Supreme Court of Canada discusses the law of adverse possession in recent case

Property law cases do not often reach the Supreme Court of Canada, but a recent adverse possession case out of British Columbia did make it to Canada's highest court.   While certain aspects of the decision are limited in application to British Columbia, the Supreme Court does review the law of adverse possession generally in its reasons.

The Claimants in the case in question claimed title to a parcel of land in Nelson, BC that is adjacent to a separate parcel they purchased in 1992.  The registered owner of the disputed parcel was the provincial Crown.  The Claimants alleged that they and their predecessors in title had continuously possessed the disputed parcel since the early 20th century and, therefore, that ownership had transferred to them by the passage of time.  The Claimants commenced an action for a declaration that the provincial Crown was not the owner of the parcel (and could not transfer it to the City of Nelson), and also brought a petition for judicial investigation of their title under the BC Land Title Inquiry Act.

The headnote from the Supreme Court's decision describes the law of adverse possession as follows: 

"Adverse possession is a longstanding common law device by which the right of the prior possessor of land, typically the holder of registered title, may be displaced by a trespasser whose possession of the land goes unchallenged for a prescribed period of time. To meet the test of establishing adverse possession, the act of possession must be open and notorious, adverse, exclusive, peaceful, actual and continuous. The adverse possessor who successfully obtains title need not always be the same person whose adverse possession triggered the running of the limitation period."

At first instance, the judge hearing the matter granted a summary dismissal application by the City of Nelson, having found that there was an evidentiary gap with respect to the question of continuous possession.  A claim for adverse possession of someone else's property must rest on possession of land by a claimant for a specified period of time that open and notorious, adverse (vis-a-vis the registered owner), exclusive, peaceful, actual and continuous.  The judge at first instance found that there was an interruption in continuity of adverse possession from 1916-1920, resulting in the dismissal of the claim.  The Court of Appeal for BC reversed the decision to dismiss the claim, finding that there was evidence of continuous adverse possession from 1909-1923.  On that basis, the Court of Appeal remitted the matter back to the BC Supreme Court for final determination of the proceedings.

On further appeal, the Supreme Court of Canada reversed the Court of Appeal decision and restored the dismissal of the adverse possession claim made by the judge at first instance.  The Supreme Court found that the original finding of an evidentiary gap could not be set aside by the Court of Appeal based on the evidence.  While the Court of Appeal's finding that there was continuous adverse possession from 1909-1923 was reasonable, the Supreme Court found that the original judge's finding of the gap from 1916-1920 was not open to second-guessing by the Court of Appeal.  Absent a palpable and overriding error, the factual findings of the original judge hearing the matter could not be disturbed.

In this particular case, the time period in the between 1909 and 1923 was important because the claimants had to prove continuous adverse possession of the land either for a period of 20 years leading up to 1930-31 (the date at which the disputed parcel was escheated to the Crown because the company that was at the time the registered owner was dissolved) or for a period of 60 years leading up to the 1970s (when the law in BC was changed to prevent adverse possession going forward).  The onus was on the Claimants to prove continuous adverse possession during the relevant periods, and any gap in the evidence would be fatal to the claim.  A gap was found and the claim failed.

In its reasons, the Supreme Court of Canada also addressed the issue of inconsistent use.  At Common Law, there has been a requirement that a possessor's use of the disputed land must have been inconsistent with the "true owner's" present or future enjoyment of the land.  To be truly adverse, the possession must "entail a use of the property that is inconsistent with the true owner's intended use of the land."  However, while that inconsistent use requirement has appeared in the jurisprudence in Ontario, it has formed no part of the law in British Columbia.

The Supreme Court also commented on the distinction between "continuous possession" and "continuous occupation".  The Claimants suggested that the judge at first instance had erred in finding the evidentiary gap by confusing possession and occupation.  They argued that proof of continuous occupation of land is not required to prove continuous possession of land.  The Supreme Court acknowledged that "possession" does not require continuous occupation - a person may possess land in a manner sufficient to support a claim to title of the land while choosing to use the land intermittently or sporadically.  However, the Supreme Court found that the apparently interchangeable use of the terms "possession" and "occupation" by the judge at first instance did not change the outcome of the case.  The only evidence of "possession" before the judge was "occupation" (no form of possession less than that was posited to the judge).

Read the decision at: Nelson (City) v. Mowatt.

BC Court of Appeal rules surveyor hired by one neighbour didn't owe duty of care to other neighbour

If a surveyor hired by one property owner in a boundary dispute gets it wrong, does the neighbouring owner have a claim in negligence against that surveyor?

In 2002, Owner B purchased a property and was aware that a fence at the back of the property might not align with the actual boundary line.  In 2007, Owners K bought the property directly behind B's property.  The Ks disputed the location of the fence, arguing that it was 12 feet inside their property line.  The Ks had hired a surveyor.  He'd already surveyed the property in 1990 and surveyed it again in 2007.  In both surveys, he found that the fence was 12 feet inside the property line.

In 2008, under cover of darkness, Mr. K tore down the fence.  B immediately commenced an action in trespass against the Ks.  Following a summary trial, the B.C. Supreme Court found that the Ks' surveyor was correct (that the fence was within the Ks property) and dismissed the trespass claim.  However, that decision was overturned on appeal.  A second trial took place and the Supreme Court this time ruled in favour of B.  The Court concluded that the Ks' surveyor was not correct and that the boundary was actually in the location of the fence.  That decision was upheld on appeal.

As is usually the case, B was awarded part of her costs payable by the Ks, leaving her out of pocket the difference between the costs awarded and her actual legal costs.  So B commenced an action against the Ks' surveyor, arguing that his errors resulted in her financial loss.  In response to B's action, the surveyor made an application to strike the claim on the basis that B had no cause of action against the surveyor.  That application was dismissed by the Supreme Court and the case ended up again before the Court of Appeal.

The Court of Appeal reversed the lower court decision and allowed the surveyor's application to strike B's claim on the basis that it failed to disclose a reasonable cause of action.  In summary, the Court wrote: "[B]'s pleading is fundamentally flawed. It fails to advance facts that reveal the necessary relational proximity to establish a duty of care. It does not allege that she had direct dealings with [the surveyor] or relied on his representations. Nor does it set out facts that would reasonably support a conclusion that [the surveyor] inferentially assumed responsibility for her beneficial interests. [B]’s claim must therefore be struck."

To recover damages in a negligence claim, it's not only necessary for the claimant to prove that the defendant (in this case, the surveyor) fell below the required standard of care and was negligent, but the claimant must also show that there was a relationship between the claimant and the defendant that created a "duty of care".  Making a mistake doesn't mean that someone will be liable to everyone in the world for any sort of loss that might somehow result from the mistake.  In this case, B had not hired the surveyor.  The Ks hired the surveyor in the context of an adversarial dispute with B, and the Court found that the surveyor did not assume responsibility for B's interests and did not owe her a duty of care.  

Read the decision at: Burke v. Watson & Barnard (A Firm).

BC Landowner's nuisance claim dismissed - insufficient interference by water from municipal lands

A BC landowner sued his municipality over drainage runoff, seeking both damages and an injunction requiring the municipality to take "immediate and effective action to stop the flow of water onto his property."  In 2002, the municipality approved the development of 68 townhomes by a developer adjacent to and north of the landowner's property.  As a condition of the development, a greenway was granted to the municipality running between the properties (including a gas pipeline right of way and an asphalt walkway).

The landowner alleged that prior to the development, there was a watercourse between one and three feet deep running in the location of the greenway.  The developer was permitted to fill in this watercourse resulting in the loss of the drainage route and periodic flooding on the landowner's property to the south (3.67 acres).

The municipality responded that the surface ponding of water on the landowner's property was a natural and pre-existing feature given the location of the property at the toe of a slope, its proximity to the water table, and the impermeable condition of its soils.  Also, the municipality argued that any additional water flowing onto the landowner's property was so minor in volume that it did not constitute a substantial interference with the landowner's use or enjoyment of his property.

On review of the evidence, the BC Supreme Court was unable to accept the landowner's contention that water was never a problem on his property prior to the development.  The Court found that the landowner exaggerated the extent of the water problems suffered since the development.  Also, the water table underlying his property was high and the soil was "fairly impermeable".

The Court concluded that any water coming onto the landowner's property did not meet the test of a claim in nuisance - that it resulted in a substantial and unreasonable interference with his use or enjoyment of the property or that there was sufficient physical damage to the land.  The landowner's property was a "holding property, awaiting development", and the consequences from increased water were minor.  The landowner did not demonstrate that "the pooling water along the northern boundary of his property has either substantially altered the nature of his property or interfered to a non-trivial or significant extent with the actual use being made of the property."  There was also no basis to find that any substantial adverse alteration of the land had been caused.

The landowner's nuisance claim was dismissed.

Read the decision at: Wood v. Langley (Township).

BC Court rules neighbours liable in nuisance for "water problem" discharges

A recent BC Supreme Court decision begins: "It has been said that water is the driving force of all nature and as such it can be very destructive. ... It is a truism that water follows the path of least resistance and flows down a landscape to find the lowest point.  It has a tendency to descend and flow with great readiness.  These properties of water are abundantly clear in this case which involves a now protracted dispute between neighbours."

Neighbours A alleged that Neighbours R made changes to the R property that resulted in water damage to the A property.  Neighbours A sued in nuisance, negligence and trespass and sought general, aggravated and punitive damages, as well an injunction obligating Neighbours R to remedy the problems.

The most significant change to the R property was the installation of a tile drain (as part of a french drain) ending about 3 feet from the boundary between the A and R properties.  This tile redirected water from the R property to the A property.  Neighbours R also raised the grading of their property by a few feet, which put their property higher than the A property.  Previously, the R property had been lower than the A property at the boundary in question.  The increased water flows (including sludge) that resulted from these changes caused the damages to the A property alleged by the A neighbours.

As a threshold issue, the judge in this case examined the applicability of statutory limitation periods.  Justice Kerr ruled that the two-year limitation period did apply.  However, she also recognized that where there is continuing damage, a new cause of action arises each day (to some extent resetting the limitation period each day for any "fresh damages").  In this particular case, the effect of the limitation period was that Neighbours A could not recover for any damages sustained before November 25, 2007.  The french drain had been installed in 2001, but they did not commence their action until November, 2009.

Justice Kerr concluded that Neighbours R were liable to Neighbours A in nuisance.  Neighbours R had caused "a substantial and unreasonable interference" with their neighbours' use and enjoyment of the A property.  And Neighbours R were not saved by any riparian rights.  The evidence showed that the water problems resulted from groundwater rather than surface water and that the flow of water between the properties was not by way of a natural watercourse.  Neighbours R could not say that they were not causing a nuisance for having allowed surface water to flow naturally across their land to the A property.  Even if they were dealing with surface water, Justice Kerr found that the flow was the result of the significant changes made to the R property.

She awarded to Neighbours A the sum of $10,000 in non-pecuniary general damages for loss of use and enjoyment of the A property and the sum of $27,908.66 in pecuniary general damages for the cost of remediating the A property.

Read the decision at: Allison v. Radtke.

BC Appeal Court overturns decision that awarded farm to former worker

In a post from August, 2013 called "Equity ensures farm goes to intended beneficiary after codicil failed", I wrote about a decision of the British Columbia Supreme Court that granted ownership of a farm to a long-time farm worker on the basis of alleged promises made during the lifetimes of the farm owners.   The farm worker said that the owners, Kim and Dietrich, had assured him that the farm would go to him more or less in recognition of his uncompensated work on the farm.  Although their 1998 mutual wills left the farm to someone else, Kim and Dietrich had prepared handwritten codicils that would have left the farm to the worker.  However, with only one witness, the codicils were invalid.  Dietrich died in 2006.  When Kim died in 2011, the worker sued the estate for an equitable interest in the farm (which had been left to another beneficiary).  The trial judge concluded that the worker had made out his claim based on proprietary estoppel (i.e. you promised me and now you can't say that you didn't) and that equity required that the farm go to him.

This decision has now been overturned on appeal.  While the BC Court of Appeal concluded that the farm worker was assured and genuinely believed he would inherit the farm, the Court also found that his detrimental reliance on the assurance was far less than that assessed by the trial judge.  The award of ownership of the farm was far out of proportion to the detriment the worker actually suffered and, in all the circumstances, would not do justice between the parties (as equity is intended to do).

As the Court stated, "detriment forms the backbone of a claim of proprietary estoppel because it is detriment that gives rise to the unfairness which requires equity to intervene."  Reliance is not always detrimental, and it is necessary for the Court to look "at both the overall benefits gained and losses suffered by the claimant."  The Court in this case found that the worker did not suffer from choosing to work at a small accounting firm close to the farm, one of his alleged grounds of detrimental reliance.

But the Court was not able to say definitively that the worker's uncompensated efforts at the farm hadn't given rise to the need for equitable relief.  Therefore, the Court of Appeal set aside the trial judge's decision and sent the case back to the trial judge to assess claims of unjust enrichment and express or implied trust, as well as the issue of proportionality as it related to the claim of proprietary estoppel.

It should be noted that one of the three appellate justices would have dismissed the appeal, finding that it could not be said that the trial judge had improperly exercised his discretion in awarding the farm to the worker.

Read the decision at: Sabey v. Rommel.

BC Rancher conviction for shooting neighbour's dog set aside; new trial ordered

In June, 2011, a BC rancher shot and killed her neighbour's dog.  She was later charged under Section 445(1) of the Criminal Code.  At trial, the rancher claimed the dog had attacked her cattle and relied upon Section 11.1(2) of BC's Livestock Act (a person may kill a dog if the dog is running at large and attacking or viciously pursuing livestock) and Section 39 of the Criminal Code (protection of personal property, this section has since been rolled into section 35) as legal justifications for her actions.  The Provincial Court judge rejected those defences and convicted her.  The rancher appealed the conviction to the BC Supreme Court.

At trial, counsel agreed that the burden rested with the Crown to prove that the defence under Section 11.1(2) of the Livestock Act (the other defence was not pursued) did not apply.  The trial judge identified the significant issue to be whether the dog that the rancher killed was "attacking or viciously pursuing livestock", and found that there was "no merit to the argument" that this was the case. 

However, the appeal court found that the trial judge had misapprehended the evidence at trial.  He had failed to consider a written statement of the rancher that had been tendered as evidence that included evidence that the dog had been "attacking or viciously pursuing" the cattle - there was evidence of biting and attacking.  Instead, the trial judge found that there was no evidence on this point, which in the view of the appeal court constituted a misapprehension of evidence.

The appeal court also found that the trial judge had erred in his application of the law.  On appeal, the rancher raised three defences: 1) the Livestock Act defence; 2) common law justification of defence of property; and, 3) defence of colour of right.  Although the second two defences were not raised at trial, the Crown did not object to those defences being raised on appeal.  The appeal court found that the matter must be sent back for a new trial in which the Court would consider evidence related to all three defences. 

With respect to Section 11.1(2) of the Livestock Act in particular, the appeal court gave the following interpretation of the defence: "Rather, a fair and liberal construction, consistent with the common law, the overall object of the [Act], and the intention of the legislature is required.  To my mind, s. 11.1(2) of the [Act] should [be] construed in the same manner as the common law as permitting any person to kill a dog when at the time of the act of killing, the dog: a. is running at large; and, b. is actually attacking or viciously pursuing livestock, or, if left running at large, would subject the livestock to a real and imminent danger that the attack or vicious pursuit would be renewed."  The act of killing a dog would be prohibited once the need for protection of the livestock has ended.

Read the decision at: R. v. Robinson.

BC Court: Aborted sale should have proceeded - vendor did not conceal property's propensity to flood

The purchaser of a 60-year-old residential property (Lot A) on Salt Spring Island in BC chose not to complete the purchase on the closing date because of alleged latent defects.  The purchaser alleged that a dam or berm constructed on a neighbouring property encroached on Lot A and also caused Lot A to flood.  He took the position that the dam and the flooding were latent defects not discoverable on reasonable inspection and that the vendor of Lot A knew about the dam and earlier flooding and should have disclosed them to the purchaser.

The purchaser did discover the presence of the dam shortly before the closing date.  The vendor's efforts to satisfy him that the property had no flooding problems were unsuccesful.  So the transaction did not close and the vendor sued the purchaser for loss of value (Lot A was ultimately sold to another purchaser at a lower price) and other losses including loss of rent and interest.

The BC Supreme Court found that the vendor did not fail to disclose a latent defect (i.e. a propensity to flood).  As stated by the Court: "The doctrine of caveat emptor applies in real estate transactions with respect to defects that are discoverable on reasonable inspection.  A vendor does not have to disclose patent defects; rather, a vendor must only disclose latent defects."  On the evidence before it, the Court found that there was only one relevant flooding event and that was caused by vandalism combined with poorly maintained highway ditches - not by the dam encroachment.  This was not a latent defect known to the vendor.

Also, the sale contract provided for an inspection to confirm property boundaries, which would have revealed the actual boundaries and whether there were any encroachments (i.e. the dam).  However, the purchaser did not complete an inspection.  If there was an encroachment, the Court found that it could have been identified by reasonable observation (i.e. a patent defect).  Moreover, the encroachment that did exist was a minor one and in no way rendered the residential premises unfit for habitation.

The purchaser was bound to close the transaction and, as a result of his failure to do so, was found liable to pay damages including the decrease in the sale price obtained by the vendor and various carrying costs incurred when the property had to be offered for sale again.

Read the decision at: Ganges Kangro Properties Ltd. v. Shepard.

BC Horse Farm case sent back to Farm Industry Review Board - original decision was unreasonable

In 2009, PH constructed a new barn on her farm property in Kelowna, BC to accommodate an equestrian business.  Her neighbours to the south brought a claim before the Farm Industry Review Board claiming that they were suffering from the effects of noise, lights, flies and odour from the farm.  In March, 2013, the Board found that a section of the horse farm and equestrian centre was not a normal farm practice - turning out horses within 15 metres of the southerly property line was deemed not a normal farm practice based on the City of Kelowna's zoning by-law and the Ministry of Agriculture's Farm Practice Review Guide.

 

The Board dismissed the noise and light complaints and determined that the farm's manure management practices were normal farm practice.  However, the Board accepted the complaint concerning the location of "livestock area B", which was not set back from the southerly property line.  The Board ordered that the area be shifted at least 15 metres from the boundary.

 

PH appealed and, on judicial review, the BC Supreme Court found that the Board's decision was unreasonable; the matter was remitted to the Board for a re-hearing.

 

The Court found that the Board, on the whole, failed to consider evidence pertaining to similar farm businesses in similar circumstances.  The Board's decision was not justified or transparent and reasonable because of that.  The Court wrote:

Although it is important to conduct an evaluative function that addresses the "good neighbour" principle, etc., the BC legislature chose clear and specific features of normal farm practices, including "accepted", "established", and "followed" practices.  This language is a clear and specific direction from the legislature that instructs the [Board] that it can supplement but not substitute certain evidence - e.g. provincial guidelines or the "good neighbour" principle - in place of evidence that demonstrates "proper and accepted customs and standards as established and followed by similar farm businesses under similar circumstances".  Indeed, the [normal farm practices legislation] circumscribes the evidence the [Board] must consider in making its final determination of normal farm practice.

and,

The legislature was clear when it defined the normal farm practice as a practice consistent with "proper and accepted customs and standards as established and followed by similar farm businesses under similar circumstances"; the [Board] was required to determine whether practices and by laws comport with those established practices.

Read the decision at: Holt v. Farm Industry Review Board.

BC Court of Appeal says club can continue to fly model aircraft on farmland runway

A radio control club used an agricultural property to fly model aircraft.  The local municipality challenged this use as being outside the scope of permitted agricultural uses.  The club argued that its activites fell within a permissible secondary use - "unpaved airstrip and heli pad".  The municipality argued that all uses in the agricultural zone must be agricultural or complimentary to agriculture; the RC flying satisfied neither category.  A motions judge agreed with the municipality.

The case went to the BC Court of Appeal and the motions judge's decision was reversed.  The restriction of "farm" classification in the zoning by-law to activities directly associated with agriculture was unjustifiable.  The Court ruled that the "farm" classification allows complementary uses that are suitable in an agricultural setting, including activities not directly associated with farming but conducive to the setting.  These activities do not disrupt or change the essential agricultural character of the land.  Because the RC club's activities were of this class, they were permissible secondary uses of the farm land.

Read the decision at: Lake Country (District) v. Kelowna Ogopogo Radio Controllers Association.

BC Supreme Court rules on dispute between municipality and pipeline company over upgrade costs

The City of Surrey planned to expand the Fraser Highway.  The expansion would necessitate the upgrade of a pipeline owned and operated by FortisBC Energy Inc. (formerly Terasen), and Fortis commenced an action against Surrey in respect of the allocation of cost for the upgrade.  Fortis claimed that it had been assigned rights originally held by the British Columbia Electric Company under a Trunk Line Agreement from 1956.  Under that agreement, Fortas argued, the costs of the pipeline upgrade work were to be allocated by agreement between the parties or, failing agreement, were to be determined by arbitration.

In the alternative, Fortis sought a declaration that the highway project constituted a de facto expropriation of its statutory right-of-way along with directions that would require Surrey to proceed with the expropriation in accordance with applicable legislation.   Finally, in the further alternative, Fortis claimed compensation for the costs it had incurred already to protect its pipeline and to accommodate Surrey's highway project on the basis of quantum meruit or unjust enrichment.

Surrey disputed the validity and the application of the Trunk Line Agreement, saying that it had been superseded by legislation that requires Fortis to pay the full cost of the upgrade work.  In any event, Surrey alleged that Fortis had fundamentally breached and repudiated the Agreement.  Surrey counterclaimed against Fortis including claims for negligence, nuisance, negligent misrepresentation, breach of fiduciary duty and breach of contract.

In reviewing the Trunk Line Agreement, the BC Supreme Court found that provincial pipeline legislation enacted in 1955 was not intended to prohibit, supersede or override agreements such as the Trunk Line Agreement.  The Court then reviewed regulations made pursuant to the legislation and again found that the Agreement was neither superseded nor rendered illegal by the regulations.  However, the Court found that Fortis had repudiated the Agreement by refusing to consent to the dedication of the statutory right-of-way lands at the highway "unless Surrey either agreed to create a fee simple lot over the portion of the highway crossing the Pipeline, were paid all of the cost of the Pipeline upgrade work".  This deprived Surrey of substantially the whole of the commercial benefit of the Trunk Line Agreement and constituted a breach which went to the root of that contract.  The Court found that Fortis repudiated the Agreement, that Surrey accepted the repudiation, and that the agreement was terminated and ceased to bind the parties.

In the absence of the Agreement, the allocation of costs was determined by the Pipeline Regulation.  The Regulation provided that costs must be shared equally by a municipality and a pipeline company where a new highway is built within a municipality by the municipality on an existing right-of-way or on a newly dedicated right-of-way.  The Court found that the application of the Regulation to the pipeline upgrade work did not constitute a de facto expropriation because it would not "constitute a taking of virtually all of the rights of Terasen Gas with respect to the SRW or Pipeline".

Read the decision at: FortisBC Energy Inc. v. Surrey (City).

Lack of an "honest belief": BC Court orders neighbours to remove encroaching barn and shed

One neighbour (G) has a barn and a shed that protrude onto another neighbour's (N's) property.  The barn is used for stabling horses and the shed is used for storage and has an attached chicken coop.  The situation ended up in BC Supreme Court where N proposed two options: 1) shared use of the barn and the shed; or, failing that, 2) an order for removal of the encroaching structures within 6 months.  According to the Court, each neighbour accused the other of being unreasonable and uncompromising about the encroachments.

G sought an order that there is an easement permitting the encroachments.  Although G knew about the encroachment before purchasing the property, G suggested that reliance had been placed on the representations made by the previous owner of N's property when G dealt with the barn and shed (choosing to maintain and improve the buildings, rather than remove them).   The Court ruled that G would not obtain an easement, largely on the basis that G did not have an "honest belief" about having the easement in the first place:

G purchased their property knowing specifically that the barn and shed and surrounding land encroached on their neighbour’s property. They now seek to obtain by court order what they did not bargain for in the first place. In essence, the G position is that the simplest and easiest solution from their point of view is for the court to grant them an easement over the N property or to allow them to buy the encroaching area, for modest compensation.

The Court ordered that the barn and shed encroachments, including buildings and fencing, be removed from N's property within 9 months.  The Court declined to order that half of the cost of doing so be borne by N, finding no reason to do so. 

Read the decision at: Gueldner v. Nichele.

Equity ensures farm goes to intended beneficiary after codicil failed

This was an estate case involving a horse farm.  The farm had been owned jointly by Mr. and Mrs. von Hopffgarten before the husband died in 2006.  In 2011, Mrs. von Hopffgarten died - her will said she left the farm to a Ms. Rommel.  However, the von Hopffgartens had for a long time taken a man named Jesse Sabey under their wings and intended to leave the farm to him.  They both executed codicils to their wills (changing the beneficiary from Ms. Rommel to Mr. Sabey), but the codicils were invalid under the Wills Act, R.S.B.C. 1996, c. 489 because they were witnessed by only one person.

Sabey commenced an action the B.C. Supreme Court to claim ownership of the farm based on proprietary estoppel - statements made to him by the von Hopffgartens.  Alternatively, he made claims based on unjust enrichment and trust.  He alleged that he had worked extensively on the farm, with less remuneration than other workers, with the promise that he would someday take over the farm.  Interestingly, Sabey was not aware of the codicils that the von Hopffgartens had attempted to make (and, therefore, the codicils couldn't assist in making the case of proprietary estoppel). 

The Court accepted Mr. Sabey's evidence; no one challenged his credibility about the statements made to him.  The Court concluded that he had made out the case for proprietary estoppel and that "equity must be satisfied" by granting Mr. Sabey the farm. 

Read the decision at: Sabey v. Beardsley.

BC Court of Appeal allows landowner appeal in breach of easement agreement case

I last wrote about this case in 2010: Utzig #2 decision.  As I explained in that post, the litigation concerns whether a pipeline owned and operated by the plaintiff Terasen Gas Inc. (“Terasen”) that runs through a portion of Burns Bog in Delta, B.C. was damaged or put at risk by landfill operations on lands owned by the defendant Utzig Holdings (B.C.) Ltd. (“Utzig”). The landfill operations were conducted, with Utzig’s permission, by the other defendants Alpha Manufacturing Inc., Burns Developments Ltd. and Burns Developments (1993) Ltd. (“Alpha” and “Burns”).

The BC Court of Appeal has now released a decision limiting the scope of the breach of covenants finding made by the lower court and dismissing in its entirely the claim in nuisance against the landowner. 

The covenants by the "owner" to the "utility" read as follows: "Not to do or knowingly permit to be done any act or thing which might, in the opinion of [the utility], interfere with or injure the works or any part thereof" (1961 ROW agreements) and "Not to do or knowingly permit to be done any act or thing which might, in the reasonable opinion of [the utility], in any way whatsoever interfere with or injure or endanger the works or any part thereof or impair the operating efficiency thereof or create or increase any hazard to persons." (1981 instrument)

For the landowner Utzig, the issue was whether it had, at all material times or some material times, permitted other parties to endanger the pipeline.  A key date was October 10, 1993, when Utzig entered into an Agreement for Sale of the property, which was never registered on title to the property.   The purchase price of $4 million was to be paid in instalments by October 18, 1995.  Terasen went to Court to seek injunctive relief prior to October, 1995, and the sale was never completed because the purchaser failed to pay the entire purchase privce when due.  For this reason, Utzig remained the registered owner of the property at all material times.

Madam Justice Newbury ruled (on behalf of 2 of the 3 judges on the panel) that the breach of the covenant not to permit only lasted up to the October 10, 1993 date:

In the result, I agree with the trial judge that up to October 10, 1993, Utzig retained sufficient authority over the subject property that it should be regarded as having “permitted” Alpha to do acts that might have interfered with or injured the pipeline. This constituted a breach of covenant. If in fact the works were so affected in this period, damages may be found to be payable in the second stage of this litigation. In respect of the post-AFS period, however, I would allow Utzig’s appeal on the ground that having sold the property under the AFS, it was no longer in a position to “permit”, or withhold permission for, Alpha’s activities. This result, in my view, accords with the reality that once land has been sold, it is for the new owner to be responsible for new breaches of the terms of instruments (such as rights of way or restrictive covenants) that are registered against the land. If it were otherwise, vendors would be obliged to obtain covenants from their purchasers repeating the covenants in such instruments, and one of the primary advantages of the Torrens registration system would be lost.

The last issue decided on the appeal related to Terasen's claim for nuisance - that Utzig was responsible for the landfill activities conducted on its land with its consent and that such activities substantially interfered with Terasen's use of its rights of way.  This claim related to the pre-October 10, 1993 period.  Utzig submitted that the threshold of “unreasonable interference” was not met in this case, given the lack of evidence of any “significant movement” of the pipeline until late 1994 and the fact the pipe was never “injured” physically.  The Court of Appeal ruled that, in the absence of clear evidence of substantial interference, the trial judge's finding of nuisance could not stand.

Read the decision at: Terasen Gas Inc. v. Utzig Holdings.

Is clearing of trees a normal farm practice?

The Supreme Court of British Columbia is going to be dealing with the question of whether a farmer can be restrained from clearing trees on his property in spite of normal farm practices legislation.  A B.C. farmer purchased a Nanaimo property in 2006.  In December, 2005, the Regional District of Nanaimo had registered against title to the property a restrictive covenant that prohibits the removal of any vegetation from a 30 metre wide strip along the boundary of the property with an adjacent road.  After the farmer began to clear trees, Nanaimo sued under the restrictive covenant, and also applied for a pre-trial injunction to prohibit any further clearing.

The Supreme Court granted the injunction as requested.  In the course of deciding the injunction application, the Court examined the defences put forward in the action by the farmer.  The main defence appears to be that the farmer has not breached the covenant since it is invalid by reason of non-compliance with the Agricultural Land Commission Act, s. 22(2) and the Farm Practices Protection (Right to Farm) Act, s. 2(1).  The farmer claims that his clearing activities were farm operations.

We will have to wait and see what the Supreme Court makes of this argument and what implications its decision may have on similar situations in the future.

Read the decision at: Regional District of Nanaimo v. Buck.

Strange case: Province sells land by accident and needs it back

A decision on costs from the B.C. Supreme Court reveals a strange situation in which the B.C. Finance Transportation Financing Authority sold land to a private landowner and then realized afterward that it needed the land.  The Authority sold a portion of a closed road to Robert and Sherry Long, who owned the property adjacent to the road.  There were hydro poles with hydro and telephone lines on the closed road lands.

Due to an oversight by the Authority, a right of way was not reserved on title to the closed road for the poles and the lines.  The Longs acquired clear title to the land.  Once it had discovered the mistake, the Authority asked the Court to rescind the sale agreement so that it could preserve a right of way for the poles and lines.  When the intention of the Authority became clear, the Longs decided that they were no longer interested in keeping the property and wished to be compensated for their costs.  The Court made the recission order and awarded costs to the Longs.

Read the decision at: BC Finance Transportation Financing Authority v. Long.

B.C. MLA challenges NEB on changes to its Strategic Plan

Gary Coons, the MLA for North Coast in British Columbia, has sent a letter to the National Energy Board (NEB) expressing his concerns about changes to the NEB's Strategic Plan language.  He notes a number of significant changes, including the replacement of the NEB's mission statement.  Previously, the NEB sought to "promote safety, security, environmental protection and efficient energy infrastructure and markets in the Canadian public interest".  The NEB now says that "WE REGULATE PIPELINES, ENERGY DEVELOPMENT AND TRADE IN THE CANADIAN PUBLIC INTEREST".  Coons asks whether this change signifies that safety, security and environmental proteciton are no longer within the NEB's mandate.  Coons also notes that the Board has removed the language referring to the "responsible development" of the energy industry.  He says that these changes are of particular concern in the context of the ongoing Enbridge Northern Gateway Project application and in the context of growing public concern about the influence of "big oil" interests on government.

B.C. Appeal Court rules injurious affection class action can proceed

The B.C. Court of Appeal is allowing a class action to proceed over claims of loss suffered as a result of the construction of the Canada Line rapid transit system which connects Vancouver with Richmond and the Vancouver International Airport.  The lawsuit was certified by the B.C. Supreme Court, a decision that was appealed by the Defendant, Canada Line.  In another similar case, the Court of Appeal found that a nuisance claim raised by businesses along the Canada Line related to construction was defeated by the defence of statutory authority (i.e. the authority building the line could not be liable for causing nuisance on account of its legal authority to carry out the project).  In its most recent decision, the Court of Appeal found that the ruling in the earlier case was not conclusive of the issues raised in the appeal now before it.

The construction of the Canada Line rapid transit system took place between 2005 and 2009. The construction commenced at the south end of Cambie Street and proceeded north in a manner referred to as a “construction train”.   The method of construction was “cut and cover” which involved the excavation of a trench from south to north Cambie, the installation of a tunnel in the trench, the backfilling of the trench, and the restoration of the street surface.  The construction train proceeded through Cambie Village.   The claimants in the class action (respondents on the appeal) have submitted that this disruption gives rise to several claims: nuisance, waiver of tort, and injurious affection.  The class is comprised of approximately 62 individuals or companies who own properties in the Cambie Village and approximately 215 individuals or companies who operate a business from leased premises in the Village.

The Court of Appeal upheld the lower court's decision to certify the class action for a hearing of the following common issues: whether the construction caused an actionable nuisance; whether the nuisance is excused by statutory authority for the work; waiver of tort as a basis for nuisance damages; and, if it is found that a nuisance was caused but is excused by statutory authority, whether there is a claim for injurious affection. 

Read the decision at: Gautam v. Canada Line Rapid Transit Inc.

Pipeline landowner who sold land for highway not in breach of Statutory Right-of-Way

Terasen Gas Inc. (now FortisBC Energy Inc.) has lost its attempt to draw one of its pipeline landowners into a legal battle with the City of Surrey.  The dispute between Terasen and Surrey relates to Surrey's project to widen a portion of the Fraser Highway.  The highway crosses a Terasen high-pressure gas pipeline, which will require upgrades to permit the widening. 

Terasen expects to be on the hook for at least part of the cost of the upgrades, but contends that the City of Surrey should be responsible.  In addition, as part of an ongoing court case, Terasen claimed damages from Angus Properties Ltd.  Terasen says that Angus, which agreed to sell certain lands to Surrey for the road widening project, breached the terms of the 1957 Statutory Right-of-Way ("SRW") that applied to the lands in favour of Terasen:

In its Amended Statement of Claim filed March 30, 2010, Terasen alleges that Angus was aware of, consented to and cooperated in Surrey’s conduct of the highway project on the Additional Lands, and that Angus was aware of Terasen’s position that the project would interfere with the safe and efficient operation of the pipeline. It says that Angus nevertheless entered into the Purchase Agreement and granted Surrey a licence to enter the Additional Lands to prepare the site, in breach of the SRW. It claims that Angus breached the SRW by permitting Surrey to proceed with the highway project. It says that Terasen has suffered damage as a result, including the pipeline upgrade costs.

Angus brought a motion for summary judgment to strike out Terasen's claim against it.  The Court allowed the motion, finding:

Terasen says that Angus breached the SRW simply by entering into the Purchase Agreement with Surrey, since that agreement removed Angus’s ability to prevent Surrey from doing work on the Additional Lands which would endanger the integrity of the pipeline.
Counsel for Terasen placed some reliance on Terasen v. Utzig, a case with very different circumstances from those here. Angus agreed to sell the Additional Lands to Surrey and to facilitate Surrey’s highway widening project by permitting it to enter the lands for preliminary preparatory work prior to transfer. It did not agree to permit, and there is no evidence that it ever permitted, activities that would reasonably be seen to endanger the pipeline. In contrast, that is what the defendant in Terasen v. Utzig was found to have done.

I agree with counsel for Angus that Terasen v. Utzig, and the other cases upon which Terasen relies, are distinguishable.

I further agree that, as a general proposition, it cannot be the case that the owner of land breaches a statutory right of way simply by granting an interest in the land to another party, unless the terms of the particular statutory right of way so prohibit. The SRW here does not prohibit sale or other transfer of interests in the land. [emphasis added]

I find that Angus did not breach the SRW by entering into the Purchase Agreement.

Did Angus breach the SRW by permitting Surrey to perform its work on the Additional Lands? Angus had granted Surrey a licence to “access, use and enter” the Additional Lands to facilitate “preliminary site preparation, pre-engineering and highway construction” and to “perform such tests as the City deems appropriate, including soil tests”. However, no work was done on the Additional Lands in connection with the highway widening project, by Surrey or any other party, until after the Consent Order of June 30, 2008 had been made. The work was done only after Terasen had prepared the pipeline so that it would not be endangered, and had given permission, in the Consent Order, for Surrey to proceed with the preloading.

Thus, when Surrey actually came onto the Additional Lands and performed the work, it was with Terasen’s consent and it was in circumstances in which the integrity of the pipeline was not endangered. Angus’s failure to prevent Surrey from doing the work, in these circumstances, did not in itself constitute a breach of the SRW.

I find that Angus did not breach the terms of the SRW either by entering into the Purchase Agreement or by failing to prevent Surrey from performing the work on the Additional Lands.

The Court found nothing wrong with Angus' agreement to sell its land to Surrey.  Implied in the Court's ruling, however, is that Angus may have been in breach of the SRW by allowing the preliminary work for the road widening to take place on its lands.  But for the consent for that work already granted to Surrey by Terasen, it is possible that the Court would not have granted the summary judgment motion, leaving the issue of whether or not Angus breached the SRW by allowing for the endangerment of the pipeline to be decided at trial.  That said, the Court found in any event that the damages sought by Terasen were not recoverable in any event because they did not "flow naturally from the breach" of contract alleged by Terasen:

The damages sought by Terasen do not flow naturally from the breach it alleges (Angus’s entering into the Purchase Agreement and removing its own ability to prevent Surrey from doing work on the Additional Lands). If Terasen in the end is found responsible for the costs of the pipeline upgrade, or for more of those costs than Terasen thinks it should bear, that will be a result of the legal framework governing pipeline operators and municipalities, and of the legal relationship between Terasen and Surrey, and not a result of Angus’s entering into the Purchase Agreement.

Read the decision at: Terasen Gas Inc. v. Surrey (City).

B.C. Tribunal rules propane cannons a "normal farm practice" for blueberry grower

The British Columbia Farm Industry Review Board has declined a request to order a Langley, B.C. blueberry operation to cease its use of two propane cannons on the farm.  The cannons are used to manage bird predation.  A neighbour of the operation complained about the continuous firing of the timer-activated cannons, at one time daily between 6:30 a.m. and noon and from 3 p.m. to 8 p.m.  The Board found that the farm used the cannons in accordance with the 2009 "Ministry Guidelines for the use of Audible Bird Scare Devices for South Coastal BC" and, therefore, such use constituted a protected "normal farm practice".

Read the decision at: Mitchell v. Bhullar Farm Produce.

B.C. landowners lose bid for judicial review of Mediation and Arbitration Board decision

The B.C. Supreme Court has refused a request for judicial review by landowners Kenneth and Loretta Vause of a decision of the Mediation and Arbitration Board (now the Surface Rights Board).  The Board had made various orders regarding flow lines to be constructed by Spectra Energy Midstream Corporation.  During the course of proceedings before a mediator and then an arbitrator pursuant to the Petroleum and Natural Gas Act, the landowners and Spectra had come to an agreement over the proposed routing for the lines.  However, the revised routing would require the inclusion of an additional parcel of land owned by the Vauses. 

The Board eventually made an order permitting the flow lines using the agreed revised route and awarding compensation to the landowners.  The landowners made several attempts to challenge the Board's decision, all of which were dismissed by the Board and by the B.C. Supreme Court.  In a decision released this week, the Supreme Court again declined a request by the landowners for judicial review, this time on the basis that the earlier decisions of the Board could not affect the additional parcel of land because it was not named in the style of case (the case's name).  In other words, they argued that the Board was without jurisdiction to add that parcel of land to the order because it did not form part of the original application by Spectra.

Read the decision at: Vause v. British Columbia (Mediation and Arbitration Board).