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The Supreme Court of British Columbia recently released its decision in 602491 B.C. Ltd dba Sidhu Growers v. J.M. McConkey & Co. Inc., 2021 BCSC 1300. This product liability case involves a blueberry nursery that claimed the plastic pots/containers that it had purchased were defective, thereby resulting in compromised blueberry plant growth and financial loss. Singleton Reynolds represented the Defendant, J.M. McConkey & Co. Inc (“McConkey”), and persuaded the Court to make an award to the Plaintiff, 602491 B.C. Ltd dba Sidhu Growers (“Sidhu Growers”), which was a significantly reduced amount of damages than asserted. In rendering the decision and assessing the quantum of damages, the Court considered evidentiary issues of credibility and spoliation, as well as legal issues related to breach of warranties and causation.
Sidhu Growers is an Abbotsford-based blueberry nursery that is co-owned and operated by Harry Sidhu (“Mr. Sidhu”) and his brother. This action concerns Sidhu Growers’ business which primarily propagates blueberry nursery plants for sale to commercial blueberry growers. McConkey is a Washington State horticulture goods manufacturer and distributor in the business of manufacturing plastic products such as pots and trays.
In June 2012, after testing out some samples, Mr. Sidhu ordered and received about 157,000 square plastic pots from McConkey. For the 2013 growing season, Mr. Sidhu again purchased pots from McConkey, and approximately 800,000 blueberry plant plugs were transplanted into the pots. By early July 2013, he noticed that the blueberry plants were not growing uniformly and had poor colour. A number of the pots had a plastic flashing covering some of the drainage holes in the pots, and inconsistent drainage holes in the pots used was identified as a potential cause.
Sidhu Growers commenced legal action against McConkey on January 7, 2015. Though the majority of its 2013 crop was eventually sold, Sidhu Growers claimed over $800,000 in damages. Sidhu Growers alleged that it had incurred the additional work of having to repot, hand water, hand prune or otherwise dispose of the plants as a result of the defective pots. Furthermore, since the 2013 plants required more time to grow to a marketable level, it took up space that would have been used for new plants, thereby causing loss of sales through displacement.
The Court’s Decision
The Court ultimately found that McConkey had breached the implied warranty that their pots were reasonably fit for the purpose of growing blueberry plants, as a result of some of the pots having flashing over some of the drainage holes in the pots. Furthermore, for a portion of Sidhu Growers’ blueberry crop, McConkey’s pots caused or contributed to increased time for the plants to mature to a saleable condition or failure to reach saleable condition. However, the Court found that the loss suffered by Sidhu Growers was significantly less than what they claimed and, as a result, awarded significantly reduced damages.
Evidentiary Shortcomings of the Plaintiff
Sidhu Grower submitted that Mr. Sidhu was an “unsophisticated litigant”; however, the Court noted his business acumen, familiarity with litigation, and prior demonstrated understanding of the importance of proof diluted that characterization. In relation to its 2013 plants, Sidhu Growers was sued by their customer J & J Farms Ltd. (“J & J Farms”) for allegedly delivering diseased plants. In defence, Sidhu Growers and its experts maintained that the entire crop of blueberry plants were healthy and fit for sale. For the present action, which overlapped in time and issues with the J & J Farms litigation, Sidhu Growers and its experts maintained that a number of the blueberry plants were unhealthy. The Court noted that the failures of Mr. Sidhu and his expert Mr. Baumann to disclose their involvement in the J & J Farms action and their inconsistent testimonies negatively affected their credibility. More specifically regarding Mr. Sidhu’s credibility or reliability, the Court also noted his failure to keep records of his operations, and his lack of details regarding the specifics of his business and past loss.
The evidentiary issue of spoliation was also raised in this case. McConkey pointed to Mr. Sidhu’s disposal of an alleged 100,000 defective pots said to contain unrecoverable plants, saving none, over three and a half years despite having started legal action during that period. McConkey submitted that they were entitled to a rebuttable presumption that the disposal of pots constitutes evidence that was harmful to Sidhu Grower’s case. While the Court found that spoliation was not established, the Court noted that Mr. Sidhu’s disposal of pots was one of the many evidentiary shortcomings in Sidhu Growers’ case.
Breach of Warranties
The Court found that a number of McConkey’s pots breached the implied warranties based on sections 18(a) and (b) of the Sale of Goods Act as they were not fit for purpose and not of merchantable quality. In making this finding, the Court noted that a significant number of pots did not meet the quality standard set by McConkey themselves in respect to flashing over the drainage holes. McConkey also understood the importance of drainage holes and consistency across the batch of the pots for Sidhu Growers’ blueberry plants. The Court reasoned that a reasonable commercial purchaser for blueberry plant pots upon examination and observing the flashing occluding in varying degrees the drainage holes of the pots should have and would have rejected the pots.
Sidhu Growers submitted that the inconsistent and compromised drainage in the McConkey pots caused the injuries to its crop and business. It claimed that excessive water retention prevented the plant plugs from forming roots and caused dieback of the roots by asphyxiation.
An expert report prepared by Mr. Baumann was tendered to support Sidhu Growers’ position on causation. He opined that the source of the 2013 crop’s growth problems was the inconsistent drainage caused by the lack of holes or partially occluded holes on the bottom of the pots. In response, McConkey’s experts pointed out several deficiencies in Mr. Baumann’s investigative methodology such as his small sample size of just four potted plants and the absence of any laboratory testing. As a result, the Court was not persuaded by Mr. Baumann’s extrapolation of the test results and noted his failure to use laboratory testing. Furthermore, the Court was concerned that Mr. Baumann had lost sight of the difference between being an advocate for his client and expert for the court. Specifically, the Court noted his involvement in the J & J Farms litigation; his initial role as an advisor to Sidhu Growers; his subsequent role as its expert during litigation; and the inconsistencies between his J & J Farms report and his report for this action despite the overlap in time and issues. These issues reduced the weight the Court placed upon Mr. Baumann’s expert evidence.
Overall, the Court found it more likely than not that many plants were negatively affected by poor water drainage caused by occluded drain holes. However, the Court did not accept that the entire or even a substantial group of plants in the McConkey pots were harmed. The Court further determined that poor drainage holes were one of multiple causes for Sidhu Growers’ plant problems in 2013. Other causes included overwatering, over fertilization, poor media mix, and temperature. These findings were taken into account for the assessment of damages.
Quantum of Damages
McConkey submitted that if causation were to be established, then the extent of the damages is considerably lower than the amount asserted by Sidhu Growers, and that there was no reliable evidence as to the quantum of the loss. The Court agreed and noted that Sidhu Growers largely relied upon Mr. Sidhu’s frail recollection and impression to establish its significant claim. Mr. Sidhu stated that he had never experienced significant plant loss prior to the events that spurred this action, but McConkey adduced evidence to the contrary in the form of an email sent by Mr. Sidhu to Mr. Baumann that contained detailed information regarding the annual loss of specific varieties over several years. The Court took the losses set out in the email as reflective of normal regular occurrence and declined to accept the entirety of Sidhu Growers’ substantial claim based on Mr. Sidhu’s unconvincing evidence.
McConkey further submitted the limitations of the expert reports tendered by Sidhu Growers. The experts – Mr. Baumann and an accounting expert Greg Williamson – used unverified data provided by Mr. Sidhu in their reports and failed to incorporate information that was disadvantageous to Sidhu Growers’ claim.
The Court took into account the issues with Mr. Sidhu’s reliability; the limitations of the expert reports; Mr. Baumann’s observation of the good health of the entire blueberry crop in 2014; the annual loss of plants in the normal course at the nursery; as well as various other findings to conclude that the overall loss both in numbers and the values asserted by Sidhu Growers was much smaller than claimed. Ultimately, the Court awarded $123,673 to Sidhu Growers – significantly less than the amount claimed.
Note that this decision is currently being appealed by Sidhu Growers.
Product liability claimants often assert significant injuries and substantial monetary loss arising from an alleged defective product. However, manufacturers and distributors should keep in mind that the quantum of damages awarded by courts can be significantly reduced from the amount claimed in certain circumstances. In this case, McConkey was successful in lowering the damages sought by Sidhu Growers in an amount over $800,000 to an award of damages at approximately fifteen present of the claimed amount. This decision highlights several factors that courts will consider to assess and determine the quantum of damages, including the reliability and credibility of experts and witnesses, and evidentiary issues that weaken causation and lead to a diminished claim.
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