2017 Soybean Harvest

2017 Soybean Harvest

Wednesday, February 22, 2012

Canadian Wheat Board loses appeal in negligent misrepresentation case dating from 1982

In late August 1982, widespread frost damage occurred to Western Canada’s premier Canada Western Red Spring wheat (CWRS), resulting in significant degrading of the crop. The Canadian Wheat Board (the CWB), along with the Canadian Grain Commission (the CGC), elected to market the damaged wheat under the specification “Wheat – Ex. Special Bin” (WSB) on the basis, despite its visual degradation, that it “possesses what is known as ‘fair’ milling quality and would be quite suitable for milling purposes.”

Pagnan S.p.A., an Italian corporation, purchased a large quantity of WSB from ConAgra Limited (Agro), an accredited CWB exporter. When the first cargo of wheat was delivered to Italy, it was found to be inferior and not of fair milling quality. Pagnan and Albionex together (Pagnan having sold, then repurchased the cargo from the other plaintiff, Albionex (Overseas) Limited) commenced an action in 1985, claiming against Agro for breach of contract and against the CWB based on the representations made with respect to the characteristics and quality of WSB. Agro crossclaimed against the CWB, asserting that it too had relied upon the CWB’s representations.

The trial judge in the Manitoba Court of Queen's Bench delivered lengthy reasons for decision in July 2009, holding Agro liable to the plaintiffs for breach of contract and the CWB liable for negligent misrepresentation. Agro’s crossclaim against the CWB was allowed. Judgment was eventually entered in favour of the plaintiffs and against the defendants jointly and severally in the amount of $4,642,392.40, inclusive of interest to the date of judgment, plus costs. Judgment was also entered (in favour of Agro) in a similar amount against the CWB.

Agro and the CWB then appealed their liability and damages, and the CWB appealed Agro’s crossclaim judgment. The plaintiffs also cross appealed, arguing that damages should be increased.  None of these appeals or cross-appeals succeeded at the Court of Appeal.

Read the decision at: Albionex (Overseas) Ltd. et al. v. Conagra Ltd. et al.