Caledon (Town) v Waterstone Properties Corporation, 2016 ONSC 5394

Court File and Parties

COURT FILE NO.: CV-15-540026 and CV-15-537588 DATE: 20160826 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: COURT FILE NO.: 15-CV-540026 The Corporation of the Town of Caledon Applicant – and – Waterstone Properties Corporation and Wyndcliffe Developments Inc. Respondents

Counsel: Signe Leisk and Adrianna Pilkington, for the Applicant Milton Davis, for the Respondent Waterstone Properties Corporation

AND BETWEEN: COURT FILE NO.: 15-CV-537588 Waterstone Properties Corporation and Wyndcliffe Developments Inc. Applicants -and – The Corporation of the Town of Caledon Respondents

Counsel: Milton Davis, for the Applicant Waterstone Properties Corporation Signe Leisk and Adrianna Pilkington, for the Respondent

Heard: May 16 and 17, 2016

REASONS FOR JUDGMENT

R. F. GOLDSTEIN, J.

1The Kingsview Parkette is a 2.8 acre park. The Parkette is in a part of the Town of Caledon called Bolton North Hill. The question before the Court is this: who is the beneficial owner of the Parkette?

2Waterstone currently has title to the lands comprising the Parkette. Waterstone (which is related to Wyndcliffe) is the successor in title of Great Georgian Reality Group, a partnership that included Sorrento Developments Limited. In 1967 Sorrento Developments bought the land that became Bolton North Hill. Sorrento transferred title to the land including the Parkette to Great Georgian in 1973. Great Georgian eventually transferred title to the Parkette to Waterstone. Waterstone is now the title holder to the lands comprising the Parkette.

3Waterstone says that in 1972 Sorrento and the Town agreed that the Parkette would be deeded to the Town for parkland, but that the Parkette would be deeded back when certain conditions had been met. Waterstone say that the main condition was the creation of another park north of the Parkette. Another park was created. Waterstone wants this Court to declare that it has fulfilled the 1972 agreement. Waterstone also seeks a declaration that it has beneficial, as well as legal, ownership of the Parkette.

4The Town’s position is that in 1973 Great Georgian agreed unconditionally to transfer the Parkette as part of a subdivision agreement, thus superseding the agreement in 1972. Waterstone says that the Town is wrong because the Parkette was included in the 1973 agreement by mistake. The Town argues that even if it is not entitled to the Parkette by virtue of one of the subdivision agreements (or both), then the doctrine of adverse possession applies. And even if adverse possession does not apply, then the doctrine of dedication and acceptance applies because the public has been using the Parkette for recreational purposes for almost 40 years.

5There are two applications before the Court. Waterstone and Wyndcliffe apply for:

• A declaration that Waterstone is the lawful owner of the lands constituting the Parkette;
• A declaration that the Town is trespassing on the Parkette;
• A mandatory order requiring the town to vacate the Parkette, remove all equipment, and deliver possession to Waterstone;
• An order that the town pay rent to Waterstone;
• In the alternative, damages for trespass;
• In the alternative, a declaration that the 30-acre parkland is held in trust for the Town by Waterstone; and,
• In the further alternative, damages equal to the fair market value of the 30-acre parcel of land.

6The Town applies for:

• A declaration that it is the owner of the lands constituting the Parkette;
• An order vesting the title of the Parkette in the Town;
• An order directing the Land Registrar to correct the parcel register reflecting the town as Owner of the lands constituting the Parkette;
• In the alternative, a declaration that by virtue of the doctrine of dedication and acceptance the public has the right to continue to use the Parkette.

7For the reasons that follow, I disagree with Waterstone and Wyndcliffe. I agree with the Town. I find that the 1973 Agreement applies. The application by Waterstone and Wyndcliffe is dismissed and the Town’s application is granted.

8I will start first with the background.

BACKGROUND

(a) Chain Of Title To The Parkette

9The Parkette is located on Block A, Plan 990, in the Town of Caledon. The Town of Caledon is the successor of the Village of Bolton, which signed the original subdivision agreements with Sorrento and Great Georgian. The Town and the Village were amalgamated in 1974.

10The late Domenic Maida was the driving force behind Sorrento Developments, which developed most of Bolton North Hill. Sorrento Developments acquired the land in Plan 990 (and other land that became the subdivisions in Bolton North Hill) in 1967. In March 1973 Sorrento Developments transferred the land in Plan 990 to the Great Georgian Realty Group, a partnership.

11The Great Georgian Realty Group is a partnership. Sorrento Developments is the general partner. The other partners of Great Georgian Realty are seven corporations each owned by one of the seven members of the Maida family. Anthony Maida is one of the children of Domenic Maida. He is the President and CEO of Waterstone. In 2000, Anthony Maida made a deal with his siblings regarding the various family companies. One of his companies acquired the right to the Parkette. Title to the Parkette remained in the name of Great Georgian until May 7 2013, when it was transferred to Waterstone. Waterstone remains the current registered owner of the Parkette. Although title to the Parkette has passed between different entities it has remained in one branch or the other of the Maida family companies since 1967. The Town argues, as I will set out, that title should have been transferred to it in 1973.

12In 1999 the land including the Parkette was converted to Land Titles. As I will deal with below, Waterstone argues that this conversion had an important legal effect that solidifies legal and beneficial ownership of the Parkette.

(b) Sorrento And The Town Sign A Subdivision Agreement In 1972

13On January 25 1972 the Town and Sorrento signed a subdivision agreement (which I will refer to in these reasons as the 1972 Agreement). The 1972 agreement concerned lands comprising Plan 930. The 1972 Agreement was a standard subdivision agreement. It permitted Sorrento to subdivide and develop the land in Plan 930. In exchange, Sorrento had certain obligations, such as servicing the land. Sorrento was also obliged to turn over 5% of the land for public purposes other than highways – in effect, the public park dedication. The land to be turned over was detailed in Schedule “F” of the 1972 Agreement. Schedule “F” stated that Sorrento agreed to deed to the Town 2.8 acres as the 5% public park dedication for Plans 870, 887, and 930 (the land covered by the 1972 Agreement). The 2.8 acres to be deeded to the Town was the lands comprising the Parkette. The lands comprising the Parkette are in Plan 990. The 1972 Agreement was never registered on title.

14Schedule “F” also contained a provision that if and when other lands in the area were developed including an equivalent 2.8 acres for parkland, then the Town would deed the Parkette back to Sorrento. Title to the lands comprising the Parkette was never actually transferred to the Town.

15Waterstone relies on this “Re-conveyance Agreement”. Other lands were developed as required and a 30-acre park was created. Waterstone says that this 30-acre park fulfilled the condition in Schedule “F”.

(c) Great Georgian And The Town Sign A Subdivision Agreement In 1973

16On December 17 1973 the Town and the Great Georgian Realty Group signed another subdivision agreement (which I will refer to in these reasons as the 1973 Agreement). As I have mentioned, Sorrento was the general partner of Great Georgia and the other companies belonging to other Maida family members. The 1973 Agreement concerned lands comprising Plan 994 and Plan 990. Like the 1972 Agreement, the 1973 Agreement was a standard subdivision agreement. It permitted Great Georgian to subdivide and develop the lands in Plans 994 and 990. Again, in exchange, Great Georgian had obligations such as servicing the land.

17Like the 1972 Agreement, the 1973 Agreement also included a 5% park dedication clause in Schedule “B”. Schedule “B” included lands to be deeded to the Town. Those lands included the Parkette. There were no other conditions regarding the Parkette.

18As I have stated, the Parkette was never actually deeded to the Town. The 1973 Agreement was registered on title, unlike the 1972 Agreement

(d) Subsequent Subdivision Agreements In The Area

19Waterstone relies on two subsequent developments as satisfying the developer’s part of the re-conveyance agreement in the 1972 Agreement. On February 19 1986 a subdivision agreement between Summercourt Estates Inc. and the Town was registered (I will refer to this subdivision agreement as the 1986 Agreement). Summercourt was another Maida family company. This subdivision agreement concerned lands to the North of the Parkette. In essence, Summercourt was permitted to develop 429 residential lots. As part of the 1986 Agreement the developer conveyed 30 acres of land to the Town.

20On April 25 1999 Wyndcliffe entered into a subdivision agreement with the Town regarding the development of 66 townhouses. Waterstone also relies on this agreement as fulfilling part of the “Re-conveyance Agreement” in the 1972 Agreement. This is why Wyndcliffe is one of the Applicants.

(e) Use Of The Parkette

21There is conflicting evidence as to when the Town began to use the Parkette as a public park. Mr. Maida, in his affidavit, states that the Town took possession of the Parkette in 1974 and installed playground equipment in 1980. Mr. Barnes, in his affidavit, states that the Parkette has been in use as a public park since at least 1977. Playground equipment is listed in the park inventory as of 1977. The inventory is convincing. I find as a fact that the Parkette has been used as a public park since 1977. For the purposes of these applications it matters not whether the Parkette has been used by the public for 36 years or 39 years. Either way it is a long time.

ISSUES AND ANALYSIS

22Waterstone raises several issues in support of their claim to the Parkette, but its key points are that the registration in Land Titles is conclusive as to title; and the inclusion of the Parkette in the 1973 Agreement was a mistake. I will deal with these issues. I will also deal with some of the issues raised by the Town. These issues include public policy, adverse possession and the application of the doctrine of dedication and acceptance.

(a) Is Registration In Land Titles Conclusive?

23Waterstone argue that it (or its predecessor in title) acquired conclusive title against the world when the Parkette was converted to Land Titles. Section 78(4) of the Land Titles Act provides that an instrument is effective according to its nature and intent. The owner of a property registered in Land Titles acquires an interest against the world: Lawrence v. Maple Trust Company, 2007 ONCA 74. The fact that the Parkette is registered in the name of Waterstone is enough to end the argument.

24I must respectfully disagree. The Lawrence case involved a fraudulent conveyance. A fraudster had obtained funds from Maple Trust, which then registered a mortgage against Ms. Lawrence’s property. Both Ms. Lawrence and Maple Trust were innocent parties. The Court of Appeal ultimately held that since Maple Trust had an opportunity to avoid a fraud, the mortgage had to be set aside. The key point that Waterstone relies on is that absent fraud, a registered owner’s title is perfect as against the world. The problem with that argument, however, is that title was converted to Land Titles administratively – which means that the conversion was subject to other claims.

25In any event, the Town’s claim to ownership of the Parkette is based on constructive trust. Registration of legal title in Land Titles is certainly insufficient to defeat beneficial ownership: Chopra v. Vincent, 2015 ONSC 3203.

(b) Which Subdivision Agreement Applies?

26The lands comprising the Parkette are included in the 1972 Agreement and the 1973 Agreement. The two agreements treat the Parkette differently. The legal descriptions are also slightly different. How should the two subdivision agreements be reconciled, if at all? Waterstone argue that where there are conflicting versions of an agreement, it is a question of fact which version should prevail, relying principally on Baranovski v. Binks Manufacturing Co. at para. 167.

27I agree that where there are conflicting versions of an agreement it is a question of fact which is correct. I disagree, however, that these are different versions of the same agreement. They are two different agreements dealing with different subdivisions. Furthermore, the parties, while related in the case of the developer, are not identical. Ultimately, the normal principles of contractual interpretation must apply. A subdivision agreement is a contract and will be interpreted according to contractual principles: Tandi Construction v. Flamborough, 2005 CarswellOnt 3998 (Sup.Ct.) at para. 69. I do not agree with Waterstone that the doctrine of novation applies: that doctrine usually applies to the substitution of debtors: Fridman, The Law Of Contract In Canada, 6th ed., p. 556. The intention of the parties, as memorialized in the written contract, is the key principle.

28The Town says that the 1973 Agreement superseded the 1972 Agreement. Waterstone say that the Parkette was included in the 1973 Agreement by mistake. I agree with the Town. The 1973 Agreement is clear on its face. The Parkette was to be deeded unconditionally to the Town. The written agreement and the surrounding circumstances are consistent with a mutual intent that the Parkette be deeded unconditionally to the Town. The 1973 Agreement superseded the 1972 Agreement regarding the Parkette. The Parkette was not included in the 1973 Agreement by mistake.

29Section 1.2 of the 1973 Agreement states:

(b) The Owner agrees to convey, free of encumbrance, to the Municipality the lands, reserves, and easements set out in Schedule “B” annexed hereto.

30The Owner in the 1973 Agreement refers to Great Georgian. The Municipality is the Village of Bolton, predecessor of the Town. Schedule “B” includes Block “A” – which is identified as a park.

31Waterstone raise several points to illustrate what it says is a mistake. I will deal with each in turn.

32Is there a conflict between clauses that needs resolution? Waterstone argue that where there is an apparent conflict between the clauses of an agreement, a more specific term prevails over a more general one. Waterstone relies on this statement from the Supreme Court of Canada in British Columbia Hydro and Power Authority v. BG Checo International Ltd., [1993] 1 S.C.R. 12 at para. 9:

It is a cardinal rule of the construction of contracts that the various parts of the contract are to be interpreted in the context of the intentions of the [page 24] parties as evident from the contract as a whole… Where there are apparent inconsistencies between different terms of a contract, the court should attempt to find an interpretation which can reasonably give meaning to each of the terms in question. Only if an interpretation giving reasonable consistency to the terms in question cannot be found will the court rule one clause or the other ineffective… In this process, the terms will, if reasonably possible, be reconciled by construing one term as a qualification of the other term… A frequent result of this kind of analysis will be that general terms of a contract will be seen to be qualified by specific terms -- or, to put it another way, where there is apparent conflict between a general term and a specific term, the terms may be reconciled by taking the parties to have intended the scope of the general term to not extend to the subject-matter of the specific term. [Citations omitted.]

33Because Schedule “F” of the 1972 Agreement is more specific than Schedule “B” of the 1973 Agreement, Waterstone argues, Schedule “F” must prevail.

34I disagree with this argument for two reasons: first, the Supreme Court was dealing with clauses in the same agreement. The 1972 and 1973 agreements are different agreements, deal with different plans of subdivision, and have different (albeit related) parties. Second, I simply do not see how Schedule “F” is a specific clause and Schedule “B” is a general clause. They are equally specific about what is to be done with the Parkette. Schedule “F” is more complicated and imposes more duties on each party. More complicated and more onerous is not the same as more specific. The real question is whether, factually, the 1973 Agreement supersedes the 1972 Agreement. That is a question of fact.

35Are There Anomalies Indicating a Mistake? Waterstone also point to anomalies in the 1973 Agreement, when compared to the 1972 Agreement. Why, they ask, would the Parkette be included in Schedule “F” in the 1972 Agreement as deeded conditionally and then in Schedule “B” of the 1973 Agreement as deeded unconditionally? Schedule “F” of the 1972 Agreement is very specific to the Parkette. In contrast, Schedule “B” of the 1973 Agreement lists many different parcels of land of which the Parkette is but one. They point to the fact that Mr. Barnes, the Town’s former Chief Administrative Officer, could not, in his cross-examination, explain why the Parkette appears in both the 1972 Agreement and the 1973 Agreement. These facts, they argue, show that the inclusion of the Parkette in the 1973 Agreement was a mistake.

36I disagree, again, because the 1973 Agreement is unambiguous in its terms. The following chart compares the provisions in the two agreements respecting the Parkette:

1972 Agreement	1973 Agreement
1.2 The Owner agrees to convey free of encumbrance to the Municipality the lands, reserve, and easements set out in Schedule “B” annexed hereto.	1.2 The Owner agrees to convey free of encumbrance to the Municipality the lands, reserve, and easements set out in Schedule “B” annexed hereto.
19.21 – Lands For Pubic Purposes other than Highways That the Minister of Municipal Affairs for Ontario is entitled to require as a condition to the approval of the plan of subdivision that table land not exceeding five per cent (5%) of the land included in the plan shall be conveyed to the Municipality for public purposes other than highways. Provision to accept 5% of the total land value of the subdivision in lieu of land dedication may be arranged in agreement with the Municipality. The requirements of this paragraph shall be as detailed in Schedule “F”.	19.20 Lands For Pubic Purposes other than Highways In accordance with the Planning Act and as a condition to the approval of the plan of subdivision, that table land not exceeding five per cent (5%) of the land included in the plan shall be conveyed to the Municipality for public purposes other than highways. Provision to accept 5% of the total land value of the subdivision in lieu of land dedication may be arranged in agreement with the Municipality. The requirements of this paragraph shall be as detailed in Schedule “F”.
SCHEDULE “B” [No relevant land]	SCHEDULE “B” LANDS TO BE DEEDED TO THE MUNICIPALITY 2. From Draft Plan 21-T23584 2.1 [the Parkette]
SCHEDULE “F” 2. The owner agrees to deed to the Corporation of the Village of Bolton, free of all encumbrances for the sum of two dollars, a parcel of land 2.8 acres in size, as the 5% park dedication for Plan 870, 886, and the proposed plan covered by this agreement • [the Parkette] • The Village agrees that if and when lands in the Albion area are developed north of the school site and a park site is developed to serve all this area, that an equivalent area be included equal to the 2.8 acres satisfactory to the Village of Bolton. The property now deeded for park purposes would then be deeded back to the Owner free of charge.	SCHEDULE “F” [No relevant land]

37It is common ground that the Parkette was referenced in Schedule “F” of the 1972 Agreement and Schedule “B” of the 1973 Agreement. These are standard subdivision agreements with many very similar clauses, as can be seen by s. 1.2 of both agreements, and ss. 19.21 of the 1972 Agreement and 19.20 of the 1973 Agreement.

38It is also common ground that the 1972 Agreement applied to the development of lands constituting Plans 870, 886, and 930 in Bolton North Hill; and that the 1973 Agreement applied to the development of the lands constituting Plans 990 and 994. The Parkette is within Plan 990.

39The Supreme Court of Canada recently considered when and how the surrounding circumstances may be used to interpret a contract in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633 at paras. 47, 57-58:

Regarding the first development, the interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction. The overriding concern is to determine "the intent of the parties and the scope of their understanding" (Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21, [2006] 1 S.C.R. 744, at para. 27, per LeBel J.; see also Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69, at paras. 64-65, per Cromwell J.). To do so, a decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning:

No contracts are made in a vacuum: there is always a setting in which they have to be placed... In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.

While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agreement… The goal of examining such evidence is to deepen a decision-maker's understanding of the mutual and objective intentions of the parties as expressed in the words of the contract. The interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract… While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement.

The nature of the evidence that can be relied upon under the rubric of "surrounding circumstances" will necessarily vary from case to case. It does, however, have its limits. It should consist only of objective evidence of the background facts at the time of the execution of the contract… that is, knowledge that was or reasonably ought to have been within the knowledge of both parties at or before the date of contracting. Subject to these requirements and the parol evidence rule discussed below, this includes, in the words of Lord Hoffmann"absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man" (Investors Compensation Scheme, at p. 114). Whether something was or reasonably ought to have been within the common knowledge of the parties at the time of execution of the contract is a question of fact. [Citations omitted.]

40It is not necessary to determine the intentions of the parties from the surrounding circumstances because the 1973 Agreement is not ambiguous. That said, the circumstances suggest that the inclusion of the Parkette in Schedule “B” of the 1973 agreement was intentional.

41The same parties negotiated the 1972 Agreement and the 1973 Agreement. Sorrento Developments was party to the 1972 Agreement. Sorrento Developments was the general partner of Great Georgian. Great Georgian was party to the 1973 Agreement. The evidence is clear that Domenic Maida was the driving force behind Sorrento Developments and that he negotiated with the Town. Given the unambiguous nature of the 1973 Agreement it is reasonable to infer that Domenic Maida bargained away the re-conveyance right in the 1972 Agreement as part of the 1973 Agreement. That is particularly likely since the Parkette is part of Plan 990 – Plan 990 was not a subject of the 1972 Agreement but was a subject of the 1973 Agreement. Domenic Maida was very obviously not an unsophisticated first-time homebuyer. The evidence in the record strongly indicates that he was a significant developer of real estate in the Caledon area and sophisticated in the business of negotiating subdivision agreements.

42I also note that Sorrento did not invoke sub-section 33(7) of the Planning Act in relation to the Parkette. That section permits the owner of land to refer a condition to the Ontario Municipal Board prior to final approval of a plan of subdivision. There is no evidence that Domenic Maida, Sorrento, Great Georgian or anyone else referred any aspect of the 1973 Agreement to the OMB.

43On December 19 1973, the day that the 1973 Agreement was made, Anthony Maida, on behalf of Great Georgian Realty, sent a letter to the Town Clerk. The letter’s RE line stated:

RE: THE GREAT GEORGIAN REALTY GROUP Development of Phase II, #21 T-23422, Our File #D-100, and Development of Phase III, #21T-23584, Our File #D-200, Village of Bolton

44The reference to #21 T-23422 referred to Plan 994, and #21 T-23584 referred to Plan 990. As I have mentioned, the 1973 Agreement concerned Plans 994 and 990.

45The letter went on to state:

With respect to the development of Phase II and Phase III we are now enclosing 2 copies of the following:

6. Deed dated the 17th day of December, 1973 from The Great Georgian Realty Group to the Corporation of the Village of Bolton, for Blocks A, B, and C in the Village of Bolton re #21T-23584.

46Block A of #21T-23584 is the Parkette.

47I realize that the act of sending the deed to the Town can cut both ways, in the sense that the developers of Bolton North Hill were required to deed the Parkette to the Town under both the 1972 Agreement and the 1973 Agreement. That said, the letter refers to Draft Plan #21T-23584, which became Plan 990 – the plan that was the subject matter of the 1973 Agreement. In contrast, there is no record of anyone sending a deed to the Parkette in relation to the 1972 Agreement. Anthony Maida’s letter of December 19 1973 enclosing the deed was written in fulfillment of a condition to the 1973 Agreement, not the 1972 Agreement. That is clearly evidence of the intention of Great Georgian to be bound by the terms of the 1973 Agreement. That lends support to the notion that the 1973 Agreement superseded the 1972 Agreement in respect of the Parkette. Furthermore, December 19 1973 was the day that the 1973 Agreement was signed. It seems reasonable in infer that that the deeds were provided as part of the closing, or shortly after the closing. For some reason the deed to the Parkette was never actually registered. It was apparently lost.

48Finally, there are two other important facts that support the notion that the 1973 Agreement applies. First, Great Georgian submitted a draft plan of subdivision for Plan 990 to the Town. The draft plan clearly identified the Parkette as a park. That was consistent with the municipal zoning that ultimately came into effect. It was also consistent with the conveyance provisions in the 1973 Agreement, considering that the 1973 Agreement dealt with Plan 990. Second, Great Georgian then registered Plan 990, and the Plan that shows the Parkette as a park. Both of these facts are consistent with an intention to deed the Parkette unconditionally – and inconsistent with the notion that the inclusion of the Parkette was a mistake.

49Does the evidence of Anthony Maida demonstrate a mistake? Waterstone also relies on the evidence of Anthony Maida to suggest that the inclusion of the Parkette in the 1973 Agreement was a mistake. I set out the key parts of his affidavit:

The 1972 Agreement was signed by my late father Domenic Maida. The 1973 Agreement had his signature for Sorrento only. For each of the other parties, that agreement was signed by James Skells. Mr. Skells was a sole practitioner lawyer. He was one of the trustees of the Maida Family Trusts. He was also an officer and director of the six companies in the Great Georgian Group.

My father negotiated the 1973 Agreement. Mr. Skells was the lawyer for the companies in respect of it. Mr. Skells is now deceased.

The 1973 Agreement was never intended to revoke or alter the Reconveyance Agreement. I believe that Mr. Skells was unaware of the 1972 Agreement. I also believe, insofar as my late father was involved, that the inclusion of the Property in the 1973 Agreement was an oversight.

My belief is based on the fact that at no time did my father or Mr. Skells tell me that the Property was part of the 1973 Agreement. In fact, in 2000 I negotiated an agreement with my father and other family members whereby my company... acquired the right to the re-conveyance from the Town of the property… If the Property had been included in the 1973 Agreement, surely my father, or Mr. Skells or any of the lawyers involved would have told me in the course of the negotiations. They didn’t.

50There is no reason to doubt Anthony Maida’s sincerity. Respectfully, however, I cannot accept this evidence.

51To begin, I am dubious about the admissibility of some of the evidence supporting the theory of mistake. Waddams described the “parol evidence rule” in The Law of Contracts this way: when a contract has been reduced to writing, extrinsic evidence is inadmissible to modify the writing. Such evidence is only admissible to resolve an ambiguity. That rule certainly applies to the interpretation of subdivision agreements: see University Village v. Guelph (1992), 22 R.P.R. (2d) 107, [1992] O.J. No. 324 (Gen.Div.). Here, there is no ambiguity about the terms of the 1973 Agreement. Although a court may take the circumstances surrounding the formation of a contract into account, that does not displace the parol evidence rule: Sattva Capital Corp. v. Creston Moly Corp. at paras. 59-61. Anthony Maida’s evidence is not evidence of surrounding circumstances. It is an attempt to modify the words of the subdivision agreement. The evidence offends the parol evidence rule.

52Even if Anthony Maida’s evidence were admissible, it is based on speculation about what people (now deceased) would have done or not done if the inclusion of the Parkette in the 1973 Agreement had been a mistake. Specifically, it is based on speculation as to what Mr. Skells knew or didn’t know at the time of the 1973 Agreement. There is no evidence, such as a note or a memo, about Mr. Skell’s understanding. It is also based on speculation about what Domenic Maida and others supposedly would have told Anthony Maida in 2000 about one clause in a very large agreement that was negotiated in 1973. Furthermore, when the Town wrote to Domenic Maida about the deed to the Parkette on a later occasion, he responded – but he did not suggest that the Parkette had been included in the 1973 Agreement by mistake. Finally, in his cross-examination Anthony Maida could not remember other important circumstances surrounding the 1973 Agreement, and he resiled slightly from his position that the inclusion of the Parkette had been a mistake.

53In any event, the fact that Anthony Maida himself sent the deed to the Parkette to the Town at the time of the closing of the 1973 Agreement undermines his evidence that the Parkette was included by mistake.

54Do Subsequent Events Indicate A Mistake? Waterstone also relies on subsequent events to indicate that the inclusion of the Parkette in the 1973 Agreement was a mistake.

55Some of these circumstances occurred after the negotiation of the contract, and may not strictly fall within the rule for dealing with the circumstances around the formation of a contract as set out in Sattva Capital Corp. v. Creston Moly Corp.. Both parties have submitted evidence of the events following the 1973 Agreement to buttress their points.

56On this point I am not persuaded that a mistake was made. For example, Domenic Maida did not appear to believe that the Town was required to re-convey the Parkette to Sorrento (or Great Georgian) under the 1972 Agreement. He never made that suggestion to the Town, despite opportunities for him to do so. It was not until 1995 that the issue was finally put to the Town, and even then it is not clear that Domenic Maida himself thought the so-called “Re-conveyance Agreement” applied. Some detail is required to flesh out the point.

57In 1979 Davis, Webb, lawyer for the Town, wrote to Sorrento requesting deeds to various blocks of land under Plan 990 (which related to the 1973 Agreement), including the deed to the Parkette.

58There is no record of other correspondence until 1984 when the issue of security arose. Developers must post security with a municipality in order to guarantee their obligations. A letter of credit is the usual form of security. On July 9 1984 the Town wrote to Domenic Maida about Plans 990 and 994. The Town noted that deeds to various blocks of land had to be delivered to the Town in order to release the security. Those plans related to the 1973 Agreement. The Town pressed Domenic Maida about the failure of Great Georgian to deliver a copy of the deed to the Parkette as well as other conveyances that were required in accordance with the 1973 Agreement.

59Thereafter, correspondence between the Town and either Domenic Maida or his lawyer (Mr. Skells) ensued though the summer of 1984. The correspondence is primarily directed to releasing Sorrento’s security. On July 31 1984 Domenic Maida wrote to the Town and indicated that:

After ten years, this is the first I have been advised of these requirements and it has been a great surprise to me.

I wish to advise you that, after ten years, you cannot go in and tell me all this… it is too late now for me to do anything about it, but I will see what I can do. As far as I am concerned, all this was done and sent to your lawyers, Messrs. Davis, Webb.

60The comment regarding “all this was done and sent” was correct in the sense that the deeds to the Parkette were in fact sent – although sent by Anthony Maida to the Town, not to Davis, Webb. In my view, that is an acknowledgment that Great Georgian (of which Sorrento was the general partner) was required to deed the Parkette to the Town. Presumably if the “Reconveyance Agreement” applied then at that point Domenic Maida would have pointed that out in his correspondence. He did not. His retort was that the deed had already been sent.

61The Town wrote again to Domenic Maida on August 7 1984 reiterating that various encumbrances had to be removed from title. Copies of Plans 990 and 994 showing all registered lots and blocks were enclosed. On August 9 1984 James Skells, Sorrento’s lawyer, wrote back to the Town but did not specifically mention the Parkette.

62There is no further correspondence in the record on this point until April 1995 when Ronald Chapman, a lawyer acting for Sorrento, asked for the return of the Parkette pursuant to the 1972 Agreement. That was the first time that Sorrento pursued the “Re-conveyance Agreement”. Litigation by Sorrento ensued, but was administratively dismissed in 2003. In any event, Sorrento had no legal authority to seek the return of the Parkette. In 2003 Justice Backhouse issued a judgment relating to a different block of land, as I will deal with below.

63Even after that point, when the Parkette was squarely on the table, it is not clear that Domenic Maida regarded Sorrento (or Great Georgian) as entitled to the Parkette under the 1972 Agreement. On June 9 1995, after Mr. Chapman’s letter, Dominic Maida wrote to Mayor of the Town, Carol Seglins. He set out his position that under various plans Sorrento had dedicated 23% of land for parkland, not the required 5%. He then wrote:

I think you should deed the land back to Sorrento and keep only the required 5% park land. If you wish to have a meeting with me by June 15, 1995, please advise.

I would also like to discuss Blocks A & B in Register Plan 990.

64It is not clear whether he regarded the return of the Parkette as recompense for dedicating too much parkland or an assertion of a right under the 1972 agreement. What is clear is that there was no clear and unambiguous assertion that Sorrento or Great Georgian was entitled to the Parkette. In my view, this evidence does not support the theory of mistake – the only mistake that was made was the mistaken belief that title to the Parkette had been registered in the name of the Town.

65Does The District Park Fulfill The 1972 Agreement? Waterstone relies on the deeding of the 30-acre District Park as satisfying the re-conveyance condition in the 1972 Agreement. The deeding of the District Park was a condition of a subdivision agreement in 1986 (which I earlier referred to as the 1986 Agreement) between Anthony Maida’s company, Summercourt Estates, and the Town. They argue that the deeding of the 30-acre District Park more than fulfills the conditions in the 1972 Agreement.

66I have a great deal of difficulty with this argument. The 1986 Agreement does not involve Sorrento or Great Georgian. Summercourt is a different party. There is no evidence that Summercourt had any interest in the 1972 Agreement or in the 1973 Agreement. There is no evidence that Summercourt had acquired any interest in the Parkette at any time. I also note that in 1986 if there was a valid re-conveyance clause under the 1972 Agreement, then the interest in that agreement did not belong to Summercourt at the time – it belonged to Sorrento. The agreement whereby one of Anthony Maida’s companies acquired the right to the Parkette (if such right existed) from the other partners of Great Georgian was not made until 2000.

67Furthermore, the 1986 Agreement does not mention any of the earlier agreements. It does not reference the re-conveyance condition in the 1972 Agreement. It does not reference the lands or the plan number comprising the Parkette. If the 1986 Agreement were in satisfaction of the transfer of the Parkette, it strikes me that it would have been a fundamental term and would have been included.

68Assuming that Anthony Maida’s evidence on this point is admissible, at paragraph 3 of his affidavit sworn September 29 2015 he states:

In 1985, Wyndcliffe, one of my companies, transferred 30 acres of a nearby property to the Town for parkland to fulfill this obligation.

69I simply cannot accept this assertion. It is highly unlikely that Wyndcliffe transferred the 30 acres in fulfillment of a right that would only be acquired by a related company 15 years later.

70Furthermore, Anthony Maida’s evidence is contradictory. In his supplementary affidavit sworn January 25 2016, Anthony Maida stated that it was always his intention to have the Parkette re-conveyed. He notes that he was present in 1972 and 1973. And yet, in the same affidavit he states:

As President of Wyndcliffe and Summercourt, I was the person who in 1985 agreed to transfer the 30 acre park site to the Town of Caledon. At the time, I was in the midst of developing land, marketing and designing new homes, and managing our companies. As a result, I overlooked the Reconveyance Agreement that had been entered into in 1972.

71That evidence contradicts the evidence in the September 29 2015 affidavit. Anthony Maida himself did not even recall that the “Reconveyance Agreement” existed in 1986. In essence, the position of Waterstone is that the Court should give effect to what would have been the intention of one of the parties if that party had remembered the existence of an earlier agreement. That argument obviously cannot succeed.

72Furthermore, if Anthony Maida is right that Domenic Maida would have reminded him about the Parkette during the 2000 negotiations, then surely Domenic should have also reminded him about the Parkette during the 1986 negotiations. This is especially so considering that only the year before Domenic raised the issue of the District Park in correspondence with the Mayor.

73Finally, it would be unfair to the Town if it were held to have implicitly agreed that in 1986 the District Park satisfied the conditions in the 1972 Agreement where the Parkette was not even mentioned in the 1986 Agreement. How is a municipality to know what rights it is bargaining away on behalf of its citizens? Such a ruling in this Court would open the door to a developer altering the scope of a subdivision agreement after it had been negotiated and signed. That cannot be the law.

74I agree with the Town that the 1986 Agreement has no application.

75Conclusions Regarding The 1972 Agreement and 1973 Agreement. I find that the 1973 Agreement applies. The Town is the beneficial owner of the Parkette, free and clear of encumbrances. That is enough to dispose of the two applications before the court, but for the sake of completeness I will deal with some of the other arguments raised by the parties.

(c) How Does Public Policy Affect The Application?

76There are also important public policy grounds upon which to reject the theory of mistake. To accept that theory would require, in essence, re-writing an obligation entered into between a municipality and a developer based on parol evidence submitted by one of the parties. Municipalities are democratic bodies exercising the governmental powers, including the power of taxation. They take on obligations on behalf of citizens and enforce the obligations of developers in the public interest.

77In University Village v. Guelph (1992), 22 R.P.R. (2d.) 107, [1992] O.J. No. 324 (Gen.Div.) the developer had deeded land to the municipality on the understanding that it would be deeded back to him at a later date. The land was unsuitable for development but the city engineer was concerned that a third party might try to develop it. The subdivision agreement made no mention of this collateral agreement to return the land. The developer sued for the return of the land. McNeely J. rejected the collateral agreement argument. I respectfully adopt the following comment at paras. 15-16:

A municipal corporation is a creature of statute and the extent of its powers and the way in which they can be exercised is a matter of public law which everyone dealing with a municipality is presumed to know. In Ontario the decision making power of municipalities is given to the municipal council and it is to exercise those powers by by-law. As Ritchie J. observed with respect to a municipal corporation in Silvers Garage Ltd. v. Bridgewater, [1971] S.C.R. at 586:

It appears to me to be imperative at the outset to appreciate that an incorporated town subject to the Act, is in a different position at law from a natural person or a limited company; the inhabitants constitute the corporation and the power conferred on it by the legislature are required to be exercised by its elected governors (i.e. the council) in the manner prescribed by the Act."

This requirement is based not only on the statutory provisions of the Municipal Act but on sound public policy. Municipalities exercise in relation to their ratepayers the coercive power of the state. The financial obligations contractual or otherwise that municipalities incur are discharged on the backs of their ratepayers. The little control that the ratepayers have consists in the fact that the powers of the municipality are to be exercised by a council elected by the ratepayers. Courts should be slow to erode that control beyond the exceptions already recognized by law. Counsel for the defendant objected to the admission into evidence of parol evidence for the purpose of attempting to vary or modify the subdivision agreement. I agree with the position of the defendant and agree that parol evidence aimed at varying or altering the Subdivision agreement is not admissible for that purpose.

78Ultimately McNeely J. found for the developer on the basis of a resulting trust. His decision was upheld by the Court of Appeal: University Village v. Guelph, [1995] O.J. No. 1839 (C.A.).

(d) Is Justice Backhouse’s Decision Relevant?

79Anthony Maida, in his affidavit, relies on the fact that there had been other mistakes made in various agreements between the developers and the Town. Justice Backhouse, in a decision concerning a different piece of land within the same plan of subdivision, found that it had been conveyed by mistake: Sorrento Developments Limited v. Town of Caledon; affirmed at .

80The land in question was also part of the 1973 Agreement as it was part of Plan 990, although it did not include the lands comprising the Parkette. Mr. Skells signed the deed transferring the particular parcel to the Town. He testified that he did so by mistake. Domenic Maida also testified that the transfer was a mistake. Mr. Oastler, the Town Solicitor, agreed that the conveyance was a mistake. Justice Backhouse found that the transfer was a mutual mistake. The Town resisted transferring the land back to Sorrento on an issue estoppel basis. Justice Backhouse did not agree and ordered the transfer.

81In my respectful view, Justice Backhouse’s decision does not assist Waterstone. In fact, it assists the Town. Justice Backhouse described the testimony of David Oastler, the Town Solicitor at the time, this way:

Mr. Oastler testified that when Mr. Skells first brought this matter to his attention in 1995, he agreed to look into it. He testified that the Maida family had a number of subdivision agreements with the Town and that it was not unusual for terms in agreements to be re-negotiated in subsequent agreements. He testified that Part 1 may have been conveyed to the Town as additional parkland in connection with other sub-divisions in the area developed by Georgian or because it was unsuitable for residential use. He testified that he had searched for something like that but that there was no document, letter, or agreement which altered Paragraph 1.1 of Schedule F to the 1973 Subdivision Agreement. [emphasis added]

82Here, the Town does not agree that including the Parkette in the 1973 Agreement was a mistake. Further, the 1973 Agreement very clearly includes the Parkette. That also makes it difficult to accept that the 1973 Agreement was a mistake, rather than a re-negotiation.

(e) Does Adverse Possession Apply?

83The Town argues that if it is not the beneficial owner of the Parkette by virtue of the 1973 Agreement, then, in the alternative, it is by way of adverse possession. It has been in possession of the Parkette since 1974, and it has been maintained as a park since at least 1977, almost forty years. The Town’s alternative argument would only apply if the 1972 Agreement took precedence and Waterstone was indeed the beneficial owner of the Parkette.

84Waterstone make two different arguments that the Town cannot establish adverse possession:

• First, the Town simply doesn’t meet the test for adverse possession because it had the permission of Great Georgian to use the land; and,
• Second, the when the Parkette was registered in Land Titles it extinguished any adverse possession claim.

85I disagree with both arguments.

86Under s. 4 and s. 15 of the Real Property Limitations Act the interests of an actual owner of land may be extinguished by a party in adverse possession for ten years. For a claim in adverse possession to succeed, the party claiming must establish these elements:

• Actual possession;
• An intention to exclude
• Discontinuance of possession for the statutory period by the owner and all others.

87A claim of adverse possession will fail unless all three elements are established: Teis v. Ancaster (Town), 35 O.R. (3d) 216 at para. 9.

88There is no question that the Town’s possession of the Parkette was open, notorious, peaceful, and exclusive after at least 1974 and certainly after 1977. Waterstone does not dispute that point. Nor does Waterstone dispute that its predecessor in title discontinued possession for the statutory period prior to 1995. Waterstone therefore agrees that the Town can establish the first and third elements. It argues, rather, that the Town had the agreement of Great Georgian under the 1972 Agreement to occupy the land and use it as a Parkette. The possession was, therefore, not adverse: Meuller v. Lee at para. 16.

89I would agree with Waterstone’s argument if, indeed, the 1972 Agreement applied and if there were evidence that Sorrento (and later Great Georgian) regarded the Town’s possession as merely temporary as set out in that Agreement. That would certainly defeat the Town’s claim for adverse possession.

90That however, is not the evidence. The evidence, as I have set out, is that everyone was under the impression that the 1973 Agreement applied. At its highest, this was a case of mutual mistake. Where there is a case of mutual mistake, the inconsistent use test cannot be used to defeat a claim to possessory title: Teis v. Ancaster (Town) at para. 23. Both the Town and Sorrento appear to have operated under the assumption that the Town was entitled to possession of the Parkette until at least 1995, well within the ten-year statutory period. That alone is enough to support the Town’s claim in adverse possession. As I have set out already, Domenic Maida (and Anthony Maida) both acted as if the 1973 Agreement applied. Nobody seems to have invoked the “Reconveyance” agreement until many years later – certainly not in 1986 when the District Park was conveyed, and not until at least 1995. Thus, even if the 1972 Agreement did indeed apply, both parties were at least mistaken as to the entitlement to title for the statutory ten-year period from 1977 to 1987. Even if I am mistaken about the time that the Town took possession of the Parkette, and it was as late as 1980, that is still enough to establish the statutory period.

91Accordingly the Town’s adverse possession argument succeeds, unless the second argument made by Waterstone is correct – that the adverse possession claim was extinguished when the Parkette was registered in Land Titles in 1999.

92In my view that argument is not correct. The argument is premised on the evidentiary point that the adverse possession only crystallized 1995. They argue that at that point the town no longer had the permission of Sorrento to continue in possession. It was only at that point that the possession became adverse. When the Parkette was registered in Land Titles, any adverse possession claim based on a time period shorter than ten years was extinguished. That is because adverse possession may not be asserted in Land Titles: s. 44(3) and s. 51(1) of the Land Titles Act.

93I would agree with Waterstone if adversity only crystallized in 1995. The evidentiary record does not assist for the same reasons I described earlier: if the possession was adverse, then adversity crystallized much earlier. The Land Titles Act has no application.

(f) Does Dedication And Acceptance Apply?

94The Town argues that if it is not the beneficial owner of the Parkette through the application of the 1973 Agreement or the doctrine of adverse possession, then the doctrine of dedication and acceptance applies. The Town argues that the where the owner of land dedicates land for a public purpose, and the public accepts the land for that purpose, then the public can acquire a right to the use of that land: Gibbs v. Grand Bend (Village) (1995), 26 O.R. (3d) 193 (C.A.).

95Gibbs is the leading Canadian authority on the doctrine of dedication and acceptance. The Plaintiff brought an action for a declaration that he and his numbered company were the owner of the famous beach near Grand Bend on Lake Huron. The chain of title could be traced to 1836 when the original Crown patent was made. There were two issues. The first was whether the beach was included in the original Crown patent or whether the Crown had reserved a strip of land along the beach. The second issue was whether the public, the Crown, or the municipality had obtained rights of ownership or usage by reason of dedication, custom, or use by the public for recreational purposes.

96All three members of the Court of Appeal wrote decisions. Finlayson J.A. and Brooke J.A. found that the beach had been reserved for the Crown. Carthy J.A. dissented on that point but ultimately agreed in the result because he agreed with Brooke J.A. that the doctrine of dedication and acceptance applied.

97In Wright v. Long Branch, [1959] S.C.R. 418, Rand J. in the Supreme Court of Canada, quoting with approval the following statement from the Ontario Court of Appeal Re Lorne Park Road (1914), 33 O.L.R. 51 (C.A.) describing the doctrine:

The full applicability of the doctrine of dedication to parks and public squares and commons is now generally recognized, and where land is dedicated for a public square without any specific designation of the uses to which it can be put, it will be presumed to have been dedicated to such appropriate uses as would under user and custom be deemed to have been fairly in contemplation at the time of the dedication.

98In order for the doctrine to apply, a party must show:

• That there was an actual intention to dedicate the land by the owner; and,
• It must appear that the intention was carried out in that the land was open to the public for use, and the public accepted it.

99An intention to dedicate may be inferred from the circumstances, especially long uninterrupted public use. As Brooke J.A. noted at para. 110 of Gibbs:

Open and unobstructed use by the public for a substantial period of time is, as a rule, the evidence from which a trier of fact may infer both dedication and acceptance… Once a dedication is complete, neither the owners nor their successors in title could revoke it… Neither the dedicator nor his successors in title can resume control of or convey the land free from the public rights to its use, nor can anything be done by the present owners to take back that which had been previously given away… [Citations omitted.]

100Waterstone argues that dedication cannot apply because Sorrento had no intention of dedicating the land as parkland. Waterstone argues that the 1972 Agreement makes it clear that any grant of land was meant to be temporary. Accordingly, the Town fails the first part of the test.

101I cannot agree with that submission. As I have already held, the 1973 Agreement forecloses that argument. There is no question that the 1973 Agreement showed an intention to dedicate the Parkette as parkland by Great Georgian. I would go further and determine that the doctrine of dedication and acceptance applies if either the 1973 Agreement or adverse possession did not.

102Even if the 1972 Agreement applied, it was a clear dedication of the Parkette as parkland. There was no question that both parties assumed that the Parkette would be used as a park, even if the “Re-conveyance Agreement” somehow applied at a future date. The land was zoned for recreational purposes with no objection from Great Georgian or Sorrento. Further, the plan of subdivision for Plan 990 that was registered on title by Great Georgian showed the Parkette as parkland. Neither Great Georgian nor Sorrento nor any other successor in title asserted a right to the Parkette until at least 1995, more than 20 years after the dedication (assuming that happened in 1972), and almost 20 years after which the public had been using the Parkette for recreational purposes (from 1977). Thus, I conclude that the owners dedicated the parkland without reservation in 1973, and with some reservation in 1972.

103The public has been using the Parkette as a park with no interference or obstruction since 1977. Waterstone does not dispute that fact (although it might dispute whether it is 1979 or 1980 rather than 1977). That is almost 40 years. In my view, that clearly constitutes acceptance by the public.

104Accordingly, the doctrine of dedication and acceptance applies.

DISPOSITION

105The application by Waterstone and Wyndcliffe is dismissed. The Town’s application for a declaration that it is the beneficial and legal owner of the lands constituting the Parkette is granted. An order directing the Land Registrar to correct the parcel register is also granted.

COSTS

106Counsel may each file a costs outline and costs submissions of no more than two pages within 30 days of the release of this judgment.

R. F. Goldstein, J.

Released: August 26, 2016