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Good afternoon and Happy New Year!

Coming out of the holiday season, this past week was a very light week for the Court of Appeal. Only two civil decisions were released, one of them short.

In Oakville (Town) v Sullivan, the Court’s first reported decision of 2021, the Court upheld the application judge’s ruling that the pool amenities built by the appellants on land subject to a hydro easement was an actionable encroachment. The easement had not been abandoned or partially extinguished and the equitable doctrine of propriety estoppel did not preclude the enforcement of the easement.

Please mark down April 27, 2021, from 5:30-7:45pm in your calendars for our fifth annual “Top Appeals” CLE, which will take place via Zoom. Justice Benjamin Zarnett will be co-chairing the event with me and Chloe Snider of Dentons. We are in the process of inviting speakers who participated in the top appeals to be featured, and will be in a position to provide further details about the line-up of cases and panelists shortly. In the meantime, please register for the program by visiting the OBA’s website.

Wishing all of our readers the very best for 2021!

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Oakville (Town) v. Sullivan, 2021 ONCA 1

Keywords: Real Property, Easements, Propriety Estoppel, Contracts, Interpretation, Building Code Act, 1992, S.O. 1992, c. 23, Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417 (C.A.), Raimondi v. Ontario Heritage Trust, 2018 ONCA 750, Weidelich v. de Koning, 2014 ONCA 736, Hunsinger v. Carter, 2018 ONCA 656, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Tessaro v. Langlois, 2019 BCCA 95, Twogee Developments Ltd v. Felger Farming Co Ltd, 2017 ABCA 138, Remicorp Industries Inc. v. Metrolinx, 2017 ONCA 443, Kaiman v. Graham, 2009 ONCA 77, Whitby (Town) v. G & G 878996 LM Ltd., 2020 ONCA 654, Clarke v. Johnson, 2014 ONCA 237

Short Civil Decisions

The Ontario College of Teachers v. Bouragba, 2021 ONCA 8

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Stay Pending Appeal, Courts of Justice Act, ss. 137.1, 137.1(5)


CIVIL DECISIONS

Oakville (Town) v. Sullivan, 2021 ONCA 1

[Trotter, Zarnett and Jamal JJ.A.]

Counsel:

A.G. Formosa and M. N, for the appellants

C.M.K. Loopstra and S.E. Hamilton, for the respondents

Keywords: Real Property, Easements, Propriety Estoppel, Contracts, Interpretation, Building Code Act, 1992, S.O. 1992, c. 23, Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417 (C.A.), Raimondi v. Ontario Heritage Trust, 2018 ONCA 750, Weidelich v. de Koning, 2014 ONCA 736, Hunsinger v. Carter, 2018 ONCA 656, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Tessaro v. Langlois, 2019 BCCA 95, Twogee Developments Ltd v. Felger Farming Co Ltd, 2017 ABCA 138, Remicorp Industries Inc. v. Metrolinx, 2017 ONCA 443, Kaiman v. Graham, 2009 ONCA 77, Whitby (Town) v. G & G 878996 LM Ltd., 2020 ONCA 654, Clarke v. Johnson, 2014 ONCA 237

facts:

The appellants built a pool, surrounding deck, platform and other elements (“Pool Amenities”) behind their house. The Pool Amenities were on land which, although owned by the appellants, was subject to an easement held by the respondents. The easement prohibited “the erection of any building or structure”. The application judge declared the Pool Amenities to be a “building or structure” erected on land subject to an easement, and thus an encroachment. He also ruled that the equitable doctrine of proprietary estoppel did not prevent the respondents from enforcing their rights. The appellants were ordered to remove the Pool Amenities and remediate any damage.

In obiter dicta, the application judge added that had he not concluded that the Pool Amenities contravened the express terms of the easement, he would have ruled that the respondents had not established an actionable encroachment. He was prepared to accept that the Pool Amenities could cause some unknown, but probably minor, degree of inconvenience to the respondents, however, that is not the test for substantial interference. The appellants appealed.

issues:
  1. Is there an actionable encroachment on the easement?
  2. Was the easement abandoned or partially extinguished?
  3. Does the equitable doctrine of propriety estoppel preclude enforcement of the easement?
holding:

Appeal dismissed.

reasoning:
  1. Is there an actionable encroachment on the easement?

Yes. The Court first determined the nature and extent of the easement by interpreting the wording of the instrument creating the easement and the surrounding circumstances when the easement was created. The Court then considered the test for an actionable encroachment, which is whether there is a “substantial interference” with the use and enjoyment of the easement for the purpose identified in the grant. The appellants asserted that the application judge erred in ruling that the Pool Amenities were an actionable encroachment, for two reasons:

  1. the easement did not limit the right to build because it was only intended to be used, and was only ever used, for a hydro line, which could be serviced even with the Pool Amenities.
  2. the application judge applied the wrong test for actionable encroachment by ruling that the appellants were prohibited outright from erecting any structure, regardless of whether that structure substantially interfered with the rights of the easement holders.

The Court did not accept these submissions.

Does the Easement Prohibit the Erection of a Structure such as the Pool Amenities?

Yes. First, the application judge’s ruling as to the nature and extent of the easement involved a question of mixed fact and law that attracted appellate deference, and was reviewable only for palpable and overriding error. The Court held that the application judge properly focused on the wording of the easement indenture. The indenture stated that the appellants’ rights to use the land specifically excluded the erection of any building or structure. He was entitled to conclude that the erection of a building or structure on the easement land was not permitted, period.

The appellants argued that the judge’s interpretation focused mainly on the wording of the indenture and ignored evidence that suggested the easement was primarily intended to permit a hydro line under the appellants’ property. They said that modern technology allowed the hydro line to be repaired even if a structure was erected. The Court did not accept this submission finding that it was, in effect, an invitation for the court to read down the clear words of the easement based on the circumstances and the use made of the easement to date. But, as Rothstein J. for the Supreme Court cautioned in Sattva Capital Corp. v. Creston Moly Corp., “[w]hile the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agreement”. The easement indenture in this case was not limited to placing a hydro line under the property. It also allowed the respondents to install and maintain “underground sewers, drains, pipes, conduits, wires and services generally”. That these facilities had not been installed within the easement to date was irrelevant as the easement was perpetual, not time limited.

In the Court’s view, the application judge’s determination of the nature and extent of the easement was not tainted by palpable or overriding error. The Court therefore rejected the appellants’ first argument that the easement did not prohibit the erection of a structure such as the Pool Amenities.

Did the Application Judge Apply the Wrong Test for an Actionable Encroachment?

No. Although the Court did agree that the application judge’s reasons could have been clearer, the Court read those reasons as implicitly applying the substantial interference test. By contravening the outright prohibition against erecting a structure, the Pool Amenities encroached upon the easement. The easement indenture did not say that the appellants were prohibited from erecting a structure unless it created a barrier or obstacle to the respondents’ exercise of their rights. The appellants were prohibited outright from erecting any structure. By agreeing to an outright prohibition, without qualification, the parties had effectively defined for themselves what would constitute a substantial interference with the easement.

The Court found that the application judge’s observation in obiter that the respondents did not discharge their onus of establishing substantial interference did not detract from this conclusion. Because it was in the alternative, it did not consider the outright prohibition against erecting any structure. But when the outright prohibition was considered, as it was under the first part of the application judge’s analysis, a substantial interference was established.

  1. Was the easement abandoned or partially extinguished?

No. In Remicorp Industries Inc. v. Metrolinx, the Court had reviewed the general principles relating to abandonment of an easement by release and partial extinguishment of an easement. Unless an easement is granted for a term, the rights conferred by an easement are perpetual and are actually or potentially valuable rights. Therefore it is not likely to be inferred that the owner of such a right would give it up for no consideration. Other than by an express release, an easement can be abandoned by release impliedly by non-use coupled with evidence of an intention to abandon the easement. An easement can also be extinguished either by statute or at common law.

Here, in the alternative, the appellants asserted that the easement had been abandoned for any purpose other than the hydro cable. They also suggested that the easement had been partially extinguished at common law because the easement served no purpose other than servicing the hydro cable. The application judge made no express findings on abandonment or partial extinguishment, and it was not clear whether these issues were argued before him. The Court generally does not entertain entirely new issues on appeal.

In any event, based on the evidence before the Court, there was no basis to conclude that the easement was abandoned or partially extinguished. No express abandonment was alleged, nor had the appellants established implied abandonment. The Court found that the creation of the easement by express grant and its continued use was sufficient to find that the respondents did not intend to abandon it. Nor was there any basis to find that the easement was extinguished at common law. There was no evidence that the municipal purposes for creating the easement had come to an end. Nor did lack of use and lack of need suffice to extinguish an easement by operation of law.

  1. Does the equitable doctrine of propriety estoppel preclude enforcement of the easement?

No. Proprietary estoppel is an equitable doctrine that can create or affect property rights when there is a want of consideration or of writing. Three elements must be established. First, the owner of the land induces, encourages or allows the claimant to believe that he has or will enjoy some right or benefit over the property. Second, in reliance upon his belief, the claimant acts to his detriment to the knowledge of the owner. Finally, the owner then seeks to take unconscionable advantage of the claimant by denying him the right or benefit which he expected to receive.

The appellants’ argued: (i) the Town expressly permitted the construction of a portion of the appellants’ house and carport within the easement, and thus induced, encouraged, or allowed them to believe that the easement was abandoned or no longer in use; (ii) the appellants relied on this belief when building the Pool Amenities; and (iii) it would be unconscionable to allow the respondents to now assert that the Pool Amenities encroach on the easement.

The application judge rejected this argument finding there was no evidence to suggest that the respondent knew about the other structures, thus it could not be said it induced, encouraged or allowed the appellants to build. Additionally, there was nothing “unconscionable” about the respondents enforcing the clear wording of the indenture. The Court found that the application judge’s conclusion that the appellants had not established the conditions for proprietary estoppel was a finding of mixed fact and law that attracted appellate deference, absent palpable and overriding error. In the Court’s view, the appellants had shown no such error.


SHORT CIVIL DECISIONS

The Ontario College of Teachers v Bouragba, 2021 ONCA 8

[Doherty, Zarnett and Coroza JJ.A.]

Counsel:

A.B., appearing in person

C.L. Lonsdale and C-A. Malischewski, for the respondent

Keywords: Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Stay Pending Appeal, Courts of Justice Act, ss. 137.1, 137.1(5)


The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

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Photo of John Polyzogopoulos John Polyzogopoulos

John has been the editor of Blaneys Appeals since the inception of the blog in the Summer of 2014. He is a partner at the firm with almost two decades of experience handling a wide variety of litigation matters. John assists clients with…

John has been the editor of Blaneys Appeals since the inception of the blog in the Summer of 2014. He is a partner at the firm with almost two decades of experience handling a wide variety of litigation matters. John assists clients with matters ranging from appeals, to injunctions, to corporate, breach of contract, construction, environmental contamination, product liability, debtor-creditor, insolvency and other business litigation. He also handles professional discipline and professional negligence matters, as well as complex estates and matrimonial litigation. In addition, John represents amateur sports organizations in contentious matters, and advises them in matters of internal governance. John can be reached at 416-593-2953 or jpolyzogopoulos@blaney.com.