Appellant Attorney-General-for

Transcription

S.C.C. File No. 35923
IN THE SUPREME COURT OF CANADA
(ON APPEAL FROM THE COURT OF APPEAL FOR SASKATCHEWAN)
A TTORNEY GENERAL FOR SASKATCHEWAN
APPELLANT
(Respondent)
- andLEMARE LAKE LOGGING LTD.
RESPONDENT
(Appellant)
- andATTORNEY GENERAL OF ONTARIO, ATTORNEY GENERAL OF BRITISH
COLUMBIA, ATTORNEY GENERAL OF ALBERTA
INTERVENERS
FACTUM OF THE
ATTORNEY GENERAL FOR SASKATCHEWAN
(Filed Pursuant to s 42 of the Supreme Court Rules)
SASKATCHEWAN MINISTRY OF
JUSTICE
Constitutional Law
820 - 1874 Scarth Street
REGINA SK S4P 4B3
GOWLING LAFLEUR HENDERSON
LLP
Barristers and Solicitors
160 Elgin Street, Suite 2600
OTTAWA ON KIP lC3
Tel:
(306) 787-6307
Fax: (306) 787-9111
Email: [email protected]
Tel:
(613) 786-8695
Fax: (613) 788-3509
Thomson Irvine
Katherine Roy
D. Lynne Watt
Counsel for the Attorney General for
Saskatchewan
Ottawa Agents for Attorney General for
Saskatchewan
-2 -
MACPHERSON LESLIE & TYERMAN
1500,410 - 22 nd Avenue East
SASKATOON SK S7K 5T6
DENTONS CANADA LLP
(306) 975-7136
Tel:
Fax: (306) 945-7145
Tel:
(613) 783-9600
Fax: (613) 783-9690
Jeffrey M. Lee, Q.c.
Kristen MacDonald
K. Scott McLean
Corey A. Villeneuve (Law Clerk)
Counsel for amicus curiae
Ottawa Agents for the amicus curiae
MINISTRY OF THE ATTORNEY
GENERAL OF ONTARIO
Constitutional Law Branch
4th Floor - 720 Bay Street
TORONTO ON M7 A 2S9
BURKE-ROBERTSON
441 MacLaren Street
Suite 200
OTTA WA ON K2P 2H3
Tel:
(416) 326-0131
Fax: (416) 326-4015
Tel:
(613) 236-9665
Fax: (613) 235-4430
Michael Dunn
Daniel Huffaker
Robert E. Houston, Q.c.
Counsel for the Attorney General of Ontario
Ottawa Agents for the Attorney General of
Ontario
BRITISH COLUMBIA MINISTRY OF
JUSTICE
Legal Services Branch
P.O. Box 9280 Stn. Provo Govt.
VICTORIA BC V8W 917
BURKE-ROBERTSON
441 MacLaren Street
Suite 200
OTTAWA ON K2P 2H3
Tel:
(250) 356-5597
Fax: (250) 356-9154
Tel:
(613) 236-9665
Fax: (613) 235-4430
Richard Butler
Robert E. Houston, Q.C.
Counsel for the Attorney General of British
Columbia
Ottawa Agents for the Attorney General of
Ontario
99 Bank Street, Suite 1420
OTTAWA ON KIP 1H4
-3 ATTORNEY GENERAL OF ALBERT A
4th Floor, 9833 - 109 Street
EDMONTON AB T5K 2E8
GOWLING LAFLEUR HENDERSON
LLP
160 Elgin Street, Suite 2600
OTTAWA ON KIP lC3
Tel:
(780) 422-9221
Fax: (780) 425-0307
Tel.: (613) 786-8695
Fax: (613) 788-3509
Lillian Riczu
D. Lynne Watt
Counsel for the Attorney General of Alberta
Ottawa Agents for Attorney General for
Alberta
TABLE OF CONTENTS
Page
I.
OVERVIEW OF POSITION AND STATEMENT OF FACT
A.
Overview of Position
1
B.
Statement of Facts
5
II.
ISSUES
9
III.
ARGUMENT
10
A.
10
B.
The Legislative Framework
(1)
Constitutional Basis for the SFSA and the BfA Provisions
10
(2)
Outline of the Mediation and Revision Process under Part II of
the SFSA
12
(3)
Other Provisions of Part II Are Not in Issue in this Appeal
15
(4)
Outline of the Receivership Provision Under Part XI of the BfA
16
(5)
Court-Ordered Receiverships are Always Discretionary
20
(6)
The Federal Farm Debt Mediation Act
22
The Paramountcy Issue
23
(1)
Outline of the Paramountcy Doctrine
23
(2)
First Branch: There is No Operational Conflict Between the
Mediation and Review Provisions and Section 243
26
(3)
Second Branch: The Mediation and Review Provisions Do Not
Frustrate the Federal Purpose
29
Restrained Approach to Frustration of the Federal Purpose
Section 243 is Not a Complete Code and Must Be
Interpreted Consistently with Provincial Law
Delays for Mediation and Review are Consistent with
the Purpose of Section 243
Section 243 is Discretionary
29
32
(a)
(b)
(c)
(d)
(4)
Summary
34
36
38
- 11 -
C.
The Constitutional Question is not Moot
39
IV.
COSTS
44
V.
ORDER SOUGHT
45
VI.
TABLE OF AUTHORITIES
46
VII.
STATUTORY PROVISIONS
48
TAB
Bankruptcy and Insolvency Act
A
The Saskatchewan Fann Security Act
B
APPENDIX A: Summary of Provisions of Part II of the SFSA Which Were
Not Raised in the Courts Below
C
PART I
OVERVIEW OF POSITION AND STATEMENT OF FACTS
A.
Overview of Position
1.
The Saskatchewan Farm Security Act ("SFSA,,)i is a significant piece of provincial
legislation in Saskatchewan. It is designed to protect the farming sector in Saskatchewan, which
historically has been a major part of the Saskatchewan economy and culture, and continues to be
so.
2.
Part II of the SFSA contains a mixture of provisions relating to the legal rights of farmers
with respect to their land. Some of these provisions date back to the Great Depression, having
been carried forward into the SFSA. Others have been enacted more recently, in response to
economic developments in the farming sector.
3.
The two key provisions of Part II in issue in this appeal are ss 9 and 11 of the SFSA.
These two provisions are the entry point for a mandatory mediation and review process between
a farmer and a mortgagee seeking to enforce its rights under a mortgage on farm land. The
mortgagee cannot institute court proceedings to enforce its claim until after the review and
mediation process has been completed, which can take at least 150 days. The purpose of this
mediation and review process is to ensure that all prospects for a mediated settlement are fully
explored. While this process is in operation, court proceedings cannot be instituted. If the
mediation and review process does not lead to a settlement, the creditor can then begin the court
proceedings to enforce its security.
I
The Saskatchewan Farm Security Act, SS 1988-89, c S-17.1.
-2 4.
This appeal raises the issue whether the mediation and review process applies when a
mortgagee applies under s 243(1) of the Bankruptcy and Insolvency Act ("BIA,,)2 for the
appointment of a receiver against the farm land of an insolvent farmer. The Saskatchewan Court
of Appeal has held that the mediation and review process governed by ss 9 and 11 of the SFSA
frustrates the purpose of s 243(1), triggering the doctrine of federal paramountcy. The Court of
Appeal therefore concluded that " ... Part II of the SFSA is inoperative in circumstances where an
application is made to appoint a receiver pursuant to s 243(1) of the BIA.,,3 The Court of Appeal
rejected the alternative argument that there was an operational conflict between the provisions,
holding that both laws could operate together. 4
5.
The Attorney General for Saskatchewan respectfully disagrees with the finding that the
impugned provisions are inoperative, and submits that the SFSA process does not frustrate the
purpose ofs 243(1) of the BIA. The Attorney General submits that the receivership provision is
a discretionary provision. A secured creditor is not required to proceed under s 243( 1), and s 243
expressly recognizes that a creditor could instead apply for a receivership under applicable
provincial law. The BIA receivership is simply one tool that may be available to a secured
creditor. Its primary purpose is that an order for a receiver under s 243 takes effect nationally, so
the creditor need only make one application for a receiver, rather than make separate applications
in each province where the debtor may have assets. In other respects, a receiver under s 243 is
much the same as a receiver appointed under provincial law. The Attorney General submits that
Parliament did not intend to exclude other remedies under provincial law, but simply to provide
one more option for creditors, particularly valuable for a national receivership order.
Bankruptcy and Insolvency Act, RSC 1985, c B-3, s 243(1), as enacted by SC 1992, c 27, s 89 and amended by
SC 2005, c 47, s 115 and SC 2007, c 36, s 58.
3 Reasons for judgment of the Court of Appeal, para 67 (Appeal Record ("AR"), p 052).
4 Reasons for judgment of the Court of Appeal, para 42 (AR, P 042).
2
-3 -
6.
The receivership provision under s 243 is discretionary in another way: the court has
considerable discretion whether to grant the receivership, depending on whether it is "just and
convenient" to do
SO.5
The secured creditor does not have a right to a receivership, even if the
debtor is insolvent and in arrears. The decision of the Court of Appeal in this very case
demonstrates this point. Having found that the appellant in that appeal, Lemare Lake Logging
Ltd. ("Lemare Lake") did not need to comply with the SFSA, the Court nevertheless ruled that
Lemare Lake was not entitled to a receiver under s 243. The Court concluded that Lemare Lake
should proceed" ... by way of the usual process - by way of foreclosure.,,6 That foreclosure
process would then be subject to the review and mediation provisions of the SFSA.
7.
That outcome demonstrates that the receivership provision designed by Parliament is a
discretionary provision. Whether the court will grant a receivership is discretionary, and will be
based on the court's assessment of what is "just and convenient" in all the circumstances of the
particular case.
8.
This Honourable Court has held that in cases raising a possible paramountcy issue, a
federal law should be interpreted in a manner that avoids a conflict with the provincial law, if at
all possible under the principles of statutory interpretation. That admonition plays a particular
role in this case, where the federal and provincial laws both regulate different aspects of the same
process. The area of bankruptcy law is one where, to a greater extent than usual, federal law is
drafted to operate harmoniously with provincial law, because of the inevitable and considerable
overlap between the federal and provincial laws. Provincial law relating to property rights,
5
BfA, s 243(1).
6
Reasons for judgment of the Court of Appeal, para 120 (AR, P 073).
-4 -
loans, debts, mortgages and security, and the contractual relations between creditors and debtors,
will all playa major role in assessing the rights and obligations regulated by the federal
bankruptcy and insolvency laws.
9.
This Court has also held that there is a high standard to be met before a court should
conclude that a provincial statute frustrates the purpose of a federal statute, and that the burden
of proof that the federal statute has been frustrated is on the party raising the paramountcy
doctrine. 7 As well, where the federal provision is discretionary in nature, it will be rare that a
provincial statute will be held to frustrate the purpose of the federal statute.
10.
Here, the federal provision should be interpreted consistently with the provincial law, to
ensure the two systems dovetail as much as possible. The discretionary nature of the BfA
provisions and the high standard for finding a conflict based on frustration all indicate that there
is no conflict based on frustration of the federal purpose in this case, and paramountcy is not
triggered.
11.
On the alternative branch of the paramountcy test, actual operational conflict, the
Attorney General agrees with the conclusion of both the courts below: the secured creditor can
comply with both the federal and the provincial laws, by first giving notice under the SFSA and
participating in the mediation and review process, before bringing the application under s 243 of
the BfA. Since it is possible to comply with both laws, there is no operational conflict.
Quebec (Attorney General) v. Canadian Owners and Pilot Association, 2010 SCC 39, [2010] 2 SCR 536, para 66
["COPA"].
7
-5 -
B.
12.
Statement Of Facts
This appeal has its roots in an intergenerational family dispute which arose in 2013 when
the Respondent, Lemare Lake, controlled by Eric and Chris Dutcyvich, brought an application in
the Saskatchewan Court of Queen's Bench seeking the appointment of a receiver under s 243(1)
of the BfA against 3L Cattle Company Ltd. ("3L Cattle"), a farming corporation controlled by
their father, David Dutcyvich. In response, 3L Cattle raised the mediation and review provisions
of Part II of the SFSA, arguing that Lemare Lake had to comply with those provisions before
bringing its receivership application. 3L Cattle also challenged the merits of the application,
arguing that Lemare Lake had not met the test for a receiver to be appointed. In response,
Lemare Lake filed a Notice of Constitutional Question in the Queen's Bench arguing that ss 9
and 11 of the SFSA conflicted with s 243(1) of the BfA and should therefore be rendered
inoperative on the basis of federal paramountcy.8
13.
The Attorney General appeared on the constitutional issue and argued that there was no
conflict between the provincial and federal acts. The Attorney General did not take a position on
whether a receiver should be appointed.
14.
The chambers judge, Justice Rothery, dismissed Lemare Lake's application for a court
appointed receiver in its entirety. Respecting the constitutional question, the chambers judge
held that Lemare Lake could comply with both Acts, by following the mediation and review
process of the SFSA before bringing the application for a receiver. 9 The chambers judge further
held that Part II of the SFSA did not restrict the purpose of s 243(1) of the BfA, namely, the
8
9
Notice under The Constitutional Questions Act, 2012, May 30, 2013 (AR, P 112).
Fiat of Rothery J., para 18 (AR, pOlO).
-6appointment of a national receiver. 10 Respecting the application on the merits, the chambers
judge concluded that there was no basis for the Court to exercise its discretion to appoint a
receiver under s 243(1) of the BfA as it was neither just nor convenient to do so.
15.
Lemare Lake then appealed to the Saskatchewan Court of Appeal, requesting that the fiat
of the chambers judge be set aside in its entirety. I I Lemare Lake continued to argue that the
impugned provisions of the SFSA were inoperative under the paramountcy doctrine, and that the
chambers judge had erred in not appointing a receiver. 3L Cattle, as respondent to that appeal,
contested the appeal on both the paramountcy issue and the merits, arguing that a receiver should
not be appointed in any event. The Attorney General again appeared on the constitutional issue,
relying on the reasoning of the chambers judge on the doctrine of federal paramountcy. In oral
argument, the Attorney General submitted that if the appeal could be decided on the statute, as
the chambers judge had done in dismissing the application for a receivership, then the Court
should not deal with the paramountcy issue.
16.
The Court of Appeal for Saskatchewan unanimously dismissed Lemare Lake's appeal.
Speaking for the Court, Chief Justice Richards first addressed the constitutional issue. He held
that there was no operational conflict between the SFSA and the BfA under the first branch of the
paramountcy doctrine. 12 However, he did find a conflict under the second branch of the
paramountcy test, namely that the impugned provisions of the SFSA frustrated the purpose of
s 243, and were therefore inoperable under the doctrine of federal paramountcy, " ... in
10
II
12
Ibid., para 24 (AR, p 014).
Notice of Appeal, September 9, 2013 (AR, pa 141) .
Reasons for judgment of the Court of Appeal, para 42 (AR, p. 042).
-7-
circumstances where an application is made to appoint a receiver pursuant to s 243(1) of the
BIA.,,\3
17.
Having reached that conclusion, Richards C.J.S. then turned to the merits of Lemare
Lake's application. He found that Lemare Lake had not met the test for a receivership to be
granted under s 243 and directed that Lemare Lake should proceed under foreclosure process. 14
18.
The Attorney General sought leave to appeal from this Court on June 1, 2014 pursuant to
s 40(1) of the Supreme Court Act, solely on the constitutional issue. In its Response to the
application, Lemare Lake advised the Court that it had begun foreclosure proceedings against
3L Cattle and submitted that this appeal was therefore moot. 15 Since the Attorney General was
not seeking to change the order of the Court of Appeal in a way that would affect 3L Cattle,
3L Cattle did not participate in the leave application.
19.
On September 11, 2014, counsel for Lemare Lake filed a letter with the Registrar
advising that the parties had reached a settlement of the underlying financial dispute, and
reiterated its position that this appeal is moot. The foreclosure process appears to have been
abandoned as part of that settlement. 16
20.
In reply, the Attorney General filed a letter submitting that the appeal is not moot,
because the constitutional operation of the impugned provisions of the SFSA continues to be a
live issue, with considerable significance for the Government of Saskatchewan. One of the
Ibid., para 67 (AR, P 052).
15 Response to Application for Leave to Appeal, paras 21 to 24.
16 Letter of Jeff Lee, Q.c. to the Registrar, September 11,2014 (AR, P 160). See also letter of Jeff Lee, Q.C. to the
Registrar, October 24, 2014, advising that his client no longer had any financial interest in the appeal (AR, p 161).
13
14
-8Province's major laws respecting farm security has been held inoperative in certain cases. This
appeal is likely the only chance the Attorney General will have to raise the issue in this Court.
21.
On September 25,2014, this Court granted leave to appeal. On November 21,2014, the
Chief Justice set the Constitutional Question.
17
Bye-mail dated October 31,2014, the
Registrar's office advised that the Court had directed the parties to address the mootness issue,
and had granted an extra five pages in the factums for that portion of the argument. 18
22.
By application to the Court dated February 25, 2015, counsel for the Respondent applied
to withdraw, as his client was no longer giving him instructions. By order of the Chief Justice
dated March 5, 2015, counsel for the Respondent was allowed to withdraw, and then was
appointed as amicus curiae to assist the Court, with reasonable fees and disbursements to be paid
by the Attorney General for Saskatchewan. 19
Order of the Chief Justice, November 21,2014 (AR, P 156).
E-mail fromFran~oisDesrosiers.ActingCaseAnalyst.October31.2014(AR.p 163)
19 Order of the Chief Justice, March 5, 2015 (AR, P 158).
17
18
-9PART II
ISSUES
23.
The main issue raised by this appeal is outlined in the Constitutional Question set by the
Chief Justice:
1.
Is Part II of The Saskatchewan Farm Security Act, S.S. 1988-1989, c. 17.1, in
whole or in part, constitutionally inoperative in respect of the appointment of a receiver
pursuant to s. 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, by
reason of the doctrine of federal paramountcy?
24.
The Attorney General submits that there is no conflict between the SFSA and the BIA,
and therefore the Constitutional Question should be answered in the negative. The Attorney
General also notes that there may be an issue concerning the scope of the issue raised by the
Constitutional Question, and submits that only the mediation and review provisions of Part II are
in issue on this appeal. There was no discussion in the courts below on whether there was a
paramountcy issue with respect to the other provisions of Part II. The Attorney General submits
that this Court should not consider these other provisions for the first time in this appeal.
25.
There is also the secondary issue, whether this appeal is moot, given the settlement of the
underlying financial and commercial dispute between the Respondent and 3L Cattle. The
Attorney General submits that the constitutional issue raised in this appeal is not moot, even
though the private parties have resolved their dispute. The constitutional issue is an ongoing
matter of significant concern to the Government of Saskatchewan and this appeal will likely be
the only opportunity for the Attorney General to raise the paramountcy issue before this Court.
- 10-
PART III
ARGUMENT
A.
The Legislative Framework
(1)
26.
Constitutional Basis for the SFSA and the BIA Provisions
This litigation has proceeded on the basis that both the SFSA and the BfA provisions are
intra vires the Legislature of Saskatchewan and the Parliament of Canada, respectively.2o The
sole constitutional issue has been the question of paramountcy. The Attorney General submits
that this Court should take the same approach, and will therefore only give a brief review of the
constitutional basis for the two sets of provisions under the division of powers.
27.
The SFSA in general, and Part II in particular, is authorised by provincial jurisdiction
over property and civil rights. 21 The SFSA deals with substantive and procedural rights in
relation to a particular type of property, farm land in Saskatchewan, and the contractual rights
and obligations of farmers and mortgagees. Part II defines rights and obligations for specific
types of contracts, such as mortgages and agreements for sale of farm land. 22 The impugned
provisions for mediation and review similarly relate to the rights and obligations of farmers and
mortgagees, and provide a mechanism to ensure that the parties to a dispute have explored all
possible settlement options prior to invoking their remedies in court. These provisions are
classic examples of provincial regulation of property and civil rights.
Fiat of Rothery J., para 14 CAR, p 009); Reasons for judgment of the Court of Appeal, para 29 CAR, p 037).
Constitution Act, 1867, s 92(13).
22 SFSA, s. 3: definitions of "action" and "agreement for sale" for the purposes of Part I\,
20
21
- 11 28.
The mediation and review processes are also supported by provincial jurisdiction over the
administration of justice in the courts, particularly "Procedure in civil matters in those courtS.,,23
The mediation and review provisions are the initial procedural steps which must be taken prior to
the commencement of court actions with respect to mortgages of farm land, and are consistent
with other initiatives to encourage parties to resolve disputes through negotiation prior to going
to court. For example, there is a similar mediation requirement in The Queen's Bench Act, 1998:
in almost all civil actions in the Queen's Bench, the parties are required to attend mediation
sessions upon the close of pleadings to encourage solution of the dispute before beginning the
. pre-tna
. 1 process. 24
extensIve
29.
The SFSA and the impugned provisions are also supported by provincial jurisdiction over
agriculture. 25 The Act only applies to farmers and farm land, and is designed to encourage and
maintain the family farm as a vibrant part of Saskatchewan's rural economy. 26 This type of
legislation is supportable under the general power to legislate with respect to agriculture.
30.
Nor is there any challenge to the constitutional validity of s 243(1) of the BfA. That
provision, and the related provisions in Part XI of the BfA, only apply when the debtor is
insolvent or in bankruptcy. Section 243(1) provides for the appointment of a receiver when the
debtor is insolvent or a bankrupt. The related provisions in Part XI regulate the conduct of
receivers of insolvent persons and bankrupts, whether appointed under s 243 or under provincial
law. If the debtor is not insolvent or bankrupt, a receiver cannot be appointed under s 243 and
the related provisions of Part XI do not apply. Since s 243(1) only applies if the debtor is
The Queen's Bench Act, 1998, SS 1998, c Q- \.0 1, Part VII: "Mediation."
25 Constitution Act, 1867, s 95.
26See the purpose clause for Part II, set out in s 4: "The purpose of this Part is to afford protection to farmers against
loss of their farm land."
23
24
- 12 insolvent or bankrupt, the provision is supported by federal jurisdiction over "Bankruptcy and
Insolvency.,,27
(2)
31.
Outline of the Mediation and Review Process under Part II of the SFSA
The mediation and review process in Part II was first enacted in 1984 by The Farm Land
Security Act. That Act was in response to a serious downturn in the agricultural economy, and
was originally intended as a short-term measure, to expire at the end of 1986. 28 The operation of
the Act was subsequently extended to the end of 1987. 29 In 1988, the Legislature made the
mediation and review process a permanent requirement, re-enacting it in Part II of the new SFSA ,
which repealed The Farm Land Security Act.3o
32.
The application of the mediation and review provisions of Part II of the SFSA are
determined by three definitions. First, there are the definitions of "farm land" and "farming",
found in s 2 of the Act. These definitions are foundational for the entire Act, as the application
of the Act is entirely based on the land being farm land, used for farming, which amongst other
characteristics, is defined as "tillage of the soil."
33.
Within Part II, there is a definition of "action", which is the threshold provision for the
mediation and review process. The relevant part of the definition for this appeal is s 3(a)(ii)):
3 (a) "action" means an action in court with respect to farm land by a mortgagee for:
(ii)
sale or possession of the mortgaged farm land;
The Farm Land Security Act, SS 1984-85-86, c F-8.0 1, ss 7-9.
29 The Farm Land Security Amendment Act, 1986, SS 1986-87-88, c 1.
30 SFSA, Part 11; s. 111(1).
27
28
- 13 -
34.
Sections 9 and 11 then set out the basic principles for the mediation and review process.
Most of s 9 deals with transition from the former legislation to the SFSA and continues previous
proceedings as if they had been instituted under the SFSA. The main operative provision is
s 9(1)(d):
9(1) Notwithstanding any other Act or law or any agreement entered into before,
on or after the coming into force of this Act:
(d) subject to sections 11 to 21, no person shall commence an action with respect
to farm land;
35.
Although s 9(1)( d) reads as a prohibition on actions with respect to farm land, it must be
read together with ss 11 and 12 of the SFSA. Section 11 provides that a mortgagee can apply to
the Queen's Bench for an order permitting the mortgagee to proceed with an action:
11(1) Where a mortgagee makes an application with respect to a mortgage on
farm land, the court may, on any terms and conditions that it considers just and
equitable:
(a) order that clause 9(1 )(d) or section 10 does not apply; or
(b) make an order for the purposes of clause 9( 1)(£).
(2) Where an order is made pursuant to subsection (1), the mortgagee may
commence or continue an action with respect to that mortgage.
(3) Any action that is commenced without an order pursuant to this section is a
nullity, and any order made with respect to an action or a proposed action without an
order pursuant to this section is void.
36.
Section 12 in tum sets out the conditions which the mortgagee must fulfill in order to
bring an application under s 11, namely the mediation and review process. The mortgagee must
give the farmer and the Farm Land Security Board 3l a notice of intent to bring an application
under s 11 to begin an action (s 12(1)). That notice triggers the review and mediation process
(s 12(2)). The mediation and review process is conducted under the supervision and mediation
31 The Board is constituted by ss 5 through 8 of the SFSA. Its function is facilitative only. It does not have any
power to affect the contractual rights of the parties.
- 14 assistance of the Board (s 12(3),(4),(5)). At the end of that process, which must take at least 150
days (s 12(1)), the Board prepares a report which it submits to the Queen's Bench for that court
to consider as part of the mortgagee's application to begin an action. The Queen's Bench then
decides whether to grant or dismiss the mortgagee's application to begin the action to enforce its
security. In determining the application, the Queen's Bench must consider the statutory
presumptions in favour of the farmer, set out in s 13, which are rebuttable by the mortgagee.
Section 19 provides that the court is to dismiss the application" ... if the court is satisfied that it
is not just and equitable according to the purpose and spirit of this Act to make the order."
37.
The overall effect of ss 9 and 11, as well as the related provisions of Part II (ss 10, 12 to
22) is thus that before beginning an action in the Queen's Bench, the mortgagee must give notice
and must participate in the mediation and review process. Once that process is completed, the
Board prepares its report and the mortgagee can make its application to the Queen's Bench to
begin proceedings. If the Queen's Bench grants the application, the mortgagee begins its action
on the mortgage.
38.
This case has been argued throughout on the basis that an application for a receiver under
s. 243 of the BfA is an "action" as defined by s 3(a)(ii) of the SFSA, since the receiver would
obtain the possession of the farm land, with the possibility of a sale of the land. On that basis,
the applicant for a receivership therefore must first serve notice under the SFSA and go through
the mediation and review process under Part II. It is this possibility which is alleged in this case
to raise a conflict with the BIA. 32
32
SFSA, s 3(a)(ii); Reasons for Judgment of the Court of Appeal, para 28 (AR, P 037).
- 15 (3)
39.
Other Provisions of Part II Are Not in Issue in this Appeal
One final point to consider in relation to this summary is that Part II contains several
other provisions which do not relate to the mediation and review process, and were not in issue
in the courts below. Those provisions are summarised in Appendix A to this Factum.
40.
None of these provisions relate to the issue of a receiver being appointed under s 243, nor
to the mediation and review process triggered by ss 9 and 11, and none of them were mentioned
in the Notice of Constitutional Question filed by counsel for Lemare Lake in the Queen's
Bench. 33 Nor was there any suggestion in either of the courts below that these provisions were
included in the paramountcy analysis. Both courts below only considered only ss 9 and 11, and
the additional provisions of Part II which directly relate to ss 9 and 11. There was no
consideration of the other provisions of Part II.
4l.
The restricted scope of the proceedings in the courts below is indicated in their reasons
for judgment. Rothery J. in the Queen's Bench and Richards C.J.S. in the Court of Appeal both
specifically identified the "relevant provisions" of Part II which were in issue. It is clear that
both courts restricted their constitutional analysis to the mediation and review process based on
ss 9 and 1l. 34 Neither Court considered the interplay between all of Part II and s 243 of the BfA.
To the extent that the judgment of the Court of Appeal refers to Part II being inoperative, the
Attorney General submits that was simply a shorthand way to refer to the mediation and review
provisions which were in issue.
Notice of Constitutional Question, Sask. QB CAR, p 112).
Fiat of Rothery 1., paras. 9,10 CAR, p 005-006); Reasons for Judgment of the Court of Appeal, para. 28 and
Appendix A CAR, pp 037, 075-080).
33
34
- 16 42.
Thus, in answering the Constitutional Question, the Attorney General submits that only
ss 9 to 22 are in issue in this appeal, and not the rest of Part II. The paramountcy issue is related
entirely to the interplay between the mediation and review process and the receivership power
under s 243. As the Question asks whether Part II is inoperative, "in whole or in part", the
Attorney General submits that the provisions of Part II which do not relate to the mediation and
review process are not in conflict with s 243 and are operative.
(4) Outline of the Receivership Provision Under Part XI of the BIA
43.
In considering the paramountcy issue in this appeal, it is important to remember what this
case is not about: it is not about bankruptcy and the priorities of distribution of a bankrupt's
estate to unsecured creditors, set out in s 136 of the BfA. Rather, this appeal considers the ability
of a secured creditor to apply for a receivership order under s 243 of the BfA, based simply on
the insolvency of the debtor. There is no need for the insolvent debtor to be in bankruptcy, either
voluntarily or by petition, although a secured creditor can also apply for a receivership order
against a bankrupt under s 243. Nor is the estate of the insolvent person subject to administration
by a trustee. For the purposes of this appeal, all that is necessary to trigger s 243 is that the
debtor be insolvent. 35
44.
The numerous paramountcy cases from this Court on the relationship between priorities
under s 136 of the BfA and provincia1laws creating rights for creditors against a debtor therefore
have limited application to this appeal. This is not a case like Husky Oil Operations Ltd. v.
Minister a/National Revenue, and the related cases considered by the Court in that case.
36
Nor
does this appeal raise any issue about the effect of a discharge from bankruptcy under s 178(2) of
35
36
Husky Oil Operations Ltd. v. Minister o/National Revenue, [1995] 3 SCR 453.
- 17 the BfA and the interplay with provisions of provincial law dealing with the withholding of
licences, which this Court is currently considering in two cases under reserve.3? Rather, this case
deals solely with the interplay between the provision for a receiver under s 243(1) of the BfA,
and the review and mediation provisions triggered by ss 9 and 11 of the SFSA.
45.
Prior to 1992, the BfA only had a provision for the appointment of an interim receiver,
under s 46. It did not have provisions allowing for a receivership for insolvent individuals
generally. That changed with the enactment of Part XI of the BfA, which Parliament added in
1992 as part of a general overhaul of the Act. Section 243(1) allows a secured creditor to apply
for the appointment of a receiver of the property of an insolvent or a bankrupt. The court is
authorised to appoint a receiver if it is "just or convenient to do so." It can appoint a receiver,
authorise the receiver to take control over the insolvent's business, and to take any other action
that the court considers advisable.
46.
One of the significant aspects of Part XI, which the Attorney General submits is highly
relevant to the paramountcy analysis, is that Part XI does not establish a system of exclusive
federal jurisdiction to appoint receivers for insolvents under the BfA. Section 243(2)(b )(ii)
expressly recognizes that a receiver for an insolvent person can be appointed under the terms of a
security agreement, or under another federal Act, or under a provincial Act. In Saskatchewan,
the Queen's Bench has authority to appoint a receiver under The Queen 's Bench Act, 1998, if it
is appropriate or convenient to do
SO.38
407 ETR Concession Company Limited v. Superintendent of Bankruptcy, see 35696 and Alberta v. Moloney,
appeals heard and reserved January 15,2015.
38 The Queen's Bench Act, 1998, s 65.
37
see 35820;
- 18 47.
As well, by the combined effect of s 243(1.1) and s 244(4), if a receiver has already been
appointed under some other provision, such as provincial law, a receiver cannot be appointed
under s 243 for the property of an insolvent. Section 243(1.1) provides that a secured creditor
who seeks the appointment of a receiver for the property of an insolvent person must give
advance notice under s 244. However, s 244(4) provides that s 244 does not apply where there
already is a receiver in respect of an insolvent person. Thus, if a receiver has already been
appointed under provincial law, such as The Queen's Bench Act, 1998, the federal law cannot
supersede that appointment.
48.
Rather than establish an exclusive federal system for receivers in relation to insolvents,
Part XI of the BfA provides a set of standards for receivers of an insolvent, regardless of the
manner of appointment. This regulatory scheme flows from the definition of receiver in s
243(2), which includes all receivers of an insolvent, not just those appointed under s 243(1). Part
XI thus regulates receivers of an insolvent appointed under provincial law. Almost all of this
regulatory framework applies to receivers of insolvents appointed under provincial law, with one
exception. 39
49.
Part XI thus regulates the conduct of receivers of an insolvent, regardless of the source of
their appointment. For example, receivers must be trustees. 40 Following their appointment, they
must give notice to the Superintendent, to the insolvent person, and all creditors. 41 Receivers
must prepare and file a statement of the property and prepare interim and final reports.
42
39 By the combined effect of s 243(3) and s 248(2), the Superintendent cannot apply to court for an order compelling
a receiver appointed under provincial law to render a statement of account and adjust the receiver's fees and charges.
40 BfA, s 243(4).
41 BfA, s 245.
42 BfA, s 246
- 19 Receivers must act in good faith.43 They are subject to the direction of the court44 and can apply
to the court for directions.
50.
45
Receivers who act in good faith are immune from civil actions. 46
If Part XI recognizes the ongoing power to appoint receivers under provincial law for an
insolvent, what then is the reason for the power to appoint a receiver under the BfA? The
Attorney General submits that Part XI has two purposes:
(a) Part XI provides for the appointment of a single receiver with authority to act
throughout the country, rather than requiring a creditor to apply for a receiver in
each province; and
(b) Part XI provides a uniform set of standards for all receivers of an insolvent,
regardless of the authority for the appointment. The same rules apply whether the
receiver is appointed under the BfA, another federal statute, a provincial law, or the
contract for the security.
51.
This interpretation of the purpose of a receiver under the BfA is supported by one of the
leading authorities on the Bankruptcy and fnsolvency Act:
Section 243 grants authority to the court, defined in s. 2 to include ajudge exercising
jurisdiction under the BfA, to appoint a receiver with the power to act nationally, thereby
eliminating the need to apply to the courts in multiple jurisdictions for the appointment of
a receiver. The national receiver under the BfA is entitled to act across the country,
increasing efficiency by removing the need to have a receiver appointed in each
jurisdiction in which the debtor's assets are located. Creditors are still entitled to have a
provincially appointed receiver act on their behalf under the Act. The subsection was
further amended by froviding specific powers that may be exercised by the court4
appointed receiver.
52.
There are two other aspects of the BfA which must be considered. First, as mentioned
earlier, s 243( 1.1) provides that notice of intent to apply for a receivership must be given under
s 244. The court hearing that application cannot normally do so unless at least ten days have
BIA, s 247.
BIA, S 248
45 BIA, S 248.
~6 BIA, S 251.
47 Houlden, Morowetz and Sarra, The 2014-2015 Annotated Bankruptcy and Insolvency Act, para L§2.
43
44
- 20 -
elapsed. The Attorney General notes that this is simply a minimum period. The provision does
not impose an end date by which the court must hear the application. This point received some
discussion in the courts below.
53.
Second, the BfA provides a special immunity for farmers. Section 48 provides that
individuals whose principal occupation and means of livelihood is "fishing, farming or the tillage
of the soil" cannot be petitioned into bankruptcy, nor can an interim receiver be appointed
against a farmer or tiller of the soil under s 46 of the BfA. These are significant provisions.
First, the language of "farming or the tillage of the soil" is echoed by the definition of "farming"
set out in s 2( 1)(g) of the SFSA. This similarity of language is an indication that the two Acts
should be interpreted harmoniously, if at all possible. Second, the fact that an interim receiver
cannot be appointed against a farmer under s 46 of the BfA is a further indication that Parliament
has recognised that farmers are a special case. That in turn affects the proper interpretation to
give to the appointment of a receiver under s 243.
(5)
54.
Court-Ordered Receiverships are Always Discretionary
One final point to consider about the underlying provisions of the BfA is that court-
ordered receiverships are now always discretionary. At one time, the approach in the courts was
that receiverships were granted almost as a matter of course, but this attitude has been gradually
changing. Because a receivership has such a final effect on the debtor and its business, the
courts increasingly have been emphasising that receiverships are discretionary in nature, which
fits with the requirement that a court should only grant a receivership under s 243 if it is "just or
convenient. "
- 21 -
55.
For instance, the Alberta Court of Appeal in BG International Limited v. Canadian
Superior Energy Inc. held that "the appointment of a receiver is a remedy that should be not
lightly granted" and the judge should "carefully explore whether there are other remedies, short
of a receivership, that could serve to protect the interests of the applicant." The Court also found
that in particular, the chambers judge must "carefully balance the rights of both the applicant and
the respondent" as the mere appointment of a receiver can have devastating effects. 48
56.
Similarly, the Ontario Superior Court in Callidus Capital Corp. v. Carcap Inc., 2012
ONSC 163 held that in considering a receivership application under s 101 of the Courts of
Justice Act of Ontario and s 47 (interim receiver) of the BIA, the Court must consider all of the
circumstances of the case. A receivership is an "extraordinary" remedy and should not be
granted lightly. 49
57.
One of the leading recent cases on this trend in the case law is Textron Financial Canada
Limited v. Chetwynd Motels Ltd.. The Court concluded at para. 55:
55 In light of these authorities, I conclude that the statutory requirement that the
appointment of a receiver be just and convenient does not permit or require me to begin
my assessment of the material with the presumption that the plaintiff is entitled to a
court-appointed receiver unless the defendant can demonstrate a compelling commercial
or other reason why the order should not be made. Of the considered judgments on the
issue from this Court, I prefer the approach taken by Masuhara J. in Maple Trade
Finance. That approach permits the court, when it is appropriate to do so, to place
considerable weight upon the fact that the creditor has the right to instrument-appoint a
receiver. It also permits the court to engage in that analysis described by Taylor J. in Cal
Glass when considering whether the applicant has established that it is appropriate and
necessary for the court to lend its aid to a party who may appoint a receiver without a
court order. 50
BG International Limitedv. Canadian Superior Energy Inc., 2009 ABCA 127, para. 16
Callidus Capital Corp. v. Carcap Inc., 2012 ONSC 163, paras 41-43. See also Bank of Montreal v. Carnival
National Leasing Ltd., 2011 ONSC 1007, para 24, holding that the tests for receivership under s 243 and silO of
the Ontario Courts ofJustice Act are very similar.
50 Textron Financial Canada Limitedv. Chetwynd Motels Ltd., 2010 BCSC 477, para 55.
48
49
- 22 58.
The judgments of the courts below in this case also demonstrate the discretionary nature
of a receivership application. Both the Queen's Bench and the Court of Appeal concluded that
Lemare Lake had not made out the case for the appointment of a receiver. That highly
discretionary nature of the receivership application bears considerable significance for the
paramountcy analysis.
(6)
59.
The Federal Farm Debt Mediation Act
One final piece of federal legislation to consider is the federal Farm Debt Mediation Act.
This Act, similar to the mediation and review provisions of the SFSA, provides that an insolvent
farmer can obtain a stay of all legal proceedings by creditors, to give the time for mediation and
review of the farmer's financial affairs. 51 While that stay is in place, no creditor of the farmer
may enforce any proceedings to realise on a security. That stay would apply to an application for
a receiver under s 243. These provisions were not raised by the farmer, 3L Cattle, in this case,
but the Attorney General submits that they are relevant to the question whether the mediation
and review provisions of the SFSA can be said to frustrate the purpose of s 243.
60.
As will be argued at more length below, the Attorney General submits that if an
application for a receivership against a farmer under s 243 can be stayed under federal law to
allow for mediation and review of the farmer's financial affairs, the purpose of s 243 must be
read as subject to that possibility. The similar mediation and review provisions under the SFSA
therefore do not frustrate the purpose of s 243. The purpose of s 243 cannot be said change
whether the delay for mediation and review is under federal law or provincial law.
51
Farm Debt Mediation Act, SC 1997, c 21, ss 5-12.
- 23 B.
The Paramountcy Issue
(1)
61.
Outline of the Paramountcy Doctrine
This Court has considered the paramountcy doctrine in several recent cases. The general
principle of the test is straight-forward: if a federal and a provincial statute conflict, the federal
statute is paramount and the provincial statute is inoperative, to the extent of that conflict.
62.
While the general principle is easily stated, the issue is what types of conflict between
federal and provincial laws will be sufficient to trigger the paramountcy doctrine and render the
provincial law inoperative. This question can have serious implications for the balance of
powers between the federal and provincial governments in our constitutional structure. If the test
for a conflict to exist is too easily met, the result will be in favour of expansive federal powers.
If it is too strict a test, the legislative goals of the federal government, acting for the nation as a
whole, will be too easily stifled by provincial initiatives.
63 .
The approach taken by this Court has been one of restraint, establishing strict standards
before a federal law can be found to render a provincial law inoperative. For example, in
Multiple Access Ltd. v McCutcheon, Dickson J. (as he then was) referred approvingly to the
approach taken by the chambers judge in that case, in his summary of the chambers judge's
decision:
No doubt there will be instances where the national and provincial schemes overlap.
Where this occurs the preservation of the integrity of the provincial scheme should be of
prime importance, in the absence of a contrary expression by Parliament, in harmony
with the general rule that a law should not be held invalid or inoperative unless that result
. unavol·da bl e. 52
IS
52
Multiple Access Ltd. v. McCutcheon, [1982] 2 SCR 161, P 170.
- 2464.
Similarly, Professor Hogg has commented on the restrained nature of the paramountcy
test:
When are two laws deemed to be inconsistent (or conflicting) so as to attract the doctrine
of paramountcy? The question has profound implications for the scope of judicial review
and for the balance of power in the federal system. Given the overriding force of federal
law, a wide definition of inconsistency will result in the defeat of provincial laws in
"fields" which are "covered" by federal law; a narrow definition, on the other hand, will
allow provincial laws to survive so long as they do not "expressly contradict" federal law.
The wide definition is the course of judicial activism in favour of the central power; the
narrow definition is the course of judicial restraint, leaving all but the irreconcilable
conflicts to be resolved in the political arena. We shall see that Canadian courts have
followed the course of restraint. 53
65.
It is now well-established that there are two branches to the paramountcy test:
operational conflict and frustration of the federal purpose. Chief Justice McLachlin summarised
the test in this Court's recent decision in Quebec (Attorney General) v. Canadian Owners and
Pilot Association:
Claims in paramountcy may arise from two different forms of conflict. The first is
operational conflict between federal and provincial laws, where one enactment says "yes"
and the other says "no", such that "compliance with one is defiance of the other":
Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161 (S.C.C.), at p. 191, per
Dicksonl InBankofMontrealv. Hall, [1990] 1 S.C.R.121 (S.C.C.),atp.155,
La Forest J. identified a second branch of paramountcy, in which dual compliance is
possible, but the provincial law is incompatible with the purpose of federal legislation:
see also Law Society (British Columbia) v. Mangat, 2001 SCC 67, [2001] 3 S.C.R. 113
(S.C.C.), at para. 72; Burrardview, at para. 84. Federal paramountcy may thus arise from
either the impossibility of dual compliance or the frustration of a federal purpose:
Rothmans, at para. 14.54
66.
The Attorney General takes the position that considerable caution must be taken when
using the test for frustration of the federal purpose. Unlike the test for operational conflict,
which is very objective and asks about the exact interplay between the two statutes, the test for
frustration of the federal purpose carries a much more subjective element, which in the long run
53
54
Hogg, Constitutional Law a/Canada, 5th ed supplemented, para 16.2.
COPA, para 64.
- 25 will unduly favour the federal government. As Professor Hogg has commented, the trend in this
Court's case-law has been in favour of judicial restraint in the area of paramountcy. An
expansive definition of the "frustration of the federal purpose" approach could well undercut that
general trend.
67.
The concerns about the potentially broad-ranging nature of the frustration test appear to
have led this Court to emphasise in its recent cases that the frustration test is to be applied with
caution. The Court summarised its cases on this point in Marine Services v. Ryan Estate:
The second form of conflict is when the provincial law frustrates the purpose of the
federal law: Bank of Montreal; Law Society of British Columbia v. Mangat, 2001 SCC
67, [2001] 3 S.C.R. 113; Rothmans, Benson & Hedges Inc.; Canadian Western Bank, at
para. 73. The "fact that Parliament has legislated in respect of a matter does not lead to
the presumption that in so doing it intended to rule out any possible provincial action in
respect of that subject": Canadian Western Bank, at para. 74. Courts must not forget the
fundamental rule of constitutional interpretation: " ... [w]hen a federal statute can be
properly interpreted so as not to interfere with a provincial statute, such an interpretation
is to be applied in preference to another applicable construction which would bring about
a conflict between the two statutes": Canadian Western Bank, at para. 75, citing Attorney
General of Canada v. Law Society of British Columbia, [1982] 2 S.C.R. 307, at p. 356.
The "standard for invalidating provincial legislation on the basis of frustration of federal
purpose is high; permissive federal legislation, without more, will not establish that a
federal purpose is frustrated when provincial legislation restricts the scope of the federal
permission": COPA, at para. 66. 55
68.
The Attorney General submits that all three of these cautions apply to this case, as will be
developed at greater length below. First, Parliament has not attempted to exclude provincial
legislation in this area; to the contrary, it has recognised the continued application of provincial
legislation with respect to receivers, and has in fact deferred when a receiver is appointed under
provincial law. Second, this is an area where the federal law, more perhaps than in any other
area, must be interpreted in a manner that dovetails with provincial law, given the considerable
overlap and interplay between federal bankruptcy and insolvency legislation and provincial laws
55
Ryan Estate, para 69.
- 26 -
regulating commercial transactions, such as debt and mortgages. Third, the discretionary nature
of the receivership provision, both in the fact that it is not exclusive to the federal law, and that
the law confers considerable discretion on the court, points to there not being a conflict between
the federal and provincial law.
(2)
First Branch: There is No Operational Conflict Between the Mediation and
Review Provisions and Section 243
69.
Both of the courts below found that there was no operational conflict between the
mediation and review provisions under the SFSA and the receivership provision under s 243 of
the BfA. The Attorney General submits that the conclusions of the two courts below on this
point are correct and should be endorsed by this Court.
70.
The test for operational conflict was established by Dickson 1., as he then was, speaking
for the majority in Multiple Access Ltd:
In principle, there would seem to be no good reasons to speak of paramountcy and
preclusion except where there is actual conflict in operation as where one enactment says
"yes" and the other says "no"; "the same citizens are being told to do inconsistent
things"; compliance with one is defiance of the other. 56
71.
The Attorney General submits that the chambers judge correctly observed that a secured
creditor is not required to make an application to appoint a receiver under s 243(1) of the BfA.
As outlined above, Parliament has not created a system of exclusive federal receivership law for
insolvents. The federal legislation as characterized by Rothery 1. is "permissive legislation." If
the secured creditor elects to make such an application, the secured creditor is not in a position of
operational conflict stemming from the discretionary remedy available under s 243(1) of the BfA.
56
Multiple Access Ltd. v. McCutcheon, p 191.
- 27 Once the secured creditor obtains the order of the court under the mediation and review
provisions, it can apply under s 243 of the BfA. 57
72.
Chief Justice Richards reached a similar conclusion in his reasons for the Court of
Appeal. His analysis of the issue of operational conflict is succinct:
Here, s. 243(1) ofthe BfA says a court "may" appoint a receiver, not that it "shall" or
"must" do so. It follows, in my view, that there is no operational conflict (in the required
sense) between s. 243(1) ofthe BfA and Part II of the SFSA. It is possible to comply with
both statutes by obtaining an order pursuant to the SFSA before asking to have a receiver
appointed under the BfA. Similarly, it is possible for a court to ensure compliance with
both statutes by declining to entertain an application under s. 243(1) until an order has
been obtained under the SFSA. 58
73.
The Attorney General submits that the analysis in both these rulings is correct. A
mortgagee of farm land can comply with both the SFSA and the BfA by first applying under the
mediation and review provisions ofthe SFSA. Once an order is obtained under that process, the
mortgagee can makes its application under s 243.
74.
Part II of the SFSA is not rendered inoperative by s 243(1) of the BfA. A mortgagee is
required to comply with the SFSA statutory notice provisions prior to realizing on its security. In
the words of Rothery J., employing the first branch ofthe paramountcy test as delineated by the
Supreme Court of Canada in COPA, "compliance with the SFSA is not in defiance of [the] BfA"
as it is possible for the mortgagee to comply with the provincial legislation, by first obtaining the
court order under s 11(1) of the SFSA, and then to apply for the appointment of a receiver
pursuant to s 243(1) of the BfA.
57
58
Fiat of Rothery J., para 18 (AR, pOlO).
- 28 -
75.
As well, as Richards C.J.S. notes, there is no right to a receivership under s 243. The BfA
gives the court the power to grant the order, but it is entirely discretionary in the court, based on
the facts before it. As the cases cited earlier demonstrate, the trend in relation to receivers is
increasingly to focus on the discretionary nature of the order, moving away from the older view
that there was a presumption in favour of the receivership being granted.
76.
It is also significant that the applications under s 11(1) of the SFSA and s 243 of the BfA
are made to the same court, the Queen' s Bench, and the test to be used by that court is very
similar under both statutes. Under s 11 (1), the court may grant the application to bring an action
on any terms that are "just and equitable." Under s 243, the court may grant the receivership if it
is "just or convenient" to do so.
77.
It is also worth consideration that one of the goals of the mediation and review process
under the SFSA is to produce a detailed report on the farmer's financial situation, prepared by a
neutral third party, the Board. That report will be useful for the court on both the application
under s 11(1), and the application under s 243 of the BfA. The requirement for a report supports
the legislative purpose of both provisions: to allow the court to make the decision with the
fullest possible information, and able to take into account the interests of both the farmer and the
mortgagee.
78.
For all these reasons, the Attorney General submits that there is no operational conflict
between the mediation and review provisions and s 243 of the BfA.
- 29 (3)
Second Branch: The Mediation and Review Provisions Do Not Frustrate the
Federal Purpose
(a)
79.
Restrained Approach to Frustration of the Federal Purpose
The two courts below diverged on the issue of frustration of the federal purpose.
Rothery J. in the Queen's Bench found that the mediation and review provisions did not frustrate
the purpose of s 243. Richards c.J.S. for the Court of Appeal found that there was frustration,
triggering the doctrine of federal paramountcy. The Attorney General respectfully submits that
there is no frustration of the federal purpose, and will begin by reviewing the leading cases from
this Court on this issue.
80.
The Court gave its ruling in Multiple Access in 1982. That case clearly established that
an operational conflict only arose where there was impossibility of dual compliance. However,
eight years later, the Court gave its decision in Bank of Montreal v Hall, which was the
beginning of the second branch of the paramountcy test. In that case, the Court concluded that a
provincial law could also trigger the paramountcy doctrine if it frustrated the purpose of the
federal law. 59
81.
Bank of Montreal also arose in Saskatchewan. The issue concerned procedural
requirements of The Limitation of Civil Rights Act, which required a creditor who held security
in chattels to apply to court for an order to seize the chattels. This Court concluded that those
procedural requirements frustrated the purpose of Bank Act security, which was designed to
allow a bank to take a chattel upon default, without going to court.
59
Bank of Montreal v Hall, [1990] I SCR 121, at 154.
- 30 82.
Following Bank of Montreal, this Court considered the frustration of the federal purpose
test in three subsequent cases: Mangat v. Law Society of British Columbia;6o Rothmans, Benson
and Hedges Ltd. v Saskatchewan;61 and Alberta v Canadian Western Bank. The Attorney
General submits that the net effect of those cases, particularly Canadian Western Bank, was to
narrow the scope of the test for frustration of the federal purpose.
83.
This cautious approach to the frustration of purpose test was set out most clearly in
Canadian Western Bank. Speaking for the majority, Binnie and LeBel JJ warned that "care must
be taken not give too broad a scope to Hall". They also emphasised that, "the fact that
Parliament has legislated in respect of a matter does not lead to the presumption that in so doing
it intended to rule out any possible provincial action in respect of that subject.,,62
84.
Binnie and LeBel lJ. also re-affirmed a fundamental rule of constitutional interpretation
under the paramountcy doctrine, from an earlier case:
An incompatible federal legislative intent must be established by the party relying on it,
and the courts must never lose sight of the fundamental rule of constitutional
interpretation that, "[w]hen a federal statute can be properly interpreted so as not to
interfere with a provincial statute, such an interpretation is to be applied in preference to
another applicable construction which would bring about a conflict between the two
statutes" (Attorney General of Canada v. Law Society of British Columbia, at p. 356).63
85.
More recently, in COPA, this Court re-affirmed that the "standard for invalidating
provincial legislation on the basis of frustration of federal purpose is high," as well as
highlighting the significance that discretionary federal legislation has in the frustration of
purpose test. Speaking for the majority, McLachlin C.l.C. held that a provincial zoning law that
60
61
62
63
Mangat v Law Society of British Columbia, 2001 SCC 67, [2001] 3 SCR 113.
Rothmans, Benson & Hedges Inc. v Saskatchewan, [2005] SCC 13, [2005] 1 SCR 188.
Canadian Western Bank v Alberta, 2007 SCC 22, [2007] 2 SCR 3, para 74.
Ibid., para 75 .
- 31 -
required restricted certain tracts of land for agricultural purposes did not frustrate the purpose of
the federal Aeronautics Act. That was because the location of a private aerodrome was not
dictated by the federal legislation, which rather permitted a private citizen to create an aerodrome
without seeking permission from the federal government. The discretionary nature of the federal
legislation was key to that ruling: " ... permissive federal legislation, without more, will not
establish that a federal purpose is frustrated when provincial legislation restricts the scope of the
federal permission. ,,64
86.
The Court did find that a provincial provision was inoperative in the case of Quebec
(Attorney General) v. Canada (Human Resources and Social Development). At issue in that case
was whether a federal provision to claw-back over-payments of employment insurance payments
was frustrated by a provincial law which barred such over-payments. The Court found that there
was a conflict. The approach taken by the two statutes were simply not consistent and could not
be reconciled. 65
87.
Finally, in Marine Services International v Ryan Estate, this Court again found that the
high standard for applying paramountcy on the basis of the frustration of a federal purpose was
not met. The paramountcy question at stake in Ryan Estate was whether s 44 of the Workplace
Health, Safety and Compensation Act of Newfoundland and Labrador was constitutionally
inoperative in respect of federal maritime negligence claims made pursuant to s 6 of the Marine
Liability Act.
COPA, para 66.
Quebec (Attorney General)
635, para 36.
64
65
v.
Canada (Human Resources and Social Developmetn), 20 II SCC 60, [20 II] 3 SCR
- 32 88.
In the unanimous decision, LeBel and Karakatsanis 11. held that s 44 was indeed and
operative as the provincial legislation "simply provides a different regime for compensation"
that did not frustrate the federal purpose. Significantly, the high standard for frustration of the
federal purpose was not met as the language in s 6 of the federal Marine Liability Act was
"permissive", in that "a dependent 'may' bring an action."
89.
LeBel and Karakatsanis 11 held that the two statutes could "operate side by side without
conflict" as s 6(2) of the MLA "[made] room" for the operation of the provincial workers'
compensation scheme. One of the factors they was that the federal government ran a similar nofault insurance system for some federal employees, including those engaged in maritime
activities. It would have been a difficult result if there were different outcomes on the issue of
the application of no-fault workers compensation, when it was clearly the policy of the federal
government to have a no-fault system for its employees, consistent with the Marine Liability Act.
This approach was consistent with the principle that courts should strive to interpret a federal
provision in a way that avoided a conflict with the provincial law, if at all possible. 66
(b)
Section 243 is Not a Complete Code and Must Be Interpreted
Consistently with Provincial Law
90.
The Attorney General submits that there is no frustration of the federal provision, based
on these more recent cases from this Court. First of all, there is the principle of interpretation
which requires the choice of an interpretation which avoids a conflict. Here, we have a federal
statute which on its face recognises that provincial receivership provisions can continue to apply
to the case of insolvent debtors. More than that, the way that s 243 and s 244 are structured
66
Marine Services International Ltd. v. Ryan Estate, 2013 SCC 44, [2013] 3 SCR 53, paras 75-76.
- 33 indicates that the federal provision will defer to the provincial provision, if there has already
been a receiver appointed under provincial law. This is a strong indication that the federal
provision is not a complete code, unlike the situation of the Bank Act security in Bank of
Montreal. Speaking for the Court in that case, La Forest emphasised this point: "I can only
conclude that it was Parliament's manifest legislative purpose that the sole realization scheme
applicable to the s. 178 security interest be that contained in the Bank Act itself.,,67 However, as
outlined above, that is not the case here. Section 243 recognises that receiverships of farm
property under provincial law continue to be available.
91.
Closely linked to this statutory interpretation point is that the BfA, more than most federal
statutes, needs to fit together with the provincial law, since there is considerable overlap between
federal and provincial law in this area. That specific nature of bankruptcy legislation is another
indication that s 243 should be interpreted in a manner consistent with the provincial law, rather
than in a way which creates the possibility of conflict.
92.
In particular, once it is recognised that the federal law does not oust provincial law, and
in some situations will defer to the provincial law, the need for a uniform interpretation of the
federal law becomes very strong. If both federal and provincial receivership laws can operate
with respect to insolvent individuals, then as a matter of federal policy and interpretative
principles, there should not be major differences in the procedure by which the remedy of a
receiver can be sought under either law. Parliament in creating a system that recognizes
provincial laws continue to apply should also be taken to have accepted that provincial
procedural requirements should apply uniformly to both types of receivership applications.
67
Bank ofMontreal v Hall, p 154.
- 34 Otherwise, if there were not unifonnity, there would be frustration of the federal purpose that
there were to be two alternative mechanisms to obtain a receiver, both equally available to a
secured creditor.
93.
This point is also supported by the fact that federal law and provincial law both recognise
that fanners are a special case, when it comes to their rights and obligations with respect to
creditors. As mentioned earlier, s 48 ofthe BfA provides that a fanner cannot be petitioned into
bankruptcy, and also provides that a creditor cannot obtain an interim receiver against a fanner
under s 46 of the BfA.
(c)
Delays for Mediation and Review Are Consistent with the Purpose of
Section 243
94.
As well, there is the major fact that the receivership provisions under s. 243 are subject,
in the case of an insolvent fanner, to be stayed under the federal Farm Debt Mediation Act, to
allow for mediation and review of the fanner's financial position. Parliament has evidently
concluded that the special case of fanners warrants special protections, and has subordinated
s 243 to the power to obtain a stay of proceedings for mediation and review.
95.
The significance of this point is that the purpose of s 243 cannot be taken to mean an
automatic right to proceed with the receivership application once the 10 day notice period has
expired. By the tenns of the Farm Debt Mediation Act, that application can be postponed to
allow for mediation and review of the fanner's financial position. The purpose of s 243 must be
read in light of that other federal statute.
- 35 -
96.
However, once it is accepted that s 243 is subordinate to delays to allow for mediation
and review of the farmer's financial situation under federal law, it is not possible to argue that
the purpose of s 243 is frustrated by delays for mediation and review under provincial law. The
purpose of s 243 cannot be said to be subject to mediation and review under federal law, but not
subject to a very similar mediation and review process under provincial law. The purpose of a
legislative provision cannot shift in that way, absent a very clear statement by Parliament that it
intends to create a complete code of federal law in the subject. The Attorney General submits
that Parliament has, to the contrary, not created a complete code of federal law here, and has
actually recognised the ongoing role for provincial law in this area. The purpose of s 243
therefore does not shift, and is not frustrated by delays for mediation and review, whether under
federal law or provincial law. The similarity in approach between federal and provincial law in
this case indicates that this Court's decision in M & D Farms Ltd v. Manitoba Agricultural
Credit Corp. does not apply here. In that case, federal law provided for delays for mediation and
review, while provincial law authorised matters to proceed. Here, federal and provincial law
both provide for delays for mediation and review, and the purpose of s 243 must be read as
subject to those potential delays.
97.
This analysis is supported by this Court's decision in Ryan Estate. In that case, there
were two no-fault legislative regimes, one under federal law and one under provincial law. The
no-fault system under the federal law was consistent with the federal Marine Liability Act. It
was therefore not possible to argue that the provincial no-fault system frustrated the purpose of
the Marine Liability Act. The same analysis applies here: once it is apparent that s 243 is subject
to delays for mediation and review, it cannot be said that the purpose of s 243 is frustrated by
delays for mediation and review under provincial law, but not under federal law.
- 36 -
98.
The Attorney General recognises that the delay period under the federal Farm Debt
Mediation Act is not as long as under the SFSA. However, in determining whether the purpose
of s 243 is frustrated by delays, it is the general principle that governs: delays for mediation and
review cannot be said to frustrate the purpose of s 243, whether under federal or provincial law.
While delays may frustrate the creditor, they do not frustrate the purpose of s 243.
(d)
99.
Section 243 is Discretionary
There is also the discretionary nature of the federal provision, which this Court has
consistently identified as being a factor which counts strongly against a finding that a provincial
law frustrates the purpose of the federal law. Here, the federal provision is discretionary in two
significant ways. First, there is no requirement that a secured creditor apply under s 243.
Part XI of the BfA recognises that receiverships can be granted under provincial law, and if so, a
receivership cannot be applied for under s 243. Parliament's purpose is to give the secured
creditor a choice of remedies, not to create a complete federal code which excludes provincial
law. This is a strong factor counting in favour of the harmonious operation of both the federal
and the provincial law.
100.
Second, by its nature, the remedy of a receiver is a highly discretionary remedy, as
demonstrated by the cases cited earlier. There is no longer a presumption in favour of the
creditor applying for a receiver. The courts have recognised the highly intrusive nature of a
receivership and the drastic effect it can have on the debtor. Increasingly, the courts will review
all factors carefully, weighing the interests of both the creditor and the debtor, before deciding
- 37 -
whether to grant the receivership. The highly discretionary nature of the remedy is another
factor counting against a finding of frustration of the federal purpose.
101.
This aspect of the discretionary nature of the remedy under s 243 has particular weight in
that the provincial law is also discretionary in nature, and also focussed on weighing the interests
of both the farm debtor and the mortgagee creditor. One of the functions of the review process is
to obtain a detailed report of the farmer's financial situation. That detailed report will be
valuable to the Queen's Bench in deciding whether to grant the application under s 11 (1), and
also in deciding whether to grant the application under s 243. The similarity in the inquiry under
the two Acts is another factor pointing away from frustration of the federal purpose.
102.
The Attorney General also notes that the Saskatchewan Queen's Bench was seized with a
similar paramountcy challenge over twenty years ago, in the case of NN Life .68 There, the
argument was that the then-new receiver provision under the BIA was frustrated by remedies
available under The Personal Property Security Act of Saskatchewan. The Queen's Bench
rejected the paramountcy challenge, in part because of the discretionary nature of the remedies
under the two Acts.
103.
The Attorney General submits that the discretionary nature of the remedy under s 243
also distinguishes this case from the decision in Bank of Montreal. In that case, it was an
important part of the federal scheme that there was no discretion, and no need to go to court to
enforce the Bank Act security. Instead, the Act provided that upon default, the bank could seize
the chattel. The bank had an automatic right to the remedy of seizure.
NN Life Insurance Company a/Canada (formerly Many Life Insurance Company a/Canada) v. 568554
Saskatchewan Ltd., 1993 CarswellSask 31, 115 Sask. R. 136 (SK QB).
68
- 38 -
104.
By contrast, the remedy ofa receivership is highly discretionary. The creditor does not
have a right of self-execution, as was the case with the Bank Act security. Here, the secured
creditor can only obtain the remedy of a receiver by going to court, and satisfying the
discretionary nature of the remedy. The legal framework here is completely different from the
self-executing remedy of a Bank Act security, and therefore Bank of Montreal must be given a
restrained interpretation, as noted by Binnie and LeBel 11. in Canadian Western Bank.
105.
The secured creditor has no right to a receiver, and instead must make its case to the court
that a receivership should be granted. The fact that the discretion for the remedy lies with the
court is a fundamental difference from the Bank Act security in issue in Bank of Montreal.
106.
Finally, the main purpose of the receivership power under s 243 appears to be to allow
for a national receiver. That purpose is not frustrated in the case under appeal, as the farmland in
question was all located in Saskatchewan.
(4)
107.
Summary
In summary, the receivership provisions of the BfA have a similar purpose to the
mediation and review process under ss 9 and 11 of the SFSA. Both provisions balance the rights
of the creditor with the interest of the debtor. The SFSA achieves this goal by means of the
mediation and review process. The BfA achieves it by offering the receivership as one option to
a secured creditor, but without excluding receiverships under provincial law as an option, and by
making the grant of a receivership conditional on it being "just and convenient". That test
requires the court hearing the application to consider the rights of both the creditor and the
- 39 -
debtor: the creditor is not entitled to a receivership. Both laws have the purpose of ensuring a
full review of the respective rights and obligations of the two parties, and in neither law is there
an automatic outcome in favour of one party over the other. As well, federal and provincial laws
both recognise the value of mediation and review of the financial position of farmers, and those
delays therefore do not frustrate the purpose of s 243.
108.
Accordingly, the Attorney General submits that there is no frustration of the purpose of
s 243. The Attorney General respectfully submits that the expansive approach to frustration of
purpose taken by the Court of Appeal in this case runs contrary to the generally restrained
approach taken by this Court in its cases on paramountcy. For all these reasons, the Attorney
General asks this Court to vary the reasons of the Court of Appeal and hold that the impugned
provisions of Part II of the SFSA do not frustrate the purpose ofs 243 and are not inoperative
under the doctrine of federal paramountcy.
C.
The Constitutional Question is not Moot
109.
The Attorney General submits that the constitutional question is not moot. The
Saskatchewan Court of Appeal has held that the relevant provisions of the SFSA are inoperative
under the doctrine of federal paramountcy. That decision is binding on the Saskatchewan
Queen's Bench, under the doctrine of stare decisis. That ruling is a matter of considerable
importance to the Government of Saskatchewan, since it renders inoperative key provisions of a
provincial statute designed to regulate the affairs of farmers in financial difficulties. In light of
the Court of Appeal's ruling, it is highly unlikely that the constitutional issue will be raised again
in any subsequent cases.
- 40 110.
This appeal is thus the Attorney General's sole opportunity to raise the constitutional
question before this Court, and for this Court to consider the Court of Appeal's ruling on the
doctrine of federal paramountcy with respect to Part II of the SFSA. The Government is entitled
to have this Court review the constitutional issue, which has rendered inoperative a significant
provincial measure relating to farm land security in Saskatchewan. The Attorney General
therefore respectfully submits that this Court should hear the appeal.
111.
The two-part examination for testing when to hear moot appeals is found in the
unanimous decision by Sopinka J. in Borowski v Canada (Attorney General):69
The approach in recent cases involves a two-step analysis. First it is necessary to
determine whether the required tangible and concrete dispute has disappeared and
the issues have become academic. Second, if the response to the first question is
affirmative, it is necessary to decide ifthe court should exercise its discretion to
hear the case. [ ... ] In the interest of clarity, I consider that a case is moot if it fails
to meet the "live controversy" test. A court may nonetheless elect to address a
moot issue if the circumstances warrant.
112.
The Court' s "general policy or practice", following Sopinka J.'s observation in Borowski,
is to decline to decide hypothetical or academic disputes, unless the Court finds a confluence of
discretionary factors which weigh towards hearing the dispute: 70
The doctrine of mootness is an aspect of a general policy or practice that a court may
decline to decide a case which raises merely a hypothetical or abstract question. The
general principle applies when the decision of the court will not have the effect of
resolving some controversy which affects or may affect the rights of the parties. If
the decision of the court will have no practical effect on such rights, the court will
decline to decide the case.
69
70
[1989] 1 SCR 342 at para 16.
Ibid. at para 15.
- 41 113.
The Attorney General submits that an analysis of the Borowski discretionary factors and
the animating principles of the doctrine of mootness demonstrate that this Honourable Court
should hear the paramountcy issue.
114.
The paramountcy issue satisfies the "live controversy" test in this instance, and this
appeal is not moot. The issue is far from academic given that it will likely be the only
opportunity for this Court to rule on the constitutional operability of the mediation and review
provisions of the SFSA. While the underlying financial dispute has been settled, the operation of
the mediation and review provision in future cases is a point in dispute, and is of considerable
interest to the Government of Saskatchewan.
115.
The Attorney General submits that the Borowski requirement of an adversarial context is
satisfied here, for two reasons. First, the effect of the Court of Appeal's ruling is not restricted to
the direct parties. The "collateral consequences,,71 will potentially impact future litigation
between farmers and their mortgagees in Saskatchewan. The constitutional question or the raison
d'etre of this action remains firmly in place, along with the necessary adversarial context.
116.
Alternatively, even ifthis appeal is moot, there are several "special circumstances"n of
the case that make it worthwhile to apply scarce judicial resources to resolve the dispute. The
decision of the Court of Appeal will have significant practical effect on the rights of parties in
future litigation. As well, the Government of Saskatchewan has a substantial public interest in
having the constitutionality of one of its major farm security protections reviewed by this Court.
The issue of public importance was notably the basis of this Court's discretion to hear the dispute
71
72
Ibid. at para 31.
Ibid. at para 34.
- 42-
in Re Opposition by Quebec to a Resolution to amend the Constitution 73 where the constitutional
question would otherwise remain unreviewed by this Court. That same rationale applies here.
117.
There is a related issue, namely the relief sought by the Attorney General. The Attorney
General is not asking this Court to change the formal decision of the Court of Appeal, which
dismissed Lemare Lake's appeal and its application for a receiver. Rather, the Attorney General
respectfully asks this Court to overturn the constitutional analysis used by the Court of Appeal to
reach that result. The Attorney General proposes alternative legal grounds in support of the
Court of Appeal's decision.
118.
It is true that an appeal is normally from the order of the court below, and not from the
reasons. However, this Court on occasion has allowed an appeal from the reasons. For example,
in R. v. Laba, 74 a majority of the Court held that the broad wording of s. 40 of the Supreme Court
Act75 allowed the Crown to appeal against a constitutional ruling of the Ontario Court of Appeal
in criminal matter. The majority in Laba held that an absurdity would result if the Court of
Appeal ruling were to stand and the accused were later convicted at trial, which would normally
bar a Crown appeal. A strict application of the rule that an appeal can only be from the order,
not the reasons, would have meant the Crown in Laba could not challenge the constitutional
ruling, which then would be stare decisis for future cases raising the same issue.
119.
The Attorney General submits the same concern is raised here, and asks this Court to
exercise its broad discretion under s 40 of the Supreme Court Act to consider the merits of the
constitutional ruling by the Court of Appeal. If the Court does not do so in this case, the issue
73
74
75
Re Opposition by Quebec to a Resolution to amend the Constitution, [1982] 2 SCR 793 at p 806.
R. v. Laba, [1994] 3 SCR 965.
Supreme Court Act, RSC 1985, c S-26, s 40.
- 43 would not likely arise in a future case and the Attorney General would not have a chance to
challenge the analysis of the Court of Appeal in a future appeal to this Court.
120.
In passing, the Attorney General also respectfully submits that this unusual situation
provides a salutary example of why a court should defer from deciding a constitutional issue
unless absolutely necessary. Both the Queen's Bench and the Court of Appeal ruled against
Lemare Lake's application for a receiver on the merits of the application, based on the statutory
requirements of s 243 of the BfA. The Attorney General in oral argument urged the Court of
Appeal not to consider the constitutional issue if the case could be decided under the terms of
s 243 alone. The Court of Appeal's decision to consider the constitutional issue, even though it
ultimately decided the case on the basis that the creditor was not eligible for a receiver under
s 243, has placed the Attorney General in the unusual situation of asking this Court to review a
ruling, not the outcome, of the decision below.
121.
For these reasons, the Attorney General respectfully submits that this appeal is not moot;
that this Court can hear an appeal from the reasons of the Court of Appeal; and that this Court
should hear this appeal.
- 44 -
PART IV
COSTS
122.
The Attorney General is paying the reasonable fees and disbursements of the amicus
curiae, pursuant to the Order of the Chief Justice dated March 6, 2015, and therefore submits
that there should be no order as to costs. The Attorney General reserves the right of taxation of
the amicus curiae's account, under the Rules o/the Supreme Court.
- 45 -
PART V
ORDER SOUGHT
123.
The Attorney General asks that this appeal be allowed, to the limited extent of finding
that the Court of Appeal erred in law in finding that the mediation and review provisions of
Part II of the SFSA are inoperative under the doctrine of federal paramountcy, when an
application is made under s 243 of the BfA. Instead, the Attorney General asks for a ruling that
the impugned provisions do not conflict with s 243 and the paramountcy doctrine is not
triggered.
124.
The Attorney General does not seek any changes to any other part of the decision or order
of the Court of Appeal.
ALL OF WHICH IS RESPECTFULLY SUBMITTED
DATED AT Regina, Saskatchewan, this @i!rlay of March, 2015.
Thomson Irvine
Of Counsel for the Attorney General for
Saskatchewan
- 46 -
PART VI
TABLE OF AUTHORITIES
A.
STATUTES
Bankruptcy and Insolvency Act, RSC 1985, c B-3
Paragraph(s)
Constitution Act, 1867
26,30,38,40-78,90109
28,29
Farm Debt Mediation Acr, SC 1997, c 21
59,95,98
The Personal Property Security Acr, 1993, c P-6.2
102
Saskatchewan Farm Security Act, SS 1988-89, c S-17.1
Supreme Court Act, RSC 1985, c S-26, s 40
26-44,53,59,60,6978, 101, 107-114
118, 119
The Farm Land Security Act, SS 1984-85-86, c F-8.01
31
The Farm Land Security Amendment Acr, 1986, SS 1986-87-88, c 1
31
The Limitation o/Civil Rights Act, RSS 1978, c L-16
81
The Queen's Bench Act, 1998, SS 1998, c Q-1.01
28,46,47
B.
CASES
Alberta v Canadian Western Bank, 2007 SCC 22, [2007] 2 SCR 3
67,82,83,104
Banko/Montreal v Carnival Nationol Leasing Ltd., 2011 ONSC 1007
56
Bank 0/ Montreal v Hall, [1990] 1 SCR 121
65,67, 80-84,90,
103-105
55
BG International Limited v Canadian Superior Energy Inc., 2009
ABCA 127
Borowski v Canada (Attorney Generol), [1989] 1 SCR 342
111-116
Callidus Capital Co/po v Carcap Inc .. 2012 ONSC 163
56
Husky Oil Operations Ltd. v Minister o/National Revenue, [1995] 3
SCR453
44
- 47 B.
CASES - continued
Paragrapb(s)
Law Society o/British Columbia v Mangat, 2001 SCC 67, [2001] 2 SCR
113
67,82
Lemare Lake Logging LId. v 3L Cal1le Company Ltd., 2013 SKQB 278
26,41, 71, 79,120
Lemare Lake Logging Ltd. v 3L Cattle Company Ltd., 2014 SKCA 35
41, 72, 75, 79, 120
Multiple Access Ltd. v McCutcheon, [1982] 2 SCR 161
63,70,80
Marine Services International Ltd. v Ryan Estate, 2013 SCC 44,
[2013] 3 SCR53
67,87,88,89,97
NN Life Insurance Co. o/Canada v 568554 Saskatchewan Ltd., 115
Sask R 136, 23 CBR (3d) 209
102
Quebec (Attorney General) v Canada (Human Resources and Social
Development), 2011 SCC 60, [2011] 3 SCR 60
86
Quebec (Attorney General) v Canadian Owners and Pilot Association,
2010 SCC 39, [2010] 2 SCR 536
65,67,74,85
Re Opposition by Quebec to a Resolut ion to amend the Constitution,
[1982] 2 SCR 793
116
Rothmans, Benson & Hedges Inc. v Saskatchewan, 2005 SCC 13, [2005]
1 SCR 188
67,82
R v Laba, [1994] 3 SCR 965
118
Textron Financial Canada Limited v Chetwynd Motels Ltd., 2010 BCSC
477
57
C.
TEXTS
Lloyd W. Houlden, Geoffrey B. Morowctz and Janis P. Sarra, The 20142015 Annotated Bankruptcy and Insolvency Act (Toronto: Carswell,
2015)
51
Peter W. Hogg, Constitutional Law (~lCanada, 5 ed. Supplmented,
Vol. I (Toronto: Carswell. 2007)
64,66
tl1
- 48 -
PART VII
STATUTORY PROVISIONS
Bankruptcy and Insolvency Act, RSC 1985, c B-3, ss 243-244
TAB A
Saskatchewan Farm Security Act, SS 1988-89, c S-17.1, ss. 1- 42.1
TABB
Summary of Provisions of Part II of the SFSA Which Were Not Raised
in the Courts Below
TABC
CAN ADA
CONSOLIDA nON
CODIFICA TION
Bankruptcy and
Insolvency Act
Loi sur la faillite et
l'insolvabilite
R.S.C., 1985, c. B-3
L.R.C. (1985), ch. B-3
Current to February 16, 2015
Ajour au
16 fevrier 2015
Last amended on January 2, 2015
Derniere modification Ie 2 janvier 2015
Published by the Minister of Justice at the following address:
http://laws-Iois .j usti ce.gc .ca
Publie par Ie ministre de la Justice aI' adresse suivante :
http://lois-laws .j ust ice.gc .ca
Fai/lile el insolvabilile - 16 jevrier 2015
Section
Page
Article
231
Adding creditors after order
236
231
232
233
Secured claims
Enforcement of order in default of debtor
237
237
232
233
234
235
Re-examination of debtor
Disposition of moneys paid into court
239
240
234
235
236
237
238
239
239.1
239.2
240
241
242
Oaths
If assignment or bankruptcy order made
Appeal
Clerk to report
No dismissal, etc., of employees
No discontinuance of public utilities
Regulations
Audit of proceedings
Application of this Part
240
240
241
241
241
241
241
242
242
236
237
238
239
239.1
239.2
240
241
242
Page
Noms de creanciers ajoutes a
I' ordonnance
Reclamations garanties
Execution de I'ordonnance si Ie debiteur
fait defaut
Nouvel examen du debiteur
Affectation des montants verses au
tribunal
Serments
Ordonnance de faillite ou cession
Appel
Le greffier doit faire rapport
Interdiction
Interdiction
Reglements
Verification des comptes
Application
PART XI
SECURED CREDITORS AND
RECEIVERS
243
244
245
246
247
248
249
250
251
252
Court may appoint receiver
Advance notice
Receiver to give notice
Receiver's statement
Good faith, etc.
Powers of court
Receiver may apply to court for
directions
Right to apply to court
Protection of receivers
Defence available
INTERPRETATION
253
Definitions
CREANCIERS GARANTIS ET
SEQUESTRES
242
242
244
245
245
246
246
247
247
248
248
240
240
240
241
241
241
241
241
242
242
242
243
244
245
246
247
248
249
Nomination d'un sequestre
Preavis
Avis du sequestre
Declaration
Obligation de diligence
Pouvoirs du tribunal
Instructions du tribunal
242
244
245
245
246
246
247
250
251
252
Ordonnance d'un autre tribunal
Protection du sequestre
Moyen de defense
247
248
248
PARTIE XII
248
FAILLITE DES COURTIERS EN
VALEURS MOBILIERES
248
DEFINITIONS
248
248
248
GENERAL
237
239
PARTIE XI
PART XII
SECURITIES FIRM BANKRUPTCIES
236
237
253
Definitions
DISPOSITIONS GENERALES
250
254
255
256
Application of other provisions
Conflicts
Applications re securities firm
250
251
251
254
255
256
257
258
259
260
Statement of customer account
Deferred customers
Trustee powers
Determination of cllstomer name
securities
253
253
253
257
258
259
260
254
15
Autres dispositions applicables
Contlit
Requete en faillite - courtier en valeurs
mobilieres
Envoi d'un re1eve
Clients responsables
Pouvoirs du syndic
Decision du syndic
248
250
250
251
251
253
253
253
254
Bankruptcy and Insolvency - February 16. 2015
(c) designating the "court" for the purpose
of this Part in any province except Manitoba
and Alberta;
c) definir ce qu'on entend, pour I'applica-
tion de la pn:sente partie, par « tribunal »
dans chacune des provinces, sauf Ie Manitoba et l' Alberta;
(d) adapting this Part to the court organization or other circumstances of a particular
province;
d) adapter la presente partie a l'organisation
judiciaire ou aux autres circonstances d'une
province particuliere;
(e) varying, in respect of any province, the
classes of debts and amounts thereof to
which this Part applies;
a l'egard de toute province, les
categories de dettes et leurs montants auxquels la presente partie s'applique;
e) modifier,
(j) changing or prescribing, in respect of any
province, the classes of debts to which this
Part does not apply;
a I' egard de toute
province, les categories de dettes auxquelles
la presente partie ne s'applique pas;
J) changer ou prescrire,
if/) respecting the transfer of proceedings
to a province other than the province in
which a consolidation order was originally
issued; and
f
I) regir Ie renvoi des procedures dans une
province autre que celie OU I'ordonnance de
fusion a ete rendue;
(g) generally, for carrying into effect the
purposes and provisions of this Part.
Audit of
proceedings
g) prendre toute autre mesure d'application
de la presente partie.
RS. 1985. c. 8·3. s. 240; 1992, c. 27, s. 88.
L.R. (1985), ch. 8·3, art . 240; 1992, ch. 27, art . 88.
241. The accounts of every clerk that relate
to proceedings under this Part are subject to audit in the same manner as if the accounts were
the accounts of a provincial officer.
241. Les comptes de chaque greffier. relatifs
aux procedures prevues par la presente partie,
sont sujets a verification de la meme maniere
que s'ils etaient les comptes d'un fonctionnaire
provincial.
RS , c. 8·3, s. 212.
Veri fication des
comptes
SR . ch 8·3, art. 212.
Application of
this Part
242. (I) The Governor in Council shall, at
the request of the lieutenant governor in council
of a province, declare, by order, that this Part
applies or ceases to apply, as the case may be,
in respect of the province.
242. (I) A la demande du lieutenant-gouverneur en conseil d'une province, Ie gouverneur en conseil declare par decret que la presente partie commence a s'appliquer ou cesse
de s'appliquer, selon Ie cas, dans la province en
question.
Automatic
(2) Subject to an order being made under
subsection (I) declaring that this Part ceases to
apply in respect of a province. if this Part is in
force in the province immediately before that
subsection comes into force, this Part applies in
respect of the province,
(2) Sous reserve d'une eventuelle declaration faite en vertu du paragraphe (I) indiquant
qu'elle cesse de s'appliquer a la province en
cause, la presente partie s'applique a toute province dans laquelle elle etait en vigueur a l' entree en vigueur de ce paragraphe.
RS .. 1985. c. 8·3 . s. 242; :!002. c. 7, s. 85; 2007. c. 36. s.
L .R. (1985),ch . 8-3,art. 242;2002.ch. 7,art. 85 ; 2007, ch.
57.
36, art. 57.
application
Court may
appoint receiver
PART XI
PARTIE XI
SECURED CREDITORS AND RECEIVERS
CREANCIERS GARANTIS ET
SEQUESTRES
243. (I) Subject to subsection (I. I), on application by a secured creditor, a court may appoint a receiver to do any or all of the following if it considers it to be just or convenient to
do so:
243. (I) Sous reserve du paragraphe (I , I),
sur demande d'un creancier garanti, Ie tribunal
peut, s'il est convaincu que cela est juste ou opportun, nommer un sequestre qu'il habilite :
242
Application
Application
automatlque
Nomination
d'un sequestre
Faillite et insolvabilite - 16 jevrier 2015
(0) take possession of all or substantially all
of the inventory, accounts receivable or other
property of an insolvent person or bankrupt
that was acquired for or used in relation to a
business carried on by the insolvent person
or bankrupt;
a) it
prendre possession de la totalite ou de
la quasi-totalite des biens - notamment des
stocks et comptes a recevoir - qu'une personne insolvable ou un failli a acquis ou utilises dans Ie cadre de ses affaires;
b) a exercer sur ces biens ainsi que sur les
affaires de la personne insolvable ou du failli
Ie degre de prise en charge qu'il estime indique;
(b) exercise any control that the court con-
siders advisable over that property and over
the insolvent person's or bankrupt's business; or
a prendre toute autre mesure qu'il estime
indiquee.
c)
(c) take any other action that the court con-
siders advisable.
Restriction on
appointment of
receiver
( 1.1) In the case of an insolvent person in respect of whose property a notice is to be sent
under subsection 244( I ), the court may not appoint a receiver under subsection (I) before the
expiry of 10 days after the day on wh ich the secured creditor sends the notice unless
(1.1) Dans Ie cas d'une personne insolvable
dont les biens sont vises par Ie preavis qui doit
etre donne par Ie creancier garanti aux termes
du paragraphe 244( I), Ie tribunal ne peut faire
la nomination avant I'expiration d'un delai de
dixjours apres I'envoi de ce preavis, a moins :
(a) the insolvent person consents to an earlier enforcement under subsection 244(2); or
Restriction
relative ala
nomination d'un
sequestre
que la personne insolvable ne consente,
aux termes du paragraphe 244(2), a I'execution de la garantie a une date plus rapprochee;
a)
the court considers it appropriate to appoint a receiver before then.
(b)
qu'il soit indique, selon lui , de nommer
un sequestre a une date plus rapprochee.
b)
Definotion of
"receiver"
(2) Subject to subsections (3) and (4), in this
Part, "receiver" means a person who
(a) is appointed under subsection (I); or
(2) Dans la presente partie, mais sous reserve des paragraphes (3) et (4), «sequestre»
s'entend de toute personne qui:
a) soit est nommee en vertu du paragraphe
( I );
(b) is appointed to take or takes possession
or control - of all or substantially all of the
inventory, accounts receivable or other property of an insolvent person or bankrupt that
was acquired for or used in relation to a business carried on by the insolvent person or
bankrupt - under
b) soit est nommement habilitee a prendre
- ou a pris - en sa possession ou sous sa
responsabilite, aux termes d'un contrat
creant une garantie sur des biens, appele
« contrat de garantie » dans la presente partie, ou aux termes d'une ordonnance rendue
sous Ie regime de toute autre loi federale ou
provinciale prevoyant ou autorisant la nomination d' un sequestre ou d'un sequestre-gerant, la totalite ou la quasi-totalite des biens
- notamment des stocks et comptes a recevoir - qu'une personne insolvable ou un
failli a acquis ou utilises dans Ie cadre de ses
affaires.
(i) an agreement under which property becomes subject to a security (in this Part referred to as a "security agreement"), or
(ii) a court order made under another Act
of Parliament, or an Act of a legislature of
a province, that provides for or authorizes
the appointment of a receiver or receivermanager.
Definition of
"receiver" subsection
248(2)
(3) For the purposes of subsection 248(2),
the definition "receiver" in subsection (2) is to
be read without reference to paragraph (a) or
subparagraph (b)(ii).
Definition de
« sequesrre »)
(3) Pour I'application du paragraphe 248(2),
la definition de « sequestre », au paragraphe (2),
s'interprete sans egard a I'alinea a) et aux mots
« ou aux termes d'une ordonnance rendue sous
Ie regime de toute autre loi federale ou provin-
243
Definition de
« sequestre ~) paragraph.
248(2)
Bankruptcy and Insolvency - February 16, 2015
ciale prevoyant ou autorisant la nomination
d'un sequestre ou d'un sequestre-gerant ».
Trustee to be
appointed
(4) Only a trustee may be appointed under
subsection (I) or under an agreement or order
referred to in paragraph (2)(b).
(4) Seul un syndic peut etre nomme en vertu
du paragraphe (I) ou etre habilite aux termes
d'un contrat ou d'une ordonnance mentionne a
I'alinea (2)b) .
Syndic
Place of filing
(5) The application is to be filed in a court
having jurisdiction in the judicial district of the
locality of the debtor.
(5) La demande de nomination est deposee
aupres du tribunal competent dans Ie district judiciaire de la localite du debiteur.
Lieu du depot
Orders
respecting fees
and
disbursements
(6) If a receiver is appointed under subsection (I), the court may make any order respecting the payment of fees and disbursements of
the receiver that it considers proper, including
one that gives the receiver a charge, ranking
ahead of any or all of the secured creditors,
over all or part of the property of the insolvent
person or bankrupt in respect of the receiver's
claim for fees or disbursements, but the court
may not make the order unless it is satisfied
that the secured creditors who would be materially affected by the order were given reasonable notice and an opportunity to make representations.
(6) Le tribunal peut, relativement au paiement des honoraires et debours du sequestre
nomme en vertu du paragraphe ( I), rendre toute
ordonnance qu'il estime indiquee, y compris
une ordonnance portant que la reclamation de
celui-ci a \'egard de ses honoraires et debours
est garantie par une surete de premier rang sur
tout ou partie des biens de la personne insolvable ou du failli, avec preseance sur les reclamations de tout creancier garanti; Ie tribunal ne
peut toutefois declarer que la reclamation du
sequestre est ainsi garantie que s'il est convaincu que tous les creanciers garantis auxquels
I'ordonnance pourrait serieusement porter atteinte ont ete avises a cet egard suffisamment a
l'avance et se sont vu accorder I'occasion de se
faire entendre.
Ordonnances
relatives aux
honoraires et
debours
Meanmg of
"disbursements"
(7) In subsection (6), "disbursements" does
not include payments made in the operation of
a business of the insolvent person or bankrupt.
(7) Pour I'application du paragraphe (6), ne
sont pas comptes comme debours les paiements
effectues dans Ie cadre des operations propres
aux affaires de la personne insolvable ou du
failli.
Sens de
(e debours))
1992,c. 27,s. 89;2005,c. 47,L 115;2007, c. 36, s. 58.
1992, ch. 27, art . 89; 2005, ch. 47, art . 115 ; 2007, ch. 36,
art . 58.
Advance notice
244. (I) A secured creditor who intends to
enforce a security on all or substantially all of
(a) the inventory,
(b) the accounts receivable, or
(c)
the other property
of an insolvent person that was acquired for, or
is used in relation to, a business carried on by
the insolvent person shall send to that insolvent
person, in the prescribed form and manner, a
notice of that intention.
Period of no tic.
(2) Where a notice is required to be sent under subsection (I), the secured creditor shall
not enforce the security in respect of which the
notice is required until the expiry of ten days
after sending that notice, unless the insolvent
244. (I) Le creancier garanti qui se propose
de mettre a execution une garantie portant sur
la totalite ou la quasi-totalite du stock, des
comptes recevables ou des autres biens d'une
personne insolvable acquis ou utilises dans Ie
cadre des affaires de cette demiere doit lui en
donner preavis en la forme et de la maniere
prescrites.
Preavis
(2) Dans les cas ou un preavis est requis aux
termes du paragraphe (I), Ie creancier garanti
ne peut, avant I'expiration d'un delai de dix
jours suivant I'envoi du preavis, mettre a execution la garantie visee par Ie preavis. a moins
DeJai
244
Faillile el insolvabilile- 16jevrier 2015
a une
person consents to an earlier enforcement of the
security.
que la personne insolvable ne consente
execution aune date plus rapprochee.
No ad ..oallce
consenl
(2.1) For the purposes of subsection (2),
consent to earlier enforcement of a security
may not be obtained by a secured creditor prior
to the sending of the notice referred to in subsection ( I ).
(2.1) Pour I'application du paragraphe (2), Ie
creancier garanti ne peut obtenir Ie consentement vise par Ie paragraphe avant I'envoi du
preavis vise au paragraphe ( I ).
Exceplion
(3) This section does not apply, or ceases to
apply, in respect ofa secured creditor
(3) Le present article ne s'applique pas, ou
cesse de s'appliquer, au creancier garanti dont
Ie droit de realiser sa garantie ou d'effectuer
toute autre operation, relativement a celle-ci est
protege aux tennes du paragraphe 69.1 (5) ou
(6), ou a I'egard de qui a ete levee, aux termes
de I'article 69.4, la suspension prevue aux articles 69 a69.2.
whose right to realize or otherwise deal
with his security is protected by subsection
69.1(5) or (6); or
(a)
(b) in respect of whom a stay under sections
69 to 69.2 has been lifted pursuant to section
69.4.
Idem
(4) This section does not apply where there
is a receiver in respect of the insolvent person.
1992. c. 27, s. 89; 1994, c. 26, s. 9(E).
(4) Le present article ne s'applique pas dans
les cas ou une personne agit, a titre de sequestre, a I'egard de la personne insolvable.
Non-application
du present
article
Idem
1992, ch. 27, art. 89; 1994, ch. 26, art 9(A).
Receiver to give
notice
245. (1) A receiver shall, as soon as possible and not later than ten days after becoming a
receiver, by appointment or otherwise, in respect of property of an insolvent person or a
bankrupt, send a notice of that fact, in the prescribed fonn and manner, to the Superintendent, accompanied by the prescribed fee, and
(a) in the case of a bankrupt, to the trustee;
or
245, (I) Le sequestre doit, dans les
meilleurs delais et au plus tard dans les dix
jours suivant la date ou il devient, par nomination ou autrement, sequestre a I'egard de tout
ou partie des biens d'une personne insolvable
ou d'un failli, en donner avis, en la fonne et de
la maniere prescrites, au surintendant - I'avis
devant, dans ce cas, etre accompagne des droits
prescrits - et :
a) s'agissant d'un failli, au syndic;
in the case of an insolvent person, to the
insolvent person and to all creditors of the
insolvent person that the receiver, after making reasonable efforts, has ascertained .
(b)
b) s'agissant d'une personne insolvable, a
celle-ci, ato us ceux de ses creanciers dont il
a pu, en y allant de ses meilleurs efforts,
dresser la liste.
Idem
(2) A receiver in respect of property of an
insolvent person shall forthwith send notice of
his becoming a receiver to any creditor whose
name and address he ascertains after sending
the notice referred to in subsection (1).
(2) Le sequestre de tout ou partie des biens
d'une personne insolvable est tenu de donner
immediatement avis de son entree en fonctions
a tout creancier dont il prend connaissance des
nom et adresse apres I'envoi de I'avis vise au
paragraphe (I ).
Names and
(3) An insolvent person shall, forthwith after
being notified that there is a receiver in respect
of any of his property, provide the receiver with
the names and addresses of all creditors.
(3) La personne insolvable doit, des qu'elle
est avisee de I'entree en fonctions d'un sequestre a regard de tout ou partie de ses biens,
foumir a celui-ci la liste des noms et adresses
de tous ses creanciers.
addresses of
creditors
1992,c. 27,s. 89
Avis du
sequestre
Idem
Nom el adresse
des creanciers
1992,ch. 27, an . 89
Receiver's
slatement
246. (I) A receiver shall, forthwith after
taking possession or control, whichever occurs
first, of property of an insolvent person or a
246. (1) Le sequestre doit, des sa prise de
possession ou, si elle survient plus tot, sa prise
de controle de tout ou partie des biens d'une
245
Declaration
The
Saskatchewan Farm
Security Act
being
Chapter S-17.1 of the Statutes of Saskatchewan, 1988-89
(consult Table of Saskatchewan Statutes for effective dates)
as amended by the Statutes of Saskatchewan, 1989-90, c.22;
1992, c.43 and 7 -!-; 1993, c.P-6 .2 and 51; 1994, c.30;
1996. c.C-27.C)1, c.9; 1997, c.T-22.2; 1998, c.C-45.2, c.14 and 48:
2000, c.L-5.1; 2002, c.C-1!.1 and 55; 2004, c.L-1B.1, T-18.1; c.26
and 5~); 2005 , c.l\:I-3().1; 2009. c.7; 2010. c.E-9.22 and c.N-5.2;
2013, c.27; and 2014, c.E-13.!.
NOTE:
This consolidation is not official. Amendments have been
incorporated for convenience of reference and the original statutes
and regulations should be consulted for all purposes of interpretation
and application of the law. In order to preserve the integrity of the
original statutes and regulations, errors that may have appeared are
reproduced in this consolidation.
Table of Contents
PART I
Title and Intertlretatioll
1
2
:1
'\
5
6
7
1'1
9
Short title
I nterpreta lion
PAWI'Il
Farm Land Security
Interpretation of Part
Purpose
Farm Land Security I30ard contlllued
~;mployee~
Act to apply
Mediators
Action8 prohibited, continu ed or discontinued
IR
F;xten"ion of time for redemption
No action without court order
Not.ice to boa I'd a nd farmer
PreHumption of viabilit.v and sincerity
Mediawr's certificate
Court supervi~ed mandatory mediation
Power of court to award cost~
Homestead
I3urden of proof
19
Ground~
10
II
12
13
I I
15
16
17
20
21
22
23
2·1
25
26
for dismi8sal
Further applicationR
Writ of execution
35
36
a7
:JS
:39
Fixtures
Payment of overdue moneys without notice
01' bonus
Onl,l' land taxes chargeahle to farmer
Life insurance premiums not to ft)f1n a charge
on the farm land
Application of fire insurance money
Hail insurance premiums
f{e~triction of rights under lease option agreement
·10
41
Application of moneys; more than one deht
42
Cprtain conditions prohibited
12.1
Voluntar.\' mediat.ion
PART III
Home Quarter Protection
·~1
4-1
I nterpretati,," of Part
Restriction on orders affecting homestead
PART IV
Possession of Equipment
·Iii
46
[nt.e rpret.atioll of Part
Vendor's rights restricted
<17
18
,19
50
Right to possess ion restricted
Notice of intention to take pos~ession
Appointment of representative of deceased farmer
AppliCAtion for hearing
51
Duty of local registrar on receipt of application
Conditions respecting possession
Orders of the court
Payment cancels notice
Rights of farm e r if secured party cont.ravenes
certain provi~ions
Limitation of action8
Renewal of mortgages
Confidentiality
Action on personal convenant
Effect of final orde r of' fore closure
52
53
54
55
27
Right of firilt refusal
56
27. 1
27.11
I nterpretation of "ections 27.11 to 27.9
Farm Tenure Arbitration Board
57
58
27 .2
Right to lease
59
27 ,21 Assignment of rights
Order to preserve implem e nt
Notice of possession of implement
Application for hearing after notice of possession
Action by sl'cured party after possession
of implement
Court order poMponement
Application for review of lender', decision
GO
27.31
27.-1
27,41
27 .5
Other applications to hoard
Enforcement of orders
Proceedings in court
Hearings
6J
(;2
Costs
63
Continuation of notice
Power to stay execution
27.51
Finality of proceedings
Appeal
27.3
27.6
Application of section 27 .2 to l'xisting leases
Termination of obligation to lease
27 .71 Financial assistance
27.R
Certain farm lands exempted
27.9 Certain farm lands exempted
Restricted effect of payment or acknowledgment
28
under mortgage
29
Power of court re certain execution:;
:~O
Re,~erve hid in mortgage ~al es
Limits and acknowledgment of guarantpes
al
Mortgagee's inspection fees
32
:~3
Mortgagee's collection CO~t.8
64
Restriction on payment to assignee
PART V
Exemptions
27.61
6 ",J
27.7
(j(j
67
68
6!1
70
71
72
7:3
7-1
75
I nterpretation of Pm·t
Exemptions under executions
P e rmitt.ed disposition of cert.ain exempt property
~;xempti()ns under security agreement
Application to court
Exceptions
Deceased debtor
I{ii!ht. of selection
Ah"conding debtOl''''
SeparatIOn agr('cmPllts
Interc~t in annuity exempt
CHAPTER 8-17.1
An Act to provide for Security for Saskatchewan Family Farms
PART I
Title and Interpretation
Short title
1 This Act may be cited as The Saskatchewan Farm Security Act.
Int.erpret.ation
2(1)
In this Act:
(a)
"agricultural corporation" means, except in Part VI, a corporation:
(i)
that is engaged in the business of farming; and
(ii) the majority of issued voting shares of which are legally or
beneficially owned by producers who are resident persons;
(b) "board" means. except in sections 27.1 to 27.9, the Farm Land Security
Board continued pursuant to section 5:
(c)
"child" means, other than in Part VI:
(i)
an unmarried person under 18 years of age; or
(ii) an unmarried person over 18 years of age who
attendance at an educational institution;
IS
in full time
and includes a stepchild, adopted child or child over whom a producer stands
in loco parentis;
(d)
"court" means Her Majesty's Court of Queen's Bench for Saskatchewan;
(e)
"family" means spouse and children:
(f) "farm land" means other than in Part VI, real property in Saskatchewan
that is situated outside a city, town , village. hamlet or resort village and that
is used for the purposes of farming, but does not include:
(i)
minerals contained in, on or under that real property; and
(ii) land used primarily for the purpose of extracting, processing,
storing or transporting minerals;
(g) "farming" includes livestock raising, poultry raising, dairying, tillage of
the soil, bee-keeping, fur farming or any other activity undertaken to produce
primary agricultural produce and animals;
(h)
"homestead" means:
(i) the house and buildings occupied by a farmer as his bona fide farm
residence: and
(ii) the farm land on which the house and buildings mentioned in
subclause (i) are situated, not exceeding 160 acres or one quarter section,
whichever is greater;
6
c.8-17.1
SASKATCHEWAN FARM SECURITY
(i)
"implement" means:
(i) any implement, equipment or machine that is used or intended for
use by a producer on a farm for the purpose of farming;
(ii) a motor vehicle classified in regulations made pursuant to The
Trame Safety Act as a farm vehicle;
(j)
"judge" means a judge of the court;
(k)
"livestock" includes any cattle, horse, mule. ass, swine. sheep or goat;
(I) "local registrar" means a local registrar or deputy local registrar of the
court;
(m) "mediator" means a person appointed as a mediator pursuant to
section 8;
(n) "minister" means the member of the Executive Council to whom for the
time being the administration of this Act is assigned;
(0)
"mortgage" means any mortgage of farm land, including:
(i)
a mortgage granted to:
(A) the Agricultural Credit Corporation of Saskatchewan pursuant
to The Agr':cultuml Credit Corporation of Saslwtchewan Act; or
(B) the Farm Credit Corporation pursuant to the Farm Credit Act
(Canada), as amended from time to time, or by any other corporation
created by or pursuant to any other Act of the Parliament of
Canada;
(ii)
an agreement for the sale of land; and
(iii) an agreement renewing or extending a mortgage or agreement for
sale;
(p)
"mortgagee" includes:
(i)
a vendor under an agreement for the sale of farm land;
(ii) a personal representative. successor or assignee of a vendor
mentioned in subclause (i) or a mortgagee; and
(iii) a person claiming through a vendor mentioned in subclause (i) or a
mortgagee;
(q)
"mortgagor" includes:
(i)
a purchaser under an agreement for the sale of farm land;
(ii) a personal representative. successor or assignee of a purchaser
mentioned in subclause (i) or a mortgagor; and
(iii) a person claiming through a purchaser mentioned in subclause 0)
or a mortgagor;
7
(1')
Repealed.
2002, c.5;'), s.3.
(s)
Repealed.
2002, c.!);;, s.:l.
(t)
Repealed.
19~);l, c.51, s.:l.
c.8-17.1
(u) "producer" means an individual who is engaged in the business of
farming;
(v) "purchase money security interest" means a security interest that is
taken or reserved by a vendor to secure payment of all or any part of the sale
price of personal property:
(w)
"recognized financial institution" means:
(i) a bank that is governed by the Bank Act (Canada), as amended from
time to time;
(ii) a credit union that is incorporated or continued pursuant to The
Credit Unioll Act, 1998;
(iii) a trust corporation that holds a valid and subsisting licence issued
pursuant to The Trust and Loan Corporations Act, 1997;
(iv) the Agricultural Credit Corporation of Saskatchewan that IS
continued pursuant to The Agricultural Credit Corporation of
Saskatchewan Act: or
(v) the Farm Credit Corporation constituted pursuant to the Farlll
Credit Act (Canada), as amended from time to time;
(x) "resident person" means, except in Part VI, an individual who resides
in Saskatchewan for at least 183 days in any year:
(y) "secured party" means a person who has a security interest and
includes a recognized financial institution that has a security interest;
(z) "security agreement" means an agreement that creates or provides for
a security interest;
(aa) "security interest" means an interest in personal property that
secures payment or performance of an obligation:
(bb)
"spouse" means:
(i)
the legal spouse of a person; or
(ii) if a person does not have a legal spouse or is living separate and
apart from his legal spouse, a common law spouse of that person.
(2) In clause 2(l)(h), "farmer" means "farmer" as defined in Part II, III
t.he case may be.
01'
V, as
1988-89. c.S-li.l, s.2: 19n. c.74, s.:l: 199:1, c.;jJ,
s.:!; 1996, c.9, s.2:;; 1997. c.T-22.2, 8.90; 1998,
c.C'-.J5.2, sA iii; 2002, c.5!i. s.3; 2004, c.T-1H.1.
8.305.
8
c. S-17.1
PART II
Farm Land Security
3
In this Part:
(a) "action" means an action in court with respect to farm land by a
mortgagee for:
(i)
foreclosure of the equity of redemption;
(ii)
sale or possession of the mortgaged farm land;
(iii)
recovery of any money payable under a mortgage;
(iv)
specific performance or cancellation of an agreement for sale;
(v) sale or possession of the farm land sold under the agreement for
sale; 01'
(vi)
any other relief that may be granted under the agreement for sale;
(a. 1) "agreement for sale". with respect to the sale of land, means, other
than in section 25, an agreement for the sale of land pursuant to which:
(i) the purchaser agrees to pay the purchase price over a period of time,
in the manner stated in the agreement; and
(ii) on payment of the purchase price mentioned in clause (a), the
vendor is obliged to convey the title to the land to the purchaser;
but does not include an agreement pursuant to which the purchase price is
payable in less than six months from the date of possession as set out in the
agreement or in any amendment to the agreement.
(b) "The Farm Land Security Act" means The Farm Land Security Act as
that Act existed on the day before the coming into force of this Part;
(c)
"farmer" means, except in sections 27.1 to 27.9, a mortgagor.
1988·89. d;-17.l,
8 . •1;
l!)!):!. c.74, s.4; 200!), c.7.
8.6.
Purpose
4 The purpose of this Part is to afford prot.ection to farmers against loss of their
farm land.
l!JSS-il9, c.S-l7.!.
~.l.
Farm Land Security Board continued
5(1) The Farm Land Security Board and the Saskatchewan Farm Ownership
Board are continued as The Farm Land Security Board consisting of those persons
appointed as members by the Lieutenant Governor in Council.
9
c.S-17.1
(2) Any person who is a member of the board on the day before the coming into
force of this Part continues as a member of the Board until:
(a) that person resigns or is removed from the board by the Lieutenant
Governor in Council; or
(b)
(3)
(4)
a successor is appointed pursuant to this Act.
The Lieutenant Governor in Council may designate:
(a)
one of the members as chairman .: and
(b)
one or more members as vice-chairmen.
The board may:
(a)
appoint committees consisting of any individuals; and
(b) delegate to committees appointed pursuant to clause (a) any of its powers
under section 12 that it considers appropriate in connection with carrying out
its duties pursuant to this Act.
(5) In performing their duties pursuant to this Act, the board and its committees
have all the powers conferred on a commission by sections 11. 15 and 25 of The
Public Inquiries Act, 2013.
(6)
The board may make rules governing its procedure.
l!)ilil·R!). c .S·li.l,
~.:'i;
I!)!)::!, c.;;I,
~.4; to];~,
c.t7,
s.:~il.
Employees
6(1)
The board may:
(a) employ, engage the services of or retain any officers or other employees
that are required for the proper conduct of its business; and
(b) determine the duties, powers, conditions of employment and remuneration
of officers and employees employed, engaged or retained pursuant to clause (a).
(2)
The board may:
(a) engage the services of any legal counsel, consultants and technical
advisors that it considers appropriate to assist it in carrying out its
responsibilities: and
(b) pay any fees and expenses it considers appropriate to the legal counsel,
consultants and technical advisors engaged pursuant to clause (a).
W88·8!). c.8-l7.1, 8.6.
Act to apply
7 The Public Sen'ice Superannuation Act applies to any officers and other
employees that may be employed by the board pursuant to subsection 6(1).
19Ril-R9, c.s·17.1. s.7.
10
c. S-17.1
Mediators
8(1)
(2)
The minister may appoint persons as mediators for the purpose of this Act.
The minister may appoint a person as the manager of mediation services.
1988·89, c.S·17 . L s .8.
Actions prohibited. continued or discontinued
9(1) Notwithstanding any other Act or law or any agreement entered into before,
on or after the coming into force of this Act:
(a) The Land Contracts (Act':ons) Act does not apply to farm land and any
existing actions with respect to farm land pursuant to that Act are deemed to
be discont.inued:
(b) all applications made and all notices given pursuant to section 9 of TIw
Farm Land Security Act are continued pursuant to section 11 of this Act;
(c) all actions commenced following an order of the court. pursuant to
section 9 of The Farm Land Security Act are continued:
(d) subject to sections 11 to 21 , no person shall commence an action with
respect. to farm land:
(e) where an order is made pursuant. to section 9 of The Farm Land
Secllrity Act, declaring t.hat. any provision of sections 8 and 10 of The
Farm Land Seclln:ty Act does not apply. the order made pursuant to section 9
of The Farm Land Security Act is continued;
(f) where an order has been made pursuant to section 9 of The Farlll Land
Security Act with respE'ct to a homestead providing that section 7 or 8 of that.
Act do not apply and a final order offoreclosure has not been granted:
(i) t.he order made pursuant t.o section 9 and any order nisi are vacated
with respect to the homestead; and
(ii)
the mortgagee may make an application pursuant to section 11.
(2) Subject to subsection (3), where a notice pursuant to section 9 of The Farm
Land Security Act is cont.inued pursuant to clause (l)(b), this Act shall apply.
(3) Where a not.ice pursuant to section 9 of The Farm Land Security Act is
continued pursuant to clause (I)(b), no application has been made and the board
has already commenced mediation between the farmer and the mortgagee:
(a) the board shall continue to mediat.e between the farmer and the
mortgagee up t.o 150 days from the date the notice was served on the board;
and
(b)
subsections 12(2), (5), (7) to (10) and clause 12(4)(c) do not apply.
1988·89. c.S·17 . 1. 8.9 .
Extension of time for redemption
10 Subject to section 11, notwithstanding the terms of any order nisi in an action
made prior to December 4. 1984. the t.ime for redemption under the order is
ext.ended sine die.
1988·69 , c.S-17. 1, s . lO.
11
c.S-17.l
No action without court order
ll( 1) Where a mortgagee makes an application with respect to a mortgage on
farm land, the court may, on any terms and conditions that it considers just and
equitable:
(a)
order that clause 9(l)(d) or section 10 does not apply; or
(b)
make an order for the purposes of clause 9(l)(f).
(2) Where an order is made pursuant to subsection (1). the mortgagee may
commence or continue an action with respect to that. mortgage.
(3) Any action that is commenced wit.hout an order pursuant to this section is a
nullity , and any order made with respect. to an action or a proposed action without
an order pursuant to this section is void.
I!)RR-R9, c.S- J 7. J.
~.
J J; 1!189-90, c.22, 8.3.
Notice to board and farmer
12(1) Subject to subsection (1-1) , a mortgagee may apply to the court for an order
pursuant to section 11 but only after the expiry of 150 days {i'om the date of service
of a notice of intention on:
(a)
the board ; and
(b)
the farmer.
(2) On receiving a notice of intention pursuant to subsection (1), the board shall
provide a copy of the notice to the manager of mediation services appointed
pursuant t.o section 8 who:
(a)
shall designate a mediator for the purposes of this section; and
(b) forward to the mediator designated pursuant to clause (a) the copy of the
notice.
(3) Within 60 days following service ofa notice of intention on the board pursuant
to subsection (1), the board shall complete a review of the financial affairs of the
farmer.
(4) Prior to the commencement of mediation. t.he board shall provide a copy of the
report of the review conducted purs uant to subsection (3) to:
(a)
the farmer;
(b)
the mortgagee; and
(c)
the mediator.
(5) On receipt of the report mentioned in subsection (4), the mediator shall
attempt t.o mediate between the farmer and the mortgagee.
(6)
For the purposes of subsection (5), t.he mediation period is not to exceed:
(a) 105 days following service on the board of the notice of intention
mentioned in subsection (1); or
(b) any period, other t.han that described in clause (a). that the farmer and
th e mortgagee agree to.
12
c.8-17.1
(7) On the expiry of the mediation period mentioned in subsection (6), the
mediator may file a mediation certificate with the board sta ting:
(a) that, in his opinion, either party did not participate in mediation in good
faith ; and
(b)
his reasons for that opinion.
(8) Where t.he mediator files a mediation certificate, the certificate is required to
be in the prescribed form.
(9) For the purposes of subsection (7), "not participating in mediation in
good faith" includes:
(a) failure on a regular 01' continuing basis to attend and participate in
mediation sessions wit.hout cause;
(b) failure to provide full information regarding the financial affairs of the
parties in relation to the matter before the mediator;
(c) failure of the mort.gagee to designate a representative to participate in
the mediation with the authority to make binding commitments within:
(i)
10 business days of a mediation session; or
(ii)
any further t.ime that the mediat.or permits;
to fully set.tle, compromise or otherwise mediate t.he matter:
(d) failure to provide debt restructuring alternatives or reasoni:l why
alternatives are unacceptable;
(e)
other similar behaviour which evidences lack of good faith .
(10) A failure to agree to reduce, restructure, refinance, forgive or otherwise
resolve debt is not evidence. in itself, that a party has not participated in mediation
in good faith.
(ll) On expiry of the mediation period mentioned in subsection (6). the board may
meet with the farmer and the mortgagee in order to prepare its report. for the
considerat.ion of the court with respect to granting an order pursuant. to section 11.
(12)
The board shall make a written report and the report:
(a) shall include any matter that the board considers relevant to the
application including, without limiting the generality of the foregoing:
(i)
any mediation certificate mentioned in subsection (7);
(ii) whether the farmer has a reasonable possibility of meeting his
obligations under the mortgage;
(iii) whether t.he farmer is making a sincere and reasonable effort to
meet his obligations under the mortgage :
(iv) whether the farm land which is the subject of the action is a
homestead and whether t.he mortgage respecting that homestead was
entered into prior to the coming into force ofthis Part:
13
c. S-17.1
(v) an explanation, if any, of where the farmer has allocated his
financial resources during the period in which the mortgage has been in
arrears, and why the resources were so allocated;
(b)
may include:
(i)
(ii)
the value, condition and productive capacity of the land:
the state of accounts between the farmer and the mortgagee;
(iii) the earning capacity. income and assets of the farmer and his
spouse;
(iv) the proportion of the income of the farmer and his spouse that is
required to meet his debt obligations;
(v) any general or local agricultural, economic, market or climatic
conditions, including hail, flood, drought, frost or agricultural pests,
commodity prices or costs of production;
(vi) estimates of future commodity prices for the commodities produced
by that farmer and the effect that those prices would have on his income:
(vii) whether the farmer has requested or received financial assistance
from any source;
(viii) whether the farmer would have a reasonable possibility of
meeting that mortgage obligation if it were based on the current fair
market value of the land;
(ix) any conditions and circumstances beyond the control of the farmer
including his inability to market an agricultural commodity.
(13)
The board shall:
(a) complete the report mentioned in subsection (12) prior to expiry of
the 150-day period mentioned in subsection 0): and
(b) on completion of the report mentioned in subsection (12), provide a copy
of the report to:
(i)
the farmer; and
(ii)
the mortgagee.
(14) Where parties extend mediation pursuant to subsection (6) the periods
mentioned in this section are extended by the periods agreed to pursuant to
subsection (6).
(15) The board shall submit its report to the court on notice from the mortgagee
that an application has been made to the court for an order pursuant. to section 11.
(16) Where an application to the court pursuant to section 11 has not been made
wit.hin t.hree years after the day on which a notice of intention pursuant to
subsection (1) was served, whether the notice was served before 01' after the coming
into force of this subsection, t.he notice of intention is deemed to have expired for the
purposes of this section, and no further action may be taken by the mortgagee for
an order pursuant to subsection (1) until a further notice pursuant to sub· section (1)
is served.
1988-89, c.S-li.l, 8.12: 1992. c.i4. 8.5.
I.!
c. S-17.1
Presumption of viability and sincerity
13
Where an application is made for an order pursuant to section 11, the court:
(a)
shall presume that the farmer:
(i) has a reasonable possibility of meeting his obligations under the
mortgage; and
(ii) is making a sincere and reasonable effort to meet his obligations
under the mortgage;
(b) shall consider and shall give primary consideration to a report of the
board made pursuant to section 12;
(c) may consider any conditions and circumstances in addition to the report
of the board that it considers relevant to the application including any matters
in clauses 12(12)(a) and (b);
(d) may make any further inquiries with respect to the application that it
considers necessary, including requiring the parties to furnish particulars
with respect to any matters set out in the board report; and
(e)
may:
(i)
adjourn the application for any period that it considers appropriate; or
(ii) adjourn the application for any period that it considers appropriate
and order that further mediation occm between the farmer and the
mortgagee on any terms and conditions that the court considers
appropriate.
In88-8!), c.S·171. s. I a; HInt, c. 7~. s.G.
Mediator's certificate
14
Notwithstanding sections 11 and 17, where:
(a)
an application for an order is made pursuant to section 11; and
(b) a mediator's certificate is filed pursuant to subsection 12(7) with respect
to the application mentioned in clause (a) indicat.ing that the farmer has not
participated in good faith;
the court. may grant the application.
]()88-8!), c.S·17.1, s.I-1.
Court supervised mandat.ory mediation
15(1)
Where:
(a)
an application for an order is made pursuant to section 11; and
(b) a mediator's certificate is filed pursuant to subsection 12(7) with respect
to the application mentioned in clause (a) indicating that the mortgagee has
not participated in mediation in good faith;
the farmer may request that the court order supervised mandatory mediation.
15
c.8-17.1
(2)
On the request of the farmer pursuant to subsection (1), the court:
(a)
shall order supervised mandatory mediation; and
(b)
where it makes an order described in clause (a):
(i) shall require both parties t,o mediate in good faith for a period to be
determined by the court but not to be more than 60 days; and
(ii) may make any additional orders that it considers necessary to effect
good faith mediation,
(3) Where the court has ordered supervised mandatory mediation pursuant to
subsection (2):
(a) the local registrar shall forward a copy of the order to the manager of
mediation services appointed pursuant to section 8; and
(b) the mortgagee shall not take any further proceeding with respect to the
mortgage debt during the mediation period.
(4) Where the manager of mediation services receives a copy of an order made
pursuant to subsection (2) . he shall designate a mediator for the purposes of this
section,
(5)
Where:
(a) the mediation period determined pursuant to subsection (2) has expired:
and
(b) the court finds the mortgagee has not participated in the mediation in
good faith;
it shall adjourn the mortgagee's application for an order pursuant to section 11 for
an additional period of 180 days,
(6) In determining whether or not the mortgagee participated in good faith
pursuant to subsection (5), the court may consider the factors outlined in
subsection 12(9).
19RR-R9. c,S-17, I. s, I!),
Power of court to award costs
16 Where an application for an order has been made pursuant to section II, the
court may award costs where either party has not pal'ticipated in mediation in good
faith.
1988-89, c,S-li , !.
8,)6,
16
c.8-17.1
Homestead
Where:
17( 1)
(a)
an application for an order has been made pursuant to section 11; and
(b)
the court is satisfied that:
(i)
property which is the subject of the action is a homestead;
(ii) the mortgage relating to the homestead was entered into prior to
the coming into force of this Part; and
(iii) the farmer is making a sincere and reasonable effort to meet his
obligations under the mortgage;
the court shall dismiss the application with respect to the homestead.
(2) Notwithstanding section 20, where an application for an order pursuant to
section 11 is dismissed pursuant to subsection (1) , no further application for an
order pursuant to section 11 or a notice pursuant to section 12 shall be made with
respect to the homestead for a period of three years from the date the application
for an order pursuant to section 11 is dismissed.
(3) Where an application for an order pursuant to section 11 is dismissed
pursuant to this section. no further application may be dismissed pursuant to this
section with respect to that homest.ead.
(4) Notwithstanding subsection (2), a mortgagee may apply to the court for leave
to bring an application for an order pursuant to section 11 if:
(a)
the homestead ceases to be the residence of the farmer ;
(b) there has been a significant deterioration of the property through the
farmer's neglect or wilful act; or
(c) the farmer is no longer making a sincere and reasonable effort to meet his
obligations under the mortgage.
H)88·8!). c.S·I7.!. s.I7.
Burden of proof
18(1) Where an application for an order is made pursuant to section 11, in
addition to any other burden of proof that lies with the mortgagee. the mortgagee
has the burden of proof to establish that:
(a) the farmer has no reasonable possibility of meeting his obligations under
the mortgage: or
(b) the farmer is not making a sincere and reasonable effort to meet his
obligations under the mortgage:
and unless the court is satisfied that the burden of proof has been discharged, it
shall dismiss the application.
(2) For the purpose of subsection 17(1). in addition to any other burden of proof
that lies with the mortgagee, the mortgagee has the burden of proof to establish
that the farmer is not making a sincere and reasonable effort to meet his
obligations under the mortgage.
17
c. S-17.1
(3) For the purpose of subsection 17(4), in addition to any other burden of proof
that lies with the mortgagee, the mortgagee has the burden of proof to establish
that:
(a)
the homestead has ceased to be the residence of the farmer;
(b) there has been a significant deterioration of the property through the
farmer's neglect 01' wilful act; or
(c) the farmer is no longer making a sincere and reasonable effort to meet his
obligations under the mortgage .
J!)SS-R9. c.S-li.1. s. IS.
Grounds for dismissal
19 The court shall dismiss an application for an order pursuant to section 11 if it
is satisfied that it is not just and equitable according to the purpose and spirit of
this Act to make the order.
19S5-89. c.S-I7.I, s.I9.
Further applications
20 Where an application for an order pursuant to section 11 has been dismissed,
no furt.her application pursuant to section 11 or notice pursuant to section 12 shall
be made with respect to the mortgage on that farm land for a period of one year
from the date on which the application is dismissed.
J!)S8-S9. c.S-li.l, 8.20.
Writ of execution
21(1) Notwithstanding The Enforcement of Money Judgments Act or The Land
TUles Act, 2000, no farm land shall be sold by a sheriff under judgment enforcement
against lands unless, on application by the judgment creditor, the court orders that
this subsection does not apply.
(2) Sections 11 to 20 apply lTIutatis mutandis to an application pursuant to
subsection (1),
(3) Where an order is made pursuant to subsection (1) declaring that that
subsection does not apply, leave is not required pursuant to The Enforcement of
l'vfoney JlLdgmen ts Act or The Land Titles Act, 2000.
(4) Notwithstanding section 160.1 of The Land Titles Act, 2000 , where, prior to
December 4. 1984, farm land has been sold under a writ of execution on lands and
whether or not an order confirming the sale has been made:
(a)
no order confirming the sale shall be made; or
(b)
no transfer shall be registered;
as the case may be, pursuant to section 160.1 of The Land Titles Act, 2000, unless,
on application by the judgment creditor, the court orders that this subsection does
not apply and confirms the sale or orders the registration .
(5)
Section 12 applies mutatis mutandis to an application pursuant to subsection (4).
18
c.8-17.1
(6) Where an order is made pursuant to subsection (4) confirming a sale of farm
land , subsections 160.1(2) and (7) of The Land Titles Act, 2000 apply.
(7) In t.his section and section 109 and, for the purposes of an application
pursuant to t.his section, in sections 11 to 20:
(a)
"farm land" incllldes farm land that is subject to judgment enforcement;
(b)
"farmer" includes the owner of farm land;
(c)
"mortgage" includes judgment enforcement: and
(d) "mortgagee" includes t.he judgment creditor under judgment
enforcement.
1988·89. c.S·17.!. 8.21; 1989·90, c.22. ;!. I: 2001.
c.59. ~ . 21: 2010. c.E·9 .22. s.2;11.
Limitation of actions
22(1)
The period:
(a) commencing on the day on which a notice of int.ent. is served pursuant to
subsection 12(1); and
(b) ending on the day that an order is made pursuant to subsection 11(1)
with respect to that application ordering that clause 9(1)(d) or section 10 does
not apply 01' making an order for the purposes of clause 9(1)(f);
is not to be included in calculating the time, pursuant to The Limitations Act or
pursuant to any other law or rule of court., for commencing or continuing any action
with respect to the mort.gage 01' for commencing 01' continuing any action or making
any application for the enforcement. or recovery of any sum of money secured by a
mortgage with respect to farm land.
(2)
The period:
(a)
commencing on December 4. 1984; and
(b)
ending on the date t.hat this Part. comes into force;
is not to be included in calculating the time, pursuant. to The Limitation of Actions
Act or pursuant to any other law or rule of court. for commencing or continuing any
action with respect to the mOI't.gage 01' for commencing 01' continuing any act.ion or
making any application for the enforcement or recovery of any sum of money
secured by a mortgage with respect to farm land.
1988·89. c.S·17 . 1. 8.22: 1989·90. c.22. 8.5: :WO~.
c.L·IG . 1. s.75.
Renewal of mortgages
23 Where, but. for this Part, a mortgagee would have permitted a farmer to renew
a mort.gage on farm land. the mortgagee shall permit. the farmer to renew the
mortgage.
1988·89, c.S·17.1.
~ . 23.
19
c.8-17.1
Confidentiality
24(1) Subject to subsection (2), every member of the board and every other person
involved in administering this Act shall hold all information received by him
pursuant to this Part in confidence.
(2) Information received pursuant to this Part with respect to a farmer, a
mortgagee, an action or an application for an order pursuant to section 11 may be
provided to:
(a) a Farm Debt Review Board established pursuant to the Farm Debt
Review Act (Canada). as amended from time to time:
(b) any person or category of persons authorized in writing by the farmer or
the mortgagee. as the case may be;
(c) any person who is authorized or required by this Act to receive that
information for the purposes of this Act.
1988·89. c.s·17.1 . ~.24.
Action on personal convenant
25(1) In this section, "action" means an action taken by any person, including a
recognized financial institution. with respect to:
(a)
a mortgage of farm land, whether legal or equit.able;
(b)
an agreement for the sale of farm land; or
(c)
a mortgage given as collateral security:
for the purpose of securing the purchase price
land.
(2)
01'
part of the purchase price of farm
Subject to subsections (3) and (4), where an action is commenced:
(a) the right of the mortgagee or vendor to recover the unpaid balance due is
restricted to the land to which the mortgage or agreement relates and to
foreclosure of the mortgage, any judicial sale that the court may order or
cancellation of the agreement. for sale. as the case may be, as well as to any
collateral security including a guarantee;
(b)
no action lies on a covenant for payment:
(i)
contained in the mortgage or agreement. for sale : or
(ii)
collateral to the mortgage or agreement..
(3) The benefit to farmers provided by subsection (2) extends to and includes a
mortgage that:
(a)
secures; or
(b)
is given as collateral security for;
the purchase price or part of the purchase price of the farm land, whether or not the
mortgagee was the vendor of that farm land.
20
c.8-17.1
(4) The benefit to farmers provided by subsections (2) and (3) extends to and
includes:
(a) the personal covenant of the purchaser contained in any assignment by
the vendor of an agreement for sale;
(b) the personal covenant. of the assignee contained in any assignment by the
purchaser of an agreement for sale;
(c) the personal covenant of the mortgagor contained in an agreement
extending a mortgage:
(d) the personal covenant of a purchaser of lands subject to a mortgage, to
assume and pay the mortgage.
(5) This section applies t.o mortgages or agreements for sale executed before, on or
after the coming into force of this Act.
1988·89. c.s·17.!. s.25.
Effect of final order of foreclosure
26(1) Subject to subsections (2) and (3). every final order of foreclosure of a
mortgage on farm land is deemed to operate in full satisfaction of the debt secured
by the mortgage.
(2) Where a final order of foreclosure applies to a mort.gage on farm land that
includes a homestead, the court shall, when granting the final order of foreclosure.
apportion the debt secured by the mortgage between:
(a)
the farm land that is a homestead; and
(b)
the farm land that is not a homestead;
and the debt secured by the farm land that is a homestead is preserved.
(2.1)
Subsection (2) applies whether or not.:
(a) the homestead is included in the farm land that is subject to the final
order of foreclosure; or
(b)
an action has been commenced against the homestead.
(3) Subsection (1) does not apply to that part of the debt which the court finds.
pursuant to subsection (2), to be secured by the homestead, until the time that a
final order of foreclosure is obtained against the homestead and that final order of
foreclosure is not stayed.
198H·8H. c.S·li.!. s.2H; 1989·90. c.22. s.H; l!WJ.
c.5!. s.5; 19!n. c ..')!. 8.;'.
21
c. S-17.1
Right of first refusal
27(1) Notwithstanding any provision in this Act or in any other Act, but subject to
subsection 27.2(22) where, after the coming into force of this Act:
(a)
either:
(i) a farmer voluntarily agrees to transfer his farm land by quit claim 01'
otherwise to a mortgagee; or
(ii) a mortgagee obtains a final order of foreclosure
agreement for sale against farm land; and
01'
cancellation of
(b) the mortgagee subsequently receives a bona fide offer for all or any
portion of his interest in that farm land which he is willing to accept;
the mortgagee shall give to the fanner who voluntarily transferred the farm land
by quit claim or otherwise 01' against whom the final order of foreclosure or
cancellation of agreement for sale issued, written notice of the terms of the offer.
(1.1) Subject to subsection (1.2) , a farmer's right of first refusal pursuant to
subsection (2) is assignable or transferable by devise only to :
(a)
the spouse of the farmer;
(b)
a son or daughter of the farmer;
(c) a parent, grandparent, grandchild, brother, sister, nephew or niece oft.he
farmer:
(d)
a spouse of any of the persons described in clause (b) or (c); or
(e) an agricultural corporation in which the majorit.y of voting shares are
owned by any of the persons described in cla use (a), (b), (c) or (d).
(1.2) A farmer shall not make an assignment pursuant to clause (1.1)(a), (b), (c)
or (d) if the individual to whom the assignment is proposed to be made is a minor.
0.3) A farmer shall provide notice of an assignment pursuant to subsection (1.1)
to the mortgagee within 30 days of the assignment.
0.4)
Where:
(a)
an assignment has occurred pursuant. to subsect.ion (1.1); and
(b) a farmer receives not.ice of the terms of an offer pursuant to subsection (1) before notice of t.he assignment has been given to the mortgagee
pursuant to subsection (l.3);
t.he farmer, as assignor, shall immediately advise t.he assignee of the receipt of the
notice and terms of the offer, and the notice period for that offer shall be deemed to
operate from the date it was received by the farmer.
(1.5) If a farmer described in subsection (1) dies, the personal representative of
the farmer is entitled t.o exercise the rights conferred and shall perform the duties
imposed on the farmer pursuant to this section.
22
c. S-17.1
(2)
A farmer described in subsection (1):
(a) is deemed to have the first right for a period of 15 days after the written
notice has been received by him, to notify the mortgagee of his intention to
exercise his right to purchase all the farm land that is the subject of the offer
and for the purchase price stated in the offer: and
(b) where he notifies the mortgagee of his intention to exercise his right and
on the expiry of the I5-day period mentioned in clause (a). shall provide
within 15 days either:
(i)
the purchase price; or
(ii) an unconditional and unequivocal letter of commitment from a
recognized financial institution to the mortgagee to finance within a
reasonable period of time the farmer's purchase of the farm land that is
the subject of the offer and for the price stated in the offer.
(3)
When a farmer exercises the right of first refusal pursuant to subsection (2):
(a)
the mortgagee is entitled to receive; and
(b)
the farmer shall pay;
the entire purchase price without any obligation to finance all or part of the
purchase price.
(4) Where the farmer does not exercise his right pursuant to subsection (2) and
the offeror does not purchase the land:
(a) the rights of the farmer under this section shall continue with respect to
subsequent offers; and
(b)
subsections (1) to (3) apply to the offers mentioned in clause (a).
(5) Subject to subsection (6), prior to the farmer paying the purchase price, the
farmer and the mortgagee are not to be considered as parties to a binding
agreement for sale.
(6) Subsection (5) does not apply where the mortgagee finances the farmer's
purchase of the farm land.
1~8tP!9 ,
c.7~. s.7.
c.S·li.l, 8.27: 1989·90. c.22, s.7; 1992,
Interpretation of sections 27.11 to 27.9
27.1
In sections 27.11 to 27.9:
(a) "board" means the Farm Tenure Arbitration Board established pursuant
to section 27.11;
23
(b)
c.S-17.1
"farmer":
(i)
means a mortgagor that is:
(A)
a producer who:
(I) is a Canadian citizen 01' is a permanent resident as
defined in the imm.igration Act (Canada);
(II)
is a resident person:
(III) has generated in the immediately preceding three years
an average annual gross income from agricultural sales of at.
least $5,000 from his or her farming operations; and
(IV)
(B)
is at least 18 years of age;
an agricultural corporation:
(I)
the majority of issued voting shares of which are legally
beneficially owned by a producer described in subparagraphs (A) (I) , (II) and (IV); and
01'
(II) that has generated in the immediately preceding three
years an average annual gross income from agricultural sales
of at least $5,000 from its farming operations; or
(C)
a person prescribed in the regulations; and
(ii) includes an assignee named in an assignment made in accordance
with subsection 27.21(1) and a devisee named in a will who is described
in subsection 27.21(1) ;
(c) "growing season" means the period between May 1 and October 31 in
any calendar year:
(d)
"lender" means a mortgagee that is:
a recognized financial institution other than the Farm Credit
Corporation as constituted pursuant to the Farm Credit Act (Canada), as
amended from time to time;
(i)
(ii)
Her Majesty the Queen in right of Saskatchewan; or
(iii)
any other body corporate that is prescribed in the regulations;
(e) "original farmer" means, with respect to specific farm land, the
mortgagor of the farm land who is a farmer, other than a farmer described in
subclause (b)(ii) .
19!n, c.74, s.8: 1994, c.:30, s .:3.
2-l
c.8-17.1
Farm Tenure Arbitration Board
27.11(1) The Farm Tenure Arbitration Board is established consisting of those
persons appointed as members by the Lieutenant Governor in Council:
(a) after consultation with recognized financial institutions and organizations
that represent farmers; and
(b) in accordance with any criteria or procedures for appointment that may
be prescribed in the regulations.
(2)
(3)
The Lieutenant Governor in Council may designate:
(a)
one of the members as chairperson; and
(b)
one or more members as vice-chairpersons.
The board may:
(a) conduct hearings from time to time at any times and places within
Saskatchewan that the board considers expedient;
(b) inspect or authorize any member of the board or any other person to
inspect any farm land that is directly or indirectly involved in an application
before the board ;
(c) appoint or direct any person to inquire int.o and report on any matter that
is before the board .
(3.1) Any three or more members of the board may sit as a panel of the board and
that panel may exercise or perform any powers or duties that the board itself could
exercise or perform.
(8 .2)
Any number of panels may sit concurrently.
(3.3) Two members of a panel constitute a quorum at any hearing conducted by a
panel.
(3.4)
A decision or action of a panel is the decision or action of the board.
(4) Where a hearing is conducted with respect to an application made pursuant to
sections 27.1 to 27.9. the board shall provide the farmer or mortgagor and the
lender with an opportunity to make rE'presentations to the board and to be
represented by counsel before t.he board.
(5) In addition to the powers conferred on them by t.his Act, each member of the
board. including the chairperson, has all the powers conferred on a commission by
sections 11, 15 and 25 of The Public Inqll iries Act, 2013.
(6)
The board may make rules governing:
(a) the practices and procedures of the board and t.he hearings conducted by
the board;
(b)
thE' business of the board.
25
(7)
c. S-17.1
The board may:
(a) employ. engage the services of or retain any officers or other employees
that are required for the proper conduct of its business; and
(b) determine the duties. powers. conditions of employment and remuneration
of officers and employees mentioned in cla use (a).
(8)
The board may:
(a) engage the services of any legal counsel. consultants and technical
advisers that it considers appropriate to assist the board in carrying out its
responsibilities; and
(b) pay any fees and expenses that it considers appropriate to the legal
counsel, consultants and technical advisers engaged pursuant to clause (a).
(9) The Public Seruice Superannuation Act applies to any officers or employees of
the board that are employed pursuant to subsection (7).
19HZ. c.7·1. 8.8; I9fJ:1 , c.51. 8.6; 20 I ;1, c.27. 8.18.
Right to lease
27.2(1) Where. after the coming into force of this section. a mortgagor transfers
his or her farm land by voluntary transfer, quit claim or ot.herwise to a lender, or a
lender obtains a final order of foreclosure 01' cancellation of agreement for sale
against farm land, the lender shall, within the time specified in subsection (6):
(a) if the mortgagor is a farmer, serve the mortgagor and the board with
notice in the prescribed form that the mortgagor is offered the farm land for
lease for the rent and on the terms and conditions set out in the form of lease
provided with the notice;
(b) if the mortgagor is a farmer, serve the mortgagor and the board with
notice in the prescribed form that he or she will not be offered that farm land
for lease; or
(c) serve the mortgagor and the board with notice in the prescribed form
that:
(i) he or she will not be offered the farm land for lease because the
mortgagor is not a farmer within the meaning of clause 27.1(b) or does
not meet the qualifications set out in clauses 27.21(1)(a) to (c); or
(ii) he or she will not be offered for lease any part of the farm land that
exceeds the limits set out in subsection 27,9(2) or (3), as the case may be.
(2) A lender may refuse to offer a lease to a farmer pursuant to subsection (1)
solely on the basis that:
(a) the original farmer or the farmer has dealt with the lender in a dishonest
manner;
(b) the farm land has deteriorated through the absE'nce, neglect or wilful act
of the original fanner;
26
c.8-17.1
SASKATCHEWAN FAHM SECURITY
(c)
the farm land has been abandoned; or
(d) the original farmer had the ability to meet his or her obligations
pursuant to the mortgage but did not do so.
(3) Subject to subsection (14), where a lease has been entered into pursuant to
sections 27.1 to 27.9, the lender shall:
(a) at least 30 days prior to the expiry of the lease. reoffer the farm land to
the farmer for lease. and subsections (4), (5), (7), (9) and (11) to (23) and
sections 27.1,27.11,27.21 and 27.31 to 27.9 apply to the lease entered into
pursuant to the reoffer; and
(b) continue to reoffer the farm land to the farmer for lease pursuant to
clause (a) until the expiry of the periods mentioned in subsection (11) or in
section 27.61. as the case may be.
(4) Notwithstanding anything in sections 27.1 to 27.9 but subject to sub·
section (3). the lender may set the length of an individual lease entered into
pursuant to sections 27.1 to 27.9 between the lender and the farmer.
(5) Notwithstanding anything in sections 27.1 to 27.9, the board shall not amend
or review the length of an individual lease that is set by the lender pursuant to
subsection (4).
(6)
The lender shall comply with subsection (1) within:
(a) 60 days after the day on which the farm land is transferred, the day on
which an application for transfer of title, accompanied by the final order, is
registered in the Land Titles Registry or the date of cancellation of the
agreement for sale: or
(b) any further time that is agreed to in writing by the lender and the
farmer.
(7) Subject to subsection (8). where. on the application of a lender, the farm land
of a mortgagor who is a farmer is sold after the coming into force of this section:
(a)
by way of judicial sale; or
(b)
by a sheriff pursuant to a writ of execution:
a purchaser of the farm land, including the original lender, has the same rights and
obligations pursuant to sections 27.1 to 27.9 with respect to that farmer and that
farm land, as a lender who has obtained a tinal order of foreclosure.
(8) Subsection (7) does not apply to a purchaser of farm land by way of judicial
sale where:
(a)
the farmer has executed a waiver in the prescribed form; and
(b) a certificate of independent legal advice respecting the waiver has been
executed in the prescribed form.
27
(9)
c.8-17.1
Where an offer to lease has been made pursuant to subsection (1) or (3):
(a) the farmer has the right, for a pel'iod of 30 days after the offer is received,
to notify the lender in writing of the farmer's intention to lease all or part of
the farm land that is the subject of the offer; and
(b) the farmer may exercise the right within the period mentioned in
clause (a):
(i) by executing the lease received from the lender and returning it to
the lender. thereby accepting the lease for the stated rent and on the
stated terms and conditions; or
(ii)
by notifying the lender in writing that the farmer intends to:
(A)
lease all
(B)
apply to the board pursuant to clause 27.31(1)(a).
01'
part of the farm land; and
(10) Where a lender serves notice on a farmer 01' mortgagor that no offer will be
made pursuant to subsection 0). the farmer or mortgagor:
(a) may apply to the board, within 30 days after being served, for a review of
the lender's decision not to offer a lease of the farm land; and
(b) shall. within seven days after making an application pursuant to
clause (a), provide the lender with a copy of the application.
(11) Subject to subsections (13) and (14), where a farmer and a lender have
entered into a lease pursuant to sections 27.1 to 27.9, the rights and obligations
created by sections 27.1 to 27.9 apply to the farmer and the lender:
(a) in the case of farm land transferred voluntarily where no notice of
intention has been served pursuant to subsection 12(1), for a period of six
years from the first day on which the original lease pursuant to sections 27.1
to 27.9 is in force ;
(b) in the case offarm land transferred voluntarily after a notice of intention
has been served pursuant to subsection 12( 1), for a period of six years from the
day of service of the notice: or
(c) in the case of farm land transferred pursuant to a final order of
foreclosure 01' in the case of a cancellation of an agreement for sale, for a
period of six years from the day of service of a notice of intention pursuant to
subsection 12(1).
(12) Subject to subsections (13), (14), (21) and (23) and any order of the board, a
lender shall postpone leasing or selling the farm land to a person other than the
farmer until the expiry of the periods mentioned in subsection (11) or in
section 27.61, as the case may be.
28
c.8-17.1
(13) Where the periods mentioned in subsection (11) or in section 27.61 expire
during a growing season:
(a) the period of the lease is extended until the completion of that growing
season ;
(b) the terms and conditions of the expiring lease continue during the period
of extension.
(1-1) Where a lease has been offered or entered into pursuant to sections 27.1
to 27.9, the rights and obligations provided by those sections terminate:
(a) if the farmer fails at any time to exercise his
clause (9)(a) 01' subsection (10);
(b)
01'
her rights pursuant to
if the farm land is sold to the farmer;
(c) on service of notice in the prescribed form by the lender if the farmer fails
to make payment pursuant to the terms of the lease;
(d) on service of notice in the prescribed form by the lender if the farmer
breaches a term or condition of the lease;
(e) on service of notice in the prescribed form by the lender ifthe farmer fails
to comply with an order of the board or the court with respect to a lease of the
farm land: or
(f) on service of notice in the prescribed form by the lender if the farmer
ceases to be a resident person.
(15) Where a termination notice is served by a lender on a farmer pursuant to
clause (14)(c), (d), (e) or (f), the lender shall at the same time serve a copy of the
notice on the board .
(16) Where a part of the farm land is leased t.o a third party or sold to the farmer
as permitted pursuant to sections 27.1 to 27 .9. the farmer's and lender's rights and
obligations pursuant to sections 27.1 to 27.9 continue with respect to the part of the
farm land that is not leased to a third party or sold to the farmer.
(17) Notwithstanding clauses (14)(c) and (d), a farmer is deemed not to have lost
any rights or remedies granted by sections 27.1 to 27.9 where:
(a)
the lender permits t.he farmer to remedy:
(i)
arrears of rent on the lease ; 01'
(ii)
a default on a term or condition of the lease; and
(b) the farmer remedies the arrears of rent or the defa ult , as the case
may be.
(18) An offer made pursuant to subsection (1) or (3) must have printed or written
on it. or attached to it a copy of section 27.31.
29
(19)
c.8-17.1
The lender is deemed to have complied with:
(a) subsection (1) where the farmer and the lender have agreed in writing to
execute a lease pursuant to sections 27.1 to 27.9 prior to the farmer
transferring the farm land to the lender by voluntary transfer. quit claim or
otherwise or the lender obtaining a final order of foreclosure, an order
confirming a judicial sale or a final order for cancellation of an agreement for
sale against the farm land; or
(b) subsection (3) where the farmer and the lender agree in writing to
execute, extend or renew a lease or to execute a lease prior to the period
mentioned in clause (3)(a).
(20) The Landlord and Tenant Act applies to a lease entered into pursuant to
sections 27.1 to 27.9.
(21) No interest based on a certificate of pending litigation or any other interest
may be registered in the Land Titles Registry with respect to any rights or
obligations claimed by a farmer or a mortgagor pursuant to sections 27.1 to 27.9.
(22) Notwithstanding subsection (12), a lender may assign, transfer or sell farm
land to another lender without complying with section 27.
(23) The rights and obligations described in sections 27 to 27.9 apply to a lender to
whom farm land is assigned , transferred or sold pursuant to subsection (22) .
1992. c.'i<-l . 8.8 ; 199R, cAll. 8.10; 2000, c.IA; . I,
8. ,17R.
Assignment of rights
27.21(1) Subject to subsections (2) and (3), a farmer's rights pursuant to
sections 27.1 t.o 27.9 are assignable or transferable by devise only to:
(a)
the spouse of the original farmer, where the spouse:
(i) is a Canadian citizen or is a permanent resident as defined in the
1mm igration Act (Canada):
(ii)
is a resident person; and
(iii)
is at least 18 years of age;
(b) a son or daughter of the original farmer or the spouse of a son or daughter
of the original farmer, where that son, daughter or spouse:
(i) is or will be actively farming the farm land during the period of a
lease entered into pursuant to sections 27.1 to 27 .9;
(ii) is a Canadian citizen or is a permanent resident as defined in the
1m III igration Act (Canada);
(iii)
is a resident person; and
(iv)
is at least 18 years of age; or
(c) an agricultural corporation in which the majority of issued voting shares
are legally or beneficially owned by any of the persons described in clause (a)
or (b) .
30
c.8-17.1
(2) Subject to subsection (3), the rights pursuant to section 27.1 to 27.9 of a farmer
that is an agricultural corporation may be assigned only to an individual who:
(a) is a beneficial or legal owner of issued voting shares in that agricultural
corporation;
(b) is or will be actively farming the farm land during the period of a lease
entered into pursuant to sections 27.1 to 27.9;
(c) is a Canadian citizen or is a permanent resident as defined in the
Immigration Act (Canada);
(d)
is at least 18 years of age.
(3) A farmer shall provide written notice of an assignment pursuant to subsection (1) to the lender within 30 days of the assignment.
(4) A notice pursuant to subsection (3) must set out the name and address of the
assIgnee.
(5)
Where:
(a)
an assignment has been made pursuant to subsection (1); and
(b) a fanner is served with notice pursuant to subsection 27.2(1) or an offer
pursuant to subsection 27.2(3) before notice of the assignment has been given
to the lender pursuant to subsection (3);
the farmer. as assignor, shall immediately advise the assignee of the receipt of the
notice or offer and the contents of the notice or offer, and the time limits for that
notice or offer are deemed to operate from the day on which the notice or offer was
served on the fanner.
(6) Where a lender receives notice of an assignment pursuant to subsection (3)
after the lender has served notice of an offer, the lender may withdraw the offer and
comply with subsection 27.2(1) again within 30 days .
(7) If a farmer or mortgagor dies, the personal representative of the farmer or
mortgagor is entitled to exercise the rights conferred. and shall fulfil the
obligations imposed, on the farmer pursuant to sections 27.1 to 27.9.
(8) Where an original farmer has made an assignment or a devise pursuant to
subsection (1) , the assignee or devisee may make a subsequent assignment or
devise of those rights only to a person to whom the original farmer could have made
an assignment or devise pursuant to subsection (1) or to the original farmer.
(9) Where a farmer has made an assignment pursuant to subsection 0), the
farmer has no more rights or obligations with respect to that farm land pursuant to
sections 27 .1 to 27.9 unless there is a subsequent assignment by the assignee to the
farmer .
(0) On the request of a lender, an assignee shall promptly provide a certificate of
eligibility in the prescribed form to the lender.
31
c. S-17.1
(11) A person shall be deemed to have been assigned the original farmer's rights
pursuant to sections 27.1 to 27 .9 where:
(a) the person is or has been leasing farm land from a lender as a result of an
agreement between the original farmer and a lender to whom sections 27.2
to 27.9 would have applied had the original farmer been leasing the farm land;
and
(b) the person would have been eligible for an assignment from the original
farmer pursuant to this section.
(12)
Subsection (11) applies solely with respect to farm land:
(a) that has been transferred from a mortgagor to a lender by voluntary
transfer, quit claim or otherwise, or by a final order of foreclosure, or where
there has been a cancellation of an agreement for sale between a lender and a
mortgagor;
(b) that has been successively leased to the person mentioned in subsection (11) or to the original farmer since the date of the transfer or
cancellation of an agreement for sale mentioned in clause (a); and
(c) that has not been sold to, has not been leased to, is not subject to an
agreement for sale to, and is not subject to an agreement in writing to lease to
a person other than the person mentioned in subsection (11) at the time this
subsection comes into force .
1992, c. 74 . s.8; 199:1. c.51. s.7.
Application for review of lender's decision
27.3(1) Where an application is made by a farmer or mortgagor pursuant to
subsection 27.2(10), the board shall review the decision of a lender not to offer a
lease.
(2) On a review pursuant to subsection (1) of a decision by a lender pursuant to
clause 27.2(l)(b). the lender must satisfY the board that the farmer is ineligible for
t.he initial offer of a lease on the basis that:
(a) the original farmer or the farmer has dealt with the lender in a dishonest
manner;
(b) the farm land has deteriorated through the absence, neglect or wilful act
of the original fanner;
(c)
the farm land has been abandoned; or
(d) the original farmer had the ability to meet his or her obligations
pursuant to the mortgage but did not do so.
32
c. S-17.1
(3) On a review pursuant to subsection (1) of a decision by a lender pursuant to
clause 27.2(1)(c), t.he mortgagor must. satisfy the board that he or she is eligible for
t.he initial offer of a lease on the basis that:
(a) he or she is a farmer wit.hin t.he meaning of clause 27.1(b) or meet.s the
qualifications set out. in clauses 27.21(l)(a) to (c): or
(b) the farm land does not exceed the limits set out in subsection 27.9(2)
or (3), as the case may be.
(4) On receipt of an application pursuant to subsection (1). the board shall conduct
a hearing into the matter unless the farmer or mortgagor and the lender agree that
the matter may be decided on the basis of written material filed with the board.
(5) Where the board is satisfied that the farmer or mortgagor is ineligible for the
offer of a lease, the board shall, by order, confirm the decision of the lender not to
offer the lease to the farmer or mortgagor.
(6) Where the board is satisfied that a farmer is eligible for the offer of a lease, the
board shall order the farmer and lender to execute a lease on any commercially
reasonable rent, terms and conditions. other than the length of an individual lease,
that the board considers appropriate, and sections 27.1 to 27.9 apply. with any
necessary modification, to that lease.
(7) Where the board makes an order pursuant to subsection (5), or no application
is made by a fanner or mortgagor pursuant. to subsection 27.2(10), the rights and
obligations of the farmer or mortgagor and the lender pursuant to sections 27.1
to 27.9 terminate.
1992, c.74, s.8.
Other applications to board
27.31(1)
Where a lease has been offered pursuant to sections 27,1 to 27.9:
(a) a farmer may apply to the board for a det.ermination. having regard for
the local market and any other considerations that may be prescribed in the
regulations, of what are the commercially reasonable rent., terms and
conditions of the lease. other than the length of an individual lease, where no
agreement. to lease has been reached between the farmer and the lender; and
(b) a lender may apply to the board for a determination of whether, or in
what form, a lease should be granted to a farmer where the farmer intends to
lease part but not all of the farm land offered for lease and the selection of
farm land by the farmer:
(i)
creates a problem of access; or
(ii) unreasonably diminishes the value of any of the farm land that was
offered for lease.
(2) Where a lease has been entered into pursuant to sections 27.1 to 27.9. a farmer
may apply to the board for a determination of whether a lease was properly
terminated pursuant to clause 27.2(14)(c). (d). (e) or (t).
(3) An application pursuant to clause (1)(a) must be made within 45 days after the
offer for lease is served by the lender on the farmer.
33
c. S-17.1
(4) An application pursuant to clause (1)(b) must be made within 15 days after the
day on which the farmer notifies the lender of the farmer's intention to exercise the
right to lease pursuant to clause 27.2(9)(b).
(5) An application pursuant to subsection (2) must be made within 15 days after
notice of the terminating event is served by the lender on the farmer.
(6) Within seven days after making an application pursuant to subsection (1)
or (2) , the farmer or the lender. as the case may be, shall provide the other party
with a copy of the application.
(7) Where an application is received pursuant to subsection (1) or (2). the board
shall conduct a hearing unless the farmer and the lender agree that the matter may
be decided on the basis of written material filed with the board.
(8) On an application pursuant to clause (l)(a). the board shall direct the farmer
and the lender to execute a lease on any commercially reasonable rent, terms and
conditions, other than the length of an individual lease, that t.he board considers
appropriate.
(9) On an application pursuant to clause (1)(b) , the board may make any order
with respect to the application that it considers appropriate, including an order:
(a)
determining whether or in what form a lease should be granted;
(b) directing the farmer and the lender to execute a lease on any commercially
reasonable rent, terms and conditions. other than the lengt.h of an individual
lease, that the board considers appropriate.
(10) On an application pursuant to subsection (2), the board may make any order
with respect to the application that it considers appropriate, including an order:
(a) reinst.ating a lease on any terms and conditions that the board considers
appropriate;
(0) reinstating a farmer's and a lender's rights and obligations pursuant to
sections 27.1 to 27.9;
(c) directing the farmer and the lender to execute a lease on any commercially
reasonable rent, terms and conditions, other than the length of an individual
lease, that the board considers appropriate.
(11) The time periods specified in clauses 27.2(9)(a) and (b) and clause 27.2(lO)(a)
and subsections (3) and (5) shall be calculated from the date of service of the notice
on the farmer or mortgagor pursuant to subsection 27.2(1) or the date of service of
the notice on the board pursuant to subsection 27.2(1), whichever is later.
1992. c.74 . B.B; 1993, c.51 , s.B.
Enforcement of orders
27.4(1) A copy of an order of the board that is certified by the board to be a true
copy may be filed in the office of the local registrar of the court. at the jlldicial centre
nearest to the farm land involved.
(2) An order of the board that is filed pursuant to subsection 0) shall be entered
as a judgment of the court and may be enforced as a judgment of the court.
1992. c.74 , ~ . 8 .
3.t
c.8-17.1
Proceedings in court
27.410) A farmer or mortgagor and a lender are deemed to have agreed to submit
applications pursuant to subsection 27.2(10) or 27.31(1) or (2) to the board.
(2) An application described in subsection (1) may be made instead to the court
where either the lender or the farmer or mortgagor makes an election pursuant to
subsection (3) .
(3) Subject to subsection (4), a lender or a farmer or mortgagor may at any time
elect to make applications pursuant to subsection 27.2(0) or 27 ..310) or (2) to the
court by serving a notice in writing on the other party.
(4) An election pursuant to subsection (.3) may not be made with respect to a
matter that is already the subject of an application to the board.
(5) Subsection (1) does not apply to an application with respect to which an
election has been made pursuant to subsection (3).
(6)
Where an application is made to the court pursuant to this section:
(a) every reference to the board in sections 27.1 and 27.2 to 27.9 is deemed to
be a reference to the court. with any necessary modification: and
(b) the court may make any order with respect to the application that the
board could have made.
1992. c. 71 . 8.8.
Hearings
27.5(1) On receipt of an application pursuant to subsection 27 .2(10) or 27.31(1)
or (2), the board shall fix a day, time and place for a hearing in accordance with this
section.
(2)
For the purposes of subsection (1) , the day fixed for the hearing is to be:
(a)
as soon as is practicable; and
(b) subject to subsection (3), not later than 15 days after the day on which
the application is made.
(3) Where the board does not hear the matter during the period mentioned in
clause (2)(b), the day of the hearing is to be the next available board sitting day.
(4) Unless otherwise agreed by the fanner 01' mortgagor and the lender, the board
shall not hold a hearing with respect to an application unless the board has
provided seven days' written notice to the farmer or mortgagor and the lender of
the day, time and place of the hearing.
(5) Subject to subsections (6) and (7), the board shall make an order in writing
within 15 days after the day on which the hearing commences unless the board does
not have sufficient evidence on which to make an order, and shall immediately
provide copies of the order to the parties.
35
c.8-17.1
(6)
A hearing shall be adjourned to the next available sitting day if the board:
(a)
is unable to hear all of the evidence; and
(b)
does not sit again in the period mentioned in subsection (5).
(7) The time for commencing a hearing or for making an order pursuant to this
section does not include the period of any adjournment agreed to by the part.ies or
ordered by t.he board.
19D2. c.7·1, ;;.8; 1993, c.51,
H.!) .
Finality of proceedings
27.51 (1) Subject to section 27.6, every decision or order of the board pursuant to
sections 27.1 to 27 .9 is final.
(2) No order, decision 01' proceeding of the board shall be questioned, reviewed ,
rest.rained 01' removed by prohibition, injunction, certiorari, mandamus or any
other process or proceeding in any court.
1992, c.I·I, s.8.
Appeal
27.6 With leave of a judge of the Court of Appeal , a farmer, a mortgagor or a
lender may appeal to the Court of Appeal against an order of the board or the court
on a question of law:
(a)
within 30 days after the day on which the order is made; or
(b) within any further period not exceeding .10 days that a judge of the Court
of Appeal may allow on an application that is made within 30 days after the
day on which the order is made.
1!J!)2. C.11, s. s.
Application of sectioll 27.2 to existing leases
27.61(1)
(a)
A lender shall comply with subsection 27.2(1) where:
on the coming into force of this section:
(i) farm land has been transferred from a mortgagor to a lender by
voluntary transfer, quit claim or otherwise 01' by final order of foreclosure;
01'
(ii) there has been a cancellation of an agreement for sale between a
lender and a mortgagor;
(b) the mortgagor is leasing the farm land from the lender during the 1992
growing season; and
(c) the lease-back arrangement mentioned in clause (b) expires while this
section is in force.
36
c.8-17.1
(2) Subject to subsections 27.2(1.3) and (14), where , in compliance with subsection 0), a lender and a farmer enter into a lease pursuant to sections 27.1
to 27.9, the rights and obligations pursuant to sections 27.1 to 27.9 apply to the
farmer and the lender:
(a) where 1992 is the first year of a one-year lease-back arrangement
between the lender and a mortgagor mentioned in subsection (1) who is a
farmer, for a period of five years from the expiry of that one-year lease-back
arrangement; or
(b) where 1992 is the second 01' subsequent year of a lease-back arrangement
between the lender and a mortgagor mentioned in subsection (1) who is a
farmer, for a period of four years from the expiry of that lease-back
arrangement.
(3) Subject to subsections 27.2(13) and (14), where 1992 is the first year of a multiyear lease-back arrangement between the lender and a mortgagor mentioned in
subsection (1) who is a farmer:
(a) the lease is deemed to have been entered into pursuant to subsection 27.2(1); and
(b) the rights and obligations pursuant to sections 27.1 to 27.9 apply to the
farmer and the lender for a period of five years commencing on the expiry of
the first year of the multi-year lease-back arrangement.
Subject to subsections 27.2(13) and (14), where a notice has been served on a
mortgagor by a lender pursuant to subsection 12(1) but no cancellation of an
agreement for sale between the lender and the mortgagor and no transfer of the
farm land from the mortgagor to the lender has occurred prior to the coming into
force of this subsection, the rights created and obligations imposed pursuant to
sections 27.1 to 27.9 apply to that mortgagor and continue to apply to a mortgagor
who is a farmer and to the lender for a period of six years from the later of the
following dates:
(4)
(a)
April 1, 1990; and
(b)
the date of service of the notice.
(5) A lender shall comply with subsection 27.2(1) within 60 days after this
subsection comes into force where:
(a)
between January 8, 1992 and the coming into force of this section:
(i) farm land has been transferred from a mortgagor to the lender by
voluntary transfer, quit claim 01' otherwise or by final order offoreclosure;
or
(ii) there has been a cancellation of an agreement for sale between a
lender and a mortgagor; and
(b) the lender has not leased, sold or agreed in writing to lease or sell the
farm land prior to the coming into force of this section.
37
c. S-17.1
(6) Subject to subsections 27.2(1.'3) and (14), where, in compliance with subsection (5) , a lender and a farmer enter into a lease pursuant to sections 27.1
to 27.9, the rights and obligations pursuant to sections 27.1 to 27.9 apply to the
farmer and the lender for a period of six years from the later of:
(a)
April 1, 1990; and
(b) the date of service of a notice pursuant to subsection 12( 1) or, where no
notice was served:
(i) the date on which the farm land was transferred to the lender by the
farmer; 01'
(ii) the date of the cancellation of the agreement for sale between the
farmer and the lender.
(7) Notwithstanding anything in this section. where a lender has been leasing
farm land to a farmer prior to the coming into force of this section and, as a result of
the operation of sections 27.1 to 27 .9, must continue to lease that farm land to that
farmer. the lender is not required to lease that farm land to the farmer for more
than eight years.
1992. c.7!. B.Il.
Termination of obligation to lease
27.7 A lender is not required to comply with sections 27. 1 to 27.9, other than
for farm land that is already subject to a lease pursuant to those sections. after
June 1, 1997.
UJD2 . c. 74 . s .ll .
Financial assistance
27.71(1) The Minister of Agriculture and Food shall, in accordance with the
regulations, provide financial assistance for the purpose of assisting farmers with a
lease of farm land pursuant to sections 27.1 to 27.9.
(2) Notwithstanding subsection 27.2( 7). a purchaser of farm land pursuant to a
judicial sale who is not a prescribed lender is not entitled to financial assistance
pursuant to this section.
1992. c.7/f,
~ . R.
38
c.S-I7.I
Certain fal'm lands exempted
27.8 Sections 27.1 to 27.9 do not apply to farm land with respect to which a
mortgage is entered into after this section comes into force if the mortgage is made:
(a)
solely for the purpose of purchasing farm land;
(b)
solely for the purpose of new construction or improvements on farm land;
(c)
solely for the purpose of securing new operating moneys;
(d)
solely for the purpose of purchasing assets other than farm land;
(e) solely for the purpose of refinancing the debt obligations of a farmer by a
lender other than the original lender: or
(1)
for any combination of purposes set out in clauses (a) to (e).
1992. c.7,1,
~.R .
Certain farm lands exempted
27.9(1)
In this section:
(a) "family unit" means spouses who are not living separate and apart and
their children, and includes any agricultural corporation of which the
majority of issued voting shares are legally or beneficially owned by any or all
of them and any co-operative that is legally owned by any or all of them;
(b)
"transferred farm land" means farm land that is:
(i) transferred from a farmer to a lender by way of voluntary transfer,
quit claim or otherwise or by a final order of foreclosure;
(ii) the subject of a cancellation of an agreement for sale between a
farmer and a lender; or
(iii) transferred to a purchaser, including a purchaser who is the
original lender, pursuant to a judicial sale.
(2)
Where the area of transferred farm land exceeds the greater of:
(a)
1,280 acres; and
(b) an area with an assessment of $36,000, as of April 1, 1992, based on the
1961-1970 assessment pursuant to section 284 of The Rural Municipality
Act, 1989;
sections 27.1 to 27.8 do not apply to the area of farm land in excess of t.he greater of
t.he areas described in clauses (a) and (b).
(3) Where the total area of the farm land legally or beneficially owned by the
farmer and the transferred farm land exceeds the greater of:
(a)
2,560 acres; and
(b) an area with an assessment of $72,000, as of April 1, 1992, based on the
1961-1970 assessment pursuant to section 284 of The Rural !I-1unicipality
Act, 1989;
sections 27.1 to 27.8 do not apply to the area of farm land in excess of the greater of
the areas described in clauses (a) and (b).
39
c.8-17.1
(4) A farmer to whom subsection (2) 01' (3) applies may select the farm land to
which sections 27.1 to 27.8 shall apply.
(5) Where the lender or a purchaser pursuant to a judicial sale is of the opinion
that the selection of farm land by the farmer pursuant to subsection (4) creates a
problem of access or unreasonably diminishes the value of any of the transfel'l'ed
farm land. the lender or the purchaser may apply to the board pursuant to
clause 27.31(l)(b) to determine whether or in what. form a lease is to be granted.
(6) Notwithstanding subsections (2) and (3) but subject to the regulations. where
two or more farmers are members of the same family unit, the limits set out in
subsections (2) and (3) apply to the family unit and not to each farmer.
(7) Subject to the regulations, where the farmer is an agricultural corporation of
which the majority of issued voting shares are legally or beneficially owned by more
than one family unit, the limits set out in subsections (2) and (3) apply as follows:
(a)
where there are two family units, the limits are doubled; and
(b)
where there are three or more family units. the limits are tripled.
1992. c.71 ..,.8.
Restricted effect of payment or acknowledgment under mortgage
28
No payment made or acknowledgment given to a mortgagee of farm land:
(a)
of; or
(b)
with respect to;
moneys payable under the mortgage has the effect of extending the time within
which an action on the personal covenant for payment on the mortgage must be
commenced by the mortgagee except as against the person by whom the payment is
made or the acknowledgment is given.
1!li'li'l-89 , c.S-17.1. 8,28.
Power of court re certain executions
29(1)
Where:
(a) a judgment is obtained in an action on a personal covenant for payment
in a mortgage offarm land:
(b) a writ of execution has been issued pursuant to the judgment mentioned
in clause (a) and. registered in the Saskatchewan Writ Registry, and
registered as an interest based on the writ against the affected titles in the
Land Titles Registry;
(c) a farmer has made a summary application to the court for an order
pursuant to this section: and
(d) on an application pursuant to clause (c). the court has held any hearing
that it considers proper:
the court may order that the writ of execution mentioned in clause (b) shall not
affect any of the farm land of the farmer that. pursuant to Part V, is free from
seizure by virtue of writs of execution.
40
c.8-17.1
(2)
Where an order is made pursuant to subsection 0):
(a) the local registrar shall promptly submit a discharge of any interest
registered ptlrsuant to clause (l)(b) to the Land Titles Registry, accompanied
by a copy of the order certified by the local registrar; and
(b) on registration of the discharge, the writ of execution has no effect
against the lands of the farmer mentioned in the order.
(3) The farmer mentioned in subsection (1) shall pay to the local registrar the fee
for registering the discharge pursuant to subsection (2), and the local registrar
shall forward that fee, t.ogether with the documents mentioned in clause (2)(a), to
the Land Titles Registry.
1988·89. c.S·17.1. 8.29; 200(), c. ['·5.\. s.li9.
Reserve bid in mortgage sales
30 Where, in an action on
seeks to have:
(a)
01'
relating to a mortgage of farm land, the mortgagee
the farm land under the mortgage sold; and
(b) the proceeds of sale applied in satisfaction of all or any part of the
mortgage indebtedness;
the COtlrt shall not order the sale of farm land unless the sale is subject to tha t upset
price or reserve bid that the court considers proper in the circumstances.
1988·89, c.S·li.l, 8.:}0,
Limits and acknow ledgment of guarantees
31 (1)
I n this section:
(a)
"creditor" includes a mortgagee and a secured party;
(b) "guarantee" means a deed or written agreement whereby an individual
enters into an obligation t.o answer for an act. default, omission or indebtedness
of a farmer in relation to farm land or other assets used in farming, but does
not include guarantees entered into prior to the coming into force of this Act;
(c) "lawyer" means a lawyer who has not. prepared any documents on
behalf of the creditor relating to the transaction and who is not otherwise
interested in the transaction;
(d)
"notary public" means:
(i) with respect to an acknowledgment made in Saskatchewan, a notary
public in and for Saskatchewan;
(ii) with respect to an acknowledgment made in a jurisdiction outside
Saskatchewan, a notary public in and for that jurisdiction;
who has not prepared any documents on behalf of the creditor relating to the
transaction and who is not otherwise interested in the transaction.
41
(2)
c.8-17.1
No guarantee has any effect unlt>ss tht> person entering into the obligation:
(a)
appears before a lawyer or notary pUblic:
(b) acknowledges to the lawyer or notary public that he executed the
guarantee: and
(c) in the presence of the lawyer or notary public signs the certificate in the
prescribed form.
(3) The lawyer or notary public, after being sat.isfied by examination of the person
entering into the obligation that he is aware of the contents of the guarantee and
understands it, shall issue a certificate in the form prescribed in the regulations.
(4) If a notary public issues a certificate pursuant to subsection (3), he shall do so
under his hand and seal.
(5) Every certificate issued pursuant to this section by a lawyer or notary public
shall be:
(a)
attached to: or
(b)
noted on;
the instrument containing the guarantee to which the certificate relates.
(6)
A certificate issued pursuant to this section that is:
(a)
substantially complete and regular on the face of it; and
(b)
accepted in good faith by the creditor;
is admissible in evidence as conclusive proof that this section has been complied
with.
(7) Every guarantee shall specify the maximum financial obligation in sum
certain plus interest from the dat.e of the demand on the guarantor to which the
guarantor is liable.
(8) A guarantee that does not comply with subsection (7) is null and void and of no
effect.
1988-89, c.S-17.1, s.3\.
Mortgagee's inspection fees
32( 1)
Subject to subsection (2), a mortgagee shall:
(a)
bear; and
(b)
not charge to the farmer
01'
the mortgage account;
the fees of the mortgagee for inspection of the mortgaged premises.
(2) Subsect.ion (1) does not apply t.o t.he fees for preliminary inspection following
on an application for a loan 01' renewal or extension of a loan.
19RR-R!). c.S-17.1. s.:l2.
42
c.S-17.1
Mortgagee's collection costs
33(1) In this section, "fees or costs" includes extra-judicial fees, costs, charges,
expenses, allowances or commissions for the time and service of an officer,
inspector or employee of the mortgagee or of any other person appointed for the
purpose:
(a) with respect to the collection of any moneys due and payable under the
mortgage;
(b) by way of commission on or expenses of a collection described in
clause (a); 01'
(c) of getting in the mortgagee's share of the crop grown on the land in
question in any year.
(2) Subject to subsection (4), a mortgagee shall not charge to the farmer or the
mortgage account any fees or costs.
(3) Any provision in any mortgage or agreement whereby the farmer contracts,
agrees or covenants:
(a)
to pay any fees or costs; or
(b) to allow fees or costs to be added to the principal money secured by the
mortgage;
is null and void and of no effect.
(4)
Nothing in this section affects the right of a mortgagee:
(a) to recover costs as between party and party and not on a solicitor client
basis. in an action under the mortgage;
(b)
to recover the costs of distress allowed by The Distress Act;
(c) where grain is taken under The Crop Payments Act without levying a
distress, to recover the actual expenses reasonably incurred in transporting
the grain to the nearest available market;
(d) to charge a collection fee of 5% on the amount collected where. under a
crop lease or agreement. the farmer has failed to deliver to the mortgagee the
mortgagee's share of the crop within 20 days after the time for its delivery.
1!J88·8!J. c.S·17.1. 8.:3:3.
Fixtures
34(1) No machinery, plant. building, improvement or other chattel erected,
placed or put on farm land shall:
(a)
become or be deemed to be a part of the realty; or
(b)
form a part of the security;
by reason only of a declaration, agreement or covenant in any agreement.
43
c.8-17.1
(2)
Any agreement, stipulation or covenant:
(a) that a chattel shall become a part of the realty
security; or
01'
form part of the
(b) having the same or a like effect to an agreement. stipulation or covenant
described in clause (a):
is null and void and of no effect.
191\1\-89. c's-17 . 1,
~.~ . 1.
Payment of ovel-due moneys without notice or bonus
35(1) Where all 01' any portion of the principal money secured by a mortgage of
farm land is not paid when due under the terms of the mortgage , the mortgagee is
not, by reason of the non-payment or as a condition of acceptance of all or any
portion of the overdue moneys, entitled to receive:
(a)
any bonus
01'
other additional sum; or
(b) notice from the fanner of intention to pay all or any portion of the
overdue moneys.
(2) Any agreement, stipulation or covenant that is cont.rary to subsection (1) is
null and void and of no effect.
1988-1;9. c.S-I?I, 8.35.
Only land taxes chargeable to farmer
36(1)
No mortgagee shall:
(a)
charge to the farmer; or
(b)
add to the mol'tgage account;
any taxes, rates or assessments, other than taxes, rates or assessments that are
levied or charged against the farm land and paid by the mortgagee.
(2) Any agreement, stipulation or covenant. that is contrary to subsection (1) is
198H-R9, c's-I'7.l.
~.:lG;
1989-90, c.15 , ~.~.
Life insurance premiums not to form a charge on the farm land
37(1)
No mortgagee shall:
(a)
charge to the farmer; or
(b)
add to the mortgage account:
any premium respecting an insurance policy on the life of the farmer taken by or
assigned to the mortgagee as collateral security for the amount owing under a
mort.gage of farm land.
(2) No premium described in subsection (1) shall form a lien or charge on the farm
land.
(3) Any agreement, stipulation or covenant. that is contrary to subsection (1)
or (2) is null and void and of no effect .
Hl88-8U, c.S-17.1. s.:31.
4-1
c. S-17.1
Application of fire insurance money
380) Notwithstanding any agreement to the contrary, where damage to or
destruction of buildings on farm land by fire has occurred, the farmer may, after
giving the notice required by subsection (3), apply to the court for an order
governing the application of any proceeds received or receivable under an
insurance policy covering the damage or destruction.
(2) On the application mentioned in subsection 0), the court may make an order
directing that the insurance proceeds be applied:
(a)
on account of the mortgage;
(b) towards rebuilding, restoring or repairing the building damaged or
destroyed; or
(c)
towards both of the things mentioned in clauses (a) and (b).
(3) A farmer who makes an application pursuant to subsection (1) shall make the
application:
(a)
within 60 days after the amount of the loss is adjusted; and
(b) on 10 days' notice to the mortgagee of his intention to make the
application.
I fl88·89. c.S·I?!.
~ . 38 .
Hail insurance premiums
In this section and section 40. "farmer" includes a lessee.
39(1)
(2) Subject to subsection (3), where a lessor or a mortgagee insures the crops
grown on the farm land against loss by hail, the lessor or mortgagee shall not
charge the cost of the insurance against the farmer except with the written consent
of the farmer.
(3) The written consent required in subsection (1) is to be given in the year in
which the insurance is effected.
(4) Any agreement. stipulation or covenant that is contrary to subsection (1) is
null and void and of no effect..
(5)
This section does not apply to insurance of crops under
T7~e
Municipal Hail
Insurance Act.
!flR8·89. c.S.!7.!. ,..39.
Restriction of rights under lease option agreement.
40( 1)
Where a farmer:
(a)
has an option of purchasing the farm land; or
(b) is entitled to become the purchaser of the farm land on the performance
of any condition or conditions:
the right of the lessor or his personal representatives or assigns to recover by action
or extra-judicial proceeding any rent payable by the farmer with respect to the farm
land is restricted to the recovery of an amount not exceeding the reasonable rental
value of the farm land. having regard to all of the circumstances between the
farmer and lessor.
45
(2)
c. S-17.1
For the purposes of subsection (1), in the case of:
(a) an action, the court shall determine the reasonable rental value of the
farm land;
(b) an extra-judicial proceeding, any party to the proceeding may apply to
the court for a determination of the reasonable rental value of the farm land
and. on the application. the court shall make that determination.
(3)
Where:
(a) an option of purchasing farm land is sought to be terminated on account
of breach or non-performance of any covenant, agreement. stipulation or
condition contained in the lease; and
(b)
the holder of the option is in possession of the farm land and a farmer;
the farmer may apply to the court and the court may make any order that it
considers just. including granting an extension of the time within which the farmer
may perform his obligations.
(4) For the purpose of an application pursuant subsection (3), the farmer
mentioned in subsection (3) may apply to the court within 30 days of receiving
notice of termination or intention to terminate.
1988·89. c.S-17. 1, HAO.
Application of moneys; more than one debt
41(1)
Where:
(a) a mortgage or security agreement is held as security for more than one
debt; and
(b) moneys are paid by the farmer 01' are realized by the mortgagee or
secured party under the terms of the mortgage or security agreement:
the mortgagee or secured party shall immediately apply the moneys received or
realized in or towards payment of one or more of the debts secured by the mortgage
or security agreement, and. unless the farmer in exercise of any right has given
directions as to the application of those moneys, the mortgagee or secured party
shall notify the farmer of the debt in or towards payment of which the moneys have
been applied.
(2) Any agreement, stipulation or covenant that is contrary to subsection (1) is
1988-89, c.S-17.1. s.4l.
Certain conditions prohibited
42(1) No security agreement or collateral agreement shall contain a provision the
application of which depends merely on the opinion of the secured party that a
circumstance or state of things exists which affects security.
(2) A provision in subsection (1) in an agreement mentioned is null and void and
of no effect.
1988-89, c.S-17 .1,
R.~2 .
46
c.S-17.1
Voluntary mediation
42.1(1) A farmer or a recognized financial institution may make a request for
voluntary mediation t.o the manager of mediation services.
On receiving a request pursuant to subsection (I) and the written consent of
the farmer and the recognized financial institution, the manager of mediation
services shall:
(2)
(a)
designat.e a mediator: and
(b)
supply the mediator with a copy of the request.
(3) On receiving a copy of a request pursuant to subsection (2), the mediator shall
attempt to mediate between the farmer and t.he recognized financial institution.
(4) The manager may charge the farmer and the recognized financial institution
the prescribed fee for mediation services provided pursuant to this section.
1992. c.74, 8.9.
PART III
Home Quarter Protection
43
In this Part:
(a)
"farmer" means a mort.gagor;
(b)
"mortgage" does not include a mortgage:
(i)
financed by a vendor:
(A)
who is an individual; or
(B)
that is a corporation wit.h fewer than 10 shareholders; or
(ii) granted before the coming into force of this Act to the Farm Credit
Corporation constitut.ed by the Farm Credit Act (Canada), as amended
from time to time .
1!)H8·89. c.s·]7.!. s.·I:l.
Restriction on orders affecting homestead
44(1)
The operation of:
(a)
a final order of foreclosure; and
(b)
an order for possession contained in an order mentioned in clause (a);
insofar as it affects a homestead, is stayed for as long as the homestead continues to
be a homestead.
(2) Every final order of foreclosure of a mortgage shall contain a declaration by
the court that the land described in the order:
(a)
is not. a homestead; or
(b)
is a homestead.
APPENDIX A: Summary of Provisions of Part II of the SFSA Which Were Not Raised in
the Courts Below
•
Sections 5 to 8 pertain to the constitution of the Board.
•
Sections 23 to 26 govern the substantive law of farm mortgages. These provisions date
back to legislation passed during the Great Depression.
•
Sections 27 to 27.9 provided farmers whose land was re-possessed by mortgagees after
June 24, 1988 with a right to a lease-back. However, these provisions arose from the
farm crisis of the late 80s and early 90s and were time-limited, so are now effete. See
SFSA, s 27.7: no new lease-back rights accrued after June 1, 1997.
•
Sections 28 to 42 provide a list of miscellaneous rules governing the relationship
between the farmer and the mortgagee, such as conditions which cannot be included in a
mortgage, allocation of insurance money, responsibility for insurance premiums and tax
charges, and so on. Many of these provisions also date back to the farm crisis of the
Great Depression.
•
Section 42.1 provides that a farmer or a financial institution can request voluntary
mediation services from the Government's mediation services office.

Appellant Attorney-General-for

Transcription

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