Decision No. 80-R-2013

INTRODUCTION AND ISSUE

Application

[1] Benninger Holdings Inc. (BHI) and 575482 Ontario Limited (applicants) filed a joint application with the Canadian Transportation Agency (Agency), pursuant to section 102, or in the alternative, section 103 of the Canada Transportation Act (CTA), requesting the construction of a single private crossing across the track and right-of-way of the Canadian Pacific Railway Company (CP) at mileage 7.40 of the Waterloo Subdivision, in the cities of Cambridge and Kitchener, in the regional municipality of Waterloo, in the province of Ontario.

Issue

[2] Are the applicants entitled to a suitable crossing under section 102 of the CTA at the subject location?

Conclusion

[3] As indicated in the reasons that follow, the Agency has determined that BHI and 575482 Ontario Limited have each established that they are entitled to a suitable private crossing at mileage 7.40 of the Waterloo Subdivision pursuant to section 102 of the CTA.

BACKGROUND

[4] The lands currently owned by 575482 Ontario Limited (Scharringa Land) and BHI (BHI Land) border one another, with a shared 20-foot lane. Both lands are located on Lot 13, Beasley’s Broken Front Concession. The Scharringa Land is located in the northerly portion of Lot 13, bordering onto Lot 14, and the BHI Land is located in the southerly portion of Lot 13, bordering onto Lot 9. The shared 20-foot lane is made up of a 10 foot wide strip from each property, with the centre line of the lane being the border between the Scharringa Land and the BHI Land.

[5] Since 1904, a private crossing has existed at mileage 7.40 along the shared lane; however, in 2000 the crossing was “disrupted” due to a tie replacement program, and since that time the crossing has not been reinstated by CP.

[6] On April 11, 2001, CP purchased a strip of land beside the railway line from 575482 Ontario Limited. In 2002, CP built the Maple Grove Pre-Tripping Yard (Yard) on that land to serve Toyota’s Cambridge plant; it is used to prepare the multi-level rail cars for loading. The Yard is located between mileages 6.67 and 7.26 of the Waterloo Subdivision, which is approximately 1,200 feet south from mileage 7.40. The Yard is made up of two pre-tripping tracks (approximately 1,895 feet and 1,915 feet), one storage track (approximately 2,510 feet) and one track that is used for storage or pre-tripping (approximately 1,920 feet).

[7] Intermarket CAM Limited (Intermarket) has a purchase and sale agreement with 575482 Ontario Limited under which Intermarket intends to become the owner of a parcel or parcels of land adjoining and divided by the railway line. Intermarket and BHI (Developers), intends to jointly develop the two lands into the “Creekside Corporate Campus” a 225 acres business park. Phase one of the 80 acres development will include office and retail space.

[8] Transport Canada advised on January 11, 2013, that given its understanding of the site conditions, the requested private crossing would meet Transport Canada’s sightline requirements as set out in the Minimum Railway/Road Crossing Sightline Requirements For All Grade Crossings Without Automatic Warning Devices G4-A, provided that the land is leveled and the sight triangles at the crossing are cleared of obstructions.

Scharringa Land

[9] On June 16, 1902, the Preston and Berlin Railway Company Limited (PBRC), a predecessor of CP, purchased a parcel of land from John Gehman and Nancy Gehman (Gehmans). The parcel was a strip of land 66 feet in width and consisted of 1.33 acre of land. This purchase resulted in the Gehmans’ parcel of land being divided by the railway company, that is, one portion on one side of the railway line and another portion was on the other side.

[10] The Scharringa Land is set out on Plan 58R-10710 deposited on January 25, 1997 with the Land Registrar for the Registry Division of Waterloo. The plan shows Parts 1 and 2, which are located on the northeast side of the railway line, and Parts 3, 4, 5, and 6, which are located on the northwest side of the railway line. The lane is comprised of Parts 4, 6, and 2.

[11] The Scharringa Land, through instrument 1409055, is subject to an easement in favour of the BHI Land over Parts 3, and 5, and through instrument 1409056, is subject to an easement in favour of the BHI Land over Part 1.

BHI Land

[12] On June 17, 1902, the PBRC purchased a parcel of land from Jacob Shantz and Lydia Shantz (Shantzs). The parcel was a strip of land 66 feet in width, and consisted of 2.05 acres of land. This purchase resulted in the Shantzs’ parcel of land being divided by the railway company, that is, one portion on one side of the railway line and another portion on the other side.

[13] The BHI Land is set out on Plan 67R-1448 deposited on March 14, 1979. The plan shows Parts 1, 18 and 19, which are located on the southeast side of the railway line and Parts 14, 15, and 16, which are located on the southwest side of the track. The lane is comprised of Parts 14, 16, 18 and 19.

POSITIONS OF THE PARTIES

Applicants

[14] The applicants maintain that the Developers intend to convey the shared lane to the municipality and that the lane will become a public road. Nevertheless, the applicants submit that there is nothing in the CTA that limits the use a private landowner may make of their lands or that limits the use of a private crossing that provides access to those lands. Furthermore, the applicants claim that there are precedents for the use of private crossings for public and commercial use access. According to the applicants, if the right to a crossing exists, then the crossing must be suitable and it is not for CP to dictate who and which type of vehicle may use the crossing.

Scharringa Land

[15] The applicants submit that, through succession in title, the Scharringa Land on both sides of the railway line has been owned by a single owner since 1903, when the land was divided by the sale of a strip of land to the railway company.

[16] The applicants filed a Continuity of Ownership Summary and solicitor’s opinion on title dated December 15, 2012, which was prepared by Anderson and Wylde, Barrister and Solicitors (AW). The legal opinion and chain of title sets out the chain of ownership for the Scharringa Land. According to AW, since the construction of the railway line, the land on the northeast side of railway line has been owned by the same owner as the 10‑foot parcel of land on the other side of the railway line. AW indicates that on February 5, 1999, the Ontario Realty Corporation transferred the title of the Scharringa Land to 395855 Ontario Limited by the registration of two instruments. Instrument 1409058 was for the transfer of the lands to the northeast of the railway corridor, Parts 1 and 2, and Instrument 1409059 was for the land between the railway line and King Street, Parts 3, 4, 5, and 6. AW points out that the transfers of title contain a restrictive covenant that sets out that Parts 3, 4, 5, and 6 cannot be sold or mortgaged unless sold or mortgaged to the owner of Parts 1 and 2.

BHI Land

[17] The applicants submit that, through succession in title, the BHI Land on both sides of the railway line has been owned by a single owner since 1903, when the land was divided by the sale of a strip of land to the railway company.

[18] The legal opinion and chain of title prepared by AW sets out the chain of ownership for the BHI Land. According to AW, since the construction of the railway line, the land to the east of the railway line has had the same owner as the 10-foot parcel of land on the other side of the railway line.

CP

[19] CP maintains that “a private crossing under section 102 of the CTA is a limited use crossing for a private property owner to gain access to his or her land. [...] It is not a public crossing for a commercial or retail development.”

[20] CP submits that the applicants are not requesting a crossing for their own access to the property but for contractors with trucks and heavy machinery to access the property for development purposes and eventually the general public for access to the proposed commercial and retail development. CP refers to Fafard v. Canadian National Railway Company et al., 2003 FCA 243 (Fafard), which indentifies the differences between the crossings under the jurisdiction of the CTA. CP points out that in Fafard, the Agency found that sections 102 and 103 of the CTA relate to cases where the owner wants access to their private property as compared to section 101, which relates to a crossing used by the general public. Further, CP claims that the development of the property, which will likely result in the property being transferred to different owners, is not a typical use of an owner’s private property. CP concludes that the applicants are in fact requesting, by its function and purpose, a public crossing.

[21] CP claims that the applicants have not provided sufficient evidence to meet the burden of proof for a private crossing under section 102 of the CTA. CP points out that, as set out in Coyne: Railway Law of Canada (Canada Law Book Co., Toronto, 1947), at p. 349, the right to a crossing under section 102 of the CTA is lost if the title of the land, which is divided by the construction of the railway line, is severed such that the land on one side of the railway line is severed from the land on the other side of the railway line, unless specific provision is made.

[22] CP submits that mileage 7.40 is a critical point due to the location of the Yard. CP argues that mileage 7.40 is not a suitable location for a crossing because the operations in the Yard involve switching long trains up to 5,500 feet long in and out of the Yard numerous times a day, and this switching would result in an at-grade crossing at mileage 7.40 being blocked for significant periods of time each day. CP maintains that a public crossing at mileage 7.40 used to access a development “would cripple” CP’s current operations.

Scharringa Land

[23] CP contends that the small parcel of land on the other side of the railway line should not entitle the applicants to access land beyond the boundary of the land contained in the original title (Lot 13) at the time when the land was divided by the construction of the railway line. That is to say, the small parcel should not entitle the applicants to gain access to other lands including the 225 acres to be developed.

[24] CP submits that in 1999, the Scharringa Land was subdivided, with Parts 3, 4, 5, and 6 on Instrument 1409058, and Part 1 on a separate instrument.

[25] CP provided a two page memorandum on the history of titles prepared by Fasken Martineau DuMoulin LLP (FMD) dated November 28, 2012, relating to the chain of title of the Scharringa Land and the BHI Land.^{Note 1}

BHI Land

[26] CP claims that the BHI Land was severed and no title or interest in land continued on the other side of the railway line.

[27] According to FMD, in 1904, after Jacob Shantz, the owner of the BHI Land, purchased the Scharringa Land, the lane/right-of-way interest “merged in fee” and as a result the lane/right‑of‑way interest no longer existed. In 1959, through the transfer of title from Benjamin Shantz to Delmer Wideman and Ortha Wideman, the BHI Land included the 20-foot lane, with 10 feet on each side of the centre line between the BHI Land and the Scharringa Land.

ANALYSIS AND FINDINGS

[28] Based on the documentation filed by the parties, the summary of events listed in Appendix A can be established with respect to the history of the Scharringa Land and the BHI land. Appendix A can be established with respect to the history of Lot 13.

Preliminary issue

[29] The applicants filed their application pursuant to section 102 of the CTA, or in the alternative, section 103. CP contends, and the applicants agree, that there is an intention for the requested private crossing to be used to access the lands on the far side of the railway line in order to develop those lands. The applicants have been forthright that the Developers propose to develop the “Creekside Business Park” on these lands and would like to have the shared lane conveyed to the road authority. CP argues that as the crossing will be used for developing the land and eventually for accessing the proposed business park, it will actually be a public crossing.

[30] With respect to CP’s submission that the crossing will actually be a public crossing, the Agency notes that the CTA does not include a definition of either private or public crossings. Sections 102 and 103 of the CTA, which are prefaced by the heading “Private Crossings,” generally govern cases in which a land owner seeks access to their property, while section 101, which is included under the heading “Road and Utility Crossings,” generally deals with crossings that are to be used by the general public. The Agency also notes that while the applicants submit that the Developers plan to develop the Scharringa Land and the BHI Land into a business park, this statement is hypothetical, as the crossing requested will be located on private land and there is no evidence that a road authority agrees that the road be declared public once the crossing is approved.

[31] Further clarity on the distinction between section 101 and sections 102 and 103 of the CTA can be found in Decision No. 448-R-2004. In that Decision, the Agency noted that, while the CTA does not restrict the application of section 101 of the CTA to public crossings, subsection 101(5) states that section 101 shall not apply in circumstances where section 102 or section 103 applies. The decision also states that the Agency is of the opinion that section 102 of the CTA applies in circumstances where “an owner’s land is divided by the construction of a railway line and the landowner requests [...] a suitable crossing.” In light of the above, the Agency finds that in this case, the applicants, as the owners of the subject lands divided by the construction of the railway line in 1903, have the necessary status to submit an application pursuant to section 102 of the CTA. The Agency will therefore proceed with the application pursuant to section 102 of the CTA.

Section 102 statutory right

[32] Section 102 of the CTA states that “If an owner’s land is divided as a result of the construction of a railway line, the railway company shall, at the owner’s request, construct a suitable crossing for the owner’s enjoyment of the land.”

[33] As stated in Decision No.185-R-2001, the Agency and its predecessors have held that the right to a private crossing pursuant to section 102 of the CTA arises when the railway divides the lands of an owner in such a way as to leave a parcel of his land on each side of the railway. The continuation of that right is dependent upon continued ownership of the parcel of land on either side of the railway. However, if there is severance of the title to the two parcels then the right to a section 102 private crossing is lost unless specific provision has been made. This is consistent with Coyne who states on page 349 (with respect to section 272 of the Railway Act, S.C., 1927, c. 170 - later section 215 of the Railway Act, R.S.C., 1985, c. R-3:

The right arises under this section when the railway is carried across the lands of an owner in such a way as to leave a parcel of his land on each side of railway. The right is lost upon the complete severance of the title to the two parcels: Hillhouse v. CPR, 17 C.R.C. 427, 20 D.L.R. 907. There is no such complete severance of the title, and therefore the right to a crossing is not lost, if the owner of the two parcels, in conveying one of them, reserves a right of way over it, or grants a right of way over the other parcel: Ibid T.H. & Ry v. Simpson, 8 C.R.C. 464, 17 O.L.R 632.

[34] The burden of proving that a statutory right to a private crossing exists falls upon the applicant. In this case, to establish the right to a crossing under section 102 of the CTA, the applicants must establish, on the balance of probabilities, historical ownership to date of the land on both sides of the railway. Evidence of the history of ownership of the land is a key component in establishing a right under section 102 of the CTA.

Scharringa Land

[35] The Agency notes that CP does not dispute that the Scharringa Land was divided by the construction of the railway line in 1903.

[36] As for the continuity of ownership, CP does not dispute the applicants’ submission on the history of the chain of title that took place before 1997 or after 1999. However, CP contends that in 1999, the title of the Scharringa Land was severed when two instruments were registered for the land. The applicants submit that the instruments contain a restriction prohibiting the parcels from being owned by different owners. CP does not mention this restriction.

[37] CP does not dispute that the instruments were registered on the same day and were for the transfer of title of the two parcels of land to the same owner, 395855 Ontario Limited. However, the applicants claim that the instruments contain a restriction and CP is silent on this issue. Although the instruments themselves were not submitted by the applicants or CP, AW’s legal opinion points out that the transfers of title contain a restrictive covenant setting out that Parts 3, 4, 5, and 6 cannot be sold or mortgaged unless sold or mortgaged to the owner of Parts 1 and 2. In addition, the Agency notes that without Parts 3, 4, 5, and 6, Parts 1 and 2 cannot be accessed by King Street.

[38] Based on the submissions of both parties in this case, the Agency is of the opinion that the transfer instruments do contain a restriction that ensures that the two parcels of land will be owned and mortgaged by the same owner, which prevents complete severance of the land, even though ownership is recorded on two different instruments. The Agency is of the opinion that the restriction set out in the instruments constitutes a specific provision sufficient to ensure that the Scharringa Land cannot be completely severed. The Agency therefore finds that the title of the Scharringa Land has not been completely severed. Therefore, the Agency finds that the applicants have established, on the balance of probabilities, that a statutory right to a private crossing pursuant to section 102 of the CTA exists with respect to the Scharringa Land.

BHI Land

[39] The Agency notes that CP does not dispute that the BHI Land was divided by the construction of the railway line in 1903.

[40] As for the continuity of ownership, CP does not dispute the applicants’ submission on the history of the land title that took place after 1904. However, CP contends that in 1904 the right-of-way along the lane was lost when Jacob Shantz, the owner of the BHI Land, also became the owner of the Scharringa Land and that the right-of-way did not reappear in title documents until 1959. CP does not argue that the parcel of the BHI Land where the lane is located was severed from the major part of the BHI land, only that the lane/right-of-way interest ceased to exist until 1959. CP attempts to link the continuity of a right-of-way over the lane with the continuity of the chain of ownership of the divided land. However, the Agency does not consider the continuous existence of a right-of-way to be relevant. As long as the title for the land located on both sides of the railway line is not severed, the chain of ownership is maintained and the statutory right to a private crossing pursuant to section 102 remains. As the title of the BHI Land has not been severed, the Agency finds that the applicants have established, on the balance of probabilities, that a statutory right to a private crossing pursuant to section 102 of the CTA exists with respect to the BHI Land.

Suitable crossing

[41] CP argues that a suitable crossing cannot be constructed at mileage 7.40 of the Waterloo Subdivision because of the operations at the Yard.

[42] The Agency has found above that a right to a suitable crossing has been established pursuant to section 102 of the CTA.

[43] The Federal Court of Appeal in Fafard noted at paragraph 5 and 10, that once a right to a suitable crossing has been established pursuant to section 102 of the CTA, a railway company has no choice but to construct a crossing that is appropriate for the purposes for which it was intended and installed:

[...] described section 102 as mandatory [...]. Section 102 covers the detrimental situation where an owner’s land is divided in two by a railway line. The railway company has no choice: it must construct a suitable crossing for the owner of the land who otherwise would be deprived of the enjoyment of a part of his land, and it must bear the costs of doing so. Parliament has imposed this obligation on the company.

[...]

Lastly, the concept of “suitable crossing” (in French, “passage convenable”) in section 102 and subsection 103(1) of the Act, by definition, includes an element of safety. A suitable crossing is a crossing that is adequate and appropriate for the purposes for which it was intended and installed.

[44] The term “suitability” is not defined in the CTA. However, the Agency addressed the issue (in the context of an application for a section 103 private crossing) in Order No. 1998-R-307:

[...] In this instance, the Agency finds that the construction of a crossing at this location is necessary for the owners’ enjoyment of their land. [...] The Agency is of the opinion that a suitable crossing at this location will consist of a crossing which provides access to the public road when required, and which is not blocked for excessive periods of time. Should the parties be unable to agree on what is considered to be excessive periods of time, an application may be made to the Agency for a determination on this matter.

Accordingly, the Agency [...] hereby orders CN to construct a suitable crossing [...].

[45] In light of Fafard, the Agency is of the opinion that the difficulty and the costs required to rearrange the yard are not valid criteria to dismiss the application. Rather, the general principle is, as the Agency noted in Decision No. 311-R-1990 when it ordered the respondent to build a suitable crossing to the benefit of the applicant (with respect to section 215 of the Railway Act, 1985 – now section 102 of the CTA):

CP’s obligation to provide a crossing under section 215 of the Railway Act is not relieved due to the difficulty of conditions. If a crossing at grade does not provide a convenient and suitable crossing, CP should explore the possibility of either an underpass or an overpass or any other alternative to provide Mr. Taylor with access to his land.

[46] Having found that a right to a suitable crossing has been established pursuant to section 102 of the CTA, and considering that no safety reasons prevent its construction, the Agency finds that CP must provide a suitable crossing to the applicants.

COSTS

[47] The applicants seek their costs with respect to the application in accordance with section 25.1 of the CTA. According to the applicants, CP’s refusal to provide a crossing has resulted in a costly delay.

[48] The Agency’s practice for such requests is to award costs only in special or exceptional circumstances. The Agency finds that this case does not meet those special or exceptional circumstances and therefore denies the applicants’ request.

CONCLUSION

[49] The Agency finds that the applicants have provided sufficient evidence to support an entitlement to a private crossing for both the Scharringa Land and the BHI Land pursuant to section 102 of the CTA. The Scharringa Land and the BHI Land were each divided by the railway line in 1903. Further, the Scharringa Land was not completely severed by the issuance of two separate transfers of title due to the restriction that the lands be owned and mortgaged by the same owner, and the BHI Land was not severed. As the applicants have requested a single crossing to be constructed on the shared lane of 20 feet in width at mileage 7.40 of the Waterloo Subdivision, the Agency grants the applicants a single crossing at or near mileage 7.40 of the Waterloo Subdivision. Considering that there are no safety reasons that prevent its construction, the Agency finds that CP must provide a suitable crossing to the applicants. As a result of this finding, the Agency is not required to address whether the applicants are entitled to a private crossing pursuant to section 103 of the CTA.

ORDER

[50] CP is ordered to provide a single suitable crossing at or near mileage 7.40 of the Waterloo Subdivision. The costs of construction and maintenance of the suitable crossing shall be paid by CP. Further, if the parties cannot come to an agreement on what constitutes a suitable crossing, they can seek a determination from the Agency.

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APPENDIX A TO DECISION NO. 80-R-2013

Summary of the relevant conveyances of the BHI Land and the Scharringa Land. (Dates may refer to instrument date or registration date)

Scharringa Land

June 16, 1902 (Instrument 15857) – The Preston and Berlin Railway Company Limited, a predecessor of CP, purchased a parcel of land from John A. Gehman and Nancy Gehman.

April 28, 1904 (Instrument 16339) – John Wismer purchased the land from John A. Gehman.

May 2, 1904 (Instrument 16353) – Jacob Shantz purchased the land from John Wismer.

May 2, 1904 (Instrument 16354) –Irvin Shantz purchased the land from Jacob Shantz.

May 26, 1943 (Instrument 34841) – Clarence Shantz and Salome Shantz purchased the land from Irvin Shantz.

March 1, 1965 (Instrument 294662) – Calgor Holdings Ltd. purchased the land from Clarence Shantz and Salome Shantz.

August 19, 1966 (Instrument 330215) – Renmore Developments purchased the land from Calgor Holdings Ltd.

June 28, 1968 (Instrument 375488) – John M. Harper in Trust purchased the land from Renmore Developments.

November 8, 1968 (Instrument 384586) – Ontario Housing Corp. purchased the land from John M. Harper in Trust.

May 6, 1997 (Instrument 1336050) – Ontario Realty Corp. purchased the land from Ontario Housing Corp.

February 5, 1999 (Instruments 1409058 and 1409059) – 395855 Ontario Ltd purchased the land from Ontario Realty Corp.

April 14, 2000 (Instrument 1454231) – 575482 Ontario Ltd purchased the land from 395855 Ontario Ltd

BHI Land

June 17, 1902 (16008) - The Preston and Berlin Railway Company Limited, a predecessor of CP, purchased a parcel of land from Jacob Shantz and Lydia Shantz.

September 10, 1909 (18576) – Benjamin Shantz purchased the land from Jacob Shantz.

June 15, 1959 (186584) – Delmar Wideman and Ortha Wideman purchased the land from Benjamin Shantz.

January 14, 1971 (5000182) – Eat N’Putt Ltd purchased the land from Delmar Wideman and Ortha Wideman.

July 30, 1993 (1179780) – Rosaceous Enterprises Ltd purchased the land from Eat N’Putt Ltd.

April 7, 1994 (1208967) – Gert Andersen purchased the land from Rosaceous Enterprises Ltd.

June 30, 2000 (1462607) – Benninger Holdings Inc. purchased the land from Gert Andersen.