Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West, 2nd Floor NW

Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 Stone Road West, 2nd étage NW

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:

Switzer and McLean Switzer Drains (RE) [Preliminary Motion Decision] Municipality of Southwest Middlesex

Switzer and McLean Switzer Drains (RE) [Premliminary Motion Decision]

STATUTE:

Drainage Act

HEARING:

May 27, 2019

DATE OF DECISION:

May 27, 2019

021Switzer18

NEUTRAL CITATION:

2019 ONAFRAAT 10

SWITZER AND MCLEAN SWITZER DRAIN Municipality of Southwest Middlesex

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

AND IN THE MATTER OF: An application to the Agriculture, Food and Rural Affairs Appeal Tribunal by the Municipality of Southwest Middlesex, Ontario under section 100 and section 72 of the Drainage Act, with respect to the account of Ray Dobbin, engineer for the Switzer and McLean Switzer Drains.

Before: John O’Kane, Vice-Chair; Jim McIntosh, Vice-Chair; Lee Holling, Member

Appearances: Wayne Meagher, Counsel for the Applicant Robert Novakovic, Law Student Marigay Wilkins, Witness for the Applicant Ray Dobbin, Respondent

PRELIMINARY MOTION DECISION

Background

The current hearing panel of three members of the Agriculture, Food and Rural Affairs Appeal Tribunal (the “Tribunal”) were appointed by the Tribunal Chair to consider the Municipality of Southwest Middlesex’s (the “Municipality”) application under section 72 of the Drainage Act, R.S.O. 1990, c. D.17 (the “DA”) to review the February 26, 2016 account of Ray Dobbin Engineering Inc. (the “Respondent”) paid by the Municipality on March 2, 2016. The account related to a drainage report under section 78 of the DA and previous decision¹ of the Tribunal composed of different members released on May 23, 2017 (the “2017 Tribunal Decision”).

The Municipality’s application to the Tribunal is for a review of the Respondent’s account under section 72 of the DA and the Municipality’s specific relief requested is that the Tribunal reduce the Respondent’s account and direct that the Respondent refund the amount to the Municipality. The Respondent’s February 26, 2016 account was for $44,302.00 plus HST of $5,759.26 for a grand total of $50,061.26.

On April 25, 2019, the Respondent raised a preliminary jurisdictional point related to a decision of the Tribunal Chair set out in a letter dated January 9, 2019.

The Tribunal Chair’s January 9, 2019 decision granted the Municipality’s December 21, 2018 application under section 100 of the DA to extend time to apply to the Tribunal under section 72 of the DA for a review of the Respondent’s account. Section 72 of the DA gives a municipality forty days after receiving the engineer’s account to apply to the Tribunal seeking a review of the account. The Tribunal Chair’s January 9, 2019 letter granted the Municipality an extension of over 1,000 days to bring the section 72 application.

The Respondent’s preliminary issue related primarily to procedural unfairness arising from not receiving formal notice of the Municipality’s extension application and not being afforded any opportunity to address the Municipality’s extension request and that his account, having been addressed in the previous Tribunal decision, was final and the current panel had no authority to review or amend that previous decision.

During the submissions of the Respondent and the Municipality on those preliminary issues, the hearing panel raised an additional jurisdiction issue of its own. The hearing panel was concerned that the Tribunal Chair’s extension decision of January 9, 2019 may not have been a decision that a single member of the Tribunal may make. If it was not, then in these circumstances, the hearing panel would have no authority to consider an application under section 72 of the DA beyond the forty-day time limit.

The hearing panel concluded the cure for any procedural unfairness to the Respondent and the cure of any jurisdictional gap arising from the Tribunal Chair’s January 9, 2019 decision would be to invite the Municipality to formally apply to the hearing panel under section 100 of the DA to extend the forty-day time limit. The substantive section 72 matter was stood down and a schedule allowing the Municipality to apply in writing to the hearing panel under section 100 of the DA to extend time to review the Respondent’s account under section 72 of the DA was created. The agreed schedule included notice to the Respondent and an opportunity to make written submissions in response.

In these circumstances, where the jurisdictional gap arises from the Tribunal accepting and then acting on the Municipality’s extension request in January 2019, the hearing panel does not include the time between December 21, 2018 and the present time to be time or delay attributed to the Municipality or to the Respondent, but rather time attributed to the Tribunal.

Having received and reviewed the written evidence and submissions of the parties and as explained in these reasons, the hearing panel declines to exercise its discretionary authority under section 100 of the DA to extend the time for the Municipality to apply for a section 72 review of the Respondent’s account.

Tribunal Jurisdiction under the Drainage Act

Under section 1 of the DA, the “Tribunal” is defined to mean the Tribunal as continued under the Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, c. M.16 (the “MAFRAA”).

The general powers of the Tribunal under the DA are set out in sections 98 to 100.

Section 99 of the DA directs that “[I]n any application, appeal or reference to the Tribunal”, the proceeding “shall be commenced” by serving notice. From that section it is seen that the Tribunal is empowered to receive “applications”, “appeals” and “references”.

The nature of “applications” to the Tribunal under the DA and any additional Tribunal powers specific to applications are set out in section 72 and section 76(1).

The nature of “appeals” to the Tribunal under the DA and any additional Tribunal powers specific to appeals are set out in section 5(2), section 6(3), section 8(3), section 10(6) and (7), section 45(2), section 48, section 49, section 50, section 51, section 54, section 58(5), section 62(2), section 64, section 65(11) and section 76(3) and (4).

The nature of “references” to the Tribunal under the DA and any additional powers specific to references are set out in section 5(2), section 8(3), section 10(6) and (8), section 45(2), section 51 and section 58(5).

The DA rights of parties to make application, appeal or reference to the Tribunal are time-limited rights. However, included in the Tribunal’s general powers under section 100 is a discretionary authority where the Tribunal considers it proper to extend the time for “application, appeal or reference”.

The Municipality’s Application to Extend the Time under Section 72

The hearing panel’s authority to extend any time limit for “application, appeal or reference” under the DA flows from section 100 of the DA “in any case that it considers proper”. Those latter seven words convey wide discretionary authority to the hearing panel in such an application.

Extending a time limit established in legislation by the legislators should not be a matter of routine, otherwise the legislators’ intentions in creating time limits would be rendered meaningless. Therefore, the hearing panel concludes that extending a time limit created in the DA should be treated as an exceptionality.

In these circumstances and as discussed previously, given that the passage of time between December 21, 2018 and April 29, 2019 was due in part to the Tribunal (the Tribunal accepting and processing the December 21, 2018 extension request as it did, the Tribunal Chair’s January 9, 2019 decision, and the scheduling of the hearing for April 29, 2019), the hearing panel concludes that the only time period the Municipality needs to address is the period between the Respondent’s February 26, 2016 account and December 21, 2018 when the Municipality submitted its extension application to the Tribunal.

Inferred from the Municipality’s materials is that Tribunal staff and indeed the January 9, 2019 decision of the Tribunal Chair lead the Municipality to an incorrect understanding of the relevant processes and authorities and a belief that the Tribunal Chair sitting alone could grant an extension request. However, no amount of incorrect information can clothe the hearing panel with jurisdiction because jurisdiction flows from the legislation, not from misinformation or misunderstanding.

In these circumstances, the Municipality must:

1. Satisfy the hearing panel that there were (or are) exceptional circumstances;

2. Satisfy the hearing panel that there were (or are) good reasons why it could not make its section 72 application within the prescribed time; and

3. Address the relative prejudice to each of the Municipality and the Respondent.

The Municipality included the following in support of its extension request under section 100 of the DA:

• On December 21, 2018, the Municipality made a section 100 extension request prior to retaining legal counsel.
• The Municipality’s December 21, 2018 submission:
  • acknowledged the Respondent’s account had been received on February 29, 2016 and was not disputed at that time and that it was paid in good faith;
  • cited extenuating circumstances led to the delay in making an application to the Tribunal;
  • noted that numerous landowners appealed the Respondent’s Report;
  • confirmed that the Municipality received the 2017 Tribunal Decision on May 23, 2017;
  • noted that there were requests for review of the 2017 Tribunal Decision that culminated in a request for review decision received December 5, 2017 (the “Review Decision²”);
  • noted that the Municipality requested clarification regarding the 2017 Tribunal Decision;
  • confirmed that the Municipality received the clarification in July 2018;
  • stated that at some short time after receiving clarification due to impending municipal elections, the Municipal council was in a lame duck position that limits the decisions it can make;
  • noted that a new Municipal council was elected on October 25, 2018;
  • noted that on December 12, 2018, the new Municipal Council reviewed a December 12, 2018 staff report about the Switzer and McLean Switzer Drain;
  • noted that the December 12, 2018 staff report made alternative recommendations to Municipal Council:
    • “that Council receives this report for information and confirms that the invoices should be paid by the ratepayers on the drain as ordered in the Tribunal decision”.
    • “that Council instruct staff to file an appeal under sections 72 and 100 of the Drainage Act”.
  • Confirmed that on December 12, 2018, Municipal Council adopted a resolution to seek an extension under section 100 of the DA to apply to the Tribunal to review the Respondent’s account.
• On December 14, 2018, while attending a Drainage Superintendent’s Chapter Meeting, the Municipality’s Drainage Superintendent advised the Respondent that Town Council had directed staff to request an extension under section 100 of the DA in order to make an application under section 72 of the DA.
• Municipal staff were unaware that written notice to the Respondent would be required in making an extension request under section 100 of the DA and had it been required, Municipal staff would have expected the Tribunal Coordinator to have advised as such.
• On January 9, 2019 the Municipality received confirmation from the Tribunal Coordinator that the Tribunal Chair was considering the extension request.
• On January 9, 2019 the Municipality received the letter from the Tribunal Chair granting the requested extension.
• Municipal staff relied on the communications from the Tribunal Coordinator and the Tribunal Chair.
• The Municipality retained legal counsel on March 6, 2019 to assist with presenting its section 72 application on April 25, 2019.
• The Respondent’s account is disproportionate to the value of the works deemed in the 2017 Tribunal Decision to be nil
• This case is extremely important due to that disproportionality
• For the Respondent’s account to stand unreviewed would cause unjust enrichment of the Respondent
• The Municipality is prejudiced because it may have to pay for another engineer’s report
• Due to the shortcomings of the Report found in the 2017 Tribunal Decision some landowners on the drain have refused to pay their share of the costs arising from the Respondent’s Report

The Respondent’s Response

One aspect of the Respondent’s position is that the “Tribunal has already made a decision that the engineering costs are appropriate.”

That position encompasses the finality principle.

Another aspect of the Respondent’s position is “[i]f engineers are asked by municipalities to take on difficult and controversial projects, the engineer has to proceed on the expectation that he will get paid and not have a municipality change their minds years and months later.”

That position encompasses the principle of fairness/unfairness or prejudice.

Discussion

There are very limited opportunities of appeal, request for review or possible judicial review of a Tribunal decision. Besides those statutory avenues, section 101 of the DA is clear that “[i]n any application, appeal or reference under sections . . . the decision of the Tribunal is final”.

That clear statutory direction reinforces this hearing panel has no authority to revisit the findings of the 2017 Tribunal Decision.

Some of those 2017 Tribunal Decision findings warrant repeating:

• the proposed works barely meet the 25 mm standard
• the proposed work will reduce the functionality of the drain
• the proposed works practically diminish the drainage ability in the area
• the Engineer should have concluded it was neither practical nor reasonable to proceed with the Report
• the Report is impractical and technically flawed
• the Report fails to meet the regulatory requirements
• the Engineer failed to consider the importance of his obligations under section 11 of the DA
• the Engineer failed to meet his duties under section 11 of the DA
• the Engineer failed to rely on the Drainage Guide for Ontario, resulting in a fundamental and incurable flaw in the Report
• the Report was invalid
• the Municipality will repeal the by-law that adopted the Report
• 50% of all costs including publication of the Report and the Engineer’s attendance at the Council meeting to consider the Report on March 10, 2016 shall be levied against the governing by-law on the Switzer Drain
• 50% of all costs including publication of the Report and the Engineer’s attendance at the Council meeting to consider the Report on March 10, 2016 shall be levied against the governing by-law on the McLean Switzer Drain
• all costs related to the project billed after March 10, 2016 shall be paid out of the general funds of the Municipality
• there shall be no other Order as to costs

It is apparent from those findings in the 2017 Tribunal Decision that the hearing panel found significant shortcomings in the Respondent’s Report and the hearing panel was highly critical of the Respondent’s Report.

No one can read that 2017 Tribunal Decision and not understand the nature and extent of the hearing panel’s criticisms of the Respondent’s Report.

Those findings, conclusions and criticisms of the Respondent’s Report were released on May 23, 2017.

Those findings, conclusions and criticisms of the Respondent’s Report would have then crystallized for the Municipality, or shortly after May 23, 2017, that it had an issue with the Respondent’s account that warranted a review under section 72 of the DA.

None of the issues that arose subsequent to May 23, 2017 relied on by the Municipality as extenuating circumstances satisfy the hearing panel of exceptional circumstances. Those issues argued by the Municipality include landowners seeking a request for review of the 2017 Tribunal Decision, the clarifications sought by the Municipality about which by-laws governed the hearing cost allocations, or the 2018 municipal elections creating a lame duck inability for the Municipality to act.

On May 23, 2017, or at some reasonably short while thereafter, the Municipality had open to it the opportunity to make application under section 100 of the DA to extend the forty-day time limit in section 72 for an application to review the Respondent’s account. The Municipality did not avail itself of that opportunity.

Had the Municipality made such an application at some reasonably short while after May 23, 2017, the application could have been considered by the same hearing panel that made the 2017 Tribunal Decision. That hearing panel having heard and considered all the evidence about the drainage works proposed in the Respondent’s Report was in the best position to consider such an application.

Had the Municipality made such an application at some reasonably short while after May 23, 2017, this hearing panel would have considered it proper in those circumstances to extend time under section 100 of the DA. That is because although the forty-day limit had long since passed from the Municipality receiving the Respondent’s account in February 2016, it was only with the publication of the 2017 Tribunal Decision that the shortcomings found by that hearing panel were illuminated for the Municipality’s consideration. That would have been an exceptional circumstance warranting an extension of the forty-day limit in section 72 of the DA. That would be an exceptional circumstance enough for this hearing panel to overcome the finality principle animated in section 72 of the DA. That would have been an exceptional circumstance to overcome the prejudice to the Respondent.

The Municipality has failed to satisfactorily explain why, after receiving the 2017 Tribunal Decision on May 23, 2017 with all its criticisms of the Respondent’s Report, it did not try to seek to review the Respondent’s account until December 2018.

The Review Decision only amplifies the extent of the Municipality’s failure to explain why it did not act sooner about the Respondent’s account. According to the Review Decision, on June 22, 2017 several landowners sought a request to review the 2017 Tribunal Decision. That was less than a month after the 2017 Tribunal Decision was published. Part of the arguments of those landowners was that costs should not be assessed against landowners that objected to the project and the “Engineer’s report was set aside by the Tribunal because it was not impartial, technically flawed and failed to comply with the Drainage Act”. That Review Decision brings into sharp focus that within one month of the publication of the 2017 Tribunal Decision, unrepresented landowners had understood the import of the criticisms of the Respondent’s Report, and had sought remedies under the DA. That begs the question why the Municipality, if concerned that it had received no value for $50,061.26 it paid for the Respondent’s Report, did nothing at around that same time. That begs the additional question why the Municipality in those circumstances did nothing to pursue remedies under the DA for another nineteen months (June 2017 to December 2018).

The Municipality has failed to satisfy the hearing panel of any exceptional circumstances between May 23, 2017 and December 2018.

There is arguably prejudice to the Respondent if his account must be reviewed years after the work is done and the account is rendered and paid. There is arguably prejudice to the Municipality in paying the Respondent’s account for a Report so criticized in the 2017 Tribunal Decision. There is relatively equal potential prejudice to the Respondent and to the Municipality.

However, in these circumstances, given the Municipality’s inability to satisfy us about the delay between the 2017 Tribunal Decision and its December 21, 2018 application to extend the time for a section 72 review of the account and any real exceptional circumstances, the balance of prejudice tips against the Municipality in favour of the Respondent.

Order of the Tribunal

The Tribunal thereby orders

1. The Municipality’s application under section 100 of the DA to extend time to make an application under section 72 of the DA to review the Respondent’s February 26, 2016 account is denied.

2. In these circumstances, there will be no order as to costs and each party is responsible for its own costs.

Dated at Collingwood, Ontario this 27th day of May, 2019.

Footnotes

1. 12017 ONAFRAAT 7
2. 22017 ONAFRAAT 20