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This is a Bill, not an Act. For current law, see the Acts databases.
South Australia
A BILL FOR
An Act to provide for the mediation of disputes between farmers and
creditors relating to debt incurred in the conduct of farming operations; and
for other purposes.
Contents
6Enforcement action in
contravention of Act void
Part 2—Availability
of mediation
Division 1—Availability
of mediation
8Notice of availability of
mediation to be given
10Creditor may agree to or
refuse mediation
11Referral of mediation by
Minister
12Enforcement action postponed to allow for
mediation
Division 2—Prohibition
certificate
13Application by farmer
for issue of prohibition certificate
14Issue of prohibition
certificate
Division 3—Exemption
certificate
15Application by creditor for
issue of exemption certificate
16Issue of exemption
certificate
17Creditor may satisfactorily
participate in mediation without forgiving or reducing farm debt
18Duration of exemption
certificate
19When is a farmer or
creditor presumed to have refused to participate in mediation?
Part 3—The Small Business
Commissioner and mediation
Division 1—The Small Business
Commissioner and mediators
20Functions of the Small
Business Commissioner
Division 2—The mediation
process
22Referral of farm debt disputes for
mediation
25Agreement reached by parties at
mediation
30Offences by bodies corporate
Schedule 1—Transitional
provision
The Parliament of South Australia enacts as
follows:
This Act may be cited as the Farm Debt Mediation
Act 2015.
This Act will come into operation 3 months after assent.
The object of this Act is to provide for the efficient and equitable
resolution of farm debt disputes by requiring a creditor to provide a farmer
with the opportunity to have the dispute referred to mediation before the
creditor is able to take possession of property or other enforcement action
under a farm mortgage.
In this Act, unless the contrary intention appears—
commencement day means the day on which this Act comes into
operation;
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 a failure to
perform an obligation that, under the terms of the mortgage, is a ground for
enforcement action;
Examples—
1 Failure to pay the principal, interest or other money the payment of
which is secured by a farm mortgage.
2 Failure to keep the property subject to the farm mortgage
insured.
3 Failure to submit financial statements required by the
creditor.
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 a contract has been executed before the commencement day;
or
(b) the enforcement of a judgment that was obtained before the
commencement day;
exemption certificate means a certificate issued in respect
of a farm mortgage under
section 16
;
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 goods or equipment
acquired for the purposes of a farming operation:
(a) a harvester, binder, tractor, plough or other agricultural
implement;
(b) any other goods or equipment of a class commonly used for the purposes
of a farming operation that are prescribed by the regulations as farm machinery
for the purposes of this definition;
farm mortgage includes an interest in, or power over, farm
property securing obligations of the farmer (whether as a debtor or guarantor),
including an interest in, or power arising from, a hire purchase agreement
relating to farm machinery, but does not include—
(a) a stock mortgage or a crop or wool lien; or
(b) the interest of the lessor of any farm machinery that is leased;
or
(c) a security interest (within the meaning of section 12 of the
Personal Property Securities Act 2009 of the Commonwealth) in stock,
crops or wool;
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 irrigation right within the meaning of the
Irrigation
Act 2009
issued to a farmer for the purposes of a farming operation; or
(d) an authority to take water under the
Natural
Resources Management Act 2004
issued to a farmer for the purposes of a farming operation;
farmer means a person or body solely or principally engaged
in a farming operation, and includes—
(a) a person who owns land cultivated under a share-farming agreement;
and
(b) the personal representatives of a deceased farmer;
farming operation means any of the following activities
undertaken for commercial gain:
(a) agricultural, pastoral, horticultural or apicultural
activities;
(b) poultry farming, dairy farming or any business that consists of the
cultivation of soils, the gathering of crops or the rearing of
livestock;
(c) an activity prescribed by regulation;
function includes a power, authority or duty;
mediator means a person engaged by the Small Business
Commissioner under this Act to mediate farm debt disputes between creditors and
farmers;
prohibition certificate means a certificate in respect of a
farm mortgage issued under
section 14
;
satisfactory mediation means any of the following:
(a) a mediation that has achieved a resolution of a farm debt
dispute;
(b) a mediation that has proceeded as far as it reasonably can in an
attempt to achieve resolution of a farm debt dispute but has failed to resolve
the dispute;
(c) a prescribed mediation or class of mediation;
Small Business Commissioner means the person for the time
being holding or acting in the office of Small Business Commissioner under the
Small
Business Commissioner Act 2011
;
statutory enforcement notice means a notice approved by the
Minister as a statutory enforcement notice for the purposes of this
Act.
(1) This Act applies to creditors only in respect of farm debts.
(2) This Act does not apply to—
(a) a farmer whose property is subject to control under Part X Division 2
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 that is an externally-administered body corporate within the
meaning of the Corporations Act 2001 of the Commonwealth.
6—Enforcement
action in contravention of Act void
Enforcement action taken by a creditor to whom this Act applies otherwise
than in compliance with this Act is void.
7—Relationship
with other Acts
(1) Nothing in this Act affects the operation of the following
Acts:
(a) the
Limitation
of Actions Act 1936
;
(b) the National Consumer Credit Protection Act 2009 of the
Commonwealth;
(c) the Personal Property Securities Act 2009 of the
Commonwealth.
(2) Nothing in this Act affects the operation of the Banking Act
1959 of the Commonwealth and, in particular, the duty of the Australian
Prudential Regulation Authority under Part 2 Division 2 of that Act.
Part 2—Availability
of mediation
Division 1—Availability
of mediation
8—Notice
of availability of mediation to be given
(1) A creditor who
proposes to take enforcement action against a farmer under a farm mortgage must,
before doing so, give written notice to the farmer in accordance with
subsection (3)
.
(2) The creditor must not take enforcement action until the expiry of the
period of 21 days from the day the notice under
subsection (1)
was given.
(3) A notice under
subsection (1)
—
(a) must state that the creditor intends to take enforcement action under
the farm mortgage; and
(b) must state that, under this Act, mediation between the farmer and the
creditor is available; and
(c) must state that the farmer has 21 days from the date the notice was
given to request mediation with the creditor in respect of the farm debt;
and
(d) must be in the prescribed form.
(4) This section does not apply to a creditor if an exemption certificate
has been issued in respect of the farm mortgage.
9—Farmer
may request mediation
(1) A farmer who is liable for debt (whether or not the farmer is in
default) may request mediation under this Act.
(2) A farmer who is
given a notice under
section 8
may, within 21 days from the date the notice was given, notify the
creditor in writing that the farmer requests mediation concerning the farm debt
involved.
(3) A farmer to whom
notice has not been given under
section 8
and who is liable for a farm debt may notify a creditor in writing that
the farmer requests mediation concerning the farm debt.
(4) A farmer is not required to be in default before making a request
under
subsection (3)
.
(5) A request for mediation made by a farmer under
subsection (2)
or
(3)
must be in a form approved by the Minister.
10—Creditor
may agree to or refuse mediation
(1) A creditor who
receives a request for mediation from a farmer under
section 9
may, by written notice given to the farmer, agree or refuse to participate
in mediation in respect of the farm debt involved.
(2) A response under
subsection (1)
to a request for mediation must be in a form approved by the
Minister.
(3) If a creditor refuses to participate in mediation with a farmer who
has made a request under
section 9
—
(a) where the farmer is not in default, the refusal by the creditor does
not, of itself, give rise to any claim or other consequence under this
Act;
(b) where the farmer is in default, the refusal by the creditor provides
the farmer with grounds to apply to the Small Business Commissioner under
section 13
for the issue of a prohibition certificate.
(4) If a creditor
agrees to participate in mediation with a farmer who has made a request under
section 9
, the creditor must—
(a) by written notice,
advise the Minister that the parties have agreed to participate in mediation;
and
(b) provide the notice specified in
paragraph (a)
to the Minister within 10 days after giving notice under
subsection (1)
.
11—Referral
of mediation by Minister
If the Minister receives notice under
section 10(4)
that a creditor and a farmer have agreed to participate in mediation, the
Minister must refer the details of the parties to the Small Business
Commissioner for mediation as soon as practicable.
12—Enforcement
action postponed to allow for mediation
If a farmer, under
section 9(2)
or
(3)
, has requested mediation with a creditor, the creditor must not take
enforcement action in respect of the farm mortgage concerned unless an exemption
certificate is in force.
Note—
Enforcement action taken in breach of this section is void under
section 6
.
Division 2—Prohibition
certificate
13—Application
by farmer for issue of prohibition certificate
(1) A farmer is, on
application to the Small Business Commissioner, entitled to be issued with a
prohibition certificate if—
(a) the farmer is in default under the farm mortgage; and
(b) an exemption certificate is not in force in respect of the farm
mortgage; and
(c) the farmer has notified a creditor in accordance with
section 9(2)
or
(3)
that the farmer requests mediation concerning the farm debt; and
(d) following the farmer's request for mediation under
section 9(2)
or
(3)
—
(i) satisfactory mediation has not taken place as—
(A) the creditor has refused to participate in mediation (or has failed to
respond to the farmer's request for mediation); or
(B) mediation has commenced but the creditor does not wish to continue to
participate in mediation; or
(ii) at least 3 months have elapsed after a request was made by the farmer
under
section 9(2)
or
(3)
and throughout that period the farmer has attempted to participate in
mediation in good faith but no satisfactory mediation has taken place between
the farmer and the creditor.
(2) An application under
subsection (1)
must specify—
(a) the circumstances under which the farmer made the request to
participate in mediation; and
(b) if relevant, the circumstances of the creditor's refusal to
participate in mediation.
14—Issue
of prohibition certificate
(1) The Small Business Commissioner must issue a prohibition certificate
to a farmer who is entitled to a certificate under
section 13
.
(2) If mediation has taken place under this Act, the Small Business
Commissioner must have regard to the written report of the mediator who
conducted the mediation to determine whether satisfactory mediation has
occurred.
(3) A creditor must not commence enforcement action against a farmer if a
prohibition certificate is in force in respect of the farm mortgage held by that
creditor.
(4) A prohibition certificate ceases to be in force on the earlier
of—
(a) the expiry of 6 months after the date of issue of the prohibition
certificate; or
(b) the day on which the farmer and creditor enter into mediation in
respect of the farm debt.
Division 3—Exemption
certificate
15—Application
by creditor for issue of exemption certificate
(1) A creditor is, on
application to the Small Business Commissioner, entitled to be issued with an
exemption certificate if—
(a) the farmer is in default under the farm mortgage; and
(b) a prohibition certificate is not in force in respect of the farm
mortgage; and
(c) —
(i) in the case of a creditor who gave notice under
section 8
in relation to the farm debt in respect of the farm
mortgage—
(A) satisfactory mediation under this Act has taken place; or
(B) satisfactory mediation has not taken place as the farmer has refused
to participate in mediation; or
(C) at least 3 months (or such longer period agreed to in writing by the
creditor and farmer) has elapsed since the notice was given and throughout that
period the creditor made attempts to participate in mediation in good faith but
satisfactory mediation has not taken place; or
(ii) in any other case—satisfactory mediation has taken place under
an alternative dispute resolution process (other than the dispute resolution
process provided for by this Act).
(2) An application under
subsection (1)
must specify—
(a) the circumstances of the farmer's default; and
(b) if relevant, the circumstances of the farmer's refusal to participate
in mediation; and
(c) if relevant, details of any alternative dispute resolution process
(other than the dispute resolution process provided for by this Act) that has
occurred between the farmer and the creditor in relation to the farm
debt.
16—Issue
of exemption certificate
(1) The Small Business Commissioner must issue an exemption certificate to
a creditor who is entitled to a certificate under
section 15
.
(2) If mediation has taken place under this Act, the Small Business
Commissioner must have regard to the written report of the mediator who
conducted the mediation to determine whether satisfactory mediation has
occurred.
(3) If an exemption certificate has been issued in respect of a farm
mortgage, this Act (other than this Division) does not apply to the creditor who
holds the farm mortgage.
(4) 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 exemption certificate was in force,
and any proceedings may be continued and concluded as if the certificate were
still in force.
(5) The reference in
subsection (4)
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.
17—Creditor
may satisfactorily participate in mediation without forgiving or reducing farm
debt
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
participating in, or attempting to participate in, mediation.
18—Duration
of exemption certificate
An exemption certificate remains in force—
(a) if satisfactory mediation in respect of the farm debt concerned has
taken place—for the period commencing on the date of issue of the
exemption certificate and ending on the third anniversary of the last date of
the mediation; or
(b) if the farmer has failed to take part in mediation in good
faith—for the period commencing on the date of issue of the exemption
certificate and ending on the third anniversary of the last date of the
mediation; or
(c) if the farmer has indicated in writing that the farmer does not wish
to enter into or proceed with mediation—for the period commencing on the
date of issue of the exemption certificate and ending on the third anniversary
of the date on which the indication was given to the Minister or creditor;
or
(d) if the farmer has failed to respond in writing, within 28 days, to an
invitation referred to in
section 19(1)(c)
—for the period commencing on the date of issue of the exemption
certificate and ending on the third anniversary of the date that is 28 days
after the invitation was given to the farmer; or
(e) if a notice was given by the creditor under
section 8
—for the period commencing on the date of issue of the exemption
certificate and ending on the date that is 3 years and 3 months after the date
the notice was given; or
(f) in any other case—for the period of 3 years commencing on the
date on which the certificate was issued.
19—When
is a farmer or creditor presumed to have refused to participate in
mediation?
(1) A farmer is
presumed to have refused to participate in mediation in the following
circumstances:
(a) the farmer has failed to take part in mediation in good faith or has
unreasonably delayed entering into or proceeding with mediation;
(b) the farmer has indicated in writing to the Minister or to the creditor
that the farmer does not wish to enter into or proceed with mediation in respect
of the farm debt;
(c) the farmer has
failed to respond in writing within 28 days to an invitation
that—
(i) is made in writing by the creditor; and
(ii) invites the farmer to attend a mediation session; and
(iii) indicates that a failure of the farmer to respond in writing to the
invitation might be taken to be an indication that the farmer refuses to
participate in mediation in respect of the farm debt.
(2) A creditor is
presumed to have refused to participate in mediation in the following
circumstances:
(a) the creditor has failed to take part in mediation in good faith or has
unreasonably delayed entering into or proceeding with mediation;
(b) the creditor has indicated in writing to the Minister or to the farmer
that the creditor does not wish to enter into or proceed with mediation in
respect of the farm debt.
Part 3—The
Small Business Commissioner and mediation
Division 1—The
Small Business Commissioner and mediators
20—Functions
of the Small Business Commissioner
(1) The Small Business
Commissioner has the following functions:
(a) to make
arrangements to facilitate the resolution by mediation of farm debt disputes
between farmers and creditors that are referred to the Commissioner by the
Minister;
(b) to provide
preliminary assistance to farmers and creditors who have agreed to participate
in mediation in relation to farm debts by—
(i) giving both parties advice about their rights and obligations in
relation to the mediation process; and
(ii) encouraging full and open communication between the parties in
relation to the dispute;
(c) to issue
prohibition certificates under
Part 2
Division 2
;
(d) to issue exemption
certificates under
Part 2
Division 3
;
(e) to report to the Minister on the performance of functions by the
Commissioner under this Act;
(f) to perform any function conferred or imposed on the Commissioner under
this Act.
(2) The Small Business Commissioner is not subject to the Minister's
control or direction in exercising functions under
section 20(1)(a)
,
(b)
,
(c)
and
(d)
.
(3) For the purposes of arranging for the resolution of farm debt disputes
by mediation, the Small Business Commissioner may engage persons with the
requisite skills and experience to conduct mediations.
(1) A mediator engaged by the Small Business Commissioner under
section 20
has the following functions—
(a) to mediate farm debt disputes between creditors and farmers by
assisting the parties to reach agreement about—
(i) present arrangements between them; and
(ii) if the financial relationship between the parties is to be
ongoing—the future conduct of the parties;
(b) to perform any other function conferred on the mediator by or under
this Act.
(2) A mediator must not, in carrying out his or her functions under this
Act—
(a) advise a farmer or creditor about the law; or
(b) encourage or assist a farmer or creditor in reserving or establishing
legal rights; or
(c) act as an adjudicator or arbitrator.
Division 2—The
mediation process
22—Referral
of farm debt disputes for mediation
The Small Business Commissioner must arrange for each farm debt dispute
referred for mediation under
Part 2
to be the subject of mediation by a mediator.
(1) A mediation must be conducted with—
(a) as little formality and technicality as proper mediation of the farm
debt permits; and
(b) as much expedition as possible.
(2) The Small Business Commissioner, having regard to any recommendations
made by a mediator, may join any person that he or she considers appropriate to
join as a party to the mediation.
(3) A party to a
mediation may be represented by—
(a) a legal practitioner (within the meaning of the
Legal
Practitioners Act 1981
); or
(b) any other person considered appropriate by the Small Business
Commissioner having regard to any recommendations made by a mediator.
(4) Despite
subsection (3)
, the mediator may meet with a party to the mediation (alone or together
with another party) in the absence of their representative if—
(a) the mediator considers it appropriate to do so; and
(b) the relevant party agrees to meet the mediator in the absence of their
representative.
(5) Costs and expenses associated with the appointment and work of a
mediator are to be determined by the Small Business Commissioner and paid by the
parties in the proportions agreed to by the parties or, if the parties cannot
agree, in equal shares.
(1) A person must not
disclose any information obtained in mediation or in the administration of this
Act except—
(a) as required or authorised by or under this Act or any other Act or
law; or
(b) with the consent of the person from whom the information was obtained
or to whom the information relates; or
(c) in connection with the administration of this Act; or
(d) as is reasonably required to refer any party or parties to mediation
to any person, agency, organisation or other body and, with the consent of the
parties to the mediation, to aid in the resolution of an issue between those
parties; or
(e) to an authority responsible under the law of a place outside this
State, where the information is required for the proper administration of that
law; or
(f) to an agency or instrumentality of this State, the Commonwealth or
another State or a Territory of the Commonwealth for the purposes of the proper
performance of its functions; or
(g) in accordance with the regulations.
Maximum penalty: $10 000.
(2)
Subsection (1)
does not prevent disclosure of statistical or other data that could not
reasonably be expected to lead to the identification of any person to whom it
relates.
(3) Information that has been disclosed under
subsection (1)
for a particular purpose must not be used for any other purpose
by—
(a) the person to whom the information was disclosed; or
(b) any other person who gains access to the information (whether properly
or improperly and whether directly or indirectly) as a result of that
disclosure.
Maximum penalty: $10 000.
(4) Evidence of
anything said or admitted during mediation and a document prepared for the
purposes of, in the course of or in accordance with, mediation are not
admissible in any proceedings in a court or before a person or body authorised
to hear and receive evidence.
(5)
Subsection (4)
does not apply to—
(a) any contract, deed, mortgage or other instrument entered into as a
result of, or in accordance with, any binding agreement entered during
mediation; or
(b) any report on the mediation by the mediator who conducted
it.
(6) In this section—
mediation includes any steps taken in the course of making
arrangements for mediation.
25—Agreement
reached by parties at mediation
A creditor must ensure that any binding agreement relating to the farm debt
made between the creditor and the farmer, entered into during or at the
conclusion of mediation, is reflected in any contract, deed, mortgage or other
instrument entered into as a result of that binding agreement.
(1) A provision of an agreement or other instrument, (whether in writing
or not and whether entered into before, on 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, on or after the commencement of this Act)
by which a person seeks to have a farmer (as debtor or guarantor) or a guarantor
indemnify a creditor for any loss or liability arising under this Act is
void.
A waiver of mediation rights under this Act is void.
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 is not to be taken to 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 the exercise of the power or right.
(1) A notice or
other document required or authorised to be given or sent to, or served on, a
person under this Act may—
(a) be given to the person personally; or
(b) be posted in an envelope addressed to the person at the person's last
known residential or (in the case of a corporation) registered address;
or
(c) be left for the person at the person's last known residential or (in
the case of a corporation) registered address with someone apparently over the
age of 16 years; or
(d) be transmitted by fax or email to a fax number or email
address.
(2) Without limiting the effect of
subsection (1)
, a notice or other document required to be given or sent to, or served on,
a person for the purposes of this Act may, if the person is a company or
registered body within the meaning of the Corporations Act 2001 of the
Commonwealth, be served on the person in accordance with that Act.
30—Offences
by bodies corporate
(1) If a body corporate is guilty of an offence against this Act, each
director and the manager of the body corporate are guilty of an offence and
liable to the same penalty as is prescribed for the principal offence unless the
director or the manager (as the case may be) proves that he or she could not by
the exercise of due diligence have prevented the commission of the
offence.
(2) A person referred to in this section may be prosecuted and convicted
of an offence against this section whether or not the body corporate has been
prosecuted or convicted of the principal offence committed by the body
corporate.
(1) The Governor may
make such regulations as are contemplated by this Act, or as are necessary or
expedient for the purposes of this Act.
(2) Without limiting the generality of
subsection (1)
, the regulations may—
(a) be of general or limited application and vary in operation according
to factors stated in the regulation; and
(b) prescribe fines, not exceeding $5 000, for offences against the
regulations; and
(c) prescribe fees or charges in respect of matters under this Act, and
provide for the waiver or refund of such fees or charges; and
(d) make provisions of a saving or transitional nature.
(3) The regulations may—
(a) be of general application or vary in their application according to
prescribed factors; and
(b) provide that a matter or thing in respect of which regulations may be
made is to be determined according to the discretion of the Minister or a
specified person or body.
Schedule 1—Transitional
provision
This Act applies to—
(a) a farm debt incurred at any time before or after the commencement of
section 8
; and
(b) any farm debt outstanding on the commencement of
section 8
in respect of which no enforcement action had been taken before the
commencement of that section.