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Endless Covenant Deemed Expired After 40 Years

In a recent decision, the court clarifies that there can be temporal limits on registered restrictive covenants even though they are intended to last “forever”.

Andrews and Rago were each the current owners of adjacent properties, Lot 99 and Lot 97, respectively.  A dispute arose over Rago’s use of a three-foot strip of land owned by Andrews, and which ran between their homes to the rear property line.  Rago’s present-day rights ostensibly stemmed from a 1966 registered grant by the prior owners of Andrews’ land.

At that time, the grant was made to cure a shortfall in the minimum lot frontage of Andrews’ land (Lot 99), in contravention of a municipal by-law. The previous owners of Rago’s land (Lot 97) granted fee simple title to the strip to the then-owner of Lot 99, as well as their heirs and assigns for their “sole and only use forever.” The grant also included restrictive covenants prohibiting the owner of Lot 99 from removing structures and improvements on the strip and retained a right-of-way in favour of Lot 97’s owner.

When Andrews took over sole title to Lot 99 in 2008, the transfer contained express references to both the right-of-way, and to the restrictive covenants in the original 1966 deed.   At that point, Rago already owned the adjacent Lot 97.

A dispute arose between them in 2010.  Although Andrews did acknowledge Rago’s right-of-way over her strip of land, she claimed he was actually treating it as his own, in disregard of her legal rights.   For example, he had recently installed a concrete walkway along one portion of it, and an asphalt driveway covering another. She claimed Rago was essentially trespassing, because the 1966 restrictive covenants in his favour had expired in 2006, being 40 years after registration.  She relied on s. 119(9) of the Land Titles Act (“LTA”), which states that registered covenants with no stipulated end-date or expiry are deemed to expire after 40 years.

On the strength of that LTA provision, Andrews applied for a court order deleting the covenants preventing her from removing Rago’s structures and improvements. Rago objected, claiming the LTA provision did not apply, and that his rights should continue.

In resolving the conflict, the court confirmed that s. 119(9) of the LTA applies only to registered covenants with no expiry date. Under the plain meaning, “expiry” refers to the end of a legal right by the passage of time.  The outcome for Rago thus hinged on whether the restrictive covenants that benefitted him bore any wording to indicate an express period, or an end-date.

The court concluded they did not. Perhaps ironically, the court ruled that the word “forever” in the registered grant suggested that the rights granted to the owner of Lot 99 would be permanent, not that they were envisioned to expire at any point.  This meant the covenants were caught within the ambit of s. 119(9) of the LTA and expired in 2006, even though they were expressly referred to in the 2008 transfer to Andrews.

Andrews’ application was allowed; she was no longer bound by the restrictive covenants. Rago was ordered to remove all encroachments on the strip and was precluded from constructing or parking on it. He did retain a right-of-way for the purpose of ingress and egress.   See:  Andrews v. Rago, 2019 ONSC 800.