McFarland v. Dresden, 1998 ONDR 9

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE COURT OF THE DRAINAGE REFEREE

McFarland v. Dresden

1998 ONDR 9

DATE OF DECISION:

1998-03-26

1998-09

STATUTE:

Drainage Act

HEARING:

BETWEEN:

MICHAEL MCFARLAND

APPELLANT

-AND-

TOWN OF DRESDEN

RESPONDENT

REASONS FOR DECISION

The Referee received an Appeal dated 03 September 1997 from Michael McFarland urgently requesting that the Referee intervene immediately to halt proceedings leading to the construction of the Trerice Street East Drain in the Town of Dresden. He claimed that the Municipality had failed to observe the procedural requirements of the Drainage Act and that as a result he and the Township of Camden had been denied the legal rights afforded by the Act. He advised that immediate action was necessary because construction was about to begin. The Referee contacted the Township of Camden and received confirmation that Camden was also very concerned about possible procedural irregularities.

The Referee in response arranged to convene an informal meeting to discuss procedural considerations at the Chatham Court House on September 5 l997 at the hour of 11:00 a.m.

Evidence was received by the Referee at the informal Hearing which indicated that the Drainage Report had estimated the work to cost the sum of One Hundred and Forty Thousand Dollars ($l40,000.00) but the tender came in at One Hundred and Sixty-Seven Thousand Dollars ($l67,000.00). The Municipality was anxious to start the work so as to have it completed by the end of the year so as to ensure an infrastructure grant of Forty-Three Thousand Dollars ($43,000.00).

The Appellant advised that the Town of Dresden had proceeded without giving all the necessary notices to those affected by the Drain so that there had not been sufficient input from the landowners. He pointed out that changes had been made in the design without consultation when a dry pond concept was dropped in favour of a straight open ditch at the outlet through a flood plain.

Reeve Graham of Camden Township advised that the first communication her Municipality had received was the Notice of the Site Meeting. Many concerns had been expressed by residents at that meeting, but there was no subsequent response and she was surprised to learn the By-Law adopting the Report had been passed without further consultation. Camden Township, out of concern for its affected ratepayers, had requested that a Dresden delegation attend their August 5th Council meeting to discuss the Drain. The Camden Council, as a result, passed a resolution requesting that the Town of Dresden rescind its By-Law No. 97-5 and provide for a meeting to consider the Report. Reeve Graham then advised that nothing was done to satisfy Camden and the newspaper reported that tenders had been let.

The Town of Dresden replied that official notice was not required to be given to landowners or even to the Municipality of Camden because the Drainage Act requires:

that notice be given only to:

"owners of lands and roads assessed for the drainage works or for which compensation or other allowances have been provided in the report". Section 41 (1) (d) and (e)

The Town noted that only the Town of Dresden was assessed and granted allowances pursuant to the terms of the Drainage Report.

At the conclusion of the Hearing, the Referee determined that the Town of Dresden had not complied with the procedural requirements of the Drainage Act and further had not complied with the spirit of the Act. Details of the non-compliance with procedural requirements will be specifically dealt with later in the Decision, but I find it necessary to state that the indifference displayed to the concerns of the Township of Camden was unacceptable measured against the numerous sections of the Drainage Act which specifically provide for notice and consultation when drainage projects cross over municipal boundaries. Consequently, the Referee provided for a further Hearing to be held for the purpose of affording all affected owners, including the Township of Camden, with an opportunity to provide input in the form of evidence and submission with respect to the design, assessment and allowances. A notice was therefore sent to all relevant Parties in the form attached hereto as Addendum "A" providing for a Hearing to be held on November 5 l997 in the Chatham Court House

On the 5th day of November l997, the Drainage Engineer, Ralph Barry, P.Eng., outlined the details of the project. He advised that the Petition had been signed by the Road Superintendent for the Town of Dresden in response to public complaints about flooded basements and to facilitate the provision of future building lots. A public meeting had been convened on the 20th day of May l997 with regard to the l991 Housing Study which had focused on the potential for development lots in this area. A site meeting had been organized for June l4 l997 and both the Appellant and the Township of Camden had been notified. A Report had been proposed dated July 2 l997 and it was adopted on July 15 l997 when By-Law 97-5 was given first, second and third reading. The By-Law incorporated an amendment dated July l4th. The amended Report reduced the estimated cost of the work from $213,000.00 to $l63, 500.00. It appears that a Notice dated July l7th providing for a meeting to consider the Drainage Report on July 30 l997 was hand delivered to certain parties. However, Mr. McFarland denies ever having received the same. Reeve Graham also indicated she had not received any notice after the site meeting until she read of tenders in the newspapers. It also appears that a notice of the amendments to the Report was similarly circulated by notice dated July l8 l997.

The catchment area consisted of approximately 6 hectares, all in the Town of Dresden, and most of it embraced developed lots and roads. The work involved the installation of a 450 mm to 675 mm tile along Trerice Street replacing an old 8" drain. The covered drain then made a 90° turn south along a given Road before it took a further bend in a southeasterly direction crossing into the Township of Camden and outletting into the Sydenham River. 90 meters at the downstream end crossing through Camden was to be open drain except for l4 meters at the outlet into the River which was to be a closed 600 mm pipe with rip rap. The open portion of the ditch crossed through a flood plain but the Conservation Authority did not take exception nor did they attend the Hearing although notified.

Mr. Barry advised that the design had been calculated to handle a two year storm.

A resident, Mrs. Babcock, gave evidence of having had her basement flooded on four occasions and Mr. Paddock advised he had also suffered floods.

The matter was not completed at the Hearing on November 5 l997 and was therefore adjourned to continue on the 22nd and 23rd of December.

At the commencement of the Hearing on the 22nd day of December, Lydia C. Stam, Barrister and Solicitor acting for the Appellant, filed an Application requesting an Order

(a) declaring the Petition, the Resolution and the By-Law to be invalid.

(b) in the alternative, to direct the Town to comply with provision of the Act; and

(c) granting costs to the Appellant.

The grounds for her Application were outlined by her as follows:

(a) There were no notices of the petition or of the decision to proceed issued [s.5 (1) of the Drainage Act].

(b) There was insufficient notices of the petition or of the decision to proceed issued. [s.9 (1) of the Drainage Act].

(c) Design and costing work preceded the petition and the onsite meeting [s. 9 (1) of the Drainage Act]

(d) No notice of filing the engineer's report or council's intention to consider the report was given. [s.41 (1) of the Drainage Act]

(e) No notice of provisional by-law and sitting of court of revision was given [s.45 (1) and s 46 (1) of the Drainage Act]

(f) There was no opportunity to appeal to a Referee or Tribunal provided by the Town of Dresden. [s.47 (1) and s.50 (1) of the Drainage Act].

(g) The Town of Dresden failed to follow the democratic procedures for establishing a new drain as specified in the Drainage Act.

(h) The proposed design as presented in the report of the engineer fails to comply with the requirements of the Water Resources Act.

(i) The Drainage Act. "

Before evidence was presented by Ms. Stam in support of the Application, the Clerk of the Town of Dresden, George Segaert, advised the Referee that Mr. D.A. Hoyles, Director of Operations of Nabisco Ltd., had offered to pay $12,500.00 toward the cost of enclosing the open portion of the proposed drain in Camden Township. This unexpected and generous offer had a very favourable influence on negotiations for settlement. In a series of meetings which resulted in Mr. Hoyles increasing his offer to the sum of $17,500.00, a negotiated settlement was reached. Nabisco Ltd. favoured a covered drain because they made use of adjacent property in Camden Township for the spraying of their waste water arising from the washing process of the tomatoes. They feared some of the spray might spill over into the open ditch and be flushed into the Sydenham River.

Both Mr. McFarland and the Township of Camden had always promoted a covered drain in the flood plain area. Also the Town of Dresden had originally favoured a covered drain, but had retreated from such a design only for the purpose of saving costs. With the generous offer from Nabisco Ltd. the financial impediments were removed and all Parties agreed to execute the Minutes of Settlement providing for an amendment to By-Law 97-5. The amendment provided for the enclosure of the drain through the flood plan area made possible by the contribution by Nabisco Ltd. It was further agreed that the issue of costs would be considered by the Referee after the receipt of written submissions.

Although all Parties were content with the final settlement, it should be noted that a special hearing date was required to remedy the procedural errors made by the Town of Dresden in processing this project. The Referee, at the Special Hearing, permitted all Parties to have ample opportunity to present evidence and make submissions respecting all issues, design, assessment, allowances and procedure. Thus all irregularities and natural justice concerns were remedied.

For the guidance of other municipalities, it should be stated that the Town of Dresden failed to notify Camden pursuant to Sec. 5 (1) (b)

"5.-(1) Where a petition in accordance with section 4 has been filed, the council shall forthwith consider the petition and shall, within thirty days after the filing of the petition,

(b) if it decides to proceed with the drainage works, give written notice of the petition and of its decision to each petitioner, the clerk of each local municipality that may be affected, and the conservation authority that has jurisdiction over any lands in the area or, if no such conservation authority exists, the Minister of Natural Resources"

The Town also failed to notify Camden pursuant to Sec. 41 (1) (e)

"the clerk of every other local municipality in which any land or road that is assessed for the drainage works or for which compensation or other allowances have been provided in the report is situate;"

Land in Camden Township was assessed even if it was owned by Dresden.

The Town of Dresden ought to have given two readings to the By-Law thereby creating a provisional by-law and Camden ought to have been given notice pursuant to Section 46 (1). By giving third reading immediately to the by-law, Dresden foreclosed the opportunity of "an owner... affected by the drainage works" appealing pursuant to Sec. 47 and 48 to the Referee or the Tribunal.

Likewise, Camden was not afforded an opportunity to appeal pursuant to Section 50 (1) because it was not notified pursuant to Sec. 46 (1).

Finally, the Town of Dresden ought to have given third reading only after all "time for appeals had expired or ... after all appeals had been decided" pursuant to Section 58. The Act requires a two stage process for the approval of an adopting by-law so as to allow adequate time for consideration and appeals.

The Town of Dresden chose to take a narrow interpretation of Section 41 (1) of the Act (although there is evidence they hand delivered a form of notice) which requires that a copy of the report and notice be sent by prepaid mail to:

(d) "the owners, in the initiating municipality, as shown by the last revised assessment roll to be the owners of lands and roads assessed for the drainage works or for which compensation or other allowances have been provided in the report "

In some circumstances, in the interest of natural justice, a municipality should expand this definition to include "affected owners" if there is the possibility of an injustice. It would be unfortunate indeed if a landowner was excluded from further participation in the process in circumstances where a report had improperly provided for the use of his land but without granting him an allowance or making an assessment. In the circumstances of this case, adjacent owners, although not assessed because of the unique fact that all construction was on property owned by the Town of Dresden, perceived that there was an environmental problem. This perception, whether it was justified or not, gave them an interest in the project. Happily through the process of the Referee's Hearing, all concerns were resolved when Nabisco Ltd. came forward and permitted the drain to be enclosed in the flood plain area. If, however, Dresden had exercised its discretion to give not only the Appellant and Camden Township notice of the meeting to consider, but also Nabisco Ltd., the matter might well have been settled at an early stage without the need for an appeal to the Referee.

Dated: January 26 l998

DELBERT A. O'BRIEN, Q.C.

Ontario Drainage Referee

Court File No. 97-GD-5084

ONTARIO COURT (GENERAL DIVISION)

IN THE COURT OF THE ONTARIO DRAINAGE REFEREE

BETWEEN:

MICHAEL McFARLAND

Appellant

-and-

THE TOWN OF DRESDEN

Respondent

Represented by:

Ralph Barry, P. Eng. for Respondent

Lydia C. Stam, Barrister and Solicitor for Appellant

Lorna Graham, Former Reeve for Township of Camden

DECISION re: COSTS

In a Decision made by the Ontario Drainage Referee dated the 26th day of January l998 with respect to the Trerice Street East Drain in the Town of Dresden provision was made for written submissions with respect to the issue of costs. Submissions were received from George Segaert, Acting Clerk-Treasurer for the Town of Dresden; Lorna Graham, former Reeve of the Township of Camden and from Lydia C. Stam, Counsel for the Appellant, Michael McFarland.

The Acting Clerk, in his submissions, noted that the Town of Dresden had endeavoured to save additional costs and therefore elected to proceed at the Hearing without legal counsel. Accordingly, they had relied on their Drainage Engineer, R. Ralph Barry, P.Eng., to present the evidence and make submissions on their behalf. He advised that the Council for the Town of Dresden was of the opinion that the legal costs of Mr. McFarland should be borne by himself and should not be added as a further cost to the drain. He concluded by stating that the Council of the Town of Dresden has acted in good faith throughout the proceedings believing that the extra legal costs of a lawyer were not justified or necessary.

Lorna Graham, in her submissions expressed the view that Mr. McFarland in pursuing this appeal had served not only his own interests but the interests of other residents in Camden Township. She further noted that as a result of his appeal the matter had come to a satisfactory conclusion with the financial intervention of Nabisco and that the procedural irregularities had been remedied by the public hearings conducted by the Referee. She was strongly of the opinion that Mr. McFarland should not have to personally bear the costs of his legal intervention inasmuch as his actions had served the interest of many.

Lydia Stam, in her submissions, clearly addressed the issues and commenced by urging that the Referee be guided by provisions of Rule 58.06 of the Rules of Civil Procedure which reads as follows:

"58.06 (l) In assessing costs the assessment officer may consider,

(a) the amount involved in the proceeding;

(b) the complexity of the proceeding;

(c) the importance of the issues;

(d) the duration of the hearing;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily

the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party's denial of or refusal to admit anything that should have been admitted; and

(h) any other matter relevant to the assessment of costs.

(2) In assessing costs the assessment officer is bounded by the Court's direction or refusal to make a direction under rule 57.02 but is not bound where the court declines to make a direction and leaves the matter to the assessment officer's discretion."

Counsel for the Appellant noted that the Referee in his Decision had determined that the Town of Dresden had not complied with the "procedural requirements of the Act" and that further "a special hearing date was required to remedy the procedural errors". Ms. Stam therefore argued that Mr. McFarland was justified in pursuing his Appeal and ought to have his legal costs paid by the Town of Dresden.

She further submitted that the Town of Dresden had not been disposed to co-operate in dealing with the Appellant, Mr. McFarland and with the Township of Camden with the result that settlement of the issues became much more difficult. She advised that the Town of Dresden had been notified by Nabisco of its financial offer to contribute to the Drain several days before the final Hearing, but that fact had not been disclosed to the Appellant until the Hearing date. She stressed that if that fact had been disclosed to her earlier, a settlement might well have been negotiated without the need for the final Hearing.

Lydia Stam also argued that during the course of the Hearing it was necessary for her to provide the Referee with essential documentation, much of which had not been provided by representatives of the Town of Dresden during the course of proceedings. She also indicated that she had co-operated at the request of the Referee in drafting, arranging execution of, and filing the Minutes of Settlement, all of which steps would normally be undertaken by the Town of Dresden.

Finally, the Counsel for the Appellant indicated that the legal costs of Mr. McFarland, including G.S.T. would approach the sum of $9,000.00. She advised that a significant portion of the legal costs were incurred by Mr. McFarland because of his inability to obtain a local solicitor to represent his interest, requiring him to seek assistance in Windsor.

Having read the Submissions the Referee makes the following findings relevant to the matter of costs. Although it is not mandatory for parties to be represented by legal counsel for proceedings before the Referee, in this particular Hearing, the presence of competent legal counsel was of great assistance. Further the Appeal of Mr. McFarland was clearly justified and served to not only remedy the natural justice errors of the proceedings, but also made possible a curative order with respect to the legal defects. Lydia Stam, Counsel for the Appellant, did assist the Referee by providing essential documentary evidence and in drafting the Minutes of Settlement and in arranging for the execution and filing. It further appears to the Referee at this point in the proceedings that a Final Amending Order has not been properly issued in this matter. Accordingly, the Order herein made by the Referee will be conditional upon Lydia Stam, Counsel for the Appellant, proceeding to draft a final Amending Order, upon her having it approved by the Drainage Engineer, R. Ralph Barry, P. Eng., on behalf of the Town of Dresden and thereafter having it forwarded to my office for execution and filing. All of these factors were considered in determining the issue of costs.

Accordingly, I order that the legal costs of the Appellant, Michael McFarland, be fixed in the total amount of $5,000.00 and that the same be paid to Mr. McFarland and to be charged as part of the Trerice Street East Drain and that the same be paid forthwith by the Municipality responsible and having current jurisdiction for the Drain.

DATED at Pembroke, Ontario this 26th day of March A.D. l998.

Delbert A. O'Brien, Q.C.

Ontario Drainage Referee