Agriculture, Food and Rural Affairs

Appeal Tribunal

1Stone 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:

Duval v Ontario Flue-Cured Tobacco Growers’ Marketing Board

Duval v OFCTGMB 2002 ONAFRAAT 2

STATUTE:

Ministry of Agriculture, Food and Rural Affairs Act

HEARING:

December 18, 2001

DATE OF DECISION:

January 15, 2002

2002-02

NEUTRAL CITATION:

2002 ONAFRAAT 2

Duval v Ontario Flue-Cured Tobacco Growers’ Marketing Board

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

AND IN THE MATTER OF:

An Appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Paul Duval, Clear Creek, ON from a decision of the Ontario Flue-Cured Tobacco Growers’ Marketing Board, dated October 23, 2001, to cancel 30,000 pounds of basic production quota allotted to Mr. Duval, and to cancel his 2001 marketing quota.

Before:

Murray Cardiff, Chair; Denis O’Connor, Vice Chair; Ralph Huckle, Member

Appearances:

Alan Emerson, for the appellant

Barry Bresner, for the respondent

DECISION OF THE TRIBUNAL

This appeal was heard in Guelph, Ontario on Tuesday, December 18, 2001. Mr. Duval appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal (the Tribunal) from a decision of the Ontario Flue-Cured Tobacco Growers’ Marketing Board (the Board) regarding penalties it assessed him in relation to two shipments of tobacco shipped in violation of regulations of the Board.

The Background

Subsection 16 (2) of the Ministry of Agriculture, Food and Rural Affairs Act is as follows:

16(2) Subject to subsections (4) and (5), if a person is aggrieved by an order, direction,

policy, decision or regulation made under the Farm Products Marketing Act by a local board or under the Milk Act by a marketing board, that person may appeal to the Tribunal by filing with the Tribunal and sending to the local board or marketing board written notice of the appeal.

Section 9 of the Board’s General Regulations 1998-1999, made under the Farm Products Marketing Act states:

Marketing

9. (1) No person shall buy or offer to buy tobacco from any person other than the local

board or a person to whom the local board has fixed and allotted a marketing quota.

(2) No person shall buy or offer to buy tobacco in any place other than a tobacco exchange operated by the local board.

(3) No person shall sell, transfer or dispose of tobacco or offer to sell, transfer or dispose of tobacco to any person other than the local board or a licensed buyer at a tobacco exchange operated by the local board.

(4) Except as otherwise expressly provided by the local board no person shall process, pack or package any tobacco that has not been sold through the local board to a licensed buyer at a tobacco exchange operated by the local board.

(5) Without the prior consent in writing of the local board, no person shall ship or transport tobacco to any place other than a tobacco exchange operated by the local board.

Section 21 of the Board’s General Regulations 2001-2002, made under the Farm Products Marketing Act states:

Cancellation or Reduction of Quota

21. The local board may cancel or reduce or refuse to increase a basic production quota or a marketing quota where the licensed producer to whom the said quota or quotas have been fixed and allotted has entered into a transaction or a series of transactions that has the effect of circumventing the provisions of these General Regulations or for any other reason that the local board deems proper.

A similar regulation was included in the 1998-1999 Board General Regulations.

The Issue

The issue before the Tribunal was:

1. Was the penalty imposed on Mr. Duval by the Board appropriate in the circumstances?

The Evidence and Submissions

Paul Duval Testimony

Mr. Duval told the Tribunal that he had a 50 acre farm equipped with a greenhouse, a barn, and tobacco growing equipment, including three tobacco kilns. He said he had bought his current farm in 1976 and that he had previously owned a 90 acre farm in the same area. He estimated the value of his kilns at $25,000 each and said it cost him $6,000 to retrofit one kiln in 2001. He explained that it was a requirement of the Board for all quota holders to have 25% of their kilns updated to improve the quality of the tobacco and that this was a condition of growing the crop.

Mr. Duval explained that he admitted to the Board that he had openly engaged in two illegal sales of tobacco in early 1999 and that he had been charged under the federal Excise Act. He explained that the criminal charge had been stayed as a result of his agreeing that evidence collected in his case could be released to the Board. He also said he and the Board had an Agreed Statement of Fact which was used at his hearing before the Board. He said that he had admitted to a total sale of 6,500 pounds, for which he received $3,500. He also said the RCMP had seized tobacco worth $22,807.19 from his farm and that he believed it was destroyed, but that he received no compensation for this tobacco.

Mr. Duval told the Tribunal that the 1998 crop year was extremely stressful for him as he took a leave from his full time job to grow 58 acres of tobacco, rather than his usual 18 acres, and as his crop suffered damage from hail, wind and frost. He said the plants grew too big and he harvested a considerable amount of green tobacco in 1998. He said that his health suffered as a result. He said he lost 30 pounds in three weeks during harvest, and he took a prescription drug for nerves.

Mr. Duval explained that he had apologized to the Board, that he knew he should never have sold the tobacco illegally and that he felt sick about it. He said the situation has caused him stress for the past three years and affected his family. He told the Tribunal that he would never do this again.

Mr. Duval said he wanted to try to remain in the tobacco industry on a small scale. He pointed out this was the first time he ever sold tobacco illegally and that until his recent problem he had never been before the Board for any type of infraction in over 22 years of growing tobacco. He said the Board had never refused any of his applications to ‘rent in’ tobacco quota. Mr. Duval said that before the Board cancelled his quota he had 30,000 pounds of basic production quota. He said that he could grow other crops on his farm but they would generate far less income than tobacco. He also said he would have no use for his equipment, barn and bunkhouse if he could not grow tobacco.

Mr. Duval explained that he did not grow a tobacco crop in 1999 but that he had been allowed to rent out 30% of his quota as a spring rental. He said that in 2000 and 2001 he had sharegrower agreements with a corporation owned by his neighbours, Rene and Marilyn Rebry. He said the agreements were filed with the Board each Spring and that the 2000 crop had been marketed. He said the 2001 crop had been detained by the Board, pending the outcome of his appeal. Mr. Duval acknowledged that the Board had warned him his quota may be cancelled and said he had told Mr. Rebry that he had potential problems with his quota.

Mr. Duval outlined events that occurred in 2001 as follows:

JA 19 01 He was in criminal court and the charges against him were stayed.

AP 30 01 His sharegrower agreement was filed with the Board.

MY 10 01 The Board issued him a licence to grow tobacco.

August 01 He retrofitted one kiln.

OC 19 01 He had a hearing before the Board.

Mr. Duval said he did not know when the Board knew the criminal charges against him had been stayed but he believed that it should have known soon after the charges were stayed. He said that he did not have notice of the hearing before the Board until after the retrofit of his kiln and after the crop was harvested. He said he was concerned that he would get no return for the 2001 crop, due to the Board’s cancellation of his marketing quota. He said he was also concerned that Mr. and Mrs. Rebry would sue him and he would lose his farm. He said if the marketing quota had not been cancelled, he could have sold 10, 780 pounds of tobacco with an estimated value of approximately $29,000.

Mr. Duval asked the Tribunal to allow him to keep a portion of his basic production quota and to allow him to reacquire tobacco quota in the future. He said his farm was set up to grow a small volume of tobacco efficiently and he hoped to grow tobacco in his retirement.

In response to questions, Mr. Duval indicated:

• He typically grew three acres of tobacco with his quota. Before his trouble with the 1998 crop he also grew an additional 15 acres on a sharecropping arrangement.

• The 2001 crop was stored in the Rebry barn for ease of handling.

• He understood he could have grown a crop in 2001 without retrofitting his kiln, but that it would have had to be 25% smaller without the retrofit. He received notice of this policy change in Spring 2001 and the retrofit had to be completed by AU 01 01.

• He knew there would be severe consequences for violating the Board’s regulation but he did not expect to receive as severe a penalty as he did.

• He received approximately $7,300 from his spring rental in 1999.

• He did not recall whether or not he showed Mr. Rebry the warning letter he received from the Board, but he did tell Mr. Rebry that he might lose quota if he was found to be in contravention of the Board’s regulations.

• He understood that he was presumed innocent by the Board until his hearing before it.

• The Board had been invited to attend at his court proceeding in January 2001 but had not attended.

• He understood there was to be a hearing before the Board in July 2001 but that it was not scheduled until October 2001, due to conflicts in lawyer’s schedules.

• He had tried to sell his quota after the RCMP searched his farm but before he was charged. He said he was not thinking clearly at the time.

• He did not know the quality of the tobacco detained by the Board in 2001.

• He had not tried to obtain compensation for the tobacco seized by the RCMP in 1999 and he did not think it was possible to be compensated.

• He did not pay for any inputs used in the 2001 crop except for the retrofitting of the kiln. He also provided land, buildings, marketing quota and paid 20% of the cost of crop insurance.

• He was not paid for all the tobacco he shipped illegally.

• He had told the agent who arranged for the illegal shipments that he might have to find a new buyer, due to the lack of payment, but this was just talk.

• He had not sold tobacco to Native Canadians.

• He can make approximately $3,000/acre on his tobacco crop if he grows it himself.

• He receives 20% of the proceeds of sale of tobacco under the terms of his shareholder agreement.

Rene Rebry Testimony

Mr. Rene Rebry told the Tribunal he is the President of 1002573 Ontario Ltd. and owns 51% of the shares. He said he lived 1-1.5 miles from the Duval farm and that he had been a tobacco farmer for all his adult years. He said he grew 87 acres of tobacco in 2001.

Mr. Rebry said he saw Mr. Duval’s licence to produce in 2001 shortly after it was issued. He explained that he had delivered the sharegrower agreement between his company and Mr. Duval to the Board and that he received a copy approximately one week later. He testified that the sharegrower agreement was the same in 2000 and 2001. He said that Mr. Duval had accurately described the agreement but added that they had agreed to share the cost of Board marketing fees. He said that he also rented land from Mr. Duval.

Mr. Rebry said that it was true that Mr. Duval told him that he had problems with his quota but that he had no idea that he might lose his crop when he filed the sharegrower agreement. He estimated his costs to grow 3 acres of tobacco on the Duval farm at $11,000-$15,000. He said he would not have grown this tobacco if he had realized that it could be confiscated. Mr. Rebry said he had received no correspondence from the Board warning him that he might be affected by Mr. Duval’s situation and no notice of Mr. Duval’s hearing before the Board.

In response to questions, Mr. Rebry indicated:

• He has 608,000 lbs. of tobacco quota. He had 548,000 lbs. of quota in Spring 2001 but has since purchased more.

• He sharegrows with Mr. Duval but no one else.

• He was not aware that registration of sharegrowers did not require board approval but he understood that sharegrowers were registered so that the Board knows where to send payment cheques.

• Mr. Duval receives 20% of the proceeds from tobacco grown on 3 acres. He receives $175/acre in rent on other land used by Mr. Rebry’s company.

• He knew that there was a risk that Mr. Duval would lose quota if the Board found that he had illegally sold tobacco, but he did not ask Mr. Duval if he had actually sold tobacco illegally. Mr. Duval did not give him details as to why the Board might take his quota.

• He assumed that once the Board issued a licence to Mr. Duval, and the shareholder agreement was filed, he could go ahead and grow tobacco. He knew he needed marketing quota to sell the crop.

• Tobacco that was cured in Mr. Duval’s kilns was stored in Mr. Rebry’s barn.

• All of Mr. Rebry’s kilns were retrofitted in 2001. There was a financial assistance program available to help with the conversion. He received $1,500 per kiln in financial assistance for retrofitting his kilns.

• He did not appeal the Board’s decision regarding Mr. Duval’s 2001 marketing quota. He did contact the Board and was told it was a matter between Mr. Duval and the Board. His lawyer advised him to let this appeal play out and take it from there.

• He did not discuss Mr. Duval’s issue with him in the course of growing the crop and was not aware of the Board hearing.

• He was aware there was a risk the quota would be cancelled and he accepted this risk.

• He has 13 kilns and employs 20 people on average. He receives better prices on inputs by buying for 87 acres than he would if he bought for the 3 sharegrower acres separately.

• The Board placed 14 bales (approximately 8,600 lbs.) of tobacco in detention.

• The tobacco market opened on OC 01 01. He had an option to ship in the second and fourth rounds, but missed the second round due to the detention of the tobacco. He tries not to hold tobacco over to the next year but has done so in the past.

Marilyn Rebry Testimony

Mrs. Marilyn Rebry testified that she held 49% of the shares of 1002573 Ontario Ltd. and that she works with her husband in growing the tobacco crop.

Mrs. Rebry said that she did not recall seeing Mr. Duval’s licence but she did receive a copy of the registered shareholder agreement. She said she relied on this document to go ahead and grow the crop. She said the crop was started but not planted before the sharegrower agreement was registered. She confirmed that the Board had not informed 1002573 Ontario Ltd. that there would be a problem marketing tobacco grown under Mr. Duval’s quota. She said that Board representatives came to her farm on or about OC 23 01, and that her husband told her they had detained the tobacco. She said she would not have grown the crop if she had been warned by the Board. Mrs. Rebry said she agreed with her husband’s testimony.

In response to questions, Mrs. Rebry indicated:

• The unconverted kilns on the Duval farm were used to cure a portion of the crop.

• Mr. Rebry kept track of the tobacco.

• Without the sharegrowers agreement she would have no guarantee that the company name would be on the proceeds cheque from the Board.

• She was told by Mr. Rebry that Mr. Duval’s quota was subject to being cancelled. She heard news reports and had a general awareness of the court case but never discussed it with any member of the Duval family.

Barry Bresner Testimony

Mr. Barry Bresner told the Tribunal he would work from submissions entered and would not call any witnesses, but that some Board members and staff were available to answer questions.

Mr. Bresner said basic production quota is more or less permanently allotted to producers and marketing quota is allotted annually as a percentage of basic production quota, depending on the negotiated crop size. He explained that marketing quota determines how much can be marketed each year. He said that growers also need a licence in order to produce tobacco. He said all tobacco must be sold to licensed buyers through the auction exchange run by the Board. He explained that Mr. Duval had breached Section 9 of the Board regulations by selling tobacco illegally. He also pointed out that basic production quota could not be rented but sharegrowing was allowed.

Mr. Bresner said that the cornerstone of the marketing scheme is selling the tobacco through the Board. He said that unregulated sales harm licensed buyers as they do not have access to this tobacco, and also de-values the quota held by other producers. He said the Board cannot monitor all barns at all times and on the occasions when it does catch people selling tobacco illegally, it has been quite harsh in its penalties as this is a most serious infraction.

Mr. Bresner told the Tribunal that the RCMP had investigated the illegal sale of tobacco and had executed warrants in March 1999. He said there was evidence of widespread illegal activity that carried on for a period of years and several people were charged. Mr. Bresner said that three other quota holders were charged in addition to Mr. Duval. He said the Board has no means of dealing with the non-quota holders who were charged.

With regard to Mr. Duval, Mr. Bresner said the Board agreed that he had made two illegal shipments of tobacco but that it felt there may have been a total of 7,000 lbs. shipped, based on the testimony of truck drivers. He said the Board agreed to delay its hearing on the charge of breaching Board regulations, at the request of Mr. Duval’s lawyer, who did not want to prejudice the criminal case.

Mr. Bresner suggested that wiretap transcripts provided by the RCMP were the most reliable evidence as to what occurred in early 1999. He said the transcripts indicated that Mr. Duval had 28,000 lbs. of overweight tobacco available for sale, that he was aware that he was engaged in illegal sales and that he was concerned about getting paid. He pointed out that Mr. Duval had suggested to his broker that he might have to get a new buyer if payment was not forthcoming.

Mr. Bresner said that Mr. Duval had shown no concern about the impact of his activities on other producers, and that he would have continued to ship tobacco illegally if he had not been caught by the RCMP. He said that as a consequence, the Board cancelled 100% of his basic production quota and all his marketing quota for 2001.

Mr. Bresner said that whether or not Mr. and Mrs. Rebry were aware of the risks of growing the crop in 2001 was not an issue before the Board but that Mr. Duval testified that he had warned them of the risk that his quota might be cancelled. He said they were not called to testify at the Board hearing and were not parties to the appeal to the Tribunal. He said the Board did have some concerns as to whether they had a legitimate sharegrower agreement or a basic production quota rental, but that was not the issue before the Board on October 19, 2001. Mr. Bresner said that the Board had given an unequivocal warning to Mr. Duval regarding the potential cancellation of his quota, and suggested it was his problem if he did not communicate the gravity of that risk to Mr. and Mrs. Rebry.

In response to questions, Mr. Bresner indicated:

• The Board registers sharegrower agreements to give comfort to parties entering these agreements. The agreements determine who receives the proceeds of the sale of the tobacco.

• Tobacco is the property of the licensed producer. The sharegrower is vulnerable unless he has an agreement with the licensed producer.

• The Board does not examine and approve sharegrower agreements as they would an application. It is a registration authorizing both names to be on the cheque, assuming a crop is harvested and marketed.

• Tobacco is shipped under the farm number of a licensed producer. Marketing quota is required in order to sell the crop.

• The initial delay in holding a Board hearing into this matter was at the request of Mr. Duval. Mr. Bresner and Mr. Duval’s original counsel selected the hearing date. No information on the criminal cases was communicated to Board directors so that they would not be biased in hearing the matters. As the administrator of the appeals, Mr. Bresner received a copy of the stay of the criminal charges against Mr. Duval on July 10, 2001.

• He understood that the criminal charges would not go forward against Mr. Duval as long as he lived up to his agreement. The Board was not aware of the terms of the stay and was not involved in its negotiation.

• Of the other three producers charged, one would definitely not appeal to the Tribunal but the other two might.

Summations

Mr. Emerson told the Tribunal that there is clearly a history of trouble in the tobacco industry and that Mr. Duval made a dreadful mistake while under heavy pressure. He said that while his actions in early 1999 were serious, they should be considered in the context of his history in the industry. He pointed out that the illegal sales of tobacco in 1999 were Mr. Duval’s first infraction of Board regulations, that he was under pressure at the time and that he was contrite. He submitted that Mr. Duval had suffered greatly as a result of the criminal charges that were laid against him as he had lost his image in his community, developed marital problems and suffered from stress. He said that if the Board’s decision stands Mr. Duval would also lose his farm. He asked that the penalty imposed by the Board be reduced.

Mr. Emerson asked the Tribunal to consider several factors which he suggested warranted a reduction in the penalty. These included:

• Mr. Duval openly admitted his guilt, therefore a long and expensive hearing before the Board was avoided.

• Mr. and Mrs. Rebry had an interest in the proceeds of the crop they grew with Mr. Duval. They grew the crop in good faith and did nothing wrong and should not be disallowed the proceeds of sale.

• The Board should have known the criminal proceedings against Mr. Duval were stayed in January 2001. The Board definitely knew by July 2001 but chose to wait until October 2001 before holding a hearing into the matter of the infractions of the Board regulations. The appellant and the sharegrower would not have incurred harvest costs if the Board hearing had been held in a more timely manner.

• The Board did not have a proper basis for rejecting Mr. Duval’s apology or determining that he would be an ongoing risk to the marketing system if he were allowed to continue in the industry.

Mr. Emerson suggested that Mr. Duval had been treated more harshly than other producers in similar situations. He referenced several decisions of the Board and the Tribunal and pointed out that:

• The Board/Tribunal had allowed various penalties including fines, partial cancellation of basic production quota and cancellation of basic production quota while allowing the crop to be marketed.

• The Board had been lenient with a producer for compassionate reasons.

• The Board had accepted the apology of a producer caught in the same RCMP sweep as Mr. Duval.

Mr. Emerson said it was evident from its past decisions that the Board is grappling with a difficult problem as the marketing scheme must be honoured or it will break down. He said that it was an important principle of administrative law that when a Board exercises its discretion to discipline its licensees, it must be consistent from case to case. He submitted that, based on the facts of the case, it would be more consistent and equitable if Mr. Duval were to lose half his basic production quota and be allowed to market the 2001 crop.

Mr. Bresner told the Tribunal that the focus should be on Mr. Duval, not the sharegrower as the dispute was between the Board and Mr. Duval. He said that Mr. and Mrs. Rebry may have a separate dispute with Mr. Duval but that it was not a matter that had been heard by the Board. He said the concern was determining what is the appropriate penalty to Mr. Duval and submitted that the Board considered the appropriate factors and made a reasoned decision in this case.

Mr. Bresner said the Board considered the following:

1. The need to deter others;

2. The gravity of the offense, whether it happened on more than one occasion and the potential harm that flows from the offense;

3. Belated admission and apology;

4. Penalties to producers in similar circumstances.

Mr. Bresner said the Board considered that deterrence in all of its decisions for infractions of this nature should serve as deterrents to all producers. He said the illegal sale of tobacco is a serious offence and pointed out that Mr. Duval had made two such sales. He also submitted that the evidence was that Mr. Duval would have continued to sell tobacco to unlicensed persons had he not been caught by the RCMP. Mr. Bresner said that Mr. Duval did not admit guilt or apologize until after he was caught. He submitted that this was less meaningful than a confession resulting from a pang of conscience. Mr. Bresner said that the producer whose apology the Board had found unquestionably sincere cooperated with and assisted the RCMP and admitted to additional shipments that neither the Board nor the RCMP knew about.

Mr. Bresner pointed out that the Board expressly warned Mr. Duval in Spring 2000 and Spring 2001 that he grew a tobacco crop at his own risk. He said that the Board presumed Mr. Duval was innocent until he was found otherwise, but that Mr. Duval knew he was guilty, knew his hearing was pending and knew it was foolhardy to grow tobacco. He reminded the Tribunal that Mr. Duval said he had warned Mr. Rebry that his quota might be cancelled and that Mr. Rebry acknowledged that he was warned. He said the registration of shareholder agreements is an administrative matter to facilitate payment and the Board does not monitor day-to-day interactions between sharegrowers and licensed producers.

Mr. Bresner said the Board considered other cases and prior decisions of Tribunal in determining the penalty to assess to Mr. Duval. He agreed there should be consistency in the Board decisions but said no two cases are identical and the Board cannot create an automatic penalty template. He said the amount of quota cancelled in this case was approximately double the amount of quota that was required to grow the tobacco shipped illegally and that this was consistent with the Board’s treatment of other producers in similar circumstances. He pointed out that the dollar value of the quota held by Mr. Duval that the Board cancelled was much less than the value of quota cancelled in some other cases of this nature. He said that Mr. Duval was not the only producer who was unable to market a crop in 2001 as a result of the 1999 RCMP investigation. He pointed out that when the Tribunal allowed the marketing of tobacco in a previous case, the affected producer had not been warned that his quota might be cancelled. He submitted that Mr. Duval was not in the same situation. Mr. Bresner also suggested that the situation in which the Board showed leniency for compassionate reasons was significantly different from Mr. Duval’s situation.

Mr. Bresner disputed Mr. Emerson’s submission that Mr. Duval would lose his farm if the Board’s decision were upheld. He said that Mr. Duval would make more money on his land rental to Mr. Rebry than on 20% of the proceeds from 3 acres of tobacco. He pointed out Mr. Duval had not grown a tobacco crop himself since 1998.

Mr. Bresner said that it is very difficult to find out about illegal shipments of tobacco and that most producers that the Board charges are first time offenders.

Mr. Bresner also suggested that the tobacco seized by the RCMP in 1999 was irrelevant as there is recourse against the RCMP for compensation if Mr. Duval is not found guilty of the criminal charges.

Mr. Bresner asked the Tribunal to uphold the Board decision and allow it to send a message to the community. He said it was important to the Board that these cases be dealt with sternly, that the seriousness of the offense be recognized and that the punishment fit the crime. He said the Board decision was fair.

Mr. Emerson replied that there is inconsistency on the part of the Board in dealing with producers who made illegal shipments and that no one apologized before the RCMP became involved. He said it would be unfair to take the position that producers must plead guilty at the first opportunity, as this would violate their rights. He said that it was inappropriate to compare penalties solely on dollar value and suggested that the effect of the penalty on the individual and his family should be considered. He also said he did not believe the impact on the sharegrower could be ignored. He told the Tribunal that Mr. Duval would have no opportunity to prove his ability to reform and restore his position in the community if the Board’s decision was upheld.

The Findings

It was clear to the Tribunal that Mr. Duval deliberately participated in illegal activities and contravened the regulations of the Board in 1999. The Tribunal recognizes Mr. Duval suffered due to the seizure of 221 bales of tobacco by the RCMP, and the filing of criminal charges against him. The Tribunal has some sympathy for Mr. Duval due to the health problems related to this stressful situation.

The Tribunal agrees with the Board that selling tobacco in contravention of the Board regulations is a major violation and that it must be treated seriously. The Tribunal appreciates that the Board has to uphold its regulations to maintain the integrity of the industry. The Tribunal notes that Mr. Duval received two warning letters from the Board to the effect that his quota may be cancelled and he may be unable to market his crop if he was found to be guilty of violating the regulations. The Tribunal is generally of the opinion that a producer who puts a crop in the ground should have an inalienable right to harvest it and sell it.

The Tribunal is concerned with the timing of the Board hearing into this matter as the evidence was clear that the appellant and his sharegrowers incurred harvest costs which could have been avoided if the hearing had been held earlier. The Tribunal notes that the criminal charges against Mr. Duval had been resolved more than nine months before the Board held its hearing. The Boards’ legal counsel was in possession of information regarding the decision made by the court in the case against Mr. Duval three months before the hearing of the Board. The appellant must be assumed to be innocent until the hearing of the Board was held and a decision of guilt was made. The imposition of a penalty to confiscate the 2001 crop of Mr. Duval becomes a retroactive penalty in this case.

Because of its concerns with the inequity of the timing of the Board hearing, and for compassionate reasons, the Tribunal is inclined to amend the penalty imposed by the Board. The Tribunal will allow the 2001 crop to be marketed, but will order that Mr. Duval pay a fine equivalent to 20% of the value of the 2001 crop to the Board. The Board’s decision to cancel 100% of Mr. Duval’s basic production quota is upheld.

The Tribunal also recognizes that Mr. Duval was contrite and admitted his guilt and that this was his first offence. Therefore the Tribunal does not believe it is appropriate for the Board to refuse to allow him to re-enter the industry in the future provided he meets all criteria that are required by the Board. The Tribunal was not persuaded that Mr. Duval’s livelihood was challenged as a result of the Board decision.

Decision and Reasons

After careful consideration of the evidence filed and submissions made, the Tribunal decided to partially grant the appeal.

ORDERS OF THE TRIBUNAL

The Tribunal orders the Ontario Flue-Cured Tobacco Growers’ Marketing Board to:

1. Market the tobacco grown in 2001 under Mr. Duval’s licence, which is now under detention, in a marketing position to be determined by the Board. There is to be no opportunity for the grower to refuse to accept a bid price, and any ‘no bid’ tobacco that is not sold by the end of the marketing season is to be destroyed by the Board.

2. Assess the equivalent of 20% of the proceeds of the sale of Mr. Duvall’s 2001 detained tobacco crop as a fine.

3. Treat Mr. Duval as it would any other applicant for a licence to produce tobacco if he opts to re-enter the industry in the future. The Board is not to hold this offence against Mr. Duval if he wishes to purchase basic production quota and produce another tobacco crop in the future.

The reasons for this decision are that the Tribunal is concerned that the timing of the Board’s hearing into this matter created an inequity, the Tribunal has some compassion for the appellant and the Tribunal does not believe that this infraction should prohibit the appellant from re-entering the industry.