Hargraves Secured Investments v Sharpe [2013] NSWSC 539

At a mediation under the Farm Debt Mediation Act and the lender and borrower had entered into an agreement, however the borrower subsequently failed to comply with the terms of that agreement. The lender brought court proceedings, which were settled on terms contained in a Deed of Settlement giving the lender a monetary judgment and judgment for possession of the properties.

When the lender began to take steps to recover possession of its security, the borrower argued that the Deed of Settlement had created a new farm mortgage, to which the Farm Debts Mediation Act applied.

The borrower relied on the decision of the High Court in Waller v Hargraves Secured Investments [2012] HCA 4. In that case, the Deed of Settlement at mediation was found to have created a new “farm debt” and a successive “farm mortgage” so that enforcement action could not occur in the absence of a further notice of intention from the lender (and further right to mediation in respect of the farm debt involved).

The judge decided that the enforcement action was not void, and dismissed the application. His Honour found that the circumstances of this case were different to Waller because no further funds were advanced and there was no new or successive loan agreement or farm debt; the Deed had made it clear that the borrower was indebted and that the debt was secured by the original mortgage. It had not renegotiated the loan agreement or replaced it with a new loan agreement, and therefore the settlement terms did not create a new “farm debt” under the definition in the legislation.

Click here to read the full judgment

Scroll to Top