Lemare Lake Logging Ltd. v. 3L Cattle Co., (2015) 477 N.R. 26 (SCC)

• Judge: Abella, Cromwell, Moldaver, Karakatsanis, Wagner, Gascon and Côté, JJ.
• Court: Supreme Court (Canada)
• Case Date: November 13, 2015
• Jurisdiction: Canada (Federal)
• Citations: (2015), 477 N.R. 26 (SCC);2015 SCC 53

Lemare Lake Logging v. 3L Cattle Co. (2015), 477 N.R. 26 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2015] N.R. TBEd. NO.015

Attorney General for Saskatchewan (appellant) v. Lemare Lake Logging Ltd. (respondent) and Attorney General of Ontario and Attorney General of British Columbia (interveners)

(35923; 2015 SCC 53; 2015 CSC 53)

Indexed As: Lemare Lake Logging Ltd. v. 3L Cattle Co.

Supreme Court of Canada

Abella, Cromwell, Moldaver, Karakatsanis, Wagner, Gascon and Côté, JJ.

November 13, 2015.

Summary:

The debtor, a farmer under the Saskatchewan Farm Security Act (SFSA), defaulted on a mortgage given to the creditor. The creditor applied under s. 243(1) of the Bankruptcy and Insolvency Act (BIA) for the appointment of a receiver based on the debtor's insolvency.

The Saskatchewan Court of Queen's Bench, in a judgment reported [2013] Sask.R. Uned. 74, dismissed the application. The provisions of Part II of the SFSA applied (leave to commence action required). The court rejected the submission that the SFSA was constitutionally inoperable because it conflicted with the BIA. Since the SFSA requirements were not met, the court was precluded from entertaining the application. Alternatively, the court would have dismissed the application on the grounds that the debtor was not insolvent and, in any event, it would not have been just or convenient to appoint a receiver. The creditor appealed.

The Saskatchewan Court of Appeal, in a judgment reported (2014), 433 Sask.R. 266; 602 W.A.C. 266, dismissed the appeal. The court held that Part II of the SFSA conflicted with s. 243(1) of the BIA and was constitutionally inoperative where an application was made to appoint a receiver under s. 243(1) (i.e., the provincial legislation frustrated the purpose of the federal legislation). The judge erred in failing to find that the debtor was insolvent, but did not err in finding that it was not just and convenient to appoint a receiver. The Attorney General of Saskatchewan was granted leave to appeal on the issue of whether there was a conflict between the provincial and federal legislation that rendered the requirements of Part II of the SFSA inoperable where a creditor applied under s. 243(1) to appoint a receiver.

The Supreme Court of Canada, Côté, J., dissenting, allowed the appeal. There was no conflict between the SFSA and the BIA where a creditor applied to appoint a receiver under s. 243(1). The creditor, having not complied with the provisions of the SFSA, was properly denied the appointment of a receiver.

Constitutional Law - Topic 3504

Paramountcy of federal statutes - General principles - Requirement of conflict or repugnancy - [See Constitutional Law - Topic 3614 ].

Constitutional Law - Topic 3611

Paramountcy of federal statutes - Overlapping legislation - General - The Supreme Court of Canada stated that "Given the guiding principle of cooperative federalism, paramountcy must be narrowly construed. Whether under the operational conflict or the frustration of federal purpose branches of the paramountcy analysis, courts must take a 'restrained approach', and harmonious interpretations of federal and provincial legislation should be favoured over interpretations that result in incompatibility" - Also, "paramountcy must be applied with restraint. In the absence of 'very clear' statutory language to the contrary, courts should not presume that Parliament intended to 'occupy the field' and render inoperative provincial legislation in relation to the subject" - See paragraphs 21, 27.

Constitutional Law - Topic 3614

Paramountcy of federal statutes - Overlapping legislation - Conflict - What constitutes - A secured creditor applied under s. 243(1) of the Bankruptcy and Insolvency Act (BIA) to appoint a national receiver - Since the debtor was a "farmer" under the Saskatchewan Farm Security Act (SFSA), no action could be commenced against the farmland (including appointment of a receiver) without 150 days' notice and compliance with other conditions such as mandatory review and mediation - This was more restrictive than the BIA requirement of 10 days' notice - The Supreme Court of Canada held that the SFSA did not conflict with the purpose of the BIA and was not constitutionally inoperative under the paramountcy doctrine - The federal power over bankruptcy and insolvency and the provincial power over property and civil rights overlapped - Both were validly enacted - There was no operational conflict, as compliance with both the SFSA and BIA was not impossible - The issue was whether the more restrictive SFSA requirements frustrated the purpose of the federal power in s. 243(1) and was thus inoperable for conflict - The purpose of s. 243(1) was the appointment of a receiver to act nationally without the need to apply in multiple jurisdictions to appoint a receiver - The court rejected the argument that the purpose of s. 243(1) was also to provide a timely remedy to secured creditors without regard to the idiosyncrasies of provincial law - The court stated that "Parliament's purpose of providing bankruptcy courts with the power to appoint a national receiver is not frustrated by the procedural and substantive conditions set out in the provincial legislation. While these conditions require a secured creditor to seek leave before bringing an application for the appointment of a receiver under s. 243 - a process which takes at least 150 days and imposes other procedural and substantive requirements - they do not hinder the purpose of allowing for the appointment of a national receiver. The purpose of permissive federal legislation is not frustrated simply because provincial legislation restricts the scope of that permission" - See paragraphs 15 to 74.

Mortgages - Topic 7744.1

Mortgagee's remedies - General - Statutory suspension (incl. farm land security legislation) - Action by mortgagee - Requirement for leave - [See Constitutional Law - Topic 3614 ].

Cases Noticed:

Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342; 92 N.R. 110; 75 Sask.R. 82, refd to. [para. 13].

Quebec Constitutional Amendment Reference (No. 2); Quebec (Attorney General) v. Canada (Attorney General) et l'Association Canadienne-Française de l'Ontario and Grand Council of the Crees (of Quebec), [1982] 2 S.C.R. 793; 45 N.R. 317, refd to. [para. 13].

R. v. Johnson et al., [1994] 3 S.C.R. 965; 174 N.R. 321; 76 O.A.C. 241, refd to. [para. 13].

R. v. Laba - see R. v. Johnson et al.

Rothmans, Benson & Hedges Inc. v. Saskatchewan et al., [2005] 1 S.C.R. 188; 331 N.R. 116; 257 Sask.R. 171; 342 W.A.C. 171, refd to. [para. 15].

Reference Re Remuneration of Judges of the Provincial Court (P.E.I.), [1997] 3 S.C.R. 3; 217 N.R. 1; 206 A.R. 1; 156 W.A.C. 1; 121 Man.R.(2d) 1; 158 W.A.C. 1; 156 Nfld. & P.E.I.R. 1; 483 A.P.R. 1, refd to. [para. 15].

William v. British Columbia et al., [2014] 2 S.C.R. 257; 459 N.R. 287; 356 B.C.A.C. 1; 610 W.A.C. 1; 2014 SCC 44, refd to. [para. 16].

Tsilhqot'in Nation v. British Columbia - see William v. British Columbia et al.

Quebec (Attorney General) v. Canadian Owners and Pilots Association, [2010] 2 S.C.R. 536; 407 N.R. 102; 2010 SCC 39, refd to. [para. 17].

Quebec (Attorney General) v. Canada (Minister of Human Resources and Social Development) et al., [2011] 3 S.C.R. 635; 424 N.R. 198; 2011 SCC 60, refd to. [para. 17].

Ryan Estate et al. v. Universal Marine Ltd. et al., [2013] 3 S.C.R. 53; 447 N.R. 1; 339 Nfld. & P.E.I.R. 312; 1054 A.P.R. 312; 2013 SCC 44, refd to. [para. 17].

Bank of Montreal v. Marcotte et al., [2014] 2 S.C.R. 725; 462 N.R. 202; 2014 SCC 55, refd to. [para. 17].

Multiple Access Ltd. v. McCutcheon et al., [1982] 2 S.C.R. 161; 44 N.R. 181, refd to. [para. 18].

M & D Farm Ltd. et al. v. Manitoba Agricultural Credit Corp., [1999] 2 S.C.R. 961; 245 N.R. 165; 138 Man.R.(2d) 161; 202 W.A.C. 161, refd to. [para. 18].

Law Society of British Columbia v. Mangat, [2001] 3 S.C.R. 113; 276 N.R. 339; 157 B.C.A.C. 161; 256 W.A.C. 161; 2001 SCC 67, refd to. [para. 19].

Jabour v. Law Society of British Columbia et al., [1982] 2 S.C.R. 307; 43 N.R. 451, refd to. [para. 20].

Reference Re Securities Act, [2011] 3 S.C.R. 837; 424 N.R. 1; 519 A.R. 63; 539 W.A.C. 63; 2011 SCC 66, refd to. [para. 21].

Ontario Public Service Employees Union et al. v. Ontario (Attorney General) et al., [1987] 2 S.C.R. 2; 77 N.R. 321; 23 O.A.C. 161, refd to. [para. 21].

City National Leasing Ltd. v. General Motors of Canada Ltd., [1989] 1 S.C.R. 641; 93 N.R. 326; 32 O.A.C. 332, refd to. [para. 22].

Westbank First Nation v. British Columbia Hydro and Power Authority, [1999] 3 S.C.R. 134; 246 N.R. 201; 129 B.C.A.C. 1; 210 W.A.C. 1, refd to. [para. 22].

Quebec (Attorney General) v. Lacombe et al., [2010] 2 S.C.R. 453; 407 N.R. 1; 2010 SCC 38, refd to. [para. 22].

Quebec (Attorney General) v. Canada (Attorney General) et al., [2015] 1 S.C.R. 693; 469 N.R. 97; 2015 SCC 14, refd to. [para. 23].

114957 Canada ltée (Spraytech, Société d'arrosage) et al. v. Hudson (Town), [2001] 2 S.C.R. 241; 271 N.R. 201; 2001 SCC 40, refd to. [para. 25].

Irwin Toy Ltd. v. Québec (Procureur général), [1989] 1 S.C.R. 927; 94 N.R. 167; 24 Q.A.C. 2, refd to. [para. 25].

Burrardview Neighbourhood Association v. Vancouver (City) et al., [2007] 2 S.C.R. 86; 362 N.R. 208; 241 B.C.A.C. 1; 399 W.A.C. 1, refd to. [para. 26].

British Columbia (Attorney General) v. Lafarge Canada Inc. - see Burrardview Neighbourhood Association v. Vancouver (City) et al.

Leroy (Ted) Trucking Ltd. et al., Re, [2010] 3 S.C.R. 379; 409 N.R. 201; 296 B.C.A.C. 1; 503 W.A.C. 1; 2010 SCC 60, refd to. [para. 41].

Century Services Inc. v. Canada (Attorney General) - see Leroy (Ted) Trucking Ltd. et al., Re.

Cadillac Fairview Inc., Re (1995), 30 C.B.R.(3d) 17 (Ont. Gen. Div.), refd to. [para. 41].

Edgewater Casino Inc. et al., Re (2009), 265 B.C.A.C. 274; 446 W.A.C. 274 (C.A.), refd to. [para. 41].

Transglobal Communications Group Inc., Re (2009), 473 A.R. 167; 4 Alta. L.R.(5th) 157 (Q.B.), refd to. [para. 41].

Bank of Montreal v. Hall, [1990] 1 S.C.R. 121; 104 N.R. 110; 82 Sask.R. 120, dist. [para. 48].

GMAC Commercial Credit Corp. - Canada v. T.C.T. Logistics Inc. et al., [2006] 2 S.C.R. 123; 351 N.R. 326; 215 O.A.C. 313; 2006 SCC 35, refd to. [para. 49].

Gentra Canada Investments Inc. v. Lehndorff United Properties Canada et al. (1995), 169 A.R. 138; 97 W.A.C. 138 (C.A.), refd to. [para. 51].

Canadian Western Bank et al. v. Alberta, [2007] 2 S.C.R. 3; 362 N.R. 111; 409 A.R. 207; 402 W.A.C. 207; 2007 SCC 22, refd to. [para. 77].

Railside Developments Ltd. (Receivership), Re (2010), 286 N.S.R.(2d) 285; 909 A.P.R. 285; 62 C.B.R.(5th) 193; 2010 NSSC 13, refd to. [para. 92].

Jacob's Hold Inc. v. Canadian Imperial Bank of Commerce (2000), 52 O.R. (3d) 776 (Sup. Ct.), refd to. [para. 106].

Statutes Noticed:

Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, sect. 72(1) [para. 49]; sect. 243(1) [para. 29]; sect. 243(1.1) [para. 31].

Counsel:

Thomson Irvine and Katherine Roy, for the appellant;

No one appeared for the respondent;

Michael S. Dunn and Daniel Huffaker, for the intervener, the Attorney General of Ontario;

Written submissions only by R. Richard M. Butler and Jean M. Walters, for the intervener, the Attorney General of British Columbia;

Jeffrey M. Lee, Q.C., and Kristen MacDonald, for the amicus curiae.

Solicitors of Record:

Attorney General for Saskatchewan, Regina, Saskatchewan, for the appellant;

Attorney General of Ontario, Toronto, Ontario, for the intervener, the Attorney General of Ontario;

Attorney General of British Columbia, Victoria, British Columbia, for the intervener, the Attorney General of British Columbia;

MacPherson Leslie & Tyerman, Saskatoon, Saskatchewan, appointed by the Court as amicus curiae.

This appeal was heard on May 21, 2015, before Abella, Cromwell, Moldaver, Karakatsanis, Wagner, Gascon and Côté, JJ., of the Supreme Court of Canada.

On November 13, 2015, the judgment of the Court was delivered in both official languages and the following opinions were filed:

Abella and Gascon, JJ. (Cromwell, Moldaver, Karakatsanis and Wagner, JJ., concurring) - see paragraphs 1 to 74;

Côté, J., dissenting - see paragraphs 75 to 129.