Ontario Superior Court of Justice

Court File No.: CV-23-31
Date: 2025/01/28
Between:
Harmur Investments Limited, Applicant
and
Katherine Lillian Pearce, Respondent

Martin Black, Counsel for the Applicant
Andrew Lenz, Counsel for the Respondent
Heard: January 24, 2024 (Pembroke)

Reasons for Judgment
H. Williams

Overview

[1] The applicant, Harmur Investments Limited (“Harmur”), seeks a vesting order declaring that it has acquired, through adverse possession, title to two parcels of land in the Township of Greater Madawaska.

[2] Harmur and the respondent, Katherine Lillian Pearce (“Mrs. Pearce”), own adjacent properties on O’Neill Point Road. Their properties are on the shore of Calabogie Lake.

[3] Mrs. Pearce has the legal title to the two parcels of land Harmur says it now owns.

Background

[4] Paul Murphy (“Paul” [1]) is Harmur’s current president. Paul’s grandfather, Harold Murphy I, purchased what is now the Harmur property in 1943. The Harmur property is Lot 110 on Plan 156, Township of Greater Madawaska. [2]

[5] When Harold Murphy I died in 1974, Lot 110 was transferred to his son, Harold Murphy II, who was Paul’s father. In 1994, Harold Murphy II transferred the property to Harmur.

[6] Harold Murphy II died in 2011.

[7] Mrs. Pearce’s property, made up of Lots 111 and 112 on Plan 156, is to the east of Harmur’s Lot 110.

[8] Mrs. Pearce purchased her property in 1975. In 1997, Mrs. Pearce transferred title to the property to herself and her husband, Earl Pearce (“Earl”), as joint tenants. Earl died in 2021.

[9] One of the two disputed parcels of land is the shape of a triangle. It is on the northwest side of Mrs. Pearce’s property. Fittingly, the parties agreed to refer to this parcel as “the Triangle” for purposes of the application. The Triangle abuts the Harmur property and is to the north of the Harmur property. The Triangle is 3/25 of an acre or about 485 square metres in size. A driveway leading to the Harmur property from O’Neill Point Road crosses the Triangle.

[10] The second disputed parcel is in the southwestern corner of Mrs. Pearce’s property. It is 1/50 of an acre or about 80 square metres in size. This parcel is on Calabogie Lake. It shares its western border with the Harmur property. Although the second parcel is part of Mrs. Pearce’s Lot 111, it is located between Harmur’s Lot 110 and a boathouse which belongs to Harmur, but which is on the lake, south of Mrs. Pearce’s property and, until 2021, a small portion of which encroached on Mrs. Pearce’s property. As I will explain in more detail below, the second disputed parcel, along with the Murphy cottage and boathouse, is at lake level, while the Pearces’ cottage is at a higher elevation, at the top of a hill, overlooking the boathouse.

[11] The parties agreed to refer to the second disputed parcel as “the Boathouse Parcel.”

[12] The Triangle, the Boathouse Parcel and the parties’ dispute over ownership of the two parcels were all created by the installation many years ago of a wire fence.

[13] This north-south running fence either followed or was close to most of the property line between the Harmur property and Mrs. Pearce’s property. However, the fence also extended northward, beyond the shared border of the two properties, to O’Neill Point Road, cutting across Mrs. Pearce’s Lot 111 and creating the Triangle. At the south end of the parties’ properties, instead of following the straight property line all the way to the lake, the fence stopped at a pine tree several metres north of the lake and then ran eastward across Mrs. Pearce’s property, with the effect of creating the Boathouse Parcel.

[14] The location and configuration of the Triangle and the Boathouse Parcel appear on several surveys, including a survey dated May 30, 1950. On the excerpt from the 1950 survey, the Triangle appears to sit on top of (north of) and on the right-hand side (the east side) of Harmur’s Lot 110. The thick line that cuts through the Triangle and looks as though it was drawn with a highlighter pen, shows the location of the driveway leading to the Harmur property from O’Neill Point Road. The much smaller triangular-shaped parcel at the bottom (south) left (west) of Mrs. Pearce’s Lot 111 is the Boathouse Parcel. The boathouse to the right (east) of the Boathouse Parcel encroaches on Mrs. Pearce’s Lot 111, but belongs to the owners of Lot 110, Harmur and, before Harmur, the Harold Murphys.

[15] Although it is difficult to see on this reproduction of the 1950 survey, the fence that creates the Triangle and the Boathouse Parcel is labelled “crooked wire fence” on the right-hand side of the Triangle. This is how I will refer to it as well.

[16] That the Triangle is part of Lot 111, and not of Lot 110, is evident not only on the 1950 survey but also on a plan of subdivision dated July 10, 1905.

[17] Harmur argues that its predecessors in title, the Harold Murphys, obtained possessory title to the Triangle and the Boathouse Parcel in the 32 years between Harold Murphy I’s purchase of Lot 110 in 1943 and Mrs. Pearce’s purchase Lots 111 and 112 in 1975.

[18] Harmur submits that after 1975, Harold Murphy II (Harold Murphy I died in 1974) and Harmur then continued to have possession of both the Triangle and the Boathouse Parcel throughout the 1970s, the 1980s and the 1990s, right up until and after the title to Lots 110 and 111 was transferred to the Land Titles system on May 11, 1998.

[19] As I will set out in greater detail under the heading “Adverse Possession: Legal Principles”, below, a party claiming adverse possession must show that the requirements for adverse possession were all in place before the disputed property was transferred to Land Titles. This means that how a property was used and whether the true owner was excluded after the date of the transfer to Land Titles (May 11, 1998 in this case) is irrelevant, except to the extent that it may shed light on what happened before the transfer to Land Titles.

[20] In his oral submissions, Harmur’s counsel said that, although it is Harmur’s position that Harmur or its predecessors, the Harold Murphys, had adverse possession of the disputed parcels beginning in 1943 and up to May 11, 1998 and beyond, Harmur would be seeking to prove adverse possession from 1962, the date of Paul’s first memories of the Harmur property, to 1975, when Mrs. Pearce purchased Lots 111 and 112.

Mrs. Pearce’s Motion

[21] Mrs. Pearce brought a motion to exclude certain evidence in some of the affidavits filed by Harmur. My brief endorsement will be released under separate cover.

Adverse Possession: Legal Principles

[22] Both parties relied on McCracken Estate et al v. Gatt et al, 2023 ONSC 105, an adverse possession case involving land in Shanty Bay. I agree with and adopt the helpful summary of the law set out by Dawe J., as he then was:

[64] As Perell J. explained in Mueller v. Lee, at para 10:

The possession and the ownership of land are related but distinct concepts. For lands under the Registry Act, R.S.O. 1990, c. R.20, the ownership interest of the registered titleholder may be extinguished and lost to a person who has been in possession of that land for ten years. Pursuant to the operation of ss. 4 and 15 of the Real Property Limitations Act, R.S.O. 1990, c. L.15, a person in legal possession of another’s land may obtain what is known as a possessory title.

[65] Section 4 of the Real Property Limitations Act requires actions to recover land to be made “within ten years next after the time at which the right … to bring such action, first accrued”. Section 15 then provides that once this limitation period has expired “the right and title of such person to the land … is extinguished”.

[66] A person who acquires possessory title over land, and in so doing extinguishes the original owner’s legal title, is said to acquire the land through “adverse possession”.

[67] The doctrine of adverse possession only applies to lands governed by the Registry Act. Section 51(1) of the Land Titles Act states that notwithstanding the Real Property Limitations Act:

… no title to and no right or interest in land registered under this Act that is adverse to or in derogation of the title of the registered owner shall be acquired hereafter or be deemed to have been acquired heretofore by any length of possession or by prescription.

[68] However, s. 51(2) preserves adverse possession claims that crystallized before the land at issue was registered under the Land Titles system. As the Ontario Court of Appeal recently explained in Billimoria v. Mistry, 2022 ONCA 276, at para. 28, “land that is registered in Land Titles cannot be obtained by adverse possession unless the ten-year exclusion period ran before the land was registered.”

[70] To claim possessory title under the doctrine of adverse possession, the claimant must satisfy the three requirements established by the case law. In Mueller v. Lee, Perell J. explained at paras. 11-12:

It may be helpful to observe that the three requirements allude to the two factors that determine legal possession; that is: (1) control of the property; and (2) the intention to possess the property.

The three requirements of an adverse possession claim are:

(1) the claimant and or his predecessors must have actual possession for the statutory period;

(2) the claimant’s possession must be with the intention of excluding the owner or persons entitled to possession; i.e. the claimant must have an animus possidendi; and

(3) the owners and any others entitled to possession must be out of possession (discontinuance of possession) for the statutory period.

[71] The jurisprudence also distinguishes cases where the legal owner and the person claiming possessory title both mistakenly believed that the person claiming adverse possession owned the land – for example, cases involving neighbours, where both parties were mistaken about the location of a property line – from situations where the person claiming possessory title knowingly trespassed on the true owner’s land. In the latter situation, the claimant must demonstrate that his or her use of the land was inconsistent with the legal owner’s intended use, both to establish the intention to exclude the legal owner (Keefer v. Arillotta; Fletcher v. Storoschuk), and to demonstrate that the legal owner was “out of possession” (Masidon Investments Ltd. v. Ham). However, this requirement that the claimant demonstrate “inconsistent use” does not apply in cases of mutual mistake: see Teis v. Ancaster (Town of).

[91] In cases where the claimant honestly but mistakenly believed that he or she owned the disputed land, the inference that the claimant intended to exclude the true owner is ordinarily not difficult to draw. However, as Perell J. observed in Mueller v. Lee, at paras. 20, 23:

The intention to exclude element has a low threshold in cases where the claimant and the true owner mistakenly believe that the claimant owns the disputed land, and it has a high threshold where the claimant is a mere trespasser with designs of becoming the owner of lands that he or she knows belong to another …

In Ontario, in cases where a trespasser knowingly seeks to dispossess the rightful owner, the intention to exclude requirement has a high threshold because the law adds an “inconsistent use” requirement to the intention to exclude requirement of the test for a possessory title. The animus possidendi that a person claiming possessory title must have is the intention to exclude the owner from such uses as the owner wants to make of his or her property: Keefer v. Arillotta, supra; Fletcher v. Storoschuk, [supra]; Leigh v. Jack (1879), 5 Ex. D. 264. In other words, in trespasser cases, the claimant must show “inconsistent use” having regard to the intentions of the owner or paper titleholder: Masidon Investments Ltd. v. Ham, [supra]. Many commentators have noted that if the owner’s use is just to hold the land for future development, it is extremely difficult for the claimant to show an inconsistent use.

[92] Perell J. noted further in Mueller v. Lee, at para. 16, that:

The aspect of adversity in the requirement of actual possession means that the possession is without the permission of the owner. If the claimant acknowledges the right of the true owner, then the possession is not adverse: Teis v. Ancaster, supra; 1636539 Ontario Inc. v. W. Bradfield Ltd.. Adversity means that the claimant is in possession without the authorization or permission of the titleholder: Teis v. Ancaster, supra; Beaudoin v. Aubin; Rowe-Wilkinson v. McDougall Wright. The adversity aspect may be problematic because just as giving may be overrun by taking, with the passage of time, permission may be overrun by appropriation.

[23] The third requirement, “effective exclusion of the true owner”, applies even in cases of mutual mistake: Shennan v. Szewczyk, 2010 ONCA 679.

The Issues

[24] The onus is on Harmur to satisfy all three requirements of the test for adverse possession established by the case law and listed in para. 70 of McCracken, above.

[25] The Harmur and Pearce properties were transferred to the Land Titles system on May 11, 1998. Accordingly, Harmur must establish that the Harold Murphys or Harmur acquired possessory title over the disputed property before that date.

[26] The issues are, therefore, the following:

• Issue #1: Has Harmur shown that Harmur, or its predecessors in title, the Harold Murphys, had actual possession of the Triangle or the Boathouse Parcel for a 10-year period prior to May 11, 1998?
• Issue #2: If Harmur satisfies the first requirement under Issue #1, has Harmur shown that its possession of the Triangle or the Boathouse Parcel was with the intention of excluding the true owner(s)? The consideration of Issue #2 will require a determination of whether there was a mutual mistake in respect of who the true owner of the Triangle or the Boathouse Parcel was. Harmur raised this issue. As noted above, in the event of a mutual mistake, the party seeking the order for adverse possession is not required to demonstrate that its use of the land was inconsistent with the true owner’s intended use.
• Issue #3: Has Harmur shown that the true owner or owners of the Triangle or the Boathouse Parcel were out of possession (i.e. that there was a discontinuance of possession) for the 10-year period? In other words, were the true owner or owners of the disputed parcels actually excluded?

Analysis

Issue #1: Actual Possession

[27] In McCracken, Perell J. considered the requirements for a finding of actual possession. I agree with and adopt his reasoning:

[15] What is sufficient to establish actual possession will vary depending upon the nature of the property and the natural uses to which it can be put: Walker v. Russell; Laing v. Moran. Professor Bruce Ziff in his text Principles of Property Law (3rd ed.) (Toronto: Carswell, 2000) states at p.126:

In general, the squatter must use the property as the owner might. Looked at another way, the adverse use must be such as to put the paper owner on notice that a cause of action has arisen. After all, the doctrine is based on the failure to take action within the limitation period, and therefore time should not run unless it is fair to hold a delay against the owner. This is reflected in the requirement that the occupation must be open and notorious, and not clandestine. The adverse possessor must send out a clarion call to the owner, who, if listening, should realize that something is awry. If the adverse possession continues, the owner must commence an action within the limitation period to avoid being statute barred.

[16] The aspect of adversity in the requirement of actual possession means that the possession is without the permission of the owner. If the claimant acknowledges the right of the true owner, then the possession is not adverse: Teis v. Ancaster, supra; 1636539 Ontario Inc. v. W. Bradfield Ltd.. Adversity means that the claimant is in possession without the authorization or permission of the titleholder: Teis v. Ancaster, supra; Beaudoin v. Aubin; Rowe-Wilkinson v. McDougall Wright. The adversity aspect may be problematic because just as giving may be overrun by taking, with the passage of time, permission may be overrun by appropriation.

[17] Actual possession can be established by use, and it is not necessary to build improvements or to enclose lands by a fence or barrier: Laing v. Moran, supra; Clarke v. Babbitt. This point is demonstrated by Laing v. Moran, supra, where using land for a driveway to a garage was held to be sufficient to establish actual possession. Actual possession of land has been established by: farming the land: Teis v. Ancaster, supra; establishing a laneway to move farm equipment even if the use of the laneway is shared by the public: Teis v. Ancaster, supra. Enclosure is the strongest possible evidence of possession, but it is not indispensable: Seddon v. Smith (1877), 36 L.T. 168 at p. 169.

[18] Use is sufficient to establish possession, but use is not necessary to establish possession. This point is also demonstrated by Laing v. Moran, supra, where the Court of Appeal held that the construction of a garage was actual possession of the land covered by the garage and that use or non-use of the garage was irrelevant.

[28] To establish actual possession, the acts of possession must be “open, notorious, peaceful, adverse, exclusive, actual and continuous”: Teis v. Ancaster (Town of), 35 O.R. (3d) 216 (C.A.), at p. 221. If any one of these elements is missing at any time during the statutory ten-year period, the claim for possessory title will fail: Teis, at p. 221. (McClatchie v. Rideau Lakes (Township), 2015 ONCA 233, at para. 11.)

[29] Although “continuous” use is an essential element of an adverse possession claim, it does not matter that the use is intermittent if the property in question is seasonal use property. The acts necessary to establish continuous use depend on the type of property. For some types of property, such as a cottage property, seasonal and weekend use is consistent with the type of continuous use an owner would make of the property and therefore satisfies the criterion of continuous use. (Bailey v. Barbour, 2016 ONCA 98, at para. 83.)

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Disposition

[139] For these reasons, I allow the application in part.

[140] I find that Harmur has not acquired title to the disputed parcel the parties referred to as “the Triangle.”

[141] I find that Harmur has acquired title to the disputed parcel the parties referred to as “the Boathouse Parcel.”

[142] If the parties are unable to agree on the terms of judgment, they may request a case conference with me through the trial coordinator.

Costs

[143] At the conclusion of the hearing of the application, the parties asked that I not make a ruling with respect to costs until after they had had an opportunity to make submissions.

[144] The parties are encouraged to settle the issue of costs.

[145] If they are unable to settle the issue, they may exchange and file brief (no more than five pages) written costs submissions within 21 days. The written submissions shall be filed by emailing them to my attention at scj.assistants@ontario.ca. The submissions shall also be uploaded to Case Centre.

[146] If either party is of the view that oral costs submissions would assist me, they may contact trial coordination to request a 60-minute virtual hearing. Such a hearing would be in addition, and not to substitute for, the written submissions ordered in the preceding paragraph.

Justice H. Williams
Date: January 28, 2025

[1] Because there are two Mr. Murphys and two Mr. Pearces, I will be referring to Paul Murphy, Michael Murphy, Earl Pearce and Kevin Pearce by their first names.

[2] More recently, Harmur also purchased Lot 113.