Agriculture, Food and Rural Affairs Appeal Tribunal

1 Stone Road West Guelph, Ontario N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: AFRAAT@ontario.ca

Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 Stone Road West Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email: AFRAAT@ontario.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL:

St. Brigid’s Dairy Ltd. cob as St. Brigid’s Creamery and St. Brigid’s Dairy v Dairy Farmers of Ontario (RE) [MOTION ORDER]

St. Brigid’s Dairy Ltd. cob as St. Brigid’s Creamery and St. Brigid’s Dairy v Dairy Farmers of Ontario (RE) [MOTION ORDER] 2025 ONAFRAAT 06

STATUTE:

Ministry of Agriculture, Food and Rural Affairs Act

HEARING:

April 25, 2025

DATE OF DECISION:

May 8, 2025

003stbrigids24

NEUTRAL CITATION:

2025 ONAFRAAT 06

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 (“Tribunal”) by St. Brigid’s Diary Ltd. cob as St. Brigid’s Creamery and St. Brigid’s Dairy regarding a decision of the Dairy Farmers of Ontario dated June 1, 2023, and a Reconsideration Decision dated September 6, 2023.

AND IN THE MATTER OF A Motion pursuant to Rule 30 of the Tribunal’s Rules of Procedure

BETWEEN:

St. Brigid’s Dairy Ltd. cob as St. Brigid’s Creamery and St. Brigid’s Dairy Appellant

– and –

Dairy Farmers of Ontario Respondent

Before: Glenn C. Walker, Chair, Judy Dirksen, Member, Betty Ann MacKinnon, Member

Parties Present: Bill van Nes, on behalf of the Appellant, St. Brigid’s Dairy Ltd. Catherine McCorquodale, Counsel for Appellant Arleen Minott, General Counsel – Dairy Farmers of Ontario Geoffrey P. Spurr, Counsel for Respondent

Represented by Catherine McCorquodale

Represented by Geoffrey P. Spurr

Heard: April 25, 2025, via Zoom

MOTION DECISION

Background

1. On September 28, 2023, St. Brigid’s Dairy Ltd. (“SBD”) appealed the Reconsideration Decision of the Dairy Farmers of Ontario (“DFO”) dated September 6, 2023¹ (“First Appeal”) to the Tribunal pursuant to Section 16 of the Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, c. M.16 (“MAFRAA”).

2. The basis of that appeal was that the DFO failed to apply their applicable policies and regulations to SBD which resulted in a financial loss. Specifically, the DFO did not provide adequate incentive days or other mechanisms available to it to be applied to SBD to ship milk at a volume commensurate with a signed processor commitment.²

3. The appeal was paused at the request of the appellant to permit the parties to pursue a settlement.

4. Negotiations between the parties ensued. On March 13, 2024, the appellant’s counsel wrote to the Tribunal advising that on the consent of the parties the appeal was being abandoned.³ The Tribunal issued a Notice of Withdrawal of the appeal the same day. No costs of the appeal were sought by DFO.

5. Negotiations between the parties continued. SBD provided a business plan and other data to DFO as requested. This material was reviewed by the Markets and Allocation Committee of DFO before being considered by the Board of Directors. On September 19, 2024, DFO responded to 4 specific requests made by SBD⁴.

6. The first request was in relation to incentive days. The second request was that DFO issue a “callout” to existing organic producers and whether such producers will be inclined to produce Grassfed Jersey A2 milk. The third request was that DFO reserve a special marked spot for the Organic Grassfed Jersey A2 niche in the 2024 New Entrant Quota Assistance Program (“NEQAP”). The fourth request was for 50 kgs of quota to be utilized by existing producers of Organic Grassfed Jersey A2 milk immediately.

7. DFO did not grant these requests. SBD has not requested a reconsideration of this decision by the DFO board pursuant to Section 17 of the MAFRAA.

8. Subsequently, SBD requested that the Tribunal schedule a Pre-Hearing Conference stating that it wished to revive the appeal which it had abandoned on March 13, 2024. SBD was advised by the Tribunal that the file in this appeal was closed after SBD abandoned it and could not be revived but that a new appeal could be commenced subject to the provisions of Subsection 16(4) of the MAFRAA.

9. On December 31, 2024, SBD filed a new appeal with the Tribunal. The new Notice of Appeal includes an appeal of the Reconsideration Decision of September 6, 2023 concerning additional incentive days. The appeal was broadened and additional remedies, not requested in the previous appeal, were included. They are:

I. a request that the total over quota milk produced by SBD be paid as within quota in the months of May, June and July, 2023.

II. A request that if milk commitments of a niche or overlapping niche cannot be presently filled by existing producer(s), incentive days ought to be issued.

III. A request that where commitments/Orders of overlapping niche of Organic Grassfed Jersey A2 milk cannot be presently filled by existing producer(s) incentive days be issue retroactively and in the future.

IV. A request that alongside incentive days DFO continue to use methods as tools to increase production for niches such as callouts to existing producers and prioritize entry into the NEQAP.

DFO’s Motion

10. DFO has brought a motion seeking the dismissal of this appeal on the following grounds:

I. In accordance with subsection 16(4) of the MAFRAA on the basis that the appeal relates to a decision of which the Appellant has had knowledge for more than one year before filing its Notice of Appeal on December 31, 2024;

II. Or, in the alternative, in accordance with subsection 16(4)(b) of the MAFRAA on the basis that the appeal is frivolous or vexatious or is not made in good faith;

III. Or, in the further alternative, in accordance with Rule 33.01 of the Rules of Procedure for the Tribunal on the basis that the statutory requirements for bringing the proceeding have not been met;

IV. Or, in the further alternative, in accordance with subsection 16(5) of the MAFRAA on the basis that the Appellant has not first applied to the marketing board for a hearing in relation to the purported subject matter of the appeal as described in the December 31, 2024 Notice of Appeal;

V. Or, in the further alternative, in accordance with subsection 16(11) of the MAFRAA on the basis that the relief sought relates to incentive days for the year 2023 and is therefore academic and/or the relief sought as financial losses is of the character of being monetary compensation or damages which is not within the authority of the Tribunal to grant.

Analysis and Discussion

11. There are four separate heads of relief contained in the Appellants’ Notice of Appeal. The first head relates to a request for 2023 incentive days. The remaining heads of relief are requests to DFO to make changes to its policy and/or regulations.

12. The Tribunal will deal with the first head of relief (“2023 Incentive Days”) separately from the balance of relief claimed in the Notice of Appeal.

2023 Incentive Days

13. DFO submits that there are three reasons why the Tribunal should refuse to hear the appeal on this issue or to dismiss the appeal with respect to this head of relief. They are:

i. the Appellant has had knowledge for more than one year of the decision appealed (Subsection 16(4) MAFRAA)

ii. this appeal is frivolous, vexatious or not made in good faith (Subsection 16(4)(b) MAFRAA)

iii. the relief sought is academic and/or is in the character of compensation or damages and is not within the jurisdiction of the Tribunal (Subsection 16(11) MAFRAA)

One Year Period

14. Subsection 16(4) of the MAFRAA states as follows,

The Tribunal may refuse to hear the appeal, or after a hearing has commenced, may refuse to continue the hearing or make a decision if it relates to any order, direction, policy, decision or regulation of which the appellant has had knowledge for more that one year before the notice is filed under subsection (2.1) or, if in its opinion,

(a) The subject-matter of the appeal is trivial;

(b) The appeal is frivolous or vexatious or is not made in good faith; or

(c) The appellant has not a sufficient interest in the subject-matter of the appeal.

15. Although the First Appeal brought by the Appellant was timely, it is obvious that this appeal with respect to the additional incentive days was late. The decision of the Board was dated September 6, 2023 and the Notice of Appeal was filed on December 31, 2024.

16. Both parties conceded that the First Appeal, having been abandoned and withdrawn, could not be revived and did not affect the running of the one year period.

17. That might be the end of the issue, except that the word “may” connotes that the Tribunal can exercise its discretion and not refuse to hear the appeal.

18. SBD submits that DFO failed to negotiate in good faith and induced SBD to withdraw the First Appeal in March 2024, with the intention of obstructing SBD’s negotiations for increased incentive days.⁵

19. SBD further submits that the appeal to the Tribunal (First Appeal) was negatively impacting resolution, so SBD withdrew the appeal initiated in 2023.⁶

20. DFO responds that it was negotiating in good faith and that its’ only commitment was to consider the materials provided by SBD fairly, which it did.

21. The good faith period that is relevant to this argument is the period up to the withdrawal of the first appeal.

22. After reviewing the submissions and affidavit material provided by the parties, I do not detect the slightest lack of good faith on the part of DFO. The Appellant cites the lack of progress and procrastination on the part of DFO. That, in itself, is not an indication of bad faith. DFO received, considered, and rejected SBD’s requests. The fact that SBD did not like the results of the negotiations is not proof of bad faith.

23. The Tribunal delayed scheduling a Pre-Hearing Conference in the First Appeal for over 5 months to allow parties to come to a resolution. Finally on March 13, 2024, SBD abandoned its appeal concerning 2023 incentive days. The appeal was abandoned unconditionally with the consent of the parties so long as no costs were sought by DFO.

24. After several months delay the Tribunal had sought an update from the parties. SBD could have proceeded with the appeal process all the time continuing with negotiations with DFO. SBD had a choice, either to continue with the appeal or withdraw it. That was an informed choice as SBD was represented by counsel (not the present counsel on this motion) at that time.

25. Milk sales in Ontario operate on a quota system managed by DFO. Subject to over-market and under-market credits, dairy producers must sell their milk to processors based on their quota. However, in certain circumstances, DFO may authorise a producer to sell additional milk over and above their quota without penalty. These are called incentive days.

26. In the First Appeal SBD sought 61 incentive days in 2023. It was granted 3 incentive days in the decision appealed from. I accept the assertion by DFO that after December 31, 2023, no incentive days could be granted for 2023. That fact was not disputed by the Appellant.

27. The fact that by March 2024 the Appellant was not going to be able to acquire 2023 incentive days may have influenced its decision to abandon the First Appeal.

28. In the present appeal SBD is asking that “the total over quota milk produced by St. Brigid’s Dairy be paid as within quota in the months of May, June, July, 2023”.

29. This is just another way of asking DFO to pay SBD compensation for its failure to grant it incentive days in those months in its Reconsideration Decision, or as DFO has put it, SBD seeking compensation or payment for financial losses incurred when milk was deliberately marketed over quota and without coverage through incentive days.

30. The Tribunal has found in the past that there is nothing in the MAFRAA or the Milk Act that gives the Tribunal jurisdiction to award monetary damages or compensation. As a creature of statute, the Tribunal has no inherent jurisdiction.⁷

31. The Tribunal is said to stand in the shoes of the DFO board and it is authorized to take such action that the board is authorized to take under the Farm Products Marketing Act or the Milk Act and as the Tribunal considers proper.⁸

32. Although the Tribunal was not provided with any financial accounting evidence from DFO, the Tribunal finds that it would be unlikely that the Appellant would succeed in having the Tribunal order DFO to pay compensation in 2025 for milk sold in 2023.

33. Subsection 16(4) of the MAFRAA does not contain any criteria to guide the Tribunal in exercising its discretion. The Tribunal concludes that the legislature omitted specific criteria in order to leave the Tribunal with as much flexibility as possible to determine in the unique circumstances of each case whether it should hear an appeal.⁹

34. The Tribunal concludes that the following factors combine to mitigate against the Tribunal exercising its discretion to hear the 2023 Incentive Days portion of the appeal:

I. The fact that SBD unconditionally abandoned the First Appeal which was basically for the same relief

II. The fact that the Tribunal finds there was no bad faith on the part of DFO which induced SBD to abandon that appeal

III. The fact that SBD was represented by counsel when it abandoned that appeal, and

IV. The fact that the Tribunal finds that the appeal is frivolous as it lacks any realistic opportunity for success and is bound to fail.

Frivolous or in Bad Faith

35. The Tribunal may also refuse to hear an appeal that it considers frivolous or made in bad faith.¹⁰

36. The Tribunal does not find that SBD has brought the present appeal in bad faith, but it does find that the present 2023 Incentive Days appeal is frivolous.

37. A frivolous claim is one that lacks legal basis or legal merit.¹¹

38. As outlined above, there is no legal merit to the Appellant’s claim for compensation for financial loss of 2023 Incentive Days.

39. For these reasons, the Tribunal would also dismiss this issue without a hearing pursuant to Rule 33.01

Conclusion with Respect to the 2023 Incentive Days Appeal

40. For these reasons, the Tribunal refuses to hear the 2023 Incentive Days portion of the Notice of Appeal, and, in the alternative would dismiss the 2023 Incentive Days Appeal without a hearing as being frivolous for the reasons given above.

Balance of Claims in the Notice of Appeal

41. The balance of the claims in the Notice of Appeal can be dealt with together.

42. DFO argues that these proposed appeals are not properly before the Tribunal as SBD has not complied with Subsection 16(5) of the MAFRAA.

43. Subsection 16(5) provides as follows:

No Appeal may be taken from an order, direction, policy, decision or regulation of a local board or a marketing board unless,

(a) The appellant has first applied to the local board or marketing board for a hearing and the local board or marketing board has refused to grant, in whole or in part, the relief requested by the appellant or has not decided the matter within sixty days of the application for a hearing; or

(b) The appellant and the local board or marketing board have waived their respective rights under clause (a) in writing.

44. These claims arise from requests made to DFO in 2024. DFO did not accept these requests and responded on September 19, 2024¹². SBD now seeks to appeal these issues to the Tribunal.

45. It is common ground that SBD has not requested a Reconsideration Decision by DFO on these issues and that neither party has waived its rights to a hearing.

46. SBD attempted to make an argument that the correspondence between SBD making the requests and DFO’s negative response constituted a hearing withing the meaning of Subsection 16(5). However, during submissions counsel for SBD conceded that no hearing before the DFO board had taken place.

47. Rule 33.01 of the Tribunals’ Rules of Procedure provides that the Tribunal may dismiss an appeal without a hearing if in the Tribunals opinion some aspect of the statutory requirements for bringing the proceeding has not been met.

48. This Rule provides the grounds for the Tribunal to dismiss the remaining claims as SBD has failed to comply with Subsection 16(5) of the MAFRAA before bringing these appeals to the Tribunal.

Conclusion with respect to the Remaining Claims

49. The remaining claims are dismissed without a hearing pursuant to Rule 33.01 for the above reasons.

Summary and Conclusion

50. The Tribunal refuses to hear the first request in the current appeal (2023 Incentive Days) and, in the alternative, on its own motion dismisses this request without a hearing.

51. The Tribunal dismisses the remaining requests in the Notice of Appeal dated December 31, 2024 without a hearing.

DATED at Chatham, Ontario this 8th day of May, 2025.

Footnotes

1. 1Letter dated September 6, 2023 from DFO to Robert Scriven. Exhibit C to the Affidavit of Sue Segato sworn March 14, 2025
2. 2Letter dated September 28, 2023 from Robert Scriven to the Tribunal. Exhibit D to the affidavit of Sue Segato sworn March 14, 2025
3. 3Letter dated March 13, 2024 from Robert Scriven to the Tribunal. Exhibit G to the affidavit of Sue Segato sworn March 14, 2025
4. 4Letter dated September 19, 2024 from Kristen Benke, Chief Business Officer for DFO to SBD. Exhibit G to the affidavit of William van Nes sworn March 26, 2025
5. 5Written submissions of the Appellant, paragraph 2
6. 6Idem, paragraph 22
7. 7R. Van Loon and Sandy Lane Farms Inc. v. Dairy Farmers of Ontario, 2024 ONAFRAAT 2; Jeffrey French v. DFO, 2017 ONAFRAAT 21
8. 8MAFRAA Subsection 16(11)
9. 9Henry Bos v. Chicken Farmers of Ontario, 2010 ONAFRAAT 38
10. 10Subsection 16(4)(b) MAFRAA, Tribunal Rules of Procedure Rule 33.01(a)
11. 11Currie v. Halton Regional Police Services Board, 2003 CanLII 7815 (ONCA)
12. 12Letter dated September 19, 2024 from Kristen Benke, Chief Business Officer for DFO to SBD. Exhibit G to the affidavit of William van Nes sworn March 26, 2025