Built on your neighbour's property? All may not be lost.

AS PREVIOUSLY PUBLISHED IN THE RURAL VOICE:  

Everyone knows that you should not cut trees down on your neighbour’s property without permission.  You also shouldn’t build structures on your neighbour’s property without permission.  In fact, even with a neighbour’s permission it wouldn’t seem to make much sense to build a structure that is located in whole or in part on your neighbour’s property.  Fixtures to the land belong to the owner of the land.  Why build a structure that you don’t fully own?

Sometimes, though, structures are built which unintentionally encroach on a neighbour’s property.  The exact boundary lines between properties may not be apparent; without having a surveyor identify a boundary line, mistakes can be made.  In some cases, the property owner having the structure built is mistaken about the actual location of the property boundary.  In some cases, the mistaken understanding of the location of the boundary is shared by both neighbouring owners.  Think of an old boundary fence that has always been there – it’s just that it was never actually on the boundary. 

When some encroachments are discovered, the answer is simply to move the encroaching structure.  But there are some structures which cannot be easily moved or cannot be moved without great expense.  What then?  The structure that is encroaching on the neighbour’s property may have been in place for many decades.  Perhaps it is a house that was built long ago in the wrong position.  It may be that the current legally recognized property boundary is incorrect and based on a historical mistake and an order from the Court or the Director of Land Titles can be obtained to correct the boundary. 

There might also be a case for adverse possession.  Depending on how long the structure has been in place, the owner of the structure might actually have obtained legal ownership of the land beneath the structure through the process of adverse possession.  Where a person has possessed someone else’s land continuously for a period of ten years or more with the intention of excluding the registered owner (or other persons entitled to possession of the land), the ownership interest of the registered owner may be extinguished and lost to the person actually in possession.  The acts of possession must be “open, notorious, peaceful, adverse, exclusive, actual, and continuous having regard to the nature of the disputed property.”  Building a house or other building on land and having exclusive occupation of it could very well meet the requirements for adverse possession.

However, adverse possession cannot arise once property becomes part of the Land Titles system of land registration.  In Ontario, most properties are now part of that system.  While it is still possible that adverse possession could have taken place prior to the date when a property became part of the Land Titles system (if more than ten continuous years of adverse possession were by then completed), no adverse possession of lands after that date will be effective to extinguish the ownership interest of the registered owner in favour of the encroaching party.

So what happens if you accidentally build your structure on your neighbour’s property and adverse possession is not an available solution?  What if your neighbour won’t agree to sell you the land or enter into an encroachment agreement with you?  There may be another fix available.  In a case recently decided by Madam Justice Doyle of the Superior Court of Justice, owners whose garage was accidentally constructed in part on the neighbours’ property were granted an order entitling them to the encroachment lands upon payment to the neighbours of $18,500.  The order was made pursuant to Section 37(1) of the Conveyancing and Law of Property Act, which provides:

Where a person makes lasting improvements on land under the belief that it is the person’s own, the person or the person’s assigns are entitled to a lien upon it to the extent of the amount by which its value is enhanced by the improvements, or are entitled or may be required to retain the land if the Superior Court of Justice is of opinion or requires that this should be done, according as may under all circumstances of the case be most just, making compensation for the land, if retained, as the court directs.

The circumstances of the case before Justice Doyle arose from an unfortunate error.  Prior to 2006, the owners of what became two adjoining lots built a garage on one of the lots.  In the summer of 2006, those owners sold one lot to one purchaser and the other lot to another, but it was discovered before closing of the transactions that the garage on the one lot encroached onto the other lot.  The owner-vendors fixed the situation by tearing down the portion of the garage that crossed the property boundary.  Unfortunately, as was discovered in 2015 when the garage lot owners decided to sell their lot, the tear down in 2006 didn’t go far enough – the parties were wrong about the actual location of the property boundary.

By 2015, the cost of tearing down the garage and rebuilding it entirely within the lot where it was supposed to be located was understood to be more than $117,000.  Justice Doyle granted the order requested to retain land under the Conveyancing and Law of Property Act because the garage lot owners had an honest belief that the land being encroached upon was theirs and they had made a “lasting improvement” to the land (something “not easily removable”).  The significant cost quoted for the removal of the garage satisfied the “lasting improvement” requirement.

Justice Doyle determined that the “balance of convenience” was in favour of the garage owners to permit them to retain the encroached land in part because there was no evidence showing that the value of the neighbours’ property would be decreased by the conveyance of the area of the encroachment.  Based on appraisal evidence as to the per square foot value of comparable land, the price for the land was set at $18,500.

Read the decision at: 2022 ONSC 105.

Normal Farm Practices Board shuts down greenhouse biodigester

AS PREVIOUSLY PUBLISHED IN THE RURAL VOICE:  

In Ontario, a person affected by a disturbance from an agricultural operation, such as odour or noise, may apply to the Normal Farm Practices Protection Board for a determination as to whether the disturbance results from a “normal farm practice”.  If, following a hearing, the Board determines that the disturbance results from a practice that is not a normal farm practice, the Board must order the farmer involved to cease the practice.

On November 8, 2018, the Board issued its Reasons for Decision in a case involving allegations of disturbances due to odour, flies, dust, light, noise and vibration arising from the operation of a biodigester at a large greenhouse operation.  The Board determined that the operation of the biodigester was not a normal farm practice and ordered that the digester system be shut down immediately.  The Application was brought by a number of residents living in the vicinity of the operation in 2015.  A hearing of the Application was held by the Board over the course of 20 days in December, 2015, and January, April, June, and July, 2016.  In addition to hearing from no fewer than 25 witnesses, the Board received approximately 200 documentary exhibits into evidence.

The Board heard that the biodigester in question had been installed in or about 2008 by the greenhouse operator (now in receivership) at the rear of its greenhouses to provide an alternative source of energy.  Biogas produced by the digester ran a large electrical generator, and the electricity produced was used to heat water to heat the greenhouses.  The system included two enclosed digesters, a large generator, a flare for burning off excess gas, cement bunkers where feedstock for the digesters was stored, and both open and buried tanks for liquid digestate.  Feedstock for the digester has included material such as pet food, coffee grounds, vegetable and flower waste from grocery stores, solids from meat processing, and occasionally manure.

The rural area where the greenhouse operation was located is composed of small farms with narrow frontages, along with a number of residential lots that have been severed from larger farm properties.  Prior to the installation of the biodigester, the neighbourhood was considered to be "a relatively quiet, peaceful rural setting" where disturbances from agriculture were limited to the occasional sound of tractors operating and periodic odour from nearby chicken barns.  Following installation of the biodigester, however, significant disturbances were reported, including offensive odour noticeable almost daily, and an extreme increase in the number of flies around neighbours' homes.

In assessing the application, the first question for the Board was whether one or more of the applicants had proven that he or she was directly affected by a disturbance of odour, flies, dust, light, noise or vibration arising from a practice related to the greenhouse operation.  Although under the test applicable to the application, the Board would only need to find that one of the applicants had been directly affected by one of the alleged disturbances, the Board found that several of the applicants demonstrated that there had been:

"a substantial and repeated interference with the use of their properties by reason of the excessive odour and flies since 2009.  The character of the neighbourhood has been changed by the operation of the digester from a quiet, peaceful rural setting with the occasional sounds and smells of farming to one besieged by almost daily intense odour and hordes of flies."

The next question was whether the operation of the biodigester was a "normal farm practice", which is defined in the Farming and Food Production Protection Act, 1988 as a practice that: (a) “is conducted in a manner consistent with proper and acceptable customs and standards as established and followed by similar agricultural operations under similar circumstances”, or (b) “makes use of innovative technology in a manner consistent with proper advanced farm management practices."  If the Board found that the operation of the biodigester did not meet one or both of those definitions, the legislation would require the Board order the greenhouse operator to cease operation of the biodigester.

With respect to the first definition of "normal farm practice", being one that is conducted in a manner consistent with proper and acceptable customs and standards, the Board found that the greenhouse operator failed to provide sufficient evidence of other similar biodigester systems being used in similar circumstances as the biodigester at issue.  With respect to the second definition of "normal farm practice", being one that makes use of innovative technology, the Board accepted that the use of a biodigester in an agricultural setting, and the use of agricultural waste as feedstock, were innovative.  However, relying on the decision of the Ontario Court of Appeal in Pyke v. Tri Gro Enterprises Ltd., the Board ruled that operation of the biodigester was nevertheless not a "normal farm practice" on account of the intensity and severity of the disturbances caused and the change in the character of the neighbourhood surrounding the greenhouse operation.

The Board also found that the operation of the biodigester could not be modified so as to make it a “normal farm practice”, leaving no option but to shut the digester down.

Read the decision at:  2018 CanLII 107105 (ON NFPPB).

Reminder: Check the property boundary before cutting down (your neighbour's) trees

A Superior Court case heard in April, 2018 involved rural neighbours and the unauthorized removal of trees.  Neighbour O sold trees on his property to the owner of a local sawmill, T.  T apparently had a permit to remove the trees from Neighbour O's property, and took the timber that he had purchased.  T did not, however, have a permit to remove trees from Neighbour M's property, and neither Neighbour O nor Sawyer T had permission from Neighbour M to take down any trees at all on her property.  Unfortunately, T removed 98 mature white cedar trees from a forest area on Neighbour M's property.

Neighbour M sued Neighbour O for damages in trespass.  The trespass was admitted.  However, the parties disputed two issues: 1) a limitation period defence put forward by Neighbour O; and, 2) the amount of damages to be awarded for the trespass, if the limitation period defence did not eliminate the claim entirely.

The Court rejected the limitation period defence.  The trees had been removed by T in February, 2011.  Although Neighbour M did not commence her claim until October, 2013, some 32 months after the trees had been removed from her property (beyond the 2-year limitation period applicable to most damages claims in Ontario), Justice Gordon accepted Neighbour M's explanation that she did not become aware of the tree cutting until November, 2011 (less than 2 years before the action was commenced).  The limitation period did not begin to run until Neighbour M had discovered her claim; Justice Gordon accepted her explanation that she had not visited the area of her property where the trees were located (which was a 15 minute walk from her residence) during the period from February to November, 2011.

As for damages, Justice Gordon decided that, in addition to an award of $8,000 as compensation for the value of the timber taken by T, the cost of restoration was the appropriate measure of damages for the trespass in this case.  He noted that the 98 trees taken had been growing for decades and could not be replaced, and further decided that the natural forest area should be left to re-seed itself.  Replanting was not found to be warranted.  Justice Gordon awarded Neighbour M a further $30,000 plus HST for the cost of "appropriate restoration", which would involve removing broken tree limbs in the canopy and on the forest floor, removing tree tops from timber removed, removing damaged, leaning and spring pole trees, chipping and spreading chips on the forest floor, and cutting stumps to ground level.

Read the decision at: M v. O.

Subsequent agreement doesn't necessarily cancel out pre-existing prescriptive easement

"Good fences do not always make good neighbours." 

I wonder how many court decisions begin with that line or something like it - it seems like it must be a lot.  Madam Justice Gomery of the Ontario Superior Court opens her reasons with that line in a recent case involving a claim for a prescriptive easement in Ottawa.  Neighbours were in court disputing the space between their houses, each built sometime prior to 1928.  The houses are just over 14 feet apart, and a shared driveway runs between the houses.

Neighbour E had lived in the one house since 1980.  Neighbours P moved into the other house in 2003.  Notwithstanding that the driveway had been between the houses for the entire time Neighbours P had occupied their property, they went ahead in November, 2016 and built a fence down the middle of the driveway, just inside their own property line.  Of course, they were still able to use the driveway with the fence in place because they had sufficient space on their side.  On Neighbour E's side, a retaining wall was in place and the space between that wall and the fence was insufficient to allow him to use the driveway.

As noted above, the actual property line ran down the middle portion of the shared driveway.  Neighbour E brought an application for an order recognizing his right to use the full width of the (previously) shared driveway and requiring Neighbours P to remove their fence.  Neighbour E claimed that he had a prescriptive easement (one that arises through use over a period of time) over the driveway.  At issue was whether Neighbour E's enjoyment of the driveway (and that of his predecessors in title) had been with the permission of Neighbours P (and their predecessors in title).  In order for an easement to arise by prescription, the use of the land must be without the permission or objection of the owner of the land involved. 

To succeed in his claim, Neighbour E had to show that the owners of his property had used the shared driveway for a period of at least 20 years prior to 1996 (when the lands were converted into the Land Titles System, which no longer permits the creation of easements by prescription), with the knowledge of the neighbouring landowners, and without their objection or permission.  While Neighbour E had evidence showing such use prior to 1996, he had to deal with the fact that a previous owner had entered into an agreement in 1980 in which each neighbour (predecessors in title to the current owners) had given the other a right to use the shared driveway, and had agreed to share expenses, for a period of 21 years less a day.  Did this agreement mean that use of the driveway was with permission and could not, therefore, give rise to a prescriptive easement?  If an easement had been established prior to 1980, did the agreement cancel the easement out?

Justice Gomery found that the agreement did not erase the prescriptive easement that she found to have existed prior to the agreement made in 1980.  She reasoned that where parties neglect to record an easement on title, that does not defeat the claim for the easement where the Court finds that it exists.  Likewise, the failure by the parties to have recognized the pre-existing easement in the 1980 agreement did not extinguish the pre-existing prescriptive easement.  Justice Gomery ruled in favour of Neighbour E.

Read the decision at: E et al. v. P et al.

Private Prosecution by Neighbour over Boundary Tree - Tree By-law Conviction Upheld on Appeal

Disputes between neighbours about boundary trees are not uncommon; private prosecutions by neighbours against neighbours, especially concerning boundary trees, are uncommon.  In a recent decision, Justice Libman of the Ontario Court of Justice upheld a lower court conviction obtained on a private prosecution with respect to a violation of the Forestry Act, R.S.O. 1990, c. F-26.  One neighbour contended that the other neighbour cut down a shared Norway maple tree without consent, which is generally a requirement of Section 10(3) of the Forestry Act.  He brought forward a charge against his neighbour in the Provincial Offences Court.

Although there was a permit or Certificate of Exemption issued by the City of Toronto for the removal of the tree (granted on the basis of concerns that the tree posed a hazard), the permit made it clear that the determination of the ownership of the tree was the responsibility of the party applying for permit.  In other words, the permit itself did not relieve the applicant (the neighbour who wished to cut down the tree) of any responsibilities he might have at Common Law or through legislation like the Forestry Act.

And although there are cases in which a neighbour might remove a tree without the other neighbour's consent. such as a case where the tree is causing a nuisance or where the removal is needed urgently and consent cannot be obtained in a timely manner, Justice Libman found that this was not such a case.  Where it was already well known that the neighbours opposed the removal of the tree, the other neighbour, permit or not, could not simply go ahead and have the tree removed.  For these reasons, the appeal from the conviction was dismissed.

The penalty that had been imposed by the trial justice was a fine of $5,000. 

Read the appeal decision at:  Gross v. Scheuermann.

Read the trial decision at: R. (ex rel. Scheuermann) v. Gross.

Read the sentencing decision at: R. (ex rel. Scheuermann) v. Gross.

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).

Divisional Court comments on positive covenants

Property owners may covenant with one another in connection with their lands.  They may agree to negative covenants, which prevent certain things from being done on or with the land. For example, a negative covenant may prohibit certain uses that can be made of land or require that only certain types of building materials or colours can be used in buildings, etc.  Owners may also agree to positive covenants, which are promises to do something.  For example, a positive covenant may require one neighbour owner to pay something toward the costs of maintaining shared facilities or actually to carry out the maintenance activities, etc. 

The distinction between negative and positive covenants is important because, in Ontario and traditionally at Common Law, positive covenants do not generally run with the land.  That is, although a covenant may somehow be registered on title to a property (in a deed or easement, etc.), it does not necessarily follow the land when ownership changes.  Negative covenants will bind future owners, but positive covenants will not normally bind future owners.  Positive covenants are treated as agreements between the individual owners that attach to the owners, rather than to the land.

However, there are exceptions to the general rule.  In a 2016 appeal from a Small Claims Court decision, the Ontario Divisional Court reviewed the law on positive covenants and the exceptions to the general rule that positive covenants do not run with the land.  Statutory exceptions to the rule include: positive covenants granted by public authorities (Planning Act, R.S.O. 1990, c. P.13); positive covenants concerning condominiums (Condominium Act, 1998, S.O. 1998, c. 19); and positive covenants between the Crown and private landowners concerning the installation of survey monuments (Surveys Act, R.S.O. 1990, c. S.30, s. 61(1)).

There are also Common Law (non-statutory) exceptions to the general rule, including chain of covenants, the doctrine of benefit and burden, and conditional grants.  

The chain of covenants exception applies when successors-in-title (the future owners) agree to the same positive covenants.  That is, each time a property subject to the original positive covenant is transferred, the new owner(s) would agree to be bound by the covenant.  In reality, this is arguably the creation of a new covenant at the time of each transfer rather than a true exception to the rule.

In the 2016 appeal case, the Divisional Court described the other two Common Law exceptions as follows:

•  Conditional Grant Exemption. When being asked to enforce a positive obligation, the courts will first look at the transaction between the parties to see if a benefit was clearly made on the conditional acceptance of a positive obligation. If such an intention can be made out on the face of the transaction, the conditional grants exception is engaged
•  Benefit and Burden Exemption: If a conditional connection between the obligation and the benefit is not clear, the courts will then consider whether the benefit and burden exception applies. By looking at the circumstances of the transaction, the intentions and relationship of the parties, and the nature of the benefits and burdens at issue, the courts will determine if there is an implicit and necessary connection between formally separate obligations and advantages. Or, to repeat the words of Professor Ziff, this second exception looks to whether the courts should “tether previously separate promises”.

Both of those exceptions happen in circumstances where the Court determines that a future property owner should not escape the obligations of a previously-made positive covenant (on account of the positive covenant not running with the land) where that property owner is receiving a benefit connected with the covenant.  The Divisional Court summarized: "In a fulsome, pragmatic approach, as confirmed in Wilkinson, the courts must look to the substance of the relationship between the benefit and the burden to determine if the positive covenant continues to apply. As noted by Vice-Chancellor Megarry in Tito, when there is a sufficient degree of correlation between the obligation to pay and the grant of benefits, the burden and benefits exception applies."

Read the Divisional Court's decision at: Black v Owen.

Title Insurance and the costs of defending title to your property

Most real estate transactions in Ontario today involve title insurance.  Purchasers obtain title insurance to protect against unknown defects in title that crop up after the closing of the transaction, and title insurance policies generally include coverage for legal costs associated with defending title to a property.  As an example, if you purchase a property and then a neighbour commences a claim for adverse possession of part of the property (i.e. a claim that the neighbour is the true owner of something you thought you purchased), the title insurance coverage may include payment of the costs of defending the claim.

The issue of what legal costs may be covered by a title insurance policy, or what other costs may be covered, is normally a matter of interpretation of the contract as between the insured property owner and the title insurer.  However, Ontario courts have recently looked at what effect cost recovery under a title insurance policy should have on the awarding of costs in litigation.  If a property owner receives a payment from his or her insurer pursuant to a title insurance policy, should the owner also be entitled to a costs award against the other party in a dispute?  Is there a risk of double recovery?  Should that matter?

In 2011, the Ontario Court of Appeal ruled in Krawchuk v. Scherbak that a private insurance exception can apply to permit double recovery: "where a plaintiff recovers under an insurance policy for which he has paid the premiums, the insurance monies are not deductible from damages payable by the tortfeasor".  In that case, Ms. Krawchuk had purchased a house with serious latent defects based on misrepresentations by the vendors.  She had made a claim for coverage under her title insurance policy and settled that claim with the title insurer in exchange for a payment.  The defendants in the action argued that Ms. Krawchuk's recovery in the court action (which did not involve the title insurer) should be reduced in relation to the payment received under the title insurance policy.  Otherwise, they argued, Ms. Krawchuk would receive a windfall - double recovery.  The Court of Appeal found that double recovery was permitted in that case because it would be inequitable to allow the vendors (the tortfeasors or wrongdoers) to gain an advantaged based on benefits earned by Ms. Krawchuk through the payment of insurance premiums.

But what about a case where there is no tort or wrongdoing?  In a case decided in 2016, a judge of the Ontario Superior Court of Justice found that there was no wrongdoing and, on that basis, deducted title insurance proceeds from an award of costs to the successful parties.  The case involved use by one neighbour of a roadway that ran through another neighbour's property.  The road was not a public highway, and the owners of the road made an application to the Court for a ruling that the road was not an "access road" as defined by the Road Access Act and for an order closing the road.  The neighbours made a counter-application seeking the opposite orders.

The Court agreed with the road owners that the road was not an "access road" and issued an order preventing the neighbours from using it.  Not surprisingly, the road owners had looked to their title insurance policy for coverage in the matter, which affected title to their property.  They received a payment of roughly $25,000 from their title insurer.  The application judge found that the road owners used "those fund[s] to defend the application ... rather than accepting payment in compensation for the inconvenience of providing ... access."  That is, the road owners could have simply kept the $25,000 as disturbance compensation and allowed use of the road to continue (in which case they would not have incurred litigation costs).  Instead, the road owners used the funds received to fund the litigation and were successful in avoiding the disturbance that would have been caused by ongoing use of the road.

Based on that distinction, the application judge deducted the $25,000 title insurance payment from the overall costs awarded to the successful road owners in the case.  He distinguished the case from the Krawchuk v. Scherbak case heard by the Court of Appeal on the basis that there was no tort or wrongdoing involved.  This was simply a case about whether an "access road" under the Road Access Act did or did not exist.  In the absence of a tort or wrongdoing, the application judge was not prepared to allow a double recovery by the road owners through an award of costs.

Read the decision at: Gouett v Mullins.

Ontario Court of Appeal confirms test for grantor's easement of necessity remains "strict necessity", not "practical necessity"

In Ontario, an easement of necessity may arise where land that is sold is inaccessible except by passing over adjoining land retained by the seller (i.e. an implied grant by the seller of an easement that allows the purchaser to access the purchased lot).  The easement must "be necessary to use or access the property", and necessity is determined at the time of the grant (the situation at the time the property was sold).

It is also possible for the easement to arise in the opposite direction, where the grantor (the party selling the land) requires an access easement across the land being sold or transferred.  That was the situation reviewed recently by the Ontario Court of Appeal in Toronto-Dominion Bank v. Wise.  In a case where the grantor or seller seeks an easement over the land that he or she transferred, the test is one of "strict necessity".  The test to be met by a grantor seeking an easement is supposed to be more difficult than where a grantee seeks an easement because "grantors are not permitted to derogate from the terms of their grant of land.  If they want to reserve an easement, they should do so explicitly at the time they make the grant.  An easement of necessity will be found only if it was necessary in order for the grantor to be able to use his or her property at the time of the grant."

In the Toronto-Dominion Bank v. Wise case, the application judge in the Superior Court had found that a landlocked waterfront property had an easement of necessity over a neighbouring property in spite of the availability of water access.  The judge found that the water access was "impractical".  On appeal, the Court of Appeal reversed the decision on the basis that the water access, whether inconvenient or impractical, was available, and that the property in question was not rendered unusable.  The test to be applied was not "practical necessity" (as the judge at first instance had proposed), but remained one of "strict necessity".

Read the decision at: Toronto-Dominion Bank v. Wise.

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).

Nursery trees ruled to be chattels - claim for spray damage barred by limitation period

The Manitoba Court of Queen's Bench has dismissed a claim for spray damage caused to nursery trees (Roundup from a neighbouring wheat field) on the basis that the applicable limitation period had expired.  The key issue was the characterization of the trees - were they fixtures to the real property (the land) or were they chattels (movable property not affixed to the land)?  If they were fixtures, then a six-year limitation period would apply.  If they were chattels, a two-year limitation period would apply.  The action was commenced nearly four years after damage to the trees was first observed.

What is annexed or attached to the land becomes part of the land (a fixture), but there must be an intention to annex or attach evidenced by the degree of annexation and the object of the annexation.  In this case, the claimant argued that the trees were growing crops and, therefore, part of the real property (the land).  The defendants argued that the trees were planted only for the purpose of storage until they would be sold or used by the claimant, remaining as chattels (not fixed to the land).

The Court sided with the defendants and found that the nursery trees were chattels.  They were treated as the claimant's "stock in trade - as inventory".  The trees were never intended to be permanently attached to the land or to constitute an improvement to the land.  As a result, the two-year limitation period applied and barred the claim for damages.

Read the decision at: Noralta Northern Alberta Trees Inc. v. Plato Enterprises (Alberta) Ltd.

Is entering your property only once in 10 years enough to prevent a successful claim for adverse possession?

Justice E.M. Morgan's decision begins with this question: "Can a claimant have possessory title if the registered owner entered the property only once during the claimant's ten years of otherwise undisturbed adverse possession?".  Under Ontario law, the interest of the registered owner of land may be extinguished by a person who has been in adverse possession of the land for ten years.  The registered owner is then open to losing title to the property to the adverse possession claimant.

In this case, the land in dispute was a small triangle at the top end of a driveway between two properties.  The adverse possession claimant had a right of way over the driveway, but not over the small triangle.  The triangular area was used to facilitate the claimant's turning his car into his garage at the rear of his property.  The registered property owners asked the Court to make a declaration confirming their ownership of the triangle.  They also sought orders requiring their neighbour to remove fencing, interlocking brick and a gate that he had installed on the driveway (which they owned).  The claimant responded by asking the Court to declare him the owner of triangle by adverse possession.

Justice Morgan reviewed the evidence of adverse possession, which must constitute "strict proof".  In the past, a chain link fence had been erected to separate the triangle from the rest of the registered owners' property.  It was established that the fence was installed no later than March 31, 1988.  Owing to the conversion of the property to the Land Titles system in 2001, the claim for adverse possession would depend on establishing exclusive possession by the claimant (or his predecessors in title) of the triangle for an interrupted period of ten years between 1988 and 2001. 

What does it take to interrupt the exclusive possession?  In this case, a previous owner of the triangle deposed that on at least one occassion, in 1996, he entered the triangle to cut down some "swamp maple trees" located there.  That meant that the 10-year clock stopped and restarted in 1996, which did not leave enough time before 2001 to establish continuous adverse possession.  Therefore, Justice Morgan ruled that the registered owners retained their title to the triangular area on their property.

As for the encroaching fence, gate and interlocking brick, Justice Morgan again ruled in favour of the registered owners of the property: "The Applicants are showing their frustration, and are being somewhat difficult by insisting that the interlock be removed from their portion of the driveway.  Nevertheless, they are within their rights to so insist.  The Respondent is not permitted to alter the Applicant's property without consent even if the alteration is, objectively speaking, an improvement."

Read the decision at: Maras v. Milianis.

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.

NS Farm Practice Board decision on overspray upheld

Justice Scanlan of the Supreme Court of Nova Scotia heard an appeal of a decision of the Farm Practices Board (FPB) involving the following facts:

The matter arose as a result of two instances where [JW] sprayed a field directly across the road from the [N] property with what I understand to have been a herbicide. The Appellants argue this was done at a time when the wind speed and direction caused an overspray to spread onto their property, allegedly damaging raspberry canes and allegedly causing personal injury to both Mrs. [N] and to her horses. In addition, the Appellants complain about the impact of ditch excavation, as carried out by Mr. [W], and as to the placement of bales of hay or straw in the ditch, the escape of organic materials onto their property together with the impact or the potential impact that might have had on their well water. I emphasize repeatedly the word “allegedly.” The Appellants also allege, as I noted, that the herbicide impacted the health of their horses, specifically mares in foal. They say the mares were impacted and perhaps may have aborted as a result of the overspray. They allege, as I understand it, although I'm not reviewing in any great detail the allegations in the statement of claim, that it was not just the existing pregnancies that were impacted but the fertility of the mares on a go forward basis.

The issue that had been before the FPB was whether or not the farmer in this case complied with normal farm practices, in which case the practice would be protected from certain civil actions for damages or injunctive relief.  However, the farm protection legislation does not address "the potential impact of chemical use or misuse, including the impact on neighbouring properties."

In the end, Justice Scanlan determined that the FPB decision was reasonable, but pointed out its limitations - it did not deal with all of the allegations made by the complainants, including allegations about overspray.  Those other allegations would still have to be dealt with, if at all, in the civil action that the complainants had also commenced against the farmer in this case.  That action had been stayed pending the outcome of the FPB proceeding.

Read the decision at: Nauss v. Nova Scotia (Farm Practice Board).

Shared water, good neighbours?: Costs Decision

Here's the cost outcome for the shared waterline case: $153,225 awarded to the Plaintiff.  75% was payable by the vendor of the property.  25% payable by the neighbour who sought a declaration of a prescriptive easement.  The Plaintiff had claimed total costs of the matter in an amount of more than $300,000.

Read the costs decision at: Hanisch v. McKean 2.

Judge: "Shared water does not necessarily make good neighbours ..."

Justice DiTomaso's remark seems pretty obvious - shared boundaries and shared resources are quite often the subject matter of litigation.  In this case, the Plaintiff organic farmer purchased a farm from a retired dental surgeon in 1998.  In 2007, she learned from a neighbour not only that the neighbour's water was contaminated with e-coli bacteria, but also that the neighbour's water was sourced from the Plaintiff's farm.  The judge noted: "This was surprising and disturbing news to her."

 

As a result of the discovery, the Plaintiff sued the retired surgeon for fraudulent or negligent misrepresentation.  She also sought a declaration against her neighbour that the neighbour has no prescriptive easement to use the waterline that originates on the Plaintiff's property and services the neighbour's property.  The neighbour counterclaimed for a declaration that she does have a prescriptive easement and for an injunction preventing the Plaintiff from doing anything that would interfere with the quantity or quality of the water running through the (alleged) easement.

 

At trial, a number of factual findings were made, including:

• neither the dental surgeon nor anyone on his behalf disclosed the shared waterline to the Plaintiff at any time prior to the purchase of the farm in 1998
• another farmer who had looked at purchasing the property was not told about the waterline either, and testified that had he known of it, he would not have purchased the property
• the Plaintiff received absolutely no notice of the shared waterline from the vendor prior to closing, and the first notice she had was from the neighbour in 2007
• surveys of the farm did not show the shared waterline, and would not have assisted a prospective purchaser or realtor in understanding that there was a shared water system
• the assertion by the vendor's real estate agent that notice of the waterline was not included in the property listing because there was no room for it was "incredible"
• the waterline to the neighbour's property was in use since October, 1967
• the evidence of the dental surgeon was that he consented to the use of the waterline from the time he purchased the farm property in 1975

The Court dismissed the claim by the neighbour for a prescriptive easement on the basis that use of the water line had been by consent (during the period relevant to determine the easement - in this case, 1967 to 2000, when the land was converted to Land Titles) and on the basis that the use was not "open and notorious".  The waterline was not visible and could not be discovered by the Plaintiff except from disclosure by another party. 

 

The neighbour's claim for an injunction was also dismissed.  There was no evidence of irreparable harm to the neighbour if the injunction was not granted - she could drill her own well for water. 

 

Justice DiTomaso then ruled that the waterline was a latent defect in the property and that the vendor, the retired dental surgeon, "misrepresented the nature of the property for sale by failing to notify or inform [the Plaintiff] that the water supply from the Farm supplied properties and residences to the north by way of the waterline."  The judge did not find that the misrepresentation was fraudulent (i.e. intended to mislead), but did find it was negligent and gave rise to liability.  The Plaintiff was awarded $25,500 in damages plus interest.

 

Read the decision at: Hanisch v. McKean.