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1998
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.*
(f) to clarify the functions of mediators, and
(g) to enable documents issued under the Act to be served on corporations
by serving them on directors or secretaries of the corporations.
Clause 2 provides for the commencement of the proposed Act on a day or
days to be appointed by proclamation.
Clause 3 is a formal provision giving effect to the amendments to the Act
set out in Schedule 1.
Schedule 1 Amendments
Application of Act to hire purchase agreements
Schedule 1 [1] includes hire purchase agreements as farm mortgages to
which the Act applies. This will mean that mediation provisions under the
Act will apply to proposed enforcement action relating to hire purchase
agreements.
Schedule 1 [2] inserts a definition of hire purchase agreement.
Application of Act to bankrupt farmers
Schedule 1 [3] amends the Act so that it will not apply to a farmer whose
property is the subject of a bankruptcy petition by any person. Currently, the
exclusion applies only where a bankruptcy petition is presented by a farmer
or a creditor.
Invitations to mediation sessions
Section 11 of the Act sets out the circumstances when a certificate may be
issued which certifies that the Act does not apply to a farm mortgage, thus
enabling enforcement action to be taken by a creditor without having to
notify a farmer of the availability of mediation under the Act and to
participate in mediation. One of the circumstances in which a certificate may
be issued is if a farmer has declined mediation in respect of a farm debt.
Under the section this may be established if the farmer fails, within 28 days,
to respond to an invitation to attend a mediation session. Schedule 1 [4]
omits the requirement that such an invitation for a farmer to attend a
mediation session must specify a time and place for the session.
Explanatory note page 2
Duration of certificates that Act does not apply to farm
mortgages
Currently, a certificate issued under section 11 of the Act is in force for a
period of 3 years from the date it is issued. As it is issued at the request of a
creditor, it may not be issued until some time after the relevant events have
taken place. Schedule 1 [5] changes the time period for which certificates
issued under the section will be in force. The period will commence when the
certificate is issued and will generally end 3 years after the relevant event that
enables a certificate to be obtained.
Cooling off periods for mediation agreements
Schedule 1 [6] inserts proposed sections 11A and 11B. Proposed section 11A
provides for a 14-day cooling off period for any agreement entered into by a
farmer and a creditor during, or at the conclusion of, a mediation session. An
agreement must contain a statement about the cooling off period. If it does
not, the cooling off period is extended until 14 days after notice is given to
the farmer of the cooling off period. A certificate under section 11 of the Act
will not be able to be issued until the end of the cooling off period. Proposed
section 11B confers on a farmer a right to rescind an agreement during the
cooling off period. It also provides for the effect of the rescission and the
adjustment of rights as between the parties if such a rescission occurs.
Functions of mediators
Schedule 1 [7] re-enacts the provision conferring functions on mediators at
mediation sessions and provides that the function of a mediator is to mediate
or attempt to mediate between the farmer and creditor for the purpose of
arriving at an agreement for the present arrangements and future conduct of
financial relations among them.
Service of notices
Schedule 1 [8] facilitates the service of documents on bodies corporate by
enabling them to be served on a body corporate by being left with an officer
of the body corporate at its registered office, by being left with a director or
secretary of the body corporate or by being sent by post, telex, facsimile or
similar electronic facility to the registered office or the place of residence or
business of a director or secretary of the body corporate.
Savings and transitional provisions
Schedule 1 [9] and [10] insert savings and transitional provisions consequent
on the enactment of the proposed amendments.
Explanatory note page 3