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Westoba, BDO win legal fight with pork council

A near million-dollar lawsuit launched by the Canadian Pork Council has been dismissed.

The court recently dismissed the lawsuit against Brandon-based Westoba Credit Union Ltd. and BDO Canada Ltd. and awarded them legal costs.

The non-profit Canadian Pork Council had sued Westoba and BDO in a bid to recover $961,731 — $780,851 it paid out through the Cull Breeding Swine Program (CBSP), plus fees and interest.

The program was funded by Agriculture and Agri-Food Canada and delivered by the Canadian Pork Council.

Its goal was to reduce the Canadian hog breeding population by 150,000 animals because too many pigs were going to market. The program was expected to decrease Canada’s annual hog production by 10 per cent, or three million pigs.

Grants would be given to breeding swine producers who agreed to leave the industry for at least three years.

The case is outlined in court documents filed in Brandon Court of Queen’s Bench.

In May 2008, struggling Crocus Country Pork Inc., a commercial pig farm, qualified for such a grant for $780,851.

But Crocus Country was placed in receivership and the payment was ultimately forwarded to Westoba, as Crocus Country’s secured lender, via BDO Dunwoody Ltd. (now known as BDO Canada Ltd.), which was Crocus Country’s receiver/manager.

According to the Canadian Pork Council, under the CBSP program Crocus Country had agreed that its barns were to remain empty of breeding swine for three years.

If it failed to meet the conditions of the program, Crocus Country would have to pay back the money, plus a 10 per cent administrative fee and interest.

If Crocus Country sold its barns, it would have to have the buyer agree to the same terms.

However, in January 2010, Westoba and/or BDO directed the sale of Crocus Country’s land and buildings.

In September 2010, the CBSP inspected the barns, which had been sold to a Hutterite colony, and found 2,500 breeding swine inside.

No buyer’s agreement to the program’s terms was obtained, the pork council claimed.

As a result, CBSP cited non-compliance with the program.

In February 2012, the Canadian Pork Council filed a lawsuit against Crocus Country, Westoba and BDO to recover the payment with the administration fee and interest.

The pork council argued that Westoba and BDO were subject to the same program conditions as Crocus Country.

However, Westoba and BDO both filed court motions to have the pork council’s lawsuit dismissed. The case was heard in July, and in September the court ruled in Westoba’s and BDO’s favour and ordered the pork council to pay them legal costs.

Crocus Country, by then insolvent, wasn’t represented in court.

BDO has been awarded costs and legal fees of $12,094, while Westoba was awarded $11,995.

The court ruled that the Canadian Pork Council’s case wouldn’t have had a real chance of success at trial.

BDO was acting only as a receiver of funds and it wasn’t realistic to expect it to repay a government subsidy program.

As for Westoba, the court ruled that the Canadian Pork Council and/or its program administrator knew that Westoba was a lender to Crocus when it advanced program funds. The council had no right to retroactively impose terms and conditions upon a secured lender.

The court also rejected the Canadian Pork Council’s argument that Westoba was unjustly enriched by the payment at its expense.

» ihitchen@brandonsun.com

Republished from the Brandon Sun print edition December 27, 2013

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A near million-dollar lawsuit launched by the Canadian Pork Council has been dismissed.

The court recently dismissed the lawsuit against Brandon-based Westoba Credit Union Ltd. and BDO Canada Ltd. and awarded them legal costs.

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A near million-dollar lawsuit launched by the Canadian Pork Council has been dismissed.

The court recently dismissed the lawsuit against Brandon-based Westoba Credit Union Ltd. and BDO Canada Ltd. and awarded them legal costs.

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