Notes de cours - Property Law II PDF

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DTN 723 – Property LawUnit 4: Fundamentals of Real PropertyIntroduction: History of Land Law and the Doctrine of Tenures Mossman, pp 202- Interests in Land Real Property Law creates various interests in land, also known as: Proprietary interests  Possessory interests (freeholds; leaseholds) o The p...

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DTN 723 – Property Law Unit 4: Fundamentals of Real Property Introduction: History of Land Law and the Doctrine of Tenures Mossman, pp 202-216 1. Interests in Land Real Property Law creates various interests in land, also known as: Proprietary interests  Possessory interests (freeholds; leaseholds) o The person that holds the interest in land has or will have possession o The idea of ownership in civil law is not as defined in common law – the owner is a person who has an interest in land in fee simple. What you own at common law with a fee simple is not the land itself but an interest in land which comes with a set of privileges.  Non-possessory interests (servitudes) o A non-possessory interest allows access to land or privilege over it without actual possession – e.g., a right of way.  This is opposed to a licence to use which is granted and could be revoked by the owner at will.  Present/Future interests  Shared/Concurrent interests o E.g., co-ownership 2. Doctrine of tenures: Feudal Roots of Common Law Property 1066 Norman Conquest: The King is the only Owner of Land  The Crown in a tenurial system is the paramount lord who holds the radical title to land  Everyone else is a “tenant” of the Crown o This explains why old concepts of common law derives from old French. The word “tenure” comes the Latin word “tenere”: to hold, “tenir”. o To this day, we use the expression “landlord” to describe the owner in fee simple of a leased property.  In medieval times: pyramidal structures People were entitled to land through tenures. At common law, only one entity owns the land – the Crown. The Crown owns the radical title in land. The tenants have interests in land, not ownership. People held rights from the Crown. The tenurial system was pyramidal. The system of tenure aimed at making sure everyone could benefit from the land at varying degrees, doing so by dividing the land. Quia Emptores Statute (1290): The End of Subinfeudation 1

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In principle, in a feudal system, land can be infinitely subdivided The Statute put an end to that possibility by holding the practice of substitution

Quia Emptores recognizes land as an alienable asset: ability to sell and alienate land without consent from the lord. Land that is owned can be transferred and sold. This process of substitution is still in place in real estate transfers. What is sold is not the land itself but the interest in it. 3. Effects of a tenurial system Relativity of Title  Tenurial ownership vs. allodial ownership o Tenurial: relative title derived from the radical title held by the Crown o Allodial: absolute dominion Titles in common law are relative, they derive from the Crown’s will. The lord and the tenant have interest in land. There is no single type of estate that is absolute in common law. Reciprocity of rights and obligations  Free Tenures o Tenures in chivalry o Spiritual tenures o Tenures in free and common socage (1660 Statute of Tenures)  This tenure came with an obligation of providing agricultural services to the lord. This may explain why property is seen as a relationship. Unfree Tenures  Associated with lower classes – this tenure came with more obligations than rights to it. Unfree tenants were barely better than slaves in some instances. Eventually, the various obligations and services were turned into money payments. In 1660, all tenures were converted in tenures by free socage through the Statute of Tenures, which dramatically changed property law by allowing increased marketability of real instate. The statute also simplified the services of tenants down to the payment of taxes, which confirms the fungible value of land since taxes are calculated based on the financial value of land. 4. Seisin Seisin: Determining who is in possession on land  Therefore, who owned duty to their lord (responsible to pay taxes), the person is seised of an interest in land, this refers to the person with title or the legal possession 2

Provided an early form of registry  More based on oral tradition Enabled conveyancing of land  Feoffment with livery of seisin o The former tenant would literally give a piece of the land to the new owner to confirm the transfer to the new tenant. This completed the transfer of land. “Conveyance” is an instrument that transfers property from one person to another. (Barron's Canadian Law Dictionary) 5. Doctrine of Tenures in Canada Reception of System of Tenures in Canada  The Crown holds the radical title on all lands in the Colonies o This had an important impact on Indigenous peoples.  All land grants in British North America made in free and common socage o Made it easy to exchange in the real estate market. The various hieratical system of the tenurial regime does not have practical effects in Canada – the categories such as spiritual tenures were never in place. Legal Contacts: Common law/Civil Law/Indigenous Law  The contact between common law and Indigenous land rights led to the idea of a sui generis interest in land for Indigenous peoples, not a tenurial right over land since it was rather established on immemorial possession. 6. Tenurial system in the 21st Century Mostly obsolete, but…  No more feudal dues associated with ownership, etc. Some concepts remain (e.g., Escheat)  The feudal system still has practical effects today.  Escheat: When the holder of a fee simple dies without heirs (blood relatives or written will), the land returns to the Crown. This shows the idea that property is relative. Even though a fee simple is as absolute a right a right can be, it can still return to the state. o Escheat is “A type of reversion wherein property reverts to the state as the ultimate proprietor of land” (Barron's Canadian Law Dictionary)  Another impact of the tenurial system is on the definition of Indigenous title as a sui generis title derived from the Crown’s honor. In Canada, there is no idea of absolute right to property. Property is not a constitutional right. 3

Revisiting the idea of stewardship of land in the context of indigenous land rights  Stewardship: An owner in a tenurial system does not hold property only for his own self-interest but also has duties towards the community. Hence the existence of a mutuality of obligations, which created a social network of some sort.  The idea of stewardship of land is very present in Indigenous traditions and is expressed by the idea that we are here to serve land rather than the land existing to serve us. As such, we have a duty to protect the land.  The idea of stewardship at common law was lost through time and has be replaced with the conception of property as power. Stewardship is particularly relevant in the context of private property in a capitalist market. It needs to be remembered that the concept of private ownership is relatively new, mostly associated with the industrial revolution which effectively set in place modern capitalist economy.  Modernly, there is a rising discourse that we should own a duty of care to the land. Therefore, the idea of stewardship is not completely lost and still can have a utility nowadays. 7. What about Equity? Equity = acting fairly, justly  Equity is a set of rules separate from common law, which corrects its inequitable effects. Does the application of a common law rule lead to unnecessary harsh results?  For example, in real estate transactions, the moment a contract is made for the purchase of land, that the land is transferred, the future owner as an equitable interest in the land, does not have legal rights, but if the seller fails to comply with the contract, the buyer can seek damages. Origin: Crown’s Residual Power over the Administration of Justice  Courts have the power to make rules, but the Crown still has a say on how the law applies. Some Principles:  Equity acts in personam  Equity follows the law o Equity is a supplement to common law. It is meant to improve it, not supplant it.  Equity considers the substance, not the form o The Chancery was historically more flexible (on evidence) and sensitive. Consequence: Legal Rights vs. Equitable Rights  In cases of conflict, the rules of equity prevail “There is nothing which so generally strikes the imagination, and engages the affections of mankind, as the right of property; or that sole and despotic dominion which one man

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claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.” William Blackstone, The Laws of England (1765-1769) How does this statement fit within a tenurial system? Is common law property the equivalent of absolute property in civil law? Conversely, is there such a thing, in practice, as an absolute right to property?  The way property is presented in this quote contrasts with English principles giving that the doctrine of tenure does not give total exclusivity on land. Here, Blackstone wants to highlight the political power property can give. The quote also translates the fact that the tenurial regime, while it initially sought to maintain the power in the hands of the sovereign, slowly shifted towards granting control to the actual tenants of land. “The Crown’s radical title is, in truth, no proprietary title at all, but merely an expression of the Realpolitik which served historically to hold together the theory of tenure.” Kevin Gray & Susan Francis Gray, “The Idea of Property in Land” If the tenurial regime is a fiction, why maintain it?  The tenurial regime is mostly symbolic. However, the doctrine of tenure provides for most of the vocabulary which is still in use today when discussing property law.

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Possession in Relation to Land: Possessory Title and Registration Mossman, pp 132-147; 153-166 1. The Importance of Possession at Common Law Legal responsibility in a torts system is determined by possession  Once title is established, an owner does not need to stay in actual physical possession.  Legal possession (seisin) is not the same as occupancy. Factual possession does not equate to seisin – it is only prima facie evidence of seisin.  An owner of a fee simple has seisin of the land. If that land is subject to a lease, the lessee can occupy the land, use it or be in possession of it, although he does not have seisin of that land.  Title established by possession is not infallible. The origins of titles in land: From first possession to adverse possession  First possession (possession that is against the possession of the true owner) may defeat a legal title. This confirms the idea that property interests at common law are relative.  Adverse possession leads to possessory title. o Adverse possession: possession that is contrary to the legal possession. Theoretical Justifications:  Theory of productive use (John Locke, Two Treatise of Government – 1689): the triumph of private property o Labour theory of property: this theory justifies private property by natural law. Since people own their body, they also own the product of the labour of their body.  This is why fence represent an important symbol in common law property. o This theory is linked to the insertion of property in a capitalist market. Possession creates a title which is held individually to the exclusion of all others = private property o Locke was ahead of his time where land was concentrated in the hands of a few powerful lords – possession separated land from the commons.  Tragedy of the commons (Adam Smith, The Wealth of Nations – 1776; Garrett Hardin, 1968): property and commerce o Human beings do not have an incentive to make the land productive when it is held in common. Therefore, in the context of increased scarcity of resources, the theory goes at private property is the most efficient way to make sure that resources are maximized. Market oriented notion of utility associated with a liberal economy. Possession and dispossession in the context of colonialism  Those theories justify the dispossession of Indigenous lands as they held the land without exploiting it (developing the land through agriculture). 6

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o Indigenous peoples did not cultivate the land in a European way, did not separate the land, etc. so the doctrine was used to dispossess Indigenous peoples from their land. The colonizer had a divine mission by natural law to cultivate the Earth. Possession at common law was linked the commercial nature of property. Therefore, the use of land made by Indigenous peoples did not fit within that definition.

2. Possessory Title What is it? A common law mechanism which favours active possessors  A theory that favours the active possessor over the title holder to guarantee productivity and accountability.  However, as property systems grew more complex and as registration mechanisms became more sophisticated, both courts and legislatures started to provide increased protections for the real title holder in the name of certainty. Nowadays, more and more provincial legislatures are impeding the effects of adverse possession. A possessory title is obtained through adversary possession. A possessory title is a title based on possession. Adverse possession: A person in possession of land in an uninterrupted and in a public manner obtains title to that land against all but the legal title owner (true owner). In this context, the possessor acts like the owner as noted in Perry v Clissold. Perry v Clissold, [1907] AC 73 (PC) “a person in possession of land in the assumed character of owner and exercising peaceably the ordinary rights of ownership has a perfectly good title against all but the rightful owner.”  Adverse possession looks at the factual situation to determine who should have title to the land despite the existence of a legal title. Requires adverse possession by a trespasser or squatter (the adverse possessor) acting like an owner  Squatting can lead to a legal recognition of right. At common law, possessory title can also be claimed against someone who had prior possession, not only against the true owner. Therefore, technically, it is possible to claim possessory title against a lessee. 3. Statutes of Limitation Historically, the person in possession was prima facie entitled to full protection – presumption of the land and the title to it. This presumption could be countered by another person establishing prior possession or the true (title) holder.

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Limits the true owner’s ability to oppose possessory titles and claim back the land after a certain time  E.g., Ontario’s Real Property Limitations Act (RPLA), s 4: 10 years o After the statutory period expires (10 years), the right to recover possession is extinguished. o This is similar to the civil law concept of acquisitive prescription. Effect:  Extinguishment of rights of the true owner (e.g., s 15 RPLA) o This does not mean that the possessor automatically has title. S 15 RPLA does not transfer title to the possessor. o Statutes of limitation define an end point, after which the true owner (or anyone with a right to possession that is prior in time) can no longer succeed in negating a possessory title.  Allows the adverse possessor to register their possessory title The true owner has paper title whereas the possessor, after the limitation period passes, acquires a title based on possession which can then be registered given the rules of the jurisdiction. Policy considerations:  Reward for productive use? o A squatter that makes uses of the land can be seen as a better owner. This is problematic as it poses a judgment on what is productive in fact. o Possessory title rewards the person who makes the best use of the land.  Prioritizing factual situations (rather than abstract title)? o One needs to make it loud and clear, public, that the land it theirs or the ownership title won’t match practice. Possession of land is a much more communicative act than paper. Clear communication = clear title = better trade.  This is linked to the importance of communication. Property owners must make and keep their communications clear because clear titles facilitate trade and minimize resource-wasting conflict. Unequivocal status enables property to be traded and used at its highest value.  Condemning carelessness in land management? o This is linked to the theory of maximization of resources.  Certainty? o To allow the title holder to retain the possibility to claim its title indefinitely creates some uncertainty in the market. Statutes of limitations fix that problem from freeing land from potential conflicts that could arise. The contemporary registration systems would however nowadays provide more certainty than adverse possession. o Nowadays, people’s expectations are that registered titles are respected. 4. What Counts as Adverse Possession? 8

Starting point: dispossession or discontinuance of possession of the true owner (registered owner) (e.g., s 5(1) of RPLA)  Example: Piper v Stevenson (1913): dispossession at the moment of building a fence around disputed land (contrast with Leichner v Canada (1997)). o Fencing the land does not automatically mean that there is dispossession. In Leichner v Canada, the fencing of the land was not sufficient to establish dispossession because the fence was not meant to keep others out of the land (thus to claim an exclusive use) but rather to keep the cattle on the land. This confirms the idea that possession is intrinsically linked with private property and its corresponding right to exclude.  Adverse possession can be on public land. Public land was claimed in Leichner v Canada.  Re St Clair Beach Estates Ltd v MacDonald (1974): dispossession AND discontinuance o Two neighbors. M makes a claim of adverse possession. When did dispossession start? M did make several acts suggesting dispossession, but the court suggested that the simple fact that the true owners kept picking cherries from time to time meant that the possession was never actually discontinued. Possession does not necessarily require constant active activity to be established, particularly in the case of larger lots of land. Possession may continue to subsist notwithstanding that there are sometimes long intervals between the acts of user. o “The owner of a farm cannot be said to be out of possession of a piece of land merely because he does not perform positive acts of ownership all the time.”  For example, if you have a summer cabin, uses it in the summer but not all year round, you do not lose possession the rest of the time. If you use it consistently in the summer, it is practically impossible to claim adverse possession. o Context is important. Here, the nature of the land, in a rural setting was determinant. o This case suggests that there must be both dispossession and discontinuance to start the clock of the statutes of limitation. However, this seems contradictory to the text of s. 5 RPLA which says that the starting point is disposition or discontinuance. - Dispossession occurs where a person comes in and puts another out of possession. - Discontinuance of possession occurs where the person in possession goes out and another person takes possession. Adverse possession must be open and notorious  Clear act o A clear act which shows to the rest of the world control over an object and the intention to exclude the owner or the person entitled to possession from possession.  A fence can be a clear act. Consistent use in the face of the owner would also count as a clear act. 9

Taking a land by force does not count as adverse possession. It is considered theft. Adverse possession requires peaceful possession. Communicated to others o To hide the fact that you are using the land would not count. Adverse: does not derive from authorization or permission of the true owner o When the owner gives permission to use, it cannot be considered as adverse. Tenancies at will are an exception to this rule. Tenancies at will allow someone to occupy land with the permission of the owner, but a permission that can be revoked at any time. If the permission is not revoked, after 10 years, possessory title could be claimed. See s. 5(7) RPLA. o Otherwise, a lease holder cannot establish possessory title. 

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Continuous and ex...