Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West

Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 Stone Road West

Guelph, (Ontario) N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: AFRAAT@ontario.ca

Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email: AFRAAT@ontario.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL:

Lechowicz v Chicken Farmers of Ontario

Lechowicz v CFO 1998 ONAFRAAT 3

STATUTE:

Ministry of Agriculture, Food and Rural Affairs Act

HEARING:

September 2, 1997

DATE OF DECISION:

January 9, 1998

1998-03

NEUTRAL CITATION:

1998 ONAFRAAT 3

Lechowicz v Chicken Farmers of Ontario

IN THE MATTER OF THE FARM PRODUCTS MARKETING ACT AND SECTION 16 OF THE MINISTRY OF AGRICULTURE AND FOOD ACT.

AND IN THE MATTER OF:

An Appeal to the Farm Products Appeal Tribunal by Edward M. Lechowicz from the December 27, 1996 decision of the Ontario Chicken Producers’ Marketing Board (now the Chicken Farmers of Ontario) wherein the Board found that Mr. Lechowicz had violated Regulation 402 made under the Farm Products Marketing Act and General Regulations No. 945-1992, No. 1106-1994 and No. 1165-1994 made by the Board under the Farm Products Marketing Act by the production and marketing of 139,010 kilograms of chicken that were not reported to the Board. As a consequence of its findings, the Board assessed Mr. Lechowicz license fees, CCMA levies and excess production levies and cancelled the units of basic production quota in respect of N½ Lot 15, Concession 7, Township of Delhi, effective Quota Period A-13.

Before:

Mr. James Rickard, Chair; Dr. Denis O’Connor, Vice-Chair; Mrs. Anna Andres, Member; Mr. Murray Cardiff, Member; Mrs. Karen Ratcliffe, member

Appearances:

Mr. John Judson, Counsel to the appellant, Mr. Edward Lechowicz.

Mr. Norman Peel, Counsel to several other appellants.

Mr. Geoffrey Spurr, Counsel to the respondent, the Chicken Farmers of Ontario.

Mr. Terry Hill, Counsel to the respondent, the Chicken Farmers of Ontario

Mr. Tom Graham, Counsel to the Tribunal.

DECISION OF THE TRIBUNAL

This matter was heard in Guelph, Ontario, commencing on September 2, 1997, with final summation on December 15, 1997. Edward M. Lechowicz appealed to the Farm Products Appeal Tribunal (the Tribunal) from a December 27, 1996 decision of the Ontario Chicken Producers’ Marketing Board (now the Chicken Farmers of Ontario), hereinafter referred to as the Board, wherein the Board found that Mr. Lechowicz had violated Regulation 402 made under the Farm Products Marketing Act and General Regulations No. 945-1992, No. 1106-1994 and No. 1165-1994 made by the Board under the Farm Products Marketing Act by the production and marketing of 139,010 kilograms of chicken that were not reported to the Board. As a consequence of its findings, the Board assessed Mr. Lechowicz license fees, CCMA levies and excess production levies and cancelled the units of basic production quota in respect of N½ Lot 15, Concession 7, Township of Delhi, effective Quota Period A-13.

The applicable section of Regulation No. 402 is as follows:

Section 6 (1): All chicken shall be marketed through the local board.

The relevant sections of General Regulation No. 945-1992, No. 1106-1994, and No. 1165-1994 are as follows:

Section 4 - Production of Chicken

(1) All chicken shall be produced on a quota basis.

(3) No person to whom a quota has been fixed and allotted for producing chicken

shall produce any chicken in excess of such quota.

Section 5 - Marketing of Chicken

(1) All chicken shall be marketed on a quota basis.

(3) No person to whom a quota has been fixed and allotted by the board for the marketing of chicken shall market any chicken in excess of such quota.

Section 8 - Receiving Chicken

1. At the time of sale of chicken the producer shall complete three copies of the producer receipt for each load of chicken received by the processor in Form 6 and deliver such copies to the processor or the processor’s agent. The producer shall ensure that the Form 6 is complete and accurate in all respects and is a Form 6 issued in respect of the registered premises on which the chicken were produced. The processor or the processor’s agent shall sign the three copies of the producer receipt and return two copies to the producer and retain the yellow copy. The yellow copy must accompany the vehicle in transit to the processing plant.

Licence Fees

14 (1) Every producer shall pay to the board licence fees at the rate of $1.20 per 100

kilograms, live weight, of chicken sold. (General Regulation No. 945-1992)

(1) Every producer shall pay to the board licence fees at the rate of $1.10 per 100 kilograms, live weight, of chicken sold. (General Regulation No. 1106 -1994)

(1) Every producer shall pay to the board licence fees at the rate of $1.05 per 100 kilograms, live weight, of chicken sold. (General Regulation No. 1165-1994)

(2) Any person who receives chicken shall deduct from the monies payable for the chicken any licence fees payable to the board by the person from whom he receives the chicken and shall forward such licence fees to the local board at its office not later than 7 days from the last day of the week the chicken was received.

(3) Every producer shall pay to the board at its office all licence fees payable by him under subsection (1) that were not deducted and paid to the board in the manner prescribed by subsection (2) in respect of chicken sold in any month not later than the 15th day of the next following month.

Section 15 - Producer Information

1. At the time of receipt of chicks, every producer shall complete, for each load of chicks received, three copies of a Chick Placement Report in Form 3 from the book of Form 3’s provided to the producer by the board in respect of the premises at which the chicks are placed. The producer shall ensure that the Form 3 is complete and accurate in all respects and shows the producer’s name, the producer’s file number, the date of delivery of the chicks, the location of the premises on which the chicks were placed, the number of sexed chicks placed, showing pullets and cockerels (including extras), the hatchery or dealer-broker’s name, and the crop quota period in which the chicken will be marketed.

Preliminary Matters

The Board conducted an investigation into the operation of the processing facility known as J. M.. Watts Poultry Ltd.(Watts). During this investigation suspicions arose that some producers might be involved in shipping chicken to Watts that was not being reported to the Board. Following the investigation, the Board conducted several producer hearings and found violations of the Board’s marketing regulations. As a result of these findings, the Board has imposed penalties on producers. The Tribunal has received several appeals from producers who are aggrieved by decisions of the Board. At a prehearing conference of the solicitors for the producers, the Tribunal agreed to have a joining of these appeals for the purposes of hearing evidence common to them all, with the details of each individual case to follow the common evidence.

At the outset of this hearing Mr. Judson, counsel to Mr. Edward Lechowicz, reminded the Tribunal that the Statutory Powers Procedure Act (SPPA) makes it clear that hearings such as the ones under consideration can only be joined with the consent of the parties. He said that Mr. Lechowicz did not consent to having the matters joined for either a common overview of facts or preliminary rulings on procedure.

Mr. Peel advised the Tribunal that his clients also were concerned about the proposed procedures and had withdrawn their consent to a combined hearing.

Mr. Spurr advised the Tribunal that the Board had consented to a combined hearing and to presenting the Board’s case first at the hearing in order to make efficient use of the Tribunal’s time. Now that the appellants had withdrawn their consent, the Board was still prepared to present its case first even though this is contrary to the normal procedure of the Tribunal.

The Tribunal decided to proceed and hear the appeal of Mr. Lechowicz only. With the consent of the Board, the Tribunal decided to vary its normal procedure of having the appellant present his case first, and allowed the Board to present its case first.

Mr. Judson then objected to the admission of hearsay evidence at the hearing. He pointed out that some of the documents filed with the Tribunal were summaries of events that had been prepared by the Board staff and as such, were not evidence before the Tribunal until they had been proven by the Board. Mr. Judson requested that the evidence binders not be referred to by the Tribunal until received into evidence. Mr. Spurr indicated that some of the documents were obtained by search warrant and the author was unknown, some are documents prepared in the normal course of doing business and therefore are admissible as business records. The Tribunal decided that it would admit hearsay evidence and assess the weight to be applied to this evidence, but pointed out that it needed the best evidence available to assist it in making a decision on this appeal.

At the request of Mr. Judson, the potential witnesses were excluded from the hearing room with the exception of one person to represent the Board and one person to represent the appellant. The Tribunal then proceeded to hear the case by way of sworn testimony from the witnesses.

The Background

During the months of June, July and August of 1994, field inspectors for the Board making routine visits to the scale used by Watts to weigh live chicken, found handwritten notes that appeared to be instructions to:

• go to a farm,

• load with live chicken,

• go to the scale and weigh the load and print a weight ticket,

• print a second weigh ticket showing a reduced weight.

As a result of finding these notes, one of the Board’s staff was sent to observe the weighing of truck loads of chicken at the scale used by Watts from August 24, 1994 through September 19, 1994.

On January 12, 1995, search warrants were executed at the Watts processing plant, at the trucking company used by Watts (DAC Checker Transport) and at the business address of Watts bookkeeper, Kim Slack. On January 16, 1995, a search warrant was executed at the business address of Brant Poultry, one of the Watts live chicken catching crews.

On July 20, 1995, letters were sent to all chicken producers who had marketed chicken to Watts in any quota period between P-08 and P-14. The letter contained information on marketing of chicken from their farms that had been reported to the Board. These producers were asked to check the reported figures against their production records and advise the Board if there were any discrepancies. Mr. Lechowicz did not respond to this letter.

An extensive analysis of all of the information collected during the investigation was undertaken by the Board staff. As a result of this analysis, several producer hearings were conducted by the Board. In cases where, after the hearing, contravention of the Board regulations were determined, a penalty was assessed by the Board. Several of the penalized producers appealed to the Tribunal. Mr. Edward Lechowicz is one of these producers.

The Issues

There are two issues before the Tribunal. Firstly, did Mr. Lechowicz produce and market chicken without reporting this production to the Board? Secondly, if Mr. Lechowicz did produce unreported chicken, is the penalty applied by the Board - cancellation of all the basic quota units held by Mr. Lechowicz - appropriate in the circumstances?

The Evidence and the Findings

Mr. John Heggie, a Plant Officer of the Board for the past 5 years, told the Tribunal that he functions as inspector of chicken killing plants covering the area from Burford to Windsor, including the Watts plant. He attends at plants on a random basis, checking the documentation that arrives with the chickens to make sure the loads of chicken have proper documents and checking the weights of the loads looking for discrepancies. Whenever irregularities are found, he files a report with his supervisor, Mr. Chris Vanderkooy.

Mr. Heggie told the Tribunal that the primary scale used by Watts is on a site about one mile from the plant and is known as the Homeland Grain Scale (the Homeland scale). The scale pad is situated off the road and behind it further in on the property is a scale house; to either side and behind are grain elevators and dryers. The scale pad at the time in question was metal and large enough to accommodate a tractor trailer. The scale house contained a digital display for weights and a printer used for printing weigh tickets.

Mr. Heggie said that he found notes in the garbage can at the scale house while conducting a routine inspection of the facilities. These notes contained instructions to pick up a load of chickens at a farm location and to reduce the printed weight of the load by a set amount. Mr. Heggie said that he believed that some notes were found prior to those he found.

Mr. Heggie told the Tribunal that, for a period of three weeks, he went to the Homeland scale and positioned himself so he could observe the scale pad and scale read out without being observed by truck drivers who were using the scale. He checked the scale display and printer, the time and date on the scale and that the scale was zeroed and then he observed what happened. In all cases, he observed that the tractor was left running with its lights on. The driver went into the scale house and put his paperwork on a table and “did his weights” while Mr. Heggie observed the weighing process without the driver’s knowledge. Mr. Heggie said that the weighing procedures varied by driver. Some nights no variations were made to the weights; on other nights five out of six loads would have the weight adjusted by the driver. In some instances, the driver would punch into the calculator, then go to print head and hit the tare button and put in a weight that varied from 85 to 2500 kilograms and then hit the enter button. This procedure took the gross, subtracted the figure that had been entered into the tare and gave a net difference. When the driver made an adjustment to the weight more than one weigh ticket was printed. Generally the driver printed one or two copies of the true weight and the adjusted weight and took all the copies with him. Mr. Heggie said that on one evening the driver came in, punched in a weight into the tare but the weight would not print with the tare, so he moved the truck back and forth until the weight shown on the scale satisfied him and he printed that weight. This was for a load of turkeys.

Mr. Heggie identified one of the drivers involved in adjusting weights as Scott Holt. Mr. Heggie said that he did not participate in the analysis of the evidence, he merely made his observations and reported to his supervisor what he had seen. Mr. Heggie identified the reports that he had filed with his supervisor and these were entered as exhibits at the hearing.

Ms. Kim Slack told the Tribunal that she worked under the name KB Services providing book keeping services to Ontario Chicken, which in turn provided services to Watts. Ontario Chicken was in the business of procurement for Watts and was paid on a per kilogram basis at the rate of 3¢ per kilogram. She was paid on an hourly basis by Ontario Chicken She said she visited the Watts plant infrequently, sometimes she would go once every 3 to 4 weeks, sometimes twice a week and then not for months.

Ms. Slack said that Brian Snyder hired her to work for Ontario Chicken but she got overall direction from Ted Ridgewell, the owner of Watts. She said she did general book keeping, accounts payable and receivable, payroll, scheduling live chicken, took deposits to the bank, reconciled bank statements and similar types of service for Watts. She shared this work with whomever she had to help her at the time. In 1994, Millie Dennis was one of her helpers.

Ms. Slack told the Tribunal that she worked with the catching crews to schedule the loading of chicken onto DAC Checker Transport (DAC) trucks for delivery to Watts. She used Brian’s Poultry (Brian Herman), Brant Poultry (Scott Holt) or farmers as catchers for themselves when arranging catching. She dealt with Adrian Scherders or Jerry at DAC to arrange the trucking. She said the farmer would tell her the number and size of birds to be picked up. The size was based on the age of the birds.

Ms. Slack said she prepared producer settlements for Watts but that others did as well. She said anyone who had access to the Watts computer could prepare settlements. The settlements show the weight of chicken paid for, the number of birds, the number of condemned birds, the price per kilo, the Board fees and levies, the GST and like items. The supporting documents provided by Watts varied. Sometimes the documentation was compete and sometimes there were no supporting documents provided. When the settlement was prepared, a cheque would be issued by Mr. Ridgewell. Ms. Slack did not have signing authority for cheques. She said she did not have access to cash and was not aware of any cash payments being made as part of producer settlements.

Ms. Slack said she also prepared Form 68’s to be sent to the Board. She said that she was certain that Mr. Ridgewell had asked her not to report some production but she was not sure if the growers were paid for that production. She said she kept a numeric file of the settlement packages that she prepared. Ms. Slack identified sheets marked INVW with a number after it as documents that she had prepared as part of settlement packages that she kept in this numeric file.

Ms. Slack said she found that the growers aimed to produce a total weight as opposed to a category. She said Watts would get an allotment for each signed producer. As a rule she did not talk to producers at the beginning of the quota period. She had the producers allotment and the number of chicks placed. She got the chick placement numbers from the hatchery.

Ms. Slack told the Tribunal that she knew that some producers wanted to hide kilograms of production from the Board. She admitted she probably prepared some documentation that showed unreported kilograms.

When filling out the Form 68’s, Ms. Slack said she got weights from whomever she could at the plant or from weigh tickets.

Ms. Slack told the Tribunal that Mr. Ridgewell had instructed her not to report the full amount of live chicken production marketed and she believed the full amount was never reported to the Board. She said she did not know if the producer was paid for the unreported production or not. She said she received the instructions not to report all the production before the birds left the producer’s premises.

Ms. Slack identified spreadsheets filed as exhibits at the hearing as being similar to papers that she had prepared. She identified some that had her writing on them. While she was not certain, she guessed that the column headings on these spreadsheets indicated the following:

$ = the gross or net paid value.

B. Birds = black birds.

B. kgs. = black kilograms.

B$ = black dollars.

She said to her ‘black’ means unreported kilograms of chicken.

Ms. Slack said on occasion she would relay instructions to DAC on a target weight for a load of chicken. She said she would give the target and then it was DAC’s problem to handle.

She said she sometimes was required to make settlements for unreported kilograms. She had prepared settlements with no license fees, CCMA levy or GST deducted but she believed these were not always for ‘black’ chicken. She understood they were sometimes premiums and sometimes fowl and sometimes these settlements were for unreported kilograms of chicken.

Carla Holt told the Tribunal that she and her former husband, Mr. Scott Holt, operated a chicken catching company under the name of Brant Poultry. She said her responsibility was to set up the crews, maintain the payroll records and catching crew paperwork. She said Brant Poultry had eight to ten catchers on the payroll. She said Brant did not catch chicken for processors other than Watts on a frequent basis. She said invoices were issued based on the weight of chicken caught and were paid weekly.

Ms. Holt said that the farm location, number of chickens to catch and time to arrive at the farm came by phone from Kim Slack from Watts. She said Kim Slack told them how many birds to catch, also if the number of birds to load was to be higher than the number of birds shown on the Form 6. She said she took this information and put it on her computer to generate a catching run sheet. This is a paper with farmer’s name, location of farm, etc. She gave this sheet to the crew and at the end of the week they returned the week’s sheets and that is how she did the payroll. The catchers were paid by weight. She said she got the weight caught by calling Ace Scherders or Kim Slack. Sometimes when Scott Holt drove the truck for DAC she would get the weigh slips from him when he came home.

Ms. Holt told the Tribunal that Kim Slack would tell her to tell the crew to catch more birds than were shown on the papers. For example, she said Kim would tell her to catch 5,500 birds but only show 4,000 on the papers. She also said that Scott Holt was instructed to move the truck around on the scale to shave the weights. She said the chicken catching crew knew about this happening. She said the crews talked to the farmers and the farmers told them what they wanted shipped out.

Ms. Holt said that they sometimes had disputes with their catchers on the amount of their pay. The catchers did not think they were paid enough. When this happened she would call and get a weight from Kim Slack and then call Adrian (Ace) Scherders and if the weights provided were different, she would use Ace’s weight if it was the same as Kim’s or higher.

Ms. Holt said that in 1994 Mr. Lechowicz was involved in not reporting all of the chicken shipped from his farm. She said when she did the paperwork for the catching crew she would be given two weights, a false weight and the true weight, of chicken from the Lechowicz farm.

Jason Goodbrand told the Tribunal that he worked as a chicken catcher for Brant Poultry from 1992 through 1996 along with eight other people. He said that he knew Mr. Edward Lechowicz and has been to the Lechowicz farm numerous times. He said there is only one barn at this farm and the residence is located elsewhere. He said that Mr. Lechowicz was not always present when the crew arrived at the farm and so either he or Mike Mitchell, another member of the catching crew, would get the spare key, open the barn and phone Mr. Lechowicz. At this farm, the Form 6 was in the barn sitting on the steps to the second floor. If the form was blank, Mr. Lechowicz was coming to the farm; if it was filled out with the date and his name, he was not coming to the barn that night.

Mr. Goodbrand told the Tribunal that Mr. Lechowicz would tell the catchers which floor to take first and if extra birds were to be put on the truck, but not on the sheets. Mr. Goodbrand said that Mr. Lechowicz had given him specific instructions on the number of chickens to load and the number to put on the forms and he complied. Mr. Goodbrand said that if Mr. Lechowicz wanted 1,000 birds extra, we would fill 500 crates at 14 and the rest at 12 and mark them on the Form 6 as 12 per crate. That is the only way he loaded extra birds.

Mr. Goodbrand told the Tribunal that he took the truck owned by Watts known as the “Top Kick” on occasion to pick up chickens. He said he drove this truck to Mr. Lechowicz’s farm, loaded it and delivered the load to Watts. Mr. Ridgewell would instruct him on how much weight to shave from the weight of the load. He shaved the weight from the load by driving one wheel of the truck partially off the scale.

Mr. Goodbrand told the Tribunal that there were always extra birds put on the truck and not marked down. He said that Mr. Lechowicz gave him instructions to catch more birds than he was told by the driver to load. If there was any differences between the run sheet, the instructions from DAC and the instructions from Watts, someone would call Mr. Ridgewell. Mr. Ridgewell’s instructions were always the final word on the matter.

Mr. Scott Holt, owner of Brant Poultry and a driver for DAC, told the Tribunal that he received instructions to reduce the weight on loads that he hauled in 1994. He could not recall how these instructions were delivered to him. He said he also received instructions to put more birds in the crates than shown on the Form 6.

He described to the Tribunal how he would reduce weights by jockeying the truck around on the scale. Mr. Holt told the Tribunal that he drove the truck and followed the instructions given. He said that, on occasion, he drove the “Top Kick” truck from Watts to the Lechowicz farm to pick up chicken. Mr. Holt said that he hauled loads of ‘black’ chicken and when this occurred, he would know before he got the truck that the load would not have any paperwork with it.

Mr. Marshall Featherston told the Tribunal that he is a driver for DAC and that he knows Mr. Lechowicz from being on his farm in 1994. He said he received his instructions from Mr. Scherders. Mr. Scherders would provide detailed instructions on how to get to the farm, the number of birds to load per crate and any other information necessary for him to perform his duties. He said he was often told what to do with the weight and bird count on the load. He would be told to load so many birds per crate and put a lessor number on the Form 6. He was always told by Mr. Scherders how much to reduce the weight of the load. He reduced the load weight by running one wheel partially off the platform and then later, by adjusting the scale in the scale house.

He said that he was familiar with the term ‘black load’. When hauling a ‘black load’ he was instructed to go to Watts and pick up an old Form 6 out of the cabinet, take this Form 6 to the farm and load the chicken and use that Form 6 for that load.

Mr. Robert Johnson told the Tribunal that he was a driver working for DAC in 1994. He was given written instructions from Mr. Scherders telling him what time to be at the farm, which farm to go to, how many birds to load, how much weight to take off the trailer or not to take any weight off and to modify the bird count if necessary.

Mr. Johnson told the Tribunal that to modify the weight of the load he would take one wheel partially off the scale, walk to the scale house and look at the display to see if the desired weight was displayed and if not he would go back to the truck and move it some more and repeat the process until the correct weight was shown. He would then print the weigh tickets. He said he did not master the manipulation of the scale display so had to continue to walk back and forth and move the truck.

According to Mr. Johnson, Mr. Scherders is meticulous in how he operates the business. Everyone gets complete and clear instructions.

Mr. Adrian Scherders told the Tribunal that he is a part owner of DAC. He is the A in DAC. DAC is primarily a transporter of live poultry and is licensed by the Chicken Farmers of Ontario to haul live chicken. In 1994, DAC hauled live chicken to Watts as well as a number of other processors. When hauling for Watts, DAC was paid on a per load basis.

Mr. Scherders said he would receive instructions from Watts on the farm location, load time, number of birds to pick up and size of birds so he could assign proper sized trucks and dispatch drivers with proper equipment to haul the chicken to Watts. He received directions to the farm and kept copies in his office so he could provide them to the drivers. Mr. Scherder told the Tribunal he would provide written instructions to the drivers on:

• the farm locations which he had in his file,

• the estimated size and weight of the birds for that night’s pick up,

• crate count,

• any other information, such as weather etc., that was deemed to be important,

• bill of lading.

Mr. Scherders said that the bill of lading is part of the transport regulations and must be carried on all trailers. The bill of lading conveys information on farm pick up, point of destination, time of loading, time finished loading, number of birds on the trailer, crate count, manner of truck tarping, weather conditions and other information. The truck driver fills out the bill of lading after the loading is completed.

Mr. Scherders identified documents found at the Homeland scale as his directions on how to go to a particular farm and the manner in which the truck was to be loaded and weighed. The instructions directed the driver to load the chickens at the farm, fill all the crates on the truck and to reduce the weight of the load by 20%. The driver was to reduce the weight by manipulating the scale. Two weigh tickets were to be printed, one with the tare weight and actual weight of the load and one with the tare weight and reduced or shaved weight of the load.

Mr. Scherders said that weight reductions were asked for or required of DAC on some occasions by Ted Ridgewell from Watts. He told the Tribunal that DAC did not get paid for doing this service nor did DAC compensate its drivers for doing it.

Mr. Scherders said that quite a few DAC drivers hauled to Watts but only a few were asked to reduce weights. He recalled asking Marshall Featherston, Bob Johnson and Scott Holt to perform this service.

Mr. Scherders said that he recorded the weight information because Watts had a tendency to not keep their books very well. He was sometimes asked to convey this information. Watts did not ask him to keep a record. He said he has no idea which weight was reported by Watts to the Board.

Mr. Scherders identified a 1994 daily journal that he was in charge of and kept in his office. He said he recorded all of the transportation movements for the DAC Paris office in that daily journal. The daily journal records the point of origin and point of delivery of each load hauled. Usually, bird numbers, tractor unit, driver, trailer unit, farm, and sometimes the number of loads expected at a farm are recorded in the journal. Mr. Scherders said that the journal was completed on a daily basis after the load was hauled.

Mr. Scherders also identified a notebook as a document that he had control of and maintained in his office at the DAC Paris location. He said this book is similar to the daily journal in that it identifies the transportation of product to a customer and summarizes the activity to each customer. Mr. Scherders told the Tribunal that the entries in the notebook showed:

• the date of processing at the plant,

• the farmer’s name and location,

• tractor and trailer number,

• driver,

• the net weight of the load,

• the hauling charge.

In cases where two net weights were shown, Mr. Scherders said that the number beside the letter “A” was the actual weight of the load and the number beside the letter “S” was the shown or reduced weight of the load.

He said that a ‘black load’, in reference to the DAC books, meant a load of chicken without assigned quota. He did not know if these loads were reported to the Board. Notations in the book reading ‘reuse slip’ meant that a trailer would be reloaded later using the same Form 6. Mr. Scherders said that he would not bill for ‘black loads’ on regular billings to Watts and these charges were shown in various forms. He said he knew before the truck left the yard if the load was intended to be a ‘black load’.

Mr. Scherders identified several entries in his books indicating that DAC had hauled ‘black loads’ from the Lechowicz farm, had reused Form 6’s for loads hauled from the Lechowicz farm and had reduced weights on loads hauled from the Lechowicz farm. All of these occurrences were in 1994.

Mr. Scherders told the Tribunal that, from time to time, farmers or catchers would call for weights but he never released weights to them. He said he received his instructions from Watts and he followed those instructions.

Mr. John Neil, a plant officer with the Board, told the Tribunal that he generally attends processing plants to inspect the live loads of chicken and to perform a count on the loads to ensure they are as represented on the paperwork. Generally he obtains the paperwork with the load, records it in his notes and inspects the load if it is still available for inspection. In performing his duties, he attempts to make his inspections on a random basis.

He said that he has performed, on a general basis, a financial analysis of the information available in the documents relative to Mr. Lechowicz’s dealings with Watts. He started his analysis at P-07 when the books seized from Watts indicated that Mr. Lechowicz had been completely paid. He found a difference of $91,500 between the payments reported to the Board and the payments recorded for Mr. Lechowicz for the periods P-07 to P-14. Some of these payments had been recorded by Watts as payment for premiums and some for fowl and some for chicken catching as opposed to payments for live chicken. Mr. Neal said that at the normal rate of three cents per kilogram one payment recorded as chicken catching amounted to the work of catching 460,716 kilograms of chicken which is significantly more than Mr. Lechowicz’s total annual crop allotment. Mr. Neal said there is no record of Mr. Lechowicz having quota from the other ‘Feather Boards’ and therefore he would not have access to fowl to sell to Watts.

Mr. Judson pointed out to the Tribunal that there was a $0.00 balance in Quota Period P-11 and Mr. Neil could have selected that point as a starting point for his analysis. Mr. Neil agreed with this observation.

Robert Mazun, a field officer for the Board, told the Tribunal that his involvement with the investigation started when he discovered notes giving instructions on how to reduce weights at the Homeland scale in June 1994 and progressed through to the search warrant that he executed on January 12, 1995. He then brought the evidence to the Board office and worked with other staff compiling the evidence. Mr. Mazun then identified several pieces of evidence presented to the Tribunal.

Kevin Thompson, Marketing Coordinator with the CFO, told the Tribunal that he has been with the Board since 1989 and is now responsible to oversee the implementation, monitoring and enforcement of the Board’s policies. He said that, for all practical purposes, he made the decisions on this investigation. He reported to Mr. Bill Doyle, the General Manager for the Board, and kept him informed of major issues. They discussed issues and when they did not agree on what to do, Mr. Doyle made the decision. Mr. Thompson said the Board ultimately makes the decision to have producer hearings after the staff make recommendations to the Board.

Mr. Thompson told the Tribunal that the regulations set out how chicken is to be produced. Under the regulations, production is allotted by the Board to each producer based on that producer’s basic quota holdings and any additional allotment that is available for that particular quota period. Once the quota period is completed each producer is responsible for reporting the actual production to the Board. Reporting includes the payment of all license fees and levies associated with this production. The producer is ultimately responsible for the accuracy of the reporting.

Mr. Thompson said that Form 6 documents are issued to producers in books of 50. It is a three part form with carbon and indicates that the white copy is to be sent by the producer to the Board, the yellow copy goes with the truck to the processing plant and the pink copy remains with the producer. Each form has a serial number which is registered to that producer. Each producer must use their own Form 6. Each Form 6 must be fully and accurately completed before the load leaves the farm gate. The truck driver is also responsible to make sure Form 6 is complete.

Mr. Thompson told the Tribunal that in late January, February and March 1995, staff of the Board attempted to meet with producers who had marketed chicken to Watts to let them know about the search warrants and that a preliminary review of evidence indicated substantial unreported production by a number of producers. He said that the producers were given the opportunity to provide information and a report was filed by field officer Bill Miedema who made the visit to Mr. Lechowicz’s farm on January 27, 1995. The producers did not appear to be concerned that there was evidence of weights being reduced. He said the Board’s investigation ended in 1995 but he was not sure of the exact date. Mr. Thompson told the Tribunal that a letter, signed by Mr. Chris Vanderkooy, dated July 20, 1995 was sent to all producers who marketed to Watts. This letter asks the producer to compare the information reported to the Board with their records and report to the Board any discrepancies.

Mr. Thompson told the Tribunal that when the notes were found at the Homeland scale in 1994, the Board staff were not certain what they were dealing with. Various courses of action were considered by the staff. They concluded that they should not do anything outside of normal practices until they were certain on how to deal with the situation. It is a normal practice to request a reweigh of a load if there is a specific reason. Reweighs are not done on a random basis because they can be a significant disruption to a processing plant’s operations. Mr. Heggie observed the weighing process at Homeland scale in August and September of 1994, the paperwork from Watts relative to that period was not filed until September or October. Staff went to the executive of the Board in January to inform them of the possibility of weighing irregularities at the Homeland scale and to seek approval to obtain search warrants. These warrants were obtained and executed in January 1995. All during this time, the Board staff attempted to follow their normal routines so as to not disrupt the marketing activity to Watts until there was substantial evidence of a violation.

Mr. Thompson explained the Board’s process of allotting and recording kilograms each quota period. He outlined the required forms and when in the production cycle they are required to be filed.

Form 100 is filled out by producers to indicate the crop cycle they are growing in and their home week.

Producers get Schedule 1, a notice of crop allotment. It is mailed to the producer about 13 weeks before the crop period and specifies the kilograms for that producer for that crop.

Form 101 is the contract between the producer and the processor. It indicates the category to be grown, the placement date and the marketing week. Both parties sign the form, then it is filed with the Board.

Form 3 is completed at the time the producer receives chicks from the hatchery. It contains the number and sex of the chicks placed, the date placed and the name of the hatchery.

Form 6 is sequentially numbered and issued to producers for each of their premises by the Board. Producers can only use a Form 6 that has been issued to them for their specific premises. A Form 6 must accompany the truck for each load of chicken marketed by a producer.

Form 68 is filed by the processor with the Board on a weekly basis. It is a record of all chicken purchased by the processor that week. Purchases are set out by Form 6 number showing for each load marketed by a producer the number of birds shipped, number of kilograms marketed, number of kilograms condemned by the meat inspector, the paid weight and levies paid to the Board and the Canadian Chicken Marketing Agency (the CCMA).

Mr. Thompson said that the Board staff summarizes all of the information as it arrives to create a ledger card for each producer for each quota period. The information arrives from the producer, the hatchery and the processor.

Mr. Thompson compared the information on the ledger card prepared from documents filed with the Board to the information contained in the DAC journal, the DAC notebook and documents seized under search warrants at Watts and Kim Slack’s residence. From this comparison he concluded that Mr. Lechowicz had marketed chicken in excess of his quota and not reported it to the Board during Quota Periods P-09 through P-14. He calculated the following amounts of unreported production:

Quota Period Amount in Kilograms

P-09 26,270

P-10 23,810

P-11 14,970

P-12 21,930

P-13 29,530

P-14 22,500

In making these calculations, Mr. Thompson assumed that the “A” weight in the DAC notebook was the actual produced weight for the load of chicken where the documents did not fully correspond.

Mr. Thompson told the Tribunal that a review of the ledger card information also indicated that something was wrong with the data. He noted that there was significant over placement of chicks and that the shipping weight of the birds was significantly lower than the expected weight of birds of the age and sex being reported. He filed with the Tribunal growth charts prepared by a chicken feed company which displayed the expected weight of birds at various ages. Mr. Thompson told the Tribunal this chart was generally available in the industry and is used as a guide by producers.

Mr. Ron O’Connor, chicken producer and Chair of the Board of Directors of the CFO, told the Tribunal there is a board of nine producers who represent the 1,050 chicken producers in the province. Mr. O’Connor explained to the Tribunal how chicken production takes place on his farm and the analysis that he does on each flock. One important aspect of this analysis is the feed cost which he does in conjunction with the salesperson from the feed mill. He told the Tribunal that the feed companies have a computer program that schedules the feed deliveries for each crop according to the sex and age of the birds so that the flock gets the proper amount of starter, grower and finisher. The feed mill uses this analysis to schedule deliveries to the farm. Based on this analysis, the producer generates his own cost of production and profit projections for the crop.

Mr. O’Connor said if there is a suspicion of unreported production by quota holders the producer is not identified to the Board. Staff outline the suspicions and recommend a hearing. The Board has to approve proceeding to a hearing. When the decision is made to conduct a hearing, the Board, or as many members of the Board as are available, sits as a hearing panel, hears the evidence and makes the decision on the issue before it. Each case is judged by the Board on its own merit.

Mr. O’Connor told the Tribunal that, if unreported production is determined by the Board then:

• Any unreported production is added into the producer’s records. This may mean over quota levies have to be paid.

• The over quota production is removed from the producer’s crop allotment six quota periods in the future.

• Each situation is different and is considered by the Board in determining the penalty to apply. The Board has assessed penalties of two times the number of kilograms involved up to five times the number of kilograms involved. The current practice is to assess a penalty of five times the number of kilograms involved.

Mr. O’Connor told the Tribunal that chicken producers operate in a supply managed system and the Board has a major concern if people produce outside the system. He said in the opinion of the Board, if it does nothing about unreported production then ultimately there will be no system of regulated marketing. He said orderly marketing is a privilege given to all chicken farmers by the government but it comes with responsibilities. The system is designed to give farmers and processors as much flexibility as possible to meet the market needs. Each farmer is responsible to abide by the rules. The way the system is set up by the Board, when a farmer decides to cheat and steal from his fellow farmers it is difficult to catch him because of this flexibility. In fairness to the majority who abide by the rules, the Board has a duty to make sure any penalty acts as a deterrent and delivers a message. He said you cannot manage supply if producers do not comply with the Board’s regulations.

Mr. O’Connor told the Tribunal that the Board has no precedent for this particular instance. The Board has never dealt with a situation with such a high number of unreported kilograms involved. In 1994, from the Lechowicz farm, there are 33 loads of misrepresented chicken, five ‘black loads’ with no reporting at all, involving a total of 139,010 kilograms of unreported chicken. The unreported production is 50% over the allotted production. He said the Board concluded that Mr. Lechowicz displayed constant and continual overproduction. The Board concluded after their hearing that Mr. Lechowicz was ungovernable and unmanageable. As a consequence of that finding, it was the Board’s view, that he should lose his privilege to be part of the industry and therefore the Board canceled the basic quota allotted to Mr. Edward Lechowicz.

Mr. Judson began his summation by stating that clearly Mr. Lechowicz was involved in marketing unreported chicken. Nonetheless, he urged the Tribunal to carefully consider the evidence and penalty under the following headings:

1. Standard of Proof.

2. Culpability.

3. Inconsistencies/Unreliability as to the Amount of Over Production.

4. Failure to Regulate.

5. Penalty.

STANDARD OF PROOF

Mr. Judson argued that the standard of proof which the Tribunal must apply is that which is set out in the case of Re: Bernstein and College of Physicians and Surgeons of Ontario (1977), 1977 CanLII 1072 (ON HCJ), 15 O.R. (2d) 447. The Divisional Court concluded that the Disciplinary Committee had not employed the proper standard of proof and had therefore acted improperly in making a finding of misconduct against the doctor. The Court established certain general principles to guide subsequent decision makers.

1. In cases involving serious consequences or penalties to the person who is subject to the proceeding, the person who is subject to penal proceedings is entitled to the benefit of any doubt which may arise upon the evidence (pg. 468);

2. In all cases, before reaching a conclusion of fact, the Tribunal must be reasonably satisfied that the fact occurred and whether the Tribunal is so satisfied will depend on the totality of the circumstances, including the nature and consequences of the fact or facts to be proved, the seriousness of an allegation made, and the gravity of the consequences that will flow from a particular finding (pg. 470);

3. The burden of proving the allegation against the defendants remains on the complainant or prosecution throughout.

In his summation, Mr. Spurr argued that this is not a criminal trial but an administrative hearing and the standard of proof is therefore not proof beyond a reasonable doubt. He stated that the Board accepts that the standard of proof in this case is something more than a balance of probabilities and would submit that it is a balance of probabilities based on clear, compelling and convincing evidence. He argued that, in considering the evidence, the Tribunal will and is required to consider the totality of evidence submitted.

From the evidence presented, the Tribunal is convinced that Mr. Lechowicz did produce and market chicken that was not reported to the Board. In the opinion of the Tribunal, there can be no benefit of doubt to be given to Mr. Lechowicz particularly because of the fact that Mr. Lechowicz, through his counsel, admitted to the Tribunal that he was involved in marketing unreported chicken. The Tribunal concurs with the findings of the Board that Mr. Lechowicz did contravene Regulation No. 402 made under the Farm Products Marketing Act and General Regulations No. 945-1992, No. 1106-1994 and No. 1165-1994 made by the Board

CULPABILITY

Mr. Judson argued that the issues of culpability or blameworthiness are not simple matters of black and white. He said that, from any reasonable assessment of the evidence, it must be acknowledged that Mr. Lechowicz was a participant in the illegal marketing scheme, to some degree, along with other farmers marketing to Watts. He argued that the important question, however, is what does the evidence lead one to conclude as to the extent of Mr. Lechowicz's involvement. Mr. Judson argued that the evidence is clear that the entire plan to profit from the unregulated marketing of chicken emanated from Ted Ridgewell and Watts. He said that all witnesses called by the Board who had direct knowledge of this endeavour or plan acknowledged that the instructions to shave weights or to not report weights came from Ridgewell and Watts. Mr. Judson said that Mr. Lechowicz was the least culpable in the entire process. The evidence is unclear and incomplete at best. He said that the evidence at its best is that Mr. Lechowicz was a follower, a passive participant, and, while a necessary part of the plan, had no greater degree of culpability than any of the other participants. His involvement was almost passive in the extreme.

The Tribunal notes that at least two parties with potential to benefit financially, Lechowicz and Watts, are involved in marketing this chicken. One cannot operate the scheme described without the participation of the other. Mr. Lechowicz had to order the chicks, place them in his barn and feed them, weigh them before marketing and arrange with the processor for shipping. In the opinion of the Tribunal, placing more chicks than is required to produce the allotted kilograms and growing those birds larger than the planned category before marketing are not passive actions but are deliberate and planned. The Board sent Mr. Lechowicz a listing of his marketing reported to the Board and asked him to check with his records and verify the reporting was complete and accurate. Mr. Lechowicz failed to respond. In the opinion of the Tribunal, this is not a passive action by Mr. Lechowicz. While the witnesses said that instructions came from Mr. Ridgewell, the Tribunal finds that Mr. Ridgewell could not operate the scheme alone. There had to be two sets of false paperwork, one at the farm and one at the processor. The producer had to co-operate with the processor for the scheme to succeed. The Tribunal concludes that Mr. Lechowicz is ultimately responsible for the unreported production coming from the Lechowicz farm.

INCONSISTENCIES/UNRELIABILITY AS TO THE AMOUNT OF OVER PRODUCTION

Mr. Judson argued that the Board prepared evidence summaries for each quota period purporting to indicate what was and was not reported by Mr. Lechowicz to the Board. The sources of information the Board used were the diary and notebook of Adrian Scherders, weigh tickets, Watts’ spreadsheets, live purchases spreadsheets, Watts work orders, poultry settlements, and Mr. Heggie's occurrence reports. He said it was the evidence of Kevin Thompson that where there were inconsistencies among these different sources, the Board relied upon the figures in Mr. Scherders’ notebook. He said that where there were inconsistencies in the sources of information, the figures in the notebook were always higher. He argued that there was no justification for assuming the higher figures are always correct and this assumption assigns an unsubstantiated higher unreported production to Mr. Lechowicz. Mr. Judson pointed out inconsistencies that, at his calculation, could result in decreasing the amount of unreported production by 12,100 kilograms.

The Tribunal finds as a fact that there was unreported marketing from the Lechowicz farm during Quota Periods P-09 through P-14 totalling 139,010 kilograms of chicken. In the opinion of the Tribunal, any inconsistency, as claimed by Mr. Judson, does not alter the seriousness of this case. In the opinion of the Tribunal, the figures showed a remarkable consistency in that, for the most part, from all of the sources, the numbers added up to the same total. The Tribunal was satisfied from the evidence that the most meticulous record of all those presented in evidence was kept by Mr. Scherders and that record showed significant unreported production from the Lechowicz farm.

FAILURE TO REGULATE

Mr. Judson argued that the Board has a wide authority and clear responsibility to administer the regulatory scheme for the marketing of chicken under the Act, the regulations and the plan. He said, it is clear that the members of the Board completely abdicated their responsibility for the day to day administration and enforcement of the regulatory scheme. It is apparent that the Board has delegated to its employees full discretion in the enforcement of the regulations. While some delegation on a day to day basis may be understandable, such a delegation without policy and guidelines for the carrying out of those responsibilities is unconscionable and contrary to the administrative law principle of "delegatus non potest delegare", i.e. a delegate cannot delegate.

Mr. Judson argued that, in the early summer of 1994, Board officials had very strong suspicions that tampering with weights was taking place at the Homeland scale. On August 24, 1994, officer Heggie observed DAC truck drivers driving onto the scale and adjusting weights through the movement of the tractor trailer and the tampering and adjusting of weigh tickets at the scale printout. No attempt was made to nip this in the bud by ordering a re-weigh. No attempt was made to expose the discovery to the drivers and to Watts so the practice could be brought to an immediate end.

He said that, Mr. Heggie on cross-examination, agreed that by the surveillance in August, 1994 and the cross-referencing that he and Mr. Neil had done with Form 68's, he and Mr. Neil were of the view that there was serious misconduct by Watts and various producers to shave weights. Again, nothing was done to stop the practice. Mr. Judson argued that all of the information necessary to support an application for, and execution of, a search warrant was in the hands of the officers of the Board by October, 1994 but nothing was done until January 1995. Throughout that time, the Board and it's staff had full flexibility to weigh trucks, to question truckers and farmers, to deregister the questioned scale, and to call into issue the license of the trucking company. Equally, it could have set up a clear and complete monitoring program at the scale. Mr. Judson argued further that, if the Board had taken action in August 1994, the amount of unreported chicken marketed by Mr. Lechowicz would have been significantly less and the penalty would correspondingly be reduced.

The Tribunal believes that the responsibility and privilege given to the chicken producers of this province must be, for the most part, self regulating. The Board field staff are employed primarily as a resource to the producers, trouble shooters solving problems for the benefit of producers, not as police to regulate the action of producers. While it may appear that the Board took a long time to investigate this problem, it has to be noted that the Board has never seen or been involved in an over production problem of this magnitude before. As Mr. Thompson said, it never occurred to the staff to review the ledger cards for evidence of unreported chicken before this case was going to be heard by the Board of Directors. The Tribunal also notes that even after it was known that the Board inspectors had found evidence of wrong doing at the Homeland scale, Mr. Lechowicz continued to ship unreported loads to Watts through this scale. Mr. Lechowicz would not talk to the Board inspectors when they visited his farm in January and did not correct the Board records when given the opportunity to do so in July. In the opinion of the Tribunal, the Board acted in a reasonable fashion while conducting its investigation, considering all of the circumstances of this case. In the opinion of the Tribunal, the Board did not abdicate its responsibilities as set out in the Act, regulations and the plan.

PENALTY

Mr. Judson pointed out that the penalty imposed by the Board in this instance is indeed unprecedented. It is the permanent cancellation of Mr Lechowicz's entire basic quota resulting in the destruction of his chicken production business. Mr. Judson argued that the penalty imposed is too severe for the violation of the regulations. He argued that, had the Board taken timely steps to stop Mr. Lechowicz from violating the regulations the unreported kilograms could have been reduced to 77,190 kilograms ( P-9 to the first two loads of P-12). He said that due diligence by the Board's staff moving in and stopping over production as soon as it is detected and due diligence in bringing the errant farmer to the Board as soon as the evidence was gathered, would have resulted in penalties proportionate to a deviation of short duration. He argued that this factor should be considered in this case and an appropriate penalty to apply would be to restrict the penalty calculation to the evidence gathered during the first quota period up to the point when the Board should have stepped in and stopped the conduct. He said, given previous decisions of the Board and Tribunal, a penalty of a crop quota reduction of three times the kilograms involved would send an effective message and a fair penalty. He said that to be reasonable such a reduction must be applied in a way that will permit Mr. Lechowicz to continue in business and requested discussions between himself and the Board’s solicitors on implementation of this penalty.

In arriving at its decision of an appropriate penalty for this case, the Tribunal took note of the fact that this is the first time that Mr. Lechowicz has been accused of breaching the Board’s regulations. Mr. Lechowicz did not provide any evidence of mitigating circumstances which the Tribunal could apply. If Mr. Lechowicz was not aware of the Board practices and policies, he did not testify to that end. The only reasonable conclusion that the Tribunal could make is that Mr. Lechowicz knowingly and willingly participated in a scheme to produce and market chicken without reporting to the Board. In the opinion of the Tribunal, the Board exercised appropriate caution and diligence during its investigation. In the opinion of the Tribunal, the penalty imposed must take into consideration the impact on the total industry when someone undermines the system from which they get a direct benefit - a system which provides their livelihood and the livelihood of more than 1,000 other producers in this province. In the opinion of the Tribunal, Mr. Lechowicz acted in an unprecedented manner without regard for the well being of his own industry and the penalty must reflect this. In the past, the Board’s practice has been to apply a penalty of two to five times the number of kilograms of chicken involved in unreported production. In the opinion of the Tribunal, this case is much more serious than the inadvertent non-reporting of production by a producer. In the opinion of the Tribunal, this case warrants a very serious penalty as a deterrent.

After full consideration of the evidence, the Tribunal decided that the appropriate penalty to apply is cancellation of 50% of the basic quota units held by Mr. Lechowicz.

In summary, the Tribunal makes the following findings. The Tribunal finds as a fact that:

• The spreadsheets found on the Watts computer and the computer at the business of Kim Slack are a record of ‘black’ or unreported chicken produced and sold to Watts during 1994.

• The DAC diary and notebook are an accurate record of the hauling of loads of chicken to Watts during 1994. Where there are two numbers recorded in the book for the weight of chicken hauled, the number shown opposite the letter “A” is the actual weight of the load and the number shown after the letter “S” is the reduced or shown weight of the load. If any discrepancies in the weights purchased by Watts appear from analysis of the various sources of information, the numbers in the DAC notebook are considered to be the most reliable and should be considered to be the accurate numbers.

• In the DAC books where the word ‘black’ appears this indicates a load of chicken produced and marketed without quota or supporting documents.

• In the DAC books where the words reuse slip are shown, this indicates that a previously used Form 6 is to be picked up at the Watts plant and taken to the farm to accompany a load of chicken to the plant. While more than one load of chicken was marketed using this Form 6, only one load of chicken was reported to the Board.

• The drivers for DAC were required by Mr. Scherders to produce weigh tickets to show reduced weights for some of the loads they were hauling by either moving the truck partially off the scale to lower the net weight a set amount of kilograms, or by manipulating the scale mechanism to reduce the weight shown on the weigh ticket by a set amount of kilograms. This practice was common throughout 1994. The drivers who had been asked to do this work complied with this requirement from their employer.

Decision and Reasons

After careful consideration of the evidence presented and the submissions made, the Tribunal decided that Mr. Lechowicz did contravene Regulation No. 402 made under the Farm Products Marketing Act and General Regulations No. 945-1992, No. 1106-1994 and No. 1165-1994 made by the Board under the Farm Products Marketing Act by the production and marketing of 139,010 kilograms of chicken that were not reported to the Board. As a consequence of this violation the Tribunal directs that:

1. Mr. Lechowicz pay forthwith to the Board $61,391.87 in license fees and over quota levies due as a result of the over production of 139,010 kilograms of chicken, and

2. 50% or 13,000 of the 26,000 basic quota units allotted to Mr. Edward Lechowicz with respect to the N ½ Lot 15, Concession 7, Township of Delhi, be canceled by the Board effective Quota Period A-20 (June 7, 1998), and

3. The 139,010 kilograms of over production that appears on Mr. Lechowicz’s ledger card is not to be taken into consideration by the Board when calculating future crop quota allotments for Mr. Lechowicz.

The reasons for this decision are:

1. Mr. Lechowicz, through his counsel, admitted that he produced and marketed kilograms of chicken that were not reported to the Board.

2. The evidence is that this is the first offense for Mr. Lechowicz and he could not operate the scheme alone. In the opinion of the Tribunal, the penalty applied by the Board is too onerous for this first offense.

3. In the opinion of the Tribunal, a penalty of cancellation of 50% of the basic quota units held by Mr. Lechowicz is an appropriate penalty to apply in this case and offers the opportunity to Mr. Lechowicz to demonstrate to his fellow producers that he can manage his farm operation within the parameters of this regulated marketing system.

Dated at Guelph, Ontario this 9th day of January, 1998.