Remicorp Industries Inc. v. Metrolinx

[Indexed as: Remicorp Industries Inc. v. Metrolinx]

Ontario Reports

Court of Appeal for Ontario

Sharpe, Pepall and Hourigan JJ.A.

May 30, 2017

138 O.R. (3d) 109 | 2017 ONCA 443

Case Summary

Real property — Easements — Abandonment

CN reserved an access easement to itself when it sold property to Remicorp in 2002. CN transferred its interest in rail corridor lands (including the access easement) to Metrolinx in 2010. Neither CN nor Metrolinx used the access easement. The application judge erred in finding that the easement had been abandoned by implied release. Non-use does not establish abandonment in the absence of evidence of intention to abandon. Three instruments that referred to the easement and that were registered on title in 2002, 2003 and 2010 constitute evidence of absence of intention to abandon the easement. The application judge also erred in finding that the easement had been extinguished by operation of law. Lack of use and lack of need do not amount to extinguishment by operation of law. The application judge erred in ordering that the access easement be relocated.

Facts

CN sold property to Remicorp in 2002, but reserved to itself an access easement and a maintenance easement that provided access for maintenance of railway tracks. The deed, which included the easements, was registered on title. In 2003, Remicorp and CN entered into an easement agreement which provided that, upon the written request of CN, Remicorp was to apply for and use its best efforts to obtain consent to an easement on another part of the property from the Committee of Adjustment, and grant that easement to CN. The easement agreement was registered on title. CN never made a written request under the easement agreement. In 2010, CN transferred its interest in rail corridor lands (including the access easement and the maintenance easement) to Metrolinx. The transfer was registered on title. Neither CN nor Metrolinx ever used the access easement. Metrolinx brought an application for a declaration that the access easement was valid and an injunction requiring Remicorp to remove certain encroachments on it. Remicorp sought a declaration that the easement had been abandoned or extinguished or, in the alternative, that it be relocated. The application judge allowed Remicorp's application and dismissed Metrolinx's application. Metrolinx appealed.

Held

The appeal should be allowed.

The application judge erred in finding that the access easement had been abandoned by implied release. Non-use coupled with an intention to abandon an easement may demonstrate implied release. On its own, non-use is insufficient. Inclusion of an easement in a conveyance supports the absence of an intention to abandon. The application judge failed to consider that the three registrations on title in 2002, 2003 and 2010 represented evidence of the absence of an intention to abandon the access easement. Moreover, easement rights may have value. There was no evidence as to why CN or Metrolinx would have intended to abandon such rights and there was no evidence of any consideration that flowed from Remicorp to CN in exchange for any release.

The application judge also erred in finding that the access easement had been extinguished by operation of law. Lack of use and lack of need do not amount to extinguishment by operation of law.

The application judge erred in ordering the relocation of the access easement. Section 61(1) of the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34 and s. 119(5) of the Land Titles Act, R.S.O. 1990, c. L.5 require that a valid covenant exist over which the court can exercise its jurisdiction. As he had found that the access easement had been abandoned, the application judge erred in finding that there was a covenant over which the court could exercise its jurisdiction. He also failed to consider that the jurisdiction to modify an easement is to be exercised with the greatest of caution and that an order should seldom be granted if prejudicial to the adjacent landowner.

Appeal from the Judgments of Dow J.

[2016] O.J. No. 171, 2016 ONSC 10 (S.C.J.)

Counsel:

Wendy J. Earle, for appellant.

David Cherepacha and Kyle Gossen, for respondent.

The judgment of the court was delivered by

PEPALL J.A.:

A. Introduction

[1] These appeals involve competing claims for relief relating to an easement. The easement is located on land situated north of railway tracks that currently service GO Trains and the newly established Union Pearson Express. The contested easement leads to another, uncontested easement that runs along a rail corridor. Together, the easements provide access for maintenance of the railway tracks.

[2] The appellant Metrolinx sought a declaration that the contested easement was valid and an injunction requiring the respondent, Remicorp Industries Inc., to remove certain encroachments on it. Remicorp, who owns the lands on which the easement is situate, sought a declaration that the easement had been abandoned or extinguished or, in the alternative, that it be relocated.

[3] The application judge accepted Remicorp's position. He dismissed Metrolinx's application and found that the easement had been abandoned. Although Remicorp had sought relocation as alternative relief, the application judge ordered that the easement be relocated. Metrolinx now appeals on the basis that the application judge erred in concluding that the easement had been abandoned, and in ordering it to be relocated.

[4] For the reasons that follow, I would allow Metrolinx's appeals.

B. Facts

The Property

[5] The Canadian National Railway Company ("CN") owned the Mimico railway station in the west of Toronto. The station property consisted of a small building surrounded by a parking lot and vegetation (the "property"). The property lies west of Royal York Road and borders on Judson Street to the north with railway lands and tracks to the south. On a survey dated November 26, 2002, the property is divided into nine parts. The significant parts for the purposes of this appeal are Parts 1, 2, 3 and 5.

[6] The easement under dispute in these appeals is shown on Part 5. Part 5 is a curved, uphill, unpaved laneway running from Judson Street to the parking lot providing access to the station and to the uncontested easement. This laneway is described by the parties as the "access easement". It is approximately 6.1 to 11 metres wide and about 45 metres long.

[7] The uncontested easement is shown on Parts 2 and 3, and is described as the "maintenance easement". Part 3 is a strip of land, 3 metres wide and 70 metres long, running west to east immediately north of the rail corridor. At its eastern end, Part 3 is met by the access easement. At its western end, it meets Part 2, a small quartile of land that is met by Part 1 on the survey.

[8] Part 1 is on the western side of the property. It is a strip of land, 6.1 metres wide and 60 metres long, that runs from Judson Street in the north to Part 2 in the south.

The Easements

[9] In 2002, CN sold its property to Remicorp, a concrete manufacturing company. Remicorp intended to build a concrete factory on the property.

[10] CN conveyed the property to Remicorp, reserving the access and maintenance easements to itself. Remicorp also agreed to build a 6-foot fence and gates acceptable to CN along the southern boundary of the property that would abut the railway lands that CN continued to own.

[11] Both the access easement and the maintenance easement reserved to CN, its successors and assigns "an exclusive, free, uninterrupted and unobstructed right and easement in the nature of a right-of-way" that extended to use by vehicles and equipment. The sale transaction closed and the deed was registered on December 11, 2002. The deed included the Part 5 access easement and the Parts 2 and 3 maintenance easement in favour of CN. The access easement was for the purpose of accessing CN's adjacent and abutting lands and the lands on which the maintenance easement was situate. The maintenance easement was for the purpose of maintenance of CN's railway tracks and other related railway operations. Both easements were for the benefit of CN and its successors and assigns. The relevant portion of the deed is attached as an appendix to these reasons.

[12] Sometime in 2002 or 2003, Renato Silva, the owner of Remicorp, contacted Ernie Longo, CN's manager of business development and real estate, about relocating the access easement from the eastern side of the property along Part 5 to the western side of the property along Part 1. The possibility of moving the access easement had been discussed at the time of the sale of the property but nothing had been documented. No direct evidence from Longo or evidence of his authority to bind Metrolinx was tendered, but Silva deposed that Longo liked the relocation because it was "in a straight line and fairly flat".

[13] In June of 2003, Remicorp moved the Judson Street entrance to the property from Part 5 in the east, where the access easement is located, to Part 1 in the west.

[14] On September 19, 2003, Remicorp and CN entered into an "easement agreement" in the nature of an option agreement in favour of CN. CN and Remicorp agreed that upon the written request of CN, Remicorp was to (i) apply for and use its best efforts to obtain consent to the Part 1 easement from the City of Toronto Committee of Adjustment, (ii) grant the Part 1 easement to CN and (iii) register the Part 1 easement on title.

[15] The parties to the easement agreement expressly acknowledged the access easement on Part 5 and described it as the "original access easement". The easement agreement provided that on the registration of the Part 1 easement (described as the "permanent easement") in accordance with the terms of the agreement, on Remicorp's written request, CN was to release the original access easement. The easement agreement was registered on title on November 6, 2003.

[16] CN never made any written request of Remicorp and hence never exercised its option; the Part 1 easement was never registered on title; and there is no evidence of the Committee of Adjustment's consent or a release of the access easement from CN.

[17] Nonetheless, Remicorp used Part 1 for ingress and egress to and from the property. It also erected certain structures in the path of the access easement, including a sheet metal wall, a garage/shed and concrete troughs. In 2014, it erected a 6.5-metre high acoustical barrier that encroaches on the maintenance easement. Remicorp erected some of the structures without obtaining the necessary permits.

[18] For its part, after entering into the sale transaction in 2002, CN did not use either the access easement or the unrealized Part 1 easement.

Sale to Metrolinx

[19] In April 2010, CN transferred its interest in the rail corridor lands to Metrolinx, an agency of the Ontario Government. Metrolinx's mission, among other things, is to develop and implement an integrated transportation system for the Greater Toronto Area. It operates the GO Train network that facilitates passenger movement by rail to and from the Greater Toronto Area and beyond. It is also responsible for the new Union Pearson Express.

[20] The transfer from CN to Metrolinx included CN's rights to the access easement and the maintenance easement. Despite its transfer to Metrolinx, CN retained responsibility for the planning, design and installation of the signal system for the rail corridor. In 2012, it erected a signal bridge, part of which sits on the south side of the maintenance easement. Using the maintenance easement, Metrolinx is able to drive its usual maintenance vehicle past the signal bridge on the south with about 10 cm to spare on the north.

[21] Metrolinx has never exercised any rights it may have to the access easement or the prospective easement on Part 1.

[22] The only repair and maintenance facility for the entire GO Train network, Willowbrook, sits to the southwest of the property. The future needs of Metrolinx appear to be increasing. Over the years, Willowbrook has been expanded and two additional tracks have been installed on the northern edge of Metrolinx's property. Metrolinx can gain access to Willowbrook using the maintenance easement and from the south and west of its railway lands.

[23] In 2014, Remicorp obtained an environmental compliance approval which permitted it to make intense use of Part 1 for ingress and egress to and from its property. Remicorp is now allowed to operate 16 trucks per hour between the hours of 7:00 a.m. and 7:00 p.m. using Part 1.

[24] Remicorp and Metrolinx have had unsuccessful discussions about the sale of the property to Metrolinx. The application judge noted that the outcome of the parties' court proceedings will likely have an impact on the value of the property.

Court Proceedings

[25] This brings me to the particulars of the court proceedings commenced by each of the parties.

[26] Remicorp sought a declaration that the access easement over Part 5 was abandoned, obsolete, redundant and/or extinguished or, in the alternative, asked for an order that it be relocated to Part 1.

[27] Metrolinx sought a declaration that the Part 5 access easement is valid, in force, and binding on Remicorp. It also sought injunctive relief requiring Remicorp to stop obstructing the access easement and to remove certain encroachments. Metrolinx argued that use of the area attendant to the rail corridor has intensified in recent years. Absent use of the access easement, track protection for the safety of trains and workers would result in tracks being taken out of service, delays and additional costs.

[28] The other parties to the applications, and in particular, CN, have taken no position in either of the two proceedings.

Reasons of the Application Judge

[29] The application judge dismissed Metrolinx's application and granted Remicorp's.

[30] The application judge focused on whether Metrolinx had abandoned the access easement. He explained that abandonment can occur through express release, implied release or by operation of law: Lywood v. Hunt (2009), 97 O.R. (3d) 520, [2009] O.J. No. 2101 (S.C.J.), affd [2011] O.J. No. 1286, 2011 ONCA 229.

[31] The applications judge noted that Remicorp did not argue there was an express release.

[32] He went on to hold that while the legal documents did not support an implied release of the access easement by Metrolinx, its non-use of the easement did.

[33] In his view, the key factors supporting the implied release were (1) the existence and description of Part 1 on the survey; (2) the non-use of the Part 5 access easement; (3) Silva's evidence of Longo's acquiescence to moving the Part 5 access easement; (4) the drafting and registration on title of the September 2003 easement agreement; and (5) a December 2014 Metrolinx photograph of 12 large concrete blocks that blocked the south end of Part 1. The application judge held that these blocks undermined Metrolinx's submission on the importance and need for any easement.

[34] That said, he noted that neither party was suggesting that the easement be taken away; Remicorp was only proposing that it be moved. He rejected Metrolinx's submission that the Part 5 access easement was preferable to an easement over Part 1.

[35] The application judge concluded, at para. 21: "In all of the circumstances, if necessary, I would conclude there is sufficient evidence of an implied release. However, I also conclude the operation of law is the basis on which Remicorp should succeed."

[36] Relying on Weidelich v. De Koning (2014), 122 O.R. (3d) 545, [2014] O.J. No. 5062, 2014 ONCA 736, he stated that the holder of an easement "does not own the right of way but only enjoys the reasonable use of that property for its granted purpose". In the application judge's view, "the purpose [here] was to pass over for access to the tracks when or if required, not to place or build anything permanent on that land": at para. 21. Metrolinx was entitled to its access easement, but the facts and circumstances of the case required that it be moved to Part 1.

[37] The application judge went on to hold that Remicorp was required to give "reasonable priority" to Metrolinx over its own 16-truck hourly allocation over Part 1.

[38] The application judge stated, at para. 24:

Under subsection 61(1) of the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34 ["CLPA"], the Access Easement is moved to [Part 1]. Similarly, if there is a distinction, subsection 119(5) of the Land Titles Act, R.S.O. 1990, c. L.5 ["LTA"] applies. I conclude the modification is beneficial to the parties interested and the existing easement is to be discharged while the alternate Access Easement registered on title.

[39] Although the reasons were silent on extinguishment, the judgment allowing Remicorp's application provides that the Part 5 access easement is extinguished by operation of law and by abandonment, and that pursuant to s. 61(1) of the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34 ("CLPA") and s. 119(5) of the Land Titles Act, R.S.O. 1990, c. L.5 ("LTA"), the Part 5 access easement is relocated to Part 1. The application judge also dismissed Metrolinx's request for injunctive relief to remove certain structures on the access easement and encroachments on Metrolinx's lands.

C. Issues

[40] Metrolinx appeals from the judgments. Its appeals raise the following issues:

(i) Did the application judge err in concluding that the Part 5 access easement had been abandoned by implied release?

(ii) Did the application judge err in concluding that the Part 5 access easement was extinguished by operation of law?

(iii) Did he also err in concluding that the Part 5 access easement could be moved to Part 1?

(iv) Is Metrolinx entitled to a remedy for Remicorp's encroachments on the access easement and Metrolinx's lands?

[41] Metrolinx also argues that the application judge erred in ordering that Metrolinx was to have "reasonable priority" over Remicorp's use of Part 1. However, as I have found in Metrolinx's favour on the other issues, it is unnecessary to address this submission.

D. Discussion

Issue One: Abandonment by Implied Release

(a) Parties' Positions

[42] Metrolinx submits that the application judge made three errors in finding that the Part 5 access easement had been abandoned by implied release: (i) he failed to recognize that the three registrations on title between 2002 and 2010 contradicted any suggestion of abandonment; (ii) he failed to apply established case law on the need to demonstrate an intention to abandon in the face of an express grant of easement; and (iii) he improperly considered extraneous issues in considering whether there was an implied release of the access easement.

[43] Remicorp disputes these submissions and states that the application judge considered the three registrations on title but found that they were outweighed by the factors that demonstrated an implied intention to abandon. Furthermore, Remicorp argues that although the application judge did not make express reference to intention, his reasons clearly imply that he found an intention to abandon. In any event, argues Remicorp, the weighing of the factors in the applications judge's analysis of abandonment is discretionary and his decision is entitled to deference. Lastly, he did not improperly consider any extraneous issues.

(b) Analysis

Abandonment by Release: General Principles

[44] The application judge was dealing with an express grant of easement. CN asserted its rights to the access easement in the 2002 deed from CN to Remicorp, in the 2003 easement agreement between CN and Remicorp, and in the 2010 deed from CN to Metrolinx. All were registered on title.

[45] Subsection 15(1) of the CLPA provides that, absent an exception, a conveyance includes all easements. Here, the access easement and the maintenance easement were expressly included, and not excepted, in both the conveyance from CN to Remicorp and the conveyance from CN to Metrolinx. Put differently, CN maintained its rights to use and transfer the easements. There is no question that paper title to the enjoyment of the Part 5 access easement remained with CN and was then transferred to Metrolinx.

[46] One must therefore then consider whether there was any derogation from Metrolinx's right to the access easement by implied release.

[47] An easement may be abandoned by release which may be express or implied. The onus of proof is on the party asserting a release: Liscombe v. Maughan (1928), 62 O.L.R. 328, [1928] O.J. No. 44 (C.A.), at p. 335 O.L.R. In Gale on Easements, 20th ed. (London: Sweet & Maxwell (U.K.), 2016), the authors warn, at para. 12-26: "Unless the easement is granted for a term of years, the rights conferred by an easement are perpetual and, accordingly, are actually or potentially valuable rights. Therefore it is not lightly to be inferred that the owner of such a right should give it up for no consideration."

[48] An easement can be expressly released by the dominant owner, that is, the party who has received the grant of easement -- in this case CN and then Metrolinx. As noted by the application judge, there was no express release. This was undisputed.

[49] An easement can also be released impliedly. Non-use coupled with an intention to abandon the easement may demonstrate implied release. On its own, non-use is insufficient. As this court explained in Liscombe, at p. 335 O.L.R., non-use may arise because an owner of an easement had for the time no occasion to use it as another more convenient means of employing the land was available. However, this lack of use did not prove that the owner of the easement intended to abandon it. See, also, Ward v. Ward (1852), 155 E.R. 1189, 7 Ex. 838 and Crossley and Sons Ltd. v. Lightowler (1867), L.R. 3 Eq. 279. Indeed, in Liscombe, at p. 335 O.L.R., this court cited Seaman v. Vawdrey (1810), 33 E.R. 1032, where, despite non-use for over 100 years, an intention to abandon was not established. To reiterate, intention to abandon must be proven.

[50] Intention to abandon will be found where "the person entitled to it has demonstrated a fixed intention never at any time thereafter to assert the right himself or to attempt to transmit it to anyone else": Shklar v. Kwiecien, [1972] 3 O.R. 245, [1972] O.J. No. 1843 (H.C.J.), at p. 247 O.R., citing Tehidy Minerals Ltd. v. Norman, [1971] 2 All E.R. 475, at p. 492. See, also, Almel Inc. v. Halton Condominium Corp. No. 77, [1997] O.J. No. 824, 98 O.A.C. 72 (C.A.), at para. 7. To establish intention to abandon, the surrounding circumstances may be examined: Liscombe, at para. 28.

[51] Inclusion of an easement in a conveyance supports the absence of an intention to abandon: Liscombe, at p. 335 O.L.R. As stated in Halsbury's Laws of Canada -- Real Property (Toronto: LexisNexis, 2016 Reissue), at HRP 316: "Where title has been perfected an extinguishment will usually require either an express release or circumstances so cogent as to preclude a quasi-releasor from denying the release; an intention to release will be less readily presumed where the title to the easement has been perfected than where the title still remains inchoate": citing Baker v. Harris (1929), 64 O.L.R. 513 at 514, [1929] O.J. No. 77 (C.A.), at p. 516 O.L.R. Suspension of the exercise of a right is insufficient. An intention not to exercise a right may differ from an intention to abandon it. See Kileel and Kingswood Realty Ltd. (Re), [1979] N.B.J. No. 307, 108 D.L.R. (3d) 562 (C.A.), at p. 567 D.L.R.

Application to This Case

[52] In my view, the application judge erred in finding an implied release. There are several reasons why.

[53] First, in considering whether the application judge's conclusion that the access easement had been impliedly released may be sustained, three registrations on title are relevant. The access easement and the maintenance easement were in the 2002 grant from CN to Remicorp. The access easement was then expressly addressed in considerable detail in the easement agreement of September 2003 between CN and Remicorp. Lastly, both easements were included in CN's transfer to Metrolinx in 2010.

[54] While the application judge was aware of these three documents in that he states that the legal documents do not support the position of Remicorp, I agree with Metrolinx that he failed to consider that the registrations on title represented evidence of the absence of an intention to abandon the Part 5 access easement by CN. In fact, the evidence to the contrary was both strong and unequivocal. The parties deliberately turned their minds to the treatment of the easement rights held by CN. The easement agreement contemplated an option by CN that was never exercised. CN's subsequent transfer of its easement rights to Metrolinx is consistent with the absence of any such exercise. There is no evidence that any of the steps contemplated by the easement agreement to effect a release of the Part 5 access easement ever took place. For instance, there is no evidence of CN making a written request, no evidence of Remicorp having applied for or using its best efforts to get the Committee of Adjustment to consent to the Part 1 easement, and no evidence that the Part 1 easement was ever registered on title as an easement. Had the application judge considered this evidence, he would not have concluded that the requisite elements in support of an implied release were present.

[55] Second, as mentioned, easement rights may have value. There was no evidence as to why CN, or indeed Metrolinx, would have intended to abandon such rights and there was no evidence of any consideration that flowed from Remicorp to CN in exchange for any release. The application judge failed to consider this as a factor that supported the absence of any such intention.

[56] Third, the access easement was an express grant that was registered on title. As Aitken J. stated in 2108133 Ontario Inc. v. Kabcan Foods Ltd., [2009] O.J. No. 951, 80 R.P.R. (4th) 194 (S.C.J.), at para. 8, the intent to abandon means that the person entitled to the easement has knowingly, and with full appreciation of his rights, determined to abandon it. The application judge made no finding in this regard. Indeed, although the onus of proof was on Remicorp, the application judge was silent on the absence of any evidence being elicited from CN.

[57] Fourth, the application judge concluded [at para. 21] that Metrolinx was entitled to "its easement but the facts and circumstances of this case require the easement to be moved to . . . Part 1 . . .". The easement was not being taken away but was being moved. His finding that Metrolinx was entitled to an easement is inconsistent with his finding that Metrolinx impliedly abandoned the access easement.

[58] Lastly, Metrolinx also submits that the application judge erred in considering certain extraneous factors. It submits that he erred by justifying his conclusion in part on the basis that the access easement was not used and that an alternative route was available, and by inferring that CN had acquiesced in moving the access easement.

[59] Lack of use, alternative access and acquiescence are factors to consider in assessing the cogency of the circumstances. However, as mentioned, non-use on its own is insufficient. Further, as will be addressed below in my discussion of extinguishment by operation of law, alternative access becoming available is on its own insufficient to establish abandonment. Finally, any potential acquiescence by CN was overtaken by the express terms of the easement agreement that addressed the very subject matter of the access easement in clear and unambiguous language and which the application judge failed to meaningfully address.

[60] In light of these errors, to the extent the application judge rested his decision on a finding of implied release, his decision cannot be sustained.

[61] Having addressed abandonment by implied release, I will now turn to the application judge's reliance on operation of law.

Issue Two: Operation of Law

(a) Parties' Positions

[62] On appeal, the submissions of the parties conflated abandonment by implied release and extinguishment by operation of law. In that regard, their arguments on operation of law were subsumed in their discussion of abandonment by implied release. However, for the purposes of analytical clarity and consistent with the terms of the judgment allowing Remicorp's application, it is helpful to address the concepts separately.

(b) Analysis

Extinguishment by Operation of Law: General Principles

[63] As I have explained, in addition to holding that the access easement had been abandoned by implied release, the application judge also rested his decision on operation of law. And while the application judge did not declare that the access easement was "extinguished" in his reasons, he did so in his judgment. This raises the knotty question of nomenclature in this area of law, and the components of extinguishment by operation of law.

[64] Anne Warner La Forest, in Anger & Honsberger, Law of Real Property, looseleaf, 3rd ed., vol. 2 (Toronto: Canada Law Book, 2016) states, at para. 17:20.60, that an easement may be extinguished by express release, implied release, or operation of law. She treats abandonment as a form of implied release. Certain cases have used a comparable classification. For example, see Roop v. Hofmeyr, [2016] B.C.J. No. 1502, 2016 BCCA 310, 88 B.C.L.R. (5th) 223, at paras. 30, 41; Lywood v. Hunt (S.C.J.), supra, at para. 27, affd (C.A.), supra; and Phinny v. Macaulay, [2008] O.J. No. 3629, 75 R.P.R. (4th) 66 (S.C.J.), at para. 119.

[65] Anger and Honsberger states, at para. 17:20:60(a), that at common law, an easement will be extinguished by operation of law where:

(a) the purpose for which it was created has come to an end;

(b) the period for which the easement was created terminates;

(c) the right is abused; or

(d) the same person comes to own the dominant and servient lands in fee simple.

[66] In contrast, at pp. 29-007 to 29-016 of Megarry and Wade, The Law of Real Property, 8th ed. (London: Sweet & Maxwell, 2012), the authors describe the mechanisms for extinguishment as being by statute, express or implied release, and by unity of ownership and possession of both the dominant and servient tenements.

[67] The authors of Gale on Easements describe extinguishment as falling into three categories: by operation of law, statute and release. Operation of law is stated to encompass unity of ownership, merger of interests, expiration of a time-limited easement, and disappearance of the purpose of an easement.

[68] Yet another classification is found in Halsbury's, at HRP 315-322. It classifies the methods of extinguishment as being by statute, express or implied release, unity of ownership, or destruction of either tenement. Halsbury's states, at HRP 319, that an easement will be extinguished if it was granted with a time limit, or for a purpose, that has expired or come to an end. However, the authors include extinguishment resulting from expiry of time or end of purpose as a subset of extinguishment by release.

[69] What is to be drawn from all of these descriptions?

[70] A reasonable conclusion is that an easement may be extinguished by operation of law in two ways. First, it may be extinguished by statute. A good example is found in British Columbia's Property Law Act, R.S.B.C. 1996, c. 377, s. 35(2), which allows the court to modify or cancel an easement where there is, inter alia, a material change in the character of the land such that the easement is obsolete. Ontario's legislation does not mirror that of British Columbia. In extinguishing an easement by statute, some caution may be required. As the authors of Gale on Easements note, at para. 12-12: "An Act should not, however, be construed so as to interfere with somebody's property rights without compensation unless the court is obliged so to construe it", citing Jones v. Cleanthi, [2007] 1 W.L.R. 1604, at para. 82.

[71] Second, an easement may be extinguished by operation of the common law. Examples include unity of ownership and possession of the dominant and servient lands or destruction of either the dominant or servient lands. As seen from Anger & Honsberger, Gale on Easements, and Halsbury's, extinguishment by operation of law also includes expiry of a time-limited easement and disappearance or expiry of the purpose for which the easement was created. It seems to me that the former would more properly be the subject matter of an express or implied release. If an easement is granted for a limited time, it follows that it must have been the subject of an express grant that expressly or impliedly provided for a release on the expiration of the time limit.

[72] As for expiry of the purpose for which the easement was granted, an easement is not typically extinguished by temporary events that impact its use. Some permanence must exist. In "Easement Caselaw Update" (paper presented to the Ontario Bar Association, Continuing Legal Education Program, Easements for Real Estate and Municipal Lawyers: Level II, October 6, 2016), Craig Carter writes that "[a]n easement can be extinguished as a matter of law when some event occurs that makes the easement unusable or unnecessary. Some permanence must exist. A flood that washes over an easement is not extinguishment. But global warming causing a sea to cover a right of way will be."

[73] A further example is found in National Guaranteed Manure Co. v. Donald (1859), 157 E.R. 737, where the court held that an easement to take water to fill a canal ceased when the canal no longer existed and was converted to a railway.

Application to This Case

[74] The application judge stated, at para. 21 of his reasons: "I also conclude that operation of law is the basis upon which Remicorp should succeed". His analysis on this point was limited. Moreover, as mentioned, at para. 23, he spoke of "abandonment" by operation of law, not extinguishment. His analysis seemed to focus on whether the reasonable use of the access easement for its granted purpose persisted. He noted [at para. 21] the description of the access easement as being "exclusive, free, uninterrupted and unobstructed" and that "the purpose was to pass over for access to the tracks when or if required, not to place or build anything permanent on that land". He concluded that Metrolinx was entitled to its easement, but it was to be moved to Part 1.

[75] Read as a whole, the application judge's reasons suggest that he found abandonment based on operation of law due to evidence of lack of use by CN and Metrolinx and his perception that Metrolinx was not in immediate need of any easement because the Part 1 pathway had been blocked by 12 large concrete blocks. In this regard, he analogized the case to Bost Properties Inc. v. Highland West Developments Inc., [2002] O.J. No. 477, 48 R.P.R. (3d) 83 (S.C.J.).

[76] With respect, lack of use and lack of need do not amount to extinguishment by operation of law. To the extent that lack of need reflects a lack of purpose, the application judge's substitution of the Part 1 easement is wholly inconsistent with a lack of purpose. Moreover, it runs counter to the express terms of the easement agreement. In addition, the application judge's reliance on Bost Properties was misplaced. That case involved property in the City of Kitchener that had once been rural but later became urbanized. The right-of-way at issue was created by deed in 1954 to serve as a laneway to provide access to farm property. The farmhouse no longer existed and the farm had ceased operations many years before. What was once an area of agricultural use was now dormant land awaiting urban development. The trial judge decided that the easement in that case was for a limited purpose that had disappeared.

[77] Assuming, without deciding, that the analysis in Bost Properties was correct, here the purpose associated with the access easement -- access to the railway lands -- cannot be said to have disappeared. Indeed, the application judge acknowledged as much by granting an access easement to Metrolinx over Part 1.

[78] This case is more akin to Fyfe v. James, [2006] O.J. No. 325, 42 R.P.R. (4th) 221 (S.C.J.), where the court held that an access easement was not extinguished after a new, alternate access road was built. The court distinguished the facts in Bost Properties, and rejected the respondents' argument that, because the new road provided full ingress and egress to the relevant properties, the right-of-way was no longer necessary and therefore extinguished. The grant did not provide for the easement to be extinguished by alternative access, nor did it stipulate a time limit.

[79] Here, as in Fyfe, nothing in the three instruments registered on title suggest a time limit on the access easement. While relocation of the access easement is contemplated in the easement agreement, this relocation is solely at the option of CN. As the option was not exercised, the access easement was not extinguished.

[80] The conclusion that the access easement had been abandoned or extinguished by operation of law was in error.

Issue Three: Relocation of Access Easement to Part 1

(a) Parties' Positions

[81] Metrolinx also appeals the application judge's decision relocating the access easement from Part 5 to Part 1. It submits that the application judge made three errors in exercising his discretion to move the access easement: (i) the decision ignored Metrolinx's registered contractual right; (ii) having found that the access easement had been abandoned, the application judge lacked jurisdiction to modify the access easement under s. 61(1) of the CLPA or s. 119(5) of the LTA; and (iii) he failed to apply the proper legal test and failed to adhere to established legal principles.

[82] Remicorp submits that the application judge properly interpreted the grant of the access easement and determined that the rationale for the original location and configuration no longer existed. Moreover, the parties to the easement agreement knew at the time it was registered that the access easement had already been relocated.

[83] Remicorp submits that the application judge did not relocate an abandoned easement. Rather, he found that it had been relocated by operation of law and by statute and that there was sufficient evidence of an implied release, as well. It asserts that the easement was properly relocated under the CLPA and the LTA and the applications judge made no error in principle.

(b) Analysis

[84] First, I agree with Metrolinx that while the application judge recognized the validity and effect of the easement agreement at paras. 5 and 15 of his reasons, his decision effectively deprived the easement agreement of any force or effect. In essence, the applications judge appropriated from Metrolinx the benefit of the easement agreement in the absence of evidence of any consideration including any allowance for compensation.

[85] Second, I also agree with Metrolinx that s. 61(1) of the CLPA and s. 119(5) of the LTA require that a valid covenant exist over which the court can exercise its jurisdiction. Subsection 61(1) of the CLPA states:

61(1) Where there is annexed to land a condition or covenant that the land or a specified part of it is not to be built on or is to be or not to be used in a particular manner, or any other condition or covenant running with or capable of being legally annexed to land, any such condition or covenant may be modified or discharged by order of the Superior Court of Justice.

[86] Subsection 119(5) of the LTA states:

119(5) The first owner and every transferee, and every other person deriving title from the first owner, shall be deemed to be affected with notice of such condition or covenant, but any such condition or covenant may be modified or discharged by order of the court on proof to the satisfaction of the court that the modification will be beneficial to the persons principally interested in the enforcement of the condition or covenant.

[87] According to the application judge, the access easement had been abandoned. He therefore erred in finding that there was a covenant over which the court could exercise its jurisdiction.

[88] In any event, the application judge did not apply the correct legal principles in concluding that the access easement should be relocated.

[89] Subsection 61(1) of the CLPA does not indicate how a court's discretion is to be exercised. Subsection 119(5) of the LTA requires proof that the modification will be "beneficial to the persons principally interested in the enforcement of the condition or covenant".

[90] In George (Re) (1926), 59 O.L.R. 574, [1926] O.J. No. 72 (C.A.), this court considered whether a modification would be "beneficial to the persons principally concerned", a phrase previously contained in the CLPA and which is nearly identical to that found in the LTA. Middleton J.A. stated, at pp. 577-78 O.L.R.:

The provisions of the statute (12 & 13 Geo. V. ch. 53) are not easy to interpret. A Judge is empowered to modify or discharge building restrictions "on proof to his satisfaction that the modification will be beneficial to the persons principally concerned." If this means beneficial to the applicant the provision is senseless, for the relief would not be sought unless the applicant deemed it a benefit. If it means beneficial to the respondents it is again meaningless, for the respondents would undoubtedly release any right they may have if for their benefit. The meaning that has been given to the expression in practice is that the Judge must satisfy himself that the balance of convenience is in favour of granting the application, having regard to the rights and interests of both parties, and I think it may safely be said that the order should not be made unless the benefit to the applicant greatly exceeds any possible detriment to the respondents: Re Button (1925), 57 O.L.R. 161.

[91] In Ontario Lime Co. (Re) (1926), 59 O.L.R. 646, [1926] O.J. No. 505 (C.A.), in discussing the CLPA, this court stated, at p. 651 O.L.R.:

It has been more than once pointed out that under this statute there is no power to make compensation to a landowner who is prejudicially affected, and the jurisdiction is one to be exercised with the greatest caution, and an order should seldom, if ever be made which will in truth operate to the prejudice of the adjacent landowner who has any real rights. The true function of the statute is to enable the Court to get rid of a condition or restriction which is spent and so unsuitable as to be of no value and under circumstances when its assertion would be clearly vexatious.

[92] The application judge did not apply these principles. Moreover, he ignored the warning given by this court in Ontario Lime that the jurisdiction be exercised with caution and that an order be seldom granted if prejudicial to the adjacent landowner. It is also difficult to see how the application judge could conclude that the modification was beneficial to the interested parties. The relocation deprived Metrolinx of its rights under the easement agreement and results in significant traffic flow at the site of the alternative easement on Part 1. With the exception of making certain adjustments such as the removal of structures erected without building permits, the benefits to Remicorp of relocating the access easement are not obvious. Indeed, they do not appear to have been considered or identified by the application judge.

[93] For these reasons, the application judge erred in relocating the access easement to Part 1.

Issue Four: Remedy

[94] Based on my conclusions relating to the first and second issues, Metrolinx continues to have an easement over Part 5 of the property. It follows that any encroachment on the access easement should be removed.

[95] In addition, as acknowledged at para. 2 of the parties' agreed statement of facts dated December 3, 2015, portions of a metal plate fence and a portion of a metal clad building and its canopy are encroaching on Metrolinx's lands to the south. The application judge failed to address Metrolinx's request that these encroachments be removed and I see no basis on which they should not be. These encroachments should therefore also be removed. Metrolinx has suggested a six-month time frame for removal, which appears reasonable under the circumstances.

E. Disposition

[96] For these reasons, I would allow Metrolinx's appeals, set aside the judgments of the application judge and substitute paras. 1, 2, 4 and 5 of the form of draft order found at Tab D of Metrolinx's factum.

[97] As agreed by the parties, Remicorp is to pay Metrolinx's costs of the applications and the appeal fixed in the amounts of $35,000 and $20,000, respectively, inclusive of disbursements and applicable taxes.

Appeal allowed.

APPENDIX

The 2002 conveyance from CN to Remicorp describes the access easement and maintenance easement in this case as follows:

Reserving unto the Transferor for itself, its successors and assigns, agents, employees, tenants and licensees, an exclusive, free, uninterrupted and unobstructed right and easement in the nature of a right-of-way for access and/or egress by the Transferor, its agents, employees, tenants, licensees, guests, servants and visitors and their respective vehicles and equipment over, across, along and upon the lands described as Part of Lot 20, Block C, Registered Plan 339 or 389, City of Toronto, designated as Part 5 on Reference Plan 66R-20057 (the "Access Lands") for the purpose of accessing the adjacent and abutting lands of the Transferor and the Maintenance Lands (as hereinafter defined) and for all purposes necessary for or incidental to the exercise and enjoyment of the rights therein reserved (the "Access Easement"); and

Reserving unto the Transferor for itself, its successors and assigns, agents, employees and licensees, an exclusive, free, uninterrupted and unobstructed right and easement in the nature of a right-of-way by the Transferor, its agents, employees and licensees and their respective vehicles and equipment over, across, along and upon the lands described as Part of Lots 19 and 20, Block C, Registered Plan 339 or 389, City of Toronto, designated as Parts 2 and 3 on Reference Plan 66R-20057 (the "Maintenance Lands") (the Access Lands and the Maintenance Lands hereinafter referred to as the "Burdened Lands") for the purpose of maintenance of the Transferor's railway tracks and other related railway operations and for all purposes necessary for or incidental to the exercise and enjoyment of the rights therein reserved (the "Maintenance Easement") (the Access Easement and the Maintenance Easement hereinafter referred to as the "Easements").

The benefit of the Easements shall be appurtenant to and run with each part of the abutting and adjacent lands of the Transferor as described below (the "Benefited Lands") and shall be for the benefit of the Transferor and its successors, assigns, agents, employees, tenants, licensees, from time to time of the Benefited Lands and others claiming under them. The burden of the Easement shall bind the Transferee and its successors and assigns and others claiming through it and shall be annexed to and run with every part of the Burdened Lands.