Conceicao Farms Inc. v. Zeneca Corp. (Zeneca Agro), 2007 ONCA 509
CITATION: Conceicao Farms Inc. v. Zeneca Corp. (Zeneca Agro), 2007 ONCA 509
DATE: 20070706
DOCKET: C42088/C42092/C42115/C42924
COURT OF APPEAL FOR ONTARIO
McMURTRY C.J.O., LANG and ROULEAU JJ.A.
BETWEEN:
CONCEICAO FARMS INC., HORODYNSKY FARMS INC., PAUL HORODYNSKY, W.J. SMITH GARDENS LIMITED, ROMAN DYRIW, MICHAEL DYRIW and 466203 ONTARIO LIMITED
Plaintiffs (Appellants)
and
ZENECA CORP. c.o.b. ZENECA AGRO and ZENECA INC. and BRADFORD CO-OPERATIVE STORAGE LTD.
Defendants (Respondents)
Brian J. Gover and Patricia Latimer for the appellant, Conceicao Farms Inc.
Lawrence G. Theall and Jeffrey A. Brown for the appellants, Horodynsky Farms Inc. and Paul Horodynsky
S. Wayne Morris and Delora Deravi for the respondent, Zeneca Corp. c.o.b. Zeneca Agro and Zeneca Inc.
Heard: May 1 and 2, 2007
On appeal from the judgment of Justice Blenus P. Wright of the Superior Court of Justice, dated June 11, 2004.
LANG J.A.:
Overview
[1] This is an appeal from the decision of Blenus Wright J., which dismissed the appellants’ action on the basis that the appellants’ crop loss was not caused by any defect in the insecticide supplied by the respondents, but rather by unusual environmental factors.
[2] The action, which was framed in breach of warranty and negligence, concerned the insecticide, Dyfonate, manufactured by Zeneca Corp. and sold to the appellants by Bradford Co-Operative Storage Ltd. (collectively referred to as Zeneca[^1]).
[3] The four appellant onion growers, who farmed in the Bradford region, applied Dyfonate when they planted their onion crops in the spring of 1995. In the trial judge’s view, the unusually cool and dry spring that year delayed the life cycle of the onion maggot. By the time the maggots emerged to feast on the onion crops, Dyfonate was not successful in protecting the appellants’ onion crops from infestation. The appellants lost thirty to sixty percent of their crops.
[4] In the trial judge’s view, the appellants, all of whom were hard-working, experienced and sophisticated onion growers, were aware that damage could result in the face of unusual weather conditions. However, that same season, onion crops in the region planted with Lorsban[^2], the only other available insecticide, suffered only minimal crop damage.
[5] The crucial issues on this appeal turn on Dyfonate’s effectiveness, the impact of any unusual weather conditions and the terms of any warranties or representations provided to the appellants by the respondents.
[6] Since I conclude that the trial judge made no reviewable error of fact and that the law does not provide relief to the appellants on the facts established at trial, I would dismiss the appeal.
The trial reasons
[7] The trial, which lasted fourteen days and was followed by extensive written argument, included evidence from the appellant onion growers, Zeneca representatives, individuals involved in the investigation of the crop failure, and the parties’ respective experts. Based on this evidence, the trial judge concluded that the cause of the crop failure was environmental conditions. On this basis, the trial judge referred to the appellants’ legal arguments, which were based on the Sale of Goods Act, R.S.O. 1990 c. S-1 (SGA) and negligence, but did not analyze those arguments because he held that this case rested not on “a determination of legal issues but on findings of fact.”
[8] In finding that the crop failure was not caused by any defect in Dyfonate, but predominantly by an unusually cool and dry spring, the trial judge accepted the evidence of the respondents’ expert entomologist, Dr. Grafius. The trial judge found Dr. Grafius to have “extensive knowledge and experience with the onion maggot problem” and described him as “probably North America’s foremost expert” on onion maggots. He noted that Dr. Grafius had “extensive experience over many, many years, since he was 15 years old, with respect to onions and onion maggots and the insecticides that apply to try to control the onion maggot.”
[9] Dr. Grafius explained that the unusual climate affected the soil conditions, causing a delayed development and emergence of the onion maggot. As a result, the first generation onion maggot egg-laying pressure in the Holland/Bradford Marsh region peaked[^3] on approximately June 25, 1995[^4], rather than on the average date of June 7 experienced in earlier years[^5]. Significantly, the scientific and expert evidence also indicated that, in contrast to the typical week-long fly peak in 1994, the 1995 peak extended for ten to fourteen days in the area generally.
[10] The trial judge also relied upon the similar conclusion of an ad hoc committee (the Committee), which was struck in the summer of 1995 to determine the cause of the crop failures. The Committee was comprised of Jim Chaput (an entomologist and the Pest Management Advisor at Ontario Ministry of Agriculture and Food (OMAF)), Dr. Mary Ruth McDonald (manager of OMAF’s Muck Research Station (Research Station) in the region and the holder of a doctorate that emphasized plant pathology), Gwen Ritcey (a University of Guelph research associate), and Jim Anderson (Zeneca’s Product Service Supervisor).
[11] The Committee reached its conclusion after eliminating other potential factors, such as an insufficient quantity of the active ingredient, fonofos, in the Dyfonate sold to the appellants. The Committee also determined that no unusual resistance developed to Dyfonate that season and there was no unusual microbial degradation. The Committee thus determined that the unusual 1995 environmental climate was the “predominate factor” explaining the crop failure.
[12] At para. 36 of his reasons, the trial judge quoted the Committee report on causation:
This leaves only environmental conditions as the predominate factor to consider. Dry, cool conditions are known to reduce the activity of Dyfonate in soils. Weather records for 1995 do indicate our area was significantly cooler than average and slightly drier than previous years. We also had a dry fall and winter in 1994-95. The cool temperatures meant a delayed germination pattern and a delayed onion maggot emergence pattern. In 1995 onion maggot egg laying pressure peaked near the end of June, almost 60 days from seeding time (May 1). In 1994 peak egg laying occurred around June 10 only 40 days from seeding time. Based on rates of degradation from previous years, it is believed that by the time onion maggot pressure was at a peak in 1995 the product had degraded to low levels. This is a normal process for granular materials. Dyfonate normally degrades slightly faster than Lorsban, but has been a very active insecticide until this year.
[13] The appellants called a qualified chemist as their expert, but his opinion that Dyfonate was defective was rejected by the trial judge because the chemist had no experience either with onion growing or with the use of insecticides to control the onion maggot. In addition, even though the chemist testified that Dyfonate was an inadequate insecticide, his analysis showed it to be superior to Lorsban in certain tests.[^6] In any event, the appellants’ expert opinion was necessarily limited to the quality of Dyfonate; he was not qualified to give evidence about other factors causing the crop failure. The appellants called no other expert evidence. As the trial judge concluded at para. 32 of his reasons, the appellants’ expert evidence “was of no assistance to the [appellants]” and a “major failure of the [appellants’] case is the lack of expert evidence to support their position.”
Issues
[14] The appellants raise two issues on appeal:
Did the trial judge make a palpable and overriding error in accepting the expert evidence that environmental factors caused the appellants’ losses?
Did the trial judge err in failing to conclude that the legal principles of warranty, representation and negligence led to the respondents’ liability for the appellants’ crop damage?
Analysis
1. Cause of the crop failure
[15] This issue turns on the appellants’ argument that the trial judge failed to make factual findings that would have otherwise led him to conclude that Dr. Grafius’ opinion and the Committee’s report were based on erroneous facts.
[16] Specifically, the appellants questioned:
Whether the Grafius opinion and Committee report were unreliable because they failed to consider the dates of crop damage to the appellants’ farms;
Whether the Grafius’ opinion was based on faulty assumptions about the date of the fly peak;
Whether the Grafius’ opinion was based on faulty assumptions about the 1995 weather conditions; and
Whether the Committee’s report was unreliable because it failed to consider an internal Zeneca email about the extent of the crop damage and information about Dyfonate’s dissipation rate?
[17] To put the factual findings in context, it is helpful to understand the basics about the life cycle of onion maggots and the two available insecticides.
[18] The soil in which the onion crops are planted contain pupae that remain dormant over the winter and emerge, usually in May, as an adult fly. Five to seven days after emergence, the fly mates. Three to four days after that, the fly lays its eggs, usually around the base of the onion plant. The eggs hatch in three to five days, or a little later if the soil is cold, and the larvae descend to the onion root. If the maggot comes into contact with an effective application of insecticide, it dies. If it does not, the maggot proceeds to feast on the onion root.
[19] Feasting on the onion root can kill the onion plant. Accordingly, treatment of the onion maggots, which were a persistent and challenging pest, was important to prevent significant damage to onion crops. Only two insecticides, Lorsban and Dyfonate, were available at the time to control the important first generation of onion maggots. Normally, both provided effective control. However, to the knowledge of everyone, neither insecticide was perfect. Even if the insecticide was applied properly, growers generally experienced an overall crop loss of five per cent, and sometimes up to ten per cent, with different fields experiencing different ranges of damage well in excess of those amounts.
[20] As recommended by the manufacturers, growers applied Dyfonate or Lorsban at the same time as they planted their onions seeds.[^7] The amount of insecticide recommended by the manufacturer must be in an amount that controls the maggots, but does not damage the seeds and yet ensures that no residue remains at harvest time in either the crop or the soil.
[21] Before 1993, growers used Lorsban, which was the only available viable insecticide. However, to be effective, the growers had to apply Lorsban in quantities that significantly exceeded those recommended on its label. Furthermore, using the same insecticide each year increased the chance that the maggots would develop resistance to the product.
[22] Dyfonate, which had been reformulated from earlier versions, became available in the early 1990’s. It presented an attractive alternative to Lorsban because it allowed farmers to rotate which insecticide they used from year to year and from plot to plot.
[23] In 1992, OMAF’s integrated pest management program (IPM program) conducted studies on growers’ fields, which showed that onion crops treated with Lorsban suffered overall damage of 2.9 per cent, with a range of damage of between zero to thirty-three per cent. Although Dyfonate was not yet commercially available, 1992 tests conducted at the Research Station showed Dyfonate to be more effective than Lorsban in controlling first generation onion maggots.
[24] In 1993, although Lorsban-treated fields suffered overall damage of 7.7 per cent, damage in some fields was as high as twenty-five percent. In the same year, Dyfonate-treated fields suffered overall damage of 4.75 per cent, with a range that showed damage up to 11.25 per cent in some fields. Dr. McDonald testified that these results represented typical ranges for treated fields. This season, in contrast, the Research Station experimental tests showed Lorsban to be more effective than Dyfonate.
[25] In 1994, the IPM program data indicated maggot damage for Lorsban at an average rate of 6.1 per cent and for Dyfonate at 4.3 per cent.
[26] Accordingly, both field and test results showed both products to provide relatively effective control of onion maggots and established Dyfonate as a promising alternative to Lorsban. Some growers in the Bradford region used Dyfonate successfully on a trial basis during the 1993 season. Considerably more growers used it, also successfully, in the 1994 growing season.
[27] Beginning in the fall of 1993, Bradford circulated brochures recommending Dyfonate. Through its Muck Crop Newsletter, OMAF also presented Dyfonate as an effective maggot control product.
[28] Even though both Lorsban and Dyfonate were recommended as effective insecticides, Dr. Grafius pointed out in testimony explicitly accepted by the trial judge that extensive damage can nonetheless occur.
1. Date of the crop damage
[29] The appellants contend that the expert evidence about environmental causes of the crop failure was contradicted by the four appellant growers, who testified to visible crop damage in their fields as early as late May and early to mid-June, damage that they contend is inconsistent with the delayed emergence explanation that anchored the opinions of Dr. Grafius and the Committee.
[30] If, as the appellants argue, damage was visible in late May and early June, delayed emergence was irrelevant to the crop failure. On the other hand, if the damage was not visible until the end of June or early July, the weather conditions could explain the crop failure. The date damage was first visible is significant because it is an indication of when the damage to the onion plants actually occurred, which in turn could signal whether Dyfonate was effective at the particular time.
[31] The trial judge did not explicitly deal with the growers’ evidence about the timing of crop damage to the appellants’ farms. However, the respondents argue that the trial judge’s rejection of the growers’ evidence is implicit in his acceptance of the expert evidence. I agree for the reasons that follow.
[32] Both Mr. Anderson of Zeneca and Dr. McDonald of the Research Station gave evidence that damage would be visible ten to fifteen days after the maggots attacked the onion root. However, Dr. McDonald said visibility varies over a wide time frame depending on a number of factors, including the size of the onion and the number of maggots feeding on any individual onion. Dr. Grafius, who gave the expert opinion preferred by the trial judge, disagreed with the ten-day figure as a general statement and testified that damage could be apparent “much sooner”, depending on a number of factors, including the size of the plant, the number of maggots involved, and the soil temperature. Wilting, he testified, will be apparent in a small onion plant within a short time; however, if a very large plant is attacked by only one maggot, damage will be visible as late as ten or, at most, fifteen days after the attack. Dr. Grafius’ opinion was consistent with the OMAF fact sheet that describes first generation onion maggot damage being visible from “mid-to-late June as wilted onion seedlings.” The appellants called no expert evidence that contradicted the opinion of Dr. Grafius on this issue.
[33] At trial, the appellants recalled visible damage in late May and early June. On this point, Dr. Grafius testified that evidence of some early damage was not inconsistent with his opinion. Even with the application of either insecticide, damage to fifteen percent of the early crop might be visible in any given field, even if overall damage during the season totalled no more than five percent. Accordingly, on the evidence presented at trial, the fact of some damage in late May and early June did not indicate an early failure of Dyfonate in advance of the delayed emergence. On this issue, Dr. Grafius testified that damage this early in the season would raise questions primarily about application methods and resistance problems.
[34] Importantly, the appellants’ recollections at trial about the visibility of damage were not consistent with their 1995 reports of damage. For example, although Mr. Horodynsky gave evidence about early and extensive damage, he only reported “more onion maggot than normal” to Bradford in mid-to-late June. He did not report damage to his insurer until June 22[^8] and, even then, he did not report that the problem was either serious or extensive. Further, only on June 22 did Mr. Horodynsky purchase and apply Lorsban spray to his fields. Mr. Horodynsky’s lack of action until June 22 conflicts with his recollection of extensive visible damage in late May and early June.
[35] Similarly, Mr. Conceicao purchased Lorsban spray on June 27 and Mr. Smith on June 26, indicating that, only at that point, did they consider the damage to be extensive. As well, while Mr. Dyriw gave evidence that he first noticed damage to his crop in mid-to-late June, he did not report that damage to his insurer on June 13, when he was making a claim for wind damage.
[36] The first documented evidence of extensive damage was contained in a June 26 Zeneca email, written immediately after seven growers reported damage to Zeneca and Zeneca’s representative attended at their farms. The email described the damage to the Horodynsky crop as “overall poor, very bad spots”, the Dyriw crop as “a fair amount of damage” and the Smith crop as losing eighty acres. The email reported that “the book will remain open” because “the pressure peak won’t be until next week”.
[37] A July damage assessment report showed damage to 37.1 per cent of Mr. Horodynsky’s crop. As July progressed, more damage became evident and by July 12 damage to the onion crop was extensive in some fields. On the other hand, some growers who used Dyfonate found it to be effective in 1995.
[38] In summary, the evidence supported a finding that extensive and serious damage was clearly visible to the appellants’ crops by June 26 and that damage continued to increase through July.
[39] It is clear from reading the transcripts that the trial judge would have been alive to the importance of dates, including the dates extensive damage was visible and was mindful of Dr. Grafius’ opinion that damage to small plants would be visible within a very few days. In my view, it is implicit in the trial judge’s acceptance of the Grafius opinion and the Committee report that extensive damage did not appear until later in June 1995. That finding was open to him on the evidence and I am not persuaded that he misapprehended the evidence or made any reviewable error in accepting that the expert evidence was not compromised by the appellants’ evidence about crop damage visibility.
2. Fly Peak
[40] The delayed date of the fly peak and its duration were critical to support the expert opinions that the unusual climate delayed emergence to the point where Dyfonate could no longer control the onion maggot population.
[41] Both the timing of the fly peak on approximately June 25 and its duration were important factors. The late June fly peak was substantiated in both the Committee and the Grafius opinions. The expert evidence was also uncontradicted that the 1995 peak was unusually long, lasting ten to fourteen days, where normally peak activity is expected to last four to ten days.
[42] The expert conclusions on these issues were based on the findings of Mr. Chaput, the Pest Management Advisor for OMAF’s IPM program, who collected data from approximately forty fields and 170 acres in the Bradford region. From the resulting fly counts, Mr. Chaput established a fly peak of approximately June 25 in 1995, which was fifteen days later than any of the fly peaks recorded by Mr. Chaput from 1989 to 1995. At trial, the scientific witnesses referred to the timing of this fly peak as most unique and unusual. This evidence was relied upon by the trial judge in arriving at his conclusions.
[43] The appellants argue that the OMAF data was contradicted by the evidence that the Horodynsky farm recorded a June 8 fly peak[^9]. However, Mr. Chaput testified that the Horodynsky information did not affect his overall conclusions because the Horodynsky farm was only one farm and was not reflective of the results of the monitoring conducted by OMAF.
[44] Dr. Grafius also testified that the circumstances of the microclimate on the Horodynsky farm were not reflective of the more reliable fly peak documented by the OMAF data and that the month-long Horodynsky fly peak was “only a very small part of the picture about what happened in 1995”, particularly given its unusually prolonged duration. Dr. Grafius’ opinion on this issue was not successfully challenged on cross-examination.
[45] Unquestionably, the Horodynsky data raised questions. However, it is clear from the trial judge’s reasons that he did not accept that the appellants suffered the extent of damage in late May or early June that would put Dyfonate’s effectiveness into question. Moreover, the appellants did not call expert evidence that the underlying OMAF and Research Station data on fly peaks was flawed.
[46] The trial judge specifically referred to the Horodynsky data in his reasons and raised questions about it during the trial. I am satisfied that he was alive to the Horodynsky information, but did not consider that it undermined an overall fly peak of approximately June 25 or the prolonged duration of the fly peak.
3. Weather conditions
[47] The appellants argue that Dr. Grafius’ finding that the weather was cooler in 1995 is unfounded because he only compared the fewer number of degree days in 1995 to 1994. This argument, however, ignores the Committee conclusions about temperature, which Dr. Grafius took into consideration.
[48] Although the issue of temperature would reasonably be thought to be straightforward, there was a great deal of conflicting evidence about it at trial because different sources gave surprisingly different results about actual temperatures. The trial judge recognized this and addressed the issue with counsel at the time.
[49] In the end, the best evidence about 1995 temperatures came from those actually involved in the Committee’s investigation. At the time of its deliberations, all the Committee members, who worked in the Bradford region at least from time to time, agreed that temperatures were unusually cool in the spring of 1995. In support of this, Dr. McDonald recalled that the Committee specifically compared the 1995 temperatures to 1992 temperatures; 1992 was a particularly cold spring. As well, the 1995 onion crop suffered significant smut damage, which was consistent with cooler temperatures that season. Finally, the July 12, 1995 Weekly Horticultural Report, published by OMAF, referred to 1995 as a “cold, dry spring”.
[50] In addition, Dr. Grafius’ opinion was also informed by the concrete information about the delayed fly peak, which was, in turn, reflective of the cool soil temperatures.
[51] Accordingly, there was ample evidence to found the trial judge’s conclusion of unusually cool 1995 temperatures.
4. Information withheld
[52] The appellants challenge the Committee report on the basis that two pieces of significant information were withheld from the Committee when it made its report. I do not accept this submission.
[53] First, even if, as argued by the appellants, the Committee was not given the June 26 internal Zeneca email detailing the crop damage, the Committee members knew the onion crops were suffering extensive damage. The date of visible crop damage was not raised as a significant issue at the time of the Committee’s investigation and the appellants’ evidence about extensive early damage was implicitly rejected by the trial judge.
[54] The appellants rely on Dr. McDonald’s evidence. However, at its highest, when Dr. McDonald testified in 2004, she could no longer recall what information the Committee had in 1995 and, in particular, she did not recall the Zeneca email. However, Dr. McDonald also testified that, while she was personally involved in examining some of the crop damage when it was reported, she relied on damage assessments provided by pest management scouts. Moreover, the focus at the time was on the cause of the damage. In any event, Dr. McDonald testified that reports of damage in mid-June would be in the same normal range as damage in late June.
[55] Second, the appellants argue that information about Dyfonate’s dissipation rates was withheld from the Committee. In particular, Dr. McDonald testified that she did not recall the Committee considering a 1994 test that showed, in a single plot, Dyfonate had a dissipation rate of twenty to one parts per million in sixty days. While she said that information would have raised questions and changed the Committee’s memo, she did not say that it would have affected its conclusions. Her testimony was clear that she understood the implication of dissipation rates on onion maggot control; that dissipation rates could vary from field to field and from year to year; that Dyfonate could not have dissipated at an unusually fast rate in 1995 in the test plots at the Research Station because it was effective; that Dyfonate had succeeded in protecting onions from maggots in 1993 and 1994; and in any event, there was no evidence to establish that Dyfonate lost its effectiveness even when it dissipated to low levels.
[56] More importantly, although Mr. Chaput did not recall being given dissipation rates by Zeneca, he did remember that the Committee sought and considered dissipation rates provided by the University of Guelph in arriving at its conclusions.
[57] Dr. Grafius testified that no scientific data was available to suggest how much of a given product, including Dyfonate, is required at a given time for the product to provide effective control.
[58] In the result, the one test that is relied upon by the appellants was not statistically significant in the eyes of the scientific witnesses.
[59] Accordingly, I would not give effect to the argument that the trial judge should have rejected the Committee’s report because the Committee was denied important information that would have affected its conclusion. In my view, the Committee was not denied any information that would have affected its conclusion.
- Conclusion on the cause of the crop failure
[60] It follows that it was open to the trial judge to conclude, particularly given Dyfonate’s effectiveness for growers in 1993 and 1994, and the evidence that it contained the required amount of fonofos, that environmental conditions caused Dyfonate’s 1995 failure and that Dyfonate was not a defective product. I can find no error in his conclusion that the “weight of the evidence does not support the plaintiffs’ position.” The appellants had not proven their case on a balance of probabilities.
2. Warranties and negligence
[61] However, the appellants argue that this is not the end of the matter because Zeneca provided express warranties or representations that Dyfonate would be ninety-five percent effective and that it would protect onion crops for at least sixty days. As well, the appellants sought to invoke the implied warranty provided by the SGA. Accordingly, consideration must be given to the appellants’ second ground of appeal that the trial judge failed to make any findings about the terms of any warranties or representations.
- Express warranties and representations
[62] The only express warranty on Dyfonate’s label was that the product contained ten per cent fonofos. The label provided no guarantees as to the effectiveness of the product or its persistence levels. However, in 1993 and 1994, the respondents released fliers or brochures about Dyfonate, which the appellants argue constituted express warranties or representations, particularly when combined with warranties and oral representations that the appellants say were given by Bradford and for which Zeneca assumed liability for the purposes of this action.
[63] In particular, the appellants rely on three aspects of the brochures: the brochures’ charts comparing Dyfonate favourably to Lorsban in the years 1991 through 1993 inclusive; reference in the 1993 brochure to the pricing of both Dyfonate and Lorsban; and a table in the 1994 brochure that favourably compared Dyfonate’s persistence to Lorsban.
[64] In my view, the trial judge implicitly and correctly found that the brochures did not contain warranties or representations about Dyfonate’s effectiveness rates.
[65] First, regarding the Dyfonate-Lorsban effectiveness comparison in both brochures, the impugned charts illustrate the percentage of damage for both insecticides as measured by the Research Station and in Bradford Co-Operative Field Trials (grower trials), both of which were conducted independently of Zeneca. The charts could not be seen as a performance-based warranty, but only as making a representation about Dyfonate’s past performance.
[66] All test results showed Dyfonate to be effective in each of 1991, 1992 and 1993. All these results were substantiated at trial, except for the Dyfonate results for the 1992 grower trials. The documentation for those trials simply could not be found. However, the trial evidence established that the 1992 results were available in 1994. Moreover, the author of the brochure testified that he incorporated those results accurately in the brochure. Since the appellants were unsuccessful in challenging this evidence, - and called no evidence to show that any of the test results were flawed in any manner - I do not see these charts as misrepresenting Dyfonate’s effectiveness in the past nor as purporting to represent Dyfonate’s effectiveness in the future nor as amounting to warranties of performance.
[67] Second, the appellants argue that the underlying data in the brochures was unreliable because, in 1993, Lorsban was tested in fifty sites, while Dyfonate was only tested in three, a fact not set out in the brochure. However, the evidence established that the number of Dyfonate test sites was necessarily small because the growers were not prepared to risk testing a new product widely until its reliability had been established. In contrast, since growers already used Lorsban widely, Lorsban tests could be conducted on more sites. Again, the appellants provided no expert opinion that the small number of Dyfonate sites compromised the results in any way and the only expert evidence accepted at trial was to the contrary.
[68] Third, the appellants submit that the 1993 brochure represented Dyfonate to be more effective than Lorsban, even when Lorsban was applied at the higher rate. This submission is founded on that part of the 1993 brochure representing Dyfonate’s price to be about half that of Lorsban, based on prices provided by Bradford. Unbeknownst to the respondents, however, Bradford calculated the Lorsban price based on an application rate well in excess of the recommended label rate.
[69] In my view, while the cost comparison was in error, it could not be taken as a warranty or representation that Dyfonate was as effective as Lorsban applied at the higher rate, at least without more. I say this for two reasons. First, the relevant paragraph in the brochure is only about pricing; it makes no reference to the quantities of insecticide to be applied. Second, the brochure explicitly says the pricing came from Bradford so that the reader would have understood this information to be only about pricing and not about effectiveness. In any event, the appellants’ complaint in this action is not about Dyfonate’s pricing, but about its effectiveness.
[70] Fourth, the 1994 brochure contained the rates at which the different active ingredients of Dyfonate and Lorsban persisted in the soil. These persistence rates, which were taken from a 1984 published article of Dr. Kuhlman, an entomologist, were not successfully challenged at trial. While the 1984 article was ten years old by the time of the brochure, and while the article relied on findings from as early as 1971, there was no evidence to show that the test results were faulty or that any subsequent test should, or would, have shown different persistence rates. Moreover, the persistence rates quoted in the brochure would have been understood by the sophisticated commercial growers to reflect persistence rates in normal environmental conditions. Indeed, the 1994 brochure set out the factors that would affect Dyfonate’s effectiveness, including soil moisture, soil type, soil Ph and soil temperature.
[71] Fifth, while the 1994 brochure also stated that an “ideal” insecticide would give effective control from mid-April to mid-June “when onion maggot egg hatch of the first generation is almost complete”; it did not represent that Dyfonate would be effective for sixty days, that it was the “ideal” pesticide, or that it would persist to prevent all maggot egg hatching. It only represented that it had long soil persistence rates in normal conditions as substantiated by the Kuhlman article. Even Mr. Horodynsky testified that he did not expect sixty days control, but that “we’d like it to work for 30 or 40 days.”
[72] In any event, there was no evidence about the amount of active ingredient in the soil necessary to control onion maggots. Indeed, the only evidence was that any such testing would not be reliable due to the variable conditions in the many different environments. While the Committee recognized there were clearly insufficient quantities of fonofos in the soil by mid-to-late June of 1995, this retrospective information does not mean that Zeneca could or should have anticipated this result.
[73] Moreover, accepting for the moment, the appellants’ expectation that Dyfonate would control onion maggots for the first generation, and accepting for the sake of that argument that the first generation endures for forty-five to sixty days, neither Zeneca nor Bradford provided any express guarantee or representation that Dyfonate would succeed in meeting these expectations irrespective of unusual climate conditions or other such variables. Indeed, the evidence established that the appellants, who were knowledgeable and informed growers, knew about the inherent challenges of maggot control and that results could vary considerably from year to year and from field to field, depending upon a number of factors.
[74] Indeed, in the 1994 Muck Crop News, which recommended Dyfonate, OMAF specifically cautioned about the many factors that affect effectiveness and advised growers to weigh the merits of each product from a number of viewpoints before exercising their judgment. Moreover, the appellants had all used Dyfonate in 1994,[^10] in at least some of their fields, with favourable results. While this indicated Dyfonate’s reliability, it did not amount to a representation or guarantee of similar results in the future.
[75] Importantly, the appellants knew that insecticides dissipate in the soil at variable rates depending on the circumstances. The one test that indicated Dyfonate dissipated at a concerning rate was acknowledged by the experts to be scientifically insignificant. There was no evidence or opinion that the dissipation rates given in the brochure were inaccurate or misleading. The only warranty provided was that Dyfonate contained ten percent of its active ingredient, and the evidence established that the product sold to the appellants met and exceeded that standard.
[76] Accordingly, I would conclude that Zeneca and Bradford gave no express performance-based warranties or representation regarding Dyfonate.
- Implied warranty
[77] Apart from the brochures, the appellants rely on an implied warranty under the SGA, which provides in s. 15(1), among other conditions, that liability attaches if “the goods are not reasonably fit” for their required purpose. In Venus Electric Ltd. v. Brevel Products Ltd. (1978), 19 O.R. (2d) 417 (C.A.), this court endorsed the view of Lord Diplock in Ashington Piggeries et al. v. Christopher Hill Ltd., [1971] 1 All E.R. 847 at 886, where it was stated that the key to s. 15(1) is “reasonable reliance of the buyer on the seller’s ability to make or select goods which are reasonably fit for the buyer’s purpose”. Further, Ashington confirmed that reliance can be partial: “It is well settled that the reliance on the seller’s skill and judgment need not be total or exclusive…in matters exclusively within the province of the manufacturer the merchant relies on the manufacturer’s skill.”
[78] Even accepting that the requirement of reliance under s. 15(1) is made out on the facts of this case, I am not satisfied that the trial judge erred in failing to find an implied warranty of fitness under the SGA. The trial judge’s failure to discuss the law and requirements of s. 15(1) did not constitute a reversible error as it was implicit in his reasons that he was not satisfied on a balance of probabilities that Dyfonate was not reasonably fit for its intended purpose.
[79] The trial judge noted that Dyfonate was successfully used for its intended purpose of maggot control by growers in 1993 and 1994 and tests established that it was reasonably fit for its purpose. Given the trial judge’s finding that the crop damage in 1995 was caused by environmental conditions, it is a reasonable inference that the trial judge was not convinced on a balance of probabilities that Dyfonate was defective.
[80] In my view, the appellants have failed to establish an implied warranty in the circumstances of this case.
- Negligence
[81] Finally, the appellants argue that Zeneca was negligent because it failed to fulfill an obligation to warn the appellants that Dyfonate was “dangerous” or that it would not work in colder weather conditions or that it would not perform in accordance with the express warranties or representations discussed above. For the reasons I have given regarding warranties and representations, the appellants have failed to establish any negligence on the part of the respondents in this respect. More particularly, the appellants failed to establish on the balance of probabilities that the respondents had, or ought to have had, any information about the various factors alleged that they could or should have communicated to the appellants.
Summary
[82] For these reasons, I am not persuaded that the trial judge erred in his factual findings. Further, I am not persuaded that Zeneca (or Bradford) provided any express warranty or made any misrepresentation about Dyfonate’s effectiveness. Further, I am not satisfied that Dyfonate was not “reasonably fit” for its intended use. Accordingly, I would dismiss the appeal.
[83] I would be remiss if I did not thank counsel, on behalf of the panel, for their thorough and helpful facta and submissions.
[84] Counsel advised that they have agreed on costs. If any order is necessary on that issue, they may advise the court by letter within thirty days.
RELEASED: JUL 06 2007
“R.R.M” “S.E.Lang J.A.”
“I agree R. Roy McMurtry C.J.O.”
“I agree Paul Rouleau J.A.”
[^1]: Zeneca assumed any liability on the part of Bradford Co-Operative Storage Ltd. (Bradford) for the purposes of the action framed under the Sale of Goods Act, although not for any representations made by Bradford.
[^2]: Lorsban was manufactured by Dow Chemical.
[^3]: The fly peak is the time when the largest number of flies as counted adhere to sticky tape. That number does not necessarily attest to the number of larvae attacking the onion.
[^4]: The fly peak on the Agra phone was between June 23 and June 27, while at the Research Station it occurred on June 28. (The Agra phone provided regional information to growers in collaboration with the Research Station.)
[^5]: Committee report of August 22, 2005.
[^6]: According to the appellants’ expert analysis, test results showed Dyfonate failed to meet the stand loss percentage criterion in 21.2 per cent of trials. Dr. Grafius reviewed the same sets of tests and noted that for those trials that included Lorsban, Lorsban failed to meet the criterion in 67 per cent of trials. Furthermore, Dr. Grafius pointed out that the appellants’ expert tested Dyfonate’s performance by looking at tests from as far back as the 1960’s, even though the 1995 Dyfonate product formulation was quite different.
[^7]: Onions are generally planted around May 1. The evidence established that some of the appellants’ fields were planted slightly earlier in 1995, beginning in some fields as early as April 20, although the majority of fields were planted at the end of April or in the first week of May.
[^8]: The insurer came to the Horodynsky farm on June 22 to talk about insurance coverage for an additional twelve acres of crops. During that visit, Mr. Horodynsky only told him that his onion crop was growing normally, except that the onion maggot flies were more active than usual and were damaging his crop.
[^9]: The Horodynsky data showed only nine flies per day per trap.
[^10]: As well, the Horodynsky farm applied Dyfonate to some fields in 1993.