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Real Property - Neighbour Contracts. Martel v. Verdun et al.
In Martel v. Verdun et al. (Div Court, 2024) the Divisional Court briefly considers an interesting case regarding what I will call a 'neighbour contract', that is a contract between private property neighbours mutually compromising normal property rights:[2] The appellant argues that her private property rights are not subject to the communal rights of the other King’s Landing residents. The courts have repeatedly held that the owners have all agreed and are bound by the Co-Tenancy Agreement that they each signed on purchasing their homes. Ms. Martel does not accept the interpretation that has been put on the agreement by judges of the Superior Court and upheld by the Court of Appeal. This lawsuit is at least in part a relitigation of issues previously determined against the position advanced by Ms. Martel when she intervened in Furr v Duhamel, 2018 ONSC 1780, aff'd 2019 ONCA 824, application for leave to appeal dismissed 2020 CanLII 25163 (SCC).
[3] The interpretation of a contract is a question of mixed fact and law. Absent an extricable error of law, the trial judge’s interpretation will be accorded deference on appeal. I find that there are no errors in the trial judge’s interpretation of the relevant clauses of the Co-Tenancy Agreement in this case. Ms. Martel’s objections are largely based on the premise that the agreement does not interfere with owners’ rights to deal with their private property as they see fit and they should not be subject to the costs incurred or inflicted by other owners in the name of the community. That premise generally accords with the common law rights of owners of property. But Ms. Martel fails to appreciate or accept that she and all the other owners agreed to subjugate some elements of their private property rights in the Co-Tenancy Agreement. The court interprets that agreement in accordance with its terms and the law applicable to contractual interpretation. The contract binds the parties who signed it. If the contract puts limits on owners’ common law private property rights, then the contract governs. The court respects the rights of people to enter into binding contracts to manage their own affairs. That is what has happened here.
[4] I agree with the trial judge’s analysis of each of the interpretive issues raised by Ms. Martel. The judge adopted a reasonable interpretation of the contract in accordance with its terms, the agreement as a whole, and the objectively known surrounding circumstances. The contract is not limited to addressing the requirements imposed by the National Capital Commission as Ms. Martel asserts.
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