Canada: The Second Opinion: Bad Faith Possessor … Take My Land, Please

Last Updated: January 6 2015
Article by Martin Boodman

Most Read Contributor in Canada, September 2018

In Dupuy v. Gauthier 2013 QCCA 774, the Quebec Court of Appeal has confirmed that a person who possesses immovable property for 10 years can acquire ownership of it whether or not the possessor knew the property belonged to another.

In the instant case, a shed owned by the defendants, situated on their land, partially encroached on the land of the plaintiff, their neighbour. As a result of deterioration in the relations between the neighbours, the plaintiff sought and obtained in first instance an injunction to have the defendants move or demolish the shed to eliminate the encroachment. The first instance judgement rejected the defendants' argument that they had acquired the ownership of the plaintiff's land under the shed by acquisitive prescription through long-term possession. In particular, the first instance judgement held that the defendants could not have had the intention to possess as owners and their possession could not be unequivocal because at the time they acquired the shed and part of the land under it, they were aware that part of the shed was located on land owned by the plaintiff. In the deed under which the defendants purchased the land and shed from a seller other than the plaintiff, the seller expressly identified the encroachment. The encroachment had also been recognized in the deed under which a previous buyer had purchased the land and shed from the plaintiff.

The Court of Appeal reversed the first instance judgement indicating that it had erroneously applied the notion of good faith. First, the Court of Appeal stated that, in the context of acquisitive prescription, a possessor is in good faith if he is not aware that another owns the property he possesses. The first instance judgement was correct in recognizing that possession must be peaceful, continuous, public and unequivocal and that the physical aspect of possession must be accompanied by an intention to hold the property as an owner. The first instance judgement was incorrect in holding that knowledge that another owned the property possessed necessarily precludes the intention to hold as owner and makes the possession equivocal. The Court of Appeal stated that the Civil Code of Quebec clearly recognizes good and bad faith possession as "possession".

More importantly, interpreting the CCQ as a coherent whole, the Court of Appeal decided that the acquisitive prescription of immovable property through possession for 10 years can be based upon good or bad faith possession. Further, it decided that the rule in article 2920 C.C.Q., regarding the timing of good faith possession, applies only to the acquisitive prescription of movable property which is based solely upon good faith possession.

In addition, the Court of Appeal stated that the intention to possess as an owner is assessed based upon the conduct of the possessor and is presumed by the material possession of the property. Accordingly, the initial owner who challenges the intentional element has the burden to reverse the presumption.

The Dupuy decision indicates that mere knowledge that a building or structure encroaches on a neighbour's property will not be sufficient to prevent acquisitive prescription. Under Quebec law, a person holding property who has acknowledged the superior title of the owner lacks the intention to hold as a possessor. In the case of acknowledgement, possession begins only where unequivocal facts indicate to the true owner a new intention to hold as a possessor, causing an "inversion of title". There may be a fine factual distinction between mere knowledge and acknowledgment of a superior title, particularly where the encroachment is specified or acknowledged in the chain of title originating with the person against whom acquisitive prescription is invoked. The Dupuy decision does not discuss the relationship between knowledge of superior title and its acknowledgment.

In clear cases of encroachment, it might be advisable for the owner at risk of losing a portion of his land to insist that his neighbour sign an acknowledgment of the owner's superior title periodically without permitting 10 years to elapse between acknowledgments. Otherwise, the owner may have to institute proceedings to have the encroachment removed before acquisitive prescription has occurred.

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