



COURT OF APPEAL FOR ONTARIO

CITATION: Paleshi Motors Limited v. Woolwich
    (Township), 2020 ONCA 625

DATE: 20201005

DOCKET: C67333

Doherty, Hoy and Jamal JJ.A.

BETWEEN

Paleshi Motors Limited

Appellant

and

The Corporation of the Township
    of Woolwich

Respondent

Shane Rayman, Conner Harris and Sarah
    Spitz, for the appellant

Peter A. Hertz, for the respondents

Heard: In writing

On appeal from the judgments of Justice G.E.
    Taylor of the Superior Court of Justice, dated July 22, 2019, with reasons
    reported at 2019 ONSC 4388.

REASONS FOR DECISION


I



[1]

In late 1979, or early 1980, the respondent, the
    Corporation of the Township of Woolwich (Woolwich), installed a watermain on
    property subsequently acquired by the appellant, Paleshi Motors Limited (the Paleshi
    property). The watermain has remained in place and in use since then.

[2]

In 2019, the present owners of Paleshi Motors
    brought an application seeking a declaration the watermain was illegally on
    their property and an order directing the removal of the watermain. At the same
    time, Woolwich brought an application seeking a declaration it had a
    prescriptive easement over the Paleshi property for the purposes of operating,
    maintaining, repairing and replacing the watermain.

[3]

The application judge dismissed Paleshi Motors
    application, and granted the prescriptive easement sought by Woolwich. Paleshi
    Motors appeals. The appeal proceeded in writing on consent. We dismiss the
    appeal and affirm the judgment below.


II



[4]

The Paleshi property consists of two adjacent lots
    known collectively as 39 Arthur Street North, Elmira. The lots are designated
    as Lots 20 and 21 on Plan 1301.

[5]

Lot 20 is accessed from Arthur Street North.
    Paleshi Motors acquired Lot 20 in July 1975 and operates an auto salvage yard
    on that property. Lot 21 lies immediately to the east of Lot 20. It is
    undeveloped and zoned open space. Paleshi Motors acquired Lot 21 in July 1981.

[6]

In late 1979 or early 1980, Woolwich installed a
    watermain just inside the eastern boundary of Lot 21. That watermain ran for
    some 200 feet along Lot 21. It was put in place to loop that part of Woolwichs
    water services. Looping improves the water quality for nearby residents using
    the water services, and provides a stronger and more reliable water flow to the
    fire department in the event of a fire in that area.

[7]

It is common ground the watermain was installed by
    Woolwich on property it did not own. Woolwich did not seek or obtain the
    permission of the owner of Lot 21, and did not attempt to enter into any
    easement agreement with the owner. The application judge found Woolwich was
    aware part of the watermain was being built on property not owned by Woolwich (para.
    26).

[8]

Paleshi Motors was acquired by new owners in
    2015. None of the owners of the Paleshi property objected to either the
    installation or maintenance of the watermain until Paleshi Motors, under its
    new owners, objected in 2017.

[9]

The Paleshi property was converted to the Land
    Titles Registry system on September 16, 2002. To establish a prescriptive
    easement, Woolwich had to show it met the required criteria for the 20 years
    between September 16, 1982 and September 16, 2002. There was no evidence from
    anyone who owned the Paleshi property during the 20-year period, or from anyone
    associated with any owner, as to the owners knowledge of the existence of the
    watermain, or any arrangement that existed between the owners and Woolwich with
    respect to the watermain. The application judge was left to draw inferences
    from the circumstantial evidence and the documents filed on title to Lot 21 and
    documents referred to in those documents.


III



[10]

The application judge correctly identified the
    prerequisites to the existence of a prescriptive easement (see paras. 19, 20).
    He also correctly self-instructed as to the policy considerations at play when
    considering prescriptive easement claims (para. 24).

[11]

There was no doubt Woolwichs use and enjoyment
    of the Paleshi property for the purposes of the watermain was continuous,
    uninterrupted and peaceful during the relevant 20-year period. Paleshi Motors
    claimed, however, Woolwich did not establish its use was open, in the sense
    that the owners of the Paleshi property knew, or could reasonably be expected
    to have known, of the existence of the watermain on their property during the
    20-year period. Not surprisingly, the application judge focused on this issue
    in his reasons.

[12]

The application judge ultimately concluded the owners
    of the Paleshi property during the relevant 20 years had acquiesced in the use
    of their property for the watermain (para. 33). In reaching that conclusion,
    the application judge drew inferences based on the public nature of the construction
    in 1970-80, the regular maintenance of the watermain after it was installed, and
    Paleshi Motors ownership of the immediately adjacent lot (Lot 20) when
    construction occurred and maintenance was carried out.

[13]

The application judge also referred to Paleshi
    Motors purchase of Lot 21 in 1981, a little more than a year after the installation
    of the watermain. In considering whether the owners of Paleshi Motors were
    aware of the watermain on their property when they purchased Lot 21, the application
    judge was entitled to conclude the owners exercised reasonable diligence as
    purchasers when buying Lot 21.

[14]

The application judge also pointed to a document
    prepared at Paleshi Motors request in respect of its proposed development of
    Lot 21 in 1986. That document contained a sketch showing the watermain running
    along the Paleshi property on Lot 21. We take this to be a finding Paleshi
    Motors had actual knowledge of the existence of the watermain on their property
    no later than 1986. There was no evidence the owners of Paleshi Motors took any
    action in 1986, leading to the reasonable inference the sketch showing the
    watermain on Lot 21 simply confirmed what the owners of Paleshi Motors already knew
     the watermain was located on Lot 21.

[15]

In concluding the owners of the Paleshi property
    acquiesced in the use of their property for the watermain, the application
    judge was not required to find the owners had actual knowledge of the existence
    of the watermain on their property throughout the relevant period. Actual
    knowledge, which the application judge found existed after 1986, or imputed
    knowledge will suffice. Knowledge of the existence of the watermain could be
    imputed to the owners of the Paleshi property if an ordinary landowner,
    diligent in the protection of her interests, would have had a reasonable
    opportunity of becoming aware of the watermain:
Garfinkel v. Kleinberg and
    Kleinberg
, [1955] O.R. 388 (C.A.).

[16]

In our view, there is nothing unreasonable,
    either in the inferences drawn by the application judge, or in his ultimate
    conclusion that the owners of the Paleshi property had knowledge, actual or
    imputed, of the existence of the watermain by 1982 and acquiesced in Woolwichs
    use of their property for that purpose over the next 20 years.

[17]

A finding that the owners acquiesced in the use
    of the property by Woolwich goes to the openness of that use. It does not
    necessarily determine whether the use was as of right, in the sense the
    owners had not permitted the use. The application judge found Paleshi Motors
    had failed to prove it had permitted Woolwich to use the property for the
    purposes of the watermain (para. 33). Paleshi Motors argues the application
    judge wrongly reversed the burden of proof. It submits Woolwich had to prove
    the absence of any permission by the owners of the Paleshi property. Woolwich
    counters with the submission the application judge did not reverse the burden
    of proof but, having found acquiescence by the Paleshi property owners, looked
    to the owners to point to evidence indicating that acquiescence was explained
    by permission having been given for the use of the property by Woolwich.

[18]

The application judges language tracks closely
    the language of this court in
Condos Castles Realty Inc. v. Janeve Corp.
,
2015 ONCA 466, at paras. 19-20, although
    the application judges reference to Paleshi Motors being required to prove
    the use was by way of permission could be read as going beyond the evidentiary
    burden referred to in
Condos Castles Realty Inc.
Paleshi Motors also submits
Condos
    Castles Realty Inc.
is distinguishable
    on its facts.


[19]

It is unnecessary to parse the language of the
    application judge and decide whether he was speaking of a persuasive or
    evidentiary burden in the impugned passage. Unlike many prescriptive easement
    cases, this case did not turn on the distinction between acquiescence and
    permission. There was no evidence from either Paleshi Motors or Woolwich that
    the owners of the Paleshi property had ever given Woolwich permission to
    install or maintain the watermain. The application judge found Woolwich acted
    unilaterally when it installed the watermain. On the application, Paleshi
    Motors adamantly denied any permission had ever been given. On the evidence
    adduced, it would have been speculation to conclude any owner of the Paleshi
    property may have permitted Woolwich to use the property for the purposes of
    the watermain. Even if the application judge misplaced the ultimate burden of
    proof, it had no possible effect on his finding Woolwich did not have
    permission to use the property.

[20]

Paleshi Motors also raises a novel legal
    argument. It submits the requirement the easement accommodate the dominant
    tenement must be given a special meaning when the dominant tenement is a public
    authority. Paleshi Motors argues that if a public authority, like Woolwich, is
    claiming the easement, Woolwich must demonstrate that the easement is
    necessary, in the sense there is no other way to acquire the interest in the
    land other than by way of an prescriptive easement. Given the land acquisition
    powers of most public authorities, this submission would bring an end to
    prescriptive easements in favour of entities like Woolwich. Paleshi Motors
    acknowledges as much in its supplementary factum, at para. 21:

Such an easement should never be necessary in
    the case of a public body with the power to compulsorily acquire the necessary
    easement while protecting private property rights.

[21]

Setting aside for the moment the argument based on Woolwichs
    status as a public body, Woolwich established the requirement that the easement
    accommodate the dominant tenement. The installation of the loop in the
    watermain improved water services for affected properties along the adjoining
    street. In doing so, it enhanced the enjoyment of that property by the owners
    and Woolwich:
Mihaylov v. 1165996 Ontario Inc.
, 2017 ONCA 116, at para. 81.
There is an obvious and direct
    connection between the improved water services and the enhanced enjoyment of
    the properties benefitting from those improvements.

[22]

We must also reject the submission that,
    because Woolwich is a public authority and could have expropriated the
    property, it should not be able, as a matter of law, to claim a prescriptive
    easement. Nothing in the case law offers any support for this proposition. The
    lay of the statutory land is also against Paleshi Motors. As counsel for Woolwich
    observed, to the extent the
Municipal Act
speaks to the issue, it
    offers support for the power of a municipality to acquire prescriptive easements
    in the same way as other legal entities: see
Municipal Act
, 2001 S.O.
    2001, ss. 6, 8, 9. Furthermore, the legislature can, and has, when it deems it
    appropriate, expressly foreclosed or limited the acquisition of property rights
    by prescription: see
Land Titles Act
, R.S.O. 1990, c. L.5, s. 51(2).
    The legislature has not acted to prevent entities like Woolwich from acquiring
    property rights by way of prescriptive easements.

[23]

Lastly, we do not accept Paleshi Motors
    argument that policy considerations all favour denying public bodies like
    Woolwich the ability to acquire prescriptive easements. There are policy reasons
    for distinguishing between public authorities and private landowners insofar as
    the acquisition of easements by prescription is concerned. However, the
    fundamental policy underlying the common laws recognition of prescriptive easements
    applies to all property owners. Prescriptive easements rest on a policy which
    holds, after the passage of a significant period of time, during which one
    owner has acquiesced in the use of its property by another owner, that other owner
    becomes entitled to rely on that acquiescence and conduct itself accordingly. Whether
    that policy should apply to all, some, or no public authorities, is a question for
    the legislature.

[24]

The appeal is dismissed.

[25]

Woolwich, as the successful party, will
    provide costs submissions in writing within 14 days. Those submissions should
    not exceed five pages. Paleshi Motors will provide its submissions in response
    within 14 days of receiving the respondents costs submissions. Those
    submissions shall not exceed five pages.


Doherty J.A.

Alexandra Hoy J.A.

M. Jamal J.A.



