2017 ONCA 116, 2017 ONCA 116

Source: Court of Appeal for Ontario

Date: 1966-10-08

Jurisdiction: Ontario

Citation: 2017 ONCA 116

Opinion

Mihaylov et al. v. 1165996 Ontario Inc. et al. [Indexed as: Mihaylov v. 1165996 Ontario Inc.] Ontario Reports Court of Appeal for Ontario, Gillese, Benotto and L.B. Roberts JJ.A. February 13, 2017 134 O.R. (3d) 401 | 2017 ONCA 116 Case

Summary Real property — Easements — 1968 agreement which gave owners of dominant tenement right to leave water pipeline over servient tenement in place not suggesting that that right was intended to attach to land — 1968 agreement not identifying or referring to dominant tenement — Agreement granting licence rather than easement — 1979 agreement referring to parties by their ownership of dominant and servient tenements, containing legal descriptions of both parcels of land, describing pipeline as easement to serve dominant tenement and containing broadly worded enurement clause that made agreement binding on parties' successors — 1979 agreement granting valid easement but easement only permitting water pipeline to be left in place and not permitting owner of dominant tenement to make repairs to it without permission of owner of servient tenement.

The applicants and the respondents owned adjoining properties. The applicants acquired their property in 2012. In the 1960s, a water pipeline was buried beneath that land so that lake water could pass to the property owned by the respondents' predecessors in title. In 1966, J, who then owned the applicants' land, entered into an agreement with the then owners of the respondents' property which stated that the latter had "the right during their ownership" to lay a pipe over J's land. That agreement was not registered on title to either parcel of land.

In 1968, an agreement between J and the new owners of the respondents' land provided that the new owners "shall be able to leave the line in its present position". The 1968 agreement was deposited in the registry office, where it was referable only to J's land. In 1979, another agreement relating to the pipeline was entered into. That agreement was headed "Water Pipe Easement" and provided that the then owners of the respondents' property "shall be able to leave the said water line in its present position". The 1979 agreement set out the legal description of both parcels of land.

It was registered as Instrument No. R147470. In 2014, the water supply to the respondents' land was disrupted due to a leak in the pipeline, and the personal respondent went onto the applicants' land without their permission and installed an above-ground waterline. The applicants brought an application for a declaration that the respondents had no interest in their property and that the easement registered in 1979 no longer encumbered it. The respondents brought a counter- application for a declaration that the easement registered as Instrument No. R147470 was valid and for related relief.

The application judge found that both the 1968 agreement and the 1979 agreement granted an easement and that the respondents had the right to enter onto the applicants' land to repair the pipeline. The applicants appealed. Held , the appeal should be allowed in part. The 1966 agreement gave the then owners of the respondents' property a mere licence to enter onto J's land and lay the pipeline, as the right was given to the then owners personally and was limited to their lifetime.

There was nothing in the 1968 agreement to suggest that the right to leave the pipeline in place was intended to attach to land owned by the then owners of the respondents' property. The failure to identify, or even refer to, a dominant tenement was fatal to the [page402] notion that the 1968 agreement was the grant of an easement. Unlike the earlier agreements, the 1979 agreement was capable of amounting to the grant of an easement.

It referred to the parties by their ownership of the dominant and servient tenements respectively; contained the legal descriptions of both parcels of land; described the pipeline as an easement to serve the dominant tenement; and contained a broadly worded enurement clause that made the agreement binding not only on the parties but also their "successors".

Four characteristics are essential to the grant of an easement: there must be a dominant and a servient tenement; the easement must accommodate the dominant tenement; the owners of the dominant and servient tenements must be different persons; and a right over land cannot amount to an easement unless it is capable of forming the subject matter of a grant. All four of those characteristics were present in the 1979 agreement. However, while the 1979 agreement granted an easement, it did not grant a right to enter onto the applicants' land without their permission to repair the pipeline.

The application judge did not err in finding that although the grant of an easement in the 1979 agreement breached s. 29(2) of the

Planning Act, R.S.O. 1979, c. 349, s. 50(22) of the Planning Act, R.S.O. 1990, c. P.13 applied to validate the otherwise defectiveeasement. Ellenborough Park (Re), [1956] Ch. 131, [1955] 3 All E.R. 667, [1955] 3 W.L.R. 892, 166 E.G. 628 (Eng. C.A.); Fallowfield v.Bourgault (2003), (ON CA), 68 O.R. (3d) 417, [2003] O.J. No. 5206, 235 D.L.R. (4th) 263, 180 O.A.C. 101, 14R.P.R. (4th) 208, 127 A.C.W.S. (3d) 778 (C.A.), consd Other cases referred to Barbour v. Bailey, [2016] O.J.

No. 3261, 2016 ONCA 98, 345 O.A.C. 311, 66 R.P.R. (5th) 173, 267 A.C.W.S. (3d) 463; Depew v.Wilkes (2002), (ON CA), 60 O.R. (3d) 499, [2002] O.J. No. 2987, 216 D.L.R. (4th) 487, 162 O.A.C. 23, 2 R.P.R.(4th) 45, 116 A.C.W.S. (3d) 289 (C.A.); Golisky v. Romanuik, (ON CA), [1951] O.J. No. 564, [1951] 2 D.L.R. 475,[1951] O.W.N. 401 (C.A.); Jacuniak v. Tamburro (2002), (ON SC), 59 O.R. (3d) 236, [2002] O.J. No. 1420, [2002]O.T.C. 240, 4 R.P.R. (4th) 1, 113 A.C.W.S. (3d) 538 (S.C.J.); Reeve-Burns v. Pelkman (1989), (ON SC), 70 O.R. (2d)113, [1989] O.J. No. 1531, 17 A.C.W.S. (3d) 596 (Dist. Ct.); Rodaro v.

Royal Bank of Canada (2002), (ON CA), 59O.R. (3d) 74, [2002] O.J. No. 1365, 157 O.A.C. 203, 22 B.L.R. (3d) 274, 49 R.P.R. (3d) 227, 113 A.C.W.S. (3d) 68 (C.A.); SattvaCapital Corp. v. Creston Moly Corp., [2014] 2 S.C.R. 633, [2014] S.C.J. No. 53, 2014 SCC 53, 2014EXP-2369, J.E. 2014-1345, 373D.L.R. (4th) 393, [2014] 9 W.W.R. 427, 59 B.C.L.R. (5th) 1, 461 N.R. 335, 25 B.L.R. (5th) 1, 358 B.C.A.C. 1, 614 W.A.C. 1, 242A.C.W.S. (3d) 266; Toscano and Dorion (Re), (ON CA), [1965] 2 O.R. 514, [1965] O.J. No. 1004, 51 D.L.R. (2d) 298(C.A.); Wiener v. Elgin (County), (ON SC), [1947] O.J.

No. 55, [1947] 2 D.L.R. 346, [1947] O.W.N. 360 (H.C.J.) Statutes referred to Planning Act, R.S.O. 1970, c. 349 [rep.], s. 29(2) Planning Act, R.S.O. 1990, c. P.13, s. 50(22) Authorities referred to Gaunt, Jonathan, Q.C., and Paul Morgan, Q.C., Gale on Easements, 19th ed. (London: Sweet & Maxwell, 2012) La Forest, Anne Warner, Anger & Honsberger Law of Real Property, loose-leaf, 3rd ed. (Toronto: Thomson Reuters, 2016) [page403] APPEAL from the judgment of Stinson J., [2016] O.J. No. 1020, 2016 ONSC 1379, 69 R.P.R. (5th) 161 (S.C.J.). Stephen R. Jackson, for appellants. Ryan O'Neill, for respondents.

The judgment of the court was delivered by GILLESE J.A.: — Overview [1] This appeal arises from a conflict between two neighbours about an underground water pipeline. It poses a number of questions,including the following: is the underground pipeline an easement despite the fact that the document which purports to grant it neitherdeclares the location of the pipeline nor contains a description of it?

If an easement was granted, this court must also decide difficultquestions relating to its scope. [2] The court below found that an easement had been granted, first in an agreement made in 1968 and then again by an agreement madein 1979. As I explain in the reasons that follow, the 1968 agreement was the grant of a licence, not an easement. And, while I agree thatan easement was granted in 1979, in my view, the relief ordered below exceeds the scope of that easement. Accordingly, I would allowthe appeal in part.

Background [3] In June of 2012, Emil Mihaylov and Sofia Mihaylova (together, the "Mihaylovs" or the "applicants") bought waterfront property (the

"Mihaylov land") that fronts onto Sturgeon Lake (the "lake") in Ontario. 1 The Mihaylovs use the land for their own recreational purposes and they also rent out cottages that are located on it. [ 4 ] Sometime during the mid to late 1960s, a galvanized steel waterline (the "Pipeline") was buried beneath the Mihaylov Land so that water from the lake could pass to an adjoining property. [ 5 ] When the Mihaylovs acquired their property, it was subject to Instrument No. R147470. That instrument is discussed below. It is sufficient at this point to note that Instrument No.

R147470 [page404] refers to a document entitled "Water Pipe Easement" and provides that the owner of the adjoining property "shall be able to leave the said water line in its present position, and to draw water from Sturgeon Lake". [ 6 ] 1165996 Ontario Inc. ("116") owns the adjoining property in question (the "Abel land"). The Abel land is situated to the west of the Mihaylov land and has no direct access to the lake. [ 7 ] 116 took title to the Abel land on July 31, 1998.

At the time of purchase, the legal description of the Abel land included "an easement for a water line over" the Mihaylov land. [ 8 ] Donald Abel is the president and sole shareholder of 116. I will refer to 116 and Mr. Abel together as the respondents. [ 9 ] Both the Mihaylov land and the Abel land were originally registered under the land registry system. In 2010, the Abel land was transferred to the land titles system. When the Mihaylovs purchased their land in 2012, it had already been transferred to the land titles system. [ 10 ] Mr. Abel lives on the Abel land with his family.

He and his wife run a small business known as the Lakeview Cottages & General Store. Among other things, the Abels run a small general store and rent out seven small cabins and cottages located on the Abel land. [ 11 ] The ownership of both the Mihaylov land and the Abel land has changed a number of times over the years. The various predecessors in title entered into three agreements relevant to these proceedings. The dates of those agreements are October 8, 1966; May 15, 1968; and May 11, 1979. The 1966 agreement [ 12 ] In 1966, Muriel S. Johnson owned the Mihaylov land. Apparently, Ms.

Johnson entered into an agreement dated October 8, 1966 (the "1966 agreement") with Frederick G. Hill and Mary Hill, under the terms of which Ms. Johnson agreed that the Hills "had the right during their ownership to lay a pipe line over [her] lands". It appears that the Pipeline was installed pursuant to this agreement. [ 13 ] The 1966 agreement was never registered on title to either the Mihaylov land or the Abel land. Because the 1966 agreement could not be located, it was not before the court below and is not part of the record. On the record, what is known about the 1966 agreement comes from the

preamble in the 1968 agreement, below. The 1968 agreement [ 14 ] In May of 1968, Ms. Johnson still owned the Mihaylov land. [page405] [ 15 ] On May 15, 1968, Ms. Johnson entered into an agreement with Paul Plewes, Harvey Duxbury and Ruth Duxbury (the "1968 agreement"). [ 16 ] The 1968 agreement consists of a

preamble, three operative provisions and a legal description of the land belonging to Ms. Johnson. It reads as follows: THIS INDENTURE made the 15th day of May, 1968 BETWEEN: MURIEL S.

JOHNSON of the Township of Fenelon in the County of Victoria, Married Woman, hereinafter called THE PARTY OF THE FIRST PART; AND: PAUL PLEWES, of the Town of Weston in the County of York, Esquire, and HARVEY DUXBURY, of the Municipality of Metropolitan Toronto in the County of York, Esquire, and RUTH DUXBURYhis wife of the same place, as tenants-in-common, hereinafter called THE PARTIES OF THE SECOND PART; WHEREAS by agreement dated the 8th day of October, 1966, the prior owner of the property, Frederick G.

Hill and Mary Hill, had the right during their ownership to lay a pipe line over the lands of the Party of the First Part; NOW THIS AGREEMENT WITNESSETH that in consideration of the sum of One Dollar, the Party of the First Part hereby covenants and agrees that the Parties of the Second Part shall be able to leave the line in its present position and to draw water from Sturgeon Lake. The Parties of the Second

Part covenant and agree that if they should have to enter on the lands of the Party of the First Part to make any repairs which the Party of the First Part agrees that they may do, that they will repair any damage done to the lands of the Party of the First Part as a result of such repairing. The Parties of the Second

Part covenant and agree that they will pay for this easement the sum of Ten Dollars per year. The first

payment to be made on the 1st day of July, 1968 and on the 1st day of July in each and every year during the currency of this agreement. The Party of the First

Part is the owner of the lands described as follows: [the legal description of the Mihaylov land followed]. [page406] [ 17 ] The 1968 agreement was deposited in the registry office where it was referable only to Ms. Johnson's land. The 1979 agreement [ 18 ] On May 11, 1979, another agreement relating to the Pipeline was entered into (the "1979 agreement").

The 1979 agreement reads as follows: WATER PIPE EASEMENT THIS INDENTURE made this 11th day of May, A.D. 1979 BETWEEN: ROBERT JAMES ARCHIBALD MARSHALL, of the Township of Fenelon, in the County of Victoria, Gentleman, and PATRICIA ENA MARSHALL, his spouse, of the same place, as joint tenants and not as tenants in common, hereinafter called the PARTIES OF THE FIRST PART; -and- DOUGLAS ALLAN and EILEEN ALLAN, as to an undivided one-fifth interest, DONALD DENYER and JOYCE DENYER as to an undivided one-fifth interest, GORDON DENYER and DIANE PIPER as to an undivided one-fifth interest, LINDSAY MCCOY and MARGARET MCCOY as to an undivided one-fifth interest, and BRIAN SMALL and VALERIE SMALL as to the remaining one-fifth interest, hereinafter called THE PARTIES OF THE SECOND PART WHEREAS by agreement dated May 15, 1968, and deposited on June 7, 1968, as number 93844, PAUL PLEWES, HARVEY DUXBURY and RUTH DUXBURY were granted a water pipe easement over the lands described in

Schedule "A" attached hereto to serve the lands described in

Schedule "B" attached hereto, AND WHEREAS the Parties of the First Part are the owners of the lands described in

Schedule "A" attached hereto; AND WHEREAS the Parties of the Second Part are the owners of the lands described in

Schedule "B" attached hereto; NOW THIS AGREEMENT WITNESSETH that in consideration of the sum of ONE DOLLAR ($1.00), the parties of the first part hereby covenant and agree with the parties of the second shall be able to leave the said water line in its present position, and to draw water from Sturgeon Lake. THE PARTIES of the Second

Part covenant and agree that if they should have to enter on the lands of the Parties of the First Part to make any repairs which the Parties of the First Part agrees that they may do, that they will repair any damage done to the lands of the Parties of the First Part as a result of such repairing. THE PARTIES of the Second

Part covenant and agree that they will continue to pay for this easement the sum of TEN DOLLARS ($10.00) per year. [page407] THIS AGREEMENT shall enure to the benefit of and be binding upon the Parties hereto, their heirs, executors, administrators, successors and assigns. [ 19 ]

Schedule "A" to the 1979 agreement sets out the legal description of the Mihaylov land and

Schedule "B" sets out the legal description of the Abel land. The precipitating events [ 20 ] In June 2014, the water supply to the Abel land from the lake was disrupted, due to a leak in the Pipeline. Without the Mihaylovs' permission or notice, Mr. Abel went onto the Mihaylov land and installed an above ground polyvinyl chloride waterline (the "PVC line"). The PVC line ran across the Mihaylov land. [ 21 ] Mr. Abel said that he installed the PVC line because he was "not able to locate, fix or replace the existing water line" due to the location of the Mihaylovs' mobile trailer on the Mihaylov land. Mr.

Abel also said that he was not able to contact the Mihaylovs before he installed the PVC line because the Mihaylovs reside in Toronto and normally occupy the Mihaylov land only on weekends, and he did not have the Mihaylovs' phone number or e-mail address. [ 22 ] When Mr. Mihaylov discovered the PVC line in early July 2014, he asked Mr. Abel to remove it. The record indicates that, to date, the PVC line has not been removed. [ 23 ] Mr. Mihaylov says that Mr. Abel continues to enter onto the Mihaylov land, without the Mihaylovs' permission or notice, to service and maintain the PVC line.

[ 24 ] In early May 2015, again without the Mihaylovs' permission, Mr. Abel excavated part of the Mihaylov land in an apparent attempt to upgrade or repair the underground Pipeline. [ 25 ] Apparently in order to protect the Pipeline's foot valve, Mr. Abel also installed a PVC structure in the shallow waters of the lake in front of the Mihaylov land. The applicants allege that this structure interferes with free navigation near the shoreline and their riparian rights of egress and ingress along their shoreline. Mr.

Abel disputes the location of the foot valve and says that it does not interfere with free navigation near the shoreline nor with the applicants' riparian rights. [ 26 ] The applicants contend that the Pipeline is no longer a necessity for the respondents because there is an active well on the Abel land. The respondents say that the shallow well on the Abel land is not capable of supplying sufficient water to the cabins and cottages and the ability to draw water is integral to the running of their business.

They also say that they have [page408] spent over $10,000 on a filtration system to purify the water drawn from the lake. The proceedings below [ 27 ] In June of 2015, the applicants brought an application in which they asked the court to declare, among other things, that the respondents had no interest in their property and that the easement registered in 1979 no longer encumbers it (the "application"). 116 and Mr.

Abel are the named respondents to the application. [ 28 ] The respondents brought a counter-application seeking, among other things, a declaration that the easement registered against the title to the parties' respective properties as Instrument No.

R147470 is valid and that they have an interest in the lands upon which the Pipeline is situate; an order requiring the Mihaylovs to "remove any and all obstructions from the Water Pipe Easement"; and an order permitting the respondents to enter onto the Mihaylov land for the purpose of burying a new waterline "within the boundaries of the existing Water Pipe Easement" (the "counter-application").

The Decision Below [ 29 ] The judge hearing the application and counter-application identified two issues for resolution: (1) did the 1968 agreement and the 1979 agreement create an easement; and (2) if so, does the easement remain valid? [ 30 ] The application judge rejected the applicants' contention that the 1968 agreement and the 1979 agreement were licences.

In his view, both of those documents possess all four characteristics of an easement: the Abel land is the dominant tenement and the Mihaylov land is the servient tenement; the easement accommodates the Abel land by providing it with water from the lake; the owners of the two parcels of land are different persons; and "permitting the installation and use of a water pipe across or under the servient tenement is a right that can form the subject-matter of a grant". [ 31 ] The application judge then considered the applicants' alternative submission that a violation of the Planning Act , R.S.O. 1970, c. 349 (the "1970 Act") invalidated the 1979 agreement.

He noted that the parties agreed that (1) the subdivision control provisions of the 1970 Act applied to both properties by 1979; and (2) in relation to R147470, there was no registered plan of subdivision that provided for an easement and no consent from the local land division committee. He also noted that s. 29(2) of the 1970 Act prohibited any conveyance that did not [page409] meet these (or other inapplicable) requirements, where the grantor retained an interest in abutting land. [ 32 ] The applicants submitted that since the grantors under Instrument No.

R147470 ( i.e. , the then owners of the Mihaylov land) retained title to the land through which the easement passed, they retained an interest in land that abutted the easement. Thus, the conveyance of the easement was caught by s. 29(2) and, as the 1979 agreement/Instrument No.

R147470 were in breach of its requirements, those documents were ineffective to create an easement, or any other interest in land, in favour of the grantees. [ 33 ] Before the application judge, the respondents conceded that the 1979 agreement by itself would require approval under the 1970 Act and that a breach of s. 29(2) of the 1970 Act meant that the purported conveyance of the easement was void. [ 34 ] However, the application judge found that s. 50(22) of the Planning Act , R.S.O. 1990, c.

P.13 (the "1990 Act") "is applicable to validate the otherwise defective creation of the easement over the Mihaylovs' lands" (at para. 51). He reasoned as follows. [ 35 ] Section 50(22) (the "curative provision") can remedy historical breaches of the subdivision control sections of the Planning Act where subsequent deeds or transfers contain certain prescribed statements by the grantor, the grantor's solicitor and the grantee's solicitor.

After the enactment of what is now s. 50(22) , the various pre-printed forms of transfers, deeds, etc. that are used to convey real property in Ontario have included passages that contain the statements contemplated in the statute, so that they may be signed or completed by the parties. It is intended that when the statements are completed, they will trigger the application of s. 50(22) . [ 36 ] Section 50(22) of the 1990 Act reads as follows: 50(22) Where a deed or transfer, (

a) contains a statement by the grantor, verifying that to the best of the grantor's knowledge and belief the deed or transfer does not contravene this section; (

b) contains a statement by the grantor's solicitor, verifying that, (

i) he or she has explained the effect of this

section to the grantor, (ii) he or she has made inquiries of the grantor to determine that the deed or transfer does not contravene this section, (iii) based on the information supplied by the grantor, to the best of the solicitor's knowledge and belief, the deed or transfer does not

contravene this section, and (iv) he or she is an Ontario solicitor in good standing; and [page410] (

c) contains a statement by the grantee's solicitor, verifying that, (

i) he or she has investigated the title to the land and, where relevant, to abutting land, (ii) he or she is satisfied that the record of title to the land and, where relevant, to abutting land, reveals no existing contravention of thissection or a predecessor thereof or of a by-law passed under a predecessor of this

section or of an order made under clause 27(1)(b), as itexisted on the 25th day of June, 1970, of The Planning Act, being

chapter 296 of the Revised Statutes of Ontario, 1960, or a predecessorthereof, that has the effect of preventing the conveyance of any interest in the land, (iii) to the best of his or her knowledge and belief, the deed or transfer does not contravene this section, and (iv) he or she acts independently of the grantor's solicitor and is an Ontario solicitor in good standing; and (

d) is registered under the Land Titles Act or the Registry Act, any contravention of this

section or a predecessor thereof or of a by-law passed under a predecessor of this

section or of an order madeunder clause 27(1)(b), as it existed on the 25th day of June, 1970, of The Planning Act, being

chapter 296 of the Revised Statutes ofOntario, 1960, or a predecessor thereof, does not and shall be deemed never to have had the effect of preventing the conveyance of anyinterest in the land, but this subsection does not affect the rights acquired by any person from a judgment or order of any court given ormade on or before the day the deed or transfer is registered. (Emphasis added) [37] The application judge then considered the predecessor provision to s. 50(22) discussed by Killeen D.C.J. in Reeve-Burns v. Pelkman(1989), (ON SC), 70 O.R. (2d) 113, [1989] O.J. No. 1531 (Dist.

Ct.), at pp. 117 O.R. and following. The quotationsthat the application judge set out from that decision stress, among other things, the remedial nature of (now) s. 50(22). [38] Thereafter, the application judge found that the transfer/deed by which 116 came to be the owner of the Abel land contained theappropriate blank statements to be signed. However, while the statements by the transferor and the transferor's solicitor were completed,the statement of the solicitor for the transferee was not.

As a result, the application judge found that 116 could not take the benefit of s.50(22) by reason of its own deed. [39] The application judge then reviewed the transfer of the Mihaylov land to a previous owner in 2004. He found that the prescribedstatements had been completed.

Similarly, when the Mihaylovs bought their property in 2012, the transfer contained the completedstatutory statements. [page411] [40] In the circumstances, the applicants submitted that s. 50(22) could only cure any potential defect in the title to their land -- it couldnot cure a defect in the title to the Abel land. [41] The application judge disagreed. He set out the analysis of Quinn J. in Jacuniak v. Tamburro (2002), (ON SC),59 O.R. (3d) 236, [2002] O.J. No. 1420, 4 R.P.R. (4th) 1 (S.C.J.), at paras. 63 and 66.

He applied the logic in those paragraphs and foundthat when the 2004 conveyance of the Mihaylov land took place and the relevant boxes in the form of transfer were completed, "it gavelife to an easement that had been aestillborn' in 1979".

Thus, the application judge concluded, the easement conveyed by the 1979agreement became legally valid by reason of the conveyance of the Mihaylov land in 2004 (at para. 48). [42] The application judge went on to explain that there was no unfairness to the applicants arising from the application of s. 50(22)because they were on notice of the existence of the Pipeline easement when they completed the purchase of their land. The Judgment Under Appeal [43] Accordingly, by judgment dated February 25, 2016 (the "judgment"), the application judge dismissed the application and grantedthe counter-application.

The judgment (1) declares that the easement registered against the title to the parties' respective properties as Instrument No. 147470 is valid2 and therespondents have an easement over the Mihaylov land "in the location of the galvanized water pipe that was the subject of the 1979[agreement]" (at para. 2); (2) orders the applicants to "remove any and all obstructions from the Water Pipe Easement" (at para. 3); and (3) orders that the respondents are permitted to enter upon the Mihaylov land "for the purpose of repairing the existing water line orburying a new water line within the boundaries of the Water Pipe Easement provided they shall repair any damage done to the[Mihaylov land] as a result" (at para. 4).

The Issues [44] The applicants submit that the application judge erred in finding that [page412] (1) the 1968 agreement and the 1979 agreement are grants of an easement; and

(2) although the grant of easement in the 1979 agreement breached s. 29(2) of the 1970 Act, s. 50(22) of the 1990 Act applied tovalidate the otherwise defective easement. In the event that this court should find that an easement was granted and the historical breach of the 1970 Act was cured by s. 50(22) ofthe 1990 Act, the applicants ask the court to answer the following questions:

(3) Did the application judge err in failing to find that (

a) the easement only permits the previously installed Pipeline to be left in itspresent position; and (

b) the respondents can make repairs to the Pipeline only with the applicants' agreement?

(4) Does the respondents' failure to have paid the sum of $10 per year for the easement, as required by the 1979 agreement, render thatagreement null and void? Analysis Issue #1 : Did the application judge err in finding that the 1968 agreement and the 1979 agreement are grants of an easement? [45] In my view, the 1968 agreement is a licence and, therefore, the application judge did err in finding that it was the grant of aneasement.

However, I agree with the application judge that the 1979 agreement was the grant of an easement. [46] To explain how I reach these conclusions, I will begin by distinguishing a licence from an easement. With those distinctions inmind, I will then examine each of the 1966, 1968 and 1979 agreements to see whether the right given by each agreement was a licence oran easement.

Licences and easements distinguished [47] The following are well-established propositions of law which can be found in real property texts such as Anne Warner La Forest,Anger & Honsberger Law of Real Property, loose-leaf, 3rd ed. (Toronto: Thomson Reuters, 2016), vol. 2, at paras. 16:40.10 to 16:40.20,17:20.10 to 17:20.20; and Gale on Easements, 19th ed. (London: Sweet & Maxwell, 2012), at pp. 4-42, 79-82. [48] The right to do something on land belonging to another can be a licence or an easement. A right to walk over a path on [page413]another's land is a good example of this.

If I give you the right to walk along a path on my land so that you can reach the lake in front ofit, that right may be a licence or an easement. In its simplest terms, it depends upon whether I gave you alone the right to walk along thepath or whether I agreed that the right to walk along the path was to bind my land and benefit yours. The former is a personal rightknown as a licence.

The latter is a proprietary right, known as an easement. [49] Because a licence is a personal right, a licence would give only you the right to walk along the path on my property to reach the lake-- that right would not extend to anyone else. Further, that right is neither connected to the use of any lands which you might own nordoes it amount to an estate or interest in my land. The licence simply makes lawful that which would otherwise be trespass. Without thelicence, the act of your entering on my land and walking along it to reach the lake would amount to trespass.

Importantly, unless weagree otherwise, I may revoke, at will, the permission I gave you (i.e., the licence). [50] But if the right that I granted was an easement -- and not a mere licence -- the situation is quite different. Because an easement is aproprietary right -- not a personal one -- the right to walk along the path on my land is not limited to you alone; it would attach to yourland so that all those who lawfully occupy your land (present and future) would have the right to walk along the path on my land to thelake.

It would also bind my land so that the owners of my land (present and future) would have to permit the lawful occupants of yourland to walk along the path. Moreover, because an easement is a proprietary interest in or right over my land, while I retain absolutedominion over my property, my use of the land is subject to the limitations imposed by the easement. [51] Toscano and Dorion (Re), (ON CA), [1965] 2 O.R. 514, [1965] O.J. No. 1004, 51 D.L.R. (2d) 298 (C.A.) andWiener v. Elgin (County), (ON SC), [1947] O.J.

No. 55, [1947] 2 D.L.R. 346 (H.C.J.) are two examples of situations inwhich the court used these principles to determine whether the right in question was a licence or an easement. [52] Four characteristics are essential to the grant of an easement: (1) there must be a dominant and a servient tenement; (2) the easement must accommodate the dominant tenement; (3) the owners of the dominant and servient tenements must be different persons; and [page414] (4) a right over land cannot amount to an easement unless it is capable of forming the subject matter of a grant. See Barbour v. Bailey, [2016] O.J.

No. 3261, 2016 ONCA 98, 66 R.P.R. (5th) 173, at para. 56; and Depew v. Wilkes (2002), (ON CA), 60 O.R. (3d) 499, [2002] O.J. No. 2987 (C.A.), at para. 18. [53] If there is an easement in this case, the Abel land is the dominant tenement and the Mihaylov land is the servient tenement. ThePipeline accommodates the dominant tenement in that it serves the Abel land and is reasonably necessary for the better enjoyment of thatland. And, clearly, the two parcels of land are separately owned and have been throughout.

I will consider the fourth characteristic ofeasements, below, when discussing the 1979 agreement. [54] With these broad principles in mind, let us now consider the three agreements in play in this matter.

The 1966 agreement [ 55 ] In 1966, Muriel S. Johnson owned the Mihaylov land. As the 1966 agreement could not be located and is not in the record, our knowledge of its terms comes from the

preamble to the 1968 agreement. That

preamble reads as follows: WHEREAS by agreement dated the 8th day of October, 1966, the prior owner of the property, Frederick G. Hill and Mary Hill, had the right during their ownership to lay a pipe line over the lands of the Party of the First Part[.] [ 56 ] Based on a plain reading of the

preamble, it is clear that the 1966 agreement was the grant of a licence and not an easement. [ 57 ] The only right given by the 1966 agreement was "to lay the Pipeline" over Ms. Johnson's land. That right was limited: Frederick G. Hill and Mary Hill had the right "during their ownership". There is nothing in the

preamble to indicate to what the word "ownership" was referring. [ 58 ] As the right to lay the Pipeline on the Mihaylov land could only be exercised by the Hills during the period of their "ownership", it is clear that the right was given to them personally. The right could not have attached to any land which the Hills might have owned because it expired when their ownership ended. [ 59 ] That the right was given to the Hills personally is reinforced by the fact that there is no mention in the 1966 agreement of what lands, if any, the Hills owned.

Even if the Hills did own the Abel land when they entered into the 1966 agreement, the fact that the 1966 agreement does not mention those lands [page415] shows that there was no intention that the right to lay the Pipeline was to attach to the Abel land. [ 60 ] Therefore, the 1966 agreement gave the Hills a mere licence to enter onto Ms. Johnson's land and lay the Pipeline. The 1968 agreement [ 61 ] The 1968 agreement consists of five paragraphs: the one-paragraph

preamble which refers to the 1966 agreement, set out and discussed immediately above; followed by three operative provisions; and a final paragraph which describes the party of the first part ( i.e ., Ms. Johnson) as the owner of the lands bearing the legal description of the Mihaylov land. [ 62 ] The one-paragraph

preamble, as we have seen, shows that the Pipeline was laid pursuant to a licence granted by Ms. Johnson to the Hills. [ 63 ] Let us now consider each of the three operative provisions. [ 64 ] In the first provision, the party of the first part (Ms.

Johnson) "covenants and agrees" that, in consideration of the sum of $1, the parties of the second part (Paul Plewes, Harvey Duxbury and Ruth Duxbury) "shall be able to leave the line in its present position and to draw water from Sturgeon Lake". [ 65 ] On a plain reading of the first provision, the right to leave the Pipeline in place and draw water from Sturgeon Lake was given by Ms. Johnson to Mr. Plewes, Mr. Duxbury and Ms. Duxbury personally.

This can be seen because the parties of the second part are described only by their names and places of residence and not by reference to ownership of any piece of land. Indeed, there is nothing in the 1968 agreement to indicate that any of Paul Plewes, Harvey Duxbury or Ruth Duxbury owned any land. [ 66 ] In the second provision, the parties of the second

part covenant and agree that "if they should have to enter" on the lands of the party of the first part "to make any repairs which the Party of the First Part agrees that they may do", they will repair any damage done to those lands as a result of the repairing. [ 67 ] The second provision is a personal promise by Paul Plewes, Harvey Duxbury and Ruth Duxbury that they would make only those repairs to the Pipeline that Ms. Johnson agreed they could make and that they would repair any damage to Ms.

Johnson's land that resulted from the repairs. [ 68 ] In the third provision, the parties of the second part agree to pay "for this easement" the sum of $10 per year. [page416] [ 69 ] Again, the promise to pay in the third provision is a personal one given by the three named individuals who are the parties of the second part. [ 70 ] As I previously explained, an easement is a proprietary right that gives the owner of the dominant tenement an interest in or right over the servient tenement.

There is nothing in the 1968 agreement to suggest that the right to leave the Pipeline in position was intended to attach to land owned by the parties of the second part. Indeed, such a construction is not possible given that the 1968 agreement makes no reference whatsoever to lands owned by the parties of the second part. The only reference to land is in the fifth paragraph of the 1968 agreement and that reference is to Ms. Johnson's land alone. [ 71 ] As we have seen, an easement requires both a dominant and a servient tenement and the easement must accommodate the dominant tenement.

While there is a legal description of the Mihaylov land in the 1968 agreement and the word "easement" is used in the third provision, those two things cannot change the fundamentally personal nature of the 1968 agreement. The failure to identify (or even refer to) a dominant tenement is fatal to the notion that the 1968 agreement is the grant of an easement. The 1979 agreement [ 72 ] The 1979 agreement contains three operative provisions that are virtually identical to the three operative provisions in the 1968 agreement.

That said, the 1979 agreement is materially different from the 1968 agreement in five ways. [ 73 ] First, the title to the 1979 agreement is "WATER PIPE EASEMENT". That title does not appear on the 1968 agreement, which is

styled as an "indenture". [ 74 ] Second, the parties to the 1979 agreement are no longer identified only as individuals. In addition, they are identified in relation to their ownership of land. The parties of the first part are identified as the owners of the lands described in

Schedule "A" to the 1979 agreement, which is the Mihaylov land. And the parties of the second part are identified as the owners of the lands described in

Schedule "B" to the 1979 agreement, which is the Abel land. [ 75 ] Third, the

preamble refers to the 1968 agreement and describes the Pipeline as an easement over the Mihaylov land "to serve" the Abel land. [ 76 ] Fourth, both the Mihaylov land and the Abel land are clearly identified by means of their legal descriptions in Schedules "A" and "B" respectively. [page417] [ 77 ] Fifth, the 1979 agreement concludes with a broadly worded enurement clause which states that it "shall enure to the benefit of and is binding upon the Parties hereto, their heirs, executors, administrators, successors and assigns". [ 78 ] It is also worthy of note that, for the first time, the 1979 agreement was registered on title to both parcels of land as Instrument No.

R147470. [ 79 ] In short, unlike the earlier agreements, the 1979 agreement is capable of amounting to the grant of an easement.

It refers to the parties by their ownership of the dominant and servient tenements respectively; contains the legal descriptions of both parcels of land; describes the Pipeline as an easement to serve the Abel land; and contains a broadly worded enurement clause that makes the 1979 agreement binding not only on the parties but also, among other things, their "successors" -- i.e ., their successors in title. [ 80 ] To determine whether the 1979 agreement was the grant of an easement, we must consider the characteristics of an easement. [ 81 ] As I have already mentioned, the first three characteristics of an easement are present in the 1979 agreement.

The Abel land is the dominant tenement and the Mihaylov land is the servient tenement. The Pipeline accommodates the dominant tenement in that it serves the Abel land and is reasonably necessary for the better enjoyment of that land. And the dominant and servient tenements are owned by different persons. [ 82 ] But what of the fourth characteristic of an easement? Is that characteristic satisfied by the 1979 agreement? [ 83 ] The application judge found that it was.

At para. 26 of his reasons, the application judge said that "permitting the installation and use of a water pipe across or under the servient tenement is a right that can form the subject matter of a grant". [ 84 ] I agree that permitting the installation and use of a pipeline is a right that can form the subject matter of a grant. However, the grant of the easement in the 1979 agreement says nothing about the installation and use of a water pipe across or under the servient tenement.

The 1979 agreement provides that the owners of the Abel land "shall be able to leave the [Pipeline] in its present position". [ 85 ] Further, the fact that a pipeline is capable of forming the subject matter of a grant is not the full extent of the inquiry required by the fourth characteristic. In my view, the fourth characteristic also requires the court to consider the express terms of the grant to determine, among other things, whether the rights purported to be given by the grant are too wide or [page418] vague.

I reach this view based primarily on Ellenborough Park (Re) , [1956] Ch. 131 , [1955] 3 All E.R. 667 (Eng. C.A.) , in which the English Court of Appeal grappled directly with the meaning of the fourth characteristic. [ 86 ] In Ellenborough Park , the question for the court was whether the owners of certain houses surrounding Ellenborough Park had an easement over the park. The park was owned by persons other than the homeowners.

The court concluded that the right to use the park was an easement. [ 87 ] After referring to the four characteristics of an easement set out above, the court remarked that the "exact significance" of the fourth characteristic was "at first sight perhaps, not entirely clear" (at p. 164 Ch.).

It said that, among other things, the court had to consider the actual terms of the grant to determine whether "the rights purported to be given are expressed in terms of too wide and vague a character" and whether such rights "would amount to rights of joint occupation" or would substantially deprive the servient tenement owner of proprietorship or legal possession. [ 88 ] In effect, the applicants submit that the grant in the 1979 agreement is too wide and vague because it neither contains the actual location of the Pipeline nor gives a description of the easement.

They contend that the grant must include a "local", "registrable" or "metes and bounds" description of the easement. They say that the absence of a specified location and description of the Pipeline has led to the current situation in which the respondents contend (at least at some points during the proceedings) that the 1979 agreement gives them the right to enter onto the Mihaylov land and dig wherever is necessary to repair the Pipeline. [ 89 ] I agree, in general terms, that the absence of a description of the easement and its location is concerning.

However, as Ellenborough Park indicates, the court must consider the actual terms of the grant to determine whether it is "too wide" or "vague". Having done that, I conclude that the grant is neither too wide nor too vague. [ 90 ] In the 1979 agreement, the grant of the easement is contained in the first operative paragraph.

That paragraph states that, in consideration of $1, the owners of the servient tenement agree with the owners of the dominant tenement that the latter "shall be able to leave the said water line in its present position, and to draw water from Sturgeon Lake". [ 91 ] While the location of the underground Pipeline is not specified or otherwise described in the 1979 agreement, on the record, the parties know where it is located. Mr. Mihaylov [page419] describes the Pipeline's location as follows: "[t] he waterline is buried and runs roughly six inches south of and parallel to the north boundary of the Lands".

[92] Furthermore, the parties were aware of the 1979 agreement at the time each bought their parcels of land because Instrument No.R147470 was registered on title to both parcels. If they wished to be certain of the Pipeline's location, they could have taken the stepsnecessary to determine that. [93] The absence of a description of the easement is more troublesome. One simple example will demonstrate why. On the record, weknow nothing about the Pipeline other than its approximate location and the fact that it is apparently made of galvanized steel.

If thePipeline were six inches in diameter when it was installed, could the owners of the dominant tenement replace it with a pipeline that wastwo feet in diameter? Or with one that was six feet in diameter? The uncertainty engendered by the absence of a description of theeasement has obvious implications for the owners of both the dominant and servient tenements. Indeed, this uncertainty is evident by aconsideration of para. 4 of the judgment, which provides that the respondents can bury a new waterline "within the boundaries of theWater Pipe Easement".

Because the boundaries of the easement are not specified, known or readily ascertainable, how could the partiesknow whether a new waterline was within the boundaries or not? Put another way, if the existing Pipeline is found to be six inches indiameter and the respondents seek to install a new pipeline that is two feet in diameter in its place, is the new pipeline within theboundaries of the existing Pipeline or not? Without a description of the boundaries of the Pipeline, how can that question to be answered? [94] This court was not pointed to any case law directly on point.

However, counsel for the applicants urged the court to turn toFallowfield v. Bourgault (2003), (ON CA), 68 O.R. (3d) 417, [2003] O.J. No. 5206 (C.A.) for guidance. [95] In Fallowfield, Feldman J.A., writing for the majority, stated that the issue before the court was whether certain ancillary rights werereasonably necessary to the exercise or enjoyment of an easement.

At para. 15 of Fallowfield, Feldman J.A. said that it was necessary tofirst "interpret the extent of the easement based on the wording of the grant, the circumstances at the time the grant was made, and thepotential application of the ancillary rights doctrine". This statement suggests that it must be possible to interpret the extent of theeasement based on the wording of the grant.

Generally, one would have thought [page420] that some type of description of the easementwould be required to interpret the extent of the easement. [96] Fallowfield also assists because it demonstrates that the courts are loath to imply an ancillary right that would have the effect ofenlarging the dimensions of an easement outside its described boundaries (at para. 24).

Absent some type of description of the boundariesor dimensions of the easement, how could the court know whether it was enlarging the dimensions of the easement? [97] Despite these concerns, in the present case, because of the wording of the grant in the 1979 agreement, the absence of a descriptionof the easement is not fatal. Recall that the grant is contained in the first operative provision of the 1979 agreement.

In that provision, theservient tenement owners agree with the dominant tenement owners that the latter "shall be able to leave the said water line in its presentposition, and to draw water from Sturgeon Lake". Nothing in the words of grant (or otherwise in the 1979 agreement) gives therespondents the right to install a new pipeline or replace the existing one. Accordingly, it does not matter that the Pipeline is notdescribed more particularly.

The respondents have the right only to have the Pipeline left in position on the Mihaylov land, no matterwhat its dimensions. [98] Accordingly, in my view, the applicants have succeeded in part on this issue. I agree that the application judge erred in finding thatthe 1968 agreement was the grant of an easement. And, while I agree with the application judge that the 1979 agreement was the grantof an easement, I do not agree with his view of the scope of that easement. I will return to a consideration of the scope of the grant in the1979 agreement, below, when discussing the third issue raised on this appeal.

Issue #2: Did the application judge err in finding that although the grant of easement in the 1979 agreement breached s. 29(2) of the1970 Act, s. 50(22) of the 1990 Act applied to validate the otherwise defective easement? [99] It will be recalled that the application judge decided that s. 50(22) of the 1990 Act applied to validate the easement based on theparties' agreement on certain propositions. Those propositions included that the subdivision control provisions of the 1970 Act applied toboth properties by 1979; in relation to Instrument No.

R147470, there was no registered plan of subdivision that provided for aneasement and no consent from the local land division committee; and, at the relevant time, s. 29(2) of the 1970 Act prohibited anyconveyance that did not meet these (or other inapplicable) requirements, where the grantor retained [page421] an interest in the abuttingland, and the grantor did retain such an interest. [100] Nothing in these reasons is to be taken as approval of those propositions.

No challenge was taken to their correctness in this court. [101] The sole question raised on this issue is whether the application judge correctly found that s. 50(22) of the 1990 Act applied andvalidated the (allegedly) defective easement. The applicants renew the argument that they made below: when 116 acquired title to theAbel land, the solicitor for the transferee did not complete the solicitor's statement; therefore, the easement was not conveyed to 116 (thepurported dominant tenement); and s. 50(22) cannot be read to remedy the defect in title to the Abel land.

At most, they say, s. 50(22)could cure any potential defect in title to the Mihaylov land. [102] I agree with the application judge, for the reasons that he gave, that s. 50(22) of the 1990 Act applied to validate the easement. [103] Accordingly, I would not give effect to this ground of appeal. Issue #3 : Did the application judge err in failing to find that (

a) the easement permitted only the previously installed water Pipeline tobe left in its present position; and (

b) the respondents can make repairs to the Pipeline only with the applicants' agreement? [104] Paragraph 4 of the judgment permits the respondents to enter upon the Mihaylov land "for the purpose of repairing the existingwater line or burying a new water line within the boundaries of the Water Pipe Easement". However, on a plain reading of the 1979agreement, the respondents have no right to install or bury a new waterline on the Mihaylov land and they can make repairs to theexisting Pipeline only with the applicants' prior agreement. [105] Therefore, in my view, the answer to the question posed by Issue #3 is yes, he did so err.

The standard of review [106] The parties did not address the standard of review that this court is to apply to the application judge's

interpretation of the 1979agreement. It was that

interpretation which led to para. 4 of the judgment. Assuming that the standard is the deferential one enunciated inSattva Capital Corp. v. Creston Moly Corp., [2014] 2 S.C.R. 633, [2014] S.C.J. No. 53, 2014 SCC 53, in [page422] my view, nodeference is owed to the application judge's

interpretation because it is based on an erroneous legal premise. [107] The application judge's determination that the 1979 agreement was the grant of an easement consists of a single paragraph (at para.31 of his reasons). Its brevity is understandable, as the application judge finds that it "continu[ed] rights that already existed" as a resultof the 1968 agreement. However, as I explain above, the application judge erred in law in finding that the 1968 agreement was the grantof an easement. Therefore, the 1979 agreement did not continue the rights of an easement. Rather, for the first time, the 1979 agreementwas the grant of an easement. Because the application judge's

interpretation of the 1979 agreement is based on an erroneous legalpremise (that it continued pre-existing easement rights), deference is not owed to his

interpretation of its terms. No right to bury a new waterline [108] The application judge's

interpretation -- which would permit the respondents to bury a new waterline on the Mihaylov land -- runscontrary to the express language of the grant. As Rothstein J. wrote in Sattva, "[w]hile the surrounding circumstances will be consideredin interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agreement" (at para. 57). [109] The grant of the easement in the 1979 agreement is contained in the first operative provision. For ease of reference, I set it outagain now.

NOW THIS AGREEMENT WITNESSETH that in consideration of the sum of ONE DOLLAR ($1.00), the parties of the first parthereby covenant and agree with the parties of the second shall be able to leave the said water line in its present position, and to drawwater from Sturgeon Lake. [110] On a plain reading of this provision, the owners of the servient tenement grant the owners of the dominant tenement a single right:to leave the Pipeline in place and to draw water from the lake.

Had the parties intended that the owners of the dominant tenement couldreplace the Pipeline, it would have been a simple matter to have included words to that effect. They did not. [111] The application judge interpreted the words of grant as if they gave the dominant tenement a free-standing right to draw water fromthe lake by means of a pipeline. With respect, that

interpretation ignores the initial words of the grant which limits the right to having thePipeline left in place. The limits of the right are determined by reference to the language of the express grant creating the right:[page423] Golisky v. Romanuik, (ON CA), [1951] O.J. No. 564, [1951] 2 D.L.R. 475 (C.A.), at para. 6.

Theinterpretation of a written agreement must be grounded in the text and read in light of the entire document (Sattva, at para. 57). [112] And, I see nothing in the words of the 1979 agreement that would permit an expansion of the express words of grant to include aright on the part of the dominant tenement owners to install a new pipeline. In saying this, I am mindful of the repair provision in the1979 agreement, a matter to which I will return shortly.

Before doing so, however, I would like to discuss the surrounding circumstancesat the time the 1979 agreement was executed because, in my view, such a consideration deepens our appreciation of the intention of theparties, as expressed in the words of grant. [113] The surrounding circumstances include the fact that the 1979 agreement was the third of three agreements made in respect of thePipeline, the other two being the 1966 agreement and the 1968 agreement. As I have already explained, under the 1966 agreement, Ms.Johnson gave a licence to Frederick G. Hill and Mary Hill to lay the Pipeline on her land.

From what we know of the 1966 agreement,Ms. Johnson received nothing in exchange for granting the Hills that licence. It was the act of a kind and generous neighbour. As theright given was a licence, Ms. Johnson could have revoked it at will. If that had occurred, not only did the right to lay the Pipelinedisappear, so too did the right to draw water from the lake by means of it. [114] Under the 1968 agreement, Ms. Johnson gave a licence to Mr. Plewes, Mr. Duxbury and Mrs. Duxbury which permitted thePipeline to remain in place on her land. Without that licence, Ms.

Johnson had the right to remove the Pipeline at will. She receivednominal consideration for the licence -- $1 on execution of the 1968 agreement and $10 per year for the "currency of" the 1968agreement. Again, the 1968 agreement appears to be a neighbourly act of kindness. In the circumstances, it is understandable that shegave Mr. Plewes and the Duxburys a very limited right -- the right to have the Pipeline left in place on her property. Again, however, asthe 1968 agreement was a licence, Ms.

Johnson could have revoked it at will and removed the Pipeline. [115] The 1979 agreement is significantly different from the 1968 agreement in that it was the grant of an easement and not a merelicence. That said, it is important to note that the words of grant in the 1979 agreement are the same as those which were used in the1968 agreement: the servient tenement owners agreed that the dominant tenement owners had the right to leave the Pipeline in its"present position" and draw water from [page424] Sturgeon Lake.

Just as in the case of the 1968 agreement, the owners of the servienttenement received virtually nothing in exchange for the grant -- $1 on execution and the promise of $10 per year thereafter. [116] Neither the language of the grant nor the circumstances existing at the time of its creation support the scope of the easement asfound by the application judge. Rather, both lead to the conclusion that the right is confined to that which was expressly given: only theright to have the Pipeline left in place.

Of course, by virtue of the fact that the 1979 agreement created an easement, rather than a licence,this right could no longer be revoked at will. The repair provision [117] The repair provision is contained in the second operative provision in the 1979 agreement. For ease of reference, the wording of therepair provision is set out again now: The Parties of the Second Part [owners of the dominant tenement] covenant and agree that if they should have to enter on the lands of

the Party of the First Part [owners of the servient tenement] to make any repairs which the Party of the First Part agrees that they maydo, that they will repair any damage done to the lands of the Party of the First Part as a result of such repairing. [118] It is critical to appreciate that the repair provision is a promise flowing from the dominant tenement owners to the servienttenement owners and not vice versa. The servient tenement owners could have included a right of repair in the grant but they did not.

Inthe repair provision in the 1979 agreement, the "right" of repair is a promise given by the dominant tenement owners to the servienttenement owners. And what do they promise? That they would not make repairs to the Pipeline without the prior agreement of theservient tenement owners. The dominant tenement owners could not promise ("covenant and agree") that they would have a right torepair the Pipeline because that right was not theirs to give.

That right belonged to the servient tenement owners because it involved actsupon their land. [119] The servient tenement owners chose not to give a right of repair to the dominant tenement owners. Instead, they accepted thepromise of the dominant tenement owners that the latter would not repair the Pipeline without their permission and that they would repairany damage to the servient tenement resulting from the repairing. [120] A right of repair such as that which the application judge found cannot be implied because it runs afoul of the express [page425]terms of the repair provision in the 1979 agreement.

Moreover, the application judge's

interpretation of the repair provision is based onan incorrect premise -- namely, that the grant of the easement included the right to repair the Pipeline. Put another way, his

interpretationassumed that the servient tenement owner gave the right of repair to the dominant tenement owner. As I have shown, that is not the case.The repair provision is a promise flowing from the dominant tenement owner to the servient tenement owner. [121] Accordingly, I would allow this ground of appeal.

Issue #4 : Does the respondents' failure to have paid the sum of $10 per year for the easement, as required by the 1979 agreement,render that agreement null and void? [122] The applicants ask this court to determine whether the 1979 agreement is null and void because the owners of the dominanttenement have not made the requisite payments of $10 per year. I would decline to decide this issue because it is, in effect, being raisedfor the first time on appeal. [123] I begin by noting that this issue was not raised in the pleadings.

It is fundamental to the litigation process that lawsuits be decidedwithin the boundaries of the pleadings -- the parties are entitled to have a resolution of their differences on the basis of the issues joinedin the pleadings: Rodaro v. Royal Bank of Canada (2002), (ON CA), 59 O.R. (3d) 74, [2002] O.J. No. 1365 (C.A.),at para. 60. [124] I next consider the application judge's reasons on the issue. The full extent of those reasons are contained in para. 60, which readsas follows: The final point concerns the obligation of 116 to pay $10 per year for the easement.

Apparently neither side was aware of thisrequirement until it was raised in 2014 by the Mihaylovs. In view of the current controversy, no payments have since been made oraccepted.

Now that the controversy is resolved, I direct 116 to pay the annual sum due to the Mihaylovs, retroactive to the date whenthey became the owners of [the Mihaylov land]. [125] The brevity of the application judge's reasons on this issue -- coupled with the fact that the issue was not joined in the pleadings --indicates that this issue was not squarely before the court below, nor was it fully argued. [126] Because the issue was not squarely raised in the pleadings and the relevant legal principles for its resolution have not beenarticulated nor tested through the adversarial process, it is, in effect, being raised for the first time on appeal. [127] In the circumstances, the court is not in a position to fairly decide this ground of appeal and I would decline to do so. [page426] Disposition [128] For these reasons, I would allow the appeal in part and set aside all but para. 5 of the judgment.

I would declare that (1) the easement granted in the 1979 agreement and registered against the parties' respective properties as Instrument No.

R147470 isvalid; (2) the scope of the easement is limited to leaving the existing Pipeline in its present position on the Mihaylov land; (3) the respondents may make only those repairs to the Pipeline which the applicants agree to, in advance; and (4) if the applicants permit the respondents to enter onto the Mihaylov land to make repairs to the Pipeline, the respondents shall repairany damage done to the Mihaylov land as a result of those repairs. [129] I would also make an order restraining and enjoining the respondents from entering onto the Mihaylov land for any purpose otherthan with the applicants' express agreement. [130] The parties agreed that the successful party should receive $4,000 in costs.

As the applicants have been largely successful onappeal, I would order costs of the appeal in their favour in the sum of $3,000, all inclusive. [131] If the parties are not able to agree on the matter of costs below, they may make written submissions on it, to a maximum of threepages, such submissions to be filed with the court within ten days of the date of release of these reasons.

[ 132 ] I wish to conclude these reasons by commending counsel for both parties for the courteous and reasonable way in which they discharged their obligations to their clients and to the court. As it appears that the Pipeline is in need of repair and the PVC line on the Mihaylov land needs to be removed, I hope that counsel can use those same qualities to enable the parties to put their differences behind them and find an amicable resolution to both matters.

Appeal allowed in part. [page427] Notes 1 The Mihaylov land consists of two parcels: one to the west of Long Beach Road and the other to the east of Long Beach Road. The latter parcel is bounded on the east by the lake. 2 In certain places in the documentation, including the judgment, Instrument No. R147470 is inaccurately referred to as Instrument No. 14470. End of Document

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