The secured creditor can now enforce its mortgage following the
Bankruptcy of Ms Waller
In 2012 the High Court gave judgment in Waller v Hargraves
Secured Investments Limited  HCA (4). That case was the
subject of presentations by a number of Kemp Strang partners
directly to clients and at our Briefings and external
In summary, the High Court determined that the structure of a
settlement reached between Ms Waller and the secured creditor at a
Farm Debt Mediation resulted in new loan agreements being entered
into between the creditor and Ms Waller, effectively re-financing
the original secured debt. Although the debt had originally been
the subject of a certificate under the Farm Debt Mediation
Act allowing the secured creditor to enforce its mortgage
without further mediation, the certificate was held to be
ineffective with respect to the new loans and further mediation
under the Act was required before the secured creditor could
enforce its mortgage.
The High Court case had a recent sequel in Hargraves Secured
Investments Limited v Michael Slaven as Trustee of Bankrupt Estate
of Roslyn Edwina Waller  NSWSC 673.
Since the High Court case, Ms Waller had been declared bankrupt
and Mr Slaven was appointed as the Trustee in Bankruptcy of her
The secured creditor sought to enforce its security, relying on
the provision in section 5(2) of the Farm Debt Mediation
Act, which provides that that Act does not apply in respect of
a farmer whose property is the subject of a bankruptcy petition
presented by any person.
The Trustee in Bankruptcy had no interest in defending the
proceedings. However Ms Waller sought to have the proceedings
dismissed on the basis that the issues had already been determined
on the merits.
The Court held that the only issue determined on the merits by
the Court was whether the enforcement proceedings were valid,
having regard to the provisions of the Farm Debt Mediation
Act. The combination of:
continuing default by Ms Waller under the Loan and
Ms Waller being declared bankrupt; and
the provisions of the Farm Debt Mediation Act not applying to a
farmer whose property is the subject of a bankruptcy petition,
meant that the secured creditor was entitled to have its
proceedings against Mrs Waller for the enforcement of the mortgage
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Kemp Strang has received acknowledgements for the quality of
our work in the most recent editions of Chambers & Partners,
Best Lawyers and IFLR1000.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This Update highlights two recent cases that considered circumstances where liens could take priority over a registered security interest.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).