Instructions Specific to This Exam

1. This examination contains five questions of unequal value, worth a total of 100 marks.

2. Suggested time allocations are provided for guidance only. Candidates remain responsible for managing the three-hour examination period.

3. Unless otherwise stated, assume that:

   • all land and property referred to in this examination is situated in a Canadian common-law jurisdiction;

   • ordinary common-law and equitable property principles apply;

   • no family-property or matrimonial-property legislation applies;

   • no issue of adverse possession arises; and

   • no statutory rule alters the result unless the question expressly states otherwise.

4. You will be assessed primarily on your knowledge and application of the cases, doctrines and principles contained in the assigned Property materials, including your ability to:

   • characterize competing property interests accurately;

   • identify the source of each claimant's interest;

   • distinguish legal from equitable interests;

   • apply priority rules;

   • analyze competing claims to possession and ownership;

   • identify available proprietary and personal remedies; and

   • reach reasoned conclusions.

5. No marks are awarded for merely reproducing or summarizing the facts. Use the facts in your legal analysis.

6. Each question is independent. Do not import facts or conclusions from another question.

7. Property rights are frequently relative rather than absolute. Where several persons assert rights in the same thing, identify the relative strength of each claim rather than assuming that only one person can possess legally significant rights.

8. Keep distinct:

   • legal title;

   • beneficial or equitable ownership;

   • possession;

   • a right to possession;

   • contractual rights;

   • and proprietary rights enforceable against third parties.

9. In questions concerning gratuitous transfers, identify the transferor's actual intention at the time of transfer and the operation of any relevant equitable presumption.

10. In unjust-enrichment questions, distinguish:

    • the existence of unjust enrichment;

    • any juristic reason;

    • the appropriate monetary measure;

    • and the additional requirements for a proprietary constructive trust.

11. In questions involving found property, begin by identifying:

    • whether the chattel was abandoned or merely lost;

    • who first acquired possession or a possessory interest;

    • whether an occupier had manifested an intention to control chattels found on the premises; and

    • whether a person with superior title later appears.

12. In bailment questions, distinguish ownership from possession. A bailor need not prove absolute ownership before the law of bailment becomes relevant.

13. In relation to land boundaries, remember that land is three-dimensional. Rights may extend:

    • laterally;

    • into the subsurface; and

    • into such airspace as is necessary for ordinary use and enjoyment.

14. Do not treat the maxim cujus est solum ejus est usque ad coelum et ad inferos as literally conferring unlimited ownership upward and downward.

15. In constructive-taking questions, distinguish government regulation that merely reduces value from conduct satisfying the common-law requirements for a constructive taking.

16. In covenant questions, distinguish carefully between:

    • a contractual covenant enforceable against the original covenantor;

    • a restrictive covenant whose burden may run in equity;

    • and a positive covenant whose burden ordinarily does not run with freehold land.

17. Do not determine whether a covenant is positive or negative solely by its grammatical wording. Consider what the covenant requires the landowner actually to do.

18. For Question Five only, assume that no deeds-registration or title-registration statute alters the ordinary common-law and equitable priority rules. Apply the traditional priority principles identified in the syllabus.

19. Full citations are unnecessary. The name of the relevant case or doctrine is sufficient.

20. Answer the question actually asked. Avoid generic essays or memorized lists of property doctrines not reasonably raised by the facts.

21. Write clear, organized answers in complete sentences.

QUESTION ONE

25 marks — suggested time: 45 minutes

FACTS

Maris Fenwick owned a restored heritage property known as Ashgrove Hall.

The property contains:

• a large residence;

• a carriage house;

• landscaped grounds; and

• a small commercial event space.

Maris acquired Ashgrove Hall herself in 1998.

Her adult son, Orin Fenwick, has never contributed to its purchase price, mortgage, taxes or operating expenses.

The transfer to Orin

In 2020, when Maris was 76, she transferred Ashgrove Hall from her sole name into the names of:

Maris Fenwick and Orin Fenwick as joint tenants

No money changed hands.

Maris's solicitor recorded the following note after meeting with her:

“MF wants Orin on title so that he can deal with the property if she becomes ill and so that the property does not have to go through probate. She says she intends to continue treating Ashgrove as hers while alive.”

The solicitor did not prepare a declaration of trust.

After the transfer:

• Maris continued living at Ashgrove Hall;

• she paid the taxes and insurance;

• she received all rental income;

• Orin did not report any ownership income for tax purposes; and

• major decisions concerning the property remained Maris's.

Eighteen months later, Maris sent Orin a birthday card stating:

“You have always loved Ashgrove. One day it will truly be yours, and I am happy knowing it will stay in the family.”

Orin says this confirms that the 2020 transfer was intended as a gift of a joint beneficial interest carrying a right of survivorship.

Maris died in 2025.

Her will leaves the residue of her estate equally among Orin and his two sisters.

Orin claims that Ashgrove Hall passed entirely to him by survivorship and therefore never entered the estate.

His sisters disagree.

Avela's contributions

For five years before Maris's death, Avela Dorsey managed Ashgrove Hall's event operation.

Avela had previously operated her own small hospitality business.

Maris persuaded her to devote herself full-time to Ashgrove.

Avela received reimbursement for expenses but no salary.

Over five years she:

• negotiated event contracts;

• hired and supervised seasonal staff;

• developed a wedding business;

• managed renovations;

• created the property's marketing program; and

• personally worked many weekends.

Avela also contributed $135,000 of her own money toward converting the carriage house into an event venue.

No written agreement gave her an ownership interest.

Maris repeatedly said things such as:

“We're building something valuable here.”

and:

“When Ashgrove is established, I'll make sure you've been looked after properly.”

Avela never received a specific promise of a fixed percentage of the property.

During the same period:

• Avela was permitted to use a furnished apartment on the property without paying rent;

• Ashgrove paid for her vehicle while she worked there; and

• Maris paid for several vacations that Avela accompanied her on.

A real-estate appraiser concludes that the carriage-house conversion and successful event business increased the value of Ashgrove Hall by approximately $600,000.

After Maris's death, Orin takes the position that:

“Avela was basically a family friend who helped my mother with the business. She lived there for free and received plenty of benefits.”

Avela claims an equitable interest in Ashgrove Hall.

QUESTION

Advise Orin, Maris's estate and Avela concerning the beneficial ownership of Ashgrove Hall and the equitable remedies potentially available.

Do not address family-property legislation, succession legislation or tax law.

25 MARKS

QUESTION TWO

20 marks — suggested time: 36 minutes

FACTS

The Claremont House Hotel operates a historic hotel and conference centre.

Access to its main-floor lounge is limited to:

• registered hotel guests;

• conference attendees; and

• invited visitors.

A sign beside the entrance states:

“Claremont House Lost Property Policy: All property found on hotel premises must immediately be delivered to Guest Services.”

Hotel employees are instructed to inspect public areas several times each day and deliver found items to a locked lost-property room.

The brooch

During a professional conference, Calla Brenn notices a small velvet case lying underneath a movable chair in the lounge.

Inside is an antique diamond brooch.

The brooch is not attached to the chair or the building.

Calla picks it up.

No one nearby claims it.

She takes it to Guest Services and says:

“I found this under a chair. If nobody claims it, I want it returned to me.”

The hotel issues a receipt stating:

“Item received for safekeeping pending identification of its owner.”

Six months pass.

No owner comes forward.

Calla demands the brooch.

The hotel refuses.

It says:

“You found it on our private premises. Our policy gives Claremont the better possessory claim.”

Three weeks later, Daphne Orr, who had stayed at the hotel on the date of the conference, produces:

• a purchase receipt;

• photographs of herself wearing the brooch; and

• an insurance appraisal containing the same identifying marks.

All parties accept that Daphne owned the brooch before it was lost.

The camera

A separate dispute involves hotel guest Bennet Quill.

Bennet was travelling with a vintage medium-format camera worth approximately $38,000.

When leaving the hotel for a two-day hiking trip, he delivered the camera to Guest Services for safekeeping.

The receipt stated:

“Claremont House may store high-value property with a professional third-party vault provider on that provider's ordinary terms.”

Bennet signed the receipt without asking what those terms were.

The hotel transferred the camera to Sentry Vault Services Ltd.

The contract between Claremont and Sentry contained a clause stating:

“Sentry's total liability for any item, however loss occurs, shall not exceed $5,000.”

A Sentry employee negligently left the relevant safe unlocked overnight.

The camera disappeared.

There is no evidence that Claremont knew Sentry had poor security practices before the loss.

Bennet sues both Claremont and Sentry for the full value of the camera.

Sentry relies upon the $5,000 limitation.

Bennet responds:

“I agreed that the hotel could use a proper vault. I never agreed that some company I had never heard of could reduce my rights to $5,000.”

QUESTION

Advise the interested parties concerning:

1. the competing possessory claims to the brooch; and

2. the rights and liabilities arising from the loss of Bennet's camera.

20 MARKS

QUESTION THREE

20 marks — suggested time: 36 minutes

FACTS

Harbourwick Developments Ltd. (“Harbourwick”) owns 42 acres of undeveloped riverfront land in a rapidly growing municipality known as Calder Reach.

Its deed describes the eastern boundary as:

“the ordinary high-water mark of the Alder River.”

The river boundary

When Harbourwick purchased the land in 2010, the river followed a clearly identifiable bank.

Between 2010 and 2025, sediment accumulated gradually along approximately 600 metres of Harbourwick's river frontage.

The process was:

• natural;

• gradual; and

• not perceptible from day to day.

By 2025, approximately 3.8 additional acres of dry land had formed between the original 2010 riverbank and the present ordinary high-water mark.

Calder Reach says:

“Harbourwick bought what was inside its 2010 survey. The new strip was never part of the registered parcel.”

Harbourwick claims the additional land.

The transmission line

In 2019, Northern Grid Corporation installed an electrical transmission line across one corner of Harbourwick's property.

Assume for this question that Northern Grid has no statutory expropriation, easement or right-of-entry power affecting the dispute.

The line:

• crosses approximately 80 metres of Harbourwick's land;

• is suspended roughly seven metres above the ground at its lowest point;

• does not physically touch the surface; and

• prevents cranes and other tall machinery from operating safely beneath it.

Harbourwick never granted Northern Grid an easement.

Northern Grid says:

“We are in the air. Land ownership does not extend infinitely upward.”

The municipal plan

Calder Reach has wanted to create a continuous public riverfront greenway for more than a decade.

Harbourwick's land occupies the only major gap in the proposed route.

Municipal staff recommended purchasing part of the property in 2018.

Council declined because the estimated acquisition cost exceeded $14 million.

In 2022, Calder Reach adopted a new planning regime applying specifically to Harbourwick's land.

It prohibits:

• residential construction;

• commercial construction;

• tree removal other than for safety;

• grading;

• road construction; and

• fencing that would obstruct pedestrian movement.

The only expressly permitted uses are:

• conservation;

• passive recreation;

• walking trails;

• and continuation of any agricultural use that existed when the bylaw was adopted.

No agriculture was then occurring.

A soil report states that much of the property is unsuitable for commercially viable agriculture.

Since 2022, the municipality has:

• rejected Harbourwick's applications for a small residential subdivision and an eco-lodge;

• identified the property on municipal maps as part of the “Alder River Greenway”;

• published tourism materials depicting a future continuous trail through the property; and

• publicly stated that preserving Harbourwick's land from development is necessary to complete the municipality's riverfront-open-space strategy.

Municipal employees have not entered the property to construct trails or facilities.

However, members of the public frequently walk on informal paths across the land.

The municipality has not attempted to stop them.

Harbourwick has not charged admission or actively removed walkers.

The municipality also reduced Harbourwick's property tax assessment substantially because development is now prohibited.

Harbourwick says:

“The Town refused to buy our land and has instead regulated it into its public park system for free.”

Calder Reach responds:

“Harbourwick still owns the property. It can sell it, walk on it, preserve it and enjoy the tax reduction. We have taken nothing.”

QUESTION

Advise Harbourwick concerning:

1. ownership of the newly formed riverfront land;

2. Northern Grid's use of the airspace; and

3. whether Calder Reach's actions amount to a constructive taking of Harbourwick's property.

20 MARKS

QUESTION FOUR

20 marks — suggested time: 36 minutes

FACTS

In 2004, Greymark Holdings Ltd. owned two neighbouring commercial parcels known as Lot 18 and Lot 19.

Greymark developed Lot 19 as a small professional office complex.

It sold Lot 18 to a company that operated a wholesale furniture warehouse.

The transfer of Lot 18 contained the following provisions:

Clause 7

“The owner of Lot 18 shall not use or permit Lot 18 to be used as a restaurant, bar, commercial kitchen, nightclub or event venue.”

Clause 8

“The owner of Lot 18 shall at all times maintain a four-metre landscaped cedar buffer along the common boundary with Lot 19.”

Clause 9

“The owner of Lot 18 shall pay forty per cent of the annual cost of inspection, maintenance and replacement of the stormwater-retention facility situated on Lot 19.”

The transfer further stated:

“The foregoing covenants are intended to run with Lot 18 and are imposed for the benefit of Lot 19 and each successor owner thereof.”

All three clauses were registered on title.

At the time:

• Greymark operated the office complex on Lot 19;

• several office tenants complained about traffic and evening noise from nearby entertainment businesses; and

• Greymark also operated a small catering business out of Lot 19.

Greymark's internal memorandum stated:

“No restaurant or event business should ever operate next door. We need to preserve professional-office parking and atmosphere, and we do not want a competitor beside our catering operation.”

Later transfers

Greymark sold Lot 19 in 2018 to Linden Office Trust.

The transfer expressly assigned to Linden:

“all benefits of covenants affecting neighbouring lands insofar as assignable.”

Lot 18 was sold in 2024 to Vexa Health Properties Inc.

Before purchasing, Vexa:

• reviewed the registered title;

• obtained a copy of Clauses 7 to 9; and

• received legal advice that the covenants might restrict its proposed redevelopment.

Vexa proceeded with the purchase.

Current use

Vexa converts most of Lot 18 into medical offices.

It also leases the ground floor to Ember Table Inc., which operates:

• a café during weekdays;

• a full-service restaurant on evenings and weekends; and

• private wedding receptions approximately twice each month.

Vexa also removes most of the cedar buffer to create additional parking.

It refuses to pay any part of the stormwater-facility expenses.

Linden says the restaurant and receptions:

• create evening traffic;

• use parking spaces normally available to visitors to Lot 19;

• produce noise; and

• have materially changed the character of the immediate area.

Vexa responds:

“Those promises were made twenty years ago between different owners. Property obligations do not follow land forever just because someone writes ‘runs with the land’ in a deed.”

It further argues:

“If Linden wants cedar trees and a stormwater facility maintained, it can pay for them itself.”

QUESTION

Advise Linden, Vexa and Ember Table concerning the enforceability of Clauses 7, 8 and 9 against the current owners and occupiers of Lot 18.

Address the nature of each covenant, the running of the burden and benefit, and the appropriate proprietary consequences.

20 MARKS

QUESTION FIVE

15 marks — suggested time: 27 minutes

FACTS

For this question only, assume that no deeds-registration or title-registration statute alters the ordinary common-law and equitable priority rules.

Torin Rusk is the registered legal owner of an undeveloped parcel known as Cedaracre.

Sela's interest

On January 8, Torin signs a written declaration stating:

“I declare that I hold Cedaracre upon trust for my sister, Sela Vardon, absolutely.”

The document is valid and effective to create the trust.

Torin remains the registered legal owner.

Sela therefore does not receive legal title.

She does not move onto Cedaracre or place any signs on it.

Kestrel's purchase contract

On March 4, Torin agrees in writing to sell Cedaracre to Kestrel Habitat Inc. for $1.6 million.

The contract is specifically enforceable.

Kestrel pays a $250,000 deposit.

When the contract is signed:

• Kestrel has no actual knowledge of Sela's trust;

• there is nothing physically present on the land revealing Sela's interest; and

• Torin tells Kestrel that he owns Cedaracre for his own benefit.

Closing is scheduled for April 15.

Discovery before closing

On April 2, Kestrel's lender receives an email from Sela stating:

“Torin is only trustee of Cedaracre. He has no beneficial ownership and cannot sell my land.”

The email includes a copy of the January 8 declaration.

The lender forwards the material to Kestrel's president on April 3.

Kestrel's lawyer advises:

“We already signed before we knew about Sela. Complete the transaction quickly and legal title should defeat her.”

Kestrel closes on April 15 and receives the legal estate.

Kestrel pays the balance of the purchase price.

Torin disappears with the money.

Sela claims Cedaracre.

Kestrel responds:

“We were bona fide purchasers when we entered the purchase agreement. Learning about the trust later should not change our priority.”

QUESTION

Advise Sela and Kestrel concerning priority to Cedaracre.

In doing so, explain the significance of:

1. the interests each party held on March 4;

2. Kestrel's later acquisition of the legal estate; and

3. the timing of Kestrel's notice of Sela's prior interest.

15 MARKS