Kittel v. Wilmot (Township), 2025 ONDR 8

ONTARIO SUPERIOR COURT OF JUSTICE

IN THE COURT OF THE DRAINAGE REFEREE

CITATION: Kittel v Wilmot (Township), 2025 ONDR 8

DATE OF DECISION: 2025-09-05

Court File No.: CV-23-00001662-0000 (Kitchener)

B E T W E E N:

CORY KITTEL

Applicant

• and -

THE CORPORATION OF THE TOWNSHIP OF WILMOT and JANANNA CORP.

Respondents

ACTING DRAINAGE REFEREE ANDREW C. WRIGHT

ISSUED ON FRIDAY, THE 5^th DAY OF SEPTEMBER 2025

ORDER

On May 27, 2025 the Court of the Drainage Referee issued its decision now published as Kittel v Wilmot (Township), 2025 ONDR 5 allowing the application and ordered that, “If the parties are unable to agree, each party may make brief written submissions to the presiding Acting Drainage Referee within 30 days.”; and having received submissions of counsel for the applicant, the Township and the representative of Jananna Corp., for the reasons, that follow:

THIS COURT ORDERS that

1. Costs are awarded to the applicant in the amount of 12,500.00. This is an “all-in” amount, including fees and disbursements.

2. The costs award is made against both the Township and Jananna Corp. jointly.

Dated at London this 5^th day of September 2025.

Andrew C. Wright Acting Drainage Referee

REASONS

Definitions

1. For the purposes of these reasons, unless the context requires a different meaning:

(a) the “Act”, sometimes referred to as the “Drainage Act”, means the Drainage Act, R.S.O. 1990 Chapter D.17, as amended.

(b) the “Drainage Superintendent” means K. Smart Associates Limited and John Kuntze P.Eng. President, in their capacity as Drainage Superintendent, appointed in accordance with the Act by by-law of the Township.

(c) the “Engineer” means both Stephen Brickman, P.Eng., and Headway Engineering Professional Corporation, carrying on business as “Headway Engineering”, together.

(d) the “Engineer’s Report” means the Engineer’s Report on the “Bamberg Creek, Jananna, and Koch-Leis Municipal Drains 2023” dated April 28, 2023 issued by the Engineer and signed by Stephen Brickman, P.Eng., including plan and profile. The Engineer’s Report is Exhibit No.: 2.

(e) the “Petition” means the petition signed by Walter Krupnik as President of Jananna Corp. on April 26, 2021, that initiated the process under the Act, which has resulted in the Engineer’s Report. The Petition is Exhibit No.: 1.

(f) the “Statutory Powers Procedure Act” means the Statutory Powers Procedure Act, R.S.O. 1990, Chapter S.22, as amended.

(g) the “Referee Rules” means Regulation 232/15, being the Rules of Practice and Procedure in Proceedings Before The Referee.

(h) the “Rules of Civil Procedure” means R.R.O. 1990, Reg. 194, being the Rules of Civil Procedure under the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended.

(i) the “Township” means The Corporation of the Township of Wilmot, the respondent.

Parties and Representation

2. The applicant is represented by Samuel Kirwin, a lawyer in the Law Office of Samuel Kirwin Professional Corporation.

3. The Township was represented by Paul Courey, a lawyer in the office of Courey Law Professional Corporation until March 12, 2024 when he was replaced by Thomas Sanderson, a lawyer in the Waterloo office of Miller Thomson LLP.

4. Jananna Corp. is self-represented by its president, Walter Krupnik.

Applicant’s Bill of Costs

5. The successful party is the applicant. He has submitted a Bill of Costs seeking legal fees in the amount of $5,326.20, being at a Partial Indemnity Rate (60% of legal fees) until a settlement offer that was made to the Township on April 23, 2025, plus legal fees in the amount of $6,534.00 being at a Substantial Indemnity Rate (90% of legal fees) from that settlement offer date onwards.

6. In addition, the applicant seeks to recover disbursements of $8,441.17. Of this, $7,219.50 is for the services of the engineer, Brian Verspagen, P.Eng., for his Expert Report and attendance to give evidence.

7. The legal fees and disbursements are supported by receipts and docket entry descriptions of the legal work done and when it was done.

8. The applicant’s submission seeks costs from both the Township and Jananna Corp. without proposing any allocation between them.

Settlement Offer

9. The applicant’s settlement offer, referred to in the applicant’s submissions, was made to the Township. It involved the applicant’s offer to install a private drain on the Kittel Farm, at the applicant’s expense, which was said to be available to serve as a drainage outlet for the Jananna Corp. property. The offer was not accepted.

10. I commend the applicant for making this offer. It is akin to what the Drainage Superintendent had proposed a year or so before the Petition was submitted. It was a bona fide effort to find a solution for Janana Corp. and avoid a hearing in the Court of the Drainage Referee. Local problem-solving is always preferable to something imposed from outside.

11. Be that as it may, the costs submission made by the applicant is that the presiding Referee should have regard for Rule 49 of the Rules of Civil Procedure and award costs at a Substantial Indemnity Rate after the making of the offer.

12. In a nutshell, Rule 49 provides that, if a party has made a Rule 49 offer, and it is not accepted, and the party obtains a result at trial that is as favourable or better for the offeror than the terms of its offer, then the offering party will receive more favourable costs treatment than they otherwise would. The suggestion is that, because the applicant was successful, and, therefore, there is no municipal drain outlet, the offered private drain on the Kittel Farm would have been better than nothing and hence a more favourable result.

13. Several comments are warranted.

14. The Rules of Civil Procedure do not govern proceedings in the Court of the Drainage Referee. Section 17 of the Referee Rules provides that the presiding Referee may have regard for the Rules of Civil Procedure when determining a procedural matter not expressly provided for in the Referee Rules. I take that to mean that the Referee need not, but has the discretion to look to the Rules of Civil Procedure for guidance with respect to matters not addressed by the Referee Rules.

15. The evidence of the Engineer and the Drainage Superintendent was to the effect that such a private drain would not work effectively unless Bamberg Creek were deepened as proposed by the Engineer’s Report. The applicant’s evidence was that his drainage contractor thought such a private drain could be made to work. Whether such a private drain had sufficient fall to flow by gravity to Bamberg Creek, such a private drain on the Kittel Farm would not provide a legal outlet upon which Jananna Corp. could rely for systematic tile drainage of the acre or so of depressional area on the 107-acre Jananna Farm. This is the same position in which Jananna Corp. finds itself in the absence of a municipal drain; it is not in a more favourable or better position than offered by the applicant.

16. I am not satisfied that the Rule 49 principle applies or should be applied.

Brian Verspagen, P.Eng. Disbursement

17. As mentioned, the applicant seeks to recover disbursements of $8,441.17, of which $7,219.50 is for the services of the engineer, Brian Verspagen, P.Eng.

18. Mr. Verspagen identified himself as a qualified civil engineer but not a drainage engineer. Mr. Verspagen’s Expert Report was limited by its terms to matters of design and offered no opinion on the central issues of Petition validity or “area requiring drainage”.

19. Mr. Verspagen’s relevant evidence did not come from the Expert Report, but rather when he was asked to provide evidence in response to Mr. Brickman’s testimony about the requirements to drain the low-lying saucer on the applicant’s lands. This evidence was outside of the scope and content of the Expert Report.

20. The Township’s submission is that, through no fault of Mr. Verspagen – who proceeded professionally and as instructed – the Expert Report itself did not further the inquiry into the settled Issues List. In the Township’s submission, the applicant is responsible for his choice to commission and introduce an Expert Report that did not address the issue of petition validity, including an opinion about an “area requiring drainage”. As a result, the Township submits that the applicant should be responsible for the majority of Mr. Verspagen’s costs that relate to the preparation of and his evidence in connection with his Expert Report.

21. I find the Township’s submissions to be persuasive. The Verspagen Expert Report made a minimal contribution to the questions identified in the Issues List for the hearing. I don’t fault Mr. Verspagen, who proceeded professionally and as instructed, but it was the applicant who gave those instructions and who should be responsible for the bulk of the cost thereof.

Rule 57 of the Rules of Civil Procedure Factors

22. As previously mentioned, the Rules of Civil Procedure do not govern proceedings in the Court of the Drainage Referee. Section 17 of the Referee Rules provides that the presiding Referee may have regard for the Rules of Civil Procedure when determining a procedural matter not expressly provided for in the Referee Rules. I take that to mean that the Referee need not, but has the discretion to look to the Rules of Civil Procedure for guidance with respect to matters not addressed by the Referee Rules.

23. Rule 57 of the Rules of Civil Procedure identifies a number of factors to be considered when awarding costs, including the complexity of the case, the importance of the issues at stake, and the conduct of the parties.

24. After some initial troublesome conduct by the Township and the Engineer regarding document production, the parties conducted themselves in good faith and with conscientiousness. Inevitably, each party will consider some elements of the other party’s evidence to be repetitious, extraneous and/or unnecessary. I am satisfied that, although the applicant occasionally stretched the boundaries, the evidence presented by the applicant, the Township, and Jananna Corp. was reasonably and efficiently presented.

25. The issues were somewhat complex. The evidence was voluminous, and an understanding of the expert opinion witnesses required a grasp of some of the intricate workings of and jurisprudence around the Drainage Act. But this case was not significantly more demanding than many matters which come before the Court of the Drainage Referee when technical engineering details and contending expert opinions are common.

26. As to the importance of the issues and the resulting decision, the Township submits that the decision reconciles existing case law under the Act, taking into account both parties’ engagement with the jurisprudence in good faith. The decision is a clarification of the role of the saucer concept after M&M Farms v. Kingsville (Town), which “pushed the limit of what can be achieved” under the existing Drainage Act. The Township submits that the Decision was the first direct clarification of the impact of M&M Farms on the role of the saucer concept in modern, outlet-related petitions. In that regard, the Township agrees with the applicant that the decision serves as an “interpretive and educational tool” that will guide future proceedings and steps under the Act. The Township submits that this is a limiting factor on the amount of costs to be awarded between the parties.

27. While this case does not have the status of a public interest “test case”, such as to deprive the successful, private citizen applicant of costs, there is merit in the Township’s submissions.

Subsection 10(4), Section 43 and Subsection 118(2) of the Act

28. Subsection 10(4) of the Act provides as follows:

10(4) If at the end of the meeting the petition does not contain a sufficient number of names to comply with section 4, the original petitioners are chargeable in equal shares with and liable to the municipality for the expenses incurred by the municipality in connection with the petition and preliminary report, 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 upon 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.

29. In this case, there is only one original petitioner, and that is Jananna Corp. In the circumstances, Jananna Corp. is chargeable with and liable to the Township for the expenses incurred by the municipality in connection with the Petition. In the absence of an Order of the Referee to the contrary, that would include the Township’s expenses in connection with the application before the Court of the Drainage Referee, including costs payable by the Township to the applicant.

30. In the same vein, to the same effect, section 43 of the Act provides

43 If, after striking out the names of the persons withdrawing, the names remaining on the petition, including the names, if any, added as provided by section 42 do not comply with section 4, the original petitioners on their respective assessments in the report are chargeable proportionately with and liable to the municipality for the expenses incurred by the municipality in connection with the petition and report and the sum with which each of such petitioners is chargeable shall be entered upon 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.

31. In cases where a petitioner is the successful party and is awarded costs payable by the municipality, it is usual to Order that no part of such costs and expenses of the municipality is to be charged under subsection 10(4) or section 43 of the Act to the petitioner. It would be a subversion of the costs award to a petitioner if the municipality were allowed to charge the amount back to the petitioner under subsection 10(4) or section 43 of the Act.

32. Similarly, in a case where an Order is made under subsection 118(2) of the Act, that the municipality is to bear the whole or any part of damages and costs out of the general funds of the municipality, if there is a petitioner, it is usual for there to be an ancillary Order that no part of the amount chargeable to the general funds of the municipality is to be charged under subsection 10(4) or section 43 of the Act to the petitioner. Subsection 118(2) of the Act depends upon a finding that there has been some improper action, neglect, default or omission on the part of the municipality, and it would defeat the purpose of subsection 118(2) if the amounts to be paid out of general funds are recoverable from a petitioner. This would be applicable in a case where there is no Drainage Act project; otherwise, section 118 of the Act would govern.

33. Examples of these sorts of Orders to the contrary are found in paragraphs 5., 6., 7. and 8. of the Order issued in the case of Melidy v Holland Marsh Drainage System Joint Municipal Service Board, 2023 ONDR 6.

34. In this case, the Township and Jananna Corp. have agreed between themselves that, in the event of a cost award to the applicant, Jananna Corp. will pay 15% and the Township 85%, presumably out of the Township's general funds. Subsection 118(2) gives the Referee the authority to order payment out of the municipality’s general funds coupled with an ancillary Order that such payment not be charged to the petitioner under subsection 10(4) or section 43 of the Act. To understand the context, both subsections 118(1) and 118(2) should be read together. They are 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.

35. If there is no project, because there is a failed petition, to which to charge the costs of a proceeding under the Act pursuant to subsection 118(1) of the Act, then subsection 10(4) and/or section 43 of the Act come into play, subject to a contrary Order under subsection 118(2) of the Act.

36. As indicated above, the application of subsection 118(2) depends upon a finding that there has been some improper action, neglect, default or omission on the part of the municipality. In my assessment, there has been no improper action, neglect, default or omission on the part of the council of any municipality or of any of its officers or employees in carrying out the provisions of this Act in this case. I do not, therefore, have an evidentiary basis for making an Order under subsection 118(2) of the Act. I am not, therefore, in a position to order an endorsement of the agreement between the Township and Jananna Corp. That said, I will not interfere with any private arrangement they may make, so I will make the costs award order against both jointly.

Costs Award

37. Neither the Township nor Jananna Corp. takes issue with the hourly rates charged by counsel for the applicant or the time spent by him.

38. Because I am satisfied that the settlement offer Rule 49 principle does not or should not apply in this case, costs will thus be based on the application of a Partial Indemnity Rate. Costs will also be limited, having regard for the importance of the issues and the resulting decision as submitted by the Township as mentioned in paragraph 23 above.

39. For the reasons outlined in paragraph 18 above, the applicant is not entitled to recover the entire $7,219.50 paid for the services of Engineer Brian Verspagen, P.Eng.

40. Taking all of these factors into consideration, costs are awarded to the applicant in the amount of 12,500.00. This is an “all-in” amount, including fees and disbursements. The costs award is made against both the Township and Jananna Corp. jointly.

Dated at London this September 5, 2025.

Andrew C. Wright Acting Drainage Referee