665399 N.B. v. Connors, (2015) 445 N.B.R.(2d) 1 (TD)

Judge:Morrison, J.
Court:Court of Queen's Bench of New Brunswick
Case Date:July 06, 2015
Jurisdiction:New Brunswick
Citations:(2015), 445 N.B.R.(2d) 1 (TD);2015 NBQB 236
 
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665399 N.B. v. Connors (2015), 445 N.B.R.(2d) 1 (TD);

    445 R.N.-B.(2e) 1; 1166 A.P.R. 1

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2016] N.B.R.(2d) TBEd. JA.021

Renvoi temp.: [2016] N.B.R.(2d) TBEd. JA.021

665399 N.B. Inc. (applicant) v. Robert H. Connors and Elena Connors (respondents)

(F/M/7/2015; 2015 NBQB 236; 2015 NBBR 236)

Indexed As: 665399 N.B. Inc. v. Connors et al.

Répertorié: 665399 N.B. Inc. v. Connors et al.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Fredericton

Morrison, J.

December 7, 2015.

Summary:

Résumé:

In 1989, Robert and Elena Connors subdivided their land and created the "Home Lot" on which they built their residence. In 1997, they sold Lots 97-1 and 97-2 to Henderson. The deed to Henderson contained restrictive covenants which generally prohibited using the two lots for a trade or manufacturing business subject to certain exemptions. In 2013, the Connors conveyed the Home Lot to Robert Connors, who in turned conveyed it to Elena Connors in an attempt to have the restrictive covenants applicable to Lots 97-1 and 97-2 apply to the Home Lot as well. Henderson sold Lot 97-1 to a numbered company. The Connors opposed the company's business operations and sought to enforce the restrictive covenants contained in the deed to the company. The company took the position that the restrictive covenants did not run with the land and applied for a declaration that the restrictive covenants were of no force and effect and an order pursuant to s. 70(1)(a) of the Land Titles Act rectifying the title register to delete any reference to the covenants.

The New Brunswick Court of Queen's Bench, Trial Division, held that the restrictive covenants ran with the land and there was no basis to make the requested declaratory order. The restrictive covenants could not be enforced by the Connors, but they could be enforced by the owner(s) from time to time of Lots 97-1 and 97-2. The court therefore refused to expunge the restrictive covenants from the title register and denied the request for an order of rectification.

Deeds and Documents - Topic 541

Form - General - [See second Real Property - Topic 132 ].

Real Property - Topic 132

General principles - Covenants that run with land - What constitute - In 1989, the Connors subdivided their land (the Parent Parcel) and created the "Home Lot" on which they built their residence - In 1992, they sold Lot 92-1 from the Parent Parcel - In 1997, they further subdivided the Parent Parcel and sold Lots 97-1 and 97-2 to Henderson - The deed to Henderson contained restrictive covenants which generally prohibited using the two lots for a trade or manufacturing business subject to certain exemptions - In 2013, the Connors entered into land transactions which were an attempt to have the restrictive covenants applicable to Lots 97-1 and 97-2 apply to the Home Lot - In 2013, Henderson sold Lot 97-1 to a company - The Connors opposed the company's business operations and sought to enforce the restrictive covenants - The company asserted that the restrictive covenants did not run with the land and applied for a declaration that they were of no force and effect and an order pursuant to s. 70(1)(a) of the Land Titles Act rectifying the title register to delete any reference to them - The New Brunswick Court of Queen's Bench, Trial Division, dismissed the application - In order for a restrictive covenant to run with the land (1) the restrictive covenant had to expressly state that it was for the benefit of an ascertained land (the dominant tenant); or (2) the dominant and servient tenements had to be part of a common building scheme - Here the first condition was not met where the restrictive covenants in questions did not adequately describe the lands to which the benefit of the covenant was to run (the dominant tenant) - With respect to the second condition, the Connors did not have a common building scheme in mind for all the subdivided parcels prior to subdividing the Parent Parcel as no restrictive covenants were initially attached to either the Home Lot or to Lot 92-1 - There was a common building scheme with respect to the subdivision that created Lots 97-1 and 97-2 and, consequently, the restrictive covenants ran with those lots and could be enforced by the owners thereof, but they could not be enforced by the Connors - See paragraphs 16 to 32.

Real Property - Topic 132

General principles - Covenants that run with land - What constitute - The applicant sought rectification of the title register to delete any reference to restrictive covenants - The respondents asserted that the language used in the deed in question and the other deeds and transfers that purported to create the restrictive covenants was that prescribed by the Standard Forms of Conveyances Act - They asserted that if the prescribed wording was used, and no contrary intention was expressed in the conveyance, the restrictive covenants would run with the land and personal covenants between the named grantor and grantee were binding upon their respective successors and assigns - The New Brunswick Court of Queen's Bench, Trial Division, rejected the argument - The purpose and intent of the Act was to shorten and standardize typical registered instruments by ascribing legal meaning to certain defined words and phrases - The Act did not create or alter the common law with respect to real property rights - See paragraphs 35 and 36.

Real Property - Topic 8014.2

Title - Registration of instruments, etc. - Land titles system - Registration - Rectification - The applicant sought rectification of the title register to delete any reference to restrictive covenants - The applicant conceded that it had not given the Register General notice of the proposed application prior to making the application as required by s. 79(4) of the Land Titles Act - The respondents requested that the application be dismissed for non-compliance with s. 79(4) - The New Brunswick Court of Queen's Bench, Trial Division, stated that "The purpose of the notice provision of 79(4) is to enable the Registrar General to place a notice or caveat on the title register of the affected land. This is to give notice to persons that the title register may be subject to rectification. In this case, the persons primarily interested in the affected lands are parties to this application and are aware of the possible rectification of the title register. In any event, the Registrar General was put on notice of the application, albeit not in the prescribed form, by correspondence from the respondents on March 5, 2015. Although this is 27 days after the application was filed it was more than four months before the hearing of the application. ... In my view, nothing turns on the failure of the applicant to give notice to the Registrar General pursuant to section 79(4) of the Land Titles Act and there is no prejudice to the respondents. I reject the respondents request for dismissal of the application on that basis." - See paragraphs 12 to 15.

Sale of Land - Topic 4504

Restrictive or positive covenants - General principles - Covenant which binds or runs with the land - What constitutes - [See both Real Property - Topic 132 ].

Sale of Land - Topic 4506

Restrictive or positive covenants - General principles - Requirement that dominant tenement be easily ascertained - [See first Real Property - Topic 132 ].

Sale of Land - Topic 4507

Restrictive or positive covenants - General principles - Requirement of building scheme - [See first Real Property - Topic 132 ].

Sale of Land - Topic 4508

Restrictive or positive covenants - General principles - What constitutes a building scheme - [See first Real Property - Topic 132 ].

Sale of Land - Topic 4521

Restrictive or positive covenants - Enforcement of benefits - General - The applicant was a company owned and controlled by Thomas - Thomas was a commercial cabinet maker - The applicant sought rectification of the title register to delete any reference to restrictive covenants which generally prohibited it from using land for a trade or manufacturing business subject to certain exemptions - The applicant asserted, in the alternative, that if the covenants were valid in the first instance, there had been a general change in the character of the neighbourhood rendering the restrictions obsolete and meaningless - The only evidence in support of the argument was found in Thomas's affidavit where he listed several types of businesses and trades there were operating in the area - The respondents, in response, deposed that the neighbourhood was not predominantly commercial or industrial and attached a series of photographs and an SNB planet map depicting a large residential real estate development - The New Brunswick Court of Queen's Bench, Trial Division, stated that "... there is conflicting evidence with respect to the nature and character of the neighbourhood. In my view, the evidence falls far short of that required to determine that there has been such a general change in the character of the neighbourhood that enforcement of the restrictive covenants would be meaningless." - See paragraph 34.

Sale of Land - Topic 4523

Restrictive or positive covenants - Enforcement of benefits - Who may enforce - [See first Real Property - Topic 132 ].

Sale of Land - Topic 4582

Restrictive or positive covenants - Variation or setting aside - Notice or standing - [See Real Property - Topic 8014.2 ].

Sale of Land - Topic 4688

Restrictive or positive covenants - Positive covenants - Effect on subsequent purchasers - [See both Real Property - Topic 132 ].

Cases Noticed:

Lockmac Holdings Ltd. v. Earle et al. (1997), 185 N.B.R.(2d) 360; 472 A.P.R. 360 (T.D.), refd to. [para. 22].

Arthur and Arthur v. Nelson (1988), 88 N.B.R.(2d) 217; 224 A.P.R. 217 (T.D.), refd to. [para. 24].

Concerned Citizens of Westwood Subdivision v. McCutcheon et al. (2000), 226 N.B.R.(2d) 13; 579 A.P.R. 13 (T.D.), refd to. [para. 28].

Statutes Noticed:

Land Titles Act, R.S.N.B. 1973, c. L-1.1, sect. 79(4) [para. 13].

Standard Forms of Conveyances Act, R.S.N.B. 1973, c. S-12.2, generally [paras. 35, 36].

Counsel:

Avocats:

Michael S. Dean, for the applicant;

Michael J. Connors, for the respondents.

This application was heard on July 6, 2015, by Morrison, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Fredericton, who delivered the following judgment on December 7, 2015.

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