Q: More than 10 years ago we were involved in a dispute over whether our land had been sold. We bought the land in the 1940s and did a lot of clearing to make it a farm. To support ourselves, my husband also had an off-farm job. At my husband’s retirement, some colleagues suggested that he should list the land for sale to get some idea of what it might be worth. This we did, though our intention was not to sell the land.
A young man from the United States with relatives in the area, called to inquire about the land. He was persistent and called frequently trying to get us to sell. We were annoyed by his tactics. At various times he brought handwritten agreements for us to sign. Eventually, we signed something just to get rid of him and at the same time he offered us a cheque.
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We are not sophisticated businesspeople; our first language is not English and we have not had experience in selling land. We hung on to the duplicate certificate of title, thinking that this was necessary to complete the sale. Nevertheless, the lawyers told us that we had signed a valid deal. In one of your columns, you mentioned that sales of land had to be in writing because of an English law dating from the 1600s. However, you indicated that the writing need not be a formal agreement but could even be on a cigarette pack. In this day and age, this seems unfair. With our lawyers and legal procedures, shouldn’t an agreement to sell land be a formal document carried out in front of proper officials?
A: Agreements can be set aside if they are obtained under duress or undue influence. For example, a potential purchaser gets a landowner drunk and then gets him to sign a sales agreement. The court would find that the agreement was obtained under duress and would void the agreement. Of course, the onus would be on the landowner to go to court and have the agreement set aside.
Once an agreement, handwritten or otherwise, is entered into, the purchaser can ask for a court order to enforce the agreement if the vendor refuses to co-operate.
For example, assume that the purchaser has made all the necessary payments and the vendor refuses to sign the document transferring title to the purchaser. The purchaser would be entitled to obtain a court order ordering the land titles office to transfer title. Hanging onto a duplicate certificate of title will not result in the transaction being defeated.
Most provincial land titles systems either have or are in the process of doing away with the duplicate certificate.
There is yet another aspect to this issue. If a transfer of title is obtained by fraud, it can be set aside. Assume C owns some farmland. B, her son, brings an impostor to a lawyer’s office and convinces the lawyer that the impostor is his mother and wants to transfer the land to him. The lawyer prepares the transfer document and the impostor signs it using C’s name. Title is registered in B’s name. Under our land titles system, this transaction could be set aside because the transfer was obtained by fraud.
However, if B sold the land to D, a bona fide purchaser, then the transaction could not be set aside in order to ensure the efficiency of the land titles system. Instead, C could claim against the insurance fund. A case similar to this occurred in Saskatchewan.
Finally, should the law recognize handwritten agreements? This is a matter of public policy and generally most people believe the law should allow freedom of contract, meaning that people can draw up their own agreements rather than being bound by prescribed forms.
Remember that even our prime minister, trained in law and having served as justice minister, transferred his interest in a golf course by a simple handwritten note. And when it comes to real estate, most agreements are entered into with either a real estate agent who uses prescribed forms or a lawyer who will draft an agreement.
