February 2017

Sometimes, in order to make full - or even some - desired usage of one's land, it is necessary for the landowner to be able to (legally) make use of a neighbouring property owner's land.  Such usage of the neighbouring owner's land involves rights constituting something less than full ownership of the neighbouring property.  The most common situation is where one owner needs to use a path or roadway over its neighbour's property to be able to access a road, lake or a river waterfront.  Similarly, a property owner may need to be able to connect the improvements on its land to a water distribution system, a sewage system, a natural gas transmission system, or an electrical transmission system, and such connection involves the installation and maintenance of pipes, conduits, etc. over the neighbouring owner's land.  The need to make use of the neighbouring owner's land will frequently arise in the situation where an owner subdivides its land into two or more parcels, with the subdivider retaining ownership of part of the property, and selling and transferring the other part or parts to someone else.  The parcel retained by the subdivider is now "isolated" from a main roadway (or from utility type services transmission facilities), and needs to obtain access over the neighbouring owner's lands to "connect".  Ideally, the subdividing party will have anticipated its retained property's "isolation", absent the right to access/connect over the neighbouring owners' lands, and accordingly reserves or bargains for the required limited usage rights over the neighbour's lands.  The rights so reserved, or acquired (typically by way of bargain as part of the subdivider's transfer and sale to the neighbour), are a species of a land interest long time recognized in our legal system and is known as an "easement".  As an interest in land, an easement, if it is properly conceived of and documented, will bind not only the original owner of the neighbouring (affected) lands, but also its successors-in-title, indefinitely.  Similarly, the benefit of the easement will enure to the benefit of not only the original subdividing land owner (who needs the easement for its benefit), but also for the benefit of such original owner's successors-in-title.

But what happens where the original subdividing owner and its neighbouring purchaser(s) fail to create the required legally enforceable easement (or easements), and instead, the owner benefitting from the easement simply exercises access rights over its neighbour's (or neighbours') land(s), without the formal and legal creation of one or more easements, and without the neighbouring owner (or owners) objecting to or challenging the use of its (their) land(s)?  In other words, what happens where the benefitted land owner simply goes ahead and acts as if it had an easement, with the neighbouring owner acquiescing in that usage?  Of course, as long as the benefitting owner (and its successors-in-title) make use of the neighbour's lands, and the neighbour doesn't object, there is no real problem.  But if at some later point in time, the current owner of the neighbouring property chooses to object - and perhaps takes active steps to stop or hinder the usage of its land - such as, by way of erecting barriers, putting up fences, etc. - does the then owner of the benefitted property have any legal recourse?  For a long time, the law has recognized that in some situations, the owner of the benefitted property should be given easement rights over its neighbour's property, notwithstanding the absence of a previous formally created easement.  One of those situations is where the benefitted property owner's (or owners') usage has been longstanding, open and unchallenged.  Then the owner of the benefitted property is said to have acquired an easement by prescription (or an easement obtained by lengthy and unchallenged usage).  The other basis on which a non-formally created easement may be recognized is where the benefitted owner is able to convince a Court that without the benefit of an enforceable easement, the benefitted owner's property is not capable of being used, at least for most, if not all, purposes.  This is called an "easement of necessity".

The problem with a benefitted owner having to rely on a Court recognizing that it has an easement of necessity over its neighbour's (or neighbours') lands is that the Courts have, for many years, taken the position that an easement of necessity will not be recognized merely because, without the entitlement to the easement, the usage of or access to the benefitted owner's property is merely inconvenient.  The Court must be convinced that it is virtually impossible for the benefitted owner's property to be used without the benefit of the easement.  Thus the use of the word "necessity" here.

The difficulty in establishing an easement of necessity was recently illustrated by the Ontario Court of Appeal decision in Toronto-Dominion Bank v. Wise (Judgement, August 16, 2016, hereinafter, the "Wise Case").  In the Wise Case, Mr. and Mrs. Wise owned property fronting on a lake, and they decided to - and did - split their land into two lots, gifting one of the lots to their daughter and retaining the balance of the land which then had access only by way of the lake, and not by way of the neighbouring municipal road which ran adjacent to the daughter's lot, but after the title split, was not adjacent to the Wises' (retained) lot.  The Wises did not arrange for the formal creation of an easement over the lot transferred to their daughter.  The Toronto-Dominion Bank was involved because it held a mortgage on the Wises' (retained) lot and wished to protect or enhance its security by ensuring that it had proper access to the municipal road. At the original trial of this matter, the trial judge held that the Wises' property did have an easement of necessity over their daughter's lot because water access to their lot was, compared to access by way of land, "impractical".  In particular, the trial judge concluded that the "common law requirement of absolute or strict necessity (to justify an easement of necessity) had developed into a rule of "practical necessity"".

The Ontario Court of Appeal held/concluded that:

(i)            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".  This was and continues to be true, and accordingly, the trial Court was in error in holding (as above mentioned) that the law pertaining to easements had been modified into something more "practical".  In other words, if you believe that your property requires an easement over a neighbour's property, get the neighbour to agree "at the outset".

(ii)           Whether or not an easement of necessity may be implied depends on the circumstances of the property or properties at the time when one parcel of land becomes split into two or more parcels. 

(iii)          An easement of necessity may be implied - if the right circumstances are present - in the situation where the original owner of the whole property splits its ownership and transfers part to a new owner where the original owner then lacks access, or, where the original owner retains access, but transfers part of what was its property to a new owner and the new owner is without access (the former situation being the one present in the Wise Case).

In the Wise Case, at the time of the split in ownership, the originally held lands had water access, and that in itself was sufficient to defeat Mr. and Mrs. Wise's claim for an implied easement over their daughter's adjacent property.  It didn't matter that access to Mr. and Mrs. Wise's property by way of water was inconvenient - and perhaps difficult - compared to being able to have access (by way of a path or roadway) over their daughter's property, and, it didn't matter that in fact, no one had ever accessed Mr. and Mrs. Wise's property from the adjacent lake.

So, what is the "moral" of this story?  The writer suggests that the Wise Case emphasizes the need for people who are intending to subdivide their property to ensure that they will have proper access once ownership of the adjacent (subdivided) lands has changed, and this should be properly dealt with (with input from knowledgeable counsel) before any transfer or commitment to transfer is made.