Court Awards Over $3 Million In Damages Against Saskatchewan Broiler Hatching Egg Producers' Marketing Board

• Published date: 29 June 2020
• Subject Matter: Litigation, Mediation & Arbitration, Food, Drugs, Healthcare, Life Sciences, Trials & Appeals & Compensation, Food and Drugs Law
• Law Firm: MLT Aikins LLP
• Author: Mr Aaron Vogel, Jessica Buhler and Rangi Jeerakathil

In Pedigree Poultry Ltd. v. Saskatchewan Broiler Hatching Egg Producers' Marketing Board, 2020 SKQB 100 ("Pedigree Poultry"), the Saskatchewan Court of Queen's Bench found the Saskatchewan Broiler Hatching Egg Producers' Marketing Board (the "Board") and two of its previous directors liable for the tort of misfeasance in public office.

The Court awarded the plaintiffs more than $3 million in general damages and $75,000 in punitive damages.

Background

In Saskatchewan, "marketing boards" are agencies established to regulate and control the production and marketing of particular agricultural products, such as chicken, eggs and milk. All Saskatchewan marketing boards are supply-managed and actively participate in the national supply management system. Each marketing board is responsible for administering a "plan", which is established pursuant to industry-specific regulations.

In Pedigree Poultry, the plaintiffs were producers of broiler hatching eggs. Producers of broiler hatching eggs are subject to quota limits pursuant to orders passed by the Board. In other words, each "production unit" owned by a producer can only produce up to a specified number of eggs per year. The Board and two of its directors formed the opinion that the plaintiffs were essentially using a "sham" corporate structure to circumvent the Board's quota limit order. Relying on this belief, the Board and its directors made certain decisions cancelling the plaintiffs' quota and failing to award them additional quota.

The plaintiffs brought an action seeking damages on the basis that the Board and two of its directors had committed the tort of misfeasance in public office.

Decision

In order to establish misfeasance in public office, the claimant must show:

• deliberate unlawful conduct in the exercise of public functions; and
• awareness that the conduct is unlawful and likely to injure the plaintiff.

Misfeasance in public office can be made out if the public officer acts for the purpose of harming the plaintiff or if the public officer is aware their conduct is unlawful and likely to harm the plaintiff.

Ultimately, the Court found that the Board and two of its directors had committed the tort of misfeasance in public office. Specifically, the Court relied on:

1. Statements one of the directors had made to a purchaser of broiler hatching eggs suggesting that one of the plaintiffs would not have the quota available to fulfill an...