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Agriculture - Farm Debt Mediation Act (Cda). Bank of Nova Scotia v. Reed
In Bank of Nova Scotia v. Reed (Ont CA, 2025) the Ontario Court of Appeal considered a farm debt situation where summary judgment had been ordered on defaulted credit agreements.
Here the court considers the involvement of the Farm Debt Mediation Act (FDMA), and stays thereunder:[6] On June 9, 2025 this court received correspondence from counsel for the appellant advising that he had just learned the appellant had applied for mediation under the Farm Debt Mediation Act, S.C. 1997, c. 21 (“FDMA”). On the same day, a notice of a stay of proceeding was issued pursuant to s. 7 of the FDMA. The panel invited the parties to make submissions on the impact of this stay on the appeal.
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Farm Debt Mediation Act
[12] Under s. 5 of the FDMA a farmer may apply for a stay of proceedings against all of their creditors and for “mediation between the farmer and all the farmer’s creditors for the purpose of assisting them to reach a mutually acceptable arrangement”. As noted above, the appellant made this application and a stay was granted.
[13] The question is whether this stay applies to this appeal. In our view, it does not. That is because s. 12 of the FDMA makes it clear that a stay granted under s. 5 applies only to proceedings commenced, or continued, by the creditor. While the underlying application was indeed commenced by the respondent, this is the appellant’s appeal. Therefore, the appeal is not stayed.
[14] However, because the judgment under appeal arises from the respondent’s application, the respondent cannot take any steps to enforce it. For that reason, the enforcement provisions in the judgment – paragraphs 3 through 6 – are stayed pending the outcome of the mediation process or a termination of the stay by the administrator under the FDMA, whichever occurs first. . JGB Collateral v. Rochon
In JGB Collateral v. Rochon (Ont CA, 2020) the Court of Appeal describes available proceedings for a farm debtor under the federal Farm Debt Mediation Act:[1] Ten days after the court allowed the respondent’s appeal and granted summary judgment to the respondent, authorizing it to enforce its mortgage and have the property at issue sold, the moving party Donna Rochon advised the respondent, for the first time, that she is a farmer for the purposes of the Farm Debt Mediation Act, S. C. 1997, c. 21 (“the FDMA”).
[2] Under s. 21 of the FDMA, a secured creditor is required to give a statutory notice to a farmer engaged in farming for commercial purposes prior to enforcing a security interest against the farmer’s property, advising the farmer of the right to make an application under s. 5 of the FDMA. Section 5 of the FDMA allows a farmer (as defined in the FDMA) to apply to an administrator for a stay of proceedings by its creditors and a mediation among those creditors, or a review of the farmer’s financial affairs and a mediation among the farmer’s secured creditors. If the secured creditor does not give notice under s. 21, the steps taken by the secured creditor to enforce its security are “null and void”.
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