COURT FILE NO.: 13-2013SR
DATE: 2019/10/07
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
2231359 Ontario Inc.
Plaintiff
– and –
Canborough Farms Inc.
Defendant
Michael Blackburn, for the Plaintiff
Benjamin Waterman, for the Defendant
HEARD: April 16, 17 & 18, 2019
George J.
[1] The Plaintiff company operates under the name EATAAM Pork. It raises and sells early wean pigs. The Defendant Canborough Farms (“Canborough”) is in the business of raising and breeding livestock.
[2] The Plaintiff claims that the parties entered into a verbal contract for Canborough to purchase its vaccinated early wean pigs. There are three invoices in question. Canborough did not pay a July 25th, 2012 invoice in the amount of $18,936.57; an August 2nd, 2012 invoice in the amount of $20,201.50; and part of a July 20th, 2012 invoice in the amount of $9,747.32.
[3] Canborough claims that it paid for the pigs it agreed to purchase. With respect to the pigs covered by the unpaid invoices Canborough claims that it simply allowed the Plaintiff to house and assemble them in the barn it was then leasing. In other words, it acknowledges having purchased some of the pigs in the barn, but not all. This is the basis of Canborough’s counterclaim. It says the Plaintiff owes it $3,961 plus HST which is the cost it incurred to feed the Plaintiff’s pigs.
[4] This trial occurred over parts of three days. I heard from several witnesses. On behalf of the Plaintiff corporation, its principal Jeff Williamson (“Williamson”) testified, as did Ron and Cody Janmaat of Janmaat Nurseries. On behalf of Canborough, its owner Timothy Minor (“Minor”) testified as did his employees Dallas Reimer (“Dallas”) and Matthew Lee (“Lee”).
[5] The issue is, whether Canborough took delivery of the pigs pursuant to an oral contract of purchase and sale. The Plaintiff submits that it has established the existence of this oral contract on a balance of probabilities. As indicated, Canborough submits that it simply permitted the Plaintiff to assemble the pigs in a barn it was renting.
[6] Williamson testified. He produces 40,000 pigs per year. He spoke at length about his work, the genetics he uses to produce his pigs, the process of insemination, and the various stages of production from birth to nursery to slaughter. He produces early wean pigs and then sells them to others who bring them to market.
[7] He testified that he met with Minor in the spring of 2012 about pigs he would soon have for sale. Williamson recalled that Minor expressed an interest in buying the pigs and in locating nursery space closer to the Plaintiff’s barn. They did not at that time reach an agreement.
[8] Soon thereafter they did reach an agreement for the Plaintiff to deliver pigs on a trial basis. This arrangement – which had the Plaintiff deliver pigs to a nursery Canborough was using in Dundalk – was intended to provide Minor an opportunity to evaluate the health of the Plaintiff’s early wean pigs and to allow for more time to locate a larger nursery near the sow barn. Williamson says this deal required him to place pigs in the nursery and that Canborough would feed them and pay the nursery costs.
[9] Williamson testified that after a couple of weeks Canborough decided to purchase the pigs outright. Williamson submits that Canborough agreed to purchase them for $35 per pig plus vaccination costs. Williamson sent an invoice on June 18, 2012 (dated June 15, 2012) for $97,043.92 which Canborough paid in full.[^1] These deliveries – from May 16 to June 8, 2012 – were to the nursery in Dundalk.
[10] Williamson testified that he continued to fill the Dundalk Nursery as agreed while Minor attempted to find a nursery closer to the sow barn. Indeed, later in June 2012 Canborough found and leased a larger nursery in Dublin, Ontario (“Janmaat Nursery”). At this point Canborough had still not decided to purchase all of the Plaintiff’s pigs. There were, however, discussions about a sharecropping agreement. As I understand the Plaintiff’s position, while it was initially contemplated that the Janmaat Nursery would be for sharecropping, Minor ultimately decided to purchase the pigs. A copy of the Nursery Barn Production Agreement between Canborough and Ron Janmaat was filed.[^2] I will return to this.
[11] Williamson delivered pigs to the Janmaat Nursery on each of June 18th, 20th and 22nd. Canborough paid for these. Further deliveries were made on each of June 25th, 27th and 29th. Canborough paid for these. The Plaintiff delivered more pigs on July 2nd, 4th and 6th. Canborough paid for these as well.
[12] This is when difficulties began. Williamson delivered pigs on July 9th, 11th and 13th and sent an invoice on July 20th in the amount of $29,555.78. Canborough did not pay this invoice in full. It paid $19,808.46 leaving a balance of $9,747.32. As I understand it, the shortfall represents the pigs delivered on July 13th (together with vaccinations).
[13] Pigs were delivered again on July 16th and 20th with an invoice sent on July 25, 2012. Canborough has made no payments on this invoice.
[14] The final deliveries occurred on July 23rd and 26th with an invoice dated August 3, 2012. Canborough has paid nothing on this account. The total balance owed is $48,855.40 which is shown on a final invoice issued by the Plaintiff on August 31, 2012.[^3]
[15] Williamson was taken through the Janmaat Nursery inventory sheets. I learned that Williamson had not before seen these as they were completed by the Janmaats and then given to Minor and his production supervisors. According to Williamson, this made sense as he did not need to see or review them as the pigs tracked on these sheets were not his.
[16] Williamson drew my attention to para. 3(l) of the Nursery Barn Production Agreement between Canborough and the Janmaats which provides that:
- Producer [Janmaat Nursery] Shall:
(l) Maintain Commercial General Liability Insurance with a minimum limit of $2,000,000.00 extended to include CFI [Canborough] as additional insureds. Producer agrees to save harmless from any liability for personal injury, bodily injury including death, and property damage including pollution and/or environmental damage, that may result from the “Producer” operations. Producer agrees to maintain a limit of non-owned livestock coverage in an amount that is at least equal to the maximum value of the pigs in his care.
[17] This, he argues, is evidence that the pigs in that barn were not his. They were Canborough’s which is why it contracted with Janmaat to insure the full value of the pigs in the barn. That was done to protect Canborough not the Plaintiff.
[18] He also pointed to clause 4 of that agreement which sets out Canborough’s obligations including, inter alia, the provision of weaned pigs that will “remain the property of [Canborough] until marketed by [Canborough]”; the furnishing of pig feed, medications etc.; and the provision and maintenance of Broad Names Perils Livestock Insurance (to include adequate business interruption insurance). The question Williamson asks is, if these were not Canborough’s pigs why did it agree to this?
[19] Williamson testified that on July 25, 2012, shortly after a delivery to the Janmaat Nursery, Minor called him and expressed several concerns. In short he was getting anxious about feed costs and corn prices. At that time hog futures were indeed falling off. Williamson claims that Minor asked him about other potential pig buyers. Williamson agreed to call around and gauge interest. Minor and Williamson spoke on the phone again the following day. Minor once again inquired about other buyers. Williamson says he advised Minor that while it was difficult to find interested buyers, a gentleman named Pat Clark was prepared to offer $10.00 per pig. Williamson testified that Minor responded by saying “well, I think you should sell them”. This obviously concerned Williamson as, at least according to him, he had already contracted with Canborough to sell the pigs for $35.00. He wondered aloud about who would compensate him for the shortfall if he sold to Pat Clark at his asking price. This conversation ended with Minor telling Williamson that he did not want any more pigs delivered to the Janmaat Nursery.
[20] Williamson testified that he followed up with Pat Clark but since he could not meet his demand for 2000 pigs, no deal was struck. Not only that, he touched base with a gentleman by the name of Gary Dauphin who, while interested, did not have the space to accommodate the pigs on short notice.
[21] According to Williamson, the deal with Canborough was cancelled on July 26, 2012 which to him appeared to be the result of Minor’s skittishness about hog futures and corn prices.
[22] As I understand it, Pat Clark ultimately did buy 1400 pigs from Minor directly and requested that Williamson “top up” that order, which he did. Williamson sold 477 pigs to Pat Clark’s company – Jaken Livestock Services Inc. – at $10.00 / pig. On August 6th Williamson sold 524 more pigs to Pat Clark at the same price.
[23] Williamson testified that he does not know what happened to the pigs left in the Janmaat Nursery. He stressed that those pigs were not his and he had no contractual relationship with the Janmaats.
[24] Williamson denied having a sharecropping arrangement with Canborough arguing that, for reasons he highlighted throughout his testimony, this made no sense given he had no access to inventory counts nor was he ever sent feed bills. In addition, while I failed to mention this earlier, Williamson consulted with Minor before vaccinating the pigs and did so in accordance with Minor’s wishes. Minor also lobbied to have Williamson switch the semen he was using, which he did. Williamson asks, why would he have followed Minor’s instruction if these were not Minor’s pigs? Focussing for a moment on the semen switch, which was done at Minor’s behest, Williamson says that Canborough would not have received those pigs until at least six months after insemination. Meaning, a long-term contract going forward must have been what the parties contemplated and not a short-term sharecropping arrangement. The bottom line for Williamson is, if he was simply assembling pigs in the Janmaat Nursery he would have made all of those decisions without input from Minor. Not only that, Williamson already owned a barn to assemble his pigs. There was no need for him to transport his own pigs to a leased nursery.
[25] In response to Minor’s claim that theirs was simply a sharecropping agreement and that Canborough merely needed to fill a production gap because of a PRRS[^4] outbreak, Williamson testified that when he initially met with Minor there was no discussion at all about that. Furthermore, if he had been advised of such an outbreak, he would have never allowed Canborough representatives into his barns to inspect the pigs, which he did.
[26] Williamson testified about two issues that he found particularly confounding. First, with respect to the deliveries he made to both the Dundalk and Janmaat nurseries, after receipt of the pigs Minor would send back grade sheets certifying that the pigs were “good”, and only then was an invoice sent out. With respect to the first few deliveries Canborough paid the invoices. Why would Canborough have done so if these were not its pigs? Second, with respect to Canborough’s counterclaim for the feed cost why did it not, during the relevant time, send him bills and seek reimbursement? Williamson says the reason is obvious. He was not the owner of the pigs and therefore not liable to pay the feed cost, and the fact Canborough did not issue invoices for the feed is evidence that it knew this to be the case.
[27] I was also referred to a series of emails that detail Dallas’s offer, on behalf of Minor, to subsidize a software program for the Plaintiff’s sow barn. In one email Dallas wrote that this would help with “longer range planning and barn forecasting”.[^5] In another, Dallas asks that Williamson consider delivering piglets with no teeth clipping. With respect to the software change I learned that its implementation would only become meaningful and effective after the passage of several months. With respect to the teeth clipping Williamson questioned why one would make such a request if they did not intend on purchasing those very pigs? At the very least this would have been the ideal time for Canborough to definitively say that it was not purchasing pigs but, according to Williamson, it did not.
[28] In cross-examination Williamson was challenged on several points. Canborough’s counsel asked him why, for a significant agreement like this, he did not insist upon a written contract at the outset? Williamson’s response was that in this industry verbal contracts are not uncommon. He was also challenged on the parties initial agreement that called for the Plaintiff to place pigs in the Dundalk Nursery and for Minor to supply the feed and pay the nursery costs, with profits and losses being split on a 50/50 basis. Williamson conceded that this was the initial agreement but says it was simply on a trial basis and that the deal changed after Minor expressed a desire to purchase all of his pigs, which is the contract the Plaintiff now seeks to enforce. In other words, there were two verbal contracts. This chronology, according to Williamson, was exactly what was contemplated. Minor would “test” the pigs and buy them going forward if he was satisfied with their quality. If Minor did not like the pigs Williamson contends that the relationship would have ceased before any purchase and sale agreement, but it did not.
[29] Canborough’s counsel focussed intently on the draft Sow Farm Production Agreement[^6] the parties attempted to negotiate but never signed. He also extracted from Williamson a concession that he does not recall the precise words used when the parties entered into what he says was a verbal contract. Williamson can only describe, in the broadest terms, what was agreed to.
[30] It was put to Williamson that any suggestion Dallas and Minor made to change semen was merely a recommendation and not a contractual term. Williamson acknowledged that this was not a specific contractual term, but argued it is evidence that Minor owned the pigs and that his employees understood this to be the case. Otherwise, their recommendation was pointless. Williamson stressed that there was no urgency to finalize a written agreement as the parties were already giving effect to the verbal contract. He was delivering pigs and Canborough was receiving and paying for them, without issue.
[31] In response to counsel’s persistent suggestion that he had only agreed to a sharecropping arrangement, Williamson testified that if this were true he would have been included on the Janmaat Nursery lease, which he was not.
[32] Ron Janmaat of Janmaat Nurseries testified. He works with his son Cody. They rent nursery space to pig owners. They feed the pigs and manage the ventilation system. Ron testified that at the relevant time he was looking for a full-time contract. This is how he understood his arrangement with Canborough. He explained that, if this was not what both parties had contemplated, there would have been no need to include a three month notice period in the lease. In other words, if, as Canborough alleges, this was only to be a short-term contract that condition would have been completely unnecessary. Canborough would have simply set out when the short-term contract was to start and when it was to finish.
[33] Ron was taken through the Nursery Barn Production Agreement, which started on June 11, 2012. Of note is para. 3 which prohibits him from keeping other pigs in the same facility. This bears repeating. The contract between Janmaat and Canborough did not have allow any other pigs into that barn. In addition, the contract required that he not permit any other persons on the premises other than the producer or the producer’s employees (Janmaat), or Canborough representatives and people it specifically approved of. This, the Plaintiff argues, is proof once again that the pigs housed there were the property of Canborough and that it had nothing to do with this other than to deliver the pigs.
[34] Ron was confronted with Minor’s anticipated testimony and evidence on discovery. He could not recall Minor advising him that he was going to stop getting pig deliveries. He could not recall telling Minor “Hey you said pigs weren’t coming but pigs came today”. He also could not recall contacting Minor and saying “looks like we are done because no pigs came today”. He did deny having any conversation with Minor, or Williamson, about Williamson assembling pigs at the nursery.
[35] He further denied any discussions about feeding pigs other than Canborough’s, and when asked about his reaction to Minor no longer wanting pigs in his nursery he testified that “well, we thought it was quite a change from when we signed the contract, to all of a sudden not wanting a contract again, and that was hardly even a month, I wouldn’t think”. He clearly expected the arrangement with Canborough to last much longer than it did and did not believe any of the pigs in his barn were the Plaintiffs.
[36] Cody Janmaat testified. His role at the nursery was to feed the pigs, provide water, complete inventory sheets, and monitor the ventilation system. He testified that during the relevant time they were receiving pig deliveries three days per week and that he was tasked with documenting the inventory upon receipt. He was taken through the various inventory sheets which noted the population at any given time, what was coming in and going out, and the dead stock. To his understanding these were Canborough’s pigs. He testified that: “…my belief is that these would be Minor Bros pigs in these rooms. Not Jeff Williamson’s”.
[37] He did not send inventory sheets to Williamson. He sent them to Minor. When asked about feeding pigs that were not Minor’s he testified that “no, it’s our understanding they were Tim Minor’s pigs”.
[38] Minor testified. He has owned Canborough since 2001. He described his company’s work which is to raise pigs and prepare them for market. He testified that his operation suffered a PRRS outbreak and that, as a result, significant production was lost. This, he says, necessitated a search for additional pigs to plug into his operation as he was then supplying finisher pigs to a food company. He needed to avoid a short fall. This led him to the Plaintiff. He testified that he and the Plaintiff reached an agreement which provided that he would purchase its pigs and put them into the Dundalk Nursery for $35/pig plus a vaccination fee. He says there was no discussion of sharecropping at that time. He required the pigs in order to satisfy his contractual obligations to other parties. The plan was to have one crop at Dundalk.
[39] During his discovery examination, Minor, in response to a question about the nature of the Dundalk Nursery agreement said: “The agreement was not overly defined, but we had conversations about placing pigs there. Pigs that we could use – we would purchase out of there. Jeff was going to look at selling pigs to other places. We were thinking that there was the possibility that we would fill that barn, perhaps even continue to fill it, or even find another barn if that one went temporary on us”. This, the Plaintiff argues, is inconsistent with Minor’s trial testimony. When that was suggested to Minor he said he was “probably confused over which nursery we were talking about”.
[40] Minor was confronted with other inconsistencies between his examination for discovery and trial testimony. I need not repeat them other than to note that Minor himself seemed somewhat confused at trial about what exactly he and the Plaintiff had agreed to.
[41] Minor maintained throughout his trial testimony that his indication that this was a sharecropping agreement was in relation to the Janmaat Nursery only, and that a sharecropping agreement for the Dundalk Nursery did not make sense. He testified that he entered into an arrangement with Janmaat on the understanding that he could use the first two weeks’ worth of pigs while he and the Plaintiff attempted to finalize their longer term sharecropping deal. He was referred to the draft Sow Farm Production Agreement that Williamson spoke of. He characterized this as a sharecropping agreement.
[42] The problem with Minor’s testimony on this point is that the approximate start of the Sow Farm Production Agreement was May 16, 2012 which makes little sense if, as he contends, a sharecropping agreement was never contemplated for the pigs held at Dundalk. When confronted with that incongruity he said he “would have started a draft in early May to cover whatever we were doing at Dundalk. We never did get anything done because we handled it verbally, but going into the Janmaat Nursery, I went back into the same draft copy and started editing and creating this one”.
[43] I had a difficult time wrapping my around this because if that explanation is true prior attempts at crafting an agreement would have been to purchase pigs, not sharecrop, meaning he was attempting to resurrect talks about, and strike a deal, to purchase the Plaintiff’s pigs. His response to this line of questioning was to stress that May 16th was just before their use of the Dundalk Nursery and that he had simply forgotten to change the date. Which must mean that, while Minor forgot to change the effective date of the agreement the proposed contract was radically different than that which he proposed prior to Dundalk. This just does not make sense, especially given his indication on discovery that May 16th was the operative date because it was when pigs were first placed into Dundalk which, if true, means Minor saw no difference between what was occurring at Dundalk and what was to occur at Janmaat. I was, and remain, confused about this aspect of his testimony.
[44] My confusion does not end there. When asked why he did not insist on a short term contract with Janmaat – which would be the reasonable thing to do if all he wanted to achieve was a fill for his production gap – he indicated that he did not believe the Janmaats would have agreed to that. What is significant about this is, he never even proposed it to Janmaat.
[45] What else did I learn from Minor’s testimony? First, while he maintained throughout that he had advised Williamson that he did not want any pigs after July 11th, he did not provide a clear answer as to whether he advised his staff about that. The best he could offer was an indication that two of his employees (Dallas and Lee) would have known how many pigs were needed to fill the production gap. I can only take from this that he did not advise his staff of his conversation with Williamson and that they were not advised of the supposed July 11th cut-off for receiving pigs. It is inconceivable that if there was such a conversation with Williamson, and if he indeed did not want pigs after that date, that he would not have advised his production managers. His testimony that his staff would have been able to look at the inventory sheets, do the math, and figure it out for themselves is absurd. Moreover, I do not for one minute believe that he advised the Janmaats that they were not to accept any pigs after July 11th, which he surely would have done were this tale true.
[46] I pause here to note that later in Minor’s testimony he clarified that “he probably told Matt Lee” that Jeff was assembling pigs, only to then revert to what I understood was his first response which was that “they”, presumably his staff, “would have known around the 18th or whatever it was that Jeff was to assemble the pigs”. I am still not clear on how or why they would have known that unless Minor himself told them, which he does not recall doing. I do not believe he did.
[47] His answers about whether he spoke to the Janmaats about this, and if he did what he specifically told them, was equally unclear. Again, I do not accept that he told them either.
[48] When confronted with Dallas’s email to Williamson about teeth clipping – which was sent on or about July 13th – he acknowledged that it would have taken approximately 21 days after that type of request to receive unclipped pigs. He, however, explained that this was just a “good standard recommendation” and that he had not, at that point, foreclosed the possibility of a sharecropping agreement.
[49] He provided a similar response when asked about why Dallas would have proposed a change in software. He testified that sharecropping was still a real possibility and he just wanted to ensure proper long-range planning and “barn forecasting”. This of course does not explain why Dallas offered to pay for the software.
[50] Dallas testified. While he had a limited role with Canborough he was more involved in Minor’s feed business. He says he was not a part of and therefore could provide no insight into the contract negotiations between the Plaintiff and Canborough. He initially testified that he ceased working for Minor in 2014, although I later learned that he ran a consulting business and that, as part of that business, he continues to have some financial interest in Minor’s feed mill. I point this out because he was quite evasive about this and reluctant to concede anything. I am not entirely certain why, although I note that when asked if he still felt loyalty towards Minor his response was “I guess so”.
[51] As indicated Dallas says he had no role in contract negotiations between the parties. That said, he seemed to know a fair bit about it which is information he could have only learned from Minor, which concerned me given he told us that he had “very little” contact with Minor leading up to this trial. My concerns about his reliability and credibility were only heightened when, after being confronted about his knowledge of matters he had no direct involvement in, he indicated that he had gained this knowledge from being sent and copied on Minor’s emails. This is problematic as I was not provided with any such emails nor, as I understand it, were any produced through the discovery process.
[52] In any event, he did not remember being told of an exact date when they were to stop receiving the Plaintiff’s pigs. He acknowledged receiving the inventory sheets from the Janmaat Nursery. And while he initially attempted to be coy about this, he ultimately conceded that the inventory sheets he received did not in any way distinguish ownership of the pigs. Not only that, he did not seem all that concerned about this lack of differentiation which was odd given he was, I believe, called as a witness to confirm that Canborough did not own the pigs he was receiving inventory sheets for.
[53] Furthermore, he acknowledged that inventory sheets were to track production which only heightened the problems with his evidence and Canborough’s position on this trial, which was some of the pigs in the Janmaat nursery were Minor’s and some were Williamson’s. This makes absolutely no sense. When challenged on this he ultimately conceded that “we were taking all of the pigs that were going in there”.
[54] His evidence did not assist in advancing Canborough’s theory of the case. To the extent it was helpful at all, it only confirmed the Plaintiff’s position.
[55] Lee testified. He was a production manager who worked for Minor from 2010 to 2014. He too continues to have a financial interest in Minor’s business. I was told that he and Minor share ownership in a company called Leeridge Pork, which produces pigs. He also owns Leeridge Farms which contracts with Leeridge Pork.
[56] He spoke to the supposed production gap caused by the PRRS outbreak. He confirmed that Canborough needed pigs to fill that gap. He could not recall much about the Dundalk Nursery other than to say that the Plaintiff delivered pigs there which were, when ready, transported to Canborough’s finishing barn.
[57] He testified about a conversation he had with Minor about feed costs recalling that Williamson was going to be assembling some of his pigs in the Janmaat Nursery. He says he did calculate a feed cost as, according to him, pigs (that were not Canborough’s) continued to be supplied and they continued to feed them.
[58] Like Dallas, this testimony fell apart quite quickly. He acknowledged that he received the Janmaat inventory sheets, which made sense as he was the production manager. But he agreed, as did Dallas, that the inventory sheets did not detail who owned which pigs. This is critical because for the life of me I cannot figure out how Canborough’s position can hold when not one witness can assist me in identifying which of the pigs in the Janmaat Nursery were Minor’s and which were Williamson’s. I have tried to make sense of this but cannot. By the same token, how could Lee have calculated a feed cost for Williamson’s pigs if he could not determine which pigs were his.
[59] Similarly, Lee’s testimony about his contact with Mike Luyks about the semen Williamson was using was confounding[^7]. While he confirmed receiving such an email from Luyks he could not explain why he would have been having a conversation like that with anyone about what semen Williamson was using. The significant point here is, if these were Williamson’s pigs why would Canborough representatives care about what semen was being used.
[60] Canborough argues that the Plaintiff has failed to establish, on a balance of probabilities, that a contract existed. It contends that, even if there was a general discussion about Canborough purchasing all of the Plaintiff’s pigs, there is a lack of clarity and certainty about what exactly was agreed to. In its written submissions it cites this passage from the Canadian Encyclopedic Digest[^8]:
Even when parties intend to contract, the essential terms of the bargain must be agreed and possess a sufficient degree of clarity before a legally binding agreement can be said to exist. Where, therefore, an agreement is incomplete because essential provisions have not been settled, or the agreement is too general or uncertain to be valid in itself, or the understanding of the parties is that their legal obligations are to be deferred until a formal contract has been executed, no binding contract will have been created, even if the parties may have thought they were bound. In such circumstances, the purported contract is often characterized as a mere “agreement to agree” or an agreement to negotiate, which is not legally enforceable. Where, on the other hand, the parties have settled all disputed primary terms and expressed their agreement with sufficient reasonable certainty to allow the court to give it practical meaning, their agreement will bind them, even if a formal written document is thereafter to be prepared and signed.
[61] Canborough concedes that it agreed to purchase, and indeed purchased, the pigs delivered to the Dundalk nursery. All invoices for those pigs were paid in full. As for the pigs delivered to the Janmaat nursery it argues, first, that there is no contract and that, second, even if each party believed there was an agreement it is unenforceable. It argues that there was no offer, no acceptance of an offer, no consideration, and no “meeting of the minds” on the essential terms of an agreement.
[62] It argues that the terms suggested by Williamson never existed. It contends that the evidence establishes only that it purchased pigs on three discrete occasions. Beyond that, at its highest, there was an “agreement to agree” and that, while there were efforts to negotiate a longer term contract this was unsuccessful.
[63] Canborough highlights the fact that there is no evidence as to the contract’s length, no direction on how one party might terminate the contract, and beyond the delivery of pigs no clear evidence on the contract’s terms.
[64] Canborough’s counsel argues that it would have made no sense for Minor to agree to such a deal without having it reduced to writing. It further points to an email from Minor to Dallas wherein he writes “the Quebecers pulled a ‘no show’ to the first meeting. No Jeff wants to contract the Janmaat nursery himself and have us purchase half the feeder pigs and he’ll sell the other half”. This email, he argues, confirms Minor’s evidence that during the relevant time Minor was attempting to find other buyers for his pigs and is inconsistent with Williamson’s contention that Canborough was going to buy “all of the pigs”. All of which is consistent with Minor’s testimony that there was no long term deal but rather a short term agreement to address his production gap. Which is why Williamson and Minor continued their efforts to strike a longer-term deal. In other words, if they had in place a clearly defined long-term agreement why would they have continued to negotiate?
[65] The Plaintiff submits that Williamson’s testimony can be relied upon as he was thorough, consistent, responsive, and able to detail all terms of the agreement he says existed with Canborough. More than that Williamson’s testimony, unlike any of Canborough’s witnesses, made sense and fit logically within the broader context. In other words, Williamson’s testimony that the parties had initially discussed sharecropping in respect of the Dundalk Nursery but moved ahead with a purchase agreement is consistent with all of the other evidence.
[66] The Plaintiff, correctly in my view, frames this as a question of credibility. It argues that the accounts of each Canborough witness were vague, self-serving, inconsistent, and stand in stark contrast with Williamson’s.
[67] As I indicated earlier in these reasons the issues are straightforward. Did a valid and enforceable contract exist as between the parties? Perhaps the better question to ask is, has the Plaintiff established on a balance of probabilities that the contract Williamson says existed is valid and enforceable? Second, if the Plaintiff has met its onus what specific terms were agreed to?
[68] I agree with the Plaintiff and find that none of Minor, Dallas, nor Lee were credible. I am going to cite several points that call their entire accounts into question.
[69] First, the initial invoice issued by the Plaintiff contained several weeks of deliveries. Why would the Plaintiff have prepared and sent that invoice if sharecropping was still being discussed but not yet worked out on a final basis?
[70] Second, the written agreement that the parties were attempting to negotiate, and which was never finalized, is dated May 16, 2012, the exact date pigs began being delivered to Dundalk. Minor’s testimony that this was simply an old contract that was on his computer and he just forgot to change the date on it, is incapable of belief. This explanation makes no sense on its face and is inconsistent with his examination for discovery.
[71] Third, and what concerns me most about Minor’s evidence, is the nursery agreement he signed in late June 2012. He says he agreed to the three-month termination clause while simultaneously claiming that he did not need any pigs beyond July 11th. I was confused when I heard this, and continue to be confused. In fact my confusion was compounded when Minor then testified that he terminated the Janmaat lease in late July which is, according to him, long after he needed the nursery for pigs he claims he did not want.
[72] Fourth, the offer to subsidize the Plaintiff’s purchase of a new software program (on July 3rd), the request that Williamson cease clipping the pigs teeth (July 13th), and the request that Williamson use different semen (July 20th) all casts doubt on the evidence of Minor, Dallas and Lee and is consistent with Williamson’s testimony. Minor’s contention that he basically did all of this out of the goodness of his heart was absurd. These were not mere recommendations; they were efforts to, in his view, improve the quality of the pigs he was purchasing.
[73] Fifth, the testimony of both Ron and Cody Janmaat confirm Williamson’s understanding of the agreement. Each of them understood that all of the pigs that were being delivered to their nursery were Canborough’s. There was absolutely no reason for them to think otherwise and the inventory sheets that they prepared – and which were never, in real time, questioned by Minor – were obviously prepared on the basis that the inventory was Canborough property.
[74] Williamson, Ron Janmaat, and Cody Janmaat were all credible witnesses.
[75] I must still determine whether the Plaintiff has sufficiently established the terms of the contract. Canborough claims that the requisite elements of contractual formation do not exist. The Plaintiff argues that, while Williamson was unable to recite verbatim the contractual terms, the strongest evidence in support of a valid contract is Minor’s own conduct in accepting delivery of and paying for pigs that were delivered throughout the spring of 2012 and on July 11th. It urges me to consider the circumstances surrounding the July 12th delivery, which Minor accepted on the same terms but simply decided he was not going to pay for them.
[76] I agree with the Plaintiff. Canborough does not dispute that there was a contract in place for it to purchase the pigs delivered on July 11th and before. It is therefore disingenuous at best to say that one did not exist on July 12th. I note also that in this litigation the Plaintiff is only seeking to be paid for the pigs it actually delivered. I have no clue as to why or on what basis Canborough believes it should not have to pay for pigs it accepted into a nursery it was leasing.
[77] The evidence is overwhelming that Canborough accepted delivery of the pigs after agreeing to purchase them, and that the reason it decided not to pay for some had nothing to do with the contract not being properly formed, but for other extraneous reasons unrelated to the agreement between these parties.
[78] I agree with the Plaintiff that all of the evidence, without exception, confirms that Canborough treated all of the pigs it received in the Janmaat nursery as its own. There is a complete dearth of evidence in support of Minor’s contention that Williamson was assembling pigs in that nursery. In fact, two pieces of evidence effectively prohibit such a finding. First, Canborough never invoiced the Plaintiff for pig feed, and second, all of the pigs were included in the inventory sheets with no distinction drawn between those owned by the Plaintiff and those owned by Canborough.
[79] I reject out of hand Canborough’s contention that Minor would have never agreed to this verbally and without a written contract. The reality is Minor did just that in respect of the pigs delivered to the Dundalk Nursery and did accept and pay for pigs, again on the same terms as Dundalk, after the move to Janmaat.
[80] I also reject Canborough’s argument that I should draw an adverse inference against the Plaintiff for not calling either Pat Clark or Williamson’s wife. In my view McKinnon J.’s comments in Sonibrand-Farm v. Ferme Rudolf Hefti[^9] do not apply in these circumstances. Furthermore, if Canborough felt so strongly that either of these two individuals had material evidence to give it could have called them. This is important as, while the Plaintiff bears the onus in this case, on this particular issue – whether and why Williamson’s wife made notations on the draft contract the parties were exchanging – was raised by Canborough. Therefore, despite the Plaintiff’s overall burden to prove its case, when a party asserts a particular fact or theory that party bears the onus of establishing the evidentiary basis for it. It cannot simply fail to address it at trial, make no effort to secure this testimony, and then argue at the end of the day that I should draw adverse inferences against the other party for not tendering the evidence.
[81] Williamson’s evidence was clear. He sold pigs to Canborough. Pigs that Canborough accepted, and for whatever reason thought it did not have to pay for. If Canborough thought Williamson’s wife and or Pat Clark could shed any light on this, or otherwise support its position, it could have called either or both of them.
[82] In the result I make this order:
i. Judgment granted in favour of the Plaintiff.
ii. Canborough shall pay to the Plaintiff the sum of $48,885.40.
iii. Pre and Post-judgment interest is ordered in accordance with ss. 128 and 129 of the Court of Justice Act.
iv. Canborough’s cross-claim is dismissed.
[83] Should the parties not agree on costs, I invite brief written submissions not to exceed three pages in length (excluding a cost outline and any authorities relied upon). The Plaintiff shall serve and file its submissions on or before October 25, 2019. Canborough must serve and file on or before November 8, 2019. There is no right of reply.
“Justice J. C. George”
Justice Jonathon C. George
Released: October 7, 2019
COURT FILE NO.: 13-2013SR
DATE: 2019/10/07
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
2231359 Ontario Inc.
Plaintiff
-and-
Canborough Farms Inc.
Defendant
REASONS FOR JUDGMENT
George J.
Released: October 7, 2019
[^1]: Tabs 10 and 11 of Trial Exhibit #1 – These two invoices are for the same deliveries.
[^2]: Tab 7 of Trial Exhibit #1 – Production Agreement.
[^3]: Tab 27 of Trial Exhibit #1 – Final invoice dated August 31, 2012.
[^4]: Porcine Reproductive and Respiratory Syndrome: a viral disease that causes reproductive failure in animals and respiratory tract problems in young pigs.
[^5]: Tab 35 of Trial Exhibit #1 – July 3, 2012 email from Dallas Reimer.
[^6]: Tab 5 of Trial Exhibit #1 – Unsigned Draft Sow Farm Production Agreement between Canborough and Eataam Pork (Jeff & Rebecca Williamson) dated May 16, 2012.
[^7]: Tab 37 of Trial Exhibit #1 – Email from Mike Luyks to Matthew Lee dated (July 2012). Luyks advises Lee that they had enough semen to satisfy the Plaintiff’s needs going forward.
[^8]: Canadian Encyclopedic Digest, Contracts I – Basis of Contract, 3 – Uncertainty and Incompleteness of Terms.
[^9]: 2010 ONSC 6863