Eggen Seed Farms Ltd. v. Alberta Wheat Pool, (1997) 205 A.R. 77 (QB)

• Judge: Gallant, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: June 27, 1997
• Citations: (1997), 205 A.R. 77 (QB)

Eggen Seed Farms v. Alta. Wheat Pool (1997), 205 A.R. 77 (QB)

MLB headnote and full text

Temp. Cite: [1997] A.R. TBEd. JL.023

Eggen Seed Farms Ltd. (plaintiff) v. Alberta Wheat Pool (defendant)

(Action No. 9211-000068)

Indexed As: Eggen Seed Farms Ltd. v. Alberta Wheat Pool

Alberta Court of Queen's Bench

Judicial District of Edmonton

Gallant, J.

June 27, 1997.

Summary:

The plaintiff was a pedigreed grain seed grower. In order to sell grain as pedigreed grain seed, the grain had to be virtually free of weeds or other seeds. The plaintiff pur­chased fertilizer from the defendant and applied it to its lands. The fertilizer con­tained seed contaminants which caused damage to the plaintiff's crops. The plaintiff sued the defendant for damages. The defen­dant relied on exclusion clauses and also alleged that the plaintiff was contributorily negligent and failed to mitigate its loss.

The Alberta Court of Queen's Bench found that the defendant was negligent and was not protected by the exclusion clauses and that the fertilizer was not of merchantable qual­ity. The plaintiff was not contributorily negligent. The court awarded the plaintiff judgment for $68,238.89, which included amounts for loss of income, higher cleaning costs, roguing costs and additional herbicide costs. The court declined to award punitive damages.

Contracts - Topic 2124

Terms - Express terms - Exclusionary clauses - Validity of - [See Contracts - Topic 7433 ].

Contracts - Topic 2126

Terms - Express terms - Exclusionary clauses - Interpretation - [See Contracts - Topic 7433 ].

Contracts - Topic 7433

Interpretation - Ambiguity - Contra proferentem rule - The plaintiff was a pedigreed grain seed grower - The plain­tiff purchased contaminated fertilizer from the defendant which caused damage to the plaintiff's crops - The plaintiff sued the defendant for damages - The defendant relied on exclusionary clauses contained in the delivery slip and the sales invoice - The Alberta Court of Queen's Bench held that the exclusionary clause in the sales invoice was not effective against the plaintiff where it was not brought to the plaintiff's attention and no representative of the plaintiff signed the invoice - Fur­ther, the exclusionary clause in the delivery slip was drafted by the defendant and the contra proferentem rule applied - The clause was interpreted to not protect the defendant where it negligently permitted the fertilizer to become contaminated - See paragraphs 18 to 20.

Damages - Topic 1310

Exemplary or punitive damages - Negli­gence - [See Sale of Goods - Topic 6504 ].

Sale of Goods - Topic 4108

Conditions and warranties - Implied or statutory terms as to quality or fitness - Merchantable quality - The plaintiff was a pedigreed grain seed grower - In order to sell grain as pedigreed grain seed, the grain had to be virtually free of weeds or other seeds - The plaintiff purchased fertilizer from the defendant and applied it to its lands - The fertilizer contained seed contaminants which caused damage to the plaintiff's crops - The Alberta Court of Queen's Bench found that the fertilizer was contaminated because of the defen­dant's negligence - The defendant's defec­tive dust collection system caused weeds and other contaminants to be blown into the air and into the open fertilizer bins and the defendant's inspection regime fell short of the minimum standard required - The fertilizer was not of merchantable quality and pursuant to the Sale of Goods Act, the plaintiff was entitled to treat the matter as a breach of warranty by the defendant - See paragraphs 15 to 17 and 24 to 26.

Sale of Goods - Topic 4117

Conditions and warranties - Implied or statutory terms as to quality or fitness - Exclusionary clause - Validity of - [See Contracts - Topic 7433 ].

Sale of Goods - Topic 4118

Conditions and warranties - Implied or statutory terms as to quality or fitness - Exclusionary clause - Effect of - [See Contracts - Topic 7433 ].

Sale of Goods - Topic 4348

Conditions and warranties - Sale by des­cription - Implied condition of merchantable quality - [See Sale of Goods - Topic 4108 ].

Sale of Goods - Topic 6504

Breach - Remedies of buyer - Measure of damages for breach of warranty - The plaintiff was a pedigreed grain seed grower - In order to sell grain as pedigreed grain seed, the grain had to be virtually free of weeds or other seeds - The plaintiff pur­chased fertilizer from the defendant and applied it to its lands - The fertilizer con­tained seed contaminants which caused damage to the plaintiff's crops - The Alberta Court of Queen's Bench found that the defendant was negligent and that there was a breach of warranty - The court awarded the plaintiff judgment for $68,238.89, which included amounts for loss of income, higher cleaning costs, roguing costs and additional herbicide costs - The court declined to award puni­tive damages - See paragraphs 27 to 142.

Torts - Topic 4355

Suppliers of goods - Negligence - Retailers and wholesalers - Breach of warranty - [See Sale of Goods - Topic 4108 ].

Torts - Topic 4362

Suppliers of goods - Negligence - Retailers and wholesalers - Duty to inspect goods sold - [See Sale of Goods - Topic 4108 ].

Torts - Topic 6601

Defences - Contributory negligence - Gen­eral - What constitutes contributory negli­gence - The plaintiff was a pedigreed grain seed grower - In order to sell grain as pedigreed grain seed, it had to be vir­tually free of weeds or other seeds - The plaintiff purchased fertilizer from the defendant - The fertilizer contained seed contaminants which caused damage to the plaintiff's crops - The defendant argued that the plaintiff should have examined the ferti­lizer before applying it to make sure it was clean - The Alberta Court of Queen's Bench held that the plaintiff was entitled to assume that the defendant would be careful to sell only fertilizer that was uncontami­nated by seeds, especially to a known pedigreed seed grower - Further, the defen­dant had given an assurance that it would be a good clean product - The plaintiff was not contributorily negligent in any of its acts or omissions in dealing with the situ­ation - See paragraphs 21 to 23.

Cases Noticed:

Exchanger Industries Ltd. v. Dominion Bridge Co. (1986), 69 A.R. 22 (Q.B.), refd to. [para. 20].

Spycher Estate v. Coulter (J.L.) Ltd. and Town and Country Homes (Western) Ltd. (1982), 40 A.R. 373 (C.A.), refd to. [para. 20].

Vorvis v. Insurance Corp. of British Col­umbia, [1989] 1 S.C.R. 1085; 94 N.R. 321; 58 D.L.R.(4th) 193; [1989] 4 W.W.R. 218; 36 B.C.L.R.(2d) 273; 90 C.L.L.C. 14,035; 25 C.C.E.L. 81, refd to. [para. 139].

Van Oirschot v. Dow Chemical Canada Inc. (1995), 174 A.R. 157 (C.A.), refd to. [para. 139].

Counsel:

Laurie J. Meunier (Martinez Meunier & Sholter), for the plaintiff;

G.T. Harvey Locke (MacKimmie Mat­thews), for the defendant.

This action was heard before Gallant, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following judgment on June 27, 1997.