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Ontario Quota Rights Organization vs. Dairy Farmers of Ontario (Preliminary Motions)
In the matter of the Ministry of Agriculture, Food and Rural Affairs Act.And in the matter of: an Appeal to the Agriculture, Food and Rural Affairs
Appeal Tribunal (Tribunal) by the Ontario Quota Rights Organization, Jean-Marie
Menard, of Embrun, Ontario, Jacques Lamarche, of Lefaivre, Ontario, and
Doyle Harrigan, of Curran, Ontario (OQRO, et al.), of a decision of the
Dairy Farmers of Ontario (DFO), to deny their request for reconsideration
of the DFO quota policy of March 2009; And in the matter of: the hearing of the motion by DFO to have the stay lifted or defined by the Tribunal, pursuant to Rule 25 of the Tribunal's Rules of Procedure; Before: Appearances: MOTION DECISION OF THE TRIBUNALThis is a decision in a motion brought by the Dairy Farmers of Ontario (DFO) within an appeal brought by the Ontario Quota Rights Organization, an unincorporated association (OQRO), and by three individuals on the 27th day of July 2009. The Issues:The DFO decided to establish a new set of policies regarding milk quota pricing and the quota exchange on March 27, 2009 (the New Policies). OQRO and three individuals appealed the New Policies to this Tribunal in their entirety. The New Policies were to be effective in time for the August quota exchange.
The DFO brings this motion pursuant to subsection 16(6) of the MAFRA
Act seeking an order for this Tribunal to: The OQRO's position is that the stay should not be lifted or amended in any way. There were many jurisdictional questions and legal issues argued by the
DFO and OQRO, including the scope of the appeal and scope of application
of the stay, the test to be applied to the exercise of discretion regarding
granting or denying the lifting or adjustment of the scope of a stay,
the applicable case law and of course the application of the case law
to the particulars of this situation. I have divided the decision according
to these issues, and summarize my findings and the resulting order at
the end of these reasons. The Findings:1. Does the appeal of the New Policies create an automatic statutory
stay? Since the appeals are in regard to policies, and since the definition of "person" in the MAFRA Act includes an unincorporated association, this subsection applies to the subject appeals, and the pre-conditions for the appeals proceeding to a hearing have been met. It does not follow, however, that every appeal under the MAFRA Act creates an automatic stay. Subsection 25(1) of the SPPA commences as follows: 25(1): "An appeal from a decision of a tribunal to a court or other appellate body operates as a stay in the matter ." Therefore, a stay is created and is automatic if the DFO fits the definition of "tribunal" under the SPPA and has made a "statutory power of decision". If not, there is no automatic stay. In the definition section of the SPPA: "statutory power of decision" means a power or right, conferred
by or under a statute, to make a decision deciding or prescribing, and "tribunal" means one or more persons, whether or not incorporated and however described, upon which a statutory power of decision is conferred by or under a statute; ("tribunal")
In my view the DFO meets these definitions in the current situation in that the DFO operates to make decisions through the exercise of power conferred under a statute, the Milk Act, and in that the policy decisions with regard to the quota exchange decide or prescribe the powers and privileges of producers operating within the statutory scheme of supply managed milk marketing. Thus, the appeal in my view triggers the statutory stay set out in the SPPA. 2. What is the scope of discretion of the Tribunal with regard to the
statutory stay? 25(1): An appeal from a decision of a tribunal to a court or other appellate
body operates as a stay in the matter unless, In addition, subsection 16(6) of the MAFRA Act reads: (6) "Where, by virtue of subsection 25(1) of the Statutory Powers Procedure Act, an appeal under subsection (1) . . . operates as a stay in the matter, the Tribunal may limit or define the scope of the stay." Therefore, there are two specific subsections that affect the Tribunal's jurisdiction to order the stay lifted, amended or limited. My reading of SPPA subsection 25(1)(b) is that it is not limited in scope, but provides discretion to entirely remove the stay, while SPPA 25(1)(a) and MAFRA 16(6) clarify that an alternative decision to its complete removal, that is, either limiting or defining its scope, is also possible. There are no criteria in the legislation itself for lifting the stay, but it was common ground in the argument of the parties that the exercise of discretion can encompass the entire range of possible amendments to the scope of the stay, including its complete removal. I agree with this proposition. From now on in these reasons, the term "lifting" the stay will refer to any change in stay, regardless of the scope of the change. In addition, the Tribunal has the power on an appeal pursuant to subsection 16(11) of the MAFRA Act to: " . . direct the Commission, the local board, the marketing board or the Director, as the case may be, to take such action as it or he or she is authorized to take under the Farm Products Marketing Act or the Milk Act and as the Tribunal considers proper, and for this purpose the Tribunal may substitute its opinion for that of the Commission, the local board, the marketing board or the Director." This general supervisory power of the Tribunal on an appeal also in my view provides the Tribunal with the power to fashion the appropriate remedy during the course of proceedings to suit the varied circumstances under which it is asked by appellants and boards to act. 3. Are the individual appellants subject to orders regarding the stay? In the pre-hearing conference on July 20th, after submissions by the parties, I made an order regarding the scope of the relief sought and the interests of the appellants. This order confirmed the information given by Mr. Good, counsel to the OQRO, that all OQRO members who were producers would be subject to the orders arising from the hearing, that those members of OQRO who were not producers were not affected by the policies under appeal, that the individual appellants (who Mr. Good also represents) had identical interests to the OQRO as a whole, and that therefore there would be one case presented on behalf of all of the appellants. The individual appellants are members of the OQRO. Any order affecting the OQRO with regard to the stay will have to be applied to individuals rather than to the OQRO as an organization; because the individual appellants are in any event members of the OQRO, the individual appellants as well as all other OQRO members who are milk producers will be subject to any findings or orders with respect to the stay. 4. What test should be applied to lifting or limiting the scope of the
stay? First, the statutory scheme codifies to some extent the general discretion that a tribunal or appellate body possesses to deal with the consequences of a previous adjudicator's ruling. The SPPA, a statute that provides a general structure for a significant number of tribunals, is necessarily broad in scope. The MAFRA Act, while not so broad as the SPPA, also deals with a variety of potential situations and a number of potential types of appeal, from specific administrative decisions in the nature of penalties or sanctions against individuals to more broad policy questions like the subject appeals. It too, is therefore required to be somewhat general in describing the powers of the Tribunal. Finally, the MAFRA Act establishes this Tribunal as a supervisory body, able to substitute its opinion for that of the DFO, and therefore the Tribunal has broad scope to ensure that the decision it makes is just in relation to the parties and the situation as a whole. The Tribunal must therefore be guided by similar or analogous situations and case law. I was referred for the principal statement of the test for lifting a stay to the case of RJR-MacDonald Inc. v. Canada (Attorney General) [1994] 1 S.C.R. 311 (MacDonald). The test is the same for a stay as an injunction, and for lifting a stay the distinction relevant to this appeal is that because the stay is automatically put in place by virtue of the statute, the DFO bears the onus of demonstrating that the stay should be lifted. There are three steps to the test. The first step asks: A: Is there a serious issue to be tried? The court in MacDonald indicates that the "threshold is a low one."
On a preliminary review of the merits of the appeal, I find that there
is a serious issue. The DFO is mandated to administer and direct the marketing
of milk in a complex regulatory environment. The DFO is required to consider
the interests of over 4000 milk producers who operate in a supply management
system that creates many challenges for those involved. One of the most
significant issues the DFO deals with is the management of quota issues
and the price of quota. Changes to quota systems create significant impacts
and have serious implications for those who operate in the system, especially
at the moment when the rules change. It is therefore necessary to go on to the second and third steps of the
test. The second step asks: While a direct analogy from Charter litigation such as RJR MacDonald or the private law cases that MacDonald cites is not necessarily appropriate, the test is clearly set out in MacDonald at paragraph 58: "At this stage the only issue to be decided is whether the refusal to grant relief could so adversely affect the applicants' own interests that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the interlocutory application." In addition, at paragraph 71, the court states that: "In the case of a public authority, the onus of demonstrating irreparable harm to the public interest is less than that of a private applicant. . . . The test will nearly always be satisfied simply upon proof that the authority is charged with the duty of promoting or protecting the public interest and upon some indication that the impugned legislation, regulation, or activity was undertaken pursuant to that responsibility. Once these minimal requirements have been met, the court should in most cases assume that irreparable harm to the public interest would result from the restraint of that action." In the current situation, the OQRO argues that the DFO does not represent the wider public interest, but in fact represents the narrow interest of milk producers, which may be contrary to the wider public interest. I disagree with this proposition. No one party in any situation can represent all of the public interest, and any legislative scheme is likely to have impacts that some members of the public would from their own perspectives consider negative. The Milk Act under which the DFO is delegated responsibilities and pursuant to which the New Policies were enacted is a public statute that expresses the public interest in an effectively managed milk marketing system; it seeks to ensure a proper return to those who are licensed to engage in supply managed milk marketing without creating an undue burden on the rest of the community or abusing their privileges. These are public goals and only the DFO is delegated the ability and power to regulate to try to achieve them. I accept the concept set out in MacDonald, although it occurs in a different context, that there should be a "polycentric" approach to defining public interest [para 65], that "Public interest" includes both the concerns of society generally and the particular interests of identifiable groups" [para 67] and that harm to those not directly a party to the application may be considered. In the circumstances of this situation, the role of the DFO, the intent of the New Policies, and the interests of the community that has either not seen fit to appeal the New Policies or that wishes to act pursuant to the New Policies, are sufficient public interest (even without considering the wider community, which I would accept has an interest in a stable milk marketing system operating under a clear set of policies) to meet the test of irreparable harm. The interests of the OQRO are narrower in that it represents a group of milk producers who have a particular issue and perspective on the maintenance of quota values, and a group of other non-producers not directly affected by quota policies whose interest in the appeal has not at this point been completely explicated. I also accept that preventing the implementation of policies that are validly enacted within the jurisdiction of the public body is in itself a form of irreparable harm to the public interest. Unlike a Charter case, in which the validity of legislation is at issue, in this appeal the primary issues are the advisability of the New Policies and the sufficiency of study and consultation undertaken prior to them being enacted. There is no argument that the New Policies are beyond the jurisdiction of the DFO to pass. Therefore, I find that the second step of the test has been met, and that irreparable harm has been proved. I must therefore move on to the third step of the test, which asks: C: Where does the balance of inconvenience lie? The factors to be considered in assessing the balance of convenience include a second consideration of the public interest, and in particular greater weight is given to the public interest in "suspension" as opposed to "exemption" cases, where suspension means staying the entire operation of the legislation, and "exemption" means staying the operation of the legislation as against particular parties who would otherwise be subject to it ((MacDonald), paras 73, 74). The impact of not lifting the stay from the perspective of the DFO is
said to include the following. I find that the balance of inconvenience lies with the DFO. The evidence
of the DFO is that producers have already made decisions and acted in
anticipation of the New Policies, while the OQRO has not provided any
evidence of a greater public interest in keeping the stay in place or
a particular detriment to its members if the stay is lifted. This is not
to say that the OQRO's concerns are not appropriate subject matter for
an appeal, but only that as the situation exists it has not provided evidence
to maintain a complete suspension of the New Policies. I find that the balance of inconvenience lies with the DFO. The evidence of the DFO is that producers have already made decisions and acted in anticipation of the New Policies, while the OQRO has not provided any evidence of a greater public interest in keeping the stay in place or a particular detriment to its members if the stay is lifted. This is not to say that the OQRO's concerns are not appropriate subject matter for an appeal, but only that as the situation exists it has not provided evidence to maintain a complete suspension of the New Policies. 5. What is the scope of the Stay that is in place? In this motion, the DFO argues that at its highest the Tribunal can order the stay remain in place as against the appellants, and cites Denby v. Agriculture, Food and Rural Affairs Appeal Tribunal [2006] O.J. No. 1968, a Divisional Court decision. The DFO states Denby stands for the proposition that a "stay in the matter" does not "result in the automatic "suspension" of legislation validly enacted or to be enacted in the future [para 40]. While I agree with this proposition in general terms, with respect, I disagree that it is directly applicable to this appeal. First, the Denby case is distinguishable on its facts as a very unusual situation. In the Denby case the scope of the stay created by the IDDBA appeal does not appear to ever have been defined by motion or argued by IDDBA or the DFO in the IDDBA appeal itself, and the attempt by Mr. Denby to "shelter" under a pre-existing appeal by a separate legal person was a transparent attempt to use the stay provisions as a means of avoiding culpability. In most cases, the appeal of a decision to sanction a producer will clearly result in a stay of the penalty against the appellant, not an appeal of the regulations themselves, and thus will not trigger any issues of scope, as the decision itself is limited in scope to the person who has been sanctioned. In this appeal, the OQRO directly seeks to overturn the New Policies themselves, which affect all producers, and therefore the statement in Denby is not directly applicable and will not resolve the issue. In matters of appeals of policy or legislation, the scope of the stay
is more difficult to establish, and the Supreme Court of Canada in MacDonald
clearly in my view contemplates that a stay may be in the nature of a
"suspension" of the legislation or an "exemption"
of the appellants from the legislation. In paragraphs 73 and 74 of the
MacDonald decision, Sopinka and Cory for the court state: Similarly, even in suspension cases, a court may be able to provide some relief if it can sufficiently limit the scope of the applicant's request for relief so that the general public interest in the application of the law is not affected." Of course, in this situation, the DFO is supporting the general application
of the law and the OQRO is seeking to have the stay in place for all producers.
However, clearly the court contemplates both types of stays depending
on the circumstances and the nature of the appeal. This appeal would in my view be an appropriate situation to find that the stay triggered by the appeal had the effect of suspending the implementation of the New Policies, for the following reasons: 1. The appeal is by a number of producers with similar interests as represented
by voluntary association representing them, and is distinguishable therefore
from other situations, such as an appeal dealing with sanctions under
penalty where there is a single party dealing with his or her own circumstances
under unchallenged legislation. To be clear, the specific number of appellants
is not the material issue: it is that a number of people with similar
interests about matters of general application have launched an appeal.
Minnema was relied on heavily by the OQRO, and I was urged to follow it directly. I find Minnema, like Denby, distinguishable on its facts and on principle. First, the method of enactment of the policies in the OQRO appeal, through the normal voting and approval process of the DFO, is very different from a situation where the Commission decides to hold a set of hearings and reach a conclusion that policies should be changed. This is not to fault the Commission's process, but merely to point out that the typical policy-making process whereby a democratically elected board of producer representatives develops a specific and detailed set of policies affecting only its members differs from the manner in which the Commission proceeded. Second, the scope of parties and issues involved in the hearings and appeals in Minnema is far more extensive and the balancing of interests and impacts far more complex to manage than in this appeal. Also, the exact form and structure of the policies in Minnema were not fully defined by the Commission's hearings. These differences make the situation and the scope of decision making of the Tribunal different from the OQRO appeals. 6. What limit, if any, will be placed on the stay? There are several competing principles to consider. First, lifting the stay is a matter of discretion for the Tribunal, and therefore in all the circumstances the Tribunal can decide not to vary the stay even if there are arguments in favour of lifting it. Second, a statutory stay is a significant hurdle to overcome. As stated in Roosma v. Ford Motor Company of Canada Ltd., [1988] O.J. No. 3114 at para 21: "Courts are reluctant to lift statutory stays, in my opinion properly, for any other approach could render nugatory s. 25 of the SPPA." Third, the stay should not become a vehicle for delaying the implementation of policies. While assessing the merits of lifting a stay is not based on assessing either the popularity of policies or the number of those opposed, weight must be given to the evidence that in the period after the policies were announced and the appeal was launched, as well as after the appeal, other producers have arranged their affairs and incurred expenses in anticipation of the New Policies. Similarly, those who have not appealed should not unnecessarily become appellants by default, so to speak, by having the appellants' proposed outcome apply to them automatically. Fourth, the stability and certainty of the regulatory environment should in my view be enhanced wherever possible. Parties being stuck between policies, or producers not being able to order their business arrangements with reasonable certainty, or the DFO having to administer multiple sets of policies, are consequences that should be minimized or avoided if reasonably possible. There is also a principle cited in the case law that all other things being equal, the "status quo" should be maintained. The OQRO seemed to argue that launching its appeal created a new "status quo" in which the New Policies are suspended. However, in my view the status quo must refer to the situation prior to the stay being triggered, and in this case should refer to the situation at the time the New Policies were enacted. Launching an appeal should not create a new status quo or a benefit to the appellant procedurally, although launching an appeal may create the need to assess what the status quo was. The DFO, for its part, seemed to suggest that the status quo is the implementation of the New Policies and the operation of them as if there was no appeal. Again, this must be mistaken, as the motion requires this Tribunal to assess whether or how to maintain the status quo in light of the New Policies, the appeals and the resulting statutory stay. In either case, the status quo for Tribunal purposes must be the situation at the time the policies were enacted. For the members of the OQRO who are producers, then, the maintenance
of the status quo would be continuing to operate under the old policies
and not to be subject to the New Policies. However, it is not clear what
the scope of impact of the New Policies might be in that there is no suggestion
that any OQRO member will be dealing with quota in the period between
now and the time the appeal is heard. The DFO has indicated it would be
possible to insulate the appellants from a negative financial impact of
the New Policies. The OQRO also acknowledges that buying quota under the
New Policy may be an advantage financially to its members over buying
under the previous policies. Therefore, it is not clear that there will
be a negative impact from the need to operate under two sets of policies,
or indeed that any transactions involving the OQRO appellants will take
place before the appeal is heard. SummaryIn summary, I find as follows: 1. The appeal of the New Policies triggered the operation of Section
25 of the SPPA and Section 16 of the MAFRA Act. In the interim, if the stay continues to apply to OQRO members and some
of them decide to deal with their quota, the DFO will have to devise some
manner to operate the two sets of policies. This may be a difficult task,
but I note the DFO in its letter of July 6, 2009 has already offered to
eliminate financial risk to the members of the OQRO. I note also that
the DFO already faces this potential problem in that an appeal of the
policies in force prior to 2006 has been heard but not decided; if that
appeal is successful, these policies could be revived and all transactions
conducted under the policies in force immediately prior to the New Policies
would have to be revisited. In the circumstances, given the limited time
until the appeal is heard, the relatively small number of appellants and
given the lack of evidence of harm I find that a period in which the two
sets of policies are in place, while far from ideal, is manageable. Order of the TribunalThe Tribunal hereby Orders that: 1. The statutory stay established under the SPPA by the OQRO's appeal
will be limited in scope to those members of the OQRO who were members
and milk producers as of the date of the launching of the OQRO's appeal
of the DFO policies dated March 27, 2009 (the New Policies). Dated at Guelph, Ontario this 6th day of August, 2009. For more information:Toll Free: 1-888-466-2372 ext. 63433 Local: 519-826-3433 E-mail: appeals.tribunal.omafra@ontario.ca |
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