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Wednesday, March 8, 2017

Supreme Court of Canada discusses the law of adverse possession in recent case

Property law cases do not often reach the Supreme Court of Canada, but a recent adverse possession case out of British Columbia did make it to Canada's highest court.   While certain aspects of the decision are limited in application to British Columbia, the Supreme Court does review the law of adverse possession generally in its reasons.

The Claimants in the case in question claimed title to a parcel of land in Nelson, BC that is adjacent to a separate parcel they purchased in 1992.  The registered owner of the disputed parcel was the provincial Crown.  The Claimants alleged that they and their predecessors in title had continuously possessed the disputed parcel since the early 20th century and, therefore, that ownership had transferred to them by the passage of time.  The Claimants commenced an action for a declaration that the provincial Crown was not the owner of the parcel (and could not transfer it to the City of Nelson), and also brought a petition for judicial investigation of their title under the BC Land Title Inquiry Act.

The headnote from the Supreme Court's decision describes the law of adverse possession as follows: 
"Adverse possession is a longstanding common law device by which the right of the prior possessor of land, typically the holder of registered title, may be displaced by a trespasser whose possession of the land goes unchallenged for a prescribed period of time. To meet the test of establishing adverse possession, the act of possession must be open and notorious, adverse, exclusive, peaceful, actual and continuous. The adverse possessor who successfully obtains title need not always be the same person whose adverse possession triggered the running of the limitation period."

At first instance, the judge hearing the matter granted a summary dismissal application by the City of Nelson, having found that there was an evidentiary gap with respect to the question of continuous possession.  A claim for adverse possession of someone else's property must rest on possession of land by a claimant for a specified period of time that open and notorious, adverse (vis-a-vis the registered owner), exclusive, peaceful, actual and continuous.  The judge at first instance found that there was an interruption in continuity of adverse possession from 1916-1920, resulting in the dismissal of the claim.  The Court of Appeal for BC reversed the decision to dismiss the claim, finding that there was evidence of continuous adverse possession from 1909-1923.  On that basis, the Court of Appeal remitted the matter back to the BC Supreme Court for final determination of the proceedings.

On further appeal, the Supreme Court of Canada reversed the Court of Appeal decision and restored the dismissal of the adverse possession claim made by the judge at first instance.  The Supreme Court found that the original finding of an evidentiary gap could not be set aside by the Court of Appeal based on the evidence.  While the Court of Appeal's finding that there was continuous adverse possession from 1909-1923 was reasonable, the Supreme Court found that the original judge's finding of the gap from 1916-1920 was not open to second-guessing by the Court of Appeal.  Absent a palpable and overriding error, the factual findings of the original judge hearing the matter could not be disturbed.

In this particular case, the time period in the between 1909 and 1923 was important because the claimants had to prove continuous adverse possession of the land either for a period of 20 years leading up to 1930-31 (the date at which the disputed parcel was escheated to the Crown because the company that was at the time the registered owner was dissolved) or for a period of 60 years leading up to the 1970s (when the law in BC was changed to prevent adverse possession going forward).  The onus was on the Claimants to prove continuous adverse possession during the relevant periods, and any gap in the evidence would be fatal to the claim.  A gap was found and the claim failed.

In its reasons, the Supreme Court of Canada also addressed the issue of inconsistent use.  At Common Law, there has been a requirement that a possessor's use of the disputed land must have been inconsistent with the "true owner's" present or future enjoyment of the land.  To be truly adverse, the possession must "entail a use of the property that is inconsistent with the true owner's intended use of the land."  However, while that inconsistent use requirement has appeared in the jurisprudence in Ontario, it has formed no part of the law in British Columbia.

The Supreme Court also commented on the distinction between "continuous possession" and "continuous occupation".  The Claimants suggested that the judge at first instance had erred in finding the evidentiary gap by confusing possession and occupation.  They argued that proof of continuous occupation of land is not required to prove continuous possession of land.  The Supreme Court acknowledged that "possession" does not require continuous occupation - a person may possess land in a manner sufficient to support a claim to title of the land while choosing to use the land intermittently or sporadically.  However, the Supreme Court found that the apparently interchangeable use of the terms "possession" and "occupation" by the judge at first instance did not change the outcome of the case.  The only evidence of "possession" before the judge was "occupation" (no form of possession less than that was posited to the judge).

Read the decision at: Nelson (City) v. Mowatt.