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: 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:
Jeffrey French v DFO (RE)
Jeffrey French v DFO
STATUTE:
Ministry of Agriculture, Food and Rural Affairs Act
HEARING:
August 22 and September 15, 2017
December 12, 2017
003French17
NEUTRAL CITATION:
2017ONAFRAAT21
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 Tribunal by Jeffrey French from the decision of the Director of Regulatory Compliance, Dairy Farmers of Ontario denying his request to amend the records related to his dairy farm and to award money compensation.
Before:
Patricia Meehan, Vice Chair and Ron O’Connor, Member
Appearances:
Jeffrey French, Appellant
George McNaughton, Director, Dairy Farmers of Ontario
DECISION OF THE TRIBUNAL
This appeal was heard in Guelph, Ontario, on August 22, 2017 and September 15, 2017. Jeffrey French, (the “Appellant”) appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal (the “Tribunal”) from a decision of the Director of Regulatory Compliance of the Dairy Farmers of Ontario (“DFO”) denying his requested relief.
Overview
In July 2015, the Appellant Jeffrey French was a dairy farmer but since then he sold his dairy license.
On July 20, 2015, DFO field inspectors conducted an inspection of the Appellant’s dairy farm and following their inspection, issued a compliance order stopping the Appellant’s dairy farm milk from being marketed and requiring the Appellant to remedy certain issues that fell below regulatory standards. Three follow up inspections were conducted on August 10, August 14 and September 15, 2015.
As a result of the July 20, 2015 inspection order, the Appellant was unable to market milk for a period of thirty days.
The Appellant challenged the findings of the field inspectors before the DFO Director of Regulatory Compliance and sought money compensation. The Director upheld the field inspectors’ findings and order and declined to compensate the Appellant.
The Appellant appealed to the Tribunal under subsection 2.10 (3) of the Milk Act, R.S.O. 1990, Chapter M.12.
Initially the Appellant’s appeal sought that his dairy farm’s records be amended to remove the field inspection findings of unsanitary conditions and money compensation of $40,000.00. The Appellant subsequently abandoned his relief related to his dairy farm’s records and therefore the sole issue on this appeal is the Appellant’s claim for money compensation.
As explained in the reasons that follow, the Appellant’s appeal is dismissed.
The Regulatory Regime for Milk
The production, processing and marketing of milk and milk products in Ontario is highly regulated under the Milk Act and Regulations. That means that dairy farms producing milk, cream or cheese from either cows or goats are regulated by the Ontario Farm Products Marketing Commission (“Commission”) and the marketing board, in this case the DFO. Part of that regulatory regime includes licensing of dairy farms and inspections of dairy farms.
The purpose of the Milk Act from section 2 of the legislation is set out below and informs a greater understanding of why this sector is so highly regulated.
- The purpose and intent of this Act is,
(a) to stimulate, increase and improve the producing of milk within Ontario;
(b) to provide for the control and regulation in any or all respects of producing or marketing within Ontario of milk, cream or cheese, or any combination thereof, including the prohibiting of such producing or marketing in whole or in part; and
(c) to provide for the control and regulation in any or all respects of the quality of milk, milk products and fluid milk products within Ontario.
Under subsection 2.1(1) and (2) of the Milk Act, the legislation contemplates the appointment of a Director to carry out the administration and enforcement of the Milk Act and regulations related to the quality of milk, milk products and fluid milk (hereafter referred to collectively as “milk”). Under subsection 2.1(4) a Director “shall exercise the powers and perform the duties that are conferred or imposed . . . under this Act”. Part of a Director’s authority is to appoint field-persons (inspectors) necessary for a Director to discharge their duties.
Under Regulation 761, R.R.O. 1990 titled “Milk and Milk Products” (hereafter the “Milk Regulation”), section 2 sets out the duties and powers of inspectors, called “fieldpersons”1 as follows.
2.(1) A field-person shall inspect premises on which milk or cream is produced and shall make a report of the inspection in triplicate.
(2) The field-person shall deliver or send one copy of the report to the producer, send one copy to the Director and retain one copy for his or her records.
(3) A field-person who determines that the milk or cream delivered from a producer does not comply with this Regulation or is produced from animals or on premises that do not comply or with equipment that does not comply with this Regulation,
(a) shall immediately notify the producer and the marketing board of the finding; and
(b) may by order require that no milk or cream from the producer be marketed by the producer until the milk, cream, animals, premises or equipment, as the case may be, comply with this Regulation.
(4) A producer who is aggrieved by an order of a field-person under subsection (3) may appeal to the Director and the Director may, after a hearing, confirm, amend or revoke the order.
In addition, under the Milk Regulation, regular monthly testing of milk at every dairy farm is mandated and the Milk Regulation2 contains, for example, strict levels for both bacteria and somatic cell counts. Milk that fails the regulatory testing is first down-graded in classification and ultimately may be detained and rejected from marketing in the food chain.
Factual Background
On March 27, 2015, the Appellant’s dairy farm was inspected by Alex Hamilton, an inspector appointed under the Milk Regulation. The Report generated under Section 2 of the Milk Regulation identified certain concerns about the dairy farm’s conditions that would result in a follow up inspection during the summer of 2015.
During July 2015, tests on milk from the Appellant’s dairy farm revealed somatic cell counts that exceeded the acceptable limits under the Milk Regulation as well as elevated bacterial levels in the milk.
On July 20, 2015, the Appellant’s dairy farm was again inspected, this time by Heather McFarlane and Phil Alyea, both inspectors appointed under the Milk Regulation. The inspection was in follow up to the March 27, 2015 report as well as the elevated somatic cell and bacterial level test results. The inspection resulted in an order that the Appellant’s milk was to be shut off from the marketing system due to quality related issues.
When the inspectors arrived on July 20, they found the dairy locked and a sign directing visitors to call the Appellant’s cell phone. Rather than call the Appellant, the inspectors accessed the dairy without the Appellant’s permission.
The Appellant raised a concern that the inspectors did not correctly or reasonably gain entrance to his dairy farm on July 20, 2015. The Appellant testified that he did not believe the inspection that day was as thorough as it should have been and that certain samples were not taken. He provided evidence regarding his manure storage and a site visit by Advanced Dairy Systems Ltd., which he suggested contradicted items from the July 20 inspection report.
The Appellant explained that his claim for $40,000.00 compensation related to the amount of milk sales lost over a thirty-day period plus the expenses paid to Advanced Dairy Systems Ltd., and additional farm wages paid for a student assistant.
The Appellant also called his father, William Herbert French, to testify in the appeal. He testified that he was concerned that inspector Heather McFarlane was also a DFO field service representative and that certain regulatory requirements were without merit. He expressed concerns about Heather McFarlane’s attitude and cited an example where she insisted that the varnished milk house door was unacceptable until it had been painted. He also explained his view that the inspectors were inconsistent and erected barriers to make compliance more difficult.
Maria Dorianna Leal is employed with DFO and is responsible for administration and quality control and she reports to the Director, George McNaughton. Ms. Leal testified about DFO’s procedures for field services representatives, training, consistency and inspections. She also explained that DFO has fifteen field services representatives working under two area managers, one of whom is Phil Alyea. One of the field service representatives reporting to Phil Alyea is Heather McFarlane.
Ms. Leal testified about the regulatory requirements for milk houses, procedures and standards relating to cleanliness and conditions of the site, the equipment and the animals. She explained the regulatory testing processes of milk and how the 2015 and 2016 test results of the Appellant’s milk showed elevated levels that were poorer than normal and atypical of the average dairy farm.
Ms. Leal explained that inspectors will take photographs as standard practice in circumstances where a dairy farm fails to achieve “Grade A” classification standards and those photographs are uploaded to a DFO computer server and printed to form part of the official inspection record and shared with the dairy farm operator.
Several photographs taken during inspections of the Appellant’s dairy farm formed part of the DFO evidence in this appeal, but Ms. Leal was unable to testify which of two inspectors took any photograph. Certain photographs contained unattributed editorial notations which the Tribunal gives no weight to in the absence of the direct evidence of the author, since the Appellant had no opportunity to cross examine the author of those notations.
Using the file photographs Ms. Leal connected the regulatory regime to issues related unacceptable conditions at the Appellant’s dairy farm. For example, photographs showed milk solids on the bulk milk tank and in the sanitary trap, both of which are unacceptable conditions under the Milk Regulation.
Ms. Leal did herself inspect the Appellant’s dairy farm on September 15, 2015 and gave direct evidence that the premises and animals were not maintained at a regulatory acceptable level of cleanliness.
Phil Alyea testified about his inspection of the Appellant’s dairy farm on July 20, 2015 and the context for that inspection including both the earlier March 2015 inspection results and the elevated milk test results from earlier in July resulting in the July inspection being a higher level “risk based” inspection. He testified that under the Milk Regulation, inspectors are not obliged to give operators advanced notice of an inspection nor are inspectors obliged to get an operator’s consent to enter a dairy farm.
Mr. Alyea testified that under the Milk Regulation, if an inspector observes regulatory non-compliance with milk or cream or equipment or animals, the inspector must immediately notify the operator and the DFO and may order that the operator is unable to market any milk or cream until further notice. He explained that in such non-compliant circumstances due to safety concerns about the milk or the conditions in which it was produced, it is immediately shut off from the food chain.
Using the inspection photographs, Mr. Alyea described the inspection process, how the dairy equipment worked, and his observations about the conditions at the dairy farm and the contamination risks he observed.
Issues and Analysis
The sole issue for determination on this appeal is the Appellant’s claim for money compensation.
That claim for money compensation engages both legal and factual considerations, the first and most important legal consideration requires the Tribunal to address the jurisdictional issue framed by the following question: Does the Tribunal have jurisdiction to award monetary compensation in these circumstances?
Tribunal Jurisdiction:
Unlike the law courts, the Tribunal has no inherent jurisdiction. The Tribunal, as a creation of statute only has the jurisdiction granted in the legislation.
The Tribunal’s jurisdiction in this appeal is framed in subsection 2.10 (3) and (4) of the Milk Act which incorporate subsection 16(11) of the Ministry of Agriculture Food and Rural Affairs Act (“MAFRA”), the latter of which provides as follows:
(11) Upon an appeal to the Tribunal under subsection (1) or (2), the Tribunal may by order direct the . . . Director, as the case may be, to take such action as it or he or she is authorized to take under the . . . Milk Act and as the Tribunal considers proper, and for this purpose the Tribunal may substitute its opinion for that of the . . . Director.
The above section informs an understanding that the Tribunal essentially stands in the shoes of a Director (including the shoes of an inspector appointed by the Director) on an appeal from a Director’s decision and the Tribunal has all the power that a Director has under the Milk Act and Milk Regulation.
The ultimate powers (of an inspector/Director) of the Tribunal in this context flow from section 4 of the Milk Act as follows:
4 (1) An officer or field-person of the Commission or a person appointed by the Commission to inspect the books, records, documents, equipment and premises of persons engaged in the producing, processing or marketing of milk or milk products may,
a) enter and inspect any premises or conveyance used for the producing, processing or marketing of milk or milk products and inspect anything relevant to the inspection found in the premises or conveyance;
b) stop any conveyance that he or she believes may contain any milk or milk product and inspect the conveyance and any milk or milk product found in it;
c) obtain a sample of any milk or milk product at the expense of the owner for the purpose of making an inspection of it; or
d) require any person who has the custody or control of any books, records or documents of persons engaged in the producing, processing or marketing of milk or milk products to produce the books, records or documents or to furnish copies of or extracts from them.
(2) A field-person appointed by a Director may exercise the powers described in subsection (1) in respect of those provisions of this Act and the regulations for which the person who appointed the Director is responsible for the administration and enforcement.
The Appellant did not direct the Tribunal to statutory provisions authorizing or supporting his claim.
The provisions that describe the authority of Inspector, Director and Tribunal in the Milk Act or the Milk Regulations do not authorize the Tribunal to award compensatory damages in these circumstances.
The Appellant did not, based on the facts of this matter, convince the Tribunal that the Director or the inspectors had acted unreasonably or beyond their legislative authority or that any of their actions caused the Appellant a loss of income that would justify damages or compensatory award.
Factual Considerations:
The Tribunal has determined that it lacks jurisdiction in these circumstances to award monetary compensation under the Milk Act and regulations thus the need to make factual considerations is academic.
However, if the Tribunal had been required to address the factual considerations, those factual issues are framed by the following questions arising directly or indirectly from the Appellant’s complaints about the inspections and results:
Did the inspectors act unreasonably in respect of their inspection of the Appellant’s dairy farm?
Did the inspectors act unreasonably in making the order to downgrade the Appellant’s milk from Grade A?
Did the inspectors unreasonably delay reinstating the Appellant’s milk to Grade A classification?
The inspectors acted within a regulatory regime where the Legislature gave them wide discretionary authority to carry out the purposes of the Milk Act and in this context, specifically the control and regulation of the quality of milk. As noted above in subsection 4 (1) of the Milk Regulation, inspectors have a power of entry. There is nothing in the Milk Regulation that requires an inspector to notify an operator or to have an operator’s consent to an inspection. Therefore, the inspectors’ actions to gain access to the Appellant’s dairy farm on July 20, 2015 were in conformity with the Milk Regulation.
The inspectors’ determinations to downgrade the Appellant’s milk classification and suspend his access to the milk market were dictated by the poor condition of his dairy farm, the unclean conditions of his equipment and animals, all considerations which are specifically set out in the Milk Regulation. The inspectors’ evidence before the Tribunal was supported by test results reflecting elevated bacterial and somatic cell levels and was also supported by photographic evidence of unclean and unsanitary conditions, equipment and animals as well as direct testimony that confirmed the photographic evidence. Therefore, the inspectors’ determinations regarding the Appellant’s milk classification and access to the milk market were in conformity with the Milk Regulation.
Therefore, in all the circumstances of this appeal, the Appellant has failed to discharge his onus and the appeal is therefore denied.
Order of the Tribunal
The Tribunal hereby orders:
That the claim of the Appellant seeking forty thousand ($40,000.00) dollars as a result of his non-grade A classification and suspension from the market is denied and is hereby dismissed.
The decision of the Director of Regulatory Compliance, Dairy Farmers of Ontario denying the Appellant’s request is confirmed.
Dated at Sudbury, Ontario this 12th day of December, 2017.