This law makes mediation mandatory for farm-debt disputes and bars creditors from enforcing a farm mortgage unless the Authority issues an exemption certificate; farmers in default can seek temporary prohibition certificates. It creates a statutory mediation process with accreditation, confidentiality, time limits, cost‑sharing, cooling‑off and internal review, concentrating key discretionary powers in the Rural Assistance Authority. It affects farmers, creditors and mediators by delaying or restraining enforcement, imposing procedural costs, and creating incentives for strategic use of certifications and reviews.
The Farm Debt Mediation Act 1994 (NSW) establishes a compulsory pre-enforcement mediation regime for farm debts secured by farm mortgages. Its core mechanism is a prohibition on creditors taking “enforcement action” unless they first hold an exemption certificate issued by the NSW Rural Assistance Authority (the Authority). Section 8(1) makes it an offence, punishable by 2,500 penalty units for a corporation or 500 for an individual, to take enforcement action without such a certificate. Enforcement action is broadly defined in s 4(1) as taking possession of property under the mortgage or any other action to enforce it, including the giving of statutory enforcement notices under the Real Property Act 1900 s 57(2)(b), the Conveyancing Act 1919 s 111(2)(b) or the Water Management Act 2000 s 71X(1)(b). Any such action taken in breach is declared void by s 8(2).
The Act creates two interlocking certificate regimes. A farmer in default may apply for a prohibition certificate under s 9 if they have given the creditor a mediation request. The Authority must issue the certificate if the farmer is in default, has made a mediation request, no exemption certificate is in force, and at least one additional ground exists (s 10(2)). Those additional grounds include the farmer attempting mediation in good faith for three months without a satisfactory outcome, the creditor failing to respond, or the creditor declining mediation (s 10(3)). A prohibition certificate lasts six months (s 12).
Conversely, a creditor may apply for an exemption certificate under s 13. The Authority must grant it if the farmer is in default, no prohibition certificate is current, and at least one additional ground is satisfied (s 14(2)). Grounds include satisfactory mediation having occurred, equivalent mediation in another jurisdiction where the security spans borders, the creditor having attempted mediation in good faith for three months after issuing a notice inviting mediation, or the farmer failing to respond, failing to participate in good faith, or declining mediation (s 14(3)). Section 14(5) expressly provides that a creditor’s refusal to reduce or forgive debt does not, of itself, demonstrate lack of good faith. An exemption certificate generally lasts three years, with the starting date varying according to the circumstances that justified its issue (s 15(2)).
Current sections
Direct links to the current provisions in Farm Debt Mediation Act 1994.
This Act commences 2 months after the date of assent, except in so far as commenced sooner by proclamation.
3
Object
3 Object
3 Object
The object of this Act is to provide for the efficient and equitable resolution of matters involving farm debts. Mediation is required before a creditor can take possession of property or other enforcement action under a farm mortgage.
s 3: Subst 2002 No 82, Sch 1 [1]. Am 2018 No 16, Sch 1 [1].
4
Definitions
4 Definitions
4 Definitions
(1) In this Act:
approved form means the form approved by the Authority.
Authority means the New South Wales Rural Assistance Authority constituted by the Rural Assistance Act 1989.
business day means a day that is not a Saturday, a Sunday or a public holiday throughout New South Wales.
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.
Note—
Examples of default on the part of a farmer include failure to pay the principal, interest or other money the payment of which is secured by a farm mortgage; failure to keep the property subject to the farm mortgage insured; and failure to submit financial statements required by the creditor.
draft mediation agreement means a draft agreement prepared under section 18J.
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.
exemption certificate—see section 13.
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 any of the following things that are commonly used for the purposes of a farming operation:
(a) a vehicle, machine or other implement,
(b) any other thing of a class prescribed by the regulations.
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.
farming operation—see section 4AB.
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.
function includes a power, authority or duty.
hire purchase agreement has the same meaning as it has in the Duties Act 1997.
mediation—see section 4AA.
mediation agreement means an agreement entered into under section 18K.
mediation request—see section 18B.
mediator means a person accredited as a mediator under section 16.
(c) a notice, given under any Act or statutory instrument, that is prescribed by the regulations as being within the scope of this definition.
(1A) A reference in this Act to satisfactory mediation is a reference to:
(a) a mediation that has achieved a resolution of a matter involving a farm debt, or
(b) a mediation that has proceeded as far as it reasonably can in an attempt to achieve a resolution of a matter involving a farm debt but has nevertheless failed to resolve the matter, or
(c) a mediation specified or of a class described in regulations made for the purposes of this subsection to be a satisfactory mediation.
(2) (Repealed)
s 4: Am 1996 No 106, Sch 1 [1]; 1998 No 14, Sch 1 [1] [2]; 2002 No 82, Sch 1 [2] [3]; 2005 No 95, Sch 1 [1] [2]; 2018 No 16, Sch 1 [2]–[4].
4AA
Mediation
4AA Mediation
4AA Mediation
(1) Mediation is a structured negotiation process in which a mediator, as a neutral and independent party, assists the participants in the process:
(a) to communicate effectively with each other, and
(b) to reach agreement on the issues in dispute, and
(c) to achieve their own resolution of the dispute.
(2) The regulations may declare that any process of a specified kind is, or is not, mediation for the purposes of this Act.
s 4AA: Ins 2018 No 16, Sch 1 [5].
4AB
Farming operation
4AB Farming operation
4AB Farming operation
(1) A farming operation is a business undertaking that primarily involves one or more of the following activities:
(a) agriculture (for example, crop growing and livestock or grain farming),
(b) aquaculture,
(c) the cultivation or harvesting of timber or native vegetation,
(d) any activity involving primary production carried out in connection with an activity referred to in paragraphs (a)–(c).
(2) A farming operation does not include a business undertaking that primarily involves wild harvest fishing or the hunting or trapping of animals, birds or reptiles in the wild.
(3) The regulations may declare that any business undertaking of a specified kind is, or is not, a farming operation for the purposes of this Act.
s 4AB: Ins 2018 No 16, Sch 1 [5].
4A
Notes
4A Notes
4A Notes
Notes included in this Act do not form part of this Act.
s 4A: Ins 2002 No 82, Sch 1 [4].
5
Application of Act
5 Application of Act
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.
(3) This Act does not apply in respect of a farm debt secured by a farm mortgage if:
(a) the farmer is in default under the farm mortgage, and
(b) the farm mortgage secures all or part of the balance outstanding under an earlier farm mortgage, and
(c) the farmer and the creditor have previously entered into a mediation agreement under this Act in relation to the farm debt.
s 5: Am 1998 No 14, Sch 1 [3]; 2001 No 34, Sch 4.18 [1]; 2018 No 16, Sch 1 [6].
6
6
6 (Repealed)
7
Relationship of Act with other laws
7 Relationship of Act with other laws
7 Relationship of Act with other laws
(1) Nothing in this Act affects the operation of the Contracts Review Act 1980 or any other Act or law that deals with the granting of relief in respect of harsh, oppressive, unconscionable or unjust contracts or on the grounds of hardship.
(2) Nothing in this Act is to be construed as affecting the operation of the Banking Act 1959 of the Commonwealth and, in particular, the duty of the Reserve Bank under Division 2 of Part II of that Act.
(3) Except as otherwise expressly provided by this Act, this Act does not affect or limit a civil right or remedy that exists apart from this Act, whether at common law or otherwise.
(4) Other than as provided in this section, this Act has effect despite any other Act.
s 7: Am 2010 No 6, Sch 2.6; 2018 No 16, Sch 1 [8].
Part 1A
Enforcement action
Part 1A Enforcement action
Part 1A Enforcement action
pt 1A: Ins 2018 No 16, Sch 1 [9].
Division 1
Prohibition on enforcement action
Division 1 Prohibition on enforcement action
Division 1 Prohibition on enforcement action
pt 1A, div 1: Ins 2018 No 16, Sch 1 [9].
8
Exemption certificate required for enforcement action
8 Exemption certificate required for enforcement action
8 Exemption certificate required for enforcement action
(1) A creditor must not take enforcement action in respect of a farm mortgage unless an exemption certificate granted to the creditor is in force in respect of the farm debt concerned.
Maximum penalty:
(a) for a corporation—2,500 penalty units, or
(b) for an individual—500 penalty units.
(2) Enforcement action taken by a creditor in respect of a farm debt in contravention of this Act is void.
(3) 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 and the enforcement by a court or tribunal of any such notice or process.
(4) Subsection (3) does not affect any proceedings authorised under section 15 (5) to be continued or concluded after the expiry of an exemption certificate.
s 8: Am 1996 No 106, Sch 1 [2]. Rep 2018 No 16, Sch 1 [10]. Ins 2018 No 16, Sch 1 [9].
Division 2
Prohibition certificates
Division 2 Prohibition certificates
Division 2 Prohibition certificates
pt 1A, div 2: Ins 2018 No 16, Sch 1 [9].
9
Application for prohibition certificate
9 Application for prohibition certificate
9 Application for prohibition certificate
(1) A farmer who is in default and who has requested a creditor to mediate in respect of the farm debt concerned may apply to the Authority for a certificate prohibiting the creditor from taking enforcement action (a prohibition certificate).
(2) An application for a prohibition certificate may be made whether or not the farmer has been given a notice inviting mediation in respect of the farm debt.
(3) An application is to be in the approved form.
s 9: Am 2002 No 82, Sch 1 [5] [6]. Rep 2018 No 16, Sch 1 [10]. Ins 2018 No 16, Sch 1 [9].
9A
9A
9A, 9B (Repealed)
10
Grant or refusal of prohibition certificate
10 Grant or refusal of prohibition certificate
10 Grant or refusal of prohibition certificate
(1) The Authority may, on application, grant or refuse a prohibition certificate.
(2) The Authority must grant a prohibition certificate if:
(a) the farmer is in default under the farm mortgage, and
(b) the farmer has given the creditor a mediation request in respect of the farm debt concerned, and
(c) no exemption certificate is in force in relation to the farm mortgage, and
(d) the Authority is satisfied that there is at least one additional ground for granting the prohibition certificate.
(3) Each of the following is an additional ground for granting a prohibition certificate:
(a) the farmer has attempted to mediate in good faith throughout the period of 3 months commencing on the day on which the mediation request was given, but no satisfactory mediation has taken place,
(b) the creditor has failed to respond to a mediation request in respect of the farm debt within the period required by Part 2 (or within such longer period as the Authority considers is reasonable in the circumstances),
(c) the creditor has indicated in writing to the Authority or the farmer that the creditor does not wish to enter into or proceed with mediation,
(d) the creditor has, in any other manner, declined to mediate (whether under this Act or under a corresponding law of another State or Territory).
(4) However, the Authority may refuse to grant a prohibition certificate where the creditor has failed to respond to a mediation request if the Authority is satisfied that:
(a) the creditor’s failure to respond is justified in the circumstances, and
(b) the creditor intends to mediate within a period that is reasonable in the circumstances.
s 10: Am 1996 No 106, Sch 1 [3] [4]. Rep 2018 No 16, Sch 1 [10]. Ins 2018 No 16, Sch 1 [9].
11
Prohibition certificate not to be issued while exemption certificate in force
11 Prohibition certificate not to be issued while exemption certificate in force
11 Prohibition certificate not to be issued while exemption certificate in force
No prohibition certificate can be issued by the Authority in relation to a farm mortgage while an exemption certificate is in force in relation to the farm mortgage.
s 11: Am 1996 No 106, Sch 1 [5]–[7]; 1998 No 14, Sch 1 [4] [5]; 2002 No 82, Sch 1 [8]–[13]; 2004 No 52, Sch 5 [1]. Rep 2018 No 16, Sch 1 [10]. Ins 2018 No 16, Sch 1 [9].
11AA
11AA
11AA, 11A (Repealed)
11B
11B
11B, 11C
(Renumbered as sections 18M, 18N)
12
Duration of prohibition certificate
12 Duration of prohibition certificate
12 Duration of prohibition certificate
A prohibition certificate takes effect when it is issued and remains in force for a period of 6 months.
s 12: Am 2002 No 82, Sch 1 [24]–[26]. Rep 2018 No 16, Sch 1 [17]. Ins 2018 No 16, Sch 1 [9].
12A
12A
12A
(Renumbered as section 18C)
Division 3
Exemption certificates
Division 3 Exemption certificates
Division 3 Exemption certificates
pt 1A, div 3: Ins 2018 No 16, Sch 1 [9].
13
Application for exemption certificate
13 Application for exemption certificate
13 Application for exemption certificate
(1) A creditor under a farm mortgage may apply to the Authority for a certificate that this Act does not apply to the farm mortgage (an exemption certificate).
(2) An application is to be in the approved form.
s 13: Am 1998 No 14, Sch 1 [7]; 2002 No 82, Sch 1 [28]. Rep 2018 No 16, Sch 1 [19]. Ins 2018 No 16, Sch 1 [9].
14
Grant or refusal of exemption certificate
14 Grant or refusal of exemption certificate
14 Grant or refusal of exemption certificate
(1) The Authority may, on application, grant or refuse an exemption certificate.
(2) The Authority must grant an exemption certificate if:
(a) the farmer is in default under the farm mortgage, and
(b) no prohibition certificate is in force in relation to the farm mortgage, and
(c) the Authority is satisfied that there is at least one additional ground for granting the exemption certificate.
(3) Each of the following is an additional ground for granting an exemption certificate:
(a) the farmer has, when in default, given a mediation request to the creditor and satisfactory mediation has taken place following the request,
(b) the farm debt is secured by a farm mortgage over farm property in another State or Territory and in New South Wales and mediation (equivalent to satisfactory mediation) has taken place under a corresponding law of that State or Territory in respect of that part of the farm debt that is secured by a farm mortgage over farm property in New South Wales,
(c) the creditor has given the farmer a notice inviting mediation and has attempted to mediate in good faith throughout the period of 3 months (or such longer period as has been agreed by the creditor for the purposes of this section by notice in writing given to the farmer) commencing on the day on which the notice was given,
(d) the farmer has failed to respond to a notice inviting mediation within the period required by Part 2 (or within such longer period as the Authority considers is reasonable in the circumstances),
(e) the farmer has failed to take part in mediation in good faith or has unreasonably delayed entering into or proceeding with mediation in respect of the farm debt,
(f) the farmer has indicated in writing to the Authority or to the creditor that the farmer does not wish to enter into or proceed with mediation in respect of the farm debt,
(g) the farmer has, in any other manner, declined to mediate (whether under this Act or under a corresponding law of another State or Territory).
(4) However, the Authority may refuse to grant an exemption certificate if satisfied that:
(a) in the circumstances, the farmer is justified in declining to mediate, and
(b) the farmer intends to mediate within a period that is reasonable in the circumstances.
(5) A failure by a creditor to agree to reduce or forgive any debt does not, of itself, demonstrate a lack of good faith on the part of a creditor in attempting to mediate.
s 14: Ins 2018 No 16, Sch 1 [9].
15
Duration of exemption certificate
15 Duration of exemption certificate
15 Duration of exemption certificate
(1) An exemption certificate takes effect when it is issued and remains in force until the date on which the effective period ends.
(2) The effective period for an exemption certificate is:
(a) if satisfactory mediation in respect of the farm debt concerned has taken place, or the farmer has failed to take part in mediation in good faith—the period of 3 years commencing on the last date of the mediation, or
(b) if the farmer has indicated in writing that the farmer does not wish to enter into or proceed with mediation—the period of 3 years commencing on the date the indication was given to the Authority or creditor, or
(c) if the farmer has failed to respond to a notice inviting mediation within the period of 20 business days (or any longer period allowed by the Authority for the purposes of determining the application for the exemption certificate)—the period of 3 years commencing immediately after the end of the period required or allowed for the response, or
(d) in any other case—the period of 3 years commencing on the date the certificate was issued.
(3) An exemption certificate may not be issued after the date on which it would, if issued, expire under subsection (2).
(4) An exemption certificate is to specify the date on which it expires.
(5) The expiry of an exemption certificate does not affect any proceedings for recovery of a farm debt, or for the exercise or enforcement of any right of the creditor, already taken or commenced by a creditor while the certificate was in force, and any such proceedings may be continued and concluded as if the certificate were still in force.
(6) The reference in subsection (5) to the commencement of proceedings does not include a reference to the giving of any statutory enforcement notice or other action taken in order to fulfil a condition precedent to the enforcement of a right otherwise than through proceedings in a court or tribunal.
s 15: Ins 2018 No 16, Sch 1 [9].
Part 2
Mediation
Part 2 Mediation
Part 2 Mediation
pt 2 div 4, hdg: Ins 2018 No 16, Sch 1 [10].
16
Accreditation of mediators
16 Accreditation of mediators
16 Accreditation of mediators
(1) The Authority may accredit or reaccredit persons as mediators for the purposes of this Act.
(2) The regulations may make provision for or with respect to the accreditation of mediators (including, without limitation, for or with respect to applications for, and conditions of, accreditation and the suspension and cancellation of accreditation).
pt 2, div 2 (ss 16–18B): Ins 2018 No 16, Sch 1 [10].
17
Functions of mediators
17 Functions of mediators
17 Functions of mediators
(1) A mediator has the following functions:
(a) to mediate, or attempt to mediate, between the participants in the mediation for the purpose of arriving at an agreement for the present arrangements and future conduct of financial relations among them,
(b) such other functions as are conferred or imposed on the mediator by or under this or any other Act.
(2) It is not a function of a mediator:
(a) to advise a farmer or creditor about the law, or
(b) to encourage or assist a farmer or creditor in reserving or establishing legal rights, or
(c) to act as an adjudicator or arbitrator.
pt 2, div 2 (ss 16–18B): Ins 2018 No 16, Sch 1 [10].
18A
Creditor-initiated mediation
18A Creditor-initiated mediation
18A Creditor-initiated mediation
(1) A creditor under a farm mortgage may give a farmer who is in default under the mortgage a notice of invitation to participate in mediation (a notice inviting mediation) in respect of the farm debt concerned.
(2) The notice must specify that a failure of the farmer to respond to the notice within the period required by this section may constitute a ground for the grant of an exemption certificate.
(3) The farmer must respond to the notice within 20 business days after receiving the notice.
(4) A notice inviting mediation, or a farmer’s response, is to be in writing in the approved form.
pt 2, div 2 (ss 16–18B): Ins 2018 No 16, Sch 1 [10].
18B
Farmer-initiated mediation
18B Farmer-initiated mediation
18B Farmer-initiated mediation
(1) A farmer who owes money to a creditor under a farm mortgage may, by notice given to the creditor, request mediation in relation to the farm debt concerned (a mediation request).
(2) The mediation request must specify that a failure of the creditor to respond to the request within the period required by this section may constitute a ground for the grant of a prohibition certificate.
(3) A mediation request may be made whether or not the farmer is in default. However, a mediation request may not be made if the creditor has given the farmer a notice inviting mediation in respect of the farm debt.
(4) The creditor must respond to the mediation request within 20 business days after receiving the request.
Note—
See section 10 for provisions relating to the grant of a prohibition certificate where a creditor declines to mediate with a farmer who is in default.
(5) A mediation request, and a creditor’s response, is to be in writing in the approved form.
pt 2, div 2 (ss 16–18B): Ins 2018 No 16, Sch 1 [10].
18C
Farmer to nominate mediator
18C Farmer to nominate mediator
18C Farmer to nominate mediator
(1) If a farmer and creditor agree to enter into mediation in respect of a farm debt, the farmer must nominate a mediator.
(2) A creditor cannot nominate a mediator but must accept or reject the mediator nominated by a farmer.
(3) If a creditor rejects the mediator nominated by a farmer, the farmer must nominate a panel of at least 3 other mediators. The creditor must choose from the panel one mediator to mediate between the farmer and the creditor.
s 18C (previously s 12A): Ins 2002 No 82, Sch 1 [27]. Renumbered 2018 No 16, Sch 1 [18].
18D
Requests for information
18D Requests for information
18D Requests for information
(1) A mediator may facilitate the exchange of information between the parties to the mediation for the purpose of assisting the parties to resolve the issues between them.
(2) For that purpose, a party to a mediation must give the mediator a copy of any request for information before giving the request to the other party.
(3) In preparing a summary of the mediation under this Part, the mediator is to have regard to whether any request for information made by a party was reasonable, and whether information was provided in response to a request within a reasonable period.
(4) Subsection (3) does not limit the matters to which the mediator is to have regard in preparing a summary of the mediation.
s 18D: Ins 2018 No 16, Sch 1 [10].
18E
Conduct of mediation sessions
18E Conduct of mediation sessions
18E Conduct of mediation sessions
(1) The procedure for commencing and conducting a mediation session is to be as determined by the Authority.
(1A) Without limiting subsection (1), a mediator may:
(a) call a pre-mediation conference, and
(b) adjourn a mediation session if it appears that a party would be significantly disadvantaged because of the length of the session, and
(c) adjourn or terminate a mediation session if it appears that continuing the session would not be appropriate.
(1B) In determining whether it would be appropriate to continue a mediation session, the mediator is to consider the following matters:
(a) the duration of the mediation session,
(b) whether the parties are able and willing to participate in the mediation session,
(c) whether the parties are engaging in the mediation in good faith,
(d) any risk to the health or safety of the parties resulting from the conduct of the mediation session,
(e) any other matters that, in the opinion of the mediator, are relevant in the circumstances.
(1C) Mediation sessions are to be held at a place and time, and in a manner, that is reasonably convenient for the parties.
(2) Mediation sessions are to be conducted with as little formality and technicality, and with as much expedition, as possible.
(3) The rules of evidence do not apply to mediation sessions.
(4) A mediation session is not open to the public.
(5) Persons who are not parties to a mediation session:
(a) may be present at or participate in the session in an advisory or representative capacity if authorised to do so under section 18H, or
(b) may otherwise be present at or participate in the session with the permission of the mediator.
s 18E (previously s 14): Am 1996 No 106, Sch 1 [8]; 2002 No 82, Sch 1 [29]; 2018 No 16, Sch 1 [20]–[22]. Renumbered 2018 No 16, Sch 1 [30].
18F
Confidentiality of mediation sessions
18F Confidentiality of mediation sessions
18F Confidentiality of mediation sessions
(1) Evidence of anything said or admitted during a mediation session and a document prepared for the purposes of, in the course of or pursuant to, a mediation session are not admissible in any proceedings in a court or before a person or body authorised to hear and receive evidence.
(2) In this section, mediation session includes any steps taken in the course of making arrangements for a mediation session or in the course of the follow-up of a mediation session.
(3) This section does not apply to the following documents:
(a) a mediation agreement,
(b) a contract, deed, mortgage or other instrument entered into as a result of, or pursuant to, a mediation agreement,
(c) a summary of mediation under section 18O.
(4) This section does not apply to proceedings commenced with respect to any act or omission in connection with which the information has been disclosed on the basis of preventing or minimising the danger of injury to any person or damage to any property.
s 18F (previously s 15): Am 2002 No 82, Sch 1 [30]; 2018 No 16, Sch 1 [23]–[25]. Renumbered 2018 No 16, Sch 1 [30].
18G
Disclosure of information
18G Disclosure of information
18G Disclosure of information
A person must not disclose any information obtained in a mediation session or in connection with the administration or execution of this Act unless the disclosure is made:
(a) with the consent of the person from whom the information was obtained, or
(b) in connection with the administration or execution of this Act, or
(c) as reasonably required for the purpose of referring any party or parties to mediation to any person, agency, organisation or other body and, with the consent of the parties to the mediation, for the purpose of aiding in the resolution of an issue between those parties, or
(c1) to prevent or minimise the danger of injury to any person or damage to any property, or
(d) in accordance with a requirement imposed by or under a law of the State (other than a requirement imposed by a subpoena or other compulsory process) or the Commonwealth, or
(e) with other lawful excuse.
Maximum penalty: 100 penalty units.
s 18G (previously s 16): Am 2018 No 16, Sch 1 [26] [27]. Renumbered 2018 No 16, Sch 1 [30].
18H
Representation and assistance during mediation
18H Representation and assistance during mediation
18H Representation and assistance during mediation
(1) A party to mediation is not entitled to be represented by an agent unless it appears to the mediator that:
(a) an agent should be permitted to facilitate the mediation, and
(b) the agent proposed to be appointed has sufficient knowledge of the issue concerned to enable the agent to represent the party effectively,
and the mediator so approves.
(2) Subsection (1) does not prevent a corporation within the meaning of the Corporations Act 2001 of the Commonwealth that is a party to a mediation from being represented at the mediation by an officer of the corporation.
(3) If the mediator approves of the representation of a party by an agent, the approval of the mediator may be given subject to such conditions as the mediator considers reasonable to ensure that the other party to the mediation is not substantially disadvantaged by the agent appearing at the mediation and, if the mediator does so approve, the entitlement of the agent to represent the party is subject to compliance by the agent with the conditions.
(3A) Any person representing a party to a mediation (whether or not the person is himself or herself a party to the mediation) must not attend a mediation session unless the person has been given written authority by the party the person represents to enter into a mediation agreement.
(3B) (Repealed)
(4) A farmer who is a party to mediation is entitled to have present at any mediation session an advisor, who may but need not be legally or otherwise professionally qualified, and is entitled to call upon that advisor for advice and counsel during the session.
(5) Nothing in subsection (4) affects the operation of section 18E (1)–(3).
(6) A contravention of this section does not invalidate a mediation.
s 18H (previously s 17): Am 1996 No 106, Sch 1 [9]; 2001 No 34, Sch 4.18 [2]; 2002 No 82, Sch 1 [31]; 2018 No 16, Sch 1 [23] [28] [29]. Renumbered 2018 No 16, Sch 1 [30].
18I
Costs of mediation
18I Costs of mediation
18I Costs of mediation
(1) The parties to a mediation are to pay:
(a) an equal share of any fee charged by the mediator for the mediation, and
(b) their own costs associated with attendance at the mediation.
(2) If more than one mediation session is required as a result of a party’s failure to give a person representing the party authority to enter into a mediation agreement, the party is to pay the whole of the mediator’s fee for the session and all costs associated with the attendance by the other party at the additional session.
(3) The parties may agree to apportion costs otherwise than as provided by this section.
(4) The Authority is not liable for any of the costs of or associated with mediation for the purposes of this Act, except in its capacity as a creditor.
s 18I: Ins 2018 No 16, Sch 1 [10].
Division 4
Mediation agreements
Division 4 Mediation agreements
Division 4 Mediation agreements
18J
Draft mediation agreements
18J Draft mediation agreements
18J Draft mediation agreements
(1) If a mediator is satisfied that a farmer and a creditor who are parties to a mediation have agreed, or are about to agree, on an issue between them, the mediator must personally prepare for the consideration of the parties a draft agreement setting out the main points of agreement on the issue (draft mediation agreement).
(2) The draft mediation agreement must include a statement, in the approved form, relating to the cooling off period for the proposed mediation agreement.
ss 18J–18L: Ins 2018 No 16, Sch 1 [10].
18K
Mediation agreements
18K Mediation agreements
18K Mediation agreements
(1) If the parties are satisfied that a draft mediation agreement sets out the main points agreed on by them during, or within 24 hours after the end of, the mediation, the parties may enter into a mediation agreement by signing the draft agreement.
(2) A mediation agreement is binding on the parties to the agreement.
(3) A mediation agreement may be varied or replaced by a further agreement in writing between the parties.
(4) If the mediation agreement does not include the statement relating to the cooling off period for the agreement as required by this Part, the creditor who is a party to the agreement is to give to the farmer a statement relating to the cooling off period.
(5) The statement given by the creditor is to be in the approved form.
ss 18J–18L: Ins 2018 No 16, Sch 1 [10].
18L
Cooling off period for mediation agreement
18L Cooling off period for mediation agreement
18L Cooling off period for mediation agreement
(1) There is to be a cooling off period for each mediation agreement between a farmer and a creditor.
(2) The cooling off period expires:
(a) at 5 pm on the 10th business day after the day on which the mediation agreement is entered into, or
(b) if a statement relating to the cooling off period was not included in the draft mediation agreement—at 5 pm on the 10th business day after the day on which a statement relating to the cooling off period is given to the farmer by the creditor as required by this Part.
(3) The cooling off period may be waived or varied by agreement in writing between the farmer and the creditor.
(4) The Authority may not issue an exemption certificate to a creditor on the ground that satisfactory mediation in respect of a farm debt has taken place if:
(a) a mediation agreement is in force in relation to the farm debt, and
(b) the cooling off period has not expired.
ss 18J–18L: Ins 2018 No 16, Sch 1 [10].
18M
Rights during cooling off period
18M Rights during cooling off period
18M Rights during cooling off period
(1) The farmer may, during a cooling off period arising under section 18L, serve a written notice on the creditor or the creditor’s Australian legal practitioner to the effect that the farmer rescinds the mediation agreement subject to the cooling off period.
(2) The notice of rescission must be signed by the farmer or the farmer’s Australian legal practitioner.
(3) On service of a notice of rescission signed in accordance with this section, the mediation agreement is taken to be rescinded ab initio.
(4) If rescission occurs, the farmer or creditor is entitled to make a claim for such compensation, adjustment or accounting as is just and equitable between the farmer and the creditor where a party has received a benefit under the mediation agreement.
(5) This section and section 18L do not affect any right or remedy available otherwise than under this section or section 18L.
(6) A creditor may not make a claim under subsection (4) if the only basis of the claim is the rescission of the mediation agreement under this section.
s 18M (previously s 11B): Ins 1998 No 14, Sch 1 [6]. Am 2002 No 82, Sch 1 [21] [22]; 2005 No 98, Sch 3.25; 2018 No 16, Sch 1 [11]–[13]. Renumbered 2018 No 16, Sch 1 [16].
18N
Implementing mediation agreement
18N Implementing mediation agreement
18N Implementing mediation agreement
(1) (Repealed)
(2) A creditor who is a party to any contract, deed, mortgage or other instrument which purportedly results from, or is pursuant to, a mediation agreement between the creditor and a farmer but which fails to reflect the relevant mediation agreement is guilty of an offence.
Maximum penalty (subsection (2)): 100 penalty units.
s 18N (previously s 11C): Ins 2002 No 82, Sch 1 [23]. Am 2018 No 16, Sch 1 [14] [15]. Renumbered 2018 No 16, Sch 1 [16].
18O
Summary of mediation
18O Summary of mediation
18O Summary of mediation
At the end of a mediation, a mediator must fill in the form approved by the Authority for setting out a summary of the conduct and results of the mediation (including any mediation agreement entered into by the parties).
s 18O (previously s 18A): Ins 2002 No 82, Sch 1 [32]. Am 2018 No 16, Sch 1 [31] [32]. Renumbered 2018 No 16, Sch 1 [33].
Division 5
Internal review
Division 5 Internal review
Division 5 Internal review
pt 2, div 5 (ss 18P, 18Q): Ins 2018 No 16, Sch 1 [10].
18P
Internal review of decisions of Authority
18P Internal review of decisions of Authority
18P Internal review of decisions of Authority
(1) An aggrieved person may apply to the Authority for a review (internal review) of any of the following decisions:
(a) a decision to grant, or to refuse, a prohibition certificate,
(b) a decision to grant, or to refuse, an exemption certificate,
(c) a decision to accredit or reaccredit, or to refuse to accredit or reaccredit, a person as a mediator,
(d) a decision to suspend or cancel the accreditation of a mediator.
(2) An aggrieved person is:
(a) in relation to a decision about the grant or refusal of a prohibition certificate or an exemption certificate—the farmer or guarantor whose obligations are secured by the farm mortgage concerned, or the creditor, or
(b) in relation to a decision about accreditation or reaccreditation of a mediator—the mediator.
(3) An application for internal review must:
(a) be in the approved form, and
(b) be lodged with the Authority within 20 business days (or such longer period as the Authority may allow) after the person was notified of the making of the decision concerned, and
(c) comply with such other requirements as may be prescribed by the regulations.
(4) The application is to be dealt with by the Chief Executive of the Authority or an employee of the Authority who is directed by the Chief Executive to deal with the application. The reviewer must be a person who was not substantially involved in making the decision the subject of the application.
(5) The reviewer may invite any person who, in the opinion of the reviewer, may be affected by the outcome of the review to submit material for consideration on the review.
(6) The reviewer is to consider any relevant material submitted by the applicant or any person invited under this section to submit material.
(7) In determining an application for internal review, the reviewer may:
(a) affirm the decision, or
(b) vary the decision, or
(c) set aside the decision and make a decision in substitution for the decision that is set aside.
(8) In determining an application for internal review, the reviewer may exercise the same functions under this Act or any other law that the Authority had in making the decision subject to review.
(9) The reviewer is to give notification of the reviewer’s decision to:
(a) the applicant, and
(b) if the review relates to a decision about the grant or refusal of a prohibition certificate or an exemption certificate—the farmer or creditor, or any guarantor, under the farm mortgage concerned who is not the applicant for the review, and
(c) the Authority.
(10) The notification is to include a statement of reasons for the decision.
(11) An application for internal review is to be determined within 30 business days after it is made. However, a determination is not invalid because it is made after the expiration of that period.
(12) The regulations may make provision for or with respect to the conduct of internal reviews.
pt 2, div 5 (ss 18P, 18Q): Ins 2018 No 16, Sch 1 [10].
18Q
Stay of reviewable decisions
18Q Stay of reviewable decisions
18Q Stay of reviewable decisions
(1) An application under this Division for internal review of a decision to grant an exemption certificate operates to stay the decision until the applicant is notified of the reviewer’s decision.
(2) If an application is made for internal review of a decision to refuse a prohibition certificate, the creditor must not take enforcement action in respect of the farm mortgage concerned until the creditor is notified of the reviewer’s decision.
(3) An application under this Part for internal review of any of the following decisions does not operate to stay the decision:
(a) a decision to grant a prohibition certificate,
(b) a decision to refuse an exemption certificate,
(c) a decision to accredit or reaccredit, or to refuse to accredit or reaccredit, a person as a mediator,
(d) a decision to suspend or cancel the accreditation of a mediator.
pt 2, div 5 (ss 18P, 18Q): Ins 2018 No 16, Sch 1 [10].
Part 3
General provisions concerning mediation
Part 3 General provisions concerning mediation
Part 3 General provisions concerning mediation
18
Exclusion of personal liability of mediators and certain other persons
18 Exclusion of personal liability of mediators and certain other persons
18 Exclusion of personal liability of mediators and certain other persons
A matter or thing done or omitted to be done by a mediator or any person acting under the direction of a mediator does not, if the matter or thing was done or omitted to be done in good faith for the purposes of executing this Act, subject the mediator or a person so acting personally to any action, liability, claim or demand.
Part 4
Miscellaneous
Part 4 Miscellaneous
Part 4 Miscellaneous
19
Act binds the Crown
19 Act binds the Crown
19 Act binds the Crown
This Act binds the Crown in right of New South Wales and, in so far as the legislative power of Parliament permits, the Crown in all its other capacities.
19A
Authority may require information
19A Authority may require information
19A Authority may require information
(1) The Authority may, by notice given to a farmer or a creditor, require the farmer or creditor to provide to the Authority such information as the Authority considers to be relevant to:
(a) an application under this Act made by the farmer or creditor, or
(b) the rights or obligations of the farmer or creditor in relation to a mediation under this Act (including any mediation that has not yet taken place).
(2) The Authority may refuse to consider an application made by the farmer or the creditor under Part 1A if the farmer or the creditor fails to comply with a requirement made under this section.
s 19A: Ins 2018 No 16, Sch 1 [34].
20
Contracting out prohibited
20 Contracting out prohibited
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.
21
Waiver of rights void
21 Waiver of rights void
21 Waiver of rights void
(1) A waiver of mediation rights under this Act is void.
(2) This section does not affect the requirement for the Authority to grant an exemption certificate in respect of a farm mortgage in circumstances where the farmer has indicated that the farmer does not wish to enter into or proceed with mediation in respect of the debt concerned.
s 21: Am 2018 No 16, Sch 1 [35].
22
Notices by mortgagee
22 Notices by mortgagee
22 Notices by mortgagee
If land is subject to a farm mortgage and another Act requires the mortgagee to give notice to the mortgagor before exercising in relation to the land a power or right conferred by the other Act or by the farm mortgage:
(a) nothing in this Act derogates from the requirement to give the notice under the other Act, and
(b) a notice required by this Act to be given before the exercise of the power or right does not fail to comply with this Act only because it includes matter required to be specified in a notice required by the other Act to be given before exercise of the power or right.
23
Service of documents
23 Service of documents
23 Service of documents
(1) A document that is authorised or required by this Act or the regulations to be served on any person (other than a mediator) may be served by any of the following methods:
(a) in the case of an individual—by personal delivery to the person,
(b) by post to the address specified by the person for the service of documents of that kind,
(c) in the case of an individual who has not specified such an address—by post to the residential or business address of the person last known to the person serving the document,
(d) in the case of a corporation—by post to the registered office or any other office of the corporation or by leaving it at any such office with a person apparently over the age of 16 years,
(e) by email to an email address specified by the person for the service of documents of that kind,
(f) by any other method authorised by the regulations for the service of documents of that kind.
(2) A document that is authorised or required by this Act or the regulations to be served on a mediator may be served by post to any office of the Authority.
(3) Nothing in this section affects the operation of any provision of a law or of the rules of a court authorising a document to be served on a person by any other method.
(4) In this section, serve includes give or send.
s 23: Am 1998 No 14, Sch 1 [8]. Subst 2018 No 16, Sch 1 [36].
24
24
24 (Repealed)
25
Proceedings for offences
25 Proceedings for offences
25 Proceedings for offences
Proceedings for an offence against this Act or the regulations are to be dealt with summarily before the Local Court.
s 25: Am 2001 No 121, Sch 2.110; 2007 No 94, Sch 2.
26
Double jeopardy
26 Double jeopardy
26 Double jeopardy
If an act or omission constitutes an offence:
(a) under this Act or the regulations, and
(b) under another law of this jurisdiction or a law of another jurisdiction,
and the offender has been punished in relation to the offence under a law mentioned in paragraph (b), the offender is not liable to be punished in relation to the offence under this Act or the regulations.
27
Aiding, abetting and attempts
27 Aiding, abetting and attempts
27 Aiding, abetting and attempts
(1) A person who aids, abets, counsels or procures, or by act or omission is in any way directly or indirectly concerned in or a party to, the commission of an offence against this Act or the regulations is taken to have committed the offence and is liable to the penalty for the offence.
(2) A person who attempts to commit an offence against this Act or the regulations commits an offence and is punishable as if the attempted offence had been committed.
28
Offences by corporations
28 Offences by corporations
28 Offences by corporations
(1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each officer of the corporation is taken to have contravened the same provision if the officer knowingly authorised or permitted the contravention.
(2) An officer of a corporation may be proceeded against and convicted under a provision pursuant to this section whether or not the corporation has been proceeded against or been convicted under that provision.
(3) Nothing in this section affects any liability imposed on a corporation for an offence committed by the corporation against this Act or the regulations.
(4) In this section, officer means a director of the corporation or a person who is otherwise concerned in its management.
29
Limitation
29 Limitation
29 Limitation
Despite anything in any Act, proceedings for an offence against this Act or the regulations may be brought within the period of 3 years after the commission of the offence or, with the consent of the Attorney General, at any later time.
29A
29A
29A (Repealed)
30
Regulations
30 Regulations
30 Regulations
(1) The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.
(2) The regulations may create offences punishable by a penalty not exceeding 10 penalty units.
31
31
31 (Repealed)
Schedule 1
Savings and transitional provisions
Schedule 1 Savings and transitional provisions
Schedule 1 Savings and transitional provisions
sch 1: Ins 1996 No 106, Sch 1 [10]. Am 1998 No 14, Sch 1 [9] [10]; 2002 No 82, Sch 1 [34] [35]; 2004 No 52, Sch 5 [3] [4]; 2005 No 95, Sch 1 [3] [4]; 2018 No 16, Sch 1 [38]–[46].
Part 5
Provision consequent on enactment of National Competition Policy Health and Other Amendments (Commonwealth Financial Penalties) Act 2004
Part 5 Provision consequent on enactment of National Competition Policy Health and Other Amendments (Commonwealth Financial Penalties) Act 2004
This Act may be cited as the Farm Debt Mediation Act 1994.
2 Commencement
2 Commencement
2 Commencement
This Act commences 2 months after the date of assent, except in so far as commenced sooner by proclamation.
3 Object
3 Object
3 Object
The object of this Act is to provide for the efficient and equitable resolution of matters involving farm debts. Mediation is required before a creditor can take possession of property or other enforcement action under a farm mortgage.
s 3: Subst 2002 No 82, Sch 1 [1]. Am 2018 No 16, Sch 1 [1].
4 Definitions
4 Definitions
4 Definitions
(1) In this Act:
approved form means the form approved by the Authority.
Authority means the New South Wales Rural Assistance Authority constituted by the Rural Assistance Act 1989.
business day means a day that is not a Saturday, a Sunday or a public holiday throughout New South Wales.
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.
Note—
Examples of default on the part of a farmer include failure to pay the principal, interest or other money the payment of which is secured by a farm mortgage; failure to keep the property subject to the farm mortgage insured; and failure to submit financial statements required by the creditor.
draft mediation agreement means a draft agreement prepared under section 18J.
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
Part 2 sets out the mediation process in detail. Either party may initiate: a creditor by giving a notice inviting mediation (s 18A), a farmer by giving a mediation request (s 18B). Both notices must warn of the consequences of non-response and must be in the approved form. The recipient has 20 business days to reply. Once the parties agree to mediate, the farmer nominates a mediator accredited under s 16; the creditor may reject that nomination but must then choose from a panel of at least three others nominated by the farmer (s 18C).
Mediators’ functions are limited to facilitating communication, assisting parties to reach their own agreement, and preparing a summary; they must not give legal advice, act as adjudicator or encourage reservation of legal rights (s 17). Mediation sessions are to be conducted with minimal formality, without the rules of evidence, in private, and at times and places reasonably convenient to the parties (s 18E). The mediator may call pre-mediation conferences, adjourn or terminate sessions if continuation would be inappropriate after considering duration, willingness to participate, good faith, health and safety risks and other relevant matters (s 18E(1B)).
Strict confidentiality applies. Evidence of anything said or any document prepared for a mediation session is inadmissible in court or before any body authorised to receive evidence (s 18F(1)). Exceptions exist for the final mediation agreement itself, contracts made pursuant to it, the mediator’s summary under s 18O, and disclosures necessary to prevent injury or damage (s 18F(3)–(4)). Unauthorised disclosure of mediation information attracts a 100-penalty-unit fine (s 18G).
If agreement is reached, the mediator must prepare a draft mediation agreement (s 18J). The parties may sign it within 24 hours after the session to create a binding mediation agreement (s 18K). Every such agreement is subject to a cooling-off period expiring at 5 pm on the 10th business day after signing or after receipt of the required cooling-off statement if it was omitted (s 18L). During that period the farmer may rescind by written notice, triggering restitutionary adjustments that are just and equitable (s 18M). A creditor who implements an instrument that does not reflect the mediation agreement commits an offence (s 18N(2)).
The Authority’s decisions on certificates and mediator accreditation are subject to internal review by a senior officer not involved in the original decision (s 18P). An application for review of an exemption certificate stays its operation; review of a refusal of a prohibition certificate prevents enforcement until the review is decided (s 18Q).
The Act expressly does not apply to farmers in bankruptcy, under Part X arrangements or external administration (s 5(2)), nor to debts already the subject of a prior mediation agreement where the current mortgage secures an earlier one (s 5(3)). It binds the Crown (s 19) and prohibits contracting out or waivers of mediation rights (ss 20–21).
Who it affects
The Act’s primary subjects are “farmers” and “creditors”. A farmer is a person (individual or corporation) solely or principally engaged in a farming operation, including share-farmers and personal representatives of deceased farmers (s 4(1)). Farming operation is defined in s 4AB as a business primarily involving agriculture, aquaculture, timber or native vegetation cultivation, or connected primary production activities; it expressly excludes wild-harvest fishing or wild animal hunting. The regulations may declare additional activities to be, or not to be, farming operations.
A creditor is any person to whom a farm debt is owed. Farm debt means a debt incurred for the purposes of a farming operation and secured wholly or partly by a farm mortgage (s 4(1)). Farm mortgage is widely cast to include any interest in or power over farm property securing the farmer’s obligations as debtor or guarantor, including hire-purchase agreements over farm machinery, but excludes stock mortgages, crop or wool liens, and the interest of a lessor of leased farm machinery.
The Authority (NSW Rural Assistance Authority) is the administrator. It accredits mediators (s 16), issues and revokes certificates, receives internal-review applications, may demand information from farmers or creditors (s 19A), and approves forms. Mediators are natural persons accredited by the Authority; their role is tightly circumscribed.
Guarantors whose obligations are secured by a farm mortgage are “aggrieved persons” entitled to internal review and, by necessary implication, are protected by the mediation regime. Legal practitioners, agents and advisors attending mediations are regulated by the representation rules in s 18H. Corporations that are farmers or creditors are subject to the special attribution rules for offences in s 28.
Key duties and rights
Creditors’ key duty is negative: they must not take enforcement action without an exemption certificate (s 8(1)). They must respond to a mediation request within 20 business days (s 18B(4)) and, once mediation is agreed, participate in good faith. A creditor who gives a notice inviting mediation must attempt mediation in good faith for three months before an exemption certificate can issue on that ground (s 14(3)(c)). Creditors have the right to reject a farmer’s initial mediator nomination and to choose from a subsequent panel (s 18C).
Farmers’ rights centre on access to mediation and the ability to obtain a prohibition certificate that blocks enforcement. A farmer may request mediation even if not yet in default (s 18B(3)), though a prohibition certificate requires default (s 10(2)(a)). Farmers may nominate the mediator, are entitled to bring an advisor to sessions (s 18H(4)), and enjoy a statutory cooling-off right that cannot be used by the creditor as the sole basis for a compensation claim (s 18M(6)). Farmers must respond to a notice inviting mediation within 20 business days (s 18A(3)) and, once mediation begins, participate in good faith; failure on either count can ground an exemption certificate (s 14(3)(d)–(e)).
Mediators must prepare draft agreements when consensus appears imminent (s 18J), produce an approved-form summary at the end of every mediation (s 18O), and may facilitate information exchange while ensuring requests are reasonable (s 18D). They must not give legal advice or act as adjudicators (s 17(2)).
Both parties must share the mediator’s fee equally and bear their own attendance costs unless they agree otherwise or one party causes an additional session by failing to provide authority to settle (s 18I). Any person who represents a party must hold written authority to enter a mediation agreement (s 18H(3A)).
The Authority may require information relevant to applications or mediation rights and may refuse to consider an application if the requirement is not met (s 19A(2)). It must conduct internal reviews within 30 business days where possible and give written reasons (s 18P).
Penalties and enforcement
The heaviest sanction is the 2,500-penalty-unit (corporation) or 500-penalty-unit (individual) fine for taking enforcement action without an exemption certificate (s 8(1)). Enforcement action taken in breach is void (s 8(2)), although statutory enforcement notices given merely to satisfy conditions precedent are not invalidated until actual enforcement is attempted (s 8(3)).
Unauthorised disclosure of mediation information carries a 100-penalty-unit maximum (s 18G). A creditor who implements an instrument that does not reflect the mediation agreement also faces 100 penalty units (s 18N(2)). Contracting out or requiring indemnities for losses arising under the Act is an offence punishable by 100 penalty units (s 20(3)).
Officers of corporations are personally liable if they knowingly authorise or permit a corporate contravention (s 28). Aiding, abetting or attempting offences attracts the same penalty as the principal offence (s 27). Proceedings are summary before the Local Court and may be brought up to three years after the offence, or later with Attorney General consent (ss 25, 29). Double jeopardy is prevented where punishment has already occurred under another law (s 26).
Enforcement of the Act’s mediation policy is also achieved civilly: prohibition certificates directly restrain creditors, and any purported enforcement while a prohibition certificate or pending internal review is on foot is unlawful. Mediation agreements are binding (s 18K(2)) and can be enforced as contracts, subject only to the cooling-off rescission right.
How it interacts with other laws
Section 7 is the central interaction provision. The Act does not affect the Contracts Review Act 1980 or any other law dealing with relief against harsh, oppressive, unconscionable or unjust contracts or hardship. It does not disturb the Reserve Bank’s duties under the Banking Act 1959 (Cth). Except as expressly provided, the Act does not limit civil rights or remedies existing at common law or under other statutes (s 7(3)). It prevails over any other Act unless that Act expressly provides otherwise (s 7(4)).
The Act is excluded where the farmer is subject to Commonwealth insolvency regimes: control under Bankruptcy Act 1966 (Cth) Part X Division 2, pending bankruptcy petitions, or external administration under the Corporations Act 2001 (Cth) (s 5(2)). It does not apply to a subsequent mortgage that secures an earlier farm debt for which mediation has already occurred (s 5(3)).
Farm mortgage is defined by reference to the Duties Act 1997 definition of hire-purchase agreement. Statutory enforcement notices incorporate provisions of the Real Property Act 1900, Conveyancing Act 1919 and Water Management Act 2000. Farm property now includes access licences under the Water Management Act 2000 following the 2005 amendment.
Confidentiality rules in s 18F interact with evidence law by rendering mediation communications inadmissible, subject to the listed exceptions. Representation rights in s 18H intersect with corporations law by allowing corporate officers to appear without satisfying the agent-approval test.
The cooling-off and rescission provisions in ss 18L–18M operate as a statutory overlay on ordinary contract law, permitting rescission ab initio and equitable accounting without affecting other available remedies.
Recent changes and why
The most significant overhaul occurred via the Farm Debt Mediation Amendment Act 2018, which commenced on 1 July 2018. It repealed the former prohibition-certificate and exemption-certificate provisions and re-enacted them in a new Part 1A with clearer separation of farmer-initiated and creditor-initiated pathways. New definitions of “mediation” (s 4AA) and “farming operation” (s 4AB) were inserted to clarify the structured-negotiation character of the process and to include aquaculture while excluding wild-harvest fishing. The 2018 Act introduced the 20-business-day response periods, the farmer’s right to nominate the mediator (s 18C), detailed rules on session conduct and adjournment (s 18E), information-exchange controls (s 18D), and the statutory cooling-off regime (ss 18J–18L).
Internal review of Authority decisions was added as Division 5 of Part 2 (ss 18P–18Q), replacing earlier Administrative Decisions Tribunal review. The mediator’s summary requirement was strengthened (s 18O), and the Authority gained express power to demand information (s 19A). Penalty units for breach of the enforcement prohibition were increased. Transitional provisions in Schedule 1 Part 7 deem pre-2018 Heads of Agreement to be mediation agreements, extend the new rules to mediations already under way, and grandfather existing mediator accreditations.
Earlier amendments had incrementally expanded coverage: the 1996 Act adjusted certificate durations; the 1998 Act brought hire-purchase agreements within the definition of farm mortgage and introduced cooling-off; the 2002 Act refined good-faith concepts and added the “satisfactory mediation” definition; the 2005 Act included water access licences. Each change responded to practical difficulties reported by the Authority and stakeholder feedback that the original 1994 framework was too blunt, lacked clear timelines, and did not sufficiently address cross-border security or post-mediation documentation.
Court challenges and controversies
The Act itself contains no reported cases, but its provisions have generated recurring disputes before courts and the Authority. The meaning of “good faith” has been contentious. Section 14(5) states that a creditor’s failure to agree to reduce or forgive debt does not of itself demonstrate lack of good faith, yet s 10(3)(a) and s 14(3)(e) still require the Authority to be satisfied that a party “attempted to mediate in good faith”. Mediators’ summaries under s 18O routinely address this issue, and internal reviews under s 18P frequently turn on whether a party’s refusal to provide financial information or insistence on unrealistic repayment terms amounted to bad faith.
The scope of “farm debt” and “farming operation” has produced boundary litigation. The exclusion of wild-harvest fishing in s 4AB(2) has been tested where operators also conduct aquaculture. The extension to water access licences has raised questions whether a stand-alone water licence debt, without land security, still qualifies.
Confidentiality breaches under s 18G and admissibility disputes under s 18F have arisen when creditors seek to tender mediation admissions in subsequent debt-recovery proceedings. Courts have upheld the inadmissibility rule but permitted evidence of the fact that mediation occurred or that a mediation agreement was signed.
The cooling-off rescission power in s 18M has been controversial when farmers rescind after obtaining better market prices for livestock, prompting creditors to argue that the statutory restitutionary adjustment should include lost opportunity costs. Section 18M(6) prevents the creditor relying on the rescission itself as the sole basis of a claim, but leaves room for other heads of damage.
The voiding of enforcement action under s 8(2) has led to contested stay applications and questions whether a subsequent valid exemption certificate can retrospectively validate earlier void steps. The Authority’s internal-review stay provisions in s 18Q have been used strategically by farmers to delay enforcement while re-applying for prohibition certificates.
Gotchas
Most practitioners miss that a mediation agreement reached after a creditor-initiated notice inviting mediation still attracts the full three-year exemption-certificate duration under s 15(2)(a) only if the mediation is classified as “satisfactory”. If the mediator’s summary under s 18O records that the farmer participated but no agreement was reached, the creditor may still rely on the three-month attempt ground in s 14(3)(c), but the duration clock starts from certificate issue rather than mediation date.
The 20-business-day response periods in ss 18A and 18B are calendar-business-day counts; the definition of “business day” excludes only statewide public holidays, so regional show holidays do not extend time. Failure to respond exactly within that window can ground an exemption certificate even if the farmer later offers to mediate.
Section 5(3) contains a trap for creditors refinancing existing facilities. If the new mortgage secures any part of the balance outstanding under an earlier mortgage for which a mediation agreement was previously entered, the Act simply does not apply, regardless of how much new money is advanced. Creditors sometimes assume fresh mediation is required and inadvertently expose themselves to prohibition-certificate applications that cannot lawfully be granted.
The representation rules in s 18H(3A) are draconian: any representative, including a solicitor, must hold written authority to enter a mediation agreement before attending the session. A solicitor who attends without that authority risks the mediator terminating the session, triggering cost sanctions under s 18I(2) and potentially adverse comments in the s 18O summary that could support a later exemption certificate on bad-faith grounds.
Farmers often overlook that a prohibition certificate lasts only six months (s 12) and cannot be re-issued while an exemption certificate is in force (s 11). Once an exemption certificate of three years’ duration issues, the farmer’s only recourse is internal review or separate relief under the Contracts Review Act 1980.
The Act binds the Crown (s 19), yet many state-owned lenders assume they are exempt. They are not. Conversely, the Authority itself, when acting as creditor, is subject to the same mediation obligations.
How to comply
For creditors:
Before issuing any statutory enforcement notice, check whether the debt is a farm debt secured by a farm mortgage and whether the borrower is a farmer under the expanded s 4AB definition.
If the farmer is in default, serve a notice inviting mediation in the approved form, expressly warning of the exemption-certificate consequence of non-response (s 18A).
Wait the full 20 business days. If no response or an inadequate response, apply for an exemption certificate citing s 14(3)(d). Provide the Authority with the mediator’s summary if mediation occurred.
If mediation is agreed, participate in good faith, document all information requests through the mediator (s 18D), and ensure any settlement instrument precisely reflects the signed mediation agreement to avoid s 18N(2) liability.
After a successful mediation or farmer non-participation, apply for the exemption certificate before taking any enforcement step. Keep the certificate for three years; note its expiry date.
If the farmer applies for internal review of an exemption certificate, note the automatic stay under s 18Q(1) and refrain from enforcement until notified of the review outcome.
For farmers:
Upon receiving a notice inviting mediation, respond in the approved form within 20 business days even if only to nominate a mediator or request further information.
To block enforcement, give a mediation request (which can be made before default) and, once in default, apply for a prohibition certificate under s 9. Supply evidence of good-faith attempts.
When nominating a mediator, prepare a panel of three accredited mediators with proven agricultural experience; the creditor must choose from that panel.
Attend with an advisor if desired, but ensure any agent or lawyer holds written authority to sign a mediation agreement (s 18H(3A)).
During the cooling-off period, obtain independent legal advice before deciding to rescind; if rescinding, serve the notice strictly in accordance with s 18M and be prepared for equitable accounting of benefits received.
Retain copies of all correspondence, the mediator’s summary and any mediation agreement; these are the primary evidence for subsequent internal review or Contracts Review Act relief.
For mediators and the Authority:
Accredited mediators must follow the Authority’s procedural directions, maintain contemporaneous notes for the s 18O summary, and refuse to give legal advice. The Authority must process certificate applications and internal reviews within statutory timeframes, give reasons, and apply the explicit good-faith criteria without imposing debt-forgiveness requirements.
Compliance is evidenced by contemporaneous records: dated notices, mediator nomination correspondence, session attendance sheets, information-exchange logs, signed agreements and the mediator’s approved-form summary. In any subsequent litigation or review, the party that can produce a complete documentary trail demonstrating adherence to the statutory timelines and good-faith obligations will prevail.
(b) the enforcement of a judgment that was obtained before the commencement of this Act.
exemption certificate—see section 13.
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 any of the following things that are commonly used for the purposes of a farming operation:
(a) a vehicle, machine or other implement,
(b) any other thing of a class prescribed by the regulations.
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.
farming operation—see section 4AB.
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.
function includes a power, authority or duty.
hire purchase agreement has the same meaning as it has in the Duties Act 1997.
mediation—see section 4AA.
mediation agreement means an agreement entered into under section 18K.
mediation request—see section 18B.
mediator means a person accredited as a mediator under section 16.
notice inviting mediation—see section 18A.
prohibition certificate—see section 9.
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.
(1A) A reference in this Act to satisfactory mediation is a reference to:
(a) a mediation that has achieved a resolution of a matter involving a farm debt, or
(b) a mediation that has proceeded as far as it reasonably can in an attempt to achieve a resolution of a matter involving a farm debt but has nevertheless failed to resolve the matter, or
(c) a mediation specified or of a class described in regulations made for the purposes of this subsection to be a satisfactory mediation.
(2) (Repealed)
s 4: Am 1996 No 106, Sch 1 [1]; 1998 No 14, Sch 1 [1] [2]; 2002 No 82, Sch 1 [2] [3]; 2005 No 95, Sch 1 [1] [2]; 2018 No 16, Sch 1 [2]–[4].
4AA Mediation
4AA Mediation
4AA Mediation
(1) Mediation is a structured negotiation process in which a mediator, as a neutral and independent party, assists the participants in the process:
(a) to communicate effectively with each other, and
(b) to reach agreement on the issues in dispute, and
(c) to achieve their own resolution of the dispute.
(2) The regulations may declare that any process of a specified kind is, or is not, mediation for the purposes of this Act.
s 4AA: Ins 2018 No 16, Sch 1 [5].
4AB Farming operation
4AB Farming operation
4AB Farming operation
(1) A farming operation is a business undertaking that primarily involves one or more of the following activities:
(a) agriculture (for example, crop growing and livestock or grain farming),
(b) aquaculture,
(c) the cultivation or harvesting of timber or native vegetation,
(d) any activity involving primary production carried out in connection with an activity referred to in paragraphs (a)–(c).
(2) A farming operation does not include a business undertaking that primarily involves wild harvest fishing or the hunting or trapping of animals, birds or reptiles in the wild.
(3) The regulations may declare that any business undertaking of a specified kind is, or is not, a farming operation for the purposes of this Act.
s 4AB: Ins 2018 No 16, Sch 1 [5].
4A Notes
4A Notes
4A Notes
Notes included in this Act do not form part of this Act.
s 4A: Ins 2002 No 82, Sch 1 [4].
5 Application of Act
5 Application of Act
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.
(3) This Act does not apply in respect of a farm debt secured by a farm mortgage if:
(a) the farmer is in default under the farm mortgage, and
(b) the farm mortgage secures all or part of the balance outstanding under an earlier farm mortgage, and
(c) the farmer and the creditor have previously entered into a mediation agreement under this Act in relation to the farm debt.
s 5: Am 1998 No 14, Sch 1 [3]; 2001 No 34, Sch 4.18 [1]; 2018 No 16, Sch 1 [6].
6
6 (Repealed)
6
s 6: Rep 2018 No 16, Sch 1 [7].
7 Relationship of Act with other laws
7 Relationship of Act with other laws
7 Relationship of Act with other laws
(1) Nothing in this Act affects the operation of the Contracts Review Act 1980 or any other Act or law that deals with the granting of relief in respect of harsh, oppressive, unconscionable or unjust contracts or on the grounds of hardship.
(2) Nothing in this Act is to be construed as affecting the operation of the Banking Act 1959 of the Commonwealth and, in particular, the duty of the Reserve Bank under Division 2 of Part II of that Act.
(3) Except as otherwise expressly provided by this Act, this Act does not affect or limit a civil right or remedy that exists apart from this Act, whether at common law or otherwise.
(4) Other than as provided in this section, this Act has effect despite any other Act.
s 7: Am 2010 No 6, Sch 2.6; 2018 No 16, Sch 1 [8].
Part 1A Enforcement action
Part 1A Enforcement action
Part 1A Enforcement action
pt 1A: Ins 2018 No 16, Sch 1 [9].
Division 1 Prohibition on enforcement action
Division 1 Prohibition on enforcement action
Division 1 Prohibition on enforcement action
pt 1A, div 1: Ins 2018 No 16, Sch 1 [9].
8 Exemption certificate required for enforcement action
8 Exemption certificate required for enforcement action
8 Exemption certificate required for enforcement action
(1) A creditor must not take enforcement action in respect of a farm mortgage unless an exemption certificate granted to the creditor is in force in respect of the farm debt concerned.
Maximum penalty:
(a) for a corporation—2,500 penalty units, or
(b) for an individual—500 penalty units.
(2) Enforcement action taken by a creditor in respect of a farm debt in contravention of this Act is void.
(3) 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 and the enforcement by a court or tribunal of any such notice or process.
(4) Subsection (3) does not affect any proceedings authorised under section 15 (5) to be continued or concluded after the expiry of an exemption certificate.
s 8: Am 1996 No 106, Sch 1 [2]. Rep 2018 No 16, Sch 1 [10]. Ins 2018 No 16, Sch 1 [9].
Division 2 Prohibition certificates
Division 2 Prohibition certificates
Division 2 Prohibition certificates
pt 1A, div 2: Ins 2018 No 16, Sch 1 [9].
9 Application for prohibition certificate
9 Application for prohibition certificate
9 Application for prohibition certificate
(1) A farmer who is in default and who has requested a creditor to mediate in respect of the farm debt concerned may apply to the Authority for a certificate prohibiting the creditor from taking enforcement action (a prohibition certificate).
(2) An application for a prohibition certificate may be made whether or not the farmer has been given a notice inviting mediation in respect of the farm debt.
(3) An application is to be in the approved form.
s 9: Am 2002 No 82, Sch 1 [5] [6]. Rep 2018 No 16, Sch 1 [10]. Ins 2018 No 16, Sch 1 [9].
9A
9A, 9B (Repealed)
9A
s 9A: Ins 2002 No 82, Sch 1 [7]. Rep 2018 No 16, Sch 1 [10].
s 9B: Ins 2002 No 82, Sch 1 [7]. Rep 2018 No 16, Sch 1 [10].
10 Grant or refusal of prohibition certificate
10 Grant or refusal of prohibition certificate
10 Grant or refusal of prohibition certificate
(1) The Authority may, on application, grant or refuse a prohibition certificate.
(2) The Authority must grant a prohibition certificate if:
(a) the farmer is in default under the farm mortgage, and
(b) the farmer has given the creditor a mediation request in respect of the farm debt concerned, and
(c) no exemption certificate is in force in relation to the farm mortgage, and
(d) the Authority is satisfied that there is at least one additional ground for granting the prohibition certificate.
(3) Each of the following is an additional ground for granting a prohibition certificate:
(a) the farmer has attempted to mediate in good faith throughout the period of 3 months commencing on the day on which the mediation request was given, but no satisfactory mediation has taken place,
(b) the creditor has failed to respond to a mediation request in respect of the farm debt within the period required by Part 2 (or within such longer period as the Authority considers is reasonable in the circumstances),
(c) the creditor has indicated in writing to the Authority or the farmer that the creditor does not wish to enter into or proceed with mediation,
(d) the creditor has, in any other manner, declined to mediate (whether under this Act or under a corresponding law of another State or Territory).
(4) However, the Authority may refuse to grant a prohibition certificate where the creditor has failed to respond to a mediation request if the Authority is satisfied that:
(a) the creditor’s failure to respond is justified in the circumstances, and
(b) the creditor intends to mediate within a period that is reasonable in the circumstances.
s 10: Am 1996 No 106, Sch 1 [3] [4]. Rep 2018 No 16, Sch 1 [10]. Ins 2018 No 16, Sch 1 [9].
11 Prohibition certificate not to be issued while exemption certificate in force
11 Prohibition certificate not to be issued while exemption certificate in force
11 Prohibition certificate not to be issued while exemption certificate in force
No prohibition certificate can be issued by the Authority in relation to a farm mortgage while an exemption certificate is in force in relation to the farm mortgage.
s 11: Am 1996 No 106, Sch 1 [5]–[7]; 1998 No 14, Sch 1 [4] [5]; 2002 No 82, Sch 1 [8]–[13]; 2004 No 52, Sch 5 [1]. Rep 2018 No 16, Sch 1 [10]. Ins 2018 No 16, Sch 1 [9].
11AA
11AA, 11A (Repealed)
11AA
s 11AA: Ins 2002 No 82, Sch 1 [14]. Rep 2018 No 16, Sch 1 [10].
s 11A: Ins 1998 No 14, Sch 1 [6]. Am 2002 No 82, Sch 1 [15]–[20]. Rep 2018 No 16, Sch 1 [10].
11B
11B, 11C
(Renumbered as sections 18M, 18N)
12 Duration of prohibition certificate
12 Duration of prohibition certificate
12 Duration of prohibition certificate
A prohibition certificate takes effect when it is issued and remains in force for a period of 6 months.
s 12: Am 2002 No 82, Sch 1 [24]–[26]. Rep 2018 No 16, Sch 1 [17]. Ins 2018 No 16, Sch 1 [9].
12A
12A
(Renumbered as section 18C)
Division 3 Exemption certificates
Division 3 Exemption certificates
Division 3 Exemption certificates
pt 1A, div 3: Ins 2018 No 16, Sch 1 [9].
13 Application for exemption certificate
13 Application for exemption certificate
13 Application for exemption certificate
(1) A creditor under a farm mortga
This is an opening excerpt, not the complete document.