COURT FILE NO.: CV-18-770 & CV-18-1038
DATE: 2019 07 22
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Paleshi Motors Limited
Applicant
– and –
The Corporation of the Township of Woolwich
Respondent
Shane Rayman and Conner Harris, for Paleshi Motors Limited
AND BETWEEN
The Corporation of the Township of Woolwich
Applicant
– and –
Paleshi Motors Limited
Respondent
Peter Hertz, for The Corporation of the Township Woolwich
HEARD: April 12, 17, 23, 2019
THE honourable MR. JUSTICE G.e. Taylor
reasons for judgment
Introduction
[1] In 1979 or 1980, The Corporation of the Township of Woolwich installed a watermain on land which is now owned by Paleshi Motors Limited. In July 2017, Frank Rattasid, on behalf of Paleshi Motors, contacted the Township and requested that the watermain be removed from the property owned by Paleshi Motors. The Township declined to do so.
[2] Paleshi Motors commenced an Application in June 2018 seeking various forms of relief including an order that the Township remove the watermain from its property. In addition to responding to the Application by Paleshi Motors, the Township commenced an Application in August 2018 seeking various forms of relief including a declaratory order that the Township is entitled to a prescriptive easement over the land on which the watermain is located.
[3] Both Applications were heard together. Counsel for both parties agreed that there is sufficient evidence before the court to allow a decision to be made on each of the Applications.
Facts
[4] Frank Rattasid describes himself as a representative of the automobile recycling yard which carries on business at the Paleshi Motors property. 2457557 Ontario Inc., a corporation owned by Rattasid’s wife, acquired the shares in Paleshi Motors on March 26, 2015. Although Rattasid’s wife is the beneficial owner of the shares of the company that owns the shares in Paleshi Motors, Rattasid is the operating mind of, and makes all important decisions on behalf of Paleshi Motors.
[5] Paleshi Motors owns two adjoining parcels of land which together are known municipally as 39 Arthur Street North, Elmira. These parcels of land are described as Lots 20 and 21 on Plan 1301. I will refer to Lots 20 and 21 on Plan 1301 collectively as “the Paleshi property”. I will refer to the lots individually as “Lot 20” and “Lot 21”. Lot 20 has access to Arthur Street North and is to the west of Lot 21. Paleshi Motors acquired title to Lot 20 by way of a deed registered on July 31, 1975. Paleshi Motors acquired title to Lot 21 by way of a deed registered on July 16, 1981. The owners of Lot 21 before it was transferred to Paleshi Motors were John Miller, Franz Kastl and Hermann Becker.
[6] The recycling yard is located on Lot 20. Lot 21 is undeveloped land which is zoned Open Space. The watermain which is the subject matter of these Applications is located just inside the eastern boundary of Lot 21.
[7] Based on Township records, including minutes of the Public Works Committee Meetings on May 15, 1979 and March 4, 1980, a Construction Drawing dated May 31, 1979 and consultation with an engineer with the successor engineering firm responsible for preparation of the Construction Drawing, it would appear that the watermain was installed on the Paleshi property between July 1979 and March 1980.
[8] From the Minutes of the Public Works Committee Meeting held on June 19, 1979, it is apparent that the Township was aware that the watermain, when constructed, would be on land which was not owned by the Township. The following is an excerpt from those Minutes:
The construction of the proposed watermain loop from High Street north, crossing the railway property in Elmira, was discussed with the Engineer. His report suggested that the extension of this watermain go west on High Street, from George Street, then north through lands which appear to be a portion of Bolender Park and across the railway right-of-way. Councillor Hill indicated that the lands in question between the westerly limit of High Street and the railway tracks were privately owned and not owned by the municipality. Under these circumstances, the Clerk was instructed to investigate the ownership of these lands and report back to the Committee.
The Township has no record of the outcome of the investigation that the Clerk was instructed to undertake. After an extensive search, no report to the Public Works Committee has been found. No evidence was presented from any of the individuals who owned Lot 21 prior to its conveyance to Paleshi Motors.
[9] Kieran Kelly, an employee of the Township who was a volunteer firefighter with the Township in 1979 and 1980, gave evidence on the Applications that the watermain was installed in 1979 and that when it was being installed, the construction was visible from the adjoining and nearby properties including Church Street and High Street. Kelly also testified that he was employed by the Township in the sewer and water department from 1984 until 2015. He said that he and other Township employees entered Lot 21 for the purpose of maintaining the watermain without seeking permission from anyone associated with Paleshi Motors to do so. When he and other Township employees accessed Lot 21 to service the watermain they did so in an open and visible manner.
[10] A Reference Plan Number 58R-2812 was deposited on September 11, 1979 depicting Parts 1 and 2 along the easterly boundary of Lot 21 in the location of where the watermain was installed. The Reference Plan indicates that the owners of Parts 1 and 2 were the predecessors in title of Lot 21 to Paleshi Motors. There is no evidence that the then owners of Lot 21 granted permission to the Township to install the watermain on their property. There is no evidence of an easement agreement being entered into with the owners of Lot 21 with respect to Parts 1 and 2 on the Reference Plan. During oral submissions, counsel for Paleshi Motors asserted that at no time has Paleshi Motors or the previous owner of Lot 21 agreed to the watermain being located on Lot 21.
[11] Since it was installed, the watermain has been used and maintained by the Township without objection until the time the shares in Paleshi Motors were acquired by Rattasid.
[12] In a Site Plan Agreement dated June 30, 1988, registered on July 8, 1988, between Paleshi Motors and the Township, reference is made to Proctor and Redfern drawing A1-86981-G1 dated November 1986. At the time, Proctor and Redfern were the consulting engineers for Paleshi Motors. The drawing references a 150 mm watermain appearing to extend onto Lot 21 and in particular on Part 1 of Plan 58R-2812.
[13] The Paleshi property was converted to the Land Titles registry system on September 16, 2002.
[14] Rattasid was cross examined on his affidavits filed in the Applications. He testified that:
a) he had no dealings with the Paleshi property prior to 2015;
b) he has no knowledge of anything relating to the Paleshi property prior to March 2015;
c) he does not know whether Paleshi Motors was aware in 1986 (the time of the Proctor and Redfern drawing) that there was a watermain on the eastern edge of Lot 21;
d) he made no inquiries about Parts 1 and 2 on Plan 58R-2812 before he purchased the shares of Paleshi Motors.
[15] Rattasid deposed in his affidavit sworn June 11, 2018 that in July or August 2017, David Brenneman, the Township’s Chief Administrative Officer, committed to removing the watermain from the Paleshi property. When cross examined on that affidavit, he said he could not remember if this commitment by Brenneman was made by telephone or email. Rattasid was asked about an email sent to him by Brenneman dated July 14, 2017 in which Brenneman stated that “we are not about to remove/re-locate a waterline that I would expect has been in place for a considerable amount of time”. Rattasid was also shown a copy of an email to him from Brenneman dated August 4, 2017 in which reference was made to the Township obtaining an easement over the property where the watermain is located. Rattasid could not recall if the commitment to move the watermain was made before or after he received either of these email messages from Brenneman.
[16] Brenneman was examined as a witness on the Applications pursuant to rule 39.03 of the Rules of Civil Procedure. Brenneman denied ever making a commitment to Rattasid that the Township would remove the watermain from the Paleshi property.
[17] Rattasid was vague about when the commitment to relocate the watermain was made. He was vague on timing and could not recall whether it had been made during the course of a telephone conversation or in an email. I find it unlikely that in the same time period in which Rattasid says Brenneman committed to moving the watermain, he was sent an email by Brenneman saying that the Township would not relocate the watermain and another email making reference to obtaining an easement. I further find it strange that Rattasid would not respond to Brenneman’s emails by referring to the commitment to move the watermain. I therefore conclude that Paleshi Motors has not established on a balance of probabilities that a commitment was made by Brenneman or anyone else on behalf of the Township to remove the watermain from the Paleshi property.
[18] There was no evidence from the owner or owners of the shares of Paleshi Motors before the sale to Rattasid’s wife.
Prescriptive Easement
[19] To establish a prescriptive easement, the party claiming the easement must establish the four essential characteristics of an easement which are:
a) there must be a dominant and servient tenement;
b) the easement must accommodate the dominant tenement;
c) the dominant and servient owners must be different persons; and,
d) the easement must be capable of forming the subject matter of a grant
(Barbour v. Bailey, 2016 ONCA 98 at paragraph 55 and Kaminskas v. Storm, 2009 ONCA 318, [2009] O.J. No. 1547 at paragraph 27).
[20] In addition, the party claiming the easement must show that its use and enjoyment of the easement was continuous, uninterrupted, open and peaceful for a period of 20 years. The claimant must also establish that its use was “as of right” as opposed to by permission (Barbour v. Bailey, 2016 ONCA 98 at paragraph 60 and Kaminskas v. Storm, 2009 ONCA 318, [2009] O.J. No. 1547 at paragraphs 28 and 30).
[21] The Paleshi property was converted to the Land Titles registry system on September 16, 2002. To acquire an easement by prescription for the watermain over Lot 21, the Township must demonstrate a use and enjoyment of the easement pursuant to a claim of right that is continuous, uninterrupted, open and peaceful for a period of 20 years (Henderson v. Volk, 1982 CanLII 1744 (ON CA), [1982] O.J. No. 3138). Because of the conversion to Land Titles in September 2002, the Township must establish that it had continuous, uninterrupted, open and peaceful use of that portion of Lot 21 on which the watermain was installed for a period of at least 20 years as of September 16, 2002.
[22] The evidence on the Applications establishes that the Township’s use and enjoyment of the easement over Lot 21 for the purpose of installing and maintaining the watermain has been continuous and uninterrupted since at least March 1980. Based on the Minutes of the Public Works Committee Meetings on May 15, 1979 and March 4, 1980 and the Construction Drawing dated May 31, 1979 the installation of the watermain on Lot 21 was completed by at least March, 1980 and was likely completed in the fall of 1979. From the evidence of the Township employee, Kelly, I am satisfied that Township employees have regularly and openly entered onto Lot 21 for the purpose of maintaining the watermain.
[23] The Township must also establish that its use of Lot 21 for the installation and maintenance of the watermain was not pursuant to permission granted by the owner.
[24] There are a number of policy considerations with respect to prescriptive easements including:
a) courts should tread cautiously before finding a prescriptive easement because to do so creates a burden on the servient owner’s land without compensation;
b) courts should be cautious about finding a prescriptive easement because to readily grant such an easement risks discouraging acts of kindness and good neighbourliness and may punish the kind and thoughtful neighbour while rewarding the aggressor;
c) courts ought reasonably to protect the dominant owners reliance interest where the usage has been only open and uninterrupted for many years and the evidence clearly shows the servient owner has acquiesced in that usage;
d) courts should not propound rules that rewarded dominant owners surreptitious behaviour and that discourage neighbours from approaching one another about potentially litigious issues
(1043 Bloor Inc. v. 1714104 Ontario Inc., 2013 ONCA 91 at paragraphs 103 to 106).
[25] I am satisfied that the four requirements of a prescriptive easement have been established. The Paleshi property, and in particular Lot 21, is the servient tenement. High Street and other Township property serviced by the watermain is the dominant tenement. The owners of the two tenements are different and it would be possible for an easement to be granted for the watermain to be installed and maintained on Lot 21.
[26] From the Minutes of the Public Works Committee Meeting held on June 19, 1979, I conclude that the Township was aware that the proposed looping of the watermain would result in the watermain being installed on land which it did not own. Although the Clerk was instructed to investigate and report back, there is no evidence about whether such an investigation was undertaken and if a report was submitted. There is no evidence from the owners of Lot 21 at the time of installation of the watermain about whether they were approached and their permission sought or whether, if sought, such permission was granted or refused. There is no evidence as to whether any of the three owners of Lot 21 prior to its sale to Paleshi Motors were available to give evidence on the Applications.
[27] Rattasid, in an affidavit sworn June 11, 2018, stated that the watermain was installed without permission of Paleshi Motors (paragraph 20) and that the watermain and ditch were installed without the knowledge of the previous owner and permission to do so was neither sought nor given (paragraph 22). And in an affidavit sworn August 28, 2018, Rattasid deposed that Paleshi Motors did not have knowledge of Reference Plan 58R-2812, was never presented with a copy by the Township or anyone else and a copy is not contained in Paleshi Motor's records (paragraph 26), that Paleshi Motors only learned of presence of the watermain in July 2017 and had the presence of the watermain been known earlier, Paleshi Motors would have raised the matter with the Township (paragraph 28).
[28] There is evidence that Christophoros (Chris) and Charalambos (Bambi) Paleshi could have given evidence on the Applications. Rattasid testified when cross examined on his affidavits that he has not consulted Chris or Bambi Paleshi about the Proctor and Redfern drawing attached to the 1988 Site Plan Agreement (question 359). Rattasid also testified that he has no knowledge of anything relating to the Paleshi property prior to March 2015, he made no inquiries about Parts 1 and 2 on Plan 58R-2812 before he purchased the shares of Paleshi Motors and he does not know whether Paleshi Motors was aware in 1986 (the time of the Proctor and Redfern drawing) that there was a watermain on the eastern edge of Lot 21.
[29] I am satisfied that the statements made by Rattasid in his affidavits were intended to convey the impression that he was speaking on behalf of Paleshi Motors. He did not, however, comply with rule 30.01(4) of the Rules of Civil Procedure in that he failed to state the source of his information and that he believed it to be true. Based on the testimony of Rattasid at his cross examination, it is clear that he did not consult with the previous owners of the shares of Paleshi Motors other than his statement during his cross examination that one of the Paleshis had told him he was not aware of the existence of the watermain. I therefore find that there is no admissible evidence on the Applications regarding the knowledge of the previous owners of the shares of Paleshi Motors about the installation, existence or maintenance of the watermain on Lot 21.
[30] I accept the evidence that the construction of the watermain was visible from the surrounding area. I also accept the evidence that Township employees periodically and openly entered Lot 21 to maintain the watermain.
[31] Paleshi Motors owned Lot 20 when the watermain was installed on Lot 21. It is reasonable to conclude that someone from Paleshi Motors was aware that a watermain was being constructed at or near the eastern boundary of Lot 21. Reference Plan Number 58R-2812 was deposited on September 11, 1979, likely for a purpose related to the construction of the watermain. When Paleshi Motors acquired Lot 21 in July, 1981, it would have been aware that the watermain had been installed on or near the property it was purchasing within the previous two years and that there was a Reference Plan registered on title depicting Parts 1 and 2 in the area where the watermain had been installed. There is no evidence that Paleshi Motors granted permission to the Township to enter onto Lot 21 for the purpose of maintaining the watermain nor is there evidence that Paleshi Motors ever objected to the Township entering onto Lot 21 to service the water main.
[32] In the Site Plan Agreement dated June 30, 1988 between Paleshi Motors and the Township which was registered in July 1988, reference is made to the Proctor and Redfern drawing A1-86981-G1. This drawing, which is dated November 1986, indicates that there is a 150 mm watermain traversing Part 1 of Reference 58R-2812. I conclude from this evidence that Paleshi Motors was aware of the presence of the watermain on its property from at least November 1986. There is no suggestion that Paleshi Motors either objected to watermain being on Lot 21 or granted permission to the Township to enter Lot 21 to maintain the watermain.
[33] The Township must establish that there was a continuous, uninterrupted, open and peaceful use of Lot 21 for the installation and maintenance of the watermain without objection by Paleshi Motors for a period of 20 years before first registration in the Land Titles registry system (Condos and Castles Realty Inc. v. Janeve Corp, 2015 ONCA 466, [2015] O.J. No. 3320 at paragraphs 5 and 6). However, once there is evidence to support the inference of acquiescence for over 20 years of use, the burden transfers to the property owner to rebut the inference by proving that the use was by permission (Condos and Castles at paragraph 17). In my view, that is the current situation. The Township has led evidence of continuous uninterrupted open and peaceful use of Lot 21 without objection by, or permission from, Paleshi Motors or the previous owners of Lot 21. Paleshi Motors has led no evidence that it or the previous owners granted permission to the Township to install and service the watermain on Lot 21 or that it objected to the watermain being on its property prior to first registration in the Land Titles System.
[34] I am mindful of the policy concerns expressed by the Court of Appeal in 1043 Bloor about not finding a prescriptive easement too readily. I recognize that a finding of a prescriptive easement in favour of the Township creates a burden on the Paleshi property without compensation. However, I find that the burden on the Paleshi property is minimal. The watermain is located at the very back of Lot 21 which is zoned Open Space. In my view, the existence of the water main, at most, minimally impairs Paleshi Motor’s use and enjoyment of the property. On the other hand, the watermain is a municipal service which has been in place for almost 40 years. It was not installed surreptitiously. It has been openly maintained by the Township. Paleshi Motors is not a thoughtful neighbour which was taken advantage of by the aggressor Township.
[35] I therefore find that the Township has established a prescriptive easement over Lot 21 and in particular Part 1 of Reference Plan Number 58R-2812 for the purposes of operating, maintaining, repairing and replacing the watermain located on that property.
Mandatory Injunction
[36] It follows from the finding of a prescriptive easement in favour of the Township that Paleshi Motors is not entitled to a mandatory injunction requiring the watermain to be removed from its property. The Application of Paleshi Motors is accordingly dismissed.
Other Relief Sought by the Township
[37] In its Notice of Application, the Township also sought relief relating to alleged breaches by Paleshi Motors of the Site Plan Agreement and the Site Plan Amending Agreement and for breaches of the Township’s zoning bylaw. In my view, it is more appropriate that the allegations of such breaches be litigated in another forum rather than in the present proceeding. I therefore decline to grant any relief to the Township other than the finding of a prescriptive easement.
Costs
[38] If counsel are unable to agree on the appropriate disposition as to costs, they may make written submissions. The written submissions on behalf of the Township are to be delivered to my office within 14 days of the release of these Reasons, not to exceed three pages in length exclusive of a Bill of Costs and Costs Outline. Responding submissions are to be delivered to my office within 28 days of the release of these Reasons, not to exceed three pages in length. Counsel are directed to file electronic copies of their cost submissions at Kitchener.Superior.Court@ontario.ca to my attention.
“G.E. Taylor”
G.E. Taylor J
Released: July 22, 2019
COURT FILE NO.: CV-18-770 & CV-18-1038
DATE: 2019 07 22
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Paleshi Motors Limited
Applicant
- and –
The Corporation of the Township of Woolwich
Respondent
AND BETWEEN
The Corporation of the Township of Woolwich
Applicant
- and –
Paleshi Motors Limited
Respondent
REASONS FOR JUDGMENT
Taylor J
Released: July 22, 2019