BC Tree Fruits sued over cherry-packing contract

Sued over cherry packing

Photo: Castanet

A Summerland-based company is seeking hundreds of thousands of dollars from BC Tree Fruits after it says the co-op failed to pay for its fruit-packing services.

In a notice of civil claim filed Tuesday, Mangal Capital Inc. says B.C. Tree Fruits Co-operative owes the company about $342,000 for fruit packing services it supplied, just one year after the two local companies entered into an agreement.

Mangal, which operates Summerland's Sandhu Fruit Farm, says it entered into a contract with B.C. Tree Fruits on Nov. 14, 2022 to pack B.C. Tree Fruit cherries grown in the Okanagan, Creston and Similkameen Valleys. B.C. Tree Fruits is an Okanagan co-operative made up of local fruit growing farmers, and operates three of its own packing facilities and six receiving facilities.

Mangal claims it packed cherries for B.C. Tree Fruits throughout July 2023 pursuant to the terms of their agreement and invoiced the co-operative on Aug. 4, 2023 in the amount of $408,800. According to the lawsuit, Mangal says they've yet to receive payment.

While B.C. Tree Fruits has yet to respond to the lawsuit, Mangal says the co-operative has disputed the charges by alleging Mangal did not have a “CanadaGAP certificate,” which they say “impacted B.C. Tree Fruits' ability to process cherries for the domestic and export market.”

According to its website, CanadaGAP is a food safety program for companies that produce, handle and broker fruits and vegetables and “involves having a third party auditor from the Certification Body visit the operation, review the food safety manual(s) and related records, interview the operator and staff, and assess the company’s conformance to the CanadaGAP Audit Checklist.”

But Mangal calls this a “meritless purported justification to withhold payment,” and notes there was no provision in their original agreement that required Mangal to have the certification.

“Mangal has continued to pack fruit for its other customers. Those customers have had no issues with the absence of a CanadaGAP certificate and have continued to ship domestically without interruption,” Mangal states.

“Mangal has performed the services under the agreement and is now entitled to full payment. There is no justification for BC Tree Fruits' continued refusal to provide payment.”

While Mangal claims $408,800 in unpaid services, it concedes about $105,000 is owed back to BC Tree Fruits for supplied packaging materials. But with an additional claimed $20,440 in GST, $17,336 in interest and $1,310 in compensation for “culled” cherries (fruit that's not of suitable quality to be packed), Mangal appears to be seeking just under $343,000 in its claim.

BC Tree Fruits has not formally responded to Mangal's suit in BC Supreme Court and the co-operative did not respond to Castanet's request for comment on the matter by publication time.

The companies publicly announced their partnership this past February, touting Sandhu's "Cherry Vision 3.0" sorting and packing technology. In a press release, BC Tree Fruits president and CEO Warren Sarafinchan said their "strategic partnership with Sandhu Fruit Farm is an opportunity for the Co-operative’s export-oriented cherry growers to have their product packed on one of the best lines in the world."