Canada: Agriculture Law Netletter - February 21, 2017 - Issue 366

HIGHLIGHTS

* A Justice of the New Brunswick Court of Appeal has granted a permanent injunction enjoining a cattle farmer from piling or spreading manure within 300 metres of a neighbouring land owners' residence; from feeding or pasturing cattle on certain lands adjoining the neighbour's property, and from allowing cattle to escape onto the neighbour's property. The New Brunswick Farm Practices Review Board had previously concluded that some of the farmer's practices were not "acceptable farm practices". The Court also found that the farmer's actions constituted a deliberate intent to harass the plaintiffs and awarded damages the plaintiffs damages for the loss of the enjoyment of their property and exemplary/punitive damages. (Gallant v. Murray, CALN/2017-035, [2017] N.B.J. No. 6, New Brunswick Court of Queen's Bench)

* A Justice of the Saskatchewan Court of Queen's Bench has interpreted a holograph Will which made bequests of "farming assets" and "personal assets" for the purpose of determining what assets fell within the category of "farming assets" and what assets fell within the category of "personal assets". The Court summarizes Saskatchewan case law and statute law concerning the principles which apply to the interpretation of Wills including the rules to be followed in attempting to determine the intention of a testator if the language of a Will is ambiguous. In this case, farm land, farm equipment (including trucks, tools, grain bins and buildings) and grain and fuel inventory were found to be farming assets. It was also directed that debts owing with respect to these assets be paid from the assets. (Ellingson Estate v. Ellingson Estate, CALN/2017-036, [2017] S.J. No. 10, Saskatchewan Court of Queen's Bench)

NEW CASE LAW

Gallant v. Murray;

CALN/2017-035,

Full text: [2017] N.B.J. No. 6;

2017 NBQB 13,

New Brunswick Court of Queen's Bench,

G.S. Rideout J.,

January 19, 2017.

Right to Farm Legislation -- Nuisance -- Trespass -- Damages -- Punitive Damages.

David and Joan Gallant (the "Gallants") sued Lee and Shirley Murray (the "Murrays") for a permanent injunction and damages with respect to an alleged nuisance and trespass.

The Gallants reside on a residential property at Indian Mountain, New Brunswick.

The Murrays own agricultural property which surrounds the Gallant property on 3 sides.

The Murrays raise beef cattle on their property.

The Gallants made a number of complaints concerning the Murrays including the following:

  1. That the Murrays had purposely placed a pile of manure on the Murray property, immediately adjacent to the Gallants' house and left it there for 11 months. The equipment used to pile the manure was operated during daytime and evening hours and at 4:00 a.m. on a couple of occasions.
  2. The noise from cattle mooing.
  3. Cattle escaped from the Murray property and damaged the Gallants' property with hoof prints and by damaging shrubs.
  4. A portion of the manure pile was placed so close to the Gallant property that some of it spilled onto their property.
  5. The manure pile was in close proximity to both the garage and the residence and increased the nuisance impact of odours.

The Gallants made a complaint to the New Brunswick Farm Practices Review Board pursuant to s. 13 of the Agricultural Operations Act which provides:

Application containing complaint

13(1) A person who is aggrieved by any odour, noise, dust, vibration, light, smoke or other disturbance resulting from an agricultural operation may make an application in writing to the board on a form provided by the board for a determination as to whether the odour, noise, dust, vibration, light, smoke or other disturbance results from an acceptable farm practice.

The Board concluded:

  1. That the disturbances from farm equipment noise and cattle noise resulted from acceptable farm practices.
  2. The disturbances from roaming cattle resulted from unacceptable farm practices.
  3. The disturbances of odours from the placement of manure resulted from unacceptable farm practices.
  4. There was no evidence to support the Murrays' choice to put manure in this location, and to leave it there for 11 months.

At a summary trial, a complaint was also made regarding the Murrays' practice of blowing snow, rocks and manure onto the Gallant property, with a snowblower.

Decision: Rideout, J. awarded a permanent injunction which enjoined the Murrays from entering the Gallant property, piling or spreading manure anywhere within 300 metres of the Gallant residence or 60 metres from the Gallant property; feeding or pasturing cattle on the part of the property as the "access lot"; from feeding or pasturing cattle within 60 metres from any part of the Gallant property; from blowing or otherwise moving snow, rocks, manure and any other substance onto the Gallant property; from allowing cattle, dogs or other domesticated animals to escape from the Murray property onto the Gallant property, and from communicating with the Gallants except in writing [at para. 21].

Rideout, J. also awarded the Gallants special damages for the appearance before the Farm Practice Review Board as well as general damages of $5,000.00 for the Gallants' loss of enjoyment of their property and $10,000.00 as exemplary and punitive damages [at para. 24].

Rideout, J. relied on Reference re s. 27 of the Judicature Act (Alberta), 1984 CanLII 31 SCC: [1984] 2 SCR 697 with respect to the common law of trespass; and Drysdale v Dugas 1896 CarswellQue 5 with respect to nuisance caused by noise and odours from a livery stable in a residential district.

With respect to the manure pile, Rideout, J. concluded [at para. 19] that the manure was piled close to and sometimes on the Gallant property; that it was left there for many months; that it had been found to be an "unacceptable farm practice" and that it had been piled there by the Murrays to make the Gallants' "lives miserable". There were other places where the manure could have been piled which would not have caused the odour problem.

Rideout, J. concluded [at para. 20] that the blowing of rocks and snow appeared to have been deliberate and he had little doubt that the escape of cows was initiated by the Murrays to inflict fear, nuisance and harassment.

Rideout, J. concluded that the Murrays' conduct was willful and reprehensible and that exemplary/punitive damages were warranted [at para. 22].

Ellingson Estate v. Ellingson Estate;

CALN/2017-036,

Full text: [2017] S.J. No. 10;

2017 SKQB 14,

Saskatchewan Court of Queen's Bench,

D.P. Ball J.,

January 13, 2017.

Wills -- Holograph Hills -- Interpretation -- "Farming Assets".

Paul Ellingson ("Paul") died on March 14, 2009 at 60 years of age in a farm accident. He had no spouse and no children and was survived by his 95 year old mother, Helen Ellingson ("Helen), his brother Mike Ellingson ("Mike"), Mike's wife, Cynthia Ellingson ("Cynthia") and his sister, Kaye Evans ("Kaye"). Following his death the family discovered a holograph Will dated March 22, 1992.

The Will reads as follows:

March 22, 1992

Last Will and Testament of Paul Ellingson

I leave all my farming assets to Mike and Cynthia Ellingson.

I leave 50% of my personal assets to Mike and Cynthia E.

I leave 50% of my personal assets to my sister Kaye Evans.

All household personal assets (those that Mom can use) I leave to her.

"Paul Ellingson"

Because the holograph did not appoint an Executor to administer the Estate, Letters of Administration with Will annexed were granted to Mike, Cynthia and Kaye. The assets of the Estate were listed at $1,748,995.00 and debts were listed at $871,776.00.

The assets included farm land, farm equipment, grain and fuel inventory, bank accounts, a Government of Canada AgriInvest Program credit and personal effects. The Estate's debts included income tax, a land mortgage, equipment loans, a debt to Canadian Agriculture Income Stabilization, and a debt owing to Helen of $97,600.00.

The debt was a loan advanced by Helen to Paul to allow him to purchase farm land.

On July 11, 2011, a Court Order was granted directing a trial of an issue to identify the assets and liabilities of the Estate and to interpret the holograph Will. The Order, among other things, directed the interpretation of the words "farming assets", "personal assets", and "household personal assets" and which assets of the Estate fell within these terms. It also directed the determination of which debts from the Estate should be paid from specific Estate assets.

Decision: Ball, J. made a number of directions [at para. 131] including the following:

  1. That the words "all my farming assets" includes all farm land, all farm implements, equipment, trucks, tools, buildings, fuel; and all unsold grain on hand at the date of death.
  2. "Personal assets" includes all household effects located in Paul's home, motor vehicles and the balance in personal bank accounts.
  3. "Household personal assets (those that Mom can use)" gives Helen a first right of refusal to receive any of the household assets she might choose.
  4. Insufficient evidence was lead to determine how farm subsidies and other payments from government and/or crop insurers and surface lease annual rentals should be categorized.
  5. The beneficiaries of the farm land are primarily responsible for the payment of any mortgage registered against the farm land and that the beneficiaries of the farm implements were also intended to be primarily responsible for payment of loans owing on the equipment they received. The beneficiaries of the unsold grain were intended to be primarily responsible for income tax arising from the sale or deemed distribution of grain on hand required to indemnify the Estate for this liability.

Ball, J. commented, at para. 20 that:

[20] The court's only objective in interpreting a will is to ascertain and give effect to the intention of the testator, as expressed by the language of the will, at the time the will was executed...

Ball, J. then quoted extensively from the decision of Tholl, J. in Markowsky v Markowsky, 2014 SKQB 261, 453 Sask R 220 in which the following principles were referred to:

  • The duty of the Court is to ascertain the intention of the testator in the whole will taken together. Every word is to be given its natural and ordinary meaning and if technical words are used, they are to be construed in their technical sense unless from consideration of the whole will it is evident the testator intended otherwise.
  • Where language is ambiguous, the Court is entitled to consider not only the provisions of the will, but also the circumstances surrounding and known to the testator at the time he made the will, and adopt the meaning most intelligible and reasonable as being his intention.
  • A clear gift in a will is not to be cut down by anything subsequent which does not with reasonable certainty indicate the intention of the testator to cut it down.
  • The question is not what the testator meant to do when he made his will but what the written words he uses mean.
  • The Court is entitled to sit in the testator's armchair however the Court is not entitled to make a fresh will for the testator merely because it strongly suspects the testator did not mean what was plainly said.

Ball, J. also referred to s. 24 of the Wills Act which provides:

24 Unless a contrary intention appears in the will, every will is to be construed, respecting the real and personal property comprised in it, to speak and take effect as if it had been executed immediately before the death of the testator.

Ball, J. then indicated that in determining whether a contrary intention appears in a will, the Court must consider the entire will in light of the surrounding circumstances known to the testator at the time he made his will [at para. 21] citing Ratzlaff Estate v Ratzlaff, 2002 SKCA 53, 217 Sask R 284.

If the testator's intentions are clear from the words used in the will, there is no need to apply rules of construction [at para. 22]. However there is a presumption against intestacy and a presumption that every word or phrase used by the testator was intended to have a meaning [at para. 22] citing Bank of Nova Scotia Trust Company v Armstrong, 2012 SKQB 342, 403 Sask R 253.

With respect to the debts owing by an Estate, in the absence of evidence to the contrary, there is a common law presumption that the testator who bequeaths a specific chattel encumbered by a debt intends the debt be paid out of the general assets of the Estate [at para. 23]: Patry Estate v Robinson, 2003 ABQB 707, 336 AR 194. However this presumption does not apply to land encumbered by a mortgage by virtue of s. 35(1) of the Saskatchewan Wills Act which requires that gifts of land are subject to mortgages registered against the land.

Ball, J. considered, in significant detail, the evidence concerning the circumstances known to the testator at para. 24 to 50.

Ball, J. concluded that Paul's land was a "farming asset" [at para. 53 to 64] and that Mike and Cynthia were primarily responsible for the payment of the mortgage on this land. Arguments that Paul could not have intended to leave all of his farm land to Mike because Paul was a fair man, and that he had a history of renting land, that there was enough uncertainty that the farm land should be treated as residue were rejected.

Ball, J. held that farm implements, equipment, trucks, tools, buildings and fuel were also farm assets and that because the bequest was not with respect to a specific chattel, the surrounding circumstances suggest Paul intended the debts on 2 pieces of equipment to be paid from Mike and Cynthia's distributed share of the Estate.

With respect to unsold grain on hand having a value of $296,800.00, Ball, J. concluded that this grain also was a farming asset but that Paul intended that any tax liability on the grain should be paid. Ball, J. concluded [at para. 74 to 81] that insufficient evidence was lead to determine whether farm subsidy programs and income from surface leases should be considered a "farming asset" or a "personal asset" and allowed the parties to present evidence and further submissions with respect to these assets.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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