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Information for Mortgagees

Important steps toward mediation

In the majority of matters a mortgagee will initiate mediation through serving a notice of their intention to take enforcement action. This also informs the farmer of their right to request mediation. The following steps outline the process and notices used by the mortgagee when the mortgagee initiates mediation. Hyperlinks are embedded to the notices and forms the mortgagee may need to complete.

  • A mortgagee must serve an Enforcement Action Notice S14 and provide a Mediation Information Package to the farmer.
  • The mortgagee may also attach a Request for Mediation Notice that provides for the farmer  to respond. If a farmer requests mediation, the mortgagee must either agree to or refuse  mediation by completing the relevant notice to the farmer and a copy to QRIDA.
  • If the farmer initiates mediation, the mortgagee must give an Enforcement Action Notice and  Mediation Information Package. If the farmer is not in default the mortgagee may refuse  mediation to the farmer.
  • The mortgagee needs to advise the farmer of agreement or otherwise to mediation by  completing an Agreement or Refusal to Mediate Notice S16. A copy needs to be provided to  QRIDA.
  • The mortgagee must ask the chosen mediator to conduct mediation.
  • The mortgagee responds to the farmer's nomination of three preferred mediators by choosing one of the nominated mediators and giving a Response to Mediator Nomination S18A.


  • Be prepared and participate in mediation in good faith. Refer to the Good Faith Information Sheet.
  • The mortgagee should ensure that the Act is applicable to the farmer before proceeding to mediation. Key definitions can be found below.

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Key Definitions

Click on the plus sign next to definition to get further details.

  • Application of Act

      1. This Act does not apply in relation to a farmer if—
        1. the farmer is a insolvent under administration under the Corporations Act, section 9; or
        2. the farmer is the subject of a petition presented by a creditor, other than the mortgagee, under the Bankruptcy Act 1966 (Cwlth) or a corresponding law of another jurisdiction, including a jurisdiction outside Australia; or
        3. for a farmer that is a corporation—the farmer is a Chapter 5 body corporate within the meaning of the Coporations Act, section 9.
      2. Also, this Act does not apply in relation to a farmer for a particular farm business debt if—
        1. the farmer previously defaulted under the farm mortgage for the debt and, because of the farmer’s default, the farmer and the mortgagee took part in mediation for the debt under this Act; and
        2. the farmer and the mortgagee entered into a contract, mortgage or other document to give effect to a heads of agreement entered into as a result of the mediation; and
        3. the farmer has defaulted under the farm mortgage and the default relates to the contract, mortgage or document.
  • Default

      In relation to a farmer under a farm mortgage, means a ground exists for the mortgagee to take enforcement action against the farmer under the terms of the mortgage.

      Examples of default—

      • a failure to perform an obligation under the terms of the farm mortgage
      • the ratio of the farm business debt to the value of farm property (commonly referred to as the loan to value ratio or LVR) changes because the value of the farm property secured by the farm  mortgage changes
  • Enforcement action

      In relation to a farm mortgage, means action to enforce the mortgage, including, for example—

      1. taking possession of the property under the mortgage; and
      2. exercising a power of sale under the mortgage;  and
      3. giving a statutory enforcement notice.
  • Farmer

      farmer means—

      (a) a person or entity whose sole or main business is a farming business; or

      (b) a person or entity who is the owner of land the subject of a sharefarming agreement; or

      (c) a person or entity who has applied, and is eligible, for a loan under a program administered by the authority to provide finance to persons in the first years of establishing a farming business; or

      (d) a person who is the personal representative of a dead individual mentioned in paragraph (a), (b) or (c).

  • Farming business

      1. means—
        1. an agricultural, apicultural, dairy farming, horticultural, land-based aquacultural, pastoral, poultry keeping or viticultural business; or
        2. another business that involves cultivating the soil, gathering crops or rearing livestock; or
        3. a business that involves cutting timber for sale; or
        4. another business prescribed by regulation to be a farming business; and
      2. includes—
        1. a business mentioned in paragraph (a) carried out under a sharefarming agreement; and
        2. providing land for a business mentioned in paragraph (a) to be carried out under a sharefarming agreement; but
      3. does not include a business prescribed by regulation not to be a farming business for this Act.
  • Farm mortgage

      means a mortgage of farm property.

  • Farm property


      1. land on which a farmer carries on a farming business; or
      2. a water allocation under the Water Act 2000 held by a farmer for carrying on a farming business; or
      3. a vehicle, machine, tool or other thing of a type that is usually used to carry on a farming business.

        tractor, milking machine, harvester, beehive
  • Farm business debt

      is an amount owed by a farmer that –

      1. was borrowed for the purpose of conducting a farming business; and
      2. is secured by a farm mortgage
  • Mortgage

      includes a charge on land or an interest in land for  securing money or money's worth.

  • Mortgagee

      for a farm mortgage, means a person to whom a farmer owes a farm business debt secured by the farm mortgage.

  • Satisfactory mediation

      Mediation for a farm business debt has been satisfactory if—

      1. as a result of the mediation, the farmer and the mortgagee have entered into a heads of agreement; or
      2. the mediation has proceeded as far as it reasonably can with the farmer and the mortgagee having participated in good faith, but they have not entered into a heads of  agreement
Last updated
26 October 2018