Liberty Funding Pty Ltd v Jovan Ivosevich

[2002] NSWSC 140

CITATION:	Liberty Funding Pty Ltd v Jovan Ivosevich [2002] NSWSC 140
FILE NUMBER(S):	SC 10526/01
HEARING DATE(S):	04.03.02
JUDGMENT DATE:	8 March 2002
PARTIES :	Liberty Funding Pty Limited Jovan Ovosevich
JUDGMENT OF:	Simpson J

COUNSEL :	G. Koning (Solicitor) (Plaintiff) A. Fernon (Defendant)
SOLICITORS:	Gadens Lawyers (Plaintiff)
CATCHWORDS:	Farm Debt Mediation Act - whether defendant principally engaged in farming operation
LEGISLATION CITED:	Farm Debt Mediation Act 1994
DECISION:	Judgment set aside. Writ of possession stayed. Plaintiff to pay defendants' costs. (See para. 17.)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DUTY JUDGE list

SIMPSON J

8 March 2002

10526/01 Liberty Funding Pty Ltd v Jovan Ivosevich

JUDGMENT

1 Her Honour: The issue in these proceedings is whether an enterprise carried on by the defendant, Jovan Ivosevich, is a farming operation for the purposes of the Farm Debt Mediation Act 1994 (“the Act”). The history of the matter is that, on 5 June 2001, the plaintiff, Liberty Funding Pty Ltd (“Liberty”) obtained judgment against Mr Ivosevich in respect of moneys outstanding under a loan agreement, the moneys being secured on land owned by Mr Ivosevich at 100 Johns Road, Wadalba. It appears that the judgment was obtained in default of any appearance by Mr Ivosevich. On 11 May 2001 a writ of possession was issued. On 21 December 2001 Kirby J stayed the operation of the writ of possession. He did not specify a time limit for the stay order, which therefore operates until further order of the court.

2 By notice of motion filed 14 December 2001 Mr Ivosevich seeks a stay of proceedings on the judgment, a continuation of the stay ordered by Kirby J, an order that the judgment be set aside, and other orders to which it is not presently necessary to refer.

3 The basis for Mr Ivosevich’s application is that the judgment and order for possession were pronounced in breach of the Act. He contends that he is a farmer, that he conducts a farming operation on the property on which the loan was secured, that the debt is a farm debt, that the action taken by Liberty is enforcement action, and that the property is a farm. All of these depend upon satisfying definitions contained in the Act.

4 On behalf of the plaintiff it was not contested that the action it took was enforcement action. As indicated above, the sole issue is whether Mr Ivosevich was a farmer, his operation was a farming operation, and the property was a farm. These are all (except for one matter) essentially the same question.

5 The Act contains the following relevant definitions:

“ farm means land on which a farmer engages in a farming operation;
farm debt means the debt incurred by a farmer for the purposes of the conduct of a farming operation that is secured wholly or partly by a farm mortgage;
farm property means:
a) a farm or part of a farm, or
b) … ; farmer means a person … who is soley or principally engaged in a farming operation…;
farming operation means:
a) a farming …, pastoral, horticultural or grazing operation or
b) …

6 Sections 6 and 8(1) of the Act provide:

“6 Enforcement action taken by a creditor to whom this Act applies otherwise than in compliance with this Act is void.
8(1) A creditor to whom money under a farm mortgage is owed by a farmer must not take enforcement action against the farmer in respect of the farm mortgage until at least 21 days have elapsed after the creditor has given a notice to the farmer under this section.”

7 It was common ground that no notice under s 8(1) had been given to Mr Ivosevich.

8 As the argument developed it became apparent that the issue in dispute was a very narrow one. It was whether Mr Ivosevich was a “farmer” for the puposes of the Act in the sense that he was “principally” engaged in a farming operation. There was no suggestion that he was solely so engaged.

9 Three affidavits sworn by Mr Ivosevich were read. He deposed that the loan had been obtained in August 2000, and this amounted to refinancing of a previous loan. He deposed that during the 1980’s and early 1990’s he owned and operated a spray painting business and concurrently operated a market garden and retail nursery, together with a shopfront on the property. His father did the day to day work on the property and he assisted on weekends and after work and as needed. He used the funds obtained to improve the property including fencing, construction of a dam, a truck for transporting produce and plants to the markets and the acquisition of stock and items required for the operation of the nursery. He said that he continued to operate the market garden and nursery until about 1995 or 1996 when he injured his back and he suspended these activities until approximately 1999 or 2000 when he re-established a small market garden and wholesale nursery.

10 He acknowledged that during those years he had engaged in other activities to supplement his income, including working as a computer consultant, finance broker, property developer, mercantile agent and private investigator. He said that these activities occupied approximately two to three days per week and were often undertaken at night. During most week days and Saturdays up to when he was injured he continued to work in the nursery. As at 8 February 2002, when his second affidavit was sworn, he was experimenting with growing pawlonia trees, flower seedlings, shrubs and other fruit and vegetables. These are grown in a glasshouse on the property. He also grows fruit and vegetables, and sells shrubs, flower seedlings and vegetables to local nurseries and shops. He is attempting to develop the cultivation of pawlonia trees. He said that he is not currently engaged in any other activities apart from some property development jointly with some others and this occupies him for about ten hours per week and otherwise as required. The balance of his time is spent in attending to crops and undertaking experimental research concerning the pawlonia trees.

11 There was some supporting evidence from two friends of Mr Ivosevich who both deposed to Mr Ivosevich’s horticultural activities.

12 No deponent was required to be cross-examined although, I was told, Mr Ivosevich was present in court throughout the proceedings.

13 The plaintiff challenged the contention that Mr Ivosevich is “principally engaged in a farming operation”. Having regard to the evidence I have mentioned, and the definition of “farming operation” as a “horticultural” operation, I am satisfied that the enterprise carried on by Mr Ivosevich is a farming operation within the Act. Liberty, however, suggested that the evidence disclosed that this is not his principal occupation. Liberty tendered three paragraphs of an affidavit previously filed on behalf of Mr Ivosevich in another aspect of these proceedings, but not read by Mr Ivosevich for the purpose of the present application. Mr Errol Corney, a company director engaged, inter-alia, in a finance broking business of which Mr Ivosevich has been a client, deposed that Mr Ivosevich and he had been engaged in property development, financing and commercial agent transactions; that Mr Ivosevich had also worked for Mr Corney in his cleaning business, and that as late as 19 November 2001 they had jointly lodged a development application in respect of a property at Wyong.

14 Liberty also relied upon the written application made by Mr Ivosevich when he sought the finance the subject of this application on 25 May 2000. In order to make that application Mr Ivosevich completed, apparently in his own handwriting, a form which required information, inter alia about his current employment and previous employment. There he gave his occupation as computer programmer, and in answer to a question which asked about a second job he gave his occupation as computer specialist. He gave his previous employment as commercial security agent.

15 Further, Liberty relied upon a report of a mercantile consulting company giving a brief description of Mr Ivosevich’s property. In particular, Liberty relied upon the following sentence:

“The agent observed a couple of horses in the paddock at the rear and several old cars and other household products in an old, very large, glass greenhouse.”

16 From this evidence Liberty suggested it should be inferred that the farming operation, if that is what it should be called, was insignificant and was outweighed by Mr Ivosevich’s other activities. I reject this contention. Mr Ivosevich’s evidence is clear and was unchallenged. The description provided by the mercantile consulting company can be accorded little, if any, weight. What Liberty seeks to have drawn from that evidence is a negative inference concerning the extent to which horticultural activities are carried on at the property. Similarly, from the paragraphs in the affidavit of Mr Corney on which Liberty relies, it seeks to have an inference drawn that the activities there described outweigh the farming activities described by Mr Ivosevich. There is, however, no direct evidence to support those inferences. In my opinion the evidence of Mr Ivosevich, uncontested as it is, compels the conclusion that he is a person who is principally engaged in a farming operation.

17 The consequence of this conclusion is that the enforcement action taken by Liberty was taken in breach of s 8 of the Act. The judgment must be set aside and the writ of possession issued consequent upon that judgment must be stayed. I order accordingly, Liberty must pay Mr Ivosevich’s costs of these proceedings.

Last Modified: 03/11/2002