Bruce Pearse v. Agricorp (Request for Review)

In the matter of Ontario Regulation 140/96 under the Crop Insurance Act (Ontario) 1996, S.O. 1996, C. 17, Schedule C.

And in the matter of:
An appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Bruce Pearse of Sunderland, Ontario from a decision of Agricorp concerning the adjustment of his claim for his 2006 Red Spring Wheat and Soybean crop, and his fall red wheat planted in 2005 and harvested in 2006.

And in the matter of:
A request for review by Bruce Pearse of the Decision of the Tribunal dated May 22, 2008 made by letter dated June 6, 2008, under Subsection 21.2(1) of the Statutory Powers Procedure Act and Rule 29 of the Rules of Procedure for the Tribunal.

Before:
John O'Kane, Vice Chair

Appearances:
None

Decision of the Tribunal

Bruce Pearse ("Pearse") runs Hazlee Farms of Sunderland, Ontario. Pearse bought crop insurance from Agricorp for the 2006 Spring Red Wheat and 2006 Soybean crops. Pearse made a claim to Agricorp for losses with both crops. Agricorp denied Pearse's claim.

Pearse appealed that claim denial to the Agriculture Food and Rural Affairs Appeal Tribunal (the "Tribunal").

The appeal hearing was on April 15, 2008 in Peterborough and the Tribunal released its decision and reasons on May 22, 2008 (the "Decision"). The Decision denied Pearse's claim on the Soybeans and allowed a partial recovery on the Red Spring Wheat claim.

After receiving the Decision, Pearse's counsel wrote the Tribunal asking for a review of the Decision.

Statutory Jurisdiction for a Review:

Section 21.2 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 ("SPPA"), as amended, grants the Tribunal a discretionary power to review all or part of its own decisions and as part of such a review, the power to confirm, vary, suspend or cancel a decision.

That power is conditional on the Tribunal having provided for such a review in its own rules of procedure. The exercise of that power is also conditional on the Tribunal deciding that such a review is advisable.

The Tribunal's Rules of Procedure:

Under section 25.1 of the SPPA the Tribunal has set up Rules of Procedure (the "Rules") that includes Rule 29 entitled "Review of a Decision".

The Rules set up a process where the Tribunal first decides if a review is warranted and if so, an oral hearing is granted before a panel appointed by the Chair. That panel may, after hearing the review confirm, vary, suspend or cancel the decision under review.

The Tribunal Chair asked me to consider the Pearse request for a review and decide if the Tribunal should review the Decision.

Rule 29.09 guides my evaluation of Pearse's request. That rule grants me a wide discretion to consider "any relevant circumstances".

The Process Employed:

I asked Tribunal staff to invite Agricorp to make submissions about Pearse's request for review as allowed under Rule 29.17.

In considering the Pearse request for review I received from the Tribunal office and considered the following materials:

1. The Pearse request for review dated June 6, 2008 signed by Donald Good;
2. The May 22, 2008 Decision of the Tribunal signed by Vice-Chair Gene Trotman;
3. The Pearse document brief (Exhibit 3 from the hearing);
4. The Agricorp document brief (Exhibit 1 from the hearing);
5. The ACC Farmers Financial Commodity Loan Program Summary documents (Exhibit 3 from the hearing);
6. The Pearse Notice of Appeal dated December 27, 2007;
7. Agricorp's submission of July 21, 2008 responding to Mr. Good's request for review;
8. Mr. Good's July 23, 2008 reply.

Although the Rules allow me to consult with members of the Tribunal panel that made the Decision, in these circumstances I elected not to do so and was content to let the Decision speak for itself.

Pearse's Request for Review:

The June 6, 2008 letter from Mr. Good suggested the reason for the request for review was:

"… the Tribunal, on the face of the record, has misapplied the law on the strict interpretation of insurance contracts."

Mr. Good's complaint is that the Tribunal:

1. got the law wrong when it suggested the contract of insurance "must be interpreted strictly."
2. made an error in law when it "considered irrelevant evidence."

In considering this request for review I determined that, to be successful at this stage, Pearse must satisfy me that the Tribunal made material errors of law such that the Tribunal would likely have reached a different conclusion.

Material Error of Law:

The Tribunal Rules do not help with any definition of "material error of law". The Canadian Law Dictionary defines the word "material" as an adjective meaning "important, going to the merits, having to do with matter as distinguished from form".

For this request for review I am satisfied that to be a material error of law it must be related in an important way to the ultimate reasons why the Tribunal decided as they did.

Interpreting Insurance Policies:

The law, as informed by the Supreme Court of Canada in Simcoe and Erie General Insurance Company v. Reid Crowther & Partners Limited [1993] 1 S.C.R. 252, is that the following general principles govern interpreting insurances policies.

1. The contra proferentum rule directs that ambiguities in the policy wording are resolved by adopting an interpretation that favours the insured rather than the insurer which drafted the policy;
2. The principle that coverage terms should be broadly construed and exclusions clauses narrowly;
3. Where the policy is ambiguous, giving effect to the reasonable expectations of the parties.
   

Disposition:

Interpreting contracts is a contextual exercise. Interpreting insurance contracts is a contextual exercise that also incorporates the general principles noted above. Interpreting insurance contracts is also a question of law.

The Decision asserts an approach to interpreting the crop insurance contract that is not consistent with the law. I am concerned that the Tribunal considered the evidence using an incomplete approach to interpreting the insurance contract. It appears to me that the Tribunal's incomplete understanding of the applicable law was an important part of the ultimate reasons in the Decision and therefore, material.

I believe that it is at least possible that a Tribunal, fully informed of the law, would likely have reached a different conclusion.

Therefore I grant the Pearse request for a review of the Decision.

Dated at Brampton, Ontario, this 25th day of July, 2008.