ONTARIO SUPERIOR COURT OF JUSTICE IN THE COURT OF THE DRAINAGE REFEREE
Edwardsburgh (Township) v. Carmichael 2018 ONDR 2
STATUTE: Drainage Act
HEARING: 2018-05-09
BETWEEN:
THE CORPORATION OF THE TOWNSHIP OF EDWARDSBURGH/CARDINAL Applicant
- and –
ROBERT CARMICHAEL and BETTY CARMICHAEL, DAVID BRUCE and ARLENE BRUCE and GREG MOULTON Respondents
ORDER
Following the trail of this case held in Brockville on Wednesday May, 9, 2018 including hearing the submissions of counsel for the applicant Township, of the agent for the respondents Robert and Betty Carmichael for the reasons which follow:
THIS COURT ORDERS that:
Township By-law No. 2015-68 was enacted without legal authority and is therefore invalid.
David Bruce, the owner of part of Lot 4, Concession 6 in the Township of Edwardsburgh/Cardinal, shall pay to The Corporation of Township of Edwardsburgh/Cardinal the sum of $49,028.09, being the cost incurred by the Township between December 13, 2013 and September 8, 2014 for the Bruce Crossing Improvement;
The Bruce Crossing Improvement is a special benefit to the Bruce farm in Lot 4, Concession 6 and the $49,028.09 referred to above is to be regarded as a special benefit assessment pursuant to section 24 of the Drainage Act.
No pre-judgement interest is to be added to the $49,028.09 referred to above.
Pursuant to subsection 118(2) of the Drainage Act, the expenses of the Township arising from this proceeding shall be payable out of the general funds of the Township and shall not be levied upon the lands assessed for the maintenance and repair of the Drain. For this purpose the expenses of the Township shall include any costs payable by the Township net after deducting any costs payable to the Township.
If the parties are unable to agree about costs, each party may make brief written submissions to the presiding Acting Drainage Referee within 30 days.
Dated at London this May, 21, 2018
Andrew C. Wright Acting Drainage Referee
REASONS
1This case is about the James Reilly/Dewitt-Richter Drain (the "Drain") which is located in the Township of Edwardsburgh/Cardinal. The Dewitt-Richter portion of the Drain lies to the west of and outlets into the James Reilly portion of the Drain. The most recent engineer's report on the Drain is the Engineer's Report on the James Reilly / Dewit-Richter Municipal Drain Modifications and Improvements issued May 11, 2009 by Robinson Consultants Inc. and signed by A.J. Robinson, P. Eng. as modified by Addendum No. 1 issued July 2009 by Robinson Consultants Inc. following Court of Revision decisions (the "Engineer's Report"). The Engineer's Report was prepared under section 78 of the Drainage Act.
2There were no appeals to the Agriculture Food and Rural Affairs Appeal Tribunal (the "Tribunal) from the Engineer's Report or from the decisions made by the Court of Revision.
3There has been no suggestion of any procedural irregularity leading to the adopting of the Engineer's Report.
4The Drain is an open channel. The drainage area for the Drain is 2,150 hectares, being approximately 5,300 acres. The cost of the project described in the Engineer's Report was approximately $500,000.
5In December 2009 The Corporation of the Township of Edwardsburgh/Cardinal (the "Township") awarded the contract for the work contemplated by the Engineer's Report. The bulk of the work was undertaking between April and November 2010. There were deficiencies which were corrected such that a certificate of completion was issued by the engineer in December of 2012.
6One of the deficiencies which is relevant to this matter involved a farm crossing (the "Bruce Crossing") of the Drain on the farm of David Bruce which is part of Lot 4, Concession 6. Deficiencies identified in relation to the Bruce Crossing were corrected in November 2011.
7The Bruce farm is on the James Reilly Drain portion of the Drain so downstream of much of the drainage area. The Bruce Crossing is one of 16 farm crossings affected by the work set out in the Engineer's Report. The then existing farm crossings needed to be lowered to achieve the required capacity for the design flows in the Drain. The lowering of the farm crossing culverts required their replacement; the lower replacement culverts were of the same size as previously existed, though technically a little larger than necessary to accommodate the design flows. The cost of these farm crossings were assessed to the Drain in the Engineer's Report
8In the case of the Bruce Crossing, the engineer was persuaded by Mr. Bruce that, due to site specific conditions, including Drain alignment, the then existing 7.2 metre long culvert should be replaced by a longer 12 metre culvert to be realigned with the Drain to provide a passable length. This extra length was specifically referred to in the Engineer's Report. Notwithstanding the extra length, as compared to the other farm crossings, the cost of the Bruce Crossing was also assessed to the Drain.
9As mentioned previously the Bruce Crossing is on the James Reilly portion of the Drain. At that location the Drain flows from the southwest to the northeast. The Bruce Crossing is located very close to the west boundary of the Bruce farm.
10Chronologically, it should be noted that in March 2012, the Township appointed Greer Galloway Group Inc. as drainage superintendent. The person Greer Galloway Group Inc. assigned to perform this function was James Guest. Mr. Guest has drainage superintendent credentials from OMFRA and is a Certified Engineering Technician (CET). He has 35 years of experience, during 9 years of those years he performed the duties of drainage superintendent. In April 2016 Mr Guest was hired by the Township as Road Superintendent and is no longer employed by Greer Galloway Group. Mr. Guest is not an engineer and there is no evidence that he performed his work as the Township's drainage superintendent under the supervision of an engineer from Greer Galloway Group with experience under the Drainage Act.
11There are two aspects of this case. The first relates to work done on the Bruce Crossing in the Fall of 2103 and the Spring of 2014. The second relates to alterations made to the Drain in 2015 as it flows through the Carmichael farm in Lot 2, Concession 6 without municipal approval under the Drainage Act or Conservation Authority approval; the changes to the Drain involved relocating a culvert and the realignment of a section of the Drain.
12I will deal first with the Bruce Crossing.
13In the Spring of 2013, Mr. Bruce complained to the Township about the Bruce Crossing. The complaint is really a continuation of the dissatisfaction expressed by Mr. Bruce with the work done under the Engineer's Report, including the rectification of deficiency work done in November of 2011. While erosion was said to be an issue, the real problem for Mr. Bruce is that he had difficulty navigating the crossing with his farm equipment.
14In response to this complain, Mr. Guest attended the Bruce farm in April 2013. As a result of this attendance, Mr. Guest agreed that the crossing should be longer to assist Mr. Bruce to get across the Drain to access his field to the south. Mr. Guest also agreed with Mr. Bruce's erosion concerns and questioned the sufficiency of the capacity of the crossing culvert to effectively handle the water flows. He prepared a report to this effect addressed to the Township Treasurer, Richard Bennett; the report was dated May 23, 2013 and in it Mr. Guest proposed five alternatives to address Mr. Bruce's complaints. Leaving aside the "do nothing" option, the alternatives ranged in cost for $24,500 to $28,600.
15This May 2013 report was referred to Robinson Consultants for comment. Andrew J. Robinson, P. Eng, the author of the Engineer's Report, responded by letter dated June 28, 2013. Mr. Robinson confirmed the adequacy of the Bruce Crossing to accommodate the design flows, based on a 2 year rainfall event. Mr. Robinson also gave it as his opinion that any extension of the Bruce Crossing culvert beyond the 12 metre length provided for in the Engineer's Report would be a "Special Benefit" to the land owner and as such the full cost would be borne by the landowner. Mr. Robinson's letter was accompanied by a Memorandum dated June 19, 2013 and prepared for him by a drainage technician in the offices of Robinson Consulting; the memorandum was to the same effect as Mr. Robinson's June 28th letter.
16Mr. Guest's May 23, 2013 report does not address the question of how the cost of his proposed alternatives would be paid nor does it refer to any Drainage Act process by which such work would be authorized. Mr. Robinson addressed how the cost should be borne but does not specifically address Drainage Act process. That said, because section 24 of the Drainage Act specifies that a special benefit assessment is made by an engineer, the necessary implication of section 24 of the Drainage Act is that a special benefit assessment would flow from an engineer's report, in this instance under section 78 of the Drainage Act.
17On July 15, 2013 the Treasurer and Chief Administrative Officer of the Township made a report to the Township Council sitting as Committee of the Whole attached to which was Mr. Guest's May 23, 2013 report and Mr. Robinson's June 28, 2013 letter. The report to Council by senior administration was that the works proposed by Mr. Guest should be authorized as maintenance and report of the Drain and that the cost should be assessed to those benefitting from the Drain.
18On Mr. Guest's recommendation Council, by resolution, authorized the $24,500 alternative. In response to a question from a Council member as to the assessment of the cost of the work, the Treasurer informed Council that the property owners upstream from the Bruce Crossing would be billed for the work; Mr. Bruce was to pay nothing.
19Based on the evidence, of the landowners on the Drain, only Mr. Bruce was provided with a copy of the July 15, 2013 staff report and he was the only land owner in attendance when Council discussed the matter on July 15, 2013.
20There is nothing in the Minutes of the July 15, 2013 meeting of Council sitting as Committee of the Whole which indicates any consideration of Mr. Robinson's recommended special benefit assessment nor of the implication that the work proposed by Mr. Guest was an improvement to the Drain requiring a section 78 engineer's report nor was anything said about the risk that the proposed work was not something which qualified as maintenance and repair under section 74 of the Drainage Act. In their evidence, neither Mr. Guest nor Debra McKinstry, the Chief Administrative Officer of the Township, could recall there being any discussion by Council of Mr. Robinson's June 28, 2013 letter about special benefit assessment or of process under section 78 of the Drainage Act.
21By resolution on July 22, 2013 the Township Council formally accepted the recommendation of the Committee of the Whole from July 15th.
22The contract for the Bruce Crossing work was awarded to Frank Ault Excavating; that work was commenced in December of 2013. Again Mr. Bruce was not happy and the Township took Frank Ault Excavating off the job and replaced that contractor with another, Robert Nash Excavating. The new contractor finished in September 2014.
23By the time the Bruce Crossing work was completed the cost was $49,028.09 more than double the $24,500 cost estimated by Mr. Guest in his May 23, 2013 report to the Treasurer. In his evidence Mr. Guest explained the increased cost as being largely a function of replacing Frank Ault Excavating with Robert Nash Excavating at the behest of Mr. Bruce.
24There is no evidence that any notice of any of this was given to any of the landowners on the Drain much less an opportunity to have a say about it.
25On November 23, 2015 the Township Council passed By-law No. 2015-68 to recover the $49,028.09 cost of the Bruce Crossing work from the landowners upstream from the Bruce farm. That resulted in an appeal to the Tribunal by the applicants, Robert and Betty Carmichael. They own lands in the Drain's watershed and were heavily assessed under By-law No. 2015-68 despite their lands being far removed from the Bruce Crossing.
26Before continuing about the Bruce Crossing, I will mention the second facet of the case which relates to alterations made to the Drain in the Spring of 2015 as it flows through the Carmichael farm in Lot 2, Concession 6. This work was done without municipal approval under the Drainage Act or Conservation Authority approval. After the fact Greer Galloway Group Inc., the Township drainage superintendent, assisted with a retro-active approval from the Conservation Authority for the Carmichael alterations. A technologist from Greer Galloway Group Inc. inspected the Carmichael alterations and identified a number of deficiencies. Those deficiencies were set out in a letter dated July 10, 2015 addressed to Shawn Carmichael, as agent for Robert and Betty Carmichael. There is no suggestion that an engineer viewed the Carmichael alterations to determine whether the changes satisfied current engineering standards.
27When the assessments under By-law No. 2015-68 were appealed to the Tribunal, the matter of the unauthorized alteration to the Drain was also put in issue by the Township. After seeking clarification and elaboration, and with the consent of the Township and of the Carmichaels, the Tribunal referred the entire matter to the Court of the Drainage Referee in July 2016.
28On February 10, 2017, the Township initiated the process before the Referee by a notice of application, naming the Carmichaels as respondents, seeking an Order confirming that the work done on the Bruce Crossing was maintenance and repair within the meaning of section 74 of the Drainage Act as well as an Order requiring the Carmichael's to restore the Drain on the Carmichael farm to the condition specified in the Engineer's Report. The application was accompanied by comprehensive affidavit material.
29What follows is a synopsis of formal Orders with reasons arising from procedural pre-hearing conferences. Recourse should be had to the decisions themselves for more detail.
30On July 19, 2017 a procedural pre-hearing conference was held in Brockville. At that time, in addition to the Township and the Carmichaels, David and Arlene Bruce sought to be added as parties because of their exposure to a special benefit assessment; in fact it appears that only David Bruce is the owner but both were added as parties as requested. Greg and Mary Ann Moulton were also added as parties on the basis that the Moulton's are the owners of land assessed under By-law No. 2015-68. During that day's proceedings the Township asked for time to seek out a drainage engineer witness to defend Mr. Guest's opinion that the Bruce Crossing work in 2013 and 2014 was maintenance and repair under section 74 of the Drainage Act as opposed to an improvement under section 78 of the Drainage Act. On that basis the procedural prehearing conference was adjourned to a telephone conference call hearing on January 23, 2018.
31At the opening of the telephone conference call hearing on January 23rd, counsel of the Township advised that the Township was conceding that the 2013/2014 work on the Bruce Crossing was not maintenance and repair authorized under section 74 of the Drainage Act. He advised that the outstanding issue in relation to the Bruce Crossing was how the historical costs are to be borne.
32With respect to the unauthorized work on the Drain through the Carmichael farm, there was no defense offered other than to say that the July 10, 2015 technologist's letter from Greer Galloway Group Inc. represented an authorization to allow the drain as altered to continue. There was no evidence that the deficiencies mentioned in that letter had been rectified nor any evidence that an engineer had looked at the work or evaluated it against current engineering standards.
33At the time, I advised the parties that, in my view, an engineer needed to be appointed under section 78 of the Drainage Act to inspect the work done on the Bruce Crossing and the work done on the Carmichael farm to evaluate the changes and to determine whether the changes satisfied engineering standards. If not satisfactory the engineer would need to identify what needs to be done to satisfy current engineering standards and to then formally incorporate the changes into the Drain. That engineer's work under section 78 would also allocate the future cost of this work by way of assessment schedules thereby crystalizing the historic amount for the Bruce Crossing the payment of which is to be determined by this Court.
34However, before making an Order about appointing an engineer under section 78 of the Drainage Act, I wanted to have input from Mr. Robinson, P. Eng. For that purpose the pre-hearing conference was adjourned to a further telephone conference call on February 12, 2018.
35In the course of that February 12, 2018 pre-hearing conference, it evolved that a process under section 78 of the Drainage Act should be initiated and that the Township should appoint Mr. Robinson, P. Eng. to undertake that exercise. This is the sort of process which should have been undertaken leading to the improvement of the Bruce Crossing and to the relocation of portions of the Drain on the Carmichael farm. It was then and is again acknowledged that the section 78 process under the Drainage Act is burdensome but that is the nature of the legislation which is a very powerful tool to be used carefully, judiciously and with due process having regard for all of the stakeholders assessed to the Drain.
36It was therefore Ordered that the Township initiate a section 78 process under the Drainage Act and, in that connection, to pass the following resolution:
"That council appoint Andrew Robinson, P. Eng. of Robinson Consultants Inc. to complete an amendment to the existing Engineer's Report for the James Reilly/Dewitt-Richter Municipal Drain, under Section 78 of the Drainage Act, to incorporate the changes to the culvert and crossing on the Bruce property and the relocation of the drain and culvert on the Carmichael property. The amendment report is to include an assessment schedule for the costs of the amendment report and any additional modifications required at the two properties. The amendment report is not to deal with the assessment and distribution of costs to date for modifications and related costs incurred since issuance of the Certificate of Completion dated November 28th, 2012 for the initial construction."
37With some minor adjustments, this form of resolution was crafted by Mr. Robinson and offered for consideration after the February 12th telephone conference call. The parties were given an opportunity to review and comment on upon it. The Township has passed this resolution.
38Following that disposition, a trial date was set do deal with the question of who should pay for the cost of the improvement of the Bruce Crossing.
39By agreed statement of facts the amount at issue is $49,028.09, being the costs incurred between December 13, 2013 and September 8, 2014. The agreed statement of facts includes references to Provincial grants to the Township and to landowners assessed under By-law No. 2015-68. I am not going to have regard for the provincial subsidy as they may or may not apply or may apply differently according to this Court's disposition as to responsibly. For example an assessment of "special benefit" may not qualify for full or any subsidy; in the same vein, an order pursuant to subsection 118(2) of the Drainage Act that the Township pay out of the general funds of the municipality may not qualify for full or any subsidy. I will deal with the $49,028.09 amount in issue and let any subsidy apply as it may.
40At the beginning of the trial on May 9, 2018, pursuant to subrule 13(2) (O. Reg. 232/15), I called Mr. Robinson to give evidence as no party intended to call him. Mr. Robinson was qualified to give expert opinion evidence as an engineer. He has completed projects initiated by petition under section 4 of the Drainage Act and for improvements under section 78 of the Drainage Act. In the past 10 years he has authored between 40 and 50 engineer's reports under the Drainage Act. He is a seasoned professional engineer with particular expertise and experience under the Drainage Act.
41Mr. Robinson was the only witness qualified to give expert opinion evidence at the trial.
42Mr. Robinson reviewed a chronology of events leading up to the Engineer's Report as well as the construction of the project from retainer in May of 2004 to the issuance of a certificate of completion of the project in December 2012.
43Mr. Robinson was asked about his letter dated June 28, 2013 in which he confirmed the adequacy of the Bruce Crossing to accommodate the design flows and in which he gave it as his opinion that any extension of the Bruce Crossing culvert beyond the 12 metre length provided for in the Engineer's Report would be a "Special Benefit" to the land owner and as such the full cost would be borne by the landowner. He confirmed that this was and continued to be his opinion.
44He explained that what was provided by the Engineer's Report for the Bruce Crossing was comparable to what had been provided for the other 15 farm crossing. In his opinion it was fair to assess those costs to the Drain. If a landowner wanted more than what was provided to everyone else along the Drain, that landowner should be required to pay for the extra.
45Mr. Robinson also gave it as his opinion that the projects proposed by Mr. Guest in his May 23, 2013 report to the Township Treasurer did not qualify as maintenance and repair for the purposes of section 74 of the Drainage Act. In Mr. Robinson's opinion what was proposed was an improvement which should have been undertaken with the process and notice required by section 78 of the Drainage Act.
46Mr. Robinson was asked about the improvements which might be undertaken without an engineers' report under section 77 of the Drainage Act. Mr. Robinson pointed out that there was a $4,500 limit to the amount which might be spent under that section so it has no application in this case where Mr. Guest's low estimate was $24,500 and the Bruce Crossing improvement project actually cost almost $50,000.
47Mr. Robinson also confirmed on cross-examination that, to his recollection, Mr. Bruce was the only one of the 16 farm crossings, to complain about his farm crossing.
48Debra McKinstry, the Township Chief Administrative Officer, then gave evidence. She has been employed by the Township for 25 years. She was the Township Clerk from January 2006 until January 2103 when she was appointed the Township's Chief Administrative Officer. Her evidence was a review of the history of the Drain from the time of the Engineer's Report to the completion of that project in 2012. Much of the information had already been provide in detail in her affidavit supporting the Township's application at the outset.
49As would be expected of a municipal clerk and CAO, Ms. McKinstry had a general overview knowledge of what occurred and a particular knowledge of Council's involvement. For example Mr. Bruce's communication channel with the Township during and after 2013 was the Township's Treasurer, Richard Bennett, as well as Mr. Guest representing the Township's drainage superintendent. While she was aware of the issues being raised by Mr. Bruce, she did not attend in the field nor did she deal with Mr. Bruce directly. She left that to Mr. Bennett and Mr. Guest.
50She confirmed that at the time of the July 15, 2013 meeting of Council sitting as Committee of the Whole, both Mr. Guest's May 23, 2013 report to the Treasurer and Mr. Robinson's June 28, 2013 letter were available to Council. She advised that Mr. Guest made a presentation and recommended in favour of one of his proposals. She advised that there was no discussion of "improvement" as opposed to "maintenance and repair"; there was no discussion of assessment for special benefit; there was no discussion of appointing an engineer under section 78 of the Drainage Act. She reflected that some members of Council have had previous experience with Drainage Act issues and would be generally aware but that Council tends to rely upon staff recommendations. In that spirit, she believes, Council adopted by resolution the least expensive solution which would satisfy Mr. Bruce.
51She confirmed that the change of contractors from Frank Ault Excavating to Robert Nash Excavating in 2014 was because Mr. Bruce was not satisfied with the work done by Frank Ault Excavating in December 2013. She also confirmed that the Bruce farm was not assessed any part of the cost of the improvement of the Bruce Crossing under By-law No. 2015-68.
52The next witness was James Guest. He represented Greer Galloway Group Inc. as drainage superintendent from the time of appointment in March 2012 until he became the Township's Road Superintendent in April 2016. As mentioned above, Mr. Guest has drainage superintendent credentials from OMFRA and is a Certified Engineering Technician (CET). He has 35 years of experience; during 9 of those years he performed the duties of drainage superintendent. Mr. Guest is not an engineer. The Township did not ask that he be qualified to give expert opinion evidence.
53Mr. Guest dealt with Mr. Bruce in connection with complaints about the Bruce Crossing beginning in the Spring of 2013. Mr. Guest reported that Mr. Bruce complained of trouble accessing the crossing with his tractor and trailers. Mr. Guest also showed photographs he had taken in April 2013 showing erosion upstream and downstream from the Bruce Crossing. He explained that the original design from the Engineer's Report should have worked but it didn't.
54Mr. Guest gave evidence that he and the Township Treasurer concluded that what he was proposing qualified as maintenance and repair which could be undertaken without an engineer's report under section 74 of the Drainage Act. He testified that he had come to that conclusion after having discussed it with unidentified drainage superintendents, an unidentified engineer, and a Drainage Coordinator with OMAFRA. It is to be noted that the unidentified engineer was not called to give opinion evidence in support of Mr. Guest's conclusion. In his evidence, Mr. Guest was clear that he remains of the view that the work done was maintenance and repair notwithstanding that the Township was unable to identify an engineer with experience under the Drainage Act who would agree with him.
55In his evidence Mr. Guest said that Mr. Robinson's June 28, 2013 letter, the one that reaffirmed the design criteria for the Drain and spoke of special benefit assessment, did not specifically refer to the need for an engineer's report and that such a thing had never occurred to him. He reported that, at the time of the July 15, 2013 Council meeting sitting as Committee of the Whole, there was a good discussion of the alternative remedial projects he proposed but no discussion of the different requirements under section 74 (maintenance and repair without an engineer's report) and section 78 (improvement with an engineer's report) of the Drainage Act. In Mr. Guest's opinion no one believed an engineer's report was required. Council simply accepted his recommendation as the most cost effective solution which was satisfactory to Mr. Bruce.
56Mr. Guest dismissed Mr. Robinson's suggestion that the costs be assessed as special benefit because, as Mr. Guest asserted in his evidence, the Drain would benefit from reduced future major maintenance costs.
57Mr. Guest was asked by me if he had ever known of an assessment for special benefit pursuant to section 24 of the Drainage Act otherwise than under a report prepared by an engineer. He replied that, on at least on occasion, he, as a drainage superintendent, had authorized a special benefit assessment when he felt it was appropriate. The circumstances of that one occasion were not pursued but a drainage superintendent does not have that authority under section 24.
58Mr. Robert Carmichael gave evidence next but before reviewing that evidence, I will speak of Mr. Bruce's involvement.
59Mr. and Mrs. Bruce were in attendance throughout the trial. They had legal representation at the several pre-hearing conferences. Their legal counsel advised the Court that, given the amounts in issue, the cost of legal representation for what could have been a three day trial were not warranted.
60At the outset of the trial, I asked the Bruces if either one of them intended to give evidence. They said they did not. At one point, Mr. Bruce seemed to change his mind. He was given the opportunity to give his evidence following the Township's witnesses. He declined the opportunity.
61I now return to the evidence of Mr. Robert Carmichael. He advised that he is a drainage contractor with 25 years of experience. In the course of his work he has had occasion to work on the south part of the Bruce farm so had used the Bruce Crossing to access the south field. He was operating a large 4960 John Deere tractor equipped with dual axles hauling tile drainage equipment, larger than anything Mr. Bruce uses. Mr. Carmichael had no trouble getting across the Bruce Crossing before the improvements made at the end of 2013 and early 2014.
62As for the erosion rational advanced by Mr. Guest, in Mr. Carmichael's experience a couple of loads of granular would have cured the problem. It certainly did not justify a $50,000 expense.
63Mr. Carmichael's property is at the top of the watershed. His assessment under By-law No. 2015-68 is $4,400. In his view this is inappropriate considering that Mr. Bruce is receiving the benefit of the $50,000 improvement to the Bruce Crossing yet Mr. Bruce is paying nothing under By-law No. 2015-68. In Mr. Carmichael's view Mr. Bruce should learn to handle his equipment better in order to navigate a farm crossing of standard length.
64Mr. Moulton was in attendance throughout. He chose not to give any evidence.
65Mr. Leroy, counsel for the Township, did not call reply evidence.
66In his submissions on behalf of the Township, Mr. Leroy conceded, as the Township had since January 2018, that the work done on the Bruce Crossing in late 2013 and early 2014 (the "Bruce Crossing Improvement") did not qualify as maintenance and repair under section 74 of the Drainage Act and should have been undertaking with an engineer's report under section 78 of the Drainage Act. He went on to make submission about how the cost of the Bruce Crossing Improvement should be paid.
67Before summarizing the Township's submissions, let me commend the Township for conceding this positon clearly and as early in the process as it became apparent that the original position about maintenance and repair could not be defended successfully. In the same vein, the Township is to be commended for not insisting upon the restoration of the Drain across the Carmichael farm so long was the relocated culvert and the realigned drain were reviewed and approved by a drainage engineer and formally incorporated into the Drain.
68Mr. Leroy's submission about the allocation of the cost of the Bruce Crossing Improvement was that, even though the work was undertaken without legal authority, the costs incurred should be paid by those who benefit from it.
69Mr. Leroy referred to the case of Niagara Falls v Overmeyer, 1997 ONDR 1. This is a decision issued by Referee O'Brien on January 16, 1997. The City of Niagara Falls petitioned, as the road authority, for a drain. The Drainage Act process proceeded to a first and second reading of a provisional by-law adopting the engineer's report. There was an assessment appeal to the Tribunal; the Tribunal's decision was not well received by the City or by many of the land owners involved. The City did not give third reading to the provisional by-law but rather enacted a separate construction by-law under which the work contemplated by the engineer's report was undertaken. The City then applied to the Referee to recover the costs of the work from the landowners on the drain and to revise the Tribunal assessment decision.
70The Referee first observed that the construction by-law was not authorized by the Drainage Act and accordingly the City of Niagara Falls could not treat the work done as work done pursuant to the Drainage Act. Consequently the City was unable to collect assessments as outlined in the engineer's drainage report pursuant to the construction by-law.
71He then goes on to say that the issue before him was whether corrective action can be taken to cure the irregularities and ensure that those who received the benefits from the work can be fairly assessed in the circumstances where their rights and privileges, as granted by the Drainage Act, can be preserved. He observes that it would be manifestly unfair that the burden of the cost of this work fall upon the general taxpayers of the municipality, while those parties who live within the watershed receive a windfall benefit.
72Referee O'Brien then proceeds to grant much of the relief sought by the City.
73On the basis of this case, while recognizing that there was no legal authority to support By-law No. 2015-68, Mr. Leroy submitted that Mr. Bruce, as the principle beneficiary of the Bruce Crossing Improvement, should be responsible for most, if not all of the cost as a special benefit assessment. Mr. Leroy submitted that, because there will be some reduction in future erosion related maintenance and repair of the Drain, a small portion of the cost, perhaps 10%, should be paid by the landowners upstream from the Bruce Crossing with Mr. Bruce paying the rest as a special benefit assessment.
74Mr. Leroy then turned his attention to subsections 118(1) and 118(2) of the Drainage Act which provide as follows:
118(1) Except as provided by subsections (2), (3) and (4), all damages and costs payable by a municipality and arising from proceedings taken under this Act shall be levied upon the lands and roads in any way assessed for the drainage works for construction, improvement, maintenance or repair in such manner as the referee or court may determine, and may be assessed, levied and collected in the same manner as rates assessed, levied and collected for maintenance under this Act.
118(2) Where such damages and costs become payable owing to any improper action, neglect, default or omission on the part of the council of any municipality or of any of its officers or employees in the construction, improvement, maintenance or repair of the drainage works or in carrying out the provisions of this Act, the referee or court may direct that the whole or any part of such damages and costs shall be borne by the municipality and be payable out of the general funds thereof.
75In the normal course under subsection 118(1), any damages and costs payable by the Township would be assessed to the Drain in accordance with the assessment schedule in the Engineer's Report. Subsection 118(2) contemplates that, in the event the municipal has not proceeded properly, the Referee may make an order that whatever amounts are payable by the municipality shall be paid out of general funds rather than assessed to the Drain.
76Mr. Leroy submitted that, if some of the Bruce Crossing Improvement cost is to be assigned to the Township and is ordered to be paid out of its general funds, no more than 40% of the cost should be so allocated. In this connection Mr. Leroy relied upon the case of Authier v Romney Township, 1996 ONDR 1, a decision of Referee O'Brien issued October 21, 1996. This is a case where Romney Township undertook work on a drain as maintenance and repair. Referee O'Brien determined that it did not qualify as such but was something which should have been processed as an improvement under section 78 of the Drainage Act. When authorizing the work, the Township had been cautioned by its drainage engineer that, if the work were undertaken as maintenance, there may be legal challenges to the authority of the municipality; the Township proceeded notwithstanding.
77The Referee in his decision speaks of how proceeding as maintenance and repair deprives owners of the necessary information, input and rights of appeal which are afforded in projects pursuant to section 78 of the Drainage Act. He observes that Council has a unique obligation in maintaining drainage works because it is entrusted to administer funds of both the assessed owners and of the Provincial Government as a fiduciary.
78Having made these observations and comments the Referee ordered that the assessments on private lands be reduced by 40% and that the amount of such 40% reduction be paid out of the general revenues of the Township of Romney.
79Mr. Leroy submits that, in this case the Township of Edwardsburgh/Cardinal made a mistake but did so despite due diligence and in good faith unlike the Township of Romney which went into the drainage works despite the caution from their drainage engineer that doing so could result in legal challenges. It was Mr. Leroy's submission that 40% is the maximum exposure which the Township should have and that, because of his client's good faith, it should be much less.
80Mr. Shawn Carmichael submitted that no part of the cost of the Bruce Crossing Improvement should be charged to the Drain. It is his submission that the allocation of those costs should be 50% to Mr. Bruce and 50% to the Township to be paid out of general funds.
81Mr. Moulton submitted that the Township should have told Mr. Bruce: "no" and required him to go through the section 78 process to get what Mr. Bruce wanted. In Mr. Moulton's submission more than 50% of the cost should be charged to the Township to be paid out of general funds.
82In this context the question for the Court is how should responsibility be assigned for the $49,028.09 cost incurred between December 13, 2013 and September 8, 2014 on the Bruce Crossing Improvement? The candidates for payment are Mr. Bruce, the Township to be paid out of its general funds, and the Drain to be apportioned in accordance with the assessment schedule attached to Engineer's Report.
83As in the Niagara Falls v Overmeyer case, the Council resolutions authorizing the Bruce Crossing Improvement were not authorized by the Drainage Act with the result that the Township cannot treat the work done as work done pursuant to the Drainage Act. Consequently, the Township is unable to collect assessments as set out in By-law No. 2015-68 as it is not authorized by the Drainage Act; quite simply By-law No. 2015-68 is invalid.
84Absent a different order by the Referee, the result of the invalidity of By-law No. 2015-68 is that the $49,028.09 would be paid out of the Township's general funds. However, I find the reasons of Referee O'Brien in the Niagara Falls v Overmeyer case to be persuasive. It would be manifestly unfair for the burden of the cost of drainage works to fall upon the general taxpayer of the municipality while those who benefit from the work receive a windfall benefit.
85In this case the windfall benefit is to Mr. Bruce who has a farm crossing which is considerably better than any of the other farm crossings of the Drain. Had the improvement of the Bruce Crossing been processed with an engineer's report under section 78 of the Drainage Act, it is very likely that the entire cost of the work would have been assessed to Mr. Bruce as a special benefit assessment. In this respect I accept the expert evidence of Andrew Robinson, P. Eng.. He was the only witness qualified to give expert opinion evidence and I found his evidence to be reliable and creditable. The work done on the Bruce Crossing in 2010 and 2011 pursuant to the Engineer's Report was comparable to what was provided by way of farm crossing along the Drain; the costs of those farm crossing were all assessed to the Drain. If a land owner wants anything beyond that, Mr. Robinson said it should be regarded as a special benefit to be paid by the land owner.
86Much evidence was given by Mr. Guest about erosion problems around the Bruce Crossing which he observed in April of 2013 while investigating Mr. Bruce's complaints. Mr. Leroy relied upon that evidence to submit that the Drain upstream of the Bruce Crossing would benefit to some degree by the saving of future maintenance and repair costs which would be reduced because of the Bruce Crossing Improvement. It is my view and finding that the erosion issue was a minor factor in the decision to give Mr. Bruce what he wanted. Mr. Guest's motivation and purpose was to placate Mr. Bruce. Mr. Guest got to the heart of it when he gave evidence that the Township Council took his recommendation on July 15, 2013 to undertake the most cost effective option that was satisfactory to Mr. Bruce.
87Any benefit to the Drain as a whole is negligible as compared to the principal benefit which accrued to and was intended to accrue to Mr. Bruce. It is my decision that no part of the $49,028.09 is to be borne by the Drain. This is consistent with the expert opinion of Mr. Robinson that the entire amount should be paid by Mr. Bruce as a special benefit assessment. It is also supported by the evidence of Robert Carmichael who testified, as an experienced drainage contractor, that the little erosion identified could have be cured with routine clean out and a very few loads of aggregate rip-rap.
88Though Mr. Bruce was a party to the process, and was in attendance throughout the trial, he offered no reason why he should not be responsible for the $49,028.09 cost of the Bruce Crossing Improvement. It is not for the Court to speculate about what Mr. Bruce's case might have been had it been made.
89Both Mr. Shawn Carmichael and Mr. Molton submitted that the Township should pay out of general municipal funds 50% or more of the $49,028.09 cost of the Bruce Crossing Improvement. Their submissions are a reflection of their dissatisfaction with the manner in which the Township handled the Bruce complaints after 2012. There was no suggestion that the Township as a whole would benefit from the Bruce Crossing Improvement. While I have sympathy with their concerns about the Township's conduct, in my view, those concerns go to the issue of the Township's expenses of this proceeding in the Court of the Drainage Referee rather than the assignment of responsibility for the $49,028.09 incurred for the Bruce Crossing Improvement.
90In connection with the Township's conduct, I am concerned about the Township's dealings with the Mr. Bruce; there was little or no regard for the interests of the assessed owners upstream on the Drain from the Bruce Crossing. Mr. Guest, as drainage superintendent, proposed a project which would satisfy Mr. Bruce without regard for who would pay. Without notice to any of the land owners on the Drain, when the proposal was presented to Council by Mr. Guest, it was on the basis that those upstream from the Bruce Crossing would pay the cost of the improvement and that no part of the cost would be assessed to Mr. Bruce. Only Mr. Bruce was consulted and he was the only land owner in attendance. Mr. Guest disagreed with the recommendation from Mr. Robinson, the author of the Engineer's Report, about special benefit assessment but more importantly, he did not understand that a special benefit assessment implied a process under section 78 of the Drainage Act. Mr. Guest gave evidence that, at the July 15 2013 meeting of Council, sitting as Committee of the Whole, no one gave any thought to engineer's report. The Drainage Superintendent should have given it thought and raised it as an issue for Council's consideration. He should have had a better appreciation of the scheme of the Drainage Act and that the effect of proceeding as maintenance and repair under section 74 of the Drainage Act deprived the affected owners of the information, an opportunity for input and rights of appeal which are afforded in projects pursuant to section 78 of the Drainage Act.
91In the same vein, when Mr. Bruce was dissatisfied with the work of the contractor in December of 2013, without notice to those who were to pay, another contractor was put on the job in 2014 resulting in a doubling of the cost as originally estimated.
92There was a similar misunderstanding of the Drainage Act when it came to the alterations made to the Drain by the Carmichaels. As mentioned this involved changing the location of a culvert as well as the location of a portion of the Drain. The drainage superintendent inspected the changes, wrote a letter about deficiencies but took no steps to incorporate formally the changes into the Drain via engineer's report under section 78 of the Drainage Act.
93The drainage superintendent viewed these two things as relatively small projects which did not warrant the cost of an engineer. What was lost on the drainage superintendent was that this denied affected landowners of a chance to comment and provide information as well as of rights of appeal pursuant to section 78 of the Drainage Act. The drainage superintendent did not appreciate that, in addition to the actual engineering work, an engineer brings the obligations of section 11 of the Drainage Act to proceed independently and to balance the often competing interest of all who are affected. This was implicit in Mr. Robinson's June 28, 2013 letter to the Township which was ignored by the Township. As was said by me when ordering, in February 2018, the Township to initiate Section 78 proceedings, it is acknowledged that the section 78 process under the Drainage Act is burdensome but that is the nature of the legislation which is a very powerful tool to be used carefully, judiciously and with due process having regard for all of the stakeholders assessed to the Drain.
94These things came to a head when the Carmichael's went to the Tribunal and the Tribunal referred the issues to the Court of the Drainage Referee.
95This proceeding in the Court of the Drainage Referee would have been unnecessary had the Township proceeded in the first instance under section 78 of the Drainage Act with respect to both the Bruce Crossing Improvement and the incorporation into the Drain of the Carmichael alterations. There may have been appeals to the Tribunal but not to the Referee.
96For these reasons, I am satisfied that the Township's expenses of this proceeding before the Referee should not be borne by the Drain but should be payable out of the Township's general funds.
97No submissions have been made as to costs. If the parties are unable to agree, each party may make brief written submissions to the presiding Acting Drainage Referee within 30 days.
98As previously mentioned, the expenses of the Township arising from this proceeding shall be payable out of the general funds of the Township and shall not be levied upon the lands assessed for the maintenance and repair of the Drain. For this purpose the expenses of the Township shall include any costs payable by the Township net after deducting any costs payable to the Township.
Dated at London May, 21, 2018
Andrew C. Wright Acting Drainage Referee