Planting is around the corner

Planting is around the corner

Thursday, April 23, 2015

Better Farming: Pipelines present new risks to farmers warns landowners group

Click here to read Better Farming's article on the National Energy Board's Administrative Monetary Penalty system that now applies to pipeline landowners.

Monday, April 13, 2015

NEB introduces Administrative Monetary Penalties to landowners

The National Energy Board ("NEB") has issued a new publication called "Administrative Monetary Penalties: Information for Landowners".  Among the information provided by the NEB is the following:
  • How did Administrative Monetary Penalties ("AMPs") come to be?  They were created in July, 2012 as part of the Government's omnibus budget bill;
  • If an AMP is issued to a landowner, the NEB may post the landowner's name on its website;
  • If an AMP is issued to a landowner by the NEB, the landowner may ask the NEB to review its own decision (but, although it is possible for a landowner to ask the Court for a judicial review of the NEB's decision, there is no appeal available where an AMP has been issued).
Landowners are now at risk of being charged AMPs for violations of the NEB Act, including carrying out certain farming activities without pipeline company approval.  Daily penalties range from $250 to a maximum of $25,000 per violation for individuals.  Daily penalties range from $1000 to a maximum of $100,000 per violation for corporations.

Monday, April 6, 2015

BC Appeal Court overturns decision that awarded farm to former worker

In a post from August, 2013 called "Equity ensures farm goes to intended beneficiary after codicil failed", I wrote about a decision of the British Columbia Supreme Court that granted ownership of a farm to a long-time farm worker on the basis of alleged promises made during the lifetimes of the farm owners.   The farm worker said that the owners, Kim and Dietrich, had assured him that the farm would go to him more or less in recognition of his uncompensated work on the farm.  Although their 1998 mutual wills left the farm to someone else, Kim and Dietrich had prepared handwritten codicils that would have left the farm to the worker.  However, with only one witness, the codicils were invalid.  Dietrich died in 2006.  When Kim died in 2011, the worker sued the estate for an equitable interest in the farm (which had been left to another beneficiary).  The trial judge concluded that the worker had made out his claim based on proprietary estoppel (i.e. you promised me and now you can't say that you didn't) and that equity required that the farm go to him.

This decision has now been overturned on appeal.  While the BC Court of Appeal concluded that the farm worker was assured and genuinely believed he would inherit the farm, the Court also found that his detrimental reliance on the assurance was far less than that assessed by the trial judge.  The award of ownership of the farm was far out of proportion to the detriment the worker actually suffered and, in all the circumstances, would not do justice between the parties (as equity is intended to do).

As the Court stated, "detriment forms the backbone of a claim of proprietary estoppel because it is detriment that gives rise to the unfairness which requires equity to intervene."  Reliance is not always detrimental, and it is necessary for the Court to look "at both the overall benefits gained and losses suffered by the claimant."  The Court in this case found that the worker did not suffer from choosing to work at a small accounting firm close to the farm, one of his alleged grounds of detrimental reliance.

But the Court was not able to say definitively that the worker's uncompensated efforts at the farm hadn't given rise to the need for equitable relief.  Therefore, the Court of Appeal set aside the trial judge's decision and sent the case back to the trial judge to assess claims of unjust enrichment and express or implied trust, as well as the issue of proportionality as it related to the claim of proprietary estoppel.

It should be noted that one of the three appellate justices would have dismissed the appeal, finding that it could not be said that the trial judge had improperly exercised his discretion in awarding the farm to the worker.

Read the decision at: Sabey v. Rommel.

Thursday, April 2, 2015

CAFA - Current & Connected Conference - June 4, 2015 - Woodstock, ON

The Canadian Association of Farm Advisors will be holding its annual Current & Connected Conference at the Quality Inn in Woodstock, ON on June 4, 2015.  Featured speakers include:

Brent Van Parys & Hali VanVliet, BDO SuccessCare Program:  Building & Transitioning Three types of Capital

Karl Volkmar, Southern Crop Protection and Food Research:  The Direction of Federal Research in the Science and Technology Branch

John Mill, Succession Tax Council:  Capital Gains Deductions and Rollovers for Farmers

Gary VanBolderen, Dutch Builders, VP Council of Ontario Construction & Chair, Canadian Farm Builders

Naomi Loewith, Lenczner Slaght:  Strategic Advice for Avoiding & Managing Legal Disputes

Click here for the agenda

Click here to register

Monday, November 24, 2014

Dairy Farmers of Canada opposition to "Monster Milk" trade-mark rejected by Registrar

In July of this year, the Registrar of Trade-Marks in Canada dismissed oppositions filed by the Dairy Farmers of Canada against the proposed registration of trade-marks for "Monster Milk" and "Monster Mlk".  The registrations were requested by Cytosport, Inc. for a product described as: "Dietary and nutritional supplements for use in athletic training, namely for improving body strength and building muscle, excluding ready to drink beverages."

Dairy Farmers of Canada argued that the proposed trade-marks "whether depicted, written or sounded, are deceptively misdescriptive in the English language of the character or quality of the [products] in association with which they are proposed to be used.  Indeed, when depicted, written or sounded, the average consumer is likely to believe that the [products] are made of 'real milk' or contain 'real milk'."

The applicant, Cytosport, Inc., submitted that the term "milk" has a number of definitions that make it "clear that the work 'milk' could mean many different things and would not, in the mind of an average consumer, necessarily refer to cow's milk." 

The Registrar concluded that the trade-marks were registrable: "The work MILK (or MLK) is only one word in a composite mark.  The combination of the word MONSTER with the word MILK (or MLK) is unusual.  Aside from the word MILK (or MLK) that may suggest the character of the dietary and nutritional supplements, there remains the distinctive portion MONSTER.  The word MILK (or MLK) is no more dominant than the word MONSTER.  The combination of MONSTER and MILK (or MLK) does not create a trade-mark that can be viewed as a whole as descriptive of the character or quality of the dietary and nutritional supplements.  As the first portion of the test is not met, the [trade-marks] cannot be found misdescriptive."

Read the decision at: Dairy Farmers of Canada v Cytosport.

Friday, November 21, 2014

When "strong bonds of love and devotion" fall apart: Sask Court considers action to set aside gratuitous gift of land from elderly parent to adult child

Justice Schwann of the Court of Queen's Bench for Saskatchewan opened her recent decision in a farm estate case as follows: "At issue in this case are the legal ramifications flowing from a gratuitous gift of land from an elderly parent to an adult child, and the parent's subsequent desire to revoke that gift."  An elderly mother transferred a joint tenancy interest in the family farm to her stepson shortly before she left to live in an assisted living home, but a year later brought a court action to have the transfer set aside.  She died a few years after that before the action was decided - it was continued by her estate.  Upon the mother's death, the farm passed to the stepson as the surviving joint tenant.

Several grounds for setting aside the original transfer were proposed to the Court: 1) undue influence of the stepson over the mother; 2) the absence of independent legal advice; 3) breach of fiduciary relationship; 4) failure of consideration; and, 5) presumption of resulting trust.

Justice Schwann determined that the mother had gifted the interest in her farm property by exercise of free will - she was not unduly influenced by her stepson.  She also found that the mother had not received adequate independent legal advice about the transfer, but this was not in and of itself a reason to overturn the gift.  Justice Schwann did not find that the lack of independent legal advice meant that the stepson had dominated the mother's free will.  She also found that there was no fiduciary relationship, that no consideration (i.e. quid pro quo) was required for the gift, and that no resulting trust was established.  The action by the estate was dismissed in its entirety.

Read the decision at: Thorsteinson v Olson.

Monday, November 10, 2014

Divisional Court tells Municipality of West Grey to change by-laws and grant permits required for local wind farm

The applicant wind farm developer (NextEra Energy Canada ULC) sought judicial review of two municipal permitting by-laws that prevented it from proceeding with the construction of a project; in order to complete the development, the applicant said that it required permits from the Municipality of West Grey.  The Divisional Court hearing the application noted: "The application raises the question of when and how a municipal by-law or policy may frustrate the purpose of a provincial legislative instrument.  The factual backdrop for this legal question is the ongoing renewable energy revolution in Ontario that was ushered in by the Green Energy Act, S.O. 2009, c. 12.  This revolution has spawned much litigation, particularly around wind energy projects."
The applicant received the Renewable Energy Approval (REA) from the Ontario Ministry of the Environment for its 14-turbine project in January, 2014.  However, the applicant would also need "entrance permits" to connect access roads on private lands to the public highways within the municipality, as well as "oversize/overweight haulage permits" to allow for the conveyance of large and heavy project materials by truck along public highways.  The municipality declined to grant the required permits, in part on the basis of changes it had made to its by-laws.
The applicant argued to the Divisional Court that it holds a valid REA from the province and that, since the municpal by-laws are in direct conflict with the REA, the by-laws are inoperative to the extent of the conflict (under Section 14(1) of the Municipal Act, 2001).  The Court noted that a municipality can only exercise its powers by by-law, and the Municipal Act, 2001 provides that a by-law cannot frustrate the purpose of a provincial or federal Act, regulation or instrument. 
Based on the Court's interpretation of the REA, it found that the municipality's permitting by-laws did prevent the project from being built.  Therefore, the by-laws frustrated the purpose of the REA and must be held inoperable, but only to the extent of the conflict with the REA. 
However, the Divisional Court did not accept the applicant's alternative argument that the municipality had acted in bad faith in refusing to grant the required permits.  As the Court stated, "The Municipality is a democratic body accountable to its constituents.  It has a broad legislative discretion to enact by-laws governing issues that regulate daily life and the built infrastructure within its jurisdiction ... Council's call for a moratorium on wind energy projects in Ontario and its declaration that it is an "unwilling host" for such projects are not acts that, in and of themselves, support a finding of bad faith."

Friday, October 24, 2014

NEB - Government of Canada Pipeline Regulations: Criminalization of Farming?

New pipeline regulations proposed by the National Energy Board (NEB) shift the burden of constructing, operating and maintaining safe pipelines to farmers, who will face near automatic Administrative Monetary Penalties (AMPs) or even Criminal Code prosecutions for failing to warn pipeline companies when pipelines cannot safely accommodate farming practices.  Doesn't this sound backwards?  On behalf of CAEPLA and landowners across Canada, the Manitoba Pipeline Landowners Association (MPLA) submitted the letter below to the NEB urging the regulator to shift the burden to make pipelines safe back to pipeline companies where it belongs, and to avoid making criminals out of landowners and farmers. 

October 20, 2014

Proposed NEB Pipeline Damage Prevention Regulations
Sheri Young
Secretary of the Board
National Energy Board
517 Tenth Avenue S.W.
Calgary, AB   T2R 0A8

Dear Madam Secretary:

RE:          Manitoba Pipeline Landowners Association (MPLA)
               Comments on Proposed Amendments to Regulations for Pipeline Damage Prevention

We are the lawyers for the Manitoba Pipeline Landowners Association (MPLA) and are writing in response to the NEB’s letter of September 18, 2014 to provide MPLA’s comments concerning the proposed amendments to pipeline damage prevention regulations.    MPLA is a voluntary association of Enbridge pipeline landowners in Manitoba, most of whom have between 6 and 8 pipelines crossing one or more of their properties (with at least one additional pipeline being proposed at present).  MPLA landowners and all NEB-regulated pipeline landowners across Canada are directly affected by Section 112 of the NEB Act and its related regulations.  MPLA is taking the lead on behalf of the Canadian Association of Energy and Pipeline Landowner Associations (CAEPLA), of which MPLA is a member association, in responding to the NEB’s proposed regulatory amendments.  MPLA’s comments should be taken as those of pipeline landowners across Canada.

This marks the third time that MPLA has written to the NEB concerning the most recent round of proposed changes to Pipeline Crossing Regulations.  CAEPLA also provided comments to the NEB on previously proposed changes to the regulations dating back more than a decade.  Unfortunately, the currently proposed amendments demonstrate that the NEB is still not listening to the concerns of pipeline landowners.  The amendments do nothing to introduce fairness for agricultural landowners into the regulatory scheme.

As set out in MPLA’s comments to the NEB in February, 2013 on the NEB Discussion Paper, Section 112 of the NEB Act leaves landowners carrying an unfair burden in ensuring pipeline safety in Canada.  Restrictions on agricultural operations over and near pipelines are only necessary where companies have failed to ensure that the condition and location of their pipelines are adequate to accommodate agricultural operations.  Fairness dictates that pipeline companies, which have obtained land rights by expropriation or by agreement made through the threat of expropriation, should be required to accommodate farming.  However, as is apparent in the latest proposed amendments to the regulations, the NEB is continuing to move in the opposite direction – creating regulations that absolve pipeline companies from the duty to build, maintain and operate safe pipelines by restricting agricultural operations and exposing pipeline landowners to regulatory and penal liability.

Once again, MPLA urges the NEB to reverse this course by making amendments to the regulations that restore a landowner’s ability to carry out agricultural operations without the constant fear of contravening the NEB Act and regulations and of incurring the penalties that will result.  The starting point is to prescribe an exemption for all agricultural activities from the requirements to obtain NEB and/or company permission in Sections 112(1) and 112(2).  Then, similar to the proposed Section 10.1 of the proposed Damage Prevention Regulations, Part 2, the regulations would also provide that, if a pipeline company determined that agricultural activities could jeopardize the safe and secure operation of a pipeline, the pipeline company would be required to identify affected locations and advise landowners and farmers in writing of those locations and the reasons for the determination.  The pipeline company would then have two options for addressing its safety and security concerns:

1.       Remove, repair, modify, relocate or replace its pipeline so as to ensure that agricultural activities will not jeopardize the safe and secure operation of the pipeline; or,

2.       Provide affected landowners and farmers with clear written direction on any restrictions to be applied to agricultural operations in specified locations and pay the landowners and farmers compensation for any resulting business losses or other related damages or loss.

This proposal is consistent with the principles that should apply to the interaction between pipeline companies and landowners under the NEB Act – that pipeline companies are responsible to build, operate and maintain their pipelines safely, and that landowners are to be compensated for the imposition of pipelines on their properties and on their businesses.  MPLA’s proposed amendments do not compromise pipeline safety.  Instead, they shift the primary safety and security decision-making burden off of the backs of landowners and farmers and onto pipeline companies where it should be.  Landowners and farmers should not be placed in the position of having to decide whether a pipeline is safe or not and of having to face regulatory and penal liability if they are wrong.

As MPLA previously stated in its February, 2013 comments, pipeline companies have the resources and expertise to make this work.  They can obtain equipment specifications directly from farm equipment manufacturers; they can determine the surface loading and other impacts generated by farming activities; they already possess information (or should possess information) about the location, depth and condition of their pipes.  Where site specific locations are identified that will not accommodate the impacts of all farming activities, pipeline companies can determine what work is necessary to accommodate farming or what restrictions may be necessary.  And pipeline companies can compensate landowners and farmers for restrictions that are necessitated by the unsafe condition of their pipes.

Without this shift of responsibility to pipeline companies, Section 112 of the NEB Act and the related regulations will continue to work an injustice for landowners and farmers across Canada.  How else can one describe a situation where a Canadian farmer faces at a minimum an “administrative monetary penalty” of no less than $1,000.00 (or $4,000 for a corporation) for failure to notify a pipeline company that its pipeline is unsafe?  And the farmer has been deprived of any defence of due diligence, has no ability to appeal a decision of the NEB on the matter, and faces public denunciation by the NEB?  MPLA and its members are very concerned about the opportunities for abuse by pipelines companies that have been created by the administrative monetary penalty regime.  The answer is for the NEB to make the amendments proposed above by MPLA so that pipeline landowners and farmers do not face punishment on account of the failure of pipeline companies to build, operate and maintain safe pipelines.

The NEB should stop covering up for the inadequacies and deficiencies in pipelines on the backs of Canadian landowners and farmers.  Safety is in everyone’s interest, but it is the pipeline companies that should be responsible for safety.  MPLA and pipeline landowners across Canada hope that the NEB will take advantage of this opportunity to enhance pipeline safety while making the pipeline regulatory scheme fairer for landowners and farmers.

Yours truly,

John D. Goudy

c.c.:        MPLA, Board of Directors