Statute Labour for the 21st Century?

AS PREVIOUSLY PUBLISHED IN THE RURAL VOICE:

I probably shouldn’t have been surprised, but I was surprised upon learning recently of a municipal by-law requiring landowners to keep grass and weeds down below a maximum height on the municipal boulevard abutting private properties.  The by-law was passed by an urban municipality – a city in the GTA area – and applies to all “private land” regardless of its use.  While it is easy to picture the small strip of grass located between the edge of the street or sidewalk and a residential front yard and to understand why a municipality might expect the homeowner to cut the grass on the boulevard (road allowance) strip if the homeowner is cutting the lawn on the private property anyway, what about larger farm properties or industrial properties within the municipality?  Is it fair to impose an obligation to maintain large stretches of municipal property on non-residential landowners?  Is it legal?

It turns out that boulevard maintenance by-laws are fairly common in Ontario.  A 2012 report from the “Boulevard Maintenance Task Force” to municipal council in one community explains the rationale and authority for the by-laws:

“Most residents and business owners … assume responsibility for maintaining turf areas on municipal boulevards abutting their properties, however, some property owners only cut the grass within their own fenced yards or only up to the limit of the sidewalk fronting their homes.  This practice creates an unsightly, unkempt appearance within the community particularly on residential corners and side lots. 

 

[…]

 

“Amendments to the Ontario Municipal Act now authorize municipalities to enact By-laws requiring property owners to maintain the boulevard areas abutting their private properties.  Enforcement of the By-law would be similar to the current practice whereby Enforcement Officers would respond to complaints by conducting site visits and providing formal notice to the owner to cut the grass.  However, if the owner chooses to ignore the notice, the Town will undertake the work and add the costs incurred (including administration and overhead) to the tax roll.”

I have been unable to find any specific authorization in the Municipal Act, 2001 for by-laws that require property owners to maintain abutting municipal lands, whether within a road allowance or not.  The preamble to the by-law I looked at from the GTA-area municipality refers to the very broad authorizations in Section 11 of the Act, which permit by-laws for the “economic, social and environmental well-being of the municipality, including respecting climate change” and for the “health, safety and well-being of persons.”  The Act also provides that municipalities may require a property owner to clean and clear the owner’s own land and may prohibit and regulate with respect to public nuisances.  However, there doesn’t appear to be any specific authority to require private landowners to carry out maintenance work on municipal-owned property. 

Another by-law I reviewed stated in its preamble that: “AND WHEREAS … section 446 of the Municipal Act, S.O. 2001, c.25, grants a municipality the authority to direct or require a person to do a matter or thing, and the municipality may also provide that, in default of it being done by the person … directed or required to do it, the matter or thing shall be done at the person’s expense and, the municipality may recover the cost of doing a matter or thing from the person directed or required to do it by action or by adding the costs to the tax roll and collecting them in the same manner as property taxes”.  However, Section 446 of the Act doesn’t actually grant authority to order someone “to do a matter or thing” – it only provides for the municipality’s right to charge back the cost of doing the matter or thing where a person doesn’t do it.  The municipality still has to have had the legal authority to order someone to do something in the first place. 

So are municipalities really authorized to order landowners to maintain the municipal boulevard or road allowance adjacent to private lands?   Keeping weeds and grass down to an acceptable height along streets and highways is certainly a reasonable goal that should be supported by all members of a community.  However, boulevard maintenance by-laws don’t just call on certain members of the community to devote time and expense to the upkeep of public lands; a requirement to carry out work on municipal lands also shifts the risk of liability to private landowners.  I didn’t see any by-law that mentioned protections for landowners who are required to enter upon and carry out work on boulevards or road allowances.  If damage is done or someone gets hurt, the landowner may very well be on the hook.

If there is legislation that authorizes a municipality to require private landowners to carry out operations on abutting municipal lands (and to take on the risk of liability), it doesn’t seem to me to be the Municipal Act, 2001.  There used to be a law in Ontario called the Statute Labour Act, which obligated landowners to contribute labour to maintain municipal roads.  The law dated back to the first Acts of the Parliament of Upper Canada in 1793 and effectively enabled property owners to contribute labour in lieu of paying taxes in cash.  The original Act provided: “That the roads and highways, in and through every parish, township or reputed township shall be cleared, repaired and maintained by the inhabitants thereof, and that every person being a householder or freeholder, shall either in person or by a sufficient man in his stead, be obliged to work on the roads …”.  The Statute Labour Act was repealed on January 1, 2022 and no new legislation has been passed to replace it.

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).

When innocent parties are held liable for environmental contamination

The Ontario Divisional Court has recently released a decision affirming the authority of the Ministry of the Environment to hold a party liable for clean up of contamination even though that party was not at fault.  As the Court explained: "The appeal centres on the question of what are the appropriate considerations in making a clean-up order under the Act, against an owner of contaminated land who had no responsibility whatsoever for the contamination."

Several hundred litres of furnace oil had leaked from the basement of a privately owned property located in the City of Kawartha Lakes.  The oil seeped onto property that the City owned and from there had the potential to adversely affect Sturgeon Lake. The Ministry of the Environment (MOE) ordered the private property owners to remediate the damage. The owners, who had limited financial resources, made an insurance claim, but their insurance funds ran out before remediation could be completed on the City property. The MOE then ordered the City to clean up the contamination on its property and to prevent discharge of the contaminant from its property.

The City appealed the order to the Environmental Review Tribunal (ERT), which refused to allow the City to call evidence directed at proving the City's innocence and determining who was actually at fault for the contamination.  The Divisional Court upheld this decision of the ERT, finding that earlier decisions of the ERT related to fairness (e.g. it would not be fair to hold an innocent party responsible for the costs of clean up) had been supplanted in large part by the MOE Compliance Policy. 

The Compliance Policy states that the "fact that an owner of a contaminated site may have purchased it without notice of the presence of contamination is irrelevant to the purpose of the Ministry legislation [the Environmental Protection Act] and generally will not be considered by the statutory decision-maker to be grounds for relieving that owner from liability under a control document."  According to Section 2 of the Policy, an innocent or "victimized" owner will not be relieved of liability.  If an exceptional or unusual circumstance existed, the timing and content of such an order could be varied - but not whether the order should be issued in the first place. 

The Divisional Court also rejected the argument of the City that the ERT's decision violated the "polluter pays" principle and, therefore, that the decision could not stand.  The Court instead pointed to Section 157.1 of the Environmental Protection Act, which it says "can be accurately described as an 'owner pays' mechanism".  The section makes no reference to fault.  It gives the provincial officer the discretion to make an order against an owner if the officer reasonably believes that the order is necessary or advisable to protect the environment.  The ERT had found that the MOE had acted reasonably in making the order against the City, and the Divisional Court agreed.

Read the decision at: The Corporation of the City of Kawartha Lakes v. Director, Ministry of the Environment.

Sask. Court rules husband's seed and chemical debt can be set off against payment to wife for grain

A Judge of the Provincial Court of Saskatchewan has ruled that a farm supply company was justified in setting off a husband's debt owing for seed and chemical against a payment to be made to his wife for grain.  Denise Korpan had sold feed barley to Parrish and Heimbecker Ltd., and the company deducted from the payment to Ms. Korpan the amount her husband owed for seed and chemical.  She sued the company alleging there was no right to set off the husband's debt and alleging that the debt was not as much as was deducted.

Ms. Korpan, the Plaintiff, and her husband, Ed Korpan, are farmers running a mixed farming operation.  They have never incorporated their farming operation. Initially they carried on as a family run farm, however some 12 years ago, at their accountant’s suggestion, they divided the responsibilities in their farming operation. The Plaintiff now looks after the cattle portion of the farming operation while her husband is responsible for the grain portion of the operation. Both have knowledge of what the other is doing and make decisions about the farming operation together, but both own farmland and farm assets in their own names. Even though certain machinery and/or vehicles are owned by one of them, the other can use the machinery or vehicles if necessary.

In February, 2008, Norman Cobb, a sales representative for the Defendant, Parrish & Heimbecker Ltd., met with the Korpans at their farm. At this meeting, Ed Korpan filled out a credit application with the Defendant which was later approved. The Plaintiff did not sign the credit application, but was present when her husband signed it and took an active role in the discussions surrounding it. In the course of filling out the application, Mr. Cobb confirmed with them that they ran a family farm. Nothing was said about them running separate farming operations. In the 2008 crop year, Ed Korpan purchased canola seed and chemical from the Defendant on credit. The Plaintiff was aware that he had done this although she did not recall seeing the actual contract. This was not out of the ordinary as Ed signed all of the grain related contracts on behalf of the family.

In order to decide the set off issue, the Judge had to determine if the Plaintiff and her husband were operating the farm as a partnership or if they were each running their own farming operation. The Defendant company argued that it was former while the Plaintiff was adamant that her and her husband were each sole proprietors of separate farming operations.  The Judge found that the Plaintiff had not satisfied the Court on a balance of probabilities that she and her husband ran separate farming operations.  The evidence established the contrary - that they were engaged in a partnership.  Under the Partnership Act, "every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while he/she is a partner...".  On this basis, the Defendant was entitled to set the husband's debt off against the wife's sale of barley (i.e. set off the parternship's debt against the payment to the partnership for the barley).

Read the decision at: Korpan v Parrish and Heimbecker Ltd.

NEB issues Hearing Order for Pipeline Abandonment Costs Estimates

The National Energy Board (NEB) has issued a Hearing Order in the LMCI Stream 3 proceeding dealing with pipeline abandonment cost estimates.  An oral hearing will be convened to consider the reasonableness of the costs estimates presented by each Group 1 company (including Enbridge, TransCanada, etc.)  The following timetable of events is included in the NEB's Order:

Although landowners and other interested parties will be able to participate as intervenors, no participant funding is being made available. 

Read the Hearing Order at: MH-001-2012.

Appeal Court agrees auctioneer not liable for selling cattle subject to security agreement

The Saskatchewan Court of Appeal has upheld the dismissal of a claim against an auctioneer for the tort of conversion for selling livestock that was subject to a security interest.  A secured creditor, Lloydminster Credit Union Limited, brought an action against an auction company, 324007 Alberta Ltd., which operates Heartland Livestock Services. The Credit Union had a security agreement, securing demand and other loans on livestock, with Robert Burroughs, a farmer.   Mr. Burroughs sold the livestock, using Heartland’s auction services, and did not account for the proceeds to the Credit Union.  The Credit Union sued Heartland in conversion.

Following a trial to resolve the dispute, Justice Pritchard of the Court of Queen’s Bench found that Heartland acted as an agent or intermediary between Mr. Burroughs and the buyers at the auction sale and could not be found liable for conversion in an action brought by the Credit Union.  Justice Pritchard held, in the alternative, that the Credit Union was unable to sustain an action in conversion against the auctioneer because the Credit Union was not entitled to immediate possession of the livestock covered by the security agreement.  As part of this latter proposition, the learned trial judge found that the Credit Union had consented to the sale of the livestock, albeit on the condition that the proceeds be deposited with it.

The Appeal Court upheld the trial judge's decision, but only on the basis that the Credit Union had consented to the sale of the livestock.  Where consent to the disposition of property can be proven, no liability in conversion can be found.  Conversion is an intentional tort (converting someone else's property to your use), and consent is often referred to as a "defence" because the defendant typically bears the burden of proving that the plaintiff had consented to the interference with the property. 

Read the decision at: Lloydminster Credit Union Limited v 324007 Alberta Ltd.

PetroBakken Energy seeks to abandon oil pipeline in place

In what is likely to become a more common occurrence, PetroBakken Energy Ltd. has applied to the National Energy Board for permission to abandon one of its pipelines in the ground.  The pipe is 580 metres in length and is connected to an oil well within the Alsask Gathering System, about 30 km east of Oyen, Alberta (it crosses the border with Saskatchewan).  Construction of the line was approved by the NEB in 2003, and the well ceased production in 2009. 

PetroBakken says it has no plans to put the line back into operation and now must either suspend the line, maintaining cathodic protection, or abandon it.  PetroBakken says that maintaining cathodic protection on the line to avoid corrosion is too expensive, so it chooses to attempt to clean the line and then leave it in place.  On the issue of "liability exposure", PetroBakken states in its application to the NEB:

The proposed abandonment of the pipeline segment is largely driven by legal obligation to meet the requirements of NEB regulation, which indicates that PetroBakken must either suspend or abandon any pipeline that has not operated for over 12 months.  Secondarily, but equally, or more importantly, the proposal to abandon is also being done for ethical reasons as the potential for ground contamination by the (unknown) product within the pipeline must be eliminated.  Leaving this potential risk in the ground (for no operational benefit) would be an unjustified environmental liability for PetroBakken, which could be minimized or eliminated by cleaning and abandoning the pipeline segment.

As the volume of contents remaining within the pipeline segment is uncertain, the environmental liability to the organization is unknown.  The cost to abandon is expected to be less than $10k, which is considered minimal when considering the potential environmental liability.

The Saskatchewan land affected by the line is privately owned.  PetroBakken says that it notified the landowner by phone and was told that the proposed abandonment was "fine".  The Alberta land is in a Special Area and is leased to a farmer.  Again, notification of the project was given by phone and the farmer apparently had "no issues".  The lands affected by the pipeline are apparently used for grazing purposes on both sides of the provincial boundary.

At about 1/2 a kilometre in length, this is a short pipeline to be abandoned.  However, it does give some indication of what might be in store for other landowners across the country facing pipeline abandonment in the future.  The NEB has issued a hearing order for the abandonment application, but no funding has been available for participation in the hearing either by directly affected landowners or other concerned parties.  Therefore, anyone wishing to participate in the process will do so at his or her own cost.  Unlike the situation in provincial jurisdictions, the NEB will make no costs award at the end of the process. 

This application demonstrates the failings of the NEB's recent creation of a participant funding program.  It is assumed that no funding has been made available in this case because of the relatively short length of the pipeline involved (participant funding is reserved for "large projects").  However, for the landowners directly involved, the pipeline is quite long enough to cause concern.  How long does a pipeline have to be before directly affected landowners will have access to "participant funding"?  Is the participant funding sufficient in any event to enable landowners to test the appropriateness of the abandonment plan that is being proposed? 

And can we expect moving forward that pipeline companies will choose to abandon small segments of pipeline on a continual basis rather than applying for the abandonment of large pipeline segments so as to avoid the participant funding program?  The NEB has made it quite clear in its previous decisions that it will allow companies to decide how they make their regulatory applications, even where it is clear that the manner in which those applications are made is intended to thwart the ability of landowners to participate in the process.

Read the PetroBakken application at: Abandonment Application.

Read the NEB Hearing Order at: Hearing Order dated September 6, 2011.