Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West Guelph, Ontario N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email:Tribunal@OMAF.gov.on.ca
Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1, chemin Stone Ouest Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email:Tribunal@OMAF.gov.on.ca
AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL
APPEAL:
Jarvis Chick Sales Inc. v Ontario Broiler Hatching Egg and Chick Commission
Jarvis Chick Sales Inc. v OBHECC 2004 ONAFRAAT 28
STATUTE:
Ministry of Agriculture, Food and Rural Affairs Act
HEARING:
August 10, 2004
August 17, 2004
2004-28
NEUTRAL CITATION:
2004 ONAFRAAT 28
Jarvis Chick Sales Inc. v Ontario Broiler Hatching Egg and Chick Commission
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 Brian Snyder, Jarvis Chick Sales Inc. from a decision of the Ontario Broiler Hatching Egg and Chick Commission (OBHECC) whereby it assessed the company a penalty in the amount of $10,000.
Before: Murray Cardiff, Chair; George Klosler, Member; Blake Bexon, Member
Appearances:
Paul Trudell, counsel to the respondent, OBHECC
Brian Snyder, Jarvis Chick Sales Inc., appellant
Tom Fleming, Director OBHECC, witness
DECISION OF THE TRIBUNAL
This appeal was considered in Guelph, Ontario on Tuesday, August 10, 2004. Jarvis Chick Sales Inc. appealed the amount of a penalty assessed to it by the Ontario Broiler Hatching Egg and Chick Commission (OBHECC) for various regulatory infractions, that it acknowledged had occurred.
Statutory Context
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.
The Farm Products Marketing Act allows for certain powers and authorities to be delegated to local boards established under the statute. The OBHECC is a local board and has been granted the authority to make regulations, orders and directions under the Act. Section 15 of the Farm Products Marketing Act states:
Offences
- Every person who contravenes this Act or the regulations or any plan or any order or direction of the Commission, the Director or any local board, or any agreement or award or renegotiated agreement or award declared to be in force by the Commission is guilty of an offence and on conviction is liable for a first offence to a fine of not more than $2,000 for each day that the offence continues and for a subsequent offence to a fine of not more than $10,000 for each day that the offence continues. R.S.O. 1990, c. F.9, s. 15.
The Evidence
Jarvis Chick Sales Inc.
Mr. Brian Snyder testified that throughout the Fall 2003 and Spring 2004 he was involved in selling Jarvis Chick Sales Inc. to Stratford Chicks and the sale was finalized on May 3, 2004. The company was sold as an ongoing concern. He said he informed OBHECC staff about the sale negotiations early in the process, and he believed that the situation which led to the penalty being assessed against his firm could have been avoided with better communication.
Mr. Snyder explained he had cash flow problems in 2003 and 2004 because:
he was financing the sale of the business and the sale took longer than anticipated
anticipated chick price increases resulting from a 2002 cost-of-production survey were not implemented until 2004
OBHECC policy required him to provide financing to broiler producers
two of his broiler producer customers were in arrears
Ontario over-produced hatching eggs in 2003 and he was required to dispose of the surplus production on the less lucrative table egg market.
Mr. Snyder said he could not pay producers on time and that was a big part of the penalty against Jarvis Chick Sales Inc.. He said there was never any risk that producers would not be paid, that he had always paid producers in the past, although sometimes he paid late, and that the producers he contracted with had not complained to him about the late payments. He testified that he had provided OBHECC with a letter of credit in the amount of $120,000. He acknowledged that this was less than the $200,000 letter of credit that OBHECC requested, but submitted it was sufficient to guarantee payment.
Mr. Snyder said the business hatched 8 million chicks per year, hatching twice weekly.
OBHECC Case
Mr. Paul Trudell told the Tribunal that an OBHECC regulation required that hatching egg producers be paid within 11 days of hatch. He said Jarvis Chick Sales Inc. had been several days late in paying producers on 22 occasions between October 15, 2003 and February 24, 2004, and in one instance was 37 days late. He said the hatching egg industry had a small number of participants, with only 80 producers and approximately 14 hatcheries, and that the industry depended on goodwill, but operated within a highly regulated, supply-management system. Mr. Trudell pointed out that Jarvis Chick Sales Inc. was also in violation of eight orders of OBHECC, some of which were related to earlier regulatory infractions.
Mr. Trudell testified that Jarvis Chick Sales Inc. had a history of regulatory infractions dating back to 1991 including other late payment infractions. He pointed out that Jarvis Chick Sales Inc. had been levied significant fines in the past, but that the fines were much lower than what was allowed under the Farm Products Marketing Act. Mr. Trudell said OBHECC had shown restraint in setting fines at a reasonable level, and in addition had allowed Mr. Snyder to provide a letter of credit, rather than pay a fine in some instances. He said OBHECC had fined other hatcheries that were in violation of its regulations up to $20,000