Canada: Agricultural Law NetLetter - Monday, March 21, 2016

HIGHLIGHTS

* The Saskatchewan Court of Appeal has reviewed the Saskatchewan law regarding the partition of jointly owned land in a case in which two brothers held joint ownership of 10 quarter sections of farmland. In Saskatchewan the partition of land is governed by old English statute law - The Partition Act, 1539; The Partition Act 1540 and The Partition Act, 1868. These partition statutes provide that a single co-tenant of land may apply to Court to have land partitioned as of right between or among them or sold unless there is a good reason not to order a sale. The Court of Appeal upheld the decision of a Chambers Judge who awarded 6 quarter sections to one brother and 4 quarter sections to the other brother and concluded that there were no grounds to interfere with the Judge's decision with respect to which brother got the home quarter. The Court did not comment on the Chambers Judge's conclusion that he had no authority under the Partition Acts to divide the home quarter between the two co-owners because the issue had not been raised by either party on appeal. The Chambers Judge also directed one brother to make an equalization payment to the other to account for a difference in property values. The Court of Appeal adjusted the amount of the payment to correct an error. (Raymond v. Raymond, CALN/2016-006, [2016] S.J. No. 60, Saskatchewan Court of Appeal)

* The Ontario Superior Court of Justice, Divisional Court, has upheld the decision of Ontario Agriculture, Food and Rural Affairs Appeal Tribunal that Regulations under the Farm Implements Act (Ontario) which require all Dealership Agreements to contain terms which require distributors to not unreasonably withhold renewal or transfer of Dealership Agreements, have retroactive effect. As a consequence, a renewal provision in a Dealership Agreement between CNH Canada Ltd. and Chesterman Farm Equipment Inc. was held void. The majority of the Divisional Court upheld the  Tribunal's decision that CNH had breached the renewal provisions mandated by the Regulation. Damages were awarded for breach of contract, however the amount awarded was reduced, and the Court concluded that the Tribunal had no jurisdiction to award damages for the value of obsolete tools which had been purchased by the dealer from CNH. The Court also upheld the Tribunal's authority to award pre-judgment interest but directed that it reconsider its award for legal costs. The case contains a thorough discussion of the law with respect to the regulation of the renewal of farm equipment dealership agreements in Ontario. (Chesterman Farm Equipment Inc. v. CNH Canada Ltd., CALN/2016-007, [2016] O.J. No. 1183, Ontario Superior Court of Justice)

NEW CASE LAW

Raymond v. Raymond;

CALN/2016-006,

Full text: [2016] S.J. No. 60;

2016 SKCA 16,

Saskatchewan Court of Appeal,

R.K. Ottenbreit, N.W. Caldwell and J.A. Ryan-Froslie JJ.A.,

February 10, 2016.

Partition and Sale of Farmland -- Saskatchewan Law.

Barry Alfred Raymond ("Barry") appealed to the Saskatchewan Court of Appeal from a decision of a Saskatchewan Court of Queen's Bench Chambers Judge who distributed ownership of 10 quarters of jointly owned farmland between Barry and Barry's brother, Alan Raymond ("Alan"). Alan and his son David Raymond appealed the amount of an equalization judgment in the sum of $42,000.00 in favour of Barry.

Barry's appeal primarily concerned the Chambers Judge's decision to award the historical home quarter to Alan.

Barry and Alan grew up on the historical home quarter.

Alan began residing on the east side of the home quarter in 1976. Barry and his wife live across the road on their own quarter.

For a time Barry and Alan farmed together, however this ended in 1984. Thereafter they each farmed on their own although they continued to farm the 10 quarter sections of land owned as joint owners through an arrangement pursuant to which one or the other of them farmed each quarter. Alan and Barry each held a 50% interest in 8 of the 10 quarter sections. Barry held a 75% interest, and Alan held a 25% interest in 2 quarters, including the historical home quarter.

A partition application was made to a Queen's Bench Judge in Chambers for the purpose of separating the joint ownership interests of Barry and Alan. The application was based on Affidavit evidence and some cross-examination evidence.

On June 3, 2015, the Chambers Judge issued a decision ( 2015 SKQB 164 (CanLII)) which directed that 6 of the 10 quarter sections be transferred to Barry and that 4 of the 10 quarter sections, including the historical home quarter, be transferred to Alan.

The Chambers Judge concluded that he had no power to divide the home quarter by giving 80 acres to Alan and 80 acres to Barry, however no appeal was taken from this decision. The Chambers Judge also directed Alan to pay Barry $42,000.00 in equalization having regard to the appraised values of the land including some buildings on the land.

A number of errors in the initial Judgment were addressed in a July 6, 2015 corrigendum issued by the Chambers Judge.

The issues on appeal primarily dealt with the decision to award the historical home quarter to Alan, and the amount of the equalization payment.

Decision: Caldwell, JA, Ottenbreit and Ryan-Froslie, JJA concurring, dismissed the appeal and allowed the cross-appeal [at para. 38].

Caldwell, JA summarized the law with respect to partition of jointly owned land in Saskatchewan as follows, at para. 11 to 12:

[11] In that they address the partition of land, this appeal and cross-appeal deal with old English statute law, namely, The Partition Act, 1539, 31 Hen VIII, c 1 (UK), The Partition Act, 1540, 32 Hen VIII, c 32 (UK) and The Partition Act, 1868, 31 & 32 Vict, c 40 (UK). This law was received in Saskatchewan by reason of s. 11 of The North-West Territories Act, 1886, SC 1886, c 50 and s. 16 of The Saskatchewan Act, 1905, SC 1905, c 42 (See: Matovich Estate v. Matovich, 2015 SKCA 130 (Can)LII); Blacklaw v. Beverage, 1939 CanLII 158 (SK CA), [1939] 3 WWR 511 (Sask CA); Wagman v Obrigewitsch, 2010 SKQB 84 (CanLII), [2010] 9 WWR 462 (Wagman], varied on other grounds 2011 SKCA 68 (CanLII); Bay v Bay (1984), CanLII 2315 (SK QB), 38 Sask R 101 (QB); and Grunert v Grunert (1960), 1960 CanLII 230 (SK QB), 32 WWR (NS) 509 (Sask QB)). Although long-since repealed and replaced in the United Kingdom and many Canadian provinces, the Imperial partition statutes remain in effect in Saskatchewan and are part of our law.

[12] Originally written in old English, the partition statutes together provide that a single co-tenant of land may apply to court to have the land partitioned as-lf-right as between or among the co-tenants or sold unless there exists a good reason not to order a sale -- rights that did not exist at common law, other than for co-parceners. The two earlier statutes empower a court to  partition lands upon application by a co-tenant; where, The Partition Act, 1868 empowers a court to sell it, "unless it sees good reason to the contrary".

Caldwell, J did not comment on the Chambers Judge's conclusion that he had no authority to partition the home quarter, stating at para. 13:

[13] While the parties' application and this appeal were expressed in terms of The Partition Acts, the matter of the judge's power thereunder to divide the properties in question as between the parties was not canvassed or argued before us and we leave that to another day.

With respect to the Chambers Justice's decision to award the home quarter to Alan, Caldwell, JA observed at para. 18 that this decision was made primarily on the ground that Alan lived and operated a veterinary clinic on the home quarter, stating at para 18:

[18] The judge found the circumstances tipped in favour of Alan receiving title to the historical home quarter, chiefly by reason that he lives and operates a veterinary clinic on that quarter section but also because the judge had ruled he could not "impose a completely different ownership structure on the parties [than] that which is specified by title". That is, he found the powers of partition and sale under The Partition Acts did not empower him to divide the historical home quarter by giving the most easterly 80 acres to Alan the most westerly 80 acres to Barry; and, no appeal was taken from this legal conclusion. On the other hand, although Barry also owns buildings on the historical home quarter, the judge found Barry had actually made limited use of that quarter section. For these reasons, the judge found it more equitable to transfer the historical home quarter to Alan and to require him to compensate Barry for Barry's 3/4 interest in it.

Caldwell, JA concluded, at para. 19 and 20 that this decision was a discretionary one, and that there was no material before the Court to conclude that the Chambers Judge had abused his discretion, erred in principle, or disregarded a material fact or failed to act judicially.

With respect to the amount of the equalization payment, Caldwell, JA held [at para. 30 to 37] that the Chambers Judge had made errors in his calculation. The equalization payment was adjusted from $42,000.00 to $24,250.00.

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