Agricultural Law Netletter – June 7, 2018

HIGHLIGHTS

The extent to which the Canadian Food Inspection Agency owes a duty to Canadian potato producers to negotiate on their behalf with foreign governments and agencies has recently been considered by the New Brunswick Court of Appeal. The Court upheld a trial decision which dismissed a $3.5 million damage claim made by two New Brunswick seed potato exporters who alleged that the CFIA had breached its duty of care to negotiate with the Government of Venezuela for the release of seed potatoes which had been delivered to an agency wholly owned by the Government of Venezuela, but which had been rejected due to alleged non-compliance with standards set out in Phytosanitary Certificates issued by the CFIA. The trial Judge had concluded that the CFIA owed a prima facie duty to negotiate on behalf of the potato producers based on a internal CFIA policy which set out CFIA's "responsibilities". The Court of Appeal also upheld the trial Judge's conclusion that this prima facie private law duty of care was negated by compelling policy considerations which limited the extent to which CFIA could negotiate and required CFIA to tread carefully to maintain the larger trade relationship with Venezuela. (Cropvise Inc. v. Canadian Food Inspection Agency, CALN/2018-015, [2018] N.B.J. No. 110, New Brunswick Court of Appeal) NEW CASE LAW

Cropvise Inc. v. Canadian Food Inspection Agency;

CALN/2018-015,

Full text: [2018] N.B.J. No. 110;

2018 NBCA 28,

New Brunswick Court of Appeal,

J.C.M. Richard, B.L. Baird and R.T. French JJ.A.,

May 24, 2018.

Canadian Food Inspection Agency -- Private Law Duty of Care -- Protecting the Interests of Canadian Exporters -- Duty Negated by Policy Considerations.

Cropvise Inc. and Wolf & Wolf Seeds Inc. (collectively "Cropvise") sued the Canadian Food Inspection Agency (the "CFIA") for damages in negligence. Cropvise alleged the CFIA was negligent in its efforts to negotiate with Venezuelan authorities for the release of their seed potatoes, which had been rejected for entry into the country following an inspection at a Venezuelan port.

Cropvise had entered into contracts to supply seed potatoes to a company owned by the Venezuelan Government.

Cropvise delivered the potatoes in refrigerated containers which arrived at the Venezuelan port between November, 2009 and April, 2010.

An initial shipment was accepted without incident, however on December 6, 2009, 16 containers were rejected by the Venezuelan authorities, out of a shipment of approximately 50 containers.

The Venezuelan authorities alleged that the rejected potatoes did not meet the standards represented in the Phytosanitary Certificates which accompanied the potatoes.

The Certificates were issued by the CFIA pursuant to the International Plant Protection Convention (the "Convention") and a Bilateral Potato Protocol between Canada and Venezuela (the "Protocol").

In response to the rejection, the CFIA sent two inspectors to Venezuela, and had the rejected potatoes reinspected in the presence of Venezuelan inspectors. The CFIA inspectors advised the Venezuelan authorities that...