Court rejects false chain of title and restores land to rightful owner

AS PREVIOUSLY PUBLISHED IN THE RURAL VOICE:

In Ontario, land registration operates under two distinct systems: the Registry system and the Land Titles system, each governed by separate statutes and principles. The Registry system, established under the Registry Act, records instruments affecting land but does not guarantee title. It functions as a notice-based system, where the validity of ownership depends on the chain of title and the legal effect of registered documents. In contrast, the Land Titles system, governed by the Land Titles Act, is based on the “Torrens” model and provides a state-guaranteed title. Under this system, the government certifies ownership through a centralized register, and the registered title is deemed conclusive, subject only to limited statutory exceptions.

The Land Titles system simplifies conveyancing by eliminating the need to investigate historical title documents, whereas the Registry system requires such investigation to confirm ownership. The Land Registration Reform Act harmonizes procedures between the two systems but maintains their legal distinctions. Over time, Ontario has been converting properties from the Registry system to the Land Titles system to enhance certainty and efficiency in land transactions.  Ultimately, the Land Titles system offers greater protection and reliability, making it the preferred model for modern land registration in Ontario.

Over 90% of Ontario's privately owned land has been converted from the Registry system to the Land Titles system. This conversion has been part of a long-term modernization initiative led by the Government of Ontario aiming to streamline and secure land registration processes. The transition began in earnest in the 1990s and was guided by recommendations from the Ontario Law Reform Commission, which concluded that the Land Titles system was superior in nearly every respect.  The conversion process involved "parcelizing" land records – assigning each property a unique Property Identifier Number (PIN) and creating a computerized Parcel Register.

Today, almost all properties in Ontario are registered under the Land Titles system, with only a small fraction remaining in the Registry system. These remaining “Registry Non-Convert” properties are typically more complex or have unresolved title issues that prevent immediate conversion.  For example, unclear boundaries, missing documentation or conflicting ownership claims are reasons why some properties were never administratively converted to the Land Titles system.  Where there is a problem with a property description that is holding up conversion, a landowner must often obtain a new reference plan of survey for a property as a condition of converting to Land Titles.

Some properties left in the Registry system have been the targets of fraudsters.  “Project Perspicarious” was the name allegedly given by an Ontario realtor to his fraudulent scheme aimed at acquiring ownership of unregistered or ambiguously titled properties still in the Registry system.  According to sworn evidence from a former employee of the realtor’s firm, the scheme involved identifying parcels of land that had not been converted to the Land Titles system and appeared to lack a clear registered owner.  The employee described the realtor’s process of registering “rogue deeds” – documents purporting to transfer ownership between associates or shell parties to fabricate a chain of title.  The goal was to eventually have the property conveyed to the realtor himself, thereby creating the appearance of legitimate ownership.  

The scheme relied on exploiting gaps in the Registry system, particularly the “forty-year rule” under the Registry Act, which allows title to be established by tracing ownership back four decades. By inserting fraudulent instruments into the Land Registry, the realtor aimed to satisfy this requirement artificially. He allegedly planned to profit by selling the properties or, if challenged, to seek compensation through the Land Titles Assurance Fund or private title insurance.

The story of “Project Perspicarious” is described in a recent decision of the Superior Court of Justice in a case fought between the realtor and a Conservation Authority.  The Authority brought a claim for declaration of title to a Registry Non-Convert property that it had acquired back in 1973 and over which it had since maintained possession and control. The realtor contended that he owned the land based on a chain of transfers beginning with a quitclaim deed from “Mr. P.” in 2013, but the Court ruled that “Mr. P.” had no title to give to the realtor in the first place and, “[t]he quality of title in the subsequent deeds is only as strong as the weakest link in the chain of title starting with the quitclaim deed in 2013.”  The Court drew an adverse inference against the realtor for having failed to call “Mr. P.” as a witness or to provide any evidence from him: “The source of title in the quitclaim deed of [Mr. P.] would have been key evidence in this case, and [Mr. P.] would have been the witness to give it.”

Properties in Ontario that remain in the Registry system face several legal and practical risks. Unlike the Land Titles system, which guarantees ownership and provides a centralized, authoritative record, the Registry system merely records documents without verifying title. This means ownership must be proven through a chain of title, often requiring a 40-year historical search. If any link in that chain is missing, unclear, or fraudulent, the property may be vulnerable to competing claims. Registry properties are also more susceptible to title fraud, as rogue deeds can be registered without rigorous verification. Administrative errors during conversion to Land Titles may leave some parcels unconverted, creating confusion over ownership and boundaries. Additionally, Registry properties may be excluded from certain protections under the Land Titles Act, such as assurance fund coverage. As these risks can complicate sales, financing, and development of land, landowners are well advised to investigate the status of any properties still in the Registry system and the possibility of conversion to Land Titles.

Read the decision at: 2025 ONSC 3090 (CanLII).

 

Court declines to find that shared driveway right-of-way was abandoned

The drawing above shows three adjacent residential properties in Toronto (in blue, pink and yellow) along with a right-of-way that is shared by the three properties (in green).  The street adjacent to the three properties runs down the left side of the drawing; the right-of-way is a driveway that runs back behind the properties in an L-shape.

 

The owners of the blue lot wanted to use the driveway pursuant to the deeded right-of-way.  The owner of the yellow lot challenged this use on the basis that the blue lot owners had abandoned the right of way.  She claimed that she was entitled to park her car beside her house so as to block the laneway.  In fact, both the yellow lot owner and the pink lot owner (or their predecessors in title) had fenced off the right-of-way adjacent to their backyards.

 

The owners of the blue lot applied to the Superior Court of Justice for an order enforcing their rights to use the right-of-way.  In reviewing the application, the Court noted that the rights-of-way of the three lot owners were duly registered on title.  However, the registered owner of the right-of-way lands (the laneway) had passed away and none of his heirs were made parties to the application by the owners of the blue lot.  For that reason, Justice Myers stated, "I am reluctant to declare any rights in the laneway that may affect the owners' interests."

 

Justice Myers did comment that he would not find as a fact that the applicants (owners of the blue lot) or their predecessors in title abandoned their right-of-way over the laneway, but he did not think that he had the proper parties before him (including the owners of the laneway) to make a formal determination that the owners of the blue lot had not abandoned the right-of-way.  Justice Myers was prepared, however, to enforce the applicants' deeded right-of-way as against the other two residential lot owners (pink and yellow) in personam so that neither of those two owners would be permitted to block the laneway.  He specified that, "nothing herein is intended to bind the true owner(s) of the laneway and my order is expressly without prejudice to any and all rights of the true owner(s) to assert abandonment or any other causes of action or defence that he, she, it, or they may have against the [residential owners]."

Read the decision at: Currie v. Chatterton.

Is a 1960 reservation of the right to take hay still enforceable?

The Nova Scotia Supreme Court has recently heard the case of a farmer looking to exercise a right to take hay that was first created in 1960.  The Court explained:

This application involves the interpretation of a reservation of a hay/crop

right in favour of GC, his heirs and assigns” in a 1960 deed from

GC to the respondents’ predecessor in title ID. An area of some 2.7 acres of GC’s 150-acre farm lot in Antigonish County, was conveyed, along with a 100-year old farm house and barn (or its foundation), collectively “the S lot.” After describing the dimensions of the 2.7-acre lot, which runs through GC’s farm lot, the deed then provides the following:

RESERVING however to the said GC, his heirs and assigns the right and privilege to enter upon the said land from time to time for the purpose of removing hay or other crops or improving the land, ...

GC's nephew and successor in title has now come to the Court seeking an order confirming and declaring his right to enter the 2.7 acre parcel "for the purpose of removing hay or other crops or improving the land".

The Court determined that the right reserved to GC when he sold the 2.7 acre parcel was a "profit a prendre" - a right to take the produce or profit from the land.  The Court ruled that GC had reserved to himself and to his assigns (his successors in title) the right to remove hay form a portion of the 2.7 acres and that this reservation was not "repugnant" to the grant of title to the 2.7 acres (i.e. the sale of the land in 1960).

The responding parties (the current owners of the 2.7 acres) argued that the profit a prendre was extinguished years ago "because the purpose for which the condition was created has now expired".  The Court disagreed with this position.  It found that the owners of the GC lands have continued to take hay from the 2.7 acres since 1960 (whether for their own use or by lease to another farmer) and that:

If the profit appurtenant has been extinguished by the permanent alteration of the GC tenement, since it is no longer a cattle farm, then removal of the hay is still held as a right in gross, unaffected by such circumstances. It is a right exercisable by GC, the owner of it independently of his ownership of any land. The reservation is not rendered void or the profit extinguished due to alteration to the GC lot. 

However, the Court agreed with the respondents that the right to take hay on the whole 2.7 acres unreasonably limited their potential use of the property.  The Court made an order allowing the respondents to use the land within a certain tree line, which the Court determined "would not be an actionable infringement of the reservation rights".  The Court did grant the application and declared that the GC land owners hold a profit a prendre.

Read the decision at: Chisholm v. Snyder.