[2011] 3 F.C.R. D-3
Creditors and Debtors
Appeals against Federal Court decision (2009 FC 1121) dismissing applications for judicial review of refusal, on grounds of prematurity, of claims for payment submitted by applicants to Canada Small Business Financing Program for losses sustained when loans applicants granted to small businesses not paid back at maturity—Claims for payment authorized and governed by Canada Small Business Financing Act, S.C. 1998, c. 36, while some aspects of administration set out in Canada Small Business Financing Regulations, SOR/99-141—Federal Court not erring in interpreting Regulations, s. 37(3)(c)—Considering generality of language of s. 37(3)(c), application of provision not limited to insurance covering lender’s personal liability on account of loan or to insurance protecting hypothecated property—However, two essential conditions must be met for s. 37(3)(c) to apply: policy must be realizable, for lender’s benefit—In case at bar, blanket insurance policy for benefit of appellants in capacity as lenders—Appellants’ insurance company not formally rejecting appellants’ claims, having merely considered claims premature—Program neither guarantee nor surety of loan because Program not providing for reimbursement of loan, but for partial compensation of losses caused by granting loan—Conceiving of Program as guarantee of loan would render s. 37(3)(b) void; paragraph providing lender must realize any guarantee in lender’s favour to minimize losses resulting from loan before lender can benefit from Program—Realization mandatory precondition for Program to grant claim for payment—Federal Court correct in confirming Program authorities’ conclusion that applicants’ claims to Program premature, since Court satisfied, on evidence in record, appellants’ insurance company had not formally notified appellants of refusal to pay—Appeals dismissed.
Caisse populaire Desjardins des Chutes Montmorency v. Canada (Attorney General) (A-472-09, A-473-09, 2011 FCA 166, Létourneau J.A., judgment dated May 16, 2011, 11 pp.)