Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West
Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 Stone Road West
Guelph, (Ontario) N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: AFRAAT@ontario.ca
Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email: AFRAAT@ontario.ca
AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL
APPEAL:
Niagara Country Fresh Poultry Inc. v Chicken Farmers of Ontario
Niagara Country Fresh Poultry Inc. v CFO 1998 ONAFRAAT 47
STATUTE:
Ministry of Agriculture, Food and Rural Affairs Act
HEARING:
October 30, 1998
November 9, 1998
1998-47
NEUTRAL CITATION:
1998 ONAFRAAT 47
Niagara Country Fresh Poultry Inc. v Chicken Farmers of Ontario
IN THE MATTER OF THE FARM PRODUCTS MARKETING ACT AND SECTION 16 OF THE MINISTRY OF AGRICULTURE AND FOOD ACT.
AND IN THE MATTER OF:
An Appeal to the Farm Products Appeal Tribunal by Niagara Country Fresh Poultry Inc. (“Niagara”) from the decision of the Chicken Farmers of Ontario, dated August 4, 1998 denying Niagara’s requests:
That the Board vary its decision to accept the recommendation of the Special Request Panel not to allocate Niagara any chicken for Quota Periods A-22 to A-28; and,
To increase Niagara’s base supply allocation for Quota Period A-22.
Before:
Jim Rickard, Chair; Denis O’Connor, Vice-Chair; Charles Broadwell, Vice-Chair; Moira Connell, Member.
Appearances:
Sherri Pinsler, counsel to the appellant, Niagara Country Fresh Poultry Inc.
Geoff Spurr, counsel to the respondent, the Chicken Farmers of Ontario.
Herman Tursktra, counsel to the Association of Ontario Chicken Processors.
Tom Graham, counsel to the Tribunal.
DECISION OF THE TRIBUNAL
This appeal was heard in Guelph, Ontario on Friday October 30, 1998. Niagara Country Fresh Poultry Inc. (Niagara) appealed to the Farm Products Appeal Tribunal (the Tribunal) from the decision of the Chicken Farmers of Ontario (the CFO), dated August 4, 1998 denying Niagara’s requests:
That the Board vary its decision to accept the recommendation of the Special Request Panel not to allocate Niagara any chicken for Quota Periods A-22 to A-28; and,
To increase Niagara’s base supply allocation for Quota Period A-22.
The Background
The CFO regulates the production of chicken in Ontario under a quota system. Each quota period a total allotment of chicken for Ontario is set by the CFO in conjunction with the Chicken Farmers of Canada (CFC). In arriving at its position the CFO consults with the Association of Ontario Chicken Processors (AOCP) on the production requirements for Ontario. A portion of this allotment is then assigned to each licensed chicken producer according to the quota held by that producer. Producers are required to grow their allotment of chicken and market that allotment to an approved chicken processor. There are penalty provisions for producers who grow more chicken than they are allotted by the CFO. Producers are allowed to contract with the processor of their choice to sell their production. Over the years several systems have been implemented by the CFO to assist producers in marketing their production to processors in an orderly fashion.
Niagara was a new entrant into the chicken processing industry in 1998. In November 1997, Niagara applied to the CFO for an assignment of supply starting in Quota Period A-19. This application was denied by the CFO and the CFO decision was upheld by the Tribunal.
Niagara applied to the CFO for an assignment of supply for Quota Period A-20. This application was denied by the CFO, appealed to the Tribunal which granted a supply of 100,000 kilograms for use in the domestic market and then the Minister reviewed the Tribunal’s decision and set the supply at 500,000 kilograms of live chicken.
The CFO allotted 600,000 kilograms of chicken to Niagara for processing in Quota Period A-21. The AOCP appealed this decision to the Tribunal which set the supply at 500,000 kilograms.
Niagara applied to the Special Request Panel (the Panel) for additional supply for Quota Periods A-22 through A-28. The Panel decided that the application did not meet the criteria set out in the CFO’s policies for assignment of supply by the Panel and so recommended to the CFO that no additional supply be made. The CFO accepted the recommendation of the Panel and did not assign any additional supply to Niagara from the 800,000 kilogram pool. This decision Niagara is now appealing to the Tribunal.
Preliminary Matters
At the beginning of the hearing Mr. Turkstra, counsel to the AOCP, requested party status at the hearing. He said that he represents the processors who made requests to the Panel and who may be adversely impacted by the decision of the Tribunal. Mr. Turkstra argued that the regulation establishing the Panel and setting out the rules and operating principles has not been appealed by Niagara. He said that, if the Tribunal is going to look at how the 800,000 kilogram pool was divided then the other processors want to participate in the debate. He pointed out that the Panel considered eight requests for supply. If the Panel was biased for any of the applicants, or if the Panel was operating under the wrong principles then the entire Panel decision has to be set aside.
Ms. Pinsler, counsel to Niagara, argued that the application by AOCP for party status was premature. She said that the Panel is an independent body that hears applications from processors for kilograms of supply independent of the AOCP and in confidence. She argued that the AOCP was not party to the presentation to the Panel and was not consulted in the decision making process for these applications. She said that Niagara’s first stage in this appeal is that the Panel decision that Niagara did not meet the criteria and so should not receive any of the 800,000 kilogram pool should be set aside as the Panel made an erroneous finding. If Niagara is successful in its argument on this point and there is a problem to correct, then AOCP has a place and should make submissions on behalf of the processors who did get an allocation of kilograms from the Panel. She argued that, if the AOCP is given party status then Niagara would be the only processor that would be making a presentation to AOCP when others did not and this is prejudicial to Niagara’s interests.
Mr. Spurr, counsel to the CFO, supported the AOCP application for party status. He also argued that the Tribunal should decide what remedies are available before it hears Niagara’s presentation. He said that once the Tribunal hears the Niagara presentation it has stepped into the shoes of the Panel and the presentation has to be put into the context of the Panel’s decision on all of the applications it considered. He said that the Tribunal needs to look at the whole picture and cannot determine if the Panel decision on Niagara was wrong without hearing all the other applicants as well. The Tribunal could then decide which applicants have more merit than the others just as the Panel was required to do.
In response, Ms. Pinsler told the Tribunal that it is an inefficient use of the Tribunal’s time to decide on a remedy first. She said Niagara is appealing the CFO decision to accept the Panel recommendation. The Tribunal should listen to the information and decide if an error was made. If the Tribunal decides no error was made and Niagara did not meet the criteria, then there is no need to debate the possible remedies. She said the Panel’s decision was that Niagara did not meet the criteria and in Niagara’s opinion that is an error the Tribunal can correct by adding more kilograms to the 800,000 kilogram pool. In this way, the additional supply to Niagara will have the same terms and conditions as the supply provided to the other successful applicants.
In response to questions from the Tribunal, Mr. Spurr advised that the only information the CFO could release to the Tribunal at this hearing is the decision on the Niagara application. The applications to the Panel by the other processors were made in confidence and the Panel’s decision and recommendation was provided to the CFO in confidence so the other applicant processors are the only ones that can release this information to the Tribunal. Mr. Turkstra advised that the other processors are prepared to provide this information to the Tribunal, if the Tribunal decides it should sit in place of the Panel. However, this would take time, and if the Tribunal wishes to hear this information he would need an adjournment to prepare his clients. Mr. Tursktra argued that if Niagara convinces the Tribunal that the Panel is biased the decision of the Panel should be thrown out and the matter returned for a new Panel. He said that once the Tribunal goes beyond the issue of bias on the Panel and begins to review the merits of the Niagara application the process would proceed without the evidence the other processors presented to the Panel and this should not be allowed. Mr. Spurr urged the Tribunal to decide that if there is a reasonable apprehension of bias then it should strike a new panel and let a new panel proceed to hear the applications and make decisions.
After considering the arguments the Tribunal told the parties that it was prepared to proceed and decide on the issue of bias on the part of the Panel. Because this is a narrow focus the Tribunal decided that the AOCP did not warrant party status in this part of the hearing. However, if bias is not found and the appeal continues on the merits of the Niagara application, the Tribunal will entertain an application for party status by the AOCP at that time. The Tribunal also told the parties that it would need to have all of the information that was available to the CFO if it is to make a decision on the merits of the Niagara application so the parties need to prepare for that eventuality if bias is not found and Niagara wishes to continue with the appeal.
The Issue
Arising from the preliminary matters there are two issue the Tribunal must decide at this time:
Considering all of the circumstances would Niagara have a reasonable apprehension of bias concerning the Panel making the decision for the special request pool in Quota Periods A-22 through A-28?
Has Niagara, by its conduct, waived its right to object on the basis of apprehension of bias?
The Evidence and the Findings
Ms. Pinsler told the Tribunal that it is irrelevant if there is an actual bias in the decision making process of the Panel. The test is:
“Would a third party reasonably informed of the circumstances have an apprehension of bias?”
Mr. Robert Beliak, one of the principles in Niagara, told the Tribunal that he and Mr. A. Sternberg, who had just completed his articling at the law firm of Tory, Tory, DesLauriers & Binnington, went to the meeting with the Panel. At the meeting Larry Martin, Chair of the Panel, commented that he knew Herman Tursktra and they were friends. Mr. Beliak said that he was concerned about the relationship between Martin and Tursktra at the time but he did not realize who Martin was. It was not until several weeks later when something from the George Morris centre was brought to his attention that he realized that Martin was the author of the industry report commissioned by the AOCP that was used against Niagara at the Tribunal hearing for Niagara’s Quota Period A-21 supply appeal.
In response to questions Mr. Beliak told the Tribunal that:
The presentation to the panel lasted about one hour with the comments, referred to above, from Martin being made in the last five minutes or so of the meeting. Niagara and its situation in the industry and how it got there was brought up by one of the panel members or in passing discussion.
He immediately discussed his concern about Martin’s comments with Mr. Sternberg and they decided there was nothing that they could do.
The fact that Martin was part of the panel did not give rise to an immediate concern.
The panel was fair during the hearing and he was not complaining about the hearing process.
The hearing was in the first week of July and it was October before he brought the issue of bias forward to his solicitor.
There was no question in his mind that for some reason Niagara has been put to the test. Niagara wants the opportunity to survive and he assumed the Panel decision was “more of the same” happening to Niagara. In his opinion it was unfair to Niagara to have anyone involved in a prior Niagara case involved in the panel.
He did not find the mood comfortable at the Panel meeting and he has a lot of apprehension coming to these meetings. He is concerned about what people are thinking. He said there is not a lot of good things said about Niagara. He concluded that the mood in the meeting room was acceptable but was very serious mood.
Mr. Spurr filed with the Tribunal letters from the members of the panel wherein they detailed their recollection of the meeting with Niagara. In the opinion of the Tribunal, the only significant information in these letters was a confirmation by Larry Martin that he did make remarks concerning Mr. Turkstra.
Mr. Guy Gullyat, president of Grand River Poultry Products told the Tribunal that he also made application to the Panel and feels he had an iron clad case that met all the criteria. His request for additional supply was denied. He understood that the Panel decision was final so did not appeal. If the Tribunal is going to consider the merits of the Niagara application then Grand River Poultry also wants its case reviewed.
In response to questions from the Tribunal, Mr. Gullyat said that he was aware of who was sitting on the Panel at least two weeks ahead of time and he informed himself of their qualifications. He said this was public information.
Mr. Herman Turkstra spoke to the Tribunal as a witness to the Tribunal. Mr. Turkstra read from his transcript of the June Tribunal hearing on the AOCP appeal of the Niagara supply in Quota Period A-21. Mr. Tursktra pointed out three instances where Larry Martin was identified as the author of the report on the effect of alternative supply allocation methods for new entrants to the chicken processing industry. He then told the Tribunal that he and Larry Martin did not have a relationship that would be defined as a friendship. He said that many years ago an association of people in the industry retained Larry Martin in a case and Mr. Turkstra was counsel. Mr. Turkstra also taught a law course in the Department of Agricultural Economics when Larry Martin was Chair of the Department. He said he has never seen Larry Martin at a social event and there has been no activity that could be remotely called friendship between them.
In summation Ms. Pinsler drew the Tribunal’s attention to the words of Lord Denning in the Lannon case. Lord Denning wrote:
“There must be circumstance from which a reasonable man would think it likely or probable that the justice, or chairman, as the case may be, would, or did, favour one side unfairly at the expense of the other. The court will not inquire whether he did, in fact, favour one side unfairly. Suffice it that reasonable people must think he did. The reason is plain enough. Justice must be rooted in confidence; and confidence is destroyed when right-minded people go away thinking: “The judge was biased”.”
Ms. Pinsler argued that, by authoring the report on alternative supply setting arrangements and aligning himself with the position of the AOCP against Niagara, Larry Martin has clearly given Niagara cause for concern and a reasonably informed independent third party would have an apprehension of bias about Martin being a part of the Panel. She said the Tribunal should find there are grounds for a finding of apprehension of bias and the Panel decision should be reviewed.
Mr. Spurr filed with the Tribunal excerpts from Brown and Evans “Judicial Review of Administrative Action in Canada” published by Canvasback Publishing 1998. At page 11-8 this reference quotes from the decision of the case of the Committee for Justice & Liberty v. Canada (National Energy Board, 1976 CanLII 2 (SCC), [1978] 1 S.C.R. 369 at 394-95, per de Grandpre J., dissenting) as follows:
The apprehension of bias must be a reasonable one, held by reasonable and right-minded persons, applying themselves to the question and obtaining thereon the required information. In the words of the Court of Appeal, that test is “ what would an informed person viewing the matter realistically and practically - and having thought the matter through- conclude.”
Mr. Spurr said that Mr. Beliak in his evidence told the Tribunal that he felt the process was fair the day he was at the Panel. He argued that is the best evidence that the process was fair. Mr. Beliak said so himself. He pointed out that both Mr. Beliak and Mr. Sternberg were present at the June AOCP hearing and were aware of Larry Martin’s work with the AOCP before the July meeting with the Panel. But, Mr. Beliak did not raise any concerns about Martin until October, long after the decision of the Panel.
The Tribunal examined the facts. The events known to the Tribunal are as follows:
On January 23, 1998, the Tribunal heard the appeal of Niagara for supply of chicken for processing for crop Quota Period A-19.
On March 30, 1998, the Tribunal heard the appeal of Niagara for supply of chicken for processing for crop Quota Period A-20.
On June 11 and 12, 1998, the Tribunal heard the appeal of the AOCP concerning the supply of chicken to Niagara for crop Quota Period A-21.
At the June hearing the AOCP filed a report titled “The Impact of Alternative Supply Allocation Methods for New Entrants to the Ontario Chicken Processing Industry An Examination of Prices, Costs and Capacity” by Larry Martin and Kevin Grier. The last paragraph of this report states:
“Over the last 25 years, North American plant capacity utilization has fluctuated between 75 and 88%. Even in the depths of recession plants have averaged 75% capacity. In Ontario, in a strong economy and a growing industry such as chicken, the industry is currently operating at only 52%. A reasonable approach could be to set some target, i.e. 75 to 80 percent of capacity utilization, that must be met before chicken production is allocated to a new plant. This would give the existing plants the opportunity to adjust at much lower operating costs.”
Mr. Beliak, Ms. Pinsler and Mr. Sternberg participated in the Tribunal hearing on June 11 & 12, 1998.
On July 3, 1998, Mr. Beliak and Mr. Sternberg made a presentation to the Panel seeking an increase in supply of chicken for Niagara. Larry Martin was chair of the Panel. Mr. Beliak consulted with Mr. Sternberg over remarks made by Martin immediately after the meeting and decided that “nothing could be done”.
On July 9, 1998, the CFO accepted the recommendation of the Panel that Niagara not be awarded any portion of the 800,000 kilogram pool.
On July 14, 1998, Niagara, through its counsel Ms. Pinsler, requested the CFO reconsider its July 9th decision.
On August 4, 1998, the CFO decided not to vary its decision to accept the recommendation of the Panel. In its decision letter the CFO stated: “There is simply nothing to suggest that the process and decision making of the SRP was not fair, reasonable and unbiased”.
On August 14, 1998, Ms. Pinsler filed with the Tribunal a Notice of Appeal from the July 3, 1998 decision of the CFO setting out the reasons for appeal as:
the Panel erred by improperly disregarding the evidence before it and failed to decide the application of Niagara on its merits as required;
the CFO proceeded in an unfair and improper fashion which denied Niagara its right to fairness and natural justice; and
such further and other grounds as counsel may advise and this Appeal Tribunal may consider proper.
On September 14, 1998 Ms. Pinsler wrote to the Tribunal indicating that “Niagara intends to present evidence to the Tribunal,…, in respect of its presentation before the Special Request Panel and the Panel’s decision.”
On October 7, 1998 Ms. Pinsler wrote a letter to the CFO in which she pointed out that Larry Martin was Chair of the Panel at the July 3, 1998 meeting and was also retained by the AOCP to provide an opinion in respect of the supply allocation to new entrants in the Ontario Chicken Processing Industry for use in the AOCP appeal of Niagara’s Quota Period A-20 supply. This is the first allegation of an apprehension of bias.
On review of these facts the Tribunal believes that a reasonable person would conclude that Mr. Beliak might have a reasonable apprehension of bias at the outset of the presentation to the Panel on July 3. He knew, or ought to have known that Larry Martin, Chair of the Panel, was the same Larry Martin who authored the report used by the AOCP in the Tribunal hearing June 11 and 12. Having found that Mr. Beliak should have been aware of the apprehension of bias during the proceeding, failing to object at the first opportunity, (i.e. at the meeting of the Panel) in the opinion of the Tribunal, constitutes a waiver of the bias. Therefore the Tribunal decided not to review the Panel decision on the basis of bias.
The Tribunal has previously in this decision indicated that it would review the Niagara application on the merits of the application vs. the criteria in the CFO policies only if it also reviews all of the other applications at the same time. The parties can apply to the Tribunal for a hearing date if they wish to proceed further with this appeal on grounds other than bias.
Dated at Guelph, Ontario this 9th day of November, 1998.