Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on whether a 1959 building scheme prohibited multi-family housing on a residential lot.

• The developer sought cancellation of a restrictive covenant to permit a fourplex under modern zoning rules.

• The Smiths argued the scheme protected single-family use and neighborhood character.

• The court examined Section 35 of the Property Law Act to determine whether the covenant was obsolete.

• It found the scheme unenforceable due to the dissolution of the original developer with sole discretionary authority.

• The judge ruled that maintaining the obsolete scheme would be inequitable and inconsistent with public planning needs.

Facts and outcome of the case

Dennis and Andrea Smith, owners of a single-family home in the Garibaldi Estates area of Squamish, British Columbia, brought a petition seeking to block a neighboring property owner, Clearwater Park GP Inc., from constructing a four-unit townhouse on the lot adjacent to theirs. The Smiths argued that a registered building scheme from 1959, which applied to both properties, restricted land use to one dwelling per lot and thereby prohibited Clearwater’s proposed development.

Clearwater, in response, filed a separate petition seeking to cancel the building scheme under Section 35 of the Property Law Act. The company had obtained a development permit from the District of Squamish, which had rezoned the area to allow multi-unit housing. Clearwater argued that the restrictive covenant was obsolete, particularly since the original developer and administrator of the building scheme—Garibaldi Park Estates Limited (GPEL)—had ceased to exist in 1983.

The Smiths emphasized their expectations when purchasing the property, stating they relied on the building scheme to preserve the single-family, low-density character of the neighborhood. They also raised concerns about increased density, reduced privacy, traffic, and overall impact on their enjoyment of their property. Several residents supported the Smiths’ position, although a few others favored Clearwater’s development, citing affordability and urban planning goals.

Justice Verhoeven determined that the central purpose of the original building scheme was to give GPEL discretionary control over development in the subdivision. Since GPEL had been dissolved decades ago, its approval powers could no longer be exercised, rendering the scheme unenforceable. The judge also noted that over time, the building scheme had effectively been ignored by the community, with numerous additions, renovations, and secondary suites approved without adherence to its provisions.

The court concluded that the scheme was obsolete within the meaning of Section 35(2)(a) of the Property Law Act, and that continuing to enforce it would be both inequitable and contrary to the public interest, especially in a growing community like Squamish. The Smiths’ petition was dismissed, and Clearwater’s was granted.

Clearwater Park GP Inc. was awarded costs of both proceedings, payable by the Smiths. No damages were awarded, and no costs were granted for or against the District of Squamish.