Excitement About Easements

November 10, 2020

By Brian Babcock

The power to expropriate does not change the test that applies when a municipality or other public authority claims that they have acquired a prescriptive easement (better known as title by adverse possession). Although the courts have been reluctant to recognize claims of adverse possession by private parties, they appear to be more forgiving where a public interest is involved.

The transfer of most land in Ontario into the Land Titles system in 2002 prevented new rights from being acquired by adverse possession, but existing rights are still preserved. As 2002 fades farther back in the rear view mirror, fewer adverse possession cases are likely to succeed, but the recent Court of Appeal decision in Paleshi Motors Limited v. Woolwich (Township) is just the sort of case that might still arise.

In 1979 or 1980, the Township installed a new loop of watermain that encroached on a vacant lot owned by Paleshi Motors, located next to the existing salvage yard. When Paleshi Motors went to develop the lot, the Township claimed an easement.

The passing of time from 1980 to 2002 satisfied the first requirement for adverse possession – twenty years of use before 2002.

The rest of the test gets a bit technical, and is where a lot of adverse possession claims fail. In addition to the time, the claimant must show that its possession was “open, continuous and peaceful” and was “as of right”, not by permission.

The application judge determined that because the salvage yard was next to the vacant lot, Paleshi Motors personnel (who were no longer around to give evidence) likely were aware of the work being done. This satisfied the “open” requirement.

The watermain was there continuously.

There was never anything not peaceful about the use.

There was no evidence that Paleshi Motors ever gave permission for the encroachment.

The judge then examined the policy considerations that limit the recognition of easements by adverse possession. Courts wish to encourage cooperation among neighbours, and do not reward surreptitious or aggressive behaviour. On the other hand, long term uses ought to be recognized and protected. Nothing that the municipality did was surreptitious or aggressive.

The remaining policy consideration was the toughest – the policy against creating a burden on property owners without compensation. The burden in this case was minimal, and the watermain offers a benefit to the municipal services. The application judge found that this met the test, and recognized the existence of an easement.

The Court of Appeal agreed. They confirmed that it was up to Paleshi Motors, not the municipality, to prove permission if that ground was to prevent a finding that the easement was created.

They emphasized that the presence of the watermain improved municipal services, a public benefit, which also benefits Paleshi Motors.

Paleshi Motors, on appeal, also argued that because municipalities may obtain easements by expropriation – in which case compensation is required – that they MUST expropriate, and adverse possession is not an argument available to municipalities.

The Court disagreed. If the legislature had intended to ban easements by adverse possession where expropriation was available, it could easily have said so in legislation.

There are still many properties out there where public authorities installed services decades ago without obtaining an easement. The result in this decision helps clarify the circumstances in which the municipalities or other public bodies obtain an easement by adverse possession. Buyers, or those planning to develop ought to be wary of this risk.  On the other hand, municipalities can take comfort in having this avenue open to them.