ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 2472/13
DATE: 2014-09-18
BETWEEN:
SUNCOR ENERGY INC.
Plaintiff
– and –
B. OSMOND SCRAP METALS LIMITED and TRIPLE F PAVING CO. LTD.
Defendants
Alexandra White and Elizabeth Ackman, Counsel for the Plaintiff/Responding Party
Barry J. Goldman and Matthew Urback, Counsel for the Defendant/Moving Party, B. Osmond Scrap Metals Limited
HEARD: September 16, 2014
REASONS FOR JUDGMENT
Gray J.
[1] This is a motion to amend a Statement of Defence, and assert a Counterclaim. As I noted in an earlier case, Kostruba and Sons Inc. v. Pervez (2011), 2011 ONSC 4894, 38 C.P.C. (7th) 100 (Ont. S.C.J.), a motion to amend a pleading will ordinarily be granted almost as a matter of course, but different considerations apply when the effect of the amendment is to withdraw an admission.
[2] In this case, the plaintiff asserts that the effect of the amendment is to withdraw an admission. It is not entirely clear that that is so, but on the assumption that it is, the motion is nevertheless granted and the amendment is allowed, for the reasons that follow.
Background
[3] Suncor is the owner of a large piece of land in the southwest part of Oakville. Parts of it were historically used as a refinery. Currently, some of it is developed but large parts of it are undeveloped.
[4] The defendant, B. Osmond Scrap Metals Limited (“B. Osmond”) owns a small piece of land immediately adjacent to the Suncor property. For some period of time, the length of which is disputed, B. Osmond has used a piece of Suncor’s land, immediately adjacent to the B. Osmond property, for the purpose of parking its vehicles and storing equipment.
[5] In 2005, the Town of Oakville advised Suncor that it planned to acquire a road allowance and construct a road across the Suncor property. Suncor then undertook a survey of the property, as a result of which Suncor discovered that B. Osmond was using a part of the Suncor property for parking vehicles and other purposes in connection with B. Osmond’s business. On October 12, 2005, Suncor’s counsel wrote to B. Osmond demanding that it cease trespassing on the Suncor property.
[6] Discussions to resolve the matter were unsuccessful. This action was then commenced.
[7] In its original Statement of Defence, B. Osmond denied that it was a trespasser and pleaded that it had used Suncor’s property by reason of Suncor’s acquiescence.
[8] B. Osmond considered whether or not it should claim title to the disputed land by adverse possession. However, the land was converted to the land titles system on or about May 27, 1996, and accordingly it would have been necessary for B. Osmond to demonstrate that it had possession for at least ten years prior to that date. It was determined at the time of preparation of the original Statement of Defence that B. Osmond simply did not have sufficient independent evidence to advance such a claim. Accordingly, the only defence advanced was that the land was occupied by B. Osmond through acquiescence on the part of Suncor.
[9] After various examinations were conducted, B. Osmond learned that an independent company, Northway/Photomap/Remote Sensing Ltd., may have conducted aerial photography of the land in the early 1980s. Enquires were made, and it turned out that Northway had, indeed, conducted aerial photography in the early 1980s, and had photographs that might assist B. Osmond in showing that B. Osmond was parking its vehicles on the disputed land as early as 1983. If so, according to B. Osmond, this would go a long way towards showing that B. Osmond was in possession of the land for at least ten years prior to the conversion of the land to the land titles system. Photographs were then obtained which appear to show that this was the case.
[10] A summary judgment motion was originally brought before Fitzpatrick J. on June 14, 2014. He determined that it would be necessary to amend B. Osmond’s pleadings before any summary judgment motion were to be heard. Accordingly, he set out a timetable for the bringing of a motion to amend the pleadings and, ultimately, have a summary judgment motion heard on January 13, 2015.
[11] B. Osmond has now delivered a proposed Amended Statement of Defence and Counterclaim, in which it asserts, as a defence to Suncor’s claim, that it was in possession of the land for a sufficient period to result in B. Osmond acquiring title to the land by adverse possession. In the alternative B. Osmond asserts, as a defence, that its occupation of the land was through the acquiescence of Suncor. B. Osmond asserts a Counterclaim, requesting a declaration that it is now the owner of the disputed land through adverse possession.
Submissions
[12] Mr. Goldman, counsel for B. Osmond, submits that the motion should be granted, and B. Osmond should be granted leave to file an amended pleading.
[13] Mr. Goldman submits that the amended pleading does not constitute the withdrawal of an admission. However, if it is the withdrawal of an admission, Mr. Goldman nevertheless requests leave to deliver the amended pleading.
[14] Mr. Goldman submits that if the amended pleading does not constitute the withdrawal of an admission, rule 26.01 applies. It reads as follows:
26.01 On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[15] Under that rule, amendments are to be liberally granted, unless the responding party can show that there is prejudice that cannot be compensated for by costs or an adjournment. Mr. Goldman submits that Suncor cannot show any prejudice here.
[16] Mr. Goldman submits that the amended pleading does not constitute the withdrawal of an admission. He submits that the pleading of acquiescence was advanced as a defence to the plaintiff’s claim, not as an admission. It is now sought to advance it as an alternative defence, if the claim of adverse possession does not succeed. There is no reason to conclude, in these circumstances, that the pleading of acquiescence was an admission.
[17] Mr. Goldman submits that even if the amended pleading constitutes the withdrawal of an admission, B. Osmond should nevertheless be given leave to deliver the amended pleading. He submits that the amended pleading clearly raises a triable issue as to whether or not B. Osmond is entitled to the land by adverse possession, and a reasonable explanation has been advanced for the change of position. Furthermore, Suncor will suffer no prejudice as a result of the amendment.
[18] For these reasons, Mr. Goldman submits that the motion should be granted and B. Osmond should be given leave to deliver the amended pleading.
[19] Ms. White, counsel for Suncor, submits that the motion should be dismissed.
[20] Ms. White submits that Rule 26.01 does not apply where the effect of an amendment to a pleading constitutes the withdrawal of an admission. In such a case, rule 51.05 applies. It provides as follows:
51.05 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] Ms. White asserts that the pleading of acquiescence in the original Statement of Defence clearly constitutes an admission, on which Suncor was entitled to rely. She submits that acquiescence is a complete defence to any claim for adverse possession. For B. Osmond to change its position now constitutes, in Ms. White’s submission, the withdrawal of an admission.
[22] Ms. White submits that a party seeking to withdraw an admission must satisfy the following tests:
a) the proposed amendment raises a triable issue;
b) the moving party has a reasonable explanation for the change of position; and
c) the withdrawal of the admission will not result in prejudice that cannot be compensated for in costs.
[23] Ms. White submits that assuming a triable issue is raised, a reasonable explanation for the withdrawal of the admission has not been advanced. Ms. White points out that on Mr. Osmond’s examination for discovery, he clearly stated that he had considered claiming “squatter’s rights” but decided against it. She points out that B. Osmond purchased its property in 1981, and there is no reason why Mr. Osmond could not provide his own evidence as to when possession of the disputed lands had commenced. She submits that the aerial photographs were clearly available, and could have been requested at any time. No due diligence has been shown, and no explanation has been provided as to why they could not have been obtained earlier.
[24] Ms. White submits that if the amendment is allowed, Suncor will be prejudiced. She submits that if B. Osmond is entitled to issue a counterclaim for adverse possession now, Suncor will be deprived of a limitations defence. She submits that, at the latest, B. Osmond’s entitlement to counterclaim for adverse possession expired in 2008.
[25] For these reasons, Ms. White submits that B. Osmond’s motion should be dismissed.
Analysis
[26] It is not clear to me that the amended pleading constitutes the withdrawal of an admission.
[27] Clearly, if a claim of adverse possession is advanced, a plea of acquiescence is a complete defence. In such circumstance, a plea of acquiescence would clearly be an admission on which the other party is entitled to rely. Rule 51.05 would apply, rather than rule 26.01.
[28] However, in the original Statement of Defence, the plea of acquiescence was not put forward as an admission of anything. Rather, it was put forward as a defence to the claim that B. Osmond was trespassing on the disputed lands. If the plea of acquiescence succeeded, Suncor would arguably be deprived of any claim for damages as a result.
[29] Now, B. Osmond wishes to put forward a claim that it is the owner of the land through adverse possession, and wishes to claim acquiescence only if the adverse possession claim does not succeed.
[30] Since the acquiescence claim was not put forward as an admission in the first place, but rather as a defence, I do not understand how its withdrawal now can be construed as the withdrawal of an admission. The plea of acquiescence obviously would have been helpful to Suncor to defeat a claim of adverse possession, but the claim of adverse possession had not been put forward in the original Statement of Defence.
[31] Notwithstanding these observations, I am prepared to assume, without deciding, that the amended pleading constitutes the withdrawal of an admission.
[32] If it is proposed that an admission be withdrawn, the governing case is Antipas v. Coroneos (1988), 1988 10348 (ON SC), 26 C.P.C (2d) 63 (Ont. H.C.J.). At para. 14, Saunders J. set out the appropriate tests to be established by a moving party for the withdrawal of an admission:
A review of the cases indicates that a party requesting leave to withdraw an admission must pass three tests by establishing (1) that the proposed amendment raises a triable issue; (2) that the admission was inadvertent or resulted from wrong instructions; and (3) that the withdrawal will not result in prejudice that cannot be compensated for in costs.
[33] These tests were expressly approved by the Court of Appeal in Szelazek Investments Ltd. v. Orzech (1996), 44 C.P.C. (3d) 102 (Ont. C.A.)
[34] In my view, B. Osmond has satisfied the tests set out by Saunders J. in Antipas.
[35] There can be little dispute that the amended pleading raises a triable issue. As I noted in Kostruba, supra, at para. 47, the threshold for meeting this criterion is a low one. The court is not in the position of trying the case at the pleadings stage. Certainly there is some evidence, if accepted, which might show that B. Osmond had possession of the land for at least ten years prior to the conversion of the Suncor land to land titles in 1996. Thus, a triable issue is raised.
[36] I think B. Osmond has given a reasonable explanation for its change of position. It did not have in its possession the aerial photographs which appear to be relevant to the issue of whether it had possession of the disputed lands for the requisite period. I do not think it needs to show that there were superhuman efforts that it could have made to discover them earlier. Once it became aware that the photographs might exist, it made enquiries. In my view, B. Osmond acted reasonably and has now offered a reasonable explanation for its change of position.
[37] I am persuaded that Suncor will suffer no significant prejudice as a result of the amendment. I am not convinced that it will lose a limitations defence.
[38] If B. Osmond has acquired title to the land by adverse possession, it has done so by virtue of what is now section 4 of the Real Property Limitations Act, which provides as follows:
- No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it.
[39] That section is itself a limitation provision, which, by virtue of s.51 of the Land Titles Act, runs only during periods prior to the conversion of land to the land titles system. It prevents a party from making an entry or distress or bringing an action to recover land, except within ten years after the time first arose to do so. By virtue of s.15 of the Act, the title of the paper title holder is extinguished after expiry of the limitation period.
[40] It is not clear to me that a person who acquires title by adverse possession, through these provisions, needs to bring an action at all. If a declaration is sought, it is simply for judicial confirmation that the limitation period has expired and title of the paper title holder is extinguished. If an action must be brought, when must it be brought? Is it within two years of the precise point at which the limitation period prescribed by section 4 of the Real Property Limitations Act expires? These questions are not easy to answer, particularly in the context of a pleadings motion.
[41] The interplay between the various limitation periods is best sorted out by a trial judge, after hearing all the evidence and full submissions, or at the very least by a judge hearing a motion for summary judgment. In any event, Suncor is at liberty to plead any limitations defence, to which it may be entitled, in its defence to the counterclaim.
[42] For these reasons, I conclude that B. Osmond has satisfied the tests for the withdrawal of an admission, if indeed that is what the amended pleading is.
Disposition
[43] For the foregoing reasons, the motion is granted and B. Osmond is given leave to deliver an Amended Statement of Defence and Counterclaim.
[44] I will entertain brief written submissions with respect to costs, not to exceed three pages together with a costs outline. Mr. Goldman shall have five days to file submissions and Ms. White shall have five days to respond. Mr. Goldman shall have three days to reply.
Gray J.
Released: September 18, 2014
COURT FILE NO.: 2472/13
DATE: 2014-09-18
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SUNCOR ENERGY INC.
Plaintiff
– and –
B. OSMOND SCRAP METALS LIMITED and TRIPLE F PAVING CO. LTD.
Defendants
REASONS FOR JUDGMENT
GRAY J.
Released: September 18, 2014