Wednesday, July 6, 2011

Court says neither party to cow-calf lease agreement conducted himself appropriately

Between 2004 and 2006, a cow-calf lease agreement was in place between Terry Pogson and Claude Martin.  Pogson owned about 76 cows, but took a job in the city and decided to lease out the cows to another operator.  Martin took the cows on the basis of an oral agreement that was later reduced to writing.  Pogson leased the cows and provided some pasture at his farm.  He was to receive 1/3 of the calves and would pay 1/3 of the expenses.

Problems arose as calving began and Martin realized that there were a number of open cows (that would not calf).  As a result, Pogson and Martin agreed that Martin would not be charged for the pasture use and would not be charged for 76 bales for which he had previously agreed to pay $20 each.  Martin was also concerned when he discovered that Pogson's cows had been vaccinated against Bovine Viral Diarrhea (BVD) in or about 2001 when a cow purchased from a neighbour tested positive for the illness.  The Court accepted the evidence of Pogson that the vaccinated cows were free of BVD given that any infected cow would have died as a result of being given the live vaccine.

At some point later in the contract, Martin sold some of the cattle that had been leased to him.  The overall result of the problems was a lawsuit in which both parties claimed various damages from the other.  The trial judge concluded the following about the parties and their agreement:
It is very easy to draw the conclusion that the plaintiff was a very disinterested owner-lessor. He did not look in on his herd as often as he should have. He never demanded an annual accounting. When the lease was terminated, he could only guess at the number of calves which should have been coming to him. Given the nature of this type of agreement which gives the lessee total authority over the cows, which remain the property of the lessor, the plaintiff should have been more diligent in ensuring that his investment was protected. It is impossible for him to complain when a dispute arose that the number of calves he is entitled to should be higher than the numbers put forward by the defendant.
Respecting the defendant's evidence, I must say I was very unfavourably impressed by it.
The defendant testified that he was treating the agreement as “null and void” within three months from the time he took the cattle. This is prior to the written agreement which the defendant himself prepared on his farm letterhead. The written agreement reflected the terms of the oral agreement. This spoke volumes to me as to the defendant’s attitude. Based on this testimony and the defendant’s later actions (as outlined below), it was clear to me that the defendant never had any intention of living up to his part of the agreement. He wanted all the benefits due to him and more but expected to pay little or nothing to the plaintiff.
In the end, the Court credited Pogson certain amounts for pasture used and cows sold and credited Martin for the value of some calves, transport costs and vaccine costs.  The end result was a judgment in favour of Pogson in the amount of $3,736.00.

Read the decision at: Pogson v Martin.