Court of Appeal for Ontario

Date: July 18, 2018 Docket: C64729

Judges: Hoy A.C.J.O., Brown and Trotter JJ.A.

Between:

James English and Jill Perry Respondents (Applicants)

and

David Perras and Brenda Perras Appellants (Respondents)

Counsel

For the Appellants: Roxie Graystone

For the Respondents: Roberto D. Aburto and Jacob Polowin

Heard: May 17, 2018

On appeal from: The judgment of Justice Sally A. Gomery of the Superior Court of Justice, dated December 8, 2017, with reasons reported at 2017 ONSC 7365.

Trotter J.A.:

A. Introduction

[1] This appeal involves a dispute between neighbouring homeowners over a 14-foot wide strip of land between their houses. There are garages at the rear of the lots, accessed exclusively via this strip of land. The property line runs down the middle of this strip, leaving enough space for cars to pass on each side.

[2] In these proceedings, this strip of land has been casually referred to as "the Shared Driveway." However, the land consists of two abutting driveways. The issue to be determined on this appeal is the legal significance of historical incursions by one neighbour on the property of the other.

[3] In recent years, there have been ongoing disputes about the use and maintenance of this land. The rancour worsened when Mr. and Mrs. Perras ("the Perrases") erected a fence down the centre of this strip of land, just inside their property line. The fence leaves enough room for the Perrases to drive vehicles from the road to their garage.

[4] It is a different story for Mr. English and Ms. Perry. There is a retaining wall at the front of their house that narrows their driveway. Without the retaining wall, they would be able to use their driveway; with it, they cannot.

[5] Despite the conflict between the current owners, their legal rights fall to be determined largely by the conduct of their predecessors in title, in more peaceful times. The application judge found that, as a result of the historical use of the disputed land, Mr. English and Ms. Perry are entitled to a prescriptive easement over the Perrases' driveway. She ordered the Perrases to remove their fence.

[6] The Perrases appeal, contending that the requirements for a prescriptive easement have not been established. For the reasons that follow, I would allow the appeal and set aside the order of the application judge.

B. Summary of the Facts

(1) The Parties and the Houses

[7] The two houses were built in Ottawa sometime prior to 1928. The Perrases acquired title to 373 Third Avenue ("373") on March 28, 2003. Mr. English and Suzanne English ("the Englishs") bought 371 Third Avenue ("371") as joint tenants in 1980. Title was transferred solely to Mr. English in 1994. Jill Perry moved into the home in 2006, and they married in 2014.

[8] Leading up to the purchase of 371 in 1980, the Englishs' lawyer obtained a land survey from Fred H. Gooch ("the Gooch survey"). In his letter instructing Mr. Gooch, dated December 29, 1979, the lawyer wrote:

I draw your attention [to] one unusual matter. There appears to be a common driveway used by the present owner of 371 Third Avenue along with his immediate westerly neighbour at 373 Third Avenue. There is nothing contained in the titles or in any deeds suggesting a common driveway. [Emphasis added.]

[9] In a survey dated January 22, 1980, Mr. Gooch described a mutual right-of-way over the strip of land between the houses. On the application, there was no explanation of why Mr. Gooch came to legally characterize this land as he did.

(2) The Agreement

[10] A few weeks after the survey was prepared, on February 26, 1980, the predecessors in title to 371 and 373 entered into an agreement concerning the abutting driveways. The Perrases refer to this document as "the Easement Agreement"; Mr. English and Ms. Perry prefer "the Driveway Agreement." What is important is the substance of the document, not the parties' attempts to label it in a manner that suits their own purposes. The document describes itself as "this Agreement" and contains no reference to a "driveway" or an "easement." I will refer to it as "the Agreement."

[11] First and foremost, the Agreement recorded mutual grants of a "right-of-way" over portions of the strip of land between 371 and 373. It then provided that the "said laneway" would be used to access the rear of both lots and that the parties agreed not to block the "said common laneway" with cars or other objects. The parties also agreed to split the cost of necessary repairs or maintenance. Significantly, the Agreement was limited to 21 years, less a day.

[12] The Agreement was registered on the title of 371 on February 29, 1980. This was the very same day that the Englishs acquired title to this property. The Agreement expired in February of 2001, just over two years before the Perrases acquired 373.

(3) Prior Use

[13] There was little evidence as to the use of the property between the houses over the years. The application record included historical maps, as well as aerial photos taken at various times, mostly of poor quality. The photos show the space between the two houses, and garages at the back of the lots.

[14] In one of his affidavits filed on the application, Mr. English interpreted the photos and maps and asserted that "there has been continuous use of the Shared Driveway by the owners of 371 for the purposes of, at the very least, ingress and egress dating back to at least 1928." Mr. English referred to the Gooch Survey, as well as the Agreement (both of which were attached to his first affidavit). Mr. English made no reference to the 21-year limitation in the Agreement, nor did he mention the retaining wall, which is discussed in more detail below.

[15] Mr. English and Ms. Perry also relied upon the affidavit of Brian MacNamara. His parents purchased 373 in 1957, and his mother sold the property to the Perrases in 2003.

[16] Mr. MacNamara lived at 373 continuously between 1957 and 1976, and then visited about once a month from 1976 to 1979, while he was in school. He swore that, during this time, the residents of 371 and 373 passed over a portion of each other's driveway as they drove their cars to and from the parking spaces to the rear of the properties.

[17] Mr. MacNamara's affidavit is lacking in certain respects. It is silent about his age at the relevant times. The Perrases assert that he may have been a child when he made some of his observations. The application judge dismissed this concern, at para. 16, noting that Mr. MacNamara could have been cross-examined. Mr. MacNamara's affidavit sheds no light on any arrangement his parents may have had with their neighbours about the use of the land. Significantly, the affidavit is silent on the Agreement, entered into just before the Englishs bought the neighbouring property in 1980. The Agreement remained in force until 2001, shortly before Mr. MacNamara's mother sold 373 to the Perrases.

(4) The Fence and the Retaining Wall

[18] According to Mr. English's first affidavit, by 2015, the driveways were in serious need of repair. A dispute arose about the costs of the repair. On November 16, 2016, the Perrases began construction on their fence, which was completed two days later.

[19] In his first affidavit, Mr. English asserted that he and Ms. Perry have been denied full enjoyment of the property because they can no longer access the two parking spots at the rear of their property. They have been forced to park on the street, resulting in numerous parking tickets.

[20] As noted above, there is a retaining wall on the front lawn of 371, narrowing its driveway. Recent photographs show that it is quite prominent. The wall juts out such that, for the wall's entire length, the 371 driveway is not flush with the house. Mr. English's affidavit is silent about the retaining wall. It is not mentioned in Mr. MacNamara's affidavit. Thus, there is no evidence about when it was built, nor for what purpose.

[21] The single reference to this structure in the record is found in the affidavit of Brian Webster, a land surveyor retained by the Perrases. He conducted a survey on June 9, 2017. Mr. Webster referred to it as a "rock retaining wall" and indicated that it reduces the width of the 371 driveway by almost two feet. On appeal, counsel for Mr. English and Ms. Perry assert that there is no evidence that the use of the driveway is impeded by the retaining wall. However, this is obvious from Mr. Webster's affidavit, his survey, and the photographs filed on the application. Moreover, the application judge found this as a fact (at para. 4).

[22] Mr. English swore a second affidavit, this time in response to Mr. Webster's affidavit. In this affidavit, Mr. English recounted what his lawyer had told him in 1980 about the shared use of the disputed land in the absence of any shared use agreement. He also said that, during his time at 371 (since 1980), he passed over the property line in accessing and leaving his parking spots at the back of the house. His neighbours did the same. Significantly, in this second affidavit, which is meant to be in response to Mr. Webster's, Mr. English again makes no reference to the retaining wall.

C. Reasons of the Application Judge

[23] The application judge concluded that Mr. English and Ms. Perry should succeed, finding that they acquired a prescriptive easement based on the doctrine of lost modern grant.

[24] The application judge found that the predecessors in title had used a portion of each other's property over the years, as of right, and not by permission. She disagreed that the Agreement, signed in early 1980, undermined the claim; instead, she found that it clarified the mutual rights of the owners at the time.

[25] The application judge also found that the use of the disputed land was reasonably necessary to the enjoyment of 371. The retaining wall was critical to this aspect of her decision. The application judge recognized, at para. 4, that "there is not enough space to drive a car between the fence and a retaining wall that runs along the outer side of the driveway on 371…Mr. and Mrs. Perras still have the use of the driveway, because there is no similar retaining wall on 373" (emphasis added). However, she ultimately held, at para. 31, that there was no reason to assume that the retaining wall was not practically necessary; nor was she prepared to conclude that the wall could be removed (para. 32).

D. Issues on Appeal

[26] The Perrases argue that the application judge erred in her application of the doctrine of lost modern grant by: (1) finding that the use of the driveway had been "as of right", as opposed to by permission, and (2) finding that the easement was reasonably necessary to the enjoyment of 371. The latter argument turns on the significance of the retaining wall.

E. Analysis

(1) Introduction

[27] The Perrases challenge the application judge's conclusion that an easement had been acquired through the doctrine of lost modern grant. The essential features of an easement are set out in Barbour v. Bailey, 2016 ONCA 98, 345 O.A.C. 311, in which Roberts J.A. wrote, at para. 56:

To make out an easement, a claimant must satisfy the following four essential characteristics of an easement or right-of-way:

i. There must be a dominant and servient tenement;

ii. The dominant and servient owners must be different persons;

iii. The easement must be capable of forming the subject matter of a grant; and

iv. The easement must accommodate – that is, be reasonably necessary to the better enjoyment of – the dominant tenement.

See also Depew v. Wilkes (2002), 60 O.R. (3d) 499 (C.A.), at paras. 18-23; Kaminskas v. Storm, 2009 ONCA 318, 95 O.R. (3d) 387, at paras. 26-28; Bruce H. Ziff, Principles of Property Law, 6th ed. (Toronto: Carswell, 2014), at pp. 381-85; Anne Warner La Forest, Anger & Honsberger Law of Real Property, loose-leaf (2017, Rel. 19), 3rd ed. (Toronto: Thomson Reuters), vol. 2, at p. 17-3.

[28] The doctrine of lost modern grant is recognized as a method for acquiring a prescriptive easement. It involves requirements in addition to the constituent elements of an easement. In 1043 Bloor Inc. v. 1714104 Ontario Inc., 2013 ONCA 91, 114 O.R. (3d) 241, Laskin J.A. described the doctrine in the following way, at para. 91:

[T]he acquisition of a prescriptive easement by lost modern grant rests on a judicial fiction. The law pretends that an easement was granted at some point in time in the past but that the grant of the easement has gone missing. A prescriptive right emerges from long, uninterrupted, unchallenged use for a specified period of time – in Ontario, 20 years…

See also Charles Harpum, Stuart Bridge & Martin Dixon, Megarry & Wade: The Law of Real Property, 8th ed. (London: Sweet & Maxwell, 2012), at pp. 1309-11; Ziff, at pp. 392-93.

[29] In Ontario, there are certain restrictions on prescriptive easements; they have been abolished with respect to properties registered in the Land Titles Act, R.S.O. 1990, c. L.5, s. 51. Consequently, the 20-year period must precede the transfer of property into the Land Titles system. In this case, both properties were registered in the Land Titles system in 1996. Accordingly, Mr. English and Ms. Perry were required to prove "uninterrupted and unchallenged use" for any 20-year period before 1996: see Kaminskas v. Storm, at para. 31.

[30] The courts have insisted on a high standard for establishing a prescriptive easement by lost modern grant. Numerous policy reasons are offered in support of this cautious approach. The recognition of such a claim burdens the servient owner's property, without any compensation: 1043 Bloor Inc., per Laskin J.A., at paras. 102-104. See also Ebare v. Winter (2005), 193 O.A.C. 174 (C.A.), at paras. 27-28. Moreover, as Cory J.A. said in Henderson v. Vouks (1982), 35 O.R. (3d) 379 (C.A.), at p. 384: "Its ready invocation may discourage acts of kindness and good neighbourliness; it may punish the kind and thoughtful and reward the aggressor." See also 1043 Bloor Inc., per Gillese J.A., at para. 83; Carpenter v. Doull-MacDonald, 2018 ONCA 521, at para. 6.

[31] There are countervailing concerns. As Laskin J.A. also points out in 1043 Bloor Inc., at para. 105, "the courts ought reasonably to protect the dominant owner's reliance interest where the usage has been open and uninterrupted for many years and where the evidence clearly shows that the servient owner has acquiesced in that usage."

[32] The outcome of this case should not be understood as an endorsement of the Perrases' aggressive conduct in erecting the fence. It is not behaviour that is worthy of reward. Quite the contrary. Nevertheless, in this case, it is the conduct of the predecessors in title during the putative prescriptive period (1957 to 1979) that matters, not that of the present-day owners. I turn now to the prescriptive period.

(2) Land Not Used as of Right

[33] The key issue in this case is how to characterize the use of the land during the prescriptive period. As Laskin J.A. noted in the above-quoted passage of 1043 Bloor Inc., the use must be "uninterrupted and unchallenged" throughout the 20-year period. And the use must be "as of right", not by permission.

[34] This element has been emphasized in a number of this court's decisions. In Henderson v. Volk, Cory J.A. said, at p. 383: "the enjoyment must not be permissive. That is to say, it cannot be a user of the right-of-way enjoyed from time to time at the will and pleasure of the owner of the property over which the easement is sought to be established." In Kaminskas v. Storm, Blair J.A. said, at para. 30: "User 'as of right' means that the use has been uninterrupted, open, peaceful and without permission for the relevant period of time." In Mason v. Morrow (1998), 114 O.A.C. 194 (C.A.), this court said, at para. 5: "user permitted through good-neighbourliness, and enjoyed on that basis, is not sufficient to acquire an easement by prescription." See also Garfinkel v. Kleinberg and Kleinberg, [1955] O.R. 388 (C.A.), at p. 398; 1043 Bloor Inc. at paras. 58-61, per Gillese J.A.; and Ziff, at pp. 392-93.

[35] There is sometimes a fine line between acquiescence in another's exercise of easement-like rights and use by permission: see 1043 Bloor Inc. at para. 100, per Laskin J.A.; Condos and Castles Realty Inc. v. Janeve Corp., 2015 ONCA 466, 255 A.C.W.S. (3d) 777, at para. 19; Ziff, at p. 393. As such, there must be clear and unambiguous evidence that the use of the land was as of right and not by permission: Carpenter v. Doull-MacDonald, 2017 ONSC 7560, 287 A.C.W.S. (3d) 580, at paras. 50-51, aff'd 2018 ONCA 521. If the evidence is equally consistent with both uses, a claim based on lost modern grant must fail: see Mason v. Morrow, at para. 5.

[36] In this case, the evidence did not establish anything more than permissive use during the prescriptive period. At best, the evidence showed that the occupants of 371 and 373 permitted each other to cross the property line as they went to and from their parking spots. There was no evidence that the occupants of either dwelling did so as a matter of right: see Jaz Management Services Ltd. v. VBI Group Inc., 2013 ONCA 644, 235 A.C.W.S. (3d) 550, at para. 2.

[37] The application judge placed great reliance on the evidence of Mr. MacNamara. His evidence tended to support the respondents' claim, but only to a limited extent. He described the conduct of the occupants of 371 and 373, but he failed to shed any light on how his parents regarded this situation from a legal point of view.

[38] The application judge also relied on the Gooch survey. However, it is impossible to get beneath the surface of his survey. There is no explanation for his conclusion on the issue that is the very subject matter of this litigation. Without more, it was worthless.

[39] Nevertheless, having accepted this evidence, the application judge, at para. 21, referred to Condos and Castles, in which Lauwers J.A. said, at para. 17: "Once the appellant had proven facts that support the inference of acquiesce[nce] in 20 years of use, the evidentiary burden passed to the appellant to lead evidence to rebut the inference by proving the use was by way of permission." The application judge held that there was no evidence to rebut this inference. I respectfully disagree.

[40] The Agreement was compelling evidence that the use during the prescriptive period was by way of permission. I do not accept the conclusion that this document merely clarified the existing rights of the owners at the time, crystallizing in 1979. If this were the case, and there had been a pre-existing right-of-way, it would make no sense to enter into an Agreement that limited its operation to 21 years. The record suggests that both owners were unsure of their respective rights. This is all the more significant because one of the signatories to the Agreement was Harry MacNamara, who had lived at 373 during the prescriptive period that his son purported to describe. The Agreement undermines the value of his son's affidavit.

[41] The Agreement must be viewed from a broader perspective. The Englishs were interested in buying 371. The letter from their lawyer to the surveyor, referenced in para. 8 above, demonstrates concern about his clients' ability to use this land. Despite having a survey that described an unregistered right-of-way, the Englishs took title to 371 knowing that the Agreement, time-limited as it was, had been registered on title that very same day.

[42] The application judge discounted the value of Agreement, having found that the right-of-way already existed when it was signed. As she said at para. 25 of her reasons:

If an easement already existed based on 20 years of uninterrupted, continuous and peaceful use, it did not wink back out of existence just because the parties' predecessors in title failed to recognize it at the time. The failure of property owners to formally recognize an easement is the whole rationale for the doctrine of the lost modern grant. Neglecting to record the easement on title does not defeat it, if the claimant can prove that it exists. Similarly, neglecting to recognize the right in a private agreement does not defeat the claim, if the court agrees that an easement existed prior to its signature. [Emphasis added.]

[43] The question before the application judge was not whether the easement had winked out of existence; it was whether it existed in the first place. The fact that the Agreement was entered into at all was compelling evidence that the predecessors in title had been acting as good neighbours in permitting incursions on each other's property.

[44] Respectfully, I find that the application judge committed palpable and overriding error in finding that the evidence of Mr. MacNamara and the Gooch survey supported the inference of acquiescence in 20 years of use. The Agreement made that inference untenable. Alternatively, if the MacNamara evidence and Gooch survey did support the inference, it was rebutted by the Agreement. Either way, the claim for a prescriptive easement must fail.

[45] Before leaving this ground of appeal, I note that it is possible for an easement to be released, expressly by agreement or impliedly through abandonment: see Ziff, at pp. 397-98; Jonathan R. Gaunt, Q.C. & Sir Paul Morgan, Gale on Easements, 20th ed. (London: Sweet & Maxwell, 2017), c. 12; La Forest, vol. 2, at pp. 17-27 to 17-28. It would appear that this was not a live issue on the application. On appeal, neither counsel wished to pursue this line of thought when raised by the panel. This is not meant to be critical of counsel. It may be that the record, which was already sparse, was incapable of clarifying whether the parties to the Agreement intended to create a time-limited right-of-way, or whether they meant to mutually release and/or vary a pre-existing easement.

(3) Necessary to the Enjoyment of the Property

[46] The Perrases also argue that the application judge erred in finding that a right-of-way is reasonably necessary to the enjoyment of 371. I accept that the use of the 371 driveway is reasonably necessary to the enjoyment of 371. However, the question is whether the claimed prescriptive easement is reasonably necessary to the enjoyment of 371, including its driveway. As discussed below, the retaining wall is critical to this decision. If it were not for the retaining wall, Mr. English and Ms. Perry would be able to use their driveway. This raises the question of whether there is an alternative solution that would allow Mr. English and Ms. Perry to reasonably enjoy their property and its driveway without resort to a prescriptive easement (that is, by removing the retaining wall).

[47] In Depew v. Wilkes, at para. 23, Rosenberg J.A. held that reasonable necessity for the better enjoyment of the dominant tenement is a requirement for a prescriptive easement. As he explained at para. 24:

The reasonable necessity requirement is fact specific and must be applied in a flexible manner. As was said in [Oosterhoff, A.H., and W.B. Rayner, Anger & Honsberger: Law of Real Property, 2nd ed. (Aurora: Canada Law Book, 1985)]…at p. 927:

What is reasonably necessary must be a flexible criterion and have reference to current social conditions and the prevailing patterns and trends of conduct. What today might not be regarded to be a reasonable amenity for the better enjoyment of a property might be regarded as a reasonable amenity tomorrow.

[48] In that case, this court upheld the trial judge's conclusion that, even though other parking for cottagers was available nearby, the putative easement claimed over parking spaces adjacent to the cottages was reasonably necessary. As Rosenberg J.A. held at para. 26, "the fact that an alternative exists does not preclude a finding that the easement is reasonably necessary for the better enjoyment of that tenement."

[49] Depew was followed in the recent case of Barbour v. Bailey. In that case, the applicant brought a claim for possessory title by adverse possession, or alternatively a prescriptive easement. The applicant owned a cottage on an island that was accessible by a footpath that joined the island with a beach. Both the footpath and the beach were property of the respondent, who objected to the claim. While the footpath provided the more convenient route to the island, the claimant and her family could also access the island by boat or by wading through the water.

[50] After referring to the passage from Depew v. Weekes cited above, Roberts J.A. observed, at para. 58, that "not every use will be 'reasonably necessary' for the purposes of establishing a right to an easement. There must be a connection between the easement and the normal enjoyment of the dominant tenement..." She observed that "reasonably necessary" usually involves practical uses, such as parking spaces and driveways: para. 58, citing Depew v. Wilkes and Carlini v. Hammoud, 2011 ONCA 285, 200 A.C.W.S. (3d) 1206. She concluded, at para. 90, that despite there being alternatives to the footpath to reach the island, it did not prelude a finding that pedestrian use of a footpath was necessary to the reasonable enjoyment of the claimant's property. As she said, "pedestrian access is connected with the normal enjoyment of the cottage property."

[51] As I have noted above, the question of whether an easement is reasonably necessary for the enjoyment of 371 turns largely on the retaining wall. The application judge, at para. 4, accepted that without the retaining wall, Mr. English and Ms. Perry would be able to use their driveway. However, she was not persuaded that the existence of the retaining wall undermined the contention that the right-of-way was reasonably necessary to the enjoyment of 371. As she said at paras. 31-32 of her reasons:

This argument is speculative. Mr. Webster does not say when the retaining wall was built or the purpose it serves. There is no reason to assume that it is not practically necessary. In fact, Mr. Webster's use of the term "rock retaining wall" as opposed to "decorative rock wall" or simply "rock wall" suggests the opposite. There is also no evidence on when the wall was constructed. It may have been there since the house at 371 Third Avenue was built.

In these circumstances, I cannot conclude that Mr. English and Ms. Perry could simply get rid of the retaining wall. Mr. English's sworn statement that the easement is required for access to the back property is uncontradicted. I find that a right-of-way is reasonably necessary to the enjoyment of 371. [Emphasis added.]

[52] Respectfully, the application judge engaged in impermissible speculation to reach her conclusion on this issue. In doing so, she reversed the onus of proof, requiring the Perrases to establish that the easement was not necessary, and that the wall could be taken down. While the onus may shift on the issue of acquiescence and permission, in the manner described in Castles and Condos, it does not shift on this issue. It was up to Mr. English and Ms. Perry to establish that the easement was reasonably necessary to the enjoyment of 371. The history of the retaining wall was important.

[53] To use a simple example, suppose Mr. English and Ms. Perry were carless when the fence went up. Being disinterested in the vehicular use of their driveway, they decide to build the retaining wall for aesthetic reasons. Having later decided to use cars again, they would be hard-pressed to argue that the fence must come down because an easement was reasonably necessary to their enjoyment of 371. In these circumstances, they would be the authors of their own misfortune.

[54] On the evidence before the application judge, Mr. English and Ms. Perry stood in a similar position, in the sense that they did not prove that the easement was reasonably necessary to their enjoyment. In his second affidavit, Mr. English decided to remain silent on the provenance of the retaining wall, even after the Webster affidavit put the issue squarely in play. He did so at his own peril. His assertion that the easement was reasonably necessary to the enjoyment of 371 was just that – a factual claim. The application judge erred by essentially treating it as a legal conclusion on one of the elemental features of an easement.

[54] I would also allow the appeal on this ground.

F. Conclusion

[56] I would allow the appeal and set aside the order of the application judge.

[57] It was agreed between counsel that the successful parties should have costs of $20,000, inclusive of HST and disbursements. Accordingly, the appellants shall have their costs in this amount for the appeal. The costs order in favour of the respondents in the court below is set aside. In its place, and giving effect to the agreement of counsel, the appellants are entitled to $10,000, also inclusive of HST and disbursements.

Released: July 18, 2018

"Gary T. Trotter J.A."

"I agree. Alexandra Hoy A.C.J.O."

"I agree. David Brown J.A."