Alberta Court upholds denial of crop insurance on basis of false or misleading reporting

The Alberta Court of Queen's Bench recently dismissed an application for judicial review of a decision by the appeal committee related to Alberta's crop insurance program.  The regulations that govern crop insurance provide that the decision of the appeal committee is final and binding on the parties; only a challenge to the decision by way of judicial review is possible.

In this case, crop insurance denied claims by a farmer for its 2009 canola crop, its 2009 Canadian Prairie Spring wheat crop and its 2010 Canadian Prairie Spring wheat crop.  Crop insurance declined to pay the benefit to the farmer on the basis that the farmer's post harvest assessments were incomplete and inconsistent with actual crop production.  On the appeal of this denial of coverage, the appeal committee decided that credibility was an issue.  The committee found that where there was a conflict in the evidence between the farmer and the crop insurance witnesses, the evidence of the crop insurance witnesses was to be preferred.  The committee cited examples where the farmer under-reported grain sales or was not forthright about grain sales until confronted with third-party documentation obtained during the crop insurance investigation.  The committee, which consisted of five farmer members, was left with the impression that the farmer "had not been honest and forthcoming in his dealings with AFSC during the claims process and subsequent contact with Program Cross Compliance and Investigation, despite several opportunities to make full and honest disclosure of the production and sales of crops."

The Court ruled that the standard of review applicable to this judicial review was a standard of reasonableness: if the Court found that the appeal committee's decision was "reasonable", then the decision would stand.  On review of the record from the appeal process, the Court concluded that the appeal committee's decision was, in fact, reasonable, and denied the judicial review application on that basis.  In particular, the Court found that it was abundantly clear that the committee had found evidence of false or misleading reporting from the farmer.  The Court could find nothing unreasonable about that conclusion and the denial of the crop insurance claims.

Read the decision at: F Prins Potatoes Ltd v Agriculture Financial Services Corporation.

Farmer recovers damages from trucker for fertilizer contamination of canola

The Provincial Court of Saskatchewan has ruled in favour of a farmer who claimed damages against a trucking firm after a load of his canola was discounted by a feed processor due to fertilizer contamination.  There were five loads of canola being trucked to Cargill.  The fourth load was rejected because it was contaminated with fertilizer.  The canola then had to be sold to the feed processor at a discount.

The issue in the case was this: was there proof on a balance of probabilities that the trucking company contaminated the fourth load of canola taken from the Plaintiff's farm?  The Court found that there was proof.  The Court rejected a claim that the contamination came from a fertilizer bin on the Plaintiff's farm.  The farmer was granted judgment in the amount of $5,936.68.

Read the decision at: Zuchkan v Biggar Transport (2006) Ltd.

Saskatchewan farmer loses appeal over Roundup Ready canola that wasn't Roundup Ready

The Court of Appeal for Saskatchewan has dismissed the appeal of Lawrence Scraba of a decision dismissing his claim for damages over canola seed.  In 2005, Scraba had purchased from Sharpe's Soil Services Ltd. (the defendant in the action and the respondent on the appeal) about 270 acres' worth of Nexera 828 IP canola seed.  Scraba was of the understanding that the seed was Roundup Ready, but it was not.  Scraba spayed the crop with Roundup "with the inevitable result that the herbicide killed all of the Nexera 828 canola plants". 

Scraba sued Sharpe's claiming that the canola seed was not fit for purpose or not of merchantable quality, or both, and, in the alternative, that his loss of crop was the result of Sharpe's Soil Services Ltd.'s negligence or breach of duty, or both, in selling canola seed that was not Roundup Ready.  The trial judge dismissed all of these claims and granted Sharpe's judgment in respect of a debt owing for the purchase of the seed.  The trial judge concluded, and the Court of Appeal agreed, that Scraba had received what seed he had asked for (what was required to fulfill a grower's contract he had in place) and, in the circumstances, Sharpe's did not have a duty to warn Scraba that the seed was not Roundup Ready.  The trial judge had found that Scraba had never communicated to Sharpe's that he wanted Roundup Ready seed (only the seed identified in the IP grower's contract).

Read the trial decision at: Scraba v Sharpe's Soil Services Ltd. Trial.

Read the appeal decision at: Scraba v Sharpe's Soil Services Ltd. Appeal.

Dealer delivers wrong spray for thistle; Court allows set-off against unpaid debt

624798 Saskatchewan Ltd. started a claim in debt for $19,063.09, which includes interest to June 20, 2000, for farm products delivered to farmer Boris Procyk.  Procyk defended the action, including by way of a defence of set-off for destruction of the defendant’s canola crop.  Procyk first argued that he should not have to pay interest on the debt owing.  The Court agreed that there was no agreement to pay interest.  Procyk next argued the set-off, claiming that some of the spray supplied to him by the Plaintiff damaged his canola crop.  The Court found that the Plaintiff had, in fact, supplied the wrong product to Procyk.  In the end, the debt owing by the Plaintiff was reduced to just under $5,500.

Read the decision at: 624798 Saskatchewan Ltd. v. Procyk.

Saskatchewan Court rules hail crop insurance umpire's findings not biased

The Provincial Court of Saskatchewan, Civil Division, has dismissed the claim of a farmer that a decision on crop loss suffered as a result of hail was tainted by bias and impartiality. John DeBalinhard, a farmer in the Rural Municipality of Orkney, made an insurance claim to the defendant in the case, Butler Byers Hail Insurance Ltd., after hail damaged a canola crop on his property. When DeBalinhard disputed the loss as assessed by the defendant, an umpire was appointed by the Saskatchewan Superintendent of Insurance to re-assess the claim and make an award of compensation.

DeBalinhard commenced the court claim when he was dissatisfied with the award made by the umpire. He alleged that the award was considerably lower than compensation paid out by two other insurance companies on the same crops on different properties and alleged that the umpire's decision had been tainted by "bias, interest, or lack of impartiality".

In the end, the Court found that the umpire's award was made within his authority under the applicable legislation and that there was no evidence of bias or impartiality. Based on this, the Court found that the award was binding on DeBalinhard, and therefore did not examine the allegations that other insurers had paid out significantly more for the same loss.

Read the decision at: http://www.canlii.org/en/sk/skpc/doc/2010/2010skpc13/2010skpc13.html

Another canola failure case, another failure to prove cause

Last week, I posted a case in which a farmer alleged that defective seed was the cause of his poor canola crop. This week, I have another case along the same lines. This time Pioneer Grain Company sued Saskatchewan farmer Dale Ortynsky after he refused to pay for herbicides he had purchased because he alleged they were the cause of his crop's poor yield. The spray manufacturers, Bayer and Dupont, were added as third parties to the action. Ortynsky also made a counter claim against Pioneer for damages related to the poor yield.

Once again, lack of evidence about the actual cause of the crop failure meant a finding against the canola farmer. Justice J.E. McMurtry of the Saskatchewan Court of Queen's Bench concluded, "The defendants have not satisfied me that the poor canola crop resulted from herbicides sold by Pioneer and not by some other factor such as weather, soil conditions, farming practice, and/or application of the [herbicide]." Civil claims must be proved on a balance of probabilities (basically, 50% plus 1 or more likely than not). In this case, as Ortynsky could not prove on a balance of probabilities that the herbicide was the cause of the crop failure, his counter claim failed and he was ordered to pay for the herbicide he had purchased, plus interest and costs.

http://www.canlii.org/en/sk/skqb/doc/2009/2009skqb513/2009skqb513.html

Claims that canola seed was defective are going to be difficult

In a recent decision dismissing a claim for damages related to defective canola seed, the Saskatchewan Court of Queen's Bench has commented on the difficulties inherent in this type of claim. After finding that Saskatchewan's Consumer Protection Act did not apply to the seed because it had been purchased in Manitoba, Justice M.D. Acton then commented about the number of actions that have been commenced involving alleged defects in the quality of seed. Acton noted, however, that the evidence has been that the many sensitivities of canola seed include: slow germination when seeded in cool damp soil; susceptibility to frost at an early stage; susceptibility to drought and heat at an early stage; inability to emerge through compacted or crusted clay soils caused by heavy rains immediately after seeding; poor competition with weeds at an early stage; susceptibility to disease and insect infestation. In the case at bar, experts for both sides advised that numerous factors other than seed quality may have caused the failure of the seed to produce a viable and acceptable canola crop. That evidence spelled the end for the claim. The Court was unable to find, on a balance of probabilities, that the quality of the seed was the cause of the crop failure alleged.

Negrave v. Pioneer Grain Company Limited, 2009 SKQB 492
http://www.canlii.org/en/sk/skqb/doc/2009/2009skqb492/2009skqb492.html