Normal Farm Practices Protection Board 1 Stone Road West, 2nd Floor Guelph, Ontario N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: NFPPB@ontario.ca
Commission de protection des pratiques agricoles normales 1 Stone Road West, 2e étage Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Courriel: NFPPB@ontario.ca
Board File No. 2015-03
IN THE MATTER OF an application to the Board under Section 5 of the Farming and Food Production Protection Act, 1998
B E T W E E N:
Tim Smith and Debby Smith Co-Applicants
and
Allan Lovelace and Lynn Livingston Co-Applicants
and
Les Carrier and Mary Jane Prickaerts Co-Applicants
and
Peter Hollett and Glenda O’Reilly Co-Applicants
and
Robert Smith and Sandy Smith Respondents
REPRESENTATION:
Trudie E. Robertson (Paralegal), Counsel for the Applicants Gene P. Chiarello, Counsel for the Respondents
BEFORE:
Glenn C. Walker, Vice-Chair Jane Sadler Richards Robert Brander
DECISION
Claim for Costs by the Respondents
The Respondents, Robert Smith and Sandy Smith, have made a claim for costs in these proceedings against the Applicants. The Board requested that the parties serve and file written submissions with respect to the claim for costs.
The Respondents’ claim for costs is made on a substantial indemnity scale in the amount of $47,381.41. A breakdown of those costs is set out at Tab 12 of the Respondents’ submissions and relates to costs incurred by the Respondents after the hearing adjourned on March 30, 2016. The breakdown consists of the following:
Total legal fees - $31,891.00
Disbursements - $2,796.09
Expert witness and report (Hugh Fraser) (including HST) - $8,185.00
Total tax/interest - $4,509.32
Total - $47,381.41
No supporting material was provided by the Respondents, such as a breakdown of the disbursements or a copy of the invoice from the expert.
The grounds for the claim for costs can basically be broken down under five headings:
That the Applicants failed to call evidence to support their allegations;
That the Applicants continued to deal with issues, ask questions or take steps that the Board had determined to be improper;
That the Applicants presented false or misleading evidence;
That the Applicants refused to negotiate a reasonable settlement and
That the Applicants acted disrespectfully or maligned the character of Robert Smith.
Law on Costs
Section 17.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, sets out the two statutory prerequisites to the Board’s jurisdiction to award costs. That section provides:
“Costs
17.1(1) Subject to subsection (2), a tribunal may, in the circumstances set out in rules made under subsection (4), order a party to pay all or part of another party’s costs in a proceeding.
Exception
(2) A tribunal shall not make an order to pay costs under this subsection unless,
a) the conduct or course of conduct of a party has been unreasonable, frivolous or vexatious or a party has acted in bad faith, and
b) the tribunal has made rules under subsection (4).
Amount of Costs
(3) The amount of the costs ordered under this section shall be determined in accordance with the rules made under subsection (4).
Rules
(4) A tribunal may make rules with respect to,
a) the ordering of costs;
b) the circumstances in which costs may be ordered; and
c) the amount of costs or the manner in which the amount of costs is to be determined.”
The Board has made rules reflecting section 17.1 of the Statutory Powers Procedure Act and the rules appear as Section 66 of the Normal Farm Practices Protection Board – Rules of Practice and Procedure. Subsection 66(1) of the Rules provides that where a party believes that another party has acted clearly unreasonably, frivolously, or in a vexatious manner, or in bad faith, considering all of the circumstances, they may ask for an award of costs.
In Subsection 66(8) of the Rules, the Board has enumerated some of the circumstances in which costs may be ordered as permitted by subsection 17.1(4) of the Statutory Powers Procedure Act.
Subsection 66(8) states as follows:
“Clearly unreasonable, frivolous, vexatious, or bad faith conduct can include, but is not limited to:
(a) failing to attend a hearing event or to send a representative when properly given notice, without contacting the Board;
(b) failing to give notice or adequate explanation or a lack of cooperation during pre-hearing proceedings, changing a position without notice, or introducing an issue or evidence not previously mentioned;
(c) failing to act in a timely manner or to comply with a procedural order or direction of the Board where the result causes undue prejudice or delay;
(d) conduct necessitating unnecessary adjournments or delays or failing to prepare adequately for hearing events;
(e) failing to present evidence, continuing to deal with issues, asking questions or taking steps that the Board has determined to be improper;
(f) failing to make reasonable efforts to combine submissions with parties of similar interest;
(g) acting disrespectively [sic] or maligning the character of another party; and
(h) knowingly presenting false or misleading evidence.”
Subsection 66(9) also provides that:
“The Board will consider the seriousness of the misconduct. If a party requesting costs has also conducted itself in an unreasonable manner, the Board may decide to reduce the amount awarded; the quantum of costs awarded shall be in the discretion of the Board. In determining the quantum, the Board may take into consideration the concept of partial and substantial indemnity, and the Rules and Regulations regarding the quantum of costs awarded in the Ontario Superior Court of Justice.”
The Applicants in their submissions made reference to the Board decision with respect to costs in the matter of Dubois v. Burkhardt (No. 1) 2010 ONNFPPB 55. In the Dubois decision, the Board stated as follows:
“The decision in this matter is intended to establish a Board practice that costs are not awarded lightly nor are they awarded routinely. Awards of costs will be rare. Potential parties and the public should not be fearful of participating in Board proceedings. Costs should never be used as a threat or a reason to dissuade public participation. The Board has the statutory jurisdiction to award costs for the purpose of controlling its process. Costs before the Board are not intended to follow “the cause” nor are they intended in any way to indemnify a successful party. Each application for costs will be decided on its own merit, based on an assessment of conduct.”
The Board is also mindful of the recent decision of the Superior Court of Justice, Divisional Court in the matter of Chesterman Farm Equipment Inc. v. CNH Canada Ltd., 2016 ONSC 698. In that decision, the Court was considering Rule 28.04 of the Rules of Procedure of the Agriculture, Food and Rural Affairs Appeal Tribunal which is virtually identical to Rule 66 of the Board’s Rules. The Court found that it was apparent from the list of circumstances under Rule 28.04 (the Board’s Rule 66(8)) that the behavior contemplated is conduct within the hearing itself, not conduct in relation to the initial dispute between the parties. The decision also found that proportionality is always a relevant factor in determining costs and that failure to take that into account is an error of law.
Entitlement to Costs
- Failure to Call Evidence to Support Allegations.
In support of their request for costs under this heading, the Respondents appear to be relying upon the fact that the Applicants alleged that Mr. Smith’s use of the bird bangers was not a normal farm practice, that he did not follow best management practices and that there was no significant population of birds in the area to warrant the use of bird bangers. The Board disagrees that the Applicants took the position that the use of bird bangers is not a normal farm practice. In her opening statement, Ms. Robertson, on behalf of the Applicants, stated: “The Applicants will show that although the use of bird bangers is a normal farm practice, it is the way in which the Respondent, Robert Smith, uses these bird bangers that is not normal.” The finding of when the use of bird bangers is or is not a normal farm practice depends upon the circumstances in each case. In its decision, the Board found that the manner in which Mr. Smith was using the bird bangers was not a normal farm practice specifically due to the use of the bird bangers in May of both 2014 and 2015 and also in June, 2015.
With respect to bird pressure, Ms. Robertson, in her opening statement, stated: “The Applicants’ evidence will be that there is no real need for the bird bangers to be used, due to a documented marked decrease in the bird population as well as a decrease in wildlife in the area.” The Applicants did not call any evidence other than their own self-serving testimony as to their own observation of birds in the area and some articles on the subject, obtained from the internet, and of a general nature not specific to this site. In any event, the issue before the Board was not whether or not Mr. Smith should have been using bird bangers but whether or not he was using them in the appropriate manner in accordance with best management practices in order to qualify as a normal farm practice.
- Continued with Behavior Determined by the Board to be Improper.
Although not entirely clear from the Respondents’ submissions, this heading of grounds for a costs award appears to be based upon Counsel for the Applicants asking the female Applicants if they were afraid of Robert Smith. When that question was put to Glenda O’Reilly, there was an objection from Mr. Smith which was upheld. The subsequent discussion concerning the relevance of that question and any answer that Ms. O’Reilly gave was struck from the record. Counsel then put that same question to the female Applicant Debby Smith. Robert Smith objected. The question was not answered and Ms. Robertson moved on to her next question. It does not appear that this question was put to the witness, Lynn Livingston but the same question was asked of the final female Applicant, namely Mary Jane Prickaerts. It was as a result of this question that Robert Smith requested an adjournment so that he could obtain legal counsel and the hearing adjourned.
- Applicants Knowingly Presenting False or Misleading Evidence.
Again, it is not clear from the Respondents’ submissions what evidence the Applicants knowingly or intentionally presented to the Board which was false or misleading. The Board can only surmise that the Respondents are referring to the exchange of emails/letters which took place during the hiatus and which were related to the alleged conduct of Robert Smith and the Interim Order of the Board. If this is in fact the case, such correspondence did not form part of the record of the hearing and cannot be considered evidence.
- Failure to Negotiate a Reasonable Settlement.
As a grounds for the request of a costs award, the Respondents rely upon the fact that the Applicants failed to settle the dispute on two separate occasions. Firstly, by rejecting an offer during the mediation process with Peter Doris from the Ministry and secondly by rejecting an offer of settlement made during the hiatus and prior to the resumption of the hearing. The Applicants allege that the Respondents “beat their own offers to settle by obtaining a greater result at the hearing than they were willing to compromise on in a settlement agreement”. The Applicants counter by stating that, although Mr. Smith may now have more hours to operate the bird bangers than was required by the settlement offers, he is now required to monitor the bird bangers daily and keep a daily log of their operation and settings.
A tribunal cannot order a party to pay the costs of a proceeding without express statutory authority. Nothing in either Section 17.1 of the Statutory Powers Procedure Act or Rule 66 of the Board’s Rules of Practice and Procedure would authorize an award of costs solely on the basis of the failure to accept a reasonable offer to settle. An order for costs based on these grounds would be an error in jurisdiction.
- Acting Disrespectfully or Maligning the Character of Robert Smith.
The Respondents argue that the Applicants maligned the character of Robert Smith by bringing up the issue of a previous unrelated criminal conviction and asking the female Applicants if they were afraid of Robert Smith.
In her opening statement, Counsel for the Applicants stated: “You will hear evidence regarding how the Respondent, Robert Smith, has used his bird bangers in a malicious, vindictive and irresponsible way, which has adversely affected each and every one of the Applicants, both emotionally and financially”. During the Applicants’ evidence, Counsel for the Applicants repeatedly attempted to vilify Robert Smith. This came to a head on March 30, 2016 when Mr. Smith objected to the question to Mary Jane Prickaerts as to whether or not she was afraid of him. At that point, Ms. Robertson stated: “Again, panel members, this is going to the character of the Respondent and I think that how he is viewed by the Applicants and perceived, how he is perceived by the general community in the area, I think is very important and very relevant. So I would, you know, ask for your indulgence in that question.” Counsel was permitted to continue with this line of questioning after she advised the Board that she intended, in final submissions, to use this evidence to show that Robert Smith was irresponsible and should not be allowed to use bird bangers at all. In the result, that argument was not accepted by the Board.
During the cross-examination of Robert Smith by Counsel for the Applicants, she questioned him on a previous criminal conviction totally unrelated to the subject matter of the hearing and made a serious allegation that the criminal conviction was of a nature that is morally reprehensible.
Conclusion as to Entitlement to Costs
The Board has established a high bar to meet in order to establish grounds for a cost order after a hearing. The Board finds that grounds 1, 2, 3 and 4 outlined above are either irrelevant to an order of costs or do not amount to being clearly unreasonable, frivolous, vexatious or bad faith conduct. This type of conduct, and worse, has never attracted costs consequences in previous costs decisions.
However, the Board finds that the conduct of the Applicants and their representative in attempting to malign or vilify Robert Smith is significantly different. This was in bad faith and vexatious conduct which should be sanctioned. Notwithstanding that the Board allowed some evidence of this nature to become part of the record, it was the Applicants and their representative who insisted on going down this road. It was totally unreasonable for the Applicants and their representative to take the position that Robert Smith would not abide by an Order of this Board. No previous disregard for court or tribunal orders was established. The Board therefore determines that the Respondents are entitled to costs from the Applicants on the basis of this conduct.
Quantum of Costs
The Respondents seek costs on a substantial indemnity scale in the amount of $47,381.41. No details of the disbursements paid have been provided and no award will be made for disbursements. The Respondents should have expected that they would be required to engage the services of an expert for the hearing and the claim for the cost of engaging an expert are disallowed.
The long delay in completing the hearing can be laid at the feet of the Applicants and caused by the line of questioning attacking Robert Smith’s character. As a result, the Respondents were denied the use of bird bangers for the 2016 growing season and suffered crop loss from bird predation, which might have been diminished by the use of bird bangers. It is true that Mr. Smith did offer not to use the bird bangers that crop year; however, this was done to support his request for the adjournment caused by the attack on his character.
The Board must take into account the proportionality of the impugned conduct with the amount of costs awarded. In doing so, it recognizes that, as a result of the line of questioning undertaken by Counsel for the Applicants an adjournment was required by the Respondents in order to obtain legal representation which resulted in a significant delay in completing the hearing. Once duly represented, however, the hearing was completed expeditiously. There is no doubt that the Respondents have suffered some financial loss as a result. The Board considers that the misguided attempt to malign the character of Robert Smith was unnecessary and spiteful.
Order
The Board therefore orders the Applicants, on a joint and several basis, to pay to the Respondents costs of the hearing fixed in the amount of $8,000.00, inclusive of HST, together with post-judgment interest at the rate of 2% per annum from today’s date.
Date: April 3rd, 2017