Deagle v, 2013 ABQB 708

Court of Queen ’ s Bench of Alberta Citation: Deagle v 1678452 Alberta Ltd., 2013 ABQB 708 Date: 20131202 Docket: 1303 11367 Registry: Edmonton Between: Dennis Deagle, Joseph Vaitkunas, Victoria Vaitkunas and John Mitchell Applicants (Plaintiffs) - and - 1678452 Alberta Ltd. Respondent (Defendant) _ ________________________________________ ______________ Reasons for Judgment of the Honourable Mr.

Justice Donald Lee _________________________________________ ______________ Background [ 1 ] This is an application to enforce certain provisions in a restrictive covenant by the Applicants who are property owners in Glenora.

These property owners filed an Originating Application to enjoin the breach of restrictive covenants contained in the Carruthers Caveat registered against all the relevant titles herein in December 1911. [ 2 ] The relevant portions of the Carruthers Caveat read as follows: - “It is further agreed that the said land is purchased subject to the following conditions as to building or otherwise, and the purchaser for himself, his heirs, executors, administrators, and assigns covenants, promises, and agrees to observe the conditions strictly; -

... 2. No building of any kind other than a private dwelling house with appropriate offices and outbuildings to be appurtenant thereto and occupied therewith shall be erected upon the said and, and no trade or business of any kind shall be carried on upon any part of the said land, and no part of the said land or any building thereon shall be used as a place of public entertainment, amusement, or resort, 3. Not more than one dwelling house shall be erected upon the said land or any part thereof. 4.

The house to be erected upon the said lands shall be either detached or semi-detached... [ 3 ] The Respondent 1678452 Alberta Ltd. lists the following background facts for the Court to consider in paragraphs 3 through 19 of its November 1, 2013 filed Brief, which I accept for purposes of this application: - 3. In August 2012, Suhaib Al-Kurtass and Tatiana (Alice) Horhota (hereinafter referred to “Suhaib and Alice”) decided to purchase the home located at 10316 - 134 Street NW, Edmonton, Alberta (hereinafter “the Home”).

As Suhaib and Alice were not married, they chose to register the Home in the name of 1678452 Alberta Ltd. (hereinafter “1678452). Suhaib and Alice are equal shareholders of 1678452. 4. Suhaib and Alice moved into the Home in August 2012. 5. Once Suhaib and Alice moved into the Home, they realized that it was too small and required significant renovations. In particular, the kitchen was very small and the basement suite was in poor condition. As a result, they decided to renovate the Home. 6. In April 2013, Alice, on behalf of 1678452, applied for Minor Development Permits for the renovations.

The applications included renovations to the main floor and basement, as well as the addition of a second storey. Plans were submitted to the City of Edmonton with respect to the renovations. 7. A Development Permit was issued by the City of Edmonton on May 17, 2013. 8. One of the neighbors appealed the Development Permit. The Appeal proceeded on June 26, 2013. The Subdivision Development Appeal Board (SDAB) denied the Appeal and approved the Development Permit.

The reasons for the decision of the SDAB indicated: “It is the opinion of the Board that the proposed development would not unduly interfere with the amenities of the neighborhood, nor materially interfere with or affect the use, enjoyment, or value of neighboring parcels of land.” 9. It was not until after the Development Permit was granted that Suhaib and Alice became aware of the Carruthers Caveat on the property. 10. Since the SDAB Hearing, Suhaib and Alice have made some change to the plans that were submitted to the City of Edmonton.

On the main floor, there is a small dining room area located between the kitchen and bathroom. The staircase next to the bathroom and dining room has been moved further west in order to extend and expand the dining room and family room area. The staircase will be located within the dining room and family room area and will allow for interior access to the basement. The staircase at the west end of the kitchen is also part of the dining room and family room area and will lead up to the new second storey addition. 11.

The only access to the second storey addition will be by virtue of the interior staircase at the west end of the kitchen. 12. Suhaib and Alice are presently living on the main floor of the Home. 13. The basement is in the midst of renovations. Once completed, the basement will consist of two bedrooms, a living area, a bathroom, and kitchen. Access to the basement will be either from the interior staircase located in the dining room and family room area or by virtue of an exterior staircase from the outside of the Home.

Once the renovation is complete, the basement will not be separated from the rest of the Home. 14. Once the basement renovations are completed, Suhaib and Alice will be living in the basement. Once the main floor renovation has been completed, Suhaib and Alice will move back into one of the bedrooms on the main floor of the Home. 15. Once the Home’s renovations are complete, the Home will have the following: a. One boiler for the entire house, generating one gas bill; b. One hot water tank to service the entire house; c. One water meter and one electrical meter for the entire house, generating one bill; d.

One address, one front door, one mailbox, and one front doorbell; e. One yard, one main floor deck, one garage; f. One property tax bill for the entire house. 16. Once the renovation is completed, the Home will have an interior staircase in the main living area on the main floor of the Home. The interior staircase will go to the basement. Once the second storey is added, there will also be an interior staircase on the main floor of the Home leading up to the second storey. 17. Neither Suhaib, nor Alice, nor 1678452 are carrying on any business on the premises. The Minor Home-Based Business Permit

has been cancelled by Suhaib on behalf of 1678452. The renovations do not include the construction of an office. 18. Suhaib and Alice are proceeding with the renovations as the Home is quite small and they wish to stay in the Home as their own residence over the long-term. Renovating the Home will allow for Suhaib and Alice to start a family and also to allow out of country relatives to stay in the Home and be comfortable during their long-term visits. The renovated basement will be available for long-term family visits or a live-in nanny, should Suhaib and Alice be able to have children. 19.

The renovations are not for business or commercial purposes. Once completed, the renovations will make it more useable as a family home. Issues [ 4 ] The issues on this application are as follows: - (

a) Does the construction and/or use of a basement Secondary Suite contravene restrictive covenants contained in the Carruthers Caveat restricting construction and use to a private dwelling house; (

b) Does rental of the basement Secondary Suite as described in Ms. Horhota’s evidence to the SDAB contravene the limitation in paragraph 2 of the Carruthers Caveat that “no trade or business or any kind shall be carried on upon any part of the said land”.

Applicants’ Submissions [ 5 ] The Respondent’s renovations, which are still in progress, and the proposed use of land contravene the provisions of the Carruthers Caveat because the intended Secondary Suite in the basement contravenes the limitations in paragraphs 2 and 3 of the Carruthers Caveat limiting improvements to “a private dwelling house” and providing that “not more than one dwelling house shall be erected upon the said land or any part thereof’. [ 6 ] The applicants argue that the first two parts of condition No. 2 of the Carruthers Caveat reinforce one another, that is, the requirement for a private dwelling house and the prohibitions against conducting a trade or business of any kind are two sides of the same coin and make very clear the intention of the Carruthers Caveat’s author. [ 7 ] The Carruthers Caveat specifically prohibits both the use of property for a purpose other than a private dwelling house and specifies that not more than one dwelling house shall be erected.

In the current context, the Respondents only have one house, however, with the development of a basement suite, this house will contain two dwellings, which is prohibited by the Carruthers Caveat. [ 8 ] Although the City of Edmonton Zoning Bylaw and the Carruthers Caveat are not in pari materia , it is, useful to look at the definition in the Edmonton Zoning Bylaw for “dwelling”.

Section 6.1(26) of the Zoning Bylaw defines “Dwelling” as follows: 27. Dwelling means a self-contained unit comprised of one or more rooms accommodating sitting, sleeping, sanitary facilities, and a principal kitchen for food preparation, cooking and serving.

A Dwelling is used permanently or semi-permanently as a residence for a single Household. [ 9 ] The definition of “Dwelling” in the Zoning Bylaw, if applied to the Respondent’s renovation, would result in the house having two dwellings, one in the basement and one on the main floor. [ 10 ] There has been both Canadian and English judicial consideration of the nature of the prohibition against having more than one “private dwelling”.

These cases are instructive in determining whether a secondary suite within one house offends a prohibition against having more than one dwelling on lands. [ 11 ] The English case of Crest Nicholson Residential (South) Limited v Fiona Ruth McAllister , [2002] EWHC 2443 (Ch), [2003] All E.R. 46, at paragraphs 21 to 31, helpfully summarized much of the English consideration of the requirement that only “a private dwelling house” may be erected on lands. [ 12 ] In the Crest Nicholson case, the restrictive covenant contained the following restriction, among others:

(2) The premises shall not be used for any purpose other than those of or in connection with a private dwelling house or for professional purpose. ... [ 13 ] Therefore, one of the matters the Court had to address was whether this meant only one dwelling could exist. [ 14 ] The High Court of Justice, Chancery Division concluded that the reference to “a private dwelling house” conveyed singularity, as decided in Dobbs v Linford , [1953] 1 Q.B. 48 (Court of Appeal) .

Therefore, only one dwelling house could be constructed. [ 15 ] The Dobbs case dealt with a restriction in a tenancy agreement to only use the premises for the purpose of “a private dwelling- house” and not to “sublet or part with possession of the premises without the consent of the landlord...” While the principal tenant did not part with possession of the entirety of the property, the tenant had sublet the top floor while occupying the remainder of the property.

An argument was made in the Dobbs case that the property remained a private dwelling house even though it could comprise two or more private dwelling houses. The Court of Appeal upheld the lower court’s conclusion that the phrase “a private dwelling house” envisages the use of the whole building as one dwelling house, and therefore it “creates a conception which is broken by, or is inconsistent with, the division of the house into more than one residence.” [ 16 ] The Court of Appeal judge later stated at p. 52:

[i]t seems to me, then, that one has to take this covenant as one finds it, and one finds that it is a covenant to use the premises for noother purpose than that of a private dwelling house, and one finds, and it is not in dispute, that it has been used by the tenant, partly as adwelling house for her sub-tenant.

That appears to me to be a clear breach of the covenant which is not rescued from being a breach ofthe covenant by the conception to which I have referred, that she impliedly had the right to sublet that part of it. [17] The Crest Nicholson case was reversed on appeal in Crest Nicholson Residential (South) Limited v Fiona Ruth McAllister,[2004] EWCA Civ 410 but for reasons unrelated to the Court’s comments on the meaning of a “private dwelling”.

In fact, Lord JusticeChadwick stated at para. 53 that with respect to the limitation of use of a single private dwelling house: I see no reasons to differ from the conclusions reached by the Judge on those issues. [18] Canadian cases have similarly concluded that a limitation on using or erecting a property as a private dwelling house meansthere cannot be several dwellings within one house. [19] In Alexander v Malcheski, 1953 CarswellMan 30, 8 W.W.R. (N.S.) 73, (Q.B.), aff’d (MB CA), 1953CarswellMan 68, 61 Man.

R. 138 (C.A), the Manitoba Court of Appeal considered a building restriction agreement registered by way ofcaveat against certain property owned by the defendants. The restriction agreement contained the following prohibition: No building shall be erected on or upon any of the said lots ... to be used for any other purpose other than of a private dwelling house ...and the using of any building so erected for any other purpose than as aforesaid shall be a breach of this covenant. [20] The defendant was letting three rooms on the second floor of the property and two rooms on the top floor.

Both sets of tenantscooked in their rooms, using a hot plate. There was a sink on the top floor, a bathroom and lavatory on the second floor and a sink in thekitchen on the main floor and a lavatory in the basement. [21] The court concluded, at paragraph 10, that, whether or not the tenants of the top floor were roomers, the premises were plainlynot being used as a “private dwelling house”.

The court stated “these words contemplate the use of the entire house as a single dwellingand create a conception which is inconsistent with the division of the house into more than one residence:” (citations excluded). [22] In Alberta, a similar conclusion has been reached by courts considering restrictive covenants that restrict the use andconstruction of buildings on lands to “a private dwelling”. Szymanski v Excel Resources Society, 2004 ABQB 89 dealt with theHudson’s Bay restrictive covenant.

In this case, the court concluded that a proposed building that had one kitchen and one dining roomwas, in fact, a private dwelling. The restriction in that case read as follows:

(1) That only one private dwelling house, together with the necessary outbuildings shall be erected on any one of the said lots. A block offlats, tenement house, or any building constructed to accommodate more than one household shall not be deemed a private dwellinghouse within the meaning of this clause. ...

(7) That no building erected on any of the said lots shall be used for any purpose other than that of or connected with a private dwellinghouse, and no such building shall be used as a block of flats, apartments or tenements house. A garage or other outbuilding shall not beused as a private dwelling house. Symanski, supra, at para 6. The court found the residents would be living together as one household and, therefore, the planned building did not violate the caveat.

Respondent’s Submissions [23] The Respondent argues that its renovations do not contravene Paragraphs 2, 3, and 4 of the Carruthers Caveat as therenovations to a basement do not create a second dwelling house. The basement is not self-contained as it is accessible to and from theinterior main living area of the Home and thus allows the family members to access the basement from the interior of the Home. Further,the basement does not have a separate heating or electrical system. Rather, the entire Home will be serviced from one boiler, one hotwater heater, with one water meter and one electrical meter.

The Home will have one address, one front door entering into the livingroom of the Home, one mailbox, one front doorbell, one yard, one main floor deck, and one garage. Clearly, the Respondent argues therenovations do not create two dwelling houses within one structure.

Simply having two kitchens in the same home cannot be acontravention of the Carruthers Caveat. [24] Alternatively, even if renovating a basement could be construed as creating a second dwelling house, such a renovation wouldbe akin to erecting a semi-detached house, which development does not offend the terms of the Carruthers Caveat. [25] In reading the Carruthers Caveat as a whole, Paragraphs 2, 3, and 4 must be read together and not be inconsistent with eachother. The intention of Mr. Carruthers can only be ascertained by reading the provisions in harmony with each other. Mr.

Carruthersintended that one dwelling house (Paragraph 3) shall be erected upon the said land; that the one dwelling house shall be a privatedwelling house (Paragraph 2); and that the dwelling house to be erected shall be either detached or semi-detached (Paragraph 4). In otherwords, he intended that the house be used as a private, as opposed to public, residence and that more than one family could live in thehouse. To suggest that Paragraphs 2 and 3 restrict the property to only one dwelling would be inconsistent with Paragraph 4 of theCarruthers Caveat. [26] Should Mr.

Carruthers have wished to limit the permissible use of the property to a family residence, he should have stated soin the covenant.

[27] There are Canadian cases which have held that a “private dwelling” restriction does not limit a permissible private dwelling toa one family residence. [28] In the case Gray v Kane, (NB KB), 190 N.B.R. (2d) 245, it was the intent of the purchaser to utilize thehome as two separate apartments, one in the basement and one on the main floor.

The restrictive covenant stated: No building erected or to be erected on the land hereby granted shall be other than a newly constructed dwelling nor shall the saidbuilding be used at any time within the period of 50 years from the date hereof for any purpose other than that of a private dwelling... [29] As stated by the Ontario Court of Appeal at Paragraph 17: The contrast between the prohibition in by-law number 6103, expressed in the words that no building shall be erected or used for anypurpose other than a private residence, and the prohibition in by-law number 11737, expressed in the words that no building shall be usedexcept for the purpose of “a one- family detached dwelling” is not without significance.

To my mind it indicates that the council, too, inpassing the latter by-law, realized that the prohibition in the former did not prohibit a dwelling being erected or used as the privateresidence of more than one family.

The council in passing the latter by-law thereby interpreted the extent of the limitation contained inthe former, a limitation that was not exceeded by the alterations that the defendant made. [30] The case of Goodwin v Riley, 2006 BCCA 581, contained the following restriction: Not at any time hereafter to erect any building or structure on each lot other than a dwelling house which may be single family, duplex ormultiple residence building, with or without garage and usual outbuildings. [31] As with the Carruthers Caveat, the restriction in Goodwin allowed for the erection of a duplex.

The Respondents in Goodwinargued that “a dwelling house” can only mean one dwelling house. [32] Justice Lowry, giving the majority decision of the Court of Appeal, stated at Paragraph 9 as follows: It is, in my view, significant that the building scheme does not preclude subdivision which for all practical purposes would haverestricted the number of houses on each of the original four lots to one.

That is not, however, determinative and it may be, as the Hartyscontend, that the object of the restriction was to limit the density of the homes on those lots such that a “dwelling house” means only onedwelling house per lot. But if that is so, it is difficult to see why provision was specifically made for duplex or multi- residence buildingsand, perhaps more importantly, why the wording did not specify one dwelling house, as would be expected if that was the actualintention. [33] The Applicants’ Brief includes a number of Canadian and English cases.

These cases are not helpful as they do not include arestrictive covenant that allows for the erection of a semi-detached house and how that condition would affect the

interpretation of thewords “private dwelling house” or “one dwelling house”. Further, virtually all of the cases in the Applicants’ Brief deal with restrictivecovenants that were extremely detailed in providing specific

definitions as to what may or may not constitute a “private dwelling house”. [34] In the case of James and Cutts, Re, (ON SC), [1923] 4 D.L.R. 950, the restriction prohibited the erection ofattached or semi-detached houses. The restriction allowed for only one detached dwelling house and no more. The Defendant in Jamesand Cutts intended to erect a duplex consisting of a ground floor and a first floor above it. The Court considered this construction toconsist of a duplex and specifically against the restrictive covenant, which did not allow for the erection of semi-detached house.

TheCarruthers Caveat allows for the erection of a semi-detached house. According to the James and Cutts case, this would include a groundfloor with a first floor above it. [35] The English case of Crest Nicholson Residential (South) Limited v Fiona Ruth McAllister, [2002] EWHC 2443 (ch), dealtwith the following restrictive covenant: The premises shall not be used for any purpose other than those of or in connection with a private dwelling house or for professionalpurpose. [36] Importantly, the Crest Nicholson decision did not allow for erection of a semi-detached house or duplex.

Thus, based upon aninterpretation of the entire restrictive covenant, the Court held that only one private dwelling house could be erected on the lot. Again, asnoted earlier, the Carruthers Caveat allows for the erection of a duplex, or a multifamily home on the lands. [37] Neither Suhaib nor Alice, nor 1678542 are carrying on a business from the Home. The renovations are not for business orcommercial purposes. No one is living in the Home other than Suhaib and Alice.

Although a Business Permit had been issued in May2013, Suhaib on behalf of 1678542 has cancelled the Business Permit. [38] The Respondents are not carrying on any trade or business of any kind upon any part of the said land. The Respondents areliving in the Home and are renovating the Home for their own use. [39] The Applicants are not entitled to an injunction when no contravention of the Carruthers Caveat exists. Analysis [40] It is clear to me that the Carruthers Caveat is a valid and enforceable caveat protecting the restrictive covenant running with

the lands, and that the Respondent’s lands and premises are subject to the Carruthers Caveat. [41] A restrictive covenant being in the nature of a contract is to be interpreted in the light in which the parties would haveunderstood it at the time the contract was made. [42] The applicable law with respect to the

interpretation of a restrictive covenant is found in Tanti v Gruden, [1999] AJ No. 526where our Court of Appeal noted the following at paragraphs 9 and 10: In interpreting a restrictive covenant, Courts “look not only to the words of a covenant, but to the object to attain which it was enteredinto : Knight v Simmonds, [1896] 2 Ch. 294 at 297 (C.A.). This requires a determination of the intent of Carruthers, the person whoplaced the caveat on the property. A restrictive covenant is essentially a contract: Preston & Newsom’s Restrictive Covenants Affecting Freehold Land, 8th ed., (London:Sweet & Maxwell, 1991) at 1. Therefore, the principles of contractual

interpretation offer some assistance. In BG Checo InternationalLtd. v British Columbia Hydro and Power Authority, (SCC), [1993] 1 S.C.R. 12, the majority said at 23-24: It is a cardinal rule of the construction of contracts that the various parts of the contract are to be interpreted in the context of theintentions of the parties as evident from the contract as a whole Where there are apparent inconsistencies between different terms of acontract, the court should attempt to find an

interpretation which can reasonably give meaning to each of the terms of the question. Onlyif an

interpretation giving reasonable consistency to the terms in question cannot be found will the court rule one clause or the otherineffective... . [43] The Respondent submits that it is important to note that the Carruthers Caveat does not state that the house shall be a “onefamily” private dwelling house or “one family” dwelling house, nor does the Carruthers Caveat state that the house shall be a “onehousehold” private dwelling house or a “one household” dwelling house.

It is submitted that these words were not inserted into theCarruthers Caveat as they would be inconsistent with Paragraph 4 of the Caveat indicating that the house shall be either detached orsemi-detached. The Respondent argues that a semidetached house, or duplex, would have to allow for more than one family or morethan one household to reside in the house. The Respondent argues that Mr.

Carruthers intended that the house on the lot could be erectedfor the occupation of more than one family or household, otherwise, the Caveat would not have allowed for the erection of a semi-detached building (duplex) and would have indicated that only a “single family” or only “one household” could reside in the dwellinghouse. [44] It is my respectful conclusion however that the Respondents cannot assume that a “semi-detached” building is the same as theduplex that they are creating within their current residence. As discussed in Re James and Cutts (ON SC), 1922CarswellOnt 213, [1923] 4 D.L.R. 950 (Ont. Sup.

Ct.) at CarswellOnt page 2, what the Respondent is constructing is a duplex because iteffectively is two houses, one superimposed on the other divided horizontally, while in an ordinary course in a semi-detached house thedivision is vertical: - In Ilford Park Estates Limited v. Jacobs, [1903] 2 Ch. 522, the stipulations were that not more than one house should be erected on anylot, and that no building should be erected save by the plaintiffs’ surveyor. There was also a covenant against trade being carried on.

Thedefendant proposed to erect a double tenement house on each lot, consisting of a ground-floor tenement and a first-floor tenement aboveit. The tenements were quite distinct and complete in themselves and had no communication with each other. They were entered byseparate front-doors set back under a common archway. The interior staircase leading to the upper tenement was cut off from the lowertenement by a brick wall. The building would be what is called in Toronto a duplex house.

The plaintiffs’ surveyor refused to approvethe elevations submitted, and on the defendant proceeding to erect the buildings the plaintiffs moved for an injunction. The defendantrelied on Kimber v. Adams, contending that except as to trading (a point not I question) there was no restriction as to user. Swinfen Eady,J., after stating the facts and referring to the appropriate descriptions of such a building given by Lord Brampton in Grant v. Langston,[1900] A.C. 383, says (p. 526): “In substance each building constitutes two houses which are structurally separate in every respect ...

It ismerely a case of one house superimposed on another from which it is divided horizontally, while in the ordinary case of semi-detachedhouses the division is vertical.” He declared the plaintiffs entitled to an injunction; and, the parties agreeing to treat the motion as a trial,the injunction was made perpetual. [underlining added] [45] In James and Cutts, Re, the Court was dealing with a building restriction that stated:

(2) No attached or semi-detached house shall be permitted, and one detached dwelling house and no more...may be erected and stand atany time on each 40 feet of continuous frontage. ...

(4) Each and every one of such dwelling houses shall be used for the purpose of a private dwelling house and residence only, and nobuilding erected shall be used for any other purpose other than as a private dwelling house...nor for the purpose of an apartment house. [46] The issue in the James and Cutts case was whether a duplex could be constructed on the lands. The Court found that theconstruction of the duplex would not offend (2) but would offend (4). The Court stated at p. 2 (CarswellOnt): But the second covenant (4) is more restrictive.

It refers to the only use to which the “one dwelling house” shall be put. It shall be usedfor the purpose of “a,” that is one, “dwelling house” and residence only. What is intended is the erection of a building which shall beused for the purpose of two dwelling houses and residences, one superimposed on the other — a purpose which sins against thecovenant.

[ 47 ] Furthermore. the Canadian and British cases cited by the Applicants establish to my satisfaction that the Respondent’s development which contains two dwellings however separated also violates paragraph 3 of the Carruthers Caveat, which states that only one dwelling house many be erected on a lot. [ 48 ] This definition of what a “duplex”, is found in James and Cutt , is consistent with the current City of Edmonton Bylaws that have been in existence for a number of years.

For example Bylaw 16271 defines “duplex” housing as meaning “any development consisting of a building containing only two dwellings, with one dwelling placed over the other in whole or in part . Each dwelling has separate and individual access, not necessarily directly to Grade. This type of development is designed and constructed as two dwellings at the time of the initial construction of the building. This Use Class does not include Secondary Suites or Semi-detached Housing”. Underlining added. [ 49 ] While there is no evidence before me with respect to what the definition of “duplex” was at the time Mr.

Carruthers placed his caveat on the said lands in December 1911, the burden of that the deficiency rests primarily on the Respondent because it asserts that a duplex is the same as a semi-detached house. In light of that omission or failure to establish that fact, I conclude that the Court can only determine that a duplex [which is what the proposed construction by the Respondent is], is not a semi-detached house as described in paragraph 4 of the Carruthers Caveat. [ 50 ] The Respondent assumes that since a duplex is a semi-detached house, Mr.

Carruthers had to allow for more than one family or household to reside in that house, otherwise the caveat would not have allowed for the erection of the semi-detached building in paragraph 4, which the Respondent uses interchangeably with a duplex.

However, as illustrated by counsel for the Applicants, a semi- detached building for purposes of paragraph 4 of the Carruthers Caveat would consist of the following. [ 51 ] The above diagram is also consistent with the Respondent’s own definition of what a “semi-detached” building is from its Brief: Merriam-Webster’s Collegiate Dictionary , 10th ed., defines “semi-detached” as follows: Forming one of a pair of residences joined into one building by a common sidewall Cambridge Dictionaries Online defines “semi-detached” as follows: A house that is semi-detached is one that is joined to another similar house on only one side. [ 52 ] Accordingly, even based on the Respondent’s cited

definitions of what is a semi-detached building is, the Respondent’s present development cannot be semi-detached as it is divided or created vertically, not divided by a sidewall(

s) horizontally. [ 53 ] Nor do the Respondent’s cases persuade me otherwise. In this regard the Respondent cited Gray v Kane , but the New Brunswick judge in that case by his own acknowledgement, indicates that he has quite possibly gone beyond the scope of the application that was before him: 22 I have quite possibly gone beyond the scope of an application under Rule 66 of the Rules of Court in attempting to interpret the restrictive covenant in the conveyance as it applies to the matter before me and its application to this particular residential dwelling.

Other property owners in this area who hold lands subject to this restrictive covenant and others for whose benefit it was intended are not parties to the present proceeding. The purpose of an application under Rule 66 of the Rules of Court has been considered in Court decisions and Papers. Reference can be made to the

article of Joseph T. Robertson- Marketable Title, Rule 66-In Search of a Consensus, Solicitor Journal, Vol.5, Issue 4, Page 1. The opening Paragraph of that

article reads: "Rule 66 ... was never intended to serve as a no frills' quieting of title nor as a vehicle for judicial rectification of documents on title;" (F.O.Leger, Rule 66- Use and Misuse, 1986, Solicitors Journal, Volume 2 at page 12.) That strident criticism, by a leading practitioner, was directed toward a number of judicial decisions rendered under that Rule. For example, courts have happily declared that the vendor had a good title', or that a title document be rectified', or that the purchaser must proceed with the acquisition'. Needless to say, such

declaratory orders transcend the scope of judicial discretion permitted by Rule 66. In these cases, the judges should have simply declaredthe specific title objection invalid.

In turn, it would have been acceptable to declare: that the title is marketable so far as that objection isconcerned; that had an application for rectification been sought in equity by the original parties to the deed the court would have beenprepared to order such, and should the purchaser persist in it objection to title and refuse to close, the purchaser does so subject to the lawgoverning breach of contract (with respect to the latter finding see discussions infra)." 23 In the case of Galexie Developments Limited v.

Cormier (1989) (NB KB), 89 N.B.R. (2d) 176 at page 178Justice Stevenson said: "The purpose and scope of Rule 66 has been considered in a number of decisions by Judges of this court since the Rule was introduced in1982. In one or two instances it has been held that an objection to title may be declared invalid if sufficient adverse possession is shownto support good title in a vendor who cannot show a good chain of recorded title.

However, the weight of the decisions supports the viewthat Rule 66 is not to be used as a shortcut for quieting a title." 24 It is my conclusion that the specific objection to title made by the purchaser's solicitor is a valid objection to title. This is not anapplication to interpret the clause or restrictive covenant in the deed. Interested property owners and others who were intended to benefitfrom this restrictive covenant are not parties.

I do not think, from my review of the authorities, the wording of the restrictive covenant,the unique and particular circumstances of this dwelling and this lot, that the use of this land in this manner as it had been used and theuse as proposed by Mr. Kane offends the restrictive covenant. [54] With respect to the case of Goodwin v Riley cited in support by the Respondent out of British Columbia, the B.C.

Court ofAppeal at paragraph 8 clearly interpreted the restriction imposed in relationship to its object or purpose at the time the scheme wascreated as it described in paragraphs 8, 11 and 12 as follows: - 8 I do not, however, share the judge's view that the wording of the restriction imposed by the scheme is without ambiguity. Therestriction is to be interpreted as a contractual term in the context of its factual matrix with guidance being taken from what can be said tohave been its object or purpose at the time the scheme was created: Gubbels v.

Anderson (1995), (BC CA), 8B.C.L.R. (3d) 193 [paragraph] 15 (C.A.). ... 11 I consider that, quite apart from what view might be taken of the preferred

interpretation, there are two plausible meanings that canbe given to the restriction. It can be properly read either way. The wording is not free of ambiguity. 12 It is not a matter of resolving the ambiguity. A restriction on the use of land must be clearly expressed. If ambiguity exists, it is tobe resolved in favour of the free use of the land. The principle was stated in Anderson v.

Dickie (1915), 84 L.J.P.C. 219 (H.L.) by LordDunedin at 227: Far earlier than this it had been held that all conditions restricting the use of land must be very clearly expressed, the presumption beingalways for freedom. [55] The situation or factual matrix in the words of the B.C.C.A. presently before me is significantly different than that found inGoodwin v Riley.

This is because I am not dealing with two plausible meanings with respect to the Carruthers restriction, but rather inmy respectful opinion, a clear and unambiguous restriction, given that there is no evidence provided to me that supports the propositionthat a duplex at the time of the Carruthers Caveat was the same thing as a semi-detached house. [56] There is a similar problem/issue with respect to the Respondent’s cited case of R v Heit, (ON CA), 41 C.R.84 (Ont.

C.A.). [57] In R v Heit, Riordon J stated at Paragraph 21 as follows: The dwelling in the present matter before the Court is a three level split entry house. It contains a private entrance on one side to abachelor apartment. A picture of the dwelling has been filed, it shows an attractive split level home. This picture gives the distinctappearance of a private residential dwelling. It in my opinion does not take away from the residential character of the neighborhood.

Inconstruing the words that the building can only be used for no other “...purpose other than that of a private dwelling...” in “their ordinaryor popular (as distinguished from a ‘legal or technical”) sense” as said by the Supreme Court of Canada in the Jones v. Wilson decision,this particular building does not offend the restrictive covenant. This particular building would be understood by those in the business ofbuying and selling homes as a private dwelling as opposed to an apartment complex, apartment building or commercial building.

Therestrictive covenant in question does not limit a permissible private dwelling to a one family residence as I read it. [58] The case of R v Heit, (ON CA), 41 CR. 84 (Ont. C.A.) dealt with the following by-law: No building shall be erected or used for any purpose other than a private residence.

The home in question consisted of a basement that had been remodeled so as to include two separate living compartments with separateentrances from the outside at basement level. [59] The by-law was later amended as follows: No building shall be used except for the purpose of a one-family detached dwelling... [60] The Ontario Court of Appeal stated that the change in the wording of the by-law was not without significance. It indicated that

council, in passing the latter by-law, realized that the prohibition in the former did not prohibit a dwelling being used as the private residence of more than one family. This is clearly a different factual matrix than the Carruthers caveat matter presently before me. [ 61 ] As for the Alberta case of Szymanski v Excel Resources Society , cited by the Respondent, the Court there found that the residents would be living together as one household, and therefore the planned building did not violate the caveat.

This is clear from my colleague Marceau, J’s description of the building in question at paragraph 21: - 21 In any event, it is the building itself rather than its use which is the focus of paragraph 1 of the HB Restrictive Covenant. The building has one kitchen and one dining room.

It was not constructed to accommodate more than one household . [underlining added] [ 62 ] This is clearly different from the present Glenora development soon to be completed by the Respondent in which the renovated area has its own kitchen and is a self-contained living unit. [ 63 ] Furthermore, I agree with counsel for the Applicants that the Secondary Suite in the basement could be brought into compliance with the Carruthers Caveat by simply eliminating the kitchen and dining areas, leaving only bedrooms, a bathroom and a sitting area, which would not constitute a separate “dwelling”.

Conclusion [ 64 ] The first issue before the Court is whether the construction and/or use of a basement Secondary Suite contravene restrictive covenants contained in the Carruthers Caveat restricting construction and use to a private dwelling house. [ 65 ] By the Respondent’s own

definitions both from the dictionary, and in accordance with the present bylaws of the City of Edmonton, a duplex is not a semi-detached house and is contrary to paragraph 4 of the Carruthers Caveat. We also know from James and Cutts that the development in question by the Respondent is clearly a duplex house divided horizontally as opposed to a semi- detached house where the division is vertical, which is also described in the 1900 case of Grant v Langston .

Accordingly, I have some evidence that can be relied on that at the time of the Carruthers Caveat in December 1911, a duplex was not included in the definition of a semi-detached house. Therefore the present construction contravenes the restrictive covenants contained in the Carruthers Caveat restricting construction and use to a private dwelling house since there are two potential dwelling houses on the lot. [ 66 ] The second issue before the Court is does rental of the basement Secondary Suite as described in Ms.

Horhota’s evidence to the SDAB contravene the limitation in paragraph 2 of the Carruthers Caveat that “no trade or business or any kind shall be carried on upon any part of the said land”. [ 67 ] I conclude that the prohibition against conducting a trade or business is a corollary of the private dwelling house restriction. Therefore the rental of the basement secondary suite would contravene the limitation in paragraph 2 of the Carruthers Caveat. This

interpretation is confirmed by Ms. Horhota’s own evidence to the SDAB on June 26, 2013 which confirmed: “Ok, ok, let’s say, let’s say we are renting”, indicates the basement suite with its own access to the exterior will be rented out. Rental of the basement suite would violate the Carruthers Caveat prohibition against conducting a business. [ 68 ] In his cross-examination on Affidavit, Suhaib Al-Kurtass stated that it was the intention of he and Ms.

Horhota, once construction of the two bedroom secondary suite in the basement was completed, to move into the basement suite while the main floor renovations were constructed. If so, there would be only one operative dwelling unit in the house while the main floor was renovated. [ 69 ] Accordingly, the Applicants agree to a stay of the injunction prohibiting the construction or use of a Secondary Suite until the main floor renovations have been completed, at which point there would be two dwelling units in the premises, one on the main floor and one in the basement, contrary to the Carruthers Caveat.

The Applicants propose that the injunction then become effective and that compliance take the form of removal of the kitchen, kitchen appliances and dining facilities in the basement suite, so that it would no longer constitute a dwelling. The bedrooms and bathroom in the basement could remain. [ 70 ] The Application is granted with costs in favour of the Applicants, and the following Order will issue: (

a) A declaration that the Carruthers Caveat bearing Land Titles Instrument No. 4387AI registered, inter alia , against the lands owned by the Respondent corporation, to wit: PLAN 2803AF BLOCK 107 LOT 1 EXCEPTING THEREOUT ALL MINES AND MINERALS Edmonton, Alberta, is a valid and enforceable caveat protecting the restrictive covenants referred to therein which run with the Lands; (

b) A declaration that the Applicants, being property owners whose properties are also subject to the benefit and burden of the restrictive covenants protected by the Carruthers Caveat; have standing to enforce the terms of the restrictive covenants against the

Respondent; (

c) A permanent injunction enjoining the Respondent, its shareholders, directors, officers, employees, successors and assigns from: (

i) constructing, developing, renovating or using the lands and the buildings thereon to create one or more additional suites or dwellings or Secondary Suites on the lands or in the building on the lands, or any part thereof; and (ii) constructing, developing, operating or conducting on the lands any trade or business of any kind, including, in particular, without limitation, the business of renting a suite. Heard on the 13 th day of November, 2013. Dated at the City of Edmonton, Alberta this 2 nd day of December, 2013. Donald Lee J.C.Q.B.A. Appearances: K.D. Wakefield, Q.C. and Shauna N.

Finlay Dentons Canada LLP for the Applicants (Plaintiffs) Nancy E. Cumming, Q.C. and Paul Osbaldeston (Student-at-Law) Bryan & Company LLP for the Respondent (Defendant)