The Supreme Court confirms the broad principles of acquisitive prescription in real estate law

April 12, 2017

On April 6, 2017, the Supreme Court rendered an important decision in Ostiguy v. Allie, 2017 SCC 22.

In this case, Ms. Allie alleged that she could use a parking space on her neighbours’ property, having become its owner over time by way of acquisitive prescription. Her new neighbours, Mr. Ostiguy and Ms. Savard, however, sought an injunction to stop her from using the space.

The main issue was whether acquisitive prescription can be set up against a new owner whose title was registered in the land register before the possessor’s right was asserted in court.[1]

Writing on behalf of the majority of the Supreme Court, Justice Gascon[2] replied in the affirmative and ruled in favour of Ms. Allie.

Ms. Allie acquired the parking spot on her neighbours’ property and could set up this acquisition against her new neighbours by way of prescription, even if they were unaware of the situation when they purchased the neighbouring property and even if Ms. Allie had not yet instituted proceedings to have her rights recognized at the time that they became the owners.

Facts

Between 1994 and 2011, Ms. Allie and her family used a parking space on the property of their then-neighbour in full view of everyone. Ms. Allie, however, did not bring legal proceedings to have her right recognized after the ten-year prescription had been acquired, that is, after ten years of peaceful, continuous, public and unequivocal possession of the parking space.

In 2011, Mr. Ostiguy and Ms. Savard acquired the neighbouring property by deed of sale. Several months after taking possession of their immovable, they applied for an injunction to prevent Ms. Allie from parking her vehicle on the property. In response, she claimed that she had acquired the parking space by acquisitive prescription, which should prevail over the rights of her new neighbours.

Acquisitive prescription of an immovable is based on peaceful, continuous, public and unequivocal possession during at least 10 years.

The Civil Code of Québec (the “Civil Code”) did not change the process of acquisitive prescription, which may be set up against the registered owner in the land register regardless of when the right was registered.[3]

Acquisitive prescription is a means of acquiring a right of ownership or one of its dismemberments, through the effect of possession. A possessor who asserts ownership of an immovable must prove that he has possessed it as an owner for at least 10 years. Possession must be peaceful, continuous, public and unequivocal in order to produce effects. Judgment must be obtained to confirm the right so acquired.[4]

Possession leading to acquisitive prescription prevails over rights registered in the land register

While possession can create a right when the necessary conditions are satisfied, the same cannot be said of the publication of rights:

“[…] Professor Gidrol‑Mistral notes that [translation] “publication does not have the effect of creating a right, nor does it even consolidate one by purging it of its defects” (G. Gidrol‑Mistral, “Publicité des droits et prescription acquisitive: des liaisons dangereuses?” (2016), 46 R.G.D. 303, at p. 316). The role of publication is limited to allowing rights to be set up against third persons, establishing their rank and, where the law so provides, giving them effect (art. 2941 C.C.Q.). The land register also makes it possible to decide between the rights of two persons who have acquired their titles of ownership from the same predecessor in title (art. 2946 C.C.Q.)”[5]

Therefore, rights validly acquired by prescription apply regardless of the rights registered in the land register. Moreover, rights acquired by prescription do not need to be published in order to be set up against third parties.[6] There is no need to register a judicial application in advance in order to recognize acquisitive prescription of an immovable.[7]

Obviously there must be a preponderance of evidence in order to set up acquisitive prescription.

The evidence of effective possession in this instance was flawless. The fact that the new owners had registered their ownership rights in the land register did not affect the reality that Ms. Allie and her family had possessed the parking space peacefully, continuously, publicly and unequivocally for over 10 years.

Requirement that there be a judicial application to recognize acquisitive prescription is not a condition for creating or granting the right sought

While it is true that the registration of their ownership rights by her new neighbours, Mr. Ostiguy and Ms. Savard, could not defeat Ms. Allie’s action, the Supreme Court also took care to note that the requirement of a judicial application to recognize such rights under article 2918 of the Civil Code[8] does not create or grant the right sought, but is simply declarative of a pre-existing right, which arises through the effective possession of the immovable:

“[…] This leads to the conclusion that prescription depends on achieving effective possession, not on obtaining a judgment; it is acquisitive prescription that grants the right, not the judgment (Lamontagne, Biens et propriété, at p. 490). The judgment attests to the existence of a pre‑existing right; it does not create a new right (Pratte, “La demande judiciaire”, at p. 550; Gidrol‑Mistral, at pp. 331 and 333). In this respect, the requirement in art. 2918 C.C.Q. is more like a procedural condition than a substantive one (Vincelette, at para. 515). All these characteristics suggest a nature that is more declarative than right‑granting or constitutive (Lamontagne, Biens et propriété, at p. 490; Pratte, “La demande judiciaire”, at pp. 550‑51; Gidrol‑Mistral, at p. 333; Vincelette, at para. 514).”[9] (Emphasis added)

Possible action by the new neighbours against the seller

On a final note, it should be mentioned that the new neighbours likely had a cause of action against the seller.

The solution with respect to the scope of acquisitive prescription is found in article 1724 of the Civil Code, which provides as follows:

“1724. The seller warrants the buyer against any encroachment on his part unless he has declared it at the time of the sale.

The seller also warrants against any encroachment commenced with his knowledge by a third person before the sale.” (Emphasis added)

Therefore, although Mr. Ostiguy and Ms. Savard were denied part of their right of ownership that the act of sale purported to transfer to them as a result of the acquisitive prescription set up by Ms. Allie, they may nevertheless claim the corresponding loss from the seller if they can prove that the seller was aware of the encroachment by Ms. Allie before the sale and failed to disclose it to them.[10]



[1] Ostiguy v. Allie, 2017 SCC 22, at para. 3.

[2] Note that Madame Justice Côté rendered a dissenting opinion in the matter.

[3] Ostiguy v. Allie, 2017 SCC 22, at para. 5.

[4] Ostiguy v. Allie, 2017 SCC 22, at paras. 27 and 28.

[5] Ostiguy v. Allie, 2017 SCC 22, at para. 29.

[6] Ostiguy v. Allie, 2017 SCC 22, at paras. 40 and 44.

[7] Ostiguy v. Allie, 2017 SCC 22, at para. 64.

[8] Article 2918 of the Civil Code: “A person who has for 10 years possessed an immovable as its owner may acquire the ownership of it only upon a judicial application.”

[9] Ostiguy v. Allie, 2017 SCC 22, at para. 80.

[10] Ostiguy v. Allie, 2017 SCC 22, at paras. 61 and 62.

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