Stetler v. Agriculture, Food and Rural Affairs Appeal

Stetler v. Agriculture, Food and Rural Affairs Appeal Collection Decisions of the Court of Appeal Date 2005-07-08 Docket numbers C41821 Judges Borins, Stephen; Feldman, Kathryn N.; Cronk, Eleanore Ann Subject Civil Decision Content DATE: 20050708 DOCKET: C41821 COURT OF APPEAL FOR ONTARIO BORINS, FELDMAN and CRONK JJ.A. B E T W E E N : Wyatt Stetler and 934671 Ontario Limited Respondent F. Paul Morrison and Jacob Glick, for the respondents Stetler and 934671 Ontario Limited - and - The Ontario Flue-Cured Tobacco Growers’ Marketing Board Appellant Barry Bresner and Freya Kristjanson, for the appellant - and - The Agriculture, Food and Rural Affairs Appeal Tribunal Respondent David Vickers for the respondent the Agriculture, Food and Rural Affairs Appeal Tribunal and for the intervenor The Attorney General for Ontario -and- The Attorney General for Ontario Intervenor Heard: December 16, 2004 On appeal from the decision of Justice Tamarin M. Dunnet, Justice John R.R. Jennings and Justice Colin Campbell, sitting in the Divisional Court, dated December 17, 2003, reported at (2003), 179 O.A.C. 398 (Div. Ct.). FELDMAN J.A.: [1] The respondent Wyatt Stetler is a tobacco farmer who, along with his corporation the respondent 934671 Ontario Limited, was found to have engaged in the unlawful sale of tobacco outside the auspices of the Ontario Flue-Cured Tobacco Growers’ Marketing Board’s (the “Board”) quota system. The penalty was the cancellation of the tobacco quota allotted to the respondent and to the respondent company. The original hearing was before the Board, and its decision was substantially confirmed on appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal (the “Tribunal”). [1] On judicial review, applying a standard of correctness, the Divisional Court quashed the decisions of both the Board and the Tribunal and declined to send the matter back to the Tribunal for a further hearing. [2] The appellant Board obtained leave from this court to appeal the decision of the Divisional Court and asks that the decision of the Tribunal be re-instated, or at least that the matter be referred back to the Tribunal for a new hearing. In the event the appeal is successful, the respondents ask that the penalty imposed by the Tribunal be reduced. The Decisions Below (1) The Board [3] The respondents were charged with selling, packing, shipping, transporting or disposing of tobacco on three occasions between December 1, 1997 and March 22, 1999 other than through the Board, contrary to one or more of the provisions of s. 5 of Regulation 435, R.R.O. 1990, as amended, under the Farm Products Marketing Act, R.S.O. 1990, c. F.9, and ss. 9(3), (4), (5) and 21 of the General Regulations of the Board. [4] The Board originally adjourned its hearing at the request of the respondents to allow them to first deal with charges brought against Wyatt Stetler and his daughter Lori Stetler under the Excise Act, R.S.C. 1985, c. E-14, in respect of the same alleged conduct. In January, 2001, Wyatt Stetler made an agreement whereby the Excise Act charges were stayed. In consideration of the stay, he agreed that all of the evidence in the Crown brief would be submitted in evidence before the Board, subject to the right of counsel to address the proper interpretation of and conclusions to be drawn from that evidence by the Board. [5] The evidence presented at the Board hearing consisted of that record, which included transcripts of wiretapped conversations, truck rental records, witness statements and videotapes gathered by the RCMP during their investigation into illegal tobacco sales. RCMP Constable Reed also testified regarding the criminal investigation and the surveillance conducted on the cube van that was used on the three occasions in question to transport tobacco, allegedly from the Stetler farm to Quebec. Wyatt Stetler also testified. Both the Board and the respondents were represented by counsel. No transcript of the proceedings was made. [6] In its reasons, the Board set out its findings of what occurred based on the evidence presented. The Board also reproduced extensive passages from the wiretap transcripts from which it drew inferences. It set out the respondents’ position, which was a denial that they had participated in the unlawful sale of tobacco and the suggestion that the tobacco that was picked up for transport was not from the Stetler farm. The Board then stated its conclusions. [7] The following is a summary of the Board’s factual findings: The RCMP in Quebec began the investigation in September 1998, after noting a cube van with Ontario licence plates delivering tobacco to Marcel Guillemette in Mascouche, Quebec. On the evidence, Ronald Coucke had made an arrangement with a number of Ontario tobacco farmers to purchase tobacco for sale to M. Guillemette. The Hertz rental records from the Simcoe outlet showed that the same cube van was rented 52 times between December 1997 and March 1999 by Ronald Coucke, his father Joseph Coucke or his wife Janet Stetler, the former wife of Wyatt Stetler and the mother of Lori Stetler. Each time the van was driven approximately 1500 kilometres and delivered tobacco to M. Guillemette. On three occasions, September 13, 1998, September 20, 1998 and February 4, 1999, the cube van was observed under police surveillance heading toward and away from the Stetler farm and then on to Quebec. [8] On the nights of September 13th and 20th 1998, the cube van was driven into a lane on the Stetler farm. The RCMP surveillance officer could not observe the van at the farm because of the darkness and farm buildings that obstructed the view. On the 13th, the van did not leave the farm the same way that it entered. The RCMP later discovered that the lane connected to a road north of the farm, and concluded that the van must have departed using that route. On September 20th, the van departed the same way that it entered, 25 minutes following its arrival. RCMP surveillance teams followed the van to Quebec and witnessed bales of tobacco being unloaded from it. [9] On January 22, 1999 the RCMP obtained judicial authorization for certain telephone wiretaps as well as for a listening probe in the cube van. This gave them information about future deliveries, including one on February 4, 1999. On that evening, the cube van was picked up at Hertz and followed to the Stetler farm. The van was on the farm property for 13 minutes, and was under continuous RCMP surveillance until it arrived in Quebec, where 90 bales of tobacco were unloaded. The van was driven by Ronald Coucke’s son Joseph Coucke and by Daniel Lucas. [10] The Board used the wiretap evidence to help it understand how the shipments were arranged. The recorded conversations were between Ronald Coucke and Marcel Guillemette on February 4, 1999 and February 5, 1999, between Wyatt Stetler and Lori Stetler on February 5, 1999, between Janet Stetler and Lori Stetler on February 17, 1999, between Ronald Coucke and Janet Stetler on February 18, 1999, between Wyatt Stetler and Lori Stetler on February 27, 1999, between Ronald Coucke and Lori Stetler on March 1, 1999 and between Daniel Lucas and Joseph Coucke on March 12, 1999. [11] Wyatt Stetler testified that he had not participated in the unlawful sale of tobacco. He also denied that any of the tobacco shipped to Quebec came from his farm, but said that if it did, it was without his knowledge. Mr. Stetler’s counsel, Mr. Peel, suggested that the laneway into the Stetler farm could have been used to access other farms via a railway line that cut across the Stetler property. [12] Having reviewed the evidence and the position of the respondents, the Board then stated its conclusions. First, the Board was satisfied beyond a reasonable doubt that the 90 bales of tobacco were picked up from the Stetler farm on February 4, 1999 and that such a quantity could not go missing without being noticed by Wyatt Stetler. Second, it found on a balance of probabilities that Wyatt Stetler unlawfully sold tobacco on September 13 and September 20, 1998. The Board specifically rejected the submission that the cube van only passed through the Stetler property to another farm or farms to obtain the tobacco. The Board reasoned that on February 4, 1999 the path would likely have been impassable with snow and there was insufficient time (15 minutes it said) to get to another farm. The Board also relied on Constable Reed’s testimony that none of the farms of farmers accessible by that path was implicated in the investigation. [13] The Board also rejected as incredible, Wyatt Stetler’s alternative position that if the tobacco did come from his farm, it was done without his knowledge. The quantities involved were too large for an experienced tobacco farmer not to notice that they were missing. Also, the Board used the recorded wiretap conversations to infer that Wyatt Stetler knew of the scheme. [14] The Board rejected an argument made by counsel for the respondents, that there was no evidence to show whether it was Wyatt Stetler’s tobacco or the respondent company’s tobacco that was shipped unlawfully. The Board concluded that the respondent company is Wyatt Stetler’s alter ego and, therefore, the distinction between the respondents was not significant to the Board. [15] The Board also took into account Wyatt Stetler’s testimony that, on more than one occasion, he transferred tobacco to neighbours to sell using their quota when he had insufficient quota of his own to sell all of his tobacco. As this activity also constituted the illegal sale of tobacco, the Board viewed it as reflective of a cavalier attitude towards the Board and the Regulations. [16] Finally, the Board said that based on “the totality of the evidence,” it had “no difficulty concluding that”: (a) Wyatt Stetler had engaged in the unlawful sale of tobacco on at least three occasions; (b) he would have continued to do so had Ronald Coucke agreed to pay in advance; and (c) he had previously engaged in unlawful sales to his neighbours. [17] The Board went on to determine penalty. I will discuss that aspect of its decision later in these reasons. (2) The Tribunal [18] On an appeal from a decision of the Board, the Tribunal is authorized to hold a hearing to which the Statutory Powers Procedures Act, R.S.O. 1990, c. S. 22 (“SPPA”), applies. The Tribunal may substitute its opinion for that of the Board: Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, c. M.16, s. 16(11). [19] At the Tribunal hearing, both the Board and the respondents were represented by the same counsel as at the Board hearing. No transcript of the proceedings was made. The Tribunal first noted, as a matter of background, that it was informed that the Board and the respondents had agreed that the evidence in the Crown brief from the RCMP Excise Act investigation could be submitted before the Board at its hearing into the matter, subject to the right of counsel to address the proper interpretation of and conclusions to be drawn from that evidence on appeal. The Tribunal also noted that the time within which the stayed criminal charges against the respondents could be reactivated had passed. [20] The Tribunal received certain written documentation as evidence, although it did not describe the content of that documentation in its reasons. It also heard the evidence of four witnesses: Dudley Stetler (Wyatt Stetler’s son), Wyatt Stetler, RCMP Constable Ed Ferrara and Gary Godelie, an experienced tobacco farmer and Vice-Chair of the Board. [21] In its reasons, the Tribunal set out the two issues to be determined, gave a detailed recitation of the oral evidence given by each of the witnesses, then a description of the submissions made by counsel and finally, stated its findings. [22] The two issues were: (a) whether the respondents participated in the unlawful sale of tobacco on September 13 or 20, 1998 or February 4, 1999; and (b) if they did, was the penalty imposed by the Board appropriate and, if not, what was the appropriate penalty. [23] Dudley Stetler testified about his knowledge of the geographic area. In that context, he testified that other farms were accessible from the Stetler farm using the abandoned railway line and the path beside it. He had used this route in the winter, although it was neither lit nor ploughed. Two of the accessible farms were the Devos farms, another farmer who had admitted involvement in illegal tobacco sales. Those farms were two and five miles respectively from the Stetler farm. He also testified that his sister Lori lived on the Stetler farm at the relevant time and that his father lived part- time on the farm and part-time in Delhi. He considered his father to be a hands-on farmer. [24] Wyatt Stetler testified that he had grown tobacco all his life, and that he had not illegally sold tobacco to Ronald Coucke or anyone else on the three dates charged or at any other time. He said that he was aware that Ronald Coucke and Janet Stetler had hinted to her daughter Lori that money could be made selling tobacco in Quebec, but he never spoke directly to Ronald Coucke and did not know how much tobacco he wanted or the price he would pay. He stated that it was his understanding that Ronald Coucke was looking for hand-tied tobacco, and that he had none on his farm. Nor did he know Marcel Guillemette. He never noticed any tobacco missing, but said that most of it was in bales so he would not necessarily notice. On the issue of selling tobacco to neighbours, he said that he had shipped through the Board warehouse using another grower’s shipping number and that he had heard that 25 per cent of growers did this, including a member of the Board. He did not read well and did not know that he was not allowed to sell tobacco in this manner. He did know that he required a permit to transport tobacco. [25] On February 27, 1999 in a recorded conversation with his daughter Lori, Wyatt Stetler said: February 27, 1999 LS: what did you want WS: jus’ wonderin’ if you had any ring a ding a lings (pause) no LS: did I have any c…calls… WS: you know what I mean yeah LS: no WS: oh you know what to say when you talk eh LS: yeah I guess WS: you want up front LS: yeah WS: you know what I mean LS: yeah WS: that will stop LS: mmhmm WS: ah shit On March 1, 1999, Lori Stetler reported to Ronald Coucke as follows: March 1, 1999 RC: so did you’a ever … did you ever get around to talking to your dad LS: yeap I did (unintelligible conversation in background) but ah he said he wanted it up front before you took any [Emphasis added] [26] With respect to his February 27, 1999 conversation with his daughter recorded on the wiretap, Wyatt Stetler explained that when he discussed getting his money up-front, he was referring to a car loan he had made to his ex-wife. He did not recollect which tobacco shipments he had discussed with Lori in February 1999. Nor did he recall what he meant when he asked her about receiving any phone calls and when he said to her that she knew what he meant. [27] Constable Ferrara testified about the RCMP investigation and the surveillance conducted in connection with that investigation. An Ontario-licensed cube van was used to transport tobacco to Marcel Guillemette in Quebec, where the tobacco was cut into fine pieces and sold in plastic bags or hand-tied and sold. His team had traced the van’s license plates to a rental agency and discovered that the van had been rented by Ronald Coucke several times, including dates when tobacco was transported to Quebec. Mileage and time records were also consistent with a round-trip to M. Guillemette’s residence. [28] On September 13, 1998, his team had the cube van under surveillance but lost sight of it after it turned off Windham Road #9 at 10:10 p.m. The Quebec RCMP saw the 70 bales of tobacco unloaded from the van the next morning. A few days later, the Board informed the RCMP team that the farm in the area where the van was lost from sight was the Stetler farm. The team then discovered the northern entrance to the farm. [29] On September 20, 1998, the RCMP surveillance team observed the cube van driving from the rental agency to Ronald Coucke’s residence. They lost sight of the van after it left the residence, but picked it up again driving south on the farm lane from Regional Road #9 to the Stetler farm at 11:45 p.m. They observed the van leave the farm via the same route twenty-five minutes later. They did not see any tobacco being loaded. The van was followed to the Guillemette residence where 66 bales of tobacco were unloaded. There had been numerous calls between Ronald Coucke’s residence and Marcel Guillemette’s residence, between Ronald Coucke’s residence and the Stetler farm, and one call from the Stetler farm to the Guillemette residence. The police did not know who made the calls. [30] On February 4, 1999, the RCMP team observed the van leave the rental agency, enter the Stetler farm from the south via the driveway and leave the same way thirteen minutes later. The van was accompanied by a vehicle. The RCMP followed the van to M. Guillemette’s residence where 85 bales of tobacco were unloaded. Constable Ferrara was the closest officer to the Stetler farm, but from inside his car he did not see or hear tobacco being loaded. His view was hindered by darkness, buildings and trees. The Stetler farm had one light on and the house showed no sign of being occupied. [31] When the RCMP searched the farm on March 12, 1999, they seized 29,609 pounds of tobacco and found loose tobacco stored in a tall building. Constable Ferrara testified that a cube van could be driven into the building and that there was a forklift truck inside. [32] The last witness was Gary Godelie, a tobacco grower for over 29 years and Vice-Chair of the Board. His own tobacco average yield was 2,475 pounds per acre. He testified that it was possible to load a cube van with bales of tobacco in 13 minutes by hand or with a forklift. He said that although tobacco could not be loaded in the dark, lights inside a barn may not be visible from outside. He also said that a forklift would make noise. He did not believe that it was common for tobacco growers to engage in the illegal practice of shipping tobacco through the Board’s warehouse using another producer’s shipping number. That practice would not affect the market but would undermine the quota system. Illegally selling tobacco to an unlicensed buyer was a more serious offence. [33] The Tribunal gave a detailed summary of the positions taken by each side in argument. Mr. Peel, on behalf of the respondents, took the position that there was no evidence that tobacco was removed from the Stetler farm on September 13, 1998. If tobacco was removed, there was no evidence that Wyatt Stetler was involved. He suggested that the phone call to the Guillemette residence from the Stetler farm that night may have been placed by Lori Stetler, who had been discussing illegal tobacco sales. [34] Mr. Peel suggested that on September 20, 1998, the cube van that entered the Stetler farm could have used the railway path to go to another farm, and that no activity was observed on the Stetler farm that night or on February 4, 1999. He submitted that the evidence did not show on a balance of probabilities that the tobacco came from the Stetler farm with Wyatt Stetler’s knowledge. He acknowledged that Lori Stetler had tried to persuade her father to sell illegally, but Wyatt Stetler had declined to do so. Finally Mr. Peel asked the Tribunal to be compassionate with respect to penalty and to reduce the penalty imposed by the Board. [35] Mr. Bresner, for the Board, submitted that it would not make sense for the van to have accessed a nearby farm using the long route through the Stetler farm, and that the short time periods on September 20, 1998 and February 4, 1999 between when the van entered the Stetler farm and when it headed for Quebec were not long enough to go beyond the Stetler farm. He suggested that no activity was observed by police because the van could be driven right inside the barn. [36] He submitted that the wiretap evidence should be read as a whole in order to interpret it properly. This evidence showed that Wyatt Stetler sold tobacco illegally to Ronald Coucke until February 1999, when Wyatt Stetler refused to continue without being paid in advance. Mr. Bresner suggested that Wyatt Stetler was unnaturally guarded in his telephone conversation with his daughter. The balance of his submissions related to penalty and the need for general deterrence. [37] After setting out the evidence and summarizing the submissions, the Tribunal made its findings: (1) There was insufficient evidence to determine on a balance of probabilities that the tobacco shipped to Quebec on September 13, 1998 came from the Stetler farm. (2) The tobacco shipments on September 20, 1998 and February 4, 1999 came from the Stetler farm. (3) The Tribunal accepted that it was possible to load the cube van within the times between which the van was seen entering and exiting the Stetler farm on September 20th and February 4th. It was possible that the RCMP officers would not have seen the loading if the van was inside the barn. (4) The Tribunal found Dudley Stetler to be credible, but rejected as implausible his suggestion that the cube van could have been driven from the Stetler farm to another farm to pick up tobacco on September 20th and February 4th. (5) The Tribunal had no doubt that the cube van could not have gone further than the Stetler farm in the thirteen minutes that it was out of sight on February 4, 1999. (6) The Tribunal also found Constable Ferrara to be a credible witness, but resolved the discrepancy between his and Dudley Stetler’s evidence regarding the proximity of the nearest Devos farm by saying that it was possible that the Constable was not aware of the farm described by Mr. Stetler. (7) With respect to Wyatt Stetler’s credibility, the Tribunal specifically excluded any consideration of his sale of tobacco using other growers’ shipping numbers, although it noted his honesty in acknowledging these violations. (8) The Tribunal rejected as incredible Wyatt Stetler’s explanation that his comments in the wiretapped conversation regarding “up front money” referred to an unpaid car loan to his ex-wife Janet Stetler, and noted that he could not recall many other details about this conversation. (9) There was considerable debate between the parties regarding the state of the tobacco on the Stetler farm and the tobacco delivered to the Guillemette residence in Quebec. The Tribunal could not determine whether the tobacco was hand-tied in Ontario or in Quebec, but only that it was delivered in bales. Nor could the Tribunal establish whether in a wiretapped conversation, Ronald Coucke said that the tobacco was hand-tied in Ontario. Therefore, the Tribunal did not use the state of the tobacco as a determinative consideration in its decision. (10) On balance, the wiretap evidence supported the finding that tobacco was shipped from the Stetler farm to Quebec on September 20, 1998 and February 4, 1999. (11) The Tribunal found that it was clear that Wyatt Stetler knew what was going on, even if he did not participate in loading the tobacco. First, the wiretap evidence suggested that Wyatt Stetler was aware that tobacco was being shipped from his farm to M. Guillemette. Second, the Tribunal did not believe that it was likely that over 85 bales of tobacco could be removed from the Stetler farm without Wyatt Stetler becoming aware that it was missing. (12) The Tribunal confirmed the penalty imposed by the Board on the basis that Wyatt Stetler chose to undertake illegal sales of tobacco and should have been aware of the consequences as he had been active in the tobacco industry for many years. (3) The Divisional Court [38] The respondents sought judicial review of the decision of the Tribunal. They raised five issues: (1) the standard of review; (2) the procedure adopted by the Tribunal; (3) errors of law by both the Board and the Tribunal with respect to the admission of evidence and the burden of proof; (4) reasonable apprehension of bias; and (5) the penalty. [39] The Divisional Court concluded that the applicable standard of review was the correctness standard. It noted that the Tribunal’s decisions are by statute final and therefore protected by a privative clause, suggesting a deferential standard of review. However, the Divisional Court justified its finding that the applicable standard is correctness, on the basis that the issues were legal issues involving the admission of evidence and the burden of proof in the context of quasi-criminal charges with penal consequences, which did not engage the specialized expertise of the decision-makers. [40] The Divisional Court rejected the procedural claim, noting that the Tribunal held a trial de novo, which was a procedure it was entitled to use: Ministry of Agriculture, Food and Rural Affairs Act, s. 16(11). [41] The Divisional Court found, however, that the Tribunal committed errors of law. First, by finding only that Wyatt Stetler was aware that tobacco was being shipped from his farm to Quebec, the Tribunal failed to answer the question before it: whether Wyatt Stetler participated in the illegal sale of tobacco. Second, since the Divisional Court viewed the case as quasi-criminal in nature, involving a person’s livelihood and the potential penalty of licence revocation, it found that the standard of proof required was not proof on a balance of probabilities, but clear and convincing proof based on cogent evidence. Third, the Divisional Court then found that the evidence before the Tribunal was not sufficient to entitle the Tribunal to make its findings. [42] On the fourth issue, the Divisional Court found that the Tribunal permitted itself to be tainted by “a clear apprehension of bias” by accepting and relying on the evidence of Gary Godelie, a Vice-Chair of the Board who had participated in the original Board decision. He gave evidence that supported the Board’s decision regarding the time it would take to load a van with tobacco. The Divisional Court rejected the argument that the respondents were precluded from raising the bias issue for the first time before it because they did not object when the evidence was led before the Tribunal. [43] The Divisional Court concluded that the errors of law made by the Tribunal, including the bias issue, were sufficient for it to quash the decisions of both the Tribunal and the Board. The Divisional Court declined to refer the case back to the Tribunal because of its conclusion regarding the insufficiency of the evidence. The Issues [44] The appellant identified three issues for appeal, although there are several sub-issues within the first one: (1) the standard of review; (2) bias and waiver; and (3) the remedy of quashing the Tribunal decision and not sending the matter back for a new hearing. (1) Standard of Review [45] The method for determining the appropriate standard of review to be applied by a court on judicial review (or on an appeal) of an administrative decision was explained recently by the Supreme Court of Canada in Dr. Q. v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226, a discipline case similar to this case. See also Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982; Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services), [2004] 3 S.C.R. 152; Re Cartaway Resources Corp., [2004] 1 S.C.R. 672; Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers, [2004] 2 S.C.R. 427 at para. 48. In the Dr. Q. case, the Supreme Court stated that a pragmatic and functional approach is required in order to determine the legislative intent of the statute that creates the administrative tribunal. The three standards reflect different degrees of relative deference to the tribunal: (1) correctness, an “exacting review”; (2) reasonableness, a “significant searching or testing”; and (3) patent unreasonableness, where the issue is “left to the near exclusive determination of the decision-maker” (Dr. Q. at para. 22). [46] The pragmatic and functional approach to determining the degree of deference to be accorded to the administrative decision-maker in the circumstances involves a consideration of four contextual factors: (a) the presence or absence of a privative clause or statutory right of appeal; (b) the expertise of the tribunal relative to a court on the issue in question; (c) the purposes of the legislation and the provision in question; and (d) the nature of the question as one of fact, of law, or of mixed fact and law (Dr. Q. at para. 26). [47] The Supreme Court described the application of each factor. First, the existence of a privative clause militates in favour of deference, and the stronger the privative clause, generally, the more deference is due. [48] In order to properly address the second factor, the reviewing court is to characterize the expertise of the tribunal in question, consider the court’s own expertise relative to that of the tribunal, and identify the nature of the specific issue before the tribunal relative to its expertise: Pushpanathan at para. 33. As the Supreme Court pointed out in Dr. Q., relative expertise can derive from a number of sources and from experience. Importantly, expertise can relate not only to factual and policy issues, but to issues of pure law and of mixed fact and law. Again, more deference is called for where the question at issue is within the tribunal’s relative expertise. [49] For the third factor, the reviewing court is to consider the general purpose of the statutory scheme within which the tribunal’s decision is being made. A reviewing court is expected to accord increased deference where the legislation is intended to balance and resolve competing policy objectives. In contrast, where the issue is the factual resolution of a dispute between two parties, less deference is required (Dr. Q. at paras. 30- 32). [50] Finally, the Supreme Court noted that while the nature of the problem is only one of the four contextual factors to be assessed to determine the appropriate standard of review of administrative decisions, in the case of an appeal of a court decision, whether the question is one of fact, law, or mixed fact and law is essentially the only factor: see for example, Housen v. Nikolaisen, [2002] 2 S.C.R. 235 and H. L. v. Canada (Attorney General), [2005] S.C.J. No. 24. In administrative review, a factual decision or a mixed decision with a strong factual component will attract more deference, while a legal decision or a law-intensive mixed question will attract less deference. [51] In Dr. Q., an Inquiry Committee of the College of Physicians and Surgeons found the doctor guilty of professional misconduct with a patient, and suspended him from practice. The Medical Practitioners Act, R.S.B.C. 1996, c. 285, provided for an appeal to the Supreme Court of British Columbia “on the merits” of the case. The reviewing judge reassessed the evidence of guilt to determine whether it was sufficient to meet the standard of clear and cogent evidence. She disagreed with the Committee’s findings of credibility and concluded that the evidence was not sufficiently cogent to allow the court to safely uphold the Committee’s findings. On appeal to the British Columbia Court of Appeal, the court concluded that the reviewing judge’s decision was not clearly wrong and dismissed the appeal. [52] The Supreme Court of Canada applied the four factors discussed above to determine the standard of review of the Committee’s decision. The Supreme Court concluded that the proper standard was reasonableness. In that case, there was a broad right of appeal (the opposite of a privative clause) and the Committee was no more expert than a court on the issue. Therefore, the first two factors suggested low deference. The third factor, the purpose of the statute and the particular provision, was not determinative. One purpose was to protect the public and set ethical standards of conduct, suggesting more deference, but a second was to adjudicate fairly individual cases of alleged misconduct, suggesting less deference. However, because the nature of the question was factual, involving findings of credibility, the court should have accorded a high degree of deference to the Committee who saw and heard the witnesses. The court balanced these factors and concluded that the reviewing court should have asked “whether the Committee’s assessment of credibility and application of the standard of proof to the evidence was unreasonable, in the sense of not being supported by any reasons that can bear somewhat probing examination” (at para. 39). Instead, the reviewing judge had used a correctness standard and had substituted her view of the evidence for the Committee’s view. [53] Finally, the Supreme Court clarified the role of the court of appeal, which is to determine the proper standard of review. It is an error of law for the reviewing court to apply an incorrect standard of review. The court of appeal is to set aside the decision of the reviewing court and apply the correct standard of review to the administrative decision. The Supreme Court concluded in the Dr. Q. case, applying the reasonableness standard of review, that there was ample evidence to support the Committee’s decision, which it reinstated. [54] In this case, the Divisional Court conducted an abbreviated standard of review analysis, using only some of the contextual factors. In my view, the Divisional Court committed the error of law identified by the Supreme Court in Dr. Q. – it failed to conduct the pragmatic and functional analysis addressing all four contextual factors, and therefore failed to conduct the necessary balancing of those factors. Furthermore, it erred in its characterization of the decision as involving penal consequences, which error significantly influenced its decision on the standard of review. [55] More fundamentally, however, the Divisional Court’s analysis failed to properly identify the issue that was decided by the Tribunal and was the subject of the judicial review – the conclusion that the respondent sold tobacco in contravention of the regulations and became subject to a penalty. Instead, the Divisional Court focused on certain legal and procedural issues that may arise during any hearing where evidence is led and where a determination must be made that involves findings of fact and the application of the law to those facts. The Divisional Court treated these problems as the issues under review. Looked at in that way, any administrative hearing and decision would be reviewable on the correctness standard. [56] Because of these errors, this court must determine the appropriate standard of review, and apply that standard to the decision of the Tribunal. The Legislative Framework [57] Under the Farm Products Marketing Act, the Ontario Farm Products Marketing Commission is empowered to carry out the purpose of the Act, which is to “provide for the control and regulation in any or all aspects of the producing and marketing within Ontario of farm products including the prohibition of such producing or marketing in whole or in part” (s. 2). For tobacco, that power has been delegated by the Commission to the Board by regulation (R.R.O. 1990, reg. 435). This delegation includes all power over the allocation and revocation of tobacco production quotas. By General Regulations, promulgated on a year-to-year basis, the Board regulates the production and marketing of tobacco through licenses to produce and buy tobacco and by the allocation of marketing and production quotas. Section 9 of the General Regulations prohibits the sale or transfer of tobacco other than at a tobacco exchange operated by the Board. By s. 21, the local board may cancel, reduce or refuse to increase the quota of a person who has circumvented the General Regulations or for any other reason. The Ministry of Agriculture, Food and Rural Affairs Act, s. 16(2), provides for an appeal to the Agricultural, Food and Rural Affairs Appeal Tribunal from a decision of a local board made under the Farm Products Marketing Act. The SPPA applies to the hearing of an appeal by the Tribunal (s. 16(10)). By s. 16(11), on an appeal the Tribunal may, as the Tribunal considers proper, order the Board to take any action it is authorized to take under the Farm Products Marketing Act. The Tribunal may substitute its opinion for that of the Board. The Act goes on to provide for a possible reconsideration by the Tribunal as well as a further power in the Minister to vary the Tribunal’s decision (ss. 17 and 18). [58] The members of the Board must be tobacco producers (Farm Products Marketing Act, R.R.O. 1990 Reg. 436, amended to O. Reg 60/02). The members of the Tribunal are appointed by the Lieutenant Governor in Council and one of them must be a barrister and solicitor (Ministry of Agriculture, Food and Rural Affairs Act, s. 14(1.1)). The members of the Board have expertise in all aspects of the production and marketing of tobacco, while the members of the Tribunal sit on appeals from numerous local agricultural boards dealing with different agricultural products and marketing schemes. Application of the Four-Factor Test from Dr. Q. [59] Although the Divisional Court purported to quash the decision of the Board as well as the decision of the Tribunal, the court was conducting a judicial review of the decision of the Tribunal, not of the Board. Similarly, this court is dealing with an appeal of the Divisional Court decision and therefore is concerned with judicial review of the Tribunal, which held a de novo hearing. [60] The first factor to be considered in determining the standard of review is the privative clause identified by the Divisional Court. The respondents argue that a clause that makes the decision of an administrative tribunal a “final” decision is a weak privative clause, because it does not use language that prohibits judicial review: Sara Blake, Administrative Law in Canada, 3d ed. (Markham: Butterworths, 2001) at 190. In Pushpanathan, the Supreme Court characterized such a clause as signalling deference, but subject to the other three factors (at paras. 30-31). [61] The second factor is the relative expertise of the Tribunal as compared with that of the reviewing court, in respect of the issue to be determined by the Tribunal. In this case the issue before the Board and then on appeal before the Tribunal was whether the respondents had engaged in the unlawful sale of tobacco outside the auspices of the Board and the quota system, and if so, whether their quota should be cancelled or reduced. [62] The allegations against the respondents in this case involve surreptitiously transporting tobacco from Ontario to Quebec outside the quota system. This activity, if proven, is an “offence” because it contravenes the legislation I have just outlined. But, in the context of the hearing before the Tribunal, it is a regulatory, not a criminal offence. The jurisdiction of the Board is to investigate such activity and to hold a hearing. If the Board finds that the activity has occurred, it can impose penalties that involve limiting the person’s ability to grow or market tobacco. Contrary to the statement by the Divisional Court, there are no possible penal consequences, nor is there any finding of criminality or quasi-criminality made by the Board. [63] As the Supreme Court stated in Martineau v. Canada (Minister of National Revenue), [2004] 3 S.C.R. 737, “proceedings of an administrative -- private, internal or disciplinary -- nature instituted for the protection of the public in accordance with the policy of a statute are not penal in nature” (at para. 24). The court held that although a disciplinary proceeding may be aimed at deterring potential offenders, this feature does not make it penal or quasi-criminal (at para. 38). The reasoning of Fish J. is apposite: This process thus has little in common with penal proceedings. No one is charged …. No information is laid against anyone. No one is arrested. No one is summoned to appear before a court of criminal jurisdiction. No criminal record will result from the proceedings (at para. 45). [64] In conducting the hearing, the Tribunal necessarily had to determine the admissibility and the weight to be accorded to the evidence and had to determine and apply the correct burden of proof. These are necessarily functions of all hearings of a disciplinary nature. The power to make determinations regarding the admission and use of evidence in an administrative context is given by the SPPA (ss. 15, 15.1, 15.2, 16). The Tribunal was also concerned with making findings of credibility and of fact and with drawing inferences from the evidence. Again, these are common issues in hearings of a disciplinary nature. [65] The governing legislation ensures that the Tribunal has some expertise in legal matters by requiring that one of the members must be a lawyer. Given the nature of the issues before the Tribunal, which are equally familiar to a court and to the Tribunal, as was the case in Dr. Q., the factor of relative expertise in assessing the standard of review is a neutral one. [66] The third factor relevant to the determination of the standard of review is the purpose of the legislation and the provision in question. The purpose of the legislative scheme I have briefly described is to ensure that tobacco is grown and marketed under an orderly system that regulates the quantity and price of tobacco produced, providing a fair scheme for all those involved in the industry. The purpose of the specific provision that allows the Board, and on appeal, the Tribunal, to cancel or reduce the quotas of those who violate the scheme is to enforce compliance for the benefit of all. It is intended that the Board and the Tribunal, who are familiar with the marketing schemes, their purpose, their effect and their rules, are to employ that understanding in the enforcement of the regulations. The Tribunal is less specialized than the Board, and to that extent, its particular expertise in tobacco is much more limited. In any event, because these types of administrative decisions are not policy decisions, but are adjudicative in nature, as in the Dr. Q. case, this factor does not weigh strongly in favour of a deferential standard of review. [67] The final factor is the nature of the issues to be determined. In deciding any case where witnesses are called, there are issues of fact, including findings of credibility and inferences to be drawn from the evidence. There are also procedural and legal issues including notice, the opportunity to be heard, the admission of evidence, the burden of proof and the duty to give reasons, to name a few. In this case, the Tribunal made findings of fact, including significant findings of credibility. It was also required to draw inferences from the evidence, including the wiretap evidence. The Tribunal admitted evidence, decided what use to make of it and determined and applied the burden of proof. [68] Where a tribunal is making factual decisions based on the evidence presented before it, a significant degree of deference is accorded to those decisions. Similarly, where a tribunal governed by the SPPA conducts its hearing within the procedural discretion afforded by that statute, a court will accord substantial deference to its discretionary procedural and legal decisions, provided there has been no denial of natural justice in the procedure chosen: Moreau-Bérubé v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249 at paras. 74-75; London (City) v. Ayerswood Development Corp. (2002), 167 O.A.C. 120 at para 10. However, questions of law of general application that do not engage the specialized expertise or the discretion of the tribunal are reviewable for correctness: Toronto (City) Board of Education v. O.S.S.T.F., District 15, [1997] 1 S.C.R. 487 at para. 39; Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, [2003] 3 S.C.R. 77 at paras. 14-15; London (City) at para. 7. [69] In this case, the respondents’ position is that the Tribunal made errors on legal issues before it (1) by failing to employ the standard of “clear, cogent and convincing evidence”; and (2) by using the hearsay wiretap conversations where Wyatt Stetler was not a party, without applying the R. v. Carter, [1982] 1 S.C.R. 938, analysis for the admission of hearsay by co-conspirators. The respondents also argue that the Tribunal made an error of law or denied them natural justice by admitting the evidence of Gary Godelie, thereby creating an apprehension of bias in the Tribunal. [70] On the standard of proof and bias issues, the Tribunal had to be correct regardless of the standard of review to be applied to the decision of the Tribunal. In contrast, the hearsay issue is a question of law within the context of the procedure of the Tribunal and includes a discretionary element. In that context, it is subject to the overall standard of review of the Tribunal decision. The Correct Standard of Review in this Case [71] Balancing all of the four factors, I conclude that, as in Dr. Q., the Tribunal’s decision on the issue before it, which was whether the respondents engaged in the unlawful sale of tobacco outside the auspices of the Board and the quota system, should have been reviewed by the Divisional Court on a standard of reasonableness. The court was therefore required to ask whether the conclusion reached by the Tribunal was unreasonable considering the record before it and applying the proper standard of proof. That said, on pure questions of law that do not involve the discretion or expertise of the Tribunal, the Tribunal had to be correct. Treatment of Hearsay Wiretap Evidence [72] Before considering whether the Tribunal’s decision on the issue before it was unreasonable, I must first address the specific concerns raised by the respondents that they characterize as legal issues. The first is the treatment of the hearsay evidence contained in the transcripts of wiretapped conversations that did not involve Wyatt Stetler, but which referenced him. The respondents argue that because the Tribunal concluded that Wyatt Stetler did not participate in loading the tobacco himself, he could only have been found guilty as a co-conspirator and, on that basis, the Tribunal could only admit the hearsay evidence after applying the Carter test for the admission of hearsay evidence of a co-conspirator against an accused person. [73] I reject this argument for several reasons. First, the rule in Carter is a test applied to certain hearsay evidence that allows the evidence to be used to prove beyond a reasonable doubt that a person was a member of a conspiracy. In an administrative proceeding such as the one at issue in this case, the standard of proof beyond a reasonable doubt is not applicable. [74] Second, under the SPPA, an administrative tribunal is entitled to admit and rely on hearsay evidence. The Tribunal did not exercise that discretion unreasonably in admitting the evidence. Third, and of great significance in this case, the agreement that was made by counsel in exchange for the stay of the Excise Act charges was that all the RCMP evidence in the Crown brief would be submitted in the regulatory proceeding, subject to the right of counsel to address the proper interpretation of the evidence and the conclusions to be drawn from it. The respondents cannot now complain about the admission or the use of that evidence by the Tribunal. In any event, I am satisfied that there was sufficient non-hearsay evidence admissible against Wyatt Stetler (such as his own recorded conversation with Lori Stetler and the evidence of the removal of a substantial amount of tobacco from his farm), to prove that he was probably a member of the conspiracy in accordance with the Carter test, had the Tribunal applied it. The Standard of Proof [75] The second legal error alleged by the respondents is that the Tribunal failed to employ the correct standard of proof which, they submit, is proof by “clear, cogent and convincing evidence”. [76] The respondents assert that this “higher degree of proof” is required in all cases where a person’s professional standing or livelihood is at risk. They rely on a list of Ontario cases to illustrate that this standard has consistently been held to apply to disciplinary hearings involving professionals, including doctors, accountants, architects, chiropractors, nurses, ophthalmologic dispensers, pharmacists and physiologists, as well as to certain non-professionals, namely, motor vehicle dealers and stock brokers: Re Bernstein and College of Physicians and Surgeons of Ontario (1977), 76 D.L.R. (3d) 38 (Ont. C.A.); Persaud v. Society of Management Accountants of Ontario (1997), 144 D.L.R. (4th) 375 at 382 (Div. Ct.); Guthrie v. Ontario Assn. of Architects (1988), 29 O.A.C. 146 at para. 4 (Div. Ct.); College of Chiropractors of Ontario v. Kovacs (2004), 191 O.A.C. 88 at paras. 16 and 198 (Div. Ct.); Carruthers v. College of Nurses of Ontario (1996), 31 O.R. (3d) 377 at 401 (C.A.); Markandey v. Ontario (Board of Opthalmic Dispensers), [1994] O.J. No. 2913 (Gen. Div.); Abji v. Ontario College of Pharmacists, [2001] O.J. No. 4546 (Div. Ct.); Brett v. Board of Directors of Physiotherapy (1991), 48 O.A.C. 24 at 33 (Div. Ct.); Coates v. Registrar of Motor Vehicle Dealers and Salesmen (1988), 65 O.R. (2d) 526 at 535-537; Robinson v. Ontario (Securities Commission), [2000] O.J. No. 648. See also: Robert W. Macaulay & James L.H. Sprague, Practice and Procedure Before Administrative Tribunals, Vol. 2 looseleaf (Toronto: Carswell, 1988) at 17-8; Brown & Evans, Judicial Review of Administrative Action in Canada, vol. 3 looseleaf (Toronto: Canvasback Publishing, 1998) at 12:3200. [77] The Attorney General for Ontario was granted intervenor status to address four issues on the appeal, including the standard of proof. The Intervenor takes the position that the standard of proof for this Tribunal should be on a balance of probabilities with no higher degree of proof required. Its submission is based on three grounds: (1) that a tobacco producer’s livelihood is not affected because the person can still grow other crops; (2) a tobacco producer does not have the same years of education, skill and training invested as a professional; and (3) as tobacco is a highly regulated industry, to require the “higher standard of proof” asserted by the respondents could lead to abuses in the regulatory scheme and unfairness to other producers operating within it. [78] The Intervenor relies on the British Columbia Court of Appeal decision in British Columbia (Superintendent of Brokers) v. Rak (1990), 74 D.L.R. (4th) 725, involving a disciplinary hearing by the Securities Commission of a director and officer of several companies who was found to have breached the Securities Act, S.B.C. 1985, c. 83. In that case, the court declined to require a higher degree of proof. The court said that trading in securities is not a profession, and that the paramount consideration for the Commission is the protection of the public. However, interestingly, the Commission itself, in its reasons, recognized that the case was a serious one requiring a high degree of proof. The court agreed that the serious consequences for the person in question should be taken into account by the Commission in appropriate cases. [79] In my view, the respondents’ argument is misconceived. There are only two standards of proof used in legal proceedings. In civil and administrative matters, absent an express statutory provision to the contrary, the standard of proof is on a balance of probabilities, while in criminal matters it is proof beyond a reasonable doubt. The well-established standard articulated in Bernstein and numerous subsequent cases is an evidential standard that speaks to the quality of evidence required to prove allegations of misconduct or incompetence against a professional. Thus, within the administrative context, it is accepted 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. See for example, Brown & Evans, Judicial Review of Administrative Action in Canada, vol. 3 at 12:3200; Blake, Administrative Law in Canada at 66-67. [80] I do not share the concern of the Intervenor that requiring clear, cogent and convincing evidence in cases such as this will have any negative effect on the regulatory scheme governing the tobacco industry in Ontario. The case law in Ontario has been consistent in requiring this high evidential standard in disciplinary cases, whether of professionals or of others where their established means of livelihood may be at risk. [81] In its reasons, the Tribunal referred to the standard of proof as “on the balance of probabilities.” It made no error in so doing, as that is the correct standard in administrative proceedings, absent clear statutory language to the contrary in the constating statute of the Tribunal in question. This was also the standard urged by respondents’ counsel at the Board and Tribunal. Furthermore, I agree with the appellant that in this case, although the Tribunal did not articulate a requirement for clear, cogent and convincing evidence, its analysis of the evidence demonstrated that it was only prepared to make findings against the respondents if it was satisfied that the evidence justified the findings to that degree. Therefore, the Tribunal made no error, because it applied this exacting evidential standard before finding that the respondents had sold tobacco in contravention of the regulations. [82] For example, in the face of a finding by the Board on this issue, although there was some evidence from which an inference could be drawn that on September 13, 1998, the van picked up tobacco at the Stetler farm, the Tribunal found the evidence insufficient on a balance of probabilities, even though it was satisfied of Wyatt Stetler’s involvement on the other occasions. [83] In contrast, the Tribunal was satisfied, and so found, that the shipments were made from the Stetler farm on September 20, 1998 and on February 4, 1999. Although the RCMP surveillance lost sight of the cube van for 25 minutes and 13 minutes respectively on those dates, the Tribunal considered it implausible that the van was driven to another farm and back on September 20th, and impossible on February 4th. The Tribunal heard evidence regarding the proximity of other farms and the nature of the railway path access between farms, the evidence that no nearby farms were the subject of the RCMP investigation into the entire operation, the timing of the appearances of the van, and the fact that the van fit inside the Stetler farm building and would not be noticeable when tobacco was loaded in that location. [84] The Tribunal scrutinized the wiretap evidence to decide what facts could be found based on it and what inferences could be drawn from it. The Tribunal could not determine on the evidence whether the tobacco shipped to Quebec was hand-tied. Taking that issue out of consideration, it was satisfied that, on balance, the wiretap evidence supported the finding that the tobacco came from the Stetler farm on September 20th and February 4th. I understand the Tribunal to be saying that there was nothing in the wiretap evidence that contradicted that finding made on other evidence. [85] On the critical issue of Wyatt Stetler’s knowledge and acquiescence in allowing his tobacco to be picked up and shipped to Quebec and receiving payment, the Tribunal had to assess his credibility and the strength of the evidence against him. First, in contrast to the approach taken by the Board, the Tribunal declined to base its credibility decision on Wyatt Stetler’s other activity in contravention of the Board regulations, namely, selling tobacco using other growers’ shipping numbers, which the Board had found displayed a cavalier attitude regarding the Board and the regulations. Instead, the Tribunal noted its appreciation of Wyatt Stetler’s honesty in admitting this activity. [86] The Tribunal based its credibility findings on Wyatt Stetler’s own testimony. It found his explanation for his wiretapped reference to a requirement for “up front money” to be incredible. The Tribunal also noted his inability to recall other details relating to that conversation. The Tribunal concluded that the wiretap evidence suggested that Wyatt Stetler was aware that tobacco was being shipped from his farm to Quebec. Turning to the other evidence, the Tribunal concluded that it was not likely, again rejecting Wyatt Stetler’s evidence, that 85 bales of tobacco could be removed from his farm without Wyatt Stetler realizing that it was missing. The Tribunal concluded, based on all the evidence, that Wyatt Stetler knew what was going on even if he did not load the tobacco himself. [87] The respondents argue in their factum that the evidence against Wyatt Stetler was weak because it was entirely circumstantial. This is a misstatement on two fronts. First, circumstantial evidence can be very strong evidence. In this case, the movements of the van onto the Stetler farm and the timing on the two days in question is strong circumstantial evidence. Second, there was also direct evidence in the form of the wiretapped conversations, including Wyatt Stetler’s own conversation with his daughter Lori on February 27, 1999 and the follow-up conversation on March 1st between Ronald Coucke and Lori Stetler, referred to in paragraph 25 above. [88] In my view, the Tribunal understood the seriousness of the allegations against the respondents and was careful to scrutinize the evidence and only make findings that were supported by clear, cogent and convincing evidence that it accepted. The Bernstein evidential standard, therefore, was met. Reasonable Apprehension of Bias and Waiver [89] The third legal error raised by the respondents is that the Tribunal “allowed itself to be tainted by a reasonable apprehension of bias” by allowing the Board to call Gary Godelie as a witness. Mr. Godelie was Vice-Chair of the Board and participated in the decision that was appealed to the Tribunal. As part of this error, the respondents say that Mr. Godelie's evidence was in the nature of expert evidence and was admitted without compliance with the Tribunal’s own Rules of Procedure. [90] The Divisional Court agreed with the respondents and also held that the respondents’ failure to object to this evidence in a timely manner was not fatal. The appellant says that the Divisional Court erred in finding a reasonable apprehension of bias and, in any event, by failing to raise the issue before the Tribunal, the respondents waived any objection on this ground. The Intervenor takes the position that there is no apprehension of bias where an appeal Tribunal conducting a trial de novo receives evidence from an adjudicator on the Board below that is within the person’s knowledge or expertise. [91] The issue of reasonable apprehension of bias most often arises in the context of the need for a member of an adjudicative body to disqualify himself or herself because of some connection with the case that would raise the apprehension. The accepted test was articulated by the Supreme Court of Canada in Committee for Justice and Liberty v. National Energy Board, [1978] 1 S.C.R. 369 at 394 and recently restated in Wewaykum Indian Band v. Canada, [2003] 2 S.C.R. 259 at para. 60: [T]he apprehension of bias must be a reasonable one held by reasonable and right minded persons, applying themselves to the question and obtaining thereon the required information. In the words of the Court of Appeal, that test is “what would an informed person, viewing the matter realistically and practically – and having thought the matter through- conclude. Would [that person] think that it is more likely than not that [the decision-maker], whether consciously or unconsciously, would not decide fairly.” [92] Although not identical, the issues raised by a tribunal appearing as a party on a judicial review application are somewhat analogous to those raised here by a member of the Board appearing as a witness before the Tribunal. This court recently considered whether according an administrative tribunal standing before an appellate court reviewing the tribunal’s decision creates a reasonable apprehension of bias in the tribunal. Children’s Lawyer for Ontario v. Goodis, [2005] O.J. No. 1426 at para. 43 (C.A.). One concern is that the tribunal’s participation may raise a reasonable apprehension that it will be biased in relation to the specific parties or similar issues in the future: Northwestern Utilities Ltd. v. Edmonton (City), [1979] 1 S.C.R. 684 at 709. In the face of an unclear statute, whether to grant standing is a matter of discretion that requires the court to balance the importance of fully informed adjudication and the importance of maintaining the board or tribunal’s impartiality: Goodis at para. 43. In this case, however, the respondents allege that a Board member’s testimony created a reasonable apprehension of bias in the Tribunal hearing the matter de novo, not in the Board that made the original decision. [93] On the record before us, it is not entirely clear how an apprehension of bias arises in the Tribunal because it heard evidence from a member of the Board. Perhaps the suggestion is that because the witness was a member of the Board that decided the original case, that that person’s position would cause the appeal Tribunal to give greater weight to his evidence than to that of other witnesses. In some instances, as where the procedure calls into question hearing fairness or the appearance of impartiality, this submission could well have considerable force. But here there is no suggestion in the record that there was any relationship between Mr. Godelie and the members of the Tribunal. There is also nothing in the record to indicate whether the procedure followed in calling Mr. Godelie is either common or uncommon before this Tribunal. [94] The record does establish, however, that Mr. Godelie was not called as a witness in his capacity as a Board member but, rather, to give evidence within the domain of his extensive, and unchallenged, experience as a tobacco grower. [95] The respondents also suggest that the witness had a conflict of interest in the circumstances, or at least the appearance of a conflict. However, in the context of an analysis of reasonable apprehension of bias in the Tribunal, that fact would have been clear to the Tribunal when assessing his evidence. [96] In Wewaykum, the Supreme Court thoroughly reviewed the law of reasonable apprehension of bias. One of the important principles that the court identified is that every inquiry on this issue is “highly fact-specific.” The court quoted with approval the statement of Lord Steyn in Man O’War Station Ltd. v. Auckland City Council (Judgment No. 1), [2002] 3 N.Z.L.R. 577, [2002] UKPC 28 at para. 11: “This is a corner of the law in which the context, and the particular circumstances, are of supreme importance.” As I have noted, we have very little information about the context and the particular circumstances in this case. Certainly, had an objection been made to the Tribunal when the witness was called, the context and any relevant facts could have been identified and considered before the Tribunal decided whether to allow him to testify. However, experienced counsel on behalf of the respondents made no objection to this witness before the Tribunal. [97] Given the unusual context of the allegation of reasonable apprehension of bias, the lack of a fact-specific context that suggests such an apprehension, and the law that requires a fact-specific analysis, I cannot agree with the Divisional Court that a reasonable apprehension of bias in the Tribunal was made out in this case. On the record before us, neither the Divisional Court nor this court is in a position to determine that there was a reasonable apprehension of bias in the Tribunal by hearing the evidence of Mr. Godelie. [98] Moreover, and importantly, in the circumstances of this case, any objection was waived by the respondents when they did not raise any issue regarding this witness before the Tribunal: Canada (Human Rights Commission) v. Taylor, [1990] 3 S.C.R. 892 at para. 174, citing with approval In Re Human Rights Tribunal and Atomic Energy Canada Ltd. (1986), 24 D.L.R. (4th) 675 at 682-83 (F.C.A.). The same can be said about any alleged non-compliance with the procedural rules of the Tribunal in admitting this witness’ evidence without notice. I agree with the appellant that had a timely objection been raised, the Board could have sought an adjournment to find a different witness, declined to call the evidence, or persisted with its position and obtained a ruling by the Tribunal which would have been subject to judicial review. By failing to make a timely objection so that the issue arose for the first time on judicial review, the respondents created a potential ground for review to be raised only if the Tribunal decision was unfavourable. [99] The principle of implied waiver is described in Halsbury’s Laws of England 4thed., vol. 1 at para. 71, p. 87, quoted with approval by the Federal Court of Appeal in Zundel v. Canada (Canadian Human Rights Commission)(re Canadian Jewish Congress), [2000] F.C.J. No. 1838 at para. 4: The right to impugn proceedings tainted by the participation of an adjudicator disqualified by interest or likelihood of bias may be lost by express or implied waiver of the right to object. There is no waiver or acquiescence unless the party entitled to object to an adjudicator’s participation was made fully aware of the nature of the disqualification and had an adequate opportunity of objecting. Once these conditions are present, a party will be deemed to have acquiesced in the participation of a disqualified adjudicator unless he has objected at the earliest practicable opportunity. [100] In this case, all parties and their counsel were fully aware that Mr. Godelie had been a member of the Board that heard the case originally, and no objection was made. In addition, on the issue of alleged prejudice from the failure to comply with the Tribunal’s rules for expert evidence, it does not appear that the respondents sought an adjournment to permit them to prepare or to respond to Mr. Godelie’s evidence. In my view, in those circumstances, the respondents failed to demonstrate any prejudice and the doctrine of implied waiver and deemed acquiescence applies. Applying the Reasonableness Standard of Review [101] In my view, the Tribunal’s factual findings, including its decisions on credibility and its application of the standard of proof to the evidence, were not unreasonable. I have outlined above the evidence that the Tribunal expressly addressed in coming to the following conclusions: (1) the shipments on September 20, 1998 and on February 4, 1999 came from the Stetler farm; and (2) Wyatt Stetler was aware of what was going on and participated by allowing tobacco grown by him, which was required to be sold through the Board, to be transported instead to Quebec surreptitiously by van, outside the Board’s tobacco marketing quota system. The Tribunal acknowledged that Wyatt Stetler may not have physically participated in loading the tobacco, but that was not necessary for its finding. The Tribunal was entitled to draw inferences from the evidence, including the wiretap evidence. The respondents had a full opportunity to rebut that evidence and call any witnesses they wished. Conclusion on Liability [102] In my view, the Divisional Court erred by failing to properly determine the appropriate standard of review to apply to the decision of the Tribunal, and by applying the standard of correctness rather than reasonableness. That said, to the extent that the Divisional Court dealt with errors of law, the Tribunal was required to be correct. However, in my view, for the reasons I have given, the Tribunal did not err in respect of those matters. Also, the admission of the wiretap hearsay evidence was a question of law but one on which the Tribunal had a discretion which it did not exercise unreasonably in the circumstances in admitting and relying on the wiretapped conversations. I would allow the appeal on the liability issue and set aside the decision of the Divisional Court quashing the decision of the Tribunal on liability. It is therefore unnecessary to address the decision of the Divisional Court not to remit the case back to the Tribunal for a further hearing. Penalty [103] In both their written and oral submissions, the respondents sought to set aside the penalty imposed by the Tribunal. Although there is no Notice of Cross-Appeal, this relief is subsumed in the original request for judicial review, and no objection was taken to these submissions. [104] The penalty originally imposed by the Board was the cancellation of 100% of both respondents’ basic production quota, a total of 232,604 pounds, although the Board allowed the respondents to sell the tobacco they had already grown. The Board compared the respondents’ circumstances with those of others who were convicted of the same offence and involved in the same scheme. [105] In the DeVos case, Mr. DeVos admitted engaging in the illegal sale of 48,960 pounds of tobacco, but he sincerely apologized to the Board and co-operated with the RCMP investigation. The Board was completely satisfied that he would not transgress again. Although it is not stated in the Board’s decision, its cancellation of 220,838 pounds of basic production quota represented only 25 per cent of Mr. DeVos’ quota. He also paid a $10,000 fine. The Bodnars admitted the unlawful sale of 4000 pounds of tobacco and had 49,260 pounds of basic quota cancelled, representing 100 per cent of their quota. In the Duval case, Mr. Duval admitted the unlawful sale of 6500 pounds of tobacco. His entire quota of 30,000 pounds was cancelled and he was ordered to destroy the tobacco he had. [106] The Board found that Wyatt Stetler unlawfully sold tobacco on at least three occasions, two in September, 1998 and one in February, 1999. The Board commented on the fact that he did not apologize and was defiant and argumentative. It concluded that it had no reason to believe he would adhere to the Board’s regulations in the future, and noted the absence of any mitigating factors. The Board also made a specific finding regarding the illegal sales of tobacco to his neighbours, which were admitted, and drew the inference that these transactions displayed a cavalier attitude on his part. [107] The Tribunal dealt with penalty in one paragraph in its reasons. It found that Wyatt Stetler was an experienced tobacco grower in a highly regulated industry who knew his obligations and knew that the penalty would be severe for breaking the rules. The Tribunal concluded that the penalty imposed by the Board was appropriate. The Tribunal was not inclined to vary that penalty. [108] The issue of the appropriate penalty for infractions within a profession or industry is one that is uniquely within the experience, expertise and discretion of the relevant disciplinary tribunal and is therefore subject to a high degree of deference. The penalty imposed by the Tribunal, nevertheless, is subject to a reasonableness standard on review. The Tribunal’s reasons, taken as a whole, must stand up to a somewhat probing examination. Given that a person’s livelihood is at stake, however, the extremely serious consequences of the penalty require the court to inquire whether the Tribunal “properly considered all relevant factors in determining the appropriate penalty”: Ontario Provincial Police v. A.L. Favretto (2004), 72 O.R. (3d) 681 (C.A.) at para. 50. [109] In this case, the Tribunal upheld, without variation, the penalty imposed by the Board. Yet the Board had found liability on three dates, whereas the Tribunal only found liability on two. Also, the Board took significant account of Wyatt Stetler’s sales to neighbours in its decision, whereas the Tribunal had discounted that evidence for credibility purposes. It is unclear whether the Tribunal took it into account for the purpose of imposing penalty. The Board’s penalty clearly was based significantly on Wyatt Stetler’s failure to apologize, as compared with other growers. Again, the Tribunal does not say what effect, if any, that factor played in its decision to uphold the penalty. Nor is it clear that the Tribunal was alive to the fact that it could not treat this factor as an aggravating circumstance. [110] The Tribunal’s hearing was a trial de novo. Certainly on an appeal, the Tribunal is entitled to consider the penalty imposed by the Board. In so doing, it must also ensure that to the extent the evidence and findings made differed from those of the Board, either the penalty imposed reflects that difference, or the Tribunal explains in its reasons why, in spite of the different findings, the same penalty is warranted. This is especially important when the penalty is the complete cancellation of a basic production quota and therefore affects the respondents’ ability to continue in tobacco farming. Because it is not clear that in imposing the original penalty set by the Board and in the face of its different findings, the Tribunal considered all relevant factors, I conclude that the Tribunal’s penalty decision is unreasonable: Ontario (Provincial Police) v. Favretto at para. 50. [111] This court is not in a position to determine the proper penalty. Therefore, the matter is referred back to the Tribunal only for the purpose of reconsidering the issue of penalty and providing reasons for whatever penalty is imposed. Result [112] I would allow the appeal, set aside the decision of the Divisional Court, reinstate the decision of the Tribunal on the findings with respect to liability, and remit the matter to the Tribunal to reconsider, as it deems appropriate, the issue of penalty. [113] Each side submitted a bill of costs. On the partial indemnity scale the totals were virtually identical: approximately $47,500.00. The appellant was wholly successful on the liability issue, while the respondents had partial success on the penalty issue. I would therefore award costs fixed at $30,000.00 to the appellant inclusive of disbursements and G.S.T. RELEASED: July 8, 2005 (“SB”) “K. Feldman J.A.” “I agree S. Borins J.A.” “I agree E. Cronk J.A.” [1] The Tribunal is also a respondent in this proceeding. I refer in these reasons to Wyatt Stetler and 934671 Ontario Limited, collectively, as the “respondents” and to the Tribunal as the “Tribunal”.