DATE: 20060112

DOCKET: C42961

COURT OF APPEAL FOR ONTARIO

ROSENBERG, GOUDGE AND FELDMAN JJ.A.

B E T W E E N :

CONNIE KEY

Izaak De Rijcke for the appellants

Applicant (Counter-Respondent)

(Respondent in Appeal))

• and -

JONATHAN LATSKY and ELAYNA LATSKY

Donald Posluns for the respondent

Respondents (Counter-Applicants)

(Appellants in Appeal))

Heard: September 7, 2005

On appeal from the judgment of Justice Robert M. Thompson of the Superior Court of Justice dated December 17, 2004.

GOUDGE J.A.:

[1] This is an appeal from the judgment of Thompson J. finding that the respondent was the owner through adverse possession of Parts 1 and 2 as shown on a Plan of Survey dated February 28, 2002, and ordering the appellants to convey them to the respondent. The application judge awarded costs to the respondent fixed at $18,267.96. He also made several corollary orders which are not germane to this appeal. The appellants’ attack is on the finding of adverse possession and the costs order.

[2] For the reasons that follow I would dismiss the appeal.

[3] The factual background to this dispute began on February 11, 1957 when Dr. Daniel Cappon and Dr. James Key purchased approximately 124 acres of land in the County of Grey as a recreational property.

[4] There was a farmhouse on the land, which both the Cappon and Key families used. By damming a small stream, the doctors created a pond two-thirds of the way back towards the south end of their property, and constructed a road to it from the farmhouse.

[5] In 1960 they decided to sever the property. Dr. Key became the owner of the westerly part of the property on which the farmhouse stood. Dr. Cappon acquired the easterly part of the property. In order to register the two parcels it was necessary to have a metes and bounds description of each. W. N. Wildman was therefore retained to prepare a survey. When he completed his fieldwork, Mr. Wildman reduced his notes to a survey sketch which shows the boundary between the two parcels as dividing the pond more or less equally between them. He provided the sketch to Dr. Cappon and Dr. Key along with a metes and bounds description of each parcel, and placed survey monuments on the property corresponding to that description.

[6] Life went on without apparent dispute about the location of the boundary until 2002, when the appellants had a survey prepared prior to purchasing the easterly parcel from Dr. Cappon’s estate. This caused the respondent, Dr. Key’s widow and his successor in title, to have her own survey prepared.

[7] As a result, it became clear that the boundary line on the Wildman survey sketch did not correspond to the boundary line described in the metes and bounds description. The latter placed significantly more than half the pond on the Cappon parcel and placed the southerly part of the road back to the pond on the Cappon parcel rather than the Key parcel.

[8] In the respondent’s view, this was contrary to the shared understanding of both families for four decades, and her claim for adverse possession resulted.

[9] The appellants do not assert that they bought without actual notice of the respondent’s claim and indeed the record leaves the clear inference that they were fully aware of it before they purchased. The matter proceeded on the basis that the appellants are in no different position than Dr. Cappon would have been had the dispute arisen before his death.

[10] The application judge made several central findings of fact as follows:

(a) when the original property was severed, Dr. Cappon and Dr. Key agreed that the pond they had constructed would be divided equally between them.

(b) Dr. Cappon and Dr. Key did not look to the survey monuments for the boundary between their two parcels. Rather, for the four decades after severance, both families conducted their affairs in accordance with the belief that the boundary line set out in the Wildman survey sketch represented the boundary between their properties.

(c) Both were of the belief that the roadway back to the pond lay entirely on the Key property.

(d) The Key family expressly granted the Cappon family permission to use the roadway to access the pond.

(e) The maintenance of the dam and the spillway associated with it was primarily done by the Key family over the last 23 years or so.

[11] The application judge concluded that for all these years the parties were mutually mistaken as to the true ownership of the land in question, that the test of inconsistent use is inapplicable in these circumstances and that the respondent’s claim of adverse possession was established.

[12] He subsequently received written submissions on costs and then simply awarded costs to the respondent in the amount of $18,267.96.

ANALYSIS

[13] The appellants mount three arguments against the finding of adverse possession.

[14] First, they say that there was no evidence to support the key findings of fact made by the application judge. I do not agree.

[15] There was affidavit evidence that the doctors believed they divided the pond roughly equally. The 1960 survey sketch also supports this conclusion, and the equality with which the two families approached the use of the pond is consistent with it. There was significant evidence that both families understood and accepted that the original roadway back to the pond lay entirely on Dr. Key’s property and therefore necessarily they considered the boundary to be as it appeared on the 1960 survey sketch rather than as marked by the survey monuments. The correspondence between the doctors that is contained in the record makes clear that Dr. Cappon accepted that he needed Dr. Key’s permission before his family could use the roadway, and equally that Dr. Key gave that permission. And the respondent’s affidavit provides an ample basis for the finding that the Key family has been principally responsible for maintaining the dam and the spillway.

[16] Thus I do not accept that the application judge made key findings of fact for which there was no evidence. Moreover, those findings deserve deference in this court. I would therefore not give effect to the appellant’s first argument.

[17] Second, the appellants say that the application judge erred by disregarding the test of inconsistent use in finding adverse possession. They argue that even in a case of mutual mistake, a successful claimant must exclude the paper title holder and demonstrate open notorious and continuous use inconsistent with the latter’s intended use.

[18] Adverse possession, even in a case of mutual mistake, requires open notorious and continuous possession. While the trial judge did not make an explicit finding of this, there was evidence of it that the appellants did not contest. As to their argument that inconsistent use was also required, Teis v. Ancanster (Town), (1997) 1997 1688 (ON CA), 35 O.R. (3d) 216 (Ont. C.A.) is a complete answer. Following Moldaver J. (as he then was) in Wood v. Gateway of Uxbridge Properties Inc. (1990), 1990 6786 (ON SC), 75 O.R. (2d) 769, Laskin J.A. found that the notion of inconsistent use has no application to cases of mutual mistake where the true owner and the claimant both mistakenly believe that the claimant owns the disputed land. Laskin J.A. put it this way at p. 224:

The test of inconsistent use focuses on the intention of the owner or paper title holder, not on the intention of the claimant. It is a controversial element of an adverse possession claim even when the claimant knowingly trespasses on the owner’s land: see Ziff, supra, at pp. 124-26 and Bucknall, “Two Roads Diverged: Recent Decisions on Possessory Title” (1984), 22 Osgoode Hall L.J. 375. Taken at face value, its application could unduly limit successful adverse possession claims, especially when land is left vacant. A paper title holder could always claim an intention to develop or sell the land, or could maintain that a person in possession cannot hold adversely to someone who does not care what is happening on the land.

Even accepting, however, that the test applies to cases of knowing trespass, it cannot apply to cases of mutual mistake. If it did apply, every adverse possession claim in which the parties were mistaken about the title would fail. Inconsistent use means that the claimant’s use of the land is inconsistent with the true owner’s intended use. If the true owner mistakenly believes that the claimant owns the disputed land, then the owner can have no intended use for the land and, correspondingly, the claimant’s use cannot be inconsistent with the owner’s intended use.

[19] The appellants’ third argument is that the application judge erred in awarding prescriptive title to the respondent in the face of the true owner having been given permission to use the original roadway across the disputed land.

[20] Here too Teis, supra, provides the answer. At p. 228 Laskin J.A. makes clear that a possessory title may be subject to a right-of-way. See to the same effect Re Alfrey Investments Ltd.. and Shefsky Developments Ltd. et al. (1974) 1974 709 (ON SC), 6 O.R. (2d) 321 at 328-9.

[21] This makes sense where, as here, the claimant and the true owner think the claimant is the true owner and where, acting on that basis, the claimant has given the real owner permission to cross the disputed lands. To find otherwise would penalize the claimant, who everyone mistakenly believes is the true owner, from acting as such, and giving someone else permission to cross the land just as a neighbourly owner would.

[22] In summary, the appellants’ attacks on the finding of adverse possession must all fail and the order appealed from must be sustained, but with one modification. The respondent agrees that the conveyance to her of Part 2 on the 2002 Plan of Survey should be set aside. The mutual mistake underpinning the adverse possession finding requires the conveyance of Part 1 but does not extend to sustain the conveyance of Part 2. There is no evidence of mutual mistake regarding Part 2. The respondent is entitled to no more than an easement over Part 2 for the purpose of maintaining the dam and the spillway.

[23] Finally, I would dismiss the appellants’ challenge to the costs order made by the application judge. The respondent submitted an offer to settle on November 18, 2003 which was exceeded by the order appealed from. She sought partial indemnity costs to that point and substantial indemnity costs thereafter. She recovered about two-thirds of her request. The hours her solicitor spent are not excessive, given that the issues were not simple and that, ultimately, he was successful. The amount ordered is not unreasonable and given the wide discretion accorded to the first instance judge in this context, I would not interfere.

[24] Therefore, subject to this variation I have referred to, I would dismiss the appeal. Costs to the respondent in the amount of $10,000 inclusive of disbursements and G.S.T.

RELEASED: January 12, 2006 “MR”

“S.T. Goudge J.A.”

“I agree M. Rosenberg J.A.”

“I agree K. Feldman J.A.”