Bromley (Township) v. Donohue, 1997 ONDR 5

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE COURT OF THE DRAINAGE REFEREE

Bromley (Township) v. Donohue

1997 ONDR 5

DATE OF DECISION:

1997-11-07

1997-05

STATUTE:

Drainage Act

HEARING:

BETWEEN:

CORPORATION OF THE TOWNSHIP OF BROMLEY

APPELLANT

-AND-

KEVIN DONOHUE

RESPONDENT

DECISION

An Application was made by David A. Stewart, Barrister and Solicitor for the Township of Bromley on the 29^th day of September 1997 to the Ontario Drainage Referee requesting that a Hearing be convened for the purpose of determining disputes which had arisen between the Municipality of the Township of Bromley and the Respondent Contractor, Kevin Donohue, with respect to the construction of the St. Michael’s-Donohue Municipal Drain. The Application was pursuant to Section 106 (1) (c) (d) (e) of the Ontario Drainage Act, R.S.O. 1990, Chapter D 17. The said Section reads as follows:

1. The Referee has original jurisdiction,

(c) to determine claims and disputes arising under this Act, subject to Section 120 claims for damages with respect to anything done or purporting to have been done under this Act or a predecessor of this Act or consequent thereon;

(d) to entertain applications for Orders directing anything to be done under this Act;

(e) to entertain applications for Orders restraining anything proposed or purporting to be done under this Act or a predecessor of this Act;

Pursuant to the above noted request, Notices of Hearing were sent out to all affected parties advising that a Hearing would be held on the 6^th day of October 1997 at the hour of 2:00 p.m. at the Court House, Pembroke, Ontario.

At the commencement of the Hearing, Mr. Stewart the solicitor for the Municipality, advised that in his opinion the Contractor had proceeded to construct the Drain illegally without having first entered into a proper contract with the Municipality and entirely without the supervision or direction of the Drainage Engineer. He advised that as a result the Municipality faced a major legal problem and was reluctant to make payments with respect thereto. He indicated that the Drainage Engineer had since inspected the work and had reported that there were up to twenty-six (26) outstanding deficiencies.

Mr. Good, acting on behalf of the Respondent, indicated that the Drain was a simple project and although he recognized there were problems, he felt they could be settled by negotiation. He objected to the increasing costs of legal proceedings and indicated that there was further work to be done before freeze-up to prevent serious erosion. He recommended that further work be done by Mr. Donohue on a without prejudice basis.

Mr. Don Dowdall, speaking on behalf of the local Separate School Board, expressed surprise at the difficulties that had developed over the drain and urged a quick settlement. Mr. Kevin Dick, an assessed owner, also urged that the work be completed on a co-operative basis so that further costs would not be incurred. Mr. Sylvestre Power, speaking on behalf of the St. Michael’s Roman Catholic Church, also supported the completion of the work, although with some amendments relating to the Catholic Church property.

With the consent of the parties present and upon the recommendation of both Solicitors, it was agreed to adjourn the proceeding until the 23^rd day of October 1997 at the hour of 10:00 in the forenoon at which time a Hearing would be conducted with respect to all issues of concern with respect to the St. Michael’s-Donohue Drain. It was agreed in the meantime that the Respondent could, on a non-prejudiced basis, complete certain aspects of the work, particularly with a view to erosion control before the winter season.

It was further agreed that the Parties would exchange and file pleadings before the date.

Several days later in response to a request by Mr. Good, Solicitor for the Respondent, made directly to the office of the Ontario Drainage Referee via fax on the 15^th day of October 1997, a teleconference hearing was conducted with the consent of both Counsel on the 21^st day of October 1997 at 2:30 p.m. At that time, it was agreed that the matter would be further adjourned for Hearing until the first and second days of December 1997 commencing at the hour of 10:00 o’clock in the forenoon.

After two days of Hearing conducted on the first and second days of December 1997 the parties, after several retirements for the purpose of negotiating a settlement and several meetings in Chambers, recommended a settlement in accordance with Minutes of Settlement prepared. The Minutes of Settlement are attached hereto as Schedule “A”. The Referee accordingly endorsed the Record as follows:

(a) Order to go in accordance with Minutes of Settlement filed dated November 7, 1997 with clause 4 therein amended to require that the matter be referred back to the Referee if the Items outlined in clause 3 are not complied with.

(b) Secondly, By-law 014-96 of the Township of Bromley to be amended to incorporate the changes outlined in the Revised Drainage Report of McIntosh and Hill, Engineering Services Limited, dated November 25, 1997. The revisions recommended by the Drainage Engineer to the Drainage Report were extensive and are attached hereto as Schedule “B”.

The above mentioned Minutes of Settlement resolved most issues; however, it specifically left one matter unresolved, namely the question of legal and engineering costs. Paragraph 9 of the Minutes of Settlement provided:

“Since the Ontario Drainage Tribunal decision of May 26, 1997, the parties have incurred additional, unanticipated legal and engineering costs, fees, damages, overhead and expenses which were not contemplated and included in the costs of the subject drain. The issue of the payment of same is specifically reserved and shall be the subject of a decision as to payment by the Drainage Referee”.

To accommodate that provision of the Minutes of Settlement, the Drainage Referee set aside a date for a further hearing with the consent of all parties, namely the 15^th day of January 1998 commencing at the hour of 10:00 a.m. at the Court House, Pembroke, Ontario.

Consequently on the 15^th day of January 1998, the Ontario Drainage Referee conducted a further hearing in which the only outstanding issue was the matter of costs, both legal and engineering, arising directly from the expenses incurred because of the disputes which arose between the municipality and the contractor in the course of the construction of the St. Michael’s-Donohue Municipal Drain. At this time, a brief review of the main features of the St. Michael’s-Donohue Municipal Drain is in order.

The Ontario Drainage Tribunal, in its decision dated March 26, 1997, described the drain as follows:

“The drain was initiated by petition under Section 4 with Mr. Kevin Donohue as the initial petitioner. Water from the school and Church properties needed an outlet and representatives with signing authority for these two properties added their names to the petition. The water from a small section of the Dick lands to the north of the Church property flows across the Church lot between the buildings and the cemetery. The water then flows across the school property to the lane on the Kevin Donohue land. The grade on the Donohue farm is about 2%. The water follows the lane for a short distance before the natural depression swings northerly across a field on the Donohue farm, across the barn yard, then along the property boundary between the Dick and Donohue farms before running southerly across the Donohue farm to an outlet in the Cull Donohue Drain.

The Church lot has some ponding on it, but a major concern is the subsurface water that saturates part of the land used for the cemetery. The school property is extensively used by the community and includes a ball diamond and open air ice rink. The roof drain from the school is taken in a tile across the school yard to the existing ditch at the north side of the Donohue lane. The school and the Recreation Committee that operates the rink and ball field, with the co-operation of Mr. Donohue, has dug a ditch to the south along the back of the school property to the Donohue lane where the ditch turns east and follows the lane. Currently the water floods over the lane at this corner and causes some flooding on the Donohue lands.

The petitioners are asking for a drainage works to provide outlet for the surface water from the school and the Church and to provide capacity at the corner of the Donohue lane, as well as for drainage of the Donohue barn yard and relief for water that flows from the Dick lands onto the Donohue field east of the barn yard”.

The Drain had only 14 assessed owners, including the Ministry of Transportation, of which six owners bore most of the assessment costs. The Ontario Drainage Tribunal conducted a hearing pursuant to Sections 48 and 54 of the Drainage Act and ordered as follows:

1. The Engineer is to meet with the owners of the four properties directly affected by the work, namely, representatives from St. Michael’s Parish Church; representatives from the Renfrew County Roman Catholic Separate School Board; Mr. Kevin Dick; Mr. Kevin Donohue and Mr. Patrick Donohue, as well as the Drainage Superintendent from the Township. At this meeting, these parties will determine what construction work should be done to address the drainage problem. They should also consider whether anything will be required on the Kevin Dick property in order for the work proposed on the Donohue property to function properly (i.e. should the pond and outlet tile on the Dick property be part of the drain or not).

2. After this meeting the Engineer is to prepare an outline (with reasonable details) of the work to be done, including the amended work at the cemetery as proposed at the hearing, and an estimate of cost showing:

(a) The cost of construction.

(b) Allowances for land and for land damages and any value the existing ditch has to the proposal;

(c) Engineering fees, including the cost of a new Engineer’s Report.

(d) Administration, including the cost of the Tribunal hearing.

(e) The total estimated cost of the drain.

3. On behalf of the owners, the Township Drainage Superintendent will ask each of the owners of the directly affected properties listed above to approve the proposed work. Each owner will have to indicate in writing that the proposed work is an acceptable solution to their drainage problems.

4. The Engineer will then prepare an assessment of the estimated cost of the proposed work.

5. The Drainage Superintendent will ask each of the owners assessed for the work for a written agreement accepting the proposed assessments.

6. This work of obtaining acceptance by all of the owners assessed is to be completed by April 30, 1997.

7. The Tribunal recognizes that it may be difficult to obtain acceptance from M.T.O. on this short notice and is prepared to accept proof of formal notifications of M.T.O. by the Township of the proposal and the Tribunal’s intention as outlined in this direction as being sufficient for the purposes of this direction.

Subsequent to a meeting held by the owners on April 1, 1997 and a Report dated May 7, 1997, prepared by Mr. McIntosh, the Drainage Engineer and provided to the Drainage Tribunal, the Ontario Drainage Tribunal gave the following final Order dated May 26, 1997:

1. The Township is to refer the August 20, 1996 report on the St. Michael’s-Donohue Municipal Drain back to the Engineer for modification incorporating:

(a) The agreed upon solution as outlined in the minutes of the meeting of landowners held April 1, 1997.

(b) The amended assessment schedule for the cost of this revised solution dated April 27, 1997 and circulated to the property owners for their approval.

2. Following the modification of the report by the Engineer, a copy of the report is to be sent by the Township, by prepaid mail, to each owner shown on the schedule of assessment, together with a notice giving each owner 15 days from the date of the mailing of the notice (which date is to be specified in the notice) to file in writing any objections with the Clerk of the Township who will forthwith forward a copy of the objection to the Tribunal.

3. If there are no objections filed with the Clerk of the Township within the specified time, the report as modified and circulated to the ratepayers is confirmed and the Council may proceed to pass a By-law authorizing the work without the need for a Court of Revision or other appeals to the Tribunal.

4. If an objection is filed, the Tribunal will decide how to deal with the objection before the Council takes any further actin on the project.

The Clerk of the Township, Lauretta Rice, testified that on instructions from the Drainage Engineer, she circulated copies of the draft contract documents (it should be noted that they were not marked draft) to the four parties namely Kevin and Pat Donohue, Reverend K.P. Bradley (St. Michael’s Parish), Mr. Don Dowdall (R.C.R.C. Separate School Board) and Mr. Kevin Dick. A covering letter asked the parties to review the documents and return the attached form by 12 noon Tuesday, June 17, 1997. An attached form headed “Invitation to Tender” was also circulated on the same date, namely, June 13, 1997 requiring each landowner to indicate that he “had reviewed the above document and found it acceptable”.

She explained that all four documents were returned to the Township Office duly executed and the documents returned by Kevin Donohue had his signature attached to part of the contract agreement with the date endorsed thereon as 17 June 1997. The signature was not duly witnessed and the insurance provision was not correctly answered.

Lauretta Rice then advised that Mr. McIntosh, the Drainage Engineer, immediately notified Kevin Donohue in a letter dated June 2, 1997 referring to the documents signed by Mr. Donohue as a draft and went on to explain why the contract would be conditional because Section 58 of the Drainage Act required that the Township allow 10 days after passage of the provisional by-law for assessed owners to “serve notice of intention to make application to quash the by-law”. He then added that if no notice of intention to appeal is made, Council then can formally award the contract”. He went on to state, “as it appears you are ready to sign the contract and get this project completed, I will send you additional copies of the tender document, full sized plans and an outline of the paperwork needed in the near future”.

The Court observed that the letter is clear as to its meaning, it characterizes the documents signed by Mr. Donohue as draft documents, set out the procedure required and explains that a formal contract cannot be signed by Council until the procedural steps are completed.

The Township Clerk further explained that in compliance with the Order of the Ontario Drainage Tribunal she circulated the revised Report of the Drainage Engineers advising the various assessed owners that they had 15 days from the date of mailing to file an appeal in writing to the Ontario Drainage Tribunal indicating that the last date for filing objections would be 12:00 noon, Monday, July 14, 1997.

The evidence further disclosed that a second letter was sent to Kevin Donohue on the 10^th day of July 1997, over the signature of Jim McIntosh, P.Eng., advising that the first tender circulated was a draft document only and enclosing new copies of the revised tender form and requesting that the new tenders be reviewed and signed by Mr. Donohue. The Engineer advised of a few changes in the documents and noted that the Township intended to pass the By-law for the Drain on July 15, 1997. He once again reminded Mr. Donohue that there were two appeal periods, namely 15 days and 10 days that had to be adhered to before construction could begin. He advised that the earliest date for construction to begin would be August 11, 1997, if no appeals were filed. He further reminded Mr. Donohue that a 10% deposit was required to be delivered with the signed tender agreement before construction could commence. Once again, it appears that the Engineer was more than explicit in outlining the requirements allowing no grounds for misunderstanding.

In addition, in a letter dated July 28, 1997 addressed to Mr. Kevin Donohue, Mr. Todd Perry, a Drainage Engineer with McIntosh Hill wrote, “we understand that you have been in touch with the Township to have Sam Leach on site tomorrow. Please be advised that we cannot provide any layout and that Mr. Leach cannot inspect any work on our behalf unless the contract documents have been signed”. He further requested that Mr. Donohue provide proof of insurance, the tender deposit and instructed that they could provide a layout within 48 hours after the proper documents had been executed.

Finally, on July 29, 1997, David A. Stewart, Municipal Solicitor, wrote to Donald R. Good, Solicitor for Mr. Donohue advising as follows:

“To date your client has not executed the contract and returned it to the municipality. Further, it is my understanding that proof of insurance and tender deposit have not yet been delivered. We do not know why your client has not complied with these requirements, which, as you know, are standard procedure… This matter is acquiring some urgency. I understand your client has commenced certain works on his own property, as he is entitled to do. However, he will not be paid for same unless they are in compliance with the specifications and Mr. Donohue complies with the requirements as to contract, insurance and tender deposit”.

In addition, it was the testimony of Lauretta Rice, Clerk of the Township that she personally advised Mr. Pat Donohue, the son of Kevin Donohue of the requirements, namely the need to execute a proper formal contract and provide the insurance, deposit, etc.

Notwithstanding and in the face of the above mentioned communications, overtures, pleas, demands and even threats, Kevin Donohue proceeded with the construction work without the proper engineering layout, without any supervision and without even the final plans and specifications. A multitude of communications continued back and forth between the parties until it reached a climax with the application by the Township Solicitor on September 29, 1997 to the Referee to intervene with a view to restraining further action on the part of Mr. Kevin Donohue. It should be noted that on September 11, 1997 Council of the Township of Bromley passed a Resolution instructing the Township Solicitor to advise Kevin Donohue’s Solicitor that if Kevin Donohue had not properly signed three copies of the contract documents by the 23^rd day of September 1997 that Council would proceed with the construction of the Drain in accordance with By-law 014 / 96 passed July 15, 1997.

After the convening of the Hearing before the Referee on the 6^th day of October 1997, it appears that all parties made a determined effort to negotiate and resolve their outstanding differences. Above all, it was evident that the Drainage Engineer, Mr. McIntosh, displayed a spirit of tolerance, co-operation and common sense which substantially contributed to the resolution of the issues.

Attached hereto as Schedule “B” is a letter from the Drainage Engineer addressed to the Township which indicates Mr. McIntosh’s efforts to resolve outstanding issues and approve the Drain as built. It clearly discloses that the Drain was not constructed in accordance with the By-law and the specifications outlining twenty-one points of concern relating to the as-built drain. However, he points out that with certain modifications he is prepared to certify the re-constructed drain “to work as well or better than the drain approved by the By-law”. The Township Council also demonstrated its willingness to compromise and seek some accommodation when they authorized partial payment for the work done over the objection of their own legal counsel.

Negotiation for resolution of the outstanding issues included a meeting of the principal parties on the 21^st day of November 1997 which resulted in several changes to the design, particularly in relation to the Church property.

Finally, and in accordance with the Minutes of Settlement, the Drainage By-law was amended to incorporate all the changes, including the as-built construction, together with modifications required by the Drainage Engineer.

Thus, the renegade ditch, tile and catchbasin, all of which were constructed in the wrong place and without supervision, were legitimized through patience, understanding and common sense, but at an additional cost in engineering and legal expense.

The additional costs, and these do not include the extra costs to the Municipality of numerous meetings involving staff and Council Members, are summarized as follows:

The extra engineering costs titled Cost of Dispute Resolution by the Engineer totaled $10,837.50. Of this amount, the Engineer attributed $1,100.00 to the review of the revisions required and requested with respect to the Church property.

The Municipal Solicitor also filed his time dockets with the Referee which were very detailed and filed with the consent of Mr. Good, Solicitor for the Respondent. They totaled 82.93 hours of legal work and disbursements of $310.11.

The final issue to be determined by the Referee was to decide how these extra expenses were to be allocated and paid. The Referee was satisfied as to the quantum of the extra expenses and as to the fact that they related exclusively to the matter of dispute resolution and would not have been incurred if the drainage work and procedures had proceeded in the normal course. The testimony of the Reeve, Clarence McBride, advised the Referee that the Township had more than 20 Municipal Drains and they had never encountered any problems such as had occurred with respect to the St. Michael’s-Donohue Drain. He attributed the difficulty to the Order of the Ontario Drainage Tribunal which restricted the Township’s traditional authority with respect to the tendering for and selection of the contractor.

The Referee noted that time and time again in his evidence, Mr. Kevin Donohue indicated that he refused to properly sign the contract because he believed that his authorization to do the work came not through the contract with the Township, but rather by the collective decision of the owners arising from the April 1, 1997 meeting as endorsed by the Order of the Ontario Drainage Tribunal. Mr. Donohue’s conduct revealed his belief that he did not have to answer to the Township administration nor to the Drainage Engineer, but was free to make modifications at will.

The Referee therefore finds as a matter of fact that the actions of Kevin Donohue, and in particular his refusal to comply with the request of the Drainage Engineer and the Township Administration, were largely responsible for the extra costs incurred in this matter, which costs will no doubt equal the total cost of construction. Further, the Referee finds as a matter of law that the Respondent, Kevin Donohue, was not legally justified in refusing to sign the proper contract documents and otherwise follow the directives of the Drainage Engineer and the Municipal Council. The Referee notes that, but for the intervention of Pat Donohue, the son of Kevin Donohue, who successfully resolved the legal impasse, the cost would have escalated much further without a legal drain in place.

I therefore Order that the additional engineering costs, namely $10,837.50, be assessed pro rata as a legitimate additional expense to the Drain. All major assessed owners agreed with the selection of Kevin Donohue as the contractor and therefore must bear some responsibility for his misconduct. With respect to legal fees, I fix the maximum legal fee chargeable at eight thousand two hundred and ninety-three dollars ($8,293.00) and Order that ½ of the said sum be charged exclusively against the property of Kevin Donohue as an additional assessment. The balance of the legal fee, including disbursements is to be charged pro rata to all assessed owners as set forth in the schedule of assessments.

This matter clearly demonstrates the traditional wisdom of the Drainage Act in leaving the administration of, the maintenance of and the construction of municipal drains exclusively a prerogative of the municipality. That jurisdiction should not be compromised except in the most extreme cases.

DATED March 12, 1998

DELBERT A. O’BRIEN, Q.C.

ONTARIO DRAINAGE REFEREE

SCHEDULE “A”

File No. 97 / 1586

IN THE COURT OF THE ONTARIO DRAINAGE REFEREE

IN THE MATTER OF the Drainage Act, R.S.O. 1990, Chapter D.17 as amended.

AND IN THE MATTER OF the Appeal of the Township of Bromley with respect to the St. Michael’s-Donohue Municipal Drain in the Township of Bromley in the County of Renfrew.

CORPORATION OF THE TOWNSHIP OF BROMLEY

APPELLANT

-AND-

KEVIN DONOHUE

RESPONDENT

MINUTES OF SETTLEMENT

The Parties agree to settle this matter as follows:

1. The Parties shall execute final contract documents to be drafted by the Township Engineers, McIntosh Hill Engineering Services Ltd., said drafting to be based upon “as built” drawings of the subject drain.

2. McIntosh Hill Engineering Services Ltd., shall prepare “as built” drawings of the subject drain and Kevin Donohue shall construct same in accordance with the contract referred to above, for the total contract price of $20,000.00.

3. Pat Donohue representing Kevin Donohue and Jim McIntosh representing McIntosh Hill Engineering Services Ltd. (and such other persons as Pat Donohue and Jim McIntosh shall mutually agree upon) shall meet at the site of the subject drain at a mutually convenient time for the following purposes:

(a) To examine and review the present state of the subject drain;

(b) To determine which existing deficiencies must be corrected and which existing deficiencies can be incorporated into an “as built” design for the subject drain, referred to above and below.

(c) To agree that all deficiencies shall be repaired and all works on the lands be completed by June 1, 1998.

4. It is a condition herein that Pat Donohue and Jim McIntosh agree in writing in the items referred to 3 above, failing which these Minutes of Settlement are null and void and of no effect.

5. In the event that the Respondent chooses not to expose, to the satisfaction of the Township Engineer, the tile now in the ground, he shall cause the owner of the lands wherein said tile is buried to provide to the Township an agreement in a form satisfactory to the Township, wherein the landowner shall repair any failure to said buried tile during a period of five years from the date the Township Engineer certifies final completion of the drain. Said agreement shall be registered on the title to the subject land.

6. The Township shall make such interim payments for work done as are recommended by its engineer. Provided that no payments shall be made until the Drainage Referee has accepted and incorporated into an Order these Minutes of Settlement.

7. (a) The Respondent owner shall secure a “landowner release” from Kevin Dick and Veronica Dick or their successor, Kevin Donohue (and spouse, if she has an interest in the lands), Pat Donohue (and spouse, if she has an interest in the lands), the Renfrew County Roman Catholic Separate School Board and St. Michael’s Parish Church on a form as set out in Schedule “A” to these Minutes.

(b) The Respondent shall secure a Release from such landowners as adjoin the Drain that they are satisfied with the state of their fences and shall hold the Township harmless from any claim, costs, damages, expenses and causes of action with regard to the state of said fences at the time that the Drain is complete, all in a form satisfactory to the Township Engineers.

8. The Township Engineers shall prepare, to the satisfaction of the Drainage Referee, “as built” drawings and design of the subject drain which shall be presented to the Drainage Referee for approval and for the purpose of amending Township By-law No. 014-96.

9. Since the Ontario Drainage Tribunal decision of May 26, 1997, the parties have incurred additional, unanticipated legal and engineering costs, fees, damages, overhead and expenses which were not contemplated and included in the costs of the subject drain. The issue of payment of same is specifically reserved and shall be the subject of a decision as to payment by the Drainage Referee.

DATED at Township of Bromley this 7^th day of November 1997.