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 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.

"Shared water does not necessarily make good neighbours" Part 2 - The Appeal

In September, 2013, I wrote about a case involving the post-purchase discovery of an underground waterline on a farm.  The purchaser of a 97-acre hobby farm did not know that the vendor, who retained a three-acre parcel next to the farm where he had built his retirement home, continued to receive water from a spring on the 97-acre farm through an underground line that also supplied other neighbours.  Rather than disclosing the existence of the line and his expectation that he would continue to receive the water supply, the vendor provided a statutory declaration on the date of closing stating that he was "not aware of any person or persons ... having any claim or interest in the said lands or any part thereof adverse to or inconsistent with [his] title and that [he was] positive that none such exists."

After the waterline was discovered, the matter ended up in court and the trial judge declared that there was no prescriptive easement for the line and that the vendor was not entitled to an injunction to prevent the new purchaser from taking steps to interfere with the quality or quantity of the water supply.  The judge also found that the waterline constituted a "latent defect" and that the vendor was liable for negligent misrepresentation.  He awarded the purchaser $25,500 in damages along with nearly $115,000 in costs.

The vendor appealed the decision of the trial judge on negligent misrepresentation and damages to the Court of Appeal.  The Court of Appeal agreed with the trial judge's finding that the vendor had a duty of care not to make false statements to the purchaser, which arose "specifically from respondent's foreseeable and reasonable reliance on the appellant's representations contained in the statutory declaration."  And, since the vendor himself was a person with an alleged continuing interest in the land being purchased by the purchaser, he "knew, or, at the very least, ought to have known, that his representation to the contrary, in a statutory declaration executed under oath, was false."

The appeal was dismissed with costs to the purchaser in the amount of $22,000.

Read the appeal decision at: Hanisch v. McKean.

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.

Court of Appeal reverses ATV decision - ATVs for farming are not self-propelled implements of husbandry

About a year ago, I posted about an Ontario Superior Court decision that found that an ATV was a "self-propelled implement of husbandry" for the purposes of the Insurance Act.  A farmer was involved in an accident on the road while he was driving an uninsured ATV; the Court found that he was not barred from recovering damages for his injuries by the legislation that says no recovery is permitted where the person was operating an uninsured motor vehicle on a highway.  Self-propelled implements of husbandry are not considered motor vehicles.

The Ontario Court of Appeal has overturned this decision.  It found that the "motion judge correctly identified the purpose of the legislation before him but then adopted an interpretation that failed to give effect to that purpose.  He considered matters that were not pertinent to the excercise of statutory interpretation: whether the regulatory definitions were out of date, the views of the farming community, and the fact that Mr. Matheson was not at fault in the accident.  Consequently, he lost sight of the goal of determining the intent of the legislature."

The Court ruled that, " it was beyond the competence of the motion judge to conclude that Mr. Matheson’s ATV was a self-propelled implement of husbandry based on his opinion that the regulatory regime has not kept pace with changes in society, that ATVs need to be responded to appropriately by our laws, and that they need to be recognized as self-propelled implements of husbandry."  The applicable legislation, including the Off Road Vehicles Act, makes it clear that ATVs cannot be driven on land not occupied by the owner of the vehicle unless it is insured under a motor vehicle policy in accordance with the Insurance Act.  The Court commented that the Regulations "could not make clearer the legislative intent that a Honda ATV model TRX 200 is an off-road vehicle and not a self-propelled implement of husbandry."

Keep this in mind - "The issue is not whether farmers can operate ATVs used in agriculture on highways, but whether they can do so without insurance."  The answer is that they cannot operate ATVs on highways without insurance, at least not without being barred from recovery of damages for injury or death.

Read the decision at: Matheson v. Lewis.

Gas supply easement binds any severed parcels

The Alberta Court of Appeal rejected an application for leave to appeal from a decision that found that a gas supply easement continued to apply after a lot was severed into three parts (creating two new lots).  The owners of the original parcel applied to the Alberta Utilities Commission for an order directing the Evergreen Gas Co-op to discharge its easement from the newly subdivided lots.  The Commission refused, and the owners sought leave to appeal the decision to the Court of Appeal.

The Court of Appeal confirmed that the easement, which was a general easement that applied to the entire original property (rather than a limited easement or ROW over a particular portion of the property), would continue to apply to any subdivided parts of the property.  The Court rejected the argument by the owners that the imposition of the easement on the new parcels was nevertheless "improper" within the meaning of the Gas Distribution Act.  The Court also rejected the argument that the easement "agreement" (the easement was created when the owners agreed to receive gas service from the Co-op, the terms of the contract being statutorily set) was "unconscionable" - how could the contract be unconscionable when the owners had applied for gas service and the terms of the contract were imposed by statute?

Read the decision at: Andre v Evergreen Gas Co-op Ltd.

Sask Court of Appeal orders solicitor-client costs for landowner wrongfully expropriated

The appellant succeeded in obtaining an order in the Court of Queen’s Bench quashing a municipal bylaw expropriating a portion of his farm land. In consequence, he asked the Chambers judge to order the municipality to pay him the costs he had incurred in having the bylaw set aside. His solicitor-client costs, he said, amounted to $64,498.92. The Chambers judge declined to award him costs on a solicitor-client basis and instead, awarded him the fixed sum of $3,000 payable by the municipality. He then brought an appeal to the Court of Appeal for Saskatchewan.

Saskatchewan courts had already confirmed that it is within the discretion of the Chambers judge to award solicitor-client costs in the context of expropriation and related matters.  The Court of Appeal in this decision noted that, while there was no authority for the proposition that solicitor-client costs must be awarded in expropriation cases, "there is, however, a substantial body of literature suggesting, as a matter of fairness, that persons whose private land has been taken from them by means not of agreement but of compulsory expropriation should generally be able to recover their reasonable legal and other costs, responsibly incurred, in responding to the expropriation."

The Court of Appeal remitted the matter back to the Chambers judge to assess the landowner's reasonable solicitor-client costs, concluding: "The appellant’s land was taken from him through no fault on his part pursuant to a process in which he had no input. As it turns out, the land was unlawfully expropriated, yet the appellant had to go to court at his expense to establish the wrongdoing and recover his land. As in Sask Water, equity cries out that the appellant should get some relief."

Read the decision at: Goodtrack v The Rural Municipality of Waverley No 44.

Is the pipeline provincial or inter-provincial?

Every so often, the question of whether a pipeline is subject to provincial regulation or to federal regulation (by the NEB) comes before the courts.  The issue is now before the courts in Manitoba according to a recent decision of the Manitoba Court of Appeal.  A number of landowners affected by a proposed pipeline filed applications for leave to appeal a decision of the Surface Rights Board of Manitoba to the Court of Appeal.  They then brought a motion seeking to adjourn the leave to appeal applications pending a decision of the Manitoba Court of Queen's Bench regarding a judicial review of the decsion by Mantioba's Minister of Innovation, Energy and Mines (the "Minister") to grant a permit to EOG Resources Canada Inc. (EOG) to construct the pipeline.

The intended purpose of the pipeline, which would cross through the landowners' properties, is to link up to another proposed pipeline that would cross the Manitoba-Saskatchewan border (the "MIPL Pipeline").  The MIPL pipeline project requires approval from the NEB as it is an interprovincial (federal) pipeline.

EOG maintains that, although its pipeline would connect directly to the interprovincial MIPL Pipeline, its pipeline is intended to be wholly within the province of Manitoba.  Therefore, the EOG pipeline would be subject to provincial approval, as was granted by the Minister.  The landowners contest the jurisdiction of the Minister and brought an application for judicial review of the Minister's decision to approve the pipeline on constitutional grounds.

EOG opposed the adjournment of the leave to appeal applications, asserting that a delay would cause it prejudice.  The Court disagreed.  It found that it was not a practical use of judicial resources to have two cases ongoing with respect to the same issues.  It also reasoned that the Court of Queen's Bench proceeding may result in additional evidence necessary to determine the constitutional issue (i.e. the jursidiction of the proposed pipeline).  The Court of Appeal found that these reasons outweighed any potential prejudice to EOG.

Read the decision at: EOG Resources Canada Inc. v. Saskitoba.

Ontario Court of Appeal overturns $36 million Inco class action damages award

In July, 2010, I posted about a $36 million award of damages made in favour of residential property owners in the City of Port Colborne.  The owners had sued Inco in a class action over property value losses related to soil contamination.  Now, on appeal from the decision of the trial judge, the Ontario Court of Appeal has overturned the award.  The Court allowed the appeal, ordered that Inco be paid $100,000 for the costs of the appeal, and has asked for submissions on the costs of the trial. 

The issues on appeal were:

 i.                   Did the trial judge err in holding that the discharge of the nickel particles by Inco on to the property of the class members constituted an actionable nuisance?

 ii.                 Did the trial judge err in holding that Inco was liable for the discharge of the nickel particles under the rule established in Rylands v. Fletcher?

iii.            Did the trial judge err in holding that the claimants had established a diminution in value of their properties after September 2000?

iv.            Did the trial judge err in holding that assuming there was a diminution in the value of the properties after September 2000, that diminution was caused by the discharge of nickel particles on to the land?

v.            Did the trial judge err in failing to hold that the claim was time barred under s. 45(1)(g) of the Limitations Act?

The Court allowed the appeal on the basis that the property owners failed to establish Inco's liability under either private nuisance or the rule in Rylands v. Fletcher (which is basically that a landowner cannot allow a harmful substance to flow from his or her property onto a neighbouring property).  Alternatively, if liability had been found, the Court of Appeal would still have found that the property owners failed to prove that they suffered any damages. 

Here is some of what the Court said about the tort of nuisance:

People do not live in splendid isolation from one another.  One person’s lawful and reasonable use of his or her property may indirectly harm the property of another or interfere with that person’s ability to fully use and enjoy his or her property.  The common law of nuisance developed as a means by which those competing interests could be addressed, and one given legal priority over the other.  Under the common law of nuisance, sometimes the person whose property suffered the adverse effects is expected to tolerate those effects as the price of membership in the larger community.  Sometimes, however, the party causing the adverse effect can be compelled, even if his or her conduct is lawful and reasonable, to desist from engaging in that conduct and to compensate the other party for any harm caused to that person’s property.  In essence, the common law of nuisance decided which party’s interest must give way.  That determination is made by asking whether in all the circumstances the harm caused or the interference done to one person’s property by the other person’s use of his or her property is unreasonable:  Royal Anne Hotel Co. Ltd. v. Village of Ashcroft (1979), 95 D.L.R. (3d) 756 (B.C.C.A.), at pp. 760-61. 

[...]

In our view, actual, substantial, physical damage to the land in the context of this case refers to nickel levels that at least posed some risk to the health or wellbeing of the residents of those properties.  Evidence that the existence of the nickel particles in the soil generated concerns about potential health risks does not, in our view, amount to evidence that the presence of the particles in the soil caused actual, substantial harm or damage to the property.  The claimants failed to establish actual, substantial, physical damage to their properties as a result of the nickel particles becoming part of the soil.  Without actual, substantial, physical harm, the nuisance claim as framed by the claimants could not succeed.

On the rule in Rylands v. Fletcher, the Court wrote:

The rule in Rylands v. Fletcher imposes strict liability for damages caused to a plaintiff’s property (and probably, in Canada, for personal damages) by the escape from the defendant’s property of a substance “likely to cause mischief”.  The exact reach of the rule and the justification for its continued existence as a basis of liability apart from negligence, private nuisance and statutory liability have been matters of controversy in some jurisdictions:   see Transco plc v. Stockport Metropolitan Borough Council, [2004] 2 A.C. 1 (H.L.); Burnie Port Authority v. General Jones Pty. Ltd. (1994), 179 C.L.R. 520 (Aust. H.C.); Murphy, “The Merits of Rylands v. Fletcher”.  In Canada, Rylands v. Fletcher has gone largely unnoticed in appellate courts in recent years.  However, in 1989 in Tock, the Supreme Court of Canada unanimously recognized Rylands v. Fletcher as continuing to provide a basis for liability distinct from liability for private nuisance or negligence.  

[...]

There are various formulations of the rule found in the case law and the academic commentary.  The authors of The Law of Nuisance in Canada suggest different potential formulations, including one, at p. 113, that requires four prerequisites to the operation of the rule:

•        the defendant made a “non-natural” or “special” use of his land;

•        the defendant brought on to his land something that was likely to do mischief if it escaped;

•        the substance in question in fact escaped; and

•        damage was caused to the plaintiff’s property as a result of the escape.

The Court of Appeal found that there was no liability under this doctrine because Inco's use of its property was not a "non-natural use".

Finally, although the Court of Appeal did not have to address the limitation period issue in order to make its decision, it did provide a brief commentary on the issue because of its potential effect on future cases.  The Court cautioned that discoverability is often an individual issue requiring individual adjudication after common issues (such as liability and damages, in this case) have been decided.  The trial judge in this proceeding had made a ruling on a limitation period defence on the basis that "most property owners" would not have been aware of the potential effect of nickel contamination as of a certain date.  The Court of Appeal ruled that the limitation issue could not be decided in that way in the trial of common issues:

If, as the trial judge found in this case, the evidence does not establish that all class members were not aware of and ought not to have been aware of the material facts, then the application of the Limitations Act to the claims is an individual and not a common issue. 

Read the full decision at: http://canlii.ca/s/6lhbs.

Case comment on Omers Energy oil and gas lease case available

Professor Nigel Bankes of the University of Calgary has posted a case commentary at ABlawg.ca on the recent Alberta Court of Appeal decision in Omers Energy Inc. v. Alberta (ERCB): case comment.  I posted a brief note on this case last week.

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.