Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West
Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 Stone Road West
Guelph, Ontario, N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: AFRAAT@ontario.ca
Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Courriel: AFRAAT@ontario.ca
AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL
APPEAL:
Van Beek v Wood’s Dairy Source (RE)
Van Beek v Wood’s Dairy Source
STATUTE:
HEARING:
May 21-22, 2019
July 9, 2019
001VanBeek18
NEUTRAL CITATION:
2019 ONAFRAAT 14
IN THE MATTER OF THE FARM IMPLEMENTS ACT
AND IN THE MATTER OF: An Application to the Agriculture, Food and Rural Affairs Appeal Tribunal (Tribunal) by Johan and Herma van Beek, of Norwood, Ontario, under Sections 10, 11, 12, 13, 21, 22, 31, and 33 of the Farm Implements Act in a dispute with Wood’s Dairy Source, Keene, Ontario concerning a turn-key installation of a new milk dairy parlour.
Before:
John O’Kane, Vice-Chair, Tricia Schouten, Vice-Chair, Maurice Janisse, Member
Appearances:
Herma van Beek, Applicant
Niels van Beek
James Tausendfreund, counsel for the Respondents
Troy Wood, Respondent, owner of Wood’s Dairy Source
George Wood
Brian Morton
DECISION OF THE TRIBUNAL
Overview
Johan and Herma van Beek’s family farming business Wellsfarm operates a dairy herd in Norwood.
In 2013, the van Beeks constructed a new barn to expand their dairy herd and hired a local farm equipment dealer, Wood’s Dairy Source, to install a milking parlour, plumbing system, stabling and manure handling equipment (collectively the “Equipment”) in the new barn.
On moving the dairy herd from the old tie-stall barn into the new barn after installation of the Equipment, the van Beeks experienced several issues with the equipment and latterly experienced issues related to mastitis within the dairy herd and elevated somatic cell counts in the milk.
Those issues are the subject of the van Beeks’ application to the Tribunal under the Farm Implements Act, R.S.O. 1990, Chapter F.4 (the “Act”) where they sought an order that Wood’s Dairy Source compensate them for $150,000.00.
The van Beeks’ application is dismissed.
The Tribunal determined the van Beeks' application on a narrow legal issue related to a Release document signed by Herma van Beek and Troy Wood which in these circumstances determines all the issues in favour of Wood’s Dairy Source. The Tribunal has analysed the balance of the Van Beeks’ issues below to assist the Court in the event an appeal is filed and the Court determines the Tribunal’s conclusions about the Release are wrong.
The Farm Implements Act
The scheme of the Act imposes a regulated structure on contract relationships between farm implement manufacturers and dealers and on contract relationships between farm implement dealers and purchasers of farm implements.
That Act leaves intact parties’ common law contract rights but supplements certain of those rights with legislated minimums. For example, under section 10 of the Act, a farm implement sale agreement must be in writing and must contain the information prescribed in sub-sections 10(1)(a) to (h). As a further example, under section 11 of the Act, the prescribed minimum warranty standards for farm implements are established. The warranty relevant to the equipment purchased by the van Beeks is one year from delivery under paragraph 3 of section 14(1) of the Act. Under the Act, it is open to parties to contract for warranties of greater duration.
Section 6 of the Act creates a dispute resolution process that authorizes the Director, an appointee of the Minister of Agriculture, Food and Rural Affairs, to inquire into and attempt to resolve disputes regarding any matter arising from applying the Act or regulations. The Director’s dispute resolution authority can be engaged “on the request of a purchaser ….” of a farm implement. A farm implement is defined to include any equipment or machinery designed and used for agricultural use. The legislated dispute resolution process begins with mediation and when mediation fails, any party to the dispute may then “apply to the Tribunal for a hearing”.
The Tribunal’s authority is to “decide the issue that is before it for a hearing” and an appeal lies from the Tribunal’s decision to the Divisional Court on a question of law.
The van Beeks’ Application Issues
- Summary Disposition of Issues under Sections 10, 11, 12, 31 of the Act
The van Beeks pleaded under section 10 which section requires the sale agreement be in writing and contain prescribed elements. The evidence of Troy Wood and Herma van Beek aligned that the sale agreement was in writing, and the panel finds this as a fact. However, none of the eight prescribed elements of subsection 10(1) became issues in the hearing.
The van Beeks pleaded under section 11 which section stipulates when a sale agreement is effective. The evidence of Troy Wood and Herma van Beek aligned that at latest, the delivery of the equipment was completed by April 23, 2014. Accordingly, there is no issue remaining for resolution about the effective date of the sale agreement.
The van Beeks pleaded under section 12 which section requires that for sale agreements for powered farm implements, the implement’s horsepower must be set out in the sale agreement. On the evidence before the panel, the farm implement or equipment in issue was stabling equipment, a milking parlour and manure handling equipment and there was no issue about the sale agreement not referencing horsepower.
The van Beeks pleaded under section 31 which section prohibits alteration of serial numbers and prohibits equipment dealers from selling implements unless they comply with safety standards. While this was pleaded there was no evidence called about this issue. The van Beeks did cross-examine Troy Wood who confirmed that certain of the equipment was installed by unlicenced technicians, but that is not what section 31 is about.
- Disposition of issues under Sections 13, 21, 22 and 33 of the Act
The van Beeks hired Wood’s Dairy Source to supply and install the milking parlour in their new dairy barn and the associated cooling and plumbing equipment, stabling fixtures and equipment and the manure handling equipment. The van Beeks understood the new equipment and systems were to be a “turn-key” operation. The evidence of Herma van Beek and Troy Wood aligned on this, and the panel finds this as a fact.
Wood’s Dairy Source provided written estimates or quotes that originally totalled $430,940.01 inclusive of HST. That original contract amount was later revised downward by agreement to $420,770.01 to reflect about $10,000 of work completed by forces other than Wood’s Dairy Source. The evidence of Herma van Beek and Troy Wood aligned on this, and the panel finds this as a fact.
The van Beeks paid all but $20,000 of that $420,770.01 amount in four draw payments to Wood’s Dairy Source between April 2013 and August 2013. The evidence of Herma van Beek and Troy Wood aligned on this, and the panel finds this as a fact.
Wood’s Dairy Source started their work in August 2013. The van Beeks moved their dairy herd from the old tie-stall barn into the new milking parlour barn in April 2014. The evidence of Herma van Beek and Troy Wood aligned on this, and the panel finds this as a fact.
Troy Wood testified that Wood’s Dairy Source contract documents contain a warranty clause that the equipment carries a twelve-month warranty. This evidence was not contradicted or challenged by the van Beeks. The panel finds as a fact that the contractual warranty period was twelve months. That twelve-month warranty period coincides with the statutory warranty period set out in the Act. The twelve-month warranty period began in April 2014.
In February 2014, the van Beeks purchased a Piccus Straw Chopper for $25,000 inclusive of tax from Wood’s Dairy Source. That farm implement is used to deliver chopped straw to the stalls for the cows to sleep and because the straw is chopped into small pieces, the used straw, mixed with the cows’ manure, can be conveyed out of the barn by the manure handling equipment. That farm implement purchase was a separate contract from the dairy barn equipment. The van Beeks took delivery of that farm implement in February 2014 and Wood’s Dairy Source invoiced the van Beeks for $25,000 inclusive of tax. The van Beeks did not pay that invoice. The evidence of Herma van Beek and Troy Wood aligned on this, and the panel finds this as a fact. There was no warranty issue related to the straw chopper. The issue related to the non-payment of the invoice for the straw chopper.
Herma van Beek testified about several issues arising beginning in April 2014 when they moved the dairy herd into the new milking parlour. Those issues included:
No computer was delivered
Computer monitor screens were installed backwards
Wood’s tri-scan test did not test with the milking machines on the herd
Incorrect milker claws delivered
Milker sucking air
Cows developing mastitis
Wash lines leaked
Repeated milk cooling system issues
Cow head gates malfunctioned
Stable pen pipes fell
Stable exit gates malfunctioned
Magnetic switches on the parlour swing arms failed
Stable mats needed to be anchored to the barn floor
Manure handling system issues
Coinciding approximately with the move of the dairy herd to the new milking parlour was a spike in the somatic cell count in the herd’s milk. Herma van Beek testified that they spent significant time dealing with the mastitis for which 70% of the herd received multiple treatments. She explained how they struggled to keep below the penalty levels for somatic cell counts established by Dairy Farmers of Ontario, the provincial milk production regulator. She testified that they investigated causes for the herd mastitis. This evidence was not contradicted by Wood’s Dairy Source. This evidence was not successfully shaken nor challenged by Wood’s Dairy Source. In the result, the panel finds these as fact.
A. The Herd Health Issue (Mastitis & Elevated Somatic Cell Counts)
For both parties this issue is the most significant issue in this application.
The significance for the van Beeks is Wellsfarm has a long and successful reputation as a dairy farm producing high-quality milk. Wellsfarm has received awards for its milk quality. When somatic cell count levels increase to a regulated level, the Dairy Farmers of Ontario penalizes the associated dairy farm. When milk becomes so compromised because of health issues with cows, it cannot enter the food supply and, sometimes, must be dumped resulting in the farmer receiving no compensation for the milk.
The significance for Wood’s Dairy Source is its reputation as a farm equipment dealer to dairy farms. It could be reputationally damaging if its equipment or set up was implicated in adverse dairy herd health.
Both parties hired experts in veterinarian medicine to provide expert reports. By agreement, both parties agreed to the expert qualifications of the other’s expert veterinarian. By agreement, both parties agreed to file the experts’ reports, without the need to call the experts to give oral evidence. By agreement, both parties waived their right to cross-examine the expert veterinarians on their qualifications and on the substance of their respective reports.
The van Beeks’ expert veterinarian, Dr. R. Walsh, concluded that the quantification of the expense/loss to the van Beeks due to mastitis and elevated somatic cell count after moving into the new milking parlour barn from April 2014 to December 31, 2015 totalled from $71,155 to $112,472. Dr. Walsh was only instructed to prepare a loss quantification analysis. Dr. Walsh was not instructed to address causation of the mastitis or the elevated somatic cell counts, and his report does not address causation for the decline in herd health or the decline in milk quality.
Wood’s Dairy Source’s expert veterinarian, Dr. M. Thomas, did not contradict or challenge Dr. R. Walsh’s conclusions about the quantification of the expense/loss due to mastitis and elevated somatic cell count. Dr. M. Thomas’ report points out that causation between the new milking system and the decline in herd health and milk quality is “difficult to determine”. Dr. Thomas’ report confirmed there were cow health issues before the April 2014 move into the new milking parlour. Dr. Thomas also theorized that with the addition to the van Beeks’ herd of cows previously stabled at other farms, those new cows could have been the source of infection spread among some of the existing dairy herd. Dr. Thomas’ Report noted “a large increase in BTSCC can be observed extending from April 23 through May 5, 2014; while this corresponds with the move to the new facility, it is not feasible that introduction to a new milking system, no matter how well or poorly configured, could influence the cows’ biology to cause such an immediate increase in BTSCC.”
The onus of proof in this application rests with the van Beeks. It is incumbent on the van Beeks to provide evidence to prove that it is more probable than not, that the equipment supplied and installed by Wood’s Dairy Source was defective and that the defect or defects caused the van Beek herd to experience mastitis and elevated somatic cell counts.
While the timing of moving the dairy herd into the new milking parlour and the timing of the decline of the herd health with the increase in incidence of mastitis within the herd and the elevated somatic cell count in the milk are coincidental, the Tribunal requires more than coincidence to satisfy that burden of proof.
A causal link between defects in the equipment, installation or set up by Wood’s Dairy Source must be proved on a balance of probabilities to succeed. The van Beeks did not provide evidence to prove such a causal link.
The panel did hear evidence from Herma van Beek that in October 2014, another milking system manufacturer representative visited Wellsfarm and advised her that the vacuum regulator on the milking system installed by Wood’s Dairy Source was not working and that the milking system installed by Wood’s Dairy Source had not been properly commissioned. The theory of the van Beek case on this point is the improper vacuum and the improper commissioning of the system caused the decline in herd health.
The other milking system representative was not called to testify. There was no written report from that milking system representative filed as documentary evidence. The only evidence on that issue was the hearsay evidence from Herma van Beek. The Tribunal can receive such hearsay evidence under section 15 of the Statutory Powers Procedure Act. The issue is what weight should the panel attribute to that hearsay evidence.
In these circumstances, the alleged improper set up of the milking system is a critical aspect of the theory of the van Beek case and in these circumstances, it is incumbent on the van Beeks to do more than simply rely on hearsay evidence.
Therefore, in these circumstances, where there is no reliable evidence before the Tribunal that would lead to any finding of fact about the cause of the decline in herd health and where alternate causation theories are equally plausible, the panel is constrained in its findings by that lack of evidence.
The panel finds as a fact that between April 2014 and December 31, 2015, a decline in the health of the van Beeks’ herd resulted in mastitis and elevated somatic cell counts. The resultant expenses/losses sustained by the van Beeks that included dumped milk, intramammary treatment products, veterinarian treatments and culled cows was between $71,155.00 and $112,472.00.
The panel finds as a fact there is no proven causal link between the equipment sold, installed and set-up by Wood’s Dairy Source and the van Beeks’ expenses/losses arising from the decline in herd health.
B. The Balance of the Warranty Claims
During cross-examination, Herma van Beek conceded that they did not give Wood’s Dairy Source written notice of any of their claims but that they were calling Wood’s Dairy Source almost weekly after they moved the herd into the new milking parlour. Based on that evidence, the panel finds as a fact that the van Beeks regularly called Wood’s Dairy Source to advise them of the warranty issues and that Wood’s Dairy Source had actual notice of those warranty issues, despite not receiving written notice.
But for the signed Release, the van Beeks had some proven warranty claims.
Labour Credit: Herma van Beek testified that Troy Wood advised them Wood’s Dairy Source occasionally experienced staff shortages and if the van Beeks assisted with the installation, they would receive a labour credit. Herma van Beek testified that they received no labour credit. Under the Act: that is not a warranty issue; that is not a repair issue; that is not a failure to perform issue. That is a potential breach of contract issue. Subject to the comments to come about breach of contract, the van Beeks provided no evidence about the amount or value of their own labour they provided on the installation and therefore, the panel has no evidence on which it can assess this aspect of the van Beeks’ claim.
Excavating Manure Gutters: Herma van Beek testified that part of the Wood’s Dairy Source contract was to excavate the gutters for the manure handling system, but because Wood’s Dairy Source did not have the excavating equipment on site at the appropriate time, the van Beeks had another contractor do that work at their costs of $4,920.00 plus HST. The contract documents from Wood’s Dairy Source did include excavating the manure gutters. Under the Act: that is not a warranty issue; that is not a repair issue; that is not a failure to perform issue. That is a potential breach of contract issue. Subject to the comments to come about breach of contract, the panel accepts the van Beeks’ evidence about their paying another contractor $4,920.00 plus HST to dig the gutters.
Milking System Computer: Herma van Beek testified that part of the Wood’s Dairy Source contract was to supply the computer for the milking system, but that Wood’s Dairy Source did not supply the computer, so the van Beeks purchased a computer at their cost of $1,001.00. The contract documents from Wood’s Dairy Source did include a milking system computer. The “brains” of a modern milking system is the computer. The failure to deliver the computer is arguably a “failure to perform” issue under section 22 of the Act, since without the computer the “turn-key” milking parlour will not operate. Wood’s Dairy Source argued that failure to deliver the computer was a breach of contract issue that was beyond the Tribunal’s jurisdiction. While the panel notes this issue is capable of being either a “failure to perform” issue or a breach of contract issue, the panel concludes that on the facts of this case and given the essential role of the computer in a modern milking system, it is a “failure to perform” issue. The panel accepts the van Beeks’ evidence about their paying $1,001.00 for the computer. In these circumstances, the computer is academic as the van Beeks recognized the essential nature of the computer, and when it was not delivered and installed by Wood’s Dairy Source, they immediately secured a computer at their own expense to ensure the milking system would operate.
Calf Pen Size: Herma van Beek testified that Wood’s Dairy Source delivered calf pens longer and narrower than set out in the contract. As a result, the pens failed to remain closed and the calves wandered the barn. She confirmed that Wood’s Dairy Source did correct the issue in part. The van Beeks produced no evidence about any additional repair costs associated with the calf pen size. The panel finds this was a warranty issue arising within the twelve-month warranty period corrected by Wood’s Dairy Source.
Incorrect Monitor Screen Orientation: Wood’s Dairy Source conceded that the orientation of the monitor screens was incorrect at the time of installation. Herma van Beek testified that the screen orientation was not corrected until June of 2015. The panel finds this was a warranty issue arising within the twelve-month warranty period corrected by Wood’s Dairy Source.
Cow Head Gates: Herma van Beek testified that the dividers on three of the parlour gates fell out during the first year and that they gave Wood’s Dairy Source verbal notice. Wood’s Dairy Source did not repair the gates and ultimately the van Beeks arranged for someone else to do the gate repairs. The panel finds this was a warranty issue arising within the twelve-month warranty period. The van Beeks produced no evidence about the cost to repair the gates.
Manure Gutters/Cleaner: Herma van Beek testified that Wood’s Dairy Source ordered the incorrect size slats to cover the manure gutters and directed the van Beeks’ barn contractor to alter the size of the gutter which resulted in the paddles of the shutterstroke manure cleaner being too wide to work in the manure gutter. Wood’s Dairy Source cut the paddles of the gutter cleaner to fit in the narrower gutter. Herma van Beek testified that because the gutter and paddles of the cleaner are now narrower, the shuttlestroke cleaner must operate more frequently, resulting in higher hydro costs. The van Beeks produced no evidence to support the claimed higher hydro costs.
Leaking Wash Lines: Herma van Beek testified that the wash lines for the milking system leaked and the cleaning chemicals leaked out of the system and that they verbally gave Wood’s Dairy Source notice. She confirmed that they ultimately had another contractor fix the leaking wash lines and produced an invoice dated June 23, 2018 of $147.72 for that claim. The panel finds this was a warranty issue arising within the twelve-month warranty period. But for the signed Release, the wash line service/repair invoice would have been recoverable.
Cooling System Failures: Herma van Beek testified there were several issues with the cooling system that began as early as a few months after Wood’s Dairy Source installed the system. That testimony was independently supported by the June 28, 2014 invoice 15224 from Wood’s Dairy Source that confirmed an emergency call because the “milk cooler will not run”. The associated parts and labour charges of $552.00 of invoice 15224 were covered under the Wood’s Dairy Source warranty. The van Beeks also produced the July 31, 2015 invoice 100572 from Wood’s Dairy Source that confirmed a service call for “electronic tx valve shutting cooling off”. The associated parts and labour charges of $562.50 were covered under the Wood’s Dairy Source warranty.
Herma van Beek also produced additional repair/service invoices from JP Dairy Systems related to cooling system issues as follows: April 1, 2015 of $264.14; April 21, 2015 of $600.81; May 15, 2015 of $1,015.77; July 12, 2015 of $159.61. But for the signed Release, the cooling system service/repair invoices within the twelve-month warranty period would have been recoverable.
The Release Issue
On December 21, 2015, in a meeting at Wellsfarm between Herma van Beek, her son Niels van Beek, and Troy Wood, the principal of Wood’s Dairy Source and Brian Morton, the Sales Manager for GEA, a farm implement manufacturer/distributor, Herma van Beek and Troy Wood signed a Release with these words:
“This is a release.
(Between Johan & Herma van Beek and Wood’s Dairy Source)
Payment to Wood’s Dairy Source from Johan & Herma van Beek for the balance of the account regarding contract for milking equipment, manure handling, stabling and extra’s as per contract April 2013 to a total of $57,635.36.
To be voided against to damages and losses due to installation issues, materials and labour not received $57,635.36.
Therefore balance as of today, December 21, 2015 to be $0.00 for both parties.
This is also a statement of confidentiality of the agreement and all concerns for both parties from this point forward.”
Wood’s Dairy Source argued the Release operated to foreclose any disputes or claims of the van Beeks.
The van Beeks argued that the Release was void because Herma van Beek signed the Release under duress or coercion and Wood’s Dairy Source breached the confidentiality clause of the Release. The van Beeks made no issue about the absence of Johan van Beek’s signature on the Release.
The context for the December 21, 2015 meeting is that Wood’s Dairy Source and the van Beeks both had lawyers previously exchanging demand letters and correspondence about the disputed issues, including the Wood’s Dairy Source claim to an unpaid balance for the Equipment and the straw chopper and that both a lien or re-possession were possible.
As of December 21, 2015, the situation between the van Beeks and Wood’s Dairy Source is summarized:
the van Beeks had been having issues with the Equipment and with their herd since the Equipment was installed and first operated around March-April 2014.
Wood’s Dairy Source was claiming an unpaid balance for the Equipment from the van Beeks and an additional amount for a later acquired hay chopping implement.
the van Beeks were claiming unspecified damages related to the Equipment and that certain of the Equipment contracted for had not been installed.
Herma van Beek testified that on December 21, 2015 Brian Morton of GEA called her to set up a meeting at Wellsfarm with himself and Troy Wood.
Herma van Beek testified that she had the impression from her telephone call with Brian Morton on December 21, 2015 he would mediate the issues between Wood’s Dairy Source and the van Beeks.
Herma van Beek’s version of the meeting is summarized:
Wood acknowledged that a proper tri-scan test was not done on the milking equipment.
Morton said the issues had to go away.
Morton coerced her.
There were no questions about the actual costs.
She felt threatened about the potential of Wood’s placing a lien on the hay chopper.
Morton dictated the terms of the Release.
She signed under duress and was coerced by Wood’s threat of repossessing the hay chopper.
Wood committed to completing some unfinished work by the end of January 2016.
Her son typed the Release.
She read the Release before signing.
She signed the Release to be rid of them.
She disputed that she got anything out of the Release.
She was frustrated that Wood’s would not proceed in a positive manner.
She felt the only way to get them off her property was to sign the Release.
There were no physical threats.
The differences or variances in Troy Wood’s version of the meeting is summarized:
The meeting lasted about an hour.
They discussed invoicing and got nowhere.
They discussed the Release.
Niels van Beek printed the Release.
The confidentiality paragraph was inserted because he did not want to speak of the issues again.
Herma van Beek did not want to pay Wood’s Dairy Source anything.
He believed the Release was a contract.
Brian Morton’s version of the meeting is summarized:
He was unfamiliar with the circumstances of the issues between the van Beeks and Wood’s Dairy Source before being asked to meet.
He felt he was caught between two businesses.
The parties negotiated the issues and came to a settlement.
He was not involved in the numbers issues between the parties.
He advised that if everyone was happy, they should write down the terms in a Release.
They all signed the Release.
He signed the Release as witness.
The parties left the meeting shaking hands.
He saw no indication of coercion or duress.
There was only one significant divergence or variance in the testimony about the December 21, 2015 meeting at Wellsfarm and that one exception is Herma van Beek’s assertion of duress or coercion.
The panel invited the parties to make brief written submissions after the hearing on the legal test to overturn a Release in circumstances of coercion or duress. The van Beeks elected not to file any written submissions as invited.
The jurisprudence sets a high threshold for declaring an agreement void based on coercion or duress. The Court of Appeal for Ontario in Taber v. Paris Boutique & Bridal Inc. (2010) ONCA 157 informs there are two required elements: “it must be pressure that the law regards as illegitimate; and it must be applied to such a degree as to amount to ‘a coercion of the will’”, of Herma van Beek.
The parties met on December 21, 2015 each having competing claims against each other. The van Beeks had claims or complaints against Wood’s Dairy Source about several items including incomplete delivery of contracted equipment; warranty claims about failing cooling equipment and improper set up and testing of the milking equipment; improper stabling equipment; and inadequate manure handling equipment. Wood’s Dairy Source had claims against the van Beeks including unpaid invoices for the milking, plumbing, stabling and manure handling equipment; unpaid extras invoices; and an unpaid invoice for a new straw chopper implement worth about $25,000 under a different contract than the dairy equipment.
It is accepted that in those circumstances there would be a degree of economic pressure between the parties. That pressure included Wood’s Dairy Source hiring a lawyer and threatening legal action in demand letters. That legal action included threatened liens, re-possessions and lawsuits. However, those threatened steps or pressures are legitimate legal mechanisms available to parties to engage in and therefore do not meet the first part of the test from Taber.
Brian Morton’s evidence is the most neutral evidence about the meeting of December 21, 2015 since he was not a party to the issues between the van Beeks and Wood’s Dairy Source. He testified that the parties negotiated. He testified the parties settled. He testified the parties created, read and signed the Release. He testified the parties ended the meeting shaking hands. That evidence reinforces there was no pressure applied to amount to a “coercion of the will”.
Herma van Beek’s own testimony about that meeting militates against a finding of “coercion of will”.
A related issue involving the Release is the van Beeks’ argument that Wood’s Dairy Source breached the confidentiality term of the Release and that breach renders the Release void. The alleged breach of the confidentiality term arose because of Wood’s Dairy Source seeking to file an insurance loss claim with its insurer related to the $57,635.36 it agreed not to pursue from the van Beeks. Troy Wood confirmed in evidence that after settling with the van Beeks and signing the Release he sought an insurance recovery and as part of that process, he disclosed to the insurance company there was a settlement with the van Beeks, the settlement amount and the van Beeks’ address.
The Act authorizes the Tribunal to deal with prescribed issues such as warranty issues, repair part issues, and failure of equipment to perform issues, but the Act does not expressly authorize the Tribunal to deal with stand-alone breach of contract issues. It seems incongruous that the Legislature would create a dispute resolution mechanism in the Act for only some dispute issues.
However, on plainly reading the Act, the Tribunal has no authority over stand-alone breach of contract issues, and the Tribunal is powerless to do anything for the van Beeks about the alleged breach of the Release by Wood’s Dairy Source breaching confidentiality.
The Tribunal has analysed the alleged breach of Release issue below to assist the Court in the event an appeal is filed and the Court determines the Tribunal’s legal conclusions about its powers over stand-alone breach of contract issues are wrong.
The Tribunal concludes this Release was a settlement contract. The parties all understood they were making a settlement. There was consideration exchanged. Wood’s Dairy Source gave up its claims of $57,635.36. The van Beeks gave up their claims to warranty issues, repair issues, incomplete contract performance issues and dairy herd losses in exchange for not being sued, not facing a lien and not being subject to the re-possession of the equipment or the straw chopper. If either party breached those contract terms, the remedy is in a breach of contract lawsuit for money damages. However, a breach of contract does not result in the Release becoming void. The damages would be the damages flowing from the breach of confidentiality. The van Beeks provided no evidence about the damage or losses they sustained because of Wood’s Dairy Source disclosing to the insurance company there was a settlement with the van Beeks, the settlement amount and the van Beeks’ address and therefore the panel finds as a fact the resulting loss and damages due to Wood’s Dairy Source breaching confidentiality to be zero.
The panel finds as a fact there was no duress or coercion on Herma van Beek that resulted in her signing the Release and the Release is valid.
The panel finds as a fact that Wood’s Dairy Source did breach the Release term of confidentiality but the van Beeks provided no evidence of any damages that arose because of that breach of the Release. The breach of the Release by Wood’s Dairy Source is not a basis for the Release becoming void.
Order
Based on the findings and conclusions set out,
- The application of Johan and Herma van Beek is dismissed.
So orders the Tribunal.
DATED at Collingwood, Ontario this 9th day of July, 2019.