOINT TENANCY, UNLESS there would be some INTENTION INDICATED OTHERWISE.Joint tenancy is presumed when a transfer of title to co-owners produced a joint tenancy if the four unities were satisfied and an intention to create a tenancy in common was not established. Why the presumption for joint tenancy?Simpler interests – a joint tenancy reunites title when one party dies SOME EXCEPTION IN EQUITY: Property owned by a partnership, mortgage lenders – presumed tenancy in commonWhere there was unequal contribution – presumed tenancy in common IN ALBERTA RE LAND (REAL PROPERTY) = creation of co-ownership interests is tenancy in commonPresumption of joint tenancy has been reversed by legislation in Alberta, BUT ONLY APPLIES FOR INTERESTS IN LAND – unless there is a contrary intention shown. Therefore, for LAND THERE IS A PRESUMPTION OF TENANCY IN COMMON. Law of Property Act s 8: When land or an interest in land is granted, transferred, etc to 2 or more persons, other than as executors or trustees, in fee simple or for any less estate, legal or equitable, those persons take as tenants in common and not as joint tenants unless an intention sufficiently appears… that they should take as joint tenants--> Common law required you to take active steps to create tenancy in common--> Now you have to take positive measures to indicate you want to create joint tenancy with right of survivorshipPresumption of tenancy in common for real property because of statute Exception for trustees – trustees of land still presumed to be joint tenantsWhere it applies courts have set a low threshold for rebutting the presumption of a joint tenancy (Bancroft estate)Even where a joint tenancy arises at law, this may still be trumped by an equitable resulting trust for gratuitous transfers (Frosh)Tenancy in common is presumed when: (1) Two or more persons advance money on mortgage – presumed in equity that their title as mortgagees is held as tenants in common. (2) It is the orthodox view that partnership property is presumed in equity to be held by partners as tenants in common. (3) The purchase price for the property is provided unequally. Equity will recognize a tenancy in common with shares in proportion to each party’s contribution(4) co-ownership of land is now presumed to be under a tenancy in common, unless a contrary intention is shownLaw of property act s. 8 Re Bancroft EstateFACTS – Testator, Sam Bancroft, leaves behind a widow and four children (Percy, Aubrey, Florence, and Minnie). Minnie pre-deceased Sam but has two children, Paul and Jean. Equal shares (not land) go to Percy, Aubrey, Florence and the children of the deceased Minnie. Issue arises when Paul dies, and he leaves four children. ISSUE – What do we do with Paul’s share, does it go to Jean or his estate? Whether the children of Minnie took joint tenants or tenants in common? If tenancy in common, it goes to Paul’s estate. If joint tenancy, it goes to Jean. DECISION – Presumption of joint tenancy Paul’s share goes to Jean. REASONSNothing in the will that can rebut the presumption of joint tenancy. Terms such as equally can be enough to rebut the presumption of tenancy in common. If it were in Alberta, it is not an interest of land, so the presumption of tenancy in common would not apply. Severance A way of terminating and converting a joint tenancy into a tenancy in common Ways in which severance can occur: (1) An act done unilaterally to destroy one of the four unitiesA unilateral declaration that one holds as a tenant in common is not sufficient (Sorensen)A partition or sale order from a court constitutes a severance (LPA, s. 19) but merely commencing an application does not (Sorensen)A joint tenant of an interest in land can unilaterally grant the interest back to him/herself as a tenant in common (LPA, s 12(d))A declaration that one holds ones shares in trust for another may destroy the unity of interest with the other joint tenant giving rise to severance (Sorensen))(2) Mutual agreement of parties (3) Courses of dealing that indicates all parties intended for relationship to be a tenancy in common (not express, but implied). Sorensen Estate v SorensenFACTS – Joint tenancy held between a husband and wife, Marshall Sorensen and Marrian Sorensen. This included the family home and the adjoining vacant lot. Upon divorce, the couple enter into an agreement in which the wife is supposed to lease the family home for life. The ex-spouses agreed to sell the vacant lot to provide for maintenance of the family home, which the wife was living in. In the document that the wife signs, she declares that joint tenancy has severed, and she also executes a will which after her death, her daughters are to be trustees in the land for the son who is beneficial owner. Upon the death of the son, the residue is to go to the daughters. Ex-wife bring a partition motion in court but dies before it can be heard. ISSUE – Did anything Marrian Sorensen do result in severance so that she and her ex-husband were no longer joint tenants but tenants in common, or on the day she died did they remain joint tenants. Was joint tenancy severed DECISION – Severance of joint tenancy occurred, and interests can descend through the wife’s estate.REASONS(1) Consider the agreement upon divorce: They agreed to lease the family home for the rest of Marrian’s life and sell the vacant lotNeither by mutual agreement or course of dealing, did either party indicate an intention to try and break severance. Could argue that it broke the unity of interest. Court decides that this does not suggest either party thought there was severance – Marrian wouldn’t have applied for partition if this were the case. Why did lease not bring about severance? This was a lease for life and does not interfere with the rights of others. A lease for life is considered a life estate – however, potential argument that it violates unity of interest because the wife would have a life estate and the husband would have the remainder. (2) In the Trust document, Marrian declares that she is severing the joint tenancyIneffective because it needs to be a mutual agreement, or at very least needs to be communicated to the other party. (3) Motion for partitionWas not heard due to death of Marrian ineffective (4) The only thing that severed title was that she set up a trust that she would hold bare legal title and her son would become beneficiary and would hold beneficial title. She was only able to do this with her interest in the land – she didn’t grant her husband’s interest. This amount to a transfer of equitable title of her interest to her son and destroys unity of interest. Husband still has both legal and equitable and she only has legal now – inconsistent with joint tenancies. Transfer was gratuitous (not for value) – so there was no resulting trust presumed. There is an exception of resulting trust (parent’s child).Resolving Concurrent Ownership Disputes When more than one party has a property interest in the same thing, this is when disputes arise. When you have more than one party with title, there is potential for disputes. Partition and SaleAT COMMON LAW THERE WAS NO MECHANISM FOR PARTIES TO UNILATERALLY TERMINATE CO-OWNERSHIP, THOUGH UNDER LEGISLATION THAT APPLIES TO INTERESTS IN LAND, STATUTORY MECHANISMS EXIST WHICH ALLOW FOR INDIVIDUALS TO UNILATERALLY TERMINATEUnder current leg that applies to interest in land, PARTIES MAY APPLY TO A COURT FOR AN ORDER TO PARTITION (physically divide) the land or for it to BE SOLD with the PROCEEDS DIVIDED AMONG THE CO-OWNERS (law of property act ss 14-23,27)Upon application by one or more co-owners, a court shall grant one of the three remedies (s15(2))Partition (physical division)Sale to third partySale of the interest(s) among co-ownersCompensating / Accounting among co-owners In granting a partition or sale order, a court may also order compensation and or accounting among co-owners on an number of grounds (s.17 of law of property act)Law of Property ActSection 7 – a joint tenancy is presumed except if there is language to the contrarySection 8 – rebuts presumption of joint tenancySection 12(1)(d) – transforms your relationship, unilaterally, with the other owner into a tenancy in common – different ways that co-owners can alter their relations between joint tenancy and tenancy in common. Streamlined mechanism for severance via statuteMust provide notice to other co-ownersSection 14: Partition and Sale – terminating co-ownership Severance doesn’t terminate co-ownership, it only converts it to a tenancy in common. Partition and sale by contrast are ways of bringing relationship to a closeBy physically dividing the land;Or selling to third party with distribution of proceeds, or from one co-owner to anotherAt common law there was no way to unilaterally terminate co-ownership without the consent of the other co-owner. Section 15 (Key Provision) – gives the court the power, upon application, to make one of three types of ordersOnly takes an application by one co-owner to bring about these remedies:(i) Physical division of the land(ii) Sale of entire interest of the land, with distribution of proceeds (iii) Sale of one party’s interest to a third-party Court cannot decline to make any order at all – they must make a remedy under s. 15(2), because one party cannot be stuck in a co-ownership situation that goes against their will. It prevents one co-owner from holding out on the other and not allowing an interest to go for sale, promotes alienability and autonomy. This is due to the wording of “shall make the order”. Alienability – unlikely you will want to find a third-party to purchase a co-ownership situation. If you want to structure this in a way that prevents one owner from forcing a sale, you can structure the ownership under a corporation. Section 16:A couple of situations where court can decline to make an orderIf highest bid doesn’t reach fair market value of land, they can refuse to make the saleSection 17 – deals with different grounds on which court can order one co-owner to compensate the co-owner on partition application. In granting a partition or sale order, a court may order compensation and or accounting among co-owners on an number of grounds17(2)(a) – court can order compensation when one co-owner has excluded another co-owner from the land. Where one co-owner ousts the other, then an occupation rent can be charged to the excluding co-owner. 17(2)(d) – waste must be through the unreasonable use of land (voluntary waste). For example, if it was a house and one co-owner decided to keep 100 cats there, that would likely amount to the kind of waste that this section pertains to. Qualifier that it has to be waste through unreasonable use of the land This unreasonable use to the land somehow leads to damage to the land17(2)(e) – entitled to compensation for capital improvementsActions that increase the value of the land17(2)(f) Non-capital expense – those that don’t increase value of asset are treated differently. Occupying co-owner can seek compensation for costs that don’t contribute to the capital (i.e. paying the electricity bill) but if the co-owner does that then this is offset by s. 17(2)(g). 17(2)(g)If there is a claim for this then there is an offsetting occupation rent that would be considered If you seek compensation for expenses to you occupying the premises, in those situations then it seems fair to require the offsetting benefitsSection 27 – parties can contract out of the right to seek partition and sale. Court can make an order terminating co-ownership if it would cause undue hardship to one party. Value Choices Behind Right to TerminateStrong protection for autonomy of any given co-owner not to be kept in arrangement against will.Protects alienability.Much more likely that third-party will acquire certain interests – takes away given ability of co-owner to impede sale of a unified interest. Shared Ownership of Personalty Personal property as well as real property may be co-owned either under a joint tenancy or tenancy in common.Statutes that reverse the presumption in favour of joint tenancy (AKA land) do not extend to personal property PRESUMPTION IS JOINT TENNANCYRight to partition and sale is not available to chattels. Frosch v Dadd***Note – this is personal property rather than real property – therefore, the statutory presumption of tenancy in common does not apply. RATIO – Equity favours a tenancy in common, and where there is a gratuitous transfer, there is also a presumption of a resulting trust. Joint bank accounts are presumed in equity to be resulting trust to the proportion that each party put in (except for in marital situations where they are considered joint property)FACTSPlaintiff and her brother, the defendant, were siblings of the deceased, Henry Dadd. Henry and his brother lived frugally and invested their money in rental properties. Proceeds from this enterprise were deposited in a joint account in their names.Defendant claimed that before the joint account was opened, him and the deceased agreed that the survivor of them should be entitled to the money at the time of the other’s death – instead of the account being a tenancy in common, which it was on title. Henry died, but two days before that he made a short and informal will which left almost all of his property to his sisters and brother-in-law. On March 18, 1957, the defendant withdrew the entire balance of the joint account and deposited it in an account under his name. On March 19, Henry died, and 10 days later, the defendant refused to give the money to his sisters after they refused the share the residue of the estate with him. ISSUE – Assuming that both legal and beneficial title to the account is co-owned, do the account holders hold as tenants in common or as joint tenants? Is there a right of survivorship in the joint account? One party claiming under estate, the other under claiming right of survivorship Personal property – presumption in favour of joint tenancy (right of survivorship) Terms of agreement with bank also lead to this presumption DECISION – Presumption of a resulting trust due to the gratuitous transfer, and the defendant did not successfully rebut this presumption. REASONSTerms of the bank indicate that there was a joint tenancy, and there is a presumption of joint tenancy at common law. In strict legal terms, there would be a joint tenancy, but in equitable terms, there was a presumption of a resulting trust. Both brothers contributed to the account gratuitously, and because it was not a gift, there is a presumption of a resulting trust back to each of the parties that transferred the funds tenancy in common (no right of survivorship). Defendant claimed that there was an oral agreement that the money would be a gift, but there was no corroborating evidence and it was necessary therefore, surviving brother does not successfully rebut the presumption, so there is an equitable title held by each brother separately. Joint bank accounts are presumed in equity to be a resulting trust to the proportion that each other party put in (except for in marital situations where they are considered joint property).If it was a parent and child, the presumption would be the presumption of advancement.Applicability of survivorship: a right of survivorship in joint bank accounts is a matter of construction. Bank documents may contain instructions or clues as to what was intended, but these documents are not controlling. Legally, might exist joint tenancy but in equity, right might be differentRely on resulting trustBoth contributed gratuitously into bank accountGifts in putting money in bank account, presumption of resulting trust back to each of the parties that transferred funds Brother fails to rebut this presumption, equitable title held by both brothersWith mother and child, there would be presumption of advancement. Different family relationships alter the dynamics of property transfer.Matrimonial Property Act NOW REPLACED WITH FAMILY PROPERTY ACTOnly applies to parties that are officially married, and not common law spouses. If a party from an unmarried couple wants to make a claim to the property of the other, the only avenue available is unjust enrichment. CHANGED AS OF JAN 1, 2020FAMILY PROPERTY ACTThe property of married couples and adult interdependent partners may be redistributed under matrimonial property legThis is arguable a unique form of shared propertyThe matrimonial property act was replaced on Jan 1, 2020 by the Family Property ActExtending the property sharing regime to include non-married couples who qualify as adult interdependent partnersThe Alberta Act is based on a deferred sharing model, according to which parties presumptively hold separate property during the marriage or relationship of interdependence, but may be obliged to share certain property upon separation or divorceFamily Property actProperty acquired during marriage or a relationship of interdependence is to be distributed equally on the dissolution, unless that would no be just and equitable s. 7(4)This regime is distinguished from spousal support and child support?Certain property is exempt from sharing, including: property acquired before marriage, or a relationship of interdependence; property acquired by inheritance; property acquired as a gift from a third party (s.7(2))However, placing property in the name of both parties creates a presumption of joint ownership of the beneficial interest? (accordingly, exempt property can effectively lose its exempt status) (s.36(2)(a))Joint bank accounts of spouses or adult interdependent partners are deemed to be held under joint beneficial ownership (s.36(2)(b)Section 8 provides factors to consider in determining whether a distribution is just and equitable?Under ss 19-21, a court has broad discretion to make an order regarding possession of the family homePrinciples of Property Law Property law is a dominant set of principles about individual autonomy and economic efficiency, with the capacity of owners to make decisions. There are counter-principles of vulnerability and reliance. Promoting Individual Autonomy & Economic EfficiencyVulnerability & Reliance of PartiesDeference to the will of the ownerExcept where I – interferes with the right of others, threatens free alienability, and leads to undue complexity. i.e. law of nuisance – interferes with autonomy of other parties i.e. rule against perpetuities, right of survivorship – promotes alienability, no matter the will of the owner Other concepts related to individual autonomy and economic efficiency: right to exclude, right to determine use, numerus clausus (Victoria park racing) principle, legal remainder rules, rule against restricting alienation, common law leases, co-owners’ right to partition and sale. More deference in granting leasehold interests than there is granting freehold estates – because they’re time-limited. Less worried about creating interests that will be around forever because they won’t be around forever. Equitable property: Protecting vulnerable parties and reliance interests in special kinds of legal relationships i.e. constructive trusts, as applied with common law spouses i.e. remedial constructive trust, as a remedy in cases in cases of unjust enrichment property-based relations between Crown and Indigenous people public policy limits on future interests human rights legislation limiting the right to exclude Statutory Regimes Residential Tenancy Act Rather than defer to an agreement between landlord and tenant, it says you cannot depart from the obligations set out in writing – in part because tenant relies on ability to stay in a place that’s become their home, or because they’re in a position to be take advantage of Matrimonial Property Act CondominiumsCondominiums are a relatively novel legal institution in the common law.They are a way of combining individual title to some areas, while providing a mechanism of collective ownership and governance to the common areas – requiring a robust mechanism of common governance, which is difficult to do with the common law alone.Most common: apartment style building Condominium is an institution provided for by legislationCondos are grounded by statute, because positive obligations were looked upon with suspicion by the common law – the statutory regimes all provide mechanisms of collective governance (i.e. strata boards). Could have a contract between co-owners saying that they will undertake particular obligations but this is no idea as it would be a contract for a personal obligationWHAT IS NECESSARY IS A SET OF OBLIGATIONS THAT RUN WITH PARTICULAR TITLE TO THE UNIT (like a covenant). Condo corporations have broad discretion provided for through corporations, with shares held by the condo unit ownerCondo corporations charge fees to condo unit owner and may levy finesCommon governance = is a elected board, elected by unit holder and they have authority to enact bylaws, levy feesChallengesChallenges arise because of shared ownership but as well because you have lots of people living in relatively close quarters and this has challengesYou need a mechanism of collective governmentRules of what you can do with your individual unit when it could affect your neighboursRules about common groundRules about how to ensure everyone is paying their fair shareThe core challenge about condominium is that what you need in this type of situation is a way to link obligations to a particular unit (mandatory upkeep; obligation to pay your dues, etc.)In Alberta, there is the Condominium Property Act When a new condo plan is registered, they start out with some standard bylaws in the Act, such as rules against undue noise and certain uses. default bylaws which deal with conduct and maintenance Has a fair bit of leeway how the condo board can set up their bylaws bylaw can be amended by a super majority of the interest holders***Note – the Act prohibits a condo corporation from placing any restraints on the transfer of a condo unit (s. 32). THE ACT ENCOURAGES ALIENATION. Contrast between governance property and exclusion property Exclusion – idea that you give one set of parties a right to exclude others from a resource. It makes it clear who is in charge of that certain thing, who has the default right of possession, and whose permission you need in order to access it. Example: personal property like laptops/water bottlesGovernance – idea that you can have many people with a right of access to a particular resource, but if you do that, you need a set of rules for how peoples’ activities can be reconciled, which goes to common property. Example: the classroom as a whole, owned by board of governors which technically has right to exclude but does not seek to do so in particular circumstancesHow do we manage these activities?Governance provides rules about what is supposed to take place when and where?Question is, is the condominium purley exclusion or governance property??Both strategies are pervasive, and condos are a bit of both. A unit owner has a default right to exclude in relation to their unit, but there are also shared spaces like stairwells, hallways, grass areas, garage etc.I.e. With fee simple interest in land, there is a right to exclude, but there is further governance setting rules on uses.Trespass enforces the right to exclude, but the tort of nuisance puts limits on activities and conduct on/off land?Is a particular activity interfering with the neighbours use and enjoyment of their land?Metropolitan Toronto Condominium Corporation v KorolekhFACTS – K is a condo owner who is alleged of conduct that includes physical assaults on other unit holders, acts of mischief against their property, racist and homophobic slurs and threats repeatedly made against other unit holders, playing loud music at night etc. M submits that K has repeatedly violated s. 117 of the Condominium Act and should be ordered to sell and vacate her unit. Alternatively, M submits that a strict compliance order should be made pursuant to s. 134 requiring K to change her behaviour and comply with s. 117. Section 117 of the Act prohibits conduct that is likely to damage the property or cause injury to an individual and s. 134 enacts a broad remedial power to enforce compliance with the Act, the declaration, and the by-laws. ISSUE – Could the condo corporation force K to sell her unit and leave? DECISION – Injunctive relief granted – order for the defendant to sell her unit and no longer be part of the condominium corporation. REASONSThe community in question is relatively small, made up of thirty units located in two storey townhouses. The units all share a single courtyard which is their common backyard The courtyard was a vibrant communal centre, prior to K’s arrival, and she had effectively destroyed its utility. K’s behaviour is extreme in a number of senses. K was ordered by the BOD to cease misconduct, but she continued. Summary – this case is a perfect mix of misconduct that is serious and persistent, and where its impact on a small community has been exceptional and where the respondent seems to be incorrigible and unmanageable. RATIO – COURT HAS A LARGE AMOUNT OF DISCRETION IN REMEDIES INVOLVING CONDOMINIUMS. ***Note – Injunctions are enforced via contempt of court. Is the distinction between condo ownership and fee simple house ownership justifiable? Implication that when you buy a condo, you sign up to deal with noise etc. from your neighbours, but fee simple ownership of land is no longer a practical option for many people, so condo ownership is becoming the main mechanism of home ownership. This leads to issues regarding the fact that security of tenure is less well-protected in a condominium. Proximity – the closer you are requires some form of regulations on rules to regulate certain things ie noise, crazy dogs. Etc.Consent or reciprocity when you choose to buy into a condo unit. You are expecting others adhere the rules, so the same rules pertain to you.There are also condos with restrictions, such as no pets allowed, or no children – these are restrictions on alienability in one sense (people with pets cannot live there), but also promote alienability in another (people who don’t want pets can live there). A condo development exists as a sort of community, where you live with people who have similar expectations. However, there must be a point at which constructing a community of similar people will run afoul of human rights legislation. Alberta just enacted legislation to abolish age restrictions, except for seniors. Condo to set the terms?If you were an adult only before 2018 you could stay that way – grandfathered inBut if trying to create rules after, can only do if it is designated for seniorsBut we do allow different groups to do that with the exception that we? have separate treatment for aboriginal populationsBalancing act between community living arrangements and normative values. Trade of between autonomy of individuals where they want to live, and limiting communities that share their outlook or values. (can look at aboriginal communities)CHAPTER 10 - SERVITUDESA servitude in Roman law was a right to use the property of another – it is a generic term for rights in land other than rights to exclusive possession; short of right of possession, in land owned by another At common law, an INCORPOREAL HEREDITAMENT refers to a property interest in land that is non-possessory (i.e. does not give rise to a right to exclusive possession). Distinctions between these interests and leases and licenses – leases have exclusive possession, so it is corporeal, in rem. The license isn’t a property interest, so it is a personal interest (contractual) for a particular person to access the land and is not an actual interest in land. A license is a right in personam. Incorporeal hereditament examplesEasementsProfits-aprendeRent-chargesCovenants running with the land Other servitudesPublic rights to access to private landEasements Easement – a right, attached to land, to: (1) Use the land of a different owner (without a right to remove any of the soil or produce of the land) – positive easement; ORI.e. right of way, right to have drainage pipes under the land. (2) Prevent the owner of the other land from using their land in a particular way – negative easement. I.e. right to light, right to engage in what would otherwise be a nuisance. AN EASEMENT IS A PROPERTY INTEREST THAT RUNS WITH BOTH THE PARCEL THAT BENEFITS FROM THE EASEMENT (DOMINANT TENEMENT) AND THE PARCEL BURDENED BY THE EASEMENT (SERVIENT TENEMENT).THERE MUST BE A BENEFITTED PARCEL AND A BURDENED PARCEL, and there is no such thing as an easement in gross. Any time you have an easement there has to be a parcel that benefits and one that is burdenedi.e. right of wayDominant tenement would be the adjacent parcel; the owner of which who has the right to go across the servient tenement, which is the parcel that is burdened by the easement?Interest runs with both parcels, interests in land?If it is an easement it is a property right which means that not only does the current but also future dominant tenement have the?right to cross the servient tenement. Additionally, all servient tenement interest holders, current and subsequent, to could be under obligation to allow the dominant tenement to cross the landThey are property interests so they are binding on subsequent owners;AN ARRANGEMENT THAT CONTINUES TO STRUCTURE THE RELATIONSHIP GOING FORWARD BETWEEN PROPERTY OWNERSException to this is the Alberta pipeline easement in gross statutory exception. CHARACTERISTICS OF A VALID EASEMENT (1) There must be a dominant and servient tenement Cannot have an easement in gross - which means just benefits some person; needs a parcel of land that benefit and another burden(2) Easement must accommodate (add to / be related to) the dominant tenement (dominant parcel of land)Cannot be completely unrelated to the dominant parcel of land(3) Dominant and servient tenements must not both be owned and occupied by the same person If the two parcels of land come into common ownership, the easement is terminatedDoes not make sense for the law to talk about a right against once se(4) A right over land cannot amount to an easement unless it is capable of forming the subject matter of a grant. This is a catch-all term that allows courts to police the creation of novel easements. Capable of forming the subject matter of the grantThere are some grounds for invalidity on the basis of not being capable of forming the subject matter of a grantuncertainty/vaguenessblauMust be reasonably specifiedA right amounting to joint occupation or depriving the owners of possession cannot be recognized as an easementIdea that an easement cannot be so far reaching that it deprives the owner of the servient tenement of the right to possession → that would be a joint occupation if allowed thus creating a novel interest in land?Rights should not constitute mere rights of recreation, possessing no quality of unity or benefit (Re: ellenborough)That criteria is in the eyes of the beholder but it effectively amounts to judicial skepticism to novel forms of easement The categories of easements are in principle open – however, courts retain discretion as to recognize a novel form of easement. Manifestation of numerus clausus principle – limited property claims. Courts have shown more openness to positive easements as opposed to negative easements. AN EASEMENT CAN BE CREATED BY: (1) Express Grant – A, owner of what will become the servient tenement, gives B a non-possessory right to make use of A’s land for the purpose identified in the easement. May be included in grant of parcel of land, such as when A subdivides their property. A particular document (legal tool) you can point to and say here the owner created the agreementTwo owners with one granting a right to another?Occurs when there is parcels belonging to different parcels and one parcel owner says to the other give me an easement and in return ill give you monies. Then you have the second owner signing paper giving owner one a easement of the right to cross lan(2) Express reservation from Grant – if A wants to retain the right to continue using their land granted to B for access to their own land, they may reserve a right of way over B’s land for the benefit of A’s remaining land. A particular document you can point to and say here the owner created the agreementParcels owned by same individual but then sells and reserves a right?Happens where a party reserves an easement for himself. So imagine at some point? black acre and purple acre are owned by the same person and that person wants tto grant purple acre to another individual. The original owner can say i am giving you purple acre but i reserve the right to cross over purple acre Both about reading and determining the terms of a document (3) Implication – where one party has granted an interest in land to another, and there is some way by which an easement has been implied. Based on apparent accommodation (Wheeldon v Burrows) or based on the common intentions of the parties. Grantee benefits more in these situations. Easement that is implied by circumstances of transfer1. Is where the proposed easement represents some long-standing use of the land before its decision, continuous and apparent; and it is reasonably necessary for enjoyment tof the land?2. Where the implication is reasonable necessary to give effect of common intention of parties.?I.e. easement providing for proper ventilation for a basement used for a restaurantThe owner is assumed to grant easement necessary to give effect to the grant.??(4) Necessity – as seen in Nelson. Not an equitable doctrine – nothing to do with “clean hands” In certain circumstance easement can be found when they are a standard of necessity(5) Prescription – longstanding use – abolished in Alberta, in Law of Property Act, s. 69(3). Used to exist at common law if there was a long standing use courts could say in a manner analogous to adverse possession that we are going to recognize it.?Legal fiction of loss grant → if someone was exercising a long standing use the courts would presume there was a loss grant?This undermines the certainty of land titles registry it has been abolished(6) Proprietary Estoppel – claimants would have to establish that there was something in their use of the neighbour’s land for access to their own that would make it unconscionable for their neighbour to now insist on their legal right to deny that access – equitable doctrine. Equitable doctrine based on detrimental reliance regarding an interest in land. If you encourage someone to rely on to their detriment the ability to use your land equity can step in and protect that right(7) Statute – rights under statute i.e. condominium statutes with easements for pipes, support, etc. Examples of Easements: A right of way for the owners of parcel A to cross parcel B using a designated path → positive?An obligation on the part of the owner of parcel B not to build a structure that blocks the light coming into a particular window on parcel A → negativeThe right to commit a nuisanceA right of subjacent and lateral support for one condominium unit by the other units in a building (Condominium property act s.22(a))Easement for the passage or provision of water, sewage, drainage, gas, electricity, garbage, artificially heated or cooled air and other services including telephone, radio, television services, through or by means of any pipes, wires, cables or ducts (Condominium property act, s.22 (B))Doctrine of dedication – a road on private land, which had been used for a long time by the public, could be dedicated as a public highway. Does not meet the criteria for an easement, namely because there is no dominant tenement. Nelson v 1153696 Alberta Ltd, 2011 ABCANOTE: SEE CLASS NOTES FOR MORE INFORATIO – TEST FOR DETERMINING IF THERE WAS A DEDICATION FOR PUBLIC USE: (1) INTENTION OF THE ORIGINAL OWNER TO DEDICATE; AND (2) MANIFESTATION TO DEDICATE. FACTS Main issue is the Road, which provided the only access to two privately-owned commercial recreational facilities (Rabbit Hill and Shalom Park). Rabbit Hill has leased property from Don Stelter and constructed the Road. At the time, Don’s brother Dale owned property west of Rabbit Hill that the Road crossed, and he agreed to the construction of the Road and leased it to Rabbit Hill. In 1985, Nelson purchased property north of the property owned by the Stelter brothers, which was only accessible by crossing the Stelter lands. He obtained a development permit which was subject to the approval of other landowners, but he never got their approval, and he built a home and a waterpark regardless. Nelson was not party to the lease between Rabbit Hill and Dale Stelter, but he used the road to access his property until Proznik purchased Dale Stelter’s land in 2005 and attempted to bar Nelson and his guests from using the Road. Nelson sued for declaration that: (1) the road had been dedicated to public use or (2) that he had gained an easement at common law over the land. Rabbit Hill’s lease expired in 2008, and Proznik’s company would not renew it. Trial judge holds it has indeed been used for public use; not exactly an easement but it is related legal doctrine – DEDICATION FOR PUBLIC USE - which a road on private land can be found to become public highway IF DEDICATED to public purpose by the owner?Applies the doctrine despite no easementISSUE – Was there a dedication, and if not, was there an easement? DECISION – CA: No dedication or easement. REASONSUsing the test for determining if there was a dedication it was clear there was never any intention to dedicate (the original owner was still alive and testified), and there was no manifestation to dedicate (the road was leased to Rabbit Hill) by throwing the road open to the public and public accepting At the time the Rabbit Hill parcel was granted, the remainder of the parcels were not landlocked, and the land was open for public use. It was only when the Proznik parcel was granted, that the Nelson property became landlocked. There was also no easement of necessity because Nelson did no due diligence before acquiring his lands – he assumed that the Road was a country road. An EASEMENT OF NECESSITY is restricted to the use of the land at the time of the grant, and it is essentially impossible to detect when an easement of necessity is going to arise. Nelson is entirely the author of his own misfortune – not going to deprive one of his neighbours of a property right simply because he did not do his due diligence. Dissent – it is impossible to access Nelson’s land by land without travelling over the other parcel, except theoretically accessing it by the North Saskatchewan River. If a parcel would otherwise be landlocked, it must have been the intention of the grantor to provide for an easement to access the land. Additionally, Don Stelter’s land had been granted first, before Nelson’s land, so it must be reasonably necessary to go across the other land to get to Nelson’s land. ***County ended up expropriating the road. ***Note – Nelson couldn’t claim adverse possession because he wasn’t engaged in exclusive possession of the Road, and he couldn’t claim easement of prescription because it was abolished via statute in Alberta. Profit a Prendre and Access RightsProfit a Prendre – a right to come onto/ enter a land of another and take something - typically specified in a grant. (e.g. timber, minerals, fish, etc.)Profit a prendre is an incorporeal hereditament (non-possessory interest) Different from an easement in the sense thatEasement requires a dominant tenement who benefits and servant tenement who loses Profit a Prendre does not require sameProfit a prendre does not require dominant tenement (possible though) and can be held in gross meaning a profit a prendre may be held independently of the ownership of any land, benefit does not need to be attached to land but the burden is related to landa profit a prendre is not a possessory interest; it is merely a right to enter onto land to acquire title to the produce by reducing it to possession (R v Tenner)Allows you to take things off the landDoes not mean you automatically own whatever the interest is defined in relation to (tress, minerals, etc.) – you must go onto the land and physically take possession, then acquire the title and own an interest in the thing (chattel)REMEMBER: Not a possessory interest but rather a right to go one land & take something then it becomes a chattelDifferent from a licence Profit a prendre is a property right and it is an interest in land – it runs with the burdened land and binds third parties and their successors in title. This is how it is different from a license. A license would only bind two people, and it does not run with the land, so it does not affect third-parties. A profit a prendre may be held in gross or appurtenant (belonging) to title to landGross: benefit does not run with parcel of land Appurtenant: A right or thing attached to or associated with?land, that benefits or burdens the use or enjoyment?of?the property by its owner and continues to do so when title passes to another.A “mineral lease” Is really a profit a prendre the owner of the minerals grants the right to extract them, typically in exchange for a share of proceeds (a “royalty”); right to go on the land and extract the materials R v Tener, [1985] 1 SCR 533Profit a Prendre – The right to make some use of the soil of another, such as a right to mine metals, and it carries with it the right of entry and the right to remove and take from the land the designated products or profit and also includes the right to use such of the surface as is necessary and convenient for exercise of the profit. Profits a prendre in gross are extinguished by unity of seisin, i.e. if the holder of the profit a prendre either: (1) releases it in favour of the owner of the land in which the profit subsists/exists; or (2) becomes the owner of the land in which the profit subsists. Extinguishment arises from the fact that if the ownership of the profit and the ownership of the land in which the profit subsists DEVOLVE/TRANSFER ON THE SAME PERSON, the profit can no longer exist as a separate interest in the land. The profit merges in the fee and is extinguished. Bank of Montreal v Dynex Petroleum, [2002] 1 SCR 146Note: Case is about whether you can create a new property interest out of an existing profit a prendreWe know profit a prendre is a property right that runs with the land and it is not a purely contractual interestBut what about rights derived from profit-a-prendre? Are those interests derived from profit a prendre property rights?TermsOverriding Royalty – is a royalty granted normally by the owner of a working interest to a third party in exchange for consideration.Lessor’s Royalty – is a royalty granted to (or reserved by) the initial lessor. Only difference is to whom the royalty was initially granted. Corporeal Hereditament – is a material object in contrast to a right. It may include land, buildings, materials, trees or fixtures. Give rise to a right of possession. Incorporeal Hereditament – is a right in land, which includes such things as rent charges, annuities, easements, profits a prendre and so on. Do not entail an exclusive right of possession. FACTS – Dynex leased the right to take oil and gas, and in return, it paid the owner of the oil and gas a royalty, based on the proceeds of the sale – the lessor’s royalty, which is a royalty paid to the owner of the minerals in exchange for the right to extract (referred to as working interest here, is similar to rent and is a time-limited profit a prendre). There is a separate royalty, overriding royalty, which gives suppliers (3rd parties) a royalty as well – some share of the proceeds. ISSUEIs the overriding royalty held by suppliers an interest in land (property right/interest) or a personal/contractual right/obligation? If it’s an interest in land, it gains certain priority over creditors but if it’s a debt it is at the back of the lineMatters for the purposes of the priority of creditors’ claimsIs something you create out of incorporeal hereditament also an interest in land? Is the overriding royalty that is carved out of the profit a prendre an interest in land? DECISION – It can be an interest in landExam: how do determine an interest in land; what is the analysis REASONS The common law rule is that incorporeal hereditaments cannot create an interest in land. Must be asked if you can create an interest in land out of an incorporeal hereditament. Justification for not creating new interests in land? Numerous clauses principle – principle that categories of property rights are closed; you cannot create a novel property interest because they put a burden on 3rd parties, creates confusionHowever, the court in Dynex departed from this traditional rule and allowed for an overriding royalty on working interest in minerals to be recognized as an interest in land IF THAT REFLECTS THE INTENTIONS OF THE PARTIESCOURT SAID WHERE THERE ARE COMMON INTENTION OF THE PARTIES YOU CAN CREATE AN OVERRIDING ROYALTY OUT OF A PROFIT A PRENDRE THAT IS ITSELF A PROPERTY INTEREST IN LANDJustification: These overriding interest are common in oil and gas and this old rule is not suited to the reality of the oil and gas industryPolicy reasons for departing from common law ruleP.782 Here there are policy reasons to recognize a new property interest in land. There is reliance on the idea that these types of interests are common in the oil and gas industry, and the court should keep up with developing customary practices of the field. Why? 1. Keep the common law in step with the evolution of society 2. To clarify a legal principle 3. To resolve a legal inconsistency RATIO – A ROYALTY WHICH IS AN INTEREST IN LAND MAY BE CREATED FROM AN INCORPOREAL HEREDITAMENT, SUCH AS A WORKING INTEREST OF A PROFIT A PRENDRE, IF THAT IS THE INTENTION OF THE PARTIES. ***Note – this case is one of the main exceptions where the SCC recognized a novel property interest.Access to Public and Private Property These are not traditional incorporeal hereditaments, but they can be thought of as a sort of servitude – the right of the public to enter or use land that does not belong to them. Canadian common law has generally recognized that private owners have a presumptive right to exclude, without an obligation to justify the exclusion (Harrison v Carswell)Starting points is Harrison v Carswell, where the mall owner sought to exclude picketers from the mall. Majority held that the owner could exclude, even if there was no compelling reason to do so – there is a presumptive right to exclude for any reason, as long as a separate right (human rights) is not implicated or restricted by some other source. The dissent argued that in a quasi-public place, the owner’s right to exclude is qualified and the owner must have a good reason to exclude. However, the right to exclude may be qualified in various ways, giving rise to public rights of access:1. Human rights legislation (qualifying the right to exclude for discriminatory purpose) – limits reasons why people can exclude from public access2. Necessity to preserve life or property 3. Common law requirements of innkeepers (now reflected in statute) – if innkeeper promoted service to public you cannot unreasonably exclude and refuse service potential monopoly could arise allowing innkeeper to take advantage 4. Necessity to travel along a public highway (Dwyer v Stauton)5. Dedication of a road to public use (Nelson)Public Property – land, the title to which is held by the Crown or some other government entity. Private Property – land which you can exclude others from Exclusion from public land:Government decisions to exclude people from public property must comply with the charter The decision is an act of the government That decision to exclude from spaces customarily open to public that decision must be subject to charterIn New Zealand, there is a doctrine called “prime necessity” – if a party has a local monopoly on a particular service that is deemed a prime necessity, and it generally makes the necessity open to the public, the party cannot unreasonably exclude service; owner must justify exclusion from a business affected by the public interest, in which the owner has a local monopoly (Wu). Sky City Auckland v Wu (NZ)FACTS – the casino wanted to ban Mr. Wu and argued that as long as they weren’t excluding based on an enumerated ground under human rights legislation, they should be able to ban whomever they wanted. ISSUE – Does the doctrine of prime necessity apply here? REASONSIt is difficult to argue that a casino is necessary, but it may be a local monopoly. There is an explicit statutory power that casinos have to exclude people for any reason.However, the doctrine of prime necessity cannot be expanded to casinos because of the statutory power that states a casino can exclude anyone subject to a statutory regime. Suggests that monopoly, rather than necessity, is what is key to applying the doctrine. RATIO – PRIME NECESSITY IN NZ MAY HINGE ON MONOPOLY RATHER THAN NECESSITY. Notes: Why is it focused on local monopoly? Where there is not a local monopoly the states of exclusion are not that high. When the stakes are high there should be a good reason for excluding justificationCovenants running with the landOne of the traditional requirements for a valid covenant to run with the land is that it be negative or restrictive in nature, and it cannot require positive actions on the part of the burdened estate holder. in rem – Property interest –apply to everyone In personam – apply to only specific parties Covenants – valid contractual undertaking (traditionally under seal). Typically they run under equity and will run with the land. Normally, contracts do not run with the land, and only bind the original parties to the contract. Traditionally, referred to as a contract under seal, but you most likely do not need a seal for these types of contracts to be enforced. Privity of Contract – a contract only affects the legal relations of the parties to the contract, normally only the parties to a contract may sue or be sued under a contract. Privity of Estate – terms in a lease agreement that ‘touch and concern’ land (real covenants) may be enforced by the assignees of landlords and tenants based on privity of estate. Certain kinds of obligations can be enforceable in lease agreements even if you don’t have privity of contract.Under certain circumstances, relying on primarily on equitable principles, courts are prepared to allow a covenant to run with the land (and thus bind future owners), despite an absence of privity of contract or estate established in Tulk v Moxhay.Situations where the clean line between contracts and property are blurred Tulk v MoxhayEstablished that a covenant could run with the land, binding future owners despite the absence of privity of contractor privity of estate. The uses of restrictive covenants Covenants running with the land provide a means of engaging in private land use planning. covenants can be used to restrict land to particular categories (i.e. residential only), to maintain certain aesthetic standards, or to preclude certain activities or types of businesses. Analogous to public land where municipal government do municipal zoningFor instance, the covenant in issue in Tulk v Moxhay ensured that a garden would remain in Leicaster Square (for the benefit of nearby parcels)Concern that if this parcel of land was somehow turned into something other than a garden it would effect surrounding properties negatively so when transferred a contractual undertaking was placed that the land would remain as a garden More broadly, covenants, because they are contractual, are flexible tool for parties to use to restrict land usecan be sued to restrict land use to particular categories of use (e.g. residential only) to maintain certain aesthetic standards (no purple houses, no mobile homes) or to preclude certain activities or types of business (no grocery stores, no garbage dumps)In the past, restrictive covenants were used in some cases to restrict the same land to people of certain ethnicities or religions (i.e. Re Drummond Wren). Such restrictions would be illegal today because (1) they would be contrary to public policy, and (2) they would not ‘touch and concern’ land. Four Requirements for a Burden Under a Covenant to Run with the Land: when you talk about a restrictive covenant you are talking about some kind of obligation or restriction that is imposed or applied to a particular parcel(s) which bind current and future owners (runs with the land)(1) The covenant must be restrictive/negative in substance. Must direct what cannot be done, rather than what must be done Positive covenants traditionally cannot run with the land. Key test: is whether it is possible (must be possible) to comply by doing nothing (negative)(2) It must be intended that the burden run with the land, and the burdened lands must be sufficiently described in the document. Contractual interpretation: question is did parties intend for this just be a personal obligation between those in agreement or did they intend for it to become annexed to the land and bind all current and future owners? Burdens are not presumed to run with the land must have some indication in the terms that there is the intention for a burden to run must somehow be manifested.(3) The covenant must be for the benefit of dominant lands, and those lands must be sufficiently identified in the document. A covenant in gross cannot run with the land there must be some other parcel in land that is benefited from the covenant in order for the covenant to run with the burdened land (servient tenement)What is the difference from easement? Because its contractual it can take many different forms where as easements fall into pre-existing categories Covenants provide more flexibility to tailor the obligations one wants the land to haveBut both require a dominant and servient tenementThe dominant lands’ must be easily ascertainable from the deed containing the covenant (Galbraith v Madawaska Club). The covenant must ‘touch and concern’ the dominant lands by affecting the mode of occupation or ‘directly affecting the value of the land’ (i.e. restricting the use of a nearby parcel is normally fine but regulating the class of acceptable purchase is not). (4) Equity must be prepared to enforce the covenant. In the absence of legislation, notice of the covenant to third-party is required. The notice requirement has been subsumed by modern land title registration systems, which allow for the registration of restrictive covenants. Consider adverse possession – how would this affect this? We have a land title system in Alberta that has a strong conception of indefeasibility. Transmission of the Benefits of a Covenant: who gets to exercise the rights and enforce the covenant (1) Annexation – benefit is annexed (attached) to run automatically with land. May require explicit language to this effect in the instrument that creates the covenanti.e. language such as “this runs to the benefit to purple acre and all the heirs of purple acre”(2) Assignment – unlike burdens, benefits can be expressly assigned under contract law. i.e. if the instrument creating the covenant do not explicitly state annexation you could assign the benefit under contract to new owner(3) Building schemes – restrictive covenants may be created as part of a larger residential or commercial development, provided certain criteria are met. Will generally the building scheme will set out a system of reciprocal rights and benefits, with each parcel constitution both a dominant and servient tenement within the system. Each parcel has a burden and benefit reciprocal scheme that sets out a kind of local land use law that both burdens and benefits each of the parcels I.e. building plot for only pink houses. Every plot is burdened by being required to have a pink house. However, the benefit is that you live in a community with all pink houses. Equivalent to local land use/zoning law but not enacted by gov but by private developerRequirements for Valid Building Scheme: the benefits and burdens of covenants can run with parcels contained in a valid “building scheme”(1) Titles must be derived from a common vendor – typically only when it is a developer (single common owner) (Berry v Indian Park Association). (2) Vendor must have laid out parcels subject to restrictions that could only be consistent with a general scheme of development (though minor variations for particular lots are permissible). (3) There must be an element of mutuality, such that the restrictions are intended for the benefit of all parcels. (4) The affected parcels must have been purchased on the understanding that the restrictions would endure to the benefit of all other parcels. Understanding of this mutuality – that all parcels are burdened so all parcels can benefit Berry v Indian Park Association (1999, ONCA)FACTS – Homes in Phase I and II of the Sugarbush community were built in 1974-75, and they created the Association, a mock condo scheme. They established a building scheme governing management of land in Phases I and II, and when lots were sold, they would impose on the purchasers a number of restrictive covenants. In 1988, the Association amalgamated its land with the land of another to make Phase III and tried to enforce its bylaws on Phase III. ISSUE – Is Phase III part of the building scheme and, if so, do the bylaws run with the land? ANALYSISThe bylaws of the homeowners association were found not to run with the land in the new developmentBylaws were not annexed to run with the land. No express indication that bylaws would run with land There was no valid building scheme because there was no common vendor, and the lots in the new development were not laid out within the original scheme of development. Also, the land use restrictions were not registered as restrictive covenants under the applicable land titles legislation. RATIO – A NEW DEVELOPMENT CANNOT BE ADDED TO A BUILDING SCHEME, AND THE PEOPLE UNDER THE NEW DEVELOPMENT ARE NOT BOUND BY THE RESTRICTIVE COVENANTS OF SAID BUILDING SCHEME. Why allow restrictive covenants? ProsConsAlienability (people more willing to sell) Landowner autonomy Want to create a cohesive community or businessconservationAllows for potentially valuable local planning – the existence of community-wide covenants can improve people’s choices by allowing for different types of community. Greater certainty about neighbouring uses for both commercial and residential landowners, conservation (Leicester Square in Tulk). Potential to restrain Alienability indirectly (subject to legal limits)Lack of adaptation to changing circumstances (restricting parties further down the line in a way that is inconsistent with changing times) Policy concerns such as restraint on competition or limits on valuable business competition Potential for added complexity and information costsPotential for economic exclusion (i.e. restriction to single-family housing)Positive Covenants A positive covenant requires the covenantee to take some positive action. It is not possible to comply by doing nothingTraditionally, English and commonwealth courts have health that a positive covenant may not run with landNote: We are talking about requirements of obligations to run with the land. It is possible to create positive obligations through an ordinary contract. The issues we are dealing with only arise when 1 or both parcels have changed lands – no longer have privity of contract so you have to rely on some of the obligations that run with the landAmberwood Investments upholds the traditional rule against positive covenants running with the landExceptions ‘of the upkeep of the road’ Conditional interestsEnglish benefit and burden exception rejected in AmberwoodThere are a few ways around positive covenants(1) Chain of covenants – an attempt to make an obligation effectively run with the land using a chain of person to person contracts. A party might under take some positive obligation as part of the agreement and take another agreement under to not transfer land to anyone else unless that new buyer covenants to undertake that agreement thus passing on the obligation to future sellersas part of the covenant, have the current owner agree that they will require the future purchasers to abide by the new agreement. Drawback – may not work with involuntary transfers (title passing upon death, mortgage transfers, etc.) and may be vulnerable to challenges on restraint of alienation. (2) Rent-charge – periodic title payment owned by the title owner, which is a financial obligation owned by the owner. It is an incorporeal hereditament. Rarely used in Edmonton(3) conditional interest, e.g. conditional easementAmberwood Investments Ltd v Durham Condominium Corp, 2002 ONCAFACTS Case involving two adjacent plots of land on which condo towers were to be built. After one tower was built, the other ran into financial problems. The original idea was for the towers to share certain facilities and amenities, and there were easements provided for access to those shared amenities. Access for residents of both buildings to access amenities. The provisions also made for the contribution to the cost of maintaining the facilities. The owner of the parcel without a tower agreed to contribute to the maintenance cost of the facilities that would ultimately be shared by both – this was a positive obligation (obligation to pay money = positive obligation). Amberwood took possession of unbuilt land (on default of the mortgage) took possession of that parcel and refused to pay. ISSUE – Did Amberwood have to pay and should the Court change the rule and allow for positive covenants for land? ANALYSIS (Cheron J):Whether the court should continue to recognize distinction between positive and negative covenants, with negative allowed and positive not. States it may be fair and valid reasons for the law to recognize positive covenants, but this is not a job for the courts – it is a job for the legislatures. May be unforeseen consequences, past reliance on this rule that they would not be bound by past obligations and policy challenges. This is something the legislature is better equipped to do. There is a basis for the distinction between positive and negative covenants, and there’s a principled reason for it. law strives for element of coherence, so when there is distinction there should be good reason for it, you should be able to explain why…In Rhone, it was shown that a negative covenant can be thought of as a limit/restriction on a property right – says what you cannot do, excludes from the bundle of rights - whereas a positive covenant that requires you to do something effectively directs you in how to use your land – its beyond just acquiring a right“enforcement of positive covenant lies in contract; it compels an owner to exercise his rights. Enforcement of a negative covenants lies in property and it deprives the owner of a right over property.”Enforcement of a negative covenant in equity doesn’t contravene the rule of privity of contract because equity was simply giving effect to a legal right whose scope was restricted by a covenant. So, in sum, to enforce a positive covenant would be to enforce a personal obligation against a person who has not covenanted, but to enforce negative covenants is only to treat the land as subject to a restriction (Tulk). The Principle of Benefit and Burden – from Halsall v BrizellIn Halsall, there were private roads and sewers that the owners of the adjacent parcel could use, and they covenanted to maintain the road (pay a just amount for upkeep). So, an obligation that corresponds to a benefit for a parcel can be upheld, but it requires more than some kind of benefit and burden. Benefit and burden need to correspond – implicitly conditionalREJECTS THE ARGUMENT: This theory should not be adopted in Canadian law – there is too much uncertainty, and the legislature should be the one to enforce it. It if was part of Canadian law, it wouldn’t apply here – there is no direct link between the easements and the obligation to pay. There is an obligation to pay, but no benefit because the recreational facilities are not usually being used. Conditional Grant In principle you can have a positive obligation that runs with the land if it is conditioned on some other valid property right that has been granted. It is a condition If there is a particular grant of an interest, you can provide in the definition of that easement that it is conditional on something else. So here, you could say “the easements to use the facilities are conditional on paying for their upkeep” – this is allowed because it isn’t a positive obligation standing on its own, but part of the condition for something else that CAN stand on its own. The easement in the facilities here are not defined in these conditional terms, so this doesn’t apply. It is a valid exception to get around positive covenant because it is not a stand-alone positive condition but rather a condition of another valid property right; it is a limit on another property right. Argument does not succeed here as easements not set out as conditional terms Macpherson JA (Dissent): The benefit and burden principle may work in Canada, in a way that yields sufficient certaintyTest for how it could work: (1) Assignee of a positive covenant must have notice of it. (2) Positive covenant which imposes a burden on an assignee must be accompanied by a benefit. (3) There may be a qualitative threshold in the analysis. (4) Need not be a direct relationship or linkage between the benefit and the burden. (5) The assignee must be able to exercise a choice about assuming the benefits and burdens. Key that the benefit and burden actually correspond. must be possible to assume the positive and negative burdens together Would uphold the obligation of paying maintenance costs. RATIO – POSITIVE COVENANTS CANNOT RUN, AND THE AGREEMENT TO PAY THE MAINTENANCE COSTS DOES NOT FIT UNDER THE THEORIES OF BENEFIT AND BURDEN OR CONDITIONAL GRANT, AND IT CANNOT BE UPHELD. Invalidity and Termination of Covenants InvalidityA restrictive covenant can be held to be invalid for a number of reasons, which are similar to the reasons of invalidity that apply to grants in interests in land generally i.e. uncertainty, restraint on alienation, contravene public policy. Can provide for termination and restriction in the covenant – the rule against perpetuities doesn’t prevent a covenant from running perpetually because the rights under a covenant are vested. These covenants that run with the land are in equity – do not have to worry about legal remainder rules.Termination Typically, unanimity is required to remove a covenant. A common method of termination is unification of title, where both parcels end up being owned by the same party. Dominant and servient tenement owned by the same party can result in termination of the covenantsExpiration (if there is a term)Agreement of all the partiesEquitable bars (unreasonable delay in enforcing the covenant)Laches – equitable doctrine that refers to unreasonable delay. Equity won’t enforce obligations if a party has delayed unreasonably in enforcing them. Acquiescence – situations where a party has agreed to allow the infringement. Equity won’t enforce the covenant if by acquiescence, the covenant has been deprived of its purpose. Under statute, a court, using stauutory judicial power can either modify or terminate a covenant (Land Titles Act s.48(4)). Where a covenant conflicts with zoning laws AND the modification would be in the public interest, a court can alter the restrictive covenant. If the removal of the covenant would be beneficial to the person/people with an interest in the covenant – could be useful where the majority of the people affected by the covenant wanted it removed, but there was a small number of holdouts. Question 2 – Page 834 (1) All buildings must be constructed with brick negative covenant – can comply by not building. (2) The owner shall not cause or permit the dilapidation of the buildings on the property positive covenant – it’s an obligation to maintain. This may be a legitimate for having positive covenants as per the dissent in Amberwood. (3) The owner must maintain the property as a park some ambiguity here. Very similar to the covenant in Tulk which was upheld. If the property was already park and you don’t have to do anything either than leave it as a park, it is fine. CHAPTER 11 – Title Registration & Mortgages Introduction to Tittle Registration“Procedural overlay” on the substantive law of property in land Registration systems determine the procedures for transferring interests and the priorities of competing claims However, registration systems are based on the pre-existing substantive law of property Eg definition of “land” in the Land Titles Act, RSA 2000, c L-4, s 1 Registrable interests are those that exist under the substantive law of propertyLand in the Land“land” means land, messuages, tenements and hereditaments, corporeal and incorporeal, of every nature and description, and every estate or interest therein, whether the estate or interest is legal or equitable, together with paths, passages, ways, watercourses, liberties, privileges and easements appertaining thereto and trees and timber thereon, and mines, minerals and quarries thereon or thereunder lying or being, unless any of them are specially excepted; Priorities at Common Law & EquityPriority among legal interestsNemo dat quod non habet“no one gives what he does not have” ?First in time is first in right Eg. B claims to have title to Property X but A has an interest that precedes B’s claim. B transfers title to C, who is unaware of A’s interest. C’s title is subject to A’s prior title. B couldn’t give what B didn’t have (ie good title to Property X) B could not give a title to C because A had a prior claim Legal title and prior equitable interests Legal title is subject to a prior equitable interest except where the legal title is held by a good faith purchaser for value without notice of the prior equitable interest I.e. A holds in trust for B, and unfaithfully A transfer fee simple to C… is C title going to subject to B equitable interest? Answered based on how innocent is C in this moment? If C acted in good faith no claim against CPerceived Problems with Common LawCommon law principles generally place risk on the buyer of a property interest The buyer must verify the seller’s titleNeed to ensure Nemo dat quod non habet“no one gives what he does not have” The buyer’s title remains subject to prior claims if the seller cannot convey good title ?Eg B sells Blackacre to C, unaware that A has a better title to Blackacre than B ?C’s interest is subject to A’s claim Common law principles give rise to both cost and risk in real estate transactions Cost in verifying the seller’s chain of title Land is around forever and therefore in principle there can be a very long chain of owners, so if you are a buyer subject to the Nemo dat quod non habet principal it could be a significant burden on the buyer tot double check the seller is giving a good title extremely costly = high transaction costsRisk of not taking good title even if precautions are takenResponse to these problems: (1) Deeds Registration/Recording & (2) title registration(1) Deeds Registration/Recording Aim to simplify the process of verifying title by providing a centralized public repository of documents relating to interests in land People can go register documents regarding ownership of landInstruments submitted to the registry gain a degree of priority over non-registered instruments, to the extent that the instruments themselves are valid Must be valid to be registered However, there is no guarantee of the validity of the instruments in the deeds registry – government does not guaranteeIt is not possible to rely on state of title reflected in a deeds registry because of this absence of guarantee Eg, the registry could contain a deed transferring fee simple title from A to B, even if A never had good title and that registered deed is legally worthless Deeds registry systems exist in some Canadian jurisdictions (PEI, NL, a small minority of land interests in ON) (2) Title Registration (Torrens System)Originated in South Australia in 1858, pushed by reformer Robert Torrens ?Aim to simplify land title records and conveyancing (ie. the transfer of interests in land) Still rely on your lawyer to ensure the transaction is going as planned Adopted early on in BC, AB & SK Now present across Western Canada (including all land titles in AB) as well as the vast majority of land titles in ON Basic idea: Guaranteeing the accuracy of records in the title registry what you see is what you get Lower risk for buyers of property in landLower transaction costsFacilitates mutually beneficial land transactions Facilitates lending secured by interests in land a risk for a lender in a non torren system is “well does the borrower have good title to the land”. Under a Torren system you can guarantee that the claim is good, ensuring lower risk for the lender. ?Key ideas“Mirror Principle”: The registry is a mirror of all rights in relation to land The failure to register an interest means it may be legally ineffective Notice of an unregistered interest is generally legally ineffective (Land Titles Act, s. 203) The registry now fulfills the function that a notice would fulfill in the past; notice in absent of registration is no longer significant in AB“Curtain Principle”: The registry draws a curtain over past transactions, such that it is possible to rely on the current certificate of title as a definitive statement of the interests in a parcel of land What the registry says is the definitive tittle A certificate of title issued by the title registry is generally “indefeasible” (subject to limited exceptions), meaning it cannot be challenged based on past acts that might undermine the validity of current rights Insurance Principle: Compensation for those who suffer certain losses as a result of an inaccuracy in the registry Regime responds to errors by saying you can bring a claim and in response if valid compensationSection 60(1) of the Land Titles Act Section 60(1) is the “keystone” of the Alberta Land Titles Act: “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.” The Fraud ExceptionAn interest in land registered through fraud in which the owner participated or colluded may be cancelled or corrected ?Mere notice of a prior unregistered interest does not constitute fraud (s. 203(3)) If A registers an interest in Blackacre knowing that B has a prior interest that will be defeated by A’s registration, that does not on its own amount to fraud for the purposes of the Act There is some ambiguity as to whether an innocent owner who receives title from a fraudster is protected by indefeasibility of title However an owner once removed from a fraudster is definitely protected by indefeasibility Fraudster Innocent Owner #1 Innocent Owner #2 Fraudster transfers title to innocent owner #1 and it gets registered in land titles registryThen there is ambiguity as to if innocent owner #1 is indefeasible ?Innocent Owner #1 is maybe protected. Innocent Owner #2 is definitely protected. Other notable Land title principlesTorrens-style land titles systems enhance the security of buyers of interests in land but may reduce the security of existing owners What says in registry goes thus could result in an innocent owner losing tittle to their landAssurance Fund: Compensation for those who suffer a loss as a result of the operation of the Act In personam rights: Indefeasibility of title does not preclude claims between the transferor and transferee of an interest, even claims that can result in a change to the registered title (eg rectification of title due to error, contractual remedies, etc.) Caveats: a mechanism to preserve the status quo by making all subsequent interests subject to the caveat (if the caveat is a valid interest in land) It is possible to register a caveat on title which indicates you have an interest in a someone else’s land Just because a caveat is registered does not mean it is valid BUT if it is a valid anyone who takes possession after is subject to the caveatBut possible to challenge a caveat MortgagesA mortgage is a security interest in land, ie. a property right that serves as financial protection in the event that a debt is not paid Mortgagor: a borrower who holds an interest in land that is put up as security for a loan Is the person who is borrowing the moneyMortgagee: a lender who holds a security interest in land as a means of securing the loan Basic idea: Pay back the loan or the lender will be able to use the title to the land to satisfy the debt Mortgages at Common LawMortgages at common law: the borrower would transfer title to the lender subject to a condition subsequent to the effect that if the debt were satisfied, the lender would reconvey the title back to the borrower Essentially giving land to the lender on the condition that if the loan is paid back it will be returnedTypically the borrower would remain in possession despite transferring title. The transfer of title served as an added source of security for the lender in the event the borrower defaulted. Common law courts interpreted rights under mortgage arrangements strictly a late payment could result in complete loss of title Courts of equity stepped in to remedy the perceived harshness of the common law Traditional Mortgages & Court of EquityEquitable right of redemption: right of the mortgagor/borrower to redeem the title by paying the outstanding amounts, even after the time for payment had passed Equity of redemption: mortgagor’s equitable right to the monetary value of the land minus the outstanding amount of the loan Even if the mortgagor defaults and the mortgagee forces a sale, the mortgagor is entitled to the net value of the land minus the loan This is the origin of the idea of “home equity” – idea of what is the financial stake you own minus what you owe on the propertyMortgages under the Land tittles Act ?A mortgage under the Land Titles Act is technically a “charge” on title, rather than a traditional mortgage ?Unlike in a traditional mortgage, there is no transfer of title to the mortgagee/lender Mortgages are registered on the certificate of title of the interest in land to which they apply You have a charge registered on your title indicating that there is a mortgage interest held by the lender Despite this formal distinction, the same rights and remedies that would be available in a common law mortgage are generally available for a mortgage registered under the Land Titles Act If there is more than one mortgage on title, the priority of the mortgagees is set by the order of registrationA “second mortgage” is generally more risky for a lender because the lender’s claims are subject to the claims of the first mortgagee If you are a lender you know if you are 2nd lender because you can look up the title and it will indicate on the land title Key Mortgage RemediesIf a borrower default Foreclosure: action brought in court to terminate or “foreclose” the mortgagor’s right of redemption where the mortgagor is in default Sale: The title to the land is sold, with proceeds beyond those needed to pay the mortgage debt(s) and other encumbrances going to the mortgagor Land is sold and the funds from sale are used to satisfy mortgage debts in order of priority and then if any money remaining it will go to mortgagor as equity in home ................
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