Administrative law – Decisions of administrative tribunals – Dairy Farmers – Powers under legislation – Milk quotas – Legislation – Validity of legislation – Ultra vires – Judicial review – Compliance with legislation
Taylor v. Dairy Farmers of Nova Scotia,  N.S.J. No. 624, 2010 NSSC 436, Nova Scotia Supreme Court, November 25, 2010, P.J. Duncan J.
The applicants are dairy farmers in Nova Scotia who objected to certain regulations enacted by their governing body, the respondent Dairy Farmers of Nova Scotia (“DFNS”). The regulations in question, the Total Production Quota Regulations, N.S. Reg. 225/2009 (“the Regulations”) cap the price for the exchange of saleable milk quota at a maximum value that is below the value currently being obtained in trading on the quota exchange. The applicants sought a declaration that the Regulations were ultra vires and invalid.
The court first considered whether the Regulations were a proper exercise of authority delegated by the legislature. The court noted that the Regulations were enacted pursuant to the Dairy Industry Act, which establishes a Natural Products Marketing Council. The Dairy Industry Act grants the Council regulatory authority over natural products generally and has the specific authority to make regulations with respect to quota. The court further noted that the Dairy Industry Act also provides the Council with the statutory authority to delegate its powers to the DFNS. Here, those powers have been so delegated by way of the Delegation of Powers to Dairy Farmers of Nova Scotia Regulations and the resulting Regulation was valid.
The court next considered the applicants’ alternative argument that milk quota is “property” and that the legislative scheme mandates expropriation of that property without compensation and without statutory authority to do so. This argument was also rejected by the court, which held that although saleable milk quota has value and is an important component in the financing of investment in the diary industry, it does not have the character of “property” capable of a defacto expropriation. Moreover, there was no expropriation because there was no property that had been transferred to the state.
The court concluded that the Regulations were intra vires and valid as being a lawful exercise of legislative authority delegated to the DFNS by the Natural Products Marketing Council pursuant to the Dairy Industry Act.
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