T-2191-04: Decision

Date: 20041223

Docket: T-2191-04

Citation: 2004 FC 1768

Ottawa, Ontario, December 23, 2004

PRESENT:

THE HONOURABLE MADAM JUSTICE MACTAVISH

BETWEEN:

ARTHUR MAINIL (Applicant)

- and -

THE CANADIAN WHEAT BOARD AND MEYERS NORRIS PENNEY (Respondents)

- and -

TOM JACKSON AND ROD FLAMAN (Interveners)


REASONS FOR ORDER AND ORDER
  1. Arthur Mainil is a candidate in an election for directors of the Canadian Wheat Board (CWB). The election is being run by the CWB and Meyers Norris Penny LLP (MNP), a chartered accountancy firm retained by the CWB to act as Election Co-ordinator. The CWB and MNP are the respondents in this application.
     
  2. Mr. Mainil alleges that there were a number of irregularities in the electoral process. As a result, he seeks to enjoin the CWB and MNP from counting the ballots and announcing the results of the election until such time as the electoral process can be judicially reviewed.
     
  3. Tom Jackson and Rod Flaman are also candidates in the same election, Mr. Flaman in the same district as Mr. Mainil, and Mr. Jackson in a different district. Mr. Jackson supports Mr. Mainil's position, whereas Mr. Flaman supports the CWB and MNP. Both individuals were given leave to intervene in the motion for an injunction, on the basis that their representations had to be limited to the issues identified by the parties themselves.

The Structure of the Canadian Wheat Board

  1. The CWB was created pursuant to the Canadian Wheat Board Act (the Act). It is responsible for the sale and marketing of all wheat, including durum wheat, feed barley and barley intended for human consumption that is produced in Manitoba, Saskatchewan, Alberta and the Peace River district of British Columbia for both domestic and export purposes.
     
  2. The CWB has the exclusive 'single-desk' authority to market these grains for export from Canada and for human consumption within Canada. It markets approximately 20,000,000 tonnes of grain a year, to some 70 countries around the world, generating annual revenues of some $4 - 6 billion. These revenues are returned to the producers, net of operating expenses.
     
  3. A producer who wishes to sell grain through the CWB system in a given crop year (August 1 to July 31) is required to apply for a Permit. The producer is then issued a Permit Book, which is used to record all of the producer's dealings with the CWB. In the 2003-2004 crop year, there were approximately 75,000 Permit Book holders.
     
  4. The CWB is governed by a 15 member Board of Directors. Five members of the Board are appointed by the federal government, and ten are elected by grain producers. The elected directors are each elected for a four-year term. The directors' terms are staggered, such that five
    directors are elected every two years.
     
  5. This Application relates to the election held in the Fall of 2004 for Electoral districts 2, 4, 6, 8 and 10. The terms of the current directors from these districts will expire on December 31, 2004.

The Electoral Process

  1. The process to be followed in the election of directors for the CWB is set out in the Regulations Respecting the Election of Directors of the Canadian Wheat Board (the Regulations). The Regulations contemplate the hiring of an Election Co-ordinator to conduct the election of directors, and to ensure that the elections are carried out in a fair and impartial fashion, in accordance with the Act and the Regulations. In this case, the CWB hired the Brandon office of MNP.
     
  2. The Regulations stipulate that the Election Co-ordinator shall fix the dates for the election period, including the date on which nominations close. The Election Co-ordinator is also responsible for the compilation of a voters list.
     
  3. CWB directors are chosen by grain "Producers". "Producers" is a defined term in the Act, and includes "actual producers" - those who actually produce grain, as well as persons entitled to the grain grown by actual producers, whether as landlord, vendor or mortgagee.
     
  4. Producers who produce grain in an electoral district are entitled to vote in that electoral district. In the event that a producer produces grain in more than one district, the producer is entitled to select one district in which to vote, but may not vote in more than one district.
     
  5. The Regulations stipulate that no later than 60 days before the last day of the election period, the CWB shall provide the Election Co-ordinator with a list of producers who are named in a Permit Book on the day that the list is sent or who were named in a Permit Book during the previous crop year.
     
  6. No less than 30 days before the last day of the election period, the Election Co-ordinator is required to make the list of the voters in each electoral district publicly available, and to provide each candidate with a copy of the list of the voters in the candidate's electoral district.
     
  7. Any producer whose name is not included on the voters list may, no less than 14 days before the last day of the election period, ask the Election Co-ordinator to add the producer's name to the voters list, subject to the producer providing proof of his or her identity and eligibility.
     
  8. Under section 17 of the Regulations, the Election Co-ordinator is required to mail a ballot to each voter on the voters list no less than 25 days before the last day of the election period.
     
  9. Voters vote by mail, and to be counted, completed ballots must be postmarked on or before the last day of the election period.

The 2004 Election

  1. The CWB retained the Brandon, Manitoba, office of MNP to act as Education Co-ordinator in the 2004 Directors' election. MNP had experience in this area, having co-ordinated the 2000 and 2002 Directors' elections.
     
  2. MNP fixed the election period to begin on September 7, 2004 and to end on December 3, 2004. September 7 was also set for the opening of nominations, with nominations set to close on October 25, 2004.
     
  3. On August 20, 2004, the CWB provided MNP with a preliminary list of producers in electoral districts 2, 4, 6, 8 and 10. According to the affidavit of Deborah Harri, the corporate secretary of the CWB, this list was intended to include all producers who were named in Permit Books issued in the 2003-2004 and 2004-2005 crop years.
     
  4. Ms. Harri further deposes that the list was generated using a computer program developed to extract data with respect to all producers holding Permit Books in the last two crop years. Although the CWB was not aware of it at the time, the program did not retrieve data on some 1050 producers holding valid Permit Books for the 2003-2004 crop year, who had not sold grain to the CWB in the last two years. These individuals will be referred to as the Omitted Producers.
     
  5. There were other problems with the data provided by the CWB, including producers being assigned to the wrong electoral district.
     
  6. A preliminary voters list was made public by MNP on September 10, 2004. This list was provided to candidates as they were nominated, and was made available for viewing in the MNP offices in each voting district. The process for producers left off the list to have themselves added to the lists was also widely publicized.
     
  7. Nominations closed on October 25, 2004. The candidate in District 2 was acclaimed, with the result that elections were only required in Districts 4, 6, 8 and 10.
     
  8. Between September 10 and November 1, 2004, a number of changes were made to the list as further errors were identified, and additional producers came forward to have themselves added to the list. On November 1, 2004, MNP mailed approximately 46,700 ballots to the producers on the voters list as it then stood.
     
  9. As a result of an inquiry received by MNP on November 19, 2004, from a Permit Book holder who was not on the voters list, the CWB carried out an investigation into the matter. On November 22, 2004, the CWB realized that the computer program being used to identify Permit Book holders had not included the Omitted Producers. As a result, the Omitted Producers had not received ballots.
     
  10. A list of 1000 of the Omitted Producers was provided to MNP on November 23, 2004, and a further list of 50 more Omitted Producers was forwarded to MNP on November 25, 2004. MNP and the CWB then agreed that ballots should be distributed to the Omitted Producers, which was done between November 24 and November 26, 2004. In the case of Omitted Producers outside of Manitoba, ballots were sent by Express Post. For the Omitted Producers within Manitoba, the ballots were sent by regular mail.
     
  11. Somewhere between approximately 8,000 and 14,000 ballots were distributed in each of the voting Districts. The Omitted Producers were relatively evenly distributed amongst the various voting Districts, with the result that there were approximately 200 Omitted Producers in each District.
     
  12. MNP evidently considered whether the December 3 deadline for submitting ballots should be extended, given the late distribution of the ballots to the Omitted Producers, but ultimately decided that an extension was not necessary.
     
  13. Voters are provided with a coloured envelope in which the completed ballot is to be returned. The colour of the envelope relates to the district to which the vote pertains. Each envelope also bears a bar code. A record was kept by MNP of the ballots sent to the Omitted Producers, so that these ballots could be identified and segregated, in the event that it was subsequently determined that there was a problem with the way that this matter was handled.
     
  14. The election period ended on December 3, 2004. Using the colour-coded envelopes, MNP has now sorted the unopened ballots by electoral district, but as a result of this proceeding, none of the ballots have yet been opened. MNP now intends to count the ballots on December 29, 2004, under the supervision of scrutineers appointed pursuant to the Regulations. The results of the election will presumably be announced shortly thereafter.

Mr. Mainil's Position

  1. Mr. Mainil submits that the electoral process was rife with irregularities. The failure of the CWB and MNP to include the Omitted Producers on the voters list was particularly prejudicial to candidates such as Mr. Mainil, who believes that the current marketing system should be changed.
     
  2. The Omitted Producers were people who had not sold grain through the CWB in the preceding two years. These individuals, Mr. Mainil says, were more likely to have supported his candidacy than the candidacies of his opponents.
     
  3. The CWB and MNP continued to add names to the list up until shortly before the close of the election period. Mr. Mainil says that, in the circumstances, it was unfair for the CWB and MNP to refuse to allow producers coming forward less that 14 days before the close of the
    election period to be added to the list.
     
  4. According to Mr. Mainil, MNP also breached its duty as Election Co-ordinator under the Regulations by failing to clarify the voting procedures, and by failing to advise voters that they did not have to rank each candidate in order of preference. He further argues that the radio advertising spots developed by MNP, encouraging producers to vote, were worded in such a way as to favour the incumbent Directors to the detriment of challengers such as himself.
     
  5. Finally, Mr. Mainil submits that in sorting the completed ballots by district, in the absence of duly appointed scrutineers, MNP has breached section 20 (2) of the Regulations.
     
  6. As noted earlier, Mr. Jackson supports Mr. Mainil's position.

The Appropriate Test

  1. The parties agree that the appropriate test on an application for an interlocutory injunction such as this is the tripartite test established in cases such as RJR-MacDonald Inc. v. Canada (Attorney General) [1994] 1 S.C.R. 311.
     
  2. That is, in order to succeed, Mr. Mainil must establish that there is a serious issue to be tried, that irreparable harm will result if the injunction is not granted, and that the balance of convenience favours the granting of the injunction.
     
  3. That said, counsel for the CWB submits that, in the context of a disputed election, the threshold to be met in establishing the existence of a serious issue is not the low threshold usually required but one that is much higher. Counsel submits that the burden is on Mr. Mainil to establish that there were "substantial irregularities" in the process. According to counsel, mere technical breaches are not "substantial irregularities".
     
  4. Further, Mr. Mainil should be required to show that these irregularities may reasonably be said to have had a substantial effect on the election.
     
  5. In support of this argument, the CWB relies on the decision of the British Columbia Supreme Court in Bowering v. I.O.U.E., Local 882, (2002) BCSC 830.
     
  6. Counsel for the CWB submits that Mr. Mainil has failed to meet the Bowering threshold. As a result, not only should I decline to grant the injunction, counsel submits that I should also summarily dismiss Mr. Mainil's underlying application for judicial review so as to avoid the CWB having to operate under a cloud until the matter is finally resolved.
     
  7. I do not accept counsel's submissions in this regard. A review of the Bowering case discloses that it did not involve an application for an interlocutory injunction, but rather a motion for summary judgment. The test referred to above was that applied by the Court in deciding whether or not to set aside the results of an election. That is not what I am being asked to do here.
     
  8. What I am being asked to do, on an emergency basis, is to enjoin the CWB and MNP from counting the ballots and announcing the election results, until such time as Mr. Mainil's application for judicial review is heard. The threshold for the serious issue aspect of the tripartite test for an interlocutory injunction is not high. Indeed, as the Supreme Court of Canada noted in RJR-MacDonald:
Quote:
Once satisfied that the application is neither frivolous nor vexatious, the motions judge should proceed to consider the second and third tests, even if it is of the opinion that the plaintiff is unlikely to succeed at trial. A prolonged examination of the merits is generally neither necessary or desirable. (at p. 337)
  1. The low RJR-MacDonald threshold for the establishment of a serious issue is the one used by this Court in the context of contested elections (see, for example, Gopher v. Moccasin et al, 2004 FC 1750), and will be applied here.

Should Mr. Mainil's Application for Judicial Review Be Dismissed on a Summary Basis?

  1. Assuming that I have the jurisdiction to do so, I am also not prepared to dismiss Mr. Mainil's application for judicial review on a summary basis. As is the situation with many emergency injunction applications, the parties in this case have been scrambling to put together their materials, with supplementary affidavits being filed up until the last minute. Mr. Mainil's application for judicial review has only just been filed, and he has not, as yet, had an opportunity to file an application record.
     
  2. The question of whether the results of the 2004 Director's election should be set aside is a question to be determined when Mr. Mainil's application for judicial review is finally heard. By that time, each party will have had a proper opportunity to put together complete records, and to cross-examine the opposing party or parties on their affidavit material, should they deem it appropriate to do so.
     
  3. Further, other persons with an interest in the outcome of this proceeding, who have only recently been provided with notice of this proceeding, will have a proper opportunity to seek intervener status, should they wish to do so.
     
  4. In these circumstances, I see no basis for depriving Mr. Mainil of his day in court at this stage in the proceedings.
     
  5. If the CWB is concerned about the ramifications that these proceedings may have for its ongoing ability to operate, there is nothing to preclude it from seeking an expedited hearing of Mr. Mainil's application for judicial review.

Is There a Serious Issue Here?

  1. I have carefully considered all of Mr. Mainil's and Mr. Jackson's submissions with respect to what they say are the various errors committed by the CWB and/or MNP with respect to the conduct of the 2004 Directors' election.
     
  2. It is clear that MNP is in technical breach of section 20 (2) of the Regulations, which stipulates that:
Quote:
The Election Co-ordinator, in the presence of independent scrutineers appointed by the Minister, shall in the following order:

a.
sort the ballots by electoral district ...
  1. It is common ground that MNP has already sorted the ballots, by district, outside the presence of the independent scrutineers.
     
  2. I need not decide whether, by itself, this would constitute a serious issue, as I am satisfied that a serious issue exists with respect to the failure of the CWB and MNP to include the Omitted Producers on the voters list.
     
  3. Section 7 (1) of the Regulations imposes a duty on the CWB to provide the Election Co-ordinator with a list of the producers who are named in a Permit Book on the day that the list is sent, or who were named in a Permit Book during the previous crop year. As a result of a problem with the computer program used to generate the list, the CWB failed to do so here.
     
  4. The result of this error was that approximately 200 voters in Mr. Mainil's district were not sent their ballots at least 25 days before the close of the election period, as required by section 17 of the Regulations. The 25-day period presumably allows for enough time for voters to get the material, ponder his or her choices, and return their completed ballots to the Election Co-ordinator in a timely fashion. It also affords candidates a period in which to contact prospective voters and to seek their support.
     
  5. In the case of the Omitted Producers, ballots were mailed to these individuals approximately one week before the close of the election period, seriously limiting the time available to both voters and candidates to do any of these things. Further, the affidavit of Peter Eckersley, filed on behalf of MNP, discloses that at least some of the ballots likely did not reach voters prior to the close of the election period.
     
  6. This is arguably more than a 'technical breach', and in my view, constitutes a serious issue.

Will Irreparable Harm Result if the Injunction Is Not Granted?

  1. Mr. Mainil submits firstly that Canadian grain producers generally will suffer irreparable harm if the ballots are counted and the election results announced. The entire process will suffer a loss of respect and integrity, Mr. Mainil says, if the election is completed in light of the flaws in the process.
     
  2. The case law is clear that on an application for an interlocutory injunction, the question is not whether third parties may suffer irreparable harm, but whether the individual seeking the injunction will himself suffer such harm: see Dodge v. Johnson, 2003 FCT 36 (FCTD).
     
  3. Insofar as Mr. Mainil himself is concerned, he submits that if the election is allowed to proceed, and if he is unsuccessful, he will be substantially prejudiced by the announcement of the results, and there would be no way to remove the taint of this election. I do not accept this argument.
     
  4. The evidence in support of irreparable harm must be clear and non-speculative: Nature c. v. Sci-Tech Educational Inc., (1992), 141 N.R. 363 (FCA). There is no evidence to support Mr. Mainil's claim that he will be irreparably harmed by the announcement of the election results, beyond his bare assertion that this would be the case. I also note that a similar argument was rejected by the British Columbia Supreme Court in Bob v. British Columbia, 2002 BCSC 733.
     
  5. Finally, Mr. Mainil submits that he will suffer irreparable harm if the votes are opened and counted, as it will no longer be possible to track which voters were able to vote, and his ability to demonstrate the effect of the problems in the electoral process will be lost.
     
  6. I have found that a serious issue exists with respect to the Omitted Producers. The CWB and MNP advise that it is possible to keep track of these votes by means of the bar code on the envelopes. They have further advised that they are quite prepared to do so, if so ordered by the
    Court.
     
  7. I am satisfied that this will address the concern raised by Mr. Mainil, and accordingly I order that the CWB and MNP keep track of the votes of the Omitted Producers. The records should include reference to the bar code only, and not the voters' names, so as to maintain the anonymity of the voters as required by section 23 of the Regulations.
     
  8. While I have some concern with respect to Mr. Mainil's standing to challenge the process in electoral districts other than the one in which he is running, the issue was not explored by the parties, and I will leave this question for another day. In the meantime, records should be kept with respect to the votes of the Omitted Producers in all four of the disputed electoral districts.

Does the Balance of Convenience Favour the Granting of the Injunction?

  1. Mr. Mainil submits that it would be better to have no directors at all in the disputed districts than to have directors who were improperly elected, and that, therefore, the balance of convenience favours the granting of an injunction. I do not agree.
     
  2. In my view, the balance of convenience strongly favours allowing the election to proceed. If an injunction were granted, as of December 31, 2004, producers in four districts would be without representation at the CWB.
     
  3. While the eleven remaining directors would constitute a quorum, allowing the CWB to operate, tens of thousands of grain producers would be effectively disenfranchised until such time as the matter is finally resolved. This is particularly problematic, as it appears that there are going to be at least two significant events for the Board of Directors in the upcoming weeks.
     
  4. According to the affidavit of Deborah Harri, the CWB has planned a major consultation with farm leaders regarding the future of the CWB to take place in early January of 2005. A couple of weeks later, the CWB will be holding a two-day strategic planning session for the Board of Directors in order to further develop and advance the CWB's strategic plan. It is clearly important that Districts 4, 6, 8 and 10 have input into this process.
     
  5. As a consequence, I am satisfied that the balance of convenience favours the CWB.

Conclusion

  1. Having failed to establish that he will suffer irreparable harm, or that the balance of convenience favours the granting of an interlocutory injunction, Mr. Mainil's motion is dismissed. Costs shall be in the cause.

ORDER

THIS COURT ORDERS that:

  1. The CWB and MNP shall keep a record of the votes of the Omitted Producers in each of Electoral Districts 4, 6, 8 and 10, recorded by reference to bar code only;
     
  2. The motion is otherwise dismissed, with costs in the cause.

"Anne L. Mactavish"
Judge

FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2191-04
STYLE OF CAUSE:
ARTHUR MAINIL
v.
THE CANADIAN WHEAT BOARD and
MEYERS NORRIS PENNY and
TOM JACKSON and ROD FLAMAN

PLACE OF HEARING: Ottawa, Ontario

DATE OF HEARING: December 20, 2004

REASONS FOR ORDER AND ORDER:
The Honourable Madam Justice Mactavish

DATED: December 23, 2004

APPEARANCES:
Mr. Stephen J. Orlowski FOR APPLICANT
Mr. Jonathan B. Kroft FOR RESPONDENT CANADIAN WHEAT BOARD
Mr. David E. Swayze FOR RESPONDENT MEYERS NORRIS PENNY
Mr. Tom Jackson ON HIS OWN BEHALF
Mr. Roderick Flaman ON HIS OWN BEHALF

SOLICITORS OF RECORD:
Orlowski Law Office FOR APPLICANT
Estevan, Saskatchewan

Aikins, MacAulay & Thorvaldson LLP FOR RESPONDENT CANADIAN WHEAT BOARD
Winnipeg, Manitoba

Meighen, Haddad & Co. FOR RESPONDENT MEYERS NORRIS PENNY
Brandon, Manitoba