Wilson v. Harwich, 1999 ONDR 5

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE COURT OF THE DRAINAGE REFEREE

Wilson v. Harwich

1999 ONDR 5

DATE OF DECISION:

1999-03-17

1999-05

STATUTE:

Drainage Act

HEARING:

BETWEEN:

CLARENCE WILSON, PAUL WILSON AND NEIL WILSON

APPELLANTS

-AND-

THE CORPORATION OF THE TOWNSHIP OF HARWICH

RESPONDENTS

DECISION

The Ontario Drainage Referee heard submissions and received affidavit evidence relating to several motions and cross motions made by the Parties in the Ontario Court (General Division) in Windsor Ontario on the 29th day of January l999.

The Respondent, the Corporation of the Township of Harwich, brought the following motion, requesting:

1. The determination, before trial, of the following question of law raised by the Statement of Defence in this action:

Is all or part of the Appellants' claim for damages barred by reason of the limitation provisions of the Drainage Act, R.S.O. 1990, c. Dl17, as amended?

2. Leave, if required, to admit Affidavit evidence pursuant to Rule 21.01(2) of the Rules of Civil Procedure;

3. An Order dismissing all claims of the Appellants for damages sustained prior to September 28 l992;

4. Costs of this Motion on a solicitor and client basis;

5. Such further and other relief as the Court may permit.

The Appellants made a cross motion in requesting:

l. An Order for extending the time for bringing an action and/or claiming damages against the Respondent pursuant to the Drainage Act, R.S.O. 1990 c.D17, as amended, to permit the Appellants to proceed with the within action as constituted for all damages sustained from April 18 l984 forward;

2. Costs of this motion;

3. Such further and other relief as the Court may permit

and as may be necessary.

The Referee, with the consent of the Counsel for both Parties, granted an Order pursuant to Rule 21.0l(2) of the Rules of Civil Procedure permitting the filing of affidavit evidence. Both Counsel confirmed that there was no substantial disagreement with respect to the facts as set forth in the respective affidavits filed.

Section 111(2) of the Drainage Act R.S.O. 1990, c D.17, as amended, provides as follows:

"(2) A copy of the notice with an affidavit of service thereof shall be filed with the Local Registrar of the Ontario Court (General Division) for the area in which the initiating municipality is situate, and the notice shall be filed and served within two years from the time the cause of action arose."

Section 113 provides:

"The Referee may, where he or she considers it proper, extend the time otherwise limited for appeals or other proceedings."

BACKGROUND

The Appellants, Clarence Wilson, Paul Wilson and Neil Wilson, are farmers being the owners of farmlands in Lots 4 and 5, Concession 4 WB, Township of Harwich. They cash crop, growing seed corn and soya beans. Approximately 134 acres of their land is included in the municipal drainage scheme known as the O'Rourke Drain.

The O'Rourke Drain discharges into another municipal drain known as the McGregor Creek Drainage Works. On April 18, 1984 the Wilsons filed a request for repair of the O'Rourke Drain with the Township of Harwich. As a result of the 1984 request for repair, the Township of Harwich engaged the Engineering Firm of Todgham & Case to prepare a Preliminary Report focused on the repair and improvement of the O'Rourke Drain. The Preliminary Report, dated the 19th day of April, 1985, recommended improvements to the Drain at an estimated cost of $28,000.00. As a result the Township of Harwich commissioned the firm of Todgham & Case to prepare a full Drainage Report which Report was dated the 17th day of September, 1986. The Report recommended repair and improvement work at an approximate cost of $47,300.00. Amongst other recommendations, it provided for the construction of a new tile main through an adjacent subdivision known as the Wilson Subdivision, which main replaced an existing private tile.

On October 14, 1986, the residents of the Wilson Subdivision presented their complaints to the Township advising "the main reason for some ponding of water on the surrounding farm lands was not going to be resolved by the proposed works". They also complained of the cost of the Project and the likely disruption to their properties. Nonetheless, the Township proceeded to pass a by-law adopting the Drainage Report which by-law was dated October 27, l986. An Appeal to the Court of Revision heard on the 24th day of November 1986 with respect to assessment made only minor revisions to the assessments.

As a result of local flooding, particularly in the City of Chatham, an agreement was reached with the Lower Thames Valley Conservation Authority and the Chatham Water Commission with respect to the Indian/McGregor Creek Flood Control Project. This agreement dated January of 1987, included not only the Township of Harwich, but also the City of Chatham, the Townships of Raleigh, Howard, Orford, the Towns of Ridgetown, Blenheim and the Village of Highgate. The agreement provided for a moratorium on all drainage works, such as the O'Rourke Drain, which used the McGregor Creek Drain as an outlet while a diversionary channel was constructed to prevent future flooding.

On the 15th day of May, 1987 a Decision of the Ontario Drainage Tribunal amended the Todgham & Case Report with respect to the O'Rourke Drain to re-route the proposed tile which was designed to cross through the Subdivision around the perimeter of the Wilson Bush Subdivision. This re-routing was in response to the complaints of the residents of the Subdivision who, in an appearance before the Tribunal, complained of the loss of trees, the upgrading of access driveways and the general disturbance which would result from construction. Mr. Wilson, at the Hearing, urged that the work proceed quickly and expressed approval for the re-routing of the Drain.

However, as a result of the Indian/McGregor Creek agreement for a moratorium on drainage construction, the Township of Harwich elected not to proceed with the repair and improvement of the O'Rourke Drain as provided for in the Todgham & Case Drainage Report.

The Drainage hiatus came to an end when a letter was received dated February 4 1992 by the Township of Harwich from the Lower Thames Conservation Authority confirming that the diversionary channel had been completed and therefore restrictions with respect to municipal drain improvements were henceforth abrogated. The Township of Harwich as a consequence instructed the Consulting Firm of Todgham & Case to revise the Drainage Report to incorporate the Order of the Ontario Drainage Tribunal which Revised Report was dated the 21st day of May 1992.

In June of 1992 once again the residents of the Wilson Bush Subdivision objected to the Revised Todgham & Case Report and in July of 1992 the Wilsons wrote to the Township expressing their frustration at the continued delay pointing out that they had made the original request in April of 1984 and they had suffered considerable crop loss since that date. They also advised the Township that they believed that the proposed cost of $60,000.00 was excessive and indicated that a possible solution was the repair or replacement of a private drain (running along Woodland Crescent) by the Wilsons themselves. It appears that the Wilsons could not improve the said private drain without the co-operation and assistance of the Township because it passed through private property owned by other Parties.

At a public information meeting conducted by the Township of Harwich to consider the Todgham & Case Drainage Report held on the 13th day of July 1992, the Minutes revealed that Clarence Wilson complained of crop losses now amounting to $l00,000.00. The Minutes further referred to the cost of the Revised Report as being unbearable. Mr. Wilson urged that the Todgham & Case Report be adopted. Mr. Wilson further requested that he be granted permission to construct the aforesaid private tile to provide temporary relief.

On the 28th day of July 1992, the Wilsons filed an appeal to the Ontario Drainage Tribunal.

The Ontario Drainage Tribunal heard appeals on the 30th day of October 1992 with respect to the latest Drainage Report. The residents of the Subdivision proposed an alternative scheme known as the Quinlan Proposal. Mr. Clarence Wilson also supported the Quinlan Proposal and advised that his records indicated that his crop loss since 1984 now totalled $125,000.00. He once again urged that the drainage work proceed forthwith.

The Ontario Drainage Tribunal, in its Decision dated 30 October 1992, rejected the Quinlan Proposal advising that no expert evidence was available to support the said proposal noting that Mr. Wilson had in the previous Hearing supported the re-routing of the Drain around the Subdivision. Work proceeded, pursuant to the Revised Todgham & Case Report, with respect to the repair and improvement of the O'Rourke Drain and a final Inspection Report dated the 11th day of August, 1993 indicated that the work had been completed.

The Wilsons filed their Appeal Notice in this matter on September 28, 1994. The Wilsons claimed crop loss with respect to both seed corn and soya bean crops for the years 1984 through to 1994. The affidavit evidence filed indicated that the Wilsons, on their Examinations for Discovery, disclosed that they had grown seed corn for Dekalb Canada for over 40 years. Every year a contract was entered into between Wilson Farms and Dekalb Canada. Each year the seed corn company established, before the crops were planted, a "norm" for the particular variety of seed corn being planted. The "norm" represented the expected yield per acre for the variety of corn and was based on historical yields or in the case of new varieties, an estimated yield based on the results from trial plots. The Wilsons maintained that before 1984 they produced, on an average, above the "norm" and therefore provided estimates of their losses based on achieving l00% of the "norm" and l07% of the "norm", in every year from 1984 to 1994, save for 1987 when they grew seed corn on a different farm. The Appellants also claimed for soya bean loss for the same years, stating that their yield per acre was approximately 8.55 bushels less than it should have been because of their alleged drainage problems. The basis for calculation of the soya acreage loss was by comparing their yield with the immediate yields of their neighbours. It appeared that Mr. Paul Wilson, on his Examination for Discovery, at which Discovery he represented all Appellants, admitted that a number of factors affected seed corn yields in any particular year other than drainage, including weather conditions, weeds, insects and disease. He further advised on Examination that Dekalb Canada assigned a man to keep records of what was going on with respect to the seed corn crop every year and admitted that if there was a drainage problem on the farm the Field Man should have known about it. The Field Man kept logs or records of his observations. Mr. Wilson advised further that the only Reports in their possession were from the years 1984 and 1987 and that in the l984 Report, the soil moisture was "ample" and not "surplus". A 1987 Report (both Reports relating to June) again indicated soil moisture as "ample" and not "surplus". There were no Dekalb Canada Field Reports with respect to the other years for which damages were claimed.

Mr. Wilson further advised on his Examination that he could not remember all the variables affecting the crops in any particular year. Mr. Wilson, on his Examination for Discovery, advised that in l987 he contemplated digging a completely new Drain across their property to the McGregor Creek (estimated construction costs of $11,000.00). However the evidence with respect to the course or nature of this diversion drain was extremely limited. The affidavit evidence indicated that the final total claim of the Appellants amounted to approximately $250,000.00.

ISSUES

The two issues to be determined were:

(a) pursuant to Section 111 of the Drainage Act, should the Appellants be restricted from claiming damages prior to September 28, 1992, being the date two years' prior to the filing of the appeal?

(b) if it was found, pursuant to the above mentioned Section, that the Appellants were restricted from applying for any claim prior to September 28 l992, then should the Referee grant an extension to the time otherwise limited for appeal pursuant to Section 113 of the Drainage Act?

SUBMISSIONS OF COUNSEL FOR TOWNSHIP OF HARWICH

Mr. McTaggart submitted to the Referee that the Ontario Law with respect to the interpretation of Section 111 of the Drainage Act was well established by the Ontario Court of Appeal decision, Wigle vs. Township of Gosfield South and Gosfield North (1904), 7 O.L.R. Page 302. He maintained that the phrase "cause of complaint" means the time when damage or injury was sustained. He quoted the Chief Justice Moss on page 308 of that Decision as follows:

"The legislature has placed a limit on the exercise of the remedy by requiring notice of the claim to be filed with the Clerk of the County Court and to be served within two years from the time the cause of complaint arose.

From this provision it follows that all claims for injuries not made and prosecuted in the manner and within the period prescribed are barred. Any subsequent claim cannot embrace damages suffered at an earlier date than two years next preceding it. The claim presented in this case being made on the 10th September, 1901 can only extend to injury or damage suffered within two years next before that date."

He pointed out that the Law had been applied subsequently in the Court of Appeal Decision of Robinson v. Essex, (1932) 41 O.W.N.342 (C.A.) and in the Referee's own Decision of Courtney and the Corporation of the Township of Huron of March 11, 1997.

Mr. McTaggart argued that the Appellants were first aware of the damage caused by the disrepair of the drain when they filed their complaint in 1984 and had subsequently repeatedly advised the Township on numerous occasions that they were sustaining losses including their submissions before the Ontario Drainage Tribunal in 1987. He advised that the Appellants elected, with full knowledge that the "cause for complaint" existed, not to file the appeal until September 1994 and thus ought to be barred from raising any claim for damages prior to September of 1992 in accordance with the plain words of the Statutes.

SUBMISSIONS OF COUNSEL FOR THE APPELLANTS

Mr. Renaud, Counsel for the Appellants, submitted that the words of Section 111 (2) of the Drainage Act, namely "the time the complaint arose" were synonymous with "the time of cause of action arose" or "when the Plaintiff became aware of the elements of the cause of action".

He argued that the "discoverability rule" served to delay the commencement of the limitation period until such time as the material facts upon which the cause of action was based were disclosed, or when the Plaintiff, exercising reasonable diligence, discovered or ought to have discovered the material facts including the nexus between the cause and damage. He referred to M.(K.) v M.(H.) (1992), 1992 CanLII 31 (SCC), 96 D.L.R. (4th) 289. That case involved the issue of incest where the victim brought an action eleven years after the abuse had terminated. One of the questions before the Court was whether or not the matter was barred by the Limitations Act. Mr. Justice LaForest quoted from a previous Decision of Le Dain J. where he articulated the discoverability rule on page 535 Central Trust Co. v. Rafuse (1986), 1986 CanLII 29 (SCC), 31 D.L.R. (4th) 481

"...a cause of action arises for purposes of a limitation period when the material facts on which it is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence."

Counsel for the Appellant further advised that the discoverability rule applied in Ontario circumstances where statutory provisions were similar to Section 111 of the Drainage Act. He quoted in support of this statement two Ontario Court of Appeal cases, namely Peixeiro v. Haberman (1995), 1995 CanLII 932 (ON CA), 42 C.P.C. (3d) 37 (Ont. C.A.) and the case of Bourne v. Saundby (1998), 1998 CanLII 1394 (ON CA), 38 O.R. (3d) 555 (C.A.) He noted that the discoverability rule had not been developed in law at the time of the Wigle case early in the Century. He therefore argued that "until the damages were ascertained and until it was properly concluded that the Township's neglect to repair the drain was the cause of the damage, the cause of action had not accrued and the limitation period had not begun to run".

In addition to the discoverability rule he maintained there was also a continuing damage rule of law in which case the limitation period did not start to run until such time as the cause of damage ceased. He referred to the Ontario decision of Frank Stollery Ltd. v. City of Toronto (1983), 1983 CanLII 1881 (ON HCJ), 43 O.R. (2d) 303. in support of that proposition. Mr. Renaud submitted that the Wilsons sustained a continuing damage which was found to be due to the continuing negligence and neglect of the Township. He therefore maintained that the limitation period did not therefore begin to run until the negligence and neglect was remedied and the cause of damage ceased. In support of this position he also referred to the case of Huyton and Roby Gas Company v. Liverpool Corporation [1926], 1 K.B. 146 (C.A.).

Mr. Renaud concluded his arguments with respect to the application of Section 111 of the Drainage Act by stating that at all times the Wilsons had been reasonably diligent in presenting to the Township and other agents such as the Drainage Tribunal their substantial and accruing crop losses. He maintained that the Wilsons were completely confused and frustrated by the application of the moratorium with respect to Drainage relief imposed by the agreement entered into by the Township with the Conservation Authority etc. He stated that the Wilsons were advised by all and sundry that they could do nothing to advance their cause during the moratorium and that the Township entered into the agreement while they were fully aware that the improvement of the O'Rourke Drain was in process.

CROSS MOTION

Counsel for the Appellants argued that Section 113 of the Drainage Act authorizing the Referee's discretion for the purpose of extending limitation periods was a new provision introduced into the Drainage Act R.S.O. c79 1975 and was clearly intended to provide relief from the strict application of the limitation period. He noted that the case law referred to previously, which strictly enforced the limitation period, as in the Wigle v. Townships of Gosfield North and Gosfield South and the Robinson v. Essex cases, was distinguishable because it predated Section 113.

Mr. Renaud outlined the considerations to be applied in the exercise of the Court's discretion as

defined in the Scamolla et al v. Tenax Ltd et al (1990), 1990 CanLII 6639 (ON HCJ), 72 O.R. (2d) 125 (H.C.J.) case.

"i) whether there are apparent grounds for the proceedings;

ii) whether there are reasonable grounds for applying for the extension in all the circumstances;

iii) the extent to which the Plaintiff acted reasonably once aware of the existence of a cause of action;

iv) any increase in the difficulty of proof over the passage of time;

v) prejudice to the Defendants, if granted;

vi) prejudice to the Plaintiff, if granted;

vii) whether the Plaintiffs or their solicitors were aware of the limitation period at the time of their pleadings;

viii) any notice or opportunity to investigate given to the Defendants.

Mr. Renaud stated with respect to the issue of conduct and prejudice the following:

"It is respectfully submitted that from the beginning, the Township was made aware of the need for drainage repair and the damages the failure to repair was causing. The Wilsons reminded the Township frequently of the continuing damage. Since the Township was given the opportunity to investigate during the court of damage, and did so, inclusive of availing themselves of examining Paul Wilson with respect to pre-1992 damages, it cannot be shown that it has suffered prejudice for lack of notice. "

He concluded his submissions by arguing that the Township entered into the Indian/McGregor Creek Moratorium Agreement knowing full well that the Wilson damages would continue to result from non-repair of the Drain. He thus urged that the limitation provisions be construed in support of his clients. He quoted from the Decision of Papamonolopoulos v. Board of Education for the City of Toronto (1986), 1986 CanLII 2688 (ON CA), 56 O.R. (2d) 1 (C.A.) 7

"I think the provisions of the statute of limitations should be liberally construed in favour of the individual whose right to sue for compensation is in question. Where two interpretations of the statute are possible, reason favours the one which enables the plaintiff to bring his action."

REPLY TO CROSS MOTION

Mr. McTaggart, in his reply to the cross motion advised that the discoverability rule and the continuing damage rule had no application to the instant case. He advised that the Statutes that Mr. Renaud referred to were clearly distinguishable from the language of Section 111(2). He argued that the words "the time the cause of complaint arose" referred to the discovery of damages. He quoted from the Court of Appeal case of Deauville v. Boegeman (1984) 48 O.R. (2d) 730 the statement of the Chief Justice of Ontario.

"Some courts have suggested that in applications of the nature of the one in the instant case, limitation periods can be ignored. It has also been suggested that the mere bringing of such an application as in the instant case immediately shifts the burden of establishing prejudice to the defendant. I do not agree. In my view, the expiry of the limitation period creates a presumption, however slight in some cases, of prejudice to the defendant."

Mr. McTaggart concluded by submitting that while a delay of months may result in circumstances where it is appropriate to extend the time, if there is a delay of many years, as in this case, the protection afforded by Section 111 of the Drainage Act should not be ignored.

FINDING OF LAW AND FACT

Having read the material filed and heard the submissions of Counsel, I have come to the following conclusions:

1. That the Appellants, when they filed their request for repairs in 1984 were fully aware and had full knowledge of the damage that was being caused to their crop and of the fact that that damage was being caused by excessive moisture. They further were of the opinion that the excessive moisture was caused by the disrepair of the O'Rourke Drainage System. That knowledge was sufficient, in my opinion, to impose on the Appellants the duty to file an appeal if they believed that they had cause for complaint. The discoverability rule, which I acknowledge is part of the law of this Province, has no application to this case because the Appellants had knowledge of the damage and the cause of the damage from the time they first filed their request for repairs in l984. The continuing damage rule, which I also acknowledge has application in some cases within our jurisdiction, has no relevance in this particular matter because any failure on the part of the Township was one of omission, unlike the circumstances in some of the cases referred to by the Appellants' Solicitor. The cause of the damage did not arise from an improper design or faulty construction of the drain, but rather was the result of disrepair. The duty of the Township, in the circumstances, was a statutory duty to maintain the municipal drain in a proper state of repair. Mr. McTaggart argued that the time when the "cause of complaint" arose was when the damage was ascertained. Mr. Renault argued that it required more than that, namely a further determination that the Municipality was at fault. I agree that both elements are required before the limitation process commences. The true test involves three factors, namely:

(a) a recognition of damage caused to the Appellant;

(b) a recognition of the cause of that damage; and

(c) a failure of the municipality in their duty to undertake repairs.

I believe the wording of the Statute implies by the use of the word "complaint" - a determination by an Appellant that the Municipality has failed in its duty to effect repairs within a reasonable time after due notice.

I find in the circumstances of this case, that the Appellants in continually protesting their damage to the Township and in calling upon the Township to effect repairs, had demonstrated their belief that:

(a) that they were suffering damage; and

(b) that it was caused by excessive moisture resulting from the disrepair of the drain.

However, the word "complaint" implies more is required, namely the failure of the Township to act after the filing of the request for repair.

I find that the Appellant had no cause for complaint until l987 when the Township voluntarily entered into an agreement with the Conservation Authority and other municipalities imposing a moratorium on drainage works in the area. The actions of the Township of Harwich before that time, namely in proceeding with the Preliminary Report and subsequently with a full Drainage Report represented reasonable conduct on its part. Although considerable time was consumed in consideration of the Report and by appeals, etc. I am of the opinion that the Township's conduct was reasonable up until the time of the agreement for the moratorium.

2. Accordingly I find that the time the "cause of complaint" arose was early 1987 when the Township of Harwich entered into the agreement referred to.

3. I must confirm that the law of Ontario stands as it did at the time of the Wigle vs. Townships of Gosfield South and Gosfield North decision referred to previously and as applied by the Robinson v. Essex decision also referred to, which serves to bar any claim with respect to damages for which the "cause for complaint" arose two years previously to the date of Appeal. Thus, were it not for Section 113 of the Drainage Act I would grant the Motion requested by the Respondent dismissing any claim with respect to damages occurring prior to September 1992.

4. SECTION 113 DRAINAGE ACT

I find, however, that the Appellants are entitled to relief pursuant to Section 113 of the Drainage Act with respect to their cross motion in seeking an extension of the time allowed for the damage claim.

I find that although the Township acted reasonably in proceeding with the Drainage Repairs and Improvement of the O'Rourke Drain up until early 1987, their conduct in entering into the Joint Municipal Agreement with the Conservation Authority resulted in abrogation of the rights of the Appellants as provided in the Drainage Act. It is not necessary for me to determine whether such an agreement was legally justified. I need only find that it resulted in such confusion that the Appellants may have been mislead as to their rights with respect to an appeal. It appears on the limited evidence before me that when they sought advice and instruction with respect to their rights that they were advised that they could do nothing to advance their interest. I find that they were thereby prejudiced.

5. I conclude that equity demands that I exercise discretion pursuant to the provisions of Section 113 and extend the limits of Section 111(2) to permit the Appellants to claim damages for the crop loss commencing in 1987. In coming to this decision I am not pre-judging whether or not the Appellants have suffered crop damage or whether or not the Appellants can prove the extent of their crop damage, but only that their right of appeal may have been circumscribed by the actions of the Municipality.

I THEREFORE ORDER that the Appellants' right to claim damages be extended, notwithstanding the provisions of Section 111(2) of the Drainage Act to the crop year of 1987 pursuant to the provisions of Section 113 of the Drainage Act R.S.O. 1990 c D17, but that any claim prior to that date be dismissed.

I HEREBY FURTHER ORDER that legal costs with respect to these motions be determined at the trial of this matter.

DATED: March 17 l999

Delbert A. O'Brien, Q.C.

Ontario Drainage Referee