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26 Const. F. 1 (2017-2018)

handle is hein.journals/consfo26 and id is 1 raw text is: The Incremental Evolution of National Receivership Law and the Elusive Search for Federal Purpose Roderick J Wood* Introduction There was a period when provincial legislation that trespassed too deeply into the federal field of bankruptcy and insolvency law was likely to be declared to be ultra vires as an invasion of the exclusive federal power in relation to that field.' The five-to-four split in the 1978 Supreme Court of Canada decision in Robinson v Countrywide Factors Ltd2 was very much a turning point. Thereafter, the constitutionality of provincial legislation was almost invariably determined through the application of the paramountcy principle.3 Pursuant to this principle, a provincial statute is rendered inoperative to the extent that it conflicts with the federal statute. The Supreme Court of Canada has created a two-branched test for determining the presence of a conflict. Under the first branch, there is an operational conflict when it is impossible to comply with both the federal and the provincial statute.4 Under the second branch, there is a conflict when the oper- ation of the provincial statute frustrates the pur- pose of the federal statute.' Either type of conflict will render the provincial statute inoperative. In November 2015, the Supreme Court of Canada in Saskatchewan (Attorney General) v Lemare Lake Logging Ltd6 considered a consti- tutional challenge to provincial farm protec- tion legislation on the ground that it conflicted with federal legislation that empowers a court to appoint a national receiver under the Bankruptcy and Insolvency Act (BIA).7 The first branch was not engaged since the secured creditor could comply with both federal and provincial laws by waiting the longer period and satisfying the more stringent provisions of the provincial statute. The matter therefore fell to be decided on the basis of the second branch of the paramountcy principle. Determining purpose and objectives has not proven difficult in the case of the long-standing and established federal insolvency systems. For example, the purpose of the bankruptcy sys- tem has been described in a series of Supreme Court of Canada decisions.' However, the federal receivership provisions are of a different charac- ter. Justice C6t described the process that has given rise to these provisions as an incremen- tal evolution'9 The search for a federal purpose behind them has proven to be more problematic. The Supreme Court of Canada in Lemare Lake undertook this search. The majority decision brings into question the relevance of one of the fundamental dynamic elements of receivership law and casts doubt on whether it should be characterized as a federal insolvency system at all. In this article I will seek to explain how and why this has come to pass. The Background 3L Cattle Company Ltd. (3L Cattle) had given a security interest to Lemare Lake Logging Ltd. (Lemare Lake) in its land and in its goods other than inventory to secure an obligation. Following a default, Lemare Lake applied to the Saskatche- wan Court of Queen's Bench for the appointment Constitutional Forum constitutionnel 1

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