Authors: Khurrum Awan, Jordan Hardy
This post was written prior to our January 2017 merger, under our previous firm name, MacPherson Leslie & Tyerman LLP.
A recent judgment of the Saskatchewan Court of Queen’s Bench has confirmed that objective standards apply in assessing the performance of agricultural machinery under the Agricultural Implements Act (the “Act“) in effect in Saskatchewan. The judgment also indicates that due diligence by dealers and manufacturers of agricultural equipment, and expert evidence relating to performance, will play an important role in defending claims alleging breach of performance warranties under the Act.
The underlying claim was brought by a farmer who had purchased a high-clearance sprayer. After the sprayer was delivered, the farmer complained that the machine seemed to be underpowered, and thus unable to get up to his preferred speeds for spraying purposes. To assess these complaints, the dealer sent a number of technicians to inspect and operate the sprayer. Based on the objective measurements recorded on the sprayer, the dealer’s technicians concluded that the machine was performing as specified and intended. When the farmer’s complaints continued, the manufacturer sent an experienced representative to observe and record the sprayer’s performance in the field. Based on his observations and recordings of objective performance measures, such as ground speed, spray pressure, application rates, and field conditions, the manufacturer concluded that the sprayer was performing as specified and intended.
However, the farmer remained unsatisfied and sued the dealer and manufacturer, alleging that the sprayer failed to meet the performance warranty set out in the Act. The relevant section of the Act deems every sale of a new implement to include a warranty that “if the new implement is properly used and operated, it will perform well the work for which is intended.” The farmer argued that, in his opinion and assessment, the sprayer had failed to perform well the work for which it was intended. The issue was whether the farmer’s subjective assessment was a relevant factor in assessing whether the statutory performance warranty had been breached.
The Court relied on the wording of the statutory provision to conclude that an objective standard applied in assessing whether the performance warranty had been met. Therefore, each case alleging breach of the statutory performance warranty was to be determined on its own facts based on “a reasonable objective analysis as to whether the implement performed well, the purpose it was intended to be used for.” The subjective opinion of the purchaser of the equipment was not a relevant factor in this assessment.
Applying this objective standard, the Court concluded that the sprayer had performed well the work for which it was intended. The evidence the Court cited included:
- Performance measures such as ground speeds, engine loads, spray pressures, number of acres sprayed, rate of chemical application, and corresponding field conditions, all of which had been recorded by the dealer’s and the manufacturer’s representatives.
- The evidence of two engineers with respective expertise in engine performance and hydraulics. Both engineers testified that the objective measurements did not evidence any performance issues with the machine.
- The evidence of an expert meteorologist, which established that the field conditions in the particular year and farming season had been extraordinarily wet.
The judgment should provide comfort to dealers and manufacturers that an objective standard will be applied by the Court in assessing whether statutory performance warranties are met by agricultural machinery sold in Saskatchewan. However, the judgment also provides indicators of the steps which can be taken by dealers and manufacturers to optimize their ability to successfully defend claims of inadequate performance. The Court’s reliance on contemporary recordings of objective performance measures indicates that timely and due diligence by dealers and manufacturers in addressing performance-related complaints will play a vital role in assessing whether ag-machinery meets statutory performance guarantees. Furthermore, the marshalling of expert evidence, indicating that the machine is performing as intended and reasonably expected, will play an important role in a finding that statutory performance guarantees are met.
This judgment of the Saskatchewan Court of Queen’s Bench is reported at James Coward and Merrylynn Coward v. Kramer Ltd. and AGCO Canada Ltd., 2016 SKQB 205.