Access Self Storage Inc. v. 1321645 Ontario Ltd. et al, 2017 ONSC 6037
CITATION: Access Self Storage Inc. v. 1321645 Ontario Ltd. et al, 2017 ONSC 6037
DIVISIONAL COURT FILE NO.: 603/16 DATE: 20171024
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
ACCESS SELF STORAGE INC. Appellant/Plaintiff
– and –
1321645 ONTARIO LTD., ULI BIERI, 1452432 ONTARIO LIMITED, and 1828700 ONTARIO INC., previously known as 2141992 ONTARIO INC. Respondents/Defendants
COUNSEL: George Limberis, for the Appellant Charles C. Chang, for the Respondent, 1828700 Ontario Inc.
HEARD at Toronto: September 27, 2017
LEDERMAN J.
NATURE OF APPEAL
[1] The plaintiff, Access Self Storage Inc. (“Access”), appeals from the Order of Master Haberman wherein she granted the motion of the defendant, 1828700 Ontario Inc. (“182”), for an order discharging the Certificate of Pending Litigation (the “CPL”). Access had obtained leave for the CPL (the “leave order”) on an ex parte motion, but failed to actually obtain the CPL itself and instead simply registered the leave order on title to 182’s lands. Master Haberman set aside the leave order and discharged any applicable CPL. In so doing, she found that:
(1) Access had made material omissions and material misrepresentations in obtaining the ex parte leave order; and
(2) Access did not have a reasonable claim to an interest to land sufficient to maintain the CPL.
GROUNDS OF APPEAL
[2] Access advances the following grounds of appeal:
(a) The Master exceeded her jurisdiction by not confining herself to the Master’s limited jurisdiction under s. 103 of the Courts of Justice Act (“CJA”). Instead, on the basis of an incomplete evidentiary record, the Master decided the central issue in the lawsuit itself, i.e. the enforceability of Access’s easement;
(b) The Master erred in concluding that Access was guilty of non-disclosure of “material facts” within the meaning of Rule 39.01(6);
(c) The Master erred in her treatment of the decision made by the ex parte Master;
(d) The Master erred in concluding that Access did not have a “reasonable” claim to an interest in the land in question, because its easement was unenforceable;
(e) The Master erred in failing to consider the equities;
(f) The Master had pre-judged 182’s motion to discharge the CPL in its favour and her conduct in this regard during the hearing of the motion gave rise to a reasonable apprehension of bias.
STANDARD OF APPELLATE REVIEW
[3] For pure questions of law, the applicable standard of review is that of correctness. For findings of fact, the applicable standard is that of palpable and overriding error. For questions of mixed fact and law, the applicable standard is also one of palpable and overriding error unless the Master made an error of principle in law independent of her application of the law to the facts, in which case the standard is correctness.
BACKGROUND FACTS
[4] In 1999, Access purchased lands from the defendant 1321645 Ontario Limited (“132”) with a view to developing those lands. Prior to entering into the Agreement of Purchase and Sale with 132, Access knew that there was a problem with the lands in that they were flood prone. The parties recognized that the problem could be remedied, if necessary, by the construction of a water retention pond (the “Storm Water Pond”) on a neighbouring piece of property (“the Property”), also owned by 132. Contemporaneously with entry into the purchase transaction, Access and 132 also entered into a Storm Water Pond Agreement (the “SWPA”) which would provide for the construction and maintenance of a Storm Water Pond on the Property and so ensure that Access’ lands could be fully developed. Under the SWPA, 132 would be responsible for building and maintaining a Storm Water Pond (to which Access would be permitted a right of way) provided that certain conditions were satisfied.
[5] Pursuant to ss. 4 and 5 of the SWPA, 132 granted to Access an easement in the following terms:
1321645 hereby grants to Access and its successors in title and their respective agents, contractors and employees, in perpetuity, a right-of-way or easement in, over and upon the 1321645 Land (i) to use and receive the benefit of the Storm Water Pond and (ii) for the purposes of completing the remedial work, improvements and installations described in Section 5 hereof.
In the event 1321645 shall default in the performance of any of its covenants and obligations hereunder and fails to remedy any such default with twenty (20) after delivery of written notice from Access setting out particulars of such default, Access shall have the right to complete all remedial work, improvements and installations that may be necessary to cure such default and shall have full and unfettered access in, over and upon the 1321645 Lands for such purpose. The entire cost of all such remedial work, improvements and installations, plus an administration charge equal to 20% of such costs, together with interest at the rate of 2% per month, shall forthwith be paid to Access by 1321645 and constitute a lien and charge upon the 1321645 Lands. In such case, Access shall be entitled to register a notice of such lien and charge against title to the 1321645 Lands.
[6] The SWPA (that contained the grant of easement) was registered on title.
[7] Subsequently, 132’s lands were sold twice, the latter sale being to 182.
[8] In 2010, 182 began constructing a medical facility on the Property. It designated the portion of the Property that Access says it could have used for a Storm Water Pond as a parking lot. Access contends that this was a direct violation of Access’ easement and a clear breach of the terms of the SWPA.
[9] Access commenced this action on May 2, 2012. Seven months later and after the close of pleadings, Access brought a motion ex parte for the leave order despite the fact that all parties had legal counsel on record and there was no particular urgency in obtaining a CPL.
[10] After obtaining the leave order and registering it on title to the Property, the action moved slowly resulting in among other things, a status notice and a timetable order in 2014, an administrative dismissal of the action in 2015 and an order setting aside the administrative dismissal and ordering a fresh timetable in 2015.
[11] 182 then brought its motion to discharge the CPL and Master Haberman granted 182’s motion and made an order holding that Access had improperly obtained the ex parte leave order and that it did not have a reasonable claim to an interest in the Property sufficient to maintain the CPL.
DID THE MASTER EXCEED HER JURISDICTION UNDER S. 103 OF THE COURTS OF JUSTICE ACT?
(a) Position of Access
[12] Access submits that the Master exceeded her jurisdiction under s. 103 of the CJA by determining whether the easement was enforceable. Access argues that it had a registered easement on the title of the Property that legally ran with the land. For the Master to go into whether such an easement is enforceable was beyond her jurisdiction, especially when the evidentiary record was not yet complete. Access submits that the Master’s role on a motion to discharge a CPL under s. 103 is not to determine, as a matter of fact, whether the responding party has or does not have “a reasonable claim to the interest in the land”; rather, the issue to be determined is simply whether there is a “triable issue” in this regard: G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 Carswell Ont. 219 (CA) at para. 20. In Transmaris Farms Ltd. v. Sieber, [1999] O.J. No. 300 Justice Blair (as he then was) put it this way at para. 62:
The party seeking the certificate need not prove its case at this point. The test is met where there is sufficient evidence to establish a reasonable claim to an interest in the land based upon the facts, and on which the plaintiff could succeed at trial.
[13] Access submits that rather than following this direction, the Master conducted herself as if she were the trial judge and on the basis of an incomplete factual record and limited legal submissions, attempted to determine the case on its merits. Specifically, s. 4 of the SWPA explicitly granted an easement over the Property. Yet the Master declined to find that Access had at least a “reasonable” claim to an interest in the Property. Instead, she began to investigate the nature, scope and enforceability of the easement. She ultimately concluded that Access did not have a legal interest in the Property, in part, because she had already reached a series of conclusions about the scope and enforceability of the easement. Access submits that these were the very issues that are to be determined by the trial judge and not by the Master under s. 103. Access, therefore, submits that the Master erred in law because she usurped the role of the trial judge.
(b) Analysis
[14] Contrary to the submissions of Access, nowhere in her Reasons does the Master purport to make a binding determination or determine the case on its merits. She was not obliged to accept the mere fact that s. 4 of the SWPA granted an easement as foreclosing her power to inquire as to whether the preconditions to the grant of the easement had been met. In determining the sufficiency of the evidence and whether there was a triable issue, the Master is obliged to make some inquiry into the merits. It is clear that the Master understood her role, for in para. 138 of her Reasons, she stated,
“For all of the above reasons, I can say unequivocally that there is no triable issue here. It is clear that Access does not have a reasonable claim to an interest in any part of 182’s land” (emphasis added).
[15] The Master accordingly was alive to the fact that the issue before her was whether there was a triable issue or sufficient evidence as to a reasonable claim in the interest in land, and therefore, it cannot be said that she exceeded her jurisdiction in her analysis and conclusions in that regard.
[16] This ground of appeal fails.
FAILURE TO DISCLOSE MATERIAL FACTS
(a) Position of Access
[17] The failure to make full and fair disclosure when moving ex parte is, in and of itself, sufficient to discharge a Certificate of Pending Litigation and to set aside the applicable leave order. This is well settled law.
[18] The Master stated this principle at para. 106 of her Reasons and ultimately concluded that Access had obtained its CPL order “on the basis of omissions and material misrepresentations.” (at para. 139).
[19] The non-disclosure or misstatement must be such as to be material to the decision and either would have made the decision doubtful or may have affected the outcome of the motion: Prodigy Graphics Group Inc. v. Fitz-Andrews, 2000 Carswell Ont. 1178 (SCJ) at para. 162.
[20] Access submits that the Master relied on three supposed “non-disclosures” which were not material in nature i.e. they were not facts relevant to the question as to whether Access has an interest in the Property.
[21] The three instances of non-disclosure were:
(1) The failure of Access to advise the ex parte Master that there were differences between Mr. Marelli’s interpretation of the SWPA and “what the agreement actually said”;
(2) The fact that Access interprets the effective scope of the easement as extending to the whole of the Property;
(3) The non-disclosure of a letter from the Toronto Region Conservation Authority (“TRCA”).
[22] As to the first instance of alleged non-disclosure, Access submits that the supposed “differences” are not “facts”. They are just differences of contract interpretation and therefore cannot constitute material facts within the meaning of Rule 39.01 (6).
[23] The second instance has to do with the manner in which Access has interpreted the scope of the easement and in particular its present view that the easement extends to the whole of the Property. Master Haberman suggested that Access’ argument in this regard has changed from the statement in its pleading that was before the ex parte Master to the effect that the easement was just over the portion of the Property that had been set aside for the Storm Water Pond. Master Haberman was of the view that the ex parte Master would not have been aware that Access was not referring to a defined area but that the easement would affect all of the Property. Access submits that its legal position with respect to the placement of the easement is not a fact.
[24] The third instance of supposed non-disclosure is Access’ failure to provide a TRCA letter to the ex parte Master. By way of background, in April 2011, Access sent a Concept Development Application to the TRCA. In its letter of response in June, 2011, the TRCA staff stated that they could not support Access’ plan for large lot development and did not suggest that the construction of a Storm Water Pond would allay their concerns. Access submits that the TRCA letter does not bear on the question of whether or not Access’ easement exists and as such it was not material to the question before the ex parte Master.
(b) Analysis
[25] In deciding whether there were material non-disclosures, the Master was engaged in making a finding of fact or making a finding of mixed fact in law. The question is whether undisclosed facts would have altered the ex parte Master’s approach on the original motion and whether the facts omitted would have made the order doubtful.
[26] Master Haberman found that all three instances of non-disclosure were material in the following way:
(a) At para. 76, she found that had the ex parte Master been aware that Access’s position was that the easement actually affected all of 182’s property rather than what was pleaded, the ex parte Master may well have arrived at a very different conclusion;
(b) Access’ pleading does not make it clear that there is a claim based on trust asserted against 182. Rather, the allegations in the pleading deal with claims directed solely at the other defendants and none of them refer to 182 at all. The Master feared that this lack of clarity may have existed when the matter was presented to the ex parte Master;
(c) More importantly, the Master was concerned about the failure to disclose the letter from TRCA which indicated it was not inclined to permit any form of large lot development on Access’ lands. At para. 90 of her Reasons, the Master stated as follows:
This letter raises serious questions about whether Access could have ever developed their land, even if a storm water pond had been built, and as such, whether they would have ever required 182 or even 132 to construct such a pond on their own land. This is a critical piece of information for the ex parte master to have had, as it raised the question of whether Access appeared to have a reasonable claim to an interest in this land. Unless and until such a pond is built, they have no rights under the TWPA (sic) against successors in title to 132. This was something the master ought to have been given to allow him to appreciate what 182’s argument would have been had they been served. Its omission, is in my view, material.
[27] I do not see that the Master made any palpable and overriding error in coming to her conclusions about material non-disclosure. In particular, it was reasonable for her to view the TRCA letter as being a significant omission of fact, particularly since Access has done nothing in the subsequent five years to pursue the issue raised in the letter and no further application or even plans have been submitted for development purposes. It was reasonable for the Master to conclude that this was non-disclosure of a material fact which would constitute a ground for discharging the CPL.
[28] As to the other instances of omissions before the ex parte Master, whether characterized as merely differences in contract interpretation or just Access’ legal position, and not “facts”, the Master was entitled to consider this lack of candour in the exercise of her discretion in equity in determining whether the CPL should be vacated.
A REASONABLE CLAIM TO AN INTEREST IN THE PROPERTY
(a) Position of Access
[29] Access claimed an interest in the Property primarily on the basis of the easement. The Master rejected this claim, stating at para. 138: “unequivocally … there is no triable issue here”; and concluded that Access does not have a reasonable claim to an interest in any part of 182’s land.
[30] Access submits that the Master based her conclusion on the fact that the location of the easement on the Property had not been defined. Further, Access submits that the Master confused the concepts of positive easement and positive covenant. Access submits that the Master misunderstood and misapplied the law governing easements, in that a specified location is not an essential characteristic of an easement and a positive easement, unlike a positive covenant, may run with the land.
(b) Analysis
[31] The Master interpreted the SWPA correctly, and Access agrees, that 132 was no longer bound to construct the pond and there is nothing in the agreement that requires a successor in title such as 182 to actually construct the pond. The Master concluded that Access waited too long before initiating its project as the land had already been transferred out of 132’s hands. She stated “the SWPA failed to anticipate what would occur if 132 sold or lost the adjoining land before the pond was built. As 132 no longer owns the land, and the burden to construct the pond has not been passed on, access is now too late” (at para. 118).
[32] She also concluded that the action is premature as Access has not done everything listed in s. 2 of the SWPA to obligate anyone to build a pond on the Property. Access was required first, at its sole expense to
(a) improve the water capacity of the adjoining water channel to the east of Access’ lands;
(b) reduce the existing setback lines along the easterly border of its lands by deepening or widening the existing channel;
(c) create water storage/retention relief on the south side of Ellesmere Road;
And even following completion of those steps, that it was still a condition of a SPC Agreement that a Storm Water Pond be constructed.
[33] The grant of the easement appears in s. 4 of the SWPA providing for a right of way or easement over the Property (i) to use and receive the benefit of the Storm Water Pond and (ii) for the purposes of completing the remedial work, improvements and installations described in s. 5 hereof.
[34] However, s. 5 of the SWPA only allows Access to have the right to complete all remedial work, improvements and installations that may be necessary if 132 has defaulted in the performance of any of its covenants and obligations under the SWPA and has failed to remedy any such default within 20 days after delivery of notice from Access sending out particulars of such default. In other words, Access does not have a right to “unfettered access in, over and upon the 132 lands” unless there has been default by 132. There is no suggestion that 132 has defaulted under the SWPA and therefore an entitlement to an easement does not arise.
[35] Further, although it is not necessary to set out the specific dimensions of an easement for it to be enforceable, it at least has to be determinable, by setting out some type of description of the boundaries or dimensions of the easement, which is not the case here (see Mihaylov v. 1165996 Ontario Inc., 2017 ONCA 116 at paras. 93-96).
[36] Because these conditions have not been met, it is irrelevant that Access is prepared to build the pond on 182’s lands at its own expense. There has been no default by 132 under the SWPA and thus no right in Access to either build the pond or to an easement across the Property for that purpose.
[37] Accordingly, it cannot be said that the Master made a palpable and overriding error in concluding that the grant of an easement in s. 4 of the SWPA did not give rise to a triable issue that there is a reasonable claim to an interest in the Property. The Master was not obliged to accept at face value the mere statement in s. 4 of the SWPA that an easement was granted. It is clear from the entire context of the SWPA that the obligation of 132 and grant of an easement was conditional upon a number of pre-conditions set out in the SWPA. None of these required steps has been fulfilled.
CONDUCT OF THE HEARING OF THE MOTION AND THE EQUITIES
[38] First, Access submits that the Master permitted counsel for 182 to make extensive use of the discovery transcripts which had not been referenced in 182’s notice of motion or its factum. However, at no time did Access’s counsel object to the use of the discovery material nor did he seek an adjournment in order to have an opportunity to first consider the material. In fact, he specifically rejected the suggestion that he was seeking an adjournment.
[39] Secondly, Access submits that the Master, having ruled that there had been material non-disclosure pursuant to Rule 39.01(6), stated that she was then entitled to conduct the balance of the hearing of the motion as if it were a hearing de novo. Access submits that the Master erred in law in that respect.
[40] Section 103(6) of the CJA confers a broad discretion upon the court to discharge the CPL upon a demonstration by the defendant in the action in which the CPL was obtained of any of the grounds contained in the subsection, the last of which invites an examination of the equities as between the parties. The Master described it as a hearing de novo; however, under this subsection she was empowered to look at all of the equities in the circumstances.
[41] In fact, Access raises on this appeal, the argument that the Master did not consider the equities and in particular, the equities that favoured Access. In 572383 Ontario Inc. v. Dhunna, 1987 CarswellOnt 551 (Master) at paras. 10-18, Master Donkin set forth a non-exhaustive list of factors that a court might consider when determining whether it would be just and equitable to discharge a CPL. One of those factors is the harm to each party if the CPL is or is not removed.
[42] Master Haberman considered the equities in terms of the harm should the CPL remain on the Property. At para. 129 of her Reasons, she pointed out that 182 would be “precluded from developing any of the property until such time as the easement holder decides where on the property he wants the structure to be erected”. At para. 135, she stated that “a CPL prevents 182 from developing its land without taking into account their rights.” In this regard, 182 was faced with the “amorphous right” to Access’ present claim that the easement covers the entire Property.
[43] Although not basing her decision on other factors, Master Haberman did not think Access would “fare well in the context of either damages as an an alternative form of relief claimed, or delay on the part of Access” in seeking the CPL (see para. 139).
[44] Accordingly, the Master did take into account the equities and found them to be in favour of 182. In doing so, she made no palpable and overriding error.
REASONABLE APPREHENSION OF BIAS
[45] Access submits that the Master exhibited signs of bias in the following ways:
(1) Virtually from the beginning, the Master made it clear that Access’ CPL was undeserved. As such, it is apparent that she had already prejudged her decision;
(2) The Master demonstrated an ongoing pattern of bullying and berating counsel for Access at times when he objected to introduction of certain evidence, and at other times, in his argument to the effect that the motion was not an appeal or a motion to vary or when he referenced unrefuted findings of fact;
(3) Throughout, the Master made it impossible for counsel for Access to make his submissions and her interjections were in a manner that was belligerent and antagonistic.
[46] An examination of the excerpts of transcripts of the exchanges that took place between the Master and counsel for Access reveals that the interjections did not rise to the height of improper conduct as suggested by Access.
[47] The interjections, when viewed cumulatively and objectively, were, as the Court of Appeal said in Tiveron v. Collins, 2017 ONCA 462 at para. 6, designed to clarify “the matters in issue, minimize irrelevancies or the pursuit of peripheral matters, and maintain control of the process.”
[48] A fair reading of the exchanges between the Master and counsel would indicate that the repeated admonishments of Access’ counsel fall within the framework of insisting on proper courtroom procedure and keeping counsel from repeating himself, particularly once the issue had been decided.
[49] None of the behaviour suggested by Access can be characterized as improper or could give rise to a reasonable apprehension of judicial bias.
CONCLUSION
[50] For these reasons, the appeal is dismissed.
[51] If the parties cannot otherwise agree as to costs, they may make written submissions: 182’s submissions within 15 days; Access’ submissions within 15 days thereafter; and reply if any, within 7 days thereafter.
___________________________ Lederman J.
Released: October 24, 2017
CITATION: Access Self Storage Inc. v. 1321645 Ontario Ltd. et al, 2017 ONSC 6037
DIVISIONAL COURT FILE NO.: 603/16 DATE: 20171024
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
ACCESS SELF STORAGE INC. Appellant
– and –
1321645 ONTARIO LTD., ULI BIERI, 1452432 ONTARIO LIMITED, and 1828700 ONTARIO INC., previously known as 2141992 ONTARIO INC. Respondents
REASONS FOR JUDGMENT
Lederman J.
Released: October 24, 2017