ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-11-104018-000T
DATE: 20120731

BETWEEN:

Angelo Pagliuca and Diamante Pagliuca Applicants – and – Paolini Supermarket Limited Respondent

Patrick Di Monte, for the Applicants
Patrick Summers, for the Respondent

HEARD: June 29, 2012

REASONS FOR DECISION

Edwards J.

Overview

[ 1 ] Three actions are commenced by the parties dating back to 1999 involving what, until the motion before the court, was an undisputed right of way. The applicants throughout these proceedings admitted that the respondent was the beneficiary of a right of way across lands owned by the applicants. One of the three actions proceeded so far as an adjudication on its merits before McIsaac J. and a subsequent appeal of his decision.

[ 2 ] Another action has settled and the action dismissed. Now the applicants seek an order that would have the effect of withdrawing their admission that there is a right of way – precisely the same right of way that the applicants admitted existed, and upon which this court and the Court of Appeal has already rendered a decision. Should this court exercise its discretion to allow for such an amendment in the face of these facts?

The Facts

[ 3 ] The applicants are the owners of a large farm property located in the Cookstown area along with a narrow strip of land which is approximately 60 metres x 20 metres. I will refer to this strip of land throughout as “the right of way.”

[ 4 ] The respondent is the owner of the property which is adjacent to both sides of the right of way. The respondent asserts its right to the use of the right of way to provide access to an IGA Supermarket and other businesses in a plaza located on the lands owned by the respondent.

[ 5 ] The applicants commenced its first action in November of 1999 against the respondent in which action the applicants asserted that the respondent had created a skating rink for its customers on the right of way without the applicants permission, and that the respondent had allowed transport trailers that were making deliveries to the supermarket to trespass on the property of the applicants. The applicants asserted that these activities constituted a trespass because fences located on the applicants land had been damaged. I will refer to this action as the “first action.”

[ 6 ] A second claim was commenced in Brampton, this time by the respondent, in which the respondent asserted that from 1989 it had used the right of way for access to its plaza and that monies had been spent on maintaining it and improving the right of way. In this action, which I will refer to as the “second action”, the respondent alleged that the applicants had closed off access to the right of way by constructing a post and wire fence surrounding the right of way with a locked gate.

[ 7 ] The third proceeding was commenced in Barrie in 2006 in which the applicants alleged that the respondent had constructed a sod berm which encroached on the applicant’s lands. The applicants sought a declaration of encroachment as well as damages for trespass. This action proceeded before McIsaac J. on December 7, 2006, who, relying on the applicants evidence which asserted the right of way, determined that the berm did encroach on the right of way and constituted a trespass. The respondent was ordered to remove that part of the offending berm and the issue of damages was left to be dealt with by a trial of an issue.

[ 8 ] The respondent appealed the decision of McIssac J. to the Court of Appeal which was heard on September 11, 2007 and disposed of by way of the following endorsement:

We see no error in the finding of trespass. The appellant in effect appropriated 210 sq. metres of the respondents’ land to facilitate the construction of a Tim Hortons. The appellant offered no evidence that the cost of removing the encroachment would be oppressive. The land on which the berm was constructed is a 66’ wide strip affording access to the respondents’ lands. While the trial judge directed the trial of an issue as to damages, he was entitled on the record to order an injunction and as he did so, the only issue remaining as to damages relates to any loss up to the time the encroachment is removed.”

[ 9 ] I will refer to the action commenced in Barrie, which has been dealt with by the order of Justice McIsaac as the “third action.” All three actions were consolidated in July of 2003 and transferred to Newmarket. A pre trial was held with respect to all three actions in Newmarket on April 24, 2012. As a result of that pre trial the first action was settled. I was not advised as to the details of that settlement, other than the fact that the respondents “are to pay Pagliuca a certain amount of money.”

[ 10 ] The applicants in its Statement of Defence, to the respondent’s Statement of Claim, issued in the second action admitted various paragraphs contained in the Statement of Claim which claimed that there was a right of way and made various assertions throughout their defence about the existence of the right of way. In a similar vein the applicants in affidavit evidence filed in the third action leaves absolutely no doubt that they accepted and asserted the existence of the right of way. By way of example, in the affidavit filed by the applicants in support of their application in the third action stated:

Up to and including the date of swearing this Affidavit, Mr. Paolini and I are involved in litigation which is the subject matter of Court File No. 99-CV-79671. The subject matter of that litigation is the use of Part 2 of the lands by Mr. Paolini and my allegation that such use is abusive, and not within the intent of the original right of way…As is clear from the attached Survey, the lawn which extends westward from the edge of the asphalt parking lot of the Tim Horton’s, extends onto the right of way throughout the length…

I am further advised by my solicitor, Mauro Marchioni, and I verily believe, that a letter was also sent to the Town of Innisfil on October 12, 2005 indicating to them that there existed such an encroachment on the right of way and seeking their advice as to how that was permitted.

[ 11 ] There can be no doubt then that in all three actions the applicants have accepted and asserted the existence of the right of way.

[ 12 ] In the second action that came before McIsaac J. reasons were released on December 7, 2006 the first paragraph of which describes the background to the application as follows:

The applicants are owners of a large farm property in Cookstown along with a long, narrow strip of land of approximately 60 metres in width. This strip provides them with access to their farm property from Highway 89. The respondent owns lands to both sides of this strip of land along with a right of way over the applicants’ aforementioned 60 metre strip of land. It is used to provide truck access to its IGA Supermarket which is located on its west side.

[ 13 ] In the analysis paragraph of McIsaac J., it is particularly noteworthy that there was an observation that there are:

“No material facts in dispute.”

As such in disposing of the matter before him, McIsaac J. clearly rendered his decision on the basis of both parties acknowledging the existence of the right of way. Now nearly six years later the applicants, despite the fact they have already obtained an order of this court based on an assertion of the right of way, seek an order that would diametrically transform the basis upon which all three actions have proceeded.

[ 14 ] The basis upon which such a transformation is now asserted arises out of a title search of the subject properties conducted on behalf of counsel for the applicants in the spring of 2010. As a result of that title search, counsel for the applicants wrote to the various solicitors for the parties on December 16, 2010 asserting the following:

The basis of our clients’ contention is as follows:

1. Our legendary, seasoned, experienced title searcher in Barrie reports as follows:

Derrick Osborne originally reserved a right of way over part 2, 51R-2407 when he conveyed Parts 1 and 2, 51R-2407 to Higgins, Instrument Number 476857. He, Osborne subsequently mortgaged the lands on both sides of Parts 1 and 2 being PIN Numbers 01, 02, 0328 but no right of way was ever included in the mortgages. The mortgagees issued Power of Sale on both PINS, 01-02 and 0328 and included the right of way over Part 2, 51R-2407. We maintain that the mortgagees had no right to do so as they could only convey what was mortgaged.

We do not believe that Paolini or its predecessor, the flea market or 544301 Ontario Limited has had the necessary ingredients to establish a right of way by prescription. Firstly, there has been constant interference by Pagliuca and secondly, the necessary period of time has not transpired under the Limitations Act.

Finally, the alleged right of way is not necessary and should be expunged for that reason alone. I have personally examined the site in great detail and there is absolutely no reason for the right of way as Paolini has free and unobstructed access to Highway 89 and its trucks can navigate the plaza without impediment. During my visitation, it was obvious that the right of way is being used and abused by patrons of Tim Horton’s, the general public and is viewed simply as an open field. My client will demand only that the notation on title be corrected and that there is no right of way in existence. All of the mumble gumbo and plans for a building permit, access to services and all of those matters are for another day in another forum and hopefully not litigation. Those in my view are planning issues that will develop over time.

[ 15 ] The essence of the argument that is now asserted by the applicants in support of their motion to withdraw their earlier admissions concerning the right of way is that even though a right of way was created in 1974 the chain of title was broken such that the right of way was not validly transferred to the respondent when it acquired title in 1986.

[ 16 ] Not surprisingly the position of the respondent is that there is a right of way; that the right of way has never been challenged by the applicants, and that the right of way formed the factual basis upon which McIsaac J. rendered his decision, a decision which has been the subject matter of an endorsement from the Court of Appeal. The respondent argues that the factual basis upon which this court made its earlier decision five years ago, cannot be changed. As McIsaac J. noted in his reasons there were no material facts in dispute.

[ 17 ] The respondent argues that an amendment, the effect of which is to withdraw an admission in a pleading should only be allowed if it raises a triable issue; if there is a reasonable explanation for the change; and if the withdrawal of the admission will not cause injustice to the other party.

[ 18 ] While the respondent also argues that the amendment does not raise a triable issue the respondent also argues that the applicants have not provided any reasonable explanation for the change in their position other than the title search conducted by or on behalf of the applicants counsel in the spring of 2010. The respondent notes that the information upon which the applicants now seek the relief sought, was available to the applicants when their affidavits filed in support of the first and third actions were drafted as well as when their Statement of Defence in the second action was served. The respondent asserts that given the passage of time it is highly unlikely that there may be evidence that can be obtained with regard to what transpired on the drafting of the two mortgages from 1978 and that with this situation the applicants should not be entitled to withdraw its admission.

[ 19 ] In short the respondents’ position is that the applicants should not be entitled to withdraw their admission that the right of way exists given that this position has been before this court for at least 12 years since the commencement of the first action.

The Law

[ 20 ] An admission made in a pleading or an affidavit is something to be relied on not only by the opposite party but by the court. An admission may therefore only be withdrawn in very limited circumstances. Rule 51.05 provides:

“An admission made in response to a request to admit a deemed admission under Rule 51.03 or an admission in a pleading may be withdrawn on consent or with leave of the court.”

[ 21 ] As to whether leave should be granted to withdraw an admission clearly this is an issue of discretion. The exercise of that discretion, however, involves what to this point in time has been described as the application of three tests.

[ 22 ] The Court of Appeal in 147619 Canada Inc. v. Marcel Chartrand (docket C44896 reasons released May 12, 2006) agreed with the three part test reformulated in Antipas v. Coroneos (1988), 1988 10348 (ON SC), 26 C.P.C.(2 nd ) 63. In Antipas (supra) Saunders J. on appeal from a decision of the Master applied a three part test to determine whether leave should be granted to withdraw an admission. The three part test involves:

1. A question as to whether the proposed amendment raises a triable issue;

2. Whether the admission was inadvertent or resulted from wrong instructions;

3. An inquiry as to whether the withdrawal would not result in any prejudice that could not be compensated for in costs.

[ 23 ] On the argument before me it is at least a triable issue that the proposed amendment may raise a triable issue. It is, however, hard to conceive of how it can be said that the admission made in three separate actions can be said to be inadvertent or based on wrong instructions. The information upon which the applicants’ argument is now formulated arises out of information readily available through a routine title search. The more fundamental issue on the facts before this court, however, is whether or not there is any prejudice that might arise as a result of the withdrawal of the admission that could not be compensated for in costs. I am more than satisfied that there is clear prejudice based on the fact that this court and the Court of Appeal have already rendered a ruling based on the admission that there is a right of way. Those decisions cannot be undone. As previously noted McIsaac J. in rendering his ruling made a clear statement to the affect that there were no material facts in dispute. Specifically the fact that there was a right of way was not in dispute.

[ 24 ] It is simply impossible to undo what has already been done in the ruling of McIsaac J. which was upheld by the Court of Appeal in its later ruling in 2007. More fundamentally apart from the question of prejudice, it would be contrary to public policy to allow a party now to come before this court to withdraw an admission that has been made in three separate actions, one of which has been disposed of by settlement and the other one of which has been adjudicated upon by McIsaac J.

[ 25 ] Litigants are entitled to assume that once there has been a decision of this court, particularly one which has proceeded so far as the Court of Appeal, that such a decision is final and that the facts upon which that decision is based are also deemed to be final. Apart from the question as to whether or not there is prejudice, which in my opinion there clearly is, public policy dictates that the withdrawal of the admission now sought by the applicants should not be granted. The applicants’ motion is therefore dismissed.

[ 26 ] If the parties do not agree upon the costs of this motion they may make an appointment with the trial coordinator to make oral submissions that are to be preceded by written submissions to be received by this court 10 days prior to any date fixed for those oral submissions. The written submissions are to be limited to five pages in length.

Justice M. Edwards

Released: July 31, 2012