Farm Debt Mediation Act (S.C. 1997, c. 21)

Stay of Proceedings

Marginal note:Effect of stay of proceedings

12 Notwithstanding any other law, during any period in which a stay of proceedings is in effect, no creditor of the farmer

• (a) shall enforce any remedy against the property of the farmer; or

• (b) shall commence or continue any proceedings or any action, execution or other proceedings, judicial or extra-judicial, for the recovery of a debt, the realization of any security or the taking of any property of the farmer.

Marginal note:Extension of stay of proceedings

• 13 (1) Where the administrator considers an extension of the thirty day period referred to in paragraph 7(1)(b) to be essential to the formulation of an arrangement between a farmer and the farmer’s creditors, the administrator may, subject to the regulations, extend that period for a maximum of three further periods of thirty days each.

• Marginal note:Interim extension of stay

  (2) Where

  • (a) there is an appeal under section 15 from a decision of the administrator not to extend a stay of proceedings, and

  • (b) the stay of proceedings expires before the appeal is decided,

  the administrator shall, on that expiration, extend the stay of proceedings until the appeal is decided.

• Marginal note:Notice to creditors

  (3) The administrator shall give notice of any extension granted under subsection (1) or (2) to the farmer and to each creditor listed in the farmer’s application.

• Marginal note:Where appeal successful

  (4) Where, pursuant to an Appeal referred to in paragraph (2)(a), the Appeal Board reverses the administrator’s decision, the resulting thirty day extension of the stay of proceedings starts at the expiration of the original stay of proceedings, or at the expiration of the previous thirty day extension thereof, as the case may be.

Marginal note:Obligatory termination of stay of proceedings

• 14 (1) If the administrator determines, pursuant to paragraph 7(1)(c), that the farmer is not eligible to make the application, the administrator shall direct that the stay of proceedings be terminated.

• Marginal note:Discretionary termination of stay of proceedings

  (2) If the administrator is of the opinion, based on information received from the mediator or from any other source, that

  • (a) either the farmer or the majority of the creditors listed in the application

    • (i) refuse to participate in the mediation, or

    • (ii) refuse to continue to participate in good faith in the mediation,

  • (b) the mediation will not result in an arrangement between the farmer and the majority of the creditors listed in the application,

  • (c) the farmer has contravened any directive issued to the farmer by the administrator pursuant to subsection 17(1), or

  • (d) the farmer has, by any act or omission, jeopardized his or her assets or obstructed the guardian in the performance of the guardian’s duties under subsection 17(2),

  the administrator may direct that the stay of proceedings be terminated.

• Marginal note:Notice of termination

  (3) If the administrator directs that a stay of proceedings be terminated under subsection (1) or (2), the administrator shall inform the farmer, all of the creditors listed in the application and the Minister, if the Minister was given notice of the application by the administrator under subparagraph 7(1)(a)(iii).

• Marginal note:When termination takes effect

  (4) Where the administrator directs, pursuant to subsection (1) or (2), that a stay of proceedings be terminated, the termination takes effect

  • (a) on the expiration of the time prescribed for making an appeal under section 15; or

  • (b) where an appeal is made under section 15, if and when the appeal is dismissed.

• Marginal note:Automatic termination of stay of proceedings

  (5) A stay of proceedings terminates on

  • (a) the signing of an arrangement under section 19; or

  • (b) the farmer’s making an assignment under the Bankruptcy and Insolvency Act.

Appeal Boards

Marginal note:Appeal Boards

• 15 (1) The Minister may, in accordance with the regulations, constitute one or more Appeal Boards and designate the members thereof, and may enter into agreements for the services of the members, which agreements may include provision for remuneration and travel and living expenses.

• Marginal note:Appeals

  (2) A farmer or a creditor may, in accordance with the regulations, appeal to an Appeal Board a decision of an administrator relating to

  • (a) the eligibility of a farmer to make the application under paragraph 5(1)(a); or

  • (b) the extension or termination of a stay of proceedings.

• Marginal note:Regulations

  (3) The Appeal Board shall deal with an appeal in accordance with the regulations.

• Marginal note:Stay not affected

  (4) The making of an appeal does not affect a stay of proceedings that is in effect.

• Marginal note:Board’s decision final

  (5) A decision of an Appeal Board is final and is not subject to appeal.

Guardian of Farmer’s Assets

Marginal note:Administrator to appoint guardian

• 16 (1) Where the administrator issues a stay of proceedings under paragraph 7(1)(b), the administrator shall forthwith appoint one of the following persons as guardian of the farmer’s assets:

  • (a) the farmer, where the farmer is qualified to be the guardian; or

  • (b) in any other case,

    • (i) any other qualified person nominated by any secured creditor or secured creditors listed in the application, or

    • (ii) any other qualified person chosen by the administrator.

• Marginal note:Informing farmer and creditors

  (2) The administrator shall forthwith inform the farmer, and all the creditors listed in the application, of the appointment of the guardian.

• Marginal note:Expenses of guardian

  (3) Where the administrator appoints a person referred to in subparagraph (1)(b)(i) as guardian, the expenses of the guardian shall be paid by the secured creditor or secured creditors who nominated that person.

• Marginal note:Expenses of guardian

  (4) Where the administrator appoints a person referred to in subparagraph (1)(b)(ii) as guardian, the expenses of the guardian shall be paid by the administrator.

Marginal note:Duties of guardian

• 17 (1) The administrator may issue directives to the guardian, and the guardian shall comply with any such directives.

• Marginal note:Duties of guardian

  (2) The guardian shall, in addition to the obligation under subsection (1),

  • (a) prepare an inventory of all the assets of the farmer;

  • (b) verify periodically the presence and condition of those assets; and

  • (c) advise the administrator of any act or omission that would jeopardize those assets.

Marginal note:Termination of guardianship

18 The appointment of a guardian under section 16 terminates on the expiration or termination of the stay of proceedings.

Arrangements

Marginal note:Arrangement

19 If a farmer enters into an arrangement with a creditor, or with the Minister, as a result of the mediation, the administrator shall see to its signing by the parties.

New Applications

Marginal note:New applications under paragraph 5(1)(a)

• 20 (1) Notwithstanding any other provision of this Act, where a farmer makes an application under paragraph 5(1)(a), that farmer, or any person who is related to that farmer within the meaning of the regulations, is not entitled to make a new application under that paragraph in respect of substantially the same farming operation for a period of two years after

  • (a) the date on which the first application was made, where the farmer did not enter into an arrangement with the creditors during the stay of proceedings, or

  • (b) the date on which the arrangement was signed, where the farmer entered into an arrangement with the creditors,

  unless, before making the new application, the person seeking to apply obtains the written consent of the administrator.

• Marginal note:New applications under paragraph 5(1)(b)

  (2) Notwithstanding any other provision of this Act, where a farmer makes an application under paragraph 5(1)(b), that farmer, or any person who is related to that farmer within the meaning of the regulations, is not entitled to make a new application under that paragraph in respect of substantially the same farming operation for a period of two years after

  • (a) the date on which the first application was made, where the farmer did not enter into an arrangement with the creditors within the period prescribed for the mediation, or

  • (b) the date on which the arrangement was signed, where the farmer entered into an arrangement with the creditors,

  unless, before making the new application, the person seeking to apply obtains the written consent of the administrator.

Notice by Secured Creditors

Marginal note:Notice by secured creditors

• 21 (1) Every secured creditor who intends to

  • (a) enforce any remedy against the property of a farmer, or

  • (b) commence any proceedings or any action, execution or other proceedings, judicial or extra-judicial, for the recovery of a debt, the realization of any security or the taking of any property of a farmer

  shall give the farmer written notice of the creditor’s intention to do so, and in the notice shall advise the farmer of the right to make an application under section 5.

• Marginal note:Time of notice

  (2) The notice must be given to the farmer and to an administrator, in the form established by the Minister and in accordance with the regulations, at least 15 business days before the doing of any act described in paragraph (1)(a) or (b).

General

Marginal note:Contravention by creditor

• 22 (1) Subject to subsection (2), any act done by a creditor in contravention of section 12 or 21 is null and void, and a farmer affected by such an act may seek appropriate remedies against the creditor in a court of competent jurisdiction.

• Marginal note:Innocent parties protected

  (2) Subsection (1)

  • (a) does not affect the title to property of a person who purchased the property in good faith from the creditor and who was not then related to the creditor within the meaning of the regulations; and

  • (b) does not confer on the farmer any remedy against a person described in paragraph (a).

Marginal note:Disputes

23 Nothing in this Act prevents any party to an arrangement made under this Act from taking a dispute arising therefrom to a court of competent jurisdiction for disposition.

Marginal note:Communication of information

• 24 (1) Except as authorized by subsection (2), no person shall knowingly communicate or knowingly allow to be communicated to any person any information that is obtained under this Act from a farmer, from a farmer’s creditor or from the Minister or knowingly allow any person to inspect or have access to that information.

• Marginal note:Exception

  (2) A person engaged in the administration of this Act, or a mediator or expert referred to in subsection 4(4), may communicate or allow to be communicated, or allow inspection of or access to, the information referred to in subsection (1) to or by any other person engaged in the administration of this Act or any person otherwise legally entitled to the information.

• Marginal note:Protection of witness

  (3) A person engaged in the administration of this Act, or a mediator or expert referred to in subsection 4(4), is not compellable to answer questions concerning the information, or to produce records or other documents containing the information, as evidence in any proceedings not directly concerned with the enforcement or interpretation of this Act or the regulations.