BARRIE COURT FILE NO.: CV-21-254
DATE: 20220802
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
GREG PROPHET and NORMA JEAN PROPHET
Plaintiffs
– and –
CORPORATION OF THE TOWNSHIP OF TAY
Defendant
William Leslie, for the Plaintiffs
Sarah Hahn, for the Defendant
HEARD: April 14, 2022
REASONS FOR DECISION
DE SA J.:
Overview
[1] The subject of this action is the property in Waubaushene, Ontario, and bearing the legal description PART 1, PLAN 1537, TOWNSHIP OF TAY (hereinafter “the Property”).
[2] The Plaintiffs have brought this Claim against the Corporation of the Township of Tay (the “Defendant” or the “Township”) seeking damages arising out of a road which was placed over the Property in 1986.
[3] On May 7, 2021, the Plaintiffs served upon the Township an Amended Statement of Claim.
[4] On May 18, 2021, the Township served upon the Plaintiffs a Statement of Defence.
[5] The Plaintiffs’ Claim sets out that they seek damages in the sum of $2,000,000.00 plus punitive damages in the amount of $150,000.00, along with an Order directing that the municipal road be moved and the Plaintiffs’ lands restored.
[6] The damages claimed arise from a municipal road called “Albin Road” which was constructed, paved and opened by the Township over a portion of the Plaintiffs’ property in the year 1986.
[7] The Plaintiffs ask to have the matter proceed to trial. The Plaintiffs are seeking an Order compelling the Defendant to deliver its Affidavit of Documents so they can proceed to examinations for discovery.
[8] The Defendant refuses to deliver its Affidavit of Documents and proceed to examinations for discovery until the issue of venue has been decided. The Defendant takes the position that the correct venue for the Plaintiffs to bring a claim is the Ontario Land Tribunal for the issue of monetary compensation only under the Expropriations Act, R.S.O. 1990, c. E.26.
[9] The Defendant’s motion seeks an Order dismissing the action. The Defendant takes the position that the action should be dismissed for any of the following reasons:
a) The Plaintiffs have had knowledge of the cause of action for approximately 36 years and are statute barred from bringing this action;
b) A similar action was brought by the Plaintiffs against the Township in 2013. The Plaintiffs now seek to reignite this previous claim or begin a second claim for the same subject matter through this action (res judicata);
c) Finally, the Plaintiffs are prohibited from bringing a claim for damages arising out of the placement of the road pursuant to section 65(1) of the Municipal Act, 2001, S.O. 2001, c. 25, which deems this an expropriation.
[10] I agree with the Defendant. In my view the appropriate venue for this matter to proceed is the Ontario Land Tribunal.
[11] The action is dismissed. The reasons for my decision are outlined below.
Summary of Facts
The Property
[12] The Property was purchased by the family of the Plaintiffs in or around 1903. Archie McLeod (hereinafter “McLeod”), the grandfather of the Plaintiffs, built a cottage at the Property in or around 1984.
[13] McLeod intended to build a boathouse on the Property, at the shoreline, on what is today defined as PART 1, PLAN 1537, TOWNSHIP OF TAY, but did not as a result of his failing health.
[14] In or about 1986, the Defendant Township cleared vegetation and then installed large boulders and other fill in the area where the boathouse was to be constructed. This raised the surface grade approximately 10 feet and impeded access of McLeod, and his family, to the water. This was done without notice to McLeod or his family.
[15] As a result of concerns raised by McLeod, in 1993, the Defendant removed the boulders, adjusted the grade, and installed a ramp to provide McLeod and his family with access to the water.
[16] In 2010, the Defendant, again without notice, reinstalled the boulders that it had removed in 1993, and removed the ramp that it had constructed in 1993.
The Township’s Encroachment on the Plaintiffs’ Property
[17] Until 1986, the southeast portion of Albin Road stopped at the CNR tracks. The Township allowed owners of newly constructed cottages and year-round residents access to their property south of the railroad at the Albin Road, Concession 9 access by allowing the owners to drive along the shoreline in front of the properties.
[18] The Defendant started to grade the shoreline a few times per year, but it was never winter maintained until the winter of 1984. Before the winter of 1984, cottagers simply parked their cars and walked to their properties.
[19] In June 1986, the Defendant commenced clearing brush and constructing a road to join the north end of Tay Concession 10, at the west end of Albin Road. This new road was built outside the road allowance and encroached over the Property. The road constructed in June 1986, sits between the north and south property stakes of the Property. The road in question was opened by by-law on March 12, 1987.
[20] At no time did the Township notify the Plaintiffs, or McLeod, or any other member of their family, of its intention to build a road or take appropriate steps to expropriate part of the Property, on which it was intending to build a road.
[21] Further, at no time did the Defendant ask for permission to build a road or even go onto the Property.
[22] The road built in 1986 is in a different location than the previous travelled portion of the shoreline. The by-law which was eventually created by the Defendant on March 12, 1987, approximately a year later, does not accurately describe the size and/or location of the current Albin Road.
[23] The Plaintiffs anticipated that the Defendant was building the road on the south side of the southern-most perimeter of the Property given that it had not been advised of any encroachment.
[24] The Township maintains that the roadway was built on the Plaintiffs’ lands by mistake. The Defendant believed it built the roadway on the existing road allowance.
The Encroachment on the Plaintiffs’ Land is Discovered by the Township
[25] The Plaintiffs predecessors discovered and knew about the opening of Albin Road on these lands in 1986. In the years following 1986, McLeod and his family raised their grievances related to the Defendant’s failure to follow the proper policies related to road construction and expropriation.
[26] In May, 2010, a survey was completed by Preston Nicholson Harvey land surveyors which sets out the location of Albin Road in relation to the Plaintiffs’ lands. It was only after the survey was completed that the Township realized the roadway not only encroaches, but was built entirely over Part 1, Plan 1537 of the Property (the Plaintiffs’ lands.)
[27] The Plaintiffs, through their Amended Statement of Claim, acknowledge that the expropriation occurred in 1986. Specifically, the Statement of Claim states that “[f]rom the Defendant’s wrongful act in 1986, the Plaintiffs have continually protested against the Defendant Township, asserting their ownership rights and requesting revocation of the Defendant’s egregious actions, which the Defendant refused to do or take any remedial steps to correct its wrongdoing”.
[28] In June, 2002, the Defendant tried to move Albin Road to the CNR trail, but this idea was rejected by the Province of Ontario.
[29] The parties have exchanged correspondence regarding efforts to resolve this matter, including relocating Albin Road, where it engulfs the Plaintiffs’ property. This action was commenced because discussions between the parties broke down.
The 2013 Claim
[30] On June 10, 2013, the Plaintiffs served a claim upon the Township for the improper expropriation of their property that is the subject matter of this Claim.
[31] On September 3, 2013, Deputy Judge Levinson issued an Endorsement requiring the Plaintiffs to pay costs to the Township within 15 days, failing which the action would be dismissed.
[32] The Plaintiff, Greg Prophet, was self-represented and maintains that he did not have a strong understanding of the legal process. While attending a settlement conference, he failed to stand when called. He understands that he was told that he had to pay $100.00 to the Defendant which he did.
[33] No evidence was called and there was no submissions made regarding merits and no findings were made. The matter was not decided at trial.
Issues
[34] The Defendant takes the position that there are three reasons why the Court must dismiss this action:
i. The Plaintiffs are out of time to bring an action;
ii. The Claim is res judicata and cannot be brought again;
iii. This Court is the incorrect venue and does not have jurisdiction.
Analysis
Are The Plaintiffs out of time to bring an action?
[35] The Defendant takes the position that the Plaintiffs are statute-barred from bringing this action as they are well past any limitation period having known about the cause of action for 36 years.
[36] Section 4 of the Limitations Act, 2002, S.O. 2002, c.24, Sched. B, provides that a claim cannot be brought two years after the day on which the claim was discovered.
[37] Section 5 of the Limitations Act, 2002, provides that a claim is discovered on the day the person with claim first knew that the loss had occurred, or the day on which a reasonable person with the abilities and in the circumstances first ought to have known of the matters referred to.
[38] Well over two years have elapsed since the claim was discovered. The Plaintiffs’ own Amended Statement of Claim admits that they have known about Albin Road’s encroachment onto their property since 1986.
[39] Pursuant to section 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15, an action to recover land cannot be brought ten years after the day at which the right to make such entry or distress, or to bring such action, first accrued.
[40] Over ten years have elapsed since the time to bring such an action.
[41] The Defendant points out that the Expropriations Act does not provide a limitation period in which to bring a claim for value of the property expropriated, and although the Plaintiffs are statute-barred from bringing a claim to the Superior Court, there is no such limitation at the Ontario Land Tribunal or through the Expropriations Act. Accordingly, the Plaintiffs will not be precluded from relief by way of the Limitations Act.
[42] The Plaintiffs, in response, submit that the roadway is an ongoing trespass.
[43] According to the Plaintiffs, this case involves a situation of continuous acts or an ongoing series of acts, as contemplated by section 15(6) of the Limitations Act, and is appropriate for an extended or even an indefinite limitation period. Section 15(6) provides:
Day of occurrence
(6) For the purposes of this section, the day an act or omission on which a claim is based takes place is,
(a) in the case of a continuous act or omission, the day on which the act or omission ceases;
[44] In Hare v. Hare, 83 0.R. (3d) 766(C.A.), the Court of Appeal explained at para. 68:
While I agree that the legislation was designed to create uniform and simplified limitation periods generally, the new Act provides for special situations in which claims have no limitation periods. First, it would seem that the whole of s. 15(6) is devoted to situations where the limitation period could remain open indefinitely. Sections 15(6)(a) and (b) create the possibility for indefinite limitation periods where there is a continuous act or omission and a series of acts or omissions, as the ultimate limitation period in such situations will never begin to run as long as the act or series of acts continues. While paras. (a) and (b) concern matters that are different in concept, they do provide for indefinitely existing liability and the new Act deals with them in the same subsection as demand obligations. [Emphasis added.]
[45] The Plaintiffs point out that over the years, the parties have engaged in various discussions and attempts to resolve this matter. The Defendant has altered the installations on various occasions. The Plaintiffs relied upon the promises, assurances and actions of the Defendant in continuing to attempt to resolve the matter rather than seeking other remedies, such as commencing an action.
The Plaintiffs argue that estoppel prevents the Defendant from now attempting to prevent the action from being heard at trial based on a limitation period. As the Court explained in 1318847 Ontario Ltd. v. Laval Tool & Mould Ltd., 2015 ONSC 2664, at para. 306:
If a potential defendant enters into settlement negotiations with a potential plaintiff, before a proceeding is commenced, accepts liability and deliberately leads the potential plaintiff to believe that negotiations will continue until the matter is settled, notwithstanding the expiration of the applicable limitation period, that potential defendant may be estopped from relying on the expiration of the limitation period if a proceeding is ultimately brought.
[46] The Plaintiffs also rely on the comments of the Court in Brusco v. Inter-City Truck Lines (Canada) Inc., 1988 Carswell Ont. 733, at paras. 23-24, where the court noted that the defendant was aware of the limitation and had an obligation to warn the plaintiff of the approaching limitation:
I find that on the facts of this case that what proceeded between the plaintiff and Mr. Koc was more than just the normal process of negotiations. From reading the evidence, it is reasonable on a balance of probabilities to infer that the defendants had admitted liability and it was only a matter of finalizing the actual amount of payment to the plaintiff. In other words, based on the facts, there are the essential ingredients of promissory estoppel, namely, promise and reliance. Mr. Koc was in a position of knowledge. Mr. Brusco had no solicitor, and I find as a fact that he was relying on Mr. Koc.
In all of the circumstances, there was an obligation upon the defendant insurance company’s representatives to warn Mr. Blusco of the danger of the expiry of the limitation period.... In no way are the defendants taken by surprise, nor have they been deprived of an effective opportunity to investigate the plaintiffs case by the lapse of time.
[47] As well as the decision in Suppa Construction Ltd. v. Etobicoke (City), 1992 CanLII 7529 (ON SC), [1992] 10 OR (3d) 430 (S.C.), at para. 25:
I find, upon reviewing the documents and the facts, that there clearly was a course of negotiations which was entered into by the parties which had the effect of leading the plaintiff to suppose that the strict legal rights and the limitation period would not be enforced, and that bona fide negotiations would continue until the matter was settled. The promises to pay, and the past relationship of the parties, amounted to an implied waiver of the limitation period on the part of the defendant.
[48] The Plaintiffs point out that courts have held that cases involving discoverability issues related to a limitation period involve questions of fact and are not appropriate for summary judgment: Collins v. Cortez, 2014 ONCA 685, at para. 13: Sheeraz v. Kayani, 2009 CanLII 47571 (ON SC), [2009] 99 OR (3d) 450, at para. 58; Huang v. Mai, 2014 ONSC 1156, 119 OR (3d) 117.
[49] The Plaintiffs argue that the Defendant’s motion is a disguised summary judgment motion on the issue of the limitation period. The Plaintiffs submit that the Defendant has not met the test for summary judgment.
[50] In this case, I agree with the Plaintiffs that in the absence of section 65(2) of the Municipal Act, section 15(6) would apply.
[51] However, if section 65(2) of the Municipal Act applies here, the Property at issue would have been deemed expropriated in 1986. In my view, it is more appropriate to deal with the limitation issue in the context of section 65(2) of the Municipal Act.
Is the Matter Res Judicata?
[52] In the alternative, the Defendant submits that the doctrine of res judicata applies.
[53] As outlined above, Greg Prophet brought an action for the same cause of action against the Township of Tay on June 10, 2013 in the Barrie Small Claim Court, Action No. SC-13-00001002-0000 for the amount of $22,105.50.
[54] A settlement conference was held on September 6, 2013 where both Plaintiffs were in attendance. The deputy judge’s Endorsement noted Greg Prophet’s “failure to acknowledge the authority of the court and persistent failure to do so”.
[55] The matter was stayed and the Plaintiffs were ordered to pay costs of $100 to the Township within 15 days after which his action would be dismissed.
[56] Subsequently, the Plaintiffs commenced this action by issuing a Statement of Claim on February 19, 2021.
[57] The Plaintiffs are now attempting to relitigate this matter.
[58] The Plaintiffs acknowledge that they commenced an action in Small Claims Court in 2013. While the action was commenced by the Plaintiffs in Small Claims Court, it was never decided at trial. The hearing was a settlement conference. No evidence was called and there was no submissions made regarding merits and no findings were made.
[59] Accordingly, the Plaintiffs take the position that the small claims action was not decided and no estoppel was created.
[60] In this case, the Plaintiffs argue that preventing them from having this action heard at trial as a result of having commenced a small claims court action which he was forced to withdraw as a result of not standing up at the appropriate time during a settlement conference would give rise to an injustice: Apotex Inc. v. Merck & Co., 2002 FCA 210, at para. 30.
[61] The Plaintiffs argue that the courts retain the discretion to hear matters that are res judicata in circumstances involving an overriding question of fairness: Tuokko v. Skulstaf, 2016 BCSC 2200, at para. 51; Danyluk, at para. 62; Naken v. General Motors of Canada Ltd., 1983 CanLII 19 (SCC), [1983] 1 S.C.R. 72.
[62] In determining whether justice will be done between the parties, the Court must as a final and most important factor, stand back and, taking into account the entirety of the circumstances, consider whether application of issue estoppel in the particular case would work an injustice (Danyluk, at para. 80). It follows that any special circumstances which would give rise to an injustice would, at the least, make the Court reluctant to apply the estoppel.
[63] I agree with the Plaintiffs that the facts and the law do not support the Defendant’s argument that the small claims action should bar this action from proceeding to trial, in particular because a decision was never made on the small claims action: See Southlake Regional Health Centre v. Beswick Group Properties Inc., 2014 ONSC 1319, at para. 38.
[64] I would not give effect to Defendant’s request to dismiss the claim solely on the basis of res judicata.
Is the Ontario Land Tribunal the correct venue for this Claim?
[65] The Defendant finally argues that the matter is incorrectly before the Superior Court and must be heard before the Ontario Land Tribunal, as per section 65(1) of the Municipal Act.
[66] Section 65 of the Municipal Act provides:
Mistakes
65 (1) If, before January 1, 2003, a municipality by mistake opened a highway not wholly upon the original road allowance, the land occupied by the highway shall be deemed to have been expropriated by the municipality and no person on whose land the highway was opened may bring an action in respect of the opening of the highway or to recover possession of the land. 2001, c. 25, s. 65 (1).
Compensation
(2) The person on whose land the highway was opened is entitled to compensation in accordance with the Expropriations Act as if the land were expropriated. 2001, c. 25, s. 65 (2).
[67] The definition of highway in the Municipal Act, 2001 is defined as follows:
“highway” means a common and public highway and includes any bridge, trestle, viaduct or other structure forming part of the highway and, except as otherwise provided, includes a portion of a highway; (“voie publique”)
[68] Section 26 of the Municipal Act, 2001, further clarifies what constitutes a highway and includes all highways that existed on December 31, 2002 that have not been closed.
[69] There is no dispute that Albin Road is a “highway”.
[70] The Defendant submits that by mistake, the Township constructed and opened Albin Road on the Plaintiffs’ property, being private lands, and not wholly within the original road allowance in 1986.
[71] Upon a mistake of this nature made by a municipality before January 1, 2003, the road is deemed to be expropriated by the municipality.
[72] The Defendant argues that pursuant to section 65(2) of the Municipal Act, 2001, the person whose land the road was opened on is entitled to compensation in accordance with the Expropriations Act.
[73] Section 26 of the Expropriations Act sets out that, where the compensation to an owner under this act cannot be agreed upon, one may apply to the Ontario Land Tribunal for the determination of compensation by way of hearing. Compensation under the Expropriations Act is adjudicated and determined by the Ontario Land Tribunal who has jurisdiction over these matters.
[74] The Defendant submits that the Plaintiffs’ rights are limited to the issue of compensation only to the Ontario Land Tribunal being the authority to hear expropriation matters.
[75] Importantly, section 65(1) of the Municipal Act, 2001 prohibits a person on whose land the highway was opened from bringing “an action in respect of the opening of the highway or to recover possession of the land”.
[76] The Plaintiffs have both brought this action in respect of damages resulting from the mistaken opening of the highway and have sought to recover possession of the land in direct contravention of this prohibition. The Defendant submits that this Court has no jurisdiction over the subject matter of the action.
[77] In response, the Plaintiffs take the position that section 65(1) of the Municipal Act does not apply. The Plaintiffs maintain that the issue to be decided is whether or not this was a mistake or an intentional act on the part of the Township. Section 65(1) applies to mistakes, not to intentional expropriations.
[78] Section 65 of the Municipal Act is intended to remedy mistakes where proper procedures were followed and an innocent mistake has occurred. According to the Plaintiffs, a mistake is not what happened in this case. Rather, the Defendant intentionally ignored the procedural safeguards and statutory requirements related to constructing a road over private property.
[79] According to the Plaintiffs, in the construction on the Plaintiffs’ Property, the Defendant:
(a) Intentionally bypassed all procedural safeguards, including notice provisions;
(b) Installed the section of road over the property without taking any background procedural steps before construction, and simply started building;
(c) Changed its installations at and in the area of the Property on multiple occasions of the years without following proper procedures;
(d) Attempted to cover up this wrongdoing after the fact; and
(e) Rezoned the Property to environmentally protected land in order to reduce the value it would have to pay the Plaintiffs if ordered to pay the Plaintiffs for wrongfully taking their land.
[80] The Municipal Act and the Expropriations Act include numerous procedural safeguards to ensure members of the public are dealt with in a fair and just manner. The Defendant chose to ignore these sections in its dealings with the Plaintiffs but choose to apply section 65 to justify its actions.
[81] According to the Plaintiffs, allowing the Defendant to use section 65 of the Municipal Act as it is attempting to on this motion would have serious policy implications. It would suggest that private property can be taken without following any of the required procedures and then saved after the fact by calling the intentional bypassing of mandatory procedure a mistake. The Defendant, and other municipalities who will rely on the decision of this Court in the future, cannot be allowed to pave first and ask questions later.
[82] I disagree with the Plaintiffs. In my view, section 65 of the Municipal Act clearly applies here. The Township, by mistake, opened a highway not wholly upon the road allowance. Accordingly, the land occupied by the highway is deemed to have been expropriated.
[83] In my view, to permit the Plaintiffs to proceed with the action on this basis, circumventing the procedures contemplated by the legislation, would undermine the regime that has been set in place by Parliament for resolving disputes of this sort. Indeed, every person could make such an allegation.
[84] Moreover, the time to raise the issue of an intentional abuse of this sort would be at the time of the expropriation when the issue was a live one and a remedy was readily available – not some 36 years later when the roadway has long been built and travelled and much of the evidence related to the issue has likely been lost.
[85] In any event, I see nothing in the factual record to support the Plaintiffs’ claim that the building of the roadway was an intentional expropriation on the part of the Township. In fact, the factual record suggests the exact opposite. The record clearly reflects that the Township believed that the roadway was situated on the road allowance. Indeed, even the Plaintiffs’ Statement of Claim describes the mistake as a “colossal error” and act of negligence on the part of the Township.
[86] As noted above, the Plaintiffs are not without recourse. Section 13 of the Expropriations Act provides that the expropriating authority shall pay the owner compensation as is determined in accordance with the Act.
[87] Where the land of an owner is expropriated, section 13(2) of the Expropriations Act provides that the compensation payable to the owner shall be based upon,
(a) the market value of the land;
(b) the damages attributable to disturbance;
(c) damages for injurious affection; and
(d) any special difficulties in relocation.
[88] To the extent that compensation has not been adequately addressed, section 31 of the Expropriations Act provides that decisions of the Tribunal are subject to review by the Divisional Court.
[89] The action is dismissed.
Justice C.F. de Sa
Released: August 2, 2022
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
GREG PROPHET and NORMA JEAN PROPHET
Plaintiffs
– and –
CORPORATION OF THE TOWNSHIP OF TAY
Defendant
REASONS FOR DECISION
Justice C.F. de Sa
Released: August 2, 2022