A commercial rabbit farmer found out that the implied warranty
of merchantability under Ontario's Sale of Goods Act
provides no protection where causation is not proven and the
contractual documents provided no basis to determine the acceptable
level of toxins and other contaminants in rabbit feed.
In Jones Feed Mills Ltd. v. Raivio,1 a
commercial rabbit farmer, Raivio, began purchasing standard rabbit
feed from a manufacturer and supplier of commercial animal feed,
Jones Feed Mills Ltd ("Jones Feed"). From May to August
2005, while using the standard mix provided by Jones Feed, Raivio
experienced an average of 21.7 dead rabbits per day. Then, in
August 2005, Raivio and Jones Feed entered into a Customer Formula
Feed Agreement whereby Jones Feed agreed to provide Raivio with
custom feed made according to specifications developed and provided
by Raivio. The Customer Formula Feed Agreement did not provide for
an acceptable level of toxins or other contaminants in the feed and
contained no express warranty of fitness or merchantability.
During the fall, while using the custom feed formula, Raivio
experienced high levels of mortality in his herd with 4,567 deaths
in September, 3,100 in October and 2,300 in November. Raivio
discontinued purchasing feed from Jones Feed in November 2005, and
refused to pay outstanding invoices for the feed. Jones Feed sued
Raivio, who counterclaimed on the basis that the feed was
contaminated with an increased level of mycotoxins resulting in
high levels of mortality in his herd, and that Jones Feed was
liable for negligence and/or breach of contract.
At trial, Raivio's expert did not persuade the trial judge
that the increased mortality rate in his herd was caused by an
increased level of mycotoxins in the custom feed supplied by Jones
Feed. Jones Feed's expert opined that it was difficult to
conclude that feed contamination caused the massive losses suffered
by the plaintiff, given findings from an experimental study on
rabbits that suggested that rabbits were less sensitive than other
species to mycotoxins. The trial judge noted that Raivio's
expert did not take into account the experimental study, even
though he was part of the advisory committee for the study, nor did
he provide a reply expert report to respond to Jones Feed's
expert report that considered the study. Moreover, on
cross-examination, Raivio's expert was forced to retreat from
his position that rabbits were "sensitive" to
With respect to the claim that Jones Feed breached the implied
condition of merchantability under Ontario's Sale of Goods
Act,2 Raivio argued that there were unacceptable
levels of mortality in the rabbit herd, and that alone demonstrated
that the feed was not merchantable. Given the Court's findings
with respect to causation, the Court rejected that argument.
In making this finding, the Court referred to a similar case,
Clarence Kloosterhof's Farm Services Ltd., v.
Longley,3 where the court held that there was a
breach of the implied warranty of merchantability under the
Sale of Goods Act because the feed was in excess of
Agriculture Canada's published tolerance level for vomitoxin.
This finding was made despite a lack of medical evidence
establishing a link between the impurities in the feed and problems
in the herd. In contrast, in Raivio there was no established
tolerance level for rabbit feed, so the implied condition of
merchantability was not breached.
This case illustrates the importance of ensuring that your
expert evidence can prove that the product caused the loss. Raivio
was not only unable to provide sufficient expert evidence to prove
the feed killed his rabbits, but in the absence of express
warranties setting out an acceptable level of toxins or other
contaminants in the feed, or a warranty of fitness, he had to pay
for the feed as well. We feel bad for the bunnies. HAPPY
1 2014 ONSC 4298, 2014 CarswellOnt 9979.
2 Given that there was no evidence that Raivio relied on
Jones Feed, Raivio did not pursue a claim for breach of the implied
warranty of fitness.
3 (2000) 186 N.S.R. (2d) 131 (N.S. S.C.)
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The recent decision of the Ontario Court of Appeal in BMW Financial Services Canada, a Division of BMW Canada Inc. v. McLean provides some useful insight into the relationship between automobile dealers and the financing arms of the manufacturers for whom those dealers are franchisees.
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