Evanoff Enterprises Ltd. v. Pioneer Hi-Bred Ltd. et al., (2009) 471 A.R. 112 (QB)

• Judge: Gill, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 04, 2009
• Citations: (2009), 471 A.R. 112 (QB);2009 ABQB 223

Evanoff Ent. Ltd. v. Pioneer Hi-Bred (2009), 471 A.R. 112 (QB)

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. AP.099

Evanoff Enterprises Ltd. (plaintiff) v. Pioneer Hi-Bred Limited, Pioneer Hi-Bred Production Ltd., Pioneer Hi-Bred International Inc., Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand, Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand Products, United Grain Growers Limited, United Grain Growers Limited carrying on business as Agricore United and Proven Seed (defendants)

(0503 08855)

Edward Chomiak (plaintiff) v. Pioneer Hi-Bred Limited, Pioneer Hi-Bred Production Ltd., Pioneer Hi-Bred International Inc., Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand, Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand Products, United Grain Growers Limited, United Grain Growers Limited carrying on business as Agricore United and Proven Seed (defendants)

(0503 08854)

James Smyth (plaintiff) v. Pioneer Hi-Bred Limited, Pioneer Hi-Bred Production Ltd., Pioneer Hi-Bred International Inc., Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand, Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand Products, United Grain Growers Limited, United Grain Growers Limited carrying on business as Agricore United and Proven Seed (defendants)

(0503 08852)

Bronco Creek Farms Ltd. (plaintiff) v. Pioneer Hi-Bred Limited, Pioneer Hi-Bred Production Ltd., Pioneer Hi-Bred International Inc., Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand, Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand Products, United Grain Growers Limited, United Grain Growers Limited carrying on business as Agricore United and Proven Seed (defendants)

(0503 08856)

Terry Borysiuk (plaintiff) v. Pioneer Hi-Bred Limited, Pioneer Hi-Bred Production Ltd., Pioneer Hi-Bred International Inc., Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand, Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand Products, United Grain Growers Limited, United Grain Growers Limited carrying on business as Agricore United and Proven Seed (defendants)

(0503 08853)

Clifford Richards, Daniel Richards, 246301 Alberta Ltd. and 246301 Alberta Ltd. operating as Scenic Heights Seed Farm (plaintiffs) v. Pioneer Hi-Bred Limited, Pioneer Hi-Bred Production Ltd., Pioneer Hi-Bred International Inc., Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand, Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand Products, United Grain Growers Limited, United Grain Growers Limited carrying on business as Agricore United and Proven Seed (defendants)

(0503 09605)

Tansem Holdings Ltd. (plaintiff) v. Pioneer Hi-Bred Limited, Pioneer Hi-Bred Production Ltd., Pioneer Hi-Bred International Inc., Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand, Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand Products, United Grain Growers Limited, United Grain Growers Limited carrying on business as Agricore United and Proven Seed (defendants)

(0503 08857)

Stephen Petluk, 414646 Alberta Ltd., 414646 Alberta Ltd. operating as S. Petluk Farms and Timothy Petluk (plaintiffs) v. Pioneer Hi-Bred Limited, Pioneer Hi-Bred Production Ltd., Pioneer Hi-Bred International Inc., Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand, Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand Products, United Grain Growers Limited, United Grain Growers Limited carrying on business as Agricore United and Proven Seed (defendants)

(0503 08851)

Gillon Grass & Grain Farm Ltd. (plaintiff) v. Pioneer Hi-Bred Limited, Pioneer Hi-Bred Production Ltd., Pioneer Hi-Bred International Inc., Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand, Pioneer Hi-Bred International Inc. carrying on business under the trademark of Pioneer Brand Products, United Grain Growers Limited, United Grain Growers Limited carrying on business as Agricore United and Proven Seed (defendants)

(0803 14919)

(2009 ABQB 223)

Indexed As: Evanoff Enterprises Ltd. v. Pioneer Hi-Bred Ltd. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Gill, J.

April 9, 2009.

Summary:

Several canola farmers commenced actions, asserting that the canola seed that they purchased in 2003 did not perform as expected, given that the seed in question was graded as Canada Certified No. 1. The defendants had manufactured, tested, graded and sold the seed. The farmers each claimed damages for breach of contract, breach of statutory warranty, negligence and negligent misrepresentation. The farmers applied to amend their statements of claim to add the following: references to the Seeds Act, consequential loss as a new head of damages; allegations of fraud and unjust enrichment; and a claim for punitive damages. One of the farmers (the plaintiff in the Gillon action) also sought to add new parties as defendants to its action. The parties were already named as defendants in the other actions. The defendants acceded to the amendments respecting the Seeds Act and the addition of the new head of damages, but not in the amounts proposed to be claimed.

The Alberta Court of Queen's Bench denied the amendments relating to fraud, unjust enrichment and punitive damages, but allowed the remaining amendments, including the addition of new defendants in the Gillon action.

Damages - Topic 1297

Exemplary or punitive damages - Conditions precedent (or when awarded) - Several canola farmers commenced actions, asserting that the canola seed that they purchased in 2003 did not perform as expected - The defendants manufactured, tested, graded and sold the seed - The farmers each claimed damages for breach of contract, breach of statutory warranty, negligence and negligent misrepresentation - The farmers applied to amend their statements of claim to allege, inter alia, fraudulent misrepresentation and claim punitive damages of $50,000,000 per farmer - The total costs of seeds purchased by the plaintiffs was $270,322 - The Alberta Court of Queen's Bench stated that there was evidence that the defendants made the impugned representations - However, the farmers did not provide any, or sufficient, evidence of the second and third requirements of fraudulent misrepresentation (that the representation was false, or the defendants knew that the representation was false or that they were careless as to its truth) - There was no evidence of bad faith or an intention to deceive - Accordingly, the court denied the amendments, where they could have been struck as hopeless and would have been doomed to fail if they had been originally pleaded - See paragraphs 64 to 81 - As the punitive damages claims were based on the fraudulent misrepresentation amendments, they too had to fail - Even if the fraudulent misrepresentation amendments had been allowed, the court was not satisfied that facts supported the punitive damages claims - There was no evidence of "malicious, oppressive and high-handed conduct" on the defendants' part - Also, the amounts sought were prejudicial in that they might radically transform the nature and magnitude of the actions from a collective $2,500,000 claim to one of nearly $1,000,000,000, including $450,000,000 in punitive damages alone - This would have been an appropriate case for the court to have considered intervening to adjust the amounts claimed - See paragraphs 82 to 91.

Damages - Topic 1330

Exemplary or punitive damages - Pleading - [See Damages - Topic 1297 ].

Fraud and Misrepresentation - Topic 6

Fraudulent misrepresentation (deceit) - General principles - What constitutes deceit or fraudulent misrepresentation - [See Damages - Topic 1297 ].

Fraud and Misrepresentation - Topic 446

Fraudulent misrepresentation (deceit) - Practice - Pleadings - [See Damages - Topic 1297 ].

Fraud and Misrepresentation - Topic 4090

Practice - Pleadings - Amendment to plead fraud - [See Damages - Topic 1297 ].

Practice - Topic 2101

Pleadings - Amendment of pleadings - General principles - The Alberta Court of Queen's Bench reviewed the law applicable to an application to amend pleadings, including the circumstances when amendments should be allowed and denied - The court added that "An amendment will only be refused based on an argument that it is 'bound to fail on the merits' if it is clear that there is no genuine issue for trial, and the amended claim would not survive a summary judgment application ... Other situations in which an amendment may be refused is where the amendment is hopeless or made in bad faith ... 'Hopeless' is a stronger standard than 'doubtful'; an amendment is hopeless only if it would have been struck out if properly included in the original pleadings ... Most prejudice will be compensable with costs, but there are some circumstances where prejudice to the defendant will not be compensable ... A triable issue is one that gives rise to a claim recognized in law; the question is whether the facts, if proven, would constitute the claim ... Even if the amendment raises a doubtful plea, it should be allowed if it is arguable ... Amendments to pleadings, like original pleadings, must be pled with particularity ... A modest degree of evidence justifies an amendment to pleadings within the limitation period ... Although this is not a high threshold, some evidence in support of substantive amendments such as these is required ..." - See paragraphs 41 to 47.

Practice - Topic 2102

Pleadings - Amendment of pleadings - Procedure for - The Alberta Court of Queen's Bench stated that "Decisions on the propriety of amendments to a Statement of Claim should be made, if possible, in chambers well before trial ... When a court is in a position to decide the matters before it, particularly when the decision will promote the streamlining of the litigation and increase the efficient utilization of the courts' resources, such a decision ought to be made where there is sufficient evidence, or when the issue is one of law alone ..." - See paragraph 50.

Practice - Topic 2106

Pleadings - Amendment of pleadings - Power of the court to amend - [See Damages - Topic 1297 ].

Practice - Topic 2115.1

Pleadings - Amendment of pleadings - To add claim for punitive damages - [See Damages - Topic 1297 ].

Practice - Topic 2120

Pleadings - Amendment of pleadings - Statement of claim - General - Several canola farmers commenced actions, asserting that the canola seed that they purchased in 2003 did not perform as expected - The defendants manufactured, tested, graded and sold the seed - The farmers each claimed damages for breach of contract, breach of statutory warranty, negligence and negligent misrepresentation - The farmers applied to amend their statements of claim to add, inter alia, consequential loss as a new head of damages - The farmers asserted that the claim for consequential damages arose out of the seed's lack of performance and the damages related directly to the facts and events outlined in the original statements of claim - They further asserted that the defendants had an opportunity to examine the farmers respecting their damages and should further discoveries be needed, that step was compensable by additional costs - The defendants acceded to the amendments, but not in the amounts proposed to be claimed - The Alberta Court of Queen's Bench allowed the amendments in the amounts requested - The parties could argue at trial as to the appropriateness of the amounts claimed - See paragraphs 53 to 55.

Practice - Topic 2141

Pleadings - Amendment of pleadings - To plead fraud - [See Damages - Topic 1297 ].

Practice - Topic 2141

Pleadings - Amendment of pleadings - To plead fraud - The Alberta Court of Queen's Bench referred to rule 115 of the Rules of Court which provided that "In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default or undue influence, particulars (with dates and items, if necessary) shall be stated in the pleading." - The court stated that "There is a general rule against amending to allege fraud, and significant evidence is required to show that 'exceptional circumstances' or 'good grounds' exist ... Although ordinarily only a modest amount of evidence is required for amendments, a higher standard of evidence may be required for amendments to include allegations of fraud, and evidence of intent is required ..." - See paragraphs 48 and 49.

Practice - Topic 2142

Pleadings - Amendment of pleadings - Considerations governing granting of leave - [See Practice - Topic 2101 ].

Practice - Topic 2143

Pleadings - Amendment of pleadings - Circumstances when amendment denied - [See Practice - Topic 2101 ].

Practice - Topic 2143

Pleadings - Amendment of pleadings - Circumstances when amendment denied - Several canola farmers commenced actions, asserting that the canola seed that they purchased in 2003 did not perform as expected - The defendants manufactured, tested, graded and sold the seed - The farmers each claimed damages for breach of contract, breach of statutory warranty, negligence and negligent misrepresentation - The farmers applied to amend their statements of claim to add, inter alia, allegations of unjust enrichment - The farmers asserted that the nature of their deprivation included crop inputs such as the cost of seed, the technical use agreement, fertilizer and chemicals - The Alberta Court of Queen's Bench denied the application - The farmers admitted in their affidavits that they purchased the seed from a retailer and not directly from any of the defendants - There was no evidence to support the farmers' claim that the retailers were actually owned or operated by the defendants - As such, there was no direct benefit or enrichment to the defendants and the requested amendments did not meet the first element of the unjust enrichment test and were hopeless - Additionally, the commercial relationship between the farmers and the defendants constituted a juristic reason for the enrichment and the corresponding deprivations - The enrichment flowed from the contracts for the purchase and sale of the seed - A contract could constitute juristic reason - See paragraphs 56 to 63.

Restitution - Topic 63

Unjust enrichment - General - Requirement of enrichment at plaintiff's expense - [See second Practice - Topic 2143 ].

Restitution - Topic 63

Unjust enrichment - General - Requirement of enrichment at plaintiff's expense - The Alberta Court of Queen's Bench stated that "Unjust enrichment does not extend to permit recovery where the alleged benefit is indirect or incidentally conferred; cases where unjust enrichment has been made out generally deal with benefits conferred directly and specifically on the defendant, such as goods or services purchased directly from the defendant or money paid to the defendant ... Nor does recovery for unjust enrichment apply where a purchase price is paid to a retailer and not directly to the manufacturer ..." - See paragraph 60.

Restitution - Topic 64

Unjust enrichment - General - Juristic reason for enrichment - [See second Practice - Topic 2143 ].

Restitution - Topic 67

Unjust enrichment - General - Persons entitled to claim - [See second Restitution - Topic 63 ].

Cases Noticed:

Marlborough Ford Sales Ltd. v. Ford Motor Co. of Canada (2003), 13 Alta. L.R.(4th) 336; 2003 ABQB 298, refd to. [para. 42].

Balm v. 3512061 Canada Ltd. et al. (2003), 327 A.R. 149; 296 W.A.C. 149; 14 Alta. L.R.(4th) 221; 2003 ABCA 98, refd to. [para. 42].

Milfive Investments Ltd. et al. v. Sefel et al. (1998), 216 A.R. 196; 175 W.A.C. 196 (C.A.), refd to. [para. 42].

Hunter Financial Group Ltd. et al. v. Maritime Life Assurance Co. (2007), 428 A.R. 150; 75 Alta. L.R.(4th) 165; 2007 ABQB 263, refd to. [para. 42].

C.H.S. et al. v. Director of Child Welfare (Alta.) (2006), 403 A.R. 103; 2006 ABQB 528, affd. (2006), 401 A.R. 215; 391 W.A.C. 215; 2006 ABCA 355, refd to. [para. 43].

Canada Deposit Insurance Corp. v. Canadian Commercial Bank (2000), 269 A.R. 49; 82 Alta. L.R.(3d) 382; 2000 ABQB 440, refd to. [para. 44].

Foda v. Capital Health Region et al., [2007] A.R. Uned. 345; 160 A.C.W.S.(3d) 442; 2007 ABCA 207, refd to. [para. 44].

Devon Canada Corp. v. TransCanada Power Services Ltd. et al., [2007] A.R. Uned. 384; 160 A.C.W.S.(3d) 440; 2007 ABQB 479, refd to. [para. 44].

Mikisew Cree First Nation v. Canada et al. (2002), 303 A.R. 43; 273 W.A.C. 43; 2002 ABCA 110; 2002 ABCA 150, refd to. [para. 47].

Milne v. Columbia Health Centre Inc. et al. (2005), 383 A.R. 252; 2005 ABQB 594, refd to. [para. 49].

Madill v. Alexander Consulting Group Ltd. et al. (1999), 237 A.R. 307; 197 W.A.C. 307; 176 D.L.R.(4th) 309; 1999 ABCA 231, refd to. [para. 50].

Peter v. Beblow, [1993] 1 S.C.R. 980; 150 N.R. 1; 23 B.C.A.C. 81; 39 W.A.C. 81, refd to. [para. 58].

Becker v. Pettkus, [1980] 2 S.C.R. 834; 34 N.R. 384, refd to. [para. 58].

Pacific National Investments Ltd. v. Victoria (City), [2004] 3 S.C.R. 575; 327 N.R. 100; 206 B.C.A.C. 99; 338 W.A.C. 99; 2004 SCC 75, refd to. [para. 58].

624250 Alberta Ltd. v. Acklands-Grainger Inc. et al., [2002] A.R. Uned. 293; 3 Alta. L.R.(4th) 73; 2002 ABQB 533, refd to. [para. 58].

Reid v. Ford Motor Co. et al., [2006] B.C.T.C. 712; 149 A.C.W.S.(3d) 804; 2006 BCSC 712, refd to. [para. 60].

Peel (Regional Municipality) v. Ontario, [1992] 3 S.C.R. 762; 144 N.R. 1; 59 O.A.C. 81, refd to. [para. 60].

Boulanger v. Johnson & Johnson Corp. et al. (2003), 174 O.A.C. 44 (C.A.), refd to. [para. 60].

Garland v. Consumers' Gas Co., [2004] 1 S.C.R. 629; 319 N.R. 38; 186 O.A.C. 128; 2004 SCC 25, refd to. [para. 62].

Harris v. Nugent et al. (1996), 193 A.R. 113; 135 W.A.C. 113; 141 D.L.R.(4th) 410 (C.A.), refd to. [para. 62].

Harris v. Cinabar Enterprises Ltd. et al. - see Harris v. Nugent et al.

Sethi v. Dawnne, [2002] A.R. Uned. 409; 10 Alta. L.R.(4th) 294; 2002 ABQB 736, refd to. [para. 67]. Hill v. Church of Scientology of Toronto and Manning, [1995] 2 S.C.R. 1130; 184 N.R. 1; 84 O.A.C. 1, refd to. [para. 86].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201, refd to. [para. 87].

Vorvis v. Insurance Corp. of British Columbia, [1989] 1 S.C.R. 1085; 94 N.R. 321, refd to. [para. 87].

Authors and Works Noticed:

Fridman, Gerald Henry Louis, The Law of Contract in Canada (5th Ed. 2006), p. 287 [para. 67].

Counsel:

Jay L. Bowen (Duncan & Craig LLP), for the plaintiffs;

Alex Kotkas (Fasken Martineau DuMoulin LLP), for the defendants.

This action was heard on February 4, 2009, by Gill, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for judgment on April 9, 2009.