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INTERESTS IN LAND - Easements - Extinguishment of easements - Release by dominant owner - By implication - Abandonment

Wednesday, July 19, 2017 @ 9:10 AM  

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Appeal by Metrolinx from a decision dismissing its application for a declaration that an Access Easement was valid and ordering it to be relocated. The easement was located on property owned by the respondent, Remicorp Industries Inc. (Remicorp). The Access Easement provided access to an uncontested easement for maintenance of the railway tracks on which the appellant operated its trains (Maintenance Easement). In 2002, the Canadian National Railway Company (CN) conveyed its property to the respondent, but reserved the Access and Maintenance easements to itself. Both easements were for the benefit of CN and its successors and assigns. The Access Easement was then expressly addressed in a 2003 Easement Agreement between CN and the respondent in the nature of an option agreement in favour of CN. The Easement Agreement provided that on the registration of a Part 1 easement in accordance with the terms of the Agreement, on the respondent’s written request, CN was to release the Access Easement. CN never exercised its option, the Part 1 easement was never registered on title, and there was no evidence of the Committee of Adjustment’s consent or a release of the Access Easement from CN. In 2010, CN transferred its interest in the rail corridor lands to the appellant. The transfer included CN’s rights to the Access Easement and the Maintenance Easement. The appellant never exercised any rights to the Access Easement. The application judge found that the easement had been abandoned by implied release and was extinguished by operation of law. He concluded however, that the appellant was entitled to its easement, but it was to be relocated.

HELD: Appeal allowed. The applications judge erred in finding an implied release. He failed to consider that the registrations on title of the easement in 2002, 2003 and 2010 represented evidence of the absence of an intention to abandon the Access Easement by CN. There was no evidence as to why CN or the appellant would have intended to abandon such rights and there was no evidence of any consideration that flowed from the respondent to CN in exchange for any release. The Access Easement was an express grant that was registered on title. The applications judge made no finding that the appellant had knowingly, and with full appreciation of its rights, determined to abandon it. His finding that the appellant was entitled to an easement was inconsistent with his finding that the appellant impliedly abandoned the access easement. The applications judge’s reasons suggested that he found abandonment based on operation of law due to evidence of lack of use by CN and appellant. Lack of use and lack of need did not, however, amount to extinguishment by operation of law. While the applications judge recognized the validity and effect of the 2003 Easement Agreement, his decision effectively deprived the Easement Agreement of any force or effect. In essence, the applications judge appropriated from the appellant the benefit of the Easement Agreement in the absence of evidence of any consideration, including any allowance for compensation. Having found that the Access Easement had been abandoned, he erred in finding that there was a covenant over which the Court could exercise its jurisdiction. The applications judge did not apply the correct legal principles in concluding that the Access Easement should be relocated. The relocation deprived the appellant of its rights under the Easement Agreement and resulted in significant traffic flow at the site of the alternative easement.

Remicorp Industries Inc. v. Metrolinx, [2017] O.J. No. 2805, Ontario Court of Appeal, R.J. Sharpe, S.E. Pepall and C.W. Hourigan JJ.A., May 30, 2017. Digest No. TLD-July172017005