A dairy company has won the latest round in a court battle with the B.C. Milk Marketing Board over “bad milk” delivered to its Burnaby plant.
Saputo Products Canada was shipped two batches of contaminated milk, according to a B.C. Court of Appeal ruling last Wednesday.
In August 2013, the Burnaby plant got a shipment of milk, later discovered to be contaminated, from Chilliwack Cattle Sales Ltd.
Assuming the milk was good, Saputo put the milk into production.
“Saputo blended the contaminated milk with uncontaminated milk, which caused a total of 223,230 litres of milk and cream to be contaminated, which, in turn, caused damage to 111,921.12 litres of packaged product, allegedly causing damage to Saputo totalling $65,317.57,” states the ruling.
As per the regulations around milk marketing in B.C., Saputo had paid for the milk shortly after getting it.
The company requested the milk marketing board reimburse it for the alleged damages, but the board refused, so Saputo withheld payment for a later shipment.
A similar incident happened in February 2015, when Saputo received shipment of organic milk at its Burnaby and Abbotsford plants from Cedarwal Farms Ltd. in Abbotsford.
After the shipment was co-mingled with milk already stored in silos at each plant, the Canadian Food Inspection Agency told Saputo it was conducting a safety inspection of the milk produced at Cedarwal because the dairy cattle’s organic feed contained aflatoxin in amounts above permissible levels, according to court documents.
While the inspection found the milk in question didn’t present any risk to human health, Saputo maintains the safety alert and the shelf life of certain affected products meant it couldn’t market products with the milk.
The company claims the incident cost it $26,303.64, and it once again withheld payment for a future shipment to offset the damages.
In June 2015, the marketing board petitioned the B.C. Supreme Court to order Saputo to pay up with interest and to abide by the regulations.
An application by Saputo to have the marketing board’s petition converted into an action that would go to trial was rejected by the B.C. Supreme Court a year ago but upheld in a B.C. Court of Appeal decision last week.
Among other things, going to trial means Saputo could go after third parties (Chilliwack Cattle Sales and Cedarwal) to recoup its losses if it loses the case to the marketing board.
