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Family Court Judges to Mediate cases

The Federal Circuit Court of Australia operating in its Family Law Jurisdiction has released Practice Direction No. 1 of 2019 – Judicial mediations in family law matters which sets out arrangements for the conduct of Judicial Mediations.

Criteria for suitability for Judicial Mediation

Matters suitable for Judicial Mediation include the following:

  • Both parties are legally represented;
  • Where one or both parties are self-represented and the docket Judge determines the matter is suitable for judicial mediation;
  • Property disputes;
  • Parenting disputes where there is no  allegation of  serious risk and/or family violence;
  • Appropriate child support matters;
  • Compliance with orders for a prior unsuccessful private mediation;
  • A risk that the costs and time of the trial will be disproportionate to the subject matter of the dispute;
  • Any other matters identified as suitable, by the docket Judge.

Application by parties for Judicial Mediation

A party seeking a Judicial Mediation, subject to notification of all other parties to the proceeding, may make an oral application in Court for a mediation or apply in writing to the Docket Judge in Chambers.

Any application in writing must be supported by a brief summary, in bullet point format, addressing why the matter is suitable for Judicial Mediation.

Within 14 days of receipt of an application for Judicial Mediation by another party to the proceeding, a party must:

  • If consenting to Judicial Mediation, forward to the chambers of the Docket Judge a consent to the mediation.
  • If opposing Judicial Mediation, forward to the chambers of the Docket Judge, a brief summary in bullet point format, addressing why the matter is not suitable for Judicial Mediation.

If the parties consent, the application for Judicial Mediation will be determined on the papers, thereby avoiding the need for an oral hearing of the application.

Judicial Mediator

The Judicial Mediator may not be the docket Judge.  Where both Judges consent, the docket Judge may refer any suitable proceeding in her or his docket for Judicial Mediation by another Judge.

Preparation for Judicial Mediation

The docket Judge will make relevant procedural orders for the Judicial Mediation.

In addition to any matter addressed in specific orders of the docket Judge, the following preparation will be required to be completed prior to Judicial Mediation.
Property disputes:

  • A list of all relevant applications, responses, affidavits and financial statements filed in the proceeding;
  • A balance sheet of agreed and disputed assets and liabilities;
  • A Case Summary addressing s.79/s.90SM contributions and s.75(2)/s.90SF(2) needs;
  • An indexed and paginated Court Book of copies of all relevant discovered or subpoenaed documents;
  • Copies of any valuations of any asset, financial resource or superannuation interest which are in dispute;
  • Written confirmation that a superannuation trustee has been accorded procedural fairness, if a superannuation splitting order is sought;
  • A draft minute of proposed orders.

Parenting disputes

  • A list of all relevant applications, responses, affidavits and financial statements filed in the proceeding;
  • A Case Summary addressing relevant s.60CC factors;
  • Copies of all family reports, s.11F Memorandum, psychiatric and risk assessments, if not previously filed with/available to the Court;
  • An indexed and paginated Court Book of copies of all relevant discovered or subpoenaed documents;
  • A draft minute of proposed orders;
  • Copies of any intervention orders currently in place.

Attendance at Judicial Mediation

All parties and their legal representatives must personally attend the Judicial Mediation. Participation via video link or telephone will only be permitted in exceptional circumstances.

The legal representatives must have full authority of the parties to settle the proceeding.

Conduct of Judicial Mediation

The Judicial Mediator shall not, without the express approval of all parties to the mediation:

  • Meet individually with a party and relevant legal representatives;
  • Disclose information provided to a party in a separate session to the other party.

Subject to the preceding paragraphs, the conduct of the Judicial Mediation shall be entirely at the discretion of the Judicial Mediator.

Confidentiality

Parties and their legal representatives must protect the confidentiality of the mediation and are referred to s.131 of the Evidence Act 1995 (Cth).

The Judge conducting the Judicial Mediation will return to the parties or destroy all material provided to the Judge or the Court, whilst preparing for or conducting the Judicial Mediation.

Listing for trial subsequent to Judicial Mediation

No Judge of the Court will hear and determine any matter in which the Judge has acted as Mediator, or where the Judge has become aware of any confidential information pertaining to the dispute between the parties.

If a proceeding fails to resolve at a Judicial Mediation, the matter will be referred to the docket Judge for further directions, if required, and trial.


The Foreseeable Problems with Judicial Mediation

In Australia there is the problem of judges going into private mediation sessions with litigants and lawyers who appear before them regularly and discussing matters personal to those litigants directly with those litigants.

This is a problem of perception. It raises the question of whether the
appearance of independence and impartiality of a judge who goes into these private sessions is compromised. Mediation by judges is not a  popular process with judges. It may be suggested that this “problem” is more theoretical than real. It is too early to make a proper assessment of that suggestion because judicial mediation in Australia has only recently become more widely adopted. It was introduced in the Federal Court of Australia some years ago, however it proved to be most unpopular and is rarely used in that court these days.

The other potential problem that can arise in judicial mediation is the risk that one or more of the parties may try to use the mediation as a “dry run” of their case (referred to later) and for the purpose of obtaining information that might otherwise not be available to them in the litigation. This would be inconsistent with that party’s obligation to attend the mediation and take part in the process in “good faith”. However in the rare instances that it may happen it would involve the judicial officer mediator having to make
an assessment in private of a party’s and their lawyers’ motives for
reacting in the particular way to the various offers that may be transmitted by the judge from the other side.

There is a danger of the opposing party becoming aware of information during an unsuccessful mediation and then seeking to gather evidence to prove the matter the subject of the information received if the matter goes to trial. This is permissible. Accordingly parties who attend mediation are usually very careful to ensure that they limit their disclosures to information they are happy to be disclosed at trial should the mediation be unsuccessful.

Finally it is important to note that with Judicial Mediation the Court is committed to the resolution of disputes in the most efficient manner possible and in particular with the assistance of private mediations, where appropriate.

Judicial Mediation is not intended to be a substitute for private mediation conducted by appropriately qualified mediators, but may be an option for appropriate matters. It is expected that practitioners and parties will exhaust all mediation alternatives, prior to judicial mediation.

If you would like a free, no obligation consultation with a nationally qualified mediator simply complete the form below and we will call you to discuss whether mediation could help you.

Footnote/Bibliography
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Family lawyers urged to steer clients towards private mediation and now the Family Court’s has a blitz to clear its three-year backlog of cases

In the years I have practised in family law, I have become convinced of the many benefits of private mediation in resolving property and parenting disputes and enabling couples who have separated to come to a fair and balanced agreement about their future arrangements, writes Tim Couch.

In hearings this month, the Family and Federal Circuit Courts are encouraging parties to negotiate resolutions independently and remove their disputes from the trial list.

In my opinion, any family lawyer who genuinely wants to help their clients will encourage them to pursue this course, rather than to make a beeline for court.

As anyone who practises in family law will be aware, most family law registries are presently experiencing unprecedented delays in determining cases. This is in part a result of an increased number of litigants and an insufficient number of judges. Our judges work tirelessly to resolve family law disputes as fairly and as efficiently as they can. But there are only so many hours in the day.

Because the system is overloaded with cases, many litigants experience delays of up to 18 months or even longer before their case is determined at a final hearing. This is becoming the norm in a number of registries. The longer the delay, the longer the uncertainty endured by the client. Private mediation provides a potential shortcut through this uncertainty.

Mediators, however, say the courts must do more to connect struggling families with qualified experts, not leave them to figure it out on their own.

Adelaide-based mediator Alison Shaw said families were left relying on lawyers who may lack mediation accreditation, putting them at risk of “being failed a second time”.

“People need someone who is actually committed to and confident in the mediation process, not someone who thinks they can do it because they’re a lawyer,” she said.

“If mediation fails, all these people will have to look forward to is another three-year wait because they have hopped off the litigation conveyor belt.”

A second advantage of private mediation is that it gives the client more control over the process. In the Family Law Courts, the judge controls and manages the court process from start to finish. The court determines who will hear the case, and when.

By contrast, a private mediator can be chosen by the client, their former partner and their respective solicitors.

A third advantage of private mediation is its cost-effectiveness. Litigating a family law dispute is rarely a cheap exercise. There is almost always a mountain of legal work involved in getting a case into court and presenting it in the best possible way in the hope of achieving a sound outcome. Not to mention regular court appearances.

This usually takes hours and hours of effort and preparation on the part of the solicitor, resulting in significant legal fees. By the time of the final hearing, the legal bill can amount to tens of thousands of dollars [for each party], and possibly more. A successful mediation, on the other hand, will only cost a tiny fraction of this amount, and if successful, could achieve the same or a similar result.

Finally, a failed mediation is rarely a waste of time. Even if it has not succeeded in resolving the dispute in its entirety, the matters that were in dispute at the start of the mediation have usually narrowed dramatically. Often with some further reflection and legal advice after the mediation, it may be possible to reach an agreement on any unresolved points without having to commence court proceedings.

If that’s not possible, the matters left for the court to determine have often been sharply reduced. In turn, less court time should be required to determine the case – maybe two days instead of five or six or more. This can often mean that the court can find the time to determine the case much sooner. And the chances of settling the case before a final hearing have likely increased as well.

In my experience, when couples opt to take their dispute to the Family Law Courts, they do not necessarily believe that this course of action will produce the best possible result.

Rather, warring couples can be motivated by anger and the desire to make their ex-partner suffer. It’s only human nature to long for vengeance in circumstances where a relationship sours and we feel rejected, slighted, humiliated or betrayed. It’s a natural response.

Sometimes the desire to keep fighting is not even motivated by concerns over unfair apportionment of money or property or time with children. Instead it can be based on an entirely emotional impulse that can border on obsession – for example, a client may be convinced that their ex had an extramarital affair and is determined somehow to “make them pay”.

Such impulses may be understandable, but they definitely work against the client’s best interests. I do my utmost to make clients whose anger has eclipsed their reason understand that no court is ever going to give them everything they want, while leaving their ex with nothing.

A court will always try to make decisions that are as fair to all parties as possible, so what the client is really facing is a choice between two types of compromise – the first reached voluntarily, relatively quickly and relatively cheaply, with both parties having input into the details of the arrangements; the second being a court-imposed compromise in which all the details have been determined by a judge at much greater expense and after a much longer delay. And quite often, neither party is entirely happy with the outcome.

As I see it, clients wanting to fight their ex and make them suffer is not the only obstacle to private mediation. The other obstacle can often be the approach adopted by the lawyers they retain. Hand on heart, I have to say that there are lawyers who will not even bother to try to steer their clients towards compromise, preferring to sit back and allow the flames of hostility to burn in the knowledge that a protracted legal battle will generate far more in legal fees.

A Lawyers Perspective

Some practitioners are notorious for letting a family law matter unnecessarily drag on for months and sometimes years before finally giving strong advice to their client on the steps of the court on the day of the final hearing to settle. It is hard to think of a reason for such an approach other than the desire to drive up the legal bill.

Yes, it’s true that if you encourage your client to attend private mediation and that mediation is successful, you will earn much less in professional costs than you would from a protracted court battle.

But ask yourself, why did you become a lawyer? Was it altruism, so that you could use your legal skills to help people in the most efficient and effective way possible? Or was it greed, so that you could extract every possible last cent from the general public, individually and collectively?

I appreciate that private mediation will not be suitable in all family law cases, and for a variety of reasons. However, I think it is a fair statement to say that private mediation will be suitable in the vast majority of family law cases.

Family lawyers are unlikely to ever run out of work. Business will always be steady, if not busy. As long as the sun continues to come up in the morning, couples will separate, and will need help to disentangle their lives from one another.

From a perspective of a party to a family law dispute

You need to ask yourself, do you really want to run the gauntlet of what is the Family Law Courts, the costs associated with it, the delays now going on 3 years with some Lawyers part of the cause of those delays only to tell you when you reach the trial date to settle, if you think its time to take control of your life, why not try private mediation.

To find out how mediation could help resolve your conflict, fill in the form below with your details and a qualified Mediator will contact you for a free no obligation initial consultation.

Sources : Lawyers Weekly by Tim Couch is a lawyer in the family law team at Stacks Law Firm,  The Advertiser (Adelaide Now), Danny Jovica – NMAS Accredited Mediator.

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Why some women walk away from the family court

On the surface, their two-decade marriage might have looked a success: a large home, prestigious cars in the driveway and a gaggle of children growing fast.

But when Sarah’s* husband returned home each day from his high-paid job in Melbourne’s business district, she bore the brunt of his frustration and violence.

He urinated on her, cut her hair, assaulted her and forced her to sleep on couch cushions on the floor rather have her “dumb, dirty, stupid” presence in their bed.

When Sarah eventually fled – not a dollar to her name – and took out a restraining order, her wealthy husband warned she was “never going to get a cent”.

It is at this stage that Sarah could have considered Mediation as a mechanism to bring her husband to the negotiating table, mediation today can be conducted in a safe-space, where the parties can be in separate rooms in case of fear of violence and intimidation.  There are also online facilities available where it can be conducted from the safety of your own home.

Many disadvantaged women simply walk away from their entitlement to a fair division of property when relationships end because of a lack of quick, affordable ways to resolve family law disputes, according to new research from the Women’s Legal Service Victoria, launched on the eve of International Women’s Day.

A quick affordable method to resolve this could have been Mediation, had Sarah known of the options available to her, even if the matter had already gone to compulsory family mediation and a 60i certificate had been issued, there was nothing preventing Sarah from taking control of her life and invoking private mediation, this time with a qualified Mediator of her choice, the mediation would still be unbiased and facilitated in a neutral capacity but at least Sarah could feel comfortable with the person doing the mediation.

Dividing assets, like superannuation for example, through the family law system is far too complex for someone with no legal training, the service’s lawyers say.

Researchers interviewed about 50 clients who had small amounts of property to divide up after separation, with the average size of settlements about $71,000.

But these relatively modest sums could make a crucial difference to the lives of these women, who were often battling financial hardship.

They told heartbreaking stories of being admitted to hospital from court-related stress, or spending a year in a court battle, having to interpret legal documents with a dictionary in one hand.

Even before matters reached court, two-thirds of women had their claims delayed because their ex-partners were unwilling to make a full and frank disclosures of their financial position.

This meant they had to begin onerous court proceedings, rather than settle matters through negotiation,  however once more, appropriate dispute resolution through Mediation may have helped achieve a faster result.  Even if there had been a failed attempt at mediation in the early stages of the break up when things were highly emotionally charged,  as time passes, the opportunity to revisit mediation for resolution should not be overlooked.

The relevant laws are incredibly complicated and hard to interpret, and accessing any rightful ownership is a many-step process, said Helen Matthews, the director of policy at the legal service.

“At the moment it’s one-size-fits-all approach, no cheap or efficient way of dealing with smaller matters in the current system,” Ms Matthews saaid.

The majority of women interviewed – almost 90 per cent – had experienced family violence, including economic abuse, and all said the delays they experienced in resolving disputes only exacerbated their financial difficulties.

Once more, had Sarah been informed of the low cost solutions available with Mediation and the speed at which it could resolve things so she could get on with her life, things may have been very different.

Sarah’s only option when she left her husband was to sleep in a donated tent at the local showgrounds. Their children remained in the family home – he had never been violent towards them and Sarah felt they would be safe.

For three months she lived on cornflakes and canned food until she was placed in community housing.

Through her eight-year family court matter, Sarah had to constantly subpoena her partner – at more than $100 a pop – who did not want to disclose his financial situation. She was eventually awarded a $100,000 settlement.

Sarah continues to be terrified of her ex-husband, and said when she saw him at the court hearing she almost wet herself with fear. Negotiation through a third party would reduce this trauma for women in her position, she says.   The best qualified third party in such a situation is an appropriately qualified Mediator who has been accredited through the National Mediation Accreditation System and is registered with the Mediator Standards Board of Australia.

Family violence is only rarely taken into account in determining property settlements, researchers found, despite the fact that economic abuse often leaves women with limited resources.

Mediation however can also help manage high conflict cases such as Sarah’s through use of Restorative Justice and Shuttle Mediation processes along with online services that are available now where you can participate in the mediation from the safety of your own home.

There should be a streamlined system for small property matters, and strengthened obligations for financial disclosure, researchers say.

Sarah, who found the Victorian Women’s Legal Service by searching the terms “women and help” on a computer in the local library, says the free legal advice and support saved her life.

“I was suicidal and could see no future for myself. I’m so appreciative of them.”

*Names have been changed for safety reasons, article original source from the Age.

For further information on if Mediation can help you, please complete the contact form below for a free initial consultation.

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Reasons To Try Child Custody Mediation

Child Custody Mediation

Child custody mediation provides parents with a valuable alternative to an adversarial divorce. Through the process of mediation, parents have the opportunity to work together and create a parenting plan that honors each parent’s unique contribution to their children’s upbringing.

Benefits Of Child Custody Mediation

Divorce is not commonly a good situation, but when there’s a child involved, the potential damage is not just about you. If you want to avoid as many tumultuous situations as possible and protect your child, child custody mediation is way to go. Through the mediation process, parents find a way, with mediator guidance, to work together and create a plan that honors the child and their upbringing. There are a number of advantages to working out child custody in this manner. Here are a few to consider.

Non-Adversarial Option

Child custody mediation is a collaborative effort that has one common goal in mind…the child and what is best for him or her. Unlike going to court, mediation focuses on the child and their best interests. Through the process, you can establish a parenting plan that allows both parents to be active and involved in the child’s life. Taking a former spouse to court and suing for custody can be a very messy situation.

Easier On Children

Contested divorces are hard on everyone involved and they can have a huge impact on the children in the picture as well. Despite good intentions, you realize that you have a lawyer and they are going to fight with all of their power to protect your interests.

Children can get caught in the middle of two sides fighting against one another. Child custody mediation, on the other hand, teaches your children that you and your former spouse can sit down, speak civilly, and work things out  where they are involved.

Mediators Are Neutral

Well-trained mediators are professionals who do not take sides. They want to help you and your former spouse work together in order to figure out a plan. You don’t have to rehash the past or reasons you split. Instead, you will move forward and figure out new ways to work together. A lawyer is going to be on one side or the other, but a mediator is neutral and in the middle.

Mediation Is Blame Free

Whether you are blaming one another for events leading to the divorce or not, mediation focuses on moving past those issues. You need to be able to work together in order to raise your child successfully. When using a mediator, you can set aside the blame game and focus on new skills that will help you collaborate as parents. The plan you come up with is something you will both agree on and stick to over the years.

Focus On The Future

Let’s assume that parties involved love their children and everyone wants what is best for them. The mediation process focuses on the future plans of the family and the future of the children. It creates a workable plan that allows children to have relationships with both parents in a meaningful manner. Looking ahead instead of into the past will help a new type of relationship form between the parents.

Mediation Reduces Conflict

A good mediator will help you and your ​ex develop new skills for communicating with one another. Over time, this will considerably reduce the stress on all of you. When you and your ex are no longer arguing over the past, it’s a lot easier to focus on what’s best for the children in the “here and now.”

Mediation Reduces Stress

The stress that weighs on you during a divorce can lead to insomnia, the inability to concentrate, and increased impatience with your children. As long as you remain in a constant state of conflict with your ex, this response is natural. Child custody mediation will lower your overall stress by giving you the tools to work through your conflicts and give you a hopeful outlook on the future.

Mediation Helps You Create an Effective Working Relationship With Your Ex

This is one of the most important aspects of learning to work together in raising your children. Through ​mediation, you will learn to communicate effectively with one another and create a workable plan for the future.

Mediation is less costly

When you work with a lawyer, you pay him or her by the hour to represent your interests. Since your ex is also paying a lawyer for to represent his or her interests, the amount of time it takes to reach a consensus builds and the end result becomes extremely costly.

Mediation creates a win-win result

The focus of mediation is to create a plan that is best for the children. We know that in non-abusive situations, it is best for children to have access to both of their parents. The process of child custody mediation side-steps a lot unnecessary arguing and helps parents create a working relationship through which the children can thrive.

Sources : South Bay Mediation, The Spruce

Finding A Mediator

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Farm debt: Banking royal commission tipped to move on agribusiness mediation

Bloomberg

The banking royal commission is being urged put an end to the patchwork of state-based mediation schemes for agribusiness customers and establish a single national body for working through disputes with banks.

The move would deliver the time-poor inquiry headed by Commissioner Kenneth Hayne an easy win, with the current state-by-state system enjoying few supporters.

National Farmers Federation policy director Tony Mahar said the existing system, which only guaranteed farmers in Victoria, NSW and Queensland with access to a formal mediation service, was inadequate.

“It’s fragmented and unhelpful, what we need is a national approach for farmers and financial institutions.”

The Hayne royal commission is believed to be aware of the disjointed approach to mediation, drawing attention to the problem by dedicating two pages of its recent report on features of the Australian financial system to the issue, including the $68.6 billion in farm debt held by the big four banks.

The plights of farmers were not however specifically mentioned during the opening statements made by Commissioner Hayne and senior counsel assisting Rowena Orr, which signaled the royal commission would seek to explore misconduct in the home loans and consumer credit segments.

The idea of a national body has failed to get traction and was last seriously considered in 2014 when a drought and the ban on live exports conspired to put many farms under. Nationals leader Barnaby Joyce compelled the banks to attend a crisis meeting at the time and sketch out a workable solution.

Mr Maher said that a great deal of work had been done on the subject over the years, it had broad support among stakeholders and it was something the government should be able to deliver.

The establishment of a national farm debt mediation scheme was most recently recommended by the select committee on lending to primary production customers, which delivered its final report in December 2017.

It recommended a scheme based on the NSW model with a $10 million ceiling on loan amounts.

Australian Banker’s Association CEO Anna Bligh has also thrown her support behind a nationwide mediation scheme to resolve issues that crop up between farmers and their banks quickly and fairly.

“It shouldn’t matter whether you’re a farmer in Cootamundra, NSW or the Western Australian wheat belt you should be treated equally and have the same access to financial mediation” Ms Bligh said.

The newly established Australian Financial Complaints Authority (AFCA) which replaces both the Financial Ombudsman Service (FOS) and the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT) will have a ceiling for loans under dispute of $5 million.

This is a significant increase from the ceiling of $2 million FOS was previously subject to. Data from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) shows that a ceiling of $5 million would cover 99 per cent of loans in the rural sector.

Australian Small Business and Family Enterprise Ombudsman Kate Carnell has been critical of the banks for trying to cap the size of loans defined as small business loans and therefore eligible for mediation rather than more expensive legal proceedings.
Mr Mahar said if agriculture exports were to reach a target of $100 billion per year then processes needed to be established for when farms get into difficulty.

“We recognise that banking and farms are always going to be partners and nationally consistent approach will underpin this,” Mr Mahar said.

In the meantime,  while you wait for the Government to nationalize the Mediation system, if you need help now, contact us with the form below to arrange for a private and  confidential free consultation as to whether private mediation can help you with your Farm or Banking debts.

Source : Australian Financial Review

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Farm Debt Mediation Reforms: Has the farm house been spared?

The Farm Debt Mediation Scheme makes it compulsory for banks and other creditors to offer mediation to farmers before commencing debt recovery proceedings on farm mortgages.

A farmer has 21 days to respond to an offer to mediate, otherwise the creditor can commence action as normal.

Farm debt mediation is a structured negotiation process where a neutral and independent mediator assists the farmer and the creditor to try to reach agreement about current and future debt arrangements.

The mediator’s role is to facilitate the discussion and they will not provide advice on the matters in dispute.

Mediation is a simple, voluntary and confidential process that is quick, accessible and affordable.

The scheme is administered by the Department of Economic Development, Jobs, Transport and Resources (DEDJTR) and further information can be sought from the Farm Debt Mediation Officer on 136 186. Mediations will be provided through the Victorian Small Business Commission.

This scheme applies only to:

  • farm mortgages covering a farm (or part of a farm), farm machinery or a water share (within the meaning of the Water Act 1989).
  • farmers, defined as: ‘a person (whether an individual person or a corporation) who is solely or principally engaged in a farming operation’. This includes people who own land cultivated under a share-farming agreement, or the personal representatives of a deceased farmer.
  • Guarantors to a farm mortgage need to be fully informed and involved in the process.

It is recommended that farmers seek assistance from their local Rural Financial Counsellor, Solicitor, Accountant or some other appropriately qualified person. These people can assist farmers to prepare for mediation, attend the mediation session with farmers, and help with any actions that need to be undertaken after the mediation session.

In Victoria the FARM DEBT MEDIATION ACT 2011 – SECT 1 Purpose states:

“purpose of this Act is to provide for the efficient and equitable resolution of farm debt disputes by requiring a creditor to provide a farmer with the option to mediate before taking possession of property or other enforcement action under a farm mortgage.”

In Queensland the new regime provides mortgagees must:

  • offer to the mortgagor farmer the option of pursuing mediation before commencing any enforcement action.(including by way of taking possession, exercising power of sale or giving a statutory enforcement notice);
  • take part in the mediation in good faith if the mortgagor farmer opts to pursue mediation; and
  • not enforce the mortgage in contravention of the Act.

In NSW after 23 years there is a review by the NSW Rural Assistance Authority’s (RAA’s) in their Strategic Plan 2015-2019 of the Farm Debt Mediation Act 1994 (NSW) (FDMA).

The review is part of the RRA’s initiative in partnership with the Australian Government to nationalise farm debt mediation, whilst driving economic growth within the industry and community.

The FDMA allows debtors in default of a farm mortgage to engage in facilitated mediation with creditors before the creditor takes enforcement action to recover the debt, allowing for the ‘efficient and equitable resolution of farm disputes.’(Section 3 FDMA)

What is Under Review?

The proposed changes impose strict obligations upon farmers to comply with the FDMA’s prescribed operation, yet eliminates some burdensome procedural requirements.

The proposed main changes are to:

  • expand the definition of “farmers” to include guarantors with an interest in an affected farm mortgage to be notified of and possibly attend mediation proceedings;
  • change the definition of “farm” so that it may be expanded to protect a broader range of farmers under the Australian New Zealand Standard Industrial Classification 2006 (ANZSIC), which excludes fishing, hunting and trapping from the FMDA.
  • The Review also proposes new guidelines requiring farmers to demonstrate they are principally involved in primary production.
  • exclusion of machinery such as motorbikes, quadbikes cars and trucks may no longer form the subject of debt mediation, as the law doesn’t currently exclude machinery that serves multiple purposes.

Other important changes include the proposed elimination of the requirement to establish a mediation claim in multiple jurisdictions, as well as the introduction of “show cause” notices and periods when answering to allegations made by creditors and lodging exemption periods. The law may also be amended so as to not apply to farm mortgages that are secured by a guarantor that is subject to a bankruptcy petition. It has also been suggested that the FDMA be clarified to ensure that subsequent mediations are not needed for a farmer’s default under agreements giving effect to the mediation, such as a contract or mortgage document.

The FDMA may also specify the methods in which a mediator is to be chosen to be prescribed by regulation, and may require the provisions of mortgage documents and correspondence to either the mediator or creditors during proceedings.

What does this mean for farmers?
The ability of guarantors to be notified and participate in mediation may relieve the burden upon farmers to claim protection of the FDMA by establishing the Act applies.

Farmers may be limited to which farm debts can be mediated, with certain machinery excluded.

The farmer may have new thresholds and requirements to establish they are a primary producer or involved in Agriculture, Aquiculture or Forestry and Logging as part of the ANZSIC Code.

Under the proposed changes, If the subject of the farm debt covers land in multiple states, farmers may no longer be required to submit claims in multiple jurisdictions.

Farm mortgages that are solely secured by a guarantor who is subject to a bankruptcy petition is unable to gain protection under the FDMA.

Farmers may no longer have the responsibility of nominating a mediator to which the creditor must agree.

What does this mean for practitioners?

Lawyers need to encourage their clients to respond promptly in proceedings as the right of famers to respond to allegations made by the creditor under s 11 within 28 days may become a legal requirement.

Lawyers may need to assist their client in effectively showing cause in order to submit an exemption period, which stays proceedings for 6 months.

Lawyers also need to be aware if their client defaults on agreements that give effect to the mediation under the proposed changes, that a subsequent mediation may not be required.

Accurate records of all correspondence and relevant mortgage documents should be kept as they be required by the mediator and/or creditor during proceedings.

Despite the changes which may appear to limit the ability of farmers to mediate their debt, mediation is overall a relatively inexpensive and efficient process. Between 12 February 1995 and 30 December 2016, the RAA reported that out of the 1659 ‘satisfactory mediations’ that have been undertaken under the FDMA, 1487 mediations resulted in parties reaching an agreement. This is an agreement rate of 90%.

Ultimately it is worth being aware of proposed changes to ensure that farmers are aware of their rights and obligations in mediating their debts, resulting in efficient and quick resolutions.

So when it comes to Farm Debt and Mediation, it makes sense to talk to an accredited mediator under the National Mediation Accreditation System,  someone who is registered with the Mediator Standards Board and has professional training on how to help manage and mediate such disputes if you find yourself in such a situation, you have 21 days to act.

Sources:
Danny Jovica : Mediator Accredited under NMAS/MSB/AMA.

Barraket Stanton

Copper Grace Ward

Agriculture Victoria