Queensland CREDIT (RURAL FINANCE) BILL 1995 Queensland hah ered CREDIT (RURAL FINANCE) BILL 1995 TABLE OF PROVISIONS Section Page Hn nA ff Ww NY ~ 11141619 PART 1—PRELIMINARY Short title 20.6... 4 Commencement .... 0.0.6... cece ccc cette eee eens 4 Definitions and dictionary .... 2.0.0.0... 0.00 c eee eee eee ee 4 Purpose of this Act... 2.0... cece eee eee 4 Act applies to all persons ........ 0.06.0 5 Courts with jurisdiction under this Act... 6.6.6.6... cece cece ee 5 PART 2—DEFAULT NOTICE Mortgagee must give default notice........ 66... ee eee 6 Requirements for default notice ...........0 0... c eee eee eee 6 Exception to s 7—further default during notice period................. 7 Exception to s 7—taking possession to protect equipment ............. 7 Other exceptions tOS 7 1.6... cece cece teen ees 8 Onus on mortgagee to show s 7 does not apply.............0 0005-00 e 8 PART 3—RELIEVING ORDER Mortgagor may apply for a relieving order ..............0.000 eee eee 8 Notice of application .......... 0.0.0 eee ee 9 Effect of serving notice of application............. 00. e eee eee eee 9 Court may make relieving order... 1.0.0.0... eee eee 10 Compliance with relieving order ........... 000000000000 c eee eee ee 11 PART 4—MISCELLANEOUS Compensation for non-compliance by mortgagee................00... 11 This Act in addition to other laws ........ 0.00.0. e cece eee eee 11 Contracting out... 6... eee eee 12 Credit (Rural Finance) 2224 Service of notices on each mortgagee, mortgagor or guarantor.......... 12 Approval of forms ...... 0.00... cece eee eee 12 Regulation making power... ....... 0.0.0... c cece eee eee 12 Transitional... 2.0... ete nents 12 SCHEDULE ......................... 14 DICTIONARY A BILL FOR An Act to give protection to farmers against the enforcement of mortgages over equipment used for farming Nan Ww sl 4 s4 Credit (Rural Finance) The Parliament of Queensland enacts— PART 1—PRELIMINARY Short title 1. This Act may be cited as the Credit (Rural Finance) Act 1995. Commencement 2. This Act commences on a day to be fixed by proclamation. Definitions and dictionary 3.(1) The dictionary! in the schedule defines particular words used in this Act. (2) Definitions found elsewhere in the Act are signposted? in the dictionary.3 Purpose of this Act ag 4.(1) The purpose of this Act is to provide some protection to farmers ainst the enforcement of mortgages over equipment they use to carry out In some Acts, definitions are contained in a dictionary that appears as the last schedule and forms part of the legislation—Acts Interpretation Act 1954, section 14(4). Words defined elsewhere in this Act are generally signposted in the dictionary. However, if a section has a definition that only applies to the section, or a part of the section, it is generally not signposted. If this type of definition is set out in a separate subsection, the subsection is generally the last subsection of the section. The signpost definitions in the dictionary alert the reader to the terms defined elsewhere in the Act and tell the reader where these definitions can be found. For example, the definition ' "relieving order" see section 16(3)', tells the reader there is a definition of the term "relieving order" in section 16(3). 11 14 s5 5 s6 Credit (Rural Finance) their farming businesses. (2) The purpose is to be achieved mainly by providing for— (a) a mortgagee to give at least 30 days notice before exercising a right to take possession of, or sell, farm equipment; and (b) the court to make an order allowing a farmer to keep possession of equipment, for up to | year, if the equipment is used to carry out the farmer's farming business and the court considers, among other things, that the farmer has a reasonable prospect of being able to remedy any default. Act applies to all persons 5. This Act applies to all persons including the State and, so far as the legislative power of the State permits, the Commonwealth and the other States. Courts with jurisdiction under this Act 6.(1) The jurisdiction expressed to be exercisable by the court under this Act in relation to a mortgage is exercisable by— (a) if proceedings in relation to the mortgage have been started in, or are before, a court—that court; or (b) otherwise—the court whose monetary jurisdiction is not exceeded by the amount payable under the mortgage when the proceeding concered is started in the court. (2) In this section— "court" includes a small claims tribunal. OMAN DN FW NY 1216 18 2023 s7 6 s8 Credit (Rural Finance) PART 2—DEFAULT NOTICE Mortgagee must give default notice 7.(1) This section applies if a mortgagee has a right under a mortgage over farm equipment to take possession of, or sell, the equipment. (2) The mortgagee must not exercise, or purport to exercise, the right unless— (a) the mortgagor has defaulted; and (b) the mortgagee has given the mortgagor, and each guarantor (if any), a notice (a "default notice") under this part for the default; and (c) the default has not been remedied by the due day stated in the default notice. Maximum penalty—S00 penalty units. Requirements for default notice 8.(1) The default notice must be in the approved form. (2) Unless the mortgagee reasonably believes the default is incapable of being remedied, the default notice must state— (a) how the mortgagor has defaulted; and (b) what the mortgagor must do to remedy the default, including, for example, any amount that must be paid to the mortgagee; and (c) that the mortgagee intends to take possession of, or sell, the equipment on or after a stated day (the "due day") unless the default is remedied; and (d) that, if the mortgagor makes another default of the same type before the due day that is not remedied by the due day, the mortgagee may take possession of, or sell, the equipment without giving another default notice under this part; and (e) anything else prescribed under a regulation. (3) If the mortgagee reasonably believes the default is incapable of being 15 17 20 222629 s9 7 s10 Credit (Rural Finance) remedied, the default notice must state— (a) how the mortgagor has defaulted; and (b) that the mortgagee believes the default is incapable of being remedied; and (c) that the mortgagee intends to take possession of, or sell, the equipment on or after a stated day (the "due day"); and (d) anything else prescribed under a regulation. (4) The due day must be at least 30 days after the day the notice is given to the mortgagor. Exception to s 7—further default during notice period 9.(1) This section applies if— (a) amortgagor defaults under a mortgage; and (b) the mortgagee gives the mortgagor, and each guarantor (if any), a default notice under this part for the default; and (c) the mortgagor makes a further default of the same type before the due day stated in the default notice for the first default; and (d) the further default is not remedied by the due day stated in the default notice for the first default. (2) Section 74 does not apply to the mortgagee in exercising, or purporting to exercise, a right under the mortgage for the further default. Exception to s 7—taking possession to protect equipment 10. Section 7 does not apply to a mortgagee in exercising, or purporting to exercise, a right under a mortgage to take possession of farm equipment if the mortgagee reasonably believes— (a) the mortgagor has removed or disposed of the equipment, or intends to remove or dispose of the equipment, in contravention of the mortgage; or 4 Section 7 (Mortgagee must give default notice) ono AI NWN Bw NY 1114 16 18 20 2326 sll 8 s 13 Credit (Rural Finance) (b) it is necessary to take possession urgently to protect the equipment. Other exceptions to s 7 11. Section 75 does not apply to a mortgagee in exercising, or purporting to exercise, a right under a mortgage if— (a) the mortgagee reasonably believes it was induced by fraud by the mortgagor to enter into the mortgage; or (b) the mortgagee has unsuccessfully made all reasonable attempts to find the mortgagor; or (c) the court orders that the mortgagee may take possession of, or sell, the equipment without complying with section 7. Onus on mortgagee to show s 7 does not apply 12. The onus of proving that section 7 does not apply to a mortgagee because of section 10 or 11(a) or (b) is on the mortgagee. PART 3—RELIEVING ORDER Mortgagor may apply for a relieving order 13.(1) This section applies if— (a) for a mortgage over farm equipment—the mortgagee has given the mortgagor a default notice under part 2; or (b) for a mortgage over equipment (whether or not it is farm equipment)— (i) the mortgagee has exercised, or purported to exercise, a right under the mortgage to take possession of the equipment; or 5 Section 7 (Mortgagee must give default notice) Ne FBO COM NID HWE w ee 14 17 19 21 23 s14 9 $15 Credit (Rural Finance) (11) the mortgagor has defaulted under the mortgage; or (111) for another reason, the mortgagor believes the mortgagee may exercise, or purport to exercise, a right under the mortgage to take possession of, or sell, the equipment. (2) The mortgagor may apply to the court for a relieving order if— (a) the mortgagee has not taken possession of, or sold, the equipment or, if the mortgagee has taken possession of the equipment, has not parted with possession of the equipment; and (b) the mortgagor is a farmer who is using, or intending to use, the equipment to carry out the farmer's farming business, or would be using, or intending to use, the equipment to carry out the farmer's farming business if the mortgagee had not taken possession of the equipment. Notice of application 14.(1) If the mortgagor applies for a relieving order, the mortgagor must immediately give a copy of the application (a "notice of application") to the mortgagee. (2) The court may order that the mortgagor is not required to comply with subsection (1) if the court is satisfied the mortgagor has unsuccessfully made all reasonable attempts to find the mortgagee. (3) The order may be made on conditions. Effect of serving notice of application 15.(1) If the mortgagor gives a notice of application to the mortgagee, the mortgagee must not, until the court orders otherwise or the application is withdrawn or dismissed— (a) sell the equipment; or (b) if the mortgagee does not have possession of the equipment—take possession of the equipment; or (c) if the mortgagee has possession of the equipment—part with its possession (other than to return it to the mortgagor). 16192428 30 s 16 10 s 16 Credit (Rural Finance) Maximum penalty—S00 penalty units. (2) To remove any doubt, it is declared that if the mortgagee has possession of the equipment when given a notice of application, the mortgagee is not required by subsection (1)(c) to return the equipment. Court may make relieving order 16.(1) The court must decide the application by dismissing it or by making a relieving order. (2) In deciding the application, the court must consider— (a) whether the mortgagor has a reasonable prospect of being able to remedy the stated default within | year after the notice day; and (b) how necessary the equipment is to the mortgagor in carrying out the farming business; and (c) whether the mortgagor has removed, damaged or disposed of the equipment, or intends to remove, damage or dispose of the equipment, in contravention of the mortgage; and (d) anything else the court considers relevant to making a just decision. (3) A "relieving order" is an order that— (a) if the mortgagee has possession of the equipment—the mortgagee must return it to the mortgagor; and (b) the mortgagee must not take possession of, or sell, the equipment for a stated period ending not later than | year after the notice day. (4) The court may make a relieving order on terms it considers appropriate, including, for example, that the mortgagor pay any enforcement expenses incurred by the mortgagee. (5) In this section— "notice day" means the day the mortgagee is given the notice of application or, if the court orders that the mortgagor is not required to give the notice, the day the court makes that order. "stated default" means— (a) if the mortgagee has given the mortgagor a default notice under RwWN ao ntniwn 12 1417 20 22 242831 s17 11 s19 Credit (Rural Finance) part 2—the default stated in the notice; or (b) otherwise—the default that is claimed by either party to have been made by the mortgagor. Compliance with relieving order 17. A mortgagee must comply with a relieving order. Maximum penalty—S00 penalty units. PART 4—MISCELLANEOUS Compensation for non-compliance by mortgagee 18.(1) This section applies if a mortgagee contravenes section 7, 15 or 17.6 (2) On the application of the mortgagor, the court may order the mortgagee to compensate the mortgagor for any loss suffered because of the contravention. (3) An order under subsection (2)— (a) may be made whether or not the mortgagee has been prosecuted for the contravention; and (b) does not affect the mortgagee's liability to be prosecuted for the contravention. This Act in addition to other laws 19.(1) This Act is in addition to any other law about the enforcement of a mortgage. (2) In particular, this Act does not prevent the issue of a notice to a mortgagor under other legislation. 6 Section 7 (Mortgagee must give default notice), section 15 (Effect of serving notice of application), section 17 (Compliance with relieving order) 1216 18 21 23 s 20 12 s 24 Credit (Rural Finance) Contracting out 20.(1) The following provisions of a mortgage or other instrument are void— (a) a provision to avoid or modify the effect of this Act; (b) a provision to have a mortgagor indemnify a mortgagee for any loss or liability arising under this Act. (2) A mortgagee must not be a party to a mortgage or other instrument containing a provision mentioned in subsection (1). Maximum penalty—100 penalty units. Service of notices on each mortgagee, mortgagor or guarantor 21. Ifa provision of this Act requires a notice to be given to a mortgagee, mortgagor or guarantor, and there is more than | mortgagee, mortgagor or guarantor for the mortgage, the notice must be given to each mortgagee, mortgagor or guarantor. Approval of forms 22. The chief executive may approve forms for use under this Act. Regulation making power 23. The Governor in Council may make regulations under this Act. Transitional 24.(1) A notice given under the Credit Act 1987, section 1087 before the commencement of this section, for a default under a mortgage over farm equipment, is taken to be a default notice given under part 2 of this Act.8 (2) If, before the commencement of this section, a mortgagor has applied 7 Credit Act 1987, section 108 (Restrictions on exercise of rights by credit provider or mortgagee) 8 Part 2 (Default notice) Oo won nun fF WN 1214 16 18 21 s 24 13 s 24 Credit (Rural Finance) to a court for an order under the Credit Act 1987, section 1169 and, immediately before the commencement of this section, the court had not decided the application, the application is taken to have been made under section 13 of this Act.10 (3) A court order under the Credit Act 1987, section 116 that, immediately before the commencement of this section, had effect, is taken to be a relieving order. (4) This section is a law to which the Acts Interpretation Act 1954, section 20A applies. (5) This section expires | year after it commences. 9 Credit Act 1987, section 116 (Power to give relief against repossession of certain goods from farmers) 10 Section 13 (Mortgagor may apply for a relieving order) ee BO OM NADYN BwWwNnde Credit (Rural Finance) SCHEDULE DICTIONARY section 3 "approved form" see section 22. "assignee", of rights and obligations, includes a person to whom the rights and obligations are passed by law. "court" see section 6. "default notice" see section 7(2). "due day" see section 8. "enforcement expenses" means expenses incurred in exercising the mortgagee's rights under a mortgage arising because of the mortgagor's default. "equipment" includes a vehicle, machine and tool. "farm equipment" means— (a) equipment of a type whose usual use is to carry out a farming business; or (b) anything else prescribed under a regulation to be farm equipment for this Act; but does not include anything prescribed under a regulation not to be farm equipment for this Act. Examples of equipment mentioned in paragraph (a)— Beehive, binder, fishing trawler, harvester, milking machine, plough, tractor. "farmer" means a person whose sole or principal business is a farming business. "farming business" means— (a) an agricultural, apicultural, dairy farming, horticultural, pastoral, poultry keeping or viticultural business; or oN AW F 1114 16 18 20 22 24 27 Credit (Rural Finance) SCHEDULE (continued) (b) another business that involves cultivating the soil, gathering crops or rearing livestock; or (c) a business that involves cutting timber for sale; or (d) a fishing business; or (e) anything else prescribed under a regulation to be a farming business for this Act; but does not include anything prescribed under a regulation not to be a farming business for this Act. "fishing" see the Fisheries Act 1994. "guarantor", for a mortgage, means a person who, under the mortgage or another document given to the mortgagee, guarantees an obligation of the mortgagor under the mortgage. "mortgagee", for a mortgage, means— (a) the person to whom the mortgage is given (the "original mortgagee"); or (b) an assignee of the original mortgagee's rights and obligations under the mortgage. "mortgagor", for a mortgage, means— (a) the person by whom the mortgage is given (the "original mortgagor"); or (b) an assignee of the original mortgagor's rights and obligations under the mortgage. "notice of application" see section 14. "relieving order" see section 16(3). "vehicle" includes a motor vehicle, vehicle without motive power, boat and aircraft. © State of Queensland 1995 aon DHn fF W NK 1115 17 20 22 24 26