



COURT OF APPEAL FOR ONTARIO

CITATION: Remicorp Industries Inc. v. Metrolinx, 2017 ONCA
    443

DATE: 20170530

DOCKET: C61700, C61701,

C62315, C62316

Sharpe, Pepall and Hourigan JJ.A.

BETWEEN

Remicorp Industries Inc.

Applicant (Respondent)

and

Metrolinx
,
    Canadian National Railway Company,

City of
    Toronto, GB Landco Ltd. and 2046079 Ontario Inc.

Respondents (
Appellant
)

AND BETWEEN

Metrolinx

Applicant (Appellant)

and

Remicorp Industries 78Inc.

Respondent

(Respondent in Appeal)

Wendy J. Earle, for the appellant

David Cherepacha and Kyle Gossen, for the respondent

Heard: November 30, 2016

On appeal from the judgments of Justice Grant R. Dow of
    the Superior Court of Justice, dated January 12, 2016, with reasons reported at
    2016 ONSC 10.

Pepall J.A.:

A.

Introduction

[1]

These appeals involve competing claims for relief relating to an easement.
    The easement is located on land situated north of railway tracks that currently
    service GO Trains and the newly-established Union Pearson Express. The
    contested easement leads to another, uncontested easement that runs along a
    rail corridor. Together, the easements provide access for maintenance of the
    railway tracks.

[2]

The appellant, Metrolinx, sought a declaration that the contested
    easement was valid and an injunction requiring the respondent, Remicorp
    Industries Inc., to remove certain encroachments on it. Remicorp, who owns the
    lands on which the easement is situate, sought a declaration that the easement
    had been abandoned or extinguished or, in the alternative, that it be
    relocated.

[3]

The applications judge accepted Remicorps position. He dismissed
    Metrolinxs application and found that the easement had been abandoned. Although
    Remicorp had sought relocation as alternative relief, the applications judge ordered
    that the easement be relocated. Metrolinx now appeals on the basis that the applications
    judge erred in concluding that the easement had been abandoned, and in ordering
    it to be relocated.

[4]

For the reasons that follow, I would allow Metrolinxs appeals.

B.

facts

The Property

[5]

The Canadian National Railway Company (CN) owned the Mimico railway
    station in the west of Toronto. The station property consisted of a small
    building surrounded by a parking lot and vegetation (the Property). The
    Property lies west of Royal York Road and borders on Judson Street to the north
    with railway lands and tracks to the south. On a survey dated November 26,
    2002, the Property is divided into nine parts. The significant parts for the
    purposes of this appeal are Parts 1, 2, 3, and 5, highlighted below:


[6]

The easement under dispute in these appeals is shown on Part 5. Part 5 is
    a curved, uphill, unpaved laneway running from Judson Street to the parking lot
    providing access to the station and to the uncontested easement. This laneway is
    described by the parties as the Access Easement. It is approximately 6.1 to
    11 metres wide and about 45 metres long.

[7]

The uncontested easement is shown on Parts 2 and 3, and is described as
    the Maintenance Easement. Part 3 is a strip of land, 3 metres wide and 70 metres
    long, running west to east immediately north of the rail corridor. At its
    eastern end, Part 3 is met by the Access Easement. At its western end, it meets
    Part 2, a small quartile of land that is met by Part 1 on the survey.

[8]

Part 1 is on the western side of the Property. It is a strip of land,
    6.1 metres wide and 60 metres long, that runs from Judson Street in the north
    to Part 2 in the south.

The Easements

[9]

In 2002, CN sold its Property to Remicorp, a concrete manufacturing company.
    Remicorp intended to build a concrete factory on the Property.

[10]

CN
conveyed the Property to Remicorp, reserving
    the Access and Maintenance Easements to itself. Remicorp also agreed to build a
    6-foot fence and gates acceptable to CN along the southern boundary of the
    Property that would abut the railway lands that CN continued to own.

[11]

Both
    the Access Easement and the Maintenance Easement reserved to CN, its successors
    and assigns an exclusive, free, uninterrupted and unobstructed right and
    easement in the nature of a right-of-way that extended to use by vehicles and
    equipment. The sale transaction closed and the deed was registered on December
    11, 2002. The deed included the Part 5 Access Easement and the Parts 2 and 3
    Maintenance Easement in favour of CN. The Access Easement was for the purpose
    of accessing CNs adjacent and abutting lands and the lands on which the
    Maintenance Easement was situate. The Maintenance Easement was for the purpose
    of maintenance of CNs railway tracks and other related railway operations.
    Both easements were for the benefit of CN and its successors and assigns. The relevant
    portion of the deed is attached as an appendix to these reasons.

[12]

Sometime
    in 2002 or 2003, Renato Silva, the owner of Remicorp, contacted Ernie Longo,
    CNs Manager of Business Development and Real Estate, about relocating the Access
    Easement from the eastern side of the Property along Part 5 to the western side
    of the Property along Part 1. The possibility of moving the Access Easement had
    been discussed at the time of the sale of the Property but nothing had been
    documented. No direct evidence from Longo or evidence of his authority to bind
    Metrolinx was tendered, but Silva deposed that Longo liked the relocation
    because it was in a straight line and fairly flat.

[13]

In
    June of 2003, Remicorp moved the Judson Street entrance to the Property from Part
    5 in the east, where the Access Easement is located, to Part 1 in the west.

[14]

On
    September 19, 2003, Remicorp and CN entered into an Easement Agreement in the
    nature of an option agreement in favour of CN. CN and Remicorp agreed that
upon the written request of CN
, Remicorp was to: (i) apply
    for and use its best efforts to obtain consent to the Part 1 easement from the
    City of Toronto Committee of Adjustment, (ii) grant the Part 1 easement to CN,
    and (iii) register the Part 1 easement on title.

[15]

The
    parties to the Easement Agreement expressly acknowledged the Access Easement on
    Part 5 and described it as the Original Access Easement. The Easement Agreement
    provided that on the registration of the Part 1 easement (described as the Permanent
    Easement) in accordance with the terms of the Agreement, on Remicorps written
    request, CN was to release the Original Access Easement. The Easement Agreement
    was registered on title on November 6, 2003.

[16]

CN
    never made any written request of Remicorp and hence never exercised its
    option; the Part 1 easement was never registered on title; and there is no
    evidence of the Committee of Adjustments consent or a release of the Access
    Easement from CN.

[17]

Nonetheless,
    Remicorp used Part 1 for ingress and egress to and from the Property. It also
    erected certain structures in the path of the Access Easement including a sheet
    metal wall, a garage/shed, and concrete troughs. In 2014, it erected a 6.5-metre
    high acoustical barrier that encroaches on the Maintenance Easement. Remicorp
    erected some of the structures without obtaining the necessary permits.

[18]

For
    its part, after entering into the sale transaction in 2002, CN did not use either
    the Access Easement or the unrealized Part 1 easement.

Sale to Metrolinx

[19]

In April 2010, CN transferred its interest in the rail corridor
    lands to Metrolinx,
an agency of the Ontario Government. Metrolinxs
    mission, among other things, is to develop and implement an integrated
    transportation system for the Greater Toronto Area. It operates the GO Train
    network that facilitates passenger movement by rail to and from the Greater
    Toronto Area and beyond. It is also responsible for the new Union Pearson
    Express.

[20]

The
    transfer from CN to Metrolinx included CNs rights to the Access Easement and
    the Maintenance Easement. Despite its transfer to Metrolinx, CN retained
    responsibility for the planning, design, and installation of the signal system
    for the rail corridor. In 2012, it erected a signal bridge, part of which sits
    on the south side of the Maintenance Easement. Using the Maintenance Easement,
    Metrolinx is able to drive its usual maintenance vehicle past the signal bridge
    on the south with about 10 centimetres to spare on the north.

[21]

Metrolinx
    has never exercised any rights it may have to the Access Easement or the
    prospective easement on Part 1.

[22]

The
    only repair and maintenance facility for the entire GO Train network,
    Willowbrook, sits to the southwest of the Property. The future needs of
    Metrolinx appear to be increasing. Over the years, Willowbrook has been
    expanded and two additional tracks have been installed on the northern edge of
    Metrolinxs property. Metrolinx can gain access to Willowbrook using the
    Maintenance Easement and from the south and west of its railway lands.

[23]

In
    2014, Remicorp obtained an Environmental Compliance Approval which permitted it
    to make intense use of Part 1 for ingress and egress to and from its Property. Remicorp
    is now allowed to operate 16 trucks per hour between the hours of 7:00 a.m. and
    7:00 p.m. using Part 1.

[24]

Remicorp and Metrolinx have had unsuccessful discussions about
    the sale of the Property to Metrolinx. The applications judge noted that the
    outcome of the parties court proceedings will likely have an impact on the
    value of the Property
.

Court Proceedings

[25]

This brings me to the particulars of the court proceedings commenced
    by each of the
parties.

[26]

Remicorp
    sought a declaration that the Access Easement over Part 5 was abandoned,
    obsolete, redundant and/or extinguished, or, in the alternative, asked for an
    order that it be relocated to Part 1.

[27]

Metrolinx
    sought a declaration that the Part 5 Access Easement is valid, in force, and
    binding on Remicorp. It also sought injunctive relief requiring Remicorp to stop
    obstructing the Access Easement and to remove certain encroachments. Metrolinx argued
    that use of the area attendant to the rail corridor has intensified in recent
    years. Absent use of the Access Easement, track protection for the safety of
    trains and workers would result in tracks being taken out of service, delays,
    and additional costs.

[28]

The
    other parties to the applications, and in particular, CN, have taken no
    position in either of the two proceedings.

Reasons of the
    Applications Judge

[29]


The applications judge dismissed Metrolinxs application and
    granted Remicorps.

[30]

The
    applications judge focused on whether Metrolinx had abandoned the Access
    Easement. He explained that abandonment can occur through express release,
    implied release, or by operation of law:
Lywood v. Hunt

(2009),
    97 O.R. (3d) 520 (S.C.), affd 2011 ONCA 229.

[31]

The
    applications judge noted that Remicorp did not argue there was an express
    release.

[32]

He
    went on to hold that while the legal documents did not support an implied
    release of the Access Easement by Metrolinx, its non-use of the easement did.

[33]

In
    his view, the key factors supporting the implied release were: (1) the
    existence and description of Part 1 on the survey; (2) the non-use of the Part
    5 Access Easement; (3) Silvas evidence of Longos acquiescence to moving the Part
    5 Access Easement; (4) the drafting and registration on title of the September 2003
    Easement Agreement; (5) and a December 2014 Metrolinx photograph of 12 large
    concrete blocks that blocked the south end of Part 1. The applications judge
    held that these blocks undermined Metrolinxs submission on the importance and
    need for any easement.

[34]

That
    said, he noted that neither party was suggesting that the easement be taken
    away; Remicorp was only proposing that it be moved. He rejected Metrolinxs
    submission that the Part 5 Access Easement was preferable to an easement over
    Part 1.

[35]

The
    applications judge concluded, at para. 21: In all of the circumstances, if
    necessary, I would conclude there is sufficient evidence of an implied release.
    However, I also conclude the operation of law is the basis on which Remicorp
    should succeed.

[36]

Relying
    on
Weidelich v. De Koning
,
2014 ONCA 736, 122 O.R. (3d) 545, he stated that the holder of an easement
    does not own the right of way but only enjoys the reasonable use of that
    property for its granted purpose. In the applications judges view, the
    purpose here was to pass over for access to the tracks when or if required, not
    to place or build anything permanent on that land: at para. 21. Metrolinx was
    entitled to its Access Easement, but the facts and circumstances of the case
    required that it be moved to Part 1.

[37]

The
    applications judge went on to hold that Remicorp was required to give
    reasonable priority to Metrolinx over its own 16-truck hourly allocation over
    Part 1.

[38]

The
    applications judge stated, at para. 24:

Under subsection 61(1) of the
Conveyancing and Law of
    Property Act
, R.S.O. 1990, c. C.34 [CLPA], the Access Easement is moved to
    [Part 1]. Similarly, if there is a distinction, subsection 119(5) of the
Land
    Titles Act
, R.S.O. 1990, c. L.5 [LTA] applies. I conclude the
    modification is beneficial to the parties interested and the existing easement
    is to be discharged while the alternate Access Easement registered on title.

[39]

Although
    the reasons were silent on extinguishment, the judgment allowing Remicorps
    application provides that the Part 5 Access Easement is extinguished by
    operation of law and by abandonment, and that pursuant to subsection 61(1) of
    the CLPA and subsection 119(5) of the LTA, the Part 5 Access Easement is
    relocated to Part 1. The applications judge also dismissed Metrolinxs request
    for injunctive relief to remove certain structures on the Access Easement and
    encroachments on Metrolinxs lands.

C.

Issues

[40]


Metrolinx appeals from the judgments. Its appeals raise the
    following
issues:

(i)
Did the applications judge err in
    concluding that the Part 5 Access Easement had been abandoned by implied
    release?

(ii)   Did the applications judge err in
    concluding that the Part 5 Access Easement was extinguished by operation of law?

(iii)  Did he also err in concluding that the Part
    5 Access Easement could be moved to Part 1?

(iv) Is Metrolinx entitled to a remedy for
    Remicorps encroachments on the Access Easement and Metrolinxs lands?

[41]

Metrolinx also argues that the applications
    judge erred in ordering that Metrolinx was to have reasonable priority over
    Remicorps use of Part 1.  However, as I have found in Metrolinxs favour on
    the other issues, it is unnecessary to address this submission.

D.

discussion

Issue 1: Abandonment
    by Implied Release

(a)

Parties
    Positions

[42]

Metrolinx
submits that the applications judge made three
    errors in finding that the Part 5 Access Easement had been abandoned by implied
    release: (i) he failed to recognize that the three registrations on title
    between 2002 and 2010 contradicted any suggestion of abandonment; (ii) he
    failed to apply established case law on the need to demonstrate an intention to
    abandon in the face of an express grant of easement; and (iii) he improperly
    considered extraneous issues in considering whether there was an implied
    release of the Access Easement.

[43]

Remicorp
    disputes these submissions and states that the applications judge considered
    the three registrations on title but found that they were outweighed by the
    factors that demonstrated an implied intention to abandon. Furthermore,
    Remicorp argues that although the applications judge did not make express reference
    to intention, his reasons clearly imply that he found an intention to abandon.
    In any event, argues Remicorp, the weighing of the factors in the applications judges
    analysis of abandonment is discretionary and his decision is entitled to
    deference. Lastly, he did not improperly consider any extraneous issues.

(b)

Analysis

[44]

The
    applications judge was dealing with an express grant of easement. CN asserted
    its rights to the Access Easement in the 2002 deed from CN to Remicorp, in the 2003
    Easement Agreement between CN and Remicorp, and in the 2010 deed from CN to
    Metrolinx. All were registered on title.

[45]

Subsection 15(1) of the
CLPA
provides that,
    absent an exception, a conveyance includes all easements. Here, the Access
    Easement and the Maintenance Easement were expressly included, and not excepted,
    in both the conveyance from CN to Remicorp and the conveyance from CN to
    Metrolinx. Put differently, CN maintained its rights to use and transfer the
    easements. There is no question that paper title to the enjoyment of the Part 5
    Access Easement remained with CN and was then transferred to Metrolinx.

[46]

One must therefore then consider whether there
    was any derogation from Metrolinxs right to the Access Easement by implied
    release.

Abandonment
    by Release: General Principles

[47]

An easement may be abandoned by release which may
    be express or implied. The onus of proof is on the party asserting a release:
Liscombe
    v. Maughan
(1927), 62 O.L.R. 328 (C.A.), at p. 335. In
Gale
    on Easements
,
20th ed.
    (London: Thomson Reuters (Professional) UK Limited, 2017), the authors warn, at
    para. 12-26: Unless the easement is granted for a term of years, the rights
    conferred by an easement are perpetual and, accordingly, are actually or
    potentially valuable rights. Therefore it is not lightly to be inferred that
    the owner of such a right should give it up for no consideration.

[48]

An easement can be expressly released by the
    dominant owner, that is, the party who has received the grant of easement  in
    this case CN and then Metrolinx. As noted by the applications judge, there was
    no express release. This was undisputed.

[49]

An easement can also be released impliedly. Non-use
    coupled with an intention to abandon the easement may demonstrate implied
    release. On its own, non-use is insufficient. As this court explained in
Liscombe
,
at p. 335, non-use may
    arise because an owner of an easement had for the time no occasion to use it as
    another more convenient means of employing the land was available. However,
    this lack of use did not prove that the owner of the easement intended to
    abandon it. See also
Ward v. Ward
(1852)
, 155 E.R. 1189, and
Crossley
    and Sons Limited v. Lightowler
(1867), L.R. 3 Eq. 279. Indeed
    in
Liscombe
at p. 335, this court cited
Seaman
    v. Vawdrey
(1810), 33 E.R. 1032, where, despite non-use
    for over 100 years, an intention to abandon was not established. To reiterate,
    intention to abandon must be proven.

[50]

Intention to abandon will be found where the
    person entitled to it has demonstrated a fixed intention never at any time
    thereafter to assert the right himself or to attempt to transmit it to anyone
    else:
Shklar v. Kwiecien
(1972), 3 O.R. 245
    (H.C.J.), at p. 247, citing
Tehidy Minerals Ltd. v. Norman
,

[
1971] 2 All E.R.
    475, at p. 492. See also
Almel Inc. v. Halton Condominium Corp. No.
    77
(1997), 98 O.A.C. 72 (C.A.), at para. 7. To establish
    intention to abandon, the surrounding circumstances may be examined:
Liscombe
,
at para. 28.

[51]

Inclusion of an easement in a conveyance
    supports the absence of an intention to abandon:
Liscombe
,
at p. 335. As stated
    in
Halsburys Laws
of Canada
, Real Property, (Toronto: LexisNexis Canada Inc., 2016 Reissue), at
    HRP 316: Where title has been perfected an extinguishment will usually require
    either an express release or circumstances so cogent as to preclude a
    quasi-releasor from denying the release; an intention to release will be less
    readily presumed where the title to the easement has been perfected than where
    the title still remains inchoate.: citing
Baker v. Harris
(1929), 64 O.L.R. 513 (C.A.), at p. 516. Suspension of the exercise
    of a right is insufficient. An intention not to exercise a right may differ
    from an intention to abandon it. See
Re Kileel and Kingswood Realty
    Ltd.
(1979), 108 D.L.R. (3d) 562 (N.B.C.A.), at p. 567.

Application to
    this Case

[52]

In my view, the applications judge erred in
    finding an implied release. There are several reasons why.

[53]

First, in considering whether the applications judges
    conclusion that the Access Easement had been impliedly released may be
    sustained, three registrations on title are relevant. The Access Easement and
    the Maintenance Easement were in the 2002 grant from CN to Remicorp. The Access
    Easement was then expressly addressed in considerable detail in the Easement Agreement
    of September 2003 between CN and Remicorp. Lastly, both easements were included
    in CNs transfer to Metrolinx in 2010.

[54]

While the applications judge was aware of these
    three documents in that he states that the legal documents do not support the
    position of Remicorp, I agree with Metrolinx that he failed to consider that
    the registrations on title represented evidence of the absence of an intention
    to abandon the Part 5 Access Easement by CN. In fact, the evidence to the
    contrary was both strong and unequivocal. The parties deliberately turned their
    minds to the treatment of the easement rights held by CN. The Easement
    Agreement contemplated an option by CN that was never exercised. CNs
    subsequent transfer of its easement rights to Metrolinx is consistent with the
    absence of any such exercise. There is no evidence that any of the steps
    contemplated by the Easement Agreement to effect a release of the Part 5 Access
    Easement ever took place. For instance, there is no evidence of CN making a written
    request, no evidence of Remicorp having applied for or using its best efforts
    to get the Committee of Adjustment to consent to the Part 1 easement, and no
    evidence that the Part 1 easement was ever registered on title as an easement. Had
    the applications judge considered this evidence, he would not have concluded
    that the requisite elements in support of an implied release were present.

[55]

Secondly, as mentioned, easement rights may have
    value. There was no evidence as to why CN, or indeed Metrolinx, would have
    intended to abandon such rights and there was no evidence of any consideration
    that flowed from Remicorp to CN in exchange for any release. The applications judge
    failed to consider this as a factor that supported the absence of any such
    intention.

[56]

Thirdly, the Access Easement was an express
    grant that was registered on title. As Aitken J. stated in
2108133 Ontario
    Inc. v. Kabcan Foods Ltd.
(2009), 80 R.P.R. (4th) 194 (Ont. S.C.), at
    para. 8, the intent to abandon means that the person entitled to the easement
    has knowingly, and with full appreciation of his rights, determined to abandon
    it. The applications judge made no finding in this regard. Indeed, although the
    onus of proof was on Remicorp, the applications judge was silent on the absence
    of any evidence being elicited from CN.

[57]

Fourthly, the applications judge concluded that
    Metrolinx was entitled to its easement but the facts and circumstances of this
    case require the easement to be moved to  Part 1. The easement was not being
    taken away but was being moved. His finding that Metrolinx was entitled to an
    easement is inconsistent with his finding that Metrolinx impliedly abandoned the
    Access Easement.

[58]

Lastly, Metrolinx also submits that the
    applications judge erred in considering certain extraneous factors. It submits
    that he erred by justifying his conclusion in part on the basis that the Access
    Easement was not used and that an alternative route was available, and by
    inferring that CN had acquiesced in moving the Access Easement.

[59]

Lack of use, alternative access, and acquiescence
    are factors to consider in assessing the cogency of the circumstances. However,
    as mentioned, non-use on its own is insufficient. Further, as will be addressed
    below in my discussion of extinguishment by operation of law, alternative
    access becoming available is on its own insufficient to establish abandonment. Finally,
    any potential acquiescence by CN was overtaken by the express terms of the Easement
    Agreement that addressed the very subject matter of the Access Easement in
    clear and unambiguous language and which the applications judge failed to meaningfully
    address.

[60]

In light of these errors, to the extent the applications
    judge rested his decision on a finding of implied release, his decision cannot
    be sustained.

[61]

Having addressed abandonment by implied release,
    I will now turn to the applications judges reliance on operation of law.

Issue Two: Operation of Law

(a)

Parties
    Positions

[62]

On appeal, the submissions of the parties
    conflated abandonment by implied release and extinguishment by operation of
    law. In that regard, their arguments on operation of law were subsumed in their
    discussion of abandonment by implied release. However, for the purposes of
    analytical clarity and consistent with the terms of the judgment allowing
    Remicorps application, it is helpful to address the concepts separately.

(b)

Analysis

Extinguishment
    by Operation of Law: General Principles

[63]

As I have explained, in addition to holding that
    the Access Easement had been abandoned by implied release, the applications judge
    also rested his decision on operation of law. And while the applications judge
    did not declare that the Access Easement was extinguished in his reasons, he
    did so in his judgment. This raises the knotty question of nomenclature in this
    area of law, and the components of extinguishment by operation of law.

[64]

Anne Warner La Forest, in
Anger and
    Honsberger, Law of Real Property
,

loose-leaf, 3rd
    ed., vol. 2 (Toronto: Thomson Reuters Canada Ltd., 2016) states at para. 17:20.60,
    that an easement may be extinguished by express release, implied release, or
    operation of law. She treats abandonment as a form of implied release. Certain cases
    have used a comparable classification. For example, see
Roop v.
    Hofmeyr
, 2016 BCCA 310, 88 B.C.L.R. (5th) 233, at paras.
    30, 41;
[1]

Lywood et al. v. Hunt
(2009), 97 O.R. (3d) 520
    (S.C.), at para. 27, affd 2011 ONCA 229, 2 R.P.R. (5th) 15; and
Phinny
    v. Macaulay
, (2008), 75 R.P.R. (4th) 66 (Ont. S.C.), at
    para. 119.

[65]

Anger and Honsberger

states, at para.
    17:20:60(a), that at common law, an easement will be extinguished by operation
    of law where:

(a)   the purpose for which it was created has
    come to an end;

(b)   the period for which the easement was
    created terminates;

(c)   the right is abused; or

(d)   the same person comes to own the
    dominant and servient lands in fee simple.

[66]

In contrast, at pp. 29-007 to 29-016 of
Megarry
    and Wade, The Law of Real Property
, 8
th
ed.
    (London: Sweet & Maxwell, 2012), the authors describe the mechanisms for
    extinguishment as being by statute, express or implied release, and by unity of
    ownership and possession of both the dominant and servient tenements.

[67]

The authors of
Gale on Easements
describe extinguishment as falling into three categories: by
    operation of law, statute, and release. Operation of law is stated to encompass
    unity of ownership, merger of interests, expiration of a time- limited easement,
    and disappearance of the purpose of an easement.

[68]

Yet another classification is found in
Halsburys
at HRP 315-322. It classifies the methods of
    extinguishment as being by statute, express or implied release, unity of
    ownership, or destruction of either tenement.
Halsburys

states, at HRP 319, that an easement will be extinguished if it was
    granted with a time limit, or for a purpose, that has expired or come to an end.
    However, the authors include extinguishment resulting from expiry of time or
    end of purpose as a subset of extinguishment by release.

[69]

What is to be drawn from all of these
    descriptions?

[70]

A reasonable conclusion is that an easement may
    be extinguished by operation of law in two ways. First, it may be extinguished
    by statute. A good example is found in British Columbias
Property
    Law Act
, R.S.B.C. 1996, ch. 377, s. 35(2), which allows
    the court to modify or cancel an easement where there is,
inter alia
, a material change in the character of the land such that the
    easement is obsolete. Ontarios legislation does not mirror that of British Columbia.
    In extinguishing an easement by statute, some caution may be required. As the
    authors of
Gale on Easements

note at para.
    12-12: An Act should not, however, be construed so as to interfere with
    somebodys property rights without compensation unless the court is obliged so
    to construe it citing
Jones v. Cleanthi
,
[2007] 1 W.L.R. 1604,
    at para. 82.

[71]

Secondly, an easement may be extinguished by
    operation of the common law. Examples include unity of ownership and possession
    of the dominant and servient lands or destruction of either the dominant or
    servient lands. As seen from
Anger and Honsberger
,
Gale on Easements
, and
Halsburys
, extinguishment by operation of law also includes expiry of a time-limited
    easement and disappearance or expiry of the purpose for which the easement was
    created. It seems to me that the former would more properly be the subject
    matter of an express or implied release. If an easement is granted for a
    limited time, it follows that it must have been the subject of an express grant
    that expressly or impliedly provided for a release on the expiration of the
    time limit.

[72]

As for expiry of the purpose for which the
    easement was granted, an easement is not typically extinguished by temporary
    events that impact its use. Some permanence must exist. In Easement Caselaw
    Update, (paper presented to the Ontario Bar Association, Continuing Legal
    Education Program, Easements for Real Estate and Municipal Lawyers: Level II,
    October 6, 2016), Craig Carter writes that: An easement can be extinguished as
    a matter of law when some event occurs that makes the easement unusable or
    unnecessary. Some permanence must exist. A flood that washes over an easement
    is not extinguishment. But global warming causing a sea to cover a right of way
    will be.

[73]

A further example is found in
National
    Guaranteed Manure Co. (Ltd.) v. Donald
(1859), 157 E.R. 737, where the
    court held that an easement to take water to fill a canal ceased when the canal
    no longer existed and was converted to a railway.

Application
    to This Case

[74]

The applications judge stated, at para. 21 of
    his reasons: I also conclude that operation of law is the basis upon which
    Remicorp should succeed. His analysis on this point was limited. Moreover, as
    mentioned, at para. 23, he spoke of abandonment by operation of law, not
    extinguishment. His analysis seemed to focus on whether the reasonable use of
    the Access Easement for its granted purpose persisted. He noted the description
    of the Access Easement as being exclusive, free, uninterrupted and unobstructed
    and that the purpose was to pass over for access to the tracks when or if
    required, not to place or build anything permanent on that land. He concluded
    that Metrolinx was entitled to its easement, but it was to be moved to Part 1.

[75]

Read as a whole, the applications judges
    reasons suggest that he found abandonment based on operation of law due to
    evidence of lack of use by CN and Metrolinx and his perception that Metrolinx was
    not in immediate need of any easement because the Part 1 pathway had been
    blocked by 12 large concrete blocks. In this regard, he analogized the case to
Bost
    Properties Inc. v. Highland West Developments Inc.
, (2002)
    48 R.P.R. (3d) 83 (Ont. S.C.).

[76]

With respect, lack of use and lack of need do
    not amount to extinguishment by operation of law. To the extent that lack of
    need reflects a lack of purpose, the applications judges substitution of the
    Part 1 easement is wholly inconsistent with a lack of purpose. Moreover, it
    runs counter to the express terms of the Easement Agreement. In addition, the applications
    judges reliance on
Bost

Properties
was misplaced. That case
    involved property in the City of Kitchener that had once been rural but later
    became urbanized. The right-of-way at issue was created by deed in 1954 to
    serve as a laneway to provide access to farm property. The farmhouse no longer
    existed and the farm had ceased operations many years before. What was once an
    area of agricultural use was now dormant land awaiting urban development. The
    trial judge decided that the easement in that case was for a limited purpose
    that had disappeared.

[77]

Assuming, without deciding, that the analysis in
Bost Properties
was correct, here the purpose
    associated with the Access Easement  access to the railway lands  cannot be
    said to have disappeared. Indeed, the applications judge acknowledged as much
    by granting an access easement to Metrolinx over Part 1.

[78]

This case is more akin to
Fyfe v.
    James
(2006), 42 R.P.R. (4th) 221 (Ont. S.C.), where the
    court held that an access easement was not extinguished after a new, alternate
    access road was built. The court distinguished the facts in
Bost
    Properties
, and rejected the respondents argument that,
    because the new road provided full ingress and egress to the relevant
    properties, the right-of-way was no longer necessary and therefore
    extinguished. The grant did not provide for the easement to be extinguished by
    alternative access, nor did it stipulate a time limit.

[79]

Here, as in
Fyfe
, nothing in the three instruments registered on title suggest a
    time limit on the Access Easement. While relocation of the Access Easement is
    contemplated in the Easement Agreement, this relocation is solely at the option
    of CN. As the option was not exercised, the Access Easement was not
    extinguished.

[80]

The conclusion that the Access Easement had been
    abandoned or extinguished by operation of law was in error.

Issue Three: Relocation of
    Access Easement to Part 1

(a)

Parties
    Positions

[81]

Metrolinx also appeals the applications judges
    decision relocating the Access Easement from Part 5 to Part 1. It submits that
    the applications judge made three errors in exercising his discretion to move
    the Access Easement: (i) the decision ignored Metrolinxs registered contractual
    right; (ii) having found that the Access Easement had been abandoned, the applications
    judge lacked jurisdiction to modify the Access Easement under s. 61(1) of
    the CLPA or s. 119(5) of the LTA; and (iii) he failed to apply the proper legal
    test and failed to adhere to established legal principles.

[82]

Remicorp submits that the applications judge
    properly interpreted the grant of the Access Easement and determined that the
    rationale for the original location and configuration no longer existed. Moreover,
    the parties to the Easement Agreement knew at the time it was registered that
    the Access Easement had already been relocated.

[83]

Remicorp submits that the applications judge did
    not relocate an abandoned easement. Rather, he found that it had been relocated
    by operation of law and by statute and that there was sufficient evidence of an
    implied release, as well. It asserts that the easement was properly relocated
    under the CLPA and the LTA and the applications judge made no error in
    principle.

(b)

Analysis

[84]

First, I agree with Metrolinx that while the applications
    judge recognized the validity and effect of the Easement Agreement at paras. 5
    and 15 of his reasons, his decision effectively deprived the Easement Agreement
    of any force or effect. In essence, the applications judge appropriated from
    Metrolinx the benefit of the Easement Agreement in the absence of evidence of any
    consideration including   any allowance for compensation.

[85]

Secondly, I also agree with Metrolinx that s.
    61(1) of the CLPA and s. 119(5) of the LTA require that a valid covenant
    exist over which the court can exercise its jurisdiction. Subsection 61(1) of
    the CLPA states:

Where there is annexed to land a condition or
    covenant that the land or a specified part of it is not to be built on or is to
    be or not to be used in a particular manner, or any other condition or covenant
    running with or capable of being legally annexed to land, any such condition or
    covenant may be modified or discharged by order of the Superior Court of
    Justice.

[86]

Subsection 119(5) of the LTA states:

The first owner and every transferee and every
    other person deriving title from the first owner, shall be deemed to be
    affected with notice of such condition or covenant, but any such condition or
    covenant may be modified or discharged by order of the court on proof to the
    satisfaction of the court that the modification will be beneficial to the
    persons principally interested in the enforcement of the condition or covenant.

[87]

According to the applications judge, the Access
    Easement had been abandoned. He therefore erred in finding that there was a
    covenant over which the court could exercise its jurisdiction.

[88]

In any event, the applications judge did not
    apply the correct legal principles in concluding that the Access Easement
    should be relocated.

[89]

Subsection 61(1) of the CLPA does not indicate
    how a courts discretion is to be exercised. Subsection 119(5) of the LTA
    requires proof that the modification will be beneficial to the persons principally
    interested in the enforcement of the condition or covenant.

[90]

In
Re George

(1926),
    59 O.L.R. 574 (C.A.), this court considered whether a modification would be beneficial
    to the persons principally concerned, a phrase previously contained in the CLPA
    and which is nearly identical to that found in the LTA. Middleton J.A. stated,
    at pp. 577-578:

The provisions of the statute (12 & 13
    Geo. V. ch. 53) are not easy to interpret. A Judge is empowered to modify or
    discharge building restrictions on proof to his satisfaction that the
    modification will be beneficial to the persons principally concerned. If this means
    beneficial to the applicant the provision is senseless, for the relief would
    not be sought unless the applicant deemed it a benefit. If it means beneficial
    to the respondents it is again meaningless, for the respondents would
    undoubtedly release any right they may have if for their benefit. The meaning
    that has been given to the expression in practice is that the Judge must
    satisfy himself that the balance of convenience is in favour of granting the
    application, having regard to the rights and interests of both parties, and I
    think it may safely be said that the order should not be made unless the
    benefit to the applicant greatly exceeds any possible detriment to the
    respondents:
Re Button
(1925), 57 O.L.R. 161.

[91]

In
Re

Ontario Lime Co. Ltd.
(1926), 59 O.L.R. 646 (C.A.),
in discussing the CLPA, this court stated, at p. 651:

It has been more than once pointed out that
    under this statute there is no power to make compensation to a landowner who is
    prejudicially affected, and the jurisdiction is one to be exercised with the
    greatest caution, and an order should seldom, if ever be made which will in
    truth operate to the prejudice of the adjacent landowner who has any real
    rights. The true function of the statute is to enable the Court to get rid of a
    condition or restriction which is spent and so unsuitable as to be of no value
    and under circumstances when its assertion would be clearly vexatious.

[92]

The applications judge did not apply these
    principles. Moreover, he ignored the warning given by this court in
Ontario
    Lime
that the jurisdiction be
    exercised with caution and that an order be seldom granted if prejudicial to
    the adjacent landowner
. It is also difficult to
    see how the applications judge could conclude that the modification was
    beneficial to the interested parties. The relocation deprived Metrolinx of its
    rights under the Easement Agreement and results in significant traffic flow at
    the site of the alternative easement on Part 1. With the exception of making
    certain adjustments such as the removal of structures erected without building
    permits, the benefits to Remicorp of relocating the Access Easement are not
    obvious. Indeed, they do not appear to have been considered or identified by
    the applications judge.

[93]

For these reasons, the applications judge erred
    in relocating the Access Easement to Part 1.

Issue Four: Remedy

[94]

Based on my conclusions relating to the first
    and second issues, Metrolinx continues to have an easement over Part 5 of the
    Property. It follows that any encroachment on the Access Easement should be
    removed.

[95]

In addition, as acknowledged at para. 2 of the
    parties Agreed Statement of Facts dated December 3, 2015, portions of a metal
    plate fence and a portion of a metal clad building and its canopy are
    encroaching on Metrolinxs lands to the south. The applications judge failed to
    address Metrolinxs request that these encroachments be removed and I see no
    basis on which they should not be. These encroachments should therefore also be
    removed. Metrolinx has suggested a six-month time frame for removal, which
    appears reasonable under the circumstances.

E.

DISPOSITION

[96]

For these reasons, I would allow Metrolinxs
    appeals, set aside the judgments of the applications judge and substitute
    paragraphs 1, 2, 4, and 5 of the form of draft order found at Tab D of
    Metrolinxs factum.

[97]

As agreed by the parties, Remicorp is to pay
    Metrolinxs costs of the applications and the appeal fixed in the amounts of $35,000
    and $20,000, respectively, inclusive of disbursements and applicable taxes.

Released:

RJS                                       Sarah E.
    Pepall J.A.

MAY 30 2017                          I agree Robert
    Sharpe J.A.

I agree
    C.W. Hourigan J.A.


APPENDIX

The 2002 conveyance from CN to Remicorp describes the Access
    Easement and Maintenance Easement in this case as follows:

Reserving unto the Transferor for itself, its successors and
    assigns, agents, employees, tenants and licensees, an exclusive, free,
    uninterrupted and unobstructed right and easement in the nature of a
    right-of-way for access and/or egress by the Transferor, its agents, employees,
    tenants, licensees, guests, servants and visitors and their respective vehicles
    and equipment over, across, along and upon the lands described as Part of Lot
    20, Block C, Registered Plan 339 or 389, City of Toronto, designated as Part 5
    on Reference Plan 66R-20057 (the Access Lands) for the purpose of accessing
    the adjacent and abutting lands of the Transferor and the Maintenance Lands (as
    hereinafter defined) and for all purposes necessary for or incidental to the
    exercise and enjoyment of the rights therein reserved (the Access Easement);
    and

Reserving unto the Transferor for itself, its successors and
    assigns, agents, employees and licensees, an exclusive, free, uninterrupted and
    unobstructed right and easement in the nature of a right-of-way by the
    Transferor, its agents, employees and licensees and their respective vehicles
    and equipment over, across, along and upon the lands described as Part of Lots
    19 and 20, Block C, Registered Plan 339 or 389, City of Toronto, designated as
    Parts 2 and 3 on Reference Plan 66R-20057 (the Maintenance Lands) (the Access
    Lands and the Maintenance Lands hereinafter referred to as the Burdened
    Lands) for the purpose of maintenance of the Transferors railway tracks and
    other related railway operations and for all purposes necessary for or
    incidental to the exercise and enjoyment of the rights therein reserved (the
    Maintenance Easement) (the Access Easement and the Maintenance Easement
    hereinafter referred to as the Easements).

The benefit of the Easements shall be appurtenant to and run
    with each part of the abutting and adjacent lands of the Transferor as
    described below (the Benefited Lands) and shall be for the benefit of the
    Transferor and its successors, assigns, agents, employees, tenants, licensees,
    from time to time of the Benefited Lands and others claiming under them. The
    burden of the Easement shall bind the Transferee and its successors and assigns
    and others claiming through it and shall be annexed to and run with every part
    of the Burdened Lands.





[1]

Although that case relies on
Megarry and Wade, The
    Law of Real Property
, 7
th
ed. (London: Sweet
    & Maxwell, 2008), which does not actually use that classification.


