A 2023 Ontario Superior Court case, Lake v Cambridge (City), 2023 ONSC 5200, confirmed that a purchaser is entitled to complete a transfer relying on the Land Titles parcel register, without having to go behind it to determine whether any municipal subdivision control by-laws has been omitted from the Land Titles register.
In July of 2021, the Applicants purchased a home in Cambridge. The land was legally described as Lot 15, Plan 237. Plan 237 is a registered plan of subdivision from 1913.
After closing, when the Applicants were trying to set up utilities, the City told the Applicants that they could not process any requests for “municipal services” until certain title issues relating to the property were sorted out.
Specifically, the City told the Applicants that the parcel had not been conveyed to the Applicants legally, as Planning Act consent would have been required to do so. The City took this position because of a subdivision control by-law from 1950. The by-law stated that, although the lots on Plan 237 were lots on a registered plan of subdivision, they were deemed not to be lots on a registered plan of subdivision for the purposes of s. 23 of the Planning Act, 1946 (i.e., to legally divide and convey the lots affected by the by-law, Planning Act consent would be required). At the time that the by-law was created, the parcel was Lots 14-16 on Plan 237, and the parcel was broken up through several transfers in the decades that followed.
Though the by-law dealt with the subject property, the Applicants had no actual knowledge of the by-law before the property was transferred to them, because the by-law was not entered on the parcel register. The first subdivision of the land after the creation of the 1950 by-law was in 1961. The transfer was, apparently, in contravention of the by-law, though nothing was done about it. When the retained parcel was given its own parcel register in 1997 (in the Land Registry system), the by-law was not entered on the parcel register. Similarly, when the parcel was converted to Land Titles in 2003 (LTCQ), the by-law was not entered on the parcel register. The parcel was divided up a few more times between 2003 and 2020, and at no time was the by-law entered on any parcel register.
The Applicants applied for the following declaratory relief:
- That the Applicants are the registered legal and beneficial owners of Lot 15, Plan 237 and have been since July 17, 2020 (their purchase closing date);
- That the transfer to them of Lot 15, Plan 237 did not, and does not, violate the Planning Act and is not void;
- That the 1950 By-law directly affected title to Lot 15 on Plan 237, within the meaning of the Land Titles Act, and had to be registered on title to the Land Titles PIN for the by-law to be effective against the Applicants.
Justice Broad granted the relief sought.
Justice Broad found that, “subdivision control by-laws, including those which designate a plan of subdivision not to be a registered plan of subdivision, must be registered on title to property on the parcel register, or a notice of claim must be registered, to be effective against bona fide purchasers without notice, such as the applicants. This is because subdivision control by-laws directly affect title to property and are thus ‘encumbrances’ within the meaning of the Land Titles Act.”
Therefore, he said that “[for] the applicant’s title to the subject property to have been taken subject to the 1950 By-law, the by-law needed to be entered or noted on the Land Titles register or deemed not to be an encumbrance pursuant to ss. 44(1) Land Titles Act or the applicants must have had actual notice of the bylaw.”
Justice Broad went on to say that “the applicants and their solicitor were not required to go behind the Land Titles system to conduct a search to determine whether a by-law had been registered under the Registry system deeming Plan 237 not to be a registered plan of subdivision for the purpose of subdivision control under the Planning Act.”
This blog post was written by Shannon Hogan, a member of the Real Estate team. She can be reached at 613-369-0369 or at shannon.hogan@mannlawyers.com.
