Saputo is asking the court to declare it is entitled to withhold funds over milk delivery issues in 2013 and 2015
SUMMERLAND, B.C. — Montreal-based dairy processor Saputo and the British Columbia Milk Marketing Board are locked in a tug-of-war court battle stemming from two separate deliveries of suspect milk.
The milk ultimately proved safe, but in the latest court action, a civil claim filed in B.C. Supreme Court Feb. 6, Saputo wants the court to declare that it is entitled to withhold money from payments it owes the milk board to compensate for damages.
The milk board had previously filed a petition in June 2015 seeking a court order compelling Saputo to pay the outstanding money it says is owed to dairy farmers. The board said it acts only as a central pooling agency, selling farmers’ milk from the pool to processors and then distributing the money back to farmers. That petition has not yet been heard.
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“Saputo had simply deducted funds owed technically to all B.C. producers,” Vicki Crites, the board’s manager of policy and communications, said in an email.
“The board has never prevented Saputo from attempting to recover any alleged costs from the two producers in question.”
Saputo did not respond to interview requests.
The first of the milk deliveries in question occurred Aug. 12, 2013, at Saputo’s plant in Burnaby, B.C.
Saputo said 17,700 litres of raw milk were delivered, but only after it had blended it with other milk was it told the milk in the delivery contained bacteria above the allowable limit, according to the February court filing.
As a result of not being told until after the milk was processed, Saputo said 223,230 litres of milk and cream worth $65,000 were affected. The company later de-ducted that amount from payments owed to the milk board.
Saputo is also asking the court to approve the company’s decision to withhold a further $26,000 from milk board payments over a delivery of 120,000 litres of organic milk to its Burnaby and Abbotsford plants in February 2015.
The company said that shortly after the delivery, the Canadian Food Inspection Agency tested the milk to see if it had been produced by cows that had been given feed contaminated by aflatoxin, a human carcinogen produced by mould.
Saputo learned a week later that the milk it had blended with the suspect milk did not pose a health threat to humans, but the delays caused $26,303 in damages, according to the lawsuit.
In the February court filing, the company has asked the court to declare that it is entitled to withhold the funds because the milk board failed to deliver a proper standard of care.
Saputo also named Chilliwack Cattle and Cedarwal Farms Ltd. in the suit.
Chilliwack Cattle was the source of the 2013 delivery and Cedarwal Farms was identified as the source of the 2015 delivery.
However, in an April 2016 court application to have the milk board’s original petition changed to a civil case, Saputo sought leave to file third party notices against Chilliwack Cattle and Cedarwal, while also filing the third party claims on the same date without leave to do so.
In July 2016, Saputo’s application to add the other parties was turned down, a decision the company has since appealed with the matter scheduled to be heard in April.
Crites said the milk board hopes the issue can be resolved soon, and it values a good working relationship with Saputo.
She said Saputo has never responded to the board’s original court petition to force Saputo to pay what the board considers to be outstanding money owed.
The board had not yet been served an official notice of claim about Saputo’s Feb. 6 lawsuit, she said.
