Christopher W Priestley & Claire M B Priestley "Salt Glen"

6 March 2017

RE: SUBMISSION - Senate Inquiry into regulatory framework for the protection of consumers. including small businesses, in the banking, insurance and financial services sector ·

Introduction

We thank the Senate for initiating an inquiry with very relevant terms of reference that reflect the current crisis decent Australians are facing due to a lending culture embedded with deceit and complete lack of connection to human life. We hope this inquiry is not just another banking inquiry that shows how banks destroy people financially and emotionally and victims still find there is no justice and no financial compensation. Often these inquiries leave the victims more traumatized because they have exposed their story triggering horrific memories with no positive outcome.

Banks and any bank employees that have committed illegal activity need to be exposed and charged and compensation must be enforced. Whistleblowers need to be protected so that any collusions between banks and prospective buyers prepared to participate in unethical sales for financial advantage is exposed.

We are siblings that grew up on our family owned land that ran a cattle, cotton and wheat enterprise at Carinda on the Macquarie River near the junction of the Castlerea h and Barwon rivers in between Brewon Station and Mirawlyn Cotton -

The National Australia Bank chose to destroy our viable farming business and knowingly used our creditors to the banks benefit. This submission is also done for the intention of seeing our creditors gain justice for the financial stress the NAB put them in, our creditors also became victims of the actions NAB chose to take to ensure our farm stopped functioning and suffered irrepairable financial stress.

In 2004 we inherited 7,171 ha including the irrigation section of the family business, 2 Macquarie river water licences and one house. We also inherited the family debt of about $2.2 million. At the time we approached the NAB for finance we were worth approximately $5 million Net. 9 years later we found ourselves homeless and financially ruined with unpaid creditors and a claim by NAB for about $1 million. In 2004 within 9 days of approaching the National Australia Bank (NAB) at Walgett to refinance this family debt and to provide capital to grow cotton and other associated farm running costs the NAB had offered us a $3million loan based on our land and water licences being valued at $7,300,000. The NAB offered us this loan when the Walgett Shire Council was an Exceptional Circumstances (EC) Drought Declared area. At this time EC assistance included interest rate subsidies that banks received directly from the NSW Rural Assistance Authority.

The NAB letter of Offer dated 18 August 2004 stated "I believe your goals of committing to irrigated agriculture by buying your own farm to build your long term wealth, can be met". On the contrary when we could build our wealth and be debt free the NAB refused to finance crops in particular irrigated cotton at $1000 per bale.

Our NAB loan history ends in October 2013 when the NAB finalized the sale of our home and land via a mortgagee in possession sale by tender - who also trade as Budvalt Pty. The NAB treated us like criminals and evicted us from our only home and land with the assistance of sheriffs, security guards and locksmiths. This eviction took place after three years of NAB continually using unethical tactics to gain possession of our home and land, some tactics are highly likely to be fraudulent if the government ever chooses to investigate them.

For some reason the NAB which promotes itself as being the leader in Australian agribusiness lending was determined to see us removed from land that was known for having highly valuable water licences because of the position of the land on the confluence of the Macquarie, Castlereagh and Barwon rivers with similar opportunistic water access and capacity to that of Cubby Station.

From 2009 onwards the NAB refused to provide our business finance for crop production, including when cotton was at a historical high of $1000 per bale and moisture levels in 2010 for wheat had been the best since the year 2000.

The NABs refusal to renegotiate the long term loan led to a default which enabled the NAB to apply penalty interest rates which then enables banks to serve enforcement action for possession via Farm Debt Mediation.

The NAB CEO Cameron Clyne and the NAB agribusiness CEO Khan Horne breached our contract when they referred us to Farm Debt Mediation for our complaints to be investigated. The ASIC guidelines for the EDR section of the Code of Banking Practice does not include Farm Debt Mediation for complaint investigation. The EDR section of the Code of Banking Practice is to be a free service, Farm Debt Mediation is not a free service.

The NAB were very aware that we had been blessed with the kindness of wheat contractors to ensure we sowed a wheat crop in 2010 which was most certainly a 1.5 tonne to the acre crop due to incredible moisture levels. The NAB gained the benefit of this crop at no cost to the NAB and then refused to give us access to this income to pay these and other generous creditors.

From 2010 - October 2013 whilst we tried to convince the NAB to look at all logical debt remedies such as growing crops or equity partnerships and then tried to defend ourselves in court our business accumulated penalty interest of about $4million. Instead of being debt free with surplus capital as the expert report referred to below shows we have found ourselves completely broke with NAB claiming we still owe them about $1 million as the mortgagee in possession sale did not cover the total balance NAB have claimed we owe.

Attachment A - Confidential Attachment - 2012 expert report on financial impact of NAB actions on River Staation Partnership operated by Priestley's "Glenacre" Walgett states:

"The lack of financial resources has proven to be very costly. One that I believe NAB must take at least some responsibility for if it as a leading rural lending institution in Australia truly believes it understands the lending environment it operates in"

''The net operational surpluses that could have been realised if operating capital had been forthcoming to the River Staation Partnership from 2009 until the present time is in the order of $3.67 million for grain enterprises and $5.42 million for the irrigated cotton enterprise. In total these equate to a figure of $9.09 million."

''This is not an insignificant amount and one that I would conclude would have been sufficient for the River Staation Partnership to meet its obligations with financiers and other creditors, pay down debt levels and allow it to progress to a more secure basis of operating into the future with greater equity."

"This report has not focused on the grazing enterprise as part of the River Staation Partnership. However the grazing enterprise has a production base spanning some 5114 ha and would offer cash-flow support to the grain and cotton enterprises when appropriately stocked and managed."

Australian Bankers' Association 2004 Code of Banking Practice misleads the Australian pubic and farmers:

As reported in the three Priestley submissions 394,397 plus supplementary submission 397 to the Senate inquiry into the performance of ASIC, the Bank CEOs governed the 2004 Code of Banking Practice that claimed the Code Compliance Monitoring Committee was independent, these CEOs' knew that the Code had been voided by an unpublished contract (the ABAs' Code Compliance Monitoring Committee Association Constitution of February 2004) that it was ~eNAB response to our submission on behalf of former director - is not sufficient to answer our allegations made three years ago, the NAB forced us into Farm Debt Mediation and failed to investigate our complaints. (Attachment B)

Our business is a perfect example of how the Bank CEO's ensured that when a bank decides to foreclose the customer would lose their rights claimed in the bank contract, and the bank would quickly put the customers' case into a legislated court forum.

Unbeknown to us, Cameron Clyne, the NAB CEO who we had made complaints to in 2010 (as was our contractual right to do so under the Code of Banking Practice) had engaged in a secret unpublished contract that changed the terms of our contract. As CEO of the NAB, Cameron Clyne was part of the Australian Bankers' Associations' 2004 "Code Compliance Monitoring Committee Association Constitution" (CCMCA).

As a committee member of the CCMCA Cameron Clyne was aware that the terms of our contract had been changed and he has willfully engaged in the deception of the CCMCA's Constitution which ensures the CCMC are not independent investigators as the contract claims. Cameron Clyne has intentionally deceived us by refusing to ensure our complaints were investigated and advised us that "farm debt mediation is the proper forum for the resolution for these matters". We feel this is a case of fraud committed by the NAB CEO against us and our business.

In late 2012 when we became aware of the CCMCA constitution the Supreme Court had already granted default judgment. In December 2012 we brought this secret document to the attention of Justice Garling when we attempted to have a new defence heard based on extraordinary evidence. However we were unable to pay a lawyer to represent us and our case was not even heard due to errors of law. The NAB lawyers did not disclose to Justice Garling that this constitution meant that when the NAB adopted the Code of Banking Practice in May 2004 it had no intention of adhering to the Code because the NAB CEO had already engaged in the February 2004 constitution that had changed the terms of the contractually binding Code of Banking Practice.

Prior to our eviction on 31 January 2013 we wrote to NAB CEO Cameron Clyne and the present NAB Chairman Ken Henry and the NAB directors requesting them to investigate our complaints and our complaint about the misleading Code of Banking Practice, they did not respond and permitted us to be evicted and made homeless. These directors knew the bank had engaged in a fraudulent contract that was used to gain financial advantage over us. For this deception we require compensation in full for the financial loss and severe mental stress we have endured.

NAB Reconciliation Action Plan

inal Reconciliation programs. is a and was a NAB director for 12 years. also promote their commitment to Aboriginal Reconciliation however neither assisted us when we asked the NAB for assistance to do an Aboriginal community partnership with programs such as crime prevention programs with the option of an equity partnership or total sale. NAB refused to wait for the feasibility study the Walgett Gamilaraay Aboriginal Community Workers' Party 0,NGACWP) had commenced, rather the NAB commenced action for possession of our home and land in the Supreme Court. The land we lost was magically located where four river systems meet and also joined Geera Cotton the site of an Aboriginal massacre. The local support for this proposal to see prime agricultural land to be returned to the local Aboriginal community of Brewarrina and Walgett was incredibly positive with a vast scope for programs.

In July 2011 we wrote to Cameron Clyne and asked him directly for assistance from the Indigenous Affairs section of NAB so we could have all possible assistance to see this proposal come to fruition. The NAB refused to give us access to their Reconciliation Action team.

We suggest the Senate Committee question~ bout his role as the WGACWP lawyer in this proposal. We suggest the committee ask what advice he gave the group regarding this proposal and if he advised them to ensure the feasibility study was factually correct by asking us to comment on the feasibility study and to ensure all options were considered. Disappointingly the WGACWP refused to show us the feasibility study or advise us of their decision whilst we tried to delay the court proceedings so the group had a chance to make a decision. We had to write to the Hon Jenny Macklin MP, Minister for Indigenous Affairs to find out the outcome of the study and we then had to do a FOi to actually see the report, this feasibility study was very flawed.

WGACWP advised us in February 2012 that was their lawyer. It is very concerning that a NAB director was representing an Aboriginal group our business was in discussions with about a possible equity partnership or total property sale option when we were finding the NAB so unwilling to assist this proposal, refusing to discuss the options, refusing to wait for the feasibility study.

As shown above our NAB loan history has many layers of unethical and highly likely fraudulent tactics. As the attached expert report reflects rather than trying to find justice we should have been running our farm. a. any failures that are evident in the:

i. Current laws and regulatory framework

As to date banking inquiries have failed the customer and caused them more grief. A Royal Commission must go ahead and compensation must be paid to the victims. Our case has been well reported on publicly and our claims since we were evcited and our claims are not new, however our many submissions and complaints to politicians such as Barnaby Joyce and Kelly O'Dwyer have achieved nothing. Treasury referred us to ASIC but ASIC refused to investigate our complaints and closed out file. APRA did not address our complaints. The FOS refused to investigate our complaints. The NSW Rural Assistance Authority will not answer our questions about their knowledge of the CCMCA's unpublished constitution and their role in granting Farm Debt Mediation certificates when often banks are breaching bank contracts and using this forum to gain possession of farms rather than for complaint investigation. NSW DPI will not investigate this issue which could confirm that the NSW government is part of this scam to enable banks to put farmers in the court forum which they can never have justice in because they cannot afford to defend themselves against a bank with limitless finance to persecute the farmer. Please see Attachment C - letter to Minister Blair

b. the impact of misconduct in the sector on victims and on consumers

Impact of NAB CEO Cameron Clyne and NAB Agribusiness CEO Khan Horne refusing to investigate complaints:

In 2010 these two CEOs refused to investigate our complaints about the two agribusiness managers and refusal to ensure our farms kept functioning and benefitted from the high cotton prices and the incredible seasonal changes that could see us repay the debt and have surplus capital.

Two years later in 2012 in the Land Newspaper, Khan Horne promoted "NABs Agribusiness team set for all seasons" and stated it was the first time in a decade that Northern NSW had full water storages, this statement contradicts ull knowledge that the Priestley farms water storage had been full in 2010 and had access to water for three cotton crops from January 2010 onwards. Attachment Dis this NAB promotion in the Land which clearly reflects the NABs blatant disrespect for our business while they encouraged other lenders to take advantage of the seasonal opportunity to trade out of debt. Because of our location we had more access to water for cotton in 201 O onwards than most growers and our letter of complaint to Cameron Clyne in 2010 detailed the huge potential to trade of debt.

The NAB financed Cubby Station to grow cotton in 2010 but refused to finance the Priestley farms. Justice Garling made mention of this and NAB's failure to investigate our complaints in his judgment of 10 December 2012 Attachment E

The list of incomprhensible tactics taken to destroy us financially and emotionally goes on:

Khan Horne and were aware that our father Gordon P~ was dying in Brewarina Hospital and that we were isolated by flooding __ - refused to adjourn the NAB's case for possession against us. We had to say our last goodbye to our father on the phone from Sydney and the NAB sent their lawyers into court on February 20, 2012 and told the court we had plenty of time to prepare our defense and thus should have possession of our farms knowing our father had passed away.

I went to the Dubbo NAB Agribusiness section of NAB in January 2012 when my father was dying and asked them for some money to live on, the NAB Agribusiness managers referred me to who refused to help me and told me to go to Centrelink. At no stage did the NAB offer me hardship assistance of exceptional grief and natural disaster declarations of our area.

In April 2012 the NAB re-served the Statement of Claims for Possession on us whilst we were on our way home from Sydney after being in court. The NAB used a serving agent who is also a private detective by the name of - put these Statement of Claims in the trees on a public ro Station. Brewen Station is owned by the business that purchased our farms in 2013. We have never seen the outcome of our complaints to the NAB about the manner in which served these documents that caused further distress and humiliation to us and felt very harassing.

The NAB refused to hand over the sale contract between them and the - which meant we could not apply for Centrelink income support.

~harging us penalty interest rates until the transfer of sale to - went through almost 9 months after eviction. The was given access to the land that was still in our name at least 3 months before the sale of transfer had been completed.

The NAB refused to assist us in any way but they ensured that our MLC Life insurance was paid up until we were evicted. In 2004 when NAB offered us $3million it was on the condition that we took out life insurance.

The land we owned was being cleared without permits - whilst it was still in our name. We reported these incidents to the Office of Environment and Heritage.

he selling agent from made $110,000.00 from the loss of our home and land, this can only'be viewed as cruel to see some outside agent gain financial advantage whilst we didn't receive a cent from this sale. Whilst received $110,000.00 from the sale of our home we couldn't even obtain Centrelink income support because NAB refused to hand the sale contract over. At this time we were still exceptionally stressed from what NAB had put us through and we were not mentally or physically ready to rebuild our lives and seek employment.

We were very fortunate that after the NAB made us homeless we could live on our deceased father's farm and have access to a house and food and water. If we did not have this opportunity we would have been living on the street begging people for help.

Emotionally - The pain of losing our home and land will be with us forever, the pain gets worse as the years go on, the realization of what we have lost and the harassing tactics taken by the NAB to destroy us are always with us. The tactics taken to ensure we were made homeless and isolated in our own community will haunt us until we die.

Financially - Our credit rating has been wrecked by the NAB, we feel terrible that we have been unable to pay creditors, we didn't receive any proceeds from the sale, we had no offer of relocation assistance from the NAB whilst they gained financial advantage over us by continuing to charge us penalty interest even after we were evicted and the business was running land still in our name.

The agisted cattle were removed so could take over, this agistment income should have continued until the land was actually transferred to the

Environmentally -

The ABC's Lateline report titled "Battle for the Bush" shows what happened to the land since the NAB sold our land. We were always passionate about the environment as committee members for the Lower Macquarie Community and Farmers Group and also assisted in the Department of Environment and Climate Change environmental study of th~ Lower Macquarie but the NAB showed no respect for our commitment to the land we grew up on.

Dr Ken Henry claims he is passionate about conservation, Dr Henry should come and visit the land we lost and see Glenacre, Larrimah, Riverview and Wombullion and Brewon Station for himself.

Socially - The NAB chose to make us financially ruined, the social impact has been horrific, searching for employment is difficult as inevitably the story of the NAB's unbelievable treatment of us comes up in every interview.

The brave consultant who dared to challenge the NAB on their responsibility for the financial impact their choices led to our business ending up in court rather than producing food was of enormous comfort to us as was the media support such as when were on the cover of the Good Weekend. However all the support in the world has so far not seen these banks made accountable. d. the culture and chain of responsibility in relation to misconduct within entities within the sector

Banks initiate financial ruin of customers and are supported by other entities who also gain financial advantage from the downfall of customers especially farmers who were very viable. Selling agents need to take a social responsibility ~ginspired by making a quick buck. We are very disappointed in - or participating in the sale of our land after we had been removed from our home in such traumatic circumstances and even more disappointed that he couldn't even contact us and offer support or financial assistance from the proceeds he made out of our home and land.

To date we have never seen the tender documents lodged by potential buyers, (we do not know if the NAB accepted the highest tender offer)the invoices for repairs that NAB claimed took place, reports by mechanics and agronomists, valuations used to sell the land and water licences. It would have been nice to see a rural property agent support a farming family under seve·re stress.

Our land and home was advertised by invitation to tender. The advertisement was incorrect in land size (1200 acres less) and cultivation size (1000 acres less). The advertisement failed to mention the location of the farms benefitting from the back up water of the Barwon and Castlreagh rivers and the Marthaguy Creek, this location made these Macquarie river water licences extra valuable. The advertising failed to emphasize this natural asset.

The fish farm licence was not advertised.

The NAB refused to fill the water storage, a selling agent told us that the lack of water to offer a potential buyer to guarantee a cotton crop could have reduced the value of the sale by $1 million. These facts were brought to the NAB's attention however the NAB refused to amend the advertisement and extend the tender time limit.

We do not know what records relied on to advertise the farm size and cultivation size less than our records show. We do not know what documents relied on to explain the true value of the water licences to prospective buyers and their superiority over other licences such as the upstream licences at Carinda that rely solely on Macquarie river water.

e. the availability and adequacy of:

i. redress and compensation to victims of misconduct, including options for a retrospective compensation scheme of last resort

There must be accountability served onto banks and compensation demanded to ensure banks will treat loans fairly. If foreclosure and eviction and homelessness is the outcome banks choose then they must be made pay for relocation and rental assistance/food and electricity assistance for 12 months. Banks must be made pay the customer back at least the value of the equity the customer had in the property at the time of the loan.

The NAB took our equity, our home and our viable farming enterprise and its income. For this we need compensation.

II. legal advice and representation for consumer and victims of misconduct

Legal advice and representation is non-existent because the customer cannot afford such assistance. Free tribunals and access to free legal representation must be available so customers can have justice. This was the original intent of the Code of Banking Practice until the Bank CEOs' manipulated it. f. the social impacts of consumer protection failures in the sector, including through increased reliance on victims on community and government services

We were humiliated and threatened with Police action if we didn't leave our home when the NAB agents arrived to evict us. The NAB then sold our farms to one of Australia's largest agricultural corporations. There is no protection for consumers and in our experience there were no community services available to us when we were evicted.

As evicted farmers it appears we were not eligible for any support from the local rural financial counselling services, presumably because we are not primary producers from the moment of eviction.

NSW Farmers initially tried to support us in 2010, however we were then abused by a NAB officer for contacting NSW Farmers. In February 2012 we contacted NSW Farmers to ask Fiona Simson to ask her for help to see if she could get NAB to adjourn the case when our father was dying, disappointingly we did not hear from her.

There has been enormous support for drought affected farmers which we fully support but there has been zero support offered for the farmers made homeless by banks.

We would like to take this opportunity to thank Senator Williams and his staff for always being kind and helpful when we have needed support, we need more people like Senator Williams in politics. h. any related matters

Unlike most evicted farmers we are fortunate that we had a home to go to when we were evicted, thankfully our deceased father Gordon Priestley still owned the original family farm "Salt Glen".

However Rural Bank turned out to be just as ruthless as the NAB. Rural Bank served Farm Debt Mediation on our father's estate within months of him passing away. Rural Bank refused to pay for sheep dip and worming treatment, however expected the loan to be repaid whilst we battled to save the sheep. Another example of banks engineering defaults by stopping logical farm income. Rural Bank showed no respect to animal welfare in this case. Rural Bank put obligations on the estate to repay the debt that had still not completed probate. Farm Debt Mediation obligations can be so tough that the deadlines can be impossible to meet. Rural Bank threatened to sell "Salt Glen" within 3 weeks when $50,000.00 was the total owing. The estate had to immediately sell silos and machinery to repay this. Like the NAB, Rural Bank seemed determined to have the Priestley family removed from their last only remaining farm at Carinda

We would like to take this opportunity to thank the creditors who have supported us, who are decent small businesses trying to make a living and who should have never been put in a position of financial stress due to the NAB deciding the Priestley family had to be removed from their land and home. The support we have had from these creditors is an example of true Australian bush culture where the local communities helped each other out when life got tough, sadly with the introduction of corporate farming this culture is dying out as is shown in the ABC's Lateline program "Battle for the Bush".

Sincerely,