Farm Water Development Act 1985 (TAS)

The case involved a dispute under the Farm Water Development Act 1985, which provides for loans to assist in the development of water resources for use on farms. The matter was heard in the Supreme Court of Tasmania. The primary issue before the court was whether the Farm Water Development Act 1985 permits Tasmania Development and Resources (TDR) to unilaterally alter the interest rate on existing loans granted under the Act.

The court examined the statutory provisions and the legislative intent behind the Act. The court found that the Act does not explicitly grant TDR the power to unilaterally change the interest rates on existing loans. The court emphasised that the terms and conditions of loans are to be determined by TDR, but this power does not extend to altering interest rates without the borrower's consent. The court held that any change in the interest rate must be agreed to by both parties, as per the terms of the original loan agreement.

Given this interpretation, the court ruled that TDR's attempt to unilaterally increase the interest rate on the loan was unlawful. The court ordered that the original interest rate agreed upon in the loan agreement must be maintained, and any changes to the interest rate must be negotiated and agreed upon by both parties.