Unloading in the evening

Unloading in the evening

Friday, December 24, 2010

"A contract to make a contract is not a contract"

In a recent decision, the Ontario Superior Court of Justice dismissed a breach of contract claim by one farmer against another in connection with the sale and purchase of wheat.  The Court noted that, "Because of the rapid price fluctuations in the grain market, oral contracts are the norm. Once the oral contract is completed it is normally followed up by reduction to written form, although not always." 

Mr. Kuratli, the plaintiff in the case, and Mr. Hefti, the defendant, had done business with one another in the summer of 2007. At a party for people of Swiss descent Mr. Kuratli asked Mr. Hefti if he had any corn available. Mr. Hefti had approximately 35 tonnes of corn. He agreed to sell it to Mr. Kuratli for $175 a tonne. Mr. Kuratli picked up approximately 20 tonnes near the end of September 2007 and paid Mr. Hefti for the load, but failed to pick up the balance of the tonnage at the agreed price. Mr. Hefti had to sell it at a loss. Thereafter Mr. Hefti decided that he would not do any further business with Mr. Kuratli unless he had a contract in writing.

The wheat purchase at the heart of the case before the Court was first arranged orally.  Then, as the Court found, Mr. Hefti's intention was that a written contract would be executed.  On the basis that no written contract was executed, the Court dismissed Mr. Kuraltli's claim for damages for the failure by Mr. Hefti to deliver wheat according to the arrangement.  The Court stated the law on the issue:
Where the intention of the parties is that their legal obligations are to be deferred until a formal contract has been approved and executed, the original or preliminary agreement cannot constitute an enforceable contract. A contract to make a contract is not a contract: see Bawitko Investments Ltd. v. Kernels Popcorn Ltd., 1991 CanLII 2734 (ON C.A.), [1991] 79 D.L.R. (4th) 97 (O.C.A.), and the cases cited therein.
Read the decision at: Sonibrand-Farm Inc. v. Ferme Rudolf Hefti Inc.

Thursday, December 23, 2010

National Energy Board releases its Farm Vehicle Crossing Rules

The National Energy Board (NEB) has now released its proposed answer to the question asked by any pipeline landowner familiar with the requirements of the National Energy Board Act: when may I cross the pipeline with my farm equipment?  At present, the NEB Act provides that no one may cross a pipeline with a vehicle or mobile equipment (which covers off just about any agricultural activity) without the permission of the pipeline company.  Now, with the new "guidance" in place, permission must only be sought from the company in specified circumstances.  An exemption order issued by the NEB means that crossings in "low-risk conditions" do not require any further company permission.

Does the NEB's answer satisfy the landowner concerns that have been expressed about the permission requirement?  Probably not.  For instance, permission from the pipeline company will still be required in the following circumstance:
Any use of heavy agricultural vehicles or mobile equipment that may not be able to safely cross the pipeline, especially pipelines with reduced depth of cover or other factors increasing the risk of crossing as identified by the pipeline operator.
"Heavy" equipment or vehicles are described in the NEB guidance document to include "large harvesters" or "large grain transporters".  As with the previous situation, the onus is left on the landowner to decide whether his or her equipment is "large". 

Also, pipeline depth of cover is a factor in determining whether permission is required.  However, pipeline companies are not required by the NEB to provide depth of cover information to landowners as of right.  In fact, it is likely that most pipeline companies are not aware of the depth of cover over top of their pipelines.  Again, the onus is on the landowner to find out what depth of cover is over the pipelines on their lands.  What happens if there is insufficient depth of cover to allow for ongoing farming practices?  The NEB guidance document provides no answers.

Read the full document at: Guidance for Safe Crossings of NEB-Regulated Pipelines Using Agricultural Vehicles and Mobile Equipment.

Wednesday, December 22, 2010

Farm labourer's "get a motel" constructive dismissal claim dismissed

Mark Isnor had been an employee of the Ueffing Farms Limited from June 22, 1997 to November 2, 2009, as a farm labourer and performed many varied tasks on the company’s hog farm in Canning, Nova Scotia.  Before a labour tribunal hearing, Isnor testified that in early September of 2009, there were two new employees who were hugging and kissing in the barn. He testified he did not say anything to the owners of the business although he did not believe it was appropriate behaviour for employees in the workplace. He testified this activity of hugging and kissing by the two young people went on 2 to 3 times a day, however, on cross-examination he restated and said the activity was frequent, but may not have been that often.

Isnor further testified that he did speak to the couple to say they should get a motel if they were going to do that activity. He testified this behaviour did not bother his work and he did not consider it a major concern other than he thought it was inappropriate behaviour in the workplace and told Donald Ueffing, an owner of the employer company, that it should stop.

Isnor quit his employment and then made a complaint to the Nova Scotia Labour Standards Tribunal in the form of a constructive dismissal claim (i.e. that his work environment had been allowed to become so poisoned that he had no choice but to leave his employment, as if he had been wrongfully dismissed).  The Tribunal dismissed the claim:
The Tribunal finds on the balance of probabilities from hearing the evidence and the testimony, and review of the exhibits, the Complainant quit his employment on November 2, 2009, and there has been no substantive evidence presented by the Complainant to show the workplace environment was so poisoned or destructive that was not remedied by the Respondent, such that he could not do his work. Accordingly, the Tribunal finds without some corroboration of the Complainant’s testimony, which did not occur at this hearing, there is no substantive evidence to support a claim for constructive dismissal from the evidence presented.
Read the decision at: Isnor v. Ueffing Farms Limited.

Tuesday, December 21, 2010

Amendments to Renewable Energy Approvals in Ontario designed to bring clarity

Amendments to O.Reg. 359/09 (Renewable Energy Approvals)

As a key pillar in supporting the development of Ontario’s green economy, the Ontario government established O. Reg. 359/09 (Renewable Energy Approvals) under the Environmental Protection Act, on September 24, 2009. The regulation governs the approach to regulating renewable energy generation facilities based on transparency and clear, up-front provincial rules, while ensuring that the environmentt and human health are protected.

Since the regulation came into force, certain provisions of the regulation have been identified as needing further clarity or detail to bring them in line with the original intent of the regulation. The Ministry has made amendments to the regulation to strengthen and clarify those provisions.  The amending regulation was filed with the Registrar of Regulations as Ontario Regulation (O.Reg. 521/10) on December 20, 2010.  The regulatory amendments come into force on January 1, 2011.

Public Consultation on the proposal for this decision was provided for 45 Days, from October 07, 2010 to November 21, 2010.  As a result of public consultation on the proposal, the Ministry received a total of 285 comments: 24 comments were received in writing and 261 were received online.

The Ministry considered all comments received during the comment period in response to the posting and made the following revisions to the amendments originally posted in the proposal notice:

Vacant lots

Ontario Regulation 359/09 identified the centre of a vacant lot as a noise receptor for the purpose of determining setback distances for wind energy and other facilities. Since the implementation of the REA process and during the EBR consultation period the Ministry heard a mixed opinion on the best approach to this issue. This amendment changes this approach to make it consistent with the Ministry’s 2008 Noise Guidelines, requiring a consideration of the existing zoning by-law and typical building pattern in the area when determining a more likely location for a future noise receptor. This approach will also allow for consideration of existing municipal zoning permissions and the typical local building patterns.

Definition of noise receptor

Ontario Regulation 359/09 described a noise receptor as a location for “overnight accommodation”. This amendment changes the definition of noise receptors from “overnight accommodation” to “dwelling” to better match the originally intended interpretation of a noise receptor – locations where there is a residence with cooking, eating, living, sleeping and sanitary facilities. In response to comments received in the EBR consultation, the definition of “dwelling” was further modified by replacing the words “intended to be used” with “capable of being used”. The Ministry is also clarifying that a dwelling can be either a permanent or seasonal residence. This definition of dwelling is based on the definition in the Building Code and is premised upon the existence of the infrastructure needed to support someone living in a dwelling.

Setback prohibitions and cumulative noise assessment

The wind turbine setback prohibitions in Ontario Regulation 359/09 required proponents to consider all noise receptors at the time of construction. This approach did not reflect the fact that the surrounding conditions could change between the time of approval and time of construction. This amendment changes the time at which a proponent must consider noise impacts to surrounding noise receptors, requiring proponents to consider all noise receptors at the time they make their site plan public. Proponents then have 6 months to submit an application with the noise receptors defined in that site plan. In response to comments received, the Ministry is adding the ability of the Director to extend the expiry date of the site plan beyond the originally proposed 6 months if the proponent cannot submit an application due to circumstances outside his or her control. This requirement to consider all noise receptors at the time the site plan is made public also applies to existing projects that have made their site plan publicly available prior to the amendment coming into force.

The amended regulation also requires proponents to consider all existing and publicly known projects in the surrounding area when determining their site plan and complying with the noise setback requirements. Considering all publicly known projects in the area may require larger set backs in the noise modeling, and will ensure the Ministry can assess the cumulative impacts of the proposed project.

Public notification of meetings

Ontario Regulation 359/09 required notice of public meetings 30 days prior to the first meeting. This amendment clarifies that public notice must be made 30 days prior to the first public meeting and 60 days prior to the final public meeting. This is to allow for additional consultation where necessary and avoid the need for notice of all public meetings to be made at the very start of the process. In response to EBR comments received, the Ministry has also extended the notice period for the final public meeting from 30 days to 60 days. The 60 day period is consistent with when draft reports must be made available to the public prior to the final public meeting and will enhance public engagement.

Public notification of Renewable Energy Projects

Ontario Regulation 359/09 required written notice of a project to all landowners within 120 metres of the project location. This amendment changes the notification requirements, requiring written notice to all adjacent landowners in addition to those within 120m of the project location. This amendment applies to all renewable energy projects. In response to EBR comments and concerns about wind energy projects in particular, the Ministry has also extended the 120 metres distance to 550 metres in the case of Class 3, 4, or 5 wind energy projects to better align with the minimum setbacks from noise receptors. The extension to 550 metres does not apply to small wind or other types of renewable energy projects such as solar, and does not impact the minimum setback prohibition for Class 4 or 5 wind facilities of 550 metres from the base of a turbine to a noise receptor. These amendments will encourage increased transparency and enhanced public engagement.

Public notification of an application being made to the Director

Ontario Regulation 359/09 did not require final documentation submitted to the Ministry to be made public. This raised concerns about transparency and whether or not the proponent took into consideration the comments received during the consultation. This amendment requires proponents to post all documents that accompany a REA application on the proponent’s website, should they have one. In response to the EBR comments received, this amendment further requires the proponent to provide public notice of their application being accepted for review by the Ministry. Within 10 days of their application being posted on the EBR by the Ministry, the proponent must publish a newspaper notice. The notice must include project information, the website where final documents can be viewed, and a statement that members of the public can submit comments to the Director via the EBR. This amendment will ensure that the public is aware of an application being submitted and of the EBR comment period. This rule does not apply to Class 2 wind facilities or to bio-energy facilities located at a farm operation. These amendments will encourage increased transparency and enhanced public engagement.

Municipal consultation

Ontario Regulation 359/09 required that the Ministry’s municipal consultation form be provided to the municipality 90 days prior to the final public meeting, and draft reports be made available 60 days prior to the final public meeting. While the intent was to give municipalities an early opportunity to learn about the project, without the documentation it proved difficult for municipalities to be meaningfully engaged. This amendment requires proponents to provide a draft Project Description Report and the Ministry’s municipal consultation form to municipalities at least 30 days prior to the first public meeting. Draft reports (but not the confirmation letters from other ministries) must be provided to municipalities 90 days prior to the final meeting. In response to EBR comments the Ministry has removed the requirement to provide the municipal consultation form 90 days prior to the final public meeting to avoid unnecessary duplication. Municipal consultation is an important part of the REA process and these amendments will better ensure municipalities can make informed and timely comments on the project proposed.

Wind turbine specifications report

Ontario Regulation 359/09 requires a wind turbine specification report for Class 3, 4 and 5 wind projects. The amendment requires that the specification report must include acoustic emissions data in accordance with Canadian Standards Association (CSA) standards. As a result of EBR comments received, the Ministry has also added the terms “measurement uncertainty value” and “tonality” to the specification report requirements.

Director discretion

Ontario Regulation 359/09 sets out specific requirements a proponent of each type of renewable energy facility must meet prior to submitting a REA application. This had created the unintended consequence of proponents not technically meeting the requirements where they were responding to public concerns (e.g. changing the public meeting location to accommodate increased public interest). This regulation was proposed to provide discretion in prescribed instances to the Ministry of the Environment Director where the requirement was not necessary for adequate understanding of potential negative environmental effects or satisfactory consultation. In response to EBR comments received, the regulation has been changed to clarify that this discretion can only be exercised if the Director is of the opinion that it will not compromise an adequate understanding of the negative environmental effects of a project, or if it will improve public consultation.


The regulation provides proponents that have already issued a notice under section 15 of the regulation with the flexibility to use the amended regulatory requirements for applications. The EBR proposal notice proposed to have proponents declare whether they intend to use the amended requirements by submitting written notice within 60 days of this regulation coming into force. In response to EBR comments, this has been changed to allow proponents to identify if they have applied the amended requirements to their project in the publicly available documents at the time of REA application. This flexibility only applies to those that have already issued a notice so as to not unfairly impact project timelines and consultation done to date.

The EBR proposal notice indicated that these transition provisions would only apply to Part IV of the regulation (where renewable energy approval requirements where identified). In response to EBR comments, the Ministry has also clarified that the transition provisions apply to the amendments related to the definition of vacant lots and woodlands.

In addition to the concerns described above, the Ministry received a large number of submissions through the Environmental Registry that were not specifically related to the proposed amendments, but related to the Government’s position on green energy. The most common themes were related to general opposition to the Government’s green energy agenda and wind energy project development in particular. Some specific comments were related to perceived health impacts, setbacks, property values and loss of municipal decision-making authority.

The MOE Statement of Environmental Values was considered in the development of these regulatory amendments. The regulation takes an ecosystem approach and supports the principle of pollution prevention by facilitating the development of renewable energy generation which is a cleaner, less polluting source of electricity than fossil fuel-based generation. These amendments encourage increased transparency and enhanced public engagement. Amendments are in keeping with the principle of continuous improvement, as changes will strengthen and improve existing requirements.

Monday, December 20, 2010

Drainage Appeal dismissed by Agricultural, Food and Rural Affairs Tribunal

The Baird municipal drain comprises a watershed of approximately 245 hectares of agricultural and wooded lands in the geographic municipality of the Township of Turnberry, now in the municipality of Morris-Turnberry. The drain is comprised of an open channel main drain and three branch drains, Branch A, Branch B and Branch C. Pursuant to a drainage petition filed by Bill Fralick, an engineer’s report was prepared providing for the construction of a new Branch D tile drain on the lands of Donald and Marion Eadie. The Eadies appealed the engineer’s report to the Agricultural, Food and Rural Affairs Appeal Tribunal. They asked that the report be amended to provide for the construction of a new drain outside of their lands. In the alternative, if the new Branch D tile drain was to remain on their property, then they asked for certain changes to the set up of the drain. The Eadies also asked that the allowances to be awarded to them as part of the project (the allowances being compensation for land taken and damages caused) be increased.

The Tribunal considered the appellants’ suggestion that the area requiring drainage could be diverted southerly to a different drain watershed.  However, the Tribunal noted that the appellants did not produce any professional evidence to substantiate that suggestion.  Therefore, the Tribunal accepted the engineer’s evidence.  It also considered the appellants’ request to move the proposed catch basis from the top of the drain to another location.  Again, the Tribunal accepted the engineer’s testimony on the reasons for which this proposed change could not be made.

With respect to allowances under Section 29 of the Drainage Act, the engineer testified that he obtained land sale data from Farm Credit Canada to establish a per acre land value of $4,000 used to calculate the allowances.  Mr. Eadie presented a letter from a Mr. Crispin showing the sale for parcels of land for prices higher than $4,000 per acre, but Crispin was not called to testify.  The Tribunal placed limited weight on that evidence.  Ultimately, the Tribunal found that the allowances under Section 29 of the Drainage Act provided in the engineer’s report were fair and equitable and in conformance with the Act. The Tribunal also found that the engineer’s allowances under Section 30 of the Act for crop losses determined to be $500 per acre were fair and equitable and in conformance with the Act.

Read the decision at: Baird Municipal Drain.

Saturday, December 18, 2010

B.C. Agricultural Land Commission prohibition on non-farm use upheld

Tree to Me Agricultural Products Inc. applied to the regional district of Okanagan Similkameen to have a 0.75 hectare portion of its lands designated for non-farm use.  The regional district referred the matter on to the Agricultural Land Commission.  The Commission granted the application on specific terms.  However, later the Commission revoked some of the terms and yet left in tact the requirement that Tree to Me register on title to the lands a covenant prohibiting the construction of any structures on the remainder of the property, which measured approximately 15.2 hectares.

Tree to Me applied for judicial review of that decision in the Supreme Court of British Columbia. Tree to Me had plans to develop the property, including plans for a proposed building.  The first floor of the building would be devoted to retail operations related to its production of fresh fruits and vegetables. The second floor of the building would include a residential suite for the manager, bed and breakfast units, and sleeping areas for workers.

The court found that the Commission had the ability to designate the building proposal as a non-farm use given the “excessive number of residential units”.  Also, the Commission found that, “absent sufficient evidence, the Commission is well within its rights to impose no-billed and other covenants, in appropriate cases, as part and parcel of regulating the use and development of agricultural lands in order to achieve its statutory object of preserving such lands.”  The standard of review for the Commission’s decision is one of reasonableness.  The court found, in the end, that Tree to Me had not satisfied the onus of showing that the decision of the Commission was unreasonable.  Therefore, Tree to Me’s petition against the prohibition on non-farm uses on the balance of its property was dismissed.

Read the decision at: Tree To Me Agricultural Products Inc. v. British Columbia (Agricultural Land Commission).

Friday, December 17, 2010

Saskatchewan farm sues Canadian Wheat Board for lost income, defamation

Hudye Farms of Norquay, Saskatchewan has launched a multi-million dollar lawsuit against the Canadian Wheat Board (CWB).  The action in the Saskatchewan Court of Queen's Bench seeks $247,699 from CWB for loss of income and other expenses.  The action also seeks $10 million in damages for breach of fiduciary duty and $15 million in exemplary and punitive damages.  The action seeks a further $25 million in a claim related to alleged defamation resulting from a notice sent out by CWB to Yorkton-area elevators.  The notice specifically named Hudye Farms.

The dispute arises out of a decision by CWB to downgrade 122.5 tonnes of wheat delivered by Hudye.  Hudye had a contract with CWB for delivery of 8,600 tonnes of Canada Western Red Spring Wheat, but CWB found that 122.5 tonnes of the wheat that was delivered contained 23.6 percent 606/Granite wheat, an ineligible variety.

Read an article about the lawsuit at: portageonline.com.

Thursday, December 16, 2010

York Region Article: Land dispute holds up 404 expansion

York Region Article: Land dispute holds up 404 expansion

Click on the link above to read about an ongoing fight over expropriation in York Region.  A Hearing of Necessity was held on September 21 of this year to determine whether the expropriation proposed for the expansion of Highway 404 was "fair, sound and reasonably necessary" as required by the Expropriations Act.  Five landowners involved have rejected the compensation offers made by the Ministry of Transportation (MTO) and there is also opposition to the Environmental Assessment proposed for the expansion project.  The MTO had originally projected 2012 for the start of operations of the expansion, but has now pushed the date back to 2013.

Wednesday, December 15, 2010

B.C. Court resolves nasty neighbour dispute over Sunshine Coast vista

A recent Supreme Court of British Columbia action arose out of a dispute between adjacent landowners in a rural area outside of Comox, B.C.  The dispute culminated in the defendant, Susan Field, erecting a wall of earth topped by a row of large concrete blocks, along a southern portion of the boundary between their properties.  The plaintiffs, Robert and Kathryn Silcox, said that this contravened an agreement they had reached with the defendant in April 2006.  Under that agreement, the plaintiffs had acquiesced in the defendant’s purchase of a road allowance which abutted their properties at the north end.  In return, they said, the defendant had agreed to do a number of things, including preserving their view – what they call their “viewscape” – over the southern end of the defendant’s land, out over the Straits of Georgia.  That view has been blocked by the wall.

The plaintiffs therefore sought an injunction compelling the defendant to remove the concrete blocks, vegetation, and fill installed by her after April 29, 2006, and restraining the defendant permanently from interfering with the view as it existed on that date.

In the end, the Court did not grant the injunction.  This decision is worth a read to see what events led the judge to determine that Ms. Field was entitled to keep the wall in place:
... in my view, removal of the wall would deprive the defendant of what measure of peace and security it has provided her. In my judgment, the plaintiffs’ behaviour subsequent to April 2006, in particular the malicious and high-handed damage to the defendant’s plants, which must be viewed in the context of their generally confrontational approach to defendant, and their numerous demands and objections, should entitle the defendant to leave to wall in place and relieve her of any obligations which could arise in law or in equity respecting preservation of the plaintiffs’ view. In my judgment, leaving the wall as-is would lead to a more equitable result than forcing its removal.

Read the decision at: Silcox v. Field.

Monday, December 13, 2010

Failures of High Pressure Natural Gas Pipelines Pose Significant Threat

Alliance Pipeline Limited (Alliance) has made an application to the National Energy Board (NEB) to be excused from a proposed requirement that it either replace its pipeline or lower its maximum operating pressure in the vicinity of a new casino development called Alexis.  The Alexis Casino will be located 92 metres from the centreline of Alliance's 36 inch diameter high pressure natural gas pipeline.  The NEB has previously stated to Alliance that it will need to modify its pipeline in the vicinity of the casino in order to bring the pipeline within Class 3 requirements (for higher density population areas).  Alliance wishes to leave the pipeline as is.

The NEB has now issued additional information requests to Alliance regarding its proposed operation of its pipeline near the Alexis Casino - NEB Letter dated December 10, 2010.  Appended to the information requests is a copy of a report entitled, "A MODEL FOR SIZING HIGH CONSEQUENCE AREAS ASSOCIATED WITH NATURAL GAS PIPELINES".  The report describes some of the destructive consequences of ruptures of high-pressure gas pipelines, including mushroom clouds, trench fires, jet fires and flash fires. 

Saturday, December 11, 2010

B.C. woman found in contempt of court for distributing raw milk for human consumption

Alice Jongerden was ordered by the Supreme Court of British Columbia to stop packaging and distributing raw milk for human consumption. The Fraser Health Authority, which obtained that injunction, alleged that Ms. Jongerden disobeyed the order and asked that she be found in contempt of court.  The Fraser Health Authority said that after the injunction was issued in March, 2010, Ms. Jongerden continued to distribute raw milk in the same manner and to the same recipients as before. Ms. Jongerden admitted she continued to distribute raw milk, but said she complied with the court order by labelling the product “not for human consumption”.

Ms. Jongerden operates a dairy farm, carrying on business under the name of “Home on the Range”. She disagrees with the public policy prohibiting the distribution of raw milk and believes consumers should have the right to choose it.  On July 9, 2009, she was ordered by the Public Health Inspector to “cease and desist the distribution of raw milk for human consumption”.  When that order was apparently not complied with, the Fraser Health Authority sought and obtained an interim injunction from the Court.

On a review of the circumstances, the Court concluded that Ms. Jongerden wilfully disobeyed the terms of the Order by continuing to distribute and make available raw milk to the same individuals to whom she previously provided it for human consumption.  Therefore, Ms. Jongerden was found to be in contempt of the Court Order.  However, the Fraser Health Authority had not yet asked that any specific penalty be imposed for Ms. Jongerden’s contempt of court.  The Court understood that Ms. Jongerden had, as a result of the interim order of Saunders J., ceased all production and distribution of raw milk products. As long as that would remain the case, the Court found that Ms. Jongerden would have purged her contempt and that there should be no need for the matter to proceed to consideration of a penalty.

Read the decision at: Fraser Health Authority v. Jongerden.

Friday, December 10, 2010

Nova Scotia Court upholds cap on dairy quota prices

Some Nova Scotia dairy producers applied to the Supreme Court of Nova Scotia challenging the authority of the Dairy Farmers of Nova Scotia (DFNS) to decrease the price of quota in the province.  DFNS regulations provide mechanisms to adjust a producer’s non saleable and saleable milk quota. They also create a capped price for the exchange of saleable milk quota. The capped price is being phased in over the period commencing in August 2009 through July 2012 and eventually will set a maximum value that is below the value currently being obtained in trading on the quota exchange.

The applicants’ principle challenge was to the purported authority to decrease the quota price. While they maintain support for a supply management system, they favor a quota exchange price that is market driven and not capped. They also seek to ensure that they do not otherwise lose valuable saleable quota already acquired.

At the heart of the dispute was a conflict between some dairy producers who seek to preserve the value of their investment in the dairy industry through unrestricted quota pricing, and those who fear that an unregulated quota price will render the financial structure of the industry unsustainable in the long term.  It is suggested, among other things, that an unrestricted quota price exchange will make it prohibitively expensive for new entrants to the industry.

The Court examined two issues: 1) whether the quota regulation was, prima facie, a proper exercise of the DFNS authority; and, 2) whether the effect of the regulations was to expropriate property without compensation (which can be done, but only where the legislation expressly permits expropriation without compensation) - de facto expropriation.  With respect to these issues, the Court ruled:
  • the power to adjust quota has been properly delegated to the DFNS under the Dairy Industry Act (DIA);
  • Regulation 21, fixing a price cap, is authorized by section 14(1)(e) of the DIA,  and in particular clause (iii) which authorizes  “...setting the terms and conditions on which the transfer [of quota among producers] may take place”;
  • Milk quota is not "property" for the purposes of the de facto expropriation argument;
  • Alternatively, if quota is "property", it has not been expropriated because the uses of quota have not been destroyed by the price cap;
  • Further in the alternative, if quota is property and has been expropriated, the legislation expressly provides for the price cap without any compensation (i.e. expropriation without compensation).
Read the decision at: Taylor v. Dairy Farmers of Nova Scotia.

Thursday, December 9, 2010

OPA FIT and Micro-FIT Program Updates

The OPA's November 22, 2010 is available at: OPA Bi-Weekly Update Report

Close to 23,000 applications have been filed for micro-FIT projects, of which 99% are solar PV projects.  Over 16,000 conditional offers have been made by the OPA, and close to 2,000 contracts have been executed.  The 23,000 applications represent 207 MW of potential power.

On the FIT program side, there have been over 3,700 applications:

Tuesday, December 7, 2010

Expropriation: B.C. Supreme Court comments on use of sales to expropriating bodies as evidence of "market value"

In August 1987, the Resort Municipality of Whistler, expropriated approximately 108 acres of land (the “Property”) from Rainbow Country Estates Ltd.  The Property fronts on Alta Lake, a warm water lake that is excellent for swimming. It includes a natural beach along a portion of the waterfront. There are very attractive views from the Property across Alta Lake towards the two main ski hills in Whistler, Whistler Mountain and Blackcomb Mountain. Alta Lake Road runs through the Property, in a north-south direction. A very popular public park, Rainbow Park, is now located along the lakefront.  At the time of the expropriation, Whistler valued the Property at $367,000, and paid that amount. 

Twenty-three years after the expropriation, the B.C. Supreme Court released a decision on the market value of the property.  Rainbow, the plaintiff in the case, relied on the market valuation provided by its appraiser Sandra Cawley and argued that the appropriate range for the market value of the Property as of August 1987 was between $1.7 million and $2 million.  Whistler, on the other hand, relied on the market valuation provided by its appraiser, Larry Dybvig, of $315,000.  If the Court were to accept Mr. Dybvig’s opinion, Rainbow would be entitled to nothing because it received more than this amount in August 1987.

In the end, the Court determined that the market value was $1.3 million in 1987.  In the course of coming to this conclusion, the Court had occasion to comment on the use of purchases by expropriating bodies as "comparables" in determining market value:
Mr. Dybvig’s thirteen comparables also included four where Whistler was the purchaser. The authors of The New Law of Expropriation comment on sales to public bodies having expropriation powers and say (at pp. 5-42 to 5-43):
It is a common practice of some expropriating authorities to acquire the land they require without resorting to formal expropriation. . . . Because of the ever-present power of expropriation, in many cases the owner cannot fit within the statutory definition of “willing seller”, and the transaction fails as evidence of “market value”. . . . While the owner under today’s legislation is closer to a position of equality than he or she was in the past, expropriation is still a harrowing experience. Many owners do not understand the advantages of the reform legislation and will settle for far less than what they might expect to receive after litigation before the tribunal and in the courts. Other owners cannot afford the delay caused by litigation, particularly in Ontario where interest paid on compensation is wholly inadequate. Some owners fear offending an authority which presently or in the future might exercise a discretionary administrative authority which affects or might affect their interests. Others are simply intimidated by the overwhelming power of the authority and its seemingly unlimited resources. Thus, in many cases the rationale behind the early rule is still valid. Other settlements which are made after full appraisals have been completed by each party and both parties have received competent legal advice can, absent other factors, be accepted as a valid expression of the parties’ perception of the market value of the subject property on the valuation date.
The authors comment further (at p. 5-43) that, in the absence of “convincing evidence” that such transactions are at arm’s length and completely free from any threat of expropriation, it will be an uphill battle to convince the tribunal that the transaction meets the statutory definition of a sale from a “willing seller” made in the “open market.” The party seeking to rely on such a sale has the burden to establish the sale was voluntary and unaffected by extraneous factors. However, the circumstances of these four transactions – where Whistler was the purchaser – have been left unexplained by Mr. Dybvig. Without evidence of the circumstances, I have no basis to conclude that the transactions in fact qualify as sales from a willing seller made in the open market.

The presumption that sales to expropriating authorities should be given no weight is also discussed in the text The Law of Expropriation in Canada, 2nd ed. (Scarborough: Thomson Carswell, 1992), at p. 201:

The party seeking to introduce and rely on sales of comparables to an authority must establish to the satisfaction of the tribunal that the “transactions may be regarded as voluntary in character.” In the absence of evidence that the sales were arm’s length transactions they will not be admitted, or, if admitted, given no weight.
The concern (reflected in the learned texts) is that involuntary sales do not reflect a sale in the open market by a willing seller. Non-arm’s length sales may not occur on the open market at all and may be affected by considerations between the non-arm’s length parties. However, Mr. Dybvig’s report did not include relevant information about the parties or indicate that Mr. Dybvig did any investigation of the circumstances of the transaction. As a result, the usefulness of many of Mr. Dybvig’s comparables is diminished, and my confidence that Mr. Dybvig is an impartial expert is further undermined.
One question raised by this decision, I suggest, is whether the "pattern of dealings" approach used in many pipeline expropriation cases is appropriate.  Should the fact that a company has been able to reach an agreement with a number of landowners under the threat of expropriation be determinative of the market value of a particular property? 

Read the B.C. decision at: Rainbow Country Estates Ltd. v. Whistler.

Thank you to one of my readers for bringing this decision to my attention.

Monday, December 6, 2010

Municipality discharges contaminated water into municipal drain

The Corporation of the Municipality of Lambton Shores and Landmark Tank & Tower Services Corp. Fined $50,000 for a Discharge of Contaminated Water

SARNIA - On October 18, 2010, The Corporation of the Municipality of Lambton Shores pleaded guilty to one violation under the Ontario Water Resources Act and on September 28, 2010, Landmark Tank & Tower Services Corp. pleaded guilty to the same charge of discharging contaminated water into the Hobbs McKenzie Drain.

The Court heard that the town hired the company to clean and inspect a drinking water standpipe in the Village of Arkona. When the standpipe was opened by the company, it was found to contain 2000 gallons of a red mixture of iron rich water and solids. The company pumped the material out of the standpipe and into the spillway that flowed into the municipal storm drain. Responding to complaints from a resident that the drain was running red in colour, ministry staff attended the site and confirmed the discharge.

The town and company were charged following an investigation by the ministry’s Investigations and Enforcement Branch.  The company was fined $30,000 and the town was fined $20,000 for a total of $50,000 plus victim fine surcharges. The company and town were given 60 and 30 days to pay their fines respectively.

Wednesday, December 1, 2010

Appeal of Wind Farm Approval in Chatham-Kent on the Environmental Registry

EBR Registry Number: 011-1039

Approval for a renewable energy project - EPA s.47.3(1)
Instrument Holder: Kent Breeze Corp. and MacLeod Windmill Project Inc.( Kent Breeze Wind Farms )
Instrument Issued by: Ministry of the Environment

Application for Appeal Initiated by:

Applicant Name:   Bill Wachsmuth

Decision under Appeal:
A Renewable Energy Approval issued to Kent Breeze Wind Farms, located in the Municipality of Chatham-Kent, for a Class 4 Wind facility consisting of eight wind turbine generators, each rated at 2.5 MW generating output capacity, with a total generation capacity of 20 MW.

Grounds for Appeal:
The Appellant is appealing the approval on the following grounds:
1. the lack of a Traffic Management Plan for the project, which was a condition of approval.

2. the proponent did not provide a plan for night lighting that will minimize the impacts on birds.

3. the turbines, which are not permitted to operate while under construction, should not be allowed to operate in foggy conditions once fully operational.
Read the Notice at: EBR Notice.