At the relevant time, the predecessor version of s. 50(2)(b) (i.e., s. 26(1)(b)) of the Planning Act (Ontario), which prohibited an unauthorized severance of land through the transferor retaining a portion of the land, expressed the condition that the person “does not retain the fee or the equity of redemption in any land abutting the land that is being conveyed or otherwise dealt with,” i.e., unlike the current version, it did not explicitly require that the vendor or other person not have a power of appointment respecting the lands at issue. Before concluding that there nonetheless was an implied requirement that there be no ability to dispose of retained abutting land, Kelly, J.A. found that s. 26 was not contravened when an individual sold lands while retaining a first mortgage on abutting lands. Although, in form, the mortgage was a deed to the individual of the legal estate in the land, prior to any foreclosure such mortgagee's interest was personalty, and it was only when both the equitable and legal estate in a particular parcel are in one person that the holder of the legal estate (in this instance, such mortgagee) had any power of disposal of the land. He stated (at p. 440):
Having in mind the purpose of Part II of the Planning Act, and the context of the portions of the Act in which the words appear, it is my opinion that the retention of which the Legislature sought to prohibit by s. 26 was that of the power to dispose of the abutting lands as distinguished from an interest in those lands; "fee" must accordingly refer to such an interest in the abutting lands as confers on the holder thereof the absolute right to dispose of the lands.