Rainbow

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Friday, May 11, 2012

Soybean quality dispute goes to Ontario Court of Appeal

The Court of Appeal for Ontario recently released a decision in a case involving a Chatham area farm operation and Thompsons Limited related to quality grading of soybeans.  For more than two decades, the farm operation, "Triple P", had purchased crop inputs from Thompsons and Thompsons had contracted with Triple P to buy grain.  Thompsons had also hired Triple P to provide custom spraying to some of its other customers.

In 2007, the relationship took a turn for the worse when Thompsons concluded that one batch of seed beans from Triple P did not meet quality standards necessary for a seed premium of $1.35 per bushel.  Then Thompsons advised Triple P that it would not be awarding its 2007 spraying contract to Triple P, even though Triple P was of the view that an oral contract was already in place.  Triple P then threatened that it would not deliver other futures contracts for 2007 and 2008 grain.

Thompsons sued Triple P and Triple counterclaimed.  The trial judge concluded that: (1) Thompsons had established its claims in respect of the Futures Contracts; (2) Thompsons was not obliged to pay the claimed seed premiums under the Soybean Contracts because the Renwick soybeans “fell below grade” and Triple P had sold the Respond soybeans to a third party; and (3) no binding 2007 Spraying Contract had been entered into by the parties.  The trial judge awarded Thompsons damages in the amount of $108,046.39, inclusive of prejudgment interest, on account of Triple P’s breaches of the Futures Contracts, together with costs in the sum of $60,000. She dismissed Triple P’s counterclaim.

The Court of Appeal dismissed Triple P's appeal of this decision.  Read the decision at: Thompsons Limited v. 617987 Ontario Inc.