Dougal Lea Ltd. v. Dairy Farmers of Ontario, 2010 ONAFRAAT 28

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: appeals.tribunal.omafra@ontario.ca

Guelph (Ontario) N1G 4Y2 Tél. : (519) 826-3433, Téléc. : (519) 826-4232 Courriel : appeals.tribunal.omafra@ontario.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL:

Dougal Lea Ltd., v. Dairy Farmers of Ontario – Request for Review

Lea Ltd., v. DFO RFR 2010 ONAFRAAT 28

STATUTE:

Ministry of Agriculture, Food and Rural Affairs Act

HEARING:

DATE OF DECISION:

September 1, 2010

2010-28

NEUTRAL CITATION:

2010 ONAFRAAT 28

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 Dougal Lea Ltd., of Smithville, Ontario, from a decision of the Dairy Farmers of Ontario to deny its request for an exemption from the 15% transfer assessment on the sale of its quota.

AND IN THE MATTER OF: A request for review by Dougal Lea Ltd. from a decision of the Tribunal dated July 6th, 2010 under Subsection 21.2(1) of the Statutory Powers Procedure Act and Rule 29 of the Rules of Procedure for the Tribunal.

Before:

John O’Kane, Vice-Chair

Appearances:

None

BACKGROUND TO THE REVIEW REQUEST

Dougal Lea Ltd. (Dougal Lea) is a farm corporation owned and operated by Paul McDougall and his late wife Maryanne.

In the spring of 2008, Dougal Lea disposed of its milk herd and production quota because Maryanne, one of the two operators, had been diagnosed with terminal cancer and Paul, the other operator, needed to care for Maryanne.

On the sale of Dougal Lea’s quota, the regulator, Dairy Farmers of Ontario (DFO), applied its quota transfer assessment policy. That resulted in DFO retaining 15% of Dougal Lea’s quota or 7.186 kg. for future distribution to dairy farmers as part of a general quota increase or as part of the management of overall quota volume.

Dougal Lea received $1,212,078.30 on the quota sale and DFO retained the 7.186 kg. that had a value at the time of sale of $232,231.96.

Maryanne died in the fall of 2008.

In the spring of 2009, Dougal Lea applied under DFO’s policies for a special consideration exemption from the 15% quota transfer assessment. DFO denied Dougal Lea’s exemption request at first instance and then again after a reconsideration.

Dougal Lea appealed to the Tribunal under section 16 of the Ministry of Agriculture, Food and Rural Affairs Act (the Act) and the appeal hearing was conducted on June 21st, 2010.

The Tribunal released its reasons for decision on July 6th, 2010 denying Dougal Lea an exemption from the quota transfer assessment.

The Tribunal defined the issue for determination on the appeal as:

The issue for determination is whether Dougal Lea’s situation comprises special circumstances that deserve an exemption from the DFO’s transfer assessment on the sale of quota.

On August 5th, 2010, Dougal Lea requested a review of the Tribunal decision and asked for a reconsideration of that decision and that the decision be overturned.

REVIEWS UNDER THE TRIBUNAL’S RULES OF PROCEDURE

Pursuant to section 25.1 of the Statutory Powers Procedure Act, the Tribunal has established Rules of Procedure that includes Rule 29, which is entitled “Review of a Decision”.

Rule 29.09ⁱ provides that in considering the advisability of a review I can consider any relevant circumstance including those listed in subsections (a) to (e) of that Rule.

While the request for review seeks to overturn the decision and seeks a new appeal hearing, at this preliminary stage the sole issue for determination is whether a review should be conductedⁱⁱ. The question I must answer is not whether the decision is wrong or even probably wrong but rather, whether I am convinced, on a balance of probabilities that the decision is possibly wrong and therefore merits a fuller review.

Although the Rules permit me to confer with the members of the appeal panel, I elected not to seek out their explanation, preferring to allow the decision to “speak for itself”.

In the course of my review, I considered the materials listed in the endnoteⁱⁱⁱ as the record of the proceedings under Rule 29.16.

DOUGAL LEA’S REQUEST FOR REVIEW REASONS

Dougal Lea asserts that I should grant a review because the Panel:

1. made determinations of fact contrary to the appellant’s interests after inviting the appellant not to lead medical and personal evidence; and,
2. misapplied the law from previous cases.

Those reasons relied on by Dougal Lea specifically engage Rule 29.09 that provides:

29.09 In deciding whether it is advisable to conduct a review of all or any part of a final decision or order, the Tribunal may consider any relevant circumstances including,

(b) whether the Tribunal made a material error of law or fact such that the Tribunal would likely have reached a different decision;

Therefore, Dougal Lea must convince me of a possible material error of fact or law in the Tribunal decision that would likely have lead to a different decision.

REVIEW FINDINGS

1. Error of Law

Dougal Lea argued that the Tribunal panel misapplied the law from previous assessment exemption cases.

1. Higher Level of Authority

Dougal Lea argued that the Tribunal decision in Cayer #2 established a legal principle for exemption cases and that the Tribunal in the more recent Haleyview Farms¹ decision applied that legal principle to grant an exemption. Furthermore, Dougal Lea argued that because the Minister of Agriculture Food and Rural Affairs recently confirmed the Tribunal’s decision in Haleyview, the weight of that legal principle should be greater since the Tribunal is bound by higher levels of decision making.

Section 18 of the Ministry of Agriculture, Food and Rural Affairs Act sets out the Minister’s powers in respect of Tribunal decisions under that Act. In the recent Pork Producer’s review decision by the Minister², she clarified the nature of her role under section 18 as an independent statutory right to review Tribunal decisions which decisions are not final until expiration of the Minister’s review period. That right of review exists for every Tribunal decision made under that Act. It is reasonable to conclude from that statutory scheme that the Minister considers every Tribunal decision made under the Act. However, unless the Minister elects to review or a party requests that she review, she does not issue a written decision.

In my view, section 18 of the Act does not create a right of appeal from the Tribunal to the Minister. While section 18 gives the Minister wide discretion in her review function, it is clear to me from the Minister’s reasons in the Pork Producer’s case that she recognized that section 18 of the Act does not create a right of appeal.

In the context of the Haleyview case, the Minister entertained review submissions under section 18 of the Act at DFO’s request and concluded: “I have determined that it is not necessary for me to intervene in this matter. The decision of the Tribunal is confirmed.” The Minister’s statutory review period expired and the Minister chose not to intervene. We have no insight from the Minister about why she chose not to intervene. The Minister’s confirmation of the Tribunal decision in Haleyview does not make that Tribunal decision a binding precedent in subsequent appeals.

A higher level of decision-making authority is where a statute provides for an appeal route to a higher level of decision maker. For example, under the Assessment Act, the Assessment Review Board (ARB) hears complaints about property assessments at first instance. In section 43.1 of that legislation, an appeal lies from the ARB to the Divisional Court, with leave on a question of law. A Divisional Court determination in an assessment matter would be a higher level of decision-making that would then serve as a precedent that would bind the ARB where the same facts and issues were present.

While the Act does not create any statutory right of appeal from Tribunal decisions, a party always retains the right to seek judicial review of Tribunal decisions under the Judicial Review Procedure Act. In the instance of a judicial review, such a court decision would also serve as a precedent that would bind the Tribunal where the same facts and issues were present.

It follows, therefore, that I do not accept Dougal Lea’s argument that the Haleyview decision has become a higher and binding authority because of the Minister’s review. The Haleyview decision is like any other Tribunal decision.

2. The Legal Principle Established by Cayer #2

Dougal Lea’s argument suggests that the Cayer #2 decision of the Tribunal established a legal principle that compassionate grounds can be the basis of exemptions from the transfer assessment policy. I find this argument overstates the import of the Cayer #2 decision. The Tribunal has noted in several transfer assessment cases that no set of established legal principles has emerged from these cases and each has turned on its own unique facts. I agree with that observation.

The law applicable in these assessment exemption cases includes section 16 of Act that grants the Tribunal wide authority to make any decision that DFO could have made.

Exercising that statutory authority engages the Tribunal consideration of DFO’s Policies and specifically the special consideration provision Section H, “Requests for Special Consideration”. However, as the appeal panel noted, apart from DFO’s policy direction excluding medical conditions as a special circumstance, there is no guidance, criteria or consistency to guide application of that particular policy.

A unique set of facts was present in each of the previous Tribunal assessment exemption cases, including Cayer #2.

The Tribunal, in Cayer #2, determined that the facts in that case warranted an exemption from DFO’s transfer assessment policy. It was a purely fact-driven determination. Therefore, the Cayer # 2 decision does not serve as creating a controlling legal principle for such exemption cases.

Therefore, Dougal Lea has failed to convince me that I should grant a fuller review of the Tribunal decision because of a possible material error of law.

2. Errors of Fact

Dougal Lea argued that comments from the Tribunal panel Chair resulted in a change in appeal strategy. Because of those comments, counsel for Dougal Lea did not lead Paul through the evidence about Maryanne’s medical condition and personal details. Dougal Lea now argues that the “missing evidence” would have made a difference in the Tribunal’s decision. I find this argument to be somewhat contrived.

The decision reflects that the Tribunal was sensitive to the anguish experienced by Paul and his daughter Laura over the illness and death of Maryanne. Dougal Lea’s arguments do not convince me that additional oral evidence about Maryanne’s medical condition and personal details would have made any difference in the decision outcome.

Dougal Lea argued that the evidence was “almost identical” to the evidence from the Haleyview decision and there is no basis for differentiation between the decision outcomes and therefore Dougal Lea should receive an exemption as was granted in Haleyview.

However, in Haleyview, Paul Haley’s incapacity due to illness and injury resulted in the decision to leave the dairy industry where Paul Haley had been the primary operator.

In this case, the McDougalls (Paul and Maryanne) were joint operators and there was not a primary operator. Maryanne became incapable of dairy farming due to illness and Paul ceased farming in order to care for Maryanne. I find that to be a significant distinguishing factor.

As the Tribunal explained in Dougal Lea, it is required to consider each situation and develop a set of expectations and criteria to explain why an exemption should apply in one case and not another. This explanation provides farmers insight about successful exemption applications.

It is clear to me that the Tribunal carefully considered the evidence presented in Dougal Lea against the facts from all previous instances where exemptions have been granted. In that analysis the Tribunal found there were several facts that made the Dougal Lea case different from any of the previous cases.

The Tribunal reasons set out a list of six factual findings that distinguished the Dougal Lea case from other previous cases where either the DFO or the Tribunal has granted exemptions. There is evidence recited in the Tribunal’s reasons that support each of those findings of fact.

Therefore, Dougal Lea has failed to convince me that I should grant a fuller review of the Tribunal decision because of a possible material error of law.

DECISION OF THE TRIBUNAL

In these circumstances, I refuse to grant Dougal Lea Ltd.’s request for a review.

Dated at Brampton, Ontario this 1st day of September, 2010

29.09 In deciding whether it is advisable to conduct a review of all or any part of a final decision or order, the Tribunal may consider any relevant circumstances including,

(a) whether there is significant new evidence which was not available at the time of the original appeal;

(b) whether the Tribunal made a material error of law or fact such that the Tribunal would likely have reached a different decision;

(c) the extent to which any party to the appeal or any other person has relied upon the final decision or order;

(d) the extent to which any party to the appeal or any other person will be affected by the review process; and

(e) whether the public interest in finality of decisions is outweighed by the alleged prejudice to the requester.

• Tribunal decision dated July 6th, 2010

• Donald R. Good’s August 5th, 2010 review request letter

• Geoffrey P. Spurr’s August 19th, 2010 response to the request for review

• Donald R. Good’s August 25th, 2010 reply to the response

• Exhibit 1 from the Tribunal hearing (Appellant’s Book of Documents)

• Appellant’s Book of Authorities from the Tribunal hearing

• Exhibit 2 from the Tribunal hearing (DFO’s Book of Documents)

• March 23rd, 2010 Notice of Appeal to the Tribunal from DFO’s decision

Footnotes

1. iEvaluation of a request for review
2. iiRule 29.13 The Chair of the Tribunal, or a Vice-Chair designated by the Chair, shall consider each request for review of a final decision or order and decide whether a review should be conducted.
3. iiiMaterials considered:
4. 1Haleyview Farms Ltd. v. Dairy Farmers of Ontario, January 15th, 2010
5. 2Minister’s Decision re: February 16, 2010 Tribunal decision re: Ontario Pork Producers’ Marketing Board dated May 13, 2010