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) - and-
LEMARE LAKE LOGGING LTD. RESPONDENT (Appellant)
- and-
ATTORNEY 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 GOWLING LAFLEUR HENDERSON JUSTICE LLP Constitutional Law Barristers and Solicitors 820 - 1874 Scarth Street 160 Elgin Street, Suite 2600 REGINA SK S4P 4B3 OTTAWA ON KIP lC3
Tel: (306) 787-6307 Tel: (613) 786-8695 Fax: (306) 787-9111 Fax: (613) 788-3509 Email: [email protected] Email: [email protected]
Thomson Irvine D. Lynne Watt Katherine Roy
Counsel for the Attorney General for Ottawa Agents for Attorney General for Saskatchewan Saskatchewan - 2 -
MACPHERSON LESLIE & TYERMAN DENTONS CANADA LLP 1500,410 - 22 nd Avenue East 99 Bank Street, Suite 1420 SASKATOON SK S7K 5T6 OTTAWA ON KIP 1H4
Tel: (306) 975-7136 Tel: (613) 783-9600 Fax: (306) 945-7145 Fax: (613) 783-9690 Email: [email protected] Email: [email protected]
Jeffrey M. Lee, Q.c. K. Scott McLean Kristen MacDonald Corey A. Villeneuve (Law Clerk)
Counsel for amicus curiae Ottawa Agents for the amicus curiae
MINISTRY OF THE ATTORNEY BURKE-ROBERTSON GENERAL OF ONTARIO 441 MacLaren Street Constitutional Law Branch Suite 200 4th Floor - 720 Bay Street OTTA WA ON K2P 2H3 TORONTO ON M7 A 2S9
Tel: (416) 326-0131 Tel: (613) 236-9665 Fax: (416) 326-4015 Fax: (613) 235-4430 Email: [email protected] Email: [email protected]
Michael Dunn Robert E. Houston, Q.c. Daniel Huffaker
Counsel for the Attorney General of Ontario Ottawa Agents for the Attorney General of Ontario
BRITISH COLUMBIA MINISTRY OF BURKE-ROBERTSON JUSTICE 441 MacLaren Street Legal Services Branch Suite 200 P.O. Box 9280 Stn. Provo Govt. OTTAWA ON K2P 2H3 VICTORIA BC V8W 917
Tel: (250) 356-5597 Tel: (613) 236-9665 Fax: (250) 356-9154 Fax: (613) 235-4430 Email: [email protected] Email: [email protected]
Richard Butler Robert E. Houston, Q.C.
Counsel for the Attorney General of British Ottawa Agents for the Attorney General of Columbia Ontario - 3 -
ATTORNEY GENERAL OF ALBERT A GOWLING LAFLEUR HENDERSON 4th Floor, 9833 - 109 Street LLP EDMONTON AB T5K 2E8 160 Elgin Street, Suite 2600 OTTAWA ON KIP lC3
Tel: (780) 422-9221 Tel.: (613) 786-8695 Fax: (780) 425-0307 Fax: (613) 788-3509 Email: [email protected] Email: [email protected]
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. The Legislative Framework 10
(1) Constitutional Basis for the SFSA and the BfA Provisions 10
(2) Outline of the Mediation and Revision Process under Part II of 12 the SFSA
(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
B. The Paramountcy Issue 23
(1) Outline of the Paramountcy Doctrine 23
(2) First Branch: There is No Operational Conflict Between the 26 Mediation and Review Provisions and Section 243
(3) Second Branch: The Mediation and Review Provisions Do Not 29 Frustrate the Federal Purpose
(a) Restrained Approach to Frustration of the Federal Purpose 29 (b) Section 243 is Not a Complete Code and Must Be 32 Interpreted Consistently with Provincial Law (c) Delays for Mediation and Review are Consistent with 34 the Purpose of Section 243 (d) Section 243 is Discretionary 36
(4) Summary 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 C Not Raised in the Courts Below 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.
2 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). - 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.
7 Quebec (Attorney General) v. Canadian Owners and Pilot Association, 2010 SCC 39, [2010] 2 SCR 536, para 66 ["COPA"]. - 5 -
B. Statement Of Facts
12. 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 Notice under The Constitutional Questions Act, 2012, May 30, 2013 (AR, P 112). 9 Fiat of Rothery J., para 18 (AR, pOlO). -6-
appointment 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 Ibid., para 24 (AR, p 014). II Notice of Appeal, September 9, 2013 (AR, pa 141) . 12 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
13 Ibid., para 67 (AR, P 052). 14 Reasons for judgment of the Court of Appeal, para 120 (AR, P 073). 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). - 8 -
Province'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
17 Order of the Chief Justice, November 21,2014 (AR, P 156). 18 E-mail fromFran~oisDesrosiers.ActingCaseAnalyst.October31.2014(AR.p 163) 19 Order of the Chief Justice, March 5, 2015 (AR, P 158). -9-
PART 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) Constitutional Basis for the SFSA and the BIA Provisions
26. 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.
20 Fiat of Rothery J., para 14 CAR, p 009); Reasons for judgment of the Court of Appeal, para 29 CAR, p 037). 21 Constitution Act, 1867, s 92(13). 22 SFSA, s. 3: definitions of "action" and "agreement for sale" for the purposes of Part I\, - 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
extensIve. pre-tna. 1 process. 24
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
23 Constitution Act, 1867, s 92(14). 24 Th e 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." - 12 -
insolvent or bankrupt, the provision is supported by federal jurisdiction over "Bankruptcy and
Insolvency.,,27
(2) Outline of the Mediation and Review Process under Part II of the SFSA
31. 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;
27 Constitution Act, 1867, s 91(21). 28 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). - 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 Board3l 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."
3 7. 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) Other Provisions of Part II Are Not in Issue in this Appeal
39. 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.
33 Notice of Constitutional Question, Sask. QB CAR, p 112). 34 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). - 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 Reasons for judgment of the Court of Appeal, para 68 (AR, P 053). 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
3 licences, which this Court is currently considering in two cases under reserve. ? 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
37 407 ETR Concession Company Limited v. Superintendent ofBankruptcy , see 35696 and Alberta v. Moloney, see 35820; appeals heard and reserved January 15,2015. 38 The Queen's Bench Act, 1998, s 65. - 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
45 to the court for directions. Receivers who act in good faith are immune from civil actions.46
50. 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 court 4 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
43 BIA, s 247. 44 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. - 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) Court-Ordered Receiverships are Always Discretionary
54. 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
48 BG International Limitedv. Canadian Superior Energy Inc., 2009 ABCA 127, para. 16 49 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. - 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) The Federal Farm Debt Mediation Act
59. 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) Outline of the Paramountcy Doctrine
61. 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 IS. unavol·d a bl e. 52
52 Multiple Access Ltd. v. McCutcheon, [1982] 2 SCR 161, P 170. - 24-
64. 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
th 53 Hogg, Constitutional Law a/Canada, 5 ed supplemented, para 16.2. 54 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 ofMontreal; Law Society ofBritish 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 Fiat of Rothery J., para 18 (AR, pOlO). 58 Reasons for judgment of the Court of Appeal, para 42 (AR, P 042). - 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) Restrained Approach to Frustration of the Federal Purpose
79. 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 ofMontreal 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 ofMontreal 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 ofMontreal, this Court considered the frustration of the federal purpose test in three subsequent cases: Mangat v. Law Society ofBritish 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 ofBritish 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 Mangat v Law Society of British Columbia, 2001 SCC 67, [2001] 3 SCR 113. 61 Rothmans, Benson & Hedges Inc. v Saskatchewan, [2005] SCC 13, [2005] 1 SCR 188. 62 Canadian Western Bank v Alberta, 2007 SCC 22, [2007] 2 SCR 3, para 74. 63 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.
64 COPA, para 66. 65 Quebec (Attorney General) v. Canada (Human Resources and Social Developmetn), 20 II SCC 60, [20 II] 3 SCR 635, para 36. - 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 no fault 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) Section 243 is Discretionary
99. 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 ofMontreal. 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.
68 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). - 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 ofMontreal 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 ofMontreal.
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) Summary
107. 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 [1989] 1 SCR 342 at para 16. 70 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 Ibid. at para 31. 72 Ibid. at para 34. - 42-
in Re Opposition by Quebec to a Resolution to amend the Constitution73 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 Re Opposition by Quebec to a Resolution to amend the Constitution, [1982] 2 SCR 793 at p 806. 74 R. v. Laba, [1994] 3 SCR 965. 75 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 Paragraph(s)
Bankruptcy and Insolvency Act, RSC 1985, c B-3 26,30,38,40-78,90- 109 Constitution Act, 1867 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 26-44,53,59,60,69- 78, 101, 107-114 Supreme Court Act, RSC 1985, c S-26, s 40 118, 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 BG International Limited v Canadian Superior Energy Inc., 2009 55 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 44 SCR453 - 47 -
B. CASES - continued Paragrapb(s)
Law Society o/British Columbia v Mangat, 2001 SCC 67, [2001] 2 SCR 67,82 113
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, 67,87,88,89,97 [2013] 3 SCR53
NN Life Insurance Co. o/Canada v 568554 Saskatchewan Ltd., 115 102 Sask R 136, 23 CBR (3d) 209
Quebec (Attorney General) v Canada (Human Resources and Social 86 Development), 2011 SCC 60, [2011] 3 SCR 60
Quebec (Attorney General) v Canadian Owners and Pilot Association, 65,67,74,85 2010 SCC 39, [2010] 2 SCR 536
Re Opposition by Quebec to a Resolut ion to amend the Constitution, 116 [1982] 2 SCR 793
Rothmans, Benson & Hedges Inc. v Saskatchewan, 2005 SCC 13, [2005] 67,82 1 SCR 188
R v Laba, [1994] 3 SCR 965 118
Textron Financial Canada Limited v Chetwynd Motels Ltd., 2010 BCSC 57 477
C. TEXTS
Lloyd W. Houlden, Geoffrey B. Morowctz and Janis P. Sarra, The 2014- 51 2015 Annotated Bankruptcy and Insolvency Act (Toronto: Carswell, 2015)
Peter W. Hogg, Constitutional Law (~lCanada, 5tl1 ed. Supplmented, 64,66 Vol. I (Toronto: Carswell. 2007) - 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 TABC in the Courts Below CAN ADA
CONSOLIDA nON CODIFICA TION
Bankruptcy and Loi sur la faillite et Insolvency Act 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: Publie par Ie ministre de la Justice a I'adresse suivante : http://laws-Iois .j usti ce.gc .ca http://lois-laws .j ust ice.gc .ca Fai/lile el insolvabilile - 16 jevrier 2015
Section Page Article Page 231 Adding creditors after order 236 231 Noms de creanciers ajoutes a I' ordonnance 236 232 Secured claims 237 232 Reclamations garanties 237 233 Enforcement of order in default of debtor 237 233 Execution de I'ordonnance si Ie debiteur fait defaut 237 234 Re-examination of debtor 239 234 Nouvel examen du debiteur 239 235 Disposition of moneys paid into court 240 235 Affectation des montants verses au tribunal 240 236 Oaths 240 236 Serments 240 237 If assignment or bankruptcy order made 240 237 Ordonnance de faillite ou cession 240 238 Appeal 241 238 Appel 241 239 Clerk to report 241 239 Le greffier doit faire rapport 241 239.1 No dismissal, etc., of employees 241 239.1 Interdiction 241 239.2 No discontinuance of public utilities 241 239.2 Interdiction 241 240 Regulations 241 240 Reglements 241 241 Audit of proceedings 242 241 Verification des comptes 242 242 Application of this Part 242 242 Application 242 PART XI PARTIE XI SECURED CREDITORS AND CREANCIERS GARANTIS ET RECEIVERS 242 SEQUESTRES 242 243 Court may appoint receiver 242 243 Nomination d'un sequestre 242 244 Advance notice 244 244 Preavis 244 245 Receiver to give notice 245 245 A vis du sequestre 245 246 Receiver's statement 245 246 Declaration 245 247 Good faith, etc. 246 247 Obligation de diligence 246 248 Powers of court 246 248 Pouvoirs du tribunal 246 249 Receiver may apply to court for 249 Instructions du tribunal 247 directions 247 250 Right to apply to court 247 250 Ordonnance d'un autre tribunal 247 251 Protection of receivers 248 251 Protection du sequestre 248 252 Defence available 248 252 Moyen de defense 248 PART XII PARTIE XII SECURITIES FIRM BANKRUPTCIES 248 FAILLITE DES COURTIERS EN VALEURS MOBILIERES 248 INTERPRETATION 248 DEFINITIONS 248 253 Definitions 248 253 Definitions 248 GENERAL 250 DISPOSITIONS GENERALES 250 254 Application of other provisions 250 254 Autres dispositions applicables 250 255 Conflicts 251 255 Contlit 251 256 Applications re securities firm 251 256 Requete en faillite - courtier en valeurs mobilieres 251 257 Statement of customer account 253 257 Envoi d'un re1eve 253 258 Deferred customers 253 258 Clients responsables 253 259 Trustee powers 253 259 Pouvoirs du syndic 253 260 Determination of cllstomer name 260 Decision du syndic 254 securities 254
15 Bankruptcy and Insolvency - February 16. 2015
(c) designating the "court" for the purpose c) definir ce qu'on entend, pour I'applica of this Part in any province except Manitoba tion de la pn:sente partie, par « tribunal » and Alberta; dans chacune des provinces, sauf Ie Manito ba et l' Alberta; (d) adapting this Part to the court organiza tion or other circumstances of a particular d) adapter la presente partie a l'organisation province; judiciaire ou aux autres circonstances d'une province particuliere; (e) varying, in respect of any province, the classes of debts and amounts thereof to e) modifier, a l'egard de toute province, les which this Part applies; categories de dettes et leurs montants aux quels la presente partie s'applique; (j) changing or prescribing, in respect of any province, the classes of debts to which this J) changer ou prescrire, a I' egard de toute Part does not apply; province, les categories de dettes auxquelles la presente partie ne s'applique pas; if/) respecting the transfer of proceedings to a province other than the province in f I) regir Ie renvoi des procedures dans une which a consolidation order was originally province autre que celie OU I'ordonnance de issued; and fusion a ete rendue; (g) generally, for carrying into effect the g) prendre toute autre mesure d'application purposes and provisions of this Part. 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.
Audit of 241. The accounts of every clerk that relate 241. Les comptes de chaque greffier. relatifs Veri fication des proceedings to proceedings under this Part are subject to au aux procedures prevues par la presente partie, comptes dit in the same manner as if the accounts were sont sujets a verification de la meme maniere the accounts of a provincial officer. que s'ils etaient les comptes d'un fonctionnaire RS , c. 8·3, s. 212. provincial. SR . ch 8·3, art. 212.
Application of 242. (I) The Governor in Council shall, at 242. (I) A la demande du lieutenant-gou Application this Part the request of the lieutenant governor in council verneur en conseil d'une province, Ie gouver of a province, declare, by order, that this Part neur en conseil declare par decret que la pre applies or ceases to apply, as the case may be, sente partie commence a s'appliquer ou cesse in respect of the province. de s'appliquer, selon Ie cas, dans la province en question.
Automatic (2) Subject to an order being made under (2) Sous reserve d'une eventuelle declara Application application subsection (I) declaring that this Part ceases to tion faite en vertu du paragraphe (I) indiquant automatlque apply in respect of a province. if this Part is in qu'elle cesse de s'appliquer a la province en force in the province immediately before that cause, la presente partie s'applique a toute pro subsection comes into force, this Part applies in vince dans laquelle elle etait en vigueur a l' en respect of the province, tree 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.
PART XI PARTIE XI SECURED CREDITORS AND RECEIVERS CREANCIERS GARANTIS ET SEQUESTRES
Court may 243. (I) Subject to subsection (I. I), on ap 243. (I) Sous reserve du paragraphe (I , I), Nomination appoint receiver plication by a secured creditor, a court may ap sur demande d'un creancier garanti, Ie tribunal d'un sequestre point a receiver to do any or all of the follow peut, s'il est convaincu que cela est juste ou op ing if it considers it to be just or convenient to portun, nommer un sequestre qu'il habilite : do so:
242 Faillite et insolvabilite - 16 jevrier 2015
(0) take possession of all or substantially all a) it prendre possession de la totalite ou de of the inventory, accounts receivable or other la quasi-totalite des biens - notamment des property of an insolvent person or bankrupt stocks et comptes a recevoir - qu'une per that was acquired for or used in relation to a sonne insolvable ou un failli a acquis ou uti business carried on by the insolvent person lises dans Ie cadre de ses affaires; or bankrupt; b) a exercer sur ces biens ainsi que sur les (b) exercise any control that the court con affaires de la personne insolvable ou du failli siders advisable over that property and over Ie degre de prise en charge qu'il estime indi the insolvent person's or bankrupt's busi que; ness; or c) a prendre toute autre mesure qu'il estime (c) take any other action that the court con indiquee. siders advisable.
Restriction on ( 1.1) In the case of an insolvent person in re (1.1) Dans Ie cas d'une personne insolvable Restriction appointment of relative a la receiver spect of whose property a notice is to be sent dont les biens sont vises par Ie preavis qui doit nomination d'un under subsection 244( I ), the court may not ap etre donne par Ie creancier garanti aux termes sequestre point a receiver under subsection (I) before the du paragraphe 244( I), Ie tribunal ne peut faire expiry of 10 days after the day on wh ich the se la nomination avant I'expiration d'un delai de cured creditor sends the notice unless dixjours apres I'envoi de ce preavis, a moins : (a) the insolvent person consents to an earli a) que la personne insolvable ne consente, er enforcement under subsection 244(2); or aux termes du paragraphe 244(2), a I'execu tion de la garantie a une date plus rappro (b) the court considers it appropriate to ap point a receiver before then. chee; b) qu'il soit indique, selon lui , de nommer un sequestre a une date plus rapprochee.
Definotion of (2) Subject to subsections (3) and (4), in this (2) Dans la presente partie, mais sous re Definition de "receiver" Part, "receiver" means a person who serve des paragraphes (3) et (4), «sequestre» « sequesrre ») s'entend de toute personne qui: (a) is appointed under subsection (I); or a) soit est nommee en vertu du paragraphe (b) is appointed to take or takes possession ( I ); or control - of all or substantially all of the inventory, accounts receivable or other prop b) soit est nommement habilitee a prendre erty of an insolvent person or bankrupt that - ou a pris - en sa possession ou sous sa was acquired for or used in relation to a busi responsabilite, aux termes d'un contrat ness carried on by the insolvent person or creant une garantie sur des biens, appele bankrupt - under « contrat de garantie » dans la presente par tie, ou aux termes d'une ordonnance rendue (i) an agreement under which property be sous Ie regime de toute autre loi federale ou comes subject to a security (in this Part re ferred to as a "security agreement"), or provinciale prevoyant ou autorisant la nomi nation d' un sequestre ou d'un sequestre-ge (ii) a court order made under another Act rant, la totalite ou la quasi-totalite des biens of Parliament, or an Act of a legislature of - notamment des stocks et comptes a rece a province, that provides for or authorizes voir - qu'une personne insolvable ou un the appointment of a receiver or receiver failli a acquis ou utilises dans Ie cadre de ses manager. affaires.
Definition of (3) For the purposes of subsection 248(2), (3) Pour I'application du paragraphe 248(2), Definition de "receiver" - the definition "receiver" in subsection (2) is to la definition de « sequestre », au paragraphe (2), « sequestre ~) - subsection paragraph. 248(2) be read without reference to paragraph (a) or s'interprete sans egard a I'alinea a) et aux mots 248(2) subparagraph (b)(ii). « ou aux termes d'une ordonnance rendue sous Ie regime de toute autre loi federale ou provin-
243 Bankruptcy and Insolvency - February 16, 2015
ciale prevoyant ou autorisant la nomination d'un sequestre ou d'un sequestre-gerant ».
Trustee to be (4) Only a trustee may be appointed under (4) Seul un syndic peut etre nomme en vertu Syndic appointed subsection (I) or under an agreement or order du paragraphe (I) ou etre habilite aux termes referred to in paragraph (2)(b). d'un contrat ou d'une ordonnance mentionne a I'alinea (2)b).
Place of filing (5) The application is to be filed in a court (5) La demande de nomination est deposee Lieu du depot having jurisdiction in the judicial district of the aupres du tribunal competent dans Ie district ju locality of the debtor. diciaire de la localite du debiteur.
Orders (6) If a receiver is appointed under subsec (6) Le tribunal peut, relativement au paie Ordonnances respecting fees tion (I), the court may make any order respect ment des honoraires et debours du sequestre relatives aux and honoraires et disbursements ing the payment of fees and disbursements of nomme en vertu du paragraphe ( I), rendre toute debours the receiver that it considers proper, including ordonnance qu'il estime indiquee, y compris one that gives the receiver a charge, ranking une ordonnance portant que la reclamation de ahead of any or all of the secured creditors, celui-ci a \'egard de ses honoraires et debours over all or part of the property of the insolvent est garantie par une surete de premier rang sur person or bankrupt in respect of the receiver's tout ou partie des biens de la personne insol claim for fees or disbursements, but the court vable ou du failli, avec preseance sur les recla may not make the order unless it is satisfied mations de tout creancier garanti; Ie tribunal ne that the secured creditors who would be materi peut toutefois declarer que la reclamation du ally affected by the order were given reason sequestre est ainsi garantie que s'il est convain able notice and an opportunity to make repre cu que tous les creanciers garantis auxquels sentations. I'ordonnance pourrait serieusement porter at teinte ont ete avises a cet egard suffisamment a l'avance et se sont vu accorder I'occasion de se faire entendre.
Meanmg of (7) In subsection (6), "disbursements" does (7) Pour I'application du paragraphe (6), ne Sens de "disbursements" not include payments made in the operation of sont pas comptes comme debours les paiements (e debours)) a business of the insolvent person or bankrupt. effectues dans Ie cadre des operations propres 1992,c. 27,s. 89;2005,c. 47,L 115;2007, c. 36, s. 58. aux affaires de la personne insolvable ou du failli. 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 244. (I) Le creancier garanti qui se propose Preavis enforce a security on all or substantially all of de mettre a execution une garantie portant sur la totalite ou la quasi-totalite du stock, des (a) the inventory, comptes recevables ou des autres biens d'une (b) the accounts receivable, or personne insolvable acquis ou utilises dans Ie (c) the other property cadre des affaires de cette demiere doit lui en donner preavis en la forme et de la maniere of an insolvent person that was acquired for, or prescrites. 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 un- (2) Dans les cas ou un preavis est requis aux DeJai der subsection (I), the secured creditor shall termes du paragraphe (I), Ie creancier garanti not enforce the security in respect of which the ne peut, avant I'expiration d'un delai de dix notice is required until the expiry of ten days jours suivant I'envoi du preavis, mettre a exe after sending that notice, unless the insolvent cution la garantie visee par Ie preavis. a moins
244 Faillile el insolvabilile- 16jevrier 2015
person consents to an earlier enforcement of the que la personne insolvable ne consente a une security. execution a une date plus rapprochee.
No ad .. oallce (2 .1) For the purposes of subsection (2), (2.1) Pour I'application du paragraphe (2), Ie consenl consent to earlier enforcement of a security creancier garanti ne peut obtenir Ie consente may not be obtained by a secured creditor prior ment vise par Ie paragraphe avant I'envoi du to the sending of the notice referred to in sub preavis vise au paragraphe ( I ). section ( I ).
Exceplion (3) This section does not apply, or ceases to (3) Le present article ne s'applique pas, ou Non-application apply, in respect ofa secured creditor cesse de s'appliquer, au creancier garanti dont du present article Ie droit de realiser sa garantie ou d'effectuer (a) whose right to realize or otherwise deal toute autre operation, relativement celle-ci est with his security is protected by subsection a 69.1(5) or (6); or protege aux tennes du paragraphe 69.1 (5) ou (6), ou a I'egard de qui a ete levee, aux termes (b) in respect of whom a stay under sections de I'article 69.4, la suspension prevue aux ar 69 to 69.2 has been lifted pursuant to section ticles 69 a69.2. 69.4.
Idem (4) This section does not apply where there (4) Le present article ne s'applique pas dans Idem is a receiver in respect of the insolvent person. les cas ou une personne agit, a titre de se 1992. c. 27, s. 89; 1994, c. 26, s. 9(E). questre, a I'egard de la personne insolvable. 1992, ch. 27, art. 89; 1994, ch. 26, art 9(A).
Receiver to give 245. (1) A receiver shall, as soon as possi 245, (I) Le sequestre doit, dans les Avis du notice ble and not later than ten days after becoming a meilleurs delais et au plus tard dans les dix sequestre receiver, by appointment or otherwise, in re jours suivant la date ou il devient, par nomina spect of property of an insolvent person or a tion ou autrement, sequestre a I'egard de tout bankrupt, send a notice of that fact, in the pre ou partie des biens d'une personne insolvable scribed fonn and manner, to the Superinten ou d'un failli, en donner avis, en la fonne et de dent, accompanied by the prescribed fee, and la maniere prescrites, au surintendant - I'avis devant, dans ce cas, etre accompagne des droits (a) in the case of a bankrupt, to the trustee; prescrits - et : or a) s'agissant d'un failli, au syndic; (b) in the case of an insolvent person, to the insolvent person and to all creditors of the b) s'agissant d'une personne insolvable, a insolvent person that the receiver, after mak celle-ci, a to us ceux de ses creanciers dont il ing reasonable efforts, has ascertained . a pu, en y allant de ses meilleurs efforts, dresser la liste.
Idem (2) A receiver in respect of property of an (2) Le sequestre de tout ou partie des biens Idem insolvent person shall forthwith send notice of d'une personne insolvable est tenu de donner his becoming a receiver to any creditor whose immediatement avis de son entree en fonctions name and address he ascertains after sending a tout creancier dont il prend connaissance des the notice referred to in subsection (1). nom et adresse apres I'envoi de I'avis vise au paragraphe (I ).
Names and (3) An insolvent person shall, forthwith after (3) La personne insolvable doit, des qu'elle Nom el adresse addresses of est avisee de I'entree en fonctions d'un se des creanciers creditors being notified that there is a receiver in respect of any of his property, provide the receiver with questre a regard de tout ou partie de ses biens, the names and addresses of all creditors. foumir a celui-ci la liste des noms et adresses 1992,c. 27,s. 89 de tous ses creanciers. 1992,ch. 27, an. 89
Receiver's 246. (I) A receiver shall, forthwith after 246. (1) Le sequestre doit, des sa prise de Declaration slatement taking possession or control, whichever occurs possession ou, si elle survient plus tot, sa prise first, of property of an insolvent person or a de controle de tout ou partie des biens d'une
245 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 Fixtures Title and Intertlretatioll 35 Payment of overdue moneys without notice 1 Short title 01' bonus 2 I nterpreta lion 36 Onl,l' land taxes chargeahle to farmer a7 Life insurance premiums not to ft)f1n a charge PAWI'Il on the farm land Farm Land Security :1 Interpretation of Part :JS Application of fire insurance money :39 Hail insurance premiums '\ Purpose 5 Farm Land Security I30ard contlllued ·10 f{e~triction of rights under lease option agreement 6 ~;mployee~ 41 Application of moneys; more than one deht 7 Act to apply 42 Cprtain conditions prohibited 1'1 Mediators 12.1 Voluntar.\' mediat.ion 9 Action8 prohibited, continued or discontinued PART III 10 F;xten"ion of time for redemption Home Quarter Protection II No action without court order · ~1 I nterpretati,," of Part 12 Not.ice to boa I'd a nd farmer 4-1 Restriction on orders affecting homestead 13 PreHumption of viabilit.v and sincerity PART IV I I Mediawr's certificate Possession of Equipment 15 Court supervi~ed mandatory mediation ·Iii [nt.erpret.atioll of Part 16 Power of court to award cost~ 46 Vendor's rights restricted 17 Homestead <17 Right to possess ion restricted IR I3urden of proof 18 Notice of intention to take pos~ession 19 Ground~ for dismi8sal ,19 Appointment of representative of deceased farmer 20 Further applicationR 50 AppliCAtion for hearing 21 Writ of execution 51 Duty of local registrar on receipt of application 22 Limitation of action8 52 Conditions respecting possession 23 Renewal of mortgages 53 Orders of the court 2·1 Confidentiality 54 Payment cancels notice 25 Action on personal convenant 55 Rights of farmer if secured party cont.ravenes 26 Effect of final orde r of' foreclosure certain provi~ions 27 Right of firilt refusal 56 Order to preserve impleme nt 27.1 I nterpretation of "ections 27.11 to 27.9 57 Notice of possession of implement 27.11 Farm Tenure Arbitration Board 58 Application for hearing after notice of possession 27.2 Right to lease 59 Action by sl'cured party after possession 27 ,21 Assignment of rights of implement 27.3 Application for review of lender', decision GO Court order poMponement 27.31 Other applications to hoard 6J Costs 27.-1 Enforcement of orders (;2 Restriction on payment to assignee 27,41 Proceedings in court 63 Continuation of notice 27.5 Hearings 64 Power to stay execution
27.51 Finality of proceedings PART V 27.6 Appeal Exemptions 27.61 Application of section 27.2 to l'xisting leases 6",J I nterpretation of Pm·t 27.7 Termination of obligation to lease (j(j Exemptions under executions 27.71 Financial assistance 67 Permitt.ed disposition of cert.ain exempt property 27.R Certain farm lands exempted 68 ~;xempti()ns under security agreement 27.9 Certain farm lands exempted 6!1 Application to court 28 Restricted effect of payment or acknowledgment 70 Exceptions under mortgage 71 Deceased debtor 29 Power of court re certain execution:; 72 I{ii!ht. of selection :~O Re ,~erve hid in mortgage ~al e s 7:3 Ah"conding debtOl'''' al Limits and acknowledgment of guarantpes 7-1 SeparatIOn agr('cmPllts 32 Mortgagee's inspection fees 75 Interc~t in annuity exempt :~3 Mortgagee's collection CO~t.8 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 IS in full time attendance at an educational institution; 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
SASKATCHEWAN FARM SECURITY c.8-17.1
(1') Repealed. 2002, c.5;'), s.3.
(s) Repealed. 2002, c.!);;, s.:l.
(t) Repealed. 19~);l, c.51, s.:l. (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 01' V, as t.he case may be. 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 SASKATCHEWAN FARM SECURITY
PART II Farm Land Security
Interpretation of Part 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
SASKATCHEWAN FARM SECURITY 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) a successor is appointed pursuant to this Act. (3) The Lieutenant Governor in Council may designate: (a) one of the members as chairman.: and (b) one or more members as vice-chairmen. (4) 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 SASKATCHEWAN FARM SECURITY
Mediators 8(1) The minister may appoint persons as mediators for the purpose of this Act. (2) 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
SASKATCHEWAN FARM SECURITY 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 pursuant 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 the mortgagee agree to. 12 c.8-17.1 SASKATCHEWAN FARM SECURITY
(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
SASKATCHEWAN FARM SECURITY 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) the value, condition and productive capacity of the land: (ii) 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 SASKATCHEWAN FARM SECURITY
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
SASKATCHEWAN FARM SECURITY 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 SASKATCHEWAN FARM SECURITY
Homestead 17( 1) Where: (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
SASKATCHEWAN FARM SECURITY 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 SASKATCHEWAN FARM SECURITY
(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
SASKATCHEWAN FARM SECURITY 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 01' part of the purchase price of farm land. (2) 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 SASKATCHEWAN FARM SECURITY
(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
SASKATCHEWAN FARM SECURITY 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 01' cancellation of agreement for sale against farm land; and (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 sub section (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 SASKATCHEWAN FARM SECURITY
(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.S·li.l, 8.27: 1989·90. c.22, s.7; 1992, c.7~. s.7.
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
SASKATCHEWAN FARM SECURITY c.S-17.1
(b) "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) is at least 18 years of age; (B) an agricultural corporation: (I) the majority of issued voting shares of which are legally 01' beneficially owned by a producer described in sub paragraphs (A) (I) , (II) and (IV); and (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: (i) 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; (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 SASKATCHEWAN FARM SECURITY
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) The Lieutenant Governor in Council may designate: (a) one of the members as chairperson; and (b) one or more members as vice-chairpersons. (3) 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
SASKATCHEWAN FARM SECURITY c. S-17.1
(7) 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
SASKATCHEWAN FARM SECURITY c.8-17.1
(9) 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 01' part of the farm land; and (B) apply to the board pursuant to clause 27.31(1)(a).
(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 SASKATCHEWAN FARM SECURITY
(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 01' her rights pursuant to clause (9)(a) 01' subsection (10); (b) 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
SASKATCHEWAN FARM SECURITY c.8-17.1
(19) 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 SASKATCHEWAN FARM SECURITY
(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 sub section (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
SASKATCHEWAN FARM SECURITY 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 sub section (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 SASKATCHEWAN FARM SECURITY
(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
SASKATCHEWAN FARM SECURITY 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 SASKATCHEWAN FARM SECURITY
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
SASKATCHEWAN FARM SECURITY 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 lender shall comply with subsection 27.2(1) where: (a) 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 SASKATCHEWAN FARM SECURITY
(2) Subject to subsections 27.2(1.3) and (14), where, in compliance with sub section 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 multi year 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 sub section 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. (4) 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: (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
SASKATCHEWAN FARM SECURITY c. S-17.1
(6) Subject to subsections 27.2(1.'3) and (14), where, in compliance with sub section (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 SASKATCHEWAN FARM SECURITY
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
SASKATCHEWAN FARM SECURITY 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 SASKATCHEWAN FARM SECURITY
(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 01' relating to a mortgage of farm land, the mortgagee seeks to have: (a) 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
SASKATCHEWAN FARM SECURITY c.8-17.1
(2) 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 SASKATCHEWAN FARM SECURITY
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
SASKATCHEWAN FARM SECURITY c.8-17.1
(2) Any agreement, stipulation or covenant:
(a) that a chattel shall become a part of the realty 01' form part of the security; or (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 null and void and of no effect.
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 SASKATCHEWAN FARM SECURITY
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 39(1) In this section and section 40. "farmer" includes a lessee. (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
SASKATCHEWAN FARM SECURITY c. S-17.1
(2) 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 null and void and of no effect. 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 SASKATCHEWAN FARM SECURITY
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. (2) 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: (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
Interpretation of Part 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.