One of Canada’s leading agribusinesses is contemplating suing the Canadian Grain Commission after the Federal Court of Appeal ruled it had been treated unfairly by the federal regulator.
“We’re certainly going to have to consider that very seriously,” said Jean-Marc Ruest, assistant vice-president of legal and industry affairs for James Richardson International.
In the fall of 2002, the CGC refused to cross a picket line at the Port of Vancouver to provide official inspection services to JRI due to concerns about the safety of its employees.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
It also refused to grant a statutory exemption that would have allowed the grain company to unload the grain from 121 rail cars into its Vancouver terminal without the presence of CGC inspectors.
Concerned about the deteriorating condition of its grain, JRI went ahead and unloaded the cars on its own.
In response to what it considered an act of defiance, the CGC issued an order suspending JRI’s terminal operating licence for one day and requiring the company to undergo an extensive audit of its terminal assets.
In its May 17 decision, the Federal Court of Appeal ruled the commission’s actions were heavy-handed, deeming its refusal to have inspectors cross the picket line a breach of its statutory obligations.
The court also confirmed an earlier finding by the Federal Court of Canada that the CGC had acted unfairly toward JRI and that there was a reasonable apprehension of bias on the part of the CGC’s commissioners. Accordingly, the court set aside the Nov. 8, 2002, order issued by the commission.
The CGC has been ordered to pay JRI’s court costs on the appeal and cross-appeal, but the grain company may seek further compensation in the form of a lawsuit because it has already complied with an order that has now been set aside.
Ruest said the CGC audit effectively shut down the company for a prolonged period of time in 2002.
“It prevented us from operating the terminal for one month. That is a significant loss of revenue. We’re talking about several hundred thousand dollars.”
Gord Miles, chief operating officer of the CGC, had little to say about the decision, which is still under review by the commission’s legal staff.
“We will continue to discharge our obligations according to the Canada Grain Act but always with regard to the safety of our employees.”
He said the commission is considering whether it should appeal the appeal, which would mean having the case heard by the Supreme Court of Canada.
Ruest said that level of appeal is not an automatic right. It has to be granted by the highest court in the land, which he believes is unlikely.
“This isn’t the type of case the Supreme Court is usually interested in.”
JRI feels vindicated by the Federal Court of Appeal decision and absolved of the negative publicity surrounding the temporary suspension of its licence.
“The point of (the legal challenge) was to restore JRI’s reputation,” said Ruest.
“We always thought we had acted properly and we had to make that point clear.”
Equally important was to get a legal interpretation of what CGC’s obligations are now.
“If we couldn’t expect them to provide services during labour disruptions then one would have to wonder what other times might the CGC not provide services.”
Ruest said the message the grain regulator should take from this decision is that it is unacceptable to leave a grain company in such a bind that it has no option other than to defy the commission.
“They will either have to provide services or grant an exemption,” he said.
Miles said the commission is still analyzing how the decision will affect its operations and has made no lasting policy decisions on the matter.
“For future situations we will take a look at it on a case-by-case basis,” he said.
