Rural Lenders behaving Badly:
Extract from an article I wrote back on the 17th of November Banks Foreclosing On Farmers Across Australia
If you have a substantial farm debt with your bank, stay on good terms with them and pray. In my time I’ve seen many a good farmer with substantial debt, who was still servicing that debt, forced to either refinance somewhere else or to sell, because some suited bank boffin in a city high rise decided the bank needed to lower its exposure to the Agriculture sector.
A lot of the time, the reason that farmer was with that bank was because the same bank boffin some time earlier had decided they were under exposed to the farm sector and had sent their local lenders to write up new loans by offering attractive rates or terms to get the business.
Apparently this is exactly what is happening with Suncorp. I am told that they are working frantically to offload rural finance clients. Suncorp is in trouble and is working overtime to get their books in order. Sadly part of Suncorps expansion strategy over the last decade has been an aggressive push into Rural finance.
Huge numbers of farmers were coaxed to take up offers of financing with Suncorp through attractive interest rates and recently employed rural lending officers who ‘understood’ the harsh realities of Agriculture in Australia. As a result Suncorp wrote hundreds of millions of dollars in loans to farmers which in some cases I have been told they are now demanding be repaid or refinanced elsewhere.
Some of those same Suncorp lending officers who were farmers ‘new best mates’ when the loans were written are now behaving like stand over debt collectors. My information is that Suncorp is actually telling some of their loans officers to “walk their rural clients out the door to another bank – any bank that will take the debt.”
If a farmer is unable to refinance and quickly, a very difficult thing to do in this climate, the only option available is to sell the farm to repay the debt. This is not clients who are defaulting on loans or have low equity.
Suncorp, AWB Landmark and Rural Bank (formerly Elders) are all in strife with their rural lending books . Whilst I have quoted from instances with Suncorp behaving badly I am wondering if farmers financed with AWB Landmark & Elders Rural bank are having similar difficulties?
I know that the last thing a farmer being crunched by a lender wants to do is speak out for fear of reprisal. If you are being pressured by your bank to refinance or sell up please give me a call (0428 966819) with your story. Anonymity is guaranteed as I know this is a very private, sensitive and stressful experience.
However if this is happening to you and others and its widespread it needs to be exposed to the rest of the rural community and the general public, as I have done with Suncorp here.
The only way to temper banks who are behaving badly is to expose them.
*****
END
Steve Truman – Agmates Founder & Editor.
Have Your say!
May 19, 2009 at 7:03 pm
G’day Steve,
To answer your questions:
1. AWB were the owners of Landmark. There was a perceptible change in
attitude and culture when AWB took control. To start with Craig
Milverton with Wesfarmers/Landmark. Good man. He left in 2005. Went
elsewhere. Good move.
2. 2005 on : J. Ellwood National Credit Manager. Ross Williams,
Manager Credit – Asset Management. Phil Ward, Head of Credit. Graham
Jacobs, General Manager, Landmark. I also wrote to Brendan Stewart
who passed my letter to Jacobs.
3. The lawyers from Kott Gunning, Perth, were David Miller he was the
man who did most of the ringing and threatening, ably supported by a
Mr Saayman who served the notice to quit. Lawyers will do anything
for a fee.
Cheers
Roger Crook
tomato@omninet.net.au
May 18, 2009 at 6:43 pm
G’day Black Dog,
Wow what an amazing and scary story. Thanks for sharing with us.
Just a couple of questions.
1. Who was the owner of Landmark when they started to come after you? From memory Wesfarmers sold Landmark to AWB in August 2003.
2. Do you want to name some / all of the people who hounded you? Its one thing to talk about a company – but quiet another to name the actual staff inviolved. My thinking here is some of these employeees would not be so bold (and rude) if they knew they wouyld be named publically.
Don’t worry you can’t be sued by those people if you stick to the facts.
May 17, 2009 at 10:53 am
Our story is quiet simple.
In 2002 we sought legal advice before accepting a lease on a small part of our property from city investors brought to us by our accountant. The investors wanted to invest in a tax effective horticultural project on our property. We were told the agreements protected us as the landlord and the manager of the project.
The crop became infected with a viroid disease that had never been identified in a commercial crop in Australia. We were the first case, ever.
The investors then commenced to sue my wife and I for $1m under the provisions of the Trade Practices Act for Misleading and Deceptive Conduct in that we didn’t warn them of the dangers of agricultural production. It didn’t matter to the lawyers that neither we not anyone else in agriculture in Australia had ever heard of, never mind experienced the disease.
AQIS placed our entire property into quarantine, destroyed more than $500,000 of crop and stopped us trading.
There were clauses in the agreements that, we thought, protected us, they didn’t. The TPA overules all. The investors, in effect, through their lawyers, tore up the agreements.
Then the money drain started when we employed lawyers. When the money ran out, I did the legal work myself.
Our so-called bank was Landmark. They had secured our business by being enthusiastic regarding our ambitions. Our debt at the start was covered by more than four times by our asset.
Landmark were informed of every event in the litigation, right from the start. They were told everything
There was no compensation available. Minister Truss refused our requests for help, he was quite callous. WA Minister said it was a federal matter. We were left high and dry and wondering why we had bothered to report a disease that we had identified and then reported it to the authorities. But thats another story.
We were left without income and, because of the quarantine, prevented from trading.
The battle continued. When I was diagnosed with severe depression Landmark were the first to know.
I was hostitalised. I was treated with ECT. Some how I managed to continue the fight.
Landmark told us we had to sell the farm.
I told them we had advice that we couldn’t because of the lease and the investors assets that were still on the lease.
Landmark employed Kott Gunning. Their lawyer constantly rang threatening us with foreclosure. It didn’t matter that sometimes my illness was so bad that I was crying down the phone. Its not easy to handle ECT 3 times a week and Kott Gunning!!
We took the investors to Court, I represented us. We won. Then they employed another law firm and took another tack. The TPA is a vehicle for unprincipled lawyers and their clients to make any ambit claim they can dream up. It’s a case of guilty until you can prove yourself innocent.
Eventually they made a mistake, a bad mistake, for them anyway. I exposed them for what they were. They settled a small amount. We were in no position to agrue as to the size of the settlement.
We were unable to counter-sue as I was tld that I needed $250,000 to proceed, even when I was told that the result was aforegone conclusion. So much for justice.
During our battle and my mental illness we had been charged compound interest. What had started as a small and managable debt was now getting bigger.
The legal battle was over and we proceeded to prepare the farm for sale. Landmark were informed. The property didn’t sell quickly enough for Landmark and they set Kott Gunning on us again, their lawyer started ringing again, threatening again. Sometimes they rang once a week sometimes more than once.
In the middle of all this I was diagnosed with cancer. Landmark were informed. I have all the letters. I was operated on. I was very ill for a long time. At one time when I was doing my best not to die, a couple of days after the first operation, Landmark knew I was in hospital, they, Landmark, wrote to us and told us that because we were in default they were putting the interest rate up on our loan to the maximum penalty rate allowed. A great present for my wife. She didn’t tell me until I got home three months later.
Then the phonecalls from Kott Gunning started again, as soon as I was home but still in and out of hospital, both in our local town and to Perth some 400 km away. Suffice to say there were complications with my eventual recovery.
Eventually we were forced by Kott Gunning to agree to give up the property to Landmark or face, and this was threatened, the bailiffs, who would be sent down to put us out on the street and chain the gate shut.
My health regressed.
We beat Landmark by 14 days and sold at a fire sale price.
At settlement Landmark loaded our debt to them with everything they could think of.
We were left with very little money at the end of the whole thing. Not even enough for a house. Compound interest and the rates charged when we went into default because of my mental illness and then cancer made our small debt into a big one. My illness cost us our farm. We won the case against us brought on by the investors.
Landmark showed no interest let alone compassion regarding our circumstance. All they wanted was thier money.
To that end they employed lawyers as stand-over men. I did say at the time that the only difference between being threatened by Kott Gunning and calling in Hell’s Angels was the absence of (visible) blood. The effect was the same.
I have copies of letters that I wrote to Landmark management and to the Chairman of the Board. Nothing made any difference.
I wrote to the Banking Ombudsman and was told that Landmark was unregulated. They could do what they liked.
This is just a synopsis of what happened to us. It is such a long, sad, callous story.
I am now seventy. I had dealt with what was Wesfarmers and then Landmark all my farming life.