Date: 20061215
Docket: P-9-92
Citation: 2006 FC 1506
AN APPEAL TO THE ASSESSOR
PURSUANT TO THE HEALTH OF
ANIMALS ACT
Ottawa, Ontario, December 15, 2006
PRESENT: The Honourable Mr. Justice Kelen,
Deputy Assessor
BETWEEN:
TERRY
KRESHEWSKI
Appellant
and
THE MINISTER OF AGRICULTURE OF
CANADA
Respondent
REASONS FOR ASSESSMENT AND ASSESSMENT
[1]
This is an appeal to the Assessor under section
56 of the Health of Animals Act, S.C. 1990, c. 21 (Act) from a decision
of the Minister of Agriculture compensating the appellant for cattle and sheep ordered
destroyed by the respondent. The ground of the appeal is that the amount
awarded to the appellant was unreasonable.
Facts
[2]
On November 5, 1991, the respondent ordered that
the appellant’s cattle and sheep be destroyed in accordance with section 48 of
the Health of Animals Act. The animals were found to be exposed to
tuberculosis.
[3]
The appellant, Mr. Terry Kreshewski is a beef
producer in Rossburn, Manitoba. In 1991, the following animals were destroyed as a result of
exposure to tuberculosis: 54 beef cows; 3 beef bulls; 57 young beef cows or
heifers; 2 sheep; and 38 young beef cows or heifers which he shared with his
neighbour Mr. Burt Frieze and which were looked after by Mr. Kreshewski on his
farm.
Compensation
[4]
Pursuant to paragraph 51(1)(a) of the Act, the
respondent compensated the appellant for the destruction of his animals and the
animals which he shared with Burt Frieze. The compensation paid was in the
approximate amount of $110,000. The respondent provided a Declaration of
Infected Place and Award of Compensation certifying that tuberculosis as found
or suspected to exist in the appellant’s cattle and sheep, for which compensation
was paid accordingly.
Relevant Legislation
[5]
The legislation relevant to this appeal is:
1. Health
of Animals Act, S.C. 1990, c. 21 (Act); and
2. Maximum
Amounts for Destroyed Animals Regulations, SOR/91-222 (Regulations).
The relevant excerpts of these authorities
are set out in Appendix “A” following these reasons.
Issues
[6]
The only issue in this appeal is whether the amount
awarded to the appellant for his animals was unreasonable.
Analysis
[7]
Subsection 56(1) of the Act provides that the grounds
of appeal to the Assessor are “that the failure to award compensation was
unreasonable or that the amount awarded was unreasonable.” In this case, the
decision being appealed was one in which the appellant was compensated.
Therefore, the ground of appeal is whether the amount of compensation paid for the
cattle and sheep was unreasonable.
Appellant’s Position
[8]
The appellant submits that the amount he was
compensated was unreasonable. He argues that he cannot replace his herd with cattle
of equal quality with the amount of compensation he received.
[9]
The appellant also argues that the calves which
were ordered destroyed would normally have been fed to slaughter weight. The
appellant therefore argues that he lost the added value the cattle would have
had if the respondent had not ordered the early slaughter of his cattle.
[10]
The appellant seeks compensation for costs of
maintaining the quarantine ordered by the respondent. This is the cost of
preparing a double fence in the pasture to keep the quarantined animals, extra
manpower to maintain the quarantine, the building of a corral to round-up the
cattle, the trucking to bring the cattle home, and the hiring of a CAT to clear
the fence-line. These expenses related to the cost of maintaining the
quarantine total $4,200. The appellant also seeks compensation for the cost of
cleaning-up and disinfecting his facilities after the diseased cattle were
destroyed. These costs total $1,600.
Respondent’s Position
[11]
The respondent argues that compensation was paid
to the appellant in respect of the cattle and sheep either at market value or pursuant
to the maximum amounts provided under the Maximum Amounts for Destroyed
Animals Regulations (the 1991 Regulations).
[12]
In a letter dated February 27, 1992, Dr.
Luterbach, a Regional Veterinary Supervisor, described the method used by the
respondent in determining the compensation payable to the appellant:
In
the case of cattle Tuberculosis,
Canada has a test and slaughter policy. This means that all test positive
cattle are destroyed along with all herd mates which are deemed to have been
exposed to infected animals.
Compensation
is paid for all cattle destroyed at “market value” to a ceiling of “maximum
limits”.
In
the case of all the above livestock producers, the evaluation process was the
same. A “team approach” was taken. [Agriculture] Canada used Livestock Markets Information Officer, the local District
Veterinarian (Animal Health), and myself the Regional Veterinary Supervisor
(Animal Health). The producer was invited to secure evaluation expertise. In
the case of Bartkiw and Baker, an external purebred breed representative was
consulted to establish “fair market value”. A livestock auction mart
owner/buyer also assisted Bartkiw. The owners of the livestock were
knowledgeable and most had previous sales receipts to support their
expectations.
The
Livestock Markets Information Officer has years of daily experience at the
sales ring, witnessing the price paid for class of animal. He also had weekly
market reports from all the weeks of the fall at all the markets in Manitoba. Reports were also used from
special bred cow sales to establish the cow prices. More commonly the market
sales consist of cattle going for fattening or immediate slaughter for meat.
The
livestock were either evaluated individually or grouped into similars by age,
class, type, sex, and weight. For example a feeder calf has a different market
price per pound based upon weight range (100 lb increments), whether it is a
steer or a heifer, age and type (traditional British versus Exotic breeds –
reflects growth rate and finish weight potential).
The
appropriate price (we used best market price not average market price of non
diseased animals) is multiplied by estimated weight (we were generous with the
weight because none of the producers had a livestock scale) and recorded an
individual amount corresponding to a permanent eartag applied by [Agriculture] Canada. In the case of animals where the
price exceeded the maximums allowed by the Health of Animals Act and
Regulations, the maximum price was recorded.
One
does not know what is the fair market value of diseased animals (if one could
sell them on the open market) but the salvage price for those exposed but
not diseased animals at slaughter was about 30% of full market value. The 70%
was absorbed by [Agriculture] Canada as part of the compensation.
It
was my opinion that the open market prices of livestock below the maximums were
not a concern, but those which exceeded the maximum were. It was explained to
all concerned that the maximums can not be exceeded by the powers of the Act
and Regulations.
Other
costs compensatable [sic] were the slaughter charges, transportation of
livestock to the packing plant and cleansing and disinfecting of the
transporting trucks.
All
other costs such as loss of income and cleaning and disinfecting the farm, etc.
are not compensatable [sic].
[Emphasis added]
The Witnesses
[13]
The evidence before the Assessor was given
orally. The appellant testified as his only witness, and the respondent called three
witnesses. The witnesses for the respondent were:
1.
Dr.
Brian Manns, District Veterinarian for the Canadian Food Inspection Agency;
2.
Mr.
Harold Boutlier, Livestock Market Information Officer for Manitoba; and
3.
Dr.
G.W. Luterbach, Regional Veterinarian for Agriculture Canada.
The market value for cattle
[14]
Under subsection 51(2) of the Health of
Animals Act, the amount of compensation which the Minister may order be
paid to the owner of an animal that is destroyed under the Act is the market
value that the animal would have had at the time of its destruction, subject to
any maximum amount referred to in subsection 51(3).
[15]
During the hearing, there was some confusion
between the parties as to the number of the appellant’s cattle ordered
destroyed. In addition to the appellant’s own cattle, the appellant also
maintained cattle shared between him and another farmer, Bert Frieze. The
appellant advised, however, that he does not take issue with the number of
animals for which he was compensated. Rather, he seeks a reassessment of the
amount of compensation awarded to him for those animals.
[16]
Several of the appellant’s cattle were
compensated at the maximum amount provided under the 1991 Regulations, which
was $1,500 for a purebred cow and $1,000 for a grade cow. The appellant led
evidence indicating that the maximum amounts provided under the 1991 Regulations
did not reflect the true market value of the animals. The Manitoba Cattle
Producers Association made submissions to the Minister on behalf of the
appellant and other cattle producers whose herds were ordered destroyed as a
result of the tuberculosis outbreak. The Association complained about the
maximum amount of $1,000 for grade cattle, which were valued in the range of
$1,200 to $1,500.
[17]
The Association’s lobbying efforts were in vain.
However, the Regulations were amended in 1992 to provide for a maximum of
$1,500 of compensation for grade cattle and $2,000 for purebred cattle. The Regulations
were further amended in 2001 to provide a maximum of $2,500 for cattle
regardless of their purebred status. As I indicated during the hearing, I must
apply the law that was in effect at the time the cattle were ordered destroyed
in accordance with the Act. Accordingly, I cannot require the Minister to
increase the amount of compensation awarded to the appellant in respect of
those animals for which the appellant received the maximum amount payable under
the 1991 Regulations.
[18]
With respect to the remaining cattle for which
the appellant was awarded less than the maximum amount, I have considered
carefully the evidence presented during the hearing concerning the manner in
which the respondent assessed the market value of the appellant’s cattle.
[19]
Mr. Boutlier, the Livestock Market Information
Officer for Manitoba at the
time of the award, testified as to the process by which he estimated the weight
of each cow and assessed its market value. He testified that, based on
information gathered in the course of attending weekly local cattle auctions,
he had compiled statistics for each type of cow including the appropriate value
per pound or total value. Mr Boutlier, who is now retired, presented as a
conscientious public servant; I accept his evidence as thorough, credible and
trustworthy.
[20]
For each of the appellant’s cattle whose value
did not obviously exceed the maximum amount under the 1991 Regulations, Mr.
Boutlier estimated the cow’s weight and assessed its market value based on the
statistical auction information he had compiled. Instead of assessing the
average price paid at auction, the appellant’s cattle were assigned a premium
rate equal to the highest price paid per pound in the open market.
[21]
The on-site assessment did not, however, include
the use of a certified scale. The witnesses described concerns about
contamination which might result from such a practice. While the absence of a
scale concerns me, I am satisfied that Mr. Boutlier’s estimation of each cow’s
weight was reliable. He has considerable experience with cattle and was
accustomed to estimating weight. He also described applying “liberal” estimates,
and I accept that any margin of error would likely have been applied in the
appellant’s favour. Moreover, the appellant was advised of the opportunity to
retain an independent valuator, at the respondent’s expense, to be present
during the assessment of the appellant’s cattle. The appellant did not avail
himself of this opportunity. Based on the evidence, I cannot conclude that the
respondent’s determination of the market value of the appellant’s cattle was
unreasonable.
Quarantine, clean-up and disinfection costs
[22]
The appellant also seeks compensation for the costs
he incurred in maintaining the quarantine, including the installation of double
fencing, clean-up and disinfection of his farm. As discussed above, costs for
maintaining the quarantine totalled $4,200 and the cost for the clean-up and
disinfection totalled $1,600. All of these costs are real costs to the
appellant. However, the law does not provide authorization to the Minister to
compensate cattle producers for the very real costs incurred in the course of
maintaining quarantine and undertaking the clean-up and disinfection. Instead,
these costs are to be assumed by the farmers whose cattle were quarantined
and/or ordered destroyed to protect public health.
[23]
As part of the Manitoba Cattle Producers
Association’s petition to the Minister, the Association noted the “huge” costs
incurred by cattle producers to disinfect and clean up their beef facilities so
they could be removed from quarantine. Apparently one minister promised
compensation, but a subsequent minister declined to do so. As a result, the Manitoba cattle producers affected by the
1991 outbreak did not receive an ex gratia payment for these expenses.
[24]
Mr. Kreshewski, like other cattle producers, is
naturally very upset that the amount of compensation he received did not
represent his true loss. However, as I indicated during the hearing, I am bound
to apply the law as it applied at the time the award was made. Thus, there is
no legal basis on which I can order the Minister to compensate the appellant
for these expenses. I must therefore dismiss this appeal. In Vanderwees
Poultry Farm v. Canada (Minister of Agriculture), [ 1993]
F.C.J. No. 583. Mr. Justice Rothstein (as he then was) acting as an Assessor
under the Health of Animals Act made some strong statements about the
manifest unfairness of the law regarding compensation for farmers in cases such
as Mr. Kreshewski. Justice Rothstein held at paragraph 35 that the Health of
Animals Act does not allow compensation to be paid when quarantine is
ordered even though the farmer is entirely innocent and is a victim of a
necessary, but damaging quarantine order. Justice Rothstein held at paragraph
35:
It
seems to me to be manifestly unjust that an innocent party must bear the loss
in such circumstances. The quarantine order was issued to protect the public. To
my mind it follows logically, if not legally, that the public should pay for
the cost associated with such protection. Nonetheless, I acknowledge that the
Act (Health of Animals Act) does not empower me to order compensation.
[25]
While the circumstances in the Vanderwees
Poultry Farm case were different than Mr. Kreshewski’s, the same principle of
fairness applies. Until the law is changed, an Assessor under the Health of
Animals Act cannot order compensation be paid for these expenses.
ASSESSMENT
THE ASSESSOR HEREBY ORDERS
THAT:
- This appeal is dismissed;
and
- The parties shall
pay their own costs.
“Michael A. Kelen”
RELEVANT LEGISLATION
1. Health
of Animals Act, S.C. 1990, c. 21 [in effect November 5, 1991]
|
DISPOSAL
AND TREATMENT
Disposal
of affected or contaminated
animals
and things
48.
(1) The Minister may dispose of an animal or thing, or require its owner or
any person having the possession, care or control of it to dispose of it,
where the animal or thing
(a) is, or is suspected of being,
affected or contaminated by a disease or toxic substance;
(b) has been in contact with or in
close proximity to another animal or thing that was, or is suspected of
having been, affected or contaminated by a disease or toxic substance at the
time of contact or close proximity; or
(c) is, or is suspected of being, a
vector, the causative agent of a disease or a toxic substance. […]
COMPENSATION
Compensation
to owners of animals
51.
(1) The Minister may order compensation to be paid to the owner of an animal
that is
(a) destroyed under this Act or is
required by an inspector or officer to be destroyed under this Act and dies
after the requirement is imposed but before being destroyed;
(b) injured in the course of being
tested, treated or identified under this Act by an inspector or officer and
dies, or is required to be destroyed, as a result of the injury; or
(c) reserved for experimentation under
paragraph 13(2)(a).
Amount
of compensation
(2)
Subject to subsections (3) and (4), the amount of compensation shall be
(a) the market value, as determined by
the Minister, that the animal would have had at the time of its evaluation by
the Minister if it had not been required to be destroyed
minus
(b) the value of its carcass, as
determined by the Minister.
Maximum
value
(3)
The value mentioned in paragraph (2)(a) shall not exceed any maximum amount
established with respect to the animal by or under the regulations.
Additional
compensation
(4)
In addition to the amount calculated under subsection (2), compensation may
include such costs related to the disposal of the animal as are permitted by
the regulations.
[…]
Regulations
55.
The Minister may make regulations
(a) respecting the method of
calculating the market value of animals for which the Minister considers
there is no readily available market;
(b) establishing maximum amounts, or
the manner of calculating maximum amounts, for the purpose of subsection
51(3); and
(c) permitting compensation for any
costs related to the disposal of animals and things and for determining the
amounts of the compensable costs, including prescribing maximum amounts.
Appeal
56.
(1) A person who claims compensation and is dissatisfied with the Minister's
disposition of the claim may bring an appeal to the Assessor, but the only
grounds of appeal are that the failure to award compensation was unreasonable
or that the amount awarded was unreasonable.
[…]
Powers
of Assessor
57.
(1) On hearing an appeal, the Assessor may confirm or vary the Minister's
disposition of the claim or refer the matter back to the Minister for such
further action as the Assessor may direct.
Costs
(2)
Costs may be awarded to or against the Minister in an appeal.
Decisions
final
(3)
The decision of the Assessor on an appeal is final and conclusive and not
subject to appeal to or review by any court.
|
ISPOSITION ET TRAITEMENT
Mesures de disposition
48. (1) Le ministre peut prendre toute
mesure de disposition, notamment de destruction, - ou ordonner à leur
propriétaire, ou à la personne qui en a la possession, la responsabilité ou
la charge des soins, de le faire - à l'égard des animaux ou choses qui:
a) soit sont contaminés par
une maladie ou une substance toxique, ou soupçonnés de l'être;
b) soit ont été en contact
avec des animaux ou choses de la catégorie visée à l'alinéa a) ou se sont
trouvés dans leur voisinage immédiat;
c) soit sont des substances
toxiques, des vecteurs ou des agents causant des maladies, ou sont soupçonnés
d'en être. […]
INDEMNISATION
Indemnisation: animal
51. (1) Le ministre peut ordonner le
versement d'une indemnité au propriétaire de l'animal:
a) soit détruit au titre de
la présente loi, soit dont la destruction a été ordonnée par l'inspecteur ou
l'agent d'exécution mais mort avant celle-ci;
b) blessé au cours d'un
examen ou d'une séance de traitement ou d'identification effectués, au même
titre, par un inspecteur ou un agent d'exécution et mort ou détruit en raison
de cette blessure;
c) affecté à des expériences
au titre du paragraphe 13(2).
Montant de l'indemnité
(2) Sous réserve des paragraphes (3) et
(4), l'indemnité payable est égale à la valeur marchande, selon l'évaluation
du ministre, que l'animal aurait eue au moment de l'évaluation si sa
destruction n'avait pas été ordonnée, déduction faite de la valeur de son
cadavre.
Plafond
(3) La valeur marchande ne peut
dépasser le maximum réglementaire correspondant à l'animal en cause.
Indemnité supplémentaire
(4) L'indemnisation s'étend en outre,
lorsque les règlements le prévoient, aux frais de disposition, y compris de
destruction.
[…]
Règlements
55. Le ministre peut, par règlement:
a) régir le mode de calcul
de la valeur marchande des animaux difficilement commercialisables selon lui;
b) fixer les plafonds des
valeurs marchandes des animaux ou des choses ou leur mode de calcul;
c) autoriser l'indemnisation
pour frais de disposition - notamment par destruction - d'animaux ou de
choses et fixer soit le montant de celle-ci ainsi que le plafond, soit le
mode de leur détermination.
Appel
56. (1) Il peut être interjeté appel
devant l'évaluateur soit pour refus injustifié d'indemnisation, soit pour
insuffisance de l'indemnité accordée. […]
Pouvoirs de l'évaluateur
57. (1) L'évaluateur qui entend l'appel
peut confirmer ou modifier la décision du ministre ou renvoyer l'affaire à
celui-ci pour qu'il y soit donné suite de la manière que lui-même précise.
Frais
(2) Les frais peuvent être accordés au
ministre ou mis à sa charge.
Dernier ressort
(3) Les décisions de l’évaluateur ne
sont pas susceptibles d’appel ou de révision.
|
2. Maximum
Amounts for Destroyed Animals Regulations, SOR/1991-222 [in effect November 5, 1991]
|
MAXIMUM AMOUNTS
2. The maximum amount that may be paid to
the owner of the following types of cattle that are destroyed or required to
be destroyed under paragraph 48(1)(a) or (b) of the Health of Animals Act
because of an area or herd disease eradication program for brucellosis or
tuberculosis is
(a) $1,800 for each such
purebred dairy animal;
(b) $1,200 for each such
grade dairy animal;
(c) $1,500 for each such
purebred beef animal; and
(d) $1,000 for each such
grade beef animal.
|
PLAFONDS DES VALEURS MARCHANDES
2. La plafond de la valeur
marchande payable au propriétaire d’un bovin devant être détruit en
application des alinéas 48(1)a) ou b) de la Loi sur la santé des animaux
dans le cadre d’un programme d’éradication de la vrucellose ou de la
tuberculose dans une région ou un troupeau est de :
a) 1 800$ pour un animal
laitier pure race;
b) 1 200$ pour un animal
laitier sans race particulière;
c) 1 500$ pour un animal de
boucherie pure race;
d) 1 000$ pour un animal de
boucherie sans race particulière.
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