Commonwealth Bank of Australia v Bird

In the case of Commonwealth Bank of Australia v Bird, the Commonwealth Bank sought possession of property held as security for a loan made to the Bird family. The dispute centred around whether the debt in question was a farm debt incurred for the purpose of a farming operation, which would entitle the Birds to protections under the Farm Debt Mediation Act 1994. The primary issue was whether the Birds' operation qualified as a farming operation under the Act. The court was required to determine if the activities of the Birds constituted a farming operation and, if not, whether the Farm Debt Mediation Act 1994 applied to this case.

The court examined the activities undertaken by the Birds to ascertain whether they were genuinely engaged in a farming operation. It found that the Birds had not established a farming operation as defined by the Act. The court reasoned that the Birds' activities did not meet the criteria of a farming operation, and therefore, the protections afforded by the Farm Debt Mediation Act 1994 did not apply. Consequently, the court held that the Commonwealth Bank was entitled to possession of the property as the mortgagee in possession.

The court further considered the issue of costs. Although the general rule is that costs follow the cause of action, the court departed from this principle in light of the findings made. The court ordered that the Birds pay the Commonwealth Bank's costs on an indemnity basis, reflecting the outcome of the proceedings. This decision ensures that the Commonwealth Bank recovers its costs incurred in pursuing the possession of the property.