NAB Fleecing Struggling Farmers – Now they must pay Restitution.

The Fleecing of Australian Farmers.

The headline on the front page of The Australian of July 24, 2018,  ‘NAB promises to stop fleecing struggling farmers’.

The Cambridge Dictionary defines ‘fleecing’ as;  ‘to take someones money dishonestly by charging too much or by cheating’. The Legal dictionary defines ‘restitution’ as; n. 1) returning to the proper owner property or the monetary value of loss. Sometimes restitution is made part of a judgment in negligence and/or contracts cases.

The NAB has admitted that it has fleeced (stolen from) some of its farmer customers and now, having realised the error of its ways, promises it won’t do it again. Isn’t that great?  Will the other banks now admit to stealing? They should, because they all behaved in the same callous and reprehensible manner if the evidence presented to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is anything to go by. Only a few of the many, many farmers who have been ‘fleeced’ will get the chance to testify, how many nobody knows, but the commissioner in reply to a question from Bob Katter MP has indicated that they won’t be forgotten. It may well be that Bob Katter has secured an extension of time for the Royal Commission to hear more from farmers. There is never any question where Bob Katter’s heart is, it’s with the people on the land. It’s a pity there weren’t a dozen politicians from rural electorates in court to give the commissioner a reminder, not that it seems he needs one, of the fleecing that has gone on in the bush.

As of Friday August 10 2018 it was estimated that the major banks and the superannuation funds will have to pay back one billion dollars to their members, both living and dead, fees that were deducted from their accounts for NOT providing them with a service, now being called a ‘fee for no service’ and it even has an acronym, FFNS. FFNS is an example not only of getting something for nothing, it is an example of stealing, as one senior barrister said, “It’s theft — the evidence is overwhelming.” Of course if it hadn’t been for the commission they would have trousered the money. It would have gone to paying those managers who get millions as a salary and millions as a bonus when they achieve their profit targets, which they do by fleecing superannuates and farmers it would seem.

As the NAB and others are now going to pay back what they have stolen from members of superannuation funds under their management, what about the farms the NAB and other banks admitted that they ‘fleeced or ‘stole’ from farming families by, as the mortgagee, selling the mortgagors property for less than market value?  Other people own those farms now, so they can’t be given back to original owner, or can they? As the banks have admitted to stealing farms by ‘fleecing’ and stealing is a crime, surely then there is sufficient prima facie evidence that banks have sold the proceeds of crime? That is maybe too long a stretch of the bow? But is it?

After the bad behaviour of the banks and the now illegality of FFNS, what bank, what mortgagee can claim with certainty that they legally sold the mortgagor’s farms for a ‘fair market value’? Surely there is now room to retrospectively challenge the admitted fleecing of farmers? There are so many questions to be answered now that the tide has turned and this society of ours has become concerned that those who control so much of our lives, the banks, have, with malice of forethought, cheated us and stolen from us.

So restitution to those who have been fleeced, will have to be in cash. There is provision in law for this, but it involves the Financial Ombudsman Service (FOS). Put simply this is the view of the FOS in the bulletin ‘FOS Approach to Mortgagee Sales’:

The major banks made a profit in 2017 of $31.5 billion. Of course they can afford restitution.

Of course, what the NAB Board of Directors and management haven’t said is that their remorse is so deep and genuine and they will repay, make restitution, to all of those from whom they ‘fleeced’ or stole assets — that would be a step too far for an Australian bank — if the Terms of Reference of the current Commission do not cover the commissioner now delving deeply into eligibility for restitution, then they must be extended. Let no one argue it can’t be done, because we have seen what the banks have done and how they have all behaved in the same reprehensible way towards farmers. Has there been collusion among them or has it just been a happy coincidence that management across the banking and superannuation sectors had the same ideas at the same time and those ideas were how to fleece farmers? If there has been collusion then the Trade Practices Act comes into play.

Let us not say that they cannot afford  to pay restitution. The trading banks in Australia are the most profitable in the world. We are now seeing, and the Royal Commission hasn’t finished, how they have accumulated some of those profits. In the superannuation industry by FFNS and in agriculture by ‘fleecing’.

There are some terrible stories of farmers being ‘fleeced’ by the NAB and other banks. Take the story of Bill Mott from Queensland.  Bill had a family farm valued at $22 million. He fell foul of the NAB, and they sold the lot, in what the NAB called a depressed market, for $7 million. Now his sons are scattered across Australia and one is suffering from depression. If this sounds like fiction it’s not, more like a horror story. What was Bill’s crime? He had a number of bad seasons and a flood at a time when he was highly geared.( If you read the Mott story, take the time to read all the other stories on the ABC site, how many more are there, hundreds?)

The NAB, according to Bill, didn’t give him and his family a chance, they just sold them up. That view is in direct conflict with the NAB Agribusiness general manager Khan Horne, he claims that receivership is rare and only used as the last resort, which is rubbish. Bill of course doesn’t agree with Khan Horne either, Bill accepts he will not appear before the commissioner and the only recourse left open to him now is to take the matter to court. The trouble with that idea is that justice in Australia through the civil courts is the province of the rich because the costs are prohibitive.  There is no justice in this country if you do not have a lot of money to pay lawyers and that is what makes people like Bill so angry. That is why the commissioner must look at these cases, it is beyond the financial capacity of so many who believe they have been ‘fleeced’ stolen from by the banks, to take their case to a court.

Closer to my home, down at Ravensthorpe in Western Australia, we had the sad story of the Cronin family, when the NAB (once again) foreclosed on them, they got no warning, they were  left penniless. Khan Horne appears in papers regarding the Cronin decision. The Cronins had to go cap in hand to the Receiver and ask for money to buy food and for permission to live in what had been their house! Is the humiliation of the mortgagor all part of the job for these people? Make them feel like criminals? Looks like all the banks are all tarred with the same brush.

Here is another story, at one time it would have been hard to believe – not now – the bank’s behaviour was despicable.

This is from the transcript of the Royal Commission, again from Western Australia this time another bank, the ANZ,  Steinberg is an ANZ executive, Orr is Ms Rowena Orr QC Counsel Assisting the Commissioner:

Orr: So just to recap, ANZ had required the Harleys to sell all their properties?

Steinberg: Yes.

Orr: Including their home?

Steinberg: Yes.

Orr: And their sheep?

Steinberg: Yes.

Orr: And when they didn’t sell the properties fast enough, it sold the properties itself as mortgagee in possession?

Steinberg: Yes.

Orr: And when that didn’t raise enough to pay off the debt, ANZ threatened the Harleys with a bankruptcy proceeding?

Mr Steinberg repeatedly said the bank had changed, and staff are now required to have “emotional intelligence” and use “empathy” in dealing with customers.

But ANZ maintained the threat of bankruptcy against the family for three years, until the month the royal commission began. (ABC)

The full story on the Cronins, which can be found on the Global Farmer, has a chilling similarity to the treatment meted to the Harleys and  Bill Mott. The Cronin farms were valued at $9.4 million. I know the valuer and he is the most diligent of men, the valuation, as it should be, was qualified with recent land sale statistics. The Cronin debt to the NAB was $6 million. The NAB appointed Ferrier Hodgson as Receiver Managers of the Cronin estate.

Ferrier Hodgson took over two years to complete the sales of all the Cronin farms and and for a miserable price of $5.6 million. Valued at $9.4 million sold for $5.6 million. At the time the NAB foreclosed the Cronins had four properties on the market, if those properties and others if necessary, had been sold for their true value it would have cleared the Cronin debt to the NAB and left the Cronins with land and a full complement of machinery to keep farming.

So why on earth did the NAB seize every property and all the plant and machinery? They were never called to account to explain. The fleecing didn’t stop there. To add insult to injury when Ferrier Hodgson sold the Cronins plant and machinery it was estimated on sale day to be worth a conservative $2 million, all FH could manage was a paltry $279,013, just 14% of its value. To make matter worse what wasn’t sold was left in the paddock to rot. You might think that was piles of bits and pieces, tins of nuts and bolts and rolls of old fencing wire, not a bit of it, perfectly good and sound machinery was abandoned by the Receiver Manager, they just didn’t care. Some thieving took place after the sale and a true neighbour of the Cronins took some of the machinery away and put it safely under cover. Eventually a truck, a good truck, was sold to a buyer in Queensland and when the time came for Ferrier Hodgson to produce a truck, they couldn’t! They also left, abandoned a perfectly good header in the paddock and again a neighbour put it safely away to prevent it being further robbed for spare parts. How did FH get away with it? Where was the NAB?

When the final property was sold and the accounts finalised, the NAB wrote off nearly $5 million, how can they account for that? How does the NAB explain in its accounts what appears to everyone I have spoken to as total incompetence? How can you reconcile seizing land worth nearly twice the debt, taking over two years to sell it for half its sworn value and then putting the mortgagor into bankruptcy because of the shortfall? They seized everything the Cronin family had and lost the lot, they seized the Cronins equity and lost it! How can they do that? There was obviously no thought given by the NAB or FH to act in the best interest of the mortgagor, they worked for themselves and they failed. Legal fees during the period came to over $100,000. FH drew a fee of $704,603. Valuation costs of over $30,000. The perpetrators of the dastardly act the NAB paid FH and others for over two years, and then the NAB wiped off the $5 million shortfall created by FH. Stunning stuff.

Surely what the NAB condoned and what Ferrier Hodgson achieved warrants investigation to determine whether the sale prices achieved met with the standard of the Property Institute, remember what is a fair definition of market value?: “ . . . the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arms’ length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.” Again there is a prima facie evidence that the Cronin family was ‘fleeced’.

The answer is there must be a law for the NAB, which is different from the law for you and me. I know full well that if I admitted to ‘fleecing’, stealing by another name, particularly from a position of trust, like being a banker, I would be called to account, and quite rightly too. The first caller would be the police, because I had admitted to the crime of stealing the result would be a foregone conclusion. Guilty as charged and society would expect the sentence to fit the crime.

Being a banker after the police I would expect a visit from Prudential Regulation Authority (APRA), because the remit for APRA is: The role of the Australian Prudential Regulation Authority (APRA) is regulation that promotes prudent behaviour by banks, insurance companies, superannuation funds and other financial institutions with the key aim of protecting the interests of their depositors, policy holders and fund members. As a layman I cannot help but wonder what APRA has been doing over the years of admitted malfeasance by not only the NAB but also of the others like the Commonwealth Bank of Australia and the ANZ. I suspect life is too cosy in APRA to challenge the strength of the major trading banks. APRA have certainly never shown any interest that I am aware of, in the behaviour of the banks when they have foreclosed on hapless farmers.

In addition to APRA there is the much feared and we are told highly talented Australian Securities and Investment Commission (ASIC). The very mention of ASIC is enough to cause the most ‘gung ho’ bank executive to suffer a severe attack on their cognitive dissonance. But again, ASIC have been quiet while the banks have been making hay, as it were. True, they, ASIC, have made their presence felt while the Royal Commission on Banking has been in session by fining the Commonwealth Bank of Australia $3 million for a serious breach of the rules. Is $3 million a big enough fine for a bank on their way to making a profit of $5 billion in six months? It is now patently obvious there is a serious disease running through the banking world in Australia, it’s called selective amnesia, here is an example, this appeared in the News Corp Network on April 13 2018

Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Finally, to restore our faith in our democracy and the laws of the land we have our twenty first century version of the Spanish Inquisition.  Can there be better television for those who have been ‘fleeced’ than to watch and listen to executives from just about all branches of the finance industry, as they guiltily squirm and visibly perspire and sip water to lubricate their dry throats under the questioning of counsel assisting the commissioner? It is said that the peasant women of Paris during the French Revolution, sat knitting, watching the heads roll into the baskets as Madame Guillotine did what she was commanded to do. So far we have had to be content with metaphoric heads —but you never know your luck!

Can any judge at the Spanish Inquisition have asked more probing, withering questions than those asked by Commissioner Kenneth Hayne when he looks up from his notes and fixes someone in his court with his raptor like stare? A comment in The Australian attributed to someone in the finance sector is that the commissioner is, “Scaring shit out of a lot of people.”

Has there ever been  counsel, prosecutors more terrifying than senior counsels Ms Rowena Orr QC and Mr Michael Hodge QC? It has been rare theater. I derived a vicarious pleasure watching as they dissected and challenged executives in the finance industry from banks to superannuation fund managers, to corporate chairs, to those mollusks who derived a living from selling funeral insurance to often illiterate aboriginal people, some of them still in their teens?

Must not forget Albert Dinelli, Eloise Dias, and Mark Costello who are also appearing as counsel assisting the commissioner.

As welcome as the Royal Commission is, it is sobering to realise that no matter what the Liberals may say in the future they were not in favour of calling a Royal Commission into the banking industry. They had to be led by the nose, screaming and shouting before they finally agreed with the Nationals and Labor that there was sufficient evidence to justify the substantial cost. Bob Katter MP, lives and breaths rural Australia. He has experienced first hand the anguish and far too often the tragedy, caused by the corruption of the banking industry. Australian agriculture owes Bob Katter and Pauline Hanson, the Nationals and Labor a debt of gratitude for bringing this mess into the public arena.

What is most disturbing to me, what is now emerging as an undeniable fact, is that there has been massive and systemic corruption in the finance industry in general and in the rural banking and superannuation sectors in particular. One could almost rest one’s case with the admission that fees had been charged to dead people and it wasn’t a mistake —it was deliberate. It was sanctioned with malice of forethought, not by junior staff who may have been frightened to blow the whistle, but by senior staff, managers who derived bonuses for achieving targets and nobody cared that they were living off the dead.

It’s time the banks were made to pay restitution.

This Royal Commission into the banks and other financial services has picked the scab off what has been a suppurating, festering, foul smelling social sore, that for many years has been spreading like an unidentified plague through regional Australia and has gone unrecognised by both state and federal governments and those who represent them, the politicians. The same blowtorch of scrutiny that has been applied to the banks and superannuation industry must now be applied to the banks and their ‘fleecing’ of farmers.

Australia’s major banks reported a cash profit after tax of $31.5 billion for the 2017 full year, up 6.4 percent (compared to 2016). Against a backdrop of subdued economic growth  slowing demand for credit, continued margin pressure and high regulatory and capital costs, the majors have been adept at managing a number of headwinds to deliver a solid result for the full year. KPMG.

Rural debt has increased by 772% in forty years. In 1987 it was $8.6 billion. In 2017 it was $72 billion. In 2007 it was $53 billion, so farm debt has been increasing at the rate of about $2 billion a year. In 2011, there were 157,000 farmers in Australia. There were 19,700 fewer farmers in Australia in 2011 than in 2006, a fall of 11% over five years. Over the 30 years to 2011, the number of farmers declined by 106,200 (40%), equating to an average of 294 fewer farmers every month over that period. Evidence suggests that events such as major droughts have a big impact on the farming workforce. For example, there was a decline of 15% in just 12 months in the midst of the 2002-03 drought.

The biggest part of that debt is owed to the banks, that’s not bad business for the banks, but that didn’t stop them from deciding to abandon a decreasing number of farmers with increasingly bigger debts and close branches and force the decisions on farm budgets and debt to made by the faceless men and women in the big towns or the capital cities, many of whom, we now learn from the commission hearings, had little or no knowledge of agriculture and worse, had in the name of their employer, abandoned all vestiges of a social conscience and treated their customers like criminals. That the services of the Bailiff have been used is reprehensible in this day and age.

There are so many farmers and their families, we will never know how many, that have been mistreated, callously dealt with, even ‘fleeced’ stolen from, by the banks — so many that I am sure it doesn’t matter how long it takes for those who have been so mistreated to have their day in court —they just want it. They want their chance to tell the world the truth about their demise, their fall from grace and how wrong it all was.

Some may not want the full glare of publicity because their stories are wracked with emotion and tragedy, caused by the financial malfeasance of their bank. Many just want the chance to have their say and tell everyone how they believe they have been robbed of assets they worked so hard to accumulate and were rendered helpless by the banks to defend themselves when the bank left them penniless.

Far too many ex farmers, people from the land and of the land, live with the stigma of being known by their peers as a bankrupt or a mortgagor in default. Too many hide away in the city or move to another state after suffering the ignominy of a mortgagees sale. They can’t face up to their old mates, friends from school. There is an awful shame, a heavy burden to bear when one is wrongly judged by ones peers as a failure.

My latest novel ‘Bangalore’ ‘A Fatwa in the outback’, is now available and can be ordered in something like 40,000 bookshops around the world, no I haven’t counted them. Twenty-first century technology has caught up with me and it’s called ‘print on demand’ or POD. It’s a wonderful system and it provides storytellers like me with an opportunity to sell my books anywhere in the world. Apparently what happens is when you order from your usual bookshop, just ask for ‘Bangalore’ by Roger Crook, they contact their supplier and a copy of ‘Bangalore’ gets printed and sent to you or the bookshop, it should all happen in five days or so, depending where you live. This POD system was put to me by a fine bunch of young Australians at a publishing company called Tablo. If you go to their site I’m sure you will find it interesting and as an extra bonus you will also find my books and the opportunity to read a few pages! Try Tablo they deserve our support against the ferocious competition from overseas. ‘Bangalore’ is also available from the usual like Amazon, Apple, Barnes and Noble. The price may vary but it should be around A$20-25. I just put ‘fatwa Bangalore’ into my search engine and the page filled with suppliers.

So what’s Bangalore all about?

‘Bangalore’ is the last of the big sheep stations in the Gascoyne region of Western Australia, other stations have converted to cattle. ‘Bangalore’ is one million acres and about 60,000 sheep. ‘Bangalore’ was settled in the eighteen seventies by Lachlan Sinclair, who left the East India Company and India, soon after the rebellion of 1850s and the ensuing unrest. Like many of this countrymen, Lachlan as a rich trader and a Captain in the East India Company Army, married into Indian royalty, his wife Indira, was the daughter of a Prince. So it was with Indira and Indian workers, including women and children and a small herd of camels, the recently surveyed virgin county of the Gascoyne, that what was to become ‘Bangalore’, was settled by Lachlan Sinclair.

Now, in the twenty first century the meticulous planning of ‘Bangalore’ by Lachlan is being preserved and improved on by Angus Sinclair, a quiet self-contained man in his early fifties. Once married far too young, Angus has a daughter, Rachael, who is a doctor, now living in Sydney and Ewen, a Captain and ‘Black Hawke’ helicopter pilot in the Australian Army, attached to Special Forces in Afghanistan.

Single, content and quite rich, Angus manages ‘Bangalore’ with Alice, a seventy something direct descendant of the original Indian settlers, and her thirty something son, Ali. Gone are the days of single stockmen and married couples providing the station workforce. Angus and Ali use aircraft and an array of modern technology and contractors to replace unavailable staff. Alice is Angus’ house keeper, book keeper and general factotum. Educated by the Sinclair family at a boarding school in Perth and instead of taking up the offer of university, Alices’ choice for her first job was to return to ‘Bangalore’ and be Nanny to baby Angus, then his teacher and then governess. Alice considers Angus, to all intents and purposes, to be her second and eldest son.

The placid life on ‘Bangalore’ is shattered when a young, attractive, lady, an Australian Air Force officer claiming to be Ewens’ fiancé, drives the thousand kilometres from Perth to tell Angus that Ewen has been shot down on a covert mission into Pakistan. He is badly injured and being stretchered to a rendezvous above the snow line on the Pakistan-Afghanistan border. Even worse there has been a serious international security breach and Ewens’ biography and photograph is all over the Internet together with details of his ‘covert’ mission, which has resulted in a fatwa being issued on Ewen, calling for his immediate death.

The family gather on ‘Bangalore’ to wait for news. The somewhat neurotic mother of Angus’ children, Michelle, flys in with Rachael and her very rich lawyer husband, all in his new aircraft. Angus’ father, another Lachlan and a much decorated WWII bomber pilot arrives to be with his son and for a welcome break from his tiresome, religious wife of over sixty years. Then after the press have been fended off, ASIO and the CIA pay them a visit on ‘Bangalore’. They tell Angus that phone intercepts have revealed that at least four and maybe more terrorists are on their way to ‘Bangalore’ to carry out the fatwa. The spooks want them alive, because it will act as a trigger for anti-terrorist raids across the world. Angus realises that he and all the people he loves in his placid world, are being used as bait. Should they stay or should they leave ‘Bangalore’?

‘Bangalore’ is quite a long story, it’s not really a thriller, it’s more of a family saga, but that sounds a bit old fashioned Bronte-ish, but it’s not like that either. It’s not a ‘bang, wham thank you Ma’am’ story either, it’s easy to write that stuff, and if that’s your thing then it isn’t here, but there are real, raw and unexpected emotions bubbling and exploding as the tensions rise. I try to explain why people are who they are, what makes them behave in the way they do? I explore the story of Angus’ father, already a pilot and at age 18 went to Britain on the outbreak of WWII and learned to fly bombers, why did he do that? In contrast to his father, Angus is the first Sinclair to have never worn a uniform and what’s more, never wanted to, why is that?

After the visit from the spooks, a mobile home and several four wheel drive vehicles arrive together with some scruffy, unkempt and sinister men. Their cover is that they are a shooting party to help keep feral animals under control, they look like it too. In reality they are the SAS reception party out to catch feral terrorists.

If I write any more I will have done something I can never deliberately do and that is write a synopsis of a book. So if that whets your appetite for what I hope is a good yarn, you will have to buy a copy and help get me out of the workhouse. As I said at the beginning my other books are there on Tablo to browse. If you want a hard copy, send me an email, $20 a copy plus PP.

Roger