Association of Ontario Chicken Processors v. Chicken Farmers of Ontario, 2015 ONAFRAAT 19

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 Courriel: AFRAAT@ontario.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL:

Association of Ontario Chicken Processors v Chicken Farmers of Ontario

AOCP v CFO 2015ONAFRAAT19

STATUTE:

Ministry of Agriculture, Food and Rural Affairs Act

HEARING:

September 24, 2015

DATE OF DECISION:

September 28, 2015

2015-19

NEUTRAL CITATION:

2015 ONAFRAAT 19

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 the Association of Ontario Chicken Processors (AOCP), Guelph, Ontario, from Chicken Farmers of Ontario’s (CFO) decision dated June 11, 2015 deferring the making of changes to its policy and procedures for the chicken processor supply distribution system suggested by the AOCP, and imposing penalties on chicken processors for not purchasing mandated levels of chicken.

AND IN THE MATTER OF: The hearing of a motion by the AOCP pursuant to Rule 25 of the Tribunal’s Rules of Procedure as to whether the appeal filed with the Tribunal stays the adjustments and penalties imposed and to be imposed by CFO or, alternatively, if a stay should be ordered preventing the implementation of decisions of CFO which would result in adjustments by way of penalties or additions to processors’ calculated base.

Before:

Jeffrey J. Hewitt, Vice-Chair; Paula Lombardi, Vice-Chair; Brenda Lammens, Member

Appearances by Conference Call:

Herman Turkstra – Counsel for the AOCP

Geoff Spurr – Council for CFO

WRITTTEN DECISION OF THE TRIBUNAL for a Motion heard on September 24, 2015 regarding a Stay

The Agriculture, Food and Rural Affairs Appeal Tribunal heard this motion by conference call on September 24, 2015.

Background

The AOCP filed an appeal with the Tribunal under Section 16 of the Ministry of Agriculture, Food and Rural Affairs Act (“MAFRAA”) arising from a decision of the CFO dated June 11, 2015, which deferred the making of changes to its policy and procedures for the chicken processor supply distribution system that were suggested by the AOCP, and imposed penalties, as characterized by AOCP, on chicken processors for not purchasing mandated levels of chicken.

The AOCP filed a motion with the Tribunal seeking a determination as to whether the appeal filed with the Tribunal results in the automatic stay of the calculated base adjustments imposed and to be imposed on chicken processors. Alternatively, if a stay is not automatic, AOCP seeks an order that all such calculated base adjustments made or to be made pursuant to the decisions appealed be stayed and not implemented until such time as the Tribunal renders a decision on the appeal.

Facts & Parties’ Positions

“Calculated base adjustments” are, in very simple terms, the means by which CFO determines the allocation of chicken to processors for each quota period; the adjustment for any given quota period is based on whether or not a processor met the allocated numbers in previous quota periods. An adjustment can result in a processor’s allocation increasing or decreasing (or remaining the same) based on those previous numbers. This adjustment is made pursuant to the Four Party Agreement (“4PA”) entered into by CFO and AOCP, along with their equivalent Quebec counterparts, that has been implemented since April of 2014.

AOCP labels these adjustments as “penalties” when there is a decrease in quota and “rewards” when there is an increase. The 4PA labels the section in which adjustments are outlined as “Discipline”, which AOCP states supports its position that there is a punitive element to the policy as it currently exists.

As part of its appeal, AOCP requests that, “A new policy governing purchasing of live chicken by processors be approved”; that new policy would not include the calculated base adjustment as it currently exists.

What AOCP seeks on this motion is a stay of the calculated base adjustments to maintain the status quo, which it states is the current level of quota in place, with no further adjustments until the Tribunal rules on the appeal. AOCP takes the position that there is an automatic stay by virtue of the appeal itself; in the alternative, it is asking for a stay if one is not automatic.

CFO submits that there is no automatic stay simply because an appeal was filed. It states that there are no grounds for a stay in any event. Lastly, CFO takes the position that to maintain the status quo means to maintain the system or policy that is currently in place.

Issues to be Decided

Therefore, the issues to be decided by the Tribunal are as follows:

1. Is there an automatic stay upon the filing of an appeal to the Tribunal under the MAFRAA?
2. If there is an automatic stay, what is the status quo?
3. If there is not an automatic stay or alternatively the stay maintains the adjustment policy currently in place, should a stay of the adjustment policy be ordered in the circumstances?

Analysis

The Tribunal is bound by the decision of the Divisional Court in Denby v. Ontario (Agriculture, Food and Rural Affairs Appeal Tribunal), 2006 CanLII 63736 (ON SCDC), which dealt with the issue of a stay pending the determination of an appeal (and which decision the Tribunal has followed in the Bos cases¹). In the Denby case, the Divisional Court stated (at paragraph 40):

. . . [T]he appeal launched by the IDDBA [International Dairy Direct Broker Agent] from the decision of the DFO [Dairy Farmers of Ontario] March 14, 2003 did not permit these applicants to “shelter” under a stay and to conduct their activities in violation of Regulation 08/03 with impunity. We conclude that the “stay in the matter” did not serve to suspend the force and effect of any provision of Regulation 08/03 with respect to any person or corporate entity, including IDDBA. A “stay in the matter” refers most certainly to the consequences of a decision of an administrative tribunal (unless pursuant to s. 25(1)(b) “the tribunal or the court or other appellate body orders otherwise”). A “stay in the matter” may refer to a maintenance of the status quo in terms of the conduct or entitlement of a party. It does not, to repeat ourselves for emphasis, result in the automatic “suspension” of legislation validly enacted or to be enacted in the future. To suggest otherwise would be patently illogical.

While the specific facts are different, the procedural events in Denby mirror those in this case. Therefore, a “stay in the matter” exists to maintain the status quo.

What is the status quo? Is it the maintenance of the amount of quota currently in place, not subject to “adjustment”, as AOCP submits? Or, is it the maintenance of the policy regime currently in place, as the CFO submits?

The Tribunal is once again guided by the Divisional Court in Denby and finds that the status quo in the present case is the maintenance of the adjustment policy that is in place and has been in place since April of 2014. It is important to note that AOCP is a signatory to the 4PA, the document by which the adjustment policy was and is implemented.

AOCP submits that, regardless of an automatic stay which maintains the status quo of the implementation of the adjustment policy, a stay that freezes the current quota from further adjustment is necessary and appropriate in the circumstances. While admitting that some of its members would benefit under the current policy, failure to implement such a freeze would cause significant hardship to those of its members who would have their allocation decreased under the adjustment policy.

The test for granting a stay was established by the Supreme Court of Canada in the case of RJR MacDonald v. Canada, 1994 CanLII 117:

First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried. Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused. Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits.

With regard to the issue of whether there is a serious question to be tried, the claim must be something more than frivolous; there must be substance for what the party alleges. AOCP appears to be challenging the implementation of an agreement into which it willingly entered; however, for the purposes of this inquiry, the Tribunal is satisfied that there is a serious question to be determined on the appeal. While it appears that the relief being sought by AOCP on this motion is substantially similar to the relief sought on appeal, nothing in this decision shall be interpreted as being determinative of the merits of AOCP’s appeal.

As to the issue of whether the moving party would suffer irreparable harm if the stay order is not granted, the Tribunal is not convinced on the materials before it that there will indeed be irreparable harm to AOCP, or perhaps more accurately its members. The Supreme Court stated in RJR that monetary damage alone is not irreparable harm; instead, one must look at the nature of the harm and the magnitude of the harm. The Tribunal finds that AOCP has not demonstrated irreparable harm in the present case. Accordingly, this part of the test is not met.

Having not demonstrated irreparable harm, there is no need to address the third part of the test, being the balance of convenience. However, if the Tribunal is wrong on the second part of the test (that is, there is irreparable harm), it finds that the balance of convenience favours the status quo. The calculated base adjustment policy has been in place and operational since April of 2014 pursuant to an agreement entered into by AOCP and CFO. Therefore, the balance of convenience does not tip in its favour.

Order of the Tribunal

For the above reasons, AOCP’s motion for a stay is denied.

Footnotes

1. 1Bos v. CFO 2010 ONAFRAAT 14, and Bos v. CFO 2010 ONAFRAAT 23