About us

How can the Agricultural Tenancies Act help you?

Objects of the Act
Farms to which the Act applies
General rights of tenants and owners
Compensation for improvements
Other rights to compensation
Resolution of disputes and other matters
Mediation
Arbitration
Legal advice and representation
Costs
Definitions under the Act

Objects of the Act

The objects of the Act are:

to encourage ecologically sustainable farming practices, to maintain sustainable agricultural production, and to prevent degradation of the environment;
to encourage the use of written agreements for agricultural tenancies, and to set out terms that are taken to apply to all agricultural tenancies, including terms setting out the rights of the parties;
to provide a mechanism for resolution of disputes by the parties themselves through mediation; and
to provide an arbitration mechanism for settling disputes between parties to agricultural tenancies that is outside the court system. The procedures for the arbitration are to be as quick, cheap and free of legal technicality as is consistent with doing justice between the parties.

Farms to which the Act applies

one hectare or larger;
used for agricultural purposes;
occupied or used by a tenant or intended to be occupied or used by a tenant for agricultural purposes.

General rights of tenants and owners

Agreements to be in writing (section 5)

The parties to an agricultural tenancy have each the right to have the provisions of the tenancy reduced to writing. If the parties cannot agree as to the terms, any party may apply to have the terms determined by arbitration.

Improvements carried out by tenants with consent (section 6)

This section provides that the tenant may carry out improvements with the consent of the owner. The amount of compensation can be determined by agreement, and the owner must pay the compensation agreed unless the amount of compensation is unfair.

There is a general obligation to pay fair compensation for improvements. Payment is to be made at the end of the tenancy unless some earlier time for payment is agreed or is otherwise determined by arbitration.

The Act does not define ‘fair’. To determine what is fair, regard must be had to all the circumstances.

Improvements carried out by tenants without consent (section 7)

An improvement may be carried out without the consent of the owner, but only if the improvement is an improvement:

mentioned in Schedule 1 of the Act; or
a work or thing of a kind prescribed by the Regulation; or
first approved by arbitration to be suitable and desirable in the circumstances.

Schedule 1 - Improvements

drainage;
making or improving necessary roads or bridges;
clearing and removing stumps and logs;
destroying noxious animals;
destroying of pests within the meaning of the Rural Lands Protection Act 1998;
making permanent subdivision fences;
sowing pastures;
applying fertilisers, liming materials and trace element products within the meaning of the Fertilisers Act 1985;
repairs to buildings (being buildings necessary for the proper management of the farm), other than repairs which the tenant is under an obligation to carry out, or repairs referred to in item 10 —but only:
1. before beginning to carry out the repairs, the tenant gives notice to the owner of the tenant's intention; and
2. if the owner fails to carry out the repairs within a reasonable time after receiving the notice.
repairs to or re-erection of buildings to meet the particular requirements of the Food Production (Safety) Act 1998 or any other Act;
repairs to and the cleaning of silt from wells, bores, dams, reservoirs and ground tanks.

Improvements carried out by owners with consent (section 8)

The owner may carry out any improvement with the consent of the tenant.

If the amount of compensation to the owner is fixed by agreement, the tenant must pay the fixed amount, unless the agreed amount is unfair.

If the amount of compensation is not fixed by agreement, or is unfair, the tenant must pay fair compensation.

Compensation under this section may be paid by as agreed by the parties, which may include payment by instalments together with rent or other payments to the owner, or as determined by arbitration.

Improvements carried out by owners without consent (section 9)

An owner may carry out an improvement on the farm without the consent of the tenant only if an arbitration has first been held, and the arbitration has determined that the improvement is suitable and desirable in the circumstances.

Tenants' fixtures (section 10)

A tenant may remove a fixture affixed to the farm before the end of the tenancy or within a reasonable time after the end of a tenancy.

A tenant may not remove a fixture which the tenant claims or can claim compensation, for example, a fixture that is an improvement, or a fixture which the tenant was under obligation to affix under the tenancy or other agreement, or in place of a fixture belonging to the owner.

The tenant is to give reasonable notice to the owner, orally or in writing of the tenant's intention to remove the fixture.

The owner may, before the end of the period of notice serve a written notice on the tenant of the owner's decision to purchase the fixture. The fixture then becomes the property of the owner who must pay fair compensation to the tenant for it.

The tenant must, before removing a fixture comply with the tenant's obligations to the owner in respect of the farm, and also must bake good any damage to any other fixture or other part of the farm.

A fixture includes a building of the owner or affixed by the tenant.

Right of owner to enter farm (section 11)

The owner or a person authorised by the owner may, at all reasonable times, after giving reasonable notice orally or in writing, enter the farm for the purpose of:

viewing its condition;
performing a duty or other function of an owner under the Act;
carrying out any improvement, if permitted under the Act to do so.

An owner may not enter any part of the farm used for residential purposes except with the consent of the tenant.

The right of entry provided by the Act does not limit any other right of entry which may be conferred on the owner by agreement or by any other law.

Record of condition of farm (section 12)

A record of the condition of the following matters:

the land and any cultivation of the land;
any buildings, fences, gates, roads, drains or other works or things on the farm; and
any other improvements

must be made jointly by the owner and the tenant if either of them requires the record to be made, at the commencement of the tenancy and at reasonable intervals during the tenancy.

A record of:

any improvement carried out by a tenant or by an owner; and
a record of any fixture that the tenant may remove under the Act

must be made jointly by the owner and the tenant if either requires it to be made, at reasonable intervals during the tenancy.

At the request of either the tenant or the owner, the Director-General of Agriculture may appoint a person to make a record under this section.

The cost (if any) of making the record must be met by the owner and tenant in equal shares unless they come to some other agreement.

Accounts (section 13)

The owner and a tenant have:

the duty to keep proper account to keep proper accounts in connection with the tenancy; and
the right to inspect at all reasonable times, after giving reasonable notice, the accounts kept by the other in connection with the tenancy.

Termination of tenancy (section 14)

A tenancy for a fixed term, with no provision for holding over, terminates at the end of the fixed term. No notice of termination is necessary to terminate the tenancy.
A periodic tenancy (other than a tenancy from year to year) cannot be terminated unless written notice of termination is served on the other party. The length of notice must be at least equivalent to the length of the tenancy period.
However a periodic tenancy referred to in 2. (other than a tenancy from year to year), cannot be terminated unless the written notice of termination is served so as to give notice of at least:
1. in the case of a sharefarming arrangement for crop growing - a period of 1 month, ending at least 1 month after the end of the current annual cropping program; and
2. in the case of any other arrangement - a period of 1 month.
A tenancy from year to year cannot be terminated unless at least 6 months' notice is given to the other party before the end of the tenancy period.
However a tenancy period referred to in 4. cannot be terminated unless the period of notice ends at least 1 month after the end of the annual cropping program.

The section does not apply to termination for breach of the tenancy. It does not apply where the tenant and the owner have otherwise agreed on the notice to be given.

Compensation for improvements

Compensation for tenant's improvements - how determined (section 15)

Compensation for tenant's improvements payable under the preceding provisions of the Act, is determined as "the value of the improvement to an incoming tenant, taking into account the value of any consideration or benefit given by the owner to the tenant for carrying out the improvement."

The value of an improvement to an incoming tenant is to be calculated by taking into account the financial returns that might be expected to accrue to a (hypothetical) incoming tenant on account of the improvement or produce, if the farm were to be subject to a further tenancy (not being a sharefarming arrangement).

Compensation for owner's improvements - how determined (section 16)

Compensation for owner's improvements payable under the preceding provisions of the Act, is determined as "the value of the improvement to the incumbent tenant, taking into account the value of any consideration or benefit given by the tenant to the owner for carrying out the improvement."

Fair compensation (section 17)

Determination of fair compensation for an improvement under preceding section of the Act where an improvement has been carried out by a tenant or an owner requires regard to be had to the financial resources of the parties, the financial returns that might be expected from the improvement and other relevant factors. If agreement cannot be reached, the amount of fair compensation is to be determined by arbitration.

Other rights to compensation

Compensation for general improvement to farm (section 18)

The owner must pay fair compensation to the tenant where there has been a general improvement to the farm by the adoption of better farm management by the tenant:

other than is normally practised on farms of the same character, in the same neighbourhood, as the farm concerned; or
other than is required by any agreement.

If compensation has been already paid or agreed to be paid, or awarded by arbitration for a particular improvement that caused or contributed to the general improvement, the compensation for general improvement to the farm is to be reduced by the amount of compensation for the particular improvement.

Determination of fair compensation for a general improvement carried out by a tenant requires regard to be had to the financial resources of the parties, the financial returns that might be expected from the improvement and other relevant factors. If agreement cannot be reached, the amount of fair compensation is to be determined by arbitration.

Compensation to tenant for stored products (section 19)

The owner must pay the tenant fair compensation for any products stored by the tenant during the tenancy and left on the farm at the end of the tenancy. Where there is no sharefarming agreement the compensation is to be the value of the products to an incoming tenant.

Where there is a sharefarming arrangement, the compensation is to be the proportion of the value of the stored produce to an incoming tenant, or of the value of the farm produce to which the tenant is entitled under the arrangement.

Products mean grain, hay, silage, fertiliser or any other useful commodity, whether or not a produce of the soil.

Compensation for deterioration (section 19A)

The tenant must pay the owner fair compensation for any deterioration of the farm during the tenancy owing to the failure of the tenant to manage the farm in accordance with good farm management or the provisions of any agreement creating the tenancy, or both.

The compensation is to be determined as an amount representing the decrease in the value of the farm as a result of the deterioration.

The compensation is payable when the deterioration is evident.

The rights of an owner can be displaced to the extent that an agreement between the owner and the tenant expressly waive those rights, or to the extent that the management of the arm (being management that is material to any claim for compensation under this section) is expressly authorised by the agreement.

Resolution of disputes and other matters

Part 4 of the Act relates to referrals to arbitration, the jurisdiction of courts, referrals to mediation and other matters. Section 20 defines terms used for the purpose of this Part.

Applications for arbitration (section 21)

An application for arbitration of a dispute or a matter can be made if:

the dispute relates to a right or obligation conferred by the Act; or
arises from, or relates to, an agreement creating a tenancy, or any other dispute not arising from a right or obligation conferred by the Act, which arises from or relates to a tenancy; or
any other matter that the Act permits to be determined by arbitration.

Matters which may not be the subject of an application for arbitration include:

any dispute where an owner seeks ejectment of a tenant, or seeks recovery of rent; or
any other matter, of a kind prescribed by the Regulation that may not be the subject of an application for arbitration.

Jurisdiction of courts (section 22)

Arbitration takes place outside the court system.

A court has no jurisdiction if:

the issue in a dispute or matter is one which may under the Act be referred to arbitration; or
the issue in a dispute or matter has been referred to arbitration and has not been withdrawn or dismissed for want of jurisdiction.

Where proceedings in a court have been commenced before a dispute or matter was referred to arbitration, the arbitration proceedings are to be terminated on the application of a party to the arbitration who is a party to the court proceedings. However, this provision does not apply where the issue is one in respect of which a court has no jurisdiction.

A court would deal with for example:

disputes over attempted evictions;
attempts to recover rent; and
any type of dispute that pursuant to the Regulation might be referred to it.

Application for arbitration (section 23)

Applications for arbitration are to be made to the Director-General.
They are to be made in a form approved by the Director-General.
The Director-General is to cause a copy of the application to be served on the other party as soon as practicable after receiving the application.

Time limit (section 24)

Parties to an agricultural tenancy have 3 months after the dispute arises, or after the end of the tenancy (whichever is the later) to make an application for arbitration.

The parties may by consent extend the time under which application for arbitration can be made.

The Director-General may also, on the application of a party, extend the time.

Functions of Director-General in relation to arbitration applications (section 25)

The Director-General may exercise one or more of the following functions in relation to an application for arbitration:

arrange a pre-arbitration conference and determine the manner in which the conference is to be held;
encourage the parties, if appropriate, to seek mediation in accordance with the provisions of the Act;
request the parties to provide information or documents relating to the application;
refer the dispute or matters to arbitration and appoint an arbitrator;
fix the date for hearing of the arbitration; or
appoint a technical assessor.

Referral of disputes and matters to court (section 26)

The Director-General may, instead of referring a dispute or matter to arbitration, by order in writing, refer the dispute or matter to a court.

Before making such an order, the Director-General must be of the opinion that:

the court would (apart from section 22) have jurisdiction to determine the dispute; and
at least one of the parties consents to the referral; and
it is in the public interest or in the interests of the parties to do so.

The Director-General may make the order on his own initiative or on the application of a party.

Review of decisions (section 26A)

A party to a dispute or matter may apply to the Administrative Decisions Tribunal for a review of a decision of the Director-General to:

extend or not extend the time for making an application for referral of the dispute or matter to arbitration; and
refer, or not to refer the dispute or matter to a court.

Mediation

"In contrast to the mechanisms of arbitration and litigation mediation should be seen as providing an approach that will facilitate a free-ranging discussion between the parties directed towards assisting them to negotiate their own resolution of their dispute."

"A mediator has no authority to impose a decision or determination on the parties. The mediator's role is essentially to create a negotiation environment which will enable the parties to reach their own determination of the way in which the dispute should be resolved."

Philosophy & Practice of Mediation, Sir Laurence Street 1999

Referral for mediation (section 26B)

The Director-General may, at any time before referring a dispute or matter to arbitration, refer it to mediation if:

the Director-General considers it appropriate in the circumstances; and
the parties consent to the referral; and
the parties agree as to who is to be the mediator.

The mediator may be a person whose name is on a list compiled by the Director-General for the purposes of this part, but may be a person whose name is not on that list.

If the mediation is unsuccessful, the Director-General may refer the dispute or matter to arbitration.

Mediation to be voluntary (section 26C)

Attendance at and participation in mediation sessions are voluntary. A party to a mediation session may withdraw from the session at any time.

Costs of mediation (section 26D)

The costs of mediation, including the costs payable to or in respect of the mediator, are to be borne by the parties in such proportions as they agree, but if they do not agree, in equal shares.

Mediators (section 26E)

The Director-General may compile a list of persons who consent to be included in a list of mediators who also agree to comply with the provisions of the Act and the Regulation.

Privilege (section 26D)

Admissions made during mediation are not admissible in proceedings before any court, tribunal or body. The privilege extends to any document prepared for a mediation session. This privilege applies except where the parties to or in attendance at or identified during the mediation session consent to the admission of the evidence or document.

The privilege conferred also includes any steps taken in the course of making arrangements for the mediation session, or in the course of the follow up of the session.

Secrecy (section 26G)

A mediator may not disclose information obtained in connection with the mediation including mediation arrangements unless:

with the consent of the person from whom the information was obtained;
in connection with the administration or execution of the Act with respect to mediation;
there are reasonable grounds to believe the disclosure is necessary to prevent or minimise danger of injury to persons or damage to any property;
to the extent reasonably required for facilitating arbitration arrangements or, with the consent of the parties to the arbitration, for the purpose of aiding in the resolution of a dispute between the parties or assisting the parties in any other matter;
to comply with the requirement of a law of a State (other than a requirement imposed by a subpoena or other compulsory process) or the Commonwealth.

Exoneration from liability of listed mediators (section 26H)

A mediator whose name was included in a list compiled by the Director-General is not liable to any action, liability claim or demand in respect of a matter or thing where the mediator acted in good faith for the purposes of a mediation session under the Act.

Arbitration

The Act provides for an arbitration mechanism for settling disputes between parties to agricultural tenancies that is outside the court system. The procedures for the arbitration are to be as quick, cheap and free of legal technicality as is consistent with doing justice between the parties.

Arbitrators (section 26I)

Arbitration is to be conducted by a single arbitrator appointed by the Director-General. The single arbitrator must be a legal practitioner.
The Director-General, of his own initiative or on the application of a party, and if he is of the opinion that it is appropriate to do so, may instead appoint a committee of 3 persons to arbitrate the dispute or matter.
The committee is to consist of a legal practitioner as the presiding member, and two other members who, in the opinion of the Director-General have appropriate knowledge and experience, and who are not employees of the Department of Primary Industries.
The parties to the dispute or matter are notified in writing of the appointment of the arbitrator and technical assessor (if applicable), and the date, time and place fixed for the hearing of the application.

Technical assessors (section 25J)

The Director-General may appoint a technical assessor to assist the arbitrator in determining a dispute or matter, if the Director-General is of the opinion that the person has knowledge and experience that may assist in the arbitration of the dispute or matter. The role of a technical assessor is limited to providing assistance and advice to the arbitrator.

Application of the Commercial Arbitration Act 1984 (section 25K)

Certain provisions of the Commercial Arbitration Act 1984 apply to arbitration under the Act. Parties may obtain subpoenas by application to a registrar of a Local Court.

An arbitration award may be registered in a court of competent jurisdiction as a judgment for the amount of the award.

Orders (section 26L)

An arbitrator may make an order for payment of compensation in the nature of damages to a party aggrieved by a breach of a duty imposed on that other party by any of the provisions of sections 5 and 11-14.

In determining a dispute or matter referred to arbitration under the Act, an arbitrator may make ancillary declarations and orders.

Amount awarded to be charged on land of trustee (section 26M)

An amount ordered to be paid under the Act to a tenant and that is due from a trustee owner is a charge on the farm, and may be registered in the General Register of Deeds under section 187 of the Conveyancing Act 1919. The charge may be released by payment to the party in favour of whom the amount was awarded.

Contracting out (section 27)

Any agreement which purports to waive or abrogate any right, power or duty created by the Act, or to otherwise defeat the purposes of the Act is to that extent void.

However this does not preclude a party waiving that party's rights where the Act provides that that party may do so.

Delegation (section 27A)

The Director-General may delegate to an authorised person being an officer of the Department of Primary Industries, or to a person of a class of persons prescribed by the regulations, functions of the Director-General under the Act.

Service of documents (section 28)

The Act specifies the manner in which documents may be served on a person for the purposes of the Act or the Regulations.

A document may be served in person, on the owner or the tenant; or served on his/her solicitor or agent; or it may be delivered (by prepaid post or by hand) to the last known residence or place of business of the owner or the tenant; or otherwise as permitted by law or as agreed between the owner and the tenant in their tenancy agreement.

Regulations (section 29)

The Act confers a general power to make regulations as are required or permitted to be prescribed or that are necessary or convenient to be prescribed for giving effect to the Act.

The regulations will also make provision for remuneration of persons who are members of committees that conduct arbitrations for the purpose of the Act.

Legal advice and representation

Parties are entitled to seek their own legal advice before, during or after the dispute is heard; and, either may choose (with the chairman's permission) to be represented at the hearing by their own solicitor, barrister or agent. Alternatively, of course, both have the right to appear only in person at the hearing.

Costs

An arbitrator or the arbitration committee may order the unsuccessful party to pay the other party's costs—including payment of the other's nominated committee member, any fees for solicitors, barristers and valuers, and any witnesses’ expenses.

Definitions under the Act

tenant: the person granted the right to tenancy of a farm by the owner of the farm; includes a sharefarmer and any person whose right to occupy or use the farm is granted by the tenant of that farm. It does not refer to an employee of the owner.

tenancy: a lease or licence; an agreed lease or licence within a tenancy agreement; a tenancy at will (generally a verbal or ‘handshake’ agreement); a sharefarming agreement, or any other arrangement giving someone, other than the owner, the right to live on and use the owner's farm.

agricultural purposes: grazing, dairying, pig farming, poultry farming, viticulture, orcharding, beekeeping, horticulture, growing of vegetables or other crops, forestry, or any combination of these.