1387881 Ontario Inc. v. Ramsay et al. [Indexed as: 1387881 Ontario Inc. v. Ramsay]
77 O.R. (3d) 666
[2005] O.J. No. 2727
Docket: C42118
Court of Appeal for Ontario,
McMurtry C.J.O., Catzman and Lang JJ.A.
June 30, 2005
*Application for leave to appeal to the Supreme Court of
Canada was dismissed with costs to the respondent Anita Joyce
Ramsay March 23, 2006 (McLachlin C.J.C., Binnie and Charron).
Real property -- Easements -- Claim to easement may be kept alive under 1981 amendments to Registry Act not only by registration of notice of claim in prescribed form but also by acknowledgment of or specific referral to claim in registered instrument -- Registry Act, R.S.O. 1990, c. R.20, s. 113.
Real property -- Registration -- Investigation of title -- Expiry of claim -- Claim may be kept alive under 1981 amendments to Registry Act not only by registration of notice of claim in prescribed form but also by acknowledgment of or specific referral to claim in registered instrument -- Registry Act, R.S.O. 1990, c. R.20, s. 113. [page667]
The applicant brought an application for a declaration that the respondents' claims to rights of way over the applicant's land had expired by operation of Part III of the Registry Act. It was the applicant's position that the Registry Amendment Act, 1981, S.O. 1981, c. 17 provided for the expiration of registered claims, including rights of way, 40 years after their first registration, unless the owner of the dominant tenement has registered a notice of claim in the prescribed form under s. 113(2). The application was dismissed. The applicant appealed.
Held, the appeal should be dismissed.
Given the potential implications for individual property rights, s. 113(1) of the Act merits a strict construction. A claim (including an easement) can be kept alive either by registering a notice of claim, or by referencing the claim in an instrument registered within the title search period.
APPEAL from the order of Clark J. (2004), 2004 66338 (ON SC), 71 O.R. (3d) 735, [2004] O.J. No. 5549 (S.C.J.) dismissing an application for a declaration that the respondents' registered rights of way had expired. [page668]
Camrich Developments Inc. v. Ontario Hydro (1993), 1993 8644 (ON CA), 14 O.R. (3d) 410, [1993] O.J. No. 1798, 105 D.L.R. (4th) 1, 34 R.P.R. (2d) 27 (C.A.), affg (1990), 1990 6707 (ON SC), 72 O.R. (2d) 225, [1990] O.J. No. 437, 66 D.L.R. (4th) 606, 11 R.P.R. (2d) 263 (H.C.J.), apld 723046 Ont. Ltd. v. Peoples Jewellers, 1989 CarswellOnt 1963 (H.C.J.); Fire v. Longtin, 1995 75 (SCC), [1995] 4 S.C.R. 3, [1995] S.C.J. No. 83, 25 O.R. (3d) 416n, 128 D.L.R. (4th) 767, affg (1994), 1994 1058 (ON CA), 17 O.R. (3d) 418, [1994] O.J. No. 542, 112 D.L.R. (4th) 34, 1 L.W.R. 227 (C.A.), consd Other cases referred to National Sewer Pipe Ltd. v. Azova Investments Ltd. (1993), 1993 8580 (ON CA), 14 O.R. (3d) 385, [1993] O.J. No. 1797, 105 D.L.R. (4th) 12, 34 R.P.R. (2d) 1 (C.A.); Ontario Hydro v. Tkach (1992), 1992 7733 (ON CA), 10 O.R. (3d) 257, [1992] O.J. No. 2001, 95 D.L.R. (4th) 18, 28 R.P.R. (2d) 1 (C.A.) Statutes referred to Easement Statute Law Amendment Act, 1990, S.O. 1990, c. 4 Registry Act, R.S.O. 1980, c. 445, ss. 105 [as am.], 106 [as am.] Registry Act, R.S.O. 1990, c. R.20, ss. 1 "instrument""land" [as am.], 111, 112, 113, 114, 115 Registry Amendment Act, 1981, S.O. 1981, c. 17 The Investigation of Titles Act, 1929, S.O. 1929, c. 41 The Registry Amendment Act, 1966, S.O. 1966, c. 136 Authorities referred to Bucknall, B. et al."Title Searching under the Ontario Registry Act after Fire v. Longtin: A Consensus Position" (1996), 1 R.P.R. (3d) 173 Langan, P. St. J., Maxwell on Interpretation of Statutes, 12th ed. (Toronto: Carswell, 1969) Lem, J.W."The Ontario Court of Appeal Forty-Year Rule Tetralogy, A Case Comment on Fire v. Longtin" (1994), 38 R.P.R. (2d) 184 Lem, J.W., and C.R. Carter, Annotations of 1387881 Ontario Inc. v. Ramsay, (2005), 2004 66338 (ON SC), 24 R.P.R. (4th) 37 Sullivan, R., Sullivan and Driedger on the Construction of Statutes, 4th ed. (Markham: Butterworths, 2002) Wood, J.R."Valid Title Under the Ontario Registry System" (1995), 45 R.P.R. (2d) 35
Donald J. Lange, for appellant. Andrew Mae and Don Perry, for respondents.
The judgment of the court was delivered by
[1] LANG J.A.:-- This case raises the question of how to preserve a registered right of way from expiring under the registry system. It comes before this court on appeal from Clark J., who refused to declare that the respondents' registered rights of way over the appellant's land had expired. For the reasons that follow, I would dismiss the appeal.
[2] The Registry Amendment Act, 1981, S.O. 1981, c. 17 (the "1981 Amendment Act" or the "1981 Amendments") amended Part III of what is now the Registry Act, R.S.O. 1990, c. R.20, as amended (the "Act"). The appellant argues that the 1981 Amendment Act provides for the expiration of registered claims, including rights of way, 40 years after their first registration, unless the owner of the dominant tenement has registered a notice of claim in the prescribed form under s. 113(2). The appellant also argues that the respondents' rights of way are not excepted by s. 113(5)(a) or (b). The respondents argue that the 1981 Amendment Act does not extinguish their rights of way, which, in any event, are excepted from the application of Part III by s. 113(5) of the Act.
Facts
[3] There is no dispute over the facts. The appellant 1387881 Ontario Inc. ("138") purchased a Muskoka property in 2000. 138's chain of title can be traced back through other conveyances of the property registered in 1992, 1987 and 1966, to the 1949 deed that created the rights of way. Each conveyance stated that the purchaser, the owner of the servient tenement, took title subject to a right of way in favour of the owners of the dominant tenements, currently the respondents.
[4] Anita Joyce Ramsay, one of the respondents, claims a right of way referenced in the conveyance of her property to her in 1986. Ms. Ramsay's chain of title can be traced back through earlier conveyances in 1970, 1968 and 1952, to the 1941 deed that first referenced the right of way. Jamie Ann Morrison claims a right of way first referenced in a 1941 deed, which was also referenced in conveyances in 1959, 1969 and 1976; and Linda Johnston claims a right of way first referenced in a 1945 deed and further referenced in conveyances in 1947 and 1986. None of the respondents ever registered a notice of claim in the prescribed form against 138's title.
[5] In August 2003, 138 brought this application seeking a declaration that the respondents' claims had expired by operation of [page669] Part III of the Act. In September 2003, 138 registered a "correcting" deed, which deleted any reference to the respondents' claims and specified that the deed was "being registered as a conflicting claim to preclude said parties from registering Notice of Claims pursuant to section 113(2)(b) of Part III of the Registry Act, R.S.O. 1990, c. R.20, as amended".
The Decision Under Appeal
[6] The application judge framed the issue as "whether a 'claim', which as defined in s. 111 of the Registry Act, includes an easement, can be kept alive only by registration of 'a notice of claim in the prescribed form' or whether a notice of claim may be effected by the registration of an instrument, such as a deed".
[7] The application judge decided that a claim could be kept alive either by registering a notice of claim, or by referencing the claim in a registered instrument. In so concluding, he noted that the Act's "definition of notice period indicates that an interest in land runs for forty years from the registration of either an instrument or a notice of claim". He held that it was "relatively unimportant" to the objectives of the Act whether notice of a claim was achieved by reference in a deed registered within the title search period or by registration of a prescribed notice of claim. As the claims in question were clearly set out in documents registered within the 40-year period, a person examining title would have notice of those claims. Further, in his view, the use of the permissive in the wording of s. 113 -- a person "may" register a claim -- supported his conclusion that another method of preservation was available under s. 111: reference to the claim in a registered instrument. In so holding, he r elied on 723046 Ont. Ltd. v. Peoples Jewellers Ltd., 1989 CarswellOnt 1963 (H.C.J.) for the principle that the registration of a notice of claim in the prescribed form is only one of two ways of preserving a claim [See Note 1 at the end of the document].
Issue
[8] This appeal raises the primary issue of whether a registered easement can be preserved under Part III of the Act, not only by registering a notice of claim in the prescribed form, but also by setting forth the claim in an instrument registered within the title search period. As I find that it can, it is unnecessary to consider the secondary issue of actual notice. It is only necessary [page670] to consider the exceptions set out in ss. 113(5)(a)(iv) and (6) to the extent that they inform the primary issue.
The Competing Interpretations
[9] The resolution of this issue depends on the interpretation given to the repeal of s. 106 of the 1980 Act [Registry Act, R.S.O. 1980, c. 445] and its replacement with s. 113(1) of the current Act. Section 106 provided:
106(1) A claim that has been in existence for longer than forty years does not affect land to which this Act applies unless the claim has been acknowledged or specifically referred to or contained in an instrument or a notice under this Part or under The Investigation of Titles Act, being chapter 193 of the Revised Statutes of Ontario, 1960, or any predecessor thereof, registered against the land within the forty-year period.
[10] Section 113(1) provides:
113(1) A claim that is still in existence on the last day of the notice period expires at the end of that day unless a notice of claim has been registered.
[11] Thus, under s. 106, a claim, including a right of way, would not expire if it was acknowledged or specifically referred to in a registered instrument. I refer to this pre- 1981 method of claims preservation as the acknowledgment method of claims preservation.
[12] In contrast, while on first reading, s. 113(1) appears to allow claims to be preserved only by filing a notice of claim, the respondents argue that a proper interpretation of s. 113(1) depends not only on its wording, but also on the Act's definition of notice period. The respondents argue that s. 113(1) only causes the expiration of a "claim ... in existence on the last day of the notice period". The "notice period" ends 40 years after the "registration of an instrument or [a] notice of claim" (s. 111(1)) and a claim includes an interest "set forth" in an instrument (s. 111(1)). Thus, the respondents argue that a claim is also preserved if set forth in an instrument registered within the 40-year period. I will review this argument in more detail later and refer to it as the "notice period" argument.
The Registry Act
[13] The following are the relevant provisions of the 1990 Act:
- In this Act"instrument" includes every instrument whereby title to land in Ontario may be transferred, disposed of, charged, encumbered or affected in any other way ...;
"land" means land, tenements, hereditaments and appurtenances and any estate or interest therein;
. . . . . [page671]
Part III INVESTIGATION OF TITLES
111(1) In this Part"claim" means a right, title, interest, claim, or demand of any kind or nature whatsoever affecting land set forth in, based upon or arising out of a registered instrument, and, without limiting the generality of the foregoing, includes a mortgage, lien, easement, agreement, contract, option, charge, annuity, lease, dower right, and restriction as to the use of land or other encumbrance affecting land;
"notice of claim" means a notice of claim registered under subsection 113(2) and includes a notice registered under a predecessor of this Part or under The Investigation of Titles Act, being chapter 193 of the Revised Statutes of Ontario, 1960, or a predecessor thereof;
"notice period" means the period ending on the day forty years after the day of the registration of an instrument or a notice of claim, as the case may be;
"owner" means a person, other than a lessee or a mortgagee, entitled to a freehold or other estate or interest in land at law or in equity, in possession, in futurity or in expectancy;
"title search period" means the period of forty years described in subsection 112(1).
(2) A claim referred to in clause 113(5)(a) or (b) is not confined to a claim under a registered instrument.
112(1) A person dealing with land shall not be required to show that the person is lawfully entitled to the land as owner thereof through a good and sufficient chain of title during a period greater than the forty years immediately preceding the day of such dealing, except in respect of a claim referred to in subsection 113(5).
(2) Where there has been no conveyance, other than a mortgage, of the freehold estate registered within the title search period, the chain of title commences with the conveyance of the freehold estate, other than a mortgage, most recently registered before the commencement of the title search period.
(3) A chain of title does not depend upon and is not affected by any instrument registered before the commencement of the title search period except,
(a) an instrument that, under subsection (2), commences the chain of title;
(b) an instrument in respect of a claim for which a valid and subsisting notice of claim was registered during the title search period; and
(c) an instrument in relation to any claim referred to in subsection 113(5).
113(1) A claim that is still in existence on the last day of the notice period expires at the end of that day unless a notice of claim has been registered.
(2) A person having a claim that is not barred by this Part, or a person on that person's behalf, may register a notice of claim in the prescribed form,
(a) at any time within the notice period; or [page672]
(b) at any time after the expiration of the notice period but before the registration of any conflicting claim.
(3) A notice of claim may be renewed from time to time by the registration of a notice of claim in accordance with subsection (2).
(4) Subject to subsection (7), when a notice of claim has been registered, the claim affects the land for the notice period of the notice of claim.
(5) This Part does not apply to,
(a) a claim,
(iv) of a person to an unregistered right of way or other easement or right that the person is openly enjoying and using;
(b) a claim arising under any Act; or
(6) Subsection (1) does not apply to a claim to a freehold estate in land or an equity of redemption in land by a person continuously shown by the abstract index for the land as being so entitled for more than forty years as long as the person is so shown.
(7) The registration of a notice of claim does not validate or extend a claim that is invalid or that has expired other than as a result of subsection (1).
114(8) A notice of claim in respect of a public utility easement of a municipality or an easement of the Ministry of Government Services registered before the 31st day of December, 1999 is as effective as if it had been registered on the 31st day of July, 1981.
115(2) This Part applies to every claim and notice of claim, whether registered before or after the 1st day of August, 1981.
(Emphasis added)
Analysis
- The legislative and jurisprudential background
[14] The Investigation of Titles Act, 1929, S.O. 1929, c. 41 (the "1929 Act"), first enacted to codify the common law on title searches, became Part III of the Registry Act by virtue of The Registry Amendment Act, 1966, S.O. 1966, c. 136 (the "1966 Act") and, until the 1981 Amendments, continued relatively unchanged.
[15] Throughout its incarnations, the legislation has provided for both a 40-year title search period and a 40-year expiry period. Although this case primarily involves the expiry period, the relationship between the two periods is critical because although [page673] they have different purposes, the two periods are intended to complement each other [See Note 2 at the end of the document].
[16] Although both the 1929 and the 1966 Acts purported to confine the title search period to 40 years (counted backward from the date of dealing), cautious practitioners continued to search for a root of title before that period. (See Ontario Hydro v. Tkach (1992), 1992 7733 (ON CA), 10 O.R. (3d) 257, [1992] O.J. No. 2001 (C.A.), at p. 261 O.R.) The 1981 Amendments, however, using very specific language, unequivocally established that it was unnecessary to search for an earlier root of title (s. 105, now s. 112).
[17] The expiry period, also called the registration or notice period, is the period of time after which affected claims expire. While the expiry period runs forward in time for 40 years from the date of registration of a claim, the title search period runs backward in time from the date of dealing for 40 years. While the expiry period invalidates claims not renewed within its period, the title search period deems irrelevant any claims registered before its period. Thus, the expiry period and the title search period, while different, complement each other.
[18] Whether the 1981 Amendments were retrospective in application was decided in Fire v. Longtin (1994), 1994 1058 (ON CA), 17 O.R. (3d) 418, [1994] O.J. No. 542 (C.A.), affd 1995 75 (SCC), [1995] 4 S.C.R. 3, [1995] S.C.J. No. 83, where McKinlay J.A. held both that the amendments constrained the title search period to 40 years and applied retrospectively. When the Supreme Court of Canada adopted McKinlay J.A.'s reasons, it effectively overruled two other decisions of this court that had come to a contrary conclusion on retrospectivity: Camrich Developments Inc. v. Ontario Hydro (1990), 1990 6707 (ON SC), 72 O.R. (2d) 225, [1990] O.J. No. 437 (H.C.J.), at p. 235 O.R., affd (1993), 1993 8644 (ON CA), 14 O.R. (3d) 410, [1993] O.J. No. 1798 (C.A.) and National Sewer Pipe Ltd. v. Azova Investments Ltd. (1993), 1993 8580 (ON CA), 14 O.R. (3d) 385, [1993] O.J. No. 1797 (C.A.). While retrospectivity and the title search period were thus settled, Fire did not address another issue raised in Camrich [See Note 3 at the end of the document]: the interpretation of the expiry period.
[19] The application of the title search period and the expiry period is apparent from the facts in Camrich. In 1934, Ontario [page674] Hydro obtained the fee to a 30-foot wide strip of land running across a larger parcel. In 1954, the county registered a by-law expropriating the larger parcel. That by-law did not refer to the Hydro strip in the body of the by-law but did show the strip as a dotted line on a sketch attached to the by-law. Subsequently, the county transferred the larger parcel to the township, which in turn transferred it to new owners. Neither of these transfers excluded the strip of land. The new owners of the larger parcel then applied for a declaration that Hydro had no interest in the strip. Since the 1934 conveyance of the strip to Hydro fell outside the 1950-90 title search period, Henry J. held that conveyance could not affect the title of the new owners.
[20] Unsuccessful on its argument based on the title search period, Hydro argued that its claim was preserved under the expiry period. After concluding that the 1981 repeal of s. 106 eliminated the acknowledgement method of claims preservation, Henry J. considered and rejected Hydro's alternative argument that its interest in the strip was preserved because it was "set forth" in the by-law, which was an "instrument" (at p. 238 O.R.):
I am of the opinion that the Ontario Hydro claim to the strip is not one that is "set forth" in the 1954 instruments. The definition of "claim", as it has appeared throughout in the Investigation of Titles Act in 1929 and thereafter in Part III of the Registry Act, defines claim as:
... a right, title, interest, claim or demand any kind or nature whatsoever affecting land set forth in, based upon or arising out of a registered instrument, ...
That language is not apt to describe the existing Hydro "right of way" over the subject lands in the 1954 instruments. The definition, in my opinion, refers to an instrument that creates or asserts the interest; this is to be contrasted with the language of the original section imposing the limitation period on claims over 40 years in existence where the claim was preserved, if it was "acknowledged or specifically referred to or contained [in] an instrument" registered within the 40-year period.
[21] In his view, as the dotted line on the sketch neither created nor asserted an interest, it could not preserve Hydro's claim. Thus, Henry J. concluded that the 1981 Act provided only one method to preserve a claim, registration of a notice of claim.
[22] Henry J.'s interpretation was attractive because it was consistent with the legislative intention to confine the title search period to 40 years and, thereby, to reduce the complexity and cost of land transactions. It would also resolve the indefinite continuation on title of claims that had fallen into disuse.
[23] However, on appeal, Finlayson J.A. rejected Henry J.'s conclusion. Instead, in considering Hydro's alternative notice period method of claims preservation, he agreed with Peoples Jewellers, [page675] where Desmarais J. held that a claim could be preserved, not only by registration of a notice of claim, but also by setting a claim forth in an instrument registered within the notice period.
[24] In agreeing with Peoples Jewellers, Finlayson J.A. must be taken to have rejected Henry J.'s conclusion that a claim was only "set forth" in an instrument if it created or asserted an interest. Instead, he accepted the position taken in Peoples Jewellers that a claim is preserved "if the claim is referred to in any instrument registered within the notice period ..." (Camrich, supra, at p. 419 O.R.). Therefore, Finlayson J.A. held that a reference set forth in an instrument is sufficient to preserve a claim. Osborne J.A. agreed that the appeal should be dismissed for the reasons given by Finlayson J.A., although he dissented on the issue of retrospectivity.
[25] Thus, Camrich continues to stand for the principle that a claim can be preserved in two ways: by the registration of a notice of claim or by setting forth a "true acknowledgement" (not a dotted line on an attached sketch) of a claim in an instrument registered within the notice period. However, as debate continues on this point (see footnote 3), I will turn to a statutory analysis of the expiry provisions.
[26] In my view, Finlayson J.A.'s interpretation in Camrich is consistent with a statutory analysis guided by the modern rule of statutory interpretation:
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
(Sullivan and Driedger on the Construction of Statutes, 4th ed. (Markham: Butterworths, 2002) at p. 1).
[27] I say this for three reasons. First, the definition of "notice period" in the 1981 Amended Act raises an ambiguity as to the interpretation of s. 113(1), an ambiguity that ought to be resolved in favour of preserving property rights that individuals have relied on. Second, the Camrich interpretation ensures that the title search period and the expiry period work together. Third, allowing for an alternative method of claims preservation is consistent with the overall purpose of the legislation.
- The definition of notice period
[28] Turning to the first point, it is helpful to consider the nature of a right of way. A right of way is first created when the servient tenement owner grants the dominant tenement owner [page676] the right to use part of the dominant tenement. After that original transfer, however, it is the owner of the dominant tenement who transfers the right of way to the next owner of the dominant tenement by providing a deed to the dominant tenement "together with" a right of way over the servient tenement. Since the right of way is registered on the title of both the dominant and servient tenement, a purchaser of the dominant tenement must search titles to both the dominant and servient tenements to be satisfied of the existence of the right of way. Titles to both tenements are affected by the right of way.
[29] Mindful of the nature of a right of way, I turn to the specific provisions in issue. The appellant argues that the legislature must be taken to have intended a change when it eliminated the acknowledgement method of claims preservation from the 1981 Act. Indeed, such changes in legislative language are presumed to signal a legislative intention to effect a change in purpose: see Sullivan and Driedger, supra, at p. 472.
[30] However, the legislature did not simply eliminate the acknowledgement language. Instead, it chose to replace s. 106 with s. 113(1), a completely different provision. Section 106 only affected "[a] claim that has been in existence for longer than forty years ...", thus the original grant of right of way must have been given at least 40 years earlier.
[31] In contrast, s. 113(1) offers a different reference point when it addresses "[a] claim that is still in existence on the last day of the notice period ...". To determine whether a claim was still in existence on the last day of the notice period, one must look first at the meaning of the term "notice period", which is defined as "the period ending on the day forty years after the day of the registration of an instrument or a notice of claim, as the case may be" (emphasis added). In this case, since no notice of claim was registered, the notice period must end 40 years after the registration of an instrument.
[32] An instrument "includes every instrument whereby title to land in Ontario may be transferred, disposed of, charged, encumbered or affected in any other way ..." (emphasis added). Thus, an instrument is not only one that initially created or asserted an interest, but includes an instrument that transfers title or affects title.
[33] In this case, the last deed transferring the fee to the servient tenement was an instrument that affected the land: it transferred the fee in the dominant tenement "subject to" the right of way. In the result, the claim, being one "set forth in, based upon or arising from a registered instrument" was preserved for 40 years and it would be unnecessary to register a notice of claim until 40 years after the registration of that last instrument. [page677]
[34] I find support for this interpretation in a consideration of the impact of the alternative interpretation. If the appellant's argument is correct, rights of way and other claims will have expired, even though they have been set forth in intervening transfers within the title search period. In many cases, those claims will have expired upon the enactment of the 1981 Amendments.
[35] Thus, construed as argued by the appellants, s. 113(1) seriously affects individual property rights and would result in obviously unfair results for those who thought they were obtaining a right of way when they obtained the fee to the dominant tenement. Where the right of way is set forth on both titles within the title search period, owners and professionals have generally accepted, and apparently continue to accept, that this is sufficient to preserve the right of way. If rights of way are found to have expired, purchasers may well have received property that is significantly different, and of less value than that for which they contracted and anticipated at the time of their purchase.
[36] At the same time, the purchaser of the servient tenement, having bargained for property knowing his or her neighbours thought that property was subject to an easement in their favour, would receive a windfall at the expense of the dominant tenement, even though the servient tenement had taken ownership "subject to" the right of way.
[37] Given the potential implications for individual property rights, s. 113(1) merits a strict construction. As P. St. J. Langan states in Maxwell on Interpretation of Statutes, 12th ed. (Toronto: Carswell, 1969): "Statutes which encroach on the rights of the subject, whether as regards person or property, are subject to a strict construction in the same way as penal Acts" (pp. 251-52). See also Sullivan and Driedger, supra, at pp. 399-403.
[38] Further, if the legislature intended the deletion of the acknowledgement language to cause the immediate expiry of affected rights of way, it doubtless would have enacted a transition provision to allow the citizens of this province to take action to avoid the expiry of their rights of way, as it did for public easements (see Easement Statute Law Amendment Act, 1990, S.O. 1990, c. 4). Moreover, if the legislature intended the result argued by the appellant, it would not have drafted s. 113(1) to incorporate the definition of notice period, a definition that provides an alternative method of claims preservation.
[39] To hold in 2005 that those rights of way have expired would create significant problems throughout the province. For the last 24 years, both property owners and lawyers have worked under the assumption that their rights have been preserved. It is unlikely that the legislature intended such a significant and dramatic shift [page678] in the land registry system to occur from such a slight change in language. Rather, to effect a change of this magnitude would require clear and explicit language.
[40] On this point, the appellants argue that any potential unfairness can be saved through the operation of s. 113(5)(a) (iv), which excepts "an unregistered right of way or other easement or right that the person is openly enjoying and using". The intent of that exception, however, is not clear. It appears that, first, to be excepted, the claim must be a right of way or other right. Second, if that requirement is satisfied, the claimant will be required to establish current usage. This combination of traditional easement law with current usage raises complex considerations. As a result, it is not obvious that this provision would alleviate potential unfairness.
- The title search period and the expiry period
[41] On the second point, support for the existence of an alternative method of claims preservation can be drawn from the legislative intent that the title search period and the expiry period are complementary and should work together. In this case, allowing for claims preservation only by a registered notice of claim would interfere with the complementary application of the two periods.
[42] Assume that A sells the dominant tenement, together with a right of way to B. Upon purchasing the dominant tenement, B would have received a deed to the fee to the dominant tenement and to the right of way over the servient tenement. Ten years later B sells the dominant tenement, along with the right of way, to C.
[43] When A sold the dominant tenement, together with the right of way, A was "a person dealing with land", indeed, with both interests in the land (the fee and the right of way). Thus, A has "an interest in land" (s. 112(1)) because a right of way is an "interest in land" (s. 111(1) and s. 1). Further, the right of way was not merely something referred to in passing; but instead, the right of way was an interest in the land that the deed purported to transfer. Because there was a valid transfer (from A to B) within the title search period, C can be confident that she obtained good title without going outside the 40-year search period.
[44] Contrast this with the application of the expiry period to the same situation. The appellant argues, consistent with the position taken by Henry J. at trial in Camrich, that the inclusion of the right of way in the deed does not extend the expiry period because that inclusion does not amount to the creation or assertion of an interest within Henry J.'s definition of "set forth" an interest. On this reasoning, it is possible for the right of way to [page679] expire despite the fact that it appears in an instrument registered within the title search period.
[45] If that interpretation is right, C would have to go outside the search period to determine when the instrument first "creating" the right was registered and count forward from that point to determine when the right of way would expire. This approach to the expiry provisions would undermine the title search period so clearly established by the legislature. This makes no sense. Both the title search period and the expiry period must work together.
- The overall purpose of the legislation
[46] On the third point, the Act seeks to promote commercial certainty; to simplify the title search process; and, to this end, to eliminate stale claims. These objectives are not frustrated by allowing more than one method of claims preservation. Limiting claims preservation to a registered notice of claim would eliminate a great number of claims, some of which may be stale claims, but it would also eliminate claims still in active use.
[47] Furthermore, holding that these rights of way have not expired is not inconsistent with the purpose of the Act because it would cause no detrimental effect to title searching or commercial certainty in this province. Everything, including the rights of way, is on the register within the 40-year search period and is apparent to all. It is unlikely that the legislature intended to enact legislation to eliminate rights of way that have fallen into disuse at the expense of property owners who continue to use their rights of way on an ongoing basis. Further, the legislature could address directly any question of registered rights of way no longer in use.
[48] Finally, the viability of a 40-year search period is clearly the purpose of the 1981 Amendment Act. An interpretation that would invalidate claims that are clearly described and apparent within the 40-year period search is one to be accepted only if the statute effects that result in the clearest of terms. The 1981 Amendment Act does not.
Conclusion
[49] For these reasons, I conclude that the respondents' rights of way had not expired. Given that conclusion, it is not necessary to consider the issues surrounding actual notice or to determine the ramifications of s. 113(5)(a)(iv). With this result, the claims of landowners throughout the province are preserved without disturbing the overall purpose of the Act. Accordingly, I would dismiss the appeal. [page680]
Costs
[50] The parties may make brief written submissions on costs through the court office. All such submissions may be made on a schedule to be agreed upon by counsel and to be completed by August 31, 2005.
Appeal dismissed.
Notes
Note 1: For a discussion of the application judge's reasoning, see the different positions taken by leading real estate practitioners Jeffrey W. Lem and Craig R. Carter in their annotations to the reported decision (2005), 2004 66338 (ON SC), 24 R.P.R. (4th) 37.
Note 2: For a discussion of this relationship see John R. Wood"Valid Title Under the Ontario Registry System" (1995), 45 R.P.R. (2d) 35 at 45-48.
Note 3: After Fire, debate did continue about the extent of the continued applicability of Camrich, particularly with respect to the expiry provisions of the Act. For different perspectives on these issues see: Jeffrey W. Lem"The Ontario Court of Appeal Forty-Year Rule Tetralogy, A Case Comment on Fire v. Longtin" (1994), 38 R.P.R. (2d) 184 and Brian Bucknall et al. "Title Searching under the Ontario Registry Act after Fire v. Longtin: A Consensus Position" (1996), 1 R.P.R. (3d) 173.