CWB on hook for $1.8M in wheat suit: report

The Canadian Wheat Board plans to appeal a Manitoba court’s order that it pay $1.8 million to two overseas grain buyers in a 26-year-old case, according to the Reuters news service.

Court of Queen’s Bench Justice Lea Duval ruled July 17 in Winnipeg, home to the CWB’s head office, that the board is liable for misrepresenting the quality of spring wheat damaged by frost.

A lawyer for the plaintiffs in this case told Reuters that damages, including interest and currency conversion, could actually run up to $4.5 million. Those costs may go to a separate hearing if the parties can’t agree, Duval ruled.

The case, Reuters said, involves wheat sold to Agro Co. of Canada, an accredited CWB exporter that’s now a subsidiary of ConAgra Foods. Agro in 1983 shipped about 25,000 tonnes of board wheat to Pagnan, an Italian grain trading firm now owned by Cargill.

The shipment followed the 1982 season, in which about 20 per cent of Canada’s spring wheat crop had frost damage. The Canadian Grain Commission told the CWB some of the wheat was of milling quality.

Agro then agreed to Pagnan’s request that it substitute another firm, Albionex, as the wheat’s initial buyer. But Pagnan, which had presold the wheat, said it was soon fielding complaints about quality, and Agro refused to take back the grain. Pagnan disposed of the grain and Albionex refused to accept more of the shipment from Agro.

Albionex and Pagnan filed their statement of claim in Winnipeg against Agro and the CWB in 1985.

According to Reuters, the CWB was found to have claimed in a 1982 letter to buyers that the frostbitten wheat could be used for milling, not just for feed, and the CGC later warned the board that such a letter could be “misleading.”

Duval, in her ruling, also found that the CWB had sent wheat samples to one customer that were superior to what was shipped.

“We disagree that we misrepresented anything,” CWB spokesperson Maureen Fitzhenry told Reuters reporter Rod Nickel. “Our international reputation is solid, it’s strong and it’s important.”

When top-end milling wheat is in short supply, the CWB often informs customers about lower-quality wheat that can be milled, but the board does not sell feed wheat as flour-quality milling wheat, Fitzhenry told Reuters.

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