Corn delivery case turns on witness credibility

The Plaintiff company in this case from New Brunswick claimed that it had delivered 8 loads of wet corn to the Defendant company at harvest and that the Defendant company failed to pay for the corn.  The Plaintiff valued the claim at over $33,000.  The Defendant company denied that there was a contract calling for payment to the Plaintiff company at all.  Instead, the Defendant said that it had agreed to purchase the corn from an entirely different third party; the price to be paid for the corn was to be credited to the outstanding account the third party had with the Defendant company.

The judge at trial commented: "There are two starkly different versions of the facts of this case.  Ultimately, the disposition of this case will turn on findings of credibility."  The judge determined that neither the representative of the Plaintiff company nor the third party (an uncle and his nephew) were credible witnesses and found as follows:

Based on my findings of fact, it is clear that there never was a contract between the plaintiff and the defendant for the sale of corn. The arrangement was that the third party, KT, would deliver bulk wet corn to the plaintiff’s premises in Centreville to be picked up by the defendant, the value of which would be applied by the defendant to the third party’s outstanding account. There being no contract of purchase and sale between the plaintiff and the defendant, the plaintiff’s action is dismissed. Given that there is no liability on the defendant, the defendant’s third party claim is dismissed.

Read the decision at: Taylor’s Feed & Tires Ltd v Brennan Farms Ltd.

NS Farm Practice Board decision on overspray upheld

Justice Scanlan of the Supreme Court of Nova Scotia heard an appeal of a decision of the Farm Practices Board (FPB) involving the following facts:

The matter arose as a result of two instances where [JW] sprayed a field directly across the road from the [N] property with what I understand to have been a herbicide. The Appellants argue this was done at a time when the wind speed and direction caused an overspray to spread onto their property, allegedly damaging raspberry canes and allegedly causing personal injury to both Mrs. [N] and to her horses. In addition, the Appellants complain about the impact of ditch excavation, as carried out by Mr. [W], and as to the placement of bales of hay or straw in the ditch, the escape of organic materials onto their property together with the impact or the potential impact that might have had on their well water. I emphasize repeatedly the word “allegedly.” The Appellants also allege, as I noted, that the herbicide impacted the health of their horses, specifically mares in foal. They say the mares were impacted and perhaps may have aborted as a result of the overspray. They allege, as I understand it, although I'm not reviewing in any great detail the allegations in the statement of claim, that it was not just the existing pregnancies that were impacted but the fertility of the mares on a go forward basis.

The issue that had been before the FPB was whether or not the farmer in this case complied with normal farm practices, in which case the practice would be protected from certain civil actions for damages or injunctive relief.  However, the farm protection legislation does not address "the potential impact of chemical use or misuse, including the impact on neighbouring properties."

In the end, Justice Scanlan determined that the FPB decision was reasonable, but pointed out its limitations - it did not deal with all of the allegations made by the complainants, including allegations about overspray.  Those other allegations would still have to be dealt with, if at all, in the civil action that the complainants had also commenced against the farmer in this case.  That action had been stayed pending the outcome of the FPB proceeding.

Read the decision at: Nauss v. Nova Scotia (Farm Practice Board).

Southwest Middlesex drainage case back in Court

The law decided in a recent case involving a municipal drain in the former Township of Ekfrid is not as interesting as the facts of the case.  Justice Rady made a few rulings about the applicability of limitation periods and decided that only the municipality could be the subject of a claim under Section 79 of the Drainage Act.  However, it is her rendition of the facts that will be of most interest.

Here is an excerpt with the background for the case:

[9] In 1964 the plaintiffs, who are farmers, purchased a farm of more than 100 acres located on the north side of Irish Drive in the former Township of Ekfrid. The Township has since been amalgamated into the Municipality of Southwest Middlesex.

[10] Since approximately 1897, the southerly portions of their property and the adjacent lot to the west drained into the Saxon drain. The Saxon drain was originally constructed as an open ditch, approximately eight feet deep and twenty feet wide, which travelled south from Irish Drive toward Kings Highway No. 2. The Saxon drain crossed the lands of the defendants, John Wolfe and Grant Wolfe.

[11] A second branch of the Saxon drain extended easterly along the north side of Irish Drive to the southwest corner of the plaintiffs’ property and provided the connection between the southwest portion of the plaintiffs’ property and the main drain. The Saxon drain had been effectively draining the southwest portion of the plaintiffs’ property and the southeast portion of the adjacent lot since 1897.

[12] In or about 1973, the plaintiffs applied under the Drainage Act to deepen and improve their outlet and the main drain. The Township appointed an engineer, the defendant, A.M. Spriet and Associates.

[13] John Wolfe and Grant Wolfe are said to have proposed to Spriet that a portion of the Saxon drain be filled in and replaced with a closed tile. Spriet endorsed the proposal and provided a report to the Township in February 1974, which was approved and passed as by-law number 8-74.

[14] Spriet then designed a tile system to replace a substantial portion of the open ditch. When they expressed concern, affected property owners were assured that the final plan to be prepared by Spriet would include a ditch, spillway or waterway of some kind along the course of the drain that would take excess surface water from the plaintiffs’ property and the adjacent lot.

[15] The work proposed in the Spriet report was performed by Grant Wolfe (one of the property owners benefitting from the ditch’s elimination) and supervised by the Township and/or Spriet.

[16] From 1966 until 1974, the plaintiffs had no complaints about the drainage of their land. However, after the tile was laid and the ditch filled in, they noted that no ditch, spillway or waterway had been constructed and that the plaintiffs’ property and the adjacent lot were no longer draining properly. In particular, during spring runoff and after heavy precipitation, ditches adjacent to that area of Irish Drive would fill and surface water from the adjacent lot would back up onto the plaintiffs’ property, instead of flowing into the Saxon drain, something that occurred several times a year until approximately 2001. The plaintiffs sustained damage to their property and home as a result.

[17] In 1975 and unbeknownst to the plaintiffs, Spriet had advised the Township of a“grievous” error made by Grant Wolfe when he constructed the drain because it had been installed almost one foot too high to provide an outlet for proper drainage of the plaintiffs’ property.

[18] Subsequently, Spriet and the Township authorized the construction of a connection from the plaintiffs’ tile to the main drain beneath the land owned by John Wolfe for a distance of approximately 700 feet, which was to be constructed at Grant Wolfe’s expense. This “relief drain” was intended to remedy the earlier defective construction and provided a benefit to John Wolfe. The plaintiffs were not advised of the error nor told about the construction of the relief drain until 1996. Neither the Spriet report nor by-law number 8-74 was amended to reflect the change. Notwithstanding the error, Spriet certified to the Ministry of Agriculture that the drain had been constructed generally in accordance with the plans and specifications.

[19] The plaintiffs subsequently retained an engineer, who confirmed that a deep rather than shallow waterway was required along the old course of the ditch to take away excess surface water.

[20] The initially constructed waterway in or before 1978 was billed to the plaintiffs and other property owners upstream from the Saxon drain although those costs would not have been incurred had a proper waterway been constructed in the first place. Because the waterway had not been included in the Spriet report, it was characterized as a maintenance item and did not become part of the drainage works of the Saxon drain. The waterway gradually filled in as a result of erosion and cultivation and affected property owners had no means to enforce maintenance.

[21] Unfortunately, the plaintiffs continued to experience flooding and property damage and they repeatedly complained to the Township. The Township is said to have taken no steps to advise the plaintiffs of what it knew about the source of the problem or to have it investigated and corrected.

Read the rest of the decision at: Ward v. Southwest Middlesex Municipality.

Court of Appeal confirms gas storage rights expired - farm still owns rights

The Ontario Court of Appeal recently confirmed that a farm operation (through a related company) owns the right to inject and store gas into and under its lands.  As a result, the gas storage company that wishes to commence storage operations is going to have to pay compensation for those rights.  In most cases, landowners have already transferred the storage rights to an oil and gas extraction company for less than the current market value of those rights. 

In this case, the Court of Appeal confirmed a lower court decision that found a 1998 gas storage lease between Tribute Resources Inc. and the landowner had expired because Tribute had not taken the issue of designation of the lands as a Gas Storage Area had not been taken to the Ontario Energy Board within 10 years of the date of the agreement:

This Gas Storage Lease Agreement shall terminate on the tenth anniversary date, if an only if, the Lessee or some other person has not applied to the Ontario Energy Board to have the said lands or any part thereof designated as a Gas Storage area on or before the tenth anniversary date hereof.

In spite of that clause, Tribute had argued at first instance and on appeal that its gas storage rights were not limited to the 1998 agreement.  There were earlier agreements (an Oil and Gas Lease and a Unit Operation Agreement) that mentioned gas storage rights.  However, both levels of court ruled that the 1998 agreement was intended to and did replace the earlier agreements.  When that agreement expired, Tribute retained no gas storage rights.

The issue of compensation for the storage rights will be determined by further agreement or by the Ontario Energy Board pursuant to the Ontario Energy Board Act.

Read the Court of Appeal decision at: 2195002 Ontario Inc. v. Tribute Resources Inc.