PROPERTY LAW SUMMARY 2010

PROPERTY LAW SUMMARY 2010 LAWSKOOL LTD

PROPERTY LAW CONTENTS Chapter 1: What Is Property?...8 Definition 8 Justifications of (Private) Property....9 What Can be the Object of Property....9 Chapter 2: Fundamental Property Law Concepts...12 Possession..12 Elements of Possession...13 Abandonment.14 Finders.14 Finders and Wrongful Takers..16 Finders and Animus Possidendi.16 Right of Occupier Over Attached Chattels 18 Model Question..19 Adverse Possession..21 Statutes of Limitations..22 General Requirements for Adverse Possession..22 Justifications for Adverse Possession 24 Doctrine of Colour of Title 25 Canadian Case Law..25 The Right to Exclude..28 Chapter 3: Proprietary Interests 30 The Separation of Proprietary Interests..30 Doctrine of Tenure.30 Doctrine of Estates 31 Freehold Estates...32 Leasehold Estates.33 The Trust.33 Model Question. 34 The Creation of Estates.34 Present and Future Interests 35 Basic Concepts. 35 Case Law 37 lawskool.com.ca

Exercise. 37 When Will Conditions Be Declared Void 38 Exercise..42 Chapter 4: Private Regulation of Land Use 43 Easements...43 Test..44 Positive and Negative Easements..44 Creation of Easements.45 Scope of Easements.51 Termination of Easements...52 Model Question..52 Covenants 53 Chapter 5: Dividing Possession: Bailments, Leases and Licenses...53 Bailments.54 Duties of the Bailee...55 Case Law 55 Leasehold Estates: Leases and Licenses..58 Abandonment.61 Model Question..62 Chapter 6: Co-Ownership 63 Tenancy in Common..64 Joint Tenancy..64 The Rights of Owners Between Themselves.66 Severance 67 Termination..68 Statutory Regimes of Co-Ownership...68 Matrimonial Property Legislation.69 Condominium Legislation.69 Model Question...69 Chapter 7: Property Rights in Other Settings 70 Family Property...70 Regulatory Licenses..71 Criminal Law 73 Chapter 8: Regulation and Taking of Property..74 lawskool.com.ca Page 3

Canadian Case Law...74 Test for Determining Whether There Has Been a Taking 77 Chapter 9: Registration 78 Deeds Registration.78 Title (Torrens) Registration...79 Interests in Land 80 Indefeasibility..80 Chapter 10: Aboriginal Title 81 Sui Generis..82 Case Law.83 Model Question...84 CASES A and L Investments Ltd et al. v. Ontario (1997), 152 D.L.R. (4 th ) 692 (Ont. C.A.) 76 Armory v. Delamire (1722) 1 Str. 505, 93 E.R. 644 (K.B.).. 15, 16, 30 lawskool.com.ca Page 4

Assets Co Ltd v Mere Roihi, [1905] AC 176 at 210.. 81 Athans v. Canadian Adventure Camps Ltd (1977) 17 OR (2d) 425 11 Barton v. Raine (1980) 29 O.R. (2d) 685....49 Beaudoin v. Aubin (1981) 33 O.R. (2d) 604 22, 26 Becker v. Cleland s Estate (1981), 35 N.B.R. (2d) 542 (C.A.).23 Bird v. Fort Frances, [1949] O.R. 292 15, 17 Bridges v. Hawkesworth (1851) 21 L.J.Q.B. 75.. 15, 18 British American Oil Co. v. DePass, [1960] O.R. 71, 1959.. 58 Cadillac Fairview Corp Ltd v. R.W.D.S.U (1989) 71 O.R. (2d) 206 (Ont. C.A.) 29 Canada Trust Co. v. Ontario (Human Rights Commission) (1990) 74 O.R. (2d) 481..40 Caratun v. Caratun (1992) 10 O.R. (3d) 385...11, 70 Caldwell v. Elia (2000), 30 RPR (3d) 295 (Ont. CA).. 50 Clarke v. Olscamp and Hughes (1979), 22 Nfld. & PEIR 451.. 23 Clayton v. Ramsden, [1943] AC 320 39 Delgamuukw v. British Columbia, [1997] 3 S.C.R. 1010 82, 83 Diamond v. Chakrabarty, 447 U.S. 303 (1980).. 11 Ellenborough Park, [1956] Ch. 131..43 Goldberg v. Kelly 397 U.S. 254 (1970) 11 Gorman v. Gorman (1998) 16 R.P.R. (3d) 173.. 23 Garfinkel v. Kleinberg, [1955] 2 D.L.R. 844. 50 Haddock et al and Attorney General of Ontario (1990), 73 O.R. (2d) 545. 76 Harrison v. Carswell, [1976] 2 S.C.R. 200... 29 Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45 11 Heffron v. Imperial Parking Co (1974), 3 O.R. (2d) 722 56 Highway Properties Ltd. v. Kelly, Douglas & Co., [1971] S.C.R. 562.....61 Keron v. Cashman, 33 A. 1055 (N.J.Ch., 1896)..15, 17 Laurin v. Iron Ore Company of Canada (1977) 82 D.L.R. (3d) 634....41 Lundrigans Ltd v. Prosper (1982) 132 D.L.R. (3d) 727.. 22, 26 Madison Investments v. Ham (1984) 45 O.R. (2d) 563.. 23, 27 Manitoba Fisheries Ltd v. The Queen, [1979] S.C.R. 101....74 Martin v. Town N Country Delicatessen Ltd. (1963) 42 D.L.R. (2d) 449 55 Metro-Matic Services Ltd v. Hulmann (1973) 4 O.R. (2d) 462.. 58, 60 Moffatt v. Kazana, [1969] 2 Q.B. 152. 14, 15 Moore et al v. Royal Trust Co., [1956] S.C.R. 880. 37 lawskool.com.ca Page 5

North Bay T.V. and Audio Ltd. v. Nova Electronics Ltd (1984) 47 O.R. (2d) 588.62 Parker v. British Airways Board, [1982] 1 Q.B. 1004.. 18, 20 Phipps v. Pears, [1965] 1 Q.B. 76.45 Pierson v. Post, 3 Caines 175 (S.C.N.Y., 1805)...13 Pugh v. Calhoun (1980), 32 N.B.R (2d) 311 (N.B. SC QBD)...23 Punch v. Savoy s Jewellers Ltd. (1986) 54 O.R. (2d) 383...56 Re Chaytor (1980), 27 Nfld. & PEIR 368.23 Re Foster (1992) 8 O.R. (3d) 514...11, 72 Re National Trust Co. and Bouckhuyt (1987), 61 O.R. (2d) 640. 71 Re Noble and Wolf, [1948] O.R. 579 affirmed [1949] O.R. 503...40 Re McColgan, [1969] 2 O.R. 152..37 Re St. Clair Beach Estates Ltd v. McDonald et al. (1974) 5 O.R. (2d) 482..22, 25, 26 Re Tilbury West Public School Board and Hastie, [1966] 2 O.R. 20..38 Reynolds v Ashby & Son [1904] AC 461 (HL) 19 R. v. Marshall, R. v. Bernard, [2005] 2 S.C.R. 220...83 Sandom v. Webb [1951] 2 All ER 131..49 Sifton v. Sifton, [1938] A.C. 656 38 Stewart v. the Queen, [2002] 2 S.C.R. 645.. 14, 73 Strickland v. Murray (1977), 17 Nfld. & PEIR 368 (Nfld. SC TD). 23 Teis v. Ancaster (1997) 35 O.R. (3d) 216.27, 28 The Tubantia, [1924] All ER 615 (Pr. & Ad. Div.)...13 The Queen in Right of British Columbia v. Tener et al. (1985), 17 D.L.R. (4th) 1..75, 77 Wheeldon v. Burrows (1879) 12 Ch.D. 31...48 Wong v. Beaumont Property Trust Ltd, [1965] 1 QB 173.48 Wotherspoon v. Canadian Pacific Ltd., [1987] 1 S.C.R. 952 60 NOTE lawskool.com.ca Page 6

The Lawskool Property Law Summary covers real property law, which at times touches on the areas of equity and trusts and torts law. If some of the material does not sound too familiar with what you are learning in your real property course at university, it is probably related to Equity & Trusts. Don t panic. To assist you better understand how the law is applied in practice we have included an Exam Hints Section at the end of some sections. It may include an exam style question and a flow chart detailing the sub headings that you should make and how you should go about answering the question in an exam. Please note that the sample examination questions will be easier than that of the standard which you will be tested on. Your real examination paper will also contain lots of problems mixed together which will make identifying the issues one of your biggest challenges. Our sample questions, placed at the end of each section will only contain issues related to that section. They are only meant to give you a taste of how a question relating to that topic may sound. For more detailed model exams please see the Lawskool Model Exam. Chapter 1: What Is Property? lawskool.com.ca Page 7

1.1 DEFINITION Property refers to a set of rules that govern the relationships between people regarding the use, control, and transfer of valued resources. While property is usually used to refer to things that one can own, the law conceptualizes property as a right or a collection of rights over things which are enforceable against other people. 1 Property is therefore conceptualized as a bundle of rights. This bundle of rights includes the right to use, right to exclude others from using, and rights to transfer, all of which can be separated at a given moment in time since there are a number of different bundles the law can construct. Professor A.M. Honore identifies eleven elements of the bundle of rights that comprise ownership. These include the right to possess, the right to use, the right to manage, the right to the income of the thing, the right to the capital, the right to security, the rights or incidents of transmissibility and absence of term, the duty to prevent harm, liability to execution, and the incident of residuarity. 2 It is not necessary that all these rights co-exist before there is a propriety interest. It is important to note that there is no generally accepted essential core element that makes something property. Some academics argue that there is no single characteristic that creates a property right while others, such as Merrill, argue that the right to exclude others is the essential part of the bundle of rights. 3 However, as we will see later, property rights are never absolute. Property law is also relational. An owner only has property rights against someone else. For example, a finder of a diamond ring has rights against everyone in the world except the true owner. In order to enforce your property right, there must be another person on the other side. 1 Bruce Ziff, Principles of Property Law, 4 th ed. (Toronto: Thomson Carswell, 2006) at 2. 2 Ibid. 3 See Thomas W. Merrill, Property and the Right to Exclude (1998), 77 Neb. L. Rev. 730 lawskool.com.ca Page 8

1.2 JUSTIFICATIONS OF (PRIVATE) PROPERTY There are various theories that provide a justification for the allocation of property rights. These theories work to legitimize property law as a legal and social institution. As Ziff notes, [P]rivatizing the decision-making power over resources inevitably means that some will do quite well [materially] and others not. There had better be good reasons for allowing that to happen. 4 Some theoretical justifications of property include: (1) Labour Theory (John Locke): When a person labours on something it becomes your property. (2) Occupancy/Possession: Once a person occupies or takes possession of something it becomes his property. (3) Utility: Based on the ideas of Jeremy Bentham and John Stuart Mill, property entitlements will be based on the consequence that produces the greatest good for the greatest number of people. 1.3 WHAT CAN BE THE OBJECT OF PROPERTY The law divides property into real property (rights in relation to land) and personal property (things other than land such as goods and chattels). While this is a distinction that has its roots in the Middle Ages, the laws governing real and personal property have since merged greatly. 5 4 Ziff, supra note 1, at 9. 5 Ziff, supra note 1 at 69. lawskool.com.ca Page 9

Real property can be divided into corporeal and incorporeal categories which have to do with whether the object of property is capable of being possessed. Similarly, personal property can be divided into chattels personal (tangibles) and choses in action (intangibles). Choses in action usually refers to copyrights, trademarks, and patents. What is the Extent of Ownership? The maxim cujus est solum ejus est usque ad coelum et ad inferos means that the owner of the soil holds title all the way up to the heavens and down to the depths of the earth. 6 In other words, an owner owns what is below the surface of his property (soil, minerals, water) and above his property (airspace). This aspect of ownership has repercussions in situations such as condominium developments, mining, and flight paths. The courts usually resist the literal application of the maxim, finding rather a number of limitations on the scope of ownership. Airspace The position in common law Canada is that ownership of land confers rights in the airspace above the land and that rights to airspace can be separated from rights to the land below. 7 There is no fixed test or limit for the determination of how much of the airspace a person can own however case law suggests that courts have considered the ideas of reasonable or ordinary use and plans for future development when dealing with trespass claims regarding airspace. 8 Below the Surface There is little case law on this issue in Canada however it is generally accepted that ownership below one s land surface should be limited to that which can be reached by the surface owner or that which can be reasonably used by that person. 9 6 Lord Bernstein v Skyview & General Ltd [1978] 1 QB 479. 7 Ziff, supra note 1 at 82. 8 Ibid. 9 Ziff, supra note 1 at 84. lawskool.com.ca Page 10

Recent Inclusions Within the Definition of Property Hot News Intellectual Property (copyright, trademarks, patents) Taxi license 10 Welfare Benefits 11 One s personality, image, name 12 Genetically modified bacterium 13 (In the United States) Things that Cannot be the Object of Property Persons Professional license (ie law degree, license to practice medicine) 14 Human organs Things owned in common such as air. Confidential information (in the area of criminal law) Genetically altered non-human animals 15 (In Canada) 10 See Re Foster (1992) 8 O.R. (3d) 514. 11 See Goldberg v. Kelly 397 U.S. 254 (1970). 12 See Athans v. Canadian Adventure Camps Ltd (1977) 17 OR (2d) 425. 13 See Diamond v. Chakrabarty, 447 U.S. 303 (1980) 14 See Caratun v. Caratun (1992) 10 O.R. (3d) 385 15 See Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45 lawskool.com.ca Page 11

Chapter 2: Fundamental Property Law Concepts 2.1 POSSESSION In terms of establishing ownership of personal property, possession is such a large part of the bundle of rights that it is prima facie proof of ownership. An owner who seeks to defeat the claim of someone in possession bears the onus of establishing a prior possessory right. 16 Possession is the basis of ownership. It usually refers to the control someone has over a thing. However, it is a lesser right than absolute ownership and the general rule is that a person in possession of land or goods, even as a wrongdoer, is entitled to take action against anyone interfering with the possession unless the interfering person can demonstrate a superior right to possession (true ownership). 17 This is referred to as relativity of title a possessor may assert his possessory rights against everyone except the person with a superior title. Ownership is distinct from possession. Ownership contains the right to rent, give up, transfer, destroy, eject an adverse possessor before the statute of limitations runs out, etc. ( the bundle of rights ) while a possessor does not enjoy these rights. Possession is important because it may be a basis for acquiring proprietary rights. For example, in cases of adverse possession, acquisitive prescription may occur thereby allowing the person in possession to take ownership title. The law gives rights to possessors in order to prevent free for alls. It establishes a hierarchy among individuals who compete or may compete for the use of a given thing. The rights of possessors are also recognized in order to promote the efficient use of resources. The importance of possession will be seen in the law of bailment, adverse possession and the law of finders. 16 Marjorie L. Benson, Marie-Ann Bowden and Dwight Newman, Understanding Property Law: A Guide to Canada s Property Law, 2 nd ed. (Toronto: Thomson Carswell, 2008) at 23. 17 MA Neave, CJ Rossiter, MA Stone. Sackville and Neave Property Law (1999) 6 th Ed Butterworths Sydney. lawskool.com.ca Page 12

2.1.1 Elements of Possession It is important to know that Canadian law does not recognize a single notion of possession applicable for all purposes 18 however the basic elements of possession have been established. The core components of possession are: Animus possidendi (an intention to possess) Physical control: the physical aspect of possession (i.e. degree of control required) may be quite relative, depending on the nature of the thing at issue. For example, in Pierson v. Post 19, one man was pursuing a fox during a hunt when another party intervened, killed the fox, and took possession of the fox. The Court found that the party with physical control and possession of the fox was the true owner of the fox despite each party s intention to possess the fox. Problems arise over whether certain acts of control are sufficient to exclude others so as to constitute the requisite amount of control over the thing. For example, The Tubantia 20 involved a case where two parties were trying to secure possession of a sunken ship at the bottom of the ocean. The case raised the issue of how to demonstrate the intent and requisite physical control over a shipwreck. The Court determined that the first set of divers did everything a reasonable and prudent owner of a shipwreck would do to try and secure possession given the context. This included the maximum use and occupation of the ship to the extent that it was possible and an intention to possess the ship and exclude others. 18 Lifestyles Kitchens & Bath v. Danbury Sales Inc., 1999 CarswellOnt 2594 (S.C.J.) at para 12 (per Cullity J.) 19 Pierson v. Post, 3 Caines 175 (S.C.N.Y., 1805) 20 The Tubantia, [1924] All ER 615 (Pr. & Ad. Div.). lawskool.com.ca Page 13

2.1.2 Abandonment A true owner or other rights bearer may choose to abandon the good and his rights to the thing by giving up both physical control and his intention to possess. Some cases involve the determination of whether the true owner had abandoned the object in question in order to determine if another person can claim title to it. However, it is generally difficult to prove abandonment because the evidence must be clear and involves the assessment of the mental intention of the individual. 21 Abandonment can be established through an express act or inferred from surrounding circumstances, including the passage of time, the nature of the transaction, the owner s conduct, and the nature and value of the property. 22 Cases Moffatt v. Kazana 23 FACTS: The true owner had forgotten about his metal tin of money in the attic and then sold his house. An employee of the new owners finds the money and gives it to the new owners (occupiers of the house). ISSUE: Did the true owner abandon his ownership rights to the metal tin with money? HELD: No Ownership is not abandoned simply by forgetting where one put the object. It involves an active, positive act of divestment. To order the complete version lawskool property law summary please visit www.lawskool.com.ca/summaries 21 Benson, Bowden and Newman, Understanding Property: A Guide to Canada s Property Law. 2ed. (Toronto: Thomson Carswell, 2008) 26 22 Stewart v. Gustafson (1998), [1999] 4 W.W.R. 695 (Sask. Q.B.)); Benson, Bowden and Newman, Understanding Property: A Guide to Canada s Property Law. 2ed. (Toronto: Thomson Carswell, 2008) 26. 23 Moffatt v. Kazana, [1969] 2 Q.B. 152. lawskool.com.ca Page 14