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:

Mullen Drain (RE)

Town of Lakeshore

Mullen Drain (RE)

Town of Lakeshore

2016ONAFRAAT14

STATUTE:

Drainage Act

HEARING:

May 12, 2016

DATE OF DECISION:

June 13, 2016

003Mullen16

NEUTRAL CITATION:

2016ONAFRAAT14

MULLEN DRAIN

Part of Lot 7, North Middle Road Concession

Geographic Township of Tilbury West

Town of Lakeshore

IN THE MATTER OF THE DRAINAGE ACT, R.S.O. 1990, CHAPTER D.17, AS AMENDED.

AND IN THE MATTER OF: Appeals to the Agriculture, Food and Rural Affairs Appeal Tribunal by Judith Murphy of Richmond MI, USA and T.S. Mullen Farms Ltd., c/o Tim S. Mullen of Comber, Ontario under Sections 48(1) and 54(1) of the Drainage Act with respect to the Mullen Drain – Part of Lot 7, North Middle Road Concession, Former Geographic Township of Tilbury West, Town of Lakeshore.

Before:

Harold McNeely, Vice-Chair; Ed Dries, Member; Fred Stulp, Member

Appearances:

Erin Reynolds, Counsel for Judith Murphy, Appellant

Ed Hooker, Counsel for Tim Mullen, T.S. Mullen Farms Ltd., Appellant

Jim Renick, Counsel for the Town of Lakeshore

Gerard Rood, Engineer, Rood Engineering Inc.

Jill Fiorito, Drainage Superintendent, Town of lakeshore

DECISION OF THE TRIBUNAL

Background

The Agriculture, Food and Rural Affairs Appeal Tribunal (“Tribunal”) held this hearing in the Town of Lakeshore on May 12, 2016. The Engineer’s report dated September 28, 2015 for the Mullen Drain (“Report”) was prepared by Rood Engineering Inc., and submitted by Mr. Gerard Rood, P.Eng., (“Engineer”). The appeals to the Tribunal were filed by Ms. Judith Murphy and T.S. Mullen Farms Ltd., c/o Mr. Tim Mullen (collectively the “Appellants”).

Mary Masse, Clerk of the Town of Lakeshore performed the duties of Clerk of the Tribunal.

Preliminary Matters

Prior to the hearing, the Tribunal issued an order making all landowners assessed or compensated in the Report parties to the hearing. The Municipality filed an Affidavit of Service, dated May 10, 2016, as proof that all parties had been served with the notice of hearing.

The Mullen motion to file additional documents

At the opening of the hearing, Counsel for the Appellant T.S. Mullen Farms Ltd (“Mullen”) applied for leave to file additional documents to add to its brief of documents as Tabs 20-23. Erin Reynolds, Counsel for the Appellant Judith Murphy (“Mrs. Murphy”) objected to this request.

The documents include a letter from Mrs. Murphy’s lawyer dated September 25, 2014 proposing terms of settlement in an Ontario Superior Court of Justice action #CV-13-19138. A copy of the Amended Statement of Claims is also found at Tab 21. Counsel also opposed the filing of the Minutes of Settlement found at Tab 13 of Ex. 4.

Only one part of this letter could have a bearing on the issues before the Tribunal. It is the following: “Mr. Mullen will withdraw his Municipal Drain application.” This refers to the first petition and the Rood Report dated March 19, 2014. The Minutes of Settlement, dated October 6, 2014, do not include the condition of settlement mentioned above. Mrs. Murphy’s Counsel objected to filing this letter as well as the Minutes of Settlement. She argues that the letter was sent on a without prejudice basis and should be protected from disclosure in these proceedings as a communication to settle an action. She also argues the Minutes of Settlement should not be entered into evidence in this action because these were part of a settlement in the civil action.

Mr. Hooker points out that the letter purporting to withdraw the first petition is dated October 15, 2014 (See Ex 2, Tab 1, Page 134 of the e-mails) immediately following the Minutes of Settlement signed on October 6, 2014. The request to withdraw the first petition is based on the understanding that the civil action and the first Mullen Drain petition were resolved. While the Tribunal encourages the parties to engage in without prejudice discussions and offers to settle protected from disclosure, the admissibility of these documents in evidence and the objections must be considered on a case by case basis. Here, both documents have a bearing on the reason for the withdrawal of the first petition by Mullen and the issue of how the Tribunal should rule on the cost of the first report. Accordingly, the Tribunal allowed the filing of the documents and these were added to Exhibit 4, as Tabs 21 to 23. The Tribunal also refused to strike the Minutes of Settlement from the Mullen Brief since the comprehensive settlement of the civil action was the reason for Mullen’s attempt to withdraw the first petition.

Overview

Mullen is owned by Mr. Mullen and his wife. It is an agricultural business which cultivates cash crops on approximately 2500 acres in the County of Essex and the Municipality of Chatham-Kent. Mullen purchased the subject property in 2010. The property is zoned R1-9(H). According to the zoning by-law, the Mullen property could be developed for residential use at some unknown future date. The H designation however denotes that “development of lands is premature at the present time.” Mullen’s property shares a common boundary, with Mrs. Murphy’s land. Mr. Mullen planted wheat in 2011 but it could not be harvested because of the wet soil caused by inadequate drainage. Neither Mullen nor the Murphy properties have been farmed actively or successfully in recent years. A tenant identified by Mr. Mullen by the name of Lantin, attempted to provide surface drainage by excavating furrows directed to a shallow, private ditch along the common property line. However, both properties continued to be too wet to produce crops according to Mr. Mullen. Photographs taken by Mr. Mullen and filed as Exhibits show the presence of brush and trees along the common boundary on both properties before work carried out by Mullen to clear the brush and trees. This activity resulted in the civil action initiated by Mrs. Murphy against Mullen in 2013. The history of the Mullen Drain is recited in the evidence summarized below. Mullen wants the Drain to be constructed to allow it to tile drain its property and integrate the land in its farming operation. Mrs. Murphy did not support the drainage improvements until June 2015 following several meetings and contacts with Mr. Rood and the municipal employees having responsibility for drainage issues.

Issues

1. With respect to the Section 48(1) appeals in this matter:

(i) whether the benefits to be derived from the proposed drainage works are commensurate with the cost as they relate to both the Mullen and Murphy property.

(ii) whether the drainage works should be modified as requested by Mullen or as requested by Murphy.

(iii) whether the compensation or allowances provided by the engineer are adequate or excessive.

2. With respect to the Section 54(1) appeals in this matter:

(i) whether the assessment levied against the Mullen property be altered.

(ii) whether the assessment levied against the Murphy property be altered.

Evidence

Jill Fiorito, Drainage Superintendent

Ms. Fiorito confirmed that the report under appeal at this hearing was initiated by a petition signed by Mr. Mullen in accordance with Section 4 of the Drainage Act (“Act”). This was the second petition signed by Mr. Mullen related to this work. She confirmed that Mr. Rood was appointed to complete the report for this work. Her testimony was that the Municipality received and processed the report in full compliance with the Act.

In examination, she stated that the Municipality, in conjunction with Mr. Rood, spent a great deal of time attending the site and responding to emails relating to this drain from the Murphy family during the process of dealing with the first and second report. She addressed their queries on several issues such as tree removal beyond the working corridor and the potential loss of developable lands although the property was currently zoned agricultural, even though these issues were beyond the scope of the current report.

She also testified that the Murphy family, either directly or through their legal advisors, attempted to have the drainage works halted on several occasions prior to completion of the second report. It was her clear understanding that the Murphy family did not want any drainage improvements until they had an apparent change in attitude in June 2015 after which, they supported the need for drainage improvements. She expressed the view that this change of approach lead the engineer to publish the second report and to expand the scope of the work to include more positive drainage features to serve the Murphy lands.

Ms. Fiorito noted that at the consideration of the subsequent report, the Murphy family offered conflicting positions as to whether or not they required or wanted drainage. They opposed the inclusion of the earth berm on the east side of the new open ditch and expressed the view that the work was not cost beneficial.

Gerard Rood, P. Eng., - Engineer who prepared the Report

Mr. Rood testified that the works recommended in the final report was derived from all of the comments and feedback generated by the preliminary report, the first report, and all of the meetings and discussions with the property owners up to the publication of the second report. He testified that the original works were specifically designed to provide drainage to the Mullen property only. It was his understanding from the first onsite meeting that the Murphy family was not at all interested in drainage improvements on their lands. However, he confirmed that, as the process unfolded, the Murphy family expressed a desire to have drainage improvements provided for their property at the second on-site meeting relative to the second petition. He suggested that he and the Municipality went out of their way to provide all of the information practical to ensure that the Murphy family had a good understanding of the content of the final report and the impact on their lands.

Mr. Rood confirmed that, in his opinion, the most inexpensive and functional drainage works included an open drain constructed along the property line between the Mullen and Murphy property that would ultimately serve both properties. This drain would provide similar surface and sub-surface drainage outlet to both the Mullen and Murphy property. He confirmed that this open drain would have a watershed break in the drain to the fit the historical watershed limits as between the Goatbe Drain and the Henry Brown Drain. That is to say that the northerly portion of the Mullen and Murphy properties would drain by way of the new open ditch to the north to an outlet into the Goatbe Drain and the southerly portion of the properties would drain by way of the new open ditch to the south to an outlet into the Henry Brown Drain. In his opinion, based on his analysis of the drains, both the Goatbe and the Henry Brown Drain will provide a sufficient outlet for the proposed works. He conceded that this watershed feature would have been more evident had he shown sub-watershed boundaries on the watershed plan attached to the report.

The extreme downstream reaches of the new drain at the north and south limits would be closed drainage systems to minimize impacts on the Murphy property. He confirmed that these enclosed systems would be designed to accommodate the runoff generated from a once in two year storm event.

He pointed out that the concept of collecting all the flows from the Mullen’s lands in an open drain along the Mullen/Murphy property line was originally suggested to Mr. Mullen by the drainage contractor hired by Mr. Mullen to develop a private drainage system to serve his property.

Mr. Rood stated that the report recommended an open drain constructed wholly on the Mullen property with the material excavated from the drain placed on the Murphy property in the form of an earth berm in addition to the enclosed outlets at the north and south ends of the drain. The construction of the berm on the Murphy property necessitated the installation of drop inlet structures on the Murphy property that would allow the surface runoff from the Murphy property to access the open drain.

It was his opinion that both the Murphy and Mullen lands would have similar access to and use of the drainage system. As a result, the principals of Benefit and Outlet Liability assessment as generally applied across the province were applied to both properties. He testified that the development of the Benefit assessment was not directly related to the area affected by the works on each property. Rather, he considered all other factors affecting the development of the Benefit assessment on each property. These factors included proximity to the drainage works, potential for use, frontage on drain, and use of the land. Both properties were assessed as agricultural lands and no consideration was given to the development potential of the Mullen lands. He expressed the view that both properties have similar surface and sub-surface drainage characteristics and therefore the Outlet Liability assessments are directly related to the area drained on each property.

Mr. Rood pointed out that the report recommended that the enclosed portion of the drain at the south end of the works is shown to be 1.7m from the existing fence line. It was his opinion that this is the minimum practical offset from the fence for the purpose of construction. Mr. Rood acknowledged that the fence may not actually be on the legal property line but also stated that it is not the purpose of this report to include adjustments to this fence. Should the issue be dealt with under a more appropriate piece of legislation and the fence is relocated, he confirmed that closed drain would still be constructed 1.7 m from the fence wherever it may be placed.

Mr. Rood testified as to the evolution of the works recommended on this drain starting with the works recommended in the original preliminary report, followed by the works recommended in the second report which was adopted and subsequently withdrawn, and concluding with the works recommended in this final report. It was his opinion that a great deal of the field investigations; discussion with the owners, Municipality and other agencies; the development of design options and costs; and report modifications were all necessary to the completion of the final report. He did admit that some engineering fees were wasted throughout the process but the waste was relatively minor and he believed it fair and proper to include all engineering cost accumulated from the outset of the project to be included into the final report cost.

In his testimony, Mr. Rood confirmed that some specific works recommended in the current report that were apparently opposed by both parties could be eliminated. Specifically, he confirmed that the earth berm and drop inlet structures recommended for installation on the Murphy property could be eliminated. He further suggested that the alignment of the open drain could be shifted so as to be centered on the property line between the Mullen and Murphy lands. However, he also conceded that these modifications to the report would also impact the allowances provide each property, the total cost of the works and the assessments levied to both properties. On questioning, he also conceded that the overall dimension of the top of the drain as shown on the plans was excessive.

Mr. Rood acknowledged that the Mullen property was zoned for residential development although it was subject to a holding provision. He said that he was not aware of any approved plan of subdivision on this property. He confirmed that the assessment develop for the Mullen property was based on the principals of agricultural use as this property is currently eligible to receive a grant for this work as an agricultural property.

It was Mr. Rood’s opinion that both he and the Municipality went above and beyond typical service standards to insure that both Mr. Mullen and the Murphy family understood and appreciated the works contemplated at each stage in this process. Given that, the changing views of the parties involved as the project evolved was time consuming and frustrating.

Tim Mullen, Appellant

Mr. Mullen testified that he purchased this property in 2010 with the full knowledge of its potential for residential development. He expressed concern regarding the impact this new drain construction would have on the potential to develop his lands. He also testified that it was his intention to use the property for agricultural production until an opportunity to more fully develop the property arose in the future.

He describe the property as untiled and poorly surface drained. It was his opinion that open furrows carried surface runoff from his property easterly toward the Mullen and Murphy property line. He also observed open furrows that carried surface runoff westerly from the Murphy property to this same property line. He confirmed that all of these furrows discharged into a shallow ditch along the Mullen/Murphy property line.

Mr. Mullen testified that the southerly reach of this shallow open ditch was wholly on his lands and it appeared to flow south toward the Henry Brown Drain. He also testified that the northerly reach of this ditch was wholly on the Murphy lands and it appeared to flow north toward the Goatbe Drain. He confirmed that the ditch was full of brush and trees throughout its length. He also confirmed that he removed all the brush and trees from this ditch at his cost.

Mr. Mullen admitted that his original intention was to hire a drainage contractor to reconstruct this open ditch along the property line. This open ditch would flow from the north limit of the property to a point of discharge into a closed drain on the Murphy lands which would carry the flow to the Henry Brown Drain. He wanted to do this work as a private drain under an agreement with Ms. Murphy and not as a municipal drain under the Drainage Act. It was his opinion that he could have had the works done privately more efficiently, more quickly and more inexpensively without municipal involvement. He claimed to have offered to do the work at his expense and provide Ms. Murphy the opportunity to outlet into this private ditch.

Mr. Mullen stated that he had discussions with the Murphy family after the adoption of the first report. Based on those discussions he was of the opinion that all parties agreed to the construction of a private open ditch on the Mullen property and a tile outlet through the Murphy property and consequently, he withdrew his original petition for drainage improvements. Subsequently, this agreement collapsed and Mr. Mullen signed a second petition or restart the process under the Act.

It was Mr. Mullen’s opinion that the original preliminary report include works beyond the scope of his needs and was far too expensive. He was satisfied that, based on his input to that preliminary report, the scope of the works was significantly altered. He confirmed that the first published report, an enclosed drain on the Murphy lands, met his requirements for a sufficient outlet. He contended that the current report returned to recommend a similar works to that described in the preliminary report which he continues to oppose. Although he was unable to offer any evidence to the contrary, he stated that the Goatbe Drain will not provide a sufficient outlet for the proposed drain based on its age and current condition.

In questioning, Mr. Mullen confirmed that, should the open drain be constructed along the property line as proposed in the report, he will systematically tile his property to outlet into that drain. He confirmed that portions of this agricultural tile system would be abandoned should residential development of the property occur. Mr. Mullen also stated that, should the open drain be built, he would accept all of the surplus excavated material from the drain to be deposited on his lands for his purposes. He contends that he has the need for the material on his lands and the equipment to move it.

Findings

The benefit to be derived from the drainage works are not commensurate with the estimated cost thereof:

Mr. Mullen clearly takes issue with the apparent escalation in project costs that he has seen since the commencement of this project although he does not relate these costs to the specific assessment on his property. Generally, he objected to the addition of the open ditch and berm into the final report and their associated costs as well as the escalating engineering costs. He argued that he could have undertaken the work more efficiently and at less cost as a private work. This argument bears no weight as it was Mr. Mullen who signed the original petition for drainage improvements. Once the petition under Section 4 of the Act was signed and filed with the Municipality, they had an obligation under the Act to appoint an engineer and proceed with the work. Thereafter the process would be governed by the provisions of the Act. The fact appears to be that Mr. Mullins required an outlet over the lands owner my Ms. Murphy and the permission to undertake those works privately on the Murphy lands was not forthcoming. His only alternative to achieve a drainage outlet was via the Act.

In her submissions Counsel for Ms. Murphy objected to the inclusion of the earth berm and drop inlet structures on her property and the assessment of costs related to these works. She also objected to the inclusion of engineering cost related to the preliminary report and the first published report. With regard to the earth berm and drop structures on the Murphy property, the Engineer agreed that the earth berm and drop structures could be removed from the report. This would reduce the overall construction costs as well as the specific Benefit and Special Benefit assessments against the Murphy property.

The submission of Ms. Murphy’s lawyer also suggested that all engineering costs expended on the project up to the publication of the second report should be the responsibility of Mr. Mullen as he was the sole petitioner and he withdrew his name from the petition. Section 44 of the Act states “…no person having signed the petition shall, after adoption of the report, be permitted to withdraw.” The evidence suggests that the report was adopted and given two readings on May 13, 2014. Mr. Mullin filed correspondence requesting a withdrawal from the petition dated Oct. 15, 2014. Mr. Mullin could not withdraw from the petition at that stage and consequently is not solely responsible for the engineering costs to that point.

The evidence of the Engineer was that the majority of the time spent on this drainage works from the outset was necessary and appropriate to achieve the final results. The Tribunal accepts that all engineering costs associated with this project to date are properly included as part of the cost of the work.

The drainage works should be modified on grounds to be stated:

In Both the Murphy submission and the evidence of Mr. Mullen they agree that the earth berm and drop inlet structures referenced in the report be removed. The Engineer agrees. The Tribunal accepts that this modification can be undertaken without materially altering the access to the drain by either party. In fact, it will enhance the capability of the Ms. Murphy to connect to the drain. It is accepted that removing the earth berm will reduce the area required for the drainage works along the easterly bank of the drain which will then require adjustments to the allowances provided to that property in a revised report.

Both the Murphy submission and the evidence of Mr. Mullen agree that an open drain along the common property line would be beneficial to both properties. The report identified the open drain wholly on the Mullen property. The evidence of Mr. Mullen was that he would prefer to drain on the Murphy property. The evidence of the Engineer now is that the open drain should be centered on the property line. The Tribunal accepts the evidence of the Engineer. Centering the drain on the property line ensures that both parties will have unobstructed and open access to the drain on their property. Further, the Engineer is directed to more accurately calculate the design top width of the drain in order to minimize land taken for construction. It is accepted that the relocation of the drain as suggested will alter the value of the allowances provided to both properties in a revised report.

The report recommends the disposal of all material excavated from the drain to be used in the construction of the earth berm adjacent to the easterly bank of the drain. As this feature is to be eliminated an alternative method of dealing with this surplus material is required. The evidence of Mr. Mullen was that he would accept all of the surplus excavated material onto his property. The Tribunal agrees. However, it must be understood that once placed on his property, it will be Mr. Mullen’s sole responsibility to handle this material when and how he sees fit and it will not be the responsibility or cost of the drain.

Mr. Mullen testified that the Goatbe Drain is not a sufficient outlet for the proposed drainage works. However, he did not provide any evidence to support that assertion. The evidence of the Engineer, based on his analysis of the drainage records, was that the Goatbe Drain is a sufficient outlet for the proposed works. The Tribunal accepts the evidence of the Engineer on this issue.

The compensation or allowances provided by the engineer are inadequate or excessive:

No evidence was brought by either party as to the adequacy or excessive nature of the allowances provide in the report under Section 29 and 30.

Assessment Issues:

Counsel for Murphy argued against the apportionment of the Benefit component of their assessment as it related to the open drain and earth berm component of the work. She also argued against the Special Benefit component as it related to the drop inlet structures. As the drop inlet structures will be eliminated from the works, the Special Benefit for that component will be eliminated. She also argued in the Murphy submission that the Benefit Assessment should be directly proportional to the area drained.

Mr. Mullen brought no evidence against the assessment.

The evidence of the Engineer was that the Benefit and Outlet Liability assessments were developed using a provincially accepted methodology. He confirmed that the Benefit assessments are not related to the area affected on a property and cannot be tied to a rate per hectare. He also confirmed that the use and hydrologic characteristics of both the Mullen and Murphy lands were considered similar and so assessed in Outlet Liability. The Tribunal accepts the evidence of the Engineer as to the methodology of the assessment.

Order of the Tribunal

The Tribunal therefore orders that:

1. The appeals by Judith Murphy under Section 48(1) and Section 54(1) be granted in part.

2. The appeals by T. S. Mullen Farms Ltd. under Section 48(1) and Section 54(1) be granted in part.

3. The Engineer shall amend the September 28, 2015 report as follows:

• the references and costs related to the earth berm and inlet drop structures be removed from the report

• the alignment of the new open drain to be centred on the Mullen/Murphy property line

• the alignment of the closed reaches at the north and south ends of the open drain to remain as described in the report but be adjusted to fit the alignment of the open drain.

• the Engineer will more accurately calculate the maximum top width of the drain and the consequent land allowance

• all material excavated from the open drain, with the exception of topsoil used for restoration, to be piled in a windrow on the Mullen land within a working corridor of 8 m for disposal by Mr. Mullen.

• all working corridors to be redefined in the report

• all allowances under Section 29 and Section 30 to be recalculated

• total revised cost including Incidentals, Allowances and Construction be recalculated

• Schedule of Assessment – Mullen Drain, of the Report be corrected to reflect the revised costs associated with the works.

• the Special Benefit be eliminated and the same principals and apportionments as between Benefit and Outlet assessments as originally suggested be applied to the development of the revised Schedule of Assessment.

• the Engineer include sub watershed limits on the plan to identify lands flowing north and south and describe in report

4. Once the amended report has been completed, the Tribunal directs that the amended report be circulated to all assessed owners by the Municipality. An Affidavit of service of the amended report is to be sent to the attention of the Tribunal Coordinator. This amended report shall not be brought before the Drainage Board, Council or the Court of Revision. If there are any appeals regarding the amended report, the Tribunal panel shall remain seized of the matter and will hold a hearing at a date to be determined. Assessed owners will have 30 days from the mailing date of the amended report to file appeals to the attention of the Clerk of the Municipality. Appeals shall be limited to challenges against the revised assessments only under Section 54 of the Act.

5. The non-administrative costs to the Municipality incurred with respect of these appeals shall form part of the cost of the drainage works, and such costs include the Engineer’s fees and expenses to complete the revised Report, as well as the Engineers fees and expenses for attending and participating in the hearing.

6. There shall be no other Order as to costs and all parties are responsible for their own costs.