



COURT OF APPEAL FOR ONTARIO

CITATION: Pepper v. Brooker, 2017 ONCA 532

DATE: 20170626

DOCKET: C60458

Epstein, Benotto and Trotter JJ.A.

BETWEEN

Marion Ruth Pepper and James Allen Pepper

Plaintiffs (Respondents)

and

Douglas Brooker

Defendant
    (Appellant)

AND BETWEEN

Douglas Brooker

Plaintiff (Appellant)

and

James Allen Pepper and Marion Ruth Pepper

Defendants (Respondents)

Barry Yellin, for the appellant, Douglas Brooker

Peter Quinlan, for the respondents, James Allen Pepper
    and Marion Ruth Pepper

Heard: March 17, 2017

On appeal from the order of Justice R. John Harper of the
    Superior Court of Justice, dated April 13, 2015, with reasons reported at 2015
    ONSC 142.

Trotter J.A.:

A.

Overview

[1]

This appeal arises from a boundary dispute between two cottage owners.
    Over a number of years, James and Marion Pepper built a road on their land and
    made other improvements. When Douglas Brooker discovered that some of the work
    had been performed on his adjacent lot, he claimed damages for trespass. The
    Peppers brought a separate action, claiming title to the disputed lands by
    adverse possession.

[2]

Both actions were tried together. Mr. Brookers claim was dismissed. The
    Peppers succeeded in obtaining title to roughly 3,400 square feet of Mr. Brookers
    land. They were also awarded the bulk of their costs on a substantial indemnity
    basis.

[3]

Mr. Brooker appeals. He accepts that there was a mutual mistake
    concerning the true boundary line separating the properties. However, he
    contends that the claim for adverse possession ought to have failed because the
    Peppers did not establish that they had effectively excluded him from the
    disputed lands. He also argues that the trial judge erred in dismissing his
    action. Lastly, Mr. Brooker argues that costs should not have been awarded on a
    substantial indemnity basis.

[4]

For the reasons that follow, I would allow both of Mr. Brookers
    substantive appeals. As a result, all aspects of the judgment at trial,
    including the costs order, must be set aside.

B.

the facts

(1)

The Cottage Properties

[5]

The properties are situated on the shoreline of Lake Erie, in Norfolk
    County. The Peppers own Lots 2 and 3. They have a cottage on Lot 2. Lot 3, to
    the east, is vacant. Mr. Brooker has a cottage on Lot 4.

[6]

The lots are part of a group of properties known as Avalon Park. The
    cottages sit at the top of a steep descent, bordered by Charlotte Street to the
    north. Moving south, beyond a bank, the land slopes 90 feet down to the water.

[7]

The Peppers acquired Lots 2 and 3 from Ms. Peppers mother (Mrs. Ruth
    Pond) in 2002. Mrs. Pond had acquired the lots in 1970 and 1973, respectively. Mr.
    Brooker purchased his property in 1987.

(2)

The Boundary Line

[8]

Mrs. Pond and the Peppers believed that the boundary between Lots 3 and
    4 followed a straight line from a maple tree at the north end of the property,
    and descended down the slope to a willow tree close to the shoreline. Subsequent
    events would reveal that this was not accurate. The maple-willow line cut
    across Mr. Brookers property, quite substantially.

(3)

Building on the Land

[9]

The Peppers testified that, due to the steep slope of the land, the
    shoreline was virtually inaccessible from their cottage. In 1982, they started
    to dump fill onto their property to eventually alter the grade of the land down
    to the water. The Peppers owned a transport and heavy equipment business and
    used dump trucks and graders from this business to fill in the land. They
    estimated that, over the years, they dumped 600-700 truckloads of dirt fill. By
    2003, they had constructed a road made of dirt fill that allowed direct access
    from their cottage to the shore. However, as work on the road continued over
    the years, it drifted in an easterly direction onto Mr. Brookers lot, although
    no one realized it at the time.

[10]

Mr. Brooker disputed that the shoreline had been previously inaccessible
    from his and the Peppers cottages. He testified that he and his dog frequently
    negotiated the slope on his lot (Lot 4) to get to the beach. Given the contradictory
    answers Mr. Brooker gave during his discovery evidence (
i.e.
,
he
    said that he accessed the lake by going further east onto Lot 5), the trial
    judge rejected this aspect of his evidence.

[11]

In 2004, the Peppers started construction on a seawall to protect the land
    from erosion caused by the tides of Lake Erie. The Peppers were concerned that
    they would lose the fill they had dumped over the years. Among other things,
    the Ministry of Natural Resources required that the Peppers obtain Mr. Brookers
    consent to perform this work. When the Peppers asked Mr. Brooker if he would
    consent, he had said that he would think about it. He stalled the Peppers for
    about a year.

[12]

Mr. Pepper testified that he saw Mr. Brooker outside one day. He
    approached Mr. Brooker with a partially completed consent form in hand. Mr. Brooker
    signed the form and the work on the seawall commenced shortly afterwards.

[13]

Mr. Brooker disputed this version of events. He acknowledged that Mr.
    Pepper asked his consent to build the seawall. But he said that he did not
    trust the Peppers and claimed to have signed a blank piece of paper on the day
    he was approached by Mr. Pepper. The trial judge rejected this evidence.

[14]

The seawall project was significant. In fact, two walls were built. The
    first one is 10-feet high and runs 120 feet along the shoreline. One thousand tons
    of gabion stone was used in this phase, which was completed in 2005. The second
    seawall, which is 20 feet long, was built just east of the first one. This was
    completed in 2009.

[15]

In the early 2000s, the Peppers acquired a set of steps from a car
    dealership. They stored the stairs north of where the land slopes. In 2010, the
    Peppers moved the stairs down to the bottom of the road they built. The stairs
    allow access from the end of the road down to the larger of the two seawalls.

(4)

Resolving the Boundary Issue

[16]

As noted above, the Peppers thought the boundary between Lots 3 and 4
    ran along the maple-willow line. In an attempt to impugn the Peppers claim, Mr.
    Brooker testified that
he
planted the willow tree near the shoreline
    in 2000. The trial judge rejected Mr. Brookers evidence on this point.

[17]

Mr. Brooker also testified that he had previously put stakes along the
    true property line, as well as erecting two fences: a snow fence starting above
    the slope and continuing slightly down it and a green chain link fence half way
    down the slope. He testified that the fences must have been destroyed during
    the Peppers construction of the road. Again, Mr. Brookers evidence was
    rejected.

[18]

In 2012, Mr. Brooker hired a surveyor to ascertain the true boundary
    between Lots 3 and 4. As it turned out, some of the graded work, including the
    road, the staircase, part of the first seawall, and the entirety of the second
    seawall were on Lot 4. This was not disputed at trial.

(5)

Use of the Completed Road

[19]

The Peppers did not prevent other members of the Avalon Park community
    from using their road and steps to access the shoreline. They erected no
    fences. Prior to the commencement of legal proceedings with Mr. Brooker, they
    did not display a No Trespassing sign. However, Mr. Pepper placed large rocks
    at the top of the driveway to stop cars from being driven down the road and
    becoming stuck.

[20]

Mr. Pepper testified he did not consider people who used the road to
    access the shoreline to be trespassers. As he testified:

Q:
Alright and you say they wouldnt be
    trespassing.           Do you mean that you would not object to      neighbours
    using your property to access to the         lake?

A.:
No, it would not.

[21]

The issue was addressed again in cross-examination. Mr. Pepper gave the
    following evidence:

Q.:
Do
    other members of the community use the staircase?

A.:
They were welcome to, yes.

Q.:
Alright,
    did you offer any sort of written confirmation that they could, or did you
    offer anything to anybody?

A.:
Yes,
    I told them all if they want to use anything there, go ahead and use it. Just
    my family could not use it.

This evidence was confirmed by a neighbour, Jane
    Curtis, who said that the Peppers offered us that opportunity.

[22]

The Peppers made no effort to exclude Mr. Brooker from using of the road
    and steps. Mrs. Pepper said that, while she would exchange pleasantries with Mr.
    Brooker when she saw him at the supermarket, she never spoke to Mr. Brooker at
    Avalon Park. Mrs. Pepper also gave the following testimony:

Q.:
Did you ever exclude Doug Brooker from your           property?

A.:
Exclude him from it?

Q.:
Did you ever tell him he couldnt stand on your           property?

A.:
I never did, I never spoke to him, no.

Q.:
Alright, so you never spoke to Brooker aside
    from   maybe idle chit chat at the supermarket?

A.:
Yes, I said hello to him, I think, yes, thats
    it.

. . .

Q.:
So you never had a substantive conversation I           should
    say?

A.:
I never did, no.

[23]

Mr. Brooker testified that he was never told that he could not use the
    disputed lands. He gave the following testimony on this issue:

Q.:
Did
    James Pepper ever tell you that you couldnt access the land  any part of that
    land?

A.
:      No, he didnt.

Q.
:     Did
    Ruth Pond ever tell you that you couldnt access any part of that land?

A.:
No.

Q.:
Did
    Marion Pepper ever tell you that you couldnt access any part of your land?

A.:
No.

[24]

The trial judge did not refer to any of this evidence in his reasons.

(6)

Brookers Claim for Damages

[25]

Mr. Brooker initially claimed $200,000 in general damages, $50,000 for
    trespass, and punitive damages in the amount of $50,000. This claim represented
    the diminution in value of Mr. Brookers property and/or the cost to remove the
    infringing modifications.

[26]

During his examination for discovery, Mr. Brooker said that he would not
    attempt to reverse any of the work performed by the Peppers, with the exception
    of the stairs situated at the end of the roadway. He testified that he wished
    to have the stairs completely covered or removed because it created a liability
    for him. Mr. Brooker maintained the same position at trial, claiming that he did
    not want to create accessibility for others on the shoreline.

[27]

Two real estate appraisers testified about changes to the value of Mr. Brookers
    land as a result of the Peppers modifications. Mr. Brookers witness
    calculated that the lost value was roughly $56,000. The Peppers appraiser testified
    that the land in question was essentially valueless before the modifications.

C.

the trial judges reasons

[28]

The trial judge found that the Peppers and Mr. Brooker were mutually
    mistaken about the location of the property line between Lots 3 and 4. He
    concluded that the Peppers occupied the disputed lands through their filling
    and grading work between 1982 and 2003. The trial judge observed that construction
    of the seawalls started in 2000. In fact, construction on the seawalls started
    in 2004, and the stairs were moved to the bottom of the road in 2010.

[29]

In setting out the elements of adverse possession, the trial judge relied
    heavily on this courts decision in
Teis v. Ancaster (Town)

(1997), 35 O.R. (3d) 216 (C.A.)
. Specifically, he focused
    on those passages of the judgment dealing with the concept of inconsistent use.
    The trial judges critical findings are found in paragraph 34 of his reasons:

I find that Mr. Brooker's failure to
    say anything to the Peppers over far in excess of the ten year period
    allows me to draw the inference that he was mistaken with respect to the lot
    lines of Lot 3 and Lot 4.
I find that this mutual mistake allows me to draw
    the inference that the Peppers intended to occupy parts of Lot 4 in
    which they built the sea wall and stairs with the intention to exclude all
    others, including the owner Mr. Brooker.
As a result of my findings, I
    am satisfied that the Peppers have obtained title to the parts of Lot
    4 that are outlined in yellow in the survey filed by the Peppers as
    Exhibit 1. This part of Lot 4 represents the area in which all of the
    improvements that were made by the Peppers are situated. The Peppers are
    to obtain a proper survey to provide a metes and bounds description that will
    allow for the appropriate order to be drafted and registered on title. [Emphasis
    added.]

[30]

Given his finding that the Peppers adverse possession claim was made
    out, the trial judge dismissed Mr. Brookers claim for trespass. He observed
    that, in any event, Mr. Brooker was only concerned about removing the stairs.

[31]

Finally, the trial judge awarded partial indemnity costs to the Peppers up
    to the date of an offer they made under Rule 49.10 and substantial indemnity
    costs thereafter.

D.

analysis

(1)      The Adverse Possession
    Claim

[32]

All issues raised on this appeal turn on the correctness of the trial
    judges application of the law of adverse possession. The elements of adverse
    possession were recently stated in
McClatchie v. Rideau Lakes (Township)
,
    2015 ONCA 233, 333 O.A.C. 381, in which Rouleau J.A. said at paras. 9-11:

To establish adverse possession of certain
    lands, a claimant must demonstrate that throughout the ten-year adverse
    possession period, he or she: a) had actual possession of the lands in
    question; b) had the intention of excluding the true owner from possession;
and
    c) effectively excluded the true owner from possession
:
Masidon
    Investments Ltd. v. Ham
(1984), 45 O.R. (2d) 563
    (Ont. C.A.), at p. 567.

An adverse possession claim will fail
    unless the claimant meets each of the three criteria
, and time will begin to run against the true owner of the lands
    only from the last date when all three are satisfied:
Masidon
, at p. 567.

To establish actual possession, the acts of
    possession must be "open, notorious, peaceful, adverse, exclusive, actual
    and continuous":
Teis v. Ancaster (Town)
(1997), 35 O.R. (3d) 216 (Ont. 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. [Emphasis added.]


[33]

The critical issue is whether the Peppers modifications to the disputed
    lands on Lot 4 effectively excluded Mr. Brooker from possession of those parts
    of his property. Although the trial judge found that the Peppers
intended
to
    exclude all others, including the owner Mr. Brooker, he failed to find that
    the Peppers had
effectively
excluded Mr. Brooker from the property. There
    was no evidence to support the claim that they had effectively excluded him, nor
    anyone else for that matter. The evidence suggests the opposite. This is fatal
    to the Peppers claim.

[34]

As noted in para. 29 above, the trial judge relied heavily on parts of
Teis
.
    The issue in
Teis
was whether the inconsistent use requirement  a
    facet of the intention to exclude criterion requiring the claimants use of the
    land to be inconsistent with the title holders intended use  applies in cases
    of mutual mistake. After reviewing the development of the concept of
    inconsistent use, Laskin J.A. held, at p. 224-25, that it does not. Rather, in
    cases of mutual mistake the court may reasonably infer, as indeed I infer in
    this case, that the claimantsintended to exclude all others, including the
    paper title holder:
Teis
, at pp. 226-27.

[35]

Applying
Teis
, the trial judge reasoned that because the
    parties were mutually mistaken about the boundary between Lots 3 and 4, he
    could draw the inference that the Peppers intended to occupy parts of Lot
    4with the intention to exclude all others, including the owner Mr. Brooker.

[36]

This finding was not challenged on appeal. However, I pause to observe
    that this finding  an intention to exclude  appears to be at odds with the
    evidence. No one, and certainly not Mr. Brooker, was prevented from using the
    road and steps to access the shoreline. This ought to have led the trial judge
    to conclude that the Peppers had failed to establish an intention to exclude.

[37]

But even assuming that finding can stand, there exists a more
    fundamental problem. An intention to exclude the true owner of a property is
    just one part of the adverse possession equation. An adverse possession
    claimant must succeed in his or her intention by achieving effective exclusion
    from the property, even in cases of mutual mistake:
Shennan v. Szewczyk
,
    2010 ONCA 679, 96 R.P.R. (4th) 190.

[38]

In
Shennan
, the court dealt with a property dispute between
    cottage owners. The trial judge had dismissed a claim for adverse possession.
    He found that it was not a case of mutual mistake because, over the critical
    years, nobody really cared where the boundary separating the two cottage
    properties was situated. On appeal, the trial judges finding on the mutual
    mistake issue was affirmed. However, the court addressed the issue of effective
    exclusion (at para. 20):

In any event, the criterion of effective
    exclusion of the true owner throughout the 10-year period remains a
    requirement, even in cases of mutual mistake.
We do not read the decisions
    of this Court in
Key

[Key v. Latsky
(2006), 206 O.A.C. 116]
and
Teis
as reading the "effective exclusion
    of the true owner" criteria out of the adverse possession requirements in
    cases involving mutual mistake.
Neither case dealt
    with the effective exclusion requirement, and nothing was said in the reasons
    of the Court in either case to rule it out in cases of mutual mistake. [Emphasis
    added.]

The court upheld the trial judges finding that there
    was no evidence that the true owners were excluded from the land, noting: That
    is what was required.

[39]

The holding in
Shennan
 that effective exclusion is an element
    of adverse possession, even in cases of mutual mistake  was affirmed in
Sumner
    v. Sullivan
, 2014 ONCA 869, 49 R.P.R. (5th) 167, at para. 3, and in
Barbour
    v. Bailey
, 2016 ONCA 98, 66 R.P.R. (5th) 173, leave to appeal refused,
    [2016] S.C.C.A. No. 139, at para. 47.

[40]

The trial judge failed to make an explicit finding on whether the
    Peppers effectively excluded Mr. Brooker from the disputed portions of Lot 4.
    It is not otherwise implicit in his reasons. Allowing the Peppers adverse
    possession claim without a finding of effective exclusion was an error of law:
    see
Housen v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 36;
    and
Canada (Director of Investigation and Research) v. Southam Inc.
,

[1997]
    1 S.C.R. 748, at para. 39.

[41]

While this conclusion is sufficient to resolve the main issue on appeal,
    I note that the timing of the Peppers construction also bars their adverse
    possession claim over the part of Lot 4 on which the seawalls were built.

[42]

As mentioned above, a claimant must meet all three of the adverse
    possession criteria for a ten-year period. However, that ten-year period cannot
    run past the date on which a piece of land is registered in the land titles
    system:
Land Titles Act
, R.S.O. 1990, c. L.5, s. 51(2); and
Real Property
    Limitations Act
, R.S.O. 1990, c. L.15, s. 4. As this court recently
    explained in
Sipsas v. 1299781 Ontario Inc.
, 2017 ONCA 265, at para.
    18:

Although title to lands registered in Land Titles cannot be
    obtained by adverse possession following the registration of title, title may
    be obtained by adverse possession that can be established for a continuous
    period of 10 years prior to registration: s. 51(2) of the
Land Titles
    Act
, R.S.O. 1990, c. L.5 and s. 4 of the
Real Property
    Limitations Act
, R.S.O. 1990, c. L.15.

[43]

Lot 4 was registered in August 2007. Thus, to be successful, the Peppers
    had to show that all the elements necessary to their adverse possession claim
    were present for at least ten years, ending in August 2007.

[44]

The landfill work commenced in 1982, well within the limitation period.
    However, the construction of the seawalls and the re-location of the stairs did
    not occur until much later, falling short of the ten-year threshold. The
    Peppers argue that these subsequent improvements were erected within the
    confines of the disputed lands already treated by the Peppers as their own.

[45]

This position has some resonance in relation to the relocated stairs,
    which were essentially an extension of the road built on Mr. Brookers land.
    However, I would not apply this line of reasoning to the construction of the
    seawalls, which were separate projects that extended the incursion of Mr. Brookers
    land in a different and significant way. Because construction of the seawalls began
    in 2004, the time had long since passed for the Peppers to obtain title by
    adverse possession.

(2)      The Appropriate Remedy

[46]

At the hearing of the appeal, counsel for the Peppers argued that,
    should the court conclude that the trial judges reasons were found wanting for
    failing to address the element of effective exclusion, a new trial should be
    ordered. Counsel for Mr. Brooker argued that, because there was no evidence to
    support a finding of effective exclusion, trial judges order should be set
    aside and title in the disputed lands restored to Mr. Brooker.

[47]

I would decline to order a new trial. There was no evidence that could
    support a finding that Mr. Brooker was excluded from his own property. Being
    good neighbours and members of the Avalon Park community, the Peppers permitted
    others, including Mr. Brooker, to take advantage of their improvements,
    designed to create access to the waterfront. Perhaps paradoxically, this
    generosity proved to be fatal to their adverse possession claim. Comparable
    adverse possession claims have failed for similar reasons: see e.g.
Shennan
;
Chen v. Stafford
, 2012 ONSC 3802, 23 R.P.R. (5th) 101; and
Sumner
    v. Sullivan
, 2014 ONSC 1706, 41 R.P.R. (5th) 189. To order a new trial
    would unfairly provide the Peppers with another opportunity to establish their
    claim.

[48]

Consequently, I would set aside that portion of the trial judges
    Amending Judgment (dated May 30, 2016) that conveys entitlement in the disputed
    lands to the Peppers by adverse possession.

(3)

The Trespass Claim

[49]

Based on his findings concerning the adverse possession claim, the trial
    judge dismissed Mr. Brookers action in trespass. In light of my conclusion on the
    adverse possession issue, the dismissal of the trespass action cannot stand.
    The evidence established the elements of the tort: see Rainaldi et al.,
Remedies
    in Tort
(Toronto: Thompson Reuters, 1987), at pp. 23-11, 23-12. However, I
    see no reason to depart from the trial judges conclusion that Mr. Brooker
    suffered no damages as a result of the Peppers extensive improvements to both
    lots. Moreover, counsel for Mr. Brooker abandoned his damages claim at hearing
    of the appeal. Consequently, I would make no damages award.

(4)      Costs Awarded At Trial

[50]

Given the manner in which I have disposed of the substantive issues on
    this appeal, the trial judges costs award against Mr. Brooker must be set
    aside. In my view, Mr. Brooker is entitled to his costs arising from that
    proceeding. However, counsel on appeal did not make submissions on this issue.

[51]

If counsel are unable to agree on the costs of trial, I would direct them
    to file brief written submissions. Counsel for Mr. Brooker may file written
    submissions no longer than 5 pages in length, along with a Bill of Costs, within
    10 days of the release of this judgment. Counsel for the Peppers will have 7
    days from the receipt of Mr. Brookers materials to file submissions no longer
    than 5 pages in length.

E.

disposition

[52]

I would therefore allow the appeal and set aside the order below. I
    would award Mr. Brooker his costs of the appeal in the amount of $10,000,
    inclusive of disbursements and HST.

Released:

GE                                                    G.T.
    Trotter J.A.

JUN 26 2017                                     I agree
    Gloria Epstein J.A.

I
    agree M.L. Benotto J.A.


