Farm Debt Mediation Act 2011

The Act defines a focused set of terms that shape eligibility, process and legal effect. Key definitional building blocks are: farm debt, farm mortgage, farm property, farmer, farming operation and enforcement action (s 3). A farm debt is a debt incurred for the conduct of a farming operation and secured wholly or partly by a farm mortgage (s 3). A farm mortgage includes interests or powers over farm property that secure obligations of the farmer, including hire purchase interests in farm machinery, but excludes stock mortgages, crop or wool liens, lessor interests in leased machinery, and certain PPSA security interests (s 3). Farming operation is defined by enumerated activities (agricultural, pastoral, horticultural, apicultural; poultry and dairy farming; cultivation and rearing; aquaculture; forestry and timber production; and prescribed activities) (s 3).

Enforcement action is a central operational concept and is defined to include taking possession of property under the mortgage or any other action to enforce the mortgage, including statutory enforcement notices and continuation of already‑commenced enforcement action, but excluding completion of sales or enforcement of pre‑commencement judgments (s 3). If a creditor fails to comply with the Act’s processes, enforcement action is void (s 6). The 2022 insertion of s 7A makes an exemption certificate a condition precedent to enforcement action for creditors to whom the Act applies.

Satisfactory mediation is defined as a mediation that has resolved a dispute, that has proceeded as far as reasonably possible without resolution, or that is prescribed (s 4). The Act requires the SBC to consider the mediator’s written report when deciding whether satisfactory mediation has occurred (s 16(4)). Section 17 explicitly records that a creditor’s refusal to forgive or reduce debt does not, by itself, show a lack of good faith in mediation, which calibrates what constitutes satisfactory mediation in practice.

Process concepts include the pre‑enforcement notice (s 8), the farmer’s request for mediation (s 9), creditor response (agree or refuse) and notification obligations to the SBC when mediation is agreed (s 10(4)). Timeframes are explicit: a farmer must request mediation within 21 days after the creditor’s notice under s 8, and various 3‑month and 3‑year periods are set for the running of rights to apply for certificates and the duration of exemption certificates (s 9(3), s 15(1)(c)(iii), s 18). Prohibition certificates generally last up to six months (s 14(3)); exemption certificates remain in force for periods calculated under s 18 (commonly three years from various trigger dates).

Institutional duties and powers are concentrated in the Small Business Commission, which arranges mediations, provides preliminary assistance and advice about mediation rights, issues certificates, approves forms, and reports to the Minister (s 20). The Act provides the SBC discretion to contract mediators and require mediator skills appropriate to each case (s 20(3)), and to join additional persons to a mediation where recommended by a mediator (s 23(2)). Mediators have limited functions and legal constraints: they must assist parties to reach agreement about present arrangements and the future conduct of ongoing relationships, but must not advise about the law, assist in creating legal rights, or act as arbitrator or adjudicator (s 21).

Costs and confidentiality are regulated: the SBC may fix a mediation session fee not exceeding 50 fee units, payable by each party before a session begins (s 24); if no fee is fixed, costs are to be agreed by the parties or split equally (s 25). Mediation is confidential and evidence of anything said or recorded for mediation is inadmissible in court or tribunal proceedings, with statutory exceptions for binding agreements and mediator reports (s 26). Disclosure outside those exceptions attracts a penalty of 60 penalty units (s 27).

Primary actors: creditors and farmers. The Act applies only to creditors in respect of farm debts (s 5(1)). A creditor is any person to whom a farm debt is for the time being owed (s 3). A farmer is a person, individual or corporation, solely or principally engaged in a farming operation; this expressly includes owners of land under share‑farming agreements and the personal representatives of deceased farmers (s 3). Farming operations are defined by activity, so the Act targets agricultural businesses engaged in the enumerated operations (s 3).

Excluded classes: the Act does not apply to farmers whose property is under Division 2 of Part X of the Commonwealth Bankruptcy Act 1966, to farmers who are the subject of bankruptcy petitions, or to externally‑administered corporations as defined in the Corporations Act (s 5(2)). The Act is limited to farm debts secured by a farm mortgage; it applies only to farm debts, not other forms of indebtedness (s 5(1)). Farm mortgages exclude stock mortgages, crop or wool liens, lessor interests in leased farm machinery, and certain PPSA security interests (s 3).

Who pays: parties to a mediation pay the mediation session fee fixed by the SBC up to a cap of 50 fee units per session, payable by each party before a session commences (s 24(2)-(3)). If the SBC has not fixed a fee, costs (including mediator fees) are to be determined by the SBC and shared by agreement or equally (s 25). There are statutory penalties for unauthorised disclosure (s 27) and for contraventions of regulations (s 36(2)(e)).

Who decides and exercises power: the Small Business Commission plays the central decision and procedural role. It approves forms (s 20(1)(da)), arranges mediations once parties agree (s 22), contracts mediators (s 20(3)(a)), issues prohibition and exemption certificates (s 20(1)(c)-(d)), and may join persons to mediation (s 23(2)). The SBC is not subject to ministerial control in exercising certain functions (s 20(2)). Mediators are contracted by the SBC and must have appropriate skills; they mediate but are expressly forbidden from giving legal advice or acting as arbitrator (s 20(3); s 21).

Effect on enforcement rights: creditors’ practical ability to take enforcement action is curtailed by the requirement for an exemption certificate (s 7A) and by the availability of prohibition certificates applied for by farmers (s 13-14). A creditor who fails to follow the statutory process risks having any enforcement action declared void (s 6). The Act nevertheless allows certain proceedings commenced while an exemption certificate was in force to continue after expiry (s 16(6)), and preserves the operation of other specified statutes such as the Banking Act 1959, the Credit Act 1984, the National Consumer Credit Protection Act 2009, the Limitation of Actions Act 1958 and the Commonwealth PPSA (s 7(1)-(2)).

Ancillary actors: mediators, persons joined to mediation by the SBC, legal practitioners representing parties where permitted (s 23(3)(a)), and government bodies involved in regulation or enforcement (SBC, Ministerial reporting lines) are affected. Bodies corporate face derivative liability for offences if officers knowingly authorised a contravention (s 34).

Creditor duties

• Give the pre‑enforcement notice in the approved form when intending to take enforcement action; the notice must state the creditor’s intention to take enforcement action, availability of mediation, the farmer’s right to request mediation within 21 days, and that failure to respond may ground an exemption certificate (s 8(1)-(2)). If an exemption certificate is already in force, the notice requirement does not apply (s 8(3)).

• If a creditor receives a request for mediation, the creditor must give written notice in the approved form agreeing or refusing to mediate (s 10(1)-(2)). If the creditor agrees, it must notify the SBC within 10 days that the parties have agreed to mediate and provide the notice to the SBC (s 10(4)(a)-(b)).

• Before applying for an exemption certificate after having given notice under s 8, the creditor must comply with s 8 and the conditions in s 15(1)(c). A creditor may apply for an exemption certificate whether or not it gave notice under s 8 (s 15(2)), but must meet the prescribed tests in s 16(2) for issuance.

• If enforcement action is to proceed, a creditor must ensure an exemption certificate is in force; otherwise enforcement action is unlawful and void (s 7A(1); s 6).

Farmer rights and duties

• Right to request mediation: a farmer may request mediation after receiving a s 8 notice or in other circumstances where the farmer is liable for the debt (s 9(1)). Such requests must be in the approved form (s 9(2)) and, where based on s 8, must be given within 21 days (s 9(3)).

• Right to apply for a prohibition certificate: where the farmer is in default and has requested mediation but the creditor has refused or failed to respond (or after three months of good faith mediation attempts without satisfactory mediation), the farmer may apply to the SBC for a prohibition certificate (s 13-14). The SBC must issue a prohibition certificate if prescribed conditions are met (s 14(1)).

• Duties in mediation: farmers must participate in mediation in good faith and not unreasonably delay, because a farmer’s failure to participate or a written indication of refusal are grounds for presuming refusal to mediate and for the SBC to issue an exemption certificate to the creditor (s 19(1); s 16(2)(c)(ii)). The Act expressly lists circumstances that constitute a farmer’s refusal to mediate (s 19(1)).

Small Business Commission duties and discretions

• Arrange and facilitate mediation when parties have agreed (s 20(1)(a); s 22), provide preliminary assistance (s 20(1)(b)), approve forms (s 20(1)(da)), issue prohibition and exemption certificates (s 20(1)(c)-(d)), report to the Minister (s 20(1)(e)), and contract mediators with appropriate skills (s 20(3)).

• The SBC is not subject to ministerial control in exercising specific listed functions (s 20(2)), which allocates institutional discretion.

Mediator constraints and duties

• Mediators must assist parties to reach agreement about present arrangements and, where relevant, future conduct of the relationship (s 21(1)(a)-(b)). They must not advise about the law, encourage reserving or establishing legal rights, or act as an adjudicator or arbitrator (s 21(2)(a)-(c)). The mediator produces a written report that the SBC must consider when deciding whether mediation was satisfactory (s 16(4)).

Procedural rights and constraints

• Confidentiality: mediation communications are inadmissible in court or tribunal, except for binding instruments entered as a result of mediation and mediator reports (s 26(2)-(3)). Disclosure outside statutory exceptions attracts a penalty of 60 penalty units (s 27).

• Fees and costs: the SBC may fix a session fee not exceeding 50 fee units, payable by each party before a session (s 24). If no fee is fixed, the SBC determines costs and they are shared by agreement or equally (s 25).

Prohibition and exemption certificates

• Prohibition certificates: the SBC must issue on farmer application where statutory conditions are met, and they expire upon the earlier of six months or when mediation commences (s 14(1)-(3)).

• Exemption certificates: the SBC must issue where statutory criteria are met (s 16(2)), including instances of satisfactory mediation, farmer refusal, or creditor attempts to mediate in good faith for at least three months without satisfactory mediation (s 15(1)(c); s 16(2)(c)). The SBC may refuse if the farmer’s refusal is justified and the farmer intends to mediate within a reasonable period (s 16(2A)). Exemption certificates run for periods calculated under s 18 (commonly three years).

Limits and preserved law

• The Act preserves the operation of specified Commonwealth and State Acts (Banking Act 1959, Credit Act 1984, National Consumer Credit Protection Act 2009, Limitation of Actions Act 1958, PPSA) and does not affect certain statutory duties such as those of the Reserve Bank (s 7).

• Certain enforcement steps needed as conditions precedent to a future enforcement action (such as statutory notices) are not invalidated outright by s 7A(2), but the actual taking of enforcement is prohibited without an exemption certificate and courts or tribunals are prohibited from enforcing such notices where they would effect enforcement contrary to the Act (s 7A(2)). Proceedings commenced while an exemption certificate was in force may be continued and concluded despite certificate expiry (s 16(6)).

Criminal and administrative consequences are embedded in the Act. A core statutory enforcement mechanism is the nullity rule: enforcement action taken in contravention of the Act is void (s 6). The 2022 insertion of s 7A reinforces this by making an exemption certificate a condition precedent for creditors to take enforcement action; absent a certificate a creditor must not take enforcement action (s 7A(1)), and s 7A(2) makes clear that while statutory enforcement notices or other process given to meet a condition precedent are not invalidated per se, taking the enforcement action itself is prohibited and cannot be enforced by a court or tribunal.

Penalties provided in the Act include:

• A penalty of 60 penalty units for unauthorised disclosure of information obtained in mediation or in connection with administration of the Act, unless an exception applies (s 27). This covers disclosures except where consent, necessity for administration, reasonable referral with consent, law‑imposed requirement, or other lawful excuse apply.

• Regulations may impose penalties not exceeding 20 penalty units for contraventions of regulations made under the Act (s 36(2)(e)).

• Offences by bodies corporate: if a body corporate contravenes a provision, each officer who knowingly authorised or permitted the contravention is treated as having contravened it (s 34(1)). Prosecution of officers can occur whether or not the body corporate is proceeded against (s 34(2)). This creates derivative criminal exposure for officers where the contravention is knowing authorisation.

Prosecution timing: despite section 7(1) of the Criminal Procedure Act 2009, criminal proceedings for offences against the Act or regulations may be commenced at any time with the written consent of the Attorney‑General (s 35). This preserves prosecutorial discretion and may extend the temporal window for commencing certain prosecutions.

Administrative enforcement and certificates: the SBC exercises administrative powers to issue and refuse prohibition and exemption certificates (s 14; s 16). The SBC has discretion to refuse in specified circumstances: for example, s 14(2) permits refusal of a prohibition certificate where a creditor’s failure to respond is justified and the creditor intends to mediate within a reasonable period; s 16(2A) permits refusal of an exemption certificate where the farmer’s refusal to mediate is justified and the farmer intends to mediate within a reasonable period. These are administrative checks that can affect whether enforcement can proceed.

Judicial interaction and voidness: where enforcement action occurs contrary to the Act, courts are constrained to treat that enforcement as void (s 6). Additionally, s 7A(2) operates to prohibit the enforcement by a court or tribunal of any statutory enforcement notice or similar process if it would give effect to an action prohibited by the Act. However, s 16(6) clarifies that the expiry of an exemption certificate does not affect proceedings for recovery of a farm debt already commenced while the certificate was in force; those proceedings may continue and conclude as if the certificate were still in force.

Preservation of other legal regimes: the Act explicitly states it does not affect the operation of several Commonwealth and State acts relevant to financial regulation and personal property security (s 7(1)-(2)). This limits unintended consequence where other statutory frameworks impose separate enforcement or regulatory duties.

The Act contains express non‑derogation clauses and interacts with other statutes through preservation, exclusion and definitional choices.

Preservation and non‑interference: the Act expressly provides that nothing in it affects the operation of the Banking Act 1959 of the Commonwealth, including the Reserve Bank duties (s 7(1)). It also states that it does not affect the operation of the Credit Act 1984, the National Consumer Credit Protection Act 2009 (Cth), the Limitation of Actions Act 1958, and the Personal Property Securities Act 2009 (Cth) (s 7(2)). These clauses preserve the primacy and operation of those regulatory regimes so that overlapping obligations remain intact.

Scope exclusions of security interests: the Act’s definition of farm mortgage excludes a security interest within the meaning of section 12 of the Personal Property Securities Act 2009 in stock, crops or wool, and excludes the lessor’s interest in leased farm machinery (s 3). That definitional exclusion carves out typical PPSA‑registered security in certain chattels and lessor interests from being treated as a farm mortgage for the purposes of the Act, which affects whether the mediation and certificate regime applies.

Effect on statutory enforcement notices and condition precedents: s 7A(2) preserves the validity of statutory enforcement notices and other process given, served or executed in order to fulfil a condition precedent to enforcement. However, s 7A(2) also operates to prohibit the taking of the enforcement action concerned and the enforcement by a court or tribunal of any such notice or process if that would effect enforcement contrary to the Act. This dual statement means statutory prerequisites may be fulfilled without immediate invalidation, but the substantive enforcement is blocked without an exemption certificate, and courts are barred from using such notices to validate enforcement that otherwise contravenes the Act.

Overlap with bankruptcy and insolvency: s 5(2) excludes farmers whose property is under control under Division 2 of Part X of the Commonwealth Bankruptcy Act 1966, who are subject to bankruptcy petitions, or who are externally‑administered corporations under the Corporations Act. Thus, where a farmer is in formal bankruptcy or corporate external administration, the Act does not apply, and enforcement rights are governed by insolvency regimes.

Interaction with procedural service and electronic transactions: the Act provides specific rules about the manner and timing of notices (s 32-33). Section 33(c) adopts the Electronic Transactions (Victoria) Act 2000’s rules for when electronic communications are taken to be received (s 33(c) referring to s 13 of that Act). Section 32(3) preserves the operation of other laws that authorise alternative methods of service and the power of courts or tribunals to authorise other modes of service, dovetailing the Act’s service provisions with existing procedural rules.

Mediator admissibility and other evidence regimes: mediation communications and documents are generally inadmissible under s 26(2), with limited statutory exceptions. That interacts with evidence law and with litigation tactics because parties cannot generally deploy mediation disclosures in subsequent proceedings. However, mediator reports are admissible for the limited purpose stated in s 16(4) (SBC’s consideration), and binding instruments entered as a result of mediation are not excluded from admissibility (s 26(3)(a)-(b)).

Regulatory interface and penalties: regulations under the Act may impose penalties up to 20 penalty units (s 36(2)(e)). Prosecutions for offences against the Act may require the Attorney‑General’s written consent to commence outside time limits set by the Criminal Procedure Act 2009 (s 35), which interacts with prosecutorial procedures.

In sum, the Act is constructed to sit alongside, and not displace, pre‑existing Commonwealth and State legal regimes for banking, consumer credit, limitations, insolvency and personal property security, while imposing a mediation‑first, certificate‑based constraint on enforcement of farm mortgages defined narrowly by the Act’s definitions and exclusions.

The published version incorporates several statutory amendments recorded in the Table of Amendments in the source. Three amending instruments are listed:

• Statute Law Revision Act 2013 (No. 70/2013): assent 19 November 2013; commencement 1 December 2013 for the listed items (table entry). This appears in the endnotes as a textual maintenance amendment.

• Small Business Commission Act 2017 (No. 16/2017): assent 10 May 2017; sections 53-69 commenced 1 July 2017 (Special Gazette reference). The 2017 amendments inserted and substituted provisions referring to the Small Business Commission, changed references to the Small Business Commissioner and Secretary, altered mediator definitions and functions, and reworked Parts of the Act (see numerous marginal notes indicating amendments by No. 16/2017 in the text, e.g. ss 20, 21, 22, 23, 24, 25, 26, 27, 32).

• Agriculture Legislation Amendment Act 2022 (No. 22/2022): assent 15 June 2022; sections 89-107 commenced 31 October 2022 (Special Gazette reference). The 2022 amendments effected substantive changes: insertion of s 7A (making an exemption certificate required for enforcement action), multiple substitutions and insertions across Part 2 (notably changing the notice regime, creditor and farmer interactions, and certificate issuance tests), changes to definitions (including approved form, request for mediation, Small Business Commission), and transitional provisions (s 38). The text annotates many specific provisions as inserted or substituted by No. 22/2022 (for example, ss 7A, 8, 9, 10, 14(1)(d)(iii), 15(1)(c)(i), 16(2)(c)(i), 16(2A), 18(c)-(d), 19(1)(b)-(c), 19(2)(b), 22, 23(3)(a), 24(2), 32 and 33(c)).

Transitional arrangements are provided for the 2022 amendments (s 38). That section keeps the pre‑amendment Act in force for certain ongoing matters: creditors who commenced enforcement action under the pre‑ALA regime, farmers given notices under the previous s 8, and creditors already notified under previous s 9 that a farmer requests mediation (s 38(1)). It also extends application of the amended Act to farming activities added to the definition of farming operation (aquaculture, forestry and timber production) for outstanding debts and new debts (s 38(2)). Transitional provisions treat pre‑existing approved forms as approved forms under the SBC until new forms are approved (s 38(3)-(5)).

The endnotes’ Table of Amendments lists the acts and specific commencement dates (endnote 2). The Act’s main text contains marginal annotations showing where subsections were inserted, substituted or repealed by the amending Acts (e.g., “S. 16(2A) inserted by No. 22/2022 s. 99(3)”), allowing practitioners to trace which textual elements derive from which amending instrument.

No other amending instruments are listed in the Table of Amendments provided in the source. The endnotes also record the Act’s original assent date (6 September 2011) and initial commencement (1 December 2011) in the Minister’s second reading material (endnote 1).

Practitioners should consult the marginal notes in the Act text and the Table of Amendments to map specific clause changes to the relevant amending Act and commencement date. The transitional s 38 ensures some continuity for matters commenced under the pre‑2022 regime while bringing additional farming activities and procedural changes under the amended scheme.

The source provides an endnote entry titled “Explanatory details” which states “No entries at date of publication” (Endnotes, 3 Explanatory details). The legislative text does not cite any judicial decisions or list any case law construing its provisions. Therefore, the printed version here contains no reported litigation history or judicial interpretation to rely on.

Implications of that absence for practitioners are procedural and evidential rather than substantive. Without reported judicial authorities in the source, guidance on the interpretation of potentially ambiguous terms (for example, “satisfactory mediation” under s 4, “good faith” mediation efforts in ss 15(1)(c)(iii) and 16(2)(c)(iii), or what establishes that a creditor’s failure to respond is “justified” in s 14(2)) will initially rely on the plain text, analogous statutory principles and common law interpretation. The Act supplies some statutory definitions and presumptions (s 4 and s 19) that reduce the scope for argument in certain areas, but areas of factual judgement,whether mediation was attempted “in good faith”, whether a response failure was “justified”, or whether delays were “unreasonable”,remain available for dispute and, absent appellate gloss, will be questions for the SBC or ultimately a court or tribunal.

The Act does, however, contemplate and regulate admissibility and confidentiality in a way likely to shape litigation practice: mediation communications are not admissible in proceedings (s 26(2)), with limited statutory exceptions, and the mediator’s written report is admissible for the SBC’s determination of satisfactory mediation (s 16(4)). Those rules will frame evidentiary strategies in any litigation arising from enforcement attempts or from disputes over whether procedural prerequisites to enforcement were complied with.

Offences and the potential for prosecution exist (s 27; s 36; s 34), and prosecutions require the Attorney‑General’s written consent to commence at any time under s 35, which may affect statutory limitation considerations. Because the source does not contain reported cases, practitioners must treat the absence of precedent as a factor in risk assessment and should expect initial disputes to be decided on statutory text and administrative records (SBC files, mediator reports, notices and forms) until appellate authority develops.

In practice, the SBC’s administrative decisions to issue or refuse prohibition and exemption certificates (s 14; s 16), and its factual determinations about whether mediation was “satisfactory”, are likely to be the early flashpoints for litigation or review (judicial review or merits review where available), but the source does not provide examples or authorities to anticipate how tribunals or courts will rule on those issues.

Procedural formalities: many of the Act’s mechanical effects depend on using an “approved form” (s 3 definition; s 8(2)(b); s 9(2); s 10(2); s 13(2); s 15(4)). The Small Business Commission approves forms (s 20(1)(da)). Failure to use the approved form for notices, requests or applications risks invalidating the procedural step and may expose the party to the other side seeking a prohibition or exemption certificate, or asserting non‑compliance.

Timing traps: the creditor’s notice under s 8 triggers a 21‑day window for the farmer to request mediation (s 8(2)(a)(iii); s 9(3)). If the farmer does not respond within that 21 days, the creditor may apply for an exemption certificate (s 15 note and s 18(d)). But s 7A now requires an exemption certificate to be in force before enforcement action may be taken (s 7A(1)), which means creditors cannot simply proceed after giving notice and waiting 21 days unless they have obtained the certificate. Exemption certificates may last for different periods depending on which subsection of s 18 applies; commonly they run for three years from various trigger dates, which can materially delay enforcement rights (s 18).

Nullity risk: enforcement action taken without compliance is void (s 6), not merely voidable. A creditor that takes possession or otherwise enforces in breach of the Act risks completely invalidating the enforcement step, which has practical consequences including potential reversal of possession and costs exposure.

Certificate durations and continuing proceedings: exemption certificates remain in force for periods calculated under s 18; the expiry of an exemption certificate does not affect proceedings for recovery of a farm debt commenced while the certificate was in force, and those proceedings may be continued and concluded as if the certificate were still in force (s 16(6)). Creditors must therefore be careful to preserve right steps and timing once a certificate is obtained and to understand that the certificate does not necessarily revive enforcement rights beyond its term.

Good faith and evidentiary burden: the Act requires parties to “attempt to mediate in good faith” (s 15(1)(c)(iii) and s 16(2)(c)(iii)). What amounts to “good faith” is not exhaustively defined in the text, so parties face uncertainty and factual contest. The SBC may consider mediator reports (s 16(4)) in determining satisfactory mediation, so preserving documentary evidence of efforts, communications and mediator engagement is important.

Refusal presumptions and justifications: s 19 sets out circumstances that constitute presumptions of refusal to mediate. For farmers, failing to participate in good faith or failing to respond within 21 days are presumptive refusals (s 19(1)); for creditors, failing to participate in good faith or indicating in writing they do not wish to mediate are presumptions of refusal (s 19(2)). However, the SBC may refuse to issue certificates if it is satisfied a party’s failure or refusal is justified and the party intends to mediate within a reasonable period (s 14(2), s 16(2A)). Parties must be prepared to explain and document the justification for delays or refusals.

Confidentiality exceptions: mediation evidence is generally inadmissible (s 26(2)), but there are exceptions for binding instruments executed as a result of mediation and the mediator’s report (s 26(3)). The mediator’s report is admissible for the SBC’s use in issuing certificates (s 16(4)), which creates a narrow channel where mediation content influences administrative outcomes despite general confidentiality.

Mediator limitations: mediators must not give legal advice or help establish or reserve legal rights (s 21(2)). Parties expecting free legal input through mediation should not rely on mediators for legal strategy; legal practitioners may attend (s 23(3)(a)), and the SBC may permit other representatives (s 23(3)(b)), but mediators cannot perform advisory or adjudicative roles.

Fee cap and session charging: the SBC can fix a fee not exceeding 50 fee units per mediation session, and each party must pay the fee before a session (s 24). If the SBC has not fixed a fee, costs are determined and shared or split equally (s 25). Parties should budget for potentially significant aggregate mediation costs across multiple sessions.

Contracting‑out and waiver void: any contractual provision attempting to avoid, modify or restrict the operation of the Act, or to indemnify a creditor for losses or liabilities arising under the Act, is void (s 29(1)-(2)). Waiver of rights under the Act is also void (s 30). Parties cannot contractually opt out.

Service and receipt technicalities: the Act specifies modes for giving notices and when notices are taken to be given (s 32-33). Electronic communications are governed by the Electronic Transactions (Victoria) Act 2000 as incorporated by s 33(c). Mistakes in service method or timing can affect statutory deadlines.

Overlap with other regimes: the Act does not apply where bankruptcy or external administration applies (s 5(2)). Additionally, certain PPSA security interests and lessor interests are excluded from the definition of farm mortgage (s 3). Mischaracterising security or misapplying the Act to excluded circumstances may lead to invalid reliance on its protections.

Corporate officer liability: bodies corporate may be subject to offence proceedings if an officer knowingly authorised or permitted a contravention (s 34). Directors and managers should be alert to compliance risk.

Transitional quirks: the 2022 transitional provisions preserve the pre‑amendment regime for certain matters started prior to the Agriculture Legislation Amendment Act 2022 commencement day, including forms approved under the Secretary being taken as approved forms until the SBC approves replacements (s 38). Practitioners handling matters across the amendment date must identify which regime applies.

For creditors

1. Identify applicability: confirm the debt is a “farm debt” secured by a “farm mortgage” as defined in s 3. Be aware of exclusions (stock mortgages, crop/wool liens, lessor interests in leased machinery, certain PPSA security interests) and the exclusion of bankrupt or externally administered farmers (s 3; s 5(2)).

2. Use approved forms: obtain and use the approved form for the s 8 notice (s 8(2)(b); s 20(1)(da)). The SBC approves forms and marginal notes indicate forms previously approved under the Secretary continue as approved until replaced (s 38(3)-(5)).

3. Give the s 8 notice correctly: the notice must be written and state the creditor’s intention to take enforcement action, that mediation is available, that the farmer may request mediation within 21 days, and that failure to respond within 21 days may constitute grounds for an exemption certificate (s 8(2)(a)). Deliver the notice in accordance with s 32 and note the rules for when it is taken to be given (s 33).

4. Wait the statutory period: if the farmer does not request mediation within 21 days, the creditor may apply for an exemption certificate under s 15. If a request for mediation is received, decide whether to agree or refuse in writing using the approved form (s 10(1)-(2)). If agreeing, notify the SBC within 10 days (s 10(4)) to trigger the SBC’s mediation arrangements (s 22).

5. Attempt mediation in good faith: where required by s 15 or s 16, document attempts to mediate, communications, scheduling, participation and mediator engagements. Good faith attempts over at least three months may be a pathway to an exemption certificate (s 15(1)(c)(iii); s 16(2)(c)(iii)).

6. Apply for an exemption certificate if conditions met: prepare the application in the approved form (s 15(4)), and be ready to show either satisfactory mediation occurred (s 15(1)(c)(i); s 16(2)(c)(i)), the farmer refused to mediate (s 15(1)(c)(ii); s 16(2)(c)(ii)), or the creditor attempted good faith mediation for the relevant period without satisfactory mediation (s 15(1)(c)(iii); s 16(2)(c)(iii)). The SBC will assess and must have regard to the mediator’s report where mediation has occurred (s 16(4)).

7. Obtain and rely on an exemption certificate before enforcing: s 7A requires an exemption certificate in force before taking enforcement action; taking action without one is void (s 7A(1); s 6). Be alert to the period the exemption certificate covers (s 18) and that proceedings commenced while the certificate was in force may continue after expiry (s 16(6)).

8. Maintain administration and confidentiality standards: comply with mediation confidentiality rules (s 26) and avoid unauthorised disclosure (s 27). If mediation yields binding agreements, ensure any substituted or resulting documentation reflects the agreement as required (s 28).

For farmers

1. Check eligibility to request mediation: a farmer may request mediation after receiving a s 8 notice or otherwise if liable for the debt (s 9(1)). Requests must be in the approved form and, where the s 8 notice is given, within 21 days (s 9(2)-(3)).

2. Use the approved form and preserve proof of service: use the SBC‑approved form and ensure proper timing and service evidence, as the 21‑day deadline is jurisdictional to a variety of certificate outcomes (s 9(3); s 32-33).

3. Participate and document good faith: the farmer should participate in mediation in good faith. Failure to take part in good faith, unreasonable delay, indicating in writing refusal, or failing to respond within 21 days are statutory grounds for presuming refusal (s 19(1)), which can lead to issuance of an exemption certificate to the creditor (s 16(2)(c)(ii)). Maintain records of communications and reasons for any delay or non‑participation.

4. Apply for a prohibition certificate where appropriate: if in default and a creditor has refused or failed to respond to a request to mediate, apply in the approved form for a prohibition certificate (s 13(1); s 13(2)). The SBC must issue if the conditions in s 14(1) are met, including no exemption certificate being in force and either creditor refusal or failure to respond within 21 days, or after three months of good faith attempts (s 14(1)(b)-(d)).

5. Protect confidentiality: mediation is confidential and inadmissible generally (s 26). Understand the limited exceptions and avoid disclosing mediation content outside those exceptions to avoid penalties (s 27).

6. Consider representation: the Act allows a legal practitioner to represent a party in mediation (s 23(3)(a)). Mediators must not give legal advice (s 21(2)(a)), so where legal issues or rights are implicated, secure independent legal advice rather than relying on the mediator.

Both parties and mediators

1. Budget and timing: the SBC may fix a mediation session fee up to 50 fee units (s 24); if no fee is fixed, costs are apportioned by agreement or equally (s 25). Plan for potential multiple sessions and associated costs.

2. Keep records to support SBC determinations: mediator reports are a statutory input to the SBC when determining if mediation was satisfactory (s 16(4)). Parties should preserve and, where appropriate, consent to the mediator recording the progress and outcomes consistent with the confidentiality rules and mediator practice.

3. Follow formalities for notices and service: use s 32 authorised methods for giving notices and check the rules about the date a notice is taken to be given (s 33). Electronic communications are taken as given in accordance with the Electronic Transactions (Victoria) Act 2000 (s 33(c)).

Administrative and compliance checks

• Ensure the SBC is notified when required (s 10(4)) and that applications for certificates use approved forms (s 13(2); s 15(4)). The SBC has discretion in issuing and refusing certificates (s 14(2); s 16(2A)), so document rationales for conduct such as reasons for delay, justification for refusal to mediate, or evidence of good faith mediation attempts.

• Avoid contractual attempts to contract out of the Act: contracting out and waivers are void (s 29-30). Clauses seeking indemnities for losses under the Act will be void (s 29(2)).

• For bodies corporate, ensure officers do not knowingly authorise contraventions, given potential derivative liability (s 34).

Transitional and amendment awareness

• If matters straddle amendment commencement dates, check s 38 transitional provisions which preserve the pre‑amendment regime for certain matters and treat previously approved forms as approved until the SBC replaces them (s 38(1)-(5)).