Present: Beetz,
Estey*,
Lamer, Le Dain and La Forest JJ.
on appeal from the court of appeal for quebec
Registration
‑‑ Subdivision ‑‑ Original lots subdivided ‑‑
Subdivision effective from deposit in Registry Office of plan and book of
reference approved by Minister ‑‑ Subdivision valid notwithstanding
registrar's failure to enter subdivisions on index of original lots ‑‑
Subdivided lots unaffected by registrations made against original lots after
subdivision took effect ‑‑ Civil Code, arts. 2168, 2175 ‑‑
Cadastre Act, R.S.Q. 1977, c. C‑1, ss. 14, 15.
Registration
‑‑ Subdivision ‑‑ Subdivision not being a real right,
subject to no registration requirement ‑‑ General rules of
registration under arts. 2082, 2083 and 2085 C.C. inapplicable ‑‑
Civil Code, arts. 2082, 2083, 2085, 2175 ‑‑ Cadastre Act, R.S.Q.
1977, c. C‑1, s. 14.
Appeal
‑‑ Cross‑appeal ‑‑ Motion made at hearing ‑‑
Motion dismissed as tardy.
Montclair
Investment Corporation was the owner of lots 5 and 6 of the north range of the
Township of Amherst. Between 1959 and 1961 the company subdivided these two
lots. The registrar prepared an index of immovables for each subdivided lot;
however, he failed to note on the index of the original lots that these lots
had been subdivided, as required by s. 14 of the Cadastre Act. This
notation was not made until March 16, 1978. Between 1960 and 1971, appellants
purchased eleven of these subdivided lots and duly registered their titles on
the index of the lots. In 1977, respondent, who was both creditor of Montclair
Investment Corporation and owner of half its shares, had lots 5 and 6 seized
prior to judgment. In a judgment by default, respondent was declared owner of
an undivided half of these lots. He registered this judgment against lots 5 and
6 and then caused the other undivided half of these lots to be seized and sold
by the court. He purchased the other half and registered the sale against the
original lots. In June 1980, respondent brought an action to be declared the
absolute owner of lots 5 and 6, to have the subdivisions entered on the index
of immovables struck out and to force appellants to vacate their immovables.
Alternatively, respondent further asked that if his rights could not be
enforced the registrar be ordered to compensate him.
The
Superior Court dismissed the action and the claim against the registrar. The
Court of Appeal allowed the appeal, declared respondent the sole owner of lots
5 and 6 and ordered appellants to relinquish possession of the disputed
subdivisions. Applying articles 2082, 2083 and 2085 C.C., the Court of
Appeal held that the subdivision could not be set up against respondent and
that he had priority over purchasers of the subdivided lots because respondent
had registered his rights before the subdivision was noted on the index of the
original lots.
Held: The appeal should
be allowed.
Subdivision
is simply a cadastral operation by which the owner parcels all or part of a lot
and gives each new parcel a separate number made up in part of the number of
the original lot. Subdivision is not a real right and is not subject to
registration. Thus the rules as to priority set out in arts. 2082 et seq.
of the Civil Code cannot be applied to determine the rights of the
parties.
Respondent's
submission that a subdivision must be registered under art. 2175 C.C. or
s. 14 of the Cadastre Act cannot be upheld. The "deposit" of
the plan of subdivision in the Minister's office and the "deposit" of
this plan, as approved by the Minister, in the Registry Office are not
synonymous with registration by deposit, but rather mean filing, handing over
or forwarding.
A
subdivided lot is effective for registration purposes on the date the plan of
subdivision is deposited in the Registry Office. The registrar's failure to
make a notation on the index of the original lot after the plan has been
deposited, as required by s. 14 of the Cadastre Act, does not invalidate
the subdivision since it has already taken effect. The registrar will however
be liable if this failure causes loss to anyone. Under article 2168 C.C.,
in any act registered after the subdivision the lots are to be designated by
the number assigned to them in the plan of subdivision. The effect of this
article is that any title registered without the official designation of a lot
does not affect the immovable and confers no right which can be set up against
third parties. As the original lot ceased to exist when the subdivided lots
became effective, the registrations containing the designation of the original
lot are invalid and do not affect that lot. In the present case, respondent
cannot claim any right in appellants' lots, since none of the acts registered
by him affects those lots. The registrations carried out by respondent on
original lots 5 and 6 are invalid against appellants. Only the acts registered
by appellants and containing the number and designation of the subdivided lots
can be set up against third parties claiming rights to those lots.
At
the hearing, respondent made a motion to file a cross‑appeal regarding
liability of the registrar. In view of the tardiness of this motion, it should
be dismissed. In addition, the trial judge concluded that there was no proof of
damage caused by the registrar's failure and there is no reason to alter that
conclusion.
Cases Cited
Referred
to:
St‑Gelais v. Banque de Montréal, [1968] S.C.R. 183; Economic
Realty Ltd. v. Benoît, [1946] C.S. 81.
Statutes and
Regulations Cited
Cadastre Act, R.S.Q. 1977, c. C‑1, ss. 14, 15.
Civil Code, arts. 1646, 2082, 2083, 2085, 2129a, 2132 et
seq., 2161, 2168, 2171, 2175.
Authors Cited
Bélanger, Albert. "La description légale d'un
emplacement" (1981), 83 R. du N. 517.
Bélanger, Albert. "Le régistrateur québécois"
(1982), 84 R. du N. 499.
Charron, Camille. "Plans et cadastres: leur mise en
vigueur et leurs effets sur les titres" (1974), 76 R. du N. 345.
Comtois, Roger. "Jurisprudence: Opérations cadastrales‑‑Subdivision
et redivision‑‑"Ajouté"" (1973), 75 R. du N.
546.
Giroux, G. M. "La publicité foncière" (1936),
38 R. du N. 447.
Lamontagne, Denys‑Claude. "Questions
d'enregistrement" (1982), 84 R. du N. 407.
Marler, William deMontmollin. The Law of Real
Property. Completed and arranged by George C. Marler. Toronto: Burroughs
& Co., 1932.
APPEAL
from a judgment of the Quebec Court of Appeal, [1984] C.A. 18, setting aside a
judgment of the Superior Court1. Appeal allowed.
Sup. Ct., No. 500‑05‑003419‑809,
May 26, 1981.
Jack
Bobrove, for the appellants.
Léo
Di Battista and Sergio Tucci, for the respondent.
Jean‑Yves
Bernard, for the mis en cause.
English
version of the judgment of the Court delivered by
1. Lamer J.‑‑Montclair
Investment Corporation, which is not a party to this action, was the owner of
lots 5 and 6 of the north range of the Township of Amherst, Papineau
registration division. By four successive operations between 1959 and 1961,
Montclair had these entire lots subdivided. In accordance with arts. 2161 and
2171 of the Civil Code, the registrar prepared an index of immovables
for each subdivided lot; however, he failed to note on the index of the
original lots that these lots had been subdivided, as required by s. 14 of the Cadastre
Act, R.S.Q. 1977, c. C‑1. This notation was not made until March 16,
1978. Between 1960 and 1971, appellants purchased eleven of these subdivided
lots and duly registered their titles on the index thereof.
2. On
May 14, 1974, by an agreement signed in Italy, respondent bought half the
capital stock of Montclair and granted a one‑year loan to that company.
Three years later, as he had received neither the shares nor repayment of the
loan, respondent made a seizure before judgment of lots 5 and 6. On October 28,
1977, in a judgment by default, respondent was declared owner of an undivided
half of these lots and also obtained damages against Montclair. Respondent
registered this judgment against lots 5 and 6, and then caused the other
undivided half of these lots to be seized and sold by the court. He purchased
this other half and registered the sale in December 1979, still against the
original lots.
3. On
June 2, 1980, respondent brought an action to be declared the absolute owner of
lots 5 and 6, to have the subdivisions entered on the index of immovables
struck out and to force appellants to vacate their immovables. Alternatively,
respondent further asked that if his rights could not be enforced the mis en
cause registrar be ordered to compensate him, with interest and costs.
4. The
Superior Court judge dismissed the action and concluded that respondent could
not succeed in his claim against the mis en cause. The Court of Appeal allowed
the appeal, declared respondent the sole owner of lots 5 and 6 and ordered
appellants to relinquish possession of the disputed subdivisions: [1984] C.A.
18.
5. In
this Court, appellants' primary argument was that all the formalities required
for the validity of the subdivisions were carried out in accordance with art.
2175 C.C., which reads as follows:
2175. Whenever the
owner of a property designated upon the plan or book of reference, subdivides
the same into town or village lots, he must deposit in the office of the
Ministre de l'énergie et des ressources a plan and book of reference certified
by himself, with particular numbers and designations, so as to distinguish them
from the original lots; and if the Ministre de l'énergie et des ressources
finds that such particular plan and book of reference are correct, he transmits
a copy certified by himself to the registrar of the division and to the clerk
or the secretary‑treasurer of the municipality within the limits of which
is situated the subdivided property.
6. In
appellants' submission the registrations made by respondent against the
original lots are therefore invalid, because in view of the subdivisions made
those lots no longer existed. They further argued that, as subdivision is not a
real right it does not have to be registered, and art. 2083 C.C. cannot
be applied to set the order of priority in the parties' rights.
7. Respondent
in turn argued that a subdivision must be registered under art. 2175 C.C.
and s. 14 of the Cadastre Act; as the registrar did not make the
required notation, respondent's rights have priority over those of appellants
because they were registered earlier. Alternatively, if he must bear the loss
of the disputed immovables, respondent asked that the registrar be ordered to
compensate him. The mis en cause supported appellants' arguments and denied his
liability to respondent.
8. There
is no question that the registrar was at fault in failing to note the
subdivision on the index of the original lots, since he had a legal duty to do
so. In my opinion, the case at bar turns on the effect of this failure on the rights
of the parties who each registered their title, one against the original lots
and the other against the subdivided lots. However, in view of the arguments
made in this Court and the judgment rendered by the Court of Appeal in the
present case, we must first determine whether, as respondent suggests, the
subdivision must in fact be registered. If not, the articles relied on by the
Court of Appeal are inapplicable and the matter must be resolved in accordance
with other principles.
9. In
order to determine the rights of the parties at bar, the Court of Appeal
applied arts. 2082, 2083 and 2085 C.C., which deal with the effects of
registration:
2082. Registration
gives effect to real rights and establishes their order of priority according
to the provisions contained in this title.
2083. All real rights
subject to be registered take effect from the moment of their registration
against creditors whose rights have been registered subsequently or not at all.
If however a delay be allowed for the registration of a title and it be
registered within such delay, such title takes effect even against subsequent
creditors who have obtained priority of registration.
2085. The notice
received or knowledge acquired of an unregistered right belonging to a third
party and subject to registration, cannot prejudice the rights of a subsequent
purchaser for valuable consideration whose title is duly registered, except
when such title is derived from an insolvent trader.
10. In
the view of the Court of Appeal, although subdivision is neither an ownership
title nor a real right it affects the registration of both; in the absence of
specific provisions, the Court applied the general rules of registration. Thus,
as respondent registered his rights before the subdivision was noted on the
index of the original lot, the Court of Appeal considered that the subdivision
could not be set up against him and he therefore had priority over purchasers
of the subdivided lots.
11. The
provisions applied by the Court of Appeal are contained in Title Eighteenth,
"Of Registration of Real Rights". These provisions do not prescribe
the rights subject to registration but the effect of registration on real rights,
in other words how those rights will rank among themselves. Articles 2082 et
seq. will only apply if the rights are real rights, otherwise their
priority will not be governed by those articles. For example, art. 1646 C.C.
provides that a lease for more than twelve months must be registered in order
to protect the tenant in the event of a change of owner; as a lease is a
personal right, the effect of this registration is not governed by Title
Eighteenth but by art. 1646 itself. The nature of a subdivision must therefore
first be determined to establish whether it is a real right.
12. Subdivision
is broadly defined as a cadastral operation. In Quebec the cadastre is used for
the identification of plots of land and the registration of acts affecting
them. It is a graphic representation of the division of land into units of
ownership. Naturally, this division is not static, since the purpose of
preparing the cadastre was not to halt economic activity and real estate
development. For the cadastre to accurately reflect reality a mechanism was
needed to record the parcelling of land which is constantly occurring. This
mechanism is called subdivision. Subdivision is a simple cadastral operation by
which the owner parcels all or part of a lot and gives each new parcel a
separate number made up in part of the number of the original lot. (Giroux,
"La publicité foncière" (1936), 38 R. du N. 447, at p. 449;
Comtois, "Jurisprudence: Opérations cadastrales‑‑Subdivision
et redivision‑‑"Ajouté"" (1973), 75 R. du N.
546, at p. 548; Bélanger, "La description légale d'un emplacement"
(1981), 83 R. du N. 517, at p. 573.)
13. As
the cadastre must be updated for registration purposes, subdivision also helps
to reduce the risk of confusion in this area. When it becomes effective, a
separate index of immovables is prepared for each subdivided lot to record acts
affecting it. If subdivision did not exist, acts relating to all the parcels
created from the same original lot would be entered on the index for that lot.
Determining exactly what rights affect each parcel would then be a very onerous
operation, in view of the large number of entries that might be made on a
subdivided lot. The purpose of subdivision is therefore also to facilitate
keeping the real estate register.
14. A
real right is a legal relationship between a person and a thing: it gives its
holder a direct and immediate legal power over the thing, a power which he
exercises without intermediary. If principal (the right of ownership and its
components), it relates to the physical aspect of the thing; if accessory (such
as an hypothec, pledge or privilege), it concerns the monetary value of the
thing as a guarantee of the performance of a principal obligation. The
attributes of the real right are the right of pursuit and the right of
preference, as well as possession and the right of abandonment.
15. A
cadastral operation is obviously not a real right: it creates no legal
relationship between a person and a thing and confers on its originator no
right of preference or right of pursuit. Subdivision as such does not in any
way alter the rights of the owner of the original lot: he is quite free to
subdivide his lot without giving up his right of ownership. Subdivision only
substitutes several lots on the cadastre where previously there was only one.
No real right is thus created, altered or extinguished. It is only when the
owner transfers one of the subdivided lots that a real right will arise.
16. As
subdivision is not a real right arts. 2082 et seq. cannot in my view be
applied to determine priority between the rights of the parties. Respondent
still maintained that art. 2083 governs the matter because subdivision is
"subject to be registered" under art. 2175 C.C. In his
submission this article provides that registration must be made by deposit in
accordance with arts. 2132 et seq. This argument cannot be upheld, as I
see nothing in art. 2175 providing for registration. When registration of an
act is required, it is done in clear and express terms, as can be seen from the
many articles of the Civil Code dealing with this matter. The
"deposit" of a certified plan is not synonymous with registration by
deposit, but rather means filing, handing over, forwarding. Additionally, this
"deposit" is done in the Minister's office, and the Minister in turn
forwards a copy certified by him to the registrar. Registration cannot take
place by deposit in the Minister's office, and the legislator certainly did not
intend to make the Minister responsible for registration on behalf of the
owner.
17. Respondent
further relied on the wording of s. 14 of the Cadastre Act as a basis
for arguing that the subdivision must be registered:
14. As soon as any subdivision or
redivision plan, accompanied by a book of reference, has been deposited in his
office, the registrar shall note in the index to immoveables, under the number
of the original lot or of the subdivision or redivision, the fact that such lot
has been subdivided or redivided, in whole or in part, as the case may be.
18. The
plan which is "deposited" in the registrar's office is not deposited
as the result of a registration by deposit, as respondent appeared to think,
but as the result of the forwarding of a certified copy of the plan by the
Minister. At the risk of repeating myself, such a deposit is not a registration.
Section 14 further imposes on the registrar a duty to make a notation on the
index of the original lot to inform persons concerned of the fact of the
subdivision. It cannot be inferred from this duty imposed on the registrar that
the owner also has a duty to register the cadastral operation he has
undertaken. Moreover, paragraph 3 of art. 2129a C.C. expressly provides
that the depositing of a subdivision plan does not constitute registration.
2129a. The deposit of
a plan in the registry office in virtue of an act requiring it is considered as
a registration of such plan and treated as such.
The plan must be accompanied with a notice showing
the description of the immoveable contemplated therein in accordance with the
prescriptions of article 2168.
This provision does not include deposits of plans
contemplated in articles 2166 to 2176c and in the Cadastre Act (Revised
Statutes, 1941, chapter 320).
19. In
short, since subdivision is not a "real right subject to be
registered", there is no reason to apply the rules of preference stated in
arts. 2082 et seq. of the Civil Code to determine the rights of
the parties at bar. Such a determination must be made in light of the rules
governing subdivision.
20. A
subdivision takes place in accordance with art. 2175 C.C. and the
provisions of Division III of the Cadastre Act. Under article 2175 an
owner must prepare a certified subdivision plan which he submits for approval
by the Minister of Energy and Resources. If the Minister approves it, he then
forwards a copy of this plan to the registrar and to the clerk or secretary‑treasurer
of the municipality. In the opinion of commentators a subdivided lot is
effective for registration purposes on the date this plan is deposited in the
registry office (Marler, The Law of Real Property (1932), at p. 576;
Charron, "Plans et cadastres: leur mise en vigueur et leurs effets sur les
titres" (1974), 76 R. du N. 345, at p. 356; Bélanger, "Le
régistrateur québécois" (1982), 84 R. du N. 499, at p. 537).
21. When
the plan has been deposited, and hence after the subdivided lot has become
effective, s. 14 of the Cadastre Act imposes on the registrar a duty to
make a notation on the index of the original lot. The registrar is no doubt
required to carry out this administrative formality so as to inform interested
third parties, and he will be liable if his failure to do so causes prejudice
to anyone. However, this formality is not essential to the validity of the
subdivision, as respondent maintained, since the subdivision already became
effective when the plans were received in the registry office. The subdivision
is therefore complete as soon as the registrar receives the plans approved by
the Minister, with all the consequences that result therefrom.
22. In
particular, s. 15 of the Cadastre Act provides that once a subdivision
has been made the designation given to the subdivided lots will be a true
description of those lots:
15. Whenever a subdivision or a redivision has been
made, the particular number and designation given to each lot, upon the plan
and in the book of reference of such division or redivision, shall be the true
description of such subdivided lots respectively, and shall be sufficient as
such in any document; and the provisions of article 2168 of the Civil Code
shall apply to the lots of such subdivision or redivision.
23. As
article 2168 C.C. applies to subdivided lots, any act registered after
the subdivision must include the number and designation given to those lots by
the owner:
2168. ...
As soon as such plans and books of reference have
been deposited and notice thereof has been given, notaries passing acts
concerning immoveables indicated on such plan are bound to designate such
immoveables by the number given to them upon such plan and in the book of
reference, in the manner above prescribed; in default of such designation the
registration does not affect the lot in question, unless there is filed for
registration a notice indicating the number on the plan and book of reference
as being that of the lot intended to be affected by such registration.
...
24. The
effect of this article is that the title registered without the official
designation of a lot does not affect the immovable and confers no right which can
be set up against third parties. This is the rule recognized by this Court in St‑Gelais
v. Banque de Montréal, [1968] S.C.R. 183. Mr. Bélanger is of the same
opinion in "Le régistrateur québécois", loc. cit., at p. 509:
[TRADUCTION] 552. To ensure that cadastral documents will be
used, the legislator provided that a registered document affects an immovable
only if that document indicates the cadastral number or contains a legal
description of the immovable which is to be affected by the registration.
553. In strictly legal terms, a document not containing a legal
description of the immovable which a party purports to affect does not affect
that immovable even when it is entered on the index of immovables.
(See to the same
effect Marler, op. cit., at p. 576, and Lamontagne, "Questions
d'enregistrement" (1982), 84 R. du N. 407, at pp. 414‑15.)
Accordingly, as the original lot ceased to exist when the subdivided lots
became effective, the registrations containing the designation of the original
lot are invalid and do not affect that lot: Economic Realty Ltd. v. Benoît,
[1946] C.S. 81.
25. In
the case at bar the subdivision has been in effect since the plans were
deposited in the registry office. Thus, the registrations made by respondent on
original lots 5 and 6 are invalid so far as appellants are concerned: as the
acts registered by respondent do not contain the official designation of the
subdivided lots, those registrations do not affect them. Only the acts
registered by appellants and containing the number and designation of the
subdivided lots can be set up against third parties claiming rights to those
lots. As far as appellants are concerned, it is the official number of the lot
which must prevail against a number which no longer exists. Respondent clearly
cannot claim any right in appellants' lots, since none of the acts he
registered affects those lots. In my view, the appeal must therefore be allowed
and the trial judgment restored.
26. At
the hearing, respondent made a motion to file a cross‑appeal regarding
liability of the mis en cause registrar. Since the Court of Appeal upheld
respondent's primary argument, it did not rule on this alternative conclusion.
In view of the tardiness of this motion, I feel it should be dismissed. The
trial judge further concluded that there was no evidence of the damages caused
by the registrar's failure: I do not think there is any reason to alter that
conclusion.
27. For
all these reasons, I would allow the appeal with costs throughout.
Appeal
allowed with costs.
Solicitor
for the appellants: Jack Bobrove, Montréal.
Solicitor
for the respondent: Sergio Tucci, Montréal.
Solicitors
for the mis en cause: Bernard, Roy & Associés, Montréal.
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