



COURT OF APPEAL FOR ONTARIO

CITATION: Krieser v. Garber, 2020 ONCA 699

DATE: 20201105

DOCKET: C66850 & C66910

Doherty, Hoy and Jamal JJ.A.

BETWEEN

Shari Krieser

Plaintiff (Respondent)

and

Anna
    Garber, Michelle Garber, Susin Garber,

Mike
    Nealon and Nealon Wood Products Ltd.

Defendants (Appellants)

and

George
    Krieser

Third Party

Peter W. Kryworuk and Jacob R.W.
    Damstra, for the appellants Mike Nealon and Nealon Wood Products Ltd.

A. Irvin Schein and Whitney E. Abrams,
    for the appellants Anna Garber, Michelle Garber and Susin Garber

Kenneth Prehogan and Lia Boritz, for the
    respondent

Heard: in writing

On appeal from the judgment of Justice Edward
    M. Morgan of the Superior Court of Justice, dated March 29, 2019, with reasons
    reported at 2019 ONSC 1974.

Hoy J.A.:

I.

OVERVIEW

[1]

This appeal arises out of the construction of a
    dock at a waterfront property on Lake Simcoe.

[2]

Anna Garber, Michelle Garber and Susin Garber
    (collectively, Garber) hired Mike Nealon and Nealon Wood Products Ltd.
    (collectively, Nealon) to design and build a dock at their property. In
    August 2011, Nealon, on behalf of Garber, applied for the necessary permit from
    what is now Ontarios Ministry of Natural Resources and Forestry (the MNRF).

[3]

On September 30, 2011, the MNRF issued the
    necessary permit (the Permit) and, in the spring of 2012, Nealon commenced
    construction of the new dock. But he did not situate the Garbers dock in
    conformity with the Permit and it curtailed Shari and George Krieser
    (collectively, Krieser) in the use of their neighbouring waterfront and boat.
    In 2014, Shari Krieser commenced proceedings against Nealon and Garber. A trial
    was held in late 2018, and the trial judge ruled that the Garber dock, as
    constructed, constitutes a nuisance.

[4]

Among other things, he ordered that Garber and
    Nealon, jointly and severally, at their expense, remove the dock from its
    present location. He ordered that Nealon and Garber pay Shari Krieser, the
    owner of the Krieser property, punitive damages in the amount of $100,000. He
    also awarded substantial indemnity costs of $518,000, jointly and severally,
    against Garber and Nealon, and a further $80,000 in cost solely against Garber.

[5]

Garber and Nealon (whom I will sometimes call
    the appellants) argue that the trial judges finding that the dock
    constitutes a nuisance, his grant of a mandatory injunction, and his award of
    punitive damages are all tainted by reviewable error. They seek leave to appeal
    the costs awarded. Nealon and Shari Krieser also seek leave to adduce fresh
    evidence on appeal.

[6]

On consent, the appeal proceeded in writing.

[7]

I would deny the motions to adduce fresh
    evidence on appeal. I would not disturb the trial judges finding of nuisance,
    nor would I disturb the grant of the injunction. But I would set aside his
    order of punitive damages against Nealon, grant Nealon leave to appeal the
    costs award against Nealon, and substitute an order requiring Nealon to pay
    costs in the amount of $108,000, all inclusive.

[8]

Below, I first explain the nature of the
    interference with Kriesers use and enjoyment of their property. Then, I
    address the arguments raised with respect to the trial judges finding of
    nuisance. Next, I turn to the issues the appellants raise in relation to the
    mandatory injunction and, in that part of this judgment, address the parties
    motions for leave to adduce fresh evidence. I then turn to the arguments they
    raise in relation to the punitive damages. Finally, I address the trial judges
    costs award.

II.

THE INTERFERENCE WITH THE KRIESER PROPERTY

[9]

Shari Kriesers lakefront property is
    immediately to the west of the Garber property. The Krieser property includes a
    small wooden dock on the eastern side and, just to the east of the dock, but still
    on the Krieser property, a marine rail system.

[10]

The Krieser family owns a 33-foot boat, which
    they previously parked on the marine rails. To land the boat on the marine
    rails, George Krieser, would typically start his approach some distance north
    of the shore. He would then head due south onto the rails.

[11]

Under the Permit, the Garber dock was to have
    been built well within the Garbers property. The plans included in the Permit
    application placed the dock at least 20 feet from, and parallel to, the projection
    of the property line between the Garber and Krieser properties. The Permit
    application included Kriesers consent to the installation of the Garber dock,
    as depicted in the application.

[12]

However, the Garber dock was not built in the
    manner described in the application. As built, it angles to west, towards the
    projected property line between the two properties. Consequently, it comes within
    three feet of the projected property line. Further, a shield of large,
    submerged boulders extends five feet across the projected property line. These
    boulders, which surround the Garber dock to protect it from winter ice, are
    directly north of Kriesers marine rail system.

[13]

The Kriesers have been unable to use their boat
    as before. George Krieser is the boats owner and primary operator. He has been
    a recreational boater for most of his life. Because of the submerged boulders,
    George Krieser could no longer head directly southbound into his docking
    station, as he used to. George Krieser tried to dock the boat several times in
    2012 but concluded that it was too dangerous. He was not comfortable
    approaching from the west and steering around and through the various
    underwater hazards. The Kriesers now dock their boat at a local marina.

[14]

The Kriesers complained of the erroneously
    constructed dock to the MNRF. In September 2012, the MNRF inspected Garbers newly
    built dock. The MNRF commenced proceedings and, on April 4, 2014, Mike Nealon pleaded
    guilty to the provincial offence of engaging in construction contrary to a work
    permit granted under the
Public Lands Act
, R.S.O. 1990, c. P.43. The
    agreed statement of facts stated that the erroneous construction of the dock
    was inadvertent. Mike Nealon was fined $4500 but no order was made requiring
    removal of the dock.

[15]

Shortly thereafter, on April 14, 2014, Shari
    Krieser commenced an action against Garber and Nealon asserting that the dock
    constituted a nuisance; seeking a mandatory order requiring Garber and Nealon
    to dismantle and remove the Garber dock, at their expense; and claiming punitive
    damages. Nealon brought a third-party claim against George Krieser, as the
    owner and primary operator of the Krieser boat, pleading that his negligence
    contributed to any nuisance suffered by the Kriesers.

[16]

Prior to trial, the parties made several offers
    to settle. These offers played a significant role in the trial judges reasons
    and, as I will discuss below, are relevant to various aspects of the issues on
    appeal. Most notably, in March 2015, Krieser made a with-prejudice offer to Garber
    to pay the entire cost of removing and rebuilding the Garber dock in the
    location depicted on the Permit; Krieser would have assumed responsibility for
    obtaining any necessary approval from the MNRF. Graber rejected this offer.

III.

NUISANCE

The trial judges reasons

[17]

The trial judge concluded that the dock
    constituted a nuisance.

[18]

In his reasons, he began by articulating the
    test for nuisance. He explained that nuisance is the interference with the use
    or enjoyment of land and that, in nuisance, the focus is on the harm suffered
    rather than fault or the nature of the conduct giving rise to the harm:
St.
    Lawrence Cement Inc. v. Barrette
, [2008] 3 S.C.R. 392, at para. 77.

[19]

To establish a claim in private nuisance, the
    interference with the owners use or enjoyment of the land must be both substantial
    and unreasonable:
Antrim Truck Centre Ltd. v. Ontario (Ministry of
    Transportation)
, 2013 SCC 13, [2013] 1 S.C.R. 594, at para. 19.

[20]

The trial judge noted that the phrase substantial
    has been interpreted in the negative to mean something other than minimal such
    that compensation will not be awarded for trivial annoyances, quoting
St.
    Lawrence Cement
, at para. 77. He observed that this test applies whether
    the nuisance is physical injury to land or an interference with the amenities
    of the land, citing
Antrim
, at para. 23.

[21]

As for the reasonableness criterion, the trial
    judge noted that the courts assess, in broad terms, whether the interference
    is unreasonable by balancing the gravity of the harm against the utility of the
    defendants conduct in all of the circumstances:
Antrim
, at para. 26.
    The trial judge also noted that the severity of the interference and the
    character of the neighbourhood are important factors in assessing the gravity
    of the harm, citing
Tock v. St. Johns Metropolitan Area Board
,
    [1987] 2 S.C.R. 1181, at p. 1191.

[22]

Citing
Antrim
, at para. 38, the trial
    judge observed that while the acts of a public authority will generally be of
    significant utility, acts that interfere with one persons property for the
    private good of another persons property will have a more difficult time
    establishing their utility as understood in the law of nuisance.

[23]

The trial judge had no difficulty in finding
    that the interference with the Krieser property was substantial.

[24]

He found that, as constructed, the Garber dock
    impede[s] access to the Krieser property, and consequentially deprives Krieser
    of an important amenity going to his and his familys use and enjoyment of the
    property. The dock sits squarely in front of the Krieser waterfront and
    amounts to a physical invasion of the Kriesers property. The trial judge
    rejected the appellants argument that George Kriesers aversion to docking his
    boat at the Krieser waterfront was that of an unduly sensitive property owner. He
    found that the risk of navigating around the Garber dock and boulders in the
    unpredictable waters of Lake Simcoe is a serious one. He accepted expert
    evidence that the approach was unduly risky and beyond the expected
    capabilities of a weekend cottager/boater such as George Krieser.

[25]

The trial judge also found that the actions of
    the appellants in building the dock were unreasonable. After all, Nealon, the
    actual builder of the dock, was convicted of a criminal offence for ignoring
    the approved plans and building the dock in the wrong place.

[26]

He concluded:

The Garber dock is directly in front of the
    boat rails on the Krieser propertys lakefront, and impedes access to those
    rails and to the Krieser property. The Kriesers, as recreational boaters, can
    no longer dock their vessel at their own property. There is no sense in which
    this misplacement of the Garber dock can be said to be reasonable. I find that
    it is not reasonable and constitutes a nuisance.

The issues raised regarding the trial judges
    finding of nuisance

[27]

The appellants concede that the trial judge
    correctly articulated the test for nuisance. However, they argue that he erred
    in several ways in applying it:

1.

While he directed himself that the focus is on
    the harm suffered rather than fault or the nature of the conduct giving rise to
    the harm, he focussed on what he found was the unreasonable conduct of the
    appellants.

2.

In concluding that the interference with the
    Krieser property was unreasonable, he failed to consider that:

a.

the difficulty in docking the Krieser boat only
    arises on windy or stormy days;

b.

the interference was created by the shield of
    boulders, and not the dock itself; and

c.

the character of the neighbourhood on the
    waterfront of Lake Simcoe and, in particular, that a user of the lake should be
    expected to navigate around neighbouring docks or other structures built in the
    lake.

3.

In concluding that the interference was
    unreasonable, he failed to balance the fact the dock would have been unusable
    if it had been built at the location designated by the Permit. On Nealon and
    Garbers evidence, the water may have been too shallow to allow for the parking
    of the Garber boat in the slip between the two arms of the dock, or on the
    eastern side of the dock. In August, after the water levels in Lake Simcoe fall,
    there would have been insufficient depth required to park a boat in any area of
    the dock.

4.

He erroneously concluded that this is a case of
    physical invasion. The Garber dock was built on Crown land, not the Kriesers
    land, and this is purely a case of loss of amenity. As a result, he
    short-circuited the reasonableness analysis.

Analysis

[28]

I am not persuaded that there is any basis to
    interfere with the trial judges conclusion that the construction of the Garber
    dock resulted in a substantial and unreasonable interference with Shari
    Kriesers use and enjoyment of her property. Indeed, I agree with his
    conclusion.

(1)

The trial judge did not improperly focus on the
    appellants unreasonable conduct

[29]

Turning to the appellants first argument, in
    nuisance, unlike in negligence, the focus is generally on the harm suffered
    rather than fault or the nature of the conduct giving rise to the harm. At
    paras. 28-29 of
Antrim
, Cromwell J. wrote this:

Generally, the focus in nuisance is on whether
the interference suffered by the claimant
is unreasonable, not on
    whether
the nature of the defendants conduct
is unreasonable.



The nature of the defendants conduct is not,
    however, an irrelevant consideration. Where the conduct is either malicious or
    careless, that will be a significant factor in the reasonableness analysis. [Emphasis
    in original.]

[30]

The trial judge was entitled to consider the
    appellants conduct in his reasonableness analysis. It was not the only factor
    the trial judge considered. The trial judge focussed on the fact that Kriesers
    use of their boat was impeded by the Garber dock and the boulders which were
    installed as part of the dock are directly in front of Kriesers marine rails.

(2)

The trial judge did not fail to consider
    relevant factors

[31]

I reject the appellants argument that the trial
    judge erred by failing to consider relevant factors.

[32]

The trial judge considered the weather
    conditions on Lake Simcoe. He found that Lake Simcoe weather conditions are
    volatile and unpredictable. This finding is amply supported by the evidence.
    The trial judge noted the evidence of David Fingold, the Garbers neighbour to
    the east, that the lake is windy and can change in a matter of moments. Mr. Fingold
    testified that he often goes out in nice weather and, by the time he returns to
    his dock, finds conditions to be much rougher.

[33]

As discussed, in assessing whether a private
    nuisance has been established, the focus is on the harm suffered by the
    plaintiff. The harm, in this case, is the interference with Kriesers ability
    to use their boat. Whether that harm is caused by the shield of boulders
    installed in conjunction with, and arguably part of, the dock, or another part
    of the dock, does not impact the assessment of the harm suffered and the
    reasonableness of the interference.

[34]

In his review of the legal test for nuisance,
    the trial judge noted that the character of the neighbourhood is an important
    factor in assessing the gravity of the harm and he was alive to the fact that
    the Krieser property fronted on Lake Simcoe, where boating was common. The appellants
    argument that the trial judge did not consider the lakefront character of the
    neighbourhood is an attempt to revisit the argument that the trial judge
    squarely rejected at trial, namely that it was possible to dock the Krieser
    boat with the boulders in place, George Krieser was an unusually sensitive
    boater, and the interference was therefore not a nuisance.

[35]

Referring to a colour-coded chart showing the
    water depths in the approach to the Krieser dock, the trial judge wrote as
    follows:

As Nealon explains it, Krieser could approach
    from the west or northwest rather from the north, veer away from or weave
    between the red coloured bands which are too shallow for his boat to navigate,
    cross the narrowest part of the orange band which is navigable but precarious,
    and turn his 33-foot boat to the south in time to avoid the boulders
    surrounding the Garber dock and line up evenly with the marine rails on the
    Krieser waterfront



The feat of navigation proposed by Nealon
    might or might not be possible to accomplish; what is certain is that it is not
    easy.

[36]

Further, George Kriesers method of docking his
    boat was used by others in the neighbourhood. The trial judge accepted the
    evidence of Mr. Fingold, who indicated that the safest way he has found to
    enter his own dock is to start his approach from some distance north of the
    lakeshore and head directly southbound into his docking station without making
    any unnecessary turns.

(3)

The trial judge did not err in his
    reasonableness analysis by failing to balance the greater benefit of the dock
    to Garber as built

[37]

I reject the appellants argument that the trial
    judge erred in his reasonableness analysis by failing to balance the harm to
    Krieser against the increased utility of the Garber dock to Garber as built.

[38]

Antrim
, at
    para. 2, explains that the reasonableness of the interference must be
    determined by balancing the competing interests. As to how that balancing
    exercise should be carried out, Cromwell J. wrote, at para 25, that the
    reasonableness of the interference must be assessed in light of all of the
    relevant circumstances.

[39]

The court is neither bound nor limited by any
    specific list of factors when considering the reasonableness of an interference,
    but should consider the substance of the balancing exercise in light of the
    factors relevant in the particular case:
Antrim
, at para 26. The
    court will sometimes readily conclude that an interference is unreasonable
    without having to engage in a lengthy balancing exercise:
Antrim
, at
    para. 50.

[40]

It is hardly surprising that the trial judge did
    not refer to the benefits accruing to the Garbers. The appellants did not argue
    at trial that their interference with the Krieser property was reasonable
    because the Garbers needed to locate their dock where they did to use their
    boat in August. The appellants position, at trial, was that they intended to
    build the dock in accordance with the Permit and it was built where it was due
    to an error by Nealon. In other words, any additional benefit was not something
    they had intended. In the circumstances, I see no error in the trial judges
    conclusion that there is little, if anything by way of utility to balance
    against the inference with Kriesers property.

[41]

Moreover, the trial judge engaged in the essence
    of the balancing question. He considered whether the interference was one that
    would not be tolerated by the ordinary occupier. He easily concluded that it
    would not.

[42]

I agree.

[43]

As noted above, reasonableness of the
    interference is to be considered in light of all of the relevant
    circumstances:
Antrim
, at para. 25. Here, it was highly relevant that
    the construction of the Garber dock was done contrary to the Permit to which
    Krieser consented. It was constructed exclusively for Garbers benefit. And, as
    constructed, it significantly interferes with Kriesers enjoyment of their
    waterfront home. In the circumstances, there is no reason why Krieser should
    bear the cost of this dock for Garbers benefit.

(4)

The trial judge did not otherwise short circuit
    the reasonableness analysis

[44]

Finally, whether the interference in this case
    is characterized as the loss of amenity or physical interference is of no
    moment. In
Antrim
, at paras. 49-51, faced with conflicting case law,
    Cromwell J. addressed whether the reasonableness inquiry must be conducted
    where the interference is material or physical, or only with respect to other
    types of interference, such as loss of amenity. He concluded that reasonableness
    is to be assessed in all cases where private nuisance is alleged, regardless of
    the type of harm involved. He recognized that it will not always be easy to
    distinguish between damage that is material or physical and loss of amenity,
    particularly where the nuisance is interference with access to land.

[45]

Here, contrary to Nealons assertion, the trial
    judge did not short-circuit the reasonableness inquiry on the basis that the
    interference was physical. The trial judge clearly understood the nature of the
    interference and he assessed the reasonableness of that interference in light
    of the relevant circumstances.

IV.

THE INJUNCTION

The issues

[46]

The appellants acknowledge that the grant of an
    injunction is a discretionary decision. The court will only interfere with the
    exercise of discretion if it was based on an error of law (determined on a
    correctness standard), a palpable and overriding error of fact, the
    consideration of irrelevant factors or the omission of factors that ought to
    have been considered, or if the decision was unreasonable in the sense that it
    is not compatible with the judicial exercise of discretion:
Aventis Pharma
    S.A. v. Novopharm Ltd.
, 2005 FCA 390, 44 C.P.R. (4th) 326, at para. 4;
Bellini
    Custom Cabinets v. Delight Textiles Limited
, 2007 ONCA 413, 225 O.A.C. 375,
    at para. 44.

[47]

The appellants argue that the trial judge
    omitted to consider several factors that ought to have been considered:

1.

He did not consider whether the injunction he granted was capable of
    enforcement by the court. In particular, he failed to consider that a
    government permit was required to remove the dock.

2.

He did not consider the principles of
    proportionality and fairness and whether the nuisance could be abated by a
    narrower and less burdensome order than removal of the dock. In particular, he
    did not consider whether the appellants offer of November 1, 2018, to move the
    boulders and shave the bulb off the western arm of the dock, would secure
    Kriesers right to comfortably access their boat.

3.

He failed to consider the public policy impact
    of ordering removal of the dock. In particular, he failed to consider how the
    removal of the steel piles in the lakebed could have a negative impact on fish
    habitats.

[48]

Nealon seeks to adduce what they characterize as
    new evidence that did not exist at the time of trial and which is necessary
    to deal fairly with the issues the appellants raise with respect to the
    injunction. Krieser opposes the admission of the proposed fresh evidence and,
    if it is admitted, seeks to adduce evidence in response.

[49]

Before turning to the issues raised with respect
    to the injunction granted, I will first address the motions to admit fresh
    evidence.

The proposed fresh evidence

The nature of the proposed fresh evidence
    and the parties positions

[50]

The trial judges reasons were released on March
    29, 2019. To date, the dock has not been removed. Nealons proposed fresh
    evidence addresses steps Nealon has taken to comply with, and whether it is
    possible to comply with, the injunction.

[51]

Section 134(4) of the
Courts of Justice Act
,
    R.S.O. 1990, c. C.43 gives this court discretion to receive further evidence on
    appeal in a proper case. Normally, the court will exercise its discretion to
    receive further evidence on appeal when (1) the tendered evidence is credible;
    (2) it could not have been obtained by the exercise of reasonable diligence
    prior to trial; and (3) the evidence, if admitted, will likely be conclusive of
    an issue in the appeal:
Sengmueller v. Sengmueller
(1994), 111 D.L.R.
    (4th) 19 (Ont. C.A.), at p. 23.

[52]

Nealon submits that the proposed evidence is not
    fresh evidence in the classic sense, because it did not exist at the time of
    trial; rather, it is new evidence of subsequent developments that would not
    have been generated but for the mandatory injunction ordered by the trial
    judge. Thus, the second normal requirement for the admission of fresh evidencethat
    the evidence could not have been obtained by the exercise of reasonable
    diligence prior to trialis inapplicable.

[53]

In such as case, the evidence will be admitted
    where (1) it is required to deal fairly with issues on appeal and (2) declining
    to admit the evidence could lead to a substantial injustice:
Sengmueller
,
    at p. 23. Nealon argues that the new evidence shows that what the trial judge
    assumed about future eventsnamely that a permit would be obtainedis incorrect
    and is required to deal fairly with issues on appeal. Further, Nealon argues
    that trial judges assumption underpinned the judges orders granting the
    mandatory injunction, punitive damages, and costs. Accordingly, Nealon submits,
    this is a proper case to admit the proposed further evidence.

[54]

Nealons proposed evidence consists of the
    affidavit of Mike Nealon, sworn January 31, 2020, and the affidavit of David
    Thompson, trial counsel for Nealon, sworn March 12, 2020.

[55]

The gist of Mike Nealons evidence is that he
    has been unable to secure a permit from the MNRF permitting him to remove the
    dock, but has obtained permits to move the boulders and shave the bulb off
    the western arm of the dock, thereby reducing its size. He also provides
    evidence regarding the trial judges ruling on a contempt motion alleging
    non-compliance with the judgment, brought by Krieser and heard on September 27,
    2019.

[56]

Thompson deposes that he has provided copies of
    the work permits submitted to Krieser and that counsel for Krieser has advised
    that they do not consider the work described in the permit granted as
    satisfying the judgment of the trial judge.

[57]

Krieser argues that Nealons proposed evidence
    fails to meet the test for the admission of fresh evidence on appeal. Mike
    Nealons affidavit evidence is not credible because it is the evidence of a
    party with a direct interest in obtaining an order on appeal that he not be
    required to remove the dock, not an expert. Krieser rejects Nealons
    characterization of the further evidence as new evidence. The injunction to
    remove the dock was always a live issue and Nealon, who testified that the he
    could probably get a permit to remove the dock, could have obtained this
    evidence at any time in the six years prior to trial. Had Nealon done so, Krieser
    would have had an opportunity to respond. Moreover, the proposed evidence is of
    limited probative value because it does not demonstrate that it would be
    impossible to remove the dock and piles using different methods or with a more
    detailed work permit application.

[58]

In the alternative, Krieser argues that if
    Nealon is permitted to adduce this proposed evidence on appeal, as a matter of
    fairness, they should be permitted to respond with the affidavit of Milo Sturm,
    sworn September 12, 2019. Mr. Sturm, who was called by Krieser as an expert at
    trial, appends his expert report of September 2019 (the Sturm report), which Krieser
    had filed in support of their contempt motion.

[59]

In his report, Mr. Sturm indicates that there
    are alternative, less obtrusive, methods for removing the dock than those proposed
    by Nealon. These methods could be submitted to the MNRF. Further, Nealon did
    not provide the level of detail typically required by the MNRF and did not
    sufficiently describe restoration methods. The essence of his report is that if
    the work is carried out properly and the permit applications are supported with
    appropriate documentation, including an aquatic habitat assessment and details
    of how the lakebed is to be restored, the MNRF should be able to consider and
    approve the removal options. Krieser argues that Mr. Sturms evidence
    demonstrates that it is not impossible to comply with the trial judges order
    and, accordingly, that Nealons proposed evidence has limited probative value.

[60]

In response, Nealon argues that Krieser misstates
    their position and the Sturm report should not be admitted. Nealon clarifies
    that they do not argue that it is
impossible
to obtain a work permit
    to remove the dock. Rather, Nealon argues that the trial judge erred in
    granting an injunction which may not be workable or possible, depending on the
    position of the MNRF. The Sturm report does not respond to this argument.

[61]

Further, Nealon argues that the trial judge had
    the Sturm report before him on the contempt motion and could have, but did not,
    direct that Nealon apply for a permit in accordance with Mr. Sturms proposal.
    Nealon says that Krieser inappropriately implies that the trial judge should
    have done so, and that it is not in the interests of justice to admit the Sturm
    report.

Analysis regarding admission of the proposed further
    evidence

[62]

I am not persuaded that this is a proper case
    for this court to receive further evidence on appeal.

[63]

Nealon testified at trial about the need for a
    permit, his close relationship with the MNRF, his successful track-record in
    obtaining permits and that he could probably obtain a permit to remove the
    dock.

[64]

As McKinlay J.A. noted in
Sengmueller
,
    admitting evidence on appeal which did not exist at trial could not possibly
    have affected the result at trial. It results in their being no finality to the
    trial process. Such evidence should be admitted only where it is necessary to
    deal fairly with the issues on appeal, and where to decline to admit the
    evidence would lead to a substantial injustice in result:
Sengmueller
,
    at p. 23.

[65]

Nealon argues that declining to admit the
    proposed fresh evidence would lead to the substantial injustice of, among other
    things, the appellants being required to comply with a mandatory injunction
    that is neither workable nor possible. I do not accept this submission.

[66]

Assuming that it is indeed properly
    characterized as new evidence, the proposed fresh evidence is not necessary
    to deal fairly with the issues on appeal. Although the trial judges order did
    not explicitly contemplate the difficulties Nealon and Garber may face in
    obtaining the necessary permits to remove the dock, the order as it stands is
    not unworkable. In my view, the issues can be fairly addressed on the evidence
    adduced before the trial judge and, below, I do so.

[67]

When disputes based on post-judgment events
    develop over the meaning of or compliance with a mandatory order and the trial
    judgment is also under appeal, the trial court, and not the appeal court, will
    in most cases be the appropriate forum to resolve these disputes.

[68]

The courts enforcement of its order is ultimately
    carried out through the contempt power. Exercise of this power is
    discretionary. So long as an alleged contemnor acts in good faith, taking
    reasonable steps to comply with the relevant order, the court may refuse to
    make a finding of contempt:
Carey v. Laiken
, 2015 SCC 17, [2015] 2
    S.C.R. 79, at para. 37.

[69]

As discussed above, Krieser has already brought
    a contempt motion in relation to the mandatory injunction. On September 27,
    2019, the trial judge ruled on this motion: see
Keiser v. Garber
, 2019
    ONSC 5617 (the Contempt Reasons).

[70]

It is clear from the Contempt Reasonswhich this
    court may consider, as they are neither fresh nor new evidencethat the
    appellants are not required to do the impossible: see
Korea Data Systems
    (USA), Inc
.
v
.
Aamazing Technologies Inc
., 2015 ONCA 465,
    126 O.R. (3d) 81, at para. 39. In his contempt reasons, the trial judge clarified
    his earlier injunction, at para. 10, noting that [t]he key to fulfilling what
    I ordered in my judgment is to remove the nuisance,
however
    that might appropriately be accomplished
 (emphasis added). The trial
    judge ordered that Nealon and Garber were to continue to use best efforts to
    obtain a work permit and to remedy the nuisance.

[71]

If necessary, the trial judge will determine
    whether the appellants have used their best efforts to do so and have thereby
    complied with the injunction, presumably in the context of a further contempt
    motion. The trial judge can then consider whether best efforts includes
    following the suggestions of Mr. Sturm in his report, provided to the
    appellants in September 2019.

Analysis of the issues raised with respect to
    the injunction

[72]

I accordingly consider the issues raised with
    respect to the injunction granted by the trial judge without regard to the
    proposed fresh evidence.

[73]

Injunctive relief is the ordinary remedy for a
    nuisance: see Robert J. Sharpe,
Injunctions and Specific Performance
,
    loose-leaf (2019-Rel. 28), (Toronto: Thomson Reuters Canada Ltd., 2019), para. 4.60.
    Typically, damages are awarded in lieu of an injunction only where the injury
    to the plaintiffs legal rights (1) is small, (2) is capable of being estimated
    in money, and (3) can adequately be compensated by a small money payment; and where
    it would be oppressive to the defendant to grant an injunction:
Shelfer v.
    City of London Electric Lighting Co.
, [1895] 1 Ch. 287 (C.A.).

[74]

However, mandatory injunctionswhich require the
    defendant not merely to cease some act but take positive actionraise special concerns.
    Requiring the defendant to take positive acts, as Sharpe explains, (1) changes
    the balance of burden and benefits as between the parties and (2) raises issues
    concerning the courts reluctance to become involved in ongoing supervision of
    complex obligations: see
Injunctions and Specific Performance
, paras.
    1.500-1.520.

[75]

The trial judge acknowledged that mandatory injunctions
    are to be used sparingly. He considered the test set out in
Shelfer
and noted that the defendant bears the burden of establishing the conditions to
    award monetary compensation instead of an injunction. He observed that the court
    should not adopt a position that effectively permits the defendant to purchase
    a license to interfere with the plaintiffs property rights. Citing
Carley
    v. Willow Park Gold Course Ltd.
, 2002 ABQB 813, 325 A.R. 27, he remarked that
    courts have found it appropriate to issue an injunction or affirmative order
    where a defendant has acted in reckless disregard of the plaintiffs rights or
    has through his or her conduct indicated an unwillingness to abate the
    nuisance. He noted that there was no evidence that Garber or Nealon did not
    have the money required to remove the dock and added:

Indeed, it was Nealons evidence that although
    it would be a significant amount of work, he could remove the dock and rebuild
    it in its properly authorized place. He testified that it would entail removing
    the protective boulders around the end of the dock, digging out the poles on
    which the dock is anchored, filling the holes this process would leave in the
    bed of the lake, and reconstructing the dock where it was supposed to bei.e.
    to the west of its present location. He indicated that it was only a matter of
    money and he would have done so had Garber given approval for the work.

[76]

The trial judge concluded that, under the
    circumstances, injunctive relief was appropriate.

[77]

For ease of reference, the appellants argue that
    the trial judge made the following errors, all of which relate to factors that they
    say ought to have been considered by the trial judge in granting the mandatory
    injunction:

1.

He did not consider whether the injunction he granted was capable of
    enforcement by the court. In particular, he failed to consider that a
    government permit was required to remove the dock.

2.

He did not consider the principles of
    proportionality and fairness and whether the nuisance could be abated by a
    narrower and less burdensome order than removal of the dock. In particular, he
    did not consider whether the appellants offer of November 1, 2018 to move the
    boulders and shave the bulb off the western arm of the dock would secure the
    Kriesers right to comfortably access their boat.

3.

He failed to consider the public policy impact
    of ordering removal of the dock. In particular, he failed to consider how the
    removal of the steel piles could have a negative impact on fish habitats.

[78]

Having regard to the evidence at trial, there is
    no reason to interfere with the trial judges exercise of his discretion in
    granting the injunction on the basis that he failed to consider these factors.

[79]

The fact that the trial judge did not
    specifically refer to the need for a permit in his reasons is not surprising,
    given the evidence at trial. Nealon testified about the need for a permit; his
    close relationship with the MNRF; his familiarity with their rules; his
    successful track-record in obtaining permits; his experience in removing piles and
    remediating the lakebed; and that, notwithstanding the fish habitat, he would
    probably be able to get a permit. George Krieser testified that Nealon had told
    him he can just walk in there [i.e. the MNRF] and get what he wants. The
    evidence at trial, including Nealons own evidence, left the impression that,
    as the trial judge wrote, removing the dock was only a matter of money and
    money was not an issue.

[80]

As to whether the nuisance could be abated by a
    narrower and less burdensome order than requiring the removal of the entire
    dock, George Kriesers evidence at trial was that the appellants offer first
    made on June 8, 2018 and clarified on November 1, 2018, to move the boulders
    and shave the bulb off the western arm of the dock, did not give him enough
    room to safely dock his boat. The trial judge accepted that George Krieser was
    not an unduly sensitive Plaintiff. The trial judges order requiring the
    removal of the entire dock was grounded in the evidence.

[81]

The appellants argue that the trial judges
    order requiring the removal of the dock was unduly burdensome as he failed to
    consider that, if the Garber dock were reconstructed in accordance with the
    Permit, the water would be too shallow for Garber to dock his boat. The only
    evidence at trial on this issue was Nealons. He testified that if the dock
    were moved, were into shallower water.  Im not sure [Garber] can get his
    boat in there. But Nealon also testified that he visited the site before
    applying for and obtaining the Permit. It cannot be said that it is unduly burdensome
    to require removal of the dock. Again, in the context of the evidence at trial,
    the trial judge did not err by failing to specifically consider the
    non-financial burden to Garber of relocating the dock. The fairness of the
    burden imposed by the mandatory injunction must be considered in light of all
    the trial judges factual findings, including those findings about Garbers and
    Nealons conduct which he made in the portion of his reasons addressing
    punitive damages and to which I turn in the next part of these reasons.

[82]

Finally, as for fish habitat, the only evidence
    at trial discussing the effect of the dock on fish habitat was Nealons. He
    testified that this is prime bass and perch habitat, that a fish biologist
    would have to approve what he proposed to do to the lakebed, and that he was
    very familiar with what the MNRF was looking for with respect to fish habitat. There
    was no expert evidence on this issue, and no evidence that the dock could not
    be removed without harming the lakes fauna. Indeed, Nealon testified about how
    he would remove the dock without damaging fish habitat. In the context of the
    record at trial, the trial judge did not err in not specifically considering
    the impact on fish habitat of removing the dock.

V.

PUNITIVE DAMAGES

The trial judges reasons

[83]

The trial judge began by considering the
    jurisprudence, including
Whiten v. Pilot Insurance Co.
, [2002] 1 S.C.R.
    595, regarding when an award of punitive damages is appropriate and directed
    himself that the overriding rule governing quantum is proportionality.

[84]

Citing
Weenen v. Biadi
, 2017 ONCA 533, 84
    R.P.R. (5th) 200, at para. 10, he wrote that, the protracted nature of the
    nuisance, and the failure to do anything to abate it once discovered, must
    therefore be factored into the punitive damages analysis.

[85]

The trial judge then outlined the facts that
    lead him to conclude that punitive damages were required in this case.

[86]

The trial judge accepted George Kriesers
    evidence that, around the end of April or the beginning of May 2012, he saw the
    partially constructed dock was too far to the west and spoke to Nealon about
    it.

[87]

Nealon did not stop building the dock.

[88]

On June 19, 2012, Kriesers lawyer wrote to
    Garbers lawyer complaining about the location of the dock, stating that it did
    not appear to be consistent with the Permit. Garbers lawyer wrote back, on
    June 27, 2012, taking the position that the dock complied with the Permit.
    (These letters, the trial judge noted, were inconsistent with Nealons position
    at trial that he discovered the mistake mid-construction and told Krieser
    about it.)

[89]

Garber continued to pay Nealon for the dock
    after receiving the letter from Kriesers lawyer. The trial judge observed that
    Garber failed to produce any correspondence to Nealon indicating that the dock
    is incorrectly built.

[90]

If the dock had been built in compliance with
    the Permit, there would have been what Nealon called a dogleg from the stone
    path to the dock, which Nealon indicated would have been aesthetically
    displeasing. But, as constructed by Nealon, the dock lined up with a stone
    path leading from the Garber house to the waterfront. This path was constructed
    after Nealon had secured the Permit. The misplaced dock fit perfectly with the
    landscaping. It also provided Garber with a far roomier waterfront than had
    they located it in accordance with the Permit.

[91]

The trial judge concluded that [n]one of this
    is truly explicable without some type of background agreement or tacit
    understanding between Nealon and Garber.

[92]

The trial judge also found Nealons testimony about
    how he came to make his mistake inexplicable. Nealon was unquestionably
    experienced; his explanation at trial was difficult to follow and he seemed
    to be changing it as he went along. The trial judge noted that Nealon, despite
    his extensive experience, had no history of mistakes such as the one at issue
    here. He found that it was very unlikely that Nealon would make such a patent
    error on this dock.

[93]

Most significantly, neither Garber nor Nealon
    did anything to remedy the problem when they were alerted to itand not because
    of the cost of doing so. (It cost $150,000 to build the dock the first time
    around but that amount included Nealons profit.) Garber rejected Kriesers
    March 12, 2015 with prejudice offer to pay for all the costs of moving the dock
    and protective boulders (the Krieser Offer). While the offer was not made to
    Nealon, he was aware of it.

[94]

The trial judge concluded:

It is clear to me that the protracted nature
    of the interference with Kriesers use and enjoyment of property has everything
    to do with Garbers and Nealons intentional conduct. It is hard to imagine a
    clearer case in need of a deterrent type of remedy. Krieser, as plaintiff, has
    offered to pay the full cost of remedying the interference with his property
    rights; Garber and Nealon, as defendants, are not interested in a remedy, even
    one fully funded by Krieser.

The harm inflicted by Garber and Nealon was
    aimed directly at Krieser. It aimed to expand the Garber waterfront and improve
    the aesthetics of the Garber waterfront, all at the expense of Kriesers use
    and enjoyment of their property. The case calls for a punitive damages award
    proportionate to the value of the dock.

[95]

The trial judge ordered Nealon and Garber to pay
    Shari Krieser punitive damages in the amount of $100,000.

The appellants arguments

[96]

Nealon raises two arguments. First, he argues
    that the trial judge erred by treating Garber and Nealon as one, without
    assessing whether punitive damages were required against them separately, and
    that punitive damages were not required against Nealon. In the alternative,
    Nealon argues that the $100,000 awarded in punitive damages was arrived at
    without the requisite consideration of whether it was the lowest award to
    rationally serve the purpose of punishing the appellants and deterring their
    conduct. Rather, the trial judge arbitrarily selected $100,000 because it was
    proportionate to the cost of the dock.

[97]

Garber makes three main arguments.

[98]

First, Garber argues that the trial judges
    finding that there was a background agreement or tacit understanding between
    Nealon and Garber about the location where the dock would be built is a
    palpable and overriding error. It was not supported by the evidence at trial.

[99]

Second, Garber argues that the trial judge erred
    in refusing to permit Garber to adduce what they characterize as character
    evidence about the Kriesers. They say, without that evidence, the trial judge
    was unable to appreciate the real reason why Garber would not accept the Krieser
    Offer.

[100]

Third, Garber adopts Nealons alternative argument.

Analysis

[101]

An appellate court has greater scope and discretion when reviewing
    an award of punitive damages than when reviewing an award of compensatory
    damages.

[102]

Punitive damages are reserved for exceptional cases, to punish,
    deter, and denounce malicious, oppressive and high-handed misconduct that
    offends the courts sense of decency:
Whiten
, at para. 36;
Hill
    v. Church of Scientology of Toronto
, [1995] 2 S.C.R. 1130, at para. 196.

[103]

The questions for this court are was the misconduct of the defendant
    so outrageous that punitive damages were rationally required to further one or
    other of the underlying purposes of punitive damages and was the quantum
    ordered, and no less, rationally required to do so?:
Hill
, at para.
    197;
Whiten
, at paras. 71, 74, 101 and 107;
Pate Estate v.
    Galway-Cavendish and Harvey (Township)
, 2013 ONCA 669, 117 O.R. (3d) 481,
    at paras. 201-202.

[104]

Where there are multiple defendants, any award of punitive damages
    must be justified with respect to the acts of each defendant. As Cory J.
    explained in
Hill
, at para. 195, there cannot be joint and several
    responsibility for either aggravated or punitive damages since they arise from
    the misconduct of the particular defendant against whom they are awarded.

Were punitive damages against Nealon
    rationally required?

[105]

I agree with the appellants that the trial judge erred in treating
    Garber and Nealon as one, without assessing whether punitive damages were
    required against them separately. As
Hill
instructs, punitive damages
    must arise from the particular conduct of the defendant against whom they are
    awarded.

[106]

In my view, the misconduct of Nealon was not so outrageous that
    punitive damages were rationally required to punish, deter or denounce it.

[107]

The protracted nature of the interference and the failure to
    accept the Krieser Offer were significantindeed, in my view, the most
    significantfactors in the trial judges decision to order punitive damages
    against Garber and Nealon.

[108]

However, the trial judge failed to consider that Nealons position
    was fundamentally different from Garbers. Nealon was a contractor, not the
    owner. Once the dock was installed, he could not move it without Garbers
    approval. His evidence was that he would have done so, had Garber approved it.
    Indeed, during a July 2012 telephone conversation, Nealon told George Krieser,
    I guarantee you theyll never move it. Nor could Nealon accept or rejector,
    presumably, cause Garber to accept or rejectthe Krieser Offer.

[109]

The trial judge found that Nealon was aware of the Krieser Offer.
    But being aware of an offer is different from being able to accept or reject
    it. Indeed, why would Nealon not have wanted Garber to accept the Krieser
    Offer? By the time of the Krieser Offer there was no question that the dock did
    not conform to the Permit: Mike Nealon pleaded guilty to the provincial offence
    of engaging in construction contrary to a work permit on April 4, 2014. Krieser
    offered to fix Nealons mistake, at no cost to Nealon. On the other hand,
    Garber had a clear reason to refuse the Krieser Offer: acceptance would have
    left Garber with a less attractive and less spacious waterfront, and, according
    to Nealon, shallower water at their dock. I do not think that Nealon can be
    held responsible for the protracted nature of the interference.

[110]

I appreciate that, on the trial judges findings, Nealons conduct
    is not otherwise without fault. He continued to build the dock after George
    Krieser told him it was too far to the west. Contrary to the agreed statement
    of facts at Nealons guilty plea to the provincial offence of engaging in
    construction contrary to a work permit, the trial judge in effect found that
    Nealons noncompliance with the Permit was intentional, and not a mistake. As
    Krieser urged at trial, the trial judge also found that there was some type of
    background agreement or tacit understanding between Nealon and Garber about
    the location of the dock.

[111]

While I agree with the trial judge that Nealons explanation of how
    he made what he testified was a mistake was difficult to follow and he seemed
    to be changing it as he went along, in my view, the inference regarding the initial
    intentional nature of Nealons noncompliance with the Permit is not strong. The
    fact that Nealon is experienced and has no history of making mistakes does not
    reasonably support an inference that he did not make a mistake. Experienced
    people make mistakes. There was no evidence of any upside to Nealon for not
    complying with the Permit. Nealon testified that he changed the angle of the
    dock to avoid creating a dogleg because, as a result of his measuring
    mistake, he thought he could do so and comply with the Permit.

[112]

However, assuming Nealons initial noncompliance with the Permit was
    intentional, I am not persuaded that his conduct was so outrageous that
    punitive damages are rationally required to punish, deter, and denounce it.

[113]

As I have said, in my view, the protracted nature of the
    interference and the failure to accept the Krieser Offer were the most
    significant factors in the trial judges decision to order punitive damages
    against Garber and Nealon and those factors properly relate only to Garber.

[114]

It must be recalled that the trial judge ordered
    Nealon to relocate the dock at his expense.
[1]
Further, the trial judge did not find that the intent of Nealons noncompliance
    was to interfere with Kriesers enjoyment of their property. The essence of
    Nealons misconduct was constructing the dock contrary to the Permit. Nealonnot
    Garberwas fined for engaging in construction contrary to the provincial
    offence of engaging in construction contrary to a work permit. The fact that
    punishment has actually been imposed by a criminal court for an offence arising
    out of substantially the same facts ... [is] a factor of potentially great
    importance in considering whether punitive damages are warranted:
Whiten
,
    at para. 69. The trial judge did not advert to this factor. While the agreed
    statement of facts at the criminal trial was that the noncompliance arose out
    of a mistake, not that it was intentional, in my view it is nonetheless a
    factor that weighs against the need for punitive damages against Nealon.

[115]

Given my conclusion that punitive damages against Nealon were not
    warranted, in my analysis of the punitive damages awarded against Garber I will
    address Nealons alternative argument that the trial judge failed to consider
    whether the $100,000 he awarded was the lowest award to rationally serve the
    purpose of punishing, denouncing and deterring the appellants conduct.

Punitive damages against Garber

[116]

I would not interfere with the trial judges award of punitive
    damages in the amount of $100,000 against Garber.

[117]

I reject Garbers argument the trial judge erred by ignoring an indemnity
    agreement, dated November 28, 2013, and a tolling agreement, dated June 11,
    2014, when awarding punitive damages. They argue that these agreements,
    discussed below, are inconsistent with any notion of a background agreement or
    tacit understanding between Nealon and Garber. They are also said to show that
    the trial judges finding, at para. 68 of his reasons, that Garber has never
    produced a single letter from a lawyer or personally to Nealon indicating that
    the dock is incorrectly built, which underpins his conclusion that there was
    some type of background agreement or tacit understanding between Nealon and
    Garber, is clearly wrong.

[118]

In broad terms, Nealon agreed to indemnify Garber against any action
    arising out of any errors or other acts done by Nealon in the performance of
    marine contracting services or the exercise or intended exercise of any duty,
    act or deed by Nealon for or on behalf of Garber at the Garber property. In
    the tolling agreement, Garber and Nealon agreed to toll the limitation periods
    in respect of any crossclaims or claims which either may have against the other.

[119]

These agreements were first drawn to the trial judges attention at
    the opening of closing argument, and after the close of evidence at trial. They
    were simply marked as exhibits at trial. There was no opportunity to conduct
    discoveries or question any witnesses at trial on those agreements. In these
    circumstances, the trial judge cannot be found to have erred in not having
    considered them.

[120]

However, even if the finding that there was a background agreement
    or tacit understanding between Nealon and Garber was a reviewable error, I
    would not interfere with the trial judges award of punitive damages against
    Garber. As I have said, the protracted nature of the interference and
    Garbers failure to accept Krieser Offer were, in my view, the most significant
    factors in the trial judges decision to order punitive damages against Garber.
    I agree with the trial judge that punitive damages are required to punish and
    denounce Garbers conduct and deter similar conduct.

[121]

I also reject Garbers argument that this court should interfere with
    the trial judges refusal to permit Garber to adduce what they characterize as
    character evidence about Krieser on the basis that it was not relevant:
Krieser v. Garber
, 2018 ONSC 7123 (the Character Evidence Reasons).

On appeal, this
    court will not lightly interfere with the discretionary decision by a trial
    judge to exclude potentially irrelevant evidence: see
R. v. Schavinsky
(2000), 148 C.C.C. (3d) 400 (Ont. C.A.), at para. 48.

[122]

Garber argues that the evidence ought to have been admitted as it
    was relevant to two similar, but conceptually distinct, arguments. First, they
    claim that the excluded evidence shows Krieser provoked Garber, which they say
    explains their refusal of the Krieser Offer and, thus, may have affected the
    award of punitive damages. Second, they claim that the evidence may have
    established that Krieser had unclean hands and, thus, that they may have been
    barred from equitable relief of an injunction.

[123]

The trial judge correctly noted that the plaintiffs conduct in
    provoking the actionable conduct by the defendant may be relevant to the
    assessment of punitive damages: Character Evidence Reasons, at paras. 4-5. The
    trial judge nonetheless refused to admit the evidence. He found that there was
    no causal connection between Kriesers alleged bad conduct and the building of
    the dock, as Garber and Nealon did not argue that but for Kriesers playing of
    loud music and causing smoke to drift over the Garber property, they would have
    moved their new dock. The trial judge noted that would have been an admission
    of liability then an attempt to minimize the consequences: Character Evidence
    Reasons, at para. 8. He concluded, at para. 9:

Without the requisite causal connection, the attempt
    to put the [Kriesers] conduct in issue is just bad character evidence and is
    extraneous to the issue at hand. As evidence that is unconnected to the claim
    against [Garber and Nealon], and that in any case relates to a form of defence
    that has not been pleaded by [Garber and Nealon], I will not allow it.

[124]

The trial judge relied on
BMO Nesbitt Burns Inc. v. Wellington
    West Capital Inc.
(2005), 77 O.R. (3d) 161 (C.A.) for the principle that a
    causal connection is necessary to establish the relevance of bad conduct to the
    availability of punitive damages. The holding in
BMO Nesbitt Burns
is
    somewhat more nuanced than that. But I see no error in the trial judges
    conclusion that the evidence should not be admitted, given the basis on which
    the case was argued at trial.

[125]

In
BMO Nesbitt Burns
, which was an appeal from a pleadings
    motion, this court considered whether the defendant should be allowed to plead
    and prove bad conduct by the defendant both (1) to establish the unclean hands
    of the plaintiff and (2) as a factor relevant to the availability of claimed
    punitive damages. With regard to the evidences relevance to the issue of
    punitive damages, writing for the court, Laskin J.A. noted, at para. 32, that
    the typical case where the plaintiffs conduct is relevant to a punitive
    damages claim is where the conduct led to or caused the misconduct of the
    defendantin other words, where there is a causal connection between the
    plaintiffs conduct and the defendants conduct.

[126]

While the defendants in
BMO Nesbitt Burns
did not allege
    that the plaintiffs conduct caused the wrongdoing on which the plaintiff relied,
    and the case was therefore not the typical case warranting the admission of
    bad conduct evidence, Laskin J.A. concluded, at para. 33, that the defendants
    should be able to argue that the conduct of which Nesbitt Burns now complains
    does not attract the kind of outrage associated with punitive damages because
    it is widely accepted in the industry and indeed has been employed by the
    plaintiff in its own recruitment of investment advisors. It was not plain and
    obvious that such an argument could not succeed.

[127]

As the trial judge observed, neither Garber nor Nealon argued that
    Kriesers conduct led to or caused them to build the dock where they did, or
    that they would have remedied the nuisance, but for this conduct. They thus
    failed to advance the casual connection typically required. Further, the
    evidence in question was not akin to what this court permitted the defendants
    in
BMO Nesbitt Burns
to plead. Garber did not seek to adduce evidence
    that Krieser had themselves constructed a dock which interfered with a
    neighbours enjoyment of her property and failed to remedy the interference, or
    that such interference is widely accepted in the Lake Simcoe community. There
    is no basis to interfere with the trial judges exclusion of this evidence on
    the basis that it was not relevant to the availability of punitive damages.

[128]

I reject Garbers argument that the evidence ought to have been
    admitted to establish Kriesers unclean hands. Garber did not plead the defence
    of unclean hands and, in the Character Evidence Reasons, the trial judge did
    not specifically address the evidences potential relevance to that doctrine. There
    is nothing before this court that indicates that trial counsel argued that the
    evidence was relevant to Kriesers entitlement to an injunction. The trial
    judge committed no error in failing to anticipate a defence apparently raised for
    the first time on appeal. Moreover, to rely on the clean hands doctrine, there
    must be a direct connection between the plaintiffs conduct and the equitable
    relief sought:
BMO Nesbitt Burns
, at paras. 26-29. Kriesers alleged
    misconduct played no role in the mislocation of the Garber dock nor does it
    directly relate to the continuance of the nuisance. As the trial judge noted,
    Garber and Nealon did not argue that, but for Kriesers alleged misconduct,
    they would have moved the dock.

[129]

Finally, I also reject the argument that the trial judge arbitrarily
    awarded $100,000 in punitive damages because it was proportionate to the cost
    of the dock and failed to consider whether the $100,000 awarded was the lowest
    award to rationally serve the purpose of punishing, deterring and denouncing
    Garbers conduct.

[130]

As the trial judge noted, the governing rule for quantum is proportionality:
Whiten
, at para. 74. From the whole of his reasons, it is apparent
    that the trial judge engaged in his careful consideration of proportionality to
    determine the lowest award to rationally serve the objectives of punitive
    damages.

VI.

COSTS

[131]

As noted above, the trial judge awarded substantial indemnity costs
    of $518,000 against Garber and Nealon, jointly and severally; he awarded a
    further $80,000 against Garber for costs thrown away due to the adjournment
    requested by Garber: see
Keiser v. Garber
, 2019 ONSC 3241 (the Costs
    Endorsement).

[132]

Nealon seeks leave to appeal the costs award, arguing that there was
    no basis for an award of substantial indemnity costs against him and that the
    costs award against him is grossly disproportionate. Nealon requests that any
    costs awarded against him be reduced to $108,000, roughly equivalent to the
    partial indemnity costs that Nealon incurred, and what Nealon says would have
    been within his reasonable expectations.

[133]

Garber also seeks leave to appeal the costs award, arguing that the
    award of substantial indemnity costs should be set aside because it flowed in
    large measure from Garbers non-acceptance of the Krieser Offer and the fresh
    evidence shows that offer is now completely irrelevant.

[134]

The test for leave to appeal costs is stringent. There must be
    strong grounds upon which the appellate court could find that the judge erred
    in exercising his discretion:
Alguire v. The Manufacturers Life Insurance
    Company (Manulife Financial)
, 2018 ONCA 202, 140 O.R. (3d) 1, at para. 36;
Walsh Energy Inc. v. Better Business Bureau of Ottawa-Hull Incorporated
,
    2018 ONCA 383, 424 D.L.R. (4th) 514, at para. 40. However, where there is no
    basis for an award of substantial indemnity costs of the trial, this court
    will grant leave to appeal costs and reduce the amount awarded to reflect
    partial indemnity costs:
TWI Foods Inc. v. Just Energy Corp.
, 2012
    ONCA 150, at para. 7.

[135]

I am satisfied that there was no basis for an award of substantial
    indemnity costs against Nealon. I would grant leave to Nealon to appeal the
    costs award and reduce the award against him to $108,000. I would not grant
    leave to Garber to appeal the costs award. Garbers argument depends on the
    admission of the proposed fresh evidence which I would not admit.

[136]

At paras. 11 and 12 of the Costs Endorsement, the trial judge
    explained why he ordered costs on a substantial indemnity scale:

Defendants both took untenable positions and
    fought the Plaintiffs claim tooth and nail even where what the Plaintiff
    claimed was self-evident. The Garber Defendants continued fighting even in the
    face of the most generous offer to settle I have ever seen.

The Nealon Defendants were likewise
    unreasonable. Mr. Nealon could not properly explain how he had made such an
    error as to build the Garber dock in the wrong place, and spoke as if he did
    not realize that the place where he did built it worked out perfectly for the
    Garber walkway and landscaping. The Nealon Defendants spent several years
    arguing that their actions were legal and reasonable when it was clear as day
    that they had built a dock in the wrong place (i.e. not in accordance with the
    building permit) and they had pled guilty to a criminal offence for those very
    actions. Indeed, the Nealon Defendants continue to do this in their written
    costs submissions, arguing that the fact that they were punished in criminal
    court with a fine rather than with a mandatory court order to remove the
    offending dock somehow authorized the existence of the wrongfully built
    structure for which the criminal fine was imposed. Their position suggests that
    they were and are determined to fight for the sake of fighting.

[137]

Substantial indemnity costs, because of a losing partys behaviour,
    should be rare and exceptional absent applicable settlement offers:
Whitfield
    v. Whitfield
, 2016 ONCA 720, 133 O.R. (3d) 753, at para. 23. They should
    only be ordered where there has been reprehensible, scandalous, or outrageous
    conduct on the part of one of the parties in the circumstances giving rise to
    the cause of action or in the proceedings:
Young v. Young
, [1993] 4
    S.C.R. 3, at p. 134. The fact that a defence has little merit or is ultimately
    unsuccessful is no basis for awarding substantial indemnity costs:
Mortimer
    v. Cameron
(1994), 17 O.R. (3d) 1 (C.A.), at p. 23. Nor does pleading
    guilty in criminal or regulatory proceedings alone merit elevated costs:
Foulis
    v. Robinson
(1978), 21 O.R. (2d) 769 (C.A.) at p. 776.

[138]

In his costs endorsement, unlike in his analysis of the punitive
    damages issue, the trial judge links non-acceptance of the Krieser Offer only
    to Garber. The conduct of Nealon that the trial judge describes does not amount
    to reprehensible, scandalous, or outrageous conduct. The fact that Nealon did
    not build the dock in accordance with the Permit and pleaded guilty to a
    criminal offence for that conduct does not mean that the dock constituted, or that
    Nealon intended to create, a nuisance. Nealon was entitled to defend the
    Kriesers nuisance claim. His lack of success at trial does not make his
    conduct reprehensible, scandalous or outrageous.

[139]

Moreover, as I have said, Nealons position was different from
    Garbers. The Krieser Offer was not made to Nealon and he could not accept it.
    Nor could he re-locate the dock without Garbers approval. It is unclear to me
    how Nealon could have brought the action to an end prior to trial without
    Garbers agreement. To the extent the termination of the litigation was within
    his control, Nealon demonstrated that he was prepared to support an offer
    acceptable to Garber: He joined with Garber in making the January 11, 2018
    settlement offer to Krieser, which contemplated payment of $150,000 in damages,
    payment of costs and disbursements. He also joined in a related offer, made
    June 8, 2018, which contemplated partial alterations to the dock.

VII.

CONCLUSION

[140]

I would dismiss the motion and cross-motion to adduce fresh evidence
    on appeal. I would allow the appeal to the extent of setting aside the order
    requiring Nealon to pay punitive damages. I would deny Garber leave to appeal
    the costs order, but grant Nealon leave to appeal the costs order, grant
    Nealons appeal of the cost order, and reduce the costs ordered against Nealon
    to $108,000 to reflect partial indemnity costs. As such, Nealon would be
    jointly and severally liable for $108,000 of the costs awarded against Garber.

[141]

I would order that if the parties are unable to agree on the costs
    of the appeal: Nealon will provide costs submissions in writing within 14 days
    of the release of this judgment; Garber will provide their submissions within
    14 days of receiving Nealons cost submissions; and Krieser will provide their
    costs submissions within 14 days of receiving Garbers cost submissions. Cost
    submissions shall not exceed five pages.

Released: DD NOV 05 2020

Alexandra
    Hoy J.A.

I
    agree. Doherty J.A.

I
    agree. M. Jamal J.A.





[1]
Nealon did not argue that the trial judge erred in ordering
    injunctive relief against him because he was not the owner of the property.


