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Farm Debt - When is a rural property not a farm? |
Through the Farm Debt Mediation Act, mediation is required before a creditor can take possession of property or take other enforcement action under a farm mortgage. In the Act 'farm' means land on which a farmer engages in a farming operation. But what is a farming operation? |
In one recent case, the court decided that a fish hatchery which grows fish for pet shops is not a farm for the purposes of the Farm Debt Mediation Act. The court said that farming operations "ought to be confined to traditional agricultural pursuits". |
However, the court left open the question of whether a fish hatchery which grows fish for human consumption would be held to be a farm. |
In another case, the court decided that a company running a riding school fell outside the definition of "farming operations" as required by the law. |
The operator of a small market garden fared better in being considered to be engaged in farming, despite also being engaged in other occupations, including computer consultant, finance broker, property developer, mercantile agent, cleaner and private investigator. |
In his loan application, the borrower had described himself as a "computer programmer" with a second job as a "computer specialist". However, he gave evidence that his other jobs occupied only two to three days per week, often only at night, while the balance of his time was spent attending to horticultural matters. |
The result was that the farm debt mediation law was found to apply. The mortgagee's writ of possession over the borrower's land was stayed, and the mortgagee was ordered to pay the costs of the proceedings. |
