Jack Shaw vs. Dairy Farmers of Ontario

In the matter of the Milk 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 Jack Shaw of Kinburn, Ontario, from a decision of the Dairy Farmers of Ontario to deny his request for an exemption from the 15% Transfer Assessment on the sale of his quota.

Before: Gene Trotman, Vice Chair; Claire Belluz, Member; Richard Smelski, Member

Appearances:
Donald Good, counsel to the appellant, Jack Shaw
Jack Shaw, the appellant
Audrey Shaw, witness on behalf of the appellant
Geoffrey Spurr, counsel to the respondent, Dairy Farmers of Ontario
George MacNaughton, representative on behalf of the Dairy Farmers of Ontario

This appeal was heard in Ottawa, Ontario, on Thursday, August 20, 2009.

Preliminary Matters

Before the hearing commenced, Mr. G. Spurr, the counsel to the Dairy Farmers of Ontario (DFO), raised an issue with respect to the constitution of the panel (consisting of Trotman, Belluz and Smelski). The specifics of the issue he raised are as follows:

1. The appeal is structured around three cases:
   a.Cayer #1 over which Vice Chair Trotman presided (released at the end of March 2008);
   b.The Denby Group in which Smelski participated (released June 2008 and reissued December 2008); and
   c.Cayer #2 over which Smelski and Belluz presided with another (released March 2008).
   

2. The three persons named in the three cases have been assigned to hear this appeal and part of the submission by the DFO will be on the merits of the three above mentioned decisions. It is inconceivable that Smelski and Belluz will make a finding that contradicts or repudiates their previous decision.
   

3. There is no compelling legal reason for the Tribunal to assign two members who participated in the Cayer #2 decision to this appeal. Involved as well are the same counsels and the same respondent.
   

4. DFO does not have a reasonable expectation that this panel will decide differently than previously. There is an expectation by the DFO that another panel will consider things objectively.
   

5. The appellant is claiming that the policy on transfer assessment is discriminatory and this argument is derived from the decision in Cayer #1.
   

6. The appellant is also claiming that the ground for an exemption due to timing is applicable and this argument is based on the decisions in Cayer #1, Cayer #2 and the Denby Group.
   

7. That the "Will Say" statement of the appellant has as a basis for relief:
   a."medical problems" and this is structured around Cayer #1 and Cayer #2,
   b."procedural concerns" related to attempts to discuss matters with a representative of the DFO, and this is structured around Cayer #2.
   

8. That the Denby decision is subject to Judicial Review but that the Cayer #2 decision was not appealed. However, part of what will be discussed during the hearing will be the merits of the three cases.

Mr. Spurr pointed out that, based on the way the Tribunal operates, neither party had advanced notice with respect to the composition of the panel, and thus could not make an objection with respect to it prior to the date of the hearing. He asked that the appeal hearing be adjourned for the purpose of establishing another panel.

Mr. Good, counsel to the appellant, Mr. Jack Shaw, concurred with the submission made by the counsel to the DFO. He stated that Smelski, who was on the panel that decided Cayer #2, wrote the Denby decision and that "we have a bit of a ganging up here." He was concerned that we would spend a day hearing the appeal only to have the decision challenged, giving rise to additional expense involved in a rehearing. Mr. Shaw's appeal, he said, was structured around the three cases and, as such, there was need for a new panel as there is an appearance of an apprehension of bias.

Mr. Spurr submitted that the Cayer #2 case was wrongly decided and asked: "what is the likelihood that you will agree with that?"

The panel deliberated with respect to the submissions made and, after consulting with counsel to the Tribunal, concluded that the hearing should proceed. The panel pointed out to the parties that there are parties that appear before the Tribunal on multiple occasions. As a result, some appellants and respondents will inevitably appear before the same panel members as they did in previous cases. Simply appearing before a member or members who have rendered decisions against the interests of an appellant or respondent in past similar cases is not enough to constitute a reasonable apprehension of bias - something more is required.

Moreover, the panel did not want to support a practice which may preclude future members of panels from hearing cases on the basis of their previous decisions. Decisions of the Tribunal are a matter of public record and accessible to anyone who wishes to view them, including panel members.

The panel ordered the hearing to commence.

Evidence

The appellant, Mr. Jack Shaw, through his counsel, Mr. Good, filed a Notice of Appeal with the Agriculture, Food and Rural Affairs Appeal Tribunal (Tribunal), dated the 29th day of April, 2009, regarding the decision of the DFO to deny his request for an exemption from the 15% Transfer Assessment on the sale of his milk quota. The relevant evidence gleaned from the documentation filed and the testimonies given is as follows:

1. Mr. Shaw carried-on business as a dairy farmer for 50 years under licence number 371122. He is now 75 years of age. Ms. Cheryl Somerville, a financial planner with the Royal Bank of Canada, met Mr. Shaw and his wife in the period 2000-2001, and had basic discussions with them regarding the importance of retirement planning.

2. Ms. Somerville prepared a Personal Financial Plan, printed April 20, 2005, based on Mr. Shaw's desire to retire and on information provided by him. According to Ms. Somerville, the plan indicated that Mr. Shaw could retire comfortably, but would have to maintain a budget. No date was indicated in the plan as to the precise date of Mr. Shaw's planned retirement.

3. In the fall of 2005, Mr. Shaw had surgery on his prostate and for three months thereafter was unable to work on his farm. Mr. Shaw testified that this ailment caused him to realize that it was time to exit the industry and that realization became more intense in March 2006, when he lost his daughter in law. As a consequence, he had Ms. Somerville prepare and provide another Personal Financial Plan printed June 26, 2006. This plan was similar to the 2005 plan, and indicated a planned retirement date of January 1, 2007.
   

4. Ms. Somerville testified that, although she did not know the "precise" date of Mr. Shaw's planned retirement, he and his wife knew that it was going to be likely in the fall of 2006. Her "Will Say Statement" indicated that "In 2005 and 2006 Jack Shaw consulted Cheryl Somerville about his plan to exit the dairy industry and retire by January 1, 2007." Ms. Somerville stated further that she did not know of any conditions or events that would prevent Mr. Shaw from selling his quota in July, August, or September in 2006.

5. Besides his prostrate problem, Mr. Shaw stated that he had problems with acid reflex, for which he took "Pariet", and with his cholesterol, for which he took "Crestor", and that he also took "Aspirin" due to his age. He also had his haemorrhoids (caused by lifting) removed and underwent treatment to his oesophagus as he had difficulty swallowing due to its swelling.

6. In Mr. Shaw's examination-in-chief, he stated that his medical conditions "had no effect" with respect to his desire to exit the industry. He realized that it was time to get out of the industry before anything serious happened and so that he and his wife could spend more time together in his retirement. In addition, Mr. Shaw's wife testified that when the financial plans were being developed she felt that because of his medical problems and their respective ages, "it was time to get out and smell the roses."

7. Mr. Shaw informed the panel that on October 19, 2006 he received a letter from the DFO which stated that the November exchange will be closed, and that information "hit him like a bomb shell" because he had planned to exit the industry for two years and had obtained financial plans for so doing. When the DFO closed the November exchange and introduced the transfer assessment policy without notice, Mr. Shaw testified that all his plans were thrown "into limbo".

8. Mr. Shaw testified that, following the introduction of the transfer assessment policy, he decided to hold off selling his quota, as he was unsure whether the policy would remain in effect. However, because the DFO in the span of three months in 2006 had introduced three policy changes, including the transfer assessment policy, Mr. Shaw indicated that the inconsistency on the part of the DFO caused him to worry. As a consequence, he offered to sell 34.39 Kilograms of quota at $27,987.00 per kilogram on the May 2007 quota exchange. That offer was unsuccessful, as the offering price was above the exchange clearing price for that month.

9. The quota was sold eventually on the June 2007 exchange. Mr. Shaw claimed that he went in with a low price as he definitely wanted to leave the industry. Due to this sale, he was assessed a 15% transfer assessment, which amounted to 3.658 kg or $98,169.75.

10. By letter dated July 21, 2008, approximately one year after the sale, Mr. Good, counsel to Mr. Shaw, wrote to the DFO requesting an exemption from the transfer assessment policy and reimbursement of the $98,169.75 on the basis that:
    a. Mr. Shaw was given no warning that the policy would be implemented immediately and that the November 2006 quota exchange was closed without prior warning thus preventing the appellant from selling his quota at that time as planned, and
    b. the DFO breached the common law principle of procedural fairness by depriving Mr. Shaw of a fair and open process and by implementing a policy without warning.
    No medical grounds were provided as a basis for the exemption request.

11. By letter dated September 15, 2008, George MacNaughton, Director, Production Division of the DFO, responded to Mr. Good, and informed him that the Board of the DFO felt that an exemption was not warranted on the basis, among other things, that "quota is a right to a market, it is not a tangible asset and is the property of the Dairy Farmers of Ontario. Producers can purchase or sell quota according to the DFO quota policies in place at the time that the producers make the transactions… quota is not a retirement, disability or life insurance fund and should not be considered as such,"

12. On October 29th, 2008, Aaron Hirschorn, an associate of Mr. Good, wrote to George MacNaughton requesting a meeting before the Board of the DFO to reconsider the matter. John W. Karn, Secretary to the Board, responded by letter dated November 10, 2008 stating, in part, that the request will be heard on Tuesday, December 16, 2008 at 1:15PM at DFO's board room at 6780 Campobello Road, Mississauga. The letter made it clear that the hearing will be "a reconsideration hearing and, as such the Board will be expecting …evidence that might cause it to change its earlier decision."

13. At the Board meeting, Aaron Hirschorn submitted that Mr. Shaw should be granted an exemption from the transfer assessment on the grounds that:
    a. Mr. Shaw had planned to sell on the cancelled November 2006 exchange.
    b. The transfer assessment discriminates against older producers, "because they can't remain in the industry long enough to gain the benefit of having the quota collected from the transfer assessment returned to them."
    c. No advanced notice was given regarding the policy change.
    Again no medical grounds were submitted as a basis for the exemption request.

14. At the conclusion of the meeting of the Board it was duly moved, seconded and carried that Mr. Shaw's "circumstances were not considered sufficiently unique to grant an exception from the transfer policy." This decision of the Board was relayed to Mr. Hirschorn by letter dated December 18, 2008.

As a result of this denial, Mr. Good, on behalf of Mr. Shaw, filed a Notice of Appeal with the Tribunal dated the 29th day of April, 2009. The Tribunal followed this up by issuing a Notice of Hearing dated the 26th day of May, 2009, stipulating, among other things, that the appeal by Jack Shaw was "from a decision of the Dairy Farmers of Ontario to deny his request for an exemption from the 15% Transfer Assessment on the sale of his quota."

Submissions by Counsel

Mr. Good submitted on behalf of the appellant, Mr. Shaw, that:

1. The hearing is a request for an exemption from the November 2006 transfer assessment policy, a hearing de novo (a new hearing), in which the panel is entitled to hear any evidence including evidence not presented to the DFO. Moreover, the panel has the authority in law to step into the shoes of the DFO and make any decision it could have made and may substitute its opinion for that of the DFO.

2. Mr. Shaw is appealing the decision of the DFO, dated September 15, 2008, denying him the exemption (see paragraph #11 above). As the panel was hearing the matter de novo, it was open to hear any evidence.

3. The case on which he will be relying most significantly is the Cayer #2 case because it is remarkable how the two cases, the Cayer #2 case and Mr. Shaw's case, are similar in nature. Both families were planning to leave the industry. The Cayers were planning to leave in January 2007 for tax purposes, and the Shaws were planning to leave in November 2006. Both were affected by the November 2006 closing of the exchange and the transfer assessment policy which followed. Both Mr. Cayer and Mr. Shaw, the older of the two, had medical problems.

4. In the Cayer #2 case the Tribunal granted the appeal for any one of three reasons:
   a. on the basis of compassion due to circumstances experienced by Mr. Cayer causing undue hardship; or
   b. on the basis that an orderly exit from the industry was in progress prior to the implementation of the transfer assessment and that exit from the industry was imminent when the policy was implemented (underlining added); or
   c. due to errors and omissions during the DFO exemption request procedure.

5. Any one of the three reasons in the Cayer case would apply to Mr. Shaw's case. However "b" is directly on point. Mr. Shaw had planned an orderly exit from the industry as early as 2005, and this was not refuted. If that ground, or reason, supports the recovery of the funds by Cayer, then it should similarly support Mr. Shaw's request for recovery of the funds in question, as his "case is on all fours in spades."

6. The panel was in a position to determine whether compassionate grounds are applicable to Mr. Shaw's case. The grounds are medical, age, and the planned orderly exit from the industry, which have not been refuted. Fairness dictates that one should be treated like the other. If anything, fairness favours Mr. Shaw.

7. The Denby case is also significant not because of any legal principles, and Mr. Good was not asking the panel to rely on such principles, but because of the findings of fact contained in the case. Mr. Good stated the unrefuted facts of that case are as follows:
   

   a. "the DFO determined that there was an issue with respect to the rising cost of quota; DFO determined the cost of quota to have been an issue of concern since 2002 (MacNaughton)."
   b. "Other than a joint meeting with the Quebec Board (Federation des producteurs de lait du Quebec) in the Spring of 2006 and a 1988 study commissioned by the DFO there were no detailed or expert impact analyses conducted to determine the effect such a policy change would have on producers' business strategies."
   c. "There was a 16 day period to canvass producers for input into a new policy based on the DFO memo dated November 1, 2006 to all producers and that this amount of time was not adequate."
   d. "Despite the fact that there were a number of producer meetings held to discuss quota policy options, there was no reference at the meetings to the immediate implementation of a 15% transfer assessment nor the cancellation of the December 2006 Quota Exchange; which did not permit producers to buy or sell quota during that period."
   e. "Many of the board members were relatively new to the Board and inexperienced in making such difficult decisions."
   f. "the DFO Chair indicated that the decision to implement quota policy changes was based "on gut feeling."
   g. "Based on DFO testimony, there was no sense of urgency and no need for drastic changes to the quota policy and that only fine turning was needed."
   

   It was Mr. Good's further submission that:

8. Mr. Shaw was planning to leave the industry in November 2006 when he suddenly "gets this policy thrown at him" at a time when it was too late to do anything about it. There was no evidence brought forward at this hearing to refute the findings of fact in the Denby case, particularly the fact that the decision to implement the quota policy was based "on gut feeling." In addition, there was no evidence that the November 2006 policy was based on a sense of urgency.

9. The Cayer case has not been appealed in any way. "It is on the books. It is the law of this Tribunal. It is good law." Mr. Shaw's circumstances are no different to Cayer's and, if anything, they are more compelling. There should be an expectation of reasonably similar treatment for people in reasonably similar circumstances.

10. There is no evidence that the Shaw case would undermine policy. The DFO did not "go down the tubes" when it paid out to Cayer $114,492.80 and made other payments to other farmers. Those cases have not harmed the industry. Granting $98,169.75 to Mr. Shaw is no different than the payment made to the Cayers, but it will have tremendous impact on Mr. Shaw's lifestyle because, according to Ms. Somerville, "things are pretty tight" with the Shaws.
    

Mr. Spurr submitted, on behalf of the DFO, that:

1. The grounds of appeal as set out in the Notice of Appeal are a combination of the Notice of Appeal, evidence today and the "Will Say" Statement. The appeal on medical grounds was not submitted to the DFO in Mr. Shaw's initial request in July 2008 or through a reconsideration hearing subsequent to that date. Mr. Good submitted that this was "fair game" because the hearing before the Tribunal is a hearing de novo; and, accordingly, it was "fair game" for Mr. Shaw to bring up something new. According to Mr. Spurr, that is not the issue. The issue is whether there are grounds for appeal on a matter that is brought to the Tribunal for the first time. It is a question of jurisdiction for the Tribunal.

2. Mr. Spurr explained that under the Ministry of Agriculture, Food and Rural Affairs Act, the Tribunal could stand in the shoes of the DFO and make decisions it could have made, but did not. However, there is no decision by the DFO on an exemption request based on medical grounds because such arguments were never put to the DFO. The Tribunal's authority to step into the shoes of the DFO must be derived from a decision the DFO made or could have made but did not. Moreover, the new policy of the DFO pertaining to exemptions based on medical grounds, in effect after the Cayer #1decision was released in June 2008, is that such exemptions are not allowable. The request by Mr. Shaw for an exemption was in July 2008, after the time when the policy that stated medical exemptions would not be granted was adopted and therefore not allowable. In addition, Mr. Shaw did not appeal that June 2008 policy.

3. Regarding the appeal on the ground of discrimination due to age, Mr. Spurr categorized that argument as baseless as there was no evidence put forth to support the same; and, therefore, the matter could not be considered by the panel. With regard to the ground advanced by Mr. Shaw that when the November 2006 policy was introduced without warning or notice there was in existence his prior plan to exit the industry, Mr. Spurr indicated that the DFO did not know of Mr. Shaw's prior plan to exit the industry. Nothing precluded Mr. Shaw from exiting the industry before November 2006; and while a Financial Planning update was provided to Mr. Shaw before June 2007, the DFO heard nothing about the impact of the loss to Mr. Shaw of the $98,169.75.

4. Mr. Shaw's case, according to Mr. Spurr, boils down to the nature of quota in the hands of producers. Considering the fact that the quota has a significant value on its sale, considering the significant increase in its value over a short period of time, and considering further the income that the quota provides the producer, the DFO takes the position that the quota and the value acquired from it are not intended to constitute and should not constitute a retirement fund. There is no rational basis to grant an exemption to the application of the transfer assessment.

5. In Mr. Spurr's view this appeal was really about the November 2006 transfer assessment policy changes, yet this matter reached the Tribunal in August 2009 without an explanation as to why it took so long. This delay, he said, is an issue because the Tribunal has the authority to dismiss or deny relief, and because anyone with a grievance has an obligation to bring it forth in a timely fashion.

6. Regarding the three reasons for granting the appeal in Cayer #2, Mr. Spurr submitted that with respect to reason (a), "compassion due to circumstances …causing hardship", no complaint has been made with respect to undue hardship, and the arguments regarding compassionate grounds have not been stressed. With respect to reason (b), "orderly exit from the industry was in progress …when the policy was implemented", DFO is of the view that the policy does not lend itself to this type of exemption. So far as reason (c) is concerned, "errors and omission (on the part of DFO) during the DFO exemption request procedure", there has been no complaint with respect to it.

7. Mr. Spurr said that Mr. Good indicated that he will be relying on the facts as found in the Denby decision and not on the legal principles referred to therein. Mr. Spurr submitted that the problem with the Denby case is that it mixed the law and the facts and that the latter was derived from an erroneous appreciation of the applicable legal principles. By misconstruing the legal principles regarding policy making in the Denby decision, the Tribunal skewed the facts. As a consequence, he concluded that the facts of the Denby case cannot be relied on.
   

Rebuttal by Mr. Good

Mr. Good submitted that this appeal, as the Notice of Appeal clearly states, pertains to a request for an exemption from the 15% Transfer Assessment on the sale of Mr. Shaw's quota. It is not an attack on the policy pertaining thereto. Mr. Shaw's request is not time barred and no one has ever told him so. This is an exemption hearing, relying on exemption principles and cases. There is a misconstruction of the Cayer #2 case. Mr. Cayer was not retiring. The Cayer #2 case stands for the principle that if the DFO took away money from a producer on dubious grounds, and he needs it on compassionate grounds, it should be given back to him. Mr. Shaw has greater need than Mr. Cayer.

Mr. Good further submitted that, while quota belongs to the DFO, to say it is not an asset in the hands of producers does not reflect reality. The producers can use it as security, buy and sell it and put the money in their pockets. In Mr. Shaw's case, had he sold his quota in September, the money from the sale would have been all his.

The Issues

1. Does the Tribunal have the jurisdiction to consider grounds for appeal which were
   not raised before the DFO board?

2. On what basis should an exemption request be granted?

3. Is an exemption warranted in this case?
   

The Findings

1. Jurisdiction of the Tribunal

According to s. 16(5) of the Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, c. M.16. (the Act), an appeal to the Tribunal from "an order, direction, policy, decision or regulation of a local board or a marketing board" will only be accommodated "if the appellant first applied to the local board or marketing board and has been refused to grant in whole or in part the relief requested…" The appellant applied to the board in question and his request was refused. During his appeal to the Tribunal, he introduced medical evidence (new evidence) which was not raised at the hearing of the DFO board.

The issue, then, is whether the Tribunal has the jurisdiction to admit and consider such evidence. The Tribunal finds that it has such authority by virtue of s. 16(11) of the Act. That section states in part as follows: "Upon an appeal to the Tribunal…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 or the Director." In order to comply with this latter requirement, it is reasonable to assume that the legislature must have contemplated the need for the Tribunal to admit and consider evidence not having been placed before a Commission, local board or Director; otherwise the Tribunal will simply be reviewing decisions of the entities involved. Had that been the intention of the legislature, it could have stated so clearly and unequivocally.

2. Basis for Granting an Exemption

The Tribunal finds the reasoning on Cayer #2 persuasive and therefore accepts the criteria as decided in Cayer #2 as the basis for granting an exemption. The criteria from Cayer #2 were as follows:

a. on the basis of compassion due to circumstances experienced by Mr. Cayer causing undue hardship; or
b. on the basis that an orderly exit from the industry was in progress prior to the implementation of the transfer assessment and that exit from the industry was imminent when the policy was implemented (underlining added); or
c. due to errors and omissions during the DFO exemption request procedure.

The Tribunal accepts these criteria because there were no other compelling arguments put forward as to what other criteria could be used to evaluate an exemption request.

The Counsels for both parties cited Cayer #2 and the Denby cases in their respective submissions. Counsel to Mr. Shaw stressed the Shaw case was "on all fours in spades" with Cayer #2. Counsel to the DFO emphasized that Cayer #2 was wrongly decided in spite of the fact his client, the DFO, did not appeal the decision. Due to the opposing views with respect Cayer #2, an examination of its facts and decision is warranted.

John Cayer carried-on business as a dairy farmer. He had significant health problems beginning in the 1990s, including the removal a cyst on his bowel, infection of his bowel, inflammation of his heart envelope, and injury to his tailbone. His doctor testified that Mr. Cayer's health problems were such that he was in chronic pain and could not deal with the activities of daily living including walking and thus was incapable of working as a dairy farmer. His medical problems were compounded by the death of his wife and the responsibility of raising four children ranging in ages from seven to one. This responsibility, coming as it did in the midst of his medical concerns, affected his mental well-being.

Due to Mr. Cayer's failing health and inability to cope with his dairy farm, he decided in 2005 to make preparations to exit the industry and sought financial and other advice. Based on that advice, he fixed early January 2007, for tax reasons, as the date for his exit, and put in motion his exit strategy. For example, "he aggressively paid down his debt and over-credit on the milk production." He refused to upgrade his equipment. He transferred quota to his wife to minimize the tax implications on his planned sale of quota. His planned sale of the quota in early January 2007 was realized. That sale triggered the invocation of the November 17, 2006 transfer assessment policy, and, as a consequence the imposition of an assessment on the Cayers of $114,492.80.

The Cayers applied to the DFO for an exemption from the transfer assessment policy and after being refused took the matter on appeal to the Tribunal. The Tribunal decided that "the circumstances experienced by the Cayers warrant an exemption from the transfer assessment policy for any of three reasons: first, on the basis of compassion due to ill health and family challenges experienced by Mr. Cayer causing undue hardship; second, on the basis that an orderly exit from the industry was in progress prior to the implementation of the transfer assessment and that exit from the industry was imminent when the policy was implemented; and third, …due to errors and omissions throughout the exemption request procedure." (Underlining added)

3. Is an Exemption Warranted in this Case?

Comparing the Cayer #2 case to Mr. Shaw's the Tribunal finds, on a balance of probabilities, that there were no circumstances experienced by Mr. Shaw which caused him undue hardship to the extent that they give rise to an exemption based on compassionate grounds. The Tribunal accepts as a fact that Mr. Shaw had medical problems, but they were all treated and he was able to return to work, unlike Mr. Cayer who could not do so. Mr. Shaw did not suffer like Mr. Cayer from chronic pain and the inability to perform daily life chores including the ability to walk. It is true that Mr. Shaw lost his daughter- in- law, but that loss cannot be compared with Mr. Cayer's loss of his wife, and leaving him with family challenges and the added responsibility of looking after four young children, at a time when he was experiencing chronic pain from his medical problems. Based on the evidence, there was no comparable "undue hardship" experienced by Mr. Shaw as was the situation in the Cayer case.

The Tribunal also finds on a balance of probabilities that no orderly exit from the industry on the part Mr. Shaw was in progress prior to the implementation of the transfer assessment policy and that exit from the industry was not imminent when the policy was implemented. While he had Personal Financial Plans prepared in 2005 and 2006, that was the extent of his planned orderly exit. Mr. Shaw was in the industry for 50 years and was in his early 70s. He was contemplating retirement, as both he and his wife testified, and hence the reason for his financial plans. (See par. 6. under Evidence)

However, there is no specific evidence to suggest that his exit from the industry was imminent when the transfer assessment policy was implemented. On the basis of Mr. Shaw having multiple financial plans prepared and the Tribunal receiving limited information for the 2005 plan, the Tribunal finds on the balance of probabilities that Mr. Shaw's exit from the industry was not imminent at the time the policy was implemented. The financial plans he obtained were more exploratory in nature rather than a real exit plan.

In spite of the second financial plan identifying an exit from the industry on January 1, 2007, the Tribunal is not compelled by the sum of the evidence that this is an accurate reflection of the Shaw's retirement plan. This comparison is in sharp contrast to the Cayer case. Mr. Cayer took care of his finances including his tax situation prior to November 17, 2006, and sold his quota approximately one and a half months after that date. In the case of Mr. Shaw, he sold his quota approximately six and a half months after the transfer assessment policy was implemented. Financial Planning Statements without timely follow-up actions can not be construed as evidence of an orderly exit from the industry being in progress prior to the implementation of the transfer assessment policy and that his exit from the industry was imminent when the policy was implemented.

DECISION

It is the decision of the Tribunal that the appeal of Mr. Shaw, from a decision of the Dairy Farmers of Ontario (DFO) with regard to his request for an exemption from the 15% Transfer Assessment on the sale of his quota, be denied. The decision of DFO is upheld.

Dated at Ottawa, Ontario this 9th day of November, 2009.