Costs: clear cases only – an award of costs is in the discretion of the judge or the administrative tribunal that makes the award, and appellate courts will only interfere if there has been an error of principle, or the award of costs is plainly wrong

Administrative law – Decisions reviewed – Farm Practices Board – Bias – Costs – Judicial review – Legislative compliance – Standard of review – Correctness

Dell v. Zeifman Partners Inc., [2020] O.J. No. 2783, 2020 ONSC 3881, Ontario Superior Court of Justice, June 23, 2020, K.E. Swinton, N.L. Backhouse and F. Kristjanson JJ.

Appeal from a decision of the Normal Farm Practices Protection Board (Board) denying the appellants’ claim for costs. The Board established a statutory scheme to shield farmers from liability in nuisance for disturbances caused by normal farm practices. The proceeding before the Board related to a greenhouse site that had been operated by Vandermeer Greenhouses (Vandermeer). In 2009, Vandermeer installed an alternative energy system called an “anaerobic digester.” Biogas produced by the digester was used to run a large generator that heated water to heat the greenhouses. After the digester commenced operation, nearby residents reported disturbance from offensive odours and an extreme increase in the number of flies. Vandermeer entered into bankruptcy proceedings in 2014 and a Receiver was appointed. The appellants resided near the Vandermeer property. They commenced an application under s. 5(1) of the Farming and Food Production Protection Act, arguing that the waste disposal and alternative energy facility operated by the Receiver seriously disturbed their enjoyment of their properties and was not a normal farm practice. The property was sold in July 2016. Motions were brought by the appellants to add the purchaser and for disclosure. In November 2018, the Board found in favour of certain of the appellants and ordered that the digester be shut down. The appellants sought substantial costs based on the conduct of the Receiver. The Board declined to award costs to the appellants. The appellants appealed the failure of the Board to award costs.

The Board had limited authority to award costs. The Board gave logical reasons for denying costs in relation to each of the claims of unreasonable conduct alleged against the Receiver. The Board found one instance of bad faith in the Receiver’s failure to disclose the sale of the property. However, the Board found that the appellants knew the property was being sold and chose to continue with the application. The appellants failed to show that there was a reasonable apprehension of bias by the Board. The Board applied the proper test for awarding costs in accordance with its rules. It was in the best position to determine whether the parties had acted in bad faith or unreasonably. It determined that both parties had acted unreasonably, and that there should be no award of costs. The appellants failed to demonstrate any error in principle by the Board, or show that the decision to refuse to order costs was plainly wrong.

This case was digested by Mollie A. Clark, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter.  If you would like to discuss this case further, please contact Mollie A. Clark at mclark@harpergrey.com.

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