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Real Property - Restrictive Covenants

. Wonderland Power Centre Inc. v. Post and Beam on Wonderland Inc.

In Wonderland Power Centre Inc. v. Post and Beam on Wonderland Inc. (Div Ct, 2022) the Divisional Court sets out statutory provisions bearing on restrictive covenants in the Land Titles Act:
Restrictive Covenants on Title

[4] Holdings as covenantee obtained a restrictive covenant from the Library Board, which it registered on title as described below. Section 119(3) of the Land Titles Act provides that a restrictive covenant may be registered on and run with land. Section 119(4) states that a covenant must not be registered unless four conditions are met:
(a) the covenantor is the owner of the land to be burdened by the covenant;

(b) the covenantee is a person other than the covenantor;

(c) the covenantee owns the land to be benefitted by the covenant and that land is mentioned in the covenant; and

(d) the covenantor signs the application to assume the burden of the covenant.
[5] The only requirement in issue on this appeal is s. 119(4)(c) – that “the covenantee owns the land to be benefitted by the covenant and that land is mentioned in the covenant.”....

....

[36] The requirement that the land “benefitted by the covenant” be “mentioned in the covenant” reflects a long-standing common law requirement that a restrictive covenant define the land that is to be benefitted by the restriction if it is to run with the land. A person dealing with a parcel of land, such as a prospective purchaser, should be able to determine without further investigation the precise nature and extent of the encumbrances to which the land is subject.

[37] The Supreme Court of Canada in Galbraith v. Madawaska Club Ltd., 1961 CanLII 16 (SCC), [1961] S.C.R. 639, at para. 23 held that, to be enforceable, “the deed itself must so define the land to be benefitted as to make it easily ascertainable”. The Court held, at para. 24, that a covenant expressed in a deed which does not describe the benefitted lands is personal only and did not run with the land:
[A] restrictive covenant contained in an agreement which omits all reference to any dominant land, although it sets out the restrictions placed upon the servient land, is unenforceable by the covenantee against a successor in title of the covenantor, since such an agreement expresses no intention that any other lands should be benefited by the covenant. A covenant running with the land cannot be created in this manner and in the absence of any attempted annexation of the benefit to some particular land of the covenantee, the covenant is personal and collateral to the conveyance as being for the benefit of the covenantee alone.
[38] Applying these legal principles, the motion judge held that the Registered Restrictive Covenant was not enforceable because it contained no reference to the existence of dominant lands to be benefitted.


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