Simran CAD Property Synthesized Notes Winter 2022

uses of land that would threaten future relationship of aboriginal community with its land are excluded from content of aboriginal title TEST: To make out claim of aboriginal title, aboriginal group must show: 1) Sufficiency: land occupied prior to time when Crown asserted sovereignty over land a. Prove physical fact of occupation and prove communal occupation (ex. Huts, areas to cook, living spaces) 2) Continuity: if present occupation relied on as proof of occupation pre-sovereignty, must be continuity between present and pre-sovereignty occupation 3) exclusive evidence of territorial occupation: at sovereignty, that occupation must have been exclusive. Aboriginal rights recognized and affirmed in s 35(1) are not absolute. Rights may be infringed by federal and provincial governments. But infringements must satisfy test of justification. Test for justification: 1) Infringement must be in furtherance of legislative objective that is compelling and substantial . Compelling & substantial objectives were those directed at one of purposes underlying s 35(1), i.e., recognition of prior occupation by aboriginal peoples; reconciliation of aboriginal prior occupation with Crown assertion of sovereignty, e.g., conservation of fisheries, pursuit of economic & regional fairness, recognition of historical reliance on fishery by non-aboriginal groups. 2) Infringement must be consistent with special fiduciary relationship between Crown and aboriginal peoples . Fiduciary relationship requires that aboriginal interests must be protected. Degree of scrutiny required by fiduciary duty depends on nature of aboriginal right at issue, e.g., must give top priority to aboriginal right to fish for food, which has an internal limi t, but not to aboriginal right to sell fish commercially, where government not required to give monopoly to sell but must allocate resource in manner that respects aboriginal right. CONCLUSIO N New trial granted – case is still unresolved Aboriginal title was part of the protected core of “Indianness,” therefore, a prov law of general application can’t extinguish Aboriginal title NOTES **The biggest difference between the Delgamuukw case versus the Tsilhqot’in Nation case is that in the Delgamuukw case, the indigenous people on that piece of land were not nomadic, so they were using extensive use of the land and they were fishing and hunting and all that kind of stuff. But in the Tsilhqot’in Nation case, they were a nomadic group, so they only used the land extensively for a couple period of months and one of the facts was that it was because there was a lot of harsh conditions in the winter which actually prevented them from staying extensively on the land. The test is still the same that comes out from Delgamuukw, but the court in Tsilhqot’in Nation basically says that you can still find aboriginal title even if the group was nomadic because essentially the holding in Delgamuukw was that the group itself has to constantly be there and make extensive use of the land. But then this new case came about, and they were different because they were trying to assert Aboriginal title while not using the land as extensively, only using it a couple months of the year. The importance of this case was that the court rejected the position that Aboriginal title is limited to historical use of the land. In other words, you can use the land for other things, it doesn't have to necessarily be just for fishing or just for hunting, so it doesn't have to be limited to a specific type in usage of land. The next important thing from this case is the idea of sui generis (it's an interest in land, it’s a class of its own, that means we're not using common law property when we're talking about Aboriginal title, that it's an entirely different concepts). It cannot be sold or transferred. The Sui generis concept does not restrict use of land, so you can even use the land in a way that you didn't use it in the past. So essentially if, one Indigenous tribe is using it to constantly fish, but then they have children who have children and the next thing you know, we're now using it to exclusively hunt or 3

 R. v. Pamajewon (1995) – lottery activities not protected by s. 35(1); First Nations failed to demonstrate that the regulation of gambling was an integral part of their distinctive cultures according to the test for establishing Aboriginal rights set out in R. v. Van der Peet o S. 35(4) site of conflict over Indigenous autonomy because of its requirement for gender equality within the rights protected under 34(1) has sometimes been inconsistent with traditional conceptions of gender relations  Sawridge Band v. Canada (1995) – band had marital custom that permitted an Indian husband, but not a wife, to bring a non-Indigenous spouse into residence on the reserve, the gender equality requirement was regarded as incompatible with the protection of traditional activities under 35(1)  Gender issues have continued to be litigated o Courts have sometimes been hesitant to recognize Aboriginal title to land  Chippewas of Sarnia Band v. Canada (2001) – Aboriginal title extinguished, but not by voluntary surrender or statute  “regardless of the legal validity of their claims, judges will not necessarily allow those claims to prevail if they conflict with the claims of other Canadians who did not participate in and were not aware of the wrongs that were committed.” (McNeil) o R v Pamajewon – held that lottery activities that infringed sections of the CC were not protected by s.35, because the First Nations accused failed to demonstrate that the regulation of gambling was an integral part of their distinctive cultures according to the test for estabilishing aboriginal rights set out in R v. Van der Peet . o S. 35(4) has also been a site of conflict over indigenous autonomy, because its requirements for gender equality within the rights protected under s.35(1) has sometimes been inconsistent with traditional conceptions of gender relations o Sawbridge Band v Canada – P sought a declaration that the 1985 amendments to the Indian Act were inconsistent with s.35 because they required the community to practice gender equality when determining band membership, regardless of traditions of the community. But this went directly against the communities tradition of only allowing indian husbands to bring non-indian spouse onto residence on the reserve  Trial : didn’t limit analysis to s.35(1) but interpreted this section in conjunction with s.34(4).  Resolution of gender equality issues in this context is fraught with difficult challenges because of the need to take account of both historical traditions and the contemporary context o Courts have been reluctant to hand down declarations of aboriginal title to land if the it conflicts with titles held by non-Abo’s  Chippewas of Sarnia Band v Canada – court held that abo title had been extinguished, but not by voluntary surrender or by statute. D. The Impact of Delgamuukw  Despite its shortcomings, the decision could bring in a new era for Aboriginal rights in Canada  Right of Aboriginal peoples to participate as equal partners in resource development on Aboriginal lands has been acknowledged  Lamer CJ emphasized need for reconciliation  Decision appeared to require courts to take account of both common law and Aboriginal perspectives to define such titles in the future, a requirement that proved challenging  R. v. Marshall (2005) and R. v. Bernard (2005) o SCC decision concerning Mi’kmaq logging rights in Atlantic Canada o Accused in both cases relied on either treaty right to log or a claim of Aboriginal title w/r/t forest land in question o McLachlin CJ – tests of Aboriginal title from trial court was valid, varying from Delgamuukw; greatly favoured the common law conception of property over Aboriginal perspective 6

(2) Aboriginal title may be violated for a pressing and substantive objective, provided there is consultation proportionate to the claim, and the violation is consistent with the Crown's fiduciary duties (I.e. does not seriously harm future generations). (3) Aboriginal title entitles group to exclusive use and occupation of land (can go beyond traditional uses), but cannot be inconsistent with future generations enjoyment. ANALYSIS The Supreme Court, led by McLachlin CJ, unanimously allowed the appeal. They ruled that the Tsilhqot'in did have a claim of Aboriginal title to the 1,750 square kilometres (680 sq mi) region they had historically occupied. Aboriginal title The court held that Aboriginal title constitutes a beneficial interest in the land, the underlying control of which is retained by the Crown.[4] Rights conferred by Aboriginal title include the right to decide how the land will be used; to enjoy, occupy and possess the land; and to proactively use and manage the land, including its natural resources. But, the court set out a Sparrow-style mechanism by which the Crown can override Aboriginal title in the public interest: 1. the Crown must have carried out consultation and accommodation; 2. the Crown's actions must have been supported by a compelling and substantial objective; and 3. the Crown's action must have been consistent with its fiduciary obligation to the Aboriginal body in question - Aboriginal land rights survived settlement unless otherwise extinguished (Calder v Attorney General BC) - The perspectives of common law and Aboriginal law bear equal weight. (1) Pre-sovereignty use to guarantee title must be: A. SUFFICIENT: - Abor. perspective: laws, practices, customs, and traditions. Size, manner of life, material resources, technology - Common Law perspective: context-specific possession and control. - How many people can land handle. Not limited to villages/towns buildings, but nomadic practices may not qualify - Acted in a way that communicated possession to third parties - Not as much as adverse possession but not purely subjectvie or constructive either - Analogous to general occupancy rights B. CONTINUOUS: Need not show unbroken chain, only pre-sovereignty presence C.EXCLUSIVE: Must have had capacity and intention to retain exclusive control (Delgamuukw) - e.g. granted permission for others to enter; had trespass laws APPLICATION TO FACTS: Land was regularly used by small population. Both archaeological and traditional evidence showed continuous use. They repelled intruders and demanded people ask permission for use.--TEST CLEARLY MET (2) (R v Sparrow) laws can only violate S.35 if they (a) further a compelling and substantial purpose, (b) there is consultation, and (c) take account of Crown's fiduciary role. A. The goal must be considered from both the public and Aboriginal group's perspective - What counts as pressing and substantial is pretty broad (e.g. economic development, environmental protection, infrastructure, etc.) B. The consultation must meet the following criteria: - The Crown must be aware of the title and potential adverse consequences - It must consult ahead of time if possible - The consultations must be proportionate to the strength of the claim - Where interest is unproven, Crown owes a duty of honour to consult and attempt to accommodate 9

 Delgamuukw establishes that Aboriginal title “encompasses the right to exclusive use and occupation of the land held pursuant to that title for a variety of purposes A. The Legal Characterization of Aboriginal Title  Terra nullius - that no one owned the land prior to European assertion of sovereignty - never applied in Canada  Aboriginal title is sui generis (unique) B. The Incidents of Aboriginal Title  Aboriginal title confers ownership rights similar to those associated with fee simples  Important restriction: it is collective title held not only for the present generation but for all succeeding generations  So, Aboriginal title cannot be alienated except to the Crown or unencumbered in ways that would prevent future generations of the group from using or enjoying it  The right to control the land conferred by Aboriginal title means that governments and others seeking to use the land must obtain consent from the Aboriginal title holders C. Justification of Infringement  To justify overriding the Aboriginal title group’s wishes on the basis of the broader public good, the government must show: o That it discharged its procedural duty to consult & accommodate o That its actions were backed by a compelling and substantial objective o Thaa the governmental action is consistent with the Crown’s fiduciary obligation to the group  If a compelling and substantial public purpose is established, the government must show that the proposed incursions on the Aboriginal right is consistent with the Crown’s fiduciary duty o The Crown’s fiduciary duty means that the government must act in a way that respects the fact that Aboriginal title is a group interest that inheres in present & future generations o This duty also infuses an onglibation of proportionality into the justification process D. Remedies & Transition  Prior to establishment of Aborignal title, the Crown owes a good faith duty to consult with the group concerned and accommodate its interests  As the claim strength increase, the required level of consultation and accommodation also increases E. What Duties were Owed by the Crown at the Time of the Government Action?  Prior to the declaration of Aboriginal title, the province had a duty to consult and accommodate the claimed Tsilhqot’in interest in the land VII. BREACH OF THE DUTY TO CONSULT  Where legislation affects an Aboriginal right under s. 35, two inquiries are required: o Does the legislation interfere with or infringe the Aborignal right? o If so, can the infringement be justified?  A court must first examine 3 relevant incidents on the right at stake: o The right to exclusive use and occupation of the land o The right to determine the uses to which the land is put, subject to the ultimate limit that hose uses cannot destroy the ability of the land to sustain future generations o The right to enjoy the economic fruits of the land  Three factors aid in determining whether an infringement has occurred: o Whether the limitation imposed by the legislation is unreasonable o Whether the legislation imposes undue hardship o Whether the legislation denies the holders of the right their preferred means of exercising the right  To justify an infringement, the Crown must demonstrate that: o It complied with its procedural duty to consult with the rights holders and accommodate the right to an appropriate extent o The infringement is backed by a compelling and substantial legislative objective in the public interest o The benefit to the public is appropriate to any adverse effect on the Aboriginal interest IX. CONCLUSION  The court grants Aboriginal title over the area at issue to the Tsilhqot’in  British Columbia breached its duty to consult owed to the Tsilhqot’in through its land use planning and forestry authorizations 12

Important part from this case is that it lays out the considerations a court will consider when a car park arrangement is a bailment or license and they talk about the obligations of parking lot operators and whether they were altered by the liability clause, which in this case was an exculpatory clause that limited liability. FACTS Heffron (Plaintiff/Respondent) left his part in the Appellants’ (Imperial Parking Co.) parking lot, paying the evening flat rate and received a ticket in return. The ticket had an exclusion clause mentioning that the lot is not responsible for car/contents Trial Judge ruled in favour of plaintiff and awarded $1251,92 The respondent left the keys in the automobile at the request of the appellants' attendant The trial judge came to the conclusion that the appellant took all reasonable measures to communicate the parking conditions and the hours of operation to the respondent, by stating them on the ticket and signs displayed in the parking lot. Respondent returned to the parking lot an hour after it had closed and could not locate his car  Found three days later (abandoned and damaged) The following factors support the relationship of bailor-bailee: - The owner of the car delivered the keys and therefore the control over the movement of his automobile to the attendant at the attendant's request; - The parking ticket had a serial number which would indicate that the surrender of the specific ticket would be necessary in order to obtain delivery from the attendant of the automobile; - The provision of the attendant raises a reasonable inference that he is supplied by the owner of the business for more than the mere function of receiving money upon the parking of the car; - The parking lot closed, according to the conditions announced on the ticket and signs, at midnight and no conditions were imposed concerning the removal of cars prior thereto; - The notice of a closing hour reasonably infers an active operation, of the parking lot rather than a passive allotment of parking stations from which the car owner could at any time, day or night, unilaterally withdraw his parked vehicle; and - The practice of the parking lot owner (although unknown to the owner of the car) was to place the keys left in automobiles at the end of the day in the office of the appellants' car parking garage across the road. ISSUE Issue #1: Whether there was a bailment or license Issue #2: Liability clause RATIO/RULE ANALYSIS Issue #1: Whether there was a bailment or license - The court said that Bailment is the delivery of personal chattels and trust on a contract, whether expressed or implied, that the trust shall be duly executed an the chattels re delivered in original or altered form (page 403) - A license is the grants of authority to another to enter land for an agreed purpose and usually for specific time. If the license is taken away, then you're going to be deemed a trespasser, essentially. - To have a bailment, you have to have a delivery by the dealer, and he must part or give way with his possession of the chattel. In this case, the car. - They list out factors which favor the existence of a bailor-bailee relationship and not a licensor- licensee. Issue #2: Liability clause - The court was basically looking to see. I'm like, yes, there was a bailor-bailee relationship, but now should they get out of this liability? They said no. The reasoning was that both the signs on the lot and the tickets said that the lot was closing at midnight and when the opponent asked the respondent to leave the keys in the car, an implied duty of a appellants to take reasonable steps at the close of business to recover his car, protecting the keys in the car from loss, even if the 15

o Bargain promises typically occur in a commercial context where there is a need to enforce the expectations of contracting parties  By contrast, a transfer by way of gift involves a gratuitous, unilateral transaction, often referred to as a "non-bargain promise." o Non-bargain promises are unenforceable in the law of contract, although it may be possible to create a legally enforceable unilateral promise if the promise includes nominal consideration (known as "the peppercorn requirement" in contract law). o Non-bargain promises, such as gifts among family members and friends, may seem to be less important matters for legal regulation.  Some critics have suggested that to consider transfers by way of sale and gift only in economic terms is to miss the point. o Example: Wedding presents "transfer material capability, but also cement relations between groups and mark important changes of status for the partners to the marriage" o Some property interests that are transferred by way of gift are enforced by law and sometimes by equity  Principles of equity are important in the effective transfer of property interests. o For example, a number of modern equitable principles are relevant to an understanding of gift transactions; and equity is also a significant part of sale transactions, especially in the context of contracts for the sale of land and the doctrine of part performance. o Equities are also important in family property arrangements o Equitable principles were relevant in the creation of the modern law of mortgages, and they are also used in defining priorities among competing interests in land and personal property in the context of modern registration systems.  Legal principles for transfers of property interests represent a major focus of lawyers' work.  Some transfers of property interests do not require lawyers o For example: most people give birthday presents without the assistance of a lawyer. However, even the giving of birthday presents may sometimes necessitate lawyers and, in some cases, even involve litigation. o In Michael Gruen v Kemija Gruen, 68 NY 2d 48, 496 NE 2d 869 (CA 1986), a successful architect in New York, Victor Gruen, wrote to his son, Michael, to tell him that he was giving him a painting by Gustav Klimt to mark Michael's 21st birthday. A short time later, Victor Gruen sent a second letter (replacing the first one) to his son to announce the gift, explaining that his lawyer had concluded that the wording of the first letter would have attracted tax liability. (The painting had been purchased in 1959 for $8,000 but was valued at the time of the litigation in 1986 at $2.5 million.)  This case suggests how lawyers may sometimes be critical to the efficacy of gift transactions, as well as with respect to the purchase and sale of real property. II. Transferring Property Interests by Gift A. Gift Relationships  As a non-bargain promise, a gift does not attract legal regulation in the same way as a contract.  However, gifts may have great social significance: o At the core of it, lawyers look at gifts as a unilateral transaction o Gifts are not treated as a mode of exchange o The legal definition of gift differs significantly from the social meaning of gift in many cultures o In some societies, giving gives you prestige  Gifts and gift giving attracted legal regulation in Canada in the 19th century in relation to cultural practices in Indigenous communities.  Beginning in 1884, the Indian Act (now RSC 1985, c 1-5) made the ceremony of "potlatch" an indictable criminal offence among Indigenous people.  In traditional Indigenous culture in British Columbia, a potlatch (meaning "to give") is a ceremony given by a family to display its hereditary possessions-including dances, songs, and carvings-and ends with the distribution of gifts to those in attendance.  The traditional ceremony of potlatch changed with increasing contact between Indigenous people and European settlers and traders, so that the quantity and commercial value of gifts being distributed increased substantially.  These changes attracted government attention and resulted in the enactment of a series of amendments to the Indian Act that were designed to curtail potlatches.  The government expressed concerns about the wastefulness of the potlatch ceremonies, suggesting that they represented "the antithesis to the twin pillars of the Protestant work ethic: industry and sobriety." However, Tina Loo identified anthropological interpretations of the potlatch that showed that it was not so different from celebrations in European cultures.  The prohibition against the potlatch was removed from the Indian Act in 1951  In 1904, the feasting, dancing, singing, and use of masks at a potlatch were not so different from some European celebrations o Examples: Christmas 18

ANALYSIS Where consideration is given, possession is regulated by the Sale of Goods Act which causes possession to pass when the parties intend that it should In the absence of consideration, delivery is necessary except in the case of gift by will or deed – need both consideration and delivery for this  gift of chattels not complete unless accompanied by something which constitutes act of deliver or change of possession. Wife believed furniture to be hers but never became so because gift was never perfected in absence of delivery Irons v Smallpiece (leading case on delivery)  in order to transfer property by gift there must either be a deed or instrument of gift, or there must be an actual delivery of the thing to the done. In order to do an oral gift, there must be a change of possession. Possession never changed hands. Husband trying to get creditors off his back, if he had given it away to his wife it would no longer be part of his property and they wouldn’t be able to touch it, no change of possession. There is no delivery here – when it comes to gifts between couples, the court will look to circumstances to determine whether there was a gift (to prevent fraud) Valier v Wright : action concering car said to be gift from husband to wife – court held there was no gift because no actual or constructive delivery CONCLUSIO N Appeal dismissed; this was not a gift because it was never perfected Detailed Judgment : The case establishes that a gift of chattels cannot be perfected by showing them to a donee and stating words of gift. In order to establish a gift there are three requirements. Namely, perfecting a gift requires 1) Intention 2) Delivery and 3) Acceptance. In this case Mr Cole had, by words, shown intention to make a gift to Mrs Cole. He had not however, delivered anything to her, and she had not accepted anything. Therefore, in this case it was held that physical delivery (and some form of acceptance) is required by law to perfect a gift. Discussion Notes  i. Delivery in the Context of Common Possession of the Donor and Donee o Langer v McTavish Brothers :  Man brought his fiancée to a new home, showed her furniture, and declared “its all yours”  Court held that there was a valid gift, taking into account the nature of the property and the circumstances of the parties o Mackedie Estates v Mackedie (1998): father gave paintings to his son each birthday for five years, paintings were taken off the wall, wrapped and each gift had “happy birthday Graeme” on it. When the dad died, he left the paintings to someone else. Court found that there was a clear intention by the father to make a gift, including the written endorsements by the mom that were known to the father and that the presentation of the paintings as wrapped birthday gifts constituted delivery even though they remained in possession of the dad.  ii. Constructive (and symbolic) delivery o A valid gift does not require simultaneous delivery of possession – expression of intention that is preceded or followed by delivery may suffice o Courts have permitted constructive delivery where the chattel is too large or difficult to transfer easily (i.e. car)  Delivery of the “means of control” (i.e. keys to the car) may be sufficient. The factual context will be examined to ensure that the donor has done everything possible to part with possession.  In a case where a donor placed a gift in his safety deposit box, and gave a duplicate key to the donee, the court concluded that there was no change in the donor’s control over the subject matter of the alleged gift. o Symbolic delivery – for example, if a donor gives a photo of a car, using words of gift, it may be argued that there has been symbolic delivery  Ziff (p.163) – there is little authority on which to base the view that symbolic delivery is enough to complete a gift 21

 Brown (92) – the surrender of power and dominion is the heart of the delivery concept, and without it a mere symbolic delivery is customarily declared to be insufficient  iii. “Delivery” of a Gif Inter Vivos by Cheque o In Teixeira v Markgraf Estate an elderly woman (M), who wanted to reward the kindness of her neighbour (T) for assistance he had provided for nearly 15 years, gave T a cheque for $100,000, with instructions that he should take it to her bank the next day. (At the same time, she included a bequest to Tin her will of an additional $100,000.) When T submit- ted the cheque for payment at the bank. the bank employee explained that it was necessary for the bank to make some inquiries and returned the cheque. At the time, the bank employee did not explain that M's chequing account did not have sufficient funds to permit payment of $100,000; and although M had over $200,000 in other funds on deposit at the bank, she had not given permission to the bank to transfer funds from one account to another. M died six days later; and when the bank was notified of her death. her funds were frozen. Although T had later attempted to deposit the cheque at his own bank, it was returned, marked "funds frozen." o When M's estate trustee advised T that he would receive $100,000 pursuant to the will, but that the cheque was an 'imperfect gift" and legally unenforceable, T started a legal action to obtain the $100,000 gift by cheque. The application judge held that T had assisted M without thought of compensation; that there was no contract between M and T; and that T had not acted to his detriment in anticipation of receiving the funds related to the cheque. However, although the judge concluded that the requirements of intention on the part of the donor and acceptance on the part of the donee had been met. he held that there had been no delivery because M did not have sufficient funds in her account. T appealed. o The appeal court rejected T's claims b b. Intention Questions in textbook: A second requirement for a valid gift is the donor's intention to make a donative transfer. In reading the following case, note carefully the factors relied on by the court to determine the donor's intent. In addition, since the court also (briefly) considered the issue of delivery, consider whether, or to what extent. these two issues were connected in the court's assessment of the unusual context of Dylan Thomas's lost manuscript? Thomas v. Times Books Co LTD [1966] 1 WLR 911 (Ch D) Plaintiff : Thomas Defendant : Times Book Co LTD Area of Law : Intention FACTS Thomas calls Cleverdon about losing the manuscript to his book. Cleverdon had it stenciled earlier so he said he would bring copies to Thomas at the airport before his flight. Thomas said to Cleverdon that if he could find the copy he lost, Cleverdon could keep it and told him the name of a dozen pubs he had visited that day. ISSUE Did Thomas make a gift to Cleverdon? RATIO/RULE  court must consider : 1. The circumstances of the donor 2. Relationship between the donor and done 3. Size of the gift in relation to the entirety of the donors property ANALYSIS There was sufficient intention and delivery; Thomas gave cleverdon the means to find the manuscript – this was interpreted by the courts as all that Thomas could do to give Cleverdon control of the manuscript (there was intent on the part of Thomas to tell Cleverdon to locate it Decision hinged on the circumstances of the case; the day Thomas gifted the manuscript to cleverdon, cleverdon informed his secretary and others that he had been given a gift by Thomas Court took notice that Thomas was a spontaneous person and wasn’t incompatible with his personality to give gift such as that. Question of delivery – description of how to find the manuscript was equivalent to delivery/transfer of possession Onus of proof is on the defendants CONCLUSIO N Action dismissed with costs; Thomas made a gift of the manuscript to Cleverdon NOTES Tells us about present words of gift, what we need to consider when the donor had intention, what type of 22

evidence we need if the donor is good, talks about who has the onus Discussion Notes  Evidence, Presumptions and Onus o Circumstantial evidence must be verified o In Canada it is mandatory that the court look for independent verification of a claim involving someone who is deceased and no longer provide direct evidence  S. 13 Evidence Act : In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence. o Onus is on the party claiming the gift  Must show: delivery, intention of the donor and acceptance o Words of gift: keep it, have it, welcome to keep it, keep it for yourself.  Intent vs motive o McNamee v McNamee: father owned a trucking business, by a written “declaration of gift” accompanied by delivery of the relevant share certificates, he transferred 500 common sahres in the trucking company to his son. Son and his wife always worked together in the business but the broke up. Son wanted to know whether the shares could be included in his “net family property”  Trial judge: no gift because the fathers main concern was not an altruistic one, but rather the desire to protect his business from creditors. Wife was entitled to half the value of the shares as at the date of separation.  Appeal: reversed judgement, pointing out that TJ confused motive with intention. “the intention respecting the transfer of shares was to do so gratuitously. The transfer was part of the corporate structure putting the estate freeze in place. And the estate freeze was the ultimate motive or purposes”  Donor does not need to be motivated by commercial purposes provided the transfer is gratuitous. 23

Week 5: February 17, 2021 (p. 486-501) Topic: Gifts (start at Gifts Inter Vivos: The Declaration of Trust) CHAPTER 6: Transferring Property Interests: Legal and Equitable Principles II. Transferring Property Interests by Gift B. Requirements for a Valid Gift Inter Vivos 3. Gifts Inter Vivos: The Declaration of Trust  A donor can retain legal title while transferring the equitable title to the done  Many situations where one person holds legal title as a trustee, and another has the equitable title in the same property o Trust relationship can be created expressly, or as in Watt v. Watt Estate, the court can recognize a trust relationship for equity/fairness purposes Watt v Watt (1987), 28 ETR9 (Man CA) FACTS Shirley Watt (friend, not related to R.J.) produced a holograph document, signed by RJ, which stated that the boat was jointly owned by the two of them Shirley’s solicitor wrote to Jean claiming possession of the boat. This claim was denied, and Shirley brought action Trial level: Shirley awarded full title of Thunderbird Appeal by Jean Watt: the document was found to be legit; but Shirley is entitled to only ½ interest in the boat Shirley, her family, and R.J. Watt were all close friends. Shirley’s husband worked on the Thunderbird With R.J. and when that work was done, R.J. gave Shirley a set of keys for the boat and she and her family had the free use of it until R.J. died Logbook of the boat showed the owners as being Shirley and R.J. Watt However, Thunderbird was only registered in the name of R.J.. The Court found that R.J.’s intention to make Shirley a ½ owner was clear Jean argued → even if the doc is not a forgery, there was no delivery and the gift was not completed delivery of a duplicate set of keys constituted sufficient delivery to perfect a gift R.J.’s writings, words, and actions constituted and executed trust which made him and his estate a trustee of the ½ interest in Thunderbird on behalf of Shirley Watt ISSUE Entitlement to ownership of a boat (“Thunderbird”), valued at $40k. Previously owned by deceased R.J. Watt, who was survived by wife Jean Ileen Watt (also to executrix of the will) RATIO/RULE ANALYSIS CONCLUSIO N 24

Discussion Notes  i. Gifts and Trusts o Cochrane v. Moore - Court examined the boundary between a gift by delivery and a declaration of trust  Racehorse (Kilworth) owned by Benzon. Jockey of Kilworth was Moore.  Benzon used “present words of gift” to give Moore an undivided ¼ interest in Kilworth  Benzon borrowed money from Cochrane, and had a writing that stated his horses (including Kilworth) were security for this loan from Cochrane  Benzon couldn’t pay this debt, so Cochrane got the horses and Moore objected b/c he had an interest before Benzon executed the security arrangement with Cochrane  Court upheld decision from Irons v. Smallpiece → delivery remained an essential requirement for a valid gift; no valid gift b/c no delivery  However, it was later discovered that in promising the horses as security, Benzon told Cochrane that Moore had a ¼ interest in Kilworth and Cochrane say that it would be “all right”  This statement was seen as sufficient to constitute Cochrane a trustee for Moore of this ¼ interest  Cochrane had to account to Moore for ¼ the sale price of Kilworth o Watt v Watt Estate and Cochrane v. Moore both held that a trust was created in circumstances where the delivery requirement for a valid gift was not met o “Equity will not perfect an imperfect gift” = court may not find a gift in the absence of the delivery requirement being satisfied  A well-known exception to this = donor expresses an intention to make a present gift during his/her lifetime, fails to effect delivery, and then appoints the donee as executor by will ( Strong v Bird ) o Michael Pickard → the “historical distinction that gifts were creatures of Law, and trusts, creatures of Equity,” and that a benefactor’s “intention to gift” cannot be translated into an “intention to be trustee.”  These different “intentions” are the foundation of the maxim that “equity will not perfect an imperfect gift”  ii. Express Trusts o Trusts recognized in 17th c., when courts of equity first provided protection for the grant of a “use upon a use” o Trusts can be created when a person transfers property to a trustee to hold it for named beneficiaries; obvious similarity between the transfer of a gift and creation of a trust o To create a trust:  Typically, one executes deed of trust, defining the propert that is to form the trust  Identifies the trustee and the beneficiaries, specifying the trustee’s duties  *For an express trust : three matters must be certain  1. Intention to create a trust  2. Subject matter of the trust  3. The objects (beneficiaries) of the trust o No need for any physical delivery of trust property o It is possible, though unusual, to create an express trust of personal property by means of an oral declaration as appears in Cochrane o Trust relationship is now an important concept in modern legal analyses of the relationship between the Crown and First Nations  iii. Resulting Trusts and the Presumption of Advancement o In addition to express trusts, there are two other kinds of trust relationships: resulting trust and constructive trust o Resulting trust : when there is a transfer of property without an intention to create a gift - there is a deed (or other valid instrument of transfer) or act of delivery, but no intention of gift  Ex: A fears being sued and having a judgment issued against his property. To avoid this, he transfers land to his friend B, with no intention of making a gift of the interest to B  In the resulting trust, the recipient of the property holds it as a trustee in trust for the transferor (who has the equitable interest).  Resulting trust may also arise when one purchases property in the name of another without intending to make it a gift  Also, if one cohabiting partner pays the full debt owed by a couple in relation to jointly held property, a resulting trust will be created with respect to one-half the total amount paid  In a family context, there is a presumption against a resulting trust when a husband/father transferred property to his wife or children → legal presumption was that they intended to make a gift to family members (“presumption of advancement”) 25

 Presumption of advancement: creates a presumption of gift rather than a presumption of resulting trust because of “the absence of any reason for assuming that a [resulting] trust arose”  Note: most family property statutes in Canada have repealed the presumption of advancement from husband to wife o  iv. Joint Property, Presumption of Advancement, and Parent-Child Relationships o Pecore v. Pecore - SCC clarified the situation regarding the presumption of advancement in the context of transfers between parents and adult children  Elderly father opened a joint bank account with his daughter Paula to allow her to take care of his financial transactions when he was not able to  Father was the sole contributor to the account, disposited the bulk of his funds to the account  The father died and a dispute arose of the money in the account (approx 1million)  When two people hold property jointly, there is a “right of survivorship” → if one person dies, the other is solely entitled to the property  The contract between the bank and account holders allows the surviving account holder to withdraw the money, but the courts generally held that the contract does not affect the legal relationship between the account holders themselves  SCC upheld this principle here  In cases of transfers between parents and adult children, the ordinary presumption of resulting trust will apply, requiring the adult child to prove that a gift was intended if s/he is to be able to assert full legal and equitable title to the transferred property  Historically, observing the original reason for the presumption of advancement was the parent’s duty to maintain the child and that duty ceases in law on the child’s attaining majority o Prior to Pecore , the law had been that any gratuitous parent-child transfer gave rise to a presumption of advancement, such that anyone arguing that the transaction was not a gift had the burden of proving it - a difficult task o The Court also clarified two points:  1. Confirmed that a gift of the balance of a joint account on the contributor’s death is, in fact, an inter vivos gift and not a testamentary one  The gift is considered to be made at the time the account is opened and vests in the donee at that time  Donee’s only right is to the balance, however, such that the donor could conceivably “revoke” the gift by draining the account of all funds prior to his or her death  2. In considering what evidence could be adduced regarding the intentions of the contributor/alleged donor, it was legitimate to look at evidence of events subsequent to the opening of the account, provided that such events shed light on the contributor’s state of mind at the time the account was opened o Arrangements like that in Pecore may be adopted for the purpose of avoiding probate fees at death  Joint tenancy between elderly parent and adult child may permit the child, as the surviving joint tenant, to receive the property subject to the joint tenancy “outside the estate” (and thus not subject to probate)  Stubbins v. Stubbins → elderly father purchased a condominium and a few years later, executed a deed transferring title to himself and one of his two sons. The relationship fizzled and the father tried to get the son to transfer title back to the father, making him the sole owner  Court held that the father had made a valid gift to his son and ordered that he pay half the value of the condo unit to him  It is easier to change a will (which does not become effective until death) than to obtain a revesting of title in a transferor after granting a valid gift inter vivos  v. Constructive Trusts o Trust obligations can arise even in the absence of a specific intention to create a trust  Ex: courts have recognized “constructive” trusts to ensure a just result in cases where a person without title to property has made a significant contribution to acquiring or maintaining it, thus preventing the “unjust enrichment” of the title holder o Canadian courts have often “constructed” trust relationships in the context of cohabiting couples where the person without title has made valuable contributions of money or labour, making it unjust not to recognize an interest on the part of the non-titleholder  Here, the titleholder is a constructive trustee and the person who made the contribution is a beneficiary of a defined interest that corresponds to the contribution he or she makes 4. Capacity 26

 a. Capacity in Relation to Diminished Cognition o The requirement of capacity in relation to intention may be relevant to both gifts and trusts  Ex: a valid gift requires that the donor have the capacity to form the intention to make a gift to the done  Re Beaney → A woman with advanced senile dementia transferring her house (and effectively her whole estate) to one of her three daughters. Court declared that the transfer was void because the deceased was unable to understand that she was depriving her other children a share in her estate  Winarski v. Sproul → daughter and executor of her mother’s estate requested an order for sale of a home in Toronto and a share in proceeds of the sale when her mother, who had early stages of Alzheimer’s disease transferred the deed to her home to her son and not the daughter. It was found that the gift was valid when the Deed of Transfer was delivered to the mother’s lawyer for registration o The result in this case appears to recognize a legitimate way of avoiding payment of Ontario’s 1.5 percent probate tax: signing a deed and delivering it to the recipient or a lawyer for registration after death o It is also clear that the decision confirming a valid gift means that the donor cannot later revise the decision, except with the concurrence of the donee  b. Capacity and Undue Influence o Capacity may also need to be determined in a context where a titleholder transfers property and later claims that the transfer occurred because of undue influence o Csada v. Csada → plaintiff brought an application to set aside two gifts to his brother  Plaintiff was 58 at the time and had requested his brother, aged 66, return to Canada from new Zealant so they could live together  Plaintiff paid for his brother’s airfare and the expenses for both of them to move from the plaintiff’s apartment to a house he had purchased for them  Trial judge considered evidence from several medical experts regarding the plaintiff’s state of depression and their views that he was dominated by his older brother  Held that the plaintiff had the requisite intention to make these gifts to the defendant, that he had sufficient capacity and that there was no undue influence  In assessing the claim based on “ the equitable doctrine of undue influence ,” the Saskatchewan CoA referred to Allcard v. Skinner :  “...setting aside voluntary gifts on the ground of undue influence may be divided into two classes - first, where the Court has been satisfied that the gift was the result of influence expressly used by the donee for the purpose; second, where the relations between the donor and donee have at or shortly before the execution of the gift been such as to raise a presumption that the donee had influence over the donor. The first class of cases may be considered as depending on the principle that no one shall be allowed to retain any benefit arising from his own fraud or wrongful act. In the second class of cases the Court interferes … on the ground of public policy [ and to prevent an abuse of the relationship.”  Always necessary for a court to determine that the gift was “the result of the free exercise of independent will”  This case was in the second group, and since the presumption of undue influence was engaged, the onus was on the defendant to rebut the presumption  Gifts to defendant were void because “plaintiff’s act does not have the quality of spontaneity and the circumstances under which he acted do not bear the mark of independence which would justify this court in holding that the gifts were the result of a free exercise of the donor’s will.”  Note: capacity issues affect express trusts as well as gifts 5. Intention and Future Enjoyment: Distinguishing Inter Vivos and Testamentary Gifts  A donor must have the intention to make a present gift, not an intention or promise to make a gift at some point in the future. However, a donor may make a present gift, the enjoyment of which is postponed to the future  Testamentary gift: gifts that are not intended to take effect at all until the donor’s death  In such a case, the title passes at the moment of the gift, but the donee’s enjoyment may not occur until some time in the future  Speelman v. Pascal - example of an inter vivos gift in which there is a present gift with enjoyment postponed to the future  Important to distinguish inter vivos gifts of this kind from testamentary gifts  Testamentary gifts must meet the requirements for succession of property interests at death, usually including a written document signed by the testator in the presence of two witnesses who sign the will in the presence of the testator and of each other  A testator doesn’t relinquish any rights to such property interests until the moment of death 27

 Because the will must be interpreted after a testator’s death, issues of intention often require judicial interpretation  In addition to inter vivos gifts and testamentary gifts, there is another form of gift that, at least in some jurisdictions, has survived from very historical origins → donatio mortis causa C. Donatio Mortis Causa  Donatio mortis causa is a gift transferred by a person who is about to die - a gift made in contemplation of death  Subject to revocation if the donor recovers  Thus, intention for donatio mortis causa is different from that for a gift inter vivos because a donatio mortis causa is subject to an automatic revocation on recovery o Like an inter vivos gift, donatio mortis causa also requires delivery  There is difference of opinion regarding the test for delivery for a donatio mortis causa → same as inter vivos or is it less stringent? o Donatio mortis causa requires acceptance, same as inter vivos  After the enactment of the Statute of Frauds in the 17th c, most transfers of interests in land were required to be in writing, thus placing severe restraints on the making of oral wills (aka nuncupative wills) o SoF created problems for the beneficiaries of gifts made by deceased people on their deathbeds o Ward v. Turner - court held that such gifts could be sustained only when accompanied by an actual delivery of the subject matter of the gift  Do not take effect finally and irrevocably until the death of the donor  If the donor survives the anticipated peril, the gift is automatically by operation of law revoked  It is also possible for a person who may be dying to make a valid gift inter vivos Re Zachariuc: Chevrier v Public Trustee (1984), 16 ETR 152 (Ont Dis Ct) FACTS Two friends worked together and had been friends for over 30 yrs. Chevrier assisted his older neighbour regularly, and they visited each other daily. Z had no living relatives and interacted mainly with Chevrier. Chevrier visited his friend on the evening prior to Z’s death and found him unwell but Z refused to see a doctor. Z stated that everything he had would go to Chevrier Later in the night Z reiterated that Chevrier was his best and only friend and that he had some money hidden which he was going to give to Chevrier. He then explained in detail where the money was located. He then gave Chevrier his house key and told Chevrier to check on him in the morning and to bring a friend to witness a paper (presumably a will), leaving his assets to Chevrier. The next morning when Chevrier went to check on his friend, he was dead. The money would never have been found without Chevrier’s information 3 things required for donatio mortis causa: (1) the gift or donation must have been made in contemplation, though not necessarily in expectation, of death, (2) must have been delivery to the donee of the subject-matter of the gift, (3) the gift must be made under such circumstances as shew that the thing is to revert to the donor in case he should recover It is significant to the Court that just prior to Chevrier’s departure on the night Z died, the deceased gave his house key to Chevrier and asked him to check on him in the morning Giving the house key is similar to the line of cases that have established where the safety-deposit box key has been given to the donee this has been found to constitute delivery of the gift ISSUE Whether Zachariuc, an elderly resident of Wawa ON had granted a donatio mortis causa to his neighbor and longtime friend, Chevrier, on the night before Z died RATIO/RULE ANALYSIS CONCLUSIO N Discussion Notes  i. Delivery and the Donatio Mortis Causa 28

o Most agree that there was no requirement for delivery in the original donatio mortis causa of Roman law and this requirement was not introduced until Lord Hardwicke’s decision in Ward v. Turner  ii. Intention and the Donatio Mortis Causa o Intention required for a donatio mortis causa reveals its historical roots as a compromise between an inter vivos gift and a testamentary disposition o It is both a present gift and one that nonetheless becomes irrevocable only on death o Its characterization is often stated to be sui generis o Newell v. National Bank of Norwich → court held that the donor’s attempt to grant a donatio mortis causa was revoked automatically on his recovery. To give effect to the donor’s obvious intent, the court characterized the original gift as a gift inter vivos o Donatio mortis causa must be made in contemplation (although not necessarily in expectation) of death - the contemplation of a death more likely than that which all mortals expect → Re Zachariuc  iii. The Donatio Mortis Causa: The Need for Reform o Now it is arguably less fruitful to devote legal resources to donatio mortis causa gifts  According to this argument, it is preferable for people to make proper testamentary gifts by will  Scope of donatio mortis causa should be more narrowly interpreted 29

Week 6: March 3, 2022 (p. 555-565) Topic: Concurrent Interests and Family Property CHAPTER 7: Concurrent Interests and Family Property I. The Concept of Concurrent Interests  Concurrently held interests in property - more than 1 person has a property interest in the same object at the same times o Ex. Joint Tenants  The idea of shared/ concurrent interests in property represents a challenge to dominant concepts of individual ownership and “private” property o Ex. Indigenous property is communal rather than individual & property interests are shared not only among those who currently live there but with members of past and future generations o This concept of shared interest in land, entitlement ‘in common’ depends on membership in the community, & these entitlement can’t be alienated as “private property’  Concurrent interests – the shared interests that arise- identify a situation in which 2 people hold property interests entitling them to share possession  Concurrent interests requires grantees to share possession they have been created more often among family members than among strangers o Traditional common law principles concerning concurrent interests are now less applied to married couples or cohabitates but remains relevant for concurrent interests held by other family members  Concurrent interests in property shows connections b/w common law’s historical roots in feudal society and modern challenges – both legislative and judicial – in relation to its role in new forms of housing arrangements & to family property II. Traditional Concurrent Interests  Four Forms of concurrent interests were traditionally recognized at common law : 1) Joint tenancy 2) Tenancy in common 3) Tenancy by the entireties (not valid in Ontario anymore) 4) Co-parcenary (not valid in Ontario anymore)  Joint tenancy and tenancies in common are the usual forms of holding concurrent interests A. Joint Tenancies and Tenancies in Common  Joint Tenancy: o An inherent right of survivorship (if one of the joint tenants dies, the survivor will hold the interest as the sole owner)  Tenancy in common o Does not have inherent right of survivorship McEwen v Ewers and Ferguson [1946] 3 DLR 494 (Ont H Ct J) 30

Area of Law : FACTS Finley McEwan died and left a lot of land to his two daughters "jointly, and should they decide to sell the said property each of them is to have an equal share of the proceeds". One of the daughters died and left her share to her brother in her will. If this was a joint tenancy, then the sister had nothing to leave to her brother, as her share would have defaulted to her sister. The plaintiff is the brother who wants the estate to be deemed to have been a tenancy in common, so that she could pass her share to him. ISSUE Is the common law presumption of joint tenancies still in effect? RATIO/RULE The old common law presumption in favour of joint tenancies has been reversed by statute; there is now a presumption of tenancies in common, even if the word "jointly" is used. Interests in tenancies in common can be passed on through wills. ANALYSIS Barlow says that although there was an old common law presumption of joint tenancies, this has been reversed by statute. In Ontario, has made a presumption in favour of tenancies in common, even when the word "jointly" is used, as it was here. In the result, the estate created for the daughters was a tenancy in common, and the daughter was fully justified in leaving her half to her brother in her will as tenancy in common interests can be passed on to other parties. CONCLUSIO N Judgment for the plaintiff. – Tenancy in common NOTES The consequence of a possible right of survivorship is that Bertha’s death would have terminated her interest in lot 18 & thus she would have no interest in lot 18 that could be devised in her will A tenancy in common creates no right of survivorship 1. Consequential Differences: The Right of Survivorship  The right of survivorship means that when one joint tenant dies, the interest of the deceased joint tenant is extinguished. The interest of the surviving joint tenant is correspondingly enlarged DISSCUSSION NOTES  Joint Tenancy or Tenancy in Common o B/c a joint tenancy includes a right of survivorship and tenancy in common does not, a grantor of concurrent interest must choose which form of concurrent interests to creates for grantees  When is a joint tenancy preferred?  The effect over time of a joint tenancy will be to reduce the number of co-owners to one remaining title holder, a joint tenancy will be preferred in situations where there are advantages to having only 1 owner  Joint tenancy preferred b/c they eventually make title searching less complicated b/c there will (eventually) be only one remaining owner registered on title  The interest of each joint tenancy interest ceases at death so that the title is ultimately consolidated in the last surviving joint tenant prior to being devised 2. Language: Statutory Presumption in Favour of Tenancies in Common  The case McEwan (see above) shows there are consequences of whether you characterize as joint tenancy or tenants in common  The language adopted by the testor in creating interests must be considered o Ex. If a person had intended joint tenancy, they would have used the words “survivor” rather than “successor”. Suggesting that the words “successors” was not consistent with the survivorship right inherent in a joint tenancy  The common law’s preference for joint tenancy meant that ambiguous language would be resolved in favour of the creation of joint tenancy o This was reversed by statute 31

o Now creating a joint tenancy requires clear and specific language  Joint tenancy is created in an inter vivos grant or in a will by the words “to A and B in fee simple as joint tenants and not as tenants in common ” DISSCUSSION NOTES  i. The Interpretation of Section 13 o s. 13 has been strictly interpreted o s. 13 does not apply to grants other than “after the 1 st day of July 1834” o s. 13 does not apply to grants to “executors or trustees” o s. 13 does not apply where the language creating concurrent interests was in an agreement for purchase and sale, on the basis that such an agreement is not an “assurance” pursuant to the wording in the section  ii. Simultaneous Death of Joint Tenants o This situation is regulated by statute  In Ontario:  Unless a contrary intention appears, where 2 or more joint tenants dies at the same time or in circumstances rendering it uncertain as to the order of death, each person is “deemed to have held as tenant in common”  iii. Joint Tenancies: Corporations o 2 or more corporations or a corporation and a person can hold property as joint tenants  s. 43(2) provides that when a corporation that holds property as a joint tenant with a person subsequently dissolves, “the property devolves on the other joint tenant’ – that is, there is a right of survivorship for the person when a corporation entity ceases to exist  iv. Severance of Joint Tenancy o This process for changing joint tenancy into a tenancy in common can be accomplished by the “severance” of joint tenancy 3. Conceptual Distinctions: The Four Unities  Joint tenancy has 4 unities: o Possession (each joint tenant is entitled concurrently with the other joint tenants to possession of the whole of the land that is subject to join tenancy) o Interest (requires the interest of each joint tenant be the same in extent, nature, and duration) o Title (each joint tenant’s title must be derived from the same document, transfer, or transaction) o Time (each joint tenant’s interest must vest at the same time)  Joint tenancy unity of interest, title, and times means that joint tenant must have interests of the same quality and duration o They must both hold the same estate, they must derive them through the same title documents & their interests must commerce at the same time  Tenancy in common has 1 unity: o Possession  Both Joint tenancy & Tenancy in common have undivided rights to possession of the whole relevant property – they share possession of the whole property subject to co-ownership  Joint tenancy & Tenancy in common’s interests are different o Property interest of a joint tenant is a unified interest in the whole, while the tenant in common is an undivided fractional share  b/c tenants in common (like joint tenants) are entitled to possession as a whole, a tenenat in common holds an “undivided” share o The interest of a joint tenant is an interest in the whole estate, by contrast with the interest of a tenant in common, which is described as an undivided share in the whole estate DISSCUSSION NOTES  i. Unities of Possession, Interest, Title, and Time o the most usual situation in which different interests preclude the creation of ajoint tenancy occurs when co-owners have differing shares. For example, in Re Speck (1983), 51 BCLR 143 (SC), two persons applied to register their interests in land as joint tenants with one party having an undivided 7 l/100 interest and the other an undivided 29f1oo interest. o The court denied their claim, stating that by trying to register a joint tenancy without a unity of interest, the applicants were trying to create ·a monster unknown to the law." By contrast with the court's view in Speck, BCLRC 32

has suggested that there may be cases where joint tenancies with undivided shares should be recognized for example:  a husband and wife may purchase a matrimonial home with the wife putting up 80% of the money. They find the notion of a joint tenancy attractive for its right of survivorship, but fear that if the husband's business activities should lead to his bankruptcy, the trustee [in bankruptcy] would be entitled to half the property. A form of joint tenancy which recognized unequal interests would seem to satisfy their needs.  iii. Mutual Rights and Responsibilities Among Co-Owners o The unity of possession that applies to both joint tenancies and tenancies in common required the development of quite complex rules about mutual rights and responsibilities among co-owners, a topic considered later in this chapter in relation to rights of accounting, and partition and sale. Week 7: March 10, 2022 (p. 567-579) Topic: Severance of a Joint Tenancy CHAPTER 7: Concurrent Interests and Family Property II. Traditional Concurrent Interests C. Severance of a Joint Tenancy  Because a joint tenancy requires that the four unities be present, acts that destroy these unities result in a “severance” of the joint tenancy and creation of a tenancy in common  Severance of a joint tenancy eliminates the right of survivorship so that the co-owners, no tenants in common, hold undivided shares that are devisable o They still remain entitled to unity of possession  A joint tenancy can be converted into a tenancy in common which does not carry right of survivorship through a process known as Severance o Severance cannot be affected by wills o If a joint tenant. wants to divide his or her interest in the property by will, the surviving joint tenants will benefit from the right of survivorship and the divisi will take nothing. AJ McClean, “Severance of Joint Tenancies” [1979] 57 Can Bar Rev 1 at 1-4 (footnotes omitted) Area of Law :  A joint tenancy may be ended by severance: any act or conduct, which, occurring during the lifetime of a joint tenant, has the effect of turning the joint tenancy into a tenancy in common  Post 1925 English cases are irrelevant in Canada now  A joint tenancy may be severed in 3 ways: o 1. An act of any one of the persons interested operating upon his own share may create a severance as to that share  The right of each joint-tenant is a right by survivorship only in the event of no severance having taken palace of the share which is claimed under the jus accrescendi o 2. A joint-tenancy may be severed by mutual agreement o 3. There may be a severance by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common  Effectiveness of the 3 rules ^ 33

o 1. A joint tenant, without the consent of or even notice to the other joint tenants, is as free to deal with his interest as any other owner, and may deal with it in such a way as to destroy one of the unities o 2. In theory if one of the unities is destroyed, there is a severance and nothing else need be considered DISSCUSSION NOTES  i. Severance of Joint Tenancies: Completed Acts and Intention o Application of these principles above may be more difficult o Review of the 3 methods/ rules:  1. Conveyance of an estate by one joint tenant to a third party  2. Mutual agreement (contemplates an agreement among joint tenants to sever the joint tenancy)  The mutual agreement basis for severance is particularly significant in the context of married couples who hold property as joint tenants and have separated but not completely finalized their property arrangements  3. A course of conduct o In Morgan v Davis , the court concluded that negotiations between a husband and wife in the context of their divorce did not affect a severance of their joint tenancy o Courts seem to focus on “intention” with respect to issues of severance that are based on mutual agreement adn on a course of dealing  ii. Severance: “Actions ” by a Joint Tenant and “ lntention” with Respect to Mutual Agreement o Courts may consider the issue of severance in terms of both “completed acts” by one joint tenant and “mutual agreement” o Where there are 3 joint tenants, the conveyance of one joint tenant’s interest to another joint tenant severs only the interest of the joint tenant making the conveyance… it does not sever the whole of the joint tenancy o EXAMPLE: If there are three joint tenants, A, B and C, and one joint tenant A transfers his interest to another joint tenant B, the result is that A then has no interest in the land. B becomes a tenant in common aas to one-third (undivided) interest in the land, and remains a joint tenant with C as to a two-thirds (undivided) interest  iii. Severance of a Joint Tenancy by Murder o Severance of a joint tenancy has also been confirmed in circumstances where one joint tenant has murdered the other o In Pupkowski, the court considered four options; the most appropriate option was:  To apply the normal rule so that the estate accrues to the survivor, subject to a constructive trust of an undivided one-half interest for the victim’s estate  iv. Unintentional Severance of a Joint Tenancy o Severance of a joint tenancy may also occur without an intention act in the content of bankruptcy and in the execution of a judgment  v. Severance: Principles About Notice and Consent o McClean suggested that joint consent to any severance should be required when the joint tenancy involves a husband and wife and the matrimonial home, having regard to “the expectation of the spouses that the consent of both is needed to change the nature of their interests, and that, without that mutual consent, on the death of one the property will pass to the survivor” o If the above proposal is too drastic, severance should not occur until other joint tenants have been notified of the proposed transaction arguing:  Severance may now take place without even being informed. This element of secrecy is at the minimum unfair, and may also lead to a suspicion of fraudulent dealing. To require notice would achieve a fair balance between the competing interests of all the joint tenants o Although the consent of all joint tenants should not be required for severance, there should be a requirement of notice on the part of a joint tenant seeking to sever the joint tenancy to create a tenancy in common o The cardinal feature of joint tenancy, and the most important characteristic distinguishing it from a tenancy in common, is the right of survivorship o So you don’t need consent, but you do need notice  vi. Severance in a "Family" Context: Knowlton v Bartlett o In Knowlton , the court considered an application related to land owned by former spouses as joint tenants 34

o At the time of their divorce, the husband agreed to pay his wife a sum of money in return for her conveyance of her interest in the land to her husband o This agreement was never carried out o Prior to her death, the former wife executed a deed from herself to herself in relation to the land; this deed was registered o When the former wife died, her interest as a tenant in common in relation to an undivided one-half interest passed pursuant to her will o Secret severance: a decision that may deprive another party of the benefit of a right of survivorship (without the party’s knowledge) is inconsistent with the interdependence arising from a family relationship  vii. Severance and Family Property Statutes o A conveyance by a joint tenant to himself or herself for the purpose of severing a joint tenancy did not constitute a “disposition” for the purposes of the Family Law Act  viii. Joint Tenancies: Parents and Children o A parent may create a joint tenancy with an adult child as part of an estate-planning arrangement, assuming that the parent will die first and the adult child will “take” by right of survivorship D. Rights and Obligations of Co-Owners: General Principles  Whether co-owners are joint tenants or tenants in common, their interests are characterized by unity of possession, the only unity common to both kinds of co-ownership  Unity of possession means that each co-owner is entitled, along with all other co-workers, to possession of the whole of the land  Questions about the respective co-owners’ rights: o What happens if one co-owner remains in possession of a farm, while others leave to work elsewhere? o What if one co-owner wrongly excludes others from possession? o When are co-owners out of possession entitled to share in profits from the land? What about setoffs for expenses paid by the co-owner in possession? o If some co-owners are out of possession voluntarily, are they liable to contribute to the cost of improvements, or entitled to share in the increased value effect by improvements undertaken by the co-owner in possession?  Early common law principles provided that a co-owner in possession was required to pay “occupation rent” to co-owners out of possession in 3 situations: o 1. Where the co-owner in possession has excluded the other - that is, has affected an “ouster” of other co-owners. In a case that predates the Family Law Act in Ontario, this concept was expanded to “constructive exclusion” in a case where a wife left home because of her husband’s continued violence o 2. Where the co-owners have made an agreement respecting occupation and occupation rent (co-owners are thus permitted to structure their relationship by contract); and o 3. Where the circumstances require that the co-owner in possession be regarded as an “agent” for the other co- owners  In addition to these common law principles, the Statute of Anne, provided that a co-owner was required to account for benefits received as co-owner from third parties, but not for benefits that a co-owner achieved through the co-owner’s own efforts  An action for an accounting may be brought by a joint tenant or tenant in common… against a co-tenant for receiving more than the co-tenant’s just share E. Termination of Concurrent Interests: Partition and Sale  When co-owners no longer want to hold concurrent interests as joint tenants or as tenants in common, they may invoke the provisions of the Partition Act , which provides that co-owners “may be compelled to make or suffer partition”  This permits a court to order the destruction of the co-owners’ unity of possession by defining boundaries for each co-owners entitlement to an individual parcel  Partition: take land and make a line and cut the land, each person owns a part of it.  Sale: sell the land and cut the proceeds to the percentage of ownership that each person has. Cook v Johnston [1970] 2 OR 1 (H Ct J) Area of Law : 35

SUMMARY In this appeal from the Senior Master’s report dealing with partition of property jointly owned by the parties, the appellant’s contention is that the remedy ought to have been by way of sale rather than partition Section 3(1) Partition Act  Any person interested in land in Ontario… may bring an action or make an application for the partition of such land or for the sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested Sale as an alternative for partition is quite appropriate when a partition cannot be made FACTS There are very few similar islands in the area that are now available The appellant urged that the island was not of such an area as permitted two families to enjoy the same in separate cottages It was actually more advantageous to the parties to partition the property than take the chances to what might develop if it was sold Even if the parties received more than the actual value of the property from a stranger, neither of them could readily find another suitable summer island home in that district Cook is getting the portion of the island on which the cottage and dock are built It was never contemplated that Johnston should contribute anything towards the erection of these ISSUE RATIO/RULE ANALYSIS The division was more advantageous to Cook than to Johnston. The Master has exercised his discretion properly CONCLUSIO N Appeal dismissed. NOTES DISSCUSSION NOTES  ii. Entitlement to Partition or Sale o In Katal v Khurshid, the parents held a 99% interest and the daughter held 1% o The parents brought an application for partition or sale because they were no longer able to deal with stairs and both had health issues o According to the court, there is a prima facie entitlement to partition or sale, so that a person opposing such action has the onus of demonstrating reasons that justify such opposition o The court held that the parents had good reasons for wishing to sell and that the daughter would also relieve the benefit of entitlement to 1% of the sale price o Ratio: where a party is going to be registered on title just for mortgage purposes, the arrangement should be carefully documented in advance to provide for the exit strategy  iii. Partition and Sale for Co-Owners Who Are Spouses o Uncertainty about how judges should respond to an application for partition in such cases o The court has a discretion to postpone the sale of property in these circumstances where it would result in hardship to one particular party o It is open to a court to exercise discretion with respect to granting or refusing an order for partition or sale o A court in exercising this discretion should consider the relative hardships to the parties o The Family Law Act did not oust the jurisdiction of the Partition Act  But, an application under the Partition Act should be deferred where there is evidence that an order for partition would prejudice the rights of either spouse in relation to proceedings under the Family Law Act 36

Week 8: March 17, 2022 (p. 590-606) Topic: Family Property: Legislative and Judicial Reform CHAPTER 7: Concurrent Interests and Family Property IV. Family Property: A Study in Legislative and Judicial Reform  [The] law of matrimonial property "comprises a substantial portion of the secular definition of the institution of marriage."  The law regulating the spouses' property relations is fundamentally an index of social relations between the sexes, and, for this reason, affords a peculiar wealth of commentary on such matters as the prevailing ideology of marriage, the cultural definition of the marital roles, the social status of the married woman, and the role of the state vis-a-vis the family.  The idea of family property offers useful insights about gender relations and property in a social and economic context.  the issues of family property have seen significant amounts of legal reform, particularly in the last century  because reform of family property has tended to coincide with greater equality for women (and others in spouse-like relationships), this area of law offers an important opportunity to reflect on gender and property in "families." as well as relationships between private family arrangements and the organization and structure of public life, including paid work. A. Historical Background 1. The Concept of Coverture  Historic, class description of marriage and property: o By marriage, the husband and wife are one person in law: that is, the very being or legal existence of the woman is suspended during the marriage. or at least is incorporated and consolidated into that of the husband: under whose wing. protection. and cover. she per- forms everything; and is therefore called in our law-french a femme-covert ... and her condition during her marriage is called her coverture. 37

 Explanation of the historical differences between single women (who were not subject to the restrictions of coverture) and married women (who were subject to coverture), as follows: o [A] sui juris single woman. like her male counterpart. was free to own. manage and transfer property; to sue and be sued; and to enjoy the income attributable to her property and personal labor. At the instant she was married, however, her status changed radically:  (1) Her tangible personalty. subject to minor exceptions. instantly became her husband's property [as did personalty acquired by her after the date of the marriage].  (2) She did not lose title to real property formerly held by her solely in fee, but her husband acquired an interest known as jure uxoris. entitling him to sole possession and control during the marriage. A fortiori, all income from this realty belonged to the husband, with no duty to account to the wife. His interest was alienable at his discretion and was subject to attachment by his creditors. [Property acquired after marriage was treated in the same way.]  Real property transferred to the spouses jointly was held in tenancy by the entirety, but subject to the husband's sole control and enjoyment. A wife could not contract. or sue or be sued. and her husband was fully entitled to all her earnings.  In short. marriage converted the wife into a legal cipher, or nonper- son  some commentators concluded that the legal principle of coverture reflected the biblical teaching that husband and wife become "one flesh," while others suggested that the principle represented a version of guardianship within marriage. 2. Dower and Curtesy: Common Law Entitlements  In addition to coverture, the rights of married spouses included dower (not to be confused with "dowry") and curtesy. Although these rights were not the same, they both provided life interests in some of the other spouse's property for a surviving spouse-that is, after the other spouse's death. Both dower and curtesy rights were available in most provinces until quite recently.  A wife's right to dower was technically described as follows: o At common law, whenever a husband became seised (otherwise than as a joint tenant) of an estate of inheritance during coverture[.] which issue of the marriage, if any, could inherit, the wife obtained an inchoate right of dower therein which became consummate on the hus- band's death survived by his wife. The dower right was a life interest in one-third of such freeholds of inheritance and constituted a clog on the husband's title even in his lifetime.  In practice, the wife's right to dower created problems for conveyancing. Unless the wife joined in barring her right to dower when her husband transferred any interest in real property by deed, a subsequent purchaser's interest potentially would be subject to the wife's dower right.  Long after the transfer occurred, a widow could claim, on the death of her hus- band, a life estate in one-third of any lands transferred to purchasers.  because the dower right did not attach to an equitable interest. conveyances frequently utilized deeds to uses to avoid dower rights.  a deed for a purchase and sale transaction might include a provision that "the vendor's wife joins in the deed to bar her dower.  Dower was also repealed in New Brunswick, Nova Scotia, Prince Edward Island, and abolished in the United Kingdom  The husband's right to curtesy was a life estate in all the lands, while the wife's right to dower also constituted a life estate. but only to one-third of lands held by her husband. 3. Equitable Settlements and Statutory Reforms  The common law rights of dower and curtesy, as well as the doctrine of coverture, reflect the history of property and marriage relationships. For example. the right to dower was included as one article in the Magna Carta in 1215. By the 17th and 18th centuries, however, the common law doctrine of coverture had been ameliorated to some extent by the use of family trusts or settlements. which enabled a married woman to retain some limited rights to property in spite of the requirements of coverture.  Prior to marriage, a woman's father could set up a trust, in which the father or the woman's brother would be the trustee; thus, she could be the beneficial owner of her "separate estate.'' In this way, the trust property would not pass to her husband on marriage. Although such an arrangement successfully avoided the problems of the common law doctrine of coverture, it was not generally available to women in England unless their families were wealthy and had access to expert advice in drafting such settlements. In Canadian provinces in the 19th century, it seems that there was even less access to these equitable arrangements. 4. Property in the Context of Divorce Reform: Murdoch v Murdoch  More recently, however, it has become clear that the right to separate property was not always by itself a means of transforming women's access to wealth.  In spite of women's rights to hold interests in property, the pattern of husbands being titleholders of family property frequently, but not always. remained intact.  This situation was not really addressed in the Legal system until the enactment (for the first time) of federal divorce Legislation in Canada in 1968. Thereafter, both federal and provincial Law reform commissions began to examine the impact 38

of divorce (rather than death) on mar- ried spouses and their property, a new Legal issue; since common Law principles did not permit departures from "Legal ownership" in the allocation of post-divorce property, divorce often resulted in non- titleholders Leaving a marriage without any property. In addition, there were problems for "spouses" in cohabiting relationships, since their entitlements post-separation were also based on Legal title to property.  Ontario’s Family Law Reform Act (1978) o All the common Law provinces outside Quebec reformed provincial laws to create new principles with respect to spousal entitlements to property on marriage breakdown.  Family Law Act (1986) o Ontario significantly altered its approach only eight years later by adopting the Family Law Act  The issue of property entitlement is complex because this reform process continued over several decades; it is also complex because of differing views about the rationale(s) for these statutory reforms.  There are significant socioeconomic implications in the creation of two economic units after divorce in place of one; it is often necessary to stretch (sometimes Limited or even non-existent) resources to provide security for former family members.  The reforms in the Last decades of the 20th century were significantly influenced by the decision of the Supreme Court of Canada in Murdoch v Murdoch, o The Murdochs married in 1943, and Mrs Murdoch separated from her husband in 1968 after a marriage of 25 years. o At separation, she filed claims for (among other things) financial support. and a declaration that her husband was trustee for her of an undivided one-half interest in several large tracts of ranch property to which he held sole title, but in which she claimed that they were "equal partners." o At trial. the judge concluded that there was no evidence of partnership and denied her claim to share in the property; he awarded her $200 per month by way of ongoing support. The Court of Appeal of Alberta dismissed her appeal. o In the Supreme Court of Canada, Mrs Murdoch's claim to share in the property was based, not on the idea of partnership, but rather on the doctrine of resulting trust, a doctrine then subject to numerous and sometimes conflicting judgments both in Canada and the United Kingdom. o the court had concluded that a financial contribution was essential to ground an entitlement to a proprietary interest; marriage alone was not sufficient.) o Since Mrs Murdoch could not prove a financial contribution, the court held that she was not entitled to a declaration of resulting trust in relation to the large ranch properties acquired through the joint efforts of Mrs Murdoch and her husband. That is, the court used general principles of "property• to conclude that Mr Murdoch had title and that there were no property remedies for his wife, in spite of her contributions to the ranch land. o Martland J for the majority reiterated the trial judge's conclusion that the work done by Mrs Murdoch during the 25 years of her marriage was merely "work done by any ranch wife." o The majority judgment was in stark contrast to the dissenting judgment of Laskin J, who concluded that the facts justified a declaration of constructive trust, recognizing the significant ·contribution of physical labour beyond ordinary housekeeping duties· made by Mrs Murdoch. o Thus both public opinion and law reformers evidenced considerable agreement about the need for reform after Murdoch. o Although the Supreme Court of Canada did eventually accept the constructive trust concept in 1978 in Rathwell v Rathwell, [1978] 2 SCR 436 [as proposed by Laskin J in Murdoch]. it is provincial statutes that now define "family property" entitlements for married couples. o On the other hand. because provincial statutory reforms sometimes apply only to married couples at divorce. and not to cohabiting couples at separation, the constructive trust remedy remained useful to cohabiting opposite-sex couples. and was adopted by the Supreme Court of Canada in Pettkus v Becker. [1980] 2 SCR 834. o Prior to the recognition of same- sex marriage in Canada, the constructive trust remedy was also claimed by same- sex couples at separation. o Property entitlement is still based on {marital) status in about half the common law provinces as well as in Quebec. o Common law provinces generally provide for spousal support {a monetary remedy based in part on need) for both married and cohabiting spouses. B. Legislating Family Property Reform for Married Spouses at Divorce ONTARIO Family Law Act defines "property" in general terms s. 4 "[P]roperty" means any interest, present or future. vested or contingent, in real or personal property and includes. (a) [property relating to a power of appointment]; (b) [property relating to a power to revoke disposition]; and (c) [the "imputed value" of a spouse's pension plan].  For property law purposes, the significant language is the very broad definition of "property" 39

 The statute also provides for the valuation of these "property" interests, the exclusion of some interests-for example. gifts from third parties and property owned by each spouse prior to marriage, with the exception of the matrimonial home.  After deducting debts, this approach results in a determination of the ·net family property• for each spouse.  After defining each spouse's net family property, the court can then order the payment of a sum of money from one spouse to the other to ·equalize· the value of the spouses' entitlements.  In Corless v Corless , a wife claimed that her husband's LLB degree should be valued as property at the time of divorce.  In Corless, the court held that the husband's professional degree was "property" pursuant to s 4 of the FLA, but that it had no value for purposes of equalization, and thus was not included in the value of the husband's net family property. (The value of the husband's share in the law partnership was, however, included as part of his net family property.)  In Keast v Keast , where a wife had put her "mature student• husband through medical school. In Keast, the court awarded her extra "compensatory· spousal support, but did not include the medical degree as property.  in Linton v Linton, the husband's PhD degree was not included as part of his net family property, even though his wife had supported him finan- cially to enable him to acquire it. In this case, also, the wife was awarded substantial and ongoing financial support as compensation for her contribution.  In Caratun v Caratun (1987), 9 RFL (3d) 337 (Ont H Ct J), Van Camp J decided that a wife who had supported her husband's acquisition of a degree in dentistry was entitled to an equitable or beneficial interest, thereby creating a constructive trust in the husband's degree. Van Camp J calculated the value of the wife's beneficial interest as $30,000.  Both Linton and then Caratun were appealed, and the Ontario Court of Appeal concluded in each case that there was no "property" in a professional degree. In Caratun, the Court of Appeal engaged in a comprehensive analysis of this property claim; and the appeal court's conclusion that the statute's definition of "property" did not include a professional degree for the purposes of equalization seems to have finalized this issue. (As you will see, however, the appeal court awarded spousal support.) Caratun v Caratun (1992), 42 RFL (3d) 113 (Ont CA) Area of Law : FACTS Two days after receiving his dental license, the husband, Mr. Caratun, leaves his wife, Mrs. Caratun, whom he had moved to Canada, leaving her job and life in Israel to financially support her husband so that he could obtain his dentistry license in Canada. ISSUE Is a dental license considered “property” within the Family Law Act, R.S.O. 1990, c. F.3 (“F.L.A”) ? RATIO/RULE A professional license is not considered property under the F.L.A. It is difficult to come up with a value for a licence as property when the value of the licence is based on the labour of the licensee in the future. ANALYSIS On appeal, the judge focused on determining if a dental license could be deemed property as defined in s.4(1) of the F.L.A. There were two aspects the judge considered characterization of a license and the difficulty of valuing a licence in terms of family property. Characterization of a license The judge concludes that for matrimonial purposes, licenses are not property because of the following:  A license to practice a profession is not a right that is transferable . Also, if you separate before practice has even started, there is nothing to transfer.  It requires the personal efforts of the holder in order to be of any value in the future. The judge determined that work to be performed by a spouse in the future cannot be included as “net family property” to be equalized under s.5 of the F.L.A .  A right to work. The judge determined that all the attainment required in pursuit of professional training to enhance one’s future income should not be treated as property. Valuation of License The judge determined that since a license is not property under s.4 of the F.L.A , that “future labour does not constitute anything earned or existing at the valuation date.” Since a license is not property, Mrs. Caratun could not regain her contribution to her husband’s license through a constructive trust or through the unequal division of net family assets provision, found in s.5(6) of the F.L.A. CONCLUSIO N Keeping the principle of fairness in mind, the judge taking all factors into consideration, upheld the trial judge’s decision of giving Mrs. Caratun a lump sum payment of $30,000 for her contribution to her husband’s dental 40

license and was able to justify this through support provisions specifically in s.11 of the Divorce Act, R.S.C. 1970, C.d-8 (the “old Divorce Act”). NOTES DISSCUSSION NOTES  i. Property and Professional Degrees o In Woodworth v Woodworth , the court envisioned the husband's law degree as a "family asset" to which the wife had contributed. Thus the court decided (at 337) that she was entitled to realize "her expectation of economic benefit from the career for which the education laid the foundation." o The approach of the Michigan court was adopted by courts in other US states and was also reflected in some state legislative provisions; however, other states refused to recognize a professional degree as marital property: o In reviewing the different decisions of courts in the United States, Lenore Weitzman identified three basic approaches:  1) a reimbursement of costs (usually including direct out-of-pocket expenses such as tuition, loans, and living expenses and sometimes such indirect costs as forgone opportunities);  2) a sharing in enhanced earning capacity or benefits gained as a result of the profes- sional education (sometimes calculated by subtracting the present value of "pre- education earning capacity and the present value of the costs of education" from the present value of "post-education earning capacity"-the difference is the return on investment to be shared by both spouses); or  3) an equivalent opportunity-for example, the trial court in /vlorgan v /vlorgan, 366 NYS 2d 977 (1975), 383 NYS 2d 343 (1976) ordered a husband (who had been fully sup- ported through college and law school by his wife) to support her attendance at medi- cal school. The Court of Appeal, however, overturned this decision.  ii. A Critical Economic Perspective on Property and Professional Degrees o If and when the unit dissolves, some individual family members will benefit more than others o There is a need for a more significant role for matrimonial property rules in adjusting inequities between men and women at divorce, beyond an individual family context. o The principle of ·maximization of family welfare via specialization:  For example, "the husband working in the job market and the wife in the household"-as the key rationale for the traditional organization of families. On the basis of this premise-that each partner specializing in complementary activities is the best means of con- tributing to the overall well-being of the family unit- Knetsch identified a need to ensure that individual contributions can be made compatible with the goal of equality in the allocation of marital assets if the relationship ends. o There are external variables that may influence how families are organized.  For example:  Socialization that may discourage some interests and activities, based on gender; bias in tax laws that may create incentives for household production; the fact that women may tend to make smaller investments in human capital (although this may be changing); lack of support and flexibility in the job market to accommodate household duties; gender discrimination in the labour market; and issues about safety that may direct women to lower paying job opportunities.  iii. Property and Family Relationships o McCallum critiqued the court's property analysis in Caratun by analogizing the family context to a business partnership, suggesting a need to treat property in the family context more like property in commercial contexts. o The Partnerships Act provides the remedy of repayment of all or some of a premium where "one partner pays a premium to another on entering the partnership and the partnership is dissolved before the expiration of its term: a remedy not available to Mrs Caratun tor her contribution to her husband's degree in the expectation that she would share in the future profits. (In this way, pursuant to partner- ship law. McCallum argued that Mrs Caratun was the victim of fraud or misrepresentation.) o McCallum also identified issues in business partnerships where a firm's goodwill is important to the determination of "who has to pay whom when a partner withdraws or is expelled from the partnership." Analogizing a business partnership to a marriage, she argued that in cases where the partnership owns few assets, "placing a high value on goodwill may be the only way to ensure that the partner's spouse is compensated for a contribution to the partner's ability to earn a good living."  iv. Other Intangible Assets 41

o In Caratun, the Court of Appeal ordered a lump-sum payment of support for Mrs Caratun of $30,000, having concluded that the husband's degree was not "property." o The Supreme Court of Canada decided in Clarke v Clarke, that a spouse's pension constituted property under s 4 of the Nova Scotia Matrimonial Property Act.  v. The Context of Claims to Property in Degrees o Part of the pressure to include "property" in the family law statutory definitions clearly derives from increasing concern about post-separation rates of poverty, especially for women and children.  vi. The History of the Concept of "Family Property” o The statutory reforms in common law provinces in Canada in the late 1970s borrowed a tra- ditional civil law concept of "community property" from Quebec. Community property regimes in many civil law jurisdictions often create some automatic joint ownership of family assets during marriage. o Most common law provinces adopted the idea of ·deferred sharing· of community property-that is, recognition that married spouses have "separate properti entitlements during marriage, but a form of "community property" that is deferred until the time of the couple's separation or divorce. o The Civil Code of Quebec limits entitlement to community property to persons who are married-that is, cohabiting couples have no entitlement to share property (or to receive spousal support) at the end of their relationship. Week 9: March 23, 2022 (p. 606-616) Topic: Equity and Family Property Reform for Cohabitees CHAPTER 7: Concurrent Interests and Family Property IV. Family Property: A Study in Legislative and Judicial Reform C. Equity and Family Property Reform for Cohabitees  About half of Canada's provincial family property statutes focus on the entitlements of married spouses at separation or divorce.  Several provinces have extended their family property regimes to cohabiting couples who meet the statutes' defined tests of length of cohabitation. o For example: BC Family Law Act, SBC 2011, c 25, s3 42

 This act creates and entitlement to share in property at the end of a cohabiting relationship that has existed for at least two years.  In other provinces (including Ontario), the statutory property regime does not apply to cohabiting couples, even though there may be many similarities in the ways in which cohabiting couples make family decisions that disadvantage individual family members. o Despite functional similarities between married couples and cohabiting couples, the SCC decided in 2002 that there was no Charter discrimination arising out of the exclusion of cohabiting couples from legislative schemes concerning property sharing at separation or divorce in common law provinces ( Nova Scotia (Attorney General) v Walsh, 2002 SCC 83) o A slim majority of the SCC also upheld provisions of the Civil Code of Quebec, which entitled only married couples (and not cohabiting couples) to spousal support and property sharing at the end of their relationship ( Quebec (Attorney General) v A)  Principles of equity (in Murdoch) were (re)fashioned by the SCC to achieve goals of equality for cohabitees in common law provinces. Pettkus v. Becker [1980] 2 SCR 834 Plaintiff : Petttkus Defendant : Becker Area of Law : FACTS Rosa Becker and Lothar Pettkus, two immigrants to Canada, met in 1955. They moved in together and lived as husband and wife, although they did not marry, and they had no children. Until 1960, Becker paid the rent and living expenses from her outside income and Pettkus deposited his income in a bank account in his name. In 1961, they bought a farm in Quebec. The money came from Pettkus' account and ownership ("title") was taken out in his name, as was the custom in those days. They shared the farm labour and both worked very hard. They turned their farm into a profitable bee-keeping operation. Becker also earned some income which was used for household expenses and to repair the farmhouse. Their savings went back into the farm or the Pettkus bank account. In 1971, with profits from the farm and more money from Pettkus' bank account, they purchased a property in Ontario and again registered it in his name. In 1972, Becker separated from Pettkus. He threw $3,000 on the floor and told her to take it, along with a car and forty beehives with bees. At his request, she moved back in with him three months later. She returned with the car, deposited $1,900 in his account, and the forty bee-hives without the bees. Shortly thereafter, with these returned assets, joint savings and proceeds from the sale of the Quebec land, they purchased another Ontario farm in Pettkus' name. They now had two valuable pieces of land, and in 1974 they moved and built a house upon one of them. They lived off their income from their thriving bee-keeping business. In the fall of that year, she left him for good, taking the car and $2,600 in cash. She also sued for a one-half interest in the properties, bee-keeping business and assets acquired through their joint efforts. Pettkus and Becker had lived together as husband and wife for almost twenty years. Under Ontario legislation at that time, a common law wife was not legally entitled to a share in any property owned by her husband. Therefore, any remedy for Becker would have to be based on the wholly equitable doctrine of constructive trust and principles of unjust enrichment. ISSUE Is Miss Becker, through the doctrine of constructive trust, entitled to an equitable half share in the bee-keeping business? RATIO/RULE Where one person in a relationship tantamount to spousal prejudices herself in the reasonable expectation of receiving an interest in property and the other person in the relationship freely accepts benefits conferred by the first person in circumstances where he knows or ought to have known of that reasonable expectation, it would be unjust to allow the recipient of the benefit to retain it. ANALYSIS Dickson CJ first considered the doctrine of resulting trust. To a establish a resulting trust, Dickson CJ stated that it is necessary to show that there was a “common intention” on the part of the titleholder as well as the claimant that the property be shared. After reviewing the cases and some of the academic literature that showed the artificiality of such a concept in the family context. Dickson CJ note that the trial judge had found, as a 43

fact, that there was no common intention in this case on the basis of Mr. Pettkus’s testimony. This left Miss Becker with the constructive trust option as the sole juridical foundation for her claim. The principle of unjust enrichment lies at the heart of the constructive trust. Lord Mansfield, in the case of Moses v MacFerlan (1760), put the matter in these words: “The gist of this kind of action is that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money.” In Rathwell , Dickson CJ suggested that there are three requirements to be satisfied before an unjust enrichment can be said to exist: 1) an enrichment, 2) a corresponding deprivation and 3) absence of any juristic reason for the enrichment. Thus, it is not enough for the court simply to determine that one spouse has benefited at the hand of another and then to require restitution. It must, in addition, be evident that the retention of the benefit would be “unjust” in the circumstances of the case. Although equity is said to favour equality, as stated in Rathwell , it is not every contribution which will entitle a spouse to a one-half interest in the property. After the ruling in Becker's favour, Pettkus avoided paying out the money owed. When Pettkus's assets were finally liquidated, Becker's lawyer took most of the share, and left her with nothing. In a tragic turn of events, Becker committed suicide with a gunshot to the head on November 5, 1986. The suicide note accused the legal system of forcing her to do it. Several provinces subsequently amended their family relations legislation to include common law relationships as to the division of family assets. (Under the Canadian Constitution divorce is governed by federal statute, property by provincial statute. Pettkus with its new version of the constructive trust was soon adopted in Australia. The High Court of Australia enunciated a similar rule in Muschinski v Dodds (1985) 160 CLR 583 and Baumgartner v Baumgartner (1987) 164 CLR 137, albeit with the caveat that the complaining party must not have been responsible for the breakdown of the relationship. Constructive Trust  The principle of unjust enrichment lies at the heart of the constructive trust.  "[T]he gist of this kind of action is that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money." It would be undesirable, and indeed impossible, to attempt to define all the circumstances in which an unjust enrichment might arise.  The great advantage of ancient principles of equity is their flexibility: the judiciary is thus able to shape these malleable principles so as to accommodate the changing needs and mores of society, in order to achieve justice. The constructive trust has proven to be a useful tool in the judicial armoury ....  In Rathwell I ventured to suggest there are three requirements to be satisfied before an unjust enrichment can be said to exist: an enrichment, a corresponding deprivation and absence of any juristic reason for the enrichment. This approach, it seems to me, is supported by general principles of equity that have been fashioned by the courts for centuries, though, admittedly, not in the context of matrimonial property controversies.  The common law has never been willing to compensate a plaintiff on the sole basis that his actions have benefited another. It is not enough for the court simply to determine that one spouse has benefited at the hands of another and then to require restitution. It must, in addition, be evident that the retention of the benefit would be "unjust" in the· circumstances of the case.  Miss Becker supported Mr. Pettkus for five years. She then worked on the farm for about 14 years. The compelling inference from the facts is that she believed she had some interest in the farm and that that expectation was reasonable in the cir- cumstances. Mr. Pettkus would seem to have recognized in Miss Becker some property interest, through the payment to her of compensation, however modest. There is no evidence to indicate that he ever informed her that all her work per- formed over the 19 years was being performed on a gratuitous basis. He freely accepted the benefits conferred upon him through her financial support and her labour.  Mr. Pettkus has had the benefit of 19 years of unpaid labour, while Miss Becker has received little or nothing in return. As for the third requirement, I hold that where one person in a relationship tantamount to spousal prejudices herself in the reasonable expectation of receiving an interest in property and the other person in the relationship freely accepts benefits conferred by the first person in circumstances where he knows or ought to have known of that reasonable expectation, it would be unjust to allow the recipient of the benefit to retain it.  "The parties lived together as husband and wife although unmarried, for almost 20 years, during which period she not only made possible the acquisition of their first property in Franklin Centre by 44

supporting them both exclusively from her income during 'the lean years,' but worked side by side with him for 14 years building up the bee-keeping operation which was their main source of livelihood."  A constructive trust arose in favour of the respondent by virtue of "joint effort" and "team work," as a result of which Mr. Pettkus was able to acquire the Franklin Centre property, and subsequently the East Hawkesbury and WestHawkesbury properties. The Ontario Court of Appeal imposed the constructive trust in the interests of justice and, with respect, I would do the same. The “Common Law” Relationship  The purpose of constructive trust is to redress situations which would otherwise denote unjust enrichment. In principle, there is no reason not to apply the doctrine to common law relationships.  Mr. Pettkus and Miss Becker lived as man and wife for almost 20 years. Their lives and their economic well-being were fully integrated. The equitable principle on which the remedy of constructive trust rests is, broad and general; its purpose is to prevent unjust enrichment in whatever circumstances it occurs.  Counsel for Mr. Pettkus correctly points out that the Family Law Reform Act of Ontario, enacted after the present litigation was initiated, does not extend the presumption of equal sharing, which now applies between married per- sons, to common law spouses.  The argument is made that the courts should not develop equitable remedies that are, "contrary to current legislative intent." The rejoinder is that legislation was unnecessary to cover these facts, for a remedy was always available in equity for property division between unmarried individuals con- tributing to the acquisition of assets. The effect of the legislation is to divide “family assets" equally, regardless of contribution, as a matter of course. The court is not here creating a presumption of equal shares: There is a great difference between directing that there be equal shares for common law spouses and awarding Miss Becker share equivalent to the money or money's worth she contributed over some 19 years. Causal Connection  The contribution of Miss Becker was such as enabled, or assisted in enabling, Mr. Pettkus to acquire the assets in contention.  For the unjust enrichment principle to apply it is obvious that some connection must be shown between the acquisition of property and corresponding deprivation. On the facts of this case, that test was met. The indirect contribution of money and the direct contribution of labour is clearly linked to· the acquisition of property, the beneficial ownership of which is in dispute. Miss Becker indirectly contributed to the acquisition of the Franklin Centre farm by making possible an accelerated rate of saving by Mr. Pettkus.  The question is really an issue of fact: Was her contribution sufficiently substantial and direct as to entitle her to a portion of the profits realized upon sale of the Franklin Centre property and to an interest in the Hawkesbury properties and the bee-keeping business? o The Ontario Court of Appeal answered this question in the affirmative, and I would agree. Respective Proportions  Although equity is said to favour equality, as stated in Rathwell, it is not every contribution which will entitle a spouse to a one-half interest in the property. The extent of the interest must be proportionate to the contribution, direct or indirect, of the claimant. Where the contributions are unequal, the shares will be unequal.  It could be argued that Mr. Pettkus contributed somewhat more to the material fortunes of the joint enterprise than Miss Becker but it must be recognized that each started with nothing; each worked continuously, unremittingly and sedulously in the joint effort.  Physically, Miss Becker pulled her fair share of the load: weighing only 87 pounds, she assisted in moving hives weighing 80 pounds. Any difference in quality or quantum of contribution was small.  The Ontario Court of Appeal in its discretion favoured an even division and I would not alter that disposition, other  than to note that in any accounting regard should be had to the $2,600 and the car, which Miss Becker received on separation in 1974. CONCLUSIO N Becker was successful and the appeal was dismissed. The only remedy here is constructive trust. NOTES Take note of this case’s reasoning about unjust enrichment and the remedy of constructive trust. This case was a landmark family law decision of the SCC. The Court established a new formulation of the 45

constructive trust as a remedy for unjust enrichment based on the ideas of Professor Donovan Waters, and in particular the requirements for such constructive trust in a common law relationship separation. The Pettkus formulation of constructive trust was subsequently adopted elsewhere in the common law world. Discussion Notes  i. The Concurring Judgments in Pettkus v Becker: Differing Views about Constructive Trust o Although Ritchie. Martland, and Beetz JJ agreed with the conclusion of Dickson J, they identified "substantially different" reasons. o Ritchie J decided that Becker had made a financial contribution and that there was a "common intention" that it be used for the benefit of both parties o Martland J (Beetz J concurring) similarly concluded that the case could be resolved using the traditional doctrine of resulting trust. In addition, however, these judges expressed serious concern about the use of constructive trust principles, concluding that the adoption of constructive trust involves an extension of the law as so far determined in this court. Such an extension is undesirable. It would clothe judges with a very wide power to apply what has been described as "palm tree justice" without the benefit of any guidelines. By what test is a judge to determine what constitutes unjust enrichment? The only test would be his individual perception of what he considered to be unjust.  ii. (Re)Defining “Contribution”: Legal Recognition of Household Work o As Pettkus v Becker demonstrates. the SCC applied the reasoning of its earlier decision in Rathwell v Rathwell (a case concerning property entitlement at divorce for married spouses) to the situation of a cohabiting couple. o Even though the provincial legislature had excluded cohabitees from the application of its family property regime, the court decided that there was no bar to the availability of an equitable remedy in the present circumstances." o In some cases, after Pettkus v Becker, there were suggestions that a constructive trust would be awarded only where the non-titled spouse had performed exceptional work (like Rosa Becker). especially work outside the home. o To some extent, the exceptional work done by Ms. Becker (and by Mrs. Murdoch a decade earlier) may have contributed to this limited precedential impact of Pettkus v Becker in relation to principles of unjust enrichment in cohabiting relationships. o This issue was addressed again in the SCC in Peter v Beblow, [1993] 1 SCR 980.  In this case, Ms. Peter sought an order declaring a constructive trust in relation to family assets at the end of a 12-year cohabiting relationship with Mr. Beblow in British Columbia. She had done all of the domestic work, looked after the children, worked part-time. and paid some of the costs of groceries and household supplies. However, title to most of the assets was in Mr. Beblow's name.  The trial court in British Columbia allowed Ms Peter's action. concluding that there was an enrichment, a corresponding deprivation. and the lack of any juristic reason for the enrichment. However. the BC Court of Appeal allowed an appeal, concluding that there was an unjust enrichment, but no corresponding deprivation and no causal link between Ms. Peter's contributions and the property owned by Mr. Beblow at separation.  On appeal to the SCC, a unanimous court allowed the appeal.  Mclachlin J addressed Mr. Beblow's argument that: “ Some types of services in some types of relationships should not be recognized as supporting legal claims for policy reasons. More particularly, homemaking and childcare services should not. in a marital or quasi-marital relationship. be viewed as giving rise to equitable claims against the other spouse.”  Mclachlin J concluded that "this argument is no longer tenable in Canada, either from the point of view of logic or authority .... The notion. moreover, is a pernicious one that systematically devalues the contributions which women tend to make to the family economy."  iii. Subsequent Refinements and Remedies for Unjust Enrichment o The awards of a constructive trust in Pettkus v Becker and Peter v Beblow were not the only issues raised in relation to unjust enrichment principles and cohabiting relationships.  In Sorochan v Sorochan. [1986] 2 SCR 38, for example, the Supreme Court of Canada held that a trust could be awarded where the non-titled cohabitee had contributed to the maintenance of property already owned by the other cohabitee at the beginning of the cohabiting relationship (thus. not requiring a claimant's contribution to the acquisition of property, as identified in Pettkus v Becker). o There have also been different approaches to the nature of the causal connection between the contribution of the non-titled cohabitee and the property interests subject to an award of a constructive trust, an issue addressed at some length in Peter v Beblow. o Peter v Beblow also focused on the issue of whether a constructive trust is the required remedy once there is a finding of unjust enrichment, or whether money damages must first be shown to be an inadequate remedy. 46

 Mclachlin J held that, once a court has substantiated a claim of unjust enrichment, the second step in analysis requires the court to consider the appropriate remedy: it is first necessary to consider whether a money payment based on quantum meruit (money damages) is sufficient; and then only if such a remedy is inadequate, to consider whether there is a nexus between the contribution and the property to ground a remedy of constructive trust. Thus, a determination that there is unjust enrichment does not automatically result in the remedy of constructive trust; instead, a court must first assess the adequacy of the remedy of quantum meruit and only if this remedy is inadequate, proceed to consider the remedy of constructive trust. (In addition, the remedy of constructive trust is available only if there is a connection between the contribution and the property.)  In Kerr v Baranow and Vanasse v Seguin, the court reviewed in detail the remedial context for unjust enrichment claims in the context of cohabiting couples and identified a third possible remedy: a monetary award based on a "joint family venture."  In Vanasse, the opposite-sex couple had cohabited for 12 years. For the first four years, they each had successful independent careers in Ottawa, but when the male partner decided to relocate to Halifax, the woman took leave from her employment to move there. In Halifax, the partners agreed to start a family, and the woman had two children and remained at home to care for them in the context of the man's very successful business, one that required him to travel a great deal. Eventually, the man sold his shares in the business for about $11 million and the couple moved back to Ottawa, where both were involved in childcare and household work for a few years, but they then separated. o In the SCC Cromwell J held that a quantum meruit payment would not compensate the woman for her significant contribution, but a constructive trust remedy was not available because she could not show a connection between her contributions and property owned at separation. In this context, Cromwell J identified a new remedy based on the joint family venture  The court identified four factors to consider in determining whether a joint family venture exists: mutual effort. economic integration, actual intent. and priority of the family o In Vanasse, the court held (at para 137) that Ms. Vanasse had been an equal contributor to the family enterprise, and ordered a monetary payment amounting to one-half of the prorated increase in Mr. Seguin's net worth during the "period of unjust enrichment" (mainly the years in Halifax). less the value of some other family assets held by Ms. Vanasse. o The remedy based on a joint family venture was criticized because it requires a detailed and complex analysis of the work done by each member of the cohabiting couple as well as the need to link work to the accumulation of family wealth  Claims. of unjust enrichment may also arise in the context of family relationships other than marriage or cohabitation.  In a case in which a son claimed unjust enrichment in relation to caring for his mother in her home for 30 years. The claim was based on her promise that he would have the home after her death. In upholding the son's claim. the appeal court carefully identified the steps to be followed in applying the principles of unjust enrichment. In this case, since the house had already been sold, the appeal court granted equitable damages  iv. Same-Sex Cohabitees, Constructive Trusts and Reform Proposals o Prior to parliamentary recognition of same-sex marriage in Canada (see the Civil Marriage Act, SC 2005, c 33, s 2), the principles of unjust enrichment and the constructive trust remedy were also used in the context of cohabiting relationships involving same-sex couples. o Moreover. as early as 1993, the OLRC recommended the extension of the family property regime of the Family Law Act. 1986 to all heterosexual cohabitees, and to same-sex cohabitees if they were registered as "registered domestic partners," an arrangement proposed by the report. o Although the OLRC recommendations were never implemented in Ontario, same-sex couples who marry are now included under the Family Law Act regime for property sharing at the end of their relationship. o In 1996, OLRC. Principles of Land Law further recommended (at 108) that all property, both real and personal. co- owned by spouses should be presumed to be held in joint tenancy. o The Report on Family Property Law recommended that the definition of "spouse" in relation to this presumption of joint tenancy should apply to cohabitees o These issues about property arrangements at the end of different kinds of intimate relationships raise difficult questions for the law of property, both in Canada and elsewhere. 47

 In the United Kingdom. for example. some commentators have focused on concerns about the uncertainties of both constructive trusts and cohabiting relationships with respect to property principles.  Others, including John Dewar, have approached issues about property and families by focusing on the family home, suggesting a need to examine the content of property rights for families and to distinguish such rights in relation to the home, such as: "a right of control over dealings (such as mortgages or sales); a right of occupation or enjoyment; a right of capital entitlement on sale; and a right. on the termination of the relationship, to have basic needs met out of the family resources represented by the family home"  v. Pettkus v. Becker: Problems of Enforcement o Although the decision in Pettkus v Becker appeared to provide Rosa Becker with a beneficial interest in one-half of the property held by her partner, subsequent newspaper reports indicated that there were problems in enforcing the judgment.  Rosa Becker shot herself in the forehead. She had been working in Franklin Centre. Quebec as a $60-a- week housekeeper. At her bedside, Miss Becker left several letters, written in German, in which she described her death as a protest against a legal system that prevented her from seeing a penny of a SCC award worth about $150,000.  The report further explained that a part of Pettkus' property was ordered to be sold in 1984 to comply with the decision of the SCC, but the total amount ($68,000) went to pay the legal fees of Becker's lawyer. In a further report on May 26, 1989, The Globe and Mail indicated that the sum of $13,000 was paid to the trustees of Becker's estate, an amount agreed to by them and Mr. Pettkus as a financial settlement of her claims.  The "successful" litigant did not benefit from the decision in any material way. 48