First Mortgage Managed Investments v Skyfarm Holdings [2010] NSWSC 58

Bransgroves acted for the lender in this case where a mortgage of $2.7 million was secured by mortgages over five parcels of land. The lender commenced proceedings and subsequently three of the five parcels were sold and the proceeds paid to the lender. The borrower then filed a defence in which the sole issue raised was that the parcels of land were farm land and therefore the loan was a ‘farm debt’. Under the Farm Debt Mediation Act 1994, a creditor is required to give 21 days notice (a s9 notice) to the farmer before commencing enforcement proceedings. A farmer then has a right within those 21 days to request mediation concerning the farm debt. The borrower argued that there was no such notice given, and therefore the enforcement proceedings are ineffective.

The lender claimed that a notice had been sent by mail, which the borrower claimed not to have received. However, there was a letter sent by the borrower’s solicitor which contained an admission that the s9 notice had been served. Accordingly, summary judgment was entered against the borrower.

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