Bellhouse v. Kaas

CITATION: 2018 ONSC 3382

COURT FILE NO.: 11704/17

DATE: 2018-05-30

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Susan Michelle Bellhouse, Applicant

AND: Henry Peter Kaas and Tara Leon Kaas, Respondents

BEFORE: Mr Justice Ramsay

COUNSEL: Duncan M. MacFarlane, QC for the Applicant; Adam J. Stewart for the Respondent

HEARD: May 30, 2018 at Welland

ENDORSEMENT

[1] The file contains two Applications under Rule 14.05. Ms Bellhouse’s Application was filed first, so I shall refer to her as the Applicant and to Mr Kaas and Ms Leon as the Respondents.

[2] The Respondents move under s. 7 of the Arbitration Act, 1991, S.O. 1991, c.17, to stay the Applications pending arbitration. That section provides:

7 (1) If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding.

[3] The parties are next door neighbours on Lake Erie. They are successors in title to a brother and sister who originally owned these two lots and who gave each other rights of way. There is a mutual right of way over a common driveway that weaves back and forth across the property line. It is not the main bone of contention. The Applicant also has a right of way over a set of concrete steps at the bottom of the Respondents’ property that leads to the beach.

[4] The Respondents put up a gate that prevents use of the staircase. The Applicants applied for an injunction and a declaration that they are entitled to use the rights of way.

[5] The Respondents have applied for the following relief:

a. A declaration that the Applicant is no longer entitled to the use of the rights of way;

b. An order removing the rights of way from title;

c. An order that the parties share the cost of creating two separate driveways for the respective parties’ exclusive use; and

d. An injunction.

[6] The Respondent also asks in the alternative for an order setting out “guidelines for minimum use of the rights of way.”

[7] The arbitration agreement is simple. It says:

The parties hereto agree that the expense of maintaining the joint right of way, walk and stairs in reasonable repair shall be borne by the parties hereto equally. If any disagreement as to such expenses or nature of the user of the said right of way shall arise, the same shall be settled pursuant to the provisions of the Ontario Arbitration Act.

[8] The authority on point is Haas v. Gunasekaram, 2016 ONCA 744. From it I derive the following principles. First, the law favours giving effect to arbitration agreements. Second, the arbitrator can decide questions of jurisdiction. It is only where it is clear that the dispute is outside the terms of the arbitration agreement that the court should reach any final determination in respect of such matters on an application of a stay of proceedings.

[9] On a motion such as the present one the judge’s task involves a number of sub-issues:

a. Is there an arbitration agreement?

b. What is the subject-matter of the dispute?

c. What is the scope of the arbitration agreement?

d. Does the dispute arguably fall within the scope of the arbitration agreement?

e. Are there grounds on which the court should refuse to stay the action?

[10] The parties agree that there is an arbitration agreement. The subject matter of the dispute is whether the Applicant should be entitled to exercise the rights that were conveyed to her. The Applicant is not seeking any direction as to the nature of her user of the rights of way. The issue is whether the rights of way should continue to be used at all, or whether their use has become “obsolete” or “abandoned” and the rights of way should be removed from title and their use enjoined. In other words, it is the existence of the rights of way that is in question.

[11] I cannot think of any reasonable interpretation that would allow disagreement as to the expenses of maintaining the rights of way in repair or the nature of their user to include whether the rights of way still exist. I do not think that it is arguable that the dispute falls within the scope of the arbitration agreement.

[12] The Respondent also asks for an order as to expenses of creating separate driveways. This has nothing to do with the expense of maintaining the rights of way. It has to do with expenses of building new driveways on land that is not subject to any right of way.

[13] The Respondent asks in the alternative for directions as to “minimum use of the rights of way.” That could be interpreted as something related to the nature of user, but that is no reason to stay the Applicant’s proceeding. This particular head of relief should be submitted to arbitration if the Respondents see fit to pursue it. It is a side issue of comparatively less importance, although the evidence on this point could take up more time than the evidence as to the existence of the rights of way and alleged interference therewith, which is essentially documentary or undisputed. Conceptually it is easy to separate the side issue from the main question. I think it reasonable in the circumstances to separate it.

[14] In summary, then, I find as follows:

a. There is an arbitration agreement.

b. The subject matter of the dispute is whether the Applicant continues to have rights of way over the Respondents’ property.

c. The arbitration agreement encompasses disputes about expenses of maintenance and nature of user of the rights of way.

d. The dispute does not arguably fall within the scope of the arbitration agreement, except for the alternative relief sought by the Respondents at paragraph 1(g) of their Application.

e. The Respondent’s Application is stayed only to the extent that it seeks the relief set out at paragraph 1(g) thereof.

[15] The costs of this motion are fixed at $1,500 and reserved to the application judge.

J.A. Ramsay J.

Date: 2018-05-30