Court File and Parties

COURT FILE NO.: 34152

DATE: 2013/09/27

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Thomas Ward and Jeanette Ward (Plaintiffs)

-and -

The Corporation of the Municipality of Southwest Middlesex, formerly known as The Corporation of the Township of Ekfrid, A.M. Spriet Associates Limited also known as Spriet Associates, Spriet Associates London Limited and John H. Wolfe and Grant Wolfe (Defendants)

BEFORE: Justice H. A. Rady

COUNSEL: Valerie M’Garry, for the plaintiffs Thomas Ward and Jeanette Ward Brian McCall, for the defendant The Corporation of the Municipality of Southwest Middlesex, formerly known as The Corporation of the Township of Ekfrid Kris Hutton, for the defendants A.M. Spriet and Associates a.k.a. as Spriet Associates and Spriet Associates London Limited Paul Downs, for the defendants John H. Wolfe and Grant Wolfe

HEARD: April 22, 2013

ENDORSEMENT

Introduction

[1] The defendants move pursuant to Rule 21 for a determination of the following:

1. which of several possible limitation periods apply to the plaintiffs’ claim; and
2. whether the municipality is the only necessary and proper party to this proceeding.

[2] The parties are agreed that a trial will be necessary regardless of the outcome of this motion but any findings made by the court could dispose of part of the action and streamline or substantially shorten the trial. During an earlier pre-trial, Justice Leitch suggested that counsel consider that this motion be brought. It follows the defendants’ unsuccessful motion for summary judgment pursuant to Rule 20, which was heard over nine days before Justice Bryant.

[3] A further pre-trial was originally scheduled for July 3, 2013. The trial was scheduled for September 2013 but has now been adjourned to a fixed date in 2014 and as a result, the pre-trial was be adjourned to a later date. Consequently, the need to deliver these reasons on an expedited basis abated.

[4] The questions of law are summarized in the defendants’ factum as follows:

1. Does section 111 of the Drainage Act, R.S.O. 1990, c. D. 17 apply to the plaintiffs’ claims in this action?
2. Does section 45 of the Limitations Act, R.S.O. 1990, c. L. 15 apply to the plaintiffs’ claims in this action?
3. Does section 46 of the Professional Engineers Act, R.S.O. 1990, c. P. 28 apply to the plaintiffs’ claims in this action?
4. Does section 79 of the Drainage Act allow any claims other than as against the Corporation of the Municipality of Southwest Middlesex?

[5] At the beginning of the hearing of the motion, Mr. McCall advised that a ruling on whether proper notice under s. 111 was given of the Drainage Act is not being sought.

[6] Further, s. 111 may not apply to claims for breach of fiduciary duty. Mr. McCall is prepared to live with that pleading, however. At trial, he intends to rely on authority that supports the proposition that a municipality does not owe a fiduciary duty to its citizens.

Facts

[7] This action relates to a municipal drain known as the Saxon drain. The plaintiffs allege that they sustained property damage, economic loss, inconvenience, loss of use and enjoyment of their property and other damages as a result of changes to the Saxon drain in or around 1974 and that they continued to suffer damage until approximately 2001. The plaintiffs issued a notice of action on May 12, 2000 and a statement of claim on August 20, 2001. They issued a fresh as amended statement of claim on April 23, 2012.

[8] For the purposes of this motion, the defendants are prepared to assume (as they must) that the facts alleged by the plaintiffs are true. I therefore set out below the allegations of fact in the plaintiffs’ fresh as amended statement of claim and reply and assume them to be true.

[9] In 1964 the plaintiffs, who are farmers, purchased a farm of more than 100 acres located on the north side of Irish Drive in the former Township of Ekfrid. The Township has since been amalgamated into the Municipality of Southwest Middlesex.

[10] Since approximately 1897, the southerly portions of their property and the adjacent lot to the west drained into the Saxon drain. The Saxon drain was originally constructed as an open ditch, approximately eight feet deep and twenty feet wide, which travelled south from Irish Drive toward Kings Highway No. 2. The Saxon drain crossed the lands of the defendants, John Wolfe and Grant Wolfe.

[11] A second branch of the Saxon drain extended easterly along the north side of Irish Drive to the southwest corner of the plaintiffs’ property and provided the connection between the southwest portion of the plaintiffs’ property and the main drain. The Saxon drain had been effectively draining the southwest portion of the plaintiffs’ property and the southeast portion of the adjacent lot since 1897.

[12] In or about 1973, the plaintiffs applied under the Drainage Act to deepen and improve their outlet and the main drain. The Township appointed an engineer, the defendant, A.M. Spriet and Associates.

[13] John Wolfe and Grant Wolfe are said to have proposed to Spriet that a portion of the Saxon drain be filled in and replaced with a closed tile. Spriet endorsed the proposal and provided a report to the Township in February 1974, which was approved and passed as by-law number 8-74.

[14] Spriet then designed a tile system to replace a substantial portion of the open ditch. When they expressed concern, affected property owners were assured that the final plan to be prepared by Spriet would include a ditch, spillway or waterway of some kind along the course of the drain that would take excess surface water from the plaintiffs’ property and the adjacent lot.

[15] The work proposed in the Spriet report was performed by Grant Wolfe (one of the property owners benefitting from the ditch’s elimination) and supervised by the Township and/or Spriet.

[16] From 1966 until 1974, the plaintiffs had no complaints about the drainage of their land. However, after the tile was laid and the ditch filled in, they noted that no ditch, spillway or waterway had been constructed and that the plaintiffs’ property and the adjacent lot were no longer draining properly. In particular, during spring runoff and after heavy precipitation, ditches adjacent to that area of Irish Drive would fill and surface water from the adjacent lot would back up onto the plaintiffs’ property, instead of flowing into the Saxon drain, something that occurred several times a year until approximately 2001. The plaintiffs sustained damage to their property and home as a result.

[17] In 1975 and unbeknownst to the plaintiffs, Spriet had advised the Township of a “grievous” error made by Grant Wolfe when he constructed the drain because it had been installed almost one foot too high to provide an outlet for proper drainage of the plaintiffs’ property.

[18] Subsequently, Spriet and the Township authorized the construction of a connection from the plaintiffs’ tile to the main drain beneath the land owned by John Wolfe for a distance of approximately 700 feet, which was to be constructed at Grant Wolfe’s expense. This “relief drain” was intended to remedy the earlier defective construction and provided a benefit to John Wolfe. The plaintiffs were not advised of the error nor told about the construction of the relief drain until 1996. Neither the Spriet report nor by-law number 8-74 was amended to reflect the change. Notwithstanding the error, Spriet certified to the Ministry of Agriculture that the drain had been constructed generally in accordance with the plans and specifications.

[19] The plaintiffs subsequently retained an engineer, who confirmed that a deep rather than shallow waterway was required along the old course of the ditch to take away excess surface water.

[20] The initially constructed waterway in or before 1978 was billed to the plaintiffs and other property owners upstream from the Saxon drain although those costs would not have been incurred had a proper waterway been constructed in the first place. Because the waterway had not been included in the Spriet report, it was characterized as a maintenance item and did not become part of the drainage works of the Saxon drain. The waterway gradually filled in as a result of erosion and cultivation and affected property owners had no means to enforce maintenance.

[21] Unfortunately, the plaintiffs continued to experience flooding and property damage and they repeatedly complained to the Township. The Township is said to have taken no steps to advise the plaintiffs of what it knew about the source of the problem or to have it investigated and corrected.

[22] In 1991, a representative of Spriet attended at the property to address the concerns that the plaintiffs had been expressing to the Township. At that time, it was noticed that the waterway that had been re-established in the early 1980s pursuant to an order of the Agricultural Food and Rural Affairs Appeal Tribunal had disappeared as a result of cultivation and erosion, that water was ponding on the plaintiffs’ property, that the plaintiffs complained of flooding on their property and in their basement and that there was little or no surface or subsurface water access to the Saxon drain.

[23] From 1974 to 1995, the plaintiffs persistently sought correction of their drainage problems. They contacted the Township every year and hired solicitors in an attempt to compel the Township to effect repairs that would allow the Saxon drain to properly drain their property. The plaintiffs submitted petitions and made requests for a new engineer’s report, which were refused. The Township was told that it could use section 78 of the Drainage Act to investigate and repair the problem but it did not do so until 1999. Subsequent to 1983, and the construction of a swale, the Township stated that the Tribunal’s order had been fulfilled, the engineer had approved what was in place and there was nothing more the Township could or would do.

[24] Until 1995, no steps were taken to re-establish the waterway despite the plaintiffs’ repeated requests for its construction or re-establishment. In 1995, a Township representative advised the plaintiffs that the waterway would be re-established in the summer of 1995. The swale was re-created in August 1995. In August 1995, the Township Drainage Commissioner represented that the Saxon drain had been completed and brought back “to the status of the original engineer’s report.” However, the problems persisted.

[25] In October 1996, the clerk treasurer of the Township disclosed to the plaintiffs that the tile for the Saxon drain had been installed about one foot too high by Grant Wolfe. At or about that time, the plaintiffs learned that a 400 foot length of ten inch tile relief drain had been constructed by the township across John Wolfe’s property. The relief drain starts at a lower depth and runs at a diagonal, joining the Saxon drain tile at a point now known to be 700 feet from its starting point.

[26] The plaintiffs had no prior knowledge or input into the construction of the relief drain to remedy the earlier construction error. It was not until the disclosure of the construction defect and the relief drain that the plaintiffs learned the cause of the flooding problem and those responsible.

[27] The relief drain is a private drain over which the plaintiffs have no right of inspection, maintenance or cleaning notwithstanding that it is intended to take the plaintiff’s water in place of the defective Saxon drain outlet. At the same time, the Township re-established the waterway across the lands of John Wolfe.

[28] However, the following spring, it became apparent that neither the private relief drain nor the grass waterways were effective. The source of the failure of the relief drain was only determined in 2001 because it was a private drain. In 1999, the Township appointed a different drainage engineer to investigate and report, at which point the length and “backfall” in construction of the relief drain were revealed. The Township refused the plaintiffs’ requests that it enter onto John Wolfe’s property to inspect the relief drain and determine why it was not working until the 1999 appointment of the different drainage engineer.

The Plaintiffs’ Allegations

[29] The plaintiffs’ allegations against the municipality are as follows:

a. it approved a design for the modification of the Saxon Drain when it knew or should have known that such modification would affect the Saxon Drain’s ability to effectively continue to drain the plaintiff’s property and the adjacent lot;

b. it failed to ensure that provision for the waterway originally proposed was included in the original engineer’s report or in the subsequent bylaw pertaining to the Saxon Drain;

c. it failed to properly supervise the modification of the Saxon Drain;

d. it failed to properly investigate the cause of continuing problems with the Saxon Drain after the modification had been completed;

e. it failed to construct or maintain a waterway across the Wolfe property, or to supervise its construction and maintenance;

f. it failed to ensure that the relief drain was included in and became a part of the Saxon Drain so that it could be properly inspected, cleaned out and maintained;

g. it failed to take steps to ensure that the waterway became part of the Saxon Drain thereby conferring upon affected property owners the ability and right to enforce maintenance of same;

h. it failed to ensure that a waterway was maintained across the Wolfe property to take excess surface water;

i. it failed to advise the plaintiffs of the cause of the flooding on their property when it became aware of it;

j. it failed to act in good faith, expeditiously, or at all despite the plaintiffs’ continuing complaints with respect to flooding and with respect to failure of the Saxon Drain;

k. it failed to supervise the maintenance and repair of the drainage works;

l. it has failed to assist in the construction or improvement of the drainage works;

m. it failed to ensure that the drainage works were inspected and that their condition was reported to Council on a regular and periodic basis as required by the Drainage Act;

n. it breached its statutory duty to inspect and maintain the municipal drain as required by the Drainage Act;

o. it breached its statutory duty to ensure the drain was constructed as described in the engineer’s report that was adopted by by-law;

p. it breached its statutory duty to administer the processes under the Drainage Act, impartially and without bias as among the assessed owners, preferring the interests of the defendants Wolfe over those of the plaintiffs;

q. it breached its fiduciary duty to the plaintiffs to act in their best interests, or to not to act contrary to their best interests as petitioners in its approval of the design and in its administration of the Drainage Act process;

r. it actively concealed the truth of what had occurred from the plaintiffs in order to conceal its own negligence and mishandling and continually failed to disclose it to the plaintiffs, their legal and engineering representatives until 1996, prevented them from discovering sufficient information to commence a civil action, and further constitutes fraudulent concealment;

s. it further concealed what had occurred when participating in a hearing before the Ontario Drainage Tribunal and failed to instruct its appointed engineer to ensure that full disclosure of the problem was provided to the Tribunal thereby continuing to prevent the plaintiffs from discovering sufficient information to commence an action and continuing the fraudulent concealment;

t. it permitted the flooding, damage and loss of use and enjoyment of the plaintiffs’ lands as a result of the design, construction and installation defects to continue for a period of 25 years when it had the ability, under the Drainage Act, to take steps to remedy the problem, but failed to do so; and

u. it sanctioned the creation and continuation of a nuisance to the plaintiffs for a period of approximately 25 years, when it knew of the causes, continuing existence and the probable remedy.

[30] The plaintiffs’ allegations against Spriet are set out as follows:

a. it designed a modification to the Saxon Drain that was not sufficient to perform the same tasks that had been performed by the open ditch over the previous twenty years;

b. it owed a fiduciary duty to the plaintiffs as petitioners for drainage to act in their best interests in the design of the drain, or at least not to act contrary to their best interests, and failed;

c. it designed a drain with insufficient fall or at insufficient depth or both to properly drain the affected properties;

d. it designed a drain with insufficient capacity to properly drain the affected properties;

e. it failed to include in its plans a waterway, notwithstanding that one was required and notwithstanding that it was represented to affected property owners that a waterway would be included;

f. it failed to properly supervise the modification of the Saxon Drain;

g. it failed to advise the plaintiffs of the source of continuing problems and flooding when it determined the source of the problem;

h. it misrepresented to the plaintiffs, their retained engineer and legal representatives the cause of the problem with the Saxon Drain and the cause of flooding on the southerly portion of the plaintiffs’ property;

i. it misrepresented to the Agricultural Food and Rural Affairs Appeals Tribunal (Ontario Drainage Tribunal) the cause of the problem with the Saxon Drain and the cause of the flooding the plaintiffs regularly and continuously experienced;

j. it breached its statutory duty to design and ensure the construction of the Drain without fear or favour to any person or party as required by the Drainage Act and its obligations as a firm of professional engineers, pursuant to the Professional Engineers Act, the Regulations and Code of Conduct;

k. it breached its statutory duty to ensure compliance with its own report in the construction of the drain;

l. it breached its statutory duty to inform the owners in the area requiring drainage as to the problems with the construction, and the supposed remedy which had been undertaken;

m. it breached its statutory duty to have any changes from the engineer’s report as designed incorporated into an amended report and by-law;

n. it actively concealed the truth of what had occurred from the plaintiffs in order to conceal its own negligence, and continually failed to disclose essential information to the plaintiffs and their legal and engineering representatives or the Province that would have enabled the plaintiffs to take both engineering and legal action at an earlier time, which amounts to fraudulent concealment so as to suspend the running of a limitation period;

o. it actively concealed the truth of what had occurred in a hearing before the Ontario Drainage Tribunal, to conceal its own negligence and prolonging the injury and damage to the plaintiffs, furthering the fraudulent concealment. It prevented the plaintiffs from discovering that they had a civil cause of action by failing to disclose the truth of what occurred in 1974 and 1975 until 1996, thus preventing the plaintiffs from taking action sooner;

p. it permitted the flooding, damage and loss of use and enjoyment of the plaintiffs’ property to continue over a 25 year period when it knew or ought to have known said damages would occur and would continue a nuisance; and

q. it permitted the aforesaid nuisance to continue, unabated, throughout a 25 year period when it had the ability and means to remedy it and failed to do so.

[31] The plaintiffs’ allegations against the Wolfe defendants are as follows:

a. Grant Wolfe failed to properly construct the modifications to the Saxon Drain;

b. Grant Wolfe failed to follow the directions and designs for the Saxon Drain as prescribed by the engineer;

c. Grant Wolfe deviated from the design of the Saxon Drain as proposed by the engineer;

d. Grant Wolfe failed to correct the level of the tile laid for the Saxon Drain when the error was brought to his attention;

e. the Wolfes concealed their negligence and involvement in the altered design and reconstruction of this drain from the plaintiffs and their engineering and legal professionals, affecting the discoverability of the plaintiffs’ claim;

f. the Wolfes’ failure to disclose their involvement to the plaintiffs amounts to a fraudulent concealment at law.

g. Grant Wolfe failed to construct and John Wolfe failed to maintain the waterway on John Wolfe’s property;

h. Grant Wolfe failed to properly construct the relief drain;

i. Grant Wolfe permitted the continuation of the persistent, repetitive damages and nuisance to the plaintiffs caused by the defects in the design and construction of the 1974 drain and the relief drain for an extended period, when he knew the cause of the problem and that it was causing damages to the plaintiffs;

j. John Wolfe failed to properly maintain and clean out or permit a clean out of the relief drain;

k. John Wolfe permitted the construction of a “relief drain” that was contrary to the engineer’s report and the Drainage Act without advising the plaintiffs or either of them;

l. the Wolfes have denied the plaintiffs and their representatives access to their property to inspect the relief drain or the main drain;

m. John Wolfe permitted the continuation of persistent, repetitive damages and nuisance to the plaintiffs caused by the defects in the design and construction of the 1974 drain and the relief drain, for an extended period, to his sole advantage and the plaintiffs’ disadvantage; and

n. the Wolfes have permitted or caused the obstruction, settling, blockage or erosion of the relief drain and created or permitted a blockage of the waterway when they knew or ought to have known that this would cause flooding on the plaintiffs’ property.

Nature of the Plaintiffs’ Claims

[32] The plaintiffs’ claims against the Township are framed in:

i. Nuisance;

ii. Negligence;

iii. Breach of fiduciary duty; and

iv. Breach of statutory duties under the Drainage Act.

[33] The plaintiffs’ claims against Spriet are framed in:

i. Nuisance;

ii. Negligence;

iii. Breach of fiduciary duty; and

iv. Breach of statutory duties under the Drainage Act and the Professional Engineers Act.

[34] The plaintiffs’ claims against the Wolfe defendants are framed in;

i. Negligence; and

ii. Nuisance

[35] The plaintiffs also allege that the defendants failed to disclose material facts, which amounts to fraudulent concealment so as to suspend the running of the applicable limitation period.

[36] The plaintiffs plead and rely upon the provisions of the Drainage Act, the Professional Engineers Act and the Limitations Act.

Prayer for Relief

[37] The plaintiffs seek general and special damages; punitive damages; restitution of monetary assessments paid; prejudgment and post-judgment interest; a declaration that outstanding assessments against the plaintiffs are void; and costs.

The Statements of Defence

[38] The defendants have delivered statements of defence and they raise the limitation periods that are now before the court for consideration.

Issues and the Law

[39] As already noted, the issues on this motion are as follows:

1. Does section 111 of the Drainage Act apply to the plaintiffs’ claims in this action?
2. Does section 45 of the Limitations Act apply to the plaintiffs’ claims in this action?
3. Does section 46 of the Professional Engineers Act apply to the plaintiffs’ claims in this action?
4. Does section 79 of the Drainage Act allow any claims other than as against the Municipality?

Application of Rule 21.01

[40] Rule 21.01(1) of the Rules of Civil Procedure provides:

21.01(1) A party may move before a judge,

(a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the pleading, substantially shorten the trial or result in a substantial saving of costs; or

(b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence,

and the judge may make an order or grant judgment accordingly.

[41] The parties seem to agree generally that the court has the jurisdiction to deal with the questions framed by the defendants. The plaintiffs submit, however, that the proper resolution of the questions can only be achieved with the benefit of a full evidentiary background. They point to Justice Bryant’s endorsement of February 23, 2012 in which he dismissed the motion for summary judgment and in which he says:

There are numerous statutes with arguably conflicting provisions and limitation periods. Attempting to determine their application, limitations and interrelationship involves knowledge and a full appreciation of a long, complicated factual history which is impossible to obtain on a documentary record, even one as voluminous as this one, notwithstanding the efforts of counsel over nine days of hearing. A trial judge with a full appreciation of the evidence will be in a better position than a motions judge to make findings of fact and determine these and the other disputed factual and legal issues.

[42] This motion is responsive to Justice Bryant’s comments. By accepting the plaintiffs’ allegations as true, any factual dispute is eliminated.

[43] The defendants submit that on a Rule 21 motion, the court may determine which statutory limitation period applies to a claim as an exercise of statutory interpretation. They rely on Cascone v. Rodney et al (1981), 1981 CanLII 1748 (ON SC), 34 O.R. (2d) 618 (H.C.J.) and three appellate authorities: Abramovic v. Canadian Pacific Ltd., (1991), 1991 CanLII 7248 (ON CA), 6 O.R. (3d) 1 (C.A.); Smith v. Via Rail Canada, (1991), 1991 CanLII 7122 (ON CA), 6 O.R. (3d) 9 (C.A.); and Saltson v. Rolnick (2010), 2010 ONSC 914, 101 O.R. (3d) 599 (Div. Ct.).

[44] In Abramovic and Smith, the court was asked to decide “which of two competing provincial limitation periods applies in actions against Canadian Pacific Limited.”

[45] In Cascone, the court observed that “[n]umerous authorities make it quite clear that the applicability of limitation statute in a given situation is a point of law that is appropriately raised on an application under Rule 124 [the predecessor to Rule 21] provided the determination is not contingent on the resolution of any dispute as to facts.”

[46] In this case, the factual disputes having been resolved by the defendants’ admission (for the purposes of the motion), the court is able to and must determine which of several competing limitation periods apply.

[47] I turn then to each of the questions for consideration:

1. Does s. 111 of the Drainage Act apply?

[48] Briefly put, the plaintiff argues that s. 111 is not a limitation period but is directive only, the failure to comply with which does not result in a dismissal. They further submit that the limitation period (if that is what it is) only applies to actions brought under the Drainage Act and, in particular, proceedings before the referee.

[49] Finally, they submit that if s. 111 applies to their action so, too, does s. 113, which empowers the referee to extend the time for appeals or other proceedings.

[50] The defendants submit the contrary. They point to the Limitations Act, 2002, S.O. 2002 c. 24 that identifies s. 111 in a Schedule to the Act as a limitation period and submit that it applies to all claims for damages under the Drainage Act whether before the referee or the court.

[51] Section 19 of the Limitations Act 2002 provides that “[a] limitation period in or under another Act that applies to a claim to which this Act applies is of no effect unless the provision establishing it is listed in the Schedule to this Act.”

[52] The Schedule to the Act clearly lists s. 111 of the Drainage Act as one of those limitation periods specifically preserved. As a result, the only reasonable conclusion is that s. 111 is a limitation period. The issue then is whether it applies to this claim.

[53] Section 111 of the Drainage Act provides as follows:

111. (1) Proceedings for the determination of claims and disputes for the recovery of damages, or for an order directing or restraining the doing of any act or thing shall be instituted by serving ten clear days notice setting forth the grounds of the claim upon all persons concerned.

(2) A copy of the notice with an affidavit of service thereof shall be filed with the local registrar of the Superior Court of Justice for the area in which the initiating municipality is situate, and the notice shall be filed and served within two years from the time the cause of complaint arose.

[54] As I have already noted, the defendants do not seek a ruling on whether proper notice was given. However, they ask whether s. 111 applies to the plaintiffs’ claim in the Superior Court.

[55] The defendants submit that s. 111 applies to all claims for damages, including those framed in nuisance and negligence that arise from works constructed under the statute. They rely on Hud v. West Nippissing (Municipality), [2011] O.J. No. 4790 (S.C.J.) and Robinson v. Essex, [1932] O. J. No. 162 (C.A.).

[56] The plaintiffs submit that the referee and the Superior Court have concurrent jurisdiction over claims for damages arising from negligence. Because the Act is silent respecting claims framed in nuisance and breach of fiduciary duty, those claims are heard in the Superior Court. They say that s. 111 only applies to claims before the referee.

[57] The defendants do not disagree that concurrent jurisdiction exists. They say that the referee does not have exclusive jurisdiction over claims arising from the construction and repair of drainage works. However, their point is that all claims whether made to the referee or the Superior Court are governed by s. 111 of the Act.

[58] In order to determine this issue, it is necessary to examine the evolution of the Drainage Act and its predecessors.

[59] From 1950 until 1962-1963, the predecessor to s. 111 was s. 99 of the Municipal Drainage Act, which provided as follows:

99.(1) Subject to section 100, applications to set aside, declare void or otherwise directly or indirectly to attack the validity of any petition, report of an engineer, resolution of a council, by-law provisionally adopted or finally passed relating to a drainage work as hereinbefore defined, as well as all proceedings to determine claims and disputes arising between municipalities or between a company and a municipality or between individuals and a municipality, company or individual in respect of anything done or required to be done under this Act or consequent thereon, or by reasons of negligence, or for a mandamus or injunction, shall be made to and shall be heard and tried by the referee, who shall hear and determine the same and give his decision and his reasons therefor.

(2) If the referee thinks that any proceeding under subsection 1 could be more conveniently heard and tried by a county judge he may in his discretion request the county judge to hear and try such matter or proceeding, and any county judge acting upon such request has all the jurisdiction of the referee under this Act.

(3) Proceedings for the determination of claims and disputes and for the recovery of damages by reason of negligence, or by way of compensation or otherwise, or for a mandamus or an injunction, under this section, shall be instituted by serving ten clear days notice setting forth the grounds of the claim for damages or compensation or a mandamus or an injunction as the case may be upon all persons concerned.

(4) A copy of the notice with an affidavit of service thereof shall be filed with the clerk of the county court of the county in which the land is situate and the notice shall be filed and served within two years from the time the cause of complaint arose.

(5) All affidavits intended to be used in support of a motion shall be filed with the clerk of the county court not less than five days before he return day of the motion.

(6) Subject to section 100, no application or proceeding within the meaning of this section shall be made or instituted otherwise than as herein provided.

(7) Where the amount awarded upon a claim for damages arising out of a drainage work does not exceed $60, the costs allowed to the plaintiff shall be on the division court scale so far as the same is applicable.

(8) Where the amount awarded is upon a claim for damages by reason of the non-repair of a drainage work, the costs allowed shall be on the division court scale.

[60] I note that this language is also found in earlier versions of the statute including the Municipal Drainage Act from 1914 (R.S.O. 1914, c. 198, s. 98(1) – (8)) and from 1927 (R.S.O. 1927, c. 241, s. 97(1) – (8)). Both of these versions contain the identical provisions respecting notice as found in s. 99(3) and (4) of the 1950 Act.

[61] In 1962-63, s. 99 of the Municipal Drainage Act was amended, becoming s. 74 of the Drainage Act. It provided as follows:

74. (1) Proceedings for the determination of claims and disputes and for the recovery of damages by reason of negligence, or by way of compensation or otherwise, or for a mandamus or an injunction, shall be instituted by serving ten clear days notice setting forth the grounds of the claim upon all persons concerned.

(2) A copy of the notice with an affidavit of service thereof shall be filed with the clerk of the county court of the county in which the initiating municipality is situate, and the notice shall be filed and served within two years from the time the cause of complaint arose.

[62] It is noteworthy that the earlier provisions in s. 99(1) and (2) directing all claims to be heard by the referee, subject to his discretion to transfer have been removed and replaced with what is now s. 120 of the Drainage Act (and which is reproduced later in these reasons.) Section 120 provides that a proceeding commenced in the court may be transferred to a referee. It seems to me that this recognized that the court and the referee were both competent to hear claims under the Act at first instance. This section remained unchanged until the 1975 amendments. The two year limitation period has remained constant.

[63] After 1975, the references to negligence and claims for damages by way of compensation or otherwise were removed from what is now s. 111 of the Act. Section 111 no longer refers to claims in negligence. Unfortunately, a review of Hansard from that time sheds no light on why the change was made but it bears repeating that the two year limitation period is unchanged.

[64] For the sake of completeness, I set out the provisions of s. 97 from the 1927 Consolidation because they become important when one of the cases upon which the defendants rely[^1] is considered.

97. (1) Subject to the provisions of section 98, applications to set aside, declare void or otherwise directly or indirectly to attack the validity of any petition, report of an engineer, resolution of a council, by-law provisionally adopted or finally passed relating to a drainage work as hereinbefore defined, as well as all proceedings to determine claims and disputes arising between municipalities or between a company and a municipality or between individuals and a municipality, company or individual in respect of anything done or required to be done under the provisions of this Act or consequent thereon, or by reason of negligence, or for a mandamus or injunction, shall be made to and shall be heard and tried by the referee, who shall hear and determine the same and give his decision and his reasons therefor.

(2) If the referee thinks that any proceeding under the next preceding subsection hereof could be more conveniently heard and tried by a county judge he may in his discretion request the county judge to hear and try such matter or proceeding, and any county judge acting upon such request shall have all the jurisdiction of the referee under this Act.

(3) Proceedings for the determination of claims and disputes and for the recovery of damages by reason of negligence, or by way of compensation or otherwise, or for a mandamus or an injunction, under this section, shall be instituted by serving ten clear days’ notice setting forth the grounds of the claim for damages or compensation or a mandamus or an injunction as the case may be upon all persons concerned.

(4) A copy of the notice with an affidavit of service thereof shall be filed with the clerk of the county court of the county in which the land is situate and the notice shall be filed and served within two years from the time the cause of complaint arose.

(5) All affidavits intended to be used in support of a motion shall be filed with the clerk of the county court not less than five days before the return day of the motion.

(6) Subject to the provisions of section 98, no application or proceeding within the meaning of this section shall be made or instituted otherwise than as herein provided.

(7) Where the amount awarded upon a claim for damages arising out of a drainage work does not exceed $60, the costs allowed to the plaintiff shall be on the division court scale so far as the same is applicable.

(8) Where the amount awarded is upon a claim for damages by reason of the non-repair of a drainage work, the costs allowed shall be on the division court scale.

[65] With that foundation, I turn to the cases relied on by the defendants. In Hud v. West Nippissing, supra, the court dismissed a claim for damages because of a failure to comply with s. 111 of the Act. In that case, the plaintiff issued a statement of claim in the Superior Court seeking damages for nuisance, negligence, the intentional infliction of economic harm and mental suffering. Justice Ellies concluded that “[w]hile referees under the Act do not have exclusive jurisdiction to deal with the issue of damages under the Act (see, for example, s. 120(1) discussed below), the provisions of the Act apply to all claims for damages arising from works constructed under it.”

[66] In support of his conclusion, His Honour cited Robinson v. Essex, supra. In that case, a claim for damages was held to be barred because it was brought more than two years after the cause of action arose. The Court of Appeal noted that it “was argued that the plaintiff’s claim was made at common law and not under the statute. The purpose, however, of the Municipal Drainage Act, under which the drain was constructed, is that all claims for damages arising from works constructed under that Act should be maintainable only under its provisions.” The dismissal granted by the trial judge below was upheld.

[67] In that case, the plaintiff owned certain lands in the Township of Maidstone. He alleged that in the years 1923, 1926 and 1928, he suffered damages from crop loss because of water discharged on his lands due to the negligence of the defendant in permitting a drain or ditch to fall into disrepair.

[68] The defendant defended on the basis that:

• the drain was not in disrepair and the damage was suffered because of extraordinary rainfall;
• the drain was constructed under the provisions of the Municipal Drainage Act; and
• the plaintiff had not given the defendant any notice describing with reasonable certainty the alleged lack of repair of such drainage work as required by s. 79(2) of the Municipal Drainage Act.[^2]
• the claim for damages for 1923 and 1926 was barred by the two year limitation period in the Limitations Act, R.S.O. 1927, c. 106, s. 48(h).

[69] Following trial, the plaintiff’s claim for damages in 1923 and 1926 was held barred because of a lack of particularity in the notice given and the action was commenced more than two years after the cause of action arose.

[70] The Court of Appeal disagreed with the trial judge that the notice was lacking in detail. Accordingly, the requirements of s. 79(2) were met. However, the Court of Appeal agreed with the trial judge that the action was barred with respect to the claim for damages in 1923 and 1926 because the action was brought more than two years after the cause of action arose as provided in the Limitations Act, R.S.O. 1927, c. 106, s. 48(h). This is noteworthy because the court did not refer to s. 97 of the Act (which is the predecessor of s. 111 of the Drainage Act) as the relevant limitation period but rather that found in the Limitations Act.

[71] The plaintiff had argued that its claim was made at common law and not under the Municipal Drainage Act. The court held that the purpose of the Municipal Drainage Act was that all claims for damages arising from works constructed under that Act should be maintainable under its provisions. The court went on to agree with the court below that the plaintiff’s claim with respect to the damages suffered in 1928 must fail because of the absence of notice required by s. 79(2).

[72] The court referred to two cases, Raleigh v. Williams, 1892 CanLII 6 (SCC), [1893] A.C. 540 (P.C.) and Spratt v. Gloucester (1920), 1920 CanLII 446 (ON CA), 47 O.L.R. 593 (C.A.).

[73] In the Spratt case, the plaintiff brought an action before the referee to recover damages alleged to have been sustained because of water damage caused by the defendant’s construction of certain drainage works. The claim was dismissed because it was brought more than one year after the injury was sustained contrary to s. 326(1) of the Municipal Act, R.S.O. 1914 c. 192.

[74] The court held as follows:

All of the works the effect of which, as the appellant contends, is injuriously to affect his land, were constructed under statutory authority, and no action lies for the recovery of any damages resulting from their construction. Corporation of Raleigh v. Williams, 1892 CanLII 6 (SCC), [1893] A.C. 540, is conclusive as to this, and also as to the only remedy of a land owner whose lands have been so affected being to seek compensation under the provisions of what is now, though somewhat changed in form, section 98 of the Municipal Drainage Act...and what is now s. 325 of the Municipal Act...and any such claim is now barred by section 326(1) of the latter Act.

[75] Section 326(1) of the Municipal Act provided as follows:

Except where the person entitled to the compensation is an infant, a lunatic, or of unsound mind, a claim for compensation for damages resulting from his land being injuriously affected shall be made in writing, with particulars of the claim, within one year after the injury was sustained, or after it became known to such person, and, if not so made, the right to compensation shall be forever barred.

[76] Again, it is significant that the court held that the relevant limitation period was that found in the Municipal Act and not that in s. 98(3) and (4) of the Municipal Drainage Act, R.S.O. 1914, c. 198 (which contained the same language as s. 97(3) and (4) of the 1927 consolidation, which has been reproduced above.

[77] In the Raleigh case, the Privy Council considered an appeal that had its origins in a decision of the referee. The plaintiff, without notice in writing, brought an action against a municipality for damages for injury to his crop caused by two drains erected by the municipality. On appeal to the Privy Council from the Supreme Court of Canada, it was determined that the Municipal Act, R.S.O. 1887, c. 184 applied. An action for damages against the municipality could be brought by any persons who could show that they sustained injury from the non-performance of a statutory duty. It was found that s. 583(2), which required that notice in writing be given before mandamus could be sought, applied also to s. 286, under which this case fell, but that failure to give notice – although a condition precedent – did not preclude an action for damages. I do not read the case as giving any guidance on the particular issue under consideration here.

[78] The plaintiffs point out that at the time that Robinson v. Essex was decided, the Municipal Drainage Act provided that: “[n]o application or proceeding within the meaning of this section shall be made or instituted otherwise than is herein provided” (s. 99(6)). They say that the decision in Robinson v. Essex and the cases to which it refers, are therefore distinguishable.

[79] I do not find this argument compelling. What is more important is that both Robinson and Spratt determined that the relevant limitation period was not the two year period referred to in the Municipal Drainage Act but that found in either the Municipal Act or Limitations Act. This supports the plaintiffs’ argument that the relevant limitation period for their claim is found in the Limitations Act. It appears to me that the motions judge in Hud was not provided with the relevant statutory history that is central to the analysis.

[80] How then to reconcile what is undoubtedly a limitation period in s. 111 of the Drainage Act and the limitation period contained in the former Limitations Act.

[81] In order to do so, I return to the present incarnation of the Drainage Act. The Act is divided into 18 sections, each dealing with a different subject matter – for example – the 16th section is entitled “Referee.” The powers of the referee are enumerated at s. 106:

106. (1) The referee has original jurisdiction,

(a) to entertain any appeal with respect to the report of the engineer under section 47;

(b) to determine the validity of, or to confirm, set aside or amend any petition, resolution of a council, provisional by-law or by-law relating to a drainage works under this Act or a predecessor of this Act;

(c) to determine claims and disputes arising under this Act, including, subject to section 120, claims for damages with respect to anything done or purporting to have been done under this Act or a predecessor of this Act or consequent thereon;

(d) to entertain applications for orders directing to be done anything required to be done under this Act;

(e) to entertain applications for orders restraining anything proposed or purporting to be done under this Act or a predecessor of this Act; and

(f) over any other matter or thing in relation to which application may be made to him or her under this Act.

[82] Under the same heading, the Act sets out s. 111 (cited above) and ss. 119 and 120 which provide as follows:

119. Where an action is brought or is pending before the court of revision or the Tribunal or the referee and the matter should properly be heard by one of the other tribunals, the action may be transferred to the other tribunal without invalidating the proceedings provided the action was launched within the time limits prescribed in this Act.

120. (1) Where an action is brought or is pending and the court in which the action is brought or is pending or a judge thereof is of opinion that the relief sought therein is properly the subject of a proceeding under this Act or that it may be more conveniently tried before and disposed of by the referee, the court or judge may, on the application of either party, at any stage of the action make an order transferring it to the referee on such terms as appear just, and the referee shall thereafter give directions for the continuance of the action before him or her.

(2) This section applies only where the action is brought within the period limited by this Act for taking proceedings on notice.

[83] The issue is whether s. 111 applies to claims in the Superior Court? Section 111 is broadly worded providing that no proceedings for the determination of claims and disputes for the recovery of damages shall be brought unless certain steps are taken. At first blush, that language would seem to encompass any claim brought in whichever forum. However, while those terms are not defined in the Act, they clearly track the language of s. 106 setting out the powers of the referee.

[84] In my view, it is significant that the limitation period is found within that section of the statute dealing with hearings before the referee. I recognize that in the past, the use of headings and titles in a statute as an aid to statutory interpretation was controversial. Ontario’s Interpretation Act, R.S.O. 1990, c. I.11, s. 9, explicitly stated that headings “form no part of the Act but shall be deemed to be inserted for convenience of reference only.” This Act was repealed in 2007, but by then, many commentators had advocated a different view. Some judges agreed.

[85] Professor Ruth Sullivan in her book Sullivan on the Construction of Statutes, 5th ed. (Toronto: LexisNexis, 2008) provides a helpful discussion of the use of legislative headings in statutory interpretation at pp. 392-397. She summarizes the issue as follows:

... To any person reading legislation, headings appear to be as much a part of the enactment as any other component. There is no reason why they should be assigned an inferior status. ...

The judicial response to headings is varied. Some courts, in deference to the applicable Interpretation Act, avoid reliance on headings as a tool of interpretation. In Menzies v. Manitoba Public Insurance Corp., for example, Freedman J. wrote:

[Section] 14 of The Interpretation Act, C.C.S.M. c. I80, provides that headings do not form part of the statute ... While there may be some controversy on this point, I see no need in this case to enter into this particular debate. For present purposes, I am satisfied to follow the directive in s. 14 of The Interpretation Act and disregard the heading in Division 6.

Others resort to a heading only if the language of the provision is ambiguous. The following passage from the judgment of Kellock J. in Canada (Attorney General) v. Jackson is often quoted:

Where the language of a section is ambiguous, the title and the headings of the statute in which it is found may be resorted to to restrain or extend its meaning as best suits the intention of the statute, but neither the title nor the headings may be used to control the meaning of enacting words in themselves clear and unambiguous.

The view favoured in most recent judgments from the Supreme Court of Canada is that for purposes of interpretation headings should be considered part of the legislation and should be read and relied on like any other contextual feature. In Law Society of Upper Canada v. Skapinker (Joel), speaking of headings in the Charter, Estey J. wrote:

The Charter, from its first introduction into the constitutional process, included many headings including the heading now in question. ... It is clear that these headings were systematically and deliberately included as an integral part of the Charter for whatever purpose. At the very minimum, the Court must take them into consideration when engaged in the process of discerning the meaning and application of the provisions of the Charter.

This approach to headings in the Charter has been applied to ordinary federal legislation and, despite the Interpretation Acts, to provincial legislation as well [see e.g. African Lion Safari & Game Farm Ltd. v. Ontario (Ministry of Natural Resources) (1987), 1987 CanLII 4079 (ON CA), 59 O.R. (2d) 65 at 72-75.]

[86] Professor Sullivan refers to a number of cases in which legislative headings were applied in a determinative fashion by the Supreme Court of Canada:

• Saint John (City) v. Charlebois, 2005 SCC 74, [2005] 3 S.C.R. 563: The headings in New Brunswick’s Official Languages Act were used to support the court’s analysis of the Act.
• R. v. Lohnes, 1992 CanLII 112 (SCC), [1992] 1 S.C.R. 167: A heading was relied upon to narrow the scope of s. 175(1)(a) of the Criminal Code which made it an offence to cause a disturbance in or near a public place.
• R. v. Zundel, 1992 CanLII 75 (SCC), [1992] 2 S.C.R. 731: Headings were relied upon to help establish the purpose of s. 181 of the Criminal Code prohibiting the publication of false news.
• R. v. Kelly, 1992 CanLII 62 (SCC), [1992] 2 S.C.R. 170: A heading was relied upon to support the court’s adoption of a meaning of the word “corruptly” under s. 426 of the Criminal Code.

[87] Significant to this case, Professor Sullivan also discusses the weight of groupings of provisions under headings. She states at p. 396:

When provisions are grouped together under a heading it is presumed that they are related to one another in some particular way, that there is a shared subject or object or a common feature to the provisions. Conversely, the placement of provisions elsewhere, under a different heading suggest an absence of such a relationship.

Reliance on the grouping of provisions under headings to assist in interpretation is illustrated by R. v. Blais. In that case the Supreme Court of Canada had to determine whether Metis were Indians within the meaning of s. 13 of the Natural Resources Transfer Agreement and therefore entitled to the rights reserved to Indians under the section. In concluding that Metis were not Indians for this purpose, the Court ... relied on the placement of s. 13 and its heading. ...

[88] With those principles in mind, I have concluded that the limitation period contained in s. 111 of the Drainage Act applies to proceedings before the referee and not those before the Superior Court.

[89] This conclusion is strengthened by the language of ss. 119 and 120 which permit the transfer of proceedings between tribunals or from the Superior Court to the referee but only if the action was commenced in compliance with the limitation in the Drainage Act.

[90] It has troubled me that this interpretation means that until 2004, a claim in the Superior Court would have enjoyed a longer limitation period than one before a referee. This seems an odd result, particularly because a municipality has an interest in early notice of a claim regardless in which forum it is brought.

[91] Nevertheless, it is interesting to note that in Spratt there was a two year limitation period in the Municipal Drainage Act but the claim was found to be governed by the shorter one year period in the Municipal Act.

[92] In any event, the anomaly created by two distinct limitation periods has been eliminated by the new Limitations Act, 2002.

[93] Accordingly, I have concluded that s. 111 does not apply to the plaintiffs’ claims and therefore the answer to Question #1 is “No”.

2. Does Section 45 of the Limitations Act apply to the Plaintiffs’ Claims?

[94] Largely for reasons set out above and in particular what I consider to be the ratio of the Robinson and Spratt decisions, the answer to Question #2 is “Yes.” For the sake of completeness, I set out the section and the parties’ argument.

[95] Section 45 of the Limitations Act in force prior to 2004 provided as follows:

45. (1) The following actions shall be commenced within and not after the times respectively hereinafter mentioned,

(g) an action for trespass to goods or land, simple contract or debt grounded upon any lending or contract without speciality, debt for arrears of rent, detinue, replevin or upon the case other than for slander,

within six years after the cause of action arose.

(2) Nothing in this section extends to any action where the time for bringing the action is by any statute specially limited.

[96] The defendants submit that the court should examine the substance of the claim as pleaded to determine its legal character. They submit that properly analyzed, the claim sounds in negligence, nuisance and perhaps breach of statutory duty, all arising from the construction or repair of drainage works. Therefore, the applicable limitation period is s. 111 of the Drainage Act. The specific provision prevails over the general and therefore s. 45(2) does not apply.

[97] The plaintiffs agree that this action is “upon the case” in tort and equity. They submit that if s. 111 applies, then so does s. 113 which provides that “the referee may, where he or she considers it proper, extend the time otherwise limited for appeals or other proceedings.” They also argue that the cause for complaint referred to in s. 111(2) continued to arise until 2001. The plaintiffs raise arguments respecting discoverability and fraudulent concealment. There is also an argument respecting the new Limitations Act and the presumption against retroactive legislation.

[98] The plaintiffs’ arguments, respectfully, misapprehend what the court is being asked to determine on this motion. The issues of discoverability and fraudulent concealment are for trial. The defendants concede this. Further, I did not understand anyone to assert that the new Limitations Act applied with respect to Question #2. Its application is to be considered in connection with the next question. Finally, the application of s. 113 is not before the court.

[99] Therefore, returning to Question #2, the issue is as between s. 45 of the old Limitations Act and s. 111 of the Drainage Act, does one prevail? Put another way, does the specific and shorter limitation period trump the longer and more general limitation in s. 45? For the reasons already set out, I have concluded that it does not.

3. Does s. 46 of the Professional Engineers Act apply to the plaintiffs’ claims?

[100] Section 46 of the Professional Engineers Act, 1990[^3] provides as follows:

46. (1) Proceedings shall not be commenced against a member of the Association or a holder of a certificate of authorization, a temporary licence, or a limited licence for damages arising from the provision of a service that is within the practice of professional engineering after twelve months after the date on which the service was, or ought to have been, performed.

[101] The Act, as it then existed, also provided for an extension of time in certain circumstances.

46. (2) The court in which an action mentioned in subsection (1) has been or may be brought may extend the limitation period specified in subsection (1) before or after the expiration of the period if the court is satisfied that there are apparent grounds for the proceedings and that there are reasonable grounds for applying for the extension.

[102] Section 46(2) was repealed by the Limitations Act, 2002. The defendants submit that it is no longer available to the plaintiffs as a mechanism by which to extend their claim. The defendants rely on Iroquois Falls Power Corp. v. Jacobs Canada Inc., 2008 ONCA 320, [2008] O.J. No. 1581 (C.A.).

[103] The plaintiffs submit that their proceedings were commenced before January 1, 2004, which means the former limitation period as well as the doctrine of special circumstances apply. They rely on St. Jean (Litigation Guardian of) v. Cheung, 2008 ONCA 815, [2008] O.J. No. 4862 (C.A.). They submit that the St. Jean decision supersedes the Iroquois Falls decision. A further submission is made that the claim includes misrepresentation rather than simply the provision of engineering services.

[104] In Iroquois Falls, the Court of Appeal set aside a decision granting summary judgment dismissing the plaintiff’s action against Jacob’s Canada. Iroquois had contracted with Jacob’s successor, Delta Catalytic Engineering to build a natural gas electric co-generation plant with two heat recovery steam generators. Iroquois brought an action against Delta and Jacobs for damages arising from cracks that developed in the generators’ casings. Jacobs brought a motion for summary judgment. It argued that the Professional Engineers Act provided a limitation period of 12 months for claims arising in respect of professional engineering services. It argued that the period had expired before the claim was issued. In response, Iroquois brought a motion to amend its claim to include an express product durability warranty claim based on its contract, to which a six year limitation period would apply. The parties agreed that the summary judgment motion would be heard as if the proposed amendments to the claim had been made.

[105] The motions judge granted summary judgment dismissing the claim.

[106] The Court of Appeal allowed the appeal. It noted the parties’ agreement that the summary judgment motion was to proceed as if the amendments had been made so the relevant limitation period was that covering the amended claim. Under the amended claim, there was a genuine issue for trial as to whether services beyond the scope of professional engineering were provided to which a six year limitation period applied and whether six years had passed between the discoverability of the claim and its commencement.

[107] It is the court’s discussion of s. 46(2) of the Professional Engineers Act that is of interest. By the time the action had been commenced, s. 42(2) had been repealed by the Limitations Act, 2002.

[108] The Court of Appeal found that s. 46(2) of the Professional Engineers Act was not an “accrued or vested right” and accordingly, s. 46(2) of the Act no longer existed for the plaintiffs to rely on to extend the one year limitation period in s. 46(1) of the Act. Section 46(2) of the Act was but an optional right, which could have been exercised before it was repealed but it had not been in this case. The court made the following observations:

After the hearing of this matter, counsel for the appellant drew the panel’s attention to this court’s recent decision in Guillemette v. Doucet (2007), 2007 ONCA 743, 88 O.R. (3d) 90. This too is a different case. The limitation period in that case was set out in s. 4 of the Solicitors Act, R.S.O. 1990, c. S. 15. It allowed for the extension of the prescribed time period when special circumstances exist. Unlike in this case, it remained in force after the coming into effect of the Limitations Act, 2002. The court found that the “special circumstances” qualifier in section 4 of the Solicitors Act fell within s. 20 of the Limitations Act, 2002, which provides “this Act does not affect the extension suspension or other variation of the limitation period or other time limit by or under another act. The court went on to find, alternatively, that if the transitional provisions applied, they retained the limitation period in the Solicitors Act and did not apply the new Limitations Act period. Section 4 of the Solicitors Act allowed a judge to find ‘special circumstances’ at any time after the solicitor’s accounts were delivered. Again, the distinction I see is that s. 4 remained in force after the Limitations Act came into effect while, in this case, the PEA extension provision was repealed by the time the appellant sought to rely on it.

As I see it, the question is a matter of straightforward statutory interpretation. Section 46(1) of the PEA stated that proceedings for damages arising from professional engineering services could not be commenced after twelve months. Read on its own, the section unequivocally stipulated a limitation period. Section 46(2) did not detract from this, but confirmed it by referring to ‘limitation period specified in subsection (1).’ Rather than qualifying the limitation period, section 46(2) bestowed the court with jurisdiction to extend the ‘limitation period’ in its discretion.

The appellant had not applied for an extension of the limitation period prescribed by s. 46(1) when the court’s jurisdiction to grant an extension by the Limitations Act, 2002 was repealed on January 1, 2004. Any right the appellant had to apply for an extension prior to the repeal of s. 46(2) was not an accrued or vested right. As Chouinard J. wrote in Quebec (Exploration Tribunal) v. Quebec (Attorney General) 1986 CanLII 13 (SCC), [1986] 1 S.C.R. 732 at 742:

A vested right is one which exists and produces effects. That does not include a right which could have been exercised but was not, and which is no longer available under the law. The courts and scholarly commentators distinguish between a vested right and what they call either a possibility or an option.

Since the right was not vested, the Motion Judge was correct that as a consequence of the repeal of s. 46(2) he could no longer grant an extension of the limitation period on an application made after January 1, 2004. The Motion Judge correctly decided that there was no genuine issue for trial as to whether the limitation period for bringing a claim in respect of professional engineering services had expired.

[109] The Iroquois Falls case was the subject of comment by the Court of Appeal in Meady v. Greyhound Canada Transportation Corp. (2008), 2008 ONCA 468, 90 O. R. (3d) 774 (C.A.). The court observed that:

In this court’s recent decision in Iroquois Falls....Juriansz J.A. held that ‘where the former limitation period preserved by s. 24(3) contained a statutory discretionary extension provision that was specifically repealed by s. 25 of the new Act, the repeal of the discretionary extension meant that it was not available to be used when applying the former limitation period under s. 24.’

[110] It is true that the Iroquois Falls decision touched upon the transition provisions contained in the Limitations Act, 2002. However, the transition provisions do not apply to this case because the plaintiff’s notice of action was issued approximately four years before the introduction of the Limitations Act, 2002 on January 1, 2004. By the time the new legislation was effective, the one year limitation period under s. 46(1) of the Professional Engineers Act had expired.

[111] The St. Jean case relied upon by the plaintiffs post-dates Iroquois Falls and Meady. The plaintiffs submit that the St. Jean decision is contrary to that in Iroquois Falls and in fact the court does not refer to the Iroquois Falls decision. However, I note that the court does refer to Meady in the course of its reasons.

[112] In the St. Jean case, the plaintiffs appealed from a decision dismissing their claim on the basis that it was out of time. In November, 1982, Robert St. Jean was born. He was severely hypoglycaemic, suffered a serious brain injury and was mentally incompetent as a result. In November 2002, a medical malpractice lawsuit was started on Robert’s behalf. The running of the limitation period was suspended in respect of the claim because of his mental incapacity. In 2004, the new Limitations Act, 2002 came into effect. In 2006, a second lawsuit was commenced on Robert’s behalf against different defendants. The plaintiff subsequently moved to consolidate the two actions.

[113] Based on the provisions of the new Limitations Act, 2002 the second action was found by the motions judge to have been commenced outside the relevant limitation period. As a result, the plaintiff’s motion for consolidation was dismissed and the second action was struck. The appeal revolved around what provisions applied to a claim pursued in the court for an act that occurred prior to January 1, 2004 – those that governed prior to January 1, 2004 or those contained in the new Limitations Act, 2002.

[114] The Court of Appeal allowed the appeal. It set aside the order below and ordered the first and second actions to be consolidated. Rule 2 of s. 24(5) of the Limitations Act was operative and former limitation period applied. The former limitation period in s. 24 included the postponement or suspension of the limitation period pursuant to s. 47 of the former Limitations Act. Therefore, the running of the limitation period continued to be suspended due to Robert’s mental incapacity and the second action was brought in time as a result.

[115] The plaintiffs place particular emphasis on the following observations of the court:

Legislation has retroactive application when the effect of applying its particular facts is to deem the law to be different from what it actually was when the facts occurred. The rationale that underlies the presumption against retroactive application is explained in Sullivan on the Construction of Statutes, 5th edition, [op. cit.]:

It is obvious that reaching into the past and declaring the law to be different from what it was is a serious violation of the rule of law. As Raz points out, the fundamental principle on which [the] rule of law is built is advance knowledge of the law. No matter how reasonable or benevolent retroactive legislation may be, it is inherently arbitrary for those who could not know its content when acting or making their plans and when retroactive legislation results in a loss or disadvantage for those who relied on the previous law, it is unfair a well as arbitrary... For these reasons, it is strongly presumed legislation is not intended to be retroactive.

To accept that the new Limitations Act applies even if a proceeding has been commenced before January 1, 2004, amounts to a retroactive application of its provisions because such an interpretation would have the effect of deeming the law to be different from what it was when the facts occurred. If Robert’s lawsuit against the new defendants had been commenced prior to January 1, 2004, the running of the former limitation period would have been suspended by virtue of s. 47 of the former Limitations Act. If the new Limitations Act were held to apply, it would operate backwards and impose a two year limitation period on Robert’s claim. That is, it would deem the law on limitation periods to be different from what it was at the time the proceeding was commenced.

The presumption against retroactive application means that statutes are not to be construed as having retroactive operation unless the construction is expressly, or by necessary implication, required by the language of the legislation. There is nothing in the scheme or purpose of the new Limitations Act that would overcome the application of the presumption....

Having said that, I would observe that procedural legislation is presumed to have immediate application – that is, it is assumed to apply to both ongoing and future proceedings. In that sense, it may be regarded as having retrospective effect as it will apply to ongoing litigation that was commenced under prior procedural rules. As previously indicated, a statute is retrospective – as opposed to retroactive – when it operates in a forward fashion to attach new legal consequences to an event that took place before the statute was enacted. Whether a statutory provision is purely procedural and accordingly, has retrospective application, is a matter that must be determined on the facts of each case. To be considered purely procedural, the application of the provision to the specific facts must not result in the interference with any substantive rights or liabilities of the parties or produce other unjust results...

While the new Limitations Act may have retrospective application in respect of purely procedural matters, extinguishing the right to pursue a claim is not purely procedural as it would alter a substantive right.

[116] The court went on to quote from Sullivan as follows:

When a new limitation of action provision comes into force, it may extend or shorten the period within which an action must be commenced. If the provision comes into force before the period has lapsed, and if applying it would not have the effect of extinguishing the right of action, then its application to those facts is said to be purely procedural. In such a case, for both parties, the only thing that is lost or gained is time. However, when the effect of applying the new provision is either to extinguish an action that was still viable when the provision came into force, or to revive an action that was barred, more than time is at stake. In such a case, the provision affects the substantive rights of the parties and cannot be considered purely procedural. [Emphasis added.]

[117] In my view, there is nothing inconsistent between the court’s decision in Iroquois Falls and St. Jean. Obviously, the St. Jean case considered the transition provisions of the Limitations Act. I would not distinguish the case on that basis. Rather, it must be noted that the plaintiffs did not apply to the court to extend the one year limitation period between the time they issued their notice of action on May 12, 2000 and the repeal of s. 46(2) of the Professional Engineering Act on January 1, 2004 with the introduction of the Limitations Act, 2002, a lapse of nearly three-and-a-half years. The effect of applying the new provision is not to extinguish an action that was still viable when the provision came into force, to borrow the words from St. Jean. The action had the potential to be viable had the court been persuaded before the proclamation of the new Limitations Act, 2002 to extend the time. However, the plaintiff did not seek an extension and any potential to revive their claim expired.

[118] As to the plaintiff’s argument that the claim against the professional engineers sounds in misrepresentation and therefore professional misconduct rather than the provision of professional services, I return to a consideration of the allegations being made against the Spriet defendants.

[119] The Professional Engineers Act defines the practice of professional engineering as follows:

The practice of professional engineering means any act of planning designing, composing, evaluating, advising, reporting, directing or supervising that requires the application of engineering principles and concerns, the safeguarding of life, health, property, economic interests, the public welfare or the environment, or the managing of any such act.

[120] There can be no doubt that there are allegations of misrepresentation to the plaintiffs, their legal engineering representatives, as well as the Drainage Tribunal. However, the essence of the pleading is that the engineering defendants breached their statutory duty to inform the owners in the area requiring drainage as to the problems with the construction and the supposed remedy which had been undertaken.

[121] Therefore, the fundamental nature of the claim is for a breach of professional responsibilities and in particular, the failure to report and advise. In my view, the claim falls squarely within the provisions of the Act.

[122] Therefore, the answer to Question #3 is “Yes”.

4. Does s. 79 of the Drainage Act allow any claims other than as against the Corporation of the Municipality of Southwest Middlesex?

[123] Section 79 of the Drainage Act provides as follows:

79. (1) Upon 45 days’ notice served by any person affected by the condition of a drainage works, upon the head or clerk of the local municipality whose duty it is to maintain and repair the drainage works, the municipality is compellable by an order of the referee to exercise the powers and to perform the duties conferred or imposed upon it by this Act, as to maintenance and repair or such of the powers and duties as to the referee appears proper, and the municipality is liable in damages to the owner whose property is so injuriously affected.

(2) Despite subsection (1), the local municipality whose duty it is to maintain and repair drainage works shall not become liable in damages to any person affected by reason of the non-repair of the drainage works until after service by or on behalf of such person of the notice referred to in subsection (1) upon the head or clerk of the municipality, describing with reasonable certainty the alleged lack of maintenance and repair of the drainage works.

(3) The local municipality whose duty it is to maintain and repair a drainage works is not liable in damages for any injury caused by reason of a drainage works being blocked by snow or ice and overflowing the lands of any person without negligence on the part of the municipal corporation.

[124] The Spriet and Wolfe defendants submit that s. 79(1) of the Drainage Act varies the common law in drainage matters by creating a statutory cause of action, which imposes strict liability on a municipality for any damages sustained by any person affected by the condition of a drainage works. The cause of action is complete once an owner of property whose property has been injuriously affected establishes that his or her damages arise out of the condition of the drainage works. There is no need for the owner whose property is injuriously affected to prove the reason the condition of the drainage works has caused his or her damages.

[125] The defendants submit that it is immaterial that the damage was caused by negligence on the part of the municipality or an engineer or contractor retained for repair or maintenance work on the drainage works. Further, it does not matter whether the design of the drainage works was defective or if the construction was defective. Nor does it matter that the drainage works were interfered with by a third party or a land owner. The defendants say that in all cases, the statutory cause of action is complete upon an owner of land being injuriously affected by the condition of the drainage works.

[126] They assert that the allegations of breach of fiduciary duty and fraudulent concealment are red herrings because the failure to disclose the benchmark error or any construction problem is irrelevant. The reason for the failure of the drainage works is irrelevant to the strict liability cause of action, which is complete upon the damages being sustained because of the condition of the drainage works. It does not matter whether the claim sounds in nuisance or negligence because as held in Hud and Robinson, all claims, even those at common law, must be brought under the statute.

[127] The plaintiffs assert that the Act does not deal with negligent design, construction or construction supervision. It does not deal with nuisance or whether a fiduciary duty exists in the circumstances. It deals only with a municipality’s duty to maintain and repair a drain once constructed. They submit that the Robinson case, and those other cases on which the defendants rely, are distinguishable. Finally, they submit that any ambiguity ought to be resolved in their favour and that if “the plaintiffs have even a smidgeon of a cause of action, then the defendants’ action [sic] must fail and the plaintiffs be permitted to proceed with their action on all grounds”.

[128] As a preliminary matter, on the issue of ambiguity, I cannot agree with the plaintiffs. They rely on Orden Estate v. Grail, 1998 CanLII 771 (SCC), [1998] 3 S.C.R. 437 in support of their proposition that any ambiguity about which limitation period applies at a given time is to be resolved in favour of the plaintiffs, presumably permitting them to proceed to trial. Respectfully, that is not what the Orden Estate case stands for. In that case, the appeals arose out of four negligence actions in relation to two boating accidents. The Canada Shipping Act contained two different limitation periods, both of which applied to fatal accident claims. The court said that that situation created a contradiction or ambiguity as to which limitation period should apply. In those circumstances, the court recognized “that statutory provisions creating a limitation period must be strictly construed in favour of the plaintiff...”. Following this principle of statutory construction, the court held that the ambiguity created by the existence of two distinct and different limitation periods in the Act should be resolved by permitting the plaintiffs to rely upon the longer period of two years. This case does not stand for the broad proposition that any ambiguity about which limitation should apply is to be resolved in favour of the plaintiff. Indeed, the court is called upon on a Rule 21 motion to make that precise determination.

[129] Moreover, I disagree with the proposition that even if there is a “smidgeon of a cause of action”, then the plaintiffs should be permitted to proceed. That may well be a gloss on the test for a motion pursuant to Rule 21.01(1)(b) to strike a claim on the basis that it discloses no reasonable cause of action. However, it is not the test that applies on this motion.

[130] Turning then to the analysis, s. 79 speaks to liability arising from maintenance and repair both of which are defined terms in the Act. Maintenance means the preservation of a drainage works. Repair means the restoration of a drainage works to its original condition. Drainage works is defined as including a drain constructed by any means, including the improving of a natural water course and includes works necessary to regulate the water table or water level within or on any lands, or to regulate the level of the waters or of a drain, reservoir, lake or pond, and includes a dam, embankment, wall, protective works or any combination thereof.

[131] It occurs to me that s. 78 of the Act is also relevant. It provides as follows:

78. (1) If a drainage works has been constructed under a by-law passed under this Act or any predecessor of this Act, and the council of the municipality that is responsible for maintaining and repairing the drainage works considers it appropriate to undertake one or more of the projects listed in subsection (1.1) for the better use, maintenance or repair of the drainage works or of lands or roads, the municipality may undertake and complete the project in accordance with the report of an engineer appointed by it and without the petition required by section 4.

(1.1) The projects referred to in subsection (1) are:

1. Changing the course of the drainage works.

2. Making a new outlet for the whole or any part of the drainage works.

3. Constructing a tile drain under the bed of the whole or any part of the drainage works.

4. Constructing, reconstructing or extending embankments, alls, dykes, dams, reservoirs, bridges, pumping stations or other protective works in connection with the drainage works.

5. Otherwise improving, extending to an outlet or altering the drainage works.

6. Covering all or part of the drainage works.

7. Consolidating two or more drainage works.

[132] Improvement is defined in the Act as any modification of or addition to a drainage works intended to increase the effectiveness of the system.

[133] With that framework, it seems to me that the Saxon Drain is the drainage works that the plaintiffs have claimed was not adequate or properly functional to provide an outlet for their water since 1975 when the work was originally completed. It was the underlying condition of the drainage works that consistently has caused damage to the plaintiffs’ property from 1975 until 2000. Accordingly, the claim lies against the municipality for damages to the plaintiffs as owners of property injuriously affected.

[134] It is trite that the plaintiffs can recover their damages only once. There is no need to retain experts to testify about the reason why the plaintiffs’ property was injuriously affected because the municipality’s liability is strict. This is consistent with the interpretation of the Act as essentially a complete code for the timely and efficient adjudication of drainage disputes articulated in such decisions as Hud and Robinson. Although I have distinguished those cases on the limitations issue, that basic principle remains. The Act specifically removes liability from other persons and entities by imposing duties of repair and maintenance on the municipality, even when the lack of repair or maintenance is caused by the actions of third parties. Support for this conclusion is found in s. 80 of the Act, which compels a municipality to remove obstructions caused by others and to collect the cost of such work from the owner of the land where the work is carried out.

[135] In summary, it seems to me that the work undertaken by the Wolfe defendants falls within s. 78 and that work was for the better use, maintenance or repair of the drainage works. This, in turn, seems to fall squarely within s. 79 allowing an owner to compel a municipality to maintain and repair. The municipality’s liability is strict and damages are available once the plaintiffs establish that their property was injuriously affected. They need not demonstrate any error on negligence on the part of the Spriet or Wolfe defendants. The cause of action is complete upon damages being sustained because of the condition of the drainage works.

[136] Accordingly, the answer to Question #4 is “No.”

[137] If the parties cannot agree on costs, I will receive written submissions from the defendants by October 14, 2013 and from the plaintiffs by October 28, 2013.

“Justice H. A. Rady”

Justice H. A. Rady

Date: September 27, 2013

COURT FILE NO.: 34152

DATE: 2013/09/27

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Thomas Ward and Jeanette Ward

Plaintiffs

• and -

The Corporation of the Municipality of Southwest Middlesex, formerly known as The Corporation of the Township of Ekfrid, A.M. Spriet Associates Limited also known as Spriet Associates, Spriet Associates London Limited and John H. Wolfe and Grant Wolfe

Defendants

ENDORSEMENT

RADY J.

Date released: September 27, 2013

[^1]: Robinson v. Essex, supra, [^2]: Section 79(2) provided as follows: Notwithstanding anything contained in subsection 1, the municipality whose duty it is to maintain and keep in repair a drainage work, shall not become liable in pecuniary damages to any owner of land whose property is injuriously affected by reason of the non-repair of such drainage work, unless and until after service by or on behalf of such owner of notice in writing upon the reeve or clerk of such municipality, describing with reasonable certainty the alleged lack of repair of such drainage work. R.S.O. 1914, c. 198, s. 80. [^3]: This was the version of the Act in force when the plaintiffs issued their notice of action on May 12, 2000.