Executive Summary: Key Legal and Evidentiary Issues

• Dispute centres on enforcement of a $200,000 mortgage and the plaintiff credit union’s attempt to obtain an order nisi for sale by judicial listing.
• A live defence and counterclaim raise whether the defendant is a “farmer” and whether the mortgaged land is “farm land,” potentially engaging The Saskatchewan Farm Security Act instead of The Land Contracts (Actions) Act.
• Jurisdictional validity of the foreclosure action is in issue because, if the wrong statute was used to obtain leave, the entire proceeding may be a nullity.
• Procedural fairness concerns arise from the plaintiff seeking judgment (order nisi) despite an extant defence and counterclaim that have not been struck or summarily dismissed.
• The court relies on prior Saskatchewan authorities emphasizing strict compliance with farm security legislation and the need to resolve “farmer/farm land” status before foreclosure relief.
• The plaintiff’s application for order nisi is dismissed without prejudice, with no order as to costs and no monetary relief awarded to either party.

Background and mortgage transaction

On 7 September 2021, Benjamin Wayne Smiroldo granted a mortgage in favour of Affinity Credit Union 2013 to secure a $200,000 loan. The mortgage matured on 1 August 2023. The last payment made under the mortgage was $197 on 18 August 2023, and the land subject to the mortgage is occupied by Smiroldo. At the time of the application, the credit union asserted the land was worth approximately $370,000. By the hearing date, over $206,000 was owing in total, with mortgage arrears of $34,546.40 and unpaid land taxes of $2,671.99. The mortgage did not finance the original purchase of the land, and the credit union therefore indicated its intention to pursue a deficiency judgment after sale. There was also a subsequent mortgage registered against title.

Dispute over the nature of the land and statutory regime

The central legal uncertainty arises from the character of the land and the defendant’s status. At the time of the mortgage, as part of the loan documentation, Smiroldo signed a solemn declaration confirming that he was not using the land for significant agricultural purposes and that the mortgage was a “non-agricultural mortgage.” The credit union relied on this and proceeded under The Land Contracts (Actions) Act, 2018 (LCAA), bringing an application for leave to commence an action for foreclosure and related relief. During those initial leave appearances, however, Smiroldo asserted that he is a farmer and that the mortgaged land is used for agricultural purposes. If that is correct, The Saskatchewan Farm Security Act (SFSA) – a protective regime for farmers and farm land – would govern, and the proceedings taken under the LCAA might be fundamentally defective. The judge noted that if leave to commence the action was obtained under the wrong legislation, the action could be a legal nullity, with the court lacking jurisdiction to grant the foreclosure remedy. Authorities such as Royal Bank of Canada v Kadziolka and Royal Bank v Hamilton underline that when a mortgage is secured on farm land and the mortgagor is a farmer, compliance with the SFSA is mandatory, and courts interpret “farmer” and “farm land” broadly.

Procedural history and pleadings

After the leave application under the LCAA, leave to commence the foreclosure action was granted on 9 April 2024, with a 60-day bar on issuing the statement of claim. The claim was ultimately issued on 8 July 2024 and personally served on Smiroldo on 13 July 2024. He failed to defend initially and was noted in default on 6 August 2024. Smiroldo then applied to set aside the noting in default; the credit union did not oppose, and the default was lifted on 15 October 2024. When no defence followed, the credit union again noted him in default on 21 February 2025, and again Smiroldo successfully applied to set that aside, obtaining an order on 1 April 2025 requiring him to serve and file his defence and counterclaim by 11 April 2025. He filed his defence and counterclaim on 1 April 2025, and the credit union responded with a defence to the counterclaim. In early May 2025, Smiroldo served a 26-paragraph notice to admit facts. The credit union admitted some facts but not most of them. Despite these live pleadings, in January 2026 the credit union brought the present application for an order nisi for sale by judicial listing, which came before the court on 24 February 2026. Smiroldo, self-represented, attempted to file additional material (a late chambers appearance memorandum and an affidavit relating to mediation), but the court refused to consider the affidavit because it was not properly filed and because the extended time was only meant for legal authorities, not new evidence. The judge emphasised that, although self-representation is permitted, parties must comply with The King’s Bench Rules and court practice.

Legal framework and prior case law

The key legal issue for this application was whether the plaintiff could obtain an order nisi in the face of an existing defence and counterclaim. The court observed it is difficult to see how a creditor can obtain judgment where a defence and counterclaim are on file, especially where the defence raises a jurisdictional challenge based on alleged farmer and farm-land status. The judge reviewed Saskatchewan authorities demonstrating that: (a) a statement of defence raising compliance with the SFSA must be dealt with before an order nisi can be granted; and (b) creditors proceed at risk if they ignore or downplay such defences. In Royal Bank of Canada v Toews, the bank was unable to complete its foreclosure and obtain an order nisi until the statement of defence had been struck. Similarly, in Toronto Dominion Bank v Mitchelson, the bank coupled its foreclosure relief with applications to strike the claim and for summary judgment, implicitly recognising that the defence could not simply be bypassed. In cases such as Bank of Nova Scotia v Comeault, United Enterprises Ltd. v Bronze Motor Inn Ltd., Nipawin Credit Union Ltd. v Anklovitch, Royal Bank v Hamilton, and Wells Fargo Financial Corporation Canada v Anakaer, the courts stressed that where farm land and farmer status are plausibly in issue, the SFSA must be strictly complied with. Those decisions show that creditors who obtain leave under the LCAA while the land is arguably farm land run the risk of having their proceedings set aside and, in some instances, being required to start over, even at a late procedural stage.

Assessment of the defence and counterclaim

Although the defence and counterclaim were described by the judge as not elegant, they nonetheless raise substantive questions that cannot be dismissed as frivolous. The defendant consistently asserts that he is a farmer and that the land is farm land, potentially invoking the SFSA and undermining the validity of the foreclosure action as constituted. The plaintiff argued, in effect, that these pleadings were so lacking in merit that the court could ignore them and proceed directly to an order nisi. The court rejected that approach. Instead, it held that there are sufficient issues raised on the face of the pleadings to justify an application to strike or a summary judgment motion if the plaintiff wishes to challenge their sufficiency. Until such an application is heard and determined, the pleadings stand, and the court cannot simply treat them as a nullity.

Outcome and implications

The court concluded that Affinity Credit Union 2013 was not entitled to its foreclosure remedy (an order nisi for sale by judicial listing) without first establishing jurisdiction and liability. Because the defence and counterclaim remain unresolved, they cannot be ignored. There are no procedural shortcuts available to allow the plaintiff to leapfrog those issues. The application for an order nisi was therefore dismissed, but “without prejudice” to the credit union’s right to bring a fresh application once the issues raised in the pleadings have been properly adjudicated, whether by striking, summary judgment, or trial. On the question of costs and monetary relief, the court made no order as to costs and did not grant any damages, judgment amount, or other monetary award. In practical terms, this means that, on this application, the defendant, Benjamin Wayne Smiroldo, is the successful party, but there is no specified amount ordered or awarded in his favour; the judgment expressly leaves costs neutral and does not quantify any monetary recovery for either side.