On April 17, 2011, the Supreme Court of Canada dismissed an application for leave to appeal in the remarkable case of Gainer v. Widsten which involved the encroachment of a building on a neighbouring property The original 2005 British Columbia Supreme Court decision in this matter (later upheld by the BC Court of Appeal) may seem a bit counterintuitive as the party at fault could be seen as achieving a favourable result.
A couple, Charles and Patti-Jo Gainer, that own a rural property were one of the parties in the dispute. They built a workshop on their property without ascertaining the position of the lot line. Their new building encroached onto 1750 square feet of the adjacent 2.7 acre property which Mr. Widsten purchased for $12,500 one year later.
Encroachment in the Property Law Act
The matter between the neighbours eventually became contentious and the Gainers petitioned the Supreme Court in Quesnel for a resolution. The initial Supreme Court decision turned upon the application of Section 36(2) of the Property Law Act which reads:
If, on the survey of land, it is found that a building on it encroaches on adjoining land, or a fence has been improperly located so as to enclose adjoining land, the Supreme Court may on application
(a) declare that the owner of the land has for the period the court determines and on making the compensation to the owner of the adjoining land that the court determines, an easement on the land encroached on or enclosed,
(b) vest title to the land encroached on or enclosed in the owner of the land encroaching or enclosing, on making the compensation that the court determines, or
(c) order the owner to remove the encroachment or the fence so that it no longer encroaches on or encloses any part of the adjoining land.
The judicial decision
Rather than order an easement under Subsection (a), a subdivision and transfer of a portion of Mr. Widsten’s property under Subsection (b), or the removal of the workshop under Subsection (c), the judge ordered, somewhat surprisingly, that Mr. Widsten’s entire property be conveyed to the Gainers in exchange for the property’s fair market value.
It is important to note that a decision made by a judge first hearing the petition under Section 36 is discretionary in nature. Generally, appeal courts review discretionary decisions with a greater level of deference, as the judge of “first instance” is expected to be the decision-maker with the best understanding of the facts.
The nature of this decision, however, begs the question of why the judge granted such seemingly draconian relief rather than one of the other available options. This is even more remarkable when one considers the finding that it was “through their neglect in failing to ascertain the position of the lot line” that the Gainers encroached on their neighbour’s property. There was no suggestion that Mr. Widsten was in any way blameworthy.
The appeal
Mr. Widsten appealed the decision, making the argument that the Gainers’ neglect should bar them from the remedy provided. In deciding against him, the Court of Appeal found that neglect and an “honest belief” (arguably required for a party seeking equitable relief under the Act) are not mutually exclusive. The Court of Appeal stated, rather, that the overriding concern in such situations is the established but amorphous concept of the “balance of convenience [which favoured] the vesting of Mr. Widsten’s property in the Gainers upon Mr. Widsten being properly compensated.”
The judge of first instance had ruled that, considering the equities between the parties, the balance of convenience suggested this course of action. One suspects that he reached this decision because the cost to remove the workshop or subdivide the Widsten property was higher than the fair market value of the property; however, granting an easement would have been a far less costly remedy. The Court of Appeal found that there was, however, animosity between the parties that was likely to continue if an easement was granted.
Possible ramifications of the decision
The result, now that the Supreme Court of Canada has dismissed the application for leave, leads to two considerations for potential litigants:
• In situations where the commercial reality is that it would be more cost-efficient to do so, courts may exercise their discretion in such a way that may seem to go beyond the obvious notions of equitable relief.
• The decision demonstrates the danger of having courts determine matters in which decision-makers can exercise their discretion. In such instances, a court’s notion of what is fair may not be the same as the parties’ notion.
For more information on encroachment and the Property Law Act, please contact Mark Thompson and Mitch Dermer.
Read other articles from the Spring 2011 Letter of the Law:
Homeowner’s Insurance Policies and Environmental Remediation by David Perry
Overbuilt Quarry Avoids Environmental Assessment by David Perry
Waiving Your Claim Goodbye by Stephen Berezowskyj and Carmen Hamilton
Illness and Injury at the Construction Workplace by Barb Cornish and Debra Rusnak
Thinking of Contracting in the United States? by John Singleton
Editor's Note by David Perry
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