Abel v. Canada (Minister of Agriculture), 2001 FCT 1378

Date: 20011213

Docket: T-3158-92

Neutral citation: 2001 FCT 1378

BETWEEN:

LEO ABEL, MARCEL ABEL, KENT ALDER, GERALD ALDER, KEVIN ALDER, MURIEL ALDER, B. & E. RANCHES LTD., DAVID BACH, DR. JOAN BACH, BATTLE RIVER ELK VENTURE LTD., DEAN BAUMANN, DOUG BAUMANN, JAMES ROLLAND BEGG, JOHN NICHOLAS BIDULOCK, ROBERT BLACKMORE, GLEN BLAYLOCK, BLAINE BRIDGES, MURRAY LYLE CAMERON, DONNA CARSON, JOHN CARSON, ROY COPITHORNE AND JUDY COPITHORNE carrying on business under the firm name and style of Jumping Pound Wapiti, DENNIS CRAWFORD, PAT DOWNEY, ELK POINT GAME RANCHING CORPORATION, ELK VALLEY RANCHES INC., MARVIN FERENCE, RAYMOND FERENCE, BRUCE FRIEDEL, BART GUYON, EMIL HENKEL, LARRY HENKEL, JACK HUBER, WALTER A. JASCHINSKI, AURELE JEAN, RONALD JEAN, GEORGE JELSCHEN, NORMAN JUBINVILLE, FRANK KUHNEN, STEVE KURYLO, EDWARD LAKUSTA, VICTOR LAKUSTA, MURRAY LOVELL, MAJESTIC K FARMS LTD., FRANK MCALLISTER, SCOTT MCALLISTER, OWEN McGUIRE, MICHAEL MCREE and TERRY MCREE, DALE NESTEGARD, DAVID NEWTON, NORTH FORK OUTFITTERS LTD., DAN PLUMB, REDWATER RIVER RANCH LIMITED, RUMSEY GAME FARM LTD., SAND HILLS ELK RANCH LTD., WILLIAM SCARROTT, JOHN SCHLAUCH, ERIC SIMMONS, PAT STADEN, STADEN FARMS LTD., DR. CLIFFORD SWAN, R.J. (JIM) TWA, ROMAN ULANICKI, UNGULATES UNLIMITED, PAT VAN CAUWENBERG, PAT VAN CAUWENBERG and JOHN SCHLAUCH carrying on business under the firm name and style of HILLTOP ELK FARM, RON WALTNER, BONNIE WALTNER, and PHILIP WALTER

                                                                                                                                              Plaintiffs

                                                                        - and -

                                  HER MAJESTY THE QUEEN IN RIGHT OF CANADA,

                 AS REPRESENTED BY THE MINISTER OF AGRICULTURE FOR CANADA

                                                                                                                                            Defendant

                                  REASONS FOR JUDGMENT AND JUDGMENT

CAMPBELL J.

[1]                 In 1991, the Plaintiffs owned farmed elk that were destroyed under the authority of s.48 of the Health of Animals Act, S.C. 1990 c.21, which came into force as of January 31, 1991, (the "Act") and, as a result, were paid what they considered to be inadequate compensation under s.4 of the Maximum Amounts for Destroyed Animals Regulations, SOR/91-222 (the "Regulations"). In the present action, the Plaintiffs' principal claim is that s.4 of the Regulations is ultra vires theAct. In addition, when the action was started some 10 years ago, ancillary claims were made that the Minister of Agriculture (the "Minister"), in an abuse of discretion, acted in bad faith, for improper purposes, and upon irrelevant considerations in making a compensation decision that is unreasonable and unfair. However, at the opening of the trial of the action, counsel for the Plaintiffs formally abandoned all the ancillary claims, thus leaving only the principal claim for decision. The trial proceeded on agreement as to the factual and legal context in which the compensation decision was made, and the action was started, so long ago.

[2]                 In framing the action as they did in 1992, it is obvious that the Plaintiffs were considerably upset with the Minister's compensation award. An understanding of the context helps to explain why, after 10 years, they would still maintain their objection, diminished to a technical statutory interpretation argument as it presently is. But, it also explains why the Minister acted as he did.

[3]                 In 1990, animal protection was governed by the old Animal Disease and Protection Act R.S., c.A-13, s.1; 1974-75-76, c.86, s.2, as amended, which followed a legislative regime somewhat similar to the Act presently under consideration. The old Act allowed the Minister to destroy an animal if affected, or suspected of being affected, with an infectious or contagious disease, gave the Minister a discretion to pay compensation to the owners of animals destroyed, provided that the compensation is to be market value as determined by the Minister, and, most importantly, only provided authority to cap the compensation to a lesser value than market value for horses, cattle, and sheep. That is, if elk were destroyed under the old legislation, and the Minister chose to pay compensation, that compensation would be market value.

[4]                 With respect to elk, a major change to the compensation discretion provided to the Minister was made with the coming into force of the Act on March 18, 1991. The significance of the change made is illustrated in the admitted affidavit evidence of one of the many Plaintiffs, Mr. Kent Alder. In 1990, five elk on Mr. Alder's ranch were killed on order of Agriculture Canada because they tested positive for tuberculosis. The market value of the animals was determined at $13,500 for each female, and $15,000 for each male, and compensation was paid on this basis.

[5]                 In the early 1990's, tuberculosis continued to be a problem in the Alberta elk herds, and many more animals were killed. However, after the coming into force of the Act and Regulations, significantly reduced compensation was paid to the owners because the new regime purported to give the Minister discretion to cap the compensation to be paid for elk to well below the levels previously paid.

[6]                 In the present case, the Plaintiffs' elk were ordered destroyed under s.48 of the Act because they were "suspected of being affected or contaminated by tuberculosis, or of being in contact with or in close proximity to another animal or thing that was, or was suspected of having been, affected or contaminated by tuberculosis". The elk were destroyed after March 18, 1991, and all of the Plaintiffs received compensation for their destroyed elk in an amount equal to the maximum amounts established in s.4 of the Regulations; $3,500 for each male, and $7,000 for each female.

[7]                 It is agreed that: the maximum amounts of compensation fixed under s.4 of the Regulations were less than the full market value of the Plaintiffs' destroyed elk at the time the elk were evaluated for compensation purposes; and one of the purposes for making s.4 of the Regulations was to reduce the cost of eradicating tuberculosis from farmed elk herds in Canada to within the funds available to the Minister.

[8]                 The Plaintiffs argue that, while it was open to Parliament to simply include elk in the capping provision of the old legislative regime, the new legislation is flawed in providing this authority.

[9]                 It is acknowledged by all that animal eradication is necessary where significant health concerns exist. In the case of elk, it is acknowledged that health concerns existed as far back as 1988, and emergency health concerns prevailed in 1991. In passing the Act and Regulations, and in determining compensation, on the admitted evidence there is no question that the Minister exercised good faith and proper motive.

[10]            The technical statutory interpretation argument attacking the compensation decision arises from the following relevant provisions of the Act and Regulations:

The Health of Animals Act, S.C. 1990, c.21

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 thin

Mesures de disposition

48. (1) Le ministre peut prendre toute mesure de disposition, notamment de destruction, - ou ordonner è 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) 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.

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.

COMPENSATION

INDEMNISATION

51(1) Compensation to owners of animals

51 (1) Indemnisation: animal

51. (1) The Minister may order compensation to be paid from the Consolidated Revenue Fund to the owner of an animal that is

51. (1) Le ministre peut ordonner le versement, sur le Trésor, d'une indemnité au propriétaire de l'animal:

(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).

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).

51(2) 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.

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.

51(3) 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.

Plafond

(3) La valeur marchande ne peut dépasser le maximum réglementaire correspondant à l'animal en cause.

51(4) Additional compensation

(4) In addition to the amount calculated under subs.(2), compensation may include such costs related to the disposal of the animal as are permitted by the regulations.

1990, c. 21, s. 51; 1997, c. 6, s. 69.

Indemnité supplémentaire

(4) L'indemnisation s'étend en outre, lorsque les règlements le prévoient, aux frais de disposition, y compris de destruction.

1990, ch. 21, art. 51; 1997, ch. 6, art. 69.

55 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 subs.51(3) or s.52; 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.

1990, c. 21, s. 55; 1997, c. 6, s. 71.

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.

1990, ch. 21, art. 55; 1997, ch. 6, art. 71.

Maximum Amounts for Destroyed Animals Regulations (SOR/91-222)

4. The maximum amount that may be paid to the owner of an elk that is destroyed or required to be destroyed under paragraph 48(1)(a) or (b) of the Health of Animals Act is

(a) $3,500 for each such male elk; and

(b) $7,000 for each such female elk.

4. Le plafond de la valeur marchande payable au propriétaire d'un wapiti devant être détruit en application des alinéas 48(1)a) or b) de la Loi sur la santé des animaux est de :

a) 3 500 $ pur un mâle;

b) 7 000 $ pur une femelle.

[11]            The Plaintiffs argue that the reference in s.51(3) to "the value mentioned in paragraph (2)(a)" is to "the market value, as determined by the Minister", and, thus, the determination under s.4 of the Regulations has to have some relationship to market value. As the argument goes, since the amount of compensation decided under s.4 of the Regulations has nothing to do with market value, the quantum decided is not authorized; that is, s.4 itself is ultra vires.

[12]            I find it is unnecessary to focus on the legal intricacies of this novel argument, since I find that the two assertions upon which it is based do not exist.

[13]            First, I find that the plain meaning of the words used in s.51(2) and s.51(3) do not admit to the interpretation placed upon them by the Plaintiffs. I find that the term "value mentioned" in s.51(3) means only the outcome of the process of valuation exercised under s.52(2)(a), and, thus, s. 51(3) cannot be read to import a statutory requirement to have regard to the market value of elk when determining the cap to be placed on compensation to be made available by operation of s.4 of the Regulations.

[14]            Nevertheless, on the evidence, I find that the Minister did have significant regard for the market value of elk in making the compensation determination contested in the present action. It is also clear that political and economic considerations were properly in play in the exercise of the Minister's discretion. These conclusions are based on the extensive description of the process, including consultation with elk owners, used to reach the compensation decision, as described in the "Regulatory Impact Analysis Statement" appended to the Regulations under consideration.

[15]            It appears that in exercising the ample discretion available to the Minister under the Act and Regulations, the Minister chose to transfer the health risk of elk ranching to the ranchers, instead of absorbing it entirely through use of public funds. I find that by the Act and Regulations the Minister was entitled so to do. I respect the Plaintiffs' attempt to have the Minister account for the authority used, but find that the action taken, while unpalatable to them, was legal.

                                                                 JUDGMENT

[16]            For the reasons provided, I dismiss this action. As very appropriately agreed to between counsel for the parties, I make no award as to costs.

"Douglas R. Campbell"

Judge

Calgary, Alberta

December 13, 2001

                    FEDERAL COURT OF CANADA

                                  TRIAL DIVISION

Date: 20011213

Docket: T-3158-92

BETWEEN:

LEO ABEL, MARCEL ABEL, KENT ALDER, GERALD ALDER, KEVIN ALDER, MURIEL ALDER, B. & E. RANCHES LTD., DAVID BACH, DR. JOAN BACH, BATTLE RIVER ELK VENTURE LTD., DEAN BAUMANN, DOUG BAUMANN, JAMES ROLLAND BEGG, JOHN NICHOLAS BIDULOCK, ROBERT BLACKMORE, GLEN BLAYLOCK, BLAINE BRIDGES, MURRAY LYLE CAMERON, DONNA CARSON, JOHN CARSON, ROY COPITHORNE AND JUDY COPITHORNE carrying on business under the firm name and style of Jumping Pound Wapiti, DENNIS CRAWFORD, PAT DOWNEY, ELK POINT GAME RANCHING CORPORATION, ELK VALLEY RANCHES INC., MARVIN FERENCE, RAYMOND FERENCE, BRUCE FRIEDEL, BART GUYON, EMIL HENKEL, LARRY HENKEL, JACK HUBER, WALTER A. JASCHINSKI, AURELE JEAN, RONALD JEAN, GEORGE JELSCHEN, NORMAN JUBINVILLE, FRANK KUHNEN, STEVE KURYLO, EDWARD LAKUSTA, VICTOR LAKUSTA, MURRAY LOVELL, MAJESTIC K FARMS LTD., FRANK MCALLISTER, SCOTT MCALLISTER, OWEN McGUIRE, MICHAEL MCREE and TERRY MCREE, DALE NESTEGARD, DAVID NEWTON, NORTH FORK OUTFITTERS LTD., DAN PLUMB, REDWATER RIVER RANCH LIMITED, RUMSEY GAME FARM LTD., SAND HILLS ELK RANCH LTD., WILLIAM SCARROTT, JOHN SCHLAUCH, ERIC SIMMONS, PAT STADEN, STADEN FARMS LTD., DR. CLIFFORD SWAN, R.J. (JIM) TWA, ROMAN ULANICKI, UNGULATES UNLIMITED, PAT VAN CAUWENBERG, PAT VAN CAUWENBERG and JOHN SCHLAUCH carrying on business under the firm name and style of HILLTOP ELK FARM, RON WALTNER, BONNIE WALTNER, and PHILIP WALTER

                                                                                          Plaintiffs

                                              - and -

HER MAJESTY THE QUEEN IN RIGHT OF

CANADA, AS REPRESENTED BY THE MINISTER OF AGRICULTURE FOR CANADA

                                                                                        Defendant

                       REASONS FOR JUDGMENT

                                 AND JUDGMENT

                                                                 FEDERAL COURT OF CANADA

                                                                              TRIAL DIVISION

                                           NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                                          T-3158-92

STYLE OF CAUSE:                                        Leo Abel et al. v. Her Majesty the Queen as Represented

by the Minister of Agriculture Canada

PLACE OF HEARING:                                  CALGARY, Alberta

DATE OF HEARING:                                    December 10, 2001

REASONS FOR JUDGMENT AND JUDGMENT : CAMPBELL, J.

DATED:                                                             December 13, 2001

APPEARANCES:

Mr. Brian K. O'Ferrall

Ms. Lori Goldbach                                                                                      FOR PLAINTIFFS

Ms. Rolinda D. Y. Mach

Mr. Bruce Hughson                                                                                     FOR DEFENDANT

SOLICITORS OF RECORD:

Bennett Jones

Calgary, Alberta                                                                                          FOR PLAINTIFFS

Mr. Morris Rosenberg

Deputy Attorney General of Canada                  FOR DEFENDANT