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.

Sask. Court rules husband's seed and chemical debt can be set off against payment to wife for grain

A Judge of the Provincial Court of Saskatchewan has ruled that a farm supply company was justified in setting off a husband's debt owing for seed and chemical against a payment to be made to his wife for grain.  Denise Korpan had sold feed barley to Parrish and Heimbecker Ltd., and the company deducted from the payment to Ms. Korpan the amount her husband owed for seed and chemical.  She sued the company alleging there was no right to set off the husband's debt and alleging that the debt was not as much as was deducted.

Ms. Korpan, the Plaintiff, and her husband, Ed Korpan, are farmers running a mixed farming operation.  They have never incorporated their farming operation. Initially they carried on as a family run farm, however some 12 years ago, at their accountant’s suggestion, they divided the responsibilities in their farming operation. The Plaintiff now looks after the cattle portion of the farming operation while her husband is responsible for the grain portion of the operation. Both have knowledge of what the other is doing and make decisions about the farming operation together, but both own farmland and farm assets in their own names. Even though certain machinery and/or vehicles are owned by one of them, the other can use the machinery or vehicles if necessary.

In February, 2008, Norman Cobb, a sales representative for the Defendant, Parrish & Heimbecker Ltd., met with the Korpans at their farm. At this meeting, Ed Korpan filled out a credit application with the Defendant which was later approved. The Plaintiff did not sign the credit application, but was present when her husband signed it and took an active role in the discussions surrounding it. In the course of filling out the application, Mr. Cobb confirmed with them that they ran a family farm. Nothing was said about them running separate farming operations. In the 2008 crop year, Ed Korpan purchased canola seed and chemical from the Defendant on credit. The Plaintiff was aware that he had done this although she did not recall seeing the actual contract. This was not out of the ordinary as Ed signed all of the grain related contracts on behalf of the family.

In order to decide the set off issue, the Judge had to determine if the Plaintiff and her husband were operating the farm as a partnership or if they were each running their own farming operation. The Defendant company argued that it was former while the Plaintiff was adamant that her and her husband were each sole proprietors of separate farming operations.  The Judge found that the Plaintiff had not satisfied the Court on a balance of probabilities that she and her husband ran separate farming operations.  The evidence established the contrary - that they were engaged in a partnership.  Under the Partnership Act, "every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while he/she is a partner...".  On this basis, the Defendant was entitled to set the husband's debt off against the wife's sale of barley (i.e. set off the parternship's debt against the payment to the partnership for the barley).

Read the decision at: Korpan v Parrish and Heimbecker 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.

Bill C-474 defeated 178 to 98 in House of Commons

Bill C-474 was defeated by a vote of 178 to 98 this evening in the House of Commons.  The private member's bill, introduced by NDP MP and Agriculture Critic Alex Atamanenko, would have restricted the approval of GM-crops in Canada.  The government would have been required to review possible export implications before granting approval.  Without support from either the Conservatives or the Liberals, the bill was doomed in the vote. 

GMO exportability bill back in Commons Wednesday | Grain News

A vote is expected today on a private members' bill to block federal approval of GMO seeds. The bill is not expected to become law as neither the Conservative government nor the Liberals are expected to support it.

Read the Grain News article on the bill at: GMO exportability bill back in Commons Wednesday.

Manitoba farmer wins Leo Birdsfoot Trefoil lawsuit

Manitoba farmer Engelbert Fischer was awarded a judgment of $21,006.79 plus pre-judgment interest against Dyck Forage & Grasses Ltd. in a claim before the Court of Queen's Bench of Manitoba.  Fischer had sold his 2002 and 2003 crops to the Defendant company under a contract that required the seed to satisfy a germination count of 75.  The Defendant's representative told Fischer that the germination count was in the 90's and agreed to pay $1.50 per pound for the seed.  Then the Defendant turned around and paid only $1.25, saying the germination count was insufficient.  The real dispute seemed to arise in 2004 when prices for the seed escalated to $2.00 per pound, a price the Defendant company was not willing to pay. 

In ruling in favour of Fischer, the Court found that:

(i) there was no basis for the defendant’s unilaterally reducing the price of the seed to $1.25 per pound, let alone $1.30 or $1.40 as indicated in the written agreement;

(ii) there was no discussion at the inception of the transaction of analysis by anyone other than the defendant’s employee;

(iii) there was no discussion of the seed having to satisfy a purchaser; and

(iv) there was no discussion that the plaintiff would have to wait for payment until all the seed was sold or that he would have to sell the 2004 crop as part of the transaction.

Read the decision at: Fischer v. Dyck Forage and Grasses Ltd.

Defective seed potato ruling upheld by NB Court of Appeal

Atlantic Potato Distributors Ltd., a potato distributor located in New Brunswick, brought an action against Robert Meersseman and Leon Meersseman, farmers in Ontario, seeking payment for seed potatoes. The Meerssemans admitted receiving and planting the seed potatoes, but asserted that some of the seed potatoes were defective, and counterclaimed to recover the resulting losses.  A crop adjuster for Agricorp (Ontario's crop insurance program) inspected the Meerssemans' fields and reported that between 50 and 60 percent of the crop did not emerge.  Following an unsatisfactory harvest, the Meerssemans refused to pay Atlantic for the seed. 

Both parties were successful at trial (i.e. the Meerssemans owed Atlantic for the seed potatoes they had purchased, but Atlantic was liable to the Meerssemans for the losses they suffered as a result of planting those defective seed potatoes).  Atlantic appealed the finding of liability for breach of a warranty implied under s. 15 of the Sale of Goods Act, R.S.N.B. 1973, c. S-1, as well as the damages award to the Meerssemans.  The New Brunswick Court of Appeal dismissed the appeal on both grounds.

Read the decision at: Atlantic Potato Distributors Ltd. v. Meersseman.

GM Seeds Bill passes second reading, referred to committee

The private member's bill introduced by Federal NDP Agriculture Critic Alex Atamanenko that would tighten regulations surrounding the sale of genetically engineered seeds on the world market has passed second reading. If passed into law, the CFIA would be required to analyze the potential harm to export markets "before the sale of any new genetically engineered seed is permitted".  The bill has now been sent on for review by the Standing Committee on Agriculture and Agri-Food:

Debates of April 14th, 2010

5:55 p.m.

The House resumed from April 1 consideration of the motion that Bill C-474, An Act respecting the Seeds Regulations (analysis of potential harm), be read the second time and referred to a committee.

5:55 p.m.  Liberal   The Speaker Peter Milliken

The House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-474 under private members' business.

(The House divided on the motion, which was agreed to on the following division:)

6:05 p.m.  Liberal   The Speaker Peter Milliken

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Agriculture and Agri-Food.

Better Farming is reporting that the Grain Farmers of Ontario are protesting the bill, saying that the proposed bill will create more red tape and reduce science based evaluation in the approval process.  Read the Better Farming article at: Grain growers protest seed bill.

Mr. Atamanenko has reproduced the entire debate on the bill on March 17, 2010 on his website: Debate on Bill C-474.

Private Member's Bill targets GM crop danger to export markets

CBC News - Manitoba - Genetically modified flax target of bill

Federal NDP Agriculture Critic Alex Atamanenko has presented a private member's bill to Parliament that would tighten regulations surrounding the sale of genetically engineered seeds on the world market. If passed, the CFIA would be required to analyze the potential harm to export markets "before the sale of any new genetically engineered seed is permitted".  First reading of the bill took place on March 30, 2010, and debate on the bill is set for next Wednesday.

Read Bill C-474 at: An Act respecting the Seeds Regulations (analysis of potential harm).

Atamenenko earlier proposed a bill to ban the use of terminator seeds.  Bill C-353 bore the official name, "An Act to prohibit the release, sale, importation and use of seeds incorporating or altered by variety-genetic use restriction technologies (V-GURTs), also called “terminator technologies”, and to make a consequential amendment to another Act".

Read Bill C-353 at: Terminator Seeds Ban Act.