M.M.H. Prestige Homes Inc. Plaintiff And: Humber Valley Paving Ltd. Defendant, 2022 NLSC 82

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : M.M.H. Prestige Homes Inc. v Humber Valley Paving Ltd. , 2022 NLSC 82 Date : May 12, 2022 Docket : 201401G7147 Between: M.M.H. Prestige Homes Inc. Plaintiff And: Humber Valley Paving Ltd. Defendant Before: Justice Donald H. Burrage Reasons for Judgment Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: April 26, 2022 Appearances: Ruth E. Trask Appearing on behalf of the Plaintiff Megan S. Reynolds Appearing on behalf of the Defendant

Authorities Cited: CASES CONSIDERED: Fillatre Estates v. Fillatre, 2016 NLCA 69; Starkman v. Delhi Court Ltd. and Diamond & Mogil BuildersLtd., (ON CA), [1961] O.R. 467 (C.A.); House v. Toms, 2017 NLCA 40; Errington v. Errington and Woods, [1952] 1KB 290 (C.A.); Traders Finance Corp. v. Primerano, 1955 CarswellOnt 232, [1955] O.W.N. 553 (H.C.J.) STATUTES CONSIDERED: Personal Property Security Act, S.N.L. 1998, c. P-7.1; Judicature Act, R.S.N.L. 1990, c. J-4; Lands Act,S.N.L. 1991, c. 36 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch.

D TEXTS CONSIDERED: William & Rhodes, Canadian Law of Landlord and Tenant, 6th ed. (Thomson Reuters, 2013) REASONS FOR JUDGMENT Burrage, J.: INTRODUCTION [1] This is an application by the Plaintiff, M.M.H. Prestige Homes Inc. (Prestige), for determination of a question of law pursuantto Rule 38.01 of the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D. Namely; Does a License to Occupy, dated 30September 2013, granted to Humber Valley Paving Ltd. (HVP) in respect of certain Crown land give HVP a right of distraint againstanother?

In response, HVP raises a preliminary objection to the standing of Prestige to bring the within application. [2] The parties agree that these questions may be appropriately addressed pursuant to Rule 38.01, as the pre-requisites for theexercise of my discretion under this Rule have been met (see Fillatre Estates v. Fillatre, 2016 NLCA 69). I concur. [3] That said, I observe that HVP also raised a third issue. Namely, whether the Consent Interlocutory Recovery Order, filed 19November 2014, ought to be set aside?

However, the facts underpinning this issue are not substantially agreed and I do not have aproper evidentiary record. Further, there is no discernible advantage to deciding this issue now. In short, the pre-requisites to theexercise of my discretion are not met and for this reason Rule 38.01 is not available to determine this question. In fairness, counsel forHVP conceded as much in argument. BACKGROUND [4] HVP was granted a License to Occupy from the Government of Newfoundland and Labrador, dated 30 September 2013, overCrown land, for a period of one year (the “LTO”).

The land is located at Shallow Pond, Route 510, 59 kilometers north of Red Bay, inLabrador (the “site”). The LTO was first renewed on 30 September 2014. I will have more to say about the LTO in the Analysis tofollow. [5] On 24 July 2013 HVP entered into an agreement with a third party, Mike Kelly & Sons (MKS) whereby HVP charged MKSon a monthly basis for use of the site.

HVP argues that by virtue of this agreement it was now a landlord and MKS its tenant. [6] Pursuant to the agreement MKS was responsible for prepping the camp site, importing any fill required and digging for septiclines, tanks and associated work, as well as monthly communication and TV services. [7] HVP, in turn, was responsible for all permits, positioning trailers on the site, cleaning and laundry services, the provision of allequipment and fixtures in the kitchen and bedrooms, and the installation of septic lines, tank and water systems. [8] Upon substantial completion of the project the site remained the responsibility of HVP. [9] On 2-3 October 2014 HVP’s bailiff distrained against goods and chattels on the site for arrears of rent allegedly owing byMKS in the amount of $110,000.

It is common ground that the LTO was in effect at the time of this distraint. [10] At the time, Prestige held security over certain of these goods and chattels pursuant to a General Security Agreement, asregistered with the Newfoundland and Labrador Personal Property Registry, pursuant to the Personal Property Security Act, S.N.L.1998, c.

P-7.1. [11] Following an application for recovery filed by Prestige, HVP and Prestige entered into a Consent Recovery Order, dated 19November 2014, whereby the goods claimed by Prestige were returned and Prestige deposited with the Supreme Court Registry a bondin the amount of $137,500. Prestige now seeks a release of this bond.

Issues and analysis 1) Does Prestige have standing to bring the within application? [12] In arguing that Prestige does not have standing, HVP characterizes the within application as a challenge to the agreementbetween it and MKS, to which Prestige is not a party, and to which Prestige has no right, title or interest in law, or equity. [13] With respect, I would not give effect to this argument. Properly characterized, the within application is not a challenge to thevalidity of the agreement between HVP and MKS. This is a matter regarding which Prestige takes no interest. [14] Rather, the relief sought by Prestige arises pursuant to

section 139 of the Judicature Act, which provides that “in all cases ofdistress the person whose property is distrained and who wishes to recover that property” may apply to this court for recovery under theRules. The legislation does not speak of “tenant” and does not limit the right to challenge distress to tenants.

Rather, it is contemplatedthat the landlord may seize the property of third parties, if located on leasehold land at the time of distraint. [15] Prestige falls within the meaning of a “person whose property is distrained”, within the language of s. 139, by virtue of itssecurity over the property in question, and thus has standing to bring the within application. 2) Does the License to Occupy give HVP a right of distraint? [16] The Lands Act, S.N.L. 1991, c. 36 draws a distinction between a license, lease and grant of Crown land. In this case the LTOwas issued pursuant to

section 6 of the Lands Act.

Section 6 reads: 6.

(1) The minister may issue a licence for occupancy of an area of Crown land subject to those terms and conditions and subject to thepayment of those fees, rentals and other charges that the minister may set out in the licence. (2) [Rep. by 1996 c27 s3]

(3) A licence issued by the minister under this

section shall not be construed as a warranty that the title of the lands that are thesubject of the licence lies in the Crown. [17] As noted, the LTO was for a period of one year, commencing 30 September 2013, for the purpose of a road construction campand comprised an area not exceeding 6 hectares, 59 kilometers north of Red Bay, Labrador. The LTO was subsequently renewed on thesame terms and conditions. The consideration for the LTO was $5,250 per year payable on its execution. [18] The LTO did not convey to HVP the right to extract minerals from the site.

Rather, pursuant to its terms, HVP was permitted tooccupy the site during the currency of the license, with an obligation to restore it to the satisfaction of the Minister of Service NL and theMinister of Municipal and Intergovernmental Affairs upon its termination. All buildings, structures and personal property were to beremoved at the expense of HVP.

In addition, the LTO could be cancelled upon 30 days’ notice in the event of default by MVP, or in theevent the Minister required the site “for any reason.” [19] A licensee without any interest in the land is libel to have his license revoked at any time (Starkman v. Delhi Court Ltd. andDiamond & Mogil Builders Ltd. (ON CA), [1961] O.R. 467 (C.A.). [20] It is clear from its terms that upon termination HVP holds no residual interest in the land subject to the LTO.

The license inthis instance is a personal right and does not create any estate or interest in the land. [21] The LTO thus gave HVP a possessory interest in the land subject to its terms (House v. Toms, 2017 NLCA 40). Thispossessory interest contemplated the temporary erection of a road construction camp with the land to be restored by HVP. It may includethe ability to exclude trespassers as in House, but that is not an issue in this case.

As such, the relationship between the Crown and HVPwas not that of landlord and tenant, but rather licensor and licensee. [22] It is common ground that in a tenancy an interest in the land passes, whereas in a license it does not (William & RhodesCanadian Law of Landlord and Tenant, 6th ed. & 1.9). Rather, a license makes an action lawful, which without it had been unlawful(Errington v. Errington and Woods, [1952] 1 KB 290 (C.A.)) [23] As the license holder HVP could not bestow any rights on MKS greater than that held by it. HVP could not, for example,sublease the land as though it were a lessee.

As the license holder HVP did not have an interest in the land which could be granted toMKS, or any other party. [24] It follows that the position of HVP and MKS is not that of landlord and tenant, but rather that of licensee and sub licensee. With respect, HVP’s status as a licensee is fatal to its right of distraint. [25] Distress does not lie against a licensee who is liable only for use and occupation (Traders Finance Corp. v. Primerano, 1955CarswellOnt 232, [1955] O.W.N. 553 (H.C.J.)). The facts in Traders are instructive.

Cars were seized from a used car lot purportedlyby Primerano as landlord before Traders could seize them pursuant to its chattel mortgages. Judson, J. found that at the relevant timePrimerano’s company was in possession of the premises without a lease and, without any subsisting relationship of landlord and tenant(at paragraph 6):

6 My conclusion therefore is that during the period from January to September 1954 the company was in possession of these premises without a lease, without any subsisting relationship of landlord and tenant, and without any rent being reserved. Its obligation is to pay for use and occupation. Its position is that of a licensee. There can be no right of distress in these circumstances. The conditions precedent to make lawful a distress for rent are absent.

There was no demise either express or implied; there was no subsisting demise when the rent for which the distress was made was supposed to fall due and there was no reservation of a specific rent payable at a certain time: see Foa, Landlord and Tenant, 7th ed. 1947, p. 469. [ 26 ] In this province the law of distraint applies to a commercial landlord and tenant relationship. Only the landlord has a right of distress. In order for a tenancy to exist an interest in the land must pass from the landlord to the tenant.

If the landlord has no pre- existing underlying interest in the land there can be no lease and no landlord tenant relationship. As such there can be no distress against a licensee who is liable only for use and occupation. [ 27 ] In answer to this issue, then, the LTO did not give HVP a right of distraint. DISPOSITION [ 28 ] In the result, Prestige is entitled to the following relief: 1. The Notice of Distraint dated 1 October 2014 is null and void. 2. The Bond in the amount of $137,400 as filed with the court is released. 3.

The Recovery Order filed 19 November 2014 which obliged Prestige to continue with the proceeding until judgment is entered is set aside. 4. Prestige is awarded its costs on this application, payable forthwith, on a party/party basis under Column 3. _____________________________ Donald H. Burrage Justice