COURT FILE NO.: CV-17-150-00
DATE: 2018-04-06
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Robin Lacey and Jennifer Lacey
M. Cupello, for the Applicants
Applicants
- and -
Kakabeka Falls Flying Inc.
W. Mouck, for the Respondent
Respondent
HEARD: September 26, 2017; January 26 and March 5, 2018 at Thunder Bay, Ontario
Mr. Justice W.D. Newton
Decision On Application
Overview
[1] Kakabeka Falls Flying Inc. (“the club”) entered into a 99 year lease for certain lands owned by Robert Spence (“Spence”) in 1968. Since then, the club has operated a landing field on the property. In 2010, with knowledge of the lease, the applicants (“Lacey”) purchased the Spence property.
[2] Seven years after the purchase, Lacey seeks to have the lease declared void for contravening the Planning Act.
[3] The Planning Act, prior to May 2, 1968, permitted a lease of land for a period of greater than 21 years provided that both the grantor and grantee held abutting property of 10 acres or more. It is admitted that the leased premises and the property owned by Lacey are each greater than 10 acres. Therefore, the lease was valid under the Act. Amendments assented to on May 2, 1968 repealed this exemption and, thereafter, the lease would not have been valid if extended after that date.
[4] Central to this application is a determination of when the lease was entered into and whether there are any means that may preserve the lease.
The Facts
[5] The lease states that the “indenture” was made November 26, 1968, some six months after the Planning Act amendments. The lease provides that the lessor has demised premises “designated as Part 2” on the attached plan of survey dated April 17, 1968.
[6] The lease provides that the term is 99 years computed from January 1, 1967.
[7] The lease provides that the sole and express use of the land will be as a “flying club with a grass strip runway only”.
[8] Rent is payable from January 1, 1968. Initially, the annual rent was $300.00. The current annual rent is $700.00.
[9] The lease was signed by Spence and the president and secretary of the incorporated club.
[10] The club was not incorporated until February 19, 1969, two months after the execution of the lease.
[11] The lease was registered on title on September 14, 1972.
[12] The president of the club deposed that the leased premises are an Aerodrome registered with Transport Canada and that the property has been used only for that purpose. The uncontradicted evidence is that the club improved the property by removing timber (which was kept and used by the lessor as contemplated under the lease) and has leveled the ground for the purpose of constructing the airfield. The club has 65 members currently and is a base for approximately 40 small aircraft.
[13] Lacey purchased the Spence property (which includes the leased premises) on June 9, 2010 from Spence’s children after Spence’s death.
[14] Lacey accepted all rental payments from January 2011 until 2016 when Lacey refused to accept further payments.
[15] Lacey was a member of the club until his pilot’s license was revoked.
Positions of the Parties
[16] Lacey argues that since the lease was not made until November 20, 1968, or perhaps even later, the lease violates the Planning Act and that any oral agreement prior to the Planning Act amendment on May 2, 1968 is not valid because it is not in writing as required by the Statute of Frauds.
[17] The club argues that the lease, although formally executed after the Planning Act amendment, is nevertheless valid and the Statute of Frauds requirement that the agreement be in writing is defeated by the doctrine of part performance. In any event, the club argues that, because the land is used as an Aerodrome and governed by federal legislation, the Planning Act does not apply.
Analysis and Disposition
The Law on Part Performance
[18] In Hill v. Nova Scotia (Attorney General), 1997 401 (SCC), [1997] 1 S.C.R. 69 and Erie Sand & Gravel Ltd v. Seres’ Farms Ltd., 2009 ONCA 709, the Supreme Court of Canada and the Ontario Court of Appeal discussed the doctrine of part performance and stated that equity would not allow the Statute of Frauds “to be used as an engine of fraud.” As the Supreme Court stated, “[q]uite simply equity recognizes as done that which ought to have been done.” See Hill at paras. 10, 11. In Erie Sand & Gravel, the Ontario Court of Appeal said:
64 Hill stands for this principle: if one party to an otherwise unenforceable agreement stands by while the other party acts to its detriment by performance of its contractual obligations, the first party will be precluded from relying on the requirements in the Statute of Frauds to excuse its own performance[...].
[19] The parties agree that to establish part performance the club must meet this four-part test:
a. The performance must be referable to the contract;
b. The acts of performance must be the acts of the club;
c. The contract must be one for which the law would grant specific performance if it had been properly evidenced in writing; and
d. There must be clear and proper evidence of the existence of the contract. See for example Kang Corp. v. KRTT Group Ltd., [2007] O.J. No. 1500 at para. 12.
[20] In this case, despite the fact that the lease was not formerly reduced to writing until after the Planning Act amendment, I am satisfied that there was part performance prior to May 2, 1968 and that the lease is, therefore, valid and not in contravention of the Planning Act. For performance referable to the contract by the club, I rely upon the survey of April 17, 1968 showing the demised property, the improvements to the property by the club and the rental payments which I am satisfied were made from January 1, 1968 and accepted by Lacey after Lacey’s purchase of the property. Further, I am satisfied that the fact that this agreement was subsequently reduced to writing is evidence that part performance occurred.
[21] As such, it is unnecessary for me to consider the jurisdictional issue.
[22] This application is dismissed.
[23] The club shall deliver its costs submissions within 20 days of the release of these reasons. Thereafter, the applicants will have 15 days to respond. If necessary, the club may reply within five days. All costs submissions are limited to three pages plus costs outline plus authority. If submissions are not received within 20 days then costs will be deemed settled.
“original signed by”
The Hon. Mr. Justice W.D. Newton
Released: April 6, 2018
COURT FILE NO.: CV-17-150-00
DATE: 2018-04-06
ONTARIO
SUPERIOR COURT OF JUSTICE
Robin Lacey and Jennifer Lacey
Applicants
- and -
Kakabeka Falls Flying Inc.
Respondent
DECISION ON APPLICATION
Newton J.
Released: April 6, 2018
/lvp