Laplante Poultry Farms Ltd. v Chicken Farmers of Ontario, 2014 ONAFRAAT 6

Agriculture, Food and Rural Affairs

Appeal Tribunal

1Stone 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:

Laplante Poultry Farms Ltd. v Chicken Farmers of Ontario

Laplante Poultry Farms Ltd. v CFO [Pre-Hearing Conference] 2014 ONAFRAAT 6

STATUTE:

Ministry of Agriculture, Food and Rural Affairs Act

HEARING:

DATE OF DECISION:

March 7, 2014

2014-06

NEUTRAL CITATION:

2014 ONAFRAAT 6

Laplante Poultry Farms Ltd. v Chicken Farmers of Ontario [Pre-Hearing Conference]

IN THE MATTER OF SECTION 16 OF THE MINISTRY OF AGRICULTURE, FOOD AND RURAL AFFAIRS ACT, R.S.O. 1990, CHAPTER M.16, AS AMENDED.

AND IN THE MATTER OF: An Appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Laplante Poultry Farms Ltd., Monkland, Ontario, from a decision of Chicken Farmers of Ontario declining the request for allocation of additional kilograms of calculated based.

AND IN THE MATTER OF: A Pre-hearing Conference pursuant to Rule 24 of the Tribunal’s Rules of Procedure, to be held for the purpose of hearing;

a) identification and simplification of issues;

b) issues related to disclosure and the exchange of information;

c) procedural issues including the dates by which any steps in the proceeding are to be taken or begun and the date on which the hearing will begin;

d) identification of facts or evidence that may be agreed upon;

e) settlement of any or all of the issues in dispute; and

f) any other matters which may assist in the just and most expeditious

disposition of the appeal.

Before:

Harold McNeely, Vice-Chair; John O’Kane, Vice-Chair; Euclid Mailloux, Member

Appearances:

Robert Laplante, representing the appellant, Laplante Poultry Farms Ltd.

Benoit Duchesne, counsel for the appellant, Laplante Poultry Farms Ltd.

Geoff Spurr, counsel for the respondent, Chicken Farmers of Ontario

Herman Turkstra, counsel for party to the appeal, the Association of Chicken Processors

John Slot, representing party to the appeal, the Ontario Independent Poultry Processors

PRE-HEARING CONFERENCE DECISION OF THE TRIBUNAL

The Tribunal held a Pre-hearing Conference in the above matter by telephone on February 11, 2014 pursuant to Rule 24.01 of the Tribunal’s Rules of Procedure.

BACKGROUND

This is an Appeal by Laplante Poultry Farms Ltd. (“LPF”) from a decision of Chicken Farmers of Ontario (“CFO”) dated January 25, 2013 refusing LPF’s application for an allocation of additional calculated base pursuant to Supplementary Quota Policy No. 182-2012, Section 1.03. Reasons for CFO’s decision were released on February 6, 2013. The proceedings before the Tribunal follow several dealings between LPF, CFO and Association of Ontario Chicken Processors (“AOCP”) in other forums, which have an impact on this Appeal.

During the hearing conducted on September 9, 2013, the Tribunal was made aware of a number of issues or differences involving Quebec and Ontario chicken processors resolved by an agreement dated January 26, 2011 between CFO, Les Éleveurs de Volailles du Québec (“EVQ”), AOCP and L’Association des Abattoirs Avicoles du Québec (“AAAQ”). This agreement is referred to as the 4P Agreement. LPF was involved in an action in the Quebec Superior Court seeking to have the 4P Agreement declared invalid. AOCP had appeared as an intervener in this action. LPF had also intimated at commencing a similar action in Ontario against CFO and AOCP for similar relief. However, with a view to settling these issues, LPF and AOCP entered into an agreement (the “Settlement Agreement”) on May 11, 2012 whereby AOCP undertook to support LPF’s request to CFO for an allocation of calculated base of 156,449 kilograms. LPF received this allocation shortly thereafter. In the Settlement Agreement, LPF and Robert Laplante gave certain undertakings and covenants to AOCP, in the following terms:

3.3 (1) LPF undertakes, subject to section 3.4, below, not to commence any action or proceeding in any court or any administrative or regulatory body involved in the regulation or administration of the marketing plan for chicken in Canada in the future that would in any way challenge or question the legality of the 4P Agreement, the regulations implementing the 4P Agreement and the allocation in Ontario of calculated base or of VAG in Quebec.

3.4 LPF reserves the right to apply to CFO after this Agreement is executed and implemented, to be provided, allotted or granted, additional or supplementary calculated base over and above that obtained pursuant to this Agreement and its successful implementation through its approval of the CFO, as part of LPF’s strategy, previously filed with the Tribunal, for the expansion of its Monkland facilities to serve Eastern Ontario. To be clear, LPF will not seek to set aside the 4P Agreement or the reference period: it will simply argue that, all relevant facts considered, LPF should be awarded more calculated base.

3.5 Failing success with the CFO, LPF reserves the right to appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal and failing success there, to the Minister of Agriculture as provided in the Ministry of Agriculture, Food and Rural Affairs Act. In any such appeal, LPF will not claim, represent, or suggest that any specific allocation to any specific Ontario processor be reduced. This right is reserved by LPF on the understanding that there are no restrictions on AOCP to oppose such application and this Agreement may be introduced as evidence in any such process by AOCP. The execution of this agreement by LPF will not prevent LPF in such proceedings from seeking and making any relevant arguments to obtain additional calculated base as referred to in paragraphs 3.4 and 3.5, and LPF specifically relied on its continued ability to make such arguments as an inducement to enter into this Agreement, without which, it would not have entered into this Agreement.

The Settlement Agreement also contains an arbitration clause in the following terms:

5.1 In the event of a dispute between the parties regarding the interpretation or application of this agreement, the dispute shall be resolved by arbitration under the Ontario Arbitration Act, 1991, SO 1991, c 17.

Prior to the hearing before the Tribunal, which started in Ottawa on September 9, 2013, the Appellant had requested CFO to provide it with many documents. CFO had objected to the production of these documents arguing they were irrelevant to the Appeal as constituted. AOCP also objected to the production of these documents. The Appellant therefore sought the production of these documents by serving a summons on CFO personnel and requiring them to attend with documents listed in the summons. Before proceeding to hear the Appeal, the Tribunal heard a motion brought by CFO to quash the summons served on its personnel. LPF responded to this motion by an affidavit of Robert Laplante sworn on September 4, 2013. Following the partial cross-examination by AOCP’s Counsel of Robert Laplante on his sworn affidavit in support of the motion, the parties agreed to adjourn the motion sine die to allow LPF to deliver an Amended Notice of Appeal. LPF agreed that it would provide greater particulars of the relief it was requesting in the Appeal. CFO and LPF also advised the Tribunal that once the Amended Notice of Appeal was delivered, there would likely be fewer documents that CFO would object to produce, and the production motion would likely either settle or become limited in scope to the productions of only those documents which LPF required and CFO refused to produce.

At that point in the hearing, the Tribunal raised a concern with respect to the Tribunal’s jurisdiction to hear the Appeal based on an Amended Notice of Appeal. The Tribunal’s concern was that certain items of relief sought in an amended Notice of Appeal may not have been considered by CFO at its hearing on December 20, 2012. In response to this concern, CFO’s Counsel advised that CFO would waive any jurisdiction argument in relation to the Amended Notice of Appeal “as we understand it will be amended ” (emphasis by Tribunal) pursuant to subsection 16(5)(b) of the Ministry of Agriculture, Food and Rural Affairs Act (“Act”). In his evidence, Robert Laplante had referred to five grounds which supported his Appeal for the allocation of additional calculated base. These were:

1. The additional allocation was consistent with the policy intent of the Ontario Government as expressed in Bill 130, Promoting Local Food Act, 2012;

2. CFO should exercise its discretion in allocating additional calculated base, as it had to Cericola Farms;

3. Francophone chicken producers in Eastern Ontario (“EOP”) had a need for a facility in Eastern Ontario to process their chickens, and LPF could offer these services in the French language;

4. Members of EOP had commenced an action in the Superior Court of Justice of Ontario to assert certain rights, and the allocation of additional calculated base would help resolve the litigation; and

5. The granting of additional calculated base would establish a made in Ontario solution for EOP who were shipping their chickens to Quebec processing facilities.

Accordingly, after adjourning CFO’s motion sine die, a new date for the hearing of the Appeal was set for April 7-11, 2014. Following the adjournment, LPF’s Counsel proceeded to write to CFO’s Counsel and AOCP’s Counsel on September 26, 2013 setting out in detail a number of demands for the production of documents and confirming he would be preparing an Amended Notice of Appeal. Additional similar requests were repeated on November 26 and December 2, 2013, January 3 and January 10, 2014. LPF only served the Amended Notice of Appeal on January 28, 2014. LPF’s Counsel requested a pre-hearing conference in order to resolve the impasse which had developed between the parties. The pre-hearing conference proceeded on February 11, 2014.

In the Amended Notice of Appeal LPF seeks the following:

THE APPELLANT ASKS FOR:

1. an Order:

a) granting the Appellant Laplante Poultry Farms Ltd. (“LPF”) an increase in its calculated base by 1,082,640 kilograms;

b) in the alternative to paragraph a), an Order whereby the CFO be required to further amend its Determination and Distribution of Supply Policy no. 200-2013, and Words and Meanings Regulation No. 2446-2013 by:

i) creating a new class of processor known as a “qualified processor” meaning a Franco-Ontarian processor who is part of Canada’s French Canadian society and culture and who exhibit key characteristics such as the use of French as a first language; having employees who use French as their first language; using the French language in the workplace; using French to communicate with clients or suppliers and holding membership in francophone organizations, such as trade associations or Chambers of Commerce;

ii) creating a new class of processor supply known as a “qualified supply” meaning the total quantity of chicken equal to the qualified quotas and authorized to be marketed by qualified producers through the Board to a “qualified processor”;

iii) modifying the definition of the term “Opening Phase” by adding the words “and/or qualified processor” as follows:

“Opening Phase” means the time period as specified by the Board occurring in advance of each crop Quota Period in which qualified producers may contract in relation to their qualified quotas on Form 101 with Quebec processors and/or qualified processor;”

iv) granting a “qualified processor” the right to contract on Form 101 with qualified procedures in relation to their qualified quotas during the Opening Phase;

v) fixing the amount of “qualified supply” which can be contracted by qualified producers as being equal to the amount of the qualified quotas which can be contracted by the “qualified processor” during the Opening Phase;

vi) allowing the “qualified processor” to contract chicken from Ontario producers during Phase I and from Quebec producers during Phase II up to an aggregate amount equal to that portion of “qualified supply” not contracted for in the Opening Phase; and,

vii) Identify LPF as a “qualified processor”

2. An Order granting LPF the ability to contract on Form 101 every Quota Period with qualified producers located in District 9 and having their registered places of business in Glengarry, Ottawa-Carleton, Prescott, Renfrew, Russell and Stormont to a maximum of the qualified quotas pursuant to CFO Determination and Distribution of Supply Policy 200-2013 and Words and Meanings Regulation No. 2446-2013 which has been waived by the AOCP members;

3. An Order granting LPF the ability and right to contract on Form 101 with Ontario producers in Phase I, or with Quebec producers in Phase II, up to the amount of kilograms corresponding to any portion of the qualified quotas which is not contracted by LPF with qualified producers in the Opening Phase.

4. An Order directing the Chicken Farmers of Ontario to enact such policy or regulation as is necessary or desirable, or to amend such policy or regulation as is necessary, to give effect to the Order sought in paragraphs 1, 2 and 3, above;

5. Any other Order as this Tribunal considers just.

PRE-HEARING CONFERENCE

During the Pre-hearing conference, Counsel for AOCP made representations that the Tribunal lacked jurisdiction to hear the Appeal since LPF, Robert Laplante and AOCP were parties to the Settlement Agreement in which the parties agreed to submit certain disputes to arbitration. AOCP was of the view that the remedies sought by LPF in this Appeal were disputes which should be submitted to arbitration pursuant to the Settlement Agreement. AOCP also advised the Tribunal that it would be launching arbitration proceedings under the Arbitration Act, 1991 to have these disputes or issues determined by arbitration. LPF requested that the hearing of its Appeal proceed without further delay based on the Amended Notice of Appeal. CFO and AOCP also submitted certain new claims advanced in LPF’s Amended Notice of Appeal must first be considered by CFO since these were not before CFO when it gave its decision. Ontario Independent Poultry Processors (“OIPP”) supported LPF in its request for an allocation of additional calculated base and to have this matter determined as soon as possible.

While the LPF’s request for additional calculated base was the issue before CFO at the hearing on September 9, 2013, the hearing of the Appeal did not proceed as stated previously. The Amended Notice of Appeal now contains significant additional claims for relief which were not before CFO, at the hearing conducted on December 20, 2012 and were also not disclosed in the evidence of Robert Laplante during his cross-examination on September 9, 2013. Five appeal grounds, as previously stated, were disclosed by Robert Laplante supporting his request for an increase in calculated base. Neither his affidavit nor his oral evidence referred to the claims for relief set forth in paragraphs 1(b) (i), (ii), (iii), (iv), (v), 2, 3, and 4 of the Amended Notice of Appeal. This document now seeks, as an alternative to an increase in its calculated base by 1,082,640 kilograms, an Order whereby CFO be required to further amend its regulation as set out in paragraph 1(b) (i) to (v), and the additional relief identified in paragraph 2 to 4 of the same document.

The new relief sought by LPF in its Amended Notice of Appeal was also not part of the relief sought by the Appellant before CFO. Accordingly, the Tribunal is of the view that CFO’s agreement to waive its rights under subsection 16(5)(b) of the Act does not prevent it from now insisting on those rights in respect of the substantial new claims for relief in the Amended Notice of Appeal. The Tribunal however is prepared to proceed with the hearing, as it relates to paragraph 1(a) of the amended Notice of Appeal since this is basically the ground of appeal raised by the Appellant following the hearing before CFO, and considered by CFO at its hearing.

With regard to the position of AOCP expressed during the pre-hearing conference that the jurisdiction to decide the issues on this Appeal rests with an arbitrator appointed by the parties pursuant to the Settlement Agreement and the Arbitration Act, 1991, the Tribunal is of the view that a Pre-hearing conference is not the appropriate venue to resolve this issue. This issue should be resolved by a Motion brought before the hearing, of the Appeal, unless AOCP has taken steps under the Arbitration Act, 1991 to have this issue determined by arbitration. The Tribunal requests that the parties advise the Tribunal on or before March 12, 2014 whether LPF will proceed to the hearing currently scheduled for April 7-11, 2014 on the claims as set forth in paragraph 1(a) of the Amended Notice of Appeal or whether it wishes to delay this hearing until CFO has considered its new claims and rendered a decision. Furthermore, AOCP shall advise the Tribunal on or before March 12, 2014 whether it has taken steps under the Arbitration Act, 1991 to have an arbitrator appointed. If the parties have not resolved their differences with regard to the production of documents, the hearing of the Motion before the Tribunal shall continue on April 7-11. 2014 in Ottawa before the Appeal is heard. Any issues of jurisdiction shall also be resolved by a Motion returnable at the hearing on April 7-11, 2014.

ORDER OF THE TRIBUNAL

The Tribunal hereby Orders as follows:

1. That the hearing for production of document commenced on September 9, 2013 resume on April 7-11, 2014 subject to any jurisdiction argument properly brought before the Tribunal by Notice of Motion with supporting material and responding material on or before that date.

2. That following the hearing of the Motion, on April 7-11, 2014, the Appeal shall then proceed or at a date to be set during the hearing. This Appeal shall be limited to the claim set forth in paragraph 1(a) of the Amended Notice of Appeal.

3. The issue of jurisdiction shall either be determined by an Application brought by AOCP by a Motion pursuant to the Arbitration Act, 1991, or failing that returnable at the hearing set for April 7-11, 2014.

4. The parties shall confirm on or before March 12, 2014 that they are ready to proceed with the continuation of the Motion on April 7-11, 2014.