Scott Worldwide Inc. v. MacDonnell Estate

Scott Worldwide Inc. v. MacDonnell Estate Court Court of Appeal Date 1997-07-16 Citation 1997 NSCA 112 Docket 135879, CA 135872 Judge/Registrar/Adjudicator Pugsley, Ronald N. (Honourable Justice); Flinn, Edward J. (Honourable Justice); Roscoe, Elizabeth A. (Honourable Justice) (CA) Document Type Decision Relations Library Sheet - Scott Worldwide Inc. v. MacDonnell Estate - 1997 NSCA 112 - 1997-07-16 - Library Sheet Decision Content Date: 19970716 Docket: C.A. 135872 C.A. 135879 NOVA SCOTIA COURT OF APPEAL Roscoe, Pugsley and Flinn, JJ.A. Cite as: Scott Worldwide Inc. v. McDonell Estate, 1997 NSCA 112 BETWEEN: SCOTT WORLDWIDE INC. ) Thomas E. Hart ) for the Appellant Appellant ) Scott Worldwide Inc. ) - and - ) ) Colleen P. Keyes ) for the Appellants ESTATE OF EDWARD McDONELL, by ) Lloyd & Ruby Bent JOSEPH A. MacDONELL, Administrator ) de bonis non ) Joseph A. MacDonell ) for the Respondent ) Respondent ) Appeal Heard: ) May 23, 1997 ) AND BETWEEN: ) ) LLOYD A. BENT and RUBY M. BENT ) ) Judgment Delivered: Appellants ) July 16, 1997 ) - and - ) ) ESTATE OF EDWARD McDONELL, ) by JOSEPH A. MacDONELL, Administrator ) de bonis non ) ) Respondent ) ) ) ) ) THE COURT: Leave to appeal is granted and the appeal is allowed per reasons for judgment of Flinn J.A.; Roscoe and Pugsley JJ.A. concurring. FLINN, J.A.: The issue in this appeal involves the interpretation of a reservation of timber rights, in favour of Edward C. McDonell, in a deed, from Edward C. McDonell and others, dated November 17th, 1900. The reservation provides as follows: Reserving to the said Edward C. McDonell the right to cut and carry away the standing timber on the lands herein described, the said The Renfrew Consolidated Gold Mining and Milling Company and its assigns to have the right to cut and use any timber on said lands that it may deem necessary for mining and milling purposes. The respondent's position is that the words of the reservation are an "exception", excepting out of the conveyance a fee simple estate in the trees on the subject lands. As a result, that title passed to Mr. MacDonell's estate when he died in 1908. The appellants' position is that the right created by the reservation was, at best, a life interest only, which came to an end on Mr. McDonell's death. The respondent, on behalf of the estate of Edward C. McDonell, commenced an action in the Supreme Court of Nova Scotia, for a declaration as to the estate's title with respect to the timber, an accounting and damages. Prior to trial the parties made an application to Justice Goodfellow of the Supreme Court of Nova Scotia under Civil Procedure Rule 25 for the determination of a point of law prior to trial. The parties proceeded on an agreed statement of facts. That agreed statement of facts is as follows: AGREED STATEMENT OF FACTS 1. A 1990 [sic] Deed from Jane Saunders Andrews et al to Renfrew Consolidated Gold Mining & Milling Company reserved to Edward C. McDonell, one of the grantors, the following: 'Reserving to the said Edward C. McDonnell [sic] the right to cut and carry away the standing timber on the lands herein described, the said The Renfrew Consolidated Gold Mining and Milling Company and its assigns to have the right to cut and use any timber on said lands that it may deem necessary for Mining and Milling purposes.' 2. Scott Worldwide Inc. is a successor in title to The Renfrew Consolidated Gold Mining and Milling Company and, subject to the validity of any claim of the Estate of Edward C. McDonell, are the owners in the fee simple interest in the lot granted under Grant Number 6634. 3. Lloyd and Ruby Bent are also successors in title to The Renfrew Consolidated Gold Mining and Milling Company and, subject to the validity of any claim of the Estate of Edward C. McDonell, are the owners in the fee simple interest in the lot granted under Grant Number 6634. 4. There is a lease on record dated July 17, 1905 between Edward C. McDonnell and Clarence J. Silliker et al. which grants the right to take all logs, timber and wood above six inches in size at the top end on Grant Number 7220, 6151 and 8412 for a period of ten years. 5. This lease was assigned by the Lessees to the Eastern Lumber Co. Ltd. on July 29, 1909 for the balance of the ten year term. 6. Edward Charles McDonell died on March 31, 1908 leaving a Will dated March 19, 1908 directing that 'the property near Renfrew known as the R.N.B. McLellon lot consisting of five hundred acres be sold after the expiry of lease that now covers it and the proceeds added to the estate and divided among the eight children above named.' 7. An agreed Abstract is attached together with agreed typewritten versions of the documents which were entered in the Registry Books in handwritten form. 8. Attached to this Statement of Facts is a copy of the Warrant of Appraisement and Inventory of the Estate of Edward C. McDonell and Amended Inventory. ISSUE: 9. What is the effect, if any, of the reservation of timber rights in favour of Edward Charles McDonell in the 1900 Deed. There are three matters to note with respect to this agreed statement of facts: 1. It is agreed that the reference in paragraph 1 of the Agreed Statement of Facts to 1990 should read 1900. 2. In interpreting the reservation clause in the conveyance in question, it is important to understand the limited interest which Edward C. McDonell had, in the lands, at the time of the conveyance. I have not attached the entire abstract of title referred to in paragraph 7 of the Agreed Statement of Facts. That abstract shows that a 1/2 interest in the property, which is the subject of the 1900 conveyance, was conveyed in 1888 to Edward C. McDonell and one John Lyle, their heirs and assigns. The conveyance in 1900, referred to in paragraph 1 of the Agreed Statement of Facts, was from the heirs of John Lyle and Edward C. McDonell to The Renfrew Consolidated Gold Mining and Milling Company. Therefore, the interest in the lands which was being conveyed by Mr. McDonell was only a 1/4 interest. 3. The abstract of title also shows that two of the parties, identified as grantors in the 1900 conveyance, did not sign the document. One of the heirs of John Lyle, namely Lottie Lecky, and her husband Charles B. Lecky, did not execute the deed. The Chambers judge decided that the reservation in favour of Edward C. McDonell is an "exception", excepting out of the conveyance, a fee simple interest in the trees. That fee simple interest, he decided, was with respect to trees which were alive on the date of the conveyance, and capable of becoming timber at some future time, or those which had become timber. The respondent, by way of cross-appeal, claims that the interest was with respect to "all trees which grew or came into being at any time" after the date of the conveyance. The appellants submit that Chambers judge erred in his interpretation of the reservation. By agreement of counsel, the appellants, Lloyd and Ruby Bent, did not file a factum, and did not participate in the hearing of the appeal. Mr. and Mrs. Bent endorsed and adopted the arguments advanced by the appellant Scott Worldwide Inc. I agree with the submissions of counsel for the appellant, and have concluded, with respect, that the Chambers judge, erred in his interpretation of the reservation. I will set out my reasons for coming to that conclusion. The authorities do establish that an estate of inheritance can be granted in a tree, with an interest in the soil sufficient for its growth, while the fee in the soil remains with the grantor. These authorities are summarized in Law of Uses and Profits of Land, Leake, 1888 at p. 30: A grant, or an exception from a grant, of the trees growing in certain land, creates a property in the trees, separate from the property in the soil; but with the right of having them grow and subsist upon it. An estate of inheritance in a tree may thus be created; which would be technically described as a fee conditional upon the life of the tree. Also there may be a grant or exception of trees thereafter to grow on the soil. The separate property in trees growing and to grow upon certain land, admittedly the property of another, may also be proved by acts of ownership in cutting and taking away trees from time to time; the presumption from such evidence being that the land had been originally granted away, with an exception of the trees then growing or thereafter to grow in the soil. A grant or exception of trees apart from the soil implies a right to enter upon the land for the purpose of cutting and taking the trees, as a necessary incident of the property in the trees. - A licence to enter upon land and to cut down trees and take them away may be granted by the owner of the land without conveying to the grantee any property in the soil, or in the trees until cut down and taken by him. Such right would be in the nature of a profit à prendre or profit to be taken from the land of another; and it is, therefore, treated hereafter in connection with that class of rights. (emphasis added) See also Beatty v. Mathewson, [1908] 40 S.C.R. 557; and Smith et al v. Daly and Booth Lumber Ltd., [1949] 40 D.L.R. 45 (Ont. H.C.). Considering these authorities, the issue in this case may be stated as follows: Does the reservation, in the conveyance of 1900, except out of the lands being conveyed, a fee simple interest in the trees; or does the reservation, simply, reserve out a right, in the nature of a profit à prendre, to enter upon the land and to cut down trees and take them away, without excepting out any property in the soil, or in the trees, until cut down and taken? In my opinion, it is clearly the latter. The reservation does nothing more than to give Mr. McDonell a right, in the nature of a profit à prendre, to enter upon the land, to cut down trees and to take them away. Whether that right was for a reasonable period of time, or for Mr. McDonell's life time, it would have expired, at the latest, upon his death in 1908. To explain the distinction between an "exception" and a "reservation", I refer to the following, which appears in Anger and Honsberger on Real Property, 2nd ed., vol. 2, 1982 at pp. 1289-91 : In Cooper v. Stuart, (1889) 14 App. Cas. 286 (P.C.) at pp. 289-90, Lord Watson described an exception to be "that by which the grantor excludes some part of that which he has already given, in order that it may not pass by the grant, but may be taken out of it and remain with himself. A valid exception operates immediately and the subject of it does not pass to the grantee. . . . . . Technically, the term "reservation" implies something in the nature of a rent, but it is frequently used to signify some incorporeal right which the grantor is to have over what is granted, such as the right to hunt or fish, or a right of way. It then operates as a regrant of the right by the grantee to the grantor. Where a grant to a railway company reserved to the grantor one good and sufficient crossing, it was held that the reservation operated as a regrant of a right of way and was not an exception of part of the land conveyed. The terms are defined in Black's Law Dictionary, 6th edition, as follows: Exception. An exception operates to take something out of the thing granted which would otherwise pass or be included. Such excludes from the operation of conveyance the interest specified and it remains in the grantor unaffected by the conveyance. Reservation. A clause in a deed or other instrument of conveyance by which the grantor creates, and reserves to himself, some right, interest, or profit in the estate granted, which had no previous existence as such, but is first called into being by the instrument reserving it; such as rent, or an easement. Reservation occurs where (the) granting clause of the deed operates to exclude a portion of that which would otherwise pass to the grantee by the description in the deed and "reserves" that portion unto the grantor ..... In reviewing the words of the reservation in the 1900 deed, to determine if the words operate as an "exception" or a "reservation," I note the following which is stated in Elphinstone's Interpretation of Deeds, 1885 at p. 47: When the words used in a deed are in their primary meanings unambiguous, and when such meanings are not excluded by the context, and are sensible with respect to the circumstances of the parties at the time of executing the deed, such primary meanings must be taken to be those in which the parties used the words. I repeat, here, the actual wording of the reservation contained in the 1900 deed: Reserving to the said Edward C. McDonell the right to cut and carry away the standing timber on the lands herein described, the said The Renfrew Consolidated Gold Mining and Milling Company and its assigns to have the right to cut and use any timber on said lands that it may deem necessary for mining and milling purposes. (emphasis added) In my opinion, in their primary meaning, the words of this reservation, are clear and unambiguous. A fee simple interest, in the timber, is not excepted out of the conveyance. Not only is the word "exception" or the phrases "excepting out" or "excepting out the trees" not used, the clear right which is stated in the reservation is "the right to cut and carry away the standing timber on the lands herein described". It would be stretching those words far beyond their primary meaning to attribute to them that Mr. McDonell has excepted out of the lands described in the deed, a fee simple interest in the standing timber. The words of the reservation import nothing more than a right, in the nature of a profit à prendre to enter upon the land and to cut down trees and take them away. In the case of Duke of Sutherland v. Heathcote [1892] 1 ch. 475, the Court considered the meaning of the following reservation contained in a deed: Saving and reserving nevertheless to the said, [Grantors], and to their heirs and assigns, full and free liberty by all necessary ways and means to search for, get, dig, drain, and carry away, the coal, ironstone, and minerals which may or shall be found within the several lands hereby granted and exchanged from them,.... Lord Justice Lindley, writing for the Court, said the following at p. 483: Counsel for the Appellant contended that the reservation clause ought to be construed as an exception of the mines and minerals. But this, we think, would be to violate well-settled rules of conveyancing. The words used are not apt for the purpose. No conveyancer intending to except mines and minerals from a conveyance of lands would express his intention by reserving a liberty to get minerals. Similarly, no conveyancer intending to except trees from a conveyance of lands would express his intention by reserving "the right to cut and carry away" trees. The words are, simply, not appropriate to create an exception, from the conveyance, of a fee simple interest in the trees. This is even more evident in this case where the person (Edward C. McDonell), for whom the reservation is made, did not have the entire fee simple interest to begin with. He only had a 1/4 interest. Two of the cases on which the respondent relies, namely, John Austin & Sons Ltd. v. Smith et al (1982), 132 D.L.R. (3d) 311 (Ont. C.A.) and Smith et al v. Daly and Booth Lumber Ltd. (supra) are not only of no assistance to the respondent, those cases demonstrate the kind of wording that is required to except out, from a conveyance, a fee simple interest in timber. In the Austin case, the wording of the exception was as follows: SAVING and EXCEPTING and RESERVING thereout and therefrom all timber or forest products located on said Lot number FIVE; together with the privilege of trespassing over and upon the said Lot FIVE for the purposes of removing the said timber of forest products; In the Daly and Booth Lumber case, the wording of the exception was as follows: Saving and Excepting the reservations and exceptions contained in the original patent from the Crown, namely, .....all Pine trees and other merchantable timber of every kind standing or being on said lands. These cases are clearly of no assistance to the respondent, who claims a fee simple title to trees under a reservation clause which reserves, "the right to cut and carry away" trees. Further, as will be seen, there is nothing in the context of the conveyance which would indicate any contrary meaning to the plain words of the reservation. In his analysis, the Chambers judge said the following: It is helpful to ascertain the intention of the grantee. In 1900 Renfrew Consolidated Gold Mining and Milling Company purchased the property. It is reasonable to assume that the Company did so for the purposes of mining and milling. Its interest, and therefore its intention, was primarily to conduct its business on and under the land, the ownership of which it acquired. ..... In addition to acquiring ownership, we have the clear confirmation of the mining company's intention by virtue of the inclusion of the words "to have the right to cut and use any timber on said lands that it may deem necessary for mining and milling purposes". It seems clear that the mining and milling company only intended to take title subject to its limited right to cut and use timber for its mining and milling purposes. The basis entitlement and title to the timber would appear to have remained with Edward C. McDonell. Turning to the intent of the grantors, it appears clear that all of the grantors, with the exception of Edward C. McDonell, conveyed whatever interest they had to Renfrew Consolidated Gold Mining and Milling Company and the only retention of any interest was that of the grantor, Edward C. McDonell. There is no limitation with respect to time, size, merchantable quality or whatever, and the description is one of "standing timber on the lands"...... There being no specific direction as to what constitutes standing, ie. size, time frame, etc., I would think the most rational interpretation by the parties would be to equate standing timber with what existed in the nature of trees at the time of the retention by Edward C. McDonell of this interest. The intention of the grantors I derive from the terminology is confirmed, in my view, by the conclusion I reach with respect to the intention of the mining and milling company at the time it acquired the property with the right to cut and utilize trees for a limited purpose which right was a mere limitation on the interest in the trees not parted with by Edward C. McDonell. The successors of the Renfrew Consolidated Gold Mine and Milling Company were on notice of the cloud on their title which I conclude was intended to be and constituted an exception. I find therefore that the intent of the parties is clearly discernable from the document and that it intended to except from the conveyance a property right in Edward C. McDonell which was limited only by a form of licence to the owner of the property, the mining and milling company for the limited purpose of cutting and using timber to the extent it may be deemed necessary for mining and milling purposes. I have no doubt that in the present case, the exception in the Deed is a reservation of the fee simple in the trees and not merely a reservation of a chattel interest which would be a mere right to go in and cut trees. I agree with the Chambers judge that it is clear that all of the grantors (at least those who signed the deed), with the exception of Edward C. McDonell, conveyed whatever interest they had to Renfrew Consolidated Gold Mining and Milling Company, and the only retention of any interest was that of the grantor Edward C. McDonell. However, Edward C. McDonell only had a 1/4 interest in the property to begin with. Therefore, any fee simple interest excepted out of the conveyance, by Edward C. McDonell, could only relate to his 1/4 interest. The Chambers judge did not address this problem. Similarly, if it could be argued that the intention of all of the grantors was to except out of the conveyance, a fee simple interest in the trees, in favour of Edward C. McDonell, the laws respecting conveyancing which existed in 1900 would require that the exception be made in favour of Edward C. McDonell "and his heirs". Without the words "and his heirs", such a conveyance amounts only to a conveyance of a life estate. This law was changed by the Conveyancing Act, S.N.S. 1956, c. 3; however, the conveyance under consideration in this appeal must be viewed in light of the laws which existed in 1900. In Millard v. Gregoire (1913), 47 N.S.R. 78 this Court held that the omission of the word "heirs" from a deed conveying land to a mortgagee had the effect of conveying a life estate only and not the fee simple. The Chambers judge, in his decision, did not deal with this issue. Nor did the Chambers judge address the fact that two of the grantors did not sign the deed. It appears that the Chambers judge came to his conclusion as a result of inferences which he drew as to the intention of the parties. This can be seen from the references to his decision which I have quoted above. I agree with counsel for the appellant that this conclusion of the Chambers judge is "in direct conflict with his own factual finding that the grantors, other than McDonell, intended to convey their entire interest to Renfrew Consolidated Gold Mining and Milling Company." Further, the Chambers judge appears to conclude that the intention of the grantors was to convey a fee simple interest in the timber to Mr. McDonell. Not only is there no evidence to support such a conclusion, the absence of signatures, of two of the grantors, on the deed negates any such conclusion. In conclusion, and in summary, the reservation in the deed dated November 17th, 1990, which is the subject of this appeal, did not except out of the conveyance a fee simple interest in the trees on the lands which were conveyed in favour of Edward C. McDonell, and the Chambers judge erred in deciding otherwise. Whether the right which Mr. McDonell acquired, by virtue of the reservation, was for a reasonable period of time or for his life time, it is not necessary to decide. Whatever the extent of the right which Mr. McDonell acquired by virtue of the reservation, such right ended upon his death. I would grant leave to appeal, and I would allow this appeal. I would set aside the findings and order of the Chambers judge. As to the question which the parties submitted to the Chambers judge in paragraph 9 of the Agreed Statement of Facts: What is the effect, if any, of the reservation of timber rights in favour of Edward Charles McDonell in the 1900 deed?" I would answer: that it reserved to Mr. McDonell a right, in the nature of a profit à prendre, to enter upon the lands which were conveyed in the deed and to cut down trees and take them away; and that such right ended, at the latest, at the time of Mr. McDonell's death in 1908. Having come to this conclusion, it is not necessary to deal with the issue raised by the respondent's cross-appeal. As in the court below, and as counsel for the parties have agreed, each of the parties will bear their own costs of this appeal. Flinn J.A. Concurred in: Roscoe J.A. Pugsley J.A. C.A. No. 135872 C.A. No. 135879 NOVA SCOTIA COURT OF APPEAL BETWEEN: SCOTT WORLDWIDE INC. ) Appellant ) - and - ) REASONS FOR ) JUDGMENT BY: ESTATE OF EDWARD McDONELL, by ) JOSEPH A. MACdonell, Administrator ) FLINN, J.A. de bonis non ) Respondent ) ) AND BETWEEN: ) ) LLOYD A. BENT and RUBY M. BENT ) ) Appellants ) ) - and - ) ) ESTATE OF EDWARD McDONELL, by ) JOSEPH A. MacDONELL, Administrator ) de bonis non