Coward v Kramer Ltd., 2018 SKCA 63

Court of Appeal for Saskatchewan Docket: CACV2927 Citation: Coward v Kramer Ltd. , 2018 SKCA 63 Date: 2018-08-15 Between: James Coward and Merrylyne Coward Appellants (Plaintiffs) And Kramer Ltd. and AGCO Canada Ltd. Respondents (Defendants) Before: Caldwell, Whitmore and Schwann JJ.A. Disposition: Appeal dismissed Written reasons by: The Honourable Mr. Justice Caldwell In concurrence: The Honourable Mr. Justice Whitmore The Honourable Madam Justice Schwann On Appeal From: 2016 SKQB 205 , Regina Appeal Heard: November 21, 2017 Counsel: Terry J. Zakreski, Q.C. for the Appellants Jeff N. Grubb, Q.C. and Andrea C.

Johnson for Kramer Ltd. Jordan P. Hardy, Q.C. and Khurrum Awan for AGCO Canada Ltd. Caldwell J.A. I. Introduction [ 1 ] James Coward and Merrylyne Coward [together, the Cowards] appeal against the decision of a trial judge ( Coward v Kramer Ltd . , 2016 SKQB 205 [ Trial Decision ]), dismissing their claims against Kramer Ltd. [Kramer] and AGCO Canada Ltd. [AGCO] under The Agricultural Implements Act , RSS 1978, c A-10, and dismissing their claim for punitive damages against Kramer.

All of the Cowards’ claims related to their purchase from Kramer of a 2010 AgChem 1184 RoGator self-propelled, high-clearance sprayer [1184 Sprayer] manufactured by AGCO. [ 2 ] The Cowards appeal against the whole of the trial judgment. They allege the trial judge committed a number of errors in his

interpretation and application of The Agricultural Implements Act . They seek to have the Trial Decision reversed, with the result of judgment in their favour in the amount of $146,467.31 plus interest, as well as their costs at trial and in this appeal. [ 3 ] Having reviewed the Trial Decision and having considered The Agricultural Implements Act and the case law, I find no reversible error in the decision of the trial judge. I would, therefore, dismiss the appeal with one set of costs to each of Kramer and AGCO.

II. background [ 4 ] The trial judge summarised the basic factual background in this case in this way: [1] In 2010, the plaintiffs owned a 2300 acre farm in the Drinkwater District of Saskatchewan. Mr. Coward had been farming for many years and was quite experienced in the operation of crop sprayers. The plaintiffs decided to buy a new high clearance crop sprayer that year. Mr. Coward spent a considerable amount of time researching crop sprayers including discussions with various retail agricultural implement dealerships and attending trade shows.

They decided to purchase a 2010 AgChem 1184 RoGator self-propelled high clearance sprayer [1184] for $328,500.00 from Kramer Ltd. [Kramer] on May 10, 2010. The 1184 was supplied to Kramer by Agco Canada, Ltd. [Agco]. The Cowards traded in their 2003 AgChem 584 RoGator Sprayer (receiving $172,500.00 trade in allowance) leaving a balance of $156,126.00 (after adding in a tire fee of $120.00). The 1184 was delivered to their farm on May 11, 2010. Mr. Coward started using the 1184 on May 12, 2010. Mr. Gerencser, a sale representative for Kramer, went out to the Coward farm that day to help familiarize Mr.

Coward with the operation of the 1184. Mr. Coward complained to Mr. Gerencser that he believed the 1184 was underpowered. [2] Representatives of Kramer responded to Mr. Coward’s [complaint]. Between May 15 and May 17, 2010, Kramer’s service technicians went out to the farm and adjusted the engine on the 1184. On May 27, 2010, a test was done in the Kramer yard in Regina on a comparable sprayer to investigate any power issues. Mr. Dunham, a representative of Agco, went out to the Coward farm on June 2, 2010 and rode around with Mr. Coward on the 1184 for about three hours while Mr. Coward sprayed. Mr.

Dunham concluded that the 1184 worked as intended. Mr. Coward disagreed and continued to complain the sprayer was underpowered. The actual spraying apparatus seemed to work properly. [3] The Cowards decided to invoke s. 36 of The Agricultural Implements Act , RSS 1978, c A-10 [ Act ] and sent a notice of rejection on June 4, 2010 to Kramer. Kramer acknowledged the rejection. The Act provided Kramer with a further seven days to try and fix the alleged problem.

However, by that time, Kramer (and Agco) had concluded that any problems had been remedied and the 1184 was working properly and therefore took no further action.

[4] After the seven days under the Act went by, the Cowards notified Kramer that once again they were rejecting the implement. The Cowards retained a lawyer who sent a demand letter to Kramer shortly after that asking for their money back. Kramer and Agco did not agree. The Cowards parked the sprayer at their farm and never used it again. Eventually, they sold the sprayer at a public auction on March 29, 2012. [ 5 ] The Cowards sued for breach of warranty because they alleged the 1184 did not perform well for the work it was intended and for damages. They also sued for punitive damages against Kramer.

By way of amended statement of claim, the plaintiffs also claimed they had exercised their option under s. 46 of the Act to void the contract. [5] On this basis, the trial judge identified and answered five questions, which led him to dismiss the Cowards’ claims. The first question was whether the 1184 Sprayer had failed to “perform well the work for which it was intended” and had thereby given rise to a breach of the statutory warranty that is expressed in those terms under s. 36(4) of The Agricultural Implements Act .

In this regard, the trial judge wrote: [25] The plaintiffs bear the onus of proving their case and that the statutory warranty set out in s. 36(4) of the Act has been breached. I have concluded that the plaintiffs have failed to discharge this burden. I find that the preponderance of the evidence actually shows that the 1184 worked well and that there was no statutory breach.

Accordingly, I dismiss this claim of a breach of statutory warranty. [ 6 ] Although not strictly necessary given the foregoing conclusion, the trial judge next asked whether the Cowards had provided written notice of their intention to reject the 1184 Sprayer in accordance with s. 36 of The Agricultural Implements Act . The trial judge had no difficulty answering this question in the affirmative.

No appeal or cross-appeal is taken from this finding. [ 7 ] Thirdly, the trial judge asked whether the Cowards were in a position to rely on s. 46 of The Agricultural Implements Act so as to void the contract as against Kramer. In this regard, the trial judge found that a machine order standard form contract [Machine Order] used by Kramer would have offended s. 46, but it was not the “primary contract” and was “an internal Kramer document” (at para 40).

He further found the terms of other contractual documents between Kramer and the Cowards were “more than adequate to remove any concerns meant to be governed by s. 46” (at para 40). Regardless, the trial judge found the Cowards were estopped from relying on s. 46 in the circumstances of this case (at paras 41 and 42). Alternatively, he found a purchaser is required to invoke s. 46 “within a reasonable time frame” and that the Cowards had not done that (at para 43).

He therefore dismissed the Cowards’ claim under s. 46 of The Agricultural Implements Act . [ 8 ] The last two questions were: (1) what are the damages that flow to the Cowards; and (2) are the Cowards entitled to punitive damages against Kramer? As to the first, the trial judge found the Cowards would have experienced a “nominal loss”, but he was prepared to find the cost of custom spraying had been an unexpected expense they had incurred.

As to the second, relying on this Court’s decision in Zurich Life Insurance Company Limited v Branco , 2015 SKCA 71 , [2015] 10 WWR 246, the trial judge ruled out an award of punitive damages against Kramer because “nothing in the evidence … captures the level of conduct that would offend the court’s sense of decency in all of this” (at para 53). [ 9 ] The Cowards have appealed against the whole of the judgment but do not advance any grounds that impugn the trial judge’s decision to dismiss their punitive damages claim against Kramer.

III. issues and analysis [ 10 ] The Cowards allege the trial judge committed a number of errors in his

interpretation of The Agricultural Implements Act , in his application of the law to the facts of this matter and in his handling of the evidence at trial. In the analysis that follows, I have grouped these allegations under two general headings: (

a) Breach of warranty— s. 36 of The Agricultural Implements Act (

b) Illegal contract— s. 46 of The Agricultural Implements Act [ 11 ] The Cowards have also questioned the trial judge’s provisional assessment of damages. However, in light of the conclusion below—namely, that the trial judge did not commit a reversible error in reaching his overall decision to dismiss the Cowards’ claims—I have not addressed this last allegation. [ 12 ] I turn now to consider the issues arising in this appeal. A.

Breach of warranty—Section 36 [ 13 ] Everyone agrees that the core controversy at trial was whether Kramer and AGCO had breached the statutory warranty under s. 36(4) of The Agricultural Implements Act , namely, the warranty that the 1184 Sprayer would “perform well the work for which it was intended.” That controversy turned on whether the phrase “perform well the work for which it was intended” gave rise to a subjective or objective assessment of the performance of the 1184 Sprayer. [ 14 ] The Cowards assert the trial judge erred in his

interpretation of the statutory warranty by concluding it called for an objective assessment of the 1184 Sprayer’s performance. In this regard, the trial judge wrote: [9] Essentially the wording in s. 36(4) lends itself to an examination of the facts. This is not a subjective test left to the purchaser. The standard to be used is an objective standard. There is no magic in the use of the words “performs well”. Common everyday use of these words will suffice.

Each case will be determined on its own facts employing a reasonable objective analysis as to whether the implement performed well, the purpose it was intended to be used for. I do not find the use of the word “well” creates a higher standard of performance than what would be reasonably expected of the implement. Nor does the word “well” provide an emphasis on the

subjective opinion of the purchaser. [15] In support of a subjective assessment, the Cowards assert the error in the trial judge’s

interpretation of the statutory warrantyis evident for at least three reasons: (1) it gives no effect to the adverb well in the phrase “perform well”; (2) it renders the opinion of thepurchaser irrelevant; and (3) it completely disregards how Kramer and AGCO had promised the 1184 Sprayer would perform. [16] This ground of appeal requires the Court to interpret s. 36(4) so as to determine whether it establishes an objective, asubjective or, perhaps, a blended objective-subjective assessment of the performance of a new agricultural implement. In Rizzo & RizzoShoes Ltd. (Re), (SCC), [1998] 1 SCR 27 at para 21, the Court relied on the theory that “statutory

interpretation cannotbe founded on the wording of the legislation alone” and adopted the following statement of principle as the law of statutoryinterpretation: Today there is only one principle or approach, namely, the words of

an Act are to be read in their entire context and in their grammaticaland ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. [Elmer Driedger, Construction of Statutes, 2d ed (Toronto: Butterworths, 1983) at 87] [17] The principle of, or approach to, statutory

interpretation begins with the words of The Agricultural Implements Act and, inparticular, of the warranty under s. 36(4). 1. Warranty: “it will perform well the work for which it is intended” [18] Section 36(4) sets out one of the statutory warranties that are deemed by s. 36(1) of The Agricultural Implements Act to bepart of every contract of purchase and sale of a new agricultural implement in Saskatchewan.

In particular terms, s. 36(4) states thatevery contract for the sale of a new implement is deemed to include a warranty that, “if the new implement is properly used andoperated, it will perform well the work for which it is intended.” That wording is also found in s. 36(5). In full, s. 36 provides: Warranties re sale of new implement36(1) Every contract for the sale of a new implement is deemed to include the express joint and several warranties on the part of thedealer and the distributor that are mentioned in this section.

(2) The warranties mentioned in this

section are to apply for the longer of: (

a) one year from the date of first use of the new implement; and (

b) any longer period that is provided by this Act or is set out in the sales contract.

(3) Every contract for the sale of a new implement is deemed to include a warranty that the new implement is well-made and of goodmaterials.

(4) Every contract for the sale of a new implement is deemed to include a warranty that, if the new implement is properly used andoperated, it will perform well the work for which it is intended.

(5) Every contract for the sale of a new implement is deemed to include a warranty that the purchaser may do the things mentioned insubsection (6) if: (

a) the new implement does not perform well the work for which it is intended within a period that is the earlier of: (

i) the first 10 days of use by the purchaser during the season of use; and (ii) the first 50 hours of use by the purchaser during the season of use; (

b) within the period mentioned in clause (a), the purchaser gives written notice to the dealer at the address given for the dealer in thesales contract, or to the distributor, that the implement does not work well; and (

c) within a period of seven days following receipt of the written notice mentioned in clause (b), the dealer or the distributor does notmake the implement perform well the work for which it is intended.

(6) In the circumstances mentioned in subsection (5): (

a) the purchaser may, by giving written notice to the dealer or the distributor within the three days immediately following the seven-dayperiod mentioned in clause (5)(c), reject the implement; and (

b) if the purchaser rejects the implement in accordance with clause (a): (

i) the sales contract is ended; (ii) the purchaser is entitled to a return of any moneys paid or notes given by the purchaser for the purchase of the implement and of thefreight charges paid by the purchaser; and (iii) if any goods have been taken in trade by the dealer, the dealer shall: (

A) return those goods to the purchaser; or (

B) if the goods cannot be returned in the same condition or have been sold to a third party, pay to the purchaser the amount of the fair

market value of those goods.

(7) Notwithstanding subsections (5) and (6), the purchaser is deemed to forfeit the purchaser’s right to reject an implement if the purchaser fails to give either of the written notices within the time limit mentioned in those subsections, unless the dealer or distributor either before or after the expiration of the time limit does any act or engages in any conduct that leads the purchaser to believe that the written notices are not required to be given or had been given.

(8) If the dealer is required pursuant to subsection (6) to return any goods given in trade by the purchaser but has, before the termination of the sale contract, incurred costs or performed work in repairing or reconditioning those goods, the dealer may refuse to return those goods until: (

a) the purchaser has paid for the reasonable costs of the repairs or reconditioning, including labour costs that must be determined using: (

i) the usual rate charged by that dealer at the time; and (ii) a reasonable time charged for doing the work; or (

b) arrangements satisfactory to the dealer have been made for the payment of those costs.

(9) Every contract for the sale of a new implement is deemed to include a provision that if, within the seven-day period mentioned in clause (5)(c), the dealer or distributor makes the new implement perform well the work for which it is intended and if the purchaser’s failure to make the implement perform well was due to the purchaser’s own improper management or want of skill in operating the implement, the purchaser shall pay the expenses incurred by the dealer or distributor in making the implement work well.

(10) Every contract for the sale of a new implement is deemed to include a warranty that: (

a) the new implement will be durable if used under fit and suitable conditions and kept with proper care; (

b) parts proving defective will be replaced free of charge on return of the defective parts to the dealer’s place of business or to the distributor; (

c) if the purchaser returns the new implement to the dealer’s place of business, the dealer will install the new parts without charge; and (

d) all parts replaced within the warranty period are durable for the duration of the original warranty period prescribed in subsection (2) or for 90 days from the date of installation, whichever is longer.

(11) Every contract for the sale of a new implement is deemed to include a warranty that, for a period of 10 years from the date of sale indicated on the sales contract: (

a) all necessary parts for the implement will be kept by the distributor in Saskatchewan; and (

b) the purchaser will be able to obtain all necessary parts within a reasonable time at the distributor’s place of business. [ 19 ] As this suggests, for the purposes of the s. 36 statutory warranties, it is important to determine the work a new implement is intended to perform. In this regard, the contract mandated for the sale of new farm implements under The Agricultural Implements Act requires the parties to provide the following information: 16. The dealer and distributor warrant that the implement(

s) is capable of developing ____________ power at: power take off ___; drawbar___; or _________ (check one) if properly maintained and operated under suitable conditions. 17. The above implement(

s) shall perform well the work or functions for which it was intended and which principally includes __________________________. [ 20 ] In the factual context of this case, one of the contract documents between Kramer and the Cowards, entitled

Schedule “A” to New Farm Implement Contract [Schedule A], properly included the foregoing provisions but they had been slightly modified and were filled-in incompletely: 13. The dealer and distributor warrant that the implement(

s) is/are capable of developing ____ power at: power take off ____: drawbar ____; or _____. (check one) if properly maintained and operated under suitable conditions. 14. The above implement(

s) shall perform well the work or functions for which it was intended and which principally includes: Spraying The two other contract documents were the so-called Machine Order and something everyone seemed to call Form A [Kramer Form A] to which

Schedule A was attached. [ 21 ] Staying with the factual context of s. 36 in this case, shortly after taking delivery of the 1184 Sprayer, the Cowards complained to Kramer that it was underpowered . Following this, Kramer sent service technicians to the Cowards’ farm to adjust the sprayer’s engine. An AGCO representative also attended and he accompanied Mr. Coward during operation of the sprayer. The AGCO representative concluded the 1184 Sprayer worked as intended. Nonetheless, the Cowards still considered the sprayer underpowered and sent Kramer written notice of breach of statutory warranty (s. 36(5)). That is, the Cowards concluded the 1184 Sprayer had failed to

“perform well the work for which it is intended” ( s. 36(4) ) because it did not meet their expectations, which was their subjective assessment. Kramer acknowledged that notice, but concluded any problems had been remedied by the earlier actions of its service technicians (s. 36(5)(c)), which was Kramer’s subjective assessment. As Kramer would do nothing further, the Cowards notified Kramer they were rejecting the sprayer (s. 36(6)), parked it, did not use it again and later sold it.

At trial, the trial judge determined, on a balance of probabilities, that the 1184 Sprayer had in fact “performed well the work for which it was intended,” which he described as an “objective standard” calling for “a reasonable objective analysis as to whether the implement performed well, the purpose it was intended to be used for.” [ 22 ] This factual context underscores the question in this appeal, namely, whether it was the Legislature’s intention to establish an objective, a subjective or a blended objective-subjective assessment of performance of a new agricultural implement under s. 36(4) and s. 36(5) of The Agricultural Implements Act .

However, the answer, in my assessment, is not evident on the face of s. 36(4). [ 23 ] The words “perform well” could be seen as being either objective or subjective in nature. The answer is unclear because there is no direct indication in s. 36(4) or elsewhere in the legislation as to who is to make this assessment or on what basis it is to be made.

There are several possibilities, e.g., the buyer on a subjective basis, the dealer on a subjective basis, a reasonable person on an objective basis, or a reasonable farmer on a blended objective-subjective basis, etc. [ 24 ] That said, the phrase “the work for which it was intended” is obviously subjective in nature—it requires determination of the farmer’s intention. Nonetheless, as noted, the legislation also requires that the parties expressly set out the farmer’s intention as to the principal work intended for the implement in the contract of sale.

In this case, the parties identified that work as spraying . [ 25 ] Nevertheless, as the phrase “perform well” read in its entire context and in its grammatical and ordinary sense gives rise to an ambiguity as to whether the court should employ an objective or subjective analysis, further inquiry is required. In Canada Trustco Mortgage Co. v Canada , 2005 SCC 54 , [2005] 2 SCR 601, the Supreme Court explained how ambiguous wording affects the

interpretation of a statute under the principle adopted in Rizzo & Rizzo Shoes (Re) : [10] … The

interpretation of a statutory provision must be made according to a textual, contextual and purposive analysis to find a meaning that is harmonious with the Act as a whole. When the words of a provision are precise and unequivocal, the ordinary meaning of the words plays a dominant role in the interpretive process. On the other hand, where the words can support more than one reasonable meaning, the ordinary meaning of the words plays a lesser role. The relative effects of ordinary meaning, context and purpose on the interpretive process may vary, but in all cases the court must seek to read the provisions of

an Act as a harmonious whole. [ 26 ] Given this principle of statutory

interpretation, background on The Agricultural Implements Act is necessary for the proper analysis of this ground of appeal. 2.

Royal Commission [ 27 ] In its 1913-1914 Session, the Legislative Assembly of Saskatchewan debated the matter of the sale of agricultural implements and resolved that the standing Committee on Agricultural and Municipal Law [Standing Committee] would consider “the best method and means to adopt to make adequate and suitable provision for the control of the sale of farm machinery and the collection of payments due thereon.” [1] Having done so, the Standing Committee reported to the Legislature that: ... the question was so far reaching that it was deemed inadvisable to make any specific recommendation as to the introduction of legislation at that Session, then well advanced, [and] recommended that during the current year thorough inquiry be made into every aspect of the question concerning the sale of farm machinery and other requisites of the farm and the collection of payments thereon with a view to remedying without delay such abuses as might be found to exist and introducing at the next Session of the Legislature such legislation as might be deemed necessary and advisable. [ Royal Commission Report at 8] Given this recommendation, the Minister of Agriculture, the Honourable W.R.

Motherwell, sought the appointment of a royal commission to inquire into and investigate “the matters referred to in the report of the [Standing] Committee” as well as “any or all matters or things pertaining to the sale of farm machinery and other requisites of the farm.” [2] [ 28 ] By order in council dated April 24, 1914, Premier Walter Scott and the Executive Council appointed the Royal Commission of Inquiry into Sale of Farm Machinery [Royal Commission].

The mandate of the Royal Commission was to review and report on the “best method and means to adopt to make adequate and suitable provision for the control of the sale of farm machinery and the collection of payments due thereon.” [3] The Premier more particularly tasked the Royal Commission with assessing the lay of the land regarding the sale and use of farm implements in Saskatchewan so as to identify problems and to make recommendations on how to remedy the identified problems. [ 29 ] The Royal Commission traveled to 19 agriculture centres across Saskatchewan, interviewing farmers, implement dealers and others.

It heard testimony from interested parties and reviewed evidence from local registrars related to the indebtedness of farmers to implement dealers. The Royal Commission considered this evidence and itself had “knowledge of the legal effect of the various clauses of machinery contracts gleaned from the decisions of the courts.” [4] In the result, the Royal Commission produced the Royal Commission Report for the Legislature’s review.

On the whole of it, the Royal Commission Report identified contract unfairness and lack of farmer foresight and ability to carry on a profitable business with new farm implements as the “two greatest sources of losses” for farmers. [5] [ 30 ] The Royal Commission heard salesmen were often selling implements to farmers on the basis of representations that were false or misleading. The farm implement manufacturers and dealers were profiting from these misrepresentations, while the farmers were left with an implement that did not perform as had been represented.

The Commissioners observed that the common law and statute law, including The Sale of Goods Act , RSS 1909, c 147 , did not provide appropriate legal protection to farmers. [6] Importantly, the 1909 Sale

of Goods Act contained the same implied conditions as to quality and fitness as The Sale of Goods Act , RSS 1978, c S-1. [ 31 ] Moreover, the Royal Commission reported that farmers had few legal remedies because the sale contracts nullified all remedies for misrepresentation.

As to the representations made about farm machinery, the Commissioners stated the “whole system” permitted the abuse of farmers. [7] In the result, the Royal Commission concluded that farmers were often left to “pay for an expensive machine which would not do the work for which it was purchased,” [8] which it said was manifestly unfair to farmers, noting an imbalance of power, knowledge and expertise between farmers and dealers. [9] In line with its mandate, the Royal Commission recommended that the Legislature enact legislation to provide “a fair contract for the purchase of the implement” [10] and provided a draft mandatory contract [11] as well as draft legislation [12] for the Legislature’s consideration. [ 32 ] As to matters relevant to the warranty under s. 36(4), the Royal Commission Report contains reference to implements: “reasonably fulfilling” the purpose for which they are intended [13] ; “wholly or partially fail[ing] to perform the work for which they were intended” [14] ; “satisfactorily perform[ing] the work [the farmer] was led to believe it would do” [15] ; “prov[ing] unfit for the purposes intended” [16] ; “not capable of performing the work for which it was intended and for which it had been sold” [17] ; “not do[ing] the work for which it was purchased” [18] ; “whether or not it will successfully drive his separator, if he buys for threshing, or how many ploughs it will pull on his land if he buys for ploughing” [19] ; and “properly and satisfactorily operat[ing] a certain size of separator or a certain number of ploughs” [20] .

These references do not clearly point to either a subjective or objective analysis, although they more generally invoke the notion of an objective assessment of performance, particularly when terms like reasonably fulfill are laid alongside terms like satisfactorily perform . [ 33 ] In the Résumé of its overall findings and recommendations, the Commissioners wrote: R ésumé. FINDINGS. Very briefly stated we find the following: That as regards the sale of small implements, e.g. , a plough, harrow, mower, binder, etc., the farmers had no serious complaints to make which could be remedied by the Legislature.

As regards the sale of power outfits, however, they did complain, and we think these complaints may and should be remedied. The chief sources of the losses complained of were: First. Those resulting from misrepresentations made by the agents of the selling companies for which the companies refuse to assume responsibility; Second. Those resulting from an unfair and unreasonable contract, under which the farmers were obliged to pay for the machine sold although it may not have been reasonably fit for the purpose for which it was sold; Third.

Those arising from the inability of the farmer to promptly get necessary repairs; Fourth. Those arising from the fact that the companies sold power machinery to farmers (often homesteaders) who were not possessed of the experience or business ability necessary to make a success of its operation. That to secure the price they took security on all the purchaser possessed and when he failed to pay they sold him out, leaving him in most cases financially ruined. RECOMMENDATIONS. To prevent these losses we recommend: First.

That the contract contain such detailed warranties as to the capability of the machine as will remove the main opportunity for misrepresentation which now exists, and further, that the ordinary rules of law governing the liability of principals for their agents be made to apply to sales of farm machinery; Second.

That a statutory contract be adopted in which the selling companies will give proper warranties covering the construction, operation and durability of the machine sold, and ensuring that the farmers can upon application obtain necessary repairs at a place in Saskatchewan to be specified in the contract; Third. That the selling companies should not be allowed to take any security on land at the time of the sale, nor for six months after the delivery of the machine to the farmer. If at the expiration of that time the farmer is willing to give security the company may take it; Fourth.

That all dealings with the homestead be invalid unless with the consent of the owner’s wife. The above conclusions represent the unanimous opinion of your Commissioners. [Royal Commission Report at 39–40] [ 34 ] As is obvious, the Royal Commission’s recommendations were aimed at fundamentally altering the contractual relationship between farmers and implement dealers with a view to fairly protect farmers’ interests.

However, the Royal Commission also recognised the position of implement dealers throughout its report, ultimately concluding statutorily-mandated contractual warranties would “not affect the companies’ interests beyond what is necessary to insure a fair deal to the farmer.” [21] [ 35 ] The Royal Commission Report records what farmers had been concerned about in 1914, which included the efficiency of an implement. Today, agriculture is much different than it was in 1914.

As is evident from the Royal Commission Report , agricultural implements and their buyers were not sophisticated in 1914 and engine technology was fresh and more basic than it is today. Today, agricultural implements are highly specialized and more technologically complex and their buyers are more knowledgeable and discerning and, as the legislative record indicates, the Legislature has amended farm implement legislation accordingly. To a degree, this

tempers the usefulness of the Royal Commission Report in interpreting the modern legislation. Nonetheless, the Royal CommissionReport remains of value because it was on the basis of its recommendations that the Legislature introduced and enacted The FarmImplement Act, SS 1915, c 28 [The Farm Implement Act, 1915]. 3. Legislative History [36] The enactment of the Royal Commission recommendations resulted from four bills, including bills that became TheHomesteads Act, SS 1915, c 29, and The Farm Implement Act, 1915. These bills had been brought before the Legislature by the AttorneyGeneral, W.F.A.

Turgeon, who had also been a member of the Royal Commission. [37] In 1915, the Legislature did not employ the detailed Hansard reports that now record the Legislature’s debates andproceedings. The best record from that time is the reporting of journalists, who attended the proceedings of the House and wrote aboutwhat had been debated on any given day. In a newspaper

article dated June 24, 1915, reporting on the second reading of the billsintroduced by Attorney General Turgeon, the headline read: Agriculture Implement Bill Solves Difficulties of Saskatchewan FarmerS Commission of enquiry express satisfaction at results of meeting farmers in different parts of Saskatchewan – Hon A. Turgeon dealt withimplement bill in master speech – Wife’s right in disposition of homestead, whether in town or country, is now recognized an importantpiece of legislation. [38] In his second-reading speech, Mr.

Turgeon had remarked that the bills were important and worthy of careful study andconsideration. He explained that, were it not for certain pending liquor legislation, the four bills dealing with the Royal CommissionReport “would rank as the most important brought down for consideration of the House.” The news

article goes on to describe theAttorney General as explaining thoroughly the grievances of farmers and the recommendations set out in the Royal Commission Report,often reading verbatim from it, and that his speech and the bills themselves were greeted with “warm and loud applause” from membersof the Legislative Assembly. [39] The Attorney General explained how farmers were dissatisfied with their relationships with machinery companies.

Heoutlined farmers’ principal objections as detailed in the Royal Commission Report and the remedy therein recommended was to“provid[e] a contract wherein the company will be compelled to state specifically in writing by way of warranty exactly what work themachine will do, e.g., how many plows it will pull and what size separator it will operate.” He explained the concept of standard formcontracts to the members, including that a contract would contain a warranty that the machine will perform well and permit the farmer toreturn it if it did not. [40] The original legislation reflected the Royal Commission Report and mandated the use of the standard form, written contractsbetween buyers and sellers of agricultural implements.

Under the initial Farm Implements Act, the mandatory warranties were set out ina Form A standard contract that dealers were required to use (s. 8). Importantly, the standard Form A contract required the parties to“insert purposes” that explained the work the machine was intended to perform. And, on that basis, the seller’s express warranties werethat: (a) “the said machinery is well made and of good materials” (clause 1); (b) “the said machinery will well perform the work for which it is intended, if properly used and operated” (clause 2); (

c) if a purchaser gives notice of a complaint the machinery “does not work well”, then “the vendor shall have eight days fromthe receipt of such notice to make it perform well the work for which it was intended ... either by replacing the parts or otherwise”, failingwhich “the purchaser may either reject said machinery … or he may retain said machinery and hold the vendor liable for the differencebetween the value of the machine as it is and the value it would have had if it had fulfilled this warranty” (clause 2); (

d) if the vendor “makes the said machinery fulfil this warranty, and if the purchaser’s failure to make it work well was due toimproper management or want of skill in operating on his part, then the purchaser hereby agrees to pay the vendor the expenses incurredby him in making it work well” (clause 2); and (e) “the said machinery will be durable if used and kept with proper care” (clause 3).

As it does today, the original Form A standard contract contained blanks for the parties to add information for express warranties if theimplement had an engine, such as horsepower, rated capacity, that it would power a particular separator or pull specific ploughs, landdescription, etc. [41] In addition, s. 21 of The Farm Implements Act, 1915 prohibited vendors from excluding liability in the contract: 21.

No contract, order or security made or taken in connection with the sale of agricultural implements shall contain any statement to theeffect that the vendor is not responsible for the representations of his agents or any other language in any wise limiting or modifying thelegal liability of the vendor as provided in this Act or in the forms in the

schedule hereto; and the insertion of any such statement or theuse of any such language shall be of no effect.

(2) Any breach of the provisions of this

section shall render the contract order or security void at the option of the purchaser. [42] Notably, the 1915 legislation did not refer to The Sale of Goods Act or any other sales laws, which led Haultain C.J.S., thedissenting judge in Murdoch v The Minneapolis Threshing Machine Co. (1921), (SK CA), [1922] 60 DLR 284 (SaskCA) [Murdoch], to conclude those laws did not apply to the sale of farm implements.

Justice Turgeon, who wrote one of two concurringopinions for the majority, did not go quite as far as Haultain C.J.S., but stated that The Farm Implements Act, 1915 must prevail over TheSale of Goods Act, 1909 in the event of conflict. Chief Justice Haultain’s opinion was directly rejected in 1953 when the Legislature

amended a subsequent Farm Implements Act to add that The Sale of Goods Act applied to sales of farm implements: 32(2) Notwithstanding the foregoing subsection, every purchaser of an implement shall, upon breach of any term of the agreement for the sale of the implement, whether or not the same is in form A or B, be entitled to the damages to which a buyer of goods is entitled under The Sale of Goods Act .

Later, in 1980, the Legislature amended the foregoing provision to provide for the application of common law and rules of equity to the sale of farm implements. [ 43 ] Indeed, since its enactment in 1915, the Legislature has repealed, replaced and amended agricultural implements legislation a number of times, [22] but protection of farmers and promotion of fair dealings between farmers and implement dealers have always remained in its focus. [ 44 ] In 1968, when the Legislature replaced The Agricultural Machinery Act, 1958 with The Agricultural Implements Act, 1968 , SS 1968, c 1 , the Minister of Agriculture, Hon.

D.F.

McFarlane, explained during second reading of the bill that “[t]he principle contained in this new Act remains the same as before.” [23] Some of the 1968 amendments allowed the parties to write-in more detailed and varied descriptions of the implement in the standard-form contract, which the Minister explained had been “made necessary by innovation in power transmission and drives on newer implements and increased variety of power sources and newer types of implements.” [24] Importantly, the 1968 legislation permitted vendors to add additional warranties to any of the statutory form contracts (s. 16; now s. 35). [ 45 ] In 1976, the Legislature amended The Agricultural Implements Act, 1968 to remove the standard form contracts from the

schedule to the Act . The legislation still mandated prescribed forms of contract (s. 16), but the contracts themselves were moved to The Agricultural Implements Regulations, 1982 , RRS, c A-10, Reg 1. Also in 1976, the warranties, which had previously only been found in the forms of contract, were added to the legislation itself under s. 16A (now s. 36). Importantly, one consequence of this was that the wording of the warranty under what is now s. 36(4) changed from “well perform” to “perform well”.

Hansard does not, however, record a reason for the change. [ 46 ] Nevertheless, even though the current legislation reflects 100 years of amendment, it still contains many of the cornerstone provisions first enacted in 1915, including s. 35 (standard form contracts), s. 36 (statutory warranties) and s. 46 (illegal contracts). In particular, the s. 36(4) warranty that an implement will “perform well the work for which it is intended” has been in the statute (for the most part untouched, except as noted) since 1915, as has what is now s. 46 of The Agricultural Implements Act .

Other than as described above, what has changed over the years is the definition of implement , which has evolved to correspond with advances in agricultural technology and practices. [ 47 ] With this legislative background, the task of reading the provisions of the current statute as a “harmonious whole” turns to an examination of how the courts have interpreted the statute over the last 100 years or so. 4. Judicial

interpretation [ 48 ] As noted, one of the earliest cases that interpreted the statute is Murdoch , in which the Court examined the broader legislative intent underpinning The Farm Implement Act, 1915 . The Murdoch case has unusual significance because two of the three judges who decided it had been members of the Royal Commission, whose Royal Commission Report had led the Legislature to enact the very statute that they were interpreting.

Justice Turgeon (as he then was) had been Attorney-General for Saskatchewan in 1914 and Lamont J.A. (as he then was) had been a judge of the Supreme Court of Saskatchewan at that time.

The third member of the panel, Haultain C.J.S., dissented. [ 49 ] Justice Lamont, who authored one of the two concurring opinions in Murdoch , drew the following conclusion about legislative intention (at 292–293): In view of the fact that the Legislature has declared that upon the sale of a large implement the contract between the vendor and purchaser shall be in a certain form, which requires the purpose for which the implement is purchased to be set out, and which provides that, in case the implement fails to fulfill that purpose, the purchaser may within a specified time reject it, and which also provides that, in case of rejection the purchaser shall have certain remedies, and where the Legislature has also declared that the contract contained in the form specified shall be the entire contract between the parties, the intention of the Legislature, in my opinion, must be held to have been to restrict the purchaser’s remedies upon rejection to those specified in the contract.

It seems to me very reasonable that the makers of our law should say to a farmer purchasing a large implement, particularly an implement whose adaptation to the needs of the farmers of this Province is more or less in the experimental stage: “We will fix the terms of the contract to be used in the sale of a large implement; we will provide that the purpose for which you buy the implement shall be stated; we will provide that if it does not fulfil that purpose you may within a specified time reject it, and we will not allow the vendor to insert any term in the contract by which your right to so reject it shall be denied or held to be waived or the time for rejection abridged; but, on the other hand, if you do reject it, the contract will provide that your remedies shall be limited to a return of the purchase money and freight paid and notes given; you will not be entitled to other consequential damages, which, under the general law, might be yours under an open contract, which open contract a vendor of his own free will would, in all probability, refuse to make.” This is what I think the Legislature has, in effect, said by The Farm Implement Act , and it is binding on the purchaser as well as on the vendor. [ 50 ] Justice Turgeon, who wrote the other concurring opinion, approached the matter of interpreting The Farm Implements Act, 1915 similarly (at 298–301): In my opinion the Legislature in enacting The Farm Implement Act , which it did for the first time in 1915, intended, in so far as the foregoing matters are concerned, to settle absolutely the respective rights and obligations of the parties.

In order to arrive at the true meaning and intent of The Farm Implement Act , it is necessary to proceed in the manner first laid down in Heydon’s Case (1584), 3 Co.

Rep. 7, 76 E.R. 637, and referred to from time to time in a long list of decisions ever since, as, for instance, in In re Mayfair PropertyCo.; Bartlett v. Mayfair Property Co., [1898] 2 Ch. 28, 67 L.J. (Ch.) 337. In this latter judgment I find the following paragraph: “In order properly to interpret any statute, it is as necessary now as it was when Lord Coke reported Heydon’s Case (1584), to considerhow the law stood when the statute to be construed was passed; what the mischief was for which the old law did not provide; and theremedy provided by the statute to cure that mischief.

The Companies Act, 1879, was passed in order to remedy some defects in the lawrelating to unlimited companies, and which defects, although long known to lawyers, startled the public when the City of Glasgow Bankstopped payment in 1878, etc.” We know, then, that all matters pertaining to the sale of farm implements, and particularly of “large” farm implements, such as tractionengines, grain separators, engine ploughs and engine discs, have been for many years matters of great concern to the people of thisProvince, on account of the paramount importance of the farming industry and of the great importance in the business and home life ofthe average farmer of any contract whereby he undertook to purchase such an implement.

Case after case came before the Courtswherein it was made evident that the provisions of The Sale of Goods Act and of the common law were inadequate to establish anequitable basis of contract between the farmer and the vendor, on account of the great difference in education, business training, andlegal knowledge which existed between the parties. The result was that a great number of these large gasoline and oil engines, still intheir experimental stage, were sold to farmers under contracts which put all the risks involved in the experiment upon the farmer andnone upon the vendor.

For an example of the conditions which I am now describing, I may refer to the remarks of Idington, J., and ofBrodeur, J., of the Supreme Court of Canada, in the case of Ozias v. Reeves & Co. (1911), (SCC), 1 W.W.R. 517. Theremarks of Brodeur, J., are practically a suggestion that the Legislature should intervene in this matter as it had done in other cases, as,for instance, in the case of insurance contracts. As a result of the situation known to exist, the Legislature of Saskatchewan adopted thepresent law in 1915.

It appears to me that one of the objects of the Act was to provide a basis upon which the experiment necessary to determine the real, asdistinguished from the theoretical, capacity of any of these large implements might be conducted without imposing undue hardship uponeither of the parties in case of an unfavourable result. A perusal of the cases which came before the Courts for determination, and ofwhich the aforesaid case of Ozias v.

Reeves is but an instance, will shew that, beyond all doubt, this question of the capacity of animplement, the manner in which it is to be tested, and the purchaser’s rights upon the implement proving to be unfit, was the most fruitfulcause of controversy, and that, invariably, the contract entered into by the parties and which the Courts had to recognise, was to theentire disadvantage of the purchaser.

And always there was apparent the great practical and mechanical difficulty of anybody being ableto say in advance that a given implement would work satisfactorily when put to the test in actual ploughing or threshing.

The result wasthat, in many cases, the farmer was left with an implement on his hands which did not suit his purposes, which he would gladly havereturned, but which on account of his contract he had to keep and pay for; his sole remedy, if any, being a doubtful suit for damages.There is no doubt, in my opinion, that the main object of the Act was to remedy this situation by stipulating, in express terms, whatconditions should prevail between the parties in regard to this most important feature of the contract.

The statutory provisions which we have under consideration here seem to contain a frank recognition of the difficulties involved. First,the purchaser has 10 days in which to try the machine; if this trial proves unsuccessful, the vendor has 8 days in which to remedy thedefect and to make the machine work; if he does not succeed within these 8 days, the purchaser may reject the implement, in which case,the clause says, “the contract shall be at an end and he (the purchaser) shall be entitled to a return of any moneys paid or notes giventherefor by him and the freight paid by him”.

The clause further goes on to provide that, if the vendor succeeds in making the machinework and the purchaser’s failure to do so is found to be due to his own improper management or want of skill, the vendor shall beentitled to recover his expenses from the purchaser. No provision is made for having the purchaser reimbursed his running expenses bythe vendor in the contrary case, and I cannot believe, under the circumstances, that the omission was not intentional. It cannot, it seemsto me, be treated as an oversight.

The provision as a whole is substantially in favour of the purchaser, as it alters very considerably theconditions which existed during the time that freedom of contract prevailed and the contracts entered into were prepared solely by thevendor. And the same may be said of the statute in its entirety. It is reasonable to assume, therefore, that the Legislature, in imposingsuch a contract upon the vendor, intended at the same time to limit his obligations by express words.

If I am right in my view of thematter, the plaintiffs are not entitled to recover the sums claimed for wages paid to workmen, for gasoline and oil, or on account of theloss of crops, but the judgment appealed from awards to them all they are entitled. [51] The reasons of Lamont and Turgeon JJ.A. assist with an understanding of the legislative intent underpinning the originalstatute, but none of the separate opinions in Murdoch address the specific question that arises in this appeal. [52] I note that the Supreme Court of Canada addressed the constitutionality of certain amendments to The AgriculturalImplements Act, 1968 in its unanimous decision in Massey-Ferguson Industries Ltd. v Government of Saskatchewan, (SCC), [1981] 2 SCR 413.

The amendments at issue are unrelated to the matters at issue in this case, but the reasons of Laskin C.J.C.contain this description of one of the purposes of the legislation (at 418): The Agricultural Machinery Act, 1958 continued the prescription of statutory forms of contract in the predecessor Act, including trialperiods to enable the purchaser to determine whether the machinery works.

The lien or conditional sale provisions of the earlier Act werealso continued and so were the repossession provisions and as well the provisions for arbitrating the value in the case of largeimplements if the parties were unable to agree on it.

Chief Justice Laskin’s reference to a trial period enabling the purchaser to determine whether an implement works might be seen assuggestive of a subjective standard of assessment but, as I read his remarks, the Chief Justice was merely noting the existence of astatutory trial period and warranty; he was not addressing the issue of how to assess an alleged breach of warranty. [53] The facts in Chursenoff v Bailey Brothers, (SK CA), [1924] 2 DLR 1105 (Sask CA) [Chursenoff], differfrom those at hand—that case dealt with rights and remedies for non-payment; however, the case is of assistance becauseHaultain C.J.S., who had dissented in Murdoch but now spoke for three of a four member panel (Lamont J.A. wrote concurring reasons),addressed the object of the legislation in these general terms:

[12] It will thus be seen that the agreement, even if it is a lien note, was made in direct violation of the provisions of The FarmImplement Act. That Act, in my opinion, states exclusively the rights and liabilities of vendors and vendees under contracts and lien notes.The only right to a lien for unpaid purchase-money is that given by the Act, and the only rights and liabilities attached to or incidental tothe lien are those which are created by the Act.

The whole object of the Act is clearly and exclusively to define the whole agreementbetween the parties, and any attempt, such as in the present case, to enlarge the liabilities of the purchaser, is in my opinion, of no effect. [Emphasis added] [54] The importance of what Haultain C.J.S. said in Chursenoff lies in the statement that the legislation is designed to “clearlyand exclusively define the whole agreement between the parties”.

This is in line with the majority reasons in Murdoch and expresses theharmonious opinion of the Court in that regard. [55] Justice Tucker, in the much later case of Binnington v J.I. Case Company and Saskatoon Farm Equipment Ltd., [1965] SJNo 73 (QL) (QB) [Binnington], a decision referenced by the trial judge in this matter, applied the

interpretation in Murdoch andChursenoff when considering whether a drill had satisfied the warranty that it would perform well the work for which it was intended. Inaddressing that question, Tucker J. wrote: [17] The expert rated the functional performance of this type of drill as good with limitations as to use in heavy type soils. He statedthis type of drill with proper adjustment and used in a correct manner under most conditions would well perform its purpose. Apparentlythe correction in adjustment made by the experts had been an error and had actually made the drill unworkable.

Evidently the plaintiffhas not the type of heavy land in which the expert found the drill had the limitations mentioned and it is strange that in this instance thedrill functioned as the expert found it did when operated in moist, heavy clay soil. However, I have no hesitation in accepting theevidence of the plaintiff that he properly used and operated the drill according to directions in the manual provided by the defendant J.I.Case Company, and did obtain the unsatisfactory results claimed by him. The contract gives as the work the drill was intended toperform as to sow under suitable conditions.

No exceptions were stated as to the type of soil in which it was to be used. There is nosuggestion that it was not operated under suitable conditions or in the type of soil in which the vendor knew or should have known it wasto be operated.

So, in my opinion, the poor results proved there was a breach of the warranty that it would well perform the work forwhich it is intended if properly used and operated. [Emphasis added] [56] Justice Tucker’s reference to “unsatisfactory results claimed” by the farmer is suggestive of a subjective approach toperformance in that it seems to take into consideration the farmer’s degree of satisfaction with the implement. However, the case is alsoof particular importance because Tucker J. noted that the standard form contract had uncompleted blanks related to the conditions of thesoil in which the drill would be used.

He stated these sorts of particulars would be needed if a seller-defendant sought to avoid liabilityon that basis. [57] In Zazula v Belarus Equipment of Canada Ltd. (1985), (SK KB), 45 Sask R 101 (QB), Grotsky J.concluded a tractor had not “performed well” and was upheld on appeal ((1986), (SK CA), 54 Sask R 318 (CA)).

Helooked to the farmer’s intention when purchasing the tractor and referred to the dealer’s assessments of the tractor and attempts to repairit as factors indicating it had not performed well: [8] Within a day or two of taking possession of the Belarus the plaintiffs used it to pull their cultivator. Within a few hours of its usethe tractor began to leak oil. New rings had to be installed by Rissling. During the spring and summer of 1979 Rissling was out to servicethe tractor between 15 and 20 times.

It was necessary for Rissling to go out to the plaintiffs’ farm to make necessary repairs as his shopin Kelvington was too small to accommodate the tractor. From the time they took possession of the Belarus, until freeze-up, the plaintiffsput on approximately 230 hours. Morris Zazula described them as difficult hours. Frustrating hours. At times, during this period of use,there was no hydraulic. It was not possible to lift the cultivator. They, particularly Morris Zazula, had difficulty steering it. Shims had tobe put on the rear wheels. At times it would not suck fuel.

Because of rust in the fuel tank, the oil filter had to be changed. Eventually,through lack of power, the engine became weaker. On occasion the rear wheels locked. Then, the tractor could not be made to turn. Onother occasions, only its ability to properly turn was affected. Then, it was only difficult to turn. The batteries, on occasion, requiredboosting to start up the tractor.

As I read his decision, while Grotsky J. referred to the evidence of performance in terms of what the farmers had themselvesexperienced, it is clear his was an objective assessment of the tractor’s performance for the purposes of the s. 36(4) warranty. [58] In Owens v Sperry New Holland, [1987] SJ No 512 (QL) (QB), Noble J. considered a breach of statutory warranty claim inrespect of a combine that had “experienced a significant number of breakdowns” and where the dealer had been required to “makenumerous repairs” over a two-year period.

Justice Noble addressed The Sale of Goods Act warranties of fitness for purpose andmerchantable quality as well as the statutory warranty under s. 36(4) of The Agricultural Implements Act. In the latter respect, his reasonsreveal he analysed the claim from an objective perspective. He wrote: Here again the plaintiff contends that the defendant sold him a machine which breached the warranties set out in the statute. He arguesthat this combine did not perform well the work for which it was intended. I agree it was not perfect, but with the help of the defendant’sagents, the plaintiff did get his harvest done.

Perhaps it took him longer than he anticipated during the first two years, butnotwithstanding that I am not convinced the combine performed so poorly that it breached the warranty provisions of s. 36. The evidenceis clear that the trouble spot i.e. the spacer design defect which created the vibration in the mainshaft was not visible to the naked eyeand was difficult to locate. The defendant did its best, and in my opinion, kept the machine running in at least a passable way up untilthat point. They neither neglected or delayed acting on the plaintiff’s complaints.

Accordingly, I cannot find that the defendant breachedthese statutory warranties. I draw this conclusion assuming that the plaintiff is entitled to rely on The Agriculture Implements Act [sic]because none of the usual notice provisions of the Act were used in this instance. It was argued that the defendant waived the noticeprovisions, and while I need not make any finding on this aspect of the matter in light of my finding of fact respecting the alleged breachof warranty, it is true the defendant was quick to respond to any complaint from the plaintiff and usually did so within seven days. One

gets the impression the defendant was attempting to keep within the times prescribed by the Act. [59] In Whitehead Farms Ltd. v Farm Rite Equipment Ltd. (1989), (SK KB), 74 Sask R 241 (QB), Maurice J.found a new combine, which had a “plethora of problems … akin to what a twenty year old combine could expect to experience” where“[t]he causes of the problems were myriad” leading to the combine having been out of service 21 of 29 days (at para 3), had notperformed well the work for which it was intended and that the dealer had breached s. 36(4).

However, the evidence supporting hisconclusion was so overwhelming as to render irrelevant any question of whether the claim ought to be assessed on an objective orsubjective basis. In this regard, Maurice J. simply said it was “apparent” the combine did not perform well the work for which it wasintended (at para 5). [60] The decision in Cowan Properties v Apollo Distributing Corp., 2004 SKQB 228, 248 Sask R 60, suggests an objectivestandard under s. 36(4). In that case, a plaintiff had asserted a manure spreader was “entirely unfit for spreading compost”.

The caseultimately turned on the plaintiff’s failure to give notice and to permit the dealer to address performance issues.

And, while the plaintiffhad characterised the breach in the language of The Sale of Goods Act, i.e., “fit for the purpose”, Kovach J.’s comments on theperformance issue under s. 36(4) are helpful: [13] The plaintiff has not established to my satisfaction, on a balance of probabilities, that the Spreader was not fit for the purpose ofspreading compost nor manufactured in compliance with the warranties contained in the Act. [14] Other than the fact of a chain breakage, on two separate occasions, there was no evidence produced by the plaintiff, either in Mr.Cowan’s affidavit, or during his testimony, addressing the cause of breakage. [15] If deficiencies did exist in the Spreader, as claimed, the dealer or the distributor are expressly entitled to an opportunity to repairor correct the deficiencies, upon receipt of notice in writing.

The defendants were deprived of the opportunity to inspect and repair by theunreasonable actions of the plaintiff, in his failure to allow return of the Spreader. [Emphasis added] [61] In Beutler v Leon’s Manufacturing Company Inc., 2010 SKPC 48, the plaintiff had experienced problems with a front-endloader, which had been designed to hold a single bale, when he attempted to move multiple bales.

While Klause P.C.J. found no breachof s. 36(4) because the plaintiff had not used the loader for the purpose for which it was intended, his analysis also suggests he used anobjective standard to assess its performance: [11] In my opinion, the Plaintiff used this FEL for a function that it was clearly not designed to perform in an effort to save himselfboth time and money. The Defendant at all times tried to make the Plaintiff happy with his purchase and demonstrated to him the properuse of the FEL.

If the Plaintiff insists on using an implement in a fashion for which it is clearly not designed, it is difficult to see how theDefendant can be liable in contract. The Plaintiff called Mr. Edwards to indicate that in his opinion, the Plaintiff operated the FELproperly. The evidence on this point is not particularly useful as the Plaintiff would often be using the FEL where it could not beobserved by Mr. Edwards and I do not accept that Mr. Edwards would have authorized the use of this particular FEL in lifting two balesvertically or even one bale vertically.

The design speaks for itself. … [16] The issue of time limits, however, is a moot point as I have previously found that the Plaintiff did not use the implement asrequired by s. 36(4) of the Act. He did not properly use and operate it. In my opinion, had the Plaintiff properly used the FEL in themanner and the form in which it was designed for use, he would have been satisfied with its performance. [Emphasis added] [62] As is evident, breach of warranty claims under The Agricultural Implements Act are often paralleled by claims under TheSale of Goods Act.

Indeed, the Cowards suggest the case law under The Sale of Goods Act is instructive in identifying the standardapplicable to an alleged breach of warranty under s. 36(4). In particular, they point to the analogous statutory warranty of fitness forpurpose in that Act and observe that Klebuc J. (as he then was) approached the issue at trial in Nikonetz v Farm World Equipment Ltd.,2004 SKQB 303, 251 Sask R 45, under The Sale of Goods Act.

However, that case involved the sale of a used combine, which had ledKlebuc J. to conclude that decisions under s. 36 of The Agricultural Implements Act were “of nominal value.” [63] I, too, am reluctant to find any merit to the submission that s. 36(4) ought to be interpreted in the same way as The Sale ofGoods Act. In the Royal Commission Report, the Commissioners clearly considered the warranties under The Sale of Goods Act asinadequate. The initial legislation made no reference to The Sale of Goods Act.

The Legislature subsequently amended the legislation toprovide for the application of The Sale of Goods Act, common law and equitable remedies. However, the Legislature is not want to actredundantly. In my judgment, the statutory warranties under The Agricultural Implements Act stand apart from those under sale of goodslegislation and from remedies available at common law or in equity and, for that reason, are to be interpreted apart from those warrantiesand remedies. 5. Objective vs subjective standard [64] Having reviewed the legislative history and judicial

interpretation of the statute, I find very little support for the propositionthat the question of breach of the statutory warranty under s. 36(4) of The Agricultural Implements Act calls for a subjective assessment.The history of this legislation reveals clear intention to level the playing field between farmers and implement dealers so as to establishcontractual fairness. An

interpretation of s. 36(4) as giving rise to a subjective analysis of breach, whether subjective to the farmer or tothe implement dealer, would be inconsistent with the purpose of the legislation. The legislation is designed to enforce contractualfairness by eliminating power imbalance, not by creating one. This strongly weighs in favour of an objective assessment of performance. [65] I further conclude that an objective approach fairly permits a trial judge to reach a contextual determination of what the

adverb well in the phrase “perform well” might mean in any particular context and that this does not render the opinion of the purchaser irrelevant. Moreover, if the statutorily-mandated form of contract is completed properly, then there should be no issue as to whether an objective assessment might somehow disregard how well a dealer or distributor represented that a new implement would perform. This has been the case since the earliest

interpretation of the statute in Murdoch , when Turgeon J.A. wrote, “[t]here is no doubt, in my opinion, that the main object of the Act was to remedy this situation [i.e., an implement that did not live up to its represented performance] by stipulating, in express terms, what conditions should prevail between the parties in regard to this most important feature of the contract” (at 300). This

interpretation was taken further in Chursenoff , where Haultain C.J.S. stated, “[t]he whole object of the Act is to clearly and exclusively define the whole agreement between the parties, and any attempt, such as in the present case, to enlarge the liabilities of the purchaser, is, in my opinion, of no effect” (at 1109).

Although the Chief Justice was addressing purchaser liabilities, the principle has the same application to vendor liabilities since the statute is designed to achieve contractual fairness. [ 66 ] Lastly, as the foregoing indicates, the jurisprudence strongly supports the conclusion that the courts have predominantly approached this question on an objective basis. [ 67 ] Therefore, I conclude the Legislature intended the courts to employ an objective standard when assessing the performance of an agricultural implement for the purposes of determining whether the vendor has breached the statutory warranty under s. 36(4) of The Agricultural Implements Act .

As such, I find the trial judge correctly approached this matter when he assessed the performance of the 1184 Sprayer on an objective basis. 6. Application of the objective standard in this case [ 68 ] As part of their submissions under s. 36(4) of The Agricultural Implements Act , the Cowards say the trial judge’s choice of an objective standard led him to commit errors in his fact-finding on the issue of whether the 1184 Sprayer had “performed well the work for which it is intended.” While the trial judge did not err in his approach, I will examine the Cowards’ allegations of factual error.

To be clear about this, the trial judge characterised the performance issue with the 1184 Sprayer in these terms: [10] The plaintiffs contend that the 1184 did not perform well the work for which it was intended. It appears that the plaintiffs maintain that while the spraying apparatus of the 1184 worked properly, the self-propelled aspect of the 1184 did not. I appreciate there is a correlation between the speed at which the 1184 was to travel the ground and the rate of application of chemical.

However, it would appear that the plaintiffs’ concern is focused on the ability of the self-propelled unit to travel at suitable speeds. [11] Mr. Coward’s evidence was that the engine was not powerful enough to drive the implement at the speed he wanted. In short, it was underpowered and the engine had to overexert itself. He testified that he eventually purchased a sprayer from another manufacturer that he said ran much better.

However, the model he bought had different specifications than the 1100 Agco series and this results in an uneven comparison. [ 69 ] The Cowards do not dispute the trial judge’s characterisation of the issue, but rather they assert he failed to appreciate or failed to consider material evidence that went to that issue, namely, that: (

a) Kramer’s service technicians had recorded the hydrostatic drive system of the 1184 Sprayer as not operating properly or as malfunctioning and AGCO’s expert had testified that the repair effected by Kramer would not fix the malfunction; (

b) the Cowards’ replacement sprayer was comparable to the 1184 Sprayer; and (

c) the farmer who bought the 1184 Sprayer from the Cowards had installed a performance chip to improve its performance. [ 70 ] These allegations all relate, in one way or another, to the performance problem the Cowards had associated with the hydrostatic drive system of the 1184 Sprayer. The Cowards acknowledge the trial judge accepted the evidence of AGCO’s experts, Barry Chadwick and Todd Howatt, as supporting the conclusion that the 1184 Sprayer had worked properly (at para 20). They say, however, the trial judge misapprehended the evidence that supported the alternative conclusion.

There are a few variations of this. [ 71 ] First, the Cowards say that facets of Mr. Howatt’s testimony regarding the self-propelled aspect of the 1184 Sprayer actually supported the proposition that it had not been working as intended. The Cowards assert that, to understand this allegation, a distinction must be drawn between flywheel or engine horsepower and drawbar horsepower. [ 72 ] Relying on the testimony of Mr. Howatt, who was AGCO’s expert on hydrostatic drive systems, the Cowards assert what was at issue was the sprayer’s performance at the drawbar, not at the engine.

To the Cowards, the importance of this distinction lies in the fact that Mr. Chadwick, AGCO’s expert on engines, had not been qualified as an expert on hydrostatic drive systems and could not speak to performance at the drawbar. Mr. Chadwick had testified that the Cat Tier 3 engine that powered the 1184 Sprayer “gives exactly what the nominal performance said it should give, 275 horsepower at 2100 rpm and 977 pounds feet of torque at 1400 rpm. So it meets the specification advertised exactly”. That is, the Cowards here assert that Mr.

Chadwick’s testimony did not actually address the Cowards’ issue with the 1184 Sprayer’s performance, but Mr. Howatt’s testimony did and it supported the conclusion that the 1184 Sprayer was not working as intended. [ 73 ] To paraphrase Mr.

Howatt’s testimony, although an engine may be producing its indicated horsepower at the flywheel, as that horsepower passes through all the systems of the implement—e.g., the alternator (which in turn powers electronic systems), etc.— horsepower is bled-off as it powers those ancillary systems, leaving lower-than-indicated horsepower available at the drawbar to turn the wheels of a self-propelled implement.

In context, the Cowards’ allegation is that the 1184 Sprayer’s hydrostatic drive system caused a parasitic power-loss that reduced the sprayer’s horsepower at the drawbar, leaving it underpowered, just as the Cowards’ had complained. In their factum, the Cowards place considerable significance on the fact Mr. Howatt had agreed in cross-examination that he would have been available to inspect the 1184 Sprayer in this regard, but that AGCO had not asked him to do so. [ 74 ] It is important here to recall that the parts of

Schedule A—i.e., the statutorily-mandated contract—between Kramer and the

Cowards that specifically address drawbar horsepower had been left blank by the parties: 13. The dealer and distributor warrant that the implement(

s) is/are capable of developing ____ power at: power take off ____: drawbar ____; or _____. (check one) if properly maintained and operated under suitable conditions. Whereas, the parties had completed the s. 36(4) warranty provision of

Schedule A by stating that the statutory warranty pertained to the 1184 Sprayer’s performance in spraying : 14. The above implement(

s) shall perform well the work or functions for which it was intended and which principally includes: Spraying This is important evidence. For the purposes of the s. 36(4) warranty, the agreement between the Cowards and Kramer said nothing about drawbar horsepower and identified spraying as the principal work the 1184 Sprayer was intended to perform. This evidence and the decisions in Murdoch , Chursenoff and Binnington opened the door to an argument that there was in fact no warranty to the effect that the 1184 Sprayer was capable of developing any specific level of horsepower at the drawbar.

Nonetheless, the trial judge addressed the claim as it had been put forward by the Cowards, i.e., as a performance issue related to drawbar horsepower on a self-propelled sprayer. [ 75 ] Regardless, on the whole of it, I am not persuaded by the Cowards’ arguments. I am unable to conclude the trial judge committed a palpable and overriding error when addressing the testimony identified by the Cowards. I say this chiefly because the trial judge accepted Mr. Howatt’s testimony, including that which is now highlighted by the Cowards. Importantly, Mr.

Howatt agreed in cross-examination that he “never went out and looked at this machine”. Rather, his evidence was expert opinion as to how parasitic power-loss always occurs in an implement and testimony as to the conclusions he had drawn after examining a floor-model RoGator 1184H self-propelled sprayer. In the latter regard, Mr. Howatt said: … Fundamentally that the machine appears to be functioning correctly. The speed ranges, first, second, third and fourth speed ranges are all achieving the correct top speed.

And then also with that, the -- the drive pressure is well within an operating range, so everything appears to be functioning normally. [ 76 ] As the trial judge remarked, the Cowards bore the onus of proving a breach of the statutory warranty in s. 36(4) . What this means is that the onus lay with the Cowards to show on the basis of evidence adduced at trial that power lost parasitically to the hydrostatic drive system had so underpowered their 1184 Sprayer at the drawbar as to amount to a breach of the s. 36(4) warranty because it did not perform well the principal work of spraying . Mr.

Howatt’s evidence does not assist the Cowards in this regard because he had not examined their 1184 Sprayer and he concluded the one he had examined was “functioning normally”. That is, while Mr. Howatt’s testimony supports the Cowards’ theory as to the cause of performance issues, it does not prove either that those performance issues existed with the 1184 Sprayer or that they had been caused by parasitic power-loss. [ 77 ] In short, I am not persuaded the trial judge erred in his assessment of Mr. Howatt’s testimony. Regardless of the view that is taken of it, Mr.

Howatt’s testimony could not have affected the result in this case because his evidence did not go directly to the issue the Cowards sought to place before the trial judge, namely, the performance of the hydrostatic drive system on the Cowards’ 1184 Sprayer. [ 78 ] The Cowards next turn to the fact that two of Kramer’s service technicians had worked on the 1184 Sprayer, namely, Dennis Myrah (who testified) and Matthew McDougall (who did not testify). Mr. Myrah said he had worked on the 1184 Sprayer on two occasions. He and Mr. McDougall had made records of their observations and actions.

In their initial report to Kramer, Mr. Myrah and Mr. McDougall wrote: THE MACHINE WAS LUGGED DOWN USING 100% LOAD. COULD NOT OPERATE AT PROPER SPEEDS. [ 79 ] Given their observations, the technicians recorded data directly from the 1184 Sprayer’s internal systems and wrote a report for Kramer. The reports formed the basis for Kramer’s and AGCO’s repair efforts. Kramer and AGCO first made a repair to a floor- model 1184H Sprayer to assess its effectiveness. Satisfied with the results, Kramer made the same repair to the Cowards’ 1184 Sprayer.

The technicians recorded its effect on the Cowards’ 1184 Sprayer as follows: Action Taken By Dealer: went out to machine - at idle eng load is 20%, charge is 422, drive is 360 brake on - brake off charge 422, drive 371 - drove machine on road 4th gear empty tank full hyd and throttle eng at 100% load boost at 27 psi charge 490, drive 3840 - performed stall test charge 450, drive 6780 - both pumps same press for all test - drove machine again on road empty full throttle and full hyd 1st gear 85% eng load, 2nd gear 88%, 3rd gear 97%, 4th gear 100% [ 80 ] The Cowards assert this information establishes that the 1184 Sprayer was drawing down engine power far more than the floor-model 1184H sprayer from which comparator data had been collected.

In addition, the Cowards speculate that, had the tests been conducted in field conditions, even more power would have been drawn down, given poorer terrain. More concretely, the Cowards point to the testimony of AGCO’s experts, where Mr. Chadwick agreed the repair had made “very little difference” and Mr. Howatt said the repair would have had “very negligible effect on engine lo

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