Fam­ily’s farm lost to bank

Countryman - - NEWS - Shane Wright

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.”

Pic­ture: AAP

WA Ru­ral Fi­nan­cial Coun­selling Ser­vice chief ex­ec­u­tive Chris Wheatcroft, cen­tre, gave ev­i­dence.

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