National Bank Bastardry – Part III – Greed.

Money and Greed Conquer All — Including the Law?

So who in this land of the free protects the weak and poor, like the Cronin family, from the financially strong like Ferrier Hodgson and the National Australia Bank? The answer is nobody, at least nobody that we have been able to find—we are still looking.

Man walks up to jewellers shop window, chucks a brick through it, grabs a couple of trays of diamond rings and then an hour or two later finds himself wearing steel bracelets and in the back of a Paddy Wagon.

His mate, who the robber had taken into his confidence, had hidden around the corner, took a video of the robbery, sold it to the police and collected the reward.

No excuses for the NRL player recently videoed behaving very badly, but the cockroach, the traitor who took and sold the pictures got something like $40k from the media scum is different. That cockroach deserves a punishment far worse than that metered out to the player.

The other one dobbed in his mate and if he has any vestige of a conscience will have to live with his treachery all of his life.

What motivated the two video enthusiasts? Greed. Greed caused the Global Financial Crisis and few if any ‘on Wall Street’ who caused that crisis were punished, they took their government funded retirement packages and disappeared as wealthy men.

Money Never Sleeps – Neither do the Greedy.
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Gordon Gekko

Perversely the 2010 film ‘Wall Street-Money Never Sleeps’ the sequel to the famous 1987 film ‘Wall Street’ starring Michael Douglas became almost cult films. Both stories concentrated on greed and both, apparently, caused a rush of graduate applicants both in America and the UK wanting to work in the banking industry.

One of the few advantages of being over a three quarters of a century young is (thankfully) I can still look back with a deal of clarity and compare yesteryear with today. Don’t jump to conclusions—this is not about the good old days. I have only reached this age because there are cures for what killed many of my ancestors. ‘Jack the Magic Dancer’ is not the man he was and I continue, helped by some very clever people, to beat him. I cannot help but compare our wonderful health system with our antiquated legal system. It is as if we are frightened to change, little realising that an antiquated legal system increases the cost of the health service. Think about it.

My age and my experience were on my mind a lot while was writing the last two episodes of the Global Farmer. I have contemplated if the world has changed or whether I have? Whenever I have started to write this series, the word GREED has materialised on the screen—so I thought this month I should pay it some attention.

I should also declare I have only been to one mortgagee’s sale in my life. I only went to fly the flag. I was a farm manager so the chequebook wasn’t all mine but there was nothing to stop me, for a mate, pushing the bidding if needed.

I saw the mortgagor’s wife in tears while she was serving tea and sandwiches with the other ladies from the CWA. I didn’t stay for the sale. The mortgagor had borrowed to pay a family member out who was a ‘sleeper’ in the family farm. Then we had two dry years and he had a fire over half the farm. I learned later they had a good sale, the neighbours rallied round so he didn’t need me after all. Someone bought his farm ute and gave it back to him.

Then I heard that a neighbour had bought the farm from the receivers and leased it back to the original owner. That was back in the 70s. Maybe many of us were still pulling chains and rakes around clearing land, just like those before us had done going back generations? Maybe there were too many ‘battlers’ there to kick a ‘mate’ when he was down? There were the exceptions of course, there were the ‘greedy’ ones hunting a bargain, but the neighbours outbid them.

Continue reading “National Bank Bastardry – Part III – Greed.”

Part II of National Australia Bank Bastardry – Is Breaking the Law Legal?

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The Triumph of Justice by Hans von Aachen.

Persistence.

The Cronin family deserve answers from Ferrier Hodgson and the National Australia Bank, answers which at the time of writing they are both either refusing to answer all questions or they are giving what can only be called puerile reasons for delaying answering our questions. The law protects the mortgagor. The law says that all the financial activities of the receiver manager and the manager in possession for the mortgagee, must be transparent and made available to the mortgagor. The National Australia Bank and their appointee Ferrier Hodgson appear to disagree with the law. So persistence is our only recourse.

The stand out feature following the publication of ‘National Bank Bastardry’ in the last issue of the ‘Global Farmer’ was the number of people, including those on Facebook, who encouraged us to keep on going with the story and wished the Cronin family all the best for Christmas and especially for a better New Year. Many identified with the Cronin’s problems, some related ‘tough’ experiences with their bank and as a result, did not want to go public with either their name or their story, except to say they had one. That is not a healthy relationship between borrower and lender – between the farmers and their banks. For every Charlie Phillott in Queensland and Cronin family in Western Australia, it appears there are many others with similar stories, which will never be told.

Smoke Screens and Threats.

Harold Cronin wrote to Ferrier Hodgson (FH), appointed by the National Australia Bank (NAB) as the receiver managers and manager for the mortgagee in possession of what was formerly Chambejo Farms, the Cronin family farming business. He asked for a copy of all (two or three) the valuations on Chambejo Farms that FH had commissioned from a firm of valuers, Opteon, and for which Chambejo Farms had paid. Harold wrote based on this advice:

  • The Corporations Act obliges receivers to keep financial records that “correctly record and explain” transactions they enter into while they are controlling a company. Directors and shareholders of the company have the right to inspect those records. These provisions appear in section 421 of the Act.

What follows is the body of the letter he got back from FH. It appears to be the very antithesis of section 421 0f the Corporations Act. If you don’t want to read the whole letter here is a short review, you should read the letter, because it’s a blinder:

FH wrote back to Harold and stated that they couldn’t release the information he requested because they, FH, had signed an agreement with Opteon invoking the Privacy Act 1988. Their contention was and is that the results of the valuations, paid for by Chambejo Farms as mortgagor are secret and unavailable to Chambejo Farms unless they signed an agreement, which absolved Opteon and FH from any action or proceedings based on the valuations. Even if they signed, it only meant that FH and Opteon would further consider the request; in effect they could still say no. It’s true – FH and Opteon wanted Harold and his family and their Trustee in Bankruptcy to give them an escape from possible prosecution. Why would they do that? It’s obvious isn’t it?

Continue reading “Part II of National Australia Bank Bastardry – Is Breaking the Law Legal?”

National Australia Bank Bastardry ?

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An unnecessary foreclosure by the National Bank of Australia in 2013 has left a couple who pioneered the Ravensthorpe area destitute and reliant on the old age pension. Their only possessions are their furniture, a far-from-new Jeep station wagon and their clothes. They live by ‘grace and favour’ on a friends farm. As you will see, because of a legal precedent, there is every reason to believe that National Australia Bank may have acted in contravention of the law. The question we have to ask as laymen is; is there now a case for damages against the National Australia Bank and if there is, from where do those who believe they have been damaged get the money to pursue one of the most powerful corporations in Australia, who are well known to have bottomless legal pockets?

After seizing their farms in May 2013 and putting them in the hands of Ferrier Hodgson (FH) as receiver and managers and agents for the mortgagee in possession, the National Bank of Australia (NAB), on November 11 2015, informed Harold, Barbara and Christopher Cronin, formally of Chambejo Farms Pty Ltd, that the NAB and FH, over  28 months, spent an amazing $6.0 million dollars, in what can only be called a failed attempt to recover a $6.0 million debt from Chambejo Farms.

Final returns were submitted to ASIC by FH in September 2015. If Harold Cronin had not asked the NAB and FH for the details of the costs and returns regarding the sale of the assets and properties that had comprised Chambejo Farms, recent experience has shown there is no reason to believe that the information would have been volunteered by either the NAB or FH.

On the contrary, FH and the NAB have been obstructive and repeatedly refused to provide information to the Cronins. The Cronins now know why FH did not wish to publicise what some might call their incompetence. We will show that FH were and are obliged by law, to provide detailed information to the Cronins as mortgagors.

As you will see later it is open to question, by their actions, whether both organisations abrogated their obligations under Section 420A(1) of the Corporations Act and their obligations under common law to act in good faith, particularly when it comes the family home.

It is open to speculation if this is what the NAB board and senior management really think of farmers after a couple of bad seasons? It’s certainly not their public position.

Does the NAB management not understand that farming is all about risk? The Cronins weren’t on their own after the bad seasons of 2011 and 2012. The records show many farmers in their region went deeply into debt in those two years.

“It’s ironic,” says Harold,  “That 2013/14 was a very good season in the Ravensthorpe area and had we been allowed to put a crop in, it would have solved most of our financial problems.”

Continue reading “National Australia Bank Bastardry ?”

The Scales of Justice are Broken in Rural Australia.

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The reason there has not been an issue of the Global Farmer for a while is because I have been investigating the circumstances which led to a major Australian bank, quite unnecessarily, foreclosing on a large family farming business in the south of Western Australia. Conspiracy is always hard to prove, so all I can do is tell the story and let you make up your mind.

There can be few among us who have not witnessed the distress and trauma in the eyes, demeanour and behaviour of relations, friends and associates when they are confronted with the awful news that their creditors have appointed receiver managers.

They stumble and fall as they search for a quiet place to go through all the emotions that well up inside of them. Fear, resentment, shame, humiliation, panic, anger, rage, embarrassment and guilt. For far too many, it is more than they can endure and they withdraw from family and friends and the society in which they live.

Some have a breakdown from which they never really recover. Some, unable to cope, take their own lives.

I must make a few things absolutely clear. Contracts should be honoured; debts should be paid as and when they fall due. For every willing borrower there has to be a willing lender. Prior to the Global Financial Crisis (GFC), Australia, like most of the developed world was awash with money. The Global Farmer explored the rise and rise in land prices in a previous article, ‘Self Inflicted Injury’.

The crucial difference in the philosophy of lending today compared to when I was a young man , over fifty years ago, is that these days there seems to be a complete lack of understanding with so many bankers that agriculture is a risky business. Their public face, which no doubt senior management and their boards see, is different to what happens in the real world. At least that has been the experience of the subjects of this story and I believe many more.

Many years ago, when agriculture was Australia’s biggest exporter and we had learned some bitter lessons from the evictions of the Great Depression, banks were set up in all states and federally, to cater for the special needs of primary producers, they understood risk.

It was recognised at that time by governments and the banking industry, that when all is said and done, farmers have different banking needs to the businesses on the high street. Put simply farmers, those who make a living from agricultural enterprises, from million acre stations to relatively few acres of horticulture, are different because they have no alternative but to gamble huge amounts of money on the weather and as exporters, put their faith and their produce on fickle international markets, which can be and are manipulated by the strong nations. Most of the world pays subsidies to farmers so they can manage the bad seasons and prices. Australia does not believe in subsidies.

When Australia entered the modern era of bank deregulation, rural banks disappeared and with them a culture of an understanding of agriculture formed by generations of experience in the bank and in government, but there was no room for that thinking any more.

Bob Hawke and Paul Keating are credited with moving Australian banking into what was at that time the modern Thatcher and Reagan theory of economics, which made rural banks and special purpose banks like the Commonwealth Development Bank (CDB) an anachronism in the face of what they believed to be progress.

In March of this year, several years work on behalf of a few dedicated farmers, academics and politicians failed to convince the Senate Economics Legislation Committee of the merits of a bill described as: The bill is a private senators’ bill co-sponsored by Senators John Madigan and Nick Xenophon. It proposes to amend the Reserve Bank Act 1959 to establish an Australian Reconstruction and Development Board (ARDB) of the Reserve Bank of Australia (RBA). The ARDB would have the task of forming and implementing a rural reconstruction and development policy. For the full report here.

If we had a bank similar to that proposed in the ARDB. A bank philosophy that recognised the special needs of farmers – that recognised there is a difference between running a business on the high street and one hundreds of kilometres in the bush that relies on the fickleness of ‘Mother Nature’, there would have been no need for this article.

Pain, distress, trauma.

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There can be few among us who have not witnessed the distress and trauma in the eyes, demeanour and behaviour of relations, friends and associates when they are confronted with the awful news that their creditors have appointed receiver managers.

They stumble and fall as they search for a quiet place to go through all the emotions that well up inside of them. Fear, resentment, shame, humiliation, panic, anger, rage, embarrassment and guilt. For far too many, it is more than they can endure and they withdraw from family and friends and the society in which they live.

Some have a breakdown from which they never really recover. Some, unable to cope, take their own lives.

Continue reading “The Scales of Justice are Broken in Rural Australia.”