COURT OF APPEAL FOR ONTARIO

CITATION: McClatchie v. Rideau Lakes (Township), 2015 ONCA
    233

DATE: 20150409

DOCKET: C58477

Doherty, Rouleau and Watt JJ.A.

BETWEEN

David McClatchie and Victoria McClatchie

Plaintiffs (Respondents/

Appellants by way of cross-appeal)

and

The
    Corporation of the Township of Rideau Lakes, and

Allen
    Churchill by his Litigation Guardian Alma Churchill

and Alma Churchill

Defendant (Appellant/

Respondent by way of cross-appeal)

Joseph Y. Obagi, for the appellant/respondent by way of
    cross-appeal

Robert J. De Toni, for the respondents/appellants by way
    of cross-appeal

Heard: January 6, 2015

On appeal from the judgment of Justice Paul B. Kane of the
    Superior Court of Justice, dated February 5, 2014, with reasons reported at
    2014 ONSC 811.

Rouleau J.A.:

A.

Overview

[1]

In 2001, the respondents, David and Victoria McClatchie, bought Lot 16, a
    residential lakefront lot on the southern shore of Rideau Lake in eastern
    Ontario. Lot 16 is one of a series of lakefront properties created by
    subdivision plan 198 (Plan 198) from a portion of Lot 20, Concession 5,
    Township of South Elmsley, now Township of Rideau Lakes (Lot 20-5). Plan 198
    also created a 40-foot road allowance running between the balance of Lot 20-5
    and most of the lakefront properties, giving them access to a municipal road. However,
    no road has been built on the road allowance. Instead, the McClatchies and prior
    owners of Lot 16 have used a gravel road that cuts across Lot 20-5 for access. Lot
    20-5 and the road allowance are owned by the appellant, Allen Churchill.

[2]

This appeal relates to the McClatchies thus-far successful adverse
    possession claim over an L-shaped portion of the road allowance bordering Lot
    16, as well as an easement of necessity the trial judge found existed over the
    gravel road on Lot 20-5 that the McClatchies use for access. Mr. Churchill
    argues that the trial judge erred in finding the McClatchies had demonstrated
    the required ten-year period of adverse possession over the L-shaped portion of
    the road allowance. Specifically, the trial judge erred both in interpreting
    the documentary proof tendered at trial and in failing to consider whether
    adverse possession had been demonstrated over every part of the land claimed.
    In Mr. Churchills submission, the documents, properly interpreted, show that
    the ten-year period had been interrupted. Further, the evidence of adverse
    possession over certain parts of the L-shaped portion was weak or non-existent.
    Mr. Churchill also appeals the finding of an easement of necessity over the
    gravel road cutting across his property. For such an easement, necessity is
    assessed at the time the lot is created. He says that when Lot 16 was created
    by Plan 198 in 1922, the road allowance created by the same plan provided
    access, precluding an easement of necessity.

[3]

For the reasons that follow, I would allow the appeal in part. The trial
    judges conclusion that the McClatchies own the L-shaped portion of the road
    allowance by way of adverse possession was reasonable and supported by the
    evidence. This conclusion stands. But the trial judges other conclusion  that
    an easement of necessity existed over the gravel road on Lot 20-5  was
    incorrect in law and should be set aside. It is not necessary to address the McClatchies
    cross-appeal, which asks this court to remit part of the matter back to the
    trial judge to determine whether the gravel road is an access road under the
Road
    Access Act
, R.S.O. 1990, c. R.34. I would declare it to be an access road
    under that statute.

B.

Facts

[4]

In 1922, Plan 198 subdivided part of Lot 20-5 into 38 waterfront lots,
    one of which is Lot 16. Plan 198 also created a 40-foot road allowance running
    along the southern boundary of 23 of these lots. The portion of the road
    allowance that touches Lot 16 is L-shaped, as it forms the western and southern
    boundary of the lot: the road allowance starts just west of Lot 16, on the
    shore of Rideau Lake, then runs south along Lot 16s west side, then turns east
    at Lot 16s southwest corner, and then continues along the south side of Lots
    17 to 38, ending at the highway between Concessions 4 and 5. The other two
    boundaries of Lot 16 are the lake to the north and Lot 17 to the east. In an
    appendix to this judgment, I have included a portion of a plan prepared by a
    surveyor, Mr. Riddell, that depicts Lot 16 and this road allowance.

[5]

The L-shaped portion of the 40-foot road allowance on the west and south
    sides of Lot 16 is described as Part 1 of the Riddell plan. This L-shaped
    portion is the subject of the adverse possession appeal, and I will refer to it
    as Part R-1.

[6]

Lot 16s current owners, the McClatchies, purchased the lot in 2001 from
    Deborah Banford, who had previously owned it together with her now ex-husband,
    John Banford. Lot 20-5s current owner, Mr. Churchill, acquired the property in
    the 1980s.
[1]
Since that time, he has entered into written agreements with the various
    lakefront lot owners, permitting narrow use of his lands for an annual fee.
    Three such agreements between him and Lot 16s owners were tendered into
    evidence. At trial, it was an agreed fact that Mr. Churchill owned the 40-foot road
    allowance. It was also conceded that the McClatchies had a right-of-way over
    the road allowance, notwithstanding that this right-of-way had not been deeded
    to them.
[2]

[7]

The evidence established that the McClatchies and their predecessors in
    title have used Part R-1 in various ways. They have used portions of this space
    as a driveway and for a lawn or grassy area. The McClatchies built a concrete
    flower bed on one section of Part R-1. The house, garage and septic field for
    Lot 16 were built by the Banfords in 1983. The house is built entirely on Lot
    16, but a part of the garage encroaches on Part R-1. The septic system,
    consisting of a septic tank, septic pump and raised septic field, is located on
    Part R-1. In fact, the septic field encroaches slightly beyond Part R-1 onto
    Lot 20-5.

[8]

The evidence also established that, rather than using the 40-foot road
    allowance for access to the county road, the owners of Lots 16 to 38 have
    historically used several gravel roads that run across Lot 20-5. Since at least
    1980, the owners of Lot 16 have accessed their property using primarily a
    gravel road that cuts across Lot 20-5 and connects their property to the
    municipal road. This gravel road is described as Parts 4 and 5 of the Riddell
    plan (the portion of the plan included in the appendix shows only Part 4). I
    will refer to them as Parts R-4 and R-5.

C.

The law of adverse possession

[9]

Before turning to the trial judges decision and the issues raised by
    the appellant, I will briefly review the law of adverse possession. This law is
    not in dispute. To establish adverse possession of certain lands, a claimant
    must demonstrate that throughout the ten-year adverse possession period, he or
    she: a) had actual possession of the lands in question; b) had the intention of
    excluding the true owner from possession; and c) effectively excluded the true
    owner from possession:
Masidon Investments Ltd. v. Ham
(1984), 45 O.R.
    (2d) 563 (C.A.), at p. 567.

[10]

An
    adverse possession claim will fail unless the claimant meets each of the three
    criteria, and time will begin to run against the true owner of the lands only
    from the last date when all three are satisfied:
Masidon
, at p. 567.

[11]

To
    establish actual possession, the acts of possession must be open, notorious,
    peaceful, adverse, exclusive, actual and continuous:
Teis v. Ancaster
    (Town)
(1997), 35 O.R. (3d) 216 (C.A.), at p. 221. If any one of these
    elements is missing at any time during the statutory ten-year period, the claim
    for possessory title will fail:
Teis,
at p. 221.

[12]

If
    the claimant acknowledges the right of the true owner, then possession will not
    be adverse. Acknowledgment of title will thus stop the clock from running:
Teis
,
    at p. 221;
Goode v. Hudon
(2005), 30 R.P.R. (4th) 202 (Ont. S.C.), at
    para. 184;
1043 Bloor Inc. v. 1714104 Ontario Inc.
, 2013 ONCA 91, 114
    O.R. (3d) 241, at para. 73.
[3]
Legislation likewise makes this clear. Section 13 of the
Real Property
    Limitations Act
, R.S.O. 1990, c. L.15, provides that a written and signed
    acknowledgment of title to land resets the clock for an adverse possession
    claim over that land.

[13]

An
    agreement regarding one part of a property that the parties do not contemplate
    as applying to another part will not constitute an acknowledgement sufficient
    to interrupt adverse possession on that latter part:
Tasker v. Badgerow
,
    2007 CanLII 23362 4086 (Ont. S.C.), at paras. 47-49, affd on other grounds
    2008 ONCA 202.

D.

THE DECISION AT TRIAL

[14]

The
    trial judge granted the McClatchies ownership of Part R-1 by adverse possession
    pursuant to ss. 4 and 15 of the
Real Property Limitations Act
. He also
    found an easement of necessity over Parts R-4 and R-5.

(1)

The adverse possession claim

[15]

The
    apparent geographical boundaries of Lot 16 are larger than its legal
    boundaries. The testimony of several witnesses and various photos of the
    property taken over the years led the trial judge to make a factual finding
    that various tree lines, fences, and hedgerows created the impression that Lot
    16 included parts of Lot 20-5. Specifically, Lot 16 appeared to include the L-shaped
    Part R-1. Based in part on this evidence, the trial judge found that the
    McClatchies and their predecessors in title, the Banfords, had mistakenly
    believed they owned Part R-1.

[16]

Lot
    16 and the properties surrounding it, including Part R-1, were converted to the
    Land Titles system on December 22, 2008. The trial judge correctly determined
    that as a result, any claim for adverse possession had to be made out before
    this date. Pursuant to s. 51 of the
Land Titles Act
, R.S.O. 1990, c.
    L.5, no claim by adverse possession or prescription can be brought based on
    facts occurring after that conversion date.

[17]

The
    trial judge reviewed the evidence of Lot 16s visual boundaries and the various
    ways its owners had used Part R-1 over the years. He then concluded that the
    evidence established that the McClatchies and Banfords possession of Part R-1
    for the ten-year period preceding its conversion to Land Titles  that is, from
    1998 to 2008  was open, notorious, constant, continuous, peaceful and
    exclusive. The trial judge also concluded that their joint ten years of possession
    satisfied the inconsistent use requirement for adverse possession by knowing
    trespassers. The McClatchies had therefore proved adverse possession.
[4]
The trial judge went on to find, in the alternative, that the inconsistent use
    requirement was not applicable because there was a mutual mistake as to
    ownership of Part R-1.

(2)

The agreements between the Churchills and the owners of Lot 16

[18]

The
    Churchills and the owners of Lot 16 entered into three written agreements from
    1988 to 2002. According to Mr. Churchill, these agreements interrupted the
    running of any adverse possession claims. The trial judge disagreed. The
    agreements and their relevant parts are as follows:

1.

An agreement signed by the Banfords in October 1988, stating as follows:

This is an agreement whereby Allen and Helen Churchill, owners
    of the road allowance and land immediately to the south and west of Lot 16,
    shown on registered Plan 198 in the Township of South Elmsley, and owned by
    John and Debbie Banford, give permission to John and Debbie Banford to use said
    road allowance for casual and incidental purposes (access, parking, lawn), for
    the sum of one dollar annually.

2.

An agreement dated September 1998 and signed by Mrs. Banford, then the sole
    owner of Lot 16, providing as follows:

This is an agreement whereby Allen and Helen Churchill, owners
    of land immediately to the west and south of lot 16, shown on registered plan
    198, part of lot 20, in the township of South Elmsley, within the new township
    of Rideau Lakes, Ontario, and owned by Debbie Banford, give permission to
    Debbie Banford to use said Churchill land for the purposes of access, parking,
    and lawn (but not for buildings, fences, etc[.]), for the sum of one dollar
    annually. This permit may be terminated by either party upon one months
    notice.

3.

An agreement signed by the McClatchies in June 2002, providing as
    follows:

This is an agreement whereby Allen D. and Helen Churchill,
    owners of the land immediately to the south of the public road allowance
    running adjacent to the south side of Lot 16, shown on registered plan no. 198,
    Lot 20, Concession 5 of the geographic Township of Rideau Lakes in the Province
    of Ontario, do hereby give permission to David and Victoria McClatchie, owners
    of Lot 16, to use said Churchill land, that part shown roughly as a triangle on
    the survey plan, drawing #99034J02.DWG, of John Goltz, surveyor, for the
    purposes of travel, parking, and  lawn (but not for erecting buildings or
    fences, or laying asphalt, etc[.]), and this for the sum of $100.00 annually.
    This permit may be terminated by either party upon one months notice.

[19]

The
    Banfords paid the annual $1 fee each year from 1988 to 2001. The McClatchies
    paid the $100 fee only in 2002 and refused to pay after that.

[20]

The
    trial judge highlighted several features of these agreements. One such feature
    was that there was a change in their wording, both as to what the Churchills
    owned and what the owners of Lot 16 had permission to use. The 1988 document
    states that the Churchills are owners of the road allowance and land
    immediately to the south and west of Lot 16 and allows the Banfords to use the
    said road allowance. The 1998 document states that the Churchills are owners
    of land immediately to the west and south of lot 16 without mention of the
    road allowance. It purports to allow the Banfords to use the said Churchill
    land rather than allowing use of the road allowance. The 2002 document is
    quite different. It states that the Churchills are owners of land immediately
    to the south of the public road allowance running adjacent to the south side of
    Lot 16 and it allows the McClatchies to use said Churchill land.

[21]

The
    trial judge found that the absence of a specific reference to the road
    allowance in the 1998 agreement was intentional, the reference having been
    dropped from the 1988 version. The absence of a reference to the road allowance
    reflected the belief, then held by both the Churchills and Banfords, that the
    township owned the road allowance. Therefore, the 1998 agreement did not
    purport to cover the Banfords use of Part R-1; it was not an acknowledgment of
    Mr. Churchills title to Part R-1 and so did not interrupt the running of the
    adverse possession claim over it. Rather, the 1998 document marked the
    beginning of the running of the adverse possession claim.

[22]

As
    I will explain, the central issue on appeal is whether the trial judge erred in
    his interpretation of the 1998 document.

[23]

The
    trial judges finding that, in 1998, the Churchills did not believe they owned Part
    R-1 also provided part of the basis for the trial judges alternative finding
    that there was a mutual mistake as to the ownership of Part R-1.

(3)

The exchange of letters between counsel

[24]

Mr.
    Churchill also argues on appeal that an exchange of letters between his counsel
    and counsel for the McClatchies broke the chain of adverse possession. The
    first letter was sent by counsel for the McClatchies in April 2004, in the hope
    of regularizing the status of the road allowance. Counsel for Mr. Churchill
    responded in September 2007 on a without prejudice basis. The trial judge
    found that these were exploratory settlement offers and hence privileged. The
    trial judge further found that even if the letters were not privileged, they
    did not contain any acknowledgment of Mr. Churchills title sufficient to
    interrupt the running of the prescription period.

(4)

Access to Lot 16

[25]

As
    mentioned, no road has ever been built on the 40-foot road allowance created by
    Plan 198. At trial, no evidence was led regarding how Lot 16 was accessed prior
    to 1980. The evidence as to access to Lot 16 from 1980 to 2008 was that the
    gravel road over Parts R-4 and R-5 was used and that, on occasion, Mr. Banford had
    used an alternate road to access his lot, a road that ran partly over the road
    allowance.

[26]

The
    trial judge found that the 40-foot road allowance could never have been used to
    access Lot 16 in part because a rock bluff along the road allowance prevented
    any passage at that point. He also found that parts of the road allowance
    distant from Lots 16 had been sold by the Churchills, which made it impossible
    for the owners of Lot 16 to use the road allowance to access their property. Additionally,
    he noted that the conveyances of Lot 16 and other lots adjacent to the road
    allowance included rights-of-way over internal roads on Lot 20-5. He reasoned
    that these rights-of-way would not have been necessary if the road allowance actually
    provided access to these lots. Also, Mr. Churchill repeatedly admitted on examination
    for discovery that the gravel road over Parts R-4 and R-5 provided the only
    access to Lot 16.

[27]

As
    a result, the trial judge concluded that an easement of necessity was created
    over Parts R-4 and R-5.

E.

Issues on appeal

[28]

The
    issues raised on appeal are as follows:

1.

Did the trial judge err in finding that the McClatchies and Banfords had
    extended their use and occupation over the whole of Part R-1?

2.

Did the trial judge err in finding that the period of adverse possession
    had not been interrupted by the September 1998 agreement or the September 2007
    letter sent by Mr. Churchills lawyer?

3.

Did the trial judge err in finding an easement of necessity over Parts R-4
    and R‑5?

4.

If the trial judge did err in finding an easement of necessity, should
    the McClatchies cross-appeal be granted so that the trial judge can determine
    whether Parts R-4 and R-5 constitute an access road under the
Road Access
    Act
?

F.

analysis

(1)

Did the Banfords and McClatchies exercise exclusive use and occupation
    over all of Part R-1?

[29]

Mr.
    Churchill submits that while the McClatchies may have exercised possession over
    all of Part R-1, the evidence was clear that their predecessors in title had not.
    Specifically, Mr. Churchill argues as follows:

1.

The evidence of Mrs. Banford did not establish that she had maintained
    the easterly or grassy portion of Part R-1, nor was it clear that she had ever
    maintained the westerly portion of Part R-1 beyond the area around the septic
    tank;

2.

The evidence of Mrs. McClatchie confirmed that the property was not
    being maintained for a year or two prior to the McClatchies viewing of the
    property in 2001;

3.

The location of the septic field was not apparent and obvious so as to
    constitute an open and notorious use; and

4.

The trial judge erred in using the construction of a concrete flower bed
    by the McClatchies as justification for adverse possession of a portion of Part
    R-1, because it was built well into the ten-year adverse possession period.

[30]

I
    would not give effect to these submissions. All of the trial judges findings
    are supported by the evidence led at trial and provide a solid basis for his
    conclusion that the whole of Part R-1 was occupied and used to the exclusion of
    the Churchills.

[31]

The
    trial judge found, at para. 55, that a line of trees and hedges were visual
    indicators  [that] led Mr. and Mrs. McClatchie to believe that what they were
    buying included  R-1. He also found, at para. 57, that [t]he Banfords and
    the McClatchies mistakenly believed they were buying a lot with a distinctive
    visual outline. Both couples indicated Mr. Churchill did not use what they
    understood to be the land they thought they had purchased, including R-1.

[32]

The
    trial judge explained as follows, at para. 56:

[T]hroughout their ownership, the Banfords and the McClatchies
    openly occupied and used Part R-1. They cleared snow as required over their
    driveway. They maintained the lawns and flower beds on this land. Mr.
    McClatchie constructed a concrete flower bed on the southwest portion of R-1. The
    raised septic field, septic and septic tank cover on Part R-1 are apparent and
    obvious to anyone. They appear to be part of the land associated with this
    home.

[33]

In
    addition, the trial judge found confirmation for the evidence of the Banfords
    and McClatchies in the photographs that were tendered in evidence. These
    photographs clearly suggested that Part R-1 was part of Lot 16.

[34]

After
    setting out the uses that the Banfords and McClatchies had made of Part R-1,
    the trial judge went on to find, at para. 59, that the nature, extent and
    presence of these elements, together with the location of the overhang of the
    garage, prevented any other use by Mr. Churchill and constituted obvious,
    continuous possession by the dominant owner of Lot 16.

[35]

Absent
    palpable and overriding error, these findings of fact are owed deference. The
    trial judge was in the best position to assess the evidence, including the
    evidence tendered by Mrs. McClatchie and Mrs. Banford as to the maintenance of
    the property. The trial judge did not, as suggested by Mr. Churchill, rely on
    the construction of the flower bed to establish adverse possession. Rather, the
    construction of the flower bed by the McClatchies was simply one of many
    indicators that the owners of Lot 16 believed this property included all of Part
    R-1 and acted in a manner consistent with this belief.

[36]

In
    assessing the evidence of the various witnesses, the trial judge had the
    benefit of seeing the witnesses point to various parts of the plan and
    photographs referred to and entered in evidence. This advantage simply
    reinforces the importance of the deference that is owed to the trial judge on his
    findings of fact.

(2)

Did the September 1998 agreement or the September 2007 letter interrupt
    the period of adverse possession?

[37]

The
    interpretation of the September 1998 agreement between the Churchills and Mrs.
    Banford, as sole owner of Lot 16, is the main issue on appeal. Specifically,
    the issue is whether the reference in 1998 to land immediately to the west and
    south of lot 16 owned by the Churchills was understood by the signatories to
    include the road allowance. The trial judge determined it was not.

[38]

Mr.
    Churchill argues that the trial judge erred in his interpretation of the 1998
    agreement. He maintains that the agreement is clear and unambiguous. It is an acknowledgement
    that the Churchills own the land immediately to the west and south of lot 16.
    Any confusion that may have existed at the time as to whether the Churchills or
    the township owned the road allowance was eliminated prior to trial. By the
    date of trial, it was clear that Mr. Churchill owned the road allowance, including
    Part R-1; the September 1998 agreement should be read consistent with this
    fact. The 1998 agreement constitutes, therefore, an acknowledgment by Mrs. Banford
    of the Churchills title to all of the land to the south and west of Lot 16,
    including Part R-1.

[39]

I
    would not give effect to this submission. Agreements are not interpreted in a
    vacuum. As explained in
Sattva Capital Corp. v. Creston Moly Corp.
,
    2014 SCC 53, [2014] 2 S.C.R. 633, at para. 47, the overriding concern in
    interpreting contracts is to determine the parties intent and the scope of
    their understanding. To do so, a judge must read the contract as a whole and
    give the words used their ordinary and grammatical meaning, consistent with the
    surrounding circumstances known to the parties at the time of the contracts formation.
    The 1988 and 2002 documents provide some context and are of assistance in
    interpreting the words used in the 1998 document.

[40]

The
    issue the trial judge had to resolve in this case was what the parties to the
    agreement understood to be the land that the Churchills owned. In other words,
    did the parties, when they entered into the 1998 agreement, believe that the Churchills
    owned Part R-1, the road allowance, and that the Churchills were granting
    permission to Mrs. Banford to use it as well as Lot 20-5? Or, did the parties
    believe the township owned Part R-1?

[41]

If
    the former were true, the running of the adverse possession claim would be
    interrupted from the time the 1998 document was signed until 2001, when the
    McClatchies purchased the property. In other words, the claim would fail. But if
    the latter were true, the acknowledgement would not cover Part R-1. In that
    latter case, the 1998 agreement should be read as giving Mrs. Banford
    permission to use parts of Lot 20-5, including Parts R-4 and R-5, to access her
    property, but as having no application to Part R-1. This is what the trial
    judge found.

[42]

In
    interpreting the 1998 agreement, the trial judge correctly read it and interpreted
    its terms in context, taking into account the document as a whole as well as
    the relevant background and circumstances. He applied the principles of
    contractual interpretation to the words of the written contract, considered in
    the light of the factual matrix. As explained in
Sattva
, this is a
    question of mixed fact and law, and the standard of review of the trial judges
    findings is thus palpable and overriding error, unless the appellant can point
    to an extricable error of law:
Sattva
, at paras. 50-55.

[43]

As
    discussed, the trial judge interpreted the words land immediately to the west and
    south of lot 16 in the 1998 agreement as referring to the lands immediately to
    the west and south of the road allowance. He concluded that, when the 1998
    agreement was entered into, the Churchills understanding of who owned the road
    allowance had changed from their belief in 1988 that they owned the road
    allowance. By 1998, the Churchills had come to believe that the township owned
    the road allowance. This finding by the trial judge is supported by the evidence
    tendered at trial. Support for the finding that the Churchills belief
    regarding ownership of the road allowance had changed includes the following:

1.

During Mr. Churchills testimony, as read in from his discovery
    transcript, he stated that this whole [ownership] thing was in flux for a
    while because we werent sure what that road allowance up there consisted of or
    who it was owned by. He did not know whether he was equally uncertain about
    these matters when he purchased Lot 20-5 in 1980;

2.

The 1988 agreement stated that the Churchills owned the road allowance;

3.

During Mr. Churchills testimony, as read in from his discovery
    transcript, he said he got the Banfords to sign the 1988 agreement because the
    question of the ownership of the total road allowance over here, the 40-foot
    road allowance, was being talked about and people were building on it. And the
    question was: Did it belong to the municipality or did it belong to the buyers
    or did it belong to [the owner of Lot 20-5]?;

4.

Mr. McClatchie testified that Mr. Churchill had described the road
    allowance in November 2001 as a municipal road allowance;

5.

The 2002 agreement referred to the Churchills as being the owners of the
    land immediately to the south of the public road allowance running adjacent to
    the south side of Lot 16;

6.

In
Churchill v. Irvine
(23 May 2007), Perth, 3085/96 (Ont.
    S.C.), a May 23, 2007, trial decision in a claim Mr. Churchill had brought against
    the owners of Lot 18 on Plan 198, Pedlar J. noted in his reasons that [t]hrough
    extensive investigation and research between the parties and various lawyers for
    the Municipality, it has been agreed that the Municipality owns  the 40-foot
    road allowance; and

7.

In a summary judgment motion brought by the township earlier in this
    proceeding, in which the township denied owning the road allowance, Mr. Churchill
    did not take the position that he owned the road allowance. He took no position
    and left ownership to be determined by the court. The motion judge concluded
    that the township did not own the road allowance and dismissed the McClatchies
    adverse possession action against it.

[44]

From
    the foregoing, it is clear that in 1988 Mr. Churchill believed he owned the
    road allowance, and that sometime between 1988 and 2002 he came to believe he
    did not own the road allowance. Precisely when that belief changed is a factual
    issue. The trial judges finding that it had changed prior to or at the time of
    the signing of the 1998 agreement finds support on the record and is owed
    deference. After considering all of the evidence, the trial judge drew the
    following conclusion, at paras. 89, 91, and 124-25:

Mr. Churchill, knowing the importance of obtaining written
    acknowledgement of his title in order to defeat adverse possession and his
    experience in preparing and getting these contracts signed, must in preparing
    [the 1998 document] have dropped his previous reference to the Road Allowance
    because of his recognition or belief, as later acknowledged before Pedlar J.,
    and contained a similar contract he later obtained from [the McClatchies], that
    the Road Allowance was owned by the Township and not by himself.

What in fact was occurring was the evolution of Mr. Churchills
    knowledge over some 20 years in relation to the Road Allowance and his belief
    that the Township owned it. That is why the wording of these contracts begins
    in 1988, with the statement that he and his wife owned the Road Allowance, then
    to the deletion of that statement in 1998 contract and then finally the open
    admission in the 2002 contract that his ownership begins to the south of the Road
    Allowance.

Mr. Churchill has a Phd. and was well versed in the issues
    regarding his lands and the waterfront owners. He did not simply forget to
    include reference to the Road Allowance in [the 1998 document]. ...

[Mr. Churchill] has now twice in two actions appeared in court
    and taken the position that he does not own the Road Allowance or he took no
    ownership position as to it. These factors combined with the ambiguity
    indicated above in [the 1998 document] must be read against his drafting of
    such document and leads me to conclude that Mr. Churchill had given up any
    claim of ownership to the Road Allowance by September 14, 1998.

[45]

Although
    one could reach a different conclusion on the record, I am unable to say that
    the trial judges finding of fact is palpably wrong.

[46]

As
    to the September 2007 letter sent by Mr. Churchills lawyer, that letter is
    directed to the issue of the prescriptive easement over Parts R-4 and R-5. It
    was written shortly after Pedlar J.s judgment in
Irvine
, where it is
    stated that the road allowance, Part R-1, was owned by the township. As a result,
    I agree with the McClatchies that the letter was not intended to protest the
    McClatchies use of Part R-1.

(3)

Did an easement of necessity exist over Parts R-4 and R-5?

[47]

At
    trial, the McClatchies abandoned any claim for an easement by prescription over
    Parts R-4 and R-5. The only claims they advanced with respect to Parts R-4 and
    R-5 were an easement of necessity and equitable proprietary estoppel. The claim
    for equitable proprietary estoppel was rejected by the trial judge, and that
    finding is not challenged on appeal. The trial judge did, however, find an
    easement of necessity. The appellant submits the trial judge erred in so doing.

[48]

Easements
    of necessity are easements presumed to have been granted when the land that is
    sold is inaccessible except by passing over adjoining land retained by the
    grantor. The concept arises from the premise that the easement is an implied
    grant allowing the purchaser to access the purchased lot. See
Nelson v. 1153696
    Alberta Ltd.
, 2011 ABCA 203, 46 Alta. L.R. (5th) 113, at paras. 40-43,
    leave to appeal to S.C.C. refused, [2011] S.C.C.A. No. 423; and
Dobson v.
    Tulloch
(1994), 17 O.R. (3d) 533 (C.J. (Gen. Div.)), affd (1997), 33 O.R.
    (3d) 800 (C.A.).

[49]

Necessity
    is assessed at the time of the original grant:
Nelson
, at para. 42;
Dobson
,
    at p. 541. In the present case, it is obvious from the 1922 subdivision plan,
    Plan 198, that access to Lot 16 was to be along the 40-foot wide road allowance
    the plan created. Although the deed to Lot 16 does not contain mention of a
    right-of-way along the road allowance, Mr. Churchill has conceded that the
    McClatchies have this right.

[50]

The
    trial judge rejected the argument that an easement of necessity did not arise
    because access to Lot 16 was assured at the outset by Plan 198s creation of
    the 40-foot road allowance. He found that the road allowance never provided
    access to Lot 16 because a rock bluff located on the road allowance prevented
    passage at that point. As discussed, he found support for this conclusion in various
    other facts, including Mr. Churchills admissions on discovery and his creation
    of rights-of-way over Lot 20-5 to access some of the lakefront lots along this
    same stretch of the 40-foot road allowance. Finally, the trial judge concluded
    that necessity was established because Mr. Churchill no longer owned parts of
    the road allowance. This prevented owners of Lot 16 from having a right to pass
    over the full length of the allowance to access the public road.

[51]

Mr.
    Churchill submits that the trial judges findings reflect a misunderstanding of
    the law and a misapprehension of the evidence. I agree.

[52]

Whether
    Mr. Churchill decided to create rights-of-way over his property is irrelevant
    to the issue of whether necessity existed at the time of the original grant. It
    is clear that in 1922, the road allowance gave the owner of Lot 16 a legal
    route, if not an actual route, to access the property. By including a road
    allowance in Plan 198, the grantors made sure that Lot 16 was not landlocked in
    the legal sense of the term, thereby avoiding the creation of an easement of necessity.

[53]

The
    fact that the owners of Lots 16 to 38 have long preferred to drive over Lot
    20-5 and may have found it quicker and more convenient than navigating the road
    allowance does not prove necessity in 1922. One of the prerequisites for an
    easement of necessity is that it must be necessary to use or access the
    property; if access without it is merely inconvenient, the easement will not be
    implied:
Nelson
, at para. 38.

[54]

On
    appeal, the McClatchies argue that although Lot 16 was created by Plan 198 in
    1922, it may not have been in fact sold until 1954. As a result, they submit
    that necessity should be assessed as of that later date. I would not give
    effect to that submission because, even if the McClatchies are correct, it does
    not change the outcome. The McClatchies bear the onus of proving necessity, but
    they led no evidence suggesting that anything had changed between the
    registration of the plan in 1922 and 1954.

[55]

With
    respect to the trial judges finding that necessity was established because of
    a rock bluff preventing passage over the road allowance, I agree with Mr. Churchills
    submission that no evidence was led at trial establishing that the rock bluff was
    located on the road allowance. The McClatchies own surveyor testified that he
    did not know where the rock bluff was located in relation to the road allowance.
    Moreover, he testified that he suspected the bluff had resulted from excavation
    and was not natural; this implies it may not have existed in 1922 or 1954.

[56]

In
    my view, the trial judge also erred in relying on the fact that Mr. Churchill
    no longer owned parts of the road allowance to prove necessity. As explained,
    necessity is assessed at the time of the grant. Subsequent sales of sections of
    the road allowance have no impact on this assessment. Further, it was not the
    McClatchies position that using the road allowance to access their lot was
    impossible because Mr. Churchill no longer owned parts of it. Mr. Churchills
    ownership of the road allowance was an admitted fact and, as a result, evidence
    of ownership of the road allowance was not an issue at trial. The trial judge
    ought not to have disregarded the admission of the parties and made findings
    contrary to these admitted facts.

(4)

Should the trial judge determine whether Parts R-4 and R-5 are an access
    road?

[57]

With
    respect to the McClatchies cross-appeal, Mr. Churchill concedes that the
    gravel road, Parts R-4 and R-5, constitutes an access road under the
Road
    Access Act
. Since the road meets the definition of an access road under
    s. 1 of that statute, I would declare it to be an access road. Therefore, I do
    not need to deal with the cross-appeal.

G.

DISPOSITION

[58]

As
    a result, I would allow the appeal with respect to the finding of an easement of
    necessity and set aside the trial judges order on this issue. I would dismiss Mr.
    Churchills appeal in all other respects. I would also declare Parts R‑4
    and R-5 to be an access road under the
Road Access Act
.

[59]

If
    the parties are unable to agree on costs, I would ask the appellant to submit
    brief written submissions not exceeding three pages in length within 15 days of
    the release of this decision, and the respondents to provide their response
    within 15 days thereafter, also not exceeding three pages in length.

Released: April 9, 2015

(DD)                                                                      Paul
    Rouleau J.A.

I
    agree Doherty J.A.

I
    agree David Watt J.A.

Appendix A: Lot 16 as shown on the Riddell plan

[1]
It seems that Mr. Churchills wife, Helen Churchill, also had an interest in
    Lot 20-5 for at least a period of time. The property was conveyed in parts,
    with a 1980 conveyance to both Churchills, and a 1986 conveyance of most but
    not all of the remaining portion of Lot 20-5 to only Mr. Churchill. Three
    agreements between Mr. Churchill and Lot 16s owners refer to both Churchills
    as owners of the land to the south and west of Lot 16. Nonetheless, the matter
    proceeded with Mr. Churchill as owner of the Lot 20-5 lands at issue, as
    admitted by the parties subject to the McClatchies adverse possession claim.

[2]

The 2001 conveyance of Lot 16 to the McClatchies included a
    right-of-way over only a small portion of the road allowance.

[3]

1043 Bloor Inc.
involved a prescriptive easement claim and not an adverse
    possession claim. The principle, however, is the same: an acknowledgment of
    title will stop the clock from running for claimants seeking to prove a right
    based on prescription (at para. 73).

[4]
Although the trial judge found adverse possession over Part R-1, he found that
    the septic fields slight encroachment past Part R-1, onto Lot 20-5, did not
    form part of the area of adverse possession. He therefore ordered it removed,
    and no appeal is taken from this part of the judgment.


COURT OF APPEAL FOR ONTARIO

CITATION: Morgan v.
    Vitran Express Canada Inc., 2015 ONCA 293

DATE: 20150430

DOCKET: C58007

Hoy A.C.J.O., Watt and Brown JJ.A.

BETWEEN

Dunstan Morgan

Plaintiff
(Respondent)

and

Vitran Express Canada Inc.

Defendant
(Appellant)

Thomas A. Stefanik, for the appellant

Christine Davies, for the respondent

Heard: April 13, 2015

On appeal from the judgment of Justice Darla A. Wilson of
    the Superior Court of Justice, dated November 5, 2013, with reasons reported at
    2013 ONSC 6835.

By the Court:

Overview

[1]

The appellant, Vitran Express Canada Inc., employed the respondent,
    Dunstan Morgan, as a dock supervisor for almost 25 years. In September, 2010,
    Vitran changed Morgans job from dock supervisor to freight analyst, a
    position created specifically for Morgan who took the position that Vitrans
    action constituted constructive dismissal, and he commenced this action. By
    Judgment dated November 5, 2013, the trial judge ordered Vitran to pay Morgan
    damages in the amount of $80,911.88. The trial judge concluded that Morgan had
    been constructively dismissed from his position as dock supervisor at Vitran,
    and she held that Morgan was not obliged to continue working for Vitran in
    order to mitigate his damages. Vitran appeals, submitting that the trial judge
    erred in reaching both conclusions.

Constructive dismissal

[2]

On the issue of constructive dismissal, the trial judge applied what was
    then the leading case on the issue,
Farber v. Royal Trust Co.
, [1997]
    1 S.C.R. 846. After the trial judge granted judgment, the Supreme Court of
    Canada re-visited the law of constructive dismissal in
Potter v. New
    Brunswick Legal Aid Services Commission
, 2015 SCC 10, and identified a two-branch
    test for constructive dismissal. Under the first branch, the court must
    identify an express or implied contract term that has been breached and then
    determine whether that breach substantially altered an essential term of the
    contract. Under the second branch, the court must consider whether the conduct
    of the employer, when viewed in the light of all the circumstances, would lead
    a reasonable person to conclude that the employer no longer intended to be
    bound by the terms of the contract. In
Potter
the Supreme Court of
    Canada stated, at paras. 36 and 42, that these two tests for constructive
    dismissal were not a departure from the approach adopted in
Farber
,
    which the trial judge applied. Accordingly, the trial judge applied the correct
    legal principles.

[3]

In support of its position that the trial judge erred in finding that
    Vitran had constructively dismissed Morgan, the appellant advances two main
    arguments.

[4]

First, Vitran submits that the evidence does not support the trial
    judges finding that the terms of Morgans employment had been altered in a
    substantial way. We see no merit in this submission.

[5]

The evidence supported the trial judges finding that by requiring
    Morgan to work as a freight analyst, Vitran had unilaterally altered the
    essential terms his employment contract in a substantial way. Although in para.
    81 of her reasons the trial judge incorrectly stated that as dock supervisor
    Morgan had supervised 22 men on the dock, at para. 5 she correctly noted that
    Morgan had shared that responsibility with other dock supervisors. At para. 84
    of her reasons, the trial judge found that the new position of freight analyst
    was a job that had been created checking on 2 part-time workers, a position of
    less importance and prestige with very little supervisory function and little
    opportunity to make decisions and exercise discretion. That finding was
    supported by the evidence, and it alone justified the trial judges conclusion
    that Vitran had altered the essential terms of Morgans employment in a substantial
    way.

[6]

Second, Vitran submits that the trial judge erred in her analysis of the
    constructive dismissal issue by taking into account evidence about its
    treatment of Morgan in the period prior to his September, 2010 transfer to the
    position of freight analyst.  To the extent that the trial judge did so, she did
    not err. She was entitled to consider whether Vitrans conduct, in light of the
    circumstances and viewed objectively, would lead a reasonable person to
    conclude that the employer no longer intended to be bound by the terms of the
    contract. See,
Potter
, at paras. 42 and 164.

[7]

Further, Vitran submits that the trial judge failed to follow the
    decision of this court in
Mifsud v. MacMillan Bathurst Inc.
(1989), 70
    O.R. (2d) 701 (C.A.). Specifically, Vitran argues that in
Mifsud
this
    court observed that a finding of demotion was itself not determinative of the
    issue of constructive dismissal, but the court would have to ascertain whether
    the employment contract contained an implied term that, if the employer validly
    considered the employees performance to be unsatisfactory, it could demote him
    to a position of lesser responsibility without his consent.

[8]

It must be recalled that
Mifsud
was decided over 25 years ago. Since
    then the Supreme Court of Canada has addressed the issue of constructive
    dismissal in its decisions in
Farber
and
Potter
. In both
    decisions, the Supreme Court of Canada stated that a demotion is a substantial
    change to the essential terms of an employment contract which could warrant a
    finding of constructive dismissal: see,
Farber
, at paras. 36 and 46;
Potter
,
    at paras. 37 and 38. In any event, the trial judges finding that Vitran had
    not demonstrated that Morgan was incapable of performing his job as dock
    supervisor directly addressed whether Vitran could rely on any such implied
    term of its employment contract with Morgan to demote him.

[9]

In sum, we see no error in the trial judges conclusion that Vitran had
    constructively dismissed Morgan.

Mitigation

[10]

Vitran
    submits that it had established at trial that a reasonable person in Morgans
    situation would have accepted the chance to continue working at the company as
    a freight analyst, with the result that the trial judge had erred in concluding
    that Morgan was not obliged to take up the freight analyst position to mitigate
    his damages from the constructive dismissal. Vitran argues that the trial judge
    erred in finding that Morgan was subject to an unfriendly work environment,
    reached her conclusion in the absence of evidence from other Vitran employees
    about how they would view Morgans new position as a freight analyst, and erred
    in finding that Morgans personal relationships with several of his superiors,
    Messrs. Graham, Ferguson and Kahn, were acrimonious.

[11]

In
    her reasons, the trial judge referred to the governing legal authorities,
    including
Evans v. Teamsters Local Union No. 31
, 2008 SCC 20, [2008] 1
    S.C.R. 661, and to the principles enunciated in those cases regarding the
    circumstances in which a dismissed employees obligation to mitigate damages
    must be met by returning to work for the same employer. See, in particular,
Evans,
at para. 30.

[12]

The
    trial judge considered and applied those principles to the facts before her.
    She reviewed the pertinent evidence, the positions of the parties and the
    factors weighing in favour of and against the conclusion that Morgans decision
    not to return to work was reasonable. The trial judge made the following
    critical findings of fact:

(i)

The work environment at Vitran was unfriendly;

(ii)

The work Morgan was offered as a freight analyst was of lesser
    importance than his job as a dock supervisor;

(iii)

By accepting the freight analyst position, Morgan would have suffered a
    loss of dignity in the eyes of the dock workers he used to supervise. The
    freight analyst position had not been posted, so other employees would have
    known it was a position created specifically for Morgan because of his
    perceived ineptitude and would have been viewed as a demotion by other
    employees;

(iv)

Morgan had been treated in an unacceptable manner by his employer in the
    period leading up to his constructive dismissal; and,

(v)

Morgans personal relationships with his supervisors were acrimonious in
    the sense that no matter what Morgan did, they continued to criticize him.

[13]

These
    factual findings, some of which were credibility-based, were open to the trial
    judge to make on the record before her and they attract deference from this
    court. The trial judge heard from two Vitran witnesses: Robert Graham and Heidi
    Saccucci. She did not find Graham to be an impressive witness, and she attached
    little weight to Saccuccis evidence. The trial judge gave cogent reasons for
    reaching those conclusions. Her reasons demonstrate that she considered the
    factors relevant to the assessment of the reasonableness of Morgans decision
    not to continue with Vitran as a freight analyst, and it was for the trial
    judge to determine the weight to be assigned to those factors.

[14]

Finally,
    Vitran submits that it was not open to the trial judge to conclude that a
    reasonable person in Morgans position would not have accepted the employers
    offer of the freight analyst position in the absence of hearing evidence from
    other Vitran employees about how they would have viewed Morgans transfer from
    dock supervisor to freight analyst. We see no merit in this submission. Having
    considered the evidence of the nature and conditions of Morgans employment,
    the work atmosphere, his treatment over the years by his supervisors, and the
    nature of the newly-created position of freight analyst, it was open to the
    trial judge to conclude, in all the circumstances, that Vitran had not met the
    objective test of demonstrating that a reasonable person in Morgans position
    would have accepted its offer.

[15]

Accordingly,
    we see no basis for appellate interference with the trial judges ruling that
    in the circumstances, and viewed objectively, it was reasonable for Morgan to
    reject Vitrans offer of the new position of freight analyst in mitigation of
    his damages.

Disposition

[16]

For
    these reasons, the appeal is dismissed, and Vitran shall pay Morgan costs in
    the amount of $7,500, inclusive of HST and disbursements.

Released: April 30, 2015 (A.H.)

Alexandra Hoy A.C.J.O.

David
    Watt J.A.

David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Motion Industries (Canada) Inc. v. McCarthy, 2015
    ONCA 224

DATE: 20150407

DOCKET: C58619

Sharpe, Pepall and van Rensburg JJ.A.

BETWEEN

Motion Industries (Canada) Inc.

Appellant/Defendant

and

Kerry McCarthy

Respondent/Plaintiff

Daniel McDonald and Rahool Agarwal, for the appellant

Eric O. Gionet, for the respondent

Heard and released orally: March 27, 2015

On appeal from the order of Justice Martin S. James of
    the Superior Court of Justice, dated March 12, 2014.

ENDORSEMENT

[1]

The appellant employer appeals the decision of the trial judge finding
    that it constructively dismissed the respondent and awarding substantial
    damages for wrongful dismissal.

[2]

The appellant raises four issues:

1) The trial judge
    inappropriately used judicial notice in relation to certain economic facts when
    finding that the respondent was constructively dismissed;

2) The trial judge
    erred by failing to find the respondent was obliged to accept the recall
    proposal as part of his duty to mitigate;

3) The notice period
    of 16 months was unreasonable; and

4) The trial judge erred
    in his determination of the respondents date of termination on account of the
Employment
    Standards Act, 2000
,

S.O. 2000, c. 41,
s. 56.

[3]

For the following reasons the appeal is dismissed:

1. Judicial Notice

[4]

The appellants submission on this issue focuses on para. 59 of the
    trial judges reasons which states as follows,

In my view the defendant was obliged
    to recall the plaintiff to a position similar to the work he had been
    performing before the lay-off went into effect. I accept the plaintiff's
    evidence that he was prepared to return to the same position even though there
    were no orders on the books at that time. It is reasonable that he assessed the
    prospects for new orders as fairly good. The commission structure was
    sufficiently generous that it was worth the risk.
The mining industry is
    notoriously cyclical and a bet that the demand for drill rigs would resume was
    not foolishly speculative. Mining companies and the businesses that service
    them in northern Ontario have experienced significant swings in demand and
    prices over many decades. Cyclicality is a way of life in the mining sector.

[5]

We do not accept the argument that the trial judges findings in this
    passage, in relation to the implications of the cyclical nature of the mining
    industry, rest upon an inappropriate use of judicial notice.

[6]

First, the trial judges comments as to the cyclical nature of the
    mining industry were made in the context of his assessment of the respondent
    plaintiffs response to the position he was offered by the appellant. The
    respondent had worked for several years on a commission basis, and he had seen
    wide fluctuations in his income which was entirely dependent on the BOAR04 account.
    The respondent had assumed major responsibility for all aspects of that
    account. He had reached the point where the management of that account was the
    essence of his job. His position with the appellant was defined by that
    responsibility.

[7]

In our view, the reference made by the trial judge to the cyclical
    nature of the mining industry was essentially a recognition that the
    respondents position entailed a risk, and that the respondent was prepared to
    accept that risk. The trial judge found as a fact, that the appellant had made
    a clear determination to remove the BOAR04 account from the respondent. There
    was evidence in the record to support the trial judges finding that the
    respondent was prepared to return to that position, despite the uncertainty in
    the market at the time of his recall. The reference to the cyclical nature of
    the mining industry was merely background to the trial judges finding that the
    respondent was in effect prepared to assume the risk his former position had
    entailed, and to forego the certainty of the steady but significantly lower
    income the appellants offer would have afforded him.

[8]

Second, in any event, there was evidence in this record to support a
    finding that the mining industry was indeed cyclical. The volume in the BOAR04
    account had risen and fallen dramatically. That rise had yielded huge
    commissions for the respondent and the fall had resulted in him accepting a
    temporary lay-off. There was clear evidence that the BOAR04 account was showing
    signs of life at the time the appellant decided to remove it from the
    responsibility of the respondent.

[9]

We add here that these findings are sufficient to satisfy the test for
    constructive dismissal as defined by the Supreme Court of Canada in both
Farber
    v. Royal

Trust Co.,
[1997] 1
    S.C.
R.
and
Potter
    v. New Brunswick (Legal Aid Services Commission),
2015 SCC 10.

[10]

Accordingly,
    we reject this ground of appeal.

2. Mitigation

[11]

We
    see no basis upon which to interfere with the trial judges finding in relation
    to the obligation to mitigate. This was essentially a factual question upon
    which the trial judges findings are entitled to deference. The trial judge
    flatly rejected the appellants evidence that the removal of the BOAR04 account
    from the respondents responsibility had no significance given the current
    status of that account. As the trial judge put it at para. 65, The future prospects
    and plans for the drill rig production account and the rich stream of commissions
    generated by it would have been the elephant in the room. There was evidence
    to support the finding that the position offered to the respondent was
    substantially different from the one he had previously enjoyed, and that that
    change in responsibility amounted to a significant diminution in his status and
    station. Accordingly, he was not obliged to accept that position in mitigation.

3. Notice period

[12]

We
    are not persuaded that there was any error in the trial judges assessment of
    16 months as reasonable notice. The trial judge referred to the appropriate
    legal test and the respondents age, years of service, responsibilities,
    education, and the difficulty he would face in finding alternative equivalent
    employment.

4. Termination Date

[13]

The
    appellant makes a number of arguments in reliance on the provisions of the
Employment
    Standards Act
. We note that only one of these arguments appears to have been
    raised at first instance, namely, whether the respondents termination date
    relates back to January 29, 2009, in which case damages would be reduced to $294,092.33,
    assuming the 16 month notice period was applied by the trial judge, or approximately
    $26,000, if the notice period was reduced to 12 months. The trial judge
    concluded that there was no relation back to the commencement of the lay-off
    period.

[14]

The
    appellant relies on the provisions of ss. 56(1), (2), (4) and (5) of the
Employment
    Standards Act
. Section 56(1) states that it applies for the purposes of s.
    54. Assuming without deciding that s. 56 is engaged in the context of this
    common law action for wrongful dismissal, we reject the appellants arguments.

[15]

Section
    56(1)(c) provides that an employer terminates the employment of an employee for
    the purposes of s. 54 (the requirements to give written notice and statutory
    termination pay) if the employer lays the employee off for a period longer than
    the period of a temporary lay-off. The appellant contends that under s. 56(2), for
    a non-unionized employee like the respondent, the temporary lay-off would
    expire at 35 weeks unless the employee had been recalled. Section 56(5) provides
    that if an employee is not recalled before the end of the temporary lay-off,
    his employment shall be deemed to be terminated on the first day of the lay-off.

[16]

The
    appellants argument is based on on s. 56(4):

Temporary lay-off not termination

(4)  An employer who lays an employee off
    without specifying a recall date shall not be considered to terminate the
    employment of the employee, unless the period of the lay-off exceeds that of a
    temporary lay-off.

[17]

The appellant submits that the effect of s. 56(4)
is
    that an employer can
only
terminate an employee on temporary layoff
    through the expiry of the lay-off period. In other words, by operation of law,
    this provision ousts the application of the common law doctrine of constructive
    dismissal during the temporary layoff period.

[18]

We
    reject that argument for the following reasons.

[19]

First,
    we note that the argument was not advanced at trial.

[20]

Second,
    we are unable to accept the proposition that the language of s. 56(4) is
    capable of excluding the possibility of constructive dismissal. The appellant
    concedes that this provision was added to the legislation to correct the
    mischief under the prior wording of the section that had been interpreted to
    mean that laying off an employee without specifying a recall date amounted to
    termination. We see no reason to expand the interpretation of this provision
    beyond that meaning. The Act is remedial in nature and s. 56(4) was enacted to
    remedy a specific issue. To accept the interpretation advanced by the appellant
    would go well beyond that purpose and would defeat the remedial objective of
    the Act as a whole.

[21]

In
    any event, we agree with the trial judge that the respondent was recalled
    before the end of the temporary layoff period and that the position he was then
    given amounted to constructive dismissal. It is clear on the evidence that the
    mutual intention of the parties was to ensure that the respondent was recalled
    before the end of the temporary lay-off period and that the appellant did not intend
    to terminate his employment.

[22]

Finally,
    the appellant argues, again for the first time on appeal, that the effective
    date of the end of the 35 week lay-off period was September 27, 2009, not
    October 9, 2009. If accepted, this submission would mean that the respondent
    was terminated by operation of law under s. 56 (1)(c) before the alleged
    constructive dismissal and by virtue of s. 56(5), the termination date is the
    first day of the lay-off.

[23]

We
    reject this submission.

[24]

The
    appellant cannot assert for the first time on appeal that the return to work
    date was September 27, when the date it communicated to the respondent, the
    date that was accepted by both parties, and the only date that was relied on by
    both parties at trial and by the trial judge, was October 5, 2009. It would be
    fundamentally unfair to permit the appellant to rely on its own error (if
    indeed there was an error) in calculating the
ESA
time frame at this
    stage, to deprive the respondent of the benefits to which he would otherwise be
    entitled.

Disposition

[25]

Accordingly,
    the appeal is dismissed.

[26]

Costs
    to the respondent fixed at $15,000 inclusive of disbursements and taxes.

Robert J. Sharpe J.A.

S.E. Pepall J.A.

K. van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Olumide v. Ottawa (City), 2015 ONCA 271

DATE: 20150417

DOCKET: C59815

Laskin, Lauwers and Hourigan JJ.A.

BETWEEN

Ade Olumide

Applicant (Appellant)

and

City of Ottawa

Respondent (Respondent)

Ade Olumide, appellant appearing in person

Jeremy J. Wright and Karen Papadopoulos, for the
    respondent

Heard: April 8, 2015

On appeal from the order of Justice Charles T. Hackland
    of the Superior Court of Justice, dated December 12, 2014.

APPEAL BOOK ENDORSEMENT

[1]

Mr. Olumide appeals the decision of Justice Hackland dated December 12,
    2014. We have considered both Mr. Olumides extensive written submissions and
    his oral argument before us. In our opinion Justice Hackland made no error in
    dismissing the application.

[2]

Accordingly, the appeal is dismissed with costs of $375 for Mr. Wrights
    expenses, inclusive of disbursements and applicable taxes.