Pepper v. Brooker
[Indexed as: Pepper v. Brooker]
Ontario Reports
Court of Appeal for Ontario
G.J. Epstein, Benotto and Trotter JJ.A.
June 26, 2017
139 O.R. (3d) 67 | 2017 ONCA 532
Case Summary
Real property — Adverse possession — Exclusion — Respondents constructing road and steps to improve access to lakeshore from their cottage — Respondents permitting appellant and other neighbours to use road and steps — Parties subsequently discovering that some of respondents' work had been performed on appellant's lot — Trial judge finding that respondents had established claim for adverse possession — Trial judge erring in law by allowing adverse possession claim without making explicit finding on whether respondents effectively excluded appellant from possession.
Starting in 1982, the respondents constructed a road and steps on what they thought was their lot in order to improve access to the lakeshore from their cottage. They permitted the appellant (who owned an adjacent lot) and other neighbours to use the road and the steps. In 2004, they started construction of the first of two seawalls. In 2012, the appellant hired a surveyor to ascertain the true boundary between his lot and the respondents', and discovered that much of the work performed by the respondents was on his lot. He brought an action for damages for trespass. The respondents brought a separate action claiming title to the disputed lands by adverse possession. The actions were tried together. The appellant's claim was dismissed and the respondents' claim was allowed. The appellant appealed.
Held, the appeal should be allowed.
Although the trial judge found that the respondents intended to exclude all others, including the appellant, from possession of the disputed lands, he failed to find that the respondents had effectively excluded the appellant from possession. There was no evidence to support the claim that they had done so. The evidence suggested the opposite. Allowing the respondents' adverse possession claim without a finding of effective exclusion was an error of law.
The evidence established the elements of the tort of trespass. However, there was no reason to depart from the trial judge's conclusion that the appellant had suffered no damages as a result of the respondents' extensive improvements to both lots.
Authorities
Cases considered:
Shennan v. Szewczyk, [2010] O.J. No. 4426, 2010 ONCA 679, 96 R.P.R. (4th) 190, 193 A.C.W.S. (3d) 1315; Teis v. Ancaster (Town) (1997), 35 O.R. (3d) 216, [1997] O.J. No. 3512, 152 D.L.R. (4th) 304, 103 O.A.C. 4, 41 M.P.L.R. (2d) 53, 13 R.P.R. (3d) 55, 73 A.C.W.S. (3d) 678 (C.A.), considered.
Other cases referred to:
Barbour v. Bailey, [2016] O.J. No. 3261, 2016 ONCA 98, 345 O.A.C. 311, 66 R.P.R. (5th) 173, 267 A.C.W.S. (3d) 463 [Leave to appeal to S.C.C. refused [2016] S.C.C.A. No. 139]; Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., [1997] 1 S.C.R. 748, [1996] S.C.J. No. 116, 144 D.L.R. (4th) 1, 209 N.R. 20, J.E. 97-632, 50 Admin. L.R. (2d) 199, 71 C.P.R. (3d) 417, REJB 1997-00386, 69 A.C.W.S. (3d) 586; Chen v. Stafford, [2012] O.J. No. 3043, 2012 ONSC 3802, 23 R.P.R. (5th) 101, 218 A.C.W.S. (3d) 683 (S.C.J.); Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, 211 D.L.R. (4th) 577, 286 N.R. 1, [2002] 7 W.W.R. 1, J.E. 2002-617, 219 Sask. R. 1, 10 C.C.L.T. (3d) 157, 30 M.P.L.R. (3d) 1, 112 A.C.W.S. (3d) 991; McClatchie v. Rideau Lakes (Township), [2015] O.J. No. 1737, 2015 ONCA 233, 333 O.A.C. 381; Sipsas v. 1299781 Ontario Inc., [2017] O.J. No. 1610, 2017 ONCA 265; Sumner v. Sullivan, [2014] O.J. No. 5786, 2014 ONCA 869, 49 R.P.R. (5th) 167, 247 A.C.W.S. (3d) 684, affirming [2014] O.J. No. 1281, 2014 ONSC 1706, 41 R.P.R. (5th) 189, 239 A.C.W.S. (3d) 208 (S.C.J.).
Statutes referred to:
Land Titles Act, R.S.O. 1990, c. L.5, s. 51(2)
Real Property Limitations Act, R.S.O. 1990, c. L.15, s. 4
Rules and regulations referred to:
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 49.10
Authorities referred to:
Rainaldi, L.D., et al., Remedies in Tort (Toronto: Carswell, 1987)
Procedural History
APPEAL from the order of Harper J., [2015] O.J. No. 1807, 2015 ONSC 142 (S.C.J.) dismissing the appellant's action and allowing the respondents' action.
Counsel:
Barry Yellin, for appellant Douglas Brooker.
Peter Quinlan, for respondents James Allen Pepper and Marion Ruth Pepper.
The judgment of the court was delivered by
A. Overview
1This appeal arises from a boundary dispute between two cottage owners. Over a number of years, James and Marion Pepper built a road on their land and made other improvements. When Douglas Brooker discovered that some of the work had been performed on his adjacent lot, he claimed damages for trespass. The Peppers brought a separate action, claiming title to the disputed lands by adverse possession.
2Both actions were tried together. Mr. Brooker's claim was dismissed. The Peppers succeeded in obtaining title to roughly 3,400 square feet of Mr. Brooker's land. They were also awarded the bulk of their costs on a substantial indemnity basis.
3Mr. Brooker appeals. He accepts that there was a mutual mistake concerning the true boundary line separating the properties. However, he contends that the claim for adverse possession ought to have failed because the Peppers did not establish that they had effectively excluded him from the disputed lands. He also argues that the trial judge erred in dismissing his action. Lastly, Mr. Brooker argues that costs should not have been awarded on a substantial indemnity basis.
4For the reasons that follow, I would allow both of Mr. Brooker's substantive appeals. As a result, all aspects of the judgment at trial, including the costs order, must be set aside.
B. The Facts
(1) The cottage properties
5The properties are situated on the shoreline of Lake Erie, in Norfolk County. The Peppers own lots 2 and 3. They have a cottage on lot 2. Lot 3, to the east, is vacant. Mr. Brooker has a cottage on lot 4.
6The lots are part of a group of properties known as Avalon Park. The cottages sit at the top of a steep descent, bordered by Charlotte Street to the north. Moving south, beyond a bank, the land slopes 90 feet down to the water.
7The Peppers acquired lots 2 and 3 from Ms. Pepper's mother (Mrs. Ruth Pond) in 2002. Mrs. Pond had acquired the lots in 1970 and 1973, respectively. Mr. Brooker purchased his property in 1987.
(2) The boundary line
8Mrs. Pond and the Peppers believed that the boundary between lots 3 and 4 followed a straight line from a maple tree at the north end of the property, and descended down the slope to a willow tree close to the shoreline. Subsequent events would reveal that this was not accurate. The maple-willow line cut across Mr. Brooker's property, quite substantially.
(3) Building on the land
9The Peppers testified that, due to the steep slope of the land, the shoreline was virtually inaccessible from their cottage. In 1982, they started to dump fill onto their property to eventually alter the grade of the land down to the water. The Peppers owned a transport and heavy equipment business and used dump trucks and graders from this business to fill in the land. They estimated that, over the years, they dumped 600-700 truckloads of dirt fill. By 2003, they had constructed a road made of dirt fill that allowed direct access from their cottage to the shore. However, as work on the road continued over the years, it drifted in an easterly direction onto Mr. Brooker's lot, although no one realized it at the time.
10Mr. Brooker disputed that the shoreline had been previously inaccessible from his and the Peppers' cottages. He testified that he and his dog frequently negotiated the slope on his lot (lot 4) to get to the beach. Given the contradictory answers Mr. Brooker gave during his discovery evidence (i.e., he said that he accessed the lake by going further east onto lot 5), the trial judge rejected this aspect of his evidence.
11In 2004, the Peppers started construction on a seawall to protect the land from erosion caused by the tides of Lake Erie. The Peppers were concerned that they would lose the fill they had dumped over the years. Among other things, the Ministry of Natural Resources required that the Peppers obtain Mr. Brooker's consent to perform this work. When the Peppers asked Mr. Brooker if he would consent, he had said that he would think about it. He stalled the Peppers for about a year.
12Mr. Pepper testified that he saw Mr. Brooker outside one day. He approached Mr. Brooker with a partially completed consent form in hand. Mr. Brooker signed the form and the work on the seawall commenced shortly afterwards.
13Mr. Brooker disputed this version of events. He acknowledged that Mr. Pepper asked his consent to build the seawall. But he said that he did not trust the Peppers and claimed to have signed a blank piece of paper on the day he was approached by Mr. Pepper. The trial judge rejected this evidence.
14The seawall project was significant. In fact, two walls were built. The first one is 10 feet high and runs 120 feet along the shoreline. One thousand tons of gabion stone was used in this phase, which was completed in 2005. The second seawall, which is 20 feet long, was built just east of the first one. This was completed in 2009.
15In the early 2000s, the Peppers acquired a set of steps from a car dealership. They stored the stairs north of where the land slopes. In 2010, the Peppers moved the stairs down to the bottom of the road they built. The stairs allow access from the end of the road down to the larger of the two seawalls.
(4) Resolving the boundary issue
16As noted above, the Peppers thought the boundary between lots 3 and 4 ran along the maple-willow line. In an attempt to impugn the Peppers' claim, Mr. Brooker testified that he planted the willow tree near the shoreline in 2000. The trial judge rejected Mr. Brooker's evidence on this point.
17Mr. Brooker also testified that he had previously put stakes along the true property line, as well as erecting two fences: a snow fence starting above the slope and continuing slightly down it, and a green chain-link fence half way down the slope. He testified that the fences must have been destroyed during the Peppers' construction of the road. Again, Mr. Brooker's evidence was rejected.
18In 2012, Mr. Brooker hired a surveyor to ascertain the true boundary between lots 3 and 4. As it turned out, some of the graded work, including the road, the staircase, part of the first seawall and the entirety of the second seawall were on lot 4. This was not disputed at trial.
(5) Use of the completed road
19The Peppers did not prevent other members of the Avalon Park community from using their road and steps to access the shoreline. They erected no fences. Prior to the commencement of legal proceedings with Mr. Brooker, they did not display a "No Trespassing" sign. However, Mr. Pepper placed large rocks at the top of the driveway to stop cars from being driven down the road and becoming stuck.
20Mr. Pepper testified he did not consider people who used the road to access the shoreline to be trespassers. As he testified:
Q: Alright and you say they wouldn't be trespassing. Do you mean that you would not object to neighbours using your property to access to the lake?
A.: No, it would not.
21The issue was addressed again in cross-examination. Mr. Pepper gave the following evidence:
Q.: Do other members of the community use the staircase?
A.: They were welcome to, yes.
Q.: Alright, did you offer any sort of written confirmation that they could, or did you offer anything to anybody?
A.: Yes, I told them all if they want to use anything there, go ahead and use it. Just my family could not use it.
This evidence was confirmed by a neighbour, Jane Curtis, who said that the Peppers "offered us that opportunity".
22The Peppers made no effort to exclude Mr. Brooker from using of the road and steps. Mrs. Pepper said that, while she would exchange pleasantries with Mr. Brooker when she saw him at the supermarket, she never spoke to Mr. Brooker at Avalon Park. Mrs. Pepper also gave the following testimony:
Q.: Did you ever exclude Doug Brooker from your property?
A.: Exclude him from it?
Q.: Did you ever tell him he couldn't stand on your property?
A.: I never did, I never spoke to him, no.
Q.: Alright, so you never spoke to Brooker aside from maybe idle chit chat at the supermarket?
A.: Yes, I said hello to him, I think, yes, that's it.
Q.: So you never had a substantive conversation I should say?
A.: I never did, no.
23Mr. Brooker testified that he was never told that he could not use the disputed lands. He gave the following testimony on this issue:
Q.: Did James Pepper ever tell you that you couldn't access the land -- any part of that land?
A.: No, he didn't.
Q.: Did Ruth Pond ever tell you that you couldn't access any part of that land?
A.: No.
Q.: Did Marion Pepper ever tell you that you couldn't access any part of your land?
A.: No.
24The trial judge did not refer to any of this evidence in his reasons.
(6) Brooker's claim for damages
25Mr. Brooker initially claimed $200,000 in general damages, $50,000 for trespass and punitive damages in the amount of $50,000. This claim represented the diminution in value of Mr. Brooker's property and/or the cost to remove the infringing modifications.
26During his examination for discovery, Mr. Brooker said that he would not attempt to reverse any of the work performed by the Peppers, with the exception of the stairs situated at the end of the roadway. He testified that he wished to have the stairs completely covered or removed because it created a liability for him. Mr. Brooker maintained the same position at trial, claiming that he did not want to create accessibility for others on the shoreline.
27Two real estate appraisers testified about changes to the value of Mr. Brooker's land as a result of the Peppers' modifications. Mr. Brooker's witness calculated that the lost value was roughly $56,000. The Peppers' appraiser testified that the land in question was essentially valueless before the modifications.
C. The Trial Judge's Reasons
28The trial judge found that the Peppers and Mr. Brooker were mutually mistaken about the location of the property line between lots 3 and 4. He concluded that the Peppers occupied the disputed lands through their filling and grading work between 1982 and 2003. The trial judge observed that construction of the seawalls started in 2000. In fact, construction on the seawalls started in 2004, and the stairs were moved to the bottom of the road in 2010.
29In setting out the elements of adverse possession, the trial judge relied heavily on this court's decision in Teis v. Ancaster (Town) (1997), 35 O.R. (3d) 216, [1997] O.J. No. 3512 (C.A.). Specifically, he focused on those passages of the judgment dealing with the concept of "inconsistent use". The trial judge's critical findings are found in para. 34 of his reasons:
I find that Mr. Brooker's failure to say anything to the Peppers over far in excess of the ten year period allows me to draw the inference that he was mistaken with respect to the lot lines of Lot 3 and Lot 4. I find that this mutual mistake allows me to draw the inference that the Peppers intended to occupy parts of Lot 4 in which they built the sea wall and stairs with the intention to exclude all others, including the owner Mr. Brooker. As a result of my findings, I am satisfied that the Peppers have obtained title to the parts of Lot 4 that are outlined in yellow in the survey filed by the Peppers as Exhibit 1. This part of Lot 4 represents the area in which all of the improvements that were made by the Peppers are situated. The Peppers are to obtain a proper survey to provide a metes and bounds description that will allow for the appropriate order to be drafted and registered on title.
(Emphasis added)
30Given his finding that the Peppers' adverse possession claim was made out, the trial judge dismissed Mr. Brooker's claim for trespass. He observed that, in any event, Mr. Brooker was only concerned about removing the stairs.
31Finally, the trial judge awarded partial indemnity costs to the Peppers up to the date of an offer they made under rule 49.10 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and substantial indemnity costs thereafter.
D. Analysis
(1) The adverse possession claim
32All issues raised on this appeal turn on the correctness of the trial judge's application of the law of adverse possession. The elements of adverse possession were recently stated in McClatchie v. Rideau Lakes (Township), [2015] O.J. No. 1737, 2015 ONCA 233, 333 O.A.C. 381, in which Rouleau J.A. said, at paras. 9-11:
To establish adverse possession of certain lands, a claimant must demonstrate that throughout the ten-year adverse possession period, he or she: a) had actual possession of the lands in question; b) had the intention of excluding the true owner from possession; and c) effectively excluded the true owner from possession: Masidon Investments Ltd. v. Ham (1984), 45 O.R. (2d) 563 (C.A.), at p. 567.
An adverse possession claim will fail unless the claimant meets each of the three criteria, and time will begin to run against the true owner of the lands only from the last date when all three are satisfied: Masidon, at p. 567.
To establish actual possession, the acts of possession must be "open, notorious, peaceful, adverse, exclusive, actual and continuous": Teis v. Ancaster (Town) (1997), 35 O.R. (3d) 216 (C.A.), at p. 221. If any one of these elements is missing at any time during the statutory ten-year period, the claim for possessory title will fail: Teis, at p. 221.
(Emphasis added)
33The critical issue is whether the Peppers' modifications to the disputed lands on lot 4 effectively excluded Mr. Brooker from possession of those parts of his property. Although the trial judge found [at para. 34] that the Peppers intended to exclude "all others, including the owner Mr. Brooker", he failed to find that the Peppers had effectively excluded Mr. Brooker from the property. There was no evidence to support the claim that they had effectively excluded him, nor anyone else for that matter. The evidence suggests the opposite. This is fatal to the Peppers' claim.
34As noted in para. 29, above, the trial judge relied heavily on parts of Teis. The issue in Teis was whether the inconsistent use requirement -- a facet of the intention to exclude criterion requiring the claimant's use of the land to be inconsistent with the title holder's intended use -- applies in cases of mutual mistake. After reviewing the development of the concept of inconsistent use, Laskin J.A. held, at p. 224-25 O.R., that it does not. Rather"in cases of mutual mistake the court may reasonably infer, as indeed I infer in this case, that the claimants . . . intended to exclude all others, including the paper title holder": Teis, at pp. 226-27 O.R.
35Applying Teis, the trial judge reasoned [at para. 34] that because the parties were mutually mistaken about the boundary between lots 3 and 4, he could "draw the inference that the Peppers intended to occupy parts of Lot 4 . . . with the intention to exclude all others, including the owner Mr. Brooker".
36This finding was not challenged on appeal. However, I pause to observe that this finding -- an intention to exclude -- appears to be at odds with the evidence. No one, and certainly not Mr. Brooker, was prevented from using the road and steps to access the shoreline. This ought to have led the trial judge to conclude that the Peppers had failed to establish an intention to exclude.
37But even assuming that finding can stand, there exists a more fundamental problem. An intention to exclude the true owner of a property is just one part of the adverse possession equation. An adverse possession claimant must succeed in his or her intention by achieving effective exclusion from the property, even in cases of mutual mistake: Shennan v. Szewczyk, [2010] O.J. No. 4426, 2010 ONCA 679, 96 R.P.R. (4th) 190.
38In Shennan, the court dealt with a property dispute between cottage owners. The trial judge had dismissed a claim for adverse possession. He found that it was not a case of mutual mistake because, over the critical years, nobody really cared where the boundary separating the two cottage properties was situated. On appeal, the trial judge's finding on the mutual mistake issue was affirmed. However, the court addressed the issue of effective exclusion (at para. 20):
In any event, the criterion of effective exclusion of the true owner throughout the 10-year period remains a requirement, even in cases of mutual mistake. We do not read the decisions of this Court in Key [Key v. Latsky (2006), 206 O.A.C. 116] and Teis as reading the "effective exclusion of the true owner" criteria out of the adverse possession requirements in cases involving mutual mistake. Neither case dealt with the effective exclusion requirement, and nothing was said in the reasons of the Court in either case to rule it out in cases of mutual mistake.
(Emphasis added)
The court upheld the trial judge's finding that there was no evidence that the true owners were excluded from the land, noting: "That is what was required."
39The holding in Shennan -- that effective exclusion is an element of adverse possession, even in cases of mutual mistake -- was affirmed in Sumner v. Sullivan, [2014] O.J. No. 5786, 2014 ONCA 869, 49 R.P.R. (5th) 167, at para. 3; and in Barbour v. Bailey, [2016] O.J. No. 3261, 2016 ONCA 98, 66 R.P.R. (5th) 173, at para. 47, leave to appeal to S.C.C. refused [2016] S.C.C.A. No. 139.
40The trial judge failed to make an explicit finding on whether the Peppers effectively excluded Mr. Brooker from the disputed portions of lot 4. It is not otherwise implicit in his reasons. Allowing the Peppers' adverse possession claim without a finding of effective exclusion was an error of law: see Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, at para. 36; and Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., [1997] 1 S.C.R. 748, [1996] S.C.J. No. 116, at para. 39.
41While this conclusion is sufficient to resolve the main issue on appeal, I note that the timing of the Peppers' construction also bars their adverse possession claim over the part of lot 4 on which the seawalls were built.
42As mentioned above, a claimant must meet all three of the adverse possession criteria for a ten-year period. However, that ten-year period cannot run past the date on which a piece of land is registered in the land titles system: Land Titles Act, R.S.O. 1990, c. L.5, s. 51(2); and Real Property Limitations Act, R.S.O. 1990, c. L.15, s. 4. As this court recently explained in Sipsas v. 1299781 Ontario Inc., [2017] O.J. No. 1610, 2017 ONCA 265, at para. 18:
Although title to lands registered in Land Titles cannot be obtained by adverse possession following the registration of title, title may be obtained by adverse possession that can be established for a continuous period of 10 years prior to registration: s. 51(2) of the Land Titles Act, R.S.O. 1990, c. L.5 and s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15.
43Lot 4 was registered in August 2007. Thus, to be successful, the Peppers had to show that all the elements necessary to their adverse possession claim were present for at least ten years, ending in August 2007.
44The landfill work commenced in 1982, well within the limitation period. However, the construction of the seawalls and the relocation of the stairs did not occur until much later, falling short of the ten-year threshold. The Peppers argue that these subsequent improvements were "erected within the confines of the disputed lands already treated by the Peppers as their own".
45This position has some resonance in relation to the relocated stairs, which were essentially an extension of the road built on Mr. Brooker's land. However, I would not apply this line of reasoning to the construction of the seawalls, which were separate projects that extended the incursion of Mr. Brooker's land in a different and significant way. Because construction of the seawalls began in 2004, the time had long since passed for the Peppers to obtain title by adverse possession.
(2) The appropriate remedy
46At the hearing of the appeal, counsel for the Peppers argued that, should the court conclude that the trial judge's reasons were found wanting for failing to address the element of effective exclusion, a new trial should be ordered. Counsel for Mr. Brooker argued that, because there was no evidence to support a finding of effective exclusion, trial judge's order should be set aside and title in the disputed lands restored to Mr. Brooker.
47I would decline to order a new trial. There was no evidence that could support a finding that Mr. Brooker was excluded from his own property. Being good neighbours and members of the Avalon Park community, the Peppers permitted others, including Mr. Brooker, to take advantage of their improvements, designed to create access to the waterfront. Perhaps paradoxically, this generosity proved to be fatal to their adverse possession claim. Comparable adverse possession claims have failed for similar reasons: see, e.g., Shennan; Chen v. Stafford, [2012] O.J. No. 3043, 2012 ONSC 3802, 23 R.P.R. (5th) 101 (S.C.J.); and Sumner v. Sullivan, [2014] O.J. No. 1281, 2014 ONSC 1706, 41 R.P.R. (5th) 189 (S.C.J.). To order a new trial would unfairly provide the Peppers with another opportunity to establish their claim.
48Consequently, I would set aside that portion of the trial judge's amending judgment (dated May 30, 2016) that conveys entitlement in the disputed lands to the Peppers by adverse possession.
(3) The trespass claim
49Based on his findings concerning the adverse possession claim, the trial judge dismissed Mr. Brooker's action in trespass. In light of my conclusion on the adverse possession issue, the dismissal of the trespass action cannot stand. The evidence established the elements of the tort: see Rainaldi et al., Remedies in Tort (Toronto: Carswell, 1987), at pp. 23-11, 23-12. However, I see no reason to depart from the trial judge's conclusion that Mr. Brooker suffered no damages as a result of the Peppers' extensive improvements to both lots. Moreover, counsel for Mr. Brooker abandoned his damages claim at hearing of the appeal. Consequently, I would make no damages award.
(4) Costs awarded at trial
50Given the manner in which I have disposed of the substantive issues on this appeal, the trial judge's costs award against Mr. Brooker must be set aside. In my view, Mr. Brooker is entitled to his costs arising from that proceeding. However, counsel on appeal did not make submissions on this issue.
51If counsel are unable to agree on the costs of trial, I would direct them to file brief written submissions. Counsel for Mr. Brooker may file written submissions no longer than five pages in length, along with a bill of costs, within ten days of the release of this judgment. Counsel for the Peppers will have seven days from the receipt of Mr. Brooker's materials to file submissions no longer than five pages in length.
E. Disposition
52I would therefore allow the appeal and set aside the order below. I would award Mr. Brooker his costs of the appeal in the amount of $10,000, inclusive of disbursements and HST.
Appeal allowed.
End of Document
