Title and Title Opinions

• Author: Delee A. Fromm
• Profession: McCarthy Tetrault LLP
• Pages: 395-446

Title

and

Title

Opinions

Delee

A.

Fromm

I.

INTRODUCTION

Set

out in

this

paper

is a

broad

and

varied

discussion

of

aspects

relating

to

title

and

title opinions.

The

topics with regard

to

title were chosen

for

their relation

to,

and

impact

upon,

the

giving

of

title opinions. Thus,

the

length

of the

title search period under

the

Registry

Act

together with

what

constitutes

a

claim

and

revival

of

claim

are

important

to

under-

stand

in

order

to

provide both

an

opinion with regard

to

good

and

mar-

ketable title

as

well

as a

list

of

title

qualifications.

It is

important also

to

know

the

effect

of

fraud

or

forgery

on the

standard

of

care required

from

a

lawyer

in

giving

a

title opinion

as

well

as the

effect

of

inconsistent

search standards

on

qualifications.

The

problems relating

to the

21-day

escrow

period

under

the

Land

Titles

Act as

well

as the

various types

of

current

freehold

parcels

affect

title

qualifications

and

assumptions.

In

more

and

more title opinions,

the

results

of

off-record

searches

are

being

included

and

therefore

a

brief

section dealing with

off-record

searches

was

included

in

this

paper. Similarly, statutory

liens,

which

affect

title,

are

briefly

dealt with.

At the

heart

of a

title opinion

is a

determination

of

what constitutes good

and

marketable title,

and

hence

the

most recent

case

law is

reviewed with regard

to the

test employed

in

such determi-

Of

McCarthy

Tetrault

LLR

395

396

Delee

A.

Fromm

nation

as

well

as the

different

circumstances

or

interests that never,

always,

or

sometimes

affect

marketable title.

There

are

numerous writings with regard

to

opinions, primarily

relating

to

corporate/enforceability

opinions given

to

third parties.

Although title

opinions

are

somewhat more straightforward,

it is

nev-

ertheless important

to

look

at the

purpose

of

such opinions

as

well

as

their

elements. These

are

discussed

in

detail

in

this paper.

Finally,

it was

beyond

the

scope

of

this paper

to

discuss

in

detail

such things

as

which interests

can

form

a

cloud

on

title

and the

reme-

dies available, including

the use of

title insurance

to

assist

a

lawyer

in

dealing with such title problems. With regard

to

this topic,

the

reader

is

referred

to the

detailed discussions

in

other papers

and

presentations

at

these Special Lectures

2002.

H.

REGISTRY

SYSTEM

1)

Part

III of the

Registry

Act

1.

Search

of

Title

During

the

early 1990s there

was a

difference

of

opinion amongst prac-

titioners

and

academics

as to the

length

of the

title search period

in the

registry system.

The

major

dispute

was

whether only

those

instruments

found

within

a

forty-year

search period

from

the

date

of the

search

should

be

examined

or

whether

one

needed

to go

outside such

a

forty-

year period

to

find

a

"good root

of

title."1

This controversy

was

settled

by the

Supreme Court

of

Canada,2

which dismissed

the

appeal

in

Fire

v.

Longtin

and

accepted

and

adopted

in

their entirety

the

reasons

for

judg-

ment delivered

by

McKinley J.A. speaking

for a

unanimous Court

of

Appeal.3

McKinley J.A.

in her

decision

is

clear that

forty

years means

forty

years:

It

is my

view that when Part

III of the

[Registry]

Act was

passed

in

1981

one of its

specific

purposes

was to

clear

up

title

problems

of

this

sort,

and

support titles

on

which successive grantees

may

have relied.

As

1 See D.

Fromm,

"The Search Period Under

the

Registry

Act"

(1992)

1

Nat'l

Real

P.L.R.

(2d)

137-159;

and D.

Fromm,

"The

Title

Search

Period

Under

the

Registry

Act

Revisited"

in

Real Property

— The

Road

to

Recovery

(Toronto:

CBA-0,1995);

and B.

Bucknall,

"A

Tangled

Web"

in A

Searching Analysis

(Toronto:

CBA-0,1995).

2

[1995]

4

S.C.R.

3,

aff'g

(1994),

17

O.R. (3d)

418

(C.A.)

[hereinafter

Fire].

3

Ibid.

(C.A.).

Title

and

Title

Opinions

397

commentary

by

Grange,

J.A.

in the

Tkach

case,

the

application

of

Part

III

may

result

from

time

to

time

in

apparent

injustices

to

persons with

claims

to

real property which

are

older than

40

years. However

the

leg-

islation

has

weighted that possibility against

the

expectations

of

per-

sons more recently dealing with

the

land.

In the

final

result,

it has

opted

for

legislation which, although

it may

appear

to

favour

more

recent

grantees, still contains many safeguards

of the

right

of

those

claiming under more ancient

conveyances.4

The

provisions

set out in

Part

III of the

Registry

Act

(hereinafter

Provisions)

are

similar

to

legislation

in the

United

States

known

as

mar-

ketable

title

legislation.

(For

ease

of

reference,

the

Provisions

are

attached

as

Appendix

A to

this

paper.)

Jeremy

Johnson,

in an

excellent

review

of

several

court

decisions,5

summarizes

the

five

main

features

of

the

marketable

title

Acts:

1.

A

statutory limit

on the

period

of the

chain

of

title needed

to

estab-

lish

if a

title

is

marketable.

Typically,

the

search period

is for a

stat-

ed

number

of

years

and

then

to a

root

of

title.

In the

U.S. Model

Act,

the

owner

who has

such

a

chain

of

title back

to a

good root

is

deemed

to

have "marketable record title."

2.

A

provision that causes "ancient" claims

to

expire

or be

extin-

guished unless

a

notice

is

registered within

the

period

to be

searched.

3. A

mechanism

for

registering

and if

necessary re-registering

notices

of

claim

from

time

to

time

in

order

to

prevent them

from

being extinguished

(or

being

at the

risk

of

extinguishment) under

subparagraph

2

[above].

4.

Exceptions

to the

operation

of the

legislation.

5.

A

declaration that this legislation does

not

preserve claims that

have

otherwise expired.

Thus,

the

Supreme

Court

of

Canada

settled

not

only

the

issue

of the

length

of the

title

search

period

but

also

of

marketable

title,

for

McKinley

J.A.,

in

using

the

word

"ancient",

reveals

both

the

Court

of

Appeal's

familiarity

with

marketable

title

jargon

and its

endorsement

thereof.

4

Fire,

ibid,

at

427.

5 J.

Johnson,

"Part

III of the

Ontario

Registry

Act at the

Hands

of the

Court:

Panacea

or

Pandora's

Box"

in A

Searching

Analysis:

Recent

Ontario

Jurisprudence

on

the

Investigations

of

Titles

(Toronto:

CBA-0,1994).