The Farm Debt Mediation Act affords important rights to farmers whose property is being seized, or whose farms are being foreclosed.
The Act required lenders to serve farmers with a 15 day Farm Debt Mediation Notice informing them of their right to mediation, and imposes a stay of proceedings for a limited period of time to allow farmers and their creditors to reach an agreement through a formal mediation process.
However, one has to fall within the definition of a “farmer” under the Act to have these rights.
In the recent British Columbia Court decision of Wynndel Lumber Sales v. Shukin, a B.C. Judge has held that a widow being foreclosed on a mortgage against her fruit farm was not a “farmer”. Although the widow owned the farm, the farm was being operated by a corporation that was owned 50/50 by the widow and her son. The widow had guaranteed the corporation’s debt, and granted the mortgage as collateral for her guarantee.
The widow did not fall squarely within the definition of a “farmer” because it was the corporation that was farming the land. She could not therefore seek mediation.
You can read more about this case in the January 24, 2013 Agricultural Law NetLetter.