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[2013] NSWCA 275
Court of Appeal (NSW)
2013-08-08
Meagher JA, Barrett JA, Ward JA, Davies J, Button J
Original judgment source is linked above.
Judgment 1MEAGHER JA: I agree with Ward JA. 2BARRETT JA: I agree with Ward JA. 3WARD JA: By Summons filed on 28 June 2013, Mr and Mrs McMahon seek leave to appeal from an interlocutory judgment of Davies J (Permanent Custodians Ltd v McMahon [2013] NSWSC 769) in which his Honour dismissed an application by them for declaratory relief and dissolved an injunction that had been granted by Button J on 27 March 2013, restraining the respondent, Permanent Custodians Ltd, from, inter alia, disposing of certain rural properties the subject of farm mortgages entered into by them. The declaratory relief that Mr and Mrs McMahon had sought related to possession proceedings brought by Permanent Custodians in relation to the said rural properties and, in particular, the validity of a certificate that had been issued under s 11(1) of the Farm Debt Mediation Act 1994 (NSW). 4Leave to appeal is required pursuant to s 101(2)(e) of the Supreme Court Act 1970 (NSW). Expedition was granted, and the application for leave was listed to be heard concurrently with the appeal, pursuant to orders made by Basten JA on 2 July 2013. The only grounds of appeal that Mr and Mrs McMahon now seek leave to bring are those raising a question of the proper construction of s 11(1)(a) of the Act. For the reasons set out below, I am of the view that leave to appeal should not be granted as the appeal is bound to fail. No error of principle resulting in substantial injustice has been shown.
Background 5Briefly, the background to the present dispute is that in 2011 Mr and Mrs McMahon defaulted under two loan agreements they had entered into with Permanent Custodians. The borrowings under those loan agreements were secured by mortgages over a number of farm properties and by guarantees. Those mortgages were "farm mortgages" as defined under the Farm Debt Mediation Act. 6On 18 March 2011, Permanent served a notice on Mr and Mrs McMahon pursuant to s 8 of the Act (WF 94). That section precludes a creditor, to whom money under a farm mortgage is owed by a farmer, from taking enforcement action against the farmer in respect of the farm mortgage until at least 21 days have elapsed after service of a notice under the section. 7A mediation pursuant to the Act was held between the parties on 14 June 2011. It resulted in the entry by the parties into Heads of Agreement on that date (WF 97). Placed prominently at the top of the signed heads of Agreement (WF 98) was a "warning", stating that it was "not intended to be a precise legal agreement" but that, by signing it, the parties were agreeing in principle to the substance of the agreement and that "even if the formal agreement is never executed, the parties may be called upon to satisfy their obligations in a court of law". 8The Heads of Agreement recited various matters in relation to the indebtedness of Mr and Mrs McMahon. Clause 1, headed "General", then recorded an agreement between the parties as to certain things, including: (b) The parties agree that this agreement has been reached as a result of a mediation having taken place under the Farm Debt Mediation Act 1994 and that a Section 11 Certificate under the Act may be issued upon [Permanent Custodian's] Application. (my emphasis) 9Clause 1(d) referred to the cooling off period provided under s 11A(3) of the Act. The rights under that provision were not exercised by Mr and Mrs McMahon. 10Clause 2 then set out an agreement by Mr and Mrs McMahon that, by 15 August 2011, either they would refinance one of the two loans with another lender, and pay out the arrears under the other loan, or they would provide Permanent with an unconditional 42 day contract of sale, satisfactory to Permanent, for at least one of the specified properties to enable payment of the arrears on both loans and would effect settlement of that contract and pay out all of the arrears. The clause went on to provide what was to happen in the event that the McMahons took the second of the two alternatives and the contract for sale in question related to a particular identified property. 11Clauses 3 and 4 dealt with matters in the event that there was "compliance" with clause 2. The terms of clauses 3 and 4 therefore seem to acknowledge the imposition of an obligation on the part of the McMahons, although the document is prefaced by the warning that it is not a "precise legal agreement". The better view of those clauses might therefore be that failure to take either of the steps under clause 2 was not a default of an obligation to do so but simply meant that Mr and Mrs McMahon had not complied with, or satisfied, the steps necessary to obtain the benefit of what was contemplated in clause 3. 12In any event, clause 5 then contained an agreement by Mr and Mrs McMahon that: [a]ny default under the Agreement allows [Permanent Custodians], at its discretion to commence recovery action against [Mr and Mrs McMahon]. 13Mr and Mrs McMahon did not take either of the courses of action contemplated by clause 2 of the Heads of Agreement and hence, as at 16 August 2011, they were either in default of their agreement in clause 2 to do so or had not fulfilled what was necessary for them to take advantage of what was provided for under clause 3. Nothing turns on this for present purposes. Instead, the complaint by Mr and Mrs McMahon is that, prior to the expiry of the time provided for in clause 2, on about 4 July 2011, Permanent Custodians applied to the Rural Assistance Authority for a certificate under s 11 of the Act in relation to the farm mortgages and security properties the subject of the mediation. That certificate was issued by the Authority on 11 August 2011. 14Section 11 of the Act provides, relevantly: (1) The Authority must, on the application of a creditor under a farm mortgage, issue a certificate that this Act does not apply to the farm mortgage if: (a) the farmer is in default under the farm mortgage, and ... (c) the Authority is satisfied that: (i) satisfactory mediation has taken place in respect of the farm debt involved, or (ii) the farmer has declined to mediate, or (iii) 3 months have elapsed after a notice was given by the creditor under section 8 and the creditor has throughout that period attempted to mediate in good faith (whether or not a mediation session or satisfactory mediation took place during that period). 15"Default", in relation to a farm mortgage, is defined in s 4(1) of the Act as meaning "failure to perform an obligation that, under the terms of the mortgage, is a ground for enforcement action". There is no dispute that there was such a default when Mr and Mrs McMahon defaulted on their mortgage repayments. Conversely, it is not contended that the failure to take the steps outlined in clause 2 of the Heads of Agreement was a "default under the farm mortgage" if that phrase is read literally. 16"Satisfactory mediation" is a reference, inter alia, to "a mediation that has achieved a resolution of a farm debt dispute" or a "mediation that has proceeded as far as it reasonably can in an attempt to achieve a resolution of a farm debt dispute but has nevertheless failed to resolve the dispute" (s 4(1A)). 17On 15 September 2011, Permanent Custodians commenced enforcement action against Mr and Mrs McMahon by serving a notice under s 57(2)(b) of the Real Property Act 1900 (NSW) (WF 111-115). When there was no compliance with that notice, it brought proceedings in the Common Law Division on 12 December 2011, seeking writs of possession of the farms the subject of the farm mortgages and judgment for the amount outstanding on the mortgages. 18In March 2012, orders for possession of the properties and judgment in the sum of $3.75 million in favour of Permanent Custodians were made with the consent of Mr and Mrs McMahon (WF 5.385). The signed consent contained a specific note of Permanent Custodians' agreement not to seek the entry of those orders before 16 May 2012. In the judgment the subject of the present application, Davies J noted that the purpose of this was to enable Mr and Mrs McMahon to sell sufficient properties prior to 15 May 2012 to clear the arrears and to reduce the loans to an acceptable loan to value ratio ([11]). 19The consent orders were filed on 16 May 2012, although the date for entry of the orders was recorded by the Court registry as being 23 April 2012 (WF 118). Nothing turns on this discrepancy. Permanent Custodians then caused writs of possession to be issued and executed in respect of the various properties, secured by the mortgages, some of which have since been sold. 20On 27 March 2013, Mr and Mrs McMahon sought and obtained injunctive relief to restrain the auctions of two of the properties. Their application for declaratory and other relief subsequently came before Davies J.
Proceedings before the primary judge 21In the proceedings before his Honour, Mr and Mrs McMahon sought declarations that the s 11 certificate was issued ultra vires and was void and that the issue of the statement of claim in the Common Law Division proceedings was prohibited by the Farm Debt Mediation Act. An order was sought that the consent orders be set aside. 22At [21] of his Honour's judgment, his Honour noted that, at the hearing, Mr and Mrs McMahon relied solely on an argument that the certificate was void because the requirements of s 11 of the Act were not satisfied as they were not "in default under the farm mortgage" at the time the s 11 certificate was issued. In written submissions put before his Honour, it was submitted for Mr and Mrs McMahon that the fundamental question was whether or not Permanent Custodians was prohibited by the Act from taking enforcement action in circumstances where there was no default in an agreement reached in the farm mediation ([4.1] of the outline of submissions at WF 1/5.105). It was further submitted that the agreement reached by the parties at the mediation "deferred the time for repayment of the loan until 15 August 2011" such that as at any time prior to that date the McMahons were not in default under the farm mortgage in that there was no failure "to perform an obligation that, under the terms of the mortgage, is ground for enforcement action" ([7.7]-[7.8] at WF 1/5.111). 23His Honour rejected the contention that the debt had been postponed ([30]) and found that all the Heads of Agreement did was to give a period of time in which the McMahons could either sell the properties or refinance them ([31]), which assumed that the McMahons were and remained in default. His Honour found that this was the case even if, as a matter of general principle, satisfaction and discharge of the pre-existing liabilities was suspended until the date for performance of the new arrangements ([32]). 24His Honour held that, on the proper construction of s 11 and the definition of "default" in the Act, the fact that under the new arrangements Permanent Custodians could not enforce the original liabilities until the time for performance under the mediation agreement had passed (i.e., 15 August 2011) did not entail the conclusion that Mr and Mrs McMahon were not in default under the farm mortgage ([33]) at the time of the issue of the s 11 certificate (on 11 August 2011). 25His Honour did not accept an argument put to him for the McMahons to the effect that clause 1(b) of the Heads of Agreement, in which the parties agreed that a s 11 certificate "may be issued" on the application of Permanent Custodians, amounted to a contracting-out of the Act contrary to s 20 ([36]). 26His Honour concluded at [37] that at the time the certificate was issued the McMahons were in default under the farm mortgage. His Honour considered other arguments put on behalf of the McMahons but ultimately concluded that the Motion should be dismissed and the then existing injunction dissolved.
Application for leave to appeal 27The appeal which Mr and Mrs McMahon seek leave to bring, as articulated in the draft notice of appeal, identifies a number of alleged errors in his Honour's reasons. Those relate to the conclusions reached by his Honour at [30]-[33] and [36]-[37], as summarised above, and to the observation by his Honour (at [35]) that clause 1(b) of the Heads of Agreement supported the conclusion that the McMahons were in default at the time the certificate issued and that the parties had, by reference to clause 1(b), accepted that the pre-conditions stipulated in the Act had then been satisfied. Ground 8 of the draft notice of appeal contends that the matters decided by his Honour after the conclusion at [37] should be set aside. 28However, on the hearing of the application, it was made clear by the solicitor appearing for Mr and Mrs McMahon (Mr Boskovitz), that no issue was taken with his Honour's findings that the debt had not been postponed or deferred and that Mr and Mrs McMahon remained in default under the farm mortgages. Hence the grounds of appeal in respect of the findings at [30] - [32] and [36] are no longer sought to be pressed. Rather, the sole issue raised on the concurrent hearing of the application for leave to appeal and appeal before this Court was whether or not Permanent Custodians was prohibited by the Act from taking enforcement action "in circumstances where there was no default in an agreement reached in a farm mediation between ... the creditor ... and the ...farmers..." ([1.14] of the applicants' summary of argument). 29Mr Boskovitz submits that there is ambiguity in the words "farm mortgage" as appearing in the expression "the farmer is in default under the farm mortgage" in s 11(1)(a) of the Act. The ambiguity so identified was whether that phrase means default under "the farm mortgage (and farm debt) which was the subject of a mediation, (if a mediation was held)" or means default under "the farm mortgage (and farm debt) as varied in accordance with the agreement reached at the mediation" ([1.15] of the summary of argument) (my emphasis). 30In oral submissions, Mr Boskovitz disavowed any submission that the mediation agreement had varied or changed the farm mortgages and said that the words "as varied" in the written submissions might better be read as meaning "as affected". Similarly, as I understand it, Mr Boskovitz does not press the written submission that a s 11 certificate is invalid if at the time of application and issue the McMahons were not in default under the farm mortgage "as modified by the parties", as stated at [2.2] of the summary of argument. 31Accordingly, the ambiguity that Mr Boskovitz contends arises is simply whether the words "farm mortgage" in s 11(1)(a) mean what they are expressly defined to mean in s 4(1) or whether they are to be expanded to include the qualification "as affected in accordance with" the agreement, if any, reached at mediation. 32It was expressly conceded by Mr Boskovitz on the hearing of the present application that his clients were in default under the farm mortgages at the time the s 11 certificate was issued; that it was not contended that the farm mortgages had been changed or varied in any way by the Heads of Agreement; that the Heads of Agreement did not bring into existence a new farm mortgage and this was not a case of the kind considered in Waller v Hargraves Secured Investments Ltd [2012] HCA 4; (2012) 245 CLR 311, where it was found that the parties had entered into a new farm mortgage that could not then be enforced until a new s 11 certificate was issued; that the farm mortgages did not incorporate or include the agreement contained in the Heads of Agreement; and that the issue of the s 11 certificate did not amount to the taking of any enforcement action under the Act. 33The applicants' contention was that s 11(1)(a) must be construed as requiring a creditor (i.e., Permanent Custodians) to "hold off" applying for a certificate until such time as the creditor knows whether there is a default under the mediation agreement, whether or not that "agreement" is contractually enforceable. In fact, s 11 says nothing about when a creditor may apply for a certificate. Instead it sets out the circumstances in which the Authority is obliged to issue one. In that regard Mr Boskovitz contends that "default under the farm mortgage" for the purpose of s 11(1)(a) of the Act must be read by reference to the outcome of the mediation such that a s 11 certificate could not issue "while there was no default in an agreement reached at mediation as to future conduct of a farm debt / farm mortgage by the respondent" ([3.1] of the summary of argument). That submission was not one that seems to have been put to Davies J. 34Permanent Custodians opposes the grant of leave to appeal on the grounds that there are insufficient prospects of an appeal succeeding; that it turns on a question of statutory construction that is fact specific; and where there is a question of the utility of an appeal given that the writs of possession have already been executed. 35Permanent Custodians foreshadowed that, if leave to appeal were granted, it would rely on a notice of contention to the effect that, even if Mr and Mrs McMahon were not "in default" under the loan agreements as at 11 August 2011, the s 11 certificate was validly issued and that, in any event, the consent orders that have been entered are not a "nullity" and cannot be set aside under Rule 36.15 of the Uniform Civil Procedure Rules 2005 (NSW).
The Farm Debt Mediation Act 36The object of the Act is set out in s 3. It is to provide for the efficient and equitable resolution of farm debt disputes. The way in which this is sought to be achieved is by requiring a mediation process to be undertaken, or satisfactory steps towards mediation to be undertaken, before a creditor can take possession of property or can take other enforcement action under a farm mortgage. 37Section 6 provides that enforcement action taken otherwise than in compliance with the Act, by a creditor to whom the Act applies, is void. The effect of a certificate under s 11, which the Authority must issue if the conditions set out in that section are satisfied, is that the Act does not apply to a particular farm mortgage and hence enforcement action can be taken by the creditor.
Proper construction of the legislation 38The nub of the submissions put for Mr and Mrs McMahon is that there are three possible scenarios in which a s 11 certificate can validly be issued: first, where the farmer refuses to participate in a mediation offered by the creditor; second, where there is a mediation but it is unsuccessful in reaching a resolution of the dispute; and, third, where there is an agreement reached at mediation, enforceable or otherwise, and the time for compliance with any provisions in that agreement has expired such that the farmer is then in default of compliance with those provisions. The last of those scenarios reflects what Mr Boskovitz argues is the need to "take into account" the agreement reached at mediation at the time of the issue of the s 11 certificate. 39Mr Boskovitz submits that such a reading of s 11(1)(a) is required having regard to the perceived ambiguity in the words "farm mortgage" and the principles of statutory construction expounded in Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355. There, McHugh, Gummow, Kirby and Hayne JJ said, at [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 (See Taylor v Public Service Board (NSW) (1976) 137 CLR 208 at 213, per Barwick CJ). The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole" (Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320, per Mason and Wilson JJ. See also South West Water Authority v Rumble's [1985] AC 609 at 617, per Lord Scannan, "in the context of the legislation read 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 (Toronto Suburban Railway Co v Toronto Corporation [I915] AC 590 at 597; Minister for Lands (NSW) v Jeremias (1917) 23 CLR 322 at 332; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 312, per Gibbs CJ; at 315, per Mason J; at 321, per Deane J). 40At [78], their Honours said: However, 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 (for example, the presumption that, in the absence of unmistakable and unambiguous language, the legislature has not intended to interfere with basic rights, freedoms or immunities: Coco v The Queen (1994) 179 CLR 427 at 437) may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. 41Mr Boskovitz points to the following statement in a passage from Statutory Interpretation (3rd ed (1997) Bennion, F., pp 343-344), extracted with apparent approval in Project Blue Sky: "the desirability of applying the clear literal meaning may conflict with the fact that this does not remedy the mischief that Parliament intended to deal with". 42Mr Boskovitz submits that, in considering the purpose of the legislation, it is not the mediation that is of essence but, rather, the outcome of the mediation process; and that any construction of the Act that has the effect of "circumventing" an agreement reached at mediation cannot be maintained. Hence, his submission that the phrase "default under the farm mortgage" must be read more widely, by reference to the outcome of the mediation. 43The "unsatisfactory result", inconsistent with the objects of the Act, to which Mr Boskovitz submits a literal reading of s 11(1)(a) may give rise, is that the parties might, following default under a farm mortgage, reach an agreement at mediation that is unenforceable at common law. It is submitted that if, in those circumstances, it were open to the creditor to obtain a s 11 certificate and to commence enforcement action, without reference to the mediation "agreement", before the matters "agreed" under the mediation agreement are due to be performed, this would be an outcome incompatible with the object of the Act. 44There are a number of difficulties with Mr Boskovitz's submissions. 45First, I see no room for ambiguity in the expression "default under a farm mortgage". Both "default" and "farm mortgage" are defined terms. Nothing in the definition of those terms suggests that the question whether there is default for the purposes of s 11(1)(a) requires an exploration of whether there has been compliance, or conversely any default, in the provisions of an agreement reached at a farm debt mediation, whether or not that agreement be enforceable. There is no doubt as to the plain meaning of the definition of "farm mortgage" in this context. 46Second, the Act itself contemplates that a mediation may be "satisfactory" without there being a final agreement as to resolution of the dispute having been reached. Section 11(1)(c) contemplates that a certificate may issue, in the circumstances therein set out, whether or not satisfactory mediation has taken place in the relevant period. Section 11A(5), to which this Court's attention was not drawn, provides that the Authority must not issue a certificate under s 11 to a creditor, on the ground that satisfactory mediation in respect of a farm debt has taken place, if Heads of Agreement are in force in relation to the farm debt and the statutory cooling off period has not expired. There is no similar provision precluding the issue of a certificate while Heads of Agreement are in force but under which the time for compliance by the farmer with the provisions of the Heads of Agreement has not expired. 47Third, the formulation put forward by Mr Boskovitz contemplates that the creditor should not be able to apply for a certificate "without reference" to the mediation agreement. However, where, as here, there is nothing in the mediation agreement that precludes, or deals with the time of, application for a s 11 certificate (other than the initial acknowledgement that Permanent Custodians was then able to apply for one), it is difficult to see how applying for a certificate, but not proceeding to enforcement action at that stage, is something that need be done "with reference" to the mediation agreement. 48Fourth, there is no textual basis for the proposition that it is the outcome of the mediation and not the implementation in good faith of a mediation process (or "breathing space" for the farmer) that is of essence in the operation of the legislation. 49In Myross (NSW) Pty Ltd v Kahlefeldt Securities Pty Ltd [2003] NSWSC 138, Barrett J, as his Honour then was, noted at [23] that the purpose of the Act was to require a mortgagee "to hold his hand on enforcement of the farm mortgage until there has been an opportunity for resolution of differences with respect to the mortgage by mediation and either an arrangement acceptable to mortgagor and mortgagee has been reached or the possibility of resolution is seen to be exhausted", it being only at that point that the mortgagee is free to resort to enforcement action. Here, however, the application for a s 11 certificate is not enforcement action. There is nothing inconsistent with the objects of the Act in a creditor applying for a s 11 certificate in advance of the time at which enforcement action could commence under the terms of any mediation agreement. Obviously, if the mediation agreement in its terms precluded reliance on that certificate, then there would be remedies available for the farmer if the creditor, in breach of the agreement, sought to do so. 50Finally, the reference to the principles outlined in Project Blue Sky does not assist Mr Boskovitz. True it is that the Farm Debt Mediation Act is beneficial legislation and its purpose must be taken into account in construing s 11(1)(a). However, the fact that this is beneficial legislation from the perspective of farmers does not require the Court to find ambiguity where there is none. In Minister of Employment and Workplace Relations v Cribbles Radiology Pty Ltd [2005] HCA 9; (2005) 222 CLR 194 at 208, the majority of the High Court, when considering the expression 'business of an employer' in s 149(l)(d), which formed part of the succession provisions in the Workplace Relations Act 1996 (Cth), while noting that the section must be read in a way that gives effect, so far as possible, to its legislative purpose emphasised the need to consider the words of the section when seeking to discern the legislative purpose, saying that: It is only if some a priori assumption is made about the intended reach of the provision that considering its purpose casts light on the question [that being how far the extension of the operation of awards went beyond those party to the dispute in question]. To reason in that way begs the question. Rather, it is necessary to consider the words of the provision. It is there that the intended reach of the legislation is to be discerned. 51Again, in Kavalee v Burbidge (1998) 43 NSWLR 422, where Mason P (with whom Meagher JA agreed) noted that a liberal approach to the beneficial legislation there being considered (the Family Provision Act) was called for, given the legislative goal of providing adequate provision in favour of eligible persons, his Honour went on to say that: ... the ability to choose a construction which promotes the purpose of extending the powers of the Court to the full range of benefits and advantages controlled by testators exists only in so far as any question of construction presents a choice. 52Here there is no ambiguity calling for a construction other than that which accords with the literal meaning of the words used in the legislation. In circumstances where the concept of a satisfactory mediation expressly envisages a mediation that may not result in any agreement at all, there is no reason to expand the words of s 11(1)(a) to refer to default under both the farm mortgage and any arrangement or agreement that relates to that farm mortgage which is reached at mediation. 53Mr Boskovitz sought to draw support for his submission from the fact that, as noted by Heydon J, in Waller at [27], the Farm Debt Mediation Act is based on similar provisions in legislation of the State of Iowa. Mr Boskovitz noted that, unlike the New South Wales legislation, the legislation in Iowa contains express provision that the borrower and the creditors who are parties to the mediation agreement may enforce the mediation agreement as a legal contract. Such a distinction does not assist Mr Boskovitz. If the legislature here, having the example of the Iowa legislation before it, has chosen not to include a provision to the effect that a mediation agreement is enforceable as a matter of statute, there is no reason to construe s 11(1)(a) to have a similar effect or to operate in some broader fashion than it does having regard to its literal meaning. There is nothing inconsistent with the purpose of the legislation for the parties to be left to determine for themselves whether any "agreement" reached at mediation is to be contractually binding or is, say, to be no more than an agreement in principle or an agreement subject to a condition precedent to its enforcement. 54Finally, Mr Boskovitz submitted that since a s 11 certificate remains in force for a period calculated in accordance with s 11(5), there would potentially be an inconsistency with the objects of the legislation if the creditor were able to obtain a s 11 certificate, before it was known whether there was default under a mediation agreement, if the mediation agreement contemplated that the farm mortgage would continue on foot if there were to be compliance with the mediation agreement. Mr Boskovitz' argument, as I understand it, was to the effect that because a s 11 certificate so obtained would remain in force for the period specified under the Act but, in those circumstances compliance with the mediation agreement would mean that the farm mortgage continued on foot, the certificate would then apply if there a subsequent default under the same farm mortgage and hence the farmer would be deprived of the relief afforded by the Act if and when there was a subsequent default under that same farm mortgage. However, that result would seem to be a function of the parties' agreement. In other words, if it were contemplated that there would be an indulgence granted to the farmer on the satisfaction of certain conditions and that thereafter the same farm mortgage would continue, without giving rise to a new farm mortgage that would require the issue of a new certificate for any default thereunder, then the difficulty envisaged by Mr Boskovitz results from the manner in which the parties have resolved their dispute. There would be nothing, for example, to prevent inclusion of a provision in the mediation agreement by which the creditor was required to undergo a similar mediation process on any subsequent default. 55The caution to be exercised before interpolating the Court's words into statutes or replacing the words of the legislature with their own has been long recognised (Thompson v Goold & Co [1910] AC 409 at 420 per Lord Mercy). In James Hardie & Co Pty Ltd v Seltsam (1998) 196 CLR 53 at [73] Kirby J said: In Jones v Wrotham Park Settled Estates [Lord Diplock] made it clear that, if the application of the literal or grammatical meaning would lead to a result which would defeat the clear purpose of a statute, the court, construing the legislation, may read words into the text so long as three conditions were fulfilled. First, that the mischief with which the Act was dealing was clear. Secondly, that the court was satisfied that, by inadvertence, Parliament had overlooked an eventuality which must be dealt with if the purpose of the Act was to be achieved. Thirdly, the court must be able to state with certainty what words Parliament, if its attention had been drawn to the defect, would have used to overcome the omission. Lord Diplock's approach to statutory construction now prevails, not only in England but also in Australia and throughout the common law world. Today, unless driven to the result by unyielding words, no judicial satisfaction is to be derived from concluding that the manifest target of legislation has been missed. (footnotes omitted) 56This tripartite test was applied recently by this Court in Rail Corporation of New South Wales v Brown [2012] NSWCA 296, (2012) 82 NSWLR 318 at [46]-[47] per Bathurst CJ (with whom Beazley JA, as her Honour then was, and Basten JA agreed). In the present case, the applicants must fail on at least the second limb of the test. Parliament clearly contemplated that a satisfactory outcome of a mediation under the Act would not necessarily include a final agreement that resolves the relevant dispute. There is no warrant for reading into s 11(1)(a) words of the kind for which Mr Boskovitz contends.
Conclusion 57In Sharpe v Heywood [2013] NSWCA 192, Gleeson JA, with whom Barrett JA agreed, noted (at [34]) that, although not the only relevant factor, an essential prerequisite of a grant of leave to appeal is that the Court is persuaded that the decision the subject of appeal is attended with sufficient doubt to warrant its reconsideration on appeal. That prerequisite is not satisfied in the present case. Leaving aside the issue as to whether there would be any utility in the grant of leave in circumstances where the writs of possession obtained as a result of the orders have been executed, leave to appeal should not be granted where the appeal is bound to fail. In those circumstances it is not necessary to consider the foreshadowed grounds of contention. 58Since the sole ground of the proposed appeal turns on a question of statutory construction as to which the argument put forward by Mr Boskovitz is in my opinion bound to fail, the order I propose is that the summons seeking leave to appeal should be dismissed with costs. 59For completeness, I note that an interim injunction was granted by Basten JA in relation to the sale of the farm properties on 28 June 2013. As I understand it, that injunction was subsequently replaced by undertakings proffered to the Court. To the extent that it be necessary, the Court should note that those undertakings are discharged.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 August 2013
McMahon
Permanent Custodians Ltd
[2005] HCA 9
(1998) 196 CLR 5
(1998) 43 NSWLR 422
(2005) 222 CLR 194
(1998) 194 CLR 355
(2012) 82 NSWLR 318
(2012) 245 CLR 311
(1976) 137 CLR 208
(1981) 147 CLR 297
(1955) 92 CLR 390
(1917) 23 CLR 322
(1985) 157 CLR 309
(1994) 179 CLR 427
(1998) 196 CLR 53