Family’s farm lost to bank
ANZ sought to default a WA farming family just weeks after its patriarch suffered a heart attack and was sent to Perth for surgery, the banking royal commission has been told.
The commission heard how ANZ effectively gave the Harley family, which had farmed the same property for 100 years, just one day to vacate their property after failing to repay their entire debt.
An internal note written by the bank described Janine Harley, who had written to ANZ asking it to take into account her husband Stephen’s ill-health, as “quite difficult to deal with as she becomes very emotional”.
The commission is spending this week looking at lending by banks to the farm sector with much of the first two days of evidence taken up by the problems left by ANZ’s takeover in 2010 of the Landmark financial services firm.
The bank found many of the Landmark loans were not of the quality expected by ANZ.
One of those loans was held by the Harley family which had been on the same property for 107 years.
The family had a $2.1 million loan and a $450,000 overdraft but by the time of the ANZ takeover they had suffered five consecutive years of losses. In 2011 ANZ offered them more money which was due to expire in early 2012.
In response, the family subdivided their property in a bid to sell off some land then their sheep flock. The auction of the sheep failed to attract bidders.
Mr Harley suffered nerve damage to his back in late 2012 while in May the next year Mrs Harley told ANZ of her husband’s heart attack.
Just weeks after Mrs Harley told the bank of her husband’s heart attack, she received a letter saying the family was in default.
Senior ANZ bank official Benjamin Steinberg said even though there was nothing wrong with the letter it probably should not have been sent so soon after Mr Harley’s health issues.
“I think it would have been better if that note would not have gone out when it did,” Mr Steinberg said.
Counsel assisting the commission Rowena Orr pressed Mr Steinberg on ANZ’s actions which required the Harleys to pay out their outstanding loans by March 31 in 2013.
They were also told if they could not repay then they were to hand over vacant possession of the property the following day.
Mr Steinberg said while legally the Harleys had just one day to leave their lifelong home, they had been given effectively six months’ notice of what would occur if they failed to repay their loan.
That prompted Commissioner Kenneth Hayne to question Mr Steinberg’s view that 24 hours to vacate a property was reasonable.
“That’s premised on the understanding that the client’s got some choice, the customer’s got some choice. What choice did the customer have, except to sign on the terms offered by the bank,” he said.
Also, the commission was told ANZ believed it could make $6 million by lifting fees on farmers caught up in the bank’s $2.2 billion purchase of Landmark Financial Services.
The evidence came as the Geraldton-based chief executive of the WA Rural Financial Counselling Service, Chris Wheatcroft, told the commission that a major problem for many farmers was the way some banks dragged their feet on making important financial decisions.
But too often banks took too long, delivering farmers unnecessary stress.
“At the time of seeding, people can still be debating with the bank in April and May about how much money they’ll get,” Mr Wheatcroft said.
Concerns have been raised about the mental stress placed on farmers by banks.
Mr Wheatcroft said farmers often found it difficult to understand why they struggled to get finance when a neighbour might have no trouble.
“That sense of injustice of what is happening,” Mr Wheatcroft said.
“It doesn’t make them cry. It makes them want to tough it out. Makes the more intent and more likely to battle the bank.”
WA Rural Financial Counselling Service chief executive Chris Wheatcroft, centre, gave evidence.