Canada: Agricultural Law Netletter - Issue 391 - Wednesday, March 7, 2018

HIGHLIGHTS

* A Justice of the Quebec Superior Court has granted a Quebec beekeeper the authority to commence a class action on behalf of Quebec beekeepers against Bayer CropScience Inc., Syngenta Canada Inc., and related corporations for damages resulting from honeybee deaths, arising from the alleged negligent manufacture and sale of neonicotinoid pesticides in Quebec. It was acknowledged during the Court proceedings that neonicotinoids may be toxic to bees. (Martineau v. Bayer CropScience Inc., CALN/2018-007, [2018] Q.J. No. 1148, Quebec Superior Court)

* A Justice of the Saskatchewan Court of Queen's Bench has dismissed an application by two farmers for permission to continue to use seized farm equipment for the purpose of seeding their crops during the 2018 seeding season. The Court considers case law with respect to the Court's discretion under s. 53 of the Saskatchewan Farm Security Act to make any order the "court considers just" involving the postponement of the return of seized equipment to a secured party. Following an analysis of the farmers' proposals, the Court concluded that none of their proposals presented a realistic plan for the payment of debts claimed by the lessor of a seized seed drill and cart. (Petryshyn v. National Leasing Group Inc., CALN/2018-008, [2018] S.J. No. 5, Saskatchewan Court of Queen's Bench)

NEW CASE LAW

Martineau v. Bayer CropScience Inc.;

CALN/2018-007,

Full text: [2018] Q.J. No. 1148;

2018 QCCS 634,

Quebec Superior Court,

The Honourable Thomas M. Davis J.S.C.,

February20, 2018.

Class Actions -- Pesticides -- Damages for Death Loss in Honeybees.

Steve Martineau ("Martineau") a Quebec bee breeder, applied to the Quebec Superior Court for an Order authorizing a class action against Bayer CropScience Inc., Bayer Inc., Bayer CropScience AG ("Bayer") and Sygenta Canada Inc. and Syngenta International Inc. ("Syngenta").

Martineau alleged that Bayer and Syngenta were negligent in the manufacture and sale of neonicotinoids in Quebec, were responsible for damages that he and other class members suffered under Article 1457 of the Quebec Civil Code.

Neonicotinoids are also known as imidacloprid, clothianidin and thiamethoxam, and are members of the neonicotinoids class of broad spectrum insecticides.

Martineau alleged significant losses in his bee population beginning in 2006, most significantly in the month of June.

Martineau had samples of water and dead bees from his hives analyzed and found that they contained neonicotinoids. He alleged he had suffered losses of up to $20,000.00 per year from neonicotinoids from 2006 to present.

Martineau proposed a class consisting of all persons in Quebec who owned bees in the affected area after 2006.

It was acknowledged that neonicotinoids may be toxic to bees [para. 24 to 30], however Bayer and Syngenta challenged the application on a number of grounds including the assumption that they had manufactured the neonicotinoids which killed Martineau's bees.

Decision: Davis, JSC granted Martineau's application for authorization the bringing of a class action on behalf of all persons in Quebec who own or owned bees in the affected area during the class [at para. 90 to 92] and identified several principle questions of fact and law for the proceeding [at para. 93] including the following:

(a) Can any neonicotinoid based pest control products researched, designed, developed, manufactured, marketed, distributed and sold by Bayer CropScience AG and/or Bayer CropScience Inc. and/or Bayer Inc. in Quebec during the class period (i.e. imidacloprid, clothianidin and their related end- use products approved for agricultural use) cause honeybee colony loss resulting in financial damages or losses to beekeepers?

(b) Can any neonicotinoid based pest control product researched, designed, developed, manufactured, marketed, distributed and sold by Syngenta International AG and/or Syngenta Canada Inc. in Quebec during the class period (i.e. thiamethoxam and its related end-use products approved for agricultural use) cause honeybee colony loss resulting in financial damages or losses to beekeepers.

Davis, JSC considered a number of issues with respect to whether or not a class action could be authorized under Article 575(1) to (4) at para. 21 to 75 of his decision.

Petryshyn v. National Leasing Group Inc.;

CALN/2018-008,

Full text: [2018] S.J. No. 5;

2018 SKQB 5,

Saskatchewan Court of Queen's Bench,

R.W. Elson J.,

January 3, 2018.

Seizure of Farm Equipment -- Saskatchewan Farm Security Act -- Application for Postponement of Removal.

Greg Petryshyn and Pearl Petryshyn ("Petryshyns"), who were Saskatchewan farmers, applied to the Saskatchewan Court of Queen's Bench for a hearing pursuant to s. 50 of the Saskatchewan Farm Security Act, SS 1988-89, c S-17.1 (the "Act") after the National Leasing Group Inc. ("National Leasing") served notice on the Petryshyns of its intent to take possession of the following farm implements which National Leasing had leased to the Petryshyns:

  1. A 2014 Brent grain cart on which there were lease payment arrears of $39,950.40 and a total amount outstanding of $168,741.00, having a value estimated by National Leasing of $110,000.00.
  2. A 2016 Seed Hawk air drill and a 2016 Seed Hawk cart, on which there were lease arrears of $33,640.00 and a total amount outstanding of $488,474.00, having a value estimated by National Leasing of $100,000.00.

The Petryshyns did not oppose National Leasing's claim for the return of the Brent grain cart, but did oppose the application for the return of the Seed Hawk air drill and cart pursuant to s. 50 of the Act, and in accordance with the provisions of s. 53 of the Act, which provides, in part, as follows:

53(1) On the hearing of an application made pursuant to section 50, the court may make any orders that it considers just.

(2) Without limiting the generality of subsection (1), the court may:

  1. order delivery of the implement to the secured party, subject to any conditions that the court considers just; or
  2. order delivery of the implement to the secured party and postpone the operation of the order:
  1. on condition that the farmer pays to the secured party any amount that the court considers just; or
  2. subject to fulfillment of any conditions by the farmer, other than that described in subclause (i), that the court considers just.

The Petryshyns opposed the return of the Seed Hawk air drill and cart because they required this equipment at least to the summer of 2018 so that they could seed their crop for 2018.

The Petryshyns farmed one quarter of land and indicated that if they were able to use the air drill and cart, they hoped they would be able to rent additional farmland. They challenged National Leasing's valuation of the Seed Hawk air drill and cart, and proposed that the value was closer to $390,000.00. They also indicated that they believed they would be able to sell the equipment by auction for more than $100,000.00 in the hope of avoiding responsibility for a significant shortfall.

The Petryshyns' Affidavits indicated they were involved in two legal proceedings in which they claimed and hoped to recover funds from third parties.

Decision: Elson, J dismissed the Petryshyns' application and directed that they deliver the Seed Hawk air drill and cart to National Leasing, but postponed the operation of the Order to April 30, 2018 to give them an opportunity to make their best efforts to find a purchaser for the equipment [at para. 33].

Elson, J quoted [at para. 22] the frequently cited decision of Lanal Farms Ltd. v Bank of Montreal (1989), [1989] S.J. No. 622 (SK QB), 81 Sask R 162 (WL) (Sask QB) in which Hrabinsky J discussed the scope of s. 53. Elson, J then summarized the factors Courts may consider in determining its discretion to make orders "it considers just" [at para. 23], stating as follows:

[23] As reflected in s. 53(1), the court has broad discretion to "make any orders that it considers just". As Mills J. observed in Bartko v Odnokon Holdings Ltd., [2012] S.J. No. 408,2012 SKQB 262, 400 Sask R 200 [Bartko] the practical significance of this is that the court must compare the equities of the parties and then exercise its discretion either to: 1) order the farmer to deliver the farm equipment to the secured party immediately; or 2) postpone delivery for a specified period of time on conditions involving payment or other conditions that the court deems just. Mills J. went on to identify, at paras. 3 and 4, the equitable considerations a court typically considers in deciding the appropriate order under s. 53(2):

3 Equitable considerations that are normally examined include:

  1. the amount outstanding under the lease agreement;
  2. the amount of continuing payments required pursuant to the agreement;
  3. whether the lease agreement has expired;
  4. whether the lease agreement includes an option to purchase the equipment at a determinable price;
  5. the payment history of the farmer, including the date of and amount of the last payment made;
  6. the fair market value of the equipment;
  7. the time of year the application is made in relation to the nature of the equipment for which possession is sought (for example, equitable considerations are stronger in favour of a farmer who seeks to retain possession of a combine for the purpose of an immediate harvest as opposed to retaining possession after harvest is completed);
  8. the time of year for which sales of the farm equipment would normally be held;
  9. the prospects the farmer has for becoming current under the lease agreement; and/or
  10. factors outside of the control of the farmer that may have led to the default occurring (for example, serious personal injury or death of a principal member of the farming operation, or catastrophes impacting upon the profitability of the farm).

4 There are likely other considerations that will arise. The point of the previous comment is to emphasize the wide type of considerations the Court is entitled to view in coming to a just determination.

Elson, J also referred to the decision of MFI Ag Services Ltd. v Farm Credit Canada, [2015] S.J. No. 643, 2015 SKQB 379 before concluding, at para. 27 to 29 as follows:

[27]The authorities cited above illustrate that a "just" order under s. 53 is one that strikes a fair balance between the interest of farmers, who seek temporary relief from their default on secured debts, and the interests of the creditors who hold the security on those debts. While s. 53 permits courts to make orders that depart from the formal arrangements between farmers and creditors, it does not demand that relief be granted whenever requested.Moreover, the court's power under s. 53 does not extend to making orders that are manifestly unfair to the interests of secured creditors.

[28] The relief available under s. 53 is, at most, temporary. Where relief is granted, it is designed to serve as a stopgap measure to accommodate a short term hardship or inability to pay. The indebtedness, as well as the interest that secures it, continues. With it there continues the expectation that, with or without relief, the debt will be paid or the secured creditor will act on its security. In my view, this analysis is consistent with the non-exhaustive list of equitable considerations enumerated in Bartko. Where an application has been made, the court inquires into these considerations, determine the circumstances that led to the default and then assesses whether the evidence presents a fair and realistic plan for satisfaction of the debt without undue prejudice to the interests of the secured creditor.

[29] In my view, none of the applicants' proposals present a realistic plan for the payment of this debt. Dealing first with their farm operations, there is no meaningful evidence that, in 2018, the applications will be able to farm any more land than the single quarter section that they still possess. Despite their expression of hope in this respect, there is no evidence that this hope would be any more realizable in 2018 than the hope that went unrealized in 2017.

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