Antigonish (County) v. Antigonish (Town)

Antigonish (County) v. Antigonish (Town) Court Court of Appeal Date 2002-06-26 Citation 2002 NSCA 92 Docket CA 176023 Judge/Registrar/Adjudicator Bateman, Nancy J. (Honourable Justice) (CA); Roscoe, Elizabeth A. (Honourable Justice) (CA); Hamilton, M. Jill (Honourable Justice) Document Type Decision Relations Library Sheet - Antigonish (County) v. Antigonish (Town) - 2002 NSCA 92 - 2002-06-26 - Library Sheet Decision Content Date: 20020626 Docket: CA176023 NOVA SCOTIA COURT OF APPEAL [Cite as: Antigonish(County) v. Antigonish (Town), 2002 NSCA 92] Roscoe, Bateman, and Hamilton, JJ.A. BETWEEN: MUNICIPALITY OF THE COUNTY OF ANTIGONISH Appellant - and - TOWN OF ANTIGONISH Respondent REASONS FOR JUDGMENT Counsel: Donald L. Macdonald for the appellant Duncan J. Chisholm for the respondent Appeal Heard: May 22, 2002 Judgment Delivered: June 26, 2002 THE COURT: The appeal is dismissed, per reasons for judgment of Hamilton, J.A., Roscoe and Bateman, JJ,A., concurring. Hamilton, J.A.: [1] This is an appeal from the decision of the Nova Scotia Utility and Review Board dated November 16, 2001, with respect to a complaint made by the appellant in August 1997, pursuant to s. 83(1) of the Public Utilities Act, R.S.N.S. 1989, c.380. In the complaint the appellant claimed that the portion of the fire protection charge, that the Board determined in 1980 should be paid by the appellant to the respondent annually, was unjustly discriminatory or unreasonable. [2] Both the appellant and the respondent have water utilities that own and operate water distribution systems within their respective boundaries. Both utilities are public utilities under the Public Utilities Act. The appellant’s utility does not have a separate source of water supply and obtains all of its water from the respondent’s utility through ten connection pipes. [3] The respondent’s utility provides two classes of water services: general service to individual customers (including the appellant as one of those customers) and fire protection service to the respondent and the appellant in their capacity as customers of the respondent’s utility. In 1980 the Board determined the portion of the total cost to the respondent’s utility of providing water services that was applicable to fire protection services, and then determined the portion of that fire protection charge that was to be paid by the appellant. [4] By its complaint in 1997, the appellant claimed the amount set by the Board in 1980 was unreasonable or unjustly discriminatory. The Board held a hearing and determined that the 1980 allocation of the fire protection charge between the parties was unjust and unreasonable, and in accordance with s.83(1), it ordered a new allocation. It recognized that there was no perfect way of determining the fair allocation. It determined the fairest way to allocate the fire protection charge was to use the fire flows method, calculated at the ten connection points on the boundary between the water supply systems of the parties. It decided, as well, that the fire protection charge should be split between the parties in proportion to their maximum required fire flow, after discounting the appellant’s share to take into account the deficiency in the required fire flow at some of the ten connection points. Since the maximum required fire flow was known for the respondent but not for the appellant, the Board also ordered the parties to have the Insurers’ Advisory Organization determine the required fire flow within the appellant’s boundaries. The Board also decided it had no jurisdiction to make an order which would retroactively alter the allocation of the fire protection charge fixed in 1980. [5] The parties did not in their submissions specifically address the standard of review applicable on this appeal. Sections 26 and 30 of the Utilities and Review Board Act, S.N.S. 1992, c.11, provide as follows: 26 The finding or determination of the Board upon a question of fact within its jurisdiction is binding and conclusive. 30 (1) An appeal lies to the Appeal Division of the Supreme Court from an order of the Board upon any question as to its jurisdiction or upon any question of law, upon filing with the Court a notice of appeal within thirty days after the issuance of the order. [6] In Sutherland v. Nova Scotia (Director of Victims’ Services) [1998] N.S.J. No. 287; (1998) 170 N.S.R. (2d) 73 Cromwell J.A. said: ¶ 12 This broad review on appeal to the Board is to be contrasted with the narrow scope of the further appeal from the Board to this Court. This appeal, provided for by s. 30 of the Utilities and Review Board Act, S.N.S. 1992, c. 11., is limited to questions of law and jurisdiction. Findings of fact by the Board within its jurisdiction are "binding and conclusive": s. 26 . The Board must be correct on questions of law or jurisdiction, but the role of this Court in relation to its factual findings is limited to errors of fact that are "...so egregious as to amount to errors of law": Nova Scotia v. Research Island AG (1994), 132 N.S.R. (2d) 156 at 158. ¶ 13 Frequently, questions decided by the Board will involve a mixture of law and fact. Such questions, to use the words of Iacobucci, J. in Director of Investigation and Research v. Southam Inc.,[1997] 1 S.C.R. 748 at 767, concern "...whether the facts satisfy the legal tests." The more the question approaches one of pure application of facts to the relevant legal principles, the more nearly the question is rightly characterized as one of mixed law and fact: ibid at 768. This Court on appeal should approach the Board's resolution of these sorts of mixed questions with a measure of deference : see Southam at p. 771; see also to much the same effect the judgment of this Court in Nova Scotia (Attorney General) v. Williams (1996), 152 N.S.R. (2d) 291 at 296-301. [7] The appellant asks this court to remit the matter to the Board for reconsideration on the basis that it erred in law or in jurisdiction in allocating the fire protection charge as it did. It takes no issue with the Board’s calculation of the total amount of the fire protection charge. The appellant asks the court to order the Board to allocate the fire protection charge on the basis that the appellant is not getting adequate fire protection benefit from the respondent’s utility since there is less than the required fire flow at most of the hydrants located within the appellant’s boundary. The appellant also asks this court to order the Board to exercise its discretion under s.83 of the Public Utilities Act to make the new allocation applicable from the date of the complaint rather than the date of the order. [8] There is no dispute that the hydrants within the appellant’s boundaries generally do not have the required fire flow. There is also no dispute that the appellant will have to make capital expenditures to the water system within its boundaries to achieve the required fire flow at its hydrants. This may require it to build water storage tanks or a pumping station. The Board found that the respondent’s responsibility for required fire flow ended at the boundary between the parties since it had no control over the water supply system past that point. [9] I am not satisfied the Board erred in allocating the fire protection charge as it did. At paragraph 131 of its decision the Board states: The Board has carefully reviewed the evidence and arguments put forward by the parties and by Mr. Isenor. It concludes that the most acceptable method for allocating the fire protection charge between the Town and County is the required fire flows method as applied in the Gates Report. It appears to occupy a "middle ground" as suggested by Mr. Isenor in terms of its impact on the County, and, more important, in its application as proposed in the Gates Report, it is fair to both parties. While the Town Utility has no responsibility for taking remedial action as a result of inadequate fire flows in parts of the Fringe Area water system, the method proposed to allocate the fire protection charge between the Town and the County in effect recognizes that the RFFs [required fire flows] are not being met at all of the connection points. The discount proposed by the Town Utility addresses this deficiency in the view of the Board. The discount, which in a sense is a modification of the required fire flows methodology, recognizes that the actual fire flows being received by the County at some of the connection points do not equate to the RFFs for the areas served by the mains extending into the County from the connection points. [10] The Board’s decision shows a careful consideration of the evidence and of the alternatives available to it. The process followed before the Board included the Board engaging its own expert and ordering tests to be done to ensure that it had the required information. It’s decision makes it clear it was seeking the fairest of the imperfect alternatives available to it. The evidence before the tribunal was reasonably capable of supporting its conclusions. The decision is not in excess of jurisdiction nor does it evidence the application of an erroneous principle. To the extent that the question before it was one of mixed law and fact, it deserves a measure of deference. [11] The appellant also argued the Board erred in law when it found it had no jurisdiction to order that the new allocation of the fire protection charge would apply from the date of its application, as opposed to the date of the Board’s order, and hence ordered that the new allocation apply from the date of the order. [12] Accepting without deciding that in certain cases the Board may have authority to retroactively adjust rates, I am satisfied for the practical reasons cited by the Board, that the Board did not commit reviewable error in not doing so here. [13] The Board’s decision states as follows at page 62: The Town Utility argues that a retroactive change in the fire protection charge “could lead to chaos”: In our case the Town has set its tax rates based on the expected revenue it was to receive from the Town Utility. If the revenue of the Town Utility is going to be retroactively reduced significantly for the past 20 years, it will obviously present many difficulties to the Town. [14] Given the difficulty the respondent would have anticipating what the Board would decide as a result of the appellant’s complaint, the respondent’s approach of setting its tax rates based on the Board’s 1980 order was reasonable. The Board’s decision makes it clear there is substantial discretion in determining what amounts are to be included in the total amount of the fire protection charge and in the method to be used in calculating how it is to be allocated among the people who benefit from the service. The Board’s decision not to include dividends or an incidental allowance in calculating the total fire protection charge in light of the particular facts of this case, when it has allowed similar expenses to be taken into account in setting other water rates, is an example of this exercise of discretion. Some of the five possible methods of allocation considered by the Board are appropriate for one situation and not for another. There is no way the respondent could have estimated with any degree of certainty what the Board would do as a result of the complaint in determining the amount of the total fire protection charge and how it would be allocated between the parties. While it took a number of years for the Board’s decision to be rendered, there is no indication this was caused in any way by the respondent. Hence in this case the Board did not err in not ordering that the allocation would only be applied from the date of the order. [15] Accordingly I would dismiss the appeal and order the appellant to pay costs to the respondent in the amount of $1,000. Hamilton, J.A. Concurred in: Roscoe, J.A. Bateman, J.A.