Miss the Notice, Lose the Petition: Farm Debt Mediation Act Compliance In Foreclosure and Security Enforcement Proceedings

Before a creditor can commence a foreclosure proceeding or enforce their security against a farmer in Canada, there is a mandatory step that is easy to overlook.

The Farm Debt Mediation Act (FDMA) requires a creditor to provide written notice to any farmer engaged in commercial farming operations at least 15 business days before commencing any proceedings to realize on security. The FDMA is federal legislation intended to benefit farmers, administered through Agriculture and Agri-Food Canada, with roots going back to the Great Depression as a means of providing debt relief to insolvent farmers.

For lenders who miss that notice requirement, their entire proceeding can be dismissed as a nullity as though it never existed. This was the outcome in Moonraker Ventures Ltd. v Veri, 2026 BCSC 494, where the lender's foreclosure petition was dismissed as null and void. The court held that it had no discretion to overlook the petitioner's non-compliance with the FDMA's notice requirements. 

The consequences of non-compliance are set out plainly in section 22 of FDMA:

"any act done by a creditor in contravention of section 12 or 21 is null and void, and a farmer affected by such an act may seek appropriate remedies against the creditor in a court of competent jurisdiction."

Our firm recently achieved exactly that outcome on another file. Michael Noguera successfully had a foreclosure petition dismissed on this basis, with costs awarded against the petitioner. The petitioner sought an order nisi with a shortened redemption period. The court found the failure to provide notice was fatal to to the petition. 

On another file Faye Griffiths successfully resolved a foreclosure petition in favour of a borrower in the context of a high conflict and complex commercial dispute due to the petitioner overlooking the FDMA notice requirements.  Where a borrower may fall within the FDMA, creditors should assess compliance before taking enforcement steps, and borrowers should consider whether the notice requirements have been met. This article is provided for information only and is not legal advice; for guidance on Farm Debt Mediation Act issues or security enforcement, please contact Reedman Law.