Agriculture, Food and Rural Affairs Appeal Tribunal
1Stone Road West
Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales
1 Stone Road West
Guelph, Ontario N1G 4Y2
Tel: (519) 826-3433, Fax: (519) 826-4232
Email: AFRAAT@ontario.ca
Guelph (Ontario) N1G 4Y2
Tél.: (519) 826-3433, Téléc.: (519) 826-4232
Courriel: AFRAAT@ontario.ca
AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL
APPEAL:
Van Beets Municipal Drain 2012 (RE)
[Cost Decision]
Municipality of Central Huron
Van Beets Municipal Drain 2012 (RE)
[Cost Decision]
Municipality of Central Huron 2016ONAFRAAT11
STATUTE:
Drainage Act
HEARING:
DATE OF DECISION:
May 20, 2016
019VanBeets15
NEUTRAL CITATION:
2016ONAFRAAT11
VAN BEETS MUNICIPAL DRAIN 2012
Municipality of Central Huron
IN THE MATTER OF THE DRAINAGE ACT, R.S.O. 1990, CHAPTER D.17, AS AMENDED.
AND IN THE MATTER OF: An Appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Gerard Boon of Brucefield, Ontario under section 64 of the Drainage Act from the quality of construction of the drainage works pertaining to the Van Beets Municipal Drain 2012.
Before:
John O’Kane, Vice-Chair; Ed Dries, Member; Tim Mousseau, Member
COSTS DECISION
In its decision of April 8, 2016, the Tribunal directed the parties to exchange and file written cost submissions. Those submissions included the time records of both the Engineer and Counsel. Those submissions have now been reviewed by the Tribunal panel and our decision with respect to costs is as follows.
Overview
The Drainage Act grants a right to landowners to appeal to this Tribunal about their dissatisfaction with the quality of construction of a drain.
- Any owner of land dissatisfied with the quality of the construction of a drainage works constructed under this Act may, at any time during construction or up to one year from the date of completion of the drainage works as certified by the engineer or a drainage superintendent of the drainage works, appeal to the Tribunal on grounds to be stated.
The dissatisfaction with the quality of construction is measured against an objective benchmark and not an appellant’s subjective view about the “as constructed” drainage works. That objective benchmark against which the Tribunal measures the quality of construction is the design of the drainage works as set out in the plans, specifications and appendices that form part of the Engineer’s Report.
Issues about the design of the drain or the route of the drain are not proper issues for a quality of construction appeal under section 64. The Drainage Act contains specific provisions that give landowners appeal recourse over issues such as design and routing and Mr. Boon has previously availed himself of those appeal avenues, albeit unsuccessfully. Despite that, many of the issues raised by Mr. Boon on this quality of construction appeal were in fact design or routing issues that he had previously raised in that earlier unsuccessful appeal.
Issues involving assertions of criminal conduct, environmental law breaches, and common law riparian rights are not the proper subject matter of quality of construction appeals. Despite that, most of Mr. Boon’s issues on this appeal fell into these categories and several of them had been previously raised in that earlier unsuccessful appeal.
Since the Tribunal uses an objective benchmark in such appeals, an appellant’s concerns, views, theories and suspicions alone, without actual evidence, will not discharge an appellant’s onus of proof to succeed on a quality of construction appeal.
This is a case where an unrepresented party would have been well served by taking the opportunity to first engage the services of a drainage engineer, a drain contractor or a lawyer with experience in matters under the Drainage Act to get an objective opinion about the merits of the issues raised on appeal. There was no evidence before the Tribunal to suggest the appellant availed himself of such an opportunity. Despite that, the appellant cannot succeed with a plea of ignorance about such an opportunity, as he was involved in that previous appeal hearing about this same drainage works before this Tribunal where he had the benefit of legal counsel. The Tribunal speculates that had the appellant obtained such objective advice, this appeal would never have reached a hearing.
The municipality, as the successful respondent in this quality of construction appeal seeks its costs on a total indemnity basis in the amount of $37,850.07, which amount represents the Engineer’s fees and expenses for the appeal hearing of $14,270.45 and counsel’s fees and disbursements of $23,579.62, all inclusive of HST.
The Tribunal’s Cost Jurisdiction
Under section 98 of the Drainage Act, the Tribunal has been granted wide discretionary authority to award costs in appeal proceedings.
(10) The costs of any proceedings before the Tribunal shall be paid by or apportioned between the parties in such manner as the Tribunal considers proper, and where costs are ordered to be paid, the order for payment thereof may be filed in the Small Claims Court and is enforceable as a judgment or order of that court.
(11) The costs chargeable or to be awarded in any proceedings may include the costs of witnesses and of procuring their attendance, the costs of secretarial staff and such other costs as the Tribunal may direct.
The Tribunal has also developed its own Rules of Practice and Procedure that animate and guide the exercise of that statutory discretionary authority to award costs.
31.08 The costs of any proceeding before the Tribunal shall be apportioned between the parties in such a manner as the Tribunal considers proper.
31.09 When the Tribunal orders a party or parties to any proceeding to pay costs, the order for payment thereof may be filed with the Small Claims Court and is enforceable as an order of that court.
31.10 The costs chargeable to or to be awarded in any proceeding may include the costs of witnesses and of procuring their attendance, the costs of secretarial staff and such other costs as the Tribunal may direct.
In addition to the statutory authority to award costs in section 98 of the Drainage Act, the legislature also granted the Tribunal the power to award costs under section 17.1 of the Statutory Powers Procedure Act (SPPA). That additional statutory authority is animated and reflected in Rule 25 of the Tribunal’s Rules of Practice and Procedure.
The dual nature of the Tribunal’s power to award costs reflects that varied nature of appeal matters that come before the Tribunal. Many appeal matters before the Tribunal arise under legislation such as the Ministry of Agriculture, Food and Rural Affairs Act, the Farm Products Marketing Act, the Crop Insurance Act, the Farm Implements Act, the Livestock Medicines Act, and the Food Safety and Quality Act, 2001, to itemize but a few. None of those statutes include any authority granting the Tribunal power to award costs in appeals. Therefore, for matters arising under those various statutes, the only source of Tribunal jurisdiction over costs flows from the SPPA, as follows.
17.1 (1) Subject to subsection (2), a tribunal may, in the circumstances set out in rules made under subsection (4), order a party to pay all or part of another party’s costs in a proceeding.
(2) A tribunal shall not make an order to pay costs under this section unless,
(a) the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious or a party has acted in bad faith; and
(b) the tribunal has made rules under subsection (4).
That cost awarding jurisdiction granted to the Tribunal by the SPPA is constrained by language from the Legislature directing that cost awards, in proceedings governed solely by the SPPA should be the exception, rather than the rule. The Legislature’s SPPA language informs the Tribunal that costs are only warranted, in proceedings governed solely by the SPPA, as a control over behaviour in an appeal that is unreasonable, frivolous, vexatious or if a party has acted in bad faith.
However, when the SPPA language granting the Tribunal cost award authority is compared to Drainage Act language granting the Tribunal cost awarding authority, a significant difference between those two grants of authority is apparent. Under the Drainage Act, there is no legislative direction that costs will only be awarded rarely or only in exceptional circumstances. Under the Drainage Act there is no legislative direction that costs are only to control a party’s unreasonable, frivolous, vexatious or bad faith actions in the proceeding.
The Tribunal maintains a publically accessible website that explains in some detail the hearing process. The question of costs of appeal proceedings is specifically dealt with by the following advice to appeal parties (underline emphasis added).
Costs of the Hearing
The Drainage Tribunal has the authority to award the costs of a hearing between the parties. Section 98 (11) of the Act specifies what costs the Tribunal can award. The section is as follows:
- (11) The costs chargeable or to be awarded in any proceedings may include the costs of witnesses and of procuring their attendance, the costs of secretarial staff and such other costs as the Tribunal may direct. R.S.O. 1980, c. 126, s. 98(11).
The Drainage Tribunal does, when it considers it appropriate, award costs of hearings to parties. This means that the municipality may have to pay part of the cost of the appellant or the appellant may have to pay the cost of the municipality depending on the decision of the Tribunal.
For all other Tribunals each party pays their own costs incurred for the hearing.
Therefore, parties to appeals under the Drainage Act are forewarned about potential cost consequences.
Entitlement
The Tribunal finds that this is an appropriate case for costs against Mr. Boon.
The Tribunal finds and determines that it was the culmination of the following reasons that informed our decision to make a cost award against Mr. Boon.
First, the Municipality was entirely successful responding to every one of Mr. Boon’s thirty-five appeal issues.
Second, Mr. Boon’s appeal issues were devoid of merit.
Third, Mr. Boon did not take the time to read and understand the plans and specifications in the Report or alternatively get advice from someone who could. It is unreasonable, frivolous and vexatious of a party in a quality of construction appeal to purposely remain ignorant about the Report plans and specifications which are the standard against which the appeal is measured.
Fourth, most of the appeal issues raised by Mr. Boon were outside the Tribunal’s jurisdiction. During the course of the appeal hearing the Tribunal repeatedly pointed out to Mr. Boon when he raised those issues. Despite that direction, Mr. Boon was not dissuaded from making his points about matters that were outside the Tribunal’s jurisdiction. That conduct by Mr. Boon was unreasonable.
Fourth, several appeal issues raised by Mr. Boon had previously been raised unsuccessfully in a prior appeal to the Tribunal. Attempting to re-litigate those issues was both unreasonable and vexatious of Mr. Boon.
Fifth, the Tribunal considered that, if Mr. Boon did not pay reasonable costs associated with this appeal, the burden of that expense would ultimately fall on the shoulders of the taxpayers of the municipality or the assessed landowners on the drain, and in these circumstances, that would be unreasonable and unfair. In other words, it would be unreasonable and unfair to saddle the taxpayers with the entire cost burden of the municipality responding to Mr. Boon’s meritless, unreasonable and frivolous appeal.
Sixth, Mr. Boon must learn that appeal rights come with corresponding responsibilities, one of which is potential cost consequences, particularly so when a party advances meritless, unreasonable, frivolous and vexatious appeal issues. A cost award now will serve to make that educational point to Mr. Boon.
Quantum
The quantum sought by the Municipality is significant and is composed of disbursements (out of pocket expenses) and professional fees (engineering fees and legal fees), each of which component will be addressed separately.
A. Disbursements:
The disbursement component of the municipality’s cost request (disbursements of both the Engineer and counsel) are relatively straight forward.
The Municipality seeks reimbursement for appeal related expenses incurred by the Engineer of $125.93 plus HST of $16.37, which includes items such as copying, colour prints, plotting and field mileage. Those items and amounts are reasonable and appropriate in these circumstances.
The Municipality seeks reimbursement for appeal related expenses incurred by legal counsel of $1,736.80 plus HST of $225.78, which includes items such as copying, printing and binding, couriers and mileage expenses. Those items and amounts are reasonable and appropriate in these circumstances.
Therefore, the Tribunal awards the Municipality its appeal disbursement expenses totalling $2,104.88, inclusive of HST. In the circumstances of this case, it is appropriate that the taxpayers and other landowners on the drain are spared any further expenses associated with recovering the disbursement costs award. Therefore, Mr. Boon will be ordered to pay the Municipality that amount of appeal disbursements and in order to ensure that disbursement cost recovery is made without any additional cost to the drain project or the taxpayers, the Tribunal will make an Order that the disbursement cost award will be credited to the drain account and that the disbursement cost award against Mr. Boon shall have priority lien status under section 61(4) of the Drainage Act.
B. Fees of the Engineer:
The Municipality seeks reimbursement for the Engineer’s time associated with the appeal of $14,023.63. While HST applies to that requested fee, the Municipality would be entitled to a significant HST rebate. Therefore, we accept the municipality’s submission that for any fee amount we award, rather than applying 13% for HST, it be grossed up by just 1.76%.
The Engineer time records reflect 87.10 hours. The total Engineer’s fees sought $13,397.70. Simply dividing the hours spent into the total produces a blended hourly rate for the Engineer and the Engineer’s staff working on the appeal $153.82.
A cost award against Mr. Boon of the requested 87 hour indemnity would be a full indemnity of the Municipality for the Engineer’s appeal fees. There may be cases before the Tribunal that do warrant cost reimbursement on a full indemnity basis, but this is not one of those cases. This was a one day appeal hearing. The documentary case was not particularly voluminous. While it is true that Mr. Boon raised many issues in his appeal materials, an Engineer as experienced as this would know and understand that most of those appeal issues were outside the Tribunal’s jurisdiction and therefore should require very little, if any attention from the Engineer in preparation.
The Engineer’s time records contain little detail and very few actual times associated with the narrative explanation of the work done. In fact, if the times that are reflected with the narrative are summed, they total less than 20 hours. Even allowing 10 hours for the day of hearing (including travel) and an equal amount for hearing preparation, would produce a number that is about half the claimed 87 hours.
Given that this was a one day appeal hearing, the claimed 87 hours is unreasonable. In the circumstances therefore, we find that a reasonable Engineer fee for the appeal would be 40 hours at the blended rate we derived from the Engineer’s time records of $153.82. That produces an Engineer fee amount of $6,152.80. When that is grossed up as the Municipality requested by 1.76% ($108.29), the total becomes $6,261.09.
Therefore, in the circumstances we find that a reasonable appeal fee for the Engineer is $6,261.09.
Therefore, the Tribunal awards the Municipality its appeal Engineer fees totalling $6,261.09.
In the circumstances of this case, it is appropriate that the taxpayers and other landowners on the drain are spared any further expenses associated with recovering the Engineer fee costs award. Therefore, Mr. Boon will be ordered to pay the Municipality that amount of Engineer fees and in order to ensure that fee cost recovery is made without any additional cost to the drain project or the taxpayers, the Tribunal will make an Order that the fee cost award will be credited to the drain account and that the fee cost award against Mr. Boon shall have priority lien status under section 61(4) of the Drainage Act.
C. Fees of Counsel:
The Municipality seeks reimbursement of Counsel’s time of 69.70 hours at an hourly rate of $350.00. Like the claim for the Engineer’s fees, that represents a full indemnity of the Municipality’s appeal costs for Counsel and as already observed this is not one of those cases that warrant a full indemnity cost award.
Counsel’s $350.00 hourly rate, while appropriate for such a senior counsel, would only be appropriate on a full indemnity cost award. In the circumstances of this case, only a partial indemnity rate is appropriate. In previous Tribunal cost decisions, a partial indemnity rate in the range of about 2/3 of Counsel’s full indemnity rate has been accepted as reasonable. In these circumstances, the Tribunal concludes that $230.00 is a reasonable and appropriate partial indemnity hourly rate for this Counsel.
Counsel’s total time of 69.70 hours, like the Engineer’s total time of 87 hours, is excessive for the nature and circumstances of this appeal. Similar to the Engineer, the Tribunal concludes that 40 hours is a reasonable and appropriate time for Counsel in an appeal of this nature. While the issues were many and varied, Counsel understood that most of those issues were outside the Tribunal’s jurisdiction and therefore warranted very little time and attention. The documentary record was relatively modest. The appeal hearing took only one day. We allow 10 hours for the hearing day and a similar number of hours for hearing preparation, which amounts to 20 hours. Doubling that to 40 hours for all of the additional and associated administrative work counsel did on the appeal results in a reasonable and appropriate counsel fee.
Therefore, in the circumstances we find that a reasonable appeal fee for the Counsel is $9,361.92 (40 hours x $230.00 = $9,200.00 X 1.76% = $9,361.92).
Therefore, the Tribunal awards the Municipality its appeal Counsel fees totalling $9,361.92.
In the circumstances of this case, it is appropriate that the taxpayers and other landowners on the drain are spared any further expenses associated with recovering the Counsel fee costs award. Therefore, Mr. Boon will be ordered to pay the Municipality that amount of Counsel fees and in order to ensure that fee cost recovery is made without any additional cost to the drain project or the taxpayers, the Tribunal will make an Order that the fee cost award will be credited to the drain account and that the fee cost award against Mr. Boon shall have priority lien status under section 61(4) of the Drainage Act.
D. Totals
The sum of the amounts awarded to the Municipality for appeal disbursements, appeal Engineer fees and appeal Counsel fees are therefore as follows:
Disbursements: $ 2,104.88
Engineer fees: $ 6,261.09
Counsel fees: $ 9,361.92
Total Appeal Costs: $17,727.89
Tribunal Order
The Tribunal orders that the appeal costs are fixed at $17,727.89.
The Tribunal orders that the Municipality of Central Huron shall recover the appeal costs of $17, 727.89 from Mr. Gerard Boon.
The Tribunal Orders that the Municipality of Central Huron is at liberty to enter the cost awarded on the tax roll immediately against any land owned by Gerard Boon that is assessed under the drain.
The Tribunal Orders that pursuant to section 61 of the Drainage Act, the cost award against Gerard Boon shall have priority lien status against any land owned by Gerard Boon that is assessed under the drain.
The Tribunal Orders that no other or additional costs associated with the appeal shall be charged against or to the drain account.
Dated at Brampton, Ontario this 20th day of May, 2016.