March 4, 1935

CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

The impression held by

the hon. member for West Edmonton is quite correct up to this point, that if the farmer fails to live up to the terms of the finding, then he does go into bankruptcy. That is quite true.

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UFA
CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Yes, quite so. The finding of the board must be binding upon both parties. The provision in this respect is to be found at subsection 3 of section 3 of the original act passed last year:

In any ease where the affairs of a farmer have been arranged by a proposal approved by the court or confirmed by the board as hereinafter provided, part I of the Bankruptcy Act shall notwithstanding section 7 thereof thereafter apply to such farmer but only failure on the part of such farmer to carry out any of the terms of the proposal shall be deemed to be an act of bankruptcy.

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UFA
CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

It continues:

Provided that such failure shall not be deemed an act of bankruptcy if, in the opinion of the court, such act was due to causes beyond the control of such farmer.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

But we

have to go back a stage farther than that to find out just how the matter works out. We will suppose Tom Jones goes to a receiver at Calgary and makes a written proposal offering to compromise on his obligations. In such event the secured and probably the unsecured creditors would be consulted. They may disagree with the proposal offered by the farmer and say that they will not accept it. Thereupon the farmer may say, "well, that is my rock bottom proposition; I cannot do any better than that because it represents the limit of my capacity to pay, and I certainly will not enter into any other agreement." Under this act, once a farmer has made a written proposal any secured creditor may pursue the matter through to the board of review and secure a finding by that board which would have the effect of forcing the farmer into bankruptcy, in the event of his not accepting the finding. Let us have the matter clear.

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LIB
CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

The hon. member is quite right; he stated the situation accurately.

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UFA

George Gibson Coote

United Farmers of Alberta

Mr. COOTE:

The difficulty is that there may be so many cases waiting for a hearing by a board of review that a case to be heard by it may have to wait ninety days before a decision could be rendered. If the official receiver neglected to ask the court for a stay of proceedings, although a man had done everything he could legally do to have his case heard, and although it may be held up only because of a long list of cases awaiting the action of the board of review, he would be helpless to protect himself against any creditor who might desire to take action against him. I mean by that that he is left in the hands of the receiver, absolutely. I was told by one of the members of the board of review in Alberta that on some days they can hear only three cases, although they put in long hours. Some cases have required that much consideration, if the board wished to be fair to both debtor and creditor. No good purpose would be served in going ahead with this legislation unless the board of review had plenty of time to see that decisions were carefully made. If they are going to give the same consideration to these cases that an ordinary court would give, in many instances they will not be in a position to deal with more than three or four in a day. This afternoon I asked the minister if he could tell how many cases were awainting the decisions of the board of review, and I dare say he may not be in a position to give accurate information on that point. It does seem to me however that according to the figures he gave this afternoon there must be a good many cases in Alberta and' Saskatchewan. I doubt whether in some of the western provinces the board of review would be able to hear in less than ninety days some of the cases which have lately come before them. Therefore I raise the point whether or not ninety days is a long enough period for a stay of proceedings.

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

On March 1, 276 cases had been referred to the board of review in Alberta, and on that date 102 had been heard. While in the earlier stages it is true that only three cases could be heard by the board of review in one day, they have more recently been able to speed up their work. That has been brought about through the experience they have gained and because they are sitting longer hours. They have heard as many as ten cases in a day, so that the hon. member will readily appreciate that the arrearages could very easily be overtaken in a period of time shorter than three months. He speaks about the possible negligence of a registrar in arranging for aD

Farmers' Creditors Act

extension of a stay of proceedings. I think we must assume that the registrar will not be negligent in his duties. While in some cases renewals may be necessary, on the other hand I have had a great many objections from creditors who say they believe the period of three months for a stay of proceedings is too long. On balance therefore, I am inclined to think we have perhaps gone as far as we should, bearing in mind always that the bona fide debtor will not be prejudiced by reason- of the fact that this period can be renewed. On the other hand we must be fair to the creditors and not put them to the unnecessary expense of having to go to court where proceedings are taken under this act only for the purpose of delaying the creditor in the application of his remedy where the proposals are such as could not ultimately be entertained by the board. It seems to me that on balance, three months is a reasonable period.

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UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEAKMAN:

That was my reason for asking the question. Where a proposal is made and the ninety days expires before further action is taken, and for some reason the application for extension of time is not properly registered and has lapsed, at the expiration of that time would the provincial legislation have full force and afford such protection as would have been afforded had the proposal been before the board? I think it should. The man in such a case is not under the protection of the federal law, and [ should imagine he ought to remain under the protection of the provincial law until such time as the full process has been completed.

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Mv hon. friend is quite correct. But even assuming he did not have the right to resort for his protection to the provincial debt adjustment act, in the case instanced by my hon. friend from Macleod it would still be quite competent for him to go before the court and ask for a stay of proceedings, notwithstanding the fact that the steps to do so had not been taken prior to the expiry of the three months period.

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UFA

George Gibson Coote

United Farmers of Alberta

Mr. COOTE:

It does seem to me that only in a very few cases would a decision be given by tire board of review within ninety days after the farmer had made his proposal. It takes some time after the proposal is first made for the official receiver to notify the creditors and get them to a meeting and get the debtor there, and sometimes they adjourn for a second meeting. The board of review have so many cases on their waiting list that I doubt whether many of them are disposed of within ninety days. If the minister assures us that there is protection through

the official receiver applying to the court for an extension, or through provincial legislation, I certainly do not want to labour the point. But I do submit that not many cases passed on by the board of review will be wound up within ninety days of the first proposal.

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

My hon. friend need have no anxiety, certainly so far as Alberta is concerned, because we will assume that the three months has elapsed and that no proceeding has been taken. The creditor before he can sue has to go before the provincial debt adjustment board for a permit before he can proceed at all.

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UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEAKMAN:

That was my question. Must he? And I understood the minister to say he must.

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Furthermore they have a list of all the proposals filed before the official receivers under the Farmers' Creditors Arrangement Act.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

I do not understand that last statement of the minister. Do I understand that in the event of a decision from the board of review pending and not yet delivered, and the ninety days granted for stay of proceedings having elapsed, the operation of the provincial debt adjustment board will act on behalf of that man? I do not think so.

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

If the ninety days period has expired, then before the creditor can sue in the province of Alberta he must go before the provincial debt adjustment board to get leave to bring action, notwithstanding the fact that there may be a proceeding then pending before the board of review under the Farmers' Creditors Arrangement Act.

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UFA

William Irvine

United Farmers of Alberta

Mr. IRVINE:

But would he not be under the federal act the day after the ninety days had expired? Would not that be the time the federal act would come into force so far as his creditors were concerned?

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Yes, so far as his application is concerned, but not so far as a stay of proceedings is concerned, and that is the point we are discussing at the moment. The stay of proceedings operates for only ninety days

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March 4, 1935