Moses et al. v. Agriculture Financial Services Corp. Appeal Committee, (2005) 375 A.R. 225 (QB)

• Judge: Ross, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: September 01, 2004
• Citations: (2005), 375 A.R. 225 (QB);2005 ABQB 88

Moses v. AFSC (2005), 375 A.R. 225 (QB)

MLB headnote and full text

Temp. Cite: [2005] A.R. TBEd. FE.072

In The Matter Of The Agriculture Financial Services Act, R.S.A. 2000, Chapter 1012;

In The Matter Of an Agriculture Financial Services Corporation Appeal Committee consisting of Aaron Falkenberg, Barry Holmes, Robert Rolf, Lawrence Luthe and Greg Rentz;

In The Matter Of an Agriculture Financial Services Corporation Appeal Committee decision issued June 24, 2003.

Gary Moses, Bent Kaastrup (Kristiansborg Farms Inc.), Bryan Harvard (Harvard Farms Ltd.), Michael Cole (M.T.M. Cole Farms Ltd.), Jack Tingley (Tingley Farms Ltd.), Leslie Mitchell (Mitchell Farms Ltd.), Doug West man and Murray West man (West man Farms), Rod Macmillan, John Sweeney (Grizzly Bear Farms), Robert Wilson, Greg Wilson, Brad Hines and Steve Myshuk, Robert Pickford, John Pickford and Dale Pickford, Glen Pederson, Knud Sorensen, Myron Sunderland (Sunderland Hog Farms Ltd.) (applicants) v. Agriculture Financial Services Corporation Appeal Committee (respondent)

(0314 00486; 2005 ABQB 88)

Indexed As: Moses et al. v. Agriculture Financial Services Corp. Appeal Committee

Alberta Court of Queen's Bench

Judicial District of St. Paul

Ross, J.

February 8, 2005.

Summary:

The applicants subscribed to the Agriculture Financial Services Corp.'s (AFSC) crop insurance policy. All the applicants chose the "Lack of Moisture" option under which no personalized coverage was offered and no on farm inspections were required to determine claim payments. Claims were triggered when annual moisture levels for eligible weather areas fell below 80% of normal. Drought conditions in 2002 were severe. The AFSC used the figures obtained by the Conservation and Development Branch of the Alberta Ministry of Agriculture, Food and Rural Development taken near the Rivercourse weather station, which had been chosen by all the applicants. The spring soil moisture level was set at "low". The applicants were compensated accordingly. The applicants appealed to the AFSC Appeal Committee. The Appeal Committee dismissed the appeal. The applicants applied for judicial review and raised the following issues: "(1) what is the proper interpretation of the insurance contract regarding the measurement of spring soil moisture; and (2) does the evidence support the Appeal Committee's conclusion that spring soil moisture for the Rivercourse weather station, measured as required by the terms of the insurance contract, was at a level of 50 mm [low]".

The Alberta Court of Queen's Bench allowed the application and remitted the matter to the Appeal Committee for reconsideration in accordance with these reasons.

Insurance - Topic 731

Insurers - Duties - To set out all terms and conditions of contract - The applicants applied for subscription to the Agriculture Financial Services Corp. (AFSC) crop insurance policy under the "Lack of Moisture" option - In 2002, drought conditions were severe - The AFSC used the figures obtained by the Conservation and Development Branch of the Alberta Ministry of Agriculture, Food and Rural Development taken near the Rivercourse weather station, which had been chosen by all the applicants - The spring soil moisture level was set at "low" - The applicants were compensated accordingly - The applicants appealed - The AFSC Appeal Committee dismissed the appeal - The applicants applied for judicial review - At issue was the proper interpretation of the insurance contract regarding the measurement of spring soil moisture - The applicants argued that the Appeal Committee should have interpreted only the "Cereal Silage Insurance Pilot Program" and the "Lack of Moisture Insurance Pilot Program", which indicated that the actual spring soil moisture levels would be taken "at" the selected weather station, because these were the only contractual documents forwarded to the applicants - The Alberta Court of Queen's Bench allowed the application and remitted the matter to the Appeal Committee for reconsideration - The Appeal Committee's erred in considering all of the documents alleged to be contract documents, regardless of when or whether the terms contained in these documents were brought to the actual or constructive notice of the Applicants - The Committee should have identified which documents or other forms of information were provided or brought to the attention of the Applicants by AFSC, and proceeded to interpret the contract terms as contained in those documents and that information, employing the contra proferentem principle if the terms so identified were ambiguous - See paragraphs 24 to 43.

Insurance - Topic 9605

Crop insurance - General and definitions - Crop plans - [See Insurance - Topic 731 ].

Insurance - Topic 9663

Crop insurance - The loss - Burden of proof - The applicants applied for subscription to the Agriculture Financial Services Corp. (AFSC) crop insurance policy under the "Lack of Moisture" option - In 2002, drought conditions were severe - The AFSC used the figures obtained by the Conservation and Development Branch of the Alberta Ministry of Agriculture, Food and Rural Development taken near the Rivercourse weather station, which had been chosen by all the applicants - The spring soil moisture level was set at "low" - The applicants were compensated accordingly - The applicants appealed - The AFSC Appeal Committee dismissed the appeal - The applicants applied for judicial review - At issue was whether the evidence supported the Appeal Committee's conclusions that spring soil moisture for the Rivercourse weather station, measured according to the terms of the insurance contract, was at a level of 50 mm (low) - The Alberta Court of Queen's Bench allowed the application and remitted the matter to the Appeal Committee for reconsideration - The court held that "based on policy considerations and having regard to the special knowledge of AFSC, a departure from the usual burden of proof is warranted. AFSC should have the burden of adducing evidence of the level of spring soil moisture level at the Rivercourse station, and the consequences of a failure to provide a threshold level of evidence should rest on AFSC, not the Applicants" - See paragraphs 46 to 61.

Trade Regulation - Topic 3163

Agricultural lending - Boards - Decisions - Judicial review or appeal - Scope of review - The applicants applied for subscription to the Agriculture Financial Services Corp. (AFSC) crop insurance policy under the "Lack of Moisture" option - In 2002, drought conditions were severe - The AFSC used the figures obtained by the Conservation and Development Branch of the Alberta Ministry of Agriculture, Food and Rural Development taken near the Rivercourse weather station, which had been chosen by all the applicants - The spring soil moisture level was set at "low" - The applicants were compensated accordingly - The applicants appealed - The AFSC Appeal Committee dismissed the appeal - The applicants applied for judicial review - The Alberta Court of Queen's Bench discussed the presence of a privative clause; the Appeal Committee's expertise in questions of fact; the purpose of the Agriculture Financial Services Act to establish a corporation to provide financial lending and insurance; and the nature of the problem which involved two issues, an issue of law and a question of fact - Accordingly, the court held that the appropriate standard of review was reasonableness - See paragraphs 8 to 17.

Cases Noticed:

Skyline Roofing Ltd. v. Workers' Compensation Board (Alta.) et al. (2001), 292 A.R. 86; 2001 ABQB 624, refd to. [para. 2].

Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, addendum [1998] 1 S.C.R. 1222; 226 N.R. 201, refd to. [para. 8].

Pasiechnyk et al. v. Procrane Inc. et al., [1997] 2 S.C.R. 890; 216 N.R. 1; 158 Sask.R. 81; 153 W.A.C. 81, refd to. [para. 10].

Good v. Agriculture Financial Services Corp. et al., [1999] A.R. Uned. 301; 1999 ABQB 428, refd to. [para. 17].

Dr. Q., Re, [2003] 1 S.C.R. 226; 302 N.R. 34; 179 B.C.A.C. 170; 295 W.A.C. 170, refd to. [para. 17].

National Bank of Canada v. Co-operators General Insurance Co. (1988), 90 A.R. 295 (C.A.), refd to. [para. 23].

Davies v. Zurich Life Insurance Co. of Canada, [1981] 2 S.C.R. 670; 39 N.R. 457, refd to. [para. 27].

Allen v. Metropolitan Life Insurance Co. (1965), 208 A. 2d 638, refd to. [para. 27].

Rainer v. Primerica Life Insurance Co. of Canada (2003), 299 A.R. 306; 266 W.A.C. 306; 2002 ABCA 50, refd to. [para. 28].

Crosby Estate v. Native Fishing Association (2001), 149 B.C.A.C. 147; 244 W.A.C. 147; 2001 BCCA 118, refd to. [para. 32].

Kerr v. Horseman's Benevolent & Protective Association, [1981] I.L.R. 1-1394 (B.C. Co. Ct.), refd to. [para. 34].

Atchison v. Manufacturers Life Insurance Co. et al. (2002), 332 A.R. 72; 2002 ABQB 1121, refd to. [para. 35].

Mahony v. Waterford Limerick and Western R.W. Co., [1900] 2 I.R. 273, refd to. [para. 56].

Pleet v. Canadian Northern Quebec Railway Co. (1921), 50 O.L.R. 223 (C.A.), refd to. [para. 56].

Snell v. Farrell, [1990] 2 S.C.R. 311; 110 N.R. 200; 107 N.B.R.(2d) 94; 267 A.P.R. 94, refd to. [para. 57].

Authors and Works Noticed:

MacGillivray, Insurance Law (10th Ed. 2003), p. 481 [para. 54].

Sopinka, John, Lederman, Sidney N., and Bryant, Alan W., The Law of Evidence in Canada (1992), p. 56 [para. 55].

Counsel:

Jeremy C. Wakefield (Bennett Fox Wakefield), for the applicants;

D. Bruce Hepburn, for the respondent.

This application was heard on September 1, 2004, before Ross, J., of the Alberta Court of Queen's Bench, Judicial District of St. Paul, who delivered the following memorandum of decision on February 8, 2005.