NS Court of Appeal overturns profit à prendre (right to take hay) decision

Back in February, 2014, the Nova Scotia Supreme Court upheld a neighbour's right to take hay or other crops off a portion of a 2.7 acre property that had been severed from the neighbour's farm in 1960 (see my post on that decision here).  The case has gone to the Court of Appeal and the lower court's decision has been overturned.

The Court of Appeal introduced the case as follows:

Rarely does a claim of the property right known as profits à prendre, which has existed since ancient times, come before the courts.  It arises here because a landowner conveyed part of his property subject to a reservation of a right in favour of himself, his heirs and assigns to enter on that property to remove hay.  Throughout the next fifty years, the landowner, his successors in title and their assigns continuously exercised that right, entered the conveyed lot and cut hay.

The current owners of that lot defended an application seeking to confirm the right to cut hay on their property.  They argued that the reservation was void or voidable.  In her decision dated January 29, 2014, Justice Margaret J. Stewart granted an order for a declaration in the nature of a profit à prendre (2014 NSSC 36 (CanLII)).  This is an appeal from her order which issued June 11, 2014.

After reviewing in detail the law relating to profits à prendre, the Court of Appeal concluded that the original grant of a right to take hay was a "profit in gross", which is a "right without limit and separate from any land owned by the profit holder".  Therefore, it was not necessary that the right to take hay benefit the neighbouring property specifically - it just had to benefit the original grantor and his successors.  

However, as noted the Court, that finding (which was not made by the lower court judge) was not of assistance to the neighbour: "Since a profit is an interest in land, to be valid in law it must be conveyed by deed to satisfy the Statute of Frauds.  But none of the 1972 and 1998 deeds in the chain of title of the C lands from GC to the respondent conveyed the right to enter upon and remove hay from the D lot.  The 1998 deed merely excluded that lot from the description of the C lands."  In other words, there was nothing in the chain of title to link the original profit à prendre to the current owner of the neighbouring land.

It was also possible for the right to take hay to continue to exist as a part of the estate of the original landowner.  However, there was no evidence of any disposition or transfer of the profit à prendre (an asset of sorts) by will or otherwise from the original grantor, GC, to the neighbour.  The neighbour's claim failed.

Read the decision at: Snyder v. Chisholm.

Is a 1960 reservation of the right to take hay still enforceable?

The Nova Scotia Supreme Court has recently heard the case of a farmer looking to exercise a right to take hay that was first created in 1960.  The Court explained:

This application involves the interpretation of a reservation of a hay/crop

right in favour of GC, his heirs and assigns” in a 1960 deed from

GC to the respondents’ predecessor in title ID. An area of some 2.7 acres of GC’s 150-acre farm lot in Antigonish County, was conveyed, along with a 100-year old farm house and barn (or its foundation), collectively “the S lot.” After describing the dimensions of the 2.7-acre lot, which runs through GC’s farm lot, the deed then provides the following:

RESERVING however to the said GC, his heirs and assigns the right and privilege to enter upon the said land from time to time for the purpose of removing hay or other crops or improving the land, ...

GC's nephew and successor in title has now come to the Court seeking an order confirming and declaring his right to enter the 2.7 acre parcel "for the purpose of removing hay or other crops or improving the land".

The Court determined that the right reserved to GC when he sold the 2.7 acre parcel was a "profit a prendre" - a right to take the produce or profit from the land.  The Court ruled that GC had reserved to himself and to his assigns (his successors in title) the right to remove hay form a portion of the 2.7 acres and that this reservation was not "repugnant" to the grant of title to the 2.7 acres (i.e. the sale of the land in 1960).

The responding parties (the current owners of the 2.7 acres) argued that the profit a prendre was extinguished years ago "because the purpose for which the condition was created has now expired".  The Court disagreed with this position.  It found that the owners of the GC lands have continued to take hay from the 2.7 acres since 1960 (whether for their own use or by lease to another farmer) and that:

If the profit appurtenant has been extinguished by the permanent alteration of the GC tenement, since it is no longer a cattle farm, then removal of the hay is still held as a right in gross, unaffected by such circumstances. It is a right exercisable by GC, the owner of it independently of his ownership of any land. The reservation is not rendered void or the profit extinguished due to alteration to the GC lot. 

However, the Court agreed with the respondents that the right to take hay on the whole 2.7 acres unreasonably limited their potential use of the property.  The Court made an order allowing the respondents to use the land within a certain tree line, which the Court determined "would not be an actionable infringement of the reservation rights".  The Court did grant the application and declared that the GC land owners hold a profit a prendre.

Read the decision at: Chisholm v. Snyder.

Alberta farm land tax assessment case sent back for re-hearing

Madam Justice J.M. Ross of the Alberta Court of Queen's Bench in Edmonton has allowed an appeal of a property tax assessment decision involving farm land.  She granted leave to appeal to the Applicant, Associated Developers (AD), from a 2010 decision of the Composite Assessment Review Board (CARB) assessing AD's land as industrial property rather than as farm land.  Justice Ross then heard the appeal, overturned the decision of the CARB and sent the case back to the Board for re-determination.

The Property in question, located in Edmonton, was assessed as industrial property at a value of $6,723,500 in the 2010 assessment year for the 2009 taxation year.  The relevant valuation period for the 2010 assessment was therefore 2009.  Had the Property been assessed as farm land, the assessed value would have been $863,000.   The Applicant complained to the CARB, asserting that the property should have been assessed as farm land.  The Applicant had filed with the CARB annual leases between AD and a farmer for the years 1999-2010.  The leases included terms that the lands would be used solely for agricultural purposes. 

The City of Edmonton (arguing for the industrial land assessment) argued that the crop of hay on the property had not been harvested in 2009.  The City's position was that if the crop was not cut, it could not be said to have been produced and, therefore, was not used for farming operations and could not be classified as farm land.  AD argued in response that the land could still be farm land even if not hayed in 2009, as there are many circumstances in which people leave land idle for a year for a variety of sound agricultural reasons.

Justice Ross allowed the appeal because the CARB failed to provide adequate reasons for its decision and failed to identify the appropriate legal tests in its reasons.  These were breaches of the principles of natural justice and the duty to be fair.  She cancelled the decision and sent the matter back to the CARB to be re-heard.

Read the decision at: Associated Developers Ltd. v. Edmonton (City).

Saskatchewan farmers win dispute over hay

On March 15, 2002, Ralph and Beverly Austin sold their farm land and assigned a land lease to the defendant, 101013354 Saskatchewan Ltd.  Lyla Cowan is the sole officer and shareholder of 101013354 Saskatchewan Ltd.  The sale included buildings, some sheds and bushel bins located on the land.  The purchase price was allocated amongst the land sold, the buildings, sheds and bushel bins and leasehold improvements on the leased lands.  This agreement for the sale of land and assignment of lease was in writing and signed by the parties on March 12, 2002.

Prior to March 15, 2002, the Austins had a stack of bales located on the land.  In March 2002, the Austins agreed to sell the bales to Cowan and she agreed to pay them for the hay.

Prior to possession date the Austins came to a verbal agreement in the farm yard with Lyla Cowan to sell her the 182 alfalfa hay bales at $120.00 per ton, 83 slough hay bales at $100.00 per ton and 30 straw hay bales at $20.00 per ton located on the land.  The total purchase price was $21,800.00.  They sent Lyla Cowan a bill of sale for the bales in the sum of $21,800.00 about a year later on March 10, 2003, as they did not want to receive any income from the bales in the taxation year 2002.  Lyla Cowan paid the plaintiffs the sum of $10,000.00 on August 3, 2003.  No other payments have been received.

The Austins sued Cowan in the Provincial Court of Saskatchewan for the balance of the purchase price they claimed was still owing.  The judge found in favour of the Austins, and awarded $9,360 plus costs of $250.  This was slightly less than what had been claimed by the Austins because the judge did not find that there had been a "meeting of the minds" between the parties as to the weight of the bales sold.  The judge ruled the weight per bale to be somewhat less than the Austins had estimated.

Read the decision at: Austin v. Cowan.