The situation: A family farm had got into substantial debt with their lender. Following the procedures outlined in the Farm Debt Mediation Act 2011 the lender (creditor) wrote to the farmers requesting mediation over the farm debt. The farmers agreed.

The process: The matter was then referred to the VSBC by the Department of Economic Development, Jobs, Transport and Resources (this is where farm debt matters commence and they are then referred to the VSBC once a farmer has agreed to mediate with the creditor).

The VSBC dispute management officer looking after the file attempted to get the parties to mediation. This proved somewhat difficult as the farmers, in addition to experiencing difficulties with the lender, were in the process of divorcing, and were waiting on a decision from the Family Court regarding division of their marital assets.

Although understanding of the farmers’ predicament, the lender wanted to undergo mediation as soon as possible as the farmers’ debts were significant. The VSBC dispute management officer managed to arrange mediation for a date after the Family Court decision was handed down, which allowed both the lender and the farmers (whose property settlement had now been determined) to have a clearer picture of how they could come to some resolution at mediation.

The resolution: A complicated and difficult mediation was held between the lender and the divorced couple (who were represented by different lawyers). After much discussion it was agreed that the farmers would both sell property in order to cover the outstanding debts.

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