Canada: Agricultural Law NetLetter - Monday, March 7, 2016

A Justice of the Provincial Court of Saskatchewan has dismissed the claim of a Saskatchewan farmer against a municipality for damage caused to the farmer's lands. The municipality installed a culvert which resulted in substantial flooding of the farmer's lands and a corresponding loss in crop yield. The Court held that the claim was statute-barred because it fell outside of the relevant statutory limitation period. The farmer argued that the limitation period began to run when it became obvious that the land could not yield crops the following season, which would put his claim within the relevant period. However, the Court concluded that, based on the farmer's experience and specialized knowledge, he ought to have known that his cause of action arose on the date the flooding occurred, and that the limitation period therefore began at that time. Thus, the farmer's claim fell outside of the relevant limitation period, and the claim was dismissed accordingly. (Lohse v. Lake Alma No. 8 (Rural Municipality), CALN/2016-005, [2016] S.J. No. 81, Saskatchewan Provincial Court (Civil Division))

NEW CASE LAW

Lohse v. Lake Alma No. 8 (Rural Municipality);

CALN/2016-005,

Full text: [2016] S.J. No. 81;

2016 SKPC 25,

SaskatchewanProvincial Court (Civil Division),

L. Wiegers Prov. Ct. J.,

February 22, 2016.

Limitation Periods -- Discoverability -- Damage -- Date Cause of Action Arose.

The Plaintiff, Mr. Lohse, farmed land near Lake Alma, Saskatchewan for 42 years. The Defendant municipality was responsible for the roadways around Mr. Lohse's farmland. In particular, the Defendant was responsible for two roads forming a T-intersection along the southern boundary of Mr. Lohse's farmland. The adjacent ranch land to the southeast of the T-intersection was owned by Mr. Lohse's brother (the "adjacent land").

Historically, in years of heavy rainfall, the low areas of Mr. Lohse's land and the adjacent land would collect water and form sloughs. Notably, large amounts of water would collect around the northeast corner of the adjacent land where it meets the T-intersection.

In the summer of 2013, a councillor for the Defendant received complaints from landowners regarding the large water buildup in that area. When he attended the area, the councillor observed that the water level was within three or four inches of the road's surface. The councillor raised the issue with the Defendant's other councillors, who shared the fear that the road may get washed out. The decision was therefore made to install a culvert beneath the road.

Installation of the culvert began on the morning of August 12, 2013, and was concluded around noon. As a result of its installation, a large amount of water rushed through the culvert northward onto Mr. Lohse's farmland. Mr. Lohse was never notified of the Defendant's intention to install the culvert. Within an hour, Mr. Lohse approached the councillor on site and remarked that he would be hearing from Mr. Lohse's lawyer.

Mr. Lohse was concerned about the potential damage this flooding would cause to his land. He was aware that there was an unusually high level of precipitation leading up to the 2013 crop growing season. However, he had been travelling that road for 40 years and had never seen it washed out. As such, he did not believe the culvert was necessary. He also contended that the large volume of water on the adjacent land would have benefited his brother's cattle ranching operations.

Mr. Lohse indicated that if he would have received notice of the Defendant's' intention to install the culvert, he could have proposed a more appropriate alternative. He pointed out the existence of a second slough on the adjacent land into which the Defendant could have drained the water via trench or pump.

Mr. Lohse testified that nine acres of his land were immediately flooded upon installation of the culvert, eight acres of which were normally seeded with organic crops. With those areas under water, Mr. Lohse could not effectively address the weeds growing on them, which were about to go to seed. He consequently foresaw substantial long-term weed control issues. Furthermore, in the spring of 2014, the eight acres were still not dry enough to be seeded. There was also a large alkali deposit on the affected acres.

According to Mr. Lohse, the estimated cost of the corresponding crop loss in 2014 was $6,289, less input costs.

Mr. Lohse admitted under cross-examination that the affected land was too wet to seed in 2013, prior to installation of the culvert. He further admitted that he typically seeds areas every second year, and that in 2014 the affected land was not actually scheduled to be seeded. However, he explained that because of his inability to seed in 2013, he intended to seed in 2014.

Mr. Lohse brought a claim against the Defendant for compensatory and punitive damages based on statutory non-compliance, negligence and trespass. The Defendant responded that Mr. Lohse's claim was statute-barred, and that he failed to establish liability as alleged.

Decision: Wiegers, J. dismissed Mr. Lohse's claim, finding that it was statute-bared.

Wiegers, J. referred to s 344(1) of the Saskatchewan Municipalities Act, which precludes an action against a municipality which is initiated over one year "from the time when the damages were sustained" [at para. 15]. In other words, a plaintiff in Saskatchewan has one year from the date in which damages were sustained to file and serve a Statement of Claim upon a defendant municipality.

Mr. Lohse's land was flooded on August 12, 2013. His Statement of Claim was issued on September 24, 2014, and was not served on the Defendant until November 20, 2014. This date was one year and 100 days after the installation of the culvert.

Wiegers, J. noted, however, that the limitation period under the Municipalities Act did not necessarily begin on the date the culvert was installed. He explained that limitations periods generally begin on the date in which the plaintiff discovered, or ought to have discovered, the cause of action, having exercised due diligence [at para. 17]. This is known as the "discoverability principle."

Wiegers, J. further explained that the discoverability principle is typically read into statutory limitation periods, unless clear statutory language displaces it [at para. 17]. Where a defendant raises the limitation period as a defence, the plaintiff bears the onus of establishing the date in which the cause of action was discoverable, that the limitation period should be extended based on that date, and that the claim falls within the adjusted limitation period [at para. 17].

Mr. Lohse's position was that the damage he suffered was his inability to grow crops on the flooded land in 2014. He argued that his cause of action was therefore not discoverable until the spring of 2014, when it became obvious that the affected land was too wet to seed. Thus, he submitted that the limitation period commenced at that point in time.

Conversely, the Defendant argued that the limitation period commenced on August 12, 2013, because that was the date in which Mr. Lohse became aware that the installation of the culvert had caused the flooding and the corresponding damage to his land. The Defendant argued in the alternative that the limitation period commenced no later than October 28, 2013, when Mr. Lohse had filed a claim against the Defendant with the Saskatchewan Association of Rural Municipalities.

Wiegers, J. reduced the issue to a single question: "how much detail regarding his or her damages must a plaintiff possess before the damage has been discovered?" [at para. 20].

Relying on the Supreme Court of Canada decision, K(M) v H(M), 1992 CanLII 31, Mr. Lohse argued that a plaintiff must have a "substantial awareness" of his or her damage. In K(M) v H(M), the plaintiff had suffered continuous abuse from her father between the ages of 8-17 years old, but only commenced legal proceedings against him when she was 28 years old. However, the Court held that it was only when the daughter had undergone therapy in her 20s that she came to understand that her father was responsible for her damage. Based on the facts in that context, the Court held that the limitation period only began upon that understanding occurring.

Wiegers, J., however, held that Mr. Lohse's reliance on K(M) v H(M) was misplaced. He found that in that case the connection between the abuse and the damage was only perceived by the plaintiff well after the abuse occurred. In contrast, Wiegers, J. found that Mr. Lohse was "a clear-minded adult with abundant farming experience" and therefore was quite able to perceive the connection between the installation of the culvert and the risk of damage to his lands [at para. 23].

Wiegers, J. also drew attention to another Supreme Court of Canada decision, Peixeiro v Haberman, 1997 CanLII 325, in which the Court noted that a plaintiff need not know the exact extent of the damage suffered, only that some damage had occurred as a result of the defendant's actions..

Accordingly, Wiegers, J. found that Mr. Lohse knew that he had suffered some damage on August 12, 2013, when his land was flooded [at para. 27]. Indeed, Wiegers, J. noted that Mr. Lohse immediately indicated to the councillor on site that he was contemplating legal action, and promptly admitted to being concerned about the damage. Even in his Statement of Claim, Mr. Lohse suggested that he was aware his land was damaged when the flooding occurred, and argued that the Defendant ought to have anticipated that damage as well.

Wiegers, J. further held that if Mr. Lohse did not discover his cause of action on August 12, 2013, then he did by October 28, 2013, when he filed his claim with the Saskatchewan Association of Rural Municipalities. The content of that claim was found to clearly support the fact that Mr. Lohse understood he had suffered damage as a result of the flood by that date [at para. 30]. Wiegers, J. also held that a farmer with 42 years of experience would very much understand the relationship between uncontrolled weeds and crop yield, and therefore he did not require more specific knowledge [at para. 30].

Wiegers, J. also commented that if the Court were to accept Mr. Lohse's argument, it would allow him to commence a claim against the Defendant in the future whenever he is able to connect some form of damage to the August 12, 2013 flood [at para. 32]. Wiegers, J. noted that this would effectively render the limitation period meaningless.

In conclusion, Wiegers, J. held [at para. 33]:

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