Property Summary - Spring 2010

Property Summary SPRING 2010
Property Summary
PROPERTY SUMMARY ............................................................................................................................... 1 INTRO TO REAL PROPERTY..................................................................................................................... 6
1066 Battle of Hastings: ................................................................................................................................................................. 7 A. Tenurial Services: .............................................................................................................................................................................. 7 B. Incidents of Tenure ........................................................................................................................................................................... 8 1. Commutation of Tenurial Services ............................................................................................................................................. 9 2. Statutory Reform ............................................................................................................................................................................... 9 Quia Emptores (1290): Response to concerns of both lords and tenants ................................................................ 9 Tenures Abolition Act (1660): aka Statute of Tenures ....................................................................................................... 9
Terminology of Real/Personal Property ........................................................................................................ 6 Doctrine of Tenure ................................................................................................................................................. 7
Decline of Tenure ..................................................................................................................................................................9
Result of Doctrine of Tenure: ...........................................................................................................................................9 Relevance of Doctrine of Tenure: ................................................................................................................................ 10 Doctrine of Tenure in Ontario: ..................................................................................................................................... 10 Significance of Doctrine of Tenure: ............................................................................................................................ 11 Doctrine of Estates............................................................................................................................................... 11 Two Categories of Common Law Estates: ................................................................................................................ 11
Succession Law Reform Act (Escheat Upon Intestacy): .................................................................................................. 10 Ontario Business Corporations Act (Escheat via Dissolution): ................................................................................. 10 S. 43 of Constitution Act (1791): ............................................................................................................................................. 10
Freehold Estates: ................................................................................................................................................................................. 13
ESCHEAT...................................................................................................................................................... 14
Mechanics of Escheat Under SLRA: ......................................................................................................................... 14 Summary of Rules Where Intestate Survived by Spouse and/or Issue ....................................................... 14 Survived by Spouse and/or Issue: .............................................................................................................................. 15 Survived by Parents: ......................................................................................................................................................... 19 Survived by Nephews/Nieces:...................................................................................................................................... 19 Survived by Next of Kin: .................................................................................................................................................. 20 Miscellaneous Points: ....................................................................................................................................................... 20 Escheat: .................................................................................................................................................................................. 20 Adoption and the Succession Law Reform Act: ....................................................................................................... 21 Grants of Estates in Land ................................................................................................................................................ 22
Who Takes in What Proportion- Examples: ............................................................................................................................ 18
Escheats Act, R.S.O. 1990, c. S.26: ............................................................................................................................................ 20
FREEHOLD ESTATES ............................................................................................................................... 22

Pre Quia Emptores: ........................................................................................................................................................................ 22 Post Quia Emptores: ...................................................................................................................................................................... 22
Dissection Common Law Grants .................................................................................................................................. 23 1. Fee Simple Estates ........................................................................................................................................... 23 Fee Simple v. Ownership ................................................................................................................................................. 23
1. Grant to an Individual ................................................................................................................................................................... 24 INTER VIVOS: ................................................................................................................................................................................... 24 Conveyancing and Law of Property Act- S. 5: ...................................................................................................................... 24 TESTAMENTARY: ........................................................................................................................................................................... 25 Succession Law Reform Act- S. 26: ........................................................................................................................................... 25 2. Grant to a Corporation .................................................................................................................................................................. 25 Charities Accounting Act, R.S.O. 1990: ................................................................................................................................... 26
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Significance of Ss. 2(1) of Estates Administration Act to Succession of Fee Simple Estates: ......................... 26
Remainders and Reversions .......................................................................................................................................... 26 2. Fee Tail Estates ................................................................................................................................................. 27
A. Reversion: (Presumed) ................................................................................................................................................................ 27 B. Remainder: ........................................................................................................................................................................................ 27 Statute De Donis Conditionalibus (1285): ............................................................................................................................ 28
Creation of Fee Tail Estate .......................................................................................................................................... 28 Demise of Fee Tail Estates .............................................................................................................................................. 29 Fee Tail Estates Today ..................................................................................................................................................... 29
A. Inter Vivos: ........................................................................................................................................................................................ 28 B. Testamentary: .................................................................................................................................................................................. 29
Conveyancing and Law of Property Act- S. 4: ...................................................................................................................... 29 Significance of Ss.2(1) of Estates Administration Act to Succession of Fee Tail Estates: .................................... 30
3. Life Estates ......................................................................................................................................................... 30 Classification of Life Estates .......................................................................................................................................... 30

Cestui Que Vie: ...................................................................................................................................................................................... 31
Creation of Life Estates at Common Law.................................................................................................................. 31
Doctrine of Waste............................................................................................................................................................... 33
Statutory Reform: ................................................................................................................................................................................ 32 Conveyancing and Law of Property Act- S. 5 & Succession Law Reform Act- S. 26 .............................................. 32 What Happens upon Death of Cestui Que Vie? ....................................................................................................................... 32 Disappearance of Cestui Que Vie? ................................................................................................................................................ 32 Conveyancing and Law of Property Act- S. 46-47: .......................................................................................................... 32 Death of Life Tenant Pur Autre Vie:............................................................................................................................................. 32 Succession Law Reform Act- S. 2: Allows for devise of life estate pur autre vie ................................................... 33 Rights and Duties of Life Tenant:.................................................................................................................................................. 33 Settled Estates Act, 1990- S. 7: Supplements CL Rules: .................................................................................................. 33 Conveyancing and Law of Property Act S. 29: Life tenant liability for waste now automatic .................... 35 Conveyancing and Law of Property Act- S. 30: ................................................................................................................... 36 Successive Life Estates: ..................................................................................................................................................................... 36
SEISEN .......................................................................................................................................................... 37
Rule in Shelleys Case .......................................................................................................................................... 37 How Can We Account for RSC? ..................................................................................................................................... 37 Is RSC Good Law in Ontario Still? ................................................................................................................................ 38 Revisiting Sinclair Definition of RSC .......................................................................................................................... 38 RSC as a Rule of Law- Not Construction ................................................................................................................... 39 Doctrine of Worthier Title (DWT)............................................................................................................................... 39 Seisin ........................................................................................................................................................................ 40 Possession vs. Occupation of Land ...................................................................................................................... 40 Significance of Seisin......................................................................................................................................................... 40 Feoffment by Livery of Seisin (Transfer of freehold at CL) .............................................................................. 41
Re Rynard (1980): The rule in Shelleys Case is still part of the law of Ontario .................................................. 38
A. Tenurial Services/ Incidents of Tenure:............................................................................................................................... 40 B. Transfer of Freehold Estate at CL: .......................................................................................................................................... 41 CL Exceptions to Livery of Seisin:................................................................................................................................................. 41 Relevance of Seisin Today: .............................................................................................................................................................. 42 Statutory Reform: ................................................................................................................................................................................ 42 1. Conveyancing and Law of Property Act .......................................................................................................................... 42 2. Statute of Frauds ........................................................................................................................................................................ 42 3. Registry Act/ Land Titles Act ............................................................................................................................................... 43 4. Land Registration Reform Act ............................................................................................................................................. 43
Miscellaneous Issues ........................................................................................................................................................ 43
CONDITIONAL FREEHOLDS .................................................................................................................. 45

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Property Summary SPRING 2010 1. Condition of Acquisition/ Condition Precedent ............................................................................................... 45 2. Condition of Retention ................................................................................................................................................ 45
A. Determinable Estate ...................................................................................................................................................................... 46 What Happens on the Occurrence of the Determining Event? .................................................................................. 46 What is Retained by the Grantor of a Determinable Fee Simple Estate?............................................................... 46 What is the Possibility of Reverter: ........................................................................................................................................ 46 What is Retained by the Grantor of a Determinable Life Estate? ............................................................................. 47 B. Condition Subsequent (Defeasible Estate) .......................................................................................................................... 47 What Happens if the Condition is Not Satisfied? .............................................................................................................. 47 What is Retained by Grantor of Fee Simple Estate Subject to Condition Subsequent? ................................... 48 What is Retained by Grantor of Life Estate Subject to Condition Subsequent? .................................................. 48
Invalid Conditions................................................................................................................................................ 48 Contrary to Public Policy ................................................................................................................................................ 49
A. Discriminatory Conditions ......................................................................................................................................................... 49 Canada Trust Co. v. OHRC (1990): .......................................................................................................................................... 49 Halpern v. Canada (Attorney General) [2003]: ................................................................................................................. 50 B. Restraint on Marriage ................................................................................................................................................................... 50 Total Restraint on Marriage ...................................................................................................................................................... 50 Partial Restraint on Marriage ................................................................................................................................................... 50 C. Interference with a Marital Relationship ............................................................................................................................. 51 Re Nurse [1921]: ............................................................................................................................................................................ 51 D. Restraint on Religious Behaviour ........................................................................................................................................... 51 Re Curran [1939]: .......................................................................................................................................................................... 51 E. Illegality .............................................................................................................................................................................................. 51 Total Restraint on Alienation ......................................................................................................................................................... 52 Partial Restraint on Alienation ...................................................................................................................................................... 52
Restraint on Alienation .................................................................................................................................................... 51 Conditional Gifts of Personalty ....................................................................................................................... 52 1. Is there really such a thing as a gift subject to a condition precedent? ............................................... 53 2. Inapplicability of Doctrine of Estates to Personal Property .................................................................... 53 3. Dearth of Supporting Authorities ........................................................................................................................... 53
Conditional Freehold Estates In Land ........................................................................................................................................ 53 Trust Arrangements ........................................................................................................................................................................... 53
COMMON LAW REMAINDERS ............................................................................................................... 55

Common Law Remainders ................................................................................................................................ 55 A. Remainders and Reversions Revisited................................................................................................................. 55 B. Vested and Contingent Remainders: ..................................................................................................................... 55
C. Possibility of Reverter vs. Possibility of Reversion ......................................................................................... 56 D. Successive Contingent Remainders Allowed at CL ......................................................................................... 56 Common Law Remainder Rules ...................................................................................................................... 57 1. No Remainders After a Fee Simple......................................................................................................................... 57 2. No Springing Freeholds .............................................................................................................................................. 58 3. Timely Vesting ................................................................................................................................................................ 60
3 Factors to Consider in Order to Determine Whether Remainder is Vested or Contingent ............................ 56 Existence ............................................................................................................................................................................................ 56 Ascertainment ................................................................................................................................................................................. 56 Condition Precedent ..................................................................................................................................................................... 56
Does C.L.R.R. #2 preclude grant of contingent freehold? .................................................................................................. 58 Is C.L.R.R. #2 satisfied where a contingent freehold follows a leasehold? ................................................................. 59 How long will C.L. wait for a contingent remainder to vest in interest? ..................................................................... 60 What is the rationale underlying C.L.R.R. #3? ........................................................................................................................ 60 What if the contingency is satisfied after the termination of the prior particular estate? ................................. 60 Class Closing Rules .............................................................................................................................................................................. 61
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Class Closing Rules and Partial Divestment ............................................................................................................................. 61
4. No Shifting Freeholds .................................................................................................................................................. 61
Rationale 1:............................................................................................................................................................................................. 62 Rationale 2:............................................................................................................................................................................................. 62
EQUITABLE ESTATES .............................................................................................................................. 63

Equitable Estates Introduction ....................................................................................................................... 63 Relationship between Law and Equity...................................................................................................................... 63 Historical Reasons for the Use ...................................................................................................................................... 64
Limits to Enforcement of Uses / Trusts by Equity: .............................................................................................................. 64 1. Charitable Fundraising:................................................................................................................................................................ 65 2. Asset Protection: ............................................................................................................................................................................. 65 3. Tax Avoidance: ................................................................................................................................................................................. 65 4. Avoid Restrictive CL Rules: ........................................................................................................................................................ 65 A. Statutes of Mortmain (Dead Hand) .............................................................................................................................. 65 B. Prohibition on Devises of Land ...................................................................................................................................... 66 C. Feoffment by Livery of Seisin .......................................................................................................................................... 66 D. Protecting Estates in Land from Spousal Claims.................................................................................................... 66 E. Future Interests ..................................................................................................................................................................... 66
Statute of Uses ....................................................................................................................................................... 67 How Did The Statute of Uses Seek to Eliminate the Use? .................................................................................. 67 Overcoming the Statute of Uses ................................................................................................................................... 68
1. Avoidance of Statute of Uses: .................................................................................................................................................... 68 A. Appoint Corporation as Trustee ......................................................................................................................................... 68 B. Transfer Leasehold to Trustee ............................................................................................................................................ 68 C. Give Trustee Active Duties .................................................................................................................................................... 68 2. Exhausting Operation of Statute of Uses .............................................................................................................................. 69
Statute of Uses and the CLRR ........................................................................................................................................ 70 Statute of Uses and Statute of Wills ............................................................................................................................ 71 Rule in Shelleys Case Revisited ...................................................................................................................... 71 RSC and Equitable Estates .............................................................................................................................................. 72
RSC and Statute of Uses: ................................................................................................................................................................... 72 Exception: Rule in Purefoy v. Rogers Timely Vesting .................................................................................................... 71 Statute of Wills and CLRR: ............................................................................................................................................................... 71
Modern Trusts ....................................................................................................................................................... 72 Fusion of CL and Equity ................................................................................................................................................... 72 Forms of Property Held in a Modern Trust ............................................................................................................. 73 2 Basic Categories of Modern Trusts: ........................................................................................................................ 73
1. Express Trusts .................................................................................................................................................................................. 73 2. Trusts Arising by Operation of Law ........................................................................................................................................ 75 A. Resulting Trusts ......................................................................................................................................................................... 75 B. Constructive Trusts .................................................................................................................................................................. 76 Modern Relevance of Statute of Uses: ........................................................................................................................................ 73 A. Locus of Wealth in Feudal Times: ........................................................................................................................................... 73 B. Possession vs. Ownership of Things in Feudal Times: ................................................................................................... 73
RULE AGAINST PERPETUITIES ............................................................................................................ 78

Introduction to Rule Against Perpetuities .................................................................................................. 78 What is the Rule Against Perpetuities? ..................................................................................................................... 78 What is the Rule Against Remoteness of Vesting?................................................................................................ 78 CL Approach vs. Modern Approach ............................................................................................................................ 80 Perpetuity Period................................................................................................................................................. 82 Perpetuity Period for Contingent Estates (Legal and Equitable):.................................................................. 82 J. Alter Page 4 of 95
Policy Rationale of RARV: ................................................................................................................................................................ 79

Restrictions on the Designations of the Life or Lives in Being .................................................................................... 83
Identifying Perpetuity Problems Re Contingent Estates ................................................................................... 84
1. Does the Grant/Trust Explicitly Define the Perpetuities Period/Lives in Being? ............................................. 84 2. Is the Grantee/Beneficiary of Contingent Estate Alive at the Date of Grant/Trust? ......................................... 84 3. Does CLRR #3- Timely Vesting- Apply? ................................................................................................................................ 85 4. If Perpetuity Problems are not Ruled out by (1), (2), and (3), Who are the Implicit Life or Lives in Being?........................................................................................................................................................................................................ 86 5. What if There is No Life or Lives in Being? .......................................................................................................................... 86 6. If the interest fails for remoteness is it nevertheless saved by the Perpetuities Act? .................................. 86
Conditions Subsequent/Determinable Limitations ................................................................................ 87 Common Law Approach: ................................................................................................................................................. 87 Contemporary Approach: ............................................................................................................................................... 87
Limited Application of S. 15 of Perpetuities Act.................................................................................................... 88 Introduction ........................................................................................................................................................... 90 Similarity Between Joint Tenancy and Tenancy in Common ........................................................................... 90 Differences Between Joint Tenancy and Tenancy in Common ....................................................................... 90
1. Possibility of Reverter Deemed NOT to be Vested in Interest Until Determinable Event Occurs (S. 15(2)) ................................................................................................................................................................................................. 88 2. Rule Against Remoteness of Vesting Applies to BOTH Possibility of Reverter and Right of Re-Entry (S.15(1))................................................................................................................................................................................................... 88 3. Unique Perpetuities Period Applies to Possibility of Reverter/Right of Re-Entry ............................................ 88 A) If No Relevant Life or Lives in Being, then 21 Years from Date of Grant/Trust: ..................................... 88 B) If there is relevant life in being, then the life in being plus 21 years to a maximum of 40 years ... 88
CONCURRENT ESTATES ......................................................................................................................... 90
A. Right of Survivorship .................................................................................................................................................................... 90 B. Unities .................................................................................................................................................................................................. 91 Unity of Possession ........................................................................................................................................................................ 91 Unity of Interest .............................................................................................................................................................................. 91 Unity of Time .................................................................................................................................................................................... 91 Unity of Title ..................................................................................................................................................................................... 91
Identifying JTs and TICs ................................................................................................................................... 92 1. Language Employed in Grant/Trust ...................................................................................................................... 92

On or Before July 1, 1834: ................................................................................................................................................................ 92 After July 1, 1834: ................................................................................................................................................................................ 92
2. Presence/ Absence of 4 Unities at Date of Grant/Trust ................................................................................ 93
3. Severance.......................................................................................................................................................................... 93
Is There Unity of Time? ............................................................................................................................................................... 93 Is There Unity of Title?................................................................................................................................................................. 93 Is There Unity of Interest? .......................................................................................................................................................... 93
A. Severance by operation of Law: ............................................................................................................................................... 93 B. Severance by Destruction of 4 Unities: ................................................................................................................................. 94 Destruction of Unity of Title: ..................................................................................................................................................... 94 Destruction of Unity of Interest: .............................................................................................................................................. 94 C. Severance by Agreement: ............................................................................................................................................................ 95
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1. INTRO TO REAL PROPERTY
Intro to Real Property

Property Real Property Personal Property
Common Law Estates
Interests
Equitable Estates
Chattels
Chose in Action
Fee Simple Estates
Fee Tail Estates
Life Estates
Licenses
Incorporeal Hereditaments
Covenants
Ownership
Possession
R.I.P.
Security Interests?
Shares K. rights Patent Cpyright, etc
Schematic of Real Property

Real Property (Property in Land)
Schematic of Common Law Estates

Common Law Estates
Equitable Estates
Common Law Estates
Interests
Freehold Estates
Leasehold Estates
Schematic of Freehold Estates
Schematic of Interests
3 Key Issues: A. Terminology of Real/Personal Property B. Doctrine of Tenure: Tenure- Terms upon which rights in land may be held Sometimes referred to as the QUALITY upon which land is held C. Doctrine of Estates: Estate- Duration for which rights in land may be held Sometimes referred to as the QUANTITY for which land is held
Terminology of Real/Personal Property

Terminology of real and personal derive from the types of legal actions historically associated with, respectively, land and property other than land Category Real Property Historical Explanation Real correlates with type of action brought for land disputes. Real or in rem action. Remedy = occupation / possession restored
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Property Summary SPRING 2010 Personal Property
Personal correlates with type of action brought for disputes over property other than land. Personal or in personam action. Remedy = damages. Fact scenario: X is applying for credit with Low Interest Credit Co. Credit application form contains the following question- Do you own any real estate? X responds as follows- I do not own any real estate. I do, however, hold an estate in fee simple as tenant in free and common soccage of the Crown in right of the Dominion of Canada How do we make sense of Xs response? No such thing as absolute land ownership in Anglo-Canadian law: [T]oday all land in Canada, except that owned by the Crown in right of the Dominion or of the several provinces, is held, not allodially or outright, but of the Crown in right of the Dominion or of a province. (Anger and Honsberger Real Property).
Doctrine of Tenure
Historical foundation of Anglo-Canadian real property law regime is TENURIAL rather than ALLODIAL But what exactly is the difference? Allodial- Absolute ownership of land; Can own land in same way you can own a car in some jurisdictions Tenurial- Crown owns land and we own estate in land Derives from Latin tenere (To hold) Refers to holding land of another (i.e. Holding land of the owner) But how can land be held of the owner if ownership of land is not possible? 1066 Battle of Hastings: William the Conqueror crowned king of England on Dec. 25, 1066 after emerging as victor of Battle of Hastings After his coronation, William claimed ownership of all land in England and parceled out land to loyal supporters (The barons or tenants-in-capite) Crown held ownership of land Barons held land of the Crown Development of Feudal Pyramid: Barons further parceled out land to sub-tenants (Mesne/Intermediate lords) who further parceled out to sub-tenants (Tenants in demesne) SUBINFEUDATION- Process of further parceling out land to sub-tenants Result: All land in England held of the Crown either immediately (in case of Barons) or mediately (all lesser tenants) Nulle terre sans seigneur: No land without a lord How does the doctrine of tenure relate to the feudal pyramid? Tenure refers to the terms on which land parceled out from: Crown Baron Baron Intermediate Lords Intermediate Lords Sub-tenants, etc. Two basic elements of Tenure: A. Tenurial Services: Perform services for people higher up on totem pole Right to occupy land granted in exchange for promise to perform services for lord J. Alter Page 7 of 95
Property Summary SPRING 2010 Nature of services owing varied with type of tenure: Description of Services
Type of Tenure Free tenure Unfree tenure Knight service
Serjeanty
Frankalmoign tenure Soccage tenure
Services owing were specified and certain Lord unable to arbitrarily change services due Services owing were unspecified and uncertain. Lord had discretion re services required. Provision of knights for kings army. Fixed # of knights required for 40 days a year. Common tenure for Barons. A.K.A. tenure in chivalry. Provision of personal services to king. Examples include butler, carver, carry kings sword at coronation or to be kings sewer. Common tenure for Barons. A.K.A. tenure in chivalry. Grant of land to church/ecclesiastical body. Services owing were prayers for grantors soul. Services owing were agricultural.
B. Incidents of Tenure Required in addition to tenurial services Varied among the types of tenure Lucrative source of revenue for Crown/Lords Type of Incident Fine Relief Primer Seisin Description of Incident Tenants unable to alienate rights in land without consent of lord. Money payment to lord required for his consent. Rights in land did not automatically pass to heirs. Money payment to lord required for his consent. Basically same as relief when applied in context of death of baron. King held first right to possession. New tenant paid relief to king and negotiated new tenurial services/incidents of tenure. Applicable where tenant died leaving minor heirs. Lord became guardian of children (but entitled to profits from land) Lord could choose future spouse for child. Lord could demand payment from tenant for certain expenses. E.g., knighting of son, marriage of daughter. Land escheats back to lord when tenancy ends. Tenancy could end due to death of tenant without heirs or serious criminal conviction. If tenant wanted heir to inherit land they had to pay relief. But what if they had no heirs? Land would escheat to superior lord.
Wardship and Marriage Aids Escheat (Still have this one)
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Property Summary SPRING 2010 Decline of Tenure 2 key factors contributed to eventual decline of tenure: 1. Commutation of tenurial services 2. Statutory Reform: A. Quia Emptores (1290) B. Tenures Abolition Act (1660)
1. Commutation of Tenurial Services Tenurial services were over time commuted to fixed payments, which then declined in value over time due to inflation For this reason, fixed payments simply abandoned eventually Incidents of tenure emerged as the sole source of revenue for feudal system 2. Statutory Reform Quia Emptores (1290): Response to concerns of both lords and tenants Lords Sought abolition of subinfeudation b/c it: Lengthened feudal pyramid (administrative chaos) Reduced profitability of incidents of tenure Tenants Sought right to alienate rights in land inter vivos (between living persons) without permission of lord and without any incident of tenure (i.e. Fine) Quia Emptores achieved 2 reforms: Subinfeudation abolished (BUT Crown still permitted to establish new tenures) Inter vivos right to alienate rights in land without permission of lord and without payment of fine Testamentary analogue came in 1540 with Statute of Wills Impact of Quia Emptores on feudal pyramid: From now on, no more layers could be added to feudal pyramid Prohibition of subinfeudation halted lengthening of feudal pyramid Feudal pyramid began to slowly flatten through escheat as lords randomly died without heirs Most land in England eventually held immediately of the Crown As land escheated to the Crown, new tenures were created by the Crown (b/c Quia Emptores did not preclude creation of new tenures by the crown) Tenures Abolition Act (1660): aka Statute of Tenures Converted basically all existing tenures into free and common soccage tenure Free = No tenurial services Common = No special incidents of tenure Soccage = Provided food, fuel and cloth, both to sustain themselves and to fulfill their service obligations to their lorgs Didnt abolish ALL incidents of tenure ESCHEAT is one of the few remaining incidents of tenure with any relevance Eased terms on which land held of the crown w/in what was left of feudal pyramid after Quia Emptores Result of Doctrine of Tenure: Although in theory the Crown remains even today the feudal lord, the relationship no longer has any particular consequence because it is no longer associated with any services or incidents of tenure, with the one exception of escheat (Mossman)
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In England land law todayintermediate lordships have virtually all disappeared. In practice, the tenant holds of the sovereign. The results I that tenure, as one of the two great doctrines of feudal land law still subsists, but it is of little practical importance (Anger and Honsberger- Real Property) [T]he first thing the student has to do is to get rid of the idea of absolute ownershipand the next thing the student needs to do is painfully to reacquire it(Megarry & Wade)
Relevance of Doctrine of Tenure: 1. Accounts for why allodial ownership of land is not possible under Ango-Canadian law 2. Many aspects of modern property law derive from English feudal structure: Right to alienate land derives from Quia Emptores Certain rules historically adopted to enforce incidents of tenure remain with us, even though incidents of tenure themselves no longer remain Escheat remains: Ex. Succession Law Reform Act (Part II Intestate Succession); Ontario Business Corporations Act (s.244) Succession Law Reform Act (Escheat Upon Intestacy): Part II (s. 44-47) of Succession Law Reform Act R.S.O. 1990, c. S.26 provides for distribution of an intestate persons property Property will escheat to Crown under SLRA as a last resort If you die without a will, you die intestate Dying w/o a will and any heirs, your property escheats to crown Ontario Business Corporations Act (Escheat via Dissolution): S. 244 (1): Any property of corporation that has not been disposed of at the date of its dissolution is immediately upon such dissolution forfeit to and vests in the Crown Doesnt just apply to personal wealth- Also applies to corporations 3. Sets conceptual framework for study of real property law The feudal origins of real property law in common law jurisdictions provide 2 fundamental property concepts: a. The Crown owns all the land b. Property is a bundle of rights and obligations Doctrine of Tenure in Ontario: English law regarding tenure became law in Ontario due to combined operation of: The Constitution Act (1791) Property and Civil Rights Act (1792) S. 43 of Constitution Act (1791): [A]ll lands which shall be hereafter granted within the said province of Upper Canada shall be granted in free and common soccage, in like manner as lands are now holden in free and common soccage, in that part of Great Britain called Englandbut subject nevertheless to such alterations, with respect to the nature and consequences of such tenure of free and common soccage, as established by any law or laws which may be made by his majesty, his heirs or successors, by and with the advice and consent of the legislative council and assembly of the province S. 1 of Property and Civil Rights Act (1792):
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In all matters of controversy relative to property and civil rights, resort shall be had to the laws of England as they stood on the 15th day of October, 1792except so far as such laws and rules have been since repealed, altered, varied, modified or affected (Now R.S.O. 1990, c.P. 29)
Significance of Doctrine of Tenure: Quia Emptores and Tenures Abolition Act were adopted into Ontario law Land in Ontario held as tenant of the Crown in free and common soccage
Doctrine of Estates
Distinction with Doctrine of Tenure: Doctrine of Tenure- All land is held of the Crown in tenure (ie. Upon what terms?) Doctrine of Estates- Duration for which land held in tenure may be held of the superior lord (i.e. For how long?) How it relates to the Doctrine of Tenure: Doctrine of tenure is to doctrine of estates what quality is to quantity An estate is a measurement of time, defining how long a person may claim rights in a particular property The tenure by which one holds land determines the QUALITY of the property interest That is, by what terms of tenurial services and incidents the land is held (in the modern era, by free and common soccage only) Doctrine of estates determines the QUANTITY of the interest That is, the period of time during which a particular holder of the interest will be entitled to possession of the land (Mossman) Doctrine Doctrine of Tenure Description Qualitative nature of rights in land. Defines rights and obligations vertically in feudal pyramid. Terms on which land held of a superior lord (e.g., the Crown) free and common socage in contemporary era Quantitative nature of rights in land. Defines rights in land horizontally through time. For how long may land be held of a superior lord? e.g., -Lifetime of estate holder? (life estate) -Lifetime of all heirs (ascendants + lineal and collateral descendants) of estate holder? -Lifetime of all lineal descendants of estate holder?
Doctrine of Estates
Two Categories of Common Law Estates: Type of Estate Description Freehold Estate Termination event predetermined BUT no predetermined termination date. e.g., to A and his heirs Terminating event is death (to A for life) [i.e. An estate with the potential to last forever, without recourse to the lord]
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Property Summary SPRING 2010 Leasehold Estate
1. INTRO TO REAL PROPERTY A.K.A. non-freehold estates (p. 240 Mossman 2nd ed.) Predetermined termination date. e.g., to A for 10 years
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Property Summary SPRING 2010 Freehold Estates:

Freehold Estates
Fee Simple Estates
Fee Tail Estates
Life Estates
Conditional Freeholds
Category of Freehold Estate Fee simple estate
Fee tail estate
Duration Fullest circle of rights available in land. Closest thing to ownership. Estate continues as long as grantee or general heirs of grantee are alive. General heirs = descendants (both lineal and collateral) and ascendants. Potential to last forever. Estate continues as long as grantee or special heirs of grantee are alive. Special heirs = descendants (lineal only) Potential to last forever. Estate continues as long as grantee or a 3rd party is alive (life estate pur autre vie). Limited (but uncertain) duration
Life estate
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2. ESCHEAT
Escheat
Mechanics of Escheat Under SLRA: Tenures Abolition Act (1660) converted essentially all tenures to free and common soccage Free No tenurial services Common No special incidents of tenure Escheat nevertheless remains (at least in theory) as an incident of tenure) Escheat- Process whereby property reverts to the Crown in right of province if owner dies intestate and without next-of-kin as specified in intestacy legislation Parachins modified definition: Process whereby property reverts to the Crown in right of province if an estate holder dies intestate and is not survived by a spouse, issue, parent, sibling, nephew, niece, or next of kin as specified in intestacy legislation Previous definition said if owner died- But in this jurisdiction you cant really own land Defined different members of family b/c rules in intestacy legislation are different in each of those situations Only if you have none of those people does escheat occur Intestate- Died without a will Partially Intestate- Died WITH a will BUT will fails to deal with all property held by deceased FREEDOM OF TESTATION: Have freedom to draft will to leave property to whomever you want Surviving spouse can elect to treat your death as a divorce So if not generous with what you left in will, can divorce and get more This is the only fetter on freedom of testation Issue- Lineal descendants (children/grandchildren) Statutory Context: Rules for distribution of property on intestacy / partial intestacy set out in Part II (s. 44-47) of Succession Law Reform Act R.S.O. 1990, c. S.26. 6 scenarios contemplated: Survived by spouse and/or issue (s. 44 - ss. 47(2)) Survived by parents (ss. 47(3)) Survived by siblings (ss. 47(4)) Survived by nephews/nieces (ss. 47(5)) Survived by next-of-kin (ss. 47(6)) Escheats to Crown (ss. 47(7)/(8))
Summary of Rules Where Intestate Survived by Spouse and/or Issue Survivors Among Intestates Spouse and Issue? Surviving spouse. No surviving issue. No surviving spouse. 1 surviving issue. Surviving Spouse + 1 surviving issue. SLRA Reference Section 44 Section 47(1) Section 45(1), (2) Section 46(1) Intestacy Distribution (s. 44 ss. 47(2)) 100% to spouse. 100% to sole surviving issue. Preferential share (i.e., $200,000) to spouse. Residue (if any) = to spouse and to issue.
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Property Summary SPRING 2010 Surviving spouse + 2 or more surviving issue. Section 46(2) No surviving spouse. 2 or more surviving issue.
2. ESCHEAT Preferential share (i.e.., $200,000) to spouse. Residue (if any) = 1/3 to spouse and 2/3 in equal shares to issue. Equal shares to issue.
Survived by Spouse and/or Issue: Where intestate is survived by spouse but has NO surviving issue, surviving spouse is entitled to ALL property (S. 44)
Where intestate is survived by ONE issue but NO surviving spouse, surviving issue is entitled to ALL property (S. 47(1))
Where intestate is survived by spouse AND surviving issue, the outcome is contingent on 2 factors: 1. NET VALUE OF INTESTATES PROPERTY: Net Value- Value after payment of all charges, debts and expenses for funeral/estate administration (ss.45(4)) If NV is equal to or less than the preferential share, then surviving spouse entitled to ALL property (ss.45(1)) Preferential Share- Currently $200,000 (ss.44(5) & O. Reg. 54/95 s.1) NV matters b/c SLRA provides for preferential share of $200 000 for surviving spouse. Rules are designed to make sure that the surviving issue gets nothing until at least this amount has gone to the surviving spouse If NV is greater than the preferential share, then surviving spouse entitled to preferential share (ss.45(2)) Residue (i.e. Property remaining after preferential share) shared among surviving spouse and surviving issue 2. NUMBER OF SURVIVING ISSUE: Respective shares of surviving spouse and issue in residue vary with number of surviving issue i.e. 1 surviving issue = 1/2 to spouse and 1/2 to surviving issue (ss.46(1)) 2 or more surviving issue = 1/3 to surviving spouse and 2/3 in equal shares to surviving issue (ss.46(2)) Example with Surviving Spouse & 1 Surviving Issue: X dies intestate. X is survived by spouse, Y, and child, Z. Xs old property is estate in fee simple (the London Estate). London Estate has FMV of $1,000,000. London Estate encumbered by $750,000 mortgage. X had no other debts. Xs funeral costs were $50,000. In what proportions do Y and Z share in the London Estate? Solution: NV of Xs estate is equal to preferential share (i.e. $1,000,000 - $750,000 50,000 = $200,000) Page 15 of 95
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Property Summary SPRING 2010 Y inherits the London Estate (as SOLE holder thereof) Z inherits nothing NB: Y is required to assume mortgage debt (s.32)
2. ESCHEAT
Example with Surviving Spouse and 1 Surviving Issue: X dies intestate. X is survived by spouse, Y, and child, Z. Xs only property is estate in fee simple (the London Estate). London Estate has FMV of $1,500,000. London Estate encumbered by $950,000 mortgage. X had no other debts. Xs funeral costs were $50,000. In what proportions do Y and Z share in London Estate? Solution: Y inherits preferential share of London Estate B/c NV of Xs estate is greater than $200,000 (i.e. $1,500,000 - $950,000 - $50,000 = $500,000) Residue (NV Ys preferential share) to be split equally between Y and Z $500,000 $200,000 /2 = $150,000 Y inherits total of $350,000 ($200,000 + $150,000) representing a 70% interest in equity of London Estate Z inherits $150,000 representing a 30% interest in equity of London Estate Y and Z = Tenants in Common as to 7/10 and 3/10 respectively Y and Z share mortgage debt proportionately (s.32) Example with Surviving Spouse and 2 Surviving Issue: X dies intestate. X is survived by spouse, Y, and 2 children (Z and A). Xs only property is estate in fee simple (the London Estate). London Estate has FMV of $1,500,000. London Estate encumbered by $950,000 mortgage. X has no other debts. Xs funeral costs were $50,000. In what proportions do Y, Z and A share in the London Estate? Solution: Y inherits preferential share of London Estate B/c NV of Xs estate is greater than $200,000 (i.e. $1,500,000 - $950,000 - $50,000 = $500,000) Residue (NV Ys preferential share) to be split 1/3 to Y and 2/3 to Z and A in equal shares per stirpes: Ys share of residue = $100,000 (($500,000 - $200,000) x 1/3) Zs shares of residue = $100,000 (($500,000 - $200,000) x 1/3) As share of residue = $100,000 (($500,000 - $200,000) x 1/3) Y inherits total of $300,000 ($200,000 + $100,000) representing a 60% interest in equity of London Estate Z inherits $100,000 representing a 20% interest in equity of London Estate A inherits $100,000 representing a 20% interest in equity of London Estate Y, Z and A = Tenants in common as to 3/5, 1/5 and 1/5 respectively Y, Z and A share mortgage debt proportionately (s. 32) What if a child predeceases but leaves issue who survive the intestate property holder? X dies intestate. Xs only property is estate in fee simple (the London Estate). Xs spouse, Y, predeceased X. X is survived by 2 children (A and B). Xs child Z predeceased X, but child Zs children (C and D) survived X. In what proportions do the surviving issue (A,B,C and D) share in London Estate? Solution: See ss. 47(1)/(2) of SLRA. 1 equal share set aside for each of child Z, Child A and Child B (ie. 1/3 share of London Estate set aside for each of Z, A and B) 1/3 share set aside for Child Z divided equally between Grandchild C and Grandchild D (i.e. 1/6 set aside for each of Grandchild C and Grandchild D)
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Intestate Predeceased Spouse Y
2. ESCHEAT
Predeceased Child Z
Surviving Child A 1/3 Share of London Estate
Surviving Child B 1/3 Share of London Estate
Surviving Grandchild C 1/6 Share of London Estate
Surviving Grandchild D 1/6 Share of London Estate
What if child predeceases but leaves issue who survive the intestate property holder? X dies intestate. Xs only property is estate in fee simple (the London Estate). Xs spouse, Y, predeceased X. Xs three children (Z, A and B) all predeceased X leaving issue alive at date of Xs death. Z = 2 children (C and D), A = 3 children (E, F and G), B = 1 child (H). In what proportions do the surviving issue (C, D, E, F, G, and H) share in the London Estate? Solution: See ss. 47(1)/(2) of SLRA. 0 shares set aside for Child Z, Child A and Child B. 1 equal share set aside for each of Grandchild C, D, E, F, G and H (i.e. 1/6 share of London Estate set aside for each)
Intestate Predeceased Spouse Y
Predeceased Child Z
Predeceased Child A
Predeceased Child B
Issue to Consider: Why not set aside 1 share for each of Child Z, A and B, and then divide that share equally among their respective surviving issue? Count down to the level at which there are surviving issue before you divide (i.e. Below diagram is wrong) Intestate Predeceased
Spouse Y Predeceased Child Z 1/3 Share of London Estate Predeceased Child A 1/3 Share of London Estate Predeceased Child B 1/3 Share of London Estate
Surviving Grandchild E 1/6 Share of London Estate
Surviving Grandchild F 1/6 Share of London Estate
Surviving Grandchild G 1/6 Share of London Estate
Surviving Grandchild H 1/6 Share of London Estate
Surviving Grandchild E 1/9 Share of London Estate
Surviving Grandchild F 1/9 Share of London Estate
Surviving Grandchild G 1/9 Share of London Estate
Surviving Grandchild H 1/3 Share of London Estate
Solution 47. (1) Subject to subsection (2), where a person dies intestate in respect of property and leaves issue surviving him or her, the property shall be distributed, subject to the rights of the spouse, if any, equally among his or her issue who are of the nearest degree in which there are issue surviving him or her (2) Where any issue of the degree entitled under subsection (1) has predeceased the intestate, the share of such issue shall be distributed among his or her issue in the manner set out in subsection (1) and the share devolving upon any issue of that and subsequent degrees who predecease the intestate shall be similarly distributed. J. Alter Page 17 of 95
Property Summary SPRING 2010 Who Takes in What Proportion- Examples: Per Capita Distribution: WRONG!
Per Capita Distribution Intestate Predeceased Spouse
2. ESCHEAT
Predeceased Child A
Predeceased Child B
Predeceased Child C
Predeceased Grandchild D
Surviving Grandchild E 1/6
Surviving Grandchild F 1/6
Surviving Grandchild G 1/6
Surviving Grandchild H 1/6
Surviving Great Grandchild I 1/6
Surviving Great Grandchild J 1/6
Per Stirpital Distribution: WRONG! Per stirpes is a method for distributing the estate of a deceased individual. Per stirpes (which is Latin for "per branch") specifies that each branch of the deceased person's family receives an equal share of the estate, regardless of how many people are in that branch. For example, if A and B are the children of the deceased, but B is also deceased leaving children C, D, E, F and G (the grandchildren of the original person), then A would receive one half of the estate and each of B's 5 children would receive one-tenth of the estate (essentially, they are dividing B's half). Per stirpes is different from per capita, because per capita weighs each person equally, rather than each branch equally.
Per Stirpital Distribution Intestate Predeceased Spouse
Predeceased Child A 1/3
Predeceased Child B 1/3
Predeceased Child C 1/3
Predeceased Grandchild D 1/6
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Property Summary SPRING 2010 SLRA Intestacy Distribution: RIGHT!

SLRA Intestacy Distribution Intestate Predeceased Spouse
2. ESCHEAT
Predeceased Child A
Predeceased Child B
Predeceased Child C
Predeceased Grandchild D
Survived by Parents: Ss. 47(3) of SLRA: If no surviving spouse/issue, then property distributed to intestates parents equally (if both alive( or absolutely to a sole surviving parent Survived by Siblings: Ss. 47(4) of SLRA: If no surviving spouse/issue/parent, then property distributed to intestates surviving siblings equally If a sibling has predeceased leaving issue, then his/her share is divided among his/her surviving children (NOT their issue) So only children, NOT grandchildren etc. Surviving great niece/nephew gets nothing
Predeceased Parents Surviving Brother 1/3 of Estate Surviving Sister 1/3 of Estate Predeceased Sister 1/3 of Estate
Intestate
Predeceased Nephew No Share of Estate
Surviving Niece 1/6 of Estate
Surviving Nephew 1/6 of Estate
Surviving Great Niece No Share of Estate
Survived by Nephews/Nieces: If ALL siblings have predeceased, then go to ss. 47(5), even if siblings have left surviving children Ss. 47(5) of SLRA: If no surviving spouse/issue/parent/siblings, then property distributed to intestates surviving nephews/nieces equally (without representation) Do an equal distribution of surviving, if any predeceased have surviving issue they get nothing Without Representation: Only divided at that level and no further; Those nephews and nieces who have died and who have children Children get nothing
Predeceased Parents Predeceased Sister Predeceased Brother
Intestate
Predeceased Nephew No Share of Estate
Surviving Great Niece No Share of Esate
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Property Summary 2. ESCHEAT SPRING 2010 Survived by Next of Kin: Ss. 47(6) of SLRA: If no surviving spouse/issue/parent/siblings/nephews/nieces, then property distributed to next of kin of equal degree of consanguinity equally without representation Consanguinity- The property of being from the same kinship as another person. Consanguinity is the quality of being descended from the same ancestor as another person. The degree of consanguinity can be illustrated using a consanguinity table, in which each level of lineal consanguinity (ie: generation) appears as a row, and invidiauls with a collaterally-consanguineous relationship share the same row. How are degrees of consanguinity calculated? Count UPWARD to nearest common ancestor and then DOWNWARD to the relative (ss. 47(8)) Great Great Grandparents (4) Great Grandparents (3) Grandparents (2) Parents(1) Uncle/ Aunt (3) First Cousin (4) First Cousin Once Removed (5) First Cousin Twice Removed (6) Great Uncle/Aunt (4) First Cousin Once Removed (5) Second Cousin (6) Second Cousin Once Removed (7) Second Cousin Twice Removed (8)
Brother/Sister (2) Nephew/Niece (3) Great Nephew / Niece (4)
Intestate ( Spouse) Children Grandchildren etc.
Miscellaneous Points: Ss. 47(8) of SLRA: Kindred of half-blood inherit equally with full-blood Issue: Is the reference to kindred above restricted to next of kin other than sibling/newphew/niece? i.e. Do half-blood relatives inherit equally with full blood only under ss. 47(6) or also under ss. 47(4) 47(5)? Describes half blood only in connection with ss. 6, but this cannot be right b/c they would have a stronger blood connection than some removed cousins Ss. 47(9) of SLRA: Beneficiary en ventre sa mere deemed to have been born at time of intestates death Beneficiary inside the mother; Deceased person has a child but not yet born at the time of deceased persons death Does this person quality if and when theyre subsequently born? This provision says yes If they are conceived BEFORE the intestate persons death but born AFTER the death, then he/she qualifies as heir Escheat: Ss. 47(7) of SLRA: If no surviving spouse/issue/parent/siblings/nephews/nieces/next of kin, then property escheats to Crown and Escheats Act applies No limit on degree of consanguinity for next of kin Escheats Act, R.S.O. 1990, c. S.26: J. Alter Page 20 of 95
2. ESCHEAT
1(1): Where any property has become the property of the Crown by reason of the person entitled thereto having died intestate and without lawful heirs, or has become forfeited for any cause to the Crown, the Public Guardian and Trustee may cause possession thereof to be taken in the name of the Crown, or, if possession is withheld, may cause an action to be brought for the recovery thereof, without an inquisition being first made. 3: The Lieutenant Governor in Council may (Other option is adding it to public treasury and spend it on public interest) grant any property that has become the property of or has become forfeited to the Crown as mentioned in section 1, or any part thereof, or any interest therein, to any person for the purpose of [1] transferring or restoring it to a person having a legal or moral claim upon the person to whom it had belonged, or of [2] carrying into effect any disposition of it that such person may have contemplated (ex. Negotiated gift with UWO), or of [3] rewarding a person making discovery of the escheat or forfeiture, as to the Lieutenant Governor in Council seems proper. [Loco parentis If you treat someone as though they were your child you stand in the place of a parent.] 6.(1): The Public Guardian and Trustee may transfer, assign or discharge, at such price and on such terms as seem proper, all or any part of any interest in real property of which he or she has taken possession under this Act. (2) Where possession of any personal estate has been taken by the Public Guardian and Trustee under this Act, he or she may sell it at such price and upon such terms as seem proper. If they elect not to do any of the things in this last section, they can sell it 7(1): When property has escheated or become forfeit to the Crown because of the dissolution of a corporation, (a) The Public Guardian and Trustee is not required to secure, maintain or manage the property or to take any other action in relation to the property; and (b) No proceeding shall be commenced and no order shall be made against the Public Guardian and Trustee in respect of the property.
Adoption and the Succession Law Reform Act: How does adoption impact the SLRA intestacy rules? S. 158 of the Child and Family Services Act, R.S.O. 1990, c.C.11: Subs. 158(1): In this section, adopted child means a person who was adopted in Ontario (2): For all purposes of law, as of the date of the making of an adoption order, (a): The adopted child becomes the child of the adoptive parent and the adoptive parent becomes the parent of the adopted child; and (b): The adopted child ceases to be the child of the person who was his or her parent before the adoption order was made and that person ceases to be the parent of the adopted child, except where the person is the spouse of the adoptive parent For purposes of the intestacy rules, you would be treated as though you were a naturally-born child If B gives birth to C then marries A, if A and B marry, then B will still be child of B as well If A never adopted C and died intestate, then C wouldnt get anything. But if B got it then B died, it would go to C
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3. FREEHOLD ESTATES
Freehold Estates
Freehold: Estate in property with indefinite termination point 3 Freehold Estates: Category of Freehold Estate Fee Simple Estate
Fee Tail Estate
Life Estate
Duration What we ordinarily think of ownership. Estate continues as long as grantee or general heirs of grantee are alive. (aka continues until it escheats) General heirs = descendants (both lineal and collateral) and ascendants. Potential to last forever. Estate continues as long as grantee or special heirs of grantee are alive. Special heirs = descendants (lineal only) only passes to lineal descendants. Potential to last forever BUT ends w/death of estate holder w/no lineal ds. Very uncommon. Cant create them in Ontario. Statute says they can exist if created before a date, but if try to create them now they will become a fee simple. Estate continues as long as grantee or a 3rd party is alive (life estate pur autre vie: Measured by life of another) until measuring life dies. Limited (but uncertain) duration since it ends w/death Not an inheritable estate b/c generally cant pass it on in will since it ends w/death BUT possible for it to be measured by longer living 3rd partys life so it could continue and be passed. Life If you own fee simple, can carve out from that a life estate for someone. Can do 2 things: provide to A for life OR to A or life of B. 2nd is life estate held by A that lasts until B dies.
Grants of Estates in Land Estates in land may be created/transferred by grants or devises Grant: Creation or transfer of rights nad obligations in property; general term including transfer by gift OR sale (P. 138) Devise: Grant of real property by will (p. 136) or intestacy Same as grant but takes effect on debt Issue- Given Quia Emptores, why are we concerned with both the CREATION and TRANSFER of estates in land? Didnt Quia Emptores preclude tenants from CREATING new estates? Quia Emptores halted the lengthening of the feudal pyramid by prohibiting subinfeudation Q.E. simply prohibited tenants from granting new fee simple estates to lower tenants Q.E. did NOT preclude tenants from granting other estates So tenants remained able to grant life estates/ fee tail estates in respect of lands held of a superior lord Statute precluded people from creating fee simple estates, didnt stop them from carving out a lesser estate. Fee simple lasts forever, so can carve life estate into fee simple Pre Quia Emptores: Grant may result in one of a: a. Creation of a new fee simple/fee tail or life estate; OR b. Transfer of fee simple/fee tail/ or life estate Post Quia Emptores: Grant may result in a: a. Creation of new fee tail/life estate (but NOT fee simple estate); OR J. Alter Page 22 of 95
Property Summary SPRING 2010 b. Transfer of fee simple/fee tail/ or life estate Dissection Common Law Grants Vernacular of grants breaks down into 2 key components: A. Words of Purchase B. Words of Limitation Category Words of Purchase
3. FREEHOLD ESTATES
Words of Limitation
Description Words identifying purchaser of estate (e.g., the donee / transferee for consideration) To whom an estate is being conveyed To my friend, A To my spouse, B To the party of the first part Words limiting the size (e.g., duration) of estate being granted. Fee simple, fee tail or life estate To my friend, A, and his heirs. Fee simple estate is transferred to A. Nothing to heirs. To the party of the first part and the heirs of his body. To my spouse, B, for life. Does NOT describe person to whom an estate is being granted (DArundels Case (1225) (p. 241 Mossman 2nd ed.)
1. Fee Simple Estates

Fee: Estate that is inheritable (May continue after initial grantees death) Simple: Inheritable by whom (general heirs- i.e. Descendants, both lineal and collateral, and ascendants) Duration of estate = As long as initial grantee + Any general heir of initial grantee is alive Fee Simple: Fee simple in free and common soccage Most common way today to hold interest in land (p. 238 Mossman) Largest estate known to the law (Ziff, p. 154) Wasinghams Case (p. 11): He who has a fee simple in land has a time in the land without end, or the land for a time with end
Fee Simple v. Ownership Is fee simple in free and common soccage the functional equivalent of ownership? Bears some important similarities (Mossman, p. 238) No tenurial services/special incidents of tenure Possibility of perpetual duration But there remains slim possibility of escheat But is escheat properly understood as an incident of tenure or merely a pragmatic necessity where a person dies intestate with no heirs? Two contexts to consider: 1. Grant to an individual a. Inter vivos b. Testamentary J. Alter Page 23 of 95
Property Summary SPRING 2010 2. Grant to a corporation
3. FREEHOLD ESTATES
1. Grant to an Individual INTER VIVOS: CL imposed stringent technical requirements re inter vivos grants of fee simple estate to individuals Life estate only unless magical words used Stringent requirements b/c: Presumption of Life Estate: Life estate was initially the only freehold granted, and was preferable to lords b/c duration was limited to life of grantee So CL favoured creation of life estates by restricting inter vivos fee simple grants with stringent technical requirements Incidence of Processional Assistance: Inter vivos grants (unlike testamentary) were frequently prepared with professional assistance Stringent requirements seen to be appropriate CL required specific WORDS OF LIMITATION for inter vivos fee simple grants to individual: To X and his/her heirs To X and heirs To X and Y and their heirs Statutory Reform: CL Rules for inter vivos grants modified by statute Conveyancing and Law of Property Act- S. 5: Presumption of life estate replaced with presumption of conveyance of entire estate held by grantor (so start w/ presumption of fee simple) 5. (1) In a conveyance, it is not necessary, in the limitation of an estate in fee simple, to use the word heirs. (2) For purpose of such limitation, it is sufficient in a conveyance to use words in fee simple or any other words sufficiently indicating limitation intended (3) Where no words of limitation are used, the conveyance passes all the estate, right, title, interest, claim and demand that the conveying parties have in, to, or on the same. (4) Subsection (3) applies only if and as far as a contrary intention does not appear from the conveyance, and has effect subject to the terms of the conveyance and to the provisions contained therein. [If you say no words of limitation, you transfer everything. But (4) Says the rule doesnt apply where theres a contrary intention] (5) This section applies only to conveyances after the 1st day of July, 1886 Grant X to A. X to A forever and ever. X to A in fee simple. X to A and his heirs. Common law Life estate Life estate Life estate Fee simple After July 1, 1886 Fee simple Fee simple Fee simple Fee simple
Issue to consider: Mesne Lord granted estate to X with the following language- To X and his heirs
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Property Summary SPRING 2010 X alienated the resultant estate in fee simple to Y What is the duration of the estate acquired by Y? Measuring life changes as estate transfers (??)
3. FREEHOLD ESTATES
TESTAMENTARY: CL courts (unlike Chancery) initially did not enforce devises of land Statute of Wills (1540) required CL courts to enforce them Gave the ability to grant estates in land for the 1st time (even without the magic words, courts could recognize fee simple estates if they could find clear intention that grantor intended as such- ONLY FOR TESTAMENTARY- Still needed magic words for inter vivos) Testamentary- How land is transmitted upon death CL took more flexible approach w/ devises b/c: a. Test grants often prepared without professional assistance; AND b. Test grants cant be rectified ex post facto Sufficient if testamentary grant made clear INTENTION to grant fee simple estate. No necessity to use magic words BUT testamentary intention must be clear. If there is no clear intention, then grantee only gets life estate Examples: a. To X forever b. To X and his/her issue (debatable) c. To X in fee simple d. To X to dispose at will and pleasure Statutory Reform: CL rules for devises modified by statute in mid-19th C. Succession Law Reform Act- S. 26: 26. Except when a contrary intention appears by the will, where real property is devised to a person without words of limitation, the devise passes the fee simple or the whole of any other estate or interest that the testator had the power to dispose of by will in the real property Dont have to use the words fee simple. If no words of limitation, entire estate is transferred. Presumption of life estate has become presumption of conveyance of entire estate Devise Common law SLRA To X and his heirs. Fee Simple Fee Simple To X. To X in fee simple. To X forever. Life Estate Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple
Once it was established that the words and heirs in a grant were words of limitation (describe the size of estate granted), it did not matter whether A or any successors in title failed to produce heirs The heirs had no rights under the grant anyway This did not mean that they could never have rights; After passage of Quia Emptores and the Statute of Wills, A could give them rights in an inter vivos grant or by will
2. Grant to a Corporation CL Rule: Corporation cannot die or leave surviving heirs the ONLY freehold that corporation can hold is fee simple estate (Megarry & Wade, p. 48) No words of limitation necessary (i.e. To X inc.) Just b/c you cant give a life estate to a corporation for its life, doesnt mean you cant give it an estate based on the life of another J. Alter Page 25 of 95
3. FREEHOLD ESTATES
i.e. To X Inc. for the life of Parachin Life estate pur autre vie Disrupted feudal pyramid and lords didnt like it so enacted Mortmain Statutes Mortmain statutes at one time restricted ability of corporations/charities to hold estates in land (p. 4) Sought to limit ability of corps to hold land b/c they couldnt die Mortmain = Dead hand Concern was that potential for perpetual existence of corporation allowed lucrative incidents of tenure (i.e. Relief and escheat) to be evaded Even if you use the language of death to describe the end of a corporation, it wont happen as at certain of a time as it will for persons End of corporation typically called DISSOLUTION Modern corporate statutes empower corporations to hold estate in land by affording corporations the power of a natural person Corporation has the capacity and the rights, powers and privileges of a natural person (s.15 OBCA) This extends to holding estates in land Ability of charities to hold estate in land remains restricted to this day Charities Accounting Act, R.S.O. 1990: Until 2009, s.8 of the Act read as follows: 8. (1) A person who holds land for a charitable purpose shall hold the land only for the purpose of actual use or occupation of the land for the charitable purpose Uncertainty existed as to what was meant by actual use or occupation What if the charity leased the land to a tenant? In December 2009, s.8 of Charities Accounting Act was modified to read as follows: 8. A person who holds an interest in real or personal property for a charitable purpose shall use the property for the charitable purpose Significance of Ss. 2(1) of Estates Administration Act to Succession of Fee Simple Estates: Statute of Wills (1540) enabled fee simple estate holders to effect devises of the estate Ss. 2(1) of Estates Administration Act is the modern statutory provision directing how fee simple estates are transferred on death 2. (1) All real and personal property that is vested in a person without a right in any other person to take by survivorship, on the persons death, whether testate or intestatedevolves to and becomes vested in his or her personal representative from time to time as trustee for the persons by law beneficially entitled thereto Personal representative defined in s.1 to include executor and administrator Without a right of any other person to take by survivorship, you can hold property in joint tenancy and when one tenant dies, it passes automatically to the other tenant (it does not go into their will etc.) If you die with will, person that administrates estate is EXECUTOR; if die without a will, its an ADMINISTRATOR But how is it determined what persons are beneficially entitled thereto? If person dies testate Look to provisions of will If person dies intestate Look to intestacy provisions of Part II of Succession Law Reform Act
Remainders and Reversions Necessary to introduce remainders and reversions before considering fee tail and life estates Fee tail/Life estates are particular estates b/c theyre just a part of the larger fee simple estate (i.e. Less than or a particle of a fee simple estate) J. Alter Page 26 of 95
3. FREEHOLD ESTATES
Fee tail/ Life estates may be conceptualized as being LESSER ESTATES carved out of a FEE SIMPLE estate Fee simple is the largest estate in land known to CL If you give lesser estate, then you have not transferred all the property in the land; You have kept something back Example: A holds estate in fee simple in Greenacre. A grants B a life estate in Greenacre (To B for Life.). Life estate is smaller than/less than a fee simple estate Size determined by time (p.12) Fee simple has potential to last longer than life estate As grant of life estate to B has not transferred the ENTIRE estate held by A to B Remainder/Reversion explain what is left If you plot it as a timeline Fee simple goes across whole page, life estate only goes half-way across, and the rest is the remainder
A. Reversion: (Presumed) Reversion: What grantor (i.e. A) retains during the particular estate (i.e. Life estate granted to B) A holds estate in fee simple in reversion (p.16) Reversion connotes idea that land Reverts to grantor Estate reverts back to grantor when life estate ends Fee simple in reversion When life estate ends, A will become vested in the land again Reversion is presumed where grant is silent as to what happens after particular estate Reversion were also formerly imposed by the now abolished Doctrine of Worthier Title (p.20) B. Remainder: Remainder- Estate that goes to remainderperson at end of prior particular estate REMAINDERPERSON: Person identified by grantor as such in grant To A for life with remainder to B and his heirs A holds life interest and B holds fee simple in remainder Remainder connotes idea that land remains away from grantor (p.16) Instead of reverting back to grantor when life estate ends, grantor can appoint a remainderperson In this example, grantor retains nothing To B Words of purchase; And his heirs Words of limitation
2. Fee Tail Estates

Passes automatically by operation of law to your lineal descendants upon death Will come to an end as soon as the person holding that estate dies without any lineal descendants Problem with fee simple estate The moment you transfer fee simple to your son, he is at liberty to liquidate and go gamble with the money, but land used to be an indicator of wealth so ppl wanted to keep it within the family Created fee tail so that land would automatically transfer to lineal descendants indefinitely (based on prescribed formula of law) AKA ESTATE TAIL (Anger & Honsberger) Fee- Estate is inheritable (May continue after initial grantees death Tail- Denotes inheritable by whom (Special heirs- Lineal descendants only) (Megarry and Wade) Duration of estate = As long as initial grantee or any special heir of initial grantee is alive
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3. FREEHOLD ESTATES
Grantors desired estates in land that would AUTOMATICALLY pass to lineal descendants of grantee upon death of initial grantee (Megarry and Wade) Idea was to grant an estate that would NECESSARILY be held by lineal descendants of grantee in PERPETUITY (or at least for so long as lineal descendants were living) Grantors required an estate in land that could NOT permanently be freely alienated by grantee outside of grantees family Notwithstanding any alienation by the donee, the land would descend to his issue on his death and would revert to the donor when the donee and all his issue were dead Tenant in Tail- Holder of fee tail estate Entail- Line of heirs of fee tail estate Entailed- Land subject to fee tail estate CL courts frustrated desire of grantors to establish such estates (p. 13-14) To A and the heirs of his body Intended to create an estate that would pass to As LINEAL DESCENDANTS and terminate on death of last to die of As lineal descendants, but CL courts interpreted such grants as establishing a fee simple grant conditional upon A having issue Upon birth of As issue (i.e. The satisfaction of the condition), CL courts regarded A as holding a fee simple estate (p.14) Subinfeudation or alienation then possible by A This was the precise outcome grantors were trying to avoid Statute De Donis Conditionalibus (1285): Fee tail estate was a consequence of Statute De Donis onditionalibus (1285) This statute sought to give effect to intentions of grantor Fee tail estate (NOT fee simple) created where the words of limitation used in the grant restrict heirs to lineal descendants i.e. To X and the heirs of his body. Grantee of fee tail estate held the estate only for his lifetime Upon death of grantee, 2 possibilities: A. Estate AUTOMATICALLY passes to surviving lineal descendant B. Estate terminates if no surviving lineal descendant Estate then passes to remainder persons (i.e. Remainder interest) Estate reverts to initial grantor (his estate) (i.e. Reversionary interest) Did this mean that fee tail estate could not be alienated by grantee? No Grantee (A) of fee tail estate could alienate his interest to B, even if B is not a member of family BUT- Bs interest would terminate upon death of A, since estate then automatically passes to As lineal descendants or reverts to initial grantor B, in effect, could only acquire a life estate pur autre vie (for the life of A)
Creation of Fee Tail Estate Two Contexts: A. Inter Vivos B. Testamentary A. Inter Vivos: CL required specific words of limitation to create fee tail estate To X and the heirs of his body Words of limitation must restrict heirs to lineal descendants (Megarry & Wade) Does NOT include collateral descendants like cousins J. Alter Page 28 of 95
3. FREEHOLD ESTATES
But- not absolutely necessary to use phrase heirs of the body (Anger & Honsberger) Ex. Of his flesh, of him proceeding etc. Variations of the words of limitation were possible depending upon the type of fee tail estate being established Description To X and the heirs of his body. Estate continued if X and any lineal descendant was alive. To X and the heirs of his body with Y. Estate continued if X and any lineal descendant of X conceived with Y was alive. To X and the male heirs of his body. Estate continued if X and any male lineal descendant of X was alive. To X and the female heirs of his body. Estate continued if X and any female lineal descendant of X was alive. To X and the male heirs of his body with Y. Estate continued if X and any male lineal descendant of X conceived with Y was alive. To X and the female heirs of his body with Y. Estate conceived if X and any female lineal descendant of X conceived with Y was alive.
Type of Fee Tail Estate Fee tail general. Fee tail special. Fee tail male. Fee tail female. Fee tail male special.
Fee tail female special.
As with fee simple, the words and the heirs of the body do not give direct descendants a share in the estate- the words simply identify the duration of the estate that is granted to A Because the estate is fee tail, not fee simple, A cannot convey a fee simple- only a life estate for As life (i.e. Pur autre vie) On As death, if A has children, the estate goes to them; If A has no children, or if As direct line of succession dies out in the future, the estate reverts to the original grantor B. Testamentary: Courts more lenient than was true of inter vivos grants Courts will look to will as a whole to discern intent of testator Demise of Fee Tail Estates Even after Statute De Donis Conditionalibus, courts not supportive of fee tail estates Courts developed elaborate doctrines pursuant to which fee tail estates could be barred (enlarged to a fee simple) Fee Tail Estates Today Fee tail estates may still exist b/c theyve never been retroactively abolished BUT no longer possible to grant a fee tail estate (inter vivos or testamentary) Conveyancing and Law of Property Act- S. 4: 4. A limitation in a conveyance or will that before the 27th day of May, 1956, would have created an estate tail shall be construed as an estate in fee simple or the greatest estate that the grantor or testator had in the land Why was the creation of new fee tail estates prohibited?
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Fee tail estates for all practical purposes inalienable All that a person hold a fee tail estate has is an estate for their lifetime All they can sell to someone is a life estate for the length of sellers life- Upon death of seller, the land passes to sellers heirs automatically Development of land subject to fee tail estate unlikely Frustrates the development of land b/c you expend capital to develop the land but it passes to someone else Led to inefficient use/underdevelopment of the land
Significance of Ss.2(1) of Estates Administration Act to Succession of Fee Tail Estates: Limited application today!! Ss. 2(1) of Estates Administration Act does NOT apply to fee tail estates [2.(3) This section does not apply to estates tail+ All real and personal property Have to carve out Fee Tail Estates from statutory provisions to make it distinct from fee simple Twofold consequence: 1. Will of tenant in tail does not direct the succession of a fee tail estate 2. Intestacy provisions of Part II of Succession Law Reform Act do NOT apply to estates tail
3. Life Estates
Life Estate- Estate in land that lasts only for the life of a person i.e. To A for life Free hold estate that is NOT inheritable (But see s.2(a) of the Succession Law Reform Act) One commentator suggests fee simple estate evolved from life estate (p.237 Mossman) Lords adopted practice of allowing heir of life tenant to hold estate (upon payment of relief) after death of life tenant As practice became more common/formalized, life estate begot fee simple estate Life estate remains today a distinct estate Classification of Life Estates
Life Estate
Arising By Intention
Arising By Operation of Law
Life Estate pur sa vie
Life Estate pur autre vie
Curtesy
Dower
Originally Created
Transfer of life estate pur sa vie
Life Estate Arising by Intention Life estate pur sa vie
Description Pur sa vie = for his or her life To A for life. Life estate terminates upon death of A.
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Property Summary SPRING 2010 Life estate pur autre vie
3. FREEHOLD ESTATES Pur autre vie = for another life Original created: To A for the life of B. Transfer of life estate pur sa vie: To B for life. B may then alienate Bs life interest to A Life estate terminates upon death of B.
Cestui Que Vie: Cestui Que Vie- He who lives Person designated as measuring life for life estate In case of life estate pur sa vie, the cestui que vie = Life tenant of the life estate To A for life A = Cestui que vie (measuring life) In case of life estate pur autre vie, the cestui que vie = Person other than tenant of the life estate To A for the life of B To B for life (subsequently alienated by B to A) B = Cestui que vie Life Estate Arising by Operation of Law Curtesy Description
Right of widower to life estate in 100% of freehold estates of inheritance (fee simple/tail) of which wife solely seised at time of death. (Anger & Honsberger) Contingent upon birth of issue from marriage (but no requirement for issue to survive wife). (p. 208 Anger & Honsberger 2nd ed.) Solely seised exempted joint tenancies from curtesy Abolished as of March 31, 1978 by s. 48 of Succession Law Reform Act, R.S.O. 1990, c. S. 26. Abolishment was not retroactive Dower Right of widow to life estate in 1/3 of freehold estates of inheritance (fee simple / tail) of which husband solely seised at any time during marriage. Not contingent on existence of issue of marriage. Solely seised exempted joint tenancies from dower. Could apply to estates in land alienated inter vivos by husband without wifes consent. Abolished as of March 31, 1978 by s. 70 of Family Law Reform Act, S.O. 1978, c. 2. Abolishment was NOT retroactive. So wife could bring dower claim against any estate held at any time during the marriage. Wife needed to remit dower claim in order to have no claim in future. Tenancy by the curtesy and dower have been abolished the Canadian CL jurisdictions and replaced with protections given under family property and homestead legislation Creation of Life Estates at Common Law Life estate presumed at CL Failure to use language associated w/ grant of fee simple/fee tail necessarily resulted at CL in life estate MAGIC WORDS: To A for life. To A. To A in fee simple. J. Alter Page 31 of 95
Property Summary SPRING 2010 To A forever. To A in fee tail.
3. FREEHOLD ESTATES
Statutory Reform: Conveyancing and Law of Property Act- S. 5 & Succession Law Reform Act- S. 26 Altered CL rules No words of limitation = Entire estate held by grantor conveyed/devised Grantor who holds estate greater than a life estate should make explicit the intention to grant only a life estate (i.e. To A for life) What Happens upon Death of Cestui Que Vie? Life estate terminates If remainder interest created, land will pass to remainderperson If remainder interest not created, land will revert to initial grantor (his estate) Disappearance of Cestui Que Vie? A- Who holds estate in fee simple- grants life estate pur sa vie to B. B alienates life estate to C. When held by C, life estate is a life estate pur autre vie b/c B is the cestui que vie What happens if B disappears? Conveyancing and Law of Property Act- S. 46-47: 46. If a person for whose life an estate is granted remains out of Ontario or absents himself or herself therefrom for the space of seven years together so that it cannot be ascertained whether he or she is alive or dead and no sufficient proof is made of the life of such person in any action commenced for recovery of such estate by the lessor or reversioner, the person upon whose life such estate depended shall be accounted as naturally dead, and in every action brought for the recovery of the estate by the lessor or reversioner or his or her heirs or assigns, judgement shall be given accordingly. Remains out of Ontario OR absents himself therefrom (Whats the difference between these 2? Which one does the 7 year requirement modify? Its foggy, but likely intended to modify both Years must be cumulative 47. If a person is evicted out of land by virtue of section 46, and if afterwards the person upon whose life such estate depends returns to Ontario, or in any action to be brought for recovery of the same, is shown to be living or to have been living at the time of the eviction, the tenant or lessee who was ousted or his or her executors, administrators or assigns, may re-enter, repossess, have, hold and enjoy the land in his or her former estate, for and during the life, or so long a term as the person upon whose life the estate depends is living, and also shall, upon action to be brought by him or her against the lessor, reversioner, tenant in possession or other person, who, since the time of the eviction, received the profits of the land, recover for damages the full profits thereof, with lawful interest for, and from, the time that he or she was ousted and kept or held out of the land by such lessor, reversioner, tenant in possession or other person, whether the person upon whose life such estate depends is living or dead at the time of bring the action. Deals with what happens when person deemed dead comes back The persons who were given the estate now have to pay rent for the lost use of that land during that time Death of Life Tenant Pur Autre Vie: A- Who holds estate in fee simple- rants life estate pur sa vie to B. B alienates the life estate to C. When held by C, life estate is a life estate pur autre vie (b/c B is the cestui que vie) J. Alter Page 32 of 95
3. FREEHOLD ESTATES
What happens if C (the life tenant) predeceases B (the cestui que vie)? Succession Law Reform Act- S. 2: Allows for devise of life estate pur autre vie 2. A person may by will devise, bequeath or dispose of all property(whether acquired before or after making his or her will) to which at the time of his or her death he or she is entitled either at law or in equity, including, (a) Estates for anothers life, whether there is or is not a special occupant and whether they are corporeal or corporeal hereditaments; You can dispose in your will a life estate pur autre vie of an estate that continues after your death. All that the heir of the life estate will inherit is the life estate that will still terminate on the death of the measuring life (??)
Rights and Duties of Life Tenant: B/c life estate is a particular estate, it will be followed by another estate in remainder or reversion Law provides for rights/duties of life tenant in order to protect the estate in remainder/reversion Settled Estates Act, 1990- S. 7: Supplements CL Rules: Right of Life Tenant Description Right of occupation. Right of enjoyment. Right to Emblements. Duty of Life Tenant Duty to pay tax Life tenant has right to occupy land to exclusion of remainderperson and reversioner. Life tenant may exclude remainderperson / reversioner from physical access to land. Right to rents from the land during life estate. Right to alienate life estate. A.K.A. doctrine of emblements. Life tenant has right to crops sown annually even if crops not harvested at time of death of cestui que vie. Limited to crops sown annually for present profit. excludes fruit trees, grass, etc. b/c those are for future profit. Applies equally to tenant pur sa vie and pur autre vie. Chattels attached as fixtures by life tenant may be removed at termination of life estate. Must be capable of being removed without substantial damage.
Right to Fixtures
Duty to insure Duty to pay interest on encumbrances.
Description Life tenant must pay annual property taxes. Maximum amount for which life tenant liable is annual FMV of land. Duty extends to other current expenses (heat, hydro, etc.) Life tenant does NOT have a duty to insure the land. If land subject to mortgage, life tenant must pay the interest. Remainderperson / reversioner obligated to pay principal.
Doctrine of Waste Waste- Conduct that permanently alters the nature/value of the land (Alters doesnt necessarily mean diminish- Could improve the land) To protect remainderperson/reversioner, life tenant committing waster may be liable for damages to remainderperson/reversioner J. Alter Page 33 of 95
Property Summary SPRING 2010 4 Categories of Waste: 1. Ameliorating Waste 2. Voluntary Waste 3. Permissive Waste 4. Equitable Waste
3. FREEHOLD ESTATES
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Property Summary SPRING 2010 Category of Waste Ameliorating Waste
3. FREEHOLD ESTATES
Description Conduct that improves the land. Life tenant NOT liable for ameliorating waste. Life tenant cant force remainderperson / reversioner to pay. Waste arising from omission to maintain land- Failing to do what a prudent owner would do to maintain the property Life tenants are NOT liable for permissive waste, although they are ordinarily responsible for current expenses/routine maintenance (ie. Cutting grass, ensuring snow doesnt build up and cause damage to roof etc.) E.g., allowing buildings to become dilapidated. Conduct that diminishes value of land Life tenants ARE liable for voluntary waste Examples include mining / cutting timber. BUT No absolute rule against mining / cutting timber. Life tenant may mine an existing mine (but cannot open a new one). Life tenant may cut timber in limited circumstances: To allow cultivation of land If estate is kept for purpose of producing saleable timber To use wood for repair / construction on the estate To alienate wood to raise funds for repair / construction Wanton, or malicious destruction. Sub-category of voluntary waste. Name derives from imposition of liability for this category of waste by equitable courts. Equitable courts would not allow life tenant to commit equitable waste even if grant excused liability for waste.
Permissive Waste
Voluntary Waste
Equitable Waste
Historically, automatic liability for waste was restricted to life estates created by operation of law Idea was that grantor of life estate should explicitly provide for liability for waste if this is his intention Conveyancing and Law of Property Act S. 29: Life tenant liability for waste now automatic 29. A dowress, a tenant for life or for yearsare impeachable for waste and liable in damages to the person injured Sinclair suggests no automatic liability for permissive waste: Life tenants are not liable for permissive waste, although they are ordinarily responsible for current expenses and routine maintenance, such as cutting the grass and ensuring that snow doesnt build up and cause damage to the roof (p.16) All leading texts concur that no liability for permissive waste unless grant explicitly imposes obligation to repair Difficult to reconcile w/ language of s.29 of Conveyancing and Law of Property Act: Grantor can excuse/exculpate life tenant of liability for waste (EXCULPATORY Clause) Sinclair suggests liability for equitable waste cannot be excused by grantor Cant exculpate for malicious destruction of land (i.e. Equitable waste) Even if the grant makes the life tenant unimpeachable (i.e. Not liable) for waste, the life tenant will be liable to the reversioner/ remainderperson for wanton and severe destruction (p.17) BUT- Liability for equitable waste may be excused if done so explicitly by grantor Page 35 of 95
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Property Summary 3. FREEHOLD ESTATES SPRING 2010 Conveyancing and Law of Property Act- S. 30: 30. An estate for life without impeachment of waste does not confer upon the tenant for life any legal right to commit waste of the description known as equitable waste, unless an intention to confer the right expressly appears by the instrument creating the estate. Unless your landlord explicitly states behaviour, you cant do it Successive Life Estates: Note that grant may create successive life estates To A for life, then to B for life, remainder to C
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4. SEISEN
Seisen
Rule in Shelleys Case
Where a grant of a life estate to A is followed in the same instrument (will or deed) by a grant mediately or immediately to As heirs, or heirs of the body, the grant of the remainder is transformed into a remainder in fee simple to the first grantee. (p. 18) Described as one of the deepest mysteries of the common law (p. 67 of OLRC Report On Basic Principles of Land Law) The rule applies only if the life estate and the remainder are of the same kind, that is, only if both are legal or both are equitable Example 1: Life Estate Followed Immediately by Remainder to Life Tenants Heirs: To X for life, remainder to Xs heirs. RSC requires that heirs be interpreted as words of limitation defining estate granted to X (p. 18) Heirs is NOT interpreted as words of purchase identifying Xs heirs as remainderperson Result: Read as saying To X for life, remainder to X AND HIS HEIRS So X ends up getting 2 estates: (1) Life estate and (2) Remainder in fee simple Doctrine of Merger- When you hold 2 estates, the lesser one merges into the greater estate X holds an immediate fee simple Xs heirs receive nothing under the grant X may nevertheless grant estate to heirs under a separate grant Example 2: Life Estate Followed Mediately by Remainder to Life Tenants Heirs: To X for life, then to Y for life, remainder to Xs heirs RSC requires heirs be interpreted as words of limitation defining estate granted to X Heirs is NOT interpreted as words of purchase identifying Xs heirs as remainderperson Result: Read as saying To X for life, then to Y for life, remainder to X AND HIS HEIRS (i.e. X gets life estate, Y gets life estate, and X gets a fee simple estate) X receives 2 estates: (1) Life estate, (2) Remainder in fee simple Doctrine of Merger does NOT apply here b/c of successive life interest to Y (p.19) If merged the 2, it would destroy the life estate for Y X holds an immediate life estate and will hold fee simple estate upon death of Y More literally: Xs estate will receive fee simple estate upon death of Y Xs heirs receive nothing under the grant Remainder will vest in possession of Xs estate upon death of Y Xs personal representative will distribute remainder pursuant to terms of either Xs will or intestacy rules How Can We Account for RSC? RSC was attempt to shutdown tax avoidance plans promoted in feudal era Certain incidents of tenure were analogous to estate tax on death
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4. SEISEN
Ex. Relief was monetary payment to secure lords approval for inheritable estate to pass to heirs on death But: Relief was inapplicable to inter vivos grants Estate holders avoided relief by passing estates to heirs via inter vivos grant Consider following inter vivos grant made by A: A to B for life, remainder to Bs heirs Prior to RSC, Bs heirs would acquire by this grant a remainder in fee simple Relief not applicable at time of grant or at death of B b/c fee simple to Bs heirs conveyed inter vivos by A Fine applied to inter vivos context, but fine abolished by Quia Emptores Consider following inter vivos grant made by A: A to A for life, remainder to As heirs Prior to RSC, A would retain a life estate and As heirs would acquire by this grant a remainder in fee simple Relief not applicable at time of grant or at death of A b/c fee simple to As heirs conveyed inter vivos by A Fine applied to inter vivos context, but fine abolished by Quia Emptores RSC sought to minimize the effectiveness of utilizing inter vivos grants to avoid payment of relief on death
Is RSC Good Law in Ontario Still? Re Rynard (1980): The rule in Shelleys Case is still part of the law of Ontario Many estate planners nevertheless unaware of RSC (Ziff & Litman in Shelleys Rule in a Modern Context: Clearing the Heir) England abolished RSC in Law of Property Act, 1925 Alberta court held RSC not applicable in Alberta (Re Simpson) Revisiting Sinclair Definition of RSC Where a grant of a life estate to A is followed in the same instrument (will or deed) by a grant mediately or immediately to As heirs, or heirs of the body, the grant of the remainder is transformed into a remainder in fee simple to the first grantee. (p. 18) Possibly misleading b/c this definition overlooks possibility that - prior to May 27, 1956 - R.S.C. could transform As life estate into a remainder in fee tail Example: Life Estate Followed Immediately by Remainder to LTs Heirs of the Body: To A for life, remainder to heirs of the body of A RSC requires that heirs be interpreted as words of limitation defining estate granted to A Heirs is NOT interpreted as words of purchase identifying As heirs as remainderperson Result: Assuming grant created prior to May 17, 1956, A receives 2 estates: (1) Life estate and (2) Remainder in fee tail As heirs receive nothing Proposed Revision to Sinclair Definition of RSC: Where a grant of a life estate to A is followed in the same instrument (will or deed) by a grant mediately or immediately to As heirs, or heirs of the body, the word heirs is interpreted as a word of limitation and not a word of purchase.
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4. SEISEN
This wording reflects possibility that RSC (at least prior to May 27, 1956) could transform life estate to EITHER fee simple or fee tail estate
RSC as a Rule of Law- Not Construction RSC is a rule of law NOT a rule of interpretation RSC does NOT seek to give effect to grantors intentions BUT- Grantors intentions relevant to determine whether RSC applies: [W]hile the rule is a rule of law, and when applicable, may well defeat the testators intention, nevertheless it first has to be determined whether it is applicable and this involves a preliminary question of construction (Re Rynard) In short, determine what the grantors intentions were in order to determine whether RSC will apply to trump those intentions RSC applies only if the reference to the remainderpersons when read as words of limitation would have granted a fee simple/ fee tail estate to the life tenant under the CL rules Example: To A for life with remainder to the heirs of A. RSC applies b/c the words the heirs of A when read as words of limitation would have granted an estate in fee simple to A under CL rules So, To A and the heirs of A = Fee tail estate at CL Example: To A for life with remainder to the heirs of the body of A RSC applies b/c the words the heirs of the body of A when read as words of limitation would have granted an estate in fee tail to A under CL rules So, To A and the heirs of the body of A = Fee tail estate at CL Example: To A for life with remainder to the children of A (p.19) Application of RSC here is a question of construction What did grantor mean by children of A? If evidence demonstrates grantor really meant heirs of A/heirs of the body of A, then RSC applies Courts will look to evidence of grantors intentions in context of a DEVISE Idea is not to give effect to grantors intentions but to determine whether RSC applies so as to override grantors intentions To A and his Children wouldnt be fee tail b/c fee tail applies to all lineal descendants whereas children limits it to the first level RSC wouldnt apply (b/c doesnt mean all surviving heirs) Have to take into account what the intentions of the settler were in this case, to see if were going to defeat them Doctrine of Worthier Title (DWT) Statutorily abolished in Ontario Similar to RSC Transforms remainder to grantors heirs into a reversion to grantor Applicable to both inter vivos grants and devises
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Property Summary SPRING 2010 Example: A to B for life with remainder to the heirs of A DWT transforms remainder in fee simple to heirs of A into a reversion to A Intention is to preserve relief upon eventual inheritance of estate by heirs of A
4. SEISEN
Seisin
Seisin- Right to immediate possession of legal freehold estate in land Connects a freehold estate with the actual land Fundamental idea is the right to possession of land held by a freeholder (person holding freehold estate in the land) Recall: Freehold estate Termination event (but not termination date) determine Fee simple, fee tail, life estate
Does a person who has a right to possession of land necessarily have seisin? No Seisin was right to possession of land held by person holding freehold estate in the land Right to possession of land on some other basis ex. Lease- was NOT seisin A landlord will always have the seisin whereas the tenant under a lease is regarded as merely having possession (Anger & Honsberger) Right to possession of the land by someone holding an estate in the land Freeholder holds seisin during the period of the lease even though right to possession suspended during term of lease Attribution of seisin to freeholders who do not actually have possession renders difficult the task of defining seisin (Meagarry & Wade) Right to possession by freeholder is sufficiently clear definition for our purposes
Possession vs. Occupation of Land Seisin is defined with reference to possession of land by freeholder Welling contends use of the word possession in relation to land is confused Argues that possession is a form of property in things not land Welling prefers occupation over possession Significance of Seisin Significance of seisin is mainly historical: A. Tenurial Services/ Incidents of Tenure B. Transfer of freehold estate at CL A. Tenurial Services/ Incidents of Tenure: Tenurial services/incidents of tenure were enforced against person with seisin Feudal structure of landholding required certainty at all times regarding who was seised of the land CL abhorred an abeyance of seisin (not knowing who had it) CL became obsessed with having rules that made it always possible to say that guy holds seisin Reflected in the CL remainder rules in Chapter 8 No springing freeholds
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Property Summary SPRING 2010 B. Transfer of Freehold Estate at CL: CL historically insisted upon different methods of granting property in land Method required to effect grant varied with kind of property in land being granted Method required for freehold estates closely linked with concept of seisin
4. SEISEN
Orthodox Categorization Corporeal Hereditaments
Incorporeal Hereditaments
Method of Grant: Generally means freehold estates Property in land that may be held in possession Link in idea of seisin: holder of corporeal hereditaments may be seised of land Only method at CL to grant immediate freehold was feoffment by livery of seisin Physical transfer of the land. Tangible Has substance. Have freehold estate = have physical tangible interest in land. Non-possessory interests in land Holder of incorporeal hereditaments is not seised of land Easements (right of way on someone elses property), profits a prendre (right to access land to take something from it, ie. extract produce) Granted at CL by deed
Issue: Is the orthodox division between corporeal and incorporeal hereditaments conceptually sound? A corporeal hereditament is land and all physical matter which can be seen or handled which is a part of or affixed to land An incorporeal hereditament on the other hand, is a right growing out of or concerning or annexed to a corporeal thing It is not the corporeal thing itself but something collateral thereto It is a mere right as opposed to the physical object (Anger & Honsberger) Division seems to conflate distinction between property in land and land (Welling) Land is tangible Property in land is not tangible All real property thus relates to rights annexed to a corporeal thing Feoffment by Livery of Seisin (Transfer of freehold at CL) Feoffment- Transfer of title to real property (p. 137) Feoffor: Transferor Feoffee: Transferee Livery of Seisin- Public ritual to effect feoffment (p. 139) Feoffee became seised of land through actual physical transfer Reflective of CL view that freehold is corporeal or tangible in nature Sincre freehold = Corporeal, it must be PHYSICALLY transferred
CL Exceptions to Livery of Seisin: Livery of seisin ONLY method at CL to grant immediate freehold BUT, other methods did exist to grant non-immediate freehold: a. Lease Release method (dont need to know this) J. Alter Page 41 of 95
Property Summary 4. SEISEN SPRING 2010 b. Remainders & Reversions O holds an estate in fee simple; O makes the following grant- To A for life with remainder to B and his heirs Grant of life estate to A is effected by feoffment by livery of seisin But how will seisin be transferred to B upon death of A? Does there need to be a second feoffment by livery of seisin upon death of A? No Second feoffment by livery of seisin NOT necessary upon death of A: On As death, seisin transfers to the remainder person w/o necessity for a new feoffment The owner of the fee simple has transferred seisin to A, the life tenant in a ceremony of livery of seisin. That ceremony suffices for all grants in the same conveyance A then takes the seisin for himself, for life, and as a sort of conduit for B What if, during the lifetime of A, B wishes to transfer his remainder interest to C? Would this require a feoffment by livery of seisin? If so, B will be unable to effect the transfer b/c A is seised of the land B may, during As lifetime, transfer remainder in fee simple to C by DEED CL did not require a second feoffment by livery of seisin Relevance of Seisin Today: CL remainder rules continue to apply Seisin continues to be relevant to extent that concerns over seisin are reflected in CL remainder rules Land is now held in free and common soccage Concerns of lords re abeyance of seisin no longer a practical problem Curtesy and Dower defined with reference to seisin BUT curtesy and dower have been abolished (although not retroactively) Statutory Reform: Statutory reforms have ensured that grants of freehold no longer effected by feoffment by livery of seisin 1. Conveyancing and Law of Property Act, R.S.O. 1990, c. C. 34. 2. Statute of Frauds, R.S.O. 1990, c. S. 19. 3. Registry Act, R.S.O. 1990, c. R. 20. 4. Land Titles Act, R.S.O. 1990, c. L. 5. 5. Land Registration Reform Act, R.S.O. 1990, c. L.4 1. Conveyancing and Law of Property Act 2. All corporeal tenements and hereditaments, as regards the conveyance of the immediate freehold thereof, lie in grant as well as in livery if granting a corporeal hereditament, you can do that by deed or livery (2 options) 3. A feoffment, otherwise than by deed, is void and no feoffment shall have any tortious operation Deed is the only way to transfer You cant do it by way of feoffment 2. Statute of Frauds 1. (1) Every estate or interest of freeholdshall be made or created by a writing signed by the parties making or creating the same, or their agents thereunto lawfully authorized in writing, and,
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Property Summary 4. SEISEN SPRING 2010 if not so made or created, has the force and effect of an estate at will only, and shall not be deemed or taken to have any other or greater force or effect. 4. No action shall be broughtto charge any person upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them, unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing, and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party. If oral contract (no written) dealing with freehold estate, its dealt w/ like an estate at will Means the grantor can end it at any time Oral contract not enforceable If about land, contract has to be in writing Contract itself need not be in writing- it would be sufficient if there was some document that evidenced the contract (memo/note that evidences the verbal contract- see s.4) 3. Registry Act/ Land Titles Act Modern real property regime predicated upon land registration system Grants of estates in land are recorded in public land registration system rather than via eye witnesses to feoffment by livery of seisin 2 land registration systems in Ontario: a. Registry system under Registry Act b. Land Titles system under Land Titles Act Registration System Description Registry System Provides an inventory of instruments affecting title Necessary to research chain of title for preceding 40 years Established in 1795 Covers areas of Ontario where development occurred first (Southern Ontario and selected areas in northern Ontario) Provides statement of title (ie. this person owns life estate). Subject to certain exceptions, statement of title is guaranteed Part V of Land Titles Act establishes The Land Titles Assurance Fund to compensate those who rely to their detriment on statement of title. Established in 1885 More common in northern Ontario Registry System slowly being converted to Land Titles System
Land Titles System
4. Land Registration Reform Act In 1975, Ontario established POLARIS- Project of Ontario Land Registry Information System POLARIS culminated in Land Registration Reform Act Aims to convert all conveyancing documents to electronic format Miscellaneous Issues We have defined fee simple estate as follows: Estate in land which continues for so long as grantee or general heirs of grantee (descendants- both lineal and collateral- and ascendants) are alive We have defined escheat as follows: Process whereby property reverts to the Crown in right of province if an estate holder dies intestate and is not survived by a spouse, issue, parent, sibling, nephew, niece, or next of kin as specified in intestacy legislation Is there a disharmony between our definition of fee simple estate and our definition of escheat? If so, is this problematic? Perhaps the best way to frame fee simple estate is estate in land which continues until land escheats J. Alter Page 43 of 95
4. SEISEN
Is it necessary to revisit our definition of fee tail estate in light of our definition of escheat? Why or why not? No, our intestacy rules dont apply to fee tail estates S. 2(3) of Estates Admin Act expressly excludes fee fail Land descends to your heirs, not your spouse Fee tails cannot escheat (??)
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5. CONDITIONAL FREEHOLDS
Freehold Estates
Fee Simple Estates

Fee Tail Estates
Life Estates
AKA Qualified Estates Freehold estate that is subject to a condition A conditional estate is not a distinct species of estate but rather is a qualification of an estate
Two Basic Categories of Conditions: 1. Condition of Acquisition/Condition Precedent 2. Condition of Retention 1. Condition of Acquisition/ Condition Precedent Condition which must be satisfied before freehold estate vests in interest in grantee Grantee receives nothing unless and until condition is satisfied Described as a condition precedent Fee Simple Estate subject to condition precedent To X and his heirs upon X attaining the age of 21 years old [CL will not allow this, b/c it creates a period of time where there is no knowledge of who has seisin. Restricted situation of when you can use condition precedents for CL grants.]
Life Estate subject to To X for life upon X graduating law school (well drafted grant would specify what condition precedent the condition requires) Note that CL Remainder Rule 2 (no springing freeholds) diminishes circumstances in which it was possible at CL to grant a freehold estate subject to a condition precedent 2. Condition of Retention Condition which can truncate freehold estate i.e. A condition cutting down the size of the freehold estate Condition of acquisition speaks of satisfying form the start Condition of retention- You vest, but you have to continue to satisfy the certain condition, otherwise your form of property might come to an earlier conclusion than it otherwise would NB- If the estate holder alienates an estate which has a condition attached to it, then the condition follows the estate Estate Termination Date Fee Simple: (1) Date of death of the last to die of grantee, grantees spouse, and grantees To X and his heirs so long general heirs AND NOW as X remains married to Y (2) Date on which condition of retention ceases to be complied with (i.e. X no longer married to Y) Life Estate: (1) Date of death of the cestui que vie AND NOW To X for life so long as X (2) Date on which the condition of retention ceases to be complied with (i.e. X J. Alter Page 45 of 95
remains married to Y no longer married to Y) 2 Kinds of Conditions of Retention: A. Determinable Estate B. Condition Subsequent/ Defeasible Estate Distinction b/w the two can be difficult to draw in practice Distinction described as little short of disgraceful to our jurisprudence (Re Kings Trust) A. Determinable Estate Estate that will determine (i.e. Terminate) automatically upon happening of the specified (determining) event) Determining event is said to be part and parcel of the grant (p.28) i.e. Determinable estate bears the seed of its own destruction Idea is that there is embedded within the words of limitation a condition which terminates the estate (p. 305 Anger & Honsberger) Since the determining event inheres in the estate, the estate is said to terminate naturally upon the happening of the determining event (p.28) Upon the occurrence of the determining event, grant comes to end automatically and reverts to grantor or grantors estate MAGIC WORDS: While, Whilst, During, So long as, Until However, the magic words are neither necessary nor sufficient to create a determinable estate (intentions will take precedence over magic words) In the absence of other indications of the grantors intentions, courts have generally interpreted the following words as creating a determinable estate (p.28) The type of estate granted must be determined by a proper construction of the deed or will as a whole Ex. To X for the period ending on the earlier of (1) the date of death of X and (2) the date on which X ceases to be married to Y Doesnt use magic words, but this is a determinable estate b/c the limitation period is embedded in the grant What Happens on the Occurrence of the Determining Event? Automatic termination of the estate Grantor doesnt have to do anything With a fee simple determinableif the conditions on which the grant was given cease to exist, then the grant comes an end automatically - the fee simple reverts automatically to the grantor, or, if the grantor is dead, to the grantors estate. (p. 27) What is Retained by the Grantor of a Determinable Fee Simple Estate? Grantor of unconditional fee simple estate retains no form of property in land Grantor of determinable fee simple retains possibilitiy of reverter (p.26 Possibility of Reverter is NOT considered to violate the prohibition on subinfeudation set out in Quia Emptores (p.26) What is the Possibility of Reverter: Upon occurrence of determining event, fee simple automatically reverts to grantor or grantors estate Possibility of Reverter simply describes possibility of fee simple in reversion being accelerated REVERSION Estate back to grantor only REVERTER Can be remainder after determinable prior particular estate J. Alter Page 46 of 95
Ex. X to Y and his heirs Y holds fee simple; X retains nothing; Ys fee simple will terminate upon last to die of Y, Ys spouse, and Ys general heirs Ex. X to Y and his heirs for so long as the CN tower stands Y holds determinable fee simple X retains possibility of reverter Determinable fee simple held by Y will terminate upon earlier of: a. Last to die of Y, Ys spouse, and Ys general heirs Escheat occurs b. CN tower ceases to stand Fee simple estate reverts automatically to X
What is Retained by the Grantor of a Determinable Life Estate? Grantor of unconditional life estate retains reversion in fee simple (p. 16) Grantor of determinable life estate remains (p. 29): a. Possibility of reverter b. Reversion in fee simple Ex. X to Y for life Y holds unconditional life estate; X holds estate in fee simple in reversion; Ys life estate will terminate upon death of Y Ex. X to Y for life so long as the CN tower stands: Y holds determinable life estate X holds (a) Possibility of reverter and (b) Estate in fee simple in reversion Determinable life estate held by Y will terminate upon earlier of: a. Date of death of Y Fee simple estate reverts automatically to X b. CN Tower ceases to stand Fee simple estate reverts automatically to X Possibility of reverter in context of a determinable LIFE ESTATE poses the possibility that grantors estate in fee simple in reversion will be accelerated Fee simple will revert to grantor of life estate upon death of cestui que vie Possibility of reverter simple creates possibility for this to occur sooner B. Condition Subsequent (Defeasible Estate) Whereas determining event of a determinable grant is said to be part and parcel of the grant, condition subsequent is viewed as an INDEPENDENT CLAUSE added to the estate granted Condition is viewed as prematurely terminating the estate rather than bringing it to a natural conclusion as with determinable estates MAGIC WORDS: Provided that, On condition that, But if, But when, If it should occur that, If it happens that Magic words are neither absolutely necessary nor sufficient to create condition subsequent As with determinable estates, necessary to consider the deed or will as a whole i.e. To X for life. The estate herein created is conditional upon X remaining married to Y No magic words What Happens if the Condition is Not Satisfied? Estate does NOT automatically terminate (unlike determinable estate) Grantor holds right of re-entry (p. 27) Right of Re-Entry: Right to terminate the estate upon condition ceasing to be satisfied Like a right of entry for condition broken Exercise of Right of Re-Entry is optional Grantor has option to ignore breach of condition and allow estate to continue until its natural conclusion J. Alter Page 47 of 95
If right of re-entry is not exercises, then qualified estate continues Freehold will become absolute upon expiration of applicable limitation period
What is Retained by Grantor of Fee Simple Estate Subject to Condition Subsequent? Grantor of unconditional fee simple estate retains no form of property in land Grantor of fee simple estate subject to condition subsequent (i.e. A defeasible fee simple estate retains a right of re-entry) Retention of right of re-entry is NOT considered to violate the prohibition on subinfeudation set out in Quia Emptores Ex. X to Y and his heirs Y holds unconditional estate in fee simple; X retains nothing; Ys estate in fee simple will terminate upon last to die of Y, Ys spouse and Ys general heirs Ex. X to Y and his heirs on condition that the CN Tower remains standing Y holds estate in fee simple subject to condition subsequent (i.e. Defeasible fee simple) X holds Right of Re-Entry Ys estate in fee simple will terminate upon the earlier of: a. Date of death of last to die of Y, Ys spouse, and Ys general heirs Escheat occurs b. Date on which right of re-entry exercised What is Retained by Grantor of Life Estate Subject to Condition Subsequent? Grantor of unconditional life estate retains reversion in fee simple Grantor of life estate subject to condition subsequent (i.e. Defeasible life estate) holds: a. Right of Re-Entry b. Reversion in Fee Simple Ex. X to Y for life Y holds unconditional life estate; X holds reversion in fee simple Ex. X to Y for life on condition that the CN Tower remains standing Y holds life estate subject to a condition subsequent (i.e. Defeasible life estate) X holds (1) Right of re-entry and (2) Estate in fee simple in reversion Life estate held by Y will terminate upon earlier of: a. Date of death of Y Fee simple estate reverts automatically to X b. Date on which right of re-entry exercised Type of Estate Granted Life Estate Life Estate + Condition Fee Simple Fee Simple + Condition Grantor retains if Determinable Estate Reversion in Fee Simple Reversion in Fee Simple + Possibility of Reverter --------Possibility of Reverter Grantor retains if Estate Subject to Condition Subsequent Reversion in Fee Simple Reversion in Fee Simple + Right of Re-Entry -------Right of Re-Entry
Invalid Conditions
Category of Condition Condition Precedent Effect of Condition Being Invalid If condition precedent void, then entire grant fails. If determinable limitation void, then entire grant fails. Page 48 of 95 Determinable (Condition inherent in the grant- J. Alter
Property Summary SPRING 2010 Cannot separate) Defeasible (Condition Subsequent)
If condition subsequent void, then condition fails Grant takes effect without condition. Multiple reasons for which condition may be found to be invalid: Condition is uncertain Condition is impossible of performance Condition is contrary to public policy Condition poses a restraint on alienation (etc.) Contrary to Public Policy Reasons for which a condition may be contrary to public policy include (not exhaustive): A. Discriminatory Conditions B. Restraint on Marriage C. Interference with Marital Relationship D. Restraint on Religious Behaviour E. Illegality A. Discriminatory Conditions Law dealing with discriminatory conditions illustrates a unique point of intersection b/w public and private law Private law references public law (Ex. Human Rights Legislation etc.) for public policy against discrimination Easily identifiable conditions include restraints on race, gender, etc In OHRC, s.3 provides for right to contract on equal terms. Every person having legal capacity has a right to contract on equal terms without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, marital status, same-sex partnership status, family status or disability. Condition imposing racially defined restraint on alienation is considered invalid To X on condition that no form of property in the land ever be granted to a non-white What is less certain is the precise extent to which human rights jurisprudence informs the private law meaning of discriminatory. Canada Trust Co. v. OHRC (1990): Charity law case describing the determinants of public policy against discrimination As per Tarnopolsky JA: The public policy against discrimination is reflected in the antidiscrimination laws of every jurisdiction in Canada... In addition, equality rights without discrimination are now enshrined in the Canadian Charter of Rights and Freedoms in s. 15; the equal rights of men and women are reinforced in s. 28; and the protection and enhancement of our multicultural heritage is provided for in s. 27. Finally, the world community has made anti-discrimination a matter of public policy in specific conventions*that+ have been ratified by Canada with the unanimous consent of all the provinces. S. 15 Charter jurisprudence appears to be one of the determinants of public policy re discrimination But Charter doesnt apply to private interactions Tenuous to hold that jurisprudence interpreting s.15 applies to broader applications of meaning of discrimination J. Alter Page 49 of 95
Things you can do in a common law land grant may not be applicable to govt action Ex. 45 year old requirement for inheriting vs. for OSAP But what about will that says only male heirs can inherit? Ex. judgments have said that its discriminatory for govt to privilege heterosexual marriage relationship does that mean that people cant put a condition into a will prohibiting inheritance by a son in a homosexual marriage? Not clear on this issue What then is the impact of same sex marriage jurisprudence on private law conception of discriminatory? Halpern v. Canada (Attorney General) [2003]: [I]t is our view that the dignity of persons in same-sex relationships is violated by the exclusion of same-sex couples from the institution of marriage. Accordingly, we conclude that the commonlaw definition of marriage as the voluntary union for life of one man and one woman to the exclusion of all others violates s. 15(1) of the Charter. (para. 108) [W]e conclude that [this violation of] s. 15(1) of the Charter is not justified under s. 1 of the Charter. The AGC has not demonstrated that the objectives of excluding same-sex couples from marriage are pressing and substantial. The AGC has also failed to show that the means chosen to achieve its objectives are reasonable and justified in a free and democratic society. (para. 142) What, if anything, does Halpern bode for the following grant? To Baptist Church Inc. for so long as the land is used by it as a place from which to promulgate traditional Baptist theology all as more particularly described below: Marriage is ordained by G-d as an exclusively heterosexual union between one man and one woman Canada Trust says to look to Charter jurisprudence That says that marriage cant be exclusive to a man and woman, therefore, likely void
B. Restraint on Marriage As a general rule, condition is a restraint on marriage if it penalizes marriage To X and his heirs on condition that X not get married 2 categories of conditions in restraint on marriage: 1. Total Restraint on Marriage Condition against marriage in general 2. Partial Restraint on Marriage Condition against remarriage Condition against marriage to named persons Condition against marriage without consent of named persons Category Total Restraint on Marriage Valid Condition? Valid if the restraint on marriage is determinable To X for life so long as he is not married This is seen as trying to protect someone for a certain amount of time Prima Facie void if condition precedent/subsequent To X for life, on condition that X remain single Condition may be saved if evidence establishes that grantor merely intended to support grantee while single rather than promote celibacy Generally held to be valid To X for life, on condition that X not remarry Okay because it doesnt stop them from marrying, just remarrying Page 50 of 95
Partial Restraint on Marriage
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subtle distinction To X for life, provided that X not marry Y Explanation of the chart: No law against providing for people only while theyre single, but judges frown upon promotion of singleness
C. Interference with a Marital Relationship Condition interfering with marital relationship is invalid as contrary to public policy But what constitutes interference with a marital relationship? Re Nurse [1921]: Considered a condition subsequent providing that donee was not to support or aid in any way her husband or permit him to reside with her Condition was held to be invalid as against public poly b/c it interfered with marital relationship: This condition subsequent is void as offending against public policy in as much as it requires a married woman to disregard her matrimonial obligations (Middleton J.) D. Restraint on Religious Behaviour Conditions requiring donee to adopt religious beliefs or marrying into a particular religion have been upheld Re Curran [1939]: Considered whether the following condition precedent was contrary to public policy: Unless and until he/she shall have attained the age of 25 years and is at that time a member of a Roman Catholic Parish and if then married be married to one of same Faith Condition held NOT to be contrary to public policy In the present case these conditions do not involve any question of public morality. The testatrix, a devout Roman Catholic, was evidently opposed to mixed marriages. She decided to distribute her estate so as to hold out an inducement to her Protestant grandchildren to return to what she believed to be the true Church. She also desired to prevent, if possible, any further wandering from her Faith by her grandchildren marrying Protestants. This is not a matter in which the public has the slightest concern. (Godfrey J.) Issue to consider: Would Re Curran be decided differently today? According to one commentator: Canadian courtshave not apparently had reason to examine this matter in recent years, and it would be idle conjecture here how far, if at all, judicial views have changed*T+he striking down of these conditions is sufficiently draconian as to cause one to pause. Some scholars believe that this would be decided differently today, but Parachin thinks it would stand E. Illegality Condition requiring the commission of an illegal act is invalid To X on condition that he use the land to cultivate marijuana Will be interpreted as condition subsequent, so would be in luck b/c will still get the land Only the condition will be struck out (not the whole grant) Restraint on Alienation Quia Emptores established that the right to alienate is a critical right of estate ownership Conditions restraining alienation are potentially invalid 2 categories of conditions in restraint on alienation: A. Total Restraint on Alienation B. Partial Restraint on Alienation J. Alter Page 51 of 95
Category Total Restraint on Alienation
Partial Restraint on Alienation
Description Total restraint is an invalid condition Conditions imposing a severe restraint on alienation: Permanent outright prohibition against grantee selling/mortgaging Temporary prohibition on grantee selling/mortgaging Permitting alienation to only a single person Prohibiting alienation without prior consent Partial restraint is a valid condition Condition imposing a limited restraint on alienation (not severe): Prohibiting alienation to a particular person Prohibiting alienation to a certain class of people (size of class must be limited) Prohibiting alienation except by devise (cases are divided on whether this is a total restraint) [Devise = Transfer on death upon will]
Conditional Gifts of Personalty

How do the principles re Conditional Freeholds apply to gifts of personalty? Conventional wisdom suggests that conditional gifts of personal property are possible at CL Charitable gift planners, in particular, simply assume that a gift of personal property may be subject to conditions This is true for both conditions of acquisition and conditions of retention Category of Condition Condition of Acquisition Condition of Retention Example Transfer of furniture if university first constructs a new lecture theatre Transfer of truck on condition that it be used to deliver meals on wheels Transfer of cash on condition that it be used to fund scholarships
The following terminology is commonly used to describe condition gifts of personal property to charities: Donor directed gifts Donor designated gifts Restricted gifts Special purpose gifts Restricted purpose gifts (etc.) Unspoken assumption is that, since the CL recognizes conditional freehold estates in land, then presumably it can also recognize conditional gifts of personalty But does this necessarily follow? There are reasons to be skeptical as to whether a conditional gift of personal property is possible at CL:
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Property Summary 5. CONDITIONAL FREEHOLDS SPRING 2010 1. Is there really such a thing as a gift subject to a condition precedent? Welling states: The requirement of a present intent to give appears to make gifts subject to condition precedent impossible Why? Wellings claim is that the requisite donor intent is absent if the donor has articulated a condition precedent Requirement for donor intent is satisfied only if there is a present donor intent Donor intent must exist contemporaneously with delivery and acceptance Donor intent must not have been abandoned before condition precedent satisfied What if donor intent is abandoned before condition precedent is satisfied? Pledge to make a gift is unenforceable here But if a pledge to make a gift conditional upon the satisfaction of a condition precedent is unenforceable, then isnt such a pledge legally irrelevant? 2. Inapplicability of Doctrine of Estates to Personal Property Recall the discussion of qualified freehold estates Conditions of retention are possible at CL in respect of land b/c the doctrine of estates recognizes that multiple estates may be held concurrently in land Determinable fee simple estate is possible b/c the CL allows grantor to grant a fee simple but also retain a possibility of reverter Defeasible fee simple estate is possible b/c the CL allows grantor to grant a fee simple but also retain a right of re-entry The only reason why conditions such as for so long as he remains a practicing lawyer are enforceable at CL is b/c grantor retains possibility of reverter If NO possibility of reverter Then no enforcement mechanism for the condition 2 estates: Determinable fee simple of Y, and possibility of reverter to grantor (X) But the doctrine of estates generally has no application to personal property: The doctrine of estates is inapplicable to personalty; chattels can be owned outright. As a result, at common law an inter vivos gift of a chattel for life, or even for an hour, is treated, in theory, as absolute (B. Ziff, Principles of Property Law) [E]states cannot be created over consummable items; there can be no estate in a pizza! Implication is that possibilities of reverter and rights of re-entry are not possible at CL in relation to personal property But if that is correct, then determinable limitations and conditions subsequent are also not possible at CL in relation to personal property 3. Dearth of Supporting Authorities Authorities in support of conditional gifts of personalty are remarkably few Most cases cited by text writers in support of conditional gifts do not actually support the proposition that a conditional gift of personalty is possible Authorities on point tend to fall into one of 2 categories: Conditional Freehold Estates In Land But what, if anything, does this tell us about conditional gifts of personalty? Trust Arrangements We will discuss trusts later in the term Just note now that gift and trust are distinguishable modes of transferring property
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What is possible with a trust tells us nothing about what is possible with CL gift transactions Best examples in the CL of conditional gifts of personalty include a. Engagement Rings Broken engagements have given rise to litigation regarding property in engagement rings Several authorities have held that engagement ring must be returned to donor in the event of broken engagement Jurisprudence re engagement rings does not, though, provide irrefutable support for the possibility of conditional gifts of personalty Reasoning of judgments is often muddled Is ring returned as a remedy for a broken promise to marry? Is ring returned b/c of non-compliance with terms of a conditional gift? Even if engagement rigns are conditional gifts, what is the nature of the condition? Is marriage a condition of acquisition or a condition of retention? b. Donatio Mortis Causa DMC is a clear example of a conditional gift of personalty But DMC cases need to be read with caution Ultimate relevance of DMC remains unsettled: Do these cases establish the general proposition that a conditional gift of personalty is possible? Or do these cases merely represent a concession for the unique considerations that arise in the context of gifts made in the face of death?
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6. COMMON LAW REMAINDERS
Common Law Remainders

Common Law Remainders
A. Remainders and Reversions Revisited General: C.L. remainder rules relate to what are called future interests Future interest defined by Sinclair as present estate with possession deferred to the future (pg. 22) Present estate in land but your possession is deferred until some particular point in the future Remainders and reversions are future interests Category Remainder Description Remainder = estate that goes to remainder person at end of prior particular estate Remainder person = person identified by grantor as such in grant To Y for life with remainder to Z and his heirs Y holds life interest and Z hold fee simple in remainder Future interest because Z will not be entitled to possession until after termination of life estate held by Y Reversion = what grantor retains during the particular estate X to Y for life X holds estate in fee simple in reversion Reversion connotes idea that land reverts to grantor Future interest because X will not be entitled to possession until term of life estate held by Y expires
Reversion
Issue to Consider: Day 1: A to B for life. B holds life estate absolute Unqualified because there are no conditions A holds fee simple in reversion No remainderperson was specified Day 2: A alienates fee simple in reversion to C Do we now refer to the fee simple in reversion as a fee simple in remainder b/c this future interest ceases to be held by the grantor? No (pg. 67) Future interest is a remainder only if created in the same grant as the prior particular estate Since the grant creating the life estate for B did not create a remainder, the future interest continues to be called a fee simple in reversion even when held by C You can grant a right to re-entry B. Vested and Contingent Remainders: X to Y for life with remainder to Z in fee simple. Y holds life estate that is said to be vested in possession Vested in Possession means Y has right to immediate possession of land Z holds fee simple in remainder that is said to be vested in interest
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Vested in Interest means the only thing standing between Z and right to immediate possession of land is a prior estate (ie. Ys life estate) No conditions to satisfy though Z will be said to be vested in possession upon death of Y Vested in possession and vested in interest are not mutually exclusive [A]ll estates vested in possession arevested in interest, but not all estates vested in interest are vested in possession.
Ex. X to Y for life with remainder to Z in fee simple when he turns 25. (Z is 18 at time of grant.) Y holds life estate that is vested in possession. Z holds fee simple in remainder that is said to be a contingent remainder Contingent Remainder means that the remainder is not yet vested in interest Remainder will vest in interest upon the satisfaction of a contingency (Z attaining age 25) 3 Factors to Consider in Order to Determine Whether Remainder is Vested or Contingent 1. Existence of remainderperson? 2. Ascertainment of remainderperson? 3. Condition precedent applicable to remainder interest? Factor Existence Description Remainder is contingent if remainder person is not yet in existence X to Y for life with remainder to Ys first born child If Y does not yet have a child, fee simple in remainder is contingent If Y never has a child, estate will revert back to X upon death of Y Remainder is contingent if remainder person is unascertained X to Y for life with remainder to the oldest living child of X alive on the date of death of Y Remainder is contingent because the identity of remainder person will remain unascertained until the date of death of Y If no child of X is alive on date of death of Y, estate will revert back to X upon death of Y Remainder is contingent if it is subject to as yet unsatisfied condition precedent X to Y for life with remainder to Z upon Z earning and Olympic medal Until Z earns medal, remainder interest is contingent If Z never earns Olympic medal, estate will revert back to X upon death of Y
Ascertainment
Condition Precedent
C. Possibility of Reverter vs. Possibility of Reversion Grantor of a determinable freehold holds a possibility of reverter X to Y for life so long as Y is not married. Grantor of a contingent remainder holds a possibility of reversion X to Y for life with remainder in fee simple to Ys first born child. If Y fails to have a child, estate will revert to X upon death of Y Remainder will never vest if Y never has a child Reversion to grantor the same way that would happen if there was never a contingent remainder D. Successive Contingent Remainders Allowed at CL A to B for life with remainder in fee simple to the first born child of C failing which remainder in fee simple to D. (No child of C yet born.) B holds a life estate J. Alter Page 56 of 95
1st remainder is contingent b/c first born child of C is not yet born. 2nd remainder is contingent b/c subject to condition precedent of C failing to have child
Common Law Remainder Rules

CL adopted 4 rules to limit the scope of remainders at CL: 1. No remainders after a fee simple. 2. No Springing freeholds. 3. Timely vesting and class closing 4. No Shifting freeholds 1. No Remainders After a Fee Simple Rule: Grantor of fee simple cannot provide for remainder after the fee simple Ex. To X and his heirs with remainder to Y and his heirs. Remainder to Y is void with result that Y receives nothing To understand this rule remember that remainder is what is left after a particular estate Fee simple is largest estate known to C.L. and thus cant be followed by remainder Think of this as proprietary arithmetic If fee simple represents the whole of the estate, then how can it be followed by a remainder? CL remainder rule 1 also precludes remainder after a qualified fee simple Example with a defeasible fee simple: A to B on condition that he remain married to C, and if and when he ceases to be married to C, to D in fee simple. Remainder to D is void B holds fee simple subject to condition subsequent A holds right of re-entry CL remainder rule 1 precludes remainder after a qualified fee simple Example with a determinable fee simple: A to B in fee simple so long as he is married to C, and if and when he ceases to be married to C, to D in fee simple. Remainder to D is void B holds determinable fee simple A holds possibility of reverter 2 SUMMARY: CLRR 1 Precludes Remainder After: a. Fee simple absolute; b. Determinable fee simple; and c. Defeasible fee simple (i.e. Fee simple subject to a condition subsequent) Issue to consider: Does C.L.R.R. #1 preclude a remainder after fee simple subject to condition precedent? No, C.L.R.R. #1 does not preclude remainder after fee simple subject to condition precedent Key is to understand that C.L.R.R. #1 precludes a remainder after a vested fee simple estate Ex. A to B for life with remainder in fee simple to C if C graduates law school before the death of B, provided that if C does not graduate law school before the death of B remainder in fee simple to D. B = life estate vested in interest / possession C = fee simple subject to condition precedent (graduating law school) D = fee simple subject to condition precedent (C not graduating law school) J. Alter Page 57 of 95
CLRR # 1 does not apply b/c there is no remainder in fee simple following a vested fee simple estate Either C or D: Only 1 remainder in fee simple that will be given away in that grant (not 2) So DOESNT violate CL remainder rule #1
2. No Springing Freeholds Rule: Grant of freehold estate must at C.L. result in an immediate transfer of seisin Grant of freehold estate resulting in an abeyance of seisin violates CLRR #2 If you wanted at CL to grant a freehold estate, the law would only let that transfer take effect if there was an immediate transfer of seisin Seisin is the idea that someone has a freehold estate AND a right to occupy that estate In CL, if you wanted to grant the freehold estate you had to do it in such a way to give the grantee immediate seisin/immediate right to occupy/immediate vest in possession Ex. A to B and his heirs upon B attaining 25 years of age. (Assume B is 21 at date of grant.) Grant said to result in abeyance of seisin (b/c no immediate transfer of seisin) Bs interest is contingent (b/c it will not vest in interest or in possession until age requirement satisfied) C.L.R.R. #2 disallows Bs interest to spring up upon 25th birthday (Who is liable for tenurial services/incidents before B turns 25? (p. 298 Mossman 2nd ed.)) Grant is void and B acquires nothing Tenurial services owed by person who had seisin/possessed the land Contingent remainder Prior life estate thrown in which means B is vested from day 1 and is responsible for tenurial services If you wanted to have a contingent remainder, you had to have a prior particular estate/life estate that was vested in interest/possession Ex. A to B and his heirs upon B marrying C. (Assume B is single at date of grant.) Grant said to result in abeyance of seisin (b/c no immediate transfer of seisin) Bs interest is contingent (b/c it will not vest in interest or in possession until marriage requirement satisfied) C.L.R.R. #2 disallows Bs interest to spring up upon Bs marriage to C (Who is liable for tenurial services/incidents before Bs marriage to C? (p. 298 Mossman 2nd ed.)) Grant is void and B acquires nothing Does C.L.R.R. #2 preclude grant of contingent freehold? No! CLRR #2 simply requires that contingent freehold must be granted as a remainder Must be accompanied in the same grant by grant of a vested (both in interest & possession) prior particular freehold estate As per Sinclair (NB- Double negative): Rule two does not prohibit estates that will not vest in possession until some time in the future; it prohibits vesting in interest in the future unless the grantor has already transferred seisin in the same instrument which creates the remainder with a grant of a prior particular estate of freehold. (pg. 71) Ex. A to B for life with remainder in fee simple to C upon attaining 25 years of age. (Assume C is 21 at date of grant.) J. Alter Page 58 of 95
Prior life estate to B ensures an immediate transfer of seisin to B (and thus precludes application of C.L.R.R. #2.) C holds contingent remainder that will: a. Vest in interest upon Cs 25th birthday; and b. Vest in possession upon death cestui que vie (i.e., B) If C dies before 25 birthday, the remainder can never vest and it fails Goes back to grantor (A) by way of reversion If C dies before 25, then estate reverts to A in fee simple. (p. 69/71) b/c remainder will not have vested in interest prior to Cs death If C dies after 25 but before the cestui que vie (i.e., B), then fee simple will form part of Cs estate upon death of cestui que vie B/c remainder will NOT have vested in interest prior to Cs death (pg. 70) What if C attains age 25, but then the life tenant (B) outlives C What happens then? (C predeceases B) C vests in interest not possession. When C vests in interest the estate can NOT revert back to the grantor, so will vest in possession in Cs executors and be distributed as part of Cs estate. Ex. A to B for life with remainder in fee simple to C upon marrying D. (Assume C is single at time of grant) Prior life estate to B ensures an immediate transfer of seisin to B (and thus precludes application of C.L.R.R. #2.) C holds contingent remainder that will: a. Vest in interest upon Cs marriage to D; and b. Vest in possession upon death cestui que vie (i.e., B) If C dies before marriage to D, then estate reverts to A in fee simple. (p. 69/71) B/c remainder will not have vested in interest prior to Cs death If C dies after marriage to D but before the cestui que vie (i.e., B), then fee simple will form part of Cs estate upon death of cestui que vie B/c remainder will have vested in interest prior to Cs death (pg. 70) Is CLRR 2 satisfied where a vested freehold follows a leasehold? Ie. A to B for a term of 10 years and then to C and his heirs upon attaining 25 years (C is 25). CLRR 2 does NOT apply. It stipulates that a contingent freehold MUST be preceded by a fully vested prior particular freehold estate created in the same grant. C does not hold contingent remainder b/c freehold is vested [isnt it just vested in interest?...]. Leasehold to B is valid. C holds fee simple absolute and seisin throughout Bs leasehold. Is C.L.R.R. #2 satisfied where a contingent freehold follows a leasehold? Ex. A to B for a term of 10 years then to C and his heirs upon attaining 25 years of age. (C is 21 at date of grant.) C.L.R.R. #2 is NOT satisfied (p. 71) C.L.R.R. #2 stipulates that a contingent freehold must be preceded by a fully vested prior particular freehold estate created in the same grant. Contingent remainder granted to C preceded by a leasehold not a freehold. Leasehold to B is valid but contingent remainder to C is void. A holds fee simple (and seisin throughout Bs leasehold) Ex. A to B for a term of 10 years then to C and his heirs upon attaining age 25. (C is 25 at date of grant) C.L.R.R. #2 does not apply here (p. 71) J. Alter Page 59 of 95
C.L.R.R. #2 stipulates that a contingent freehold must be preceded by a fully vested prior particular freehold estate created in the same grant C does not hold a contingent remainder (b/c the freehold is fully vested) Leasehold to B is valid C holds fee simple absolute (and seisin throughout Bs leasehold)
3. Timely Vesting (AKA Doctrine of Destructibility of Contingent Remainders, pg. 72) Rule: If contingent remainder does not vest timely, then it is void If remainder vests immediately upon or before termination of prior particular estate then CLRR #3 is satisfied If contingent remainder does NOT vest in interest immediately upon or before termination of prior particular estate, then the contingent remainder is void How long will C.L. wait for a contingent remainder to vest in interest? C.L. adopts a wait and see approach (subject to exception discussed below) In particular, C.L. waits to see whether a contingent remainder will vest in interest immediately upon or before termination of prior particular estate If contingent remainder vests in interest immediately upon or before termination of prior particular estate, then C.L.R.R. #3 is satisfied If contingent remainder does not vest in interest immediately upon or before termination of prior particular estate, then contingent remainder is void Ex. To X for life, remainder in fee simple to Y upon attaining 25 years of age. (Y is 21 at time of grant.) X holds life estate vested in interest / possession Y holds contingent remainder in fee simple Ys contingent remainder must vest in interest (i.e., Y must turn 25) no later than the point in time at which Xs life estate terminates (i.e., Xs death) If Y is 25 (or older) at time of Xs death, then C.L.R.R. #3 is satisfied If Y is not yet 25 at time of Xs death, then Ys contingent remainder is void (estate reverts in fee simple to grantor) What is the rationale underlying C.L.R.R. #3? C.L.R.R. #3 reflects concern of C.L. to avoid an abeyance of seisin Someone must be seised of the land at all times (during and immediately upon the termination of a prior particular estate) If contingent remainder has not vested before or upon termination of prior particular estate, then C.L. avoids abeyance of seisin by awarding grantor with fee simple in reversion What if the contingency is satisfied after the termination of the prior particular estate? Y may fail to attain 25 before Xs death BUT may nevertheless do so shortly thereafter Will Ys remainder vest upon his 25th birthday? No if contingent remainder fails to vest in time, then it cannot be resurrected [I]f the remainder cannot possibly vest during [the cestui que vies lifetime] or at the moment of [the cestui que vies death+it is not permitted to vest at all. (pg. 72/73) What if it is impossible for contingent remainder to vest in time? C.L. will not adopt wait and see approach in such circumstances Contingent remainder is void ab initio (from the beginning) Page 60 of 95
J. Alter
Ex. To X for life with remainder in fee simple to Y if he survives X by 30 days: X holds life estate vested in interest / possession Y holds contingent remainder in fee simple Ys contingent remainder cannot vest until 30 days after cestui que vies death Ys contingent remainder is void ab initio Grantor holds fee simple in reversion Class Closing Rules Remainderpersons may be described in the grant as a class To X for life with remainder in fee simple to Ys children. At what point in time is the class said to be closed? i.e., At what point, if ever, is membership in the class frozen? Possibilities for class closing rules include: a. Date of grant: Only those children of Y alive at date of grant qualify as remainderpersons? b. Never: Children of Y alive at any time qualify as remainderpersons? c. Termination of prior particular estate: Only children of Y born before death of X qualify as remainderpersons? Rule in Festing v. Allen: (Pg. 73) Class closing rules parallel rules re timely vesting Class closes upon the termination of prior particular estate Children of Y born before Xs death qualify as class members Children of Y born after Xs death fail to qualify as class members Rule in Reeve v. Long: (Pg. 73) Class closing rules extended for class members en ventre sa mere Child of Y conceived before Xs death but born after Xs death will qualify as a remainderperson Codified in s. 45 of Conveyancing and Law of Property Act R.S.O. 1990, C. 34 ( Class Closing Rules and Partial Divestment Ex. To X for life with remainder in fee simple to children of Y. Assume that Y has two children, A & B, alive at date of grant A & B hold in equal shares remainder in fee simple vested in interest Additional children of Y born before death of X reduces the relative shares of A & B (described as partial divestment) B/c remainder in fee simple divided equally among all class members 4. No Shifting Freeholds Rule: Remainder is invalid if the prior particular estate terminates unnaturally/artificially Freehold cannot shift to remainderperson upon unnatural/artificial termination of prior particular estate Raises issue of natural versus unnatural termination of particular estates Terminating Event of a Life Estate Death of cestui que vie Exercise right of re-entry upon failure to comply w/condition subsequent Possibility of reverter upon failure to comply w/determinable limitation J. Alter Natural or Unnatural Termination? Natural CLRR 4 inapplicable Unnatural (prematurely terminates estate). CLRR 4 applicable Natural (not considered to prematurely terminate estate) Page 61 of 95
6. COMMON LAW REMAINDERS CLRR 4 inapplicable
Example A to B for life remainder in fee simple to C. B died March 1, 2006. A to B for life, on condition that B not marry C, remainder in fee simple to D. B married C on March 1, 2006. B died March 10, 2006. A never exercised right of re-entry. A to B for life, on condition that B not marry C, remainder in fee simple to D. B married C on March 1, 2006. A exercised right of re-entry on March 10, 2006 B is still alive A to B for life, or until B marries C, remainder in fee simple to D. B married C on March 1, 2006. B is still alive
CLRR render remainder invalid? C.L.R.R. #4 inapplicable b/c Bs life estate came to natural termination. Remainder to C is valid. C.L.R.R. #4 inapplicable b/c Bs life estate came to natural termination on March 10, 2006. Remainder to D is valid
C.L.R.R. #4 applicable b/c Bs life estate came to unnatural termination on March 10, 2006. Remainder to D is invalid. A holds fee simple. C.L.R.R. #4 inapplicable b/c Bs life estate came to natural termination on March 1, 2006. Remainder to D is valid. D holds fee simple.
Rationale 1: CL generally allowed remainder to vest in possession only upon the natural termination of the prior particular estate (Pg. 74) Note that there were limited exceptions for instances of artificial termination of prior particular estate (e.g., surrender/disclaimer (p. 403 of Anger & Honsberger 2nd ed.)) Dont need to know Since determinable estate is said to end naturally upon the determining event, a remainder after a determinable particular estate was permissible Why then does CLRR #1 prohibit a remainder after all qualified fee simples (i.e., determinable fee simple and fee simple subject to condition subsequent)? Since termination upon failure of condition subsequent is viewed as artificial, a remainder of a particular estate subject to condition subsequent was disallowed Rationale 2: Sinclair links CLRR #4 with idea that right of re-entry was not property that could not be granted to a 3rd party CL: [W]hile O might create an estate in A subject to the condition that if A became bankrupt O might re-enter, at common law O could not give this right to another grantee Does not satisfactorily account for C.L.R.R. #4 b/c C.L. disallowed both the right of re-entry and the possibility of reverter to be granted to 3rd party: At common law, neither the mere possibility of reverter nor the right of entry for condition broken could be conveyed or devised but descended to the heirs Logic of Rationale #2 suggests that remainders should be disallowed after both: Determinable estates AND estates subject to condition subsequent!
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7. EQUITABLE ESTATES
Equitable Estates
2 Broad Categories of Estates in Land: 1. Common Law Estates Estates in land recognized by CL 2. Equitable Estates Estates in land recognized by equity
Equitable Estates Introduction

Initially described as a USE Evolved into modern TRUST Involves a Division of Title One or more persons (trustees or feoffee to uses) hold a CL estate for the benefit of one or more other persons (beneficiary or cestui que use) Trustee/Feoffee said to legal title Beneficiary/Cesui Que Use said to hold beneficial or equitable title Conceptual Description CL ownership Held by trustees or feoffee to uses Circumscribed by equitable title held by beneficiary or cestui que use Trustee / feoffee to uses must hold legal title for benefit beneficiary / cestui que use Equitable ownership Held by beneficiary or cestui que use Circumscribes legal title held by trustee / feoffee to uses Beneficiary / cestui que use can enforce equitable title in court of equity
Category Legal Title
Beneficial / Equitable Title
Example: X to Y and his heirs, to the use of Z and his heirs Y = Trustee/Feoffee to uses. CL fee simple estate; Seised of the land; Burdens of estate ownership (responsible for tenurial services/incidents of tenure) Z = Cestui que use. Equitable fee simple estate; Benefits of estate ownership
Relationship between Law and Equity Division of title upon which the use/trust is predicated presupposes 2 regimes of law: A. Legal title predicated upon CL regime B. Equitable title predicated upon equitable regime Foundational understanding of the use and the trust requires brief review of equity and its historical relationship to CL Historically, common law and equity existed as 2 systems of law enforced by 2 separate courts Enforcement of trusts illustrates their disparate historical functions: CL Strict legal rights Equity Obligation not to exercise legal right where doing so would offend Christian conscience What was key difference between C.L. and Equity courts?
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Property Summary SPRING 2010 Category of Court Common law (ie. Kings bench, Common pleas & Exchequer)
Equity
Historical Description Strict application of rigid rules Form over fairness Letter of law favoured over Spirit of law Decisions = function of precedent Declared C.L. rights Emerged to remedy unfairness resulting from C.L. courts mechanical application of law. Fairness over form. Spirit of law favoured over letter of law Decisions = function of Christian conscience / morality Imposed obligation to refrain from exercising C.L. rights
Example: X to Y and his heirs to the use of Z and his heirs What happens if Y simple disregards the direction to hold estate for benefit of Z? Regime C.L. Outcome Prior to Statutory Fusion of C.L. and Equity Declined to enforce trust / use direction. Y may exercise for his own benefit all rights accompanying ownership of estate in fee simple Z holds no estate in land. Impose obligation on Y to exercise rights accompanying ownership of estate in fee simple in favour of Z. Y holds legal title but Z holds equitable title.
Equity
Refusal of CL courts to recognize equitable title seems draconian BUT Fact that CL courts didnt recognize equitable title is what made the use an attractive took to avoid restrictive CL rules CL rules cant apply to equitable estates if CL does not recognize such estates The very fact that the CL did not recognize the division of title on which trusts were predicated, is how we circumvented the system They wont apply CL rules to the estate
Limits to Enforcement of Uses / Trusts by Equity: A transfers fee simple estate to B to be held for use of C and his heirs B sells fee simple estate to D D was unaware of the equitable / beneficial title held by C Can C enforce his equitable / beneficial title against B in court of equity? No! C cannot enforce his equitable/beneficial title in court of equity. D is a bona fide purchaser for value without notice of equitable title (Equitys Darling) (Pg. 81) C nevertheless has a personal claim against B Historical Reasons for the Use Benefits of Division of Title Included the Following: 1. Charitable Fundraising 2. Asset Protection 3. Tax Avoidance 4. Avoid Restrictive CL Rules J. Alter Page 64 of 95
Property Summary 7. EQUITABLE ESTATES SPRING 2010 1. Charitable Fundraising: Fundraising for Franciscan friars is one of earliest known uses of the use (Pg. 6 Oosterhoff Trusts) Theology of friars required maintaining perfect poverty Granting land to a feoffee to uses to be held for the use/benefit of friars allowed friars to have benefit of wealth without per se being wealthy Legalistic But effective 2. Asset Protection: Legal estate in land was subject to forfeiture for treason / certain felonies BUT If legal estate held by feoffee to uses, it was not subject to forfeiture for treasonous/felonious acts of cestui que use Legal estate in land exigible to satisfy claims of creditors BUT If legal estate held by feoffee to uses, it was not exigible to satisfy claims of cestui que uses creditors 3. Tax Avoidance: Incidents of tenure were in many respects functional equivalent to modern tax Certain of the incidents of tenure could be deferred or avoided via the use Incident of Tenure Relief Avoidance Via the Use Money payment to lord in order for estate to pass to heirs upon death of legal estate holder. Avoidance possible by transferring legal estate to group of feoffees to uses in joint tenancy for use of cestui que use i.e. To A, B, C and D and their heirs for the use of E and his heirs. Death of E does not trigger relief. Death of any of A, B, C or D causes legal estate to pass by right of survivorship to surviving feoffees to uses. Additional feoffess to uses could be appointed as necessary. Applicable where legal estate holder died leaving minor heirs. Lord became guardian of children (but entitled to profits from land) and could choose future spouse for the ward. Avoidance possible by transferring legal estate to group of feoffees to uses in joint tenancy for use of cestui que use. i.e. To A, B, C and D and their heirs for the use of E and his heirs. Death of E does not trigger wardship/marriage. Death of any of A, B, C or D causes legal estate to pass by right of survivorship to surviving feoffees to uses. Additional feoffess to uses could be appointed as necessary.
Wardship & Marriage
4. Avoid Restrictive CL Rules: Use provided a mechanism to avoid certain restrictive C.L. rules: A. Statutes of Mortmain B. Prohibition on Devises of Land C. Feoffment by livery of seisin D. Protecting land from spousal claims E. Future Interests A. Statutes of Mortmain (Dead Hand) J. Alter Page 65 of 95
Property Summary 7. EQUITABLE ESTATES SPRING 2010 Statutes of Mortmain prohibited conveyance of estates in land to religious corporations (prohibition eventually extended to corporations generally) Corporations can exist in perpetuity and thus evade important incidents of tenure (Ex. Relief, Wardship & marriage, and Escheat) Statutes of Mortmain could be avoided by transferring legal estate in land to feoffee to uses to be held for use of corporation Ex. To X and his heirs for the use of Y Inc. B. Prohibition on Devises of Land Devise of land not possible until Statute of Wills (1540) (Pg. 86) Estate holder unable to designate by will his heir in respect of land Estates in land instead passed pursuant to CL rules descent Use enables grantors to control to whom equitable estate in land will pass upon death Ex. X to Y and his heirs to the use of X for life with remainder to Z and his heirs. X created a trust for his own benefit Specify at end whoever you would have put in your will Ability to do what would have been done in functional devise of land C. Feoffment by Livery of Seisin Feoffment by livery of seisin necessary to transfer legal freehold estate Technical procedure came to be seen as problematic (lacked convenience and privacy) The use provided a method of sorts to relieve against the perceived problems of the C.L. insistence upon livery of seisin Ex. Feoffment to Uses: Feoffment by livery of seisin to the feoffee to uses (i.e. The trustee) Public ceremony in which seisin is transferred to the feoffee to uses Equitable estate holder does not hold seisin Cestui que use would not participate in the ceremony Benefit here is that grantor could preserve some measure of privacy as to who held equitable ownership of the estate in land transferred to the trustee D. Protecting Estates in Land from Spousal Claims Certain CL rules re spousal claims viewed as problematic by both men and women: i. At C.L. A womans legal estates became her husbands upon marriage ii. Widow had dower rights over legal estates of deceased husband These C.L. rules could be defeated by transferring legal estate to feoffee to uses and retaining equitable estate E. Future Interests CL remainder rules do not apply to equitable estates Equitable estates a far more flexible planning tool for dealing with equitable estates Future interests in equity to be elaborated on later Objective here is to understand in general terms how equitable estates avoided CL remainder rules Ex. A to X and his heirs to the use of Y and his heirs upon Y attaining 25. (Y is 21 at date of grant) Grant valid b/c C.L.L.R. #2 does not apply Y said to have an equitable executory interest (equitable estate that is not yet vested) Until Y turns 25, X holds legal estate on resulting use for A While waiting for the named grantee of the equitable interest to meet the conditions specified in the grant, X holds the legal title for the benefit of the grantor by way of a resulting use (Pg. 87) Ex. A to X and his heirs to the use of Y for life, remainder to the use of Z and his heirs upon Z attaining 25. (Z is 21 at date of grant) J. Alter Page 66 of 95
Property Summary 7. EQUITABLE ESTATES SPRING 2010 C.L.R.R. #3 provides that Z must satisfy the age requirement (condition precedent) before termination of prior particular estate C.L.R.R. #3 does not, however, apply to equitable estates Zs equitable fee simple will vest upon Z turning 25 (whether that happens before, after or upon the termination of prior life estate) If Z not yet 25 upon termination of prior life estate, X holds on resulting use for A Y has equitable life estate that is both vested in interest and vested in possession Contingent equitable remainder in fee simple (for X) Ex. A to X and his heirs to the use of Y for life on condition that the CN Tower stands, and if and when it falls, to the use of Z and his heirs. Grant valid b/c C.L.L.R. #4 does not apply Z said to have executory interest
Statute of Uses
Statute of Uses passed in 1535 to attempt to eliminate (or at least diminish popularity of) the use Most land held directly of the Crown at this time Key concern of Crown was that use allowed avoidance / deferral of incidents of tenure
How Did The Statute of Uses Seek to Eliminate the Use? Statute of Uses (1535): [W]here any person or persons is seised of any interest in land to the use, confidence, or trust of any other person, persons, or body politick [read corporation]: [1] The person, persons or body politick who is to benefit from the use shall henceforth stand and be seised of the same estate in law as they had in equity; and [2] The estate given to the person who stood seised to the use of another shall be deemed to be in the person, persons, or body politick who is to benefit from the use. Designed to frustrate the ability of settlors to settle trusts B/c trusts were being used to evade the functional equivalent of taxes Wanted to block the ability of gaining that revenue Result: Trustee holds nothing and the beneficiary holds the same CL estate that they had in equity- So you have no trust Process whereby legal and equitable title united in the beneficiary described as executing the use Executing the Use Dont like trusts? Kill them. Thats essentially what the statute does Example: X to A and his heirs to the use of B and his heirs Time Period Description Prior to Statute of Uses A = seisin and legal fee simple. B = equitable fee simple. After Statute of Uses Use is executed Grant applied as though it read: X to B and his heirs. A = nothing Bs equitable fee simple deemed to be legal fee simple B is deemed to have seisin
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Property Summary 7. EQUITABLE ESTATES SPRING 2010 Example: X to A and his heirs to the use of B for life remainder to the use of C and his heirs Time Period Description Prior to Statute of Uses A = seisin and legal fee simple. B = equitable life estate C = equitable fee simple remainder After Statute of Uses Use is executed Grant applied as though it read: X to B for life remainder to C and his heirs. A = nothing Bs equitable life estate deemed to be legal life estate. B is deemed to have seisin Cs equitable fee simple remainder deemed to be legal fee simple remainder Overcoming the Statute of Uses Statute of Uses ultimately unsuccessful in eliminating the use Statute of Uses could be overcome in 2 ways: 1. Avoidance of Statute of Uses 2. Exhausting Operation of Statute of Uses 1. Avoidance of Statute of Uses: 3 methods to avoid Statute of Uses: A. Appoint Corporation as Trustee B. Transfer Leasehold to Trustee C. Give Trustee Active Duties A. Appoint Corporation as Trustee Statute of Uses applies only: [W]here any person or persons is seised of any interest in land to the use, confidence, or trust of any other person, persons, or body politick [read corporation] Charging provision of Statute of Uses Tells you when Statute applies Person cannot include corporation here, since Statute of Uses employs the expression body politick when referring to corporations Statute of Uses applies if corporation is beneficiary but not if corporation is trustee Ex. X to ABC Corp. for the use of Y and his heirs. Statute of Uses inapplicable b/c corporation is trustee Ex. X to Y and his heirs for the use of ABC Corp. Statute of Uses applies b/c corporation is beneficiary (not trustee) B. Transfer Leasehold to Trustee Statute of Uses applies only where trustee holds seisin Seisin possible only in relation to a freehold but not a leasehold estate Statute of Uses not applicable if trustee holds a leasehold for the use of beneficiary C. Give Trustee Active Duties Courts limited application of Statute of Uses to bare uses Bare use exists where trustee does nothing but hold seisin Bare use perceived as a sham or mere shell simply to avoid incidents of tenure Bare uses = Bare trusts (Dont use the term uses anymore) Bare trust means that Trustee merely holds legal title Their exclusive function is to have property registered in the trustees name If trust instrument gives trustees active duties to perform, then Statute of Uses inapplicable J. Alter Page 68 of 95
Property Summary 7. EQUITABLE ESTATES SPRING 2010 Active duties can include maintaining land, renting land and paying profits to beneficiary Exclusion from Statute of Uses of trusts where trustees have active duties is foundational to the modern uses of trusts for land: [I]t is the principle that uses involving active duties are not executed that saves such trusts from being ruined by this legislation 2. Exhausting Operation of Statute of Uses Judicial enforcement of Statute of Uses became more lenient upon passage of Tenures Abolition Act (1660) Recall Tenures Abolition Act in effect abolished incidents of tenure and thus eroded concerns that prompted Statute of Uses in the first place Reason for enacting uses was to preserve for the crown the lucrative incidence of tenure But Tenures Abolition Act abolishes the incidents of tenure, that they were using trusts to avoid So now it makes sense to be more lenient towards Statute of Uses Courts developed rules whereby the Statute of Uses could be exhausted Sinclair describes the point as follows: The Statute will execute any number of successive life estates; it is exhausted only by successive uses of a fee simple. (Pg. 84) Sinclair builds the point by distinguishing between a use on a use and a use after a use There is a difference between a use on a use and a use after a use BUT use upon a use / use after a use is a confusing and unhelpful distinction Keep the rule simple: Statute of Uses can execute no end of equitable life estates But the Statute of Uses is exhausted once it executes a single equitable fee simple UPON a use: Statute of Uses exhausted upon execution of the first use Ex. Successive equitable fee simple estates AFTER a use: Statute of Uses NOT exhausted upon execution of first use Ex. Equitable life estate followed by an equitable fee simple remainder Ex (After a Use). To A and his heirs to the use of B for life then to the use of C and his heirs. Statute of Uses executes both uses A = Nothing B = Seisin and legal life estate C = Vested legal fee simple remainder Ends up reading: To B for life then to C and his heirs Ex (Upon a Use). To A and his heirs to the use of B and his heirs then to the use of C and his heirs. Statute of Uses executes only the first use (Bs use) A = Nothing and B = Seisin and legal/equitable fee simple Statute of Uses said to be exhausted at this point Bs equitable fee simple immediately moves to C B = Legal fee simple (as feoffee to uses / trustee for C) C = Equitable fee simple Ends up reading: To B and his heirs to the use of C and his heirs. Given the jurisprudence re exhausting the Statute of Uses, it became common practice for same person to be named as the grantee of legal estate and the grantee of the first use Ex. To A and his heirs to the use of A and his heirs then to the use of B and his heirs. Statute of Uses executes only the first use (As use) A = seisin and legal/equitable fee simple Page 69 of 95
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Property Summary SPRING 2010 Statute of Uses said to be exhausted at this point As equitable fee simple immediately moves to B A = Legal fee simple (as feoffee to uses / trustee for B) B = Equitable fee simple Ends up reading: To A and his heirs to the use of B and his heirs
Language required to exhaust Statute of Uses was ultimately truncated: Unto and to the use of A and his heirs to the use of B and his heirs. To the use of A and his heirs in trust for B and his heirs. Need to interpret Unto and to the use of A and his heirs as being exactly (functional equivalent) the same as To A and his heirs, to the use of A an his heirs
Statute of Uses and the CLRR To understand relevance of Statute of Uses to C.L. remainder rules, necessary to understand distinction between: (See chart below) A. Equitable executory interests Contingent Equitable Freehold Equitable b/c Statute of Uses is exhausted by use of language unto and to the use of Bs estate is equitable still b/c A is holding as trustee Freehold b/c equitable fee simple Contingent b/c condition precedent not yet satisfied (Upon B turning 25) So not yet vested in interest B. Legal executory interests. Contingent CL Fee Simple Legal executory interest just means that converted from equitable to CL Used to be an equitable estate, but now CL b/c it was executed by Statute of Uses Category Equitable Executory Interest Description Contingent equitable freehold i.e. Unto and to the use of A and his heirs to the use of B and his heirs when B is 25. (B is 21 at date of grant.) B = Contingent equitable freehold. Contingent b/c B is not yet 25 Equitable b/c Statute of Uses is exhausted. Contingent equitable freehold transformed into contingent legal freehold by operation of Statute of Uses. i.e. To A and his heirs to the use of B and his heirs when B is 25. (B is 21 at date of grant.) B = Contingent legal freehold Contingent b/c B is not yet 25 Legal b/c Statute of Uses will execute the use and grant will be applied as though it read: To B and his heirs when B is 25.
Legal Executory Interest
Recall that CL remainder rules do not apply to equitable executory interests: Remainder after equitable fee simple possible Equitable freehold can spring up in future Equitable freehold need not vest during prior particular estate Class closing rules modified (class closes only when new class members are no longer possible (p. 91)) Page 70 of 95
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Property Summary 7. EQUITABLE ESTATES SPRING 2010 Equitable freehold can shift Trustee holds equitable executory interest on RESULTING USE during any period that it is not vested But do CLRR apply to legal executory interests? (i.e. What happens when drafted as equitable/trust Where the CL rules dont apply- but through application of statute of uses became CL?) Rule: Subject to one exception, CLRR do NOT apply to legal executory interests Ex. To A and his heirs to the use of B and his heirs when B is 25. (B is 21 at time of grant.) Statute of Uses executes the first use A = nothing B = legal executory interest (Legal fee simple subject to unsatisfied condition precedent) Grantor = Fee simple in reversion until B attains 25 (Pg. 90) C.L.R.R. #2 does not apply so Bs fee simple can spring up
Exception: Rule in Purefoy v. Rogers Timely Vesting Purefoy v. Rogers provides that legal executory interest must comply with C.L.R.R. #3 requirement for timely vesting in limited circumstances: C.L.R.R. #3 applicable if timely vesting of legal executory interest is possible C.L.R.R. #3 inapplicable if timely vesting of legal executory interest is impossible Ex. To A and his heirs to the use of B for life then to the use of C and his heirs upon C attaining 25 years of age. (C is 15 at date of grant.) C.L.R.R. #3 applies due to rule in Purefoy v. Rogers Since it is not outright impossible for Cs legal executory interest to satisfy C.L.R.R. #3 requirement for timely vesting, it must satisfy this requirement Ex. To A and his heirs to the use of B for life then to C and his heirs if C survives B for one minute and is then 25 years of age or subsequently attains 25 years of age. C.L.R.R. #3 does not apply due to rule in Purefoy v. Rogers Since it is impossible for Cs legal executory interest to satisfy C.L.R.R. #3 requirement for timely vesting, then it need not satisfy this requirement
Statute of Uses and Statute of Wills Recall that one benefit of use was that it allowed for testamentary planning re land Statute of Uses unpopular, inter alia, b/c it diminished ability to engage in such planning Statute of Wills passed in 1540 to authorize devises of land Statute of Wills and CLRR: Note that C.L. remainder rules do not apply to devises Consider this a logical application of rule that C.L. remainder rules do not apply to trusts: Ss. 2(1) of Estates Administration Act provides that personal representative of deceased holds all real/personal property vested in the deceased as trustee for persons beneficially entitled thereto
Rule in Shelleys Case Revisited

Recall the R.S.C.: Where a grant of a life estate to A is followed in the same instrument (will or deed) by a grant mediately or immediately to As heirs, or heirs of the body, the word heirs is interpreted as a word of limitation and not a word of purchase. Page 71 of 95
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Property Summary SPRING 2010 R.S.C. also applies to equitable estates
RSC and Equitable Estates R.S.C. applies only where: Legal life estate to A followed (mediately or immediately) by legal remainder in fee simple / fee tail to As heirs Equitable life estate to A followed (mediately or immediately) by equitable remainder in fee simple / fee tail to As heirs Have to have the matching of legal and legal; equitable and equitable, in order for the rule to apply R.S.C. does not apply where: Legal life estate to A followed (mediately or immediately) by equitable remainder in fee simple / fee tail to As heirs Equitable life estate to A followed (mediately or immediately) by legal remainder in fee simple / fee tail to As heirs RSC and Statute of Uses: In order to determine whether RSC applies, you must FIRST consider Statute of Uses (Which will determine if you have the requisite pairing) Ex. To A and his heirs to the use of B for life and on Bs death to convey the legal fee simple to Bs heirs. At first glance, R.S.C. does not apply b/c equitable life estate to B followed by legal fee simple to Bs heirs But Statute of Uses triggers application of RSC by executing Bs equitable life estate After application of Statute of Uses, grant is applied as though it read: To B for life remainder to Bs heirs. After application of R.S.C., grant is applied as though it read: To B and his heirs.
Modern Trusts
The use (the trust) was predicated upon a division of legal and beneficial title Trustee holds legal title Beneficiary holds beneficial title Statute of Uses ultimately unsuccessful in executing the use (i.e., Uniting both legal and equitable title in the beneficiary) Division of legal and equitable title through trusts remains very common to this day
Fusion of CL and Equity Recall C.L. courts disregarded the obligation of trustee to hold property for the benefit of the beneficiary Equity enforced the obligations of trustees in name of Christian conscience and thereby allowed for the emergence/development of the trust C.L. and Chancery courts were fused in late 19th century Ontario (1881) Ontario Judicature Act England (1875) Supreme Court of Judicature Acts Rules of C.L. and Equity Enforced by single court system, subject to the following PROVISO: Where a rule of equity conflicts with a rule of common law, the rule of equity prevails.
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Property Summary 7. EQUITABLE ESTATES SPRING 2010 Proviso significant b/c its privileging of Equity over CL entrenched the foundation of modern trust law Ex. Equitable obligations of trustees initially articulated by Chancery Courts remain with us and continue to trump rights of CL ownership Modern Relevance of Statute of Uses: Statute of Uses abolished in England (Law of Property Act, 1925; Pg. 322 Mossman 2nd ed.) Statute of Uses, however, remains good law in Ontario Every trust of land needs to continue to be drafted as to either avoid or exhaust Statute of Uses Forms of Property Held in a Modern Trust Trusts were initially employed only in relation to estates in land (Oosterhoff on Trusts, 6th ed. p. 11) 2 key reasons account for this: A. Locus of Wealth in Feudal Times B. Possession vs. Ownership of Things in Feudal Times A. Locus of Wealth in Feudal Times: Estates in land = Most valuable form of property in feudal times Stores of wealth reflected in estates in land not in personal property Key source of state revenue derived from incidents of tenure (i.e. Taxation) applicable to estates in land (not personal property) Planning opportunities facilitated by the trust not generally perceived as being of practical relevance to personal property B. Possession vs. Ownership of Things in Feudal Times: Writing in context of things, Welling notes: (Property In Things In the Common Law System, Pg. 31/32) The common law never developed a theory of what constitutes ownership The early common law didnt need a definition of ownership. Common law remedies were based on possession How can there be a trust in relation to a thing if the early CL did not recognize property in things other than possession? (Oosterhoff on Trusts, 6th ed. Pg. 11) Trust requires that trustee continue to hold form of property in thing even if beneficiary holds possession of it Today, any form of property may be held in trust Statute of Uses applies only in relation to trusts of land (p. 190 Ziff 3rd ed.) Reasons for restricting trusts to land have dissipated Ex. Locus of wealth in modern society is no longer estates in land, but instead personal property (Corporate shares, mutual funds, licenses, patents, trademarks, etc.)
2 Basic Categories of Modern Trusts: 1. Express Trusts 2. Trusts Arising by Operation of Law 1. Express Trusts Trust created via the expressed (orally/written) intentions of settlor Note that writing requirements of Statute of Frauds apply to trusts of land Modern reasons for settlor to establish express trust parallel early uses of trusts
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Property Summary 7. EQUITABLE ESTATES SPRING 2010 Estate planning, tax avoidance, asset protection, charitable fundraising continue as key reasons to establish trusts BUT Contemporary use of trusts much broader than historically was the case
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Property Summary SPRING 2010 Use of Trust Estate planning
Charitable fundraising. Asset protection. Tax Planning
Description Trust allows enormous flexibility in structuring inter vivos and testamentary transfers of wealth Wealth distribution to successive generations (ie. life estate followed by gift over to as yet unborn issue) Enable property to be held for benefit of persons under a legal disability (e.g., minors) Protection of family wealth Shield assets from claims of a beneficiarys estranged spouse and other creditors (give them a discretionary interest in a trust instead of actual property, and the interest is worth very little) Offshore trusts Control a fiscally irresponsible childs poor spending habits Tax efficiency (ie. income splitting) Allow for control from beyond the grave Trust instrument may terminate beneficiarys interest upon bankruptcy, etc RECALL: discretion of settlor to impose conditions is not absolute Charities themselves may be established as trusts (or alternatively as corporations / unincorporated associations). Conditional gift of personalty to charities must also take the form of a trust. Properly structured discretionary trust can shield trust property from claims of creditors. Trust allows for effective tax planning in several key respects Spousal trust defers deemed disposition on death. Inter vivos trust avoids probate tax. Trust income can retain its character as being on account of income / capital as it flows through to beneficiaries. Income splitting possibilities. Note that income taxed in inter vivos trust is taxed at the highest marginal rate. BUT 21 year deemed disposition is a tax disadvantage of trusts
2. Trusts Arising by Operation of Law In limited circumstances, law will impose a trust even in absence of a settlor with an expressed intention to establish a trust 2 Categories: A. Resulting Trusts B. Constructive Trusts A. Resulting Trusts Resulting trust generally involves the transferee of property being considered to hold the property on resulting trust for the transferor Difference b/w resulting and constructive is that in the resulting, the trust RESULTS back to the transferor Returns property to him in some circumstances Examples of When Resulting Trust Imposed: i. Failed Express Trust Applicable to both inter vivos and testamentary express trusts Express trust (inter vivos or testamentary) may fail after settlor transfers trust property to trustee Ex. Failure to comply with rules required to establish a valid trust J. Alter Page 75 of 95
Or Ex. Beneficiary may disclaim interest in trust Trustee deemed in such circs. to hold trust property on resulting trust for settlor i.e. Trust property results to the settlor Resulting trust in these circumstances is automatic Idea is to avoid outcome in which no one holds beneficial title to trust property Trustee cannot simply claim beneficial title for himself unless evidence establishes that this was settlors intention ii. Voluntary transfer of property Applicable only to inter vivos transfers Two categories of resulting trusts may arise from voluntary inter vivos transfers of property without consideration Underlying rationale is maxim that equity presumes bargains, not gifts Category Description Voluntary Transfer Arises where X gratuitously transfers property currently held Resulting Trust by X to Y. Y deemed to hold the property on resulting trust for X. Arises where X acquires property and gratuitously directs title to be taken in name of Y. Y deemed to hold the property on resulting trust for X. Note: Remember also that resulting use (previously discussed) applicable when equitable estate in land is subject to as yet unsatisfied condition precedent Issue: Do voluntary transfer/purchase money resulting trusts preclude inter vivos gifts? NO! a. Presumption of resulting trust in context of vol. transfer of property is rebuttable Is there evidence that gift was intended? b. Presumption of resulting trust not applicable to all voluntary transfers of property Presumption of resulting trust may be overridden by presumption of advancement Presumption of advancement presumes gift in certain circumstances Ex. Gift from parent to minor child Equity assumes bargains, not gifts (for consideration)- Transfer for no consideration gives rise to resulting trust If transferee can adduce evidence of gift, youve overcome the presumption Gift from parent to MINOR child treated differently than gift from ELDERLY parent to ADULT child B. Constructive Trusts Trust constructed by law (rather than by intentions of parties) to redress a wrong / unjust enrichment Imposed, for example, where one person (the constructive trustee) experiences a gain that in conscience should belong to another person (the beneficiary) Wide breadth of circumstances in which constructive trust may arise Mutual Will Example: A and B - who are married - agree to each execute a will along the following lines: I gift my home located at 123 Smith St. to my spouse, if she survives me, provided that if my spouse does not survive me, I gift my home located at 123 Smith St. to C for her use absolutely. A predeceases B, who subsequently changes her will and leaves the home located at 123 Smith St. to D. C may have constructive trust in respect of 123 Smith St. imposed in her favour J. Alter Page 76 of 95 Purchase Money Resulting Trust
Property Summary 7. EQUITABLE ESTATES SPRING 2010 Breach of the agreement that creates an enrichment that is unjust (If give to D, when understood that it would be to C) C Cant enforce himself b/c hes not privy to the agreement (Contract law)
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8. RULE AGAINST PERPETUITIES
Rule Against Perpetuities

Introduction to Rule Against Perpetuities
RAP can be very difficult: Lucas v. Hamm (1961) held that lawyer not professionally negligent for misunderstanding RAP (p. 243 Ziff 3rd ed., p. 328 Mossman 2nd ed.) Dont just memorize the rule consider it with a view to its policy rationale
What is the Rule Against Perpetuities? Property law generally allows grantors to alienate property on such terms as they deem best That said, there are a number of fetters on this freedom: Conditions can be struck on qualitative grounds (Chapter 3) Common law remainder rules impose restrictions (Chapter 8) RAP imposes quantitative restriction on grantors (Chapter 10) RAP limits period of time throughout which law will wait for vesting in interest to occur The starting point for understanding perpetuities is TESTAMENTARY FREEDOM RAP limits the period of time a person can control property into the future through contingent interests RAP is a poor name for the rule RAP is more accurately described as the rule against remoteness of vesting B/c RAP limits the period of time within which vesting in interest must occur in order to avoid contingent estates failing for remoteness Willing to accept contingent interests for a period of time, but once you get to the end of that time, no more contingent interests are allowed- property has to vest What is the Rule Against Remoteness of Vesting? Imposes a time frame (the perpetuity period) within which: a. Contingent estates (legal and equitable) must vest in interest b. Breach of condition subsequent must occur. i.e. Right of re-entry must arise c. Determining event must occur i.e. Determining event allowing for reversion of land via possibility of reverter must occur during perpetuity period Context for Application of Rule Contingent Remainder / Executory Interest Comment Unto and to the use of A and his heirs to the use of B for life then to the use in fee simple of the first of Bs issue to graduate law school. Rule against remoteness of vesting limits how long law waits for contingency to be satisfied To A and his heirs on condition that the Federal government of Canada continues to exact income tax on a progressive scale. Rule against remoteness of vesting limits long-term significance of the condition
Condition Subsequent
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Property Summary SPRING 2010 Determinable limitation
8. RULE AGAINST PERPETUITIES To A and his heirs for so long as the city of Toronto hosts an NBA franchise Rule against remoteness of vesting limits long-term significance of the condition
Application is not restricted to land (Ziff 3rd ed. Pg. 244) Trust funds holding personal property must also comply
Policy Rationale of RARV: Consider a trust that contains the following provision: Unto and to the use of A and his heirs to the use of B and his heirs if B first graduates law school B holds a contingent equitable estate in fee simple It just means that A is a trustee holding legal title Assume that B has not yet graduated law school- contingent estate B will not vest in interest until the condition precedent of graduating law school is satisfied Until B graduates law school, A holds the estate on resulting trust for the settlor But what if B dies before graduating law school? Settlor is likely to contemplate this possibility and provide for a contingent gift over Unto and to the use of A and his heirs to the use of B and his heirs upon graduating law school, provided that if B should fail to graduate law school, to C and his heirs upon graduating law school C holds a contingent equitable estate in fee simple subject to two conditions precedent: B not graduating law school C graduating law school But what if C dies before graduating law school? Again, settlor is likely to contemplate this possibility and provide for another contingent gift over Unto and to the use of A and his heirs to the use of B and his heirs upon graduating law school, provided that if B should fail to graduate law school, to C and his heirs upon graduating law school, provided that if C should fail to graduate law school, to D and his heirs upon graduating law school D holds a contingent equitable estate in fee simple subject to three conditions precedent: B not graduating law school C not graduating law school D graduating law school Rule against remoteness of vesting achieves a simple objective: It prevents the settlor from providing an infinite number of contingent gifts over No contingent estates will be allowed to vest after the perpetuity period expires If none of B, C and D graduate law school within the perpetuity period, then all of their contingent estates will fail for remoteness But why do we care about when contingent estates vest? What is so troubling about contingent estates? RARV said to serve two key policy objectives: a. Preserves Alienability of Property b. Protects Freedom of Testation for Future Generations Salience of these policy concerns has diminished
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Argument in Support of RARV Preserves Alienability of Property
Description of Argument Market for property encumbered by contingent interests is depressed Restricting contingent interests to the perpetuity period limits extent to which contingencies fetter alienability
Counterargument Concern makes most sense with land grants Modern trusts furnish trustees with power to substitute trust investments. Trust property remains alienable throughout life of trust Only the interests in the trust are made inalienable by contingencies. Even without the RARV each generation would have freedom of testation over new wealth created by it
Protects Freedom of Testation for Future Generations
Protecting freedom of testation for future generations requires restricting freedom of current generation to devise property in a restricted state.
Continually fluctuating basket of investments Protects testamentary freedom for future generations If there were no rules against perpetuities, when the current generation were to write a will, they would pass only restrictive estates (i.e. Life estates) to successive generations (Life estate for my child, life estate for his child, life estate for the child after etc) The future generations would have NO testamentary freedom (b/c can only have testamentary freedom over property that still exists on your death- they wouldnt have that if there were continual life estates) Can only have contingent estates for a certain amount of time- After that, have to vest absolutely in ppl
CL Approach vs. Modern Approach Aspects of Sinclair discussion reflect C.L. rules which have been modified by Perpetuities Act, R.S.O. 1990, Ch. P. 9 Perpetuities Act effective as of Sept. 6, 1966 APPLICATION OF RULE AGAINST REMOTENESS OF VESTING TO DETERMINABLE ESTATES At C.L., determinable estates exempt from rule against remoteness of vesting (p. 97) S. 15 of Perpetuities Act explicitly provides that rule applies to determinable estates POINT IN TIME TO EVALUATE COMPLIANCE WITH RULE AGAINST REMOTENESS OF VESTING: At C.L., contingent interest void ab initio if there is any chance of vesting outside perpetuity period (Pg. 96) S. 3 and 4 of Perpetuities Act now provide for wait and see approach Under CL, if there was even a remote possibility that the contingent estate would vest outside the perpetuity period, It would fail ab initio it would be struck from day 1 Seemed to be a draconian response b/c (read through chap 10) there were instances where 85 yr old woman would give birth was the condition in order for vesting to occur Now, Wait and See approach Figure out what the perpetuity period is (theres a chance it might vest outside of that, b/c theres a chance it might vest within the perp period- so dont strike from the start) If we get to the end of perp period and the contingent estate has not yet vested, well strike it then- but well wait and see for that to happen SAVING PROVISIONS Page 80 of 95
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Property Summary 8. RULE AGAINST PERPETUITIES SPRING 2010 Perpetuities Act contains provisions that save contingent interests that would have failed for remoteness at common law
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Perpetuity Period
No single perpetuity period There exists a default perpetuity period for contingent estates generally There also exists a truncated perpetuity period that defines the period of time within which rights of re-entry and possibilities of reverter must vest in interest We will consider them in turn
Perpetuity Period for Contingent Estates (Legal and Equitable): Recall Estate will be contingent for one of 3 reasons: a. Grantee not yet in existence b. Grantee not yet ascertained c. Condition precedent not yet satisfied Rule against remoteness of vesting simply provides that these criteria must be satisfied within the perpetuity period Contingent estate will be void if it does not vest in interest (i.e., cease being contingent) within the perpetuity period (S. 4 of Perpetuities Act) Perpetuity Period may be defined as follows: 21st anniversary of date of death of some person What is meant by some person? Phrase life or lives in being is the legal term of art to describe the person whose life is used to quantify the perpetuities period Rule against remoteness of vesting simply requires the following: Contingent estates must vest in interest no later than the 21st anniversary of the date of death of a life or lives in being Vesting in possession not necessary within perpetuity period Ex. A to life, after that B for life, remainder to C upon turning 40 C has to turn 40 before perp period ends (C has to vest in interest before that- Doesnt have to vest in possession though) When last one of those measuring lives dies, you add 21 yrs and thats the end of the perp period If perp period ends before the death of B, and C turns 40 even before that- C turns 40 so he vests in interest, but wont vest in possession before Bs life estate comes to an end he can vest in possession post- perp period still! Its OK Key difficulty is to identify the life or lives in being 2 basic points to take note of: 1. Must be a person alive at date of grant Alive includes person en ventre sa mere at date of grant (Pg. 96, p. 246 Ziff 3rd ed.) Date of grant for devise / testamentary trust is date of death of grantor / settlor 2. May be explicitly or implicitly identified (Pg. 94-95) Explicit = Grant explicitly identifies the life or lives in being Implicit = Apply CL rules to identify the life or lives in being implicitly identified in grant C.L. rules to identify implicit life or lives in being can be very difficult To avoid unnecessary complications posed by CL rules, well drafted documents make explicitly clear who is the life or lives in being Ex. Unto and to the use of A and his heirs to the use of B and his heirs upon graduating law school, provided that if B should fail to graduate law school, to C and his heirs upon graduating law school, provided that if C should fail to graduate law school, to D and his heirs upon graduating law school Page 82 of 95
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Property Summary 8. RULE AGAINST PERPETUITIES SPRING 2010 To preclude any contingent estates from failing for remoteness, professionally drawn trusts include a Perpetuities Clause: Perpetuity Date means the 21st anniversary of the date of death of the last to die of the Settlor, the Settlors spouse and all issue of the Settlor who are living on the date of this Deed of Settlement. This clause tells us that the lives in being are the settlor, the settlors spouse and all issue of the settlor living on the date the trust is created The perpetuities clause will go on to preclude estates from remaining contingent any later than the Perpetuity Date Notwithstanding any other provision of this Deed of Settlement, if on the Perpetuity Date the interest of any Beneficiary in the Trust Fund is not yet absolutely vested, such interest shall become absolutely vested in such Beneficiary on the Perpetuity Date. Just legalese for saying if C hasnt yet graduated law school by the perpetuity date, fine- I relent you get it anyway Designed to stop any interest from failing for remoteness Once we get to the end of the perp period- at that point (and only at that point), well waive all conditions-precedent Perpetuities Clause is not, however, without interpretive ambiguities Assume that B dies before graduating law and that the Perpetuity Date occurs when C and D are alive but have yet graduate law: Both C and D have contingent equitable estates here Which of C or D does the Perpetuities Clause deem to become absolutely vested? To avoid both C and D claiming the benefit of the Perpetuities Clause, shouldnt the clause provide an ordering mechanism to determine which of C or D become absolutely vested on the Perpetuity Date? Grantor / settlor may explicitly identify life or lives in being in more subtle fashion than explicitly defining the perpetuity period Ex. Unto and to the use of X to the use of the first graduate from the Faculty of Law at the University of Western Ontario to win the NBA dunk off within 21 years of the date of death of the last to die of the current players for the Miami Heat. No possible perpetuities problem with this grant b/c contingent estates must vest in interest within 21 years of date of death of an explicitly identified life in being i.e., the last of the current Miami Heat players to die Impossible for that to fail for remoteness b/c the timely period that has been drafted in is 21 anniversary of the date of death for ppl that are currently living So it is drafted to absolutely preclude any of those contingent estates from vesting remotely
Restrictions on the Designations of the Life or Lives in Being Generally, any living person or persons may be designated (including person en ventre sa mere) (Pg. 96) Must be a human (p. 452 Anger & Honsberger 2nd ed.) Royal Lives Clause sometimes employed: (Pg. 96, and p. 169 Todd & Wilson Textbook on Trusts 6th ed.) Perpetuity Date means the 21st anniversary of the date of death of the last to die of all lineal descendants of George V who are living on the date of this Deed of Settlement. Perpetuities Act suggestive that life in being must bear some relevance to the grant (Ss. 6(1)) But is a life in being relevant if only b/c the grantor named him/her as a life in being? Selection of lives in being must not be so broad as to be impracticable 21 years from the death of the last survivor of all persons who shall be living at my death was held to be too broad
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Property Summary 8. RULE AGAINST PERPETUITIES SPRING 2010 Identifying Perpetuity Problems Re Contingent Estates 6 Questions to Consider in Relation to Contingent Estates: 1. Does the grant / trust explicitly define the perpetuities period / lives in being? 2. Is the grantee of contingent estate alive at the date of grant / trust? 3. Does C.L.R.R. #3 - Timely vesting - apply? 4. If perpetuity problems not ruled by (1), (2) and (3), who are implicit life/lives in being? 5. What if there is no life or lives in being (explicit or implicit)? 6. If the interest fails for remoteness is it nevertheless saved by the Perpetuities Act? 1. Does the Grant/Trust Explicitly Define the Perpetuities Period/Lives in Being? Previous slides identified Perpetuities Clause commonly employed in trusts: Perpetuities Clause precludes possibility of vesting in interest beyond perpetuity period Perpetuities Clause satisfies both the wait and see approach under Perpetuities Act and the C.L. approach (Which requires certainty from outset) Exemplifies degree of freedom afforded to grantors / settlors to explicitly identify life or lives in being Be careful to ensure that all persons whose lives measure the perpetuity period are capable of qualifying as lives in being Subtle differences in wording can make a big difference Ex. Unto and to the use of X to the use of the first graduate from the Faculty of Law at the University of Western Ontario to win the NBA dunk off within 21 years of the date of death of the last to die of the current players for the Miami Heat. No possible perpetuities problem with this grant b/c executory interest must vest in interest within 21 years of date of death of a permissible identified life in being i.e. The last of the current Miami Heat players to die Ex. Unto and to the use of X to the use of the first graduate from the Faculty of Law at the University of Western Ontario to win the NBA dunk off within 21 years of the date of death of the last to die of all persons who at any time played for the Miami Heat. Possible perpetuities problem with this grant Grant includes as the lives in being persons not necessarily alive at date of grant Recall that life in being must be person alive at date of grant
2. Is the Grantee/Beneficiary of Contingent Estate Alive at the Date of Grant/Trust? Rule against remoteness of vesting complied with if: a. Grantee of contingent remainder/executory interest is alive @ date of grant/trust; AND b. Vesting in interest - If it is to occur at all - Must occurring during lifetime of that grantee In such circumstances, conceptualize the grantee/beneficiary as the life in being Since vesting in interest must occur - if it occurs at all during that grantees lifetime, then it cannot occur beyond perpetuity period (i.e. 21 years after date of death of life in being) Ex. Unto and to the use of X to the use of the first of the students currently enrolled at the Faculty of Law at the University of Western Ontario to earn an Olympic medal. Ex. Unto and to the use of X to the use of the student who stood first in the 2010 graduating class from the Faculty of Law at the University of Western Ontario if he or she becomes Chief Justice of Canada. (Pg. 97) Ex. Unto and to the use of X to the use of the first woman from PEI now living to become Chief Justice of Canada.
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Property Summary 8. RULE AGAINST PERPETUITIES SPRING 2010 Be cautious of grantees/beneficiaries of contingent remainder/executory interests that are defined as a class (Pg. 102) Ex. Children, Issue Concern here is that not all members of class will necessarily be alive at date of grant Ex. Additional children / issue may subsequently be born Compare the following grants: Ex. 1: Unto and to the use of X to the use of the first of Allen Iversons children now living to be drafted by an NBA team. No possible perpetuities problem here Ex. 2: Unto and to the use of X to the use of the first of Allen Iversons issue to be drafted by an NBA team. Possible perpetuities problem here, since vesting in interest could occur outside of the perpetuities period
3. Does CLRR #3- Timely Vesting- Apply? Recall: C.L.R.R. #3 applies in 2 inter vivos circumstances: A. Contingent common law remainder B. Legal executory interest (further to Purefoy v. Rogers) If CLRR #3 applies to a grant, then the grant will necessarily comply with rule against remoteness of vesting IF the following facts exist Grantees of all prior estates are alive at date of grant Compliance with rule against remoteness of vesting will occur here even if grantee of contingent remainder / legal executory interest is not alive at date of grant Ex. (Assume Grant is Inter vivos): To A for life remainder in fee simple to the first child of A to graduate law school. (A is alive but has no children at date of grant.) C.L.R.R. #3 applies Compliance with rule against remoteness of vesting will occur b/c remainder must vest in interest on or before As death No possible perpetuities problem with this grant To understand this result construe A as the life in being Ex. (Assume Grant is Inter Vivos): To X for life then to Xs first born child for life remainder in fee simple to the first born child of Y. (Assume X is alive but Xs/Ys first born child not born yet) C.L.R.R. #3 applies BUT: Contingent remainder in fee simple to 1st child of Y may fail b/c this may vest outside of the perpetuities period To understand this result construe X as the life in being If 1st born child of Y born more than 21 years after death of X, there will be a remoteness of vesting problem Ex. (Assume Grant is Inter Vivos): To A and his heirs to the use of B for life then to the use in fee simple to the first child of B to graduate law school after the death of B. (Assume B is alive but has no children at date of grant.) Statute of Uses applies such that grant is applied as follows: To B for life remainder in fee simple to the first child of B to graduate law school after the death of B. CLRR#3 does not apply (due to Purefoy v. Rogers) Possible perpetuities problem with this grant To understand this result construe B as the life in being Page 85 of 95
J. Alter
Property Summary 8. RULE AGAINST PERPETUITIES SPRING 2010 Ex. (Assume Grant is Inter Vivos): To A and his heirs to the use of B for life then to the use in fee simple to the first child of B to graduate law school. (Assume B is alive but has no children at date of grant) Statute of Uses applies such that grant is applied as follows: To B for life remainder in fee simple to the first child of B to graduate law school. CLRR#3 applies (due to Purefoy v. Rogers) No possible perpetuities problem with this grant To understand this result construe B as the life in being 4. If Perpetuity Problems are not Ruled out by (1), (2), and (3), Who are the Implicit Life or Lives in Being? Key difficulties raised by rule against remoteness of vesting pertain to identifying an implicit life or lives in being Knowing the rules re identification of implicit life or lives in being is secondary to knowing the circumstances in which it is imperative to apply these rules If concerns re remoteness of vesting cannot be resolved via questions (1) - (3), then necessary to apply rules re implicit life or lives in being 5. What if There is No Life or Lives in Being? Be aware that it is possible for there to be no life or lives in being (explicit or implicit) If no lives in being, then perpetuity period is 21 years from date of grant NB: Be cautious of grants that explicitly articulate a period within which vesting is impossible (AKA A Period in Gross) Ex. Unto and to the use of A and his heirs to the use in fee simple of the first person who after the 25th anniversary of this grant completes a marathon in not longer than one hour and thirty minutes. No life in being = perpetuity period of 21 years Grant is void, since vesting within perpetuity period is impossible (Para 4(1)(a) Perpetuities Act) 6. If the interest fails for remoteness is it nevertheless saved by the Perpetuities Act? Perpetuities Act contains various saving provisions designed to prevent select contingent interests from falling offside RARV Consider, for example, subs. 8(1) of the Perpetuities Act: 8(1): Where a limitation creates an interest in property by reference to the attainment by any person or persons of a specified age exceeding twenty-one years, and actual events existing at the time the interest was created or any subsequent time establish, (a) That the interest, would, but for this section, be void as incapable of vesting within the perpetuity period; but (b) That it would not be void if the specified age had been twenty-one years, The limitation shall be read as if, instead of referring to the age specified, it had referred to the age nearest the age specified that would, if specified, have prevented the interest from being so void. Ex. A devises to B and her heirs when B attains age 25 B is 1 year old on date of grant CLRR 2: No springing freeholds, does NOT apply here b/c its a devise; So this estate will be allowed to spring up if/when grantee reaches 25 Lets assume this says C is life in being Tells us something important about condition precedent of B attaining 25 Limited time of the date of grant until the PERPETUITIY DATE which is 21 yrs (+ 1 day) after C dies, before failing for remoteness If the very next day after the grant is devised, C dies, B will not get the grant and it will fail for remoteness (b/c B will only be 22 by that perp date) UNLESS we can invoke s.8(1) Condition creating a condition prec of estate in land but it wont be satisfied during perp period Page 86 of 95
J. Alter
Property Summary 8. RULE AGAINST PERPETUITIES SPRING 2010 BUT if the trust said when B attains age 21, and is 1 yr now if C dies within a few days of the grant being devised, it wouldnt matter b/c it would have been met within the perp period and B would have been 22 before the end of the perp date S. 8 We grind down age 25 as minimally as we have to in order to meet the requirements we grind down the condition precedent until the age of 22, to stop condition estate from failing on remoteness (wouldnt grind it down to 21- b/c we only want to do whats minimally necessary to meet the grant- i.e. 21 yrs after death, B would be 22!)
Conditions Subsequent/Determinable Limitations

Common Law Approach: Recall: Condition subsequent correlates with right of re-entry Determinable limitation correlates with possibility of reverter At C.L., both right of re-entry and possibility of reverter descended to heirs of holder thereof upon his/her death (p. 307 Anger & Honsberger 2nd ed.) Rule against remoteness of vesting at CL did not apply equally to right of re-entry and possibility of reverter Category Right of Re-Entry Applicability of Perpetuity Period C.L. rule was that perpetuity period applied to right of re-entry C.L. rules re perpetuity period were same for contingent remainders/executory interests/ right of re-entry: Perpetuity period was same duration Wait and see approach was not employed @ C.L. Condition subsequent void from the outset if it was even remotely possible that right of re-entry would arise beyond perpetuity period. (p. 96/97) C.L. rule was that perpetuity period did not apply to possibility of reverter. Possibility of Reverter was considered to be vested in interest from the outset (Obviating necessity for perpetuity period).
Possibility of Reverter
Ex. A to B and his heirs for so long as Quebec remains a province of Canada. No remoteness of vesting problems with this grant at common law B holds a determinable fee simple vested in interest / possession A holds a possibility of reverter vested in interest B/c possibilities of reverter were automatically considered vested in interest at common law Since there are no contingent forms of property, no remoteness of vesting problem A to B and his heirs on condition that Quebec remains a province of Canada. Remoteness of vesting problems with this grant at common law B holds a defeasible fee simple vested in interest / possession A holds a contingent right of re-entry Contingent b/c the right of re-entry was regarded as contingent at common law until the condition subsequent was breached However, since As contingent right of re-entry could vest remotely, it is void ab initio (from the outset) at common law Grant is applied under the old common law approach as though it read: A to B and his heirs.
Contemporary Approach: Recall: Perpetuities Act R.S.O. 1990, c. P. 9 effective as of Sept. 6, 1966 (S. 19) J. Alter Page 87 of 95
Property Summary 8. RULE AGAINST PERPETUITIES SPRING 2010 S. 15 of Perpetuities Act enacted key reforms to applicability of perpetuities period to right of re-entry and possibility of reverter Reforms apply equally to legal / equitable estates in land and trusts re personal property 1. Possibility of Reverter Deemed NOT to be Vested in Interest Until Determinable Event Occurs (S. 15(2)) Practical effect is that possibility of reverter is contingent until such time as the determining event arises This allows for application of rule against remoteness of vesting to possibility of reverter 2. Rule Against Remoteness of Vesting Applies to BOTH Possibility of Reverter and Right of Re-Entry (S.15(1)) Determinable estate becomes unconditional if determining event does not occur within perpetuities period Defeasible estate becomes unconditional if right of re-entry for condition broken does not occur within perpetuities period Wait and see approach applicable (S. 3, 4) 3. Unique Perpetuities Period Applies to Possibility of Reverter/Right of Re-Entry Usual perpetuities period of a life or lives in being plus 21 years does not apply Applicable perpetuities period is follows: (S. 15(2)(3), Pg. 656 Oosterhoff on Wills 4th ed.) A) If No Relevant Life or Lives in Being, then 21 Years from Date of Grant/Trust: To X provided that the land is not used for commercial purposes Fee simple subject to condition subsequent becomes unconditonal after 21 years B) If there is relevant life or lives in being, then the life or lives in being plus 21 years to a maximum of 40 years To X so long as land is used for a school during Ys lifetime plus 21 years (Pg. 656 Oosterhoff on Wills 4th ed.) Determinable fee simple becomes unconditional no later than 40 years after grant A devises to B for so long as Quebec remains in Canada Determinable fee simple for B S. 15 of Perp Act says that form of property retained by A is contingent As estate contains a contingent possibility of reverter that will vest if/when Quebec ever secedes from Canada As possibility of reverter is the life and being + 21 yrs with max of 40 If get to 40 yrs window, even if life in being is still alive (or if its not the 21st anniversary et but life in being is dead), the possibility of reverter will not be allowed to vest after that The only way to give effect to the grant w/ possibility of reverter- we have to take out the determinable condition (for so long as part) If it said Failing which to C thats a contingent giftover to C, theres now no maximum of 40, b/c s. 15 only applies when no giftover
Limited Application of S. 15 of Perpetuities Act S. 15 of Perpetuities Act is said NOT to apply if there is a gift over following the determinable / defeasible estate (Anger and Honsberger 3rd ed. at p. 10-83) Ex. 1: A devises to B and his heirs until the land is used for commercial purposes then to C and his heirs. Since this is a devise, CLRRs are not applicable Since there is a gift over to C, s. 15 of Perpetuities Act inapplicable C holds contingent remainder (i.e., contingent upon land being used for commercial purposes) Contingent remainder to C will be void unless it vests within the usual perpetuity period (i.e. Life in being + 21 years) Ex. 2 (Contrast with Ex. 1): A devises to B and his heirs until the land is used for commercial purposes. Page 88 of 95
J. Alter
Property Summary 8. RULE AGAINST PERPETUITIES SPRING 2010 No gift over following Bs determinable fee simple = s. 15 of Perpetuities Act applies S. 15 of Perpetuities Act deems As possibility of reverter to be contingent upon land being used for commercial purposes As possibility of reverter will be void unless it vests within 21 years (i.e., unless land is used for commercial purposes within 21 years) If As possibility of reverter does not vest within 21 years, then Bs determinable fee simple becomes an unconditional fee simple
J. Alter
Page 89 of 95
9. CONCURRENT ESTATES
Concurrent Estates
Introduction
Estates in land may be divided through time To A for life with remainder to B and his heirs. A holds life estate Vested in interest and possession B holds remainder in fee simple Vested in interest with vesting in possession delayed until death of A Estates may also be vested in 2 or more persons at the same time (i.e., Concurrent estates) To A and B and their heirs. A and B each have a fee simple estate vested in interest and possession at the same time Joint tenancy (JT) and Tenancy in common (TIC) are the two ways in which concurrent estates in land is possible A and B may hold estate in fee simple concurrently as Joint Tenants A and B may hold estate in fee simple concurrently as Tenants in Common
Similarity Between Joint Tenancy and Tenancy in Common JT and TIC share an important similarity Unity of possession (Pg. 105) Every joint tenant has equal right to possession of entire land Every tenant in common has equal right to possession of entire land True even if tenants in common hold estate in unequal shares Differences Between Joint Tenancy and Tenancy in Common 2 Key Differences: A. Right of Survivorship B. Unities (JT has 4, while TIC has 1- Possession) Right of survivorship is the main difference b/w the 2 The unities thing is just how you identify the right of survivorship A. Right of Survivorship Right of survivorship applies only in relation to JT Death of one JT results in his or her share of the estate passing by right of survivorship to the surviving JT Estate held in JT does not get distributed pursuant to the provisions of will or the SLRA intestacy rules Joint tenancies are sometimes described as a Will Substitute TIC on the other hand - Does not pass by right of survivorship Death of a tenant in common does not result in his or her share of an estate in land passing by right of survivorship to the surviving TIC Death of tenant in common results in his or her share of an estate in land being distributed pursuant to either the provisions of the will or the SLRA intestacy rules What if all JTs die in circumstances making it impossible to determine who survived whom? S. 55 of SLRA contains provisions on point: 55. (1) Where two or more persons die at the same time or in circumstances rendering it uncertain which of them survived the other or others, the property of each person, or any property of which he or she is competent to dispose, shall be disposed of as if he or she had survived the other or others. J. Alter Page 90 of 95
Property Summary 9. CONCURRENT ESTATES SPRING 2010 (2) Unless a contrary intention appears, where two or more persons hold legal or equitable title to property as joint tenants, or with respect to a joint account, with each other, and all of them die at the same time or in circumstances rendering it uncertain which of them survived the other or others, each person shall be deemed, for the purposes of subsection (1), to have held as tenant in common with the other or with each of the others in that property. What if A + B die in a common accident look to As will- my estate to B, if B survives me, failing which, C; Bs will my estate to A, if A survives me, failing which, C But we dont know who survived whom? This section tells us that the prop will be disposed as if the will-writer survived the other If JT die together and we dont know who survives whom, (2) tells us to sever the JT No right of survivorship; just tenants in common B. Unities JT exists only if all 4 unities are satisfied TIC only requires unity of possession Unity Unity of Possession Unity of Interest Description Applicable to both JT and TIC Each co-owner has equal right to possession of the land Note that it is equal right to possession and not equal possession in fact Applicable only to JT Interest of each co-owner is identical in duration, nature and extent Duration: Each co-owner holds a life estate, fee tail estate or fee simple estate Nature: Each co-owner holds legal, equitable or both legal/equitable estate Extent: Each co-owner has equal share JTs cannot hold in unequal proportions Applicable only to JT JT requires vesting in interest to occur at the same time if the grant is an inter vivos grant of legal estate This means it ONLY applies to CL estates. It does NOT apply to things that have become legal (vs. Equitable) thru Statute of Uses. Neither of following two grants render unity of time: (p. 106/7) To C for life, remainder to Cs children who attain 21 years of age. To A for life, remainder to children of B and C and heirs who survive their father. (unless B and Cs father die simultaneously, they wont vest in interest at the same time) Unity of time not required for JT to arise in context of devise or trust. Applicable only to JT Interest of each co-owner derives from the same instrument (i.e. Grant /Trust).
Unity of Time
Unity of Title
How do you have a JT with a life estate: To A and B until the last to die of A + B So if A passes first, As estate would inherit nothing and the life estate would continue solely for B For the life of C So when A dies, As share passes to B, and that would continue until the measuring life passes
J. Alter
Page 91 of 95
Identifying JTs and TICs

Issues to Consider: 1. Language Employed in Grant/Trust 2. Presence/Absence of 4 Unities at Date of Grant/Trust 3. Severance
1. Language Employed in Grant/Trust On or Before July 1, 1834: C.L. presumed JT unless contrary intention was shown To A and B and their heirs. A and B presumed at C.L. to hold estate in fee simple as JTs C.L. presumption of JT could be rebutted by words of severance (Pg. 104) Magic Words of Severance Would Create TIC at CL In equal shares Share and share alike To be divided between To be distributed in joint and equal proportions Equally X to take 1/3 share and Y to take a 2/3 share In equal moieties Respectively Between Amongst Severally After July 1, 1834: C.L. presumption has been reversed by S. 13 of Conveyancing and Law of Property Act: 13. (1) Where by any letters patent, assurance or will, made and executed after the 1st day of July, 1834, land has been or is granted, conveyed or devised to two or more persons, other than executors or trustees, in fee simple or for any less estate, it shall be considered that such person took or take as tenants in common and not as joint tenants, unless an intention sufficiently appears on the face of the letters patent, assurance or will, that they are to take as joint tenants. (2) This section applies notwithstanding that one of such persons is the spouse of another of them Less Estate = Estate Shorter than fee simple (i.e. Life estate) Clear language now required to create JT Phrase commonly suggested: To A and B in fee simple as joint tenants and not as tenants in common. Do Beneficiaries under SLRA intestacy regime inherit as JTs or TICs? S. 13 of Conveyancing and Law of Property Act does not apply in instance of intestacy Only applies in context of letters patent, assurance or will Intestacy beneficiaries will inherit as TICs for following reasons: 1. Intestacy beneficiaries may inherit in unequal shares Recall the preferential share for surviving spouse Unequal shares precludes JT b/c no unity of interest 2. S. 14 of Estates Administration Act, R.S.O. 1990, c. E. 22 14. Where real property becomes vested under this Act in two or more persons beneficially entitled under this Act, they take as tenants in common in proportion to their respective rights, unless in the case of a devise they take otherwise under the will of the deceased. Appears to apply to intestacy beneficiaries J. Alter Page 92 of 95
Property Summary 9. CONCURRENT ESTATES SPRING 2010 S. 2 of Estates Administration Act provides that a deceaseds personal representative hold his/her real estate as trustee for persons beneficially entitled thereto 2. Presence/ Absence of 4 Unities at Date of Grant/Trust Even if JT language used, no JT can exist unless the 4 unities are satisfied at time of grant/trust (Pg. 77 OLRC (1996) Report on Basic Principles of Land Law) TIC will exist in default of all 4 unities Since unity of possession is common to both JT and TIC, it is necessary to consider the remaining 3 unities Is There Unity of Time? Necessary to consider time of vesting If grant is inter vivos legal estate, then no unity of time without simultaneous vesting in interest Is There Unity of Title? Did both co-owners receive their estate under the same instrument? Is There Unity of Interest? To A for life and to B in fee simple (Pg. 660 Mossman 2nd ed) No unity of interest b/c simultaneously A holds life estate and B holds fee simple To A and B and their heirs in the respective proportions of 3/5 and 2/5. No unity of interest b/c unequal proportioning 3. Severance Severance = Conversion of JT into a TIC Severance can happen in following circumstances: A. Operation of Law B. Destruction of 4 Unities C. By Agreement A. Severance by operation of Law: Various rules of law sever JTs in several circumstances Bankruptcy of a joint tenant severs the JT (Pg. 669 Mossman) Family Law Act, R.S.O. 1990, c. F.3 demonstrates you should be wary of holding estate in JT with a married person (Who is not your spouse) 26. (1) If a spouse dies owning an interest in a matrimonial home as a joint tenant with a third person and not with the other spouse, the joint tenancy shall be deemed to have been severed immediately before the time of death. Trying to catch situations where A&B occupy home as matrimonial home but B&C own title to that home as JTs. What happens if B dies? That would mean estate would pass to 3rd party (C) leaving surviving spouse A out of luck. Law doesnt like this. So Bs TIC becomes an asset of Bs estate Alternative fact pattern: A&B live in matrimonial home but B&C own it and C&D are married. Where a married person owns a JT in a mat home w/a 3rd party, when B dies it wont go to C, theyll sever it, so Bs half could, if Bs will says so, go to A. Problem: Also caught by this scenario which it probably shouldnt be A+B are married, C+D are married, Were concerned about C+Ds matrimonial home and B and C are joint tenants If B dies, the normal course of things would transfer all the property to C BUT this provision is drafted in such a way that severs the JT so 50% of it could be left to A J. Alter Page 93 of 95
9. CONCURRENT ESTATES Should have said where they hold in an interest in HIS/HER matrimonial home (instead of A matrimonial home)
B. Severance by Destruction of 4 Unities: 4 unities are necessary from the outset to create a JT BUT 4 unities must continue in order for JT to continue JT may be severed by destroying 1 of the 4 unities Usually done by destroying unity of title or unity of interest (Pg. 90 OLRC (1996) Report on Basic Principles of Land Law) Destruction of Unity of Title: Unity of title = Interest of each co-owner derives from same instrument Unity of title destroyed if a joint tenant alienates his interest (b/c now not all co-owners will have derived interest from same instrument) (p. 107, Pg. 90 OLRC (1996)) Joint tenant can alienate his interest to himself under Conveyancing and Law of Property Act in order to destroy unity of title (p. 96 OLRC (1996) Report on Basic Principles of Land Law) 41. A person may convey property to or vest property in the person in like manner as the person could have conveyed the property to or vested the property in another person Example with 2 Joint Tenants: A and B hold fee simple estate as joint tenants. A alienates his estate to C As alienation to C destroys unity of title B and C now hold as TICs in equal shares Example with more than 2 Joint Tenants: A, B and C hold fee simple estate as joint tenants. A alienates his estate to D As alienation to D destroys unity of title as between D - on the one hand - and B and C on the other hand Unity of title continues to exist as between B and C B and C remain JTs as to 2/3 of estate D holds as TIC as to 1/3 Example with more than 2 Joint Tenants: A, B and C hold fee simple estate as joint tenants A alienates his estate to B As alienation to B destroys unity of title as between B and C (but only in relation to the share alienated from A to B) Unity of title continues to exist as between B and C in relation to their original shares B and C remain JTs as to 2/3 of estate B holds as TIC as to 1/3 Destruction of Unity of Interest: Joint tenant can destroy unity of interest by declaring him/herself to hold the interest as trustee for a beneficiary (Pg. 90 OLRC (1996) Report on Basic Principles of Land Law) Destroys unity of interest b/c after declaration of trust the interests of each co-owner cease to be identical in nature i.e. One co-owner (the trustee) will hold legal title only and other co-owner(s) will hold both legal / equitable title BUT: this destroys unity of interest only in the eyes of equity Example: A and B hold estate in land in fee simple as JTs. A declares himself trustee of his share for C. C.L. continues to regard A as JT. If B subsequently dies, A will be sole legal owner of fee simple estate
J. Alter
Page 94 of 95
BUT: equity will regard A as holding 1/2 of fee simple estate on trust for C and 1/2 of fee simple estate on trust for Bs estate A + B = Legal; A+ B = Beneficial title BUT if A holds the legal title in trust for C as beneficiary, A is removed from the picture and C + B are held as tenants in common Does the granting of a life estate by one JT of a co-owned fee simple estate sever the JT? To A and B and their heirs as joint tenants and not as tenants in common. What A if subsequently grants a life estate to C? A to C for life. A retains a fee simple in reversion Has the joint tenancy between A and B been severed? Case law divided on whether a grant of a life estate by one JT of a co-owned fee simple estate destroys unity of interest
C. Severance by Agreement: Law will enforce an agreement to sever JT Agreement can be implicit or explicit
J. Alter
Page 95 of 95

Property Summary - Spring 2010

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Property Summary - Spring 2010

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Property Summary SPRING 2010

Decline of Tenure ..................................................................................................................................................................9

Freehold Estates: ................................................................................................................................................................................. 13

Who Takes in What Proportion- Examples: ............................................................................................................................ 18

Escheats Act, R.S.O. 1990, c. S.26: ............................................................................................................................................ 20

FREEHOLD ESTATES ............................................................................................................................... 22