Supreme Court of Canada denies farmers’ leave to appeal for class action status against crop insurer

The Supreme Court of Canada has denied leave to appeal, with costs, a Saskatchewan Court of Appeal decision that struck down a class action certification against the Saskatchewan Crop Insurance Corporation.
In Saskatchewan Crop Insurance v. Hicks, Saskatchewan Crop Insurance Corporation Inc. (SCIC) refused a claim by Tru Elements Ltd. under SCIC’s Weather Based Insurance Program (WBIP).
Farmers can opt to purchase WBIP as supplemental or “top-up” insurance in addition to the more typical, yield-based crop insurance, the Court of Appeal for Saskatchewan decision says.
Because of the nature of the program, individual producers are not required to file claims. Indemnities are calculated at the end of each crop year based on the readings of the weather station selected by the producer.
In this case, a weather station the SCIC uses to determine indemnities allegedly failed to record a frost on Aug. 10, 2005. As a result, the farmers pursuing the class action did not receive an indemnity payment for losses arising from the unrecorded frost.
The farmers argued it was an implied term of the WBIP program that SCIC would insist on quality control measures and independently verify the results of the weathering station that did not record the frost. Since the SCIC did not verify the results, it was in breach of its contractual obligations with respect to the WBIP, the farmers argued in their statement of claim.
But the Court of Appeal ruled that the respondents had not established an “apparent authentic or genuine” cause of action in either contract or negligence.
“There is no principled basis for arguing the WBIP program is to be treated any differently than a ‘typical’ contract of crop insurance,” the Court of Appeal said.
“As the respondents are relying entirely on implied terms… they have failed to disclose an authentic cause of action in contract. Their reliance on implied terms also results in their action being barred.”
The Court of Appeal went on to say that the trial judge had erred in law by concluding the respondents had disclosed a cause of action in negligence and contract against SCIC, and consequently the class action should not have been certified as against SCIC.