Federal Court of Australia

Waldren v Merricks Capital Pty Ltd [2025] FCA 1134

ORDERS

UNDERTAKINGS

Upon the first to third applicants giving the following undertakings:

(a) the usual undertaking as to damages;

(b) an undertaking to the respondents and to the Court to permit access by the respondents to Manton Park for the following purposes:

(i) allowing a valuer who has been engaged by any of the respondents to access Manton Park so as to prepare a valuation of the Manton Park site in its various states of development, so that the third and fourth respondents can determine the appropriate method of offering the Manton Park property for sale which is consistent with their duties as agent for the mortgagee and as receiver;

(ii) assessing the quality of development works that have been completed to date, including meeting on Manton Park with various subcontractors to ascertain what works have been done, what work is to be done and the costs of those works;

(iii) assessing whether works require remediation (including whether the works have been affected by rain or adverse weather, and what environmental controls need to be put in place), including meeting on Manton Park with various subcontractors to ascertain what works have been done, what work is to be done and the costs of those works;.

(iv) assessing what work will be needed in relation to the boulders and rocks on the Manton Park property; and

(v) assessing the condition of the electrical and NBN works undertaken to date, and what work will be needed,

but not for the purpose of erecting any new fence,

THE COURT ORDERS THAT:

Leave to bring proceeding

1. To the extent necessary, the first applicant has leave pursuant to s 237 of the Corporations Act 2001 (Cth) to bring these proceedings on behalf of the second applicant.

Restraints on enforcement of security interests

2. Until further order, whether by themselves, their officers, servants, agents, or howsoever otherwise, the respondents be restrained from:

(a) appointing a receiver and manager to the property of the third applicant or otherwise taking any step to enforce any security in respect of the third applicant;

(b) taking any steps to enter into possession of any of the land:

(i) [Manton Park] at Yass Valley Way, Yass, in the State of New South Wales, otherwise known as “Manton Park”, more particularly described in certificate of title Lot 323 in Deposited Plan 1102188;

(ii) [Ryalda] at 380 Graces Flat Road, Bowning, in the State of New South Wales, otherwise known as “Ryalda”, more particularly described in the certificates of title annexed at Schedule 1; or

(iii) [Woodleigh] at 28273 Hume Highway, Bowning, in the State of New South Wales, otherwise known as “Woodleigh”, more particularly described in certificates of title annexed at Schedule 2.

(collectively, the Land).

(c) taking any steps to take possession of any of the livestock grazing on the Land (Livestock);

(d) selling or otherwise encumbering any of the Land, the Livestock or any interest in the Land or Livestock; and/or

(e) taking any steps on the basis that the respondents or any of them have taken possession of Manton Park, other than any steps contemplated by the above undertakings.

Continuation of residential and farming arrangements

3. Until further order, the first applicant and Thomas Waldren are authorised to enter and remain upon any of the Land, including by their employees and contractors, for the purpose of:

(a) living on Ryalda or Woodleigh;

(b) accessing any of their personal property stored on the Land;

(c) conducting primary production activities on the Land including by maintaining primary production infrastructure;

(d) showing the Land to prospective financiers; and

(e) removing, at their expense, any fencing or poles erected by any of the respondents at Manton Park.

4. Until further order, the first applicant is authorised and permitted to:

(a) sell wool and livestock on behalf of the second applicant in the ordinary course of business and on ordinary commercial terms provided that he has given 2 days’ notice in writing of any such proposed sale to the third and fourth respondents at SSB Advisory Pty Ltd, Level 24, 570 Bourke Street, Melbourne VIC 3000;

(b) buy goods and services, and meet expenses, on behalf of the second applicant in the ordinary course of business of operating its primary production activities and on ordinary commercial terms provided that he has given 2 days’ notice in writing of any such proposed acquisition or expense to the third and fourth respondents at SSB Advisory Pty Ltd, Level 24, 570 Bourke Street, Melbourne VIC 3000 and each such acquisition or expense is for a price of not more than $25,000; and

(c) transact upon the second applicant’s bank accounts for the purposes of (a) and (b), and subject to the constraints in those sub-paragraphs,

and the respondents are to take all reasonable steps necessary to permit this to occur, including promptly restoring the first applicant’s access to the second applicant’s bank accounts for this purpose.

Costs

5. Costs be reserved.

Procedural steps

6. The proceedings be listed for a case management hearing at 9:30 am on 17 September 2025 for the purpose of making orders for the further conduct of the proceedings.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Schedule 1 – “Ryalda” certificates of title

1. Lot 173 in Deposited Plan 753596

2. Lot 177 in Deposited Plan 753596

1. Lot 186 in Deposited Plan 753596

2. Lot 193 in Deposited Plan 753596

3. Lot 199 in Deposited Plan 753596

4. Lot 200 in Deposited Plan 753596

5. Lot 201 in Deposited Plan 753596

6. Lot 205 in Deposited Plan 753596

7. Lot 206 in Deposited Plan 753596

8. Lot 278 in Deposited Plan 753596

9. Lot 299 in Deposited Plan 753596

Schedule 2 – “Woodleigh” certificates of title

1. Lot 20 in Deposited Plan 251362

10. Lot 21 in Deposited Plan 251362

11. Lot 22 in Deposited Plan 251362

12. Lot 23 in Deposited Plan 251362

13. Lot 24 in Deposited Plan 251362

14. Lot 25 in Deposited Plan 251632

15. Lot 230 in Deposited Plan 753596

16. Lot 273 in Deposited Plan 753596

REASONS FOR JUDGMENT

MOORE J:

Introduction

1 The applicants are farmers and property developers. The first applicant, Mr John Stanley (“Stan”) Waldren, is a farmer from an established pastoral family and, together with his son Mr Tom Waldren, participates in the conduct of a farming operation on four rural properties near Yass, New South Wales, known as Ryalda, Woodleigh, Linbrook and Manton Park. The Waldren’s primary place of residence is on Ryalda, and there are also residences on Woodleigh and Linbrook. The corporate applicants are companies associated with Mr Stan Waldren, and of which he is a director and shareholder. The second applicant (Gemwane) is a company that undertakes farming operations on Ryalda, Woodleigh and Manton Park, and has also undertaken some property development (including subdivision) on Manton Park.

2 The first respondent, Merricks Capital Pty Ltd, is a substantial provider of loan facilities. The second respondent (MC Waldren) is a special purpose vehicle established by the first respondent to be the counterparty for loans to Gemwane. In the interests of simplicity, I will for the most part refer to the first and second respondents as Merricks and I will also refer to conduct undertaken by either of them as conduct of “Merricks”, even though in many cases the relevant conduct may be conduct of MC Waldren rather than of the first and second respondents together, and the relevant rights may be rights of MC Waldren. For present purposes, nothing turns on the distinction between them.

3 Gemwane owed a very significant amount of money to Merricks, which is overdue. The other applicants are guarantors of this debt. The amount owing is secured by mortgages over the four rural properties near Yass, New South Wales and over a commercial property in the Australian Capital Territory (ACT). Merricks is seeking to take action to recover the outstanding amounts, including by exercising its rights to appoint receivers and managers, to take possession of the properties and to exercise a power of sale.

4 The applicants seek urgent interlocutory relief to prevent that occurring and to otherwise maintain the status quo pending a final hearing. The applicants allege that Merricks has not complied with the requirements of the Farm Debt Mediation Act 1994 (NSW) (Farm Debt Act) and also allege that they have a claim against Merricks for breach of contract, unconscionable conduct, misleading or deceptive conduct, and for relief under the Contracts Review Act 1980 (NSW).

5 The matter has come before me on an urgent basis. Notwithstanding the urgency, a considerable body of evidence has been placed before me, and numerous legal and factual issues have been raised. Having regard to the urgency, these reasons necessarily deal with the issues in an abbreviated way.

6 I have determined that certain interlocutory injunctions and other relief should be granted in relation to the farming business and the rural properties, but not in respect of the commercial entities and the commercial property in the ACT.

Background

7 Gemwane is indebted to Merricks. The indebtedness arises under a secured loan facility agreement with Merricks. Gemwane has granted mortgages to Merricks over Ryalda, Woodleigh and Manton Park. The third applicant (Linbrook PL) has guaranteed Gemwane’s debt to Merricks and has granted a mortgage to Merricks over Linbrook. Mr Stan Waldren has also guaranteed Gemwane’s debt.

8 The four rural properties in the Yass region – Ryalda, Woodleigh, Linbrook and Manton Park – are used for an integrated farming operation of trading and breeding cattle and sheep, and selling wool. Livestock are grazed over the four properties, including part of Manton Park, and the system used for sheep grazing in particular utilises all four properties.  However, part of Manton Park has been developed for sale, including by way of a subdivision, and that part is currently development land rather than farming land.

9 The fourth applicant (Ginninderra Village) is not part of the farming operation. It holds a long-term Crown lease over developed land in the ACT known as Gold Creek. Ginninderra Village has guaranteed Gemwane’s debt to Merricks and has granted a mortgage over Gold Creek to Merricks. The fifth applicant (Waldren Constructions) has also guaranteed Gemwane’s debt to Merricks.

10 Other security has also been provided over property other than land.

11 The Merricks facility was due for repayment in 2023. It is continuing to accrue interest, including default interest.

12 Merricks has purported to appoint the third and fourth respondents as receivers and managers of all of Gemwane’s property, including Ryalda, Woodleigh and Manton Park (the Receivers).

13 Merricks has made demands for the repayment of Gemwane’s outstanding debt to each of Mr Stan Waldren, Linbrook PL, Ginninderra Village and Waldren Constructions, and has stated that failure to do so could result in enforcement action (including commencing court proceedings) to recover the amount owing. The applicants contend that Merricks also threatens to realise the property of Linbrook PL, Ginninderra Village and Waldren Constructions, including Linbrook and the Gold Creek development. I accept that Merricks, naturally enough, is seeking to exercise whatever rights it has to recover the outstanding debt.

14 At the time that the Receivers were purportedly appointed, around 4 August 2025, Merricks was demanding repayment of $38,020,139. Merricks contends that the amount owing increases by over $20,000 each day. The applicants assert that $9,200,388 of the total sum (including a substantial sum of default interest) is the consequence of the breaches by Merricks the subject of the Gold Creek refinancing claim, which is discussed below. That means that the uncontested amount owing is now more than $28,819,751 (and increasing daily). On any view, the applicants are presently indebted in a large amount to Merricks. The applicants have not, as part of seeking the present relief, offered any mechanism for the repayment of any part of this amount. For example, the applicants have not paid any money to Merricks, paid any money into court, or offered to realise any property to repay part of the debt. As might be expected, Merricks makes much of this.

15 Merricks asserts that it has taken possession of Manton Park. That is disputed by the applicants.

16 In an effort to avoid any barrier pursuant to the Farm Debt Act, in October 2024, Merricks invited Mr Stan Waldren to mediate, and sent copies to each of the guarantors. A mediation occurred on 25 February 2025 and was unsuccessful. Commencing on 18 March 2025, Merricks applied to the Rural Assistance Authority (RAA) for an exemption certificate within the meaning of the Farm Debt Act, and subsequently applied for separate exemption certificates in respect of Ginninderra Village, Linbrook PL and Waldren Constructions. In July 2025, the RAA stated, in its reasons for determination, that it was satisfied that:

…a satisfactory mediation, as defined by s4(1A)(b) of the [Farm Debt Act], took place between MC Waldren Pty Ltd and Gemwane Pty Ltd and Linbrook Pty Ltd (as Guarantor) in respect [of] the debt the subject of the Application.

17 However, the RAA refused to issue an exemption certificate on the grounds that Gemwane was not a “farmer”, and the relevant debt was not a “farm debt”, for the purposes of the Farm Debt Act. As a consequence, Merricks does not have an exemption certificate within the meaning of the Farm Debt Act.

18 In seeking interlocutory relief, the applicants submit that there is a serious question to be tried on two separate grounds:

(a) first, that Merrick’s purported enforcement of security (and threatened further enforcement of security) is contrary to the Farm Debt Act; and

(b) secondly, that the applicants have a claim against Merricks for breach of contract, misleading or deceptive conduct, unconscionable conduct, and for relief under the Contracts Review Act 1980 (NSW) in respect of the failure of Merricks to give effect to a significant aspect of the term sheet agreed between Gemwane and Merricks, being the agreement that Merricks would release the security over Gold Creek.

19 I will deal with these claims in turn, before dealing with the balance of convenience. However, I will first say something about the facility agreement pertaining to the relevant debts.

The facility agreement and the loans

20 From at least February 2020, Mr Stan Waldren had been exploring options to improve the value of Gold Creek, including through the development of a childcare centre on the land.

21 In April 2021, Mr Stan Waldren was considering options to separately refinance Gold Creek which led to him being introduced to Merricks as a potential financier.

22 On 14 May 2021, Merricks issued a written term sheet offering a loan of $16.5 million to Gemwane for a term of 24 months, with capitalised interest for the first 15 months and a facility limit estimated to be $20,550,000 (2021 Term Sheet). The term sheet indicated “this Letter of Offer does not constitute an offer of finance and remains subject [to] due diligence” and required payment of a work fee and legal fee prior to Merricks commencing due diligence. The term sheet also included terms with respect to confidentiality and exclusivity that the applicants contend were intended to be legally binding.

23 On 20 May 2021, Mr Stan Waldren’s accountant sent Merricks a countersigned copy of the 2021 Term Sheet noting in his email that it was marked up with a “notated point on pulling [G]old [C]reek out in a year for a refinance”. The countersigned 2021 Term Sheet included a handwritten additional term below Mr Stan Waldren’s signature which stated:

* We note at 30 June 2022, the property known as “Gold Creek” will be refinanced and $3m debt paid down. Merricks to release full security over the property.

24 In response to the email, Merricks stated “We can agree to the Gold Creek refinance by June 2022 as outlined on the signed Term Sheet” and noted that once the work fee and legal fee had been paid, they would commence the due diligence process.

25 On 17 June 2021, Mr Stan Waldren caused $27,500 to be paid into Merricks’ solicitor’s trust account, presumably as payment of the agreed work fee and/or legal fee.

26 On 25 June 2021, Gemwane (as borrower) and MC Waldren (as financier) executed a “Secured Loan Facility Agreement” (Facility Agreement) which secured a loan with a facility limit of $19 million (the Facility). The guarantors to this agreement were Mr Stan Waldren, Linbrook PL, Ginninderra Village and Waldren Constructions.

27 As security, Gemwane granted to MC Waldren mortgages over Ryalda, Woodleigh and Manton Park. Linbrook PL granted a mortgage over Linbrook.  Ginninderra Village granted a mortgage over Gold Creek. Gemwane also executed a General Security Agreement and Specific Security Agreement which granted PPSA Security Interests over, inter alia, livestock and all present and after-acquired property.

28 Of relevance to the applicants’ case, notwithstanding Merricks’ apparent agreement to the handwritten term on the 2021 Term Sheet, while clause 6.2 of the Facility Agreement required Gemwane to repay not less than $3 million on or before 30 June 2022, neither that clause nor any other clause required the release of security over Gold Creek. Clause 6.2 relevantly provided:

6.2    Mandatory prepayments

(a)    The Borrower must repay the Principal Outstanding in an amount equal to:

…

(iv)    the amount of Sale Proceeds received on disposal of the Gold Creek Property necessary to ensure that the [loan to value ratio] does not exceed 58% immediately after disposal.

…

(c)    Without limiting clause 6.2(a), the Borrower must on or before 30 June 2022, repay the Principal Outstanding in an amount that, when aggregated with any amounts repaid under clause 6.2(a)(iv), is not less than $3,000,000.

29 On 28 June 2021, Gemwane drew down over $13 million  from the Facility.

30 Mr Stan Waldren gave evidence that in July 2022, around the time he was considering refinancing the Facility with other private lenders, he met with two individuals from Merricks, along with his accountant and his son. Mr Stan Waldren recalls that during that meeting “the refinancing of Gold Creek was specifically discussed and also [the] need to release security over Gold Creek”. Mr Tom Waldren also gave evidence that he recalled a discussion about “the upcoming release of Gold Creek” and its refinance.

31 On or around 19 July 2022, Merricks issued a second term sheet (2022 Term Sheet) which was executed by Gemwane and Merricks. The 2022 Term Sheet included an offer of an additional cash advance of $4.3 million, and an amended facility limit of $24.5 million. It also included the following condition: “$3,000,000 Debt Reduction Requirement – Debt reduction will be required by 31 December 2022 anticipated by the refinance of Gold Creek” (underlining in original).

32 On or around 25 October 2022, Gemwane and MC Waldren executed an Amendment Deed which amended and varied the Facility Agreement in the form set out in the Amended Secured Loan Facility Agreement (Amended Facility Agreement) (which was annexed to the Amendment Deed). The Amended Facility Agreement increased the facility limit as follows:

(a) $23,331,632 until 31 December 2022; and

(b) $22,482,152 from 1 January 2023 until the termination date of 30 June 2023 (unless otherwise agreed by MC Waldren),

(the Amended Facility).

33 Clause 6.2 was amended in the Amended Facility Agreement, including by extending the time Gemwane was required to repay $3 million to 31 December 2022 (previously 30 June 2022). Amended Clause 6.2 provided as follows:

6.2    Mandatory prepayments

(a)    The Borrower must repay the Principal Outstanding in an amount equal to:

…

(ii)    all Sales Proceeds (other than Collected GST) received by or on behalf of an Obligor;

…

(c)    Without limiting clause 6.2(a), the Borrower must on or before 31 December 2022, repay the Principal Outstanding in an amount that, when aggregated with any amounts repaid under clause 6.2(a)(ii), is not less than $3,000,000.

34 Again, there was no reference to a release of security over Gold Creek.

35 On 7 November 2022, following a loan application submitted by Mr Stan Waldren, another financier by the name of Aquamore Finance Pty Ltd (Aquamore) agreed to issue Ginninderra Village with a loan of $3,341,000. The offer was on the basis that Gold Creek would be offered as security. Mr Stan Waldren signed the loan offer on 10 November 2022.

36 On 16 December 2022, Merricks was informed by Mr Wang of BF Advisory, who was assisting Mr Stan Waldren with the refinance of Gold Creek, that Aquamore was ready to settle, and stated that the 2022 Term Sheet required Gemwane to repay $3 million by 31 December 2022 on the refinancing of Gold Creek. Mr Wang requested that Merricks advise their payout figure and the name of the solicitor who would be handling the discharge of the security over Gold Creek.

37 On 17 December 2022, Mr Stan Waldren emailed Merricks and referred to a recent discussion with Ms Devenish, a Senior Associate at Merricks, in which she expressed concern about further funds being required to complete the Manton Park development. Mr Stan Waldren stated:

…I must point out we have complied with the request for finance on Ginninderra Village [with] funds to be used to reduce the debt position by $3,000,000…[a]s per our agreement.

We trust that we can move towards a settlement ASAP as we do not wish to be in conflict with our lender…

38 On 19 December 2022, Ms Devenish responded and stated “[w]e are meeting with our Credit Committee in the second week of January to discuss the Gold Creek refinance as we need to consider the Manton Park project delays and cost overrun in our decision to release security”. Ultimately, no release of security was permitted.

39 On 24 March 2023, Mr Stan Waldren sent Merricks a copy of a funding proposal from Balmain NB Commercial Mortgages Limited (Balmain) who were proposing to offer a loan facility of $33.1 million, of which $23 million could be used to refinance the Amended Facility. It was proposed that security would be given over, inter alia, Ryalda, Woodleigh, Linbrook, Manton Park and Gold Creek.

40 On 27 March 2023, Mr Stan Waldren requested a further drawdown of funds under the Amended Facility to, among other things, pay the $44,000 loan proposal fee required by Balmain to proceed with the proposal.

41 On 29 March 2023, Merricks refused the request, stating “[t]he facility has reached the facility limit and there will be no further funding advances possible”.

42 On 13 April 2023, Mr Stan Waldren’s accountant reagitated the request for a further drawdown of funds stating that “Balmain is ready to proceed, and we want to get this moving as quickly as possible”. The email stated that putting aside any penalty interest, the Amended Facility had around $630,000 remaining and that “Merricks did not allow the Aquamore refinance for Gold Creek which has put us in our current position of balancing yourselves and Balmain and the contractor”.

43 On 14 April 2023, Merricks responded, advising:

* Merricks Capital as lender has always acted in accordance with its rights under the facility agreement, including in relation [to] the Aquamore refinance of Gold Creek, where the refinance offer was not accepted due to the risks associated with Manton Park delays and lack of pre-sales.

* Merricks will not be advancing further funding as requested in Heath[’]s email, the loan is currently $155,000 above the facility limit and interest has not been paid for 4 months.

* Before we have any discussion regarding advancing further capital, we need to see contracted property sales (i.e. Gold Creek) that would facilitate debt reduction.

44 On 7 June 2023, Merricks informed Mr Stan Waldren that the forecasted loan balance to 30 June 2023 was $24,795,753.

45 On 8 August 2023, Balmain informed the applicants that based on its research of relevant sales in the last six to twelve months and its valuation of the Manton Park project, it would have to reduce the proposed loan limit by $5 million.

46 On 30 August 2023, Merricks issued a third term sheet to Gemwane which provided an additional $3.5 million loan to the Amended Facility to fund the completion of the Stage 4 development of Manton Park, and included a condition that indicated Gold Creek was to be sold. This term sheet was not executed.

47 On 4 August 2025, Mr Bruno Secatore, who along with Mr Glenn Spooner had been appointed as the Receivers, attended Manton Park. He was accompanied by two colleagues. Mr Secatore gave evidence that he entered Manton Park by removing a chain that secured (but did not lock) two “temporary fencing” panels that were being used as a gate to the property. After driving around Manton Park for around 45 minutes and observing that no one appeared to be present or dwelling on the property and there was no livestock on the property, he telephoned Mr Stan Waldren to inform him of his appointments and that he was at Manton Park. There is some dispute in the evidence as to whether, during this phone conversation, Mr Secatore informed Mr Stan Waldren that he had taken possession of Manton Park.

48 Both Stan and Tom Waldren have given evidence that towards the end of August 2025, the Receivers started erecting fences outside Manton Park to prevent access. Further, the installation of steel poles has caused damage to the road surface and electrical cabling that will need to be fixed. There is evidence that the local council has required the damage to be rectified.

49 There is a factual debate as to whether the Receivers have taken sufficient steps to take possession of Manton Park, even if they were otherwise permitted to do so. The applicants point to the securing of only one of four access points, and to the fact that the Waldrens are still actively grazing livestock on the property.

First ground - the Farm Debt Act claim

50 Section 8 of the Farm Debt Act relevantly provides that:

(1)    A creditor must not take enforcement action in respect of a farm mortgage unless an exemption certificate granted to the creditor is in force in respect of the farm debt concerned.

…

(2)    Enforcement action taken by a creditor in respect of a farm debt in contravention of this Act is void.

51 The application of this section requires consideration of the meaning of the terms “farm mortgage” and “farm debt”.

52 A “farm mortgage” is defined in s 4 of the Farm Debt Act in an inclusive way as including (relevantly):

any interest in, or power over, any farm property securing obligations of the farmer whether as a debtor or guarantor…

53 A “farm property” is relevantly defined as:

(a)    a farm or part of a farm, or

(b)    farm machinery used by a farmer in connection with a farming operation…

…

54 A “farm” is defined as land on which a farmer engages in a farming operation.

55 A “farmer” is defined as a person (whether an individual person or a corporation) who is solely or principally engaged in a farming operation.

56 A “farming operation” is relevantly defined in s 4AB as follows:

(1)    A farming operation is a business undertaking that primarily involves one or more of the following activities:

(a)    agriculture (for example, crop growing and livestock or grain farming)

…

57 A “farm debt” is defined as a 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.

58 Applying this nest of definitions, it is necessary to identify a “farmer”. The applicants say that Gemwane is a farmer. They submit that this definition has to be applied at the present time, and that Gemwane does not conduct any business other than a farming operation. There is evidence that Gemwane conducts an agriculture business across four properties.

59 The respondents say that Gemwane is not a “farmer” on the basis that it is, in part, a property developer. The applicants say that the relevant assessment is of Gemwane’s current status, and it is currently solely engaged in farming activities (because no development is currently taking place at Manton Park). At a final hearing, there will need to be consideration of the question of whether the development activities at Manton Park (owned by Gemwane) are sufficient to mean that Gemwane is not “principally” engaged in a farming operation.

60 There is also an issue as to whether the development activities conducted on Manton Park mean that there is not a “farming operation” (i.e. a business undertaking that primarily involves agriculture). That may involve a factual process of characterisation. However, there appears to be a reasonable argument on the evidence before the Court at present that, even when it was developing Manton Park, Gemwane was conducting two business undertakings – a farming business and a development business – and is therefore conducting a farming operation on Manton Park.

61 For present purposes, it is sufficient to note that, based on the evidence before the Court, there appears to be a reasonable basis for concluding that Gemwane is a “farmer” and is conducting a “farming operation”.

62 There also appears to be a reasonable basis for concluding that Ryalda, Woodleigh and Manton Park are “farms”, and are therefore “farm property”, because each property is land on which Gemwane engages in a farming operation.

63 A more contentious issue is whether the mortgages over Ryalda, Woodleigh and Manton Park are “farm mortgages” that secure a debt which is a “farm debt”.  The reason it is contentious is because significant amounts of money have been advanced under the Facility Agreement and the Amended Facility Agreement for property development rather than farming.

64 Clause 3.2 of the Amended Facility Agreement, which is consistent in structure with the original Facility Agreement, relevantly provides as follows:

The Borrower must use the net proceeds of a Utilisation only as follows:

(a)    for refinancing existing Finance Debt, up to a maximum amount of $6,500,000;

(b)    for a family settlement, up to a maximum amount of $6,000,000;

(c)    for Livestock purchases, up to a maximum amount of $2,000,000;

(d)    …

(e)    …

(f)    in relation to a Development Utilisation, for funding Development Costs in accordance with the Approved Property Development Budget, up to the Development Sub-limit; and

(g)    in relation to a Capitalised Finance Cost Utilisation, for funding Capitalised Finance Costs.

65 The Development Sub-Limit is defined as $5,400,000, or an amount otherwise agreed. In Schedule 8, the Approved Property Development Budget appears, and includes a total of $7,248,642. It appears that there was an amount of approximately $7.2 million available for property development at Manton Park. There is a suggestion that there may have been a further sum available (and drawn) for development at Gold Creek.

66 The respondents submit that it is clear that the main or dominant purpose of the Facility Agreement or the Amended Facility Agreement was not to conduct a “farming operation”, but rather related predominantly to property development and the settlement of family controversies.

67 By contrast, the Applicants contend that the mortgages are “farming mortgages” that secure a “farm debt”. They put this proposition on two bases.

68 First, they submit that the Facility Agreement and the Amended Facility Agreement do not provide for a single loan, but rather provide a structure for the making of multiple loans within the category limits set out in clause 3.2. In this regard, they point to the following aspects of the facility agreements:

(a) the definition of “Secured Moneys”, which refers to “all debts and monetary liabilities”;

(b) clause 3.1 provides that the Financier will lend “Loans” (plural) to the “Borrower”;

(c) “Loan” is defined as “a cash advance loan made, or to be made, under the Facility or the principal amount outstanding of that Loan at the relevant time”;

(d) “Utilisation” is defined as “a utilisation of the Facility”, being the provision of a “Loan”;

(e) clause 4.1 provides that “[i]f the Borrower requires the provision of a Utilisation, it must deliver to the Financier an effective Utilisation Notice”;

(f) clause 4.5(a) provides that “[e]ach Interest Period must be of 30 days or any other period that the Financier agrees with the Borrower”;

(g) clause 4.5(c) provides that “[a]n Interest Period for a Loan commences either on the first Utilisation Date for that Loan or on the last day of the immediately preceding Interest Period for that Loan”;

(h) “Utilisation Date” is defined as “the date on which a Utilisation is provided, or is to be provided, to the Borrower” under the agreement;

(i) clause 4.3 provides that “[i]f two or more Loans have Interest Periods which are of the same duration, then those Loans will be consolidated into, and treated as, a single Loan”; and

(j) clause 4.6 provides that if the “Borrower” gives a “Utilisation Notice”, the “Financier” must provide the funds to the “Borrower”.

69 These provisions suggest, at least on the initial review for this interlocutory hearing, that there are multiple loans made under the facility, subject to the category limits provided in clause 3.2 and the overall limit. That would suggest that there are multiple debts. The applicants submit that some of the debts are clearly farm debts. The clearest example is the provision of a loan or loans for livestock.

70 On that analysis, the mortgages over Ryalda, Woodleigh and Manton Park are securing, inter alia, farm debts and therefore are farm mortgages. There is no requirement in the Farm Debt Act that the farm mortgage only secure a farm debt or debts. Rather, the relevant limiting function is performed by the definitions of “farmer” and “farming operation”.

71 On this approach, Merricks would not be prevented by the Farm Debt Act from exercising powers under the relevant mortgages in respect of any loan that is not a “farm debt” (e.g. a loan to develop Manton Park, or any loan connected with Gold Creek). However, that is not what Merricks is doing, or threatening to do, at present.

72 On the basis of the matters before the Court at present, I consider that this is a plausible approach to the construction of the facility agreements and that the first contention by the applicants has some prospect of success, such that there is a serious question to be tried.

73 Secondly, the applicants submit that, if the Facility Agreement and Amended Facility Agreement are characterised as producing a single debt, it is a “farm debt” because the substantive and operative purpose of the facilities was for agricultural purposes. In that regard, the applicants submit, by reference to the limits in clause 3.2, that the refinancing of the existing debt was refinancing of debt incurred in connection with agriculture and that the family settlement related to the resolution of disputes about farm debts, such that the majority of the monies lent under the facilities were monies related to agriculture.

74 This second construction is less persuasive than the first construction, on the materials before the Court. However, it is an approach that is reasonably arguable, and I have not had the benefit of full argument on the proper construction of the facility agreements. If it is the correct construction of the Facility Agreement and the Amended Facility Agreement, there is then an issue as to whether a debt for multiple purposes, including for agricultural purposes, is a “farm debt”, being a debt incurred by a farmer for the purposes of the conduct of a farming operation. On one view, a mixed purpose loan where agriculture is a predominant purpose, is a debt incurred for the purposes of the conduct of a farming operation. On that approach, the debt under the facilities is a “farm debt” within the meaning of the Farm Debt Act.

75 As noted earlier, Merricks has not obtained an exemption certificate. There is no exemption certificate in force in relation to any farm debt in the present case. Pursuant to s 8(1) of the Farm Debt Act, Merricks cannot take enforcement action in respect of a farm mortgage unless an exemption certificate granted to Merricks is in force in respect of the relevant farm debt. There is a serious question to be tried that Merricks cannot take action to enforce the mortgages over Ryalda, Woodleigh or Manton Park in respect of the current amount demanded by Merricks, which either includes farm debts or comprises a farm debt.

76 A similar position arises in relation to Linbrook PL and Linbrook. The mortgage over Linbrook may be a farm mortgage. On the approaches identified above, Linbrook PL has either guaranteed debts including farm debts, or the debt guaranteed is a farm debt. There is a serious question to be tried that any debt owed by Linbrook PL as guarantor is a farm debt and that Merricks is prevented from taking any enforcement action on the mortgage.

77 It follows from the matters set out in this section that the applicants have established that there is a serious question to be tried in relation to their first basis for the interlocutory relief in relation to Linbrook PL and also in relation to the mortgages over the rural land. I would consider that to be a relatively strong prima facie case.

78 The position is different for the fourth and fifth applicants, being Ginninderra Village and Waldren Constructions. The applicants do not rely on the Farm Debt Act in relation to these parties. The relevant mortgage of Gold Creek is not a farm mortgage because it is not an interest in a farm property. The case in relation to Ginninderra Village and Waldren Constructions relies upon the second ground.

Second ground – claim based on agreed term sheets

79 It is sufficient to deal with this at a general level. Both the 2021 Term Sheet and the 2022 Term Sheet expressly record that the required paying down of $3 million in debt was to be funded by the refinancing of Gold Creek. The refinancing of Gold Creek obviously required Merricks to release its security, and yet this aspect was not incorporated into the facility agreements (merely the obligation on Gemwane to pay down the debt by the amount that was anticipated to be refinanced). There seems to be a disconformity between what was discussed and agreed and what was drafted, and on one view the final terms are commercially odd (because they do not incorporate the very mechanism by which the reduction of the loan would occur). The respondents called no evidence on this topic, and made no suggestion as to how the facility agreements could sensibly have resulted from some shift in position: i.e. why there would be an obligation to make a payment of $3 million without the means of doing that which had been discussed and agreed beforehand. Further, any suggested shift of position would appear to be somewhat inconsistent with the reiteration of the original commercial deal in the 2022 Term Sheet.

80 There is therefore at least a credible possibility that the drafting of clause 6.2 of the Facility Agreement involved an error, being an error that was replicated in the Amended Facility Agreement, but not before the commercial deal based on refinancing had been reiterated in the 2022 Term Sheet.

81 The respondents describe this claim as weak, and point to clause 18 of the Facility Agreement and the Amended Facility Agreement, without explaining how that lengthy clause which extends over three pages is any answer to the claim. That does not provide much assistance on an application of this type. The reference may have been intended to be to clause 18.9(a), which is a confirmation from each Obligor that “it has not entered into any Finance Document in reliance on any representation, warranty, promise or statement made by or on behalf of the Financier”. However, that does not really respond to the nature of the problem caused by the apparent disconformity and deficiency in the facility agreements.

82 I do not accept that the claim is weak. I consider that there is a respectable prima facie case that the contract would be varied. There is at least a possibility that some cause of action could be established pursuant to ss 12CB or 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) or its analogues under the Australian Consumer Law.

83 However, that is not the end of the matter. In order for the applicants to obtain the relief that they seek, it is necessary to demonstrate that the problem with the agreement had a relevant causal effect on the outcome in a way that would support that relief. In particular, it would be necessary to demonstrate that in the alternative universe in which Ginninderra Village was permitted to release Gold Creek and Gemwane’s debt was reduced by at least $3 million, Merricks would not now be in a position of enforcing security for an outstanding debt.

84 The applicants’ submissions did not set out this causal theory in any great detail. It appears to be along the following lines:

(a) If the facility agreement(s) had contained the relevant obligation on Merricks to release the security, Ginninderra Village would have been able to refinance Gold Creek.

(b) If that occurred, Gemwane would have met the obligation to pay down $3 million under clause 6.2 of the relevant facility agreement.

(c) Gemwane’s failure to pay down the $3 million was treated by Merricks as a default under the relevant facility agreement, and triggered the incurring of default interest. This default interest would have been avoided if Merricks had released the security.

(d) As a result of a combination of (b) and (c) above, Ginninderra Village would have been in a position to develop Gold Creek more quickly (including because Gemwane would have been able to access more money under the Merricks facility), and would have been in a much better commercial and financial position.

(e) As a result of (b) to (d), Gemwane would have been able to refinance with Balmain, such that no money would have been outstanding to Merricks, and Merricks would not now be taking enforcement action.

(f) As noted earlier, Gemwane has calculated that it is $9,200,388 worse off as a result of the failure by Merricks to permit refinancing of Gold Creek. A calculation has been provided in evidence, but it did not identify the assumptions underpinning it: for example, it has various amounts by way of a “loan advance” (including after the termination date of the Merricks facility), but does not identify why this money would have been available or what use would have been made of it.

85 It is tolerably clear that (d) to (f) above involve a considerable degree of speculation, and will require very detailed evidentiary support that is not available at present. For example, the contention that default interest would not have been payable if Gold Creek had been released would require detailed evidence about the likely progress of the development and resulting sales, and a detailed examination of exactly how principal and interest would have been able to be paid on time. More generally, there would need to be evidence about the hypothetical program of works at Gold Creek and what loan advances would be required, what commercial outcome this would have produced (by way of earlier sales and the like) and over what time period, and whether alternative finance would have been available from Balmain. The information available to me at present does not permit any proper assessment of whether the factual hurdles would be able to be overcome.

86 In those circumstances, I accept that there is a serious question to be tried, but I do not think that the prospect of establishing the causal chain can be said to be strong.

Balance of convenience

87 The respondents identified a number of matters going to the balance of convenience.

88 The applicant identifies the impact on Mr Stan Waldren of being removed from his home of 25 years, of the loss of livelihood and income for both Stan and Tom Waldren, and the potential damage to the farming operation (and to the livestock) if relief is not granted. The applicants contrast this with the purely financial impact on Merricks if there is a delay. I take this matter into account.

89 The respondents raise a number of matters.

90 First, the respondent submits that the injunction is something of a futility and the ultimate results of the application of the Farm Debt Act are a foregone conclusion, in circumstances where the RAA has already said that a fair mediation was conducted, and would issue a certificate if persuaded that the relevant debt was a farm debt and the relevant mortgage was a farm mortgage.

91 I do not accept the full width of this contention. Whilst the utility of the relief sought is a relevant factor on balance of convenience, which I take into account, it is by no means automatic that a certificate will be issued. The RAA’s process is an administrative process. Any number of things could happen before a certificate is obtained. What is clear is that, at present, Merricks does not have the necessary certificate, and cannot immediately obtain it. It may take many months to obtain one, if at all. Merricks is prohibited from taking action to enforce a farm mortgage unless an exemption certificate is in force in respect of the farm debt concerned. There is no necessary futility or inutility.

92 Secondly, the respondents say that relief should not be granted in circumstances where no money has been paid to the respondents, no money has been paid into court, and no additional security is provided. In oral submissions, the respondents advanced this point with considerable vigour. The respondents rely upon the so-called “general rule” from Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 at 164 (Walsh J) in relation to applications to restrain the exercise by a mortgagee of powers given by the mortgage including a power of sale:

that such an injunction will not be granted unless the amount of the mortgage debt, if this be not in dispute, by paid or unless, if the amount be disputed, the amount claimed by the mortgagee be paid into court.

93 The respondents also point to what they say is the unfairness of exposing them to potentially unrecoverable losses from the delay in realising the relevant property.

94 I do not accept that these matters provide a complete response to the claim based on the Farm Debt Act, although I take them into account in the overall result, especially in connection with the injunction sought on the grounds of the second claim (i.e. the claim as to the failure to release Gold Creek).

95 The so-called “general rule” from Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161 is inapt to apply to an injunction based on the Farm Debt Act. That is because the Farm Debt Act governs whether a power of sale is able to be exercised in the first place. The Farm Debt Act operates to prevent relevant enforcement action without a certificate of exemption. It renders any enforcement action taken in breach of the provision void. That prevention is not conditional upon payment to the creditor or payment into court. The protection of the Act would be considerably undermined if farmers who wished to enforce the Act, including by obtaining injunctive relief, were forced to pay money owing as a condition of that relief. As observed by Campbell JA in Bayblu Holdings Pty Ltd v Capital Finance Australia Ltd (2011) 279 ALR 166; [2011] NSWCA 39 at [58] (Tobias and Macfarlan JJA agreeing), an exception to the “general rule” has long been recognised when there is an issue about whether the power of sale has arisen at all. Campbell JA also referred (at [57]) to ambiguity about what it means to say that there is a “general rule” and observed (without deciding) that it may simply be an empirical generalisation.

96 In relation to prejudice, there is competing evidence before me as to the value of the mortgaged properties and as to whether they are of sufficient value to repay the amount claimed to be owing by Merricks. The valuations relied upon by Merricks suggest that they are not. The valuations relied upon by the applicants suggest that they are. I am not in a position to resolve that contest of expert valuation opinion, but I accept that there is a risk that the security will fall short, and that this risk increases if Merricks is prevented from realising the security, potentially for many months, with interest accruing at potentially $20,000 per day or more. I take this risk into account.

97 Thirdly, the respondents point to the failure of the applicants to take any steps since 2023 to reduce the debt, and the absence of protection provided by the guarantees and the undertaking of the applicants. I take these matters into account.

98 In the course of oral argument, I raised with the parties that both sides appeared to be proceeding on an “all or nothing” basis. In response, counsel for the respondents:

(a) drew my attention to an offer that had been made to the effect that the respondents would only take certain steps preliminary to a sale of Manton Park, would not take any steps in relation to Ryalda and Woodleigh, would not take steps in relation to livestock, would not take any steps to appoint a receiver and manager to Linbrook PL, but would be free to take action in respect of Ginninderra Village and Waldren Constructions (including in relation to Gold Creek). The offer also required the Waldrens to take certain actions, including to remove all livestock from Manton Park.

(b) proposed a form of orders that would give effect to this mixed result. Those orders included some of the orders proposed by the applicants to preserve the status quo, including permitting certain activities in the course of ordinary business.

Conclusion on injunctions and associated relief

99 I conclude that there should be an interlocutory injunction in place to restrain the further exercise of rights by the respondents in connection with the farm mortgages, being the mortgages over Ryalda, Woodleigh, Linbrook and Manton Park, for the following reasons.

(a) The position in relation to the farming properties reflects the serious question to be tried under the Farm Debt Act, and the apparent strength of the applicants’ claim in that regard.

(b) For the reasons set out earlier, it is not a condition of such relief that the applicants pay the amount of the undisputed debt to Merricks or pay money into court.

(c) The balance of convenience favours the grant of relief. The sale of the farm properties would destroy a farming operation, which is unlikely readily to be able to be restored, and remove the home and livelihood of the Waldrens. These are significant impacts and weighty considerations.

(d) Merricks is not deprived of all recourse, because there will be no injunction in relation to Ginninderra Village or Waldren Constructions.

(e) I refer to the observations above about the alleged futility of relief under the Farm Debt Act, which I have not accepted. However, it is likely that the Farm Debt Act issue can be determined as a separate question, and so the issue may be capable of relatively prompt resolution. If that issue is resolved in Merricks’ favour, or Merricks can obtain a certificate by another means (for example, by conceding that there is a farm debt and farm mortgages, as the respondents’ counsel has foreshadowed), then the issue of whether any injunction would be continued beyond that point is a separate question.

(f) The injunctions will not prevent steps that would need to be taken in any event in connection with Manton Park before that property could be sold.

100 There will be associated orders that provide for a continuation of the status quo. That includes some of the orders accepted by the respondents in their middle ground proposal.

101 I conclude that there should not be any interlocutory relief in respect of Ginninderra Village or Waldren Constructions, including in respect of the mortgage over Gold Creek, for the following reasons.

(a) Counsel for the applicants did not seek to justify any relief in that regard on the claim under the Farm Debt Act. The Gold Creek mortgage is not a farm mortgage (because it is not an interest or power over farm property). Further, the relevant property is located in the ACT.

(b) I accept that the there is a serious question to be tried on the applicants’ claim for the failure to release Gold Creek. However, as observed above, it has not been established that this is a strong claim.

(c) The Gold Creek site is a development site that was always intended to be developed and sold. As pointed out by counsel for the respondents, the applicants’ claim is a loss of a chance claim (being a loss of development profits) that is capable of being valued in monetary terms. Its value will be established, if at all, by proof of a hypothetical state of affairs involving a faster (and better) development at Gold Creek than what has occurred in reality. The value of the claim will be the difference between that hypothetical state of affairs and the actual state of affairs. There is no need to improve the actual state of affairs by an injunction.

(d) In this commercial setting relating to property development, it is not appropriate that Ginninderra Village and Waldren Constructions obtain an interlocutory injunction preventing Merricks from enforcing its contractual rights – including in relation to undisputed and very significant indebtedness – without at least paying the relevant amount of the debt into court. The balance of convenience does not favour a grant of relief in the present circumstances where no money has been paid into court or otherwise offered up.

102 The orders will also include various procedural orders permitting the maintenance of the status quo (such as permitting certain transactions in the ordinary course of business), along the lines of orders included in the proposed orders of both the parties, which removes the need to examine these orders in detail. Not all of the orders sought by the applicants have been made. For example, no order has been made for the drawing by Mr Stan Waldren of a wage from Gemwane, because that is not necessary for the preservation of the status quo.

103 There has been a contentious construction by the respondents of fence poles on Manton Park, which the local council has objected to. The orders will provide that the applicants can remove these poles. I will not order that this be at the expense of the respondents, and any claim in that regard can be resolved later.

104 The orders will be conditioned upon the provision of the usual undertaking as to damages, and an undertaking by the first to third applicants to permit the respondents to conduct various activities on Manton Park which were set out in the offer letter from the respondents identified earlier. In the course of the hearing, counsel for the applicants indicated that such an undertaking to permit those activities would be forthcoming. The respondents will otherwise need permission to enter Manton Park, and an order will be made preventing the respondents from proceeding on the basis that they have taken possession of Manton Park. As the applicants point out, there is a prima facie case that any exercise by the respondents of enforcement rights in relation to Manton Park was void, by reason of the operation of s 8(2) of the Farm Debt Act. In those circumstances, the respondents ought not to be permitted to proceed on the footing that they are in possession of Manton Park, quite apart from the factual controversy as to whether they have, in fact, taken appropriate steps to be in possession.

105 It should be noted that there is no restriction imposed on the respondents from appointing or accepting an appointment (as the case may be) of receivers and managers to Ginninderra Village or Waldren Constructions or their property.

The grant of leave to Mr Stan Waldren to represent Gemwane

106 In all of the circumstances, it is appropriate to make an order that, to the extent necessary, Mr Stan Waldren has leave pursuant to s 237 of the Corporations Act 2001 (Cth) to bring these proceedings on behalf of Gemwane. There is otherwise a risk that Gemwane may not be able to act in its own interests, and there should be no shadow on the ability of Gemwane to apply for the relief ordered pursuant to these reasons.

The further conduct of the proceedings

107 In the course of the hearing, there was discussion, and something of a consensus, that the issue under the Farm Debt Act should be determined as a separate question and in the relatively near future. There will need to be orders made for this purpose, as well as procedural and timetabling orders to get the matter on for hearing. The appropriate course is simply to list the proceedings for a case management hearing so that the parties have an opportunity to formulate appropriate orders, including in light of these reasons for judgment.

Costs

108 The result is a mixed result. There have been no submissions about what costs orders should be made in light of such a result. I will simply order that costs be reserved.

Associate:

Dated:    15 September 2025

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