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Easements - Utility. Nhem v. Simpson
In Nhem v. Simpson (Div Court, 2023) the Divisional Court considered (and allowed) an appeal relating to a standard OREA APS provision regarding utility easements, here where the lower court allowed an application to terminate the APS at the hands of the purchaser for failure to remove an easement:[1] This appeal arises from a terminated agreement of purchase and sale for a residential property in Penetanguishene. Ms. Nhem terminated the purchase agreement when a title search of the property disclosed the existence of an easement in favour of Consumer’s Gas permitting the construction and maintenance of a natural gas pipeline across the rear yard of the property, and the Simpsons failed to remove the easement from title. Ms. Nhem commenced an application seeking the return of the deposit. ...
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[3] The principal issue on the appeal is whether the application judge committed a palpable and overriding error in finding that the purchase agreement did not provide sufficient notice of the easement. In my view, the application judge erred in so finding and I would allow the appeal.
[4] The parties used the standard OREA agreement of purchase and sale, which provided, at para. 10:Provided that title to the property is good and free from all registered restrictions, charges, liens, and encumbrances except as otherwise specifically provided in this Agreement and save and except for… (c) any minor easements for the supply of domestic utility or telephone services to the property or adjacent properties ... . ....
[7] Paragraph 10 of the purchase agreement provides that the title to the property is good and free from all registered restrictions, charges, liens, and encumbrances “except as otherwise specifically provided in this agreement” and other specified exceptions. That the property was subject to a registered easement was specifically and clearly disclosed in the purchase agreement. Further, the respondent in appeal did not establish that para. 10(c) did not apply, that is, that the pipeline did not fit within the category of “minor easements for the supply of domestic utility services to the property.” The home on the property included several gas appliances, so on the inspections undertaken by the respondent in appeal, it would have been evident that the property was serviced with gas. With respect, it was a palpable and overriding error for the application judge to conclude that the respondent in appeal did not have notice of the easement in the purchase agreement.
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