Judge dismisses Sweda Farms' long-running action against egg giant Burnbrae Farms

Friday, February 28, 2014

by BETTER FARMING STAFF

An Ontario Superior Court of Justice has dismissed a court action against one of those named in a long-running civil case against several players in Ontario’s egg industry.

On Monday, Judge David L. Corbett dismissed all of  Sweda Farms Ltd. and its related companies’ legal action against Burnbrae Farms Limited and related companies, Burnbrae Holdings Inc. and Maple Lynn Foods Limited.

Sweda failed to provide “expert evidence to put its case into context,” or the analysis to back its claims against Burnbrae, Corbett wrote in his decision. “It would be a grave injustice to Burnbrae to require it to continue its defence of these sprawling, speculative claims, to produce the vast quantity of documents Sweda asserts it needs, and to submit to a trial at which Sweda proposes to call upwards of 100 witnesses.”

In 2008, Sweda Farms, formerly Ontario’s third largest egg grader, took action against Burnbrae, the province’s largest egg grader as well as its second largest, L.H. Gray and Son Limited and others, claiming they had conspired to undermine the company’s business. Sweda had also made similar allegations in a 2005 court action against the Egg Farmers of Ontario (then the Ontario Egg Producers), its executive director, Harry Pelissero and another individual formerly employed by the organization. The two suits were merged in 2011. Allegations have not been proven in court.

Last year, Burnbrae filed a motion asking the judge to make a summary judgement about the allegations it faced. (The Ministry of the Attorney General defines a summary judgement as “a motion for a final order without a trial on the basis that there is no genuine issue for trial because the evidence favouring one of the parties is overwhelming.”) Arguments for the motion were heard in Toronto in October. 

Burnbrae’s lawyer, David McCutcheon, who has been involved in the case since 2008, says the decision “means the case is over for Burnbrae unless the decision is appealed by the other side and we don’t know whether they intend to appeal or not.”

Sweda has 30 days from the date the decision was issued to file an appeal, he says.

The judge has also ordered Sweda to pay Burnbrae’s court costs. Just how much that might be, “I don’t know,” McCutcheon says. “We’ve got some people working on it here so at the moment I don’t know how much that would be.”

The case continues for the others named, he adds.

What impact the decision might have on how they will proceed is not yet clear.

“Our lawyer is taking a look at that,” says Harry Pelissero. “But that’s about all I can say right now.” He notes that he has not yet had an opportunity to look at the decision in depth.

“There’s a number of things that obviously are going to be impacted by this decision in terms of next steps by Mr. (Donald) Good, the lawyer (for Sweda) and Burnbrae,” Pelissero says. There might even be the possibility that L.H. Gray may seek a reversal in Judge Carole J. Brown’s decision last year to dismiss its motion for a partial summary judgement, he says.

“As I say it’s early in the analysis of the document,” Pelissero says.

Allison Webster, Gray’s lawyer, said in August the company planned to appeal the decision. She could not be reached for comment in connection with the Monday decision.

Neither could Sweda’s lawyers, Donald Good and Robert C. Morrow.

In his decision, Corbett noted that at the heart of Sweda’s claim was the allegation “that the two largest players in a tightly held industry conspired with each other, and with others, to drive Sweda, a smaller competitor, from the marketplace.” The claim for damage is large, he said, and the conduct alleged “is very serious.”

While Brown “had found some evidence of legal wrongdoing by L.H. Gray,” Corbett wrote, it could not be admitted into evidence against Burnbrae unless Sweda could show evidence that Burnbrae conspired with L.H. Gray.

The material supplied to support Sweda’s claims against Burnbrae did not really act as evidence, he wrote. “This is not a situation where there are small but fatal gaps in the case that could be filled. Rather, Sweda has made vast, sweeping allegations, and has effectively argued that if the court waits until the end of a protracted trial, there will be evidence to support the claims.”

Corbett stated that the actions Burnbrae took were those of a business competitor and were legitimate. He noted that there had been no evidence supplied to show that actions by Burnbrae resulted in Sweda suffering damages, such as not being able to meet commitments or losing customers. 

“Sweda’s claims are supported by speculation, argument presented as evidence, unparticularized assertions, and vague references to isolated pieces of evidence,” Corbett wrote. “What is absent is a rigourous analysis and presentation that places the isolated pieces of evidence into a coherent context.  And the few pieces of hard evidence do not knit into a coherent claim.”

He concludes that on a motion for a summary judgement, “a responding party must lead trumps or risk losing. Sweda did not lead trumps. It tried a deep finesse. The finesse failed. And now Sweda has no hand.” BF