



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Wolff v. Canada (Attorney General),









2017 BCCA 30




Date: 20170120

Docket: CA43467

Between:

Frank Albert Wolff

Appellant

(Plaintiff)

And

Attorney General
of Canada

Respondent

(Defendant)






Before:



The Honourable Madam Justice Saunders

The Honourable Mr. Justice Tysoe

The Honourable Madam Justice Dickson




On appeal from:  An
order of the Supreme Court of British Columbia,
dated February 1, 2016 (
Wolff v. Canada (Attorney General)
,
2016 BCSC 147, Victoria Docket 15-0700).




Counsel for the Appellant:



C.N. Christie





Counsel for the Respondent:



O.R. Pulleyblank





Place and Date of Hearing:



Victoria, British
  Columbia

December 1, 2016





Place and Date of Judgment:



Vancouver, British
  Columbia

January 20, 2017









Written Reasons by:





The Honourable Mr. Justice Tysoe





Concurred in by:





The Honourable Madam Justice Saunders

The Honourable Madam Justice Dickson








Summary:

The summary trial judge
declared that the appellant had an equitable easement by virtue of proprietary
estoppel to access his property by way of a laneway, but that the easement did
not include the right to install a power line to the property.  The judge awarded
costs of the proceeding to the respondent.  Held: Appeal dismissed, except on
the costs issue.  The judge did not err in failing to consider the reasonable
expectations of the parties or in failing to do minimum equity.  Both those
matters go to the issue of the appropriate remedy, and not to the extent of the
equity established by the evidence.  Any rights ancillary to the easement did
not include the right to install a power line within the easement area.  The
issue of costs is remitted to the summary trial judge.

Reasons for Judgment of the Honourable
Mr. Justice Tysoe:

Introduction

[1]

The issues on this appeal relate primarily to the scope of an equitable
easement in favour of the appellant over a laneway within the Pacific Rim
National Park (the Park).  The summary trial judge ordered that the appellant
has an equitable easement to access his property using the laneway but that the
easement did not include the right to install a power line along the laneway.

[2]

The appellant appeals the order, asserting that the judge made three
errors in applying the doctrine of proprietary estoppel to determine that the
equitable easement did not include the right to install an underground power
line.

[3]

For the reasons that follow, I would dismiss the appeal except to the
limited extent of remitting the issue of costs to the summary trial judge.

Facts

[4]

The parties submitted an agreed statement of facts and two affidavits to
the summary trial judge.  I will summarize the facts briefly.

[5]

The appellant is the owner of a property in Port Renfrew, B.C. (the Property),
which is not immediately adjacent to a paved road.  The Property is bordered on
the north and west by four privately owned properties, and is otherwise
surrounded by the Park.  The only access to the Property is by way of a narrow
gravel path along the east boundary of the property, which runs across
approximately 100 metres of the Park.

[6]

The Property and the adjoining part of the Park were initially part of a
single parcel that fronted on Pacheena Road.  There was a subdivision in 1961
that made the Property its own parcel.  There was an occupied house on the
Property at the time of the subdivision. The approving officer with the
Ministry of Highways who approved the subdivision plan was initially concerned
that there would be no legal access to the Property but he approved the plan
after being satisfied that the laneway in question, which was used by the
occupant of the house, was maintained as a public road.

[7]

The lands on which the laneway is situate had been owned by British
Columbia Forest Products, but were transferred to the provincial government in
1987, and then to the federal government in 1992, when they became part of the
Park.

[8]

The appellant purchased the Property in 2006.  The former owner had a
conditional authorization from Parks Canada to access the Property by motor
vehicle via the laneway.  The appellant has continued to access the Property by
way of the laneway without objection by Parks Canada.  The Property has never
had electricity.

[9]

In March 2007, the appellant made a request of Parks Canada for an
easement giving him the right to install an electric line to the Property. 
Parks Canada refused the request on the basis that utility corridors across
national park reserve lands were not permitted.  In 2014, the appellant
approached three of the adjacent neighbours for such an easement without
offering them any payment, and they all refused.

[10]

In August 2015, the appellant commenced the underlying proceeding
seeking a declaration of an easement of necessity or an equitable easement and
a declaration that he was entitled to use the easement for any lawful purpose
necessary for his reasonable enjoyment of the Property, including the right to
install a hydro line.

[11]

The appellant made an application to have the proceeding determined by
way of a summary trial.  In the response to the application, the respondent
stated there was no dispute that the appellant has the lawful right to access
the Property.  The respondent took the position that the real issue was about
the appellant endeavouring to improve the Property by acquiring electric
service as a right ancillary to what the respondent referred to as an unnecessary
easement.

Decision of the Summary Trial Judge

[12]

The claim for an easement of necessity was not pressed at the summary
trial and, in his reasons for judgment indexed as 2016 BCSC 147, the summary
trial judge dealt primarily with the claim for an equitable easement based on
the doctrine of proprietary estoppel.

[13]

The judge reviewed several case authorities dealing with the doctrine of
proprietary estoppel, including
Maritime Telegraph and Telephone Co. v.
Chateau LaFleur Development Corp.
, 2001 NSCA 167, leave to appeal refd
[2002] S.C.C.A. No. 14;
Idle-O Apartments Inc. v. Charlyn Investments
Ltd.
, 2014 BCCA 451; and
Pogachar v. Ontario (Minister of Natural
Resources)
(2005), 54 R.P.R. (4th) 201 (Ont. S.C.).

[14]

The judge inferred that by maintaining the laneway as a travelled
highway, British Columbia Forest Products had represented there would be
continued access to the Property across the laneway.  He found that this
representation was relied on by the owner of the Property and the approving
officer at the time of the 1961 subdivision when it was concluded that the
Property could forgo its other access in favour of access by way of the
laneway.  His reasoning continued as follows:

[28]      On
that basis, I would say that Mr. Wolff has a specific right to access the
property based on the representation that was made by the conduct of the owners
and the [approving officer].  Whether the right to access the property
through the path is a mere right or an equitable easement I think is a matter
of form rather than substance.  But I would find that based on equitable
principles, Mr. Wolff has a right to access his property using the
laneway.  Canada does not dispute that right exists and seems to concede
that it will be a continuous right associated to the property.

[15]

The judge then considered whether proprietary estoppel could provide an
implied right beyond mere access to the property (i.e., the right to install an
electric line).  He concluded that there was no history associated with the
Property in connection with a power line that fit within the test for
proprietary estoppel and that there was no evidence of any reliance such that
it would be unconscionable to refuse the right to install a power line in the
laneway (para. 33).

[16]

The judge next considered the issue of ancillary rights.  He referred to
the decision in
Kasch v. Goyan
(1993), 103 D.L.R. (4th) 51, 81 B.C.L.R.
(2d) 268 (C.A.) at para. 11 for the proposition that ancillary rights are
associated with the exercise or enjoyment of the easement, but commented that
there are cases in which the ancillary rights benefited the dominant tenement
as well as expanding the use or enjoyment of the easement.  He then
distinguished the decision in
Pogachar
, which had been relied upon by
the appellant, and concluded that an ancillary right to install an underground
power line would not be justified (para. 41).

[17]

In the concluding paragraph of his reasons, the judge stated that he
could not find the right to install an electric line based on the doctrine of
proprietary estoppel or the concept of ancillary rights.  He then stated that
the action must be dismissed and that the respondent was entitled to costs. 
However, the order signed by the judge did not dismiss the action.  Rather, the
order declared that the appellant had a right to access the Property using the
laneway but that the appellant did not have the right to install a power line
along the laneway.  The order also gave costs to the respondent.

Issues on Appeal

[18]

The appellant contends the summary trial judge erred in three respects
when applying the doctrine of proprietary estoppel:

a.          in
failing to consider the reasonable expectations of the appellants predecessors
in title.

b.          in treating ancillary rights as being frozen in time.

c.          in finding that the minimum
equity did not include a right to hydro-electric access.

The appellant also maintains the judge erred in granting
costs to the respondent when success was divided.

[19]

Although I have concluded that the appellants arguments on the first
and third grounds of appeal suffer from a similar flaw, I will deal with the grounds
in the order in which they were presented by the appellant.

Discussion on Proprietary Estoppel

[20]

Before addressing the specific errors alleged by the appellant, it will
be useful to briefly outline the general principles of proprietary estoppel. 
The approach to be taken was set out by Lord Justice Scarman in the seminal
case of
Crabb v. Arun District Council
, [1976] 1 Ch. 179 at 192-93:

In such a case I think it is now
well settled law that the court, having analysed and assessed the conduct and
relationship of the parties, has to answer three questions.  First, is there an
equity established?  Secondly, what is the extent of the equity, if one is
established?  And, thirdly, what is the relief appropriate to satisfy the
equity?

[21]

In order to determine the question of whether an equity has been
established, some cases have posed four sub-questions (see
Idle-O Apartments
at paras. 22 and 24).  Those sub-questions were combined into the
following two-pronged test by Madam Justice Bennett in
Sabey v. Rommel
,
2014 BCCA 360 at para. 30 (which the summary trial judge set out at
para. 21, quoting from
Idle-O Apartments
at para. 49):

1.

Is an equity established? An equity will be established where:

a.   There was an assurance or representation, attributable to the
owner, that the claimant has or will have some right to the property, and

b.   The claimant
relied on this assurance to his or her detriment so that it would be
unconscionable for the owner to go back on that assurance.

For the purposes of the present case, it is important to
note that the assurance or representation need not be express and can be
inferred from the conduct of a party, and that acquiescence can amount to an
assurance or representation.

[22]

The summary trial judge held that an equity was established.  As there
was no express assurance or representation by the former owner of the laneway,
he effectively found that the former owner had, by its acquiescence,
represented to the owner of the Property that he or she could use the laneway
to access the Property.  The owner relied on this implicit representation in
causing the Property to be subdivided with no other access, and it would have
been unconscionable for the owner of the laneway to go back on this
representation.  The judges holding that an equity was established is not in
dispute on this appeal.

[23]

What is in dispute on this appeal relates to the second and third
questions articulated in
Crabb
; namely, the extent of the equity and the
appropriate remedy.

(a)
Reasonable Expectations

[24]

The appellant submits that the reasonable expectations of his
predecessors in title ought to be considered when determining the equitable
interest.  In that regard, he points to two competing theories of proprietary
estoppel as discussed in W. David Rankin, Concerning an Expectancy-Based
Remedial Theory of Promissory Estoppel (2011) 69(2) U.T. Fac. L. Rev. 116.  In
brief terms, the reliance theory protects the detrimental reliance by the
promisee, but no more (at 124).  The expectation theory is not limited to the
reliance loss of the promisee but serves to fulfil the expectation engendered
by the promise (at 12627).

[25]

The appellant says this Court, in
Idle-O Apartments
at para. 75,
has endorsed the expectation theory of proprietary estoppel, and the summary
trial judge erred in para. 33 of his reasons by considering reliance only
and failing to consider the reasonable expectations of people living on the Property. 
He goes on to argue that the laneway was part of a public road and that the
reasonable expectations of the owners were that services such as hydro power
would be installed underneath the laneway when they became available because
services are commonly installed within the right-of-way of public roads.

[26]

In my view, the appellant is conflating two of the questions to be asked
in claims of proprietary estoppel.  He is attempting to import the expectation
theory that is to be considered as part of the third question (the appropriate
remedy) into the second question (the extent of the equity).

[27]

In para. 33 of his reasons, the judge was determining the extent of
the equity.  He had already concluded that an equity was established and he was
considering whether the extent of the equity went beyond the right of access
and included the right to install an underground power line.  In that regard,
he looked to any evidence with respect to an assurance or representation made
by the owners of the laneway and any evidence with respect to reliance by the
owners of the Property.  He concluded there was no evidence of an assurance or
representation regarding the installation of a power line or any reliance on
any such assurance or representation.  Thus, he held that it would not be
unconscionable for the owner of the laneway to refuse the right to install a
power line in the laneway.  In my opinion, the judge followed the correct
approach.

[28]

The reasonable expectations of the promisee are to be considered at the
remedy stage of the test, not at the stages of determining whether an equity
exists and the extent of the equity.  This is apparent from the introduction in
the Rankin article (at 117):

The question of
the
proper remedy
when an estoppel has been raised has relatively
recently found itself at the centre of much academic attention.  Prominent
scholars  have presented arguments in favour of limiting relief to the
reliance loss of the promisee. .. other leading academics have argued that,
once raised, a promissory estoppel should prevent (
estoupe
) the promisor
from acting inconsistently with the promise  thereby protecting the
expectation interest engendered by them.

[Footnotes
omitted; underlining added.]

[29]

Similarly, it is clear that this Courts discussion of reasonable
expectations in
Idle-O Apartments
was in the context of the appropriate
remedy once the extent of the equity is determined:

[75]      That said, there is
no doubt that the claimants reasonable expectations will usually be a very
important factor, and perhaps the primary factor,
in the fashioning of a
remedy for proprietary estoppel
.

[Underlining
added.]

[30]

In my view, the judge did not fail to consider the reasonable
expectations of the owners of the Property.  After concluding that the extent
of the equity was restricted to accessing the Property, he fashioned a remedy
that accommodated the reasonable expectations of owners of property who had
been given an assurance of access, namely an equitable easement of access.  Thus,
the judge did not err as asserted by the appellant.

[31]

I wish, however, to add two comments about the appellants submissions
on this point.  First, he places reliance on the fact that the laneway was part
of a public road.  While it is true that the approving officer approved the
1961 subdivision because the laneway was maintained as a public highway, there
was no evidence that the owners of the laneway gave an assurance or made a
representation that it would continue to be maintained as a public road.  One
could question whether it was a reasonable expectation of an owner of the
Property that the laneway would continue to be maintained as a public road.

[32]

My second comment is that the reasonable expectations of the holder of
an easement over what may be regarded as a public road does not necessarily
include the expectation that services will be installed within the easement.  A
case touching on this point in the context of determining the intentions of the
parties to an express easement is
Robb v. Walker
, 2014 BCSC 408, affd
2015 BCCA 117.  In that case, an express easement was granted over what was
considered to be a public road.  The easement was expressed to permit the
grantee to use, enter, pass and repass over and upon the easement area.  It
was held that the easement did not include the right to install a sewer line
within the easement area.

(b)
Ancillary Rights

[33]

The parties are agreed that an accurate description of ancillary rights
is contained in the decision of
Kasch v. Goyan
:

[11]
In my opinion, the question of what rights are reasonably
necessary incorporates into it the usual factors that accompany any question of
reasonableness, namely, a consideration of all of the circumstances which are
in any way relevant. That consideration should be followed by a decision
whether in all of those circumstances what is done or what is proposed is reasonably
necessary to the exercise or enjoyment of the easement.

[34]

The appellant says that ancillary rights are not frozen in time and
evolve with social conditions.  In that regard, he relies on the following
passage from
Depew v. Wilkes
(2002), 60 O.R. (3d) 499 (C.A.):

[24]      In the present case, I agree with the respondents
that the appellants had to establish that parking was, in the words of
Ellenborough
Park
[
In re Ellenborough Park; In

re Davies, Powell v. Maddison
,
[1955] 2 All E.R. 38, [1956-57] Ch. 131] reasonably necessary for the better
enjoyment of the dominant tenements.  The reasonable necessity requirement is
fact specific and must be applied in a flexible manner.  As was said in Anger
and Honsberger, [Anger and Honsberger:
Law of Real Property
, 2nd ed.
(Aurora: Canada Law Book, 1985)] at p. 927:

What is reasonably necessary must be a flexible criterion
and have reference to current social conditions and the prevailing patterns and
trends of conduct.  What today might not be regarded to be a reasonable amenity
for the better enjoyment of a property might be regarded as a reasonable
amenity tomorrow.

[35]

The appellant submits that the summary trial judge made the correct
inquiry at paras. 29 and 30 of his reasons but arrived at the incorrect
legal conclusion at para. 41 of his reasons.  In reply, the respondent
says that it was unnecessary for the judge to have considered the topic of
ancillary rights because the doctrine applies only to expressly granted
easements (relying on statements made in
Fallowfield v. Bourgault
(2003),
68 O.R. (3d) 417, 235 D.L.R. (4th) 263 (C.A.) at para. 11, and
Gale on
Easements
, 17th ed. (London: Sweet and Maxwell, 2002) at 47).

[36]

I need not decide whether the respondent is correct in its position and,
in the absence of persuasive authority, I would be reluctant to hold that
equitable easements do not carry any ancillary rights.  The authorities relied
upon by the respondent stand for the proposition that a grant of an express
easement includes ancillary rights, but they do not state that non-express
easements do not include such rights.

[37]

Indeed, it would seem odd to me that a person entitled to an equitable
easement to access his or her property over a roadway would not have the
ancillary right to maintain the roadway in a condition that permitted such
access to be exercised.  In the
Pogachar
decision referred to by the
summary trial judge, the Ontario Superior Court of Justice held that the
claimant was entitled to a prescriptive easement to use and maintain a road
that would permit access by cars.  It seems to me that another way of viewing
this decision is that the Court granted a prescriptive easement for access by
cars and also declared that the claimant had the ancillary right to maintain
the road.

[38]

The summary trial judge did make reference to the evolution of rights in
para. 30 of his reasons, but he did so in the context of determining the
extent of the equity.  He was not discussing the topic of ancillary rights at
that point.  More importantly, however, the judge did not expressly or
implicitly hold in para. 41 that ancillary rights are frozen in time and
cannot evolve.

[39]

What the judge held in para. 41 was that any ancillary rights
included in the equitable easement to which the appellant was entitled did not
include the right to install an underground power line.  In my view, the judge
was correct in his conclusion.

[40]

An ancillary right is a right that is reasonably necessary for the
exercise or enjoyment of the easement.  The right to install an underground
power line does not relate to the exercise or enjoyment of the equitable
easement.  Rather, it benefits the dominant tenement (i.e., the Property). 
What the appellant is endeavouring to accomplish through this argument is to
expand the extent of the equity through the guise of an ancillary right.  If
the appellant is not entitled to an equitable easement for an underground power
line, he cannot indirectly achieve one through the mechanism of ancillary
rights.

[41]

I note the judge commented that there are cases where the ancillary
rights benefited the dominant tenement as well as expanding the use or
enjoyment of the easement.  Counsel on this appeal were unable to assist us in
determining what cases the judge had in mind.  I can envisage that an ancillary
right could incidentally benefit the dominant tenement in addition to being
reasonably necessary to the exercise or enjoyment of the easement.  However, a
right that is intended to benefit the dominant tenement and is not necessary
for the exercise or enjoyment of the easement is not, in my opinion, an
ancillary right.  Rather, it is an expansion of the easement which must be
justified on the principles underlying the establishment of the easement which,
in this case, required the right to be established under the doctrine of
proprietary estoppel.  The judge correctly held that the entitlement to install
an underground power line was not established under the doctrine of proprietary
estoppel because there were no assurances or representations by the owners of
the laneway regarding the installation of a power line.

(c)
Minimum Equity

[42]

The appellant argues that the minimum equity in the circumstances
included a right to hydro-electric power.  He says the summary trial judge
erred by failing to find that the minimum equity to do justice included such a
right.

[43]

In my view, the appellants submission on this ground of appeal suffers
from a flaw similar to the flaw I identified in respect of the first ground.  The
appellant is attempting to expand the extent of the equity by relying on
principles that are applicable to the issue of remedy.

[44]

The law is clear that the concept of minimum equity in cases of
proprietary estoppel relates to remedy.  This is reflected in the following
statement made by Madam Justice Newbury in
Idle-O Apartments
:

[73]      The notion that the
appropriate remedy
in
proprietary estoppel is the minimum equity necessary to do justice has been
widely adopted: see Megarry and Wade,
The Law of Real Property
(7th ed.,
2008) at 716-8.

[Underlining
added.]

[45]

The concept of minimum equity was not in issue in this case.  The
summary trial judge found that an equity had been established with respect to
access to the Property by way of the laneway.  He concluded that the
appropriate relief was a declaration of an equitable easement.  Given the
extent of the equity that was established, this was the maximum relief the
judge could properly have granted.  There was no error by the judge in
fashioning the appropriate remedy.

[46]

It is not sufficient to simply say, as the appellant does, that the
minimum equity in the circumstances included the right to hydro-electric
access.  The court must look to the extent of the equity that has been
established and grant a remedy that corresponds to that equity.  If the extent
of the equity does not relate to the installation of an underground power line
because no assurance or representation was made in that regard, then equity
does not require a remedy to address the absence of a power line.  It is not a
matter of minimum equity.  It is a matter of the extent of the equity not
calling for such a remedy.

Discussion on Costs

[47]

The appellant submits the summary trial judge erred in awarding costs to
the respondent when the appellant was successful in obtaining a declaration of
an equitable easement, albeit one that did not include the right to install an
underground power line.  The appellant contends he is entitled to the costs of
the proceeding or, alternatively, each party should bear their own costs.  In
reply, the respondent says success was not divided because Parks Canada
acknowledged the right of the appellant to use the laneway to access the
Property and the only real issue at the summary trial, as stated by the judge
at para. 2 of his reasons, was whether the appellant had the right to
install an underground power line.

[48]

Although Parks Canada acknowledged the right of the appellant to use the
laneway for access, the respondent did oppose the granting of a declaration of
an equitable easement as being unnecessary.  While the judge did comment, at para. 28
quoted above, that whether the right to access the Property was a mere right
or an equitable easement was a matter of form rather than substance, it is
apparent from his reasons that he was prepared to grant the declaration of an
equitable easement.  In para. 36 of his reasons, when he introduced the
topic of ancillary rights, the judge stated that an easement of access had been
found to exist.

[49]

The matter is complicated by the fact that, in the concluding paragraph
of his reasons, the judge stated the action must be dismissed and the
respondent was entitled to costs.  However, the order did not dismiss the action,
and it contained a declaration of an equitable easement of access.  It did give
costs to the respondent.

[50]

Counsel could not agree on the form of the order, and an appointment to
settle the form of the order was made before a master.  The master did not
consider herself in a position to settle the order and referred it to the
summary trial judge.  No submissions were apparently made to the judge, and it
is not known whether his attention was drawn to the aspect of costs when he
settled the order in a form that was different from the last paragraph of his
reasons (i.e., granting a declaration rather than dismissing the action).  It
is not known whether the judge directed his mind to Rule 14-1(15) of the
Supreme
Court Civil Rules
that gives the court the discretion to award costs that
relate to a particular matter in a proceeding.

[51]

The matter is further complicated by the advice given to us by counsel
for the respondent that there is certain evidence relevant to the topic of
costs.  I infer that an offer to settle was made, and it could have an impact
on costs.

[52]

In all of these circumstances, I would allow the appeal on this ground
and remit the issue of costs to the summary trial judge so that it may be fully
considered by him.

Conclusion

[53]

I would dismiss the appeal except to the extent of setting aside the
award of costs to the respondent.  I would remit the issue of costs to the
summary trial judge.  I would grant costs of the appeal to the respondent
despite the appellants limited success with respect to the costs of the
underlying action.

The Honourable Mr. Justice Tysoe

I agree:

The Honourable Madam Justice
Saunders

I agree:

The Honourable Madam Justice
Dickson


