Executive Summary: Key Legal and Evidentiary Issues

• Petitioner sought cancellation of a restrictive "no-build" covenant under s. 35 of the Property Law Act to permit residential construction on her Indian Arm property.

• The covenant, registered in 1995, was the express condition upon which the District approved the subdivision that created the Property, limiting its use to short-duration recreational purposes only.

• Whether the replacement of Policy 7.1 with Policy 13-6520 rendered the covenant obsolete was a central dispute, with the Court finding both policies substantively aimed at limiting density in Indian Arm.

• Insufficient evidence was presented to establish a material change in the character of the Indian Arm neighbourhood since 1995 that would support a finding of obsolescence.

• Practical benefit of the covenant to the District and residents was affirmed, including density control, wildfire risk mitigation, and protection of limited infrastructure.

• Cancellation was found to injure the District by depriving it of the consideration received in exchange for approving the original subdivision.

Background and the Indian Arm property

Fiona Colcleugh Wozniak, the petitioner, owns a vacant lot known as Lot 4 (PID 023-337-371) in the Woodlands/Sunshine Falls area of Indian Arm, within the District of North Vancouver. The Property was created in 1995 when Randle Barrington-Foote, who together with Joan Barrington-Foote owned a larger parcel known as Lot 2, successfully applied to subdivide that parcel into two lots. At the time, the District had a long-standing policy—Council Policy 7.1—that aimed to restrict, limit, and discourage further development in Indian Arm due to the area's challenging geography, substandard road access, limited municipal services, and risks of landslides and wildfires.

How the covenant came to be

When Mr. Barrington-Foote first applied to subdivide Lot 2 in October 1994, the District's approving officer refused the application on the basis that it would be contrary to the public interest and Policy 7.1. Mr. Barrington-Foote then proposed a compromise: he would agree to a restrictive covenant prohibiting any permanent structures on the newly created lot, ensuring it would be used only for short-duration recreational purposes. The District accepted this arrangement, and the subdivision was approved on the condition that the covenant be registered against the new parcel. The covenant was registered in favour of the District pursuant to what was then s. 215 (now s. 219) of the Land Title Act and expressly runs with the land. Ms. Wozniak purchased the Property from Ms. Barrington-Foote in November 2004 with full knowledge of the covenant and the restrictions it imposed.

The petitioner's efforts to discharge the covenant

Ms. Wozniak made two attempts to have the District voluntarily discharge the covenant. In May 2016, the District's approving officer refused, finding that removal was not in the public interest. In July 2021, the petitioner's counsel wrote again, but the District reiterated that nothing had changed and that discharging the covenant would effectively permit additional density contrary to its current policy, Policy 13-6520, which had replaced Policy 7.1 in September 2010. Policy 13-6520 aims to protect the scenic landscapes and natural beauty of Indian Arm while allowing appropriate development only on existing lots of record and directing future growth to urban areas.

The legal framework under section 35 of the Property Law Act

Having been refused by the District, Ms. Wozniak petitioned the Supreme Court of British Columbia for an order cancelling the covenant under s. 35 of the Property Law Act. She advanced three grounds: that the covenant was obsolete under s. 35(2)(a); that it impeded reasonable use of the land without practical benefit to others under s. 35(2)(b); and that cancellation would not injure the District under s. 35(2)(d). The Court noted that these subsections are disjunctive—satisfying any one would permit cancellation—but must be read in the full context of the statutory scheme.

Whether the covenant was obsolete

The Court interpreted the covenant as a "no-build" covenant intended to prevent residential development of the Property indefinitely, consistent with the District's density-limiting objectives. On the question of obsolescence through the policy change, Justice Hughes found that Policy 13-6520 was substantively to the same effect as Policy 7.1: while it uses different language, it continues to direct future growth to urban areas and does not support applications that would result in additional density in Indian Arm. The Court rejected the petitioner's argument that the covenant's original function had been replaced by a comprehensive development management framework, finding that the covenant remains just as necessary under the new policy as it was under the old one. As for changes in the character of the neighbourhood, the Court found the petitioner's evidence insufficient, noting that Indian Arm remains a rural residential setting with single-family residences and that any modernization that had occurred—such as seasonal cabins being replaced with larger permanent homes—was consistent with existing zoning rights on lots created long before the covenant, not evidence of a fundamental shift in neighbourhood character.

Whether the covenant impeded reasonable use without practical benefit

While the District conceded that building a single-family home on the Property would constitute a reasonable use, the Court found that the covenant provides more than a minimal benefit. Citing the Natura decision, the Court held that a municipality's ability to limit density through a restrictive covenant constitutes a practical benefit that is not rendered redundant by zoning or other planning tools. The covenant was found to benefit not only the District but also other Indian Arm residents by limiting wildfire risk and not increasing the demand on already-strained infrastructure.

Whether cancellation would injure the District

Under the injury analysis, the Court found that cancellation would deprive the District of its ability to limit density and ensure that the Property is used consistently with community needs. Moreover, it would deprive the District of the very consideration it received in exchange for approving the subdivision that created the Property in the first place. The Court rejected the petitioner's argument that the District could manage development through other tools, noting that the covenant serves a distinct, property-specific function.

The ruling and outcome

The Honourable Justice J. Hughes dismissed the petition in its entirety, finding that Ms. Wozniak failed to meet her onus of establishing any of the three grounds for cancellation under s. 35 of the Property Law Act. The restrictive covenant remains registered against the Property, and the Corporation of the District of North Vancouver was the successful party. No specific monetary award was ordered, as this was a petition for cancellation of a covenant rather than a damages claim; the relief sought was simply denied, meaning the covenant continues to prohibit the construction of permanent structures on the Property.