DATE: 2001-12-19
DOCKET: C34577

COURT OF APPEAL FOR ONTARIO

RE:

RAY ARMSTRONG (Appellant) and CLARK AGRI SERVICE INC. (Respondent)

BEFORE:

LASKIN, GOUDGE, AND SIMMONS JJ.A.

COUNSEL:

Donald R. Good

For the appellant

W. Peter Murray

For the respondent

HEARD:

December 11, 2001

On appeal from a judgment of Justice G. W. Dandie dated June 1, 2000

E N D O R S E M E N T

[1] Mr. Armstrong is a cash crop farmer in Haldimand-Norfolk. He appeals from a judgment dated June 1, 2000 requiring that he pay Clark Agri Service Inc. $124,104.90 plus interest on account of soybean seed, chemicals, and spraying services supplied for the 1997 crop year and dismissing his counterclaim for losses suffered as the result of negligent spraying and inferior quality seeds.

[2] Mr. Armstrong advanced four grounds of appeal:

i. the trial judge erred in finding that Mr. Armstrong had authorized substitution of the herbicide Pursuit for the herbicide Basagran, and further erred in ordering payment for the unauthorized product;

ii. the trial judge erred in ordering payment for the supply of Roundup, Pursuit, and 2,4-D, an unregistered spray combination, thus enforcing an illegal contract;

iii. the trial judge erred in ordering payment for 55 totes of soybeans when the documentary evidence established an order for only 31 totes; and

iv. the trial judge erred in dismissing his counterclaim.

Substitution of Pursuit for Basagran

[3] Despite Mr. Armstrong’s testimony that he did not authorize Clark Agri to substitute Pursuit for Basagran, the trial judge relied on four pages of handwritten notes of telephone instructions made by an unidentified Clark Agri employee, and the absence of any complaint prior to litigation, to find that the substitution was authorized.

[4] Pursuit was noted under Mr. Armstrong’s name on each of the first three pages of the handwritten notes. A note that appears to be “Basagran” on the fourth page is struck out. “Pursuit + 28%” appears above the struck reference. An expert witness called by Mr. Armstrong testified that Pursuit and Assure are a more effective herbicide combination later in the season than Basagran and Assure. “Assure” also appears on pages three and four of the handwritten notes.

[5] The trial judge noted that Clark Agri conceded that the substitution of Pursuit for Basagran may have been made without the knowledge and consent of Mr. Armstrong. It remained open to the trial judge, however, to reject Mr. Armstrong’s testimony that he did not authorize the substitution, even though that testimony was unchallenged by cross-examination.

[6] Although the handwritten notes standing alone and unexplained also support an inference of a unilateral decision made by the unidentified employee, when viewed in conjunction with the absence of a prompt complaint, we are unable to say that they do not support the inference drawn by the trial judge, or that his finding amounts to a palpable and overriding error.

Contract Illegality

[7] The Pest Control Products Act, R.S.C. 1985, c. P-9, and regulations enacted under that Act and the Pesticides Act, R.S.O. 1990, c. P.-11, prohibit use of unregistered[^1] pesticides as well as use of a “control product” in a manner inconsistent with directions on the product label. It is conceded that although each of Roundup, Pursuit, and 2,4-D are registered individually, the product comprised of their combination is not, nor does product labelling permit their combination.

[8] Clark Agri was aware of this apparent illegality, but persisted in using the combined product in any event, based on an understanding that its use has been approved in the United States, and because registration in Canada would not be economically viable. The combined product is a more effective spray mixture than the mixture of Pursuit and Roundup that Mr. Armstrong actually ordered. There is however no evidence indicating that Clark Agri informed Mr. Armstrong in advance that it proposed to use the unregistered combined product.

[9] Neither the Pesticides Act nor the Pest Control Products Act contains a specific provision making contracts for the supply of unregistered products unenforceable. Accordingly, “the question is whether, having regard to the purpose of the Act, and the circumstances under which the contract was made, and to be performed, it would be contrary to public policy to enforce it because of illegality”: Beer v. Townsgate I Ltd (1998), 1997 CanLII 976 (ON CA), 36 O.R. (3d) 136 (C.A.) at p. 144.

[10] The Pesticides Act and the Pest Control Products Act appear to be aimed, at least in part, at ensuring the safety of food products through appropriate testing and regulation of potentially hazardous products. Here, no evidence was led dealing directly with the relative safety of the combined product supplied. However, given that contract illegality was not raised until closing submissions, and given that there was some evidence suggesting the relative safety of the unregistered combined product in the form of evidence that its use is authorized in the United States, we would not interfere with trial judge’s finding that the particular contract is enforceable.

Quantity of Soy Beans

[11] Clark Agri relied on invoices prepared and sent in the ordinary course of business in support of its claim for 55 totes of soybeans. Again, there was no evidence of complaint prior to the commencement of litigation, and the trial judge’s conclusion that Mr. Armstrong was unable to refute the suggestions put to him by trial counsel for Clark Agri concerning the calculation of seed he used was not challenged here. Once again, we are unable to say the trial judge’s finding was unreasonable or that it amounted to palpable and overriding error.

Counterclaim

[12] Mr. Armstrong conceded there was evidence capable of supporting the trial judge’s findings of fact concerning the counterclaim, but asserted that if he succeeded on his other grounds of appeal, there would be a basis for setting aside the dismissal of the counterclaim. In light of our other findings, we would not give effect to this ground of appeal.

Disposition

[13] For the reasons given, the appeal is dismissed with costs, including with respect to the motion for security for costs of the appeal.

“John Laskin J.A.”

“S.T. Goudge J.A.”

______ “Janet Simmons J.A.”

[^1]: Registration requirements are set out in the Pest Control Products Act