



COURT OF APPEAL FOR ONTARIO

CITATION: Toronto-Dominion Bank v. Wise, 2016 ONCA 629

DATE: 20160816

DOCKET: C60961

Weiler, Hourigan and Huscroft JJ.A.

BETWEEN

The Toronto-Dominion Bank

Applicant (Respondent)

and

Sheila Wise,
Jordanna Lipson, Earl Lipson
,
    2276552 Ontario Inc. and 1432975 Ontario Limited

Respondents (
Appellants
)

Michael Simaan and Jaclyn McNamara, for the appellants
    Jordanna Lipson and Earl Lipson

Daniel Dooley, for the respondent

Heard: March 30, 2016

On appeal from the order of Justice Peter A. Douglas of
    the Superior Court of Justice, dated August 7, 2015, with reasons reported at
    2015 ONSC 5014.

Huscroft J.A.:

[1]

Ben and Sheila Wise (the Wises) owned
    lakefront property. They wanted to sever the land into two lots and gift one of
    the lots to their daughter and son-in-law, Jordanna and Earl Lipson (the
    Lipsons). The severance was eventually completed following the death of Ben
    Wise in 2002. The lot gifted to the Lipsons connected with a local road, but the
    lot the Wises retained for themselves did not have road access. The Wises did
    not reserve an easement over the Lipsons lot when the gift was completed.

[2]

The respondent bank, which holds a mortgage over
    the parcel of the land retained by the Wises (and now owned by Sheila Wise), brought
    an application for an order declaring that an easement exists for the benefit
    of the Wise property. Although there is access to the Wise property from the
    lake, the application judge found that water access was impractical and, as a
    result, recognized the banks claim for an easement of necessity over the
    Lipson property. He directed a trial to determine the location of the easement
    in the event the parties were unable to agree.

[3]

The Lipsons appeal.

[4]

In my view, the application judge erred in concluding
    that there was an easement of necessity. I would allow the appeal, for the
    reasons that follow.

Background

[5]

The properties in question are lakefront
    properties on Lake Manitouwabing. The Wises owned a large parcel of land (the
    combined parcel). The combined parcel was adjacent to the Inn and Tennis
    Resort lands, which were owned by Ben Wises company, MB Investments Limited,
    until 2011.

[6]

The combined parcel was severed in 2003. This
    resulted in two lots, Part 1 and Part 2. Sheila Wise retained Part 2, where she
    has a cottage. Part 1 was gifted to the Lipsons.

[7]

The gift was the culmination of a long process
    begun by Ben Wise some years earlier. Permission to sever the combined parcel
    was denied by planning officials because Part 2 would have become a
    water-access only lot. Although there were water-access only lots on the lake,
    no additional such lots were being approved.

[8]

The combined parcel had access to a road, but the
    road connected to the proposed Part 1 rather than Part 2. However, Part 2 was
    accessible through the Inn and Tennis Resort lands. Ben Wise considered adding
    Part 2 to the Inn and Tennis Resort lands in order to take advantage of the
    road access they had. He chose not to pursue that plan because of adverse tax
    consequences. Instead, he decided to enter a restriction under s. 118 of the
Land
    Titles Act,
R.S.O. 1990, c. L.5, on Part 2, which would have prevented
    it from being sold separately from the Inn and Tennis Resort lands.

[9]

That restriction was never registered. Following
    the death of Ben Wise, Part 1 was conveyed to the Lipsons and no easement was
    reserved in favour of Part 2. Part 2 had no legal entitlement to road access across
    the Inn and Tennis Resort lands and so became a water-access only lot, despite
    the absence of prior approval. However, Sheila Wise continued to obtain access
    to her home through the Inn and Tennis Resort lands. These lands were purchased
    by 2276552 Ontario Inc. (227) in 2011 through power of sale.

[10]

Sheila Wise is in default on two mortgages on
    Part 2. The respondent bank holds a first mortgage on the property and 1432975
    Ontario Limited holds a second mortgage. Both mortgagors wish to sell the
    property.

[11]

The respondent bank brought an application for an
    order declaring that an easement of necessity exists over any of the adjacent properties
    in favour of Part 2.

The application judges decision

[12]

The application judge determined that an
    easement of necessity is available to both grantors and grantees of land if either
    the land retained or the land granted is rendered inaccessible by severance and
    sale. He stated: The ultimate objective is that land should be able to be
    used. The application judge considered that it was unnecessary to direct a
    trial on the question of the Wises intentions at the time of the severance and
    gift of Part 1, because easements are creatures of public policy and
    [p]ublic policy must trump the intentions of individual landowners.

[13]

The application judge considered that mere
    inconvenience was insufficient to allow the grant of an easement of necessity,
    but found that the common law requirement of absolute or strict necessity had
    developed into a rule of practical necessity, citing
Hirtle

v.
    Ernst
(1991)
,
10
    N.S.R. (2d) 216, [1991] N.S.J. No. 531 (S.C.).

[14]

The application judge concluded that water
    access to Part 2 did not preclude an easement of necessity. The test, he said,
    citing
Dobson v. Tulloch
(1994), 17 O.R. (3d) 533, [1994] O.J. No. 531
    (C.J. (Gen. Div.)), affd (1997), 33 O.R. (3d) 800 (C.A.), is whether water
    access is sufficient to make unnecessary an easement of necessity that is
    otherwise necessary for the reasonable enjoyment of the property (para. 55).

[15]

The application judge found no evidence that
    Part 2 had ever been accessed by water and accepted the uncontradicted evidence
    of the respondents surveyor, Paul Forth, that water access to Part 2 was
    impractical. He found, specifically, that water access does not offer a
    viable, or practical, means of access to and egress from Part 2 (para. 62). He
    concluded that an easement of necessity over Part 1 arose in April 2003, when
    Part 2 became landlocked and the owners had no legal entitlement to cross any
    adjoining lands to get to their property.

[16]

The application judge ordered a trial to
    determine the most efficacious and least intrusive location of the easement in
    the event the parties were unable to agree.

Issue on appeal

[17]

Sheila Wise, a respondent on the application, did
    not participate in the appeal. Nor did 227, owner of the Inn and Tennis Resort lands.

[18]

The appellants contend that the application
    judge erred in three ways:

1.

by considering
    the access to the residence on the property rather than access to the property
    itself and by applying the wrong test;

2.

by admitting the evidence of the surveyor on the
    ultimate issue the application judge was required to determine; and

3.

by determining that easements of necessity are based
    on public policy considerations rather than the intention of the parties.

[19]

I begin with a brief review of the principles
    governing easements of necessity, before applying the relevant principles to
    the facts of this case.

The principles governing easements of necessity

[20]

The basic requirements of an easement of
    necessity were described by this court in
McClatchie v. Rideau Lake
    (Township)
, 2015 ONCA 233, [2015] O.J. No. 1737. As Rouleau J.A.
    explained, easements of necessity are presumed to have been granted when the
    land that is sold is inaccessible except by passing over adjoining land
    retained by the grantor. The concept arises from the premise that the easement
    is an implied grant allowing the purchaser to access the purchased lot (para.
    48).

[21]

It is well established that the necessity of an
    easement of necessity is determined at the time of the grant (para. 49).
    Moreover, an easement of necessity must be necessary to use or access the
    property; if access without it is merely inconvenient, the easement will not be
    implied (para. 53).

[22]

As the application judge noted,
McClatchie
addresses the implication of easements of necessity only from the perspective
    of a grantee of land  the person who obtains the land in favour of which an
    easement is required. It is well established, however, that an easement of
    necessity is also available to a grantor of land  the original owner who
    retains part of the land: see
Gale on Easements,
19th ed. (London:
    Sweet & Maxwell, 2012), at p. 178;
Depew v. Wilkes
(2002), 60 O.R. (3d) 499 (C.A.), at para. 21
.

[23]

Although English authority holds that the test
    for an easement of necessity is more difficult to meet when the easement is
    sought by the grantor rather than the grantee (see
Gale on Easements
,
    p. 179),
it is not necessary to consider the
    matter for the purposes of this case. This case involves a grantor and there is
    no doubt that the test involving grantors is strict necessity.

[24]

The strong test of strict
    necessity ensures that
grantors are not permitted to
    derogate from the terms of their grant of land. If they want to reserve an
    easement, they should do so explicitly at the time they make the grant.
An easement of necessity will be found only if it was
    necessary in order for the grantor to be able to use his or her property at the
    time of the grant.
Water access to property defeats a claim of
    necessity, regardless of convenience.

[25]

This courts decision in
Barbour v. Bailey,
2016
    ONCA 98, [2016] O.J. No. 3261, illustrates these points, albeit in the
    context of a claim by a grantee rather than a grantor. The court held that an easement
    of necessity was not available because the property for which the easement was
    sought  an island sometimes joined to the beach isthmus during periods of low
    water levels  was not
inaccessible and hence
    unusable. Access to the island was certainly not convenient: previous owners of
    the island had used a rowboat, either by rowing it to the island or pulling as
    they waded across the water, or they had walked along the shoreline. Nevertheless,
    water access was possible, and that was enough to defeat an easement of
    necessity. The applicants preference for a quicker and more convenient means
    of access by way of an easement was irrelevant.

[26]

See also
Fitchett v. Mellow
, (1897) 29 O.R. 6;
Hardy
    v. Herr
(1965), 1 O.R. 102 (H.C.), affd (1965), 2 O.R. 801 (C.A.); and
Manjang
    v. Drammeh
(1990), 61 P. & C.R. 194, (P.C.)
,
at p. 4. Although the
trial judge in
Dobson
considered that water access could defeat an easement
    of necessity, the case was decided on its own facts  in particular, a finding
    that the river in question was not navigable at the time of the grant.

Applying
    the governing principles

[27]

At the time of the
    grant, in 2003, there was no legal entitlement to access to Part 2 across the
    Inn and Tennis Resort lands, and the Wises did not reserve an easement through Part
    1, which was gifted to the Lipsons.

[28]

Sheila Wises evidence
    suggests that she expected to continue to enjoy access to Part 2 across the Inn
    and Tennis Resort lands. Evidence from Ms. Wise and Earl Lipson also
    suggests that it was Ben Wises intention to make Part 2 a water-access only
    property. The matter is not free from doubt, however, and the application judge
    made no decision concerning the parties intentions.

[29]

Be that as it may, there
    is no dispute that there was water access to Part 2 at the time of the grant,
    and this is sufficient to defeat the respondents application for an easement
    of necessity. The fact that Part 2 had never been accessed by water is
    irrelevant. So too is the fact that water access was, and probably remains,
    inconvenient or impractical. Water access was available, so Part 2 was not rendered
    unusable when the grant to the Lipsons was made.

[30]

The application judge
erred in holding that water access had to be sufficient for
    reasonable enjoyment of the property in order to render an easement of
    necessity unnecessary. Although
Barbour
was not available for the
    application judge to consider, it is now the authority on this question in
    Ontario. It was enough that water access to Part 2 existed.

[31]

There was no evidence that water access was not
    possible at the time of the grant. At its highest, the evidence established
    that water access does not offer a viable, or practical, means of access to
    and egress from Part 2, as the application judge put it, and this is not
    sufficient to establish an easement of necessity.

[32]

The application judges error flows from his
    conclusion that the necessity test had moved from strict necessity to
    practical necessity. This is not correct. The necessity test has not been
    reduced to a requirement of practical necessity, as the Nova Scotia Supreme
    Court held in
Hirtle
. The recent decisions of this court in
McClatchie
and
Barbour
reaffirm that the test for easements of necessity in
    Ontario is strict necessity.

[33]

In my view,
Hirtle
is not sound authority
    for the proposition that easements of necessity are creatures of public policy.
    Although there is no doubt that easements of necessity have the salutary effect
    of allowing land to be used, rather than rendered useless, easements of
    necessity flow from the intentions of the parties to a grant, not from public
    policy. Put another way, public policy does not provide an independent basis
    for a court to recognize an easement of necessity regardless of the parties
    intentions in particular circumstances.

[34]

This is reflected in
McClatchie
, which
    describes easements of necessity as arising as a matter of presumption and as
    an implied aspect of the grant. As the English Court of Appeal explained in
Nickerson
    v. Barraclough
,  [1981] Ch. 426 (C.A.), at p. 447
:

[T]he law relating to ways of necessity rests not upon a basis
    of public policy but upon the implication to be drawn from the fact that unless
    some way is implied, a parcel of land will be inaccessible. From that fact the
    implication arises that the parties must have intended that some way giving
    access to the land should have been granted.  Public policy may inhibit the
    parties from carrying their intention into effect, but I cannot see how public
    policy can have a bearing upon what their intention was. In my judgment, that
    must be ascertained in accordance with the ordinary principles of construction,
    the language used and relevant admissible evidence of surrounding
    circumstances.

See also
Adealon International Proprietary
    Ltd. v. Merton LBC
, [2007] E.W.C.A. Civ. 362, [2007] 1 W.L.R. 1898, at para.
    11;
North Sydney Printing Pty Ltd. v. Sabemo Investment Corporation Pty
    Ltd.,
[1971] 2 N.S.W.L.R. 150; and
Russell v. Pennings,
[2001] W.A.S.C.A.
    115.

[35]

In summary, the application judge erred by
    failing to apply the test of strict necessity. Even assuming that the evidence
    of the surveyor was admissible, it did not satisfy that test. The availability
    of water access means that the test of necessity at the time of the grant is
    not met. Finally, the application judge also erred in law in holding that
    easements of necessity are creatures of public policy.  Accordingly, an
    easement of necessity cannot be implied for the benefit of Part 2.

Disposition

[36]

I would allow the appeal.

[37]

The appellants are entitled to their costs
    below, in the agreed amount of $11,000, and to costs on the appeal in the
    agreed amount of $13,000, both amounts inclusive of taxes and disbursements.

Released: August 16, 2016 GH

Grant
    Huscroft J.A.

I
    agree K.M. Weiler J.A.

I
    agree C.W. Hourigan J.A.


