Neil Van Loo and Liz Van Loo v. Dairy Farmers of Ontario, 2022 CanLII 94794

Agriculture, Food and Rural Affairs Appeal Tribunal

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

Courriel: AFRAAT@ontario.ca

File No.: 008VanLoo21

IN THE MATTER OF THE Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, CHAPTER M.16, AS AMENDED.

AND IN THE MATTER OF an appeal submitted by Neil Van Loo and Liz Van Loo of Tara, Ontario from a decision of the Dairy Farmers of Ontario dated December 2, 2021.

AND IN THE MATTER OF an electronic hearing held pursuant to Rule 18 of the Tribunal’s Rules of Procedure.

BETWEEN:

Neil Van Loo and Liz Van Loo

Appellants

– and –

Dairy Farmers of Ontario

Respondent

Represented by Robert W. Scriven

Represented by Geoffrey P. Spurr

HEARD: May 9th and 10th,2022 and June 1st and 15th, 2022.

Before: Glenn Walker, Chair; Marc Huneault, Vice-Chair; and Judy Dirksen, Member

Appearances:

Robert W. Scriven, Counsel for the Appellant

Andrew Van Loo, Witness for the Appellant

Liz Van Loo, Appellant

Dr. Andrew De Haan, Witness for the Appellant

Geoffrey P. Spurr, Counsel for Dairy Farmers of Ontario

Scott Hartle, Witness for the Dairy Farmers of Ontario

Jeff Hyndman, Witness for the Dairy Farmers of Ontario

Albert Fledderus, Witness for the Dairy Farmers of Ontario

TRIBUNAL DECISION

1. This is an appeal by Neil Van Loo and Liz Van Loo (“the Appellants”) from the reconsideration decision of the Dairy Farmers of Ontario (“DFO”) dated December 2nd, 2021.

Preliminary Matters

2. The Agriculture, Food and Rural Affairs Appeal Tribunal (“the Tribunal”) held this appeal hearing by Zoom video conferencing over four (4) days on May 9th and 10th, 2022 and June 1st and 15th, 2022.

3. The first preliminary issue was whether Liz Van Loo was a proper party to the appeal. The appeal is in respect to License #516741 and License #635910, both registered in the name of Neil Van Loo. On Consent of the DFO, Liz Van Loo was added as a party.

4. The second preliminary issue was whether there should be an Order excluding witnesses. The Respondent requested an Order excluding only Dr. Andrew De Haan. There was no objection by the Appellants. Accordingly, an Order was issued excluding Dr. De Haan from the hearing until he provided his evidence.

BACKGROUND

5. This is an appeal pursuant to section 16 of the Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, CHAPTER M.16, as amended (“MAFRAA”).

6. Neil Van Loo and Liz Van Loo (the “Appellants”) operate a dairy operation located in Tara, Ontario. The Appellants’ operation consists of two separately licenced dairy facilities on one parcel of land owned by the Appellants. This was accomplished by purchasing an existing dairy facility as an ongoing operation and following with a new dairy facility thereafter. The existing dairy facility under License #635910 is performed using a free-stall parlour barn (the “Parlour Barn”) and the dairy facility under License #516741 is performed using a robotic milking system (the “Robot Barn”). At the time of the hearing, the Parlour Barn held 71.02 kilograms of quota and the Robot Barn held 88.89 kilograms of quota.

7. DFO stated that there are only 78 dairy operations with two Licenses. This is the only dairy operation with two Licenses operating on the same property.

8. The DFO Board conducted a hearing on June 29th, 2021 and determined that the Appellants illegally transported milk between the two licenses in February 2021 contrary to section 8 of DFO Regulation 09/21, which states:

9. (1) All milk shall be transported by persons appointed by DFO as its agents for that purpose.

(2) No person shall transport milk other than a person appointed by DFO as its agent for that purpose.

9. A penalty of $5,000.00 was applied to each License for a total amount of $10,000.00 payable over six (6) months. The DFO Board determined that the six payments would be deducted from the milk statements commencing in October 2021 and ending in March 2022.

10. The factual circumstances are unique in that the Appellants are the only ones with two licenses operating on one single property in Ontario.

11. The Appellants applied for a Reconsideration Hearing of the September 2, 2021 Board Decision. On December 2nd, 2021, the DFO Board upheld its original decision.

THE ISSUES

12. The issue for determination is whether the Appellants illegally moved milk. The Tribunal conducts a hearing de novo and “stands in the shoes” of the DFO and can make any decision the DFO could have made. Accordingly, the issues are as follows:

13. Did the Appellants move milk in contravention of the DFO Regulations?

14. If the Appellants did move milk illegally, is the penalty imposed by DFO appropriate, and if not, what is the appropriate penalty?

THE EVIDENCE

13. The onus is on DFO. DFO does not have any direct evidence that the Appellants had illegally moved milk. The DFO case is based upon circumstantial evidence. The Appellants deny that they illegally moved milk.

14. We will first address the evidence presented by DFO followed by the Appellants’ evidence, albeit the evidence was not presented in that order. More particularly, the order of witnesses was Liz Van Loo, Dr. Andrew De Haan and Andrew Van Loo who testified on behalf of the Appellants followed by Scott Hartle, Jeff Hyndman, and Albert Fledderus who testified on behalf of DFO.

Scott Hartle

15. Mr. Hartle is a Field Service Representative employed by DFO since 1998. He stated that he is responsible for the geographic area of Grey County, the north part of Wellington County, and the east side of Guelph, including Guelph/Eramosa and Erin. Mr. Hartle also stated that he used to be responsible for Dufferin County. As a Field Service Representative, he is the liaison between the producers and the DFO Board policy. He has an obligation to inspect and to enforce the DFO Regulations.

16. Mr. Hartle visits each farm in his area at least once every 15 to 24 months. He will visit more frequently if there are concerns that have been identified; for example, if the farm is not a Grade A farm or there are issues with cleanliness or an elevated Bactoscan reading.

17. He attended the Appellants’ farm on April 20th,, 2021 for a routine inspection. The result of the inspection was that both the Parlour Barn license and the Robot Barn license received Grade A reports. His last visit at the Appellants’ farm was in May 2020 due to a high Bactoscan reading.

18. He stated that Andrew Van Loo did volunteer that he was disposing of milk because he was over-quota. The statement was made outside of the barn towards the east back of the barn and to the south on April 20th,, 2021.

19. Mr. Hartle noticed a bulk tank attached to a trailer in the utility room part of the milkhouse of the Robot Barn. He said it was not common to see a bulk tank, so he took a photograph, which was admitted as Exhibit #2. He had not seen this bulk tank prior to the April 2021 inspection. He explained that the blue bin is a wand-style washer for the tank. He said that inside the cooler is a wand that could be 16” long (or so). He explained that there are cycles to cleaning a tank and that the water can be drained from the tank between cycles. There are electrical lines and a small water line. He stated that there could be a pre-rinse using tepid water followed by a phosphate wash, which is detergent followed by an acid to get rid of the dirt or detergent. It could also have a sanitize cycle depending on the type of tank.

20. Mr. Hartle stated that this unit holds 600 gallons, which he recognized based upon his experience. He also stated that there was a chart on the wall which confirmed it was a 600-gallon tank. Liz Van Loo’s evidence was that there was a chart, but it was not on the wall but in a drawer with colouring books. The chart showed meter reading based upon increments of the dipstick for the tank. The chart was the measurement chart for increments and was a litre chart for that tank.

21. The cord seen in the photo at Exhibit #2 went to a control panel opposite the big door. There were 2 jars on the control panel to put chemicals into the tank. He stated that the cycles are timed cycles.

22. Mr. Hartle also stated that there is a manhole on top of the tank and a dipstick is located in a port between the manhole and the left end of the tank. He also stated that there were no mud tracks in the milkhouse although there was dried mud on the tires.

23. It is important to note that Mr. Hartle testified in chief that he looked inside the manhole cover. He noted that the milk tank was clean and dry.

24. Mr. Hartle testified that he has access to the farm’s records. The Bulk Tank Grader takes a sample and measures it when he picks up milk and records his findings. His expectation is that this farm had an expected volume of 1650 litres for two milkings for the Robot Barn. Mr. Hartle took a measurement and noticed 524 litres of milk in the bulk tank for the Robot Barn. He also measured 3,165 litres of milk in the Parlour Barn bulk tank, where he expected an approximate volume of 2,100 litres of milk.

25. He asked Andrew Van Loo whether he was moving milk. Andrew Van Loo denied moving milk. He asked Andrew Van Loo why he needed a washer for the bulk tank if he was not moving milk. Andrew Van Loo responded that there was algae buildup, and he was using the washer to clean the algae buildup.

26. Mr. Hartle discussed this matter with his supervisor, Phil Alyea. Mr. Hartle was instructed to look at the pickup data from both the Parlour Barn and the Robot Barn. He assembled the Producer Inquiry Charts to show that the rolling average for the Parlour Barn and Robot Barn had decreased in respect to volume of milk, yet the butterfat had increased. Mr. Hartle also collected the pickup history from January 2021 to April 2021 for the Robot Barn. He then prepared the graph of this information. The graphs indicate to Mr. Hartle that as one barn increases in volume, then the other barn decreases in volume.

27. He also created a chart of the credit usage for both the Parlour Barn and the Robot Barn. He noted that the Robot Barn had used up all its over-credits and the Parlour Barn had 276 kilograms of butterfat credits.

28. Mr. Hartle explained that the Appellants were penalized for milk over-quota. There are losses based on production. The true losses to the Appellants are what it costs to produce over-quota product. He also explained the math as set out in line “f” of said document, essentially herd 4% butterfat. It requires 25 litres of milk to produce 1 kilogram of butterfat, so 337 kg of butterfat x 25 litres equals 8,489 litres of milk produced.

29. Under cross-examination, Mr. Hartle admitted that he called ahead of his attendance. He did not see any pumps or hoses. He did not see any pails or fittings, and he did not see any pails with milk residue. He admitted that he did not see any evidence of milk being moved into the tanker trailer. He also admitted that there was no evidence of anything suspicious about moving milk based upon the records from the Bulk Tank Graders.

30. Mr. Hartle also admitted that, based upon the reports, some months one barn would be over quota and the other barn was under quota. In May 2020, the pick-ups inversed where there was a significant decrease in production for the Parlour Barn and a corresponding increase in the Robot Barn. He also admitted that the inverse relationship existed prior to the purchase of the tank trailer. He looked at production from March to June 2017, March 2018, and July 2018.

31. Mr. Hartle admitted that he did not see milk moved between the two barns. Mr. Hartle admitted that there was no sign of movement of the trailer. Finally, Mr. Hartle admitted that there was nothing to prevent the Appellants from moving cattle between the two (2) barns.

32. Under re-examination, Mr. Hartle stated that the production total for both farms appears to be the same when you add up the litres produced. He also noted that in February 2021, the Parlour Barn filled 142% of its quota.

33. He also stated that the only information he was provided that the Appellants were dumping milk came from Andrew Van Loo.

Jeff Hyndman

34. Mr. Hyndman is an employee of DFO employed as a Regional Field Services Manager

35. He said that the two licenses were a “grandfathered” operation. He stated that there are seventy-eight (78) two-license farm operations in Ontario. This is the only one where there are two farm operations on one property.

36. Regulation 761 governs the rules for production of milk. There are provisions against transferring milk from one tank to another. The reason for this is mainly for quality control such as the prevention of cross-contamination. Another reason is agitation and mixing all of the milk together for the same consistency.

37. Mr. Hyndman’s evidence was that there was a significant cost to the Appellants in dumping such large quantities of milk. He looked at the January 2021 Monthly Summary for the Robot Barn. He calculated that the Appellants were paid $73.83 per hectoliter; accordingly, this was a loss of $73 x 60,000 litres allegedly dumped by the Appellants in January 2021.

38. He also said that in his experience, some producers will dump milk into a manure pit. He also said that a lot of producers will just ship the excess milk because of the hassle of dumping and the issue of capacity.

39. Mr. Hyndman reviewed charts and he noted a rise and a drop in production. He stated that normally they see fluctuations in volume, but not drastic changes.

40. Under cross examination, he stated that the Appellants were moving too much milk. He agreed that moving 6,000 litres of milk by pail was a significant undertaking.

Albert Fledderus

41. Mr. Fledderus has been a dairy farmer since 1988. He has sat on the DFO Board of Directors since 2015. He has a robot herd. He has used robots since December 2017. It provides data from a transponder which is attached on the cow. The transponder transfers data to a computer to be read and analyzed.

42. He said that the information produced in the Van Loo barn indicated that something was amiss in the Appellants’ operation. There are no records of moving cows from one operation to another. Records indicated 8 cows died and 38 cows were sold, and that milk production decreased due to cows being sold.

43. Mr. Fledderus said that 42 litres per day would place the Appellants’ operation in the top 1 to 1.5% across Canada. He said that 4.2 litres to 4.7 litres of butterfat is also in top 1% across Canada. The top producers are elite and use all of the tools.

44. He said that there was no need to wash a tank in wintertime if it was just transporting water.

45. He said that dumping was a significant loss in the range of $90,000. Most producers would sell cows or rely upon forage. Also, most producers will wait to dump, if they do, until the end of the month. There is no reason to dump at the beginning of month.

Liz Van Loo

46. Liz Van Loo is the spouse of Neil Van Loo. The two took over the family dairy farm in 1981. In or around 2014, they purchased a larger farm to support three (3) families on it. Her son Andrew Van Loo moved in in August 2014 and her daughter moved in in the Fall of 2014.

47. She testified that they had a frozen water line and used the bulk tank trailer in the barn to transport water to the feeder cattle located at a different barn. She entered into evidence an invoice from Buchanan & Hall dated November 27, 2019. The water line was repaired in the Spring of 2020.

48. The DFO Field Service Representative was Mr. Scott Hartle. On April 30th, 2021, he telephoned in advance to state he would be attending the Van Loo property. Mr. Hartle noticed the cooler or tank trailer. Liz Van Loo heard Mr. Hartle state that farms have been shut down for moving milk.

49. Liz Van Loo stated that they were dumping milk due to overproduction. She stated clearly and unequivocally that they did not move milk from one License to another. She stated that they could move cattle from one barn to another, so it did not make sense to move milk.

50. She introduced an Excel chart showing shipment dates based upon milk statements. She also introduced a summary of results from December 20, 2020 to April 2021, which represented the problems with the start date and end date with the herd.

51. Under cross-examination, she stated that both barns use the same laneway and both barns have never been shut off from the market. She also stated that they have never had a non-grade A rating with respect to both farm operations.

52. She stated that the portable milk cooler had no freon capacity. It did have a smaller tank attached to it that was a washer used to clean out the cooler. She did state that they used it for water. The tank was insulated and was acquired for the water line break for the beef cattle part of their operations. The beef cattle barn was identified as being north of the house and dairy barns.

53. Lori Van Loo was concerned with the amount of milk being dumped. Exhibit 6 shows that in February, 60,000 litres had been dumped. In April it was 50,000 litres, and in May 40,000 litres had been dumped. She stated that they dumped milk once per month. She stated that the amount of milk had nothing to do with herd health problems. They had that much milk because they started producing so much. She admitted that dumping 150,000 litres of milk was a big cost.

54. She stated that the cows become used to the Parlour barn and the Robotic system and are able to move from one to the other without much difficulty.

Dr. Andrew De Haan

55. Dr. De Haan is a Doctor of Veterinary Medicine and is a specialist in herd health, particularly dairy herds.

56. He worked with the Appellants until June 2018. He resumed working with the Appellants again in July 2019.

57. Dr. De Haan testified that the herd was underproducing and was short of milk in July 2019.They were experiencing a reduced number of calvings from what they should have had, and he stated that the herd’s health appeared to be fine. He stated that as the fall progressed in November and December 2020, the calvings almost doubled.

58. He stated that as a result of the increased calvings, the milk production significantly increased in January and February 2021 and continued to go on.

59. Dr. De Haan said that this herd is not typical. He considers this herd to be three herds, not one or two as a Parlour barn and a Robotic barn. He divides the Robotic Barn herd into two groups. There are two sets of robots. One group is bred with AI and the other group consists of staler cows or lower producing ones. He stated that the third herd is the Parlour Barn is a free stall barn. There are fresh cows which stay for two or three weeks before going to the Robot Barn. He stated under cross-examination that management would look at all three herds as one entity from a herd health perspective. He said that cow flow is one entity but that each group was a different management style. He stated that you cannot look at them separately because there was nothing to compare them to accurately.

60. Dr. De Haan remembers meeting in early April. He stated that Lori Van Loo had concerns about the cows, and Dr. De Haan suspected acidosis in the cows in February 2020. The milk production increase occurred in February 2021. Dr. De Haan confirmed under cross-examination that peak milk occurs 50-60 days after calvings. At that time, they had an excessive amount of milk, and they were burning over-credits pretty quickly. They needed to have a plan to have it corrected. They came up with plans to even out milk-flow and make it more profitable.

61. He stated that he did not see any milk moved or any evidence that the Appellants moved milk between the two barns.

62. On redirect, Dr. De Haan stated that the cows went three (3) turns through the robot barn or rather three (3) milkings per day. Dr. De Haan stated that cows as a general proposition do not like being moved. The farmer knows his cows. He said that normally there is initial difficulty and once the cow becomes used to the change it becomes fine.

Andrew Van Loo

63. Mr. Andrew Van Loo is the son of the Appellants. His sister Lori is a nutritionist. He lives at the farmhouse.

64. He stated that the cooler or bulk tank trailer was purchased to transport water to the steer barn. He would fill it with a garden hose and use the tractor to drive it to the steer barn and then gravity feed the water into a Ritchie water fountain. He stated that the probe was a cleaning system that came with the package. He never bothered taking it out. He stated that the last day the cooler tank was taken out of the utility room was in April 2020, after which he no longer needed it for the steer barn.

65. In February 2021, their milk production snowballed. He began selling cows and dumping milk. He only shipped 7,000 to 8,000 litres of milk between both barns.

66. He said he was penalized $6,000 for January 2021.

67. Andrew Van Loo stated that he knew what over-credits and under-credits were. He didn’t pay attention to same as he would leave it to Dr. De Haan and his sister to manage overproduction.

68. He also testified that they had a high Bactoscan test in February 2021 in both barns. This means that there were bacteria in the equipment, which Andrew Van Loo thought was likely due to issues with the hot water not working properly in the Parlour Barn and issues with the cleaning equipment in the Robot Barn.

69. He stated that he was dumping milk every day.

70. Mr. Van Loo testified about the inspection by Mr. Hartle in April 2021. He stated that they started in the Robotic Barn. Mr. Hartle said that the barn needed cleaning. He questioned Andrew about the small water tank and asked if he was using it to move milk. He also asked Andrew if he had been dumping milk that morning and Andrew testified that he answered yes. He said that Mr. Hartle looked in the tank.

71. He denied that he had moved milk between the Parlour Barn and the Robot Barn.

72. He stated that he should have notified the DFO that he was dumping milk.

73. Under cross-examination, Andrew admitted that if he dumped the Robotic Barn milk, he had to dump all of it. He stated that he could somewhat control the Parlour Barn volume of milk that was dumped.

74. He also stated under cross-examination that he did not have the means to put milk into the tank trailer. Andrew stated that he needed hoses, which he did not have. He also admitted that he could use a bucket, but it would take a considerable amount of time, which he did not have.

75. Andrew did not know how much each cow could produce on a given day and did not keep records of that

76. Andrew admitted that it was a fair statement that cows typically do not go from producing 42 litres per day to 60 litres or 55 litres per day.

77. In response to questions from the panel, Andrew Van Loo confirmed that Mr. Hartle looked in the tank. Andrew did not see any advantages to moving milk from one tank to another. He said it was a lot of work. He also confirmed that the mobile tank was in the utility room. He stated that the last day out of the utility room was in April 2020 when he no longer needed it for the steer barn.

NATURE AND SCOPE OF THE TRIBUNAL’S JURISDICTION

78. The jurisdiction for an appeal of this nature is found in subsection 16(1) of the Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, M.16 (“MAFRA Act”), which provides as follows:

16 (1) Subject to subsections (4) and (5), a person who is aggrieved by any of the following orders, directions, decisions, policies or regulation made under the Farm Products Marketing Act and the Milk Act may appeal the matter to the Tribunal:

1. Any order, direction, decision or policy made by a Director.

2. Any order, direction, decision, policy or regulation made by a local board or marketing board.

3. An order, direction or decision made by the Commission that applies specifically to the aggrieved person, to a group of persons of which the aggrieved person is a member or with respect to a particular dispute or incident involving the aggrieved person.

4. Subsection 16(5) of the MAFRA Act sets out pre-conditions for an appeal:

(5) No appeal may be taken from an order, direction, policy, decision or regulation of a local board or a marketing board unless,

(a) the appellant has first applied to the local board or marketing board for a hearing and the local board or marketing board has refused to grant, in whole or in part, the relief requested by the appellant or has not decided the matter within sixty days of the application for a hearing; or

(b) the appellant and the local board or marketing board have waived their respective rights under clause (a) in writing.

80. Subsection 16(11) of the MAFRAA describes the powers of the Tribunal on an appeal:

(11) Upon an appeal to the Tribunal under subsection (1), the Tribunal may by order direct the Commission, the local board, the marketing board or the Director, as the case may be, to take such action as it or he or she is authorized to take under the Farm Products Marketing Act or the Milk Act and as the Tribunal considers proper, and for this purpose the Tribunal may substitute its opinion for that of the Commission, the local board, the marketing board or the Director.

81. The Tribunal conducts a hearing de novo and “stands in the shoes” of the DFO and can make any decision the DFO could have made.

82. DFO takes the position that the applicable standard of proof is on a balance of probabilities and refers to the Meat a Chick Farm Inc. v. Chicken Farmers of Ontario, 1998 ONAFRAAT 13 and Stetler et al. v. Ontario Flue-Cured Tobacco Growers Marketing Board, 2002 ONAFRAAT 15 (“Stetler”) decisions for the proposition that the test is whether DFO has met its onus on a balance of probabilities and if so, then did the producer provide an acceptable explanation, also on a balance of probabilities.

83. The Stetler decision was subject to judicial review and later appealed to the Ontario Court of Appeal. (2005), 2005 CanLII 24217 (ON CA), 76 O.R.(3d) 321, 2005 CarswellOnt 2877, 24217 (Ont. C.A.); leave to appeal refused, (2006) 2006 CanLII 4734 (SCC), 219 O.A.C. 400 (note), 2006 CarswellOnt 930 (S.C.C.). The Court of Appeal confirmed that the standard of proof in an administrative matter is on a balance of probabilities. The Court went on to state that strong and unequivocal evidence within the civil standard of proof is required where either the issues or the consequences for the individual are very serious. The Court went on to describe the evidence required as “clear, cogent and convincing” and did not limit this high evidential standard in disciplinary cases.

84. DFO Regulation 09/21 provides at article 4(4)(ii) that

DFO may refuse to grant or renew or may suspend or revoke a license to engage in the production or marketing of milk…where the licensee has failed to comply with or has contravened the Act, the regulations, the plan or any order or direction of DFO or any term or condition of the license.

85. We find that the risk of loss of a dairy license is a very serious consequence to the Appellants. Accordingly, the DFO must present evidence that is strong and unequivocal on a balance of probabilities.

86. The challenge for DFO is that it did not introduce any direct evidence. Its case relies entirely upon circumstantial evidence. Circumstantial evidence is "evidence that tends to prove a factual matter by proving other events or circumstances from which the occurrence of the matter at issue can be reasonably inferred" (Merriam-Webster's Dictionary of Law (1996), at p.172). See R. v. Cinous 2002 SCC 29, 2002 CarswellQue 261, 2002 CarswellQue 262, [2002] 2 S.C.R. 3, [2002] S.C.J. No. 28, 162 C.C.C. (3d) 129, 210 D.L.R. (4th) 64, 285 N.R. 1, 49 C.R. (5th) 209, 52 W.C.B. (2d) 368, J.E. 2002-576, REJB 2002-29526 at para. 89.

87. A summary of the circumstantial evidence relied upon by DFO is as follows:

a. The presence of the 600-gallon milk cooler (or tank trailer) in the Robot Barn milk house. DFO suggests that this is the method utilized by the Appellants to illegally move milk.

b. The Appellants had a motive to move milk to take advantage of the quota available at the Parlour Barn, as the Robot Barn had used up all of its overcredits. Accordingly, the allegation is that the Appellants were moving milk from the Robot Barn to the Parlour Barn.

c. DFO suggests the presence of extraordinarily high bacteria levels on the same day in both the Robot Barn bulk tank and the Parlour Barn bulk tank is indicative of milk being moved between the two bulk tanks.

d. The milk shipping patterns for February, March and April 2021 are not substantially similar, unlike other months where the pattern is otherwise consistent such as in October, November and December 2020.

88. The difficulty for DFO in presenting this case is that it has no direct evidence that the Appellants moved milk. DFO must demonstrate with clear, cogent and convincing evidence that the Appellants moved milk from one barn to the other. There are a number of facts that are inconsistent with this proposition:

a. Scott Hartle gave two hours notice that he was arriving for an inspection. He inspected the milk cooler. The interior was dry and clean. The tank can hold 600 gallons. A dry and clean tank with no visible odor of chemicals is entirely inconsistent with a milk cooler used to transport milk. It is more likely than not used to transport water as stated by the Appellants.

b. There was no evidence of how the Appellants could transport milk from the Robot Barn bulk tank into the milk cooler. There was no evidence of any hoses. The size of the tank predicates against using a pail due to the quantities allegedly transferred, and as Andrew Van Loo testified, he did not have time to carry that out. Finally, the evidence from both DFO and the Appellants was that the Robot Barn bulk tank was an all or nothing proposition. The bulk tank cannot be partially emptied. It must be fully emptied when milk is removed. This is inconsistent with the DFO theory that milk was moved from this tank.

c. DFO relies upon the cleaning system remaining attached and the presence of the cleaning wand. It also relies upon a chart attached to the wall of the utility room. This chart was not introduced into evidence. The DFO speculates that the chart is indicative of the volume of milk transferred. There is no evidence that milk volumes were identified on the chart or what its purpose was, if any. The cleaning system, the cleaning wand and the chart are not indicative of the milk cooler being used to transport milk.

d. The other issue is that the invoice for the sale of the milk cooler confirms it was purchased in November 2019, and the invoice for the water line repair confirms it was completed in April 2020. This occurred one year prior to Mr. Hartle’s April 2021 attendance.

e. Finally, the DFO relies heavily upon the significant volume of milk dumped by the Appellants. First, it argues that it is convenient that the Appellants argue they dumped milk after hearing the DFO case. There is no issue that Andrew Van Loo stated to Scott Hartle that he had dumped milk on April 20th,, 2021. The only issue is the volume of milk. The DFO evidence is speculative and was not entered as expert evidence. Accordingly, there is no actual evidence to the contrary.

89. Our finding is that it is more likely than not that the milk cooler was not used for the transportation of milk from the Robot Barn bulk tank to the Parlour Barn milk tank or vice versa. Under the circumstances, this finding is sufficient to support a reversal of the Reconsideration Decision.

90. The Appellants readily admit that they wanted to increase the Parlour Barn quota and reduce the Robot Barn quota. This is simple economics, as the Parlour Barn had over-credits available. The explanation is that the herd could use both the Parlour Barn and the Robot Barn. We appreciate the argument of DFO that it is difficult to train a cow to switch to a different system. We also recall that this is the only operation of its kind in Ontario. The Appellants said that they can do it and there is no evidence to the contrary. There is also nothing illegal about mixing the herds.

91. We agree that the high levels of bacteria in both bulk tanks at the same time is some cause for concern. There was evidence that this was not an isolated event for this operation. On its own, this evidence is not sufficient to meet the standard that it is clear, cogent and convincing evidence that the Appellants moved milk.

92. We also agree that the milk shipping patterns are cause for concern. We agree that the pattern is unusual in the period of January, February, March and April. The explanation offered by Andrew Van Loo is that he was dumping extraordinary volumes of milk. DFO asks this Tribunal to reject this argument on the basis that the production volume for this operation would have to have been off the charts. We agree that the evidence supports that the production volume increases were improbable; however, they were not impossible. The other difficulty is that Scott Hartle admitted that Andrew Van Loo volunteered in April 2021 that he was dumping milk. He made this admission at a time when the Appellants were not yet facing any DFO allegations related to moving milk.

93. In his evidence, Andrew Van Loo testified under oath that he did not move milk. This evidence was credible and was not discredited by DFO on cross-examination or by other evidence.

94. Accordingly, we find that the Respondent has not proven on a balance of probabilities that the Appellants moved milk contrary to DFO Regulation 09/21.

ORDER

95. The DFO decision and the penalties imposed by the DFO are set aside.

96. DFO shall credit to the Appellants the $10,000.00 in penalties if these have been already deducted from the Appellants’ milk statements.