Background
In 1881, the construction of a dam raised the water level of Lac Masson in Quebec, submerging a strip of privately-owned land along the shoreline. Between 1959 and 1971, a developer sold numerous lakefront lots to various buyers. The deeds of sale described these lots as being “bounded by Lake” but made no mention of the privately-owned submerged land that now lay between the purchased lots and the main body of the water.
The developer imposed servitudes on the lots, requiring buyers to construct single-family dwellings, which established the properties’ destination for residential and recreational use. For decades, the homeowners used the lots as waterfront properties. However, a new cadastral survey in 2016 revealed that the developer, Zardev Inc., still held legal title to the submerged strips of land separating the homes from the lake.
The homeowners (the respondents in this case) filed an application in court, arguing that the submerged parcels were “accessories” to the principal lots they had purchased and, under Quebec civil law, were automatically included in the sale. The Quebec Superior Court initially ruled in favor of the developer, but the Quebec Court of Appeal unanimously reversed that decision, declaring the homeowners the rightful owners. The developer then appealed to the Supreme Court of Canada.
The Court’s Holding
In an 8-1 majority decision, the Supreme Court of Canada dismissed the developer’s appeal and affirmed the Court of Appeal’s judgment. The Court held that the submerged strips of land were legal “accessories” to the lakefront lots sold to the homeowners. As such, ownership of the submerged land was transferred to the buyers along with the principal properties at the time of the sale, even though it was not explicitly mentioned in the deeds.
The majority’s reasoning centered on the “accessory rule” found in article 1718 of the Civil Code of Québec. This rule, which is suppletive (i.e., it applies unless the parties agree otherwise), presumes that a seller delivers a property along with “all its accessories.” The Court clarified the test for an accessory: a piece of property is an accessory if it is “destined to serve the principal property sold and that, by reason of this destination, is necessary for the agreed use of the latter.” The “destination” of the lots—as vacation homes—was clear from the contracts, and direct, exclusive access to the lake was necessary for that use.
The Court concluded that owning the submerged lots was necessary to guarantee the homeowners’ expected use and enjoyment of their properties. It ensures their direct access to the shore, protects their privacy, and mitigates the risk that the lots would cease to be waterfront properties if the lake level were to drop. Because the developer had not inserted an unequivocal clause excluding the submerged land from the sales, the accessory rule applied, and ownership was transferred to the buyers.
Key Takeaways
- Under Quebec’s Civil Code, a contract for the sale of property is presumed to include its “accessories” unless the contract explicitly and unequivocally excludes them.
- An “accessory” is property that is destined to serve the principal property and is necessary for the buyer to achieve the intended use and enjoyment of that property.
- The intended use, or “destination,” of a property is determined by examining the contract as a whole, including any servitudes or restrictive covenants, to understand the parties’ common intention.
- For lakefront properties sold for residential and recreational purposes, an adjacent, privately-owned strip of submerged land is considered a necessary accessory to ensure the direct and exclusive waterfront access that a buyer would reasonably expect.
Why It Matters
This decision provides significant clarity on the application of the centuries-old “accessory follows the principal” rule within Quebec’s modern property law framework. It champions a functional and purposive approach to contract interpretation, looking beyond the strict text of a deed to uphold the reasonable expectations of the parties, particularly the buyer. The ruling reinforces that a seller’s legal obligation to deliver a property extends not just to its surveyed boundaries but also to what is functionally essential for the property to be used as intended.
The judgment places a clear onus on sellers and developers in transactions involving complex or unusual land configurations. If a seller intends to retain title to a piece of land that is functionally accessory to another, they must do so with an unambiguous exclusion clause in the contract. They cannot rely on a simple property description or the buyer’s unawareness to sever an accessory that is critical to the principal property’s value and purpose.