What it does
The Farm Debt Mediation Act 2018 (SA) establishes a statutory mediation framework that must be exhausted before a creditor can take enforcement action against a farmer under a farm mortgage. The object set out in section 3 is to provide for the efficient and equitable resolution of farm debt disputes by requiring creditors to give farmers the opportunity to have the disputes referred to mediation before the creditor can take possession of property or other enforcement action. The Act does not abolish enforcement rights; it postpones them until mediation has either occurred or been properly refused.
Part 2 (sections 8 to 18) creates the core gatekeeping machinery. A creditor must give the farmer a written notice stating the intention to take enforcement action, advising that mediation is available, and informing the farmer of the 21-day window to request mediation (section 8). If the farmer requests mediation, the creditor must not take enforcement action while the request is outstanding unless an exemption certificate is in force (section 11). Enforcement action taken in contravention of the Act is void by operation of section 6, which means any purported repossession or sale that skips the mediation step is a legal nullity.
The Act provides two certificate mechanisms to resolve the stalemate. A farmer in default may apply to the Commission for a prohibition certificate (sections 12 and 13) if the creditor has refused mediation or if three months of good-faith attempts have failed. While a prohibition certificate is in force, the creditor must not commence enforcement action (section 13(3)). Conversely, a creditor may apply for an exemption certificate (sections 14 and 15) if satisfactory mediation has taken place, if the farmer has refused to participate, or if three months of good-faith attempts by the creditor have failed. An exemption certificate lifts the Act’s restrictions, allowing the creditor to proceed with enforcement for its duration (section 15(3)). The Act also prohibits contracting out: any agreement that seeks to avoid, modify or restrict the operation of the Act is void (section 27), and a waiver of mediation rights is void (section 28). Section 26 requires that any binding agreement reached at mediation be reflected in a formal instrument. The Act is administered by the Small Business Commission (section 19), which issues certificates, arranges mediations, and engages mediators.