ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE COURT OF THE DRAINAGE REFEREE
Bluewater (Municipality) v. South Huron (Municipality) (et al)
2008 ONDR 1
2008-03-10
2008-01
STATUTE:
Drainage Act
HEARING:
BETWEEN:
THE CORPORATION OF THE MUNICIPALITY OF BLUEWATER
APPELLANT
-and -
THE CORPORATION OF THE MUNICIPALITY OF SOUTH HURON, THE CORPORATION OF THE MUNICIPALITY OF WEST PERTH, THE CORPORATION OF THE MUNICIPALITY OF NORTH MIDDLESEX, THE CORPORATION OF THE MUNICIPALITY OF LAMBTON SHORES, THE AUSABLE BAYFIELD CONSERVATION AUTHORITY, STANTEC CONSULTING INC., BERT VISSCHER, LEN VERI, JIM NEIL, QUALITY PRODUCE (EXETER) LTD., JAMES VERI, MICHAEL VERI, LYNN VERI, CATHERINE (KATE) FLETCHER, WALLACE FLETCHER, JACK GLAVIN, ROSS BEAVER, MARGARET BEAVER, MICHAEL BEAVER, GERALD WEBB, DONALD BENDER, WILLIAM MARKLE, SHEILA MARKLE, FREDERICK CULBERT, STEPHEN KENDALL, NANCY KENDALL, GOERGE EISENSCHINK AND NANCY EISENSCHINK
RESPONDENT
DECISION
The Ontario Drainage Referee attended at the Court House in Goderich on Monday November 26th, 2007 and Tuesday November 27th, 2007 to preside on a Motion for the opinion, advice and direction of the Referee with respect to the Terms of the Reference of a Preliminary Report for the proposed Ausable River Municipal Drain and ancillary issues relating to such Preliminary Report.
In Referee O'Brien's Reasons for Decision of February 11, 2002, he found the petition before him to be valid. He ordered that "after completion of the preliminary report in this matter I am prepared to entertain an application by any of the parties to this matter which shall include parties granted standing, all petitioners and landowners within the drain requiring drainage and any Municipality named in the style of cause. At such Hearing environmental issues, the costs benefit issues etc. all will be reviewed. Any such appeal must be filed with the Referee within thirty days (30) after circulation of the preliminary reports."
At the time of the Motion on the November 26th and 27th, 2007, the Preliminary Report had not been finalized. In fact, given the complexity of this project, terms of reference were prepared by the engineers on what appears to have been the verbal advice of the Referee, Delbert O'Brien, during the Hearing held in early 2002, which lead to the Order of February 11, 2002. A Preliminary Report Terms of Reference were completed by RJ Burnside and Associates Ltd. through engineer Paul Elston on May 11th, 2004. Mr. Elston has been involved with this project throughout, but had previously been employed in this matter through Stantec Consulting Inc. Stantec Consulting Inc. was previously employed as project engineer but left. Elston's employer was removed by order of the Referee dated February 11, 2002.
As a result of a lack of consensus, which is documented in the Affidavit of Janisse Zimmerman with regard to the Terms of Reference which are found in Exhibit "E" to her Affidavit in the Motion Record, the Municipality of Bluewater brought this Motion on the basis of Referee O'Brien's statement contained in the Decision of February 11, 2002, which I quote:
The Drainage Act is remedial enabling legislation and accordingly is to be given the most liberal interpretation to ensure the purposes of the Act are carried out in the most equitable and expedient manner. With that in mind, I am prepared to make myself available to all parties with respect to this matter to give directions and resolve issues as they arrive and as applications are made.
All references to the Referee are made in first person but I find that the intent of the matter is that the Office of the Drainage Referee remains seized at its discretion throughout the remainder of this process.
At the commencement of the Hearing a number of housekeeping matters were raised by the Counsel for the Municipality of Bluewater (hereinafter referred to as "Bluewater"). The first related to George and Nancy Eisenschink who were described in paragraph 18 of the Affidavit of Janisse Zimmerman, who, according to such Affidavit, were interested in adding their names to the petition. It appears that in the actual plotting of the area requiring drainage which occurred subsequent to the decision of Referee O'Brien described above the engineer determined that there had been property through which the river/proposed drain passes that had previously been omitted from the list and description of the properties requiring drainage. The Eisenschinks have signed a document requesting their names be added to the petition and on the initial day of the hearing of this motion, such amendment to the style of cause was made. In addition, a further amendment was requested by Counsel for Bluewater, to deal with the previous omission that one of the petitioners, Jim Neil, had signed the petition both in his name and on behalf of his business, Quality Produce (Exeter) Ltd.. There was some discussion at the commencement of the hearing as to the nature of Mr. Neil's business enterprise, but for the purpose of inclusiveness, I am prepared to include that name in the list of Respondents.
I also noted that there were errors in the description of several of the respondents, being more specifically the Corporation of the Township of West Perth, which is the Corporation of the Municipality of West Perth, the Corporation of the Township of North Middlesex which is the Corporation of the Municipality of North Middlesex and the Corporation of the Township of Lambton Shores, which is the Corporation of the Municipality of Lambton Shores.
Having dealt with these housekeeping matters, Counsel for Bluewater advised that immediately prior to the hearing she had been approached by the Corporation of the Municipality of South Huron (hereinafter referred to South Huron) to confirm that they had purchased lands from Catherine Marie Fletcher and Wallace Stuart Keith Fletcher who are described as Catherine (Kate) Fletcher and Wallace Fletcher in the style of cause.
Steve Burns of B.M. Ross and Associates Limited, acting as agent for the South Huron indicated to the Court that South Huron would be withdrawing from the petition as successors in title to the above mentioned parties and as a result, the validity of the petition would be in doubt.
At the time of the hearing of the Motion on November 26th, 2007, Council for South Huron had not met. As a result, Mr. Burns asked for an adjournment in order to enable the Council to provide its position as to whether to continue as a petitioner.
On reconvening the Motion on November 27th, 2007, Mr. Ross advised on behalf of South Huron that a Motion had been passed which stated:
that South Huron council hereby declares that for purposes of the Ausable River Municipal Drain petition, the Municipality of South Huron, . . . does not consent or agree to be signatory to the petition as indicated by the signatures of the previous owners, W. & K. Fletcher and further declares that any signatures which imply the commitment of the Municipality of South Huron to the Ausable River Drain petition are hereby withdrawn.
By a second resolution, confirmation of the appointment of B.M. Ross and Associates Limited to represent South Huron in the Court of the Drainage Referee was given.
On November 27th, 2007 Mr. Ross, as agent for South Huron, provided to the Court confirmation of this withdrawal. As a result of this late withdrawal, both Counsel, Ms. M'Garry on behalf of Bluewater and Mr. Colosimo on behalf of Len Veri and other parties he was representing, requested costs. At the same time Ms. M'Garry advised this court that the Eisenschinks, who were previously described as potential petitioners, were having second thoughts on participating in the petition. As a result of this verbal motion for costs by the above parties, I requested written submissions regarding costs for November 26th and 27th and in preparation for that Hearing
SUBMISSIONS ON COSTS MUNICIPALITY OF SOUTH HURON
In its submissions, the position of South Huron was that the costs of the hearing, together with all other eligible costs, be allocated equally between all parties that signed the petition. To this end, South Huron relied on the provisions of Section 10(4) of The Drainage Act, which in part states:
If at the end of the meeting the petition does not contain a sufficient number of names to comply with Section 4, the original petitioners are chargeable in equal shares with and liable to the municipality for the expenses incurred by the municipality in connection with the petition and preliminary report ...
South Huron noted that the Drainage Act sets out opportunities for withdrawal from a petition following a preliminary report and filing the final report.
In addition, South Huron pointed out that it only became a signatory of the petition as a consequence of purchasing the Fletchers' property. Although the Fletchers' property was purchased in March of 2006, South Huron only became aware on November 14th, 2007 of the Fletchers' being signatories to the petition. South Huron added that the Town of Exeter, which is one of the municipalities which made up the Municipality of South Huron had withdrawn on October 6th, 1998 from a prior petition, prior to any engineering work being done and prior to the description of the lands requiring drainage. South Huron further stated that it did not acquire the Fletchers' property with the intent of removing the Fletchers' name to invalidate the drainage petition, but as a result of its close proximity to the South Huron landfill site and the incompatible nature of the use by the Fletchers' of their property given its adjoining nature to the landfill
South Huron maintains that although service of the documentation occurred on November 6th, 2006, as a result of conflicts, it was unable to obtain legal representation or advice of South Huron's Drainage Superintendent who also acted for Bluewater. South Huron states that it did not investigate the possibility of withdrawing from the petition until November 22nd, 2007, four days in advance of the Hearing, as it was not certain of the procedure. In addition, it took the position that it had no real opportunity of stopping it. Finally, South Huron took the position that advising Counsel for the Bluewater on November 23, 2007 would not have ended up cancelling the Hearing. It was their position that there was not sufficient time to cancel the Hearing.
By way of reply granted to South Huron, it stated that there was no knowledge of any person in authority at South Huron of the existence of the petition of Wallace and Catherine Fletcher. It also stated that Mr. Fletcher, who is employed as a part time landfill attendant by South Huron was not in '" position of authority. South Huron added that Mr. Fletcher would not have known the purchaser of his property until the time of closing. South Huron also stated that regardless of whether it provided immediate notification to Bluewater of its purchase of the property, Bluewater would have known as a result of the Municipal Property Assessment Corporation advising of the new ownership. Subsequently South Huron was invoiced for property taxes. South Huron took the position that it was not fair or reasonable that South Huron should have known that the Fletcher's were signatory of the drainage petition at the time of its purchase of the property. The Municipality further relied on a tax certificate from Bluewater at the time of purchase in that the tax certificate did not indicate there were potential significant costs associated with being signatory to the drainage petition.
South Huron indicated that the Drainage Superintendent, William Dietrich had advised it of a conflict of interest, as he was also the Drainage Superintendent for Bluewater. They argued that the fact that South Huron and Bluewater have the same Drainage Superintendent is irrelevant to the proceeding, as he was not retained by either Municipality to provide services in respect of the petition.
South Huron made the submission that within days of discovering the Fletchers were signatory to the drainage petition, it investigated the matter, obtained professional advice and formulated a position that was in the best interests of South Huron. It made arrangements to request the Fletchers names be removed from the petition at the first available opportunity. South Huron submits that the drainage petition should have been attached to the "original hearing documents" prepared by the Solicitor for Bluewater. Finally, South Huron questions why the Solicitor and Engineer of Record for the Ausable River Municipal Drain would not have checked for up-to-date property ownership information before the Motion.
RESPONDENT LEN VERI
The position of the Respondent Veri is based on Section 108 of the Drainage Act. The costs of any proceedings before the Referee are in the discretion of the Referee. Pursuant to Section 110 of the Drainage Act, the tariffs and costs in any application and proceeding shall be that of the Court that would have jurisdiction to try a civil action involving a similar amount of money or type or proceeding. Len Veri's position was that South Huron had full knowledge of the proceedings which were occurring under the Drainage Act as the Town of Exeter was a petitioner in the proceedings before it amalgamated with other Municipalities to become South Huron.
The Respondent Veri further contends that the Terms of Reference were circulated to all Municipalities and that a response was made by South Huron to these terms although it did not attend the public meeting. Having submitted its written comments to Council for Bluewater regarding the Terms of Reference, South Huron demonstrated its full knowledge of the proceedings.
Mr. Colosimo submitted that South Huron should have immediately informed the Applicant of the purchase after it made its decision as to whether it wished to remain a petitioner.
Finally, the Respondent Veri raised the argument that, based on the unusual facts of this case, substantial indemnity costs should be granted to the Respondent, Len Veri. Costs on a substantial indemnity basis should be granted where the cavalier attitude and the conduct of South Huron in the matter was found reprehensible.
MUNICIPALITY OF BLUEWATER SUBMISSION
Bluewater takes the position that South Huron had various opportunities of being aware that the property which it had purchased for the Fletchers was subject to their signatories as petitioners. It states that South Huron should have become aware of this in March of 2006 when the purchase occurred. South Huron attended at Bluewater Council on May 14, 2007 to be advised of the pending application to this court. Finally, on November 6, 2006, South Huron received the Motion and materials. Furthermore, by its own admission acknowledged on November 14th, 2006, South Huron became aware that the Fletchers were signatories despite this knowledge or presumed knowledge, in correspondence and in conversations there is no mention of the position of South Huron or recommendation that it might withdraw from the petition in this matter. As a result, witnesses were prepared and costs were incurred at a time when the Drainage Superintendent for South Huron was the same person as the Drainage superintendent for Bluewater.
Bluewater further submitted that even if staff lacked knowledge that the Fletchers were petitioners, the senior staff knew a full twelve days in advance of the commencement of the hearing that they had control of a signature on a petition. Moreover, given the history of this project, one signature more or less has chronically been the issue in terms of sufficiency of the petition. Bluewater is not asking for costs in this matter, or preparation for the hearing prior to November 20, 2006. Rather, Bluewater is seeking such compensation only subsequent to that date to the start of the hearing as it maintains that if it had known of such position, additional costs would not have been incurred.
Finally, Bluewater maintains the position that South Huron cannot claim that it did not know it could withdraw at a stage not expressly provided for in the Drainage Act, as it was permitted to withdraw before in circumstances not specifically provided for by the Act. Although not specifically stated, it would appear that Bluewater is not asking for costs on a substantial indemnity basis.
DECISION
Having reviewed the position of all the parties I make the following findings;
When the staff of South Huron formed the intention to withdraw from this process through its inherited position, as petitioner by its purchase from the Fletchers, it should have notified the parties immediately in order to forestall future costs on what has been an unfortunate project. After many years, I find it somewhat surprising that a special Council meeting would be called on Monday, November 26th, 2007, when there was opportunity to have an earlier Council meeting when it became obvious to South Huron that an opportunity to withdraw from this process was available. It would appear that this Council meeting was called based on the threat of costs which might be levied.
I also find it difficult to accept the argument of South Huron that it felt it had to wait for completion of the Preliminary Report or the Final Report before withdrawing when previously the Town of Exeter, had already withdrawn at a stage prior to the Preliminary Report. I will not be granting costs against South Huron on the basis of knowledge which should have been within its grasp; it seems safe to assume that South Huron was not alerted to the issue of a petition by the vendors, Catherine and Wallace Fletcher. However, this does not mean that its' solicitor in this purchase could not have made inquiries as to ongoing matters under the Drainage Act.
In addition, although Mr. Fletcher was not a person of authority within South Huron, any review of South Huron's involvement and withdrawal of the petition previously should have alerted South Huron on its purchase from Mr. Fletcher of an ongoing problem.
On the other hand, Bluewater should have shown more diligence in what has turned out to be a most difficult petition process. I note Bluewater has past experience with such problems. In a Decision of Referee O'Brien, Landmark Limited ats the Municipality of the Township of Hay. Court File number 93/96 dated July 31, 1998, he dealt with the inadequacy of petitions and misdescriptions of property in the Township of Hay, which is one of the constituent municipalities of Bluewater and commented
The Engineer has a duty to review the names on the petition and satisfy himself that they are in fact the owners of the land. This function is often done in consultation with the Municipal Clerk, as they together review the assessment roll. It should be noted that Section 4(4) of the Drainage Act provides the Clerk for the Clerk to be the final arbitrator of the ownership in circumstances where the assessment roll does not identify the true owner.
The Engineer described in that decision is the Engineer in this matter. I believe this passage correctly sets out the duty of the Engineer and the Clerk of the Municipality.
For these reasons, it appears to me that there should be an obligation upon both Municipalities in this matter. In May of 2007 when Bluewater approached this office for directions from the Referee in dealing with the Terms of Reference, it was incumbent upon Bluewater at that time to reacquaint itself with the file more extensively. It failed to do this. As a result, Len Veri and various family members holding properties incurred costs which were unnecessary.
COSTS
I find South Huron to be responsible for one-half of the costs of Bluewater's Solicitor on a partial indemnity basis from November 20, 2007 to the Hearing ending on November 27, 2007 and including the submissions regarding costs. South Huron shall also be responsible for one-half of the costs of the Solicitor for Len Veri et al for the same period on a partial indemnity basis. As a result, I find the obligation of South Huron to Bluewater to be in the amount of $3,276.00 plus 1/2 of the disbursements for a total of $3,376.00 plus GST and to Len Veri et al in the amount of $2, 666, 00 plus 1/2 of the of the disbursements for a total of $2,782.00 inclusive of GST. In addition to the costs of Bluewater's Solicitor, South Huron shall be responsible for partial costs of the hearing preparation for the Engineer of Bluewater and its accountant relating to the cost benefit study. Given the somewhat incomplete submissions of Bluewater relating to its Engineer, I find these amounts to be $3,000.00 plus GST payable for the Engineer of Bluewater and $800.00 plus GST for BOO Dunwoody, payable to the Corporation of the Municipality of Bluewater.
In addition, I find that a portion of the cost of Mr. Veri's Solicitor should also be chargeable in part to Bluewater. As a result, costs payable by Bluewater to Mr. Veri for his Solicitors from November 20th, to November 27th, 2007 and subsequent submissions on costs shall be $2,782.00 inclusive of disbursements and GST.
Although Mr. Colosimo has put forward on behalf of his client the argument that substantial indemnity costs should be granted, I find that the conduct in this matter of South Huron although mistaken in relation to its perceived duties and obligations, is not reprehensible but was based on belief in a procedure which should be used, although such belief had no basis at law or in practicality.
The remaining costs for this particular time period of Bluewater, including that of its Engineer in preparing for the hearing and accountant for the cost benefit study, shall be borne by Bluewater out of its general levy and shall not be chargeable to the Petitioners pursuant to Section 10(4) of the Drainage Act.
DATED at Strathroy, Ontario this 10th day of March, 2008.
ROBERT G. WATERS
ONTARIO DRAINAGE REFEREE