SW Oxford (Township) v. Burnside & Associates, 2014 ONDR 1

ONTARIO SUPERIOR COURT OF JUSTICE IN THE COURT OF THE DRAINAGE REFEREE

SW Oxford (Township) v. Burnside & Associates 2014 ONDR 1

Date of Decision: 2014-07-17 Statute: Drainage Act Hearing: 2014-02-27

Between: The Corporation of the Township of South-West Oxford (Plaintiff) and R.J. Burnside & Associates Limited and Van Bree Drainage & Bulldozing Ltd. (Defendants)

ORDER

To: Mr. Brian T. Daly McKenzie Lake Lawyers LLP 300 Dundas Street London ON N6B 1T6 Tel: 519-447-2627 Fax: 519-672-2674 LSUC#20282H Solicitor for the Defendant, Van Bree Drainage & Bulldozing Ltd

And To: Ms Sheila Handler McCall Dawson Osterberg Handler LLP 401-114 Dundas Street, London ON N6A 1G1 Tel: 519-672-2108 Fax: 519-672-2436 LSUC#43806D Solicitors for the Defendant, R.J. Burnside & Associates Limited

And To: Mr. Paul Courey Courey Law Office, Barristers & Solicitors, 16 Queen St. S., P.O. Box 178, Tilbury ON N0P 2L0 Tel: 519-682-1644 Fax: 519-682-1146 LSUC#32630L Solicitor for the Plaintiff The Corporation of the Township of South-West Oxford

COST ORDER

UPON receiving the submissions of Counsel regarding costs and upon hearing Counsel on February 27th, 2014 by teleconference and upon receiving the final oral submissions of Counsel on April 4th, 2014:

THIS COURT ORDERS as follows.

1. The Defendant, Van Bree Drainage & Bulldozing Ltd. shall receive costs in the amount of $80,000.00 inclusive of HST, together with disbursements as set out in the Bill of Costs supplied by this Court by Van Bree Drainage & Bulldozing Ltd. in the total of $10,125.45 together with HST on disbursements of $1,316.31 for a total of $11,441.76

2. Such costs being granted on a partial indemnity basis against the Defendants R.J. Burnside & Associates Limited, shall be payable in the amount of $30,000.00 inclusive of HST and against the Plaintiff, the Corporation of the of the Township of South-West Oxford in the amount of $50,000.00 inclusive of HST, with the disbursements to be divided and paid between the parties, 37.5% by R.J. Burnside & Associates Limited and 62.5% by the Corporation of the Township of South-West Oxford.

3. The costs granted by this Order on behalf of Van Bree Drainage & Bulldozing Ltd. in the total amount of $91,441.76 inclusive of HST, clerks fees and disbursements may, at the discretion of the Corporation of the Township of South-West Oxford, form part of the Clear Creek Drain, with such costs to be apportioned to the drain in accordance with the assessment set out in the report of K. Smart Associates Limited dated August 30th, 2002. Should the Township, in its discretion, decide that such costs form part of the drain, and any grant be received, such grant if any, shall be divided between the Defendants, the Corporation of the Township of South-West Oxford and R.J. Burnside & Associates Limited in the same proportion as costs are ordered in this matter.

4. There shall be no costs for any party to this hearing for their submissions for costs as set out in the Reasons for Decision of the Referee dated October 3rd, 2013, nor shall there be any costs granted for submissions subsequent to November 15th, 2013.

5. I shall provide Reasons for Decision in arriving at the costs contained in this Order.

Dated at Strathroy, Ontario this 17th day of July, 2014.

ONTARIO DRAINAGE REFEREE ROBERT G. WATERS

REASONS FOR DECISION

To: Mr. Brian T. Daly McKenzie Lake Lawyers LLP 300 Dundas Street London ON N6B 1T6 Tel: 519-447-2627 Fax: 519-672-2674 LSUC#20282H Solicitor for the Defendant, Van Bree Drainage & Bulldozing Ltd

And To: Ms Sheila Handler McCall Dawson Osterberg Handler LLP 401-114 Dundas Street, London ON N6A 1G1 Tel: 519-672-2108 Fax: 519-672-2436 LSUC#43806D Solicitors for the Defendant, R.J. Burnside & Associates Limited

And To: Mr. Paul Courey Courey Law Office, Barristers & Solicitors, 16 Queen St. S., P.O. Box 178, Tilbury ON N0P 2L0 Tel: 519-682-1644 Fax: 519-682-1146 LSUC#32630L Solicitor for the Plaintiff The Corporation of the Township of South-West Oxford

REASONS OF DECISIONS

In the Reasons for Decision given by me dated the 3rd day of October, 2013, I indicated that during my time as Referee, costs continued to be a concern and such would be granted only on a partial indemnity basis. I then requested written submissions from the parties to be delivered by November 15th, 2013.

The parties took it upon themselves to provide Reply Submissions regarding costs after the initial submissions were made, but the Defendants in this action further took it upon themselves to take issue with the right of the Plaintiff to have such Reply Submissions. This lead to delays and the Reply Submissions by Mr. Courey, the Solicitor for the Plaintiff, were received on March 31st, 2014 with a final teleconference between the parties and myself on April 4th, 2014.

In the final paragraph of my Reasons for Decision dated October 3rd, 2013, it was stated:

In the interim I leave the matter of costs to be discussed between Counsels and hopefully they will be able to come up with a proposal for the Referee acceptable to all . . .

It was unfortunately the tenor of this action that the parties were unable to agree on little, if any, matters throughout this trial.

FORUM

In the costs submissions of Mr. Daly dated November 18th, 2013, the following statement was made:

In a number of its submissions, the Plaintiff refers to the practice of the Court as the Court distinct from the Ontario Superior of Justice. While there are distinctions, this Court is within the Superior Court of Justice. Moreover, the jurisdiction of this court to hear the tort and contracts claim in these proceedings is a concurrent jurisdiction shared by the Judges of the Superior Court of Justice.

The more correct view is provided by Mr. Courey in his response in which he maintains that the Court is not within the Superior Court of Justice and that the connection between the two as set out in the Drainage Act relates to administrative processes and use of facilities. While s. 120 of the Drainage Act allows for an action or pending action in the Superior Court of Justice be transferred to the Court of Referee, it is merely recognition of the expertise which occurs in the forum of the Court of the Drainage Referee in some situations. As such, while I do not feel bound by the Rules of Civil Procedure in all matters, except where the Act or the Rules of Practice and Procedure To be Followed in All Proceedings Before Referee (Regulation 275) do not provide a procedure, I may make reference to or have regard to those Rules of Civil Procedure.

While s. 120 of the Drainage Act would suggest that indeed I have a concurrent jurisdiction to share the procedures of the Superior Court of Justice, the jurisdiction that I have emanates from s. 106 of the Drainage Act and in the matter of costs now before me, s. 108 and 109 of the Drainage Act govern, not as has been suggested s. 131(1) of the Courts of Justice Act.

Therefore while I may be guided by Rule 57.01 of the Rules of Civil Procedure and Rule 49 of the same rules with regard to establishment of cost and offers to settle, such provisions are not definitive as the procedure I must take.

SETTLEMENT

As part of the cost submissions for the Defendant, R.J. Burnside & Associates Limited, a settlement offer brief was provided, setting out the offers of settlement through various correspondences commencing in October of 2009. The Settlement Brief reviews the various efforts of arriving at a settlement in which offers were provided, and in which correspondence was received from the Plaintiff regarding the issue of dividing the hearing into one of liability and damages.

A further variation came with the request of October 20, 2009 by the Courey Law Office proposing a cost sharing arrangement without a cap on liability, while the same correspondence indicated that it should not be taken to mean that the Township would accept any cost sharing arrangement. This was a response to the proposal of Brian Daly on behalf of Van Bree Drainage & Bulldozing Ltd. and that of R.J. Burnside & Associates Limited in its correspondence of October 19th, 2009. A wrinkle in the negotiations occurred in that R.J. Burnside & Associates Limited indicated that they would not attract further liability by certification of the work as engineers under this arrangement.

There then continued a course of correspondence from R.J. Burnside & Associates Limited's Counsel to Paul Courey, Counsel for the Plaintiff, stretching from November 9th, 2009 to September 19th, 2011, being 20 letters in total. I find it cavalier on the part of the Township's Counsel not to have replied to those letters and at least clarify what appears to have been a rejection of the proposals in its letter of October 20th, 2009.

I note, however, that both Counsels for the Defendants did not respond to the suggested arrangement that if there was a cost-sharing arrangement, it would be based on the actual costs incurred.

As a result, although it was uncourteous on behalf of Township's Counsel to not respond to those letters, the parties were not anywhere close to a settlement.

What was of a greater concern to me is the response of all parties to the comments made by me at the Procedural Motion heard April 18th, 2012. The Transcript of the hearing indicated the position of Mr. Courey as follows:

1. That there was no provision for a Pre-Trial in the practice rules of the Referee.
2. The Referee responded that the Acting Referee, if requested would do a Pre-Trial.
3. Plaintiff Counsel Comment was the Acting Referee is not in the Country for the entire year and that it was not the usual routine.

There were no responses raised by the Defendants' Counsel at this time to a proposed Pre-Trial. Yet the submissions of Counsel for R.J. Burnside & Associates Limited are that the Court of the Drainage Referee should be informed by and follow the Rules of Civil Procedure and related jurisprudence in arriving to the assessment and awards of costs. It should also stand that the offices of the Referee, when they are offered in relation to a Pre-Trial that the matters to be considered in a Pre-Trial as set out in Rule 50.06, could have alleviated the time spent in the trial of the issues of both liability and damages. One of the reasons that an Acting Referee was appointed in 2006 was to enable the Court as a practical Court to avoid lengthy trials. The discretion of the Referee is found in s.15 of R.R.O. 1990, Reg. 275, as well as in the discretion found in s. 106 of the Act.

The parties being unaware of this discretion or being unwilling to take advantage of the Pre-Trial failed at this point to advance the prospect for settlement.

While a final offer was made with regard to settlement outside the time frame set out by Rule 49.10 (2) of the Rules of Civil Procedure, it is indeed significant that that offer was made.

While I retain my discretion in this matter, I am not oblivious to the proposals made by the two Defendants and as such, has found a greater liability for costs granted in favor of the Defendant Van Bree Drainage & Bulldozing Ltd. to the Plaintiff, the Corporation of the Township of South-West Oxford.

By the same token, I did not agree with the submission of Counsel for R.J. Burnside & Associates Limited that it receives costs based on the arguments put forward regarding settlement, but acknowledging what efforts it made to settle this matter, I have apportioned the costs in the fashion set out in paragraph 2 of my Order of even date.

COMPLEXITY AND IMPORTANCE OF THE MATTER

The Book of Authorities of the Defendant, Van Bree Drainage & Bulldozing Ltd. references the only reported case under the Drainage Act regarding a damage claim against an engineering firm. This case is Golden Triangle Air Services Limited v. The Corporation of the Township of Russell et all. (1973), Unreported, County Court of the Judicial District of Ottawa-Carlton (Referee Sidney L. Clunis). Given the fact that there had been few cases in connection with the liability of engineers, although there may have been administrative sanctions in the decisions of the Agricultural, Food and Rural Affairs Appeal Tribunal (Drainage Tribunal) regarding engineers and the past practice of reducing fees claimed by engineers by this and previous Drainage Referees, the uniqueness of this Drainage Act claim represents an important matter for adjudication and advice to the drainage community. As such, my Order is a reduction in the amount from that claimed in the Bill of Costs of the Defendant Van Bree Drainage & Bulldozing Ltd. from $129,598.71 being the claim for costs, disbursements and HST. This trial was viewed as having a considerable importance by me in refining the respective roles of the Municipality, Engineer and Contractor under the Act and hence a reduction was in Order.

PROPORTIONALITY

Aiding my decision in reducing the amount of costs and disbursements was the issue of proportionality. In an effort to arrive at an amount of costs which was fair and reasonable to all parties, I considered as described above, the nature of the litigation, its usefulness to the drainage community which results from the novelty of this case before me.

However, in arriving at my decision, a further issue arises with regard to the amount of billable hours spent on representing the Defendants. I acknowledge that Mr. Courey, as an experienced drainage Counsel would have had considerably less hours than the Counsel for the Defendant, but to a certain extent the amount of legal work necessary to represent the Defendants in this matter may have risen through lack of experience by Counsel for the Defendants in the Court of the Drainage Referee. While not wishing to penalize the successful Defendant, I have taken into account the inexperience in the Court of the Drainage Referee of the Defence Counsel.

Having now endured the process and the learning curves involved in the Drainage Act, I thank Defence Counsel for their efforts in this matter and would commend their further involvement in Drainage Act matters.

Dated at Strathroy, Ontario, this 17th day of July, 2014.

ONTARIO DRAINAGE REFEREE ROBERT G. WATERS