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STATUTES AMENDMENT ACT, 2014 (NO. 2)

STATUTES AMENDMENT ACT, 2014 (NO. 2)

Chapter 18

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows:


Farm Implement Act

Amends RSA 2000 cF‑7

2(1)  The Farm Implement Act is amended by this section.

(2)  The title of the Act is repealed and the following is substituted:

FARM IMPLEMENT AND
DEALERSHIP ACT

(3)  Section 1 is amended by adding the following after clause (i.1):

                              (i.2)    “person” includes a partnership, corporation, association or other organization;

(4)  The following is added after section 1:

Part 1
Farm Implements

(5)  Section 2(1) is amended

                            (a)    by repealing clause (a)(i);

                           (b)    by adding the following after clause (a):

                              (a.1)    by a person by sale by public auction;

                            (c)    in clause (d) by striking out “23 and 24” and substituting “30.3 and 30.4”.

(6)  Section 5(1) is amended

                            (a)    by adding “engine” after “state the net”;

                           (b)    by striking out “the power” and substituting “the net engine power”.

(7)  Section 6(1) is amended by striking out “an agreement” and substituting “a sale agreement”.

(8)  Section 7 is amended

                            (a)    by adding the following after subsection (3):

(3.1)  The Minister may publish the following information received through a notice referred to in subsection (2) for the purpose of assisting a purchaser in choosing what farm implements to purchase, and no liability results from the publication if it was made in good faith:

                                 (a)    the make, model and serial number of the farm implement;

                                 (b)    the date the Minister received the notice referred to in subsection (2).

                           (b)    by adding the following after subsection (5):

(5.1)  The purchaser is not responsible for the costs of providing, or any other costs of, a substitute farm implement referred to in subsection (5).

(9)  Section 8 is amended

                            (a)    in subsection (1) by striking out “in the agreement” and substituting “in the sale agreement”;

                           (b)    by adding the following after subsection (2):

(2.1)  Subject to subsection (2.2), if a dealer or distributor is unable, or knows or reasonably believes that the dealer or distributor will be unable, to deliver repair parts in accordance with subsection (2),

                                 (a)    the dealer or distributor shall advise the purchaser of the inability or likely inability to deliver the repair parts in accordance with subsection (2),

                                 (b)    the dealer or distributor shall arrange for the provision of a substitute farm implement, acceptable to the purchaser, until the repair parts are made available to the purchaser, and

                                 (c)    the dealer or distributor and the purchaser shall each be responsible for 50% of the rental cost of the substitute farm implement.

(2.2)  If the purchaser does not wish to accept a rented substitute farm implement, the purchaser must advise the dealer or distributor of that fact within a reasonable time of the dealer or distributor advising the purchaser under subsection (2.1)(a).

(2.3)  Despite subsection (2.2), any agreement between the purchaser and the dealer or distributor for the dealer or distributor not to provide a rental substitute farm implement does not relieve the dealer or distributor from obtaining repair parts within a reasonable time.

(10)  Section 13 is amended

                            (a)    by striking out “signs an agreement to purchase a farm implement” and substituting “intends to purchase a farm implement and signs a sale agreement”;

                           (b)    in clause (b) by striking out “taken” and substituting “accepted”.

(11)  Section 18 is amended by adding “net engine” before “power” wherever it occurs.

(12)  Sections 23 and 24 are repealed.

(13)  Section 26 is amended

                            (a)    in subsection (1.2)(c) by striking out “on and after January 1, 2004,”;

                           (b)    by repealing subsections (2), (2.1) and (3) to (7).

(14)  Section 30(g), (j) and (n) are repealed.

(15)  Section 30.1 is repealed.

(16)  The following is added before section 31:

Part 2
Dealership Agreements

Definitions

30.2   In this Part,

                                 (a)    “Court” means the Court of Queen’s Bench;

                                 (b)    “dealership agreement” means an agreement between a distributor and a dealer that sets out the legal rights and obligations of the parties to the agreement;

                                 (c)    “terminate”, with respect to a dealership agreement, means to terminate, cancel, fail to renew or to extend, or substantially change the competitive circumstances of the dealership agreement.

Repurchase by distributor

30.3(1)  In this section,

                                 (a)    “distributor-approved demonstrator implement” means a farm implement that was

                                        (i)    approved in writing by the distributor to be used by the dealer as a demonstrator, and

                                      (ii)    used by the dealer as a demonstrator;

                                 (b)    “notice to purchase” means the notice to purchase referred to in subsection (2);

                                 (c)    “required supplementary materials” means signs, computer hardware, computer software, service manuals and special tools obtained from and required by the distributor;

                                 (d)    “unused farm implement” means

                                        (i)    a distributor‑approved demonstrator implement,

                                      (ii)    a farm implement that is not a used farm implement, whether or not it has received pre‑delivery services,

                                     (iii)    a farm implement returned to the distributor or dealer following the giving of a notice in respect of that farm implement under section 7,

                                     (iv)    a farm implement that is not a used farm implement and that is transferred from one dealer to another dealer with the knowledge of the distributor;

                                 (e)    “unused part” means a part or parts assembly that has not been used, but does not include

                                        (i)    a part that has been broken or damaged,

                                      (ii)    a parts assembly that is incomplete and cannot be completed at reasonable expense as provided for in subsection (11)(a),

                                     (iii)    a part or parts assembly that has been removed from a farm implement and replaced at no cost to the dealer for parts under a modification or warranty substitution program, or

                                     (iv)    a seal or hose made of rubber, a gasket made of cork or a composition of materials, a seal made of leather, a liquid chemical that has deteriorated and is of limited use, or paint;

                                 (f)    “used farm implement” means a farm implement, other than one referred to in clause (d), that has been operated for a distance or for a period of time in excess of the distance or time required to deliver it to the dealer and to enable the dealer to service, prepare and operate it for the purposes of sale.

 (2)  A dealer may, within 90 days after the day a dealership agreement expires or is terminated by the dealer or the distributor for any reason, give to the distributor a written or printed notice to purchase containing a request by the dealer that the distributor purchase all the unused farm implements and unused parts obtained from or required by the distributor pursuant to the dealership agreement and required supplementary materials.

(3)  If a notice to purchase is given to the distributor in accordance with subsection (2), the distributor shall, subject to this Part and the regulations, purchase from the dealer

                                 (a)    all the unused farm implements obtained from the distributor,

                                 (b)    all unused parts purchased as parts obtained from the distributor,

                                 (c)    all signs carrying the distributor’s current logo obtained from and required by the distributor within 5 years before the expiration or termination of the dealership agreement,

                                 (d)    all computer hardware obtained from and required by the distributor within 2 years before the expiration or termination of the dealership agreement and used exclusively to do business with the distributor,

                                 (e)    all computer software obtained as required by the dealer within 2 years before the expiration or termination of the dealership agreement and used exclusively to do business with the distributor,

                                 (f)    all service manuals obtained from and required by the distributor within 2 years before the expiration or termination of the dealership agreement, and

                                 (g)    all special tools obtained from and required by the distributor within 2 years before the expiration or termination of the dealership agreement and used exclusively for servicing the distributor’s products.

(4)  A distributor shall pay to a dealer

                                 (a)    for each unused farm implement as listed on the original invoice for that farm implement, an amount equal to the sum of

                                        (i)    100% of the invoice price less any discounts allowed by the distributor, and

                                      (ii)    transportation costs paid by the dealer from the point of manufacture of the farm implement to the dealer’s place of business, as evidenced by an invoice of the carrier of the farm implement,

                                    and

                                 (b)    for each unused part

                                        (i)    90% of the current net price if the dealership agreement is terminated by mutual agreement of the distributor and the dealer,

                                      (ii)    90% of the current net price if the dealership agreement is terminated by the dealer, or

                                     (iii)    100% of the current net price if the dealership agreement expires or is terminated by the distributor,

                                         together with interest at the rate prescribed in the regulations on any amount payable, calculated from the first day of the 2nd month following the day the amount becomes due and owing.

(5)  Subject to subsection (6), a distributor shall pay to a dealer 50% of the invoice price for required supplementary materials.

(6)  If a dealer did not use a special tool or service manual, the distributor shall pay to the dealer 100% of the invoice price less any discounts allowed by the distributor for each new, unused special tool and service manual.

(7)  Subject to subsection (8), the amount payable by a distributor for an unused farm implement, an unused part or required supplementary materials becomes due and owing

                                 (a)    on the day after the 90‑day period referred to in subsection (12)(a)(ii), or

                                 (b)    on the 30th day after the day the distributor removes all the unused farm implements, unused parts and required supplementary materials from the possession of the dealer,

whichever day occurs first.

(8)  The due date for payment under subsection (7) and the 90‑day period referred to in subsection (12)(a)(ii) may be extended

                                 (a)    by agreement between the distributor and the dealer, or

                                 (b)    by an order of the Court on the application of the distributor returnable on a day not later than 120 days after the day on which the distributor received the notice to purchase, if the Court is satisfied that the distributor’s failure to remove all the unused farm implements, unused parts and required supplementary materials from the possession of the dealer was caused by circumstances beyond the distributor’s control or by the fault of the dealer.

(9)  In addition to any other remedy available to a dealer or distributor,

                                 (a)    a dealer may recover an amount owing to the dealer under this section by a distributor by deduction from any amount the dealer owes to the distributor, and

                                 (b)    a distributor may recover an amount owing to the distributor by a dealer by deduction from any amount the distributor owes to the dealer under this section.

(10)  A distributor is not required to purchase any of the following:

                                 (a)    an unused part that is not clearly identified either by means of a ticket or tag or box or other container or by an imprint on the part itself;

                                 (b)    an unused part that

                                        (i)    is not listed in any distributor’s price list or any distributor’s authorized third‑party supplier’s current parts price list, and

                                      (ii)    is for use in a farm implement that was manufactured more than 10 years before the expiry or termination of the dealership agreement;

                                 (c)   required supplementary materials that are related to the use of a farm implement that was manufactured more than 10 years before the expiry or termination of the dealership agreement;

                                 (d)    an unused part or required supplementary materials specially ordered by the dealer from the distributor on the understanding, in writing and signed by or on behalf of the dealer, that the part or the required supplementary materials were not returnable to the distributor;

                                 (e)    an unused farm implement, unused part or required supplementary materials that are subject to a lien, charge, encumbrance or mortgage in favour of a third party in an amount in excess of the amount that the distributor would otherwise be required to pay to the dealer for them under this section;

                                 (f)    an unused farm implement, unused part or required supplementary materials that have not been adequately prepared for shipment in accordance with subsection (12)(b) within the 90‑day period referred to in subsection (12)(a)(ii) or any extension under subsection (8);

                                 (g)    an unused part, computer hardware, computer software or special tools in respect of which the dealer has not made reasonable use of a surplus or obsolete parts, hardware, software or tools return program, if any, offered by the distributor.

(11)  A distributor may deduct from the amount the distributor is required to pay to the dealer under this section

                                 (a)    an amount equal to the cost to the distributor of supplying and installing a replacement for any missing or damaged part at the current net price, including a reasonable charge for necessary labour for the installation of the part, and

                                 (b)    the amount of any liens, charges, encumbrances or mortgages in favour of third parties to which the unused farm implements, unused part or parts or required supplementary materials are subject.

(12)  The dealer

                                 (a)    is responsible for the care and custody of an unused farm implement, unused part or required supplementary materials that the distributor is required to purchase until

                                        (i)    the day the distributor removes the unused farm implement, unused part or required supplementary materials from the dealer’s possession at the dealer’s place of business, or

                                      (ii)    the day after the 90‑day period that begins on the day the distributor receives the notice to purchase from the dealer, or if the 90‑day period has been extended, the day the extension expires,

                                         whichever day occurs first, and after that day the distributor is responsible;

                                 (b)    is responsible for doing the acts necessary

                                        (i)    to adequately prepare each unused farm implement so that it is acceptable by a carrier for shipment from the dealer’s place of business, and

                                      (ii)    to adequately package, crate or otherwise prepare all unused parts or required supplementary materials so that they are acceptable by a carrier for shipment from the dealer’s place of business.

(13)  A distributor shall pay for transportation costs for the removal of the unused farm implements, unused parts and required supplementary materials from the possession of a dealer.

(14)  If unused farm implements, unused parts and required supplementary materials are not removed within the 90‑day period referred to in subsection (12)(a)(ii), the distributor shall pay to the dealer reasonable storage costs until the unused farm implements, unused parts and required supplementary materials are removed.

(15)  Despite subsection (14), if the 90‑day period referred to in subsection (12)(a)(ii) has been extended, the date for removal of unused farm implements, unused parts and required supplementary materials is extended to the date the extension expires.

(16)  This section applies to a distributor and a dealer notwithstanding anything in a dealership agreement or any other contract or arrangement between the distributor and dealer, except that if a provision of the dealership agreement is more advantageous to the dealer than the provision of this section pertaining to the same subject‑matter, the provision of the dealership agreement applies.

(17)  Any waiver or release given by a dealer of the dealer’s rights under this section is void.

Distributor to furnish information

30.4   A distributor shall, in accordance with a request of the Minister, furnish the Minister with

                                 (a)    a copy of each dealership agreement in effect between the distributor and a dealer;

                                 (b)    particulars of each unwritten agreement with any or all of the distributor’s dealers;

                                 (c)    a copy of a written agreement or particulars of an unwritten agreement with any or all of the distributor’s dealers with respect to the return of farm implements or parts to the distributor.

Mandatory provisions

30.5   A dealership agreement must contain the following provisions:

                                 (a)    a provision setting out which of the dealer and the distributor is responsible for providing, and paying the costs of providing and any other costs of, a substitute farm implement referred to in section 7(5);

                                 (b)    a provision setting out which of the dealer and the distributor is responsible for

                                        (i)    advising the purchaser under section 8(2.1)(a),

                                      (ii)    providing a substitute farm implement under section 8(2.1)(b), and

                                     (iii)    paying the 50% share of the costs of the dealer or distributor related to a substitute farm implement referred to in section 8(2.1)(c).

Prohibitions on distributors

30.6(1)  This Part applies to dealership agreements despite any provision to the contrary in a dealership agreement.

(2)  Subject to section 30.9, a distributor may terminate a dealership agreement only

                                 (a)    with cause,

                                 (b)    by obtaining an order of the Court, and

                                 (c)    by complying with any terms imposed by the Court pursuant to section 30.7(2).

(3)  A distributor shall not discriminate in the prices charged for a farm implement of similar grade and quality sold by the distributor to different dealers.

(4)  A distributor shall not impose substantially different contractual requirements related to dealership agreements on different dealers.

(5)  A distributor shall not discriminate against or penalize a dealer for carrying on business with another distributor in the dealer’s facility or in a separate facility.

Application to Court to terminate

30.7(1)  Subject to section 30.9, a distributor who wishes to terminate a dealership agreement must apply to the Court for a determination as to whether or not the distributor has cause under section 30.8 to terminate the dealership agreement.

(2)  If, on an application under subsection (1), the Court determines that the distributor has cause to terminate the dealership agreement, the Court must issue an order to terminate the dealership agreement and may impose any terms on the termination that the Court considers appropriate, including allowing the dealer the opportunity to remedy any default within any period the Court specifies.

Termination for cause

30.8(1)  Subject to subsection (2), for the purposes of making a determination pursuant to section 30.7, any of the following constitutes cause to terminate a dealership agreement:

                                 (a)    the dealer has made an assignment in bankruptcy, or has been petitioned into bankruptcy, and has not been discharged from bankruptcy;

                                 (b)    the dealer’s farm implement business is being dissolved or liquidated, or a substantial portion of the dealer’s farm implement business is being liquidated and the liquidation materially affects the contractual relationship between the dealer and the distributor;

                                 (c)    the dealer has defaulted under a security agreement between the dealer and the distributor, or there has been a revocation or discontinuance of a guarantee of the dealer’s financial obligations to the distributor;

                                 (d)    the dealer has failed to operate in the normal course of business for 14 consecutive days or has otherwise abandoned the business;

                                 (e)    the dealer has pleaded guilty to or has been convicted of an offence affecting the contractual relationship between the dealer and the distributor;

                                 (f)    the dealer has failed to substantially comply with the essential and reasonable contractual requirements imposed on the dealer by the dealership agreement and those requirements are not substantially different from the requirements imposed on other dealers;

                                 (g)    any other circumstances prescribed in the regulations.

(2)  None of the following circumstances constitute cause to terminate a dealership agreement:

                                 (a)    the change of executive management or ownership of the dealership, unless the distributor is able to show that the change is detrimental to the representation or reputation of the distributor’s farm implements;

                                 (b)    the refusal by the dealer to purchase or accept delivery of any farm implement or services from a distributor not ordered by the dealer unless the farm implement or services are necessary for the operation of a farm implement commonly sold by the dealer;

                                 (c)    the distributor’s desire for further market penetration, while recognizing that the distributor has the right to require the dealer to achieve, relative to other dealers, a reasonable performance level of sales of the distributor’s farm implements;

                                 (d)    the dealer’s carrying on business with any other distributor in the dealer’s facility or in a separate facility;

                                 (e)    any other circumstances prescribed in the regulations.

Termination by mutual agreement

30.9   Nothing in this Part precludes a distributor and a dealer from terminating a dealership agreement by mutual agreement.

Certain provisions void

30.91   Subject to section 30.9, the following provisions in any dealership agreement are void:

                                 (a)    any provision allowing termination of the dealership agreement without cause;

                                 (b)    any provision requiring a dealer to deal exclusively with a distributor, so as to prevent the dealer from, or penalize the dealer for, carrying on business with any other distributor in the dealer’s facility or in a separate facility;

                                 (c)    any provision that limits, modifies or abrogates, or in effect limits, modifies or abrogates, any benefit or remedy pursuant to this Part.

Remedies

30.92(1)  A dealer who considers that the dealer’s dealership agreement with a distributor has been terminated in contravention of this Part may apply to the Court for relief.

(2)  On an application pursuant to subsection (1), the Court may make any order that the Court considers appropriate in the circumstances, including the following:

                                 (a)    an order awarding damages to the dealer for any loss resulting from the distributor’s contravention of this Part;

                                 (b)    an order enjoining the distributor from doing or continuing any act that contravenes this Part;

                                 (c)    an order directing the distributor to reinstate a dealership agreement or restore any rights under a dealership agreement that have been terminated.

(3)  This section applies despite any penalty that may be imposed on the distributor pursuant to this Part with respect to the distributor’s contravention of this Part.

Regulations

30.93   The Lieutenant Governor in Council may make regulations

                                 (a)    prescribing the rate of interest for the purposes of section 30.3(4);

                                 (b)    governing any matter in connection with or incidental to section 30.3 or 30.4;

                                 (c)    for the purposes of section 30.8(1), prescribing additional circumstances that constitute cause;

                                 (d)    for the purposes of section 30.8(2), prescribing additional circumstances that do not constitute cause.

Applicability of Part

30.94   This Part applies to a dealership agreement that exists or is entered into on or after the date this section comes into force.

Part 3
General

(17)  Section 32(1) is amended

                            (a)    in subsection (1) by striking out “$50 000” and substituting “$100 000”;

                           (b)    by adding the following after subsection (1):

(1.1)  Each day that a contravention of section 30.6(2), (3), (4) or (5) continues constitutes a separate offence.

(18)  The Conflicts of Interest Act is amended in Part 3 of the Schedule by striking out “Farm Implement Act” and substituting “Farm Implement and Dealership Act”.

(19)  The Farm Implement Dealerships Act, SA 2001 cF‑7.5, is repealed.

(20)  This section comes into force on Proclamation.