1
PROPERTY CAN – Term 2
Equitable interests 3
Trusts (cont’d) 3
Soulos v Korkontzilas (1997) 3
conditional gifts 4
Contingent Interests & Vested Interests 6
Stuartburn (Municipality) v Kiansky (2001) 6
McKeen Estate v McKeen Estate (1993) 7
Three Types of Conditional Gifts/Transfers 8
Caroline (Village) v Roper (1987) 9
St Mary’s Indian Band v Cranbrook (City) (1997) 9
State Limitations on Private Power 9
Unger v Gossen (1996) 11
HJ Hayes Co v Meade (1987) 11
Re Leonard Foundation Trust (1990) 11
Ziff, “Unforeseen Legacies: Reuben Wells Leonard and the Leonard Foundation Trust” 11
Trinity College School v Lyons (1995) 12
leases and licences 13
Lease or Licence? 13
Fatac v Commissioner of Inland Revenue (2002) 14
Metro-Matic v Hulman (1973) 14
Tenant’s Right to Quiet Enjoyment 14
Southwark LBC v Tanner (2001) 15
Landlord’s Duty Not to Derogate 15
Petra Investments v Jeffrey Rogers (2000) 15
Chartered Trust v Davies (1997) 15
Residential Tenancy Reform 16
Shared Ownership 16
Basic Concepts and Creating Shared Interests 16
Re Bancroft Eastern Trust v Calder (1936) 19
Property Law Act, s. 11(2) 19
Severance of Joint Tenancies 20
Re Sorensen & Sorensen (1977) 20
Property Law Act, s. 18 21
Resolving Concurrent Ownership Disputes 21
“Accounting for Benefits of Occupation”, Ontario Law Reform Commission 21
Co-Ownership in Family Property Law 22
Co-Ownership in Condominiums & Cooperatives 22
Servitudes over Property 22
Easements 22
“Report on the Basic Principles of Land Law,” Ontario Law Reform Commission 23
Profit à Prendre 24
British Columbia v Tener (1985) 25
Access to Public and Private Property 25
Director of Public Prosecutions v Jones (1999) 25
State v Shack (1971) 25
Michelin v CAW Canada (1997) 25
Covenants 26
Tulk v Moxhay (1848) 26
“Restrictive Covenants: The Basic Ingredients”, B Ziff 27
“The Impact of Restrictive Covenants on Affordable Housing…”, P Filion 27
Servitudes for a Public Purpose 28
Land Title Act, s. 219 28
aboriginal title and land rights on indian reserves 28
History of Aboriginal Title and Indian Reserves in British Columbia 28
Royal Proclamation (1763), “Indian Provisions” 28
Douglas Treaties (1850-54) 29
British Columbia Terms of Union (1871), Article 13 29
Constitution Act (1867), ss. 91(24), 109 29
Constitution Act (1982), s. 35, “Aboriginal and Treaty Rights” 29
Aboriginal Title 30
Delgamuukw v British Columbia (1997) – Lamer CJ 31
“Beyond the Indian Act”, Flanagan, Alacantra and LeDressay 34
R v Bernard, R v Marshall (2005) 35
Tsilhqot’in Nation v BC (2007) 35
Overview of Aboriginal Interests in Land & Land Rights on Reserves 35
common law priorities 36
Northern Counties of England Fire Insurance v Whipp (1884) 37
“Security of Property Rights”, PA O’Connor 37
Chippewas of Sarnia Band v Canada (AG) (2000) 37
“Aboriginal Title: The Chippewas of Sarnia”, J Reynolds 37
Rice v Rice (1853) 38
TITLE registration 39
“The Length of a Title Search in Ontario”, Youdan 40
“Review of Greg Taylor, The Law of the Land”, Harris 40
Relevant Sections of Land Title Act 40
Fraud & Indefeasible Title 44
“Indefeasible Title in British Columbia: A Comment on the Nov 2005 Amendments”, Harris 46
Lawrence v Wright (2007) 46
Registration of Charges 47
Credit Foncier v Bennett (1963) 49
Canadian Commercial Bank v Island Realty (1988) 49
Gill v Bucholtz (2009) 49
“Finding Nemo Dat in the Land Title Act”, Harris & Mickelson 50
Notice of Prior Unregistered Interest 50
Holt Renfrew & Co v Henry Singer Ltd (1982) 50
Alberta (Ministry of Forestry, Lands and Wildlife) v McCulloch (1991) 51
Title Registration, Aboriginal Title and Non-Proprietary Interests 52
Skeetchestn Indian Band v. British Columbia 52
Brainstorm 54
Equitable interests
Trusts (cont’d)
Constructive Trusts*CTs are a remedy imposed where “good conscience” demands it (Soulos) / Remedial CT / Where D has not acted wrongly in obtaining property but would be unjustly enriched if allowed to keep the property (Becker v Petkus)
Institutional CT / Where property was obtained by the wrongful act of D (Soulos v Korkontizilas)
Soulos v Korkontzilas (1997)
CONSTRUCTIVE TRUST MAY EXIST EITHER: (A) IN PRESENCE OF WRONGFUL CONDUCT BUT ABSENCE OF UNJUST ENRICHMENT (this case), OR (B) IN PRESENCE OF UNJUST ENRICHMENT BUT ABSENCE OF WRONGFUL CONDUCT (Becker v Pettkus). K was acting as real estate agent for S. S made an offer to purchase, and seller replied w/ a counteroffer but K did not communicate this counteroffer to S. K’s wife bought the property in her own name, and then transferred title to herself and K as joint tenants. S had no established loss, and no unjust enrichment b/c property dropped in value. Does constructive trust exist even in absence of D’s unjust enrichment and P’s corresponding deprivation? McLachlin J said constructive trust may arise even in absence of D’s unjust enrichment in order to “condemn a wrongful act and maintain the integrity of the relationships of rust which underlie many of our industries and institutions”. More broadly, constructive trusts are imposed where “good conscience requires” (whether there is unjust enrichment, or wrongful act like breach of fiduciary duty). [SCC]
Four requirements for wrongful act institutional constructive trust, per Soulos v Korkontzilas:
1. D must be under equitable obligation to P (e.g. fiduciary obligation);
2. Acquisition of property by D must have resulted from breach of equitable obligation;
3. P must show legitimate reason for seeking the proprietary remedy, e.g. personal, or related to need to ensure others like D remain faithful to their duties; and,
4. There must be no factors that render imposition of a constructive trust unjust, e.g. if there are third parties that might be harmed by a transfer of property back from D to P, it would not equitable to impose a constructive trust)
Constructive trusts and real estate transactions:
The purchase and transfer of land involves two stages: (1) agreement of purchase and sale; (2) transfer of the legal interest from vendor to purchaser. In intervening period between formation of agreement and the transfer of the legal interest on the closing date, the vendor holds the property as an institutional constructive trust for the purchaser. If the vendor refuses to transfer the land, what remedy does the purchaser have? Vendor has legal interest, purchaser has equitable interest. In the past, remedy for breach of K involving property = specific performance. But in Semelhago, Sopinka J said it is no longer the case that specific performance will be the automatic remedy in cases of real property sales (damages might be a more appropriate remedy, if the property isn’t “unique”). Need to assess appropriate remedy on case-by-case basis.
conditional gifts
Conditional gift in will: is it contingent or vested?Start with the 5 rules of construction (the anchors!):
1. Testator’s intention is paramount in construction of wills: Crt in HJ Hayes said, “[t]he cardinal rule of interpretation of wills is that effect must be given to the intentions of the testator. Those intentions must be ascertainable from the language of the will.” Look at the language of the will as a whole, per Re Taylor, as well as the surrounding circumstances, per Christensen v Martini. Example: providing for children.
2. Presumption against intestacy: if a will can be constructed in a way to find a home for property, the court will adopt this construction to avoid (partial) intestacy, per McKeen Estate and HJ Hayes. Example: if condition precedent + void, gift would be incomplete = intestacy; if condition subsequent + void, gift would be total; if determinable interest subject to determining event + void, gift would be incomplete = intestacy (so presumption in favour of condition subsequent > immediate vesting, subject to divestment).
3. Presumption in favour of early vesting: as between a contingent interest (condition precedent) and a vested interest (condition subsequent, determining event) courts will prefer the vested interest, per Sifton v Sifton (affirmed in HJ Hayes)
4. Rule from Browne v Moody: a gift (remainder interest, gift over) is prima facie vested if that interest is being delayed to allow for a prior life estate; this rule was applied by the Court in McKeen Estate. Example: “to A for life, and remainder to C if they are both alive at time of A’s death”.
5. Rule from Re Francis: where the reason for postponing a gift is one personal to the recipient/donee, the gift is prima facie contingent > presumed to be a condition precedent. Examples: “to the first daughter to marry”, “to the first child to reach age of 25”, “if B attains the age of 19 years”, “to the survivor of them”. But note: in McKeen v McKeen, the Court declined to apply the rule from Re Francis to the gift of a remainder in fee simple to the testator’s sisters “if they are both alive” at the time of his wife’s death, finding that the reason for postponing the gift was not personal to the sisters.
Prima facie = contingent (condition precedent)? or vested (defeasible interest subject to condition subsequent? determinable interest subject to determining event?)
If the interest is prima facie vested, is the vested interest is defeasible or determinable?
· Language that indicates the conditional gift is for a defeasible interest subject to a condition subsequent, per Caroline (Village) v Roper [words of a defeasible interest connote an abrupt end, that the interest will end if the condition subsequent occurs]:
o “if”
o “but if”
o “but when”
o “provided that”, “providing that”
o “if it happens that”
o “if it should occur that”
o “on the condition that”
· Language that indicates the conditional gift is for a determinable interest subject to a determining event, per Caroline (Village) v Roper [words of a determining event connote the flow of time, that the interest will continue until it reaches its end]:
o “while”, “whilst”
o “during”
o “so long as”, “as long as”
o “until”
Next ask: is the condition invalid?
· CONDITION PRECEDENT: if a condition precedent is invalid, the transfer fails (b/c condition precedent = words of limitation, so if no words of limitation, nothing can be transferred).
o Is the condition precedent contrary to public policy? A condition will be void as against public policy if it discriminates on the basis of race, sex or religion, as per Re Leonard Trust. A condition also may be void as against public policy if it prohibits marriage.
o Is the condition precedent a restraint on alienability? If a condition imposes a restraint on alienation, that condition will be void, as per Trinity College. In Trinity College, the school’s second option to buy the Bennetts’ land for a nominal fixed price, far less than fair market value, was held by the court to constitute an improper restraint on alienation, effectively transforming the Bennetts’ fee simple interest into a life estate.
o Is the condition precedent uncertain? Test for uncertainty of a condition precedent: the condition precedent must be “capable of being given some plausible meaning” > the requirement for certainty is knowing whether the claimant has met the condition.
If condition precedent is void as against public policy, void as an improper restraint on alienation, or void for uncertainty, the transfer fails and the transferor retains the interest (the transferee gets nothing). In the case of the will, the gift would remain with the testator’s estate (= intestacy).
· CONDITION SUBSEQUENT: if a condition subsequent is invalid, the transfer is total and the interest is vested unconditionally (b/c the condition subsequent is severed from the grant, and the property transfers unconditionally, destroying the grantor’s right re-entry and rendering the transfer absolute).
o Is the condition subsequent contrary to public policy? A condition will be void as against public policy if it discriminates on the basis of race, sex or religion, as per Re Leonard Trust. A condition also may be void as against public policy if it prohibits marriage.
o Is the condition subsequent a restraint on alienability? If a condition imposes a restraint on alienation, that condition will be void, as per Trinity College. In Trinity College, the school’s second option to buy the Bennetts’ land for a nominal fixed price, far less than fair market value, was held by the court to constitute an improper restraint on alienation, effectively transforming the Bennetts’ fee simple interest into a life estate.
o Is the condition subsequent uncertain? Test for uncertainty of a condition subsequent: “the donee must be able to see clearly and distinctly from the outset those actions that will lead to a loss of the interest”. In Re Down, “arrives at the age of 30 years providing he stays on the farm” = void for uncertainty b/c staying on farm was a proviso that could be given no legal effect; in HJ Hayes, the condition that son live on land and cultivate it = void for uncertainty.
If condition subsequent is void as against public policy, void as an improper restraint on alienation, or void for uncertainty, the transfer is total and unconditional > the transferor loses their right of re-entry.
· DETERMINING EVENT: if a determining even is invalid, the transfer fails (b/c determining event = words of limitation, defining nature + extent of estate, so if no words of limitation, nothing can be transferred).
o Is the determining event contrary to public policy? A condition will be void as against public policy if it discriminates on the basis of race, sex or religion, as per Re Leonard Trust. A condition also may be void as against public policy if it prohibits marriage.
o Is the determining event a restraint on alienability? If a condition imposes a restraint on alienation, that condition will be void, as per Trinity College. In Trinity College, the school’s second option to buy the Bennetts’ land for a nominal fixed price, far less than fair market value, was held by the court to constitute an improper restraint on alienation, effectively transforming the Bennetts’ fee simple interest into a life estate.
o Is the determining even uncertain? Test for uncertainty of a determining event is not clear. Could be that the test is the same as the test for certainty of a condition precedent (“capable of being given some plausible meaning”) because the consequence of invalidity is the same (transfer fails). The test of certainty is knowing what event will cause the grantee’s interest to revert the grantor.
If determining event is void as against public policy, void as an improper restraint on alienation, or void for uncertainty, the transfer fails and the transferor retains the interest (the transferee gets nothing). In the case of the will, the gift would remain with the testator’s estate (= intestacy).
· Contingent interest subject to condition precedent: vesting is delayed pending the occurrence of the condition precedent.
· Defeasible interest subject to condition subsequent: vesting is immediate but subject to divestment because the transferor retains a right of re-entry (should the condition subsequent occur, the transferor has the option of exercising their right of re-entry; not automatic). Remember: condition subsequent is an independent, additional clause > not words of limitation.
· Determinable interest subject to determining event: vesting is immediate but subject to divestment because the transferor retains the possibility of reverter (should the determining event occur, the determinable interest ends and the interest transfers back to the transferor automatically). Remember: the determining event of a determinable interest are words of limitation b/c the determining event defines the nature and extent of the estate.
Contingent Interests & Vested Interests
Three ways to hold a property interest