the tenure & estate systems - lsa mcgill - aÉd mcgill...

David Suk’s CML Property Summary, Professor Gold, Fall 2014Drop me a line if this has been helpful!

Table of Contents

The Tenure & Estate Systems..................................................................................................2The Doctrine of Tenure............................................................................................................................................................2Reception (Ziff)............................................................................................................................................................................2The Estate System...................................................................................................................................................................... 3

Future Interests............................................................................................................................................................................ 3Conditional interests.................................................................................................................................................................. 3Grounds for the invalidity of a condition.......................................................................................................................... 4

Shared Title.............................................................................................................................4Joint Tenancy (Co-ownership with survivorship) (BC Law Institute)................................................................4Tenancy in common (Co-ownership without survivorship) (BC Law Institute)............................................5

Report on Accounting??? Did Thomas take lecture notes???...................................................................................5

Remedies................................................................................................................................5Real Actions (Causes of action for real property)........................................................................................................5Remedies: Personal Property (LRC BC)............................................................................................................................6

Acquiring Property..................................................................................................................6Transfer: acquiring (real or personal) property from another person..............................................................6Acquiring personal property via possession (Finders & Abandoned/Res Nullius).......................................7

The notion of possession (personal property)................................................................................................................ 7Acquiring abandoned property or res nullius (property of no one) via possession........................................7Finders: possessory title to non-abandoned property by finding it (or even by stealing it).......................7

Acquiring Real Property via Possession (Adverse Possession).............................................................................8Acquiring Property Rights Through Labour...................................................................................................................9

Easements (similar to CVL servitudes).....................................................................................9How to Create an easement (don’t forget Ellenborough Park test first!).......................................................10

First way to create an easement: express grant or reservation...........................................................................10Second way to create an Easement: Implied grant or reservation.....................................................................10Third way to create an Easement: presumed grant (aka prescription)...........................................................11

Scope of easement:..................................................................................................................................................................12Ways of ending an easement.............................................................................................................................................. 12

Takings..................................................................................................................................12Takings......................................................................................................................................................................................... 13Takings Cases in the USA......................................................................................................................................................13

Leases/Licenses.....................................................................................................................14

Bailment................................................................................................................................17

What is Property?..................................................................................................................17Labour Theory of Property (John Locke):...................................................................................................................... 17Occupancy or Possession (primarily a variant on the Labour Theory)............................................................18Utility (Bentham; Mill)........................................................................................................................................................... 19Freedom and Personality (Hagel)..................................................................................................................................... 19Radical Theories....................................................................................................................................................................... 204. Law and Economics............................................................................................................................................................ 20

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Property as a bundle of rights............................................................................................................................................. 21The problem with any theory of property, and many cases analysing property:.......................................22

ABORIGINAL PROPERTY.........................................................................................................22

Solution Maps.......................................................................................................................22Creation of new property right question.......................................................................................................................22

MISC......................................................................................................................................23

The Tenure & Estate Systems

The Doctrine of Tenure The doctrine of tenure describes the relationship between what we colloquially call a “landowner” and

the crown – or historically in England, some intermediate lord. According to the doctrine, the “landowner” is in fact not an owner at all, but a tenant of the lord.

Today in Canada there is only one type of tenure, “free and common socage”, which is a direct relationship between the tenant and the crown. The doctrine of tenure, however, remains important, because it provides the conceptual basis for CML property. Certain CML concepts cannot be understood apart from the doctrine of tenure.

E.g. “echeat”, whereby land reverts to the crown if its title-holder dies without an heir. Why does this happen? b/c the crown, and only the crown, owns the land in the first place.

Also the estate system. If the king owns everything, what is a tenant’s interest in the land? Answer: a temporally bounded abstract right in the land; an “estate”.

Feudalism and its collapse. Tenants holding “free tenure” provided the lord or king with an oath of loyalty and certain services:

military, religious, spiritual, or agricultural services. In exchange, the tenant received from the lord protection and certain rights in land. In practice, the services were often commuted for a cash payment.

“Villain tenants” held only unfree tenure. They were mere occupiers for the lord. They had no property rights, including no right to bequeath. They had no place in the feudal structure, and therefore no access to the king’s justice (in civil matters).

A tenant wishing to transfer his interest in the land had two options: Substitution: The transferor gives his position in the feudal hierarchy, together with its

privileges and responsibilities, to the transferee. Subinfeudation: The transferor makes the transferee his tenant, below him in the feudal

hierarchy. Transferor’s preferred the latter option b/c the prior involved dropping out of the feudal

hierarchy, thereby loosing status, legal protection, etc. Subinfeudation made the feudal hierarchy so complex that it was difficult for lords to collect rents and

services from their tenants. Enactment of Quia Emptores, 1290, prohibited transfer by substitution. Gradual effect was

simplification of the feudal hierarchy b/c when a person died w/o an heir, his position in the feudal hierarchy, along with his interests in land, reverted to the crown (“echeat”).

Tenures Abolition Act 1660 , almost all free tenures were converted into 'free and common socage' or 'freehold tenure'.

Reception (Ziff) When a “terra nullus” is colonized, CML is received in its entirety whole the law of England (statute

law) forms part of the laws of the colony as far as it is applicable to the conditions of the colony.

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North America was viewed as terra nullus notwithstanding First Nation presence b/c they were viewed as savages w/o law or civilization.

Rationale Prudence – to avoid uncertainty Convenient – no need to re-invent the wheel Displacing statute law would mean that old and unreformed CML property law would govern. Justice: English law was viewed as encoding principles of universal justice

The Estate System The estate system is a necessary corollary of the doctrine of tenure. It explains the apparent

contradiction between the idea that the king owns everything and the idea that tenants have an interest in the land.

An estate is a temporally bounded abstract right in land; it is, “a time in the land, or land for a time” (Walsingham’s Case, 1573).

Fee Simple: a grant from the crown in perpetuity, including the right to transfer inter vivos or to one’s heirs. This is the largest possible bundle of rights.Life Estate: a grant measured by the lifetime of a person. May be the lifetime of the grantee (pur sa vie) or another (pur autre vie). Transfer of a life estate is possible, but the transferor can only transfer what she has, an estate that

will last only until someone’s death. For example, if A grants a life estate to B pur sa vie, and B conveys the estate to C, it is now

a life estate pur autre vie (B’s vie). When B dies, his interest reverts back to A.Fee Tail: Not possible in ON since 1956 and therefore not on the exam. In brief, an estate granted with a restriction on the transferee’s right to transfer. For example, “To

John and the heirs male of his body” or “to John and the heirs male of his body by his wife Joan”. Abolished b/c CML hates restraints on alienation and b/c entailed land could not enter market

(economic argument).

Future Interests Reversion: any interest retained by the grantor. No need to be specified; arises by operation of law from grantor’s failure to alienate the entire

interest. E.g., grantor of a life estate has remainder in fee simple.Remainder: an 3rd party’s future interest created by grant of an estate less than fee simple E.g., “to A for life, then to B”. B has a remainder in fee simple, grantor has no reversion. Waste: action or inaction on the part of the estate owner which altered the physical character of the land To protect the interests of the remainderman, an estate holder with less than fee simple cannot

generally engage in certain types of waste. Ameliorating waste (improvements) is allowed, permissive waste (defaults in maintenance) is

allowed, but voluntary waste (dimuntion of the value of the land – e.g. quarrying or logging) is not allowed.

All unless the grant stipulates otherwise.

Conditional interests Fee simple subject to condition precedent: Condition must be satisfied before the grantee has any right of enjoyment at all The grantee of a conditional estate gains a “vested interest” in the estate once the condition is met.

Vesting ≠ (necessarily) immediate right to possession. E.g.: “to A for life, then to B for life if she reaches 21": If B attains 21 b/f A dies, B has a vested interest but no right to possession.

Fee simple subject to condition subsequent: A full fee simple estate, but one subject to termination if the condition is met. When the condition is met, the grantor has the right of re-entry, but the grantee’s estate is not

terminated until the grantor exercises this right. If the condition is successfully challenged, the estate becomes fee simple w/o condition. (Sifton)

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The estate is fee simple subject to condition subsequent where the granting document frames the condition is a “divided clause from the grant”, conceptually separate from the clause granting full fee simple. (Re: McCoglan)

“provided that, on condition that, but if, if it happen that”; merely indicative (Re: McCoglan; Sifton v Sifton)

Determinable fee simple: An estate qualified by a condition such that it is less than fee simple; the condition is part and parcel of the estate, not a separate condition that may end it. When the condition is met, the estate automatically reverts to the grantor once the condition is met. If the condition is successfully challenged, the estate reverts to the grantor / remainderman. The

thinking here is that the condition was part of the grant, so if the condition is invalid, so is the grant The estate is determinable fee simple where the condition is part of the clause making the grant.

Key words: while, during, as long as, until; merely indicative (Re: McCoglan; Sifton v Sifton)Ambiguity: CML property tends to avoid interpretations that would restrict the rights of a title holder and tend to read ambiguity against the grantor / drafter. Therefore, in the presence of ambiguity, the court generally prefers fee simple subject to condition

subsequent over determinable fee simple b/c the latter estate reverts to the grantor/remainderman immediately once the condition is met, or found invalid (e.g. Sifton v Sifton).

Grounds for the invalidity of a condition Uncertainty: A clause is void for uncertainty unless “the court… and…the parties…can see from the beginning precisely and distinctly” what would and would not meet the condition. (Sifton v Sifton; also used in Clayton v Ramsden)Public Policy: There are recognised public policy grounds by which a court will invalidate a condition. The public policy ground must be recognised (Noble v Wolf), for example:

Discrimination (Re Canada Trust) or Encouraging divorce: “if you divorce your husband” (Gold), Restraint on marriage are void if they are overly strict (you can only marry him), but are

allowed if they are sufficiently general (Clayton v Ramsden) Restraint on Alienation: a condition is void if it overly restrains the grantees’ ability to

transfer his/her interest. In recent cases, the question is often framed in economic terms: does the condition eliminate the value of the interest? For example, a condition cannot allow transfer to only one person, but could allow transfer to anyone but one person, or to a class of persons. Example: mining town, a SCotUS Justice Stevens case.

Alternatively, the court may recognise a new ground of public policy, but this has only happened once in 100 years – the discrimination addition in Re Canada Trust.

Courts are generally reluctant to invalidate a condition on public policy grounds because the CML right to free disposition of one’s property is viewed as fundamental (Clayton v Ramsden).

Shared Title

Joint Tenancy (Co-ownership with survivorship) (BC Law Institute)Treated in law like a unitary owner.Four requirements (the four unities) for it to arise: (if 1,2, or 3, absent, = tenancy in common) Unity of title: The interests of the co-owners must be created by the same act or instrument, such as a

transfer of land or a will. Unity of time: The interests of the co-owners must be created at the same time. Unity of interest: The interests of the co-owners must be of equal nature size (equal shares!), and

duration (all life estate, all fee simple, not a mix). Unity of possession (undivided): Each co-owner is entitled to possession of the whole of the land and

none is entitled to any part of it to the exclusion of the other co-owners.

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A characteristic of both joint tenants and tenants in common.Consequence: Joint-tenancy includes right to survivorship: On the death of a joint tenant, the interest of that joint

tenant comes to an end rather than belonging to his or her estate, and the surviving joint tenants simply continue in ownership of the entire property in the co-owned land.

therefore good for couples / married ppl Impossible to add or substitute any new joint owners to the initial arrangement of a joint tenancy! (due

to the four pillers) They cannot deal with their interests in the co-owned land in a manner inconsistent with the

concept of unitary ownership and still preserve the joint tenancy.Severance: Joint tenancy is “severed” (becomes tenancy in common) at CML in 3 ways: (1) mutual agreement of the joint tenants (may be inferred) (2) a (mutual) course of dealing that indicates the joint tenants are treating their respective interests

as if they were tenants in common. (3) act or transaction by one joint tenant w.r.t. that joint tenant’s individual interest; -- UNILATERAL

Any act that causes the 4 unities to no longer be met, for example, when one joint tenant transfers his/her interest to another (no longer unity of title), or one joint tenant mortgaging his/her interest (a 3rd party has acquired a right, no more unity of interest), or one when goes bankrupt, etc. Not a will though!!

Severance of one joint tenant’s interest does not affect the relationship among the remaining co-owners among themselves. A joint tenancy will persist among them. For example:

Additional ways of severance from legislation: Order for partition or sale (Partition of Property Act); Severance under part 5 of the Family Relations Act

Secret severance: Unnecessary to register a severing instrument for it to end joint tenancy. E.g. wife transfers interest in home (joint tenancy w/ husband) to daughter, never registers.

Severance effective. Daughter owns home in tenancy in common with husband. E.g. A&B cohabitate, A purchases home but registers it as joint tenancy for B’s security. B dies first. A

discovers B secretly severed so now A owns house w/ B’s children even though he paid for it all!

Tenancy in common (Co-ownership without survivorship) (BC Law Institute)Tenants in common hold separate titles to the whole. Consequence: No survivorship : Tenants in common can deal with their respective interests freely

without changing the nature of the co-ownership. They can dispose of their interests by will, for example, because their interests belong to their estates and pass to their personal representatives instead of to the remaining co-owners.

E.g. a common space in a condo is tenancy in common.

Report on Accounting??? Did Thomas take lecture notes??? No obligation of one tenant to another for expenses or benefits in absence of agreement except where

tenant agrees to act for others in collecting rent or if ouster of the other tenant Court can make adjustments based on investments/benefits in case of partition or sale

Remedies

Real Actions (Causes of action for real property)Think: a) possessory interest, b) cause of action, c) remedyEjectment = Titleholder’s action to acquire possession from another Who? Title holder only: “Writ of right” (Roscoe); “P recovers on the strength of his own title” (Roscoe).

When a prior possessor wants to kick out a more recent possessor, that’s ejectment, right? Remedy: ???

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Trespass (see Harrison v Carswell) = direct interference with one’s possession of land Who? Possessory Action (Roscoe) Against? Person interfering with one’s right to possession. Remedy? Damages (law); injunction (equity) ??? No damage necessary b/c inviolability of land. Nominal damages possible (Intel v Hamidi, USA).Nuisance = indirect interference with possession/enjoyment of land by adjacent landholder Who? Possessory Action (Roscoe) Against? An adjacent landholder. Remedy? Damages (law); injunction (equity)

Remedies: Personal Property (LRC BC) Detinue and trespass to chattels have mostly disappeared, it’s all about conversion now.Detinue = wrongful failure to return chattels to person entitled to possessionExample: You give me your horse, I refuse to return it. Who’s action? Person entitled to possession (possessor or title holder) The wrong? Interference with possession (not damage to the goods) Remedy? Order for return of goods, or damagesTrespass to chattels = wrongful damaging/interfering w/ enjoyment of property in another’s possession Example: I feed your horse poisoned oats, it gets sick for a few hours (not substantial) Who? (actual) possessor The wrong? Direct damage/interference w/ goods in another’s possession; must be harm (Intel)

Not met in Intel b/c there was no harm to computer system or Intel’s enjoyment of it. Not met in Popov b/c ball not damaged, H didn’t interfere w/ P’s enjoyment of ball; didn’t push

Remedy? Damages equalling the damage attributable to the interference (Intel).Conversion (trover) = substantially interfering with a person’s dominion over a (TANGIBLE ONLY at CML) good, where that person is entitled to possession. (met in Popov)Example: I feed your horse poisoned oats, it gets sick for a few months (= substantial) Who? Person entitled to possession (possessor or title holder) The wrong? Interference with a person’s dominion over the goods = substantial interference

Damage/harm is NOT Necessary! Damages equalling full value of goods at date of conversion (Intel).

ALSO CONSIDER INJUNCTION – EXMAPLE: INS !!!

Acquiring Property

Transfer: acquiring (real or personal) property from another personReal Property (Conveyancing) The transfer of any interest in real (contra personal) property must occur in writing, either by deed

(Conveyancing and Law of Property Act) or by will (ON’s Succession Law Reform Act) Wasn’t historically the case. Used to be a symbolic passing: “livery of seisin”

The transfer takes effect at the signing of the deed. (Conveyancing and Law of Property Act) Signing a deed is a unilateral act, unlike contracting.

When does the transfer of title take effect? Real property: signing of the deed (not K!)

Registration v Title System Registration system : Historically, validity of title established by “good root of title”, accounting for

transactions back to original grant by crown, or, more commonly, 60 years or the period of prescription according to the Statute of limitations.

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The registry, which in theory contained all deeds affecting land rights, made the title search easier, but mistakes did happen, and when they did, registration does not ‘cure’ a defective instrument, such as one in which the vendor didn’t have the legal title to sell

Torrens / Land Title System : To make the transfer of land easier, less expensive and more efficient, the certificate of title, once registered, is guaranteed by the government

indefeasibility of title under the Torrens system: with each registration the government effectively issues a new clean title which draws a curtain on all past dealings. An insurance fund covers owners wrongly ousted by a mistake. Exception for fraud.

Wait a second, does the torrens system prevent adverse possession from taking place? Elissa says yes. This seems weird though. How can it be!?

Personal Property Transfer by K takes effect at moment parties intend it to. By default, for ascertained and unmodified

goods, this means, at moment of contracting, regardless of payment and delivery arrangements. (ON’s Sale of Goods Act)

Acquiring personal property via possession (Finders & Abandoned/Res Nullius)

The notion of possession (personal property) Possession = certain control + intention“Posession is nine tenths of the law” (Lord Mansfield) “Certain” control: this depends on context / community standards. Why? Public policy. Possession

has serious legal consequences, so community needs to know what counts as possession. For a small physical object, complete control is necessary (Popov) In baseball, when catcher has complete control (Popov). In hunting, when animal is trapped or mortally wounded (Pierson v Post) For a sunken ship, a few buoys suffice (Tubtania)

Intention: objectively assessed, again for policy reasons. Possession of a container does not imply possession of its contents unless there is intention

to possess contents. Knowing what the contents are is unnecessary. (Keron v Cashman) Once possession is established, threshold for continuing intention is low (Moffat v Kazana)

Acquiring abandoned property or res nullius (property of no one) via possession When something is the property of no one, either because it is abandoned (Popov v H; Tubtania), or

because it has never been possessed (Pierson v P), it is acquired by the first person that possesses it.

Abandonment = ??? / Unintentional abandonment in class notes, the gas example. Context specific. MLB abandons balls hit into stands (Popov) Forgetting or loosing something ≠ abandoning it (Moffatt v Kazana). res nullius (property of no one) =

Finders: possessory title to non-abandoned property by finding it (or even by stealing it) CML Possessory Title: possession grants the possessor title good against everyone except the true owner (personal property) and a prior possessor.Finders (basic notion): “A finder acquires title good against the world, except those w/ a continuing antecedent claim” (Ziff; Armory v Delamire; Bird v Fort Frances; British Airways) Continuing antecedent claim might be the true owner or a prior possessor (including a prior finder)

that did not abandon, the chattel. (Ziff) If the chattel is found imbedded in the soil / attached to the building, the landowner has an

antecedent claim (British Airways); this likely reflects a view that the chattel is a fixture to the real property (Ziff).

If the chattel is not imbedded / attached, the title of a building’s occupier are better than those of a finder to those of the finder only if the occupier “manifested an intention to exercise

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control over the building and the things which may be upon it or in it” (British Airways), or if the finder is a trespasser, per below.

What would such an intention look like? BA employees periodically collecting lost objects; posting signs that BA claims lost objects (British Airways)

But it depends on the context. If you find $$$ on the floor during a tour a bank vault, signs on the wall are not necessary (British Airways)

The title of a wrongful – felonious and/or trespassing – finder is good against the world, excepting the true owner, a prior possessor, and the landholder upon whose land the finder trespassed (Bird v Fort Frances; could have been an issue in Armory v Delamire since the kid likely stole the ring; discussed in British Airways; Ziff)

Finders must make reasonable efforts to find the true owner (British Airways) Where an employee finds something, the employer gets it unless the finding is “wholly incidental or

collateral to his work.” (British Airways; Moffatt v Kazana)Limitation Periods for Personal Property DID I GET THIS RIGHT? s 15 of the old ON Limitations Act (and its equivalents in other provinces) only applies to real

property. Therefore, title to personal property is not extinguished after a certain period of time as is the case for real property.

However, there are limitation periods on actions in conversion. So, a certain length of time after conversion, prior possessors and/or the true owner can no longer bring an action in conversion. For all practical purposes, once this period of time expires, the finder becomes the “true owner”. His possession is unassailable.

One issue that arises in certain provinces, however, is whether the conversion period starts at the first conversion, or the most recent conversion. For example, imagine a ring is stolen in 2000, then sold in 2004. If the general limitation period on conversion is 5 years, clearly the true owner may bring an action in conversion through 2005, against either the thief or the purchaser, but can she bring an action in conversion in 2009, on the basis of the 2004 conversion? In BC, the answer is no, the clock starts ticking from the first conversion (BC Law Commission).

In other provinces, however, what matters is the last conversion. In these provinces, it is risky to buy personal property from a person who has not possessed it for at least as long as the limitation period on conversion, b/c a prior rightful owner could bring an action in conversion against you.

Rationale: why give finders, even wrongful ones, property rights? (Ziff) Brings found goods back into social use Facilitates return of lost objects to rightful owner, as finders assume a responsibility to take

reasonable steps to try to return the item [see British Airways]. Refusing property rights to finders would be problematic. Forcibly dispossessing a finder would not be

a civil or criminal wrong. Chain of title subsequent to finder would be precarious.

Acquiring Real Property via Possession (Adverse Possession) CML Possessory Title: possession grants the possessor title good against everyone except the

paper-title holder and a prior possessor. This possession doesn’t have to be adverse, correct?

Adverse Possession of a paper-title holder’s property by another eats away at paper title such that after a certain number of years, the paper-title is extinguished.

At CML, the period was longer, now the Limitations Act of various provinces set dif. periods.The Limitations Act, RSO 1990 (note, this is not the current version of the ON Limitations Act). I think that adverse possession doesn’t work any longer in provinces that have adopted the Torrens system, is that right? s 4: 10 years after a title holder is dispossessed, she can no longer sue

This says nothing about title. It just says the action is inadmissible. 2 15: 10 years after a title holder is dispossessed, she looses title.

Limitations Act is about extinguishment of rights, not the creation of rights (that’s possession), don’t think of title transferring at 10 yrs., think of it as dissolving.

Requirements for adverse possession:(1) Actual possession, of the appropriate quality (can also frame appropriate quality as sep. requirement)

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Open and notorious: AP must be discoverable (Lundrigans v Prosper), a fairness issue. Peaceful: no violence/fraud to obtain possession (Ziff) Adverse: w/o permission (Ziff) Continuous: No interruptions, except those inherent in use of prop. (e.g. seasonal) (Ziff)

(2) Intention to dispossess true owner Intention is evaluated objectively (Beaudoin v Aubin, contra SCBE v McDonald)

Where actual possession w/ intention to hold for one’s benefit, intention to disposes is presumed. Thus, mutual error does not bar application of AP. (Beaudoin v Aubin)

Purchase attempts should not defeat intention (contra SCBE v McDonald; Gorman). Allowing occasional public use doesn’t undermine AP (Teis)

SoP for intent to dispossess is high where the APer has actual or constructive knowledge of the owner’s desire to retain a property interest. (Gorman)

(3) Effective dispossession of the true owner throughout the statutory period. Dispossession is evaluated obj., given the nature of the land (not met: SCBE v McDonald) Inconsistent use test (maybe under #2; unclear): AP does not occur unless claimant’s use of land

is inconsistent with the owner’s intended use. (Madison v Ham) Does not apply in cases of mutual mistake (Teis) Policy reason behind test: don’t reward intentional squatters (Madison v Ham; Teis)

Indicators, Examples Plaintiff bears BoP (Lundrigans v Prosper) Enclosure is the best possible evidence of AP (Beaudoin v Aubin) Long list of examples in Mendes Da Costa.Rationale for AP Simple expression of statute of limitation principles. Unfair to sue when events were 20 years ago.

Witnesses dead, etc. (Ziff) Certainty; Reliance of third parties (Ziff)

But in the age of computers, there is not much uncertainty… (Gold) Encourages productive use (Ziff) To keep the peace, prevent messy disputes.

Acquiring Property Rights Through Labour

Easements (similar to CVL servitudes)

EVERY easement must pass the Re Ellenborough Park Test: (necessary, not sufficient conditions)(1) A dominant and servient tenement , generally, must be contiguous, though exception may be made if

de minimus (as was the case for a couple of the houses in Ellenborough) (2) the easement must “accommodate” the dominant tenement by having a “sufficient nexus” between enjoyment of the right and use of the tenement; it must be “connected to the normal use of the property”

Gold: doesn’t mean that every owner would want the right. E.g. some owners don’t golf. Others are in a coma and can’t walk around the perimeter of a park. Need to differentiate office of holder from identity of holder at any one time. Given the expected usage, etc.

(3) the dominant and servient owners cannot be the same person, Applies at time of creation. If same person acquires both tenements, easement is suspended,

not dissolved; then revived when one of the tenements is conveyed to another. OK: Mr. & Mrs. X as joint tenants on one tenement; Mr. X on the other (Lonegren)

(4) rights conferred by easements must be rights that can otherwise be given in a property grant. Gold: can’t give such an extensive right that it essentially ousts the property owner (cannot

interfere w/ their possessory rights). Can’t be just “mere recreational use” = related to illicit activity.

Types of easements

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Positive easements give the title holder of the dominant land a right to do something on neighbour’s (servient) land.

e.g., right to tunnel under land, to maintain power lines/towers, to discharge water, to have pipes underground, to string a clothes line, to use a washroom. List not closed (Ellenborugh)

Negative easements give the title holder of dominant land a right to stop neighbour from doing something on the neighbour’s (servient) land.

Four have been recognized: the right to light the right to air by a defined channel the right to lateral support for buildings (not a natural right) the right to continue to receive the flow of water from an artificial stream

There is no “easement of protection” from the weather (Phipps v Pears)

How to Create an easement (don’t forget Ellenborough Park test first!) Legal fiction: All easements “lie in grant (transaction)”

This is super confusing, because easements can be granted or reserved; in both cases, they “lie in grant”. The problem is that grant is being used as both a noun and a verb. It helps to replace “grant” where it is used as a noun with “transaction”:

All easements lie in some transaction of an interest in real property. The transaction may grant the easement, or it may grant some other interest in real property (e.g. fee simple). And reserve the easement from the grant.

“All easements lie in grant” is a creative legal fiction b/c while all easements “lie in grant (transaction)”, the grant (transaction) may be presumed (prescriptive easements) or implied (implied easements).

First way to create an easement: express grant or reservation Express grant: The creation of an easement occurs by an express grant where the owner of the dominant land grants the easement in favour of the servient land. Ambiguous express grants are interpreted in favour of the servient land. (Recall, ambiguity in a deed

is construed in favour of the grantee.)Express reservations: The creation of an easement occurs by an express reservation where the owner of the servient land owner grants (conveys) the dominant property to another, but reserves an easement in this grant. Ambiguous express reservations are interpreted in favour of the dominant land, because ambiguity in

a deed must be construed in favour of the grantee.

Second way to create an Easement: Implied grant or reservation Implied grant: Where a possessor severs his/her interest in land and grants possessory interest to a portion of the land to another, the grantee also receives those easements which are necessary to the reasonable enjoyment of the property granted (Wheeldon v Burrows; Wong) Again, an application of rule that ambiguity in deed must be construed in favour of grantee Note, the four types of implied reservations that are allowed, below, also apply to implied grants.

Wong: implied grant of easement required to give effect to intention of the parties with reference to the purpose for which the land was granted.

Implied reservations, as a rule, do not exist (but they do exist, see below). Where a possessor severs his/her interest in land and grants possessory interest to a portion of the land to another, if the grantor intends to reserve any right over the property granted, he must reserve that right expressly in the grant (Wheeldon v Burrows) “The grantor shall not derogate from his grant,” thus reservations cannot be implied (Wheeldon v

Burrows). Again, an application of rule that ambiguity in deed must be construed in favour of granteeBut actually, implied reservations do exist under certain circumstancesNote, AB treats these more strictly (Nelson v Stelter)

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(1) Ways of necessity: rights of way to land that would otherwise be landlocked. (Wheeldon v Burrows)

The implication can be defeated by express language to the contrary (Nickerson v Barralough, UK, 1981)

ON Road Access Act effectively provides a statutory easement of necessity. (2) mutual easements

Where a pipe moves runoff from A’s property to a drain on B’s property that in turn passes through A’s property on its way to a common sewer.

Or where each of two buildings relies on the other for structural support (3) Implied easements necessary to fulfill obligations resulting from simultaneous sale of land to two

or more grantees ???

(4) Implied easements required to give effect to the intention of the parties, with reference to the purpose for which the land was granted (Wong, though this was implied grant) (failed in Sandom v Webb, which suggested implied easements by reservation should be interpreted narrowly) (succeeded in Barton v Raine for implied reservation)

This exception to the “reservations may not be implied” rule should be interpreted generously (Barton v Raine, ONCA, 1980; contra Sandom v Webb)

Third way to create an Easement: presumed grant (aka prescription) A court will recognise a easement arising by presumed grant where the servient tenement holder and his predecessors exercised the rights at issue (“as of right” – see below) without interruption for a period of 20 or 40 years immediately preceding the action demanding recognition of the easement (Limitations Act s 31 – 32).

In this case, we don’t actually have to find the transaction. We imagine it was there, but have to point to it for implied, don’t have to for presumed.

CML protects the legal fiction that all easements lie in grant via the notion that the grant preceded "legal memory" (pre-1189, so N/A in Canada) or was a “lost modern grant,” made in modern times (post-1189), but lost. Today, legislation governs almost all easements by presumed grant.

Note, prescription is distinct from adverse possession, though both relate to the Limitations Act and the notion of long use.

Prescription applies only to non-posessory rights, requires lessor acts Adverse possession applies to possessory rights, requires greater acts.

Requirements for presumed grantTime: 20 years (oral permission defense succeeds) or 40 years (oral permission defense fails – “absolute and indefeasible”) “without interruption” (s 31) looks back from the moment the action is brought – and an action must be brought. (this was decisive

in Storm, 40 year period could have been met, but the action was not brought until later, and a permission letter was given in the meantime)

However, non-statutory “Lost Modern Grant Theory” suggests that a 20-year period suffices even if it is not the last 20 years. The status of this is unclear, Justice Cory revived it in Henderson v Volk, but Storm put it in doubt.

“Without interruption” (s 31) means without interruption (being prevented from enjoying the use) lasting longer than one year (s 32);

CML rules as to the nature and quality of use: (analogous to quality of possession in adverse possession) Continuity: Interruptions are judged according to the nature of the right being claimed. Prescription

transfers between landholders. In Axler, it was ok that the dock was stored only during the winter. Summer interruptions were

not a problem.User as of right [did you it as if you had the right to use it?]: Relates to the acquiescence of the owner. without violence (nec vi): difficult, b/c depending on the context, the same act may be seen either as

the exercise of use “as of right” or as use asserted by violence (e.g., removing a barrier placed by the landowner. Likely depends on how many times you do it)

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without secrecy (nec clam): “knowledge, actual or constructive” The secrecy defense will fail if a reasonable owner should have known, even if the actual

property owner did not know. (defense failed in Garfinkle v Kleinberg, ONCA, 1955 – common fireplace example)

For a key two year period, not w/o secrecy b/c dock was only stored on allegedly servient land during winter, and snowbird owners of servient land only visited during summer (defense Succeeded in Axler, ON, 1977)

without permission (nec precario). Oral permission defeats a claim until 40 years. Written permission defeats a claim forever. (succeeded in Storm)

Defences: Oral permission (until 40 years), Written permission (forever) (succeeded in Storm) not “user as of right” (forever), (Succeeded in Garfinkle, failed in Axler) interruption for more than one year (failed in Axler) no prescription for cables or wires (s 32), no air or light easements (s 32)

Scope of easement: Flexible, to a degree, if for the same purpose (e.g. Wong, which allowed expansion of the ventilation system) Malden Farms ltd v Nicholson (1956) ONCA [386]: Right of access granted to a farmer for animals,

vehicles and himself cannot be used by property developer who buys the farm in order to start a beach resort.

Re Gordon et al and Regan et al (1985) Ont HC [386]: Owner of dominant tenement divided his land in two; right of way easement held to apply to both sections of dominant land as long as this did not increase the burden on the servient land.

Ways of ending an easement if the purpose of easement no longer exists; if the easement is abused (Malden Farms); if the same person holds both dominant and servient land under the same estate (if the estates differ,

the easement is merely suspended); by release. Release may be express or implied. The burden of proof is very high if the owner of the

servient tenement is the one arguing for implicit release. Mere non-use does not constitute release. Intention to abandon the right must be shown as well.

Takings

Takings The Expropriation Act governs explicit expropriation: taking land to build a highway, for example. That

is not what we are concerned with here. Rather, we are interested in de facto expropriation: situations in which government regulation, while formally leaving title with the landowner, effectively expropriates property – “tantamount to expropriation” in the words of NAFTA.

In Canada, there is a CML principle (a constitutional convention) that where there is expropriation, there will be compensation. Statutes may supersede this: if the statute says “no compensation” then there will be no compensation.

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Takings Cases in the USAThe test in CanadaFor a de facto taking requiring compensation at common law, two requirements must be met: (1) an acquisition of a beneficial interest in the property or flowing from it, and To satisfy this branch of the test, it is not necessary to establish a forced transfer of property.

Acquisition of beneficial interest related to the property suffices (see MB Fisheries; Tener)(2) removal of all reasonable uses of the property (citing Mariner) This requirement must be assessed “not only in relation to the land’s potential highest and best use,

but having regard to the nature of the land and the range of reasonable uses to which it has actually been put” (citing Mariner)

Legislative Basis The Expropriation Act governs explicit expropriation: taking land to build a highway, for example. That

is not what we are concerned with here. Rather, we are interested in de facto expropriation: situations in which government regulation, while formally leaving title with the landowner, effectively expropriates property – “tantamount to expropriation” in the words of NAFTA.

In the United States, the basis for de facto expropriation cases is constitutional: United States Constitution, 5th Amendment: "...nor shall any person ... be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation"

In Canada, the basis for de facto expropriation cases is different. Canada’s constitution does not include a right to not be deprived of property. There is, however, a CML principle that where there is expropriation, there will be compensation. Statutes may supersede this: if the statute says “no compensation” then there will be no compensation. However, in the absence of statutory provisions otherwise, if the court finds there was expropriation, there will be compensation.

Thus, while expropriation cases in the United States generally put the constitutional validity of the allegedly expropriating legislation at issue, in Canada the issue is simply whether the landowner is entitled to compensation.

Must there be a transfer for de facto expropriation to be recognised? The American jurisprudence is not overly concerned with whether the expropriation involves the

transfer of something, the same thing, from the title holder to the government. In large part, this is because in the USA the right not to be deprived of property arises in the 5th amendment to the American Constitution, which as a constitutional provision, must be interpreted liberally.

For example, in PCC v Mahon, P lost expected profits and M gained mitigation of risk. Nevertheless, though what the title holder lost and the government gained were not equivalent, Holmes, for the majority, found a de facto expropriation.

CML Property in Canada requires that for a regulatory act to be recognised as de facto expropriation, there must be “the acquisition of a beneficial interest in the property or flowing from it” (CPR v Vancouver). That is, a transfer is necessary. However, in practice, this requirement is not always applied restrictively. The court may view something as an expropriation even if what the government gains and what the title holder looses is not precisely the same thing.

For example, in Manitoba Fisheries, the government deprived MF of its customers and, by leaving them without alternative providers, took those customers for itself. The court called this expropriation, because it involved transferring MF’s goodwill, its customer relationships. In fact, however, there was no transfer b/t MF and the government. The government did not receive MF’s goodwill. Yes, it acquired MF’s customers, but not b/c of MF’s relationships. Rather, it acquired them because it had created a monopoly.

Are we talking about value or rights? The American jurisprudence (PCC v Mahon, 1922; Keystone v DeBenedictis, 1987; Lucas)

established a “diminishment v value” test: Determining whether a regulation constitutes a de facto expropriation involves weighing the degree to which the regulation diminishes the value of the land against the degree to which the regulation is intended to benefit the public (many people) interest.

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Where the degree of diminishment is high and the intended benefit accrues to only a few people, there is a de facto expropriation. Where the degree of diminishment is low and the intended benefit accrues to the public at large, there is no de facto expropriation.

The difficulty lies in determining cases in the gray zone: ones where the public benefit is great (or moderate) but the degree of diminishment is also high (or moderate).

Canadian jurisprudence initially followed this approach to a degree, at lease insofar as the focus was on value.

For example, in Tener, the court found that the government’s effective total prohibition on mining in a national park even though a company held mining rights within that park constituted expropriation b/c there was a transfer in value from Tener (the diminishment in value of it’s mineral rights) to the government (the increase in value to it’s national park).

More recently, CML property in Canada focuses on rights rather than value associated with rights. That is, for a regulatory or legislative act to be recognised as expropriation, there must be a “removal of all reasonable uses of the property” (Mariner; CPR v Vancouver).

This requirement came a few years after the American case Lucas, in which Scalia, writing for the majority, indicated there was a taking if the regulation, even one with a broad public purpose, denies all economically beneficial or productive uses of the property.

Justice Cromwell, then at the court of appeal in Mariner, was likely concerned that this test went too far, and was not appropriate in the Canadian context, where property rights are subject to the government’s authority to regulate.

Taking of Property Parliament and Legislatures may take property without compensation Common law presumption that Parliament/Legislature intends to compensate unless clearly states otherwise: Manitoba Fisheries Ltd. v. Canada When has Property Been Taken?

Easy where all rights removed (Mariner; CPR v. Vancouver) Where only some rights removed or postponed, more difficult to tell Public policy helps resolve this difficulty Look at purpose of statute If promotes true public good, then more likely NOT a taking

This is explicit in US but only implicit in Canada If transfers economic value between private individuals, then more likely to be seen as a taking

But transfer of economic value without some transfer of property right may not amount to taking (Mariner; CPR v. Vancouver)

But even if only enhances value to State, may be sufficient: The Queen in Right of BC v. Tener Look at how much legal rights curtailed The more rights removed, the more likely is a taking

In US, taking is any regulation that goes beyond nuisance: Lucas v. South Carolina Coastal Council Court decision may amount to taking: Stop the Beach Renourishment

Under NAFTA, c. 11, any interference with the use of property which has the effect of depriving the owner, in whole or in significant part, of the use or reasonably-to-be-expected economic benefit of property is a taking: United Mexican States v. Metalclad Corp

Leases/Licenses

This section describes leases at CML. Commercial leases only, b/c residential superseded by leg.

Nature of the lease: The CML conceives of a lease as an estate in land. Like sale, lease is a relationship created by contract, but is not contractual. Once the tenant has the

lease, he/she has an estate (an interest) in the land and can exclude the world including the landlord, for the term of a lease. All the landlord has is the reversion, the right to retake possession and full rights when the tenant's estate is at an end.

Requirements for a lease Grant of exclusive possession (an estate) in real property

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otherwise a license, a revocable permission to use land for some purpose; a privilege to do what is otherwise prohibited (case??)

The length of the grant must be certain and finite, If infinite, it's fee simple. Also no life lease, that's a life estate. If uncertain, likely a license, though certainty is insufficient condition for lease.

Payment of rent in $$ or another form. What if not?

Distinguishing license from lease: two approaches in the case law:>>> License: a privilege to do what is otherwise prohibited. British American Oil (purposive) approach: if the agreement grants exclusive possession for a fixed

time it is a lease, regardless of the terminology used. In British American Oil, the key question was whether objectively, the terms of the lease

transferred exclusive possession – that is, an estate – to the tenant. Here, they did. This was a gas station that the tenant operated, kept all of the profits from, managed, etc. Yes, the landlord had the right to change the advertisement, no big deal.

What was going on in this case re: remedy? Metro Magic (intention) approach: If the terms an agreement and the agreement as a whole show the

intent of the parties was to create a lease, then the court will treat the arrangement as a lease. In Metro Magic, the terms “demise” and “lease” were key. The BA approach might have led to

characterisation as a license, given the very restrictive use (laundry only) allowed, but the intention of the parties prevailed. It was a difficult call, however, as certain clauses were not necessary …

Ancillary terms complicate matters, but tend not to be decisive as they can be viewed either as an imposition by the landlord (implying ≠ exclusive possession, so license) or a concession by the tenant (does not negate exclusive possession, so maybe lease). (seen in both Metro Magic and BAO)

Tenant’s Obligations Pay rent . At CML, rent is due at end of period. Do not damage beyond reasonable wear and tear. Failure to fulfil these obligations undermines title – becomes abandonment (North Bay TV) Independence of Covenants : other failures, for example failure to abide by some ancillary term, does

not undermine title, unless there is a stipulation to the contrary.

Landlord’s Obligations Quiet Enjoyment

Initially: an obligation not to interfere with the tenant’s legal right to use the premises After Owen v Gadd (landlord erected scaffolding outside shop window immediately after

leasing it), obligation not to directly interfere w/ tenant’s use of the premises. After Kenny v. Preen (landlord “tried, by a series of threatening communications, to drive [the

tenant] out of her possession of the premises): obligation not to interfere, directly with the tenants use of the premises, or interfere indirectly in a manner that goes to the title.

Non-derogation from grant Prevents a landlord from interfering with the tenant’s legal right to the premises. But instead

of covering only direct actions by or on behalf of the landlord, it relates to the use the landlord makes, directly or indirectly, of land that is both owned by the landlord and adjacent to the demised premises. Ziff: explosives analogy, pawnshop analogy.

Fitness for Use At CML, there is no general, implied warranty that rented commercial premises are fit for any

particular use (Sutton v Temple – paint, cows, etc.; Hart v Windsor) Except in the case of furnished premises (Smith v Marrable; Hart v Windsor) Also, now, residential premises under statute, but at CML, this is not the case (Hart v

Windsor)

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Ending a Lease: Assignment; Abandonment v Surrender Assignment/sublease : allowed at CML, but terms often require consent or forbid it altogether. Surrender occurs where the tenant cedes her estate back to the landlord and the landlord accepts.

Acceptance may occur implicitly, e.g. changing the locks after abandonment. (North Bay TV) Any action showing the landlord has taken back the right to exclusive possession.

Abandonment occurs where the tenant relinquishes possession of the land, but the landlord does not accept surrender. Abandonment does not end the leasehold estate. The abandoning tenant remains liable for rent until the end of the term.

Not paying rent for several months may be treated as abandonment (North Bay TV)Landlord’s 4 possible reactions to tenant’s abandonment:1) Do nothing, then hold the abandoning tenant liable to fulfil his obligations: (mentioned, Goldhar)

Landlord must be careful not to do anything that would amount to acceptance of surrender (e.g. changing locks (North Bay TV), subletting w/o notice to tenant (Goldhar), etc.). No notice necessary.

Tenant only becomes liable for rent as payments come due. Landlord cannot sue for all rent at moment of abandonment, must wait until payments come due.

2) Treat abandonment as surrender and accept it. (happened, Goldhar, b/c no notice) Tenant only liable for rent due at time of surrender. Landlord can find new tenants, but if she has to reduce rent, the dif. is her problem.

3) Notify the tenant of intention to sublease on tenant’s behalf (to avoid implicit acceptance of surrender), then do so. (mentioned, Goldhar, but no notice)

Sub-tenant’s payment offset tenant’s liability. The landlord may sue the tenant, as the tenant’s obligations come due, for whatever portion of the tenant’s obligations the sub-tenant’s payment’s do not cover. If the sub-tenant pays higher rent than the tenant, the difference offsets the obligations of the tenant. (Postal Promotions)

Odd-legal fiction… self-appointing as agent. We allow due to sympathy for landlord.4) Notify the tenant that he will he/she considered in anticipatory breach. (Highway Properties)

Notification required, though statement of claim may suffice. It did in North Bay TV All rent payments come due and landlord may re-rent. Payments received from new-tenant

during initial tenant’s term are deducted from initial tenant’s liability. Highway properties allowed this where there was an explicit “acceleration of rent” clause,

however, courts have come to allow it even where such a clause is absent. (Highway Properties). This is another odd legal fiction. No basis in the estate system. Just convenient.

Duty to Mitigate There is no strict duty do mitigate. Option #1 remains open. The landlord may do nothing and hold the

tenant liable (Postal Promotions). Once, however the landlord takes any action at all (2, 3, or 4), a duty to mitigate kicks in (Postal

Promotions ONHC, albeit unclear at the ONCA). Especially applicable in #4: the landlord must look for a new tenant. Also applicable, in #3. After notice, must be good faith efforts to find a sub-lessor.

Once mitigation occurs, it reduces accumulated or accumulating liability of the tenant. If new rent is higher, this may result in the elimination of the prior tenant’s liability. The prior tenant, however, will never receive a surplus (cannot benefit from own wrong) (Postal Promotions)

Bailment

Bailment arises whenever the person entitled to possession of a chattel parts with it on a temporary basis for a specified purpose

“The bailment consists of the delivery of something of a personal nature by one party to another, to be held according to the purpose or object of the delivery, and to be returned or delivered over when that purpose is accomplished.” Street’s Foundations of Legal Liability (1906) [quoted in Martin]:

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Elements of Bailment: (1) Dispossession of chattel by owner; (2) Possession of chattel by bailee: (failed in Martin per majority) (met in Heffron)

Indicia of bailment include, in parking lot examples, handing over of keys, issuance of ticket, hours of operation, presence of attendant, etc.

(3) Mutual intention that the chattel will be redelivered to the owner by the bailee after a period of time (possibility that repairs/improvements will be done to the chattel in the meantime, but that’s separate from the core of the bailment relation).

Obligations of the bailee: The bailee must exercise the caution of a reasonable and prudent owner. If he fails to do so, and the

result is damage to the chattel, the bailee is liable in negligence. The standard of care is lower (gross negligence?) where the bailment is gratuitous rather

than contractual (Martin per trial judge) Once loss or damage is proven while the chattel is in the bailee’s custody, this creates a

presumption of negligence, which the bailee must disprove. (Martin; heffron) A duty to fix/change/repair the chattel is created by contract, and is not inherent in the bailment itself,

which just requires upkeep of the chattel.

Other Bailments are typically consensual, sometimes not (arguably: finders, possessing someone else’s

goods believing they are one’s own)

Bailment or license (simple privilege to do what is otherwise prohibited)? In order to determine if what has occurred is a bailment courts will examine first and foremost the

substance of the transaction to see if the elements of the bailment are met (Martin; similar to the lease v license approach employed by the court in BA Oil). In gray areas, however, they may also look to the intent of the parties (similar to the lease v license approach applied by the court in Metro-Magic)

Sub-bailment Sub-bailees owe duties to the owner. (Punch v Savoy)

What is Property?

Labour Theory of Property ( John Locke ): A thing in the state of nature becomes the property of an individual when the individual or his agent

works on it, infusing the thing with his labour. Locke’s reasoning in Second Treatise on Government:

Premise: God put humanity on earth to dominate it and reap its benefits. Property is effectively a reward for fulfilling one’s God-given purpose (reward version).

Question: how can there be private property when God gave the world to all of humanity in common?

Answer: A person owns himself, and his own labour. Working on a thing infuses that thing with one’s labour, and therefore makes it one’s own (transformation/mixing version).

Robert Nozick’s more modern (secular) version: One acquires property by infusing it with one’s labour, when another interferes with such property, this constitutes interference with the owner’s natural right to liberty

Extends to one’s agents because their labour is actually the principal’s; it is a product of the principal’s will and payment.

Implication: all land should revert to Aboriginal peoples, as they first exerted their labour upon it.

ILLUSTRATIONS: Labour theory of property

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INS v AP: The labour theory of property is visible, for example, in Pitney’s majority ruling in INS v AP, which recognised a “quasi-property” right in the substance of the news enforceable by one news agency that collected it against others who had not. Two instances of this argument are visible, for example, in Pitney’s decision in INS. First, Pitney

argued that AP’s expenditures of labour and money to collect the content of the news must give it some right to the news. Second, with his “reaping and sowing” metaphor, Pitney implied that the INS did not have any right to the news because it had not expended the labour that generated it.

Both of these arguments have difficulties. In particular, when it comes to intangible things, it is often the case that the application of

labour does not result in the creation of a property right. Consider the thought and effort that goes into the creation of a restaurant idea: someone else can open the same restaurant just down the street.

The reaping and sowing argument, meanwhile, is a false analogy. News, unlike grain, is non-rivalrous and non-excludable. Moreover, in the case of grain, there is title to the underlying real property.

Pierson v Post: The labour theory is also visible in Livingston’s dissenting ruling in Pierson v Post. Livingston sought to alter the historical CML rule that mere pursuit is insufficient to establish possession. In doing so, he relied on two justifications. First, he noted the public importance of killing foxes, “wild and noxious beasts”. This, of course is a utilitarian argument. Second, he noted that no one would bother to kill foxes if a “saucy intruder” can waltz in and take the prize after an arduous hunt. This is a labour argument. It suggests that by virtue of his labour, the hunter earns a right to the fox.

The concept of possession also reflects the labour theory of property. Acts of labour establish the certain control that possession requires. For example, in Tubtania, the setting of bouys and efforts of divers helped establish certain control; In Parker v BA, the finder’s picking up of the bracelet established his certain control. Popov v Hayashi, provides a particularly illuminating example, because Popov’s labour of almost catching the ball, even while it did not result in full physical control, nevertheless granted him a “pre-possessory right”. Hayashi’s labour of picking the ball up off the grant, meanwhile, did establish certain control and granted him a possessory right. Indeed, the labour theory even explains the concept of CML possessory title and adverse possession.

Possessors acquire a limited property right to the object of their possession by virtue of the labour of possession. After a certain point in time, the weight of the possessor’s labour trumps the rights of the paper title holder, who has not exercised his or her right of possession – has not laboured – for the prescribed period. On the other hand, prior possessors rights trump those of latter possessors (subject to the time limits in the Limitations Act) because their labour gave them a prior and therefore stronger claim to the property.

Occupancy or Possession (primarily a variant on the Labour Theory) One acquires property (land or chattel) by being the first person to occupy/control it. If one considers occupation/possession to be a form of labour, equivalent to the labour theory. This justifies the distribution of property rather than the concept of property itself.

Includes a practical component, allocating property to anyone other than the person who occupies/controls it requires intervention of the state, and, historically, state power is scarce.

See Aboriginal title, adverse possession.

Utility ( Bentham ; Mill ) All forms of law, government, and social organization should seek to maximize utility, that is, they

should maximize happiness and minimize suffering, as experienced in aggregate across all members of society.

Happiness consists of, in order of priority: security, subsistence, abundance, and equality. Property is a form of security. It allows a cultivator to retain the fruits of his labour, enabling

him to achieve subsistence and abundance.

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A degree of inequality is an inevitable corollary of property, but this is a necessary sacrifice. Without the security that property guarantees, subsistence and abundance are unattainable as there is no incentive for industriousness.

On the other hand, utilitarianism does permit a degree of expropriation. That is, the state may limit property rights in order to advance the cause of equality or subsistence, but it must weigh the benefit of doing so against the cost in security, and therefore abundance.

Ultimately, utilitarianism provides a set of values and analytical approach that should be applied to any proposed change in a property regime, rather than a clear recommendation for what type of regime is best in every circumstance.

That is, utilitarianism urges the policy maker to ask, “once I take into account both the harms and the benefits of X,” will X make society better off, overall?

ILLUSTRATIONS for utility theory of property

Utilitarian arguments are visible, for example, in the law concerning finders of personal property. To begin, awarding finders property rights brings lost goods back into productive use. Additionally, it may facilitate the return of lost objects to their rightful owners, as finders assume a responsibility to take reasonable steps to try and return a found item. Finally, awarding property rights even to felonious or trespassing finders is socially beneficial because the alternative would create chaos. If a wrongful finder had no property rights, it would not be wrong for any 3rd person to take from the finder what the finder had found. Additionally, the entire chain of title subsequent to the wrongful finder would be precarious (drawing on Ziff in this paragraph).

INS v AP: Utilitarian justifications for property are also visible in INS v AP. Indeed, they lie at the core of Pitney’s decision to recognise a “quasi-property” right in the substance of the news enforceable by one news agency that collected it against others who had not. Pitney observed that news agency’s collecting of the news serves a vital social function: it allows the citizenry to be informed about current events – in that case, current events concerning WWI. If one news agencies could simply copy the content of the news another had collected, the latter agency would have a much smaller incentive to collect the news in the first place, and news could become less widely available, harming society. Ironically, utilitarian arguments were equally visible in Brandeis’ dissent. A key reason he refused to recognise the “quasi-property” right that Piteny advocated was the possibility that courts mucking around in new property rights could well unintentionally harm the public interest.

Pierson v Post: The labour theory is also visible in Livingston’s dissenting ruling in Pierson v Post. Livingston sought to alter the historical CML rule that mere pursuit is insufficient to establish possession. In doing so, he relied on two justifications. First, he noted the public importance of killing foxes, “wild and noxious beasts”. This, of course is a utilitarian argument. Second, he noted that no one would bother to kill foxes if a “saucy intruder” can waltz in and take the prize after an arduous hunt. This is a labour argument. It suggests that by virtue of his labour, the hunter earns a right to the fox.

Freedom and Personality ( Hagel ) Private property enhances human freedom and moral development. First version: private property advances individual autonomy by affording the citizen freedom from

state intervention. Two problems: Freedom for the few – the propertied. In fact, state intervention is necessary to protect private property. The state thus is not

constrained by private property, but uses it as a mechanism to delegate its power. Second version (Hagel): To be human is to dominate things. Property therefore allows humans to

demonstrate their individuality and self-actualization. Radin observed that property rights are linked to the personal and emotional attachments that

persons have with things. In certain areas of the law, the law indeed calibrates the degree of protection granted to the subjective importance of the thing in question.

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For example, in the field residential leasehold estates, legislation has made it more difficult to evict tenants. The justification that appears to lie beneath this policy is that to a tenant, the tenement is a home while to the landlord, it is merely a revenue generating asset.

This approach might have led to a different result in Moore. The patient had an emotional attachment to his body parts and felt violated when they were used by another for commercial gain. On the other hand, we have to question if this was truly the motivation that lay behind Moore’s suit. It seems just as likely that he had felt no particular attachment to his disembodied organ, but rather sought to establish property rights in it in order to attain a portion of the revenue stream that had resulted from it.

Radical Theories Property is power: it affords those holding it a mechanism to control, in some measure, the lives of

others. More specifically, it generally affords racial, gender, social, etc. elites the power to perpetuate

their privilege. Radical analyses tend to justify limiting and reforming property rights in order to address

social injustice and inequality: rent controls, security of tenure, estates and inheritance reform, anti-discrimination in tenant selection, etc.

4. Law and Economics Private property is necessary because in enables the market-based system, which is the most

efficient mechanism available for the production and allocation of resources, and therefore the maximization of wealth.

Very similar to utilitarianism, but utility is defined as wealth, which is more readily quantifiable. Requires a variety of assumptions: perfect information, all people are rational wealth

maximizers, anything unquantifiable in terms of wealth is unimportant, etc. Property regimes should be crafted to maximize market efficiency. In particular, property regimes

should: Maximise exclusivity, making all things capable of private ownership, so that they can be

allocated via the market to those best equipped to employ them efficiently Maximize the uses of property, so that all things can be employed for their most efficient

uses. Maximum transferability, to ensure that all things actually are allocated to their most efficient

uses. A second, “descriptive,” version of law & economics is less concerned with law reform and more

concerned with describing the consequences of various legal regimes.

Tragedy of the Commons In the absence of individual property rights, rivalrous but regenerative resources in high demand tend

to become depleted because the benefits associated with an individual’s decision to restrain his or her consumption of the resource are spread across the community of users while the costs of such a decision are borne entirely by the individual (Demsetz, Hardin).

E.g. INS v AP – avoid free-riding. But avoid anti-commons, don’t stifle innovation (Moore v Regents)

Internalizing Externalities Demsetz observed that while property rights allow for the internalization of positive and negative

externalities, they also involve costs associated with the creation and enforcement of a property rights system. He argued that property rights therefore emerge when some external shock (an increase in population, a change in technology, the opening of a new market, etc.) increases the social costs of externalities such that they exceed the costs associated with the maintenance of a property system.

Demsetz’s example was that of the fur trade among the Montagnes. Before colonisation, beaver hunting grounds were communal. Each time a hunter successfully killed a beaver, he

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imposed a negative externality on all hunters, that of decreased beaver availability. The cost of this externality on society, however, was initially low, because were plenty of beavers for everyone. There was no incentive to over hunt because a family could only eat so much beaver. With the beginning of the fur trade, beavers suddenly became much more valuable – they were good not only for food, but also to trade with the Europeans in exchange for commercial goods. Suddenly, there was an incentive to overhunt. Individual hunters had no incentive to stop hunting because the hunter obtained the full benefit of a successful hunt and only bore a tiny fraction of the increased hunting difficulty caused by a successful hunt. The cost of the externality was now high – it was causing beaver populations to dwindle! The solution was to give each family a personal hunting ground (a property right). Now, each time a hunter killed a beaver on his own land, the individual hunter bore the cost decreased beaver availability on his land, so he had an incentive not to overhunt. The creation of private property thus eliminated the scourge of overhunting and benefited Montagnes society.

Barry Field refined Demsetz analysis by observing that when property rights do emerge due to the importance of internalizing externalities, the result will not always be a system of individual property rights. There is a spectrum between no property rights (fully communal holdings), and individual property rights. For each asset, societies will naturally choose a the place along this spectrum that is most efficient. Barry fold arrived at this conclusion by giving additional content to Demsetz’s notion of costs associated with a property rights regime. He noted that these costs include both exclusion costs, costs associated with forbidding outsiders from utilizing an asset, and transaction costs, costs associated with the management of an asset by members of an ownership group. These two factors effect the appropriate place along the spectrum. First, the size of the owner group will vary directly with the cost of excluding outsiders from the asset. Second, the size of the owner group will vary inversely with the cost of transaction costs.

Factors affecting costs: Cooperation costs: common goals, common culture, unwritten norms within the group. These costs can shift in either direction over time. Social developments can make cooperation costs increase or decrease. (Ostrom)

Think about the open-source movement. There had been a trend towards exclusivity in software. Then tech. developments dramatically decreased the cost of cooperation and governance, to open-source movements emerged.

Comminality of belief, etc. all keep governance costs low. Exclusion costs, meanwhile, are very high.

Property as a bundle of rights A central property right is the right to exclude others from use: Merrell May be attenuated where the subject-matter of the property right is a public good:

Brandeis in INS; Hamidi

What is Property? a relationship between individuals in a society with respect to the right to control a

tangible or intangible good this right to control allows its holder to exclude others from doing certain things in

respect of the good many different rights to control put together create a bundle of rights hierarchy of rights to control (property) (Russian doll example)

first person has best rights second person has second best rights (e.g., finders: Armory) etc.

It does not matter how one obtained control (e.g., through trespass): one still has better rights over those who take subsequently (Bird v. Fort Frances)

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The problem with any theory of property, and many cases analysing property: They tend to forget that property rights are socially constructed. There is no “essence” of property, or

by which one can determine what is and is not property. Property is, quite simply, whatever human institutions, including courts, call “property.”

Few of the theories of property above are necessarily conservative, liberal, pro-property, or anti-property. Each can be used to justify both extension and limitation of property rights.

ABORIGINAL PROPERTY

- the Crown gained radical title to the land in Canada by exercising its legislative and administrative jurisdiction over Canada

- the Crown could only gain actual title to the land through surrender by treaty, or possession of unoccupied land

- s. 35 of the Constitution Act, 1982, protects aboriginal title and aboriginal rights- this is the right to use the land in a way that is not irreconcilable with the particular band’s attachment

to the land- it is a right in land itself that is inalienable- common law defines the criteria for title: 1) intention to exclude; 2) certain control- aboriginal law defines what it means to exercise certain control and identifies when intent manisfest- to obtain title, must establish intention and control prior to the Crown taking radical title

Solution Maps

Creation of new property right question

Define what is the subject matter of the property right (asset configuration) As a preliminary matter, it is useful to consider the subject matter of the property right that is sought.

In this regard, Bell and Paramovsky’s view of a property right as consisting of three dimensions – owner, asset, and dominion – is useful.

Ask, should there be a property right to this? To date, no case (or at least none that we examined in this course) has considered whether XXX is

subject to property rights. A court may create or extend – or, more rarely, modify (Pierson v Post per Livingston) – a type of

property right where it finds doing so would be in the public interest (“quasi-property” in INS; “pre-possessory interest” in Popov v Hayashi; property rights to body parts in Moore; changing the “mere pursuit ≠ possession” rule in Pierson v Post per Livingston in dissent). The analysis in such cases, implicitly or explicitly, tends to draw on theories regarding the purpose of property rights. Several of these theories are relevant here.

The labour theory of property (Locke) suggests that property rights arise when a person applies his/her labour to a thing, either because the property rights are a reward for the labour, or because they infuse the thing with the person’s labour.

Examples: Pitney in INS; Livingston dissent in Pierson v Post; Pinelli in Moore; all of the possession cases like Tubtania; Parker v BA; Popov v Hayashi

Utilitarian theories (Mill, Bentham) suggest that property rights are justifiable when they are socially useful; when the benefits derived from them exceed the costs associated with them.

Examples: Pitney in INS; Livingston in Pierson v Post; Moore (importance of biomedical research, don’t stifle research, anti-commons)

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Economic theories suggest private property is necessary because in enables the market-based system, which is the most efficient mechanism available for the production and allocation of resources, and therefore the maximization of wealth.

Demsetz, then Field, also Ostrom Radin observed that property rights are linked to the personal and emotional attachments that

persons have with things. In certain areas of the law, the law indeed calibrates the degree of protection granted to the subjective importance of the thing in question.

Could have been Moore; residential tenancies On the other hand, utilitarian considerations also might mitigate against the recognition of new

property rights. For example, the Brandeis dissent in INS v AP highlighted the danger that courts’ recognition of new property rights might unintentionally harm the public interest, and suggested that such decisions should be left to the legislature.

Does anyone else have a previously existing property right of the same kind? (owners) if so, your client loses against that person

Does your client have a property right? is there control evidenced by possession, investment of labour and money or otherwise?

are there countervailing public policy concerns is it market-efficient to grant the right? Etc.

What right(s) does your client have (dominion)? How many rights holders are there? exclusive possession? right to alienate (sell, pass on to heirs, etc.)? display?

Has someone violated a right?

MISC

No property interest in employees’ time (Intel v Hamidi) Policy based arguments in Intel v Hamidi, extension of property right governed by puclic policy?

Also in Popov – policy based creation of “pre-possessory interest” Pierson v Post – Livingston re the fox. Control in possession is context/community standard specific b/c of public policy certainty

reasons. Any more onerous requirement would discourage salvage operations, which would be bad

(this is a public policy argument). Also re: injunction (Tubtania) Judge is reassured by conclusion b/c there are no policy reasons to care about the rights of

adverse possessors who are trespassers. The purpose of the Limitations Act was not to protect trespassers. (Ham)

Discoverability policy issue (B v A)

Treatment of internet as commons in Intel v Hamidi Bailments: Bird v FF

From the lucas expropriation case: This raises a bigger issue. Do we see the bundle of rights associated with property as static or as

changing? In CVL, we think of property as the right to use the land. But in CML, so far we’ve defined property rights as related to the remedies, the right to

exclude. Kind of nonsensical as to think of property being the right to do something with land. From this perspective, PA Coal’s property rights not interfered with – it never lost its right to

exclude others. Value might have decreased, but property rights remain unaltered.

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We’ll come back to this – property doesn’t empower you to do anything, it merely allows you to prevent others from doing things.

Lots of public policy, meaning of property stuff in Expropriation section.

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the tenure & estate systems - lsa mcgill - aÉd mcgill...

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