Champion Mortgage Services Pty Limited v Charles Menzies Craigie and Anor

Varga v Commonwealth Bank of Australia (1997) NSW ConvR 55-797 Khoury v Government Insurance Office (NSW) (1983-1984) 165 CLR 622 Miles v Ficuga Pty Limited (1996) 131 FLR 171 Deputy Commissioner of Taxation v Clark (2003) 57 NSWLR 113 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Horniblow v Napier (1955) NZLR 104 Ellison v Vukicevic (1986) 7 NSWLR 104 Underwood v Commonwealth Bank of Australia (1995) 56 FCR 145 CASES CITED : Australian Cherry Exports Limited v Commonwealth Bank of Australia (1996) 39 NSWLR 337 Gain v Commonwealth Bank of Australia (1997) 42 NSWLR 252 Lawloan Mortgages Pty Limited v Hancock [2001] NSWSC 607 Liberty Funding Pty Limited v Ivosevich [2002] NSWSC 140 Deputy Commissioner of Taxation (NSW) v Zest Manufacturing Company Pty Limited (1949) 79 CLR 166 Mills v Cannon Brewing Company Limited (1920) 2 Ch 38 Halliday v Hornsby Shire Council (1979) 1 NSWLR 391 Symonds v Vass [2003] NSWSC 170 Bradley v Ashton [1999] NSWSC 782 Sherritt Gordon Mines Ltd v Federal Commissioner of Taxation (1976) 10 ALR 441

Champion Mortgage Services Pty Limited (Plaintiff) PARTIES : Charles Menzies Craigie (First Defendant) Michael Charles Craigie (Second Defendant)

COUNSEL : Mr B DeBuse (Plaintiff) Ms J Merkel (Defendants)

SOLICITORS : Champion Legal (Plaintiff) Hancocks Solicitors (Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION POSSESSION LIST

12785/05 Champion Mortgage Services Pty Limited v Charles Menzies Craigie and Anor

JUDGMENT 1 JOHNSON J: The Defendants, Charles Menzies Craigie and Michael Charles Craigie, are father and son. In late 1972, the Defendants purchased a property located at RMB1172 Yarramalong Road, Wyong Creek. They took possession of the property in early 1973. Since that date, the property has been used for commercial purposes (the breeding of fish for resale to pet shops and aquariums) as well as providing accommodation for the Defendants and their families. The fish hatchery business operated through a company, Wyong Creek Fish Hatchery Pty Limited. 2 On 11 April 2003, the Defendants mortgaged the property to the Plaintiff, Champion Mortgage Services Pty Limited. On 29 June 2005, the Plaintiff commenced proceedings in this Court alleging default by the Defendants under the mortgage and seeking judgment for the sum outstanding together with judgment for possession of the land and an order that a writ of possession issue. 3 A question has arisen as to whether the Farm Debt Mediation Act 1994 ("FDM Act") applies in this case and, if it does, what the consequences are for the proceedings. That question is considered and answered in this judgment.

History of Proceedings 4 By Statement of Claim filed on 29 June 2005, the Plaintiff sought judgment against the Defendants for the sum of $946,661.99 (calculated as at 28 June 2005) together with judgment for possession of the land and the improvements erected thereon. 5 On 17 August 2005, Notice of Grounds of Defence was filed on behalf of the Defendants. 6 On 29 September 2005, the Plaintiff filed a Notice of Motion seeking that the Notice of Grounds of Defence be struck out and seeking summary judgment against the Defendants. 7 On 31 October 2005, the Court made the following orders by consent:

(1) the Plaintiff have judgment for possession of the land and improvements described in Certificate of Title 2321/1035727 and known as Yarramalong Road, Wyong Creek;

(3) the Defendants pay the Plaintiff's costs of the Notice of Motion dated 29 September 2005 and of the proceedings to date;

(4) the balance of the Notice of Motion and proceedings stood over before the Registrar on 6 March 2006;

(5) liberty to apply on three days' notice. 8 As part of those orders, the Court noted the agreement of the parties that the Plaintiff would not request the Sheriff to execute the writ prior to 1 March 2006, if and only if the Defendants paid to the Plaintiff specified sums in reduction of monies payable under the mortgage with time being of the essence with respect to the payments. The agreement required the payment of a total sum of $135,000.00 on specified dates with the latest date being 28 February 2006. 9 On 22 December 2005, the Plaintiff applied for the issue of a writ of possession for the subject land. An affidavit in support of the application stated that the Defendants had paid the sum of $23,000.00 by 30 November 2005, but had defaulted in further payments totalling $62,000.00 which were required to be paid on or before 20 December 2005. 10 On 17 January 2006, a writ of possession was issued with respect to the subject land. 11 By Notice of Motion filed on 30 January 2006, the Defendants sought a stay of execution of the writ of possession. A stay of execution was granted and has been extended, from time to time, since then. It appears from affidavits filed in support of the Defendants' motion that the Defendants were seeking to refinance so as to discharge the mortgage to the Plaintiff. On 6 February 2006, the Plaintiff received a bank cheque in the sum of $150,550.00 in reduction of monies payable under the mortgage. 12 In an affidavit sworn 23 February 2006, the Second Defendant asserted a belief that there had not been a proper accounting of the sums paid by the Defendants to the Plaintiff and that it was the opinion of the Defendants' solicitor that the loan was in advance for the prepayment of interest (paragraph 3). The principal under the mortgage to the Plaintiff is $865,000.00 and the Second Defendant deposed that the subject land had been valued at $1,450,000.00 (paragraph 4). The Second Defendant asserted a belief that additional funding may be obtained to pay out the mortgage to the Plaintiff (paragraph 5). If the Defendants were required to vacate the land, even for a short period, the Second Defendant stated that this would jeopardise the survival of the fish at the farm together with the operation of the fish-breeding business (paragraph 10). It was said that there would be other forms of hardship to the Defendants and their families if they were required to vacate the land which they had occupied and worked since 1973 (paragraph 11). 13 On 3 April 2006, the matter came before me as Duty Judge. In the course of discussion as to the nature of the Defendants' application, a question arose as to whether the FDM Act had application to the case. The parties applied jointly for the matter to be adjourned to 6 April 2006 to enable submissions to be made concerning the application of the FDM Act. 14 On 6 April 2006, Mr DeBuse of counsel appeared for the Plaintiff and Mr Hancock, solicitor, appeared for the Defendants. Mr Hancock submitted that the FDM Act applied to the case and that certain consequences flowed from that conclusion. Mr DeBuse submitted, in effect, that the Court should reject summarily any argument that the FDM Act applied. He relied upon the consent orders made on 31 October 2005 and advanced submissions that the FDM Act, in any event, could not have application to this case. Mr DeBuse accepted that, if I did not accept his threshold argument and if I formed the view that there was an arguable case that the FDM Act applied, then it would be necessary for the parties to have an opportunity to adduce evidence at a later hearing (T3.14, 6 April 2006). Following submissions on the Plaintiff's threshold argument, I concluded that there was an arguable case that the FDM Act applied and adjourned the further hearing until 4 May 2006 with directions being made for the filing of affidavits for the purpose of the resumed hearing. 15 On 4 May 2006, Mr DeBuse again appeared for the Plaintiff and Ms Merkel of counsel appeared for the Defendants. An Amended Notice of Motion was filed in Court on behalf of the Defendants seeking the following orders:

(1) that execution of the writ of possession and Notice to Vacate for Certificate of Title 2321/1035727 known as RMB1172 Yarramalong Road, Wyong Creek, New South Wales be stayed until further order;

(2) that the consent judgment dated 31 October 2005 be set aside;

(3) such further or other order as the Court thinks fit;

(4) costs. 16 At the hearing on 4 May 2006, Ms Merkel read affidavits of the Second Defendant sworn on 30 January 2006, 3 April 2006 and 3 May 2006. Mr Craigie was cross-examined on his affidavits (T9-17) and was re-examined (T17-20). 17 For the Plaintiff, Mr DeBuse read the affidavits of Stephen Sylvester Roberts sworn 24 March 2006, 5 April 2006 and 1 May 2006. Mr Roberts was not required for cross-examination. 18 At the completion of the hearing on 4 May 2006, the parties were directed to reduce any further submissions to writing and, in due course, I received written submissions from counsel for the Plaintiff and the Defendants. The say of execution of the writ of possession was extended until further order of the Court.

Evidence Concerning Use of the Subject Land 19 Before turning to consider relevant provisions in the FDM Act, it is appropriate to refer to the evidence, and to make findings, concerning the use of the subject land. 20 The evidence reveals that the subject land is 19.424 hectares in size and is zoned Rural 1(a) under the Wyong Shire Council Local Environmental Plan 1991. 21 According to the affidavit of the Second Defendant sworn 30 January 2006, since the purchase of the property in 1972, the Defendants have extensively renovated the property for commercial fish-breeding purposes by installing approximately 50 concrete fishponds ranging in size from 4m x 4m to 10m x 10m, together with 60 fishpond earth-bottom dams and a number of temperature and humidity controlled sheds for tropical and other fish (paragraph 7). According to the Second Defendant, maintenance of the commercial fish-breeding business required daily work including daily feeding of the fish and maintenance of water quality and temperatures for the different types of fish (paragraph 8). The Second Defendant states that he and his family rely upon the farm to operate their fish-breeding business. The income earned from the fish-breeding business is said to be the family's sole income and means of support (paragraph 10). 22 The First Defendant is 80 years old (Exhibit 2) and is now retired (T11.16, 4 May 2006). The Second Defendant is 50 years old (Exhibit 2) and has continued to operate the fish hatchery business on the subject property (T12, 4 May 2006). 23 According to the Second Defendant's affidavit sworn 3 May 2006, the Defendants approached the Plaintiff to refinance their existing loan and to obtain additional funds for the operation of the farm. He states that the majority of additional funds over and above refinancing of the existing loan obtained from the mortgagee were utilised in the operation of the farm. The Second Defendant states that he and his father used the additional funds over and above refinancing of the existing loan obtained from the Plaintiff to Wyong Creek Fish Hatchery Pty Limited for conduct as a fish hatchery (paragraph 4). He states that the Defendants have at various times grazed cattle, sheep and goats on the property although neither sheep nor cattle grazed on the property as at May 2006. In the past, the entire property was a dairy farm (paragraph 5). 24 Ms Merkel, for the Defendants, conceded that the only basis upon which it was contended that the FDM Act applied was the conduct of the fish hatchery business on the subject land (T7.19, 4 May 2006). Mr DeBuse conceded that the Plaintiff was aware that a fish hatchery business was conducted on the property at the time when the mortgage was entered into, but submitted that there was a real question as to whether this activity was being undertaken at the time of the hearing (T8-9, 6 April 2006). 25 One of the purposes for which the Defendants sought to borrow under the mortgage from the Plaintiff in 2003 was to assist in the acquisition of a further business known as the Fairfield Fish Hatchery (Exhibit A; T9.31, 4 May 2006). 26 The Second Defendant stated that he had previously operated the fish business as a partnership and had operated through a company, Wyong Creek Fish Hatchery Pty Limited (paragraph 6, affidavit of Second Defendant, 3 May 2006). A company search of Wyong Creek Fish Hatchery Pty Limited reveals that the Second Defendant is a director and the current secretary of the company. On 7 February 2006, a Court order was made to wind up the company and to appoint a liquidator. The Second Defendant said that he continued to operate the fish hatchery business on the subject land (T12, 4 May 2006). 27 As at 3 May 2006, the Second Defendant stated that the fish business was operated in his sole name. He still uses the property to breed fish and herd goats. He attended Sydney, at least three to four times per week, to deliver fish predominantly to aquariums and pet shops (paragraph 6, affidavit of Second Defendant, 3 May 2006). I accept the Second Defendant's evidence concerning the continued use of the subject property as a fish-hatchery business. 28 In an affidavit sworn 5 April 2006 and filed for the Plaintiff, Mr Stephen Roberts states that he attended the subject land on Monday, 30 January 2006 in an attempt to take possession of the property. Whilst there, he observed a sign "Wyong Creek Fish Hatchery" at the front gate. He observed approximately 12 ponds which he believed to be of clay construction with some ponds covered with chicken wire. According to Mr Roberts, most of the property was covered in grass approximately half-a-metre tall including the area in and around the ponds. He walked around to look for access to the ponds, but found no path to the ponds through the grass. He did not observe any other tracks around the property apart from the driveway. He took a number of photographs which are annexed to his affidavit. These photographs support the statements contained in his affidavit. 29 A number of income tax returns of the Second Defendant were tendered by the Plaintiff. The occupation of the Second Defendant is stated in income tax returns for the 1999/2000 and 2000/2001 tax years as being that of "fish farmer" at the Wyong Creek Fish Hatchery. The 1999/2000 return reveals that all business income related to non-primary production. The Second Defendant was cross-examined concerning this entry. The Plaintiff tendered the financial report for Wyong Creek Fish Hatchery Pty Limited for the year ended 30 June 2001. The report stated that the principal activities of the company during the financial year were fish breeding and that no significant change in the nature of these activities occurred during the year. The company reported a loss for the financial year in the sum of $63,701.00 after providing for income tax. 30 The Defendants tendered a letter from Mr Harold W Baker, solicitor, to Mr Roberts dated 31 January 2003 (Exhibit A) which formed part of the application for the loan leading to the Plaintiff's mortgage over the subject land. The letter revealed to the Plaintiff that a fish-hatchery operation was conducted on the land. It revealed that the Defendants' markets at that time including large shopping centre pet shops and retail chains. According to the letter, it was intended that the Defendants' business expand by way of purchase of the Fairfield Fish Hatcheries business and that the combined business would supply local buyers as well as selling to Victoria and overseas. It is clear from this letter that the Plaintiff was aware, prior to entering into the mortgage with the Defendants in 2003, of the nature of the fish-hatchery operations being conducted on the subject land. 31 The loan application dated 31 January 2003 (Exhibit 2) was tendered by the Plaintiff. The purpose of the loan was stated to be a "business purpose loan" to refinance an existing loan taken out for the purpose of discharging an existing mortgage and utilising funds for the purchase of the business of Fairfield Fish Hatcheries and for working capital. 32 I make the following findings of fact:

(a) the Defendants have owned and occupied the subject property since 1973 and have conducted a fish hatchery business on the property involving the harvesting of fish for sale to pet shops and aquariums;

(b) until February 2006, the business was conducted utilising a company, Wyong Creek Fish Hatchery Pty Limited, with the Defendants controlling that company and conducting the day-to-day fish hatchery business;

(c) in 2003, the Defendants entered into a mortgage with the Plaintiff over the subject property as security for a loan to refinance their existing loan, to assist the ongoing fish hatchery business conducted on the subject property and to assist the acquisition of the Fairfield Fish Hatchery business;

(d) at the time when the mortgage was entered into in 2003, the Plaintiff was aware that a fish hatchery business was conducted on the subject property;

(e) the Defendants continued to operate a fish hatchery business on the subject property, although Wyong Creek Fish Hatchery Pty Limited was placed into liquidation in February 2006 and, thereafter, the Second Defendant has continued to conduct the fish hatchery business from the subject property (including at the time of the hearing);

(f) the conduct of the fish hatchery business was the principal operation conducted on the subject property which was otherwise used for residential purposes. 33 In the light of these findings of fact, the question which arises for determination is whether the use of the subject property as a fish hatchery business (or fish farm) attracts the application of the FDM Act. As noted earlier, the Defendants concede that this is the sole basis upon which it is contended that the FDM Act applies in this case.

Relevant Provisions of the FDM Act 34 It is necessary to set out a number of provisions in the FDM Act to assist the resolution of the questions falling for determination in this case. 35 The object of the FDM Act appears in s.3 which provides: "3 Object The object of this Act is to provide for the efficient and equitable resolution of farm debt disputes. Mediation is required before a creditor can take possession of property or other enforcement action under a farm mortgage." 36 A number of definitions contained in s.4 FDM Act are pertinent to the present proceedings: "4 Definitions

… creditor means a person to whom a farm debt is for the time being owed by a farmer.

default , in relation to a farm mortgage, means failure to perform an obligation that, under the terms of the mortgage, is a ground for enforcement action.

enforcement action , in relation to a farm mortgage, means taking possession of property under the mortgage or any other action to enforce the mortgage, including the giving of any statutory enforcement notice, or the continuation of any action to that end already commenced, but does not include: (a) the completion of the sale of property held under the mortgage in respect of which contracts were exchanged before the commencement of this Act, or (b) the enforcement of a judgment that was obtained before the commencement of this Act.

… farm means land on which a farmer engages in a farming operation.

farm debt means a debt incurred by a farmer for the purposes of the conduct of a farming operation that is secured wholly or partly by a farm mortgage.

farm machinery means: (a) a harvester, binder, tractor, plough or other agricultural implement, or (b) any other goods of a class commonly used for the purposes of a farming operation that are prescribed by the regulations as being farm machinery for the purposes of this Act, if the goods are acquired for the purposes of a farming operation. farm mortgage includes any interest in, or power over, any farm property securing obligations of the farmer whether as a debtor or guarantor, including any interest in, or power arising from, a hire purchase agreement relating to farm machinery, but does not include: (a) any stock mortgage or any crop or wool lien, or (b) the interest of the lessor of any farm machinery that is leased.

farm property means: (a) a farm or part of a farm, or (b) farm machinery used by a farmer in connection with a farming operation, or (c) an access licence (within the meaning of the Water Management Act 2000) held by a farmer in connection with a farming operation. farmer means a person (whether an individual person or a corporation) who is solely or principally engaged in a farming operation and includes a person who owns land cultivated under a share-farming agreement and the personal representatives of a deceased farmer. farming operation means: (a) a farming (including dairy farming, poultry farming and bee farming), pastoral, horticultural or grazing operation, or (b) any other operation prescribed by the regulations for the purposes of this definition.

statutory enforcement notice means: (a) a notice under section 57 (2) (b) of the Real Property Act 1900, or (b) a notice under section 111 (2) (b) of the Conveyancing Act 1919, or (b1) a notice under section 71X (1) (b) of the Water Management Act 2000, or (c) a notice, given under any Act or statutory instrument, that is prescribed by the regulations as being within the scope of this definition. …" 37 I note that there is no operation prescribed by regulation as a "farming operation" for the purposes of paragraph (b) of the definition of that term in s.4(1) of the Act. 38 Section 5 is in the following terms: "5 Application of Act

(1) This Act applies in respect of creditors only in so far as they are creditors under a farm debt.

(2) This Act does not apply in respect of: (a) a farmer whose property is subject to control under Division 2 of Part X of the Bankruptcy Act 1966 of the Commonwealth, or

(b) a farmer whose property is the subject of a bankruptcy petition presented by any person, or

(c) a farmer, being a corporation, that is an externally administered corporation within the meaning of the Corporations Act 2001 of the Commonwealth." 39 The Defendants in the present proceedings placed particular reliance upon s.6 which provides: "6 Enforcement action in contravention of Act void Enforcement action taken by a creditor to whom this Act applies otherwise than in compliance with this Act is void." 40 Section 8 provides: "8 No enforcement action until notice of availability of mediation given (1) A creditor to whom money under a farm mortgage is owed by a farmer must not take enforcement action against the farmer in respect of the farm mortgage until at least 21 days have elapsed after the creditor has given a notice to the farmer under this section.

(2) Notice to the farmer is to be in writing in a form approved by the Authority (informing the farmer of the creditor's intention to take enforcement action in respect of the farm mortgage and of the availability of mediation under this Act in respect of farm debts).

(3) This section does not apply if a certificate is in force under section 11 in respect of the farm mortgage concerned." 41 Sections 9 and 9A FDM Act are in the following terms: "9 Farmer may request mediation (1) A farmer to whom notice has been given under section 8 may, within 21 days after the notice was given, notify the creditor in writing that the farmer requests mediation concerning the farm debt involved.

(1A) A farmer who has not been given notice under section 8 but who owes money to a creditor in relation to a farm debt may notify the creditor in writing that the farmer requests mediation concerning the farm debt involved. A farmer may request mediation under this subsection whether or not the farmer is in default.

(2) The Authority may approve a form for the purposes of a notification under this section and a notification given to a creditor in that form is sufficient notification for the purposes of this section. Failure to use the approved form does not of itself invalidate a notification given by a farmer.

(3) If a farmer requests mediation but subsequently refuses to mediate, this Act ceases to apply to the farm mortgage concerned. 9A Creditor may agree to or decline mediation (1) A creditor who has received a request from a farmer to mediate may, by notice in writing given to the farmer, agree or decline to mediate in respect of the farm debt involved.

(2) A refusal by a creditor to mediate does not, of itself, give rise to any claim or other consequence under this Act if the farmer is not in default.

(3) If a farmer is in default, a refusal by a creditor to mediate may result in the issuance of an exemption certificate." 42 Section 10 provides for postponement of enforcement action to allow for mediation: "10 Enforcement action postponed to allow for mediation (1) Once a farmer has given a creditor a notification in accordance with section 9 requesting mediation, the creditor must not take enforcement action in respect of the farm mortgage concerned unless a certificate is in force under section 11 in respect of the farm mortgage. (2) This section does not invalidate any statutory enforcement notice or other process given, served or executed in order to fulfil a condition precedent to the taking of any enforcement action, but operates to prohibit the taking of the action concerned, or the enforcement by a court or tribunal of any such process, except as provided by section 11 (6)". 43 Section 20 prohibits contracting out from the provisions of the Act. Section 20 provides: "20 Contracting out prohibited

(1) A provision of an agreement or other instrument (whether in writing or not and whether entered into before or after the commencement of this Act) by which a person seeks to avoid, modify or restrict the operation of this Act is void.

(2) A provision of an agreement or other instrument (whether in writing or not and whether entered into before or after the commencement of this Act) by which a person seeks to have a farmer (whether as debtor or guarantor) or a guarantor indemnify a creditor for any loss or liability arising under this Act is void.

(3) A creditor who is a party to any such agreement or other instrument is guilty of an offence.

Maximum penalty: 100 penalty units." 44 Section 21 operates to prevent a waiver of mediation rights under the FDM Act: "21 Waiver of rights void

A waiver of mediation rights under this Act is void."

Does the FDM Act Extend to a Fish Farm? 45 The first question to be considered is whether the FDM Act applies in this case given the fish-breeding activities of the Defendants on the subject land. If that question is answered in the affirmative, it will be necessary to consider the relevance of the consent orders made on 31 October 2005.

The Defendants' Submissions 46 The Defendants submit that the provisions of the FDM Act apply in this case. 47 The starting point for this argument is the dictionary meaning of "farm". According to The Macquarie Dictionary, the noun "farm" includes the following meanings: "1. A tract of land devoted to agriculture.

3. A tract of land or water devoted to some other industry, especially the raising of livestock, fish, etc: a chicken farm ; an oyster farm …"

According to the same Dictionary, the verb "farm" includes the following meanings: "9. To cultivate (land). 10. To raise (livestock, fish, etc) on a farm (def. 3). … 14. To cultivate the soil; operate a farm." 48 The Oxford English Dictionary includes the following in the definition of the noun "farm": "5(a). Originally, a tract of land held on lease for the purpose of cultivation; in mod. use often applied without respect to the nature of the tenure. Sometimes qualified by n. prefixed, as dairy -, grass -, poultry - farm .

(b) Extended to tracts of water devoted to the breeding or rearing of some animals, gen . with qualification, as fish-farm , oyster-farm , terrapin-farm , etc (see first terms)." 49 The same Dictionary includes the following definitions for the verb "farm": "4. To cultivate, till.

5. Intr . to follow the occupation of a farmer; to till the soil." 50 Accordingly, the Defendants contend that the ordinary meaning of the word "farm" extends, in modern usage, to include activities falling within the concept of fish farming. 51 The Defendants submit that there is nothing within the FDM Act which indicates an intention to exclude the form of activity which may be described as fish farming. It is submitted that the definition of "farm" in s.4(1) FDM Act as meaning "land on which a farmer engages in a farming operation" encompasses the activity of fish farming carried out in ponds located on land. This is not a case, the Defendants submit, where the activity is being carried out in a river, ocean or other waterway. 52 The Defendants submit that the definition of "farming operation" in s.4(1) does not exclude the activity of fish farming carried out using ponds located on land. 53 According to the Defendants, the fact that the fish-farming activities were carried out on the subject land by Wyong Fish Hatchery Pty Limited (until February 2006) does not stand in the way of the Defendants bringing themselves within the definition of "farmer" under s.4(1) FDM Act. It was submitted that the Defendants, and in particular the Second Defendant, operated as the owners and controllers of the subject property and its fish-farming activities. 54 The Defendants submit that the FDM Act is intended to protect the rural sector generally and that the Defendants operate a form of rural enterprise in a rural area. 55 Ms Merkel submits that the FDM Act is remedial legislation. Reliance is placed upon the judgment of Young J (as his Honour then was) in Varga v Commonwealth Bank of Australia (1997) NSW ConvR 55-797 where his Honour said: "One must construe the Act to fulfil its purpose. The purpose was to prevent persons being driven off their farms because of inability to pay debt where it was possible for the debt to be rearranged after a bona fide mediation process. To fulfil the purposes of the Act, one must construe it, to my mind, favourably to the farmer, and unless compelled by the language, not permit the overriding purposes of the Act to be defeated by technicalities."

Ms Merkel submits that a beneficial construction ought be given to the Act, so that its language is construed to give the most complete remedy which is consistent with the actual language employed, and to which its words are fairly open: Khoury v Government Insurance Office (NSW) (1983-1984) 165 CLR 622 at 638. 56 The Defendants submit that it is contrary to modern principles of statutory interpretation to seek to read down the term "farming operation" where the definition uses the term "farming" as a term in its own right. The language of the Act calls for the construction of the words "farm", "farmer" and "farming" in accordance with their ordinary meaning. Ms Merkel submits that, as ordinarily understood, a farm is a tract of land on which, in a multitude of ways, natural products, whether plant, animal or fish, are used for profit to the land holder. It is submitted that it is an impermissible restriction on the meaning of these words to read down their language by reference to the end use of those operations. Thus, the Defendants submit that it is irrelevant that fish were bred for pet shops and aquariums and not for use as food.

The Plaintiff's Submissions 57 The Plaintiff submits that the FDM Act has no application in the circumstances of this case. 58 The Plaintiff submits that a pet fish hatchery, even as part of a commercial operation, is not an activity which the FDM Act intended to constitute farming. Mr DeBuse pointed to the legislative history of the FDM Act. As Young J observed in Varga, the legislation has an unusual history. Although there was a Liberal/National Party government in power in New South Wales, the Farm Debt Mediation Bill was introduced and read a second time in the Legislative Assembly on 27 October 1994 by Mr Amery, the Labor Member for Mount Druitt. In the second reading speech, Mr Amery said (Hansard, Legislative Assembly, 27 October 1994): "The purpose of the bill is to establish legislation to not only enable a farmer and a credit provider to apply for voluntary mediation concerning farm debts but also to make provisions for mandatory mediation covering farm debts before a creditor can take possession of property or other enforcement action under a farm mortgage. The history of farm debt mediation started with the rural crisis in the United States during the early 1980s. Voluntary farmer-creditor mediation services were first introduced in Iowa and Minnesota. The voluntary system failed and both States soon legislated for mandatory mediation schemes. By the end of 1986 farmer-creditor mediation services had been established in Alabama, Iowa, Kansas, Minnesota, Missisippi [sic] , Nebraska, North Dakota, Oklahoma, South Dakota, Texas, Wisconsin and Wyoming.

I bring this point to notice to highlight that although this type of legislation may be new to Australia, in the United States it is in place in varying forms, and it works. I refer interested members to the discussion paper issued by the Rural Development Centre, University of New England, Armidale, entitled, Farm Debt Mediation - A Review of the Possibilities. This excellent document provides a background to compulsory mediation. Whilst I do not propose to quote from the document at this stage, I refer honourable members to the section relating to the limitations of the existing programs and the section addressing the changing farmer-lender relationship that has developed since the deregulation of the banking industry." 59 In Varga, Young J observed that it was clear from the speeches of the various members of Parliament that the Bill was based on legislation of the Prairie States of the United States of America and in particular, the State of Iowa. The Plaintiff submits that the statutory purpose of the FDM Act is identified in the extrinsic material and points to traditional farming activities of the type undertaken in the United States as being the class of farming intended to be caught by the Act in New South Wales. Mr DeBuse submits that these activities are far removed from the fish-farming activities of the Defendants. 60 The Plaintiff submits that the legislation was intended to provide a measure of protection for a vulnerable part of the community being primary producers living in rural areas who were at risk from drought and flood. Mr DeBuse submitted that the Defendants did not form part of the particularly vulnerable component of the community of primary producers (farmers) to whom the legislation, he submitted, was directed. 61 The Plaintiff submitted that the beneficial construction of the FDM Act referred to by Young J in Varga ought be taken to apply once it is established clearly that the relevant activities fall within the FDM Act. He submitted that the activities of the Defendants were a far cry from farming operations under the FDM Act so that no principle of remedial construction availed the Defendants in this case. 62 The Plaintiff submitted that the ejusdem generis rule ought apply in construing the FDM Act. An examination of the activities specified for the purposes of the definition of "farming operation" and of the items specified for the purposes of the definition of "farm machinery" in s.4(1) of the Act confined the legislation to agricultural and horticultural activities carried out on land. Reliance is placed upon the judgment of Dowd J in Miles v Ficuga Pty Limited (1996) 131 FLR 171 at 172 where his Honour observed that the word "farm" in the FDM Act is not given its ordinary meaning, but has a restricted definition. 63 Mr DeBuse contends that the Defendants' operation involves aquaculture and that this is not a farming operation. He points to the definition of "farming operation" in s.4(1) FDM Act and in particular, the words in paragraph (a) "a farming (including dairy farming, poultry farming and bee farming) pastoral, horticultural or grazing operation" and submits that these words shed important light upon the nature of farming to which the Act is directed. There is provision in paragraph (b) in the definition of "farming operation" for other operations to be prescribed by the regulations, but no other operation has been prescribed. Mr DeBuse submits that this definition is an important textual indicator to confine farming operations caught by the Act to traditional forms of agriculture or horticulture extended only by express inclusion of poultry and bee farming. The Plaintiff emphasises that the definition of "farming operation" in s.4(1) is an exhaustive one. 64 Mr DeBuse points to the definition of "farming operation" in s.3(1) Rural Assistance Act 1989 which is virtually identical to the definition of "farming operation" in the FDM Act. He submits that reference to the Rural Assistance Act 1989 is legitimate as the Act is related to the FDM Act, given that the Rural Assistance Authority is created under the former Act and plays a statutory role under the FDM Act. He points to the fact that clause 5 Rural Assistance (General) Regulation 2001 provides that oyster farming is a prescribed operation for the purposes of the definition of "farming operation" in s.3(1) of that Act. The Plaintiff submits that the apparent exclusion of oyster farming from the definition of "farming operation" in paragraph (a) is significant. It demonstrates that only one of the other types of farming, in the broader dictionary sense of the term, has been included expressly. Fish farming has not been included for this purpose. 65 Mr DeBuse relies upon certain provisions in the Fisheries Management Act 1994 in support of the argument that the FDM Act has no application to this case. He submits that the activities of the Defendants on the subject land falls within the definition of "aquaculture" in s.142 Fisheries Management Act 1994 which provides: "142 Definition of "aquaculture "

(a) cultivating fish or marine vegetation for the purposes of harvesting the fish or marine vegetation or their progeny with a view to sale, or

(b) keeping fish or marine vegetation in a confined area for a commercial purpose (such as a fish-out pond),

(c) keeping anything in a pet shop for sale or in an aquarium for exhibition (including an aquarium operated commercially), or

(d) anything done for the purposes of maintaining a collection of fish or marine vegetation otherwise than for a commercial purpose, or

(e) any other thing prescribed by the regulations." 66 Mr DeBuse pointed to the evidence of the Second Defendant that he did not hold a licence under s.144 Fisheries Management Act 1994 to undertake aquaculture. Section 144 prohibits a person from undertaking aquaculture without a permit. The Plaintiff submits that this points to the Defendants not being, in truth, fish farmers. Mr DeBuse submits that, if there was a farmer in this case, it was the Defendants' company and not the Defendants. 67 Further, the Plaintiff submits that the debt was not a "farm debt" for the purpose of the FDM Act given that part of the finance borrowed by the Defendants was for the purpose of the acquisition of goodwill which cannot be related to a "farming operation". 68 The Plaintiff submits that the Defendants have failed to demonstrate that the FDM Act applied in the circumstances of this case and that, accordingly, the relief sought in the Notice of Motion ought be refused.

Resolution of Competing Submissions 69 It is necessary to determine whether the activities carried out by the Defendants on the subject land fall within the FDM Act. For this purpose, it is necessary to construe a number of provisions within that Act. 70 The contemporary approach to statutory interpretation is literal but not literalistic and requires words to be construed in their total context: Deputy Commissioner of Taxation v Clark (2003) 57 NSWLR 113 at 141 (paragraph 115). In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, McHugh, Gummow, Kirby and Hayne JJ said at 381 [69] and 384 [78] (footnotes omitted):

"[69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined 'by reference to the language of the instrument viewed as a whole'. In Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397, Dixon CJ pointed out that 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed'. Thus, the process of construction must always begin by examining the context of the provision that is being construed.

[78] … the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning." 71 The Plaintiff submits that a number of general words within the FDM Act should be read down having regard to the statutory context in which they appear. 72 In Deputy Commissioner of Taxation v Clark, Spigelman CJ (Handley and Hodgson JJA agreeing) said at 143 (paragraph 127): "The process of reading down general words in a statute is a frequently recurring issue in statutory interpretation. (See, for example, the authorities I referred to in R v Young (1999) 46 NSWLR 681 at 689 [23]-[29].) Application of the ejusdem generis rule is a specific example of this process. The application of this rule, in substance, gives the immediate verbal context determinative weight in the process of construing general words. In my opinion, this is rarely justified. Whether or not general words ought be read down is to be determined by the whole of the relevant context, including other provisions of the statute and the scope and purpose of the statute." 73 For the ejusdem generis rule to have application, it is essential that some common characteristic capable of being described as a genus is able to be identified: Deputy Commissioner of Taxation v Clark at 143 (paragraph 126). 74 It is useful to refer to a number of authorities, some of which have considered the terms of the FDM Act. 75 In Horniblow v Napier (1955) NZLR 104, Barrowclough CJ considered whether the word "farmer" in the Transport Act 1949 included an orchardist or fruit grower. The word "farmer" was not defined in the Act. The Chief Justice said at 104: "In popular and colloquial language in this country, the word 'farmer' has come to be very extensively used. It is not uncommon to hear such expressions as dairy-farmer, sheep-farmer, fruit-farmer, pig-farmer, poultry-farmer and even bee-farmer."

Barrowclough CJ, at 105, concluded that farmers are only one species of a larger genus comprising all those who make their living off the land by the utilisation of its soil. Reference was made to the three main methods of utilising the soil being agriculture, horticulture and forestry. The Chief Justice concluded that, under New Zealand conditions, agriculture is essentially the business of the farmer. 76 In Ellison v Vukicevic (1986) 7 NSWLR 104, Young J considered the meaning of the term "farming undertaking" in the Contracts Review Act 1980. His Honour said at 111C-D: "Traditionally there is a trichotomy of expressions, farming, forestry and horticulture and farming is limited to pure agriculture: see, eg, Horniblow v Napier [1955] NZLR 104 at 105. However, here the words of the section make it quite clear that farming is to be used in a greatly extended sense. The point is, I think, covered by the defendant in Lowe v JW Ashmore Ltd [1971] Ch 545, where Megarry J held that profits by a farmer in selling the exclusive right to the turf were profits arising from his farming trade. Accordingly, it does not seem to me that s 6(2) gives the defendant any comfort." 77 In Underwood v Commonwealth Bank of Australia (1995) 56 FCR 145, Lindgren J considered the FDM Act. His Honour said at 149-150: "Putting to one side the terms of the definition of the expression 'farm mortgage' in s4(1), I would have understood that composite expression to mean a mortgage over land on which farming takes place or which is apt to accommodate that activity. I would have had that understanding for two reasons. The first is that the noun 'farm' according to its ordinary meaning refers to land (including fixtures). I refer to the following relevant dictionary definitions of 'farm': The Macquarie Dictionary (2nd revised edition, 1990).

'farm n. 1. a tract of land devoted to agriculture. 2. a farmhouse. 3. a tract of land or water devoted to some other industry, esp. the raising of livestock, fish, etc: a chicken farm, an oyster farm … ' The New Shorter Oxford English Dictionary (1993).

'farm … 4 A tract of land held (orig. on lease) under one management for the purposes of cultivation or the rearing of certain animals (for food or fur etc) … 5 A farmhouse …' My own understanding of the word 'farm' as used in common parlance is also that it refers to land and not to animals which are 'on' the farm.

Secondly, the word 'farm' is, in any event, defined in s4(1) as meaning in the Act 'land on which a farmer engages in a farming operation' and the word 'farm' bearing that meaning forms part of the composite expression 'farm mortgage'. Since the latter expression is used in the Act, even in the absence of a definition of it, it would mean a mortgage of a 'farm' as defined ." 78 In Miles v Ficuga Pty Limited, the question arose as to whether logging was a farming operation within the meaning of the FDM Act. The subject property had on it a substantial stand of timber which had been used and continued to be used, for logging purposes. The property was also used, and continued to be used to graze cattle, those cattle being the property of the owner of the adjoining property (at 171). Dowd J, at 172, considered the definition of "farming operation" in s.4(1) FDM Act and concluded that farming did not include forestry or any activity covering forest operations. Such activities, in his Honour's view, did not constitute a horticultural operation. Dowd J concluded, at 173, that any grazing activity on the subject property was that of the neighbour and not the defendant in that case. His Honour was not satisfied that the defendant (which was a trustee company) came within the definition of the term "farmer" and that it was solely or principally engaged in a farming operation. Dowd J concluded that the FDM Act did not apply to the subject property. 79 Reference has already been made to the decision of Young J in Varga. Young J concluded that the whole flavour of s.4 indicates that it is at the time when the creditor is seeking to take possession of the property or other enforcement action that the debtor must be a "farmer" for the purposes of the FDM Act. His Honour adopted a beneficial approach to interpretation of the Act for the purpose of concluding that it was not necessary that the person be a farmer at the date when he or she incurred the debt. Young J emphasised that he was dealing with a statute "the object and purpose of which is to protect persons who are now conducting farming operations on land from being ejected by creditors". 80 In Australian Cherry Exports Limited v Commonwealth Bank of Australia (1996) 39 NSWLR 337, Priestley JA at 340 observed that the FDM Act imposed a "temporary moratorium on actions to enforce farm mortgages". Clarke JA, at 342, said: "Section (3) sets out the object of the Act which is '… to provide for mediation concerning farm debts before a creditor can take possession of property or other enforcement action under a farm mortgage'. The emphasis is on the requirement to mediate before a creditor can take possession of a property secured by a mortgage or take other steps, properly regarded as enforcement action, pursuant to powers contained in the mortgage. As is apparent from the Act it does not destroy the rights of a creditor. It simply delays them whilst a compulsory mediation takes place and, as was pointed out by counsel for the appellants, it was introduced at a time of great hardship for farmers due to drought." 81 Although dissenting in the result, Cole JA made a number of observations concerning the FDM Act which are presently relevant. His Honour said at 344: "It is important to notice that all enforcement action is void if it be by a creditor to whom the Act applies unless the Act has been complied with. Enforcement action is not limited to enforcement action in respect of or under a farm mortgage. The only restriction on the scope of width of enforcement action referred to in s 6 is that it must be that which is taken by a creditor to whom the Act applies, that is, a creditor under a farm debt." 82 At 345, Cole JA said: "There are sound policy reasons why the legislature may have thought it appropriate to protect farmers in times of high interest rates, poor agricultural returns, drought and financial adversity from secured creditors who had lent moneys to farmers for the purpose of the conduct of a farming operation." 83 In Gain v Commonwealth Bank of Australia (1997) 42 NSWLR 252, Gleeson CJ said at 257: "Built into the legislation are provisions aimed at limiting the time during which one party can delay the enforcement of the other's rights. This is an obvious problem against which the legislation was intended to guard. It is not the purpose of the legislation to provide an unlimited moratorium on farm debts, or to allow debtors to keep creditors at bay for as long as they wish.

The role of the Authority is to satisfy itself, before giving a certificate which will allow an enforcement action to proceed, that the purpose of the legislation has been fulfilled. A satisfactory mediation is one which fulfils the object of the Act. It is not an object of the Act to force people to settle their disputes. The object of the Act is to give them an opportunity to do so by establishing a procedure to be followed. That procedure, however, cannot produce a result unless both parties want it. Legislation cannot force people to agree." 84 In Lawloan Mortgages Pty Limited v Hancock [2001] NSWSC 607, Bergin J considered whether a property promoted as a ranch with a motel and tourist facilities offering accommodation, horse riding, and a function centre operation was a "farming operation" and whether each or any of the defendants was a "farmer" for the purposes of the FDM Act. Her Honour concluded that the FDM Act had no application in the circumstances of the case. Her Honour referred to the decision of Young J in Varga and said at paragraph 72: "Young J has used the term 'primary production' as an equivalent to farming. That term is not defined in the Act. The Income Tax Assessment Act, 1936 (Cth) (ITAA), defines 'primary production' as 'production resulting directly from (a) the cultivation of land, (b) the maintenance of animals or poultry for the purpose of selling them or their bodily produce, including natural increase, (c) fishing operations, (d) forest operations, (e) horticulture and includes the manufacture of dairy produce by the person who produced the raw material used in that manufacture' (s6)." 85 Bergin J considered, at paragraphs 77-82, whether the activities carried out on the subject land constituted a "farming operation": "[77] The next matter to be determined is whether the H Ranch is a farming operation. Farming operation is rather unhelpfully defined as a 'farming operation'. It includes dairy, poultry and bee farming operations. It also includes pastoral, horticultural and grazing operations. There is no separate definition of these 'operations'.

[78] There are numerous types of 'operations' that have been considered by courts and tribunals over the years, including railway operations, mining operations and forest/logging operations: Biga Nominees Pty Ltd v Commissioner of Taxation for the Commonwealth of Australia (1991) 104 FLR 74; Regional Director of Customs (WA) v Dampier Salt (Operations) Pty Ltd (1996) 67 FCR 108; Re McDermott Industries (Aust) Pty Ltd & Anor & Chief Executive Officer of Customs (1997) 47 ALD 134; Miles v Ficuga Pty Ltd (1996) 20 ACSR 156 (referred to as 19 ACSR in 20 ACSR). In Miles Dowd J, in considering whether forest activities or operations fell within the definition of 'farming operation' in the Act, expressed the view, at 157, that it was a 'limiting definition' and included 'matters which would clearly involve grazing'.

[79] In Re McDermott Industries the Full Tribunal, in following Regional Director of Customs (WA) v Dampier Salt , expressed the view that regard should be paid to the 'desired end product' for the person engaged in the relevant operation. It seems to me that this approach is similar to the approach adopted by Young J in Varga referring to farming as primary production.

[80] The desired end product of the H Ranch is in my view an operation which generates income from its 'principal activities' as described in its Annual Returns of a company (Ex A) as 'horse riding, accommodation and function centre operation' and its 'main business activity' as described in its tax returns (Ex E) as 'motel and tourist facilities'.

[81] The H Ranch 'operation' is the sale of accommodation, the sale of meals, the provision of buildings for hire in which weddings and conferences may be held, the sale of 'rides' on horses and the provision of tuition in the riding of horses. The horses are not sold. The horses are used for the business of the horse riding school and the sale of rides, which in my view falls outside the activities contemplated in the definition 'farming operation'.

[82] It is true that the operation is conducted on rural land which has been categorised as farmland for the purpose of the assessment of the rates that are payable, but in my view it is not a farming operation within that definition in the Act." 86 In Liberty Funding Pty Limited v Ivosevich [2002] NSWSC 140, Simpson J considered whether the defendant was "principally engaged in a farming operation" so as to attract the provisions of the FDM Act. The defendant owned and operated a spray painting business and concurrently operated a market garden and retail nursery together with a shop front on the property. Having regard to the evidence and the definition of "farming operation" as a "horticultural" operation, Simpson J was satisfied that the enterprise carried on by the defendant was a "farming operation" within the Act and that the defendant was principally engaged in that farming operation. 87 Insofar as a range of express terms are used in the definitions of "farm", "farm machinery" and "farming operation", the words used are directed towards the carrying out of traditional agricultural activities on land amplified by a number of specific additional activities. In each case, the definition (which uses the word "means") is conclusive and exhaustive: Sherritt Gordon Mines Ltd v Federal Commissioner of Taxation (1976) 10 ALR 441 at 455; Pearce and Geddes, Statutory Interpretation in Australia, 2006, 6th edn, paragraph [6.56]. A conclusive and exhaustive definition of "farming operation" refers to farming (extended to include dairy farming, poultry farming and bee farming), pastoral, horticultural or grazing operations. The conclusive and exhaustive definition of "farm machinery" refers to a harvester, binder, tractor, plough or other agricultural implement. The term "farm" means land on which a farmer engages in a farming operation. There is provision within the definitions of "farming operation" and "farm machinery" for extension of these terms to other operations which are prescribed for the purposes of the definitions. No such other operations have been prescribed. In my view, these features lend powerful support to the Plaintiff's submission that the 'farming operations" covered by the FDM Act ought be confined to traditional agricultural pursuits extended only so far as the Act provides. 88 The second reading speech, as relevant extrinsic material, sheds light upon the purpose and object of the FDM Act: ss.33, 34 Interpretation Act 1987. The legislation is based upon farm-debt protection legislation in the Prairie States of the United States of America. This statutory origin is entirely consistent with the confinement of the FDM Act to the activities referred to in the preceding paragraph. 89 I derive little assistance from Mr Debuse's reliance on provisions in the Rural Assistance Act 1999 and Regulation in construing the FDM Act. Oyster farming is carried out in waterways and not on land. Fish farming of the type undertaken in the present case is carried out on land. Nevertheless, it remains noteworthy that there has been no statutory expansion of the definition of "farming operation" in the FDM Act to include an operation involving fish. 90 The strongest argument in favour of the Defendants' construction in the present case is the broad dictionary meaning given to the words "farm" and "farming". However, relevant definitions in the FDM Act operate to narrow the dictionary meaning of these words for the purpose of the Act. Relevant extrinsic material in the form of the second reading speech confirms the confined meaning to be given to the words "farm" and "farming" for the purpose of the FDM Act. 91 In the words of Rich J in Deputy Commissioner of Taxation (NSW) v Zest Manufacturing Company Pty Limited (1949) 79 CLR 166 at 171, the context in which the words are set "lifts the question out of the quagmire of dictionary meanings". One of the main objects of every dictionary of the English language is to give an adequate and comprehensive definition of every word contained in it, which involves setting forth all the different meanings which can properly be given to the particular word. On the other hand, the task of a Court in determining the true meaning of a particular word used in a statute involves construction of the statute and identification of the meaning of the word used in its statutory context: Mills v Cannon Brewing Company Limited (1920) 2 Ch 38 at 44-45; Zest Manufacturing at 171-172, 175; Project Blue Sky at 381 [69], 384 [78]. The meaning of a term in a particular enactment must be determined according to the context and purpose of its use and a wide dictionary meaning may be narrowed accordingly: Halliday v Hornsby Shire Council (1979) 1 NSWLR 391 at 394C. 92 The issue in Zest Manufacturing was whether the word "livestock" included fish and, in particular, ornamental fish bred in hatcheries. The majority of the High Court (Rich, Dixon, McTiernan, Williams and Webb JJ agreeing, Latham CJ dissenting) held that fish were not livestock within the meaning of that word used in the Sales Tax (Exemptions and Classifications) Act 1935-1947. After referring to the dictionary definition of the word "livestock" and the statutory context in which it appeared, Dixon J concluded in Zest Manufacturing at 173: "This context is anything but aquatic or ichthyological. It suggests broad acres and rural pursuits."

Although this observation of Dixon J was expressed in a different factual and statutory context, it represents a succinct summary of the conclusion which I have reached in considering whether the breeding of pet fish in tanks on a property constitutes a "farming operation" for the purpose of the FDM Act. I have concluded that it does not. 93 Had I concluded that the Defendants fish-breeding operation fell within the definition of "farming operation", I would have been satisfied on the evidence that the Defendants were and are principally engaged in that farming operation. Although the Defendants operated through Wyong Fish Hatchery Pty Limited for a number of years, the Second Defendant effectively controlled that company for the purpose of fish-breeding activities conducted on the property. I accept the evidence of the Second Defendant that, since the company went into liquidation, he has continued to carry out fish-breeding activities on the property in the same manner as has been carried on for many years beforehand. The fact that the First Defendant is retired does not, in my view, affect the position. Accordingly, had I been satisfied that the fish-breeding activity of the Defendants fell within the terms of the FDM Act, I would have been satisfied that the Act applied so that, prima facie, it was necessary for the Plaintiff to comply with s.8 of the Act.

The Effect of the Consent Orders of 31 October 2005 94 Given my conclusion that the fish-breeding activities of the Defendants do not constitute a "farming operation" for the purpose of the FDM Act, it is not strictly necessary for me to consider a further argument advanced by the Plaintiff concerning the effect of the consent orders made on 31 October 2005. However, as the matter was fully argued, I will refer briefly to that issue. 95 The Plaintiff submitted that the Defendants' consent to the orders of 31 October 2005 operated to prevent them from contending that the FDM Act applied to this case, even if the Court was satisfied that the Act did apply. Mr DeBuse submitted that the Defendants had not explained the circumstances in which they had consented to judgment being entered and other orders made on 31 October 2005. He submits that, to the extent that the consent orders embodied the agreement of the parties, there is no suggestion by the Defendants that the Plaintiff sought to avoid the application or operation of the FDM Act. Mr DeBuse referred to the summary of principles by Kirby J in Symonds v Vass [2003] NSWSC 170 at paragraph 66ff concerning an application to set aside a consent order. The orders made on 31 October 2005 reflected a negotiated agreement whereby sums of money would be paid by the Defendants to the Plaintiff and the Plaintiff, in turn, although obtaining judgment for possession of the land and leave to issue a writ of possession forthwith, agreed to take no further steps to obtain possession as long as the Defendants paid specified sums on specified dates. The form of contract underpinning the consent order, even if not determinative, was said to be relevant to the discretion to set aside the order and judgment: Symonds v Vass at paragraph 68. 96 Ms Merkel pointed to ss.6, 20 and 21 FDM Act and submitted that there was a statutory barrier to the Defendants contracting out of the protection of the Act or waiving mediation rights under the Act. It was submitted that s.6 was clear and that, if the FDM Act applied, enforcement action taken by the Plaintiff otherwise than in compliance with the Act was void. The Defendants relied upon the judgment of Young J in Bradley v Ashton [1999] NSWSC 782 where his Honour, in substance, accepted such an argument flowing from ss.6 and 20 FDM Act. The Defendants relied upon the judgment of Simpson J in Liberty Funding where a default judgment was set aside consequent upon the defendant raising, for the first time, after entry of judgment the application of the FDM Act and the failure of the plaintiff to comply with s.8 of that Act. 97 Given the clear and emphatic words in ss.6, 20 and 21 FDM Act, had I been satisfied that the FDM Act applied in this case, the consent orders of 31 October 2005 would not have stood in the way of the grant of relief sought in the Defendants' Amended Notice of Motion. If the Defendants cannot contract out of or waive mediation rights under the Act, then I do not see how consent orders and the subsequent entry of judgment can operate to defeat these provisions of the Act. Further, given the broad definition of "enforcement action" in s.4(1) of the Act, the operation of s.6 renders void enforcement action taken without compliance with the Act.

Conclusion 98 I am satisfied that the FDM Act does not apply to the present proceedings. I decline to grant relief to the Defendants as sought in their Notice of Motion upon this ground. 99 I will hear the parties as to the appropriate orders to be made in light of these reasons, including any order as to costs. **********

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