Executive Summary: Key Legal and Evidentiary Issues

• Farm Credit Canada sought the appointment of Ernst & Young Inc. as receiver and manager over all property and assets of the Dhaliwal respondents, following default on 14 loans totalling approximately $27,311,333.82 as of the date of hearing.
   
• The respondents opposed receivership, arguing that repayment was imminent through a proposed loan from a relative in the United Kingdom, and that the appointment of a receiver with immediate power of sale would eliminate their six-month redemption period under the Law and Equity Act.
   
• Central to the analysis was the application of the Maple Trade factors from Maple Trade Finance Inc. v. CY Oriental Holdings Ltd., 2009 BCSC 1527, assessed holistically to determine whether receivership was just and convenient in the circumstances.
   
• Credibility of the respondents' repayment plan was undermined by a series of failed wire transfers, uncompleted property sales, NSF cheques, and nearly 18 months of unmet promises without documentary support.
   
• Cherrycrest Inc., a third-party respondent, opposed the receivership and raised competing priority claims over certain H & R Orchards Ltd. properties, relying on a certificate of pending litigation it had filed against those lands.
   
• The court granted the receivership application but postponed the receiver's power of sale, with the effective date for sale-related powers set at May 27, 2026, allowing the respondents an opportunity to redeem.
   

Facts of the case

Farm Credit Canada ("FCC"), a federal agricultural lender, filed a petition on October 9, 2025 seeking to appoint Ernst & Young Inc. as receiver and manager over all property and assets of Desert Valley Vineyard Ltd., Creston Valley Cherry Growers Ltd., H & R Orchards Ltd., Lakeside Cellars Ltd., Harbans Singh Dhaliwal, and Harkesh Kaur Dhaliwal (collectively, the "Dhaliwal respondents"). The Dhaliwal respondents operate several farming businesses in the vicinity of Creston, Lister, Oliver, and Osoyoos, British Columbia. Their operations include a cherry packing plant with hay and grain farms (H & R Orchards Ltd.), a vineyard (Desert Valley Vineyard Ltd.), and a vineyard and winery (Lakeside Cellars Ltd.). The lands — comprising 768.56 acres over 23 parcels — are used primarily as vineyards, wineries, and orchards.

FCC had provided 14 loans to the Dhaliwal respondents. Eleven were secured by four mortgages, two security agreements, and ten full recourse guarantees. The remaining three were crop input loans secured by agreements embedded in loan agreements dated April 12, 2022, with corresponding credit limit change packages dated March 13, 2023. FCC registered its mortgage security against the Desert Valley lands, H & R lands, and Dhaliwal lands between 2015 and 2022, and registered its security agreements in the British Columbia Personal Property Registry on December 1, 2015 and February 18, 2022.

Beginning in August 2024, the Dhaliwal respondents fell into arrears. By May 16, 2025, arrears on the mortgage-secured loans had grown to $1,755,299.16, and on the crop input loans to $189,509.21, for a total of $1,944,808.37. FCC made formal demands for repayment on May 30, June 2, June 3, and June 23, 2025. As of March 10, 2026, the total amount owing on the mortgage-secured loans was $26,994,395.46 (at a per diem rate of $3,965.26) and on the crop input loans was $235,429.36 (at a per diem rate of $110.19). By the March 31, 2026 hearing date, the combined amount outstanding had grown to approximately $27,311,333.82, not including legal costs.

Policy, legislative, and contractual provisions at issue

FCC sought the appointment of a receiver pursuant to s. 243 of the Bankruptcy and Insolvency Act, R.S.C. 1985 (BIA); s. 39 of the Law and Equity Act, R.S.B.C. 1996, c. 253 (LEA); and s. 66 of the Personal Property Security Act, R.S.B.C. 1996, c. 359 (PPSA), as well as Rule 10-2 of the Supreme Court Civil Rules, B.C. Reg. 168/2009. Section 243(1) of the BIA authorizes a court to appoint a receiver on application by a secured creditor if it considers it just or convenient to do so. Section 39 of the LEA similarly empowers the court to appoint a receiver or receiver manager by interlocutory order in all cases where it appears just or convenient. Section 16(2) of the LEA provides that where a purchaser in a foreclosure is given time to redeem, the court must order a redemption period of six months unless shorter or longer circumstances are justified. The mortgage and security agreements expressly authorized the appointment of a receiver or receiver manager over any and all of the Dhaliwal respondents' assets charged by FCC's security.

The Dhaliwal respondents relied on s. 16(2) of the LEA to argue that a receivership with immediate power of sale would effectively eliminate the six-month redemption period to which they were entitled. They asserted the matter ought to proceed as a foreclosure with the standard six-month redemption period rather than through receivership.

Reasoning and analysis

Justice Gropper applied the Maple Trade factors — drawn from Maple Trade Finance Inc. v. CY Oriental Holdings Ltd., 2009 BCSC 1527 — as the governing framework for the receivership application. The court noted that these factors do not constitute a checklist, but a collection of considerations to be assessed holistically to determine whether, in all circumstances, the appointment of a receiver is just and convenient. The onus rested on FCC as the secured creditor to satisfy the court that receivership was justified.

The court found it reasonable for FCC to have lost confidence in the Dhaliwal respondents' ability to repay. The respondents had presented only one repayment plan — predicated on a loan from Raj Dhaliwal's relative, Kavandeep Sampuran, in the United Kingdom — which had been ongoing since November 2024 without coming to fruition. Multiple wire transfers had failed to clear: a November 4, 2024 transfer was withdrawn, a December 2024 promise of a $70M wire transfer went unfulfilled, and a March 26, 2026 wire of £9 million sterling (approximately CAD $16.5M) was not reflected in Raj Dhaliwal's RBC account. Two attempted property sales — a contract dated February 5, 2026 with a closing of February 12, 2026, and a second dated February 26, 2026 with a closing of March 10, 2026 — both failed to complete. Payments to FCC were returned for non-sufficient funds, and no documentary evidence of a viable financing plan was provided to FCC beyond what was filed in response to the petition itself.

The court agreed with FCC that the nature of the lands — 768.56 acres of specialized agricultural properties including vineyards, wineries, and orchards — made them uniquely difficult to list and market without specialized expertise. The court also accepted that a dispute existed regarding land value, noting that appraisals provided only a best estimate and that the Dhaliwal respondents had not tendered current appraisals for the Desert Valley or Dhaliwal lands. Drawing on Bank of Montreal v. Haro-Thurlow Street Project Limited Partnership, 2024 BCSC 47, the court affirmed that FCC's contractual right to appoint a receiver was a strong factor in favour of granting the application, and that irreparable harm need not be demonstrated where such a right exists.

On the equity of redemption issue, the court, following the reasoning in Haro, held that the respondents retained a right to redeem at any time during the receivership, prior to court approval of any sale. This addressed the concern that receivership would eliminate the respondents' redemption rights.

Ruling and overall outcome

Justice Gropper granted FCC's application and ordered the appointment of Ernst & Young Inc. as receiver and manager over all property, assets, and undertakings of the Dhaliwal respondents. To address the respondents' redemption rights, the court followed the approach taken in Haro by postponing the receiver's power of sale: the receiver was appointed immediately, but the effective date for the exercise of the receiver's sale-related powers — items 3(k), (l), and (m) of the order — was set at May 27, 2026. The order also addressed eviction provisions under item 3(a) given that the Dhaliwal family resided on certain properties, and deleted item (r) concerning shareholder, partnership, and joint venture rights. The matter of costs was adjourned to a future date. FCC, as petitioner, was the successful party, with the total monetary award not specified in the decision.