Sharpe v Hargraves Secured Investments [2013] NSWCA 288

A lender and farmer reached a settlement under the Farm Debts Mediation Act. The settlement was breached and the borrower argued the whole process had to begin again.

The Court of Appeal said:

What the Act provides for is a measure by which farmers will have an opportunity to enter into mediation of disputes before enforcement action is taken in relation to farm debts. It would make a mockery of that process if the mere entry into an agreement at mediation provided an ongoing mechanism for dispute and mediation deferring ad infinitum the ability of the lender to enforce an acknowledged debt.

The Court also quoted case law:

If the settlement terms involved only adjustments to the farm debt such as extending the term to pay, reducing the principal or capitalising interest, these adjustments would leave the initial farm debt in place; to that initial farm debt the section 11 certificate could apply; and section 8(3) would affect the immunity from enforcement action.

The Court of Appeal refused leave.

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