Former city lawyer wins fight with Halifax Water over pipe under her property

A lawyer who used to work for the municipality has won a personal legal battle with Halifax Water over a pipe running under her property in Dartmouth.

In a decision released Friday, a three-judge panel of the Nova Scotia Court of Appeal ruled in favour of Kirby Eileen Grant, ordering Halifax Water to pay her $15,000 and remove a pipe running under her property.

In 2017, Grant, who worked as a senior solicitor for Halifax Regional Municipality until 2016, decided to sell her property on Hume Street in Dartmouth.*

The narrow property with water frontage on Lake Banook is undeveloped. According to ViewPoint Realty, the property is 5,200 square feet and was on the market from May 2017 until May 2018, when there was an offer pending. The listing at the time boasted 25 feet of waterfront, and said, “Development bylaws allow for the building of single family home.”

“The dream of lakefront living can be yours with this unique and rare waterfront lot on coveted Lake Banook,” the listing stated.

Grant had a buyer looking to fulfill that dream, but Halifax Water’s pipe stood in the way.

“The prospective buyer wished to develop the lot,” Justice David Farrar, on behalf of himself and Justices Jill Hamilton and Carole Beaton, wrote in the decision released Friday.

“Halifax Water took the position that it had an unrecorded six meter easement over the pipe.”

Grant had owned the property since 2009.

“At some point, prior to Ms. Grant’s ownership, a green polyvinyl chloride drain pipe, 8 inches in diameter, had been installed underground at 7 Hume Street along the length of the boundary line with 9 Hume Street, from a catch basin in the street to Lake Banook,” Farrar wrote.

As a condition of the sale of Grant’s property, the buyer had to be able to develop it. The municipality’s planning department said it would approve a building permit, but Halifax Water would not because the dwelling would come within three metres of its pipe.

The sale fell through because of Halifax Water’s position, but it never actually had an easement, and even admitted that in correspondence to Grant: “To confirm, Halifax Water does have stormwater infrastructure in the ground at 7 Hume Street, in respect of which there is no easement in favour of Halifax Water.”

In July 2018, Grant “advised Halifax Water it had no legal right to have the pipe on her property; she did not consent to it being there; and it could remove the pipe or pay her compensation,” and she threatened legal action.

Halifax Water stuck to its position, and in January 2019, Grant filed notice, and Halifax Water replied arguing it had “a prescriptive easement on the property” — like squatter’s rights, but only for an easement.

“Its position was that it had open, notorious and continuous use of the pipe on the property for 20 years preceding the registration of the property,” Farrar wrote.

Justice Jamie Campbell ruled in Halifax Water’s favour, agreeing that it had a prescriptive easement. Grant appealed.

Appeals court says Halifax Water has no right

In Friday’s decision, Farrar wrote that Campbell made two legal errors: he concluded that Halifax Water was an agent of the municipality and he concluded that Halifax Water could acquire an interest in the property because it owned an adjacent parcel.

On the first point, Farrar argued that neither the Halifax Regional Water Commission Act nor the 2007 transfer agreement granting the utility the responsibility for owning and maintaining water and wastewater infrastructure in the municipality “create a relationship of agency between HRM and Halifax Water.”

“The Application Judge’s conclusion that Halifax Water is the agent of HRM is simply that: a conclusion. He did not set out the legal test defining an agency relationship, nor did he explain how it arose on the evidence before him,” Farrar wrote.

On the second point, Nova Scotia’s Land Registration Act, in section 75, states: “The owner of an adjacent parcel may acquire an interest in part of a parcel by adverse possession or prescription after the parcel is first registered pursuant to this Act, if that part does not exceed twenty per cent of the area of the parcel in which the interest is acquired.”

The adjacent parcel in this case is the street, Hume Street. Campbell agreed that Halifax Water was HRM’s agent, and so it was “therefore capable of claiming an interest in the land by way of prescription as an agent of an ‘owner’ of an adjacent parcel under the LRA.”

“This erroneous conclusion is contrary to the Application Judge’s own interpretation which immediately precedes it,” Farrar wrote. “Halifax Water is not capable of claiming an interest in the land by being the agent of the owner of an adjacent parcel. Rather, HRM is the owner of the adjacent parcel, i.e. Hume Street. It is the only party who may be able to claim an easement on 7 Hume Street.”

Farrar wrote that Halifax Water would have to establish that it owns the street, not just that it’s acting as HRM’s agent.”

“It cannot bootstrap itself to the adjacent landowner HRM, and then rely on its own use of the land for the pipe it owns, to establish a prescriptive easement,” Farrar wrote.

In her original application, Grant sought “a declaration that no easement exists on the property, and that the pipe should be removed, or in the alternative, a finding that a de facto expropriation has occurred and compensation payable under the Expropriation Act.”

Grant sought in her appeal for the court to award damages for trespass and for the lost property sale due to the denied permit.

Farrar wasn’t prepared to assess or award those damages.

“There was no argument with respect to the appropriate amount of damages for trespass or loss of the sale of the property contained in the pre-hearing brief or before the Application Judge,” Farrar wrote. “On this appeal, Ms. Grant asks us to award damages for trespass and special damages equal to the consideration on the lost sale. There is very little evidence on the record which would allow us to assess damages. Further, it is not at all clear the aborted sale resulted in any damages.”

Farrar did, however, set aside the prescriptive easement, “without prejudice to Ms. Grant’s right to assert her right to damages in her original application.”

He punted the issue of damages back down to a lower court for Grant to argue, but awarded costs and ordered Halifax Water to remove its pipe.

“Halifax Water shall have 90 days from the date of this decision to remove the pipe from 7 Hume Street and to remediate any damage caused by its removal at its own expense,” Farrar wrote.

“If it fails to do so, Ms. Grant may do so and claim the costs from Halifax Water.  I would award costs on this appeal of $3,000, inclusive of disbursements, to Ms. Grant.  On the application below, I would award her costs of $12,000, inclusive of disbursements.”

*Update: Feb. 27, 2021:

This story and its headline have been updated to reflect that Grant is no longer a lawyer for HRM.