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The Court of Appeal has provided further guidance on the issue of prescriptive easements in the case of Hunsinger v. Carter. The case involved one party having uninterrupted use of a shared driveway over a 40 year period for commercial purposes, facing off against a neighbor who purchased the property last year and attempted to restrict his neighbours historic use of the property. The ‘new’ neighbor was operating a daycare and wanted to erect a fence in the middle of the shard driveway for reasons of safety.
On application, the court held that the ‘new’ neighbor could erect the fence, in part relying on the finding that the historic neigbour would be able to maneuver vehicles on their portion of the driveway and that the fence would not provide an absolute impediment to doing so. The application court judge found that the historic neighbor had established a prescriptive easement over the driveway as it was the dominant tenement for over 40 years before 2007 when both properties were registered in the Land Titles system. The appellant and his family had made use of the gravel driveway “openly, continuously, and without licence over this period. However, the application court judge found that the obstruction of the easement in erecting a fence was allowable because that portion of the driveway which was obstructed was not needed to be used by the historic neighbor.
The Court of Appeal disagreed, finding that building the fence would encroach on the easement. It is interesting to note that the Court did not disagree that the proposed fence did not prevent the historic neighbor from utilizing the driveway to access the back of his property. Rather it was clear that the court accepted the argument that the fence would substantially interfere with the neighbours use. Encroachment is only permissible where the encroachment does not substantially interfere with the easement and in this instance, the fence was thought to constitute a substantial interference.
In the June 5, 2018 Divisional Court ruling in Enterprise Rent-A-Car v. Intact, 2018 ONSC 3517, Enterprise appealed the judgment of Justice Morgan of the Superior Court concerning the hierarchy of coverage provisions of s. 277(1.1) of the Insurance Act applying to the use or operation of a leased vehicle. It reads much like the overlaid simplicity of Tragically Hip lyrics belying their depth.
Arising from a June 29, 2013 accident, the driver of the rental vehicle, also listed upon her father’s policy with Intact, became a defendant in the injured plaintiff’s tort action. Enterprise ultimately contributed to settlement of that action and sought recovery from Intact by way of court application. His Honour dismissed the application finding that s. 277(1.1) did not apply.
On appeal, the Divisional Court decided the standard of review as either correctness or palpable and overriding error. Neither standard was breached presumably, as the panel of three unanimously upheld the finding of the lower court without further comment upon it. The hierarchy of priority of coverage is: lessee (which is defined in subsection (4)), followed by the driver and then the owner of the rental vehicle. Enterprise could only have excess coverage if Intact fell within the first two tiers. The panel confirmed Court of Appeal authority requiring the coverage to be ‘available’ in denying it extended to only a driver listed upon the Intact policy. It was felt clear from Intact’s OAP 1, although the language is a bit tortured, that coverage would extend to a vehicle only when rented by the named insured (the father) or his spouse and driven by either of them. Enterprise argued paramountcy of the statute over the contract of insurance believing there to be a discrepancy in paragraph 2 of the statutory provision. The panel rejected any discrepancy and found the converse was the proper interpretation in that the statute can’t create coverage; it first has to founded under the terms of the policy before the statute is engaged. Since paragraphs 1 and 2 of the statute were not triggered, coverage fell to Enterprise’s insurer considering Enterprise as owner of the vehicle. Costs were fixed and payable to Intact.
Know your coverage. Don’t let the constellations reveal themselves one star at a time when you drive back to town this morning.
Kevin is a Partner of Samis+Company. Throughout his career, he has practiced almost exclusively in the area of accident benefit and bodily injury matters arising from motor vehicle accidents. He has also defended various non-motor vehicle bodily injury claims. Kevin carries on a robust practice involving privately arbitrated disputes between insurers in both priority and loss transfer matters.
Ontario’s Court of Appeal has again addressed issues relating to commercial tenancies and the impact of lease provisions which obligate one party or the other to obtain insurance for the benefit of another. In CLLC Inc. v. 20 Eglinton , the tenant was obligated to obtain insurance throughout the period of their possession of the premises, and for the entire term, with the landlord named as an insured. The tenant did not obtain the insurance as required. Water leaks in the premises resulted in loss and damage to the tenant who brought an action against the landlord. Summary judgment dismissing the action against the landlord was granted and the tenant appealed. The Court of Appeal set aside the summary judgment, noting that the motion judge had not adequately considered and resolved factual disputes in finding that there was no genuine issue for trial.
Although not technically a subrogated claim (because no insurance was obtained so no insurance claim was advanced), the principles and arguments that were in play are relevant to subrogated claims.
One particular point of interest was the issue of when the leaks caused damage and the resulting question of whether the premises were even insurable given that the water leaks may have been pre-existing. The defendant conceded that if the premises were not insurable for whatever reason, the tenant would not be bound by the covenant to insured.
As a result the Court of Appeal set aside the summary judgment motion given that there were genuine issues in play that required a trial. This case underscores a point made in prior blogs on this site and others – read the lease or whatever underlying agreement is in play carefully and understand how the obligations of the parties fit within the factual matrix. It will be different in every case.