Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff sought summary judgment to recover an outstanding loan under the Agricultural Marketing Programs Act (AMPA).

• Allegations of fraudulent misrepresentation were raised regarding the defendants’ relationship to a party in default on a previous loan.

• Jurisdictional limitations of the Federal Court under the Bankruptcy and Insolvency Act (BIA) were contested.

• The sufficiency of pleadings and evidence, especially regarding fraud and a common-law relationship, was critically examined.

• The court assessed whether the plaintiff met the high burden required for summary judgment on both debt recovery and declaratory relief.

• Costs and interest calculations were determined, with no additional costs awarded due to divided success and lack of submissions.

Facts of the case

His Majesty the King in Right of Canada, as plaintiff, brought a motion for summary judgment against 101137743 Saskatchewan Ltd. and Raymond Jed Hemming to recover an outstanding loan amounting to $311,046.14 as of September 10, 2025. The loan was advanced under the Agricultural Marketing Programs Act (AMPA), a federal statute designed to support agricultural producers through cash advances. The plaintiff also sought a declaration that the defendants had made a fraudulent representation within the meaning of section 178(1)(e) of the Bankruptcy and Insolvency Act (BIA), which would make the debt non-dischargeable in bankruptcy, along with interest and costs.

Policy terms and clauses at issue

The dispute involved the terms of the AMPA, specifically the requirement that applicants for cash advances not be related to any producer with an outstanding advance. The plaintiff alleged that the defendants falsely represented in their application that they were not related to any such party, while in fact, Mr. Hemming’s common-law spouse, Janet Baschuk, had defaulted on a previous advance. The plaintiff argued this constituted fraudulent misrepresentation under the BIA. The court also referenced Rule 213(1) of the Federal Courts Rules regarding summary judgment, and Rule 181(1)(a) concerning the need for particularized pleadings in cases alleging fraud.

Court’s analysis and findings

The defendants conceded the debt and did not dispute the plaintiff’s entitlement to judgment for the loan amount. However, they opposed the plaintiff’s request for declaratory relief under the BIA, arguing that the Federal Court lacked jurisdiction to grant such relief. The plaintiff ultimately conceded this jurisdictional point. The court then examined the evidence and pleadings related to the alleged fraudulent misrepresentation. It found that the plaintiff had not met the high burden of proof required for summary judgment on this issue, particularly due to insufficient and hearsay evidence regarding the alleged common-law relationship and a lack of specific material facts to support all elements of fraud in the pleadings. The court also noted that the plaintiff had not properly pleaded the declaratory relief in the Statement of Claim, which was a significant defect.

Outcome and ruling

The Federal Court granted summary judgment in favor of the plaintiff for the outstanding loan amount, ordering the defendants to pay $315,483.04 (inclusive of interest to the date of judgment), plus costs and disbursements of $1,447.82. Interest on the total amount of $316,930.86 was to accrue from the date of judgment at a rate of 5% per annum. The court dismissed the plaintiff’s request for declaratory relief regarding bankruptcy non-dischargeability, without prejudice to the plaintiff’s right to amend the Statement of Claim and seek further relief in the future. No additional costs were awarded to either party due to the divided success and absence of submissions on costs.