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Real Property - Adverse Possession

Sipsas v. 1299781 Ontario Inc. (Ont CA, 2017)

In this case the Court of Appeal canvasses the law of adverse possession of land:
[12] The trial judge applied the three-part test from this court’s decision in Masidon Investments Ltd. v. Ham (1984), 1984 CanLII 1877 (ON CA), 45 O.R. (2d) 563 (C.A.), leave to appeal refused, [1984] S.C.C.A. No. 232. In that case the court held that an adverse possession claimant must have:

(1) had actual possession;

(2) had the intention of excluding the true owner from possession, and

(3) effectively excluded the true owner from possession.

.....

[18] Although title to lands registered in Land Titles cannot be obtained by adverse possession following the registration of title, title may be obtained by adverse possession that can be established for a continuous period of 10 years prior to registration: s. 51(2) of the Land Titles Act, R.S.O. 1990, c. L.5 and s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15. Thus, as the trial judge found, the appellants were required to establish that the Hendricks adversely possessed the disputed lands for any 10-year period ending October 21, 2001.

.....

[20] It is clearly arguable that the Hendricks’ use of the disputed lands was sufficient to establish actual possession. The Supreme Court recently reiterated that the requirement that a claimant have actual “possession” does not require continuous occupation: Nelson v. Mowatt, 2017 SCC 8 (CanLII), [2017] S.C.J. No. 8, at para. 31. The Hendricks could be said to have used the disputed lands as a backyard, and backyards are necessarily used on a seasonal basis. But even assuming that the actual possession requirement were satisfied, the appellants’ claim would fail on the second step of the Masidon test.

[21] The appellants were required to establish that the Hendricks intended to use the disputed lands in a manner inconsistent with the rights of Thompson and the use she intended to make of it. There is no question that the “inconsistent use” test makes it more difficult for claimants of adverse possession to establish an intention to exclude, especially where, as in this case, the intentions of the true owner of the disputed lands are unknown.

[22] The appellants sought to avoid this problem by arguing that this was a case of mutual mistake, rendering the inconsistent use test irrelevant: see Teis v. Ancaster (Town) (1997), 1997 CanLII 1688 (ON CA), 35 O.R. (3d) 216 (C.A). However, a mutual mistake cannot be established on this record. It was not established that Thompson was mistaken about anything at all. The appellants could do no more than suggest it was possible that Thompson also believed that the disputed lands were owned by the Hendricks.

[23] At the hearing of the appeal, the appellants sought to characterize this as a case of unilateral mistake, submitting that the Hendricks mistakenly believed that they owned the disputed land.

[24] As noted in Barbour v. Bailey, 2016 ONCA 98, 345 O.A.C. 311, at para. 43, this court has not determined whether inconsistent use is necessary in cases of unilateral mistake, although there is Superior Court authority that supports the proposition that it is not: see Marotta v. Creative Investments Ltd., [2008] O.J. No. 1399, 69 R.P.R. (4th) 44 (S.C.).

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