March 4, 1935

UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEARMAN:

At what point in the

proceedings does a debtor making a proposal come within the provisions of the bankruptcy laiw and void his protection under any provincial legislation? As I understand it the bankruptcy law itself applies only after the proposal has been confirmed and filed with the court. Up to that time, and even after the proposal has been made but while it is still under consideration, any provincial legislation still would be available to the debtor, would it not? In Alberta they have legislation which prevents court proceedings unless and until the creditor has received power from the board to proceed in the courts. I assume that legislation still would be available up to the time the proposal was accepted and confirmed, so that the man making the proposal would not have voided his protection under the provincial law until his proposal under this act was confirmed and filed in the courts.

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

The creditor would have

to-

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UFA
CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

My hon. friend is dealing

more particularly with the question of bankruptcy?

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UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEARMAN:

I was dealing with this question. Until the proposal has been accepted and filed in the courts the applicant, the man making the proposal, does not come specifically under this law, or does he? He has not voided the protection he already has under the provincial law until the proposal has been confirmed by the court?

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

As I understand it, the

moment a proposal is filed with an official receiver under the act, from that moment the stay of proceedings becomes effective.

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UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEARMAN:

Yes, but I was referring to the other point, that apart from anything in this act providing for a stay of proceedings in some provinces the debtors

Farmers' Creditors Act

are now under the protection of provincial legislation under which proceedings can take place only by permission of certain courts or tribunals. As I understand it the protection of that provincial legislation is not voided by the debtor until the proposal has been agreed to, confirmed and filed in the courts as a completed proposal. Is that a fact?

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

If the board of review should decline to formulate a proposal, to sanction a proposal or to make a proposal of their own, in that event it is competent for the debtor to apply to the provincial debt adjustment board. But if the board of review takes action then, as I understand it, it is not necessary to invoke the provincial statute.

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UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEARMAN:

In my province, for

example, the creditor himself must make application to the provincial debt adjustment officials for the right to proceed in court. In other words all1 farm debtors are protected against proceedings except under special permission granted to the creditors. My question was whether this provincial protection remained until such time as the proposal was not only made but was accepted and filed in the courts.

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

I may not entirely apprehend the position taken by my hon. friend from Red Deer, but as I understand it if a proposal has been filed before an official receiver; if there is not a settlement made and the matter goes before the board of review, then until the board has taken aclion the matter under the Farmers' Creditors Arrangement Act is one for the board of review to deal with. Provincial legislation cannot intervene, and the debtor will come under the operations of the provincial debt adjustment board only after such time as the board of review refuses to bring down a finding approving of the proposal or submitting a proposal of its own.

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UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEARMAN:

Then there is a really an interim. Until the debtor makes a proposal and files it with the district official he is of course, as at present, in those provinces where there is provincial legislation, under such provincial legislation up to that point.

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CON
UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEARMAN:

Then after the proposal has been filed he is protected, except in breach of the provisions of the proposal then filed under certain conditions, that is, if the breach has been due to something within his own control-

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CON
UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEARMAN:

But after the proposal has been filed with the official receiver and prior to the time it is confirmed and filed with the courts, when it is binding, that is the interim of which I was speaking. During that interim, as I understand it, he is not under the protection of the provincial legislation but is protected solely by the stay of proceedings which was sixty days and now is to be ninety days. Is that the position?

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

The provincial law would

remain in abeyance from the time the proposal was filed. Of course, in the event of the ninety days herein provided expiring, and no new period arising, then he would come under the operation of the provincial debt adjustment act.

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UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEARMAN:

That was my point,

namely that in provinces where there is provincial protection a man is not protected either under the provision for sixty days or ninety days on the one hand or by the provincial legislation on the other until such time as the proposal has not only been filed but finally confirmed and filed in the courts.

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CON
UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

Yes, but

as the minister is aware one cannot compel a farmer to go through bankruptcy. However, if he takes protection under this act, if the board of review as the ultimate court under the act decides that a certain compromise is just to all parties concerned, and if the farmer does not consider that it is just or that he can comply with its terms and refuses so to comply, he may then under this legislation be put through bankruptcy. In that way he loses the protection of the present bankruptcy law and the debt adjustment acts of the respective provinces. It would be well to have that point clear.

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LIB

Charles A. Stewart

Liberal

Mr. STEWART (Edmonton):

I have a

good deal of interest in this point. Rightly or wrongly I have gained the impression that once a farmer places himself under the control of the board he is there for weal or woe. He either ends in bankruptcy or has an adjustment. If I am not correct in my understanding I should like to be given the proper information, but that was the impression I gained from the information given the committee last year when the bill was presented to the house. In one sense the legislation afforded a cheap way for the farmer to go through a bankruptcy court, an opportunity which had not been afforded him until the bill was introduced. It was intimated that at little or no cost to himself be rcu.'d become a

Farmers' Creditors Act

bankrupt and avoid the difficult situation of having his creditors pursue him all his life. If I am wrong about it I should like to have my impression corrected. If a farmer can refuse to accept an adjustment made by the board, then it is news to me.

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March 4, 1935