Short and No. 2A Drain, 2006 - Costs of Motion Decision

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In the matter of the Drainage Act R.S.0. 1990, Chapter D.17, as amended.

And in the matter of: An appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Alan Webster, Thornhill, Ontario under Subsection 48(1) of the Drainage Act from the engineer's report on the Short and No. 2A Drain, 2006 in the City of Kawartha Lakes.

And in the matter of: A Pre-hearing Conference pursuant to Rule 24 of the Tribunal's Rules of Procedure;

And in the matter of: A motion by the City of Kawartha Lakes heard November 15th, 2011, pursuant to Rule 25 of the Tribunal's Rules of Procedure for the dismissal of the Section 48(1) appeal of Alan Webster before the Tribunal without a hearing.

And in the matter of: Written submissions with respect to costs pursuant to the Tribunal motion decision of November 28th, 2011.

Before: John O'Kane, Vice Chair

Appearances:
Valerie M'Garry, counsel for City of Kawartha Lakes
Alan Webster, appellant

Overview

On November 28th, 2011, I released reasons for decision dismissing a motion by the City of Kawartha Lakes and directing that the parties deliver written costs submissions.

I am obliged to the appellant and counsel for the respondent City for their written submissions on costs of the motion.

As I will develop in these reasons, this is a case where an award of costs against the appellant Alan Webster is appropriate.

Costs of Jurisdiction

Under sections 98(10) and (11) of the Drainage Act, the Tribunal has wide discretionary power to award costs, as the Tribunal considers proper.

(10) The costs of any proceedings before the Tribunal shall be paid by or apportioned between the parties in such manner as the Tribunal considers proper, and where costs are ordered to be paid, the order for payment thereof may be filed in the Small Claims Court and is enforceable as a judgment or order of that court.

(11) The costs chargeable or to be awarded in any proceedings may include the costs of witnesses and of procuring their attendance, the costs of secretarial staff and such other costs as the Tribunal may direct.

In addition to that Drainage Act jurisdiction over costs, section 17.1 of the Statutory Powers Procedure Act (SPPA), grants the Tribunal power to award costs where a party's conduct has been unreasonable, frivolous, vexatious or in bad faith.

17.1 (1) Subject to subsection (2), a tribunal may, in the circumstances set out in rules made under subsection (4), order a party to pay all or part of another party's costs in a proceeding.

(2) A tribunal shall not make an order to pay costs under this section unless,

1. the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious or a party has acted in bad faith; and
2. the tribunal has made rules under subsection (4).

(3) The amount of the costs ordered under this section shall be determined in accordance with the rules made under subsection (4).

(4) A tribunal may make rules with respect to,

1. the ordering of costs;
2. the circumstances in which costs may be ordered; and
3. the amount of costs or the manner in which the amount of costs is to be determined.
   

Pursuant to section 17.1 (4) and section 25.1 of the SPPA, the Tribunal has made rules with respect to awarding costs and Rule 28 of the Tribunal's Rules of Procedure provides the procedural framework for the Tribunal in respect of conduct related cost awards made under the SPPA.
28.01 Where a party believes that another party has acted clearly unreasonably, frivolously, vexatiously or in bad faith considering all of the circumstances, it may ask for an award of costs.
28.02 The Tribunal may make a costs award for conduct at any time during a proceeding.
28.03 The Tribunal may deny or grant the request or award a different amount.
28.04 Clearly unreasonable, frivolous, vexatious or bad faith conduct can include, but is not limited, to:

1. Failing to attend a hearing event or to sending a representative when properly given notice, without contacting the Tribunal;
2. Failing to give notice or adequate explanation or lack of co-operation during pre-hearing proceedings, changing a position without notice, or introducing an issue or evidence not previously mentioned;
3. Failing to act in a timely manner or to comply with a procedural order or direction of the Tribunal where the result was undue prejudice or delay;
4. Conduct necessitating unnecessary adjournments or delays or failing to prepare adequately for hearing events;
5. Failing to present evidence, continuing to deal with issues, asking questions or taking steps that the Tribunal has determined to be improper;
6. Failing to make reasonable efforts to combine submissions with parties of similar interest;
7. Acting disrespectfully or maligning the character of another party; and
8. Knowingly presenting false or misleading evidence.The Tribunal will consider the seriousness of the misconduct. If a party requesting costs has also conducted itself in an unreasonable manner, the Tribunal may decide to reduce the amount awarded.

The Context of the Motion

The City of Kawartha Lakes brought a motion to dismiss Alan Webster's appeal when he failed to abide by the procedural directions that were part of an Order that I had made in reasons for decision released on September 1st, 2011.

Those procedural directions were given in the context of an agricultural drainage project that has been under appeal since 2006. The drainage project is the culmination of the recommendations contained in an Engineer's Report dated March 2006. That project involves the drainage of about 21,000 acres of land and approximately 400 landowners. As noted in my September 1st, 2011 reasons, there have been a total of 72 appeals to either the Drainage Referee or this Tribunal, two petitions to abandon the drain and one claim for damages, all under the Drainage Act. The only remaining outstanding proceeding is Alan Webster's appeal to this Tribunal under section 48 of the Drainage Act. Therefore, while there only remains one outstanding appeal, what ultimately happens with the drainage work proposed in the Engineer's Report of March 2006, affects those 21,000 acres of land and those 400 landowners.

As noted in my reasons of September 1st, 2011, I exercised my discretion to intervene with the procedural directions to case manage the remaining appeal through to an expeditious resolution. That expeditious resolution was not just to benefit Alan Webster or the City of Kawartha Lakes. That expeditious resolution was for the benefit of the 21,000 acres and 400 landowners potentially affected by the drainage project.
Additional context for my procedural directions included the more than five years that had passed since delivery of the Engineer's Report and Alan Webster having had more than five years to crystallize and refine his section 48 appeal issues, marshal his evidence and define his appeal strategy, and finally, Alan Webster being self-represented.

Within this contextual framework, I crafted simple and clear procedural directions to get the appeal to a hearing on its merits, as quickly as possible.

The procedural directions that I ordered, pursuant to Rule 19.01, Rule 20.01 and Rule 21.01, required that Alan Webster deliver to the Clerk of the City of Kawartha Lakes, by September 21st, 2011, full particulars of his appeal, including details, information and documents, experts' reports, witness lists and witness statements.

Alan Webster failed to comply with the Procedural Order

As noted in my November 28th, 2011 reasons, Alan Webster received the September 1st Order with the procedural directions on September 1st, 2011.

Alan Webster's compliance with those procedural directions came twenty-two days after the September 21st date for compliance.

When the City of Kawartha Lakes did not receive Alan Webster's appeal particulars by September 21st as directed, the City took the natural next step of bringing a motion to dismiss Alan Webster's appeal.

Alan Webster filed no evidence on the dismissal motion.

Alan Webster filed no evidence to explain his failure to comply with the procedural directions of the September 1st Order.

I find that Alan Webster's failure to abide by the simple and clear procedural directions to be unreasonable.

During the motion, Alan Webster offered submissions about his failure to comply with the procedural directions. He explained how, on reading the Order, he concluded that he had until the end of September to file his particulars. However, his particulars were not even postmarked until October 5th, 2011, well beyond the end of September. In addition, as previously noted in my November 28th reasons, Alan Webster is an educated, sophisticated and articulate litigant. Therefore, I am unable to suspend disbelief sufficient to accept the explanation Alan Webster offered about why he failed to comply with the procedural order. I find that Alan Webster's explanation about his failure to comply with the simple and clear procedural directions to be unreasonable.

Why Alan Webster is ordered to pay costs

In this case, the Tribunal gave simple and clear procedural directions to assist all the affected landowners on the drain, including Alan Webster, to get to a hearing on the merits of Alan Webster's appeal issues, as quickly and efficiently as possible. The Tribunal issued its procedural directions expecting the parties would comply, and in the event of non-compliance, would have a reasonable explanation. In this case, Alan Webster neither complied nor provided any reasonable explanation.

The Tribunal does not condone non-compliance with its procedural directions. If it did, its procedural directions and its orders would become meaningless. Such a result would jeopardize the effectiveness of the Drainage Act appeal processes designed by the legislature and lead to more protracted proceedings and more costs and expenses for all parties.

When Alan Webster failed to comply with the procedural directions, that failure caused the City of Kawartha Lakes to bring its dismissal motion. As was clear from the evidence filed by the City on the motion and then reinforced in its cost submissions, had Alan Webster complied with the procedural directions, the City would not have brought its dismissal motion. Therefore, the costs and expenses of both the City and Alan Webster for that motion were unnecessary. Alan Webster, as the author of those unnecessary costs, bears responsibility for his own costs and expenses.
Under the Drainage Act, the "default" treatment of costs is set out in section 73.

73. (1) Except where otherwise provided in this Act or by a decision on an appeal, the cost of any application, reference or appeal and the cost of temporary financing for the construction, improvement, repair and maintenance of a drainage works, shall form part of the cost of the drainage works.

The practical application of that section means that the costs incurred by the City of Kawartha Lakes to bring the dismissal motion would be deemed part of the drainage works. The Drainage Act scheme of distribution of the cost of the drainage works is that it is apportioned among all the assessed landowners on the drain. However, in my view, given that the City of Kawartha Lakes' costs for the dismissal motion arose due to Alan Webster's failure to comply with the procedural directions of this Tribunal, it would be unreasonable and unfair to saddle all the landowners on the drain with these unnecessary costs.

Therefore, in the circumstances, I consider that it is proper to exercise the discretion granted by section 98(10) of the Drainage Act to award the costs of the November 15th motion against Alan Webster, since he was the cause of the City incurring those unnecessary costs.

• While Alan Webster's failure to comply with the procedural directions alone is sufficient to merit a cost award under the Drainage Act, there are several other factors that I considered to support a cost award.
  During Alan Webster's submissions on the motion, he revealed that he has a long history of other issues with the City of Kawartha Lakes, or its predecessor, that are unrelated to the issues in this Drainage Act appeal. He alluded to his appeal as a means of obliging the City of Kawartha Lakes to negotiate with him. In his written submissions on costs, he returned to that notion with his expressed hope that the City would begin a "fruitful and helpful negotiation" to end the appeal process "with a minimum of additional costs." Those comments in Alan Webster's motion submissions and costs submissions reveal that Alan Webster's strategy, at least in part, is to use the statutory appeal process as a lever against the municipality to compel a negotiation. I liken such a strategy to the last holdout landowner confronted by a development land assembly. The last holdout landowner holds the key to the lucrative development and, therefore, can command a premium from the developer in the negotiation for its land. While such a strategy may make perfect sense in the context of a land development assembly, it is misplaced in the context of proceedings under the Drainage Act. Using such a strategy in the context of a Drainage Act proceeding carries with it the risk of being ordered to pay the costs of another party, when it results in prolonged proceedings or wasteful proceedings, as happened in these circumstances.
• Alan Webster attempted to send his appeal particulars by facsimile transmission, not to the Clerk as directed, but to the Tribunal office on September 29th. That attempt, apart from being an incomplete transmission, was still not in compliance with the procedural directions in respect of its timeliness and the intended recipient. However, when the Tribunal staff telephoned Alan Webster that same day and left him a message, he failed to respond to the Tribunal staff. That incident illustrates that Alan Webster displays a cavalier attitude about the appeal process and the Tribunal's procedural directions.
• During submissions on November 15th, Alan Webster explained that he had not been involved in the appeal process earlier because he had left it in the hands of "others who were more vocal and more concerned". In my view, no one should be more concerned about the Alan Webster appeal issues than Alan Webster, and the explanation he gave reinforced and further displayed his cavalier attitude about the Drainage Act appeal process.
• During the motion submissions on November 15th, Alan Webster explained his absence from an earlier hearing on August 23rd, 2011. He explained that he is a Chartered Accountant and the Vice-President of Finance for his company. The day before the August 23rd hearing his boss advised him of a meeting on August 23rd with two Vice-Presidents of the Bank of Nova Scotia that he had to attend. However, in an August 24th, 2011 correspondence to the Tribunal, Alan Webster wrote: "I am a Chartered Accountant and planned to attend but got scheduled into a meeting with my boss and 3 officers of the Canadian Imperial Bank of Commerce yesterday (one of whom, . . ., is a vice-president of the bank) …". It is difficult to reconcile Alan Webster's different explanations about the same event. While the differences may not be particularly material to the issues on the appeal, or even particularly material to the issues on the dismissal motion, they display, at a minimum, a lack of care about Alan Webster's treatment of the facts. That lack of care further displays a cavalier attitude about the Drainage Act appeal process and the role of the Tribunal.

In addition, I find Alan Webster's conduct in failing to comply with the procedural directions to be clearly unreasonable and, therefore, pursuant to section 17.1 of the SPPA, worthy of an order to pay the costs of the City of Kawartha Lakes.

Rule 28.01 of the Tribunal's Rules of Procedure provides that a party can seek costs from another, where the party has acted "clearly unreasonably". In these circumstances, relying on this Rule, the City of Kawartha Lakes seeks costs from Alan Webster.

In my view, it was clearly unreasonable for Alan Webster to fail to comply with the procedural directions set out in my September 1st Order. As noted above, that failure resulted in the unnecessary costs of the dismissal motion. Because those costs were unnecessary, I find that they resulted in undue prejudice to the City of Kawartha Lakes.

Costs for the November 15th Motion

In the written costs submissions filed, both parties seek costs of the motion from the other.

While Alan Webster's submission did not include a dollar amount, his submission did confirm that the total time he expended was approximately 12 hours.

The City of Kawartha Lakes seeks recovery for the dismissal motion including time of 21.5 hours at a rate of $225.00 per hour, which is 68% of counsel's actual hourly rate of $325.00. The City also seeks recovery of a counsel fee for preparing the costs submissions of $1,800.00. At $225.00 an hour, that $1,800.00 counsel fee reflects further time of 8 hours.

Counsel for the City has more than thirty years experience and is a certified specialist in Municipal Law. Therefore, the $225.00 hourly rate is both reasonable and warranted for a professional of that tenure and experience.

The 21.5 hours associated for the dismissal motion is also reasonable in the circumstances given that the time expended involved assembly of a Motion Record that included two affidavits and multiple exhibits, preparation for the motion and participation in the November 15th hearing. Those 21.5 hours compare favourably with the 12 hours submitted by Alan Webster, since he did not submit a Motion Record or evidence for the hearing. Therefore, I find that the 21.5 hours expended by counsel for the City is both reasonable and appropriate, in the context of the dismissal motion. However, I find that the 8 hours to prepare the three written pages of costs submissions to be excessive. In the circumstances, half that time, or 4 hours, is appropriate and reasonable, in these circumstances.

The City of Kawartha Lakes also seeks recovery of $528.00 for disbursements expended to bring the dismissal motion. The City has filed a breakdown of those disbursements, which include photocopies, mileage for service on Alan Webster, and courier charges. All those disbursements are supported and reasonable and appropriate in these circumstances.

Therefore, Alan Webster will pay the costs of the City of Kawartha Lakes as follows:

Fees	$ 5,737.50
Disbursements	$ 528.61
HST	$ 814.59
Total	$ 7,080.70

The City of Kawartha Lakes' submission also asked that any cost award be credited to the drain account and that the costs awarded be added to the tax roll and have priority lien status under section 61 of the Drainage Act and section 1 of the Municipal Act.

In the circumstances, I agree that it is appropriate that this cost award be treated in this fashion so that the drain project and the approximately 400 landowners on the drain are spared any further unnecessary expenses associated with collecting the cost award.

Order of the Tribunal

Therefore, the Tribunals orders that:

1. The City is entitled to its costs of the motion, to be paid by Alan Webster as follows:
   
   1. Alan Webster will pay costs of the motion in the amount of $7,080.70;
   2. The costs are to be credited to the drain account;
   3. Pursuant to section 61 of the Drainage Act, the cost award against Alan Webster shall have priority lien status, in accordance with section 1 of the Municipal Act;
   4. The City of Kawartha Lakes is at liberty to enter the costs awarded on the tax roll immediately against any land that Alan Webster owns, that is assessed under the drain.

Dated at Brampton, Ontario this 14th day of December, 2011.