Agricultural Law NetLetter - Tuesday, April 21, 2015

** HIGHLIGHTS ** *

A Justice of the Saskatchewan Court of Queen's Bench has upheld a decision of the Saskatchewan Farm Land Security Board which directed the sale of Saskatchewan farm land subject to a complex series of financing transactions. The Board described the transactions as an attempt to get around the Saskatchewan Farm Security Act by allowing non-Canadian entities the opportunity to profit and derive income from the increasing value of Saskatchewan farm land and to control the operation of Saskatchewan farm land. The financing operations involved issuing derivatives which increased or decreased in value with farm land held by the entities involved. The decision concluded that the "reasonableness" standard of review applied to the Board's decision. (Skyline Agriculture Financial Corp. v Farm Land Security Board, CALN/2015-010, [2015] S.J. No. 167, Saskatchewan Court of Queen's Bench) ** NEW CASE LAW **

Skyline Agriculture Financial Corp. v Farm Land Security Board; CALN/2015-010, Full text: [2015] S.J. No. 167; 2015 SKQB 82, Saskatchewan Court of Queen's Bench, Layh J., March 26, 2015.

Foreign Ownership Farm Land -- Saskatchewan Farm Security Act -- Standard of Review on Appeal.

Skyline Agriculture Financial Corp., Skyline Agriculture Lending Corp., Skyline Agriculturestream Corp. and Skyline Agriculture Capital Corp. (collectively "Skyline") appealed to the Saskatchewan Court of Appeal from a decision of the Saskatchewan Farm Land Security Board (the "Board") from a decision that transactions involving Skyline did not satisfy the residency requirements for persons entitled to have a "land holding" under s. 76(e) of the Saskatchewan Farm Security Act, SS 1988-90, c S-17.1 ("SFSA").

Skyline was involved in a series of complicated transactions decribed in detail (with flow charts) at para. 2 to 16 of the decision. In summary:

Skyline Agriculture Financial Corp. obtained an investment from institutional investors through private share offerings. These investments provided financing to its subsidiaries, Skyline Agriculture Lending Corp., Skyline Agriculturestream Corp. and Skyline Agriculture Capital Corp. The financing was used by the subsidiaries to provide financing for Saskatchewan farm operations owned by Canadian or Canadian owned entities ("Loans"). These entities then purchased Saskatchewan farm land. The purchased lands were owned by Canadian operating companies ("Op Co's"). The shares in these companies were owned by a...