The appellant, a mid-sized dairy processor, appealed a decision by the Dairy Farmers of Ontario (DFO) to invoice it retroactively at the highest class price for milk deliveries after multiple audits found its production records unreliable and unverifiable.
The appellant argued that the retroactive invoice constituted an unauthorized penalty under the Milk Act and that DFO lacked authority to impose it.
The Tribunal dismissed the appeal, finding that section 24 of DFO General Regulation 10/17 authorizes DFO to charge the highest class price when a processor fails to provide verifiable milk utilization declarations.
The Tribunal also held that the surcharge was not a penalty but a mechanism to ensure fair compensation to dairy farmers.
Finally, the Tribunal found it lacked jurisdiction to enforce a prior settlement agreement between the parties.