How my bank ruined me by their handling of my financial difficulties that were caused by the GFC. & my case against nab through AFCA.
All my life in agriculture, over 50 years, I survived many things beyond my control - numerous floods, fires and many droughts. But I could not survive the way my bank chose to deal with my business during the GFC. They forced me to sell assets well below market value, appointed receivers, failed to listen to any of my proposals to retain the business and instead engaged in a fire sale of all my assets. I was a long-time client. They destroyed me to get their money back. At least with natural disasters, nature leaves you with something to start again. Banks have more power than nature, maybe more power than even God. They disregard the lifetime of blood, sweat and tears you’ve put into your business, and leave you with nothing.
A lot of farmers and businesses suffered as a result of the GFC.
Many lost their life’s work through no fault of their own.
Many also suffered mental breakdowns, severe health problems, and some took their lives.
The banks were ruthless.
The government gave no assistance even though they saw people and businesses were struggling.
People’s lives were destroyed! Their businesses destroyed, and the banks left many of them with nothing.
The result? nab1farmerszero.
Hi, I'm Peter Johnson
Like most people making a living off the land, I've worked hard all my life. I chose a life on the land. I started Jackerooing after leaving school in the 1960s, working for Tutt Bryant, the machinery people, on their cattle properties, then eventually buying my first small property with my Dad. I slowly and steadily increased what I had by farming cattle, sugar cane, and then mangos. Over those 40 odd years both my bank and I did well - until times got difficult, and they let me down. They not only let me down, they took everything I had worked for, 50 odd years in agriculture!
My story
This is my story of how I was treated by the National Australia Bank during the GFC, and my attempt to make them accountable for the way they treated me through AFCA (Australian Financial Complaints Authority), which was set up by the government to handle further complaints after the Banking Royal Commission.
I’d like to take you on my journey of how I lost everything due to the ruthlessness of the National Australia Bank during the Global Financial Crisis (GFC).
Because of the GFC, the value of my assets were virtually cut in half. With my asset value worth so much less, my debt was unacceptable to the bank, and their advice was to sell assets to reduce the debt. This I did starting around 2009. It was an impossible task due to very low returns from property sales, high interest rates and penalties imposed by my bank.
The bank acted unfairly and unreasonably, putting pressure on me to liquidate my assets or they would appoint receivers and do it for me. They, of all people knew the extreme difficulty to sell assets in the property market created by the GFC. During one of the initial meetings I had with the bank, it was a telephone hook up with the banks manager handling my case in Brisbane, the banks local manager from Townsville at my home on the property, and my wife and I. At that meeting the banks Brisbane Manager, Mr. Bruce Starky, his opening remark was, " Mr. Johnson, the position you are in is not of your doing, it is not from bad management or reckless spending". That's how it started and from then on the pressure was on to sell assets or they would do it.
Nab did eventually sell me up, and left me with nothing. I don't know how they got away with what they did. Things like, selling an asset of mine, ( A 1200 acre block, part of my property, that contained my home, a 2 story brick house, 7 bedrooms, pool etc, and 2 other dwellings, cattle yards, 2large machinery sheds. ) for $950.000 that I had a current Heron Todd White valuation of $2 million that they were aware of. Also, refusing an offer of $1.2 M for a Lot that I was in the process of developing into 100 acre blocks to sell. All proceeds going to the bank, and then selling it for $700,000. to the same buyer who had previously offered them $1.2 M. Also, refusing my refinance offer from another Bank, and then selling it for over half a million less. When AFCA looked at my case after, they said it was ok for the bank to do that. ASIC looked at this in my submission to them and just gave me pages of reasons why they couldn't do anything. They all stick together. No body wants to take on the banks.
After the Banking Royal Commission, the government set up a body to investigate further complaints, it was called AFCA. Australian Financial Complaints Authority. I sent them all the paper work and records re nabs treatment of my case, and they agreed to give a judgement on it.
My case manager with AFCA, a Mr. Mick Nolan said, Mr. Johnsons case is unfortunate, and Mr. Johnson has suffered financial hardship due to reasons beyond his control. Even with statements like this, they destroyed me.
There was no confidence in the finance world, there were very few buyers for my assets, and the sales that I was forced to make, were a fraction of their value before the GFC.
Just before the GFC hit, I was looking to consolidate and retirement, and was subdividing part of my property into 100 acre blocks that were selling, and reducing my debt. The banks refusal to allow me to reinvest some of the proceeds generated from these subdivision land sales on our home property, to fund more subdivision, to make available more 100 acre blocks, to sell and reduce my debt, ended the best chance I had to survive.
The fact that I had been their client for approximately 50 years, and my father 50 years before that counted for nothing. I was not the only one of their clients that received this treatment during the GFC and leading up to 2014.
The years working with cattle.
What happened?
The bank's appalling conduct during and after the GFC
Nab had been pressuring me to liquidate assets, this I was doing in a very difficult market. April 2011 Nab advised me they were considering recovery action. Nab was very keen to have a mediation meeting, so I agreed, it was held on the 2nd Sept 2011, in Townsville in an unused CSIRO conference room. They flew up from Brisbane on a morning flight, three or four of them. We spoke about many things, mainly selling assets and reducing debt. As the afternoon went on, the pressure increased to achieve an outcome, as they had a plane to catch back to Brisbane that afternoon. They went into another room ( they had brought a printer with them) and printed up a document, and they said that if I signed this document they drew up, Nab would give me more time, a year to settle the debt. I signed the document to avoid Nab foreclosing, and it gave me another year. I see now that AFCA has given their decision in favor of Nab, they refer to that document that I signed, as the DEED, I understand now that me signing It, gave them the right to do what they did. I can now see why the bank wanted to have the mediation..
Ten years of sugar cane farming on the home property. The property ran cattle,. grew Mangoes and Sugar Cane.
I cashed in insurance policies to live. We had sold all our cattle and machinery, and almost all the 100 acre lots we had title for to reduce debt, pay interest and penalties. The plans were drawn up for 19 more blocks with council approval and ready to develop, but we had no money to do this unless the bank let us keep some of the proceeds from the sales I was making.
We needed more 100 acre blocks to sell. We could see that this was the way to clear our debt, but we needed some funds from these sales, and more time. The bank refused our request to support this plan.
AFCA gave a decision on all my complaints I had with nab.
AFCA'S FINAL DECISION ON NAB REFUSING TO LET ME CONTINUE SUBDIVIDING WAS THAT NAB ACTED FAIRLY WITH THIS DECISION.
I was trying to sell everything, and through advertising, I found a developer who was interested in the Lot 800, the Lot I wanted to subdivide into 19 more, 100 acre blocks.
He made a written offer of $1.2m to the bank for that lot. He would pay the bank interest on the 1.2, all land sale proceeds go to the bank until the 1.2 was cleared. The bank refused that offer, and later after they called in receivers and auctioned it, they sold it to him for $700,000.
AFCA's final decision says that Nab acted fairly with this decision.
When they decided to foreclose, their reason was that they had given me enough time to bring the account in order.
I had been to other lending institutions to try to refinance. This was eventually successful, and an offer was made to my bank for the 4 remaining unsold assets before Nab appointed Receivers, one asset being my home on one block, Lot 2. I desperately wanted to keep my home, the second asset was Lot 800, the subdivision block, the third asset was Lot 13, a 300 acre block, and the fourth asset was a unit at Peppers Blue on Blue, Magnetic Is. Nab refused my offer of $2,800,000. for the remaining assets.
The Receivers sold these assets after the auction for a total of $2, 250,000. less the Receivers costs.
AFCA'S FINAL DECISION SAYS THAT NAB ACTED FAIRLY WITH THIS DECISION TO REJECT THE OFFER OF $2.8 AND THEN SELL FOR $2.25. LESS RECEIVERS COSTS.
When they decided to auction the remaining assets, my solicitor and I pleaded with them to let us do this auction ourselves (if it had to be done), if the receivers sold it, the results would be heavily discounted. They refused and sent in receivers.
The market was very depressed and probably represented less than half the value before the GFC. Now with receivers auctioning the property it was a sign for bargain hunters and the result was another massive discount.
The bank got valuations of Lot 2, my house block, and Lot 800, the one I wanted to subdivide, before they auctioned, they billed my account for this valuation, but would not tell me what the values were.
I had recently obtained HTW valuations for my refinancing offer just before they appointed Receivers, the HTW valuation of these two lots was $3,356,000. The bank sold them for $1,650,000.
I was advised later that advice was given to the bank by HTW regarding the marketing of these two blocks when they gave their valuations, advice to achieve the best result. This was included in the valuation. The bank ignored this advice and went straight to a forced auction by Receivers, which contributed to the fire sale result.
The auction was held on the 21 August 2013, and was handled badly with no contracts were provided to registered bidders prior to the auction. They didn’t know what the reserve was, so there were no negotiations that day.
The receivers made sales from low offers in the days after the auction. The 4 assets remaining, sold by my bank made $2,250,000. Less Receivers fees. I had previously offered NAB $2,800,000. that they had refused. That is, my offer that I made Nab before Receivers were appointed, was over $500,000 more than what they got.
AFCA said that was ok.
LOT 2, the homestead block. I had a HTW valuation done, 14 Feb 2013, their valuation at that time was $2 m. Nab's Receivers sold it for $950,000. how can that happen. I had to move out of my home and live in a container.
LOT 800 the block I wanted to subdivide. A developer offered NAB $1.2 m.Nab" Receivers sold it to the same Developer who offered $1.2 m for $700,000.
UNIT Magnetic Is. I purchased it off the plan as an off farm investment for $550,000. Nab's Receivers sold it for $250,000.
LOT 13. The last of my subdivision. Proposed 3 x 100 acre blocks. Nab would not let me complete the 3 titles and I had to sell it in one block, so instead of getting about $700,000 it sold it for $350,000. AFCA's final decision says that Nab acted fairly with these decisions.
That developer who bought the lot to subdivide for $700.000. (He had previously offered the bank $1.2m ) sold all 19 blocks in the next 2 years, grossing almost $4 M. This could have cleared the debt.
My bank had no thought for their client. I cannot understand their actions. The bank did not follow good industry practice, no duty of care to their customer, even after such a long relationship. Their actions were so unfair. I believe they panicked.
AFCA's final decision says that Nab acted fairly.
The bank gave me no opportunity to trade my way out in these very difficult times, instead choosing to rush into a fire sale. There was no support, no discussions about the propositions I put forward to trade my way out of this, no effort to assist me in my hour of need, and no duty of care to a long term client, only pressure to sell my assets or they would do it for me.
AFCA's final decision says that Nab acted fairly.
They would have known it was an impossible task in this economic climate to sell an asset for any reasonable value, let alone putting time limits on sales they wanted achieved or they would appoint receivers. I dreaded those phone calls. My health deteriorated because of this. The pressure was enormous. They increased their interest rates and charged me penalties. No help at all.
After they sold everything the result was, the bank got it’s money back that they had lent me, but not all the interest and penalties they had charged me. Nab says I still owe them $3,095,236.06. dollars. After asking numerous times how this amount is made up, They cannot tell me.
AT MEDIATION NAB SAID THE DEBT WAS $5,595,676.00
REMAINING ASSETS SOLD AFTER MEDIATION $4,185,000. (bare in mind these assets were worth two and a half times this amount )
NAB SAY I STILL OWE $3,095,236.00
THIS WILL GIVE AN IDEA OF INTEREST RATES AND PENALTIES I WAS CHARGED.
For me the result was that I lost everything. Lost all my life’s work. My home, my property, all my investments, all my assets.
Fifty odd years in agriculture. From Jackerooing after leaving school in the 1960s, to eventually buying my first small property with my Dad. Developing it then selling it for a profit, then doing the same to three more properties. Developing a 1,200 acre sugar cane farm from my cattle land in the Burdekin, creating a 16,000 tree mango farm and packing sheds, sending fruit down south and flying fruit into Europe - all with this banks involvement.
Over those years my bank and I both did well until times got difficult as a result of the worlds financial crisis, and they panicked. They saved themselves at the expense of their long time client. I needed support from my bank at this time, I expected it, but never got it.
Australian banks were also put under pressure by the GFC, and needed assistance from the Australian Government (the taxpayer) to guarantee their viability. An article I read the other day , said, the Australian tax payer saved them. We gave them this assistance.
What caused our problem was beyond our control, like a natural disaster. I think the bank panicked and handled my situation, and many others very badly.
Hard working people putting everything into their business, deserved better from the banks. The situation we were in was so foreign to us. We looked to our banks as people we could trust, work with and support us through tough times like this, but instead they abandoned us to save themselves.
CAN YOU IMAGINE THEM GETTING AWAY WITH THIS TODAY.
In the end we all know what happened. It wasn’t the end of our economy. The world’s economy recovered as it had done before, recovering from other crises. Australia’s economy recovered. Cattle property prices reached all time highs, and cattle prices went to all time highs.
The people who bought assets at that time did very well, purchasing for bargain prices.
I lost everything, thanks to my bank who forced me to sell at the worst possible time. Is that fair? AFCA's final decision says nab acted fairly.
Mango farming on the property where I also grew sugar cane, where I ran cattle and I was subdividing.
When I thought I had lost everything
... I lost something else...
As well as losing all my life’s work, I then lost something else, my best mate, my wife. As a result of all this trauma, the stress, the uncertainty, and the pressure that our bank put us through, and heart break. We were looking at such a different and uncertain future. We now lived in a couple of shipping containers, and had nothing.
A lot of pressure had been put on our relationship by my banks actions. The loss of our home and being made to move out, to live in a shed (in a container), all our assets had been liquidated so far under value, and the pressure the bank had put on us to do this. ( By my ‘business partner’ who I had trusted and worked with for all those years) The realization that it was all gone, all those years of hard work, gone. The Banks manager told me that this has happened through no fault of my own.
To be in this position, to be made to walk away from your family home, the home I had built after loosing my first wife, the home where I raised my three daughters after their mother lost her four year battle with leukemia, when the youngest was only seven. All the kemo was done in Brisbane, four times the leukemia returned, even after a bone marrow transplant. I was in Brisbane for a lot of those four years, leaving the girls in Townsville.
To have our home taken from us, the property, all my life’s work, being left with nothing but a debt to the bank (interest and penalties) that I have no ability now to repay, is indescribably heartbreaking and mentally degrading. It takes you to a place that you never though you would go. A place that would end the pressure, the loss, the disappointment and humiliation and sorrow.
I can understand how some farmers took their lives. I am forever grateful to my family and friends who rallied around me and kept me strong, otherwise I may have been one of them.
The subdivision.
What's happened since then?
My Experience with the AFCA (Australian Financial Complaints Authority)
I decided to contact AFCA in 2019 after talking to some law firms and legal aide. The idea of taking on a major bank on my own, even if I had some money, was just plain stupid, so I have put my faith in AFCA, hoping that this organisation can deliver some fairness and accountability. They present a case from both sides to an ombudsman who will decide the outcome. That is what I was told.
On November 2019: the Initial complaint was submitted to the AFCA.
I submitted my initial complaint to AFCA in November 2019. They replied saying they would accept the case. I was appointed a case manager and she was very helpful. My complaint was explained to AFCA and they thought I had a good case. A law firm in Townsville represents me, and my three daughters also assist - one is a lawyer.
All my information, records and emails between my bank and me supporting this story, have been supplied to AFCA.
I have had other lawyers and a Barrister give an opinion on this case and they are appalled at the banks actions.
There was a lot of material and the latest submission we sent to AFCA consisted of 254 pages on the 2/12/2020.
On the 4th February 2021: AFCA Case Manager Number 1 was replaced by anther, case manager number 2 was appointed.
For some reason this new Case Manager was appointed.
On the 15/04/2021, we were advised by AFCA that this new Case Manager was going on extended leave, and another new Case Manager would be appointed. I can see now AFCA was looking for the right person to bring the case to an end. Perhaps the way they wanted it to go.
We are wondering what is going on.
AFCA now advises us that they cannot find my submission.
This is Incredible! My lawyer has everything on file. So we now resubmitted the whole thing.
Case Manager Number 3 has been helping with my case for about 6 months when he then submits a recommendation, we were not expecting our case manager to give a recommendation.
He says. “The bank acted appropriately in respect of Mr. Johnson’s financial hardship.” I was surprised by this statement that a case manager, representing both sides, for a judgement by the Ombudsman , had come out with this statement.
The Ombudsman then follows with his judgement of my case. He follows the case managers recommendation.
My lawyer looks into Case Manager Number 3's background and he discover this AFCA Case Manager Number 3, was employed by my NAB from May 2009 to 2014, in positions such as Senior Credit Partner, Business Banking Centre, Business Banking Executive, Senior Credit Manager and Manager, and Credit and Risk, all at the same bank I have the action against. Chances are he knew people connected.
Therefore, over the entire period of the relevant events which comprise the background of my complaints with my bank, this AFCA Case Manager was in senior management and credit management positions with my bank.
Under these circumstances, any concept of achieving or showing independence or fairness, actual or perceived, in consideration of the complaint and reaching a recommendation is impossible. This is soo disappointing.
A DECISION HAS BEEN HANDED DOWN
On the 14 th of February 2022 AFCA made the decision on my case. AFCA ruled in favour of NAB. SURPRISE SURPRISE .
AFCA SAYS THEIR DECISION IS FAIR. THEIR DECISION STATES.
THE EVENTS MR. JOHNSON HAS GONE THROUGH IS UNFORTUNATE, HE HAS SUFFERED FINANCIAL HARDSHIP DUE TO REASONS BEYOND HIS CONTROL. BUT THE BANK ACTED IN TERMS OF IT'S RIGHTS UNDER THE DEED, IT MET IT'S LEGAL OBLIGATIONS, ACTED IN LINE WITH GOOD INDUSTRY PRACTICE, AND COMPLIED WITH APPLICABLE INDUSTRY CODES. SO IT WOULD NOT BE FAIR TO REQUIRE NAB TO COMPENSATE MR JOHNSON.
YOU WILL NOTE THE MENTION OF THE DEED I SIGNED AT MEDIATION. THEY WANTED THAT MEDIATION SO THEY COULD GET ME TO SIGN THAT DEED.
WELL THATS IT, AFCA SAYS NAB ACTED FAIRLY, IN LINE WITH GOOD INDUSTRY PRACTISE. CASE IS CLOSED. AFCA SAYS THEIR DECISION IS FINAL. THERE IS NO APPEAL WHEN THEY MAKE A DECISION.
How many people did they do this to? Please tell me if you were one.
Today we see businesses struggling from the effects of COVID-19 on our economy.
The government is assisting this time, by handing out massive amounts of money, I think it will be different.
If banks treat businesses today as they treated me and others during the GFC, it would be so wrong! Imagine the uproar if there was no assistance today.
How did banks get away with it? The Government did nothing. Government even shut down the Farm Financial Service / Counselling, DEEDI, that I was using to assist me for a short time. Why didn't we get some help?
I think the banks should be ashamed of the way they acted during those years, and I don’t know how their employees who carried out the banks instructions sleep at night. I can remember their arrogance, their ultimatums, the pressure was enormous. Surely there should be some moral obligation by the banks, to not treat people that way.
Banks need Investers to borrow money and pay interest, and Investers need finance to create projects and make profits, we need each other to operate. It needs to be fair, not one in the business partnertship having all the power and financial protection.
Natural disasters happen, you could say we have no control over them. They just happen. Australia had it’s share of them in 2022, fires and floods. I recall seeing the effects of the floods recently on TV. Property owners devastated, emotionally destroyed, stating that they have lost everything, their life’s work all gone, terrible. After the disaster runs it’s course, there is the clean up, the repairers and then start again.
The Global Financial Crisis happened and when it did we had no control over it. Some Businesses and Farmers were greatly affected. I was greatly affected, it wasn’t by a fire or a flood, but by my Bank. They were ruthless, fire saleing everything. I lost everything, my lifes work all gone, terrible. When the disaster was over, there was no start again like after a fire or flood, because there was nothing left to start again with.
A natural disaster, Mother Nature, as powerful as she is, is not as powerful as the Banks. The Banks can take everything. Unlike Mother Nature, she can leave you with something to start again, Banks can leave you with nothing.
To have a long association with a Bank, your business partner, both of you growing financially from the relationship, each needing the other to run their business, to grow, in a business together. Then there is a crisis, both parties are under pressure and one destroys the other, the more powerful destroys the other. Why is it that Banks have all the protection against something going wrong, their loosing money, what about their partner in this business partnership, what about their loosing money, assets, and a life’s work.
When I was struggling, my bank made it harder for me, increased the interest rate, inflicted penalties, imposed impossible deadlines to achieve sales, sold my home and business and destroyed my life - all to get their money back. My banks slogan is " MORE THAN MONEY " I SAY BULLSHIT. I know it was all about money, no thought for their client.
I am now involved in a group. We have put individual submissions to ASIC through a promanent southern based law firm. We are involved in a Senate inquiry into ASIC and the actions of Banks.
This may be the best chance of an outcome.
I see I did not have a chance. These organizations look after each other, and a farmer like me doesn't stand a chance.
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