CBA v Bird [2011] NSWSC 586

The borrower raised a defence under the Farm Debt Mediation Act 1994 which requires the lender mediate before enforcing a mortgage. The bank argued the property was not a farm.

The property in question consists of 25 acres with a house and sheds. Mr Bird gave evidence that when he obtained the home loan he told a bank officer, that he intended to purchase Hereford cattle for the property, both for breeding and sale. He in fact ran a maximum of 18 cattle at any one time on the property, including bulls, cows and calves. He bought and sold Hereford cattle through sale yards at Windsor and Camden.

Under the Act Mr Bird had to establish that he was a ‘farmer’; that the mortgage was a ‘farm mortgage’; that it secured a ‘farm debt’; and that the debt was incurred for the purpose of the conduct of a ‘farming operation’. He failed to establish these in evidence with the Judge commenting:

The invoices which show that a small number of cattle were purchased and the photographs showing a number of cattle present on the property at some time, cannot establish that the property is, or ever was used as a ‘farm’. All of the other evidence suggests that the property was purchased as a residential property, and that Mr Bird also intended to store gardening equipment there, that being stock sold by his gardening supplies business. To be a ‘farmer’, he must be ‘solely or principally engaged in a farming operation’. To the contrary, the evidence strongly suggests that in the past he was solely or principally engaged in quite a different business, the importation and sale of gardening equipment.

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