The Canadian Pork Council is seeking almost $1 million after a hog operation that received Cull Breeding Sow Program (CBSP) funding was put back into operation by new owners.
A statement of claim, filed Feb. 7 in a Brandon court, names Westoba Credit Union, Crocus Country Pork, and BDO Dunwoody Ltd. All parties were given 20 days to respond to the claim of “unjust enrichment” — although Patrick Riley, a lawyer with Taylor McCaffrey LLP, whose name is on the claim, said last week the listed parties had filed for an extension of time to file their defence.
According to the claim, in June 2008 the Canadian Pork Council agreed under the CBSP to extend a $781,000 grant to Barry Gosnell, owner of Crocus Country Pork, on a pledge that he stop raising hogs in his barns for three years. But before the deal was finalized, Crocus Country Pork went into receivership.
The pork council claims it was told by Westoba Credit Union, a secured creditor, that it should apply to receiver BDO Dunwoody for repayment of the grant. The filing also states BDO Dunwoody sold the barns without gaining the buyer’s agreement to abide by the terms of the cull program.
In January 2010, the operation’s barns were sold to a numbered company, and in September of that same year, an audit conducted by the pork council found that “breeding swine were located in the barns, contrary to the requirement,” according to the claim.
The total claim is for $961,732, a figure that includes fees and interest up to July 15, 2011.
Under the CBSP terms, buyers of hog facilities were also required to abstain from raising hogs in them for the length of the agreement, but none have so far resulted in a court action.
“This is the first where we have had to initiate proceedings for recovery under the CBSP,” said Gary Stordy, public relations manager for the Canadian Pork Council.
The cull program was launched in 2009 after high feed prices, a high Canadian dollar, and a “swine flu” outbreak crippled profitability in the swine sector.
A press release on the pork council’s website states that of 100 barn audits conducted under the program, only two operations were found to be not in compliance with the terms of the three-year production ban.
The program, which saw 748 claims filed, reduced the national sow herd by 8.4 per cent, or over 128,000 head, with total payments of $28.5 million.