Reasonable Apprehension of Bias Strikes Farm Tribunal

AS PREVIOUSLY PUBLISHED IN THE RURAL VOICE:

Courts and tribunals in Canada are to be held to the highest standards of impartiality.  This is not just a matter of decision makers subjectively acting fairly and impartially (i.e. actually being fair and impartial) but just as importantly a matter of fairness and impartiality being demonstrated to the public.  As articulated by the English Chief Justice Lord Hewitt: “[it] is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done.”  A hearing will be unfair, and justice will not be seen to be done, if the words or actions of the decision maker give rise to a “reasonable apprehension of bias” to the “informed and reasonable observer”.  Decision makers must be fair and impartial and must also appear to be fair and impartial.  If there is an appearance of bias, then the decision maker is subject to review.

Impartiality has been described by the Supreme Court of Canada as “a state of mind in which the adjudicator is disinterested in the outcome, and is open to persuasion by the evidence and submissions.”  Bias is the opposite: “a state of mind that is in some way predisposed to a particular result, or that is closed with regard to the particular issues.”  The words or actions of a decision maker will give rise to a reasonable apprehension of bias where “an informed person, viewing the matter realistically and practically – and having thought the matter through” would conclude that the decision maker was not impartial.  That “informed person” must have knowledge of all relevant circumstances, including “the social reality that forms the background to a particular case”, and must have more than a “mere suspicion” of impartiality.  The threshold for finding actual or perceived bias is high because it calls into a question an element of judicial integrity.

Reasonable apprehension of bias became an issue recently in a matter before the Normal Farm Practices Protection Board (the “NFPPB”).  The NFPPB is a tribunal with the power “to inquire into and resolve a dispute respecting an agricultural operation and to determine what constitutes a normal farm practice” and “to make the necessary inquiries and orders to ensure compliance with its decisions.”  A person directly affected by a disturbance from an agricultural operation can apply to the Board for a determination “as to whether the disturbance results from a normal farm practice.”  Farmers directly affected by a municipal by-law or “persons who want to engage in a normal farm practice as part of an agricultural operation on land in the municipality and have demonstrable plans for it” can apply to the Board for a determination “as to whether a practice is a normal farm practice for purposes of the non-application of a municipal by-law.”

Following a seven-day hearing in 2022, the NFPPB dismissed an application made by cottage owners who complained of nuisances caused by a neighbouring farm operation.  The Applicants alleged improper storage of manure, an increase in manure odour and flies as a result of the farm’s damage to and/or removal of hedgerows and other vegetative buffers, nuisance caused by manure laden dust, and odour and flies caused by deadstock disposal.  The respondent farm had been operating in the same location for 50 years and the NFPPB noted that the cow calf farm was operated using practices similar to other cow calf operations.  The NFPPB dismissed the application on the basis that the Applicants did not show “substantial interference and discomfort which would not be tolerated by the ordinary occupier in their location” and did not demonstrate “unreasonable interference with the use and enjoyment of the Applicants’ land.”

The respondent farm applied for a costs award against the unsuccessful applicants, arguing that the application was “frivolous and/or vexatious”.  The NFPPB agreed that the application was frivolous because, while the Applicants alleged that the respondent farm had altered its practices intentionally to aggrieve the Applicants, the NFPPB determined that the respondent farm’s operations were “normal farm practices”.  The NFPPB also took note of the fact that the Applicants were pursuing other legal actions against the respondent farm outside of the NFPPB process, that the Applicants had raised a multitude of issues without presenting evidence on particular issues, and that the Applicants had through their conduct throughout the proceedings attempted to malign and vilify the respondent farm.  In the end, the NFPPB ordered that the Applicants pay the respondent farm $40,000 in costs.

The Applicants requested a review of the decision on costs, both on the issue of the amount of the costs awarded and on the issue of reasonable apprehension of bias.  On the latter issue, the Applicants raised a concern about the appearance of a conflict of interest on the part of one of the three members of the NFPPB panel who heard the application and delivered the decision on costs.  It turned out that one of the panel members had sat as an adjudicator on a panel of the Agriculture, Food and Rural Affairs Appeal Tribunal (“AFRAAT”) that also included as a member a senior partner in the law firm representing the respondent farm in the NFPPB proceeding.  That AFRAAT proceeding was taking place at or around the very same time as the NFPPB hearing in 2022. 

The NFPPB Vice-Chair considering the review request determined that an appearance of bias did result from the fact that one of the NFPPB panelists had sat on another tribunal panel with a lawyer who indirectly was the lawyer for the respondent farm (that is, the respondent farm was technically a client of the lawyer’s law firm and, therefore, of the lawyer himself).  The Vice-Chair concluded: “When viewed from that perspective, an informed reasonable person viewing the matter realistically and practically, would conclude that the decision maker whether consciously or unconsciously would not decide fairly. There is the appearance of bias at the original hearing that would continue to exist for the subsequent costs decision.”  The Vice-Chair ordered a re-hearing on costs before a full panel of the NFPPB.

Read the decision at: 2023 ONNFPPB 3 (CanLII).

 

“Farm land used only for farm purposes” or just a “hobby farm”?

AS PREVIOUSLY PUBLISHED IN THE RURAL VOICE:

According to the Assessment Act (the “Act”), the legislation that governs property taxation in Ontario, the Assessment Review Board (the “ARB”) has authority to determine whether lands are “farm lands used only for farm purposes by the owner” for purposes of valuing property.  Section 19(5) of the Act provides that in valuing “farm lands used only for farm purposes by the owner”, consideration must be given to the current value of lands and buildings for farm purposes only (i.e. not their value for any other purpose) and consideration must not be given to any sales of lands and buildings to “persons whose principal occupation is other than farming”.  Generally, lands valued as “farm lands” will be assessed a lower value for property tax purposes than lands valued as residential, commercial or industrial lands because of the restrictions in Section 19(5).

The ARB has previously identified several factors to be considered in determining whether lands are “farm lands”, including: physical characteristics of the land, including soil quality and its capacity to support crops if the activity is raising crops; use of surrounding lands, to the extent that activities in the immediate vicinity suggest that the land on the property will support a farming activity; the history of the use of the property, including whether the land has previously been farmed; whether activities on the land are undertaken with a legitimate intention to “farm”, as opposed to activities intended to create the appearance of “farming” for purposes of obtaining favourable tax treatment; the scale of the farming activity in the sense that the activity must not be too limited to indicate that farming is taking place; permitted use of the land, including zoning; the general nature of the locality; whether the lands have physical characteristics of a farm; and, whether the lands involve a bona fide farmer.  The ARB’s focus is on the use of the land – a factual issue to be decided on a case-by-case basis.

The ARB recently considered an appeal by a landowner in the Kingston, Ontario area who claimed a reduction in the assessed value of his property because it should be considered “farm lands used only for farm purposes”.   The subject property was assessed at $428,000, with $121,500 apportioned to “Conservation Lands” and $306,500 apportioned to lands in the “Residential” property class.  The appellant landowner also contended that the property should be classified in the “Farm property class”.  In response to the appeal, the Municipal Property Assessment Corporation (“MPAC”) took the position that the subject property was properly classified as a combination of “Conservation Lands” and “Residential” lands, but offered that the proper value to be assessed was $368,000.  The appellant landowner agreed with this proposed value.

It should be noted that while the ARB has authority to determine whether lands are “farm lands” for purposes of assessing the value of the lands, it does not have authority to classify lands as “farm lands”.  The General Regulation made under the Act says that, where the ARB has determined the value of “farm lands used only for farm purposes” but there is still a question as to whether the lands should be included in the “Farm property class”, the ARB must refer the question to the Agriculture, Food and Rural Affairs Appeal Tribunal.  So, in this particular appeal proceeding before the ARB, there was the odd circumstance of two parties who agreed on the number to be decided (the practical issue that the ARB did have authority to determine) but disagreed on how to get to the number.  

Although the ARB could not determine the property classification issue, it did proceed to determine that the appellant’s lands were “farm lands used only for farm purposes by the owner”.  The subject property was over 90 acres in size, with a one-storey single family detached residence built in 1981 and outbuildings including a barn and goat pen.  The appellant landowner testified that he used roughly 80 acres for farm activity, including some of the lands classified as “Conservation Lands”.  He cited activities such as: renting part of the property for horse grazing and boarding; gathering and processing maple sap from trees on the property; keeping laying hens and selling their eggs for cash; raising and harvesting goats; raising and harvesting cattle; clearing pasture land; adding new fences and gates; etc.

MPAC’s assessor testified that he saw four cattle, two goats and 40 chickens onsite when he visited the farm.  MPAC submitted that the appellant’s activities did not constitute a bona fide farm operation but only a small hobby farm.  However, the appellant’s evidence about his activities on the property was uncontested and the ARB accepted that, while the appellant’s operation was small, it was still farming: growing hay, using pasture to raise livestock; harvesting livestock; and, selling eggs.  The ARB rejected MPAC’s argument that the subject property was a “hobby farm” and could not qualify as “farm land used only for farm purposes”.  The ARB concluded:

“The Board finds that the term “hobby farm” is imprecise in this instance, and the exact parameters of what constitutes a “hobby farm” as compared to “farm land used only for farm purposes” is unclear in the evidence and submissions before the Board.  No single factor is determinative of whether a property is, or is not, farm lands used only for farm purposes.  Taking a purposive approach to interpreting s. 19(5), considering the entirety of the evidence, and weighing the factors … above, the Board finds that a portion of the Subject Property is farm lands used only for farm purposes within the meaning of s. 19(5) of the Act.”

Read the decision at: 2023 CanLII 39089 (ON ARB)

The dangers of insufficient depth of cover over pipelines

AS PREVIOUSLY PUBLISHED IN THE RURAL VOICE:

At one time, oil and gas pipelines in Canada were installed with as little as two feet of depth of cover – maybe less.  Although the minimum depth of cover required over new pipelines as set out in the applicable CSA Standard Z662 remains two feet, companies today routinely install pipelines with four feet depth of cover or more.  However, a major deficiency in the depth of cover standard has been the absence of a requirement to maintain depth of cover over pipelines to any specified minimum.  A pipeline may be sufficiently deep at installation to ensure the safety of those using the land above the line, but what if depth of cover erodes over time?

Thousands of kilometres of oil and gas pipelines run beneath agricultural land across Canada with ever larger and larger farm equipment tilling, planting, spraying, fertilizing and harvesting above.  Pipelines lying four feet or more beneath the surface may be unlikely to pose a risk of danger to agricultural operations above, but what of pipelines only two feet beneath the surface?  What if the ground above a pipeline installed long ago with two feet depth of cover has eroded by water or wind or been displaced by decades of tillage?

In Ontario, the CSA standard for depth of cover has been modified by regulation to include the following requirements:

10.6.5.5

Operating companies shall develop written procedures for periodically determining the depth of cover for pipelines operated over 30% of SMYS of the pipe at MOP. Such written procedures shall include a rationale for the frequency selected for such depth determinations. Where the depth of cover is found to be less than 60 cm in lands being used for agriculture, an engineering assessment shall be done in accordance with clause 3.3 and a suitable mitigation plan shall be developed and implemented to ensure the pipeline is adequately protected from hazards.

Where a pipeline company determines that the current depth of cover over a pipeline is less than 60 cm (2 feet), the company must perform an engineering assessment and develop a “suitable” mitigation plan to ensure the pipeline is adequately protected.  The company is required to have written procedures for “periodically” determining the depth of cover over its pipelines.  What passes for “suitable” in a mitigation plan or “periodically” in monitoring depth of cover over pipelines is not prescribed by the CSA standard or the Ontario regulation.

Are the current requirements for monitoring depth of cover and addressing instances of insufficient depth of cover enough to protect those carrying out agricultural operations and other activities above pipelines?  A recent incident suggests pipeline landowners may have cause for concern.

The Transportation Safety Board of Canada (“TSB”) has released a report of its investigation of an October, 2021 natural gas pipeline rupture in Manitoba caused when a farmer struck the line with a ground-scraping blade.  The strike happened in an agricultural field in a rural area in southwestern Manitoba near the Saskatchewan border.  To the east of the pipeline that runs through the field, there is a drainage channel running almost perpendicularly to the pipeline.  The channel crosses over the line and drains into a small marsh area.  At the time of the strike, the farmer was pulling an 18-foot-wide landleveller/scraper with a large articulated four-wheel-drive tractor to scrape weeds and silt from the bottom of the drainage ditch.  The blade was in a “flat position”, which has a maximum blade depth of just 26 cm (less than 2 feet) according to the manufacturer of the implement.  The farmer had carried out the same scraping process periodically for several decades prior to the pipeline strike.  It was determined that, at the time of the strike, the ground-scraping blade was penetrating the ground less than 12 cm (less than 5 inches).

The regulation in place at the time the pipeline was installed in 1960 required that it be buried to a depth of at least 61 cm.  Obviously, the depth over the line had diminished considerably since the time of construction at least in the location of the strike.  The company responsible for the pipeline conducts annual right-of-way inspections, but had not noted any unsafe conditions at the occurrence location.  The last depth of cover survey conducted by the company was in 2009, with the closest identified issue being about 700 metres upstream of the occurrence location.  The 2009 survey involved taking depth measurements at 25 m spacing generally, at 3 m spacing across sloughs, depressions or abrupt changes in elevation, and at all key features such as the bottom of ditches, drains and streams.  The measurement taken closest to the site of the 2021 pipeline strike was 4.5 metres downstream of the site.  As depth of cover at that location was 88 cm (approximately 2.9 feet), a more detailed assessment of the area was not triggered.

The TSB concluded that the October, 2021 pipeline strike and rupture was caused in part because the pipeline company did not identify that the depth of cover over its pipeline had been gradually reduced through the removal of weeds and silt from the drainage ditch over time.  The TSB warned that: “If a pipeline company’s damage prevention program does not consider variations in a pipeline’s depth of cover over time, depth of cover reductions may go unmitigated, increasing the risk of pipe damage due to agricultural activities.”

Read the TSB Report at: P21H0143.