Sunova Implement Ltd. v. CLAAS of America Inc., 2025 ONAFRAAT 16

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL:

Sunova Implement Ltd. (RE)

[Costs Decision]

CLAAS of America Inc. (RE)

[Costs Decision]

STATUTE:

Farm Implements Act, R.S.O. 1990, c. F.4

HEARING:

In Writing

DATE OF DECISION:

December 22, 2025

001Sunova22

NEUTRAL CITATION:

2025 ONAFRAAT 16

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 request made 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

Previously Represented by Steven Rosenhek and Montana Licari, now represented by Christopher Casher

HEARD: In Writing

Before:

Glenn C. Walker, Chair

TRIBUNAL COSTS DECISION

Background

1. Sunova Implement Ltd. (“Sunova”) brought a motion for the recusal of the Tribunal Chair (“Recusal Motion”). This motion was heard and dismissed on December 7, 2023 with written reasons released on December 19, 2023 (“Recusal Motion Decision”).

2. The Recusal Motion followed the decisions of the Tribunal Chair on two motions for production (“Production Motions”). The motion of the Applicant for production was dismissed. The motion of the Respondent for production was successful. The Respondent was awarded costs on both motions.

3. On January 18, 2024, CLAAS of America Inc, (“CLAAS”) made a request to the Tribunal for an order for costs against Sunova in the amount of $6,552.02 on a substantial indemnity basis in respect of the Recusal Motion. Written submissions with respect to the costs request have been received from both CLAAS and Sunova.

4. Sunova then made an application to the Divisional Court for a judicial review of the Recusal Motion Decision.

5. Sunova requested that the issue of the costs of the Recusal Motion be addressed following whatever disposition was made by the Divisional Court. On March 6, 2024, the Tribunal granted Sunova an adjournment of the costs request to be addressed after the Divisional Court had disposed of the judicial review.

6. On November 27, 2025, the Divisional Court dismissed the application for judicial review on the grounds of prematurity. This motion for costs related to the Recusal Motion may now proceed.

Submissions of the Respondent

7. The Respondent submits that the Applicant acted unreasonably, frivolously, vexatiously and/or in bad faith in bringing the Recusal Motion and that the bringing of the Recusal Motion was improper and/or without factual or legal merit.

8. In support of these submissions the Applicant relies upon the following grounds:

i. Sunova provided no evidence, let alone cogent evidence, which would support a conclusion that there was bias or an apprehension of bias.

ii. The purpose of the Recusal Motion was improper as it was an attempt to re-argue the issues decided in the previous Production Motion decisions made by the Tribunal Chair which were unfavourable to Sunova and improperly constituted a collateral attack on those motion decisions.

iii. Based on the above, the Recusal Motion was bound to fail.

Submissions of the Applicant

9. The Applicant argues that costs should only be awarded pursuant to Rule 34 where the conduct is unreasonable, frivolous, vexatious or bad faith and serious.

10. Sunova further submits the issues raised by CLASS are issues of procedural fairness and natural justice that arose and arise in any adjudicative process irrespective of its outcome and relate to submissions which are not matters of evidence.¹

The Law

11. A 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.²

12. The 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.

13. The 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.³

14. Finally, an award of costs is in the discretion of the administrative tribunal that makes the award.⁴

Analysis

15. The record shows that Sunova failed to provide any factual evidence on the Recusal Motion to substantiate the allegation that the Tribunal Chair was biased or that there was any apprehension of bias.

16. Sunova’s only argument appeared to be that the Tribunal Chair had made decisions in the Production Motions which were unfavourable to it and with which it disagreed.

17. In the Recusal Motion Decision, the Tribunal adopted an obiter dicta statement made in another Tribunal decision involving counsel for the Applicant which stated that “interlocutory motions frequently involve the tribunal making rulings that will be unfavourable to one of the parties before it. Making an unfavourable interlocutory decision does not mean that the tribunal member making that interlocutory decision has pre-judged the substantive dispute between the parties. Similarly, a reasonable apprehension of bias does not arise simply because a tribunal member has ruled in favour of one of the parties on a different issue”.⁵

18. The arguments put forward by counsel for Sunova during the Recusal Motion were in essence what he deemed to be possible grounds for the appeal of the decisions made on the Production Motions.

19. In oral argument of the Recusal Motion, he quite candidly admitted that should the Recusal Motion be successful, the Applicant would be able to set aside the decisions which the Tribunal Chair had made on the Production Motions. The Tribunal referred to this in the Recusal Motion Decision.

If this recusal motion is successful, the Applicant will rely upon the decision of the Supreme Court of Canada in Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities)8, as grounds for setting aside the impugned motion decisions.⁶

20. Without any relevant evidence of bias or perceived bias, the Recusal Motion was bound to fail. It was, quite frankly, a waste of judicial resources and the time and resources of the parties.

21. Sunova’s submissions concerning issues of procedural fairness and natural justice relating to matters that are not matters of evidence⁷, were not clear nor explained and in any event not relevant to the issue of costs, submitted the Respondent. The Tribunal agrees and finds that these unsupported submissions do not assist Sunova in resisting this claim for costs.

22. The Tribunal finds that Sunova’s conduct in bringing the Recusal Motion was unreasonable and frivolous based on Rule 34.04(v) because Sunova not only failed to present any factual evidence to support the motion but continued to deal with issues arising out of the Production Motions which had already been decided.

23. Sunova’s Recusal Motion had no reasonable foundation in existing law or facts and was devoid of legal merit.

24. It was not serious or reasonably purposeful and served an improper motive, that is to collaterally attack the Production Motion decisions.

25. As required by the Rule, the Tribunal has also considered the seriousness of the conduct. The Tribunal finds that the conduct was serious. Unnecessarily bringing the Recusal Motion not only wasted judicial resources and the time and resources of the parties, but the ensuing judicial review application has also caused a two-year delay in the progress of these proceedings.

26. For these reasons the Tribunal finds that CLASS is entitled to its costs of the Recusal Motion.

27. In considering the request for substantial indemnity costs the Tribunal refers to the Ontario Court of Appeal decision in Laczko v. Alexander⁸ where Weiler J.A. stated as follows:

It is well established that costs should be awarded on a partial indemnity basis unless justice can only be done by complete or substantial indemnification: see Foulis v. Robinson (1978), 1978 CanLII 1307 (ON CA), 21 O.R. (2d) 769 (C.A.). As a general rule, justice will only require substantial indemnification where there has been “reprehensible, scandalous or outrageous conduct on the part of one of the parties”: Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3, at p. 134. Alexander’s unjustified failure to comply with his disclosure obligations was no doubt worthy of rebuke; “reprehensible,” “scandalous,” or “outrageous,” it was not. I would, therefore, decline to award costs on a substantial indemnity basis.

28. Although Sunova’s conduct may attract costs and be subject to rebuke, the Tribunal does not find that it reaches the threshold of reprehensible, scandalous or outrageous conduct. The Tribunal would therefore decline costs on a substantial indemnity basis.

Quantum of Costs

29. Sunova has not disputed the quantum of costs claimed. The Tribunal finds that the amount shown for partial indemnity costs in the amount of $4,368.02 is reasonable and proportionate.

Order

30. Sunova shall pay to CLAAS costs of the Recusal Motion fixed in the amount of $4,368.02 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: December 22, 2025

This document is also available in French. Please contact the Tribunal at 519-826-3433 or by email at AFRAAT@ontario.ca to request a copy in French.

Ce document est également disponible en français. Veuillez contacter le tribunal au 519 826-3433 ou par courriel à AFRAAT@ontario.ca pour demander une copie en français

Footnotes

1. 1Responding Costs Submissions of the Applicant, Paragraphs 5 and 6
2. 2Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, subsections 17.1(1) (2)
3. 3Chesterman Farm Equipment Inc. v. CNH Canada Ltd., 2016 ONSC 698, (Divisional Court), para. 187
4. 4Dell v. Zeifman Partners Inc., 2020 ONSC 3881, (Divisional Court), para.42
5. 5CFEI v. CNH, 2011 ONAFRAAT 10
6. 6Sunova Implement Ltd. v CLAAS of America Inc., 2023 ONAFRAAT 21, paragraph 20
7. 7Responding Costs Submissions of the Applicant, paragraph 6
8. 82012 ONCA 872, 2012 ONCA 0872