Beaudoin v. Brown and Eadie
 O.R. 429
[ONTARIO COURT OF APPEAL]
LAIDLAW, SCHROEDER and MacGILLIVRAY, JJ.A.
7TH APRIL 1961
Limitation of Actions II G — Taxes III G — Possessory title by tacking — Tax sale of property — Purchase by possessory titleholder’s wife — Redemption by prior registered owner — Effect of redemption — Whether possessory title affected — Assessment Act (Ont.), s. 167.
A person in possession of land without title has a transmissible interest, and where he sells for consideration his successor may rely on tacking to claim a possessory title under the Limitations Act, R.S.O. 1950, c. 207 [now R.S.O. 1960, c. 214] against the registered owner. Any subsequent deprivation of possession falling short of the required 10-year period will not affect the acquired possessory title.
Where the possessory titleholder, to allay doubts and fortify himself with a tax deed, allowed taxes to accumulate and had his wife buy in the property at a tax sale but the registered titleholder paid the redemption money and received a tax redemption certificate, not a tax deed, held, the effect of payment of the redemption money was, under s. 167 of the Assessment Act, R.S.O. 1950, c. 24, [now R.S.O. 1960, c. 23], to restore the land to the owner, registered or otherwise, and to free it from the claim of the tax sale purchaser, and this conclusion is supported by s. 47 (2) of the Department of Municipal Affairs Act, R.S.O. 1950, c. 96 [now R.S.O. 1960, c. 98]. The person paying the redemption money does not by that fact or the receipt of a tax redemption certificate obtain title, nor is the position improved by registration of the redemption certificate or the purported grant of the land to another. The Registry Act, R.S.O. 1950, c. 336 [now R.S.O. 1960, c. 348] does not affect a claim arising by operation of law, e.g., a claim of a possessory title.
[Asher et al. v. Whitlock, L.R. 1 Q.B. 1; Perry v. Clissold,  A.C. 73; Israel v. Leith, 20 O.R. 361, folld; Vickers et al. v. Evans, 79 L.J.K.B. 954; Canada Permanent Loan & Savings Co. v. McKay, 32 U.C.C.P. 51, refd to]
APPEAL from dismissal of an action for possession of certain land. Reversed.
W.J. Anderson, Q.C., for appellant, plaintiff.
Pierre Genest, for respondents, defendants.
The judgment of the Court was delivered by
MCGILLIVRAY, J.A.:– This is an appeal by the plaintiff from a judgment pronounced by his His Honour Judge Currey in the District Court of the District of Sudbury on June 24, 1959 whereby he dismissed the plaintiff’s action for possession of land, a declaratory order, occupation rent and for other relief.
The lands in question are in the Town of Little Current and are described as being composed of the east half of Lot 29 on the north side of Blake St. in the Townplot of Shaftesbury in the District of Manitoulin.
The defendant Nina Eadie became the registered owner of these lands by a deed dated May 18, 1933, registered on May 30, 1933. Though there was a house on the premises in question and she lived in or near the Town of Little Current throughout the intervening years till the time of this action she appears to
have had nothing to do with the property until July or August, 1957. The situation at that time was that the plaintiff, who was in possession by his tenant, had allowed the taxes to fall in arrear as he believed it was necessary to clear his title by securing a tax deed and at a tax sale in September, 1956 he had had his wife buy in the lands. Subsequently the clerk- treasurer of the town sent notice of the sale to Nina Eadie as the person still appearing on the titled as registered owner. Receipt of this notice caused Nina Eadie for the first time in over 20 years to display an interest in the taxed property. She proceeded to pay up all arrears pursuant to the notice and on August 14, 1957, she received a tax redemption certificate for the lands in question. On the following day, August 15, 1957, she executed a conveyance of the same to the defendant, Alex Brown, who at that time was in occupation of the premises as tenant of the plaintiff.
The plaintiff’s claim rests upon the following facts. Prior to a point in 1937 or 1938 William Wallace Eadie was in possession of the lands. At some time in 1937-38 he sold or purported to sell the lands to Clifford James Collins who in turn resold in 1946 to the plaintiff. It is not clear when William Wallace Eadie first went into possession but his testimony was that, after occupying the premises for a short time, he rented to one Vern McGovern who continued in occupation for 2 years up to the time of sale to Collins.
Collins never occupied the premises himself but rented first to Vern McGovern, then to Roy Stringer and lastly to Bill Buzwah who was in occupation at the time of sale to the plaintiff.
The plaintiff, after purchasing the property in 1946, spent several months remodelling it before moving in in December of that year. The Town of Little Current commenced to assess Collins as owner in 1939 and continued to do so until 1943.
The town records were unaccountably missing for 1944 and 1945 but it is probable that the town continued to assess Collins during that time. In 1946 and thereafter the plaintiff was assessed as owner. Collins testified that he had received a deed to the lands from William Wallace Eadie at the time of purchase. Collins also testified that he, Collins, had delivered a deed to the plaintiff. The books of a local conveyancer indicated payment of a fee for a deed to Beaudoin as having been made on April 19, 1947. No documents were registered by any of the parties in possession and it was thought that some or all of them had been destroyed in a fire which demolished the house of the plaintiff in the spring of 1947. William Wallace Eadie also testified that he had received a deed from the registered owner, though he was uncertain as to the time or circumstances as a number of transactions had been had with her in those years, and that he had delivered it to Collins at the time of sale to the latter. This was not denied by Nina Eadie who was present in Court nor was the testimony of all three witnesses that, throughout the whole of the period during which they were in possession, she had never entered upon the lands or asserted any claim thereto. As already stated the plaintiff suffered a bad fire in the spring of 1947. Insurance for this was paid to him and to his vendor Collins and he rebuilt the house as soon thereafter as possible. As any documents which he had in his possession had been destroyed he began to worry about the necessity for some paper title to the lands. As a consequence he allowed the taxes to fall in arrears with the intention of acquiring a tax deed from the town. Through some miscalculation he was not present when the lands came up for sale in 1952 and they were purchased by one Benjamin Becks. The latter, upon receipt of his tax sale certificate, presented a demand upon the plaintiff for rent whereupon the latter paid up the arrears and penalty and received a redemption certificate from the town.
This effort having proved abortive the plaintiff felt it necessary to try again and he once more allowed arrears of taxes to accumulate. The lands came up for sale in 1956 and on this occasion he had his wife attend and buy them in at which time she received a certificate of sale for taxes. It was subsequent to this that Nina Eadie was served with notice of the sale and proceeded to redeem the lands. The town clerk was unable to explain why Nina Eadie had not been served with notice at the time of sale in 1952. The moneys paid by May Beaudoin with an additional 10% were returned to her following the redemption in 1957.
The trial Judge, when dismissing the plaintiff’s action
I am not satisfied on the evidence of the plaintiff although he occupied the premises for eight years that he has conclusively proved a title by possession. Having regard to the foregoing facts it therefore follows that the registered ownership of the property by the defendant Nina Eadie since 1933 must prevail and that she is in my opinion the legal owner of the property prior to the conveyance to the defendant Brown.
This Court is given no assistance in these reasons as to how the learned trial Judge arrived at the figure of 8 years or at his decision that no possessory title had been established by the plaintiff. He gives no indication of not accepting the evidence of any witness and so it must be assumed that his decision was not based upon any question of credibility. It must follow that his finding rests upon the inferences which he drew from the evidence and the conclusions which he arrived at from the facts. Under such circumstances this Court is in as good a position as the trial Judge to make a finding of fact and is required to consider the evidence for the purpose of reaching its own conclusion (Maddock v. Maddock & Beer, 16 D.L.R. (2d) 325 at p. 334,  O.R. 810 at p. 814).
While William Wallace Eadie was in undisputed possession for 2 years prior to the transfer to Collins in 1937 or 1938 it will be convenient, because of the uncertainty of that date to consider the situation as it existed from January 1, 1939 onward. I consider it to be clear from his testimony that Collins was in possession through his tenants from the time when he purchased the property until 1946 when he sold to the plaintiff. He was thus in possession on January 1, 1939 and continued in possession till the plaintiff purchased his interest after which the latter occupied the premises until 1955. Section 4 of the Limitations Act, R.S.O. 1950, c. 207 [now R.S.O. 1960, c.214], provides that no person shall make
an entry or bring an action to recover land but within 10 years from the time when such right of entry or right to bring action accrued.
At the determination of the period limited by this Act to any person for making an entry or distress or bringing any action, the right and title of such person to the land or rent, for the recovery whereof such entry, distress or action respectively might have been made or brought within such period, shall be extinguished.
The statute commenced to run against Nina Eadie as registered owner on January 1, 1939. Between that time and January 1, 1949, no demand was made upon the plaintiff or upon Collins nor was any right asserted by or on behalf of Nina Eadie to the lands; no acknowledgment was made by the plaintiff or his predecessor; and it is undisputed that during that period the plaintiff and Collins had undisturbed, quiet and peaceful possession of the property. Such being the circumstance any right or title of Nina Eadie to the lands in question had terminated by January 1, 1949.
As to the plaintiff’s right to possession of the lands it is settled law that one in possession without title has an interest in the property good against the whole world except the rightful owner and that such interest is transmissible: and upon transmission to the person succeeding him in possession the latter, upon termination of the statutory period, has as good a right to possession as if he had been in occupation himself during the whole of the period (Asher et al. v. Whitlock (1865), L.R. 1 Q.B. 1; Perry v. Clissold,  A.C. 73).
Though the document under which the plaintiff acquired title to the lands has not been produced it is clear both from his testimony and that of Collins that there was a transmission by Collins, for consideration received, of his interest to Beaudoin. I would find that in January, 1949 any interest of Nina Eadie in the lands had been extinguished and that a possessory title in the plaintiff had been established. Much of the argument to this Court concerned the period subsequent to 1949 and the effect of the tax sales of the lands
plaintiff in person, or by his tenant, had continued in occupation of the lands for the period between the tax sale and redemption. On the first occasion in 1952 the purchaser had made a demand upon him to pay rent, a demand which the plaintiff quieted forthwith by redeeming the property. On the second occasion no such demand was made as the purchaser, his wife, was obviously acting as the plaintiff’s agent. It was submitted that, by reason of s. 166(1) of the Assessment Act, R.S.O. 1950, c. 24 [now R.S.O. 1960, c. 23], the plaintiff was deprived of possession during such periods. Were it essential in order to establish the plaintiff’s title to extend his possession through these periods it would, of course, be necessary for this Court to decide whether or not an interruption of possession did occur. Such necessity does not arise by reason of the finding already made that by 1949 the plaintiff had acquired the possessory title. From that time forward he had a title that could be enforced against the world and neither an entry by the registered owner or a subsequent payment to the registered owner which, in other circumstances, might be considered an acknowledgment of title, could destroy it. Nor could possession, by any other person affect his title unless adverse possession by that person were to be established beyond a period of 10 years. Even if the plaintiff in this case was deprived of possession during either of the periods mentioned, about which I express no opinion, such deprivation was for but a short period much below 10 years. Any interruption in possession, resulting from the tax sales, if it occurred, did not affect the claim made by the plaintiff in this action.
There remains to be considered the effect of the payment of the redemption moneys by Nina Eadie who was at the time the registered owner. Upon payment of the moneys she received a tax redemption certificate, not a tax deed. Not having been the purchaser at the tax sale she was not in a position to demand one. The numerous cases cited to the Court dealing with situations following the granting of tax deeds are of no help here: nor is it necessary to discuss the nature of the inchoate title which lodged in the purchaser at the tax sale up until the time of redemption. The sole point for consideration It is dealt with by s. 167 of the Assessment Act, under the subtitle “Effect of tender of arrears, etc.” as follows: “167. From the time of a tender to the treasurer of the full amount of redemption money required by this Act, the purchaser shall cease to have any further right in or to the land in question.” The full legislative effect of a redemption payment is thus shown to be no more than to restore the lands to the owner, registered or otherwise, free from any claim by the purchaser at the tax sale. By contrast s. 181 of the same Act referring to the effect of a tax deed specifically deals with the title to the lands. It reads in part as follows:
If any part of the taxes for which any land has been sold in pursuance of any Act heretofore in force in Ontario or of this Act, had at the time of the sale been in arrear for three years as mentioned in section 131, and the land is not redeemed in one year after the sale, such sale, and the official deed to the purchaser (provided the sale was openly and fairly conducted) shall notwithstanding any neglect, omission or error of the municipality or of any agent or officer thereof in respect of imposing or levying the said taxes or in any proceedings subsequent thereto be final and binding upon the former owner of the land and upon all persons claiming by, through or under him … and in default of the taxes being paid or the land being redeemed as aforesaid, the right to bring an action to set aside the said deed or to recover the said land shall be barred.
It is of interest as well to observe the stated effect to be given a redemption certificate as it appears in the Department of Municipal Affairs Act, R.S.O. 1950, c. 96, s. 47(2) [now R.S.O. 1960, c. 98]. It is as follows:
Where land is redeemed under this section, the treasurer shall forthwith register in the registry office a certificate to be known as a redemption certificate (Form 3), setting forth therein a description of the land redeemed, and a redemption certificate shall, when registered, be a valid and effectual cancellation of the tax arrears certificate subsection 3, the land shall thereupon vest in and become the property of the persons who would be entitled thereto if the tax arrears certificate had not been registered, according to their respective rights and interests.
As may be seen in the last-quoted section registration of the redemption certificate is stated to have the effect of making the land once again the property of the person who would have been entitled thereto had the tax arrears certificate not been registered. It is illogical to believe that the effect achieved by a tax redemption certificate under this Act would vary from that in another Act of the same legislature dealing with rights of a similar nature. The fact that it was not considered necessary in s. 167 of the Assessment Act to spell out in full the effect of redemption cannot be interpreted to mean that any different effect to that so clearly set forth in the Department of Municipal Affairs Act was intended: Nor were such words necessary for the purpose. To accede to the contention of the defendants, upon the other hand, it would be necessary to read into the section 167 an inference that payment of the redemption moneys by the registered owner had the effect of vesting the lands in her or him. This it is impossible to do. As was said by Lord Loreburn, L.C., in Vickers et al. v. Evans (1910), 79 L.J.K.B. 954 at p. 955: “We are not entitled to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself.” No such clear reason exists here and unless by another section of the Act Nina Eadie is able to establish a lien against the lands for the amount paid, I am of the opinion that the redemption by her in no way affected the title of the plaintiff. The fact that the redemption moneys were paid by a volunteer and not by the owner is likewise of no effect. The tax purchaser was the only one who could have objected to payment of arrears by such a one and not having done so the money was properly accepted by the town and the situation as it existed prior to the tax sale, resumed.
Registration of the redemption certificate on August 19, 1957 and of the grant to the defendant Brown on September 6, 1957 did nothing to improve the position of the defendants. The dealt with registration of documents only and the effect to be given by registration. Nowhere did it purport to deal with a claim arising by operation of law and not by another instrument and it did not affect a claim arising by operation of law. I quote the words of Street, J., who delivered the judgment of the Court in Israel v. Leith (1890), 20 O.R. 361 at p.368: The Registry Act requires instruments affecting lands to be registered; originally it did not interfere with rights, legal or equitable, arising otherwise than by instruments capable of being registered: Harrison v. Armour, 11 Gr. 303. Then it was amended so as to postpone in certain cases unregistered equitable rights whether based upon written instruments or not, but this left untouched the case of legal rights arising otherwise than under written instruments.
In the present case the plaintiff had a legal right effectually acquired under the Limitations Act. The defendant Eadie, as a consequence, did not by registration of her certificate, acquire anything more by way of title than she had prior to registration and the defendant Brown by purchasing from the registered owner and registering a deed therefor, received no protection by so doing. The claim of the plaintiff remained paramount: Canada Permanent Loan & Savings Co. v. McKay (1881), 32 U.C.C.P. 51; Bishop v. Cox,  2 D.L.R. 441 affirmed at p. 990.
Two further submissions remain to be considered. The first is founded upon the action of the plaintiff immediately after Nina Eadie redeemed in 1957. At that time, upon the advice of his solicitor, the present plaintiff instituted proceedings under Part III of the Landlord and Tenant Act, R.S.O. 1950, c.199 [now R.S.O. 1960, c .206] against the present defendant Brown as tenant of the lands and premises now in question, to oust him from occupation of the premises. His Honour Judge Currey apparently heard some evidence in the matter and dismissed the application. By reason of this, the defendants in the present action plead res judicata. I cannot give effect to the defendant’s submission based on this plea. The proceeding was not referred to by the learned Judge in this occasion appears in the cross-examination of certain witnesses.
The record of the application is not before this Court, the evidence taken is not, and the reasons of the learned Judge for dismissing the action have not been produced. It is trite law to say that for estoppel by matter of record to apply it must be established that there was indentity of issue and the particular matters now sought to be decided were adjudicated upon in the former proceeding. Such matters must be strictly proved. As no reasons given by the learned Judge at that proceeding have been made available it is impossible to say upon what ground the application was dismissed. It is obvious that it could have been dismissed upon other grounds than title to the lands. Furthermore, it is settled law that a matter or title such as that now in issue should not be adjudicated upon in a summary application and it is reasonable to believe that the Judge would not have sought to do so: Re Mitchell & Fraser (1917), 38 D.L.R. 597, 40 O.L.R. 389; Re Gordon & Muxlow (1930), 38 O.W.N. 199; Re Edwards,  O.W.N. 562. I consider that no case of res judicata has been established.
The other submission made is that the plaintiff in his statement of claim has set out his own possession only and has not relied upon that of his predecessors in possession. I feel that this submission, too, is without merit for while his statement of facts was incomplete, his claim as made, was not. The claim was for “possession of the lands and premises”. I am not of the opinion that the failure to cite the facts in full amounts to a fatal defect in the pleading particularly as the evidentiary matter came fully before the Court at trial at which time no objection was made to the pleadings. At that time testimony of both Collins and William Wallace Eadie was heard and there was a full cross-examination thereon.
For the reasons stated I would allow this appeal. The judgment in appeal should be set aside and there should be substituted therefor a judgment declaring that on August 15, 1957 when the defendant Nina Eadie purported to convey the said lands to the defendant Alex Brown the right, title, and interest of the said Nina Eadie to the said lands for which become extinguished and the said purported conveyance was without effect. There should also be judgment in favour of the plaintiff for possession of the said lands. As it is not alleged that the defendant Brown has caused any deterioration in the value of the property, I take the view that if judgment were given for the plaintiff for the use and occupation rental value from July 1, 1957 to the date of this judgment at the rate of $25 per month, the plaintiff would be sufficiently compensated for any interference with his possessory rights.
Accordingly I would direct that the plaintiff do recover judgment against the defendant Brown for the sum of $1,125. The plaintiff should have his costs of the trial and of this appeal upon the Supreme Court scale.