Ontario Dairy Council v Deputy Director, 2006 ONAFRAAT 10

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

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

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL: Ontario Dairy Council v Deputy Director

Ontario Dairy Council v Deputy Director – Interlocutory Decision 2006 ONAFRAAT 10

STATUTE: Ministry of Agriculture, Food and Rural Affairs Act

HEARING: April 24, 2006

DATE OF DECISION: April 26, 2006

2006-10

NEUTRAL CITATION: 2006 ONAFRAAT 10

IN THE MATTER OF THE MILK 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 the Ontario Dairy Council, Mississauga, Ontario from a decision of the Deputy Director to amend the licence for the operation of a plant issued to Mornington Heritage Cheese and Dairy Cooperative Inc., Millbank, Ontario. The decision allowed for the processor to process cow’s milk, subject to a number of conditions being satisfied.

AND IN THE MATTER OF: A request by Mornington Heritage Cheese and Dairy Cooperative Inc. that the stay of the decision of the Deputy Director, that is in place by virtue of the appeal, be lifted.

Before: Jane Sadler Richards, Member; Graeme Hedley, Member

Appearances: Brad Lindner, representing the applicant, Mornington Heritage Cheese and Dairy Cooperative Inc. Tom Kane, representing the respondent, the Ontario Dairy Council

DECISION OF THE TRIBUNAL

This pre-hearing conference was held via teleconference call on Monday, April 24, 2006. The Agriculture, Food and Rural Affairs Appeal Tribunal (Tribunal) met to consider a motion that a stay on the decision of the Deputy Director under the Milk Act, that was in place as a result of the appeal of the Deputy Director’s decision by the Ontario Dairy Council (ODC) be lifted. Also considered was a request by Mr. Jim Cushing, Ontario Ministry of Agriculture and Food (OMAFRA) that OMAFRA be made a party to the hearing of the appeal by the Ontario Dairy Council from the decision of the Deputy Director .

Statutory Context

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

Effect of appeal

(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. R.S.O. 1990, c. M.16, s. 16 (6).

Subsection 25(1) of the Statutory Powers Procedure 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).

The Evidence and Argument

Stay Issue

Mr. Brad Lindner told the Tribunal he would respond to concerns raised in Mr. Kane’s reply to the motion of Mornington Heritage Cheese and Dairy Cooperative Inc.as follows:

• Mr. Kane submitted a letter written by Mr. Patrick Hop Hing, Director, Finance and Administration, Dairy Farmers of Ontario (DFO) which indicated that Mornington Heritage Cheese and Dairy Cooperative Inc. (Mornington) had yet to satisfy DFO’s credit program requirements. While this was correct, Mornington had been in contact with Mr. Bill Moore, had completed all the necessary paperwork and its partner, TIFCO, was prepared to post a bond so that milk could be delivered to the plant.
• Quota had been secured from the Canadian Dairy Commission (CDC).
• Processing cows’ milk was not really a new venture as Mornington’s landlord, Millbank Cheese and Cold Storage, had secured a licence to process cows’ milk, although none had yet been processed.
• The Deputy Director dealt extensively with the requirements under Section 100(k) of Regulation 761 in her decision, on page 10.
• He disputed Mr. Kane’s submission that the amendment to Mornington’s licence would cause extreme hardship to other dairy processors. He said to the best of his knowledge the dairy processors that Mr. Kane was concerned about were not federally registered and could only ship product within Ontario.

Mr. Lindner told the Tribunal that Mornington had been federally registered since April 1, 2006. He submitted the stay was causing a hardship to his company and said it wanted a smooth transition to cows’ milk processing.

In response to questions, Mr. Lindner indicated:

• Mornington was not a member of the ODC.
• Mornington had not yet received a physical copy of its amended notice, just the decision of the Deputy Director dated March 10, 2006.
• Mornington had not yet met all the conditions set out by the Deputy Director. It does have a letter confirming its right to use a receiving bay owned by Millbank Cheese and Cold Storage. It had prepared a corrective action plan for OMAFRA but had not yet had a follow up inspection.

Mr. Tom Kane told the Tribunal that:

• The ODC still contended that the DFO credit program conditions had not been satisfied and said the DFO would not deliver milk until the conditions had been met.
• The ODC was also very concerned that there was no signed contract between TIFCO, the DFO and the CDC and said there were still questions as to whether or not TIFCO satisfied the criteria to receive quota from the CDC as it is not a licensed processor.
• He agreed that Millbank Cheese and Cold Storage has a licence to receive cows’ milk but said his argument was that it was a new venture for Mornington and that the stay did not interfere with its existing goat milk processing business.
• There were at least three Ontario dairy processors making Spanish-type cheeses and ODC contended that the Deputy Director had erred in her interpretation of Section 100(k) of Regulation 761 under the Milk Act.

Mr. Kane argued that lifting the stay would create hardship for processors already producing Spanish-type cheeses and would detract from the hearing itself. He pointed out the hearing date was only two and one half weeks away and submitted the stay should remain in place. He said there was nothing to stop Mornington from continuing to prepare for the receipt of milk while it waits for the hearing to take place.

In response to questions, Mr. Kane indicated:

• He was not aware of any deadline to return documents related to the DFO credit program to the DFO. However, sooner is better than later.
• The ODC had helped develop the criteria used in the credit program but it had no influence on applications; the credit program criteria were part of DFO regulations.
• Applications under the credit program could be turned around fairly quickly, perhaps two weeks and no more than three or four weeks.
• Normally a contract between DFO, the CDC and an applicant is signed when the CDC and DFO are satisfied that the applicant has met the program criteria and a committee has approved the application.
• He sits on the committee as Ontario’s representative.
• His contention is that TIFCO should not be allowed to have quota without building its own processing plant. He understood there was some evidence presented to the CDC that suggested an arrangement such as that between Mornington and TIFCO was acceptable but did not think it was a valid contract.
• The committee does not meet again until May 15, 2006 and the contract could not be signed until that date.

Additional Party Issue

The Tribunal informed the parties that Mr. Jim Cushing, OMAFRA had indicated that OMAFRA would like to be a party to the proceeding.

Mr. Lindner indicated Mornington had no objection to OMAFRA being made a party.

Mr. Kane indicated the ODC did not oppose OMAFRA being a party to the hearing.

The Findings

Stay Issue

The issue before the Tribunal at this pre-hearing conference is: should the stay that is in effect under Subsection 25(1) of the Statutory Powers Procedure Act be lifted or varied?

The applicant sought the lifting of the stay to allow it to commence with a new joint venture with TIFCO, a company that plans to market Spanish-type cheese. The applicant indicated that Mornington was close to meeting all of the conditions set out by the Deputy Director in her decision granting an amendment to its licence and it was concerned that it would be disadvantaged by any further delay in the start up of its cows’ milk processing venture. The respondent objected to the lifting of the stay, indicating that even if all the conditions were met by Mornington, the company could not receive cows’ milk before the hearing scheduled for May 10, 2006. In addition, the respondent cited potential harm to three existing dairies.

The Tribunal finds that the decision of the Deputy Director had the effect of making a significant change to the licence of Mornington, with an apparent impact on both parties to this proceeding. The Tribunal finds that the appeal should be heard and a decision rendered before the processing of cows’ milk goes into action. The Tribunal notes that the stay does not prevent Mornington from continuing to work toward meeting all the criteria set by the Deputy Director as a condition to receiving an amended licence.

Additional Party Issue

In the absence of any objections from the parties, the Tribunal will order that the OMAFRA be added as a party to the hearing of the appeal by another panel of this Tribunal.

Decision and Reasons

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

1. The application by Mornington Heritage Cheese and Dairy Cooperative Inc. that the stay of the Deputy Director’s decision be lifted is denied. The matter addressed by the forthcoming appeal has a significant impact on the parties to the appeal. Also, the anticipated time between this request by Mornington Heritage Cheese and Dairy Cooperative Inc. to lift the stay of the decision of the Deputy Director under the Milk Act and the decision of the Tribunal regarding the appeal, is not substantial. Therefore, it is the opinion of this panel of the Tribunal that the outcome of the appeal should be known to all parties before the stay is lifted. In the meantime, Mornington may continue with its preparations to meet the requirements of the decision of the Deputy Director.

2. The request by Mr. Jim Cushing, OMAFRA that OMAFRA be added as a party to the hearing of the appeal by the Ontario Dairy Council from the decision of the Deputy Director is granted.

Dated at Ailsa Craig, Ontario this 26th day of April, 2006