Regina-based Input Capital is asking the Court of Appeal to overturn a verdict issued earlier this month that said the company's contracts with a Macoun-area farmer are "unconscionable" and "must be set aside."
In 2014 and 2015, Terry Gustafson entered into a series of agreements with Input, which bills itself as a "low cost source of capital for farmers." It paid him cash up front for a portion of his future canola crop.
The learned judge erred in fact and law in holding that the cumulative effect of the agreements is substantially unfair.- Input Capital's Notice of Appeal
Justice Jeff Kalmakoff found that the contracts were "heavily one-sided" where the risk was almost entirely borne by the farmer while Input took very little risk. He concluded that, because of that fundamental unfairness, "the entire contractual relationship between Mr. Gustafson and ICC is substantially unfair and cannot be permitted to stand.
In its appeal, filed Monday, Input said in arriving at his conclusion, the judge made a series of errors which led him to a faulty conclusion.
Kalmakoff used a three part test to determine the contracts should be set aside.
Input argued that he made mistakes "in fact and in law" on each point.
Input facing class action lawsuit
This case is being watched with great interest by a group of farmers who launched a class action against Input earlier this month, alleging the company has engaged in "predatory lending." The class members are calling on the court to declare Input's contracts illegal.
Their lawyer, Tony Merchant, said the ruling in the Gustafson case "may mean the end of Input."
In a text message to CBC, he said the ruling "means every farmer in the clutches of Input can get free and most can get back a lot of money."
Kalmakoff's ruling wasn't entirely in Gustafson's favour. It found Input had given him $4.4 million in upfront payments while failing to deliver canola in repayment.
The judge said Gustafson has to pay that money back.
Input is asking the Court of Appeal to allow the company to seize money from one of Gustafson's bank accounts.