Court File and Parties

COURT FILE NO.: CV-22-00061155-0000 DATE: 2023-01-13 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Janet Elizabeth Melville, Applicant – and – Shon June McLaren, Respondent

Counsel: R. Malen, as counsel for the Applicant K. Shedden, as counsel for the Respondent

HEARD: January 12, 2023

THE HONOURABLE JUSTICE L. M. Walters

Reasons for Decision

[1] Before the court are an application and two motions regarding a property located at 83 October Drive in St. Catharines, Ontario.

[2] The applicant, Janet Melville (“applicant”), seeks an order deleting a caution that was registered on title on October 21, 2022 by the respondent, Shon McLaren (“respondent”).

[3] This property has sold, and the caution prevents closing the real estate transaction.

[4] The respondent has moved for various relief, including an order to set aside the order of Donohue J. dated June 2, 2022, wherein two prior court orders and a notice of claim were deleted from title.

[5] For the purpose of these reasons, I do not need to set out the facts which for the most part are not in dispute.

[6] Instead, the real issue for the court to determine is the interpretation of section 119 (9) of the Land Titles Act, R.S.O. 1990, c.L.5, and section 113 (1), (2) (b) and (4) of the Registry Act, R.S.O. 1990, c. R. 20, and the effect these provisions have on certain restrictive covenants that were registered on title in 1958.

[7] Specifically, on June 3, 1958, a deed from Charles McLaren to Donald Nickerson (a predecessor in title to the applicant) contained the following provision:

The grantee covenants for himself, his heirs, executors, administrators and assigns, with the grantor, his heirs, executors, administrators and assigns, not to construct more than two residences or homes on the lands herein conveyed and further covenants that any such residence or homes shall be of a prime cost of not less than $10,000 each.

[8] There is no dispute that this covenant contains no ending or termination date. According to section 113 (1) of the Registry Act, the restrictive covenants contained in this deed would have expired on June 4, 1998, 40 years after their registration.

[9] However, pursuant to section 113 (2) of the Registry Act, Charles McLaren registered a notice of claim on title to the property on July 16, 1998. This had the effect of extending the notice period of the restrictive covenants for 40 years from the date of that registration.

[10] Section 113 of the Registry Act sets out:

Expiry of claims

113 (1) A claim that is still in existence on the last day of the notice period expires at the end of that day unless a notice of claim has been registered. R.S.O. 1990, c. R.20, s. 113 (1).

Notice of claim

(2) A person having a claim or a person acting on that person’s behalf, may register a notice of claim with respect to the land affected by the claim,

(a) at any time within the notice period for the claim; or

(b) at any time after the expiration of the notice period but before the registration of any conflicting claim of a purchaser in good faith for valuable consideration of the land. 2006, c. 34, s. 22 (4).

Renewal

(3) A notice of claim may be renewed from time to time by the registration of a notice of claim in accordance with subsection (2). R.S.O. 1990, c. R.20, s. 113 (3).

Effect of notice of claim

(4) Subject to subsection (7), when a notice of claim has been registered, the claim affects the land for the notice period of the notice of claim. R.S.O. 1990, c. R.20, s. 113 (4).

[11] If this property remained under the land registry system, the parties agree that the restrictive covenants would not have expired until July 16, 2038.

[12] However, in 2003, the property was converted from the land registry system to the land titles system.

[13] The position of the applicant is that by virtue of section 119 (9) of the Land Titles Act a restrictive covenant with no fixed expiry date is deemed to expire 40 years after the restriction was registered.

[14] The Land Titles Act does not have a similar provision which would permit the renewal of such a restriction as in the Registry Act.

[15] The applicant further argues that the notice of claim, which extends the notice of restriction for a further 40 years while in registry, is of no consequence once the property was converted into land titles.

[16] The applicant relies on the reasoning of Stinson J. in Andrews v. Rago, 2019 ONSC 800, 146 O.R. (3d) 53, wherein the court found that the restriction in that case was deemed to have expired 40 years after its registration. Justice Stinson referred to the actual covenant in making this determination. There is no mention anywhere of any “notice of claim”.

[17] Section 119 (9) of the Land Titles Act indicates:

Condition, etc., expires after 40 years

(9) Where a condition, restriction or covenant has been registered as annexed to or running with the land and no period or date was fixed for its expiry, the condition, restriction or covenant is deemed to have expired forty years after the condition, restriction or covenant was registered, and may be deleted from the register by the land registrar.

[18] The position of the respondent is that on July 16, 1998 a notice of claim was registered on title. The effect of this notice of claim is to extend the term of the restrictive covenants for a further 40 years, to July 16, 2038, despite the conversion from registry to land titles.

[19] In Andrews, Stinson J. considered the statutory interpretation of section 119 (9) of the Land Titles Act. I accept and rely on his finding in that regard. He not only considered the ordinary meaning of the legislative text but also took into account the entire context of the text, its history and legislative intent.

[20] Stinson J. acknowledged that up to this point in time there had been no judicial interpretation of section 119 (9).

[21] Ultimately, Stinson J. concluded at paragraphs 41 to 43:

[41] The foregoing history reveals that as long ago as 1952 the legislation provided for the removal of a restrictive covenant from the register when it expired by its terms. In 1962, the legislature took the next step of permitting a party to apply for the removal of a restrictive covenant 40 years after its registration, if the covenant contained no period or date fixed for its expiry. The 1979 amendment went even further, such that a restrictive covenant is now deemed to have expired 40 years after its registration where it contains no period or date for its expiry.

[42] The history of the legislation therefore reveals a progression over the years, in part to bring the land titles system into alignment with the registry system and to facilitate the predominance of the land titles system. The most recent amendments make the expiry of such a covenant automatic, with the only formality being the removal of registration of the spent covenant upon request.

[43] This interpretation of the Act is consistent with the plain and ordinary meaning of the words in s. 119(9) and gives additional support for my earlier conclusion that the covenants are caught by the express language of s. 119(9) and thus are deemed to have expired on March 3, 2006.

[22] Stinson J. did not have to deal with the effect of section 113 of the Registry Act on section 119 (9) of the Land Titles Act. In Andrews, there had been no notice of claim registered.

[23] I understand that this specific issue has not yet been judicially interpreted.

[24] It is clear that section 119 (9) of the Land Titles Act has not included any provision permitting an owner to extend or renew the term of any restrictive covenant registered on title. Accordingly, a restrictive covenant with no limitation as to time is deemed to have expired 40 years after its registration.

[25] However, once an extension or renewal is in place, there is also nothing in section 119 (9) that repeals, removes, or somehow takes away the claim that has been extended. Without such clear language, the claim still exists.

[26] I find that the date the restrictive covenant was “registered” is the date that the notice of claim was filed, namely July 16, 1998.

[27] As there is no “date fixed for its expiry”, the covenant is deemed to expire 40 years after the covenant was registered, or July 16, 2038.

[28] This determination should resolve all matters before the court. However, for further clarity, I will deal with each of the other issues raised by the parties in the application and motions before the court.

[29] The order of Donohue J. dated June 2, 2022 was obtained without notice to the respondent. She was not named as a party. She, as owner of the abutting land, 70 Simpson Road, was the individual who benefitted from the restrictive covenant on 83 October Drive. As soon as she became aware of the order, a caution was filed on title and then in December the motion was brought.

[30] The applicant argues that the respondent has not complied with rule 38.11. I disagree. As soon as the respondent was aware of the order, a caution was filed very quickly, and there were immediate and lengthy communications between counsel attempting to resolve this issue. A notice of motion filed in early December 2022, in these circumstances, is in compliance with the rule.

[31] Accordingly, the order of Donohue J. dated June 2, 2022 is set aside.

[32] Should the caution be set aside? Simply, no. As stated earlier, the respondent has an interest in the land, as she is the one who benefitted from the restrictive covenants. The actions by the registrar in deleting the covenants and the order made by Donohue J were all without notice to her.

[33] I find that the caution is properly registered on title.

[34] The same reasoning applies to a certificate of pending litigation. However, in light of my reasons today, it would appear that the application has been adjudicated on its merits and there is no further need for a certificate of pending litigation.

[35] In light of my ruling, the registrar of the land titles office shall restore the deleted restrictive covenants which the applicant obtained on September 9, 2021.

[36] The land registry office shall restore the title orders removed by Donohue J on June 2, 2022, namely the order registered on August 12, 1999, the order registered on April 9, 2002 and the order registered on July 16, 1998.

[37] As mentioned during the course of argument, I see no purpose in making any finding regarding a possible conflict of interest.

[38] Lastly, I agree with the submissions of the applicant that this application is not res judicata. Section 119 (9) of the Land Titles Act was not in existence at the time of the prior applications. This was not a matter that could have been dealt with on any earlier date before the coming into force of that section and the property being converted to the land titles system.

[39] If the parties are unable to agree on the issue of costs, they may provide me with written submissions not to exceed five pages in length within ten days of today’s date. If no such costs submissions are received, the issue of costs shall be deemed to have been determined.

L. M. Walters, J. Released: 2023-01-13