Priorities and Competing Claims to Land
| Author | Paul M. Perell |
| Profession | WeirFoulds LLP |
| Pages | 363-393 |
Priorities
and
Competing
Claims
to
Land
Paul
M.
Perell
I.
INTRODUCTION
Ancient legal
and
equitable principles
and
ancient solutions
to
legal
problems underlie
the
design
of the
Ontario land registry systems but,
with
the
passage
of
centuries,
it is
easy
to
forget
the
problems that
had to
be
solved
so
that
an
owner
or
purchaser
of
land
may
rely
on a
public reg-
ister
of
titles
to
protect
his or her
ownership
or to
make
it
safe
to
acquire
ownership
in the
first
place. Moreover, real estate
and
civil litigation
practitioners would
benefit
from
recalling
the
ancient legal problems
as
they strive
to
find
the
answers
for
modern
disputes
about
the
ranking
of
claims
to
land.1
Practitioners would also
benefit
from
recognizing that
WeirFoulds
LLP, Toronto, Ontario.
See,
generally:
B.
Bucknall,
"Fraud
and
Forgery under
the
Land Titles Act"
in
The
Six-Minute
Real Estate Lawyer
(Toronto:
L.S.U.C.,
2000);
V.
DiCastri,
Registration
of
Title
to
Land,
looseleaf (Toronto: Carswell, 1987);
J.
Lem,
"Annotation:
DeGasperis
Muzzo
Corp.
v.
952865
Ontario
Inc."
(2000),
35
R.P.R.
(3d) 243;
M.
Neave,
"Conveyancing under
the
An
Analysis
of the
Priority
Provisions
and
Some Suggestions
for
Reform"
(1977)
55
Can.
Bar
Rev. 500;
M.
Neave, "The Concept
of
Notice
and the
Ontario
Land
Titles
Act"
(1976)
54
Can.
Bar
Rev. 132;
M.
Neave,
"Indefeasibility
of
Title
in the
Canadian Context"
(1976)
26
U.T.L.J.
173;
W.B.
Rayner
&
R.H. McLaren, eds.,
Falconbridge
on
Mortgages,
4th
ed.
(Agincourt,
ON:
Canada
Law
Book,
1977);
R.C.B.
Risk,
"The Record
of
Title
to
Land" (1971)
21
U.T.L.J.
465;
and B.
Ziff, Principles
of
Property
Law,
3d
ed.
(Toronto: Carswell,
2000).
1
363
364
Paul
M.
Perell
the
Ontario land registration statutes cannot
be
read literally
and
that
there
is a
centuries'
old
tradition
for
courts
to
read legal
and
equitable
doctrines into statutes about land law. Thus,
for
example,
as
will
be
explained below, courts have read into
Ontario's
Act2
and its
Land
Titles
Act3
the
doctrine
of
actual notice, under which
a
registrant
of an
interest
in
land
takes subject
to
equitable
and
legal
interests
of
which
he
or
she had
actual notice.
One
result
of
this heritage
is
that Ontario
lawyers
confront
a
complex
and
perplexing body
of law
about priorities.
This article reviews
the
development
of the law of
priorities
for
claims
to
real property
in
Ontario
and
examines some
of the
lessons
from
the
case
law
about such matters
as the
rule
of
nemo
dat
qui non
habet,
the
doctrine
of
actual
notice,
the
idea
of the
bonafide
purchaser
f
or
value without notice,
the
doctrine
of
subrogation,
and
some conse-
quences
of
forgeries
and
fraudulent
documents.
Before
a
reliable land registry system could
be
constructed,
one of the
ancient problems that
had to be
solved
was the
real property rule
nemo
dat
qui non
habet.
The
nemo
dat
rule
is
that,
with some
exceptions,
an
owner
of
land cannot convey
a
greater title than
he or she
actually has.
Historically,
this rule applied when there
was a
contest between claims
to
the
legal title
or
between claims
to an
equitable title
or
interest
in the
land.
An
exceptional rule applied
for the
competition between
a
legal
claim
and an
equitable one.
The
common
law
rule
was
that legal title
was in
rem,
that
is,
good against
the
world, and,
thus,
the
first
titlehold-
er
had
priority over
a
later rival.
The
rule
in
equity
was
that where
the
equities
are
equal,
the
first
in
time prevails
(qui
prior
est
tempore
potior
est
jure),4
with
the
result
that,
once again,
the
claimant
first
in
time prevails.
2
R.S.0.1990,
c.
R.20.
3
R.S.0.1990,
c.
L.5.
4
Rice
v.
Rice
(1853),
2
Drew
73;
Phillips
v.
Phillips
(1862),
4 De G. F. & J.
208;
Merchants'
Bank
of
Canada
v.
Morrison
(1872),
19 Gr. 1;
Cave
v.
Cave
(1880),
15
Ch. D.
639.
If the
equities
are not
equal, then
a
later equitable interest
may
have
priority
over
an
earlier
equitable
interest:
Bulut
v.
Brampton
(City)
(2000),
48
O.R. (3d)
108
(C.A.);
and
Canada
Life
Assurance
Co
.
v.
Kennedy
(1978),
21
O.R.
(2d)
83
(C.A.).
H.
THE
NEMO
DAT
RULE
AND TH
E
DOCTRINE
OF
ACTUAL
NOTICE
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