COURT FILE NO.: C-867-11
DATE: 2012-04-13
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1631370 Ontario Inc.
Plaintiff
– and –
805352 Ontario Inc.
Defendant
G. Edward Oldfield, for the Plaintiff
Gary L. Petker, for the Defendant
HEARD: March 16, 2012
The Honourable Mr. Justice D. A. Broad
[1] The Plaintiff is the owner of a farm property (the “Plaintiff’s farm”) which it leased to a company carrying on business as “Hybrid Turkeys” (“Hybrid” or the “tenant”) for the purpose of raising what are known as Great Grandparent (GGP) stock turkeys. GGP turkeys are three generations higher than commercial turkeys generally sold to the public. They are described as a rare and vital breeding stock.
[2] The Defendant purchased a neighbouring farm known as the “Bright Farm” (the “Defendant’s farm” or the “Bright farm”) in April 2011. The Defendant proposed to erect a barn on its property for the purpose of raising commercial breeder-boiler hens.
[3] When Hybrid learned that the Defendant planned to erect a chicken operation, it advised the principals of the Plaintiff that it considered it unacceptable to have a poultry operation in such close proximity to its turkey operation, citing the risk of airborne pathogens emanating from the Defendant's operation infecting its extremely important and valuable GGP genetic stock. Hybrid advised the Plaintiff that unless the Defendant's plans were stopped it intended to exercise its option under the lease to bring the tenancy to an end. Under the terms of the lease, either party could terminate the tenancy, following the initial three year term, on nine month’s notice prior to the expiry of each one-year renewal term.
[4] Faced with the threat of its tenant terminating its tenancy, the Plaintiff commenced this action seeking damages, and an interlocutory and permanent injunction restraining the Defendant from constructing a poultry barn on its property. The Plaintiff has not, as yet, brought a motion for an interlocutory injunction. The Plaintiff alleges in the Statement of Claim that the decision of the Defendant to commence construction of a poultry barn was a wrongful act. The Plaintiff relies on the law of nuisance. In the alternative, it alleges that the action of the Defendant to construct a barn on its farm was negligent and not in accordance with the appropriate standard of care which poultry farmers should exhibit for each other. The Plaintiff also relies on the tort of intentional interference with economic relations.
[5] The Defendant has defended the action and has brought this motion for summary judgment seeking dismissal of the action.
The Issue
Can the court have a full appreciation of the evidence and issues that is required to make a dispositive finding, by way of summary judgment, based upon the record before the court, or can this full appreciation only be achieved by way of a trial?
Should the action be dismissed on the basis that there is no issue requiring a trial, with respect to the Plaintiff’s claims?
Discussion
(i) Test for Summary Judgment
[6] The Plaintiff relies heavily, in support of its claims, and in response to the Defendant’s motion, on the expert report of Dr. Jean-Pierre Vaillancourt, described as a leading veterinarian and scientist dealing with poultry diseases. In his report, Dr. Vaillancourt concludes that the Defendant has created an unacceptable situation by proposing to erect a new barn that is too close to the existing barn of the Plaintiff. The effect of Dr. Vaillancourt's opinion is that the Defendant's barn does not conform to current agricultural practices and poses an unacceptable risk of airborne disease transmission to the turkeys housed in the Plaintiff's farm.
[7] The parties are agreed that, pursuant to the recent leading case of Combined Air Mechanical Services Inc. v. Flesch, [2011] ONCA 764, the court, on a motion for summary judgment, must ask whether the full appreciation of the evidence and the issues that is required to make dispositive findings can be achieved by way of summary judgment or whether the full appreciation can only be achieved by way of a trial. The Plaintiff argues that this case calls for multiple findings of fact on the basis of conflicting evidence, and it is therefore necessary for a trial judge to hear the evidence and to make determinations. Counsel for the Plaintiff argues that the case raises a vital issue which will affect not only these parties, but also the poultry industry generally, namely a determination of the appropriate modern standard for separation between poultry operations in order to mitigate the concern posed by airborne pathogens and the risk of diseases such as avian influenza. He submits that the complexity of the matter requires a full trial in order for the judge to have a full appreciation of the issues.
[8] The Defendant submits that the court, being now empowered to weigh the evidence, evaluate the credibility of a deponent and draw inferences from the evidence pursuant to sub-rule 20.04(2.1), should discount, or give no weight, to the expert opinion of Dr. Vaillancourt, as set forth in his report. Counsel for the Defendant argues that the report should be ruled not admissible, after being measured against the list of criteria for admissibility of expert opinion evidence, as laid down by the Supreme Court of Canada in the case of The Queen v. J.-L.J., 2000 SCC 51, [2000] 2 S.C.R. 600 (S.C.C.).
[9] Before embarking on an exercise of weighing the evidence, evaluating credibility and drawing inferences, it is useful to carry out an analysis as to whether the evidence of the Plaintiff, viewed at its highest, subject to any admissions made on cross-examination, would support a cause of action in law. If not, the action can be found to fall within the second category of cases which are amenable to summary judgement, as identified by the Court of Appeal in Combined Air, being a claim which can be shown to be without merit. In that type of case, as indicated by the Court of Appeal in Combined Air, it is not necessary to exercise the new powers conferred by sub-rule 20.04(2.1). The matter may be capable of being disposed of pursuant to sub-rule 20.04(4), which provides that “where the court is satisfied that the only genuine issue is a question of law, the court may determine the question and grant judgment accordingly.”
(ii) The Evidence
[10] The shares of the Plaintiff corporation are owned by Peter Buehlow and his spouse, Jackie Buehlow. In 2007 a new lease was executed by the Buehlows personally and by Hybrid. For the purposes of the argument, the Buehlows can be regarded as having entered into the lease personally as the agents of the Plaintiff corporation. The lease provided for an initial term of three years which expired on May 31, 2010, after which it automatically renewed for ten successive one year periods, with each party having the right to terminate the automatic renewal on nine months notice prior to the expiration of the current annual term.
[11] It is acknowledged that, in the poultry industry, biosecurity is an important consideration and, to that end, biosecurity measures were implemented by Hybrid, in order to decrease the risk of airborne pathogens moving from one barn to another. However, the lease itself did not incorporate any biosecurity protocols, and accordingly the Plaintiff, as landlord, did not covenant with Hybrid to carry out or maintain any biosecurity standards for the protection of Hybrid.
[12] The Defendant, whose principals are members of the Renkema family, acquired the Bright farm in April 2011, for a purchase price of $1,150,000.00, with plans to develop a poultry operation thereon. The total cost of developing the poultry operation is expected to be approximately $9,000,000.00. Prior to agreeing to purchase the farm, the Renkemas made enquiries with the local municipality and satisfied themselves that there were no provisions in the zoning by-laws restricting the development of the planned poultry operation, subject to compliance with the Minimum Distance Separation (MDS) rules of the Ministry of Agriculture, Food and Rural Affairs (“OMAFRA”) and the development of a nutrient management plan for OMAFRA. These requirements were subsequently successfully satisfied by the Defendant. Accordingly, there are no municipal or governmental regulatory requirements preventing the development of the Defendant’s poultry operation at the location selected by the Defendant.
[13] Prior to the acquisition of the Bright Farm by the Renkemas, the Buehlows knew that it was for sale, but did nothing to try to acquire it.
[14] The distance between the building site for the barns on the Bright farm and the barns located on the Plaintiff’s farm, and occupied by Hybrid, is estimated at 780 metres. The Renkemas did not contact the Buehlows or Hybrid to discuss their proposed development of a poultry operation.
[15] Hybrid became aware of the potential of the development of the poultry operation on the Defendant’s farm in July 2011, and being concerned about the risk of airborne pathogens emanating from the Defendant’s operation and causing disease among the Hybrid turkeys on the Plaintiff’s farm, contacted Mr. Buehlow and threatened to terminate the lease, by giving the required nine months notice, unless the Defendant’s development was stopped. Mr. Buehlow subsequently made contact with the Renkemas, and unsuccessful negotiations were undertaken regarding a possible purchase by Mr. Buehlow of the Defendant’s lands. Following the breakdown of negotiations, this action was commenced.
[16] It is acknowledged that neither the Plaintiff, nor the Buehlows, have any interest in the turkeys, which remain the property of Hybrid. The nature of the alleged damages claimed by the Plaintiff is therefore pure economic, being the potential “loss of its business relationship with Hybrid Turkeys in the event that the Defendant’s barn is constructed,” as set forth in paragraph 16 of the Statement of Claim. It is also acknowledged that Hybrid has not given notice of termination of its lease with the Plaintiff, nor has there been any damage to its flock of turkeys as a result of airborne pathogens. There have been, to date, no chickens housed in the Defendant’s barn.
[17] It was also acknowledged that neither the Plaintiff nor Hybrid published any notice to the public generally nor did either of them give notice to the Defendant specifically, that it claimed a biosecurity zone or set-back around the Plaintiff’s property.
[18] Dr. Vaillancourt, in his report, stated that:
(a) The emergence and growing importance of infectious diseases in poultry over the past three decades requires a change in paradigm in terms of disease risk mitigation, with one essential component being the development of a regional perspective to biosecurity;
(b) Primary breeding companies (such as Hybrid) must be able to adequately protect their pedigree and GGP stocks;
(c) Because there only two primary turkey breeding companies remaining in the world (one being Hybrid) it is even more essential to prevent exposing such operations to unreasonable risks;
(d) The risk posed by the Defendant’s operation represents a catastrophic situation waiting to happen, with consequences which would go well beyond Canadian borders and would negatively impact the Ontario poultry industry;
[19] Dr. Vaillancourt stated, in his report, that “very few scientific papers have been published on the appropriate distance separation between farms to substantially reduce the risk of disease transmission in poultry, swine, or dairy production. However, several epidemiological studies have shown a substantial increase in risk when this distance is less than 1000 m.” He also stated, in reference to Hybrid, that “given the high value of the GGP turkey site (financially and genetically), and assuming that the new chicken breeder site becomes operational, it will be paramount to relocate the GGP operations immediately. Such a move will be costly.”
[20] It is noteworthy that Dr. Vaillancourt did not, in his report, reference any applicable regulations, or government-mandated guidelines or standards, for the separation of farming operations to reduce the risk of disease transmission in Ontario or in Canada.
(iii) Analysis
[21] The rule in Rylands v. Fletcher was not pleaded in the Statement of Claim. Although reference was made to it in the Plaintiff’s Factum, counsel for the Plaintiff conceded in argument that it is not applicable to a case, like the present, in which no damage has occurred, but where there is only a risk of future damage.
[22] The Plaintiff relies primarily on the law of nuisance, arguing in its Factum that “the Defendant’s barn is going to cause a nuisance and that the risk of airborne pathogens is unacceptable to farmers following modern agricultural standards.”
[23] As stated by the Court of Appeal in Smith v. Inco Limited, 2011 ONCA 628 at para. 39:
“people do not live in splendid isolation from one another. One person’s lawful and reasonable use of his or her property may indirectly harm the property of another or interfere with that person’s ability to fully use and enjoy his or her property. The common law of nuisance developed as a means by which those competing interests could be addressed, and one given legal priority over the other. Under the common law of nuisance, sometimes the person whose property suffered the adverse effects is expected to tolerate those effects as the price of membership in the larger community. Sometimes, however, the party causing the adverse effect can be compelled, even if his or her conduct is lawful and reasonable, to desist from engaging in that conduct and to compensate the other party from any harm caused to that person’s property.”
[24] Accordingly, just because the Defendant’s use of its property complies with all municipal and regulatory requirements does not, by itself, resolve the issue. The determination is made, as stated in Smith v. Inco, by asking whether, in all the circumstances, the harm caused or the interference done to one person’s property by the other person’s use of his or her property is unreasonable.
[25] As confirmed in Smith v. Inco at para 43, while all nuisance is a tort against land predicated on an indirect interference with property rights, that interference may take two different forms, firstly, in the nature of “physical injury to land”, and secondly, “substantial interference with the plaintiff’s use or enjoyment of his or her land”, called an “amenity nuisance.” The courts have taken a somewhat different approach to the two types of nuisance claims. In Smith v. Inco, at para. 45, it is stated that “where amenity nuisance is alleged, the reasonableness of the interference with the plaintiff’s property is measured by balancing certain competing factors, including the nature of the interference and the character of the locale in which that interference occurred.”
[26] The Plaintiff here does not claim that its land will be physically injured by the Defendant erecting a poultry barn on its lands. At its highest, the claim is in the nature of an “amenity claim”. However, it should be noted that in the case of St. Helen’s Smelting Co. v. Tipping, (1865), 11 H.L.C. 642, which first laid down the distinction between the two types of nuisance claims, the nature of the “interference with the plaintiff’s use or enjoyment of his or her land” to support an “amenity claim” was stated, at pp. 650-651, to relate to “the personal inconvenience and interference with one’s enjoyment, one’s quiet, one’s personal freedom, anything that discomposes or injuriously affects the senses or the nerves.”
[27] Although the 19th century authorities may have spoken primarily of personal inconvenience and interference with personal enjoyment as giving rise to amenity claims in nuisance, it is clear that the categories of cases of nuisance are not closed, and may be subject to expansion to reflect societal and technological changes. As stated by Robins, J. In Nor-Video Services Ltd. v. Ontario Hydro (1978), 19 O.R. (2d) 107 (H.C.J.) at para. 28:
The notion of nuisance is a broad and comprehensive one which has been held to encompass a wide variety of interferences considered harmful and actionable because of their infringement upon or diminution of an occupier’s interest in the undisturbed enjoyment of his property...The category of interests covered by the tort of nuisance ought not to be and need not be closed, in my opinion, to new or changing developments associated from time to time with normal usage and enjoyment of land.
[28] It has also been noted that it is difficult to determine what kind of use of land will be considered “unreasonable” and therefore will constitute a nuisance on the facts of any particular case. As Houlden J.A. observed in the case of St Pierre v. Ontario (Minister of Transportation and Communications) (1983), 43 O.R. (2d) 767 (C.A.), appeal dismissed [1987] 1 S.C.R. 906, at para. 23:
“What conduct amounts to a nuisance at common law is "incapable of exact definition": Clerk & Lindsell on Torts, 15th ed. (1982), para. 23-01, p. 1140. Prosser on Torts, 4th ed. (1971), at p. 571 sums up the nebulous nature of the tort of nuisance in these words:
There is perhaps no more impenetrable jungle in the entire law than that which surrounds the word "nuisance." It has meant all things to all men, and has been applied indiscriminately to everything from an alarming advertisement to a cockroach baked in a pie. There is general agreement that it is incapable of any exact or comprehensive definition.”
[29] The Nor-Video case is an example of a situation where a defendant was found liable in nuisance to a plaintiff for interference with a business interest. In that case a cable television company, whose only interest in the matter was economic, and the interference with enjoyment of the use and occupation of land was suffered by non-parties, being the subscribers to the television cable service, whose cable reception was interfered with by the presence of the defendant’s new transformer station. Accordingly, the fact that the risk of loss to the Plaintiff in this case is economic in nature only, based upon the threat of termination of the tenancy by Hybrid, does not necessarily bar the claim in nuisance.
[30] Furthermore, the fact that the damage has not yet occurred, but is only prospective, does not bar the claim for injunctive relief on its own. In the case of Manicom v. Oxford (County) (1985), 52 O.R. (2d) 137 (Div. Ct), Potts, J. (dissenting), stated “it is not only past and continuing nuisances that may be enjoined. It does not matter that the alleged nuisances have not yet occurred. Prospective injuries may be enjoined.” In support of this proposition, Justice Potts cited the cases of Redland Bricks Ltd. v. Morris, [1970] A.C. 652 (H.L.) and Scott v Edwards, [1934] 1 W.W.R. 33 (Sask C.A.), affirmed [1934] S.C.R. 332.
[31] A further relevant principle from the case-law is that enunciated by Robins J. in Nor-Video, at para. 29:
“As a matter of general legal principle it is undisputed that an interference with something of abnormal sensitiveness or delicacy does not of itself constitute a nuisance. The law does not extend protection through nuisance to hypersensitive individuals or industries; it is against interferences to what objectively can be considered ordinary uses of property or enjoyments of life that protection is afforded.”
[32] See also Antrim Truck Centre Ltd. v. Ontario (Transportation) (2011), ONCA at para. 92.
This principle was summarized in A.M. Linden and B. Feldthusen, Canadian Tort Law (9th ed.) at p. 588, as follows:
“If the plaintiff’s use of property or the plaintiff’s own physical or mental makeup is abnormally sensitive, recovery for nuisance may be denied...This follows because the standard employed in determining whether the defendant’s activity is an unreasonable interference is an objective one.”
[33] The authors cite, in this regard, the case of Pinewood Recording Studios Ltd. v. City Tower Development Corp,. [1996] 31 C.L.R. (2d) a (B.C.S.C.); var’d on other grounds [1998] 40 C.L.R. (2d) 84 (C.A.); supp. reasons [1988] B.C.J. No. 2607. In that case recovery was denied to the plaintiff whose recording studio was disrupted by the defendant’s construction activities, on the basis that they would not have disrupted an ordinary enterprise.
[34] As stated in Pinewood Recording Studios at para. 140,, citing the case of Andreae v. Selfridge & Co.[1937] 3 All E.R. 255, [1938] Ch. 1 (C.A.), “whether the plaintiff falls into that unprotected class of the abnormally sensitive user is ‘a question of fact and degree.’”
[35] The sensitivity of the Plaintiff is one of four factors that bear on the assessment of whether there has been an unreasonable interference with the use and enjoyment of a claimant’s land, the others being:
The severity of the interference;
The character of the neighbourhood; and
The utility of the defendant’s conduct.
See Antrim Truck Centre Ltd. at para. 83.
[36] All four factors involve factual determinations. In my view, it is at this point that the Court is called upon, on a summary judgment motion, to exercise the new powers afforded by recent amendments to Rule 20 at sub-rule 20.04(2.1), namely, to weigh the evidence, evaluate the credibility of a deponent and draw any reasonable inference from the evidence, in order to apply the “full appreciation” test.
[37] With respect to the sensitivity of the Plaintiff’s use, while making the point that, in his view, the distance between the Plaintiff’s site and the Defendant’s is below the recommended standards, even for regular meat bird operations, Dr. Vaillancourt places considerable emphasis on the fact that Hybrid’s operation has particular and unique need for protection from air-borne pathogens. At para 4 of his report (page 39 of the Responding Motion Record of the Plaintiff) he states that:
“the site with a contract with Hybrid Turkeys (Hendrix Genetics) is a particular case because Hybrid is one of only 2 remaining Primary Turkey breeders on the globe. They supply over 50% of the world’s commercial turkey genetics...Protecting the pedigree and Great-Grand-Parent (GGP) stock operations is of utmost importance, not only to this company, but also to their clients worldwide, chiefly the Canadaian turkey industry. As an indication of the difference between Hybrid’s flocks and commercial flocks, Hybrid Turkeys cannot, because of international agreements, vaccinate their birds for influenza, contrary to any other turkey breeder operations...Such restriction on vaccination also makes these high-value flocks more susceptible to diseases.”
[38] Dr. Vaillancourt puts forward two conclusions at the end of his report, one of which relates to the Plaintiff’s damage claim in particular, and one of which is a public policy argument of general application, as follows:
(a) “Given the high value of the GGP turkey site (financially and genetically), and assuming that the new chicken breeder site becomes operational, it will be paramount to relocate the GGP operations immediately. Such a move will be costly;
(b) The Canadian poultry industry cannot afford to continue establishing new production sites without consideration for the regional impact of these new sites on the risk of disease transmission to established poultry farms.”
[39] It is not the Court’s function to create or impose set-back or distance separation standards on the establishment of poultry operations, which would be of general application throughout Ontario or Canada. The Court’s task in this action is to determine whether the Defendant’s operation represents an actionable nuisance in the context of the Plaintiff’s use and enjoyment of its land. The Defendant pleads that it is at risk of losing the benefit of the Hybrid tenancy. On the basis of the evidence proferred by the Plaintiff, as summarized by Dr. Vaillancourt’s first conclusion, as set forth above, it is because of the unique and particularly sensitive nature of its operation, that Hybrid has threatened to terminate its tenancy and relocate, thereby causing potential damage to the Plaintiff.
[40] At paragraph 42 of his Affidavit, Peter Buehlow, on behalf of the Plaintiff, states:
“If the Defendant is permitted to produce poultry at its farm location, the Plaintiff will suffer irreparable damage. The Plaintiff will lose its contract with Hendrix Genetics Ltd. [Hybrid]. The Plaintiff will be left with four specialized barns which were constructed to house breeding turkeys. One could not even house commercial turkeys for meat production in those barns without some significant renovations and the distance between the farms would still be less than Dr. Vaillancourt believes to be appropriate for commercial production.”
[41] I would observe that what Dr. Vaillancourt believes would be appropriate for a less sensitive commercial poultry operation is not proof that the Defendant’s operation “would amount to an actionable claim were the plaintiff a person with ordinary sensitivities” as suggested in Antrim Truck Centre Ltd. at para. 92.
[42] Moreover, the Plaintiff’s claim for damages is not based on an allegation that the Defendant’s operation would constitute a nuisance to an ordinary poultry operation, but rather at para. 12 of the Statement of Claim it is alleged that “the Plaintiff will lose its contract with Hybrid Turkeys and will not be able to mitigate its losses by obtaining alternate sources of birds because the Hybrid Turkeys are a specialty product which generate income that cannot be replaced with commercial birds.”
[43] I therefore conclude that Hybrid’s operation is unusually sensitive in nature, and therefore the Plaintiff’s risk of economic loss is correspondingly unusually sensitive.
[44] On the question of the nature of the locality in question, it is acknowledged that the Plaintiff’s farm and the Defendant’s farm are each located in an area where agricultural uses predominate, and both the Plaintiff’s and Defendant’s uses comply fully with all municipal planning regulations and policies.
[45] Regarding the severity of the harm, since the Defendant’s use has not commenced, it is impossible to measure what the severity of the harm, if any, will be. Whatever the severity of the risk of harm is, it is directly related to the unusual sensitivity of the Plaintiff’s use, which as indicated above, militates against the alleged nuisance being actionable.
[46] The remaining question relates to the utility of the Defendant’s use. As indicated, the Defendant’s operation will be located in an agricultural area, and will be in compliance with all regulatory requirements. The Affidavit of Terence Renkema confirms that quota, issued by the Ontario Broiler Hatching Egg & Chick Commission, has been obtained for the operation, indicating a public interest in the production of the poultry products. It cannot be seriously questioned that the production of chicken for human consumption, with the benefit of a quota, has social utility.
[47] On the basis of the foregoing, I find that there is no genuine issue requiring a trial with respect to the claim of the Plaintiff based upon the law of nuisance. I am entitled to assume that the Plaintiff has “put its best foot forward” and I am therefore in a position to have a full appreciation of the issues and evidence in order to determine that the Defendant’s proposed use does not constitute an actionable nuisance vis-a-vis the Plaintiff. There are no serious credibility issues, which would require resolution at a full trial, which would prevent this determination from being made.
[48] Although the Plaintiff has referenced negligence and interference with economic relations in its Factum, those causes of action were not pressed in argument. With respect to negligence, it is trite that there are three required elements: (a) a duty of care exists; (b) there has been a breach of that duty; and (c) damage has resulted from the breach [see A.M. Linden and B. Feldthusen, Canadian Tort Law (9th ed), p. 114]. It is not necessary for me to determine whether the first two elements exist, since it is acknowledged that no damage has occurred.
[49] Similarly, with respect to intentional interference with economic relations, it was acknowledged by the Plaintiff that it has no application, as one or more of the required elements of the tort are not present.
Disposition
[50] On the basis of the foregoing, the Motion for Summary Judgment of the Defendant is allowed and the action is dismissed.
[51] Counsel may make written submissions with respect to costs, the Defendant’s submissions to be made within 21 days, and the Plaintiff’s within 35 days, of the release of these Reasons.
D.A. Broad J.
Released: April 13, 2012
COURT FILE NO.: C-867-11
DATE: 2012-04-13
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
1631370 Ontario Inc.
Plaintiff
- and –
805352 Ontario Inc.
Defendant
REASONS FOR JUDGMENT
D.A. Broad J.
Released: April 13, 2012
/lr