Drain Story (2011)

Si vous désirez obtenir une traduction de cette décision ou ordonnance, veuillez communiquer avec le bureau du Tribunal (voir ci-dessous).

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

And in the matter of: Appeals to the Agriculture, Food and Rural Affairs Appeal Tribunal by Kenneth & Lynda Anderson of Blenheim; James & Ruth Anne Clark of Blenheim; Ross & Joyce Brush, Blenheim; Jim Knowles, Blenheim; 657722 Ontario Inc. (John McGuigan) of Cedar Springs; Ronald & Josephine Sullivan, Blenheim; Ronald Patrick Sullivan & Clara Sullivan Life Interest, Blenheim; David & Kathy Townsend, Blenheim; 1613339 Ontario Inc. (Chris Stewart) under Subsection 48(1) and 54(1) of the Drainage Act from the engineer's report and from a decision of the Court of Revision on the Story Drain in the Municipality of Chatham-Kent.

Before:
Susan Whelan, Vice Chair (Chair of Panel); Kirk Walstedt, Chair;
Jack Young, Vice Chair;

Appearances:

Kenneth Anderson, appellant
John Kuntze, P.Eng., expert witness for the appellant, Mr. Anderson
Dennis H. Asher, counsel for Kenneth and Lynda Anderson
Ross Brush, appellant
George Girty, witness for the appellant upstream agricultural landowners
James P. Bourne, witness for the appellant upstream agricultural landowners
657722 Ontario Inc. (John McGuigan) of Cedar Springs, appellant and representative of upstream agricultural owners
Raymond Dobbin, P.Eng., expert witness for the appellant upstream agricultural landowners
Janet McGuigan Kelly, counsel for the upstream agricultural appellants
Mr. Ed Dries, P. Eng., Engineer who prepared the Report and expert witness for the Municipality of Chatham-Kent
Mr. Paul Courey, counsel for the Municipality of Chatham-Kent

Decision of the Tribunal

This hearing was held in the Council Chambers, Municipality of Chatham-Kent (the Municipality"), in Chatham, Ontario on April 11, 12 and 13, 2011. Kenneth and Lynda Anderson; James and Ruth Anne Clark; Ross and Joyce Brush; Jim Knowles; 657722 Ontario Inc. (John McGuigan); Ronald and Josephine Sullivan; Ronald Patrick Sullivan and Clara Sullivan Life Interest; David and Kathy Townsend; 1613339 Ontario Inc. (Chris Stewart) appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal (the "Tribunal') under Section 48(1) and 54(1) of the Drainage Act (the "Act") from the Engineer's Report and from the decision of the Court of Revision dated June 22, 2010 on the Story Drain.

The Engineer's Report titled "Story Drain" (the Report), dated April 1, 2010, was prepared by Dillon Consulting Limited (the "Engineer"). Mr. E.P. Dries, a professional engineer with that firm, was designated under section 8(2) of the Act for overall responsibility for the Report.

Elinor Mifflin, Clerk of the Municipality, performed the duties of the Clerk of the Tribunal.

Prior to the beginning of the Hearing, the Tribunal issued an order making all landowners assessed or compensated in the Report parties to the hearing. The Clerk of the Municipality filed an Affidavit of Service with the Tribunal as proof that all parties had been served.

Preliminary Issue

Motion materials were filed by Mr. Asher approximately one week in advance of the Hearing.

The Motion requested an Order from the Tribunal that the April 1, 2010 Engineer's Report had no status and the Tribunal lacked jurisdiction to make a determination on the issues raised in the appeals of the Municipality of Chatham-Kent Drainage Board (the Drainage Board) decisions of May 11, 2010 and May 22, 2010 in the absence of a report prepared in accordance with the legislation. The basis of Mr. Asher's argument was that the Report was not prepared in accordance with the requirements of section 78 of the Act as stated by the Municipality.

Mr. Courey objected to the Notice of Motion. He argued it was not a proper Motion as the factum contained no evidence, there was no affidavit evidence, it was made late and it was returnable at the Hearing. He concluded by stating the Motion clearly contained a new ground of appeal that could have been dealt with long ago as the Hearing had been delayed at the request of Mr. Asher's clients.

Findings on the Motion

The Tribunal noted that the Hearing was postponed in December 2010 at Mr. Asher's request in order to permit his clients more time to prepare their case.

The four month time frame would have given Mr. Asher more than adequate time to properly prepare and bring the Motion forward pursuant to Rule 25 of the Tribunal's Rules of Procedure. This would have allowed affidavits to have been filed by all parties.

Although the Tribunal's Rules of Procedure allow for a Motion to be brought forward at a Hearing, the Tribunal did not hear the Appellant's Motion prior to the start of the Hearing. Instead, arguments pertaining to the grounds for the Motion were heard through the course of the hearing. During those discussions, Mr. Courey objected to Mr. Asher's line of questioning that the 2010 Report was not a valid report. The Tribunal heard arguments from all parties during which Mr. Courey raised the issue that the Tribunal did not have jurisdiction under section 47 of the Act to deal with the validity of the Report. Mr. Asher argued that the Tribunal had jurisdiction under section 51, and also referred to the Tribunal's recent decision of Baer to support his position.

The Tribunal Panel ruled that the Drainage Act is quite clear and consistent. That section 47 (1) of the Act provides the right to appeal to the referee if any owner of land is dissatisfied with the report of the engineer on the grounds that it does not comply with the requirements of the Act, and that an appeal of the report on the grounds of non-compliance should have been made to the referee within 40 days.

The Tribunal Panel also ruled that Section 51(1) does not give the Tribunal the power to take the place of the referee in this determination of non-compliance. It is clearly stated in section 51 that the Tribunal's powers are "where not so provided" and the powers to determine non-compliance were clearly provided in section 47 to the referee.

With respect to the Baer decision, the Panel advised that Tribunal decisions are not normally precedent setting; and, in addition, the Panel distinguished Baer from the case before them. The finding by the Tribunal in Baer was that the Tribunal did not have an engineer's report before them because it was an incomplete document; that is not the case before this Tribunal Panel.

The Tribunal Panel continued the hearing on the finding of fact that the 2010 Report was a valid report.

The Report Background

The Story Drain, which has been a project under the Drainage Act for approximately 100 years, drains an agricultural watershed of approximately 320 hectares in the geographic Township of Harwich and outlets into a watercourse at the north limit of the former Community of Erie Beach. From this point, the water flows through the residential lots on the north and south sides of Towanda Blvd. and then flows into Lake Erie.

The purpose of this drainage project is to incorporate and improve the section of the watercourse through the residential properties to provide a legal outlet for the Story Drain into Lake Erie.
In the mid 1980s, the portion of the open channel from the north residential limit to the north limit of Towanda Blvd. was enclosed with an 1800 mm diameter corrugated steel pipe. In 1994, the remainder of the open channel from Towanda Blvd to Lake Erie was enclosed with a 2000 mm corrugated steel pipe and a sheet pile outlet structure was constructed at Lake Erie. All of this work was under the direction of and funded by the Lower Thames Valley Conservation Authority (LTVCA).

In 2005, an engineering report was prepared under Section 4 of the Act that recommended improvement to the outlet structure and the incorporation of the enclosed portion into the Story Drain. This report was never adopted by the Municipality.
Over the years, typical improvements have been made on the residential properties with regard to the alignment of the drain enclosure including lawns and gardens and a garage that is constructed partially over the drain enclosure.

The bottom of the corrugated steel pipe drain enclosure north of Towanda Blvd. that was installed in the mid 1980's, is severely corroded with extensive perforation and is considered as failed and has resulted in loss of backfill at specific locations over the pipe. The drain enclosure south of Towanda Blvd. appears structurally sound and has an anticipated additional design life of approximately 15 years.

The Municipality proceeded under section 78 of the Act and the 2010 Report was prepared accordingly

The Issues

• .The issues before the Tribunal are as follows:
  Should the engineering costs for the Story Drain 2005 report be included in the 2010 Story Drain 2010 Report?
• Should the allowances for the right of way under section 29 of the Act be increased?
• Should an allowance for the existing pipe drain be included under Section 31 of the Act?
• Should an alternate location for the Story Drain outlet through the Erie Beach properties be investigated?
• Should Assessment Schedules A-1 and A-2 be amended?
• Should the assessment schedules for maintenance be amended?
• Should item 2 of Engineer's "Estimate of Cost" be corrected to reflect the correct cost of the 48 m corrugated steel pipe?
• Should the Court of Revision decision with respect to Roll # 10-610 (657722 Ontario Inc.) be allowed to stand?
• Should the appellants' legal and engineering costs form part of the cost of this project?

Engineer's Outline and Assessment Rationale

Mr. Dries gave a brief outline of the project and his rationale in assessing the cost of the project. He stated that a section of enclosed drain north of Towanda Blvd. had failed and that the main objectives of the Report were to replace that section of the drain, and to incorporate the pipe section of drain in the Community of Erie Beach into the Story Drain thereby providing for future maintenance of this closed portion of the Story Drain.

He stated that allowances for right of way were provided in accordance with section 29 of the Act to owners of the private lands through which the enclosed drain must pass, and that this allowance was based on a land value of $10,000 per acre. The Report also provided an allowance in accordance with section 30 of the Act for damage to adjoining property during construction.

He stated that the project was divided into two parts for the purpose of determining the assessment distribution. Part 1 incorporates the entire length of the existing private drain and provides a mechanism for future maintenance and repair of that private drain. Part 2 provides for the reconstruction of the portion of the private drain north of Towanda Blvd. Part 1 has a cost estimate of $19,640 and Part 2 has a cost estimate of $32,660 for a total project cost estimate of $52,300. The Engineer assigned approximately 75% of the engineering and contingency costs of the entire works against Part 1, as this value includes earlier costs related to the previous 2005 report that was never adopted.

With respect to assessments, the Engineer explained the division of costs for each of the two Parts. For Part 1, the drain incorporation, the Benefit/Outlet Ratio (B/O Ratio) was approximately 36/64. (Benefit $7,000 + Outlet $12,640 = $19,640). The benefit assessment was allocated to the properties adjacent to the drain in the Community of Erie Beach and the outlet assessment distributed to all of the lands contributing water to the project. For Part 2, the reconstruction of the drain enclosure north of Towanda Blvd., the B/O Ratio was 50/50 (Benefit $16,330 + Outlet $16,330 = $32,660). The Benefit was distributed with $8,000 assigned to each of the Washburn/Weedon and Solomon properties and $330 to Towanda Blvd. The $16,330 outlet assessment was assessed to the agricultural landowners to the north.

In response to a question by Mr. Asher with respect to the costs of the 2005 report, the Engineer responded that the engineering work was continuous and that, in his opinion, there was no actual cutoff date between the 2005 and 2010 reports.

The Evidence

Kenneth Anderson (Roll # 1-038) (Pts lots 50, 126 & 124)

Mr. Asher called Kenneth Anderson to give evidence.
Mr. Anderson testified that they purchased their property in 1995 and at the time of purchase, the drain enclosure was in the ground and covered, however, the contractor's excavator was still on site. His main concerns were the inadequate allowance for land (section 29 of the Act) and that an allowance was not made for the value of the existing drain enclosure (section 31 of the Act) which is being incorporated into the Report.

With respect to the section 29 allowance (land), he believes that the agricultural land north of Erie Beach is worth $10,000 per acre, however, residential property in Erie Beach is worth $139,000 to $169,000. He testified that his property, which has a frontage of 100 feet on Towanda Blvd. and 50 feet at the beach, was appraised in 2010 at $150,000. Mr. Anderson feels that the section 29 allowance is not sufficient because the Engineer used a land value that was too low.
Mr. Anderson believes that the Engineer should have provided a section 31 allowance for the existing drain when preparing his Report. He testified that the purchase price of his property included the $26,000 cost to the property for the drain enclosure.
On cross examination by Mr. Courey, Mr. Anderson denied having any knowledge that the $26,000 installation price was actually reduced by a grant from the LTVCA. Mr. Anderson accepts the Engineers statement in the Report that the drain enclosure on his property has an additional 15 year life. He stated that he should be compensated accordingly.
Mr. Anderson acknowledged that he did get a building permit for construction of his garage and under cross-examination he admitted that he was probably aware that the garage may have been constructed over part of the drain. He also testified that if the pipe were to fail, he would not be responsible for the drain and acknowledged that although he has said in the past that he would fill it in, he is not sure that he would.

Ross Brush (Roll # 10-502 and others)

Ms. McGuigan Kelly called Ross Brush as her first witness on behalf of the upstream agricultural appellants.
Mr. Brush owns agricultural property immediately north of the Erie Beach subdivision and immediately west of the Story Drain. The water from that property drains into the Erie Beach Drain along the north limit of the subdivision which outlets into the Story Drain. Mr. Brush is a longtime resident of the area and farms approximately 600 acres in the area. Mr. Brush testified that since 1987 there has been flooding in the Erie Beach area and that in early February of this year water flowed continuously for 36 to 48 hours over Towanda Blvd. Mr. Brush stated that, in his opinion, the proposed alternate outlet location "would be a big zero" and that there is no chance of putting all of the water through that proposed watercourse. Mr. Brush objected to the 75% outlet allocation for the agricultural land assessments.
Under cross examination by Mr. Courey Mr. Brush admitted that he was aware that if the water leaves his land and erodes a neighbour's property he is responsible. He maintained that there was significant erosion in the past but the culvert that was installed is too small.

George Girty (Pt. Lot 6 W.C.R.)

Ms. McGuigan Kelly called George Girty as a witness on behalf of the upstream agricultural appellants.
Mr. Girty is also a longtime resident of the area and has been an unpaid superintendent of the pump station located at the outlet of the Beaver Creek Drain at Bisnett Road since the early 1960s. Mr. Girty testified that the alternate drain outlet as proposed by Mr. Kuntze "can not work". He stated that the water level of Lake Erie can vary as much as three feet and that winds from the south require flood gates at the pump station to control the back flow of water. Mr. Girty believes that the proposed alternative would require an expensive pump station and raising the elevation of the road at the proposed outlet.

James P. Bourne (lots 95 & 95 - north side of Towanda Blvd.)

Ms. McGuigan Kelly called James Bourne as a witness on behalf of the upstream agricultural appellants.

Mr. Bourne owns property on the north side of Towanda Blvd. just east of the watershed for the Story Drain. He has lived in Erie Beach his entire life, was a municipal councillor for a number of years and was Reeve of the village until the amalgamation with Chatham-Kent.
Mr. Bourne stated that he was very familiar with the history of the Story Drain. As a kid in the mid-1960s he used to jump it and by the early 1980s it had grown in width of 25 to 30 feet across at some points.

He testified that the drain enclosure through the Erie Beach subdivision was constructed north of Towanda Blvd. in 1987 and south of Towanda Blvd. in 1994. In 1987 the (LTVCA) provided a grant for the construction of the portion north of Towanda Blvd. and the Municipality of Erie Beach acted as the contractor. In 1994, while he was Reeve of the Village of Erie Beach, further work was needed south of Towanda Blvd. because what is now the Anderson house was in jeopardy and in danger of falling into the creek. A similar arrangement was made with the LTVCA for construction of the lower section of the drain enclosure. Mr. Bourne testified that the letter from the LTVCA dated October 17, 1994 outlining the cost to the abutting land owners and the LTVCA grants were correct according to his recollection.

Mr. Bourne also recalled that Mr. Anderson had appeared before the municipal council with respect to the construction of his garage and that the Village of Erie Beach granted approval on the condition that if anything were to happen to the garage later, it would be Mr. Anderson's responsibility. A further requirement was that the garage be built on a concrete pad and that there was no footing below the surface.

John McGuigan (Roll # 10-610) (Pt. lot 8 Con WCR)

Ms. McGuigan Kelly called John McGuigan as a witness on behalf of the upstream agricultural appellants.

Mr. McGuigan operates 657722 Ontario Inc., a company that owns property in the extreme north of the watershed. He testified that he was the spokesman for the agricultural appellants and provided a document of authorization.

Mr. McGuigan stated that the upstream agricultural landowners are objecting to the project because they had a sufficient outlet through the natural watercourse which was filled in by the enclosed culvert and now they are being told that it is no longer a natural waterway. He testified that they now have to pay for it and do not think that they should pay anything.

He also stated that since the enclosed culvert was installed, that they have derived no significant benefit, and, in fact, there has been increased flooding. He testified that the upstream landowners feel that they have been dealt with unfairly in this endeavor.

He also testified that at the Court of Revision, his outlet assessment was reduced because of the acreage of gravel extraction that was removed from the assessment area. He clarified that the gravel lease agreement for gravel extraction covers approximately 35 acres and that he believes that approximately 15 acres have been extracted at this point in time.

Raymond Dobbin, P.Eng.

Ms. McGuigan Kelly called Ray Dobbin as a witness.
Mr. Raymond Dobbin, the principal of R. Dobbin Engineering Inc. from Petrolia, presented evidence on behalf of the agricultural appellants. Mr. Dobbin was accepted as an expert witness by all parties and the Tribunal.

Mr. Dobbin first testified with regards to the 2005 engineering report costs that were included in the 2010 Report. He agreed with Mr. Kuntze's analysis that the cost of the failed petition should be distributed under section 10(4) if the report is not adopted by Council. It was his opinion that those costs should not be assessed under section 78 in the 2010 Report. Mr. Dobbin reviewed the assessments in the Report first for Part 1 followed by Part 2.

Part 1 is the incorporation of the drain enclosure into the Story Drain. The total cost of this part is $19,200 with $7000 to be assessed as benefit and $12,640 being assessed as outlet. This results in a Benefit/Outlet Ratio of 36/64 with 59.2% of the cost being assessed as outlet to the owners upstream of the Erie Beach subdivision. With respect to maintenance of Part 1 of the project downstream of Towanda Blvd., the Report specifies 50% of the cost to be assessed to the landowners where the work is done and 50% to the upstream owners, proportioned in accordance with Schedule A-1 which includes only the owners north of the Erie Beach subdivision. Mr. Dobbin testified that agricultural land should be assessed only for drain improvements necessary for the outlet of agricultural runoff. He testified that there is no set rule regarding the percentage of benefit, however, if this was an access culvert the B/O Ratio was generally 50/50. He considers this project as a drainage enclosure as opposed to an access culvert and the B/O Ratio should not be 50/50. He testified that as a result of this, it is his opinion that the B/O Ratio for Part 1 should be increased from 36/64 to a B/O Ratio of 67/33 for both the assessment levy for this Report and for future maintenance.

The cost estimate for Part 2 is $32,660 with $16,330 assessed as a special benefit and $16,330 assessed as outlet. This gives a B/O Ratio in schedule A-2 of 50/50. Mr. Dobbin testified that he would use a B/O Ratio of 67/33 as well for Part 2 for both the assessment levy in this Report and for future maintenance.

Mr. Dobbin noted that the 2005 report prepared by Mr. Dries provided a B/O Ratio of 75/25 for future maintenance.

Mr. Dobbin testified that a section 31 allowance for incorporating the existing drain as outlined in the Act states that the allowance shall be made. It is his opinion that the allowance for the existing structure should be based on the original net cost to each land owner and depreciated to today's value.
With respect to Mr. Kuntze's evidence about the alternate outlet, he testified that he would have to study the proposed scheme before he could make a comment.

On cross examination by Mr. Courey, Mr. Dobbin agreed that he did not have an issue with respect to the design of the project as presented and that his only issue was with the assessments.
In reply to a question from the Tribunal, Mr. Dobbins stated that special benefits are not pro-ratable and that he would reduce the special benefit assessments in the Report to zero and replace them with a regular benefit assessment in accordance with section 22 of the Act.

Ed Dries, P.Eng.

Mr. Courey called Ed Dries as a witness for the Municipality.
Mr. Ed Dries, P. Eng., of Dillon Consulting Limited, in Chatham, presented evidence on behalf of the Municipality. Mr. Dries was accepted as an expert witness by all parties and the Tribunal.

Mr. Dries testified that there are two parts of his Report. Part 1, is the incorporation of the private drain in Erie Beach into the Story Drain, and Part 2 is the construction of the drain enclosure north of Towanda Blvd. He stated that the cost of Part 1 was estimated at $19,640 and the cost of Part 2 was $32,660. He stated that, in his opinion, for Part 1 which is the drain incorporation, the $19,640 should be assessed at a Benefit/Outlet Ratio of 36/64. He stated that for Part 2, the drain enclosure, is similar to the replacement of an existing culvert and that he assessed a special benefit assessment to the adjacent landowners of 50% of the cost and assessed the remaining 50% to the upstream landowners (B/O Ratio of 50/50). He testified that after hearing the testimony of the other engineers that he would not change his methodology.

Mr. Dries agreed with Mr. Kuntze that the cost of $13,760 for the pipe proper in his Cost Estimate in the Report was low and should be corrected.

With respect to the engineering costs of the 2005 report being included in the 2010 Report, it was his opinion that it was not a failed petition. Mr. Ellis signed a petition, the report was prepared and later referred back to resolve issues. A further report was prepared to investigate alternate outlet locations into Lake Erie and that the work was continuous up to and including the 2010 Report. He testified that in the absence of a signed document that Mr. Ellis had withdrawn, there was no mechanism to assign the cost to Mr. Ellis. In the meantime, the portion of the drain enclosure north of Towanda Blvd. failed and something had to be done and the 2010 Report was prepared under section 78.
With respect to the report dated March 30, 2007 on the alternate outlet locations, Mr. Dries testified that none of the three alternatives seemed practical and only Option 1, which outlets into Beaver Creek and required a pump station was feasible. However, even this option was not economical. He agreed with Mr. Girty regarding the work necessary in raising the road in the Bisnett Road area. He stated that the upstream owners are not looking for a new outlet and he believes that they do have some fiduciary responsibility to the existing outlet.

Mr. Dries discussed his methodology in determining the allowances to be paid to landowners. For allowances for land, under section 29 of the Act, he stated that he used a width of 10 metres and a land value of $10,000 per acre. For allowances for damages under section 30, he provided a nominal allowance to the Solomon and Washburn properties of $100 each because the works will result in complete restoration of the properties. For the allowance for incorporating the existing drain enclosure under section 31, he stated that he had considered this and he did not believe that they were eligible for an allowance.

Mr. Dries testified that the current drain proposal meets the Design and Construction Guidelines for a 2 in 5 year storm, where the previous open channel provided for a 1 in 50 year storm. He agreed that the upstream landowners have definitely lost something in the process.

In response to questioning from Ms. McGuigan Kelly, Mr. Dries agreed that the Benefit/Outlet Ratio of 75/25 in his 2005 report was much closer to Mr. Dobbin's opinion and that he had put significant weight on the downstream landowners. Ms. McGuigan Kelly suggested that the Tribunal now has a fourth opinion in front of them and she believes that Mr. Dobbin's 2005 opinion is fairer to the agricultural landowners. Mr. Dries stated that one of the reasons for changing the B/O Ratio in the 2010 Report was that the issue of public safety had been raised and that these public safety issues went away when the drain was enclosed. Mrs. McGuigan Kelly suggested that the public safety issue was not the responsibility of the agricultural landowners and that the B/O Ratio should not have been changed. Mr. Dries responded that this was his reasoning and it was now up to the Tribunal to decide.
In response to a question about assigning a benefit assessment for all residents in Erie Beach as Mr. Kuntze suggested, Mr. Dries testified that he would not consider it in this situation. He stated that the Story Drain had functioned prior to being enclosed and he does not believe that the residential property owners had any real issue with the drain except for those abutting it.

Mr. Dries agreed with the reduction in assessed acreage for the gravel extraction for the McGuigan property, and it was his recommendation that the assessment schedule be modified by the Tribunal to accept the Court of Revision decision in this respect.

In response to a question by Ms. McGuigan Kelly, Mr. Dries disagreed that section 14(1) of the Act applied in this situation as the Report provided for the replacement of an existing drain.
In response to a question by Mr. Asher regarding the section 31 allowance for the existing drain, Mr. Dries maintained that he did address it and decided not to include it. He said that under the Act there is no duty to include it, particularly if he did not think it was justified. He further testified that he totally disagreed with Mr. Kuntze's opinion and that he came up with a value of zero for this allowance.

On a further question by Mr. Asher regarding the alternate drain outlets referred to in the report dated March 30, 2007, Mr. Dries testified that the report was requested by the Municipality and that a general discussion of the options and the costing contained in the report took place at the site meeting in 2009. Mr. Dries confirmed his opinion of the costing of Option 1 in the report which indicated that the cost of reconstructing the pump facility at Bisnett Road could easily be in the range of $200,000 to $250,000. Mr. Dries stated that, in his opinion, the alternative that Mr. Kuntze was suggesting to redirect the flow easterly along the Robertson Drain to a gravity outlet at Beaver Creek, would not work.

With regards to the 2005 engineering costs allocated to the 2010 Report, Mr. Dries testified that the work on the project under section 78 had been continuous since the original instructions were received for the 2005 report. When Dillon Consulting purchased Todgem & Case, all of the drainage works and projects continued on seamlessly.

Upon redirect from Mr. Courey, Mr. Dries confirmed that he chose not to provide a section 31 allowance for incorporating the existing works, and he believed that this still fulfilled his obligations under the Act. He further explained that the $10,000 figure used for the section 29 allowance was consistent with the principles identified in his paper on allowances.

On questions from the Tribunal, discussion took place regarding the Benefit Assessment and Special Benefit assessment. Mr. Dries stated that page 10 of the Report indicated that the Special Benefit Assessments in A-2 are pro-ratable assessments for this project.

Regarding the section 29 allowance, Mr. Dries replied that he chose the $10,000 figure, not the full allowance or property value, and by doing so he settled on a number that he thought was fair and equitable.

On redirect from Ms. McGuigan Kelly regarding the 2005 report costs, Mr. Dries stated that a considerable amount of the work for the 2005 report was used in the 2010 Report, however, he conceded that there is a portion in the fees that relates solely to the 2005 report.

Ruth Wilson (lots 53, 54, 118 & 120)

Mrs. Wilson asked to make a statement to the Tribunal. She stated that her family has had a cottage in Erie Beach for 47 years. She stated that the drainage ditch started as an intermittent stream with heavy flow in spring and after storms, and otherwise was a cesspool and health hazard. She is very happy to have it enclosed.

Summations

Mr. Asher

Mr. Asher stated that Mr. and Mrs. Anderson are seeking an order to have the Report referred back to deal with the issues of this hearing.

With respect to the section 29 allowance for right-of-way, Mr. Dries assigned the Anderson property an allowance of $837 based on a land value of $10,000 per acre. Mr. Anderson calculated an allowance value of $38,000 based on current real estate values and asked that the Tribunal order the Engineer to obtain a market value appraisal for the right-of-way.

With respect to the section 31 allowance for incorporating the existing enclosure on the Anderson property, Mr. Dries did not consider this allowance. Mr. Kuntze gave a value of $22,800 based on the current replacement cost of the structure. Mr. Dobbin stated that the original value of the structure, depreciated to 2010, should be used.

He stated that Mr. Kuntze did not have strong objections to the assessment in Schedule A-1 and that his suggested alternative would include a benefit assessment against all of the residential properties within the watershed in Erie Beach. Mrs. Wilson gave a statement with respect to the improved aesthetic value to the subdivision by having the drain enclosed.

Mr. Asher stated that Mr. Dries did not address the alternate outlet locations in his Report and that Mr. Kuntze presented an alternate outlet location through the Beaver Creek Drain which would not require a pump station at this road.

Mr. Asher requested that the cost of the 2005 report prior to 2010 not be included in the Report and that it should be paid by the Municipality. He also requested that the engineering and legal costs for his client be added to the cost of the drain.

Ms. McGuigan Kelly

Ms. McGuigan Kelly agreed with Mr. Asher that the costs related to the 2005 report should not be borne under the current Report. She said her clients do not want an increase in the section 29 allowance and that the request to explore the alternative drain outlets should not proceed at the expense of the upstream properties.

She stated that there are now three engineers, with four opinions, of what the B/O Ratio should be with the following percentages assessed as outlet by the different engineers.

• Dries 2005 report - 25% outlet
• Dries 2010 report - 64% outlet for Part 1 and 50% for Part 2
• Dobbin - 33% outlet
• " Kuntze - 60% outlet
  

It is her submission that this drain enclosure is not a culvert installation and should not be assessed as a culvert. The benefit assessment for this drain enclosure should be higher than 50%.

She stated that for section 29 allowances, Mr. Dobbin agreed with the values in the Report, and that an allowance for right-of-way based on fair market value of the entire property does not make sense.
Ms. McGuigan requested that the Tribunal order the following;

• the assessable acreage in Schedules A-1 and A-2 for Roll # 10- 610 (657722 Ontario Inc.) be reduced from 80 acres to 50 acres.
• a benefit assessment be added to the lands in the community of Erie Beach.
• in Schedules A-1 and A-2, the benefit assessment be increased to 67% and the outlet assessment reduced to 33%.
• the future maintenance of the drain enclosure south of Towanda Blvd. be levied against the property on which the work is carried out and the remaining 33% assessed against the upstream lands in the same proportions as the outlet assessment as adjusted in Schedule A-1.
• the future maintenance of the drain enclosure north of Towanda Blvd. be levied in accordance with Schedule A-2 as amended.
• the Report be amended such that the addition of any surface features that do not affect the drain, be assessed to the affected owner.
• there be no change in the section 29 allowance in the Report.
• there be no section 31 allowance, but should the Tribunal award any allowance, that the award be nominal.
• surface features such as a garage or other features that do not affect the function of the drain be the responsibility of the individual land owner.
• the engineering and contingency cost apportioned to the private drain incorporation and set out in page 8 of the Report be reduced by $11,179.
• there be no investigation with respect to changing the location of the drainage works at the expense of the drainage works.
  

Ms. McGuigan Kelly stated that there is no basis for having Mr. Anderson's legal and engineering costs included as part of the project. However, if the Tribunal were to award costs to Mr. Anderson, she would ask for her clients' costs be included as well.

Paul Courey

Mr. Courey first dealt with the appeal with respect to the design of the project under section 48. He stated that Mr. Dobbin had no concern for the design of the project, yet Mr. Kuntze challenged the value of the allowances under both section 29 and 31, and maintained that there is a better outlet for the agricultural water from the Story Drain by improving the Beaver Creek Drain to the east to outlet by gravity at Bisnett Road. Mr. Courey stated that literally generations of engineers including Mr.

McGeorge, Mr. Todgham, and Mr. Dries, have worked on the Story Drain and none have recommended an alternate outlet to Lake Erie. Even Mr. Girty, a longtime landowner, who has operated the pump station at the Beaver Creek outlet, has stated that the gravity outlet proposed by Mr. Kuntze will not work.

Mr. Courey also commented on Mr. Kuntze's statement that he had only made a cursory examination of the site just prior to the hearing. Mr Courey said that the Municipality's position is to support the Report as written and that there should be no further study of alternatives. He further stated that the section 29 allowance for right-of-way is for the use of the land and not for land taken, and that there is a huge difference between the two. It is also the Municipality's position that there should be no changes to the allowances as shown in the Report.

Mr. Courey stated that the Municipality agrees with the submission that the McGuigan property (Roll # 10-610) should be reduced in area to 50 acres as proposed by the Court of Revision due to gravel extraction. He stated that the Municipality proposed that the value of the pipe used in the Cost Estimate in the Report should be corrected from $13,700 to $21,600.

Request For Costs

Mr. Courey requested that the Tribunal order the appellants, Kenneth and Lynda Anderson, to pay $2000 in costs to the Municipality.

Mr. Courey submitted that the need for two and a half days of hearing time which included three lawyers, three engineers, and numerous hours of municipal staff time to prepare for the Hearing, was largely due to the Anderson's appeal. Mr. Courey noted that despite the fact that the Andersons were greatly benefiting from the project, they still launched this very costly appeal.

Mr. Courey also addressed the issue of Mr. Asher's Motion stating that it was misguided and that he had informed Mr. Asher on a number of occasions that his approach was wrong. He therefore asked that $1000 of the $2000 requested be awarded as a deterrent to this kind of inappropriate behaviour.

He concluded that the Municipality believed the upstream owners had a reasonable complaint which they dealt with appropriately at the Hearing through their legal counsel and, as a result, no costs were being requested of them.

Mr. Asher responded by stating the Andersons were simply exercising their right of appeal pursuant to the Drainage Act. He argued that the Motion was properly brought forward and no penalty should be addressed as a result.

Ms. McGuigan did not respond to Mr. Courey's submissions with regard to the issue of costs.

Findings

The Tribunal reviewed the matter of the allowances for right of way under section 29 of the Act and accepts the arguments that the allowance is for right of way and should not be based on the real estate value of the complete parcel of land. The Tribunal accepts Mr. Dries' opinion and will not order a change in the section 29 allowance.

With respect to the section 31 allowance for including the existing drain enclosure south of Towanda Blvd., the Tribunal rejects Mr. Kuntze's opinion that the value of the existing drain enclosure on Mr. Anderson's property should be the replacement value of a new pipe depreciated by 50%. As an analogy, one would not value a 1987 automobile based on the list price of a similar 2011 model.

The Tribunal accepts the opinion of Mr. Dobbin and Mr. Kuntze that the Act requires the Engineer to provide a section 31 allowance for the existing drain enclosure. Mr. Dobbin testified that the allowance should be based on the original cost of the enclosure to the owner of the land and depreciated. While Mr. Dries stated that he had considered a section 31 allowance for Mr. Anderson and had assigned a value of zero, there was no evidence in the Report to indicate that. The Report stated that the drain enclosure south of Towanda Blvd. appeared structurally sound with an anticipated additional life of 15 years. No evidence was submitted to support that statement and the estimates offered by the various parties ranged from 5 to 20 years. No estimates were provided for the present value of the drain enclosure. In light of the above, the Tribunal will order a nominal allowance to the two landowners south of Towanda Blvd. for the existing drain enclosure under section 31.

The idea of removing the present Story Drain outlet from the residential subdivision of Erie Beach has been considered by engineers for the past several decades. The most extensive study was described in Mr. Dries' report dated March 30, 2007 where three options were studied and all were rejected as not being feasible or economical. The alternative proposed by Mr. Kuntze is similar to Option 1 of Mr. Dries' report, however, Mr. Kuntze would not require a pump station at Bisnett Road. The Kuntze proposal was rejected by all of the other parties. The Tribunal finds that the Kuntze proposal did not take into consideration the variation in the elevations of Lake Erie, and was not based on sound engineering principles, and, as such, should not be considered further. The Tribunal will order that the outlet of the Story Drain in the existing location as proposed in the Report is confirmed.

Considerable discussion took place regarding the disposition of the engineering costs associated with the 2005 report. The Tribunal accepts Mr. Dries' statement that the work from the 2005 report was continuous, including the 2007 report on the alternatives and the 2010 Report. In the cross examination of Mr. Dries by Ms. McGuigan Kelly, he stated that there was a portion of the engineering work that related solely to the 2005 report. On this basis, the Tribunal finds that a portion of the engineering costs should be removed from the Report and the Tribunal will order a nominal amount of these engineering costs be charged to the Municipality.

During the course of the hearing, Mr. Dries and Mr. Kuntze agreed that item 2 in the cost estimates on page 7 of the Report for the supply of the pipe was too low and should be increased from $13,670 to $21,600. The Tribunal will order that correction.

Mr. Anderson testified that he was probably aware that his garage may have been constructed over the drain. Section 5 of the specifications in the Report provides for the relocation of the drain around the garage on the Anderson property (Roll # 1-038) if necessary. Ms. McGuigan Kelly in her summation requested that additional costs due to the garage should be charged to the individual land owner. The Tribunal will order that any additional cost of shoring up or damage to the garage on the Anderson property shall be charged to Roll # 1- 038.

Section 54(3) of the Act states that every appeal shall be heard by the Tribunal by way of a new hearing and, as such, the Court of Revision decision no longer applies.

The Court of Revision dated June 22, 2010 reduced the acreage assessed on Roll # 10 - 610 (657722 Ontario Inc.) from 80 acres to 50 acres. It ordered the assessment on that property be reduced by $406 in Schedule A-1 and $585 in Schedule A-2 and that the corresponding amounts be added to the assessments for Towanda Blvd. Mr. Dries agreed with Ms. McGuigan Kelly that this part of the Court of Revision decision should stand, and the Tribunal will so order.

One of the main issues before the Tribunal was that of assessment and there were many points of view expressed. One of the points of contention was whether the pipe was a culvert (a short length of pipe to pass vehicles over the drain and transport water) or a drain enclosure (a long length of pipe to only transport water). Mr. Dries maintained that the pipe north of Towanda Blvd. was a culvert and should be assessed using a B/O Ratio of 50/50 which is generally accepted practice for assessing culverts. Mr. Dobbin maintained that the pipe is a drain enclosure and that the benefit assessment should be higher. The Tribunal accepts Mr. Dobbin's opinion.

Mr. Kuntze outlined an alternative assessment method which involves placing a benefit assessment on each of the residential lots within the watershed of the Story Drain based on the philosophy that all of the residential properties receive a benefit by having the water course through the subdivision enclosed. This proposal was supported by Ms. McGuigan Kelly and by Mrs. Ruth Wilson, a resident of Erie beach who expressed the benefit of having the previous eyesore covered up when the drain was enclosed. Mr. Dries was opposed to this type of assessment. On cross examination of Mr. Dries by Ms. McGuigan Kelly on why his B/O Ratio had changed from 75/25 in the 2005 report to 25/75 in the 2010 Report, his only response was that at the public meetings, the issue of public safety was raised and that all of the safety issues went away when the drain was enclosed. This argument would suggest that the residential properties have a benefit by having their safety issues resolved by the enclosed drain.

Considerable discussion took place regarding the appropriate B/O Ratio for the assessments. As stated by Ms. McGuigan Kelly in her summation, we have three engineers with four opinions. Mr. Dries holds the extreme opinion with a B/O Ratio of 75/25 in the 2005 report and 25/75 in his 2010 Report. Mr. Dobbin is in between with a B/O Ratio of 67/33 and Mr. Kuntze recommended a B/O Ratio of 40/60. The Tribunal considered the matter of the B/O Ratio in great detail and will order amendments to the Benefit/Outlet Ratio for the construction and maintenance for both Parts 1 and 2.

The Tribunal will order that the Benefit/Outlet Ratio for assessments in both Part 1 and Part 2 shall be Benefit 60% and Outlet 40%. Each of the 54 residential properties listed on the "Small Parcel Ownership Plan on Sheet 2 of 4 of the Report Drawings shall be assessed $100 as part of the Benefit assessment in Part 1.

The Tribunal will order that the future maintenance of Part 1 shall be assessed 50% to the adjacent landowners, 10% to the residential properties, and 40% to the upstream landowners.

With respect to the Request for Costs, section 98 of the Act empowers the Tribunal to award costs in any proceeding as it deems proper. Section 17.1 of the Statutory Powers and Procedure Act also provides that the Tribunal can order costs of a proceeding where a party's conduct has been unreasonable, frivolous or vexatious or where a party has acted in bad faith or where the Tribunal has created its own rules of procedure governing the awarding of costs. Rule 28 of the Tribunal's Rules of Procedure sets out the circumstances upon which the Tribunal may determine whether or not the awarding of costs is warranted. Rule 28.04 states as follows:

Circumstances in which Costs Order May be Made

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 Tribunal will not consider factors arising out of a mediation or settlement conference except where, for example, it finds that a request for change to a settlement is unreasonable.)
   

The awarding of costs is a relatively rare occurrence and is not a standard Tribunal practice. The Tribunal will analyze whether the party in question acted "clearly unreasonable" during the appeal process to the degree that a reasonable person would deem that conduct to be unfair to the other parties involved.

Although we understand the Municipality's concerns with the length of the Hearing process we find no facts to substantiate that the Andersons acted in a "clearly unreasonable" fashion in bringing forward and arguing their appeal.

We likewise find that although Mr. Asher's Motion on behalf of the Andersons may have been somewhat misguided and brought forward due to a lack of knowledge with respect to the Drainage Act, there is no evidence before us that it was brought forth in a frivolous or vexatious manner.

The Tribunal therefore denies the request to award costs.

Tribunal Order

1. The Tribunal hereby orders as follows:
   That the engineering costs of Part 1 (private drain incorporation) be decreased by $3,900 and that this amount be paid out of the general account of the Municipality.
2. That an Allowance be provided for the existing drain in accordance with section 31 of the Act in the amount of $2,600 for Roll # 1-038 (K. & L. Anderson) and $1,300 for Roll # 1-03701 (D. & L. Ellis).
3. That the Cost Estimate on page 7 of the Report for the supply of the pipe be increased from $13,670 to $21,600.
4. That the Engineer shall modify the Estimate of Costs on page 7 of the Report and the cost of Part 1 (drain incorporation) and Part 2 (drain enclosure) on page 8 to reflect the above Orders.
5. That the assessment on Roll # 10 - 610 (657722 Ontario Inc.) in the existing Report be reduced by $406 in Schedule A-1 and $585 in Schedule A-2 and that the corresponding amounts be added to the assessments for Towanda Road.
6. The Engineer shall then amend Schedules A-1 and A-2 in the Report as follows:
   1. For Part 1 (drain incorporation) the Benefit/Outlet Ratio shall be Benefit 60% and the Outlet 40%.
      • The 60% Benefit shall be levied $100 for each of the 54 residential properties listed on the Small Parcel Ownership Plan on Sheet 2 of 4 of the Report Drawings, and the remainder proportioned to the lands assessed for Benefit in Schedule A-1.
      • The 40% Outlet shall be proportioned to the lands assessed for Outlet in Schedule
   2. For Part 2 (drain enclosure) the Benefit/Outlet Ratio shall be Benefit 60% and the Outlet 40% proportioned to the lands assessed for both benefit and outlet in Schedule A-2 using the amended cost estimate.
7. That the outlet of the Story Drain in the existing location as proposed in the Report is confirmed.
8. That the Report be amended to provide for the assessments for future maintenance on the section of drain enclosure extending from Towanda Blvd. to Lake Erie. Future maintenance shall be levied as follows:
• 50% to the lands on which the works are carried out.
• 10% shall be levied equally to the 54 residential properties listed on the "Small Parcel Ownership Plan on Sheet 2 of 4 of the Report Drawings.
• 40% shall be proportioned to the lands assessed for outlet in Schedule A-1.

9. That any additional cost of shoring up or damage to the garage on the Anderson property(Roll # 1- 038) due to the presence of the Story Drain, shall be charged to that property.
10. That there be no order as to costs and all parties are responsible for their own costs.
11. The non-administrative costs of the Municipality with respect to this appeal shall form part of the cost of the drainage works.

 

Dated at Amherstburg, Ontario this 1st day of June, 2011