Ottawa, Ontario, June 21, 2007
PRESENT: The Honourable Madam Justice Heneghan
BETWEEN:
and
REASONS FOR ORDER AND ORDER
[1] Mr. Paul Saquet and his wife Mrs. Sonja Saquet (the “Appellants”) appeal from the decision of the Canadian Grain Commission (the “Commission”) dated September 2, 2005. In that decision, the Commission determined that ADM Agri-Industries Ltd. (the “Respondent”) did not violate section 61 or any other provision of the Canada Grain Act, R.S.C. 1985, c. G-10, as amended (the “Act”). Since the Commission found that the Respondent had not violated the Act, it declined to make an order under section 97 of the Act that compensation be paid to the Appellants.
[2] In this proceeding, which is a statutory appeal pursuant to section 101 of the Act, the Appellants seek an order that the Respondent be directed to pay to them the sum of $9,258.65, together with interest at a rate to be determined by this Court, and costs. Alternatively, the Appellants request an order returning the matter to the Commission with a directive that it be considered on the basis of such directions as may be made by this Court.
II. Background
[3] In its decision, the Commission set forth relevant facts that were undisputed by the parties. A re-statement of those facts follows.
[4] In July 2003, the Appellants arranged for the sale of a quantity of canola to the Respondent through an unlicensed grain broker, Crop-Tech Limited (“Crop-Tech”). Crop-Tech was owned and operated by Gerald Hodgson and his brother. The canola was delivered to the Respondent’s primary elevator at Carberry, Manitoba on July 16, 2003. The Respondent issued a grain receipt in the name of one of the producers, Mr. Paul Saquet.
[5] On the following day, July 17, 2003, the Respondent issued a cash purchase ticket (“CPT”) to the Appellant Paul Saquet, representing payment for the grain. The Appellant subsequently asked Gerald Hodgson to arrange for payment of the grain to be deferred until the next calendar year and gave him the CPT to return to the Respondent. Mr. Hodgson returned the CPT to the Respondent who voided that document and issued a new CPT payable to Mr. Hodgson personally.
[6] Mr. Hodgson then issued a cheque drawn on the account of Crop-Tech to the Appellant Paul Saquet. This cheque was post-dated to January 2, 2004. The Appellant placed the cheque in a credit union for safekeeping. When the credit union deposited the cheque to the Appellant’s account on January 2, 2004, it was returned marked “Non Sufficient Funds”. Crop-Tech was insolvent and eventually went into receivership. The Appellants did not receive payment for the quantity of grain that had been delivered in July 2003.
[7] In the proceedings before the Commission, the Appellants alleged that the Respondent had violated section 61 of the Act by issuing the new payment document to Mr. Hodgson and not to them or to one of them.
[8] Subsequently, the Appellants presented a claim to the Commission. By letter dated February 3, 2004, Mr. Bob Douglas, Assistant Commissioner, informed Mr. Fred Hodgkinson, Manager of Licensing with the Commission, that he had concluded that payment should be made to the Appellants by the licensee. Mr. Douglas expressed his conclusion as follows:
I believe that ADM Carberry [the licensee] should be held responsible for payment to Paul Saquet producer in the amount of $9,093.60 because he is clearly identified as the producer and no inquiry re payment or permission was granted to pay some one [sic] else. My recommendation is that ADM Carberry [the licensee] be judged to pay the out standing [sic] non payment of the producer.
[9]
Ultimately,
the matter was referred to the Commission. By letter dated April 21, 2005, Ms.
Valerie Gilroy, Legal Counsel and Secretary to the Commission, advised counsel
for the Appellants that the Commission had decided to hear the Appellants’
claim that the Licensee had violated section 61 of the Act thereby giving rise to
a claim for compensation pursuant to section 97 of that Act.
[10] The documentary evidence before the Commission consisted of the following:
1. Report of Mr. Bob Douglas dated February 3, 2004;
2. Correspondence from the Commission to the Appellants’ counsel dated April 21, 2004;
3. Correspondence dated May 16, 2004 from the Appellants to the Commission;
4. Correspondence dated May 17, 2004 from the Commission to the Appellants;
5. Correspondence dated May 21, 2004 from the Appellants to the Honourable Bob Seller, Minister of Agriculture and Agri-Food, Government of Canada;
6. Correspondence dated July 22, 2004 from the Commission to the Appellants;
7. Correspondence dated June 25, 2004 from the Appellants to the Commission;
8. Correspondence dated February 16, 2004 from the Appellants to the Honourable Andy Mitchell, Minister of Agriculture and Agri-Food, Government of Canada;
9. Correspondence dated May 6, 2005 from the Appellants to the Commission;
10. Correspondence dated May 9, 2005 from the Commission to the Appellants’ counsel;
11. Written submissions dated May 27, 2005, submitted to the Commission on behalf of the Appellants including Exhibits as follows:
a) Exhibit A, Bill of Lading, showing Paul Saquet as shipper, dated July 16, 2003;
b) Exhibit B, Grain Receipt issued to Paul Saquet by the Respondent dated July 17, 2003;
c) Exhibit C, CPT issued to Paul Saquet by the Respondent dated July 17, 2003;
d) Exhibit D, documents dated July 17, 2003, prepared by the Respondent, with a handwritten note saying “check [sic] cancelled and made payable to Gerald Hodgson on contract 050730”;
e) Exhibit E, CPT issued to Gerald Hodgson by the Respondent, dated July 18, 2003; and
f) Exhibit F, cheque dated January 2, 2004 issued by Crop-Tech to Paul Saquet.
12. Correspondence dated June 3, 2005 to the Commission from the Appellants’ counsel;
13. Written submissions dated June 29, 2005 submitted on behalf of the Respondent to the Commission;
14. Correspondence dated July 5, 2005 from Appellants’ counsel to the Commission;
15. Correspondence dated July 11, 2005 to the Commission from Appellants’ counsel;
16. Further written submissions dated July 11, 2005, filed by the Respondent;
17. Further written submissions dated July 13, 2005 filed on behalf of the Respondent;
18. Correspondence dated July 14, 2005 from Appellants’ counsel to the Commission;
19. Correspondence dated September 2, 2005 from the Commission to the Appellants’ counsel; and
20.
Correspondence
dated September 22, 2005 from Appellants’ counsel to the Commission and to the
Respondent’s counsel.
[11] The Commission addressed the interpretation of subsection 61(a) of the Act and referred to the decision of the Saskatchewan Court of Appeal in Saskatchewan Wheat Pool v. Feduk (2003), 232 Sask.R. 161 where the Court held that this legislative provision requires that a producer be paid. Upon the basis of the evidence and submissions before it, the Commission concluded that Mr. Gerald Hodgson was acting as agent for the Appellants in the present case. There was no basis for the payment of compensation by the Licensee to the Appellants pursuant to section 97 of the Act.
[12] In the proceedings before the Commission, the Appellants raised the issue of jurisdiction, alleging that the complaint had already been decided, as set out in the report from Mr. Hodgson dated February 3, 2004. The Appellants argued that the Commission was thus improperly re-opening the matter. The Respondent rejected this argument and characterized the previous decision as a “preliminary administrative determination”. It proceeded to address the merits of the Appellants’ claim, concluding that payment had been made to Mr. Hodgson as agent for the Appellants. Accordingly, the Licensee had not breached section 61 of the Act. There was no basis for an order for the payment of compensation by the Licensee, pursuant to section 97 to the Appellant.
[13] In this appeal, the Appellants raise the matter of interpretation of subsection 61(a) of the Act. Namely, does that provision require the Respondent, the Licensee of a primary elevator, to issue a CPT or elevator receipt in respect of grain only to the producer of such grain in the absence of specific statutory or other legal authority to make a payment otherwise than as directed by section 61(a)? The second issue raised by the Appellants is whether the Commission erred in concluding that Mr. Hodgson held the necessary apparent or ostensible authority as an agent to give instructions on behalf of the Appellants with respect to the second cheque.
[14] The Respondent begins its submissions by addressing the standard of review. Insofar as the interpretation of subsection 61(a) of the Act is concerned, it submits that the standard of correctness is applicable. With respect to the Commission’s finding that Mr. Hodgson had apparent authority to act on behalf of the Appellants, the Respondent argues that the applicable standard of review is reasonableness.
III. Discussion and Disposition
[15]
The
present matter is an appeal from a statutory board. The first matter to be
addressed is the applicable standard of review. This requires consideration of
the pragmatic and functional analysis as discussed in Pushpanathan v. Canada (Minister of Citizenship and
Immigration),
[1998] 1 S.C.R. 982. The four factors to be considered in such analysis are the
purpose of the legislation, the presence or absence of a privative clause, the
expertise of the tribunal and the nature of the question in issue.
[16] The purpose of the Act is to establish a Commission whose role is to regulate the grain industry in Canada, including the establishment of quality standards and control. The Commission is also authorized to conduct investigations relative to matters within its authority. The purpose of subsection 61(a) is to authorize payment to a producer for his crop.
[17] The Act contains no privative clause and accordingly, this factor is neutral with respect to the standard of review to be applied. In this regard, I refer to Pender Farms Limited v. Canada (Canadian Grain Commission) (2004), 252 F.T.R. 136.
[18]
With
respect to the factor of relative expertise, the interpretation of subsection
61(a) does not engage any particular expertise of the Commission. This factor
points to less deference to the Commission on the issue of statutory
interpretation.
[19] Finally, there is the nature of the question in issue. I agree with the submissions of the Respondent that the status of Mr. Hodgson as agent for the Appellants is a matter of mixed fact and law which attracts a higher degree of deference.
[20] On balance, I conclude that the appropriate standard of review with respect to the Commission’s decision on its interpretation of subsection 61(a) is that of correctness. Insofar as the Commission’s finding about the status of Mr. Hodgson as the Appellants’ agent is concerned, I conclude that the appropriate standard of review is reasonableness simpliciter.
[21]
The
question of whether the Commission erred in finding Mr. Hodgson was an agent
for the Appellants with the necessary apparent or ostensible authority to
receive payment for their canola crop is a question of mixed fact and law. Specifically,
the question requires the application of the principles of contract law,
specifically the law of agency, to the facts of the present case. A question of
mixed fact and law is generally reviewable upon the standard of reasonableness simpliciter.
[22] The first question is the scope of subsection 61(a) of the Act, which provides as follows:
|
61(a) Where grain is lawfully offered at a licensed primary elevator for sale or storage, other than for special binning,
(a) if the producer and the operator of the elevator agree as to the grade of the grain and the dockage, the operator shall, at the prescribed time and in the prescribed manner, issue a cash purchase ticket or elevator receipt stating the grade name, grade and dockage of the grain, and forthwith provide the producer with the cash purchase ticket or elevator receipt; …
|
61(a) Lorsqu’un producteur lui offre légalement du grain pour vente ou stockage, ailleurs qu’en cellule, l’exploitant d’une installation primaire agréée :
a) en cas d’accord, entre lui et le producteur, sur le grade du grain et les impuretés qu’il contient, établit, selon les modalités de temps et autres modalités réglementaires, un bon de paiement ou un récépissé faisant état du grade du grain, de son appellation de grade et des impuretés en question et le délivre sans délai au producteur; |
[23]
This
provision of the Act has been considered by this Court in Pioneer Grain
where Justice Snider found that section 61 requires a “licensed primary
elevator” to issue a CPT or elevator receipt if the producer and the
operator agree as to the grade and dockage of the grain. Possession of a CPT or
elevator receipt entitles the holder to payment upon presentation of the
CPT or elevator receipt. In the present case, the Commission determined that
payment had been properly made to the holder of the CPT, that is Mr. Hodgson,
because he was the agent of the Appellants. I am satisfied that the Board
correctly interpreted section 61 of the Act. The next question is whether the
Commission committed a reviewable error in reaching its conclusion as to the
status of Mr. Hodgson.
[24]
In Pioneer
Grain, the Court concluded that the principles of contract law, in that
case those relating to set-off, are available for the interpretation and
application of paragraph 61(a) of the Act. In the present case, the Commission
considered the principles of contract law relating to agency in finding that
payment had been lawfully made pursuant to paragraph 61(a) when Mr. Hodgson
received payment upon his presentation of the CPT.
[25]
The
written submissions of the Appellants make it clear that they challenge the
manner in which the Commission interpreted and applied the law “applicable to
actual, apparent and ostensible authority [of Mr. Hodgson] to act as an agent”.
[26]
An agency
relationship exists where an individual has the necessary authority to act on
behalf of a principal, pursuant to that principal’s express or implied consent.
The relevant principles of agency were summarized by the Saskatchewan Court of
Queen’s Bench in Fill-More Seeds Inc. v. Johnson (2004), 256 Sask. R. 58
(Sask.Q.B.), where the Court cited a definition of “agent” originally set-out
in Fowler v. Hollins (1872), L.R. 7 Q.B. 616 at 623:
... [I]s an agent employed to make bargains and contracts between other persons in matters of trade, commerce or navigation. Properly speaking, a broker is a mere negotiator between the other parties ... He himself ... has no possession of the goods, no power actual or legal of determining the destination of the goods, no power or authority to determine whether the goods belong to the buyer or seller or either ...
[27]
In the
present case, the Commission concluded, on the basis of the evidence before it,
that Mr. Hodgson had been authorized to act as an agent by the Appellants.
There is no transcript of the proceedings before the Commission but the parties
filed a Joint Appeal Book that contains the documentary evidence that was
before the Commission. There is no document appointing Mr. Hodgson as the agent
of the Appellants. However, there are four documents that are highly relevant,
in my opinion, to his status as determined by the Commission.
[28] These are the grain receipt issued by ADM Agri-Industries Ltd. in the name of “Paul Saquet” on July 17, 2003; Cheque No. 615016 issued by ADM Agri-Industries Company on July 17, 2003 payable to Paul Saquet and marked “void”; ADM Agri-Industries Company cheque No.
615030 payable to “Gerald Hodgson; and cheque No. 002451
from Crop-Tech Ltd. payable to Paul Saquet.
[29]
In
determining whether the licensee had complied with section 61 of the Act, the Commission
considered the above four documents in light of subsections 33(2) and 33(3) of
the Canada Grain Regulations, C.R.C. 1978, c. 889, as amended (the
“Regulations”). Subsections 33(2) and (3) of the Regulations provide as
follows:
|
(2) If grain is purchased by the operator of a licensed primary elevator, the operator shall issue a cash purchase ticket without delay after the grain is unloaded. (3) If grain is received for storage at a licensed primary elevator, the operator of the elevator shall issue a primary elevator receipt without delay after the grain is unloaded. |
(2) L'exploitant d'une installation primaire agréée qui achète du grain doit, dès son déchargement, délivrer un bon de paiement. (3) L'exploitant d'une installation primaire agréée doit, dès le déchargement du grain qui y est livré pour stockage, délivrer un récépissé d'installation primaire. |
[30]
The Commission
found that the regulatory requirements had been satisfied upon the issuance of
a grain receipt in the name of Paul Saquet upon delivery of the grain. The
Appellants directed Mr. Hodgson to return the CPT and to exchange it for a
post-dated CPT. It is reasonable to conclude from the Appellants’ actions in
these two respects that they had authorized Mr. Hodgson to act on their behalf.
What appears to be at issue here is the extent of his authority.
[31]
The
Commission concluded that Mr. Hodgson was acting within his apparent and
ostensible authority when he requested the payment for the grain to be made to
him, by means of a cheque in his name, rather than in the Appellants’ names.
[32]
The
Commission’s finding with respect to the apparent authority of Mr. Hodgson to
instruct the Respondent to make payment directly to him is reviewable on the
standard of reasonableness simpliciter since it involves elements of
both fact and law.
[33] The scope of an agent’s apparent authority with respect to third parties was discussed in Scherer v. Paletta (1966), 57 D.L.R. (2d) 532 (Ont. C.A.) where the Court said the following at page 534:
Where a principal gives an agent general authority to conduct any business on his behalf, he is bound as regards third persons by every act done by the agent which is incidental to the ordinary course of such business or which falls within the apparent scope of the agent’s authority. As between principal and agent, the authority may be limited by agreement or special instructions but as regards third parties the authority which the agent has is that which he is reasonably believed to have, having regard to all the circumstances and which is reasonably to be gathered from the nature of his employment and duties. The scope of authority is, therefore, largely governed by the class of agent employed provided that he is acting within the limit of his ordinary avocation or by relation of the agent to the principal or by the customs of the particular trade or profession.
[34]
I am
satisfied that the Commission’s finding that Mr. Hodgson was an agent for the
Appellants, with apparent authority to request payment from the Respondent, was
reasonable having regard to the evidence before the Commission. It was open to
the Commission to find that Mr. Hodgson had acted within his authority as an
agent given that the Appellants acknowledged that they had granted him some
degree of authority and had not advised the Respondent that he had exceeded his
authority in issuing a post-dated Crop-Tech cheque. Indeed, the Appellants
raised no complaint about the delivery of payment to Mr. Hodgson and their
receipt of a cheque from him until the cheque was refused payment on the basis
of insufficient funds to cover payment. Further, the Appellants did not submit
evidence regarding any particular characteristics of agency relationships in
the grain industry that would render the Commission’s finding unreasonable.
[35] In the result there is no basis for judicial intervention and the appeal is dismissed.
ORDER
The appeal is dismissed with costs.
“E. Heneghan”
Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1599-05
STYLE OF CAUSE: Sonja Saquet and Paul Saquet and ADM Agri-Industries Ltd.
PLACE OF HEARING: Winnipeg, Manitoba
DATE OF HEARING: February 19, 2007
APPEARANCES:
|
Mr. A. Bruun
|
|
|
Ms. L.M. Stuhldreier
|
SOLICITORS OF RECORD:
|
Campbell, Marr LLP Winnipeg, Manitoba
|
FOR THE APPLICANTS |
|
Aikins, MacAulay & Thorvaldson LLP Winnipeg, Manitoba |
FOR THE RESPONDENT |