Legal query: Animals sold in the field but paid for through the mart

‘‘I am selling my weanlings in the field to an exporter and we agree a price per kilo, with the weanlings then weighed through the mart. I have always been paid as soon as the animals leave my farm by the mart (which deducts commission) but, more recently, the mart has said that it cannot pay me until it has been paid by the live exporter. What are my rights if the exporter collapsed before I got paid? Does the mart cover debts?’’

The Property Services (Regulation) Act, 2012 which came into force on 6 July 2012 makes provision for various protections to sellers of livestock through marts. It provides, among other things, that for the mart to issue payment for animals sold, it must have sufficient funds in the client account to cover all liabilities.

Further legislation requires marts to hold minimum levels of professional indemnity insurance to indemnify the mart against claims incurred by them arising from the services provided by them. Further, if a seller has cause to suspect that the mart is engaging in improper conduct, they can make a complaint to the Authority alleging that improper conduct by a mart has occurred or is occurring. The Authority, following an investigation, has the power to sanction a mart up to, and including, the revocation of a licence and may also impose fines of up to €250,000, where the mart is found to have engaged in improper conduct.

Where a person suffers a loss due to the dishonesty of a mart, the Authority may award compensation from a Property Services Compensation Fund, which marts, as property service providers, are required to contribute to that fund.

However, it is unlikely that you will be able to avail of the various protections under this legislation as the legislation only applies to a property service, which has been defined as including the auction of property other than land. Given that the animals were not auctioned on your behalf by the mart, the mart cannot be said to have provided a property service. As a result, the transaction will not be covered under this legislation.

Sale terms and conditions

Every mart should have conditions of sale and every seller, bidder and purchaser shall be deemed to have full knowledge of the conditions and be bound by them.

The general position regarding animals sold through a mart is that each lot is at the vendor’s risk until sold, but from the fall of the hammer shall be at the buyer’s risk. Each lot is at the purchaser’s risk from the time of purchase and purchasers are required to give their names and addresses and, if required, pay the purchase money in full immediately on the fall of the hammer.

In general, the conditions of sale provide that if any person fails to pay for any lot purchased by him/her, the auctioneers may either by themselves or their agent retain the lot at the purchasers sole risk until payment, plus additional expenses, is received. These expenses include freight incurred by them or their agent in keeping, maintaining, treating or otherwise dealing with the lot.

The auctioneers may at their discretion resell the lot at any time by private or public sale and the deficiency, if any, together with all costs and charges attending such resale shall be immediately made good by the person failing to pay. Further, the conditions of sale generally provide that no lot shall be allowed to leave the sales yard without a written order or a pass-out from the auctioneers and each lot must be cleared at the purchaser’s expense at the close of sale.

Role of agent

The conditions of sale generally provide that all livestock must be offered for sale in the ring and private sales prior to auction will not be recognised. By not offering the animals for sale in the ring, the auctioneers may absolve themselves from any obligations accruing to them as agents.

While marts may facilitate the weighing of animals and entering details on AIMS, they may seek to limit their duty/liability by providing that they are not acting as agents in the transaction but, simply, facilitating the weighing of animals and paying over the sales proceeds when received.

Ultimately, it will depend on the conditions of sale of the particular mart, and the circumstances of the case, as to whether the mart would be deemed to have taken on the role as agent.

The conditions of sale generally provide that, in the event of a dispute, the sellers redress shall be against the purchaser and not against the auctioneers who act as agents between the seller and the purchaser.

It is advisable to ensure that you are paid directly by the exporter for the animals before they leave your farm as the mart may argue that it was not acting as agent in the sale of those animals and is therefore not responsible for the payment for those animals.