Canada: Agricultural Law Netletter - Thursday, February 7, 2019 - Issue 412


  • A Justice of the Ontario Superior Court of Justice has struck out a proposed class action commenced by an Ontario corn farmer against Syngenta Canada Inc. and Syngenta AG for damages sustained by the plaintiff and other Canadian corn producers for depressed corn prices in 2013 and 2014 which allegedly resulted from China's rejection of North American corn containing genetically modified traits developed by Syngenta which had been approved for use in Canada and the United States in 2010 and 2011. It was alleged that the corn was commercialized prematurely because China had not yet approved it; that Syngenta owed a duty of care to prevent the genetically modified corn from being co-mingled with other corn, and that Syngenta had misled North American producers with respect to the timing and substance of its import approval in China. Although a similar application to strike an action commenced in the United States had been dismissed, the Court struck the Canadian class action as it did not meet the criteria for a claim to recover pure economic loss. (Darmar Farms Inc. v. Syngenta Canada Inc., CALN/2019-003, [2018] O.J. No. 6254, Ontario Superior Court of Justice)


Darmar Farms Inc. v. Syngenta Canada Inc.;

Ontario SuperiorCourt of Justice,

H.A. Rady J.,

November 28,2018.


Full Text: [2018] O.J. No. 6254 | 2018 ONSC 7129

Class Action for Damages Sustained by Producers as a Result of Co-Mingling of Genetically Modified Products — Pure Economic Loss.

Darmar Farms Inc. ("Darmar Farms") commenced a proposed class action against Syngenta Canada and Syngenta AG ("Syngenta").

Darmar Farms is an Ontario corporation which had planted corn in 2013, 2014 and 2015.

Syngenta is a global agri-business headquartered in Switzerland with a subsidiary in Ontario. Syngenta developed two genetically modified corn seeds containing a genetic trait known as MIR 162 and marketed as "Agrisure Viptera" and "Agrisure Duracade".

Agrisure Viptera was approved for use in Canada and the United States in 2010. Agrisure Duracade was released in 2013, 2014 and 2015. North American corn prices fell when China rejected shipments of North American corn in 2013 and 2014 after it discovered some shipments contained Agrisure.

Darmar Farms (which had never planted Agrisure) alleged that a glut in the domestic corn supply resulted from China's rejection of North American corn and that Syngenta was responsible for depressed prices which resulted from this glut, and the economic loss which sustained as a result.

The Plaintiff's claim was based in negligence and for breach of the Competition Act.

A parallel action was commenced in the United States which survived a motion for summary dismissal. The U.S. action had apparently been settled however Syngenta alleged there was no evidence of any settlement in the materials filed with the Court.

Three essential negligence claims were advanced:

(a) That Syngenta owed and breached a duty to not commercialize Agrisure in the North American market prior to receiving import approval from China (the "Premature Commercialization Plan");

(b) That Syngenta owed and breached a duty to prevent the co-mingling of Agrisure corn with the corn grown by other farmers and and industry stakeholds (the "Co-Mingling Claim");

(c) That Syngenta owed and breached the duty not to mislead the Plaintiff and other farmers about the timing and substance of its application for import approval to China in order to prevent the co-mingling of Agrisure with other North American corn bound for export to China (the "Negligence Misrepresentation Claim").

Syngenta applied under Ontario Rule 21 for an Order striking out the claim on the ground that it disclosed no reasonable cause of action or defence.

Decision: Rady, J granted Syngenta's application and struck Darmer Farms' claim at para. 88.

Rady, J summarized the law with respect to applications to strike claims under Rule 21 as follows [at para. 16]:

  1. a claim will not be struck unless it is plan and obvious it cannot succeed: Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959;
  2. the facts pleaded are to be assumed to be true unless they are patently ridiculous or incapable of proof: Prete v. Ontario (1993), 1993 CanLII 3386 (ON CA), 16 O.R. (3d) 161 (C.A.); Nash v. Ontario (1995), 1995 CanLII 2934 (ON CA), 27 O.R. (3d) 1 (C.A.);
  3. a claim must be read with a forgiving eye for drafting deficiencies: Doe v. Metropolitan Toronto (Municipality) (1990), 1990 CanLII 6611 (ON SC), 74 O.R. (2d) 225 (C.A.);
  4. the novelty of a cause of action is not determinative: Hunt, supra; Doe, supra; R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 (CanLII);
  5. the court is not precluded from striking a negligence claim simply because it asserts a novel duty of care. Whether such a duty of care exists is a question of law that is appropriately resolved on a Rule 21 motion: Syl Apps Secure Treatment Center v. B.D., 2007 SCC 38 (CanLII), [2007] 3 S.C.R. 83; and
  6. a critical analysis is required in order to prevent untenable claims from proceeding, particularly given scarce judicial resources and the challenges of systemic delay: Rayner v. McManus, 2017 ONSC 3044 (Div. Ct.) (CanLII).

Rady, J observed that the parties agreed that the claim is correctly characterized as one of pure economic loss and that [at para. 21] five distinct categories of pure economic loss claims have been recognized in Canada:

  1. negligent misrepresentation;
  2. negligence performance of a service;
  3. negligent supply of shoddy goods or structures;
  4. relational economic loss; and
  5. the independent liability of statutory public authorities.

Rady, J also observed that the existence of a duty of care in negligence causing economic loss turns on the two stage Anns/Cooper test which has been expressed as follows [at para. 24]:

  1. Is there a sufficiently close relationship between the parties so that, in the reasonable contemplation of the defendant, carelessness on its part might cause damage to the plainitff?
  2. If the answer is yes, are there any reasons that should limit or negate:
    1. the scope of the duty; and
    2. the class of persons to whom the duty is owed; or
    3. the damages that might arise?

Rady, J then reviewed the recent decision of the Supreme Court of Canada in Deloitte and Touche v. Livent Inc. (Receiver of), 2017 SCC 63 (CanLII) ("Livent") and summarized the Livent analysis at para. 39 as follows:

(i) proximity is to be evaluated before the reasonable forseeability of harm (Livent, para. 24);

(ii) the defendant's undertaking and the plaintiff's reasonable reliance drive the proximity analysis (Livent, para. 30);

(iii) the extent of the duty of care is informed by the purpose for which the defendant assumed responsibility (Livent, para. 31); and

(iv) the relationship of proximity is central to foreseeability (Livent, para. 34).

After considering the arguments of Darmar Farms and Syngenta, Rady, J concluded [at para. 71 to 74 and at para. 86 to 89] as follows:

[71] It is helpful here to set out in brief the essential facts pleaded in the statement of claim that are assumed true for the purposes of this motion:

  • the North American agricultural industry is interdependent and connected;
  • there is a shared responsibility among industry participants to exercise reasonable care respecting the commercialization of new biotechnology products;
  • co-mingling is inevitable;
  • approval by prospective buyers is necessary before co-mingled crops can be sold;
  • the plaintiff and class members are vulnerable if the defendants fail to obtain adequate approvals;
  • the defendants were warned by the industry not to introduce another MIR genetic triat without export market approvals;
  • the defendants undertook (or made a promissory representation) not to cause damage by introducing its product without necessary global approvals;
  • the defendants brought Agrisure to the North American market in 2011 knowing China would not approve Agrisure until later;
  • Agrisure contaminated the North American market and the defendants failed to take measures to prevent it; and
  • the defendants misled farmers about the importance of the Chinese market and the status of its approval of Agrisure for import and the plaintiff and class members relied upon their representations

[72] I have concluded that it is plain and obvious that the claim for relational damages cannot succeed. There is no economic loss that is consequent to physical damage to a third party, which is the foundation of the duty of care.

[73] In my view, the claim - read generously - is framed in only one previously recognized category of compensable economic loss, namely misrepresentation. The claim for premature commercialization is somewhat misleading or a misnomer in the sense that the plaintiff does not assert that the defendants could not market its product domestically as they saw fit. Rather, the allegation is that the defendants undertook not to do so unreasonably. The plaintiff emphasizes that the important point is that the regulatory process did not confer immunity if the defendants acted wrongfully. By failing to take reasonable steps to prevent it, Agrisure contaminated the plaintiff's non-Agrisure crop. This led to China's rejection of all Canadian corn, leading to economic losses in the domestic corn market.

[74] Although the claim is characterized as a misrepresentation claim and therefore, it falls within a recognized category of economic loss, it is necessary, by virtue of Livent, to carefully examine the basis of which a duty of care arises in the circumstances of these facts. As a result, the defendants' misrepresentation, undertaking, and the reasonableness of the plaintiff's reliance must be evaluated.

[86] If the plaintiff's argument is taken to its logical conclusion, Syngenta would necessarily be prevented from selling Agrisure in the domestic market, notwithstanding Canadian and American approvals. The only way to ensure that co-mingling and contamination did not occur would be to withhold the release of Agrisure to the North American market, a position the plaintiff explicitly disavows - as it must, given the outcome in Hoffman.

[87] Furthermore, if the plaintiff's position prevailed, I agree with the defendants that the importance of foreign import approvals would be elevated to a level of precedence over domestic approvals. The question would arise whether any foreign importer of a Canadian product must approve imports before the product could be marketed domestically. The answer must surely be no. If only large foreign markets are relevant, one must ask how that would be determined and by what decision maker. The potential for arbitrariness is self-evident.

[88] It is for this reason that I have concluded that it is plain and obvious that the claim cannot succeed. Amendments will not remedy the defects identified in these reasons. The motion is granted and the claim is dismissed

[89] These conclusions are equally dispositive of the Competition Act claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions