When Will Air Rights Be Subject to an Implied Easement?

April 2, 2022

By Mark Mikulasik

Implied easements are granted very rarely, and air rights are seldom the issue, so a case addressing the combination is bound to attract attention. Add a popular shopping mall battling the City of Toronto, and you have a case we need to write about, and you may want to know about.

Cloverdale Mall Inc. v. City of Toronto  was an application for a declaration that Cloverdale Mall Inc.’s property interest in a bridge over The East Mall Road, which joins three parcels of land it owns in Toronto, gives rise to an implied easement by common intention over the airspace surrounding this bridge and for related rights.

The bridge passes over The East Mall Road, which is a public roadway on lands now owned by the City. The bridge connects two parcels of private land currently owned by Cloverdale -the Cloverdale Shopping Mall on the east side and on the west side, three adjacent parcels of land on which a gas station and a Brewers Retail outlet are located.

Prior to the extension of The East Mall Road as part of the development of Highway 427, the three parcels were adjoining, but the extended road separated them, so the province paid for the construction of the bridge as part of an expropriation. The bridge was built by the mall owners in August 1969. The bridge abutments are partially on Cloverdale land, and partially on City land. It connects private roads on Cloverdale’s lands.

No records could be found of any agreements about the construction, or the presence of the bridge in the air space above the road.

In a 2018 decision, a judge determined that Cloverdale owns the bridge, and is responsible for its upkeep and maintenance. That left open the question of whether Cloverdale has an implied easement, or as the City argued, a license.

An easement is a much better than a license. An easement may be registered on title, which gives anyone dealing with the property notice of Cloverdale’s rights. Cloverdale’s rights under an easement would be more easily transferable, if, for instance, it wished to sell the Brewer’s Retail/gas station lands to other owners. Those protections in turn make those parcels more valuable. With an easement, Cloverdale could even sell the bridge.

A license, unless otherwise agreed, can be revoked at any time upon reasonable notice and is not registered on title. With no written license agreement, Cloverdale would have the most minimal rights under a license.

The City had no documentation to support its position, but then neither did Cloverdale. So who wins?

Because:

  • the City was aware of the construction of the bridge as part of the road extension, and
  • would likely know then that Cloverdale would benefit from an easement, with better access and convenience to customers,
  • common sense suggests that if the city could revoke the license at any time, it would be contrary to the agreed upon purpose of the bridge to replace the previous access across Cloverdale’s own property’
  • that would defeat the ease of access and convenience that was intended,
  • the private roads connected by the bridge would become useless.

A license would have made no commercial sense for Cloverdale at the time of construction.

Other bridge owners often have easements.

Therefore, the necessary common intention for an implied easement was implied to exist (which is why they are called “implied easements”).

We have previously discussed that courts do sometimes apply common sense.

Although air rights issues are less common in Thunder Bay than the GTA, easements and expropriations are familiar territory.

This case reminds us of the importance:

  • of entering into complete agreements that fully document your intentions in any commercial transaction.
  • this includes remembering to obtain necessary easements
  • of the specific need to do that when settling expropriation matters
  • of maintaining good records, in a place, and using a system, where they can be located, even decades later.

All of which applies whether or not the easement is made out of air.

Even if you are dealing with a license, you want it in writing, with complete terms, in a place where you can find it. In this case, if the City was correct that there was a license, and it had documents to prove it, the result would have been very different.

Better to have a grant of easement registered on title from the beginning than to have to fight over an implied easement decades later. Weilers Law can assist either municipalities or property owners in these situations. In addition, we have specific experience negotiating and resolving expropriation matters, either through settlements or hearings.