Agriculture, Food and Rural Affairs Appeal Tribunal
Agriculture, Food and Agribusiness Appeal Tribunal 1 Stone Road West Guelph, Ontario, N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: AFRAAT@ontario.ca
Agriculture, Alimentation et Agroalimentaire Tribunal d’appel 1 Stone Road West Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Courriel: AFRAAT@ontario.ca
APPEAL: Sunova Implement Ltd. v CLAAS of America Inc. (RE) [COSTS]
NEUTRAL CITATION: 2024 ONAFRAAT 4
STATUTE: Ministry of Agriculture, Food and Rural Affairs Act
HEARING IN WRITING: February 6, 2024
IN THE MATTER OF the Farm Implements Act, R.S.O. 1990, c. F.4
AND IN THE MATTER OF an application to the Agriculture, Food and Rural Affairs Appeal Tribunal (“Tribunal”) by Sunova Implement Ltd., under Section 5 of the Farm Implements Act regarding a dispute with CLAAS of America Inc.
AND IN THE MATTER OF a costs application pursuant to Rule 34 of the Tribunal’s Rules of Procedure.
BETWEEN:
Sunova Implement Ltd. Applicant
– and –
CLAAS of America Inc. Respondent
Represented by Eric K. Gillespie and John May
Represented Steven Rosenhek and Montana Licari
HEARD: In Writing
Before: Glenn C. Walker, Chair
DECISION ON THE MATTER OF COSTS
Background
1Sunova Implement Ltd. (“Sunova”) brought a motion for production of documents (“Sunova Motion”). This motion was dismissed on September 22, 2023.
2CLAAS of America Inc. (“CLAAS”) also brought a motion for production of documents (“CLAAS Motion”). This motion was granted in a decision dated September 22, 2023.
3On October 19, 2023, CLAAS made an application to the Tribunal for an order for costs against Sunova in the amount of $5,348.40 in respect of both the Sunova Motion and the CLAAS Motion. Submissions with respect to the costs application have been received from both CLAAS and Sunova.
Law Concerning Costs
4A tribunal may order a party to pay all or part of another party’s costs in a proceeding where it has made rules with respect to costs and the conduct or course of conduct of a party has been unreasonable, frivolous, or vexatious or a party has acted in bad faith.1
5The Tribunal has made rules with respect to costs. The relevant portions of Rule 34 of the Tribunal’s Rules of Procedure follow:
34.01 Who May Request an Order for Costs Where a party believes that another party has acted unreasonably, frivolously, vexatiously or in bad faith considering all of the circumstances, it may ask for an award of costs within 30 days of an order being made or the matter being withdrawn or dismissed.
34.02 Period Eligible for Costs Order The Tribunal may make a costs award for conduct at any time during a proceeding.
34.03 Powers of Tribunal The Tribunal may deny or grant the request or award a different amount.
34.04 Circumstances in which Costs Order May be Made Unreasonable, frivolous, vexatious or bad faith conduct can include, but is not limited, to: i. Failing to attend a hearing event or failing to send a representative when properly given notice, without contacting the Tribunal; ii. Failing to give notice or adequate explanation or lack of co-operation during pre-hearing proceedings, changing a position without notice, or introducing an issue or evidence not previously mentioned or included in a procedural order; iii. Failing to act in a timely manner or to comply with a procedural order or direction of the Tribunal where the result was undue prejudice or delay; iv. Conduct necessitating unnecessary adjournments or delays or failing to prepare adequately for hearing events; v. Failing to present evidence, continuing to deal with issues, asking questions or taking steps that the Tribunal has determined to be improper; vi. Failing to make reasonable efforts to combine submissions with parties of similar interest; vii. Acting disrespectfully or maligning the character of another party; and viii. Knowingly presenting false or misleading evidence.
34.05 Tribunal not bound The Tribunal is not bound to order costs when any of these examples occur. The Tribunal will consider the seriousness of the misconduct. If a party requesting costs has also conducted itself in an unreasonable manner, the Tribunal may decide to reduce the amount awarded.
6The Farm Implements Act does not confer on the Tribunal any special jurisdiction to award costs and it is bound by the provisions of the section 17.1 of the Statutory Powers Procedure Act and its Rules of Procedure.2
7Finally, an award of costs is in the discretion of the administrative tribunal that makes the award.3
Sunova Motion Costs
Respondent’s Position
8CLAAS relies exclusively on Rule 34.04(v) in support of it claim for costs on the Sunova motion on the basis that Sunova failed to present necessary evidence to support the motion.
9With respect to whether GJ’s was under the control of CLAAS, CLAAS admits that Sunova provided some evidence but that the Tribunal found that the evidence was insufficient to establish its allegation that GJ’s was under the control of CLAAS.
10With respect to Sunova’s proposition that the documents sought were available to CLASS pursuant to the dealership agreement, CLAAS submits that Sunova presented no evidence to support this allegation.
11CLASS also argues that Sunova provided no evidence to support the relevance of the documents sought and failed to explain the relevance of the communications requested.
Applicant’s Position
12In response, Sunova argues that the conduct complained of must be unreasonable, frivolous, vexatious, or bad faith and that the failure to present evidence is simply an example of this type of conduct. Sunova also submits that the failure to provide sufficient evidence to satisfy the Tribunal on the issue at hand is not unreasonable, frivolous, vexatious or bad faith conduct. There must be a failure to provide any evidence.
13Sunova submits that the Tribunal must also consider the seriousness of the misconduct in accordance with Rule 34.05.
Analysis
14As Sunova alluded to in its submissions, the failure to provide any evidence would amount to unreasonable conduct and result in an order for costs.
15However, where relevant evidence is presented and it is, in the opinion of the Tribunal, insufficient to convince the Tribunal to make the requested order, it is neither unreasonable, frivolous, vexatious or in bad faith.
16On the issue as to whether GJ’s was under the control of CLAAS, the evidence presented was insufficient. The Tribunal finds that this conduct was not unreasonable, frivolous, vexatious or in bad faith.
17On the issue as to whether CLAAS could access the documents from GJ’s pursuant to their dealership agreement no evidence was presented including a copy of the dealership agreement in question. On this issue, in the absence of such evidence, there was no chance of success. The Tribunal finds that this was unreasonable conduct.
18On the third issue, Sunova failed to provide evidence to support the relevance of the GJ’s documentation it requested from CLAAS. The Tribunal held that Sunova did not provide evidence through its expert to support a different methodology for calculating damages based on the prior financial performance of the successor dealership. In the absence of such evidence, relevancy could not be determined by the Tribunal and there was no chance of success. The Tribunal finds that this was unreasonable conduct.
19The over arching principle in any production motion is the relevancy of the documentation requested. On the only issue where Sunova presented evidence, that is the first issue above, success on that issue would only have established CLAAS’ ability to access the documentation. On the issue of relevancy, the motion was bound to fail.
20As the Tribunal stated in its decision at paragraph 42, “If the applicant intends to put forward at the hearing another method to calculate damages other than the past performance approach, it was incumbent upon it to explain to the Tribunal as part of this motion what that method is, how the requested documents would be used in applying that method and that it would be an appropriate method to apply in these circumstances. It is not sufficient to state only that there are other methods of calculating damages.”
21Both parties are represented by experienced counsel. Misconduct of this nature by an unrepresented party would be considered less serious. However, in these circumstances the Tribunal finds that the failure of the moving party to provide any evidence to support the relevancy of the documentation requested made the bringing of this motion unreasonable and nothing more than a fishing expedition. Costs against Sunova are therefore warranted.
CLAAS Motion Costs
Respondent’s Position
22CLAAS brought a motion for production. It sought documentation to support the conclusions reached in a draft report on the calculation of damages (“Hoare Report”) put into evidence in the motion by CLAAS as Exhibit “F” to the affidavit of Montana Licari.
23CLAAS maintained that this documentation was foundational to Sunova’s claim for damages.
Applicant’s Position
24Sunova did not dispute the relevancy of the documentation requested by CLAAS. It provided some documentation but refused to provide the balance resulting in CLAAS bringing this motion.
25Sunova resisted the motion claiming that the motion was premature because the Hoare Report was only a draft report submitted for settlement purposes, the report was two years old, the report was incomplete, out-of-date and there was no certainty that it would be used at the hearing.
Analysis
26The Tribunal granted the motion finding that the documentation requested was relevant to the issues before it and that much of the information requested by CLAAS is relevant to the issue of damages even in the absence of the draft Hoare Report.
27On the costs application CLAAS submits that Sunova did not file any evidence to establish that the documents were not relevant. Nor did Sunova dispute the relevancy of the documents.
28Sunova asserts that its choice to defend this motion was not unreasonable and not serious enough to subject it to an award of costs.
29The Tribunal finds that Sunova’s failure to provide evidence that the documentation was not relevant and its decision to resist the motion was unreasonable and perhaps frivolous.
30In considering the seriousness of the misconduct the Tribunal cites the comments that it made in the CLAAS decision at paragraphs 13 and 14:
“This application was commenced on September 1, 2022 and the discovery stage has not yet been completed. The applicant’s request to dismiss this motion on the basis that it is premature will further delay this proceeding and may require further motions.
The purpose of the Rules of Procedure, including Rule 24.02, is to assure the efficiency and timeliness of proceedings; and to assist the Tribunal in fulfilling its statutory mandate. (Rule 1.02, Tribunal’s Rules of Procedure) It is in the interest of justice that the Outstanding Documents be provided by Sunova now and not sometime in the distant future.”
31The Tribunal finds that Sunova’s conduct was unreasonable and serious and that costs of this motion against Sunova are warranted.
Quantum of Costs
32CLAAS claims cost of $5,348.40 on a partial indemnity basis with respect to both motions. The amount of costs claimed is not disputed by Sunova.
33The Tribunal finds that the quantum of costs claimed is reasonable.
Order
34Sunova shall pay to CLAAS costs of both motions fixed in the amount of $5,348.40, inclusive of HST, within 30 days of the date of this Order. If costs are not paid in full within 30 days, the amount owing shall bear interest at the Courts of Justice Act rate from the date of the Order.
Released: February 6, 2024
Footnotes
- Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, subsections 17.1(1) (2)
- Chesterman Farm Equipment Inc. v. CNH Canada Ltd., 2016 ONSC 698, (Divisional Court), para. 187
- Dell v. Zeifman Partners Inc., 2020 ONSC 3881, (Divisional Court), para.42