COURT FILE NO.: CV-20-00636972
DATE: 20210727
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Cloverdale Mall Inc. Applicant
– and –
City of Toronto Respondent
COUNSEL: Bradley Berg and Grace Smith, for the Applicant Michael J. Sims and Molly Lowson, for the Respondent
HEARD: April 26, 2021
VELLA J.
REasONS FOR DECISION
[1] This application seeks a declaration, inter alia, that Cloverdale Mall Inc.’s (“Cloverdale”) property interest in a bridge over The East Mall Road, that joins three parcels of land it owns in Toronto, gives rise to an implied easement by common intention over the airspace surrounding this bridge (the “Bridge”) and for related rights.
[2] The City of Toronto counters that Cloverdale does not have an easement over this airspace but rather only has a “mere license” that can be revoked by the City upon reasonable notice.
[3] The ancillary relief sought by Cloverdale comprises of declarations that its alleged implied easement:
(a) extends to any replacement bridge structure so long as the structure is built in substantially the same location;
(b) is capable of being transferred to, or mortgaged in favour of, a third party; and
(c) is not dependent on continued common ownership by Cloverdale of the two land parcels connected by the Bridge.
BACKGROUND
Undisputed History of the Bridge
[4] The Bridge passes over The East Mall Road, which is a public roadway on lands now owned by the City (the “East Mall Lands”). The Bridge connects two parcels of private land currently owned by Cloverdale; namely the Cloverdale Shopping Mall on the east side (the “Cloverdale Mall Lands”) and, on the west side, two adjacent parcels of land on which a gas station and a Brewers Retail outlet are located (the “Severed Lands”).
[5] The Bridge provides ease of access to Cloverdale customers who can travel by vehicle directly between the Cloverdale Mall Lands and the Severed Lands. The Bridge itself does not connect with any public highway.
[6] In 1968, the Province of Ontario (the “Province”) expropriated and took ownership of the East Mall Lands from the predecessor corporation to Cloverdale, Cloverdale Shopping Complex Ltd. (“CSCL”), to extend The East Mall Road as part of the construction of Highway 427. The expropriation of the East Mall Lands divided the shopping mall complex land into two separate parcels with the roadway in the middle (now the Cloverdale Mall Lands and the Severed Lands).
[7] On July 11, 1968, the Province registered an expropriation certificate on the East Mall Lands.
[8] As a result of the expropriation of the East Mall Lands, CSCL’s property rights to the East Mall Lands were extinguished and CSCL’s only remedy was a claim for liquidated damages.
[9] In 1969, as compensation for the expropriated lands, the Province agreed to pay for the construction of the Bridge. However, the compensation negotiation process was a long and complex one involving the Province, the former Borough of Etobicoke (“Etobicoke”), and CSCL.
[10] There appears to be no record of any agreement relating to the construction of, or any resulting property interests or rights relating to, the Bridge. If this record existed at one time, it can no longer be found. However, CSCL appears to have proceeded with construction of the Bridge before any deal was consummated with the Province. There is no record of any permits or permissions from the Province to build the Bridge – rather the construction simply proceeded.
[11] The Bridge was built by CSCL by August 1969.
[12] In August 1969, Etobicoke sought and received precedents for an agreement for the construction of a private bridge over a public highway “to protect the municipality’s position”. In September 1969, there is a record indicating that Etobicoke’s Solicitor was preparing an agreement to permit CSCL to build the Bridge “so long as Etobicoke is indemnified from responsibility”. Finally, in 1969, the Etobicoke Council approved a resolution regarding the Brewers Retail outlet and gas station, subject to “the negotiation of a mutually satisfactory agreement between the Borough and [CSCL] regarding the private grade-separation structure over the East Mall” (i.e., the Bridge).
[13] However, no such agreement or record of an agreement was located by either party.
[14] In 1972, Minutes of Settlement were executed as between counsel for the Province and counsel for CSCL setting out an agreement by the Province to pay CSCL for the construction of the Bridge as compensation for the expropriation of the East Mall Lands. However, the Minutes are silent as to the issue of ownership, maintenance, or any other rights (property or personal) associated with the Bridge. The Minutes do not address anything about the airspace surrounding the Bridge either.
[15] Pursuant to the Minutes, the parties agreed that:
(a) the Province would build an underpass under Dundas Street West to permit vehicular access to the Cloverdale Mall Lands from the southwest, with cooperation from CSCL;
(b) the Province would build a northern entrance to the Cloverdale Mall Lands;
(c) CSCL would provide the Province and Etobicoke with a full and final release of “any and all claims that [CSCL] may have by reason of the expropriation and/or changing of the road patterns … and any further claims which it may otherwise have had by reason of the new construction provided for herein”; and
(d) the parties would exchange various parcels of land, and CSCL would grant the Province a number of temporary and permanent easements for access over its lands.
[16] On July 6, 1973, the Province conveyed two strips of land to CSCL for use as private roads to CSCL. There was again no mention of the Bridge in the conveyance, but the strips of land abutted the Bridge (which was fully built by this time) and were intended by the Province and CSCL to be used to facilitate access by vehicular traffic to and from the Bridge.
[17] When the Province conveyed the East Mall Lands to Etobicoke on August 10, 1977, the order-in-council made no mention of the Bridge or an easement over Highway 427.
[18] Cloverdale is the successor to rights and obligations held by CSCL. The City is the successor to rights and obligations held by the Province and Etobicoke.
[19] The Cloverdale Mall Lands and the Severed Lands are owned, in fee simple, by Cloverdale.
[20] On both sides of the East Mall Lands, the foundations or abutments of the Bridge now rest partially on lands owned by the City and partially on lands owned by Cloverdale.
[21] There is no easement or other interest registered on title in relation to the Bridge.
The 2018 Proceedings
[22] In 2018, an application was commenced by the City to determine ownership of the Bridge and who, as between the City and Cloverdale, had the obligation to repair the Bridge. The City took the position that Cloverdale owned the Bridge and was therefore responsible for its maintenance. In the alternative, the City submitted that if there was a determination that the City owned the Bridge, then it requested a declaration that it had the right to tear the Bridge down if and when it saw fit.
[23] Conversely, Cloverdale submitted that the City owned the Bridge and, in any event, was responsible for its maintenance. Cloverdale further submitted that the Bridge was a fixture belonging to the City because the Bridge goes through the airspace over a public highway, which Cloverdale characterized as the City’s property, and the abutments of the Bridge were partially located on City-owned property.
[24] D.A. Wilson J. found in favour of the City, holding that Cloverdale is the owner of the Bridge and as such is responsible for its repair, upkeep, and maintenance: City of Toronto v. Cloverdale Mall Inc., 2018 ONSC 5748. D.A. Wilson J. found, at para. 24, that “the purpose of the bridge was to ensure that customers continued to come to the stores on the lands owned by Cloverdale after the expropriation and construction of the highway, with the resultant changes to the roadways.”
[25] D.A. Wilson J. made the following additional findings of relevance to this application:
(a) the City had no need for the Bridge and its construction was of no particular benefit to the City (at para. 16);
(b) the Bridge added no value to the lands owned by the City and was therefore not a fixture to the lands owned by the City (at para. 24);
(c) the Bridge connects two private roadways and serves the private interests of Cloverdale (at para. 21);
(d) the Minutes attempted to commit to writing the final resolution of the issues between the parties arising from the expropriation of the East Mall Lands from Cloverdale (at para. 9);
(e) the release in the Minutes indicates the intention of the parties to end all obligations between them (at. para. 19);
(f) the parties’ intention, assessed as at the date of the Minutes, was that following the construction of the Bridge and payment of the costs of construction by the Province, Cloverdale would be the owner of the Bridge in fee simple. Therefore, in accordance with “commercial sense” (as that term was discussed in Weyerhaeuser Co. v. Ontario (Attorney General), 2017 ONCA 1007, 77 B.L.R. (5th) 175), Cloverdale was responsible for the upkeep and maintenance of the Bridge (at paras. 21 and 26).
[26] No appeal was taken from this decision, and at the hearing of this application, neither party disputed the above findings. All of the evidence that was before the court on the 2018 application has been included in the present application record.
[27] The evidentiary record before me supports these findings and I adopt them.
[28] Following the 2018 application, the parties could not resolve certain implications of the 2018 decision and wrote to D.A. Wilson J. for direction. D.A. Wilson J. advised that the resolution of the issues required a fresh application.
ISSUES
[29] The central issue on this application is whether Cloverdale has an implied easement from the City in the airspace over the East Mall Lands occupied by the Bridge, or whether Cloverdale only has a mere license to occupy that airspace. This is important because if Cloverdale has an implied easement, it has greater rights to deal with the Bridge as it deems fit, including potentially selling the Bridge, subject to provincial and City regulations and by-laws. However, if Cloverdale has a license to occupy that airspace from the City, then Cloverdale has only a personal right to occupy the airspace which right cannot be conveyed or otherwise transferred or encumbered without the City’s consent. Furthermore, the City could revoke that license upon reasonable notice.
[30] Cloverdale advanced only one theory of easement at the oral hearing (abandoning the other theories of implied easement) – the doctrine of implied easement arising by common intention of the parties.
[31] To determine this matter, the court must decide at what point the common intention is to be assessed – the date of expropriation, as urged by the City, or the date of the 1973 conveyance of the two parcels of land adjoining the Bridge (the “private road lands”), as urged by Cloverdale.
ANALYSIS
[32] Cloverdale owns the Bridge in fee simple and owns the strips of land providing entry and exit to and from the Bridge by way of private roads.
[33] At the time the Bridge was built, the foundations were located on publicly owned land. However, the Bridge now sits on lands both privately and publicly owned by Cloverdale and the City, respectively. The private road lands provide direct access to the Bridge, and those lands were conveyed to CSCL in fee simple by the Province in 1973.
[34] As stated, there appears to be no surviving documentation reflecting what Cloverdale’s interest in the airspace occupied by the Bridge was intended to be – either an easement or a license to occupy the airspace at the pleasure of the City.
The Parties’ Positions
[35] Cloverdale is relying solely on the concept of implied easement by common intention. Cloverdale claims that, by virtue of the lands underpinning the foundations to the Bridge having been conveyed in fee simple to its predecessor by the Province approximately 50 years ago, there was a common intention by the parties that CSCL would have an implied easement in the airspace occupied by the Bridge over the East Mall Lands.
[36] Cloverdale submits that the date at which the common intention is to be ascertained is the date of the 1973 conveyance by the Province of the private road lands to CSCL, as a consequence of the 1972 Minutes.
[37] The City counters that if there had been an intention to grant an easement, one would have been registered on title. However, an easement was never registered. The City reasons that once the Province expropriated the East Mall Lands from CSCL, CSCL’s property rights were extinguished. There was no grant of conveyance but rather an expropriation. The compensation paid, including the cost of building the Bridge, was merely compensation for the expropriation. The only remedy that CSCL had was a claim for liquidated damages and that is what it got. Implying an easement would be unreasonable because this effectively grants a property right over land that was expropriated.
[38] The City points out that there are other access routes to the Cloverdale Mall aside from the Bridge. Today, there are three other such points of access. Therefore, the City says that the purpose of the Bridge is no longer as critical as it was in 1969.
[39] The City says that had there been a common intention to grant an easement to CSCL, this would have been done when the private road lands were conveyed to CSCL but that did not happen.
[40] Further, the City says that there was no shared intention to grant an easement because the East Mall Lands were forcibly taken from CSCL. The City claims that the Minutes were only intended to resolve matters outstanding as of the spring of 1972; namely, the appropriate quantum of costs to be paid for the construction of the Bridge.
[41] On the other hand, if a license was granted it would not be registered on title since a license is a personal right whereas an easement is a property right that runs with the “land” (or airspace in this case).
[42] The City submits that any document demonstrating the granting of a license was lost through the passage of time. Notably, both parties agree that the file located regarding this transaction is incomplete and that there may be missing documents.
[43] However, the City’s explanation does not fully account for the lack of any reference to a license in any document whatsoever in the surviving file.
[44] The City concedes that there does exist a form of easement that suits this type of situation, called a “bridge easement”. A bridge easement is essentially a property right that provides a right of way over the air space surrounding a bridge. As a property right that runs with the land, a bridge easement provides more security and freedom to the easement holder than does a license.
[45] The City also acknowledges that if the court declares that Cloverdale has a bridge easement, Cloverdale would be subject to all of the rules and regulations, including safety regulations, that all bridge owners are subject to in Toronto and Ontario. Furthermore, in the event Cloverdale wishes to engage in any repairs or improvements related to the Bridge, it would have to apply for the appropriate permits from the City. Hence, having a bridge easement does not provide a carte blanche to Cloverdale to do what it wishes with the Bridge. However, it would enable Cloverdale to sell the Bridge, which is what seems to be driving this proceeding – though hypothetically at this time.
[46] Cloverdale emphasizes that it is not seeking an easement over City-owned land, but only over the airspace occupied by the Bridge.
Does Cloverdale have an easement or license over the airspace?
[47] An easement is a permanent right annexed to one’s land to utilize another’s land in a particular manner: see Defina v. Antunes, 2006 CarswellOnt 3829 (S.C.), aff’d 2008 ONCA 710.
[48] There are four necessary components to an easement:
(a) there must be a dominant tenement that enjoys the benefit of the easement and a servient tenement that carries the burden of the easement;
(b) the easement must better or advantage the dominant land;
(c) the dominant and servient tenement cannot be owned by the same person; and
(d) the easement must be capable of forming the subject matter of a grant; that is, it must be of a type recognized by the law, be defined with adequate certainty, and be limited in scope. See Anne Warner La Forest, Anger & Honsberger Law of Real Property, 3rd ed. (Toronto: Thomson Reuters, 2020) at para. 17:20.10.
[49] On the other hand, a license is a personal right that does not, consequently run with the land. Therefore, a license, if granted, could not be conveyed, assigned, or encumbered by Cloverdale without the permission of the licensor, the City in this case. Furthermore, a license could arguably be revoked by the City, upon reasonable notice.
[50] It is reasonable to infer that the Province and Etobicoke were aware that the Bridge had already been built during the course of the compensation negotiations, and yet no mention of the Bridge was made in the Minutes of Settlement.
[51] It is also reasonable to infer that the Province was aware of this fact when it conveyed the private road lands to Cloverdale in 1973.
[52] In this matter, I find that:
(a) the Cloverdale Mall Lands, the Severed Lands, and the private road lands are the dominant tenement that would enjoy the benefit of the easement over the airspace of the Bridge, and the East Mall Lands (which property includes the airspace) is the servient tenement that would carry the burden of the easement;
(b) the easement would advantage the dominant tenement by making the Bridge commercially viable to Cloverdale, including providing ease of access between the Cloverdale Mall Lands and the Severed Lands as a matter of convenience to its customers;
(c) the dominant tenement is owned by Cloverdale and the servient tenement is owned by the City; and
(d) the easement is capable of forming the subject matter of a grant: namely, a bridge easement over airspace. Furthermore, the easement can be defined with adequate certainty as the affected airspace is limited to the airspace immediately surrounding the Bridge having regard to its use of facilitating vehicular traffic.
[53] I also find that the Bridge enhances Cloverdale’s lands by providing a convenient passageway between the Cloverdale Mall Lands and the Severed Lands. This gives rise to the conclusion that the Bridge is a fixture on Cloverdale’s lands. As a fixture, the Bridge then forms part of the land and any sale or mortgage of the land will include the Bridge unless it is specifically excluded: Warner La Forest, at paras. 20:10, 20:20.
[54] However, the real issue is whether there was an intention to create a bridge easement. The law may imply the grant of an easement to carry out the common intention of the parties. Implied easements will be granted as a matter of common sense and arise by implication to give effect to the common intention of the parties: Warner La Forest, at para. 17:20.20(d); Pwllbach Colliery Co. Ltd. v. Woodman, [1915] A.C. 634, at pp. 646-47; Richards v. Rose, (1853) 9 Exch. 218, at p. 219.
[55] The test for an implied easement by common intention is:
(a) the easement is necessary to the reasonable enjoyment of the part granted. The moving party must show that not having the easement creates considerable inconvenience to access the land: Deforest Bros. v. Tuck, 2020 ONSC 6439, at para. 53;
(b) the part of the land subject to the alleged easement must have been used by the grantor owner of the entirety for the benefit of the grant up to and at the time of the grant; and
(c) the implied easement must have been apparent at the time the land for which the easement is claimed was acquired. See Deforest, at para. 38; Roop v. Hofmeyr, 2016 BCCA 310, 88 B.C.L.R. (5th) 223, at para. 33.
With respect to the third element of this test, it must be shown that there was a common intention between the parties that makes it obvious to the court that they must have intended to have an easement granted at the time of transfer: Barton v. Raine et. al. (1980), 1980 1932 (ON CA), 29 O.R. (2d) 685 (C.A.); Deforest, at para. 42.
[56] In Craig Carter, “Easement Law for Litigators” in Justice Todd L. Archibald & Justice Randall Echlin, Annual Review of Civil Litigation 2009 (Toronto: Thomson Reuters, 2009) at p. 15, the author frames the test for an implied easement as follows:
(a) the court must ascertain the common intention of the parties;
(b) the common intention is to be inferred from the manner and purpose for which the land granted was intended by the parties to be used; and
(c) the purpose must be for a specific and definite use.
[57] In my view, the relevant time for the determination of the “common intention” of the parties is the conveyance of the private road lands by the Province to Cloverdale in 1973. At that time, the Province was obviously aware of the Bridge, and that the intended purpose of the private road lands was to facilitate access to the Bridge as a thoroughfare between the Cloverdale Mall Lands and the Severed Lands. The fact that additional access points to each of the Severed Lands and the Cloverdale Mall Lands exist does not, contrary to the submissions of the City, take away from the intended purpose of the Bridge and the private road lands. This purpose was to provide direct access for the customers of the Cloverdale Shopping Mall to the Brewers Retail outlet and the gas station as a matter of convenience to Cloverdale’s customers.
[58] When the province conveyed the private road lands, it further connected the Bridge, a fixture, to the lands owned by Cloverdale. It would run afoul of the agreed upon purpose of the Bridge – to connect the Cloverdale Mall Lands to the Severed Lands – if the City could then revoke permission at any time upon reasonable notice or otherwise fetter the intended use of the Bridge. The ease of access by the customers from the Cloverdale Mall Lands to the Severed Lands and back again would then be defeated.
[59] Therefore, when the Province agreed to convey the private road lands to Cloverdale, the Province evinced an intention by this conduct that Cloverdale would have an easement over the airspace surrounding the Bridge. This makes commercial sense in the context of this transaction: see Weyerhaeuser.
[60] In my view, this is an obvious and a necessary inference from the circumstances surrounding the 1973 conveyance, having regard to the Minutes and the intended purpose of the Bridge, which was built without objection by the Province. The Province, at minimum, acquiesced to Cloverdale’s construction of the Bridge which was done in full view and without any restrictions imposed based on the surviving evidentiary record. The Province then agreed to pay the reasonable costs of the construction of the Bridge as compensation for the expropriation of the East Mall Lands, while in effect acknowledging ownership of the Bridge to Cloverdale as a fixture to lands owned by the Province and CSCL. The Province then conveyed the private road lands to CSCL, thus cementing the Bridge as a fixture to lands owned by CSCL, acknowledging that the foundations for the Bridge now rest partially on lands owned by the City and partially on lands owned by Cloverdale.
[61] The private roads, conveyed by the Province, become meaningless if they cannot be used to access or exit the Bridge. A license is inconsistent with the conveyance of the private roads and would make no commercial sense when viewed in this context: see Beaux Properties International Inc. v. Lampe Estate, 2013 ONSC 2439.
[62] I am supported by my conclusion in the jurisprudence cited by both parties and also the following passage from Bruce Ziff, Principles of Property Law, 3rd ed. (Toronto: Carswell, 2000):
Ownership of a tract of land also confers rights in the airspace above the surface; most land would be perfectly useless if this were not so. Furthermore, rights to airspace may be severed from the surface and alienated separately. This was a position at common law and forms the basis of the strata titles enjoyed under modern condominium law. The owner in an apartment building as with the tenant in an apartment building possesses a slice of the stratosphere. However, contrary to the maxim the property rights to a column of air do not reach forever upwards; far from it. Instead they are limited on a way that strikes a balance between the realistic needs of the landowners and those of the public for whom the air is common property. The owner of the surface holds an entitlement to the airspace up to a certain height above the ground – that which can be used or occupied. (cited in Toronto (City) v Municipal Property Assessment Corporation Region 09, 2010 151281 (ON ARB))
[63] The Bridge, as a fixture to the land owned by Cloverdale, occupies airspace. The limit of the airspace occupied is restricted to the physical dimensions of the Bridge.
[64] The facts in this case are somewhat novel, complicated by the passage of time and incomplete records. I find that in the circumstances of this case, the requisite common intention to create an easement crystallized upon the conveyance of the private road lands in 1973. This is in harmony with the expropriation and resulting Minutes, as well as with the unchallenged findings of D.A. Wilson J.’s 2018 decision.
[65] I therefore find that Cloverdale has an implied easement over the airspace surrounding the Bridge that runs with the land and direct the Registrar to register the easement on Cloverdale’s title.
[66] I confirm that Cloverdale owns the Bridge and declare that it is a fixture to Cloverdale’s lands. It follows that, by virtue of Cloverdale’s ownership of the Bridge and my finding that the Bridge is a fixture to Cloverdale’s land, the Bridge can be dealt with by Cloverdale as owner, subject to any provincial or municipal rules and regulations governing all bridge owners and the terms of the easement itself.
[67] I did not receive adequate submissions in order to determine with any precision what specific rights Cloverdale has as a result of my findings of an implied easement and the Bridge as a fixture to Cloverdale’s lands, and therefore I decline to make any further ancillary declarations. Such submissions may have to be guided by the terms of the implied easement itself.
[68] In the event that the parties require assistance concerning the terms of the easement to be registered on title, they may request a case conference with me.
[69] In the event that costs cannot be agreed upon, Cloverdale may deliver its written submissions, by August 13, 2021, and the City may deliver its responding submissions by August 20, 2021. The submissions are not to exceed three pages double spaced and are to be delivered to my judicial assistant and uploaded to CaseLines with the cost outlines.
Justice S. Vella
Released: July 27, 2021
COURT FILE NO.: CV-20-00636972
DATE: 20210727
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Cloverdale Mall Inc. Applicant
– and –
City of Toronto Respondent
REASONS FOR DECISION
Vella J.
Released: July 27, 2021