Endorsement Sh d’inscription
National Steel Car Limited v Arcelor Mittal Dofasco, CITATION: 2022 ONSC 6742
COURT FILE NO.: 36015/12
DATE: 2022/10/31
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: National Steel Car Limited
AND: Arcelor Mittal Dofasco Inc, Hamilton Port Authority, City of Hamilton, defendants
BEFORE: Mr Justice Ramsay
COUNSEL: Jerome R. More and David M. Trafford for plaintiffs; Jordan Diacur, Marc Abradijan, Adam Bucci and Nicole Pelaia for defendants
HEARD: October 31, 2022, Hamilton
ENDORSEMENT
[1] The plaintiff manufactures rail cars at its facility at the corner of Kenilworth Avenue North and Burlington Street in Hamilton, down by the harbour. It is suing its neighbour, Arcelor Mittal Dofasco (“Dofasco”), and the City for damages caused by flooding in numerous rain events over the last few years on the basis that the defendants have obstructed a drainage channel that runs north into Lake Ontario along the western boundary of the plaintiff’s property. The plaintiff now moves for a mandatory injunction requiring the defendants to remediate the channel. Some of the channel is on Dofasco’s property. Some is on a road allowance. There is a dispute as to whether the road allowance belongs to the Port Authority.
[2] Photographic and other evidence establishes that over the years Dofasco and the plaintiff filled in the inlet into which the channel drains. Dofasco built roads that cross over the channel and a holding pond at the end. The channel is obstructed by debris deposited by Dofasco and silt from the City’s storm water run-off. The plaintiff has suffered a loss worth about $1.7 million from flooding from 2008 to 2021. Dofasco dredged the channel while the plaintiff was its wholly owned subsidiary but after 1994, when the plaintiff was sold, they stopped dredging.
[3] The plaintiff’s expert deposes that the principal cause of the flooding is blocked culverts on Dofasco’s property at locations 2 and 3 on the map and the holding pond at location 4. They are blocked with debris and silt. In the plaintiff’s expert’s opinion, maintenance is required before remediation can be accomplished. In other words, the channel must be dredged before a permanent solution can be designed.
[4] The plaintiff seeks:
i. An order for a mandatory interlocutory injunction restraining the Defendants, the City of Hamilton and Arcelor Mittal Dofasco, from causing continuing damage to the Plaintiff’s property by
a. flooding;
ii. In addition, or in the alternative, an order for a mandatory interlocutory injunction compelling the Defendants, the City of Hamilton and ArcelorMittal Dofasco, to dredge the Channel (defined below) to its natural depth, clear the culverts and pipes in the Channel and repair and replace the non-functioning culverts and pipes in the Channel on their properties in order to prevent continuing damage to the Plaintiff’s property by flooding.
[5] The plaintiff has made the required undertaking under Rule 40.03.
[6] The City’s expert deposes that the primary cause of the flooding is the largely blocked culvert at the most downstream road crossing the channel on the Dofasco property (location 4 on the map). He notes that remediation could require permits from four governmental agencies. He says:
- In my view, it is more efficient and cost-effective for the parties and the relevant regulatory bodies to complete the hydrologic and hydraulic modelling now, and then prepare and execute one comprehensive engineered design.
[7] Dofasco’s expert engineer says that the main contributor to flooding is the silt from the City’s storm water, but he says that the flooding in 2017 and 2019 were caused by the water level of the lake and would have occurred regardless of the condition of the channel. Dofasco has filed the affidavit of a law clerk who deposes that she has been informed that Dofasco disputes the claim and that the plaintiff owes $6.8 million in back taxes to the municipality.
[8] The City’s manager of water distribution and Dofasco’s engineer agreed on cross-examination with the Applicant’s expert that one cannot precisely determine the geometry and capacity of the channel until it is dredged.
[9] The “natural depth” of the channel cannot be defined on the evidence before me.
[10] The plaintiff seeks an interlocutory injunction on two bases – one based in statute, and one based in equity.
The test for issuing an interlocutory injunction
[11] The Municipal Act provides:
440 If any by-law of a municipality or by-law of a local board of a municipality under this or any other Act is contravened, in addition to any other remedy and to any penalty imposed by the by-law, the contravention may be restrained by application at the instance of a taxpayer or the municipality or local board.
[12] Hamilton by-law number 06-026 provides:
- (1) No person shall obstruct, allow the obstruction of or maintain any obstruction in any open or closed drainage facility or natural watercourse.
[13] The test for issuing an injunction under s.440 of the Municipal Act is:
(1) The applicant must establish that it is a taxpayer in the municipality;
(2) The applicant must establish a clear breach of the by-law;
(3) The burden then shifts to the respondent, to establish that there are "exceptional circumstances" such that the injunction should not issue;
(4) The court may issue the statutory injunction or exercise its residual discretion to decline to issue the injunction: Allied Properties REIT v 1064249 Ontario Inc, 2016 ONSC 6665 at para 7, affirmed 2017 ONCA 419.
[14] In my view, the case law speaks to the test for a permanent injunction. To obtain an injunction before trial, the balancing of interests accomplished by application of the RJR – MacDonald test[^1] or the R. v. CBC test,[^2] as the case may be, are necessary to the due administration of justice, even in the case of the statutory injunction. Accordingly, where, as here, a mandatory interlocutory injunction is sought, the CBC test should be applied.
[15] The “residual discretion” to refuse to issue an injunction must be related to equitable considerations or the public interest.
[16] With respect to the non-statutory mandatory injunction, the CBC test requires a strong prima facie case, irreparable harm and the balance of convenience. Again, equitable considerations apply. The applicant must come to court with clean hands. I do not think that the plaintiff’s tax dispute with the City amounts to unclean hands. It has nothing to do with the alleged torts and even less to do with Dofasco.
[17] It is argued that the plaintiff need not necessarily establish irreparable harm or the balance of convenience, since we are talking about property rights: Gobalian v. Poxon, 2020 ONSC 6750. I think, however, that the case law cited by the plaintiff is principally aimed at cases in which the municipality seeks to enforce property rights or cases of trespass in which the property owners are denied access, or exclusive access, to their property.
Analysis
[18] In my view the plaintiff has established a strong prima facie case of nuisance and breach of the by-law by Dofasco. Whoever owns the channel, Dofasco obstructed it. However, I decline to issue the requested injunction for the following reasons:
The balance of convenience does not favour issuing the injunction. The relief requested involves a massive and legally complicated project that cannot be undertaken in the next five months and for which the responsibility has not been established as among the defendants. I cannot very well order the channel to be dredged to its natural depth when that depth is undefined. Indeed, much of what is asked is undefined. What is a reasonable time? What permits must be got? Who must get them? And so on. The City’s proposal (complete the hydrologic and hydraulic modelling now, and then prepare and execute one comprehensive engineered design) makes sense, especially when unbudgeted public money is at stake.
The fact that the plaintiff has waited ten years into the action and five months before the trial to seek interlocutory relief casts doubt on the prospect of irreparable harm.
[^1]: 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311. [^2]: 2018 SCC 5.
Conclusion
The motion is dismissed. Costs of this motion are reserved to the trial judge.
J.A. Ramsay J.
Date: 20221031