SUPREME COURT OF Nova Scotia
Citation: 3311876 Nova Scotia Limited v. Trenton (Town), 2023 NSSC 60
Date: 20230216
Docket: SP No. 509509
Registry: Pictou
Between:
3311876 Nova Scotia Limited
Plaintiff
v.
The Town of Trenton
Defendant
Decision
| Judge: |
The Honourable Justice Frank P. Hoskins |
| Heard: |
June 6, 2022, in Pictou, Nova Scotia |
| Counsel: |
Sydney Hull, for the Plaintiff Natasha Puka, for the Defendant |
By the Court:
INTRODUCTION
[1] This is an appeal from the decision of Small Claims Court Adjudicator Raffi A. Balmanoukian, which is reported at 2021 NSSM 32.
[2] The Claimant/Appellant, 3311876 Nova Scotia Limited, (the “Appellant”) owns a rental property at 334 North Main Street, Trenton, Nova Scotia. The property is bounded by the Lowden Brook located at North Main Street, Trenton.
[3] On January 20, 2020, the Appellant commenced a claim against the Respondent, the Town of Trenton, (the “Town”) for compensation for property damage and loss of rental revenue resulting from water that overflowed from the Lowden Brook and flooded the Appellant’s property after significant rain on two occasions, in January and July 2019 (“the flooding events”).
[4] At the hearing, the Appellant was self-represented by its corporate principal, who is not a lawyer. The Town was represented by legal counsel.
[5] The Appellant argued at the hearing that the Town knew of the inadequate culvert and did nothing about it. Having repeatedly prioritized, then deferred, the project, the Town did not follow its own rules, and thus breached the “operational duty of care” at common law.
[6] The Town refuted the claim, by arguing that the decisions to defer the culvert were “policy decisions” and therefore immune from liability for negligence under the common law. In addition, the Town argued that it was immune from liability pursuant to the Municipal Government Act, S.N.S. 1998, c. 18 (“MGA”).
[7] In dismissing the claim, the Adjudicator stressed that he was doing so “with considerable empathy for the Claimant and reluctance from a fairness perspective”. He dismissed the claim because he concluded that the Town’s decision to defer the project was a “policy decision”, not an “operational decision” and the Claimant failed to establish a lack of bona fides decision making by the municipal authorities. He expressed the view that “the statutory protections in the MGA are irrelevant, except to the extent it may colour the very existence of a duty of care at law; if however the Town is liable ‘but for’ statutory protections, the latter require examination, given principles of statutory interpretation.”
[8] In concluding that the Town has statutory immunity under the MGA, he, again, emphasized that “as dissatisfying as it may be from a fairness perspective”, he was bound to conclude that the Town had statutory immunity.
Grounds of Appeal
[9] It is from that dismissal the Appellant appeals. The Appellant raised four grounds of appeal:
(a) The Adjudicator erred in law in finding the Town was not negligent;
(b) The Adjudicator erred in law in failing to consider and make a determination on the Respondent’s liability for nuisance;
(c) The Adjudicator erred in law in his interpretation of Section 513(1) of the Municipal Government Act; and
(d) The Adjudicator erred in law in his interpretation of Section 514(a) and his failure to consider section 514(b) of the Municipal Government Act.
[10] The Appellant raised a fifth ground of appeal, that the Adjudicator erred in law and failed to follow the requirements of natural justice, but abandoned it.
[11] Following the filing of the Notice of Appeal, Adjudicator Balmanoukian prepared the required documentation pursuant to s. 32(4) of the Small Claims Court Act, R.S.N.S. 1989, c. 430, including a Summary Report dated October 14, 2021, his written reasons for decision and order of the same date. The Summary Report states:
1. On June 7 and 8, and July 14, 202, I adjudicated a claim between the above-named parties, a copy of which is attached hereto.
2. On the attached page, I set out for the consideration of this Honourable Court a summary report of findings of law and fact made in the case on appeal including the basis of findings raised in the Notice of Appeal and any interpretation of documents made by me, and a copy of the written reasons for my decision, if any.
[12] Attached to the Summary Report is a one-page document which states:
1. I attached a copy of my decision issued September 7, 2021, and which is reported as 2021 NSSM 32. I do not believe it appropriate to revisit the decision thorough the lens of the notice of appeal (see Langille v. D.C. Wolfe Enterprises Ltd. (1987), 79 NSR (2d) 93 (SC, AD) at paras. 7-12), or provide advocacy for the Respondent through the modality of a stated case, when there has been a prior written decision. My findings of fact and law are contained in my reported decision for consideration by this Honourable Court.
2. I will only add that the second ground of appeal noted by the Appellant, namely, “failing to consider and make a determination regarding nuisance…a cause of action that was before him” may be considered by this Honourable Court in light of the statement of claim herein. Nuisance was not pleaded in that statement of claim. If nuisance had been pleaded or argued, my conclusion as contained in the reported decision would not have been affected.
[13] This document will be addressed later in these reasons.
Issues
[14] The appeal raises the following issues:
1. What is the standard of review?
2. Did the Adjudicator err in law in his negligence analysis?
• Did the Adjudicator err in law in his analysis of operational vs. policy decisions?
• Did the Adjudicator err in law in his analysis of bona fide decision-making?
3. Did the Adjudicator err in law by not considering and making a determining on nuisance?
• Was the Adjudicator obligated to consider the tort of nuisance?
4. Did the Adjudicator err in law in his interpretation of ss. 513, 514 and 515 of the Municipal Government Act?
[15] Section 2 of Small Claims Court Act defines the purpose of the legislation:
2. It is the intent and purpose of this Act to constitute a court wherein claims up to but not exceeding the monetary jurisdiction of the court are adjudicated informally and inexpensively but in accordance with established principles of law and natural justice.
[16] The Small Claims Court Act provides an appeal as of right to the Nova Scotia Supreme Court. Section 32(1) sets out the available grounds of appeal:
32(1). A party to proceedings before the Court may appeal to the Supreme Court from an order or determination of an adjudicator on the ground of
(c) failure to follow the requirements of natural justice, by filing with the prothonotary of the Supreme Court a notice of appeal.
Standard of Review
[17] In the context of Small Claims Court Appeals the leading case on what constitutes an error of law is Brett Motors Leasing Ltd. v. Welsford (1999), 181 N.S.R. (2d) 76, [1999] N.S.J. No. 466 (S.C.), where Saunders J. (as he then was) wrote:
[14] One should bear in mind that the jurisdiction of this Court is confined to questions of law which must rest upon findings of fact as found by the adjudicator. I do not have the authority to go outside the facts as found by the adjudicator and determine from the evidence my own findings of fact. "Error of law" is not defined but precedent offers useful guidance as to where a superior court will intervene to redress reversible error. Examples would include where a statute has been misinterpreted; or when a party has been denied the benefit of statutory provisions under legislation pertaining to the case; or where there has been a clear error on the part of the adjudicator in the interpretation of documents or other evidence; or where the adjudicator has failed to appreciate a valid legal defence; or where there is no evidence to support the conclusions reached; or where the adjudicator has clearly misapplied the evidence in material respects thereby producing an unjust result; or where the adjudicator has failed to apply the appropriate legal principles to the proven facts. In such instances this Court has intervened either to overturn the decision or to impose some other remedy, such as remitting the case for further consideration.
[Emphasis added]
[18] Saunders J. concluded that:
[16] There was a great deal of evidence on this point during the adjudication. This pivotal issue was faced squarely by the adjudicator, as is reflected in both his Order and his Summary. He found, from the evidence, that the Appellant was outside the six year prescription as set out in Section 2(1)(e) of that Act. … In coming to the decision that the act of repossession triggered the enforcement of Brett Motors' cause of action, it cannot be said that the learned adjudicator reached an unreasonable or untenable conclusion. I would therefore dismiss this ground of appeal.
[Emphasis added]
[19] It is generally recognized in the authorities relating to appeals on the record that a high level of deference must be accorded to the trier of fact, and that any material finding of fact that is based on “palpable and overriding error” constitutes an error of law: McPhee v. Gwynne-Timothy, 2005 NSCA 80, at paras. 31-33. Moir J. in Hoyeck, articulated a somewhat different approach in the Small Claims context, which does not involve a review Small Claims Court findings of fact for palpable and overriding error, but rather involves a review for error of law that extends to situations where there is no evidence to support the conclusions reached by the Adjudicator. It seems that Moir J’s approach recognizes the distinctive aspects of the Small Claims Court appeal regime. He wrote:
[23] We do not review Small Claims Court findings of fact for palpable and overriding error. Our jurisdiction to review for error of law may extend to the situation "where there is no evidence to support the conclusions reached": Brett at para. 14. That would have to be apparent from the summary.
[24] In conclusion on this point, fact-finding in Small Claims Court is only reviewed when it appears from the summary report and the documentary evidence that there was no evidence to support a conclusion. An insufficient summary may attract review on the third ground, fairness, but it is not insufficient just because it is less satisfying than a transcript.
[20] In several decisions of this Court, Justice Moir’s approach to the standard for review for Small Claims Court appeals has been endorsed and applied, such as in The Rendezvous Sports Bar and Lounge v. On Shore Construction Ltd., 2020 NSSC 319, where Keith J’s observations are apposite. He said, at footnote 1:
There is some question as to whether “palpable and overriding error” also constitutes an error of law in the context of a Small Claims Court appeal. LeBlanc, J. summarizes the debate at paras. 34 -36 of C.M. MacNeill and Associates v Toulon Developments 2016 NSSC 16. I prefer the analysis in Hoyeck v. Maloney, 2013 NSSC 266. In my view, it better accords with the statutory goals of the Small Claims Court as an efficient and economical forum to resolve disputes within a defined monetary limit. Moreover, importing the concept of a “palpable and overriding error” into a Small Claims Court appeal risks confusing or conflating the jurisprudence from other appeal proceedings which occur under very different circumstances. For example, appeals which are not brought under the Small Claims Court Act are obviously not subject to the statutory principles and procedures uniquely created for Small Claims Court proceedings – including the express legislative goal of inexpensive and informal adjudication (section 2 of the Act). The appeal record in a Small Claims Court appeal is also very different and does not include an actual recording of the original hearing. The judge hearing a Small Claims Court appeal is much more dependent on the written reasons and report prepared by the Adjudicator.
[21] While there may be a divergence of opinion as to whether this Court should review Small Claims Court findings of fact for palpable and overriding error, it is clear, as Justice LeBlanc stated in C.M. MacNeil & Associates v. Toulon Development Corporation, 2016 NSSC 16, at para. 37, that this Court may find an error of law where there was no evidence to support the conclusions reached. As Moir J. pointed out in Hoyeck, at para. 23, this would have to be apparent from the summary.
Summary of the Adjudicator’s Factual Findings
[22] Adjudicator Balmanoukian provided a comprehensive and thoughtful decision, which is 33 pages in length. He stated that he had reviewed extensive materials provided by the Claimant and incorporated them into his decision.
[23] The facts that the Adjudicator relied on to determine liability are found, in part, at para. 15 of his decision, wherein he wrote:
- The Town was aware of the problem well before the 2019 events.
- Various third-party studies, whether engaged volitionally by the Town or by being “frogmarched” into participation therein by the Provincial Government, corroborated this fact, and that the culvert should be a priority for repair.
- The Town of Trenton, to put it bluntly, is broke from an operational perspective, although it appears to have borrowing capacity (in the sense that its long-term debt is below provincial governance thresholds). Its capital infrastructure budget is similarly constrained.
- The Town is an old one. It has a storied past, but like many Towns built on steel or other heavy industry, it has seen more prosperous days. With the vicissitudes of time, its infrastructure is aged and in places beyond the end of its economic life; these converge to make for a municipal budget wholly inadequate to make anything but a small dent in the ‘wish list’ annually, even under the best management.
- The Town did have at least some access to some funds at other levels of government, most particularly the Municipal Rural Infrastructure Fund. Again, to cut a long story short, regulatory and environmental conditions and the ‘strings attached’ in terms of timing and scope of project resulted in the Town resiling from this enterprise.
- Town governance, both electoral and administrative, was questioned at various stages of the proceeding; a study presented by the Claimant also raised concerns.
- The uncontradicted evidence is that the Town periodically visited, and deferred, the issue of the culvert and the resultant flooding. While again I do not intend to give short shrift to the extensive evidence on the point, the so-called “Dillon Study,” the Municipal Climate Change Action Plan, the Storm Sewer Separation Project, and the Town’s own planning strategies and corporate plan all reach fundamentally the same conclusions. The Claimant succinctly summarizes these at its Tab 27. The topographic evidence is that the area in question is neither flat nor steep so as to call for special attention.
[24] The Adjudicator found that the Town was aware of the Lowden Brook culvert inadequacies well before the flooding events in 2019 and knew that the culvert should be a priority for repair. The Adjudicator also found that the Town was old and “broke from an operational perspective” and had many failing infrastructure projects. He accepted that the Town would only be able to make a dent in their project “wish list”. The Adjudicator held that the Town had periodically considered the Lowden Brook culvert replacement but deferred the project. The Town had considered funding from different levels of government but ultimately chose not to pursue them due to regulatory, environmental, and timing concerns.
[25] The Adjudicator considered four (4) issues in deciding the claim:
1. Was the Town negligent in failing to replace the Lowden Brook culvert?
2. Did Section 513(2) of the Municipal Government Act provide a statutory exemption to the Town?
3. Did Section 514 of the Municipal Government Act provide a statutory exemption to the Town?
4. Did Section 515 of the Municipal Government Act provide a statutory exemption to the Town?
[26] The Adjudicator first considered common law liability for negligence. He stressed that if the Town was not negligent then the statutory provisions were irrelevant, but if the Town was liable “but for” statutory exemptions, then the provisions would need to be reviewed in detail.
[27] As background for my determination of the issue on appeal, I will first review the law governing municipal liability.
The Application of Anns/Cooper
[28] It is trite law that a duty of care could arise in any situation where there was sufficient proximity between the parties that harm to the plaintiff was reasonably foreseeable. This so-called “Neighbour Principle” was explained in the seminal case of Donoghue v. Stevenson, [1932] A.C. 562 (H.L.), where Lord Atkin outlined a general conception of relations giving rise to a duty of care. This principle can be succinctly expressed as follows:
You must take reasonable care to avoid acts or omissions which you can reasonably foresee would likely to injure your neighbour. Your neighbour is a person or persons who are so closely and directly affected by your act that you ought reasonably to have them contemplated as being affected when you are directing your mind to the acts or omissions which are called in question (Donoghue v. Stevenson at p. 580).
[29] Generally, the neighbour principle ought to apply unless there is some justification or valid explanation for its exclusion. (Home Office v. Dorset Yacht Co. Ltd., [1970] 2 All E.R. 294 (H.L.)) Lord Wilberforce in Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), articulated a two-stage test which has been approved and applied by Canadian Courts.
[30] In the authoritative text The Law of Torts in Canada, 4th edit., c. 2020 Thomson Reuters Canada Limited, at p. 367, ( The Law of Torts in Canada) the authors observed that the Anns test has undergone substantial interpretation and revision in the past two decades as exemplified in Cooper v. Hobart, [2001] 3 S.C.R. 537, where the Court reiterated the two-stage test to the duty question, but placed strong emphasis on the requirement of proximity. The test was summarized as follows:
[30] In brief compass, we suggest that at this stage in the evolution of the law, both in Canada and abroad, the Anns analysis is best understood as follows. At the first stage of the Anns test, two questions arise: (1) was the harm that occurred the reasonably foreseeable consequence of the defendant's act? and (2) are there reasons, notwithstanding the proximity between the parties established in the first part of this test, that tort liability should not be recognized here? The proximity analysis involved at the first stage of the Anns test focuses on factors arising from the relationship between the plaintiff and the defendant. These factors include questions of policy, in the broad sense of that word. If foreseeability and proximity are established at the first stage, a prima facie duty of care arises. At the second stage of the Anns test, the question still remains whether there are residual policy considerations outside the relationship of the parties that may negative the imposition of a duty of care. It may be, as the Privy Council suggests in Yuen Kun Yeu, that such considerations will not often prevail. However, we think it useful expressly to ask, before imposing a new duty of care, whether despite foreseeability and proximity of relationship, there are other policy reasons why the duty should not be imposed.
[31] The test for the duty of care therefore involves three main elements: foreseeability, proximity, and so-called “residual” policy considerations (The Law of Torts in Canada at p. 368).
[32] In Childs v. Desormeaux, [2006] 1 S.C.R. 643, the Supreme Court of Canada clarified which party bears the burden of proof at each stage of the test. The Court held:
[13] The plaintiff bears the ultimate legal burden of establishing a valid cause of action, and hence a duty of care: Odhavji. However, once the plaintiff establishes a prima facie duty of care, the evidentiary burden of showing countervailing policy considerations shifts to the defendant, following the general rule that the party asserting a point should be required to establish it.
[33] Thus, if the plaintiff has shown sufficient foreseeability and proximity to establish a prima facie duty at the first stage of the test, then it shifts to the defendant to raise residual policy considerations that may negate the duty of care (The Law of Torts in Canada at p. 368).
[34] As stressed in The Law of Torts in Canada, the Anns/Cooper test simply provides a “methodological framework” which ensures that all relevant factors have been examined” (at p. 369).
[35] In the case at bar, the Adjudicator considered the Anns /Cooper test. In essence, he concluded that the Appellant had shown sufficient foreseeability and proximity to establish a prima facie duty at the first stage of the test, which is “a relatively low threshold” (Ryan v. Victoria (City), [1999] 1 S.C.R. 201, at para. 23).
[36] Having reach that conclusion, he then proceeded to the second step under the Anns/Cooper test where he considered whether there were residual policy considerations outside the relationship of the parties that might negative the imposition of a duty of care. Put differently, he considered whether there were residual public policy reasons why the duty of care should not exist (Cooper, at para. 37).
[37] The second stage of the Anns/Cooper test is concerned with the effect of creating a duty of care between the parties. Policy considerations at this stage are not concerned with the relationship between the parties, but with the effect of recognizing a duty of care on other legal obligations, the legal system and society more generally (Cooper, at para. 37).
[38] At this stage of the analysis the distinction between government policy and operational decisions must be considered. As stated in Anns:
[38] It is at this second stage of the analysis that the distinction between government policy and execution of policy falls to be considered. It is established that government actors are not liable in negligence for policy decisions, but only operational decisions. The basis of this immunity is that policy is the prerogative of the elected Legislature. It is inappropriate for courts to impose liability for the consequences of a particular policy decision. On the other hand, a government actor may be liable in negligence for the manner in which it executes or carries out the policy. In our view, the exclusion of liability for policy decisions is properly regarded as an application of the second stage of the Anns test. The exclusion does not relate to the relationship between the parties. Apart from the legal characterization of the government duty as a matter of policy, plaintiffs can and do recover. The exclusion of liability is better viewed as an immunity imposed because of considerations outside the relationship for policy reasons -- more precisely, because it is inappropriate for courts to second-guess elected legislators on policy matters. Similar considerations may arise where the decision in question is quasi-judicial…
[39] While it is not always easy to distinguish between policy and operational decisions, the principles to be applied in determining whether a decision of government or a governmental agency is one of policy or operations were set out by Cory J in Just v. British Columbia, [1989] 2 S.C.R. 1228. He wrote:
[29] In determining what constitutes such a policy decision, it should be borne in mind that such decisions are generally made by persons of a high level of authority in the agency, but may also properly be made by persons of a lower level of authority. The characterization of such a decision rests on the nature of the decision and not on the identity of the actors. As a general rule, decisions concerning budgetary allotments for departments or government agencies will be classified as policy decisions. Further, it must be recalled that a policy decision is open to challenge on the basis that it is not made in the bona fide exercise of discretion. If after due consideration it is found that a duty of care is owed by the government agency and no exemption by way of statute or policy decision-making is found to exist, a traditional torts analysis ensues and the issue of standard of care required of the government agency must next be considered.
[40] As Cory J., stated, “the dividing line between "policy" and "operation" is difficult to fix, yet it is essential that it be done (Just, at para. 17).
[41] Recently, the Supreme Court of Canada in Nelson (City) v. Marchi, 2021 SCC 41, had the opportunity to review the policy vs operational distinction, and in doing so, discussed the overarching purpose of providing a duty of care exemption for core policy decisions:
[42] The primary rationale for shielding core policy decisions from liability in negligence is to maintain the separation of powers. Subjecting those decisions to private law duties of care would entangle the courts in evaluating decisions best left to the legislature or the executive. The executive, legislative, and judicial branches of government play distinct and complementary roles in Canada's constitutional order… Each branch also has core institutional competencies: the legislative branch has the power to make new laws, the executive branch executes the laws enacted by the legislative branch and the judicial branch decides disputes arising under the laws…
[42] In delivering the judgment of the Court, Karakatsanis and Martin JJ. discussed four factors judges should review to help determine if the disputed decision was “core policy” or operational in nature. They wrote:
[60] [T]he principles and factors set out in our jurisprudence, viewed from the perspective of the underlying rationale for core policy immunity, provide a helpful contextual framework for determining whether a government decision is a core policy decision. As noted, the key focus is always on the nature of the decision. Public policy choices are clearly within the role and competence of the legislative and executive branches of government. A court must consider the extent to which a government decision was based on public policy considerations and the extent to which the considerations impact the underlying purpose of the immunity -- protecting the legislative and executive branch's core institutional roles and competencies necessary for the separation of powers.
[61] The rationale for core policy immunity should also serve as an overarching guiding principle for how to assess and weigh the factors this Court has developed for identifying core policy decisions. We will elaborate.
[62] First: the level and responsibilities of the decision-maker. With this factor, what is relevant is how closely related the decision-maker is to a democratically-accountable official who bears responsibility for public policy decisions. The higher the level of the decision-maker within the executive hierarchy, or the closer the decision-maker is to an elected official, the higher the possibility that judicial review for negligence will raise separation of powers concerns or have a chilling effect on good governance. Similarly, the more the job responsibilities of the decision-maker include the assessment and balancing of public policy considerations, the more likely this factor will lean toward core policy immunity. Conversely, decisions made by employees who are far-removed from democratically accountable officials or who are charged with implementation are less likely to be core policy and more likely to attract liability under regular private law negligence principles…
[63] Second: the process by which the decision was made. The more the process for reaching the government decision was deliberative, required debate (possibly in a public forum), involved input from different levels of authority, and was intended to have broad application and be prospective in nature, the more it will engage the separation of powers rationale and point to a core policy decision. On the other hand, the more a decision can be characterized as a reaction of an employee or groups of employees to a particular event, reflecting their discretion and with no sustained period of deliberation, the more likely it will be reviewable for negligence.
[64] Third: the nature and extent of budgetary considerations. A budgetary decision may be core policy depending on the type of budgetary decision it is. Government decisions "concerning budgetary allotments for departments or government agencies will be classified as policy decisions" because they are more likely to fall within the core competencies of the legislative and executive branches… On the other hand, the day-to-day budgetary decisions of individual employees will likely not raise separation of powers concerns.
[65] Fourth: the extent to which the decision was based on objective criteria. The more a government decision weighs competing interests and requires making value judgments, the more likely separation of powers will be engaged because the court would be substituting its own value judgment… Conversely, the more a decision is based on "technical standards or general standards of reasonableness", the more likely it can be reviewed for negligence. Those decisions might also have analogues in the private sphere that courts are already used to assessing because they are based on objective criteria.
[43] Karakatsanis and Martin JJ. emphasized that in weighing these factors, the primary focus must always be on the purpose of the immunity and the nature of the decision. Lastly, they provide a framework of analysis that includes consideration of four factors:
[68] In addition, four factors emerge that help in assessing the nature of a government's decision: (1) the level and responsibilities of the decision-maker; (2) the process by which the decision was made; (3) the nature and extent of budgetary considerations; and (4) the extent to which the decision was based on objective criteria. The underlying rationale -- protecting the legislative and executive branch's core institutional roles and competencies necessary for the separation of powers -- serves as an overarching guiding principle for how to weigh the factors in the analysis. Thus, the nature of the decision along with the hallmarks and factors that inform its nature must be assessed in light of the purpose animating core policy immunity.
[44] It should be noted that notwithstanding that the government or a governmental agency’s decision was a core policy decision, it is still open to a plaintiff to attempt to establish, on a balance of probabilities, that the core policy decision was not bona fide or was so irrational or unreasonable as to constitute an improper exercise of governmental discretion.
Bona Fide Decision-making
[45] In Brown v. British Columbia (Minister of Transportation and Highways) [1994] 1 S.C.R. 420, Cory J., writing for the majority, explained what would constitute lack of bona fide decision-making:
[28] Before attempting to apply these principles to this case a preliminary matter should be considered. At the outset, the Court of Appeal considered that it had to determine whether or not the policy was bona fide and reasonable or rational. In the vast majority of cases such a consideration will not be necessary. It will always be open to a plaintiff to attempt to establish, on a balance of probabilities, that the policy decision was not bona fide or was so irrational or unreasonable as to constitute an improper exercise of governmental discretion. This is not a new concept. It has long been recognized that government decisions may be attacked in those relatively rare instances where the policy decision is shown to have been made in bad faith or in circumstances where it is so patently unreasonable that it exceeds governmental discretion. The test to be applied when a policy decision is questioned is set out in City of Kamloops v. Nielsen, [1984] 2 S.C.R. 2 at p. 24, by Wilson J. in these words:
In my view, inaction for no reason or inaction for an improper reason cannot be a policy decision taken in the bona fide exercise of discretion. Where the question whether the requisite action should be taken has not even been considered by the public authority, or at least has not been considered in good faith, it seems clear that for that very reason the authority has not acted with reasonable care.
[46] In Just, the Supreme Court provided a useful illustration of the policy and operational distinction, encompassing an articulation of bona fide discretion in decision-making:
[22] For example, at a high level there may be a policy decision made concerning the inspection of lighthouses. If the policy decision is made that there is such a pressing need to maintain air safety by the construction of additional airport facilities with the result that no funds can be made available for lighthouse inspection, then this would constitute a bona fide exercise of discretion that would be unassailable. Should then a lighthouse beacon be extinguished as a result of the lack of inspection and a shipwreck ensue, no liability can be placed upon the government agency. The result would be the same if a policy decision were made to increase the funds for job retraining and reduce the funds for lighthouse inspection so that a beacon could only be inspected every second year and as a result the light was extinguished. Once again this would constitute the bona fide exercise of discretion. Thus, a decision either not to inspect at all or to reduce the number of inspections may be an unassailable policy decision. This is so provided it constitutes a reasonable exercise of bona fide discretion based, for example, upon the availability of funds.
The Application of the Law by the Adjudicator
[47] After identifying the proper test to establish a duty of care, the Adjudicator determined that there was a relationship of proximity between the Appellant and Respondent. Indeed, the parties do not dispute that there is a relationship of proximity between them.
[48] The parties, however, disagree on the Adjudicator’s analysis of the second stage of the Anns/Cooper test. The Adjudicator held that the decision not to replace the outdated Lowden Brook culvert was a policy decision based on the Respondent’s budgetary constraints and prioritization of other infrastructure projects.
[49] The Appellant contends that the Adjudicator erred in law by failing to consider the Respondent’s decision in the context of their Stormwater Management Plan and Prioritized Implementation Plan, arguing that these plans constituted the Respondent’s policies on stormwater management. The Appellant argues that the Respondent’s departure from these policies was an operational decision.
[50] The Respondent relies on the decision in Riverscourt Farms Ltd. v. Niagara -on-the-lake (Town), 1992 CarswellOnt 521, C.C.L.T. 231, for the premise that the decision not to allocate funds to the improvement of the firefighting water system was a policy decision. In that case, the Court held that the Town lacked the capacity to upgrade the firefighting system and the council’s decision on the allocation of the budget at a public meeting was a policy decision. Notably, Kovacs J. said:
[117] I cannot accept the submission that once council exercised its discretionary power (and thus made a policy decision) to have a fire department and a water distribution system, all subsequent council decisions in relation to their operation were in the operational sphere. To so hold is to find that the town owes a private duty of care in all cases when the water or fire system is inadequate by reason of budgetary restraints…
[51] As Kovacs J. stated, one cannot assume that all decisions made by governments under a policy are operational decisions. Rather, a constellation of relevant factors should be considered, including the nature of the decision.
[52] It should be noted that the Adjudicator did not have the benefit of considering and applying the contextual framework of analysis set out in Nelson (City) v. Marchi, as it was released after his decision. Notwithstanding that, it may be useful to apply this instructive framework of analysis, which includes consideration of the four factors set out in Nelson (City) v. Marchi, to determine if the Adjudicator erred in law.
First: The Level and Responsibilities of the Decision-maker
[53] The Town of Trenton had an elected municipal council (“town council”) that had responsibility for allocating funding and approving infrastructure projects (Adjudicator’s decision, at para. 15). The town council is the highest elected body at the municipal level (Respondents Factum, at para. 65). Town Council works in conjunction with the Chief Administrative Officer, (the CAO) who is an appointed government official who (in conjunction with town council) has authority to allocate operational funds (Adjudicator’s decision, at para. 42).
[54] The Respondent asserts that the role of Town Council includes setting the annual expenditure budget and balancing/prioritizing infrastructure projects (Respondent’s factum, at para. 64). The Appellant acknowledges that the decision-makers are democratically accountable and have a high level of authority (Appellant’s factum, at para. 36).
[55] The decision-makers in the case at bar operate at the top of the municipal government hierarchy. The town council is primarily comprised of elected individuals who make high-level decisions on budget allocation and government spending. These decisions are very close to the core functions of the executive branch of government. This factor makes it more likely that the decision regarding the Lowden Brook culvert was a core policy decision.
Second: The Process by which the Decision was made
[56] In Nelson (City) v. Marchi the Court noted that debate and deliberation by decision-makers brings the decision closer to the core policy end of the spectrum.
[57] The evidence accepted by the Adjudicator establishes that the Town knew that the culvert needed replacement since at least 2003 when “the Dillon Report” identified it (and several other infrastructure projects) as a priority for replacement (Adjudicator’s decision, at para. 15). In addition to the Dillon Report, the Adjudicator noted several other documents, (such as the Municipal Climate change Action Plan, the Storm Sewer Separation Project, the Municipal Planning Strategy, and the Secondary Planning Strategy) that highlighted the need to replace the Lowden Brook culvert (Adjudicator’s decision, at para. 15).
[58] The Respondent highlights the Adjudicator’s findings regarding the intergovernmental aspect of the decision-making process and that the Respondent’s efforts to secure funding from the Provincial government’s Municipal Rural Infrastructure Fund were halted by regulatory requirements (Respondent’s factum, at para. 69).
[59] The Adjudicator accepted evidence that the Lowden Brook culvert replacement was a significant project that would require approval from various governmental agencies (Adjudicator’s decision, at para. 44). Though not specifically referenced by the Adjudicator, it can be reasonably inferred that the culvert replacement would impact community members who travel along North Main Street, as the project would eliminate water pooling on the road, making it safer for drivers to use the road after significant weather events.
[60] While the Respondent focuses on the standard council decision-making process, the Appellant’s factum points to town council’s failure to deliberate and discuss the proposed culvert replacement, arguing that a minimum of ten years passed since the project was tabled, characterising this as a period of “oversight and silence” rather than discussion or debate (Appellant’s factum, at para. 40).
[61] In his decision, the Adjudicator summarized evidence from Cathy MacGillivray, the Respondent’s CAO from 2008- 2017 (with a brief resumption of her position in 2019). Ms. MacGillivary stated that council reviewed Public Works’ recommendations when making decisions to defer, cancel or “shelve” the Lowden Brook culvert replacement (Adjudicator’s decision, at paras. 45-46). The Adjudicator accepted that town council considered the Lowden Brook culvert replacement in relation to other infrastructure and maintenance projects. Though town council repeatedly deferred the Lowden Brook culvert replacement, the evidence indicates that council did so because they determined that the project did not require special attention. Stan Vaschal, the former director of Public Works for the Respondent, testified that he was aware of the Dillon Report but suggested it was not uncommon for a council to receive a report but not act on it as “different councils have different priorities” (Adjudicator’s decision, at para. 30).
[62] The Adjudicator’s findings suggest a decision-making process that is prospective in nature, not a reaction by employees to a specific event, as it contemplates short and long-term infrastructure projects, prioritizing some before others.
Third: The Nature and Extent of Budgetary Considerations
[63] The Adjudicator summarized evidence from multiple witnesses respecting the Respondent’s financial status. He found that the Respondent was “broke” from an operational perspective and had a similarly constrained infrastructure budget (Adjudicator’s decision, at para. 15).
[64] As stated in Nelson (City) v. Marchi, budgetary allotments for governmental departments will generally be considered policy decisions, while day-to-day budgets for individual employees will not. While the decision to defer the Lowden Brook culvert replacement does not seem to clearly fit into either category, Earl Mackenzie testified that the Respondent’s budget for all capital projects was an overall budget category and was not subdivided into specific categories of infrastructure (Adjudicator’s decision, at para. 42).
[65] The Respondent argues that the decision to shelve the Lowden Brook culvert replacement in 2009 was part of a “higher level” budgetary consideration because the Respondent’s capital budget was depleted during that time and the Respondent took multiple cost saving measures in 2009 including a salary freeze and a moratorium on accessibility projects (Adjudicator’s decision, at para. 46). Wayne Teasdale testified that there was no operating or capital reserve, and that council was obligated to raise property taxes by 17% in 2019 (Adjudicator’s decision, at para. 50).
[66] The Appellant argues that the Adjudicator gave unreasonable weight to the Respondent’s budgetary constraints. Though the Respondent’s infrastructure budget was limited, council did have some funds to utilize. The Adjudicator noted that between 2003 (when the Dillon Report was released) and the flooding events in 2019, the Respondent completed two substantial infrastructure projects, a replacement of the Smelt Brook Culvert, and a Water separation project to alleviate overflows of the sewage treatment plant (Adjudicator’s decision, at para. 27). The Appellant suggests that the completion of these projects undermines the position (advanced by the Respondent and accepted by the Adjudicator) that budgetary restrictions obstructed the culvert replacement (Adjudicator’s decision, at para. 47).
[67] The Adjudicator characterized the Respondent’s decision to undertake the two other waterworks infrastructure projects as an allocation of funding based on prioritization. The Appellant “takes issue” with the Adjudicator’s conclusion, arguing that the Lowden Brook culvert replacement was an integral part of the Respondent’s Stormwater Management Plan and that the priority sequence of the project mattered (Appellant’s factum, at para. 46).
[68] As previously mentioned, the Respondent considered borrowing money from the Provincial government, but decided against accessing that funding due to regulatory and timeline requirements (Adjudicator’s decision, at para. 15).
[69] The Adjudicator’s finding that the Lowden Brook culvert replacement was a significant project supports the Respondent’s argument that council’s decision to fund (or not to fund) the project was a high-level budgeting decision closer to department budgetary allotments rather than a day-to-day decision respecting individual employees.
[70] It would be concerning if courts analyzed each of the projects approved by town councils (and the cost associated with them) and imposed a duty of care, as this would likely raise separation of powers concerns, and lead to an increased liability for governments (at the municipal level or otherwise) who are faced with dwindling budgets and difficult decisions on what to fund. The Adjudicator acknowledged this concern by quoting Justice Brothers in Bancroft v. Nova Scotia (Lands and Forestry), 2021 NSSC 234, wherein she wrote:
[5] Elected officials on occasion make decisions, and use procedures, that leave some constituents feeling betrayed and even incensed. Where those officials exceed their power, judicial review may provide a remedy. But where the decisions are within their lawful authority, as in this case, the court cannot intervene. In such circumstances, if a remedy is sought by the public, the proper recourse in our constitutional democracy is not through the courts, but at the ballot box.
[71] It is reasonable to infer from the Adjudicator’s decision that he was keenly aware of the importance of not reviewing and substituting his own decision over that of the elected decision maker, town council. In Nelson (City) v. Marchi, Karakatsanis and Martin JJ caution courts against reviewing and substituting their own decisions (over that of the decision maker) as this would raise separation of powers concerns (at para. 65).
Fourth: The Extent to which the Decision was based on Objective Criteria.
[72] The Appellant’s factum notes that the Respondent had policies to upgrade and maintain the Town’s stormwater system which identified the need to replace the Lowden Brook culvert. These policies were based on “technical third-party reports (Appellant’s Factum, at para. 48). This fact is not in dispute, and if it were, it would not be the proper subject of an appeal. Though the studies present objective evidence on the need for replacement, the decision at issue is not whether the Lowden Brook culvert needed replacement, but the Respondent’s decision not to replace the Lowden Brook culvert despite knowing it needed replacement.
[73] After reviewing the evidence, the Adjudicator was satisfied that the Respondent had a large “wish list” of infrastructure projects that needed attention but was “broke as a joke” and had to prioritize projects with the greatest health and safety benefits, while considering regulatory compliance (Adjudicator’s decision, at paras. 15, 42, and 44).
[74] As discussed above, the Adjudicator characterized the decision not to fund the Lowden Brook culvert replacement as a series of policy decisions to prioritize other capital projects. The decision to fund those projects and not the Lowden Brook culvert replacement required council to weigh competing interests and make value judgements about what projects would bring the greatest health and safety benefits. The Adjudicator accepted evidence that the Smelt Brook culvert had partially collapsed, and the Water Separation project was prompted by climate change and pressure from the Department of Environment (Adjudicator’s decision, at paras. 28 and 29).
Conclusion on Policy vs. Operational distinction
[75] Having applied the factors in Nelson (City) v. Marchi, to the case at bar, based on the evidence that Adjudicator accepted, he was correct in reaching the conclusion that the decisions of council to defer the Lowden Brook culvert replacement in favour of other capital projects were core policy decisions and therefore exempt from the imposition of a duty of care. Although the Adjudicator did not reference the four factors in his decision or explicitly consider the “overarching rationale” for exempting core policy decision, an examination of his Decision, and the evidence that he relied on, establishes that he considered the policy vs operation distinction and implicitly applied the relevant factors throughout his Decision.
[76] Thus, the Appellant has not established that the Adjudicator erred in law on the issue of duty of care.
Lack of Bona Fide Decision-making
[77] The Appellant argues that the Respondent chose to prioritize two other projects (the Smelt Brook culvert replacement and the water separation project) even though the Lowden Brook culvert replacement had already been “committed to”( Appellant’s Factum, at para. 16). The Appellant argues this prioritization was unreasonable due to the length of time that passed between Council tabling the culvert replacement in 2009 and the flooding events in 2019 (Appellant’s factum, at para. 40).
[78] However, the Adjudicator concluded that the Respondent considered where to allocate the available funds and acted accordingly. Thus, the Adjudicator found that the Appellant did not establish a lack of bona fides (Adjudicator’s decision at para. 67). This is a factual finding, which is reasonably supported by the evidence the Adjudicator accepted.
[79] In Kamloops v. Nielsen, [1984] 2 S.C.R. 2, the Supreme Court discussed how government inaction can result in a lack of bona fide decision-making when they determined that the city of Kamloops (the City) did not make a bona fide decision when they chose not to pursue an action for a by-law infraction because one of the City’s aldermen was involved. The Court held that if there was evidence that the City had given serious consideration to possible courses of action and decided against them, they would be making a bona fide decision.
[80] The Appellant argues that the Adjudicator failed to consider the “inaction for no reason” category recognized in Kamloops, and says the Respondent’s repeated deferrals and cancelations of the Lowden Brook Replacement over a prolonged period “falls squarely into” this category (Appellant’s factum, at para. 58). The Appellant claims that after the Lowden Brook culvert replacement project was tabled in 2009 it was never seriously revisited (Appellant’s factum, at para. 42).
[81] In this case, the Adjudicator found that the Respondent had considered multiple courses of action but made the decision to allocate funding to projects that the Respondent considered more pressing. The Adjudicator found that the Respondent did routinely bring the Lowden Brook culvert replacement to town council’s attention, and that town council repeatedly deferred the replacement (Adjudicator’s decision, at para. 20). Moreover, the Adjudicator’s Decision acknowledged that the Dillon Report and other Planning Strategies/Studies marked the Lowden Brook as a priority for replacement. The Adjudicator noted, however, that the Lowden brook culvert replacement was one of a lengthy list of projects, and the topography of the area did not call for the Lowden Brook culvert to be given special attention (Adjudicator’s decision, at para. 15). On the contrary, the Smelt Brook culvert was a priority for replacement (and was replaced) because it was partially collapsed and was located on a main throughfare (Adjudicator’s decision, at para. 29).
[82] The Appellant has not met their burden of proving that the Adjudicator erred in law when he analyzed the Respondent’s budgetary concerns and prioritization of other infrastructure projects and determined that the Respondent’s decision was a bona fide exercise of discretion.
Did the Adjudicator err in law by failing to consider the Tort of Nuisance?
[83] The Appellant submits that the Adjudicator failed to consider the tort of nuisance in his decision. Although the Appellant did not specifically plead nuisance in his Notice of Claim, the Appellant contends that nuisance was raised by the parties in their pre-hearing written submissions, albeit, to a lesser extent than negligence. The Appellant also stressed that nuisance was addressed by the parties in their post-hearing submissions.
[84] The Appellant argues that the Adjudicator had an obligation to consider the tort of nuisance given the facts before him, the parties’ submissions, and the context and purpose of the Small Claims Court as established by the Smalls Claims Court Act. The Respondent acknowledges that a failure to consider a cause of action on the part of an Adjudicator is an error of law, - if the cause of action would have entitled the Appellant to the remedy claimed.
[85] In his Summary Report, the Adjudicator acknowledged that he did not consider nuisance because it was not pleaded. He also stated that a consideration of nuisance would not have affected the outcome (Adjudicator’s Summary Report, at para. 2). Although the Appellant did not specifically plead nuisance in its Form 1 (outlining its claim against the Respondent), it was raised in their written submissions before the Adjudicator and the Respondent replied to the nuisance allegation in their written submissions (Appellant’s factum at paras. 61 and 62).
[86] The Appellant argues that the Adjudicator was obligated to consider all applicable causes of that action that arise from the evidence in a hearing, especially when the Claimant is unrepresented. In support of this proposition, the Appellant relies on the decision of this Court in Nichols v. MacIntyre, 2004 NSSC 36, where LeBlanc J. confirmed that Small Claims Court adjudicators must consider all applicable causes of action that arise from the accepted facts. He wrote:
[16] The Respondents maintain that the comments in Wilson, supra, should be viewed in light of the Small Claims Court Act, which permits an Adjudicator to determine the claims of the litigants in a more informal manner than those found in the practice of the Supreme Court. This is the case provided, however, that the manner in which the hearing is conducted adheres to the principles of law and natural justice. Section 2 of the Act states:
It is the intent and purpose of this Act to constitute a court wherein claims up to but not exceeding the monetary jurisdiction of the court are adjudicated informally and inexpensively but in accordance with established principles of law and natural justice
[17] The Appellants refer to the decision of the Newfoundland Court of Appeal in Popular Shoe Store Ltd. v. Simoni, [1998] N.J. No. 57. The court reviewed the jurisdiction of an Adjudicator of the Small Claims Court to decide causes of action not specifically pleaded. At paras. 24 and 25, Green, J.A. observed:
... If a Claimant by his or her pleading or evidence states facts which, if accepted by the trier of fact, constitute a cause of action known to the law, the Claimant should prima facie be entitled to the remedy claimed if that is appropriate to vindicate that cause of action. The only limitation would be the obvious one that if the case takes a turn completely different from that disclosed or inferentially referenced in the Statement of Claim, thereby causing prejudice to the other side in being able properly to prepare for or respond thereto, the court may either decline to give relief or allow further time to the other side to make a proper response.
A Small Claims Court judge has a duty, on being presented with facts that fall broadly within the umbrella of the circumstances described in the Statement of Claim, to determine whether those facts constitute a cause of action known to the law, regardless of whether it can be said that the Claimant, as a matter of pleading, has asserted that or any other particular cause of action. Subject to considerations of fairness and surprise to the other side, if a cause of action has been established, the appropriate remedy, within the subject matter jurisdiction of the court, ought to be granted.
[87] This approach was affirmed in subsequent decisions from this Court, including: Ace Towing Ltd v TG Industries Ltd, 2008 NSSC 65, and Dennis v Langille, 2013 NSSC 42.
[88] Similarly, in Allen v. Thorne, 2007 NSSM 31, Adjudicator Parker noted the particular importance of assessing all possible causes of action when the litigant is self-represented. He stated:
[41] The premise upon which Justice Smith and Justice LeBlanc places a duty on an Adjudicator to consider all possible causes of action is result of the Small Claims Court dealing with self-represented litigants and with small amounts of money. This would presume that the Supreme Court of Nova Scotia would not require the Plaintiff's to be limited to the causes of action set out in their pleadings where the amount of money is $25,000 or less, and the litigants that appears before the Supreme Court is self-represented. I do not believe The Justices would change the rules in that set of circumstances.
[89] More recently, in RVR Concrete Inc. v. Essex Readymix Inc., 2022 ONSC 4535, Howard J. (citing another Ontario Small Claims Court appeal 936464 Ontario Ltd. v. Mungo Bear Ltd. (2003), 74 O.R. (3d) 45 (Ont. S.C.J.) discussed the differing pleading standards between Small Claims Court and the Superior Court:
[49] In 936464 Ontario Ltd. v. Mungo Bear Ltd., the court rejected the defendant/Appellant's argument that it was an error in law for a deputy judge of the Small Claims Court to have granted judgment based on quantum meruit when the claim, as pleaded, was one for breach of contract. In dismissing the appeal, Heeney J. of the Divisional Court very clearly said that the higher standards of pleading required in the Superior Court of Justice are simply unworkable in the Small Claims Court:
More important, though, is the fact that the case at bar was litigated in the Small Claims Court. The higher standards of pleading in the Superior Court are simply unworkable in the Small Claims Court, where litigants are routinely unrepresented, and where legal concepts such as the many varieties of causes of action are completely foreign to the parties. Essentially, the litigants present a set of facts to the Deputy Judge, and it is left to the Deputy Judge to determine the legal issues that emerge from those facts and bring his or her legal expertise to bear in resolving those issues.
[Emphasis added]
[90] In addition to considering all causes of action arising from the evidence, an Adjudicator must provide reasons for their conclusions in their decision. In Lacombe v Sutherland, 2008 NSSC 391, Justice Beveridge (as he then was) determined that the Adjudicator’s failure to provide the evidentiary foundation for his conclusion in his written Decision was an error in law. He wrote:
[36] Even prior to this recognition by the Supreme Court of Canada in 2002, there has been a recognition that a failure to provide reasons can constitute a reversible error in the context of a Small Claims Court appeal.
[37] In Victor v. City Motors Ltd., [1997] N.S.J. No. 140 Davison, J. dealt with an appeal from a Small Claims Court decision. The basis of the appeal was that the summary report prepared by the adjudicator did not clearly set forth the findings of fact and in particular did not clearly set forth the basis for the findings of fact. Justice Davison wrote:
[14] Appeals from the Small Claims Court must be considered in a slightly different manner. In my view the difference is recognized by the legislature when they required the adjudicator to place in the summary report the basis for findings of fact. The Supreme Court, on appeal, does not have a transcript of the evidence and does not have a basis to consider the findings of fact made by the adjudicator. In my view, when the adjudicator prepares the summary for the appeal effort should be made to expressly state the findings of fact and the basis for those findings.
[15] Respect should be accorded the findings of fact, but where it cannot be established from the record the appropriateness of the findings, the danger exists that the findings are unreliable.
[91] Justice Beveridge pointed out that deficiencies in a trial judge’s reasons do not afford a free-standing substantive right of appeal in either the civil or criminal context (Lacombe, at para. 39). He quoted with approval Justice LeBlanc’s decision in Morris v. Cameron, 2006 NSSC 9, where he considered the issue of sufficiency of reasons on an appeal of a Small Claims Court adjudicator. In that case, the Appellant argued that there was an error of law or a breach of natural justice resulting from the adjudicator’s failure to make clear whether he had considered certain evidence. Justice Leblanc wrote:
[37] I do not accept the Respondent's argument that the reviewing court can never review the findings of fact of the Adjudicator. While this Court may not substitute its own findings for those of the Adjudicator, the Adjudicator's findings must be grounded upon the evidence. In order for the reasons to be sufficient, they must demonstrate the evidentiary foundations of the findings. This conclusion is supported by s. 32(4) of the Small Claims Court Act, which requires the Adjudicator to submit to the reviewing court a summary of his findings of fact and law. Accordingly, the Adjudicator has a duty to submit not only the decision, but also the basis of any findings raised in the Notice of Appeal. The Adjudicator thus has two opportunities - the decision and the summary report - to clearly state the basis for any findings of fact.
[92] Leblanc J. went on to conclude that the reasons are “insufficient where they do not make clear the evidentiary foundation and reasoning utilized by the Adjudicator” (Morris, at para. 38).
[93] In this case, the Adjudicator did not provide any analysis of the tort of nuisance in his written decision. Indeed, there is no evidence that the Adjudicator ever turned his mind to the issue.
[94] As previously mentioned, the Adjudicator submitted, in his Summary Report that:
I will only add that the second ground of appeal noted by the Appellant, namely, “failing to consider and make a determination regarding nuisance…. a cause of action that was before him” may be considered by this Honourable Court in light of the statement of claim herein. Nuisance was not pleaded in that statement of claim. If nuisance had been pleaded or argued, my conclusions as contained in the reported decision would not have been affected.
[95] At the outset, it is important to emphasize that at the hearing, the Claimant was self-represented by its corporal principal, who is not a lawyer. Interestingly, the Claimant’s pleadings did not name neither the tort of negligence nor the tort of nuisance. According to the Appellant’s factum, at para. 60, the standard Form 1 Notice of Claim stated:
The Claim is for a portion of property (remediation costs, reconstruction/repair costs and associated out -of-pocket expenses) and lost rental revenue resulting from the Town’s neglect to take necessary measures to ensure the proper operation of a culvert at Lowden Brook (North Main St., Trenton) allowing interference and flooding with a certain property and building located at 3334 North Main St., Trenton, Nova Scotia (“the Property”) on January 21, 2019 and July1, 2019. The Clamant is the owner of the Property.
[96] As stressed in Nichols, Adjudicators in the Small Claims Court have a duty to consider causes of action which may be established by the evidence. Nichols affirms the ruling in Popular Shoe Store Ltd. v. Simoni, [1998] N.J. No. 57, where the Court of Appeal Newfoundland and Labrador held that, “Particularly in Small Claims Court, where Claimants are often unrepresented, a liberal approach ought to be taken to the pleadings that are presented so as to ensure that access to proper adjudication of claims is not prevented on a technicality”(Popular Shoe Store Ltd., at para. 24).
[97] In this case, because the Adjudicator did not include an analysis of nuisance in his decision, he erred in law. Furthermore, his conclusionary comments in his Summary Report are clearly not sufficient for the purposes of providing meaningful appellate review. Indeed, the Court cannot find any chain of reasoning that led the adjudicator to make that conclusionary comment. Put differently, the Court knows only his bare conclusions. There is no indication how he dealt with the evidence relating to the tort of nuisance and hence committed an error of law.
[98] Further, because of the Adjudicator’s conclusionary remarks, and that the parties only briefly addressed the issue of nuisance in their submissions at the hearing, it would be appropriate for this issue to be sent back for a rehearing before a different Adjudicator.
[99] As Justice Beveridge pointed out in Lacombe v. Sutherland:
[27] In Nova Scotia the Small Claims Court Act provides an appeal as of right to the Nova Scotia Supreme Court. Section 32 sets out the grounds of appeal that can be raised. Oddly enough the Act does not set out the powers that the Supreme Court has if it finds an error of law, jurisdiction or breach of natural justice. Typically the case law in Nova Scotia is that where any such error is found a re-hearing is ordered before a different adjudicator.
[Emphasis added]
[100] In my view it is neither necessary nor appropriate that this Court consider the issues pertaining to the Adjudicator’s statutory interpretation of ss. 513, 514, and 515 of the Municipal Government Act, given that those issues could arise in the rehearing of the matter in the Small Claims Court where a more complete or full evidentiary record would be considered by the Adjudicator.
[101] For all the foregoing reasons, the appeal is allowed, in part, because the Adjudicator erred in law by failing to consider and make a determination on the Respondent’s liability for nuisance.
[102] In the circumstances there will be no award of costs.
Hoskins, J.