July 2003 draft farm lease resolution.doc

DRAFT RESOLUTION
Title: Legislation to address implications of ‘Topline’ court decision for Farmers
[Sponsor's Name]
WHEREAS the BC Court of Appeal (BCCA) in a decision known as ‘Topline’ has held that landlords and tenants cannot rely on a lease if the lease is for a portion of a property, if the lease is for longer than three years, and if the landlord hasn’t taken the steps a person would take to subdivide the land into two separate parcels (i.e. comply with s. 73 of the Land Title Act); AND WHEREAS the BCCA felt the decision, though distasteful given the facts of the case, was necessary to protect important public policy objectives implicit in s. 73: municipal control over the subdivision of land (access, highway allowances, drainage, flooding, future subdivision, etc.), and to ensure the operation of the Torrens system. AND WHEREAS it would benefit farm businesses without compromising the public policy objectives of s. 73 if the law allowed farmers to enter into such a lease for farming without the expe nse and complexity of the full s. 73 process. THEREFORE BE IT RESOLVED that the Union of British Columbia Municipalities petition the Ministry of Sustainable Resource Management to make necessary amendments to the Land Title Act or Agricultural Land Reserve Act to create for farmers a more flexible and affordable process—while ensuring that the public policy objectives articulated in Topline are maintained and respected. SUPPLEMENTARY INFORMATION
As a result of a 1996 BC Court of Appeal (BCCA) decision known as ‘Topline’,1 a farmer cannot rely on a lease if the lease is for a portion of a property, and if the landlord hasn’t taken the steps a person would take to subdivide the land into two separate parcels (i.e. comply with s. 73 of the Land Title Act). The BCCA in Topline says such a lease is unenforceable. In Topline, an industrial tenant wished to exercise a term of a lease that allowed a five-year renewal. The industrial landlord refused, arguing the lease was unenforceable because the landlord failed to comply with s. 73 of the Land Title Act. The court agreed. The court felt the decision, though distasteful given the facts, was necessary to protect municipal control over the subdivision of land (access, highway allowances, drainage, flooding, future subdivision, etc.), and to ensure the operation of the Torrens system. The result leaves all landlords and tenants in such lease arrangements without protection. Neither landlord nor tenant can force the other party to live up to the bargain. The tenant cannot register the lease against the landlord’s title to protect his/her investment or secure a loan. Few disagree with the important public policy objectives of s. 73 (as described by the BCCA). Many, however, believe more flexibility for farmers would benefit farm businesses without D:\!docs\Projects\Growing Green Project\Topline farm leases\July 2003 draft farm lease resolution.doc compromising the public policy objectives. The reasons, articulated for example in a subsequent BC Supreme Court decision called R&R Ginseng,2 are: 1. The land use is a similar use to that already adopted (e.g. farming), 2. The lease doesn’t change quality of the land such that there would be difficulty in returning to its original use, 3. The length of term is what is required for a crop cycle and not so long as to amount to an unreasonable alienation of the parcel, and 4. Compliance with the statute by way of subdivision would be so cumbersome and unrealistic as to preclude this sort of agricultural lease as a useful vehicle. 1 International Paper Industries v. Topline Industries Inc. (1996), 185 D.L.R. (4th) 423. 2 R & R Ginseng Enterprises Ltd. v. Layton Bryson Outfitting and Trailriding Ltd., unreported decision dated April 29, 1997, B.C.S.C. No. C960326. D:\!docs\Projects\Growing Green Project\Topline farm leases\July 2003 draft farm lease resolution.doc

Source: http://www.farmfolkcityfolk.ca/GrowingGreenDocs/July_2003_draft_farm_lease_reso.pdf