Michael Vandergeest vs. Dairy Farmers of Ontario

In the matter of the Milk Act and Section 16 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 by Michael VanderGeest, of Coldwater, Ontario, from a decision of the
Dairy Farmers of Ontario to deny his request for an exemption from the November 17,
2006 Quota Policy on Transfer Assessments.

And in the matter of:

A request for review by Dairy Farmers of Ontario from a decision of the Tribunal dated September 11, 2009 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

Background to the Review Request

Because of a serious injury in August 2008, Michael VanderGeest (Vandergeest) sold his milk production quota in September 2008 and left the dairy production industry. VanderGeest sold his entire quota of 18.23 kgs at the prevailing exchange (market) price.

Dairy Farmers of Ontario (DFO) is the legislated regulator of the dairy producer industry (dairy farmers). DFO allocates production quota to dairy farmers.

DFO has a quota transfer policy (Policy). A dairy farmer's sale of milk quota engages the Policy. The Policy imposes a minimum assessment of 15% on all but a farmer's last 10 kilogams (kgs) of quota.

Applying the Policy, DFO imposed an assessment on VanderGeest's sale equivalent to 1.892 kgs. That translates to $62,653.58 based on the prevailing market price.

In other words, VanderGeest received a market price for his quota, less the transfer assessment of $62,653.58 that went to DFO.

DFO considers special circumstance exemptions from the Policy.

In September 2008, VanderGeest asked DFO to grant him an exemption from the transfer assessment based on the special circumstances of his injury leading to his exit from the milk production industry. DFO refused. VanderGeest asked DFO to reconsider. DFO held a hearing to consider VanderGeest's reconsideration request. DFO denied the request. VanderGeest then appealed to the Tribunal under section 16 of the Ministry of Agriculture, Food and Rural Affairs Act (the Act).

On July 22nd, 2009, the Tribunal held a hearing into VanderGeest's appeal from DFO's denial to grant VanderGeest an exemption from the milk quota transfer assessment.

The Tribunal appeal panel defined the following single issue for its determination:

"Should Mr. VanderGeest receive an exemption from the DFO's assessment on quota transfer?"

Under section 16 of the Act, on an appeal from any "order, direction, policy or decision" of DFO, the Tribunal essentially stands in the shoes of DFO and can make any decision DFO could make.

The Tribunal released its reasons for decision on September 11th, 2009 granting VanderGeest a partial exemption (50% or $31,326.79) from the quota transfer assessment.

On October 9th, 2009, DFO requested a review of the Tribunal decision and asked for a reversal of that decision.

The Tribunal's Rules of Procedure

Pursuant to section 25.1 of the Statutory Powers Procedure Act, the Tribunal has established Rules of Procedure that includes Rule 29, which is entitled "Review of a Decision".

Rule 29.09 provides that in considering the advisability of a review I can consider any relevant circumstance including those listed in subsections (a) to (e) of that Rule. Although the Rules permit me to confer with the members of the appeal panel I elected not to seek out their explanation, preferring to allow the decision to "speak for itself".

In the course of my review I considered the materials listed in the endnote as the record of the proceedings under Rule 29.16.

DFO's Reasons for the Request for Review

DFO's general assertion is that the Tribunal made a material error of law or fact such that the Tribunal would likely have reached a different decision if it had not made the errors.

DFO cites the following two specific reasons supporting its general assertion:

1. The Tribunal found that DFO had an obligation to negotiate with the Appellant
2. The Tribunal made conflicting decisions

 

Review Findings

1. My restatement of DFO's first reason in support of its review request is:

Did the Tribunal find the DFO was obliged to negotiate with VanderGeest and, if so, was that an error in law or fact?

The Tribunal reasons reveal that the appeal panel, having heard the evidence, had serious concerns about the lack of criteria in how DFO granted exemptions from the Policy and about how DFO exercised its discretion under the Policy, as well as concerns about the process DFO utilized dealing with VanderGeest.

Part of the process-related concerns expressed in the appeal panel's reasons focused on DFO's interactions after VanderGeest started his appeal to the Tribunal. The appeal panel acknowledged that DFO can make its own decisions including refusing to negotiate with VanderGeest or to negotiate only up until an appeal is commenced.

However, the appeal panel found that DFO's conducting settlement negotiations in other Policy related appeals created expectations in applicants like VanderGeest.

The self-represented VanderGeest asked DFO for an opportunity to discuss settlement. DFO responded negatively, as it was entitled. However, that response created an issue for VanderGeest of unmet expectations and the spectre of differential treatment.

It was the appeal panel's view that DFO's inconsistent approach to negotiation in different appeals created the situation it described as "unfair" for applicants and "undermined" the exemption and appeal processes.

However, in my view, the appeal panel did not suggest, as a matter of law or fact, that DFO was obliged to negotiate with VanderGeest, nor did it determine that DFO, as a party litigant, owed VanderGeest a duty of procedural fairness.

I am not persuaded by DFO's first argument and therefore I find no error of law or fact.
2. My restatement of DFO's second reason in support of its review request is:

Did the Tribunal make conflicting decisions and, if so, was that an error in law or fact?

DFO suggests the appeal panel's finding that DFO did not give proper consideration to VanderGeest's catastrophic career ending injury conflicts with its later finding that some level of quota transfer assessment was still appropriate given the significant appreciation in value of VanderGeest's investment in quota during his 28 years as a quota holder.

In my view the appeal panel concluded that VanderGeest should receive a partial exemption due to proven extraordinary circumstances. The extraordinary circumstances were that VanderGeest suffered a catastrophic injury that prematurely ended his career as a dairy farmer.

In my view, the appeal panel then considered if there were any other circumstances that militated for or against an exemption. The appeal panel concluded that because VanderGeest was able to generate many years of income and a significant appreciation in value of the quota, those factors together militated against a full exemption from the quota transfer assessment.

So rather than conflicting, those findings dovetail and build one on the other as the rationale behind the appeal panel's decision. In my view, they are the central reasons for the appeal panel's decision. In legalistic language, they are the ratio decidendi of the decision.

Therefore, I do not find any conflict in the appeal panel's decision. It follows that since there is no conflicting decision, there is no error of law or fact.

Decision of the Tribunal

In these circumstances, I refuse to grant DFO's request for a review.

Dated at Brampton, Ontario this 23rd day of November, 2009.