Land boundary battle resolved after 20 years as court determines responsibility for property encroachment

QUICK CLICKS

• The Pennys built their house and lived there without incident for four long years. Their new neighbours got their property surveyed and found most of the Pennys’ garage and a corner of the house extended onto their property.
• As the neighbours had not anticipated using the land, the court decided to award damages rather than requiring remediation.
• All third parties were responsible for contributory negligence. The builder was responsible for 70%, the surveyor 15% and the municipality 15%. The Pennys received compensation for the land they had purchased, damages for trespassing, and land transfer.

A homeowners’ nightmare scenario of discovering their home had been constructed over the property line onto their neighbour’s land was brought to court, in Armstrong vs Penny.

Building a new waterfront property

In 1998, Pennys hired an architect to build a custom home on their vacant waterfront lot in Sturgeon Lake. (What is now Kawartha Lakes). The builder employed a surveyor who determined the boundary line of the construction site. The municipality issued a construction permit.

After the house was finished, the Pennys moved into the house and lived there for a few years without incident.

Survey reveals property that has crossed the boundary line

Then, in 2002, the Armstrongs purchased the northern adjacent property and the following year, they obtained a survey of the property’s southern line and learned that most of the Pennys’ garage and a corner of the house extended onto their property.

Later, the Armstrongs filed a lawsuit against the Pennys claiming that they had trespassed. The Pennys filed third-party lawsuits against the builder and surveyor as well as the municipality. They claimed that these parties were negligent in allowing the home’s construction to cross the boundary.

2022 trial

The litigation was finally tried in 2022. (The reason for the delay is unknown.) The trespass of the Pennys’ property onto the Armstrongs’ was evident and admitted in court, but it was unclear what should be done.

The Armstrongs felt that the most equitable, fair and balanced solution was to demolish and remove the Pennys’ garage while allowing the Pennys to purchase land needed to rebuild the garage. They would also leave a smaller piece of land so the corner of the Pennys’ house could stay.

How the court reached a decision

The court felt that the Pennys weren’t at fault and shouldn’t go through the hardship of demolishing their property. It viewed this as oppressive.

Instead, the court ruled:

• Section 99 of the Courts of Justice Act gives jurisdiction to award damage instead of an order requiring a specific remediation.
• section 37 of the Conveyancing and Law of Property Act, which states that a person may be entitled to retain land on which they have made lasting improvements under the belief that the land is the person’s own.

These sections were appropriate, considering that the garage had been located in the same place for many years. The court focused on the importance of prior knowledge during the purchase and each party’s expectations — that is, the Armstrongs did not expect to use the land the Pennys’ property sat on when they purchased their home.

The decision

The court ordered that the Pennys’ home and garage could remain as-is but they must pay the Armstrongs for the land used at $9.10 per square foot, plus the costs associated with the land transfer.

Also, the Armstrongs argued that the facts underlying an unjust enrichment claim were admitted — the Pennys had used the land under the garage since the Armstrongs purchased it, and the Armstrongs were deprived of using it. The court awarded general damage of $1,000.

Third-party claim against a builder

The Pennys argued that there was a breach of contract and negligence on the part of their builder, to which the trial judge agreed since the home was not entirely built within the property’s boundaries. As well, the builder didn’t complete the building permit application form correctly and failed to review a reporting letter received for work conducted before paying an invoice for that work.

This meant the builder failed to meet the required standard of care — had it not been negligent, the house would have been constructed in the correct location, and the Pennys would not be liable to the Armstrongs.

The surveyor

The court determined that the surveyor’s ability to accurately establish the boundary line was vital to the entire construction process. Despite the builder’s poor guidance, it was noted that surveyors should ensure clear instructions are being used and if they were lacking, that they be clarified before work commences.

Since no documents showed the surveyor inquired about the instructions, they were responsible for the choices made and found negligent in proceeding with the job, which contributed to the wrong location of the home’s construction.

The municipality

The trial court found that the plain facts of the case were enough to satisfy the common sense test of how the municipal breached the standard care.

The municipality’s chief building inspector was responsible for getting further information before issuing a building permit and examining all documents filed in support of the building permit application for uncertainties, inconsistencies or omissions. While municipalities cannot cover all risks, they can ensure that structures are built within the boundaries of their property.

Each party has different levels of fault

In the end, the builder was 70% at fault. It signed the contract with Pennys to build their house and garage as instructed. The builder’s role also required engaging the surveyor and the municipality, which were also at fault but not to the same degree (15 per cent each).

Pennys should receive full compensation for the severed purchase of land, damages due to trespassing or land transfer, and costs associated with the purchase.