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:
Skotidakis Goat Farm (1048547 Ontario Inc.) v DFO [MOTION TO PRODUCE]
Skotidakis Goat Farm (1048547 Ontario Inc.) v DFO
STATUTE:
Ministry of Agriculture, Food and Rural Affairs Act
HEARING:
November 29, 2019 and January 10, 2020
DATE OF DECISION:
January 4, 2020
002Skotidakis19
NEUTRAL CITATION:
2020 ONAFRAAT 02
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 1048547 Ontario Inc. (Skotidakis Goat Farm), from decisions of the Dairy Farmers of Ontario, including retroactive assessments, pricing, fines, and milk delivery reduction/cessation decisions.
AND IN THE MATTER OF: A Motion by the Appellant 1048547 Ontario Inc. (Skotidakis Goat Farm) under subsection 16(7) of the Act for an order relating to the Statutory Obligations of the Respondent, the Dairy Farmers of Ontario (“DFO”) to forthwith provide the Tribunal with all relevant by-laws, documents and other materials, of any kind whatsoever, in the DFO’s possession.
Before: John O’Kane, Vice-Chair; Harold McNeely, Vice-Chair; and Peter Koroneos, Member.
Appearances:
David Wilson, counsel for Dairy Farmers of Ontario
Julie Mouris, counsel for Dairy Farmers of Ontario
James McIlroy, counsel for the Appellant 1048547 Ontario Inc. (Skotidakis Goat Farm)
DECISION
On December 16, 2019, the Tribunal released a decision regarding an interlocutory motion by the Respondent Dairy Farmers of Ontario (“DFO”) to define the statutory stay in this appeal. At the January 10, 2020 continuation of this further interlocutory motion related to subsection 16(7) of the Ministry of Agriculture, Food and Rural Affairs Act (the “Act”) Mr. McIlroy advised that the December 16, 2019 decision contained an incorrect title of proceedings and description about his representation. Based on Mr. McIlroy’s submissions to the panel on this point, the title of proceedings will henceforth reflect there is a single Appellant being 1048547 Ontario Inc. (Skotidakis Goat Farm) and that Mr. McIlroy represents that Appellant only.
The current motion requires the Tribunal to interpret the meaning of subsection 16(7) of the Act and to determine if DFO has complied with its obligations under that subsection, and if not, what measures DFO must take to comply.
In the circumstances, the Tribunal is satisfied that DFO has complied with its obligations under subsection 16(7) of the Act and because of that, the motion is dismissed.
THE APPELLANT’S MOTION
The Appellant’s motion seeks an Order that the Tribunal reject a narrow interpretation of DFO’s subsection 16(7) obligations and that the Tribunal Order DFO to file with the Tribunal these eleven categories of documents:
All DFO correspondence with its auditors, including Ms. Maggie Straathof;
All documents regarding Ms. Maggie Straathof and her family DFO/Gay Lea Foods members, including Dick Straathof;
All relevant documents regarding correspondence, telephone calls, meetings, etc. between the DFO and its auditors, Ferguson + Mak LLP, regarding Skotidakis;
All relevant documents regarding correspondence, telephone calls, meetings, etc. between the DFO and its auditors, KPMG, regarding Skotidakis;
All relevant documents regarding correspondence, telephone calls, meetings, etc. between the DFO and the Canadian Dairy Commission, regarding Skotidakis;
All relevant documents regarding correspondence, telephone calls, meetings, etc. between the DFO and the Joint Audit Committee regarding the Skotidakis audits;
All relevant documents regarding correspondence, telephone calls, meetings, etc. between the DFO and the Dairy Farmers of Canada ("DFC") regarding Skotidakis;
All relevant documents regarding correspondence, telephone calls, meetings, etc. between the DFO and the Ontario Dairy Council ("ODC") regarding Skotidakis;
All relevant documents regarding correspondence, telephone calls, meetings, etc. between the DFO and the Ontario Farm Products Marketing Commission (the "Commission") regarding Skotidakis;
All relevant documents regarding correspondence, telephone calls, meetings, etc. between the Minister of Agriculture, Food and Rural Affairs or his officials, and the DFO or any of the DFO's lobbyists, regarding Skotidakis; and
All relevant documents regarding correspondence, telephone calls, meetings, etc. between the DFO and other Ontario Processors, including Gay Lea Foods, regarding audits and Skotidakis.
THE APPEAL BEFORE THE TRIBUNAL
Interpreting and applying subsection 16(7) of the Act requires an understanding of the matter(s) under appeal.
The appeal genesis is a DFO decision dated November 26, 2018 based on the findings in three audits that reported incomplete and unreliable record keeping related to the Appellant’s reported milk utilizations.
That November 26, 2018 DFO decision is set out in a letter of that date from DFO to Mr. John Skotidakis, Skotidakis Inc.1 The letter was by DFO’s General Counsel and Corporate Secretary. The essence of that DFO decision is captured in:
“SGF is in breach of its obligations pursuant to the Milk Act and its Regulations to keep proper records and properly and accurately report milk utilization. Accordingly, DFO will be taking the following steps to address SGF breach so that it is treated the same as all other processors in Ontario.”
The letter then set out four consequences DFO would visit on the Appellant resulting from the alleged non-compliance.
On November 30, 2018 the Appellant responded to DFO by e-mail indicating that it had received the DFO’s letter of November 26, 2018 on November 29, 2018 and that the Appellant was appealing the DFO decision:
“… SGF is hereby appealing the Decisions in your November 29th letter pursuant to Subsection 16(2) of the Ministry of Agriculture, Food and Rural Affairs Act …”
In response to the Appellant’s November 30, 2018 e-mail, DFO advised that it insisted the Appellant’s issue with the November 26, 2018 decision proceed to a reconsideration hearing before the DFO Board. That reconsideration hearing before the DFO Board was eventually scheduled for February 28, 2019.
Representatives of the Appellant attended at the February 2019 DFO Board meeting for the hearing. According to the DFO Board meeting minutes, “Mr. Skotidakis requested to rescind the letter, November 26, 2018, accept the settlement cheque and crystalize his milk supply.”
The DFO Board met again on March 27, 2019 and according to the DFO Board meeting minutes “the Board confirmed its decision as set out in the November 26, 2018 letter addressed to Mr. Skotidakis…”. The DFO Board’s decision arising out of the February 2019 hearing was set out in a letter to Mr. John Skotidakis, Skotidakis Inc. dated April 4, 2019. The letter was by DFO’s General Counsel and Corporate Secretary. The essence of that DFO decision is captured in:
“SGF is in breach of its obligations pursuant to the Milk Act and its Regulations to keep proper records and properly and accurately report milk utilization. Accordingly, DFO will be taking the steps outlined in its November 29, 20182 letter to address SGF breach so that it is treated the same as all other processors in Ontario.”
On April 8, 2019, the Appellant delivered a Notice of Appeal to the Tribunal containing, among other matters, the following “Statement of the Matter Being Appealed”:
“Skotidakis is aggrieved by Decisions taken by the DFO in the November 29th and April 4th letters, including retroactive reassessments, pricing, fines, and milk delivery reduction/cessation decisions and threats.”
On August 2, 2019, the Appellant delivered an Amended Notice of Appeal to the Tribunal amending, among other matters, the “Statement of the Matter Being Appealed” to include, among other details:
“… the November 29th letter decisions were not authorized by the DFO Board of Directors; and the DFO February 27th Skotidakis Reconsideration Hearing, and the April 4th decision to reconfirm the November 29th decisions, are tainted and contrary to the requirements of procedural fairness.”
The Tribunal views the matter under appeal as captured in those words used by the Appellant in its Notice(s) of Appeal. To paraphrase the DFO argument on this point, with which we agree, the appeal does not concern the entire business relationship between the Appellant, the DFO and the larger processing community dating back over many years.
INTERPRETING SUBSECTION 16(7) OF THE ACT
Subsection 16(7) of the Act appears in section 16 under the heading “Persons entitled to notice” and provides:
Upon receipt of a notice under subsection (2.1), the Tribunal shall forthwith notify the Commission, the local board, the marketing board or the Director where any such body or the Director has an interest in the subject-matter of the appeal and such body or the Director, as the case may be, shall thereupon forthwith provide to the Tribunal all relevant by-laws, documents or other materials, of any kind whatsoever, in its or his or her possession.
Interpreting that subsection requires a contextual approach. It begins by examining those words in section 16 context and in the Act’s context and in the overall legislative scheme context.
Section 16 Context
Section 16 is titled “Appeals to Tribunal” and sub-section 16(1) authorizes a person aggrieved by “orders, directions, decisions, policies or regulations” made by a “Director”, a “local board”, a “marketing board” or in more limited circumstances, the Ontario Farm Products Marketing Commission (“Commission”) under either the Farm Products Marketing Act or the Milk Act to appeal to the Tribunal.
That wording in subsection 16(1) of the Act informs a broad spectrum of regulatory decision outcomes and several types of regulatory decision-makers subject to appeals to the Tribunal.
Under subsection 16(2.1) appeals start with an aggrieved party filing written notice of appeal with the Tribunal and sending a copy of the appeal notice to the regulatory decision-maker which could be a Director, the Commission, a local board or a marketing board.
Once the Tribunal receives a written notice of appeal, the Tribunal is obliged under subsection 16(7) to forthwith notify the appropriate regulatory decision-maker of the appeal and the regulatory decision-maker “shall thereupon forthwith provide to the Tribunal all relevant by-laws, documents or other materials, of any kind whatsoever, in its or his or her possession”. These italicized words from the subsection frame the focus.
In subsection 16(4), the Legislature granted the Tribunal wide discretion to control what matters are worthy of an appeal hearing. That discretion can be exercised if it relates to an order, direction, policy, decision or regulation that the appellant has known of for more than a year before the appeal notice was filed or where the subject of the appeal is trivial or the appeal is frivolous, vexatious or not made in good faith or where the appellant does not have a sufficient interest in the appeal.
In subsection 16(5) the Legislature created a pre-condition to Tribunal appeals related to orders, directions, policies, decisions or regulations of a local board or a marketing board. That pre-condition requires that the appellant must first apply to the local board or marketing board for a hearing and the local board or marketing board has either refused to grant the requested relief or has failed to decide the matter within sixty days.
The Tribunal’s powers on an appeal are broad as set out in sub-section 16(11) to include the power to direct the Commission, the local board, the marketing board or the Director to “take such action as he or she is authorized to take” under their respective legislation and “as the Tribunal considers proper”, and the Tribunal has the power to substitute its opinion for that of the original regulatory decision-maker.
The breadth of the Tribunal power on appeal is further animated by sub-section 16(15) that authorizes the Tribunal, after it has decided an appeal, to reopen the hearing and make a new decision, whether on its own motion or the motion of a party.
Consistent with past Tribunal practice and jurisprudence, the panel’s view is that an appeal to the Tribunal is not an appeal “on the record” created by the regulatory decision maker but instead the Tribunal conducts a fresh hearing sometimes described as a hearing “de novo”.
Ministry of Agriculture, Food and Rural Affairs Act Context
The Act continues the Ministry of Agriculture and Food as the Ministry of Agriculture, Food and Rural Affairs and empowers the Minister with the direction and control of the administration of law relating to agriculture and food.
The Act also continues the Commission and provides that the Minister may issue directives to the Commission relating to administrative and policy matters relating to regulating and controlling production and marketing of farm products, milk and cream and local boards and marketing boards.
The Act also continues the Farm Products Appeal Tribunal as the Agriculture, Food and Rural Affairs Appeal Tribunal and generally dictates the composition, structure and practices of the Tribunal.
The Act is framework legislation for the continuation, operation and administration of the Ministry, the Commission and the Tribunal.
Overall Legislative Scheme Context
The scheme of the legislation includes the Farm Products Marketing Act (“FPMA”) and the Milk Act.
Both those legislative enactments contain purpose sections essentially the same. Those purposes are the control and regulation in any aspects of the producing and marketing within Ontario of farm products.
Farm products within this legislative scheme includes almost two dozen different agricultural commodities such as berries, veal cattle, beans, hogs, grain, tobacco, apples, potatoes, turkey, eggs, tender fruit, sheep, chicken and milk.
The legislative scheme creates local boards or marketing boards with regulatory authority regarding various agricultural commodities.
The Commission is established in this legislative scheme as a supervising regulatory authority, supervising local boards and marketing boards.
Local boards or marketing boards are granted powers directly by regulation and other powers by delegation from the Commission.
Under the FPMA, Directors are appointees of the Minister of Agriculture, Food and Rural Affairs with the powers assigned to them by the FPMA or any other Act.
Under the Milk Act, Directors are appointees of the Minister of Agriculture, Food and Rural Affairs or sometimes, appointees of a designated administrative authority with responsibility to “carry out the administration and enforcement of those provisions of this Act and the regulations with respect to the quality of milk, milk products and fluid milk products within Ontario”.
This legislative scheme creates many possible regulatory decision-making processes of many regulatory decision-makers that could cause regulatory outcomes that include an “order, direction, decision, policy or regulation”.
DFO’s Statutory Obligation to the Tribunal
The words the legislature used in subsection 16(7) relevant to this motion refer to physical things; “by-laws”, “documents” or “other materials” of “any kind whatsoever” that are in the possession of the regulatory decision maker. We interpret those physical things to include electronic versions of by-laws and documents.
In contrast to that relatively narrow possessory scope, the Superior Court Rules of Civil Procedure contemplate a broader possessory scope in documentary disclosure in civil lawsuits. That broader scope encompasses documents that are or have been in the “possession, power and control” of a litigating party.
The most appropriate analogy to the record compilation obligation under subsection 16(7) is section 20 of the Statutory Powers Procedure Act (“SPPA”) that requires a tribunal to compile a record of any proceeding in which a hearing has been held. Under the SPPA the word “tribunal” is defined broadly to include any statutory decision maker and would include the DFO. The most apposite provisions from paragraphs (d) and (f) of section 20 of the SPPA is the documentary evidence component of the record.
“all documentary evidence filed with the tribunal, subject to any limitation expressly imposed by any other Act on the extent to or the purposes for which any such documents may be used in evidence in any proceeding;”
“the decision of the tribunal and the reasons therefor, where reasons have been given.”
The subsection 16(7) obligation of DFO in circumstances of this appeal is to promptly forward to the Tribunal the essential elements of the “record” that informed the impugned regulatory decision.
That statutory obligation is not a “one size fits all” obligation as the variety of regulatory outcomes is as broad as the number of potential regulatory decision-makers. It is a statutory obligation that is flexible and responds to the nature of the regulatory outcome and the nature of the process resulting in that outcome.
Here, the regulatory outcome that is the genesis of this appeal was DFO staff imposing several consequences on the Appellant, all in reliance on three audits. There was no hearing at that stage, and the “relevant …, documents …., of any kind whatsoever, in its …. possession” would consist of the three audit reports that informed that staff decision, which was set out in the November 26, 2018 letter from DFO to the Appellant.
Following the Appellant communicating its intention to appeal that DFO staff decision, DFO required that the decision be reconsidered by the DFO Board of Directors in a reconsideration hearing where the Appellant could appear and be heard. The DFO Board conducted a reconsideration hearing and the regulatory outcome was the DFO Board confirming the DFO staff decision, which confirmation was set out in the April 4, 2019 letter from DFO to the Appellant. There was a hearing at that stage, and the “relevant …, documents …., of any kind whatsoever, in its …. possession” would consist of the documentary information that informed the DFO Board’s decision and the decision and any reasons for decision. That would include any documents considered by the DFO Board in it confirming the staff decision, excluding advice protected by either lawyer-client privilege or litigation privilege.
The statutory obligation to compile and transmit the decision-making “record” is owed to the Tribunal and not to the parties to the appeal. Subsection 16(7) contains no reference to those “by-laws”, “documents” or “other materials” being provided to the parties to the appeal.
While subsection 16(7) requires the regulatory decision-maker to forward to the Tribunal the essential elements of the decision making “record”, the Tribunal does not conduct an appeal of the “record” but conducts a fresh hearing or a hearing de novo, except in very limited circumstances as set out in subsection 16(4) of the Act.
In the Tribunal’s view, the purpose of subsection 16(7) of the Act is to provide the Tribunal with enough information and evidence to exercise its authority set out in subsection 16(4). That discretionary authority is to pre-emptively dispose of appeals. The statutory considerations for that authority include appeals the Tribunal considers trivial, frivolous, vexatious, not made in good faith, where the appellant lacks sufficient interest or where the appeal relates to a regulatory decision made more than a year before the notice of appeal was filed. The essential elements of the regulatory decision-maker’s “record” afford the Tribunal the requisite evidentiary basis to make a judicious determination under subsection 16(4) of the Act.
DFO’s subsection 16(7) obligation is to file the essential elements of its decision-making “record” with the Tribunal. That statutory obligation to the Tribunal should not be confused or conflated with disclosure or discovery processes engaged by the appeal litigation.
The Tribunal has developed Rules of Procedure under the section 25.1 authority of the SPPA and those Rules include disclosure of documents (Rule 20) and limited opportunity for examination for discovery (Rule 26).
The disclosure and discovery processes in the Tribunal’s Rules stand in distinction from the regulatory decisions-maker’s statutory obligation to the Tribunal under subsection 16(7) of the Act to compile and forward the essential elements of the decision-maker’s “record” to the Tribunal.
THE SUBSECTION 16(7) JURISPRUDENCE
The Appellant provided three Tribunal decisions to support its motion.
Decisions from other Tribunal panels are not binding as the principle of stare decisis has no application between coordinate hearing panels and the three cited decisions provide no authoritative assistance to the Appellant.
Despite such cases not creating binding precedent, they can inform and foster the development of a consistent body of tribunal jurisprudence when they provide a detailed and reasoned analysis of the law. However, these three cases provide no assistance to our analysis about the statutory interpretation and application of subsection 16(7) of the Act.
In Minnema v Ontario Farm Products Marketing Commission 2009 ONAFRAAT 12, the Tribunal considered a motion related to the statutory stay provisions arising from a Commission decision and a motion by the Appellant Minnema requesting “production of letters that initiated the Commission hearing”. We conclude from that decision that the Commission had conducted a hearing and decided about restructuring the pork production/marketing system after receiving those letters. The Commission had produced a letter but redacted the signatories claiming protection of personal information. Commission counsel confirmed there was no privacy legislation authority that precluded the Tribunal ordering unredacted copies of the letters that initiated the Commission hearing. The Minnema request was very narrow. Minnema wanted to know who had signed the letters to the Commission that initiated the hearing that lead to the Commission’s decision under appeal.
The Tribunal made two production orders. The first was made under subsection 16(7) of the Act and the second was a further order that the Commission provide the letters that initiated the Commission hearing, without the redacted signatures. Had the Tribunal considered that the initiating letters were subsumed within the scope of the subsection 16(7) obligation, there would be no need to make the further order it did to produce the unredacted letters.
The Minnema decision is of no use to us on this motion because the reasons contained no analysis of the meaning of subsection 16(7) of the Act in the section 16 context and in the Act’s context, and in the overall legislative scheme context for the regulation and control of agriculture. The reasons did not expand on the meaning of the words in subsection 16(7).
In Georgian Bay Milk Company Ltd. v. Dairy Farmers of Ontario, 2003 ONAFRAAT 12, the Tribunal considered a motion to determine whether all relevant by-laws, documents, or other materials, of any kind, in its possession had been provided to the Tribunal by DFO. The factual context for that motion related to a time when milk producers could market milk to processors selling into the export market without the requirement of holding production quota from DFO. Because of decisions before the World Trade Organization, Canada and the DFO dismantled that part of the supply management system for milk that permitted exports of milk from non-quota holding producers.
The Tribunal ordered the DFO to provide the appellant with all relevant documentary evidence by a specified date however there was no analysis of the meaning of subsection 16(7) of the Act in the section 16 context and in the Act’s context, and in the overall legislative scheme context for the regulation and control of agriculture. The reasons did not expand on the meaning of the words in subsection 16(7). Therefore, the Georgian Bay case is of no use to us on this motion.
In Elite Swine Inc. et al. v. Ontario Pork Producers’ Marketing Board 2004 ONAFRAAT 36, the Tribunal considered several motions that included restricting access to certain documents and requiring the Respondent marketing board to file an affidavit attesting that it had disclosed all documents related to the matter under appeal and describing how such documents were identified. The context was decisions made by the pork marketing board to increase service fees and it wished to keep from public access part of the material it relied on as its rationale for increasing its service fees but was prepared to disclose the materials to the appellants and their experts provided that confidentiality undertakings were given and the materials not be disclosed to the public.
The Tribunal ordered that access to the materials be restricted subject to the appellants and their experts having access to the materials on condition they signed the confidentiality undertakings. The Tribunal found there was no basis under the Act that required the marketing board to deliver an affidavit attesting that it had met its statutory obligation. In that regard, the Tribunal found that the statute “speaks for itself”.
Like Minnema and the Georgian Bay case, the Elite Swine case is of no use to us on this motion as the reasons for decision do not analyse the meaning of subsection 16(7) of the Act in the section 16 context and in the Act’s context, and in the overall legislative scheme context for the regulation and control of agriculture. The reasons did not expand on the meaning of the words in subsection 16(7).
DOCUMENTS DFO PROVIDED TO THE TRIBUNAL
On May 22, 2019, DFO provided these documents to the Tribunal related to the November 26, 2018 DFO staff decision:
November 26, 2018 DFO letter outlining DFO staff decision;
October 22, 2018 audit letter from the Canadian Dairy Commission (“CDC”) to DFO;
September 17, 2018 audit memo from CDC;
September 17, 2018 memo from KPMG to DFO and the Ontario Dairy Council (“ODC”);
September 8, 2015 direction letter from DFO to all Ontario milk processors;
June 24, 2016 Minutes of Settlement between DFO and Skotidakis Goat Farm;
Undated Summary Information for the Reconsideration Hearing for Skotidakis Goat Farm;
August 22, 2017 audit letter from Ferguson + Mak LLP to DFO;
November 30, 2018 to January 25, 2019 e-mail exchanges between Skotidakis and DFO;
April 4, 2019 DFO letter to Skotidakis Inc. outlining DFO Board reconsideration decision;
Ontario Regulation 209/99 By-Laws for Marketing Boards;
DFO Procedures for Conducting Board Hearings;
DFO Board Meeting Minutes from February 27 and 29, 2019;
DFO Board Meeting Minutes from March 26 and 27, 2019.
DFO’s transmission of that listed material to the Tribunal discharged its subsection 16(7) obligation under the Act to “forthwith provide to the Tribunal all relevant by-laws, documents or other materials, of any kind whatsoever, in its…possession”.
CONCLUSION
Besides the materials DFO provided to the Tribunal to discharge its subsection 16(7) obligation under the Act, DFO has also produced to the Appellant, and filed with the Tribunal voluminous materials that provide further context for the appeal. DFO has disclosed those additional materials to the Appellant above and beyond its obligation to the Tribunal under subsection 16(7) of the Act.
While the Appellant’s motion is framed as a motion under subsection 16(7) of the Act, the breadth of materials sought in the eleven categories is a fishing expedition.
In actuality the Appellant’s motion is a motion for broad documentary discovery made contrary to the Tribunal’s Rules. Rule 26 creates a specific process to pursue discovery that requires an affidavit on behalf of the moving party and no such affidavit has been provided, despite a prior Tribunal procedural order that specifically directed that affidavit evidence be filed.
ORDER
For the reasons given,
- The motion is dismissed.
DATED at Collingwood, Ontario this 4th day of January, 2020.