CITATION: Windsor Port Authority v. K-Scrap Resources Ltd., 2008 ONCA 63
DATE: 20080128
DOCKET: C45631
COURT OF APPEAL FOR ONTARIO
SHARPE, CRONK and GILLESE JJ.A.
BETWEEN:
WINDSOR PORT AUTHORITY
Applicant (Appellant)
and
K-SCRAP RESOURCES LTD., JOHN RODZIK, DONALD RODZIK and DEBORAH LOUISE SHERMAN
Respondents
William V. Sasso for the applicant/appellant
Myron W. Shulgan, Q.C. for the respondents
Heard: January 24, 2008
On appeal from the order of Justice Steven Rogin of the Superior Court of Justice dated May 15, 2006.
ENDORSEMENT
[1] The application judge found that the location proposed by the appellant for the railway line easement over the lands of the respondents did not comply with the terms of the Option Agreement by which the respondents granted the appellant the easement. The application judge reached that conclusion on two grounds:
the proposed location was not contemplated by Schedule A to the Option Agreement, and
the proposed location would have an adverse impact on the respondents’ business.
[2] We see no reason to interfere with the application judge’s finding that the appellant’s proposed location does not comport with Schedule A. The Option Agreement and the judgment of Abbey J. require that the easement be located “generally as shown in Schedule ‘A’”. Schedule A is a hand drawn sketch rather than a detailed survey that could be used to locate the easement in a precise fashion. Nonetheless, it defines certain clear parameters and the application judge’s finding that the appellant’s proposed location fails to comply with those parameters is amply supported on the evidence. In particular:
the proposed location does not go from point A a distance of 1056 ft. to point B, as shown on Schedule A. Instead, it cuts across the respondents’ property at a point significantly to the west of point B;
the proposed location cuts across two railway tracks well to the east of the location shown on Schedule A;
the proposed location does not go from point B to point C as shown on Schedule A but, rather, to a point to the east of point C in order to accommodate the wishes of the appellant’s tenant on the lands to the west;
the proposed location does not follow a line in close proximity to the shore of the Detroit River as shown on Schedule A.
[3] These are significant departures from what is “generally as shown in Schedule ‘A’” that would materially affect the respondents’ property rights. This provided a sufficient basis for the application judge to refuse to approve the proposed location.
[4] We do not agree with the application judge’s second ground relating to business interference. We do not accept his interpretation of the Option Agreement as importing into the issue of the location of the easement the question of whether the easement interferes with or impedes the respondents’ business operations. Nor do we accept the respondents’ submission that the provision making the location of the easement subject to the approval of counsel gives them the right to reject a location that falls within the limits of what is “generally as shown in Schedule ‘A’” on the ground that an easement so located would interfere with their business. In our view, the Option Agreement gives the appellant the right to an easement at the location “generally as shown in Schedule ‘A’”. Properly read, the restriction or limitation in the Option Agreement pertaining to business interference relates to the right to use the easement once it is in place.
[5] In addition to the comments we have already made with regard to the proper interpretation of the Option Agreement and Schedule A, we add the following.
[6] The Option Agreement makes the location of the easement “subject to approval by survey, railway authorities, municipal authorities, relevant Governmental authorities and counsel for both parties.” In our view, by recognizing the need for these approvals and by specifying that the location of the easement is to be generally as shown on Schedule A, the Option Agreement provided an element of flexibility sufficient to allow for an interpretation that reasonably accommodates changing technology and regulatory standards. While this element of flexibility falls well short of what would be required to make the appellant’s proposed location for the easement acceptable, the respondents are precluded from insisting on a rigid or literal adherence to Schedule A that would effectively defeat the appellant’s right to an easement.
[7] Similarly, the requirement for approval by counsel for the parties does not amount to a veto, and must not be unreasonably withheld.
[8] Finally, there is insufficient evidence as to the past and present configuration of a water slip adjacent to point C to enable us to determine whether or not the easement must cross the water in the vicinity of point C.
[9] The respondents confirmed before this court that they are prepared to approve an easement location that conforms with Schedule A, provided that the location in issue does not interfere unduly with their business operations. As is apparent from these reasons, the latter consideration does not afford a basis for the respondents to withhold their approval of a proposed easement location so long as that location conforms with Schedule A.
[10] We reject the submission that it would be appropriate for this court to designate the exact location of the easement. The appellant has made two proposals that fail to comply with Schedule A. Justice Abbey found that the appellant’s original proposal was for “a completely and distinctly different location” and we affirm the application judge’s finding that the current proposal is significantly at variance with Schedule A. We observe that the question of the location of this easement is one that cries out for a negotiated or mediated resolution and we urge the parties to explore that option. We hope that with the guidance now provided by the judgments of the Superior Court and this court, the parties will be able to resolve the issue without further recourse to the courts. Regrettably, however, the only judicial remedy we can order is to leave it open to the appellant to seek approval for another proposed location that does correspond with the terms of the Option Agreement and Schedule A.
[11] If the appellant elects to apply to fix the location of the easement, the matter shall be heard by Abbey J. or such other judge as the Regional Senior Judge designates.
[12] For these reasons, the appeal is dismissed with costs to the respondents fixed at $10,800 inclusive of disbursements and GST.
“Robert J. Sharpe J.A.”
“E.A. Cronk J.A.”
“E.E. Gillese J.A.”