Executive Summary

For Ontario municipalities, the Drainage Act operates on a fundamental “user-pay” principle: the costs of drainage infrastructure are assessed to the benefiting landowners, not the general tax base. However, a recent decision by the Agriculture, Food and Rural Affairs Appeal Tribunal (AFRAAT) has drawn a sharp line in the sand regarding administrative delays.

In Frank Szeder Drain (Re), the Tribunal penalized a municipality for “excessive” delays by capping recoverable engineering costs and prohibiting the recovery of legal fees from the drainage scheme. This decision serves as a critical precedent: if a municipality fails to actively manage file timelines, it risks absorbing significant project costs through its general levy.

The Decision: Frank Szeder Drain (Re), 2025 ONAFRAAT 11

Citation: Frank Szeder Drain (Re), 2025 ONAFRAAT 11 Full Decision: https://canlii.ca/t/kd6wq

The Context

The Township of Emo received a petition for drainage in 2008. While some delays were requested by the landowner (2012–2014), the project largely stalled between 2016 and 2020 with “little progress” made by the appointed Engineer or the municipal administration. It took nearly 17 years and an order from the Drainage Referee to bring the final report to a provisional by-law.

The Consequence

The Tribunal ruled that while the technical design was sound, the 12-year delay attributable to the Municipality and its Engineer was “excessive.” Consequently, the Tribunal used its discretionary authority to order that:

1. Engineering fees incurred after June 2021 were unrecoverable from the landowners (effectively capping the fees at ~$108,130).

2. The Municipality must bear its own legal costs for the proceedings, prohibiting them from being levied against the lands.

Strategic Considerations for Municipal Administrators

This decision highlights a hidden liability in municipal project management. To protect the municipal budget and ensure full cost recovery, administrators must treat Drainage Act petitions with the same project management rigor as capital infrastructure projects.

1. The “User-Pay” Model Is Not Absolute

Municipalities often assume that all costs associated with a drain—including extended engineering reviews and legal defense—will ultimately be assessed to the watershed. This decision clarifies that the Tribunal will protect landowners from costs ballooning due to administrative inaction. If a file sits dormant, the “interest” and “inflation” on those costs may become a municipal liability.

2. The Affirmative Duty to Manage Consultants

The Tribunal noted that the Municipality did not utilize Section 39 of the Drainage Act to compel the Engineer to file the report. Simply waiting for an external consultant to deliver a report is no longer a sufficient defense against delay claims. Municipal staff must actively monitor engineering timelines and formally request reports when deadlines slip.

3. Legal Fees vs. General Overhead

Typically, legal costs to defend a drainage by-law can be charged to the project. However, the Tribunal signaled that when a hearing is precipitated by municipal delay, it is inequitable to charge the landowners for that legal defense. This effectively shifts the litigation risk entirely to the municipality’s general operating budget.

Action Items for Clerks and Superintendents

To mitigate the risks identified in Szeder, we recommend the following governance steps:

• Audit the “WIP” (Work in Progress) List: Review all active drainage petitions. Identify any files that have been dormant for more than 12 months. If a delay is caused by a landowner, ensure this is documented in writing to toll the “delay clock.”
• Issue Section 39 Notices: If an appointed Engineer has failed to file a report within a reasonable timeframe (typically one year), Council should consider passing a resolution under Section 39 directing the Engineer to file the report. This demonstrates proactive file management.
• Review Engineering Retainers: Ensure engagement letters with drainage engineers include clear milestones. While the Act protects the Engineer’s independent judgment, it does not immunize them from project management timelines.

About the Author: Eric Florjancic is an Associate Lawyer at Legal Focus LLP. He advises municipalities and private clients on complex litigation matters, including municipal liability, property disputes, and estate litigation. Eric helps municipal clients navigate the intersection of statutory duties and practical risk management.

Disclaimer: The information provided in this client alert does not constitute legal advice and is intended for informational purposes only. Municipalities should consult with their solicitor regarding specific active files.

Contact Eric Florjancic | Phone: 226-674-1120 | Email: [email protected]