Nursery trees ruled to be chattels - claim for spray damage barred by limitation period

The Manitoba Court of Queen's Bench has dismissed a claim for spray damage caused to nursery trees (Roundup from a neighbouring wheat field) on the basis that the applicable limitation period had expired.  The key issue was the characterization of the trees - were they fixtures to the real property (the land) or were they chattels (movable property not affixed to the land)?  If they were fixtures, then a six-year limitation period would apply.  If they were chattels, a two-year limitation period would apply.  The action was commenced nearly four years after damage to the trees was first observed.

What is annexed or attached to the land becomes part of the land (a fixture), but there must be an intention to annex or attach evidenced by the degree of annexation and the object of the annexation.  In this case, the claimant argued that the trees were growing crops and, therefore, part of the real property (the land).  The defendants argued that the trees were planted only for the purpose of storage until they would be sold or used by the claimant, remaining as chattels (not fixed to the land).

The Court sided with the defendants and found that the nursery trees were chattels.  They were treated as the claimant's "stock in trade - as inventory".  The trees were never intended to be permanently attached to the land or to constitute an improvement to the land.  As a result, the two-year limitation period applied and barred the claim for damages.

Read the decision at: Noralta Northern Alberta Trees Inc. v. Plato Enterprises (Alberta) Ltd.

NS Supreme Court throws out spray drift case after Farm Practices Board rules farm practice was normal

The Supreme Court of Nova Scotia has dismissed a spray drift claim brought by landowners against a neighbouring farmer and his farm business.  The plaintiffs are organic farmers and alleged that, in 2007, the defendant farmer sprayed his lands with a herbicide that drifted onto their property causing various damage: significant health issues, crop damage, and miscarriages by four horses as a result of exposure to "overspray". 

In response to the claim, which was founded in negligence, the defendants relied on the provisions of the Farm Practices Act.  They stated that their farming activities were carried out in accordance with "normal farm practice" so that, under the legislation, they were protected from any civil action in "nuisance, negligence or otherwise, for any odour, noise, dust, vibration, light, smoke or other disturbance resulting from an agricultural operation."  Following a motion by the defendants, the civil action was stayed pending a determination by the Farm Practices Board of whether the activities in question constituted "normal farm practice".

The plaintiffs then made an application to the Board and a hearing took place in June, 2012.  In January, 2013, the Board ruled that the defendants had not acted in a manner inconsistent with "normal farm practice", and dismissed the plaintiffs' complaint.  That Board decision was appealed unsuccessfully by the plaintiffs.

With all of that completed, the plaintiffs returned to the Supreme Court of Nova Scotia to have the stay lifted so that they could proceed with their action for damages.  The defendants also asked for the stay to be lifted, but for the purpose of dismissing the claim.  The Court had to deal with the ruling by the Board that the activities in question, in particular the spraying, were "normal farm practice".  However, the Board decision was not automatically determinative of the civil action - the question for the Court was whether spray drift was "other disturbance" within the meaning of the Farm Practices Act.

If spray drift fell outside "other disturbance", then there would be no protection against a civil claim afforded by the Act.  Justice Murphy concluded on this point: "Absent contrary authority, I remain of the view that the activities the plaintiffs allege occurred, herbicidal overspray or drift and contaminated run-off from ditching, are "other disturbances" resulting from an agricultural operation as contemplated by section 10(1)(a) of the Act."  Therefore, the claims made by the plaintiffs were barred by the normal farm practices legislation and dismissed as such.

Read the decision at: Nauss v. Waalderbos.

Is there a special duty for an insurer who insures both sides in a spray drift case?

The fact scenario in this case is somewhat complicated.  In the end, the case is about an insurance company that found itself on both ends of a spray drift claim.  The Plaintiffs farm land adjacent to the land farmed by the Defendants.  The Plaintiffs claimed that the Defendants sprayed a herbicide on their land that drifted to the Plaintiffs' land and caused crop damage and subsequent financial loss. 

The Defendants had insurance coverage for that type of loss and turned the claim over to their insurer, SMI, to be dealt with.  There were negotiations, but the claim was not settled. 

Then the Plaintiffs filed an amended claim adding SMI as a second defendant.  As it happened, SMI was also the insurer of the Plaintiffs.  Although the Plaintiffs' policy with SMI did not cover the crop damage loss they sustained, the Plaintiffs pleaded that SMI was duty bound to pay out their claim through the Defendants' insurance.  SMI owed a duty of good faith and fair dealing to the Plaintiffs, they alleged, and so SMI had acted in bad faith in failing to settle the Plaintiffs' claim through the Defendants' insurance.

The judge of the Saskatchewan Court of Queen's Bench hearing the case determined that the Plaintiffs' claim against SMI had no reasonable chance of success or arguable case.  The judge wrote, "To impose a duty on the insurance company to act fairly in resolving the claim would put its insured's [i.e. the Defendants'] financial position at risk.  The insurer's primary obligation arises from its contractual obligations to its insured under the policy being claimed on and not to a third party who may be insured in circumstances unrelated to the action." [emphasis added]

On that basis, the Court did not permit the Plaintiffs' to amend their claim to include SMI as a defendant.

Read the decision at: Sweet v Sweet.

NS Farm Practice Board decision on overspray upheld

Justice Scanlan of the Supreme Court of Nova Scotia heard an appeal of a decision of the Farm Practices Board (FPB) involving the following facts:

The matter arose as a result of two instances where [JW] sprayed a field directly across the road from the [N] property with what I understand to have been a herbicide. The Appellants argue this was done at a time when the wind speed and direction caused an overspray to spread onto their property, allegedly damaging raspberry canes and allegedly causing personal injury to both Mrs. [N] and to her horses. In addition, the Appellants complain about the impact of ditch excavation, as carried out by Mr. [W], and as to the placement of bales of hay or straw in the ditch, the escape of organic materials onto their property together with the impact or the potential impact that might have had on their well water. I emphasize repeatedly the word “allegedly.” The Appellants also allege, as I noted, that the herbicide impacted the health of their horses, specifically mares in foal. They say the mares were impacted and perhaps may have aborted as a result of the overspray. They allege, as I understand it, although I'm not reviewing in any great detail the allegations in the statement of claim, that it was not just the existing pregnancies that were impacted but the fertility of the mares on a go forward basis.

The issue that had been before the FPB was whether or not the farmer in this case complied with normal farm practices, in which case the practice would be protected from certain civil actions for damages or injunctive relief.  However, the farm protection legislation does not address "the potential impact of chemical use or misuse, including the impact on neighbouring properties."

In the end, Justice Scanlan determined that the FPB decision was reasonable, but pointed out its limitations - it did not deal with all of the allegations made by the complainants, including allegations about overspray.  Those other allegations would still have to be dealt with, if at all, in the civil action that the complainants had also commenced against the farmer in this case.  That action had been stayed pending the outcome of the FPB proceeding.

Read the decision at: Nauss v. Nova Scotia (Farm Practice Board).

Trespass Claim for Pesticide Drift

Click on the following link for an article from the official blog of the Association of American Law Schools - Agricultural Law Section about a significant pesticide drift ruling from the Minnesota Court of Appeals: Johnson et al. v. Paynesville Farmers Union Cooperative Oil Co.  The Johnsons, organic farmers, sued the PFUC over allegations that pesticide and herbicide spray had drifted onto their organic crops and caused crop damage (including the alleged loss of organic certification). 

PFUC applied for summary judgment to have the claim thrown out on the basis that there was no "trespass by particulate matter".  A lower court judge agreed with the PFUC, but the appeal court ruled that pesticide overspray could constitute an unlawful entry (trespass).  The AALS article notes that most jurisdictions now recognize agricultural chemical drift as sufficient grounds for a claim in trespass.