2017 ONSC 7812

COURT FILE NO.: CV-12-0368

DATE: 20170125

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

LEANDRA RUTTAN and BRANT COOK

Plaintiffs

– and –

THE CORPORATION OF THE TOWNSHIP OF STRONG

Defendant

Ilia Valitsky, Counsel for the Plaintiffs

Michael M. Miller, Counsel for the Defendant

HEARD: January 17, 2017

REASONS FOR DECISION

DiTOMASO J.

THE MOTION

[1] The Plaintiffs, Leandra Ruttan (Ruttan) and Brant Cook (Cook) seek to amend their Statement of Claim which was issued on March 28, 2012. The original claim sought damages arising from the installation of a replacement culvert on South Lake Bernard Road by the Defendant, The Corporation of the Township of Strong (the Municipality).

[2] The Municipality takes no objection to those amendments which relate to the installation of the culvert or damages which allegedly arose from the installation of that culvert.

[3] Prior to commencement of this motion, the Municipality consented to the amendments sought with respect to paragraphs 2, 4, 4(a), 6, 7, 15(a), 20, 21, 27, 28(b), 31, 32, 33, 35, 37, 38, 39, 40, 42(d), 48, 49, 51(e), 63(a), 63(b), 64 and 65 of the draft Amended Statement of Claim (attached to the Notice of Motion and marked as ‘Schedule A’). The Municipality does object to the amendments sought in paragraphs 4(b), 54, 55, 56, 57, 58, 59, 60, 61, 62, 63(c), (d) and (e) as allegedly they relate to an entirely new cause of action regarding a boundary issue between the Plaintiffs’ property and the property of the Municipality’s road allowance.

[4] The Plaintiffs also seek a declaration that a portion of the roadway which the Municipality occupies is the Plaintiffs’ property. The Plaintiffs seek leave to amend their Statement of Claim to include allegations that arise from the issue concerning the boundaries of the Plaintiffs’ land.

[5] Save for the proposed amendments to the Statement of Claim to which the Municipality has consented, the Municipality submits that the motion ought to be dismissed. On the other hand, the Plaintiffs assert that all of the amendments should be permitted pursuant to Rule 26.01 of the Rules of Civil Procedure.

OVERVIEW

[1] The Plaintiffs issued their Statement of Claim on March 26, 2012 seeking damages arising from what the Plaintiffs allege was the improper installation of a culvert on South Lake Bernard Road.[^1]

[2] The Plaintiffs allege that the culvert installation has affected water levels in Pool Lake which in turn has flooded their lands and damaged their home.[^2]

[3] The timeline for the exchange of pleadings, the exchange of documents and examinations in this action can be summarized as follows:

(a) Statement of Claim issued March 26, 2012;

(b) Statement of Defence filed May 14, 2012;

(c) Plaintiffs’ Reply filed July 28, 2012;

(d) Affidavits of Documents exchanged in January and March, 2013;

(e) Examinations for Discovery conducted June 3 and 5, 2013

(f) Plaintiffs set action down for trial on November 13, 2014.[^3]

[4] The first pre-trial date was set for July 8, 2015 but in April 2015, Plaintiffs’ counsel requested an adjournment as they were obtaining additional expert reports. The first pre-trial date was adjourned to October 23, 2015.[^4]

[5] The Defendant requested an adjournment of the October 23, 2015 pre-trial date as its expert reports were not ready. The Plaintiffs refused that request.[^5]

[6] The pre-trial of October 23, 2015 was adjourned to January 8, 2016 when no judge was available.[^6]

[7] The Plaintiffs requested an adjournment of the pre-trial set for January 8, 2016 to April 25, 2016.[^7]

[8] The pre-trial date of April 25, 2016 was adjourned to October, 2016, when the Plaintiffs retained new counsel.[^8]

[9] At the pre-trial, the Plaintiffs advised of their intention to amend their original Statement of Claim to seek further relief related to the resolution of the boundaries of the Plaintiffs’ land. Also at the pre-trial on October 7, 2016, the Plaintiffs advised that they were no longer in a position to tender the expert report from their engineer at Tulloch Engineering as the engineer that had prepared the report had left Tulloch to start a new job and could no longer testify at the trial.[^9] The Plaintiffs are in the process of retaining Crozier & Associates to replace Tulloch Engineering as their experts. Unfortunately, the Crozier report will take longer than expected because Crozier has indicated that it needs to see the Plaintiffs’ land during the spring thaw.

[10] This matter is scheduled for trial during the May 2017 sittings at Barrie. The Plaintiffs advise that they will be requesting an adjournment of the trial date, as they do not yet have the Crozier report.

ISSUE

[11] The issue is whether the Plaintiffs are entitled to amend their Statement of Claim to include those paragraphs objected to by the Municipality.

POSITION OF THE PARTIES

Position of the Plaintiffs Ruttan and Cook

[12] The Plaintiffs submit that the following factors favour granting leave to amend the Statement of Claim in accordance with the draft Amended Statement of Claim and militate against severing the amendments:

(a) The issue of the boundaries of the Plaintiffs’ Lands has always been an issue in this action and should be resolved in a single trial;

(b) Both parties have already produced documents relating to the boundaries of the Plaintiffs’ Lands and the Municipality has retained an expert to review the Raikes Survey;

(c) The draft and the original Statement of Claim have common issues of fact and law that arise out of the Municipality’s ongoing wrongful conduct and the dispute over the boundaries of the Plaintiffs’ Land;

(d) There has not been significant delay in this action and the remaining amendments will not add undue delay as their determination depends on the court’s ruling on the boundaries of the Plaintiffs’ Lands;

(e) The Municipality has produced no evidence of any prejudice that cannot be compensated by an adjournment, costs, or another order that this court may find appropriate in the circumstances;

(f) Rule 26.01 entitles the Plaintiffs to amend the Statement of Claim in the absence of non-compensable prejudice; and,

(g) The Municipality has not made out a strong factual foundation of potential adverse consequences justifying a deviation from the basic principle that all issues between Parties ought to be resolved in a single trial.

Position of the Defendant Municipality

[13] The Municipality submits that the bringing of a new cause of action, totally unrelated to the existing issues, would substantially delay the trial of this action and would increase the costs to all Parties in a matter not capable of compensation. The trial of both actions together would add a minimum trial time to the new action of two to three weeks’ time that cannot be recovered or compensated by costs. The alleged prejudice that will arise to the Municipality is summarized as follows:

(a) The alleged negligence and nuisance arising from the change in the Municipality’s culvert is an insurable claim covered by the Municipality’s comprehensive liability policy. The law firm of Russell, Christie, LLP was retained to act on behalf of the Municipality and to defend that claim. The claim arising from the boundary dispute and ownership of an open road allowance is not the insurer’s responsibility and is not covered by a liability insurance policy.[^10]

(b) The Municipality will, of necessity, have to hire its own solicitor to deal with the ownership claim. The issue arising from the culvert was estimated in March, 2016 to be a ten-day trial and that estimate was extended by an unknown additional amount of time on October 7, 2016.[^11] [^12]

(c) The further pre-trial date scheduled for April 16, 2017 will not proceed if the Statement of Claim is amended, as further Affidavits of Documents, further Examinations for Discovery and additional expert reports will be necessary.

(d) The Municipality will have to commence its own action seeking a declaration that a cottage structure owned by the Plaintiffs be removed from the Municipality’s shore road allowance if the Municipality is required to remove its public access to accommodate the Plaintiffs’ ownership claim.[^13]

(e) There is no economic saving having this new cause of action appended to the existing proceeding. The addition of this new cause of action to the current action will delay the trial of the culvert issue by a minimum of one or two years. The Plaintiffs have already lost one expert witness as a result of lengthy delay in having this matter proceed to trial and there is every likelihood that either the Plaintiffs or the Municipality will have difficulty retaining expert witnesses for this lengthy period of time and locating both municipal and civilian witnesses for the trial of the culvert issue.[^14]

[14] The Municipality submits that in this action, no evidence has been provided by the Plaintiffs to demonstrate an “absence of non-compensable prejudice to the Responding Party”.

[15] It is submitted that the Municipality’s use of what it believes to be its road allowance as public access to Pool Lake was an ongoing circumstance on the date this action was commenced. It is submitted that the Plaintiffs had ample opportunity over the past five years to have carried out whatever investigations they deemed appropriate to challenge the Municipality’s ownership of these lands, but failed to do so until only recently.

[16] It is further submitted that should the amendments be permitted, there ought to be a severance of the new claims.

[17] In conclusion, the Municipality submits that adding this new claim will unduly complicate the hearing, lengthen both issues, delay the hearing of the existing action and cause prejudice to the Municipality which cannot be compensated by costs. The Municipality seeks an order dismissing the opposed amendments to the draft Amended Statement of Claim.

ANALYSIS

[18] This action commenced by Statement of Claim on March 16, 2012 raises allegations of negligent and/or bad faith conduct by the Municipality with respect to the land owned by the Plaintiffs’ family on the western shore of Pool Lake in the Township of Strong. The original Statement of Claim alleges that the Municipality’s conduct and disregard for the Plaintiffs’ rights caused flooding of the Plaintiffs’ land and damage to their property for which the Plaintiffs seek compensatory and punitive damages. The Plaintiffs also advanced a claim against the Municipality for nuisance by constructing an inadequate culvert which has interfered with or altered the natural water course on Pool Lake, such that the levels of the lake are now unnaturally high, thereby causing damage to the Plaintiffs’ lands. In its Statement of Defence, the Municipality denies the Plaintiffs’ claims. The Municipality alleges, among other things, that the Plaintiffs’ home and cottage were “improperly constructed on the lands of the Defendant, being the shore road allowance” and “it is the position of the Defendant that [the Plaintiffs’ Property] should be removed from the Defendant’s property and relocated”. (See Statement of Defence, paras. 4 and 15)

[19] The Plaintiffs assert that the location of the boundaries between their land and the Municipality’s land, including a shore road allowance surrounding Pool Lake, has always been an issue in this action. During Examinations for Discovery, both the Plaintiffs and the Defendant were examined on the issue of boundaries of the Plaintiffs’ land and the surrounding road allowances. In respect of the boundaries issue, the Plaintiffs had retained surveyors and engineers. The Plaintiffs submit in and around August, 2016, while this action was outstanding, the Municipality advertised to the public that it owned land within the boundaries of the Plaintiffs’ lands. The Plaintiffs characterize this conduct as yet another example of continuing bad faith conduct asserted in the original Statement of Claim. The Municipality submits that such advertisement was not bad faith conduct, and in any event, does not rise to the level of bad faith conduct at all.

[20] Rule 26.01[^15] provides that “the court shall grant leave to amend the pleading on such terms as are just unless prejudice would result that could not be compensated for by costs or by an adjournment.” The Ontario Court of Appeal in Marks v. Ottawa (City)[^16], has indicated that an amendment should be allowed unless it would cause an injustice not compensable in costs.

[21] The Municipality asserts that the bringing of a new cause of action, totally unrelated to the existing issues, would substantially delay the trial of this action and would increase the costs to all Parties in a manner not capable of compensation by costs.

[22] I find that the proposed amendments in dispute do relate to a new cause of action. I have come to this finding by reviewing the original Statement of Claim, the Statement of Defence, the Reply and the proposed Amended Statement of Claim.

[23] The Plaintiffs, in their original Statement of Claim, seek damages for negligence and nuisance arising out of the replacement of a culvert by the Municipality. There are allegations of flooding and damage to the Plaintiffs’ property. There is a claim for punitive damages at paragraph 52 of the original Statement of Claim where the Municipality’s actions are described as “flagrant, malicious and a callous disregard for the rights of the Plaintiffs”. The words “malfeasance and bad faith” as appear in the proposed Amended Statement of Claim appear nowhere in the original Statement of Claim.

[24] I find the Plaintiffs seek to include in the amended claim a totally different claim relating to the Cook’s Driveway and issues relating to that driveway which I find have nothing to do with the original claim for damages based on negligence and nuisance arising out of the replacement of the culvert. Rather, a review of the contested amendments relate to injunctive relief sought in the removal of the Municipality signage regarding the Cook’s Driveway, suggesting to the public that the driveway is public property and/or property of the Municipality and injunctive relief requiring the Municipality to remove notices on the Internet or elsewhere indicating that the Municipality owns a portion of the Cook’s Driveway on the Plaintiffs’ lands. A declaration is sought regarding the location of the boundary of the Plaintiffs’ lands. Interestingly, the Plaintiffs also seek an order granting them the right to place a barrier across the Cook’s Driveway in order to close the road in accordance with the Road Access Act. In essence, these proposed amendments transform the fundamental nature of the original action from one based in negligence and nuisance into an additional and different cause of action based upon a property dispute between the Plaintiffs and the Municipality, which includes injunctive and declaratory relief, as well as relief sought pursuant to the Road Access Act.

[25] I do not agree with the submissions of Plaintiffs’ counsel that these amendments do not frame a new cause of action but area only illustrative of continuing bad faith conduct on the part of the Municipality. I find there is no commonality between the factual or legal issues being asserted by the Plaintiffs in the proposed amendments being sought.

[26] I further note that the proposed amendments agreed to by the Municipality all relate to the replacement of the culvert issues. The amendments not consented to relate to the new claim being advanced by the Plaintiffs by way of their proposed amendment.

[27] Referring to the “malfeasance and bad faith” proposed amendments commencing at paragraph 54 through to paragraph 65 concerning the Cook’s Driveway issue, its use, alleged trespass, a gate removal, signage dispute, conflicts between the Plaintiffs and members of the public – all relate to a property dispute between the Plaintiffs and the Municipality. I find this property dispute has nothing to do with the replacement of the culvert issue which is what this action is all about.

[28] This entirely new cause of action relates to a boundary issue between the Plaintiffs’ property and the Municipality’s road allowance. I disagree with the Plaintiffs’ position which I have previously outlined. I find that the mandatory language of Rule 26.01 granting leave to amend the pleading is not permissible in this case. The Plaintiffs rely on McIntyre v. Arena Development Ltd., [1961] OWN 164, where the court held that amendments that plead a new cause of action will be permitted where the amendments would, if brought by a separate action, be consolidated into the existing action. The Plaintiffs rely upon Rule 6.01(1) of the Rules of Civil Procedure which provides that actions may be consolidated for any one of the following:

• They have a question of law or fact in common;
• The relief claimed arises from the same series of transactions; or,
• There is any other compelling reason for consolidation.

[29] I find the amendments do not satisfy any or all of Rule 6.01(1) criteria.

[30] I do not agree that there are common questions of law and fact which give effect to consolidation. I am not persuaded that the resolution of the boundaries of the Plaintiffs’ lane is germane to the entire dispute and is necessary for both Parties to support their positions as originally pleaded. As I have found, what is proposed by the Plaintiffs is a new cause of action, complete with allegations of malfeasance and bad conduct, entirely unrelated to the installation of a replacement culvert and the alleged damages resulting thereto based on negligence and nuisance.

[31] I further find that the proposed amendments create prejudice to the Municipality that cannot be compensated by costs or by an adjournment. I disagree that a single trial of the matters in dispute between the Parties would guarantee a cost savings for the Parties, increase efficiency and provide for a final resolution of all aspects of the Parties’ dispute.

[32] To the contrary, the new cause of action, totally unrelated to the existing and original issues, would substantially delay the trial of this action and would increase the costs to all Parties in a manner not capable of compensation by costs. The trial of all of the issues together would increase trial time by an additional two to three weeks and that time cannot be recovered or compensated by costs.

[33] The Ontario Court of Appeal in Gowenbrae Realty Developments Ltd. v. McLean-Peister Ltd.[^17] held:

The amendment to introduce a new cause of action, especially after trial, may only be permitted where an absence of non-compensable prejudice to the responding party is clearly made out. This essential requirement is not satisfied in this case.

[34] I find that in the within action, no evidence has been provided by the Plaintiffs to demonstrate an “absence of non-compensable prejudice to the responding party”.

[35] I agree with the submissions of counsel for the Municipality. There is no economic saving having this new cause of action appended to the existing proceeding. The addition of this new cause of action to the current action will delay the trial of the culvert issue by a minimum of one to two years. The Plaintiffs have already lost one expert witness as a result of the lengthy delay in having this matter proceed to trial and there is every likelihood that either the Plaintiffs or the Municipality will have difficulty in retaining expert witnesses for this lengthy period of time and locating both municipal and civilian witnesses for the trial of the culvert issue.

[36] In Family Delicatessen Ltd. v. London (City), the Ontario Court of Appeal stated that:

While delay is not in and of itself a basis for refusing an amendment, there must come a point where the delay is so long and the justification so inadequate that some prejudice to the defendants will be presumed, absent a demonstration by the party seeking the amendment that there is, in fact, no prejudice despite the lengthy and unexplained delay.[^18]

[37] On the date that the action was commenced in 2012, the use by the Municipality of what it believed was its road allowance as public access to Pool Lake is described by the Municipality as “an ongoing circumstance”. It was only recently that the Plaintiffs deemed it appropriate to challenge the Municipality’s ownership of these lands by virtue of the proposed amendments to the Statement of Claim. I find that permitting the proposed amendments in dispute would delay the trial and would be further unfair to the Municipality. (See Dee Ferraro Limited v. Pellizzari, 2012 ONCA 55. The new claim being proposed by the amendments to the Statement of Claim, in my view, would unduly complicate the hearing, lengthen the issues, delay the hearing of the existing action and cause prejudice to the Municipality non-compensable by costs.

DISPOSITION

[38] For these reasons, there shall be an order dismissing that portion of the Plaintiffs’ motion seeking the amendments to the Statement of Claim as follows:

(a) An order dismissing that portion of the Plaintiffs’ motion seeking the amendments to the Statement of Claim set out in paragraphs 4(b), 54, 55, 56, 57, 58, 59, 60, 61, 62, 63(c), (d) and (e) of the draft Amended Statement of Claim; and,

(b) Further, an order dismissing paragraphs 1(e.1) to (e.4) inclusive, all of which relate to the relief sought regarding the Cook’s Driveway property issue.

Costs

[39] As for costs, the Parties agree that costs will be determined by written submissions. Within 14 days of this Decision, counsel shall exchange and file with my judicial assistant at Barrie, a concise statement as to costs no longer than two pages in length, a costs outline, draft bills of costs together with any applicable authorities. Within that time period, the exchange of written submissions would also include the Moving Parties’ reply submissions, if any.

DiTOMASO J.

Released: January 25, 2017

[^1]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 2, para. 2) [^2]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 1, para. 3) [^3]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 2, paras. 4, 5, 6, 7 & 8) [^4]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 [^5]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 2, para.9) [^6]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 3, para. 11) [^7]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 3, para. 13) [^8]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 3, para. 14) [^9]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 3, para. 15) [^10]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 2, para. 5 & p. 5, para. 23) [^11]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p.5, para. 24) [^12]: Affidavit of Natia Esartia, sworn December 16, 2016 (Motion Record of the Plaintiffs, Exhibit “D”, Tab 2D, p. 53) [^13]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 5, para. 21) [^14]: Affidavit of Ann-Marie Tindale, sworn January 3, 2017 (Responding Party’s Record, Tab 1, p. 6, para. 28) [^15]: Rule 26.01 of the Rules of Civil Procedure [^16]: Marks v. Ottawa (City)(2011), 2011 ONCA 248 [^17]: Gowanbrae Realty Developments Ltd. v. McLean-Peister Ltd., 2005 CarswellOnt 7277 (ON CA) [^18]: Family Delicatessen Ltd. v. London (City), 2006 CarswellOnt (ON CA)