BVA Farms Ltd., Del Van Farms Ltd., CJVA Farms Ltd. v. Egg Farmers of Ontario, 2020 ONAFRAAT 10

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:

BVA Farms Ltd., Del Van Farms Ltd., CJVA Farms Ltd. v Egg Farmers of Ontario (EFO) (RE) Request for Review

BVA Farms Ltd., Del Van Farms Ltd., CJVA Farms Ltd. v Egg Farmers of Ontario (EFO) (RE) Request for Review

STATUTE:

Ministry of Agriculture, Food and Rural Affairs Act

HEARING:

June 9, 2020

DATE OF DECISION:

July 31, 2020

004BVA20RFR

NEUTRAL CITATION:

2020ONAFRAAT10

FILE NO.: 004BVA20RFR

DATE: 20200804

IN THE MATTER 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 BVA Farms Ltd., Del Van Farms Inc., and CJVA Farms Ltd. of Watford, Ontario from the decisions of the Egg Farmers of Ontario.

AND IN THE MATTER OF A request for review of the Tribunal’s decision dated April 23, 2020.

BETWEEN:

BVA Farms Ltd., Del Van Farms Ltd., CJVA Farms Ltd. Appellants

– and –

Egg Farmers of Ontario Respondent

Paula Lombardi, for the Appellant

Geoff Spurr, for the Respondent

Before: Katie DeBlock, Vice-Chair

DECISION OF THE TRIBUNAL

1BVA Farms Ltd. (“BVA”), Del Van Farms Inc. (“Del Van”) and CJVA Farms Ltd. (“CJVA”) (collectively referred to as the “Appellants”) seek to review a decision of the Agriculture, Food and Rural Affairs Appeal Tribunal (the “Tribunal”) issued on April 23, 2020 in the matter of an appeal by the Appellants to the Tribunal from decisions of the Egg Farmers of Ontario (“EFO”) regarding policies and procedures for the leasing of pullet quota.

Statutory Jurisdiction for a Review

2Section 21.2 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (“SPPA”), as amended, provides the Tribunal with discretionary power to review all or part of its own decisions.

3The Tribunal has provided for review of a final decision or order in Rule 29 of the Tribunal’s Rules of Procedure.

4The starting point is for the Tribunal to determine whether it is advisable to conduct a review when it is requested under Rule 29. Rule 29.09 outlines what the Tribunal may consider. Rule 29.09 reads as follows:

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.

The Request for Review Process

5I have been designated by the Chair to consider the Appellants’ request for a review and determine if it is advisable that one be conducted.

6I have considered and reviewed the following materials:

a. The Appellant’s request for review dated May 25, 2020;

b. The EFO’s response to the Appellant’s request for review dated June 4, 2020;

c. The Appellant’s reply dated June 9, 2020;

d. The Decision of the Tribunal signed by Vice Chair Christine Greydanus and dated April 23, 2020;

e. The Document Brief of Egg Farmers of Ontario, Volumes 1 and 2

f. The Document Brief of the Appellants.

7I will describe items “d” through “f” above as the “Record” of the Tribunal proceedings.

8I did not consult with any member of the Tribunal panel in considering the request for review.

Overview of the Request for Review

9The Appellants appealed to the Tribunal from decisions of the EFO relating to pullet leasing policies. Specifically, the Appellants argued that the Pullet Leasing Pool Policy (the “PLP Policy”) adopted by the EFO in May of 2018 and on January 1, 2019 was adopted in bad faith and for an improper purpose and imposes a penalty on new farmers attempting to enter the market.

10The Appellants sought compensation for the costs incurred as a result of the increase of fees set out in the 2019 policy for those leases granted to pullet producers under the 2019 policy.

11The Tribunal heard evidence from two (2) witnesses on behalf of the Appellants and two (2) witnesses on behalf of the EFO.

12The Tribunal issued a written decision denying the appeal based on several findings outlined in paragraphs 59-76 of its decision.

13The Appellants have challenged the findings of the Tribunal and allege the Tribunal made ten (10) errors in fact and law.

14The parties’ submissions do not indicate that any of the following is a factor that should be assessed while considering the request for review:

a. That there is significant new evidence which was not available at the time of the original appeal (Rule 29.08(a));

b. That any party or other person has relied upon the Tribunal decision to some prejudice (Rule 29.08(c));

c. That any party or other person will be affected by the review process (Rule 29.08(d));

d. The public interest in finality of decisions versus alleged prejudice to the requester (Rule 29.08(e)).

15As such, in order to be successful in their request the Appellants must satisfy me that the Tribunal made material errors of fact or law such that the Tribunal finding would have likely been different if not for these errors.

16The word “material” is key in this analysis. An error in fact or law must be important to the decision of the Tribunal in order to be considered “material” and warrant a review of the decision pursuant to Rule 29.

The Appellants’ Submissions

17I have considered each of the Appellants’ ten (10) submissions and found that no material error of fact or law occurred. I find that there is no basis to grant the Appellants’ request for review of the Tribunal decision.

18I shall address each of the Appellants’ submissions in turn.

Submission #1: The Tribunal failed to take into consideration the significance of the EFO’s Pullet Committee and the EFO Board failing to appropriately review, consider and either grant or deny BVA’s lease request

19The Appellants argue that in January of 2018 EFO staff made the decision to deny the lease applied for by BVA, as opposed to the EFO Pullet Committee or EFO Board making the decision.

20The Appellants argue that having EFO staff make the decision as opposed to the EFO Pullet Committee or EFO Board was contrary to the PLP Policy from December of 2017. The December 2017 PLP Policy states “Any Ontario Pullet Grower, Hatchery or Contractor may apply to the Board to participate in the PLP, however, the EFO Pullet Committee has the right to grant or deny any Pullet Leasing Pool application”.

21The evidence before the Tribunal was that while the January 2018 lease application was initially denied, it was then reconsidered and approved in February of 2018. Evidence led by both the Appellants and the EFO confirmed that at the time of the appeal, all of the Appellants’ lease applications had been granted as requested since the first application was made.

22The process in which the January 2018 lease was denied and then granted was not material to the primary issue before the Tribunal, which is outlined in paragraph 9 of this decision.

23I do not find that the Tribunal made a material error of law or fact in relation to Submission #1. Whether or not EFO staff denied the January 2018 lease is not material to the decision made by the Tribunal.

Submission #2: The Tribunal incorrectly references the denial of three large lease applications in January 2018

24The Tribunal makes reference to three lease applications for large quantities of quota in paragraph 7 of the decision. The Appellants take issue with this, as they argue there was no evidence of this before the Tribunal.

25Whether or not this evidence was before the Tribunal, I find that this evidence had no bearing on the Tribunal’s decision. This evidence was not material, but part of a narrative of the PLP Policy and related events in the relevant time period. In the context of the evidence, I am unable to conclude that the Tribunal made a material error of law or fact with respect to Submission #2.

Submission #3: The EFO identified a need for a mechanism to co-ordinate and connect changes in the number of birds in various housing types with matching changes in the housing of pullets

26The Appellants submit that the Tribunal misunderstood evidence, and improperly stated that a mechanism was proposed or implemented by the EFO to coordinate and connect the changes in the demand for the number of aviary eggs with matching changes in the housing of aviary pullets.

27The Appellants did not specify in their submissions where in the Tribunal’s decision this misunderstanding of evidence is shown, but the Appellants appear to be referring to paragraphs 17-19 of the decision.

28On my review of the record the following evidence was before the Tribunal on this issue:

a. An email from the EFO to the Appellants dated April 29, 2019 stating that “The issue of managing Pullet supply with layer production and interfacing the system with the variable methods being developed by the industry including organic production, free range production and aviary production, is an ongoing focus of the EFO”;

b. A Memorandum to Producers from the EFO dated September 18, 2018 that stated, “With quotas on layer and pullet numbers, there needs to be a mechanism to co-ordinate and connect changes in the number of birds in the various layer housing types with matching changes in the housing of pullets”.

29I find that the Tribunal had evidence before it that supported a finding that a mechanism was proposed or implemented by the EFO to coordinate and connect the changes in the demand for the number of aviary eggs with matching changes in the housing of aviary pullets. No material error of fact or law is found with respect to Submission #3.

Submission #4: Lease as a stop gap for pullet producers

30The Appellants submit that at paragraph 21 of the Tribunal’s decision the Tribunal mischaracterized evidence presented with respect to leased quota in 2018. The Appellants argue that the Tribunal focused on the number of birds rebated without taking into consideration evidence relating to utilization rate.

31The Appellants state that the Tribunal had no regard for the evidence of their witnesses, Mr. Brown and Mr. Houghton, who confirmed that there was no unused space and no barns available to grow the aviary pullets subject to BVA’s lease request.

32The essence of this submission appears to be that the Tribunal was wrong to find that the PLP Policy does not impose a penalty on new farmers entering the market, as new producers need to utilize the lease system because there is greater industry demand than there is quota available to purchase.

33I do not find that the Tribunal mischaracterized this evidence. The material issue in this case was not whether leasing needs to be used to help bridge the gap between available quota for purchase and market demand, but whether the changes made to the PLP Policy themselves, namely the fee increase, penalized new entrants to the market.

34There appears to be no dispute on the Record that leasing is filling a gap between available quota and market demand, and the decision does not indicate that this fact was misunderstood.

35I do not find that the Tribunal made a material error of law or fact in relation to Submission #4.

Submission #5: Construction of New Barns and Application of the Quota System

36The Appellants state that the Tribunal improperly inferred that if lease fees were too low producers would lease quota as opposed to purchasing it, and new barns would be constructed with only small amounts of quota being purchased.

37The Appellants argue that paragraph 25 of the Tribunal decision mischaracterizes the evidence in that there was no evidence before the Tribunal that the Appellants were unwilling to purchase new quota.

38I disagree that paragraph 25 of the Tribunal decision mischaracterizes the evidence. Paragraph 25 does not comment on the Appellants’ willingness to purchase quota. It summarizes the EFO’s arguments on this issue regarding producers in general, not the Appellants specifically.

39On review of the Record, there was evidence before the Tribunal to support a finding that leasing may be used to build new barns by producers with only small amounts of quota being owned. The Tribunal found in paragraph 59 of its decision that that was precisely what BVA did.

40I do not find a material error of fact or law in regard to Submission #5.

Submission #6: EFO Hearing

41The Appellants submit that the Tribunal’s decision refers to a hearing held on June 7, 2018 which was actually held on August 1, 2018 and that this is an error of fact.

42I do not find that the Tribunal made a material error of fact on this issue. The date of the hearing is not material to the Tribunal’s decision.

Submission #7: EFO Policy creates a penalty on certain housing types

43The Appellants argue that there was no evidence before the Tribunal to support a finding that the PLP Policy leasing fees were set at a rate that would serve the intended goals of the PLP Policy.

44The following is some of the evidence that was before the Tribunal regarding the leasing fees:

a. The $0.55 per bird leasing fee charged in the December 2017 PLP Policy was set low and the effect of the fee was being monitored;

b. The two-tier fee structure in the amended PLP Policy approved by the EFO board in May of 2018 was set with the goal of disincentivizing using leases to fill up barns;

c. There was an evolution of the leasing fees in the PLP Policy throughout 2018 through to the January 1, 2019 policy that incorporated producer input. This evolution led to removal of the two-tier fee structure, and replacement with a graduated fee schedule.

45The above is not the entirety of the evidence before the Tribunal regarding the leasing fees and how they were set. However, based on the three points above I find that the Tribunal had evidence before it to support a conclusion that the PLP Policy leasing fees were set at a rate to serve the intended goals of the PLP Policy. I find no material error of fact or law in regard to Submission #7.

Submission #8: Transparent Process

46The Appellants allege that the Tribunal failed to consider the obligation of the EFO to maintain and keep minutes of its meetings and take reasonable steps to prevent loss, destruction or falsification of those minutes.

47The essence of this argument appears to be that in failing to provide copies of the minutes of the EFO board meetings, the EFO failed to engage in a transparent process regarding the changes made to the PLP Policy at issue in the appeal.

48The Tribunal had before it the following evidence regarding the process EFO underwent in amending the PLP Policy in May of 2018 and on January 1, 2019:

a. On March 23, 2018, a Memorandum was sent to producers advising on the lease moratorium, providing background for the decision and posing questions looking for feedback. The EFO received 33 responses to these questions;

b. The EFO underwent a consultation process involving submitting a draft policy to producers for commentary and consultation meetings in September of 2018;

c. The PLP Policy was examined at the Egg & Pullet Farmers’ Workshop on November 28 & 29, 2018.

49The evidence above is not the only evidence in the Record regarding the process the EFO underwent in amending the PLP Policy; however, based on the three points above I find there was evidence before the Tribunal to support the conclusion that the EFO engaged in a transparent process.

50I find no material error of fact or law with respect to Submission #8.

Submission #9: Application of Penalty against Aviary Farms

51The Appellants submit that the Tribunal concluded that the fee structure in the PLP Policy is not a penalty absent any analysis of the evidence and information presented.

52The Appellants again argue in this submission that the Tribunal disregarded evidence substantiating the need for leasing to meet market demand.

53The penalty alleged by the Appellants is the increased cost in the leasing fees.

54I find that the Tribunal did have evidence before it supporting the conclusion that the fee structure in the PLP Policy is not a penalty. The Record includes evidence that the lease rates were set after consultation with producers with the intent of meeting the objectives of the PLP Policy, which are outlined in paragraph 70 of the Tribunal’s decision.

55The Tribunal provided an analysis of its finding that the fee structure did not constitute a penalty at paragraphs 71 through 75 of its decision.

56In response to the submission that the Tribunal disregarded evidence about the need for leasing in the industry, I point to my comments regarding Submission #4. I note that there is no allegation in the Appellants’ submissions that new entrants are being penalized by way of a denial of leases under the PLP Policy.

57I do not find a material error of fact or law with respect to Submission #9.

Submission #10:

58The Appellants submit that the Tribunal’s failure to consider alternative pricing regimes for leases was a denial of procedural fairness. The Appellants rely on Megans v. The Ontario Racing Commission, 2003 CanLII 26509 (ON SCDC), [2003] O.J. No. 1459 in support of the proposition that in order to ensure procedural fairness, alternative penalties must be considered.

59I do not find that the Tribunal’s failure to consider alternative pricing regimes was a denial of procedural fairness. In order for the Tribunal to have considered alternative penalties, the Tribunal must have found that a penalty existed in the first place. The Tribunal did not find that the lease fees were a penalty, and therefore it was not required to consider alternate pricing regimes.

60I find no material error of fact or law with respect to Submission #10.

Conclusion

61I find no material errors in law or fact in the Tribunal’s decision. The Request for Review is denied.