T-470-04
2005 FC 530
Pioneer Grain Company, Limited (Appellant)
v.
Barry Goy (Respondent)
Indexed as: Pioneer Grain Co. v. Goy (F.C.)
Federal Court, Snider J.--Ottawa, March 10; April 20, 2005.
Agriculture -- Appeal of Canadian Grain Commission's decision denying appellant right to set off amounts owing by respondent against sale proceeds from shipment of canola and ordering appellant to pay respondent $6,134.16 for shipment -- Parties entering into deferred delivery contract (DDC) for purchase, delivery of 231.3 metric tonnes of oats -- Contract specifically providing for set-off of amounts owing, including amounts resulting from grain producer's failure to deliver -- Respondent failing to deliver oats and appellant incurring loss -- Appellant setting off loss in subsequent transaction with respondent for purchase of canola -- Respondent complaining to Canadian Grain Commission that appellant not paying for shipped canola -- Canadian Grain Commission accepting complaint, determining appellant violating Canada Grain Act, s. 61 -- Saskatchewan Court of Appeal in Saskatchewan Wheat Pool v. Feduk holding s. 61 not precluding elevator agent from setting off amounts owed by producer -- Requirement in Feduk transactions between parties must be clearly interrelated for equitable set-off not applicable since parties contractual right of set-off herein -- Commission's conclusion no evidence of appellant's losses resulting from respondent's default unreasonable since respondent never disputing amount owing -- Given Commission's broad mandate, Commission having authority to examine, interpret underlying contracts to determine potential violations of Grain Act -- Commission's lack of expertise in contract law not bar to fulfilling mandate.
This was an appeal from the Canadian Grain Commission's decision that the appellant's set-off of the amounts owing by the respondent against the sale proceeds from the respondent's shipment of canola violated section 61 of the Canada Grain Act (the Grain Act). The appellant is the operator of a grain elevator in Saskatchewan to whom the respondent, a farmer, has sold various grains. The parties entered into a deferred delivery contract (DDC) for the purchase and sale of oats. Article 12 allowed set-off against any amounts owing by the seller to the buyer, including any amount resulting from the seller's failure to deliver. Under the DDC, the respondent was required to deliver the oats in September 2002 but failed to do so, and the appellant consequently incurred a loss of $16,329.78. In a subsequent transaction, the respondent delivered canola to the appellant for a gross amount payable of $6,933.30. The appellant issued the respondent a "cash purchase ticket" showing the amount of payment by set-off. From the amount payable, it had deducted commission, freight and $6,134.16 as "accounts receivable", leaving the respondent with a balance of $0. The $6,134.16 was a portion of the $16,329.78 owing under the DDC. The respondent complained to the Commission, which ordered the appellant to pay the respondent the sale proceeds of $6,134.16. The Commission determined that the purchase and sale of grain in Canada was governed not only by the parties' agreement but by the Grain Act and that set-off clauses in agreements between licensees and producers could not be used to avoid the requirements of the Act. Furthermore, it ruled that it had no authority to determine the validity of a contract or to interpret or enforce its provisions. On appeal, the issues were whether section 61 of the Grain Act precludes an elevator operator from exercising its entitlement to set-off specifically provided for in a contract and whether the Commission has the authority to determine any set-off amounts.
Held, the appeal should be allowed.
The issues required a "pure determination of law" to which a standard of correctness applied. Sections 13 and 14 of the Grain Act set out the object and powers of the Commission. The Commission's mandate is very broad and involves regulating grain handling in Canada in the interests of the grain producers to ensure a dependable commodity for domestic and export markets. It must also establish and apply standards and procedures regulating the handling, transportation and storage of grain, as well as conduct investigations and hold hearings on matters within its powers. The appellant's obligations as a "licensed primary elevator" are set out in section 60 and paragraph 61(a) of the Act. These include issuing to the grain producer a cash purchase ticket as evidence of grain purchase and delivery.
The Saskatchewan Court of Appeal in Saskatchewan Wheat Pool v. Feduk held in unequivocal terms that paragraph 61(a) of the Grain Act does not preclude an elevator agent from setting off amounts owed by the producer and does not, on its face, purport to address the issue of set-off. The Commission, however, refused to follow Feduk on the grounds that the Saskatchewan Court of Appeal did not have the benefit of the Commission's submissions; it had disallowed a set-off where the two contracts were not interrelated; and no evidence regarding losses resulting therefrom was adduced. The precedential value of a decision of a superior court directly on point is not diminished just because a party was not present and did not provide its input. The Commission also misunderstood the nature of the set-off at issue in Feduk, which dealt with the right of equitable set-off, a much different issue than contractual or legal right of set-off. None of the contracts at issue in Feduk contained a clause permitting set-off. The Saskatchewan Court of Appeal therefore had to determine whether the transactions for which set-off was claimed were clearly connected. The requirement for a clear connection between transactions does not exist when the right of set-off arises from a contract, such as the one in this case. The issue before the Commission did not require it to determine whether the DDC contract was related to the later delivery of canola. Therefore, the basis upon which to determine the availability of set-off in the present case and in Feduk was different. It was also patently unreasonable for the Commission to conclude that no evidence regarding the losses resulting from the alleged default was adduced since the respondent never disputed the amount owing, and the Commission never advised the appellant that it questioned whether the losses had been suffered. The appellant had moreover submitted statements regarding the debt and the DDC indicating the price of oats.
The appellant could correctly issue a "cash purchase ticket" showing the amount of payment by set-off. Even absent the persuasive precedent of Feduk, other reasons, i.e. "payment" is not limited to a cash transaction under Canadian law and the Grain Act does not require that a producer be paid in cash for the purchase of grain, resulted in the Court's conclusion that section 61 does not preclude contractual set-off. Under the Grain Act, the availability of set-off can co-exist with the rights and obligations of producers and operators.
The Commission, in investigating a complaint under the Grain Act, has the authority to examine underlying contracts to determine whether there has been a contravention of the Grain Act. As a creature of statute, a tribunal has only the powers conferred by the statute, meaning that the action in question must either be contained in the explicit words of the enabling legislation or be necessarily incidental to the mandate stated in the statute. Since section 97 of the Grain Act provides that the Commission may make an order for the payment of damages for any contravention thereof, the Commission may make findings of fact and law necessary to determine whether the Act has been violated. Such determinations are necessarily incidental to the Commission's broad jurisdiction. The Commission is also obliged to consider whether any amount claimed is actually owing, even if this involves examining an underlying contract and interpreting its provisions. The Commission's lack of expertise in contract law must not prevent it from fulfilling its mandate to determine whether an operator has acted properly in issuing a "cash purchase ticket" for the delivery of grain. If the law allows set-off in calculating the "purchase price", it is up to the Commission to address whatever it must to fulfill its mandate. Since the respondent never disputed the amount owing to the appellant, speculation about future problems and concern for lack of expertise were not sufficient reasons for the Commission to decline to exercise its jurisdiction.
statutes and regulations judicially
considered
| Canada Grain Act, R.S.C., 1985, c. G-10, ss. 2 "cash purchase ticket" (as am. by R.S.C., 1985 (4th Supp.), c. 37, s. 1), 12 (as am. by S.C. 1994, c. 45, s. 4), 13, 14 (as am. by R.S.C., 1985 (4th Supp.), c. 37, s. 4; S.C. 1988, c. 65, s. 124), 60, 61 (as am. by S.C. 1994, c. 45, s. 16), 91(1)(g),(h),(i), 97(a), 101. |
| Federal Courts Act, R.S.C., 1985, c. F-7 ss. 1 (as am. by S.C. 2002, c. 8, s. 14), 24(1) (as am. by S.C. 1990, c. 8, s. 6). |
cases judicially considered
applied:
Saskatchewan Wheat Pool v. Feduk, [2004] 2 W.W.R. 69; (2003), 232 Sask.R. 161; 2003 SKCA 46; leave to appeal to SCC dismissed [2003] S.C.C.A. No. 359 (QL).
referred to:
Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45; (2002), 219 D.L.R. (4th) 577; 21 C.P.R. (4th) 417; 296 N.R. 1; 2002 SCC 76; Coba Industries Ltd. v. Millie's Holdings (Canada) Ltd. (1985), 20 D.L.R. (4th) 689; [1985] 6 W.W.R. 14; 65 B.C.L.R. 31; 36 R.P.R. 259 (C.A.); Nelson v. Rentown Enterprises Inc. (1992), 134 A.R. 254; 96 D.L.R. (4th) 586; [1993] 2 W.W.R. 71; 5 Alta. L.R. (3d) 149; 7 B.L.R. (2d) 319 (Q.B.); Tone (Re) (1954), 11 W.W.R. (N.S.) 646 (Sask. Q.B.); Rawluk v. Rawluk, [1990] 1 S.C.R. 70; (1990), 71 O.R. (2d) 480; 65 D.L.R. (4th) 161; 36 E.T.R. 1; 103 N.R. 321; 38 O.A.C. 81; 23 R.F.L. (3d) 337.
authors cited
Palmer, Kelly R. The Law of Set-Off in Canada. Aurora (Ont.): Canada Law Book, 1993.
APPEAL from the Canadian Grain Commission's decision that the appellant's set-off of amounts owed by the respondent under a deferred delivery contract regarding a previous transaction against payment for a subsequent canola shipment violated section 61 of the Canada Grain Act. Appeal allowed.
appearances:
Jeffrey N. Grubb Q.C. and Kerri A. Froc for appellant.
Barry Goy on his own behalf.
solicitors of record:
Balfour Moss, Regina, for appellant.
The following are the reasons for order and order rendered in English by
[1] Snider J.: Pioneer Grain Company Limited (Pioneer) is the operator of a grain elevator in the province of Saskatchewan. Mr. Barry Goy, the respondent, is a farmer who has sold various grains to Pioneer. In a decision dated February 11, 2004, the Canadian Grain Commission concluded that Pioneer had no right to set off amounts otherwise owing by Mr. Goy against the sale proceeds from a shipment of canola and ordered Pioneer to pay $6,134.16 to Mr. Goy. Pursuant to section 101 of the Canada Grain Act, R.S.C., 1985, c. G-10 (the Grain Act) and section 26 [as am. by S.C. 1990, c. 8, s. 6] of the Federal Courts Act, R.S.C., 1985, c. F-7 [s. 1 (as am. idem, s. 14)], Pioneer appeals to this Court, asking that the decision of the Commission be set aside and that Mr. Goy's complaint to the Commission be dismissed.
ISSUES
[2]There is no issue in this case as to whether Mr. Goy owes money to Pioneer. He accepts that he failed to deliver oats as required under his contract with Pioneer and that, therefore, he is indebted to Pioneer. Further, he did not, either before the Commission or before this Court, dispute the amount of the debt owing to Pioneer.
[3]Accordingly, the issues in this case are:
1. Does section 61 [as am. by S.C. 1994, c. 45, s. 16] of the Grain Act preclude an elevator operator from exercising its entitlement to set-off specifically provided for in a contract; and
2. Does the Commission have the authority to determine any set-off amounts?
[4]For the reasons set out in the following, I conclude that the two questions should be answered in the affirmative and that the Commission's decision and order cannot stand.
FACTS
[5]The facts in this case are straightforward and are not in dispute. Briefly, they are as follows:
1. On December 10, 2001, Pioneer and Mr. Goy entered into a deferred delivery contract (DDC) for the purchase and sale of 231.3 metric tonnes of oats at a price of $160.40 per tonne less freight. The oats were to be delivered by Mr. Goy in September 2002. Article 12 of the DDC allowed set-off as follows:
Notwithstanding any other rights of the Buyer [Pioneer] under this Contract, the Seller [Mr. Goy] authorizes the Buyer to deduct from any monies otherwise payable by the Buyer to the Seller, whether now or in the future, any amounts owing by the Seller to the Buyer, including without limitation any amount resulting from the Seller's failure to delivery under this Contract.
2. Mr. Goy failed to deliver the oats in September 2002, as required under the DDC. As a result, Pioneer had to replace the oats at the market cost of $231 per tonne, for a total cost of $16,329.78.
3. On October 7, 2003, Mr. Goy delivered 19.169 net tonnes of canola to Pioneer. The gross amount payable was calculated as $6,933.30. From that gross amount, Pioneer deducted $9.58 for its commission, $789.56 for freight and $6,134.16 as "Accounts Receivable", leaving Mr. Goy with a balance of $0. The $6,134.16 was a portion of the $16,329.78 owing under the DDC.
4. Mr. Goy complained to the Commission that he was not paid by Pioneer for his load of canola.
5. The Commission, after written submissions from the parties but without a hearing, reached its decision that Pioneer's set-off of the amounts owing under the DDC against the payment for Mr. Goy's canola was in violation of section 61 of the Grain Act. Specifically, the Commission stated that:
[P]roducers and licensees cannot agree to waive or opt out of, or ignore the provisions of the Act. They are free to make whatever arrangements they choose, provided the arrangements comply with and are not contrary to the Act. The purchase and sale of grain in Canada is not an ordinary commercial transaction governed only by agreement between the parties, but is also governed by statute.
The [Commission] does not accept the argument that the statute does not explicitly prohibit "contracting out", and, therefore producers may consent to a set-off or, presumably, may "opt out" of any other right or protection they are entitled to under the Act. That would lead to abuse and the defeat of an important purpose of the Act.
The [Commission] does not sanction the inclusion of "set-off" clauses or similar clauses in agreements between licensees and producers, and is of the view that such clauses cannot be used to avoid the requirements of the Act.
In any event, the [Commission] has no authority to determine the validity of a contract or to interpret or enforce the provisions of a valid contract. In addition, the [Commission] Commissioners have neither the training nor the experience to make determinations with respect to the complexities of contract law.
STATUTORY PROVISIONS
[6]The Commission and its powers arise from the operation of the Grain Act. The general object of the Commission and its powers are described in sections 13 and 14 [as am. by R.S.C., 1985 (4th supp.), c. 37, s. 4; S.C. 1988, c. 65, s. 124] of the Grain Act. Those provisions are set out below, with emphasis added to those particular portions of relevance to the case before me.
13. Subject to this Act and any directions to the Commission issued from time to time under this Act by the Governor in Council or the Minister, the Commission shall, in the interests of the grain producers, establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada, to ensure a dependable commodity for domestic and export markets.
14. (1) Subject to this Act, the Commission shall, in furtherance of its objects,
(a) recommend and establish grain grades and standards for those grades and implement a system of grading and inspection for Canadian grain to reflect adequately the quality of that grain and meet the need for efficient marketing in and outside Canada;
(b) establish and apply standards and procedures regulating the handling, transportation and storage of grain and the facilities used therefor;
(c) conduct investigations and hold hearings on matters within the powers of the Commission;
(d) manage, operate and maintain every elevator constructed or acquired by Her Majesty in right of Canada, the administration of which is assigned by the Governor in Council to the Commission;
(e) undertake, sponsor and promote research in relation to grain and grain products and, in so doing,
(i) wherever appropriate, utilize technical, economic and statistical information and advice from any department or agency of the Government of Canada, and
(ii) maintain an efficient and adequately equipped laboratory;
(e.1) monitor compliance with end-use certificates provided pursuant to section 87.1; and
(f) advise the Minister in respect of such matters relating to grain, grain products and screenings as the Minister may refer to the Commission for its consideration. [Underlining added.]
[7]The Commission, in this case, inquired into Mr. Goy's complaint pursuant to subsection 91(1) of the Grain Act, which states, in part, that:
91. (1) The Commission has jurisdiction to and may, . . . at any other time, investigate
. . .
(g) any failure or refusal of a licensee to pay any fees for services provided by the Commission or to comply with any provisions of this Act or any regulation, order or licence made or issued pursuant to this Act;
. . .
(h) any complaint by a person with respect to any matter within the jurisdiction of the Commission; and
(i) any other matter arising out of the performance of the duties of the Commission.
[8] The result of the investigation of Mr. Goy's complaint was an order by the Commission that Pioneer pay Mr. Goy the amount of $6,134.16. The authority for making such an order is contained in paragraph 97(a) of the Grain Act.
97. The Commission may, after any investigation instituted under section 91 and after affording all persons having an interest in the matter under investigation a full and ample opportunity to be heard, make an order
(a) for the payment, by any complainant, licensee or other person to whom the jurisdiction of the Commission extends, of compensation to any person for loss or damage sustained by that person resulting from a contravention of or failure to comply with any provision of this Act or any regulation, order or licence made or issued pursuant to this Act;
[9]The obligations of Pioneer, as a "licensed primary elevator" are set out in section 60 and paragraph 61(a) of the Grain Act.
60. Subject to section 58 and any order made under section 118, the operator of every licensed primary elevator shall, at all reasonable hours on each day on which the elevator is open, without discrimination and in the order in which grain arrives and is lawfully offered at the elevator, receive into the elevator all grain so lawfully offered for which there is, in the elevator, available storage accommodation of the type required by the person by whom the grain is offered.
61. 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; . . . .
[10] The definition of "cash purchase ticket" is set out in section 2 [as am. by R.S.C., 1985 (4th Supp.), c. 37, s. 1].
2. . . .
"cash purchase ticket" means a document in prescribed form issued in respect of grain delivered to a primary elevator, process elevator or grain dealer as evidence of the purchase of the grain by the operator of the elevator or the grain dealer and entitling the holder of the document to payment, by the operator or grain dealer, of the purchase price stated in the document;
ANALYSIS
| (a) Standard of review |
[11]The issues before me require the interpretation of statutes. There is no element of fact at issue and no question that is within the particular expertise of the Commission. These issues require a "pure determination of law" to which a standard of correctness applies (Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45).
| (b) Availability of contractual set-off |
[12]In my view, the issue of whether section 61 precludes set-off was answered by the Saskatchewan Court of Appeal in Saskatchewan Wheat Pool v. Feduk, [2004] 2 W.W.R. 69 (leave to appeal to S.C.C. dismissed ([2003] S.C.C.A. No. 359)). The Court's decision in Feduk is both persuasive and dispositive.
[13]Feduk involved the Saskatchewan Wheat Pool, which buys and sells grain in Saskatchewan. Arising out of a complex set of facts, the Wheat Pool attempted to set off amounts allegedly owed by Mr. Feduk against two different contracts and against the delivery of Wheat Pool shares. The Wheat Pool sued Mr. Feduk for the breaching of two canola contracts and Mr. Feduk counterclaimed. In the end, the Court allowed the Wheat Pool to set off amounts owed to it against one of the contracts and disallowed set-off against the delivery of the Wheat Pool shares and an unrelated contract for the delivery of barley.
[14]As delivery of grain in the case was made pursuant to the Grain Act, the first issue addressed by the Court was whether there was some legislative or contractual bar to the availability of set-off. Mr. Feduk argued that paragraph 61(a) of the Grain Act means that an elevator agent cannot set off money owed by the producer and must pay the farmer. The Court, at paragraph 71, held as follows:
Clause 61(a) of the Canada Grain Act does not preclude an elevator agent from setting off amounts owed by the producer. A direction that the producer must be paid is nothing more than that. The section does not, on its face, purport to address the question of set-off and there is no policy reason to read such a limitation into it.
This is a clear and unambiguous statement of the law from the Court of Appeal. Leave to appeal to the Supreme Court of Canada was denied.
[15]In its decision, the Commission refused to follow Feduk, stating as follows:
The Commissioners note that the Court in [Feduk] was not asked to consider other relevant provisions of the Act, in addition to s. 61, or the statutory scheme generally, and did not have the benefit of the [Commission's] input, based on over ninety years of experience in the grain industry.
Moreover, the Court disallowed a set-off similar to the one here, because the transactions at issue were not sufficiently related, saying at p. 46 "The 1993 barley contract and the deferred delivery contract are not so interrelated that equity requires that the Wheat Pool should be able to set off the earlier amounts. Accordingly, the Wheat Pool remains liable to pay for the three deliveries under the barley contract plus pre-judgment interest from the date monies were payable in the ordinary course." In this case, payment for a canola delivery was set off against an alleged default on a separate and distinct agreement for the delivery of oats. Even if sufficiently connected for a set-off, no evidence was adduced as to losses resulting from the alleged default.
[16]The position of the Commission appears to boil down to three reasons for not applying Feduk.
· The Court of Appeal did not have the benefit of submissions from the Commission on this issue;
· The Court of Appeal disallowed a set-off similar to the one in this case, where the two contracts were not interrelated; and
· No evidence was adduced as to losses resulting from the alleged default.
I will deal with each of these arguments.
| 1. Lack of submissions from the Commission |
[17]The first of these responses amounts to a disagreement by the Commission with the Court's decision. Just because a party was not present and did not provide its input does not diminish the precedential value of a decision of a superior court directly on point. Whether or not the Court of Appeal had the input of the Commission is simply not relevant. It is not up to the Commission, at this point, to argue that the Court of Appeal was wrong.
| 2. Nature of the set-off |
[18]The second of the arguments is based on a misunderstanding of the nature of the set-off at issue in the Feduk decision. The Court in Feduk was dealing with the right of equitable set-off--a much different issue than contractual or legal right of set-off. Specifically, none of the contracts at issue in Feduk contained a clause permitting set-off. Absent a legal right of set-off, the Court was required to determine whether the claim for set-off was "so clearly connected with the demand of the plaintiff that it would be manifestly unjust to allow the plaintiff to enforce payment without taking into consideration the cross-claim" (Feduk, at paragraph 67 referring to Coba Industries Ltd. v. Millie's Holdings (Canada) Ltd. (1985), 20 D.L.R. (4th) 689 (B.C.C.A.)).
[19]That requirement does not exist in the case before me where the right of set-off arises from a contract. Article 12 of the DDC explicitly allows the set-off. As succinctly stated by one author (Palmer, Kelly. The Law of Set-Off in Canada, Aurora (Ont.): Canada Law Book, 1993, at page 263):
Contractual set-off is, not surprisingly, more a matter of contract law than a separate application of set-off. Consequently, the normal rules of set-off regarding mutuality, liquid debts and connected debts do not apply: within the bounds of legality and public policy, parties are free to contract whatever result they wish. Accordingly, agreements to set-off which would, aside from the agreement, not be granted relief due to the absence of the requirements of set-off, will be upheld.
[20]Thus, the issue before the Commission did not require it to determine whether the DDC contract was related to the later delivery of canola. In other words, the basis upon which the Saskatchewan Court of Appeal determined that equitable set-off was not available in two of three of the specific instances of attempted set-off is not present in this case.
| 3. Evidence of losses |
[21]The Commission also raised a concern that no evidence was adduced as to losses resulting from the alleged default. In my view, this conclusion is incorrect. At no time did Mr. Goy dispute that he owes the amounts alleged under the DDC and at no time did the Commission advise Pioneer that it questioned whether the losses had been suffered. I also note that there was, in fact, evidence before the Commission related to the debt in the form of statements from Pioneer and identification on the DDC of the market price of oats on January 14, 2003. In my view, absent a submission by Mr. Goy that this amount was not owing, this was sufficient evidence upon which to conclude that the set-off amount was correct. It was patently unreasonable for the Commission to conclude that no evidence was adduced.
| 4. In the alternative, reasons for allowing set-off |
[22]Even absent the persuasive precedent of Feduk, I would conclude that section 61 does not preclude contractual set-off. In summary form, my reasons are the following:
· Under Canadian law, a "payment" is not limited to a cash transaction (Feduk; Nelson v. Rentown Enterprises Inc. (1993), 134 A.R. 257 (Q.B.): Tone (Re) (1954), 11 W.W.R. (N.S.) 646 (Sask. Q.B.)).
· There is nothing in the Grain Act that requires that a producer be paid for the purchase price of grain in cash.
· The prevailing Canadian law is that set-off may be exercised by agreement.
· If Parliament had intended that section 61 of the Grain Act operate to preclude a right to contractual set-off, it could have done so. Since it did not, the presumption is that Parliament did not intend to depart from the prevailing law (Rawluk v. Rawluk, [1990] 1 S.C.R. 70, at page 90).
· As noted by the Saskatchewan Court of Appeal in Feduk, there is no public policy reason to disallow Pioneer from enforcing its valid contractual rights.
· Contrary to the views of the Commission, this is not an attempt by Pioneer to "opt" out of the Grain Act. The availability of set-off can coexist with the rights and obligations of producers and operators under the Grain Act. It still remains for the Commission to investigate and rectify any wrongdoing by an operator in calculating the amount of the "payment" to be made to the producer, whether the "payment" includes set-off or not.
[23]In conclusion on this issue, I would follow the decision in Feduk. Section 61 of the Grain Act does not preclude set-off. Pioneer, in my view, could correctly in law issue a "cash purchase ticket" showing the amount of payment by set-off. Issuance of such a ticket is not in contravention of section 61 of the Grain Act. In this case, given that Mr. Goy does not dispute the amount owing, the Commission ought to have dismissed his complaint. Its failure to do so constitutes a reviewable error.
| (c) Powers of the Commission |
[24]Although not clearly articulated, it appears that the Commission concluded that it did not have the jurisdiction to assess amounts of set-off. In its decision, the Commission asserted that the Commission has no authority to determine the validity of a contract or to interpret or enforce the provisions of a valid contract. It also stated that they have "neither the training nor the expertise to make determinations with respect to the complexities of contract law." And, later in the decision, the Commission states that it "is not equipped to make decisions with respect to the law of set-off."
[25]A tribunal, as a creature of statute, has only the powers given it by the statute. This, of course, does not mean that every action of a tribunal must be explicitly listed in the words of the statute. Rather, it means that the action in question must either be contained in the explicit words of the enabling legislation or be necessarily incidental to the mandate expressed in the statute. It follows that the exercise of a broad mandate, by necessity, will almost always bestow a number of incidental powers upon the tribunal. Otherwise, it would be unable to carry out its statutorily mandated functions.
[26]The mandate of the Commission is very broad; as set out in section 13, "the Commission shall, in the interests of the grain producers . . . regulate grain handling in Canada, to ensure a dependable commodity for domestic and export markets." Under section 97, the Commission may make an order for the payment of damages for a contravention of the Grain Act. It follows that Parliament must have intended the Commission to make findings of fact and law necessary to determine whether there has been a contravention of the Grain Act. Such determinations are necessarily incidental to its broad jurisdiction. In my view, the Commission may--and, in fact, is obliged to--consider whether any amount claimed is actually owing. If this involves interpreting certain provisions of a contract, this is completely within the realm of the Commission's jurisdiction.
[27]A major concern of the Commission was an alleged lack of expertise in the area of contract law. This is an irrelevant consideration. The Commission's mandate is to determine whether an operator has acted properly in issuing a "cash purchase ticket" for the delivery of grain to it. If the law allows set-off in calculation of the "purchase price," it is up to the Commission to address whatever it must to carry out its mandate under the Grain Act. This may require, from time to time, that the Commission or its expert staff carry out some analysis of underlying contracts. I do not see this as requiring extraordinary resources. There may well be procedures that could be put in place to assist the Commission. Specifically, I note that the Commission has the ability, pursuant to section 12 [as am. by S.C. 1994, c. 45, s. 4] of the Grain Act, to "make by-laws . . . respecting . . . the regulation of its proceedings and generally for the conduct of its activities." Through its by-laws, the Commission could, for example, set out filing requirements in cases involving a claim to set off.
[28]In any event, the problems described by the Commission do not exist in this case, since Mr. Goy is not disputing the amount he owes to Pioneer. Speculation about future problems that may or may not arise and concern for lack of expertise are not sufficient reasons for the Commission to decline to exercise its jurisdiction in this case.
[29]I conclude that the Commission, in investigating a complaint under the Grain Act, has the authority to examine underlying contracts as necessary to determine whether there has been a contravention of the Grain Act.
CONCLUSION
[30]For these reasons, the appeal will be allowed. The order of the Commission will be quashed and the complaint of Mr. Goy dismissed.
[31]Pioneer requests costs in this matter. Mr. Goy has been, throughout, an honest and forthright self- represented participant in these complex proceedings. In my view, it would be unfair to punish him for legal errors made by the Commission. Accordingly, there will be no order as to costs.
ORDER
THIS COURT ORDERS THAT:
1. The order and decision of the Commission dated February 11, 2004, are set aside;
2. The complaint of Mr. Barry Goy to the Commission in this matter is dismissed.