Henry Bos vs. Chicken Farmers of Ontario (CFO)

In the matter of Section 16 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 Henry Bos, Stevensville, Ontario, from a decision of the Chicken Farmers of Ontario declining his request for the revocation of Chicken Farmers of Ontario Regulation 2274-2009.

And in the matter of: A Pre-hearing Conference pursuant to Rule 24 of the Tribunal's Rules of Procedure, to be held for the purpose of considering:

1. whether a stay of Regulation 2274-2009 is in operation by virtue of an appeal to the Tribunal, and defining or limiting the scope of the stay if required;
2. the identification and simplification of issues;
3. the identification of facts or evidence that may be agreed upon;
4. the possibility of obtaining admissions which may facilitate the hearing;
5. the estimated duration of the hearing; and
6. any other matters which may assist in the just and most expeditious disposition of the appeal.
   

Before:
John O'Kane, Vice Chair

Appearances:
Henry Bos, appellant
Geoff Spurr, counsel for the respondent

Pre-Hearing Conference Decision of the Tribunal

Overview

The Chicken Farmers of Ontario (CFO) is a provincial commodity board authorized under the Farm Products Marketing Act, R.S.O. 1990, c.F.9 (FPMA) and regulations to regulate the chicken production and marketing industry in Ontario.

CFO is also authorized by the Chicken Farmers of Canada (CFC) to carry out certain functions on CFC's behalf. CFC is the federal regulator of chicken marketing in interprovincial and export trade under the federal Farm Products Agencies Act, S.C. Chapter F-4 (FPAA). Pursuant to a Federal-Provincial Agreement (FPA), CFC is also the coordinator of the comprehensive national chicken marketing scheme. The primary regulatory mechanism of the marketing scheme is quota. Farmers must have provincial and federal quota issued respectively by CFO and CFC in order to produce and market chicken.

Mr. Henry Bos is an Ontario chicken producer (farmer). Mr. Bos holds both provincial and federal quota and an interprovincial license.

On October 22nd, 2009, CFO passed regulation 2274-2009 (the Regulation), amending CFO regulation 2072-2005 entitled "Requirements for the Marketing of Chicken by Producers to Out-of-Province Processors". The essence of the Regulation is to impose a moratorium, beginning in Quota Period A96, on approving marketing contracts between Ontario chicken farmers and out of province chicken processors.

On the same date CFO passed the Regulation, it adopted, by Order, an amendment to CFO's "Quota Policy No. 170-2005" (the Policy). The essence of the Policy amendment is to suspend allotting production quota to farmers contracting to sell chicken to out of province processors.

It is apparent how the Regulation and the Policy are related.

On March 8th, 2010, Henry Bos wrote to the Tribunal appealing the Regulation.

Mr. Bos' appeal letter went on to refer to Tribunal Rule 33.07, in support of his suggestion that his appeal stayed the Regulation. Mr. Bos' appeal letter ended with the statement "I trust that, until the matter can be heard, farmers are free to contract with the out of province processor of their choice, as was the case prior to regulation 2274-2009." That statement referred to the status existing under regulation 2072-2005.

On March 10th, 2010, CFO's legal counsel wrote the Tribunal responding to those parts of Mr. Bos' appeal letter that addressed a stay and disputed that Mr. Bos' appeal resulted in a stay of the Regulation.

On March 18th, 2010, Mr. Bos wrote the Tribunal asking for a pre-hearing conference to have the stay issue determined.

Mr. Bos and CFO each filed written briefs with the Tribunal and made oral submissions during the pre-hearing conference on April 14th, 2010. Mr. Bos and CFO's legal counsel confirmed, in response to my question, that they did not wish to have a formal motion hearing but rather wished for me to determine the stay issue, based on the materials filed and the submissions made.

Mr. Bos advised during submissions that his appeal to the Tribunal is a broad policy based appeal. He argued that the Regulation interferes with the choice of all chicken producers to market their products in interprovincial trade. He confirmed that since CFO grandfathered his existing contractual commitments with a Quebec processor, an exemption from the Regulation pending his appeal is of no benefit to him, as he has no new or additional contractual commitments with chicken processors outside Ontario.

Mr. Bos also argued that I should, as part of my ruling, direct that CFO amend its Policy. While Mr. Bos did not appeal CFO's decision enacting that Policy, he argued that by virtue of the stay, the Policy could not stand where it is inconsistent with regulation and since his appeal stays the Regulation, the effective regulation is 2072-2005.

Under the Tribunal's Rules of Procedure, pre-hearing conferences are governed by Rule Rule 24.01 , which give me wide discretion to "consider any matter related to the appeal".

Legislative Context and the Tribunal's Rules of Practice

Section 15 of the Ministry of Agriculture, Food and Rural Affairs Act (MAFRAA) defines a "local board" as a local board constituted under the Farm Products Marketing Act (FPMA). CFO is such a local board.
Under section 16(2) of the MAFRAA, a person aggrieved by an "order, direction, policy, decision or regulation" made by a local board such as CFO may appeal in writing to the Tribunal, provided the aggrieved person first applies to CFO for a hearing and is unsuccessful or CFO delays dealing with the issue beyond sixty days. Complying with that requirement, Mr. Bos first took his concerns to CFO in February 2010. While CFO's counsel raised a question about just how directly aggrieved Mr. Bos was, for the purposes of this pre-hearing conference there was no serious dispute that Mr. Bos meets the qualification as a "person aggrieved".

Section 16(6) of the MAFRAA addresses the "effect" of an appeal to the Tribunal as follows:

Where, by virtue of subsection 25(1) of the Statutory Powers Procedure Act, an appeal under subsection (1) or (2) operates as a stay in the matter, the Tribunal may limit or define the scope of the stay.

Section 25(1) of the Statutory Powers Procedure Act (SPPA) provides:

An appeal from a decision of a tribunal to a court or other appellate body operates as a stay in the matter unless,

1. another Act or a regulation that applies to the proceeding expressly provides to the contrary; or
2. the tribunal or the court or other appellate body orders otherwise.

Section 1 of the SPPA defines "tribunal" to mean an entity that makes a "statutory power of decision" and the SPPA defines that latter phrase as:

"Statutory power of decision" means a power or right, conferred by or under a statute, to make a decision deciding or prescribing,

1. the legal rights, powers, privileges, immunities, duties or liabilities of any person or party, or
2. the eligibility of any person or party to receive, or to the continuation of, a benefit or licence, whether the person is legally entitled thereto or not;

It appears to me beyond doubt that CFO is a tribunal exercising a statutory power of decision as defined in the SPPA. Therefore, on a combined reading of section 25(1) of the SPPA and section 16(6) of the MAFRAA, Mr. Bos' appeal to the tribunal operates as a stay "of the matter" (my emphasis added). A combined reading of those same provisions satisfies me that in appropriate circumstances, the Tribunal can limit a stay or lift a stay completely.

Rule 33 of the Tribunal's Rules of Practice relate specifically to appeals under the FPMA and section 33.07 as set out below addresses a stay pending appeal.

Unless otherwise specified in the Act governing the matter under appeal, an appeal to the Tribunal operates as a stay in the matter under appeal subject to the right of the Tribunal to limit or define the scope of the stay.

In the context of the matter before me, the Act governing the appeal is the MAFRAA and it does specify the issue of a stay. Therefore, the stay provisions of the MAFRAA apply in this context and not Rule 33.07.

In this Context of Mr. Bos' Appeal, What is the "Matter"?

Mr. Bos' October 8th appeal letter gives no indication of the legal issues raised on appeal. That is not a criticism of Mr. Bos but a reflection that neither the MAFRAA nor the Tribunal's Rules of Practice contain any requirement to articulate the grounds for appeal.

In response to my question to identify the issues in his appeal, Mr. Bos explained there were two issues. The first was his challenge that the Regulation was not validly enacted. In other words, he challenged whether CFO has the authority to make the Regulation, given it affects farmers' rights to market their chicken in interprovincial trade. The second related to CFO's approach to quota allocation.

CFO's counsel suggested that based on Mr. Bos' appeal as framed in his March 8th appeal letter, the appeal was not broad enough to address both issues and certainly not the second issue.

In my view there is a lack of precision presently about the nature and scope of the "matter". Therefore, I explained to both parties that as part of my ruling I would require both parties to provide particulars in the form of issues statements so each party would know the case it must meet and so the Tribunal can have a satisfactory understanding of the subject matter of the proceeding.

I also alerted both parties to the reality that once they exchange issues statements, either party might seek a further pre-hearing conference to address issues arising from the issues statements, including the nature and scope of the appeal.

Both Mr. Bos and CFO referred me to the Divisional Court decision in Denby v. Ontario 2006 CanLII 63736, albeit for differing propositions.

The Divisional Court dealt, at paragraphs 31 to 41 of the decision, with the "principal" issue which was the stay of Regulation 08/03 enacted by the Dairy Farmers of Ontario (DFO). DFO is a body comparable to CFO. Each is a provincial regulator in a supply-managed commodity.

While CFO's counsel conceded the facts in Denby are substantially different, he argued the principles concerning a stay are apposite the present case.

Despite the different facts in Denby, the core issue was whether an appeal of a DFO regulation that required all milk to be marketed through DFO created a stay and rendered the regulation ineffective. The Divisional Court considered both section 25(1) of the SPPA and section 16(6) of the MAFRAA, concluding that "the stay in the matter" did not serve to suspend the force and effect of any provision of the regulation in issue. The Court went on to state at paragraph 40:

A "stay in the matter" may refer to a maintenance of a status quo in terms of the conduct or entitlement of a party. It does not, to repeat ourselves for emphasis, result in the automatic "suspension" of legislation validly enacted or to be enacted in the future. To suggest otherwise would be patently illogical.

Like the Divisional Court in Denby I find that it would be illogical that a regulation enacted as in this case by CFO would be automatically suspended when the regulation is under appeal.

I find the more reasonable interpretation of the stay provisions of the SPPA and the MAFRAA is that automatic stay "in the matter" operates to allow Mr. Bos to continue the "conduct or entitlement" of marketing chicken to out of province processors pending the outcome of his appeal, or further order of the Tribunal defining the scope of the stay. However, in this case Mr. Bos confirmed he does not seek that kind of exemption for himself so as to allow him to continue with the conduct of marketing chicken to an out of province processor, despite the Regulation.

Mr. Bos is arguing that, in effect, all Ontario chicken farmers should be exempt from the Regulation pending the outcome of his appeal. That result would be just what the Divisional Court concluded against in Denby. The "stay in the matter" does not result in the automatic suspension of validly enacted legislation. In my view, at the widest, the stay provisions operate as between the parties to the appeal. In this case, those parties are CFO and Henry Bos. The legal issues or "lis" between Henry Bos and CFO is what, in my view defines the "matter" (my emphasis added).

Limiting or Defining the Scope of the Stay

When Henry Bos appealed Regulation 2274-2009 to the Tribunal, that engaged the statutory stay provisions of the SPPA and the MAFRAA. However, the stay was not an automatic suspension of the Regulation, rather it was a "stay in the matter" as I have discussed above.

Given Mr. Bos' concession that an exemption from the Regulation would be of no benefit to him as he is not marketing to out of province processors, limiting or defining the scope of the stay becomes academic.

It is unnecessary in these circumstances and probably unwise for the Tribunal to engage in an academic exercise.

Order of the Tribunal

Therefore, the Tribunal Orders:

1. Mr. Bos will deliver (serve and file) a Statement of Issues by April 30th, 2010 particularizing the issues in his appeal and the grounds he intends to rely on in support of his appeal together with a list of any documentary evidence and a prospective witness list. The Statement of Issues will also contain Mr. Bos' estimate about the length of the appeal hearing.
2. CFO will deliver a Responding Statement of Issues by May 15th, 2010 particularizing CFO's response to each issue raised by Mr. Bos and the grounds CFO intends to rely on in response to the appeal with a list of documentary evidence and a prospective witness list. The Responding Statement of Issues will also contain CFO's estimate about the length of the appeal hearing.
3. Regulation 2274-2009 is not stayed pending the outcome of Mr. Bos' appeal to the Tribunal.

Dated at Brampton, Ontario this 5th day of May, 2010.