These proceedings before Justice Price involved a protracted dispute under the Farm Debts Mediation Act. The debt in question had been incurred refinancing a earlier debt to the Commonwealth Bank which also involved a protracted dispute under the Farm Debt Mediation Act.
The borrowers alleged the lender breached Heads of Agreement reached pursuant to the Farm Debt Mediation act and had by enforcing the mortgage prevented the borrowers obtaining interest subsidies from the Federal Government. The borrower’s further submitted that the Heads of Agreement were unjust and relied on s 7 of the Contracts Review Act 1980.
In finding against the borrowers on all grounds His Honour noted:
It is evident that unprofitability and the lack of commercial viability are the substantial causes of the defendants’ inability to obtain interest subsidy grants. The defendants’ claim that the action of the plaintiff deprived them from round two of the Federal Government interest subsidy grant (and continuing grants) is unsupported and without merit.
The court held that the service of the statutory enforcement notices and the commencement of possessions proceedings is enforcement action as defined in s 4 of the FDM Act. However that enforcement action taken by the lender was in compliance with the FDM Act.