Thursday, March 31, 2016
WHEN IS POSSESSION NINE-TENTHS OF THE LAW?
The Quebec Court of Appeal rendered an interesting decision in 2015 confirming the possessor of property to be the owner notwithstanding that title was registered in the name of another. (Ostiguy et al. –vs- Allie et al. 2015 QCCA 1368)
Appellants and Respondent were respective owners of two chalets that were built as part of a development near the Bromont ski resort.
Except for these two chalets, all of the others in the development had parking spaces situated in front of each lot that could accommodate two vehicles. Because of the unique configuration of the two chalets belonging to the Parties, parking for four vehicles was arranged adjacent to Appellants’ chalet. Ever since the chalets were built, the parking spaces were used by the respective owners of the two chalets or their predecessors in title.
A real and perpetual servitude of passage by foot was created on Appellants’ lot for the benefit of Respondent’s property, thereby permitting Respondent to access a parking space on Appellants’ lot. Some years later, Respondent’s predecessor in title added a parking space on his lot that was used principally for his visitors.
Appellants acquired their lot on July 26, 2011. The real estate listing referred to an existing parking space for two vehicles and the real servitude in favour of Respondent’s lot. However, the cadastral description at the land registry office clearly indicated that four parking spaces adjacent to Appellants’ chalet (not merely two) were part of Appellants’ lot.
Respondent’s spouse acquired her chalet in 1993 and inherited it when her spouse passed in 2001. Respondent had been using the parking space on Appellant’s property since 1993. Unlike all other owners in the development, the cadastral description of her property did not include any parking space.
Some months after acquiring their property in 2012, Appellants filed suit against Respondent to obtain a restraining order to prevent Respondent from trespassing on their property. In response, Respondent sought a declaratory judgment to recognize her title to part of Appellants’ property containing the parking space for two vehicles, which she alleged to have possessed as owner for more than ten years.
The Trial Judge rejected Appellants’ suit and their argument that Respondent’s access to the parking space on Appellants’ land was a result of simple tolerance on their part, and the Court also granted Respondent’s application. The Court of Appeal agreed with the Trial Judge.
The relevant legal principle that the Court of Appeal applied is that title to property can be acquired by possession that is peaceful, continuous, public and unequivocal during a period of ten years (Articles 922 and 2918 Civil Code of Quebec).
There didn’t seem to be any question that Respondent’s possession was peaceful, continuous and public. However, what is meant by unequivocal?
The legal authorities interpret this to mean that the pretended owner’s possession cannot be subject to different interpretations, but rather must necessarily imply the exercise of an exclusive right of ownership. This is a question of fact to be determined by the Trial Judge based on the evidence.
But what of the fact that Appellants’ title was registered at the land registry office and therefore was of public notoriety, at least in the legal sense?
After reviewing the case law, the Court recognized that the good faith of the possessor is not a relevant factor to consider when determining whether ownership has been acquired by possession. Otherwise, if registered title would be presumed to be public and everyone is presumed to know the law, then it would be impossible for anyone to acquire title to property that is registered in someone else’s name by possessing it over ten years. This would render Article 2918 of the Civil Code of Quebec superfluous. Consequently, the Court concluded that registration of title at the land registry office cannot protect an owner against the effects of useful possession by a third party.
The Court also commented on the legal consequences of registration of title to property. The purpose of registration of title is not to prove the existence of a right of property but rather to sort out the various claims that third parties could have against the same author and to establish the rank of security claims. It does not offer any guarantee concerning the quality of the title to the property. It only creates a rebuttable presumption of ownership.
Mr. Justice Denis Jacques, in his dissenting opinion, commented that the rules of acquisition of property by possession could occasionally give rise to surprising results when set up against a purported owner with a duly registered title. However, even though the majority of the Court agreed with Justice Jacques’ comment, they stated that it was not up to the courts to modify the choice of the legislature in this regard, who intentionally did not adopt proposed modifications to the law that would have made a registered title uncontestable.
An additional argument raised by Appellants’ was that to interpret the law as Respondent proposed would risk leaving registered owners of property in good faith at the risk and peril of unknown third parties who appear out of the blue. However, the majority in the Court of Appeal recognized that the facts in the present case could not fit such a description. More particularly, the real estate broker’s listing agreement, which was provided to Appellants at the time of their acquisition, clearly stated that they were acquiring parking for two and not four vehicles. Furthermore, the same listing agreement as well as the title search clearly indicated the existence of the real servitude of passage on Appellants’ lot to the parking spaces for the benefit of Respondent. If Respondent would not have the right to use the parking spaces on Appellants’ land, what then would the purpose be of the servitude of passage by foot?
In conclusion, property owners need to be vigilant regarding anyone in possession of even a part of their property. Any accommodation or tolerance of a possessor should be confirmed in writing to ensure that the possession does not become “unequivocal”.