A Justice of the Supreme Court of British Columbia has set aside a

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Thursday, August 7, 2014 - Issue 305
Issues added on the 7th and 21st of every month.
** HIGHLIGHTS **
*
*
A Justice of the Supreme Court of British Columbia has set aside a decision
of B.C.'s Farm Industry Review Board, which relied on provincial guidelines
and a municipal bylaw to determine what constituted a normal farm practice,
rather than considering evidence concerning the normal standards adopted
by other farm operations. The Court set aside a decision which relied
primarily on the Board's interpretation of a municipal bylaw which created
setback requirements for buildings. (Holt v. Farm Industry Review Board,
CALN/2014-027, [2014] B.C.J. No. 1930, British Columbia Supreme Court)
A Justice of the Ontario Superior Court of Justice has dismissed a claim for
economic loss by one of the largest commercial rabbit farmers in Canada
who claimed that a large number of rabbit deaths were caused by the
presence of vomitoxin in feed. After considering competing expert evidence,
the Court concluded that the farmer could not establish that vomitoxin had
caused the deaths, and that it would be necessary to establish a causal link
between the deaths and the presence of vomitoxin to establish a breach of the
implied covenant of merchantability under the Ontario Sale of Goods Act.
(Jones Feed Mills Ltd. v. Raivio, CALN/2014-028, [2014] O.J. No. 3443,
Ontario Superior Court of Justice)
** NEW CASE LAW **
Holt v. Farm Industry Review Board; CALN/2014-027, Full text: [2014] B.C.J. No.
1930; 2014 BCSC 1389, British Columbia Supreme Court, T.C. Armstrong J., July 23,
2014.
Right to Farm Legislation -- British Columbia -- Farm Industry Review Board -Evidence of Normal Farm Practice.
Pirjo Holt ("Holt") appealed to the British Columbia Supreme Court from a decision of
the Farm Industry Review Board (the "Board") which determined that the location of
"run outs" in her Kelowna equestrian business were not consistent with normal farm
practices as defined in the Farm Practices Protection (Right to Farm) Act, R.S.B.C. 1996,
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c. 131 (the "Act") because the run outs were not set back from a neighbour's property line
by at least 15 metres.
Section 2 of the Act protects farm operations from nuisance claims provided that the farm
operations are conducted in accordance with "normal farm practices":
2(1)
If each of the requirements of subsection (2) is fulfilled in relation to
a farm operation conducted as part of a farm business,
(a)
(b)
(2)
the farmer is not liable in nuisance to any person for any odour,
noise, dust or other disturbance resulting from the farm
operation, and
the farmer must not be prevented by injunction or other order of
a court from conducting that farm operation.
The requirements referred to in subsection (1) are that the farm
operation must
(a)
be conducted in accordance with normal farm practices,...
Pursuant to s. 3 of the Act, a person aggrieved by any odour, noise, dust or other
disturbance resulting from a farm operation may apply to the Board for determination as
to whether the odour, noise, dust or other disturbance results from a normal farm practice.
The Board conducting a hearing and may either dismiss the complaint or direct that the
farmer modify the practice. Section 6(1) of the Act provides:
6(1)
The panel established to hear an application must hold a hearing and
must
(a)
(b)
dismiss the complaint if the panel is of the opinion that the
odour, noise, dust or other disturbance results from a normal
farm practice, or
order the farmer to cease the practice that causes the odour,
noise, dust or other disturbance if it is not a normal farm
practice, or to modify the practice in the manner set out in the
order, to be consistent with normal farm practice.
Section 1 of the Act defines "normal farm practice" as follows:
"normal farm practice" means a practice that is conducted by a farm
business in a manner consistent with
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(a)
(b)
proper and accepted customs and standards as established and
followed by similar farm businesses under similar
circumstances, and
any standards prescribed by the Lieutenant Governor in Council,
and includes a practice that makes use of innovative technology in a
manner consistent with proper advanced farm management practices and
with any standards prescribed under paragraph (b).
A dispute began in 2009 when Holt constructed a new equestrian barn on her Kelowna
farm property. Holt's neighbours, Nicholas and Sandra Swart (the "Swarts") complained
to the City of Kelowna that the setback provisions for the proposed barn did not comply
with Kelowna's zoning bylaws. The City reviewed its set back provisions and advised
Holt that her plans for the barn did not meet the bylaw requirements. Holt then made
modifications to the barn layout which satisfied the City of Kelowna which concluded
that the modifications made by Holt obviated the need for any setback.
The Swarts were dissatisfied with the results of their submissions to the City of Kelowna.
They made a complaint to the Board.
On March 4, 2013, the Board found that a section of Holt's horse farm and equestrian
centre was not a normal farm practice because turning out horses within 15 metres of the
property line in question was not a normal farm practice based on the City of Kelowna's
zoning bylaw and the Ministry of Agriculture Farm Practice Review Guide ("Provincial
Guidelines").
The Board ordered Holt to set her run outs back at least 15 metres from the Swarts'
property line, or to discontinue using this area for turning out horses.
Section 8(1) of the Act affords complainants and farmers a right to appeal on questions of
law or jurisdiction:
Within 60 days after receiving written notice, in accordance with section
6(5), of a decision of the chair or a panel of the board made under section
6, the complainant or farmer affected by the decision may appeal the
decision to the Supreme Court on a question of law or jurisdiction.
Holt advanced 7 grounds of appeal.
Decision: Armstrong, J. set aside the Board's order and directed that the complaint be
remitted to the Board [at para. 270].
Armstrong, J. referred to one of the very few appeals in British Columbia from Board
decisions, Lubchynski v. Farm Practices Board, 2004 BCSC 657 (*CanLII), 2004 BCSC
657 in which Beames, J. described the Board's role as follows:
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The determination of normal farm practice is not, I conclude, a matter of
statutory interpretation. The F.P.B. has been constituted by the legislature
as a specialized board. Its members include all members of the B.C.
Marketing Board. It is empowered by its legislation to use processes not
available to the court in the resolution of a complaint. Its initial mandate is
to attempt to resolve the dispute through consultation and in that process; it
may also obtain advice from persons knowledgeable about normal farm
practices. Hearings may be conducted informally and the panel may, in its
discretion, receive evidence which would not be admissible in a court of
law. Specialists and consultants may be retained directly by the Board. The
Board may also be ordered to study any matter related to farm practices
and to report findings and recommendations to the Minister. If the Board
finds that a farmer's practice is not normal farm practice, it may order the
farmer to modify his practice in a specified manner, including in manners
not available by way of a remedy which could be granted by the court.
Armstrong, J. considered the applicable standard of review for the appeal, in detail, at
para. 35 to 51 and concluded at para 54 that:
[54] ...the standard of review on this appeal is reasonableness, and the
authorities establish that the FIRB is entitled to significant deference in
assessing normal farm practice.
Armstrong, J. considered and rejected most of Holt's grounds of appeal. However,
Armstrong, J. accepted Holt's submission that the City of Kelowna bylaw does not set
"standards in relation to normal farm practice"; that its bylaw guide sets maximum and
not minimum setbacks, and that the bylaw does not prohibit smaller setbacks [at para.
203 to 205]. Armstrong J. also accepted Holt's argument that the Board's reliance on
Provincial Guidelines were incorrect and unreasonable [at para. 206].
Finally, Armstrong, J. held that the Board on the whole failed to consider evidence
pertaining to similar farm businesses in similar circumstances and that the Board's
decision was not justified or transparent and unreasonable on this basis [at para. 213].
Armstrong, J. relied on the decision of the Ontario Court of Appeal in Pyke v. Tri Gro
Enterprises, (2001) 204 D.L.R. (4th) (Ont. C.A.) which the Ontario Court of Appeal
stated, in part, as follows:
[81] ...Not all industry standards prevail -- only those that are judged to be
"proper and acceptable". In my view, this statutory language requires the
adjudicative body to consider a wide range of factors that bear upon the
nature of the practice at issue and its impact or effect upon the parties who
complain of the disturbance, with a view to determining whether the
standard is "proper and acceptable"...
Armstrong, J. concluded, at para 225 and 226:
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[225] Although it is important to conduct an evaluative function that
addreses the "good neighbour" principle, etc., the BC legislature chose
clear and specific features of normal farm practices, including "accepted",
"established", and "followed" practices. This language is a clear and
specific direction from the legislature that instructs the FIRB that it can
supplement but not substitute certain evidence - e.g., provincial guidelines
or the "good neighbour" principle - in place of evidence that demonstrates
"proper and accepted customs and standards as established and followed by
similar farm businesses under similar circumstances". Indeed, the FPPA
circumscribes the evidence the FIRB must consider in making its final
determination of normal farm practice.
[226] In sum, while I accept the FIRB's arguments about the principles
discussed in their previous jurisprudence, the FPPA words must be read in
their entire context and in their grammatical and ordinary sense
harmoniously with the scheme of the Act, the objects of the Act, and the
intention of the BC legislature so that all farmers are able to anticipate the
implications of their own farm practices.
and at para. 230 to 232:
[230] ...the FIRB erred when resting its decision on the conclusion that
provincial guidelines and zoning bylaws constitute the standards regarding
normal farm practices designed to account for proximity issues with
consideration of the statutory definition.
[231] The FIRB reasons do not address the question of the specific
circumstances of the appellant's farm business in the context of the "proper
and accepted standards as established and followed by similar farm
businesses under similar circumstances".
[232] In fact, other than to reject the appellant's evidence because it lacked
detail, the FIRB never considered the practices of other farm businesses in
similar circumstances in reaching its conclusions. As Beames J.
specifically said in Lubchynski at para. 16, FIRB decisions that are
"completely unsupported by any evidence" are patently unreasonable.
and at para. 240 to 242:
[240] The FPPA's very purpose by its title alone is clear: protect farming
and the right to farm. Accordingly, the normal farm practice definition
cannot prefer provincial guidelines and zoning bylaws over "standards as
established and followed by similar farm businesses under similar
circumstances".
[241] In fact, om a plan textual reading, the FPPA does not instruct the
FIRB to consider provincial guidelines and zoning bylaws.
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[242] While I accept that provincial guidelines and zoning bylaws are
acceptable considerations when assessing normal farm practice, neither
provincial guidelines nor zoning bylaws on their own or together are
sufficient to make a normal farm practice finding. The obligation to
consider a wide range of factors was underscored in Pyke at para. 71.
Indeed, the FIRB must consider standards as established and followed by
similar farm businesses under similar circumstances. It failed to do so.
At para. 251, Armstrong, J. outlined the definition of normal farm practice as follows:
[251] The BC legislature clearly defined "normal farm practice" to mean:
(a)
(b)
(c)
(d)
(e)
"a practice"
"conducted by a farm business"
"in a manner consistent with"
"proper and accepted" "customs and standards"
"as established and followed by similar farm businesses under
similar circumstances".
Jones Feed Mills Ltd. v. Raivio; CALN/2014-028, Full text: [2014] O.J. No. 3443; 2014
ONSC 4298, Ontario Superior Court of Justice, D.A. Broad J., July 21, 2014.
Livestock Feed -- Toxins -- Merchantability -- Proof of Causation -- Vomitoxin.
Jones Feed Mills Ltd. ("Jones Feed") commenced an action against Maxwell Raivio
("Raivio") for a debt in the sum of $26,097.00 representing unpaid invoices for the
supply of rabbit feed to Raivio for the period August 8, 2005 to March 22, 2006.
Raivio defended the action and counterclaimed for damages on the basis of negligence
and breach of contract alleging that some or all of the feed supplied by Jones Feed
contained vomitoxin, also known as deoxynivalenol or "DON" ("vomitoxin") which
caused illness and a spike in mortality among his rabbit herd.
Raivio claimed economic loss in the sum of $70,000.00.
Raivio was one of the largest commercial rabbit producers in Canada and the United
States.
Commencing in August, 2005, Jones Feed began supplying Raivio with custom formula
feed mixes.
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In September of 2005, 270 to 300 dead rabbits were found in their cages in Raivio's fryer
barn. High levels of mortality in the herd continued through September with a total of
4,567 deaths. There were 3,100 deaths in October and 2,300 in November. Raivio
discontinued purchasing feed from Jones Feed in November of 2005.
Tests conducted by Jones Feed and Raivio in September, October and December, 2005
disclosed levels of vomitoxin in the feed.
Expert evidence was tendered at trial by both Raivio and Jones Feed.
Raivio's expert noted that vomitoxin is the most common trichothecene mycotoxin.
Mycotoxins are produced by a fungi that is naturally occurring, and which can evade
plants either pre-harvest or post-harvest. Fungal production of mycotoxins are influenced
by environmental conditions, such as temperature, moisture and water activity.
The main issues at trial were:
1.
2.
Whether the high levels of mortality in Raivio's rabbit herd was caused
by the feed supplied by Jones Feed, and
Whether Jones Feed breached its contract with Raivio by supplying
contaminated feed, or was negligent in failing to do so.
Decision: Broad, J. granted Jones Feed judgment for its outstanding invoices and
dismissed the counterclaim [at para. 65 to 67].
Broad, J. considered the expert evidence, and the causation issue in depth at para. 7 to 27.
The Jones Feed expert testified that it was difficult to conclude that the contamination of
feed provided by Jones Feed caused the massive losses experienced by the Raivio rabbit
farm.
The Court concluded, at para. 28:
[28] The onus of proving, on a balance of probabilities, that the high levels
of illness and mortality in the Raivio rabbitry during the relevant period
was caused by the feed supplied by Jones Feed, and in particular, by the
presence of elevated levels of vomitoxin (or DON) is on Mr. Raivio. It is
noted that there was no onus on Jones Feed to prove what the cause of the
problems experienced in Mr. Raivio's rabbitry was. On the evidence, I am
unable to find that Mr. Raivio has discharged the onus of proof on him.
Broad, J. dismissed Raivio's claim for negligence because there was no evidence of the
applicable standard of care or whether Jones Feed failed to adhere to any required
standard of care [at para. 32].
With respect to the issue of whether there was a breach of contract, Broad, J. observed
that as there were no express terms, the claim could only be founded upon an implied
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term. As no representations were made with respect to fitness for a particular purpose, the
implied covenant of merchantability under the Ontario Sale of Goods Act was the only
implied term which might apply [at para. 35 and 36].
With respect to whether there was a breach of the implied condition of merchantable
quality, Broad, J. concluded as follows [at para. 37]:
[37] On the question of whether Jones Feed breached an implied condition
of merchantable quality, although he could not point to any established,
objective, or accepted industry or regulatory standard for a maximum level
of mycotoxin in rabbit feed, counsel for Mr. Raivio argued that it was up to
Jones Feed to ensure that the feed supplied by it met the needs of its
customer Mr. Raivio, in that the feed would be suitable for rabbits to eat.
He submitted that the "end result sets the standard" and that, since there
was unacceptable levels of mortality in the herd, the implied warranty of
merchantable quality with respect to the feed was breached. Given my
finding that with respect to causation, I am unable to give effect to this
argument.
In this regard, Broad, J. relied on Clarence Kloosterhof's Farm Services Ltd. v. Longley
2000 CanLII 4664 (NS.SC), (2000), 186 N.S.R. (2d) 131 (N.S.S.C.) which dealt with a
claim that vomitoxin caused illness and death in a farmer's pig herd, but could not make
the link between impurities in the feed and the resulting problems with the pig herd.
** CREDITS **
This NetLetter is prepared by Brian P. Kaliel, Q.C. of Miller Thomson LLP, Edmonton,
Alberta.