Instructions Specific to This Exam

1. This examination contains one question worth a total of 100 marks.

2. You will be assessed primarily on your knowledge of the relevant property-law principles, assigned cases and other prescribed materials identified in the syllabus, together with your ability to recognize competing proprietary interests, characterize those interests correctly and determine their legal consequences.

3. No marks are awarded for merely reproducing or summarizing the facts. Your answer should identify the relevant issues, state the governing principles and apply those principles closely to the facts.

4. Do not provide a general essay on property law or mechanically discuss every topic contained in the syllabus. Address only those issues reasonably raised by the facts.

5. Full case citations are not required for authorities contained in the assigned materials. Where relevant, identify the applicable case or doctrine with sufficient precision to demonstrate knowledge of the governing law.

6. You are asked to prepare a memorandum of law. You do not need to spend examination time constructing formal headings such as “To,” “From,” “Date” or “Re.” Marks are awarded for substantive analysis.

7. In addressing ownership of Northreach, distinguish carefully between:

   • legal title;

   • joint tenancy and tenancy in common;

   • the right of survivorship;

   • severance of a joint tenancy;

   • life and future interests; and

   • the rights of persons entitled successively to the same property.

8. For purposes of the question concerning future interests, apply the common-law Rule Against Perpetuities. As directed by the syllabus, do not consider provincial statutory reforms to that rule.

9. In addressing conditions attached to property interests, distinguish among a condition subsequent, a determinable limitation and a condition precedent where relevant, and consider the consequences if a condition is invalid.

10. In addressing the road and land-use rights, distinguish between:

    • an easement;

    • the scope of an easement once validly created;

    • restrictive covenants;

    • positive covenants; and

    • the circumstances in which the benefit or burden of such rights may affect successors in title.

11. In addressing the commercial tenancy, distinguish:

    • a lease from a licence;

    • an assignment from a sublease;

    • privity of contract from privity of estate;

    • restrictions on alienation;

    • remedies following default and termination; and

    • proprietary questions concerning tenant-installed fixtures.

12. Unless expressly indicated otherwise, apply the common-law property principles contained in the assigned syllabus. Do not address residential-tenancy legislation, family-property legislation, taxation, secured-transactions legislation, bankruptcy or environmental regulation.

13. Write a clear and organized answer in complete sentences.

QUESTION

FACTS

Northreach is a 94-acre rural property containing a large stone farmhouse, a former dairy barn, a granary, several agricultural buildings and a private gravel road known as Northreach Lane.

For many years, Northreach was owned in fee simple by Adelaide Norcross.

Adelaide had two adult children, Linnea Norcross and Cormac Norcross.

In 2013, Adelaide transferred title to Northreach from herself alone to:

“Adelaide Norcross and Linnea Norcross as joint tenants.”

Linnea paid nothing for the transfer.

There was no trust agreement or side agreement.

Adelaide told several family members that she had added Linnea to title because:

“If anything happens to me, the farm should pass cleanly to Linnea without estate complications.”

Linnea moved into the farmhouse shortly afterward.

She and Adelaide shared the property and expenses.

Cormac lived elsewhere.

Over the following years, Linnea and Adelaide disagreed increasingly about the long-term future of Northreach.

Adelaide wanted the property preserved largely intact.

Linnea believed portions should eventually be commercially developed.

In April 2021, after obtaining separate legal advice, Adelaide and Linnea signed a document entitled Co-Ownership Agreement.

It stated:

“Adelaide Norcross and Linnea Norcross acknowledge that each holds an equal one-half interest in Northreach. From the date of this Agreement, each may sell, transfer, mortgage, devise or otherwise deal with her respective one-half interest independently. Neither party shall have any right of survivorship in the interest of the other.”

The agreement was signed by both women.

Their lawyer advised that a transfer should also be registered changing the description of their ownership from joint tenancy to tenancy in common.

Neither woman completed the registration.

The land register continued to describe them as joint tenants.

Adelaide executed a new will six months later.

The will provided:

“I give my interest in Northreach to my son, Cormac Norcross, for his life.”

It continued:

“Upon Cormac's death, I give that interest in equal shares to such of Cormac's grandchildren as attain the age of thirty years.”

Cormac was 47 at the date of the will.

He had two children, aged 20 and 18.

Neither had children.

The will then stated:

“If Cormac sells, mortgages, transfers or otherwise disposes of his interest in Northreach to any person who is not a descendant of Adelaide Norcross, the trustees of my estate may terminate Cormac's interest and my interest in Northreach shall thereupon fall into the residue of my estate.”

The residue was left to the North Valley Conservation Foundation.

Adelaide told her solicitor that she included this clause because:

“I want Cormac to enjoy the property, but I do not want strangers buying his interest and forcing Linnea into business with them.”

The solicitor warned Adelaide that restrictions on transferring property could create legal problems.

Adelaide replied:

“Then make it as strong as the law permits.”

Several years earlier, Adelaide and Linnea had sold an 18-acre parcel on the eastern boundary of Northreach to Bellwether Orchards Ltd.

The parcel became known as East Meadow.

Northreach Lane was the only practical existing vehicular route from the public highway to East Meadow.

The transfer to Bellwether contained the following express grant:

“Together with a right of way over Northreach Lane for access to and from East Meadow for the purposes of one residential dwelling and agricultural operations conducted upon East Meadow.”

At the time of the transfer, East Meadow contained:

• a farmhouse;

• an apple orchard;

• a small equipment shed; and

• approximately eight acres of open field.

Ordinary traffic over Northreach Lane consisted of the residents' vehicles, farm machinery and occasional delivery trucks.

The transfer also contained three covenants by Bellwether:

“The Transferee covenants for itself and its successors in title that:

(a) no structure exceeding ten metres in height shall be constructed on East Meadow;

(b) East Meadow shall not be used for any purpose other than agriculture and one private residential dwelling; and

(c) the owner of East Meadow shall maintain Northreach Lane in good repair and shall bear fifty per cent of all reasonable maintenance and resurfacing costs.”

The document stated that covenants (a) and (b):

“are made for the benefit of Northreach and every part thereof and are intended to run with East Meadow.”

No equivalent wording appeared immediately after covenant (c).

Bellwether later sold East Meadow to Morroway Retreats Inc.

Morroway's lawyer obtained and reviewed the earlier transfer before closing.

Morroway therefore knew about the right of way and all three covenants.

Morroway also purchased a separate ten-acre parcel immediately east of East Meadow known as Fox Hollow.

Fox Hollow does not touch Northreach and has no independent right to use Northreach Lane.

Morroway now proposes to redevelop East Meadow and Fox Hollow together as an upscale rural retreat.

Its plans include:

• 22 guest cabins;

• a wedding pavilion;

• a two-storey restaurant;

• a 12-metre observation tower on East Meadow; and

• hiking facilities extending across both East Meadow and Fox Hollow.

The only proposed vehicular entrance to the development is Northreach Lane.

Morroway anticipates approximately 45 to 70 vehicle trips per day during peak periods, including shuttle buses and catering trucks.

It proposes to use Northreach Lane for guests travelling to facilities situated on both East Meadow and Fox Hollow.

Morroway says the road is physically capable of handling the additional traffic after modest widening.

It also offers to pay for the widening.

Linnea objects.

She says the right of way permits access only for the agricultural and residential use contemplated by the original grant.

Morroway responds that East Meadow remains the parcel physically connected to Northreach Lane and that:

“A right of way is a right of access. Property use changes over time.”

Morroway also argues that the restrictions on use should not bind it because it never personally promised Adelaide or Linnea anything.

It accepts that it knew about the covenants when it purchased East Meadow.

Morroway further says that, if the restrictive covenants bind it, Linnea must also be entitled to enforce the road-maintenance covenant and should not be permitted to:

“take the benefit without the burden.”

Meanwhile, Northreach itself became partly commercial.

In June 2022, Adelaide and Linnea leased the former granary to Hearthstone Fermentation Ltd. (“Hearthstone”).

The lease was for ten years.

It granted Hearthstone:

“exclusive possession of the Granary Building and the enclosed service yard shown on Schedule A.”

Hearthstone was required to pay monthly rent and operate a brewery, tasting room and specialty-food business.

Clause 11 stated:

“The Tenant shall not assign this Lease or sublet the whole or any part of the Premises without the prior written consent of the Landlords.”

The lease contained no statement requiring the landlords to act reasonably when deciding whether to consent.

Clause 15 required the tenant:

“to maintain the Premises in good repair, reasonable wear and tear excepted.”

Clause 18 provided:

“If rent remains unpaid for fifteen days after written demand, or if any other material covenant remains unremedied for fifteen days following notice, the Landlords may re-enter and terminate this Lease.”

Hearthstone spent approximately $410,000 converting the granary.

It installed:

• six stainless-steel fermentation tanks bolted to concrete pads;

• a large copper brewing vessel connected to permanent water and gas lines;

• a custom ventilation hood whose ductwork passed through the exterior roof;

• refrigerated display units connected to the electrical system but capable of being unplugged and moved; and

• a large oak tasting bar attached to the floor with eight screws.

The fermentation equipment was installed solely for Hearthstone's brewery operation.

The concrete pads could remain after the tanks were removed.

Removing the copper hood would leave an opening in the roof requiring professional repair.

In August 2024, Hearthstone decided to concentrate on a different facility.

Without asking Adelaide or Linnea for consent, it signed an agreement with Driftwood Ferments Ltd. (“Driftwood”).

The agreement provided:

“Hearthstone transfers to Driftwood all of Hearthstone's right, title and interest in the Northreach lease for the entire unexpired balance of the term.”

It further stated:

“If Driftwood fails to pay Hearthstone the monthly transfer payment required by this agreement for more than thirty days, Hearthstone may terminate this agreement and retake possession of the premises.”

Driftwood immediately took exclusive possession.

Hearthstone retained no right to occupy any part of the granary while Driftwood complied with the agreement.

Driftwood paid the rent required under the Northreach lease directly to Adelaide and Linnea.

When Adelaide and Linnea discovered the transfer, they sent both companies a letter stating:

“We have never consented to the transfer. Any rent accepted from Driftwood will be accepted without prejudice and shall not constitute written consent to an assignment or sublease.”

They nevertheless continued accepting Driftwood's monthly rent.

Driftwood operated the brewery for approximately 18 months.

Adelaide died in February 2026.

Immediately after her death, Linnea claimed that Adelaide's half of Northreach passed automatically to her by survivorship because the registered title continued to describe them as joint tenants.

Cormac relied on the 2021 Co-Ownership Agreement and Adelaide's will.

He moved into a small cottage on Northreach and asserted that he held a life interest in Adelaide's one-half share.

Linnea told him:

“A private agreement never changed the title. Mom died while we were registered as joint tenants, so there is nothing for the will to give you.”

Cormac refused to leave.

He also began taking a much more active role in the property.

Several months later, without Linnea's agreement, Cormac contracted with a timber company to remove approximately 200 mature black-walnut trees growing along the northern edge of Northreach.

The trees had formed part of a shelterbelt for at least 70 years.

They were not part of an operating timber business.

Cormac received approximately $185,000 from the sale.

He says the trees were mature, some were beginning to decline, and thinning them improved the agricultural usability of the surrounding land.

Linnea says the timber company removed virtually the entire stand and materially altered the character of the northern portion of Northreach.

Cormac also renovated the cottage he occupied.

He removed several interior walls, converted the ground floor into an open-plan layout and replaced the original kitchen with a modern one.

The renovation increased the appraised value of the cottage by approximately $130,000.

Linnea says Cormac had no right to:

“tear apart a building somebody else ultimately owns.”

Cormac responds that a life tenant should be permitted to make improvements that increase value.

A separate dispute developed at the granary.

By May 2026, Driftwood was experiencing serious financial problems.

It stopped paying rent.

Linnea and Cormac each took the position that, regardless of their dispute over ownership, they were together entitled to enforce the lease as successors to Adelaide and Linnea's landlord interests.

They jointly served Driftwood and Hearthstone with a written demand for three months of unpaid rent.

No payment was made.

Twenty days later, Linnea and Cormac re-entered the granary and changed the locks.

They sent Hearthstone and Driftwood a letter stating:

“The Northreach lease is terminated because of continuing non-payment of rent.”

Five days later, their lawyer wrote again stating:

“The landlords reserve and intend to pursue all available claims for arrears and for the present value of the loss of the remaining lease bargain.”

Two months later, the granary was re-let to another commercial tenant.

The replacement rent is approximately $3,500 per month lower than the rent required by the Hearthstone lease.

The replacement lease runs for the balance of the original term.

Linnea and Cormac now seek:

• all rent outstanding before termination;

• the reasonable expenses of re-letting; and

• the present value of the difference between the Hearthstone rent and the replacement rent for the remainder of the original term.

Hearthstone says that it transferred the lease to Driftwood in 2024 and therefore ceased to be responsible for rent.

Driftwood says that once Linnea and Cormac terminated the lease and took back possession, they ended any claim to future rent.

Hearthstone also claims ownership of the brewing equipment.

It demands access to remove:

• the fermentation tanks;

• copper brewing vessel;

• ventilation hood;

• refrigerated display units; and

• oak tasting bar.

Linnea says everything except the refrigerators became part of Northreach when installed.

Cormac takes the more moderate position that Hearthstone should be permitted to remove:

“anything that is really equipment rather than part of the building”

provided it repairs any physical damage.

Linnea and Cormac have retained your firm to advise them.

Although they disagree about several matters between themselves, they jointly want advice concerning the legal interests affecting Northreach and East Meadow before either enters further agreements or commences litigation.

QUESTION

The senior partner asks you to prepare a brief but comprehensive memorandum advising Linnea and Cormac on the significant property-law issues arising from the full sequence of events.

Your memorandum should address the ownership consequences of Adelaide's death and the 2021 Co-Ownership Agreement, the interests created by Adelaide's will, Cormac's conduct as a life tenant if his interest is valid, the rights asserted by Morroway over East Meadow and Northreach Lane, the enforceability of the covenants affecting East Meadow, and the parties' rights and liabilities arising from the granary lease and tenant-installed property.

Assess the strongest arguments available to all materially affected parties.

Where the result depends upon the proper characterization of an interest or transaction, explain why that characterization matters.

100 MARKS