Brunato Farms Ltd. v. Sabelli, 2020 ONSC 4121

COURT FILE NO.: CV-12-17852

DATE: 20200703

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Brunato Farms Ltd. and Tri-B Acres Inc.

Plaintiffs

– and –

Frank Sabelli, Anna Sabelli and

Sabelli Boiler Works Inc.

Defendants

AND BETWEEN:

Frank Sabelli and Sabelli Boiler Works Inc.

Plaintiffs by Counterclaim

– and –

Brunato Farms Ltd. and Chris Del Greco

Defendants by Counterclaim

James H. Cooke and Kyla Fair,

Counsel for the Plaintiffs

Raymond G. Colautti and Anita Landry, Counsel for the Defendants

Raymond G. Colautti and Anita Landry, Counsel for the Plaintiffs by Counterclaim

James H. Cooke and Kyla Fair,

Counsel for the Defendants by Counterclaim

HEARD: April 11, 12, 13, 17, 18 & 20, 2018; December 11, 12 & 13, 2018;

January 14, 15, 16, 17 & 18, 2019;

March 12, 2019; June 18, 19, 20, 2019;

and August 21 & 22, 2019

REASONS FOR JUDGMENT

KING j.

BACKGROUND

[1] Between the years 1999 and 2012 the adversaries in this litigation were adjacent property owners in Leamington, Ontario. Having said that, as will be observed from the evidence on this trial, there was nothing “neighbourly” about their relationship.

[2] On March 11, 2009, Mr. Chris Del Greco (“Del Greco”) discovered water inside a greenhouse owned by the plaintiffs near the boundary of the mostly undeveloped property owned by the defendant Sabelli Boiler Works Inc. (“SBW”). This will be referred to as the “flooding incident” and it triggered a lengthy series of legal actions which have culminated in this trial.

[3] The corporate plaintiffs in this action (CV-12-17852) (and defendants by counterclaim) are the related companies Brunato Farms Ltd. (“Brunato”) and Tri-B Acres Inc. (“Tri-B”). The principals of these companies were members of the Brunato family and Mr. Chris Del Greco. Mr. Del Greco is also the individually named defendant on the counterclaim.

[4] SBW purchased the land immediately adjacent to the west of the plaintiffs’ property in 1999. The individual defendants, Frank Sabelli (“Mr. Sabelli”) and Anna Sabelli (“Mrs. Sabelli”) were spouses and the principals of SBW. Mr. Sabelli and SBW are the plaintiffs by counterclaim. Mr. Sabelli was the controlling mind of SBW.

[5] In essence, this is principally a tort claim as the plaintiffs are seeking damages arising from the flooding incident. However, this claim has been framed by the plaintiffs as a breach of contract for reasons that will become apparent on a review of the extensive litigation history in the years that followed the flooding incident.

[6] The plaintiffs commenced Superior Court matter CV- 10-14402 on February 16, 2010, seeking damages from the flooding incident and other remedies. They also pursued remedies against the defendants before the Normal Farm Practices Protection Board (“NFPPB”), pursuant to an application dated December 15, 2009.

[7] Action CV-10-14402 was discontinued with prejudice on November 16, 2010 (during the currency of an NFPPB hearing), pursuant to written Minutes of Settlement (“Minutes of Settlement” or “MOS”).

[8] The plaintiffs assert they should be permitted to pursue that original tort action because the defendants breached their contractual obligations set out in the Minutes of Settlement. They assert the MOS formed a binding contract which was breached, individually and collectively, by the defendants. For that reason, they have structured this action as a breach of contract. They seek a declaration that the appropriate remedy is a declaration that the Minutes of Settlement should be rescinded as a result. Such a declaration by the court would then entitle them to resurrect and pursue the original tort claim for damages.

ISSUES

[9] The overarching threshold and merits issues to be determined are, as follows:

1. Should the plaintiffs be permitted to pursue their original tort claim? More specifically, should they be precluded (i) on a jurisdictional basis due to res judicata issue estoppel; or (ii) by an interpretive legal impediment arising out of the Minutes of Settlement?

2. If the court determines that the plaintiffs are permitted to pursue their original tort claim, have they established on a balance of probabilities that the negligent actions of the defendant(s), in whole or in part, caused the Tri-B greenhouse to flood on March 10, 2009?[^1]

3. If Issue #2 is answered affirmatively, what is the quantum of damages suffered by the plaintiffs? (It is noted that while the court heard some evidence regarding the damages alleged to have been suffered by the plaintiffs, the parties agreed that issues related to damages would not be fully adjudicated at this time.)

4. If the court determines the plaintiffs are precluded from having their tort claim adjudicated, are they entitled to any other remedy arising out of the alleged breach of the Minutes of Settlement by the defendants? If so, what would be the appropriate remedy?

Note Regarding Trial Proceedings

[10] A comment requiring the process of this trial is warranted from the outset. Before the trial commenced, both legal counsel estimated to trial coordination that this trial would be completed in approximately six days. The trial commenced on Wednesday, April 11, 2018. That was the second week of a two-week trial sitting and only April 11, 12 and 13, 2018 were initially scheduled.

[11] During the opening statement by the plaintiffs on April 11, 2018, it was evident (almost immediately) to the court that:

1. Both parties intended to introduce voluminous documentary and photographic evidence. As well, their intended evidence included, inter alia, proposed expert witness reports and testimony from each party.

2. There was a significant threshold issue to be determined revolving around a legal interpretation of the Minutes of Settlement dated November 16, 2020 (issue #1 above).

[12] As well, the parties asserted there needed to be extensive evidence heard to determine whether:

a) the actions of the defendants were negligent and caused the flooding incident; and

b) the defendants had breached the Minutes of Settlement.

[13] The court asked counsel initially, and on other occasions, if it would be more expeditious to have the threshold issue determined first. Then, if required, the court would proceed to hear the extensive evidence regarding the flooding incident and the issues relating to the purported breach of the Minutes of Settlement.

[14] Both counsel were firmly of the view that the court needed to hear the entirety of the evidence in order to determine the threshold issue. I respected and accepted those representations. Accordingly, the matter continued with the court hearing all of the evidence. (As indicated, there was an exception with respect to some of the evidence related to the quantification of the alleged damages, as these issues were deferred.)

[15] In the end, the trial required 20 days between April 11, 2018 and August 22, 2019 to be completed.

[16] This narrative may be relevant with respect to issues of costs and other issues as neither party can suggest the conduct of the other unnecessarily lengthened the duration of this proceeding (rule 57.01(1)(e)).

EVIDENCE

A. General Comments Regarding The Evidence

[17] Both parties presented voluminous documentary evidence at trial. There were 49 exhibits. Many of those individual exhibits were comprised of bound books each containing several hundred pages of documents and photographs.

[18] The court reviewed several hundred photographs, including: aerial photographs of the relevant lands over many years; video evidence; various land surveys and greenhouse blueprints; and hundreds of documents and materials relating to the extensive litigation history. That history included: this action, action CV-10-14402; a second action, CV-11-16273 (joined to this action); several injunction applications and proceedings before the NFPPB, proceedings pursuant to the Drainage Act; the appointment of an arbitrator; and various municipal by-law proceedings.

[19] In addition to Mr. Chris Del Greco, the plaintiffs called viva voce evidence from a number of other witnesses.

[20] As well, the plaintiffs relied on the evidence of its proposed expert, Mr. Heide Mikkelsen, P. Eng.

[21] Mr. Sabelli testified on behalf of the defendants.

[22] Mr. Luigi Lecce, P. Eng. also testified for the defendants. He was proposed as the expert witness for the defendants.

[23] In reaching this decision, I have reviewed and considered all of the evidence. However, I will only refer to those portions of the evidence that I have considered essential in reaching this decision.

[24] In particular, I have attempted to provide meaningful reasons and follow the process recently outlined in Welton v. United Lands Corporation Limited, 2020 ONCA 322. In that case, the trial judge did what the court referred to as “data dump” consisting of a 74-page recital of all evidence and then repeated some of that evidence in the analysis. Lauwers J.A. addressed this at paras. 56, 58 and 61, as follows:

I conclude by expressing a concern about the length of the reasons for decision in this case, which is reflective of an unfortunately growing trend, of which this is not the worst example, but it is the one before us.

More specifically, in their reasons trial judges identify the key issues; find the facts relevant to the issues; assess credibility and reliability where there is conflict; set out the chain of reasoning; make the decision; and then write the reasons to clearly communicate the decision. All of this is necessary for the reasons to be of acceptable quality and for there to be a meaningful right of appeal. (All of these elements are present in the reasons in this case but are somewhat hard to discern in the expanded text.)

Appellate courts see reasons for decision that do not address the evidence and the arguments and are criticized as conclusory, on the one hand, and decisions that leave nothing out, on the other hand. The task of a trial judge is to find the golden mean, to “decant and simplify,” to synthesize the evidence and make the necessary findings; the task is not to be a court reporter.

B. Expert Witnesses

[25] At the outset of the trial, both parties indicated they each intended to call an expert witness. Both counsel were content with this approach. Additionally, they wanted their respective experts to remain in the court to hear each other’s testimony in order to comment in that respect.

[26] The expert proffered by the plaintiffs was Mr. Heide Mikkelsen, P. Eng.

[27] The expert who testified for the defendants was Mr. Luigi Lecce, P. Eng., of LGL Consulting.

[28] While the parties were content that these two engineers could and would testify as expert witnesses and consented to that approach with each other, the decision as to whether they should be admitted as expert witnesses rests with the court.

[29] The general rule is that opinion evidence is inadmissible. As Justice Cromwell explained in White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, at para. 14, “Witnesses are to testify as to the facts which they perceive, not as to the inferences – that is, the opinions – that they drew from them.” However, an exception to this general exclusionary rule is made for expert opinion evidence in certain cases. For matters requiring specialized knowledge or skill, expert opinion evidence can provide much needed assistance to the court.

[30] In such cases, expert evidence is not admitted and accepted without scrutiny. The risk that a trier of fact will accept the opinion of an expert without careful consideration is well recognized in Canadian jurisprudence. In response, the law has implemented safeguards to prevent the trier of fact from unduly deferring to the evidence of expert witnesses.

[31] In R. v. Mohan, 1994 CanLII 80 (SCC), [1994] 2 S.C.R. 9, the Supreme Court of Canada established a basic structure for admissibility of expert opinion evidence. In R. v. Abbey, 2009 ONCA 624, leave to appeal refused, [2010] S.C.A.A. No. 125 (Abbey #1), Justice Doherty provided clarity by dividing the framework into two steps. In White Burgess Langille, Justice Cromwell made minor adjustments to the clarified framework to develop the version currently relied upon today. This version was summarized by Justice John Laskin in R. v. Abbey, 2017 ONCA 640 (Abbey #2), at para. 48, as follows:

Expert evidence is admissible when:

(1) It meets the threshold requirements of admissibility, which are:

a. the evidence must be logically relevant;

b. the evidence must be necessary to assist the trier of fact;

c. the evidence must not be subject to any other exclusionary rule;

d. the expert must be properly qualified, which includes the requirement that the expert be willing and able to fulfil the expert’s duty to the court to provide evidence that is:

i. impartial,

ii. independent, and

iii. unbiased.

e. for opinions based on novel or contested science or science used for a novel purpose, the underlying science must be reliable for that purpose,

and

(2) The trial judge, in a gatekeeper role, determines that the benefits of admitting the evidence outweigh its potential risks, considering such factors as:

a. legal relevance,

b. necessity,

c. reliability, and

d. absence of bias.

[32] As is readily apparent from Justice Laskin’s summary in Abbey #2, the structure for admissibility of expert opinion evidence is inextricably related to an expert’s duty to provide fair, objective and non-partisan assistance to the court.

[33] For the reasons that follow, I have concluded that neither Mr. Mikkelsen or Mr. Lecce satisfied the required conditions to be qualified as expert witnesses for the purposes of this trial.

[34] As there were different reasons for these decisions for each engineer, I will address them individually.

1) Mr. Heide Mikkelsen, P. Eng.

[35] Mr. Mikkelsen signed the required “Acknowledgment of Expert’s Duty” on January 29, 2016. That document stated he had been engaged by Brunato Farms Ltd. and that he acknowledged his duty to:

a) provide opinion evidence that is fair, objective and non-partisan;

b) provide opinion evidence that is related only to matters that are within his area of expertise; and

c) provide such additional assistance as the court may reasonably require to determine a matter in issue.

[36] His curriculum vitae indicated that he was awarded a degree in Civil Engineering from the University of Windsor in 1997.

[37] Mr. Mikkelsen received his Professional Engineering Designation in 2011 and his Consulting Engineering Designation in 2014. He has been engaged in engineering areas related to storm water management work almost exclusively for over 20 years.

[38] Specifically, his resume states he has been involved as follows:

Design calculations for sewer systems, water distribution systems, storm water detention, watershed analysis, hydro-geological analysis, land earthwork volumes, septic systems, foundations and pike walls.

[39] It is apparent that the almost singular focus of his engineering career has related to the design and construction of drainage systems for greenhouses.

[40] It is clear that Mr. Mikkelsen possessed extensive education, background, and professional experience specifically related to the engineering issues in this matter.

[41] However, while he is eminently qualified with respect to the knowledge and expertise regarding the engineering issues in this case, I have determined that his testimony should not be accepted as expert evidence.

[42] A fundamental issue to be determined in this case is whether the flooding that occurred in the Tri-B greenhouse was caused by the negligent escape of water from the SBW property. In order to determine that issue it will be necessary to determine whether the Tri-B Acres drainage system was properly designed, installed and functioning on March 10, 2009. The defendants allege that deficiencies in the construction, design and configuration of the drainage system at the time caused the flooding incident.

[43] In 2005, Mr. Mikkelsen was retained by the plaintiffs and designed the drainage system for the Tri-B greenhouse expansion that was constructed in 2005 and 2006.

[44] The drainage scheme designed by Mr. Mikkelsen was built with four downspouts and four catch basins along the western wall of the greenhouse. This engineering plan was designed to take rain water from the Tri-B greenhouse property through the underground storm water pipe to a storm water management (“SWM”) pond located at the north end of the Brunato property. However, further complicating this issue, some time in 2006 after completion of the construction of the New Range, the plaintiffs unilaterally decided to cap the catch basins located on the western edge of the Tri-B property. Brunato re-engineered the drainage system in this manner without utilizing Mr. Mikkelsen, consulting with him, or even advising him they had done so until after it was completed.

[45] As well, by email dated October 25, 2007, Mr. Mikkelsen contacted Mr. John Pilmer of the Town of Leamington, explaining this modification as follows:

Please see attached plan showing the approximate location of the 10” corrugated HDPE agricultural tile that was installed by the owner after our initial inspection of the storm drainage system. The owner has let us know that the storm water management pond is also used as an irrigation pond. The owner also said that the purpose of the 10” tile was to prevent any surface runoff from the neighboring site to the west from contaminating the storm water management pond on the subject site and affecting his crops. The location of the 10” pipe is overlayed on to our plan from dimensions and details forwarded to us by the owner.

The installation of this pipe does not significantly affect the storm water management system for the subject site.

We trust that the above and the attached satisfies the Municipality of Leamington’s concerns regarding this project. Should you have any questions, please contact us or the owner.

[46] This email demonstrates the lack of involvement Mr. Mikkelsen had in the alteration of this design. He also expressed his professional opinion on behalf of his client that this alteration did not “affect the storm water management system for the subject site”.

[47] For these reasons, I have concluded that Mr. Mikkelsen should not be accepted to give expert opinion evidence. His evidence is by, definition, systemically non-objective and partisan as a direct result of his personal involvement.

[48] Ab initio, the very fact that Mr. Mikkelsen designed the SWM system for the plaintiffs disqualifies him from being accepted as an expert witness in this proceeding.

[49] By his very involvement in designing the SWM system and then providing an opinion to the municipality regarding the unilateral changes his client made to the system, Mr. Mikkelsen was not, by definition, in a position to give objective and non-partisan evidence in this matter.

[50] Further compounding consideration of whether Mr. Mikkelsen should be an expert witness are three other factors, as follows:

1. He was integrally involved on behalf of the plaintiffs with Mr. Bruce D. Crozier in the period following the execution of the provisions set out in the Minutes of Settlement dated November 16, 2010 with respect to developing a mutually agreeable grading plan relating to the construction of a berm.

2. He was the affiant for the plaintiffs with respect to an injunction application made in 2011 as against the defendants.

3. He testified on behalf of the plaintiffs at the Drainage Act Tribunal hearing held November 3 and 25, 2015.

[51] In each of these instances, he was advocating for the position of the plaintiffs. His direct involvement and partisan actions, while well meaning, further confirm that his evidence should not be considered as expert evidence. His evidence cannot be considered impartial, independent or unbiased.

[52] As a proposed expert witness, Mr. Mikkelsen was put in an untenable position. While his duty to the court as an expert witness would be to give fair, objective and non-partisan evidence, his direct involvement in designing the drainage system put him in a position where he might have had to concede that the SWM system he designed was in some way deficient, insufficient and contributed to, or caused, the flooding in issue. Additionally, and alternatively, he might have had to testify that his clients’ actions in capping the catch basins without his advice had the same effect.

[53] In theory, the lines between Mr. Mikkelsen’s duty to the court were inherently in conflict with his actions, duty to his clients, and possible outcome with respect to the conclusion the court might reach with respect to the cause of the flooding incident.

[54] All of this leads me to conclude that it is not appropriate to accept Mr. Mikkelsen as an expert witness in these proceedings.

[55] The ability to provide independent and objective evidence free from bias is fundamental to the expert’s duty to the court. For this reason, it is incorporated in both the threshold and gatekeeping stages of the admissibility framework.

[56] At para. 49 of White Burgess Langille, Justice Cromwell emphasized exclusion of an expert at the threshold stage should only occur in very clear cases in which the expert is unable or unwilling to provide fair, objective and non-partisan evidence. It will be quite rare that evidence of a proposed expert will be inadmissible for concerns about impartiality or independence at the threshold stage. Absent a challenge to the proposed expert’s independence or impartiality, the witness’ recognition of his/her duty to the court will usually suffice to pass the threshold stage (see: White Burgess Langille, at para. 47). This is one such situation.

[57] At the gatekeeping stage, the independence and impartiality of an expert continues to be relevant. A judge must continue to take into account relevance, necessity, reliability and absence of bias in weighing the overall competing considerations in admitting the evidence. As Justice Cromwell explained, at para. 54:

At the end of the day, the judge must be satisfied that the potential helpfulness of the evidence is not outweighed by the risk of the dangers materializing that are associated with expert evidence.

[58] Mr. Mikkelsen clearly possesses the requisite knowledge and skill to provide opinion on issues within the specialized area of agricultural engineering at issue. Had he no direct involvement or knowledge with respect to this factual situation, I would have had no difficulty in finding him qualified to give expert opinion evidence on these engineering issues. However, that is not the situation.

[59] His direct involvement fundamentally and profoundly calls into question his ability to give objective and non-partisan evidence on the efficacy of the infrastructure at issue. Ultimately, I conclude the potential helpfulness of the opinions of Mr. Mikkelsen are outweighed by the risk that they may be biased, whether consciously or not. As the trial judge in this matter, it is imperative that I be able to assess the technical opinion evidence being proffered without having to have to consider these conflicting issues. Given Mr. Mikkelsen’s involvement, those concerns cannot be vitiated.

[60] The court cannot accept him as an expert and then be left to continually assess whether his evidence is being given objectively and in accordance with the appropriate protocol. It is the inherent objectivity of an expert that allows the trier of fact to consider and potentially accept the evidence given on the topic in issue.

[61] I must add that his conclusion is in no way reflective of my views regarding the professional qualifications, or personal integrity of Mr. Mikkelsen. It is simply based on the fact that he was directly involved in this matter with respect to the design, alteration of the design without his involvement and testimony provided in later proceedings that forces this conclusion.

[62] Accordingly, the opinions expressed in the testimony of Mr. Mikkelsen are inadmissible as expert evidence.

2) Mr. Luigi Lecce, M.A., P. Eng.

[63] The defendants proposed Mr. Luigi Lecce as an expert witness in these proceedings. He was retained by the defendants in April 2016 to prepare an investigative report with respect to the flooding incident that occurred in March 2009. He too signed a similar Acknowledgement of Expert’s Duty in these proceedings on September 9, 2016.

[64] Mr. Lecce received an Honours degree in Geography in 1987 and a Masters in Physical/Applied Geography in 1992. He also received a B.Sc. in Honours Civil Engineering in 1994. Each of these degrees were conferred by the University of Windsor.

[65] Mr. Lecce worked with N.K. Becker Incorporated between 1992 and 1999. During that time, he was involved in a variety of forensic engineering assignments. As indicated in his curriculum vitae, these investigations were primarily related to fire and explosion incidents as well as floods, collapses, catastrophic failures and other problems and incidents relating to injury or death caused by heavy equipment, mechanical systems and machinery.

[66] Since 1999, Mr. Lecce has been the principal of LGL Consulting Inc. As a professional engineer licenced in Ontario, his firm has been involved in a wide range of civil engineering projects. His firm provides project management and contract administrative services. He is also a Certified Fire and Explosion Investigator (C.F.E.I.) and has conducted in excess of 75 investigations determining the origin and cause of building fires and explosions.

[67] In his curriculum vitae, he also describes project involvement while with N.K. Becker relating to the following:

i) supervision of repairs to an orchard property near a bluff;

ii) field work pertaining to a new 500 mm. diameter trunk watermain extension in LaSalle and Windsor;

iii) onsite inspection and construction management of a new storm sewer, sanitary sewers, watermains and roadways in Kingsville; and

iv) planning and design of a shoreline marina and development in Ohio.

[68] Nowhere in his curriculum vitae is there any indication that Mr. Lecce has provided engineering services or had experience with respect to any of the following:

1. Design and/or construction management of a greenhouse.

2. Design and/or construction management with respect to a storm water management system for a greenhouse, or other similar structure.

3. Investigation with respect to a design or structural failure with respect to a storm water management system for a greenhouse or other similar structure.

[69] Experts are only permitted to offer opinions within the scope of their particular expertise. A proposed expert will not be permitted to offer an opinion where his or her knowledge is restricted to a more general subject, or his or her expertise is in a related but distinct subject. In such situations, the proposed expert is not properly qualified to give opinion evidence on the relevant subject matter. For example, a general practitioner of medicine will not ordinarily be permitted to give an opinion within the specialized knowledge of a psychiatrist: see R. v. S.(F.) (1997), 34 O.R. (3d) (C.A.), 1997 CanLII 1150 (ON CA), 101 O.A.C. 193; see also, Bialkowski v. Banfield (2011), 24 B.C.L.R. (5th) 171 (B.C. S.C.) (physician lacked expertise required to interpret complex neurological scans); Meady v. Greyhound Canada Transportation Corp., 2010 ONSC 4519 (retired police officer lacked expertise to provide opinion on actions of officers in a specialized field); and Dulong v. Merril Lynch Canada Inc. (2006, 2006 CanLII 9146 (ON SC), 80 O.R. (3d) 378 (S.C.) (securities officer lacked expertise to give opinion on retail brokerage).

[70] Applying these principles to this case, it is evident that Mr. Lecce is a qualified and successful civil engineer. However, I have concluded that he does not have the specialized education, skill, or experience with respect to the engineering, design, operation and function of drainage systems and specifically greenhouse drainage systems to provide the court with expert evidence.

[71] While some of his expertise as a civil engineer would permit him to provide opinions on some of the general engineering principles pertaining to the SWM system on the Brunato property, he does not possess the necessary experience with respect to these specific engineering issues.

[72] Using another analogy to expert medical evidence, a competent general practitioner would likely be able to provide some medical evidence with respect to a neurosurgery procedure outside the ordinary knowledge of a trier of fact, but that physician would still not be qualified by the court to give expert evidence on that specialized subject.

[73] For this reason, I do not accept Mr. Lecce’s testimony as expert evidence. The benefits of admitting his evidence are far outweighed by the risks – particularly with respect to reliability.

[74] Parenthetically, I should note the plaintiffs asserted that Mr. Lecce’s evidence was not provided with an absence of bias. However, as I have already determined that he was not qualified to provide expert opinion evidence for reasons of his education, background, experience and expertise, I will not further examine the issue of potential bias, or otherwise assess his evidence.

C. History of the Properties

[75] The plaintiffs allege that the flooding that gave rise to the original tort claim occurred at the southwest corner of the New Range of the Tri-B greenhouse on March 10, 2009.

1) General Observations

[76] For ease of reference I will refer to the various properties owned by the plaintiffs as follows:

1. “Brunato Property” – The land (and structures) owned by the plaintiff Brunato Farms. This also includes the water reservoir located to the north-east that serviced both of the plaintiffs’ greenhouses.

2. “Tri-B Property” – The land (and structures) owned by the plaintiff and situated adjacent to the SBW property.

3. “Plaintiffs’ Property” – The combined area of land owned by the two corporate plaintiffs.

[77] All of the relevant lands owned by the parties were situated on the south side of Highway #3 in the Municipality of Leamington. While all these properties were bounded by Mersea Road #3 immediately to the south, the Brunato Property stretched the furthest to the north, and included the large SWM pond near Highway #3.

2) Adjacent Agricultural Lands

[78] There were undeveloped agricultural lands both to the immediate west of the SBW property and to the immediate east of the Brunato property. Neither of these properties were owned by the parties to this litigation. From the evidence that was extrapolated from the various aerial photographs, these nearby lands were largely undisturbed during the relevant time period to and including March 10, 2009. As well, they were relatively flat and were not the source or cause of any of the water entering the Tri-B greenhouse.

3) Plaintiffs’ Property

[79] The plaintiffs’ land was comprised of two distinct parcels that each contained greenhouses. The combined land totalled approximately 30 acres. Greenhouses covered 22 of those acres, of which 20 acres were growing area. The greenhouses were utilized extensively to grow bell peppers.

a) Brunato Property

[80] This parcel of land was referred by the parties as “Brunato Farms”. That 23-acre property was comprised of a single greenhouse stretching from near the southern tip of the parcel of land to a few hundred feet below the SWM pond at the north. It was acquired in the early 1980’s and was the eastern-most property belonging to the plaintiffs.

[81] The land to the south of the Brunato greenhouse consisted of small buildings and a parking area for the plaintiffs’ greenhouse operation.

[82] To the immediate west of the Brunato greenhouse was a laneway known as “Setterington Lane”. This was an unpaved roadway that was wide enough for vehicle traffic.

b) Tri-B Property

[83] Immediately on the western side of Setterington Lane was the second property owned by the plaintiffs. It was referred to by the parties as “Tri-B Acres.” That property constituted the remaining seven acres and contained a separate, but bifurcated, greenhouse. The greenhouse occupied a significant percentage of the Tri-B property.

[84] The entire Tri-B greenhouse structure was about the same width as the Brunato Farms greenhouse, but approximately two-thirds of the length. However, while the Brunato Farms greenhouse structure was uniform, there were two distinct growing areas in the Tri-B building. That is, the smaller, older area of the Tri-B greenhouse area was located at the south.

[85] The newer and larger portion of the Tri-B greenhouse was built on the northern end of the existing structure in 2005. It comprised approximately two-thirds of the square footage of the entire Tri-B greenhouse structure. The plaintiffs referred to that portion of the greenhouse as the “New Range.”

[86] There was approximately 9.5 feet of land situated to the west of the Tri-B greenhouse to the eastern edge of the SBW property line.

[87] While the roof of the entire Tri-B structure was at a uniform height, at the ground level there was an internal barrier between the two section. That is, a person could not walk unimpeded between the two ranges in the Tri-B greenhouse at ground level as there was an elevated walkway running on an east/west axis.

[88] The northwestern corner of the Tri-B structure was located near a greenhouse property to the north, owned by an unrelated third party, Christofari Farms.

[89] Eventually, the Christofari greenhouse structure stretched east to a point approximately one-third of the way above the westerly side of the north wall of the Tri-B New Range, that portion was not built until after the flooding incident.

[90] It is noted from the numerous photographs that the Christofari land appears higher than either the Tri-B or SBW property. As well, on the eastern side to the north of the Tri-B greenhouse was a smaller parcel of land owned by an independent homeowner.

4) SBW Property

[91] The SBW property was located immediately adjacent to the western boundary of the Tri-B property. In looking at aerial photographs (Exhibit 6(3)), it appears those two parcels of the land were relatively the same size. They had a common northern boundary to the north with the Christofari property. They were both bordered by Mersea Road #3 on the south.

[92] The SBW land was mostly structurally undeveloped during the relevant time period. At all times, there was a house and smaller building situated in the southeast corner of the property. These buildings were located just below the southern tip of the Tri-B greenhouse and they played no part in the factual matrix in this matter. There were no other buildings on the SBW property.

[93] In the north-west corner of the SBW was a small SWM pond.

D. Alterations to the Properties

[94] I have reviewed the extensive photographic evidence showing the transformation of these various properties for more than a year before the flooding incident as they assist the court in determining whether the plaintiffs have proven on a balance of probabilities that the defendants caused same.

[95] As depicted in various aerial photographs taken over many years prior to the flooding incident, it is evident that all of the lands (Brunato, Tri-B, SBW and Christofari Farms) were located on the site of an old gravel pit. At one time, there was also water covering significant portions of all of these lands.

[96] From viewing the series of aerial photographs over the years, it is apparent significant reclamation of the land occurred as the amount of land covered in water was significantly reduced.

1) SBW Property

[97] Commencing well before the March 10, 2009 flooding incident and continuing through 2012 when the property was sold, there were numerous changes and alterations to the SBW property. It would not be an understatement to say that the SBW property was in a regular state of flux in the period leading up to the flooding incident. This was supported by the various photographs and the evidence of Mr. Del Greco and Lu-Ann Marentette of the Town of Leamington.

[98] The plaintiffs assert these alterations were done for no explainable reason. The ultimate formation of the land, particularly along the Tri-B property, caused water to escape negligently from the SBW property on March 10, 2009 and enter at the southwest corner of the North Range, causing significant damage to a portion of the plaintiffs’ greenhouse operation.

[99] Upon acquisition, the SBW property was essentially flat, with little contour.

[100] The photographs taken by Mr. Chris Del Greco (Exhibit No. 2A) show various transformations to the SBW property over the years to the date of the incident.

[101] All of the photographs show the Tri-B land sloped downward to the west from the edge of the greenhouse to the SBW property line. That is, at all times, the base of the west wall of the Tri-B greenhouse was higher than the land at the property line.

[102] From time to time, there were various swales in the middle of the Tri-B land. Some of the photographs depict casual water in those swales. In none of the hundreds of observed photographs entered into exhibit is water at the base of the Tri-B greenhouse across the entirety of the west wall of the New Range.

[103] I have reviewed the hundreds of photographs that were exhibits. They were taken over an extended period of time before and after the March 10, 2009 incident. I have made a number of observations. Unless otherwise stated, these photographs were set out in Exhibit 2A. Other photos were contained in Exhibit 3 and will be so referenced.

a) Pre-March 31, 2008

[104] At some point, Mr. Sabelli had begun dumping materials and forming a large mound on the western side of the SBW property approximately one-third of the way from the northern edge of the property. Eventually, this mound would reach a height greater than the Tri-B greenhouse. Mr. Del Greco indicated the greenhouse was 28 feet high and he estimated the mound was 30 feet in height.

[105] The material dumped at different times to create this mound was comprised of soil, concrete waste, manure, and vegetable waste.

b) March 31, 2008 – May 2, 2008

[106] The Tri-B property was flat with the SBW land. The property line was marked with a railing. It is noted that there were some shallow swales on the Tri-B property which contained water. As of March 31, 2008, there was little or no water on the eastern edge of the SBW property towards the north end of the property (Photograph 5-2).

[107] Further to the south but still well north of the area of the flooding incident, there was more water gathered on the Tri-B property. The slight berm along the property line had been eroded.

[108] The water on the Tri-B property was sitting on the edge of the east to west downward slope of the land from the Tri-B greenhouse. By April 12, 2008, photograph 5-6 depicts the entirety of the eastern portion of the SBW property throughout a large ditch well in excess of 20 feet in width. I will refer to this body of water as the “ditch” or “the north-south ditch”. There is still casual water laying on the Tri-B Acres side of the property line berm.

[109] By the end of April 2008, it is apparent Mr. Sabelli had graded the eastern-most edge of the property in an east/west direction. This had the effect of lowering most of this land from what was evident in early March (Photographs 6-2, 6-3, 6-4 and 6-5).

[110] There were some minor breaks in the berm. It cannot be ascertained whether the water laying on the Tri-B property came from either, or both, properties.

[111] Tri-B Acres employees were photographed with shovels, shoring up the small berm on May 2, 2008 (Photographs 7-1, 7-2, 7-7 and 7-8).

[112] Photograph 8-2 shows the reinforced berm at the north end of the property line. There were no longer any breaks in the berm at this location.

c) May 3, 2008 to August 31, 2008

[113] By pictures time stamped on June 10, 2008, taken from the northwest corner of the North Range, along the west wall, the following is observable:

1. There was a noticeable berm along the property line. It was, at most, a foot high.

2. The railing marking the property line has begun to physically deteriorate.

3. There was a significant amount of water laying on the eastern side of the SBW property. The water is in this location as a result of the movement of the soil by the defendant. This water appears to be situated in the ditch but several feet below the top of the berm marking the property line.

4. There was a small amount of water pooled on the Tri-B property. This water was below the height of both the berm and the edge of the North Range of the greenhouse. As well, the peak of the berm was higher than the base of the greenhouse.

5. Further to the south of the SBW property 20 to 25 small mounds had been constructed. Those mounds appear to have been levelled by June 21, 2008, as depicted in photograph 8-8.

[114] By July 3, 2008, there was still a considerable amount of water laying in the ditch along the eastern edge of the SBW property. The berm on the Tri-B land along the property line was covered with grass. Water could still be observed laying on the Tri-B property in the swale between the North Range and the berm. There were a few breaks in the berm, but no indication whether the entirety of the water pooling on the Tri-B property had come exclusively, or even in part, from the SBW property.

d) September 1, 2008 to September 30, 2008

[115] During this period, Mr. Sabelli had again changed the configuration of the property along the eastern edge of the SBW property. By September 25, 2008, he had further dug out the land approximately three feet from the property line. There was water in this ditch to a height several feet below the property line. To the west, SBW land had been graded and sloped upwards from the base of the ditch to a point higher than the edge of the Tri-B property (Photographs 11-1, 11-3 and 11-4). Mr. Sabelli was photographed that day driving a piece of earth-moving equipment.

[116] By September 30, 2008, the grading appears completed right to the property line with the ditch sloping upwards to the west. At this point, the Tri-B property was covered with grass-like vegetation and has little, or no, unevenness. The drop off at the property line to the base of the now empty ditch appeared to be three or four feet deep (Photograph 14-6).

e) October 1, 2008 to December 31, 2008

[117] The effects of the grading done of the ditch by Mr. Sabelli in late September are visible on photographs taken between December 1, 2008 and December 10, 2008.

[118] The ditch was then a body of water in excess of ten feet in width that ran along the entire of the north range at the eastern property line with SBW land to the west. Photographs 16-5 and 16-6, time stamped on December 1, 2008, depict the following:

1. The hill to the western side of the SBW property was still several storeys high.

2. The railing delineating the property line was mostly gone.

3. The water in the ditch sat uniformly below higher land on the SBW property and the berm along the property line.

4. The berm was washed out in a couple of locations.

5. There was very little casual water laying on the Tri-B property.

6. While it is not clear whether any of that water came from the SBW property, the water does not appear to have settled as a result of the breach of the berm.

f) State of the SBW Property before the March 10, 2009 flooding incident

[119] Immediately prior to the flooding incident on March 10, 2009, the large mound remained on the SBW property.

[120] As well, there was a v-shaped ditch situated to the south of the mound on the SBW land running in an east/west direction to the larger north/south ditch.

[121] Mr. Sabelli had received approval from the Town of Leamington to dump vegetable waste on his property as a fertilizer. From the photographs, it appears this waste consisted of tomatoes, cucumbers, peppers, eggplant and zucchini and other vegetables. There are photographs (for example, 2-4), showing Mr. Sabelli spreading this waste on his property. Over time, this vegetable waste would attract insects to the SBW property. Insects are an anathema to the operator of a greenhouse as they can cause damage to the growing crops.

[122] As depicted in a number of photographs, that v-shaped ditch contained water. It looked like a small creek basin. Those photographs also clearly depict vegetable waste in the base of this ditch.

[123] Vegetable waste is seen accumulated in a low swale at the very north end of the Brunato property at Highway #3.

2) The Tri-B Greenhouse

a) General

[124] Other than the barrier separating the two ranges, the interior of the structure was mostly uniform.

[125] As indicated, this greenhouse was situated with approximately 9.5 feet of land from the western edge of the structure to the property line with the SBW property. Along the north, east (Setterington Lane) and south of the Tri-B greenhouse, there was space sufficient for vehicular traffic on the property. There was basically no ability to travel via anything but a small off-road vehicle on the west side of the structure. As indicated, the Christofari land to the north was higher in elevation. It was separated by a concrete block wall which accentuated the difference in land levels. The exterior western wall of the greenhouse was uniform.

[126] The North Range of the Tri-B greenhouse was constructed in 2005. The Site Plan Agreement with the Town of Leamington was dated October 18, 2005.

[127] The entire exterior west wall of the Tri-B greenhouse structure was uniform, with one exception. At the juncture of the old and new range, a concrete block wall was constructed in an L-shape, open to the north. The grading of the property in the resulting area sloped down to the bottom of the L, where the wall abutted with the greenhouse. It is near this location that the flooding incident occurred on March 10, 2009.

b) The Tri-B Acres Drainage System

####### (i) Design and Operation

[128] The drainage system on the Brunato and Tri-B greenhouses was designed by Mr. Heide Mikkelsen of N.J. Peralta Engineering Ltd. As indicated, Mr. Mikkelsen testified in this trial but I have determined that Mr. Mikkelsen would not be accepted as an expert witness in these proceedings for the reasons set out above. However, as he had first hand knowledge and observations of the greenhouse properties before and after the flooding incident, I have considered his viva voce evidence in this regard. He did provide the court with firsthand evidence from a planning, design and observational perspective of the New Range, and events before and after the flooding incident.

[129] Mr. Mikkelsen referenced the use of downspouts as follows:

The downspouts of the greenhouse shall be designed by the greenhouse manufacturer for the 1:100 year storm event. [^2] If the downspouts do not have capacity for the 1:100 year storm event, flows in excess of the capacity of the downspouts will overflow from the end of the greenhouse. Splash pads shall then be provided to reduce erosion and may be constructed of quarried limestone on filter cloth or equivalent erosion protection. The water will then be directed through the proposed shallow surface swales to the covered drainage system or directly to the detention pond.

[130] Significantly, with respect to overflow, Mr. Mikkelsen stated:

We have also provided for the installation of shallow surface swales for the perimeter of the proposed greenhouse expansion to collect any extraneous flows and direct them to the covered drainage systems and ultimately to the pond.

[131] And finally, he stated:

Storm events in excess of the 1:100 year storm may cause flooding.

[132] The plans for the SWM system on the Tri-B property were prepared by Mr. Mikkelsen when the North Range was constructed and were dated September 12, 2005. The plans were revised on October 31, 2005. These plans were updates of those previously dated March 19, 1997. As indicated in his report, and as Mr. Mikkelsen testified, the greenhouse was designed to drain into a combination irrigation and SWM pond, located just below Highway #3 at the north end of the Brunato property.

[133] The drainage system was integrated. That is, rainwater collected from the Tri-B property would eventually converge with the rainwater drainage system of the Brunato greenhouse. Water that collected in the SWM pond would eventually be utilized by the plaintiffs to irrigate their greenhouses. For that reason, it was essential to the plaintiffs that the SWM pond not be contaminated with any foreign materials.

[134] The system was designed using pressure and to direct water to the SWM pond with a capacity to handle waterflow during a 1:100 year storm without impacting neighbouring properties. There were four pipes built into the system designed to collect rainwater from the downspouts on the Tri-B greenhouse roof. As set out in his report, Mr. Mikkelsen described the design as follows:

There are four pipes that collect the 4 rows of downspouts from the greenhouse roof that terminate outside the western limit of the greenhouse. When the capacity of the downspouts is exceeded, rainwater collected on the roof gutters is designed to run off the end of the greenhouse, be collected in the swales and directed to a catchbasin connected to the drainage system. If the collection system’s capacity is exceeded, the system is designed to utilize the swale system to convey water to the pond overland, or provide temporary storage until the drainage system is able to take the water away. Along the western property limit the greenhouse roof has a gutter that collects water from approximately 12’ of roof that discharges to the drainage system. The location of any spilling from the greenhouse roof would occur from the north end of the greenhouse from the lowest point of the gutter. There was also a swale in the approximately 8’ width remaining between the building and the western property limit that conveys flows collected from the 8’ width and if there is any spillage from the roof and convey it to the catchbasins and the drainage system.

####### (ii) Alteration to the Tri-B Acres Draining System

[135] The plaintiffs altered the system after it was installed. As indicated, they did so unilaterally without utilizing Mr. Mikkelsen, or even notifying him of the proposed change beforehand. They apprised him after the alteration that they had made this change to the drainage system he designed. They made this decision because they were worried about the quantity of water they believed was coming off the SBW property. As there was vegetable waste in the water in the ditch, they were concerned it would enter the SWM retention pond. As that water was recycled as an irrigation water source to water their greenhouses, they did not want water from the SBW property to find its way into their drainage system and contaminate their processes.

[136] Accordingly, the plaintiffs did the following:

1. They installed a drainage pipe along the western and northern walls of the Tri-B greenhouse to the SWM pond.

2. The catch basins located outside the west wall of the Tri-B greenhouse were blocked so that water could no longer enter the drainage system from outside the greenhouse.

3. The catch basin was disconnected and the pipe blocked with an end cap.

[137] Mr. Mikkelsen described these changes in his report as follows:

The intended design of the drainage system was to have the catchbasins installed at the top end of each of the 4 pipes draining the greenhouse downspouts. The catchbasins are intended to allow air into the system similar to a plumbing vent. This enhances the capacity of the drainage system so there is no vacuum effect when a big slug of water enters the pipe. The catchbasins also serve to act as a relief mechanism during larger storm events, to allow water to flow overland through the swales so not to pressurize the drainage system.

By blocking the pipes with an end cap, they are effectively causing the system to be pressurized. The capacity would still be available however the only way that the system would relieve itself in an overcapacity situation would be then to overflow the gutters located along the north end of the greenhouse or through the catchbasins on the east side of the greenhouse.

[138] No logical or satisfactory explanation was provided by the plaintiffs why they did not utilize Mr. Mikkelsen to design or comment in advance regarding this ad hoc adjustment to the drainage system. Neither was it explained why the plaintiffs did not advise Mr. Mikkelsen in advance why they had decided to make this alteration, or that they intended to make this change.

c) SBW Property

[139] In photographs taken on June 20, 2009, the ditch still existed on the eastern edge of the SBW property. The water was generally contained on the west by a slope on the SBW property and the berm along the property line.

[140] There was a significant amount of water laying in the swales on the Tri-B property and an indication that it may have breached the berm in a couple of locations (Ex. 3, photograph 163, 164 and 166).

[141] By August 4, 2009, Mr. Sabelli had reconfigured the land again so that the earth on the eastern edge of the ditch was higher (Ex. 3, photograph 220). This appeared to be done, at least in part, to improve the flow of surface water to the retention pond at the northwest corner of the SBW property (Ex. 3, photograph 227, 265).

[142] By August 25, 2009, the entirety of the ditch had been filled and replaced with a mound at the property line (Ex. 3, photograph 312).

E. Weather on March 10, 2009

[143] Exhibit No. 1-7 was a printout of the Government of Canada weather statistics for the month of March 2009, for the adjacent Town of Kingsville. With respect to March 10, 2009, the record indicates that 53.5 millimetres of rain fell. This equates to 2.106299 inches of rain. Most of the rain fell between 9:00 a.m. to 9:00 p.m. The high temperature that day exceeded 10ºC. At no point did the temperature go below 0ºC that day.

[144] Other meteorological evidence shows winds principally from the East South East (“ESE”) commencing at 9:00 a.m. of 17 kilometres per hour (“km/h”) with gusts up to 29 km/h. The winds peaked at 24 km/h with gusts of 39 km/h at noon with a slight drop in velocity in the afternoon. They tapered to 12 km/h and 9 km/h between 6:00 p.m. and 9:00 p.m.

F. Aftermath of the March 10, 2009 Storm

[145] Mr. Del Greco testified he first noticed the greenhouse was flooded between 7:00 a.m. and 7:30 a.m. on the next day, March 11, 2009.

1) Inside the Tri-B Greenhouse (North Range)

[146] From his oral testimony and photographic evidence provided by Mr. Del Greco, he asserts that water and earth (silt-like in appearance) entered the Tri-B greenhouse at the southwest corner of the North Range.

[147] Mr. Del Greco testified at length regarding the significant contamination that occurred as a result of this incursion. I do not need to examine all of those specific issues at this time. It is obvious that whatever the cause and source of the introduction of the water, silt and other substances into the greenhouse caused the plaintiffs a number of problems, as follows:

1. Damage to the pepper crop requiring the destruction and/or the degrading of the peppers in that area. Photographs taken on March 11, 2009 show the silt that was washed into this particular corner of the North Range. The material depicted in photographs 23-5, 23-6, 23-7 and 23-8 also show some water pooling.

2. They were required to totally strip down that area of the greenhouse to remove the water and other substances. Photographs taken in November of 2009 show the floor of the greenhouse stripped down to begin the process of growing the next crop.

3. They had to remove and replace that portion of the greenhouse infrastructure contaminated by the flood.

4. They suffered a reduced crop yield.

2) Outside the Tri-B Greenhouse (North Range)

[148] Photographs were taken by Mr. Del Greco in the day leading up to and in aftermath of the flood.

[149] I have made numerous observations and reached conclusions based on the photographs in Exhibit 2A. I have carefully examined photographs numbered 19-5, 20-4 and 20-8. These are photographs taken on the western edge of the Tri-B greenhouse looking north towards the Christofari property. The SBW property is located to the left in each of the photographs. They are dated March 10, 2009 (19-5 and 20-8), March 19, 2009 (20-4) – all before the flooding incident.

[150] Photograph 19-5 was taken to the south of photograph 20-4 and 20-8.

[151] My observations are as follows:

1. There is a significant area of water in the large ditch area situated at the eastern edge of the SBW property along the western edge of the Tri-B property. This ditch looks very similar in size as compared to December 10, 2008, as viewed in photograph 17-4. It appears to be about twice the width of the western Tri-B property outside the greenhouse – approximately 16 feet.

2. There remained a berm in existence along that property line. The berm varied in width but at no point exceeded three feet in height.

3. In a few places, the berm is not continuous as it has been breached, albeit slightly.

4. There is water laying in a swale on the Tri-B acre side of the berm and it appears to be at the same level as the water in the ditch on the SBW property.

5. The top of the berm is below the height of the land at the base of the Tri-B greenhouse.

6. There is some vegetable matter situated in the water sitting in the swale on the Tri-B property. These are the same types of vegetables observed in 2008. It is noted that none of the products were grown by the plaintiffs.

7. There does not appear to be a significant quantity of any vegetable matter situated on the higher sloped portion of the Tri-B property immediately adjacent to the Tri-B greenhouse (see photographs 19-5 and 20-4). At the point where the L-shaped block wall leads to the corner of the New Range, there are a few (4 or 5) zucchinis on the sloped ground outside the west wall (see Exhibit 3, photograph 141).

8. Pictures taken of the SBW property show vegetable matter in the ditch running east/west on the SBW property.

9. As well, there are vegetables pictured in photographs taken at the northwest corner of the Tri-B property, on the laneway along the north of that greenhouse near Highway #3.

10. As viewed from the photo identified as Exhibit 3-142 date stamped on March 11, 2009, there are no vegetables visible on the ground at the point where the plaintiffs allege their greenhouse was flooded.

11. Furthermore, the land depicted in picture 141, also date stamped taken the day after the flooding incident and located near the southwest corner of the New Range, does not show any of the following:

a) erosion at the property line;

b) any indication that water has breached at that point;

c) any indication that water may have travelled southward at that point;

d) a sign in the natural vegetation on the Tri-B property in this area that the land had been recently disturbed by water.

12. As well, from Exhibit 3-142, there does not appear to be any of the following:

a) pooled water;

b) any indication that area had previously contained water;

c) a sign in the natural vegetation that the area had recently been disturbed by water.

[152] I also reference photograph 23-2, date stamped March 11, 2009. This photograph was taken on the northwest corner of the Tri-B property. The picture shows a number of relevant things:

i) There was water contained in the two areas of the swale on the western edge of the Tri-B greenhouse near the north.

ii) This water was resting well below the base of the greenhouse.

iii) When looking towards the southern end of the structure where the flooding allegedly occurred, there does not appear to be water situated on the Tri-B land.

iv) There is at least one break in the berm pictured at the forefront of this photograph. Photograph 23-3 depicts this same area at the north west corner of the New Range.

[153] Photograph 24-1 is also date-stamped March 11, 2009. It was taken towards the southern end of the west wall. This is near the alleged point of entry of the flooding to the Tri-B greenhouse.

[154] Consistent with photograph 23-2, it does not appear that any water has gathered on this part of the Tri-B land. Nor were there any visible sign in this photograph (or the close up 24-2) that there has been a breach of the Tri-B property at this point.

[155] The water level in the ditch on the SBW property is well below the base of the Tri-B greenhouse.

[156] Nowhere in any of these photographs is the following depicted:

i) Water resting against or very near the west wall of the Tri-B greenhouse.

ii) Water at or near the alleged entry point to the New Range.

iii) A significant quantity of water in the ditch, running east-west on the SBW property.

THE VARIOUS LEGAL PROCESSES FOLLOWING THE FLOODING INCIDENT

[157] Since the incident of March 10, 2009, there have been a number of legal proceedings involving some or all of the parties to the litigation. It is noted that the plaintiffs initiated each of these proceedings.

A. Normal Farm Practices Protection Board (“NFPPB”)

[158] The first legal step taken by the plaintiffs was a complaint filed with the Normal Farm Practices Protection Board on December 15, 2009.

[159] The complaint sought remedies related to noise, dust, odour and flies.

B. Superior Court Action CV-10-14402

1) February 16, 2010 – Statement of Claim

[160] Pursuant to this claim, the corporate plaintiffs, Brunato and Tri-B, sought the following:

1. An injunction to restrain the defendants from diverting water onto the property owned by the plaintiffs, or flooding same.

2. An injunction requiring the defendants to grade the SBW property, install drainage works and store vegetable waste.

3. Damages in the amount of $1.5 million by reason of the unlawful flooding of their land.

[161] The claim made reference to the defendants dumping garbage, manure, greenhouse waste, and dredging waste onto the SBW property. Reference is also made to the greenhouse waste brought onto the SBW property containing pepper weevil, an insect not indigenous to Canada and which destroys bell peppers.

[162] Curiously, the claim made no reference to the date (or dates) that the alleged flooding occurred.

[163] The plaintiffs brought an application for an interlocutory injunction on February 23, 2010.

[164] The defendants filed a statement of defence on May 18, 2010.

2) October 25, 2010 - Injunction

[165] On October 25, 2010, Justice R. Gates issued an order, on consent, with respect to the interlocutory injunction application made by the plaintiffs. That order provided, inter alia, as follows:

1. That the defendants would take no active steps that would cause flooding or aggravate the flooding problem.

2. That the defendants would not dump any greenhouse vegetable waste, save and except tested mushroom substrate. That mushroom waste had to be dumped on the western side of the mound on the SBW property and at least 50 feet from the property line.

3. That the defendants not alter the land near the property line.

3) November 15 and 16, 2010 – NFPPB Hearing

[166] The NFPPB hearing with respect to the complaint dated December 10, 2009 commenced on November 15, 2010.

[167] On November 16, 2010, the parties reached a written agreement that resolved both the NFPPB complaint and Superior Court Action CV-10-14402.

3) Terms and Conditions of the November 16, 2010 Minutes of Settlement

[168] In consideration for the plaintiffs discontinuing CV-10-14402 (with prejudice) and the NFPPB complaint, the defendants agreed to do a number of things, as follows:

1. Prepare a grading plan for the SBW property at their expense (para 1).

2. That plan was to be prepared by a qualified engineer approved by all parties within six months. There was a dispute resolution mechanism.

3. Within six months of selection of an engineer, the grading plan was to be submitted to the Town of Leamington.

4. There were various considerations (such as drainage of the abutting property) that had to be taken into account in preparing the grading plan.

5. The grading of the SBW land was to be completed by December 31, 2013 (approximately 37 months after the MOS were signed).

6. There were other conditions specified with respect to what the defendants could and could not do with respect to bringing clean fill or movement of the mound that may contain pests, when material could be brought or taken off the property, and other related conditions and restrictions in that respect.

[169] In exchange, the plaintiffs agreed to consent to the removal of the then current injunction.

[170] Paragraph 15 was worded as follows:

15. Brunato Farms Ltd. and Tri-B Acres Inc. will file, within two weeks of the lifting of the Court Order described below, a Notice of Discontinuance, on a without costs and with prejudice basis, of the Court action proceeding under Court File Number CV-10-14402 (the “Court Action”), Sabelli will consent to the filing of the said Notice of Discontinuance.

[171] The parties also agreed as follows in paragraph 18:

18. Following completion of the foregoing, the parties will exchange a Mutual Full and Final Release in a form to be agreed upon between the parties, acting responsibly. Such Release will include all matters that have been or could have been raised in the Court Action or in Normal Farm Practices Protection Board.

[172] Finally, the parties inserted a dispute resolution clause that stated:

19. Any dispute, including any request for injunctive relief, between the parties about any aspect of this agreement will be resolved pursuant to the Arbitrations Act, R.S.O. 1990, c. A.24.

[173] Following the execution of these MOS, the injunction was lifted and court action CV-10-14402 was discontinued.

[174] In the next few months, there was activity with respect to compliance with the MOS. However, by May of 2011, the plaintiffs were dissatisfied with the progress and returned to the Superior Court.

C. Superior Court Action CV-11-16273 – May 6, 2011

[175] A second Superior Court action was commenced by Brunato Farms against SBW seeking remedies for non-compliance with the settlement of action CV-10-14402.

[176] Brunato Farms was the only named plaintiff. The claim sought, inter alia, as follows:

1. Interlocutory and permanent injunctions restraining the defendants, or anyone acting on their behalf, from with respect to the plaintiff’s land:

a) diverting or permitting the diversion of water;

b) permitting the escape of water;

c) ordering the defendants to grade the SBW property and install drainage works to prevent run off;

d) ensure the ditch is constructed properly

2. Damages estimated to be $100,000 for damages “sustained by the plaintiff as a result of the unlawful flooding of the lands and/or sustained by reason of the plaintiff’s efforts to ensure that no flooding occurs.”

D. Proceedings Following the Issuance of CV-11-16273

[177] Numerous legal steps and decisions occurred in 2011. They are summarized as follows:

1. Central to this application was an affidavit from Mr. H. Mikkelsen, dated June 16, 2011. On June 17, 2011, Nolan J. ordered the defendants to upgrade the berm to specifications set out in Mr. Mikkelsen’s affidavit by June 27, 2011, failing which the matter could be returned as an urgent matter.

2. On July 5, 2011, Patterson J. issued an order on consent, adjourning the motion to July 12, 2011 and restraining anyone from moving, digging, excavating or disturbing the mound.

3. On July 13, 2011, Nolan J. issued a further order, on consent, directing that a berm be constructed to directed specifications.

4. On August 18, 2011, Mr. Bruce Crozier submitted a grading plan for the SBW property to the Town of Leamington.

5. On October 27, 2011, Nolan J. ordered as follows:

6. This Court Orders that Ted Crljenica be appointed arbitrator with respect to this action and with respect to all matters arising out of minutes of settlement dated November 16, 2010 before the Normal Farm Practices Board.

7. This Court Orders that this action be stayed pending further order of this court.

8. This Court Orders that all previous orders of this Court shall remain in effect pending further order of this Court or the arbitrator, who shall have jurisdiction to continue, amend, vary or set aside any prior Order of this Court in this action.

9. This Court Orders that all costs of this proceeding to the date hereof be reserved to the arbitrator.

10. This Court Orders that this action shall be dismissed without costs as against Anna Sabelli.

11. This Court Orders that either party may move on notice before this Court to settle the terms of the arbitration agreement should the parties not be able to reach agreement.

This order was issued on consent of the parties.

6. On November 24, 2011, Gates J. ordered, on consent (in this respect only) that the plaintiff Brunato could enter onto the SBW property to pump out the water from the ditch. He also ordered the respective engineers (Mr. Mikkelsen for the plaintiff and Mr. Crozier for the defendants) to meet at the site and provide a joint opinion to the court as to how best to comply with the original orders of Nolan J., dated June 17 and July 13, 2011. That was to occur by November 30, 2011.

7. The details of such plan were set out in a letter dated December 5, 2011. Although the letter was on the letterhead of Mr. Mikkelsen’s firm, it was signed by both he and Mr. Crozier.

8. On December 6, 2011, Mr. Sabelli appeared without counsel as he had dismissed his previous counsel. On that date, Gates J. ordered the work set out in the joint letter dated December 5, 2011 to proceed under the direction of Mr. Crozier.

E. Sale of SBW Property

[178] On January 25, 2012, Sabelli Boiler Works Inc. sold the property to Kapital Produce Ltd. (“Kapital”) for $400,000 with a vendor take-back mortgage of $390,000. The principal of Kapital was Mr. Ollie Mastronardi.

F. Commencement of Superior Court Action CV-12-17852

[179] The plaintiffs commenced the within action on May 4, 2012, seeking a number of remedies as follows:

1. A declaration that the Minutes of Settlement dated November 16, 2010 in the Normal Farm Practices Protection Board file number 2009-04 have been frustrated and accordingly the parties have for that reason been discharged subject to the defendants’ liability for damages claimed herein.

2. Damages in amount of $100,000 representing legal costs incurred by the plaintiff in respect of the conduct of action no. CV-10-14402.

3. Damages in the sum of $500,000 representing the amounts claimed in the discontinued action no. CV-10-14402.

4. Damages in the amount of $50,000 representing the legal and professional costs incurred by the plaintiff in proceedings before the Normal Farm Practices Protection Board under file number 2009-04.

5. Damages in the sum of $100,000 representing legal and other professional costs incurred in action no. CV-11-16273.

6. Damages estimated but not limited to the amount of $100,000 for damages sustained by the plaintiff as a result of the unlawful flooding of its lands and/or sustained by reason of the plaintiff’s efforts to ensure that no flooding occurs.

7. Pre-judgment and post-judgment interest in accordance with the provisions of s. 128 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended.

8. Costs of this action on a substantial indemnity basis plus G.S.T.

G. Other Relevant Events Following the Commencement of This Action

1) Kapital declines to construct a berm

[180] By letter dated October 30, 2012, Mr. Mastronardi wrote to Mr. Sabelli. The letter indicated that while he had reviewed the drawing prepared by Mr. Crozier regarding drainage on the former SBW property, he was “not agreeable to carrying out the work at this time”.

2) Observations of Mr. Bruce D. Crozier

[181] On December 11, 2012, Mr. Bruce D. Crozier[^3] wrote a letter to Mr. O. Mastronardi. In that letter, he stated in part from his observations as follows:

There has been some work carried out at the site since I last visited the site. The berm that is located at the west top of a drainage ditch along the east side of the property has been beefed up which has resulted in no water able to drain from the subject property to the adjacent property to the east.

The previous property owner has constructed drainage ditches (swales) around the perimeter of the property which directs the stormwater runoff from the site to the existing retention pond in the northwest corner of the property.

We have had a lot of rain over the past few weeks and the overflow water appears to be making its way to the retention pond. The ditches (swales) were not constructed using laser controlled equipment so there is some water ponding in the bottom of the ditches (swales) however, this is not causing any problems.

The pile of topsoil that was once located in the centre of the site has been reduced in size considerably over the past few months.

As a result of my visual inspection of the site it can be stated that with the construction of the drainage ditches (swales) along with the beefing up of the berm along the east side of the property, the storm water runoff from the site should be directed to the retention pond and not to the adjacent properties either on the east side, west side or north side of the subject property.

[182] However, at no point was the grading plan approved by the Town of Leamington as prescribed in the MOS.

3) Sale of SBW Property to Gryphon Automation

[183] On August 29, 2014, Kapital sold the former SBW property to 2217273 Ontario Inc., c.o.b. as Gryphon Automation (“Gryphon”). The principal of Gryphon was Mr. Donald Murney. Gryphon was a tenant of Kapital on the SBW property between 2012 and 2014. As SBW still held a mortgage on the property, it entered into a mortgage assumption and amendment agreement, also dated August 29, 2014, in the principal amount of $350,000.

4) Drainage Act Proceedings

[184] Throughout 2015, proceedings were conducted pursuant to the Drainage Act, R.S.O. 1990, c. D.17, as amended. Gryphon had challenged the property tax assessment to the former SBW property.

[185] The hearing was held on November 3 and 25, 2015. The Chair of the Tribunal was Mr. Kirk Walstedt.

[186] Mr. Murney, the appellant, appeared and testified. Mr. Sabelli testified for the appellant.

[187] Mr. Cooke appeared as counsel for Brunato Farms, the assessed property owner.

[188] Mr. Mikkelsen testified for Brunato.

[189] While the proceeding pertained to related, but not identical, legal issues, and conducted under different procedural rules, the following is noted from the decision of the Tribunal, released February 11, 2016:

1. The decision reviewed in some detail the history of these properties including the various legal proceedings.

2. At paragraph 8, the Tribunal referenced the hiring of Mr. Crozier and Mr. Mikkelsen respectively to prepare a plan that Justice Gates ordered to be completed. Specifically, the Tribunal stated:

It is unfortunate that Sabelli did not proceed to implement all of the work proposed, but the Tribunal still sees the Crozier-Peralta proposal as a reasonable, cost effective solution to this situation. The key elements of this plan were to: (a) fill the existing easterly pond/ditch on the Sabelli property to an elevation ranging from 2.1 to 2.6 metres higher than the Brunato property; (b) slope that fill material such that it did not erode; (c) vegetate that slope; (d) construct a 0.5 metre high berm along the full length of the top of that slope for an approximate distance of 2560 metres, that is the full length of Sabelli’s east property line with Brunato; (e) vegetate that berm; and (f) grade the underdeveloped part of the Sabelli property to the northwest toward the existing pond in the northwest corner. If and when all of this work was competed, the only water that would flow from the west toward the Brunato property would be the rain that fell on the east side of the berm. Based on the evidence provided, the only key element of the plan that has not been completed is the construction of the berm.

[190] The Tribunal also found that the drainage plan under consideration was excessive and that the Crozier-Peralta plan was sufficient because it was cost effective and would “prevent any significant flow of surface water from the Murney property (formerly SBW) onto the Brunato property.”

[191] The Tribunal allowed the appeal and stated as follows, at para. 9 on page 14:

The Tribunal agrees with Justice Gates that the Crozier-Peralta Plan is a cost effective solution to this situation. Accordingly, the Report will be referred back to the Municipality to include only the construction of the berm on the Murney property. All of the costs associated with building the berm, including any allowances and any other work done there, shall be assessed equally to the Murney and Brunato properties, on the basis that there is advantage to the Brunato lands due to cut-off benefit and injuring liability to the Murney property for better control of surface water. The maintenance costs of this berm shall be assessed in the same manner, 50% to the Brunato property and 50% to the Murney property.

VIVA VOCE EVIDENCE OF THE WITNESSES

A. Chris Del Greco

[192] Much of the evidence of Mr. Del Greco consisted of his narrative of the case through the various photographs and videos he took as well as the significant documentation that accumulated with respect to this matter.

[193] He discovered the water in the greenhouse on the morning of March 11, 2009. The plaintiffs had been concerned with the activities of the defendant Mr. Sabelli for some time. He had been taking pictures regularly right up to the date of the incident, and after. He did not, however, take any pictures at the time the flooding allegedly occurred. To that extent, the usefulness of his evidence to support his allegation that water negligently escaped from the SBW property and entered the Tri-B greenhouse was limited. In large part, the plaintiffs had to prove their factual allegations by circumstantial evidence. That evidence consisted of the various photographs taken before the incident and other observations, evidence of the conduct and attitude of Mr. Sabelli and the proposed expert evidence of Mr. H. Mikkelsen.

B. Scott Shilson

[194] Mr. Scott Shilson testified that in 2005 he was with Mr. Pete Brunato when Mr. Sabelli approached them and advised it was his intention to “let his water come right over the Brunato lands” after it was suggested to him he needed another outlet for his water.

C. Lu-Ann Marentette

[195] Ms. Lu-Ann Marentette was a witness for the plaintiffs and was responsible for notifying the Ministry of the Environment of the flood and that vegetable waste had escaped the SBW property. She testified the soil under the ditch was impermeable clay. This was a factor in the grading plan being approved by Leamington.

D. Frank Sabelli

[196] Mr. Sabelli testified on behalf of the defendants.

[197] In many respects, I found him to be a problematic witness. Specifically, he often did not answer questions directly. He was combative when being cross-examined by counsel for the plaintiffs. He was unable to provide the court with a cogent reason as to the purpose why he constructed a significantly large ditch on the eastern edge of the SBW lands abutting the Tri-B land. He suggested this was done to funnel water to the SWM pond situated in the northwest corner of the SBW property. While there was evidence that he

was attempting to construct a link from the ditch to the SWM pond, I am not satisfied that was a bona fide exercise.

[198] When considering his actions and his comments to Mr. Shilson, I have concluded that, at best, he was indifferent as to whether water from his property escaped onto the Tri-B property.

[199] In one respect, however, Mr. Sabelli was consistent in his testimony. He was adamant that the flooding occurred inside the North Range of the Tri-B greenhouse on March 10, 2009 was not caused by his actions and more relevantly that the plaintiffs could prove otherwise on a balance of probabilities.

[200] While I have significant concerns regarding the attitude, conduct and approach taken by Mr. Sabelli in these proceedings, they are not dispositive of the material issues in this case.

[201] The plaintiffs still had the clear onus to satisfy the court that they are entitled to rescission of the Minutes of Settlement. If successful in that respect, they also had the onus of proving, on a balance of probabilities, that the defendants negligently caused water from the SBW land to escape onto the plaintiffs’ property and flood their greenhouse.

[202] For the reasons that follow, I have concluded they did not succeed in either respect.

ANALYSIS

Issue #1 – Are the plaintiffs legally entitled to pursue their original tort claim, or should they be precluded on a jurisdictional basis due to res judicata, issue estoppel, or some other legal impediment arising out of the Minutes of Settlement?

[203] While this is, in essence, principally a tort claim made by the plaintiffs, it has been framed as a breach of contract action.

[204] This is the third legal action commenced in the Superior Court of Justice relating to alleged flooding of the Tri-B greenhouse on March 10, 2009.

[205] At issue is the legal effect of the Minutes of Settlement reached on November 16, 2010, because it resulted in the initial tort action (CV-10-14402) being discontinued “with prejudice”.

[206] The threshold legal issue before the court is whether the terms and conditions of the MOS legally preclude the plaintiffs from pursuing a claim for damages from the 2009 flooding incident in this action.

A. Positions of the Parties

1) Plaintiffs

[207] The plaintiffs assert that the Minutes of Settlement formed a contract with both parties providing consideration.

[208] The plaintiffs agreed to discontinue CV-10-14402 with prejudice once an injunction order they obtained was lifted.

[209] In exchange for that, the defendants agreed to do the following:

1. Control and limit their ongoing use of the SBW property in a number of ways delineated on the document; and

2. Pay the costs of retaining a mutually acceptable engineer to prepare and have approved by the Town of Leamington a suitable plan for the construction of a berm to be positioned along the property line and to ensure that water could not escape the SBW property to the Tri-B property. That berm was to be constructed at the cost of the defendant.

[210] Following the execution of the Minutes of Settlement, a number of issues that arose with respect to the alleged failure of the plaintiffs to:

i) utilize the SBW property in compliance with the Minutes of Settlement; and

ii) follow through with the necessary plan to have the berm designed, approved and complete construction.

[211] The plaintiffs commenced action CV-11-16273 to address these compliance issues. They also very generally referenced their claim for damages as described in the original action.

[212] The plaintiffs submit the actions of the defendants (or lack thereof) constitute a repudiation of the agreement by SBW. That is, SBW breached the contract by failing to complete the construction of the berm by the 2013 timeline prescribed in the MOS. The actual breach occurred on January 25, 2012 when SBW sold the land to a third party, Kapital Produce Ltd. As a result of selling the land and giving up legal control of the property, SBW breached the agreement. The plaintiffs characterize this as an anticipatory breach because it occurred before the 2013 deadline.

[213] Counsel for the plaintiffs submitted the sale of the SBW property had the effect of “... ending the contract and bringing action for rescission whereupon the parties are restored to that initial pre-contractual position by requiring the restoration of benefits transferred.” The most significant benefit lost by the plaintiffs was the discontinuance of the 2010 tort action. Should the court find the defendants failed to comply with the Minutes of Settlement this would warrant a declaration rescinding the MOS. Accordingly, the court should set aside the discontinuance and permit the plaintiffs to pursue their original tort claim for damages arising from the March 10, 2009 flooding incident.

[214] While the word “rescission” is not actually used on the claim, counsel for the plaintiffs referenced wording in the amended Statement of Claim date June 1, 2017 that could only be interpreted as a claim for rescission. At para. 31(a) of the amended claim, the plaintiffs reference the sale of the SBW property as the triggering event. This was communicated in open court on January 31, 2011 when Mr. Sabelli advised that the property was being sold.

[215] Because of this breach, the legal principle of rescission applies. As such, the appropriate remedy is for the court to put the parties back where they were immediately before they reached a settlement. This would permit them to resurrect their original tort claim. Once the court has rescinded the Minutes of Settlement, the plaintiffs would establish on a balance of probabilities that the March 10, 2009 flooding was caused by the negligence of the defendants.

2) Defendants

[216] The defendants take the position that the plaintiffs bear the onus of establishing on a balance of probabilities that the defendants materially breached the Minutes of Settlement.

[217] They submitted there was no breach of the Minutes of Settlement, as they completed (or substantially complied with) the Minutes of Settlement. They suggest that construction of a berm in June of 2011 is proof of same.

[218] Furthermore, the defendants submit the plaintiffs should not be permitted to resurrect the tort claim by operation of res judicata/issue estoppel. They assert that this issue has been decided by the Minutes of Settlement and also the decision of the Drainage Act Tribunal.

B. Discussion

[219] First and foremost, I agree with the defendants that the plaintiffs must prove, on a balance of probabilities, that the defendants materially breached the Minutes of Settlement. Although the defendants may lead evidence in support of their position, they are not obliged to disprove the allegations of the plaintiffs. The burden of proof rests with the plaintiffs and does not shift to the defendants.

[220] I start this analysis by stating that the defendants breached the terms and conditions of the Minutes of Settlement. That is, they did not complete the grading plan and build a berm in accordance with the terms and conditions of the Minutes of Settlement. In reaching this evidentiary conclusion, I have considered a number of factors.

[221] I find that the SWM plan prepared by the two engineers was never approved by the Town of Leamington prior to December 31, 2013.

[222] I do not accept that the berm was constructed in full compliance with the Minutes of Settlement by 2011. It is noted that the ultimate construction of the berm was directed in the 2016 decision pursuant to the Drainage Act proceeding.

[223] Furthermore, and irrespective of whether the sale of the property by SBW to Kapital was a bona fide legal transaction, it did not, in and of itself, extinguish the contractual obligations of the defendants.

[224] The terms and conditions of the Minutes of Settlement prescribed a deadline of December 31, 2013 to construct the berm in accordance with a delineated process. There is nothing in the Minutes of Settlement that limited or otherwise extinguished, that obligation on the sale of the SBW property.

[225] While it may have been a nifty and clever legal manoeuvre on the part of Mr. Sabelli to sell the property as the Minutes of Settlement did not expressly prevent such a sale, that transaction alone did not legally extinguish the obligations contained therein. Frank Sabelli, Anna Sabelli and SBW were clearly obligated to carry out the commitments made in the MOS.

[226] Mr. Cooke for the plaintiffs characterized the sale as an “anticipatory breach”. To the extent the sale signalled that Mr. Sabelli had no intention of honouring his obligation regarding the berm, I agree.

[227] The actual breach, however, did not occur until December 31, 2013 passed.

[228] Mr. Sabelli’s involvement continued past the sale of the property. By letter dated October 30, 2012, he received the following advisement from Mr. Mastronardi:

I Ollie Mastronardi, am the owner of the former Sabelli Boiler Works Inc. property at 123 Wilkinson Drive in the Municipality of Leamington.

Since I am the owner I am not in favour of any drainage work being carried out on this property at this time.

I have reviewed the drawing that was prepared by Mr. Bruce D. Crozier P. Eng. For the drainage of the subject property, however, I am not agreeable to carry out the work at this time.

[229] All of this leads to the conclusion that whatever the mind-set of the defendants was at the time they entered into the Minutes of Settlement, they had no intention to continue to be bound by the Minutes of Settlement after the sale of the property was completed.

[230] The sale of the property was not a panacea. If the defendants intended to honour the bona fide commitment they made in the Minutes of Settlement, they could easily have made it a condition of any sale that the purchaser was obligated, at a minimum, to permit the construction of the berm. They decided to sell. They controlled the manner in which the property was sold. No third party or conflicting legal obligation compelled the sale of the property.

[231] They chose not to do so and did so at their peril.

[232] By their incomplete performance of the grading plan, the defendants repudiated the Minutes of Settlement.

[233] While I have reached the conclusion that the defendants breached the Minutes of Settlement and repudiated same, that alone is not dispositive of the issue of whether the plaintiffs can seek rescission of the Minutes of Settlement.

[234] For the reasons that follow, I have concluded that the plaintiffs should not be permitted to pursue the tort claim from the 2009 flooding.

[235] I have reached this conclusion, not because I have made a finding that the tort issue is res judicata, or the subject of issue estoppel as there is no need to complete such an analysis. The plaintiffs are not permitted to resurrect the tort claim because they fully and finally contracted away that right/opportunity. An analysis of the wording of the Minutes of Settlement leads to this conclusion.

1) The Minutes of Settlement

[236] I commence by confirming that in considering the terms and conditions of the Minutes of Settlement, I have followed the principles of interpretation. I have looked at and considered the entire document. I have interpreted all words by their clear meaning. I have concluded that there is no ambiguity in what the parties agreed to do (and not do) on the face of this agreement.

[237] I have concluded that the defendants breached the terms because, pivotally, they did not have the grading plan approved by Leamington, and did not complete the construction of the berm as prescribed. However, I have also concluded that the parties did not agree (or leave open the possibility) that a breach of the MOS would entitle the plaintiffs to rescind the MOS and permit the tort claim to be re-opened.

[238] A review of the entire Minutes of Settlement document reveals these clear and unambiguous intentions.

[239] Paragraphs 1, 2, 3 and 4 set out the preliminary steps the defendants had to complete at their expense towards building a berm to be built by December 31, 2013 (para. 5).

[240] Paragraphs 6 through 14 prescribe various conditions that the defendants had to observe regarding their continued use of the SBW land. Those conditions pertained to the type of material that could be brought on the property, when and where that could occur, and the conditions relating to the manner certain substances (such as mushroom substrate) could be brought on the SBW property.

[241] In exchange for the promise of the defendants to prepare and execute a grading plan within three years and honour the various conditions regarding the continued use and transport of fill onto the SBW property, the plaintiffs committed to do the following:

1. Lift the outstanding injunction within two weeks (paras. 15 and 16).

2. Discontinue action CV-10-14402 on a without costs and with prejudice basis (emphasis added) (para. 15).

[242] In paragraph 18, the parties agreed that once all terms of the agreement were completed, they would execute and exchange mutual full and final releases that “include all matters” that have been or could have been raised in the Court Action or in Normal Farm Practices Protection Board.

[243] The final paragraph of the Minutes is also significant. It provided as follows:

19. Any dispute, including any request for injunctive relief between the parties about any aspect of this agreement will be resolved pursuant to the Arbitrations Act, R.S.O. 1990, c. A.24 [sic].[^4]

[244] Mr. Cooke attempted to convince the court that his client retained the right to pursue the tort claim because the defendants rescinded the agreement. Counsel relied on the manner in which the NFPPB’s decision confirming the termination of that process was worded to support the contention that any differences arising out of the Minutes of Settlement could be enforced through court action, such as is before the court.

[245] With respect to that capable advocacy, I disagree with those submissions for a number of reasons, as follows:

1. There was no reference made in the Minutes of Settlement to the NFPPB process.

2. The NFPPB played no part in the creation or approval of the Minutes of Settlement.

3. In fact, the NFPPB distanced itself from the Minutes of Settlement by stating their differences could be resolved “through legally and enforceable contractual arrangements with which the Board need not be involved” (emphasis added). That is, the NFPPB had no input knowledge or power of enforcement with respect to the settlement – the terms of which it did not know.

4. The “legally and enforceable contract arrangements” referenced by the NFPPB were, in effect, prescribed by the Arbitration Act mechanism outlined in para. 19 of the Minutes of Settlement.

[246] I have concluded that by agreeing to discontinue the action with prejudice and inserting an arbitration clause for enforcement of the respective promises, the plaintiffs abandoned their claim for the tort damages in exchange for the construction of a berm pursuant to a grading plan within three years. The consideration received by the plaintiffs was construction of the berm.

[247] What they obtained was the right to preserve that consideration in the event of non-compliance. That is, they retained the ability to enforce the Minutes of Settlement by having the berm constructed at the cost of the defendants.

[248] The interpretation suggested by the plaintiffs would effectively excise or render meaningless the words “with prejudice” from para. 15 of the Minutes of Settlement.

[249] Counsel was unable to provide the court with a satisfactory answer to the following question: What is the purpose of the “with prejudice” discontinuance of the action if not to signify an absolute end to the tort claim? Mr. Cooke suggested that it was normal counsel practice in this area for actions to be discontinued with prejudice in this manner. He provided no evidence to support this assertion. However, regardless of whether or not it is a local counsel practice, the Minutes of Settlement are not ambiguous. As such, there can be no extrinsic evidence permitted to assist the court with the interpretation of those words.

[250] I cannot ascertain any other purpose for those words other than to signify the following:

a) CV-10-10442 is fully terminated to the prejudice of the plaintiffs;

b) The fundamental consideration provided to the plaintiffs was the construction of the berm they believed would prevent future flooding.

[251] Had the parties intended for the tort claim to remain “alive” until such time as the berm was properly constructed, they could have worded the document simply and clearly to that effect.

[252] There were any number of ways in which retention of the tort claim in the event of non-compliance could have been clearly and unequivocally preserved.

[253] For example, I note that there was nothing contained in the Minutes of Settlement that did any of the following:

i) hold the with prejudice discontinuance of action CV-10-14402 in abeyance pending full satisfaction of the defendants’ obligations pursuant to the Minutes of Settlement.

ii) require that the Minutes of Settlement be registered on the title to the SBW property so that a bona fide purchaser would have notice they would be required to complete the berm if they took title;

iii) require the defendants to consent to the registration of a Certificate of Pending Litigation on the SBW property pending satisfaction of the defendants’ obligation pursuant to the Minutes of Settlement;

iv) prohibit the defendants from selling the SBW property prior to satisfaction of the Minutes of Settlement in any manner, including but not limited to a sale without the written consent of the plaintiffs;

v) specifically delineate that the tort damages claimed in the statement of claim could be revisited notwithstanding the discontinuance of the action if the defendants failed to fully comply with the terms of the Minutes of Settlement; or

vi) simply referred to the discontinuance of the civil action as being “without prejudice” or made “without prejudice to the claim being revived” should the defendants fail to fully satisfy their obligation to build a berm by December 31, 2013.

[254] Any one (or more) of those type of enforcement provisions could have clearly informed the court that the discontinuance of the action was not absolute. Not to put too fine a point on it, but if the parties intended for the tort claim to only be extinguished on the completion of the berm (and the other terms of the Minutes of Settlement), they could have delayed the discontinuance of CV-10-10442 until that time. They did not.

[255] Unfortunately for the plaintiffs, no words to any such effect were contained in the Minutes of Settlement.

[256] I can only interpret the document as clearly and unambiguously demonstrating a reciprocal intent that the plaintiffs permanently discontinue the tort claim forthwith upon removal of the injunction they had obtained. The prejudice the plaintiffs suffered was the permanent and irretrievable loss of their tort claim.

[257] The inclusion of the arbitration provision further supports a finding that the parties intended for the agreement to be a trade. That is, the agreement was for the discontinuance of the action in exchange for the construction of the berm and ongoing use control of the SBW property.

[258] The arbitration clause was inserted to provide the parties with a mechanism to enforce those terms and conditions of the Minutes of Settlement. It is noted that an arbitrator was subsequently appointed pursuant to an order by Nolan J. but that process was discontinued by the parties.

[259] That provision was in no way intended to provide an arbitrator appointed pursuant to the Arbitration Act with jurisdiction to hear and determine the tort claim referenced in the discontinued action.

[260] Furthermore, and perhaps more significantly, the arbitration clause signified that the plaintiffs had an agreed upon mechanism to enforce the construction of the berm.

[261] While it is evident from the wording of the Minutes of Settlement that the plaintiffs contracted away their tort action, it is also clear that they preserved the ability to enforce the commitment to have the berm constructed. As indicated, the Minutes of Settlement could have better codified this entitlement by including, for example, conditions that went with the title to the SBW property. While insertion of more stringent and clearer enforcement provisions would have been better for the plaintiffs, the absence of same was not fatal to their ability to enforce that commitment.

[262] As well, the specific remedies sought by the plaintiffs in the numerous injunction applications made (and orders obtained) further support this conclusion. By way of example, the orders of Nolan J. dated June 17, 2011 and July 13, 2011 dealt with the defendants’ obligation to construct a berm according to directed specifications. Later, on November 24, 2011, Gates J. made an order for Mr. Mikkelsen and Mr. Crozier to meet and provide an opinion to the court on how best to comply with the orders of Nolan J. to construct a berm. Each of these orders dealt with enforcement of the MOS.

[263] Mr. Cooke submitted this situation was analogous to a transaction between two parties with respect to the sale of a vehicle for a certain price. If the vendor delivers the car and does not receive payment, they are entitled to rescind the agreement and take the vehicle back. In this instance, he suggests the “vehicle” is the tort action.

[264] With respect, I do not think that is the appropriate comparison. This was not a sales transaction. Rather, the parties reached an agreement that was prospective in nature and centred around future obligations. The parties set out those obligations and provided for an enforcement mechanism.

[265] I liken the situation as more like a mortgage transaction where a property owner seeks a loan and is prepared to offer land as security for repayment. That person receives money from the lender in exchange for a commitment to repay the principal amount (usually with interest). To provide security to the lender, a mortgage document is put on title to the property. In the event of default, the lender can legally pursue various remedies, including a sale of the property.

[266] I liken these Minutes of Settlement to that type of agreement. In exchange for money, the borrower agrees to repay that amount with interest. Once that amount is paid in full, the lender will discharge the enforcement provision by discharging the mortgage.

[267] However, by analogy to this matter, in agreeing to discontinue the action with prejudice, it would be as if a lender would provide the funds and then discharge the mortgage forthwith.

[268] If that occurred, the lender would not be without remedy in the event of a failure to pay off the amount borrowed as they could still claim against the borrower for unpaid amounts. However, they would generally not be legally able to set aside the discharge of the mortgage and pursue remedies thereunder unless, at a minimum, they could establish fraud.

[269] For all of these reasons, I have concluded that the intent of the parties was to clearly and unambiguously permanently terminate the tort claim. It would be an unreasonable interpretation of the Minutes of Settlement to conclude otherwise.

[270] Since I reached this conclusion on an interpretation of the Minutes of Settlement, I will not determine whether the principles of res judicata or issue estoppel apply as they are moot.

2) Is rescission available to the plaintiffs?

[271] In addition to the foregoing, it is noted that the plaintiffs asserted that irrespective of the wording of the Minutes of Settlement, the failure of the defendants to complete the construction of the berm constituted a repudiation of the Minutes of Settlement. For this reason, the plaintiffs should be put back to the legal situation immediately before they reached the Minutes of Settlement.

[272] I disagree that this is the appropriate remedy for repudiation.

[273] In Jedfro Investments (U.S.A.) v. Jacyk Estate, 2007 SCC 55, [2007] 3 S.C.R. 55, at para. 20, the Supreme Court of Canada explained “[a] contract may be said to be repudiated when one party acts in a way that evinces an intent to no longer be bound by the contract. The other party then may, at its option, elect to terminate the contract.”

[274] The determination of whether a party intends to no longer be bound by a contract is objective; the court must consider whether a reasonable person would conclude that the breaching party no longer intends to be bound by the contract (see Spirent Communications of Ottawa Ltd. v. Quake Technologies (Canada) Inc., 2008 ONCA 92, 233 O.A.C. 74, at para. 37). The court must also consider whether the breach deprives the innocent party of substantially the whole benefit of the contract (see Spirent Communications, at para. 37).

[275] As set out above, I have concluded that the defendants repudiated the Minutes of Settlement.

[276] It is clear from the Supreme Court’s decision in Jedfro Investments that to establish a repudiatory breach, more is required than a party ignoring or having “little regard” for the terms of an agreement (para. 21). The Ontario Court of Appeal in Remedy Drug Store Co. v. Farnham, 2015 ONCA 576, 337 O.A.C. 257, at para. 46, explained that the nature of the contract, attendant circumstances and the motives which prompted the breach must also be considered. The court must not focus too heavily on one isolated act and fail to give proper consideration to the surrounding circumstances.

[277] The surrounding circumstances in this case are drawn out. It is noted that the defendants did take steps in furtherance of their obligations. For example, they retained Mr. Bruce D. Crozier to begin working with Mr. Mikkelsen to development grading plan that could be agreed upon.

[278] At times, there were disputes. These are evidenced by the numerous instances the parties returned to court pursuant to CV-11-16273.

[279] This claim is essentially the same claim as set out in CV-10-14402. The parties appeared in Superior Court five times in 2011. The appearances and orders of Gates J. issued on November 24, 2011 and December 6, 2011, both speak to steps being taken by the plaintiffs to have the Minutes of Settlement enforced.

[280] Furthermore, in this claim, CV-12-17853, the plaintiffs seek a declaration that the Minutes of Settlement dated November 16, 2010 (and the NFPPB proceedings) have been “frustrated”. The Minutes of Settlement were not frustrated, but rather breached by the defendants.

[281] As addressed above, it is clear that once the defendants sold the SBW property, they had no intention of fulfilling their obligations under the MOS. This amounts to a repudiation of that contract. As a result of that repudiation, the plaintiffs were deprived of substantially the benefit of the contract. What was the benefit? That benefit was the construction of the berm, not the Lazarus-like resurrection of the tort claim.

[282] Does the repudiation by the defendants entitle the plaintiffs to the remedy of rescission? In a word, no.

[283] There is often confusion between rescission and repudiation. The Supreme Court of Canada delineated this “fundamental confusion” in Guarantee Co. of North America v. Gordon Capital Corp., 1999 CanLII 664 (SCC), [1999] 3 S.C.R. 423, at paras. 39-47.

[284] The term “rescission” is often misused to describe an accepted repudiation. However, the two are not synonymous. Rescission is a remedy available to one party to a contract when the other has made a false or misleading representation that induced the innocent party to enter into the contract. In such a situation, the innocent party is entitled to rescind the contract and the parties should be placed in the position in which they stood before the contract was entered into.

[285] Accepted repudiation, by contrast, occurs when one party expresses an intention to no longer be bound by the contract and the innocent party accepts that repudiation. In that situation, the contract is terminated, and the parties are discharged from any future obligations. Importantly, those rights and obligations that have already matured are not extinguished. The innocent party may sue for damages.

[286] The Supreme Court recognized that confusion between these two terms is frequent, and obliged courts to give effect to the intention of the parties (Guarantee Co. of North America, at para. 42). Where the term “rescission” is used to describe what is, in effect, accepted repudiation, the court should interpret it as such.

[287] In this case, the plaintiffs are clearly making a claim for accepted repudiation. In para. 273 of the Written Argument of the Plaintiffs, they submit as follows,

Where the contract or minutes of settlement are repudiated, as in this case, the innocent party may accept the repudiation (which was done in this case by the commencement of this action) ending the contract and bring an action for rescission whereupon the parties are restored to their initial pre-contractual position by requiring the restoration of benefits transferred – in this case the discontinuance of the 2010 action.

[288] The plaintiffs make no argument (nor do I find) that they were induced into the contract by fraud or material misrepresentation. Accordingly, notwithstanding counsel’s submission that they are entitled to rescission, in reality they are not. The defendants repudiated the Minutes of Settlement and the plaintiffs accepted that repudiation by taking myriad steps to obtain injunctions and otherwise enforce the obligation of the defendants to construct the berm.

[289] As said above, the appropriate remedy where the innocent party has accepted repudiation is damages. Although the contract is terminated, it is only those rights and obligations that have not already matured that are discharged (see Guarantee Co. of North America, at para. 40). The plaintiffs already fulfilled their obligation to discontinue action no. CV-10-14402 on November 16, 2010, with prejudice. Accordingly, that aspect of the settlement agreement has matured in the absence of fraud or misleading representation.

[290] The plaintiffs contracted away the tort claim in exchange for the construction of the berm. They did not receive that benefit because the defendants repudiated the Minutes of Settlement.

[291] For these reasons, I have concluded that the plaintiffs are not entitled to pursue the original claim for damages.

Issue #2 – Have the plaintiffs established on a balance of probabilities that the negligent actions of the defendant(s) caused the Tri-B greenhouse to flood?

[292] Even though I have determined that the plaintiffs are not entitled to a rescission of the terms and conditions of the Minutes of Settlement and pursue the original tort claim, I am going to conduct a brief analysis of the evidence on this issue in case my legal conclusion in that respect is erroneous.

[293] For the reasons that follow, I have concluded that the plaintiffs have not satisfied the evidentiary burden with respect to the flooding of the greenhouse.

[294] In arriving at this conclusion, I must emphasize that this is clearly an evidentiary threshold that the plaintiffs have failed to clear. On the evidence before the court, I am unable to determine who or what caused the flooding for a variety of reasons. That is, the plaintiffs did not satisfy the court that it was more likely than not that the flooding was caused by the negligence of the defendants.

[295] With respect to the viva voce evidence, I have taken into account the evidence of all of the witnesses called by the plaintiffs with the caveat that I have only considered the testimony of Mr. Mikkelsen with respect to the work he performed and his knowledge of the various things he personally observed and reviewed.

[296] For the defendants, I have considered the evidence of Mr. Sabelli. As previously indicated, since Mr. Lecce was not involved in anything relating to those properties until he was retained in 2016, I have not considered his evidence in any way.

[297] I have reviewed and considered the hundreds of photographs entered into exhibit, the various videos, and the wide array of engineering drawings, maps and surveys.

[298] In the end, I am unable to conclude on a balance of probabilities that the flooding that occurred on March 10, 2009 was caused by the negligence of the defendants. In its simplest form – I do not know with any degree of certainty what caused water and other materials to be discovered in the southwest corner of the New Range of the Tri-B greenhouse.

[299] With respect to the March 10, 2009 incident, Mr. Del Greco did not notice there was anything in the greenhouse until the day after the rainfall.

[300] From an evidentiary perspective, that required the plaintiffs to attempt to prove their case relying on circumstantial evidence.

[301] In large part, that evidence consisted of those hundreds of photographs (and a few videos) starting months before the incident and continuing for years following. The defendants also submitted hundreds of pictures and a few videos.

[302] In many respects, this evidence outlines the toxic “Hatfield/McCoy” relationship that existed between these parties throughout the entire period they owned these adjacent properties. It is clear from the evidence that the parties had an intense dislike for each other. They were each involved in building a photographic and video portfolio documenting this rancor. Occasionally they trespassed on each other’s property to make observations and obtain evidence. At one point, Mr. Sabelli was arrested and charged. None of this is necessarily relevant to determining whether the defendants caused the plaintiffs’ greenhouse to be flooded.

[303] However, and relevantly, the photographs (in particular) provide the court with important evidence that can be assessed and analyzed away from the inherently subjective nature of the viva voce evidence.

[304] In this regard, I have followed the reasoning of Pomerance J. in R. v. S. B., 2017 ONSC 5924, where she commented on the objective purpose photographs serve in cases where there is conflicting witness evidence.

[305] At para. 128, she stated:

Due to their objective quality, the photographs serve as an effective anchor for the fact-finding process. The credibility and reliability of oral testimony can be measured against this backdrop. Similarly, the records of internet activity and text messages on Mr. S.B.’s and Ms. A.D.1’s phones tell us what was communicated and what was searched on those phones in the days leading up to R.D.’s death. There may be questions of interpretation, but there is no dispute that someone typed the words, as recorded, on the phones in question. This too stands as reliable evidence from which certain inferences may be drawn, and against which certain testimony may be assessed.

[306] In this case, the photographs were essential to the conclusions reached with respect to the flooding incident.

[307] I start by making a general but specific observation. The photographic evidence I reviewed covered the period from a year before to and including the flooding incident and for years thereafter.

[308] In the entirety of that catalogue of photos, none of them show water situated at, pooled, flowing, resting, or even within two feet of the point of alleged entry to the southwest corner of the North Range.

[309] Parenthetically, I note that this observation from the photographs also applies to the entire west wall of the Tri-B greenhouse.

A. Was the March 10, 2009 flooding caused by the acts or omissions of the defendants?

[310] The plaintiffs assert this question has been answered positively on a balance of probabilities.

[311] Mr. Sabelli created the mound on the western side of the SBW land.

[312] The mound attracted insects that were potentially harmful to the plaintiffs’ greenhouse operation.

[313] Mr. Sabelli continually reconfigured the SBW land in the period leading up to the flooding incident.

[314] Eventually, he constructed a ditch of significant width that was located on the property line with the Tri-B greenhouse land. The ditch was situated on a north-south axis.

[315] The plaintiffs were concerned with the scope and nature of the ditch so decided they had to take steps to shore up the berm that marked the boundary line to protect their property. They did this to a height of approximately one foot.

[316] Notwithstanding this work, there was some erosion in the berm that permitted water to escape onto the 9.5-foot-wide parcel of land between the western wall of the Tri-B greenhouse and the property line.

[317] Of particular concern to the plaintiffs was that Mr. Sabelli had been dumping vegetable waste on the SBW property.

[318] Water from that system was directed to a large pond on the north end of the Brunato property. That water was then recycled into the plaintiffs’ greenhouse for irrigation purposes.

[319] The plaintiffs were concerned some of this vegetable waste would enter their SWM system and be directed to the SWM pond. From there, it would enter and contaminate their greenhouse operation during irrigation.

[320] As a result, the plaintiffs altered the sewer designed by Mr. Heide Mikkelsen by capping the exterior drainage outlets. This had the effect of forcing excess water on their land into swales. It would then be directed away from the greenhouse, but not into their SWM system.

[321] The plaintiffs submitted these alterations were not the cause of the water entering the greenhouse. They principally relied on the evidence of the engineer, Mr. Mikkelsen. As indicated, he designed the system (but was then not consulted before the plaintiffs made alterations) to explain that this could not, and did not, cause or contribute to the flooding incident.

[322] The rain on March 10, 2009 was a 1:100-year storm. The effect of this storm was to force excess water from the negligently and irresponsibly constructed ditch on the SBW property onto the Tri-B land and into the greenhouse, causing extensive damage.

[323] Counsel emphasized that the proliferation of vegetable waste from the SBW property deposited on the plaintiffs’ property were evidentiary “breadcrumbs” that prove the defendants were responsible for the flooding of the greenhouse. While there was some vegetable waste situated in the area near the entry point to the water, there was significantly more of such waste deposited at the northwest corner of the Tri-B greenhouse and as far away as Highway #3 – well to the north and east of the Sabelli property.

[324] It is significant to note that the plaintiffs spent considerable effort in their written and oral submissions dismissing the various theories put forward as the cause of the flooding by the defendants. I will not address those submissions because I did not accept Mr. Lecce as an expert witness.

[325] In particular, these were the various theories set out in the report of Mr. Mikkelsen. As well, there was significant viva voce evidence, photographs and video evidence of blowouts that occurred at the base of the western wall of the greenhouse on dates such as June 26, 2009 and July 23, 2010.

[326] I have not taken those attacks on the defendants’ theory of what occurred into account for the following reasons:

1. They were theories promulgated by Mr. Lecce in his expert opinion report because his evidence was not admitted.

2. The onus of proof rests at all times with the plaintiffs. While the defendants can introduce evidence that may be accepted to establish the plaintiffs did not meet this onus, the core question remains. That is, on the totality of the admissible evidence, I can conclude on a balance of probabilities that water from the SBW property was the cause of the flooding that occurred on March 10, 2009?

[327] There are a number of reasons why I have reached the conclusion that the plaintiffs did not satisfy this onus.

1. The alteration of the Tri-B greenhouse system

[328] The plaintiffs significantly altered the original drainage system. Their stated reason for this dramatic change was to purportedly reduce the risk of water from SBW entering the SWM pond.

[329] On the totality of the evidence, I cannot determine what role the original design of the SWM system and/or the non-engineered alteration by capping the exterior drains played no role in the flooding.

[330] For example, I note that the alteration was designed to capture water from the west side of the Tri-B greenhouse and the water the plaintiffs asserted was encroaching from the SBW property swales were designed to direct that water overland to avoid the plaintiffs SWM pond.

[331] From the photographs, it appears that is what occurred. There was accumulation of water to the north end of the Tri-B greenhouse. In photographs taken on March 11, 2009, it is apparent there remained water along the north of the Tri-B greenhouse (east-west) and vegetable waste from the SBW property all the way to Highway 3.

[332] There is similar build up of water at the southern end of the New Range. I am unable to conclude, from an engineering perspective, why this was the situation before and after March 10, 2009.

[333] I did not accept the evidence of Mr. Mikkelsen as an expert witness. However, even based on his report, I am not able to conclude whether or not the capping of the drains did (or did not) cause or contribute to the flooding.

2. Photographs

[334] When I review and examine the numerous photographs taken before and after the incident, I am simply unable to conclude on a balance of probabilities that water escaped from the SBW property and entered the Tri-B greenhouse as alleged by the plaintiffs.

[335] I have reached this conclusion for a number of reasons.

[336] The 9.5 feet of land abutting the west of the Tri-B greenhouse was at a relatively even level along the entire length of the greenhouse.

[337] Where the Tri-B land met the western wall of the greenhouse, it was well above the level of the water in the photographs, on either property.

[338] There were no gaps or erosions in the land at the edge of the greenhouse around the time of the flooding incident.

[339] There is no evidence of a direct water or current channel on the area immediately adjacent to the west side of the Tri-B greenhouse that would have funnelled water directly to the edge of the structure.

[340] Significantly, there is no evidence of a consequential build up or pooling of water on the Tri-B property at the southwest corner of the New Range at any time before, or after, the incident.

[341] While there is a noticeable quantity of water pooled in the swale on the plaintiffs’ property at the north end, even that water was situated well below the base of the greenhouse. This is seen in Exhibit 3, photos 124 and 125 taken on March 11, 2009. There is also no sign in these photographs that water may have receded from the base of the greenhouse at this location.

[342] More directly, the water observed in that same swale in a photograph taken approximately one month earlier on February 12, 2009 (Exhibit 3 – photo 26), was virtually identical in position, depth and distance below the base of the greenhouse.

[343] Exhibit 3 (photo 19) is one of the few pictures taken from a distance facing southward towards the southwest corner of the New Range. That photo depicts the water in the north-south ditch well below the higher elevation on the Tri-B property on December 10, 2008 – three months before the flooding incident.

[344] The berm in this area is depicted that same day in photograph 21 from Exhibit 3. It shows some water pooled on the Tri-B property, but also well below the edge of the greenhouse. The berm also does not appear eroded at this location.

[345] In summary, photos taken at the northern part of the New Range well before and after the March 10, 2009 incident project virtually identical levels of water. This is inconsistent with there being a sufficient presence of water on March 10, 2009 on the Tri-B property at the exterior location of where water and silt were observed on March 11, 2009.

[346] I have concluded that if water came from the SBW property with such sufficiency to enter the New Range, it would have to have travelled onto the plaintiffs’ property in one of two ways:

1. The entire water level in the ditch at the property line rising above the height of the western edge of the Tri-B property and into the greenhouse; or

2. As a stream of water channeling or flowing through one or more breaks in the small berm along the property line and then reaching the point of entry to the greenhouse.

[347] In reviewing the photographs and videos, I am unable to conclude that either of these things occurred.

[348] There is no sign of significant erosion at the property line near the southwest corner of the New Range.

[349] There are no tracks or signs of erosion or water leading to the point of entry to the greenhouse.

[350] The photograph found at Exhibit 2A (Number 20-4) and duplicated at Exhibit 3, photo 69, is significant.

[351] The picture is taken on March 9, 2009. It shows some water pooled in the swale on the Tri-B property. It contains a small quantity of vegetable waste from the SBW property.

[352] There is a shovel in the picture resting on an angle with the handle of the greenhouse and the tip situated at the eastern edge of the water in the swale. To the naked eye using the shovel as a measure, it is clear that the nearest water is at least three feet horizontally from the edge of the greenhouse and vertically two or more feet below that same point. As well, the elevation of the base of the greenhouse was higher than the top of the berm on the property line.

[353] Therefore, in order for the water to have risen to a level to have flooded the greenhouse, the water level on the entirety of the land area depicted outside the greenhouse (which includes the Tri-B land, the berm, the ditch at the SBE property) would have to have been several feet higher than seen in the photo.

[354] In other words, the entire land in this area would have been completely flooded and submerged to a depth of at least two feet for the water to potentially have washed up to the western wall of the greenhouse.

[355] While the rainfall on March 10, 2009 was significant, there is no evidence that the entire area was that flooded. In such an instance, the SBW property would have been totally

submerged, as would the entire western property owned by Tri-B. If such flooding had occurred, it would have been newsworthy as all of the farmland in the nearby community would likely have been flooded as well.

[356] Had there been such a build up of water on March 10, 2009 when Mr. Del Greco discovered the incursion of water and silt inside the greenhouse, there would still have been a considerable quantity of water on the SBW land. The pictures depict virtually no such thing.

[357] As well, had the entire area have been flooded to that extent, the small berm along the property line would have been eradicated. It was not.

[358] Accordingly, I cannot conclude that water from the SBW property rose to such a level so as to overtake the plaintiffs’ greenhouse.

3. The East/West Ditch

[359] The plaintiffs led extensive evidence with respect to a u-shaped ditch running east/west on the SBW property at about the level of the southwest corner of the New Range. This u-shaped ditch joined with the larger ditch on the eastern edge of the SBW property.

[360] In the photographs numbered 71 and 72 (Exhibit 3), entered by the plaintiffs and dated March 9, 2009, it is evident there was a quantity of vegetables in the ditch. There was a small quantity of water therein but in looking at Exhibit 3, photographs 71-75, it is apparent from the erosion in the u-shaped ditch that the highest water travelled therein was a few inches higher than depicted on March 9, 2009.

[361] Exhibit 3 photographs 77-81 show water running into the ditch – not directly onto the Tri-B property.

[362] While water from the u-shaped ditch might have contributed somewhat to the volume of water in the larger ditch, I observed no photo evidence taken after the flooding incident that showed any quantifiable increase in the volume of water in the v-shaped ditch.

[363] Water runs to the lowest point. If water had breached to the berm on the property line with such sufficiency to enter the greenhouse, some of that excess overflow water would have retreated into the v-shaped ditch. That did not occur.

[364] I have concluded that the vegetable waste seen on the SBW property, in the ditch, and on the plaintiffs’ property, came from the defendants’ property.

[365] While this ditch may have been a conduit of vegetable waste from the v-shaped ditch or other locations on the SBW property, and eventually onto the Tri-B property (particularly

at the north end) this evidence does not persuade me that the plaintiffs have proven the flooding occurred as they allege, for the following reasons:

1. There was minimal vegetable waste in the area of the flooding as compared to the area at the north of the Tri-B greenhouse where water had accumulated in the swale as a result, possibly, of the re-engineered by the plaintiffs.

2. There was no vegetable waste depicted in photograph 142 of Exhibit 3 showing the purported entry point into the greenhouse.

3. There was no water observable in that area that is surrounded by three walls.

4. There is no vegetable waste observable in any of the photographs of the water and silt inside the greenhouse.

5. There is no evidence that reveals any flow of water in the area near the commencement of the block wall leading to the southwest corner of the New Range.

6. The Blue Dye Test

[366] The plaintiffs introduced video evidence demonstrating what occurred with the addition of blue dye into the water on the SBW ditch near the north end of the Tri-B greenhouse. The evidence showed the area at the north end of the well wall of the Tri-B greenhouse at the SBW property line. The SBW ditch was full. There were a few breaks in the berm on the property line and there was water pooling in the swale on the Tri-B property.

[367] From this evidence, it is apparent that the dye expanded in the pooled water on the Tri-B property.

[368] However, this evidence does not persuade me that it was water from the SBW property that entered the plaintiffs’ greenhouse for the following reasons:

i) The experiment was conducted well after the flooding incident.

ii) The test occurred at the north end of the property. From a review of all photographs, it is clear that there was a pronounced swale on the Tri-B land in this area, as compared to the area close to the southwest corner where the elevation is higher and any swale is less pronounced.

iii) No such experiment was conducted near the southwest corner of the North Range. I draw an adverse inference from this. It is apparent from the photos that given the topography in this location, the introduction of blue dye in the ditch at that location would not enter onto the Tri-B property to any significant extent, if at all. The land is higher, there is little or no swale and there is little sign of erosion of the berm on the property line.

[369] Accordingly, I am not persuaded by the evidence of the blue dye usage that the plaintiffs have established this as proof that water from the SBW property entered the greenhouse.

B. Conclusion

[370] In order for the water to have reached the greenhouse, the water level would have had to have risen on the SBW property, the small berm along the property line, and the land to the outside of the Tri-B greenhouse to the level of the base of the greenhouse, or higher. I cannot be satisfied on the evidence that this occurred. The volume of water would have needed to uniformly accumulate over the entire acreage, depicted in these photographs by several feet, to have brought water from the SBW property level to the base of the Tri-B greenhouse.

[371] If the water had risen to that level, the photographs (before and after) would have depicted some or all of the following:

(i) The berm along the property line would have been washed away significantly, if not fully, had the entire surface area been covered with water to the level of the base of the greenhouse wall. A review of photograph 23-2 demonstrates this point. That photograph was taken on March 11, 2009 – the day after the alleged incident. It was taken from the northwest corner of the Tri-B greenhouse looking south along the western wall of the greenhouse and out onto the SBW property to the west. The photograph clearly shows that water has breached the berm on the western edge of the Tri-B property and constitutes at least some of the water pooled there. However, that water is situated well below the base of the greenhouse west wall. As well, the land slopes away from the greenhouse at an angle of approximately 45 degrees for about two feet to the settled water.

(ii) There would have been much, much more water laying on the SBW property than depicted in photograph 20-8.

(iii) The water would not have receded as uniformly into the ditch along the eastern edge of the SBW property.

[372] Neither can I conclude, on a balance of probabilities, that a current or stream of water escaped from the SBW property and entered the Tri-B greenhouse. Having reached that conclusion, I have not made a determination whether the flooding incident was caused or contributed to by the negligence of any, or all, of the defendants.

[373] These observations, findings and conclusions should not be interpreted as a determination water from the SBW land did not enter or cause the flooding. Rather, they have caused me to conclude that I cannot conclude on a balance of probabilities that this occurred.

[374] In summary, the plaintiffs’ general theory of the flooding is, as follows:

1. Mr. Sabelli built the north-south ditch for no bona fide reason.

2. He allowed that ditch to hold a significant amount of water.

3. He intended to flood the Brunato lands. Or, at a minimum, he was negligent with respect to that possibility.

4. Mr. Sabelli took no reasonable steps to ensure that water from the SBW property did not escape onto the plaintiffs’ property.

5. Water containing vegetable waste and/or “leachate” entered the plaintiffs’ property as a result of the defendants’ negligence.

6. When the excessive rains occurred on March 10, 2009, some of that water entered the southwest corner of the North Range.

7. There were no blowouts along the property line of the Tri-B greenhouse that might have signified a failure of their SWM system.

8. The various theories and explanations provided by Mr. Lecce exonerating the defendants of any responsibility for the flooding should not be accepted by the court.

9. At para. 270 of their written argument, the plaintiffs summarized their position as follows:

Faced with that and no evidence that there were any alterations to the storm water management system at all one is face [sic] with this indisputable fact. The only thing that changed since the floor of March 2009 was the Sabelli lands. Strong evidence that the cause of the flood was water from the Sabelli lands.

[375] I have considered this general theory of the plaintiffs’ case.

[376] I find that Mr. Sabelli was a less than forthright witness. It is clear that he was, at best, indifferent as to whether the plaintiffs’ greenhouse was flooded. At worst, he maliciously or negligently constructed the north-south ditch to follow through on a plan the facilitate flooding of the Tri-B property.

[377] Given the toxic relationship between these parties, he probably experienced “schadenfreude” when he learned of the flooding. Schadenfreude is a German word loosely defined as experiencing pleasure from learning of the troubles, failures, or humiliation of other persons.

[378] On the issues presently before the court, if Mr. Sabelli was seeking an equitable remedy arising out of this dispute with the plaintiffs, the clean hands doctrine would likely preclude such a remedy. Equity requires the party seeking a remedy to “come to court with clean hands” (see, as a recent example, Servello v. Servello, 2014 ONCA 434, at para. 4). Based on the evidence the court has received and accepted, it is clear that the court would be obliged to take this conduct into account in assessing Mr. Sabelli’s entitlement to any equitable remedy.

[379] However, none of the foregoing alters or changes the underlying principle that the plaintiffs bear the legal onus of proof to establish on a balance of probabilities that the defendant intentionally took steps to flood the greenhouse, or was negligent in how he configured the SBW property so as to cause, or result in, the flooding.

[380] As I have found that the plaintiffs have not proven that water from the SBW property caused or contributed to the flooding, the intentions and actions of Mr. Sabelli cannot overtake this evidentiary failure.

[381] As well, the improbability or incorrectness of the defendants’ theories of how the flooding occurred do not assist the court. It is not incumbent on the defendants to disprove the allegations made by the plaintiffs.

[382] For these reasons, I have concluded that the plaintiffs have failed to prove these essential facts on a balance of probabilities.

[383] That is, had they succeeded on their claim for rescission, I would not have found that they established their tort claim on a balance of probabilities.

Issue #3 – If Issue #2 is answered affirmatively, what is the quantum of damages suffered by the plaintiffs?

[384] The court has determined that the plaintiffs are not permitted to have their original tort claim set out in CV-10-10442 determined. In the event that legal conclusion is erroneous, I considered the evidence to determine whether the plaintiffs have proven their negligence claim. In that respect, I have concluded that the plaintiffs have failed to establish on a balance of probabilities that the water originated on the SBW property or, by extension that the defendants’ negligence caused in whole, or in part, the March 10, 2009 flooding incident. For these reasons, the issue of quantum of tort damages need not be addressed as the plaintiffs are not entitled to damages relating to the flooding incident.

[385] As I have determined that the plaintiffs have not established on a balance of probabilities that it was water from the SBW property that caused of contributed to the flooding incident, I am not going to analyze the issue of liability arising from the escape of water from property, as addressed in Ostrom v. Sills (1897), 1898 CanLII 4 (SCC), 24 O.A.R. 526 (C.A.), aff’d 28 S.C.R. 485, by the Ontario Court of Appeal at p. 539, as follows:

Generally speaking, the upper proprietor may dispose of the surface water upon his land as he may see fit, but he cannot, by artificial drains or ditches, collect it or the water of stagnant pools or ponds upon his premises and cast it in a body upon the proprietor below him to his injury. He cannot collect and concentrate such waters and pour them through an artificial ditch in unusual quantities upon his adjacent proprietor.

Issue #4 – Are the plaintiffs entitled to any remedy arising out of the breach of the Minutes of Settlement by the defendants?

A. Is the claim statute-barred by operation of the Limitations Act?

[386] The defendants rely on the provisions of the Limitations Act, S.O. 2002, c. 24, Schedule B, and the general two year period in which a party may commence a claim from the day the claim was discovered.

[387] Whether or not a limitation period would apply beyond two years from the March 10, 2009 flooding incident for a tort claim is now moot.

[388] Had that preliminary threshold been met by the plaintiffs, issues may have arisen with respect to the fact that this claim was filed in 2012 – more than two years later.

[389] Highly finessed and capable legal submissions by both parties would have undoubtedly revolved around the filing of CV-11-16273 on May 6, 2011, as that date is also more than two years beyond March 10, 2009. Again, those issues are moot.

[390] However, as a claim by the plaintiffs seeking damages arising out of the repudiation of the Minutes of Settlement dated November 16, 2010, this action is unequivocally not statute-barred for a number of reasons.

[391] Section 5(1) of the Limitations Act is worded as follows:

A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

[392] I make the following findings in respect of that statutory provision.

i) Prima facie two-year limitation period

[393] The Minutes of Settlement were dated November 16, 2010. At a minimum, the prima facie two-year limitation period would have expired on November 15, 2012. This claim was filed on May 4, 2012, well within that two-year period from when the injury, loss or damage occurred (s. 5(1)(a)(i)).

ii) Actual date of loss

[394] The plaintiffs characterized the sale of the SBW property to Kapital on January 25, 2012 as the date of anticipatory breach. That date is also within the two-year limitation period.

iii) Effective limitation date

[395] As a result of my determination that rescission was not available to the plaintiffs, this action evolved, by operation of law, to be a claim to enforce the terms and conditions of the MOS. That agreement required the defendants to complete the berm construction by December 31, 2013. While the plaintiffs may have referred to the sale as an anticipatory breach because the defendants gave up title and control of the SBW property on January 25, 2012, I find the day the injury loss or damage occurred was not until December 31, 2013. That date is after this action was filed.

[396] For all of these reasons, I find that this claim is not statute-barred.

iv) The Minutes of Settlement

[397] It has been determined that the plaintiffs claim for tort damages arising out of the March 10, 2009 flooding incident was consumed in the Minutes of Settlement and rescission is not available to the plaintiffs to seek damages flowing from that incident. However, irrespective of that conclusion, do the plaintiffs have an alternative claim for damages?

[398] I have concluded that the plaintiffs have established a bona fide claim for damages arising from the failure of the defendants to fulfil their obligations pursuant to the Minutes of Settlement. For reasons set out previously, the defendants repudiated the Minutes of Settlement in which they committed to a process for the preparation of a site plan and the construction of a berm at their expense. That defines the scope of the plaintiffs’ claim for breach of the Minutes of Settlement.

[399] As a result, the plaintiffs are entitled to be compensated for any costs they directly incurred regarding the construction of the berm that was eventually built subsequent to the decision of the Tribunal dated February 11, 2016.

[400] It is not clear what the scope of those costs are, if any, as damages issues were deferred.

[401] Such damages are referenced in paragraph 1(f) of the statement of claim in CV-11-16273 where the plaintiff seeks:

1(f) Damages estimated but not limited in the amount of $100,000 for damages sustained by the plaintiff as a result of the unlawful flooding of its lands and/or sustained by reason of the plaintiff’s efforts to ensure that no flooding occurs. [ Emphasis added.]

[402] That claim is re-asserted at paragraph 1(f) of the claim CV-12-17852.

[403] The plaintiffs are entitled to this remedy for the same reason they could not resurrect the tort claim. That is, they contracted away their potential tort claim in consideration for having the defendants construct a berm on certain terms.

[404] The parties also agreed to a method of compliance with respect to that consideration by including an arbitration clause in the MOS to resolve “[a]ny dispute including any request for injunctive relief, between the parties about any aspect of this agreement…”

[405] The defendants did not satisfy that term and condition. They failed to pay for or otherwise deliver on their promise of the construction of a suitable berm.

[406] I have found that obligation was not extinguished on the sale of the SBW property to Kapital.

[407] The plaintiffs are entitled to a declaration that the defendants did not complete their obligations arising from the Minutes of Settlement. The issues remaining are what damages (if any) are they entitled to as a result of this breach?

CONCLUSION

[408] The plaintiffs’ claim for rescission of the Minutes of Settlement dated November 16, 2010 and by extension their claim for tort damages and costs arising from the flooding incident of March 10, 2009 are dismissed.

[409] The plaintiffs’ claim for a declaration that the defendants breached the Minutes of Settlement dated November 16, 2010 by failing to construct the berm is granted.

[410] In the event the parties are unable to agree on the appropriate damages arising from this breach, I will remain seized, as necessary.

[411] I will also remain seized should the parties be unable to resolve the following issues:

i. Costs;

ii. The counterclaim;

iii. Any other outstanding issues.

[412] This decision has been released at a time when court operations have been significantly (and, in many respects, almost completely) disrupted or suspended.

[413] For this reason, I am reluctant to put a firm deadline for the parties to ascertain whether any outstanding issues need to be brought before me.

[414] I would, however, recommend that the trial coordinator schedule a trial management conference following September 30, 2020, in the event the parties do not advise that they have resolved the outstanding issues or have established a mutually agreeable timeline with respect to those efforts.

Original electronically signed - Justice George King

George W. King

Justice

Released: July 3, 2020

COURT FILE NO.: CV-12-17852

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Brunato Farms Ltd. and Tri-B Acres Inc.

Plaintiffs

– and –

Frank Sabelli, Anna Sabelli and

Sabelli Boiler Works Inc.

Defendants

AND BETWEEN:

Frank Sabelli and Sabelli Boiler Works Inc.

Plaintiffs by Counterclaim

– and –

Brunato Farms Ltd. and Chris Del Greco

Defendants by Counterclaim

REASONS FOR JUDGMENT

King J.

Released: July 3, 2020

[^1]: There was also evidence of another flooding incident in June of 2009 but the focus of this matter related to March 10, 2009.

[^2]: Mr. Mickelson and other witnesses also referred to 1:100 as a “once in a hundred year” rainfall.

[^3]: Mr. Crozier passed away on December 11, 2017.

[^4]: Arbitration Act, R.S.O. 1990, c. A.24.