National Bank Bastardry. Part IV. Summing up a Tawdry Affair.

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“This is not the end, this is not even the beginning of the end, this is just perhaps the end of the beginning.”

The first three parts of this series ‘National Bank Bastardry’, dealt with the simple fact that the NAB seized over $9 million worth of the Cronin family assets to settle a debt to the NAB of just over $5 million. The Cronin’s assets were six farms (Chambejo Farms), including the family home. When the NAB seized the Cronin’s land they (the Cronins) had four farms on the market with Landmark. The seizure was unnecessary and according to every reference I can find, probably illegal. The law is unequivocal, the mortgagee can only seize asset(s) to the value of the mortgagors debt to the mortgagee, and the family home should only be seized as the last resort. The NAB ignored that ruling and seized six farms including the family home worth, according to the only FH valuation we have been allowed to see, some ~$8.5 million— an independent valuation $9.4 million both valuations  well in excess of the debt. That didn’t stop the NAB — they seized the lot. There was a now famous court case Nolan v MBF Investments. It’s not unreasonable to assume that banks and receiver managers know of the judge’s determination in this landmark case. This reference also explains in detail what is meant by ‘duty of care’ as it applies to property sales. I have quoted this ruling many times in previous articles and neither the NAB or Ferrier Hodgson have replied.

This article from the Human Rights Law Centre  adds another dimension to the same case, and in my view shows how manifestly wrong Ferrier Hodgson were in the manner in which they managed the Cronin family’s estate. These days we often shake our heads and ask the question, ‘how can such a thing happen in the 21st century? The answer in this case is, ‘because there is nobody watching them and they will continue behaving as they do until they are challenged in a court of law. Challenging costs money — mortgagors in the hands of a receiver, are by definition the least likely to be able to afford the cost of a legal challenge against the mortgagee or the receiver manager or both.

The NAB sold the family home and Harold and Barbara Cronin in their retirement, now live by grace and favour on a friends farm, again, as the farm valuations far exceeded the Cronin’s debt to the NAB,  should NOT have seized the ‘family home’ — again that is what the law says. The most important questions that must be answered is why did the NAB seize the six Chambejo Farms when Chambejo already had four farms on the market and due to a couple of poor seasons few farms were selling except to overseas investors and (2) why did Ferrier Hodgson the receiver appointed by the NAB, believe that they could sell the farms when all of the land agents in the area had failed? Perhaps the answer lies embedded somewhere in this issue?

I wonder who in the National Australia Bank did the budget on the foreclosure on the Cronin’s farming business?

The Hard Work Begins.

The NAB and their appointed receiver manager, Ferrier Hodgson, took nearly three years to dispose of the Cronin’s assets.  The price they eventually received for the farms was a little over half of their sworn valuation. Subsequently the NAB ‘wrote off’ ~ $4.5 million and left the Cronin family destitute, without a home and bankrupt.

The first three parts of ‘National Bank Bastardry’ laid out for all to see and to ask the question whether ‘gross incompetence’ best describes the management of the NAB and Ferrier Hodgson — any clown can sell at a loss. We are not lawyers, but it appears to us that the NAB and Ferrier Hodgson have treated the laws of this land with total disdain and the Cronin family with unbelievable arrogance and officiousness.

The National Australia Bank and Ferrier Hodgson have not challenged the Global Farmer or the Cronin family over the incredible but achingly truthful claims we have made against them.

We only draw one conclusion from that behaviour and that was we were on the money.

I always thought that a mortgagees sale was for the receiver to sell the mortgagors goods for a price as close as possible to that of the sworn valuation and settle the mortgagors debt to the mortgagee — apparently not. The purpose of a mortgagees sale, by this example, is to evict the mortgagors and in so doing break the law and then stuff around for nearly three years, get paid $700,000 for stuffing around and lose over ~$4 million of the mortgagors equity into the bargain and leave them penniless after best part of half a century of farming. A half century that started with an axe and a tent on the Kent River.

The NAB and Ferrier Hodgson have answered very few of our questions. Even when Harold has asked for information to which he is entitled by law, he has been ignored. I suppose it could be their way of demonstrating superiority? Whatever the reason they seem to have adopted the attitude, ‘If we ignore them, perhaps they will go away’. Well we won’t.


We have no idea what FH think. From start to finish they did not act in the best interests of the mortgagor, which they were obliged by law to do. We have quoted so many times to them that they have a duty of care to the mortgagor, but they seem to think they are a law unto themselves.

The only thing that didn’t stop when Chambejo Farms was placed into receivership was the interest on their borrowings from the NAB. That clock kept ticking and the debt mounting. Good business for the bank but I’ll bet they got a hell of a shock when FH fronted up with their sales figures. Half price!! How does one hide a loss of over $4 million? If the six properties that comprised Chambejo Farms had been sold for their true value the Cronins would have received an amount equal to or in excess of the amount that the NAB wrote off — and their retirement would have been secure.

This will be the last of the NAB Bastardry story in the Global Farmer for now. That doesn’t mean our work is ended, it just means it will be less public. The tactic of both the NAB and Ferrier Hodgson over the months we have been writing this appalling and disturbing litany of incompetence has been to deliberately obstruct us by refusing to answer our questions. It had the opposite effect, we dug in even more.

By law we must vote at the forthcoming federal and state elections —it’s silly law.  Abraham Lincoln in his Gettysburg Address promised the American people  ‘a government of the people by the people for the people’. We have no such aspiration in this country. The mail out on every edition of the ‘Global Farmer’ goes to many state and federal politicians, apart from one phone call from our local federal member months ago, none of our elected representatives have shown any interest in the Cronin story. That is a sad indictment on our political system and representation. We probably have more politicians per head of population than any other country in the world and not a good Samaritan among them.

Had the NAB and Ferrier Hodgson offered to meet with the Cronins and their lawyer to discuss the Cronin’s grievances the Cronins would have been have been happy to do so. Nothing has changed.

Believe it or not the NAB does have a Code of Conduct.

I make no comment on the Code of Conduct of the National Australia Bank. national-australia-bank-code-of-conduct.pdf

You be the judge as to whether the NAB employees in Perth pay any attention to their own Code of Conduct.

What I do ask you to do is to read the Code of Conduct and then consider the story we have told about the National Australia Bank in Parts I to IV inclusive, in ‘National Bank Bastardry’

Make up your own mind as to whether the NAB in Perth has followed the NAB Code of Conduct or whether they have written their own rules as they have trundled along destroying the financial lives of the Cronin family?

This is an extract of the NAB Code of Conduct.

Message from the Chief Executive Officer.

At the National Australia Bank Group, we are committed to achieving sustainable performance and delivering value to our customers and shareholders while maintaining our beliefs, behaviours and trusted reputation.

National Australia Bank maintains Codes of Conduct for all regions in which we operate. These Codes detail the standards of responsibility and ethical conduct required of every employee and everyone working on our behalf including contractors, consultants and directors.

Consistent across all regions in which we operate are our Group commitments:

We conduct ourselves professionally

We act with honest, integrity and fairness

We manage conflicts of interest

We meet our legal and regulatory obligations, voluntary commitments and internal standards

We adhere to confidentiality and privacy requirements

We deal with and report on suspected breaches

Andrew Thorburn

Group Chief Executive Officer

National Australia Bank Limited

Since the last edition of ‘Global Farmer’, over a month ago now, Harold Cronin filed an ‘on-line’ complaint with the NAB. Harold and I rang NAB and sought an assurance that Harold’s complaint would not be forwarded to Perth in the first instance, as I feared that would defeat the purpose. I was assured that it would be dealt with by the complaints department at their Head Office.

The NAB hasn’t, so far, had the good manners to even grace Harold with an acknowledgement of receipt of his complaint. What better example could we have that confirms why the NAB are seen by many of their customers as being arrogant, self serving and a company that puts its profits and image before service to its customers?

It is now our experience that the NAB do not follow up complaints made against them. This means that the complaint facility on their web site is a public relations facade — it looks good — but it has no substance. Then again, there is always the chance that the complaint went straight to WA and then the bin.

We also filed a complaint regarding the NAB with ASIC. Judging by their reply it would appear that complaints like that of the Cronins are too small for ASIC to be bothered with.

The Australian Labor Party (from what I have experienced recently, I agree with them) want a Royal Commission to investigate banking in Australia. Rather than agree with Labor, the Government, if they win the election, are going to levy the Banks and put the money they raise into ASIC, so ASIC can afford a closer watch on the Banks. The idea is right. The execution is the test. It remains to be seen if that comes to pass, whether the little business, say less than $10 million, will ever get the attention of ASIC.

Conflict of Interest?

A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial interest, or otherwise, one of which could possibly corrupt the motivation of the individual or organization. Wikipedia.

We asked this question in Part 1, it remains unanswered and I can’t get it out of my mind. It’s one of those ‘we may never know questions.’ The question is, are the following dates just coincidence?  If they are then they are stranger than fiction. This is what I wrote in Part I. The dates are from documents written by and sourced from FH and the NAB:

One of the intriguing and unanswered questions is why, before they were appointed as receiver managers and agent for the mortgagee in possession, did Paul McKenzie, a card carrying member of FH staff on Feb 20 2013 recommend to Harold and Christopher that they contact a Mr Gapper, a senior manager in Elders Real Estate at the time, who was, they were told, looking for land for Chinese investors? Is that a conflict of interest? If your answer is no then who was Mr McKenzie working for on that day?

The result of that advice was that on April 23 2013, so before Chambejo was placed into receivership, Christopher Cronin, the Chinese investors /Vic Stock Grains, accompanied by Mr Gapper and a Mr Pens from Elders, inspected Chambejo Farms with a view to leasing some or all of the six properties.

On May 3 2013 the Cronin Family together with advisers were summoned to Perth by Mr Daniel from NAB and informed that Ferrier Hodgson had been appointed receiver managers and managers for the mortgagee in possession of all six Cronin farms called Chambejo Farms and all other assets including machinery, fertilizer and seed.

On May 15 2013, less than two weeks after FH were appointed receivers and managers there is an entry in FH sequence of events (diary), that they (FH) had been approached by a third party wanting to discuss leasing all of Chambejo Farms.

On May 29 2013 in the NAB sequence of events, there is an entry where Darren Weaver from FH informs the NAB, but not the mortgagor, the Cronin family, that (lo and behold!) non other than Vic Stock Grains wanted to lease Chambejo Farms and what is more – they had been referred to FH by Elders!

On May 30 2013, one day after that application was received, Mr Pens of Elders Real Estate wrote to Christopher Cronin to tell him that Vic Stock Grains were no longer interested in leasing Chambejo, partly because of the summer weed growth and he (Pens) appreciated the figure offered for the lease was low. He didn’t mention to Christopher Cronin that he had submitted another application to lease all the Chambejo farms and this time he had applied through the receiver managers. Elders on behalf of Vic Stock Grains appear to have been well informed and up to date with regard to Chambejo Farms.

It is curious that Harold Cronin and Christopher Cronin had no idea that the NAB were going to place them into receivership until they met with the NAB IN PERTH on May 3 2013 because back in April, McKenzie advised them to lease (let) some or all of their land. He told them Gapper was looking for land for the ‘Chinese.’

What on earth was going on when FH were keeping the NAB as mortgagee, informed on offers to lease (Elders and Vic Stock) Chambejo Farms but not the mortgagor, the Cronin family? Why did they do that? It gets more interesting.

On June 5 2013, FH provided the NAB with a draft of the lease for Chambejo Farms, we can only presume from the sequence of events it was for Vic Stock Grains to be the tenant, yet FH did not supply a copy to the mortgagor. The question then arises were FH exercising a ‘duty of care’ towards Chambejo and the Cronins by keeping them in the dark?

In fact there is no point in conjecture, we know it was for Vic Stock Grains because, believe it or not, all they were waiting for was for the ink to dry on the contract to lease.  They had their machinery, literally, lined up in Ravensthorpe, ready to go, but the season and lack of information and pressure on the mortgagors beat them. There is a lot more to this story. Frankly it stinks.

As Tom Darbyshire from Kott Gunning wrote: Although such receivers are appointed by the lender, the loan contract almost always states that they act as the agent of the borrower. It is an odd sort of agency. Normally agents have to act in the best interests of their principal, but that is definitely not the case with receivers. The borrower pays the receiver’s fees and expenses, but the receiver’s main job is to get in and sell the assets of the borrower so that the money can be repaid to the lender. It is a little like having to engage a tax agent to ensure that you pay as much as possible to the ATO.

Is this an example of the receiver and manager and agent for the mortgagee in possession acting in the best interests of the mortgagor, Chambejo Farms? ‘Duty of Care’ is the official terminology. The answer has to be no. The answer from the Cronins may have been different if the NAB had told them that the proceeds of the lease would offset the daily accrual of interest on their debt.

All the Cronins were asked to do was sign an agreement to occupy. Harold prevaricated because the amount mentioned was less than the amount the receivers had charged him for chemicals for summer weed control. FH mention the lease being worth $500,000 which is far more than was mentioned to the Cronins. From reading the correspondence the whole exercise was more than a bit sloppy. FH should have had a ‘man on the ground’, instead they attempted to do everything by letters and emails. Poor management and again no ‘duty of care’ towards the Cronins.

Bitter, Broke, Destitute and Traumatised.

Eviction in Ireland circa 1870 We’ve come a long way since then haven’t we?

Considering the sequence of events as depicted above, is it any wonder after nearly three years the Cronin family is bitter, broke, destitute and traumatised, and in so many ways suspicious of the motives behind everything that was done to them by the NAB, FH and Elders Real Estate.

Were the Cronins set up [by FH and Elders] for a quick sale to the Chinese? Or a quick lease with the option to buy? What sort of games were people playing with the Cronin’s livelihood? That is what we need to find out. Too many players and not enough has been divulged. Again the mortgagees mob seem to have forgotten or they don’t care that they owed a ‘duty of care’ to the mortgagor.

Vic Stock Grains are part of the Chinese investment group the Beidahuang had already bought and leased some 85,000 hectares of West Australian wheat land in the preceding 12 months. An article in the West Australian claims Vic Stock Grains had spent over $200 million. 

One of the farms they purchased was not without controversy: National Australia Bank has won injunctions giving it control of more than 19,000ha amid a bitter fight with high-profile Newdegate farmer Dennis Joyce and his sons Trystan and Ryan. Newdegate farmer Dennis Joyce and his sons Trystan and Ryan.

The same group bought 6,500 hectares from the Webster family at Ongerup and the Beidahuang group were prominent at the same time because of their plans to load grain in Albany from their own facility.

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Paul McKenzie

Rural Financial Counselling Service WA.

At the same time as Mr McKenzie was working for Ferrier Hodgson, one of the leading agricultural receiver managers in the country and presumably maintaining his own practice as an agricultural consultant, during 2013/14 he was also a Board member and Treasurer of the Rural Financial Counselling Service of WA (RFCS WA) and he had a third string to his bow as it would appear he was ‘scouting’ it for a Real Estate Company, Elders.

The RFCS identifies and endeavors to help those in agriculture facing financial hardship. Just what the Cronin family was looking for. This is how the RFCS describe McKenzie in their 2013/14 Annual Report:

Paul McKenzie has 21 years experience as a management consultant and is the founder of Agrarian Management, a leading farm management consultancy in Geraldton and Katanning. Paul also has first-hand experience with primary production as owner of a cropping and grazing property near Toodyay.

Paul brings substantial expertise in farm finance and management, plus experience in improving company performance through his various directorships of various private and ASX listed companies.

Paul holds a Bachelor of Science in Agriculture through University of WA, a Bachelor of Commerce through Murdoch University and a Company Directors Diploma through AICD. He is a Fellow of AICD and past president of AAAC (WA) Inc.

The RFCS advise on their website that:

The RFCS WA offers a free, confidential and mobile service, which can assist you and your family with the following:

– Identify financial and business options

– Negotiate with your financiers

– Know about government and other assistance schemes

– Access accountants, farm management consultants and educational services

– Identify and approach professionals for succession planning, family mediation, personal counselling and government agencies

Could the RFCS have helped the Cronins at that time? How does a man become a board member of the RFCS, which one presumes would be among the first to learn of agricultural/rural businesses in financial trouble and an the same time work for a firm like FH who make a substantial part of their living by being receiver managers? Is there is an unacceptable level of conflict of interest here?

The story of Mr Paul McKenzie ‘gets curiouser and curiouser,’ said Alice.

Why did McKenzie advise Christopher Cronin to contact Elders Real Estate? Who was he working for? How did he know that Elders were looking for land for Chinese investors?

A lot was happening in the life of the Cronins, they had not been placed into receivership and every possibility to avoid that happening was being pursued. Not the least being that FH had completed their Review of Chambejo Farms and had sent a redacted version to the Cronins. Harold’s view is that it was a waste of paper, because the ‘guts’ of the Review had been blacked out (FS). Why redact a report? What was there in that report on their business that it was deemed the Cronins should not see? Was this an abuse of bank power? Does this behaviour meet the NAB’s Code of Conduct?

Three proposals from consultancy firms were put to the NAB and FH for a ‘clean’ exit strategy for the Cronins from the NAB and they were all rejected. One firms drew the attention of NAB and FH to the seriousness of summer weed growth on the Chambejo Farms. They were ignored. Again FH were ignoring their responsibility to the mortgagor.

The Meetings with Elders Real Estate.

Taking  and validating McKenzie’s advice, a meeting was arranged for David Rees, farm consultant to the Cronins for many years, to meet with a Bob Pens and Richard Gapper both from Elders Real Estate, in Perth on April 12, to discuss the feasibility of the Chinese being interested in a lease and or share crop arrangement for Chambejo Farms.

As a result of that meeting it was arranged that Chris Cronin and David Rees would attend a meeting at a Ron Russell’s farm west of Jerramungup on April 23, 2013. This they did and met with Bob Pens and Richard Gapper and Trent Kensett Smith an agronomist from Elders. And a Jimmy H from Vic Stock Grains. They went from Jerramungup to Chambejo and did a full inspection of all farms.

Of note here is that McKenzie’s introduction in February 2013, is before the FH report to the NAB. This inspection on April 23 2013 took place before Chambejo was placed into receivership in May 2013

On 22 April 2013 and I quote from the FS sequence, ‘Following from the meeting, FH provides NAB with cost estimate of a Receivership strategy for consideration.’

Again from the Ferrier sequence (FS): 29 April 2013 NAB advises FH that it intends to appoint FH to the Group as R&M (Receiver and Manager. Ed) and as Agents for MIP (Mortgagee in Possession. Ed)

May 3 Harold and Christopher Cronin  of Chambejo Farms (The Group) are informed in Perth that FH have been appointed as receivers and managers and as mortgagee in possession of all their farms.

There was, obviously, a lot of talking going on between FH and Elders Real Estate and maybe the NAB because what needs to be explained by FH and Elders is that on May 15 2013, less than two weeks after FH were appointed receivers and managers there is an entry in FH ‘sequence’ (FS) that FH had been approached by a third party wanting to discuss leasing all of Chambejo Farms.

On May 29 2013 in the NAB  sequence of events which was also given to us by the Ombudsman, there is an entry where Darren Weaver from FH informs the NAB, but not the mortgagor, the Cronin family of Chambejo Farms, that (lo and behold!) non other than Vic Stock Grains wanted to lease Chambejo Farms and what is more – they had been referred to FH by Elders!

The following day (30th) Mr Pens from Elders writes to the Cronins, cancelling any interest that Vic Stock Grains may have had in leasing their farms. Mr Pens in his letter recognised that the offer Vic Stock Grains had made was,… ‘obvious to all that the Vic Stock share farming model could not be a viable one for yourself and I suspect any other good farmers in your region.

Referring to the Vic Stock grains manager Pens wrote, ‘He does acknowledge good subsoil moisture already present and the potential for a productive 2013 year in Cropping (sic) but has concerns about the cost of dealing with Weed Control (sic) which is overdue.’

Vic Stock Grains wanted to lease Chambejo Farms before they were placed in receivership. Then when they were placed in receivership, through their agent, Elders, they cancelled their offer, but they didn’t cancel until a month AFTER their first inspection of Chambejo – so they had waited – why did they do that?

Then, once the receiver manager had been appointed Vic Stock Grains, again through Elders, submitted a proposal to lease, this time to the receiver manager. What was the price the receivers were offered? We will never know. We have asked and we have been ignored.

The question remains was Mr McKenzie ‘running with the Hare and hunting with the Hounds?’ or to put it another way, ‘was the Gamekeeper also the Poacher?’

This has been a long and sometimes painful journey for the Cronin family. Telling a story like theirs can never be easy. The manner in which the whole exercise was executed lacked real management expertise and dare I say it, compassion?  The inevitable trauma of having receivers appointed should have been considered by the NAB and FH, in any other walk of life, like a redundancy, bush fires and floods counseling is an integral part of recovery. All one gets from having receivers appointed is the stigma. That must change or the incidents of depression, PTSD and self harm will continue to increase.





One thought on “National Bank Bastardry. Part IV. Summing up a Tawdry Affair.”

  1. I am sure the farm “finance lenders” enjoy foreign investment taking advantage of highly geared good producing farms.

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