Agriculture, Food and Rural Affairs Appeal Tribunal

1Stone Road West Guelph, Ontario

Tribunal d’appel de l’agriculture,

de l’alimentation

et des affaires rurales

N1G 4Y2

Tel: (519) 826-3433, Fax: (519) 826-4232

Email:Tribunal@OMAF.gov.on.ca

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:

Elite Swine Inc. et al. v Ontario Pork Producers' Marketing Board

Elite Swine Inc. et al. v OPPMB

[Prehearing Order] 2004 ONAFRAAT 30

STATUTE:

Ministry of Agriculture, Food and Rural Affairs Act

HEARING:

September 2, 2004

DATE OF DECISION:

September 10, 2004

2004-30

NEUTRAL CITATION:

2004 ONAFRAAT 30

Elite Swine Inc. et al. v Ontario Pork Producers' Marketing Board [Prehearing Order]

IN THE MATTER OF THE FARM PRODUCTS MARKETING ACT AND SECTION 16 OF THE MINISTRY OF AGRICULTURE, FOOD AND RURAL AFFAIRS ACT:

AND IN THE MATTER OF: An Appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Elite Swine Inc. and Cold Springs Farm Limited from a decision of the Ontario Pork Producers' Marketing Board (OPPMB) not to rescind its decision to increase the service charge on all Ontario hogs by $0.80 per hog in its Board Regulation 9-2004 Schedule B.

AND IN THE MATTER OF: A motion by the OPPMB for an Order that the stay of the

Board's Regulation 9-2004 be lifted.

Before: John Taylor, Vice Chair; Tom Hall, Member

Appearances:

Sean Foran, representing the applicant (respondent in the appeal, the OPPMB

Elizabeth Patrick, assistant to Mr. Foran

Robert Shapiro, representing the respondents to the motion (appellants in the appeal), Elite Swine and Cold Springs Farm Ltd.

DECISION OF THE TRIBUNAL

This pre-hearing motion was considered in Guelph, Ontario on Thursday, September 2, 2004. The motion relates to an appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal (the Tribunal) by Elite Swine and Cold Springs Farm Ltd. (CSF). The appeal relates to a decision of the Ontario Pork Producers’ Marketing Board (OPPMB) to increase the service charge on sales of hogs for slaughter from $1.75 per hog to $2.55 per hog.

The OPPMB sought an order to the effect that there was no automatic stay of its decision; or an order that the stay be lifted. In the alternative, the OPMB sought an order limiting the scope of the stay and requiring the increased service be paid, but that the OPPMB segregate 80 cents per hog of the service charge and maintain records of those producers who had paid the higher service charge. The appellants sought an order that the stay, which they contended was automatic, be implemented and monies paid by producers as a result of the increased service charge be returned to producers.

Statutory Context

Subsection 16.(6) of the Ministry of Agriculture, Food and Rural Affairs Act states:

Effect of appeal

16. (6) Where, by virtue of subsection 25 (1) of the Statutory Powers Procedure Act, an appeal under subsection (1) or (2) operates as a stay in the matter, the Tribunal may limit or define the scope of the stay.

Subsection 25. (1) of the Statutory Powers and Procedures Act, states:

Appeal operates as stay, exception

25. (1) An appeal from a decision of a tribunal to a court or other appellate body operates as a stay in the matter unless, (a) another Act or a regulation that applies to the proceeding expressly provides to the contrary; or

(b) the tribunal or the court or other appellate body orders otherwise. 1997, c. 23, s. 13 (21).

Positions of Parties

Automatic Stay Issue

Mr. Sean Foran told the Tribunal the OPPMB had increased its service charge in order to fund its defense in countervail and anti-dumping investigations initiated by the United States of America. He said the OPPMB increased the service charge by passing a regulation, and the subsequent appeal by Elite Swine and CSF did not trigger an automatic stay of the regulation.

Mr. Foran argued that there is no automatic stay on a decision unless so ordered in a statute. He pointed out that the appeal was brought to the Tribunal under the Ministry of Agriculture, Food and Rural Affairs Act (MAFRAA) and that Section 16 of that Act indicated that an automatic stay is only in place if the conditions of Subsection 25(1) of the Statutory Powers Procedure Act (SPPA) are met. He said that the SPPA did not apply because the OPPMB had not made a “statutory power of decision”.

Mr. Foran said that the OPPMB decision was made as the result of a vote of the board directors, and was a legislative or political decision, rather than a quasi-judicial decision. He said that just because a board is exercising a power given to it by statute, it was not necessarily a “statutory power of decision”, which is a legal term defined in the SPPA. He pointed to case law and Sections 1 and 3 of the SPPA to support his position that the SPPA does not apply to legislative or political decisions. Mr. Foran also stated that the OPPMB had not been obliged to hold a hearing before making its regulation, and submitted that it would not be able to function if every decision it made was stayed on appeal. He suggested that the existence of Subsection 16(6) in the MAFRAA showed that the intent of the statute was that some decisions would be automatically stayed while others would not.

Mr. Foran argued the decision of the OPPMB to raise money by increasing service charges applies to all producers and was no different than a decision on how to spend the monies raised, and was therefore political. He contrasted this with a licensing decision that applied to only one producer, which he said would be a quasi-judicial decision, and subject to an automatic stay.

Mr. Shapiro told the Tribunal the appellants (respondents to the motion) took the position that an automatic stay of the OPPMB decision was triggered when they appealed. He said the OPPMB did exercise a “statutory power of decision” and therefore the stay provisions in the SPPA and the MAFRAA were applicable. He agreed with Mr. Foran that the actual passing of the regulation which increased the service charge was legislative, but argued that the decision of the OPPMB not to revoke its decision, after a hearing was quasi-judicial. Mr. Shapiro submitted that the SPPA excludes the process of passing regulations but not the effect of those regulations.

Mr. Shapiro said the fact that a hearing before the OPPMB is a pre-condition to launching an appeal under the MAFRAA is further evidence that the legislature meant there to be a stay on the OPPMB decisions. He argued that the OPPMB decision fell under Section 3 of the SPPA because it used its statutory authority to make the decision, and the decision affected the rights and liabilities of the appellants (respondents to the motion).

Mr. Foran responded that there no functional difference between a decision to make a regulation and a decision not to revoke a regulation. He argued that since Mr. Shapiro agreed that the original decision to pass the regulation was legislative or political, it followed that the decision not to revoke it was in the same category. He said it was the regulation itself, not the decision not to revoke it, that was really under appeal.

In response to a question, Mr. Foran said a Tribunal Rule of Procedure indicating that appeals trigger an automatic stay unless the statute provides otherwise did not apply in this matter. He said the MAFRAA clearly referenced the SPPA and that if the SPPA did not apply a stay to the OPPMB decision, the Tribunal Rule could not. He submittd the governing legislation clearly stated the conditions under which the Tribunal can limit or define the scope of a stay.

Limiting or Defining Scope of Stay Issue

All parties agreed that a three-point test should be used to determine if a stay should be lifted. The test is:

• Assess the merits of the application to determine if a serious issue to be decided

• Determine whether the decision maker will suffer irreparable harm if the stay continues

• Assess the balance of convenience.

The parties agreed that the appeal was a serious issue that met the first test.

Mr. Foran submitted that, as a public authority, the OPPMB did not have to meet the same standard of proof of irreparable harm as would a private entity. He referenced a number of legal cases. He said public authorities were assumed to be protecting the public interest and that the OPPMB operates in the best interest of Ontario pork producers. Mr. Foran stated the OPPMB was obligated to respond to the U.S. challenges.

Mr. Foran pointed to an affidavit of Beverly De Vries, Manager of Regulatory Affairs and Enforcement, OPPMB. He said the affidavit showed that there was the potential for drastic economic consequences to Ontario pork producers as a result of the U.S. investigations. He said the OPPMB was retaining experts to prepare its response. He pointed out that the affidavit indicated accounts payable for this initiative exceeded the funds raised to date.

Mr. Foran argued that the balance of convenience favored the OPPMB. He explained the OPPMB had identified which producers had paid the higher fee, and how much they had paid, since the service charge was increased. He said the OPPMB could pay back the fee if the Tribunal finds in favour of the appellants after the appeal is heard.

Mr. Foran said that if his argument that there was no automatic stay of the OPPMB decision was correct, then the appellants would likely seek to have a stay imposed. He said they had provided no evidence of irreparable harm to support such a request.

Mr. Shapiro argued that the OPPMB should have to meet a higher than usual standard of proof in order to prove irreparable harm as it was seeking an order to lift the stay, not just to limit or define the stay. Mr. Shapiro said the key case cited by Mr. Foran in support of a lower standard of proof, and a past Tribunal decision that the appellants provided, both dealt with issues of serious public health and safety. He argued that this was not the case in the current appeal before the Tribunal.

Mr. Shapiro told the Tribunal the OPPMB had not provided evidence that it would be irreparably harmed were the stay to be lifted. He said the appellants had asked the OPPMB to document its need for the additional funds to be raised through the increased service charge but the OPPMB had not provided this information. Mr. Shapiro also said that the Beverly De Vries affidavit only stated that lifting the stay could cause irreparable harm, not that it will. He pointed out that the OPPMB had a $7 million reserve fund that it could draw upon if necessary. Mr. Shapiro argued that in the absence of evidence of irreparable harm, the balance of convenience argument put forth by Mr. Foran does not apply. Mr. Shapiro cited legal cases in support of his position.

Mr. Shapiro submitted the OPPMB had taken an unreasonable amount of time to reach a decision on the appellants’ request. Mr. Foran countered that the OPPMB had followed the process outlined in the MAFRAA and that it had taken the initiative to bring a motion to the Tribunal when it became apparent there was a misunderstanding as to whether or not there was a stay in effect.

The Findings

Automatic Stay Issue

There are three provisions that apply to stays that relevant to this matter. The first of these is the provision in Subsection 25(1) of the SPPA that an appeal from a tribunal (the OPPMB) to an appellant body (the Tribunal) operates as a stay unless:

(a) “another Act or a regulation that applies to the proceeding expressly provides to the contrary; or

(b) the tribunal or the court or other appellate body orders otherwise.”

Also relevant is whether the SPPA applies to the particular decision under appeal. Subsection 3(1) of the SPPA states:

Application of Act

3. (1) Subject to subsection (2), this Act applies to a proceeding by a tribunal in the exercise of a statutory power of decision conferred by or under an Act of the Legislature, where the tribunal is required by or under such Act or otherwise by law to hold or to afford to the parties to the proceeding an opportunity for a hearing before making a decision. R.S.O. 1990, c. S.22, s. 3 (1); 1994, c. 27, s. 56 (5).

The second applicable provision is subsection 16(6) of the MAFRAA which specifically gives the Tribunal the authority to “limit or define the scope of the stay”.

The third provision is found in the Tribunal’s own Rules of Procedure. Rule 33.07 states:

Stay

33.07 Unless otherwise specified in the Act governing the matter under appeal, an appeal to the Tribunal operates as a stay in the matter under appeal subject to the right of the Tribunal to limit or define the scope of the stay.

The moving party, which is the respondent in the appeal, has made the contention that the decision of the OPPMB to implement additional service charges by way of regulation is not an exercise of a “statutory power of decision”, to which the SPPA applies. The definition of “statutory power of decision” is found in Subsection 1(1) of the SPPA as follows:

“statutory power of decision" means a power or right, conferred by or under a statute, to make a decision deciding or prescribing,

(a) the legal rights, powers, privileges, immunities, duties or liabilities of any person or party, or

(b) the eligibility of any person or party to receive, or to the continuation of, a benefit or licence, whether the person is legally entitled thereto or not; ("compétence légale de décision")

The Tribunal finds that the effect of the regulation imposing the service charge prescribes a legal liability on every pork producer in the province. Therefore the OPPMB decision is one that fits into the definition outlined above.

The moving party also took issue that the type of decision was more of a legislative or administrative type of decision, rather than a judicial or quasi-judicial decision. His view is that the nature of this decision is more aligned with an administrative decision than one that was quasi judicial. Mr. Foran referred to several cases which he stated support that view.

Mr. Shapiro on the other hand is of the view that even if the original OPPMB decision to pass a regulation to increase the service charge is not reviewable by this Tribunal, that the later decision of the board of directors of OPPMB to maintain its regulation is reviewable. His position is that the OPPMB, when requested by the appellant to review its own decision, refused to reverse itself and that decision, which was made after a hearing, was in the nature of a quasi judicial decision, thereby triggering the right to appeal and an automatic stay on its implementation.

All parties agreed that some decisions made by the OPPMB are decisions that may be reviewed under the SPPA. The issue at question was whether the SPPA applies to this particular decision. The Tribunal finds that the SPPA, as well as the Tribunal Rules of Procedure specifically address the question of an appeal of a decision of a local board. It follows that, we find that the provision with respect to an automatic stay is triggered by the fact that the OPPMB has made a decision not to rescind its prior action in implementing additional service charges.

Limiting or Defining Scope of Stay Issue

All parties agreed that a three-pronged test should be used to determine whether or not a stay should be lifted. The parties differed on their interpretation of who had the onus to show irreparable harm from the stay, as the appellants took the view the stay was already in place, and the respondent (the moving party) took the view that there was no stay and the appellants would have to meet the test of irreparable harm and balance of convenience to obtain one.

Having found that there is a stay by virtue of the appeal, the Tribunal finds that the onus shifts to the moving party, the respondent in the appeal, to demonstrate that there will be irreparable harm. The affidavit evidence and other arguments submitted by counsel for the moving party have not satisfied this panel that there will be irreparable harm caused to the OPPMB if the stay should remain in place.

The appellant and the respondent are doing their best to have the appeal prosecuted before Tribunal at an early opportunity. Therefore the Tribunal feels that the suspension of the collection of the service charge will not detrimentally affect the operations of the OPPMB. Moreover, if the appeal is not successful, the OPPMB may reinstate the collection of the additional service charges and generate the desired funds. It does not appear there is an immediate need for the Board to have this additional funding in place.

Decision and Reasons

After careful consideration of the evidence filed and the submissions made the Tribunal orders:

1. The motion by the OPPMB for an order lifting the stay of the Board’s Regulation 9-2004 is dismissed.

2. The OPPMB is directed to suspend the collection of the additional 80 cents per hog in service fee effective AU 30 04.

3. The OPPMB is directed to maintain records sufficient to account to all producers who have paid the higher service charge since the implementation of the regulation the amount of funds that have been collected from each of them as a result of the additional 80 cent per hog service charge.

The reasons for this decision are apparent in the findings above.