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VOL. 78 PART 5 SEPTEMBER 2020
lord did not own the building. That would be a “charge”, “notice” or “exception”
within the meaning of s. 23(2)(g) of the LTA. That notice would reduce
or be a true exception to the landlord’s estate in fee simple in the land, and
therefore the building would not be part of the “land” to which the landlord
has an estate in fee simple.
There is case law suggesting that this is not correct and that the definition
of “land” in the Interpretation Act means that a building on leased land must
be part of the land. The leading decision is Woodspan Construction Ltd. v.
British Columbia (Minster of Finance & Corporate Relations).23 Woodspan Construction
Ltd. (“Woodspan”) bought some bare land from a vendor, but
Woodspan did not register that sale immediately in the LTO. Before doing
that, it built a house on the land and then sold the land and the house to a
third party. Only then did it register the purchase of the bare land in the
LTO, after which it registered the sale to the third party. The issue was how
much property transfer tax Woodspan had to pay when it registered the purchase
of the bare land. Woodspan argued that it just purchased the bare
land, not the house, so it did not have to pay tax on the value of the house.
The B.C. Supreme Court said it did, because under the Interpretation Act the
word “land” includes buildings.
However, it is critical to note that, at least as far as the reasons for judgment
disclose, there was no evidence that the parties agreed that Woodspan
would own the house separately from the vendor who owned the bare land.
There was no evidence that any such charge was registered against title to
the land. It is thus distinguishable from the fact situation considered under
Notwithstanding Zellstoff,24 the common law in Canada appears to be that a
tenant may by agreement own a chattel after it is affixed to a building. The
common law also appears to be that, historically, one person could own a
building separately from the land to which it is attached. While there is certainly
authority for saying that that is no longer the common law or the
position under the Torrens system as set out in the LTA, it is suggested that
the weight of logic and policy indicates that land may be owned separately
from the building attached to it and a tenant (or indeed anyone else) may
own the estate in fee simple in the building separately from the land.
At the very least, where no third party is claiming any rights to the building
(e.g., in a tax case, where the tax owing by the landlord or the tenant