Court File No.

: 12-36015

ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NATIONAL STEEL CAR LIMITED
Plaintiff
- and -

THE CORPORATION OF THE CITY OF HAMILTON

Defendant

STATEMENT OF DEFENCE
OF THE DEFENDANT, CITY OF HAMILTON

The defendant, City of Hamilton, incorrectly named as the Corporation of the City
of Hamilton (hereinafter "the City"), admits the allegations contained in
paragraphs 2, 3, 4 and 12 of the statement of claim.

The City denies the allegations contained in paragraphs 1 and 5 through 11 of the
statement of claim.

In answer to the whole of the statement of claim, the City states that the storm water
outlet at the end of Kenilworth Avenue was constructed in 1922 at which time it
emptied into an inlet of Hamilton Harbour. National Steel Car, and its parent
company Dofasco subsequently arranged for the filling in of the inlet by extending
the shoreline and expanding their properties. The expansion of their land impeded
the flow of water into the Harbour by confining it to a channel that is inadequate for
its purpose unless it is properly maintained. National Steel Car has neglected to

maintain the channel and suffers periodic flooding as a result. Accordingly, the
plaintiff is the author of its own misfortune.

Stormwater Outlet

In approximately 1922, the City completed construction of a portion of its sewage

system which collected storm water and emptied it into Hamilton Harbour at the
northern boundary of Kenilworth Avenue North ("Kenilworth"). Kenilworth ended at a
portion of Hamilton Harbour known as Ogg's Inlet.

The storm water outlet system is an indispensable part of the infrastructure

necessary to support urban life in the City of Hamilton.

The storm water outlet freely emptied into Ogg's Inlet for many decades without any
impact whatsoever on any shoreline properties.

If National Steel Car had not arranged for the filling in of Ogg's Inlet by extending its
lands into Hamilton Harbour, the storm water outlet would have continued to
perform its function by emptying directly into the harbour without incident.

Extension of the Shoreline

Prior to 1948, the City owned the lands covered by the waters of Hamilton Harbour.
On April 1, 1948, such land was transferred to the Hamilton Harbour
Commissioners, an entity created by federal statute for the purpose of governing the
use and development of Hamilton Harbour. Pursuant to section 4 of the Hamilton
Harbour Commissioners' Act, S.C., 1912, c. 98, Hamilton Harbour was deemed to

include all inlets including Ogg's Inlet.

Subsequent to 1948, National Steel Car and its parent company Dofasco
Incorporated (then Dominion Foundries and Steel Company) developed and

expanded their lands, or arranged for such expansion, by filling in Ogg's Inlet and
extending the southern shore of Hamilton Harbour.

10.

National Steel Car and Dofasco created a private channel ("the Channel") along the
new lands from the stormwater outlet to the new shoreline. The Channel was
constructed in order to provide a route for the passage of stormwater to Hamilton
Harbour.

11.

The City was not consulted regarding the construction of the Channel on the new
lands that the plaintiff had created and it was not built to municipal standards.

12. At no time has the City assumed responsibility for the Channel.

Maintenance of the Channel

13.

For many years after its creation, Dofasco maintained the Channel by dredging it
to a sufficient depth to ensure that all water emptying into it from the storm water
outlet was drained into Hamilton Harbour. Dofasco performed such dredging each
spring.

14.

At all material times, National Steel Car was a subsidiary of Dofasco, and Dofasco
maintained the Channel for the benefit of both companies. Dofasco owned the
property to the west of the Channel and National Steel car owned property to the
east of the Channel.

15.

In approximately 1994, Dofasco sold National Steel Car. The following spring,
Dofasco stopped dredging the Channel. Approximately 5 years later, the Channel
periodically overflowed during significant rain events due to lack of maintenance.
The overflow affected the lands of National Steel Car, but not the lands of
Dofasco which were higher in elevation.

16.

At all relevant times, National Steel Car and Dofasco have used the Channel to
drain water from their respective properties. The overland flow from their
respective industrial properties carried contaminated sediments into the Channel.

17.

In approximately the year 2000, inspectors employed by Environment Canada

took an interest in the sediment and other contaminants that might be flowing
from the Channel into Hamilton Harbour.

18.

Given the interest expressed by Environment Canada, National Steel Car

recognized that continued dredging of the Channel and the disposal of dredged
material would likely become more expensive. It was not prepared to incur that
expense.

19.

The City specifically denies that it should be burdened with the expense of
maintaining a private channel created without its authorization or approval and
which offers a poor substitute for the inlet that existed before the plaintiff arranged
for the extension of its lands.

Statutory Authority and Doctrine of Inevitable Consequences

20.

The City provides sewage utility services, including the subject storm sewer

system, pursuant to the authority bestowed on it by section 11(1) of the Municipal

Act, S.O. 2001, c.25, and its predecessor legislation.

21.

Furthermore, the storm water system which includes the outlet at the end of
Kenilworth Avenue North was constructed, maintained, and operated in compliance
with the Ontario Water Resources Act Ontario Water Resources Act, R.S.O. 1990,
c.0.40 and the Environmental Protection Act, R. S. O. 1990, c.E.19 and is therefore

deemed to be constructed and operated by statutory authority pursuant to section

59 of the Ontario Water Resources Act.

22.

It is an inevitable consequence of the operation of the subject storm water system

that water will flow across the new lands that the plaintiff has created.

23.

The City states that it is the duty of National Steel Car, which has interfered with the
natural shoreline, to ensure that the artificial channel which it has substituted for the
body of water provided by nature is adequate to carry the water resulting from even
extraordinary rainfalls.

24.

The City states that to the extent the statement of claim constitutes a claim in
nuisance in connection with the escape of water or sewage from sewage works or
waterworks, it is statute-barred by s. 449 of the Municipal Act, 2001.

City Does not Own Channel

25. The City specifically denies the allegation in paragraph 5 of the statement of claim
that the Channel runs along an unopened municipal road allowance.

26.

What is now Kenilworth Avenue North was laid out in 1791 on the original
township map which shows that the road allowance ends at the shoreline of
Hamilton Harbour at Ogg's Inlet. The road allowance did not extend into the
water.

27.

All of the City's interests in the submerged land north of the storm water outlet
were transferred to the Hamilton Harbour Commissioners in 1948. To the extent
that any such land has not been transferred to third parties, the Hamilton Harbour
Commissioners (now the Hamilton Port Authority) continue to own such land.

28.

There has been no incremental and gradual accretion at the end of the road
allowance which would tend to extend it.

29. The City states that, if the plaintiff has suffered damages as a result of flooding,

which is not admitted, then such damages are the result of the negligence of the
plaintiff, Dofasco, and the Hamilton Harbour Commissioners, particulars of which
are as follows:

a) they filled in, or arranged for the filling in, of Ogg's Inlet without ensuring that
the drainage channel which they substituted therefore was adequate to carry
water to Hamilton Harbour from the City's storm water outlet during heavy
rains;

b) they failed to adequately maintain the Channel that they created;

c) they failed to continue to dredge the Channel as sediment was deposited;

d) they failed to minimize the deposition of sediment into the Channel from the
surrounding properties;

e) they did not properly grade the Channel with the result that water flows along
it so slowly that all suspended sediment is deposited before the water
reaches the Harbour;
f) they constructed a water retention pond at the end of the channel which
causes the water upstream to accumulate and overflow the banks;
g) they failed to remove obstructions in the channel which have impeded the
flow of water;
h) they failed to properly construct, design, and maintain culverts between the
storm water outlet and the Harbour;
i) they failed to design, construct or maintain adequate berms or dykes along
the edge of the Channel to properly divert periodic, increased volumes of
water;
j) they failed to take adequate measures to ensure that the Channel they
created would prevent periodic flooding that they knew would otherwise
occur.

30.

The City states that at all material times, its sewer system was designed,
constructed and maintained in a reasonable and prudent manner without any
negligence, breach of duty or want of care on the part of the City or on the part of

anyone for whom the City is in law responsible.

31.

The City denies that any actions or omissions by its employees or agents
contributed to the damages claimed by the plaintiff.

32.

The City's decision not to extend its sewage infrastructure onto the lands owned
by others was a policy decision made in good faith, and the City is therefore
immune from liability pursuant to section 450 of the MunicipalAct.

33. The City denies that the plaintiff has suffered the damages alleged.

34. The damages claimed are excessive and too remote to be recoverable at law.

35.

The floods of which the plaintiff complains were Acts of God which are noncompensable.

36.

Any claims for damages sustained prior to July 18, 2010 are barred by s. 4 of the
Limitations Act, 2002, S.O. 2002, c. 24.

37. The plaintiff has failed to mitigate its damages as alleged, in that:

a) it failed to adequately maintain the Channel;

b) it failed to design or construct alterations, additions or reinforcements of the
Channel, although it ought to have known that heavy rains would result in further

flooding;
c) it failed to anticipate or adequately respond to floods by designing and
implementing appropriate contingency plans; and
d) it failed to properly marshal its workforce in response to periodic flooding;

38.

The City states that the plaintiff has failed to provide sufficient particulars either
prior to the commencement of litigation or within the statement of claim with
respect to the alleged damages or loss of income or profits, and accordingly, the

plaintiff is not entitled to prejudgment interest.

39.

The City relies upon the provisions of the following statutes as amended, and any
predecessors thereto:
a) The Negligence Act, R.S.O. 1990, c. N-l;

b) The Courts of Justice Act, R.S.O. 1990, c. C.43;

c) MunicipalAct2001, S.O., 2001, c. 25;
d) Ontario Water Resources Act, R.S.O. 1990, c.O.40;
e) Drainage Act, R.S.O. 1990, c.D.17; and

f) Environmental Protection Act, R.S.O. 1990, c.E. 19;

40. The City, therefore, requests that this action be dismissed with costs.

Date: February 28, 2013

CITY OF HAMILTON
Legal Services Division
21 King Street West, 12th Floor
Hamilton, Ontario, L8P 4W7

Tel: (905)-546-2424 ext. 4642

Fax: (905)-546-4370
Grant Brailsford, Senior Solicitor

LSUC# 47368H
Lawyers for the Defendant

TO:

PAPAZlAN HEISEY MYERS

Barristers and Solicitors

Standard Life Centre

Suite 510, 121 King Street West
P.O. Box 105

Toronto, Ontario

M5H 3T9

R. Gall Goodman

(LSUC# 23715U)
Tel: 416-601-2707
Fax: 416-601-1818

Lawyers for the Plaintiff

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