Amberwood Investments Ltd. et al. v. Durham Condominium Corp. No. 123, (2002) 157 O.A.C. 135 (CA)

• Judge: Charron, MacPherson and Cronk, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: March 20, 2002
• Jurisdiction: Ontario
• Citations: (2002), 157 O.A.C. 135 (CA)

Amberwood Inv. v. Durham Condo. (2002), 157 O.A.C. 135 (CA)

MLB headnote and full text

Temp. Cite: [2002] O.A.C. TBEd. MR.045

Durham Condominium Corporation No. 123 (appellant/respondent) v. Amberwood Investments Limited and 1018898 Ontario Inc. (respondents/applicants)

(C35155)

Indexed As: Amberwood Investments Ltd. et al. v. Durham Condominium Corp. No. 123

Ontario Court of Appeal

Charron, MacPherson and Cronk, JJ.A.

March 20, 2002.

Summary:

At issue was whether a covenant to pay certain interim expenses contained in a reciprocal easement and cost sharing agreement between owners of adjoining parcels of land was enforceable against the successors in title to the covenantor.

The Ontario Superior Court, in a judgment reported [2000] O.T.C. 660, held that the covenant was a positive covenant and the law was settled that positive covenants did not run with the land. Accordingly, successors in title to the original covenantor were not bound by the terms of any positive covenant contained in the original agreement to which they were not parties. Although English common law developed two exceptions to this principle (benefit and burden doctrine; conditional grant of easement) which would apply, absent legislative reform or the adoption of an appellate court of the exceptions, stare decisis required that the court follow the well-settled rule that positive covenants do not run with the land. The covenantor seeking to enforce the covenant appealed.

The Ontario Court of Appeal, MacPherson, J.A., dissenting, dismissed the appeal. The rule that positive covenants do not run with the land was clear. Reforming that principle, which would have complex and far-reaching effects, would be a radical (rather than incremental) change to the common law that was best left to the legislators. As for the two English exceptions, the benefit/burden doctrine had not been adopted by the English courts as an exception to the rule that positive covenants do not run with the land. In any event, the rule would not apply in this case because the benefits received by the successors and the burden of the positive covenant were not correlated. The court stated that "the adoption of this doctrine as a recognized exception to the rule in the common law of this province, in much the same way as the abolition of the rule itself, would have complex, far-reaching and uncertain ramifications that cannot be adequately addressed on a case by case basis". The second exception (conditional grant of easement) did not apply where there was no link between the easements conferred by the reciprocal agreement and the positive covenant to pay interim expenses. Accordingly, the court agreed with the trial judge's result that the successors in title were not bound by the positive covenant.

Common Law - Topic 3221

Variation - Judicial variation - General - The Ontario Court of Appeal discussed the general principles governing judicial reform of the common law, as set out by the Supreme Court of Canada - The court noted, inter alia, that reform of the common law by the courts should be incremental - Courts will not intervene where the proposed change of an entrenched principle would have complex and far-reaching effects, setting the law on an unknown course whose ramifications could not be accurately measured - See paragraph 48.

Real Property - Topic 132

General principles - Covenants that run with land - What constitutes - [See Sale of Land - Topic 4688 ].

Sale of Land - Topic 4504

Restrictive or positive covenants - General principles - Covenant which binds or runs with the land - What constitutes - [See Sale of Land - Topic 4688 ].

Sale of Land - Topic 4688

Restrictive or positive covenants - Positive covenants - Effect on subsequent purchasers - At issue was whether a covenant to pay certain interim expenses contained in a reciprocal easement and cost sharing agreement between owners of adjoining parcels of land was enforceable against the successors in title to the covenantor - The Ontario Court of Appeal held that the law was well-settled that positive covenants did not run with the land to bind successors in title, even if those successors had notice of the covenant - Reforming that principle, which would have complex and far-reaching effects, would be a radical (rather than incremental) change to the common law that was best left to the legislators - As to two English common law exceptions, the benefit/burden doctrine had not been adopted by the English courts as an exception to the rule that positive covenants do not run with the land - In any event, the rule would not apply in this case because the benefits received by the successors and the burden of the positive covenant were not correlated - The second exception (conditional grant of easement) did not apply where there was no link between the easements conferred by the reciprocal agreement and the positive covenant to pay interim expenses - Accordingly, the court agreed that the successors in title were not bound by the positive covenant - See paragraphs 17 to 89.

Cases Noticed:

Halsall v. Brizell, [1957] 1 All E.R. 371, refd to. [paras. 14, 102].

Parkinson v. Reid, [1966] S.C.R. 162, refd to. [paras. 17, 99].

Rhone v. Stephens - see Rhone v. Barnard Estate.

Rhone v. Barnard Estate, [1994] 2 All E.R. 65; 168 N.R. 51 (H.L.), refd to. [paras. 22, 117].

Austerberry v. Oldham Corp. (1885), 29 Ch. D. 750 (C.A.), refd to. [paras. 22, 90].

Spencer's Case, [1558-1774] All E.R. Rep. 68; 5 Co. Rep. 16a (H.L.), refd to. [para. 26].

Keppell v. Bailey (1834), 2 My. & K. 517; 39 E.R. 1042 (Ch. D.), refd to. [para. 27].

Tulk v. Moxhay, [1843-60] All E.R. Rep. 9; 2 Ph. 774, refd to. [para. 30].

Haywood v. Brunswick Permanent Benefit Building Society (1881) 8 Q.B.D. 403 (Eng. Q.B.), refd to. [para. 31].

R. v. York Township; Ex parte 125 Varsity Rd. Ltd., [1960] O.R. 238 (C.A.), refd to. [para. 47].

Friedmann Equity Developments Inc. v. Final Note Ltd. et al. (2000), 255 N.R. 80; 134 O.A.C. 280; 188 D.L.R.(4th) 269 (S.C.C.), refd to. [paras. 48, 158].

Ives (E.R.) Investments Ltd. v. High, [1967] 1 All E.R. 504 (C.A.), refd to. [paras. 56, 105].

Tito v. Waddell (No. 2), [1977] 3 All E.R. 129; [1977] 1 Ch. 106 (Ch. D.), refd to. [paras. 56, 101].

Elliston v. Reacher, [1908] 2 Ch. 665, refd to. [para. 66].

Thamesmead (Town) v. Allotey (1998), 37 E.G. 161 (C.A.), refd to. [para. 71].

Ellenborough Park, Re, [1955] 3 All E.R. 667 (C.A.), refd to. [para. 80].

Government Insurance Office (N.S.W.) v. Reed (K.A.) Services Pty. Ltd., [1988] V.R. 829 (Vict. S.C.), refd to. [para. 116].

Authors and Works Noticed:

Aughterson, E.P., In Defence of the Benefit and Burden Principle (1991), 65 A.L.J. 319, p. 331 [para. 122].

Bradbrook, MacCallum and Moore, Australian Real Property Law (2nd Ed. 1997), pp. 18-6, 18-7 [para. 96].

Cardozo, Benjamin N., The Nature of the Judicial Process (1921), p. 14 [paras. 99, 157].

Coke on Littleton, generally [para. 66].

Crane, F.R., Case Comment, [1957] The Conveyancer & Property Lawyer 160, generally [para. 66].

Davis, Christine, The Principle of Benefit and Burden (1998), 57 C.L.J. 522, pp. 548 [para. 123]; 552 [paras. 123, 140]; 553 [para. 123].

Gillese, Eileen, Property Law (2nd Ed. 1990), p. 20:10 [para. 140].

Gravells, N.P., Enforcement of Positive Covenants Affecting Freehold Land (1994), 110 L.Q.R. 346, p. 349 [para. 119].

Gray, Kevin, Elements of Land Law (2nd Ed. 1993), pp. 1133, 1134 [paras. 95, 142].

Halsbury's Laws of England (4th Ed. 1976), vol. 14, p. 79 [para. 79].

Megarry, Robert E., and Wade, H.R.W., The Law of Real Property (6th Ed. 2000), pp. 1006 to 1010 [para. 53]; 1008 to 1010 [para. 70].

Megarry, Robert E., Case Comment: Halsall v. Brizell (1957), 73 L.Q.R. 154, pp. 155 [para. 66]; 156 [paras. 66, 104].

New Zealand, Property Law and Equity Reform Committee, Report on Positive Covenants Affecting Land (1985), generally [para. 42].

Ontario, Law Reform Commission, Report on Covenants Affecting Freehold Land (1989), pp. 1 [para. 36]; 21 [para. 37]; 22 [para. 38]; 23 [paras. 63, 140]; 100 [paras. 38, 142]; 101 [paras. 38, 39, 40]; 102 [para. 40]; 104 [para. 43].

United Kingdom, Law Commission, Transfer of Land: The Law of Positive and Restrictive Covenants (1984), p. 19 [para. 96].

Wade, H.W.R., Case comment: Halsall v. Brizell, [1957] C.L.J. 35 [para. 104].

Ziff, Bruce H., Positive Covenants Running With Land: A Castaway on Ocean Island (1989), 27 Alta. L.R. 354, pp. 355 [para. 108]; 356 [para. 101]; 357 [para. 131]; 369 [para. 142]; 372 [para. 121].

Ziff, Bruce H., Principles of Property Law (3rd Ed. 2000), p. 366 [para. 97].

Counsel:

Patricia M. Conway, for the appellant;

Alan S. Price and Peter A. Simm, for the respondents.

This appeal was heard on October 18-19, 2001, before Charron, MacPherson and Cronk, JJ.A., of the Ontario Court of Appeal.

The judgment of the Court of Appeal was released on March 20, 2002, and the following opinions were filed:

Charron, J.A. (Cronk, J.A., concurring) - see paragraphs 1 to 89;

MacPherson, J.A., dissenting - see paragraphs 90 to 161.