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Melville v. McLaren, 2023 [ONSC 345]

Last year, Terry Hill and Karen Shedden of Daniel & Partners LLP successfully represented the respondent in an application before the Ontario Superior Court of Justice. The applicant sought an order to delete a caution registered by the respondent through their lawyers on the title to the applicant’s property. The respondent benefitted from a restrictive covenant over the applicant’s property which prevented certain actions from being taken with respect to the property.

This application dealt with a novel issue, the effect of section 113(2) of the Registry Act on section 119 of the Land Titles Act.

On June 3rd, 1958, a restrictive covenant, with no end date,  was registered on title to the property by a former owner. Under section 113(1) of the Registry Act, these restrictive covenants would have expired 40 years after the registration date on June 4th, 1998.

The Respondent used the provisions of section 113(2) of the Registry Act to prevent the expiration of the restrictive covenant by registering a notice of claim on title to the property on July 16th, 1998. This had the effect of extending the restrictive covenants for another 40 years.

In 2003 the property was converted from the land registry system to the land titles system. The Land Titles Act provides that a restrictive covenant with no fixed expiry date is deemed to expire 40 years after it was registered. Unlike the Registry Act, the Land Titles Act does not have a provision that permits the renewal or extension of a restrictive covenant. Meaning that under the land titles system, a restrictive covenant with no specified end date is deemed to have expired 40 years after its registration and cannot be renewed or extended. If the property had remained under the land registry system, it was clear that the restrictive covenants would not have expired until July 16th, 2038. This raised a new issue for the Court; Does a notice of claim, registered prior to conversion from land registry to land titles, which extended the notice period of the restrictive covenant still have legal effect after the property was converted to the land titles system?

Justice L.M. Walters found in favour of our client the Respondent, and stated that there is nothing in section 119 of the Land Titles Act that repeals, removes, or somehow takes away the extension or renewal once it is already in place. She further stated that the date that the notice of claim was filed is the date that the restrictive covenant was “registered”. Meaning that the result of the registration of the Notice of Claim was that the restrictive covenant was registered on July 16th, 1998, and would not expire until July 16th, 2038. Ultimately Justice L.M. Walters found that the caution was properly registered on title and should not be deleted, and that the restrictive covenant was to be restored.

The appeal process related to this decision is ongoing, and Daniel & Partners looks forward to continuing our advocacy on behalf of our client to protect their best interests.

This case serves as a reminder of how important title issues can be when dealing with property. Whether it comes to preserving an interest in a property by registering a caution on title or ensuring clear title so that your real estate deal can close. At Daniel & Partners LLP, our dedicated and experienced real estate team will work diligently to ensure your needs are met. Contact our office to arrange an initial consultation as soon as possible to get our team started on your case.

Blog post written by summer student Gillian Belford