Protecting Farmer’s Equipment: A Bushel of Rights

Perhaps more than any other profession, farmers on the Prairies are susceptible to financial pressures. Whether it be due to a late winter, a lack or precipitation, family pressures or the present Covid-19 pandemic, the agricultural business carries many risks.

To that end, farmers can be faced with difficult decision as to which bills will be paid, which payments might be missed or deferred and in worst case scenarios, which equipment is to be forfeited. In response, the legislature has recognized the uniqueness of farming and implemented special protection for farmers.

The Farm Debt Mediation Act (“FDMA”)

The federal government recognized that farmers across the country required special protection to deal with their financial pressures. In response to these pressures, and in an effort to provide farmers with the opportunity to reach a compromise with their creditors, the federal government enacted the FMDA.

The main protection afforded by the FDMA is that a farmer’s secured creditors must serve a notice on the farmer indicating their intent to commence proceedings against a farmer (for example filing a Statement of Claim) or to enforce against the farmer’s property. The secured creditor must then wait fifteen business days before taking any further steps.

During the notice period, the farmer is able to apply for farm debt mediation. Applying for mediation prevents your creditors from taking any further steps against the farmer. However, it should be noted that once a farmer applies for mediation, all of his or her creditors receive notification that the farmer has applied for mediation. To a certain extent, all of the farmer’s creditors are now aware that the farmer is in financial trouble.

It should be noted that the FMDA notice provisions apply to both individual farmers and farming corporations.

The Saskatchewan Farm Security Act (“SFSA”)

The legislature in Saskatchewan took these protections one step further in enacting the SFSA. As many farmers are likely aware, a creditor must give a farmer thirty day’s notice before attempting to seize any of the farmer’s equipment. After the farmer receives the notice, they are provided with a variety of rights to either delay or avoid the seizure.

At this point, it is helpful to draw a distinction between purchase money security creditors (“PMSI Creditors”) and general creditors. A PMSI Creditor is a creditor who provided financing for the direct purchase of a piece of farming equipment. For example, if you purchase a tractor from a dealership, and the dealership provides financing to purchase that equipment, the dealership would be a PMSI Creditor.

In the other example, there are general creditors such as banks, or other financers,  who often provide an operating line of credit to farmers. In consideration for providing this funding, banks are often provided with general security agreements over all of a farmers property and/or a mortgage. 

Where a PSMI Creditor serves a notice on a farmer, that farmer is able to apply to the Court to delay seizure. In those instances, the Court will sometimes delay the seizure where it can be demonstrated the farmer can 1) come up with a viable plan to rectify the debt in a reasonable period of time and/or 2) the farmer requires the equipment for farming. While the delay is not a guarantee the Court, and sometimes creditors, will agree to temporary reprieves in order to give the farmer a chance to remedy the arrears. After all, a creditor prefers cash in hand over the hassle of seizing and selling farm equipment. This exemption applies equally to individuals and corporations.

In the other situation, where a farmer is facing bankruptcy and/or cannot pay its general creditors, the general creditor will attempt to seize part or all of its security. In certain  situations, a farmer can apply for an exemption in order to avoid the seizure of its equipment. In order to qualify for this exemption, the farmer must demonstrate it has realistic and viable farming plan going forward and that the farming equipment is reasonably necessary for the proper and efficient operation of the farm. In these exemption applications, the exemption only applies if the equipment is owned by an individual and not a corporation.

As is set out above, there are multiple remedies available to farmers in order to delay or avoid the seizure of equipment. These tactics and remedies allow a farmer to get through the year and hopefully develop a practical solution to satisfy his or her creditors.  

Should you have any further questions about your protections as a farmer, or need advice negotiating with your creditors, please give our office a call to discuss.

Effect of Marriage or 24 Months of Cohabitation on Your Will – Changes to the Wills Act

The law in Saskatchewan used to be that an existing will would be revoked when the will maker married or upon the will maker cohabiting in a spousal relationship continuously for two years, unless there was a declaration in the will that it was made in contemplation of marriage or cohabitation in a spousal relationship.

This meant that if an existing will of a person made prior to getting legally married or cohabiting in a spousal relationship did not have the required declaration stating that it was being made “in contemplation of marriage” or “in contemplation of cohabitation in a spousal relationship” their will would become invalid upon their marriage or cohabitation of 24 months.

This law has now changed. Effective March 16, 2020 these sections of The Wills Act were repealed. This means a will made prior to a marriage or cohabitation of 24 months that occurs on or after March 16, 2020 will remain valid until a new will is created. A declaration in the will that it is made in contemplation of marriage or cohabiting in a spousal relationship is no longer required for it to remain valid upon a marriage or cohabitation of 24 months occurring on or after March 16, 2020.

To be clear, this change is not retroactive. A will that was revoked because of a marriage or cohabitation of 24 months occurring prior to March 16, 2020 will remain revoked.

These changes were enacted concurrently with changes to The Marriage Act which allows family members of a person to apply to court to nullify a marriage if a person did not have the capacity to provide valid consent.

It is important to have a legally valid will and to review it periodically to ensure its provisions are appropriate having regard to your life circumstances at any given point in time. When a person dies without a legally valid will in place they will be found to have died “intestate” and the beneficiaries of their estate will be determined in accordance with The Intestate Succession Act.

It is especially important to have your estate planning documents reviewed when there has been a significant change in your life such as marriage or cohabitation of 24 months so you can make necessary updates. Starting a family, acquiring significant property with your spouse or others, and dealing with added complexities of succession planning if you are an owner of a business are other examples of significant changes in your life warranting a review and update your will.

The lawyers at Robertson Stromberg would be pleased to guide you through these changes and provide you with practical advice for your estate planning. For more information please contact Darlene N. Wingerak at d.wingerak@rslaw.com

This post is for information purposes only and should not be relied on for legal advice. Please contact Robertson Stromberg LLP for legal advice concerning your case.

 

Saskatchewan Introduces Binding Pre-Trial Conferences

The Saskatchewan Court of Queen’s Bench has amended its Rules of Court to provide for Binding Pre-Trial conferences. Typically, pre-trial conferences provide an informal setting for all parties to a civil or family law matter and a Justice of the Court of Queen’s Bench to:

  • identify the facts that are agreed upon or are in dispute;
  • clarify the issues between the parties; and
  • attempt to reach a resolution by way of a voluntary agreement.

With the recent amendment to Saskatchewan’s Rules of Court, parties can now request a binding pre-trial conference at the close of pleadings and when all parties consent.

According to Rule 4-21.2 (2) binding pre-trial conferences are not intended to replace normal negotiations between the parties. The goals of binding pre-trial conferences are to allow the parties to participate in the problem-solving process; to allow settlement options to be presented; and if settlement fails to obtain a biding decision on one or more of the claims or issues in the dispute so as to improve the efficiency of the court system and to save time and costs for all parties.

Following a binding pre-trial conference, the Justice will render a final and binding decision after hearing from both sides if the parties cannot reach their own agreement. The decision cannot be appealed.

The written agreement to participate in a binding pre-trial conference requires the parties to acknowledge and confirm that they have entered into the agreement voluntarily, that they understand the nature and affect of the agreement, that they understand and consent to participating in the binding pre-trial conference process including that, if the parties are unable to reach a settlement, the presiding judge may make a binding decision that may include costs. The agreement will further specify that the parties understand and agree that a binding decision will be deemed a consent order or judgment of the court and cannot be appealed without leave of the presiding judge pursuant to section 38 of the Queen’s Bench Act.

Another difference between binding pre-trial conferences and regular procedure relates to timing of material filing. Binding pre-trial conferences require each party to file pre-trial briefs and expert reports not later than 15 days before the date scheduled for the binding pre-trial conference.

A party may withdraw consent from participating in a binding pre-trial conference up to 10 days before the scheduled meeting.

The introduction of binding pre-trial conferences in Saskatchewan offers litigants an additional tool to resolve disputes without the necessity of trial. Although Saskatchewan is not the first jurisdiction in Canada to offer binding pre-trial conferences, it is certainly at the forefront of this alternative dispute resolution mechanism.

Month: September 2020