A borrower sought to have default judgment against it set aside because the lender had not complied with his obligations to mediate under the Farm Debt Mediation Act 1994. No notice was given under the Act and the mediation did not comply with the Act in terms of it neutrality.
The Act renders void any enforcement action if the Act is not complied with.
The court found the lender had no right to commence proceedings because the lender had failed to comply with the Act. Accordingly the proceedings were a nullity and dismissed. The court also rejected that a certificate issued under the Act could retrospectively validate proceedings brought in breach of the Act. In any event, the court noted that default judgment would have been set aside because the statement of claim was not served on the borrower corporation nor the occupier as required by the Rules.