Court and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20220215 DOCKET: C69470, C69471

Huscroft, Sossin and Favreau JJ.A.

BETWEEN

Collingwood Aviation Partners Ltd. Applicant (Respondent in Appeal)

and

Winterland Airfield Holdings Ltd. Respondent (Appellant)

AND BETWEEN

Winterland Airfield Holdings Ltd. Applicant (Appellant)

and

Collingwood Aviation Partners Ltd. Respondent (Respondent in Appeal)

Counsel: David W. Levangie and Teodora Prpa, for the appellant Nancy Roberts and Mark Sheeley, for the respondent

Heard: February 2, 2022 by video conference

On appeal from the judgment of Justice Edward M. Morgan of the Superior Court, dated April 26, 2021, with reasons reported at 2021 ONSC 3023.

Reasons for Decision

[1] The appellant, Winterland Airfield Holdings Ltd. (“Winterland”), owns and operates an airport in Collingwood, Ontario.

[2] The respondent, Collingwood Aviation Partners Ltd. (“CAPL”), owns the adjoining property and operates air services and a flight school. CAPL uses the runways on Winterland’s airport lands for its air services and the flight school.

[3] Winterland appeals the application judge’s judgment in which he granted declarations that CAPL is entitled to unimpeded access to the airport lands and that Winterland is not entitled to charge user fees to CAPL for access to those lands.

[4] For the reasons that follow, the appeal is dismissed.

Background

[5] Before 1968, the Town of Collingwood did not have an airport. The original owners of CAPL set up a company to build a runway on land owned by the Town that was designated for an airport. In exchange, the Town gave CAPL’s predecessor a plot of land abutting the airport lands. As part of the arrangement between the parties, CAPL’s predecessor also agreed to provide air services, including the operation of a flight school, on those lands.

[6] As described by the application judge, “[o]ver the decades, the relationship between the two owners embodied this symbiotic existence. Three consecutive owners of what is now the CAPL property provided the requisite air services, operated the flight school, and enjoyed unimpeded access to the airport’s land.”

[7] In 2014, after CAPL bought the flight school lands, it asked that the arrangement with the Town be reduced to writing. The parties entered an Operating Agreement on June 16, 2014. The Operating Agreement set out CAPL’s right to access the airport lands as follows:

The Owner [CAPL] and its tenants/licensees shall have full access to the Collingwood Region Airport’s runway systems and other facilities and services necessary for flight operation across the Airport Lands…on a 24 hour per day/365 days per year basis, subject to applicable government regulations, as long as an airport continues to be operated on the Airport Lands...

[8] In 2019, Winterland bought the airport from the Town. As part of this transaction, the Town assigned the Operating Agreement to Winterland.

[9] In December 2019, Winterland erected a wire fence that surrounded CAPL’s property on three sides. The fence only left a 90-foot wide opening along the eastern boundary between the properties, thereby reducing CAPL’s previous 240-foot access to the runways on the airport lands. The fence on the northern boundary of CAPL’s property impeded access to a field area that CAPL’s tenants used to turn airplanes around. The fence on the southern boundary blocked CAPL’s access to a drainage ditch, which caused problems with snow removal and flooding. The fence also blocked footpath access between the two properties.

[10] CAPL removed the wire fence from its eastern boundary a week after it was erected, but Winterland replaced the fence with a concrete barrier. The concrete barrier was removed in January 2020, pending the outcome of this litigation.

[11] CAPL brought an application to the Superior Court, seeking declaratory relief in relation to its right of access to the airport property. Winterland brought a cross-application in which it sought declaratory relief in relation to its rights to control access between the two properties. As part of the cross-application, Winterland also sought a declaration that CAPL was underinsured.

[12] The application judge granted CAPL’s application and dismissed Winterland’s cross-application. In doing so, he found that CAPL has a right of “unimpeded access” to the airport lands along CAPL’s eastern boundary, based on the Operating Agreement and a right of easement. He also found that Winterland was not entitled to charge any user fees for CAPL’s access to the airport lands. Finally, he found that Winterland did not meet its burden of proving that CAPL was underinsured. Based on these findings, the application judge made the following declarations:

a. a Declaration that the CAPL property has the benefit of full access to the airport property along the 240-foot boundary between the CAPL property and the airport property, being the eastern boundary to the CAPL property;

b. a Declaration that under the Operating Agreement and as a common law easement, the CAPL property has a right, subject to applicable government regulation, to unimpeded access to the airport property along the 240-foot eastern boundary of the CAPL property;

c. a Declaration that CAPL has no obligation to pay an access fee for the purpose of accessing the airport property;

d. an Order than any fence erected by Winterland to the north of the CAPL property is to be at least 30 feet north of the boundary line between the two properties;

e. a Declaration that CAPL has a right of access to the drainage infrastructure along its southern property line for the purposes of snow removal and for ensuring proper drainage on its property.

[13] By separate endorsement dated October 18, 2021, the application judge granted $311,228.77 in costs to CAPL.

[14] Winterland challenges all aspects of the application judge’s decision.

[15] Many of Winterland’s arguments invite this court to make different findings of fact and reweigh the evidence. However, it is not the role of the court to consider the issues decided by the application judge afresh. The court will only interfere with the application judge’s decision if he made errors of law or palpable and overriding errors of fact or mixed fact and law.

[16] As set out below, we are satisfied that the application judge made no reversible errors.

Access Rights in the Operating Agreement

[17] Winterland argues that the application judge erred in interpreting the reference to “full access” in the Operating Agreement to mean “unimpeded access”. The application judge found that “full access” meant “unimpeded access” based on the surrounding circumstances which, in this case, included evidence that the Town of Collingwood and CAPL intended the Operating Agreement to capture the access CAPL had enjoyed to the airport lands prior to the signature of the agreement. The application judge found that CAPL’s historical access to the airport lands was unimpeded. This is a finding of mixed fact and law which is entitled to deference and that is well supported by the record.

[18] Winterland argues that this interpretation of “full access” is unreasonable because it ignores the safety requirements of an airport. We disagree. The application judge was not satisfied that Winterland presented sufficient evidence of safety concerns to justify the proposed fencing. As part of Winterland’s evidence of safety concerns, it included a photograph of a child in the vicinity of the runway. While the application judge may have made a factual error in describing the timing of the photo, this error on its own was not palpable and overriding. It relates to one isolated incident and does not detract from the application judge’s overall assessment of the paucity of evidence presented by Winterland regarding safety concerns that would justify the fencing. In fact, the application judge found that the fencing posed concerns for the safe operation of the flight school. These were findings of fact available on the record.

[19] Winterland also argues that the application judge failed to consider s. 301.08 of the Canadian Aviation Regulations, SOR/96-433, which prohibits activities such as walking, standing, driving a vehicle or parking a vehicle or aircraft in the area of an aerodrome without permission of the operator. While the application judge did not address this argument in his decision, there is no requirement that a court consider all arguments made by a party. In any event, this provision does not run contrary to the application judge’s finding that the Operating Agreement gives CAPL unimpeded access to the airport lands. Rather, as pointed out by CAPL, the Operating Agreement gives CAPL the necessary permission to access the airport lands.

[20] Ultimately, the Operating Agreement and the declarations granted by the application judge require CAPL to comply with all government laws and regulations. If CAPL does not comply with a particular law or regulation, Winterland can pursue available remedies to enforce compliance. The declarations made by the application judge do not preclude Winterland from doing so.

[21] Accordingly, we see no error in the application judge’s interpretation of the access clause in the Operating Agreement.

Easement by implication

[22] We see no errors in the application judge’s finding that CAPL has a right to unimpeded access to the airport property on the basis of a common law easement by implication.

[23] Winterland does not dispute that the application judge properly articulated the test for an easement by implication but argues that the application judge erred in his application of the test.

[24] The application judge relied on the following test for an easement by implication set out in Anne Warner La Forest, Anger & Honsberger, Law of Real Property, loose-leaf, 3rd ed. (Toronto: Thompson Reuters, 2021), at para. 17.12:

In order for a quasi-easement which was exercised during unity of ownership to become an easement by implication of law, the right claimed must meet certain criteria:

a) it must be necessary to the reasonable enjoyment of the part granted;

b) it must have been used by the owner of the entirety for the benefit of the part granted up to and at the time of the grant; and

c) it must have been apparent at the time the land for which the easement is claimed was acquired.

For an easement to be apparent, its previous use must be indicated by some visible, audible or other apparent evidence on either the quasi-dominant or the quasi-servient tenement which could be seen, heard or smelled by a reasonable inspection.

[25] The application judge made findings of fact about the agreement between the Town and CAPL’s predecessor at the time the lands were severed. Based on those findings, the application judge was satisfied that the rights of access “were apparent at the time the agreement was concluded”. For example, the application judge found that it would be “impossible” for CAPL’s predecessor to operate a flight school without “broad runway access on CAPL’s eastern boundary, as well as a buffer zone access on CAPL’s northern side and footpath access for pilots and students”.

[26] Winterland argues that the application judge erred in finding that unimpeded access is “necessary” to CAPL’s reasonable enjoyment of its lands. The application judge made no such error. He considered that “necessity” forms part of the test for an easement by implication and he found that “being ringfenced and losing its historic access to the airport lands would be substantially more harmful to it than a mere inconvenience”. The application judge went on to review the evidence of how CAPL had to conduct its business while the fencing was up and the overall impact of the fencing on the three relevant sides of the property. He ultimately concluded that the fencing and restrictions are “not just inconvenient, they are a serious interference with CAPL’s use of its property and, in addition, impose unnecessary hazards for the operation of the aircraft by CAPL and its tenants”. These were findings of fact supported by the record.

[27] Winterland also argues that the application judge erred in failing to address and find that a 1992 agreement extinguished any easement right that may have previously existed. Again, the court is not required to address all arguments made by the parties. In this case, as pointed out by CAPL, the 1992 agreement did not address access rights and, therefore, there is no basis for a finding that it extinguished the easement the application judge found exists in this case.

[28] Finally, Winterland argues that the application judge erred by failing to consider that, even if an easement exists, it does not preclude Winterland from exercising some control over access to its property through the use of fences. In making this argument, Winterland relies on the decision in Gardiner v. Robinson, 2006 BCSC 1014, where the Supreme Court of British Columbia held that broad rights of access to footpaths did not prevent a property owner from erecting a fence and gates. However, in Gardiner, the Court emphasized, at para. 27, that the landowner’s ability to erect fencing and gates depends on whether they “interfered in a substantial and unreasonable way with the petitioners’ right of access”. As reviewed above, this is precisely the analysis the application judge conducted in this case. He concluded that the proposed fencing would constitute a substantial interference with CAPL’s enjoyment of its property.

[29] Ultimately, the application judge committed no errors in his application of the common law test for an easement by implication.

User fees

[30] We see no error in the application judge’s finding that Winterland cannot charge user fees to CAPL for access to the airport lands.

[31] The Operating Agreement contains the following provision dealing with access fees:

This Agreement does not preclude the Owner [CAPL] or tenants of the [CAPL] Property to be exempt from any applicable user fee as determined by the Town from time to time.

[32] The application judge held that this provision does not allow Winterland to charge access fees to CAPL, reasoning that “Winterland cannot charge for a right of access which CAPL already owns”. The application judge held that the provision in the Operating Agreement dealing with fees confirms that “CAPL will not be exempt from user fees levied on users of the Airport generally, with the exception, of course, of those fees that touch on access to the airport lands, which are specifically given to CAPL as of right”.

[33] Winterland argues that this finding is contrary to the plain wording of the relevant provision and that it is commercially unreasonable.

[34] When interpreting the Operating Agreement, the application judge was required to consider the wording of the relevant provision and the factual matrix. In this case, given his finding that the Operating Agreement and implied easement give CAPL unimpeded access to the airport lands, we see no error in the application judge’s finding that Winterland has no right to charge fees for this access.

[35] Winterland’s inability to charge access fees does not make the agreement commercially unreasonable. Winterland is entitled to charge other fees and, as pointed out by CAPL, the Town and now Winterland have derived other benefits from the arrangement between the parties, including CAPL’s obligation to buy fuel exclusively at the airport.

Insurance coverage

[36] We see no error in the application judge’s finding that Winterland did not prove that CAPL is underinsured.

[37] The Operating Agreement requires CAPL to “at its own expense, procure and maintain in force adequate insurance for the CAPL Property and its uses that is acceptable to Winterland, acting reasonably, naming Winterland as additional insured”. When Winterland raised the issue of insurance, CAPL increased its coverage from $1,000,000 to $5,000,000 and produced a Certificate of Insurance.

[38] The application judge rejected Winterland’s argument that CAPL was underinsured on the basis that there was no objective evidence to support this position.

[39] Winterland argues that the application judge improperly shifted the burden of proof on this issue. We see no merit to this argument. Winterland sought a declaration regarding the issue of insurance on the cross-application. It provided no evidence—notably presenting no expert evidence—that CAPL’s insurance coverage was inadequate. In the circumstances, the application judge made no error in dismissing this aspect of Winterland’s cross-application.

Dismissal of cross-application

[40] Winterland argues that the application judge erred in dismissing the cross-application without giving it any proper consideration. Specifically, it argues that it had put forward a proposal for a rolling fence between the properties that could be opened as needed.

[41] We see no merit to this argument. While the application judge’s conclusions on the cross-application are contained in a conclusory one paragraph section of his decision, it is evident from his decision as a whole that he considered the applicant’s cross-application.

[42] For the most part, the cross-application was a mirror to CAPL’s application, and sought declarations related to the parties’ respective rights in relation to the boundaries between both properties. The application judge’s declarations address those issues.

[43] In addition, it was Winterland that raised the issue of insurance coverage in its cross-application, an issue that the application judge addressed and dismissed.

[44] Finally, while in its argument before this court, Winterland placed significant emphasis on the issue of a rolling fence, it is evident that this issue was not significant to the arguments before the application judge and does not detract from his finding that CAPL is entitled to unimpeded access to the airport lands.

Motion for leave to appeal costs order

[45] Following the commencement of the appeal, the appellant served a supplementary notice of appeal, seeking leave to appeal the application judge’s costs order.

[46] Other than this supplementary notice, the materials filed by the appellant did not include a costs order or the application judge’s costs endorsement. The appellant’s factum did not address the issue of costs and the appellant’s counsel did not make any arguments on the issue during oral arguments.

[47] In the circumstances, we see no basis for granting the motion for leave to appeal the application judge’s costs order.

Conclusion

[48] For these reasons, we dismiss the appeal and the motion for leave to appeal costs.

[49] The respondent is entitled to costs of the appeal which we fix at $60,000, all inclusive.

“Grant Huscroft J.A.”

“L. Sossin J.A.”

“L. Favreau J.A.”