The VQAO is a not-for-profit corporation without share capital
operating as the designated wine authority under the Vintners
Quality Alliance Act, 1999, S.O. 1999, c. 3 (the “Act”) for the purposes of administering the Act and the associated regulations.
It does so within its authority under the Act, the associated regulations and the framework set out in its administrative agreement with the Minister of Government and Consumer Services
 As a not-for-profit corporation without share capital, the
VQAO is subject to the provisions of the Corporations Act, R.S.O.
1990, c. C.38. Pursuant to the Corporations Act, the VQAO has
passed by-laws governing issues such as membership.
 The Act provides that the VQAO has the power to make
certain rules. Some rules require ministerial approval and some
do not. The core of the Act prohibits the use of certain established
terms, descriptions and designations without VQAO approval.
One of those terms is “icewine”. In order to obtain the right
to use a regulated term such as “icewine”, a winemaker must be
a member of the VQAO and the wine in question must have
received approval from the VQAO. To receive approval the wine
must go through a number of steps, including being subject to
a taste test by a tasting panel. The taste test requirement is contained in a VQAO rule that did not receive ministerial approval.
 The Applicant was a member of the VQAO and as a member
submitted certain of its wines for approval. Approval was granted
for two of those wines. However, over an 18-month period it submitted wines and none were approved, as they failed the taste
test. The VQAO’s By-Law provides that if a winemaker fails to
obtain VQAO approval for any one of its wines over an 18-month
period, the winemaker’s VQAO membership is subject to termination. The Applicant’s membership was terminated due to
 When the VQAO advised the Applicant that its membership
had lapsed, the VQAO further advised that it would be permitted
to sell its remaining inventory labelled with regulated terms,
descriptions and designations (including “icewine”) for a period of
one year from the date of the lapse.
 After the 12-month period had expired, the Applicant continued to sell its previously approved wines using VQAO designations. The Applicant was prosecuted and acquitted on the basis of
a finding that the VQAO had no statutory or regulatory authority
to revoke the approval of pre-approved wines on the basis of
a lapse of membership.
 After this decision, the Lieutenant Governor in Council
passed a new regulation allowing the VQAO to suspend or revoke