Denesik v Verhulst Estate, 2016 ABQB 36

Court of Queen ’ s Bench of Alberta Citation: Denesik v Verhulst Estate, 2016 ABQB 36 Date: 20160118 Docket: 1503 03335, 1403 15652 Registry: Edmonton Action No. 1503 03335 Between: Alymer Denesik Applicant - and - Sandra Lee Verhulst As Administratrix of the Estate of Gary Verhulst Respondent Action No. 1403 15652 Between: Sandra Lee Verhulst As Administratrix of the Estate of Gary Verhulst Applicant - and - Alymer Denesik Respondent

_______________________________________________________ Reasons for Judgment of W. S. Schlosser, Master in Chambers _______________________________________________________ [1] This is an application for a declaratory judgment giving Alymer Denesik prescriptive title to three parcels of land by adversepossession. There is a cross application for partition and sale. Facts [2] The application concerns a 159 acre ‘home quarter’, and two river lots: totalling 96 acres.

The home quarter and the riverlots are about six kilometres apart. [3] The land was acquired as part of a joint venture between the Applicant and the late Gary Verhulst. They had been in businesstogether, stuccoing homes. Their plan was to buy the land, harvest the timber and divide the profits. This enterprise was financed bythird parties. [4] The timber was harvested. The proceeds were divided. The mortgages were paid. The operation wound down in the fall of1995. [5] Mr. Denesik moved onto the home quarter in 1996 and has lived there ever since.

He lives in a trailer with a home-madewater system and no electricity or gas. Mr. Denesik now argues that his occupation has ripened into ownership. [6] The County has not acknowledged Mr. Denesik’s residence on the home quarter. It is assessed as “no improvements”. [7] Mr. Verhulst died in April of 2008. Sandra Lee Verhulst was appointed Administratrix shortly afterwards. [8] Mr. Denesik wants title to all of the land pursuant to the Limitation Act, RSA 2000 C. L-12 and

section 74 of the Land TitlesAct, RSA 2000, c. L-4. Mr. Verhulst’s estate wants partition and sale pursuant to sections 15-17 of the Law of Property Act, RSA 2000,c. L-7. List of Authorities 1. Lutz v Kawa, 1980 ABCA 112 , [1980] 13 Alta LR (2d) 8 2. Principles of Property Law (6th ed), Bruce Ziff, Carswell 3. Keefer v Arillotta, (1977), (ON CA), 13 OR (2d) 680 4. Russell v Blundon, 2002 NFCA 20 5. Topper v Topper (1978) 20 Nfld 2 P.E.I. R., 301 6. Anger & Honsberger Law of Real Property (3rd ed) Canada Law Book 7. Sheffield Welding and Fabricating Ltd. v. 958760 Alberta Ltd., 2003 ABQB 181 per Read J. 8.

Gonzalez v Soto, 2009 ABQB 454 per Veit J. 9. Christensen v Leigh, 2009 ABQB 247 10. Land Titles Act, RSA 2000, c L-4,

section 74 11. Law of Property Act, RSA 2000, c L-7, sections 8, 15-17 12. Limitations Act, RSA 2000, c L-12,

section 2, 3 13. Limitations of Actions Act, RSA 1980 c. L-15

14 ‘Something for Nothing; The Law of Adverse Possession in Alberta’ Sandra Petersson, 1992 Alta Law Review, vol. (3d) No. 4 pp1291 - 1323 Adverse Possession [9] Adverse possession is an important but rarely used way of acquiring title to land. An

article by Sandra Petersson: Somethingfor Nothing: The Law of Adverse Possession in Alberta, 1992 Alberta Law Review, volume 30, No. 4, pages 1291-1323 provides acomprehensive historical review of the topic. [10] Adverse possession in this Torrens jurisdiction is an exception to the principle of indefeasibility under the Land Titles Act.There are few cases because it is rarely used. [11] The leading case in Alberta is Lutz v Kawa, (1980) 1980 ABCA 112 , 13 Alta LR (2d) 8. The law was brought up todate by Langston J. in Rinke v Sara, 2008 ABQB 756.

At para 19, Justice Langston said : [19] The elements to establish a claim for adverse possession are as follows: a. The true owner must be out of possession of the claimed lands; b. The claimant must be in use and occupation of the claimed lands; c. The claimant’s use and occupation must be exclusive, continuous, open or visible and notorious for the requisite 10 year period;and d.

The fact of use and occupation by the claimant is the only determinant while the belief, ignorance, mistake or intention of theclaimant is immaterial. [12] The claim is based, in part, on the passage of time and the effect of limitation statutes. The decided cases, and this case, spanmore than one limitation regime [13] The current Limitations Act provides: 2(1) This Act applies where a claimant seeks a remedial order in a proceeding commenced on or after March 1, l 999, whether the claimarises before, on or after March 1, 1999.

(2) Subject to sections 11 and 13, if, before March l, 1999, the claimant knew, or in the circumstances ought to have known, of a claimand the claimant has not sought a remedial order before the earlier of

a) the time provided by the Limitation of Actions Act, RSA1980 cL-15, that would have been applicable but for this Act, or

b) two years after the Limitations Act, SA 1996 cL-15.l, came into force, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim.

(2.1) With respect to a claim for the recovery of possession of land as defined in the Limitation of Actions Act, RSA 1980 cL-15,subsection (2) shall be read without reference to clause (

b) of that subsection.[1] [14] The other provisions of the Limitations Act that apply are as follows: 3(1) Subject to subsections (1.1) and (1.2) and

section 11, if a claimant does not seek a remedial order within (a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known (

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding, or (b) 10 years after the claim arose, Whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of theclaim. (3) for the purposes of subsections (1)(

b) and (1.1)(b), (

f) a claim for remedial order for the recovery of possession of real property arises when the claimant is dispossessed of the realproperty.

(4) The limitation period provided by subsection (1)(

a) does not apply where a claimant seeks a remedial order for possession of realproperty, including remedial order under

section 69 of the Law of Property Act.

(6) The re-entry of a claimant to real property in order to recover possession of that real property is effective only if it occurs prior to the end of the 10-year limitation period provided by subsection (l)(b).

(7) If a person in possession of real property has given to the person entitled to possession of the real property an acknowledgment in writing of that person's title to the real property prior to the expiry of the 10-year limitation period provided by subsection (I )(b ), (

a) possession of the real property by the person who has given the acknowledgment is deemed, for the purposes of this Act, to have been possession by the person to whom the acknowledgment was given, and (

b) the right of the person to whom the acknowledgment was given, or of a successor in title to that person, to take proceedings to recover possession of the real property is deemed to have arisen at the time at which the acknowledgment, or the last of the acknowledgments if there was more than one, was given.

(8) If the right to recover possession of real property first accrued to a predecessor in title of the claimant from whom the claimant acquired the title as a donee, proceedings to recover possession of the real property may not be taken by the claimant except within 10 years after the right accrued to that predecessor. (emphasis added) [ 15 ] As section 3(3)(

f) provides, the time limit for an adverse possession claim is 10 years from ‘dispossession’. The two year period specified by section 3(1)(

a) does not apply (s. 3(4)). In other words, the dispossession must have lasted longer than 10 years. [ 16 ] ‘Dispossession’ in section 3(3)(

f) is not defined by the Act. That is where the common law comes in. Mere use or occupation is not enough. In Principles of Property Law (at p. 146), the learned author says: “In general, the adverse use must be such as to put the paper owner on notice that a cause of action as arisen. After all, the doctrine is based on the failure to bring suit within the limitation period.” [ 17 ] Sub-section 3(3)(

f) is unusual. Most of the other things in section 3(3) refer to temporal events: “acts”, “omissions” or “conduct”, for example, not legal events. Section 3(3)(

f) refers to an event that has a certain legal character. Every type of possession does not necessarily constitute ‘dispossession’, just as every act or omission is not negligence. So we need the common law and, in my view, the elements in section 3(1)(

a) of the Limitation Act to know when the 10 year clock begins to run. [ 18 ] There does not have to be a “outster”: ( Lutz, per Laycraft J.A. (for the Court) at para. 33). That law was swept away in 1833. Physical possession alone may not be enough. The quality of possession must be such that the owner (or a reasonable person in the position of the owner) realizes that he should assert his right or risk losing the land. [ 19 ] Section 3(4) of the Limitations Act tells us that the two year time period specified by section 3(1) (

a) does not apply. However, the three elements of 3(1)(a): ‘an injury has occurred’, ‘it was attributable to the conduct of the defendant’ and that ‘a proceeding is warranted’ are a familiar and accessible way of determining whether an owner should seek a remedial order for possession (or repossession) or risk giving the occupier prescriptive right. Analysis [ 20 ] Mr. Denesik and Mr. Verhulst were co-owners. Mr. Denesik (and now Mr. Verhulst’s estate) are tenants in common by virtue of

section 8 of the Law of Property Act . This gives them equal rights to possess the entire property and no rights of survivorship to the others interest. [ 21 ] Co-ownership has two consequences.

Wilson, J.A., writing for the Ontario Court of Appeal in Keefer v Arillotta referred to Thomas v Thomas (1855), 2 K&J 79 at 83, 69 ER 701 , per Sir William Page Wood, DC and said: “Possession is not adverse to the extent that it is referable to lawful title.” [ 22 ] The burden on a co-owner to establish prescriptive title is much heavier than if the adverse possessor has no underlying right: Russell v Blundon , per Marshall, J.A. at paras. 51-53. The circumstances have to be exceptional for one co-owner to ‘dispossess’ another.

Furthermore, the Keefer decision concluded that it does not matter if the person seeking prescriptive title has only dispossessed the co-owner of uses the co-owner never intended or desired to make. [ 23 ] The Russell case (per Gushue, J.A., Wells, CJN, concurring) also stands for the proposition that a co-owner’s lack of interest in a jointly owned property is not relevant. [ 24 ] Mr. Verhulst was indifferent to the property once the logging operations had ceased. But Mr. Verhulst’s indifference to the property, or the enjoyment of it by his co-owner, is in itself, not enough to give Mr. Denesik title.

The onus of showing dispossession is on the applicant. [ 25 ] There is one other key point: Mr. Denesik occupied only a portion of the home quarter, which is not easily severable from the rest of the parcel and would, in no sense, count towards prescriptive title to the river lots, which are about six kilometres away. [ 26 ] On these facts, there was no time at which Mr. Verhulst was dispossessed – or dispossessed to the point where he should have realized that he had to seek a remedial order to recover possession, or lose title.

A co-owner putting a trailer on to the home quarter in 1996 was not enough to establish a claim to the entire home quarter, much less the river lots as well. Disposition

[ 27 ] The river lots (NE 10 and NW 10) were appraised in September, 2014 at $288,000.00. The home quarter (NE 20) was appraised at $238,500.00. In my view, the most equitable way of dealing with the relative claims by the parties is by the cross- application request for an Order of Partition and Sale. As noted above, subdividing NE 20 is not the most accessible option, even if the County were onboard. [ 28 ] The Applicant Alymer Denesik’s application for declaratory judgment is dismissed. The cross application for partition and sale is allowed as follows: 1) An Order under section 15(2) (

c) of the Law of Property Act directing the sale of Verhulst’s ½ interest in NE 20 to Alymer Denesik for $1.00; 2) An Order directing the sale to the Estate of Alymer Denesik’s ½ interest in N 1/2-10 for $24,750 being ½ of the difference in value between the two parcels as determined by the August 2014 appraisals; 3) An Order that the $24,750 be payable within 1 year of such transfer, with interest thereafter at 3%. [ 29 ] Each side will bear its own costs. Heard on the 26 th day of October, 2015. Dated at the City of Edmonton, Alberta this 18 th day of January, 2016. W. S. Schlosser M.C.C.Q.B.A. Appearances: J.

Royal Nickerson, Q.C. Nickerson Roberts Holinski & Mercer for the Applicant, Denesik for the Cross-Respondent, Denesik William Dushenski Blakely & Dushenski for the Respondent, Verhulst for the Cross-Applicant, Verhulst [1] The period for the recovery of the land under its predecessor, Limitations of Actions Act , is governed by

section 18 of that Act, which is as follows:

18 No person shall take proceedings to recover land except (

a) within 10 years next after the right to do so first accrued to that person (hereinafter called the “claimant”), or (

b) if the right to recover first accrued to a predecessor in title, then within 10 years next after the right accrued to that predecessor.