The Queensland Department of Agriculture and Fisheries has released an Issues Paper as part of its 5 year review of the Farm Business Debt Mediation Act 2017 to determine whether the provisions of the Act remain appropriate. The purpose of the Act is to provide an efficient and equitable way for farmers and mortgagees to resolve matters relating to farm business debts.
The Issues Paper identifies a number of issues for review:
- the scope of coverage of the Act (should it specfically exclude non-farm businesses for example where a farm is used as security for a third-party debt which is not borrowed for the purpose of conducting a farming business);
- Should the Act be amended to encourage informal mediation before a lender takes formal enforcement action?
- Should the farmer and the lender always equally share the costs for the mediation process?
- Production of documentation requirements.
Although the Financial Services Royal Commission Final Report in 2019 recommended establishing a comprehensive national scheme for farm debt mediation the Issues Paper states that Queensland should only emulate NSW, or any other jurisdiction, where that is to the net benefit of Queenslanders, with national consistency a secondary consideration.
Other issues include:
- Reducing the emphasis on enforcement;
- Provisions relating to deteriorating physical or mental health requiring an extension of time;
- Provisions for a pause in the process should extenuating circumstances arise;
- Extending coverage to businesses (eg, harvesting contractors) whose income is derived solely from primary production.
If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.
Author: David Jacobson
Principal, Bright Corporate Law
Email:
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
