December 2016

Where an easement is granted by a servient tenement owner ("Servient Owner") to an adjacent (or nearby) dominant tenement owner ("Dominant Owner"), typically, the Servient Owner undertakes to the Dominant Owner to permit the Dominant Owner to make certain specified usage of the Servient Owner's land.  The intent of the owners (and the result, if the easement grant or agreement is properly worded) is to bind the owners' respective lands, with the burdens of the easement being primarily placed upon the Servient Owner, and with the benefits of the easement primarily accruing to the Dominant Owner.  That is, the easement (and its accompanying/specified rights and obligations) will bind not only the original parties (the grantor original Servient Owner and the grantee original Dominant Owner), but also all successive successors-in-title to the affected lands, indefinitely.  The usage to be made by the Dominant Owner of the Servient Owner's lands will, to a greater or lesser degree, be specified in the instrument creating the easement.  Usage specification will usually depend upon what each of the parties is currently doing in relation to each's respective property, or what one or both of the parties intend to do in the near future with respect to the properties.

But what happens if, after a period of time, perhaps a lengthy period of time, the intentions and objectives of the Dominant and Servient Owners (who may not at that point in time be the original parties, but rather immediate or more remote successors in title), are different from those of the original parties at the time when the easement was created?  Usually the question is whether or not what the current owners want to do with their properties - and in particular, whether or not the parties' current intentions - jibe with the terms of the easement agreement.  Where there is a disagreement on these matters between the current owners which they are unable to amicably resolve with amendments or restatements of the original easement, resort may be - and on many occasions has been - made to the Courts for a resolution.

The relatively recent judgement issued March 11, 2016 by the Supreme Court of British Columbia in Houghton and Houghton v. O'Rourke Family Vineyards Ltd., (hereinafter, the "Vineyards Case") dealt with this very situation.  The facts of the Vineyards Case may be summarized as follows:

(1)          The plaintiffs and the defendant owned adjacent properties.  The plaintiffs' property abutted Okanogan lake, and the defendant's property was situated back from that lake adjacent to the plaintiffs' property. 

(2)          The easement in question (the "Easement") had been created by the plaintiffs' and defendant's predecessors-in-title.  The plaintiffs' predecessors used their property for residential purposes and this usage was continued by the plaintiffs.  The defendants predecessor used its property for an orchard. The defendant continued this usage, but now wished to convert a substantial portion of its property for use as grape growing "farm" and as a winery.

(3)          The Easement permitted the from time to time owners of the defendant's property to utilize a portion of the plaintiffs' property for the purpose of drawing water from the lake and piping it through the plaintiffs' property to the defendant's property.  Thus the plaintiffs' property was the "servient tenement" land, and the defendant's property was the "dominant tenement" land.  Notice of the Easement had been registered against the title to the plaintiffs' property, and there was no argument between the parties that the Easement bound and benefitted both the original property owners who had created the Easement, and each of their respective from time to time existing successors-in-title.

(4)          The core of the rights granted to the dominant tenement owner under the Easement were stated to be: "an easement and right in perpetuity to enter into and use that portion of the grantor's land shown outlined in red on a Plan of Easement registered in the Kamloops Land Registry Office under No. A11976 (the "Easement Area for the purposes of constructing, installing, maintaining, inspecting, altering and repairing pipes and works for the carriage and delivery of water" (the underlining here is by the writer for the purpose of emphasis).  In considering the Court's decision in this matter, it is important to keep in mind what the foregoing quoted words both say and what they don't say.

(5)          Currently, the easement area under the Easement (the "Easement Area") contained pipes and certain equipment/facilities which carried water from the lake to the plaintiffs' property.  Although there had been no upgrading, expansion or otherwise substantial change to the pipes and equipment/facilities (the "Works") since the defendant acquired the property, the defendant had occasionally entered into the Easement Area "in order to conduct repairs or maintenance of the Works".  The plaintiffs had not objected to this activity.

(6)          The currently existing Works comprised a pump house and above-ground pipes extending to and then from the pump house, and in the words of the Court, the Works were "antiquated and in severe disrepair".

(7)          The defendant now wished to, in effect, accomplish two things, namely:

(a)          to modernize and upgrade the Works so as to meet modern standards and satisfy safety and government regulation requirements; and

(b)          to increase the capacity of the Works in order to facilitate the defendant's plan to replace what had been an apple orchard with grape vines, together with the establishment of a winery.

(8)          The defendant's contemplated upgrading and capacity increase for the Works would involve installing wider pipes, relocating the pipes underground, replacing the pump house with a much larger pump house containing more powerful pumps, with the consequent expansion of the Works to occupy virtually all of the Easement Area.  The defendant's plan did not involve expanding the area or the boundaries of the Easement Area.  Because the upgraded and expanded Works would take up virtually all of the Easement Area, it would be necessary for the defendant to temporarily access portions of the plaintiffs' property which would lie outside the Easement Area boundaries.

(9)          The defendant and the plaintiffs had ongoing discussions regarding the defendant's proposals, but unfortunately, the parties were "unable to come to an agreement".  Thus the matter had come before the Court.

The plaintiffs argued that upon a proper interpretation of the wording in the Easement, most of what the defendant proposed was not permitted.  The following outlines each of the plaintiffs' particular arguments and how the Court considered and dealt with them:

(i)            The plaintiffs argued that the defendant could not effect its proposed upgrading and enhancements, and, indeed, could not do anything else in relation to the Easement, without either getting a Court order or getting the plaintiffs' consent.  The Court disagreed and stated that the grantee under an easement was entitled to exercise the rights granted to it "as a matter of right".  The Defendant did not have what amounted to unlimited rights under the Easement, only those given to it which were set forth in the wording of the grant.

(ii)           The Plaintiffs argued that the Defendant should not be permitted to make "excessive use" of the Easement Area.  The Defendant's proposal would expand their use of the Easement Area out to the Easement's borders and this would extinguish the Plaintiffs' ability to make use of or to access the Easement Area.  Additionally, the Plaintiffs pointed out that the Defendant's proposal would "interfere with the appearance" of the Easement Area when the Plaintiffs viewed it.  The Court disagreed and pointed out that by its very nature, an easement diminishes the potential use and enjoyment of the land (affected).  The Plaintiffs acknowledged that the Defendant's proposal was, (if anything, an "improvement" from the transmission pipes to be relocated underground which should esthetically enhance the appearance of the Easement Area and reduce the noise that would otherwise be caused by the passage of water through surface pipes), and, the new Works including rebuilt pump house should be an improvement over the appearance of the current Works.  The Defendant's proposal would "not somehow constitute excessive use" of the Easement.

(iii)          The Plaintiffs argued that the Defendant should be entitled to enter the Plaintiffs' property outside of the Easement Area.  The Court disagreed and pointed out that grantees of easements "may access the land of the grantor to the extent that it is reasonably necessary to  the exercise and enjoyment of the easement".

(iv)          The Plaintiffs argued that the Easement did not grant any "subsurface rights", so that the Defendant should not be entitled to relocate the pipes underground.  In support of this argument, the Plaintiffs pointed out that in the recital of the Easement grant, it was stated that: "Grantor proposes to grant to the Grantee and easement over a portion of the said land" (the underlining is the writer's for emphasis purposes).  "Over" did not mean "under".  Because the Court disagreed and pointed out that the Easement did not specifically refer to subsurface rights, but at the same time, it did not expressly refer to surface rights.  The word "over" in the recital "simply refers to a bundle of legal rights.  It does not refer to any physical notion of over the land or under the land".

(v)           The Plaintiffs argued that the Easement was only intended to facilitate the transmission of water from the lake to the Defendant's land for the purpose of irrigating an apple orchard, not for the purpose of irrigating grape vines and/or operation a winery.  What the parties contemplated at the time of the Easement was created should determine all future uses.  The Court acknowledged that Easement grant did not contain any reference to the Defendant's proposed usage, but nevertheless (again) disagreed with the Plaintiffs.  The Defendant's proposed use was not specified in the Easement grant, but for that matter, neither was the original use of the Defendant's land namely for an apple orchard.  "All that is referred to is the "carriage and delivery of water"".  Unless there is an ambiguity in the wording of the grant, and in that wording and not the original parties' intentions- which determine the rights granted under an easement.

(vi)          Lastly, the Plaintiffs argued that the benefits of the Easement should be interpreted as applying only to the lands held by the dominant tenement owner at the time the Easement was created.  This argument was raised because the Defendant's proposal would include operating the grape vines and winery on additional lands held by the Defendant which were not part of the original dominant tenement.  The Court agreed with the Plaintiffs' position in principle, and pointed out that the Easement grant contained a statement in its recital to  the effect that the Easement was to be" for the purposes of … benefitting (the originally specified dominant tenement lands)" however, the Court stated that: "once water is carried to the subject properties via the easement, the intention of being used on the subject properties, the Plaintiff has no right to restrict or dictate what the Defendant may do with that water.  Their rights do not extend to what happens to the water after it leaves the Easement Area". In the writer's mind, this appears to be a thoroughly fine distinction.

What should the Court's conclusions in the Vineyards Case suggest to parties contemplating obtaining and granting easements and to their counsel? Consider:

            (A) With respect to the plaintiffs' above- noted last argument, an intending easement grantee's counsel might be tempted to add wording to the grant to make it clear that the benefits of the easements may be enjoyed by additional lands subsequently owned by the holder of the specified dominant tenement lands.  The problem with this is that a Court would probably hold such a provision to be too imprecise, and traditionally, for an easement to bind land (as well as the original parties to the easement) both the dominant tenement lands and the servient tenement land must be clearly specified.  Such a provision would not be "illegal" as such, but would not be a binding interest in land.  It would, at best, only constitute a contractual right or (or license) in favour of the grantee. It would not benefit the original grantee's successors in title to the dominant lands or any additional lands acquired by the original grantee or by a subsequent successor in title to the original grantee. However, in the Vineyards Case any ambiguity might have been eliminated by the additional wording to the effect that the grantee (and its successors in title to the specified dominant tenement lands) would be entitled to use water piped to the originally specified dominant tenement lands in any matter which might benefit adjacent additional lands held by the dominant tenement owner.  Essentially, this is what the Court implied, but having it clearly specified in the original grant would (presumably) not have allowed the plaintiffs to raise this argument at all.

            (B)  The writer believes that the core of the decision in the Vineyards Case was that one must look to the actual wording of the grant (assuming it is unambiguous) in order to determine the extent of - and the limitations on - the grantee's rights.  Thus from the grantee's point of view, its counsel must endeavor to use wording which will accommodate not only the grantee's originally intended usage of its easement rights, but also accommodate changes in the original grantee's and its successors in title's circumstances and land usage.  As one can appreciate, attempting to draft provisions to cover future unknown changes of circumstances and usage- at least in any precise manner- is virtually impossible.  Perhaps all that can be done- from the grantee's point of view- is to ensure that the operative wording in the easement grant is broad or general in nature.  That appears to have been the case in the Vineyards Case and assisted the defendant greatly in convincing the Court of the validity of its position.  From the point of view of the grantor, the drafting task may be more difficult.  The grantor's counsel should attempt to determine what the grantor, looking at its own current situation and guesstimating its future situation and those of its successors in title- needs to do to limit the otherwise "broad/general" grant wording required by the grantee.  Not an easy task, but one which must at least be attempted by the grantor's counsel.