ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE COURT OF THE DRAINAGE REFEREE
Bluewater (Municipality) v. South Huron (Municipality) 2009 ONDR 1
DATE OF DECISION: 2009-12-08
2009-01
STATUTE: Drainage Act
HEARING: 2008-02-27
B E T W E E N:
THE CORPORATION OF THE MUNICIPALITY OF BLUEWATER
APPLICANT
- 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, 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, GEORGE EISENSCHINK AND NANCY EISENSCHINK RESPONDENTS
Appearances
Counsel for the Appellants Counsel for the Respondent Len Veri & others
Valerie M'Garry Ottavio Colosimo Barrister & Solicitor Lerner and Associates Barristers & Solicitors,
Counsel for the Respondent Agent for the Respondent
Municipality of South Huron Ausable Bayfield Conservation
Paul Courey Authority
Courey Law Office Geoffrey Cade R.R.#3
D E C I S I O N
The Ontario Drainage Referee attended at the Court House in Goderich on February 27th, 2008 to preside on an adjourned motion for the opinion, advice, and direction of the Referee with respect to the proposed Ausable River Municipal Drain.
Initially, this adjourned motion had been brought November 26th and 27th, 2007 for directions with respect to the Terms of Reference on a Preliminary Report for the said drain and ancillary issues relating to such Preliminary Report. Preparation of the Preliminary Report had been ordered by Referee Delbert O'Brien on February 11, 2002.
On November 26th and 27th, it became evident that the Corporation of the Municipality of South Huron which had purchased lands from Katherine M. Fletcher and Wallace S. K. Fletcher, original petitioners within the area requiring drainage, would be withdrawing from the petition as successor in title to the Fletchers. This development which put in doubt the required numbers of petitioners necessary to proceed, brought motions for costs of the day from Counsel for the Corporation of the Municipality of Bluewater and Counsel for Petitioners Len Veri and other parties.
In a Decision dated the 10th day of March, 2008, the Referee apportioned costs on a partial indemnity basis relative to the withdrawal of South Huron arising on November 26th and 27th, 2007.
Also on November 27th, 2007, the Referee endorsed the record that the adequacy of the petition would be decided at a resumption of the hearing of the motion for directions on February 27th, 2008. This hearing occurred after Counsel for the Municipality, on behalf of the Municipality, convened a meeting at which Mr. Elston, the drainage engineer was available to provide sufficient detailed information so that the petitioners, in light of the changed circumstances, would be able to advise the Court whether they wished to withdraw from the petition or find additional owners who might support the continuation of the petition on the Ausable River Drain. This was in part done as a result of information that had been received on November 26th, that George and Nancy Eisenschink were interested at that point in time in adding their names to the petition. It also appears that in the revised plotting of the "area requiring drainage", which occurred subsequent to the decision of Referee O'Brien, on February 11th, 2002, the drainage engineer determined that there had been property through which the proposed drain passed that had previously been omitted from description of the properties requiring drainage. With these matters to be sorted out, the motion for directions was adjourned to February 27th, 2008.
FINDINGS OF FACT AND DETERMINATION OF ADEQUACY OF PETITION BY REFEREE
On the resumption of the hearing, Counsel for the Municipality of Bluewater reported that there was no consensus between the petitioners and the new owners. Counsel further advised the Referee that the Petitioners had met and had further discussion on the possibility of continuing.
Counsel for the Municipality of Bluewater suggested that the Referee revisit the matter of the adequacy of petitions through a review of the area requiring drainage, similar to the situation in the decision of the Court of the Drainage Referee in M & M Farms Ltd., vs. the Corporation of the Town of Kingsville, Bruce D. Crozier Engineering Inc. et al Court file number 03-CV-1842.
Given the fact that the petition which the Referee is requested to rule upon is the third petition for this area and despite the advice given on November 26, 2007 that the Eisenschinks (described above) considered joining their names as a result of a revision on the area requiring drainage provided by the engineer, Paul Elston P.Eng., I am unwilling to revisit the decision which Referee O'Brien had made with regard to the area requiring drainage given February 11th, 2002.
In her submissions, Ms. M'Garry suggested that if I reviewed the decision of Referee O'Brien by approaching the determination of lands within the area requiring drainage in a manner consistent with the M & M Farms decision, there would be the necessary majority, which would be nine signatures out of fourteen. However, the evidence regarding the proposed area requiring drainage was not placed before me on February 27th, 2008. I was advised that it was the interpretation of the Counsel for the Municipality to Bluewater, that with the loss of the Fletcher properties that the count as of February 26th, 2008, using "owners" rather than "properties" would be six from a total property owners of fourteen with the resultant failure of the petition.
It was submitted to the Referee that if the method used elsewhere in Ontario was used as of February 26, 2008, i.e. not necessarily owners but properties, there would be a total of nine properties still supporting the petition as at February 26th, 2008 in advance of the hearing, out of a total of twenty-one properties.
It would appear that the analysis of the Referee O'Brien's decision in this matter dated February 11th, 2002 draws conclusions that are not warranted. Mr. Wright's submissions on behalf of the Municipality of Bluewater as Counsel were as follows, according to Referee O'Brien;
Mr. Wright stated that the first issue to be determined, now that the area requiring drainage was no longer an issue was the validity of the petition.
Mr. Wright's assumption appears to be incorrect based on the submissions made at the commencement of the hearing before me on November 26th, 2007 where I was advised that in fact additional lands occupied by George Eisenschink and Nancy Eisenschink had not been included in the area requiring drainage.
In addition, in Mr. Wright's submission on page 14 of the Decision stated;
There were two schools of thought with respect to the interpretation of section 4(1)(a). The first counted the number of owners to achieve a majority and the second school counted the number of properties to obtain a majority.
Mr. Wright's submission was that the better view was to count the number of owners.
He stated that in his opinion the section 4(1)(a) focused on owners rather than properties and that reference to the assessment roll was merely for purposes of identification.
Mr. Wright further referred Referee O'Brien to the decision of Referee Turville in the matter of Harold Westendorp et al and the Corporation of the Township of Elizabethtown et al. decided June, 1986, as confirmation for the proposition that Referee Turville had supported the counting of owners and not properties. In my view the decision, however, differs significantly from the interpretation put forth by Mr. Wright. I find the decision a good review of the theory of what is the majority of owners and of lands that are encompassed in area requiring drainage. The decisions referred to by the Referee review the subject quite adequately. I note that Referee Turville quoted with approval the decision of Referee Cluness in McKeen vs. the Corporation of the Township of East Williams and the Corporation of the Township of Adelaide dated May 31st, 1966 as to what persons and lands meet the statutory requirement.
The land described in the Petition, read with the assessment roll, is the only method of arriving at the conclusion concerning adequacy of number of signers.
In addition, Referee Turville cites the decision of Referee Johnston in E. Belzner et. al vs. Corporation of the Town of Dunnville. In a later decision of Referee O'Brien, Landmark Ltd. and the Municipality of Township of Hay, Referee O'Brien refers to Referee Johnston's decision in the Belzner case with approval:
The first matter is whether all the signatures of joint owners, co-owners and partners are necessary on a Petition. The answer is they are. If land is held by husband and wife, whether jointly or as co-owners, both have to sign the Petition. The same applies to unrelated joint owners or co-owners, regardless of how many there are. If there are three (3) joint or co-owners they all have to sign. All partners of a partnership or land that is held as partnership property have to sign. This is for purposes of the Drainage Act and is regardless of the common law or other statutes that may state what the legal effect of one joint or co-tenant or partner is signing is. . .
The reason for the aforementioned is that the Petitioners by signing the Petition make themselves liable to be assessed for the costs if the drain does not proceed and a clear intention from each person having an interest in the land that may be assessed or liable for the cost must be demonstrated by each owner.
Referee O'Brien stated in his Order on the matter now before me the following;
The Referee was satisfied, as a matter of fact, that the petition had been signed by eight owners and the total number of owners in the area requiring drainage was fifteen, however, if the properties were counted, rather than the owners, the number of properties (by roll number) within area requiring drainage was twenty and the number of owners who signed the January 15th, 1999 petition was ten.
However, the Referee's analysis in this matter is not exhaustive and relates to the special circumstances of the case. In his interpretation of the evidence, the Referee states:
I find as a matter of law that the petition is valid, having a majority of the signatures of the owners within the area requiring drainage.
The only difficulty for me is that in reviewing the petition, the peculiar facts and nature of the hearing before the Referee in January of 2002 lead to confusion. The petition, which is found in Exhibit 5 Volume 1 tab 101 has thirteen signatures, however, two properties were held by Bert Visscher and two by Len Veri. If we combine those signatures we have reduced the number of signers to eleven. If we define the jointly held properties as having one owner (s. 4(5) of the Act) we then lower the number of parties to eight. However, this analysis flies in the face of the use of the word "person" as the actual owner according to s. 4(4). As a result, without the benefit of a transcript of evidence put forth at the hearing, I can only assume that the decision was based on the particular fact situation placed before the Referee, as the number of "signers", "owners", "persons" varies from the final number that the Referee found to exist. (This will be further discussed in relation to adjoining parcels with different assessment roll numbers held by Bert Visscher later in this decision).
It is my interpretation of the Order for February 11, 2002 that the Referee's opinion of the validity of the Petition was based on his finding of fact and not on any enunciated principle as to "property owner", "assessed property" or "persons". I concur regarding the Referee's original and unlimited jurisdiction with respect to petitions as set out in s. 106 (1)( b) of the Act, is that section 106(1)(b) is an omnibus provision, which, coupled with the provisions of s. 106 (1) (d) and s. 106 (1)(f) provide the Referee with a broad jurisdiction. As Referee O'Brien further states, quoting the Interpretation Act, R.S.O. 1990 c. I. 11 c.10
Every Act shall be deemed to be remedial, whether its immediate purport is to direct the doing of anything that the Legislature deems for the public good . . . .
This has now been replaced by s. 64(1) of the Legislation Act , 2006, S.O. 2006, c. 21, Sched F c. 64
An Act shall be interpreted as being remedial and shall be given such fair, large and liberal interpretation as best ensures the attainment of its objects.
Unlike s. 84 (1) of the Drainage Act, where there is a combined test for abandonment of all or parts of drainage works; to petition drains, the tests in 4(1)(a) and 4(1)(b), as is often stated, are not to be mixed and are separate from each other in order to provide drainage for an area requiring drainage that is less onerous for purposes which have been found by the Legislature to be for the public good. Therefore the test in 4(1)(a), whether it be the number of owners or the number of properties, in my opinion, while still governed by sections 4(4) and 4 (5), should be the one which best facilitates a drain being established but provides that a clear majority exists in favour of the project for the area requiring drainage.
On February 27th, 2008, I received evidence from several of the petitioners as to their reluctance to proceed. I was advised by Jack Glavin, after he had talked over the options regarding continuing with his neighbours, who I assume were fellow petitioners, that he would not proceed further. I was advised by Mr. Colosimo that his clients, Len Veri and others, were withdrawing their names from the petition. I received the comment from one of the petitioners, Bert Visscher, that he would never have asked any of his neighbours to participate in this matter if he had known the costs of the Municipality, its lawyers and engineers.
On February 27th, 2008, I found that the petition, as a result of such withdrawals, was no longer valid.
APPORTIONMENT OF COSTS
As described by Referee O'Brien in his decision on Court File number 149/2001 on the Ausable River Municipal Drain, all parties have agreed that:
the proposed Ausable Municipal Drain was so unique in many of its aspects that the standard procedure as provided in the Drainage Act for the development of drainage work could not be reasonably followed.
Briefly the unique features of this drain consisted of:
(a) size of watershed extending to approximately 85,000 acres;
(b) anticipated cost of the work, approaching one half million dollars with major cost benefit considerations;
(c) environmentally sensitive area involved with Conservation Authority requesting party status;
(d) multiple Municipalities as disclosed in the style of cause;
(e) an appointed engineering firm refusing to proceed with the project;
(f) incurred engineering costs exceeding $30,000.00;
(g) uncertainty as to the area requiring drainage;
(h) uncertainty as to the validity of the petition.
In this context, the Referee ordered completion of the Preliminary Report in this matter
and stated:
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 cost benefit issues, etc. all will be reviewed. Any such appeal must be filed with the Referee within 30 days of circulation of the Preliminary Reports.
The Referee then ordered that Stantec Consulting Inc. be removed as the project engineer and that "relevant cost considerations be dealt with at a later date" as to their conduct in this matter.
On February 27th, 2008 I ordered that the Municipality of Bluewater (previously the Township of Hay) produce Council minutes from 2004 forward, invoices for the project, evidence of payment of those invoices, and other records which may be relevant to these proceedings. On that date I was advised that the difficulty might be in obtaining records from Stantec and that although, its in-house legal counsel had indicated the availability of records, a teleconference was necessary to establish a procedure for the production of records in view of the absence of Stantec Consulting Inc. and its counsel at the Hearing of February 27th, 2008.
By an Order dated the 12th day of June, 2008, the Municipality was to provide an apportionment relevant to Petition No. 1 August 29th, 1996, Petition No. 2 August 10, 1998, Petition No. 3 January 15, 1999 on or before July 11th, 2008. It was further ordered that the Municipality of Bluewater make a copy of the cost apportionment available for inspection by petitioners who were un-represented by leaving a copy at the Municipal Office, along with the productions made to date.
The Hearing of the Issues regarding the considerations pursuant to s.10(4) of the Drainage Act and related sections of the Drainage Act was set for August 25th and August 26th, 2008 at Goderich.
Two further teleconference motions occurred and on consent, the matter was finally adjourned to February 9th, 10th and 11th, 2009 by an Order dated the 12th day November, 2008. In the interim, Stantec Consulting Inc., more properly described as Stantec Consulting Ltd. negotiated settlement with the Municipality of Bluewater. Upon joint submission made by Stantec and Bluewater through a teleconference, an Order was made by the Referee on December 17th, 2008. In the material filed, Bluewater Counsel advised the Municipality was prepared to release Stantec from the proceeding without costs, in consideration of Stantec's payment of $20,000.00 to Bluewater to the credit of the Bluewater Drainage Account. The Order stated:
THIS COURT ORDERS that this action as against Stantec is dismissed without costs, and without admission of liability by Stantec.
For greater clarity, THIS COURT FURTHER ORDERS that this action is dismissed against Stantec Consulting Ltd. with prejudice to a current or future claim by any party to this or another proceeding for contribution or damages from Stantec in respect of Stantec's involvement, advice, or conduct, or that of any former or current Stantec director, officer, agent or employee in connection with the Ausable Drain, prior to the date of this Order.
THIS COURT FURTHER ORDERS that paragraphs 1 and 2 of this Order take effect upon the date of filing with the Office of the Drainage Referee of an affidavit by Stantec's solicitors affirming that a certified cheque for $20,000 made payable to Bluewater has been delivered to Bluewater's solicitor, which affidavit shall attach a photocopy of that cheque.
With a settlement for Stantec Consulting Ltd. confirmed by Court Order, its involvement in the Hearing and the possible extension of the Hearing with its resultant cost ended. The settlement was endorsed by the Court without acknowledgement of the adequacy of the payment of Stantec Consulting Ltd.. Any liability, beyond the amount paid by Stantec to the Municipality of Bluewater, was acknowledged by Bluewater as its obligation.
COSTS OF PETITION NO. 1 - August 29th, 1996
At the Hearing of February 9 - 11, 2009, evidence was given with regard to this Petition by: Paul Elston, Drainage Engineer in charge of Petition No. 1, Janisse Zimmerman, former Clerk/Treasurer of the Township of Hay subsequently the Municipality of Bluewater, and Bert (Albertus) Visscher. The Drainage Engineer for the Municipality introduced as Exhibit 15 an allocation of engineer's fees shown in accordance with a report dated May 11th, 1998 by LaFontaine, Cowie, Burratto & Associates Limited, which was revised as a result of a report prepared on November 12th, 1998 by Stantec Consulting Ltd. There was no serious dispute by any of the Counsel or the un-represented petitioners with regard to this allocation of costs, which was completed in accordance with s.9(4) of the Act, which allows the Engineer discretion with regard to the allocation of fees. This section reads:
Where the engineer is of opinion that the petition does not comply with section 4, the engineer shall so report to the council of the initiating municipality stating wherein the petition is deficient, the amount of the engineer's fees and by whom they shall be paid, and the council shall forthwith send a copy of such opinion to each petitioner. R.S.O. 1990, c.D.17. s.9(4).
The allocation of costs was done for each of the petitioners, based on properties containing separate assessment roll numbers. The amount to be assessed to each property is $2,021.39. Having reviewed this amount against the invoices and proofs of payments provided in Exhibit 9, I am satisfied that this represents the correct apportionment by the Engineer, using as a guide to the discretion in this matter, the provisions of s.10(4) where original petitioners are chargeable in equal shares. I further note that the only fees being charged are engineer's fees in accordance with s.9(4). Paul Elston, in his evidence, confirmed this was his opinion as to the costs to be apportioned on the first Petition.
It should be noted that in his evidence, Bert Visscher took the position that he was charged twice in connection with roll number 28-14, which is a property owned by Mr. Visscher and his wife Tryntje and subsequently transferred in part to their daughter and son-in-law Peter and Tanya Janssen, so the parcels are now held as joint tenants with Mr. Visscher and his wife retaining a 75% undivided interest and Tanya and Peter Janssen retaining an undivided 25% undivided interest as joint tenants.
According to Figure 1 of the Preliminary Report Terms of Reference dated May 11th, 2004 Parcel roll number 6-43 is also owned by the Visschers and the Janssens in the same percentage. At the request of the Referee, Mr. Visscher provided a copy of the Parcel Register for parcel number 41246-0010 (LT) which confirmed that Part Lot 23 Concession 6, Geographic Township of Stephen and Part Lots 9 and 10 North Boundary Concession, Stephen abut each other were included in the same conveyance. The submission of Mr. Visscher was that he was being charged twice for abutting parcels as a result of their separate roll numbers. Indeed, a review of Figure 1 showed that the lands owned by Visscher and Janssen in Lot 23 Concession 6 were landlocked and could only be reached through access over Lots 9 and 10 North Boundary Concession, Stephen Township, now in the Municipality of South Huron.
While in other circumstances, Mr. Visscher's position would be given weight by the Referee, in connection with Petition No. 1, I cannot suggest that the assessment of the two sets of costs ($2,021.39) on two separate roll numbers be altered. Although the Petition ultimately failed, Mr. Visscher, who owned the property at the time in his name alone, used the fact that there were two roll numbers to create, in essence, two votes towards the Petition when he knew the properties were contiguous and, as shown by the Parcel Register, were in fact one parcel when converted to the Land Titles System approximately two years later. I find the Engineer properly exercised his discretion in the apportionment using the same basis for backing out the costs as he did for initially calculating the sufficiency of the Petition and the proper signatures of the Petitioners.
COSTS OF PETITION NO. 2 - August 10, 1998
Also contained in Exhibit 15 introduced in evidence by Paul Elston are the calculations of the engineer's fees which were made by Stantec Consulting Ltd.. These were contained in a letter dated the 12th day of November, 1998 generated after the failure of the second Petition, brought about by the withdrawal by the Town of Exeter (now the Municipality of South Huron) of its original endorsement of the Petition. This allocation was made by Wayne Wood, P.Eng. who was the engineer of record at the time.
In evidence given by Mr. Elston, based on his knowledge of the steps taken by Mr. Wood, Mr. Elston made the assumption that as Exeter was prematurely withdrawing from the Petition, while there was a saving of costs by Exeter's timely action, the additional costs arising between the failure of Petition no. 1 and Petition no. 2 were in Mr. Wood's mind attributable to Exeter. I note s.10(4) speaks to an equal allocation of costs; the engineer in this situation was not bound by s.10(4) but had the discretion, pursuant to s.9(4) to calculate "the amount of engineer's fees and by whom they shall be paid". In his report to the Township of Hay, Mr. Wood confirmed that it was not until after the site meeting of September 15th, 1998 that he was advised the Town of Exeter was reconsidering its decision relative to signing the Petition. (See Exhibit 5 Tab 91).
In later correspondence of the Town of Exeter to the engineers, Exeter confirmed it was of the view that a fair allocation of costs would have required the Town to pay two of thirteen shares. It further went on to state "However, for the sake of expediency, we would suggest a three-way cost-sharing would be equitable." In the December 21st, 1998 reply from the engineer, (Exhibit 5 Tab 98), he explains the reasons why he maintained his allocation. I quote:
I am sure that the decision of Council to withdraw was not taken lightly. Neither was my decision to assess costs to the Town. Please consider though, relative to technical information about the project, there was no more information made available from the engineer by September than was available in June. Therefore, the engineer cannot justify the withdrawal by Exeter based on technical merit. Furthermore, the Town's decision was not made by putting the information before all of the affected parties so that it can be openly discussed. . . . In the absence of technical information, it appears that the Town has shifted allegiance from the smaller community defined by the area requiring drainage to a larger community. The Town changed its mind. I have accepted the interpretation that an owner has that right. However, in doing so it has unnecessarily caused the Township of Hay to incur expenses on the project.
Of particular concern in the letter, according to Mr. Wood, was a comment made by the Town of Exeter in its letter of December 17th, 1998 (Exhibit 5 Tab 97) in which it is stated in paragraph 3:
After we learned that there were concerns about proper process (to use Drainage Act or not), about environmental impacts and about costs and after we learned that no other municipalities or agencies would be willing to lend direct support to the petition, Exeter began to question its decision in light of the fact that the benefit to Exeter was not a factor.
In response to this, in the letter cited above, Mr. Wood stated on page 3:
Secondly, I encouraged you to ask the Township of Hay to request a "preliminary report" in order to limit your potential liability and to get more official information rather than being potentially influenced by bits and pieces from other sources. The Town decided to confirm its decision to sign the petition even though a preliminary report would not be requested. Third, the Town has withdrawn from the process using reasons of "process", "environment" and "cost". I suspect "process" is not understood. The engineer has not presented any analysis or recommendations and therefore, "environment" and "cost" are not known and therefore are not recognized as a basis for a decision at this time.
Mr. Wood went on to say on pages 3 and 4:
It would be advantageous if a preliminary report could be prepared. The content could include a preliminary hydrologic evaluation of impacts, a discussion of environmental significance of the wetland and some general concepts for works that could be considered to balance drainage improvements with environmental concerns. It could put concerns in perspective and demonstrate that the process of implementing a project is not inconsiderate of people's rights. If petitioners did not want to proceed after the report was presented, the costs would be assessed but all of the assessments would be eligible for the Provincial grant under the Drainage Act. Otherwise, the costs would remain in the project and would become part of the final costs. It is not too late to discuss the option of the preliminary report with the Township of Hay.
In her evidence, Janisse Zimmerman, former Clerk/Treasurer of the Township of Hay, confirmed that the Township did not seek another engineering opinion on the allocation of costs, nor could she pass an opinion as to whether the costs would have been allocated in this fashion if one of the other petitioners had withdrawn. The Referee notes, however, that the petitioners in Petition No. 2 were in fact the main proponents of the project throughout, being Bert Visscher, Len Veri and thus unlikely to withdraw. I find the decision of Mr. Wood with regard to allocation of costs on Petition No. 2 a proper exercise of his discretion and award the costs of that petition in accordance with the amount set out in Exhibit 15 for Petition No. 2.
COSTS OF PETITION NO. 3 – January 15, 1999
Shortly after the failure of the second Petition through the withdrawal of the Town of Exeter from the project, the main proponents of the project, Bert Visscher, Len Veri and families, appear to have discussed with a number of their neighbours the usefulness of the project. As a result, in addition to the Veri's and Visscher's signatures described in the first two Petitions, Jack Glavin joined in the third Petition, along with Ross and Marg Beaver, Wallace and Kate Fletcher and Gerald Webb. As described in Referee O'Brien's decision the following occurred:
However, within a further 60 days a third Petition was presented and by letter dated the 19th day of January 1999, the Engineer reported that it complied with the requirements of Section 4 (1) (a) of the Act as the signatures represented a majority in the number of owners in the area requiring drainage.
In early February 1999, before a site meeting could be arranged, the Engineering firm sought to withdraw from the Project. However, the Township protested and the firm agreed to proceed and so advised the Township by letter April 5, 1999.
At this point, the Township of Hay became aware of a potential dispute concerning the manner of calculating the majority for the purpose of Clause 4 (1) (a). They were advised that some Drainage Engineers believed that a majority required the signatures of the owners' of the majority of the properties in the area requiring drainage. In this case two non-Petitioners, Exeter and the Ausable Bayfield Conservation Authority (ABCA) and one Petitioner, Lynn Veri, owned multiple properties in the area. If properties were to be counted rather than owners, then there were twenty properties in the area requiring drainage, the owners of only nine of which signed the Petition. The Municipality determined that this issue should be settled before further substantial funds of money were expended.
The Engineers presented options to Council and to the petitioners at a meeting on May 17th, 1999. The petitioners explored options for a mutual agreement drain, or proceeding under the Conservation Authorities Act. A new Engineer came onto the project on behalf of Stantec Consulting Ltd. being Phillip McNeely P.Eng.. After raising initial concerns regarding the adequacy of the petition by letter dated April 21st, 1999, Mr. McNeely concurred with Paul Elston's calculation of the area requiring drainage, but provided a further opinion that the petition was valid. Although acknowledging that the Elston Area Requiring Drainage from an engineering point of view was reasonable, Mr. McNeely stated in (Exhibit 6 Tab 131 p. 2)
I have maintained from the beginning that the Area Requiring Drainage should not include the Conservation Authority Lands.
Mr. McNeely further added
The Hay swamp does not require drainage and costs will be incurred by the Project and the benefitting owners in order to make sure drainage does not impact negatively the Hay swamp. The ABCA lands are dedicated wetlands and can be
protected while giving some relief to the farmers who are contributing to the economic activity of the area.
With this in mind, Mr. McNeely expressed the following reservations with regard to the Project;
The grants available will in my opinion be more than offset by the cost of using the Drainage Act.
The upstream assessments will be complicated by riparian rights.
The support for the project is not strong, as only 8 out of 15 owners have petitioned for the project. Public bodies are making a strong petition difficult.
You are in a better position to judge the opposition to the project, but it is my understanding the opposition is quite strong.
After this hiatus the project continued. In his decision of February 11th, 2002, Referee O'Brien goes on to describe the situation:
After meeting with Council on the 5th of July, 2000, the Petitioners asked that the Project proceed under the January 1999 third Petition and the Engineer was so instructed. By letter dated the 12th day of July, 2000, the Engineer advised the former Township that the Engineer would not accept such instructions and further advised that they would require payment of $3500 for making files available to the Township. Efforts to find another Engineer indicated that a substantial further retainer would have to be paid and the Municipality, having already expended $30,000.00, was indeed frustrated, as were the Petitioners.
At this stage, the Municipality of Bluewater retained the services of Mr. Wright, who recommended direction be sought from the Referee.
As evidence of Mr. McNeely's concerns regarding the public bodies, I note a letter dated February 19th, 1999, (Exhibit 6 Tab 117) to the Clerk/Treasurer of the Township of Hay from the Ausable Bayfield Conservation Authority ("ABCA"). This letter confirmed receipt of notice of the Petition dated January 22nd, 1999 and submitted the following comments:
. . . The following issues are of specific concern to the Authority:
(i) potential downstream flooding and erosion impacts.
(ii) maintenance of base flow and water retention.
(iii) control of sedimentation during construction
(iv) minimize disturbance to the natural environment during construction
(v) minimize impact to Provincially Significant Wetland (Hay swamp)
As noted in the previous correspondence, we wish to work closely with the assigned Engineer (Stantec Consulting) to ensure that all of these issues are thoroughly investigated during the progress of this report. We are acting not only as an affected landowner, but as a watershed manager for all downstream landowners and Municipalities potentially affected by this proposal. We would like to be notified of subsequent meetings so that we may follow the progress of the report and provide input as necessary.
EVIDENCE AT HEARING ON COSTS: PAUL ELSTON
Paul Elston, the current Engineer in this matter, was called to describe correspondence and invoices relevant to costs. In his evidence in referring to notes that he made at the time he indicated that he believed the ABCA had asked for an environmental appraisal. He confirmed that it was his interpretation of the decision of Referee O'Brien, that the Referee remained open to provide further direction, and from the comments of Mr. Wright that a Terms of Reference would be the best way to proceed, rather than the completion of a Preliminary Report, in order to save costs. Mr. Elston advised the Court that the petitioners were advised of the costs at the various stages as they related to engineering fees. His understanding was the petitioners were also advised of the legal costs of the O'Brien Hearing but had received no breakdown.
Mr. Elson also indicated on Petition No. 2 that there was no precedent for allocation to one owner that he has seen, confirming at the same time, however, that in the last ten years he has no experience with a failed petition.
He further confirmed that it was unusual that there be $200,000.00+ costs, but no Preliminary Report. However, he also stated that this was an unusual and difficult project. When questioned as to whether it would not have been prudent to call the matter to an end, Mr. Elston indicated he did not know the political background to that. In evidence, Mr. Elston confirmed his opinion that the 3rd Petition at the outset was not sufficiently signed. He confirmed he did not know whether Bluewater encouraged the petitioners to get other names to join in the petition.
In cross-examination, Mr. Elston agreed while it is unusual to have Terms of Reference, his experience was that in a project of this magnitude where there are no Terms of Reference, there are greater issues; and thus getting the Terms of Reference settled upfront allows discussion earlier in the process.
In response to a question by one of the petitioners who was unrepresented, Jack Glavin, Mr. Elston confirmed in his opinion grant eligibility should be available in this case, as the matter having gone to the Referee for directions at a preliminary stage fell away from the normal course of the act. As such, he took the position that the Terms of Reference, were part of the process of developing a Preliminary Report. In his opinion as the Terms of Reference provided the parameters for costing, but not how these costs were to be borne still in essence represented a Preliminary Report.
Finally, in Mr. Elston's view there were a number of items reviewed in creating the Terms of Reference which might not be eligible for grant, being an environmental appraisal and a cost benefit study had not been completed.
JANISSE ZIMMERMAN
Janisse Zimmerman indicated that as Clerk Treasurer of the Township of Hay and subsequently as an Administrator for the Municipality of Bluewater, Council took the position that it was a neutral body simply administering the process under the Act. When questioned whether Council would be neutral if the Road Superintendent was to sign, it was her indication that the Road Superintendent would sign only if it were absolutely necessary. Her analysis of the Stantec involvement in this matter was that it was disappointing. Although questions arose as to the apportionment and lack of awareness of the petitioners who came in on the 3rd petition of past difficulties, Ms. Zimmerman indicated that before any steps were taken, the petitioners were always called in.
Ms. Zimmerman also indicated that the Council had agreed to a $5,000.00 cost adjustment in the transfer between its current Counsel and the Counsel at the Motion for Directions with Referee O'Brien. When questioned at the 3rd petition stage whether if the project went back to Paul Elston it would stop, Ms. Zimmerman indicated this was not a concern of Council.
When questioned with regard to the difference of opinion between Wayne Wood and Phil McNeely regarding the adequacy of the petition, Ms. Zimmerman would only confirm that Council did not start a lawsuit against Stantec. She also expressed concern with the use of the Conservation Authorities Act as a method of clearing up the drainage problems as being payable out of the general levy and therefore undesirable.
In her testimony, Ms. Zimmerman confirmed that it was her understanding that the ABCA wanted an environmental appraisal without calling it that.
As a result of the change between Solicitors from Andrew Wright to Valerie
M'Garry, there was acknowledgement by the administrator that part of the initial invoice of $3,775.00 was part of the learning curve. Yet no information was provided to the Referee on a possible breakdown of the duplication, nor did Council ever consider having Mr. Wright's accounts reviewed or assessed when his costs came in at approximately double the amount of the estimate given.
The creeping costs of the project as it approached the Hearing before the Referee, according to Ms. Zimmerman were a concern. Although there was contact with the petitioners all the way throughout, there was no discussion regarding the increasing costs. The fact that the budget had doubled wasn't serious enough in her view to notify the petitioners.
The Administrator confirmed that after the Terms of Reference were produced, a special Council meeting was held on June 23, 2004. At this point, Council was advised that if there was a project then the costs would be charged to the project and there would be no charge to the general rate of Bluewater. However, if there was no project, the Referee would have to decide the allocation of costs. Ms. Zimmerman advised it was Mr. Wright's opinion that some costs would go to the petitioners, the cost of the first Hearing would go to Stantec and the balance would be charged to the general rate.
In response to the questioning of the representative for ABCA, the Clerk confirmed that in her mind the Conservation Authority raised the environment appraisal issue. She also confirmed that in her opinion the Referee also picked up on this request at the time of his Hearing. Throughout this process, Council viewed itself as a facilitator which would not attempt to stop the process.
TOM PROUT
Tom Prout is the General Manager of ABCA. In submissions made at the commencement of this Hearing, Ms. M'Garry on behalf of Bluewater expressed the view that Andrew Wright had taken, that ABCA had requested an environmental appraisal. She further submitted the position of Paul Elston that ABCA had requested the appraisal. A similar submission was made by Mr. Courey on behalf of the Municipality of South Huron at the outset of the Hearing. As a result, Geoff Cade, agent for ABCA asked that Mr. Prout provide evidence.
In his evidence, Mr. Prout confirmed that the Municipality had investigated the opportunity of having the ABCA undertake works to the Ausable River under the Conservation Authorities Act. In connection with this, the ABCA had two concerns; one, was that projects are normally done for Municipalities and for this reason there was no mechanism to assess individual landowners of the share of the cost so that would become a concern to the Municipalities; and two, the concern of the landowners that unlike the Drainage Act, there would be no provision for maintenance attached to their project. Mr. Prout took the position that the ABCA did not and never asked for an environmental assessment under section 6 (1) of the Drainage Act. He claimed, that in the unique position that they were in as landowner and as a Conservation Authority, that submissions were made regarding cost benefit studies and environmental work to be done was as a landowner and not as an agency under s. 6 (1).
He further confirmed that before ABCA's submission to the Drainage Referee, there was a resolution of the Board of Directors supporting such attendance. However, he cautioned that if ABCA were going to request an environmental appraisal under section 6(1), there would have been a necessity of a specific resolution of the board. When ABCA became aware of the draft Terms of Reference in which Mr. Elston indicated that they had requested an environmental appraisal, he confirmed that ABCA requested the references to the environmental appraisal be removed.
In cross-examination by Ms. M'Garry:
Question: Well, I understand that, but if you request it without referencing section 6 (1), if you say to the Referee, "we think you should do, one should be done". I mean isn't that basically asking for one to be done? You just didn't reference the section.
Answer: As a landowner yes.
Mr. Prout further confirmed his statement in a letter dated June 21st, 2004 in response to the Terms of Reference found in the Motion Record (dated October 26th, 2007 Tab H page 99) in connection with the Hay Swamp, the following phrase:
It is our position that new studies will need to be undertaken to determine the potential impact of the proposed work.
In evidence, Mr. Prout confirmed that a cost benefit analysis was asked for, as a landowner and that such request was made in his submission to the Referee.
In summary, Mr. Prout confirmed this was not a typical drainage project and that standard environmental concerns which would be addressed by an engineer in normal practice might not be adequate for the project.
SUBMISSIONS OF COUNSEL
All Counsel, excluding Mr. Cade, agent for the ABCA, submitted to the Referee that the petitioners should not be saddled with the entire costs of this matter. In the alternative, Valerie M'Garry on behalf of the Municipality, submitted that Exhibit 15 was the recommended apportionment of costs proposed by the Municipality of Bluewater. This included South Huron's responsibility for costs in connection with the 2nd Petition. She confirmed that it was Bluewater Council's practice not to trigger an appeal and acknowledged that a large portion of the costs were the responsibility of Stantec as they related to the Hearing before Referee O'Brien. Ms. M'Garry acknowledged that Mr. Wright's costs coming in double the estimate were dealt with by the Township somewhat differently than she would have handled the matter. She indicates that she would have lived with such estimate. She submitted that the Preliminary Report was a necessity, that the application to the Referee was a necessity and for such reasons the application to the Referee should be considered part of the cost of the preparation of the Preliminary Report for purposes of the Drainage Act and in particular Section 85.
In this regard, Ms. M'Garry cited the Decision of the Ontario Drainage Tribunal dated October 20th, 1994 regarding the Abandonment of the Arcand Drainage Scheme in the Township of South Gower; in which the tribunal recommended to the Minister that a grant be made pursuant to Section 85 of the Act with respect to the report. I am being requested to find that the work completed to date does represent a Preliminary Report.
Such submission was echoed by Mr. Courey. In her submissions Ms. M'Garry also reiterated Mr. Elston's position on the request of the ABCA regarding environmental matters.
SUBMISSIONS OF OTTAVIO COLOSIMO
Mr. Colosimo in his submissions acknowledged that the Petitioners should pay for the first two drains. His further submission was that Bluewater let this matter get away from them through lack of accounting controls and through not receiving enough damages from Stantec. He maintained that third petition costs should be put against the whole Municipality out of the general levy.
He inquired why the Petitioners should have to approach the ABCA under the Conservation Act for work when this could have been done by either Municipality, South Huron or Bluewater. It was his position that the ABCA went to the Hearing before Referee O'Brien as a Conservation Authority, not as a landowner. He was incredulous as to why, in a Petition that was not contested, Bluewater did not take control of the matter by adding the Road Superintendent's signature. Finally, he suggests that there was a lack of due diligence by Bluewater in connection with Fletcher property. Mr. Colosimo requested costs for his client for the day.
SUBMISSIONS OF PAUL COUREY
Mr. Courey stated that South Huron was only acting as a landowner in relation to the Exeter landfill. With regard to the Fletcher property, although South Huron should have known, its real estate lawyer wouldn't have known because checking for drainage matters is an off-title search. In defence of South Huron, he indicates that once it had knowledge, it acted immediately. He submits that South Huron should not pay all of the costs on the second Petition, as that represents a punitive finding by Mr. Wood against it. He suggests that the entire process of the third Petition be part of a Preliminary Report. He suggests there be a special assessment against Bluewater for its failure to obtain a larger settlement than $20,000.00 from Stantec. Mr. Courey proposed that Bluewater should be charged $25,000.00 for not using the Road Superintendent to proceed with the Petition and that Bluewater should be further charged $25,000.00 for not refusing to continue, when it became obvious the Petition was having difficulty in going ahead. His suggestion was not more than half of the cost of the third Petition be charged to Petitioners and maybe no more than $30,000.00.
In connection with the Conservation Authority, he also takes the position that they asked for the Environmental Appraisal and suggests costs of $25,000.00. Finally, he submits that costs of the day go against Bluewater.
SUBMISSIONS OF GEOFFREY CADE
Mr. Cade, on behalf of ABCA, took the position that as a landowner, since no drainage assessment took place, there should be no costs levied against ABCA. He also submitted that no notice was given before the Referee and during the course of the continuance of the project of liability for potential costs.
As forbearance, Mr. Cade asked since the ABCA did not have access to all of the document, that they be given a chance to make a separate written submission regarding costs. I have received those submissions and have placed them on file at the Court Office.
FINDINGS ON ENVIRONMENTAL APPRAISAL
Section 10 (4) of The Drainage Act states with regard to lack of sufficiency of petition at the meeting to consider the Preliminary Report:
. . . 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, excluding the amount of any grants and the costs of any environmental appraisal or benefit cost statement and the sum with which each of such petitioners is chargeable shall be entered in the collector's roll for the municipality against the lands of the person liable and shall be collected in the same manner as real property taxes. R.S.O. 1990, c.D.17,s.10(4).
In submissions, the issue was raised that the ABCA had in fact, requested under Section 6 that there be an Environmental Appraisal to the extent that it should be liable for some costs. During the course of testimony, it became obvious that this claim for costs broadened to include costs arising from a request under Section 7 for a Cost Benefit Statement.
When submissions were made to the Drainage Referee, Delbert O'Brien in 2002, there was a resolution from the Board of Directors of ABCA authorizing such submissions yet there was no reference made to Section 6 in its proposal to the Referee.
This omission did not, however, prevent the Conservation Authority from making several suggestions to the engineer. In its request it stated:
It is our position that new studies will need to be undertaken to determine the potential impact of the proposal.
Later, the Conservation Authority attacked the proposed Preliminary Report Terms of Reference. In a letter dated June 21st, 2004 to the Municipality (Janisse Zimmerman affidavit, Tab H), there was a request that the interpretation of the Drainage Engineer that ABCA required studies pursuant to Section 6 of the Drainage Act be removed from the Preliminary Report. In the same letter, the ABCA stated:
We have no objections to the opening paragraph of this section which notes that the analysis was requested by the ABCA for the purpose of determining the efficacy of the project. However, the ABCA Board of Director's is not willing to accept the costs of the analysis and has directed to staff to request that those costs be shared by all signatories and participating organizations and agencies involved in the project.
Prior, in submissions found in Exhibit 6 Listing of Documents Relevant to Costs Volume II Documents #106 - #220, on page 183, the Board of Directors of the ABCA by Resolution No.107/01 authorized staff to make a presentation to the Referee.
Under the heading 3. Section 49 – Appeal by Conservation Authority, it stated:
Should the proposed project proceed, it is the opinion of the Ausable Bayfield Conservation Authority that studies need to be undertaken prior to designing the drainage work and that mitigation measures may need to be included in the design and implemented as part of the drainage work, to ensure that proposed drainage work does not injuriously affect the integrity of the Hay Swamp Management Area. The Hay Swamp Management Area is key to the health of the Forest Community and the Ausable River Watershed. The Ausable Bayfield Conservation Authority is prepared to discuss with the project engineer, the types of studies and measures that may be required.
The next paragraph states:
Given that the Drainage Referee may be seized to the project, which we support, the Ausable Bayfield Conservation Authority respectfully requests that the Drainage Referee ensures adequate studies are undertaken and if necessary mitigating measures included as part of the Engineer's Report.
In the same submission under heading 6. Benefit Cost Statement – Section 7 (1)
it states:
Therefore, Ausable Bayfield Conservation Authority respectfully requests the Drainage Referee, in the matter of this proposed project should it proceed, give consideration to the use of Section 7 (1).
Prior to Referee O'Brien's order the ABCA made submissions which specifically dealt with the adequacy of the petition and the area requiring drainage. The concerns of the parties at that Motion were described by Mr. Wright, Solicitor for Bluewater:
A preliminary study was required to examine environmental issues, cost benefit considerations and engineering feasibility. However, the Drainage Act did not provide an appeal mechanism from the Preliminary Report and the various parties to the Hearing were very anxious to be provided with a right of appeal relating to the substantial issues which would arise from a preliminary report.(p. 15).
Mr. Wright argued that an appeal of the Preliminary Report could only be provided by the Referee. In his decision, the Referee stated after finding the petition was valid the following:
The Referee acknowledges that the circumstances of this project are unique in their complexity of engineering, special environmental consideration and cost benefits consideration largely arising from immense size of the watershed.
Secondly, the fact that the parties were required to call upon the Office of the Drainage Referee to determine the validity of the Petition so early
in proceeding illustrates why the normal routine of the Drainage Act falls short.
Thirdly, the necessity for a Preliminary Report of a special character to encompass the cost benefit and environmental considerations, coupled with the demand of all Parties to have a right of appeal was not available, except through the intervention of the Drainage Referee. The allocation of costs for such preliminary report required special considerations. (p. 18)
The Referee goes on to state in his Reasons:
However, the Referee should only become involved when special circumstances require a departure from the routine of the Drainage Act.
He then ordered as follows:
With that perspective in mind, I Hereby Order 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 Land Owners within the Drain requiring drainage and any Municipality named in the style of cause. At such Hearing, environmental issues, cost benefit issues etc. will all be reviewed. (p. 21)
It is noted at this time that the Referee joined the ABCA as a party to this hearing.
The submissions of the ABCA, among other parties, were taken into account by the Referee with regard to environmental and cost benefit issues. The ABCA, pursuant to Section 7(1), could only be making requests regarding cost benefit issues on behalf of their constituent Municipalities, since the Board of Directors of the ABCA is made up of nominees of those Municipalities under s. 2 (2) of the Conservation Authorities Act R.S.O. 1970 c.C.27 and pursuant to s. 2 (3), have authority to act on behalf of their respective municipalities.
In cross-examination, Mr. Prout acknowledged that a request for such cost benefit statement was made by the ABCA in its submission to the Referee, made January 24th, 2002. It did not deny that it had requested the cost benefit analysis:
however, the ABCA Board of Directors was not willing to accept the costs of the analysis and has directed staff to request that those costs be shared by all signatories and participating organizations and agencies involved in the project."
Section 7(1) does not provide such a wide scope for the assessment of costs of a cost benefit statement. Surely the ABCA, which appears quite conscious of the Act in avoiding making any requests under Section 6 (1) for an environmental appraisal, would have been aware of the terms of Section 7(1).
In her cross-examination of Mr. Prout on February 11th, 2009 at the Hearing regarding costs of this matter, Ms. M'Garry placed the follow question:
Q. You're aware aren't you Mr. Prout that, I mean, I think you conceded it, or Ms. Vader conceded it, in the document we were just looking at that no drainage engineer worthy of the name would ignore environmental issues for the purpose of putting through a municipal drain?
A. Yes.
Q. Right, and you, the authority was not satisfied that the customary environmental investigation that would be undertaken was not sufficient?
A. Correct, I would think that it's been well documented that this is not a typical drainage project and the standard environmental concerns may not be adequate for this project.
Later Ms. M'Garry questioned:
Q. And to say that you would be "respectfully requesting that the Referee ensure that adequate studies are undertaken based on the opinion of the ABCA that studies would need to be undertaken and mitigating measures may need to be undertaken." That's a quote from the submission to the Referee.
A. Right, and further to that there were concerns by downstream municipalities in terms of increased flooding as a result of this project.
Regarding the Department of Fisheries and Oceans Mr. Prout stated:
A.. . . . The conservation authority encouraged the Department of Fisheries and Oceans to come forward sooner than that, because we felt that was not a fair justice to the process, the landowners or anyone else, to come along at the design stage with their concerns. So it was through the conservation authority's persuasion that the Department of Fisheries and Oceans put forward their concerns, but I would not call these their formal or final.
Q. Alright, so you were assuming, on the basis of this letter, that a full blown federal level E.A. was going to be required?
A. Correct.
Mr. Prout goes on to acknowledge that this information was put forward to the petitioners to aid their decision making whether to proceed with the petition at the February 6th, 2008 meeting which I had requested occur.
The information put forward to the Petitioners was a letter dated November 22nd, 2007 to the Municipality of Bluewater, which letter was also copied to ABCA. The letter, which arrived three and one half (3 ½ ) years after the Ausable River Municipal Drain Preliminary Report Terms of Reference, laid out 11 possible negative effects which would result in the harmful alteration, disruption or destruction of fish habitat, together with 4 possible negative effects for the Federal Species At Risk Act. As a result, the Department of Fisheries and Oceans confirmed it was required to conduct an environmental assessment of the project as perscribed by the Canadian Environmental Assessment Act before an authorization could be issued.
The inferance that should be drawn here is that the ABCA on its own and to a certain extent in its agency function on behalf the Department of Fisheries and Oceans was unwilling to rely on the Drainage Engineer to do a competent environmental appraisal. By instructing the engineer how to do such work and by requesting the same of the Referee in his submissions, the ABCA was setting aside its reliance on a lack of formal request in accordance with s. 6(1) of the Act.
While not specifically quoting s. 6(1) within 30 days of the Notice it received under s. 5(1)(b) of the Act, the ABCA raised concerns in its letter of January 22nd, 1999. Further in its submissions to the Referee and in its request for standing in the procedural matter before the Referee, the ABCA accepted the jurisdiction of the Referee. They supported the proposal that the environmental issues and cost benefit issues would all be reviewed among the parties granted standing. The fact that the matter did not reach the Preliminary Report stage as envisioned in s. 10(4), but only reached the Terms of Reference is immaterial.
The Guidelines for Environmental Appraisal Under the Drainage Act 1975, confirm that completion of Environmental Appraisal is a two step procedure. The initial phase being the screening process and the second phase being a more comprehensive environmental study.
The Guidelines on page 3 goes on to state:
The purpose of phase 1 is to provide general information to determine the environmental effects of the proposed project. If significant effects are identified, phase 2 would be required to identify in more detail the potential effects and to determin the design which would maximize benefits and mitigate adverse effects from the project.
The timing of development of the Ausable River Municipal Drain appears to match the
Guidelines. In paragraph 3 of the Guideline:
If an environmental appraisal is requested, the engineer following the determination of the validity of the petition (section 9), must prepare the Phase 1 document, or arrange to have it prepared. After its completion, it is submitted to the agency requesting the appraisal, which then decides promptly if the environmental appraisal should be continued. If a continuation of the appraisal is chosen, the engineer proceeds accordingly with Phase 2, submitting both Phases 1 and 2 along with his preliminary report. (Guidelines for Environmental Appraisal under the Drainage Act, 1975 (August 1979) submitted by joint committee of Ontario Ministry of Agriculture and Food, Ontairo Ministry of Environment and Ontario Ministry of Natural Resourses.)
The steps taken by the Drainage Engineer on this project mirror the Guidelines.
In arriving at my decision that the ABCA is responsible for portions of the cost of the Preliminary Report as it relates to cost benefit analysis and environmental appraisal, I had regard to Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, [2005] 2 S.C.R. 601. In that case the Supreme Court of Canada in looking at a tax avoidance scheme, as part of its inquiry decided that:
the Court was required to look beyond the mere text of the provisions and undertake a contextual and purposive approach to interpretation in order to find the meaning that harmonizes the wording, object, spirit and purpose of the provisions of the Income Tax Act.
In connection with the Income Tax Act, it went on to say:
In summary, s.245(4) imposes a two-part inquiry. The first step is to determine the object, spirit or purpose of the provisions of the Income tax Act that are relied on for the tax benefit, having regard to the scheme of the Act, the relevant provisions and permissible extrinsic aids. The second step is to examine the factual context of a case in order to determine whether the avoidance transaction defeated or frustrated the object, spirit or purpose of the provisions in issue.
In this particular situation, the effect of ABCA's attempt at avoidance of the costs of an Environmental Appraisal and Cost Benefit Statement when it clearly requested them frustrated the object, spirit and purpose of sections 6.(1) and 7 (1) of the Drainage Act.
PAYMENT OF COSTS FROM NOVEMBER 12TH, 1998 – FEBRUARY 15TH, 2002
During this period, the costs can be equitably attributed to the behavour of Stantec Consulting Ltd. as a result, while I find there is a small amount of confusion arising from GST calculations occurring with regard to the accounts for 2001 and 2002, I take the approximate total costs on January 9th, 2002 to be $60,903.60. After including the accounts as they related to the attendance of Mr. Wright at the hearing, which account contained in a ledger for 2002 was $10,530.74, upon deduction from it of the total cost of Petition No. 1 and Petition No. 2 as allocated by the Drainage Engineer, there is an rounded total of $41,500.00 which can be attributed to the difficulties encountered with the issues relating to area requiring drainage, sufficency of petition and Stantec's refusal to continue to act. Having reviewed these accounts, I note they are entirely of a legal and/or advertising nature related to the hearing in 2002.
As a result, of the $41,500.00 costs attributable to this stage of the matter, I am unwilling to lay any of these costs upon the petitioners. In allocating the costs, the $20,000.00 already received from Stantec will, of course, be credited against this amount with the balance being borne by the Municipality of Bluewater from its general levy.
PAYMENT OF ACCOUNTS FROM FEBRUARY 16, 2002 TO March 15, 2006
Commencing with the accounts of the lawyers and engineers for the Municipality, after February 15th, 2002, costs with regard to the Preliminary Report are as follows: According to the ledger of the Municipality in 2002, there were $45,176.66 attributed to the drain, subtracting from this $10,530.74, being the Solicitor's invoice that has been previously described as February 15, 2002, the costs for the work on the Preliminary Report in 2002 totalled $34,646.00.
In 2003 using the trial balance supplied by the Municipality of Bluewater, the accounts of R.J. Burnside and Associates Ltd. and Siskinds totalled $9,360.00.
The trial balance for 2004 ended with an account from R.J. Burnside and Associates Ltd. for professional services provide through to July 1st, 2004, which essentially together with contemporaneous the legal accounts culminated upon the submission of the Preliminary Report Terms of Reference to Council and Petitioners. The net total of the accounts for the year were $20,648.00.
For the year 2005, there were no entries or changes in the accounts for the Ausable River Drain.
In 2006, for purposes of my decision, the relevant end date is the 15th day of March, 2006 when the Corporation of the Municipality of South Huron purchased the property of Catherine and Wallace Fletcher. The total of the accounts that accrued from the Order of Referee O'Brien until the purchase by South Huron of the Fletcher property are to be divided equally between the ABCA as attributable to the Environmental Appraisal and the Cost Benefit Work which was undertaken and the balance to the petitioners in accordance with the formula used in Exhibit 15 on Petition No. 1.
For ease of administration, I find these amounts to be:
$32,327.00 to be allocated to the Petitioners, and
$32,327.00 to be paid by ABCA for the environmental appraisal and cost benefit considerations.
To avoid any confusion, the Municipality of South Huron shall be responsible for the costs of Wallace and Kate Fletcher as a successor to those petitioners in the calculations up to March 15th, 2006.
COSTS MARCH 15TH 2006 UP TO THE HEARING OF FEBRUARY 9, 10TH AND 11TH, 2009
At the hearing for allocation of costs in this matter, I was presented with Exhibit number 14 setting out total costs for my consideration. In that calculation, there was an inclusion of the costs ordered in my decision of March 8th, 2008. It would appear that the calculation for the costs for the Municipality of South Huron at $7,534.00 does not include the amount of payment ordered to the Solicitor for Len Veri. Further, I have not reviewed, at length, the costs which the Municipality of Bluewater attributes to itself, which I ordered as the costs payable to Len Veri's Solicitor together with the remaining costs of the hearing and submissions arising November 26th and 27th, 2008. These are described in more detail in my Order of March 10th, 2008. I am removing these totals from drainage costs for legal and engineering services because I had indicated in my Order that such costs shall be borne by Bluewater out of its general levy and not chargeable to the drain. Likewise, the costs of South Huron should not be attributable to the drain and I delete them for that reason.
Therefore, reducing from the costs of Petition No. 3, the allocations I have made previously and removing from the calculations Bluewater's costs of $11,733.76 and the Municipality of South Huron of $7,534.80, I calculate the remaining costs for the period from March 15th, 2006 up to the hearing of February 9th, 10th and 11th, 2009 to be $84,205.00.
Since this situation before the Referee is not governed by s. 10 (4), as the Petitioners never reached the end of the meeting regarding a Preliminary Report; after considerable deliberation by the Referee, I ORDER the amount of $84,205.00 is to be divided and payable as follows: one third to the Petitioners, one third to the Municipality of Bluewater and one third to the Municipality of South Huron. For reasons I have already alluded to in my Order of March 10th, 2008, both Municipalities should have been aware of and have taken steps to revisit the petition as it moved forward after March 15th, 2006. This was not done.
While the allocation of one third of these costs to the petitioners on a failed petition may seem harsh, it is my view that the petitioners residing in the area should have knowledge of their neighbours, given that the original moving proponents, Albert Visscher and Len Veri requested them as neighbours to join in the petition. The petitioners as a group should have known of the sale of the property of Wallace and Kate Fletcher. In a petition which was always at the edge of failure, all parties should be vigilant to changing circumstances.
I FURTHER ORDER that the work completed on the third petition, subsequent to February 16th, 2002, which lead to the completion of a Terms of Reference for a Preliminary Report should be deemed to be a Preliminary Report and available for grant. In my view, it meets the requirements of the legislation upon removing the costs of an Environmental Appraisal and Cost Benefit Statement as required by s. 85 (c) of the Act.
I cannot let the unfortunate history of the Ausable River Municipal Drain pass without making comment with regard to changing circumstances within the agricultural community in the Province of Ontario.
According to Statistics Canada, the number of farms in Ontario reporting to Statistics Canada between 1976 and 2006 changed from 88,801 to 57,211 with a proportional increase in the size of farms reported.
As a result, the difficulty in completing drainage schemes as farm sizes expand, specialization increases, and more non-farm people move into the countryside forces the farming community to take a closer look at what I would describe as larger drainage schemes.
Around the time of commencement of this drain, according to the Ontario Ministry of Agriculture Food and Rural Affairs Fact Sheet on Community Relations in the Rural Area, the rural population of Ontario was 1.83 million (1991 figures), but only 12% of the people who resided in the traditional farming areas were engaged in food production. This has to lead to issues involving sufficiency of petitions.
In addition, during the process of this drain and its various failed petitions, the County of Huron converted individual titles to electronic registration in which the paper Registry system and Land Titles system were converted under the Land Registration Reform Act. In the particular area of this drain, conversions of the existing titles from the old system to the new electronic format occurred in April of 2000.
Prior to that, the Municipality and their Drainage Engineer had, as their best resource to investigate the ownership of the land, the revised assessment rolls. However, as recognized by the Drainage Act, the revised assessment rolls can also take time to be created, especially in the situations where land severances have occurred, the lag time of months and in some cases years can occur in revising assessment rolls.
In a drainage process which extended over 10 years with the changes that occurred in the Land Registry System in Ontario, Drainage Engineers and Municipalities would be well served going forward to avail themselves of title search through the Ontario Electronic Registration System as operated by Terenet Land Information Services Inc..
In the particular situation before the Referee, on conversion of the Visscher properties, the supply of a Block Map would have made it immediately recognizable that the Visscher properties previously described having two roll numbers for purposes of the Land Titles Act were deemed to be one parcel. Going forward, I would recommend to any Municipality and Drainage Engineer as a best management practice that they review the ownership of parcels, firstly through their assessment rolls which is cost free, but secondly through the electronic registration system to ensure that the problems which exist but become evident only on a delayed basis, are not encountered in future petitions where there is no strong majority in favour.
COSTS OF THE HEARINGS OF FEBRUARY 9TH – 11th , 2009
Given the fact that several of the petitioners took the time to represent themselves at the hearing regarding costs, I am not inclined to allow the costs of any of the Counsel for those days or for the agent of ABCA as part of any assessment of costs on this drain. Each party shall bear their own costs for matters subsequent to February 8th, 2009.
If, for any reason, Bluewater takes the position that there are costs which the Referee failed to allocate in this matter, a separate motion can be made to the Referee with notice to the parties attending at the hearings of February 9 – 11th, 2009.
DATED at Strathroy, Ontario this 8th day of December, 2009.
ROBERT G. WATERS ONTARIO DRAINAGE REFEREE