Pluralism, context, and the internal life of property: A response to Hanoch Dagan

I Introduction

As a property theorist, Hanoch Dagan stands out for his relentless insistence on the plurality of values underpinning the law of property as well as for his focus on the contextual specificity of property institutions. Despite this welcome championing of pluralism and context and his many insights, I want to suggest that Dagan is not sufficiently attentive to either questions of institutional context or the deep challenges of pluralism. The problem lies with the ‘legal realism’ that underpins his theoretical framework. This leads him to reject the critical resources that legal doctrine provides for evaluating institutions and responding to value pluralism.

Let me begin with a case. In 1948, the Ontario Court of Appeal upheld the validity of a covenant attaching to a cottage property, prohibiting the owner from selling the cottage to ‘any person of the Jewish, Hebrew, Semitic, Negro or coloured race or blood.’¹ Although four years earlier a lower Ontario court had declared a similar covenant void on public policy grounds, the Ontario Court of Appeal refused to follow this decision. Some judges distinguished the case; others claimed it had been wrongly decided.² Before a further appeal was heard before the Supreme Court of Canada, the Ontario Legislature responded to the public outcry and passed legislation prospectively banning the creation of such discriminatory covenants.³ The way the story is often told to first year property students is that, when the Supreme Court heard the case, it lacked the courage to face the public policy question squarely and instead invalidated the covenant on the basis of some doctrinal ‘technicalities’ in property law: the covenant failed to conform to the ‘touch and concern the land’ requirement for a valid restrictive covenant; that is, the covenant was not about the land itself or a mode of its use.⁴

What is so attractive about Dagan’s ‘inside’ property strategy is that he would reject this dismissal of the Supreme Court’s approach. Dagan thinks that the law of property should have the internal resources to invalidate such covenants without turning to external, public law ideals. Indeed, Dagan takes Noble and Wolf’s US analogue – Shelley v Kraemer – as a central example that his account needs to be able to explain.⁵ For Dagan, such an explanation needs to refer to the particular values, or combination of values, that serve to define the property institution at issue. In the context of housing, he views the important value to be autonomy. Racially based restrictive covenants, he argues, operate as restraints on alienation by reducing the pool of potential buyers for a property and are ‘practically tantamount to a substantial limit on exit.’⁶ Exit is important because it facilitates mobility and enhances ‘people’s capacity for a self-directed life.’⁷ The autonomy of non-owners is also at stake, for such restraints limit the ability of some people to purchase property in some locations, limiting their mobility.

One problem with Dagan’s autonomy reasons is that they are indeterminate in the face of the facts of Noble and Wolf. While Dagan is correct that this amounts to a restraint on alienation, the common law has always tolerated partial restraints; the important legal question turns on whether something is an ‘unreasonable’ restraint on alienation. Dominant among concerns here is whether the seller would have to sell below market value – but there was no suggestion in this case of any such market effects.⁸ Similarly, there is no factual basis for assuming that the pool of buyers was substantially reduced, limiting the owner’s ‘exit’ options.⁹ Finally, it is not clear that the arguments about access to ownership and its effects on mobility apply as sharply in the context of a summer cottage.¹⁰ In other words, Dagan would have difficulty arguing that the Ontario Court of Appeal’s decision was clearly wrong.

But I think that the deeper problem here is that Dagan’s framework leaves him without important critical resources for illuminating what is most salient about the Ontario Court of Appeal’s failure to...