Tonks v. Terasen Gas Inc.

2004 BCSC 718 Tonks v. Terasen Gas Inc.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Tonks v. Terasen Gas Inc. 2004 BCSC 718 Date: 20040531 Docket: C982143 Registry: Vancouver Between: Gary Tonks Ltd. Plaintiff And Terasen Gas Inc. Defendant Before: The Honourable Mr. Justice Rogers Reasons for Judgment Counsel for the plaintiff: F.L. Lamer Counsel for the defendant: J.L. Hayes Date and Place of Hearing: May 18, 19, 20, 2004 Vancouver, B.C. Introduction [1] In this summary trial the plaintiff seeks a number of declarations to the effect that the defendant is in breach of the express or implied terms an easement agreement over the plaintiff's property. The plaintiff also seeks a declaration that the easement constitutes a private nuisance of the plaintiff's enjoyment of its property. The defendant is a utility. It owns and operates three gas pipelines buried under a right-of-way created by the easement agreement. The property in question is on the shore of the Fraser River near Richmond B.C. [2] The relief claimed in the notice of motion is: 1. A declaration that the defendant was and continues to be in breach of the express or implied terms of the right of way agreement dated May 9, 1960 between Canadian National Railway Company and British Columbia Electric Company Limited ("ROW Agreement") by failing to make, at its own expense, adequate preparation of the soils in the right of way provided for in the ROW

Agreement (the "Right of Way") or to take such other steps as may be necessary to accommodate the reasonable and foreseeable use and development of the Plaintiff's lands legally described as follow ("Lands"): <legal description omitted> 2. A declaration that the defendant is in breach of its obligation to allow the plaintiff to place land fill and pavement over the right of way to elevate the right of way to the same level as the lands.

3. A declaration that, pursuant to the express or implied terms of the ROW Agreement, the plaintiff has an unrestricted right to: a) use the area of the lands located outside the right of way for any purpose whatsoever, without compensation to the defendant for the cost of upgrading its pipelines; and b) place landfill and pavement on the area of the right of way to the same elevation as the remainder of the lands, without compensation to the defendant for the cost of upgrading its pipelines; 4. Such other declaration or direction as this court may deem fit; 5. A declaration that the defendant has committed the tort of nuisance; 6. An order that all other relief requested by the Plaintiff in the statement of claim, including injunctive relief and damages, be adjourned generally; 7. Costs. History [3] The plaintiff and defendant are successors in title to the parties that negotiated the easement agreement. Those original parties were the Canadian National Railway as land owner and British Columbia Electric Company Limited as the utility. The utility first proposed the easement to the owner in 1959. I will refer to the property in question as Lot 3. Lot 3 is about 5 acres in size. It is a narrow rectangular piece of land, longer north to south than it is wide east to west. The southern edge of the property is bounded by the Fraser River, the northern edge is defined by River

Road, to the west lies a road allowance and to the east is private property. [4] Back in 1959 the utility wanted to construct a pipeline through Lot 3. The utility proposed to CNR that it should grant the utility a pipeline easement along a narrow strip of Lot 3. That strip would comprise the lot's most westerly 50 feet and would run the full length of the property's western edge between River Road and the Fraser River. After some negotiation, the content and import of which the present parties contest, the CNR agreed to grant the easement. The utility paid CNR $2,475 in consideration for the easement. That figure was the original compensation offered and was not changed throughout the negotiations. [5] One pipeline was actually constructed on the lot before the easement was fully negotiated and executed. Some time later the utility built two more pipelines under the easement. Later still the utility decided that it required ownership of a part of the easement property. Counsel at the summary trial advised the utility made this decision because there is a valve or control device on that small piece of property. The utility purchased that piece. It turned out to be a square section of land on the easement somewhat closer to the River than to the road. That parcel was subdivided away from the land. The subdivided parcel became Lot 7. Naturally, the easement merged into title of

Lot 7. [6] When the easement was negotiated the natural elevation of Lot 3 was about 10 feet below the 100 year flood plain and the land was vacant and unused. There was no evidence at trial that regulations in 1959-1960 required that the land be raised to any particular elevation in order for it to be used for industrial purposes. There was evidence that CNR believed that the land would have to be filled to some degree to be used for industry, but whether that fill requirement was only 1 inch or 10, or 1 foot or ten is not something that could not be determined on the evidence. I cannot conclude on the evidence at the summary trial that the amount of fill required to put the property to industrial use was a significant or an insignificant volume. [7] Lot 3 was still at its original elevation when the plaintiff bought it in 1997. Immediately upon acquisition the plaintiff decided to put the property to use as an auto towing yard. In 1997 the land use regulations required that the land fill be brought up to the 100 year flood level. That required putting about 10 feet of fill on Lot 3. The plaintiff commenced to dump the necessary fill on the Lot. As that work approached the easement the plaintiff received a letter from the utility. That letter warned the plaintiff of the dangers of placing fill on or near the easement without first ensuring that the weight of the fill would not

jeopardize the pipeline. This letter instructed the plaintiff to stop putting fill on Lot 3 within 50 feet of the edge of the easement. The plaintiff and the utility had a number of discussions about how the property might be developed. Various geotechnical studies were undertaken. In the end, the parties agree that the pipeline was constructed in such a way that the surface of the easement cannot be paved, nor can it be used as a road or a parking lot. No vehicle weighing more than 5,000 kg can roll over the easement's surface. The pipeline cannot safely withstand fill to bring the surface of the easement up to the 100 year flood plain. Any of these activities would, the parties agree, cause subsidence of the soil such as to threaten the pipeline's integrity. The consequence of a failure of the pipeline could be dire. Although the utility expressed concern about putting 100 year flood plain fill within 50 feet of the edge of the easement, the evidence at trial did not demonstrate that this would actually jeopardize the pipeline. [8] The main issue in the summary trial is whether the terms of the easement required the utility to install the pipeline and to upgrade the pipeline now so that the line could withstand industrial use of the easement's surface. The plaintiff says that the easement does impose that requirement and that the cost of upgrading the pipeline is on the

utility's account. The utility says that the easement imposes no such obligation. The utility argues that the cost of developing the land and the pipeline to accommodate the evolving land use is on the landowner's account. [9] The salient provisions of the easement are these: 2. The owner hereby covenants with the company: (a) not to make, place, erect or maintain on the right of way any building, structure, excavation, well, foundation, pile of material or obstruction which, in the opinion of the Company, might interfere with the safe and efficient operation of the works; (b) not to diminish or substantially add to the ground cover over the said pipe lines or any of them, except to such extent as may be necessary to raise the elevation of the right of way to the same elevation as the remainder of the land; c) That, in the event of the owner constructing a spur line over any pipe line of the company on the right of way, it will give the company sixty (60) days prior notice of its intention to do so, and will perform any strengthening or bridging of the pipe line which the company may request by reason of such intended construction.

3. The Company hereby covenants with the Owner: (a) to pay full compensation to the owner for any damage done to buildings, crops (including timber), fences, livestock, bridges, culverts, drains, ditches, roads and fruit, nut or ornamental tress on the land caused by the company in the exercise of any of its rights hereunder and without negligence on the part of the owner; (b) that it will, as soon as weather and soil conditions permit and insofar as it is practicable to do so, bury and maintain all the pipe lines constructed hereunder so as not to interfere with the drainage or ordinary cultivation and use of the land; c) that the company will reimburse the owner for any expense incurred by the owner in strengthening or bridging any pipe line of the company at the company's request pursuant to paragraph 2(c) hereof, and any additional expense which shall necessarily be incurred by the owner in complying, in the course of constructing a spur line over any pipeline of the company on the right of way, with the regulations of the board of transport commissioners of Canada with reference to pipe lines under railways, and which would not have been incurred if such pipe line had not been in existence; The Parties' Positions [10] The plaintiff asserts that the words "ordinary cultivation and use of the land" are ambiguous and must be interpreted with the aid of reference to the

correspondence exchanged by the negotiators of the easement back in 1959-60. According to the plaintiff, the proper interpretation of 'ordinary use' is industrial use for parking and storage. The plaintiff asserts that 'practicable' in clause 3(b) means physically possible regardless of cost. [11] The utility maintains that the easement is not ambiguous and that 'ordinary use' means the use of the property when the easement was negotiated (i.e.: vacant land). The utility argues that ordinary use cannot mean whatever use owners might from time to time decide to employ. Further, the utility says that the stipulation in clause 3(b) that installation and maintenance be 'practicable' means that if the cost of building or maintaining the pipeline to accommodate a particular ordinary use of the land is extremely high then the utility may be excused from building the line to that standard. Declarations 1 & 2 [12] At the outset of the application I raised with counsel the question of whether these issues were capable of resolution on a summary trial. My concern was then, and is now, that it may not be just to employ a summary trial to determine the facts necessary to making or dismissing these declarations. Rule 18A jurisprudence dictates that the court should postpone determining whether it is just to summarily decide a case until after the parties have presented the whole of their

respective arguments. Accordingly, the parties argued this matter in full and that effort took 3 days. [13] Again, the plaintiff's case is that in 1959 Lot 3 was vacant unused land. The plaintiff maintains that the CNR anticipated that at some point in the future the land might be put to industrial use. The easement stipulates that the utility must bury and maintain the pipeline insofar as it is practicable to do so without interfering with the ordinary cultivation and use of the land. The plaintiff says that the easement CNR negotiated with the utility must be interpreted so as to fix the utility with an obligation to construct the pipeline in the first place and to upgrade the pipeline from time to time so as to permit the owner of Lot 3 to put the surface of the easement to industrial use. That is because, according to the plaintiff, in 1959 industrial use was an 'ordinary use' of the land. Further, the plaintiff asserts that 'practicable' means physically possible, and says that the defendant has failed to show that it was not practicable to construct the pipeline in that fashion. The plaintiff goes on to say that the circumstances surrounding negotiation of the easement imply that the parties agreed that it would be practicable to build the pipeline to allow for industrial use of Lot 3. [14] The defendant maintains that the easement contains no ambiguous or contradictory

terms so it is not necessary and indeed improper to interpret the agreement by looking at the negotiations between the owner and the utility. The defendant says that 'ordinary use' of the land means simply the use the land was put to in 1959, i.e.: fallow and vacant. Therefore, the utility did not have to lay the pipeline to a standard that accommodated a more intensive use. The defendant says that if the easement is interpreted to require construction to an industrial use standard in 1959, it is not possible to summarily determine whether it was physically and economically practicable to build the pipeline to that standard. Finally, the defendant says that it is absurd to assert that the utility would pay for an easement on the terms suggested by the plaintiff. That is because the terms asserted by the plaintiff place on the utility all of the risk of upgrading the pipeline to accommodate whatever industrial use of the property the owner might select from time to time, and to accommodate whatever changes in zoning or land use might be permitted by regulatory changes. [15] Assuming without finding that the plaintiff is correct that the easement must be interpreted to require the utility to build the pipeline in the first place to accommodate industrial activity on the easement surface, to declare that the utility is in breach of that obligation the court must find as a fact

that it was practicable to build the pipeline to that standard. 'Practicable' is used here in the context of industrial construction. That is an inherently economic activity. I find that 'practicable' is not limited to physically possible. 'Practicable' must mean both physically possible and economically feasible. That applies equally to the plaintiff's assertion that the utility has a continuing and current obligation to upgrade the pipeline to accommodate any use changes the owner might make. [16] So, in order to make the declaration the plaintiff seeks the court must determine whether it was in the past or is in the present economically and physically practicable to build the pipeline so as to allow industrial use of the surface of the easement. I find that the evidence on this summary trial simply does not permit the court to make that determination. The parties did not come to court with an agreement on practicality; neither were there admissions to that effect. There was some correspondence between the CNR and the utility in 1959-60 but that correspondence falls far short of showing that the parties turned their minds to the exact nature of the industrial use anticipated, whether the soil in the area could be prepared to accommodate that use, or whether the cost of making that preparation was economic or prohibitive. This is not a minor point. If in 1959 the cost of

preparing the soil for industrial use was so high that it was out of all proportion to the value of the land, perhaps the utility would have selected a different route for the pipeline. [17] As to practicability of remediation work in the context of modern times, I find that the evidence is entirely inadequate for me to decide it. One individual filed an affidavit containing nothing more than a guess that such work could be done and that if done it might cost on the order of $3 million. That affidavit falls far short of establishing that feasibility and those costs as facts. Again, this is no minor matter. The practicality of remediation is essential to the declaration the plaintiff seeks. Even if the plaintiff succeeds on the 'ordinary use' issue, if the work cannot be shown to be practicable then the utility cannot be made to do the work. [18] In short, the parties are asking a summary judge to decide that remedial work is practicable without adducing evidence necessary to reach that conclusion. [19] Leaving aside whether the evidence permits summary determination of the practicality of remediation, there is another significant impediment to deciding that issue in advance of a damage assessment. That impediment is the proscription against a summary trial judge finding facts which may fetter the discretion of the damages judge. A summary trial judge should not make findings of

fact that could embarrass the subsequent trial judge who might be asked to make contrary findings based on further and full evidence (Prevost v. Vetter 2002 B.C.C.A. 202 at para. 8). I am concerned that if I decide that it is practical to remediate the pipeline, the parties will then proceed to try the issue of damages at trial. The full evidence of the cost of that work may establish that remediation is not practical. The subsequent trial judge could then be faced with the unpalatable choice of ignoring trial evidence so as to not disturb my finding that the work is practicable, or of overturning my conclusion as if on appeal. [20] I have come to the conclusion that it would not be just to make the declaration the plaintiff seeks in paragraphs 1 and 2 of its notice of motion. The evidence at the summary trial was simply inadequate to determine practicability, and finding practicability is an essential precursor to making those declarations. I have some regret about this conclusion - the summary trial was lengthy and the parties were anxious to achieve a resolution, but nothing can be done about it. Other Declarations [21] Although I have decided that I cannot grant all of the relief the plaintiff sought, there remains the possibility that the court can assist the parties to some degree by making declarations on issues that can be tried by summarily. I have concluded that the

pleadings and the evidence do permit the court to address the following questions: The Meaning of "Ordinary cultivation and use of the land" [22] The plaintiff takes the view that the phrase "ordinary cultivation and use of the land" is ambiguous. According to the plaintiff that ambiguity is revealed by clause 2(b) and by reference to the correspondence between the parties when the easement was under negotiation. The utility says otherwise. It says that "ordinary use and cultivation" is perfectly clear and meaningful and that nothing in the agreement suggests otherwise. [23] The starting point in this analysis is a statement of the principles to be applied when determining if a contractual provision is ambiguous. In London Drugs Ltd. v. Truscan Realty Ltd., [1988] B.C,J. No. 1366 B.C.S.C. Legg J. (as he then was) said: These general rules of interpretation are set out in a number of cases but I find helpful the reasoning of Mr. Justice Coffin in v. Nova Scotia Light & Power Co. Ltd. (1976), 16 N.S.R. (2d) 48 (N.S.C.A.), who adopted at page 494 a statement from the judgment of Lord Chief Justice Tindel in Shore v. Wilson (1982) 9 Cl. & Fin.

355. I repeat the general rule from Shore v. Wilson, as follows: . . . The general rule I take to be, that where the words of any written instrument are free from ambiguity in themselves, and where external circumstances do not create any doubt or difficulty as to the proper application of those words to claimants under the instrument, or the subject-matter to which the instrument relates, such instrument is always to be construed according to the strict, plain, common meaning of the words themselves; and that in such case evidence dehors the instrument, for the purpose of explaining it according to the surmised or alleged intention of the parties to the instrument, is utterly inadmissible. If it were otherwise, no lawyer would be safe in advising upon the construction of a written instrument, nor any party in taking under it; for the ablest advice might be controlled, and the clearest title undermined, if, at some future period, parol evidence of the particular meaning which the party affixed to his words, or of his secret intention in making the instrument, or of the objects he meant to take benefit under it, might be set up to contradict or vary the plain language of the instrument itself. . . . . . . The true interpretation, however, of every instrument being manifestly that which will make the instrument speak the intention of the party at the time it was made, it has

always been considered as an exception, or perhaps, to speak more precisely, not so much an exception from, as a corollary to, the general rule above stated, that where any doubt arises upon the true sense and meaning of the words themselves, or any difficulty as to their application under the surrounding circumstances, the sense and meaning of the language may be investigated and ascertained by evidence dehors the instrument itself; for both reason and common sense agree that by no other means can the language of the instrument be made to speak the real mind of the party. [24] On a plain reading of clause 3(b) I cannot detect any ambiguity in the phrase "ordinary cultivation and use of the land". Those words clearly mean the use to which Lot 3 was put in and around the time the parties negotiated the easement, i.e: vacant fallow land. The words do not mean every possible use to which the land could then be put. Nor do the words mean every possible use to which the land might at some time in the future be put in response to changes in relevant regulatory schemes affecting the land or in response to changing aspirations of the owner(s) from time to time. On the face of the document the phrase is not ambiguous. [25] The next question is whether external circumstances create doubt or difficulty of application of the words to the parties or to the subject matter to which the

easement relates. The external circumstances include, according to the plaintiff, allusions by CNR and the utility to uses to which the property might be put in the future. Those allusions are contained in correspondence between CNR and the utility in and around 1959. In the February 13, 1959 letter from CNR to the utility CNR demurs to the utility's request for an easement citing the devaluation the easement would cause to the property for industrial purposes. I see that as a negotiating tactic - an effort by CNR to convince the utility that the easement it proposed merited more compensation than was then on offer. There are more letters between the parties in which the industrial use is mentioned. I do not consider that this correspondence determines anything in particular. The letters do not establish that the parties were ad idem that the "ordinary cultivation and use of the land" meant anything other than the use to which the property was then put, that being vacant land. I am confirmed in that view by the fact that the consideration the utility offered in its first proposal in January 1959 is precisely the same consideration CNR accepted when the easement was signed in 1960. The first offer was not informed by any references to industrial use of the land. That is to say: the consideration first offered was not altered to take into account some potential for industrial use

of the property. The parties could not, therefore, have been particularly concerned about that potential use. [26] The easement itself contains no reference to industrial use. I find this latter a particularly compelling fact. These were two sophisticated well informed parties who both had the benefit of sound advice from their professional land managers and their own lawyers. They chose to draw the easement without reference to industrial use of Lot 3. Instead they were content with the phrase "ordinary cultivation and use of the land". The plaintiff reaches too far when it argues that these competent parties employed an ambiguous phrase when it would have been simplicity itself for them to have written instead "ordinary cultivation and use of the land including present and future industrial use of whatever kind". To find ambiguity in the impugned phrase and to resolve it in that fashion is to rewrite the contract for the parties. [27] I observe generally that the plaintiff's argument at summary trial was, basically, that because in 1959-60 the land could have been used for an industrial purpose then industrial purpose was then an ordinary use of the land. That argument is fundamentally flawed. The ordinary use of land is not whatever future use the land might be put to according to an owner's changing whims and pursuant to whatever regulatory regimes might from time to time

pertain. The plaintiff would have clause 3(b) interpreted as saying "ordinary cultivation and all possible future uses of the land". To accede to the plaintiff's argument would, in my view, be to substantially rewrite the agreement. It would import into the agreement a term the plaintiff now wishes the CNR had stipulated. The plaintiff seeks, basically, to be put in a better position than its predecessor in title. That is obviously not something the court can countenance. [28] In summary, then, I find that the phrase "ordinary cultivation and use of the land" means the use of the land in and about the time the easement was negotiated. It is not an ambiguous term. The circumstances surrounding the making of the contract do not dictate that these parties made a bargain that now needs to be fixed by importing additional terms into it. Necessity of Extrinsic Evidence [29] If I am wrong and the phrase "ordinary cultivation and use of the land" is ambiguous, then I must turn to the extrinsic evidence to determine whether it dictates that the phrase be interpreted to include industrial use of the land. As noted earlier, the extrinsic evidence comprises a series of letters between the parties between January 1959 and April 1961. Those letters describe negotiations between the parties. I believe that the court can make only limited use of those letters, and they cannot be considered in

isolation from the agreement itself. That is because in any negotiation a party will assert interests and take positions with a view to gaining an advantage over the other. Not every position is reflected in the final agreement. The court should proceed on the basis that if a negotiating position does not make it into the final agreement, the party who asserted the position decided to abandon it. That assumption might be displaced by evidence of fraud, deception, undue influence, the principle of non est factum, or by one of the other doctrines by which a party can escape the terms of a contract. It might also be displaced if the circumstances reveal that the contract can only achieve its true business objective by importing into it some term implied by the extrinsic evidence. [30] In this case the extrinsic evidence reveals that the parties took various positions and made various arguments in an effort to achieve their respective ends. CNR asserted that the easement would devalue the land for industrial purposes. CNR accepted the same consideration offered before as after it made that assertion. From this I conclude that the assertion was not very important to CNR. It certainly was not a factor that governed CNR's decision to agree to the easement. [31] Further, the extrinsic evidence shows that CNR was genuinely concerned that it be able to cross the easement with a spur

line. This suggests that CNR understood that absent that provision it would not be allowed to make that crossing, or if it did build the crossing it would have to pay to strengthen the pipeline. CNR wanted to ensure that the extra cost of such a crossing would be born by the utility. CNR negotiated clause 3(c) so that if it did build a spur line across the easement the utility would indemnify CNR for any extra costs associated with that construction. If, as the plaintiff asserts, the easement took from the CNR only those ownership rights specifically enumerated in the easement, and if those ownership rights automatically included the right to cross the easement without having to pay to strengthen the pipeline, then why did CNR consider it necessary to negotiate clause 3(c)? The clear answer is that both parties appreciated that the presence of the pipeline under the ground would limit the use to which CNR could put the surface of the easement. The inescapable conclusion is that both parties understood and accepted that clause 2(a) of the easement limited CNR's right to do anything on the natural surface of the easement that could jeopardize the integrity of the pipeline. For that reason CNR negotiated clause 3(c) as an exception to that limitation. Had CNR been doing anything other than employing future industrial use as a tactic to win a higher price for the easement, it would

surely have held out for a higher price or it would have ensured that the easement contained some language preserving its right to use the easement for industrial purposes. That is what it did with the spur line issue. Instead CNR accepted the first price offered, agreed to the phrase "ordinary cultivation and use of the land" and extracted a free spur line crossing from the utility. [32] On the whole, and considering the correspondence, the negotiations, and the final agreement, I find that the business objectives of the parties in making the agreement are fully reflected in the terms of the agreement itself. The negotiations were nothing more than that. CNR's allusions to potential industrial use of some unspecified nature at some unknown future time did not form a bedrock element it wished to include in the agreement. If there was a bedrock element for CNR it was that CNR wanted to be paid a reasonable amount for the easement and it wanted the utility to pay any extra cost of a spur line crossing necessitated by the pipeline. The agreement as signed achieves the business ends the parties sought to achieve by making it. It is not necessary to achieve those ends by bringing into the agreement an implied term that the utility must build the pipeline to accommodate some unspecified industrial use that might at some point in the future happen on the land. [33] I cannot,

therefore, make a declaration that the extrinsic evidence informs the content of the agreement. That extrinsic evidence does not describe a situation in which the CNR thought it was getting one deal but the written contract reflects a different deal. Instead, the extrinsic evidence shows that the parties negotiated, some positions were taken and accepted, while others were proposed and abandoned. Declaration 3(a) [34] The subject of this suit is substantially the same as in B.C. Gas Utility Ltd. v. Alpha Manufacturing Inc., [1998] B.C.J. No. 939 B.C.S.C. A difference does lie in wording of the land use restrictions accepted by the land owner. In the Alpha case the relevant provision was: 2. The owner hereby covenants with the company: (d) not to do or knowingly permit to be done any act or thing which might in the opinion of the company, interfere with or injure the works or any part thereof. [35] In the present case the relevant restrictions read: 2. The owner hereby covenants with the company: (a) not to make, place, erect or maintain on the right of way any building, structure, excavation, well, foundation, pile of material or obstruction which, in the opinion of the Company, might interfere with the safe and efficient operation of this works; [36] The plaintiff asserts it is significant that in this agreement the restrictions against the owner's use of the land are limited

to use of the right of way alone, while in Alpha the restrictions applied to use of the land as a whole. The plaintiff says, therefore, that clause 2(a) of its agreement does not restrict its use of the remainder of Lot 3. If that is so then, according to the plaintiff, it can load the land immediately adjacent to the right of way and the utility must pay to strengthen the pipeline to accommodate any part of that load transmitted through the soil from Lot 3 into the right of way. [37] Here I find that the easement does contain a genuine internal contradiction. The business objective of the easement was nothing less than placement and safe operation of the pipeline under Lot 3's soil. The utility's overriding concern was to ensure that nothing done by the owner would jeopardize the pipeline. That objective is clear on the face of the document and in the pre-agreement documents. Yet, the parties' agreement appears to permit the owner to use the remainder of Lot 3 in any way it likes, including ways that could damage the pipeline. Was protection of the pipeline a negotiating position proposed by the utility but abandoned in the end? I cannot conceive that. The agreement itself and the surrounding documents show that while CNR thought about future industrial use, it did not adhere to that objective with such vigour as to indicate that preserving that use was essential to its

consent. So, although the parties discussed industrial use of Lot 3, I find that that objective did not drive the parties to the agreement they made. [38] I am compelled to conclude, then, that clause 2(a) includes an implied term that the owner would not do on the rest of the land those things it agreed to not do on the easement if those things could jeopardize the pipeline. I cannot make the declaration the plaintiff seeks in paragraph 3(a), and I dismiss that application on its merits. Declaration 3(b) [39] Given the foregoing, I find that clause 2(b) can only mean that the owner may not put so much fill on the right of way as to jeopardize the pipeline. In order to conform to the overall business objective of the easement clause 2(b) must mean that the owner cannot risk harming the pipeline by putting too much fill on the surface of the easement. Certainly the owner can put some fill on the surface of the easement, enough at least to bring that surface level with the surrounding surface when in its ordinary use. Since ordinary use means the land in its natural state, clause 2(b) means that the authorized amount of fill on the right of way is limited to that amount of fill necessary to bring the easement level with the land's natural elevation. Summary on Declarations 3(a) & (b) [40] I find that it is necessary to the proper construction of the easement and to give effect to

its true objective to interpret clause 2(a) as limiting the owner's freedom to use the land adjacent to the right of way in a fashion that could jeopardize the pipeline. I find that the owner's freedom in clause 2(b) is governed by clause 2(a) so that the amount of fill the owner may place on the right of way cannot interfere with the safe operation of the utility's works. Accordingly, I find that I must dismiss the plaintiff's request for the declarations in paragraph 3(a) and 3(b) of the summary trial notice of motion. Nuisance [41] The parties agree and the court concurs that any failure by the utility to conform to the terms of the easement is actionable by the plaintiff as a breach of that agreement. Such a failure is not actionable in trespass or nuisance. Therefore nothing that the utility did or did not do pursuant to the easement over the plaintiff's land can bottom an action by the plaintiff for nuisance. [42] The plaintiff asserts that leaving aside the easement, the presence of the pipeline on Lot 7 constitutes a nuisance to the plaintiff because the delicacy of the line's placement is such that the plaintiff cannot develop its adjacent property. This assertion cannot succeed. That is because the utility's ownership and use of Lot 7 does not affect the plaintiff's use of its property (unless, of course, the utility sues to prevent the plaintiff from doing something

to damage the utility's enjoyment of Lot 7). To put it more plainly: imagine a hypothetical case where the pipeline on Lot 7 comes in from the west, makes a U-turn under Lot 7's surface, and exits again all without going under the plaintiff's property. In this hypothetical, there is no easement and the pipeline lies entirely within land owned by the utility. The pipeline would not affect the plaintiff's use of its property in its natural state. Then suppose the plaintiff wished to develop its property and started to dump fill on the border with Lot 7. The plaintiff could continue to apply fill until it achieved its purpose or until some legal process was invoked to stop it. The plaintiff would not invoke that process against itself - after all, it wants to put fill on the land. However, if the fill caused subsurface stress on the pipeline, then, keeping in mind that it is the party that suffers harm who may sue in nuisance, the utility might sue in nuisance to prevent the plaintiff from jeopardizing the pipeline by dumping fill on the land. Thus, if the analysis is confined to rights and obligations arising out of the presence of the pipeline on Lot 7 alone, then only the utility could suffer harm from the fill on Lot 3 adjacent to Lot 7, and only the utility could sue in nuisance consequent to the plaintiff's development Lot 3. [43] The plaintiff is wrong, therefore, in its

assertion that the utility's burial of a pipeline under Lot 7 created a nuisance to the plaintiff. In fact, when the plaintiff sought to develop the surrounding land that development may have comprised a nuisance to the utility but it certainly gave rise to no claim in nuisance for the plaintiff. [44] To the extent that the plaintiff's claims nuisance with respect to Lot 7, that claim is dismissed. To the extent that the plaintiff claims nuisance arising from the utility's use of the land covered by the easement, that claim is also dismissed because that wrong can only be addressed as a breach of the easement itself. Severence [45] The foregoing findings may assist the parties in their preparation to try the rest of the issues raised by the pleadings. I order that those issues proceed to trial in the usual course. Costs [46] The costs of the summary trial will be in the discretion of the subsequent trial judge. "P. Rogers, J." The Honourable Mr. Justice P. Rogers