Mutual Rights of Way Continued #207

Sep 01, 1993

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By Gerry Neely
B.A., LL.B.

What are Rowan's rights as the owner of land over which there is a common driveway, shared with the adjoining neighbor Martin, where Martin has an obligation to repair, but fails to do so?

In 1967 when the right of way was created, whoever owned the adjoining property agreed to pay the cost of installation, on Rowan's land, of a proper gravel surface and the cost of keeping the right of way in proper repair and condition at all times. Considerable ill will was created by Rowan and Martin's complaints about each others misuse of the right of way, and Rowan's complaints of Martin's failure to keep it in repair. Rowan complained as well of the increased vehicle use and unauthorized parking upon the right of way by customers of a kennel business started by Martin on his property.

Rowan petitioned the Supreme Court for the cancellation of the right of way, arguing that Martin's failure to repair was a fundamental breach which resulted in the easement becoming invalid or unenforceable. The trial judge agreed and cancelled the easement pursuant to Section 31 of The Property Law Act.

The case went to the Court of Appeal where the question was whether Martin's right to use the right of way terminated because of the default, or was merely suspended until the proper repairs were made. The court would have considered canceling the right of way agreement because of the default if Martin had completely refused to maintain and repair the driveway and had insisted upon using and abusing the road and its surface. Since the evidence failed to establish this, the court held that Martin's right to the use of the road would be suspended until he complied with the obligation to keep it in proper repair and condition.

As one Court of Appeal judge said, establishing the standard of repair "is a very nice question". The standards required by the Department of Highways or urban dwellers would not apply to a rural setting in the Osoyoos area. He decided that a proper state of repair must be based upon the increased use of the road by Martin's customers. The state of repair, subject only to difficulties caused by having snowfalls or flooding, must be such that neither the condition of the road nor its use by Martin or his customers could prevent Rowan from being able to use it at all times.

What the mutual rights of way cases in #206 and this column indicate is that separate driveways and not just good fences make for good neighbours.1

***

A licensee who was the sole officer and director of an incorporated company made an offer on its behalf to purchase two apartment blocks, an offer which was rejected. The licensee was then approached by the owner of the two apartment blocks with an offer to sell. The licensee, again on behalf of the company, made a counter offer which the owner accepted. No disclosure statement as required from a licensee who offers to purchase property on behalf of a company of which he is a shareholder, officer or director, was delivered to the vendor.

A dispute arose between the parties as to who was in default under the agreement, with the result that the vendor refused to complete, and the licensee's company sued for specific performance or damages. The claim was met by the owner's defense that the contract wasn't enforceable by the company because of a breach of combined Sections 28 (i) (b) and 38 of the Real Estate Act. Section 38 provides that no contract is rendered void or voidable other than against the licensee who negotiated the contract, but failed to comply with the Act.

In this case the contract was not between the licensee and the vendor, but between the company and the vendor. On the plain wording of Section 38 the licensee's action did not result in a void contract. If Section 38 received this interpretation, the company directly and the licensee indirectly, would benefit from a contract entered into in breach of Section 28. The judge held that the contract was not enforceable because the company was not entitled to benefit from a breach of the Act which would have disentitled the licensee had he entered into the same contract to enforce it.2

  1. Collinson v. Laplante, S.C.C.A., Vancouver Registry CA 013525, (Reasons for judgement, May 12, 1993).
  2. Alert Products of America Corporation v. Parksville Apartment Ltd., S.C.B.C., Nanaimo Registry 02750, (Reasons for judgement, July 7, 1993).

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