Bighorn (Municipal District No. 8) v Bow Valley Waste Management Commission, 2013 ABQB 723

Court of Queen ’ s Bench of Alberta Citation: Bighorn (Municipal District No. 8) v Bow Valley Waste Management Commission, 2013 ABQB 723 Date: 20131205 Docket: 0801 11124 Registry: Calgary Between: Municipal District of Bighorn No. 8 Plaintiff - and - Bow Valley Waste Management Commission Defendant Corrected judgment: A corrigendum was issued on March 5, 2014; the corrections have been made to the text and the corrigendum is appended to this judgment. _ ________________________________________ ______________ Reasons for Judgment of the Honourable Mr. Justice R.J. Hall _________________________________________ ______________ Introduction [ 1 ] The within matter involves the

interpretation of a term contained within a Sale and Purchase Agreement dated December 10, 1999 (the “Agreement”) entered into between the Plaintiff, the M.D. of Bighorn No. 8 (the “MD”) and the Defendant Bow Valley Waste

Management Commission (the “Commission”). The Agreement transferred ownership of a Class III Landfill from the MD to theCommission. [2] The parties agreed in clause 3.02 of the Agreement: In addition to the Purchase Fee, the Commission shall pay the M.D. of Bighorn, the sum of One Dollar and Eight Cents ($1.80) for eachtonne of C & D waste (excluding all Industrial Waste) tipped at the Dry Waste Landfill Site (hereinafter referred to as the “HostingFee”). Issue Number 1 [3] The dispute between the MD and the Commission is, whether “C & D waste [...] tipped” includes recyclable materials.

TheCommission has not paid the Hosting Fee on recyclables under the Agreement. It is on this basis that the MD alleges the Commissionhas breached the Agreement and is in arrears on the payment of the Hosting Fee for those materials. [4] The Commission takes the position that the correct

interpretation of the Agreement is that recyclables are not included in“C&D waste [...] tipped” and that therefore no payment has been made and none is owed by the Commission to the MD for recyclablesbrought to the Landfill. Issue Number 2 [5] In the alternative, the Defendant Commission says that, if this Court finds that “waste tipped” includes recyclables, such thatthe Hosting Fee should have been paid thereon, the Plaintiff is barred by section 3(1)(

a) of the Limitations Act, RSA 2000 c. L-12, asamended, from recovering any Hosting Fee for recyclables that were received at the Landfill Site more than two years before theStatement of Claim herein was filed. Statement of Agreed Facts [6] The parties signed a Statement of Agreed Facts which became Exhibit 1A at trial and which consisted of 72 paragraphs ofagreed facts. It is to be noted that, in the

preamble to those paragraphs, it was stated that “Agreement by the parties to these facts is notan admission that any particular fact is relevant.” Principles of

Interpretation [7] The Alberta Court of Appeal has recently reviewed principles of contract

interpretation in Nexxtep Resources Ltd. v TalismanEnergy Inc., 2013 ABCA 40 , 2013 Carswell Alta 147, and again in A.G. Clark Holdings Ltd. v Hoop Realty Inc 2013 ABCA101 , [2013] AJ No. 223. In Nexxtep, the Court said (para 20): It is trite law that contracts should be enforced in accordance with the intention of the parties, which is to be gleaned from the wordsused in their agreement. Extrinsic evidence is not admissible when the document is clear and unambiguous.

However, this does not meanthat a court interpreting the contract is confined only to examining the words used, and to give them a dictionary meaning. Contracts arenot to be interpreted in a vacuum. The contextual evidence of surrounding circumstances, disclosing facts known to the parties at thetime the contract was made, is part of the interpretive process. Indeed, this Court has held that the

interpretation of the words used in a contract must have regard “to the relevant background contextknown to the parties”: Atco Electric Ltd v Alberta (Energy & Utilities Board), 2004 ABCA 215, [2004] 11 WWR 220, (Alta CA), at para76.

The Court adopted Lord Bingham of Cornhill’s statement of the law in Bank of Credit & Commerce International SA (InLiquidation) v Ali (No. 1) v Ali, [2001] 1 All ER 961 (Eng H.L.) at 965: To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words used their natural andordinary meaning in the context of the agreement, the parties’ relationship and all the relevant facts surrounding the transaction so far asknown to the parties.

To ascertain the parties’ intentions the court does not of course inquire into the parties’ subjective states of mindbut makes an objective judgment based on the materials already identified”. [8] In A.G. Clark, supra, the Alberta Court of Appeal stated at para 15: As this Court recently noted in Nexxtep Resources Ltd. v Talisman Energy Inc., 2013 ABCA 40 at para 20, contracts should be enforcedin accordance with the intention of the parties, gleaned from the words in their agreement. The Court went on in that case to emphasizethat the words are not to be interpreted in a vacuum.

The court must have regard to the contract as a whole, giving the words used theirnatural and ordinary meaning, and also having regard to the relevant background context. 16. The interpretive exercise was explained as follows in Atco Electric Ltd. v Alberta (Energy and Utilities Board), 2004 ABCA 215 atpara 77: ...the search for the parties’ intentions is conducted on an objective basis, meaning that the focus is on what a reasonable person wouldinfer from the words used. This interpretive exercise must be undertaken with due regard to the entire contract.

One cannot simply pickand choose clauses-or parts of clauses-without considering the contract as a whole. It also means being alive to the relevant backgroundagainst which the contract was concluded, the purpose of the exercise being to ascribe to the written text the most appropriate meaningwhich the words can properly bear.

[9] Further guidance can be found in Black Swan Goldmines Ltd. v Goldbelt Resources Ltd. (BC CA), [1996]BCJ No. 1458 [1997] 1 WWR 605 78 (BCCA) at para 19: The words of the contract must not be overwhelmed by a contextual analysis, otherwise there is little point in writing things down. Nocertainty could be achieved in choosing words to express a bargain. Contract disputes would have to be resolved by lengthy inquiries asto what was fair in light of what happened before, during and after the making of a contract. [10] The Ontario Court of Appeal decision in Dumbrell v Regional Group of Companies Inc. [2007] OJ No 298, 2007 ONCA 59,is often quoted in relation to

interpretation of contracts. The Court stated, at para 49: On the approach taken in Eli Lilly, supra, the focus is on the meaning of the words used in the contract.

Evidence of the subjectiveintention of the parties has “no independent place” in the interpretive process: Eli Lilly, at para 54; see also Staughton, “How do theCourts Interpret Commercial Contracts?”, supra at 304-306; Investors Compensation Scheme Ltd. v West Bromwich Building Society,[1998] 1 ALL E.R. 98 at 114-115 (H.L.). [11] And at para 54: A consideration of the context in which the written agreement is made is an integral part of the interpretive process and is not somethingthat is resorted to only where the words viewed in isolation suggest some ambiguity.

To find ambiguity, one must come to certainconclusions as to the meanings of the words used. A conclusion as to the meaning of words used in a written contract can only beproperly reached if the contract is considered in the context in which it was made: see McCamus, The Law of Contracts (Toronto: IrwinLaw, 2005) at 710-11. [12] It is clear that the words of one provision in a contract must not be read in isolation but should be considered in harmony withthe rest of the contract and in light of the purposes in commercial context: Tercon Contractors Ltd. v B.C.

Transportation and Highways2010 SCC 4 , [2010] SCJ No 4. [13] Guidance is also obtained from the Ontario Court of Appeal decision in Scanlon v Castlepoint Development Corp., 1992Carswell Ont 633 at para 88: The agreement with which we are concerned is a negotiated commercial document which should be construed in accordance with soundcommercial principles and good business sense. To the extent that it is possible to do so, it should be construed as a whole and effectshould be given to all of its provisions.

The provisions should be read, not as standing alone, but in light of the agreement as a whole andthe other provisions thereof: Hillis Oil & Sales Ltd v Wynn’s Canada Ltd (SCC), [1986] 1 SCR 57 at p 66. The courtshould strive to give meaning to the agreement and “reject an

interpretation that would render one of its terms ineffective”: NationalTrust Co v Mead (SCC), [1990] 2 SCR 410 at p 425. [14] This statement from Scanlon was referenced with approval by the Alberta Court of Appeal in Sunderji v Germain ResidencesLtd., 2012 ABCA 389. [15] A fundamental term of contractual

interpretation is that the intention of the parties is to be determined as at the time thecontract is made: Davidson v Allelix Inc, 1991 CarswellOnt 933, (Ont C.A.). Where there is ambiguity the Supreme Court of Canada hasnoted the desirability of giving effect to the reasonable expectation of the parties: Scalera v M.J.

Oppenheim in his quality as attorney inCanada for the non-marine underwriters, members of Lloyds of London, Respondent 2000 SCC 24 , [2000] SCJ No. 26. [16] In Dow Chemical Canada Inc. v Shell Chemicals Canada Ltd., 2010 ABCA 126 , [2010] AJ No 432, the AlbertaCourt of Appeal limited the evidence that could be called for the purposes of interpreting a contract, commencing at para 17: It is also clear that the parties cannot call expert evidence on the meaning of the contract: [citations omitted].

For example, neither partycould retain a professor of law or English to prepare an expert report on the meaning of the terms of the contract: Gorgichuk v AmericanHome Assurance Co. (1985) 5 CPC (2d) 166 (Ont HC). It follows that no third party can provide an opinion on what the contract means. That is the case even if the third party is aknowledgeable member of the same industry; his or her opinion as to what the contract means is not admissible: Harris v Nugent (1996),1996 ABCA 388 , 46 Alta LR (3d) 264, 193 AR 113 (C.A.).

It is also clear that the opinions of third parties after the contractwas signed are inadmissible. If any evidence about the contract was admissible, it would have to be evidence about the situation prior toand at the date of signing of the contract, in this case 1999: Dumbrell v Regional Group of Companies Inc., 2007 ONCA 59, 85 OR (3d)616 at para 53; McDonald Crawford v Morrow, 2004 ABCA 150 at para 72.

There is a narrow exception for technical terms of art, which can be proven by extrinsic evidence: Canadian National Railway Co. vVolker Stevin Contracting Ltd. (1991), 1991 ABCA 287 , 120 AR 39, (C.A.). [17] Some guidance is obtained from King v Operating Engineers Training Institute of Manitoba Inc.,2011, CarswellMan 485 (ManC.A.) as to what evidence or type of evidence is admissible as forming the “factual matrix”, commencing at para 66: The nature of the evidence that constitutes the factual matrix, will, of necessity, vary from case to case and is highly contextual, butgenerally it consists of the “background of relevant facts that the parties must clearly have been taken to have known and to have had inmind when they composed the written text of their agreement” (Glaswegian Enterprises Inc. v BC Tel Mobility Cellular Inc (1997), (BC CA), 101 BCAC 62 (BCCA) at para 18, Lambert J.A. ...such evidence is generally restricted to circumstances known to both parties that illuminate the meaning a reasonable person wouldgive to the words employed: Glaswegian, supra, at paras 18 – 20. ...it is certainly right the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis

of the transaction, the background, the context, the market in which the parties are operating. ... So, generally, the factual matrix will include, among other things: • Evidence of the commercial purpose of the contract, its aims and objectives; • Evidence of the nature or custom of the market or industry in which the contract was executed; • Evidence of the objective intention of the parties. But not, • Evidence of the subjective intention of the parties; • Evidence of the negotiations, and • Evidence of the subsequent conduct of the parties after the contract was entered into.

Factual Matrix [ 18 ] Here the parties have put forth in the Statement of Agreed Facts, some or all of the factual matrix, including the documents referred to therein. However, as stated above, neither party has conceded that any of the Agreed Facts are relevant to my determination. [ 19 ] In or about 1998, the Commission entered into negotiations with the MD for the purchase of the Dry Waste Landfill site from the MD, so the Commission could operate a Class III landfill at that location.

A Class III landfill is one for the deposit of solid waste but does not include household waste. [ 20 ] In November, 1997 Alberta Environment had retained Stanley Environmental (“Stanley”) to provide an updated analysis of a 1994 study prepared by Stanley to develop a regional integrated waste management plan for the Bow Valley region.

As a result, Stanley prepared its March, 1998 report (the “Stanley Report”), which is Exhibit 1C. [ 21 ] The parties agreed that a third and impartial party should be retained to evaluate a fair market value for the purpose of the dry waste landfill site, and the Commission retained Xenex Management Ltd. (“Xenex”) to provide such a report. Xenex provided a report dated November 4, 1998 (the “Xenex Report”). [ 22 ] In paragraphs 14 and 15 of the Statement of Agreed Facts, the parties have agreed as follows: 14.

A factor used in the financial models in the Xenex Report was the filling of the airspace in the Landfill at the Dry Waste Landfill Site over a 20 year period from 1999 until 2018. A spreadsheet showing the Xenex financial model calculations for tonnage and waste and cumulative tonnage of waste disposed of at the Landfill from 1999 to 2018 is attached at Tab F and will be referred to at trial as Exhibit 1F. 15.

The tonnages used in the financial models in the Xenex Report taken from the Stanley Report, only include waste that was to be buried at the Landfill over the 20 year period and did not include recyclable materials delivered to the Dry Waste Landfill Site but not buried in the Landfill. [ 23 ] Negotiations then ensued between the parties. The parties have recognized that negotiations are not properly put before the court and no details of those negotiations were provided at trial.

It was noted that the parties entered into a mediation which ultimately led to the execution of a “Bow Valley Waste Management Table Agreement” as between the members of the Commission and Alberta Environment. That agreement was finally executed September 23, 1999. It is in evidence by agreement as Exhibit 1-M. [ 24 ] On December 10, 1999 the subject Sale and Purchase Agreement was reached between the parties. The Sale and Purchase Agreement [ 25 ] The Sale and Purchase Agreement deals with the sale by the MD to the Commission of those lands described in the Agreement.

It also calls for payment of the disputed “Hosting Fee”. [ 26 ] Relevant provisions of the Agreement are as follows: 1.01 (b) “C & D Waste” means construction and demolition waste; (e) “Dry Waste Landfill Site” means the Lands described in

Article (

h) of this Agreement; (f) “Hosting Fee” means an amount paid to the M.D. of Bighorn for negative impacts associated with having the landfill site located in its municipality; (k) “Tipping Fee” means the fee paid for disposal of C & D Waste at the Dry Waste Landfill Site based on the weight or volume of the Waste;

3.01 The M.D. of Bighorn and the Commission hereby agree that the current value of the Lands for use as a C & D Waste disposal site is $525,000.00 (being $398,866.00 for Parcel One as referred to in

Article 1.01(h) (

i) and $126,134.00 for Parcel Two as referred to in

Article 1.01(h)(ii)) and that the purchase price to be paid over time by the Commission to the M.D. of Bighorn for the Lands shall be as follows: The Commission shall pay to the M.D. of Bighorn, the sum of Two Million Two Hundred Thirty One Thousand Seven Hundred and Fifty Dollars ($2,231,750.00), which sum is based on a fee of Three Dollars and Ninety Five Cents ($3.95) per tonne of C & D Waste tipped at the Dry Waste Landfill Site (excluding all Industrial Waste), to a maximum of 565,000.00 tonnes (the “Purchase Fee”). The Purchase Fee shall be allocated as follows: (a) $1,695,560.00 for Parcel One as referred to in

Article 1.01 (h)(i); and (b) $536,190.00 for Parcel Two as referred to in

Article 1.01(h)(ii). 3.02 In addition to the Purchase Fee, the Commission shall pay the MD of Bighorn, the sum of One Dollar and Eighty Cents ($1.80) for each tonne of C & D Waste (excluding all Industrial Waste) tipped at the Dry Waste Landfill Site (“hereinafter referred to as the “Hosting Fee”).

The Commission shall pay the Hosting Fee to the M.D. of Bighorn in quarterly payments each year as follows: on April 15 th for the period from January 1 to March 31, on July 15 th for the period from April 1 to June 30, on October 15 th for the period from July 1 to September 30, and on January 15 for the period from October 1 to December 31, and continuing for so long as the Lands are used as a Landfill Site... 9.01 The Commission and the M.D. of Bighorn each acknowledge that except as otherwise described in this Agreement, there are no other warranties, representations or collateral agreements made by or with the other party about the Property, any neighboring lands and this transaction, including any warranty representation or collateral agreement relating to the size/measurement of the Lands and Buildings or the existence or non-existence of any environmental condition or problem. 8.05 This Agreement shall supersede and replace any and all prior agreements between the parties hereto relating to the sale and purchase of the Lands and may be amended only by written instrument signed by all parties hereto. 8.06 This instrument states the entire agreement between the parties hereto.

Viva Voce Evidence [ 27 ] The Plaintiff called the following witnesses: 1. Martin Buckley, the present Chief Administrative Officer of the M.D. of Bighorn, who has held that position since May, 2001; as such he was not with the MD when the Agreement was signed. He has background training and experience in municipal government matters, but not in waste management; 2. Paul Ryan, an elected councillor for the MD, continuously since 2002. He had no previous municipal government experience nor experience in waste management.

In October, 2002 he became a director of the Commission as well as continuing in his position as councillor with the MD; 3. Dean Cooper, who has been a councillor with the MD continuously since October, 2004. He became a Commission director early in 2006 and continues in that position at present. He has no previous experience in waste management; 4. Edward Latvala, who was a councillor for the MD for six years from 1998 to 2004. He had no previous municipal government experience. At the time his role as councillor commenced, the MD was operating the Class III Landfill.

He indicates that in those days “there were no recyclables” dealt with at the Class III Landfill site owned and operated by the MD. Mr. Latvala was involved in the discussions and negotiations leading up to the execution of the Sale and Purchase Agreement. [ 28 ] The Defendant called the following witnesses: 1. Don Kochan who is an engineer by training and who successfully completed the Public Management Certification course. He worked for twenty four years for the city of Edmonton, including a period between 1992 and 1997 where he was the director of waste management operations there.

From 1997 until 2007 he was employed by the Town of Canmore as the director of streets, roads, utilities and waste management. In 2007 he became the chief administrative officer for the Town of Canmore, holding that position until 2011. He was involved as a representative of the Town of Canmore in discussions and negotiations leading to the execution of the Purchase and Sale Agreement. 2. Lisa de Soto, chemical engineer who became involved in landfill engineering commencing in 1991. In 1996 she became employed as the manager of solid waste services for the Town of Canmore.

In 1998 she became manager of public works and in 2002, placed in charge of water, streets and roads, and waste management. In 2007 she became the Deputy Chief Administrator Officer of the Town of Canmore and in 2012 she became the Town of Canmore’s Chief Administrative Officer, succeeding Mr. Kochan. She signed the subject Agreement as the Commission manager for the Commission. 3. Robert Darcy Edison, who entered into the waste industry in 1993 and who came to work for the Commission in 2007. He is currently the Chief Administrative Officer of the Commission. 4.

Albert Tinholt, environmental engineer who began his position as Chief Administrative Officer of the Commission in March of 2000, leaving in June of 2008. [ 29 ] Much of the evidence of these witnesses listed above dealt with the limitations issue, in terms of what information was known

to what party at a particular given time. I will return to their evidence on that score in discussing the limitations issue. [ 30 ] Mr. Buckley had not arrived on the scene at the time the Agreement was executed. [ 31 ] Mr. Ryan’s evidence is largely confined to the limitations issue. Mr. Cooper’s involvement with the MD did not commence until October, 2004. [ 32 ] Mr.

Latvala gave evidence to say that, prior to the formation of the Commission and the sale of the landfill by the MD to the Commission, no distinction was made at the MD’s landfill between recyclable and non-recyclable items, and nothing was being recycled in those days. [ 33 ] Mr. Latvala indicated that the MD was not in favour of a regional landfill because it wished to have control over its own landfill, including control over its tipping fees.

However, the MD eventually considered it to be in the best interests of all if they cooperated with the towns of Banff and Canmore, and thus avoided the possibility of competition between two landfills “in the valley”. [ 34 ] Mr. Latvala indicated that the MD did not generally agree with the Xenex Report, and referred to the correspondence contained at Exhibit 1-I in which the MD expressed its concerns. [ 35 ] Mr.

Latvala also indicates that the concept of a Hosting Fee was put in place as reimbursement for the use of the land, the nuisance of the traffic, dust control from having a bigger landfill on the MD property and litter in the area. [ 36 ] Mr. Latvala does not recall any discussion regarding recyclable materials, leading up to the execution of the “Table Agreement” Exhibit 1M, nor in relation to the Purchase and Sale Agreement. [ 37 ] Mr. Latvala was taken to a letter contained in Exhibit 1-I signed by him and sent to the Commission January 22, 1999. In that letter, Mr.

Latvala states: The Commission has expressed an interest in acquiring the site for the purposes of waste management which are likely to include construction and demolition (C +

D) waste landfilling, composting, garbage transfer and recycling on a reasonable scale. (underlining added). Stanley Environmental has in the recent past studied both the Bow Valley Waste stream and the Big Horn Dry Landfill and has estimated the tonnage likely to go the site if Castle Junction and Canmore Landfills no longer accepted C + D waste. This amount was estimated to be 20,000 tonnes in the first year, escalating slightly over time as build out out in Banff and Canmore increased.

Over a 20 year period, Stanley estimated a total of 565,042 tonnes would arrive at the site. [ 38 ] The letter goes on thereafter to discuss the Xenex Report and to express the MD’s concerns with the conclusions reached by that report in terms of pricing for the purchase of the land. I will return to the Stanley Report and the Xenex Report below. However, it should be noted at this juncture, that Mr.

Latvala, acting as Reeve and Councillor for the MD of Bighorn, acknowledged that the waste management being considered included “recycling” and acknowledged that, over a 20 year period, Stanley estimated a total of 565,042 tonnes would arrive at the site. Stanley had expressed that those tonnages were net of recycling. [ 39 ] The defence witness, Mr. Kochan, was the Director of Waste Management Operations for the Town of Canmore commencing in 1997 and was there when the Commission was established, and was therefore able to give some background information.

He advised that the Commission was established for the purposes of operating a common landfill for the three communities of Banff, Canmore and the MD. He noted that there was disagreement on the value of the landfill site. He advised that he was directed to retain an independent party to determine value for the landfill site, and he retained Xenex to prepare a fair market evaluation of the site as a construction and demolition disposal site.

He notes that the final value of the lands to be purchased was appraised by Xenex at $525,000.00 and that Xenex utilized certain assumptions in coming to a 20 year projection of tonnages of materials to be deposited at the landfill site of 565,000 tonnes. [ 40 ] Mr. Kochan indicated that his understanding was that the Xenex Report derived its tonnages from the Stanley Report, and that the Stanley Report had excluded recyclables.

He says that the $525,000 figure included in the Purchase and Sale Agreement at paragraph 3.01, and the 565,000 tonne figure in that same clause both came from the Xenex Report. [ 41 ] Mr. Kochan was asked, from his background and experience with the waste management business, his understanding of terminology used. He indicated that “waste disposal” referred to waste taken to the site and left there permanently, and did not include recycling.

The word “landfilled” meant waste taken and left permanently, and therefore did not include recyclables; and the phrase, “waste tipped” means materials left there on a permanent basis and did not include recyclables. [ 42 ] In cross examination, Mr. Kochan acknowledged that the MD was not happy with, nor did it agree with, the amount set out in the Xenex Report as to valuation of the land. He acknowledged that in 1999 some construction and demolition waste could be recycled such as two by fours, concrete and paving materials.

He acknowledged that materials brought to the landfill but later diverted would generate a tipping fee for the Commission, or at least that, later on, a tipping fee was charged. He acknowledged that there was no discussion amongst the parties regarding tipping fees. [ 43 ] Ms. de Soto had arrived in Canmore in 1996 as Canmore’s Manager of Solid Waste. She was involved in the formation of the Commission from the beginning. She signed the Agreement as the Commission Manager. [ 44 ] Ms. de Soto had been the key contact with Stanley in relation to its March 1998 report, which was an update of a previous 1994 report.

She says, from the date of the Stanley Report to the time of the Agreement, the only recycling conducted in the region was recycling of concrete and asphalt which was being separately stored at the MD landfill site. [ 45 ] She said that such recycling was minimal at the time.

[ 46 ] As Manager of the Commission she studied and had to understand the Xenex Report as well as the Stanley Report. She notes that neither the Stanley Report nor the Xenex Report includes recyclables. Rather the Stanley Report had excluded recyclables, and the Xenex report was based on the Stanley Report tonnages. [ 47 ] Again, because of her background and experience in the waste management business, Ms. de Soto was asked of her knowledge of “industry usage of phrases”.

She stated that “waste disposal” refers to waste disposed in a landfill site and does not include recyclables; “landfilled” means buried in a landfill site and does not include materials that were to be recycled. “Tipped” meant “tipped at the landfill face” and therefore did not include items to be recycled. [ 48 ] She advised that the Purchase and Sale Agreement was drafted by a lawyer in Canmore who was retained by both parties to the Agreement, and stated that the wording was based on the Table Agreement. [ 49 ] She indicates that there was no discussion with respect to whether a hosting fee would be paid on recycling. [ 50 ] In cross examination, however, Ms. de Soto acknowledged that the word “tipped” was used in different ways in the documents presented to the Court.

For example, in Exhibit 2C,

Schedule A, in relation to “Tipping Fees”, the document refers to “tipped to the landfill working face. If Ms. de Soto’s definition of “tipped” was correct, then the document must be taken to state “tipped to the landfill working face, to the landfill working face”. She also acknowledged that “Tipping Fees” were being charged by the Commission for recyclables brought to the landfill site.

Accordingly, her proposition that in industry usage “tipped” only referred to waste that was to be buried at the face of the landfill site, was seriously brought into question. [ 51 ] She also acknowledged in cross examination that the negative effects of having a landfill site within the MD included increased traffic as a result of that landfill site; and that the traffic would be increased by customers bringing recyclables to the landfill site.

She acknowledged in questioning by the Court, that the Commission charged a Tipping Fee for recyclables, when those recyclables were brought to the landfill site and dumped there, and therefore recyclables are “tipped”. [ 52 ] Mr. Edison has worked in the waste industry since 1993. However he did not come to work for the Commission until 2007. He advised the Court that the subject landfill site is now recycling 60% of the materials delivered to the site. [ 53 ] Mr. Edison had been produced as the representative of the Commission at questioning.

The Plaintiff brought into evidence the following extract from page 22 line 14: Q Mr. Leveque: My question was whether the Commission considered recycling to be a non C & D waste related activity? A No, it’s considered part of C & D waste. Q The material that is recycled is C & D waste? A Yes. [ 54 ] In direct evidence Mr. Edison was taken to that “read in” statement. He indicated that, in giving that evidence at questioning, he was speaking for himself, and had made no inquiries of others. He noted that he was not involved with the Commission until 2007. [ 55 ] Mr.

Edison, in direct evidence, said that the customer could “tip the recyclable material”. He then changed his statement to “unload” rather than “tip”. He stated that, from his experience in the waste management industry, in 1999 “waste tipped” meant waste buried; “waste disposed” meant waste buried; and “waste landfilled” meant waste buried. He said that none of those terms included recyclables. [ 56 ] In cross examination, he acknowledged that his position as a landfill manager commenced in May 2007, after the dispute in this litigation had arisen.

He acknowledged that he knew he was the officer of the Commission when he gave his evidence in Questioning and acknowledged that the question put to him and later read in was not what he had considered, but rather what the Commission considered. On questioning from the Court, Mr. Edison acknowledged that the word “tipping” was used in relation to fees charged not only on materials buried at the landfill site but also in relation to recyclables, bringing into question his evidence that “waste tipped” meant waste buried. [ 57 ] Mr.

Tinholt did not commence his employment with the Commission until March of 2000, after the Agreement had been signed. Most of his evidence deals with the limitation issue to which I will make later reference. [ 58 ] Mr.

Tinholt was also asked, from his experience in the waste management industry, what the term “waste disposed” means and he indicated that it references waste buried and taking up space in the landfill and as such would not include recyclables. [ 59 ] In cross examination, he acknowledged that the words“Tipping Fees” were used not only with respect to waste buried, but also with respect to recyclables. The Plaintiff’s Position [ 60 ] The Plaintiff argues that in

Article 1.01(

f) the “Hosting Fee” means an amount paid for negative impacts associated with having the landfill located in its municipality. Negative impacts arose not only from the dumping of waste to be buried, but also from the dumping of recyclables. [ 61 ] The Plaintiff notes that neither “waste” nor “tipped” is defined in the Agreement. The Plaintiff refers to dictionary

definitions of “waste” as being items being left over or worthless, items useless and worthless. It references “recycle” as it appeared in the dictionaries of the time as “to use or process waste materials, to adapt for reuse; to repossess waste materials so that it can be used again”.

The Plaintiff argues therefore, that waste includes recyclable material. [62] The Plaintiff references two cases in which the word “waste” has been judicially considered. In R v Jopp Ventures Corp.,2001 BCSC 1051 , [2001] BCJ 1476, the British Columbia Supreme Court was called upon to review the acquittal of theaccused, Jopp, on charges of introducing waste into the environment. Jopp collected unwanted materials from many sources, groundthem up and composted them at his business site. He then packaged and sold the compost.

On Appeal, the issue was whether the trialjudge erred in concluding that materials that were recyclable were not waste, and whether she erred in concluding that the materials inquestion were yard waste and not municipal solid waste. The BC Supreme Court Justice held that the proposition that material that wasrecyclable was not waste could not be sustained. The materials handled were discarded by the persons who paid Jopp to take them away.They would no longer be waste when they had been converted into compost, but until then they were waste and therefore subject tolegislative provisions covering waste.

The Court followed a decision of the BC Court of Appeal in British Columbia (Minister of Environment, Lands and Parks) v Alpha Manufacturing Inc. (1997) 150 VLR 4th 193, and concluded that discarded material remains“waste” even though it has value to its recipient for some purpose, until such time as it is converted into a useful material. [63] The Plaintiff also refers to the decision in Greenisle Environmental Inc. v New Brunswick, 2007 NBCA 9 , [2007]NBJ 29; 2007 NBCA 9, decision of the New Brunswick Court of Appeal in 2007. [64] There Greenisle had appealed a Judge’s decision dismissing its application for judicial review.

Greenisle had an exclusivecontract to collect recycling materials from Prince Edward Island. It claimed an unfettered right to export recyclable beverage containersto New Brunswick and to be compensated for its efforts under the “Beverage Containers Act”. That legislation offered a refund ondeposits paid on recyclable containers purchased in New Brunswick. The Minister disagreed with the appellant.

The application judgeupheld the Minister, after concluding that his opinions were owed deference on the review standard of patent unreasonableness. [65] In dismissing the appeal from that decision, the New Brunswick Court of Appeal indicated at para 22: I agree that useless or unsaleable materials constitute waste. But I do not accept that the converse is true: useful and saleable materialscannot constitute waste. Certainly, one person’s garbage is another person’s treasure. The habits of the homeless are a testament to thisadage.

But no one would say that such discarded possessions do not qualify as waste or rubbish even though they may serve a usefulpurpose to some. Waste is the by-product of human activity, be it in the form of industrial or consumer waste. The fact that certain formsof waste or rubbish can be transformed into something of use or value is a testament to the ingenuity of those seeking to promote theenvironmental welfare of all.

It is not a reason to declare the materials should never have been classified as waste in the first place. [66] The Plaintiff disagrees with the Defendant that the word “tipped” has any particular meaning specific to the wastemanagement industry such as was indicated by a number of the Defendant’s witnesses, discussed above. The Plaintiff says “tipped”means “tilted” or “dumped”. [67] The Plaintiff notes that the expression being considered in paragraph 3.02 is “C & D Waste... tipped at the dry waste landfillsite”.

It notes that the dry waste landfill site is described as meaning the lands being sold under the Agreement and does not talk aboutbeing tipped into the landfill site, or at the landfill face. [68] The Plaintiff maintains that the Court should not take into account the evidence of the defence witnesses who are experiencedin the waste management industry as to the meaning of words used in the Agreement, since those witnesses were not qualified as experts. [69] The Plaintiff says that the Agreement defines Hosting Fee as being an amount paid for negative impacts associated withhaving the landfill site located in its municipality and agrees that those negative impacts arise both from traffic, litter and so on caused bythe delivery of waste to be buried and also from the delivery of recyclables. [70] The Plaintiff relies upon the evidence of the Defendant’s representative, Mr.

Edison, quoted above at paragraph 53, that theCommission considered recycling to be part of C & D Waste. [71] In

summary, the Plaintiff says that all materials dumped at the landfill site are “waste tipped”; accordingly that term includesrecyclables; and accordingly a Hosting Fee of $1.80 per tonne should be payable in relation to all recyclables brought to the landfill site. The Defendant’s Position [72] The Defendant takes the position that, pursuant to the terms of the contract, no hosting fee is payable on recyclables. Itmaintains that the purchase fee in clause 3.01 of the Agreement is derived from the Xenex Report, which in turn gets its tonnages fromthe Stanley Report, and which tonnages did not include recyclables.

Therefore, the Defendant says, “Waste tipped“ in clause 3.01 of theAgreement does not include recyclables; nor can “Waste tipped” in clause 3.02 of the Agreement, relating to the Hosting Fee, be givenany different meaning. [73] The Defendant also maintains that the plain and ordinary meaning of “waste” “disposal” and “tipped” leads to the sameconclusion. It maintains that the appropriate dictionary definition of “waste” is useless remains or by-products; “disposal” means thedisposing of garbage; “dispose of” means to get rid of.

It argues that “tipped” includes “tilt”; however, Canadian dictionaries note that inBritain the word “tip” is used as a noun, being a place where garbage is dumped. “Garbage” is anything worthless; “recycle” is toconvert waste to reusable materials; “landfill” is the disposal of refuse by burying it under layers of earth/ refuse disposed of in this way/an area filled in by this process. The foregoing

definitions are derived from the Canadian Oxford Dictionary 1998 edition, being theedition that would have been current at the time the Agreement was signed. [74] The Defendants also rely upon the evidence given by their witnesses knowledgeable in the area of recycling (Kochan, deSoto, Edison and Tinholt) as to trade usage of “waste disposal” “waste landfilled”, and “waste tipped” as all meaning waste buried in thelandfill and not including recyclables.

[75] The Defendants also argue that assistance can be obtained by reviewing waste control regulations in place in Alberta at thetime the agreement was reached, as follows:

a) Waste Control Regulation, Alta Reg. 192-96; 1(P) “dispose”, when used with respect to waste at a landfill, means the intentional placement of waste on or in land as its final restingplace; 1(gg) “recyclable” means a substance or mixture of substances of them that is intended to be recycled, but does not include oilfield waste; 1(ll) “waste” means any solid or liquid material or product or combination of them (

i) That is intended to be treated or disposed of, or (ii) That is intended to be stored and then treated or disposed of, but does not include oilfield waste or recyclables; [76] From the Activities Designation Regulation Alta Reg. 211-96, the Defendants reference the following; 2(1) (d) “dispose”, when used with reference to the disposal of waste at a landfill, means the intentional placement of waste on or in landas its final resting place; 2(1)(i) “landfill” means a waste management facility at which waste is disposed of by placing it on or in land, but does not include a landtreatment facility, a surface impoundment, a salt cavern or disposal well; 2(1)(o) “recyclable” means a substance or mixture of substances that is intended to be recycled, but does not include oilfield waste; 2(1)(t) “waste” means any solid or liquid material or product or combination of them (

i) That is intended to be treated or disposed of, or (ii) That is intended to be stored and then treated or disposed of, but does not include oilfield waste or recyclables; [77] The Defendant further argues that, if the Court finds the term “C & D waste tipped” to be ambiguous, i.e. capable of morethan one meaning, the Court should first be aware that, by virtue of the Entire Agreement clauses 9.01, 8.05 and 8.06 in the Agreement,the previous “Table Agreement” must not be considered or allowed to contradict the Agreement; nor can the testimony of Ed Latvala asto his subjective understanding of the Table Agreement or the Agreement itself be factored into the proper construction of the contract. [78] Relying on George Wimpey Canada Ltd. v Groveridge Imperial Properties Ltd. (1985) (AB KB), 64 AR174 (Alta QB) at para. 26, and Hoefle v Bongard & Company (SCC), [1945] SCR 360 (S.C.C.) at page 377, theDefendant says if there is ambiguity the Court is entitled to take into account the conduct of the parties after the agreement has comeinto effect as an extrinsic aid to

interpretation of the agreement. In that regard, the Defendant notes that the M.D. of Big Horn at all timeshad a member of its counsel on the Board of Directors of the Commission, as well as representatives of the M.D. attending commissionmeetings, and the Commission never paid the hosting fee on recyclables dumped at the landfill. The Defendants maintain that thissubsequent conduct of the parties is relevant to construction of the Agreement.

That subsequent conduct is the payment by theCommission to the MD of the Hosting Fee on buried waste only, without complaint by the MD until the filing of the Statement of Claim. Analysis [79] Recycling of Construction and Demolition materials was nascent in 1999. [80] The Agreement does not explicitly indicate whether recyclables are included in the calculation, either of the Purchase Fee orthe Hosting Fee. Either conclusion is possible from the words of the agreement.

Therefore, the words “C & D waste tipped” areambiguous. [81] I do not accept the evidence of the Defendant’s witnesses where they have indicated “waste tipped” has a meaning and usagein the waste management industry that it only includes waste buried.

The words “tipped” and “tipping” are used in a number of thedocuments placed in evidence, and also by a number of the witnesses as sometimes being in reference to waste buried, and other times inreference to recyclable materials. [82] Paragraph 1.01 (k), in defining the words “tipping fee”, talks about disposal of C & D Waste at the dry waste landfill site… Iam not convinced by the Defendant’s dictionary

definitions that “disposal…at the dry waste landfill site” necessarily implies the buryingof the materials. Any items bought by a customer to the landfill site are “disposed of” by the customer. The reference is not disposal “inthe landfill”, but is instead “at the landfill site”. [83] The Defendant has argued the term “waste landfilled”.

However, that term does not appear in the Agreement. [84] In short, none of the “trade usage” evidence provided by the Defendant’s witnesses was found by me to be reliable orpersuasive on the point. [85] Nor do I find references in Alberta Regulations that were in existence at the time to be persuasive as to the meaning of “wastetipped”. While those regulations make it clear that “waste” as used in the regulations does not include recyclables, that does not implycustomary or trade usage.

In fact, it might be argued to the contrary, that it was necessary for the legislature to indicate that recyclableswere not included in “waste” as used in those regulations, so as to make clear what otherwise might not have been clear, for the purposes

of the regulations. In any event, there is no evidence that the parties intended legislative

definitions of the word “waste” to apply to their Agreement. [ 86 ] The Plaintiff relied in part on the decisions in Jopp Ventures and Greenisle, supra as being judicial

interpretations of the word “waste” where it was held to include recyclables. It is to be noted, however that in Jopp, the Court was interpreting the Waste Management Act of BC, which provided

definitions for waste and for recyclable material. To my mind the Jopp Ventures decision is one of legislative

interpretation, and not of assistance here. [ 87 ] In Greenisle , again, “the pivotal issues are matters of statutory

interpretation” The Court, in Greenisle, distinguished waste, as seen by the depositor, from waste as seen by the receiver. “One person’s garbage is another person’s treasure”. [ 88 ] Put into our context, when the customer delivers his materials to the landfill, the customer considers those materials to be waste. Indeed, the customer has to pay a fee to dump those materials at the landfill. [ 89 ] To the landfill, however, the recyclables received are not waste.

They have a value, in that, once processed, they can be resold by the landfill owners to users of the recycled product. [ 90 ] Here the focus must be on the recipient of the materials not on the customer delivering materials to the landfill site. Are recyclables “waste” in the eyes of the landfill? I find that they are not. [ 91 ] The Defendant urges me to consider subsequent conduct where there is an ambiguity. I think any such consideration should be embarked upon with great caution.

One party’s understanding of the Agreement may result in conduct by that party being consistent with the understanding that party held, but it may do little or nothing to clarify the other party’s intentions. Here the Defendant managed the calculation and payment of the Hosting Fee to the Plaintiff without input by the Plaintiff into that calculation.

In those circumstances, I am not prepared to imply agreement by the Plaintiff to that subsequent course of conduct. [ 92 ] I am of the view that the Stanley Report and the Xenex Report form part of the “factual matrix” which the Court is to review in order to construe the agreement. Those reports constitute relevant facts that the parties must clearly have known and had in mind when they composed the written text of their agreement. The Latvala letter of January 22, 1989, referenced in paragraph 37 of these reasons shows the Plaintiff’s familiarity with the methodology used by Stanley to calculate tonnages.

Those tonnages did not include recyclables. [ 93 ] The parties knew that the tonnages used by Stanley were net of recyclables, and that the Xenex Report extrapolating tonnages over a 20 year period relied upon the net tonnages included in the Stanley Report. Therefore, the tonnages of “waste tipped” did not include recyclables, as recyclables had already been netted out by Stanley. [ 94 ] The Plaintiff argues that the expressed purpose of the Hosting Fee is that it be “an amount paid … for negative impacts associated with having the landfill site located in its municipality”.

The Plaintiff says negative impacts arise from the delivering of recyclables just as they do for waste to be buried; and that therefore the Hosting Fee should be paid on recyclables delivered. [ 95 ] I do not accept that argument. The expressed purpose of the Hosting Fee is clear; however, that expressed purpose does nothing to tell us which delivered materials the Hosting Fee is to be calculated upon. [ 96 ] As to the admission of the Defendant’s representative, set out in paragraph 53 above, I am prepared to accept Mr.

Edison’s explanation that he had not obtained the response from others and was giving his own reaction, even though he knew his answers were to be those of the Commission. The evidence of all the other defence witnesses leads me to conclude his evidence at Questioning was given in error. [ 97 ] In

summary, I find as follows;

a) The term “C & D waste tipped” is capable of bearing both meanings ascribed to it by the parties; accordingly, there is an ambiguity in the contract.

b) That ambiguity is not resolved by simply looking at the words of the contract as a whole. No definitive assistance in interpreting that term can be obtained from review of the rest of the contract.

c) The “entire agreement clauses” do not permit the Table Agreement to vary or contradict the terms of the purchase and sale agreement.

d) The subjective intentions of the parties are irrelevant to the construction of the agreement.

e) The trade usage evidence put forth by the Defendant was receivable in evidence, because those witnesses did not seek to tell the Court what the contract meant, but rather to shed light on what they maintained were trade usages. However, having received that evidence, I am unpersuaded by it, or that indeed any trade usage existed with regard to the term “waste tipped”.

f) The subsequent conduct whereby the Defendant only paid the Plaintiff for waste buried is not persuasive where the Defendant did so without input from the Plaintiff;

g) The materials delivered to the landfill by the landfill’s customers were certainly waste to those customers. However, the agreement relates to the ownership and operation of a landfill in which the parties have a mutual interest. To the landfill, recyclables are not “useless remains or byproducts”. Recyclables are useful to the landfill owners.

h) The Stanley and Xenex Reports form part of the factual matrix and should be considered as such. The tonnages derived from the Stanley Report and the Xenex Report, and imported into clause 3.01 of the Agreement were tonnages net of recyclables. This fact must be taken to have been known by each of the parties to the Agreement. It provides objective evidence as to the intentions of the parties.

[ 98 ] Accordingly, the Plaintiff’s claim against the Defendant fails based in the main on the objective evidence of intention provided by the Stanley and Xenex Reports.. Limitation Argument [ 99 ] It is not necessary for me to decide the limitation issue. However, should I be wrong in my

interpretation of the contract, I will go on to consider it. [ 100 ] The limitation argument succeeds. It is conceded by Mr. Paul Ryan that, by December of 2003 he was advised that the Hosting Fee was not being paid on recyclables, and he took that information to the MD.

At such point in time, the MD must be taken to have known: i. that the injury for which the claimant seeks a remedial order (failure to pay the Hosting Fee on recyclables) had occurred; ii. that the injury was attributable to the conduct of the Defendant; and iii. that the injury, assuming liability on the part of the Defendant, warranted bringing a proceeding. [ 101 ] Therefore, at the latest, in order to recover damages from the commencement of the operation of the Agreement, it was incumbent upon the MD to bring its action no more than 2 years after the December 2003 discovery. The Plaintiff did not do so.

The Plaintiff commenced this action September 16, 2008. [ 102 ] Therefore, if I am wrong with respect to my

interpretation of the contract, such that a Hosting Fee is indeed payable by the Commission to the MD in respect of recyclables, such Hosting Fee would only be payable with respect to recyclables received at the landfill site after September 15, 2006. Costs [ 103 ] The Defendant has successfully defended this action, and is accordingly entitled to costs. If those costs cannot be agreed upon by the parties, the parties have leave to further address me on that issue. Heard on the 7 th , 8 th , 9 th , 10 th and 11 th days of October, 2013. Dated at the City of Calgary, Alberta this 5th day of December, 2013. R.J.

Hall J.C.Q.B.A. Appearances: Dennis K. Yasui, Q.C. Brownlee LLP for the Plaintiff Nick Parker

Reynolds, Mirth, Richards & Farmer LLP for the Defendant _______________________________________________________ Corrigendum of the Reasons for Judgment of The Honourable Mr. Justice R.J. Hall _______________________________________________________ The following changes have been made to this Judgment: [28] In item 4 line 1, “Tinhold” is corrected to read “Tinholt”. [57] In line 1, “Tinhold” is corrected to read “Tinholt”. [58] In line 1, “Tinhold” is corrected to read “Tinholt”. [74] In line 2, “Tinhold” is corrected to read “Tinholt”. [78] In line 2, “ Ampersand ” is corrected to read “&”. [78] In line 5, “M.D. of Rockyview” is corrected to read “M.D. of Big Horn”.