Farm Debt Mediation Act 1994

The Authority may, on application, grant or refuse an exemption certificate.

The Authority must grant an exemption certificate if:

the farmer is in default under the farm mortgage, and

no prohibition certificate is in force in relation to the farm mortgage, and

the Authority is satisfied that there is at least one additional ground for granting the exemption certificate.

Each of the following is an additional ground for granting an exemption certificate:

the farmer has, when in default, given a mediation request to the creditor and satisfactory mediation has taken place following the request,

the farm debt is secured by a farm mortgage over farm property in another State or Territory and in New South Wales and mediation (equivalent to satisfactory mediation) has taken place under a corresponding law of that State or Territory in respect of that part of the farm debt that is secured by a farm mortgage over farm property in New South Wales,

the creditor has given the farmer a notice inviting mediation and has attempted to mediate in good faith throughout the period of 3 months (or such longer period as has been agreed by the creditor for the purposes of this section by notice in writing given to the farmer) commencing on the day on which the notice was given,

the farmer has failed to respond to a notice inviting mediation within the period required by Part 2 (or within such longer period as the Authority considers is reasonable in the circumstances),

the farmer has failed to take part in mediation in good faith or has unreasonably delayed entering into or proceeding with mediation in respect of the farm debt,

the farmer has indicated in writing to the Authority or to the creditor that the farmer does not wish to enter into or proceed with mediation in respect of the farm debt,

the farmer has, in any other manner, declined to mediate (whether under this Act or under a corresponding law of another State or Territory).

However, the Authority may refuse to grant an exemption certificate if satisfied that:

in the circumstances, the farmer is justified in declining to mediate, and

the farmer intends to mediate within a period that is reasonable in the circumstances.

A failure by a creditor to agree to reduce or forgive any debt does not, of itself, demonstrate a lack of good faith on the part of a creditor in attempting to mediate.