john r. wood1 · march 28, 2014 [original] understanding electronic registration: rights of way and...

March 28, 2014

[Original]

Understanding Electronic Registration: Rights

of Way and Property Rights Generally

Ramsay (2005) 1387881 Ontario Inc. v. Ramsay, 2005 CanLII 23211 (ONCA)

John R. Wood1

Electronic registration has been a

remarkable Ontario achievement. For it,

Ontario converted millions of properties

from registry to land titles. The Ontario

40-year rule governed this, but Ontario,

wisely used a streamlined process.

Sadly, the conversions led to a political

interpretation of that rule. Ramsay is an

outstanding example of the Ontario

Court of Appeal's judicial interpretation.

Rights of way have become a lightning

rod for fundamental questions about the

Ontario land registration systems. This

original 2014 article shows fully how

the conversions affected rights of way.

If you have a copy of this case comment,

please check that you have the latest version.

1 John R. Wood is an Ontario lawyer, with a special interest in in real estate and

land registration. He was with Tilley Carson & Findlay and Borden Ladner

Gervais LLP from 1973 to 2006. He has an LL.B. from the University of

London, England, and has been an English solicitor.

Understanding Electronic Registration: Rights of Way and

Property Rights Generally

Contents2

Introduction .................................................................... 6

Summary ......................................................................... 7

Citations .......................................................................... 9

Policy ................................................................................ 9

General background .................................................... 12

Land titles, principles ................................................... 13

Background (land titles, principles) ........................................ 13

Purposes (land titles, principles) ............................................. 15 Interpretation (land titles, principles) ..................................... 16

Giving key interests (land titles, principles) ............................ 17 Preserving possible interests (land titles, principles) .............. 20 Overriding rights (land titles, principles) ................................ 21 Priority (land titles, principles) ................................................ 22

Particular person being unable to benefit from given interest

(land titles, principles).............................................................. 22

Mistakes (land titles, principles) .............................................. 24 Four basic questions (land titles, principles, mistakes)......... 24 (1) Effect of register (land titles, principles, mistakes) ......... 25 (2) Rectification (land titles, principles, mistakes) ............... 25

(3) Compensation (land titles, principles, mistakes) ............. 28 (4) Burden of loss (land titles, principles, mistakes) ............ 30

Land titles, rights of way ............................................. 32

Practice for rights of way (land titles, rights of way) .............. 32 Entry of right of way in property description (land titles,

rights of way, practice) ......................................................... 32

Transfer of easement (land titles, rights of way, practice) .... 34 Indirect validation the right of way (land titles, rights of way,

practice)................................................................................. 34

Register for subject-to land generally governs (land titles,

rights of way, practice) ......................................................... 34 Other problems with rights of way (land titles, rights of way,

practice)................................................................................. 36

General rules (land titles, rights of way) ................................. 37

Section 44(1) ¶2 (land titles, rights of way)............................. 37

Section 39 (land titles, rights of way) ...................................... 38 Words of section 39 (land titles, rights of way, section 39) . 38 General rules (land titles, rights of way, section 39) ............ 40

2 This is an article published on CanLII Connects as a case comment on Ramsay

(2005). It's substantially a copy of an article originally published in Carswell's

Real Property Reports as (2014) 38 R.P.R. (5th) 4.



Special rules when one property in registry when easement

granted (land titles, rights of way, section 39) ...................... 42 Need on conversion to register notice of easement (land titles,

rights of way, section 39) ...................................................... 43

Sections 45, 87 and 93, "together with all rights" and subject

to encumbrances (land titles, rights of way) ........................... 44 Words of Act (land titles, rights of way, sections 45, 87 and

93) ......................................................................................... 44 "Together with all rights" (land titles, rights of way, sections

45, 87 and 93) ....................................................................... 45

Together with, added words for transfer (land titles, rights of

way, sections 45, 87 and 93) ................................................. 46

Together with, charge (land titles, rights of way, sections 45,

87 and 93) ............................................................................. 48 Subject to encumbrances (land titles, rights of way, sections

45, 87 and 93) ....................................................................... 49

Section 44(1), "except the easement therein," (land titles,

rights of way) ............................................................................ 51 Background (land titles, rights of way, "except the easement

therein") ................................................................................ 51 Meaning (land titles, rights of way, "except the easement

therein") ................................................................................ 52

Effect of qualifications on government conversions (land titles,

rights of way) ............................................................................ 54 Act (land titles, rights of way, qualifications) ....................... 54

Standard government words (land titles, rights of way,

qualifications) ....................................................................... 55

Failure to qualify for right openly used (land titles, rights of

way, qualifications) ............................................................... 57

Results (land titles, rights of way) ........................................... 58 Overall results for right of way on conversion (land titles,

rights of way, results) ............................................................ 58 1. Register showed nothing for right of way (land titles, rights

of way, results) ...................................................................... 60

2. Register showed right of way (land titles, rights of way,

results) ................................................................................... 60 3. Register said "except the easement therein" (land titles,

rights of way, results) ............................................................ 61

Land titles conversions from registry ......................... 62

Electronic registration (land titles conversions) ..................... 62 Normal land titles procedures (land titles conversions) ......... 62 Government conversion procedures, effects (land titles

conversions) .............................................................................. 63 Legal framework (land titles conversions, procedures, effects)

............................................................................................... 63



Legal effect (land titles conversions, procedures, effects) .... 66 General comments (land titles conversions, procedures,

effects)................................................................................... 67

Government conversion procedures, rights of way (land titles

conversions) .............................................................................. 70 Original procedures (land titles conversions, procedures,

rights of way) ........................................................................ 70 • Issue (original procedures) ................................................. 70 • Possible solutions (original procedures) ............................. 70 • Actual solution (original procedures) ................................. 71

New policies (land titles conversions, procedures, rights of

way)....................................................................................... 72

• Issue (new policies) ............................................................ 72 • Solution (new policies) ....................................................... 72 Ramsay (2005) and after (land titles conversions, procedures,

rights of way) ........................................................................ 73

Results (land titles conversions, procedures, rights of way) . 74

Registry 40-year rule, principles ................................. 74

Background (registry 40-year rule, principles) ....................... 74 Purposes (registry 40-year rule, principles) ............................ 77

Interpretation (registry 40-year rule, principles) .................... 78 Rules and periods (registry 40-year rule, principles).............. 82

Past events (registry 40-year rule, principles) ......................... 85 Giving an interest (registry 40-year rule, principles).............. 87

Two sub-rules working together (registry 40-year rule,

principles) ................................................................................. 89

When interest given (registry 40-year rule, principles) .......... 93 Giving any kind of interest (registry 40-year rule, principles) 94 Preserving possible interest (registry 40-year rule, principles)

................................................................................................... 97 Other laws (registry 40-year rule, principles) ....................... 101

Other interests ending (registry 40-year rule, principles) .... 102 Notice of claim (registry 40-year rule, principles) ................ 103 Retroactivity (registry 40-year rule, principles) .................... 106 Exceptions (registry 40-year rule, principles) ....................... 110 Particular persons unable to benefit from given interest

(registry 40-year rule, principles) .......................................... 113 General ................................................................................ 113

Fraud ................................................................................... 113 Equitable doctrine of actual notice ..................................... 114 Personal claims ................................................................... 115 Rights of way ...................................................................... 115

Reform ......................................................................... 116

Ontario Land Titles Act (reform) .......................................... 116



Practice (reform) .................................................................... 117

Appendix, citations ..................................................... 118

Cases ....................................................................................... 118 Laws ........................................................................................ 119 Writings .................................................................................. 119

Appendix, selected cases ............................................ 120

Durrani v. Augier (2000) ....................................................... 120 Outline of facts and decisions (Durrani v. Augier (2000)) . 120 Reasons (Durrani v. Augier (2000)) ................................... 121

• First basic question: did a mistake cause the Act wrongly to

take away an interest? (Durrani v. Augier (2000)) ............. 121 • Second basic question: will a mistake be rectified? (Durrani

v. Augier (2000)) ................................................................ 122 • Third basic question: after a mistake, will the land titles

system compensate? (Durrani v. Augier (2000)) ................ 123 • Fourth basic question: after a mistake, will anyone, other

than the system, bear the loss? (Durrani v. Augier (2000)) 124

Ramsay (2005) ........................................................................ 124 Facts and decisions (Ramsay (2005)) ................................. 124 Reasons (Ramsay (2005)) ................................................... 125

Syvan (2006) ........................................................................... 126 Facts and decisions (Syvan (2006)) .................................... 126 Reasons (Syvan (2006)) ...................................................... 127

Kendrick (2011) ...................................................................... 128 Facts and decisions (Kendrick (2011)) ............................... 128

Reasons (Kendrick (2011)) ................................................. 129 • Ontario 40-year rule (Kendrick (2011)) .......................... 129

• Ontario Land Titles Act (Kendrick (2011)) ..................... 130

MacIsaac v. Salo (2013)......................................................... 131 Facts and decisions (MacIsaac v. Salo (2013)) ................... 131

Reasons of Ontario Court of Appeal (MacIsaac v. Salo

(2013))................................................................................. 132 • Effect of mistakes (MacIsaac v. Salo (2013)) ................. 132

• First basic question: did a mistake cause the Act wrongly to

take away an interest? (MacIsaac v. Salo (2013)) .............. 134 • Second basic question: will a mistake be rectified?

(MacIsaac v. Salo (2013)) ................................................... 137

• Third basic question: after a mistake, will the land titles

system compensate? (MacIsaac v. Salo (2013)) ................. 137 • Fourth basic question: after a mistake, will anyone, other

than the system, bear the loss? (MacIsaac v. Salo (2013)) . 137

Appendix, government conversion procedures,

general summary ........................................................ 138

Introduction ............................................................................ 138



Search, abstract index ............................................................ 138 Normal search (search, abstract index) ............................... 138 Streamlined search, (1) basic entries (search, abstract index)

............................................................................................. 139 Streamlined search, (2) bringing forward to new land titles

register (search, abstract index) .......................................... 140

Search rules, general ............................................................. 141 Basic search rules ................................................................ 141 10-year and 40-year dates ................................................... 141 Hidden interest .................................................................... 141

Quit claim............................................................................ 141 Correcting transfer .............................................................. 142

Deposit ................................................................................ 142

Search rules, (1) ownership ................................................... 142 3-Deed/10-Year Rule, as set out in government conversion

procedures ........................................................................... 142

3-Deed/10-Year Rule, explained ........................................ 143 Starting point that search needn't go behind ....................... 144

Good starting point ............................................................. 144 Good transfer of ownership ................................................ 145 "Title Deed" ........................................................................ 146

More complex ownership issues ("technical Items") .......... 147

Search rules, (2) interests other than ownership (except

easements) .............................................................................. 148 Documents read and checked under 3-Deed/10-Year Rule 148

Documents not read and checked under 3-Deed/10-Year Rule

............................................................................................. 148

Whether interest, other than ownership, valid under Ontario

40-year rule ......................................................................... 151

Introduction Rights of way have become a lightning rod for fundamental

questions about the Ontario land registration systems. Apart from

ownership, a right of way or other easement is the most common

kind of interest that continues for a long period.

Electronic land registration now applies in virtually all of Ontario.

It required the Ontario government to convert millions of

properties from registry to land titles. This article focusses on how

that conversion affected rights of way.

This article analyzes the land registration laws by starting with

how the land registration law logically should work. Because there

are many issues in the interpretation, this makes it possible to



interpret an Act as a whole, and to test a specific section or case

against a logic.

It's easy to think that a land titles register is a perfect mirror of the

title; that the register wholly draws a curtain over the past; and that

the system fully backs up its guarantees with insurance. It's harder,

under the Ontario Land Titles Act, to understand exactly what

interests the register mirrors (and when or how, and how the

system might rectify the register); how far the register draws a

curtain over the past (or over certain interests); or how well the

system backs up its guarantees with insurance.

Electronic land registration has been a remarkable achievement for

Ontario.3 It has involved great administrative effort and

pragmatism. This article shows that electronic registration has also

shown a great weakness in how Ontario understands and treats its

land registration laws.

Summary 1. Policy. A right of way is an important ancillary right. The law

should make it easy to hold a right of way, but in many ways

the law and practice make that hard. Both the law and practice

for a right of way should be reformed to better serve owners

with rights of way.

2. Land titles. Under the Ontario Land Titles Act, a right of way is

an overriding right that remains valid, even if the register

doesn't show the right of way. The register for the subject-to

land can show that a right of way isn't an overriding right, and

then the Act guarantees that the land is free from the right of

way. (The register for the subject-to land doesn't show that a

right of way isn't an overriding right, where the description of

the property merely excepts the right of way.) Despite the

above, the registers should show a right of way, where it exists,

but the Act doesn't then guarantee the right of way. The main

reason is that the Act guarantees an interest only when its words

specifically give the interest, and the Act contains no words

giving a right of way shown on the register.

So, where the register mistakenly shows an invalid right of way,

the land titles system must usually rectify the register, and

needn't compensate for the value of the right of way. Or, where

3 In 2013, only about 36,000 properties were still in registry (around 0.1%).

These were properties that the Ontario government had been unable to convert

to land titles and they're called "non-converts." They remain outside electronic

land registration.



the register mistakenly omits a valid right of way, the land titles

system must usually rectify the register, and needn't compensate

for the value of the right of way.4 The above is so, whether the

mistake was on a conversion or is on a rectification. And the

title to a right of way that existed before a conversion will

forever depend on the 40-year search of the title before the

conversion.

3. Registry. The Ontario 40-year rule under the Ontario Registry

Act preserves a valid right of way that the 40-year chain of title

shows, even if a formal notice of claim hasn't been registered

for the right. This is so despite an unsuccessful 2006 attempt by

legislation retroactively to reverse Ontario Court of Appeal

decisions. The main reason is that the Ontario 40-year rule

contains two sub-rules that must work together. The chain of

title sub-rule can validate title free from a right of way, and the

registration sub-rule can extinguish a right of way. But the

latter can't extinguish a right of way, unless the former also

frees the title from the right of way.

So, when the government converted a property from registry to

land titles, and the chain of title showed a right of way, the right

of way was usually valid. (As said in 2, Land titles above, the

land titles register should then have shown the right of way, but

there was no risk of the system having to compensate for the

value of the right of way, whether the register omitted a valid

right of way or showed an invalid right of way.)

4. Property rights. Rights of way raise fundamental issues for

property rights in Ontario, and for Ontario's new system of

electronic land registration. Ontario has committed to having a

good land titles system, and has made large investments in it,

rather than following the U.S. example of relying on title

insurance. The Ontario land titles system depends on its

guarantees of property rights. The decisive test for how well

the Ontario Land Titles Act guarantees a property right is how it

deals with a mistake in the register. The 2006 changes to both

the Ontario Registry Act and the Ontario Land Titles Act were

an attack on how well the Ontario Land Titles Act guaranteed a

property right.

How well the Ontario Land Titles Act guarantees a property

right depends on all of four basic questions, which cover what's

4 The land titles system might be unable to rectify the register, and might have to

compensate, if the register for the subject-to land showed that a right of way

wasn't an overriding right. But, as said, that register doesn't do so, where the

description of the property merely excludes a reference to the right of way.



the effect of registration, whether the system rectifies the

register, whether the system compensates and who bears the

loss. The answers to these questions depend on the words and

purpose of the Ontario Land Titles Act. Ontario needs a deeper

understanding of its land registration laws and of good modern

land titles legal policy. Ontario might then generally update and

reform its Land Titles Act, but this article suggests some sooner

legal and practical reforms for rights of way.5 Ontario shouldn't

make any changes without full prior expert study and full prior

public consultation.6

5. Land Registry Ontario. Land Registry Ontario takes mistaken

legal positions that conflict with this article and this has led the

system unjustly to deny many rights of way.

Citations This article uses short names for some legislation and cases. An

appendix gives the citations.

Policy In this large country of Canada, travel is vital and much travel

must be over informal routes. In Ontario, notable examples are

accesses to properties around Ontario's many lakes.

Because a right of way can be vital for an owner, land registration

laws should lean towards being flexible, that is, making it easier to

have a right of way. Yet laws on rights of way are often unduly

rigid, making it harder to have a right of way.

If a land registration law leans towards being flexible for a right of

way, that needn't make it unreasonably hard for a skilled and

careful searcher, using common sense, to find the right of way.

The searcher will know that land should have access (usually along

with other services, for example, for sewage, water, electricity,

telephone or cable TV). Documents, including an offer or a plan,

may show an access, or a need for one. The searcher will then

naturally proceed to investigate the right of way, bearing in mind

that an express grant, an implied grant or prescription could have

created a right of way.

This article contains many examples of how Ontario land

registration laws for rights of way may be flexible or rigid, or may

have been so administered. In particular, the Ontario land titles

5 See Reform at the end of this article. 6 The 2006 changes show in many ways extreme dangers in amending the laws

without these.



system flexibly doesn't require a right of way to be registered.7

But, although it does allow a right of way to be registered, it

rigidly can't then directly guarantee the right of way.8 In contrast,

the Ontario Registry Act requires an instrument creating a right of

way to be registered.

Apart from the examples in this article, other examples in Ontario

of how land registration laws may be flexible or rigid for rights of

way are as follows:

• A right of way can come into existence (a) through a specific

grant, or (b) flexibly through an implied grant, or (c) somewhat

flexibly through long use (that is, prescription).

As to (a) (a specific grant), when a transfer severs land, it may

create a right of way by giving a specific easement over the land

retained, or by reserving a specific easement for the benefit of

that land. Or an owner may grant only a right of way. A

specific grant is common and land registration laws are often

rigid for a specific grant of a right of way. If a court will give

specific performance of an agreement to give an easement,

equity flexibly gives an equitable easement.

As to (b) (an implied grant), when a transfer severs land, it may

flexibly create an implied easement for a reasonable or existing

use (for example, for an existing road over the land retained) or

because the easement was necessary (for example, for access to

the land retained).9 The law more readily implies an easement

in favour of the transferee than the transferor.

As to (c) (long use or prescription), the laws in the registry

system are somewhat demanding and technical,10 and the land

7 See Section 44(1) ¶2 (land titles, rights of way). The English Land

Registration Act 2002, section 11(4)(b) and Schedule 1, paragraph 3 does the

same thing. But the Canadian Model Land Recording and Registration Act

(1993) doesn't say that an easement is an overriding right (section 6.1). The

Ontario Land Titles Act does allow the register to show that a right of way isn't

an overriding right, for example, in sections 44(1), 45 ¶2 and 87, under the

words, "unless the contrary is expressed on the register." 8 Compare the Canadian Model Land Recording and Registration Act (1993),

section 5.1(1)(d). 9 For example, under section 15 of the Ontario Conveyancing and Law of

Property Act, on a transfer of land, that Act includes all "ways ... with such

land ... enjoyed or taken or known as part or parcel thereof." 10 The common law recognizes that a person can acquire an easement that has

been used in a certain way for 20 years, based on a legal fiction that there must

then have been a grant that's been lost. The Ontario Real Property Limitations

Act relaxes some of the common law requirements, where the easement has been

used for 20 or 40 years before an action. The easement is said to be acquired by

prescription.



titles system wholly and rigidly prevents prescription.11 For

example, if an old grant of an easement was defective, or the

use of an easement didn't follow its boundaries, it could be just

to allow long use to create or move the right of way.

• Ontario's land registration laws seem rigidly to impose the same

requirements for descriptions of land affected by rights of way

as for ownership. It may not be practical to survey an informal

access (for example, for a lakeside property, as the road avoids

trees and rocks) and for which the route may vary over time (for

example, as a road is re-graded). Here, strict survey

requirements can simply be unrealistic (and one often sees

surveys showing narrow straight-lined routes that cannot be

true).12 The Ontario Land Titles Act flexibly recognizes this by

not guaranteeing boundaries,13 but still seems to impose rigid

requirements for descriptions.

• A right of way usually continues forever, that is, it's usually in

perpetuity. It can end if it's abandoned, but it rigidly can't,

without agreement, be enlarged, changed or removed to reflect

changed circumstances or needs.

• In Ontario, a grant is often of a simple right of way, with no

flexible terms as to who may use it or how it may be used. This

may raise rigid common law issues over whether a use is

excessive.

• The subdivision control provisions of the Ontario Planning Act

seem rigidly to apply to a grant of a right of way in the same

way as for a transfer of ownership, even though a right of way

doesn't in reality subdivide land.

11 Ontario Land Titles Act, section 51. 12 If a proposed route is surveyed before the road is laid out on the ground, the

actual route may govern (see Nicholson v. Halliday, 2005 CanLII 259 (ON

C.A.)). Perhaps land registration laws should allow the description to be in a

sketch. (For some easements, Bulletin 2007-02 sensibly allows an easement to

be registered if the description "contains sufficient information to enable the

registration to be recorded against the proper parcel.") In practice, a together-

with owner must often have simply to live with an untrue description. Perhaps a

description might allow a right of way to be over a wider area, and the right of

way might let the holder choose the travelled route from time to time, but limit

the chosen route to a maximum width, and let the subject-to owner, from time to

time and at that owner's expense, change the route. In Adili v Donn, 2012

ONSC 4086 (CanLII), a municipality seems to have wanted four lots to share a

common entrance and to preserve existing trees around a common driveway, but

a strange reference plan and defective transfers had failed to reflect these

purposes and had led to serious misunderstandings. 13 Section 140(2); MacIsaac v. Salo (2013).



• The Ontario Road Access Act flexibly prevents some kinds of

interference with the use of some access roads, but rigidly

without giving a right of way.

• Under section 14 of the Ontario Perpetuities Act, it seems that

term allowing the route of a right of way to be changed could be

valid only for 40 years after the parties agreed to the term.

General background Ontario has two systems of land registration, the registry system

(under the Ontario Registry Act) and the land titles system (under

the Ontario Land Titles Act). For electronic land registration, the

Ontario government converted millions of properties from registry

to land titles.14 Land is moved from registry to land titles by a land

titles process called "first registration," and a conversion is a first

registration. The conversion required searches in registry, and the

Ontario 40-year rule in the Ontario Registry Act would normally

have governed those searches. However, in 1971, the Ontario Law

Reform Commission had sensibly proposed that Ontario use a

streamlined process to convert registry properties to land titles, and

assume a risk over compensation.15

In 1981, Ontario changed the Ontario 40-year rule. One effect of

this was to reduce Ontario's risk over compensation. The changes

led in the early 1990s to a number of cases in the higher courts,

and those led to conflicting interpretations. On one side were the

reasons in the decisions of the higher courts, which largely settled

the principles in 1995, and which protected existing property

rights.16 On the other side were the hopes of the Ontario

government and of some lawyers, which settled into the mistaken

1996 Consensus Position in 1996, and which could make title

searches easier.

Section 45 of the Ontario Land Titles Act gave the director of titles

a wide power to make orders governing conversions, to allow the

streamlined process for a government conversion. In 1998, the

only order said simply that the process was in a document entitled

Implementation Procedures -Title and its amendments, from time

14 Electronic land registration is governed mainly by the Ontario Land

Registration Reform Act. 15 Ontario Law Reform Commission, Report on Land Registration, 1971, pages

67 and 76, http://www.archive.org/details/reportonlandregi00onta. 16 The 1995 Article analyzed the court decisions. It covered the Ontario Court of

Appeal decision in Fire v. Longtin (1995). Although that case later went to the

Supreme Court of Canada, that court simply adopted in their entirety the reasons

of the Ontario Court of Appeal, with which the article had dealt.

http://www.archive.org/details/reportonlandregi00onta



to time.17 For rights of way, the government appears to have

settled current part of the government conversion procedures in

1993.

The conversions must have started by the mid-1990s. In 2005 and

after most of the conversions, the Ontario Court of Appeal in

Ramsay (2005) confirmed the higher courts' former reasons on the

1981 changes. The decision seemed to show that some

conversions could mistakenly have taken away a valid easement,

and so exposed the system to a serious risk of having to

compensate for the mistake.

In 2006, the Ontario government amended the Ontario Registry Act

to try to reverse Ramsay (2005). Land Registry Ontario then

issued its Bulletin 2007-02, based on its view that the 2006

changes had wholly reversed Ramsay (2005).

This article starts by covering the Ontario Land Titles Act. This

article then covers the conversions from registry to land titles for

electronic registration. This article covers the Ontario Land Titles

Act and the conversions in more detail, because no writing has yet

fully covered them. This article then covers the Ontario 40-year

rule in the Ontario Registry Act. In a conversion from registry to

land titles for electronic registration, the rule governed the title to

land immediately before the conversion. This article covers the

Ontario 40-year rule in less detail, because previous articles have

covered it.18 This article then comments on possible reforms for

rights of way, and analyzes selected cases.

Land titles, principles

Background (land titles, principles)

Ontario first enacted the Land Titles Act in 1885. The Ontario

Land Titles Act is essentially the same as the English Land

Transfer Acts 1875 and 1897, and some of the rules under them.

However, its compensation provisions come mainly from the

Transfer of Land Act 1866 of the Australian state of Victoria. The

English Acts contained well-worded, but compressed, provisions.

England reformed its land titles laws greatly over time, starting

with major reforms in 1925, but Ontario didn't adopt those

reforms. So, for the Act's English origins, Ontario must refer

mainly to two good English cases in the early 1900s and to texts

17 Order of the Director of Land Registration, Subsection 32(4) of the Land

Titles Act, dated December 18, 1998, No. DLRO-98-01. 18 See especially the 1995 Article.



written before 1925.19 This has cut Ontario off from learning and

improvements in its English parent Acts. The English Acts differ

from the Australian Torrens land titles laws adopted mainly in the

western provinces of Canada.20 This has isolated Ontario from

learning and improvements in Torrens land titles Acts. The

Ontario Land Titles Act has become unique and insulated from

progress in other jurisdictions.

England doesn't have a general registry system like that in the

Ontario Registry Act, and its land titles Acts don't generally control

the priorities in the way that the Ontario Registry Act does. This

led to the original Ontario Land Titles Act not carrying forward the

priority principles of the Ontario Registry Act. Ontario later added

general priority rules to the Ontario Land Titles Act, but they were

different from those in the Ontario Registry Act and weren't well-

drafted. When Ontario enacted the Ontario 40-year rule in 1929,

Ontario didn't try to put a similar rule in the Ontario Land Titles

Act, which could over time validate an interest that the land titles

system didn't guarantee. So, as this article concludes that the Act

doesn't guarantee a right of way, the title to a right of way that

existed on a conversion could forever depend on a search 40 years

back from the date of the conversion.

Ontario has, for about 130 years, made many of its own changes to

the Ontario Land Titles Act and these changes are often not well-

worded or consistent with the scheme of the Act. So, although the

Ontario Land Titles Act remains basically good, it needs to be

revised and updated.21 For example, the Act should probably be

updated to allow the Act to guarantee a right of way.

Ontario recently moved to a system of electronic land registration,

and it now applies to virtually all land in Ontario. It relies on an

electronic database of land title information and works best where

the data in the system is correct, complete and current. So it works

best in a land titles system and, for this purpose, Ontario converted

19 Capital and Counties Bank, Limited v. Rhodes (1903) and Attorney General v.

Odell (1906) and, in particular, The Land Transfer Acts, 1875 and 1897 by

Brickdale and Sheldon. 20 For some differences, see Theodore B. F Ruoff, An Englishman Looks at the

Torrens System, The Law Book Co. of Australia Pty. Ltd., 1957. 21 This is so despite a conclusion by one writer that the Act is "an unfortunate

hotch-potch of ill-matching sections drawn from widely different sources." (See

Marcia Neave, Indefeasibility of Title in the Canadian Context,

http://www.jstor.org/discover/10.2307/825436?uid=3737720&uid=2&uid=4&si

d=21101569601361. Good modern examples of land titles laws are the English

Land Registration Act 2002 and the 1993 Canadian Model Land Recording and

Registration Act. Each has different good features.

http://www.jstor.org/discover/10.2307/825436?uid=3737720&uid=2&uid=4&sid=21101569601361

http://www.jstor.org/discover/10.2307/825436?uid=3737720&uid=2&uid=4&sid=21101569601361



millions of properties from registry to land titles. The recent move

from mixed registry and land titles systems, in which a registry

mindset dominated, to an almost exclusively land titles system, has

brought a sea change in Ontario land registration law.

For electronic land registration, Ontario didn't materially reform

the Ontario Land Titles Act, and so Ontario has built its modern

electronic land registration system on an old foundation. As this

article concludes that the Act doesn't guarantee a right of way, the

title to a right of way that existed on a conversion could depend on

historical information. In this and other ways, some data in the

electronic database won't be complete or current, and this reduces

the benefits of the electronic system.

For the above reasons, Ontario hasn't developed a deep

understanding of the Ontario Land Titles Act or of good modern

land titles policy. Ontario has also run its systems very well, and

so legal issues had rarely arisen in the past. But recent events,

cases and legislation have shown that Ontario urgently needs a

deeper understanding, in order to deal with land titles issues raised

by electronic registration and other changes, such as increasing

frauds.

Purposes (land titles, principles)

The main purpose of the Ontario Land Titles Act is to simplify

dealings with land, and it does so mainly in the following ways.

(1) It guarantees the key interests in land and shows other interests

to which those key interests may be subject. (2) It avoids a need

for long searches, especially into the history of the guaranteed

interests. (3) It backs up its guarantees with compensation for any

mistakes. These give rise to the "mirror," "curtain" and

"insurance" principles, but calling them "principles," rather than

mere purposes, is misleading.

In the same way, the Ontario Land Titles Act reflects a doctrine of

"deferred indefeasibility" (rather than "immediate indefeasibility").

Again, saying this can be misleading.

Although the interpretation of the Ontario Land Titles Act must be

guided by its purposes, it must always be founded on the words of

the Act.22

22 In the best decisions on the Ontario Land Titles Act and its predecessors, the

English Land Transfer Acts 1875 and 1897, the courts sought to understand the

scheme of the Acts, by referring to the key sections. The decision of the

Supreme Court of Canada in United Trust v. Dominion Stores (1976) was such a

decision.



Interpretation (land titles, principles)

A land titles register tries in various ways to show the title to the

property, but the legislation determines the effect of the register.

The legislation is like a dictionary explaining the meaning of the

entries in the register, and it may even show a need to look at

evidence outside the register.23 So it's critical, not only to look at

the register, but also to understand the legislation.

A land titles system is based on legislation and its interpretation

must always be founded on the words and purpose of the

legislation. However, it doesn't wholly supersede other laws, and

works with them. The legislation is often abstract and complex.

For the reasons given under Background, it's especially hard to

find or interpret the words in the Ontario Land Titles Act, and

Ontario cases and writings often fail to do so.

A land titles system essentially guarantees some key interests in

land, and the guarantees are essentially good only as far as land

titles compensation backs them up. So a land titles system depends

on the government to honour the guarantee of compensation, and it

requires owners to put great trust in the government.24 As this

article shows, the guarantees depend on four factors, the effect of a

mistaken entry, the power to rectify the register, the right to be

compensated, and how the burden of that compensation might fall

on a person other than the system. This applies to rights of way

and so they raise fundamental issues for property rights in Ontario,

and for Ontario's new electronic land registration system.

The Ontario Land Titles Act, at certain times, guarantees some key

interests in land. When the Act gives an interest in land, the giving

of the interest becomes an event on which the title to an interest

can depend. So, although the land titles register seems to show the

current state of title, in fact it shows the title as it was when a past

entry was made, or as it may be after a future entry is completed.

In this and other ways, the land titles system depends on events,

many of which are past events.

Where the Ontario Land Titles Act doesn't give an interest to a

person, the Act must logically fall back onto other events and other

laws (including the common law, as modified by statute) to

23 The Ontario Land Titles Act, like most land registration laws, encourages a

person to register an interest, by showing how failing to register affects the

interest. Under a land titles system, failing to register (or to have registered in

registry before first registration) could affect the interest or its priority;

rectification; compensation; or liability. 24 The U.S. seems to mistrust government-run land registration systems. Ontario

needs to be more astute about dangers of trusting the government.



determine whether the person's interest is valid. The fallback also

applies to an overriding right. Since this article concludes that the

Act doesn't guarantee a right of way, and since a right of way is

usually an overriding right, the fallback will often apply to a right

of way.

Giving key interests (land titles, principles)

Ideally, land titles legislation would, at all times, guarantee every

interest in a property.

The Ontario Land Titles Act guarantees an interest in land only

when an entry is made in the register.25 Whether a person has title

to an interest in land depends on the history of the title, that is, on

past events, and can logically only do so. Even when the Act

guarantees an interest in land, free from another interest, the

guarantee becomes an event on which the title to the interest can

depend.

Also, when an entry is made in the register, the Ontario Land Titles

Act only (and subject to exceptions) guarantees a key interest, of

some kinds, of a person, free from an interest, of some kinds, of

another person.26 It gives the guarantee by actually giving the key

interest, so that a person will so have the key interest, even if the

person wouldn't otherwise have done so.27 As said, the Act must

back up this guarantee with compensation for a mistake. Without a

good right to compensation from the system, a person couldn't rely

fully on the land titles system.28

25 For example, section 45 operates only on "first registration" and sections 87

and 93 only when a transfer or charge is "registered." 26 The Act treats a person to whom it could have given an interest as a

"registered owner," and that person can make a "registered disposition," even if

the Act hadn't given the interest to that person. 27 For example, on first registration, section 45 "vests" an estate in fee simple in

the first registered owner; section 87 "confers" an estate in fee simple on a

transferee; and section 93 "confers" a charge on a chargee. The sections say that

the first registration, registered transfer or registered charge does these things,

but in fact the Act does so. 28 Compensation is said to reflect the "insurance" principle of land titles

legislation. One effect is that compensation, like insurance, rightly spreads a

loss suffered by few, through the inevitable risk of a mistake, among many.

Compensation also allows the system to run efficiently, by allowing it to avoid

higher costs in trying to avoid mistakes, while keeping the system honest.

However, compensation essentially backs up the guarantee of title. In this light,

some debates in Ontario about whether compensation is "insurance,"

"assurance" or something else are largely irrelevant.



The key interests that the Ontario Land Titles Act can give are

mainly the fee simple and a charge on the fee simple.29 They can

include some more permanent leases and charges on them,30 but

don't include other leases. This article concludes that the Act

doesn't guarantee a right of way.31 The Act doesn't guarantee the

boundaries of land.32

Under land titles legislation, giving an interest in land, and taking

away an interest in land, are two sides of a coin. When the

legislation gives an interest to one person, it can in effect take an

interest away from another person. When the legislation takes

away an interest, it can in effect give an interest to another person.

So, for example, if the legislation took away an easement, it could

free the subject-to land from the easement, and in effect give an

interest to the formerly subject-to owner.

In giving an interest, the legislation may favour a person when the

person takes an interest, and so may seem to promote commerce.

But, if the legislation were later mistakenly to give the interest to

another person, the legislation would inevitably hurt commerce, by

making the title of the first favoured person less secure.33

Where land titles legislation gives a key interest in land, it must

show that it gives the interest. The legislation may show this in

different ways. Modern legislation lists the kinds of key interest

that it gives, and shows generally that, when the entry in the

register is made, the legislation gives the listed interest to the

person so entered.34 Where the legislation does these things

generally, it usually shows that the system's merely making the

29 But, on first registration, under section 53, the Ontario Land Titles Act doesn't

guarantee an existing mortgage (or convert it into a land titles charge). 30 See, for example, section 48. 31 Mainly under section 39 (discussed below). 32 Section 140(2); MacIsaac v. Salo (2013). 33 Lawyers usually bear the greatest risk of being liable when they act for a

person taking an interest, such as a buyer or mortgage lender. So lawyers

support legislation that favours that person, giving as a rationale that it promotes

commerce. In a government conversion, Ontario bore this greater risk in the

search for the conversion, and uses the same rationale. In doing so, lawyers and

Ontario ignore the fact that the legislation inevitably creates a risk for commerce

either way. Commerce demands that the law balance a person's expectation,

when the person that takes an interest, against the person's expectation

afterwards to be secure in that interest. 34 For example, the English Land Registration Act 2002, sections 3 and 58.

Also, for example, the Canadian Model Land Recording and Registration Act

(1993), sections 5.1 and 5.3 (but section 5.3 illogically says that the holder is the

owner "so long as a registration remains uncancelled").



entry (mere "registration") gives the interest, and the legislation

then gives what's said to be "immediate indefeasibility."

The Ontario Land Titles Act doesn't show generally that, when an

entry in the register is made, the Act gives a key interest to a

person.35 Instead, it looks only at some specific kinds of entry in

the register, and shows that the Act then gives the key interest. It

often shows that the Act does so only if a condition is met (other

than the system's merely making the entry). Where such a

condition must be met, the legislation gives "deferred

indefeasibility," because a later entry can still give an interest.

Under the Ontario Land Titles Act, a condition may be that the

entry must be of a "transfer" or "charge," which doesn't include a

document that's void (like a forgery, which is a nullity).36 Deferred

indefeasibility moves the risk of a condition not being met from

the system to the new registered owner (even where that owner

couldn't reasonably have detected the defect).

Under the Ontario Land Titles Act, an entry may lead to a delayed

result in a similar way to deferred indefeasibility above. This can

happen where an amendment changes the registered owner,37 or

removes an entry for an encumbrance.38 The Act doesn't

immediately give or take away an interest, but can give or take

away the interest only when it later gives an interest, free from the

interest.39

Therefore, under the Ontario Land Titles Act, there are no general

words giving a key interest, and we must always look for specific

words showing that the kind of entry gives the key interest, and we

must look at any conditions. This is one starting point for this

article's conclusion that the Ontario Land Titles Act doesn't

guarantee a right of way. Since this article concludes that the Act

can't guarantee a right of way, a right of way doesn't raise issues of

35 Section 78(4) seems to show that, when any instrument is registered, the Act

guarantees the interest shown in the instrument. In the context, it must mean

that, when the process of registering an instrument is complete, the Act has only

done what it would normally have done for that kind of instrument. Lawrence v.

Maple Trust Company (2007) confirmed the above, by deciding that the section

didn't do away with deferred indefeasibility, because section 78(4) only made a

minor administrative change, aimed at facilitating registration procedures, rather

than changing substantive law. 36 See, for example, sections 87 and 93(3). 37 Sections 75 and 120 to 127 38 Sections 102 to 104. 39 For sections 102 to 104, despite the word, "ceases," which must mean "ceases

to be registered."



immediate or deferred indefeasibility, or of a delayed result similar

to deferred indefeasibility.

The Ontario Land Titles Act allows first registration of land in the

system to be with an absolute, qualified or possessory title.40 The

last two make it easier to bring land into the system, but the

Ontario system never in practice uses a possessory title for that

purpose.41 This article focusses on the government's conversions

of properties from registry to land titles, and those conversions

were first registrations with a qualified title.

Where the register shows another interest, to which the key interest

may be subject, but the Ontario Land Titles Act doesn't give that

interest, the Act may indirectly (and only partly) validate the other

interest. This happens when the Act has given an interest to a

person (for example, the fee simple), and that person afterwards

gives the other interest (for example, a right of way). The Act

doesn't directly give the other interest (in the example, the right of

way, as this article concludes), when the entry for the other interest

is made. But a person can rely on the Act having previously given

the interest (in the example, the fee simple), out of which the other

interest (in the example, the right of way) was given. This is also a

case where the giving of an interest (in the example, the fee

simple) was an event on which the title to another interest (in the

example, the right of way) can later depend.

Preserving possible interests (land titles, principles)

Where the Ontario Land Titles Act gives a key interest in land, the

system must (subject to exceptions), or (for an exception) may,

show the other interests to which the key interest may be subject.42

40 For example, under sections 36, 37, 45 ¶46 and 47. 41 Section 36(1) misleadingly suggests that a possessory title is one based on

adverse possession. In England, a person buying a property after first

registration becomes compulsory in an area often avoids a full application by

merely registering the transfer, and possessory title preserves any interest before

the transfer. After that, over time, it could become unnecessary to search the

title for ownership before the transfer under England's 60-year rule (now

reduced to 15 years), because the land titles register would contain the history

for the period. Since the Ontario 40-year rule ceases to apply after conversion,

Ontario probably couldn't use a possessory title in this way to make it easier to

bring land into the land titles system (or to overcome the problem of "non-

converts"). 42 For example, sections 45 (first registration), 87 (transfer) and 93 (charge) give

the interest free from all other interests, "subject to" (among others)

encumbrances entered on the register. First registration is also expressly subject

to a valid interest by which the first registered owner was personally affected



Where the Act doesn't guarantee the other interest, it merely shows

that, if the other interest is valid, the key interest is subject to it.43

Showing the other interest can "protect" the interest from being

taken away when the Act next gives the key interest.44 The Act

usually tries to show that the Act doesn't guarantee an interest by

requiring the entry to be only a "notice" of the other interest.45

Where the Act doesn't guarantee the other interest, a person must

fall back onto other events and other laws to determine whether the

other interest is valid (see Interpretation).

Therefore, where the Ontario Land Titles Act allows an interest to

be entered through a "notice," it doesn't guarantee the interest.

This is another starting point for this article's conclusion that the

Ontario Land Titles Act doesn't guarantee a right of way. This

article shows that the register may show a right of way, but that the

entry has effect only as a notice, so that the subject-to land is

subject to the right of way only if the right of way is valid.

Overriding rights (land titles, principles)

Exceptions to the Ontario Land Titles Act try to preserve an

interest of a person as a possible interest, where other reasonably

available evidence should show the interest as a possible interest.

The Act sets most of these out in a list of "liabilities, rights and

interests" (usually called "overriding rights") to which an interest,

which the Act can give, will be subject, unless the register

expresses the contrary (so that the register can only show that a

property isn't subject to an overriding right).46 The Act preserves

an overriding right only as far as it's valid.47

The overriding rights under the Ontario Land Titles Act include

every easement, for example, a right of way.48 As this article

concludes, the Act also allows an easement to be entered as a

notice, perhaps unwisely without then guaranteeing the easement

(except, as said, where it does so indirectly).49 On the other hand,

the Ontario Land Titles Act, perhaps unwisely, doesn't protect,

immediately before first registration (section 45 ¶3), but a later registered

transfer or charge is not expressly subject to such an interest. 43 In light of the comments under Giving key interests, the words, "subject to,"

can't themselves show that the Act guarantees that the encumbrance is valid. 44 Section 71. 45 Section 71. 46 For all the overriding rights, see section 44. See also, for example, sections 45

¶2, 87(b) and 93(3). The register can show that the land isn't subject to an

overriding right, but (as shown below) this doesn't make title a qualified title. 47 Under section 44(1), only as far as it "for the time being may be subsisting." 48 Section 44(1)2. 49 Mainly under section 39 (discussed below).



against a registered owner and as an overriding right, a right that

would otherwise have been acquired after first registration through

adverse possession or, for a right of way, through adverse use (that

is, prescription).50

Priority (land titles, principles)

Land registration legislation, like the Ontario Registry Act, mainly

gives an interest of one person priority over an interest of another

person. Land titles legislation, like the Ontario Land Titles Act, not

only guarantees some interests, but usually also gives priority.

Where the legislation guarantees both interests, it naturally governs

their priority between themselves (for example, when the Ontario

Land Titles Act gives a second charge, it naturally does so subject

to the first charge).

As between interests that the Ontario Land Titles Act doesn't

guarantee, the Act originally didn't govern priority. Ontario later

added to the Act provisions that regulated priorities between

interests that the Act didn't give, but some of the provisions are

hard to interpret.51 This article doesn't deal with priority for a right

of way.52

Particular person being unable to benefit from given interest (land titles, principles)

Under the Ontario Land Titles Act, a particular person may be

unable to benefit from an interest that the Act gives, because of a

factor that applies only to that particular person. Examples are

where the particular person acted dishonestly (that is, in bad faith

or fraudulently),53 where the equitable doctrine of actual notice

50 Section 51. 51 See also sections 71(2), 72, 77, 78(2), 93(4), 111(5) and (7), 119(5) and

136(3). Some of these sections assume that, if a land registration law says that

an entry in the register is "notice," it means that the entry gives priority. Key

provisions are sections 78(4), (5) and (6). As to section 78(4), see an earlier

footnote. Where the Act wouldn't have given the interest, sections 78(5) and (6)

show that it gives priority. These sections seem to deal only with priorities

between registered instruments, rather than properly giving priority for an

interest, when it's registered, over one that's then unregistered. The decisions of

the courts in United Trust v. Dominion Stores (1976) show the problems in

interpreting these sections. Contrast section 4.5 of the Canadian Model Land

Recording and Registration Act (1993). 52 For the reasons in Section 44(1) ¶2 (land titles, rights of way). 53 Sections 59(1)(d) and 155 to 157 may only be related cases or examples of

this.



applies to the particular person,54 or where the particular person is

subject to a personal claim.55 Despite that, the Act gives an

interest, even if a particular person was unable to benefit from the

interest.56 This is logical, because a successor to the particular

person may rely on the Act having given the interest, but will have

no reliable way to verify whether the particular person was able to

benefit from the given interest.57

54 United Trust v. Dominion Stores (1976). A charge isn't an exception, despite

Holborn Property Investments Inc. v. Romspen Investment Corp. [2008] O.J.

No. 5722 and Romspen Investment Corporation v. Woods Property

Development Inc., 2011 ONSC 3648 (CanLII). Comparing the short-cut

Ontario-drafted words of section 93(3) with the precise English-drafted words of

sections 45 and 87 shows that the former couldn't exclude the cardinal principle

of property law in United Trust v. Dominion Stores (1976). 55 Examples would be equitable rights to rectification or subrogation, a trust or

an agreement to resell. Re Skill and Thompson (1908), 17 O.L.R. 186, reflects

this, where the court said that that it was not one of the purposes of the Act "to

protect a registered owner against his own obligations." See also the English

Law Commission Report, Land Registration for the Twenty-First Century, a

Consultative Document, 1998, paragraphs 3.39 to 3.50, especially footnote 154

(http://lawcommission.justice.gov.uk/docs/lc254_land_registration_for_21st_ce

ntury_consultative.pdf). 56 United Trust v. Dominion Stores (1976). The words of the Act make this

perfectly clear. For a transfer, section 87 says: "A transfer for valuable

consideration of land registered with an absolute title, when registered, confers

on the transferee an estate in fee simple in the land transferred, together with all

rights..." The section says nothing about "bona fide" or "without notice." The

learned analysis of Laskin C.J., the dissenting judge, confirms this: "To import

actual notice in a title registration system without its express preservation is to

change the basic character of the system." The reasons of the majority then go

on to add that the equitable doctrine of actual notice still applies: "a cardinal

principle of property law cannot be considered to have been abrogated unless the

legislative enactment is in the clearest and most unequivocal of terms."

However, the reasons of the majority first accepted the dissenting reasons,

"actual notice, no matter how clearly proved so long as encumbrances do not

appear on the register, does not affect the clear title of the purchaser for value. I

am ready to agree that this is a prime principle." Later decisions of Ontario

courts misleadingly collapse the above, by saying that the Act can only give an

interest to "a bona fide purchaser without notice" (for example, in 719083

Ontario Limited v. 2174112 Ontario Inc., 2013 ONCA 11 (CanLII), which, like

other cases, followed Durrani v. Augier (2000). These cases don't say what

"bona fide" means, or even say that "without notice" means "without actual

notice." (The Act doesn't exclude the equitable doctrine of actual notice where

there's been no entry at all for the other interest. In other cases, the doctrine

could interfere with how the Act dealt with a mistake, through rectification,

compensation and allocation of loss, and there the Act might show that it was

intended to govern despite the doctrine.) 57 Also, the Ontario Land Titles Act gives an interest, even if a person didn't

actually rely on the register.

http://lawcommission.justice.gov.uk/docs/lc254_land_registration_for_21st_century_consultative.pdf

http://lawcommission.justice.gov.uk/docs/lc254_land_registration_for_21st_century_consultative.pdf



Of course, when the Ontario Land Titles Act later guarantees an

interest of a successor, the Act can protect that successor. But the

above reasoning could protect a successor, to whom the law hadn't

given an interest (like a tenant) and who'd relied on the original

guarantee.

In these cases, while the particular person is unable to take the

benefit of the interest, another person, who's so protected, has a

right to consequential relief to protect that other person against

future successors of the particular person. This may lead to the

register being rectified against the particular person or to the

particular person being unable to take the benefit of any land titles

compensation for the interest. The relief should show that the

particular person is unable to take the benefit of the interest (and

not merely be a later routine entry that might not show this, for

example, by merely registering what would appear to be an

ineffective notice).

However, since this article concludes that the Act can't give, and

doesn't take away, a right of way, a right of way doesn't raise the

above issues (especially under the equitable doctrine of actual

notice).

Mistakes (land titles, principles)

Four basic questions (land titles, principles, mistakes)

A land titles register contains a mistaken entry, if an interest under

the law, apart from the Ontario Land Titles Act, differs from what

the register shows.58 This triggers the four basic questions below.

The answer to the first question will show whether the mistake

caused the Act to take away an interest under the law, apart from

the Act. The Act may do so when the land first goes into the land

titles system or later. If later, the mistake may take away an

interest that the Act itself had given.

Where the Act takes away an interest under the law, apart from the

Act, the system may sometimes correct the mistake (that is, rectify

the register). The system should usually compensate for the

mistake. But the loss may in the end fall on a person other than the

system. How well land titles legislation guarantees an interest

depends on how it deals with a mistake in these ways. The effect

of a mistake is a decisive test for the Ontario Land Titles Act.

58 As to this, see the comments below on MacIsaac v. Salo (2013).



So an analysis of the effect of the Ontario Land Titles Act, in

dealing with the whole effect of a mistaken entry, raises the

following four basic questions. (1) Effect of register: did a mistake

cause the Act wrongly to take away an interest? (2) Rectification:

will a mistake be rectified? (3) Compensation: after a mistake, will

the land titles system compensate? (4) Burden of loss: where the

land titles system must compensate for loss of the value of an

interest caused by a mistake, will a person, other than the land

titles system, bear the burden of that compensation? The questions

must be answered correctly in order, because an incorrect answer

to one (especially the first) may lead to a wrong result.

Every entry after a mistake can raise the four basic questions. So,

as shown below, even an entry that rectifies a mistake can raise the

same four basic questions.

As this article shows for the government conversion procedures, if

a first registration with a qualified title on a government

conversion led to a mistaken entry in the register, those procedures

couldn't in any way affect the results of the mistake under the

principles below.

(1) Effect of register (land titles, principles, mistakes)

As said, the analysis of the whole effect of the Ontario Land Titles

Act must answer the first basic question: (1) Effect of register: did

a mistake cause the Act wrongly to take away an interest?

The principles above show where an entry in the register can cause

the Ontario Land Titles Act to take away an interest.

This article concludes that the Act can't give a right of way, and

that the register doesn't take away a right of way where the

description of the property excludes a reference to the right of way.

So a mistake can't, in those ways, cause the Act wrongly to take

away a right of way from the owner of the together-with land, or

free the owner of the subject-to land from a right of way.

(2) Rectification (land titles, principles, mistakes)


Act must answer the question: (2) Rectification: will a mistake be

rectified? There are two kinds of rectification, first where the

mistake hasn't taken away an interest, and second where it has.

When a land titles register contains a mistake, the mistake may not

take away an interest. Here, the land titles legislation should



always require the mistake to be rectified, and the Ontario Land

Titles Act does so.59

When a land titles register contains a mistake, the mistake may

take away an interest. Here, land titles legislation differs on how

far it later rectifies the mistake. In doing so, land titles legislation

reflects, in different ways, a balance between the sanctity of the

guarantee of an interest, and a need to deal with the problem in a

just way. In contrast to a Torrens system, the Ontario Land Titles

Act tends to deal with the problem in a just way, by later rectifying

the register more freely, particularly for the benefit of a person

who was in possession.60 As shown below, when a mistake takes

away an interest, the system should normally compensate some

person. So, whether the system rectifies the register should only

59 Sections 158(2), 159 and 160. Sections 159 and 160 apply to a mistake only

if the mistake didn't lead to the Act giving or taking away an interest, because of

the words, "Subject to any estates or rights acquired by registration under this

Act." See Attorney General v. Odell (1906) and MacIsaac v. Salo (2013).

Although sections 159 and 160 say that the court may order the register to be

rectified, the court must so order. The word, "may," must mean that the court

has the power to do so, and can't logically mean that the sections give the court a

discretion whether to ignore an existing right (the decision of the Ontario Court

of Appeal in MacIsaac v. Salo (2013) was mistaken on this point). The overall

structure of the Act shows that section 158(2) has the same effect, except for the

"covenant or condition" referred to in section 158(3). See W. Marsh Magwood,

The Ontario Land Titles Act (Carswell, 1954): "The effect of this Section is to

provide a simple and inexpensive means whereby obvious errors can readily be

rectified." Sections 158(2) and (3) were first enacted very soon after the original

1885 Ontario Land Titles Act was enacted, and before the predecessor to section

57(13) was first enacted in 1907. Section 160 seems to assume that someone

other than a court (a land registrar or the director of titles) can rectify under

sections 159 and 160, because the court acts if "a person is aggrieved,"

presumably because no one else had already rectified the mistake. 60 Sections 57(13) and 158(3). Ontario enacted the first version of section

57(13) in 1907, and it was almost the same as section 7(2) of the English Land

Transfer Act 1897. For its meaning, see Attorney General v. Odell (1906). For

various reasons, section 57(13) must mean, "...the Director of Titles, acting

judicially, ... or a court may direct the rectification of the register if, (a) a

previous registered instrument disposition would be absolutely void if

unregistered; ... (c) the effect of the error, if not rectified, would be to deprive a

person of an interest in land of which land the person is was, when the error was

made, legally in possession or legally in receipt of the rents and profits and, in

the case of rectification, the person suffering by the rectification is entitled to the

compensation provided for by this section." (As to the underlined words at the

end, see a later footnote.) Presumably, where a mistaken disposition was

accompanied by an orderly giving of possession (or of receipt of the income),

the recipient should be treated as in possession (or receiving the income) as of

the moment when the registration of the disposition took effect. The English

Land Registration Act 2002 contains provisions that are similar to, but better

than, section 57(13).



determine which person keeps the interest, and which is

compensated.

An entry that rectifies the mistake can again raise the four basic

questions. Under the Ontario Land Titles Act, an entry in the

register to reflect a rectification isn't an event on which the Act can

take away an interest, because the sections on rectification contain

no words doing so. But, when the Act next gave an interest, the

entry for it could reflect the rectification, and so could compound a

mistake in an entry that rectified a mistake.

If an entry to rectify the register gave effect to a judicial decision

(whether by a court or official),61 the decision would usually bind

the parties, but a judgment in rem would bind all persons. An

agreement to rectify would bind only the parties. So, although an

entry on the rectification might be a mistake, a judgment or

agreement might bind a person to the entry.

When a land registrar or the director of titles rectifies the register,

the Ontario Land Titles Act doesn't require the land registrar or

director to hold a hearing,62 but the Ontario Statutory Powers

Procedure Act or other laws may do so.63 Presumably, when the

entry on a rectification won't take away an interest, the land

registrar or director needn't hold a hearing. Presumably, when the

entry will take away an interest, the land registrar or director must

hold a hearing, except where a party waives a hearing (or doesn't

take an opportunity to require a hearing).

An entry in the register that corrects a mistake in a past entry

differs from an entry that updates the register to reflect a change in

the title after a past entry. The former might be called a true

rectification and the latter a true amendment. Under the Ontario

Land Titles Act, the system can do both, but the Act sometimes

misleadingly treats an amendment as a rectification.64 When a

land registrar or the director decides to amend the register merely

61 See Attorney General v. Odell (1906). 62 Section 57(16), and even if the matter involves compensation (section 57(7)). 63 Ontario Statutory Powers Procedure Act, section 3(1) (especially the

underlined words in, "... this Act applies ... where the tribunal is required by or

under such Act or otherwise by law to hold or to afford to the parties to the

proceeding an opportunity for a hearing before making a decision"). And see

Baker v. Canada (Minister of Citizenship and Immigration), 1999 CanLII 699

(SCC). 64 Sections 159 and 160; see the judgment of Cozens-Hardy L.J. in Capital and

Counties Bank, Limited v. Rhodes (1903). Section 75 is an example of a general

power to amend the register.



to reflect a change in the title after a past entry, presumably the

land registrar or director needn't hold a hearing.

This article concludes that the Ontario Land Titles Act can't give a

right of way, and that the register doesn't take away a right of way

where the description of the property excludes a reference to the

right of way. So the Act always requires a mistake in showing, or

not showing, a right of way, or in so excluding it, to be rectified,

and the land registrar or director needn't hold a hearing before

rectifying the register.

(3) Compensation (land titles, principles, mistakes)


Act must answer the question: (3) Compensation: after a mistake,

will the land titles system compensate? Without proper

compensation, the Act's essential guarantee of title can be

meaningless.

When the register contains a mistake, the mistake may not take

away an interest. If so, as shown, the system should always rectify

the mistake. It can usually do so without raising the issue of the

system compensating for the value of the interest.65

As an exception, where a land titles system uses "deferred

indefeasibility," it may nevertheless compensate a person hurt by

an entry that could have given the person a valid interest, but didn't

through deferred indefeasibility, and this gives some relief from

the effect of deferred indefeasibility. The Ontario Land Titles Act

reflects the above, but only recently gave limited relief, and in

provisions that are difficult to interpret.66 This article concludes

65 Under the Ontario Land Titles Act, section 57(4), the mistake must have

"wrongfully deprived" the person of an interest. See Attorney General v. Odell

(1906) and Risman (1998), Ontario government website (Nancy R. Sills, deputy

director of titles). 66 Sections 57(4.1) and (4.2) and R.R.O. 1990, Reg. 690, s. 64. Section 57(4.1)

is confused because, when giving added compensation to an uninsured

individual owner of land used for residential purposes, who "has not received"

an interest, it awkwardly refers to section 57(13). This is awkward, because

section 57(13) applies only where a mistaken entry did cause the Ontario Land

Titles Act wrongly to take away an interest, so that a person would have

"received" the interest. Where, for example, section 57(4.1) awkwardly refers to

section 57(13)(c), it must be taken to do so only to compensate a person who

was in possession (or receiving the income). Or, where section 57(4.1) says that

the person must not have received the interest "by reason of a rectification of the

register made under clause (13)(a) or (c)," the words must be read differently,

because the rectification would be made under sections 159 and 160. The main

effect of section 57(4.1) and R.R.O. 1990, Reg. 690, s. 64 is to lighten the

burden under the doctrine of "deferred indefeasibility." On a government



that the Act can't give a right of way, and that the register doesn't

take away a right of way where the description of the property

excludes a reference to the right of way. So a mistake in showing

a right of way, or in so excluding it, doesn't raise the issue of

compensating a person for a mistaken entry that, through "deferred

indefeasibility," could have taken away a right of way, but didn't.

When the register contains a mistake, the mistake may take away

an interest. If so, the system should logically compensate some

person, but the person to be compensated depends on whether the

system rectifies the register. When the system doesn't rectify the

register, the system should compensate the person, from whom the

Act mistakenly took away the interest, for the mistake. When the

system does rectify the register, the system should compensate the

person, from whom rectification took the interest, for the

rectification. The Ontario Land Titles Act reflects the above, but

some of the provisions have become difficult to interpret.67

Despite the above, where a particular person is unable to take the

benefit of an interest that land titles legislation has given, the

person also can't take the benefit of any land titles compensation

for the interest.



conversion, they don't compensate an uninsured individual owner of land used

for residential purposes, for not receiving a right of way (or not receiving an

interest free from a right of way). This is because a mistaken entry couldn't lead

to the Act later giving the right of way (or freeing an interest from a right of

way) under that doctrine. 67 The Act compensates for the mistake mainly in sections 57(4) and 59. Before

the 2006 changes, the Act compensated for the rectification in section 57(13).

The 2006 changes illogically removed, from section 57(13), the words, "and, in

the case of rectification, the person suffering by the rectification is entitled to the

compensation provided for by this section." The underlined words confirmed

that the rectification merely moved the right to compensation to the person from

whom a rightful rectification took away the interest. The 2006 changes didn't

remove the right to the compensation, either because the section should logically

be treated as still containing the missing words, or because section 57(4) should

be read more broadly to compensate where a mistake took away an interest,

even where a rectification later returned the interest. Section 57(5) doesn't cover

a mistake in a conversion (see Syvan (2006)). Section 57(4)(c) normally

requires the system to compensate only as a last resort, but sections 57(4.1) and

(4.2) and R.R.O. 1990, Reg. 690, s. 64 may compensate, as a first resort, an

uninsured individual owner or buyer of land used for residential purposes. The

compensation under section 57(4) isn't limited to the amount of "what is just, by

way of compensation or damages" that the person could recover from another

person under section 57(1). This article doesn't deal with compensation for a

loss, other than for the value of an interest, or compensation where a mistake

only causes loss of priority.




So a mistake in showing a right of way, or in so excluding it,

doesn't raise the issue of the system compensating a person for the

value of a right of way.

(4) Burden of loss (land titles, principles, mistakes)


Act must answer the question: (4) Burden of loss: where the land

titles system must compensate for loss of the value of an interest

caused by a mistake, will a person, other than the land titles

system, bear the burden of that compensation?

Land titles compensation will be true compensation only if it's just

both to the person that suffers the loss and to each person

(including the land titles system) on whom laws put the burden of

the loss. For example, if the system were to compensate a person

through the front door, but were able to move the burden of a loss

onto the person through the back door, the Act's essential

guarantees of title, backed by compensation, could be meaningless.

When the register contains a mistake, the mistake may not take

away a valid interest. If so, the system should always rectify the

mistake, and usually does so without raising the issue of the system

compensating for the value of the interest. Here, the Act doesn't

usually raise the issue, where the land titles system must

compensate for loss of the value of an interest caused by a mistake,

of whether a person, other than the land titles system, should bear

the burden of that compensation.68

When a land titles register contains a mistake, and the mistake does

take away a valid interest, an issue arises, where the land titles

system must compensate for loss of the value of an interest caused

by a mistake, of whether a person, other than the land titles system,

should bear the burden of that compensation. The issue also arises

where the land titles law uses "deferred indefeasibility," but still

compensates a person hurt by an entry that didn't give the person a

valid interest.

When a land titles register contains a mistake and the system must

compensate for the mistake, a law other than the land titles

legislation may also make another person bear the burden of that

compensation, or the land titles legislation may itself make another

person bear the burden of that compensation. The land titles

legislation or other law may make another person bear the burden

68 Section 57(1) reflects this, because it applies only where a mistake caused a

person to be "wrongfully deprived."



of that compensation, by creating a liability for the loss. Or the

land titles legislation may indirectly make a person claiming

compensation bear the burden of that compensation, by denying

compensation to that person (for example, for fault).

Where a mistaken entry takes an interest away from one person,

another person must receive, or must in the past have received, an

undeserved benefit. Therefore, whether the land titles system or

another person bears the loss caused by the mistake should depend

on overriding equitable principles of unjust enrichment (including

subrogation and restitution).69 However, who in the end bears the

loss raises complex issues.

Remarkably, the Ontario Land Titles Act has always used the

principles of unjust enrichment where it puts a new liability on

another person for the loss.70 But, in some cases, the Act may still

interfere with the overriding equitable principles of unjust

enrichment.71

69 For subrogation, see, for example, Mutual Trust Co. v. Creditview Estate

Homes Ltd., 1997 CanLII 1107 (ON C.A.). 70 Sections 57(1) and (3). Under section 57(1), the person is liable for "what is

just, by way of compensation or damages, from the person on whose application

the erroneous registration was made or who acquired the title through the fraud

or error." Ontario added the underlined words to the Act, when the Act was first

enacted in 1885, and they were remarkable, because they wisely went beyond

the Torrens legislation, on which the compensation provisions of the Act were

based (sections 144 and 145 of the Transfer of Land Act 1866 of the Australian

state of Victoria). The added words mean that the Torrens words, which follow

the underlined words, needn't have limited the liability to the described persons

and that section 57(3), also based on the Torrens words, wasn't needed. But the

above limit shouldn't prevent the Ontario Act from having generally and wisely

adopted the overriding equitable principles of unjust enrichment. The words,

"or damages" suggest that section 57(1) might also have limited other liabilities

to those based on unjust enrichment. Section 57(13) doesn't change sections

57(1) and (3); the same person bears the burden, even if the person happens also

to be the person to be compensated (so that there'd be a whole or partial offset).

The Act may not always clearly distinguish between "what is just, by way of

compensation or damages," for which a person is liable under section 57(1), and

the "compensation," for which the system is liable (for example, in sections

57(4)(c) and (12), or their predecessors). And, although the director of titles

determines "compensation" under section 57(8), the director might not have the

power to determine "what is just, by way of compensation or damages" under

section 57(1). Courts sometimes mistakenly treat section 57(1) as making only

a wrongdoer liable, for example, a fraudster (for example, in Youssef v. Ontario

(Ministry of Consumer and Commercial Relations) [2003] O.J. No. 622 and

Syvan (2006)). 71 See sections 57(12) and 59. Making a person bear the burden of a loss under

section 59, because the person had been negligent, might illogically undermine

the Act's guarantees; go against the principles of unjust enrichment; and imply

that the system could be guilty of contributory negligence (whereas the system






So the mistake doesn't usually raise the issue of whether, where the

land titles system must compensate for loss of the value of an

interest caused by a mistake, a person, other than the land titles

system, should bear the burden of that compensation. As said, the

mistake also doesn't raise the issue of compensating a person for a

mistaken entry that, through "deferred indefeasibility," could have

given the person a right of way, or freed an interest from a right of

way, but didn't.

Land titles, rights of way

Practice for rights of way (land titles, rights of way)

Entry of right of way in property description (land titles, rights of way, practice)

A right of way is usually a right of those using one property (the

together-with land, or dominant land) to go over another property

(the subject-to land, or servient land). After a right of way comes

into existence, it can automatically run for the benefit of the

together-with land, without being specifically transferred, and

apart from registration, it can automatically run against the subject-

to land, without being specifically referred to.

In practice for a right of way, the documents should, and usually

do, show the property descriptions of (1) the together-with land,

(2) the subject-to land and (3) the part of the subject-to land over

which those using the together-with land can go. In practice, the

documents often show all these descriptions, and the terms of the

should be free to balance costs of operation and compensation). In Mutual Trust

Co. v. Creditview Estate Homes Ltd., referred to in a previous footnote, the

Ontario Court of Appeal decided that negligence was generally irrelevant for

unjust enrichment. The court in Syvan (2006) rightly recognized the principles

of unjust enrichment in a title insurer's right of subrogation, but mistakenly

didn't consider them for who should bear the burden of the loss. Contrast the

Canadian Model Land Recording and Registration Act (1993), section 7.8. The

2006 changes may create serious inroads on the overriding equitable principles

of unjust enrichment. Both sections 57(2) and 59(1)(a) cover a failure to register

and should be read together. For example, on a conversion, section

113(5)(a)(iv) of the Ontario Registry Act might have preserved a right that a

person was openly using, but the conversion might mistakenly have taken the

right away. If so, section 59(1)(a) should allow the person to be compensated

for the mistake, even though section 57(2) might seem to deny compensation.



right of way, in the property descriptions of the together-with and

subject-to land.

Following the above practice, the practice in the Ontario land titles

system is for the register to show a right of way in the property

descriptions.72 This misleadingly suggests that the Ontario Land

Titles Act guarantees a right of way, even though the Act can't

guarantee a right of way.

A land titles register is in two parts:

• The first part of the register usually contains, among other

things, the property description, the nature of the title and the

name of the owner. The property description (called the

"thumbnail" in the electronic system) usually refers to any right

of way that the land is subject to or together with.

• The second part of the register usually lists the things that affect

the title of the owner, including a charge or lease. The list in

the second part of the register sometimes contains a notice of

any right of way that the land is subject to or together with,

either as well as, or instead of, referring to the right of way in

the first part. As shown below, the Ontario Land Titles Act

requires the entry for a right of way in the register for the

subject-to land to be a notice. So that register should show the

right of way only through a notice in the second part of the

register. As shown below, the Act shows that the entry in the

register for the together-with land is a mere cross-reference. So

that register should show the right of way only through a notice

in the second part of the register.

The practice doesn't change the effect of the Ontario Land Titles

Act. As shown below, where the property description shows a

right of way, the Act can't guarantee it. And the entry has effect as

a notice, even though it isn't in the form of a notice, because the

form doesn't change the substance.73

72 Land Registry Ontario's Bulletin 2005-02, section 2.0, partly confirms this

practice. 73 The practice may account for the Ontario Law Reform Commission’s 1971

Report on Land Registration mistakenly saying on page 14: "The record

includes an affirmation of the existence and ownership of interests—the fee

simple and charges, and some leases and easements." See,

http://www.archive.org/details/reportonlandregi00onta.

http://www.archive.org/details/reportonlandregi00onta



Transfer of easement (land titles, rights of way, practice)

An easement may come into existence when a transfer of

ownership severs land and gives a specific easement over the land

retained, or reserves a specific easement for the benefit of that

land. However, an easement can also come into existence through

a grant of the right of way alone. In the Ontario land titles system,

the practice is to refer to a grant of the right of way alone as a

"transfer" of the right of way.74

The Ontario Land Titles Act uses the word, "transfer," to refer

mainly to a transfer of the fee simple. The Act requires a transfer

of the fee simple (and other "registered dispositions") to be entered

directly on the register, rather than through a "notice."75 So

referring to a grant of the right of way alone as a "transfer" of the

right of way misleadingly suggests that the Ontario Land Titles Act

guarantees a right of way, even though, as shown below, the Act

can't guarantee a right of way. (The Act may indirectly validate

the right of way, as explained below.)

Indirect validation the right of way (land titles, rights of way, practice)

As the principles show, where the register shows another interest,

to which the key interest may be subject, but the Ontario Land

Titles Act doesn't give that interest, the Act may indirectly (and

only partly) validate the other interest. This happens when the Act

has given an interest to a person (for example, the fee simple), and

that person afterwards gives the other interest (for example, a right

of way). This might misleadingly suggest that the Ontario Land

Titles Act guarantees a right of way, even though, as shown below,

the Act can't guarantee a right of way. (See Giving key interests

(land titles, principles).)

Register for subject-to land generally governs (land titles, rights of way, practice)

Where a register shows a right of way, the registers for both the

together-with land and the subject-to land should show the right of

way.

If both the together-with land and the subject-to land are in land

titles, the register for the subject-to land governs, not the register

74 For example, in Land Registry Ontario's Bulletin 2005-02, section 2.0. 75 See, for example, sections 66 and 77.



for the together-with land.76 So, for example, if the register for the

subject-to land shows nothing for the easement, the registers will

be treated as not showing the easement. Or, if the register for the

subject-to land shows the easement, the registers will be treated as

showing the easement. Or, if the words, "as in instrument

(number), except the easement therein," appear in the register for

the together-with land, those words alone can't take the easement

away from the together-with owner.

The reasons for the above are as follows:

• The registers in Ontario are normally divided, so that there's a

separate register for each piece (or "parcel") of land and the

register for each piece shows all the interests in that piece. For

example, the register for a parcel will show the ownership and

an encumbrance on that parcel, such as a charge or a lease. In

the same way, the governing register for a right of way is

generally the register for the subject-to land, because the right

of way is an interest in, or an encumbrance on, that land.77

• The register for subject-to land shows all the relevant entries for

that land. For example, where a registered owner of the subject-

to land gives a right of way, the register for the subject-to land

will show (a) whether the Act had given the fee simple to that

registered owner and (b) any charge or other interest to which

the fee simple (and therefore the right of way) could be subject.

Or, for example, where the register is to show that a right of

way isn't a valid overriding right, the register for the subject-to

land must show this (under the words, "unless the contrary is

expressed on the register").78 The register for the subject-to

land should also govern for any other entry that related to the

right of way and that was made after the right of way was

created, for example, a release of the right of way.

• Because the register for each parcel of land normally shows all

the interests in that parcel, the register for the together-with land

shows only the interests in that parcel. So the register for the

76 In Syvan (2006), the director argued that good practice required the buyer's

lawyer to search the subject-to land. The director's decision hadn't relied on this

reason and the court didn't comment on the standard of practice. Neither the

director nor the court dealt with the issue of whether the register for the subject-

to land governed. 77 Land Registry Ontario's Bulletin 2005-02, section 2.0, partly confirms the

above, by saying that the entry in the register for the together-with land shouldn't

include prior encumbrances shown in the register for the subject-to land, despite

a previous practice. It advises a search of the register for the subject-to land for

any prior encumbrances on the subject-to land that affect an easement. 78 See, for example, the Ontario Land Titles Act, section 44(1).



together-with land shows only those who have the benefit of the

right of way and the encumbrances on the ownership of the

together-with land (and, incidentally, those on the benefit of the

right of way).

• If the registers for both the subject-to and together-with land

were to show all the relevant entries for a right of way, each

would have to show every relevant interest in both parcels to

which the right of way was subject. This could cause

inconvenient, confusing and risky duplication.79

• As shown below, section 39 of the Ontario Land Titles Act

reflects the above by generally saying that the register for the

subject-to land may contain a "notice" of a right of way. In the

register for the together-with land, the Act generally only says

that "the facts may be stated," showing that the entry is a mere

cross-reference.80 Ideally, the entry of the "facts" in the register

for the together-with land would also guide a person looking at

the register to look at the register for the subject-to land for the

governing entries for the right of way.

• The registers might be divided so that there was a separate

register for a guaranteed interest in land, rather than simply for

each piece of land. Then, the register for the guaranteed interest

would show all entries for that interest. In Ontario, where the

Act is to guarantee the interest of a tenant under a longer lease,

the practice is to open a separate register (called a "leasehold

parcel") for all entries for the lease, as well as showing the lease

in the register for the fee simple. In England, but not Ontario,

the practice is also to open a separate register for a charge, as

well as showing the charge in the register for the ownership.

There are compromises, whichever way the registers are

divided, but it would seem more practical for the register for the

subject-to land to show and govern a right of way, as the

register does for a charge on that land.

Other problems with rights of way (land titles, rights of way, practice)

In urban areas, rights of way usually aren't needed, because most

properties are on well-built and well-maintained public roads, and

any needed rights of way (for example, for driveways) are well

surveyed, created and registered. In rural areas, rights of way are

often needed, because properties (especially those fronting on

79 Land Registry Ontario's Bulletin 2005-02 reflects this concern. 80 Ontario Land Titles Act, sections 39(4) and (5).



lakes) are often remote, used only in the summer and less valuable,

and the roads to these properties are usually poorly built and

poorly maintained. This often leads to rural rights of way being

less well surveyed, created and registered, and to the roads

wandering from their original route over time.

General rules (land titles, rights of way)

The general rules for a right of way under the Ontario Land Titles

Act are as follows:

• A right of way is an overriding right that remains valid, even if

the register doesn't show the right of way. The register for the

subject-to land can show that a right of way isn't an overriding

right, and then the Act guarantees that the land is free from the

right of way. (See Section 44(1) ¶2 (land titles, rights of way).)

(On a conversion, the register often excludes a reference to the

right of way in the property description, by using the words,

"except the easement therein." As this article shows later, the

register for the subject-to land doesn't show that a right of way

isn't an overriding right, where the description of the property

merely excludes a reference to the right of way. )

• Despite the above, the registers should show a right of way,

where it exists, but the Act doesn't then guarantee the right of

way. Section 39 shows that the entries have effect only as a

"notice" of the right of way, which generally only protects an

interest, if it exists. As shown below, section 45 guarantees the

fee simple when land is first registered in land titles, and

sections 87 and 93, among others, guarantee the fee simple or a

charge or charge when a transfer or charge is registered. Those

sections guarantee the fee simple or charge "together with all

rights..." However, as shown below, even if the register then

shows a right of way, the words show that the guarantee is

together with a right of way, only if it exists. As shown above,

the register for the subject-to land governs, not the register for

the together-with land.

Section 44(1) ¶2 (land titles, rights of way)

As to a right of way being an overriding right, section 44(1) of the

Ontario Land Titles Act says:

All registered land, unless the contrary is expressed on the

register, is subject to such of the following liabilities, rights and

interests as for the time being may be subsisting in reference

thereto, and such liabilities, rights and interests shall not be

deemed to be encumbrances within the meaning of this Act...



2. Any right of way, watercourse, and right of water, and other

easements.

These provisions show that every easement is an overriding right,

except where the register for the subject-to land specifically shows

that an easement isn't an overriding right. The effect is that the

Ontario land titles system doesn't require a right of way to be

registered.

So, where a right of way bound a person before conversion, since it

becomes an overriding right on the conversion, it binds the person

after conversion. Since the right of way is an overriding right, it

has priority over all interests in the subject-to property that are

entered in the land titles register after conversion. Since the right

of way is an overriding right, even if it's entered in the register

after conversion, it must retain its priority over the above interests,

regardless of order of registration.

Section 39 (land titles, rights of way)

Words of section 39 (land titles, rights of way, section 39)

The Ontario Land Titles Act says:

39. (1) The land registrar may register the owner of,

(a) any incorporeal hereditament of freehold tenure enjoyed in

gross; or

(b) any mines or minerals where the ownership of the same has

been severed from the ownership of the land,

in the same manner and with the same incidents in and with

which the land registrar is by this Act empowered to register the

owner of land, or as near thereto as circumstances admit.

(2) Where an easement in or over unregistered land is granted as

appurtenant to registered land, the land registrar, after such

examination as he or she considers necessary, may enter the

easement in the register of the dominant land with a declaration

that the title thereto is absolute, qualified or possessory, or

otherwise as the case requires, and shall cause to be registered in

the proper registry division a certificate of such entry.

(3) Where an easement in or over registered land is granted as

appurtenant to unregistered land, the land registrar may issue a

certificate setting out the easement and the land to which it is

appurtenant, which may be registered in the registry division in



which the land is situate, and he or she shall note on the register

that such certificate has been issued.

(4) Where the existence of an easement is proved, the land

registrar may, if he or she thinks fit, enter notice thereof on the

register.

(5) Where title is shown to an easement appurtenant to land

being registered, the facts may be stated in the entry and

certificate of ownership.81

Section 39(1) could apply to an easement only if it's "in gross."82

Sections 39(2) and (3) deal only with cases where, when an

easement is granted, the together-with and subject-to land are in

different systems, one in registry and the other in land titles, and a

grant creates the easement. Sections 39(4) and (5) deal with all

other cases, and apply whether a grant creates, or created, the

easement, or the easement was acquired before first registration

through prescription. Therefore, sections 39(4) and (5) contain the

general rules.

(Section 40 of the Ontario Land Titles Act allows condominium

documents to create an easement between the condominium and

land outside the condominium. It only shows that this creates the

easement, even though there's no "transfer" and even though the

same person owns both the condominium and the land outside the

condominium. Parallel provisions allow a later registered

"transfer" to create the easement, before a transfer of any

condominium unit is registered. The section overcomes laws

outside the Act that might prevent creating the easement, but the

section doesn't show that the Ontario Land Titles Act gives the

easement.)

As shown below, when a right of way is entered on the register

under section 39 of the Ontario Land Titles Act, the Act doesn't

guarantee the right of way.83

81 Section 39 is being amended, mainly to transfer some responsibilities to the

director of titles. 82 The words, "in gross," usually refer to an easement for which there seems to

be no together-with land, for example, an easement for a network of electricity

or phone lines. 83 As this article shows later in the comments on Syvan (2006), that case is no

authority for treating section 39 as guaranteeing a right of way, because neither

the director nor the court dealt with the section.



General rules (land titles, rights of way, section 39)

As said, sections 39(4) and (5) contain the general rules. Section

39(4) must deal with the entry in the register for the subject-to

land. It shows that the land registrar may enter "notice" of the

easement in the register for the subject-to land. Section 39(5) deals

with the entry in the register for the together-with land, and shows

that "the facts may be stated" in an entry in the register for the

together-with land.

Under the Ontario Land Titles Act, there are no general words

giving a key interest, and we must always look for specific words

showing that the kind of entry gives the key interest, and we must

look at any conditions. This is one starting point for this article's

conclusion that the Ontario Land Titles Act doesn't guarantee a

right of way. (See Giving key interests (land titles, principles).)

Where the Ontario Land Titles Act, allows an interest to be entered

through a "notice," it doesn't guarantee the interest. This is another

starting point for this article's conclusion that the Ontario Land

Titles Act doesn't guarantee a right of way. (See Preserving

possible interests (land titles, principles).)

Sections 39(4) and (5) contain no specific words showing that,

when the system makes an entry for an easement, the Act gives the

easement.84 Section 39(4) shows only that the land registrar may

enter "notice" of the easement in the register for the subject-to

land. Section 39(5) shows only that "the facts may be stated" in an

entry in the register for the together-with land. Clearly, when the

system makes an entry for an easement, under the words of the

general rules in section 39, the Act contains no words giving the

easement.

As said, where an easement is known and shown to exist, the

register should show it and land titles legislation should probably

guarantee the shown easement.85 However, guaranteeing the

easement might seem to go a long way from treating it as an

overriding right.

If a court were to interpret section 39 to give an easement, it would

conflict with the above principles. It could give, to a holder of an

interest that the Act didn't give clearly, only an uncertain chance of

a benefit. And it would create, for the land titles system, an

uncertain risk over such an interest.

84 Contrast, for example, sections 45, 87 and 93(3). 85 Canadian Model Land Recording and Registration Act (1993), section

5.1(1)(d).



Presumably, section 39(5) means: "Where title is shown to an

easement appurtenant to registered land being registered, the facts

may be stated in the entry a notice entered in the register, and

certificate of ownership, for the dominant land and certificate of

ownership." The first change would confirm that section 39(5)

doesn't apply only on first registration. The other changes would

avoid any suggestion that the statement caused the Act to give the

easement.

Where section 39(5) shows that "the facts may be stated" in an

entry on the register for the together-with land, it doesn't show

what the statement causes the Act to do for the easement. Section

39(5) neither tracks other words in the Act that give an interest, nor

reflects section 39(4), which shows only that the land registrar may

enter "notice" of the easement in the register for the subject-to

land. The words, "the facts may be stated," seem merely to reflect

the fact that the entry in the register for the subject-to land is the

key entry, and that the entry in the register for the together-with

land is a mere cross-reference.

Because the Ontario Land Titles Act requires an easement to be

entered through a "notice," it doesn't guarantee the easement. The

easement in the notice is only a possible interest, and a person

must search further to determine whether the easement is valid.

Section 39(4) allows the easement to be entered in the register for

the subject-to land, where "the existence of an easement is

proved." Section 39(5) allows the easement to be entered in the

register for the together-with land, where "title is shown to an

easement." Presumably, where the easement is shown to exist, the

system must enter a notice of an easement in both registers, and the

together-with owner has a right to have the register show the

easement.

It might seem illogical for section 39 to require the land registrar to

enter an easement in the register only where the easement is shown

to exist, but for the section then not to give the easement (that is,

guarantee that the easement exists). But this should apply to a

notice of any other interest, because the land registrar shouldn't

enter a notice of another interest in the register, unless the interest

is shown to exist.86

Conversely, the system shouldn't enter the notice of an easement

unless "the existence of an easement is proved" or "title is shown

to an easement." In other words, the system must be reasonably

satisfied that the easement is valid. As an easement is an

86 Section 71(1).



overriding right and remains valid, even if it's not entered, it might

seem more logical for section 39 to allow the land registrar to enter

a notice of easement in the register, without needing to be

reasonably satisfied that the easement is valid. In effect, under

section 39, the entry would merely draw attention to, and give

information about, a possible easement that the register wouldn't

have had to show anyway. To allow this, the system might

interpret section 39 not to require proof that the easement was

valid, but merely to require the evidence.

As said earlier, the practice for rights of way may misleadingly

suggests that the Ontario Land Titles Act guarantees a right of way,

even though the Act can't guarantee a right of way. However, the

practice couldn't change the law or lead to the Act guaranteeing a

right of way.

As said, sections 39(2) and (3) deal only with cases where, when

an easement is granted, the together-with and subject-to land are in


grant creates the easement. However, as shown below, even

though the sections use different words, they also don't guarantee

an easement.

If the easement isn't entered, the right of way is still an overriding

right, unless the register expresses the contrary. So it might seem

that merely not entering the easement couldn't be a mistake.

However, this article can still treat it as a possible mistake for the

purposes of the four basic questions in the analysis of the effect of

the Ontario Land Titles Act, because the answers to the questions

lead to the same result.

Special rules when one property in registry when easement granted (land titles, rights of way, section 39)

As said, sections 39(2) and (3) deal only with cases where, when

an easement is granted, the together-with and subject-to land are in


grant creates the easement. The sections couldn't apply on a

government conversion from registry to land titles, because the

sections apply only when an easement is granted, while a first

registration only shows an existing easement.

Section 39(2) applies where an easement over land in registry is

granted for the benefit of land in land titles. It suggests that the

title to the easement ("thereto") may be absolute, qualified or

possessory, but it doesn't say, that the Ontario Land Titles Act

gives (or guarantees) the easement. This neither tracks other



words in the Act that give an interest, nor reflects the fact that the

Act doesn't generally give an easement. It could only reflect the

irrelevant fact that the together-with land may have an absolute,

qualified or possessory title. Section 39(2) requires (1) the

easement (that is, the grant of the easement) to be entered in the

land titles register for the together-with land, and (2) a certificate

of that entry to be entered in the registry register for the subject-to

land. This seems to be the wrong way around.

Section 39(3) applies where an easement over land in land titles is

granted for the benefit of land in registry. It doesn't show in any

way that the Ontario Land Titles Act gives (or guarantees) the

easement. Unlike section 39(2), section 39(3) doesn't suggest that

the title to the easement may be absolute, qualified or possessory,

which could be relevant. Section 39(3) requires a certificate to be

issued and then requires (1) the certificate to be registered in the

registry register for the together-with land and (2) a "note" to be

entered in land titles that the certificate has been issued. This

suggests that the entry in land titles is only a notice.

Neither section 39(2), nor section 39(3), deals with the effect of the

Ontario 40-year rule.

• If the subject-to land were in registry, the grant of the easement

would be registered in registry. Section 39(2) would also

require a certificate of the land titles entry to be registered in

registry. 40 years might then pass after these registrations.

Presumably the Ontario 40-year rule would still apply to the

subject-to land in registry, and could allow the easement to

expire. Therefore, the owners of the together-with land in land

titles would be wise to ensure that the Ontario 40-year rule

continued to protect the easement. As section 39(2) doesn't

apply to a government conversion, with which this article deals,

the issue doesn't arise for the purposes of this article.

• If the subject-to land were in land titles, the easement would be

entered in the land titles register for the subject-to-land, and 40

years might then pass after its entry. The Ontario 40-year rule

couldn't apply to the subject-to land in land titles.

As almost all land in Ontario is now in land titles, sections 39(2)

and (3) can almost always have applied only in the past.

Need on conversion to register notice of easement (land titles, rights of way, section 39)

On a conversion, it might seem that the Ontario government didn't

have to enter an easement in the register, and that a failure to do so



couldn't be a mistake. Because an easement is an overriding right,

merely failing to show an easement wouldn't affect its validity.

Section 39 allows the register to show the easement only if it's

proved to be valid.

However, on a conversion from registry to land titles for electronic

registration, the Ontario government should normally have acted in

the same way as any other applicant for a first registration. In

doing so, it would have determined whether an easement, which

was more than 40 years old, was valid under the Ontario 40-year

rule and, if so, that the new land titles registers showed it. Or the

government conversion procedures should at least have both

allowed the government not to do so, and ensured that an easement

remained valid after the conversion.

In any event, even if a failure to enter the notice on a conversion

wasn't a mistake, correctly answering the four basic questions

would still lead to the correct result for the purposes of later

entering the notice.

Sections 45, 87 and 93, "together with all rights" and subject to encumbrances (land titles, rights of way)

Words of Act (land titles, rights of way, sections 45, 87 and 93)

On first registration (which includes a government conversion),

section 45 of the Ontario Land Titles Act gives the ownership,

"together with all rights, privileges and appurtenances."87 When a

transfer is registered, section 87 gives the ownership, together with

those rights.88 As shown below, when a charge is registered,

section 93(3) must give the charge, together with those rights.89

Sections 45, 87 and 93 of the Ontario Land Titles Act give the fee

simple or a charge, subject respectively to the "encumbrances, if

any, entered on the register;" the "encumbrances, if any, entered or

noted on the register;" or subject to "the encumbrances ... to which

the chargor’s interest is subject."90

87 Section 46 shows that this applies to a qualified title. 88 Section 88 shows that this applies to a qualified title. 89 There are similar provisions for leasehold land, for example, section 48, and

for a transfer of a charge in section 101(3). As this article shows later in the

comments on Syvan (2006), that case is no authority for treating section 45 or 87

as guaranteeing a right of way, because neither the director nor the court dealt

with either of those sections. 90 These would apply to a qualified or leasehold title.



"Together with all rights" (land titles, rights of way, sections 45, 87 and 93)

Where the Ontario Land Titles Act gives the fee simple in the

together-with land "together with all rights...," it gives only the

rights that exist, and doesn't give any specific right. Reasons for

this are as follows:

• Under the Ontario Land Titles Act, there are no general words

giving a key interest, and we must always look for specific

words showing that the kind of entry gives the key interest (see

Giving key interests (land titles, principles)). The words,

"together with all rights," don't give a specific right of way,

even one that happens to be entered on the register, or one that

happens to be shown in the property description (see Entry of

right of way in property description (land titles, rights of way,

practice)).

• The words, "together with all rights," don't refer to any specific

right, but merely assume that there may be some rights that go

along with the ownership. The words, "together with all

rights...," merely confirm that the guarantee of ownership is

together with the rights that exist and that by law go along with

the ownership. The Act in effect gives the ownership together

only with all rights (if any) that go along with the ownership,

and only where the right is otherwise valid.

For example, the register may contain a notice of a lease, of

which the owner has the benefit, as landlord. That doesn't mean

that the words, "together with all rights," guarantee that the

lease is valid. Similarly, the register for the together-with land

may refer to an easement, of which the owner has the benefit.

That doesn't mean that the words, "together with all rights,"

guarantee that the easement is valid. The entry for the lease or

easement and the general words, "together with all rights," don't

work together to give the lease or easement.91

• For a right that goes along with the ownership, such as an

easement, the Ontario Land Titles Act doesn't allow the register

to say that the right doesn't exist. The words, "together with all

rights," aren't qualified by any words saying, like those for an

overriding right, "unless the contrary is expressed on the

91 The Ontario Land Titles Act is based on the English Land Transfer Act 1875,

and the provisions affecting easements in the Ontario Act are similar to those in

the English Act. In The Land Transfer Acts, 1875 and 1897 by Brickdale and

Sheldon, 1899 edition, the authors confirm the above interpretation. See pages

152 and 153, note (n), especially the second last paragraph of that note.



register." The Act sensibly assumes that, if a right doesn't go

along with the fee simple, the register simply won't show it at

all, rather than needlessly showing it, and then illogically

contradicting that by saying that it doesn't exist.

On a government conversion, the register for the together-with

land sometimes describes the land by saying "as in instrument

(number), except the easement therein." Here, the register

could, by reference, show a right that goes along with the

ownership. The words, "except the easement therein," then

seem illogically to contradict that by saying that the easement

doesn't exist. The Act doesn't allow the register for the

together-with land validly to say that an easement that might

pass under the words, "together with all rights," doesn't exist.

• For an easement, under section 39 of the Ontario Land Titles

Act, the register can show an easement, but that section doesn't

give the easement (see Section 39 (land titles, rights of way)).

It would be inconsistent with section 39 if the words, "together

with all rights," were to do what section 39 hadn't done.

• For an easement, as shown above, if both the together-with land

and the subject-to land are in land titles, the register for the

subject-to land governs the easement. The register for the

together-with land shows the title to the ownership of that land.

The register for the subject-to land would show the title to the

subject-to land. Therefore, in the register for the together-with

land, the words in that register, "together with all rights," can't

affect the issue of whether the easement is valid.

Therefore, on a government conversion, the Ontario Land Titles

Act wouldn't then guarantee a right of way shown in the register

for the together-with land.

Together with, added words for transfer (land titles, rights of way, sections 45, 87 and 93)

For a transfer, section 87 of the Ontario Land Titles Act says:

A transfer for valuable consideration of land registered with an

absolute title, when registered, confers on the transferee an estate

in fee simple in the land transferred, together with all rights,

privileges and appurtenances, subject to,

(a) the encumbrances, if any, entered or noted on the register;

and



(b) the liabilities, rights and interests, if any, as are declared for

the purposes of this Act not to be encumbrances, unless the

contrary is expressed on the register,

and as to such rights, privileges and appurtenances, subject also

to any qualifications, limitation or encumbrance to which the

same are expressed to be subject in the register, or where such

rights, privileges and appurtenances are not registered, then

subject to any qualification, limitation or encumbrance to which

the same are subject at the time of the transfer, but free from all

estates and interests whatsoever, including estates and interests of

Her Majesty, that are within the legislative jurisdiction of

Ontario.92

For a transfer, there are the added words underlined above. These

words don't affect the meaning, for the following reasons:

• The words wouldn't be needed where the Ontario Land Titles

Act wasn't giving the "rights, privileges and appurtenances."

But this could only imply that the Act gives the "rights,

privileges and appurtenances."

• For an easement, as shown above, any entry relating to an

easement, in the register for the together-with land, can't affect

the issue of whether the easement is valid or to what interests

it's subject. So the words in that register, "together with all

rights," can't affect the issue of whether the easement is valid.

In the same way, the added words in the register for the

together-with land, which purport to show any "qualifications,

limitation or encumbrance," to which a right is subject, can't

determine whether the easement is subject to the "qualifications,

limitation or encumbrance."

• The words didn't appear in the equivalent section of the English

Land Transfer Act 1875, but were added to the Ontario Land

Titles Act. As the principles show, Ontario has made many

changes to the Ontario Land Titles Act over time, and these are

often less well worded than the English Acts, or inconsistent

with the overall scheme of the Act.

• The words don't appear in the equivalent sections that show the

effect of first registration, or in the equivalent section that

shows the effect of a charge. This inconsistency confirms that

the added words don't imply that, on registration of a transfer,

92 Section 87. Section 88 shows that the basic provisions in section 87 apply to a

government conversion with a qualified title.



the Act can guarantee the "rights, privileges and

appurtenances."

• The added words go on to say, "or where such rights, privileges

and appurtenances are not registered, then subject to any

qualification, limitation or encumbrance to which the same are

subject at the time of the transfer." Where these words apply,

they clearly don't suggest that "any qualifications, limitation or

encumbrance" will be "expressed ... in the register." The words

also imply that the earlier added words only apply where the

"rights, privileges and appurtenances" are "registered." The

word, "registered," implies that the words could apply only

where the Act gave an interest, not where, for example, a notice

of an interest would merely "protect" the interest.93 For an

easement, as shown above, section 39 only shows that "the facts

may be stated" in an entry on the register for the together-with

land, and doesn't show that the Act gives the easement. The

above would make it even less likely that a right of way shown

in the register for the together-with land was a "registered"

right.

Therefore, even if a transfer had been registered after a

government conversion, the Ontario Land Titles Act wouldn't then

guarantee a right of way shown in the register for the together-with

land.

Together with, charge (land titles, rights of way, sections 45, 87 and 93)

For a charge, the Ontario Land Titles Act says:

The charge, when registered, confers upon the chargee a charge

upon the interest of the chargor as appearing in the register

subject to the encumbrances and qualifications to which the

chargor’s interest is subject, but free from any unregistered

interest in the land.94

These words don't show that, when a charge is registered, the

Ontario Land Titles Act guarantees any right that goes along with

the land and that's shown in the register, for the following reasons:

• The Act doesn't specifically use the words, "together with all

rights" for a charge, and so the issue doesn't arise as to whether,

by those specific words, the Act could guarantee a charge on a

right that goes along with the interest of the borrower.

93 Section 71. 94 Section 93(3).



• The words, "the interest of the chargor as appearing in the

register..." must express, in a shorthand way, what the sections

dealing with the effect of either first registration or a transfer

show. That would basically be that, for example, when a charge

is registered, the Act could give "a charge upon" the fee simple

in the land charged, "together with [a charge upon] all rights,

privileges and appurtenances, subject to ... but free from all

estates and interests whatsoever..."

• The English Land Transfer Act 1875 didn't use similar words,

but instead set out the remedies over the land that the Act gave

to the registered owner of a charge. In the same way, the

Ontario Land Titles Act should, as said, be read as basically

giving what the sections dealing with the effect of either first

registration or a transfer give. The Ontario Land Registration

Reform Act confirms that the remedies under a "charge" are

those in a mortgage.95

Therefore, even if a charge had been registered after a government

conversion, the Ontario Land Titles Act wouldn't then guarantee a

right of way shown in the register for the together-with land.

Subject to encumbrances (land titles, rights of way, sections 45, 87 and 93)

Where the Ontario Land Titles Act gives the fee simple in the

subject-to land, subject to an encumbrance, it doesn't give the

encumbrance. Reasons for this are as follows:

• Under the Ontario Land Titles Act, there are no general words

giving a key interest, and we must always look for specific

words showing that the kind of entry gives the key interest (see

Giving key interests (land titles, principles)). The words,

"together with all rights," don't give a specific right of way,

even one that happens to be entered on the register, or one that

happens to be shown in the property description (see Entry of

right of way in property description (land titles, rights of way,

practice)).

• When the Ontario Land Titles Act gives the fee simple in the

subject-to land, subject to an encumbrance, it's giving the fee

simple to "the person so registered" (that is, "as first registered

owner"), or to "the transferee," or to "the chargee." It isn't then

giving an interest to the holder of encumbrance, in particular,

the holder of an easement over the subject-to land.

95 Ontario Land Registration Reform Act, section 6.



• When the Ontario Land Titles Act gives the fee simple in the

subject-to land, subject to an encumbrance, the entry in the

register is protecting the encumbrance "from being impaired by

any act of the registered owner."96 It isn't then guaranteeing

that the encumbrance is valid. For example, the register may

contain a notice of a lease, and giving the fee simple subject to

the notice doesn't mean that the Act then guarantees that the

lease is valid. Similarly, the register for the subject-to land may

refer to an easement, but that doesn't mean that the Act then

guarantees that the easement is valid.

• For an overriding right, like an easement, the land is subject to

it "unless the contrary is expressed on the register." When the

Ontario Land Titles Act gives the fee simple in the subject-to

land, subject to an easement, it obviously isn't expressing the

contrary on register, that is, that the land isn't subject to the

easement. Conversely, where the register uses the words,

"except the easement therein," it doesn't take away a valid

easement (see Meaning (land titles, rights of way, "except the

easement therein")).

• For an easement, under section 39 of the Ontario Land Titles

Act, the register can show an easement, but that section doesn't

give the easement (see Section 39 (land titles, rights of way)).

It would be inconsistent with section 39 if giving the fee simple

in the subject-to land, subject to an encumbrance, were to do

what section 39 hadn't done.

• The words for a first registration, subject to the "encumbrances,

if any, entered on the register," might better have said, subject

to the "encumbrances, if any, entered on the register, as far as

those encumbrances are valid." The words for a transfer,

subject to the "encumbrances, if any, entered or noted on the

register," reflect the fact that an encumbrance may be shown in

only a notice, which accepts that the interest may not be valid.

The words for a charge, subject to the encumbrances ... to which

the chargor’s interest is subject," accept that the chargor’s

interest may not be subject an encumbrance.

Therefore, on a government conversion, the Ontario Land Titles

Act wouldn't guarantee a right of way shown in the register for the

subject-to land. And, even if a transfer or charge of the subject-to

land had been registered after a government conversion, the

Ontario Land Titles Act wouldn't then guarantee a right of way

shown in the register for the subject-to land.

96 See section 71.



Section 44(1), "except the easement therein," (land titles, rights of way)

Background (land titles, rights of way, "except the easement therein")

On a government conversion, the register for the subject-to land

sometimes describes the land by saying, "as in instrument

(number), except the easement therein."97 The background to the

words is as follows:

• In registry, a registered document needn't refer to an easement,

but it usually does, for the reasons below. It usually says, in the

property description, that the land is together with or subject to

the easement; it often shows the terms of the easement in the

property description; and it adds a description of the land

affected by the easement to the property description.

For a dealing with the together-with land, a person taking under

the dealing usually wants the registered document to say that

the dealing is together with the easement and to contain a full

description of the subject-to land, or the part of it affected by

the easement. Reasons for this are to ensure that the dealing is

registered against the subject-to land in order to protect it in the

registry system;98 and to have the benefit of the covenants for

title cover the easement.

For a dealing with the subject-to land, a person making the

dealing usually wants the registered document to say that the

dealing is subject to the easement. Reasons for this are not to

purport to deal with the land free from the easement, and not to

be liable, under the covenants for title, either to the person

taking under the dealing or to a successor of that person.

• A registered document in registry or land titles is usually based

on an accurate survey. Unless the survey is filed in the land

registry office as a reference or subdivision plan, the document

must usually describe the land in words. Where the boundaries

are complex, this description usually begins at a recognized

point, goes to a point of commencement, and then goes around

the boundaries, usually giving a bearing and distance for each

part of boundaries. The description in words is called a "metes

and bounds" description and it is often long (and often no

97 Land Registry Ontario Bulletin 2007-02 shows that the register might have

used the words, "except the easement therein," or "a variation thereof." This

article doesn't try to comment on a variation of the words. 98 See Preserving possible interest (registry 40-year rule, principles).



registered document contains the survey on which the

description is based). It's convenient to put all metes and

bounds descriptions, whether of the land or a right of way, in

one place.

• Normally, when land is first registered in land titles, the system

requires a new "reference plan" to be prepared and deposited in

the land registry office. Then, instead of using an old and long

metes and bounds description, documents and the register can

more simply refer to numbered "parts" on the filed reference

plan. However, the streamlined process on a government

conversion to land titles didn't require a new reference plan, but

adopted the existing description and qualified the title to cover

any defects in the existing description. In addition, instead of

entering a long metes and bounds description in the electronic

register, the Ontario government had the register say simply that

the land was "as in instrument (number)," being an instrument

in registry.

• Because the document registered in registry usually referred to

an easement, the above raised the issue of what was the effect in

land titles of the instrument referring to the easement. In many

cases, Land Registry Ontario tried to resolve the issue by having

the description say, "as in instrument (number), except the

easement therein."

Meaning (land titles, rights of way, "except the easement therein")

As shown below, where the register for the together-with land

describes the land by saying, "as in instrument (number), except

the easement therein," the Ontario Land Titles Act doesn't take

away a valid easement.99

Where the Ontario Land Titles Act gives the fee simple "together

with all rights," the Act can't show that the fee simple isn't subject

to such a right, by expressing "the contrary." This is because, in

the Act, the words, "together with all rights," aren't qualified by

any words like "unless the contrary is expressed on the register."

In any event, as said, the register for the subject-to land generally

governs, not the register for the together-with land. So, where the

register for the together-with land uses these words, they couldn't

have any effect.

99 As this article shows later in the comments on Syvan (2006), that case is no

authority for treating the words, "except the easement therein," as meaning that

the easement is invalid.



Where the register for the subject-to land describes the land by

saying, "as in instrument (number), except the easement therein,"

the words could mean that the easement doesn't exist. Under the

Ontario Land Titles Act, an easement is an overriding right, but

section 44(1) allows the register for the subject-to land to show

that the fee simple isn't subject to an overriding right, by

expressing "the contrary."100 So, if the words "except the easement

therein," meant that the easement wasn't valid, the register for the

subject-to land would validly show that the easement wasn't valid.

However, where the register for the subject-to land describes the

land by saying, "as in instrument (number), except the easement

therein," the words don't mean that the easement doesn't exist for

the following reasons:

• The words, "as in instrument (number), except the easement

therein," might have any of three meanings. (1) The words

might only mean, "as in instrument (number), except the that

any reference to an easement therein is not part of this

description." (2) The words might mean, "as in instrument

(number), except the easement therein, but this exception only

further qualifies the title, so that the title does not affect or

prejudice the enforcement of that easement." (3) The words

might mean, "as in instrument (number), except that the

easement therein is not an overriding right under paragraph 2 of

subsection 44(1) of the Land Titles Act."

• Meaning (2) may well have been what Land Registry Ontario

wanted. In effect, Land Registry Ontario would only have

wanted to say: "We're not guaranteeing the title to the

easement." As said, the Ontario Land Titles Act doesn't

guarantee title to an easement anyway. Therefore, the

qualification wouldn't have been needed and would legally have

made no sense. However, the words could still be interpreted as

an added (albeit unnecessary) qualification to the qualified titles

given on the government conversions. If so, the words wouldn't

mean that the easement didn't exist.101

• Meaning (3) isn't a proper interpretation of the words. As said,

where the Ontario Land Titles Act gives the fee simple, it does

so subject to overriding rights (like an easement), but the

register can show that the fee simple isn't subject to an

100 In the words, "unless the contrary is expressed on the register." Sections 45

¶2 (for first registration) and 87(b) (for a transfer) echo those words. 101 If the words were a qualification, the Ontario Land Titles Act should allow

the register to be rectified to remove the qualification, without requiring the

owner to apply for an absolute title under section 46(2).



overriding right, by expressing "the contrary." The words

should have their objective meaning. The purpose of the Act is

to protect an easement as an overriding right. The Act requires

the register to express "the contrary," but the words are too

ambiguous to amount to a clear expression to the contrary.

They're wholly unlike the government's standard words, which

refer specifically to the section and paragraph that lists an

overriding right and that isn't to apply. As said, the practice has

been for the register to show a right of way in the property

description, which misleadingly suggests that the Ontario Land

Titles Act guarantees a right of way, even though the Act can't

guarantee a right of way. This misleading practice led partly to

mistakenly using the words, "except the easement therein," and

that partly explains why the words were used. If the words

didn't have meaning (1), meaning (2) would be closer to what

the government wanted to say. And the words made no

exception for a right of way that was valid because the holder

was openly using it, which the streamlined search for a

government conversion couldn't have revealed.

• The above leaves meaning (1). It would have been more

prudent to use the words of meaning (1), because those words

were all that were needed to cover any concern. A poor choice

of words shouldn't govern the meaning. And putting the words

in the property description confirms that they only modify that

description.

If there were any doubt about the meaning of the words, "except

the easement therein," the government might amend the Ontario

Land Titles Act to confirm that those words, or similar words,

didn't mean that the register showed that the easement wasn't an

overriding right. Or the government might simply amend the Act

to say that, where the register used the words, "as in instrument

(number), except the easement therein," or similar words, it was to

be read as if it hadn't used those words.

Effect of qualifications on government conversions (land titles, rights of way)

Act (land titles, rights of way, qualifications)

The Ontario Land Titles Act allows first registration of land in the

system to be with an absolute, qualified or possessory title. The

last two make it easier to bring land into the system, but the

Ontario system never in practice uses a possessory title for that



purpose.102 The government's conversions of properties from

registry to land titles were first registrations with a qualified title.

A qualified title doesn't affect a right that the register appears to

except.103 The qualification could only limit the effect of the

conversion, and wouldn't cause the Ontario Land Titles Act to give

rights.

After a first registration with a qualified title, the registered owner

can apply for an absolute title.104 After a government conversion,

this absolute title is better than a title that began as an absolute

title. This is, because, as shown below, the standard government

words on a government conversion list both (1) overriding rights to

which the title isn't subject and (2) true "qualifications." A normal

first registration with an absolute title doesn't usually say that the

title isn't subject to those overriding rights. For that reason, Land

Registry Ontario calls the better absolute title, after a government

conversion, "land titles absolute plus," but the Ontario Land Titles

Act doesn't create this new kind of title.

Standard government words (land titles, rights of way, qualifications)

Every government conversion used the following standard words:

"Subject, on first registration under the Land Titles Act, to:

Subsection 44(1) of the Land Titles Act, except105

paragraph 11 [Planning Act],

paragraph 14 [dower],

provincial succession duties [in paragraph 1] and

escheats or forfeiture to the Crown [in paragraph 7].

The rights of any person who would, but for the Land Titles Act,

be entitled to the land or any part of it through length of adverse

possession, prescription, misdescription or boundaries settled by

convention.

Any lease to which subsection 70(2) of the Registry Act

applies."

102 See Giving key interests (land titles, principles). 103 See, for example, sections 46. 104 See, for example, section 46(2). 105 The text of government conversion procedures (dealt with below) contains an

earlier and different version of these words, but a sample register in those

procedures contains this version, and the actual registers seem to have contained

this version.



The standard government words on a government conversion list

both (1) overriding rights to which the title isn't subject and for

which the list doesn't therefore create true "qualifications," and (2)

true "qualifications." The words list the former in the first sub-

paragraph, beginning, "Subsection 44(1) of the Land Titles Act,

except..." They list the latter in the second and third sub-

paragraphs beginning, "The rights of any person..." and "Any

lease..."

As shown below, the standard government words don't affect how

a government conversion applies to a right of way.

As to (1) above (overriding rights to which the title isn't subject

and for which the standard government words don't therefore

create true qualifications), the standard government words took

advantage of the following underlined words in section 44(1), "All

registered land, unless the contrary is expressed on the register, is

subject to [listed overriding rights]."106

The overriding rights in section 44(1) include, "2. Any right of

way, watercourse, and right of water, and other easements." For

(1) above, the standard government words don't refer to either an

easement or paragraph 2, and don't express the contrary for an

easement. Therefore, (1) above, in the standard government

words, doesn't apply to an easement, and an easement is an

overriding right on a government conversion, unless the register

for the subject-to land expresses the contrary. An easement would

be an overriding right, even if it had been acquired by prescription

before first registration (but an easement can't be acquired by

prescription after first registration).107

The government intended the true qualifications to cover interests

that the government's searches couldn't show. The government's

searches could only show interests in the records, not interests that

a survey might show, or that an inspection of the land might show.

The only qualification that could apply to a right of way is in the

words: "The rights of any person who would, but for the Land

Titles Act, be entitled to the land or any part of it through length of

adverse possession, prescription, misdescription or boundaries

settled by convention." As to this:

• The qualification could show that a right of way acquired before

first registration through prescription remained valid, because it

applies where a person would be entitled "through ...

106 Therefore, when register shows that the land isn't subject to an overriding

right, that doesn't make title a qualified title. 107 Section 51.



prescription." The word, "land," must include an interest in

land, both because the Act so defines "land" and because

"prescription" can apply only to an easement, which is only an

interest in land.

• As said, an easement would be an overriding right, even if it

had been acquired by prescription before first registration.108

So a qualification to preserve an easement acquired through

"prescription" wasn't needed.

• Where the register for the subject-to land describes the land by

saying, "as in instrument (number), except the easement

therein," the words could seem to conflict with the qualification.

But, as shown above, the words don't mean that the easement

isn't an overriding right, and so there could be no conflict.

Failure to qualify for right openly used (land titles, rights of way, qualifications)

As this article shows, the Ontario 40-year rule can protect a right,

merely because a person was openly using the right.109 The

government's searches could only show interests in the records, not

such a right. Therefore, it would have been prudent to for the

standard government words to have shown that the land was

subject to such a right, but the words didn't do so.110 However, as

shown below, for a right of way (or other easement), the failure to

do so doesn't lead to the Act mistakenly taking away the right of

way (or easement), if it was valid on the conversion, on the ground

that the holder was openly using it.111

On a government conversion, the register might have dealt with a

right of way in the three ways set out below. (The register for the

108 Section 51. 109 See Exceptions (registry 40-year rule, principles). 110 If the standard government words had done so, they might have added, "Any

right to which subparagraph 113(5)(a)(iv) of the Registry Act applies." 111 However, the failure could have led to the Act mistakenly taking away some

other right that was valid, on the ground that a person had been openly using it.

After a conversion, the Ontario 40-year rule ceases to apply to the land. So,

after a conversion, a right can't be valid on the ground that the holder was openly

using it after the conversion. And, if a right was valid on that ground

immediately before the conversion, it could continue to be valid, even if a holder

didn't continue openly to use it after the conversion.



subject-to land usually governs, and the register for the together-

with land won't affect the result.112)

1. On the conversion, the register for the subject-to land might

have shown nothing for a right of way. The right of way would

have continued to exist without the missing qualification,

because a right of way is an overriding right, and so the missing

qualification wouldn't have been needed in this case.


have shown a right of way. The missing qualification could

only have ensured that a valid right of way continued, and

couldn't have preserved an invalid right of way. In any event,

as this article shows, the Act didn't guarantee that the right of

way was valid. So the missing qualification couldn't have been

relevant in this case.


have described the land by saying, "as in instrument (number),

except the easement therein." The easement would have

continued to exist without the qualification, because the above

words don't mean that the easement doesn't exist.113 So a right

of way would have continued to exist without the missing

qualification, because a right of way is an overriding right, and

the missing qualification wouldn't have been needed in this

case.

Results (land titles, rights of way)

Overall results for right of way on conversion (land titles, rights of way, results)

On a government conversion, the register might have dealt with a

right of way in the three ways set out below. (As this article

shows, the register for the subject-to land usually governs, and the

register for the together-with land won't affect the results.)

An analysis of the effect of the Ontario Land Titles Act, in dealing

with the whole effect of a mistake, raises four basic questions.114

For each of the three ways in which, on a government conversion,

the register might have dealt with a right of way, the answers to the

four basic questions are similar. The same four basic questions

112 See Register for subject-to land generally governs (land titles, rights of way,

practice). 113 See Section 44(1), "except the easement therein," (land titles, rights of

way)) 114 See Mistakes (land titles, principles).



must be answered both after a mistaken entry on a conversion, and

after a mistaken entry that rectifies the mistake.

The answers to the four basic questions are as follows:

(1) Effect of register. A mistake doesn't cause the Act wrongly to

give an invalid right of way, or to take away a valid right of

way. The specific reasons for this in each of the three cases

differ as shown below.

(2) Rectification. Any mistake on conversion or rectification

must be rectified, even if persons having interests in both the

subject-to land and the together-with land won't cooperate.

This is because the answer to the first question is that a

mistake doesn't cause the Act wrongly to give an invalid right

of way, or to take away a valid right of way. The land

registrar or the director of titles needn't hold a hearing before

rectifying in these cases.115

(3) Compensation. The land titles system doesn't have to

compensate for the loss of value to land caused by the mistake

over the right of way. This is because the answer to the first

question is that a mistake doesn't cause the Act wrongly to

give an invalid right of way, or to take away a valid right of

way.116

(4) Burden of loss. The land titles system needn't compensate for

loss of the value of an interest caused by the mistake, and so a

person, other than the land titles system, needn't bear the

burden of that compensation.

So, for each of the three ways in which, on a government

conversion, the register might have dealt with a right of way, the

land titles system must usually rectify the register, and needn't

compensate for the value of the right of way. This is so, whether

the mistake was on a conversion or is on a rectification.

As said, on a government conversion, the register might have dealt

with a right of way in the three ways. The following are the three

ways and they show the specific reasons for answer to question (1)

for each and the results for each.

115 See (2) Rectification (land titles, principles, mistakes). 116 As to sections 57(4.1) and R.R.O. 1990, Reg. 690, s. 64, see the footnote

under (3) Compensation (land titles, principles, mistakes). (Although these

give added compensation to an uninsured individual owner of land used for

residential purposes, who "has not received" an interest, they don't compensate

for not receiving right of way, or not receiving an interest free from a right of

way.)



1. Register showed nothing for right of way (land titles, rights of way, results)

The first of the three ways in which, on a government conversion,

the register might have dealt with a right of way, is that the register

for the subject-to land showed nothing for a right of way.

If, on the conversion, the right of way was valid, the answer to

question (1) is that the mistake didn't cause the Act wrongly to take

away the valid right of way. This is simply because the right of

way remained valid as an overriding right.117

If there'd been any later entry in the register before the register was

rectified, the answer to question (1) for that entry would be the

same, that the mistake wouldn't have caused the Act wrongly to

take away the valid right of way, because the right of way was an

overriding right.

If, when the register was rectified, the register for the subject-to

land were mistakenly to show an invalid right of way, the answer

to question (1) would be that the register wouldn't cause the Act

wrongly to give the right of way. This is because the Act can't

guarantee a right of way.118 But a judicial decision to rectify, or an

agreement, might bind a person.

So, on neither the conversion nor the rectification does the Act

limit the system in rectifying the register or put the land titles

system at risk of having to compensate for the loss of value to land

caused by the mistake over the right of way.

2. Register showed right of way (land titles, rights of way, results)

The second of the three ways in which, on a government

conversion, the register might have dealt with a right of way, is

that the register for the subject-to land showed that the land was

subject to the right of way.

If, on the conversion, the right of way was invalid, the answer to

question (1) is that the mistake didn't cause the Act wrongly to

give the invalid right of way. This is because the Act can't

117 See Section 44(1) ¶2 (land titles, rights of way). 118 See Section 39 (land titles, rights of way) and Sections 45 and 87, "together

with all rights" (land titles, rights of way).



guarantee a right of way, on either a first registration or a later

registered transfer or charge.119



same, that the mistake wouldn't have caused the Act wrongly to

give the invalid right of way, because the Act can't guarantee a

right of way.


land were mistakenly to remove a valid right of way, the answer to

question (1) would be that the register wouldn't cause the Act

wrongly to take away the right of way. If the right of way were

merely removed, it would have remained valid as an overriding

right. If the new entry used the words "except the easement

therein," they wouldn't have meant that the right of way was

invalid.120 But a judicial decision to rectify, or an agreement,

might bind a person.

Therefore, on neither the conversion nor the rectification does the

Act limit the system in rectifying the register or put the land titles



3. Register said "except the easement therein" (land titles, rights of way, results)

The third of the three ways in which, on a government conversion,

the register might have dealt with a right of way, is that the register

for the subject-to land described the land by saying, "as in

instrument (number), except the easement therein."

If, on the conversion, the right of way was valid, the answer to

question (1) is that the mistake didn't cause the Act wrongly to take

away the valid right of way. This is because the words, "except the

easement therein," don't mean that the right of way was invalid.121

Then, the mistake wouldn't cause the Act wrongly to take away the

valid right of way, because the right of way would have remained

valid as an overriding right. (If the words appeared only in the

119 See Section 39 (land titles, rights of way) and Sections 45, 87 and 93,

"together with all rights" and subject to encumbrances (land titles, rights of

way). 120 See Section 44(1), "except the easement therein," (land titles, rights of

way). 121 See Section 44(1), "except the easement therein," (land titles, rights of

way).



register for the together-with land, it could also be because the

register for the subject-to land governs.)



same, that the mistake didn't cause the Act wrongly to take away

the valid right of way, because it remained an overriding right.


land were mistakenly to show an invalid right of way, the answer

to question (1) is that the register wouldn't cause the Act wrongly

to give the right of way. This is because the Act can't guarantee a

right of way, on either a first registration or a later registered

transfer or charge. But a judicial decision to rectify, or an

agreement, might bind a person.

Therefore, on neither the conversion nor the rectification does the

Act limit the system in rectifying the register or put the land titles



Land titles conversions from registry

Electronic registration (land titles conversions)

Electronic land registration required the Ontario government to

convert millions of properties from registry to land titles. This

article focusses on that conversion.

In 1971, the Ontario Law Reform Commission had sensibly

proposed that Ontario use a streamlined process to convert registry

properties to land titles, and assume a risk over compensation.

This was sensible, because a system should rely on good land titles

rectification and compensation to extend the benefit of land titles

or promote efficiency.122 In that way, savings in the government's

cost of searches should have more than covered the cost of

compensating a few owners for any mistakes. It would be natural

for there to have been some mistakes, and Ontario would accept a

trust to compensate for those mistakes.

Normal land titles procedures (land titles conversions)

Under the Ontario Land Titles Act, some land goes automatically

into land titles when a Crown grant is issued. Other land goes into

122 Ruoff, An Englishman Looks at the Torrens System. He gave, as one vivid

example, relying on only meagre evidence to put land into land titles in England,

after the bombing in the second world war had destroyed properties and records.



land titles through a process called first registration. A conversion

from registry to land titles is a kind of first registration.

Under the Ontario Land Titles Act, there are three kinds of title on

a first registration: absolute, qualified and possessory. The last two

make it easier to bring land into the system, but the Ontario system

never in practice uses a possessory title for that purpose.

For an absolute title, the land registrar normally examined the title

in accordance with regulations.123 The regulations imposed

rigorous requirements for an application for first registration. For

example, they required a reference plan, notice to other persons, an

affidavit, a typewritten abstract of title, a copy of the original

Crown grant, a typewritten title tree, a copy of every instrument,

certificates of a solicitor and surveyor, and a hearing on an

objection.

Despite the above, the Act says that, if the title is open to

objection, but is one under which the "holding" won't be disturbed,

the system can either accept it, or require the applicant to apply for

the court's acceptance.124

Where, "on the examination of the title," the system has a

reservation, it can except a possible interest from the guarantee of

title, and the title becomes a "qualified title."125

Obviously, subject to the above, when land goes from registry into

land titles through first registration, the title must depend on the

law, apart from the Ontario Land Titles Act and, in particular, the

Ontario 40-year rule in the Ontario Registry Act. The above

procedures confirm that, subject to the above, the Ontario Land

Titles Act requires a full search of title, including one that observes

the Ontario 40-year rule.

Government conversion procedures, effects (land titles conversions)

Legal framework (land titles conversions, procedures, effects)

As the Ontario Law Reform Commission had sensibly proposed in

1971, Ontario used a streamlined process to convert registry

properties to land titles without a full search, and assumed a risk

over compensation. In doing so, Ontario assumed a trust to follow

123 Ontario Land Titles Act, section 41. "The examination of a title shall be

conducted in the prescribed manner..." 124 Ontario Land Titles Act, section 41 ¶3. 125 Ontario Land Titles Act, section 37.



good land titles principles of rectification and compensation, so

that individual owners wouldn't bear the loss of any mistakes

caused by the streamlined process. Instead, savings in the

government's cost of searches should have more than covered

compensation for any losses.

As shown below, a document entitled Implementation Procedures

-Title, as amended from time to time, contained the streamlined

process. This article refers to that document as the government

conversion procedures. As shown below, the procedures may not

have complied with the legal framework for those procedures.

Section 32 of the Ontario Land Titles Act provided for the

government's streamlined procedures. The section says:

32. (1) A land registrar, with the concurrence of the Director of

Titles, may, subject to the regulations or the orders made under

subsection (4), register under this Act any land in his or her land

titles division to which the Registry Act applies...

(3) A parcel of land may be registered under this section with a

title qualified as to the location of the boundaries and the extent

of the parcel.

(4) The Director of Titles may make orders governing the

registration of land under subsection (1) and the procedure to be

followed in connection with the registration, including the notices

to be given to owners and encumbrancers.

(5) An order made by the Director of Titles under subsection (4)

is not a regulation within the meaning of Part III (Regulations) of

the Legislation Act, 2006.

It seems odd that section 32(3) allows a qualification only for the

description of the land, while the key section 32(4) doesn't mention

qualifications. The government conversions were subject to a

number of standard qualifications, including one for

"misdescription." Regulations impose strict requirements for a

description of land, but section 32(3) relieves the system from

complying with those regulations. Despite the regulations, section

140(2) of the Act says, "The description of registered land is not

conclusive as to the boundaries or extent of the land."

Although section 32(4) showed that the director could make orders

governing the government conversion procedures, there was only

one formal director's order under section 32.126 This was made in

1998 and only said: "I, Ian Veitch, Director of Land Registration,

126 Order of the Director of Land Registration, Subsection 32(4) of the Land

Titles Act, dated December 18, 1998, No. DLRO-98-01.



hereby order that the procedure to be followed for governing the

registration of lands under subsection 32(1) is contained in a

document entitled Implementation Procedures -Title and its

amendments, from time to time." As section 32(4) required the

director personally to make a formal order, the 1998 order seems

unduly informal.

Even though section 32 says that the director's order isn't a

regulation under the Legislation Act, 2006, that doesn't mean that it

needn't be made available to the public. Until recently, Land

Registry Ontario doesn't seem to have made either the director's

order, or the Implementation Procedures -Title, freely available to

the public.

The purpose of a director's order was mainly to exempt the system

from requirements of the Ontario 40-year rule. The

Implementation Procedures -Title are in a large document that

goes well beyond that purpose. Teranet Land Information Services

Inc. prepared it and it doesn't show that the director of titles

approved it. It's essentially a manual for the people who were to

put the title information into the electronic database.127

The Implementation Procedures -Title usually don't specifically

relieve the system from a duty to ensure that the examination of

title conforms to the Ontario 40-year rule. But, if complying with

a procedure in the Implementation Procedures -Title had that

effect, it must have relieved the system from the duty. However,

any other policy (outside the Implementation Procedures -Title or

a procedure in it) couldn't have relieved the system from the duty.

When the streamlined process changed, the government conversion

procedures weren't always updated. As a computer program

reflected the streamlined process, perhaps the program did things

that the Implementation Procedures -Title didn't authorize. And

administrators no doubt developed practices that the

Implementation Procedures -Title didn't cover.

In retrospect, it might have been better if section 32 had allowed

the director administratively to make the conversions, without

making formal orders (which is what the director in effect did). In

any event, it might have been better if the director had been open

about the government conversion procedures. In that way, the

procedures would rightly have been subject to public oversight;

127 A Glossary of Terms shows that "certifying title" means guaranteeing title in

accordance with an agreement between the government and Teranet. These

comments assume that the agreement doesn't contain anything else that might be

part of a director's order under section 32 of the Ontario Land Titles Act.



lawyers and the public might have provided valuable input into

them; and a person whose title they affected would understand how

that happened and perhaps might even have guarded against it.

Legal effect (land titles conversions, procedures, effects)

The legal effects of the above legal framework for land titles

conversions are as follows:

1. Effect of mistake. A first registration on a government

conversion gave the normal guarantee of title, with the added

benefit of, and subject to the qualifications in, the standard

government words, and to any added qualifications. Subject to

the above qualifications, if a first registration with a qualified

title on a government conversion led to a mistaken entry in the

register, the government conversion procedures couldn't mean

that there hadn't been a mistake under the registry principles in

this article, or affect the results of the mistake under the land

titles principles in this article.

The legal framework for land titles conversions doesn't change

the Ontario 40-year rule in the Ontario Registry Act. If an entry

on a government conversion could mistakenly have taken away

a right of way that was valid under the Ontario 40-year rule, the

fact that the conversion complied with the government

conversion procedures couldn't have invalidated the right of

way.

The legal framework for land titles conversions deals only with

how the first registration is made, not how the Ontario Land

Titles Act deals with the results of a mistaken entry. How the

first registration came to be made couldn't mean that the entry

might not have been mistaken, or affect the answers to the four

basic questions set out in the principles. If a person had a right

to land titles rectification or compensation for the entry, how the

first registration came to be made couldn't take away that right.

2. Administration. Subject to the above, the Act may put a

general legal duty on the system to see that a procedure for a

first registration is followed. If so, the system should normally

have ensured that the examination of title conformed to the

Ontario 40-year rule. But the government conversion

procedures could have relieved the system from this duty.

The government conversion procedures might not have been

valid; or, if valid, they might not in fact have relieved the

system from a duty; or, if valid and effective, the system might



not have complied with them. As said in 1, these issues couldn't

affect how the Ontario Land Titles Act dealt with a mistaken

entry. They could only give any remedy against the Crown for

a failure to carry out a duty.128

In retrospect, there was probably no need for the Act to put a

legal duty on the system to see that a procedure was followed.

The Act should probably have allowed the system to determine

its procedure, in light of administrative costs and risks of having

to compensate.

General comments (land titles conversions, procedures, effects)

The Appendix, government conversion procedures, general

summary at the end of this article summarizes the key procedures

dealing with the search in registry.

With few exceptions, Ontario has converted, to land titles, all land

in Ontario that was in registry. However, this article includes the

summary because the government conversion procedures are

generally unknown to the public and lawyers. They help to explain

how the government conversion procedures affected rights of way.

If the procedures had mistakenly missed an interest that a search

under the Ontario 40-year rule would have found, the procedures

could help to explain how the mistake arose. Where the system

couldn't convert a registry property to land titles, the procedures

could help to explain why. For such a large undertaking that

affected peoples' property rights, the public has the right to know

about the procedures.129

The following are general comments on the government

conversion procedures:

1. Awareness of risk. If a government conversion led to a

mistaken entry in the register, the procedures couldn't affect the

128 This article doesn't deal with any remedy against the Crown, under the

Ontario Proceedings Against the Crown Act (see section 16(2) of the Ontario

Land Titles Act), for a failure by Land Registry Ontario to carry out a duty,

under the Ontario Land Titles Act or the government conversion procedures.

(As to the comment on this section in Syvan (2006), the court's words must have

meant, "In my opinion, and contrary to the submission of counsel for the Crown,

section 16(1)(2) would exclude from section 16(1) any claim against the Crown

on the basis of vicarious liability.") 129 Knowing about the procedures earlier could have led to a better

understanding of the land registration systems in the past. As shown in an

earlier footnote, this article doesn't deal with any remedy against the Crown for a

failure by Land Registry Ontario to carry out a duty, under the Ontario Land

Titles Act or the government conversion procedures.



results of the mistake under registry and land titles principles.

The general government conversion procedures show that the

system was acutely aware of this risk. For example, the

procedures say, "any loss caused as a result of errors or

omission, if any occurs, will be compensated through the Land

Titles Assurance Fund."130

2. Generally cautious approach. On a conversion, the Ontario

Land Titles Act usually guaranteed the ownership (that is, who

owned the fee simple). It also usually guaranteed that the

ownership was subject only to the interests shown on the

register, but not that those interests were valid.131 So, for such

an interest, the government conversion procedures usually leant

towards showing an interest on the register, even if the interest

might not be valid.132 The procedures would rely on it being

convenient later to determine whether to remove an invalid

interest. The government conversions led to many mistakes in

over-cautiously showing possible interests that had ceased.

This led to a frequent need to clean up the registers after the

conversions.

3. Two sub-rules in Ontario 40-year rule. Because the Ontario

40-year rule has two sub-rules, the 1981 changes could have

used a minimum period of, say, at least 10 years for the chain of

title, and still kept the period of 40 years for the registration

sub-rule. This would have resulted in two kinds of search, first

the detailed search for the chain of title, usually for a shorter

period of at least 10 years, and then a search only for defined

registrations of an interest for 40 years. (See Two sub-rules

working together (registry 40-year rule, principles).)

Remarkably, the government conversion procedures used two

kinds of search in a similar way. The detailed search (mainly

for ownership) under the 3-Deed/10-Year Rule was often for 10

years (and very rarely for more than 40 years), and the search

for other interests was for 40 years. So the government

conversion procedures are a striking example of how the

Ontario 40-year rule could logically have two sub-rules.

130 See a part of the government conversion procedures headed Background, 5

Land Titles Conversion (LTCQ). 131 The Act wouldn't even guarantee an existing mortgage or more permanent

lease (see Preserving possible interests (land titles, principles). 132 For example, the government conversion procedures show that, even though

a notice of purchase agreement under section 22 of the Ontario Registry Act had

expired, it was carried forward.



The courts had in effect recognized that the Ontario 40-year rule

had two sub-rules in 1953, and the appeal cases in the 1990s

confirmed this. The 1995 Article explained the sub-rules, and

even suggested how the Ontario 40-year rule might use the two

sub-rules to shorten the search.133

4. Ontario 40-year rule, period. The period for a normal search

for a first registration in land titles starts by going back 40 years

from the time of the first registration (see When interest given

(registry 40-year rule, principles)). The government

conversion procedures rightly accepted this, by basing the

period on the date on which the search was started.134

However, in its later policies on easements, Land Registry

Ontario took the mistaken legal position that the Ontario 40-

year rule gave a person an added period after the 40 years to

register a notice of claim, until a conflicting claim of a

purchaser in good faith and for valuable consideration of the

land was registered.135 The logical result would have been that

the normal search under the Ontario 40-year rule should have

found such a past registered conflicting claim, and then gone

back more than 40 years from that claim.136 Land Registry

Ontario didn't take the position that the conversion itself could

be such a registered conflicting claim.

5. Rectification. The government conversion procedures apply

only on a conversion (which is a first registration), and wouldn't

apply to a rectification. This article concludes that, where the

register dealt mistakenly with a right of way on a government

conversion, neither the conversion nor a rectification puts the

land titles system at risk of having compensate for the loss of

value to land caused by the mistake over the right of way. In

light of that, Ontario might consider amending the Ontario Land

133 After the government conversion procedures became available to the writer

in 2012, they were a revelation to the writer, in showing that the government

conversion procedures had already adopted a two sub-rule idea and put it into

use. 134 See the Appendix, government conversion procedures, general summary

at the end of this article (the 40-year date was based on January 1 in the year of

the search). 135 Under Land Registry Ontario Bulletin 2007-02, option 4 allows the owner of

the together-with land to have the property descriptions amended to show an

easement, without the cooperation of the owner of the subject-to land. It does so

if, had the property remained in the registry system, the owner of the together-

with land "could have registered a notice of claim under section 113(2)(b) of the

Registry Act," on the ground that there hadn't been any "conflicting

registrations." 136 See Notice of claim (registry 40-year rule, principles).



Titles Act to confirm that it had the power use a streamlined

process for a rectification.137

Government conversion procedures, rights of way (land titles conversions)

Original procedures (land titles conversions, procedures, rights of way)

• Issue (original procedures)

The search would almost always have shown a possible easement

and it would often have been more than 40 years old, and so raised

issues under the Ontario 40-year rule. As said, the government

conversion procedures usually leant towards showing an interest

on the register, even if the interest might not have been valid.

However, Land Registry Ontario must mistakenly have thought

that, if the register showed an easement, the Act guaranteed that

the easement was valid.138 So Land Registry Ontario would have

thought that it was risky for the procedures to lean towards

showing an easement, on the ground that it would have to

compensate if the register mistakenly showed an easement.

• Possible solutions (original procedures)

In order to resolve the issue, Land Registry Ontario might safely

still have leant towards showing the easement, by using the

government conversion procedures to add a qualification in the

register. The qualification would have said that the first

registration was subject to any right based on the easement not

having been valid before the conversion. Land Registry Ontario

might even have added a general qualification to that effect to the

standard government words.

Or, instead of the above, Land Registry Ontario might safely have

leant towards not showing the easement on the register in the

following three ways:

1. The government conversion procedures could safely have not

shown the easement, without affecting a valid easement,

because an easement is an overriding right.139

137 Or the Act might confirm that a land registrar could rely on a statement of a

lawyer, or even allow a lawyer to make a statement based on a streamlined

search. 138 For some reasons for this, see Practice for rights of way (land titles, rights of

way). 139 See Section 44(1) ¶2 (land titles, rights of way).



2. The government conversion procedures might have said that the

register should show an easement only if it was created within

the 40-year period, or a notice of claim had been registered for

it within that period. This would simply have been part of the

procedures, rather than purporting to show that no other

easement was valid.

3. The government conversion procedures might have said that,

where the property description was to use the words, "as in

instrument (number)," the register would use safe words. For

example, the words might have been, "as in instrument

(number), except that any reference to an easement therein is

not part of this description (but without prejudice to any

easement as an overriding right under paragraph 2 of subsection

44(1) of the Land Titles Act)."140

• Actual solution (original procedures)

Instead of resolving the issue in either of the above safe ways, the

government conversion procedures tried to tell the searcher what

the Ontario 40-year rule meant and how to comply with it.141 This

rightly favoured an interpretation that the easement was usually

valid.

As to this interpretation, one strong statement in the procedures

was, "If a right-of-way to a person (for example, a mutual

driveway) is mentioned in a transfer within the 40 year search

period but the actual right-of-way was created prior to the 40-year

search period and has not been renewed, carry the right-of-way."

Another strong statement was, "If the easement/right-of-way is

created in a document registered prior to the 40-year search period

but is conveyed in a deed with a legal description within the 40-

year search period, bring it forward."

The procedures were ambiguous in other places but, on balance,

they didn't show that the above easement was usually not valid

under the Ontario 40-year rule, unless a notice of claim had been

registered.

140 As to these words, see Section 44(1), "except the easement therein," (land

titles, rights of way). 141 The government conversion procedures contained a separate part headed

Implementation, 3 Data Collection—Land Titles Conversion, 3.6 Dealing

with Easements. The entire part is now dated November 24, 1993, suggesting

that it hadn't been changed since the beginning of the process for land titles

conversions.



New policies (land titles conversions, procedures, rights of way)

• Issue (new policies)

As said, the original government conversion procedures had

favoured an interpretation that an easement that was more than 40

years old was usually valid. It was only in the early 1990s that the

appeal courts decided the cases on 1981 changes to the Ontario 40-

year rule and the cases led to conflicting interpretations. The

major comments on the cases appeared in 1994142 and the

conflicting interpretations had emerged by 1996.143 Parts of the

government conversion procedures were added in 1998 for

converting a property in two phases, and they suggested that

procedures raised added issues for easements.144 In the meantime,

Land Registry Ontario may have become aware of an apparent risk

in describing the land by saying, "as in instrument (number),"

where the instrument referred to an easement. In any event, by no

later than 1999, Land Registry Ontario must have felt that it no

longer wished to follow the original government conversion

procedures.145 By then, Land Registry Ontario may also have

begun to find that there could often be other problems with rights

of way.146

• Solution (new policies)

When Land Registry Ontario came to feel that that it no longer

wished to follow the original government conversion procedures, it

would already have converted some properties. Land Registry

Ontario must have decided that it could do nothing to recover from

what it thought had been mistakes in previous conversions.

In 1999, Land Registry Ontario issued a memo saying what an

owner had to do after a conversion in order to have an easement

shown in the registers.147 This must also have shown what had

become Land Registry Ontario's new policy for conversions.

142 A Searching Analysis: Recent Ontario Jurisprudence on the Investigation of

Titles, Canadian Bar Association - Ontario, Continuing Legal Education, 1994. 143 See General background. 144 These parts are those dealing with Parcelized Day Forward Registry (PDFR)

and Registry to Land Titles (R2LT). Section 83(3) of the Ontario Registry Act

allowed a first phase, which was a new register in in the registry system, and

section 83(4) allowed the new register to show an easement. 145 In 1999, Land Registry Ontario's memo to land registrars EM1999-09

referred to "many questions raised recently" over easements. 146 See Other problems with rights of way (land titles, rights of way, practice). 147 Land Registry Ontario memo to land registrars EM1999-09 (which replaced a

memo issued a few days earlier).



However, it seems that the new policy didn't become part of the

government conversion procedures. The new policy was based on

a mistaken interpretation that an easement was usually invalid, if it

was more than 40 years old and a notice of claim hadn't been

registered.148

The new policy for an easement, which was more than 40 years old

and for which a notice of claim hadn't been registered, must have

been as follows:

1. Where the registers could show nothing for such an easement,

the registers would show nothing.

2. Where the registers in the future described the land by saying,

"as in instrument (number)," and that instrument referred to

such an easement, the registers would use the words, "as in

instrument (number), except the easement therein," or similar

words.

Ramsay (2005) and after (land titles conversions, procedures, rights of way)

Ramsay (2005) showed that most easements, which Land Registry

Ontario's new policy had treated as invalid, had in fact been valid.

By then, Land Registry Ontario had converted more properties

based on the above new policy. So Land Registry Ontario would

have thought that the words, "except the easement therein," had

wrongly taken away valid easements, and that the land titles

system would have had to compensate for the new mistakes. (In

fact, the words wouldn't have put the land titles system at risk of

having to compensate for the loss of value to land caused by the

mistake.149)

Ramsay (2005) led to the 2006 changes to the Ontario 40-year rule

and to Land Registry Ontario Bulletin 2007-02.150 The bulletin

shows that Land Registry Ontario mistakenly interpreted the 2006

changes to the Ontario 40-year rule as wholly and retroactively

reversing Ramsay (2005).151 Under this interpretation, the 2006

148 See General background and see Interpretation (registry 40-year rule,

principles). 149 See 3. Register said "except the easement therein" (land titles, rights of

way, results). 150 At first, Land Registry Ontario's memo to land registrars EM2006-01 had

accepted the decision 151 The bulletin says: "Where the creating document for the easement has been

registered for over 40 years, a registered Notice of Claim may only be valid if

there are no conflicting claims ... With the enactment of these amendments, the

law with respect to easements under the Registry Act has been clarified to reflect

the Ministry's consistent interpretation of the amendments originally made in



changes to the Ontario 40-year rule would have relieved the land

titles system from what Land Registry Ontario thought would have

been a liability to compensate for the loss of value to land caused

by the past use of words, "except the easement therein."

Bulletin 2007-02 must have shown what Land Registry Ontario's

new policy for conversions was. However, it seems that this

policy again didn't become part of the government conversion

procedures.

Results (land titles conversions, procedures, rights of way)

The results of the above are that the government conversion

procedures and later policies for easements show that Land

Registry Ontario has taken the following legal positions:

• Where an easement in the registry system was more than 40

years old and a notice of claim hadn't been registered, Land

Registry Ontario originally and rightly took the legal position

that the easement was usually valid under the Ontario 40-year

rule, but later took the mistaken legal position that it was

invalid.

• Where the land titles register shows an easement in the property

description, Land Registry Ontario has always taken the

mistaken legal position that the Ontario Land Titles Act

guarantees that the easement is valid.

• Where the land titles register uses the words, "as in instrument

(number), except the easement therein," or similar words, Land

Registry Ontario takes the mistaken legal position the Ontario

Land Titles Act guarantees that the easement is not valid.

Registry 40-year rule, principles

Background (registry 40-year rule, principles)

Apart from registration, whether a person has an interest in land

depends on its history. Originally, only the current owner would

have held most of this history, in the title documents (or have had

access to that history).

1981." The options in the bulletin confirm this by giving the same options for

conversions both before and after the 2006 changes to the Ontario 40-year rule

took effect on December 20, 2006. As to why this interpretation was mistaken,

see Background (registry 40-year rule, principles).



Over many years, lawyers developed common sense standards for

how much of the history a seller had to show to a buyer. The seller

had to show a "good chain of title" over a limited period. The

standards didn't affect the title, but courts accepted the standards

when deciding issues among parties and lawyers. There was still a

risk of buyer's title being defective.152 So the seller had to resolve

every possible defect that chain of title over the limited period

showed to a person searching with reasonable skill and care.

A registry system can allow a buyer easily to see more of the

history and that could have led buyers to make longer searches. To

avoid this, a marketable title law, like the Ontario 40-year rule,

allows buyers to continue to use the former standards. The law

does so by actually validating a person's title to an interest, if the

person has a good chain of title to the interest over a limited period

(see Giving an interest).

Ontario pioneered marketable title laws, in The Investigation of

Titles Act, 1929. The United States Uniform Marketable Title Act

was based partly on this Act (and on Acts in Michigan and

Wisconsin).153 The Ontario 40-year rule is now in Part III of the

Ontario Registry Act.

This article covers the Ontario 40-year rule in less detail, because

the writer's earlier articles have covered it more fully.154 In

particular, the 1995 Article shows how the reasons in the major

court decisions had confirmed the principles.155 This article does

however bring those earlier articles together, express the principles

better and update those articles.

The main conclusions of the 1995 Article were as follows. First,

the Ontario 40-year rule validates title to a registered interest if it

meets two tests, contained in what this article calls the chain of

title sub-rule and the registration sub-rule. Second, the validation

occurs automatically as soon as the two tests are met, even though

there's no dealing then. Most other conclusions were built around

these main conclusions. The rule shouldn't be interpreted in a

technical manner. Its terms are more a guide to the logic of its

152 But, where a buyer was bound by an interest only if the buyer had "notice" of

it, the standard could lead to the buyer having no notice. 153 See the Prefatory Note to the Uniform Marketable Title Act. 154 See especially the 1995 Article, and also the 2006 Article and 2007 Article. 155 The 1995 Article dealt with the Ontario Court of Appeal decision in Fire v.

Longtin (1995). That case later went to the Supreme Court of Canada, but that

court simply adopted in their entirety the reasons of the Ontario Court of

Appeal.



remarkable concepts than precise provisions. And all the Court of

Appeal decisions have shown great insight.

Electronic land registration required the Ontario government to

convert millions of properties from registry to land titles. The title

to those properties depended on, among other things, the Ontario

40-year rule. For many properties with a right of way, Land

Registry Ontario based the conversion on mistaken legal positions.

One mistaken legal position was that, under the Ontario 40-year

rule, a right of way was usually invalid, if it was more than 40

years old and a notice of claim for it hadn't been registered within

the 40-year period.156

In Ramsay (2005), and after most of the conversions, the Ontario

Court of Appeal confirmed that the above legal position had been

mistaken.

In 2006, Ontario changed the Ontario 40-year rule, to try to

confirm Land Registry Ontario's mistaken legal positions. For the

reasons below, Land Registry Ontario takes the mistaken legal

position that the 2006 changes retroactively relieved the land titles

system from having to compensate for a past mistake over a right

of way.157

Land Registry Ontario's legal position is mistaken, for two reasons.

(1) The 2006 changes to the Ontario 40-year rule couldn't logically

have invalidated a right of way that was more than 40 years old, if

the chain of title for the 40-year period showed the right of way

(see Two sub-rules working together). (2) The 2006 changes to

the Ontario 40-year rule weren't retroactive in a way that could

relieve the land titles system from having to compensate for a past

mistake over a right of way (see Retroactivity).

As this article shows earlier, since the Ontario Land Titles Act

doesn't guarantee a right of way, and since a right of way is usually

an overriding right, the title to a right of way that existed on a

conversion could forever depend on the results of a full 40-year

search back from the date of conversion.158

156 See Results (land titles conversions, procedures, rights of way). 157 See Ramsay (2005) and after (land titles conversions, procedures, rights of

way). 158 See Background (land titles, principles). Because the Ontario Registry Act

ceases to apply to the land on first registration, the Ontario Land Titles Act

wouldn't allow a chain of title that included instruments registered in both

registry and land titles, or in land titles alone, to validate the right of way.



Purposes (registry 40-year rule, principles)

The main purposes of the Ontario 40-year rule or other marketable

title law are as follows. To validate title, based on a good chain of

title over a limited period, and based on a search made with

reasonable skill and care. To ensure that this limited search

preserves every valid interest. To give the holder of an interest a

right to preserve an interest by registering a notice of the interest.

And to confirm that an interest not preserved by the limited search

doesn't affect the title. These main purposes reflect the common

sense of the common law in requiring a good chain of title over a

limited period.

The purposes of both the rule or law and a land titles system are to

promote commerce, by making land transactions easier. But,

unlike a land titles system, where the rule or law causes a valid

interest to end, the rule or law usually doesn't compensate for the

loss. So the purpose of the rule or law isn't to promote commerce,

where that would unjustly go against the purpose to preserve every

valid interest, and the Ontario Court of Appeal has accepted this.159

The rule and law very rarely cause a valid interest to end, both

because it's rare for any title defect over the period not to be

resolved, and because the search requires skill and care.

The Ontario 40-year rule probably requires an overly long and

demanding search of the chain of title.160 So the 1981 changes to

the Ontario 40-year rule could have allowed a less demanding

search, and still served the purpose to preserve every valid interest

(see Two sub-rules working together). And the streamlined search

under the government conversion procedures should almost always

have shown every valid interest.

In light of the above, on a government conversion from registry to

land titles for electronic registration, the Ontario 40-year rule

would very rarely have caused a valid right of way that was more

than 40 years old to have ended. This was so even under the 2006

159 Ramsay (2005) confirms this: "the Act seeks to promote commercial

certainty; to simplify the title search process; and, to this end, to eliminate stale

claims ... [not those] still in active use... An interpretation that would invalidate

claims that are clearly described and apparent within the forty-year period

search is one to be accepted only if the statute effects that result in the clearest of

terms." Because, under the common law, the chain of title didn't usually affect

the true title, the law leant towards requiring the seller to resolve every issue.

The official comments in the Uniform Marketable Title Act also show that it

tries to preserves every valid interest. 160 Under the U.S. Uniform Marketable Title Act, the minimum period is now 30

years. In England, under section 23 of the Law of Property Act 1969, the

minimum period is now 15 years.



changes (see Background). Land Registry Ontario came to use

new policies for dealing with an easement that did lead to the new

land titles register mistakenly not showing a valid right of way.161

But that didn't invalidate the valid right of way, or lead to the land

titles system having to compensate for the loss of value to land

caused by the mistake over the right of way.162

One interpretation of the Ontario 40-year rule could only achieve a

limited purpose, that is, to make it easier for those who acquire

interests to find other interests through notices of claim (see

Interpretation). This would conflict with the main purposes of the

Ontario 40-year rule, which require a search to be made with

reasonable skill and care, which are to ensure that a search for a

limited period preserves every valid interest, and which are merely

to give the holder of an interest a right to register a notice of claim.

Interpretation (registry 40-year rule, principles)

The interpretation of the Ontario 40-year rule must be guided by

the rule's purposes and history; must go back to the basic logic of a

good marketable title law; and must reconcile the Ontario 40-year

rule with that logic.

Ontario pioneered marketable title laws, in The Investigation of

Titles Act, 1929. This Act had some logical defects and they led to

two Ontario Court of Appeal cases in 1953. The United States

Uniform Marketable Title Act was based partly on the Ontario Act.

This is a highly refined and logical statement of the principles of

the Ontario Act, with some small additions, but the Ontario 40-

year rule hasn't followed it. Despite that, its principles must be

excellent support for the interpretation of the Ontario 40-year rule.

Ontario made major changes to the Ontario 40-year rule in 1981,

which moved the rule further away from the basic logic. This led

to four Ontario Court of Appeal cases in the early 1990s, which

confirmed the principles. In 1995, the Supreme Court of Canada

adopted the reasons of the Ontario Court of Appeal in the fourth

case, Fire v. Longtin (1995). In 2005, a fifth Ontario Court of

Appeal case again confirmed some of the principles, Ramsay

(2005).163 In 2006, Ontario changed the Ontario 40-year rule in an

unsuccessful attempt retroactively to reverse Ontario Court of

161 See New policies (land titles conversions, procedures, rights of way). 162 See Results (land titles conversions, procedures, rights of way). 163 The 1995 Article deals with the four cases. The fifth case is Ramsay (2005),

with which this article deals.



Appeal decisions. In retrospect, the 1981 changes to the Ontario

40-year rule were a fiasco.

The above has led to two main interpretations of the Ontario 40-

year rule. One interpretation is a judicial interpretation and is the

interpretation of the courts, some writers, this article and

(intuitively) practising lawyers. It favours preserving older

interests, reflects the purposes and logic of the Ontario 40-year rule

and conforms to the highly refined Uniform Marketable Title Act.

The judicial interpretation regards a good chain of title as

fundamental. It focusses more on how the Ontario 40-year rule

can validate title, than on how the rule might extinguish title.

The other interpretation is a political interpretation and is the

interpretation of Land Registry Ontario and the Ontario Bar

Association.164 It tries to favour those who acquire interests, by

trying severely to limit the period of the searches. The political

interpretation largely ignores the "good and sufficient chain of

title" that the Ontario 40-year rule, like other marketable title laws,

must and does require. It focusses on how Ontario 40-year rule

might extinguish title.165

Two major situations show the differences between the two

interpretations. The first situation is where, within the 40-year

period, there are conflicting transfers of ownership. The judicial

interpretation would sensibly require a search back in time to

resolve the conflict. If the Ontario 40-year rule had validated the

title of one transferee over that of the other as of an earlier date, the

judicial interpretation would sensibly accept that as resolving the

conflict (as shown under Past events). The judicial interpretation

wouldn't usually cause the search to go back to the Crown grant.

The conflicting transfer of the other transferee wouldn't

immediately affect the title. It could do so only if the rule, in a

future 40-year period, resolved the issue differently, by giving an

interest to the other transferee, free from the interest of transferee,

whose title the rule had validated.166

164 For Land Registry Ontario, the interpretation is mainly in its Bulletin 2007-

02. For the Ontario Bar Association, the interpretation is mainly in the 1996

Consensus Position and in Craig R. Carter, Title Searching: The 40 Year Rule as

it relates to Easements, The Law Society of Upper Canada, The 2nd Annual

Real Estate Law Summit, April 6, 2005. 165 The 1996 Consensus Position was that title depended on the common law of

relative titles and that the Ontario 40-year rule could only extinguish an interest. 166 Section 3 of the Uniform Marketable Title Act says that a "person who has an

unbroken record chain of title to real estate for 30 years or more has a

marketable record title to the real estate..." It doesn't try to limit the search to



In the first situation, the political interpretation would insist on

resolving the conflict within the 40-year period. It could propose

that the claim of the transferee under the oldest transfer within the

40-year period was the better. However, as time passed, that oldest

transfer would disappear below the 40-year horizon, and could

cause a transfer to a conflicting transferee to become the oldest

within a new 40-year period. Then, the title would immediately

flip between the claimants under the conflicting transfers, and

could do so every time a transfer disappeared below the 40-year

horizon. No one could accept such an unstable title.167 It wouldn't

rationally solve the problem to say that the rule then simply

extinguished the fee simple interest altogether, so that the land

reverted to the Crown.168

In effect, by insisting on resolving the conflict within the 40-year

period, the political interpretation could only use theories that were

unworkable or unrealistic. In this situation, the words of the

Ontario 40-year rule say, in effect, that there must be a solution

within the 40-year period to a problem that the chain of title raises,

when logically there can't be one, and the words try to do

something that legislation can't do.169 The courts wouldn't accept

the fixed period and would sensibly allow a search back in time to resolve a

conflict. 167 The 1996 Consensus Position proposed this solution, but illogically added

that the person claiming under the earlier root should promptly get a quit claim

or a court declaration of title in rem, and register it against the land. As an

alternative, the Consensus Position (1996) concluded that competing claims

within the title search period could only be resolved by statutory provisions

outside the Ontario 40-year rule and by common law doctrines of priority,

equity and possessory title. In effect, under the alternative, the Act would ask

the courts to bar the searcher from finding a logical solution in the meticulous

records that the Act itself had created, and maybe to send the searcher back into

obscure pre-Act common law doctrines. The two alternatives show that the

political interpretation is inherently flawed. They undermine any theory that,

outside limited exceptions, the rule can resolve every issue wholly within the

40-year period. The 2006 Article explains the fallacy of these proposals further. 168 This might be the effect of the 2006 changes, since the "notice period" for the

fee simple interest could have started with the Crown grant. (This would be so

if the words in section 111(1), "the period ending on the day 40 years after ... the

day of the registration of an instrument that first creates a claim" were

interpreted to mean "first creates a kind of claim," rather than "first creates a

claim of a particular person" (see Notice of claim.) 169 It's said that, in the eleventh century, King Cnut set his throne by the sea and

commanded the tide to halt. After the tide had continued to rise, he wisely told

his people that kings had no power over nature. In the same way, the Ontario

legislature has no power to solve a logical problem by, in effect, commanding

that there has to be a solution.



such flawed legislation to reject the sensible solution of searching

back through readily available records to resolve the conflict.170

The political interpretation often says that the judicial

interpretation wholly undermines the purpose of the Ontario 40-

year rule, which is to limit the search to the 40-year period. But,

for the fee simple, the first situation is extremely rare in practice,

and so the judicial interpretation would rarely lead to a longer

search in that situation. And then the longer search would be both

logically needed and sensible.

The second situation showing the differences between the two

interpretations is where a search, made with reasonable skill and

care, over the 40-year period shows a possible right of way that's

more than 40 years old. The judicial interpretation would sensibly

search back in time to determine whether the right of way so

shown was valid and what its terms were.

In the same way as for the first situation, where the chain of title

shows a possible right of way, words merely saying, in effect, that

there must be a solution within the 40-year period, don't resolve

the issue of whether the right of way is valid. In the same way as

for the first situation, it wouldn't rationally solve the problem,

under the chain of title sub-rule, to say that the registration sub-rule

then simply extinguished the right of way. (For further reasons on

a right of way, see Past events.)

The political interpretation would say that the possible right of way

had to be invalid, unless a formal notice of claim had been

registered for the right of way within the 40-year period (or unless

the right of way was protected by another exception). This would

have to be so, even if the search over the 40-year period had

170 Section 112(3) of the Ontario Registry Act says that a chain of title "is not

affected by any instrument registered before the commencement of the title

search period," except in three cases. Here, the three cases can only be

examples. In any event, section 112(3) says that a "chain of title ... is not

affected by any instrument registered before the commencement of the title

search period except ... an instrument in respect of a claim for which a valid and

subsisting notice of claim was registered during the title search period..." Here,

it implies that a chain of title is affected by any instrument registered after the

commencement of the title search period. Where it says, "except ... an

instrument that, under subsection (2), commences the chain of title," it would

imply that a chain of title is affected by any encumbrance shown in that

instrument (but, illogically, not by anything shown after that instrument and

before the 40-year period). Where it says, "except ... an instrument...," it

wouldn't exclude adverse possession or prescription. The exceptions in section

113(3) wouldn't cover a case where there was a "conveyance, other than a

mortgage, of the freehold estate" within the 40-year period, but it wasn't a good

root of title.



clearly shown the possible right of way. The rationale would be

that a search might not clearly show a possible right of way (or that

the standard of reasonable skill and care was too high).

If a formal notice of claim had been duly registered for the right of

way within the 40-year period, the political interpretation would

still require a search back in time to determine whether the right of

way was valid and what its terms were. This would be because the

registered notice of claim wouldn't validate the right of way. In

effect, in the second situation, the only material difference between

the two interpretations is over how easy it should be for a searcher

to find a possible right of way, before a searcher has to go back in

time to determine whether the right of way is valid and what its

terms are.171



year rule, which is to limit the search to the 40-year period. But, as

the second situation shows, if holders of interests complied with

the political interpretation, by registering notices of claim, the

political interpretation couldn't limit the search to the 40-year

period anyway. If holders of interests complied with the political

interpretation, it would routinely take the search beyond the 40-

year period.

A lawyer acting for a client that was acquiring an interest might

favour the political interpretation, where it lessened the risk of the

lawyer being liable for negligence in not finding the right of way.

On the other hand, the political interpretation creates a

corresponding risk of a lawyer being liable for negligence. This

could be because the lawyer's opinion on title had failed to advise

that a right of way was invalid. Or it could be because the lawyer

either hadn't registered a notice of claim or perhaps hadn't warned

a client of a need to do so in the future.

Rules and periods (registry 40-year rule, principles)

A marketable title law is based on a good chain of title (as shown

under Past events), and the principles must flow from that.172 The

171 Under the political interpretation, searchers could also have to determine

whether the notice of claim was valid. 172 Section 112(1) of the Ontario Registry Act calls this a "good and sufficient

chain of title." The Uniform Marketable Title Act calls it an "unbroken record

chain of title." It defines a "record chain of title" as "the series of recorded

documents creating or evidencing rights of the successive holders of title to real



Ontario 40-year rule has two sub-rules, the chain of title sub-rule

and the registration sub-rule.173

The fact that the Ontario 40-year rule differs from other marketable

title laws, in using the two sub-rules, affects most of the meanings

of the words and most of the principles.

Part of the registration sub-rule, like a part of other marketable title

laws, was intended merely to confirm, for good measure, that an

interest not shown by the chain of title can end. So it would

complement, or lead to the same result as, the chain of title sub-

rule. (See Other interests ending).174

But the part of the registration sub-rule tried, not only to do the

above, but also to show the effect of the chain of title sub-rule from

the point of view of a person holding an existing interest. A

marketable title law doesn't need to show its effect from that

person's point of view, because that effect flows from how the law

works from the point of view of a person searching the title.175

The chain of title is for a period, which must take the point of view

of a person searching the title and therefore be back from a date.176

In showing the effect from the point of view of a person holding an

existing interest, the registration sub-rule naturally used (and still

uses) a safe period forward from a date.177 From the point of view

estate." A comment in the Act says that this includes "all possibly relevant

documents." 173 In the Ontario Registry Act, the chain of title sub-rule is in section 112 and

the registration sub-rule is in section 113. (The only other parts of the Ontario

40-year rule are section 111 (definitions), 114 (public interests) and 115 (effect

on other laws and coming into force).) Section 3 of the Uniform Marketable

Title Act gives title based a good chain of title, but the Act doesn't use a second

separate registration sub-rule. 174 Section 5 of the Uniform Marketable Title Act confirms, for good measure,

that an interest not shown by the chain of title ends, and an official comment

confirms this. (It merely complements section 3, because section 3 preserves the

interests in section 4, and section 5 is subject to the interests preserved by

section 4.) 175 So a comment on section 6 of the Uniform Marketable Title Act merely

confirms that a person should register a notice within a safe period of 30 years

after "the documents upon which they rely." 176 Under section 112(1) of the Ontario Registry Act, the period for the chain of

title is "the forty years immediately preceding" a date. (As shown under When

interest given, although the section says that date is the day on which a person

deals with land, that must be ignored.) 177 Under section 111(1) of the Ontario Registry Act, the notice period is "the

period ending on the day 40 years after" a date. The period is a safe period,

because the person can't know, without a search, when another person's interest

could become free from the first person's interest. The first person naturally

won't be making regular new searches to check whether the other person's chain



of a person searching the title, that period must logically result in

an equivalent period back from a date, which could be different

from the period for the chain of title. The person searching the title

will reason that, if there hasn't been a registration for a claim

during the equivalent period back from a date, the registration sub-

rule couldn't have preserved the claim, if one had existed.178

The Ontario 40-year rule can validate the one person's interest, free

from an interest of another person, where the one person has a

good chain of title for the person's interest for a period, based on a

good root of title (see Past events). The good root of title is the

oldest root within the 40-year period, even though the root could

be unwisely recent, showing a serious defect in the 1981

changes.179 If there's no good root of title within the period, the

root of title is the most recent good root of title before the period of

40 years. Where the chain of title begins with a root of title less

than 40 years old, the search must cover the part of the 40-year

period before the root.180 Where the chain of title begins with a

root more than 40 years old, the search must cover the whole

period after the root, including the part before the 40-year

period.181

of title shows the first person's interest. Instead, the first person would start the

safe period with the instrument by which the first person acquired the first

person's interest. In contrast, section 6(a) of the Uniform Marketable Title Act

rightly says that the period, in which a person must record a notice, rather than

being a safe period, is "the 30-year period immediately following the effective

date of the root of title of the person who would otherwise obtain marketable

record title," in other words, the period for a search. 178 In Ramsay (2006), the Ontario Court of Appeal may have given an

alternative and mistaken reason in paragraph 45, which was inconsistent with

this sentence. In the example in paragraph 42, C wouldn't have had "to go

outside the search period to ... count forward ... to determine when the right of

way would expire." So, as the court may mistakenly have reasoned, that

wouldn't "undermine the title search period so clearly established by the

legislature." 179 A major issue under the Ontario 40-year rule was whether the good root of

title (which the common law requires) could only, and sensibly, be the most

recent root before the 40-year period. The 1981 changes showed that a root of

title within the 40-year period could be good, but didn't say exactly how to find

the root within the 40-year period. The courts accepted that, under the 1981

changes in sections 112(1), 112(2), 112(3)(a) and 113(6), it could be the oldest

root within the 40-year period (even though there'd be no minimum age for the

root). See especially Fire v. Longtin (1995). Under section 3 of the Uniform

Marketable Title Act, the person must sensibly have "an unbroken record chain

of title ... for 30 years or more." 180 The 1995 Article discusses this (including the cases). 181 The 1995 Article discusses this (including the cases). In these cases, sections

112(2), 112(3)(a) and 113(6) of the Ontario Registry Act confirm that the search



The two sub-rules could have allowed the Ontario 40-year rule to

use a period of, say, at least 10 years for the chain of title, and still

keep the period of 40 years for the registration sub-rule.182 That

would have resulted in two kinds of search, the detailed search for

the chain of title, usually for a shorter period than 40 years, and a

search, only for registrations of an interest, for the rest of a 40-year

period. Remarkably, the government conversion procedures used

two kinds of search in a similar way.183 The government

conversion procedures are a striking example of how the Ontario

40-year rule can logically have two sub-rules. Unfortunately,

when making the 1981 changes to the Ontario 40-year rule, no one

seems to have considered the kind of logic that the government

conversion procedures later used.

Past events (registry 40-year rule, principles)

Whether a person has title to an interest in land depends on the

history of the title, that is, on past events, and can logically only do

so. In order to determine what interests in land exist, a person

must find out what the past events are, and then apply the law to

those events. The events could go far into the past, so that a search

could be unduly slow, expensive and repetitive.

Under the common law, whether a person shows title to an interest

in land can depend on showing that the person has a "good chain of

title" over a limited period, based on a "good root of title."

In the same way, under the Ontario 40-year rule or other

marketable title law, whether a person has title to an interest in

land can depend on a "good and sufficient chain of title" for a

period, and the chain is then the foundation of title under the rule

and law. Whether a chain of title is "good" still depends on a

must go outside the 40-year period. Although the words of sections 112(2) and

113(6) are different, both sections have the same purpose. The Consensus

Position (1996) mistakenly proposed that only an interest that happened to be

shown in the root of title itself would be relevant (footnote 37). 182 Before the 1981 changes, Ontario had proposed to reduce the 40-year period

to 25 years, but hadn't proposed using 25 years for the title search period and

leaving the notice period at 40 years. 183 See General comments (land titles conversions, procedures, effects).



search made with reasonable skill and care (see Background).184

The rule also still requires a good root of title.185

Under the common law, Ontario 40-year rule and other marketable

title law, if events within the period for the chain of title raise an

issue that those events can't resolve, the search must logically go

back to past events to resolve the issue (see Interpretation).

Examples are where the search for the period doesn't show the

terms of an interest (even the terms of the fee simple, which will be

in the Crown grant) or only shows a possible interest (see Giving

any kind of interest). Then, the search must include those terms or

go back to determine whether the possible interest is valid.

When the Ontario 40-year rule or other marketable title law gives

an interest (as shown under Giving an interest and When interest

given), that becomes an event in the history of the title. So, when a

search must go back to past events to resolve an issue, such an

event can logically resolve the issue, and the search doesn't

automatically have to go back to the Crown grant.

The Ontario 40-year rule accepts the principle that the search must

go back where events within the period for a chain of title raise an

issue that those events can't resolve, but purports to limit this to a

few simple examples of cases where the search must logically go

back. Despite that, it's logically impossible for the rule to limit the

search to the shorter period in other cases, where events within the

period for a chain of title raise an issue that those events can't

resolve. (See Interpretation.)

For a right of way, the Ontario 40-year rule might have changed

specific standards for the search of the chain of title, without

changing the logic, in the following ways, for example. The rule

could have confirmed that, obviously, a reference to "any right of

way" wasn't specific enough for the chain to show a possible right

of way.186 Or the rule could have shown that, where a transfer of

the subject-to land said that it was subject to a right of way that

was more than 40 years old, the chain should be treated as not

184 In Ontario, the standard should depend on evidence of the practice of lawyers

in the area, and judges have differed over what the standard in fact required (see,

for example, the comments in Fire v. Longtin (1995) on the National Sewer

case). In the United States, lawyers have recognized that lawyers need to agree

on what is reasonable in specific cases and lawyers have developed "title

standards." 185 This is because a "good and sufficient chain of title" must start with a good

root of title, and because section 112(2) implicitly accepts this by dealing with

how the chain must commence. 186 Sections 4(1) and 11 of the Uniform Marketable Title Act deal with indefinite

references.



showing a possible right of way (but there seems to be no good

policy reason for the rule to have done so).187

Where a transfer of the together-with land says that it's together

with a right of way that's more than 40 years old, the Ontario 40-

year rule can't logically say that the chain doesn't show a possible

right of way.188 This is because the rule must validate the title to

the right of way based on a transfer of both the fee simple and the

right of way, even though both the fee simple and right of way are

more than 40 years old. (See Giving an interest and Giving any

kind of interest.)

Giving an interest (registry 40-year rule, principles)

A person relies on a marketable title law for title to land, and can

do so only if the marketable title law validates title. Subject to

exceptions, the Ontario 40-year rule or other marketable title law

can give an interest to one person (or can validate the person's

interest), free from an interest of another person.189

The rule or law validates title where the one person has a good

chain of title for the person's interest for a period (see Rules and

periods), based on a registered instrument that merely transfers the

one person's interest, or transfers an interest on which the one

person's interest depends, called a "good root of title"(see Past

events). The search of the chain of title involves an investigation

of the factual history of the property and the application of legal

principles to it (see Past events). The rules for a chain of title can

be relaxed, but the need for affirmative proof of title can't logically

187 The 1981 changes to the Ontario 40-year rule removed, from the registration

sub-rule, words that had preserved an interest that had been "acknowledged or

specifically referred to" in an instrument registered within the 40-year period.

The political interpretation mistakenly took this to imply that the 1981 changes

extinguished such an interest. In Ramsay (2005), the Ontario Court of Appeal

rightly confirmed that the 1981 changes didn't, have that effect. See also the

comments in the 1995 Article of the five lower court cases. Where a transfer of

the subject-to land doesn't say that it's subject to a right of way, that doesn't

show that the land isn't subject to a right of way. 188 In Ramsay (2006), the Ontario Court of Appeal confirmed this reasoning in

paragraphs 41 to 43. 189 For the Ontario 40-year rule, the courts have accepted this, as shown in the

1995 Article. In Ramsay (2006), the Ontario Court of Appeal confirmed this in

paragraph 43: "Because there was a valid transfer (from A to B) within the title

search period, C can be confident that she obtained good title..." Section 3 of

the Uniform Marketable Title Act confirms this, by saying that a "person who

has an unbroken record chain of title to real estate for 30 years or more has a

marketable record title to the real estate..."



be removed entirely. The good root of title is sensibly one that

allows a person to assume that the title before the root was good.190

The above applies, not only to the ownership, but also to any other

kind of interest (as shown under Giving any kind of interest).

Under the Ontario 40-year rule, the chain of title sub-rule validates

title, based on a good chain of title, but the registration sub-rule

may also affect the title (as shown under Two sub-rules working

together).

The political interpretation is mistakenly that the Ontario 40-year

rule can't validate title, but can only extinguish title (see

Interpretation). Merely extinguishing title doesn't itself create a

title in anyone else. The political interpretation doesn't

satisfactorily explain how the Ontario 40-year rule could serve any

purpose, if a person couldn't rely on it for a valid title, but could

only rely on it to extinguish title.

Where the Ontario 40-year rule or other marketable title law gives

an interest to one person, free from an interest of another person, it

does so, even if other laws prevent a particular person from taking

the benefit from the given interest. This must logically be so,

because successors to the person receiving the interest will rely on

the rule or law having given the interest. The successor has no

reliable way to verify whether the particular person receiving the

interest was able to benefit from given interest. The cases where a

particular person is unable to benefit from a given interest may

include a case where the person acted fraudulently, where the

equitable doctrine of actual notice applies and where the person is

subject to a personal claim. (See Particular persons unable to

benefit from given interest or priority.)

For a right of way, the Ontario 40-year rule can validate the right

of way of the owner of the together-with land, free from an interest

of another person (as shown above and under Giving any kind of

interest). So, where a transfer of the fee simple in the together-

with land says that it's together with a right of way, the transfer can

be a good root of title to both the fee simple and the right of way,

even though both the fee simple and the right of way are more than

40 years old.

190 The 1995 Article discusses what are a good chain of title and a good root of

title under the Ontario 40-year rule (including the cases).



Two sub-rules working together (registry 40-year rule, principles)

The Ontario 40-year rule has two sub-rules, the chain of title sub-

rule and the registration sub-rule.191 Part of the registration sub-

rule was intended merely to flow naturally from, or complement,

the chain of title sub-rule, by confirming that an interest can end if

the rule doesn't preserve the interest (as shown under Preserving

possible interest). But that part of the registration sub-rule also

wrongly tried to show the effect of the chain of title sub-rule from

the point of view of a person holding an existing interest (as shown

under Rules and periods).192

In the Ontario 40-year rule, the words of the chain of title sub-rule

are weak, while the words of the registration sub-rule are strong.193

This easily leads to an interpretation that mistakenly overlooks the

fundamental role of the good chain of title, and into mistakenly

treating the registration sub-rule as dominant, rather than,

correctly, the reverse.194

191 In Ramsay (2005), the Ontario Court of Appeal used the word "period,"

rather than "sub-rule," but must have meant the latter. For example, the court

said, "Throughout its incarnations, the legislation has provided for both a forty-

year title search period and a forty-year expiry period. Although this case

primarily involves the expiry period, the relationship between the two periods is

critical because although they have different purposes, the two periods are

intended to complement each other." There were obviously two periods, but the

"critical" "relationship" was between the two sub-rules that used the two

periods. The footnote for the above quotation referred to three pages of the

1995 Article, which said, in essence: "... Part III contains two basic rules, the

chain of title rule and the registration rule ... Part III validates a title, and

invalidates a conflicting claim, only if the requirements of both rules are

satisfied." 192 Section 5 of the Uniform Marketable Title Act confirms that an interest ends

if sections 3 and 4 give title free of that interest. So it merely confirms the

result, for good measure, and so complements the one rule, rather than adding a

separate sub-rule. 193 The 1929 predecessor to section 112(1) of the Ontario Registry Act, The

Investigation of Titles Act, 1929, said, "... no person ... shall be required to

show ... a good and sufficient chain of title, save and except during the period of

forty years..." Perhaps this merely assumed that a "good and sufficient chain of

title" would validate the title (although, under the common law, it didn't), and

that the main purpose of the words was to reduce the period from 60 years to 40

years. Section 112(1) retains these weak words, "A person dealing with land

shall not be required to show ... a good and sufficient chain of title during a

period greater than the forty years..." 194 The Investigation of Titles Act, 1929 made the correct interpretation clearer,

by putting the chain of title and registration sub-rules in one section, in that

order, and by expressing the sub-rules in a way that linked them together.



The two sub-rules can inevitably lead to cases where the

registration sub-rule doesn't merely complement the chain of title

sub-rule, but where the chain of title sub-rule and the registration

sub-rule lead to conflicting results. There must logically be a way

to resolve the conflict, so that the sub-rules can work together, but

the Ontario 40-year rule doesn't clearly explain how to resolve the

conflict.195 To allow the two sub-rules to work together, the

Ontario 40-year rule must give an interest to one person, free from

an interest of another person, only where both, under the chain of

title sub-rule, it does so, and the registration sub-rule doesn't

preserve the interest of the other person.196 The 1995 Article

shows how the Ontario Court of Appeal cases support this

solution.197

195 In Ramsay (2005), the Ontario Court of Appeal used the words

"complement" and "work together." It may have used the words with other

meanings, but they happen to be the most apt words for the ideas in this section.

(The court may have used the words only to mean that, on the facts, the

registration sub-rule preserved the rights of way and the chain of title sub-rule

correspondingly gave the same rights of way, with no conflict between the sub-

rules.) Under the meanings in this article, the court was saying in paragraphs 41

to 45 that, on the facts, the registration sub-rule complemented the chain of title

sub-rule. However, the court decided in paragraph 33 that a transfer of the

subject-to land, which said that the transfer was subject to the right of way,

could preserve the right of way, even though such a transfer couldn't validate the

right of way. In deciding that, in such a case, the registration sub-rule

complemented the chain of title sub-rule, the court implied that such a transfer

could also preserve the right of way under the chain of title sub-rule. Logically,

this could lead to something preserving the right of way under the chain of title

sub-rule, but not under the registration sub-rule. (Or the case could have led to

something preserving the right of way under the registration sub-rule, where

there was no transfer giving the right of way under the chain of title sub-rule.)

These could raise the issues of the sub-rules needing to work together and of

going outside the 40-year period to determine whether the right of way was

valid. The case also raised the issue of going outside the 40-year period to

determine what the terms of the right of way were. Although the court's reasons

logically raised these issues, the court didn't comment on them. 196 Section 112 of the Ontario Registry Act (containing the chain of title sub-

rule) and section 113 (containing the registration sub-rule) contain similar

exceptions. In one case, in sections 112(2) and 113(6), the words have the same

purpose, but are different. The difference makes the words in section 113(6)

("continuously shown ... as being ... entitled") reflect words like those in section

112(1) ("show that the person is lawfully entitled"). So the words,

"continuously shown," (which came down from in the original 1929 Act) rightly

reflect the principle that the registration sub-rule doesn't cause an interest to end

if the chain of title shows it under the chain of title sub-rule. 197 See also the following: Bora Laskin, Case and Comments, Conveyancing—

Title Search under a Document Registry System—Ontario Experience, (1953) 33

Can. Bar Rev. 1029; T.G. Youdan, The Length of the Title Search in Ontario, 64

Can. Bar Rev., 1986, 507; and Jeremy G.N. Johnston, Part III of the Ontario



Where the Ontario 40-year rule preserves an interest, it will usually

be the chain of title sub-rule that does so (as shown under

Preserving possible interest). Therefore, the main effect of the

two sub-rules working together is that the registration sub-rule

can't cause an interest to end, unless the chain of title sub-rule also

frees the title from the interest. There would be no purpose in

making an interest end, unless it was to allow the rule to give an

interest.198



Interpretation). So, it mistakenly doesn't accept that the Ontario

40-year rule has two sub-rules, or deal with a case where they lead

to conflicting results.

The Ontario 40-year rule probably requires an overly long and

demanding search of the chain of title. The 1981 changes to the

Ontario 40-year rule could have allowed a less demanding search,

and still served the purpose to preserve every valid interest (see

Purposes). The 1981 changes could have done so by using a

minimum period of, say, at least 10 years for the chain of title, and

still kept the period of 40 years for the registration sub-rule (see

Two sub-rules working together). This would have resulted in

two kinds of search, first the detailed search for the chain of title,

usually for a shorter period of at least 10 years, and then a search

only for defined registrations of an interest for 40 years.199

The government conversion procedures used two kinds of search

in a similar way to the above.200 Despite the procedures being

Registry Act at the Hands of the Courts: Panacea or Pandora's Box, Canadian

Bar Association of Ontario Conference, A Searching Analysis, Recent Ontario

Jurisprudence on the Investigation of Titles, May 12, 1994. 198 In the case comment, Bora Laskin said that the vital problem was how far a

person got good title, and he found "quite illogical" a case that extinguished an

encumbrance shown by the chain of title. In his 1986 article, T.G. Youdan

rightly concluded that the primary purpose of the Ontario 40-year rule was to

"provide affirmative proof" of title through a good chain of title, and that the

relationship between the sub-rules was that the Ontario 40-year rule didn't

extinguish a right except in favour of a person who had a good chain of title.

Although his article then mistakenly took the position that the 1981 changes had

weakened this relationship, the later Court of Appeal cases confirmed his initial

conclusions. There were sharp differences in the conclusions of the judges in

some Ontario Court of Appeal decisions on the facts, but all of the judges

accepted the above principles. In Phinny v. Macaulay (2008), the issue didn't

arise, because the chain of title sub-rule didn't preserve a right of way after the

registration sub-rule would have ended the right of way (see paragraph 104). 199 Because the Uniform Marketable Title Act has only one rule, rather than two

sub-rules, it couldn't have allowed two kinds of search. 200 See General comments (land titles conversions, procedures, effects).



different from the Ontario 40-year rule, the government conversion

procedures would probably very rarely have led a search under the

procedures not showing a valid interest that a full search under the

Ontario 40-year rule would have shown. But, unfortunately, Land

Registry Ontario treated many rights of way as invalid, based on

the mistaken political interpretation referred to above.201

The registration sub-rule at first and for many years came close to

complementing the chain of title sub-rule, by allowing several

kinds of registration to preserve a possible interest of another

person.202 So the two sub-rules rarely conflicted and rarely needed

to work together.

Under the 2006 changes to the Ontario 40-year rule, the

registration sub-rule now doesn't complement the chain of title

sub-rule.203 So the two sub-rules must now usually work together,

and the registration sub-rule can't cause an interest to end, unless

the chain of title sub-rule also frees the title from the interest.204

Even if the 2006 changes had been to the chain of title sub-rule, it

was logically impossible for the Ontario 40-year rule to limit the

search to a period in all cases where events within the period for a

201 See Government conversion procedures, rights of way (land titles

conversions). 202 In particular, it did so by allowing a registered instrument to start a new

period under the registration sub-rule, if the instrument "acknowledged or

specifically referred to or contained" the claim. Under the 1981 changes, this

new period became "the period ending on the day forty years after the day of the

registration of an instrument." The 1981 changes didn't say what kind of

"instrument" this was, but the instrument logically had to relate in some way to

the claim. The definition of "claim" says that it's an interest "set forth in, based

upon or arising out of a registered instrument." In Ramsay (2005), the Ontario

Court of Appeal relied on those words to decide that an instrument would start a

new period under the registration sub-rule if the instrument was one in which the

claim was "set forth in, based upon or arising out of" (paragraph 33). In

particular, the court decided that a registered transfer of the subject-to property,

which said that it was subject to the right of way, started a new period

(paragraph 33). The court rejected the reason of the trial judge in the Camrich

case that the instrument must be one that "creates or asserts the interest," and

adopted the reason in the Peoples case that the instrument only needed to be one

that "referred to" the claim (paragraphs 24 and 25). 203 This was mainly through a new definition in section 111(1) of the Ontario

Registry Act, which said that the first "notice period" was "the period ending on

the day 40 years after ... the day of the registration of an instrument that first

creates a claim." The new "notice period" affected only to the registration sub-

rule in section 113 of the Ontario Registry Act, not the chain of title sub-rule in

section 112. 204 The registration sub-rule formerly seemed to confirm this by allowing a

person to register a notice of claim for a claim that was "not barred by this Part."

The 2006 changes removed those words, but without removing the need for the

two sub-rules to work together or changing the principles.



chain of title raised an issue that those events couldn't resolve (see

Interpretation and Past events).

The result is that the registration sub-rule now rarely causes an

interest to end, because the chain of title sub-rule usually preserves

the interest, and so the 2006 changes to the Ontario 40-year rule

make virtually no difference in the result. But, where the result of

the two sub-rules working together is that an interest must end, the

registration sub-rule still confirms the result, for good measure (as

shown under Other interests ending). And the registration sub-

rule may still allow a person to preserve an interest by registering a

notice of claim (as shown under Notice of claim).

Land Registry Ontario mistakenly interpreted the 2006 changes to

the Ontario 40-year rule in a way that would retroactively relieve

the land titles system from what Land Registry Ontario thought

would have been a liability to compensate for the loss of value to

land caused by a past mistake over an easement (see Background).

One of two reasons for the above interpretation being mistaken is

that the two sub-rules must work together, as shown above. (The

other reason is shown under Retroactivity.)

So, the 2006 changes to the Ontario 40-year rule couldn't logically

have invalidated a right of way that was more than 40 years old, if

the chain of title for the 40-year period showed the right of way.

This would be so even if a notice of claim for the right of way

hadn't been registered for it within the 40-year period.205

When interest given (registry 40-year rule, principles)

When the Ontario 40-year rule or other marketable title law can

validate an interest of one person, free from an interest of another

person (as shown under Giving an interest), the rule and law do so

automatically. They do so as soon as, and as long as, the rule or

law can do so, and not only, for example, when the one person

acquires the interest.206

205 Even if the 2006 changes had done so, they would only have applied to a

conversion on or after they took effect on December 20, 2006 (see

Retroactivity). 206 The above paragraph modifies some comments in the 2007 Article. For the

Ontario 40-year rule, the Ontario Court of Appeal cases confirm that the Ontario

40-year rule validates title independently of a dealing, but only when the title is

brought into question. For the Uniform Marketable Title Act, section 3 confirms

it, by saying that a "person who has an unbroken record chain of title to real

estate for 30 years or more has a marketable record title to the real estate."



In practice, if a search shows a good title under the Ontario 40-year

rule, the searcher can assume that the rule had then validated the

title, even though it probably first did so earlier. The searcher

won't have to go back to determine when the rule first did so. So

the period for a search for a first registration in land titles also

starts by going back 40 years from the time of the first registration.

Conversely, an event within the required period may raise an issue

that events within that period can't resolve, and the search must

then logically go back to earlier events to resolve the issue (see

Past events). (An event that raised the issue wouldn't immediately

affect the title, but could only do so if the rule, in a future long

period, resolved the issue differently, by giving an interest to one

person, free from an interest of another person.) Or the Ontario

40-year rule can preserve a possible interest, and the search must

logically go back to earlier events to determine whether the interest

is valid (as shown under Preserving possible interest).

In practice, when a search doesn't show a good title, the searcher

will first go back 40 years from when the search first didn't show a

good title, to see what title (if any) the rule validated before then,

and so on.207

Under the Ontario 40-year rule, the chain of title sub-rule suggests

that it gives an interest only when a person deals with land.208 And

the registration sub-rule suggests that it ends an interest only when

a conflicting claim is registered.209 In both cases, although the

suggestions might seem natural, they must be ignored. It's more

logical and practical for the rule to give title independently of a

dealing or claim, and both the Ontario Court of Appeal and the

Uniform Marketable Title Act accept that.210

Giving any kind of interest (registry 40-year rule, principles)

The Ontario 40-year rule or other marketable title law can validate

any kind of interest of a person, not only the fee simple.211 There

207 These practices would explain why Ontario Court of Appeal cases show that

the Ontario 40-year rule validates title when the title comes under attack or is

brought into question. 208 The Ontario Registry Act, section 112(1) refers to a "person dealing with

land" and to "such dealing." 209 As to this, see the comments under Notice of claim. 210 The comment to the contrary in paragraph 98 of Phinny v. Macaulay (2008)

was mistaken. 211 Section 112(1) of the Ontario Registry Act requires the "good and sufficient

chain of title" to show that "the person is lawfully entitled to the land as owner

thereof." Section 1 says that "land" means "land, tenements, hereditaments and



may be more than one interest created before the period for the

chain of title. The main interest is the fee simple, but other

examples of interests that can be created before the period are the

interest of the Crown, a limited estate (like a remainder after a life

estate), a mining right, a long lease or option to renew, a long

mortgage, an old easement in perpetuity, or a long restrictive

covenant. All of them, except an easement and some limits on the

fee simple under a Crown grant, are rare in practice.

Every person must be able to determine whether every relevant

interest is valid. The Ontario 40-year rule or other marketable title

law wouldn't serve its purpose to limit the search to a period,

unless it could give every kind of interest, based on the limited

search.

The Ontario 40-year rule can validate a person's interest based on a

registered instrument that merely transfers the person's interest, or

transfers an interest on which the person's interest depends, called

a good root of title (as shown under Giving an interest). Here, for

example, for a long lease, the root of title could be a mere

assignment of the lease or, for a right of way, the root of title could

appurtenances and any estate or interest therein," and that "owner" means "a

person, other than a lessee or a mortgagee, entitled to a freehold or other estate

or interest in land..." Although the definition of "owner" excludes "a lessee or a

mortgagee," those words should be ignored. The word, "lessee," was perhaps

intended to reflect a change to The Investigation of Titles Act, 1929, where

section 3(1)(a) had required a search before the 40-year period for "either a

freehold or leasehold estate." Perhaps the word, "mortgagee," was intended to

expand this misguided change, by confirming that a mortgage couldn't be a root

of title, even if the mortgagee, under the common law, received the freehold

estate. Where sections 112(2), 112(3)(a) and 113(5) deal with a "freehold

estate," they deal with the different issue of allowing a root of title to be before

the 40-year period. In Ramsay (2006), the Ontario Court of Appeal confirmed

the above in paragraph 43: "When A sold the dominant tenement, together with

the right of way, A was "a person dealing with land", indeed, with both interests

in the land (the fee and the right of way) ... Further, the right of way was not

merely something referred to in passing; but instead, the right of way was an

interest in the land that the deed purported to transfer. Because there was a valid

transfer (from A to B) within the title search period, C can be confident that she

obtained good title..." Similarly, section 3 of the Uniform Marketable Title Act

says that a "person who has an unbroken record chain of title to real estate for 30

years or more has a marketable record title to the real estate." Section 1 defines

"real estate" to mean "an estate or interest in, over, or under land..." Section 1

also says that "title" means "the right to an interest in real estate, including the

interest of an owner, lessee, possessor, lienor, holder of a security interest, and

beneficiary of a restriction including an owner of an easement."



be a mere transfer of the fee simple, together with the right of

way.212

The Ontario 40-year rule specifically allows a search for the

ownership to go beyond the 40-year period, but not usually for an

interest less than ownership. The reason is that, if a search for the

40-year period didn't show the ownership, the searcher would

logically assume that there was an owner, and search back to find

the owner. Where the search for the 40-year period didn't show an

interest less than ownership, a searcher couldn't be expected to

assume that there was such an interest.213

The Ontario 40-year rule or other marketable title law might

validate an interest of one person (for example, the fee simple),

free from an interest of another person (for example, an easement).

If so, it gives the interest to the one person, free from the interest of

the other person, and a search stops there, even if a search further

back might have shown that the rule or law could have given the

other interest. However, if the search for the one interest had

preserved the other interest (see Preserving possible interest), but

hadn't validated the other interest, the search might have to go

beyond the 40-year period for a root of title for the other

interest.214

A person also needs to know the terms of an interest and so, even

when Ontario 40-year rule or other marketable title law has

validated an interest, the search must include a document that

contains those terms. The fee simple is a mere interest in land,

usually created by a grant from the Crown, and a person often

needs to know the terms of the Crown grant, even though the root

of title may be a mere transfer of the fee simple.215 Similarly, for

212 Where a search within the 40-year period shows that the ownership is split

horizontally (for example, into mining and surface rights), each part has a

separate chain of title. The same applies where a search within the 40-year

period shows that the ownership is split over time (for example, into a life estate

or remainder, or other legal interest under the Statute of Uses). Under the

common law, a life estate or remainder (among others) is a "freehold estate,"

and so, where sections 112(2) and 113(6) of the Ontario Registry Act refer to a

freehold estate, they might partly reflect the above. 213 Sections 112(2), 112(3)(a) and 113(6) of the Ontario Registry Act reflect this

logic. 214 In these cases, the assumption in sections 112(2), 112(3)(a) and 113(6) of the

Ontario Registry Act that there can be an older root of title only for a "freehold

estate" (which might, for example and under the common law, include a life

estate or remainder) isn't wholly true. 215 Section 113(5)(a) of the Ontario Registry Act makes specific exceptions for

interests of the Crown, but those exceptions don't imply that a search couldn't go

back to a document that contained the terms of any other interest.



example, if the interest is a long lease or right of way, the search

must include a document that contains the terms of the long lease

or (usually) of the right of way, even though the root of title may

be a mere transfer of the together-with land or of the lease.



Interpretation). So, it mistakenly shows that the rule couldn't

validate either the ownership or any other kind of interest, such as

a right of way.

Under the interpretation in this article, on a government conversion

from registry to land titles, the Ontario 40-year rule could have

validated a right of way (free from an interest of another person).

However, if the rule had validated the interest of the owner of the

subject-to land, free from the right of way, the right of way would

have ended. The rule wouldn't have validated the interest of the

owner of the subject-to land, free from the right of way, if the rule

had preserved the right of way (see Preserving possible interest),

but the rule would usually have validated both the fee simple and a

right of way, based on the same root of title.216

Preserving possible interest (registry 40-year rule, principles)

The Ontario 40-year rule or other marketable title law can preserve

a possible interest in several ways.

First, under the Ontario 40-year rule or other marketable title law,

a chain of title for the interest of one person for a period won't be

"good," in order to free an interest of one person from an interest

of another person, in two cases. These are where the above chain

of title either (1) also validates the interest to the other person (as

shown under Giving an interest and Giving any kind of interest)

or (2) shows a possible interest of the other person.217 The chain

shows a possible interest of another person, if it does so in a way

that would lead a skilled and careful searcher to check whether the

216 Because the root of title for the fee simple would usually say that it was

together with the right of way. 217 As shown under Interpretation, section 112(3) of the Ontario Registry Act

says that a chain of title "is not affected by any instrument registered before the

commencement of the title search period," except in three cases. Here, the

section attempts to do something that legislation can't do, and the three cases can

only be examples.



interest was valid (so that it would lead the searcher to say that the

chain wasn't "good," or that there was a "cloud" on the title).218

Second, under a marketable title law, a notice registered within the

period can preserve a possible interest of another person. Under

the Ontario 40-year rule, a registered notice of claim can preserve a

possible interest of another person. (See Notice of claim.) (In

Ontario, the registration sub-rule formerly also came close to

complementing the chain of title sub-rule, by allowing several

kinds of registration to preserve a possible interest of another

person (as shown under Two sub-rules working together).)

Third, an exception can preserve a possible interest of another

person (as shown under Exceptions).

Wherever the Ontario 40-year rule and other marketable title law

preserves a possible interest, the searcher must determine whether

the possible interest is valid, and the rule or other law governs this

in the ways shown above (and, in particular, in the ways shown

under Past events, Giving an interest and Other laws).

The political interpretation may say that the above wholly

undermines the purpose of the Ontario 40-year rule, which is to

limit the search to the 40-year period (see Interpretation). The

interpretation may say that it does so for three reasons. First, the

political interpretation may say that the above undermines the

purpose of the Ontario 40-year rule, because a searcher can't know

when the search must go back. Here, the rule goes in two steps;

first, within the 40-year period, it preserves the possible interest in

the above ways, and only then can it validate the interest. The first

step shows when the searcher must go back, and the second step

shows that the going back is only to determine whether that

possible interest is valid. Second, the political interpretation may

say that the above undermines the purpose of the Ontario 40-year

rule, because the searcher would have to go back to the Crown

grant. But the Ontario 40-year rule might in an earlier, but still

218 Section 112(1) of the Ontario Registry Act requires "a good and sufficient

chain of title." Section 112(2) goes on to suggest that a "conveyance, other than

a mortgage, of the freehold estate" can be a good root of title. Otherwise, the

words, "a good and sufficient chain of title," import the common law into the

Ontario 40-year rule (and despite section 115(1) saying that the Ontario 40-year

rule prevails over any other law). The chain required a seller to resolve every

possible defect that the chain of title over the period showed to a person

searching with reasonable skill and care (as shown under Background). Section

4 of the Uniform Marketable Title Act specifically says, "The marketable record

title is subject to ... all interests and defects that are apparent in the root of title

or inherent in the other muniments of which the chain of record title is

formed..."



recent, period have validated the interest, and so the searcher

wouldn't have to go back to the Crown grant (as shown under Past

events). Third, the political interpretation may say that the above

undermines the purpose of the Ontario 40-year rule, because it

doesn't limit the search to the 40-year period. But, if holders of

interests complied with the political interpretation by registering

notices of claim, the political interpretation wouldn't limit the

search to the 40-year period anyway (as shown under

Interpretation).

Under the Ontario 40-year rule or other marketable title law, when

an instrument is registered, the instrument can ensure that a chain

of title shows a possible interest. Then, the holder of the interest

won't need to register a notice of the interest during a period after

the instrument was registered. The holder will usually know of the

registered instrument, under which the holder acquired the interest,

but may not always know of any later instrument that could

preserve the interest. So the holder won't usually know at any time

whether the chain of title for the interest of another person for the

required period would continue to show the holder's possible

interest in any other way. So the holder is usually wise to register

the notice within a safe period after the instrument was registered,

under which the holder acquired the interest.

In practice, a holder rarely needs to register a notice of the interest,

because instruments registered within the period usually restart the

safe period for a new holder of the interest. Formerly, the

registration sub-rule came close to complementing the chain of

title sub-rule by confirming this logical result. Although the

registration sub-rule no longer does so, the result was, and

continues to be, a result of the chain of title sub-rule, and the chain

of title sub-rule, in the above and other ways, rarely causes a valid

interest to end.

Where the above chain of title shows a possible interest of the

other person, the other person's interest might not be valid. For

example, the rule or law might previously have freed the interest of

the one person from the interest of the other person. If so, the

interest of the one person will remain free from the interest of the

other person (and a registered notice of that interest can't validly

preserve the interest of the other person). A marketable title law

doesn't need to state this logical result, but the Ontario 40-year rule

tries to do so, by purporting to limit the right to register the notice

(see Notice of claim).

So, on a government conversion from registry to land titles, the

Ontario 40-year rule would usually have preserved a possible a



right of way in the following ways. First, under the chain of title

sub-rule, the subject-to owner's chain of title for the 40-year period

would either (1) also have validated the right of way or (2) shown

the possible right of way, in a way that would have led a skilled

and careful searcher to check whether the right of way was valid.

Second, under the registration sub-rule, a registered notice of claim

could have preserved a possible right of way. Or, also under the

registration sub-rule and for a conversion before the 2006 changes

took effect on December 20, 2006, other kinds of registration could

have preserved a possible right of way (see Retroactivity). Third,

an exception could have preserved a possible right of way (usually

for a right of way that the holder was openly using, including one

based on adverse use, that is, prescription).219

If an instrument had been registered in the 40-year period, which

said that the land was subject to or together with the right of way,

it would have preserved the right of way both in the first way and,

for a conversion before December 20, 2006, in the second way. So

the new land titles register would almost never have needed to use

the words, "except the easement therein."220

219 One kind of possible easement that the Ontario 40-year rule might less easily

have preserved was an easement for a needed service, for example, for water,

electricity, gas, sewage, phone or cable TV. This was because (1) the supplier

rarely transferred the easement, (2) the owner of the subject-to land might more

easily transfer that land without referring to the easement, (3) the easement

might not be covered by the exception for a claim of the Crown or a

municipality in a public highway or lane and (4) the easement might not be

covered by the exception for an easement that the holder was openly using

(because the service was underground). So the supplier would more often need

to register a notice of claim. In 1990, section 114 of the Ontario Registry Act

extended the time for some holders of some public interests to register a notice

of claim, from August 1, 1981 to December 31, 1999, but unfairly not for

holders of interests for gas or phone. A reference in section 114 to section 112,

or section 114 saying that the interest "continues" until December 31, 1999,

doesn't imply that the chain of title sub-rule in section 112 couldn't preserve the

interest. The government conversion procedures allowed for the extension in

section 114, but mistakenly also treated a "utility easement" as generally

different from any other easement (rather than sometimes being different in

some ways, for example, under section 114, or often being "in gross," or being a

hydro easement that didn't need to be registered). Although section 6(c) of the

Uniform Marketable Title Act deals with a utility easement, it doesn't make it

easier to preserve a utility easement. 220 If (contrary to what this article concludes under Section 44(1), "except the

easement therein," (land titles, rights of way)) those words had meant that the

easement wasn't an overriding right under section 44(1)2 of the Ontario Land

Titles Act, the new register would usually have been mistaken, and have wrongly

taken away a valid right of way.



As shown, the political interpretation would only achieve a limited

purpose, to make it easier for those who acquire interests to find

other interests through notices of claim. This would conflict with

the main purposes of the Ontario 40-year rule, which require a

search to be made with reasonable skill and care, which are to

ensure that a search for a limited period preserves every valid

interest, and which are merely to give the holder of an interest a

right to register a notice of an interest. (See Interpretation.)

In the registry system, there can be separate registers for areas of

land, for example, for a concession lot or for a lot on a registered

plan of subdivision. Where the together-with land is in one

register and the subject-to land is in another, there's an issue of

whether an easement could be valid only if the register the subject-

to land preserved it, or if only the register the together-with land

could preserve it.221

Other laws (registry 40-year rule, principles)

Where the Ontario 40-year rule or other marketable title law

preserves a possible interest, the rule or law can fall back onto the

rule or law itself. This is because the rule or law can then validate

the interest, based on a chain of title starting before the 40-year

period (as shown under When interest given).

Where the Ontario 40-year rule or other marketable title law

doesn't validate the person's interest, free from an interest of

another person (as shown under Giving an interest), the rule or law

must logically fall back onto other events and laws (being the

221 It was thought that an easement created before 1967 bound a person taking an

interest in the subject-to land, even if it was an express easement shown only in

a separate register for the together-with land (see Bickley et al. v. Romanow et

al., 1964 CanLII 154 (ON SC) and see the authorities referred to in that case).

Section 26 of the Ontario Registry Act was intended to change that for an

express easement, but it was poorly worded, especially where it seemed to say

that it could only invalidate a transfer of the easement, not the easement itself.

Since an easement runs automatically with the together-with land, a transfer isn't

needed to pass the benefit of the easement. Also, by requiring a detailed

description of the area affected by the right of way in all cases, section 26

purported to go far beyond merely requiring registration against the subject-to

land. In any event, section 26 could only affect an easement after both (1) a

non-complying transfer of the together-with land, made after January 1, 1967,

and (2) a later dealing with the subject-to land in favour of a purchaser for value,

in good faith and without actual notice. This could delay its effect for a long

time, and even mean that, on a conversion, it hadn't yet affected an easement.

Section 26 doesn't address the Ontario 40-year rule. Subject to the true effect of

section 26, the Ontario 40-year rule should preserve an express easement, if

either the register for the subject-to land preserves the easement, or open use

preserves the easement. As to open use, see Exceptions.



common law, as modified by statute) to determine whether the

person's interest is valid. The fallback applies as far as an interest

was created within the period of a chain of title. The fallback can

apply to a possible interest that the Ontario 40-year rule or other

marketable title law preserves (as shown under Preserving possible

interest). And the fallback can apply to an interest covered by an

exception.

So, on a government conversion from registry to land titles, where

the Ontario 40-year rule had preserved a possible a right of way, a

searcher should logically have fallen back in the above ways. For

example, there might have been a good chain of title to the right of

way, starting with an earlier transfer, registered before the 40-year

period, of the together-with land, which was expressly with the

right of way and was a good root of title to the right of way. Or the

fallback might have been to an express or implied grant or

reservation of the right of way. Or the fallback might have been to

adverse use, that is, prescription.



year rule, which is to limit the search to the 40-year period (see

Interpretation). But, as shown, not only is the political

interpretation illogical, but also it wouldn't limit the search to the

40-year period anyway. So, despite the interpretation, a search

must still fall back onto other events and laws in the above ways to

determine whether a person's interest is valid.

Other interests ending (registry 40-year rule, principles)

Subject to exceptions, the Ontario 40-year rule or other marketable

title law can validate an interest of one person, free from an

interest of another person (as shown under Giving an interest).

When the Ontario 40-year rule or other marketable title law frees

the interest of the one person from the interest of the other person,

the interest of the other person must logically end. A marketable

title law doesn't need to confirm this logical result, but does so, for

good measure.222 Where a marketable title law confirms that any

earlier interest of the other person ends, the confirmation only

complements the basic rule.

222 Section 5 of the Uniform Marketable Title Act does this. A comment on

section 5 confirms that section 5 that it did this only to make "absolutely clear"

what the Act had already done.




rule and the registration sub-rule. Part of the registration sub-rule,

like a part of other marketable title laws, was intended merely to

confirm that an interest not shown by the chain of title can end, and

so to complement the chain of title sub-rule (as shown under Rules

and periods).223 The two sub-rules must work together, and one

effect of this is that the registration sub-rule can't cause an interest

to end, unless the chain of title sub-rule also frees the title from the

interest (as shown under Two sub-rules working together). But,

where the result of the two sub-rules working together is that an

interest must end, the registration sub-rule must confirm that result,

for good measure.

One of the purposes of the Ontario 40-year rule or other

marketable title law is to ensure that the search preserves every

valid interest, and the rule and law very rarely causes a valid

interest to end. The government conversion procedures would also

usually have shown every valid interest. (See Purposes.)

In light of the above, on a government conversion from registry to

land titles for electronic registration, the Ontario 40-year rule

would very rarely have caused a valid right of way that was more

than 40 years old to have ended. Where the government

conversion procedures showed a right of way, the right of way

would also very rarely have ended.

Notice of claim (registry 40-year rule, principles)

In case a chain of title for one person's interest for the period

doesn't show a possible interest of another person, a marketable

title law sensibly allows the other person to register a notice of the

interest, which will, within that period, show the possible

interest.224 The registered notice obviously doesn't validate the

interest of the other person, but merely shows the possible

interest.225 The notice has the same effect as where the possible

interest is shown in the other ways. The searcher must determine

whether the possible interest is valid, and the rule or other laws

223 Section 113 of the Ontario Registry Act shows that the claim "expires." 224 Section 6 of the Uniform Marketable Title Act. The section specifically

confirms that an interest can end when a person doesn't register the notice, even

if the person was under a disability or lacked knowledge. 225 Section 113(7) of the Ontario Registry Act confirms this, by saying that a

registered notice of claim "does not validate or extend a claim that is invalid..."

(and section 113(4), saying that a notice of claim "affects the land for the notice

period," doesn't contradict that). Section 5(c) of the Uniform Marketable Title

Act says, "Recording an interest after the effective date of the root of title does

not revive an interest previously extinguished."



govern this (and, in particular, in the ways shown under Past

events, Giving an interest and Other laws).

A marketable title law doesn't need to limit the right to register the

notice, because a notice logically can't preserve a possible interest

that isn't valid.226 (See also Preserving possible interest.)


rule and the registration sub-rule. Under Ontario 40-year rule, the

registration sub-rule serves two purposes, (1) for good measure to

confirm that the interest of the other person ends and (2) to allow

the person to register a notice of the interest.227

In serving the two purposes, the registration sub-rule serves the

second purpose imperfectly, by illogically purporting to limit the

right to register the notice. It requires the notice to be registered

within a "notice period,"228 and the 2006 changes might very

severely have limited the "notice period."229 Where the

registration sub-rule purports to limit the right to register the

notice, the limit should probably simply be ignored, as being

illogical. (In any event, registering a self-serving instrument, such

as a transfer to self, could achieve the same result, by showing a

possible interest under the chain of title sub-rule.)

Second, in serving the two purposes, the registration sub-rule also

serves the second purpose imperfectly, where it illogically purports

to allow a person to register a notice of claim "at any time after the

expiration of the notice period but before the registration of any

conflicting claim of a purchaser in good faith for valuable

226 Sections 113(4) and (7) of the Ontario Registry Act assume this. Although

section 6(a) of the Uniform Marketable Title Act seems to limit the time for

registering the notice, the time is as long as the interest could be valid ("the 30-

year period immediately following the effective date of the root of title of the

person who would otherwise obtain marketable record title"). 227 Ontario Registry Act, section 113(2). 228 Section 113(2)(a) of the Ontario Registry Act limits the right to register the

notice by saying that the person may register a notice of claim "within the notice

period for the claim. 229 A new definition in section 111(1) of the Ontario Registry Act said that the

first "notice period" was "the period ending on the day 40 years after ... the day

of the registration of an instrument that first creates a claim." Although the

words seem to refer to an instrument that first creates a particular kind of claim

(for example, for the fee simple, the original Crown grant or, for a right of way,

the original grant of the right of way), the words probably refer to an instrument

that first created the claim of a particular person. If so, for the fee simple, the

instrument could be a transfer of the fee simple and, for a right of way, the

instrument could be a transfer of the dominant land "together with" the right of

way. The 2007 Article comments on this issue.



consideration of the land."230 This should be read merely as

reflecting a true extended period, during which the chain of title

sub-rule preserves the claim after the 40-year period (as shown

under Two sub-rules working together). The true extended period

would end when the Ontario 40-year rule gave a conflicting

interest free from the expiring interest, rather than merely when a

conflicting claim was registered.231

230 The Ontario Registry Act, section 113(2)(b) purports to allow a person to

register a notice of claim "at any time after the expiration of the notice period

but before the registration of any conflicting claim of a purchaser in good faith

for valuable consideration of the land." Before the 2006 changes, the words had

referred simply to "conflicting claim." Before that, they'd referred to

"intermediate registered dealing with the land." Section 6 of the Uniform

Marketable Title Act doesn't purport to give a person added time to register a

notice. 231 At first, a literal interpretation of the section 113(2)(b) seems fair to a holder

of an expiring claim. However, from the point of view of a person making a

search, a literal interpretation would lead to the search not being practical. A

conversion to land titles couldn't be a "conflicting claim of a purchaser in good

faith for valuable consideration of the land." So, the search for a conversion

would have to go back to another kind of conflicting claim. This would end a

notice period of 40 years, plus an added period, to register a notice of claim. So

every search would have to go back for a seemingly open-ended period of more

than 40 years from the earlier conflicting claim, to see if there'd been an

expiring claim of some unknown kind. (In contrast, under the correct

interpretation, sensibly, the search for a conversion would go back 40 years from

the conversion; would go further back only when the chain of title, searched

with reasonable skill and care, rarely showed a possible claim; and would then

go back only to see if that known claim was valid.) A literal interpretation

would raise a number of other issues. For example, how should the

contradiction be resolved between section 113(1), saying that the claim expires

at the end of the notice period, and section 113(2)(b), seeming to show that the

claim continues (or can be revived)? How might section 113(6) or 113(7) affect

that issue? Would a conflicting claim extinguish an expiring claim in favour of

the person taking under that claim? Or would it do so if that person had actual

notice of the expiring claim? Could section 45 ¶3 of the Ontario Land Titles Act

preserve the claim until a later transfer was registered? Would a transfer that

said it was subject to a right of way conflict with the right of way? Would a

nominal consideration lead to a transferee (for example, the beneficiary of an

estate) being a "purchaser ... for valuable consideration," or end a claim

preserved under section 45 ¶3? How would a searcher determine whether the

person taking under that claim was "in good faith"? Would "in good faith" also

mean without actual notice? Ignoring a literal interpretation of section

113(2)(b), in favour of the logical interpretation, avoids all the above issues.

This makes it unnecessary to consider other interpretations by Carter in Title

Searching: The 40 Year Rule as it relates to Easements, The Law Society of

Upper Canada, The 2nd Annual Real Estate Law Summit, April 6, 2005, or by

Amone and Hawkins in Ramsay Redux, Ontario Bar Association, Vol. 35, No. 2.

Inconsistent comments in the writer's earlier articles and in Algoma Ore

Properties Ltd. v. Smith, [1953] O.R. 634, [1953] 3 D.L.R. 343 were mistaken.



The above issues rarely arise, because the registration sub-rule

rarely causes an interest to end (see Other interests ending).

As shown above, the political interpretation would only achieve a

limited purpose, to make it easier for those who acquire interests to

find other interests through notices of claim (see Interpretation).

This would conflict with one of the main purposes of the Ontario

40-year rule, which is merely to give the holder of an interest a

right to register a notice of an interest.

So, for a right of way that was more than 40 years old at the time

of a conversion to land titles, where the owner's chain of title

showed the right of way under the chain of title sub-rule, the right

of way hadn't ended under the registration sub-rule, because the

two sub-rules had to work together (see Two sub-rules working

together). As shown above, the illogical and severe limits on the

right to register a notice of claim shouldn't have had that effect for

the right of way. The registration sub-rule purports to allow a

person to register a notice of claim "at any time after the expiration

of the notice period but before the registration of any conflicting

claim of a purchaser in good faith for valuable consideration of the

land." This could only mean that the holder of a right of way

would have had an added period to register a notice of claim until

the Ontario 40-year rule validated the title of the owner of the

subject-to land, free from the right of way.

Retroactivity (registry 40-year rule, principles)

It wouldn't be sensible for the Ontario 40-year rule or other

marketable title law (or a change to the rule or law) not to be

retroactive at all, because it might then apply only to events that

happened after the law or change took effect. If so, the old law

could govern a search for many years after the law of change took

effect. Instead, the rule or law (or a change to it) should give a

grace period to allow the public to adjust.

The Ontario 40-year rule or other marketable title law is partly, but

naturally, retroactive. Here, the rule or law (or a change to the rule

or law) can cause a change in title on or after the law or change

takes effect, based on past events.232 For this reason, a marketable

title law usually gives a grace period to allow the public to

232 The 1995 Article doesn't make this meaning clear. In Fire v. Longtin (1995)

the Supreme Court of Canada confirmed that the rule was partly, but naturally,

retroactive in this way, where the court agreed that "some, but not all, claims

which were older than 40 years expired on July 31, 1981 if no notice of the

claim was registered." In Ramsay (2006), the Ontario Court of Appeal

confirmed this in paragraph 18.



adjust.233 Where the Ontario 40-year rule was to validate title on a

past date, the rule or law will be the rule or law as it was on the

past date.

The Ontario 40-year rule or other marketable title law (or a change

to the rule or law) isn't wholly, or unnaturally, retroactive. Here, it

would cause a change in title as of a date before the rule or law (or

a change to the rule or law) took effect, that is, it would change a

person's interest as of a past date.234

If the Ontario 40-year rule or other marketable title law (or a

change to the rule or law) were wholly, or unnaturally, retroactive

in the above way, it could have absurd results. For example, a

person that became the owner of a property as of the past date

might, for example, have to pay taxes on, insure, maintain or be

liable for the property, even though the person wasn't then the

owner. The person that ceased to be the owner as of the past date

might have paid taxes on, insured, maintained, improved or been

liable for the property, while the person was then the owner. The

person that ceased to be the owner as of the past date might be

liable for damages for trespass to the person that became the

owner, or for rent received through leasing the property, or for

alterations to the property, while the person that ceased to be the

owner was the owner. A third person might have taken a transfer,

mortgage or other interest from a person that retroactively ceased

to be the owner.235

The law or change might have similar results to the above, if it was

wholly, and unnaturally, retroactive, in taking away only an

interest that was less than ownership, for example, a right of way.

For example, losing the right of way might seriously reduce the

value of the property. The owner might have paid taxes on an

233 The 1929 predecessor to the Ontario 40 year rule in the Ontario Registry Act,

namely The Investigation of Titles Act, 1929, gave a grace period of one year

after the Act came into force to register a notice of claim. Section 15 of the

Uniform Marketable Title Act gives a grace period of two years after the

effective date of the Act to record a notice. (Both merely assume that the Act is

partly, but naturally, retroactive). 234 Despite that, where 1990 changes added section 114 of the Ontario Registry

Act, they could retroactively have validated some public interests, until the end

of an extended period to register notices of claim. 235 Phinny v. Macaulay (2008) could have been an example of the above absurd

results if, in deciding the dispute in 2008, about a sale in 2000, the court had

applied the Act as it was after the 2006 changes. Without discussion, the court

rightly applied the Act, as it was before the changes, and rightly followed the

reasons of Ramsay (2005) (even though the 2006 changes might have been

intended retroactively to reverse that case).



inflated value, or another person might have bought, or taken a

mortgage, based on the inflated value.

A law or change that was wholly, and unnaturally, retroactive

would also go against the rule of law, especially if, as in Ontario, it

could also reverse decisions of the highest Ontario court. If the

law or change were wholly, or unnaturally, retroactive, it also

couldn't give a common grace period, which could allow the public

time to adjust.

For the Ontario 40-year rule, three added factors might seem to

show that a change to the rule is wholly, and unnaturally,

retroactive, but those factors don't do so. These factors are

misleading words in the 1981 changes,236 a mistake in the 1990

revision to the Ontario Registry Act,237 and a mistake in the current

consolidation of the Act.238

Land Registry Ontario interprets the 2006 changes as retroactively

relieving the land titles system from having to compensate for a

236 Section 6 of the Ontario Registry Amendment Act, S.O. 1981, c. 17, said,

"Part III of the Registry Act, as re-enacted by section 4 of this Act, applies to

every claim and notice of claim, whether registered before or after the coming

into force of the said section 4." Section 4 came into force on August 1, 1981.

It seemed illogically to make the 1981 changes wholly, and unnaturally,

retroactive without any time limit at all. It must have meant that the 1981

changes came into force on August 1, 1981 (even though the 1981 Act came

into force on June 26, 1981), but were partly, but naturally, retroactive. So the

1981 changes could only cause a change in title on or after August 1, 1981,

based on past events, and the courts have so interpreted it. 237 In the revised statutes, section 115(2) mistakenly said, "This Part applies to

every claim and notice of claim, whether registered before or after the 1st day of

August, 1981." In fact, it was only Part III of the Registry Act, as re-enacted by

section 4 of the Ontario Registry Amendment Act, S.O. 1981, c. 17, that applied

in that way. 238 In the current consolidation, section 115(2) still mistakenly says, "This Part

applies to every claim and notice of claim, whether registered before or after the

1st day of August, 1981." That mistakenly implies that the 2006 changes apply

in that way. In fact, sections 22 and 42 of the Ministry of Government Services

Consumer Protection and Service Modernization Act, 2006 show that the 2006

changes only came into force on December 20, 2006. So they should only be

partly, but naturally, retroactive, and could only cause a change in title, on or

after December 20, 2006, based on past events, and the courts should so

interpret sections. As to the effect of the consolidation and correcting a mistake,

see the Ontario Legislation Act, 2006, sections 39, 42(2)12 and (4) and 43.

Presumably, section 115(2) of the consolidated Ontario Registry Act should say

something like: "This Part, as it was in the Revised Statutes of Ontario, 1990,

applies to every claim and notice of claim, whether registered before or after the

1st day of August, 1981."



past mistake over an easement.239 Land Registry Ontario's above

interpretation is mistaken, for two reasons. (1) The 2006 changes

to the Ontario 40-year rule couldn't logically have invalidated an

easement that was more than 40 years old, if the chain of title for

the 40-year period showed the easement (see Two sub-rules

working together). (2) For the reasons below, even if the 2006

changes could logically have had the effect in (1), the 2006

changes weren't retroactive in a way that could relieve the land

titles system from a liability to compensate for a past mistake over

an easement.

As to (2), the 2006 changes weren't retroactive in the above way

for the following reasons. (a) As shown above, the 2006 changes

weren't wholly, or unnaturally, retroactive. (b) The 2006 changes

didn't change the Ontario Land Titles Act.240 (c) As shown above,

although three added factors seem to show that a change to the rule

is wholly, and unnaturally, retroactive, those factors don't do so.

So, for a right of way that was more than 40 years old at the time

of a conversion to land titles, the 2006 changes to the Ontario 40-

year rule wouldn't relieve the land titles system from having to

compensate for a past mistake over an easement. This would be so

whether the conversion was before or after the 2006 changes came

into force.241

If Ontario were to amend any laws to deal with the issues under

this article, it might amend the Ontario Registry Act to deal with

retroactivity. The amendment might, at least and justly (and

without implying anything about any other law), confirm that, if an

interest would have been valid under the Ontario 40-year rule, as it

was before the 2006 changes, the interest remained valid until

December 20, 2006. This would at least and rightly confirm that

the decision of the Ontario Court of Appeal in Ramsay (2005) was

valid until that date.

239 Land Registry Ontario Bulletin 2007-02, third paragraph, last sentence. The

bulletin also contains the same options for conversions both before and after the

2006 changes to the Ontario 40-year rule took effect on December 20, 2006. 240 If, for example, the Ontario Land Titles Act had already mistakenly

guaranteed that a person was the owner, strong words would be needed to

reverse that guarantee. Even if the changes to Ontario Registry Act had been

wholly, or unnaturally, retroactive, they shouldn't have reversed a guarantee

under the Ontario Land Titles Act. This was especially so, because, on a

conversion from registry to land titles, the Ontario Land Titles Act said that

Ontario Registry Act ceased to apply to the land. 241 Reason (1) above would apply to a conversion after the 2006 changes came

into force and both reasons (1) and (2) above would apply to a conversion before

the 2006 changes came into force.



Exceptions (registry 40-year rule, principles)

Exceptions to the Ontario 40-year rule or other marketable title law

try to preserve a possible interest, where other reasonably available

evidence should show the possible interest. But the rule or law can

still validate an excepted interest in the ways shown above (and, in

particular, in the ways shown under Giving an interest and Other

laws).

It's generally thought that the Ontario Registry Act (including the

Ontario 40-year rule) doesn't impair an interest based on adverse

possession or use.242 But, if so, the requirements of the exception

below, for a right openly used, probably also apply an interest

based on adverse possession or use. So an interest based on

adverse possession or use shouldn't affect another person, unless

the interest is openly used when the other person acquires an

interest.243

An exception may preserve a possible interest, if the holder is

openly using the interest.244 This interest can be an easement, but

242 However, section 113(5) of the Ontario Registry Act doesn't list an interest

based on adverse possession or use among the exceptions to the Ontario 40-year

rule. For the Ontario 40-year rule, the thinking might be based on the definition

in section 111(1) of a "claim" as only a right "set forth in, based upon or arising

out of a registered instrument" (and the related definition of "instrument),

subject to section 111(2). The basic common law rules were that a person in

possession was presumed to be the owner, and that the interest of the true owner

could only be extinguished by adverse possession for a period. 243 The fact that section 113(5) of the Ontario Registry Act doesn't list an interest

based on adverse possession or use among the exceptions to the Ontario 40-year

rule might mean that such an interest had to rely on section 113(5)(iv). If the

Ontario 40-year rule simply didn't impair an interest based on adverse

possession or use, it could defeat the purpose to preserve a possible interest,

only where other reasonably available evidence should show the interest. This

is because an interest based on adverse possession or use could continue even

after the possession or use had ended, so that it might not be practicable for a

person acquiring an interest to know of it. 244 Ontario Registry Act, section 113(5)(iv). The exception applies to an

"unregistered" right. The word, "registered" (and therefore the word,

"unregistered"), might have several meanings. One argument has been that an

interest, which has once been registered, can never become "unregistered" (see

Craig R. Carter, Title Searching: The 40 Year Rule as it relates to Easements,

The Law Society of Upper Canada, The 2nd Annual Real Estate Law Summit,

April 6, 2005). This goes against the purpose to preserve a possible interest,

where other reasonably available evidence should show the interest. The word,

"unregistered," must in this context mean that the 40-year rule doesn't preserve

the right (see Jeffrey W. Lem, annotation to the report on the trial decision for

Ramsay (2005), at 2004), 24 R.P.R. (4th) 37). In this way, the exception allows

an alternative way to preserve the right. In Ramsay (2006), the Ontario Court of

Appeal found it unnecessary to deal with the exception, in paragraphs 8, 40 and

49.



needn't be similar to an easement (even under the 2006 changes to

the Ontario 40-year rule).245 The holder must be openly using the

interest when another person acquires an interest, which could be

subject to the holder's interest, and the exception must protect the

holder's interest only against that other person.246 On a conversion

to land titles, the first registered owner could have been subject to

the interest only if the holder had been openly using it when that

owner first acquired the ownership.247

The Uniform Marketable Title Act deals with the issues in similar

ways to those shown above, but more thoughtfully, and so would

support the above.248

So, on a conversion to land titles, if the holder of a right of way

had been openly using the right in the ways shown above, when

the new registered owner had acquired the ownership, that owner

245 Section 113(5)(a)(iv) of the Ontario Registry Act applies to a "right of way,

easement or other right." Since a right of way is an easement, the section

applies to an easement or other right, and the word, "easement" can't point to a

kind of right that would limit the words, "or other right," under the eiusdem

generis (of the same kind) rule. The 2006 changes were, "an unregistered right

of way, or other easement or other right that the person is openly enjoying and

using," and so the above also applied to the former words. 246 Section 113(5)(a)(iv) of the Ontario Registry Act doesn't say when the holder

must have been openly using the right. The Ontario 40-year rule is trying to

protect a possible interest that reasonably available evidence should show. So,

for example, the Ontario 40-year rule would validate ownership, free from a

right of way, automatically and as soon as the rule could do so (as shown under

When interest given). But, if the right of way then existed, the rule would have

to do so, subject to the exception for a right openly used. The exception might

then, in the future, protect the right of way, if the holder was openly using it,

when a third person became the owner or took a mortgage. If the holder wasn't

then openly using the right of way, the ownership or mortgage of the third

person, and of the third person's successors, could be free from the right of way. 247 The exception shouldn't require the holder personally to use the right, but

should also cover a case where a person authorized by the holder did so (for

example, a tenant). The exception should allow a use within a reasonable period

(so that the right wouldn't stop instantly). The exception should cover a use

when the holder would normally use the right (for example, in the summer).

The words should also cover a case where a person would then have been able

to see that the use existed by looking at the property, even if the holder wasn't

then actually using the right. Otherwise, it wouldn't be enough if a person could

have found out about the right in some other way, for example, through mere

"constructive notice." 248 Sections 1(13), 3(a) and 7 of the Uniform Marketable Title Act do so in two

ways. First, they protect "a use or occupancy inconsistent with the marketable

record title, to the extent that the use or occupancy would have been revealed by

reasonable inspection or inquiry." Second, they protect a right of some broad

kinds, if the existence of the right is "clearly observable by physical evidence of

its use."



should have been bound by the right. And, as this article

concludes that the Ontario Land Titles Act couldn't have taken

away the right of way, the right of way would have remained

valid.249

It would have been prudent to for the standard government words

for a conversion to have shown that the land was subject to a right

that was valid, on the ground that the holder was openly using it,

but the words didn't do so.250 However, as this article concludes

that the Ontario Land Titles Act couldn't have taken away a right of

way, the omission doesn't lead to the Act mistakenly taking away

the right of way.251

As this article shows earlier, the only qualification that could apply

to a right of way is in the words: "The rights of any person who

would, but for the Land Titles Act, be entitled to the land or any

part of it through length of adverse possession, prescription,

misdescription or boundaries settled by convention." After a

conversion, an easement would be an overriding right, even if it

had been valid, on the ground that it had been acquired by

prescription before first registration.252 So this qualification wasn't

needed to protect a right of way based on prescription.253

249 Since the Ontario Registry Act would cease to apply and the Ontario Land

Titles Act would treat the right of way as an overriding right, the right could

continue even after it was no longer openly used. Even if the Ontario Land

Titles Act could wrongly have given the ownership to the first registered owner,

free from the right of way, on the conversion, section 45 ¶3 would have

protected the right of way (as a valid interest by which the first registered owner

was personally affected immediately before first registration). But, even if that

had been so, on a later registered transfer or charge, sections 87 and 93 couldn't

have protected the right of way against the person taking under the transfer or

charge, and so the Act could then wrongly have given the ownership to that

person, free from the right of way. 250 See Failure to qualify for right openly used (land titles, rights of way,

qualifications). As said, the standard government words could have added:

"Any right to which subparagraph 113(5)(a)(iv) of the Registry Act applies." 251 However, the failure could have led to the Act mistakenly taking away a

right, other than an easement, that was valid, on the ground that a person had

been openly using it. 252 See General rules (land titles, rights of way). 253 As this article shows earlier, one overriding right under the Ontario Land

Titles Act is "Any title or lien that, by possession or improvements, the owner or

person interested in any adjoining land has acquired to or in respect of the land."

As this article shows earlier, this couldn't save a valid easement, because an

easement acquired by prescription wouldn't be acquired by "possession or

improvements," even if the holder was an "owner or person interested in any

adjoining land."



Particular persons unable to benefit from given interest (registry 40-year rule, principles)

General

In the cases below, a particular person may be unable to take the

benefit of an interest that the Ontario 40-year rule or other

marketable title law has given. These cases come into play only

after the effect of the rule or law, apart from the case, has been

determined in the first place. They don't prevent the rule or law

from having given the interest (see Giving an interest), but only

affect the particular person.

In these cases, while the particular person is unable to take the

benefit of an interest that the Ontario 40-year rule or other

marketable title law has given, another person, who's so protected,

has a right to consequential relief to protect that other person

against future successors of the particular person.254 The relief

should show, to a person taking an interest, that the particular

person is unable to take the benefit of the interest (and not merely

be a later routine entry that might not show this, for example, if the

other person merely registered what would appear to be an invalid

notice of claim). Instead, the relief might take the form of a court

order, or a transfer, which showed how the particular person had

been unable to take the benefit of the interest having ended.255

Fraud

The Ontario 40-year rule can validate title, based on what purports

to be a root of title, even if it's void for fraud.256 But the law won't

allow a person to take advantage of this, where the person would

benefit from the person's own fraud.257

So, for example, if there'd been no registered transfer of ownership

for 40 years, and a person registered a fraudulent transfer as a new

root of title, the law wouldn't allow a fraudster to take advantage of

the Ontario 40-year rule having validated a title under the

fraudulent transfer.

254 Therefore, the particular person must not dispose of the person's interest in a

way that would defeat the equity and should be liable for doing so. 255 This paragraph modifies the comments in 2006 Article. 256 Section 1 of the Uniform Marketable Title Act shows that an instrument can

be a root of title, "whether or not it is a nullity." See also the comments in the

1995 Article and the 2006 Article. 257 This would be so, even though the Ontario Registry Act doesn't specifically

list it as an exception.



Equitable doctrine of actual notice

Despite the Ontario 40-year rule or other marketable title law,

equity might prevent a particular person, if the particular person

had actual knowledge of a valid interest of another person, before

the person acquired an interest, from unconscionably taking the

benefit of an interest that the rule or law later gives.258 The equity

wouldn't prevent the rule or law from having given the interest, but

would only prevent the particular person from later taking the

benefit of that.259

The equity can prevent a successor to a particular person who first

acquired an interest from unconscionably taking the benefit of the

rule or law. The equity would do so only if, before the successor

took the successor's interest, the successor had actual knowledge

both of a valid interest and that the first person couldn't take the

benefit of an interest that the rule or law had given, free from that

valid interest. Conversely, if the first person could take the benefit

of an interest that the rule or law had given, free from that interest,

equity would "shelter" the successor to the first person. The first

person could take the benefit of an interest that the rule or law had

given, free from that valid interest. But, without sheltering, the

first person would lose the benefit of being able to deal freely with

the first person's interest, if the successor had actual knowledge of

the valid interest that the rule or law had ended.260

258 The principle in United Trust v. Dominion Stores (1976) applies, even though

that case dealt with the Ontario Land Titles Act. (The 1996 Consensus Position

took the position that the principle did not apply.) As to the cases on the Ontario

40-year rule, see the 2006 Article. In Ramsay (2006), the Ontario Court of

Appeal found it unnecessary to deal with the equitable doctrine of actual notice,

in paragraphs 8 and 49. The Uniform Marketable Title Act should be subject to

a similar equity, and section 2 seems, for this purpose, to clarify what amounts

to actual knowledge. As to the equitable doctrine of actual notice generally (but

not for the Ontario 40-year rule), see Paul M. Perell, Priorities and Competing

Claims to Land, Special Lectures 2002, Real Property Law: Conquering the

Complexities, The Law Society of Upper Canada, 2003. Cases sometimes

misleadingly use the word "notice" in a different way, to mean what the chain of

title or register shows. The equity prevents a person from unconscionably

taking the benefit of an interest that the rule or law later gives, that is, where,

although there's no common law fraud or dishonesty, taking the benefit is

seriously and morally wrong, which is sometimes called "equitable fraud." In

light of the above, for example, if a person merely knew that the register showed

an old mortgage, the equity might not prevent the person from taking the benefit

of its expiry. 259 This would be so, even though the Ontario Registry Act doesn't specifically

list it as an exception. 260 This would be so, even though the Ontario Registry Act doesn't specifically

list it as an exception.



So, for a right of way, a particular person might take a transfer of

the subject-to land, while it was validly subject to the right of way,

and might before then also have had actual knowledge of the right

of way. If so, the Ontario 40-year rule or other marketable title

law could cause the right of way to end. But, if so, that particular

person couldn't unconscionably take the benefit of the right of way

having so ended (and an unsheltered successor to that particular

person couldn't unconscionably do so either). In practice, the

equitable doctrine of actual notice should almost never apply to a

right of way.261

Personal claims

Where the Ontario 40-year rule or other marketable title law gives

an interest, free from another interest, it doesn't free a person from

a personal claim relating to the interest. For example, on this

ground, a person that had given a right of way shouldn't become

free from the right of way. Or a later agreement may prevent a

party from disregarding a right that had ended under the Ontario

40-year rule. Or a person's later conduct over the right might lead

to a court preventing the person from disregarding a right that had

ended under the Ontario 40-year rule, under either common law

estoppel or any equitable doctrine of promissory estoppel.262

Rights of way

For a right of way on a government conversion to land titles, as

this article shows earlier, a mistake doesn't cause the Ontario Land

Titles Act wrongly to give an invalid right of way, or to take away

a valid right of way.263 So, even if, immediately before the

conversion, a particular person had been unable to take the benefit

of an interest that the Ontario 40-year rule had given, free from the

right of way, the conversion couldn't affect the right of way.264

261 If a person had made a proper search and inspection, the person would

usually have had actual knowledge of the right of way, either because the chain

of title showed it or because it was openly used. So the equitable doctrine of

actual notice could only apply where a person hadn't made a proper search or

inspection, but the person still had actual knowledge of the right of way. This

scenario should be very rare, and anyway the Ontario 40-year rule would only

rarely cause a right of way to end. 262 This would be so, even though the Ontario Registry Act doesn't specifically

list it as an exception. 263 See General rules (land titles, rights of way). 264 For an interest that the Ontario Land Titles Act had wrongly given on a

conversion, if a particular person had been unable to take the benefit of an

interest that the Ontario 40-year rule had given, the particular person could also

be unable to take the benefit of an interest that the Ontario Land Titles Act gave.



Reform

Ontario Land Titles Act (reform)

As shown, because an easement is important, where it's known and

shown to exist, the register should show it. It should probably also

be guaranteed, but this article concludes that the Ontario Land

Titles Act can't guarantee an easement.

If the Ontario government were reform the Ontario Land Titles Act

to allow it to guarantee an easement, the following suggestions

might be helpful:

• The reform should track the words for a transfer by saying that,

after the reform, when the register for the subject-to land first

showed that the subject-to land was subject to an easement, the

Act then vested the right of way in the then owner of the

together-with land. The words would vest the easement subject

to any relevant encumbrances then on the registers for the

subject-to and together-with land, and (unless the register

showed otherwise) subject to overriding rights. The reform

might say that the entry could express the contrary, so as to

show that the Act didn't vest the right of way.265

• The reform might add to the words, "together with all rights,"

by saying that, on registration of a transfer or charge of the

together-with land, after the above vesting, the Act then vested

the easement in the transferee or gave a charge on the easement.

This would be subject to any relevant encumbrances then on the

registers for the subject-to and together-with lands, and (unless

the registers showed otherwise) subject to overriding rights.

• The reform might say that where, before the reform, the register

for the subject-to land had first shown that the subject-to land

was subject to an easement, the owner of the together-with land

Under section 45 ¶3 of the Ontario Land Titles Act, first registration is expressly

subject to a valid interest by which the first registered owner was personally

affected immediately before first registration, but a registered transfer or charge

is not expressly subject to such an interest. Where section 45 ¶3 applied, the

Ontario Land Titles Act wouldn't wrongly have given the interest to the first

registered owner. But a later registered transfer or charge could wrongly give

the interest, and raise the issue of whether a particular person was unable to take

the benefit of the interest that the Ontario Land Titles Act had so given. 265 The system might enter the easement in the register for the subject-to land

(but as a direct entry, rather than as a notice, but perhaps not in the property

description). The system might make it clearer that the entry in the register for

the together-with land was more a cross-reference. In these ways, the register

would treat the entry more like that for a charge than entries for a "leasehold

parcel."



could apply for the entry to be amended to show that the Act

vested the easement in the owner in the ways shown above.

• The reform might show that, where the land titles register had

shown an easement for a period, the Ontario Land Titles Act

validated the easement. For an easement that existed before a

conversion, this could over time replace a search under the

Ontario 40-year rule, or perhaps shorten the search.

This article refers to some other possible detailed reforms.266

The underlying cause of many cases on easements may be a

dispute over how they're used or over changing or removing them.

The law of nuisance should deal justly with the former and, if it

doesn't, it probably should be changed to do so. Since easements

are often in perpetuity, the law should probably be changed to

allow a court to remove or change them to reflect new

circumstances (as the law allows for restrictive covenants).267

Practice (reform)

Land Registry Ontario might reform its existing practices for a

right of way (or other easement) to better serve owners in the

following ways:268

• Land Registry Ontario should base its procedures on the judicial

interpretation of the Ontario 40-year rule, instead of the political

interpretation (see Interpretation (registry 40-year rule,

principles).

• Land Registry Ontario should, for the future, end the misleading

practice of showing a right of way in the property description

and should show a right of way only as a notice. It probably

couldn't easily change existing registers, but it should confirm

to the public that a reference to a right of way in the property

description had effect only as a notice. (See Entry of right of

way in property description (land titles, rights of way,

practice).)

• Land Registry Ontario should encourage a more flexible

attitude towards rights of way, and find ways to make it easy for

owners to record their rights of way (see Policy). Where a right

of way existed before a conversion and the register was altered

266 For example, under Meaning (land titles, rights of way, "except the

easement therein") and General comments (land titles conversions,

procedures, effects). See also Retroactivity (registry 40-year rule, principles). 267 See the Ontario Conveyancing and Law of Property Act, section 61. 268 These would involve Land Registry Ontario cancelling its Bulletin 2007-02

and then issuing an entirely new bulletin.



to show it, Land Registry Ontario shouldn't routinely require the

consent of the subject-to owner or of a lender holding a

mortgage on the subject-to land, or a lawyer's statement, or an

indemnity for the assurance fund.269

• Section 39 requires the system to be reasonably satisfied that

the easement is valid before entering it on the register. As said,

the system might interpret section 39 not to require proof that

the easement was valid, but merely to require the evidence.

(See General rules (land titles, rights of way, section 39).)

Where a right of way existed before a conversion, Land

Registry Ontario might encourage owners to refer to or provide

the records and analysis relating to the right of way (including,

perhaps, opinions or reasons) and should make copies of those

documents readily available.270

• Where the system altered the register to show a right of way

that existed before conversion, the notice should show this and

the date on which the right of way was created. This would be

rather than the entry appearing to be a simple notice of a right of

way that had priority only according to the date of the entry of

the notice.

Appendix, citations

Cases

Attorney General v. Odell [1906] 2 Ch. 47 (Eng. C.A.).

Capital & Counties Bank v. Rhodes [1903] 1 Ch. 631 (Eng. C.A.).

Fire v. Longtin, 1994 CanLII 1058 (ON CA) ; (1995), 48 R.P.R.

(2d) 1, 128 D.L.R. (4th) 767; 25 O.R. (3d) 416 (note); 1995 CanLII

75 (SCC); [1995] 4 S.C.R. 3; 188 N.R. 234; 86 O.A.C. 288

(S.C.C.).

Kendrick v. Martin, 2011 ONSC 6203 (CanLII), 12 R.P.R. (5th)

256 (Ont. S.C.J.), reversed 2012 ONCA 711 (CanLII) (2012), 23

R.P.R. (5th) 1 (Ont. C.A.).

Lawrence v. Maple Trust Company, 2007 ONCA 74 (CanLII), 51

R.P.R. (4th) 1 (Ont. C.A.).

269 As Land Registry Ontario Bulletin 2007-02 does. 270 Where Land Registry Ontario Bulletin 2007-02 treats a notice as only of a

claim to the right of way, the practice should end. However, where the bulletin

asks that the application for a notice give "the rationale for the easement being

valid," the practice might be extended to include the records and analysis

relating to the right of way.



MacIsaac v Salo, 2012 ONSC 337 (CanLII); (2012), 14 R.P.R.

(5th) 320 (Ont. S.C.J.); reversed at 2013 ONCA 98 (Ont. C.A.), 29

R.P.R. (5th) 1 (Ont. C.A.); leave to appeal refused in Peggy

Charlene Salo, et al. v. S.J. Gossling, et al., 2013 CanLII 51821

(SCC); 2013 CarswellOnt 11359, 2013 CarswellOnt 11360

(S.C.C.).

Phinny v. Macaulay, 2008 CanLII 47015 (ON S.C.), 75 R.P.R.

(4th) 66 (Ont. S.C.J.).

Ramsay (2005): 1387881 Ontario Inc. v. Ramsay, 2004 CanLII

66338 (ON SC); 2005 CanLII 23211 (ON CA), 32 R.P.R. (4th)

161 (Ont. C.A.); leave to appeal refused 2006 CanLII 8856 (SCC),

(2006) 41 R.P.R. (4th) 208 (S.C.C.).

Syvan (2006): Syvan Developments Ltd., 2005, Ontario

government website (Nancy R. Sills, deputy director of titles);

Ontario v. Syvan Developments Ltd., 2006 CanLII 32430 (On S.C.)

(Cullity J.); (2006), 49 R.P.R. (4th) 161 (Ont. S.C.J.).

United Trust v. Dominion Stores et al., (1976), [1977] 2 S.C.R.

915; 1 R.P.R. 1 (S.C.C.).

Laws

References to Ontario Acts are to the consolidation of those acts,

as they appeared on the Ontario government website,

http://www.e-laws.gov.on.ca.

Canadian Model Land Recording and Registration Act (1993),

Renovating the Foundation: Proposals for a Model Land

Recording and Registration Act for the Provinces and Territories

of Canada, revised March 1993, Joint Land Titles Committee,

Alberta Law Reform Institute.

Uniform Marketable Title Act, 1990, National Conference of

Commissioners on Uniform State Laws (The Uniform Law

Commission), http://www.uniformlaws.org

Writings

1995 Article: John R. Wood, Valid Title under the Ontario

Registry System: How the Forty-Year Rule Works (1995), 45

R.P.R. (2d) 35.

1996 Consensus Position: Brian Bucknall, Title Searching under

the Ontario Registry Act after Fire v. Longtin: A Consensus

Position, (1996) 1 R.P.R. (3d) 173.


Registry System: How the Forty-Year Rule Works — A Revisit:

http://www.e-laws.gov.on.ca/

http://www.uniformlaws.org/



Difficult Choices, Rule Still Promotes Commerce and Protects

Interests, (2006), 48 R.P.R. (4th) 69.


Registry System: How the Forty-Year Rule Works — 2006

Changes — Rule Still Protects Rights, (2007), 49 R.P.R. (4th) 7.

The Land Transfer Acts, 1875 and 1897, Sir Charles Fortescue

Brickdale and William Robert Sheldon, Stevens and Sons,

Limited, 1899 and 1905 editions.

Appendix, selected cases

Durrani v. Augier (2000)

Outline of facts and decisions (Durrani v. Augier (2000))

The property was in the land titles system and the case dealt with

four mistaken registrations. A fraudster registered a forged

charge.271 After fraudulent court proceedings, he obtained two

default orders foreclosing the charge and he had the register

amended to show himself as owner. He transferred to a buyer,

who bought for a low price and who knew of the fraud, and the

buyer registered the transfer.272 The buyer gave a new charge to an

innocent bank, and the bank registered the new charge.

Epstein J. of the Ontario Supreme Court rightly decided to rectify

the register by removing three of the four mistaken registrations,

namely the forged charge, the foreclosure and the transfer. The

court mainly and rightly decided that fourth registration, the new

charge to the innocent bank, was valid. The court mistakenly

decided that it couldn't rectify the register to remove the new

charge.

Later, the director of titles accepted the court's decisions. The

director decided that the land titles system should compensate the

original owners for the amount needed to discharge the new charge

to the innocent bank.

271 The charge was in a "collateral loan agreement," given by one joint owner,

and it was registered as a "notice of security interest." There was a later

"additional security addition" from the other joint owner. The court didn't deal

with how, under section 82 of the Ontario Land Titles Act, the agreements might

have had effect as a registered charge, nor did the court refer to section 93,

under which the Act can guarantee a charge. 272 The actual buyers were two underage daughters of a real estate agent, but

they were trustees for their mother. The court didn't deal with any effect of the

actual buyers being under age.



Reasons (Durrani v. Augier (2000))

Although the decisions led to just results, the reasons for the

decisions relied more on the broad purposes of the Act than on its

actual effect. Unfortunately (and perhaps because of that), many

later cases have referred to the court's mistaken reasons. While the

case didn't deal with a right of way, Syvan (2006) and MacIsaac v.

Salo (2013) below referred to the court's mistaken reasons.

• First basic question: did a mistake cause the Act wrongly to take away an interest? (Durrani v. Augier (2000))

The court relied on a misinterpretation of the doctrine of deferred

indefeasibility under the Ontario Land Titles Act for all four

registrations. Having rightly stated the effect of section 87, the

court mistakenly went on to say that, under the doctrine of deferred

indefeasibility, it was also a condition for the Act to give an

interest that a person, who took for value under a registration,

should have acted in good faith and without notice.273 The court

mistakenly failed to say that the real condition was that there be a

transfer or charge, not a nullity in a forged and void document.

(See Giving key interests (land titles, principles).)

The court should separately have analyzed what the Act did for

each of the four registrations, as follows:274

• When the forged charge was registered, the Act gave no

interest, because the charge was in forged and void documents.

Here, the court would rightly have applied the doctrine of

deferred indefeasibility (as rightly interpreted).275

273 Paragraphs 43, 49 and 58. The court rightly relied on sections 87 and 155 of

the Ontario Land Titles Act, and on United Trust v. Dominion Stores (1976).

The court mistakenly didn't mention section 93, which shows what the Act does

for a charge. The court mistakenly relied on section 78(4) of the Ontario Land

Titles Act and on R.A. & J. Family Investment Corp. v. Orzech. In Lawrence v.

Maple Trust Company (2007), the Ontario Court of Appeal later decided that

section 78(4) only made a minor administrative change, and the court in effect

overruled R.A. & J. The court mistakenly didn't refer to older cases on deferred

indefeasiblity, especially Attorney General v. Odell (1906). Despite the above,

the court seemed to accept in some places (for example, in paragraphs 42a, 52,

54, 57, 59, 71 and 75) that lack of good faith or notice only prevented a

particular person from taking the benefit of the Act. 274 The court might mistakenly have treated one registration as depending on

another, where paragraphs 55 and 57 referred to an instrument being a "good

root of title." 275 Paragraph 78.



• When the defective foreclosures were registered, the Act gave

no interest, because the Act doesn't give an interest when the

register is merely amended to change the registered owner.276

It's unclear what the court decided about the amendment.277

• When the transfer was registered, the Act gave the fee simple to

the buyer, because the transfer wasn't in a void document. But

fraud or the equitable doctrine of actual notice prevented the

buyer from taking the benefit of the Act, because the buyer had

actual notice of the fraud. (See Particular person being unable

to benefit from given interest (land titles, principles).)

• When the new charge to the innocent bank was registered, the

Act gave a charge to the bank, because the charge wasn't in a

void document. Here, the court would rightly have applied the

doctrine of deferred indefeasibility (as rightly interpreted). The

equitable doctrine of actual notice didn't prevent the bank from

taking the benefit of the Act, because the bank didn't have

actual notice of the fraud.278

• Second basic question: will a mistake be rectified? (Durrani v. Augier (2000))

The court rightly decided that, when a mistake in the land titles

register doesn't take away an interest, the Ontario Land Titles Act

requires the mistake to be rectified.279 The court mistakenly

decided that, when a mistake in the land titles register does take

away an interest, the Ontario Land Titles Act doesn't allow the

register to be rectified.280 (See (2) Rectification (land titles,

principles, mistakes).)

276 Ontario Land Titles Act, section 75, and see Giving key interests (land titles,

principles). 277 In paragraph 55, the court used two descriptions, "fraudulent" and "absolutely

void if unregistered." There were four events, the charge (which was fraudulent

and void, for forgery), the court's foreclosure order (which had later been set

aside, but hadn't been fraudulent or void), the application to amend (which was

fraudulent, but not void) and the system's amendment to the register (which the

court called a "transfer," and which was mistaken, but not fraudulent or void). 278 Instead of going through this two-step reasoning, the court mistakenly

collapsed it by deciding that the Act protected the bank, because the bank was a

bona fide mortgagee for value without notice (paragraphs 73 and 74). The court

also mistakenly suggested that the Act protected the bank, because the bank

relied on the register (paragraph 74). See a footnote under Particular person

being unable to benefit from given interest (land titles, principles). 279 The court rightly based this on sections 159 and 160. 280 Paragraphs 51 and 76. The court mistakenly didn't refer to sections 57(13)

and 158(3), which allow the register to be rectified even where a mistake does

take away an interest.



Again, the court should separately have analyzed whether the Act

allowed each registration to be rectified, as follows:

• The court rightly decided that, because the forged registered

charge gave no interest, the register had to be rectified to

remove the charge.

• The court rightly decided that, because the defective foreclosure

orders gave no interest, the register had to be rectified to

remove the fraudster as the registered owner.

• When the transfer was registered, the Act gave the fee simple to

the buyer, but the equitable doctrine of actual notice prevented

the buyer from taking the benefit of the Act. So the court

rightly decided that the register had to be rectified to remove the

transfer. But the reason should have been that the owners had a

right to consequential relief, which would have led to the

register being rectified.281 (See Particular person being unable

to benefit from given interest (land titles, principles).)

• When the new charge to the innocent bank was registered, the

Act gave a charge to the bank, and the equitable doctrine of

actual notice didn't prevent the bank from taking the benefit of

the Act. But, contrary to what the court decided, the Ontario

Land Titles Act still allowed the register to be rectified in a just

way.282

• Third basic question: after a mistake, will the land titles system compensate? (Durrani v. Augier (2000))

When the register contained a mistake and the mistake didn't take

away an interest, the system didn't need to compensate for the

value of the interest. When the register contained a mistake and

the mistake did take away an interest, the system had to

compensate some person, but the person to be compensated

depended on whether the system rectified the register.283 (See (3)

Compensation (land titles, principles, mistakes).) The court

rightly decided that the system should compensate the owners for

281 In paragraph 52, the court seemed rightly to accept that the consequential

relief could include rectification under section 159 or 160. 282 Sections 57(13) allowed this, with compensation, because a previous

registered disposition (the charge) had been void or because the mistake could

have led to the owners being deprived of land of which they'd been in

possession. In this case and in paragraphs 51, 76 and 77, the court accepted that

it would have been just to remove the new charge (which would have led to the

system having to compensate the bank). 283 In this case, the law before the 2006 changes applied.



the amount needed to discharge the new charge, and the director

rightly decided that the system would do so.284

• Fourth basic question: after a mistake, will anyone, other than the system, bear the loss? (Durrani v. Augier (2000))

Neither the court nor the director dealt with whether anyone, other

than the system, should bear the burden of the compensation.285

Ramsay (2005)

Facts and decisions (Ramsay (2005))

Three registered transfers severed parts of one property. Each

transfer created a right of way, for the benefit of the new property,

over the rest of the one property. More than 40 years had elapsed

since each of the three transfers that had created the right of way

was registered.

During a period of 40 years after each of the three transfers that

had created the right of way, there'd been a registered transfer of

the subject-to property, which said that it was subject to the right

of way. And, during that period, there'd been a registered transfer

of each together-with property, which said that it was together with

the right of way and which was registered against the subject-to

property. A further period of 40 years, after the last of every above

transfer, hadn't ended.

For each property, there'd been a further such registered transfer

during the further period. However, during the further period,

there hadn't been a registered transfer of one together-with

property, which said that it was together with the right of way.

And, during the further period, the last and most recent registered

transfer of the subject-to property didn't say that it was subject to

the rights of way.

284 This article doesn't comment on the director's decision not to compensate for

some losses. Fraud or the equitable doctrine of actual notice would have

prevented the buyer from taking the benefit of any land titles compensation for

the transfer being removed. 285 The director only dealt with the need to recover compensation as a first resort

from the buyer or fraudster. In the end, the new charge had unjustly enriched

the fraudster. Section 57(1) might have confirmed that the fraudster was liable

on this ground (by making a person liable for "what is just, by way of

compensation or damages"). But the section described the person who was

liable too narrowly, because the fraudster was neither "the person on whose

application the erroneous registration [of the new charge] was made or who

acquired the title [under the new charge] through the fraud or error."



No notice of claim had ever been registered for the rights of way.

For this reason, the owner of the subject-to property claimed that

the Ontario 40-year rule had caused the rights of way to end.

In a very thoughtful and well-reasoned decision, the Ontario Court

of Appeal decided that the Ontario 40-year rule hadn't caused the

rights of way to end. The Supreme Court of Canada dismissed an

application for leave to appeal.286

Reasons (Ramsay (2005))

The main reason of the Ontario Court of Appeal in Ramsay (2005)

was that, under the 1981 changes to the Ontario 40-year rule, a

registered instrument could start a new period under the

registration sub-rule. This had to be an instrument that the interest

was "set forth in, based upon or arising out of." The instrument

didn't have to be one that created or asserted the interest, but could

be one that merely referred to the interest.287

For a right of way, the court decided that a registered transfer of

the subject-to property, which said that it was subject to the right

of way, started a new period. The court also decided that a

registered transfer of the together-with property, which said that it

was together with the right of way, started a new period.

The Ontario Court of Appeal dealt with many of the issues over the

Ontario 40-year rule in this article, and footnotes in this article

show how it did so. However, as the footnotes show, the court

didn't confirm (as earlier cases had) that, where the chain of title

sub-rule and the registration sub-rule conflict, they must work

together (see Two sub-rules working together (registry 40-year

rule, principles)).

In 2006, the Ontario government amended the Ontario Registry Act

to try retroactively to reverse Ramsay (2005). As this article

shows, Land Registry Ontario interprets the 2006 changes as

retroactively relieving the land titles system from having to

compensate for a past mistake over an easement.

However, as this article explains, Land Registry Ontario's

interpretation is mistaken, for two reasons. (1) The 2006 changes

286 It seems reasonable to assume that the Supreme Court of Canada felt that

there could be no need to revisit the excellent reasons of the Ontario Court of

Appeal. 287 However, the court confirmed that a dotted line in a sketch, which had been

attached to an expropriation plan in the Camrich case, and which had shown a

hydro right of way in a strip of land in that case, hadn't been enough to preserve

hydro's fee simple in the strip. The Ontario Superior Court of Justice made a

similar finding in Phinny v. Macaulay (2008).



to the Ontario 40-year rule couldn't logically have invalidated an

easement that was more than 40 years old, if the chain of title for

the 40-year period showed the easement. (2) The 2006 changes to

the Ontario 40-year rule weren't retroactive in a way that could

relieve the land titles system from having to compensate for a past

mistake over an easement (see Background (registry 40-year rule,

principles)). Therefore, under (1), the 2006 changes make

virtually no difference in the result, either before or after the 2006

changes took effect (see Two sub-rules working together (registry

40-year rule, principles)). And, under (2), the reasons in Ramsay

(2005) and earlier cases continue to apply to a conversion to land

titles before December 20, 2006 (see Retroactivity (registry 40-

year rule, principles)).

Syvan (2006)

Facts and decisions (Syvan (2006))

A commercial property in registry had the benefit of a right of way

to the rear. Later, a municipality registered an expropriation,

which took away both the subject-to land and the right of way.

Ontario converted both properties from registry to land titles in

2000. The register for the formerly together-with land said that the

property was as described in a registry transfer, which mistakenly

said that the property had the benefit of the former right of way.

The register for the formerly subject-to land must have described

the property by referring to the expropriation and must not have

referred to the former right of way, but it showed that the

municipality had expropriated the former right of way.

After the conversion, a transfer of the together-with land to a buyer

was registered. The buyer's lawyer hadn't fully searched the

register for the formerly subject-to land. The lawyer had only

searched that land, as an adjoining property, to check that there'd

been no contravention of the subdivision control provisions of the

Planning Act.

After finding the mistake, the land registrar amended the register

for the formerly together-with land, by adding words to the

description saying "save and except the easement contained

therein."

The buyer obtained another access to the back of the property, by

buying land and demolishing part of the buyer's building. The

buyer's title insurer compensated the buyer for the costs of doing

this. The title insurer then applied for the buyer's compensation

from the system by subrogation.



As shown below, the director and court mistakenly assumed that

the Ontario Land Titles Act would have required the system to

compensate for the mistake. The director and court decided that

the title insurer wasn't entitled to the land titles compensation,

because the buyer, as claimant, had "caused or substantially

contributed to the loss by the claimant's act, neglect or default."288

Reasons (Syvan (2006))

On the issues with which this article deals, the reasons of the

director and court were fundamentally mistaken. Those reasons,

the correct reasons, and the effect of the case, are as follows:

• For the conversion and transfer to the buyer, both the director

and court mistakenly treated the Ontario Land Titles Act as

having guaranteed that the right of way was valid. The director

mistakenly based this on the buyer having purchased in good

faith and without actual notice that the right of way had been

expropriated.

For the conversion and transfer to the buyer, the Act couldn't

have guaranteed that the right of way was valid, for two

reasons. (1) The register for the subject-to land governed, and it

must not have referred to the former right of way, except that it

did show that the municipality had expropriated the former right

of way. (2) Even if the register for the subject-to land had

shown that the land was subject to the former right of way,

section 39 of the Act and the words, "together with all rights,"

in sections 45 and 87 of the Act would have shown that the Act

couldn't have guaranteed that the right of way was valid.

As to (1), the director didn't refer to it, and the court only

refused to decide whether the lawyer should have searched the

register for the subject-to land. As to (2), neither the director

nor the court dealt with any of the relevant sections of the

Ontario Land Titles Act. Therefore, the case is no authority for

treating the Act guaranteeing a right of way.

• For the land registrar's amending the register to say "save and

except the easement contained therein," both the director and

court merely assumed that the amendment had taken away the

right of way, which the director and court had mistakenly

treated the Act as having guaranteed.

288 Both the land titles system and the buyer had been at fault, but the decision

unjustly put 100% of the burden of the loss on the buyer. The court decided or

commented on a number of issues relating to compensation and procedure, and

mostly correctly so.



For the land registrar's amending the register, the Act couldn't

have guaranteed that the right of way was invalid, for two

reasons. (1) The register for the subject-to land governs, and

the land registrar hadn't amended it. (2) Even if the register for

the subject-to land had been amended to use words like "save

and except the easement contained therein," those words

wouldn't have meant that the right of way was invalid.

Therefore, the case is no authority for treating the words,

"except the easement therein," as meaning that the easement is

invalid.

Kendrick (2011)

Facts and decisions (Kendrick (2011))

An instrument for properties in registry had created a right of way

more than 40 years before a conversion to land titles.

A transfer of the together-with land had been registered less than

40 years before the conversion. It had said that the land was

together with the right of way.

The last transfer of the subject-to land had been registered both

less than 40 years before the conversion, and less than 40 years

after the instrument that had created a right of way.289 It had said

that the land was subject to the right of way.

In 2007 (and after the 2006 changes to the Ontario 40-year rule),

the Ontario government had converted the together-with property

to land titles for electronic registration, but hadn't converted the

subject-to property.290 The new land titles register for the together-

with property had said that the property was together with the right

of way.

After the conversion, there'd been a registered transfer of the

together-with land, and it had said that it was together with the

right of way.

Later, a notice of claim had been registered for the right of way

against the subject-to land (which was still in registry), but more

289 As shown below, the court mistakenly decided that section 113(2)(b) of the

Ontario Registry Act extended the time after the 40 years, to register a notice of

claim, until a conflicting claim was registered. Therefore, because the above

transfer was registered within the 40 years after the instrument that had created a

right of way, it couldn't (as the court concluded) have been one that cut off the

supposed extended time to register a notice of claim. 290 One of the lawyers in the case, John D. Goudy, confirmed this, but the

reasons mistakenly assumed that the Ontario government had converted both

properties.



than 40 years after the transfer that had created a right of way.

Apart from this notice of claim, there'd been no registered notice of

claim against the subject-to land for the right of way.

One issue in the case was whether the right of way was valid. The

Ontario Superior Court of Justice rightly decided that the right of

way was valid, but for a mistaken reason. There was an appeal to

the Ontario Court of Appeal, but it was on an issue that had

nothing to do with the validity of the right of way (and the Ontario

Court of Appeal allowed the appeal on that issue).

Reasons (Kendrick (2011))

• Ontario 40-year rule (Kendrick (2011))

The Ontario Superior Court of Justice rightly decided that the right

of way was valid, but for a mistaken reason. This was that the

registration sub-rule had extended the time after the 40 years to

register the notice of claim (which is contrary to the explanation in

When interest given (registry 40-year rule, principles)).291

The court should have decided that the right of way was valid for

the following reasons:

• Under the Ontario 40-year rule, on the conversion, the chain of

title sub-rule had given the right of way to the owner of the

together-with land. It had done so, even if the right of way

could have ended under the registration sub-rule. (See Giving

an interest, Two sub-rules working together, When interest

given and Giving any interest.)

• Under the Ontario 40-year rule, at the time of the conversion in

2007, the 2006 changes were partly, but naturally, retroactive,

in that the 2006 changes might have caused a change in title on

or after the law or change took effect, based on past events (see

Retroactivity.) But, under the 2006 changes, even if the right of

way could have ended under the registration sub-rule, the chain

of title sub-rule had preserved it (see above and Preserving

possible interest).

• Under the Ontario 40-year rule, the exception for a right of way

openly used would have protected the right of way when the

291 See paragraph 45: "... ss. 113(2) provides for the registration of a notice of

claim at any time after the expiration of the notice period but before the

registration of any conflicting claim of a purchaser in good faith for valuable

consideration of the land."



subject-to owner acquired the subject-to property (see

Exceptions).292

• Even if the right of way had ended under the Ontario 40-year

rule, the subject-to owner couldn't have taken the benefit of that,

for example, because of the equitable doctrine of actual notice

or because there'd been an agreement that could have prevented

that owner from disregarding the easement. (See Particular

persons unable to benefit from given interest.)293

• Ontario Land Titles Act (Kendrick (2011))

The Ontario Superior Court of Justice mistakenly assumed that the

Ontario Land Titles Act had guaranteed the right of way,294

(contrary to the conclusions in General rules (land titles, rights of

way), and without the court having referred to any of the relevant

sections of the Act). The court rightly assumed that section 160 of

the Act gave the court the power to rectify the register (and the

court might also have referred to section 159). But, if the Act had

guaranteed the right of way (as the court mistakenly assumed),

only section 57(13) could have given the court the power to rectify

the register. In any event, the court said that it couldn't have

declared that the right of way was invalid, because that would have

meant rectifying the land titles register; only the Ontario Land

Titles Act could have allowed the court to rectify that register; and

the statement of claim hadn't asked for the court to rectify that

register under that Act. (See (2) Rectification (land titles,

principles, mistakes).)

If the statement of claim had asked the court to rectify the land

titles register, the court should have decided as follows:

• In the Ontario land titles system, the register for the subject-to

land governs. In this case, the subject-to land hadn't been

converted to land titles, and so the Ontario Land Titles Act

didn't apply to the right of way (see Register for subject-to land

generally governs (land titles, rights of way, practice)). Where

the land titles register for the together-with land showed the

292 The court found it unnecessary to deal with this (see paragraph 48). 293 The court found it unnecessary to deal with these issues (see paragraph 48). 294 It did so in paragraph 49, in which the court must have meant to say, "At the

date of conversion of the dominant tenement and servient tenement lands into

the land titles system, and at the date of the registration in or about 2008 of the

transfer/deed by Martin to himself and the defendant Veitch referring to the right

of way in such transfer/deed, the registrations had the effect of rendering the

right of way in the Easement a right acquired by the defendants "by registration

under the Land Titles Act.""



right of way, that was a mere cross-reference (see General rules

(land titles, rights of way, section 39)).

• Even if the subject-to land had been converted to land titles, a

right of way wasn't included in the key interests in land that the

Ontario Land Titles Act could guarantee (see General rules

(land titles, rights of way)).

• Even if the subject-to land had been converted to land titles,

when the land titles system makes a mistake and the mistake

doesn't take away what would otherwise have been a valid

interest, the system should always rectify the mistake (see (2)

Rectification (land titles, principles, mistakes)). Therefore, the

issues of compensation and burden of loss wouldn't have arisen

(and the court rightly didn't deal with them).

• If the easement had ended under the Ontario 40-year rule, since

the Ontario Land Titles Act couldn't have guaranteed the right of

way (for the above reasons), issues under the equitable doctrine

of actual notice and other factors couldn't have arisen (see

Particular person being unable to benefit from given interest

(land titles, principles)).

The footnotes in this article show how the Ontario Superior Court

of Justice dealt with other issues.

MacIsaac v. Salo (2013)

Facts and decisions (MacIsaac v. Salo (2013))

In MacIsaac v. Salo (2013), a private road went from a main

access road through three properties. The first property, nearest

the main access road, was subject to rights of way for the private

road in favour of the other two properties. Transfers registered in

land titles showed that the rights of way were over strips shown in

a reference plan, and the registers must have shown that the

properties were subject to or together with the rights of way over

the strips shown in the reference plan.

The private road had been an existing road, and the owner, who'd

severed the properties and who'd created the rights of way, had

intended the plan to show the existing private road. The surveyors,

who'd prepared the plan, had mistakenly omitted to show a dip in

the private road around a large rock outcrop. It would have been

hard to remove the outcrop. At the time of their registered

transfers, none of the parties had known that the plan didn't show

the existing private road, including the dip, and all of the parties

discovered that only after their registered transfers.



The current owner of the property that was subject to the rights of

way, Peggy Salo, had only received a transfer through parties to

the transfers that had created the rights of way over her property.

The owners, who were claiming the rights of way, had been parties

to transfers that had created the rights of way.

Peggy Salo had objected to heavy vehicles using the private road,

and she'd claimed that the other owners had no right to use the dip

around the large rock outcrop.

The Ontario Superior Court of Justice decided not to order the

registers to be rectified, so that the other owners didn't have a right

to use the dip around the large rock outcrop. The Ontario Court of

Appeal decided to order the registers to be rectified, so that the

other owners did have that right. The Supreme Court of Canada

denied leave to appeal.

Reasons of Ontario Court of Appeal (MacIsaac v. Salo (2013))

The reasons of the Ontario Court of Appeal in MacIsaac v. Salo

(2013) are hard to follow, because they repeat the same reason or

comment, sometimes inconsistently; leave out steps in the

reasoning; or put steps in a misleading order.295 Unfortunately,

Ontario missed an opportunity to have the Ontario Court of Appeal

make an important decision on the Ontario Land Titles Act.

• Effect of mistakes (MacIsaac v. Salo (2013))

The Ontario Court of Appeal accepted that the land titles register

would contain a mistaken entry, if an interest under the law, apart

from the Ontario Land Titles Act, differed from what the register

showed.296

The current owner of the property that was subject to intended

rights of way, Peggy Salo, had only received a transfer through the

parties to the transfers that had created the rights of way over her

property. Despite that, the Ontario Court of Appeal must have

decided that, under the law, apart from the Ontario Land Titles Act,

the intended rights of way bound Peggy Salo.297

The Ontario Court of Appeal decided that the common intention

governed the interests under the law, apart from the Ontario Land

295 Especially in paragraphs 38, 42 and 54. 296 Paragraph 36. 297 This issue didn't arise in 719083 Ontario Limited v. 2174112 Ontario Inc.,

2013 ONCA 11 (CanLII), because the buyer was directly bound by the personal

claim for equitable rectification of the mistake.



Titles Act, but didn't explain how that common intention bound

Peggy Salo.298 The court mistakenly decided to order the land

titles system to rectify the register in this case, because it was just

to do so, and decided that it was just to do so, because that was the

common intention.299

The analysis is complicated both because there were several

mistakes or possible mistakes, and because there were several

kinds of documents that the mistakes did, or might have, affected

in different ways. There was the admitted mistake of the surveyors

in preparing the reference plan, which had led to all the other

mistakes. There were the mistakes in the transfers that had created

the rights of way, in referring to the reference plan. There was a

mistake in a transfer subject to the existing rights of way. And

these led to the mistakes in the entries in the registers.

The court might have decided that, under the law, apart from the

Ontario Land Titles Act, the intended rights of way bound Peggy

Salo, in the following ways:

1. In light of where the road actually was, when the transfers that

had created the rights of way were properly interpreted, they

gave rights of way over the actual road, despite the plan, and

Peggy Salo was simply bound by this interpretation. A

transfer has the same effect for all purposes as if it was a

deed.300 In effect, because persons, other than the parties to

the transfers, would rely on those transfers as title deeds, those

transfers had to be interpreted objectively. In the same way,

the entries in the register had to be so interpreted. This way,

in which Peggy Salo could be bound, would be the most

logical.

2. The transfers that had created the rights of way also included

an implied right of way over the actual road, under section 15

of the Ontario Conveyancing and Law of Property Act, or

under the common law, either under the doctrine in Wheeldon

v. Burrows or as rights of way of necessity. Peggy Salo was

bound by these implied rights of way, because they were

"overriding rights" under section 44(1)2 of the Ontario Land

Titles Act. This way, in which Peggy Salo could be bound,

would be logical, but less so than 1.

298 Paragraph 1. 299 Paragraph 53. 300 Section 13 of the Ontario Land Registration Reform Act and Friedmann

Equity Developments v Final Note Ltd., 2000 SCC 34 (CanLII)).



3. The transfers that had created the rights of way had been

intended to, and did, give the original buyers unregistered

rights of way over the actual road. When Peggy Salo received

her transfer, she had enough actual notice of these

unregistered rights of way to make it unconscionable for her to

take the benefit of the plan. This way, in which Peggy Salo

could be bound, would depend on whether Peggy Salo had the

needed notice.

4. The original buyers had an equitable right to rectification of

the transfers that had created the rights of way, and Peggy

Salo was bound by that right through some kind of notice,

perhaps constructive notice. This way, in which Peggy Salo

could be bound, would depend on whether Peggy Salo had the

needed notice.

5. Even if the right of way had been only over the road shown in

the plan, both Peggy Salo's transferor and she had intended her

transfer to be subject only to a right of way over the actual

road. This way would be illogical, because her later transfer

shouldn't change the effect of the transfers that had created the

rights of way.

It's unclear in which of the above ways the Ontario Court of

Appeal found that Peggy Salo was bound by the intended rights of

way, but 1 seems to be the most consistent with the Court's

reasons.301

• First basic question: did a mistake cause the Act wrongly to take away an interest? (MacIsaac v. Salo (2013))

The Ontario Court of Appeal in effect and rightly decided that the

first basic question was: (1) Effect of register: did a mistake cause

the Act wrongly to take away an interest?302

In its answer to question (1), the Ontario Court of Appeal rightly

decided that the mistake didn't cause the Ontario Land Titles Act

wrongly to take away a right of way over the dip in the road. The

court's reason, as far as it went, was rightly that the Act didn't

301 The court seems to have assumed in paragraph 52 that, if there'd been a right

of way over the part on the reference plan, there couldn't also have been a right

of way over the dip in the road. 302 Paragraph 36.



guarantee boundaries, including those of a right of way.303 The

court's reasons were as follows:

• Although a transfer or charge must usually describe land by

referring to a deposited reference plan, a reference plan only

describes land, and doesn't itself create an interest in land.304

• Even where a registered transfer or charge describes land by

referring to a deposited reference plan, although the description

is part of the transfer or charge, section 140(2) shows that a

description in the register isn't "conclusive as to the boundaries

or the extent of the land."305

• Section 140(2) also applies to the boundaries of an easement.306

• The above rightly reflects the survey principle that the actual

boundaries of land are those established on the ground, so that a

reference plan (being a plan of survey) is only a description of

what's actually on the ground.307

• The Ontario Court of Appeal had rightly so decided in Lumme

v. Eagle Point, L.L.C.308

As shown in 4 below, the Ontario Court of Appeal mistakenly and

needlessly commented, among other things, that the Ontario Land

Titles Act could give (or guarantee) an easement, unless the

purchaser had actual notice of a competing interest. But, since the

mistake didn't cause the Ontario Land Titles Act wrongly to take

away a right of way over the dip in the road, the Ontario Court of

Appeal rightly decided that actual notice couldn't in this case be

relevant on the issue of whether the Act wrongly took away an

interest.309

The Ontario Court of Appeal mistakenly and needlessly

commented (in obiter dicta) that, subject to the above, and based

on section 78(4), the Ontario Land Titles Act could give (or

303 Paragraphs 36, 41, 43 to 48, 49, 50, 52, 55 and 56. 304 Paragraphs 43, 44, 45, 52 and 56. 305 Paragraphs 45, 46, 49, 51, 52 and 56. 306 Paragraph 50. 307 Paragraphs 47 and 48. See also William D. Snell, Surveyors, Surveys and the

Ontario Land Registration System, The Law Society of Upper Canada, The Six-

Minute Real Estate Lawyer 2012. 308 2011 ONCA 291. Paragraphs 45 and 46. 309 Paragraphs 36, 37, 41 and 55.



guarantee) an easement, where the purchase or mortgage was for

value, in good faith and without actual notice.310 As to this:

• The words were only a comment (obiter dicta), because, as

shown above, the Ontario Court of Appeal rightly decided, for

other reasons, that the mistake didn't cause the Ontario Land

Titles Act wrongly to take away an interest. The court accepted

that the words were only a comment.311

• The comment was mistakenly based on section 78(4), because

the true meaning of section 78(4) of the Ontario Land Titles Act

is that, when the land titles system completes the registration of

an instrument, the Act only does what it would normally do for

the instrument.312

• The comment was mistaken, because the Ontario Court of

Appeal didn't refer to or deal with the key sections 39 and 87 of

the Ontario Land Titles Act, which show that the Act can't give

(or guarantee) an easement. The Ontario Court of Appeal can't

be taken to have been interpreting sections to which the court

didn't even refer.

• The comment was mistaken, because, subject to the above, the

Ontario Land Titles Act can give an interest to a purchaser for

value, regardless of whether the purchaser is bona fide or has

actual notice. However, a particular person may be unable to

take the benefit of the interest, for example, if equity prevents

that person from doing so because the person had actual notice.

Despite the Ontario Court of Appeal's comment, some of the

court's words suggest that the court accepted that only a

particular person would be unable to take the benefit of an

interest.313

310 Paragraphs 38 to 41 and 42. 311 Paragraph 41. 312 Paragraphs 42, 46 and 56. See a footnote under Giving key interests (land

titles, principles). 313 Paragraphs 38, 39, 40 and 54. This is only one of the decisions of Ontario

courts that misleadingly collapse the correct reasoning, by saying that the Act

can only give an interest to "a bona fide purchaser without notice" (for example,

in 719083 Ontario Limited v. 2174112 Ontario Inc., 2013 ONCA 11 (CanLII),

which, like this and other cases, mistakenly followed Durrani v. Augier (2000).

See a footnote under Particular person being unable to benefit from given

interest (land titles, principles).



• Second basic question: will a mistake be rectified? (MacIsaac v. Salo (2013))

The Ontario Court of Appeal in effect and rightly decided that the

second basic question was: (2) Rectification: will a mistake be

rectified?314

The Ontario Court of Appeal rightly decided that, if a mistake

doesn't cause the Act wrongly to take away an interest, sections

159 and 160 allow the courts to order the land titles system to

rectify the register. This is because the proviso to sections 159 and

160 doesn't then prevent the courts from ordering the land titles

system to rectify the register.315

Although the Ontario Court of Appeal mistakenly commented that

the Ontario Land Titles Act could give an easement, the court

didn't comment on rectifying a mistake if the Act did give an

easement. If the Act had only given the easement on the plan, the

court could still have rectified the register (see (2) Rectification

(land titles, principles, mistakes).

• Third basic question: after a mistake, will the land titles system compensate? (MacIsaac v. Salo (2013))

The Ontario Court of Appeal didn't refer to or deal with the third

basic question: (3) Compensation: after a mistake, will the land

titles system compensate? The answer would have been that, since

the mistake didn't cause the Act wrongly to take away a right of

way over the dip in the road, the land titles system wouldn't

compensate.

Although the Ontario Court of Appeal mistakenly and needlessly

commented that the Ontario Land Titles Act could give an

easement, the court didn't go on to comment on compensating for a

mistake, if the Act did give an easement.

• Fourth basic question: after a mistake, will anyone, other than the system, bear the loss? (MacIsaac v. Salo (2013))

The Ontario Court of Appeal didn't refer to or deal with the fourth

basic question: (4) Burden of loss: where the land titles system

must compensate for loss of the value of an interest caused by a

mistake, will a person, other than the land titles system, bear the

314 Paragraph 49. 315 Paragraphs 42, 49, 52 and 54 to 56. The Ontario Court of Appeal probably

mistakenly decided that it should order the register to be rectified under section

160, rather than section 159.



burden of that compensation? The answer would have been that,

since the land titles system wouldn't compensate, the question

didn't arise of whether anyone, other than the system, bore the

burden of the compensation.

The Ontario Court of Appeal mistakenly and needlessly

commented that the Ontario Land Titles Act could give an

easement. But the court didn't go on to comment on whether a

person, other than the land titles system, should bear the burden of

that compensation.

Appendix, government conversion procedures, general summary

Introduction

When land is converted from registry to land titles, the title

depends, among other things, on a search in registry and on the

Ontario 40-year rule. Ontario used a streamlined process to

convert registry properties to land titles and assumed a risk over

compensation. A document entitled Implementation Procedures -

Title, as amended from time to time, contained the streamlined

process. This article refers to that document as the government

conversion procedures. The procedures may not have complied

with the legal framework for those procedures.316

This Appendix, government conversion procedures, general

summary summarizes the key part of the government conversion

procedures dealing with the search in registry under those

procedures. In the procedures, the part is headed Implementation,

3 Data Collection—Land Titles Conversion, and is contained

mainly in sections 3.1 to 3.5 of that part.

Search, abstract index

Normal search (search, abstract index)

A government conversion of a property is from registry to land

titles, and so the search for a government conversion is a search in

the registry system, under the Ontario Registry Act.

The registry system, among other things, (1) keeps a register,

which lists each registered instrument or deposit for a property or

group of properties, and which is called the "abstract index," and

316 See Land titles conversions from registry.



(2) allows the searcher to see (or "pull") a copy of each registered

instrument or deposit.

The abstract index is normally in order of date of registration. It

shows in columns the kind of instrument, the parties and other

main details, and it has a "Land and Remarks" column for short

descriptions and comments.

A title searcher would normally prepare an "abstract of title." This

would sometimes contain a copy of the abstract index. It would

summarize every registered instrument or deposit in the 40-year

period for the property being searched. And a copy of an

instrument or deposit would often accompany it.

Where the abstract index was for group of properties, the title

searcher had to include every registered instrument or deposit for

the property being searched. For this purpose, the searcher would

mainly check the descriptions of the property in every instrument.

Streamlined search, (1) basic entries (search, abstract index)

Under the government conversion procedures, the searcher had

first basically to follow the normal procedure. The searcher had

basically to enter on the computer, (or "account for") every

registered instrument or deposit for the property being searched.

However, under the government conversion procedures, this was

subject to the following:

• The searcher had to enter the starting point and transfers of

ownership, as required by the 3-Deed/10-Year Rule below.

• For a transfer of ownership not required by the 3-Deed/10-Year

Rule, where the remarks column of the abstract index showed

that the transfer also showed an interest, other than ownership,

the searcher had to ensure that the new land titles register would

show the other interest (by entering the document or another

document that had created the interest).

• For any document required to check that there'd been no

contravention of the subdivision control provisions of the

Planning Act, the searcher had to enter it in a way that showed

that it was entered only for that purpose.

• The searcher didn't need to enter a transfer of ownership not

required by the above.

• The searcher didn't need to enter a document that had been

ruled-out in the register.



• The searcher had to enter a deposit, where (1) it showed that a

mortgage power of sale had been properly exercised or (2) it

cleared a title problem (for example, a spousal interest after a

death or a boundary problem), but didn't need to enter any other

deposit.

Streamlined search, (2) bringing forward to new land titles register (search, abstract index)

Under the government conversion procedures, the searcher had

secondly to ensure that the new land titles register would show the

interest in every registered instrument that had been entered (or

had to "bring forward" the interest), in the following ways:

• For the ownership, the searcher had to ensure that the new land

titles register would correctly show the current owner or

owners, in the way shown below.

• For the ownership, where a starting point or transfer of

ownership was to the current owner, the searcher also had to

ensure that the new land titles register would show that

document, in the way shown below.

• For the starting point or a transfer of ownership required by the

3-Deed/10-Year Rule, the searcher had to read and check the

document. The document might also show an interest, other

than ownership. Then, the searcher had to ensure that the new

land titles register would show the other interest in the

document (by entering that document or another document that

had created the interest).

• For a transfer of ownership not required by the 3-Deed/10-Year

Rule, the remarks column of the abstract index might show an

interest, other than ownership. Then, the searcher had to ensure

that the new land titles register would show the other interest in

the document (by entering that document or another document

that had created the interest).

• Even where a document showed an interest, other than

ownership, if more than one document showed the same

interest, the searcher was to try to ensure that the new land titles

register would only show the document that had created the

interest.

• If the searcher found a document that had mistakenly been

registered against the wrong property (a "misdescribed

document"), the searcher was to obtain approval before

ensuring that the new land titles register wouldn't show the

document.



• For any document that only showed an interest, other than

ownership, if the interest appeared not to be valid, the searcher

had to obtain approval before ensuring that the new land titles

register wouldn't show the document.

Search rules, general

Basic search rules

The procedures contain the following:

• "Search the chain of title in the Abstract Index for any

outstanding interests and encumbrances for a 40 year search

period. The searching start date is January 1st of the year that is

40 years prior to the present year."

• "Pull and look at ownership documents back at least 3 deeds or

back the last 10 years, whichever is greater." This is the "3-

Deed/10-Year Rule."

• "Assign PINs..."

10-year and 40-year dates

These dates were based on January 1 in the year. For example, if

the search was started in 1992, the 10-year date was January 1,

1982 and the 40-year date was January 1, 1952.

Hidden interest

The procedures refer to a "hidden interest." This is an interest,

other than ownership, that a document outside the 3-Deed/10-Year

Rule would have shown, if the document had been read and

checked. The procedures don't treat that hidden interest as a risk.

Either the interest would have ended, or the government

conversion procedures would find it, because the remarks column

in the abstract index would usually show it. The procedures give,

as examples of a hidden interest, a vendor's lien, a life estate or

interest and a restriction or covenant.

Quit claim

Several parts of the government conversion procedures refer to a

quit claim. These show that a quit claim, for example, (1) might

transfer ownership; (2), by transferring ownership from a borrower

to the lender, might cause a mortgage to end; (3) might release an

interest, other than ownership (for example, an easement); or (4)

might clear a defect in title, for example, by correcting the

description of the property.



Correcting transfer

A correcting transfer could be a transfer that corrected a mistake in

the description of the land in a previous transfer. (If so, the

searcher had also to enter the transfer that was being corrected.)

However, the procedures accept that a correcting transfer could do

more than merely correct a mistake in the description of the land,

and that there could be no "hard and fast rule" for it.

Deposit

Several parts of the government conversion procedures refer to a

deposit. As said, among other things, the "abstract index" lists

each deposit and a searcher can see a copy of each deposit. A

deposit doesn't have effect as a registered instrument. However,

for example, a deposit could show that a sale under a power of sale

in a mortgage was valid, could prove a death, could clear up a

problem on title and could even contain a document that should

have been registered. In these cases, the searcher was to read and

check the deposit.

Search rules, (1) ownership

3-Deed/10-Year Rule, as set out in government conversion procedures

As said, one general search rule is: "Pull and look at ownership

documents back at least 3 deeds or back the last 10 years,

whichever is greater."

The procedures set out the 3-Deed/10-Year Rule in more detail as

follows:

"The Land Titles conversion rules require that a chain of at least

three deeds covering at least a 10-year time span (from January

1st of the current year back 10 years) must be pulled and

reviewed. Be sure to terminate the search once 3 deeds and 10

years are covered (for example, January 1, 1992 back to January

1, 1982).

If less than 3 deeds have been found, go beyond the 10-year

period for the missing deeds. Do not go beyond the 40-year

search period for the second or third deed. Searching prior to 40

years is done only if the Title Deed has not been found.

If there are 3 deeds or more within the 10 years, you must pull all

the deeds within the 10 years to compare. If there are no deeds

within the 10 years, pull and compare the three deeds beyond the

10 years back to the 40-year search period.



If the Title Deed is beyond the 40-year search period, carry the

title deed forward. Do not bring forward the documents outside

the 40-year search period with the exception of easements under

Section 114 of the Registry Act (Bill 106) that are picked up from

1941 provided a Notice of Claim has been registered in

connection therewith prior to January 1, 2000 (see easement rules

in "Dealing with Easements")."

3-Deed/10-Year Rule, explained

The 3-Deed/10-Year Rule started with the above 10-year date and

a 40-year date. It was based on what might be called (1) a starting

point that the search needn't go behind (2) a good transfer of

ownership (a good "deed") and (3) a good starting point (see below

for all of these). Then it worked as follows:

• If there was a starting point that the search needn't go behind,

the searcher was to find that starting point and the transfers of

ownership (if any) after that starting point, unless it was easier

to comply with any of the other requirements below. Then, the

searcher was to read or check that starting point and those

transfers of ownership. The searcher was not to read or check

any other transfer of ownership.

• Subject to the above, the searcher was to go back to the 10-year

date. The searcher was to try to find a good starting point and

all transfers of ownership after the 10-year date. If, on or after

the 10-year date, there were both a good starting point and at

least three good transfers of ownership (of which the starting

point could be one), the searcher was to read and check that

starting point and all transfers of ownership after it (even if

there were more than three in all). The searcher was not to read

or check any other transfer of ownership.

• Subject to the above, the searcher was to go back beyond the

10-year date, but not beyond the 40-year date. The searcher

was to try to find both a good starting point and at least three

later good transfers of ownership (of which the starting point

could be one) on or after the 40-year date. The searcher was to

read or check that starting point and the later transfers of

ownership. The searcher was not to read or check any other

transfer of ownership.

• If the above requirement couldn't be met, the searcher was to

find a good starting point after the 40-year date. The searcher

was to read and check that starting point and the transfers of

ownership after it (if any). The searcher was not to read or



check any other transfer of ownership (even though there would

be less than three transfers of ownership).

• If the above requirement couldn't be met, the searcher was to

find the most recent good starting point before the 40-year date.

The searcher was to read and check that starting point and the

transfers of ownership after it (if any). The searcher was not to

read or check any other transfer of ownership.

• The above requirements didn't allow a searcher to find a good

chain of ownership in either every case where, when the

searcher read and checked a transfer of ownership, there was a

title problem or in a rare case where there was no good starting

point at all. The requirements didn't say how the searcher was

to deal with such a case.

Starting point that search needn't go behind

The procedures list, as a starting point that the search needn't go

behind, the following

• A certificate under the Certification of Titles Act.

• A transfer under the Veterans Land Act.

• A tax deed.

• An expropriation of ownership.

• A Boundaries Act plan (for a road only).

• A transfer to a public or municipal authority.

• A registered plan of subdivision.

Good starting point

The procedures say:

"As with any search, a good starting point for title is required

from which to start searching (for example, an arm's length

transfer). This may affect how many deeds must be pulled.

Some types of deeds, such as a quit claim, or a husband/wife

transfer are not considered a good starting point, because they are

transfers for which a lawyer may not have done a complete

search."

The rules seem to show that (in addition to a non-arm's-length

transfer, a quit claim or a correcting transfer, which corrected a

mistake in the description of the land in a previous transfer,

couldn't be a good starting point.



The procedures give the following examples of a good starting

point:

• A transfer, if it's otherwise both a good transfer of ownership

and isn't a non-arm's-length transfer, a quit claim or a correcting

transfer that corrected a mistake in the description of the land in

a previous transfer.

• Presumably, a Crown patent or Crown grant.

• A final order of foreclosure.

• A transfer under a mortgage power of sale.

• A vesting order.

Good transfer of ownership

The procedures call a transfer of ownership a "title document."

They assume that a good transfer of ownership is a transfer of

ownership, which (after the searcher had read and checked it) the

searcher found transferred the ownership, so that title flowed.

However:

• A transfer of ownership couldn't be good, if it contravened the

subdivision control provisions of the Planning Act (and a search

had to be made for that, even if it went beyond the requirements

of 3-Deed/10-Year Rule).

• The procedures refer to some features in a document that a

searcher often noted, but that the government conversion

procedures had to ignore. These were the standard covenants

for title, the habendum, the standard release, an affidavit of

witness, an affidavit of age, an old affidavit of marital status

(for dower), an affidavit or statement of spousal status in a

document outside the 3-Deed/10-Year Rule, a Planning Act

affidavit, a land transfer tax affidavit, a section 116 income tax

statement, a succession duty consent, and a signature or seal of

a natural person or a signature or seal for a corporation (except

for an obvious defect).

• The procedures show how to deal with some common

ownership issues. These include a change of name, a variation

of a name, the description of the land, signatures, a power of

attorney and a spousal consent.

• The searcher wasn't to accept a correcting transfer that corrected

a mistake in the description of the land in a previous transfer as

one of the required number of good transfers of ownership. But

such a correcting transfer could be the "Title Deed" below.



• The searcher was to accept, as one of the required number of

good transfers of ownership before the 10-year date (but not as

a good starting point), a quit claim that transferred the

ownership.

• The government conversion procedures required the searcher to

"flag" some more complex ownership issues, so that persons

with more expertise could review them.

"Title Deed"

In practice, the register shows, not only who the current registered

owner is, but also (where possible) the document that transferred

the ownership to that current registered owner (which the

procedures treat as a current title document). The procedures call

this document a current "Title Deed," so that what they call a

general "title document," may be a current "Title Deed" or a

"previous" title document. (A document might also have been a

"subsequent document." This was a document that was subsequent

to the current "Title Deed." It could be either (1) a document that

showed an interest, other than ownership, or (2) a "title document,"

for example, where it was entered on the new register to show a

change of name of the registered owner.)

The searcher was to record in the system every transfer of

ownership that the searcher was to read and check. The searcher

was then to record in the system that a current title document was a

current "Title Deed." Only a current "Title Deed" would appear in

the register, and a previous title document would merely appear in

the past records, to show that the searcher had read and checked

the document under the 3-Deed/10-Year Rule.

As to the current Title Deed:

• The following could be a current Title Deed: presumably any

good starting point (even if not one that the search needn't go

behind, and even though the procedures don't list them all); an

assignment for the general benefit of creditors; a court order

(including letters probate and presumably any other kind of

court order appointing an estate trustee); a transfer by an estate

trustee (even if subject to debts); and a deed poll.

• Where there had been co-owners, and there'd been a separate

transfer of each interest to the registered owner, every transfer

was a Title Deed.

• A correcting transfer that corrected a mistake in the description

of the land in a previous transfer could be the "Title Deed."



The current title document might not correctly or fully show the

registered owner, or there might be no current title document.

There, the searcher had to check that the system would show the

correct person as the registered owner in land titles.

More complex ownership issues ("technical Items")

As said under Good transfer of ownership above, the government

conversion procedures required the searcher to "flag" some cases

of more complex ownership issues, so that a person with more

expertise could review them. The searcher had to (1) investigate a

flagged issue, (2) record the details of searcher's investigation and

then (3) "flag" the issue as a "Technical Item," so that a person

with more expertise could check it. This was so, even if the

searcher saw no problem, or had discussed the issue with a

supervisor. A person with more expertise would then review every

flagged issue, for "quality control."

Where a title problem made it impossible to convert a registry

property, the property was entered into the electronic system (that

is, "automated") but remained in registry and outside electronic

registration, and was called a "non-convert."

The more complex ownership issues were as follows:

• Death. Where the searcher was to read and check a starting

point or a transfer of ownership under the 3-Deed/10-Year Rule,

the searcher had to investigate some aspects of a death and

record some of the results of searcher's investigation (usually at

least by finding, and recording, proof of the death in certain

ways). However, it was only where the current Title Deed (see

"Title Deed" above) involved a death that the searcher had to

flag the death for a person with more expertise to check it.

• Mortgage enforcement. Where the current Title Deed (see

"Title Deed" above) was (a) a transfer by a mortgage lender

under a power of sale or (b) a final order of foreclosure, the

searcher had to flag the issue. Where the searcher was to read

and check any other starting point or transfer of ownership

under the 3-Deed/10-Year Rule, and it was (a) or (b) above, the

searcher wasn't to check that the transfer or order was good.

• Bankruptcy. Where the searcher was to read and check any

starting point, or any transfer of ownership under the 3-

Deed/10-Year Rule, which involved a bankruptcy, the searcher

had to flag the issue.

• Added qualification. Whenever the searcher added a specific

qualification to the property description, the searcher had to flag



the issue. Examples were a vendor's lien, a spousal interest, a

life interest or an outstanding interest under an estate.

• Subdivision control. Whenever (a) the searcher found a

possible contravention of the subdivision control provisions of

the Planning Act, and (b) the investigation was "complex," the

searcher had to flag the issue.

• Other. Whenever the searcher found any other complex issue,

in either the title or the property description, the searcher had to

flag the issue.

Search rules, (2) interests other than ownership (except easements)

As said, one general search rule is: "Search the chain of title in the

Abstract Index for any outstanding interests and encumbrances for

a 40 year search period. The searching start date is January 1st of

the year that is 40 years prior to the present year."

Documents read and checked under 3-Deed/10-Year Rule

Where the searcher had to read and check a starting point or a

transfer of ownership under the 3-Deed/10-Year Rule, the starting

point or transfer might refer to an interest, other than ownership.

Here, the searcher had both (1) to enter a document for the interest,

and (2) to ensure that the new land titles register would show the

interest, unless the searcher had obtained approval for not doing so,

on the ground that the interest wasn't valid.

Documents not read and checked under 3-Deed/10-Year Rule

The government conversion procedures for a document that the

searcher didn't have to read and check under 3-Deed/10-Year Rule

are as follows:

• An entry in the abstract index for a document, other than in the

remarks column, might simply show an interest, other than

ownership. For example, the entry might be of a mortgage, a

lease, a restriction, a simple grant of easement (other than in a

transfer of ownership) or an agreement.

• An entry in the remarks column of the abstract index for a

document might show an interest, other than ownership.

In these cases, subject to what's said below, the searcher didn't

usually need to read the document, but could simply enter the



document on the computer and ensure that the new land titles

register would show the interest in it.

The procedures contain some specific rules for some documents

that the searcher didn't usually need to read, for example:

• Mortgage. As an exception to the above, the searcher had to

read and check or record the following in a mortgage: the

provisions for default (where there'd been a transfer under the

power of sale in the mortgage); a consent to a severance under

the subdivision control provisions of the Planning Act; a recital

of an amalgamation; a recital of a change of name; and a better

description of the property. Also as an exception to the above,

the searcher had to ensure that the new land titles register

wouldn't show a mortgage, where both (1) the borrower had

later transferred the property to the lender and (2) either (a) the

transfer clearly showed that the borrower had intended the

mortgage to end (or "merge") or (b) the lender had later

transferred the property to a buyer and there was nothing to

show that the buyer was assuming the mortgage.

• Discharge. As an exception to the above, if a discharge was of

only part of the land covered by a mortgage and might either

have contravened the subdivision control provisions of the

Planning Act, or seemed to have some other problem, the

searcher had to read and check the discharge and either ensure

that the discharge was valid or that the new land titles register

would show both the mortgage and the discharge.

• Quit claim. As an exception to the above, the searcher had to

read and check a quit claim. For this purpose, the quit claim

might release an interest, other than ownership (provided it gave

the instrument number for the interest) or cause a mortgage to

end (see Mortgage above).

• Notice of claim. The searcher had to ensure that the new land

titles register would show a notice of claim registered after the

40-year date. If the notice had been registered within 40 years

after the instrument that it was renewing, the searcher had also

to bring that instrument forward, but otherwise the searcher had

to bring forward only the notice. As a notice of claim can only

show a possible claim, the above seems less than logical.

• Lease. The searcher had to ensure that the new land titles

register would show every lease registered after the 40-year

date, unless the lease had been surrendered or released, or didn't

show what land the lease covered. This was so, even if the

lease had expired, because "most leases have an option to renew



and the renewals are not usually registered." This shows that,

where an interest might not have been valid, the government

conversion procedures leaned towards erring on the side of

caution, by showing the interest.

• Deposit. As an exception to the above, the searcher had to read

and check a deposit, where it could show that a sale under a

power of sale in a mortgage was valid, show a death, clear up a

problem on title or even contain a document that should have

been registered. In some cases, the searcher had to ensure that

the new land titles register would show the deposit.

• Subdivision control bylaw. Before June 27, 1970, a bylaw was

needed to bring an area under subdivision control. Another

kind of bylaw could have freed land on a registered plan of

subdivision from subdivision control. The searcher was to read

and check a subdivision control bylaw, and ensure that the new

land titles register would show such a bylaw.

• Mechanic's or construction lien or personal property security

interest. The procedures show when the searcher could treat

these as discharged, so that the searcher didn't need to ensure

that the new land titles register would show them.

• Court order or court judgment. The procedures show when the

searcher had to ensure that the new land titles register would

show it or the effect of it.

• Restriction. The procedures contain some instructions for a

restriction. In particular, they contain the words below. Those

words seem to mean that, whenever any document registered

after the 40-year date shows an interest, other than ownership,

in a document registered before the 40-year date, the searcher

didn't need to ensure that the new land titles register would

show the interest, unless a notice of claim had been registered.

For such a fundamental principle, this was an odd place, and

indecisive way, in which to state the principle.

The words referred to above are:

"If any of the title search documents (3 & 10) states: "subject

to restrictions as set out in the instrument 123456". Proceed as

follows ... Where the instrument number referenced is outside

the 40-year period do not bring forward. (Note: This rule can

be applied to all interests referenced by instrument number

that are in fact registered outside the 40-year period. For

instance, mortgages, options etc.)



• Interests in certificate of title. Where the government

conversion procedures dealt with a starting point that the search

needn't go behind, they said that a certificate under the

Certification of Titles Act might show that the title was then

subject to other interests. Where so, the searcher had to pick up

the document for the interest, for example, "unexpired

easements, undischarged mortgages under 40 years old and

[presumably, other interests] not otherwise dealt with." The

word, "unexpired," implies that the searcher was to ensure that

the new land titles register wouldn't usually show an interest

over 40 years old, unless a notice of claim had been registered.

Again, for such a fundamental principle, this was an odd place,

and indecisive way, in which to state the principle.

• Easement. The part of the procedures dealing with the above

shows that another part deals with easements, but says that the

searcher had to show an easement in the description of the

property. So, in the new land titles register, the property had to

be described as together with or subject to the easement. The

description had to give the most recent instrument number. The

part of the procedures dealing with the above doesn't say that, if

an instrument for the easement had been registered before the

40-year date, the searcher was to ensure that the new land titles

register wouldn't show the easement.

Whether interest, other than ownership, valid under Ontario 40-year rule

On balance, the government conversion procedures show that an

interest, other than an easement, which was more than 40 years old

and for which a notice of claim hadn't been registered, was usually

valid under the Ontario 40-year rule. The reasons for and against

this are shown below.

Reasons for. Reasons for saying that the government conversion

procedures showed that an interest, other than an easement, which

was more than 40 years old and for which a notice of claim hadn't

been registered, was usually valid under the Ontario 40-year rule

are as follows:

• In standard practice, the interpretation of the Ontario 40-year

rule was that, where a document within the 40-year period

referred to an interest, other than ownership, the interest was

usually valid (see Ramsay (2005)).

• The government conversion procedures stressed the need to

enter on the computer (or "account for") every relevant

registered instrument or deposit, and the need to ensure that the



new land titles register would show (or "bring forward") the

registered instrument for every interest, other than ownership.

Here, the procedures didn't refer to the issue of whether the

interest was valid under the Ontario 40-year rule.

• The searcher had to read and check a starting point or a transfer

of ownership under the 3-Deed/10-Year Rule, and this might

refer to an interest, other than ownership. However, the 3-

Deed/10-Year Rule didn't refer to the issue of whether the

interest was valid under the Ontario 40-year rule.

• Where an interest might not have been valid, the government

conversion procedures leaned towards erring on the side of

caution, by showing the interest. In fact, the registers often

contained interests that had ended.

Reasons against. Reasons against saying that the government

conversion procedures showed that an interest, other than an

easement, which was more than 40 years old and for which a

notice of claim hadn't been registered, was usually valid under the

Ontario 40-year rule are as follows:

• As said, the instructions for a restriction dealt with any

document, and showed that the searcher didn't need to ensure

that the new land titles register would show the interest. As

said, for such a fundamental principle, this was an odd place,

and indecisive way, in which to state the principle.

• As said, the instructions for interests in certificate of title imply

that the searcher was to ensure that the new land titles register

wouldn't usually show an interest over 40 years old, unless a

notice of claim had been registered. Again, for such a

fundamental principle, this was an odd place, and indecisive

way, in which to state the principle.