A claim for possession of farming land and the recovery of a farm debt was held to be void under the Farm Debt Mediation Act (NSW) by a single judge of the Supreme Court of NSW as an enforcement action under the Farm Debt Mediation Act (NSW). However, that decision was overturned by the Court of Appeal and judgment was entered for the debt plus interest.
Section 8(2) of the Farm Debt Mediation Act (NSW) provides:
Enforcement action taken by a creditor in respect of a farm debt in contravention of this Act is void.
Mr Warwick Denshire owned land and his company. Green Lees Developments Pty Ltd (Green Lees) was a creditor of Kiriwina Investment Company Pty Ltd (Kiriwina). After a number of defaults Kiriwina sold the land and sued for the balance owing, $1,361,724.14, plus interest.
Mr Denshire and his company defended the action brought by Kiriwina on the basis that he was a farmer and any enforcement action against him and Green Lees was void, being in contravention of the Farm Debt Mediation Act. The failure of Kiriwina was in failing to invite Mr Denshire and Green Lees to a mediation to attempt to resolve the dispute.
Her Honour Justice Harrison in the Supreme Court found that, because there was a share farming agreement in place at the time of the enforcement action, Mr Denshire and Green Lees were entitled to the protection provided for in the Farm Debt Mediation Act. Accordingly, the proceedings were dismissed.
A further argument advanced by Mr Denshire – that a snake and rodent business conducted by him on the property qualified him as a farmer – was rejected by Her Honour on the basis that such a business was not a farming operation.
In the Court of Appeal, the judges first looked at the share farming arrangement. If the court was satisfied that there was a share farming agreement, it would have established Mr Denshire as a farmer, because a farmer includes a person who owns land cultivated under a share farming agreement.
The evidence of the share farming agreement was meagre. During his cross examination, Mr Denshire was asked about a fire in 2013 that destroyed the fencing with a neighbouring property. He was asked about allowing his neighbour to run cattle on his land after the fire destroyed the fencing and he answered that “they did a share farming deal.” It was on this evidence that Her Honour found that Mr Denshire was a farmer and entitled to the protections in the Farm Debt Mediation Act. The Court of Appeal found that this was not sufficient on the following bases:
- The issue was not pleaded
- It was not raised in submissions
- The only evidence given about it was in a non-responsive answer to a question in cross examination
- What Mr Denshire understood to be a share-farming agreement deal was not explored .
Mr Denshire bred snakes for the pet market. On appeal he did not argue that was a farming operation. He did, however, argue that the rodent business was a farming operation. Mr Denshire raised rodents to sell to pet shops and pet owners to feed to snakes. The court agreed with Justice Harrison that raising animals for the pet market was not farming. They, however, considered that breeding rodents could be a farming operation, but found that there was no evidence that Mr Denshire was principally engaged in that business as a farming operation.
Their Honours ordered that judgment be entered for Kiriwina for $1,485,783.77 and Mr Denshire and Green Lees were ordered to pay the costs of Kiriwina.
