COURT FILE NO.: CV-16-543855 DATE: 20200629

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

YORK REGION CONDOMINIUM CORPORATION NO. 890 and PACIFIC MALL DEVELOPMENTS INC.

Plaintiffs

– and –

MARKET VILLAGE MARKHAM INC., THE REMINGTON GROUP INC., KENNEDY CORNERS REALTY INC. and KENNEDY-STEELES HOLDING LIMITED

Defendants

Robert S. Harrison and Jonathan F. Lancaster, for the Plaintiffs

Kenneth Prehogan, Lia Boritz and Kelsey Gordon, for the Defendants Market Village Markham Inc. and The Remington Group Inc.

Ronald B. Moldaver, for the Defendants Kennedy Corners Realty Inc. and Kennedy-Steeles Holding Limited

HEARD: January 13, 14, 15, 16, 17, 20, 21, 22, 23, 24, 27, 28, 29, 30, 31 and February 3, 7 and 8, 2020

REASONS FOR JUDGMENT

SANFILIPPO, J.

Overview

[1] Land ownership is not absolute. Under the common law, the ownership of land is a system of estates and land use may be circumscribed when the title in fee simple is subject to the rights of others. When a landowner grants a right of access over parts of its land, its right to unilaterally develop the land are restricted. These propositions were brought sharply into focus in this dispute between neighboring landowners.

[2] The parties own contiguous commercial retail centres. They share a city block that has some unique features. It is triangular. It is landlocked on one side by a CN Rail Line such that it is accessible to municipal roadways on only two borders. This means that from the inception of their ownership on this “Composite Site”, the parties have had to share and collaborate on two elements that were critical to their common business interests: free passage by their customers over the internal routes needed to access their businesses, and; parking that was plentiful and well-positioned.

[3] The parties achieved these objectives by granting each other easements for access and for parking. These easements are express, reciprocal, mutual, and some are substantively identical. Moreover, they are pervasive and permeate their lands. The parties’ three contiguous properties are identified on the registered Plan of Survey as comprising 36 “Parts”, of which 30 Parts are subject to either an access easement or a parking easement, or both.

[4] Only 6 Parts are not subject to easements. These are the Parts on which the parties’ retail and commercial centres are constructed: the “Building Envelopes”. Two of the six Parts which are owned by the Defendants Kennedy Corners Realty Inc. and Kennedy-Steeles Holding Limited house the “Kennedy Corners Centre”. Three of the seventeen Parts which are owned by Market Village Markham Inc. (“Market Village Inc.”) house the shopping centre formerly known as the “Market Village Centre”, which a related entity, the Remington Group Inc. (“Remington Inc.”), now seeks to re-develop into the much-larger “Remington Centre”. One of the thirteen Parts owned by the Plaintiff, York Region Condominium Corporation No. 890 and its unit owners (“YRCC 890”), houses the “Pacific Mall”.

[5] Conceptually, the parties’ shopping complexes are built on islands in a sea of easements. But only two of these many easements are in dispute in this action: the “Reciprocal Easements”.

[6] YRCC 890 and its co-plaintiff, Pacific Mall Developments Inc. (“Pacific Mall Inc.”) brought this action seeking declarations that the proposed development planned by Market Village Inc. and Remington Inc. (collectively “Market Village”) of a much-larger shopping centre, the “Remington Centre”, contravened the two Reciprocal Easements in two ways. First, that the proposed development will substantially interfere with an easement that Market Village Inc. granted to Pacific Mall Inc. Second, that the proposed development will overburden an easement that Pacific Mall Inc. granted to Market Village Inc. The Plaintiffs sought permanent injunctions to enjoin the Market Village from proceeding with its proposed development project.

[7] Market Village does not deny that its proposed development project involves constructing on land that Market Village Inc. owns but that is subject to an easement granted to Pacific Mall Inc. for access and parking. Market Village does not deny its intention to unilaterally eradicate some surface parking used by Pacific Mall’s customers on easement lands and to relocate drive aisles against Pacific Mall’s objection. Market Village plans to replace lost surface parking spaces with indoor parking spaces that it will unilaterally relocate on the Market Village Land. Market Village contended that this does not contravene the Plaintiffs’ easement rights principally for two reasons: first, because the easements expressly provide Market Village Inc. with the right to “relocate on the Easement Lands the configuration of the driveways and parking spaces”; and second because its construction on servient easement land does not constitute substantial interference.

[8] I disagree. For the reasons that follow, I grant specific declarations that derive from my finding that Market Village’s development project will substantially interfere with and overburden the Reciprocal Easements to the extent that the project involves construction on servient lands and is therefore actionable. I dismiss the remainder of the relief sought by the Plaintiffs as overly broad and unproven and, in the case of the permanent injunctive relief, unnecessary and unestablished.

[9] The Plaintiffs did not seek any relief against the Defendants Kennedy Corners Realty Inc. and Kennedy-Steeles Holding Limited, contending that they were compelled to join these Defendants in this action as necessary and proper parties. These Defendants submitted that they were unnecessarily implicated in this dispute between the Plaintiffs and Market Village. For the reasons that follow, I accept this submission. This action is dismissed as against the Defendants Kennedy Corners Realty Inc. and Kennedy-Steeles Holding Limited.

I. APPROACH TO ANALYSIS

[10] The foundational issue in this action is whether two easements granted in 1994 by and between Market Village Inc. and Pacific Mall Inc., the “Reciprocal Easements”, would be breached by a re-development project that Remington Inc. seeks to construct on lands owned by Market Village Inc. (the “Market Village Land”). To preview the main area of contention, Market Village’s development project involves construction beyond its existing building footprint and onto land subject to an easement in favour of the Plaintiffs.

A. Characteristics of an Easement

[11] My analysis begins with identification of the characteristics of an easement. It is an interest in land.[^1] An easement is not simply a contractual right or licence granted to a party for a determinate period and purpose. It is more than a covenant that “runs with the land” in that it forms part of the land.[^2] When a purchaser takes a conveyance of land, the purchaser takes with it any easement that is registered against title to the land.[^3]

[12] An easement is therefore a right that the easement owner may exercise over land belonging to another. The Supreme Court of Canada defined an easement as “being the privilege of imposing certain burdens on the land of the grantor for the benefit of the adjoining land of the grantee”.[^4]

[13] The terminology pertaining to easements is at times confusing. A landowner who grants the easement, the grantor, has been referred to historically in the case law as the “servient tenement” or the “servient estate”. This is because this person’s land is now encumbered by – servient to – the easement right that has been granted. I will refer to this landowner as the “servient owner”, a term used increasingly in recent case law.

[14] The party who receives the easement, the grantee, usually a neighboring landowner but often a municipality or utility or condominium corporation, has been referred to historically in the case law as the “dominant tenement” or “dominant estate”. This is because this party now has a right that is capable of being asserted against land owned by another. I will refer to the grantee of the easement as the “dominant owner”, a term used increasingly in recent case law. I emphasize that both parties are “tenements”, “estates”, or “owners”, even though one party is the landowner and the other party is the easement owner, because the easement is an interest in land.

[15] The grant of an easement ordinarily confers on the grantee only a right to the reasonable use of the easement in common with others.[^5] The “grantor retains all of its rights as owner of the estate in fee simple, except to the extent that those rights are inconsistent with the rights of the grantee granted by the deed.”[^6] This principle will resonate throughout my analysis because the balancing of these competing rights is the fulcrum upon which this dispute pivots.

[16] In Dukart v. Surrey (District)[^7] and in Canadian Pacific Ltd. v. Paul,[^8] the Supreme Court accepted in Canada the four requirements for the establishment of an easement as set out in Re Ellenborough Park.[^9] These characteristics are as follows: (i) there must be a dominant owner and a servient owner; (ii) the easement must accommodate the right of the dominant owner; (iii) the dominant and the servient owners must be different persons, and; (iv) a right granted must be capable of forming the subject-matter of the grant.[^10]

[17] The parties agree that the Reciprocal Easements, which I will shortly present and dissect, are, indeed, easements. They satisfy all the requirements set out by the Courts in Ellenborough Park and Dukart. There is no doubt that they are permanent. The dispute between the Plaintiffs and Market Village is the interpretation of the nature and extent of these easements.

B. Principles Applicable to the Interpretation of Easements

[18] For ease of following my analysis, I will preview now the principles applicable to the interpretation of easements. Later, after I review the factual background of this case, I will examine the case law and apply these principles to the factual context that will emerge from the findings that I will make from the trial evidence.

[19] The Ontario Court of Appeal has instructed that an easement is to be interpreted by its wording, considered in the factual circumstances that existed at the time that the easement was created.[^11]The contextual analysis required in interpreting an easement includes an assessment of the “known circumstances” and “those within the reasonable contemplation of the parties”[^12] at the time the easement was made.[^13] The Supreme Court of Canada explained as follows: “Just as the circumstances existing at the time of the grant may be looked at for the purpose of ascertaining the intention of the parties as to the dominant tenement and as to the location and termini of the way, the circumstances may also be looked at for the purpose of construing the conveyance as to the nature and extent of the rights conveyed.”[^14]

[20] Express grants of easements “should be construed according to general principles as to the interpretation of legal documents in the context of easements”.[^15] The contextual approach to contract interpretation was commented upon by the Supreme Court of Canada in Creston Moly Corp. v. Sattva Capital Corp.[^16] It requires a common-sense approach to determine objectively the mutual intentions of the parties as expressed through the words of the contract.

[21] In Oostdale Farm v. Oostvogels, the Nova Scotia Supreme Court set out concisely a list of factors that may form the analysis of surrounding circumstances pertinent to the interpretation of an easement: (1) the past use of the easement and its use at the time of its grant; (2) the purpose for which the easement was created; (3) physical characteristics of the easement relative to the servient land; (4) characteristics of the dominant owner; (5) the parties’ relationship; and, (6) the passage of time.[^17] I adopt this list of factors as material to an examination of the context in which easements are created, and thereby an interpretation of their nature and extent.

[22] Additionally, I will consider the conduct of parties after the grant of easements because doubt concerning the intention of the contracting parties can be clarified by assessment of how the parties acted under the easements.[^18]

C. The Parties’ Positions Regarding Breach of the Reciprocal Easements

[23] The Plaintiffs’ position is that the easement granted to Pacific Mall Inc. by Market Village Inc. will be substantially interfered with by the development proposed by the Market Village Defendants. This necessitates an assessment of whether the easement can be “substantially and practically exercised as conveniently” after the Market Village development proposal as before.[^19]

[24] Additionally, the Plaintiffs contended that the easement granted by YRCC 890 to Market Village will be overburdened by Market Village’s development proposal. This necessitates analysis of whether the development would cause the Market Village Easement to be “used excessively or significantly beyond the rights and nature conveyed in the grant of easement”.[^20]

[25] The Market Village Defendants submitted that the Reciprocal Easements grant them the right to “relocate on the Easement Lands the configuration of the driveways and parking spaces”. These Defendants contended that their proposed development project is expressly permitted by this right to relocate the easement uses on the Easement Lands.

[26] Alternatively, the Market Village Defendants submitted that if their proposed development exceeds the permissible extent of relocation permitted by the Reciprocal Easements, it does not, in any event, constitute a “substantial interference” and therefore is not actionable. Finally, the Market Village Defendants submitted that their proposed development will not overburden any easement.

[27] There were some pleaded positions that the parties narrowed in the course of the trial. Market Village committed to not constructing on Pacific Mall Land, narrowing the issue of nuisance and trespass to the collateral impact to the Pacific Mall Land of construction on the adjacent Market Village Land. Market Village pleaded that the Plaintiffs were disentitled to any relief by reason of delay but narrowed their reliance on alleged delay to its materiality to my analysis of the Plaintiffs’ request for permanent injunctive relief enjoining Market Village’s proposed development plan. These concessions narrowed the issues requiring determination.

II. ISSUES

[28] This action raised the following issues for determination:

1. What is the nature and extent of the Reciprocal Easements?

(a) Are the Reciprocal Easements limited to the commercial uses present in 1994?

(b) What is the effect of the prohibition against the construction of ‘obstacles’?

(c) What is the nature and extent of the Relocation Clause?

2. Does the Proposed Development Project contravene the Pacific Mall Easement?

(a) Do the changes proposed by Market Village exceed the Relocation Clause?

(b) Do the changes proposed by Market Village constitute a substantial interference of the Pacific Mall Easement?

3. Would the Market Village Development Project overburden the Market Village Easement?

4. Would the Market Village Development Project constitute a nuisance or trespass?

5. Have the Plaintiffs established the basis for the issuance of a declaratory judgment?

6. Have the Plaintiffs established the basis for permanent injunctive relief?

7. Were Kennedy Holdings necessary and proper parties?

[29] I will address these issues in order.

III. THE NATURE AND EXTENT OF THE RECIPROCAL EASEMENTS

[30] The Court of Appeal has explained that an assessment of whether an easement has been contravened must first begin with a determination of the nature and extent of the easement.[^21]

[31] Easements are not “made in a vacuum”. Rather, to determine the nature and extent of the Reciprocal Easements, I must assess “wording of the instrument creating the easement”,[^22] taking into consideration “the genesis of the transaction, the background, the context, the market in which the parties [were] operating”[^23] at the time that the easements were created.[^24] I will now do so.

A. The Composite Site

[32] In 1986, Kennedy Road was extended north of Steeles Avenue in the vicinity of 4300 Steeles Avenue East. This created a triangular block of land, bordered on the south by Steeles Avenue East, on the West by Kennedy Road and on the east by a CN Rail Line. To illustrate this, I have attached as Schedule “A” an extract from the registered plan of survey pertaining to this Composite Site.[^25] It shows that the CN Rail Line veers to the west as it proceeds in a northerly direction, and Kennedy Road curves to the east as it proceeds northerly. They intersect to form the northerly apex of the Composite Site.

[33] At the time of the Kennedy Road expansion, Weall and Cullen Nurseries Limited (“Cullen”) operated a garden centre on the land designated as Part 12 on Schedule “A” and had access for vehicular ingress and egress on both Steeles Avenue East and Kennedy Road. There was no other relevant commercial activity on the Composite Site until 1987.

B. The Market Village Land

[34] On April 14, 1987, Market Village Inc. was incorporated for the purpose of acquiring land to be used in the development of a shopping centre. From June 11, 1987 to May 5, 1989, Market Village Inc. purchased four parcels of land on the Composite Site, assembling approximately 24 acres.[^26] I will refer to this as the “Market Village Land”, which is known municipally as 4390 Steeles Avenue East, Markham.

[35] Schedule “A” shows that the Market Village Land fronts on Steeles Avenue East from Part 32 to the CN Rail Line, comprises all the land along the CN Rail Line, and includes the frontage along Kennedy Road from the northerly apex of the Composite Site to and including Part 14. The Market Village Land thereby had access to Steeles Avenue East on its southerly border, and access to Kennedy Road on its north-west border.

[36] After the Market Village Land assembly, Cullen retained the remainder of the land on the Composite Site. Again, by reference to Schedule “A”, I have grouped this remaining land into two parcels to preview what follows. The rectangular parcel depicted by the heavy black lines, comprised predominantly and observed prominently by Parts 7-13, inclusive, is the land that Cullen will later sell to Pacific Mall Inc. in 1993, and which I will currently refer to as the “Rectangular Parcel”. This leaves the parcel of land that is situated to the west of the Rectangular Parcel with expansive frontage on Kennedy Road, comprising Parts 1-6, inclusive. This convex-shaped strip of land was sold by Cullen in 1988 to Kennedy-Steeles Holdings Limited and Truscan Realty Limited.[^27] I will refer to it as the “Kennedy Corners Land”.

C. The Kennedy Corners Land

[37] The Kennedy Corners Land is known municipally as 7077 and 7079 Kennedy Road, Markham. After its acquisition in 1988, the Kennedy Corners Land was transferred to the Defendants Kennedy-Steeles Holdings Limited and Kennedy Corners Realty Ltd. (collectively “Kennedy Holdings”).[^28]

[38] The ownership by Kennedy Holdings of land adjacent to Cullen on the Composite Site recognized, from its inception, the necessity to share the Composite Site, and maximize its use by integrating the on-site traffic circulation and parking rights. By agreement between Cullen and Kennedy Holdings registered on September 25, 1989, Cullen agreed that the most westerly 24 feet of even width from the front to rear of the Cullen Land be designated as an access strip.[^29] The purpose of this shared access strip was to permit “access, ingress, egress and free passage from and between the [Cullen Land] and the [Kennedy Corners Land] at all times and from time to time for persons, vehicles and equipment over, across and along the Shared Access Strip”.[^30] I see this as the earliest indication of landowner recognition that shared access was vital to the integrated use of the Composite Site due to its unique shape and access to roadways on only two sides.

[39] The Kennedy Corners Land was developed into a commercial retail centre consisting of approximately 22 businesses, which I will refer to as “Kennedy Corners”. In the Site Plan Control Agreement that Kennedy Holdings entered into with the City of Markham (“Markham”) on December 7, 1990, Kennedy Holdings agreed “to obtain from the adjacent property to the east [Cullen Land], all easements required for the servicing of the site” and to “integrate the access and on-site traffic circulation with the property to the east and to forthwith register such mutual rights-of-way on title.”[^31] This Site Plan Agreement was amended on July 3, 2002, without modification of the necessity to ensure mutual rights of easement to integrate access and on-site circulation.[^32]

[40] The desirability, if not necessity to integrate access and parking for competing uses on the Composite Site would be accentuated by Market Village Inc.’s development of its land.

D. The Market Village Development: 1988-1992

[41] Commencing in 1988 and amended through 1992, Market Village Inc. entered into a Site Plan Control Agreement with Markham for the development of a shopping centre on the Market Village Land. This complex would become known as the “Market Village Centre” and consisted of 352,766 square feet (“ft²”) of gross floor area (“GFA”) to house some 133 retail businesses.[^33]

[42] As the operations of the Market Village Centre would be adjacent to Cullen’s existing garden nursery, Market Village Inc. and Cullen entered into an agreement on August 29, 1987 to mutually exchange easement rights of access and parking (the “1987 Easement Agreement”).[^34] This agreement recited that the parties sought “to ensure that each of the developments on the [Cullen Lands] and the [Market Village Lands] complement and accommodate each other”, while operating “their properties as a unified commercial site with respect to entrances, parking areas, and a link walkway”.[^35]

[43] The 1987 Easement Agreement was in furtherance of the commitment that Market Village Inc. had already made with Markham in its Site Plan Agreement to integrate on-site circulation and parking with any adjacent property on the Composite Site and “to forthwith register on title such mutual rights-of-way” as are necessary to ensure on-site traffic circulation and parking.[^36]

[44] In the 1987 Easement Agreement, each of Cullen and Market Village Inc. granted to the other “an easement, right of way and right in the nature of an easement” for two purposes: (i) “for the purpose of ingress and egress to and from their respective lands and neighboring public streets and highways”,[^37] and; (ii) “for the purpose of parking motor vehicles in or upon the parking areas indicated on the plan”.[^38] These would become the “1987 Easements”.

[45] The 1987 Easements encompassed practically all the parking areas and drive aisles on the Composite Site. The 1987 Easement Agreement showed that the Market Village Centre had surface parking on all four sides: to the east, along the CN Rail Line; to the south, adjacent to Steeles Avenue East; to the north, at the point of the apex of the triangular Composite Site and along Kennedy Road, and; finally, in the centre of the Composite Site, on the shared boundary with the Cullen Land. Cullen had parking to the south of its building along Steeles Avenue East, along its western boundary with the Kennedy Corners Land, and in the centre of the Composite Site on its boundary with the Market Village Land.

[46] The 1987 Easements stated that all “customers, invitees, licencees, employees and agents” of each party could park on any surface parking space on the Composite Site and could “during normal business hours … pass freely to and from each of their respective lands and buildings for the purposes of permitting them to carry on normal shopping activities and commercial and retail activities.”[^39]

[47] The 1987 Easement Agreement provided that the parties would share the costs associated with the maintenance of the road access points on which the Composite Site depended for ingress and egress.[^40] There were five such access points, featuring a signalled intersection from each of Steeles Avenue East and Kennedy Road. There was no dispute that access from the two major roads bordering the Composite Site was fundamental to the operation of the retail shopping and commercial uses on both the Market Village Land and the Cullen Land.

[48] The critical importance that Market Village Inc. placed on its easement rights within the Composite Site, and their importance for access and parking in the integrated operations of adjacent commercial centres, would become most clear in 1993 when Cullen entered into an agreement for the sale of the Rectangular Parcel to Pacific Mall Inc.

E. The Pacific Mall Land

[49] On August 9, 1993, Cullen agreed to sell the Rectangular Parcel to Torgan Properties Inc., which assigned the purchase to Pacific Mall Inc. The 1993 purchase agreement described the land as 4300 Steeles Avenue East, Markham, containing 13 acres, more or less, with a frontage on Steeles Avenue East of 120 metres; a length of 392.97 metres on its east boundary with the Market Village Land; a length of 380.82 metres on its west boundary with the Kennedy Corners Land, and; a width of 134.27 metres where it borders with the Market Village Land to the north. This land was taken in title on October 11, 1994 by Pacific Mall Inc. (the “Pacific Mall Land”).[^41]

[50] On that same day, Pacific Mall Inc. entered into a Site Plan Control Agreement with Markham for the development of the Pacific Mall, which would be a two-storey retail shopping complex designed to house approximately 450 stores.[^42] This Agreement contained the same provision as Markham had implemented with Market Village Inc., Kennedy Holdings, and Cullen requiring that Pacific Mall Inc. “integrate the site access and site circulation” with other commercial landowners on the Composite Site, and to “forthwith register such mutual right-of-way on title…”.[^43] I find that this continued the parties’ use of easements for site integration.

[51] The time between Pacific Mall Inc.’s agreement to purchase the Pacific Mall Land in August 1993 and the closing of its purchase in January 1995 was consumed with conflict with its future neighbour, Market Village Inc.

F. Steps Taken by Market Village Inc. to Protect its Easement Rights

[52] Market Village Inc. opposed the development of the Pacific Mall Land and sought to protect its 1987 Easement rights, which Market Village Inc. considered to be critical to the free flow of vehicular and pedestrian traffic and parking on the Composite Site. On September 13, 1994, Market Village Inc. brought an action against Cullen, Kennedy Holdings, and Pacific Mall Inc., seeking declarations that are strikingly similar, if not substantively identical, to the declarations sought by Pacific Mall Inc. against Market Village Inc. in this action, 26 years later.[^44]

[53] In the 1994 action, Market Village Inc. sought a declaration that the easements exchanged between it and Cullen were only “for uses of each of those two party’s lands that were within their reasonable contemplation at the time they entered into” the 1987 Easement Agreement. Market Village Inc. pleaded that the development of the Pacific Mall Lands into a much larger retail complex than the nursery centre operated by Cullen was “not a development or use” contemplated by the 1987 Easement Agreement and thereby ought not to be allowed. Market Village Inc. sought an injunction to prohibit Pacific Mall Inc. from making use of the mutual easements in a way that would result in intensification of commercial use of the Composite Site.

[54] In resisting Pacific Mall Inc.’s development of the Cullen garden centre into a much larger two-storey modern shopping complex, Market Village Inc. pleaded the identical allegations that Pacific Mall Inc. now pleads against Market Village Inc. in opposing the proposed re-development of the Market Village Centre. Market Village Inc. pleaded that: (a) any development by Pacific Mall must be limited to the manner and extent that was within the reasonable contemplation of the parties at the time of their grant; and (b) the further development would substantially interfere with Market Village’s easement rights and would overburden the internal drive aisles and parking, resulting in traffic gridlock, insufficient parking and inconvenience to customers. Market Village Inc. sought from Pacific Mall Inc. the very declarations and injunctive relief that it now claims are unfounded and incapable of being established.

[55] I pause to emphasize these positions taken by the parties in the 1994 Action because they so precisely mirror their positions in this action: but reversed. Each of Market Village Inc. and Pacific Mall Inc. previously urged upon the Court the precise interpretation of the nature and extent of the Reciprocal Easements that each now claims is flawed. The only difference is land development objective. In 1994, Pacific Mall Inc. sought to intensify the commercial use of the Composite Site to the resistance of Market Village Inc., and now Market Village seeks intensification to Pacific Mall’s objection.

[56] The positions taken by the parties were not, however, resolved by a court judgment. Rather, Market Village Inc. and Pacific Mall Inc. resolved the 1994 Action through a detailed agreement designed to achieve a comprehensive resolution not only of the parties’ then-current dispute but also to create a framework for the parties’ future shared commercial use of the Composite Site (the “1994 Agreement”). They agreed that this could not be done by refinement or modification of the 1987 Easement Agreement. Rather, Market Village Inc. and Pacific Mall Inc. agreed to discharge the 1987 Easements and replace them with reciprocal easements between them and easements that they would grant to Kennedy Holdings.

G. The Reciprocal Easements

[57] The 1994 Agreement provided for the exchange of reciprocal easements to allow for free passage, shared access, and shared parking for the entirety of the Composite Site except for those Parts where buildings were already situated or proposed to be constructed: the “Building Envelopes”. The dominance of the easements on the Composite Site is evident by reference to the drawing annexed as Schedule “B”, which superimposes the easements onto the registered Plan of Survey that is annexed as Schedule “A”. Schedule “B” illustrates the following:

▪ Parts 16, 22, and 27 together constitute the Market Village Inc. Building Envelope. In 1994, this consisted of the Market Village Centre, then a retail commercial shopping centre housing 133 businesses in 352,755 ft² of gross floor area.

▪ Part 12 is the Building Envelope for the Pacific Mall retail shopping centre described in Recital “F” of the 1994 Agreement as a “new condominium tenure retail mall” designed to house 450 retail outlets in 276,082 ft² of gross floor area.

▪ Parts 3 and 4 together constitute the Kennedy Holdings Building Envelope, housing Kennedy Corners.

[58] Save and except for these 6 Parts, all the remainder of the land in the Composite Site – all the other thirty Parts – would, according to the 1994 Agreement, be subject to easements, for access and, for certain Parts, for parking. This is seen by reference to Schedule “B”, where all drive aisle easements are those passages surrounding and serving the Building Envelopes, acting as arteries for internal traffic circulation, and all parking easements are illustrated by the diagonal lines.

[59] In addition, the parties mutually agreed not to oppose each of the projects that each party had under development at that time. In exchange for the easement rights being granted by Pacific Mall Inc. to Market Village Inc., Market Village Inc. agreed not to “object to or seek to obstruct or delay the obtaining of any governmental approvals for the Pacific Mall Development” and agreed not to “delay or prevent construction of the Pacific Mall Development”.[^45]

[60] Reciprocally, Pacific Mall Inc. agreed that in exchange for the easement granted to it by Market Village Inc., it would not “object to or seek to obstruct or delay the obtaining by Market Village of draft plan approval of condominium or any other governmental approvals” and would assist Market Village Inc. in obtaining the issuance of a liquor licence further to the application that had been filed by Market Village Inc.[^46] Pacific Mall Inc. agreed that it would use its best efforts during construction of the Pacific Mall Centre not to interfere with the operations of the Market Village Centre, “including customer and supplier access and parking”.[^47]

[61] In addition, Pacific Mall Inc. agreed to pay Market Village Inc. the amount of $4,000,000 for the transfer of rights set out therein,[^48] of which $1,505,000 was “in consideration of the transfer of easements and parking rights at Market Village”.[^49] The 1994 Agreement contractually provided for the exchange of four reciprocal easements, which were annexed as Schedules:

▪ Grant of easement from Market Village Inc. to Pacific Mall Inc.[^50]

▪ Grant of easement from Pacific Mall Inc. to Market Village Inc.[^51]

▪ Grant of easement from Market Village Inc. to Kennedy Holdings[^52]

▪ Grant of easement from Kennedy Holdings to Market Village Inc.[^53]

[62] These four easements were designed to allow for access onto and free passage over the Composite Site and use of certain parts of the Composite Site for parking, all for the purpose of customers, owners, invitees, and tenants carrying out commercial retail shopping operations. The four easements were further to the commitment that the parties had each made to Markham in their Site Plan Control Agreements.[^54] All were implemented upon the closing of the 1994 Agreement.

[63] The two reciprocal easements between Market Village Inc. and Kennedy Holdings are not in issue in this action.[^55] Similarly, there are a multitude of easement agreements between the parties affecting their access and common commercial operations at the Composite Site that the Plaintiffs did not place in issue in this action.[^56] The two easements at issue in this action form but a small sub-set of a much larger network of reciprocal, inter-related rights designed to allow for joint retail commercial operations at this uniquely configured site having only two fronting roadways to service three sizable retail shopping centres, and whose Building Envelopes occupy practically all available land not encumbered by easement rights.

[64] As this historical narrative reveals, the two easements that are at the core of this action originated in the 1987 easements granted between Cullen and Market Village Inc. and were made necessary by the commitments made by each of Market Village Inc. and Pacific Mall Inc. to Markham in their respective Site Plan Control Agreements. These two Reciprocal Easements were conceptualized and recognized by each party at the time of their acquisition of land in the Composite Site, memorialized by their contractual commitment to “integrate the site access and site circulation” with other commercial landowners on the Composite Site, and to “forthwith register such mutual right-of-way on title”. The parties’ recognition of the easements traces to the origins of their ownership of their respective landholdings.

[65] I will refer to each of these easements by the name of the dominant owner - the party to whom the easement right is granted - as the “Market Village Easement” and the “Pacific Mall Easement”.

(a) The Market Village Easement

[66] The Pacific Mall Land consists of 13 Parts, being Parts 7, 8, 9, 10, 11, 12, 13, 31, 32, 33, 34, 35, and 36 of Registered Plan 65R-17546. This can be seen on Schedule “A”, and also on Schedule “B”. In accordance with the 1994 Agreement, on January 13, 1995, Pacific Mall Inc. granted an easement to Market Village Inc. over all Parts of the Pacific Mall Land except Part 12 (the “Market Village Easement”).[^57]

[67] The Market Village Easement provided Market Village Inc. with rights over the Pacific Mall Land to which it applies, namely: Parts 7, 8, 9, 10, 11, 13, 31, 32, 33, 34, 35, and 36 of Registered Plan 65R-17546. I will refer to the Pacific Mall Land subject to the Market Village Easement as the “PM Servient Land” because Pacific Mall Inc.’s ownership of this land is subject to – or servient to – the Market Village Easement.

[68] There are two rights granted by Pacific Mall Inc. to Market Village Inc. in the Market Village Easement. The first is the right to have “access, ingress, egress and free passage from and between” the Pacific Mall Land and the Market Village Land. I will refer to this as the “Right of Access”. The Right of Passage is over all the PM Servient Land.

[69] Market Village Inc. holds a second right on some, but not all, of the PM Servient Land: the right to park motor vehicles “in or upon designated” parking areas. I will refer to this as the “Right to Park”. Market Village Inc.’s Right to Park on the PM Servient Land is “in or upon” all of the PM Servient Land except the Parts used as drive aisles.[^58]

[70] The Market Village Easement stated that the easement rights permit the “customers, invitees, licencees, employees and agents” of both Market Village Inc. and Pacific Mall Inc. to “pass freely to and from each of their respective lands and buildings for the purpose of permitting them to carry on normal shopping activities and commercial and retail activities”. In furtherance of this permission, Pacific Mall Inc. and Market Village Inc. respectively “agree not to erect any barriers or create any obstacles to the free passage”. The Market Village Easement granted to the servient owner, Pacific Mall Inc., the “right at any time and from time to time to relocate on the [PM Servient Land] the configuration of the driveways and parking spaces”.

[71] I will have more to say about these rights later. But first, I will explain the Pacific Mall Easement which is, substantively, the mirror image of the Market Village Easement.

(b) The Pacific Mall Easement

[72] The Market Village Land consists of 17 Parts, being Parts 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, and 30 of Registered Plan 56R-17546. This can be seen on Schedule “A”, and also on Schedule “B”. In accordance with the 1994 Agreement, on January 13, 1995, Market Village Inc. granted an easement to Pacific Mall Inc. over all the Market Village Land except Parts 16, 22, and 27 (the “Pacific Mall Easement”).[^59]

[73] The Pacific Mall Easement provides Pacific Mall Inc. with rights over the Market Village Land to which it applies: namely, Parts 14, 15, 17, 18, 19, 20, 21, 23 (save and except for that portion of Part 23 which is used from time to time as a storm water detention pond), 24, 25, 26, 28, 29, and 30 of Registered Plan 56R-17546. I will refer to the Market Village Land subject to the Pacific Mall Easement as the “MV Servient Land” because Market Village Inc.’s ownership of this land is subject to – or servient to – the Pacific Mall Easement.

[74] The substantive terms of the Pacific Mall Easement are identical to those contained in the Market Village Easement. The easements are symmetrical in their wording and reciprocal in their effect. As in the case of the Market Village Easement, the Right of Access in the Pacific Mall Easement is over all the MV Servient Land. The Right to Park on the MV Servient Land does not apply to the drive aisles[^60] and pertains only to those Parts used as surface parking areas: Parts 15, 17, 23, 24, 26, 28, 29, and 30.

H. The Parties’ Use of the Reciprocal Easements Since Their Grant in 1994

[75] As part of my interpretation of the Pacific Mall Easement and the Market Village Easement, I will analyse the parties’ use of these easements since their grant in 1994, because the interpretative process can be assisted by how the parties conducted themselves after the grant of easements.[^61]

(a) The Development of the Pacific Mall Centre into a Condominium

[76] The construction of the Pacific Mall Centre commenced in 1996 and, upon completion in October 1997, opened as a retail mall comprised of stores, restaurants and other amenities. Pacific Mall promoted the Centre as “the largest Asian-themed shopping centre in North America”.

[77] The Pacific Mall Centre has two-levels of underground parking on the Pacific Mall Land unencumbered by any easement rights. On July 8, 1996, Pacific Mall Inc. concluded an agreement with Market Village Inc. to allow Market Village Centre’s customers to park in the Pacific Mall Centre underground garage, and later would enter into a Cost Sharing Agreement.

[78] Before its opening, the Pacific Mall Land was converted to a condominium. On September 2, 1997, YRCC 890 was incorporated under the Condominium Act,[^62] and continued under the Condominium Act, 1998,[^63] by registration on title to the Pacific Mall Land of a Declaration.[^64] There are 1,193 condominium units in YRCC 890, consisting of 731 condominium units for commercial retail purposes, 5 units for signs, 38 units for storage and 419 indoor parking units. Pacific Mall Inc. continues to hold 57.9% of the common interest in the Pacific Mall Land.[^65]

[79] The YRCC 890 Declaration stated that the declarant, Pacific Mall Inc., intended that the Pacific Mall Land “and the interests appurtenant thereto together with the said building constructed thereon shall be governed by the Act.” The Declaration recited, as well, that “all persons having registered charges against the Land or interests appurtenant to the Land described in the description have consented to the registration of the Land under the Act.” Market Village consented to the registration of the Declaration.[^66]

[80] Market Village did not dispute that the 1994 Agreement and the Pacific Mall Easement are “interests appurtenant” to the Pacific Mall Land and thereby have, since the registration of the Declaration, been held for the benefit of YRCC No. 890 and/or its unit holders. Accordingly, Market Village Inc. did not dispute that YRCC No. 890 had capacity to assert rights under the Pacific Mall Easement even though this easement was granted to Pacific Mall Inc.[^67] Where the interests of Pacific Mall Inc. in the Pacific Mall Easements were transferred to YRCC 890 with Pacific Mall Inc. continuing to hold an interest that is synonymous with that held by YRCC 890, I will refer to Pacific Mall Inc. and YRCC 890 collectively as “Pacific Mall” or the “Plaintiffs”.

(b) The Market Village Centre

[81] The 1994 Agreement recited Market Village Inc.’s intention to convert its shopping centre on the Market Village Land to a condominium.[^68] Market Village Inc. initiated this on March 2, 1995, through an Application for First Registration[^69] followed by the filing of a Certificate of First Registration on June 9, 1995.[^70] On November 21, 1996, Market Village Inc. entered into a condominium agreement with Markham, setting out Markham’s approval of a plan of condominium for the Market Village Land.[^71] Throughout this process of converting the Market Village Land to a condominium, Market Village Inc. consistently affirmed that the Reciprocal Easements were title registrations affecting its ownership of the Market Village Land.

[82] By 2005, Market Village Inc. abandoned its conversion of the Market Village Land into a condominium. Instead, it set upon the re-development of the Market Village Centre.

(c) The Consideration of Joint Re-Development Projects

[83] In 2005, Market Village Inc. and its related corporate affiliate, the Remington Group Inc. (“Remington Inc.”), discussed with Pacific Mall a joint re-development of the Composite Site that involved the re-development of the Market Village Centre into a new shopping centre, a hotel, and conference facilities to be known as the “Remington Centre”.

[84] Remington Inc. does not own the Market Village Land. It does not allege an ownership interest in the Reciprocal Easements. Rather, Remington Inc. has common ownership and management with Market Village Inc. and was the corporate entity with which Market Village Inc. sought to re-develop the Market Village Land.

[85] Just as I refer to Pacific Mall Inc. and YRCC 890 collectively as “Pacific Mall”, where their interests are synonymous, so too will I refer to Market Village Inc. and Remington Inc. collectively as “Market Village” where steps are taken by their common corporate representatives, without recognition or formality of separate corporate status, in furtherance of the development of the Market Village Land into the Remington Centre.

[86] On June 15, 2005, Market Village and Pacific Mall jointly publicized a major expansion of their shopping centres, involving the addition of 400,000 ft² of retail space, a luxury hotel, and a multilevel parking structure, almost doubling their shopping centres. On September 21, 2007, Market Village filed a Site Plan Control Application with Markham for the expansion of the Market Village Centre, including its phased demolition, reconstruction, and expansion (the “MV Site Plan Application”).[^72]

[87] In May 2010, Pacific Mall filed with Markham its own site plan approval application,[^73] to proceed in tandem with the MV Site Plan Application to allow for the re-development of the Pacific Mall Centre. Market Village then filed updated drawings dated May 20, 2010 in support of its Site Plan Application, for a new building that would exceed the height and footprint of the Market Village Centre, more than doubling the Gross Floor Area from 352,755 ft² to 875,591 ft².

[88] The drawings filed by Pacific Mall and dated October 28, 2009 in support of its companion Site Plan Application, also showed more than doubling the size of the Pacific Mall Centre, from the as-built Gross Floor Area of 273,000 ft² to 648,140 ft², an increase of 375,140 ft². Unlike its neighbour’s concept that involved demolition of the Market Village Centre, the existing Pacific Mall Centre would be retained and incorporated into a much larger structure.

[89] In 2010, Market Village and Pacific Mall participated in a Transportation, Traffic and Transit Steering Committee that was formed involving representatives of Markham, other municipalities, and transit organizations.[^74] This Committee was struck to deal with the traffic circulation issues associated with such a major intensification of the Composite Site. Market Village and Pacific Mall worked collaboratively to address proposals to bring transit into the Composite Site, and to enhance pedestrian and traffic circulation.

[90] The ambitious joint effort by Pacific Mall and Market Village to collaboratively re-develop each of their shopping centres ended without success in the Autumn of 2011, not by reason of disagreement on development or divergence on common objectives. Rather, Pacific Mall could not achieve the consensus of the YRCC 890 condominium unit owners needed to move forward.

[91] YRCC 890 required 80% of the voting unit owners to support its re-development project.[^75] A Special Meeting of the YRCC 890 owners was held on June 28, 2011 to conduct voting on two issues necessary to authorize Pacific Mall to proceed with re-development of the Pacific Mall in coordination with Market Village Centre, with the objective of expanded shopping centres on the Composite Site.[^76] YRCC 890 failed to achieve the required 80% consensus. Pacific Mall’s initiative to re-develop the Pacific Mall Centre was terminated by lack of internal support.

[92] From this history I find that the Plaintiffs’ principals and directors actively supported significant and aggressive intensification of commercial use of the Composite Site, until they were unable to obtain authority of the condominium unit owners to do so.

I. Principles Applicable to Interpretation of the Reciprocal Easements

[93] I previewed earlier the principles applicable to the interpretation of an easement. Essentially, an easement will be interpreted by analysis of the wording of the instrument creating the easement in the context of the circumstances present at the time that the easement was made.[^77]

[94] An examination of an application of these principles is instructive. In 2003, in Boone v. Brindley,[^78] the Court of Appeal upheld a trial judge’s determination that parking was an ancillary right within the right of free passage granted by an easement.[^79] The Court of Appeal held that the trial judge had properly considered “the language of the conveyance creating the easement, the purpose and circumstances surrounding the creation of the right of way, the history of its development and the circumstances of its use.”[^80] The principles applied by the Court of Appeal in 2003 in Boone in interpreting an easement foreshadowed the principles applied by the Supreme Court to contract interpretation some 11 years later in Sattva. In Sattva, the Supreme Court instructed that the interpretative exercise must give “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”.[^81]

[95] The common-sense approach to contract interpretation set out in Sattva built upon the Supreme Court’s statement in Eli Lilly & Co. v. Novopharm Ltd.,[^82] that contractual intention of the parties is ascertained by reference to the words used in the contract read in light of the surrounding circumstances, with the objective of achieving a contract interpretation that is a fair and sensible commercial result. The interpretation of an easement should similarly aim to achieve an interpretation that is a fair and sensible commercial result.[^83]

[96] I analysed the parties’ use of the easement because determination of the parties’ intentions in the granting of the Reciprocal Easements can be assisted by analysis of how the parties acted under the easements. As the Court of Appeal stated in 2123201 Ontario Inc.: “The parties’ later conduct may show what meaning they gave to the Agreement after it was made, which in turn may show the parties’ intent when the Agreement was made.”[^84]

J. Analysis – Nature and Extent of the Reciprocal Easements

[97] I will analyse the nature and extent of the Reciprocal Easements by applying the interpretative principles to the facts that I have found on the evidence.

(a) Symmetrical, Reciprocal Access, and Parking Easement Rights

[98] As discussed earlier, the Reciprocal Easements are “mirror images” of each other: Pacific Mall Inc. and Market Village Inc. granted and received identical easement rights. There can be no dispute that the Reciprocal Easements are express. They are described in the 1994 Agreement, detailed in the Pacific Mall Easement and Market Village Easement and registered against title to the Pacific Mall Land and the Market Village Land. There is no dispute that the Reciprocal Easements are interests in the land that are not time limited.

[99] The Market Village Easement grants Market Village with easement rights over all 12 Parts of the PM Servient Lands, but does so not in individual easements registered against each Part, but rather in a single easement registered against title to the PM Servient Lands.[^85] I find that the Market Village Easement provides identical easement rights to Market Village over each Part of the PM Servient Land as if a separate easement were registered individually against each Part.

[100] I make a similar finding in relation to the Pacific Mall Easement. The Pacific Mall Easement grants to Pacific Mall easement rights over all 14 Parts of the MV Servient Lands, but does so not in individual easements registered against each Part but rather in a single easement registered against title to the MV Servient Lands.[^86] I find that the Pacific Mall Easement provides identical easement rights to Pacific Mall over each Part of the MV Servient Land as if a separate easement were registered individually against each Part.

[101] The Reciprocal Easements each contain two symmetrical rights:

1. The Right of Access: Each of the parties granted to the other the right for each of their owners “and their respective successors and assigns, agents, employees, lessees, licensees, guests and customers” to have “access, ingress, egress and free passage from and between” each of their servient lands, “at all times and from time to time for persons, vehicles and equipment over, across and along the Easement Lands”.[^87]

2. The Right to Park: Each of the parties granted to the other the right for each of their owners “and their respective successors and assigns, agents, employees, lessees, licensees, guests and customers” to enter the servient land for the “purpose of parking motor vehicles in or upon the parking areas”.

[102] I find that the Right of Access applies in favour of Market Village over all 12 Parts of the PM Servient Land.[^88] I find equally that the Right of Access applies in favour of Pacific Mall over all 14 Parts of the MV Servient Land.[^89]

[103] I find that the Right to Park applies in favour of Market Village over 7 of the 12 Parts of the PM Servient Land that are specified for parking: specifically, Parts 7, 10, 13, 33, 34, 35, and 36.[^90] I find equally that the Right to Park applies in favour of Pacific Mall over 8 of the 14 Parts of the MV Servient Land that are specified for parking: specifically, Parts 15, 17, 23 (save and except for that portion of Part 23 which is used from time to time as a storm water detention pond), 24, 26, 28, 29, and 30.[^91]

[104] The result of these determinations is that Market Village has a right to “access, ingress, egress and free passage” over all the PM Servient Land, and the right to park on the specific Parts designated for parking, and Pacific Mall has a matching right to “access, ingress, egress and free passage” over all the MV Servient Land, and the right to park on the specific Parts designated for parking.

[105] The Reciprocal Easements contain an identical paragraph, which I will refer to as the “Easement Purposes Clause”, that specifies that the purpose of the Right of Access and the Right to Park is to allow the “customers, invitees, licencees, employees and agents” of each party to “pass freely to and from each of their respective lands and buildings for the purposes of permitting them to carry on normal shopping activities and commercial and retail activities”.

[106] The findings that I have made to this point regarding the Reciprocal Easements are supported by a literal reading of the Reciprocal Easements. The Right of Access and the Right to Park are clear, and the common commercial purpose for the use of these rights, the fostering of free passage and access throughout the Composite Site, was framed by the Easement Purposes Clause. Further, my findings are supported by the context in which the Right of Access and the Right to Park were exchanged by each party in 1994. They were in furtherance of the commitments made by Market Village Inc. and Pacific Mall Inc. to Markham “to integrate on-site circulation and parking” with any adjacent property on the Composite Site and “to forthwith register on title such mutual rights-of-way” as are necessary to ensure on-site traffic circulation and parking.[^92] The 1994 Agreement, and the Reciprocal Easements provided by it, were part of the broader network of easements between the parties affecting the Composite Site which have as their purpose, both historically and at present, the integration of access and parking between the shopping centres at the Composite Site.

[107] Further, the parties’ subsequent conduct leaves no doubt that they each agreed and understood that each had the Right of Access on all of the MV Servient Land and all of the PM Servient Land, and the Right to Park on all servient lands except those used as drive aisles. I find that each of their complex re-development initiatives, formulated intensely from 2007 onwards, evidenced a clear agreement and understanding that they each had the Right of Access and Right to Park on servient lands.

[108] The parties’ dispute focused not on the existence of the Right of Access and the Right to Park granted in the Reciprocal Easements, but rather whether they could be unilaterally changed and, if so, to the extent sought by Market Village to develop the Remington Centre.

(b) Are the Reciprocal Easements Limited to the Commercial Uses Present at the Time of their Grant in 1994?

[109] Pacific Mall submitted that the extent of permissible use of the Reciprocal Easements must be limited to the commercial uses present when the easements were granted in 1994. Pacific Mall’s position relied principally on the 1994 Agreement and on the evidence of Mr. Eli Swirsky, an officer of both Plaintiff corporations.

(i) Does the Wording of the 1994 Agreement Support Limiting the Extent of Commercial Use of the Reciprocal Easements to that Present in 1994?

[110] Pacific Mall submitted that the Composite Site was always intended to be fully integrated in terms of vehicular and pedestrian access, free passage and parking. This is the principle committed to by Pacific Mall’s predecessor in title, Cullen, in the 1987 Easement Agreements that encumbered the Triangular Parcel until its purchase by Pacific Mall Inc.; this is the principle that Pacific Mall committed to in 1994 and onwards in the Pacific Mall Site Plan Agreement; this is the principle that Pacific Mall Inc. pleaded in its defence of the 1994 Action.

[111] Pacific Mall contended, however, that the principles of access, free passage and parking must be limited to the extent of those uses present in 1994. Pacific Mall maintained that the recitals to the 1994 Agreement recorded the parties’ intentions in relation to their lands: Pacific Mall Inc. sought to carry through with the shopping mall set out in the Pacific Mall Site Plan Agreement, and[^93] Market Village Inc. sought to convert its retail shopping centre into a condominium.[^94]

[112] The parties each committed, in the 1994 Agreement, not to obstruct or interfere with each party’s pursuit of its objectives. Pacific Mall Inc. agreed that it would not “object to or seek to obstruct or delay the obtaining by Market Village of draft plan approval of condominium or any other governmental approvals (excluding major matters such as Official Plan Amendments and rezonings) including but not limited to land titles first application, building permits, site plan approvals and/or liquor licences with respect to the Market Village Lands”[^95] (the “Pacific Mall Co-operation Clause”).

[113] Pacific Mall submitted that the Pacific Mall Co-operation Clause framed the permissible use that Market Village could make of its land, with the result that Market Village’s use of the Reciprocal Easements must be limited to its then-existing retail purposes, without expansion.

[114] Market Village contended that, even on its literal wording, the Pacific Mall Co-operation Clause could not restrict, for all time, Market Village’s intensification of its land use as the clause specifically exempted those municipal approvals, such as Official Plan Amendments and rezoning, that would characterize intensified land use. Market Village pointed out that it too provided a co-operation clause in the 1994 Agreement, in identical wording to that provided by Pacific Mall, wherein Market Village would not obstruct or “delay or prevent construction of the Pacific Mall Development”[^96] (the “Market Village Co-operation Clause”). The parties wrote in the 1994 Agreement that their mutual Co-operation Clauses were “Non-objection Undertakings”.[^97]

[115] Pacific Mall tendered the evidence of Mr. Eli Swirsky to provide context to my interpretation of the Reciprocal Easements.

(ii) Mr. Eli Swirsky

[116] Mr. Eli Swirsky is the president of Pacific Mall Inc. and the second vice-president of YRCC 890. Mr. Swirsky began work as a land developer in 1975, and has, since 1984, conducted this work as an officer of Torgan Inc. Most of the factual evidence tendered by Mr. Swirsky was not controversial and not affected by cross-examination. It mostly reflected those facts agreed upon by the parties in their Agreed Statement of Facts and admitted through pleadings.

[117] Where Mr. Swirsky volunteered his opinion regarding the breach of an easement, I placed little weight on his evidence because a non-expert witness cannot give opinion evidence on a legal issue.[^98] I found Mr. Swirsky’s factual evidence to be credible, reliable in that it was internally consistent, and plausible in that it was “in harmony with the preponderance of the probabilities”.[^99] I found him to be a sophisticated land developer, who testified in a frank and forthright manner

[118] Mr. Swirsky was directly involved in all aspects of the purchase of the Pacific Mall Lands in 1993. Mr. Swirsky testified, and I accept, that his company needed easements with Market Village Inc. in order to have free passage, access and parking on the Composite Site. To this end, Mr. Swirsky negotiated the 1994 Agreement with Mr. Rudolph Bratty, the president of Market Village Inc., whom Mr. Swirsky regarded as an experienced real estate lawyer and sophisticated and accomplished land developer.

[119] Mr. Swirsky testified that Mr. Bratty never told him that Market Village Inc. had any objective to expand or to intensify the Market Village Centre in 1994, but rather was focussed on converting the Market Village Centre into a condominium. No officer or director of Market Village Inc. testified at trial. The only lay witness who testified on behalf of Market Village was Mr. Randy Peddigrew, the senior vice-president of land development with Remington Inc.

(iii) Mr. Randy Peddigrew

[120] Mr. Randy Peddigrew has degrees in Economics and City Planning. In 1997, he began work with the Bratty Group in land development, worked elsewhere from 2005 to 2008, and has been with Remington Inc. since 2008. He explained that as Remington Inc. is associated with Market Village Inc., his work at times melded between the two companies. However, as Mr. Peddigrew was not with either company in 1994, he had no evidence on the formation of the 1994 Agreement or the Reciprocal Easements.

[121] I will have more to say later about Mr. Peddigrew’s testimony, which focused mainly on his role in the proposed Market Village re-development project in the period from 2008 to present. I pause to observe, however, that much like Mr. Swirsky, most of Mr. Peddigrew’s evidence was factual, largely uncontroversial, and mostly unaffected by cross-examination. I found Mr. Peddigrew to be a credible and forthright witness who provided reliable factual testimony concerning Market Village’s development objectives on the Composite Site.

(iv) Analysis - Application of Legal Principles

[122] Pacific Mall’s submission that the extent of use of the Reciprocal Easements is limited to the commercial uses present at the time of their grant in 1994 necessitated analysis of the wording of the Reciprocal Easements and the 1994 Agreement that produced them, the context present at the time that they were granted and the parties’ subsequent conduct.

[123] The Reciprocal Easements do not contain any express restriction on intensification of the use of the easements. Specifically, they have no wording that would limit the extent of their use to that present in 1994. They state simply that the “authorized customers, invitees, licencees, employees and agents” of each party may, “during normal business hours”, “pass freely to and from each of their respective lands and buildings for the purpose of permitting them to carry on normal shopping activities and commercial and retail activities”. I do not find in this wording a limitation on the Right of Access and the Right to Park to the commercial uses present in 1994.

[124] I do not accept Pacific Mall’s submission that the Market Village Co-operation Clause and the Pacific Mall Co-operation Clause evidenced the parties’ intention to restrict the use of the Reciprocal Easements to Pacific Mall Inc.’s development of the Pacific Mall Centre and Market Village Inc.’s conversion of the Market Village Centre to a condominium. I find that these clauses are permissive of then-current development objectives but not restrictive of future initiatives. The parties characterized these clauses in the 1994 Agreement as “Non-Objection Undertakings”: not restrictive covenants. I conclude that if these commercially interested parties had the intention of limiting the use of the Reciprocal Easements in the manner contended by Pacific Mall, they would have used more express and deliberate wording.

[125] Mr. Swirsky’s evidence does not support the limitation on use of the Reciprocal Easements sought by Pacific Mall. Mr. Swirsky testified of Mr. Bratty’s intended use of Market Village in 1994 but did not advert to any representation by Mr. Bratty that Market Village would never be expanded, or that the use of the Reciprocal Easements would never be intensified. I accept Mr. Swirsky’s evidence that the issue of future intensification was simply not discussed, but do not find this sufficient to support the restriction sought by the Plaintiffs on future development.

[126] Further, I return to my earlier observation that Pacific Mall’s current submission, that the parties intended in 1994 to restrict use of the Composite Site to those present in 1994, is the precise opposite of Pacific Mall Inc.’s position in its defence of the 1994 Action. At that time – the time of the grant of the Reciprocal Easements – Pacific Mall Inc. pleaded that the 1987 Easements were not limited by commercial uses present in 1987 when granted by Pacific Mall Inc.’s predecessor in title but rather were subject to change in use and intensification. This is more than a change in position. It is a change in submission regarding the parties’ intentions at the time that the Reciprocal Easements were granted which, to be credible, ought not to be capable of mutation depending on the party’s development objective. The same can be said of Market Village Inc.

[127] I find that the context in which the Reciprocal Easements were granted established that they were not intended to be limited to the uses or the intensity present at the time of their grant. The Reciprocal Easements were put in place by sophisticated land developers who, I find, shared the objective of developing each of their properties to their maximum potential. They shared a common goal of realization in investment gain in their land, and each recognized that this included the potential intensification of use of the Composite Site and the intensification of the use of the Reciprocal Easements. I am not prepared to find that the concept of freezing the land use in time – suspending its development to 1994 levels – was intended or even overtly addressed by Mr. Swirsky with Mr. Bratty in 1994.

[128] The Reciprocal Easements released and replaced those granted in the 1987 Easement Agreement, which also did not limit the rights of access, free passage, and parking to those present in 1987. Rather, the Reciprocal Easements implemented similar rights to those set out in the 1987 Easement Agreement but in the context of the intensified land use that had developed from 1987 to 1994. I find that this showed that the parties contemplated reasonable intensification of the use of their land over time through further development of their shopping centres on the Composite Site.

[129] I accept Market Village’s submission that the very wording of the Reciprocal Easements exempted, or ‘carved out’, the right of the parties to object to future steps taken by either of them in relation to Official Amendments and rezoning. These steps are ancillary to changes in land use, such as re-development, showing a recognition that the parties did not foreclose but rather anticipated the possibility of future development and intensification of use on the Composite Site.

[130] Further, the parties’ subsequent conduct supports a finding that they did not intend to limit the use of the Reciprocal Easements to the commercial uses present in 1994. The collaborative initiative by Pacific Mall and Market Village to jointly redevelop their uses on the Composite Site, from 2005 to 2010 showed a mutual understanding that reasonable intensification of commercial use was consistent with the Reciprocal Easements. The parties’ complementary Site Plan Control Applications showed a common intention to significantly expand both their shopping centres, with resulting intensification in the use of the drive aisles and parking. The parties agreed that these common development initiatives terminated not by disagreement over the reasonable intensification of use – which each party promoted – but by lack of internal support in the plaintiff entities.

[131] Other Courts have declined to ‘freeze’ the use of an easement to the circumstances present at the time of its grant when the wording of the easement and the context in which it was granted did not support such a finding. In Laurie, the Supreme Court of Canada considered whether an easement implemented to allow free passage over the servient land was limited to the agricultural purposes that were present at the time that it was granted in 1925, or whether it was equally applicable for residential use some three decades later upon subdivision of the farm into building lots. The Supreme Court found that there was nothing in the easement that restricted the use of the easement, finding that it was not within the contemplation of the parties, at the time of the grant, that “the farm would always remain a farm”.[^100] I find, similarly, that the parties did not intend that the use and intensity of their properties would always remain as they were in 1994.

(v) Conclusion – The Extent of Use of the Reciprocal Easements is Not Limited to that Present in 1994

[132] Having considered the wording of the 1994 Agreement and the Reciprocal Easements, the context in which the Agreement and the Easements were implemented in 1994, and the subsequent conduct of the parties, I conclude that the extent of use of the Reciprocal Easements is based on the nature of the commercial retail uses present at the time of their grant in 1994 but is not limited to the use and intensity that existed in 1994, provided that the degree of intensification does not substantially interfere with, or overburden the Reciprocal Easements

(c) The Nature and Extent of the Prohibition against the Creation of Obstacles

[133] The Reciprocal Easements provide that Market Village and Pacific Mall “covenant and agree not to erect any barriers or create any obstacles to the free passage of such authorized customers, invitees, licencees, employees and agents”.

[134] Pacific Mall submitted that the term “obstacle” should be given its literal interpretation as set out in the Shorter Oxford English Dictionary: “[to] interrupt or render difficult the passage or progress of; to impede, hinder, or retard (a person or thing in its motion).”[^101] I accept this interpretation of the term ‘obstacle’ for the purpose of the Reciprocal Easements because it is consistent with the free passage that is critical to the Right of Access. Also, this interpretation is consistent with the context present at the time this clause was agreed upon, wherein the parties were intent on mutual integrated use of the Composite Site without restricting access and free passage of customers, owners, and invitees.

[135] There was no disagreement that the prohibition against the creation of barriers and obstacles prevented both Market Village and Pacific Mall from constructing any walls, curbs, or fences that would bar or impede anyone from driving, cycling or walking, within the Composite Site, to any of the shopping centres. I find as such because the erection of any barriers that prevent customer access to the shopping centres is contrary to the Right of Access, inconsistent with the Easement Purposes Clause, contrary to the purpose of the Right to Park, and is thereby inconsistent with both the letter and the spirit of the Reciprocal Easements.

[136] I will later return to, and apply, this interpretation of the prohibition against the erection of barriers and obstacles when assessing the Plaintiffs’ position that Market Village’s development proposal would bar, prevent, or impede the free passage of customers at the Composite Site.

(d) The Nature and Extent of the Relocation Clause

[137] I explained earlier that the Reciprocal Easements contain a right on the part of the servient owner to relocate the configuration of the driveways and parking spaces, as follows: “Notwithstanding anything herein contained, the Transferor shall have the right at any time and from time to time to relocate on the Easement Lands the configuration of the driveways and parking spaces” (the “Relocation Clause”).

[138] The Relocation Clause was not contained in the earlier, 1987 Easement Agreement. Rather, the 1987 Easement Agreement specifically required that the parties mutually consent to any change in the internal drive aisles and prohibited any reduction in surface parking spaces on servient land.

[139] I accept Mr. Swirsky’s evidence that he was aware of the terms of the 1987 Easement Agreement at the time that the parties entered the Reciprocal Easements in 1994. I have found that the Reciprocal Easements were implemented at a time in which the sophisticated land developers directing Market Village Inc. and Pacific Mall Inc. were considering changes in their commercial centres that would have the impact of intensification of use of the Composite Site. Mr. Swirsky’s unchallenged evidence was that Pacific Mall Inc. set upon expansion of the commercial use previously conducted by Cullen and each party understood that the other intended to maximize the use and value of their respective land developments. In this context, I accept that the parties understood and intended that each would have the ability to relocate access aisles and parking on its servient land to best serve the common commercial objectives on the Composite Site.

[140] The parties’ disagreement focused not on the proposition that the Relocation Clause was implemented and designed to grant the servient owner the right to relocate the configuration of the access and parking use of the servient land, which I accept, but rather on the parameters by which this could be done. Specifically, was the relocation limited to surface parking “on” the servient land, or could it be relocation to subsurface or deck parking; and, was the relocation limited to “Easement Lands” or could the relocation of the drive aisles or parking be to land not subject to an easement?

(i) Limitation to Relocation “on” the Servient Land

[141] Market Village submitted that the Relocation Clause permitted the servient owner to relocate parking from the surface of the servient land to beneath the servient land, such as underground parking, and above the servient land, such as deck parking. Pacific Mall disagreed, contending that the Relocation Clause permitted the servient owner to relocate the configuration of parking only “on” the servient land. I agree, for the following reasons.

[142] First, there was no evidence that the context or factual matrix in which the parties’ provision of a unilateral right to relocate the configuration of parking “on” the servient land referred to anything other than surface parking. The parking on the Composite Site at the time that the easement was granted was only surface parking, such that any reference that the parties made to parking in 1994 could contextually have referred only to surface parking. This is validated by Mr. Swirsky’s evidence, which I accept, that surface parking was the only type of parking considered by the parties when addressing the Reciprocal Easements in 1994.

[143] Second, the Relocation Clause set out the servient owner’s unilateral right to “relocate … the configuration” of the parking spaces. This unilateral entitlement did not, in my determination, allow for change of the nature or character of the parking spaces from surface parking spaces to underground or aboveground spaces. This right pertained strictly to the unilateral re-configuration of the existing, surface parking spaces: not their conversion to another type of parking.

[144] Third, the parties’ subsequent conduct established their intention that any change in the existing surface parking on servient land from surface to underground or aboveground required the mutual consent of the parties. This is evident from the extensive discussions between these parties in the six-year period from June 15, 2005 to Autumn of 2011 regarding re-development of their shopping centres. These discussions reveal the parties’ understanding that construction on the servient land currently housing surface parking, and its substitution for subsurface or aboveground parking, was not a mere re-configuration, capable of being implemented unilaterally, but rather required the concurrence sought through the protracted negotiations.

(ii) Restriction on Relocation to “Easement Land”

[145] Market Village submitted that the Relocation Clause permitted the servient owner to relocate the current parking from servient land to parking on Market Village Land. Specifically, that the right to “relocate on the Easement Lands the configuration of the … parking spaces” enabled Market Village to eliminate parking spaces currently on MV Servient Land and relocate them to Market Village Land on which Pacific Mall has no easement rights.

[146] Pacific Mall contended that the Relocation Clause granted the servient owner the right to relocate parking only on, and within, the “Easement Land”. I accept this submission, for reasons that I will now explain.

[147] Pacific Mall’s Right to Park on MV Servient Land derives from its easement, which is registered against title to the Market Village Land. The interest in land arising from this easement right is valid regardless of the configuration of the parking on the MV Servient Land. If Market Village were to reconfigure the parking unilaterally, changing it from squared to rectangular, from parallel to perpendicular, Pacific Mall’s easement right would not be impacted.

[148] However, if Market Village were to relocate parking spaces off the MV Servient Land without replacing them with matching parking spaces on MV Servient Land, Pacific Mall’s easement Right to Park would be adversely impacted and, depending on the extent of the relocation, could be lost. I do not accept that the Relocation Clause was intended to allow for the termination of a registered interest in land in the guise of a unilateral relocation of the “configuration” of a parking space. I find that the Relocation Clause cannot validate relocation of a parking space when it effectively results in the eradication of an easement right.

[149] Last, the clear wording of the Relocation Clause is that the right to relocate the configuration of parking was specific to the “Easement Land”. I find that it would be inconsistent with the literal wording of this term of the Reciprocal Easements to extend the right to relocate to land not subject to the easements.

[150] For the above reasons, I find that the Relocation Clause allows for unilateral relocation of the configuration of parking and drive aisles only on servient land subject to the Reciprocal Easements.

K. Conclusions – The Nature and Extent of the Reciprocal Easements

[151] The Market Village Easement and the Pacific Mall Easement are express, permanent grants over the servient lands to which they apply. These Reciprocal Easements apply equally to all Parts of the servient lands as if a separate easement agreement were registered against each such Part.

[152] For all the above reasons, I conclude that the Market Village Easement granted Market Village the Right of Access, with free passage over the PM Servient Land, and the Right to Park on those Parts of the PM Servient Land that are not used as drive aisles. I similarly conclude that the Pacific Mall Easement granted Pacific Mall symmetrical rights: the Right of Access with free passage over the MV Servient Land, and the Right to Park on those Parts of the MV Servient Land that are not used as drive aisles.

[153] I conclude further that the nature of these uses was established at the time of their grant in 1994: to allow for free passage and parking to support the normal shopping activities and commercial and retail activities on the Composite Site, consistent with the Easement Purposes Clause. I find that the uses and their intensity are not limited to those present in 1994 but are subject to reasonable intensification as each of the landowners advance their land development objectives, so long as the intensification does not result in substantial interference with the use of the easement or overburdening. I will shortly address these parameters more fully.

[154] I find that the Reciprocal Easements prohibit the erection of any barriers or the creation of any obstacles that deny the dominant owner the reasonable exercise of the Right of Access or the Right to Park. I also find that the Right of Access and the Right to Park are subject to the servient owner’s right to relocate the configuration of either the drive aisles or the parking on the surface of servient land.

IV. DOES THE MARKET VILLAGE DEVELOPMENT PROJECT CONTRAVENE THE PACIFIC MALL EASEMENT?

[155] Having determined the nature and extent of the Reciprocal Easements, I will now assess whether the development project planned by the Market Village Defendants contravenes the Reciprocal Easements. To do so, I will first analyse the project advanced by the Market Village Defendants, which I will refer to as the “MV Development Project”.

A. The MV Development Project

(a) The Emerging Conflict Between the Parties

[156] Market Village’s determination to re-develop the Market Village Centre was undeterred by Pacific Mall’s decision in 2011 to remain static. Market Village was intent on continuing with the MV Site Plan Application that it had initiated over four years earlier on September 21, 2007.

[157] Unable to obtain the approval of the YRCC 890 owners to redevelop, Pacific Mall’s support of Market Village’s project changed to opposition. I accept Mr. Peddigrew’s evidence, uncontradicted by Mr. Swirsky, that until Pacific Mall failed to obtain the approval of YRCC 890’s owners to the re-development of the Pacific Mall Centre, the principals of Pacific Mall had supported the MV Development Project, including in media releases and in municipal applications.

[158] Support changed to opposition. From September 2012 to February 2014, Pacific Mall opposed Market Village’s Application to the Markham Committee of Adjustments.[^102] On February 19, 2014, Pacific Mall notified Markham that it withdrew its Site Plan Application, and that Pacific Mall did not support Market Village’s Site Plan Application.”[^103] On March 10, 2014, YRCC 890 stated to Markham that the MV Site Plan Application “does not represent good planning”.

[159] Mr. Swirsky testified that Pacific Mall took numerous steps to obtain production of Market Village’s proposed re-development plans to assess any potential impact to Pacific Mall’s rights under the Reciprocal Easements. These included Applications under the Freedom of Information and Protection of Privacy Act with Markham,[^104] Metrolinx and GO Transit.[^105] On December 14, 2015, Pacific Mall made a public consultation submission on the MV Site Plan Application urging coordinated planning with other users of the Composite Site.

[160] Market Village submitted that Pacific Mall’s opposition to its Site Plan Application constituted a breach of the Pacific Mall Co-operation Clause.[^106] I do not accept this submission. Rather, I find that the Pacific Mall’s non-objection agreement was in relation to Market Village’s objective of converting the Market Village Centre to a condominium, and not to all land development initiatives, going forward. I reach this conclusion from my interpretation of the literal wording of the Pacific Mall Co-operation Clause, from the factual context in which it was granted, as already explained, and in acceptance of Mr. Swirsky’s evidence on this point.

[161] Mr. Swirsky stated that Pacific Mall’s objective was to ensure that Market Village did not proceed with its re-development project until first the parties had an agreement on the use of the Reciprocal Easements. Pacific Mall accomplished this through the MV Site Plan Condition.

(b) The MV Site Plan Condition

[162] On January 21, 2016, supported by Kennedy Holdings, Pacific Mall submitted to Markham that its approval of the MV Site Plan Application must be made conditional on Market Village entering “into arrangements satisfactory to the owners of the Pacific Mall and Kennedy Corners, both of which have registered cross-easements over driveways and parking areas that will have to be modified to accommodate the proposed development” (the “MV Site Plan Condition”).[^107]

[163] Mr. Peddigrew testified, and I accept his evidence that Market Village was willing to accept the MV Site Plan Condition provided the parties were working towards a mutually acceptable solution on the use of the Reciprocal Easements, and if Market Village was able to seek a removal of the condition should a resolution between the parties not be available. On January 25, 2016, on the recommendation of the Markham Commissioner of Development Services to implement the MV Site Plan Condition,”[^108] Markham affirmed its endorsement, in principle, of the MV Site Plan Application subject to, amongst other conditions, Market Village submitting site plans that comply with all necessary easements, “including reference to cross-easements for access circulation”.[^109]

[164] At the time of trial, Market Village had not achieved final approval of the MV Site Plan Application. Rather, the MV Site Plan Application remained in progress and unissued. Markham’s conditional approval of the MV Site Plan Application is subject to the MV Site Plan Condition.

(c) The Evolution of the MV Development Project

[165] The MV Site Plan Application was supported by drawings, which evolved over time as Market Village continuously refined the MV Development Project. Market Village tendered into evidence five sets of architectural drawings that it filed with Markham in the period from May 21, 2010 to November 5, 2018. I will refer to these as the “MV Site Plan Drawings”.

[166] An analysis of the MV Site Plan Drawings, set out in the following chart, shows the incremental increase to the building size proposed by Market Village to construct the Remington Centre, and it shows the proposed increase to the number of parking spaces.

Market Village Proposed Expansion Chart

	Building Area[^110]	Gross Floor Area	Parking Spaces Surface	Parking Spaces Indoor	Parking Spaces Total
Existing MV Centre	300,690 ft²	352,755 ft²	1,352	0	1,352
May 21, 2010 Drawings	477,885 ft²	875,591 ft²	266	2,847	3,113
October 2, 2015 Drawings	491,717 ft²	1,157,712 ft²	610	2,775	3,385
April 19, 2017 Drawings	494,645 ft²	1,186,807 ft²	444	2,584	3,028
November 5, 2018 Drawings	495,915 ft²	1,118,129 ft²	404	2,094	2,498

[167] The version of the drawings most pertinent to my analysis of the impact of the MV Development Project on the Reciprocal Easements is the November 5, 2018 Drawings.[^111] Based on the specifications contained in these Drawings, the MV Development Project would have the following physical impact on the Pacific Mall Easement:

(a) Building on MV Servient Land: Market Village proposed to increase the Building Envelope of the Market Village Centre by 195,225 ft² from 300,690 ft² to 495,915 ft². Since the existing Building Envelope of the Market Village Centre occupied practically all the Market Village Land except the MV Servient Land, the 195,225 ft² expansion necessary to construct the Remington Centre would be constructed almost entirely on MV Servient Land that would otherwise service the Pacific Mall Easement;

(b) Reduction in Surface Parking Spaces: The number of surface parking spaces that would be available on the MV Servient Land, for use by Market Village customers as well as by Pacific Mall customers would be reduced by 948, from 1,352 surface parking spaces to 404 surface parking spaces. This is a direct result of the MV Development Project expanding the size of the Building Envelope, necessitating its absorption of MV Servient Land that is currently used for surface parking.

[168] The MV Proposed Expansion Chart, above, demonstrated these two outcomes numerically. The drawing annexed as Schedule “C” illustrated these outcomes visually, by superimposing the dimensions of the MV Development Project onto the Survey of the Market Village Land.[^112] The Market Village Centre is shown in white (Parts 16, 22, and 27). The building footprint proposed by Market Village for the new Remington Centre is depicted by the thick orange line. The thick blue line represents the proposed Building Envelope, which includes the curbs required for the proposed new building, and thereby the proposed new outer edge of the Remington Centre.

[169] The diagonal lines within the proposed Building Envelope represent surface parking that would be eliminated by the construction of the Remington Centre on MV Servient Land. Additionally, the drive aisles on MV Servient Land that fall within this proposed Building Envelope would be part of the building or its curbs and would thereby have to be relocated. The MV Development Project thereby proposed relocation of certain of the drive aisles serving the Composite Site and, to accommodate anticipated intensification of vehicular traffic, expansion and relocation of certain of the entrance points onto Kennedy Road and Steeles Avenue East.

B. The Impact of the MV Development Project on the Reciprocal Easements

[170] The parties’ dispute was not whether the MV Development Project would have direct and indirect physical impacts on the Reciprocal Easements, as clearly it would. There was no dispute that there would be loss of surface parking spaces, re-location of drive aisles, reconfiguration of movement at access points, and overall intensification of vehicular and pedestrian traffic. The parties’ dispute was about the extent of the impact of the MV Development Project on the Reciprocal Easements.

[171] Based on the evidence of Mr. Swirsky, the evidence of Mr. Peddigrew and, as I will explain shortly, the expert opinion evidence of Mr. Pernicky and Mr. Poulos, I find that the direct and indirect impacts of the MV Development Project on the Reciprocal Easements to be as follows:

(a) Loss of Surface Parking Spaces: The most obvious direct impact is that the proposed construction by Market Village on MV Servient Land will result in a loss of currently available surface parking spaces on MV Servient Land. With reference to Schedules “B” and “C”, the intrusion onto the surface parking areas is seen at Part 17 (the “Central Parking Area”); Part 15 (the “North Parking Area”); Parts 23 and 24 (the “South Parking Area”); Parts 26, 28, 29, and 30 (the “East Parking Area”).

(b) Relocation or Reconfiguration of Internal Drive Aisles: With the expanded Building Envelope and the resultant intrusion into existing parking areas, there is also an impact on the drive aisles. With reference to Schedules “B” and “C”, the drive aisle that allowed for traffic circulation to the Central Parking Area, on Parts 15 and 17 (the “Central Drive Aisle”), the drive aisle at the south of the Market Village Centre, being Part 19 (the “South Drive Aisle”), and the drive aisle to the east of the Market Village Centre, being Parts 25, 26, and 28 (the “East Drive Aisle”) would be affected.

(c) Intensification of Use: The Remington Centre is designed to have three times the gross floor area of the existing Market Village Centre: specifically, an expansion from 352,755 ft² to 1,118,129 ft². This expansion will result in a greater number of retail stores, restaurants, a supermarket and an open public area designed to host civic and cultural events. This will result in a greater number of store owners, customers, and event participants attending at the Composite Site, with resultant intensification of the vehicular and pedestrian traffic and the demand for parking spaces.

(d) Modification of Municipal Access Points: There are four Municipal Access Points from the two roadways that provide access into the Composite Site.[^113] These consist of a signal-controlled entrance from Kennedy Road (the “Principal Kennedy Access Point”);[^114] a signal-controlled entrance from Steeles Avenue East (the “Principal Steeles Access Point”);[^115] a secondary access point north of the Principal Kennedy Access Point that allows for a right turn into and out of the North Parking Area (the “Kennedy North Access Point”);[^116] and a Municipal Access Point into the Kennedy Corners Land from Kennedy Road, which then allows for access into the Pacific Mall Land (the “Kennedy South Access Point”).[^117] Based on the expert evidence of traffic engineer Mr. Nick Poulos, which I will address more fully later, I accept that the intensification resulting from the MV Development Project would necessitate modification of the Municipal Access Points to allow for improved access from the municipal roadways.

[172] The dispute between Market Village and Pacific Mall was whether these direct and indirect impacts breached the Reciprocal Easements. Market Village submitted that they did not, on two grounds: (i) these impacts result from relocation that Market Village is entitled to do unilaterally on the basis of the Relocation Clause; (ii) these impacts do not rise to the level of ‘substantial interference’ with Pacific Mall’s use of the Reciprocal Easements, as would be necessary to establish a breach, including that they will not overburden the easements. Pacific Mall disagreed.

[173] Having determined the nature and extent of the Reciprocal Easements and having defined the direct and indirect impact of the MV Development Project on the Reciprocal Easements, I will now analyse whether these impacts would breach the Reciprocal Easements.

C. Analysis – Do the Changes Proposed by the MV Development Project Exceed the Relocation Clause?

[174] As I have explained, Market Village’s proposed construction of an expanded Building Envelope for the Remington Centre on MV Servient Land would eliminate 948 of the 1,352 surface parking spaces, leaving 404 surface parking spaces. This loss of surface parking would be both in the parking lots most proximate to the entrance of Pacific Mall, the Central Parking Area and the North Parking Area, and in the East Parking Area, which was behind the Market Village Centre and thereby less convenient for Pacific Mall customers. The MV Development Project would also entail relocation of the drive aisles within these parking areas to accommodate the flow of traffic around the expanded Building Envelope.

[175] Market Village acknowledged this loss of surface parking but submitted that it was entitled by the Relocation Clause unilaterally to relocate the surface parking spaces from the MV Servient Land to subsurface or aboveground parking spaces that it would build as part of the MV Development Project, predominantly on a parking deck within, or underground parking beneath the Remington Centre. Market Village contended, further, that any modification to the drive aisles necessary to accommodate this development was also permitted by the Relocation Clause.

[176] Pacific Mall disagreed, contending that the Relocation Clause permitted relocation only for the purpose of reconfiguration, which did not include: (a) construction on the MV Servient Land; (b) eradication of parking spaces; and, (c) the relocation of parking spaces onto Market Village Land on which Pacific Mall has no easement rights. Similarly, Pacific Mall stated that the Relocation Clause could not justify unilateral relocation of the drive aisles. I will address these issues in order.

(a) Is the Elimination of Surface Parking resulting from the MV Development Project’s Expansion onto MV Servient Land Permitted by the Relocation Clause?

[177] Mr. Peddigrew explained the emergence of the MV Development Project, from its origin as a collaborative re-development to Market Village’s unilateral effort to proceed in the absence of Pacific Mall’s concurrence and then active opposition. Mr. Peddigrew acknowledged that Pacific Mall had rights to access and park on MV Servient Lands that would be built upon by the MV Development Project and thereby lost. Mr. Peddigrew testified that these steps were justifiable by the Relocation Clause because they constituted “relocation for purposes of reconfiguration”.

[178] There was no disagreement, and I accept that the MV Development Project would result in a loss of 948 surface parking spaces on MV Servient Land. This would result from expansion of the Market Village Building Envelope beyond its present footprint resulting in encroachment on, and absorption of, portions of the MV Servient Land. Additionally, I accept Mr. Swirsky’s evidence that 35 of the parking spaces remaining on the PM Servient Land abutting the proposed Remington Centre and straddling the boundary line would be lost as they would be intersected by the curbing for the Remington Centre (the “Straddling Parking Spaces”).

[179] The MV Development Project provides for the construction of two ramps to underground parking underneath the proposed Remington Centre that would be built on MV Servient Land in the Central Parking Area and the South Parking Area. A portion of the East Parking Area would be subsumed into the parking deck for the Remington Centre. Last, the architectural features proposed for the South Parking Area would have the effect of reducing available parking.

[180] Mr. Peddigrew testified that the lost parking spaces on the MV Servient Land would be replaced by indoor parking spaces that Market Village proposed to construct under the Remington Centre and deck parking on the easterly side of the Remington Centre. The evidence showed, and I accept, that the MV Development Project would add 2,094 such underground and deck parking spaces, all built inside the Remington Centre, owned and controlled by Market Village. Neither party tendered any evidence that established the number of these proposed parking spaces that would be on ‘reconfigured’ or repurposed MV Servient Land formerly accessible to Pacific Mall through its easement but now planned to be within the Remington Centre, and how many would be on Market Village Land within the Remington Centre on which Pacific Mall has no easement rights.

[181] Specifically, there was no evidence that the eliminated 948 surface parking spaces on the MV Servient Land would be replaced with 948 parking spaces on other Parts of MV Servient Land. The number of indoor parking spaces planned to be on absorbed MV Servient Land was incapable of being quantified on the evidence adduced at trial as the absorbed MV Servient Land was projected to serve multiple purposes besides parking, including ramps, access laneways, and pedestrian corridors.[^118] I find that if Market Village had evidence that the 948 parking spaces eliminated on MV Servient Land were replaced, clearly not in whole but even in some small part, with indoor parking spaces on other parts of MV Servient Land, they would have led it.

[182] I, therefore conclude that none of this indoor parking proposed by the MV Development Project was proven to be situated on portions of the MV Servient Land absorbed by the Remington Centre. Even if certain of the indoor parking spaces occupied physical space that is on MV Servient Land, they would not be as freely available to Pacific Mall, unlike the surface parking spaces that they are said to replace and would not be of a quantity sufficient to factor into my analysis.

[183] I do not accept Market Village’s position, expressed by Mr. Peddigrew, that the Relocation Clause permitted Market Village to not only relocate parking “on the MV Servient Land”, but also to relocate parking from MV Servient Land to Market Village Land over which Pacific Mall has no easement rights. I will explain why.

[184] First, the Relocation Clause provided the right to relocate parking spaces and driveways, not the right to eliminate them. The MV Development Project does not propose to relocate the configuration of the surface parking spaces but rather to eliminate 948 of them.

[185] Second, the reconfiguration of a parking space does not, in my determination, include changing the nature and character of the parking space from a surface parking space proximate to Pacific Mall to an underground or deck parking space within the Remington Centre. This is not in the nature of a reconfiguration but rather, at best, it is a proposed substitution.

[186] Third, as I have already determined, the Relocation Clause required that the relocation of parking spaces must be on the “Easement Lands”. Market Village proposed to relocate surface parking spaces that are currently on MV Servient Land, in regard to which Pacific Mall has rights as dominant owner, to underground or deck parking spaces located on Market Village Land, over which Pacific Mall has no easement rights. This is, in my assessment, fatal to Market Village’s position because Market Village’s proposed change in the configuration of the parking spaces cannot be validated on the authority of the Relocation Clause if it would have the effect of depriving Pacific Mall of its easement.

[187] The proposed relocation of parking from MV Servient Land to lands belonging to Market Village and unencumbered by easements cannot be saved by Mr. Peddigrew’s evidence that Market Village is willing to provide Pacific Mall with an easement over the proposed indoor underground parking and deck parking. Market Village had not done so by the time of trial. Further, Mr. Peddigrew conceded that he did not have the corporate authority to bind Market Village Inc. to grant such an easement, as he holds no position with this servient owner.

[188] Fourth, as I have already determined, the Relocation Clause required that the relocation of parking spaces must be “on” the “Easement Lands”. The Relocation Clause does not provide for relocation of parking spaces under or in buildings above the MV Servient Land, but rather the unilateral right is limited to relocating the reconfiguration of the parking spaces on the easement land. The MV Development Project goes well beyond this limited unilateral right and involves construction on the servient land, the transformation of surface parking to parking inside the Remington Centre, and the conversion of this parking from a space subject to an easement to land on which the dominant owner has no easement rights.

[189] Fifth, the Relocation Clause must be applied in a manner that is consistent with the objectives set out by the 1994 Agreement and the Reciprocal Easements. These include enhancement of integration on the Composite Site and maximizing unimpeded access to each of the commercial and retail stores from the parking areas. I find that the relocation of the configuration of parking spaces on easement lands is not consistent with these objectives when it proposes to relocate a surface parking space proximate to Pacific Mall to a parking space inside the Remington Centre.

[190] For these reasons, I conclude that the elimination of surface parking resulting from the MV Development Project’s expansion onto MV Servient Land is not permitted by the Relocation Clause.

(b) Are the Modifications to the Drive Aisles, including at the Main Access Points, Permitted by the Relocation Clause?

[191] Having determined that the relocation of parking proposed by the MV Development Project cannot be validated on the basis of the Relocation Clause, it is unnecessary to determine whether the relocation of the configuration of the driveways and the expansion and enhancement of the Main Access Points is permitted by the Relocation Clause. If the change to the surface parking spaces on the MV Servient Land cannot be supported by the Relocation Clause, then the changes in paths for vehicular traffic designed to accommodate those parking changes becomes redundant. However, I will briefly address this issue, for completeness of analysis.

[192] As I explained earlier, the MV Development Project involved relocation of the configuration of the Central Drive Aisle, the South Drive Aisle, and the East Drive Aisle. The modifications to the four Municipal Access Points proposed by the MV Development Project involved increasing the number of turn lanes to allow for greater efficiency in vehicular traffic, including reduced waiting times for vehicular movement on entering from, and exiting onto the two municipal roadways: Kennedy Road and Steeles Avenue East.

[193] Each of these modifications constituted, in my assessment, a reconfiguration within the MV Servient Land in that each modification is entirely on the MV Servient Land. The reconfigurations thereby do not impact Pacific Mall’s easement rights as it would continue to have the same entitlements to free passage and access on the re-configured drive aisles and Municipal Access Points as it has enjoyed since 1994. Further, each such modification had as its objective the enhancement of vehicular traffic, the efficiency of customer access to the commercial and retail outlets and transit drop-off within the Composite Site and the enhancement of free passage.

[194] Subject to the issue of overburdening, had I determined that the parking changes proposed by the MV Development Project were permitted by the Relocation Clause, I would have determined that the modifications to the driveways and the four Municipal Access Points were permitted by the Relocation Clause.

(c) Conclusion

[195] For the above reasons, I conclude that the construction proposed by Market Village on MV Servient Land, with resultant elimination of surface parking spaces to which Pacific Mall has easement rights as dominant owner, cannot be validated and thereby unilaterally advanced on the basis of the Relocation Clause. The Relocation Clause is not sufficiently broad to permit the construction on servient land, the elimination of surface parking on servient land, and the conversion of surface parking spaces subject to the dominant owner’s easement rights to indoor parking spaces belonging only to the servient owner with no registered interest on the part of the servient owner.

D. Analysis – Do the Impacts Resulting from the MV Development Project Contravene the Pacific Mall Easement?

[196] I have found that the MV Development Project directly and indirectly impacts the MV Servient Land and thereby encroaches on the Pacific Mall Easement. The issue for determination now is whether the direct and indirect impacts on the Pacific Mall Easement prevents Pacific Mall from reasonable use of the MV Servient Land. This analysis turns on whether the MV Development Project will substantially interfere with the reasonable purpose for which the Reciprocal Easements were granted.

(a) Legal Principles Applicable to Determination of Contravention of an Easement – “Substantial Interference”

[197] In Weidelich v. De Koning, the Court of Appeal explained that an encroachment or interference with an easement is actionable only if it constitutes a substantial interference with a reasonable use of the servient land for the granted purpose.[^119] The facts in Weidelich are instructive. The easement involved was in the form of a laneway that traversed the rear land owned by each of the six property owners and allowed for free passage. Each property owner had granted to the others - and each property owner received from the others - a reciprocal right to pass over the laneway for access. The dispute arose when a servient owner’s home renovation involved construction on the servient land. A dominant owner sought a declaration that the servient owner not obstruct the laneway with new construction and remove all structures built on the servient land.

[198] The Court of Appeal upheld the application judge’s dismissal of the dominant owner’s application on the basis that he had not established a real or substantial interference with the use of the laneway for vehicular access.[^120] Even with the construction on the servient land, the laneway was still passable by a motor vehicle, and thereby continued to allow for the function for which it was established. I am guided by the principles set out by the Court of Appeal in assessing whether the impacts on the Pacific Mall Easement caused by the MV Development Project would constitute “substantial interference”, as I will now explain.

(i) The Burden

[199] The burden is on the party asserting the easement right – the dominant owner – to establish substantial interference with the exercise of the easement.[^121] This reflects the very nature of the dominant owner’s rights, in that the dominant owner does not own the servient land, but rather is entitled through the easement only to “reasonable use of that property for its granted purpose”.[^122]

(ii) What Constitutes Substantial Interference?

[200] The determination of whether there has been substantial interference with an easement is a question of fact, determined by assessment of the terms of the easement grant and the nature of the encroachment.[^123] In Raimondi v. Ontario Heritage Trust, the Court of Appeal stated that evidence of historical use is relevant, “as it provides a baseline to assist in determining what constitutes substantial interference”.[^124]

[201] An interference will be substantial when the dominant owner is no longer able to reasonably use the easement for its granted purpose.[^125] In Weidelich, the Court of Appeal adopted the following inquiry:

In short, the test, … is one of convenience and not necessity or reasonable necessity. Provided that what the grantee is insisting on is not unreasonable, the question is: can the right of way be substantially and practically exercised as conveniently as before?[^126]

[202] To illustrate the application of this test, the Court of Appeal referred to other instances in which Courts have assessed whether encroachments into easements constituted substantial interference. In Clifford v. Hoare,[^127] the Court dismissed a dominant owner’s claim even though the servient owner’s new construction encroached some two feet into a 40-foot right-of-way on the basis that the dominant owner’s right to use the easement had not been substantially interfered with. The dominant owner had not been granted a 40-foot roadway, but rather the “right to a reasonable use of the road”.[^128] Since the access provided by the easement had not been substantially interfered with, the construction was consistent with the servient owner’s rights.

[203] The Court of Appeal noted the reasoning of Middleton J. in Devaney v. McNab (1921),[^129] who found that the construction of a fire escape of some three feet four inches into a 20-foot right-of-way substantially interfered with the easement. Middleton J. observed that where a servient owner builds on servient land, it is “almost impossible to say that there is not a real and substantial interference with the right conveyed”.[^130] However, the fact of construction on servient land was not dispositive of Middleton J.’s analysis but rather was one factor in his assessment of whether the servient owner had substantially interfered with the dominant owner’s easement right.[^131]

[204] The Court of Appeal explained that the reasoning in Celsteel Ltd. v. Alton House Holdings Ltd.,[^132] provided “an excellent example of the proper application of the substantial interference test”.[^133] Here, the servient owner built a car wash on a portion of land that was subject to an easement. The dominant owner submitted that his easement rights had been infringed because he could now only access his garage by driving in and then reversing out whereas prior to the construction he routinely accessed his garage by reversing in and then driving out. The Court held that either means of access of the garage was reasonable, but that this was not determinative of the substantial interference test. Rather, the infringement on the encroachment was actionable if insistence by the dominant owner on use of the easement in a certain manner was reasonable.[^134]

[205] The Court of Appeal concluded, in Weidelich, that the encroachment by a permanent structure onto servient land did not infringe the easement because the dominant owner was unable to establish actual, substantial interference with the granted right. This finding followed the Ontario Court of Appeal’s finding in Fallowfield v. Bourgault, that “a party is not precluded from placing some chattels or erecting a fence or gate on an easement, so long as what is done does not substantially interfere with the other party’s use of the easement”.[^135]

[206] Market Village relied on the principles set out in Weidelich in submitting that construction on servient land, and a resultant loss in surface parking, is not determinative of the assessment of interference with an easement if the purpose for which the easement was intended can still be accomplished. Market Village relied on a factually specific Canadian decision in 3177719 Manitoba Ltd. v. Banquet Barons Inc.[^136] There, a servient owner sought to redevelop its property in a way that would alter the right to park provided for by the dominant owner’s easement. The Court found that while the proposed development would reduce the amount of surface parking available to the dominant owner, the reduction in parking spaces would not constitute a substantial interference with the dominant owner’s use of the easement because there was “so much space left”, that its needs would still be met by the smaller number of spaces.[^137]

[207] My determination of whether the MV Development Project will substantially interfere with the Reciprocal Easements thereby turns on the nature and extent to which the MV Development Project interferes with Pacific Mall’s use of the two rights contained in the Reciprocal Easements: the Right of Access and the Right to Park. In addition to the evidence of Mr. Swirsky and Mr. Peddigrew, Pacific Mall and Market Village called four expert witnesses to provide opinion evidence on these issues.

(b) The Expert Opinion Evidence Regarding Substantial Interference

[208] Pacific Mall tendered two witnesses to provide expert evidence: Mr. Richard Pernicky, a transportation planner, and Mr. Douglas Annand, a land economist and consultant in shopping mall research. Market Village called two expert witnesses: Mr. Nick Poulos, a professional engineer, and Mr. James Tate, a land economist and retail market analyst. There were challenges on the admissibility of all expert witnesses except Mr. Pernicky, necessitating multiple voir dires.

[209] I assessed the admissibility of opinion evidence by all expert witnesses tendered in accordance with the two-stage test set out by the Ontario Court of Appeal in R. v. Abbey,[^138] recently applied in Imeson v. Maryvale (Maryvale Adolescent and Family Services),[^139] which drew on the test set out by the Supreme Court of Canada in R v. Mohan[^140] and White Burgess Langille Inman v. Abbott and Haliburton Co.[^141] As I will explain, I admitted each witness to testify, certain with limitations, and subject to my assessment of the weight to be attributed to the opinion evidence.[^142]

(i) Mr. Richard Pernicky

[210] Mr. Richard Pernicky has 26 years of experience in analysis of traffic operations and impact, after graduating from studies in transportation, engineering technology. Mr. Pernicky was admitted, on consent, to provide expert opinion evidence as a transportation planner, in the analysis of parking and traffic operations as they relate to the Composite Site. Mr. Pernicky stated two opinions: first, that the MV Development Project was not supportable from the perspective of parking demand and traffic operation analysis; second, that the MV Development Project would impose restrictions by modification to the parking layout and site driveways that were not covered by the Reciprocal Easements.

[211] I will explain first, and summarily, why I do not accept Mr. Pernicky’s opinion regarding whether the proposed MV Development Project contravenes the Reciprocal Easements. He was not qualified to provide any such opinion. He admitted that the interpretation of the Reciprocal Easements was not within his area of expertise and conceded that he had no knowledge of the nature and extent of the parties’ rights under the Reciprocal Easements. I disregarded his opinion regarding whether traffic and parking changes resulting from the MV Development Project would contravene the Reciprocal Easements not because this was the ultimate issue before the Court, but rather because Mr. Pernicky’s opinion on this issue was unnecessary and unreliable.[^143]

[212] I have, however, considered Mr. Pernicky’s opinion evidence regarding the effect that the MV Development Project would have on traffic levels and parking counts within the Composite Site. This evidence was probative to my assessment of whether the MV Development Project will affect traffic and parking to an extent that will constitute a substantial interference of the Pacific Mall Easement and, as I will address later, over-burdening of the Market Village Easement. As I will explain, I accepted Mr. Pernicky’s evidence of historic traffic and parking utilization at the Composite Site, but not his projections on the future impact of the MV Development Project.

a. Pernicky Opinion Evidence on Traffic Volume

[213] Mr. Pernicky was retained by Pacific Mall in April 2014 to prepare a traffic and parking impact report for the Composite Site.[^144] He did this by collecting traffic data on two periods: June 5, 2014 to June 8, 2014 (the “June 2014 Traffic Study”) and; November 1, 2018 to November 4, 2018 (the “November 2018 Traffic Study”). The June 2014 Traffic study assessed the traffic volumes and patterns affecting all three centres at the Composite Site. The November 2018 Traffic Study assessed only the operations of Pacific Mall and Kennedy Holdings as Market Village had by then demolished the Market Village Centre.

[214] As a standard for his assessment of critical traffic movements, Mr. Pernicky applied the Region of York’s “Transportation Mobility Plan Guidelines for Development Applications” which provides that a roadway will reach a critical level when used at 85% capacity (“Critical Capacity”). He analysed the extent of delay at intersections, for vehicle movement from the Composite Site onto an adjacent roadway, which he referred to as “Level of Service”. The criteria for Level of Service was that less than 10 seconds of delay was optimal, and more than 80 seconds of delay in a traffic movement was a failure.

[215] Mr. Pernicky’s June 2014 Traffic Study assessed the capacity of the roadways to handle traffic at the then-five Main Access Points on four consecutive days: Thursday to Sunday. He concluded that the traffic levels exceeded Critical Capacity in 2 of 30 driving movements on Thursday; none on Friday; 3 of 30 movements on Saturday, and; 5 of 30 driving movements on Sunday in peak periods. At peak periods, there were failures in Level of Service in three left-hand turn lanes at peak periods.

[216] Mr. Pernicky conducted the same analysis in his November 2018 Traffic Study. He did not observe any Level of Service failures and noted only one Critical Capacity level in the 120 categories of traffic movement analysed. This is not surprising, as the Composite Site was at that time being used by customers, owners, and invitees of only two of the three shopping centres.

[217] To project future traffic use of the Composite Site, Mr. Pernicky performed a straight-line extrapolation of the traffic volumes found by the November 2018 Traffic Study. He did so to predict future traffic volumes by projecting November 2018 traffic volumes, taking into consideration the estimated number of additional shopping trips that would be generated by the additional retail and commercial space provided by the MV Development Project. This analysis concluded that the Composite Site would experience 15 traffic movements at or above Critical Capacity Level of the 30 assessed. In Mr. Pernicky’s opinion, this would constitute a serious negative impact to traffic flow at the Composite Site and would result in long and unpredictable queue lengths and an inability to manoeuvre within the drive aisles.

b. Pernicky Opinion Evidence on Parking Demand

[218] Mr. Pernicky’s analysis on parking utilization was again based on data assembled in two surveys conducted four years apart. Mr. Pernicky oversaw parking utilization surveys of the Composite Site on four days from July to September 2014 (the “2014 Parking Survey”) on November 3-4, 2018 (the “2018 Parking Survey”). These parking surveys involved “counting cars” in the parking areas at the Composite Site.

[219] Like with his traffic study, Mr. Pernicky applied an 85% critical factor: specifically, he categorized the parking usage at a point in time as at a “Critical Level” if the parking demand occupied 85% or more of the available parking spaces. After 2014, the Composite Site had 3,194 parking spaces available to customers of Pacific Mall, Market Village, and Kennedy Corners, comprised of 2,433 surface parking spaces[^145] and 761 underground parking spaces below the Pacific Mall. The MV Development Project would increase the available parking to 4,340 spaces, consisting of 2,498 parking spaces provided by the MV Development Project,[^146] 761 underground parking spaces below the Pacific Mall, and 1,081 surface parking spaces on PM Servient Land.

[220] Mr. Pernicky found that in the four days studied in 2014, parking demand did not escalate to Critical Levels on the two weekdays studied and was at Critical Levels on 6 of the 16 time periods studied each weekend day. The 2018 Parking Survey produced no parking demands at Critical Levels, which is understandable as the Market Village Centre was by then demolished.

[221] To assess the future effect of the MV Development Project on the parking demands, Mr. Pernicky presumed that parking demand was related to the retail and commercial spaces occupying the gross leasing area (“GLA”) of the shopping centres. Using the 2018 Parking Survey, he calculated the number of spaces used by customers of Pacific Mall and Kennedy Corners during two days in November 2018 for each 100 m² of GLA (the “Utilization Factor”). Mr. Pernicky then applied the Utilization Factor to the actual GLA of the Pacific Mall Centre and the Kennedy Corners and added the GLA of the Remington Centre to project the number of parking spaces that would be required to service the intensified use of the Composite Site.

[222] Mr. Pernicky concluded that the future parking supply of the Composite Site (4,340 spaces) would be insufficient to support the parking demand generated by the existing Pacific Mall Centre and Kennedy Corners once increased by the MV Development Project. He stated that parking demand would be at Critical Levels at peak times: Saturday and Sunday afternoons. He concluded that the internal circulation at the Composite Site would be significantly negatively impacted by the MV Development Project.

(ii) Mr. Nick Poulos

[223] Market Village tendered Mr. Nick Poulos as an expert professional engineer. There was no dispute of Mr. Poulos’ qualifications. He obtained a degree in civil engineering in 1974 and has over four decades of experience in traffic planning and traffic engineering.

[224] Market Village retained Mr. Poulos some seven years before this action was initiated, to assist Market Village with its Site Plan Application. Mr. Poulos authored three reports, dated April 2010, November 10, 2014, and November 2, 2015, to study and assess the traffic, transportation, and transit impact of the MV Development Project (the “Historic Poulos Studies”).[^147] These Studies were filed with municipal authorities as part of the MV Site Plan Application, and supported Market Village’s submission that the parking and traffic needs of the MV Development Project could be conducted on the Composite Site without interference to Pacific Mall.

[225] In addition to the Historic Poulos Studies, Mr. Poulos delivered a litigation report, dated February 6, 2019, stating his opinion that Mr. Pernicky had employed a fundamentally flawed analysis that resulted in an overestimated demand for both vehicle trip making and parking demand at the Composite Site after completion of the MV Development Project.

[226] Pacific Mall objected to the admissibility of Mr. Poulos’ evidence as either a litigation expert or a participant expert, contending that Mr. Poulos was not independent because he had long-acted for Market Village in its development application, on the basis that he did not author portions of the Historic Poulos Studies, and because the litigation report delivered by Mr. Poulos did not comply with Rule 53.03(2.1)(6) in that it failed to list all documents relied upon. I did not accept Pacific Mall’s objection for the purpose of threshold admissibility, and now do not accept it for the purpose of acceptance of elements of Mr. Poulos’ opinion evidence. I will explain why

a. Ruling on Admissibility of Poulos Opinion Evidence

[227] I found that Mr. Poulos was a participant expert in accordance with the principles stated by the Court of Appeal in Westerhof v. Gee Estate.[^148] He was a witness with “special skill, knowledge, training, or experience” who provided advice to Market Village throughout the seven years prior to the initiation of the litigation. His opinions of the traffic and parking implications to the Composite Site from the MV Development Project were derived from his involvement as a traffic engineer during this time.

[228] I accept Mr. Poulos’ evidence that he authored the Historic Poulos Studies and his litigation report, including the formulation of opinions and conclusions. I do not accept that Mr. Poulos’ use of data assembly and calculations by his staff renders inadmissible his opinion evidence, as was contended by Pacific Mall. This was not like the situation addressed by Harper J. in Children’s Aid Society of London and Middlesex v. C.D.B., relied upon by the Plaintiffs, where the report was contributed to by unidentified collaborators, without attribution in the final report. [^149] I found that Mr. Poulos wrote the Historic Poulos Studies and his litigation report, and while he had staff assistance and input from a colleague, the analysis and conclusions are his.

[229] Second, I do not accept that the Historic Poulos Studies were litigation reports, as contended by Pacific Mall. They are studies that were filed with municipal authorities before the initiation of this litigation for the purpose of Market Village’s development application. Further, these studies were produced in Market Village’s documentary productions at least a year before trial and were discoverable. Last, Pacific Mall’s expert, Mr. Pernicky, referred to the Historic Poulos Studies in his evidence. I thereby find that even though the Historic Poulos Studies were not listed in Mr. Poulos’ litigation report, they were throughout known to Pacific Mall.

[230] Rule 53.08 mandates that leave “shall” be granted “on such terms as are just” for non-compliance with Rule 53.03, “unless to do so will cause prejudice to the opposite party or will cause undue delay in the conduct of the trial”. Courts have granted leave for admission of expert opinion evidence in the context of non-compliance with the Rules where there was no prejudice to the party opposite, to ensure a fair adjudication of the issues upon their merits.[^150] Mr. Poulos’ evidence was relevant and necessary, and I was not satisfied that the “prejudice to justice involved in receiving the evidence exceeds the prejudice to justice involved in excluding it”.[^151] I granted leave, under Rule 53.08 for the admissibility of Mr. Poulos’ opinion evidence even though his litigation report did not list the Historic Poulos Studies.[^152]

[231] Mr. Poulos’ evidence was factual in nature to the extent that it applied to his role in Market Village’s proposed development of the Composite Site from the time of his retainer in 2009 to present.[^153] Where Mr. Poulos provided opinion evidence based on “his observation or participation in the events at issue”, and where he formed his opinions based on “the ordinary exercise of his or her skill, knowledge, training and experience while observing or participating in such events”, I found that his opinion evidence was admissible in his capacity as a participant expert, in accordance with the principles stated in Westerhof.[^154] Where he proffered opinion evidence that extended beyond these limits, I found that he did so in compliance with Rule 53.03.[^155] Regarding the issue of independence, Mr. Poulos’ lengthy work history with Market Village did not disqualify him from providing expert opinion evidence because I was satisfied that he was able and willing to assist the Court with opinion evidence that is fair, objective, and non-partisan.[^156]

b. Poulos Opinion Evidence

[232] To assess solutions for traffic and parking on the Composite Site in the context of the MV Development Project, Mr. Poulos examined traffic volumes, parking capacity and access through drive aisles and onto municipal roadways. He did not consider, at all, the land boundaries or easement rights, as his mandate was to determine the most efficient and effective movement of traffic for all the uses present and planned for the Composite Site. To do so, he analysed the traffic going in and out of the site, calculated trip generation rates for the Composite Site for the years 2010, 2014, and 2015 (while the Market Village Centre was operational) and compared this against data assembled by the Institute of Transportation Engineers (“ITE”).[^157]

[233] Mr. Poulos projected future traffic requirements by assessing traffic flow requirements as a factor of gross leasable area of the Pacific Mall, Kennedy Corners, and the MV Development Project, and then plotting these values on a chart prepared by the ITE for Urban/Suburban Shopping Centres.[^158] Through this analysis, Mr. Poulos concluded that the traffic demands resulting from the intensification of the Composite Site through the MV Development Project can be accommodated using the modifications to the drive aisles and Main Access Points that he designed in the Historic Poulos Studies.

[234] Mr. Poulos testified that Mr. Pernicky’s analysis projected the worst possible trip generation rate that could possibly occur and then simply multiplied it by the gross leasing area of the three commercial centres without any proper consideration of land use, transit, efficiencies, or effective modification of drive aisles and Main Access Points.

[235] Regarding parking, Mr. Poulos conducted parking utilization counts for the Composite Site in December 2010 on peak days in a peak month of the year. He found that the peak demand parking utilization was 5.59 parking spaces per 1,000 ft² of gross leasable floor area. Mr. Poulos testified that this is appropriate parking planning, just as he did to municipal authorities in the Market Village Site Plan Application in 2010 and again in 2014. Mr. Poulos stated that in light of the increased transit planned to service the Composite Site, by TTC, York Region buses and the GO train at the adjacent Milliken GO station, the parking provided by the MV Development Project would meet if not exceed appropriate supply requirements.

[236] Mr. Poulos noted the loss of 948 surface parking spaces on the MV Servient Land that would result from the encroachment of the proposed Remington Centre onto MV Servient Land but emphasized that the MV Development Project would add 2,094 new indoor parking spaces on indoor underground and deck parking in the new Remington Centre. Mr. Poulos agreed, in cross-examination, that the remaining surface parking would undoubtedly be over-utilized, but stated that this would be off-set, from a parking utilization standpoint, by the increased indoor parking.

(iii) Mr. Douglas Annand

[237] Pacific Mall called Mr. Douglas Annand to testify as a land economist and a consultant in shopping mall research and evaluation. After 30 years with a national accounting firm, Mr. Annand has, since 2004, been the President of his real estate consulting firm specializing in real estate development. Based on his experience, his education in economic geography, and his associations and memberships, I found that Mr. Annand was qualified to testify as an expert land economist and consultant in shopping mall research.

[238] Market Village objected to Mr. Annand providing opinion evidence on the valuation of business loss to Pacific Mall resulting from the MV Development Project. I upheld this objection.

a. Ruling on Admissibility of Annand Opinion Evidence

[239] Market Village conceded, and I accepted, that Mr. Annand had relevant evidence on the impact of the proposed MV Development Project on the Pacific Mall Centre, including customer parking preferences; interception of customers from one commercial retail centre to a neighboring centre; and the impact of the parking and traffic changes proposed by the MV Development Project on shopper access to Pacific Mall. I accepted that Mr. Annand was willing and able to provide opinion evidence that was independent and unbiased.

[240] The focus of the voir dire was Market Village’s objection that Mr. Annand’s opinion evidence on the valuation of the economic loss to Pacific Mall of the MV Development Project was inadmissible because Mr. Annand was not qualified to provide business valuation evidence, and that the evidence was unnecessary and irrelevant because this action did not raise any valuation issue. I agreed and rejected the Plaintiff’s submission that I should admit Mr. Annand’s opinion evidence on the issue of valuation and then consider it as a matter of weight, in accordance with the caution stated by Binnie J. in R. v. J.-L.J., that evidence “should be scrutinized at the time it is proffered, and not allowed too easy an entry on the basis that all of the frailties could go at the end of the day to weight rather than admissibility”.[^159]

[241] Since Mr. Annand was not qualified to conduct a business valuation, he was not qualified to provide an opinion regarding whether a business valuation was capable of being conducted. Since the valuation of Pacific Mall’s business was not in issue, the evidence was not necessary or reliable. In balancing the probative value of such opinion evidence against its prejudicial effect, I found that the balancing favoured exclusion as the potential weight that could be attributed to any such evidence had diminished beyond the vanishing point.[^160]

[242] I admitted Mr. Annand to provide opinion evidence on parking preferences and interception of customers amongst neighbouring retail centres, as necessary to my assessment of the impact of the MV Development Project on the Reciprocal Easements.

b. Annand Opinion Evidence

[243] Mr. Annand assessed the impact of the MV Development Project in that its 1,100 retail units would be in direct competition with the retail operations at the Pacific Mall Centre. He considered the impact on customer shopping preferences that would result from the loss of 948 surface parking spaces that would be caused by the construction of the Remington Centre.

[244] Mr. Annand stated that the loss of surface parking spaces on the Central Parking Area and the North Parking Area would impact Pacific Mall customers by reducing the availability of parking near the Pacific Mall Centre. The indoor parking spaces proposed by Market Village in the Remington Centre would require that a Pacific Mall customer walk from a greater distance to access the Pacific Mall. Retail shoppers parking in the indoor parking deck in the East Parking Area would have to navigate a path through the Remington Centre to shop at the Pacific Mall Centre, and shoppers parking in the South Parking Area and the North Parking Area would have to walk past the Remington Centre to shop at the Pacific Mall Centre.

[245] Mr. Annand stated that the change in the drive aisles and their attendant curbs and walkways would cause retail customers to be directed to the new Remington Centre. At the north end of the Composite Site, shoppers would be proximate to the new supermarket proposed by the MV Development Project. At the south end, shoppers would be directed to the indoor subsurface parking under the Remington Centre and in the East Parking Area behind the Remington Centre.

[246] Mr. Annand testified that the changes to the parking and drive aisles proposed by the MV Development Project would significantly impair, interfere with, and obstruct the operation of the Pacific Mall Centre. He opined that retail centres with more parking perform better than those with insufficient parking; that shoppers have a “definite preference” for surface parking over underground parking; that shoppers prefer to park as close as possible to their retail destination, and; that shoppers will be discouraged from using a shopping centre where there is a chronic lack of desirable parking spaces. Based on these principles, Mr. Annand testified that the loss of 948 surface parking spaces would be detrimental to Pacific Mall’s operations as a shopping centre.

[247] Mr. Annand stated, and I accept, that the greatest loss to Pacific Mall in surface parking would be in relation to the spaces closest to its shopping centre entrances, particularly the 184 parking spaces that would be lost in the Central Parking Area. He emphasized that the loss of spaces in the North Parking Area and the South Parking Area would also be impactful but stated that the loss of spaces in the East Parking Area would be the least detrimental to Pacific Mall.

[248] Mr. Annand rejected the proposition that the detriment caused by loss of surface parking spaces would be off-set by underground or deck parking in the new Remington Centre. He stated that these parking spaces are less desirable to Pacific Mall shoppers because they are indoor as opposed to surface spaces, they are not as proximate to the Pacific Mall Centre than the surface parking spaces that would be eradicated, and they would require the shopper to walk through the Remington Centre, and past its competing retail outlets, to navigate a path to the Pacific Mall Centre. He testified that this would result in “interception” of the Pacific Mall customer while walking through the proposed Remington Centre.

[249] Mr. Annand explained that “interception” occurs in a retail shopping context when competing retail outlets are positioned between where the customer is required to park and where the customer would ordinarily go to shop. In the case of the MV Development Project, new, competing retail outlets would be available to the shopper along the path from the deck parking proposed for the East Parking Area. Mr. Annand stated that this gives rise to interception of these customers by the Remington Centre’s new retail outlets before they could arrive at the Pacific Mall Centre. This is particularly so where the Remington Centre would offer the same or similar products and services, and where access from the indoor parking areas to the retail stores would be easier and more proximate to the Remington Centre than the Pacific Mall Centre.

[250] Notwithstanding the construction of the MV Development Project, there would still be 1,081 surface parking spaces available for Pacific Mall customers on PM Servient Land and 761 indoor spaces on PM Land under the Pacific Mall Centre. Mr. Annand testified, and I accept, based also on Mr. Pernicky’s evidence on this point, that this is below the historic levels of parking required by Pacific Mall’s customers and owners at the Composite Site.

(iv) Mr. James Tate

[251] Mr. James Tate has worked since 1987 as a real estate consultant, conducting market research on retail shopping demand. He specializes in commercial market demand analysis and impact assessment, primarily in relation to retail outlets. Pacific Mall did not contest, and I accepted, that Mr. Tate is a qualified land economist and retail market analyst, who was willing and able to provide opinion evidence that is independent and unbiased.

[252] Market Village proffered Mr. Tate’s testimony in two areas: the customer draw to the Pacific Mall and the Market Village shopping centres, and; the usage of the available parking by those customers drawn to the Pacific Mall Centre. The Plaintiffs objected to Mr. Tate providing opinion evidence that was based on raw data obtained by him from unidentified third-party suppliers on the basis that when the data on which the expert’s opinion relies is incapable of being proven, the opinion evidence ought not to be admitted because it cannot be attributed any weight.[^161] Market Village withdrew its tender of any part of Mr. Tate’s opinion evidence that was based on unproven raw data obtained from a supplier who was not called to testify, and I permitted him to testify to this extent.

[253] Mr. Tate agreed with Mr. Annand that shoppers prefer to park closest to the entrance of the retail store where they intend to shop, and that shoppers prefer surface parking to indoor parking. He stated that “all shoppers want the surface parking space at the front door to the mall”.

[254] However, Mr. Tate disagreed with Mr. Annand’s conclusion that the MV Development Project would have a detrimental impact on the Pacific Mall Centre, for a number of reasons. First, he stated that the Pacific Mall Centre is a ‘destination’ shopping centre that is unique in its boutique configuration and cultural appeal such that shoppers will travel from a greater distance to shop and will not be deterred by the unavailability of ideal surface parking spaces. Second, he noted that the surface parking spaces on PM Servient Land are unaffected by the MV Development Project, and that these are the spaces most proximate to the Pacific Mall Centre entrances. Third, he stated that although 948 surface parking spaces will be eliminated through the Market Village re-development, the Pacific Mall customers can simply walk further to remaining surface parking spaces, or they can walk from the indoor parking that will be available in the new Remington Centre. Mr. Tate characterized the loss of surface parking spaces as a “minor inconvenience” to customers of the Pacific Mall Centre and stated that the elimination of surface parking spaces and the introduction of more subsurface and deck indoor parking spaces in the new Remington Centre will not impede customer usage. He testified that customers of the Pacific Mall Centre can simply ‘circle around’ until they find a surface or indoor parking space.

[255] In cross-examination, Mr. Tate acknowledged that there will be a substantial reduction in surface parking on the MV Servient Land if the MV Development Project were to proceed, and; that the new Remington Centre will result in heightened demand for surface parking, with the result that Market Village customers will park, as they have historically, on the surface parking spaces on the PM Servient Land, reducing further the surface parking available to customers of the Pacific Mall Centre. Mr. Tate testified, without presentation of empirical data or study, that Pacific Mall customers would not be ‘discouraged’ by reductions in available parking proximate to the Pacific Mall Centre and would park in the new spaces provided by the MV Development Project. Mr. Tate did not challenge Mr. Annand’s evidence that there would be the potential for interception by Market Village of Pacific Mall customers who park in the Remington Centre.

(c) Analysis – Substantial Interference

[256] Pacific Mall contended that Market Village’s objective to build on the MV Servient Land was sufficient, in and of itself, to constitute substantial interference with the Pacific Mall Easement. Pacific Mall relied on the observation by Middleton J. in Devaney that where the servient owner builds on the servient land it is “almost impossible to say that there is not a real and substantial interference with the right conveyed”.[^162]

[257] I do not accept that the required analysis is that narrow. While I accept that building on an easement goes a long way toward establishing a substantial interference with the use of the easement, this act alone does not conclude the analysis. Even in Devaney, Middleton J. went on to examine whether the construction had substantially interfered with the servient owner’s use of the easement. Further, the Court of Appeal explained in Weidelich that construction on servient land is not, on its own, determinative of whether there has been a substantial interference with an easement. Rather, there must be an analysis of whether the purpose for which the easement was granted can still reasonably be accomplished. In Weidelich, the construction did not substantially interfere with the use of the easement where the dominant owner could still use the right of passage provided for by the easement: albeit in a more restricted space.

[258] I will assess whether the MV Development Project would substantially interfere with the Pacific Mall Easement by analysis of the impact on the Right to Park and the Right of Access.

(i) Substantial Interference of the Right to Park

[259] Market Village heavily relied on Weidelich, and a factually specific decision, 3177719 Manitoba Ltd. v. Banquet Barons Inc., in support of its submission that a reduction in surface parking caused by the MV Development Project does not substantially interfere with the Pacific Mall Easement. In Banquet Barons, a servient owner sought to redevelop its property in a way that would alter the dominant owner’s use of the easement for access, ingress and egress, and for parking. The Court found that this did not constitute substantial interference with the easement because “there was so much space left”, that its needs would still be met by the smaller number of spaces.[^163]

[260] The undisputed fact that construction of the proposed Remington Centre will eliminate 948 of the 1,352 surface parking spaces on the MV Servient Land is a compelling factor in support of Pacific Mall’s position that the Pacific Mall Easement is breached, but only one element of my analysis of whether Pacific Mall’s reasonable use of the easement would be substantially interfered. I must also assess whether Pacific Mall’s loss of use of the 948 surface parking spaces prevents Pacific Mall from reasonable use of its Right to Park, including consideration of Pacific Mall’s position that all the lost parking spaces are important to its operations and irreplaceable.

[261] Market Village contended that the elimination of the 948 parking spaces did not prevent Pacific Mall from reasonable use of the Right to Park on MV Servient Land. Alternatively, Market Village submitted that any such impairment of Pacific Mall’s Right to Park is rehabilitated or mitigated by Market Village’s construction of a greater number of indoor parking spaces than the eliminated surface parking spaces. I will assess these positions in order.

a. Is Pacific Mall’s Right to Park breached by the Elimination of the Surface Spaces?

[262] Mr. Annand and Mr. Tate testified that shoppers prefer to park in spaces closest to their shopping destinations. They also agreed that, generally, shoppers prefer surface parking spaces to indoor parking spaces for ease of orientation and manoeuverability. I accept this uncontroverted opinion evidence on shopping mall analysis and consumer preference.

[263] Market Village conceded that the surface parking on MV Servient Land that it proposes to construct upon is, in part, in areas proximate to the main entrances to the Pacific Mall. This is particularly so in the case of the surface parking spaces that would be eliminated in the Central Parking Area and the North Parking Area and, to a lesser extent in the South Parking Area. The surface parking on these MV Servient Lands allow for direct, unimpeded access by shoppers directly to an entrance door to the Pacific Mall. I accept Mr. Pernicky’s evidence that Pacific Mall customers routinely park in these areas for access to the Pacific Mall as this evidence was unaffected by cross-examination and was not, in my assessment, rebutted by any other evidence.

[264] The loss of surface parking in the East Parking Area is the most remote to the Pacific Mall. Market Village contended that Pacific Mall’s loss of the Right to Park in this area is unimportant because this area would not be used by Pacific Mall’s customers. I do not accept this submission. I accept Mr. Pernicky’s evidence that shoppers used the East Parking Area in the time after the demolition of the Market Village Centre when the only commercial centres on the Composite Site were Pacific Mall and Kennedy Corners. While the parking spaces in the East Parking Area are more remote to Pacific Mall, they are nonetheless surface parking spaces that have throughout been used by Pacific Mall customers, and I find that they are important to Pacific Mall’s operations.

[265] Mr. Pernicky found, in his 2014 and 2018 Parking Survey that the operations on the Composite Site routinely consumed all the available surface parking spaces. Mr. Pernicky’s “car-counting” through his parking surveys was not challenged by Mr. Poulos. As such, I accept Mr. Pernicky’s parking surveys and conclude from this evidence that the surface parking at the Composite Site, including the surface parking on the MV Servient Land, has routinely been utilized by Pacific Mall for its commercial operations, to full capacity during peak hours.

[266] I reject Market Village’s submission, based in part on Mr. Tate’s evidence which I similarly reject on this point, that the loss of the 948 parking spaces threatened by the MV Development Project are unimportant to Pacific Mall because its shoppers can park on Pacific Mall Land, including in the parking under the Pacific Mall Centre. I accept Mr. Pernicky’s evidence that Pacific Mall customers have routinely and historically used the 948 surface parking spaces available on the MV Servient Land additional to the parking available on PM Servient Land. Also, the availability of parking on Pacific Mall Land does not derogate from Pacific Mall’s Right to Park on MV Servient Land made available by the Pacific Mall Easement.

[267] I thereby find that Pacific Mall established that the 948 surface parking spaces in the MV Servient Land that would be eliminated or compromised through the MV Development Project are important to Pacific Mall’s operations because they are, for the most part, proximate to the Pacific Mall Centre, have historically and routinely been used by Pacific Mall’s customers and, except in the case of the East Parking Area, allow for a direct, unimpeded path into the Pacific Mall Centre.

[268] I have considered whether Pacific Mall’s Right to Park is nonetheless capable of being reasonably exercised through use of the 404 surface parking spaces that would remain on the MV Servient Land after the completion of the MV Development Project. I have concluded that it is not, for the following reasons.

[269] The elimination of 948 surface parking spaces of the 1,352 surface parking spaces currently situated on MV Servient Land is a large quantity (70.1%) of the inventory of surface parking spaces on MV Servient Land that have, by my finding, been routinely used by Pacific Mall. Additionally, I find that a portion of the remaining 404 surface parking spaces would be of diminished availability to Pacific Mall in its exercise of its Right to Park by reason of design elements of the MV Development Project, making the impact of the intrusion on MV Servient Land even more pronounced. The curbing designed for the underground parking ramp to be constructed in the Central Parking Area and its landscaping would effectively restrict the parking in the Central Parking Area to that on PM Servient Land and would impede Pacific Mall customers from walking from the North Parking Area.[^164] The North Parking Area would be re-designed to appear, for all purposes, to service only the supermarket at the north of the proposed Remington Centre, and would be isolated from the north entrance to the Pacific Mall Centre. The remaining surface parking spaces in the South Parking Area would similarly be physically oriented to, and secondary to the underground parking ramp from Steeles Avenue into the Remington Centre and would not be as recognized for use by Pacific Mall customers as they have been historically. This represents a loss of the 35 Straddling Parking Spaces.

[270] This is not a situation like in Weidelich, where the right to pass along a laneway could still be reasonably used notwithstanding construction on a portion of the right-of-way. There, the Court balanced the dominant owner’s right to pass with the servient owner’s right to manage its land and found that both land interests could co-exist notwithstanding construction on a part of the laneway. The passage may have been narrower, but the laneway was still passable. Here, the elimination of 70.1% of the surface parking spaces on servient land will, in circumstances in which Pacific Mall’s operations routinely rely on use of these spaces, prevent Pacific Mall’s reasonable use of its Right to Park on MV Servient Land because, on all evidence, there will not be enough surface parking on the remaining 404 spaces on MV Servient Land to meet historic, established requirements. The substantial interference with Pacific Mall’s Right to Park is accentuated by my conclusion that even Pacific Mall’s use of the remaining 404 spaces would, in some respects, be compromised.

[271] These factors distinguish this case from Banquet Barons. There, the loss of a part of a surface parking lot through construction on servient land still left adequate surface parking spaces of an identical character. That is not the case here. The loss of surface parking spaces on MV Servient Land and the diminished utility to Pacific Mall of others, will not, in my determination, leave sufficient surface parking on MV Servient Land to allow Pacific Mall to have reasonable use of the Pacific Mall Easement.

[272] I thereby conclude that the elimination of 948 surface parking spaces through construction on MV Servient Land, and the diminished availability of others through re-purposing of the MV Servient Land, would detrimentally impact Pacific Mall’s use of those portions of the MV Servient Land that would be absorbed into the Remington Centre, would prevent Pacific Mall’s reasonable use of its Right to Park, and would thereby breach the Pacific Mall Easement.

[273] I will now assess Market Village’s position that this impairment to the Pacific Mall Easement is rehabilitated by its proposal to provide replacement parking spaces within the Remington Centre.

b. Market Village’s Position: Replace Eliminated Surface Parking on Servient Land with Indoor Parking in the Remington Centre

[274] Market Village submitted that the 2,094 indoor parking spaces that would be added through the MV Development Project more than off-set the loss of 948 surface parking spaces that would be eliminated through the construction of the Remington Centre. Accordingly, Market Village maintained that Pacific Mall will still have reasonable use of the Right to Park provided by the Pacific Mall Easement, through use of the parking spaces within the Remington Centre, even though, as I found earlier, none of the indoor parking spaces were proven to be situated on portions of the MV Servient Land absorbed by the Remington Centre. Even if a small portion were, its access and use would be controlled by Market Village, unlike the current surface parking on MV Servient Land accessible by all the parties.

[275] Pacific Mall contended that Market Village’s submission was wrong in law, because the availability of parking spaces on land in which Pacific Mall has no easement is immaterial to an assessment of whether there has been substantial interference with Pacific Mall’s use of its easement and constituted instead an improper attempt to reallocate rights between neighboring landowners. Pacific Mall contended, further, that Market Village’s position could not be established on the evidence. I accept these submissions, for reasons that I will now explain.

[276] In my view, the exchange of parking proposed by Market Village – throughout opposed by Pacific Mall – is not a proper consideration in my assessment of whether the Pacific Mall Easement has been substantially interfered with because the proposed replacement indoor parking is not on MV Servient Land and is thereby not subject to any easement between the parties. Market Village’s submission called for adjudication of the sufficiency of an exchange or bartering of rights and was, in my determination, immaterial to my assessment of whether the easement had been breached.

[277] For example, in Weidelich, the Court of Appeal conducted an easement-centric analysis: could the easement still be reasonably used by the dominant owner after the construction on the servient laneway? This analysis focuses on the use of the easement land, not whether consent by the servient owner for use of a different laneway, over which the dominant owner had no easement rights, was an adequate trade-off, or sufficient to off-set the loss of use of the easement.

[278] Mr. Peddigrew’s offer, provided during his examination in chief, for Market Village to provide an easement now over the indoor parking spaces in the Remington Centre in exchange for those eliminated on MV Servient Land was immaterial to my analysis. This evidence revealed the essence of Market Village’s position: a trade of Pacific Mall’s easement rights over portions of the MV Servient Land in exchange for indoor parking spaces in the Remington Centre. But trials are about adjudication, not the brokering of negotiations from the witness stand.

[279] In assessing whether Market Village’s breach of the Right to Park in the Pacific Mall Easement can be saved by bartering indoor parking in the Remington Centre, I have taken guidance from the principles from an analogous area: namely, consideration of whether to discharge or modify an easement under section 61(1) of the Conveyancing and Law of Property Act (the “CLPA”).[^165] In cases decided under section 61(1) of the CLPA, courts have emphasized that their role in considering the modification or discharge of an easement is not to reallocate benefits and detriments to landowners on land use issues, and certainly not to engage in an assessment of the swapping of rights. I adopt the principle stated by Monahan J. in Silver Seven Corporate Centre Inc. v. 2871220 Canada Limited, that it is not the role of the Court to reallocate land rights between property owners seeking to trade, but rather this is a matter for the parties to settle through negotiation and agreement.[^166]

[280] I will illustrate the application of this principle by reference to the decision by McKelvey, J., in 8310 Woodbine Developments Inc. v. 2261039 Ontario Limited, a case that bears striking factual similarity to this action but in the framework of the CLPA.[^167] There, the parties owned contiguous properties that shared an access easement to allow for passage to an adjacent roadway. The servient owner sought to construct a commercial office building. It would be limited to 12,000 ft² if respecting the boundary of the existing easement land but could be constructed at a much more desirable 17,000 ft² if the servient owner could relocate the existing easement. The servient owner offered to pay the dominant owner to move the easement but, unable to achieve a resolution, brought an application under section 61(1) of the CLPA for an Order to relocate the easement.

[281] The Court dismissed the servient owner’s application, adopting the principles set out by Monahan J. in Silver Seven,[^168] holding that a court cannot order the relocation of a registered easement because this would effectively constitute the confiscation of a legal interest in the same way as the transfer of a fee simple interest or a lease.[^169] McKelvey J. emphasized that the “reallocation of rights between parties is a matter for the parties themselves to settle through negotiation” and that Court’s should intervene only when there is no prejudice to the dominant owner.[^170] To do otherwise would allow for unilateral re-writing of an easement without consent, which would create uncertainty in land ownership without any mechanism for the assessment of compensation to the party whose property right – the easement – is being affected.

[282] I adopt and apply these principles to my assessment of the breach of the Pacific Mall Easement. I found earlier that the construction proposed by Market Village on MV Servient Land will substantially interfere with, and thereby breach Pacific Mall’s Right to Park. I do not accept Market Village’s submission that I should engage in the reallocation of this breached easement right in exchange for Market Village’s permission that Pacific Mall customers can park in the Remington Centre. This is an issue for the parties to negotiate and settle themselves, not an issue for the Court to determine in an action for declaratory relief.

[283] Had I been persuaded by Market Village to balance or off-set the loss of Pacific Mall’s easement right with Market Village’s offer of permission to park on Market Village Land unencumbered by an easement, I would have determined nonetheless that the Pacific Mall Easement would be substantially interfered with, and thereby breached by the MV Development Project. For completeness of analysis, I will explain why.

[284] I accept Mr. Annand’s evidence that the indoor parking spaces proposed by Market Village in the Remington Centre are not of the same nature and character, to a Pacific Mall customer, as the surface parking spaces that they would replace. Mr. Annand explained, and I accept, that the indoor parking spaces would require that a shopper walk through the Remington Centre to shop at the Pacific Mall Centre, depriving Pacific Mall customers of a direct access path to the Pacific Mall that is unfiltered by exposure to the commercial and retail outlets in the Remington Centre.

[285] I accept, as well, Mr, Annand’s evidence that this gives rise to the potential for interception of the Pacific Mall customer which does not currently exist in the parking in the Central Parking Area, the North Parking Area and the South Parking Area. I accept Mr. Annand’s opinion that the shopper could be intercepted by the competing stores in the Remington Centre, to the detriment of Pacific Mall. I thereby conclude that the parking spaces under consideration are not fungible – they are not interchangeable – because the surface parking spaces that would be eliminated are more useful and valuable to Pacific Mall, by reason of their location and the direct path they offer to the Pacific Mall Centre, than the indoor parking spaces proposed by Market Village.

[286] I also accept Mr. Annand’s opinion evidence that the physical construction on the MV Servient Land, the erection of building walls where surface parking currently exists and their attendant curbs and driveways, would affect Pacific Mall “customer usage”. These changes would cause Pacific Mall customers to be redirected to the Remington Centre and away from the Pacific Mall Centre. This results from the reconfiguration of drive aisles necessary for drivers to access the underground parking from the Central Parking Area and the South Parking Area, and the deck parking, from the East Parking Area. These changes required to service the indoor parking would, in my determination, impair or impede the ability of Pacific Mall customers to park proximate to the Pacific Mall Centre, or in a direct walking path, and would thereby not remedy or mitigate the breach of the Pacific Mall Easement caused by construction on portions of the MV Servient Land.

[287] In making these determinations, I prefer the evidence of Mr. Annand, which I found to be reasoned and analytical over the evidence of Mr. Tate in all areas where they conflict. Mr. Tate’s evidence that Pacific Mall customers will only realize “minor inconvenience” through loss of the surface parking and can “circle around” until they find a space was not based on any proven data and was purely anecdotal. Further, these opinions were inconsistent with Mr. Tate’s admission that the substantial reduction in the surface parking on the MV Servient Land combined with intensification of use resulting from the Remington Centre will result in a heightened demand for the surface parking proximate to the Pacific Mall Centre by customers of the Remington Centre, to the detriment of Pacific Mall. Mr. Tate’s opinion that the parking on the MV Servient Land most affected by the construction of the Remington Centre was unimportant to Pacific Mall was simply not established in the case of the Central Parking Area and the North Parking Area.

[288] Last, I will address the conflict in opinion evidence between Mr. Pernicky and Mr. Poulos regarding the sufficiency of the 2,094 indoor parking spaces proposed by Market Village to replace or off-set the surface parking spaces that would be eliminated by the MV Development Project. Mr. Pernicky testified that the parking proposed in the Remington Centre is insufficient to accommodate the intensification of use of the Composite Site whereas Mr. Poulos testified that it was. I accept Mr. Poulos’ opinion evidence on this issue over Mr. Pernicky’s evidence.

[289] Mr. Pernicky’s opinion was based on his snapshot parking survey conducted in 2014 and a further snapshot taken four years later, in 2018. Mr. Poulos was critical of Mr. Pernicky’s methodology of just taking a straight-line arithmetic extrapolation to project future parking needs, and I agree. Mr. Poulos’ methodology of assessing shopping centre traffic demands by plotting actual trip generation rates against data assembled by ITE was more precise and reliable because it is based on data assembled from actual, comparable commercial centres.

[290] Further, I agree with Mr. Poulos that the straight-line extrapolation failed to take into consideration the synergy between the retail centres – internal trip capture - where customers may shop at more than one centre on the same trip, and increased transit services to the Composite Site, both by bus and the Milliken GO station, that would result in lower vehicular traffic. Overall, I found Mr. Poulos’ opinion evidence to be well-reasoned, based on established principles gained by analysis of comparable shopping centres and reflective of local municipal requirements.

[291] However, Mr. Poulos’ opinion evidence was of limited assistance to my determination of a breach of the Pacific Mall Easement because, as Mr. Poulos emphasized fairly, his opinion evidence did not consider any boundaries or easement rights on the Composite Site. He examined only the sufficiency of the parking for the uses on the entirety of the Composite Site, deliberately without any assessment of whether the parking spaces were on easement lands, or how the nature and character of the parking spaces affected the parking rights of Pacific Mall and its customers.

[292] As a result, while I accepted Mr. Poulos’ opinion that 2,094 indoor parking spaces would adequately address the loss of surface parking that would result from the MV Development Project, even in the face of intensification of use of the Composite Site, this does not alter my conclusion that the Pacific Mall Easement would be breached by the MV Development Project to the extent of the construction proposed on the MV Servient Land. The different nature, character and, most importantly, location of the parking spaces was immaterial to Mr. Poulos’ assessment, but they are material to my assessment of whether the Right to Park in the Pacific Mall Easement would be breached. Accordingly, I conclude that even though the MV Development Project provided for sufficient parking spaces from a municipal and shopping centre planning process, the indoor parking spaces did not repair or remedy the breach of the Right to Park that would be caused by the construction of a portion of the Remington Centre on MV Servient Land and the resultant loss of surface parking spaces currently available to Pacific Mall.

(ii) Substantial Interference with the Right of Access

[293] Having determined that the Right to Park in the Pacific Mall Easement would be breached by construction of the Remington Centre on MV Servient Land, it is unnecessary to determine whether the Pacific Mall Easement would also be breached by impairment of the Right of Access. However, for completeness of analysis, I will explain my determination that had I not found that the Pacific Mall Easement was breached by substantial interference with the Right to Park, I would have found that the Pacific Mall Easement was breached by substantial interference with the Right of Access. There are three reasons.

[294] First, the Right to Access in the Reciprocal Easements applies to all Parts of the Easement Land. Hence, the Pacific Mall Easement grants Pacific Mall with a Right of Access to all the MV Servient Land. In accordance with the Easement Purposes Clause, this Right of Access is for the purpose of “carrying on normal shopping activities and commercial and retail activities” on the Composite Site. Pacific Mall’s Right of Access would be eliminated on Part 17 (part of the Central Parking Area), Part 15 (the North Parking Area), Part 26 (the East Parking Area) and Parts 19 and 23 (within the South Parking Area) should these Parts be absorbed within the Remington Centre Building Envelope. Pacific Mall would not be able to access land that has been rendered inaccessible through brick and mortar construction.

[295] Second, the MV Development Project would have the effect of converting MV Servient Land outside the Remington Centre Building Envelope from servient land used for access and free passage by both Market Village and Pacific Mall to single use in favour of Market Village. This is seen in the East Parking Area, that would be converted to use solely for access to the deck parking, and the Central Drive Aisle to Part 17, that would house only the underground ramp to the Remington Centre. In each of these instances, access routes that have historically been shared by Market Village and Pacific Mall for access to their respective retail shopping centres would be re-engineered to serve the purpose only of access to the Remington Centre.

[296] Third, the curbing and landscaping that the MV Development Project calls for on MV Servient Land would restrict access to pedestrian traffic to the Pacific Mall. This is seen most acutely in the Central Parking Area, where a currently shared access area is subdivided into restricted access, and Part 15 where the reconfiguration of drive aisles will imbalance the shared access of the North Parking Area by focusing traffic toward the supermarket at the north end of the Remington Centre. These changes would isolate access to the Pacific Mall Centre to surface parking on the PM Servient Land and the underground parking beneath the Pacific Mall Centre to the exclusion of the broader access historically available to Pacific Mall customers.

(d) Conclusion – The MV Development Project Contravenes the Pacific Mall Easement to the Extent of Construction on MV Servient Land

[297] I conclude that the Right to Park in the Pacific Mall Easement would be breached by the MV Development Project to the extent of the construction proposed on MV Servient Land. I do not accept Market Village’s position that it would be correct, in law, to reallocate Pacific Mall’s impaired easement right with Market Village’s proposal for substituted indoor parking spaces over which Pacific Mall has no registered easement. Even had I accepted this principle and taken into consideration the proposed indoor parking, I would have found that the indoor parking spaces proposed by Market Village do not remedy or repair the breach of the Right to Park caused by the proposed construction on MV Servient Land due to the different nature, character, and location of the indoor parking spaces to those on the MV Servient Land.

[298] Had I found it necessary to determine whether the Right to Access in the Pacific Mall Easement would also breached by the MV Development Project, I would have determined, on the evidentiary findings that I have made, that it would be breached to the extent of the construction proposed on MV Servient Land. I find that the construction proposed by the MV Development Project would prevent Pacific Mall from accessing those portions of the MV Servient Land that would be subsumed into the Remington Centre, and would prevent Pacific Mall from the reasonable use of its Right of Access to “pass freely to and from each of their respective buildings and lands” for the purposes of carrying on the integrated commercial and retail uses of the Composite Site.

V. WOULD THE MV DEVELOPMENT PROJECT OVERBURDEN THE MARKET VILLAGE EASEMENT?

[299] By the Market Village Easement, Pacific Mall granted to Market Village the right to park on, and a right of access over the PM Servient Land. Market Village has exercised these rights from 1994 to the demolition of the Market Village Centre in 2018 and proposes to do so in an intensified manner through development of the Remington Centre. Pacific Mall contended that the MV Development Project will result in overburdening of the PM Servient Land and will thereby exceed the permissible uses granted by Pacific Mall in the Market Village Easement.

A. Legal Principles Applicable to Overburdening of an Easement

[300] Overburdening of an easement occurs when an easement is used excessively or “significantly beyond the rights and nature conveyed in the grant of easement”.[^171]The reasonable use of an easement balances the land ownership interests of the servient owner with the rights granted through the easement to the dominant owner. When this balance is lost, through excessive use by the dominant owner in a manner that unreasonably compromises the rights of the servient owner, the easement is breached through overburdening.

[301] A mere increase in the use of the easement right is not sufficient to constitute overburdening, so long as that increase is consistent with the purpose for which the easement was granted. Rather, an easement is overburdened when it is used in a manner that was not contemplated at the time of its grant or is excessive to the point that it destroys or impairs the use of the servient land by the servient owner.[^172]

[302] The determination of whether an easement has been overburdened is assessed from the intention of the parties at the time that the easement was granted, analysed contextually.[^173] In Malden Farms Limited v. Nicholson, the Ontario Court of Appeal explained that “the grantee of a right of way is not entitled to increase the legitimate burden” but the “legal extent of his right may entitle him to increase the amount of inconveniences, imposed upon the servient [owner]”.[^174] The Court of Appeal gave the example, useful to my current analysis, that the dominant owner may place “on the dominant [owner] new buildings or increase the size of old buildings” provided that this is within the legal extent of the right granted.

[303] Market Village conceded that the MV Development Project would result in intensification of the commercial and retail uses at the Composite Site, with increased demands on parking and internal traffic circulation. The issue is whether this intensification would cause overburdening of Market Village’s use of the PM Servient Land beyond that allowed by the Market Village Easement.

B. Analysis – Have the Plaintiffs Established that the MV Development Project would Overburden Market Village’s Use of its Easement?

[304] A considerable amount of the trial time was consumed in expert testimony regarding whether the intensification of the uses at the Composite Site by the MV Development Project would overwhelm the Market Village Easement and thereby detrimentally impact the retail and commercial operations of the Pacific Mall Centre. Mr. Pernicky opined that the MV Development Project would negatively impact traffic circulation, causing high delays and over-capacity on all drive aisles, and that the projected increase in total parking spaces to 4,340 spaces[^175] from its current inventory of 3,194[^176] would be insufficient to support the projected parking demands of the Composite Site.

[305] I accept Mr. Pernicky’s count of historic use of parking and traffic circulation at the Composite Site, assembled through observation even though I have rejected his extrapolation of future projections from this raw data. His counts of routine use of the Composite Site were not materially different from the assessments conducted by Mr. Poulos in 2010, 2014, and 2018 of parking and traffic circulation. The experts’ historic assessments concluded that the Composite Site was well-utilized, put simply, busy, but not at critical levels.

[306] My acceptance of Mr. Poulos’ opinion evidence that the Composite Site can accommodate the intensified use that would result from development of the Remington Centre does not end my analysis on overburdening because, again, Mr. Poulos’ opinions focussed on the parking and traffic impacts on the Composite Site, not on the Reciprocal Easements. In assessing whether Market Village’s projected use of the PM Servient Land would overburden the rights granted in the Market Village Easement, I must focus on the use of the servient lands by both the dominant owner and the servient owner, as a distinct and independent element within the projected use of the overall Composite Site.

[307] While the development of the Remington Centre might well be capable of being accommodated on the Composite Site – potentially in any number of configurations – I am required to assess whether this single development project – the MV Development Project – does so in a manner that allows Pacific Mall to exercise its rights as the owner of the PM Servient Land without overburdening by Market Village in exercise of its easement rights.

(a) Overburdening of the Right to Park on the PM Servient Land

[308] Relying on the principles stated in Laurie v. Winch and Malden Farms, Market Village contended that as the grantee of an easement, it is entitled to increase the “amount of inconveniences” imposed on Pacific Mall, as the servient owner, including by increasing the size or number of buildings on its land, because this was consistent with the extent of its legal rights contained in the Market Village Easement.[^177] Market Village pointed to the application of this principle in Sunnybrae Springbrook Farms, where the Court held that an increased use of an easement did not constitute overburdening where it was within the uses intended at the time of the grant.[^178]

[309] Through the Reciprocal Easements, Market Village Inc. and Pacific Mall Inc. granted to the other, and each received surface parking rights on their respective easement lands. I find, on the evidence of Mr. Swirsky and the facts agreed upon by the parties, that each party intended that the customers, owners, and invitees of the other had a Right to Park on the easements lands for the purpose of accessing each of their retail shopping centres. As explained, Market Village Inc. made available to Pacific Mall Inc. 1,352 such surface parking spaces and Pacific Mall Inc. made available to Market Village Inc. 1,081 such surface parking spaces. I find that the parties intended that the MV Servient Land would “have the legitimate burden” of being parked upon by those using the Pacific Mall Centre, and the PM Servient Land would “have the legitimate burden” of being parked upon by those using the Market Village Centre.

[310] To the extent that the MV Development Project proposes to construct on the MV Servient Land, the parking available to customers, owners, and invitees of both the Pacific Mall Centre and the Remington Centre would be unbalanced from the reciprocal shared parking intended by the Reciprocal Easements. The result would be that Market Village’s use of the parking on the PM Servient Land would be beyond that contemplated at the time of the grant because Market Village’s use would be heighted by the reduction in its own inventory of surface parking. I will explain this further.

[311] The surface parking spaces on the PM Servient Land are seen in Schedule “B” on Parts 7, 10, and 13. The surface parking on Part 10 currently forms part of the Central Parking Area along with two parts of MV Servient Land: Parts 15 and 17. However, after the construction of the Remington Centre, only Part 10 (PM Servient Land) would be available for surface parking in the Central Parking Area because Part 15 and a portion of Part 17 (MV Servient Land) would be built upon or re-purposed.

[312] This is illustrated by Schedule “C”, which shows that the surface parking in the Central Parking Area on Part 17 (MV Servient Land) would be absorbed into the Remington Centre Building Envelope and a portion of Part 15 (MV Servient Land) would be reconfigured from parking to traffic circulation. The remaining surface parking on the PM Servient Land would be on Part 7, to the west of the Pacific Mall Centre, and Part 13, to its south.

[313] The customers intending to shop at the Market Village Centre and the Pacific Mall Centre have 2,433 available surface parking spaces. The evidence of Mr. Pernicky and Mr. Poulos, which I accept, was that these spaces are all routinely needed for the retail and commercial operations of the Composite Site. The MV Development Project will have the effect of eliminating 948 of these spaces, reducing the total number of surface parking spaces available to customers of Market Village and Pacific Mall to 1,485 parking spaces, of which 1,081 are on the PM Servient Land.

[314] Schedule “C” shows that these 1,081 surface parking spaces are the surface parking spaces most proximate to the Pacific Mall Centre’s entrances, and most allow for easy access to the north and south entrances of the Remington Centre. With the elimination of portions of the MV Servient Land through the MV Development Project, and with the resultant reduction of 70.1% of the currently-available surface parking spaces on the MV Servient Land, the customers, owners and invitees of Market Village seeking surface parking spaces proximate to the Remington Centre would have a smaller inventory to chose from. The expert evidence that I have accepted established that this will place “increased burden” on the surface parking on the PM Servient Land beyond that contemplated at the time of the grant.

[315] I accepted Mr. Annand’s expert opinion that retail shoppers have a distinct preference for surface parking over indoor parking, and that shoppers prefer to park near their shopping destination. The surface parking spaces on the PM Servient Land are thereby the parking spaces most important to the operations of the Pacific Mall Centre and are, at the same time, also proximate to the Remington Centre.

[316] Based on this evidence, I find that if the inventory of surface parking spaces available under the Reciprocal Easements and currently being fully utilized were reduced from 2,433 (1,325 on MV Servient Land, 1,081 on PM Servient Land) to 1,485 (404 on MV Servient Land, 1,081 on PM Servient Land), there would be overburdening of the use of the 1,081 parking spaces on the PM Servient Land. The surface parking spaces in the Central Parking Area and the South Parking Area on PM Servient Land are proximate to the Market Village Centre – in some cases as proximate as to the Pacific Mall Centre – and this will result in customers of each retail shopping centre competing for a substantially reduced number of parking spaces, placing excessive burden on the surface parking on the PM Servient Land.

[317] I do not accept Market Village’s submission that the indoor parking spaces that it would create within the Remington Centre will off-set any overburdening of the surface parking spaces in the PM Servient Land, for two reasons. First, for reasons explained earlier, my assessment of overburdening must, in my view, be based on the use of the easement lands, and not land that is not subject to the Reciprocal Easements. Second, based on Mr. Annand’s evidence, which I accept, these parking spaces are not of the same nature, character, and location as those that will be eliminated, and are subject to interception because the Pacific Mall customer would have to navigate through the Remington Centre to reach a shopping destination in the Pacific Mall Centre.

[318] I conclude that the effect of construction on the MV Servient Land involved in the MV Development Project would be to imbalance the distribution of surface parking on the Composite Site as between Market Village and Pacific Mall and to increase the utilization of parking on the PM Servient Land to critical levels. This will result in inconvenience and overburdening the PM Servient Land beyond that reasonably intended by the parties at the time of the granting of the Market Village Easement.

(b) Overburdening of the Right of Access on the PM Servient Land

[319] Having determined that the MV Development Project would overburden the Right to Park on the PM Servient Land beyond that provided for by the Market Village Easement, it is unnecessary to determine whether the MV Development Project would also overburden the easement’s Right of Access on the PM Servient Land. However, for completeness of analysis, I will explain my assessment that I would not have found that the PM Servient Land would be overburdened by the Right to Access contained in the Market Village Easement.

[320] The reason for this conclusion is straightforward. As already explained, I accepted Mr. Poulos’ opinion evidence that the intensification of the traffic requirements of the Composite Site caused by the MV Development Project can be accommodated by the internal drive aisles and by the Main Access Points with the reconfigurations identified by Mr. Poulos. This includes the drive aisles located on PM Servient Land that are subject to the Market Village Easement. The drive aisles on PM Servient Land at Parts 9 and 11 would be reconfigured by the MV Development Project, but would not be built upon and, according to Mr. Poulos, would not reach critical levels of use.

[321] This is different than my analysis of overburdening of the Right to Park on the PM Servient Land simply because of the differing impact of the MV Development Project. Market Village proposed to reduce its surface parking on the MV Servient Land from 1,352 to 404, thereby overburdening the parking on the PM Servient Land, but the MV Development Project does not propose to eradicate or even restrict passageways on either the MV Servient Land or the PM Servient Land. In fact, it proposes to enlarge them and expand the turn lanes at certain of the Main Access Points.

[322] Pacific Mall’s position that the MV Development Project would overburden the use of the PM Servient Land for access was based on the opinion evidence of Mr. Pernicky on future traffic utilization, which I have rejected in favour of the opinion evidence of Mr. Poulos on this issue. I therefore find that Pacific Mall failed to establish that the MV Development Project would overburden Market Village’s Right of Access on PM Servient Land.

C. Conclusion – The Plaintiffs Have Established that the MV Development Project would Overburden the Market Village Easement

[323] For the above reasons, I conclude that the MV Development Project would overburden the parking on the PM Servient Land caused by the reduction in surface parking resulting from the construction proposed on the MV Servient Land. This would increase the demand on the remaining surface parking on the PM Servient Land beyond the levels intended at the time that the Market Village Easement was granted, which involved reciprocal provision of surface parking on MV Servient Land.

[324] If I had not reached this conclusion, and had it then been necessary to determine whether the MV Development Project would overburden access and free passage on the PM Servient Land, I would have determined that the MV Development Project would not overburden the Right of Access granted by the Market Village Easement.

VI. WOULD THE MARKET VILLAGE DEVELOPMENT PROJECT CONSTITUTE A NUISANCE OR TRESPASS?

[325] The Plaintiffs sought a declaration that the MV Development Project would result in a trespass or nuisance to the Pacific Mall Easement. In closing submissions, the Plaintiffs did not make any submissions on the tort of nuisance, but focussed on three aspects of their trespass complaint, relying principally on Friday Harbour Resorts v. 2138746 Ontario Inc.:[^179] (a) trespass due to substantial interference with the Pacific Mall Easement; (b) trespass due to overburdening of the Market Village Easement; and, (c) trespass that would result from Market Village’s construction operations on the MV Servient Land, resulting in curbing re-alignment on the PM Servient Land.

[326] The first two elements of trespass have been subsumed in my analysis of breach of the Reciprocal Easements through substantial interference and overburdening. In light of my determination on those issues, I do not consider it necessary to address these same elements in their alternative framing as an alleged trespass. The third element of trespass was narrowed prior to trial and rendered largely redundant by agreements made by the parties further to motion practice conducted in 2018. I will explain how.

[327] In November 2017, Pacific Mall brought a motion to amend its statement of claim, to seek summary judgment on certain of the declarations pertaining to the Reciprocal Easements and for a permanent injunction restraining Market Village from proceeding with the MV Development Project (the “2017 Pacific Mall Motion”). Pacific Mall contended that the MV Site Plan Approval Application, at that time supported by the April 19, 2017 Drawings, would entail work on the Pacific Mall Land that was unauthorized and thereby constituted a trespass. Market Village contended that it had no intention of building on Pacific Mall Land without Pacific Mall’s consent, such that the motion was unnecessary.

[328] The 2017 Pacific Mall Motion was supplemented by a second partial summary judgment dated March 2, 2018 and was then settled on or about April 26, 2018, prior to a hearing. The terms of settlement provided that Market Village submit revised drawings in support of its Site Plan Approval Application that no longer included any form of trespass on or works upon the Pacific Mall Land. A further term of settlement of the 2017 Pacific Mall Motion was that Market Village agreed not to trespass on, work upon, or access the Pacific Mall Land to effect development or re-development of the Market Village Centre without Pacific Mall’s express written consent, and that this term be incorporated into Market Village’s Site Plan Application (collectively the “2018 Motion Settlement Terms”).

[329] The evidence showed that Market Village has complied with these terms. Market Village submitted new drawings in support of its Site Plan Application, specifically, the November 5, 2018 Site Plan Drawings, which defined the MV Development Project for the purposes of this trial. The MV Development Project does not involve construction on Pacific Mall Land. Further, Market Village has not entered upon Pacific Mall Land for purposes of its re-development project, at least since the settlement of April 2018. Last, Market Village agreed to the MV Site Plan Condition, which provided that municipal approval of the MV Site Plan Application be made conditional on Market Village entering into arrangements satisfactory to Pacific Mall and Kennedy Corners.

[330] The only aspect of Pacific Mall’s claim in trespass that remained was its submission that the curbing required on the MV Servient Land by the MV Development Project will compromise the Straddling Parking Spaces in the Central Parking Area on PM Servient Land because these parking spaces would be dissected, and thereby rendered useless. This consequence will only occur if Market Village were to construct on MV Servient Land, which I have found would be in contravention of the Pacific Mall Easement.

[331] In light of my determination that construction on the MV Servient Land would contravene the Pacific Mall Easement, there can be no collateral affect on the Straddling Parking Spaces on the PM Servient Land in the Central Parking Area. This finding rendered redundant this last component of Pacific Mall’s claim in trespass. The Plaintiffs’ claim for declaratory relief based on nuisance or trespass on the part of the Market Village Defendants is thereby dismissed.

VII. HAVE THE PLAINTIFFS ESTABLISHED THE BASIS FOR THE ISSUANCE OF A DECLARATORY JUDGMENT?

[332] At the time of trial, the MV Development Project was in the municipal approval phase. No building permit had been issued for the Remington Centre. The MV Site Plan Application remained subject to the MV Site Plan Condition. Accordingly, the Plaintiffs made no claim for monetary damages as no actual infringement of the Reciprocal Easements has occurred.

[333] Rather, the Plaintiffs requested the issuance of eight detailed declarations, drafted elaborately, comprising four pages of a draft Judgment, each of which anticipated the construction planned by the MV Development Project. Through these declarations, the Plaintiffs effectively asked that the Court declare that each element of the MV Development Project contravened every aspect of the Reciprocal Easements, was also a nuisance and a trespass, and all ought to be permanently restrained.

[334] Market Village submitted that the declarations sought by the Plaintiffs were overly broad, unnecessary, and would cause more uncertainty between the neighbouring parties than clarity. They urged that if I should find that the MV Development Project breached the Reciprocal Easements in certain ways, any declaratory relief must be specific to be most useful to the parties in their continued co-existence on the Composite Site. In considering these positions, I have been guided by the well-established principles pertaining to the issuance of declarations.

A. Applicable Principles for Issuance of Declaratory Judgment

[335] Courts have jurisdiction to grant declaratory relief under their inherent jurisdiction and in accordance with section 97 of the Courts of Justice Act, which provides that the Court “may make binding declarations of right whether or not any consequential relief is or could be claimed.”[^180] Despite the wide authority for the Court to grant declaratory relief, the granting of a declaration is discretionary.[^181] The Ontario Court of Appeal has cautioned that this discretion should be exercised sparingly and with extreme caution.[^182]

[336] A declaratory judgment is “a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs”.[^183] Courts can and do grant declarations to enable parties to know their rights and to avoid future disputes. In Yasin v. Ontario, the Ontario Court of Appeal stated that in civil litigation, “a declaration is normally sought to clarify parties’ rights under a contract, an agreement or a statute, or in accordance with a right to have a determination of status.”[^184]

[337] The granting of a declaration does not require that an injury or wrong has been committed, or even threatened.[^185] Rather, Chief Justice Dickson explained in Solosky v. R. that declaratory relief is in the nature of an advance ruling “neither constrained by form nor bounded by substantive content, which avails persons sharing a legal relationship, in respect of which a ‘real issue’ concerning the relative interests of each has been raised and falls to be determined.”[^186]

[338] In Ewert v. Canada, the Supreme Court recently synthesized the four requirements that will inform the court’s exercise of discretion to grant declaratory relief: “A court may, in its discretion, grant a declaration where it has jurisdiction to hear the issue, where the dispute before the court is real and not theoretical, where the party raising the issue has a genuine interest in its resolution, and where the respondent has an interest in opposing the declaration sought.”[^187]

[339] I will apply these principles in consideration of whether it is appropriate to exercise my discretion to issue any of the declaratory relief sought by the Plaintiffs.

B. Analysis – Have the Plaintiffs Established the Basis for Declaratory Relief

[340] Three of the four requirements for the issuance of declaratory relief were readily established and effectively uncontested in this trial. I am satisfied that I have jurisdiction to hear this dispute representing determination of easement rights between neighbouring landowners in Ontario. No party raised any issue of excess of jurisdiction and I have not identified any.

[341] The parties raising the issues in this action, Pacific Mall and YRCC 890, have “genuine interest in its resolution”. This is uncontested and incapable of doubt from their ownership interest in the Pacific Mall Easement, their compliance with the Market Village Easement, and their operation of the Pacific Mall Centre on the Composite Site.

[342] The responding defendants, Market Village Inc. and Remington Inc., whom I have referred to collectively as “Market Village”, have “an interest in opposing the declaration sought”. This is clear from their Amended Statement of Defence, wherein they deny the declarations sought by the Plaintiffs. Further, it is evident from their conduct over the last ten years, wherein they have consistently sought to redevelop the Market Village Centre and have not found a way to do so collaboratively with the Plaintiffs due to the persistent dispute concerning the nature and effect of the Reciprocal Easements. I have no doubt that Market Village has an interest in opposing the declarations sought by the Plaintiffs.

[343] This analysis is different in the case of the Kennedy Holdings. They did not join into the debate regarding the nature and effect of the Reciprocal Easements or the declarations sought by the Plaintiffs, pleading instead that they were not necessary and proper parties to this action and that any easements “are in writing and speak for themselves”. Kennedy Holdings submitted consistently throughout the trial, and repeatedly at every opportunity that called for their submission, that they had no interest in the declarations being sought by the Plaintiffs. They did not stray or waiver from this position, at any time.

[344] The Kennedy Holdings’ position followed the Plaintiffs’ decision to focus this trial on only two of the many easements affecting the Composite Site. While Kennedy Holdings is a neighbour on the Composite Site and a party to other easements with each of Market Village and Pacific Mall, Kennedy Holdings did not grant or receive rights under the Reciprocal Easements. Accordingly, I find that the Kennedy Holdings was not a “proper contradictor” in the declarations sought by the Plaintiffs, in that it did not have a “true interest” in opposing the declarations sought, in accordance with the principles set out in the case law[^188] and, in fact, did not oppose the declarations at trial. I will address this further when I turn to the issue of whether Kennedy Holdings was a necessary and proper party at trial.

[345] Continuing then with my analysis of whether the Plaintiffs have established that declaratory relief should be issued against Market Village, the operative question was whether the dispute between the Plaintiffs and the Market Village is “real and not theoretical”. The Court of Appeal explained that the court does not grant declarations as “abstract propositions”.[^189] Declaratory relief is withheld where it cannot be meaningfully acted upon by the parties, and thereby provides no utility.[^190] Rather, for declaratory relief to be available, the declaration must have practical utility, meaning that it will settle a ‘live controversy’ between the parties.[^191]

[346] I have determined that the dispute between the Plaintiffs and Market Village is real, and thereby satisfies the requirements for the exercise of my discretion to grant declaratory relief. I will explain why.

[347] First, the dispute between the parties has been festering unresolved for almost a decade and has persisted since the collapse of their joint initiatives in 2011, spawning and perpetuating this litigation since 2016. Their dispute promises to continue unabated, with uncertainty to each party. Market Village demolished the Market Village Centre in 2018 and has since possessed vacant land that sits inventoried awaiting re-development. Its stalled Site Plan Application awaits resolution of the MV Site Plan Condition which depends on resolution of the competing issues between the parties on the Reciprocal Easements. Pacific Mall and Market Village have a real dispute that can be assisted by declarations of their entitlements under the Reciprocal Easements.

[348] Second, I am satisfied that certain of the declaratory relief sought by the Plaintiffs can provide practical utility to the Plaintiffs and to Market Village. I accept Market Village’s submission that to do so, the declarations must be specific and detailed to the precise aspect of the MV Development Project that I find in contravention of the Reciprocal Easements.

[349] Last, it is immaterial that the MV Development Project has not yet been constructed and that Market Village has not yet sustained actual damages. In Brown v. Hanley, the Court of Appeal rejected the submission that declaratory relief concerning the legality of certain provisions in the Constitution were unavailable because the respondent failed to plead the infringement of any individual right or entitlement. The existence of an actual or realized injury or wrong would not prevent the issuance of declaratory relief where the four-part test set out in Ewert and Solosky is otherwise established.

[350] I am bolstered in my determination that declaratory relief is appropriate in this case by prior courts that have found that declarations were particularly useful in disputes involving real property, where the criteria for their granting was established.[^192] In Yasin, the Court of Appeal observed that declaratory relief is normally sought to clarify a party’s rights under a contract or an agreement, in this case an easement agreement, or determination of status, in this case in shared use of land as between a servient and dominant owner.[^193] Judicial intervention through declaratory relief in real property cases is especially useful where, like here, the absence of a declaration regarding a proprietary right could result in continued, protracted litigation with resultant inefficiencies and escalated costs.

C. Summary of Conclusions

[351] Any declaratory relief must be based on my determinations which, for convenience, I summarize as follows:

(a) The Market Village Easement and the Pacific Mall Easement are express, permanent grants over the servient lands to which they apply. These Reciprocal Easements apply equally to all Parts of the servient lands as if a separate easement were registered against each such Part.

(b) The Market Village Easement granted to Market Village Inc. the right to “access, ingress, egress and free passage” over all the PM Servient Land, and the right to park on the specific Parts designated for parking, and the Pacific Mall Easement granted to Pacific Mall Inc. a matching right to “access, ingress, egress and free passage” over all the MV Servient Land, and the right to park on the specific Parts designated for parking.

(c) The extent of use of the Reciprocal Easements is based on the nature of the commercial retail uses present at the time of their grant in 1994 but is not limited to the uses and intensity that existed in 1994, provided that the degree of intensification does not substantially interfere with or overburden the Reciprocal Easements.

(d) The Reciprocal Easements prohibit the erection of any barriers or the creation of any obstacles that deny the dominant owner the reasonable exercise of the Right of Access or the Right to Park, which are subject to the servient owner’s right to relocate the configuration of either the drive aisles or the parking on the surface of the servient land.

(e) The MV Development Project would involve construction on MV Servient Land and would result in a loss of surface parking spaces on MV Servient Land, relocation of internal drive aisles, intensification of use and modifications to the Municipal Access Points.

(f) The construction proposed by Market Village on MV Servient Land, with resultant elimination of surface parking spaces to which Pacific Mall has easement rights as dominant owner, cannot be validated and thereby unilaterally advanced on the basis of the Relocation Clause.

(g) The Pacific Mall Easement would be breached by the MV Development Project to the extent of the construction proposed on MV Servient Land, which would substantially interfere with both the Right to Park and the Right of Access provided by the Pacific Mall Easement.

(h) The MV Development Project would cause overburdening of the Market Village Easement to the extent of the construction proposed on MV Servient Land, because the resultant reduction in surface parking will result in excessive demands on the remaining surface parking on PM Servient Land beyond those contemplated at the time of the grant of easement. Had it been necessary to determine whether the MV Development Project would overburden access and free passage on the PM Servient Land, I would have determined that the MV Development Project would not overburden the Right of Access granted by the Market Village Easement.

(i) In light of my determination that the construction planned by the MV Development Project on the MV Servient Land would contravene the Pacific Mall Easement, and as the issue of nuisance and trespass was predicated on construction on the MV Servient Land and its collateral impact on contiguous Pacific Mall Land, the claim for declaratory relief based in nuisance or trespass was rendered redundant.

[352] These determinations support the issuance of declaratory relief consistent with my finding that the declarations will provide practical utility to the neighbouring landowners. However, I have determined that the declaratory relief sought by the Plaintiffs was too broad. I will explain why.

D. Analysis - The Declaratory Relief

[353] The declarations sought by Pacific Mall pertained to all the construction involved in the MV Development Project. Additionally, that all the MV Development Project substantially interfered with the Pacific Mall Easement; unlawfully and substantially overburdened the Market Village Easement; would exceed any right that Market Village had to relocate the configuration of the driveways and surface parking spaces, and; would constitute a nuisance and a trespass onto Pacific Mall Land. I found that the MV Development Project would substantially interfere with the Pacific Mall Easement and would overburden the Pacific Mall Easement to the extent of the construction proposed on the MV Servient Land. I make no determination regarding whether a reformulated development proposal designed to be built entirely within the Market Village Building Envelope, and without any construction on MV Servient Land, would substantial interfere with the Pacific Mall Easement or overburden the Pacific Mall Easement. No such alternative development proposal was presented in evidence.

[354] In declining to make any declarations on alternative development initiatives that Market Village may advance within the historic Market Village Building Envelope, or subsequent phases of the MV Development Project, such as the possible residential condominium development at the south-east corner of the Composite Site on MV Servient Land, I am mindful of the principle set out by the Court of Appeal in 1472292 Ontario Inc. (Rosen Express) v. Northbridge General Insurance Company: a declaration is only to be issued in an existing dispute and is “not to be given as an opinion on a hypothetical set of facts, or as an academic exercise to settle what may happen in the future.”[^194]

[355] Second, certain of my findings are contrary to certain of the declarations sought by the Plaintiffs. This includes the declaration sought by the Plaintiffs that the use of the Reciprocal Easements is limited to those that were present at the time of their grant in 1994, thereby limiting Market Village to a re-development that is generally of the size and configuration of the Market Village Centre as it existed in 1994 as opposed to the much larger proposed Remington Centre. I dismiss the Plaintiffs’ request for this declaration on the basis of my determination that the parties’ use of the Reciprocal Easements is not limited to the uses or intensity of use present at the time of their grant in 1994, provided that the degree of intensification does not substantially interfere with or overburden the Reciprocal Easements. I found that the MV Development Project would substantially interfere with and overburden the Reciprocal Easements by proposing to build on the MV Servient Land.

[356] Last, I have determined that it is not necessary to make any determination regarding whether the MV Development Project would constitute a nuisance or trespass on the Pacific Mall Land. Accordingly, I dismiss the Plaintiffs’ request for a declaration to this effect.

[357] On the basis of my determinations, and on my conclusion that declaratory relief based on these determinations can provide practical utility to the Plaintiffs and to Market Village, I grant the following declarations:

(a) The changes planned by and the attendant work of Market Village, which changes are more specifically set out in the MV Development Project, would substantially interfere with and thereby breach the easement on the MV Servient Land granted by the Pacific Mall Easement, to the extent that the MV Development Project involved changes and attendant work on the MV Servient Land;

(b) The MV Development Project would exceed any right of Market Village under the Pacific Mall Easement to relocate the configuration of the driveways and parking spaces subject thereto, to the extent that the MV Development Project involved changes and attendant work on the MV Servient Land;

(c) The MV Development Project would overburden the Market Village Easement to the extent that the MV Development Project involved changes and attendant work on the MV Servient Land;

(d) The MV Development Project would result in a breach of the covenants and agreements contained in the Pacific Mall Easement not to erect any barriers or to create any obstacles to the free passage of authorized customers, invitees, licencees, employees and agents of the Plaintiffs to pass freely to and from each of the respective lands and buildings of the Plaintiffs and Market Village Inc, for the purposes of permitting them to carry on usual shopping activities and commercial and retail activities, to the extent that the MV Development Project involved changes and attendant work on the MV Servient Land.

[358] The remainder of the declaratory relief sought by the Plaintiffs is dismissed, for the reasons stated, as overly broad, unestablished in fact or in law, or of no practical utility to the parties.

VIII. HAVE THE PLAINTIFFS ESTABLISHED THE BASIS FOR THE ISSUANCE OF PERMANENT INJUNCTIVE RELIEF?

[359] The Plaintiffs sought the issuance of permanent injunction to restrain the Market Village Defendants from proceeding with the MV Development Project in contravention of any declarations that I will issue. They submitted that a permanent injunction is a presumptive remedy in cases where substantial interference with property rights have been found. The Market Village Defendants contended that a permanent injunction is unnecessary and could unduly complicate any further development initiatives that the parties may seek to advance consistent with my declarations. They urged me to exercise my discretion to not grant the injunctive relief sought by the Plaintiffs.

[360] The test for a permanent injunction is inherently different from the test for an interlocutory injunction, as explained by the Ontario Court of Appeal in 1711811 Ontario Ltd. (Adline) v. Buckley Insurance Brokers Ltd.[^195] Permanent injunctive relief can only be rendered after final adjudication. This means that considerations of irreparable harm and balance of convenience, so essential to the test set out for injunctive relief set out in RJR-MacDonald Inc. v. Canada (Attorney General),[^196] are not relevant to the granting of a permanent injunction even though, as the Court of Appeal explained, “some of the evidence that a court would use to evaluate those issues on an interlocutory injunction might also be considered in evaluating whether the court ought to exercise its discretion to grant final injunctive relief.”[^197]

[361] The granting of permanent injunctive relief is discretionary, issued when found by a court to be an appropriate remedy after determination of the legal rights between the parties.[^198] There are instances where the issuance of a permanent injunction, after final determination of legal entitlements is necessary to prevent appropriation of private property rights, including easements. The Plaintiffs relied heavily on Devaney,[^199] where the Court ordered the removal of an obstruction on an easement, and Canadian Pacific Ltd. v. Paul, where the Supreme Court stated that “[g]enerally speaking, an injunction will issue to restrain an interference or anticipated interference with a person’s rightful enjoyment of the use of his land”.[^200]

[362] I have concluded that a permanent injunction would not be an appropriate remedy and I thereby dismiss the Plaintiffs’ request for this relief. I will explain why.

[363] Unlike those instances in which the steps that were found to breach an easement right had already been taken, and the injunctive relief was restorative, here the breach of the Reciprocal Easements is prospective. There is nothing to undo. There has not been any substantial interference or overburdening as the construction on MV Servient Land planned by the MV Development Project and found to contravene the Reciprocal Easements, has not yet been initiated.

[364] Further, here there are three structural safeguards that prevent the construction on MV Servient Land as part of the MV Development Project independent of the issuance of a permanent injunction. First, as part of the 2018 Motion Settlement Terms, Market Village agreed not to trespass on, work upon, or access Pacific Mall Land to effect development or re-development of the Market Village Centre without Pacific Mall’s express written consent. Second, the MV Site Plan Condition prevents the MV Site Plan Control Agreement from being issued absent “arrangements satisfactory to the owners of the Pacific Mall and Kennedy Corners”. Third, by reason of the absence of compliance with the MV Site Plan Condition, Market Village cannot obtain approval of its Site Plan Application and thereby cannot obtain a building permit to begin construction, in any event. I see no reason to pile a permanent injunction on three structural restrictions already in place that have the effect of achieving compliance with the Reciprocal Easements in a manner consistent with my determinations.

[365] Pacific Mall’s submission that a permanent injunction was required to ensure compliance by Market Village with my declarations implied that Market Village had a propensity toward, or history or non-compliance. I saw no evidence of this. There is no evidence of non-compliance by Market Village with the 2018 Motion Settlement Terms. There is no record of breach by Market Village of agreements pertaining to the common integrated uses of the Composite Site, apart from this dispute regarding the nature and effect of the Reciprocal Easements. Further, I accept Mr. Peddigrew’s sworn statement that Market Village will not proceed with construction on Easement Land in a manner contrary to this Court’s declarations.

[366] I also accept Market Village’s submission that a permanent injunction could be counter-productive and unhelpful to the parties. The declarations are issued to clarify the nature and scope of the parties’ easement rights, in the context of a development project that has undergone at least four major re-formulations over the span of more than a decade and may undergo several more as Market Village searches for the optimum land development project consistent with the Reciprocal Easements. The critical element of the MV Development Project that offended the Reciprocal Easements was its construction outside the current Market Village Building Envelope and on MV Servient Land. A permanent injunction could cause confusion or uncertainty in future Market Village development proposals that do not involve construction on MV Servient land. This is particularly the case in relation to municipal authorities and agencies considering Site Plan Applications and development initiatives who would not have the parties’ intense understanding of the findings and determinations that resulted in any such permanent injunctive relief.

[367] A permanent injunction to restrain construction on MV Servient Land as provided by the MV Development Project could be confused for a permanent injunction preventing Market Village from proceeding with any development project on the Market Village Land, which is not my finding. I am not prepared to enjoin a development concept when this action called for an analysis of only a single proposal’s impact on the Reciprocal Easements. I do not foreclose the possibility that redesigned into a project that does not involve construction on MV Servient Land, other elements of the MV Development Project may be capable of realization in harmony with the Reciprocal Easements. This is reason enough not to grant the permanent injunctive relief.

[368] I am guided by the principle stated by the Court of Appeal in 1711811 Ontario Ltd. that injunctive relief is onerous and “is available only when truly necessary to ensure that a party is not deprived of his or her rights”.[^201] Based on the reasons set out, I find that permanent injunctive relief is not necessary to ensure that the Plaintiffs have the benefit of their rights under the Reciprocal Easements, and is therefore denied.

[369] The dismissal of the Plaintiffs’ claim for permanent injunctive relief is without prejudice to the Plaintiffs’ right to seek remedies in the event of non-compliance with the declaratory relief that has been granted.

IX. WERE KENNEDY HOLDINGS NECESSARY AND PROPER PARTIES?

[370] The Plaintiffs did not seek any relief against Kennedy Holdings. This was clear from the Plaintiffs’ Amended Statement of Claim which, apart from identifying Kennedy Holdings, pleaded solely that Kennedy Holdings were “necessary and proper parties to this proceeding”.[^202] In their opening statement at trial, the Plaintiffs stated that they did not seek any relief against Kennedy Holdings other than an Order that they were bound by any declaratory relief.

[371] The Statement of Defence delivered by Kennedy Holdings was a model of brevity in its four succinct, single-sentence paragraphs.[^203] The totality of Kennedy Holdings’ pleading was that they were not necessary or proper parties to this action, that the easements in issue are in writing and speak for themselves, and that the action should be dismissed as against them, with costs.

[372] Kennedy Holdings did not call any evidence at trial. The Plaintiffs adduced no evidence that Kennedy Holdings were called upon to defend. Kennedy Holdings spent the entire trial monitoring to assess whether a claim would be advanced against them in this action. None was.

[373] The Plaintiffs’ position was that they were required to join Kennedy Holdings to this action in accordance with Rule 5.03(1): “Every person whose presence is necessary to enable the court to adjudicate effectively and completely on the issues in a proceeding shall be joined as a party to the proceeding.” The Plaintiffs contended that the joinder of Kennedy Holdings was necessary to allow for an effective and complete adjudication of the issues raised by this action, and to thereby bind them to any declaratory relief. Kennedy Holdings’ position was that they were unnecessary parties, improperly implicated.

[374] In Ontario Federation of Anglers and Hunters v. Ontario (Minister of Natural Resources and Forestry), Molloy J. held that to determine whether a person is a “necessary party”, the court must assess whether the rights of that person would be affected by the outcome: whether they are “likely to be affected or prejudiced by the order being sought”. [^204] If so, they are entitled to be added. The Court held that the purpose of joining “necessary parties” under Rule 5.03 is to ensure that all parties whose rights would be affected by an adjudication are before the Court to avoid a multiplicity of proceedings and a risk of inconsistent results. This built on the finding made earlier by Hackland J. in School of Dance (Ottawa) Pre-Professional Programme Inc. v. Crichton Cultural Community Centre, that the determination of whether a party is a “necessary party” to a proceeding depends on “whether they are likely to be effected or prejudiced by a Court order that will dispose of the rights of the parties to this proceeding”.[^205]

[375] In defining the requirements for a “necessary party”, Molloy J. referred to Amon v. Raphael Tuck & Sons Ltd., wherein Lord Devlin explained that the “only reason which makes it necessary to make a person a party to an action is so that he should be bound by the result of the action, and the question to be settled therefore must be a question in the action which cannot be effectually and completely settled unless he is a party.”[^206] This principle has been cited favourably by other Canadian courts.[^207]

[376] The decision in Ontario Federation of Anglers was upheld by the Divisional Court,[^208] and was cited favourably by the Ontario Court of Appeal in Abrahamovitz v. Berens, where the Court found that a party is necessary to a proceeding if the party’s rights would be affected by the outcome, making the party’s joinder necessary to prevent re-litigation which carries the risk of inconsistent outcomes. [^209]

[377] There are two primary purposes, then, in ensuring that all parties likely to be affected or prejudiced by a Judgment are before the Court. First, it is important that the party have an opportunity to be heard, allowing for a single, comprehensive adjudication that gives rise to res judicata and thereby forecloses further proceedings on the same issue. Second, the judgment can be more efficiently enforced when all parties of interest are joined and thereby bound in the result.[^210]

[378] The Divisional Court has held that it is not essential for a party to have a direct interest in the issue being determined to be a necessary party, but that it suffices that the resolution of the dispute will directly affect the party financially or with respect to its legal rights. In Starr v. Puslinch (Township), Grange J. adopted the statement by Lord Denning that there is no absolute rule that a party must have a direct interest in the very issue to be determined, but rather it is sufficient that the “determination of that dispute will directly affect a third person in his legal rights or in his pocket”.[^211]

[379] I have applied these principles to the involvement of Kennedy Holdings in this action and have determined that they were not necessary parties. I will explain why.

[380] There are many easements between the parties involving Kennedy Holdings that impact the integrated uses of the Composite Site, including the many easements listed in footnote 56 to these Reasons. However, only two of these easements were in issue in this action, the Reciprocal Easements. Kennedy Holdings are not parties to these two easements: they are neither dominant owners nor servient owners. They do not have any rights in these easements, and it follows, in my view, that they did not have any interest in their interpretation and application.

[381] While the interpretation of the Reciprocal Easements could have an impact in the interpretation of easements owned by Kennedy Holdings on the Composite Site, no party raised any issue or led any evidence to establish that wording similar to that contained in the Reciprocal Easements is found in easements to which Kennedy Holdings are parties.

[382] Further, there was no evidence that Kennedy Holdings have any monetary interest in the dispute between Pacific Mall and Market Village concerning the Reciprocal Easements. It is true that Kennedy Holdings has an interest in how the MV Development Project impacts the commercial and retail operations at the Composite Site, as reflected by the rights that they asserted and obtained in the MV Site Plan Condition. However, this condition manifested Kennedy Holdings’ interest in the protection of their easements which, as explained, do not include the Reciprocal Easements.

[383] But perhaps most central to my determination that Kennedy Holdings were not necessary parties to this action is that I was able to assess at the conclusion of trial whether their involvement was necessary for me to adjudicate the issues in this action effectively and whether the issue so determined affected their rights. In other cases, including those that I have cited, the Court is required to assess these elements prospectively, previewing and forecasting the trial that will be conducted on the issues framed by the pleadings for determination. Here, instead, I have the benefit of dissecting the role of these parties in this action and the trial now completed and can see that their involvement was unnecessary. This trial would have taken place identically in the absence of Kennedy Holdings. There was no substantive issue that required their involvement, and they took no position on any issue, making submissions on issues of law only where helpful to do so as officers of the court.

[384] Last, Kennedy Holdings took no position and made no submissions on the terms of judgment sought by the Plaintiffs in closing submissions, other than to submit that this action ought to be dismissed as against them with costs. None of the terms of judgment sought by the Plaintiffs affected the legal rights or monetary interests of Kennedy Holdings.

[385] Based on my determination that Kennedy Holdings were not necessary parties to this action, it follows that they were not proper parties. A proper party is a party who may be made subject to the court’s determination, but whose involvement in an action is not absolutely required for the court to adjudicate the matters in issue.[^212]

[386] For these reasons, I conclude that Kennedy Holdings were not necessary and proper parties to this action.

X. DISPOSITION

[387] On the basis of the reasons set out herein, I declare as follows:

(a) The changes planned by and the attendant work of Market Village Markham Inc. and The Remington Group Inc., which changes are more specifically set out in the drawings entitled “Market Village Redevelopment” dated November 5, 2018