Adverse Possession, Dispossession, And The Interplay Between The LTA And RPLA

• Published date: 21 December 2022
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Trials & Appeals & Compensation, Real Estate, Landlord & Tenant - Leases
• Law Firm: Pallett Valo LLP
• Author: Mr Eric Blay

In Billimoria v. Mistry, 2022 ONCA 276, the Court of Appeal considered adverse possession in the context of the Real Property Limitations Act, R.S.O. 1980, c. L.15 ("RPLA"), the Land Titles Act, R.S.O. 1990, c. L.5 ("LTA") and the Partition Act, R.S.O. 1990, c. P.4 ("Partition Act").

Because Section 51(1) of the LTA was not raised at trial, this article will be of interest to those considering whether to raise a novel issue on appeal, as well as to those looking for a recent review of the jurisdictional and practical interplay between the RPLA, LTA, and Partition Act, R.S.O. 1990, c. P.4 ("Partition Act") in disputes revolving around true ownership of real property.

Key Takeaways

1. The Court of Appeal accepted jurisdiction over all issues raised on appeal, despite the fact that appeals from orders made under the Partition Act lie to the Divisional Court, as the appeal from the final judgment with respect to ownership lies to the Court of Appeal and pursuant to s.6(2) of the Courts of Justice Act, the Court had jurisdiction to deal with all issues on appeal. The novel issue raised by the Respondents on appeal, as to the application of S. 51 of the LTA was permitted by the Court of Appeal because it did not depend on findings of fact nor was there any suggestion that prior counsel failed to raise it for tactical reasons.
2. S. 51 of the LTA prohibits new adverse possession claims for real property registered in the Land Titles System and supersedes all other Acts on this point. If real property is registered in the Land Titles System, (and is therefore subject to the LTA), adverse possession claims can only be made if open, notorious, peaceful, adverse, exclusive, actual and continuous possession of the land can be demonstrated for at least 10 years prior to the property being registered in the Land Titles System.
3. The appellant's attempt to create a distinction between adverse possession (LTA) and "dispossession" or "discontinued possession" under the RPLA was rejected and the principle of adverse possession and its temporal limitations set out in the LTA were upheld.

Trial and Background

The parties to this dispute were the owners of a residential property purchased as a joint business venture for either resale or rent (the "Property") in 1988. The parties took title as tenants in common, each paying for half of the deposit and receiving 50% ownership of the Property. Unfortunately, they were unable to sell or effectively rent the property. In 1991 they agreed to have the appellant, Homi Billimoria ("Billimoria") move into the property.

In 2016, Billimoria transferred his ownership in the Property to an unrelated party without the consent of the respondents, Maharukh and Firoze Mistry (the "Mistrys"). The Mistrys sought to sell the Property and extricate their capital. In response, Billimoria registered a mortgage on the Property and commenced an action seeking a declaration that he was the sole owner of the property because of his exclusive possession of the Property since 2010 as well as his alleged payment of all associated carrying costs. The Mistrys brought a counterclaim for partition and sale of the Property, which Billimoria opposed.

The trial judge refuted Billimoria's claims for exclusive possession under the RPLA, and proprietary estoppel. However, the trial judge also found that there was a proper basis, grounded in unjust enrichment, for the unequal...