The Scope of Easements [489]
Introduction
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An easement granted for one purpose cannot be used for another (Malden Farms).
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An easement granting a right of way for persons, animals and vehicles does not permit the development of the easement for the general public to access the beach.
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The original intention of the parties is taken into account to determine the scope of the easement.
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As such, additional inconveniences may be permissible. For example, if a new building is put up on a property which has the easement (i.e. it is dominant) which requires it to use wider trucks, then the scope of the easement is broadened, so long as the original type of use is kept.
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An increase of the burden imposed on the servient tenement must not exceed the intention of the parties.
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E.g.: One cannot use an individual right of passage in a commercial manner involving a great increase of traffic (Malden Farms)
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E.g.: One can extend a right of passage attached to one’s land if the property gets subdivided. However, the right cannot be extended to someone on an adjoining but separate lot (Re Gordon and Regan)
Termination of Easements [490]
Introduction
An easement may be extinguished in 3 ways:
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By a statutory provision (only British Columbia has such legislation).
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By operation of law if: a) it loses its purpose; b) it is abused (Malden Farms) c) it has a time limit; OR d) the two tenements belong to the same person (dominant and servient).
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By release, express or implied. Stoppage must amount to an abandonment of the easement. The fact that a person simply ceases to use it is not enough. Burden of proof to invoke an implied termination of an easement is very high. The circumstances of the non user (not the non use) does not imply an intention to abandon the right. For example, in Barton v. Raine (father/driveway case): father has stroke, stops using the driveway this is not “intention to abandon” for his non use was caused by the stroke not by his intention not to use the driveway. He did not intend to abandon his right.
Easements by Prescription
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Must use the land for 20 years (in Ontario longer than Adverse Possession).
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Requires one year interruption to break the Prescription of someone else.
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Common Law rules (defences):
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Use must be continuous
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Must show:
Easement Recap:
Created by grant (express or implied) not possession
But, see prescription (easement granted at some time in the past as evidence by long interrupted use)
Negative easements usually obtained through some long use – prescription
‘Intangible’ property interest.
Caldwell v. Elia
Parties had a granted easement, but were using the gravel road beside it.
Had Caldwell gained a prescriptive right to use the access road?
TJ made a common error – applied Ellenborough park as if it applies directly to a prescriptive easement
In the case of a prescriptive easement necessity isn’t required – the existence of a different right of way is irrelevant.
Volume 3: Dividing Title and Possession – Bailment, Leases and Licenses
Chapter Seven: Bailment
Mary Jane Mossman and William F. Flanagan “Property Law: Cases and Commentary (2000) p. 484
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Bailment: any time an owner parts with possession of a chattel (car, book…) for a specified purpose (storage, repair, transport…), contractual or gratuitous (borrowing a friends book), or non consensual (a finder of a lost property is a bailee)
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It is typically consensual although
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1) it may arise by operation of law; or
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2) it could also arise where person possesses another’s goods, believing them to be his – in these cases with no express agreement the law may impose bailment obligations on the parties
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Certain obligations are imposed on the bailee with respect to the chattel – he used to be strictly liable for damage to the chattel but now he is liable on the basis of fault.
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The duty of care can be altered if:
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1) the relationship is characterized as a mere license instead of a bailment (which comprises no particular obligation to safeguard the chattel unless K provides otherwise); OR
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2) the parties to a contract of bailment lay down terms limiting the bailee’s liability.
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Raises notion of “duty to someone else” – like tenure, this is rare. (Singer point)
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Bailment: temporary transfer of goods from bailor to bailee for specified purpose (storage, repair, transport).
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Terms: bailor (owner of goods); bailee (receiver of goods)
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Types: contractual or gratuitous.
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Bailments for reward (Bailee paid): bailee aggress to do something with the goods: like store, transport, and/or perform a service.
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Bailements gratuitously (Bailee not paid) – liability only with gross negligence
What obligations does the bailee have: what would the reasonable & prudent owner do (Punch).
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Originally: strict liability for any damage or loss (influence of contract law).
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Now – 3 different standards of care:
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Benefit to bailor: low duty of care, liable if grossly negligent.
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Benefit of bailee: high duty of care, liable if slightly negligent.
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Mutual benefit: standard of ordinary diligence.
Now: supposedly 1 standard (general negligence), but effectively retained.
Actions in Bailment:
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Burden of Proof shifts in the middle of trial from the Bailor to the bailee
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Bailor demonstrates relationship
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Bailee must demonstrate they met their standard of care.
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Bailee arguments in defence:
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Licence not bailment
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Satisfied their duty of care or not fault
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Excused by an exemption clause
Bailor’s liability:
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Bailor hiring out chattel must ensure it is reasonably fit for use
Martin v. Town N’ Country Delicatessen, 1963, MB CoA, p. 485 – Definition of Bailment & Licence
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Facts: The defendant operated a restaurant – He provided parking lots and, on special occasions, parking attendants that helped organize the disposition of the cars – No ticket stubs were provided and no fees were charged (it was a courtesy accommodation, not a commercial venture) – The plaintiff came on a busy night – He was unable to find a spot for his car, but a parking attendant (no uniform) offered to park his car for him if he would leave behind the keys – The car was stolen while the plaintiff was eating and attendant who was supposed to park it disappeared – He sued the restaurant arguing that it (restaurant) was a bailee and therefore liable – The restaurant responded that it was not liable because it was a mere licensor.
Issue: Was this a contract of bailment? [NO]
Holding: (Miller C.J.M.) NO The relationship between the parties was that of a licensor and licensee only, and not bailment.
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Bailment is the delivery of personal chattel in trust on a contract, expressed or implied, that the trust will be duly executed and chattels redelivered as agreed.
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No contract here
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No additional fee charged
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A service not covered by consideration.
For there to be bailment, there must be a change of possession: was the car delivered for safe custody, supervision and control?]
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No such transfer – A service was simply supplied for the defendant’s convenience.
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Even through no system of giving a card or parking ticket to the persons using this lot has vital significance and should have suggested to the plaintiff the absence of any arrangement for supervision or control over the cars left on the lot, since no person was required to surrender a ticket or produce any other form of identification when removing his car. It is important that the plaintiff knows how, when and where to get his car keys back.
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While performing the gratuitous service of parking the plaintiff’s car the attendant did so as the agent of the plaintiff and his temporary de facto possession is to be regarded as the plaintiff’s possession.
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The absence of any measures to seize the vehicle and control access to the lot made it clear that nothing was being provided beyond a gratuitous service – No claim can be brought under the circumstances.
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A license, in the absence of some special contractual provision, carries no obligation of the licensor towards the licensee.
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Keys given does not matter, just a convenience.
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Even if this were bailment, it would be gratuitous because no consideration flowing to restaurant, so you would need to show gross negligence (this point is questionable – see the standards of liability above!).
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Motive: don’t want to discourage new parking lot phenomenon.
Schultz J.A. (dissenting)
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Bailment consists of the delivery of something of a personal nature by one party to another, to be held according to the purpose or object of the delivery, and to be returned or delivered over when that purpose is accomplished. Such bailment must exclude the owner’s possession and give the bailee custody and control over such property for the period of bailment.
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1) The bailee must have possession
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The plaintiff could not have used the parking lot had he been unwilling to hand over his key.
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He handed over his key, clearly expecting that it would be returned to him and that measures would be taken to ensure it was safe.
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Cannot be said that he was in possession when control over the vehicle escaped him.
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He cannot resume possession of his car unless and until he secured the keys thereof from the defendant’s employee.
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The car was handed over, subject to condition to insure their safe custody while in the possession of the defendant!
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2) The bailment was of mutual benefit.
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To constitute such bailment, it is not necessary that the bailee receive compensation in cash. There was sufficient consideration, in the form of the increased efficiency of the parking lot contributing to the defendants business and the additional profit from customers that would not have gone to the restaurant but for the parking lot.
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Once it is proven that there is bailment and that the property bailed has been lost, damaged, destroyed, the burden of proof shifts to the bailee, who must demonstrate that there was no negligence – Note: The presumption of negligence is based upon the doctrine of res ipsa loquitur The restaurant has not tried to deny its negligence but instead has argued there was no duty
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A gratuitous bailee is only liable for its gross negligence By disregarding the essential terms of the bailment and facilitating the loss of the bailed property, the bailee is guilty of gross negligence.
Rule
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Bailment requires a change in possession.
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A gratuitous bailee is liable only if he commits gross negligence.
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A license, in the absence of some special contractual provision, implies no obligation of the licensor towards the licensee.
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(Fact based rule) – Handing over keys in parking lot does not in itself transfer possession.
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Heffron v. Imperial Parking Co. et al., 1974, Ont. CoA, p. 496 – Failure to return bailment = burden of proof on bailee to prove 1 – loss was not his fault, or 2 – fault excused by an exemption clause in K
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Facts – The defendant, a parking lot company, operated with a clause exempting it from liability for damage caused to customers’ vehicles. Distinguish from Martin v. Town based on following facts: trial judge found that the defendants took reasonable steps under the circumstances to draw the conditions of parking to the plaintiff’s attention (tickets, signs) – It closed after a certain hour, but had a policy of bringing the keys of remaining cars to a garage it operated across the street for customers to pick up there – The plaintiff used the parking lot – He handed over his key, as was requested of him by the defendant and received a ticket with a serial number on it in return – When he came back after closing hour, his car had disappeared and was eventually found abandoned in damaged condition and private belongings insider the car were stolen – The defendant is suing for recovery on the basis of liability in bailment.
Issues – Was this a contract of bailment? [YES]
Holding – (Estay J.A.) Yes, it is NOT gratuitous, thus bailment and not license because:
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1) The owner had to deliver his car and keys to the defendant (handed over possession);
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2) The parking ticket had a serial number, necessary to recuperate the car;
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3) The provision of an attendant suggested that the car would be protected;
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4) There were no provisions about removing the car before a certain hour. However, the fact that there is a closing hour suggests that during that time the car would be actively watched over;
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5) There was a closing time
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6) There was a practice of taking care of customer’s keys even after closing time (even though unknown to the owner).
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Once the bailor has proven that there was a failure to deliver the bailment, the onus is on the bailee to prove:
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1) the loss was not his fault; OR
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2) any fault is excused by an exemption clause
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Doctrine of fundamental breach: When a fundamental term not embraced by the contractual intention of the parties has been breached, an exculpatory clause cannot apply
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In this case, the fault of the defendant did not arise in the context of the normal performance of the contract, a situation that would have been covered by the exemption clause.
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The defendant had not even performed the most basic aspect of the bailment agreement or breach of duty with respect to the disposition of the keys to the automobile after the term of the bailment, as evidenced by the fact that the car keys had disappeared.
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During the day, there was an implied condition that both the car and key would be kept safe – After the closing of the lot, at least the key should have been protected – Thus, it does not matter when the car was stolen.
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The defendant is liable for the loss of the car and its content (which it could reasonably have assumed to be there).
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Contents of the car: goods are of usual nature that would reasonably be expected to be regularly found in a car, and, it is therefore reasonable for a parking lot operator to assume that a great many of cars left in his custody will contain this kind of personal property in reasonable quantity.
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Different from Martin which operated a parking lot on an ad hoc basis – here because it was their job they had to maintain a certain duty of care.
Rule: Once the bailor has proven that the there was a failure to deliver the bailment, the onus is on the bailee to prove: 1) the loss was not his fault; OR 2) any fault is excused by an exemption clause.
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“Parking space only” may indicate a mere license.
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Punch v. Savoy’s Jewellers Ltd. 1986, ON CoA, 505 – Definition of Bailment & Licence; 3rd party responsibility
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Facts – P handed over a precious family ring, valued at $11 000 to Savoy’s for repair – The ring had to be sent for further repair to Walker in Toronto – This was done without the actual consent of Punch, but would have met with her approval – The ring was sent by post with a shown value of $100, as was usual – However, a postal strike forced Walker to use another method to return it – Upon agreement with Savoy’s, it used CN Rapidex – A Rapidex driver picked up the ring, filling in the forms for a confused Walker employee, using the same $100 value as before – The ring was never seen again by any party and may have been stolen by the driver – Punch is suing all parties on the basis of bailment – CN tried to rely on a term in its bill of lading limiting its liability to $50 – CN gave no explanation for the loss of the ring.
Issues – Is this a relationship of bailment? [YES]
Holding – Yes (Cory) A relationship of bailment can exist without contractual relations. It can be created by the voluntary taking into custody of goods which are the property of another.
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Bailees for reward must exercise due care for the safety of the article and are liable for loss or theft by their servants.
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If the bailed item is lost or damaged the bailee has the onus of demonstrating due care.
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Thus, it does not matter whether the servant is careless, whether the goods are stolen by a stranger or if the servant himself steals them. Here, Savoy was a bailee for reward and Walker and CN were sub-bailees for reward.
Differences in negligence for all parties
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Walker: the company was negligent in using a new method of transportation without obtaining proper insurance – Any diligent owner would have gotten insurance – Mrs. Punch was not given the opportunity to consider the alternatives.
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Savoy: though a bailee may not be required to insure goods, in this case insurance was a condition to the whole contract – Any prudent owner would have insured the right – Savoy breached this obligation towards the owner.
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C.N.: The limitation on liability clause can be relied upon in contracts, but not in torts. Bailment combines a bit of both regimes:
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If a sub-bailee is aware of the existence of an owner who is not a party to a contract, it owes that owner a duty of care – that owner / third party is bound by conditions on a (sub)-bailment, if he expressly or impliedly acquiesced to the bailee making a sub-bailment containing those conditions.
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Savoy’s never consented to the CN liability exclusion and could not be bound.
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Punch was even less aware (i.e. CN liability exclusion)
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CN: By including a clause in the contract excluding its liability towards the actual “owner” of the goods it carries, CN admitted that it contemplated the possibility that its client might not necessarily be the owner of the object of the bailment.
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Standard of care used: prudent owner (reasonable/prudent jeweler).
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If a bailee wants to prove his non-negligence or invoke a condition excluding his liability, he must be able to explain what happened to the goods. If the cause of damages remains unexplained, then he is liable.
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Unexplained disappearance of chattel constitutes fundamental breach – As CN has no explanation for what happened to the goods, it cannot invoke limitations to its liability against Walker.
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Both Savoy and Walker are liable to Punch for breach of their duty as bailees by failing to obtain instructions from the owner as to the means of carriage in light of the postal strike, by failure to give a proper evaluation of the ring to the carrier, and by failure to stipulate as a term of the carriage insurance coverage for the true value of the ring.
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CN is also liable for the unexplained loss of the ring. Savoy and Walker were indemnified by CN for the losses which they made good to the owner.
Rule: The unexplained disappearance of a bailed chattel constitutes a fundamental breach, which would render the limitation of liability clause inapplicable if that is consistent with the true construction of the contract.
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Sub-bailee’s, if aware of the existence of an owner who is not party to the contract, owe a duty of care to the owner/third party, and are bound by the conditions of the sub-bailment if he expressly or impliedly acquiesced to the bailee making a sub-bailment containing those conditions.
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Unless a clause excluding or limiting liability exempts a bailee from liability for loss resulting from theft by employees, the bailee remains liable for such loss.
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Unexplained damages to the bailor’s goods = liability
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Insurance not generally required in bailment, but required for transport where transport service is new (not one of longstanding practice).
Comments:
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Exclusionary Clause (EC) (2010 SCC 4):
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Can an EC be included in a fundamental clause of a K? SCC: Parties can K to limit liability or exclude a critical component of a K. However, if failure to perform falls outside of the EC then liability remains.
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Case
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Short story
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Bailment?
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Why?
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Martin v Town Restaurant
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Customer lets attendant park his car. Gives keys. Gets no ticket. Attendant not in uniform. Car is stolen you idiot.
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No.
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There was no undertaking by the restaurant to assume the responsibility of the car. The attendant had no uniform. The driver did not obtain instructions of how and where to pick up his car. It was a no charge service. Is was merely a service that the restaurant was providing.
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Heffron v Imperial Pkg Co
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Customer lets garage attendant park his car. Car stolen.
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Yes.
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The attendant was in a uniform. The client received a ticket with a serial number, properly identifying his keys and car. There was a closing time so it was reasonable to assume that the car would be protected at night. There was a practice of storing the keys in a safe location at night. A fee was charged. Customer received instructions of where to pick up his car.
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Punch v Savoy
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P gives ring to S. S sends it by mail to W. W fixes it and returns it to S via CN. CN loses ring.
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Yes. What is DoC?
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S: bailee. Breach: no insurance, contrary to what an RP would do considering the ring is so valuable.
W: sub-bailee: Breach: used an unauthorized transport company, CN.
CN: Sub-bailee. Breach: Didn’t get the right party to accept the terms of the exculpatory clause. S should have consented. But CN got W to consent. E-clause does not limit their liability because it is a fundamental breach of their DoC as sub-bailee.
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Bailor/Bailee
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Object/Thing
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Contractual or gratuitous? Mutual or other benefits?
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Transfer of possession? How?
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Exculpatory Clause
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Martin (bailor)
T&C (Bailee)
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Car
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K, mutual benefit
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No – Majority, Yes – dissent keys
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No
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Herron (Bailor)
T&C (Bailee)
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Car
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Contractual, mutual benefit
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Yes
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Yes, but fundamental breach (didn’t deliver the car) that voided the K
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Punch (Bailor)
(Savoy (Bailee)
Walker (sub – Bailee)
CN (Sub-Bailee)
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Ring
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Contractual
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Yes
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Yes – but either does not apply (Punch and Savoy) or fundamental breach (Walker)
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Bailment
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Licence
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Lease
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Things
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Exclusive Possession
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Land
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Cml has developed from 16th century thinking, although this is not how modern business is conducted.
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Lease v Licence – Canada has a hybrid system.
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