SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO: CV-11-439349
DATE: 20120118

RE: Durland Properties Inc.
Plaintiff

• and -

Intracorp Projects (Milton on the Escarpment) Ltd.
Defendant

BEFORE: The Honourable Mr. Justice Sidney N. Lederman

COUNSEL:
Andrea M. Habas,
for the Plaintiff

Jonathan L. Rosenstein,
for the Defendant

HEARD : January 13, 2012

E N D O R S E M E N T

[ 1 ] The plaintiff seeks an interim and interlocutory injunction to restrain the defendant from continuing an alleged trespass upon and over its property and a mandatory interim and interlocutory injunction requiring the defendant to remove its equipment, fencing, refuse, refuse bins and, particularly, a stock pile of 6,500 cubic meters of topsoil along the western edge of the property.

[ 2 ] The parties had entered into an agreement of purchase and sale wherein the defendant purchased certain lands from the plaintiff to be developed as a residential subdivision.

[ 3 ] The plaintiff had not wanted to sell, inter alia, a portion of the lands (namely, “the commercial block”) which it wanted to develop itself. However, there was no practical way to sever the commercial block from the rest of the lands before the sale. It was believed, however, that once the lands had draft plan approval, severance would be easy and the commercial block would be re-conveyed to the plaintiff.

[ 4 ] The agreement also provided that until the re-conveyance the defendant would lease back the commercial block to the plaintiff. Accordingly, a lease agreement was entered into by the parties for this purpose.

[ 5 ] During the development process, as a result of requirements by the Town of Milton, the commercial block had to be enlarged by approximately one acre. The parties agreed that the defendant would on the re-conveyance sell the enlarged commercial block to the plaintiff.

[ 6 ] As a result of the town’s additional requirements, the parties entered into a further agreement dated August 28, 2009 (the “Second Agreement”).

[ 7 ] The Second Agreement, in the form of a letter, was drafted by and is on the letterhead of an experienced real estate law firm, who were the solicitors for the defendant.

[ 8 ] The Second Agreement, in part, allowed for certain use by the defendant of the enlarged commercial block for a specified time. The right to use the land is set out in paragraph 9 of the Second Agreement as follows:

9. Our client [Intracorp] will be entitled to operate a sales and/or construction trailer/office on the commercial block and the Additional Commercial Lands [“the site”] for a period expiring upon the later of (i) one year after registration of its plan of subdivision, and September 1, 2011. During the period of its occupation, our client [Intracorp] will be responsible for utilities and general clean up of the Additional Commercial Lands and upon removal of the sales trailer at the end of the term, will make good all damage caused by such removal. Our client [Intracorp] will pay to your client [Durland] a monthly occupation fee of $1,000 per month for the period from the date of registration of its plan of subdivision until the end of the terms. Our client [Intracorp] shall have the right of early termination of this arrangement on 30 day’s written notice to your client [Durland].

[ 9 ] The defendant proceeded to make use of the commercial block not only for the operation of a trailer, but has also dumped mounds of topsoil on the property; fenced a compound in which it has been storing construction equipment and materials; and placed refuse bins on the lands. All of this has been meant to support the sales and construction activities that were taking place on the adjacent residential subdivision.

[ 10 ] The plaintiff contends that paragraph 9 of the Second Agreement, as reasonably read, only provides to the defendant the right to operate a sales and/or construction trailer/office on the commercial block, as enlarged. The additional usages, i.e. stock piling of topsoil, equipment, material and dumping of refuse, constitute a trespass on and over the plaintiff’s lands.

[ 11 ] The defendant contends that paragraph 9, in fact, creates a lease and not just a right or licence to operate a trailer for a specified period.

[ 12 ] This cannot be so because:

a) nothing in paragraph 9 grants the defendant exclusive possession of the commercial block; and

b) the wording of the provision is clear.

Had the parties intended to enter into a lease, such language would have been utilized by the sophisticated real estate lawyers acting for the defendant, particularly since these parties had just recently entered into a lease agreement in unambiguous terms.

[ 13 ] Paragraph 9 of the Second Agreement allowed the defendant to operate only a trailer/office which would occupy the lands.

[ 14 ] In argument, Mr. Rosenstein, on behalf of the defendant, submitted that even if paragraph 9 created a licence and not a lease, the only issue then became whether the defendant was exceeding the limited purpose of operating a trailer. If so, he argued that would not constitute trespass as the licensee had a right of occupation. If a court found that the defendant exceeded its rights under the licence, that would be a breach of contract giving rise to only monetary damages. In other words, a remedy may lie in damages for breach of contract but not an injunction for trespass.

[ 15 ] Again, the wording of paragraph 9 is clear. It does not provide a general right to the defendant of occupation of the enlarged commercial block, but rather it refers to “its occupation” meaning the trailer/office. There is only a right to place and operate a trailer which occupies the lands.

[ 16 ] Accordingly, the defendant’s unauthorized use would appear to amount to a trespass. The acts of trespass committed by the defendant are clearly intentional and deliberate. To allow the continuation of the trespass would be to sanction the defendant’s wrongful acts and allow it to, in effect, usurp the use of the plaintiff’s property without its consent. In such cases, the remedy of an injunction seems to follow as of right. In his book, “Injunctions and Specific Performance”, (Canada Law Book, loose-leaf edition), Robert J. Sharpe states at paragraph 4.590 as follows:

4.590 Where there is a direct interference with the plaintiff’s property constituting a trespass, the rule favouring injunctive relief is even stronger than in the nuisance cases. Especially where the trespass is deliberate and continuing, it is ordinarily difficult to justify the denial of a prohibitive injunction. A damages award in such circumstances does amount to an expropriation without legislative sanction. The courts have expressly condoned injunctive relief, even where the balance of convenience is overwhelmingly in favour of the defendant. In trespass, there has been less concern than in nuisance with the problem of “extortion”. Even if the plaintiff is merely holding out for the highest possible price, and suffers no out-of-pocket loss because of the trespass, the courts have awarded injunctions.

(See also Lewvest Ltd. v. Scotia Towers Ltd. et al , [1981] N.J. No. 220 (S.C.T.D.)

[ 17 ] In any event, if the usual RGJ-MacDonald test is to be applied as urged by the defendant, I find that:

a) there is more than a serious issue to be tried. The plaintiff has made out a strong prima facie case;

b) the plaintiff intends to proceed immediately to prepare the commercial block for development by commencing site work including grading, soils testing and preliminary work for the installation of servicing for a retail complex. Any harm caused by delay in making use of its own land cannot be easily translated into money damages, and amounts to irreparable harm;

c) the defendant is obliged to remove the topsoil before the end of May 2012 in any event. Although there is some inconvenience suffered by the defendant in that it will have to remove the topsoil from the plaintiff’s lands four months before it intended to do so, it has provided no evidence of what that would cost or that it would create any real hardship. It cannot be said that the balance of convenience favours the defendant.

[ 18 ] Accordingly, an order will go for an interim and interlocutory injunction restraining the defendant from continuing its trespass upon and over the plaintiff’s property, and a mandatory interim and interlocutory injunction requiring the defendant to remove from the plaintiff’s property its equipment, fencing, refuse, refuse bins and the stockpile of topsoil.

[ 19 ] Counsel are in agreement that the costs of this motion should be fixed at $11,000 all inclusive. Therefore, the plaintiff will have its costs in that amount payable by the defendant within 30 days.

LEDERMAN, J.

DATE: January 18, 2012