2013 NLCA 45, 2013 NLCA 45

Date: 20130 702 Docket: 12/79 Citation: Regal Realty Limited v. Pentagon Holding Limited , 2013 NLCA 45 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN : REGAL REALTY LIMITED APPELLANT AND : PENTAGON HOLDING LIMITED RESPONDENT Coram: Rowe, Barry and Hoegg JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador Trial Division (G) 201001G5828 Appeal Heard: June 3, 2013 Judgment Rendered: July 2, 2013 Reasons for Judgment by Barry J.A. Concurred in by Rowe and Hoegg JJ.A. Counsel for the Appellant: Sheri Wicks

Counsel for the Respondent: Wayne White Barry J.A: [ 1 ] This case arose from a dispute over use of a small lane in downtown St. John’s shared by the two parties to this appeal. Regal Realty Limited (Regal) appeals a Trial Division decision which permitted Pentagon Holding Limited (Pentagon) to leave propane tanks on a portion of the lane owned by Regal until Regal removes a concrete stairway which blocks vehicular access along a portion of the lane over which both parties claim a right-of-way. [ 2 ] Regal owns the Murray Premises at the intersection of Beck’s Cove and Harbour Drive, St.

John’s, containing shops and restaurants and a small hotel. Pentagon owns the building housing the Blue on Water Restaurant and Hotel on Water Street, which is attached at the rear to the Murray Premises. [ 3 ] Pentagon’s claim to the right-of-way stems from a 1920 deed, from the Ditcham Estate, which conveyed a right-of-way over a passageway from Water Street along the western boundary of the Blue on Water building towards the Murray Premises.

Pentagon says this right-of-way for pedestrians and vehicles extended sixty-seven feet eight inches (67'8") to access a door at the rear of its premises and would apply to the area where it placed the propane tanks. Regal disputes the extent of the Pentagon right-of-way and says a proper

interpretation of the deed shows the right-of-way only goes forty-eight feet two inches (48'2") towards the rear and stops before getting to the tanks. Unfortunately, the 1920 deed did not have a plot plan attached.

The description in the deed is set out below. [ 4 ] Regal’s interest comes from a 1932 deed from the same Ditcham Estate which conveyed to Regal’s predecessors title to land including the area now holding the propane tanks but reserved a right-of-way for Pentagon’s predecessors in title over that area as well as granting a right-of-way in common with Pentagon over the passageway earlier mentioned. [ 5 ] Regal submits Pentagon cannot claim the benefits of the reservation of a right-of-way in the 1932 deed, since the Ditcham Estate, although making the reservation, did not follow through with a deed which would convey the easement to Pentagon’s predecessors in title. [ 6 ] The trial judge interpreted the deeds as conveying to Pentagon’s predecessors a right-of-way from Water Street all the way to the rear of Pentagon’s premises, that is 67'8", to include the area of the propane tanks. [ 7 ] Pentagon does not appeal the decision of the trial judge ordering that Pentagon cease interfering with the right-of-way by placing garbage bins and parking vehicles along it.

But Pentagon, while admitting it has no right to keep its propane tanks on Regal’s property, argues that the trial judge correctly allowed Pentagon to leave the tanks where they are until Regal has removed the concrete stairway. [ 8 ] Regal appeals on the basis that the trial judge had no authority to permit the Pentagon tanks to remain where they are once the finding was made that this amounted to a trespass on Regal’s property. Regal also says that the trial judge erred in making the order for removal of the stairway when this had not been requested by the parties and was not a live issue at trial.

Regal says further that the trial judge also erred in neglecting to grant the full permanent injunctive relief requested, despite properly concluding Pentagon had no right to park vehicles or place garbage bins on the right-of-way. STANDARD OF REVIEW [ 9 ] The standard of review is correctness as the matter involves questions of law, namely the

interpretation of title documents, with no substantial dispute as to the factual context. ISSUES [ 10 ] With the admission of Pentagon that a right-of-way provides no right to impede access over it by parking vehicles or placing garbage bins, the main issue in this case is whether the trial judge erred in making an order for the removal of the stairway when the parties had not requested this and this issue had not been argued in the Trial Division and in delaying a permanent injunction until the steps were removed. For the reasons set out below I have concluded he did err in this regard.

REFERENCES TO THE STAIRWAY AT TRIAL [ 11 ] The only reference to the stairway in the pleadings is paragraph 7 in the affidavit in response to Regal’s originating application, sworn by Jason Brake, a director and officer of Pentagon. He says: I further state that with the installation of the steps on or between the Water Street ROW [from the 1920 deed] and the L Shaped ROW [from the 1932 deed] those rights of way have been forever changed by the Plaintiff [Regal] and/or its predecessors in title such that the rights of way can no longer be used for vehicular access to the Plaintiff’s property.

The rights of way can be used for pedestrian access and I state that the location of the Defendant’s garbage boxes (there is nowhere else for the Defendant to store its garbage) and the parking of the vehicles by the Defendant on the Water Street ROW does nothing to impede pedestrian access to the Plaintiff’s property. [ 12 ] Mr. Brake testified he shoveled and salted the steps at times in winter.

He conceded the steps could have been there when the 1920 and 1932 deeds were made and that a survey dated January 5, 2011, purporting to show the various boundaries described in the deeds showed the stairway as completely within the boundary of Regal’s land and with only a small strip (approximately one foot) on the eastern side of the stairway falling within the 10 foot right-of-way claimed by Pentagon. The real restriction to vehicular access is the approximately ten foot drop between the Water Street right-of-way and the L shaped right-of-way.

The court had no evidence when that drop was created. [ 13 ] William Mahoney, owner of Regal, testified the steps may have been installed in the late 1970’s but he was not certain on this point.

THE TRIAL DECISION [14] The relevant portions of the trial judge’s decision regarding the stairway may be found at paragraphs 53-57 of his decision: [53] The general circumstances of this case however are that both parties to this action have taken certain liberties with the overall use ofthe passageway and right-of-way such that its original purpose has been compromised. [54] As the propane tanks exist today they are located on the plaintiff’s property over which a right-of-way has been granted to thedefendant.

The right-of-way however has been compromised; in fact, it has been completely blocked off by a concrete stairway erectedon the plaintiff’s property. It seems to me that prior to the construction of the stairway the placement of these propane tanks wouldclearly have been an obstruction to the intended use of the right-of-way. Where the propane tanks are presently located on the “L”shaped green right-of-way, the width of the right-of-way is only ten feet and as such it would not have been possible for trucks andvehicles of every description to reach the rear of the property unobstructed.

These tanks would therefore have been a substantialinterference with the easement as it was originally granted.

However, as they presently stand they do not impede foot traffic and aretherefore not a substantial interference with that part of the right-of-way for the only purpose it can be presently used. [55] As well, on the evidence before me, I find that considering the general circumstances of this case, it is clear that because of themodifications made to the right-of-way by the construction of a stairway on the plaintiff’s land, access has been restricted to foot trafficonly, rendering it unfit for the purposes for which it was originally granted that is, to include vehicles.

In the present circumstance, thepropane tanks form no obstruction to the free movement of people back and forth over the stairway.

As well, there is no evidence beforeme to show that the propane tanks are unsafe, hazardous or offending any fire or municipal code. [56] I find therefore that as the tanks now sit they do not of themselves obstruct the right of passage by foot and as well do not present asa substantial interference with the right-of-way since the overwhelming obstruction of the right-of-way is the concrete stairway. [57] As well, the original granting of the ten foot wide right-of-way was for unobstructed access to and from Water Street to the rear ofthe defendant’s building.

I find therefore that the construction of the concrete stairway on the plaintiff’s property completely preventsthe passage of any trucks or vehicles to the rear doors of the defendant’s property. As such, it renders the right-of-way unfit for thepurposes for which it was granted and is therefore an unlawful interference. THE LAW AND ANALYSIS [15] Hoegg J.A. for the Court in Quinlan Brothers Limited v. Coady, 2013 NLCA 31, stressed the need for trial judges to restricttheir decisions to issues arising from the pleadings.

She stated: [56] The trial judge’s decision shows that he decided the case on the basis of abandonment of contract. In so doing, he adopted atheory of the facts which was at odds with the position of both parties and the law. Given his decision, Mr. Coady is not apt tocomplain. Quinlans, being the loser, understandably complains. Quinlans was not only denied the opportunity to argue the law ofabandonment of contract, but it may also have been denied the opportunity to adduce evidence specific to abandonment of contract. Inthis regard, I endorse the comments of Doherty J.A. in Rodaro v.

Royal Bank of Canada (2002), (ON CA), 59 O.R.(3d) 74 (C.A.) at paras. 60 and 62: [60] It is fundamental to the litigation process that lawsuits be decided within the boundaries of the pleadings. As Labrosse J.A.said in 460635 Ontario Limited v. 1002953 Ontario Inc., (ON CA), [1999] O.J. No. 4071 at para. 9 (C.A.) (QL): 1. … The parties to a legal suit are entitled to have a resolution of their differences on the basis of the issues joined in the pleadings. Afinding of liability and resulting damages against the defendant on a basis that was not pleaded in the statement of claim cannot stand.

Itdeprives the defendant of the opportunity to address that issue in the evidence at trial. … [62] In addition to fairness concerns which standing alone would warrant appellate intervention, the introduction of a new theory ofliability in the reasons for judgment also raises concerns about the reliability of that theory. We rely on the adversarial process to get atthe truth. That process assumes that the truth best emerges after a full and vigorous competition amongst the various opposing parties.

A theory of liability that emerges for the first time in the reasons for judgment is never tested in the crucible of the adversarial process. We simply do not know how Spence J.’s lost opportunity theory would have held up had it been subject to the rigours of the adversarialprocess. We do know, however, that all arguments that were in fact advanced by Mr.

Rodaro and were therefore subject to theadversarial process were found wanting by Spence J. [57] In a trial where both sides are represented by counsel, it is generally unfair to decide a case on principles which the parties didnot have opportunity to address, with the possibility, like in Rodaro, that the result is not reliable. [16] This statement of the law has relevance for the present case.

Here the only reference in the pleadings by the parties to thestairway was in paragraph 7 of the response to the originating application, where Pentagon raised the matter as suggested justification forits own wrongful interference with the right-of-way. Pentagon did not allege the steps should be removed. If it had, it would have beenopen to Regal to adduce evidence of acquiescence or abandonment of the vehicular right-of-way. The trial judge erred in ordering theremoval of the stairway.

This relief had not been requested and was not fully argued. [17] Much of the parties’ argument revolved around whether the right-of-way from Water Street extends the full 67'8" to the rear ofPentagon’s premises. [18] The grant from the Ditcham Estate to Newfoundland Wholesale Dry Goods Limited, Pentagon’s predecessors in the 1920 deed,reads (with line spacing adjusted for ease of reading):

[The Grantor conveys unto the Grantee] ALL THAT piece or parcel of land together with buildings and erections thereon situate and being on the south side of Water Street in the town of St.

John’s, aforesaid, and abutted and bounded as follows: that is to say; - On the north by Water Street, aforesaid, by which it measures twenty five feet ten inches [25'10"] more or less; - On the east by property of Hutchings Estate by which it measures sixty seven feet [67'] more or less; - On the south by other property of the said Grantor, occupied by Alan Goodridge & Sons Ltd. by which it measures twenty three feet six inches [23'6"] more or less and - On the West by a passage way leading to property of the Grantor occupied by Alan Goodridge & Sons Ltd. by which it measures sixty seven feet eight inches [67'8"] more or less together with a right of way for the Grantee, its servants and agents by the said passage way on foot or with trucks and vehicles of every description (to be used in common with the occupiers of the adjoining property of the Grantor) to and from the doors at the rear of the premises hereby conveyed opening upon the said passage way. (Emphasis added.) [ 19 ] The 1932 deed to A.H.

Murray & Co. Limited, Regal’s predecessor in title, reads (with adjusted line spacing): ALL THAT water side property situate in the town of St. John’s, being portion of the property heretofore known as “Goodridges” and abutted and bounded as follows, that is to say, commencing at the south eastern corner of the property and at the waters of the harbour of St.

John’s, and; - running thence northerly by the boundary of land now or heretofore of Stabb Rowe Company one hundred and ninety-two feet [192'] more or less, and - thence westerly by land and erections of the Newfoundland Wholesale Dry Goods Company Limited twenty-five feet [25'] more or less, - thence by said property of the Newfoundland Wholesale Dry Goods Company Limited nineteen feet six inches [19'6"] more or less and - nine feet more or less in a northerly direction, - thence westerly forty-seven feet six inches [47'6"] more or less, - thence southerly eight feet [8'] more or less, - thence westerly ten feet six inches [10'6"] more or less, - thence southerly in an irregular line ninety-seven feet [97'] more or less and - seventy-three feet [73'] more or less to the waters to the harbour. the same being more particularly described on the diagram hereto annexed marked “A” and being outlined in red together with all wharves, buildings and erections thereon and all rights, easements and privileges appurtenant thereto reserving however to the Grantor her executors administrators and assigns and to the Newfoundland Wholesale Dry Goods Company Limited its successors and assigns a general right of way ten [10] feet wide at the rear of the Water Street portion of this property and at the western side of the Newfoundland Wholesale Dry Goods Company Limited to the south boundary of their property as the same is more particularly shown and delineated on the diagram hereto annexed marked “A” and coloured green TOGETHER with a general right of way in common with the said Grantor and the said Newfoundland Wholesale Dry Goods Company Limited its successors and assigns from Water Street to the property hereby conveyed over that portion of land of the said Grantor coloured yellow on the diagram hereto annexed marked “A” . . . [ 20 ] The trial judge dealt with the extent of Pentagon’s right-of-way as follows: [29] The analysis of this matter begins with an examination of the 1920 conveyance of the Ditchams to Newfoundland Wholesale as set out above.

Following the directions in Murphy and Driedzic in relation to the

interpretation to be given to the construction of, as in this case, a conveyance document, I find that in that conveyance a right-of-way was provided to Newfoundland Wholesale Dry Goods Limited to and from the doors at the rear of the conveyed premises opening upon the passageway. [30] Much has been made of the length of the right-of-way and the location of these doors with the plaintiff suggesting that over the years the property could have been renovated and the doors relocated.

There was no evidence to show that the doors had been part of any renovation at any time since the 1920 conveyance and in any event the conveyance referred specifically to the doors at the “rear” of the premises. The ordinary dictionary meaning of “rear” is the “back part of anything”; “the position at the back of anything”; and in the rear means “behind; at the back” Paperback Oxford Canadian Dictionary , 2004, s.v. “Rear”. [31] In 1920 the Ditchams must surely have known the location of the doors to its property when specifying the rear doors.

There was no mention of the side doors or the front doors or any other possible door location. These rear doors were important for the conduct of the ordinary business at the location at that time and appear to be still so today. [32] The Ditchams specified the rear doors, those at the back of its building and specifically opening upon the passageway that it was

reserving for the benefit of Newfoundland Wholesale and adjoining property owners. [33] The Ditchams were also careful in their description of the measurements of the boundaries of the conveyed property. Specifically, north along Water Street 25.10 feet [sic: 25'10"], east along Hutchings Estate by 67 feet, south by its own property for 23.6 [sic: 23'6"].

The conveyance then states, on the west by the passageway leading to the property of the Grantor occupied by Alan Goodridge & Sons Ltd. by which it measures 67.8 feet [sic: 67'8"]. [34] The plaintiff takes the position that the 67.8 feet [sic: 67'8"] refers only to the length of the west wall of the conveyed property but does not mean the length of the right-of-way. I do not accept the plaintiff’s position on this point since if the Ditchams had intended the western boundary of their property to run along the passageway for a shorter distance than its full length they would simply have said so.

The Grantor did not say the western boundary of the property ran partially along the passageway but stated specifically that the western boundary measured 67.8 feet [sic: 67'8"] to where its rear doors opened upon the passageway. It should also be noted from subsequent drawings of this property that the western boundary of the conveyed building did not follow a perfectly straight line but narrowed slightly toward the south. This is shown on the 1932 conveyance to A.H. Murray and followed through to the January 2011 survey of David W. Vallis.

This slightly bent boundary was not given any reference in the 1920 conveyance where all the other measurements are so precise but was simply stated as being bounded on the west by a passageway. The clear and precise language of this conveyance leaves no doubt but that the intention of the Ditchams was that the passageway extend fully along the western boundary of the conveyed property and formed the western boundary of that property. The difficulty with the right-of-way or passageway arises, in my view, not with its length but with its width.

It is clear that in 1920 the Ditcham family owned both properties on either side of the impugned passageway as well as other properties in the area. [35] In the 1932 conveyance from the Ditchams to A.H. Murray & Co. Ltd. there is attached a diagram or drawing showing the property conveyed with the reservation of a ten foot wide right-of-way at the western side of the Newfoundland Wholesale Dry Goods Company Limited to the south boundary of their property coloured green together with a general right-of-way from Water Street to the A.H.

Murray property and coloured yellow. [36] The same diagram was also an attachment to the 1936 conveyance to Sonia Sheffman of the property on the immediate western side of the Water Street passageway where it shows the Water Street entrance to the passageway as being 10 feet 5 inches wide then fanning out to 19 feet along the 40 foot 6 inch length of that conveyed property to where it then meets the A.H.

Murray property. [37] There was once again, as in the 1932 conveyance, and from the diagram attached to this 1963 [sic: 1936] conveyance, a ten foot wide right-of-way extending from the rear or southwest corner of 319 Water Street extending in an “L” shaped manner north toward Water Street for approximately 28 feet 6 inches and then west for 47 feet 6 inches. This “L” shaped green coloured right-of-way is significant for two reasons.

Firstly, it helps define more precisely what the Ditchams must have believed the right-of-way to have been in the 1920 conveyance, that is, a combination of the yellow and green sections as set out in the 1932 and 1936 conveyances giving a right-of-way all the way to the rear of what is now 319 Water Street. Secondly, the diagram or drawings attached to the 1932 and 1936 conveyances show that the yellow colour [sic] passageway from Water Street was never intended to extend further south beyond where it touches upon the A.H.

Murray property at the time for a distance of 40 feet 6 inches which is the length of the boundary of the property conveyed in 1936 to Sonia Sheffman. What the 1920 conveyance failed to do by not specifying the width of the right-of-way it provided from the yellow coloured

section to the rear of what is now 319 Water Street, it clearly set out in the 1931 [sic: 1932] and 1936 conveyances. [38] It should be noted that even if the 1932 and the 1936 conveyances made no mention of the width of the right-of-way as it extended from the Water Street passage way, the wording in the 1920 conveyance provided for access to the rear doors of 319 Water Street by foot or trucks and vehicles of every description.

Since the mouth of the passageway was approximately ten feet wide along Water Street any vehicle up to ten feet wide would have been granted access to the rear doors of 319 Water Street and any vehicle wider than ten feet would not be able to enter. This is simply common sense. [39] It follows then that the defendant’s position that the yellow coloured

section shown on the diagrams as attached to the respective conveyance documents is not reasonable and does not permit the defendant to claim that the Water Street entrance fanned out from its 10 foot width off Water Street to approximately 30 feet as measured across from the rear most corner of what is now 319 Water Street. There is simply no evidence to support that. [40] I find therefore that the 1920 conveyance gives the defendant, Pentagon Holdings Limited, a general right-of-way over what is referred to following the 1932 and 1936 and subsequent conveyances as the yellow coloured

section with a further ten foot wide right- of-way over the plaintiff’s property to the rear of the defendant’s property at 319 Water Street. There is no doubt that the green “L” shaped right-of-way is owned by the plaintiff following the 1931 conveyance to A.H. Murray & Co. Ltd. and subsequently down the line to Regal Realty Limited. [ 21 ] I find no significant error in the analysis of the trial judge. Regal is correct in noting that the “it” which occurs at 4 places in the 1920 grant refers to the western boundary of the Pentagon property rather than to the passageway.

However, when the grant refers to being bounded “on the West by a passage way leading to property of the Grantor occupied by Alan Goodridge & Sons Ltd. by which it measures sixty seven feet eight inches more or less” and when the reservation of the right-of-way refers to it being “by the said passage way”, the clear inference is that the grantor intended the right of way to extend 67 feet 8 inches, the full length of the passageway. [ 22 ] The reference in the 1920 deed to the right-of-way running “to and from the doors at the rear of the [Pentagon] premises” also supports this inference. “Rear” does not mean partly along the side of the building. [ 23 ] Regal speculates that possibly the Pentagon building may have been extended after the 1920 deed.

It produced no evidence, however, to support this. [ 24 ] I find no error in the trial judge’s conclusion that Pentagon’s right-of-way extends back 67'8" to the rear of its premises and takes in the area where the propane tanks were placed. Pentagon concedes, however, that its right-of-way for foot and vehicular access does not authorize storage or the placing of the tanks on the land which undisputedly is owned by Regal. So whether the right-of-way

extends back 67'8" or less, does not matter for resolution of the present dispute. As correctly found by the trial judge, the tanksconstitute a trespass on land admittedly owned by Regal and, with respect, the trial judge erred in not ordering their removal forthwith. [25] The trial judge’s error appears to stem from his conclusion that foot traffic was still possible along the right-of-way by the tanksand that therefore they did not constitute a substantial interference with any right-of-way, considering that the stairway blocked vehiculartraffic in any event.

But, with respect, this analysis ignores the fact that Regal was not claiming under a right-of-way in the area wherethe tanks were placed but for a trespass on land which it owned under the 1932 deed, which ownership is not disputed by Pentagon. Thetrespass arose from an “overburdening” of its right-of-way by Pentagon and may be enjoined by injunction. See, Sunnybrae SpringbookFarms Inc. v. Trent Hills (Municipality) 2010 ONSC 1123, 76 M.P.L.R. (4th) 27, at para. 9, aff’d 2011 ONCA 179.

Injunctive Relief [26] The trial judge ordered removal of the garbage bins and prohibited Pentagon from parking on the right-of-way. However, thetrial judge did not issue a permanent injunction enforceable against Pentagon’s employees and customers. With respect, this was anerror. Regal is entitled to an injunction in the form normally granted once trespass has been established. See, for example, Murphy v.Coughlan (1978), 16 Nfld. & P.E.I.R. 60 (NLCA); Driedzic v. West (2000), (NL SC), 196 Nfld. & P.E.I.R. 84(NLTD); and Randell v. Dillon, 2005 NLCA 50.

Damages [27] In this case Pentagon knew or ought to have known it had no right to store propane tanks on Regal’s land, even if it had a right-of-way entitling it to pass over the land on foot or by vehicle. Its trespass was intentional. [28] In Bobbett v.

Fitzpatrick (1994), (NL SC), 126 Nfld. & P.E.I.R. 170 (NLTD), Mercer J. held that punitiveor exemplary damages may be awarded in actions of intentional tort “where in addition to committing the wrongful act, the defendant’sconduct is high handed, malicious, oppressive or arbitrary.” At the very least, Pentagon’s conduct may be characterized as high handed. [29] This Court awarded exemplary damages in an action for trespass to land where a Town Council knew or ought to have knownthe land upon which it disposed of garbage and erected an incinerator was on private land. See, Kitchen v.

Harbour Grace (Town)(1983), 43 Nfld. & P.E.I.R. 146 (NLCA). See also, 655 Developments Ltd. v. Browning Harvey Ltd. (1989), (NLSC), 79 Nfld. & P.E.I.R. 175 (NLTD), at para. 20, where the Court recognized that preventing the wrongdoer from benefiting fromunlawful conduct and deterrence of others may justify punitive damages. [30] Regal is entitled to punitive damages to recognize that Pentagon has benefited from its improper use of the right-of-way and itstrespass since 2004 and to recognize that this wrongful, high handed, behaviour was especially egregious following the demand letterfrom Regal’s counsel in 2009.

I find that an appropriate award of damages would be five years at $2,000.00 annually and 4 years at$5,000.00 for a total of $30,000.00.

SUMMARY AND DISPOSITION [31] The appeal is allowed, the decision of the trial judge is varied and Regal shall have the following relief: (

a) A permanent injunction prohibiting Pentagon, its servants, agents, employees, tenants, customers, successors, assigns or any otherperson having notice of or affected by the injunction from parking vehicles, erecting barriers or obstructions or storing items, includinggarbage, upon the Water Street right-of-way or from trespassing on the property of Regal; (

b) An order for the immediate removal of Pentagon’s propane tanks from Regal’s property; (

c) Punitive damages for trespass in the amount of $30,000.00; and (

d) Costs on appeal and in the court below pursuant to Column 3. ______________________________ L. D. Barry J.A. I Concur: _________________________ M. H. Rowe J.A. I Concur: _________________________ L. R. Hoegg J.A.