A Justice of the Saskatchewan Court of Queen's Bench has
dismissed an application for summary judgment by an agricultural
co-operative seeking to recover debt for poultry feed supplied to
one of its members. The Court concluded that there was a genuine
issue to be tried based on the co-operative's membership
applications, credit agreement and documents which, among other
things, described the co-operative as a supplier of pooled products
and which claimed a security interest in product which it sold to
its members. Invoices issued by the feed wholesaler were directed
to the co-operative, rather than the poultry farmer who received
the feed. [Editor's Note: Cooperatives are reasonably common in
the agricultural community. They often act as a suppliers of
inventory (such as livestock), farm inputs (such as feed) and
financial services. Cooperatives which provide loans or credit must
be careful to ensure that their security, loan and member documents
clearly exclude liability for claims of this nature.]. (Prairie
Feed Co-Operative Ltd. v. Stilborn, CALN/2015-002,  S.J. No.
765, Saskatchewan Court of Queen's Bench)
NEW CASE LAW
Prairie Feed Co-Operative Ltd. v. Stilborn; CALN/2015-002,
Full text:  S.J. No. 765; 2014 SKQB 428, Saskatchewan Court
of Queen's Bench, B. Scherman J., December 31, 2014.
Cooperatives -- Liability to Members for the Supply of Defective
Prairie Feed Co-operative Ltd. ("Prairie Feed")
applied to the Saskatchewan Court of Queen's Bench for summary
judgment for the balance claimed by it against Lloyd Stilborn and
Joy Stilborn (the "Stilborns") for poultry feed provided
to the Stilborns through a third party supplier, Federated
Co-operatives Limited ("Federated").
The Stilborns argued that the poultry feed they received was
Prairie Feed took the position that matters of the quality of
feed were solely between the Stilborns and Federated, and that
Prairie Feed only acted as a financier or credit provider for the
Stilborns to purchase the feed from Federated.
Decision: Scherman, J. [at para. 12] dismissed the application
for summary judgment.
Scherman, J. observed there were a number of matters in evidence
which supported the proposition that there was a genuine issue as
to whether Prairie Feed was both a supplier of product and credit
[at para. 9] including the following:
There was no express statement in neither the application for
membership in Prairie Feed, or the credit application which
stipulates that credit was being applied for to finance purchases
from third party suppliers. Rather, the credit agreement expressly
proved that Prairie Feed was being granted a "security
interest in any and all merchandise purchased from the
A signed credit policy document indicated that members had the
ability to pay for credit through VISA and Mastercard which was in
some respects not consistent with Prairie Feed's argument that
credit was being provided as a lender.
The invoices issued for product from Federated were addressed
to Prairie Feed rather than the Stilborns, which supported the
argument that Prairie Feed was re-selling the same product to its
Correspondence sent by the manager and sole employee of Prairie
Feed described it as an "independent retail co-op buying
The Court concluded [at para. 10] as follows:
" While PFCL may have no
involvement in the manufacture and delivery of the feed, that does
not mean that they did not purchase the feed and resell it to the
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Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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