Court strikes down tribunal decision

Thursday, October 22, 2009

by SUSAN MANN

The Ontario Superior Court of Justice struck down a provincial appeal body’s decision granting exemptions to a group of former milk producers from paying the Dairy Farmers of Ontario quota transfer assessment.

In the decision released Oct. 16, the Superior Court justices sent the matter back to the Agriculture, Food and Rural Affairs Appeal Tribunal for another hearing to determine if Bill Denby, Keith and Ron Jarvis and Dale McFeeters should be exempt from the Dairy Farmers of Ontario’s November, 2006 quota transfer assessment policy.

Denby, McFeeters and Ron and Keith Jarvis sold their quota in early 2007. They had asked DFO to be exempted from the policy but were denied. The group appealed DFO’s refusal to the tribunal, which granted exemptions last year.

The amount under dispute is about $800,000. The money is being held in escrow. The group’s lawyer could not be immediately reached for comment about what will happen next with the money.

Dairy Farmers asked the Superior Court earlier this year to review the tribunal’s decision. Bill Mitchell, assistant communications director, says they’re satisfied “with the court outcome.” What happens next is in the hands of the former dairy farmers.
 
Denby says they haven’t yet decided what they’ll do. Their options are to appeal the Superior Court decision, go back to the tribunal for another hearing before different panel members or do nothing and walk away.

He adds their lawyers are going over the decision “with a fine-tooth comb” to see if the judges made any legal mistakes.

Denby says they’re not really disappointed by the outcome of the Superior Court decision.

In their written decision, the Superior Court justices give a number of reasons for striking down the tribunal’s decision. The tribunal didn’t consider the main issue before it, which was whether DFO’s refusal to grant the exemptions was appropriate, it says in the written decision. “The tribunal then granted exemptions to them without stating any reasons why these particular dairy farmers should be treated differently from all other dairy farmers subject to the November, 2006 quota policy.”

“The failure to state any reasons for interfering with the DFO decision refusing the exemptions, or for its (the tribunal’s) own decision to grant the exemptions, is a breach of procedural fairness and are grounds for setting aside the decision,” the justices say in their decision.

Denby says the tribunal doesn’t have to give full reasons. “They have the power to grant exemptions.”

The justices also note the tribunal made a number of errors in law. One was the tribunal erred “in holding that DFO was subject to a common law duty of procedural fairness” when it decided to implement a new quota policy without advance notice to farmers. “This DFO decision was of a legislative nature and not subject to the rules of procedural fairness,” it says in the decision.

Another was the tribunal made a mistake in interpreting a section of the Milk Act. When DFO implements broad-based policy decisions, such as changes to the quota system, the Milk Act doesn’t impose an obligation of procedural fairness, it says in the decision.

DFO applied a 15 per cent transfer assessment on all quota sold on the exchange from Nov. 17, 2006 until earlier this year when that policy was replaced Aug. 1 with new rules that include a cap on the quota price. BF

UPDATE: The  group is seeking leave to appeal the decision. Denby says the group's lawyers  are preparing a five-page preliminary argument that's likely to be submitted  to the court this week. Efforts to obtain a new tribunal hearing will depend  on the outcome of the group's request for an appeal. "If we're successful  there then we don't need to do the tribunal," says Denby. "If not, then we  still have the right to go to the tribunal." BF