My name is Claire Priestley, on behalf of my brother, Chris Priestley, I would like to share our experiences with one of the leading banks in Australia, which damaged our properties and life. We have filed complaints with the bank’s directors, the regulators, and the government at all levels, from state to federal government, but we are still waiting for answers.
This is our story.
Our grandfather, William Priestley, drew his property, “Salt Glen”, in a ballot in 1908. It was a part of Brewon Station between Brewarrina and Walgett.
His son, Gordon (our father), took over the property in 1950 and was dealing in sheep and cattle. He then purchased 4 more adjoining properties on the confluence of the Macquarie, Barwon, and Castlereagh rivers and developed one (Riverview) as a cotton farm in 1990.
In 2004, my father transferred 3 properties to Chris and me with the debt of approximately $2M.
Chris and I signed an agribusiness loan contract with the leading bank in 2004, which meant the bank had to comply with the 2004 Code of Banking Practice. This Code establishes the bank’s key commitments to farmers on standards of practice, disclosure, and principles of conduct. The industry’s Fact Sheet stated, “the Code is not legislation but when your bank adopts the code it becomes a binding agreement…” When our bank adopted this Code, we had a right to believe we would be fully protected.
In 2006, we negotiated additional funds from NAB to purchase ‘Larrimah’ and further working capital. At the time, we were suffering from the Millennium drought. When the drought continued, the bank still provided us with additional capital to grow crops in this drought.
With a Millennium drought and limited experience or support, our decision to use this leading agribusiness bank made good business sense.
The Seven Sins
The first occurred in 2008, whereby the bank directors breached clause 25.1 of the 2004 Code. Our forensic accountant noted that the damages caused to us were about $9M. However, during the Millennium drought, the bank and its directors should have known we could not afford to pay the interest, nor repay the debt. To lend in a drought and not support us when the seasons changed and cotton prices were the highest on record in 2010 and choose foreclosure as the only option, has brought us to believe that we were sold a predatory loan.
The second occurred in 2010. In May we filed a verbal complaint with Fiona Worboys at the bank’s Narrabri office and a written complaint with Cameron Clyne, NAB’s Chief Executive. James Stafford then claimed Clyne told him to resolve our complaints at Farm Debt Mediation (FDM). We did not accept FDM as the appropriate forum and the decision by Clyne and Stafford was unconscionable. We attended FDM in July 2010 and lost any prospect of having the CCMC comply with dispute resolution procedures in clause 35 of the 2004 Code. Mr. Clyne, by directing us to FDM, obstructed justice and abused the due process.
At FDM, we entered into a Heads of Agreement. We found the bank would not deal with complaints or misbehaviour. Regardless, under-resourced we agreed to repay $1M to the bank by 31 January 2011 or sell our farms by 30 April 2011, which was a threat. It meant the bank did not reach the agreement in good faith, as it was in breach of the Code and concealed the CCMC Constitution throughout the mediation. It seems extraordinary that the bank stated in the code that it would provide a better-informed decision about its financial services and products by providing effective disclosure of information (p.4). We could not meet these mediation commitments due to the November 2010 floods (Walgett was declared a natural disaster area between 2010-2012 4 times) that devastated wheat crops all over eastern Australia.
We were under pressure from the bank to avoid having to go to court and therefore agreed to repay the debt within 9 months. Due to our inability to service existing debt, we reluctantly accepted the short period to turn our business around. The FDM process was unconscionable when we were in default of only $20,000.
By attending FDM, the bank would have understood it was then impossible for us to obtain credit to sow and harvest crops. The bank, therefore, placed us in a position where we had an impaired loan.
The events of 2010 exposed NAB to problems that would not have happened to a prudent and diligent lender. Whilst the bank’s senior executives and directors might argue it was our fault to accept additional funds, the manner in which they treated us during the next three years suggests the bank may have been so careless it could have destroyed our business, which is malice.
When we signed the loan contract in 2004, Mr. John Stewart was Chief Executive, and when we filed complaints in May 2010, Mr. Cameron Clyne was. Both were Australian Bankers’ Association’s directors and were later found to be administrators of the CCMC Association’s Constitution.
The third occurred in December 2012 and April 2013 when we attended the Supreme Court and the Court of Appeal. Prior to attending the Court of Appeal, we filed 6 complaints with the bank directors. At this time, NAB was a leading Australian corporation and we had no money, but now we had to resolve disputes in court. We were self-represented in court on both occasions and were not successful. After a court of appeal, the bank sold our home, land, and water licences. We were evicted by the Sheriff, security guards, and locksmiths, and made us homeless without relocation assistance. Our home and land were sold by tender to our neighbours, we did not receive any proceeds from the sale. We were treated as criminals when the bank’s behaviour appears criminal to us.
The fourth occurred between 2012 and 2014 when we filed complaints with the CCMC and the bank’s directors. The CCMC did not deal with our allegations then we filed complaints with the bank’s directors, who were licensed and did not comply with the Corporations Act. Shortly after this, the bank sold our farms.
In 2014, we re-filed complaints with the CCMC, who, again, did not investigate our complaints, nor comply with the code.
The fifth occurred in 2016 when, for the third time, we filed complaints and allegations with the bank’s directors and the CCMC. On this occasion, we had alleged several issues with the bank. These failures by the bank and the CCMC would be due to either poor practices or a lack of attention to the rule of law.
The sixth occurred in June 2017, when, documents provided to the senate inquiry into consumer protection in the banking, insurance, and finance sector (submission 107) stated ‘Once a bank subscribes to the Code, it becomes mandatory”. At this time, the banks received 1,130,037 complaints, and 101,703 were not dealt with in standard time. We now believe that NAB senior executives and directors did not comply with the Code nor the Essential Elements of complaints handling in the AS 4269-1995 Standard since October 2004.
The seventh occurred in 2018 when documents were discovered through the Office of the Australian Information Commissioner. The documents we obtained provided evidence that NAB Hayley Guest and CCMC Ralph Haller Trost changed the 2004 Code of Banking Practice when investigating our complaints. These practices by CCMC’s senior executives and directors of the bank appear to be criminal.
On 5 March 2020, our solicitor obtained ASIC’s correspondence noting banks must comply with the code in place when loan contracts were signed. This supports our view that the bank had to comply with the 2004 Code. However, our bank and CCMC changed our Code for the 2013 Code which was possibly one of the bank’s greatest crimes. It meant the directors could avoid being prosecuted for predatory lending.
We have suffered from the bank’s having:
- sold us pure assets or predatory loans,
- failed to investigate complaints filed with Mr. Clyne,
- failed to investigate complaints filed with Mr. Andrew Thorburn,
- failed to comply with relevant industry Acts,
- directed us to FDM without complying with due process,
- adopted the ABA’s 2004 Code without full disclosure, and
- not taken reasonable steps to require ABA to publish a statement the CCMC was bound by the Constitution.
During the past 12 months, we have identified more concerning practices by National Australia Bank’s directors. When we signed loan contracts in 2004, we felt safe, however, we now feel betrayed by the bank and the regulator because farmers cannot resolve disputes free of charge.