Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West Guelph, Ontario N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email:Tribunal@OMAF.gov.on.ca

Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1, chemin Stone Ouest Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email:Tribunal@OMAF.gov.on.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL: Abolins v Agricorp

Abolins v Agricorp 2004 ONAFRAAT 25

STATUTE: Crop Insurance Act

HEARING: May 26, 2004

DATE OF DECISION: July 19, 2004

2004-25

NEUTRAL CITATION: 2004 ONAFRAAT 25

Abolins v Agricorp

IN THE MATTER OF The Crop Insurance Act (Ontario) and Ontario Regulation 140/96 under the Crop Insurance Act (Ontario) 1996, S.O. 1996, C. 17, Schedule C.

AND IN THE MATTER OF: An Appeal to the Agriculture Food and Rural Affairs Appeal Tribunal by Ilze Abolins, Demorestville, Ontario, from the decision of AGRICORP concerning the adjustment of her claim for her 2001 corn crop under Regulation 380/97 and the Crop Insurance Plan For Grain and Oilseeds.

Appearances:

Donald R. Good, counsel to the appellant, Ilze Abolins

Peter Wechselmann, counsel to the respondent, AGRICORP

DECISION OF THE TRIBUNAL

This matter was brought before the Agriculture, Food and Rural Affairs Appeal Tribunal on May 26, 2004 in Brighton, Ontario. Mrs. Ilze Abolins appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal from the decision of AGRICORP concerning the adjustment of loss of a corn crop planted in 2001.

Both parties indicated they had no objection to Mr. Klosler, who participated on a pre-hearing conference panel, also sitting on the panel hearing this appeal.

Statutory Context

Section 10 of the Crop Insurance Act (Ontario, 1996), S.O. 1996, Chapter 17, states:

Referral of disputes

10. (1) If AgriCorp and a person disagree whether the person qualifies for a contract of insurance, except if the disagreement relates to the time during which a person may apply for a contract of insurance or file a final acreage report or its equivalent, or if AgriCorp and an insured person fail to resolve a dispute arising out of the adjustment of a claim under a contract of insurance, either may appeal the matter in dispute to the Tribunal.

Notice of appeal

(2) To appeal a matter in dispute, the appellant shall file a written notice of appeal with the Tribunal and send a copy of the notice to the other party within the time specified by the regulations made under this Act.

Exclusive jurisdiction

(3) The Tribunal has exclusive jurisdiction to hear and determine all appeals arising under subsection (1).

Decision binding

(4) The decision of the Tribunal in an appeal is binding on the parties. 1999, c. 12, Sched. A, s. 7 (2).

Ontario Regulation 140/96 describes the appeal proceedings to be held under the Act. Section 3 of the regulation states:

3. (1) If the Commission and an insured person have failed to resolve any dispute arising out of the adjustment of a loss under a contract of insurance and have complied with all requirements respecting the filing of proof of loss forms, either party may appeal the matter in dispute to the Board. O. Reg. 140/96, s. 3 (1).

(2) To appeal the matter in dispute, the appellant shall file a notice of appeal with the Board and send a copy of the notice to the other party within one year of filing the proof of loss form. O. Reg. 140/96, s. 3 (2).

(3) Where a party has appealed in accordance with subsection (2), the Board shall fix a day, a time and a place for considering the matter in dispute and hearing the parties, and shall notify the parties accordingly. O. Reg. 140/96, s. 3 (3).

(4) On the day, and at the time and place so fixed, the Board shall hear the evidence of the parties respecting the matter in dispute, and shall make a decision on the matter. O. Reg. 140/96, s. 3 (4).

"Board" refers to the Crop Insurance Arbitration Board which was amalgamated with several other boards to form the Agriculture, Food and Rural Affairs Appeal Tribunal. "Commission" refers to the Crop Insurance Commission which is now AGRICORP.

Preliminary Matters

Late Documents

Mr. Peter Wechselmann indicated AGRICORP had received documents from Mr. Good by facsimile transmission on Friday, May 21, 2004 after the close of business, and by courier on Tuesday May 25, 2004. He submitted that the documents should not be accepted as they were filed after the date by which the Tribunal had ordered documents to be exchanged, and as it was unfair to his client to disclose the documents so close to the hearing date.

The Tribunal pointed out that the Tribunal's Rules of Procedure allowed it to accept late-filed documents.

Mr. Good explained that the documents in question were aerial photographs and an accompanying report which were in the nature of an expert report prepared in response to information disclosed by AGRICORP regarding acreage. He said he made every effort to deliver the materials to Mr. Wechselmann by Friday, May 25, 2004 so that he would have them five days before the hearing. He offered to have the witness who was to speak on the report appear on the second day of the hearing so that AGRICORP would have more time to review the material.

Mr. Wechselmann replied that it had been clear since October 2003 that the amount of acreage of the crop was in dispute and that the expert report should have been provided to AGRICORP earlier.

Order of Proceeding

The parties both requested that the Tribunal allow AGRICORP to present its case first, followed by the appellant.

Jurisdictional Question

Mr. Wechselmann informed the Tribunal that he wished to go on record as stating that even though AGRICORP appeared it did not agree that the Tribunal had the jurisdiction to hear the dispute. He explained that there was an issue with regard to jurisdiction, as the appeal was filed more than one year after the proof of loss form was filed. He said that if the Tribunal determined that it did have the jurisdiction to extend the time in which an appeal may be made, there was still an issue as to whether or not it should do so in this particular case.

Mr. Good and Mr. Wechselmann agreed that the appeal was initiated more than one year after the proof of loss form was filed. The proof of loss form was filed December 7, 2001 and the appeal was filed May 23, 2003.

Mr. Wechselmann took the position that the Tribunal, as an administrative tribunal, did not have the jurisdiction to extend a deadline that was created by statute, the right to appeal being a substantive rather than procedural matter. He submitted that the Tribunal could change its own rules of procedure, on its own volition. It could also waive statutory procedural rules, with the consent of the parties, to assume jurisdiction, but could not change substantive matters established by statute. In this instance, AGRICORP did not consent to an assumption of jurisdiction by the Tribunal. He argued that the statutory requirement that appeals be initiated within one year of the filing of the proof of loss form was a substantive matter. He informed the Tribunal that AGRICORP would not consent to waiving the appeal deadline, in the event the Tribunal was to determine that the limitation period was a procedural rule.

Mr. Wechselmann cited a number of court cases in support of his position that the limitation period was a substantive, not procedural matter and that administrative tribunals could not change deadlines created by statute. He also pointed out that the Tribunal had ruled in a previous matter before it (Dippel v. AGRICORP) that even with the consent of both parties, it had no jurisdiction to extend the appeal period. He suggested that a later decision of the Tribunal (Walsh v. AGRICORP), in which it determined the appeal deadline could be extended, was not legally correct.

Mr. Wechselmann referred to Kupeyan v. Royal College of Dental Surgeons of Ontario (1982), 1982 CanLII 1966 (ON HCJ), 37 O.R. (2d) 737, a decision of the Divisional Court, to illustrate the principle that a tribunal does not have the power to amend a statute or regulation that prescribes a procedure unless a power is expressly granted. He also made reference to the text by Sara Blake, Administrative Law in Canada, 3^rd edition, quoting from page 4 of the book:

No tribunal has unlimited powers. Tribunal powers are granted by statute and defined and limited by statute. A tribunal may make a decision or rule only if authorized by statute to do so.

Also among the cases cited to the Tribunal by Mr. Wechselmann was Re Hughes Boat Works Inc. and International Union, United Automobile, Aerospace, Agricultural and Implement Workers of America (UAW) Local 1620 et al., 1979 CanLII 1853 (ON HCJ), 26 O.R. (2d) 420, a decision of the Divisional Court (Reid, Grange, and Montgomery JJ.). In the decision, Reid J. wrote:

It is accepted that tribunals are established to perform tasks frequently in a particular way but always within a limited frame of action. The limits are set by the legislative charter to which each tribunal owes its authority. Tribunals have no inherent powers; any they have must spring from legislation.

In summary, Mr. Wechselmann indicated:

• Tribunals are created by legislative framework.

• Tribunals have no inherent powers.

• Tribunals must strictly comply with the legislative requirements, including time periods.

• Tribunals cannot waive statutory or procedural requirements without express authority.

• The Tribunal has no authority to change a statutory limitation period.

• The Crop Insurance Act (Ontario) provides no authority for the Tribunal to waive the limitation period.

• The Statutory Powers Procedure Act only provides authority to waive procedural matters on consent.

• The Tribunal has no authority to waive a statutory time period which is a substantive requirement, not a procedural one.

Mr. Good pointed out that none of the cases referenced by Mr. Wechselmann dealt with insurance law. He submitted that the Tribunal ruled correctly in the Walsh v. AGRICORP matter as it recognized that under the Insurance Act, the deadline for appeal could be extended under some circumstances. He relied upon George A. Demeyere Tobacco Farms Ltd. v. Continental Insurance Co., 1984 CanLII 1823 (ON HCJ), 46 O.R.(2d) 423, to support his position that the Insurance Act does apply to crop insurance notwithstanding a provision in the Crop Insurance Act that says it does not. Mr. Good argued that only certain sections of the Insurance Act do not apply to crop insurance.

Mr. Good also took the position that AGRICORP incorporated Section 129 of the Insurance Act into the contract of insurance which it sold to Mrs. Abolins. He said this section – Relief from forfeiture – was most commonly used in cases where an appeal is filed after a deadline. Mr. Good referred the Tribunal to the Crop Insurance policy – Contract of Insurance, Part One, Section Q, Paragraph 9 which states:

9. Relief from Forfeiture

a. The Insured shall not be entitled to relief from forfeiture except as may be expressly provided in the Act or the Regulations or in this Contract. b. For the purposes of clause Q.9.a., where there has been imperfect compliance with a condition as to the Proof of Loss to be given by the Insured or other matter or thing required to be done or omitted by the Insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against that forfeiture or avoidance on such terms as it considers just.

Mr. Good told the Tribunal this provided a contractual right to the appellant to have her appeal heard, even though the date for filing the appeal was not met. He said this section of the contract gave the Tribunal the jurisdiction to hear the matter. Mr. Good submitted the Tribunal should apply the legal principle of contra preferendum which holds that a contract that is drafted by one party, in this case AGRICORP, should be interpreted in favour of the other party, in this case Mrs. Abolins.

Mr. Good also stated that the appellant did not agree that AGRICORP had not consented to waiving the appeal deadline. Argument was not heard on that point, as the Tribunal determined it would decide the jurisdictional issue first.

Mr. Wechselmann said he disagreed with Mr. Good's interpretation of the Walsh v. AGRICORP decision. He said the gist of that decision was that the appeal deadline could be extended if this would not prejudice either party.

Mr. Wechselmann argued that relief from forfeiture was designed to prevent an insurance company from using a technicality to avoid paying a claim; he submitted that the late filing of an appeal is a substantive issue, not a technicality. He also argued that the contract of insurance referred to a court, not the Tribunal, in Part One, Section Q.9.b. He also noted that the contract of insurance provided that in the case of a conflict, the Act and regulations would apply.

Mr. Good submitted there was no conflict between the Act and regulations which were silent on the question of relief from forfeiture, and the contract of insurance. He pointed out that the term 'court' was not defined in the contract and submitted that since appeals came to the Tribunal, it should be considered the 'court'.

The Issues

The issues before the Tribunal are:

1. Does it have the jurisdiction to hear an appeal submitted more than one year after the proof of loss form is filed?

2. If it does have the jurisdiction to hear this appeal, should it do so?

3. Should the Tribunal allow documents submitted by the appellant after the date ordered for the exchange of documents to be entered into evidence?

4. Should the Tribunal alter its usual order of proceeding?

Analysis and Conclusions

Jurisdictional Issue

After hearing the submission of the parties, the Tribunal retired to consider the matter and gave an oral decision on May 26^th 2004, in which the Tribunal found that it did not have jurisdiction to hear the appeal. This decision constitutes the written reasons for the decision given orally.

The Tribunal notes that the Crop Insurance Act (Ontario) requires that appeals must be filed within a time period established by regulation, and that time period is one year from the date that the proof of loss form is filed. The parties agreed that the appeal was not filed within that time period. The proof of loss form was filed December 7, 2001 and the appeal was filed May 23, 2003. That is, the appeal was more than six months later than the statutory limitation.

The Tribunal accepts the argument of Mr. Wechselmann that the limitation period is a substantive requirement for an appeal, not a procedural matter, and because the matter is substantial the Tribunal cannot waive the timeframe for filing an appeal. The Tribunal was persuaded by the case law presented by AGRICORP. This panel of the Tribunal recognizes that past decisions of the Tribunal have gone both ways on the question of whether or not the Tribunal can extend a deadline for appeal under the Crop Insurance Act. This panel of the Tribunal is consistent with the decision made in Dippel v. AGRICORP; and is not in agreement with the decision made in Walsh v. AGRICORP.

Mr. Good submitted that the Tribunal ruled correctly in the Walsh v. AGRICORP matter as it recognized that under the Insurance Act, the deadline for appeal could be extended under some circumstances.

Before addressing the effect of the Walsh decision in the matter presently before the Tribunal it is necessary to comment in a general way about previous decisions of the Tribunal. Tribunals are not bound by the concept of res judicata (a matter already decided by the court), as are our courts. The role of tribunals differs from courts in that as well as settling disputes of the parties before it an administrative tribunal is required to consider and apply changes in government policy as well as statute law. Each panel of a Tribunal must make an independent decision based on the evidence and argument before it, even if that means coming to a different decision than another tribunal on the same issues between the parties.

To the extent that the Walsh decision means that the Tribunal has discretion to extend a statutory appeal period this panel finds itself not in agreement with that decision. However, it is noted that in the reasons for the Walsh decision the Tribunal stated:

" …we do not believe that the limits set by the legislation and regulations can be ignored in every case. This discretion should only be exercised in clear cases where, as in the present one, the time for launching the appeal was within a short time after the expiry date, the Appellants were actively pursuing perceived remedies and that there was no prejudice shown to the Respondent."

If this panel was of the view that it had a discretion to extend the appeal time limit, it would not exercise it because the facts do not support the mitigating conditions quoted immediately above, in particular, the fact that the appeal was not made "within a short time after the expiry date".

Mr. Good referred to George A. Demeyere Tobacco Farms Ltd. v. Continental Insurance Co., to support his position that the Insurance Act does apply to crop insurance notwithstanding a provision in section 2 of the Crop Insurance Act, 1996:

"2. The Insurance Act does not apply to anything done under this Act."

The Demeyere case is unfortunately not helpful to the Tribunal in determining the question of jurisdiction in this case. It was decided in 1986 under a different statutory scheme than the current Crop Insurance Act and its administration through AGRICORP, both of which came into being in 1996.

In any event, it is the view of the Tribunal that even if the Insurance Act did apply it would not overcome the jurisdictional problem that the statutory requirement that an appeal to the Tribunal must be made within one year after the filing of a proof of loss.

Mr. Good urged the Tribunal to consider the contract of insurance, specifically the area that deals with relief from forfeiture. Because the Tribunal is prevented from hearing the appeal by Subsection 10(2) of the Crop Insurance Act (Ontario), it has no discretion to go further and consider the contract. However, if this panel were to look at the contract, it would note that Part One, Section Q.9.b refers to a court and that that administrative tribunals are not courts. Also, the contract may not reflect what the statute says, and if that is the case the contract provides that the law prevails in the event of a conflict.

Since Mr. Good has in his argument raised the issue of relief from forfeiture in his argument, the Tribunal must address it. Relief from forfeiture in insurance law arises when during the time a policy is in force; the insured contravenes a condition, the penalty for which is the policy becoming void. It is questionable whether or not the Tribunal would have jurisdiction in facts such as the present matter to provide relief from forfeiture, although it is possible that a court might exercise such jurisdiction. The Tribunal notes that there is jurisprudence underlying the principle that failure to commence an action in time does not constitute non-compliance with a contract of insurance that would lead to relief from forfeiture. In National Juice Co. Ltd. v. Dominion Insurance Co., 1977 CanLII 1375 (ON CA), 18 O.R. (2d) 10, the Ontario Court of Appeal found that the failure of an insured to commence an action within the time limited by the insurance policy did not cause a "forfeiture or avoidance of the insurance against which the Court may relieve when it considers it equitable to do so". In Falk Bros. Industries Ltd. v. Elance Steel Fabricating Co., 1989 CanLII 38 (SCC), [1989] 2 S.C.R. 778, the Supreme Court of Canada reviews the issue of relief from forfeiture and recognizes that a court may exercise a remedial interpretation of the relief from forfeiture provisions of The Saskatchewan Insurance Act, R.S.S. 1978, c. S-26, where the claimant failed to give notice of his claim to the insurer within the time prescribed by a labour and material payment bond, but confirms the principle that failure to commence an action within a statutory time period will be a bar to relief from forfeiture.

The same principles would apply to a situation where an appeal of a denial of a claim under a policy was not made within the time required under the governing statute, or in the contract of insurance.

In explaining its decision orally the Tribunal drew to the attention of the parties a recent decision of the Ontario Court of Appeal, Cheong v. Ontario (Minister of Finance), judgement dated February 11, 2004, and cited as [2004] O.J. No. 378. In Cheong, the appellant had been assessed under the Retail Sales Tax Act, R.S.O. 1990, c. R.31, for retail sales tax owed by a corporation of which he had been a director. The appellant had a right under the Retail Sales Tax Act to appeal to the Superior Court of Justice. The statutory appeal time was ninety days. Unfortunately the appeal was filed on the ninety-first day, and the court was asked to find a way to extend the time since the Minister refused to consent to an extension. The Court of Appeal analysis of whether the court had jurisdiction to extend the time for service of a notice of appeal provides guidance in circumstances similar to the case before the Tribunal. The decision in this case underscores the difference between discretion to vary a procedural matter as opposed to a substantive matter. The question of apparent hardship resulting from an interpretation against extending a statutory appeals times is summarized in paragraph 31 by quoting the Supreme Court of Canada:

31. The inability of the court to relieve against the ninety-day limitation period that results from this statutory interpretation may seem to carry draconian results. Indeed, as Iaocobucci and Major JJ. Wrote in their dissenting opinion in Novak v. Bond, 1999 CanLII 685 (SCC), [1999] 1 S.C.R. 808 at par. 8: "Almost all applications of limitations statutes will seem harsh. But their finality should not obscure their value."

The Tribunal notes that while in this case the statute involved provides no discretion for the Tribunal to extend a time for an appeal, there are provisions in some statutes for the relevant tribunal to vary the time provided in the statute. For example, in the Drainage Act, Section 100 gives a broad discretion to the Tribunal with respect to applications, appeals and references:

"Extension of time

100. The Tribunal, in any case that it considers proper, may extend the time otherwise limited for application, appeal or reference. R.S.O. 1990, c. D.17, s. 100."

In the absence of a similar provision in the Crop Insurance Act, 1996, the principles of statutory interpretation would lead to the conclusion that the legislature did not intend to create a discretion in the Tribunal to extend the time for an appeal.

The Tribunal notes that the contract of insurance includes a "severability" provision so that the whole of the contract would survive in the event that a defective part was severed. The Tribunal also notes that if there are defects in either the Crop Insurance Act or its regulations, that the proper forum to correct such defects is the Legislature, not this Tribunal. However, the Tribunal is not persuaded in this case that any defects have been demonstrated.

Other Issues

Because the Tribunal determined it did not have the jurisdiction to hear the appeal, there was no need to rule on the other issues. The Tribunal does note that the late filing of documents by parties is not productive for good hearings and good decisions.

Decision and Reasons

After careful consideration of the evidence and submissions made, the Tribunal decided it did not have jurisdiction to hear the appeal.

The reason for this decision is the Tribunal does not have the jurisdiction to waive a substantive matter established by the statute. The limitation period for initiating appeals under the Crop Insurance Act (Ontario) is established in the legislation and the Tribunal is not authorized by the statute to vary it.

DATED AT Toronto, Ontario this 19^th day of July, 2004.