Landowners seek to rely on 60-year old drainage maintenance agreement with municipality

Landowners and a municipality disagreed over the continuing effectiveness of an agreement made in 1953 that required the municipality's predecessor to maintain a drainage system and to make good any and all damage caused to the landowner (property owner).  The agreement had been made at a time when the local Township wished to construct a drainage system along a road.  In exchange for a right of access to the neighbouring property belonging to the predecessor-in-title to the current landowners, the Township gave the undertakings respecting maintenance and repair of damages.  The agreement was not registered on title, but the current landowners were aware of it.

When the current landowners asked the current municipality (the successor of the original Township) to meet its obligations under the agreement, the municipality responded that it was no longer bound by the agreement.  The parties then agreed to have the Court decide the question in a "Special Case" under Rule 22 of the Rules of Civil Procedure.

The result was the following series of declarations by the Court in favour of the landowners:

1. A DECLARATION that the Agreement on April 27, 1953, properly interpreted, did impose a perpetual obligation of the Township of Thurlow to maintain the drainage system it had installed in good working condition at all times and to make good any and all damage caused to the property owner whoever that may be from time to time as a result of lack of repair or of acts done at any time by the corporation in maintaining and repairing the system.

2. A DECLARATION that as a result of the amalgamation of the Township of Thurlow and the Defendant City in 1998, the Defendant City is bound by the contractual obligations of the former Township which are found to have been created by the Agreement.

3. A DECLARATION that the Agreement is valid and binding notwithstanding that it was not entered into or, the system was not constructed, under or in accordance with legislation such as the Drainage Act.

4. A DECLARATION that the Agreement can be enforced against the Defendant City although it was not registered on title under the Registry Act and/or the Land Titles Act.

5. A DECLARATION that the Plaintiffs are not barred from enforcing the Agreement by s. 449 of the Municipal Act, 2001.

6. A DECLARATION that the Defendant does not have a valid defence to the Plaintiffs’ claim on the basis that the conduct of the Defendant amounts to the exercise or non-exercise of a discretionary function resulting from a policy decision.

7. A DECLARATION that the Plaintiffs are successors of the Agreement and thus, are entitled to enforce the Agreement without an express assignment.

8. A DECLARATION that the Defendant does not have a valid defence to the Plaintiffs' claim on the basis that the Plaintiffs are trying to enforce a positive covenant in regard the land.

9. A DECLARATION that the Agreement, which imposes a perpetual obligation upon the City, is not invalid as contrary to public policy because it does impose a perpetual obligation.

10. A DECLARATION that there is sufficient description of the property and easements in the Agreement to create an enforceable agreement.

11. A DECLARATION that the Defendant does not have a valid defence to the Plaintiffs’claim on the basis that the Plaintiffs did not inquire about the Agreement and/or its status before they bought the land, and/or by reason of the defence that the Plaintiffs did not rely on the Agreement when they bought the land.

12. A DECLARATION that the Agreement is not void as against public policy as fettering the Defendant City’s discretion with respect to future uses of roads and road allowances.

13. A DECLARATION that there is no statutory limitation period that acts to bar an action by the Plaintiffs.

14. A DECLARATION that the Plaintiffs’ claim for damages for breach of the Agreement is not defeated by the doctrine of laches.

Read the decision at: Brown v. Belleville (City).

Alberta Court rules in favour of landowner over crossing agreement

In 1948, CPR and Calgary Power Ltd. reached an agreement providing Calgary Power with the right to place three towers carrying power transmission wires on and over CPR property abutting the north side of 10th Avenue S.E. in the City of Calgary.  The agreement also provided that either party could terminate the agreement by giving three months' notice, and on termination Calgary Power would be obligated to remove the towers and wires and make good any damage caused to the property.  If the removal did not happen within one month of termination, CPR could undertake the work itself at the expense of Calgary Power or take ownership of the towers and wires.  Under the agreement, Calgary Power was to pay to CPR an annual rental of $40.00.

Flash forward to more recent times.  The power transmission facilities on the property have been expanded.  The original agreement and subsequent amending agreements have been assigned by Calgary Power to a company called Enmax.  CPR has sold its lands to a development company called Remington.  Remington wanted to develop the former CPR lands and advised Enmax of the plans.  Enmax told Remington that a 20 metre utility right-of-way would be required and that Remington would need to bear the cost of any changes, including the conversion of the overhead power lines to underground lines. 

Remington's response to Enmax was to provide a notice of termination under the existing agreements.  Enmax was directed to vacate the Remington lands (the former CPR lands) on or before June 30, 2005.   Despite that direction, Enmax has refused to remove the transmission towers and lines from the lands.  Remington says that its development will be severely compromised with the continued presence of high voltage transmission lines.  It believes such a continued presence will acutely influence potential purchasers or tenants in its intended mixed use residential/commercial development.

Remington applied to the Court of Queen's Bench for orders requiring Enmax to vacate the lands.  Enmax argued in response that the agreements between CPR and Calgary Power were personal contracts between a railway company and a utility company and could not be assigned to Remington without the consent of Enmax.  There were also questions raised about whether the agreements actually created true rights-of-way or whether the rights granted were simply a personal licence which could not be assigned or transferred.

The Court found that the agreements did create utility rights-of-way, which through legislation were not subject to all of the Common Law rules surrounding valid easements and rights-of-way.  Further, the Court ruled that if it was wrong about the nature of the agreements, and they did create mere licences, CPR still had the right to assign the agreements to Remington without the consent of Calgary Power or Enmax. 

For those reasons, the Court found that Remington was entitled under the agreements to terminate and require Enmax to remove its facilities.  Of course, that dealt only with the private relationship between the parties.  The transmission facilities are also subject to public regulation by the Alberta Utilities Commission (AUC).  The Court directed Enmax to make an application to the AUC to remove the transmission lines, and ruled that the lines could not be removed or relocated in the absence of an order from the AUC.

This decision is reminiscent of an earlier Alberta Court decision involving a landowner named Randolph Hill.  He purchased land from a railway company and was assigned an agreement that gave him the right to require a pipeline company to remove its pipeline.  The Court agreed that he had that right, but then the company simply went to the National Energy Board and obtained a Right of Entry Order.  The ROE Order now permits the pipeline to remain in place and, further, allows the company to abandon the line in place. 

Hill will no doubt be seeking compensation for this expropriation of his rights under the agreement.  It will be interesting to see how much those rights are worth.  What would someone pay for an agreement that would allow them to free their lands from the encumbrance of a pipeline corridor?  That has to be worth a lot on the open market.  Remington may very well find itself in a similar position.  The AUC may decline to order the removal of the transmission lines, in which case Remington's rights under the CPR agreements will have effectively been expropriated.

Read the decision at: Remington Development Corporation v. Enmax Power Corporation.

OMB declines to discount pipeline easement payment from highway expansion expropriation compensation

On April 11, 1996, the Ontario government (the "Respondent") expropriated 8.391 acres (3.396 ha) out of lands owned by the Estate of Alexander Shypka and Julia Shypka (the "Claimants") to be incorporated into the right-of-way for the 407 highway near Milton. The effect of the expropriation was to divide the Claimants’ lands leaving a 23.392 acre (9.473 ha) parcel on the east side of the highway fronting onto the Ninth Line and a 7.532 acre (3.05 ha) landlocked parcel on the west side of the highway, which is also subject to Consumer Gas and Trans Canada Pipeline easements.  Both before and after the partial taking, the land had been used for agricultural purposes.

In its decision on compensation, the Ontario Municipal Board ("OMB") set out the following general principles of compensation:

The Expropriations Act is a remedial statute enacted for the specific purpose of adequately and fully compensating a land owner whose lands are taken to serve the public interest.
To take all or part of a person’s property constitutes a severe loss, and a significant interference with a citizen’s private property rights, and as such, the power of an expropriating authority should be strictly construed in favour of those whose rights have been affected.

The Expropriations Act, being a remedial statute, must be given a broad and liberal interpretation, and should not be interpreted to deprive one of common law rights unless there is a specific provision in the Act stating so.

This is a presumption that whenever land is expropriated, compensation will be paid, and the Expropriations Act should be read in a broad and purposive way.

Section 13 (2) of the Expropriations Act sets out that the compensation payable shall be based upon one or more of the four heads of damages, three of which for this matter are relevant ; the market value of the land (13(2)(a)), damages for disturbance (13(2)(b)), and damages for injurious affection (13(2)(d)).

The first step in any expropriation is to determine the highest and best use of the expropriated property and the second step is to fix the compensation to be awarded to a Claimant based on such use.

The OMB also discussed the relevance of the TransCanada pipeline easement to the compensation. The Claimants and Transcanada Pipeline Limited had entered into an agreement dated May 29, 1998 in which a total of $53,000.00 was paid to them in 1998. The OMB could find no reason why an adjustment should be made to the amount of the compensation it ordered to be paid to reflect this amount. The pipeline in question is located in the westerly landlocked portion of the Claimants’ lands that the Respondent chose not to take in 1996. The amount paid had no reference to a market value calculation being made then. The Claimants reserved their rights to be paid for the value of that pipeline easement before the National Energy Board. The OMB saw no issue that the Claimants have been doubly compensated by the OMB’s award in this matter. There is a right to arbitration in the agreement, should a party to it wish to pursue the matter.

Read the decision at: Shypka v. Ontario.

B.C. Court resolves nasty neighbour dispute over Sunshine Coast vista

A recent Supreme Court of British Columbia action arose out of a dispute between adjacent landowners in a rural area outside of Comox, B.C.  The dispute culminated in the defendant, Susan Field, erecting a wall of earth topped by a row of large concrete blocks, along a southern portion of the boundary between their properties.  The plaintiffs, Robert and Kathryn Silcox, said that this contravened an agreement they had reached with the defendant in April 2006.  Under that agreement, the plaintiffs had acquiesced in the defendant’s purchase of a road allowance which abutted their properties at the north end.  In return, they said, the defendant had agreed to do a number of things, including preserving their view – what they call their “viewscape” – over the southern end of the defendant’s land, out over the Straits of Georgia.  That view has been blocked by the wall.

The plaintiffs therefore sought an injunction compelling the defendant to remove the concrete blocks, vegetation, and fill installed by her after April 29, 2006, and restraining the defendant permanently from interfering with the view as it existed on that date.

In the end, the Court did not grant the injunction.  This decision is worth a read to see what events led the judge to determine that Ms. Field was entitled to keep the wall in place:

... in my view, removal of the wall would deprive the defendant of what measure of peace and security it has provided her. In my judgment, the plaintiffs’ behaviour subsequent to April 2006, in particular the malicious and high-handed damage to the defendant’s plants, which must be viewed in the context of their generally confrontational approach to defendant, and their numerous demands and objections, should entitle the defendant to leave to wall in place and relieve her of any obligations which could arise in law or in equity respecting preservation of the plaintiffs’ view. In my judgment, leaving the wall as-is would lead to a more equitable result than forcing its removal.

Read the decision at: Silcox v. Field.

Alberta Utilities Commission turns down landowner request to review MATL consultation process

The Alberta Utilities Commission (AUC) has denied a request for review by affected landowners of its approval for the construction and operation of an international power line from Alberta to the United States.  The power line application was made by Montana Alberta Tie Ltd. (MATL), and on January 31, 2008 the AUC conditionally approved the Power Line. 

In April of 2010, a group of landowners acting as "My Landman Group Inc." asked the AUC to review its decision because they alleged that MATL had not complied with the conditions of the original approval related to landowner consultation and negotiation.  Landowners asked the AUC to enforce its conditions of approval and, if the AUC declined, stated that they would ask for similar relief from the Surface Rights Board.  The landowners submitted that once MATL obtained its licence, it stopped engaging in negotiations and mitigation and cancelled meetings with landowners until survey permission was sought and a final offer was delivered, which, for certain landowners, was over two years later.

The landowners submitted that they have been attempting to discuss and negotiate outstanding matters with MATL, without any success. They believe that MATL does not intend to meet to negotiate, including making any changes to their proposed right-of-way agreements, with first and final offers having been the same, with no unique conditions between the unique needs of individual landowners. They question how these practices can reasonably be characterized as negotiation and mitigation, and believe that the concept of negotiation implies willingness by both parties to compromise.  The landowners effectively believe that MATL is not negotiating in good faith or engaging in mitigation.

The AUC rejected the landowners' request for review, first on the basis that the request was out of time and second on the basis that there were no exceptional circumstances warranting a late review.  The Commission found that:

... there is nothing before the Commission in this proceeding that demonstrates that the process has not been followed. The Commission finds that Landowner submissions simply indicate that the Landowners are not satisfied with the results of the process and that they have not reached an agreement with MATL. In this latter regard, the Commission notes that Decision 2008-006 specifically contemplated that the Surface Rights Board has the jurisdiction to issue right of entry orders and to address matters involving compensation, such as impacts from final pole locations, where private negotiations between landowners and MATL remain unsuccessful.

Read the decision at: Re My Landman Group Inc.

B.C. Court decision in Terasen v. Utzig (No. 2) released re landowner damage to pipeline

This 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”).

In a judgment delivered on January 25, 2010, Terasen Gas Inc. v. Utzig Holdings (B.C.) Ltd., 2010 BCSC 90 (CanLII) [Terasen v. Utzig #1], the British Columbia Supreme Court held that Utzig (“the defendant”) had breached covenants in statutory right of way agreements in favour of Terasen and, in the alternative, that the defendant had committed the tort of nuisance in the period prior to October 1993. However, certain defences (consent, acquiescence, laches, estoppel and waiver) had been pleaded but were not addressed in submissions. After the delivery of judgment and further submissions from counsel, the defendant made submissions on those defences at a continuation of the trial, and the plaintiff made submissions in response. The defendant also wished to make submissions on causation, remoteness of damages and mitigation but the Court concluded that submissions on those matters should be heard at the damages phase of the trial (the issue of liability, whether someone is liable to pay damages, is often separated from the determination of the amount or quantum of damages).  Read my post on the earlier decision at: Terasen v. Utzig #1.

In the latest chapter of the case, the defendant landowner elected to make submissions only on estoppel and waiver, and abandoned the defences of consent, acquiescence and laches.  The questions for determination, relating to waiver and estoppel respectively, were as follows:

(1) Did Terasen, with full knowledge of its rights under the statutory right of way agreements, consciously and unequivocally abandon those rights?
(2) In the alternative, did Terasen do something beyond mere delay to encourage Utzig to believe that Terasen did not intend to rely on its strict rights, and did Utzig act to its prejudice in reliance on that belief, such that it would be unconscionable to grant relief to Terasen?

Based on the facts, the Court rejected both lines of defence and set down a case management conference to determine the next steps in the proceedings.

Read the decision at: Terasen Gas Inc. v. Utzig Holdings (B.C.) Ltd. (No. 2).

Claim against CN over sale of contaminated property going forward, in part

This is another decision on motions for summary judgment.  The action involves land owned in North Bay by Canadian National Railway Company (CN) that was sold by Canadian National Railway Properties (CNRP), a special purpose subsidiary of CN that was used to sell the lands, to Drosophilinks Consulting Inc. (DCI). It is alleged that there were environmental problems with one of the parcels sold by CN known as the Main Street lands. Damages are claimed by DCI for breach of contract and by the plaintiff Aldo Forgione under the Occupiers Liability Act, at common law and for breach of an alleged duty of good faith owed to him.  Forgione was involved because the property had come to DCI through an agreement between CN and Forgione "in trust" (for DCI).

The plaintiffs claim that in late July 2005, Mr. Forgione discovered a trailer on the Main Street property that contained transformers containing PCBs that exceeded federal and provincial guidelines. It is accepted that these transformers were there when the sale to DCI closed, although CN says that at the time of the sale, it thought that the property had previously been successfully decommissioned of environmental problems. It is claimed that DCI has incurred substantial expenses to comply with an order of the Ministry of the Environment, that Mr. Forgione has suffered personal damages as result of coming into contact with the PCBs and that he has suffered damages by reason of a lessening in value of the other properties that he purchased from CN in North Bay due to the notoriety of the PCB problem at the Main Street property.

The Ontario Superior Court declined to dismiss the DCI claim for breach of the agreement of purchase and sale, finding that there were genuine issues for trial.  The Court did, though, dismiss all of Forgione's personal claims, ruling that: 1) CN could not be liable under the Occupiers Liability Act when it had already sold the property to DCI; 2) Forgione provided no evidence of personal injury or harm; 3) Forgione provided no evidence of damage caused to other neighbouring properties purchased by companies he owned; 4) Forgione has no claim for a breach of the "duty of good faith":

Moreover, Canadian law has not recognized a general duty of good faith independent from or contrary to the terms of contract.

Even if Forgione were a party to the contract, which he wasn't, a breach of the contract by CN could not give rise to a cause of action for Forgione based on a separate breach of the "duty of good faith".

Read the decision at: Drosophilinks Consulting Inc et al v. Canadian National Railway Company.

"Devastating admissions" by defendant in cattle case leads to summary judgment

Though the test may vary from province to province, a judge may grant summary judgment generally when there is no genuine issue for trial.  That is, if there is no legal issue that needs to be determined at trial in order to dispose of a case, one of the parties to a lawsuit may apply to the Court to have the case decided by way of a motion for summary judgment.

In a recent decision on a summary judgment motion brought by the plaintiff, Master Harrison of the Manitoba Court of Queen's Bench found that "devastating" admissions made by the defendant in the case during examinations for discovery were determinative of the case.  For that reason, there would be no purpose in going to trial and summary judgment was granted.

The case in question involved an "arrangement" where the plaintiff would receive on a regular basis requests or orders from the defendant to purchase cattle.  The plaintiff would go out and buy the cattle, usually at auction, and then deliver the cattle to the defendant and render bills to the defendant.  Eventually the defendant refused to pay and the arrangement ended.  The plaintiff sued for some $80,000.  The defendant counter-sued for $12,000.

Summary judgment was granted in the plaintiff's action because the defendant admitted during examinations for discovery that he had acknowledged the debt to the plaintiff and told the plaintiff that he would pay:

Yes. I offered him that because I lost so much money. And I said, ‘Okay. You know what? I will pay you so much a month until it’s paid, until you are paid.’ But that’s it for us. We are done.”

On the defendant's countersuit, the Court could not grant summary judgment.  The Master ruled that:

This court is not prepared to spend twenty pages of time and space in terms of a detailed analysis of the issues arising in the counterclaim. The evidence of the corporate representatives of the parties is so conflicted that only a trial, in my opinion, would resolve the substantial credibility issues outstanding within the counterclaim. It is true that the affidavit evidence before the court regarding the faxing of invoices concerning the counterclaim cattle does put the corporate defendant in an unfavourable light. However, the overall calibre of the said evidence is simply not strong enough show that the plaintiff has met the legal burden.

Read the decision at: ADJ Livestock v 4486413 Manitoba Ltd.

Property owners discover that neighbour has been taking their metered water for free

In this case before the B.C. Supreme Court, the plaintiffs' water bills were unusually high.  The amounts of water being consumed by Patricia Martin and Barry Bergh were so high that staff from the City of Salmon Arm attended at their home in order to investigate.  This investigation led to the discovery of a standpipe offshoot from the water pipeline servicing the plaintiffs' property that was providing water free of charge to a neighbour, the defendant in the case, primarily to water her garden.  The neighbour claimed that her free use of the water was guaranteed by the terms of an easement agreement that allowed for the pipeline to the plaintiffs' property.  The easement crossed the neighbouring property.

Although the defendant asserted, "I believe that I am being bullied and will not give up my garden hydrant just because Mr. Bergh could not be bothered to read the easement agreement before he bought his property", the Court found that the agreement did not provide the defendant with a right to take water from the plaintiffs' pipeline.  On that basis, the Court required that the offending standpipe be removed and ordered that a payment be made by the defendant to the plaintiffs in respect of the water already consumed for free.  Justice Meiklem also commented: "The defendants' approach to this matter has been stubborn and legally wrong and they certainly should be liable for costs of this proceeding".

Read the decision at: Martin v. Ambrose.

Utility Corridor Regulation in Canada: Shifting Jurisdictions

Read my article published in the Spring 2010 Newsletter of the Ontario Expropriation Association about the effect of shifting regulatory jurisdictions on easement agreements and landowners at: OEA Spring 2010 Newsletter.

B.C. Developer fails to convince Court to modify utility easement

The British Columbia Supreme Court has dismissed a request by a land developer to modify the terms of a utility corridor easement agreement. The developer, Hilltop Sand & Gravel Co. Ltd., owns land encumbered by an easement granted to FortisBC Inc., formerly West Kootenay Power and Light Company Limited, for the construction of power lines. Hilltop began developing its land for residential development and planned for a roadway to run adjacent to the easement, which currently stands empty. FortisBC refused to grant permission to the developer for the road.

Hilltop made an application under Section 35 of the Property Law Act in B.C. which enables the Court to modify an easement where the reasonable use of the land (by the petitioner) would otherwise be impeded if the easement was not modified and where there is no practical benefit to the holder of the easement of maintaining the easement. FortisBC maintained that modification of its easement and the construction of the road as planned would interfere with its future expansion options. The Court agreed and found that the possibility of future expansion of the power line operation was more than hypothetical. On that basis, the petition was dismissed.

Read the decision at:
http://www.canlii.org/en/bc/bcsc/doc/2010/2010bcsc108/2010bcsc108.html

B.C. landowner liable for breach of Terasen Right-of-Way agreements

In a decision rendered January 25, 2010, the British Columbia Supreme Court found Utzig Holdings (B.C.) Ltd. liable for possible damage caused to a Terasen (formerly B.C. Gas) pipeline by a landfill operation. The damage alleged is stated to be "possible" because no trial has yet been held on the issue of damages. It may be found that none were sustained. What has been decided is that Utzig, as owner of the land in question, is responsible to Terasen both under right-of-way agreements and the tort of nuisance.

Utzig owned the land, but leased it to two different landfill operations (which were found liable in an earlier trial). Terasen alleged that the landfill operations, which were conducted outside the statutory right-of-way, caused one of two pipelines to shift (on one occasion up to 1/2 a metre) and put the pipeline operation at risk. The trial judge found that this was the case. The trial judge also found that Utzig, although it had signed an Agreement of Purchase and Sale to sell the properties to the landfill operations, remained the "owner" for the purpose of the right-of-way agreements. The sale of the property, if it had occurred at all, had not been registered on title.

Because of the unique ownership situation in this case, the trial decision includes long discussions of fairly complex liability issues. However, what will be more interesting to see will be the decision on damages when it is made. The trial decision notes that the shift in the pipeline's position caused Terasen (then B.C. Gas) to shut down portions of the pipeline due to safety concerns and then build a replacement pipeline in another area.

Read the decision at:
http://www.canlii.org/en/bc/bcsc/doc/2010/2010bcsc90/2010bcsc90.html

Summary Judgment granted for failure to deliver on marketing contract

The Saskatchewan Court of Queen's Bench granted summary judgment in favour of Walker Seeds Ltd. after the defendant, Jacob Enterprises Ltd., failed to deliver fully on a marketing agreement for desi chickpeas. The agreement provided that Jacob would deliver to Walker all chickpeas growns on 660 acres of land in 2006, save that Jacob could retain 95 pounds net per acre for seed. There was a dispute between the parties as to how much Jacob actually harvested in 2006. The contract provided for a base production amount of 13,200 bushels, and the Court found that Jacob had exceeded this production, although he delivered only 8,258 bushels to Walker. The Court granted judgment to Walker for the difference owing of 4,942 bushels at 60 pounds per bushel (296,520 pounds) times $6.25 per bushel, or $18,532.50.

A counterclaim by Jacob Enterprises for severe emotional distress caused by an alleged failure by Walker to pay for delivered chickpeas in a timely fashion and failure to provide receipts for grain was dismissed. The Court noted the difficulty it had in accepting a claim by the corporation for the emotional distress of its shareholder.

Walker Seeds Ltd. v. Jacob Enterprises Ltd. 2009 SKQB 482
http://www.canlii.org/en/sk/skqb/doc/2009/2009skqb482/2009skqb482.html