Corn 2016

Corn 2016

Friday, July 8, 2016

Warranty claim about under-powered high-clearance sprayer ends up in court

The Queen's Bench in Saskatchewan recently dismissed a claim by a farmer who alleged that a high-clearance sprayer he'd purchased was under-powered.  In 2010, the farmer of 2,300 acres spent considerable time researching options and decided on a 2010 Agchem 1184 RoGator ("1184") at a purchase price of $328,500 (before trade-in). The sprayer was delivered on May 11, 2010.  The farmer started using the sprayer on May 12, 2010 and complained that day to the sales representative that the sprayer was under-powered.  Namely, it was working too hard at the speed at which the farmer wished to operate.

Over the next several days, adjustments were made to the engine and tests were conducted.  The representative of the manufacturer concluded that the sprayer was working as intended.  The farmer disagreed and continued to complain that the machine was under-powered.

The farmer invoked Section 36 of Saskatchewan's The Agricultural Implements Act, R.S.S. 1978, c. A-10, and sent a notice of rejection.  Under the Act, the vendor then had seven days in which to try to remedy the problem.  However, by that time, the vendor and the manufacturer had already concluded that there was no problem with the machine.  No further action was taken.

Ultimately, the farmer demanded his money back.  He parked the sprayer at the farm and never used it again.  It was sold at public auction in 2012.  The farmer sued the vendor for breach of warranty on the basis that the machine did not perform well for the work it was intended.

The Court found that the farmer failed to discharge his burden of proving that the warranty in Section 36(4) of the Act was breached - "Every contract for the sale of a new implement is deemed to include a warranty that, if the new implement is properly used and operated, it will perform well the work for which it is intended."  The Court accepted the evidence of the manufacturer's representative who found that the sprayer operated properly - he observed that the sprayer was spraying properly and at an acceptable speed (given wet field conditions).  The Court also took note of the fact that the machine appeared to have completed its spraying operations successfully; in 2010, the sprayer was used for 1,400 acres with no evidence of any adverse effect on crop performance. The farmer's claim was dismissed.

Read the decision at: Coward v Kramer Ltd.

Thursday, June 30, 2016

Court of Appeal reverses Bear Creek natural severance ruling

The Court of Appeal for Ontario has overturned a recent Superior Court decision that found a property to have been severed naturally by a creek.  The owners of the property wished to deal with the property on the basis that it was severed into two parts by the creek running through it.  The local municipality challenged that view, but the Superior Court ruled that there was a natural severance resulting in two separate parcels of land.

On appeal, the Court of Appeal found that the evidence put before the lower court "was not capable of establishing that the Creek as it passed over the respondents' property was a navigable stream ... Title to the bed of the Creek does not lie with the Crown.  There is no natural severance of the respondents' property."  In the original application, the main issue was whether the creek had been navigable at the time of the original grant of lands in the area.  If it had been, then ownership of the creek bed was reserved to the Crown and the properties bisected by the creek would be divided into two severed parts.

Read the decision at: Middlesex Centre (Municipality) v. MacMillan.

Federal Court of Appeal overturns Northern Gateway approval

The Federal Court of Appeal has quashed the decision by the Federal Cabinet to approve the Northern Gateway pipeline project on the basis that Canada failed to consult adequately with First Nations on the pipeline route.  With changes to the National Energy Board Act made by the previous government, pipeline projects like the Northern Gateway project are subject only to a review by the National Energy Board.  The NEB then makes a recommendation to the Federal Cabinet, which has the ultimate say in whether a project is approved.

The appeal court ruled that Canada failed in its approach to consultation with First Nations on the project, noting that the government carried out consultations in a "brief, hurried and inadequate" way.

Read the decision at: Federal Court of Appeal.

Tuesday, June 14, 2016

TransCanada pipeline easement beneath swimming pool nixes property sale

The Plaintiffs in this case wanted to sell their residential property.  They listed the property for sale and the Defendant agreed to purchase it for $1,685,000.  The Agreement of Purchase and Sale was dated August 25, 2014 and the transaction was scheduled to close on November 28, 2014.  The property featured a pool, cabana and patio in the backyard.

After entering into the Agreement of Purchase and Sale, the Defendant discovered that a TransCanada Pipelines Limited ("TCPL") easement ran directly under the pool, cabana and patio.  An agreement provided that TCPL could remove the pool and cabana if necessary, and the agreement and the easement were the subjects of ongoing litigation between the Plaintiffs and TCPL.  The Agreement of Purchase and Sale between the Plaintiffs and the Defendant did not expressly reference the easement or the litigation.

The Defendant discovered the easement on November 6, 2014.  On November 7, 2014, the Defendant advised the Plaintiffs that he would not close the deal, and requested the return of the $50,000 purchase deposit.  The Plaintiffs refused to return the deposit and commenced an action against the Defendant for damages resulting from the failure to close the deal.  The Defendant counterclaimed for the return of the deposit.

As the Court explains in its decision on the claim and counterclaim, the Plaintiffs had constructed the pool, cabana and patio in 2011 without the consent of TCPL.  The TCPL easement dated from 1992, but the Plaintiffs were apparently unaware of it when excavations began (it was actually the second of two TCPL easements on the property).  TCPL permitted the Plaintiffs to encroach on the TCPL easement on certain conditions including:

(a)   The owners agree to sign a formal agreement prepared by TCPL which will be registered against the title of the land and will carry forward with future ownership;

(b)   In the event TCPL’s future operations, new installations, integrity or maintenance programs require the removal of the improvements (the pool and cabana) situated on its easement, the Owner agrees to remove the improvements immediately upon receipt of notice. The Owners and TCPL agree to equally share (50/50) the cost to remove the improvements;

(c)   The Owners covenant and agree that upon the Owner’s sale or disposition of the Lands, the Owners shall fully disclose the restrictive covenant to any prospective purchaser.
A letter containing those terms was registered on title to the property, but the Plaintiffs did not otherwise advise the Defendant of the letter or the subsequent litigation between TCPL and the Plaintiffs.

After the Defendant failed to close the transaction, the Plaintiffs defaulted on their mortgage and the property was sold under power of sale in May, 2015 for $1,730,000.  Although the sale price was higher than the price the Defendant would have paid, the Plaintiffs claimed they received $78,100 less in the power of sale because of the difference in the real estate commission charged (5% vs. 2.5%).

The Plaintiffs brought a motion for summary judgment seeking the damages they claimed from the Defendant.  Instead, the Court dismissed the Plaintiffs' claim and granted judgment to the Defendant for the return of the $50,000 deposit.  The Court ruled that the Defendant was entitled to rescind the Agreement of Purchase and Sale because the (second) TCPL easement and associated encroachment agreement and litigation had not been disclosed to the Defendant in the Agreement of Purchase and Sale.  As the Court noted:
The reference to a single easement in Schedule A of the APS did not provide the defendant with notice or disclosure of the 1992 easement or the June 2, 2011 letter agreement. Schedule A did not referentially incorporate the 1992 easement or make it part of the APS. This is especially true when the wording of Schedule A is compared to the wording of Schedule A in the earlier Purbas APS, which specifically referenced the TCPL litigation. Accordingly, the existence of the 1992 easement, the June 2, 2011 letter agreement, the unexecuted “Agreement To Install Swimming Pool and Cabana”, and the cloud of the litigation in relation to the plaintiffs’ refusal to execute the agreement, all meant that the plaintiffs did not comply with paragraph 10 of the APS which required the title to be free from all registered restrictions except as specifically provided in the agreement.
Read the decision at: Savo and Robichaud v Moursalien.

Wednesday, April 20, 2016

Grain Farmers of Ontario Neonic Appeal Dismissed

The Court of Appeal for Ontario has dismissed the appeal by the Grain Farmers of Ontario ("GFO") related to its challenge of Ontario's neonicotinoid regulations.  As noted by the Court, GFO was concerned that the regulation was unworkable, would produce little benefit, and would significantly impair the ability of grain farmers to protect their crops from damaging insects.  However, the Court of Appeal has ruled that the regulation is not ambiguous and that GFO has not identified a genuine dispute about the rights and obligations of farmers - "to grant the remedy that GFO seeks would be tantamount to amending a regulation through interpretation, a remedy well outside the court's discretionary power to order declaratory relief."

The Court of Appeal found that the motion judge (who originally dismissed GFO's application) was correct to strike the application on the basis that it presented no genuine issue for determination. Even if, as GFO pleaded, the regulation creates financial hardship, is futile, and provides little environmental benefit, "neither the wisdom nor the efficacy of a regulation is a justiciable issue."  The remedies sought by GFO are "solely within the powers of the legislative and executive branches of government."

Thankfully for grain farmers, the Court did not order costs of the appeal against GFO. While GFO will likely be responsible for the costs of its own lawyers, it won't have to pay the costs of the government's lawyers.

Read the decision at: Grain Farmers of Ontario v. Ontario (Environment and Climate Change).

Tuesday, March 8, 2016

Conservation Authority planning to appeal Divisional Court decision

This relates my previous post on the Gilmor v. Nottawasaga Valley Conservation Authority decision of the Divisional Court.  It appears that the NVCA plans to appeal the decision and is seeking leave to appeal from the Court of Appeal.  This is indicated in a ruling in a related Human Rights Tribunal matter (see AG v. NVCA) commenced by one of the landowners involved.

UPDATE:  Leave to appeal was granted to NVCA on February 19, 2016 by the Court of Appeal for Ontario.

Thursday, February 18, 2016

Interest on expropriation damages awarded for time before land actually expropriated

The Ontario Divisional Court has dismissed an appeal from an Ontario Municipal Board ("OMB") decision that awarded interest to a landowner under the Expropriations Act for a period prior to the actual expropriation.  In this case, a local school board expropriated land for a school site.  The landowner had registered a subdivision plan on the lands in question and, in February, 2005, wrote to the school board to advise that, failing an agreement to sell the property to the school board, the landowner would be proceeding with the development of residential lots on the land.

Rather than attempting to negotiate an agreement (reportedly because of a change of control over the landowner company and uncertainty as to the identity of the controlling interest), the school board registered an expropriation plan on June 1, 2006.

The market value of the land taken was determined by the OMB to be a little over $2 million.  On the issue of interest payable on that amount under the Act, the OMB ruled that interest could accrue from a date preceding the date of expropriation.  The OMB determined that the productive use of the land actually ceased in December, 1999 when a "district plan" that governed land use in the area received draft approval.  That plan stated that the land in question was to be used as a school site.  The interest payable by the school board for the period between 1999 and 2006 amounted to between $600,000 and $700,000.

The Divisional Court upheld the OMB's ruling that interest was payable from the date of loss of the use of the expropriated asset and that, in this case, that date was December, 1999.  As the Divisional Court notes:

In my view, the board member applied the correct test by seeking to determine the earliest date at which the potential for expropriation prevented the use of the lands, either because the Municipality would not permit further development or because it would not have been prudent for Erbsville to spend money for that purpose.  In the present case, the distinction between these two potential triggering events is inconsequential.  The board member found that both events occurred on the date that Plan 30T-97017 received draft approval.  As I will explain, I believe that finding was reasonable.

Read the decision at: Erbsville Road Development Inc. v. Waterloo Region District School Board.

Friday, February 12, 2016

Ontario Court of Appeal rules on contaminated lands case and Section 99(2) EPA liability

The Ontario Court of Appeal has allowed an appeal from a decision that dismissed a contamination claim by one landowner against a neighbour.  Thorco Contracting stored a large volume of petroleum hydrocarbons ("PHCs") on its property in an industrial area of Toronto for several decades.  PHCs contaminated the soil and groundwater on that property, and the contaminated groundwater flowed into a neighbouring property owned by Midwest Properties.  Midwest acquired its property in 2007 and then discovered the contamination.  It sued Thorco and its owner for damages based on nuisance, negligence and the statutory cause of action in Section 99(2) of Ontario's Environmental Protection Act.

The trial judge ruled that Midwest failed to prove that it had suffered damages because, in particular, it had not proven that the PHC contamination lowered the value of its property; it was not enough to prove the cost required to remediate the property.  The trial judge also ruled that the Section 99(2) claim was not available because the Ministry of the Environment ("MOE") had already ordered Thorco to remediate the property; an award of compensation might permit double-recovery.

The Court of Appeal overturned the trial judge's decision and granted judgment against Thorco and its owner jointly and severally in the amount of $1,328,000 based on all three causes of action.  Midwest was also awarded $50,000 in punitive damages from each defendant.

With respect to the Section 99(2) statutory cause of action, Justice Hourigan of the Court of Appeal wrote:

In my view, the trial judge erred in her interpretation and application of the private right of action contained in s. 99(2) of the EPA. This private right of action was enacted over 35 years ago and is designed to overcome the inherent limitations in the common law in order to provide an effective process for restitution to parties whose property has been contaminated. The trial judge’s interpretation of the section is inconsistent with the plain language and context of this provision; it undermines the legislative objective of establishing a distinct ground of liability for polluters. This is remedial legislation that should be construed purposively. It is important that courts not thwart the will of the Legislature by imposing additional requirements for compensation that are not contained in the statute.

With respect to the claim for damages, Justice Hourigan wrote:

Neither Tridan nor Canadian Tire involved a claim under s. 99(2) of the EPA. There is no reported case where a court has awarded damages for the cost of future remediation under this section. Nonetheless, in my view, awarding damages under s. 99(2) based on restoration cost rather than diminution in property value is more consistent with the objectives of environmental protection and remediation that underlie this provision.
This approach to damages reflects the “polluter pays” principle, which provides that whenever possible, the party that causes pollution should pay for remediation, compensation, and prevention: see Pardy, at p. 187. As the Supreme Court has noted, the polluter pays principle “has become firmly entrenched in environmental law in Canada”: Imperial Oil Ltd. v. Quebec (Minister of the Environment), 2003 SCC 58 (CanLII)[2003] 2 S.C.R. 624, at para. 23. In imposing strict liability on polluters by focusing on only the issues of who owns and controls the pollutant, Part X of the EPA, which includes s. 99(2), is effectively a statutory codification of this principle.
Further, a plain reading of s. 99(2) of the EPA suggests that parties are entitled to recover the full cost of remediation from polluters. Pursuant to s. 99(2)(a), a party is entitled to recover all “loss or damage” resulting from the spill. Section 99(1) provides that “loss or damage” includes personal injury, loss of life, loss of use or enjoyment of property and pecuniary loss, including loss of income. Section 99(2)(b) provides that a party has a “right to compensation for all reasonable cost and expense incurred in respect of carrying out or attempting to carry out an order or direction under this Part, from the owner of the pollutant and the person having control of the pollutant.” In my view, under either part of s. 99(2), polluters must reimburse other parties for costs they incur in remediating contamination.
In summary, restricting damages to the diminution in the value of property is contrary to the wording of the EPA, the trend in the common law to award restorative damages, the polluter pays principle, and the whole purpose of the enactment of Part X of the EPA. It would indeed be a remarkable result if legislation enacted to provide a new statutory cause of action to innocent parties who have suffered contamination of their property did not permit the party to recover the costs of remediating their property, given the EPA’s broad and important goals of protecting and restoring the natural environment.
Read the decision at: Midwest Properties Ltd. v. Thordarson.