Ontario Egg cases merged

Tuesday, November 8, 2011

by BETTER FARMING STAFF

Two civil court cases that allege several players in Ontario’s egg industry purposely undermined an egg grading business — at one time the province’s third-largest — will be merged, an Ontario Superior Court of Justice has ruled.

In his Nov. 1 decision, Judge Peter Lauwers concluded there were sufficient allegations presented to support the merger of the cases. Both were launched by Sweda Farms Ltd. and affiliates in Blackstock, Ontario. One claim, filed in 2005, names the Ontario Egg Producers (now Egg Farmers of Ontario) and two of its employees. The other claim was filed in 2008 against Burnbrae Farms Limited, L.H. Gray & Son Limited, the two companies’ owners, Maple Lynn Foods Limited and several individuals. In both actions, Sweda claims the people and businesses named undermined its business.

In court documents, the egg board and the people named deny the allegations. None of the claims have been proven in court.

Sweda filed a motion to consolidate the two cases in 2010 after obtaining information from Norman Bourdeau, a self-described egg industry “whistleblower” and L.H. Gray’s former information technology manager and consultant. Sweda contends the information revealed the activities itemized in the two court actions were part of a larger-scale conspiracy to damage its operations.

In his decision, Lauwers quotes from court documents in which Sweda’s owner, Svante Lind, alleges:

•    While Egg Farmers of Ontario and two of its employees were investigating his company’s Best Choice Eggs division and issuing invoices to the division’s egg farmer suppliers, Burnbrae and L.H. Gray were contacting the farmers to solicit egg supply agreements with their grading stations;

•    L.H. Gray, the company’s owner William Gray and Burnbrae were “substantially aware of the matters involved in the OEP litigation;” and

•    Not only did the three possess a statement from the marketing board that addressed its position regarding the 2005 case but Burnbrae also had a representative on the board and L.H. Gray is “deeply involved” in the industry’s affairs. L.H. Gray’s owner “is a long-time friend and confident of Carolynne Griffith, chair of the OEP and Mrs. Griffith keeps Gray apprised of OEP matters, including the OEP litigation and the allegations against the defendant (Harry) Pelissero,” the marketing board’s general manager.

None of the allegations have been proven in court. David McCutcheon, a lawyer representing Burnbrae, says his client denies the allegations. “They are not proven anywhere,” he says. A spokesperson for L.H. Gray could not be reached for comment. Carolynne Griffith, chair of Egg Farmers of Ontario, noted that she has been in the business for 50 years and consequently has a lot of friends in the industry. “I really can’t speak to the issues,” she says, explaining the case is before the court. “So the truth will reveal itself in due time.”

Geoffrey Spur, a lawyer representing the egg board and the employees named in the suit, notes that his clients have vigorously denied the allegations made in past documents. And if they are included in a fresh statement of claim filed in connection with the consolidated case, “you can rest assured that Egg Farmers will be denying that there is any accuracy or truth to them and will be completely and vigorously defending this claim,” he says.

Lawyers for the two cases’ defendants resisted the consolidation by arguing that the allegation of a larger-scale conspiracy was a new court action and, as such, failed to meet the deadline for filing under the province’s 2002 Limitations Act. The Act requires claims to be filed within two years of their discovery.

In his decision, Lauwers wrote that while the original claims were filed more than two years ago, the discovery of the alleged larger-scale conspiracy occurred after Bourdeau contacted Lind in May 2009. The motion to amend Sweda’s claims and consolidate the two cases was subsequently filed in 2010, well before the Act’s two-year deadline.

Lauwers also dismissed the assertion that the proposed revised claim represented a new action.

The consolidated case will be heard in a Superior Court in Toronto.

On Thursday, McCutcheon downplayed the significance of the decision. “It’s all procedural,” he says. Sweda’s lawyer, Donald Good, could not be reached for comment.

In July, Lauwers found Bourdeau in contempt for breaching another judge’s order to deliver all evidence or documents in his possession with respect to the business of L.H. Gray to a supervising solicitor in Kitchener. After the judge issued the order, Bourdeau distributed copies of 250 emails of correspondence between L.H. Gray and its customers and a file concerning egg grading to Gray’s customers and to agricultural regulatory bodies across Canada, including the Ontario Farm Products Marketing Commission.

Bourdeau is also being sued by L.H. Gray in a London court for breach of fiduciary duty, confidentiality, good faith obligations, defamation and intentional interference in economic relations. Bourdeau, who is representing himself, is countersuing L.H. Gray for constructive and wrongful dismissal and wrongful termination of his contractor consulting agreement. None of the claims have been proven in court.

Bourdeau is now appealing Lauwers’ contempt decision to the Ontario Court of Appeal, alleging, among other things, that the judge is favourably disposed towards L.H. Gray. The company had been a client of the law firm, Miller Thomson LLP, where Lauwers was a partner before his 2008 appointment to the judge’s bench.

Lauwers refutes the allegations. 

Miller Thomson was a large firm with nearly 400 lawyers in nine offices “and literally thousands of active clients,” he writes in an October decision responding to Sweda’s lawyer’s request to recuse himself from the cases. Update: The firm currently has 460 lawyers in 11 offices. End of update. Lawyers in the firm’s London office dealt with L.H. Gray; Lauwers had worked in the firm’s Toronto and Markham offices. “I state plainly that I did not know that L.H. Gray had been a Miller Thomson client until I read Mr. Bourdeau’s Notice of Appeal,” Lauwers writes. “To the best of my recollection and knowledge I have never met or spoken with a Miller Thomson lawyer who was responsible for L.H. Gray. I had no knowledge of L.H. Gray as a client and no contact with L.H. Gray whatsoever.”

In May, Sweda’s Best Choice Eggs marketing brand merged with Ontario Pride Eggs, an 11-member company which has operated the former Monkland egg grading station in eastern Ontario since 2009. Ontario Pride Eggs is part of Groupe-Nutri-Group, a much larger national distribution partnership of several Canadian egg marketers. BF