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Parliamentary Joint Committee on Corporations and Financial Services
16/02/2016
Impairment of customer loans

CULLETON, Mr Rodney Norman, Private capacity

MENZEL, Mrs Margaret Frances, Private capacity

[12:04]

CHAIR: Thank you for attending today's hearing. The committee has received your submission, Mr Culleton, which we have numbered as submission No. 123. Would you like to make any amendments to your submission?

Mr Culleton : I am about to table a document that I have compiled, which will require a little bit of housekeeping. But as far as my submission goes, no.

CHAIR: Very good. Can I have somebody move that we receive this as evidence?

Mr COULTON: So moved.

CHAIR: Thank you. Would you like to make an opening statement before the committee proceeds to questions?

Mr Culleton : I would like to take the opportunity given to address the Senate committee today.

Mr Ruddock interjecting

CHAIR: Sorry, Mr Ruddock is being a bit precious; this is a joint committee with Reps members and Senate members. But you can ignore him for now.

Mr Culleton : I stand not only for myself but also for a number of Australian farmers in rural communities out there and the Australian people, even covering small business enterprises. Unfortunately, the time allowed today is short, and that is why I have compiled those documents I have just tabled. It is a DNA on the activities surrounding the AWB-Landmark-ANZ acquisition. Before I move on, I would like to do a bit of housekeeping. You will see at the back of that document that appendix B—the appendices go from A through to D—is a submission from Brett Fallon dated 14 February 2016. I have tabled that. I have also put in there a DVD of my own enterprise. I am also an inventor. I developed a concept that went around the world, and is currently being used in New Zealand and other places. I will not be addressing that today; that is for your perusal and viewing at a later date.

What I would like to do, for the record, is to—I would like to ask the Senate committee, while listening to my presentation, to keep in mind this vital question: why would ANZ want to buy the Landmark loan book in March 2010, knowing that its customers were farmers, and then make representation to those customers that ANZ was an agribusiness specialist to induce them to sign a contract but then systemically put a considerable section of those customers and their valuable viable businesses into forced liquidation almost immediately after signing over? That is very important.

What I have also done is—if you can refer to the number in the top right-hand corner of the affidavit style document there; they are the numbers in the right-hand corner. Some of those have been taken out of affidavits, so we do not want any confusion. If I take you to page 2, which is the introduction, the areas I want to cover today are the ethos behind the AWB single desk and Landmark; the embattled Australian Wheat Board, which was the arranger and manager of the trust deed of the rural loan book that financed the growers; and the actions taken by the bank's receivers and also the actions of the police, which I have witnessed firsthand.

The ethos behind the Landmark loan book was a different lending style, and it was introduced to a lot of growers because they wanted to become more involved in particular value-adding enterprises on farms, so returning a bigger farm gate price. They systematically come out with what they call a more adapted financial facility, which is what is needed in agriculture. I will say, for the record, that this conduit, invention or concept enabled me to take a poor man's crop—oats—and obtain $1,500 a tonne, whereas at the pool or at cash price we would be battling to get $130 a tonne.

So I had that concept in my own operation. I did inherit a farm. My wife and I started with a small holding and then we increased it to the point where ANZ and Landmark stepped in—ANZ particularly. We were on the road to probably farming up to 15,000 acres. Essentially, the ethos behind that—if you turn to page 15 you will see a news and media release. I know it is dated 2013, but it has not changed. I have highlighted there:

Farmers have long faced challenges managing the equity tied up in their livestock …

What it was doing under the credit manual was allowing 33 per cent of tangible assets. So if a grower had $1 million he would get $330,000 against his stock, which was no problem because at the end of the day Landmark was indebted to the farmer. In a sense, it was safe lending. It also needs to be addressed that when a grower applies for a loan he is given 60 per cent, and I think in pastoral areas he is only given 50 per cent. We call that a 40 to 50 per cent skin in the game. We have a lot of equity in the game. I heard this valuer talk earlier. There is no consideration given to that by the banks when they bully—it is not bullying with their agents; it is just financial terrorism. I know I sound a little bit emotional, but I have witnessed what has happened not only to me but to other people, and to be held at gunpoint at the farm, and it causes a little bit of stress. However, we move on.

Essentially, what I want to go to now is where the match dropped in the grass. That was the notification—the unsolicited, full-bore take on at the time. We were given a notice. I will take you to the notices on page 72. That was the standard notice that came out. Basically, the farmers knew nothing of what was going on. There were major concerns about the Australian Wheat Board having its tail feathers shot out. It had about as much chance of flying as a grand piano coming out of a 20-storey building. That did concern growers—that the AWB had come under assault. From actually coming out of a government-backed industry, within eight years of when it was corporatised it fell to its death. I can tell you now that the Australian Wheat Board symbol—the logo, the identity—was about as good as Qantas. It was an iconic name, and it was one that a lot of growers and farmers had a lot of trust in.

This was on 14 December 2009. I will say this was at a busy period of time, especially for us; we were flat out harvesting. A lot of these growers did not actually get this letter and then they went on Christmas holidays. It says, 'Dear valued customer.' It is signed by Graeme Jacobs and David Hisco. Graeme Jacobs was with Landmark Corporations Ltd, and David Hisco was group managing director of ANZ Commercial Banking. It is very important when I refer to Landmark because what I want to do is to come back—with the limited time that we have—and actually address the evidence that has been put by ANZ bank. I will go to that very shortly, but I really need to get this across. I will read it to you:

Dear valued customer,

A few days ago, Landmark and ANZ announced a new working relationship—

It did not say it was buying the loan book. Then it continues in the second paragraph:

Both Landmark and ANZ have worked closely with farmers and rural communities for more than 150 years.

We understand how important it is for customers to continue to deal with people who really understand their business and understand local and seasonal issues, as well as wider industry issues affecting agribusiness.

With this in mind, the Landmark Financial Services team will be joining ANZ’s dedicated agribusiness specialists to create a national network of professionals committed to supporting rural and regional Australia.

That could not be further from the truth. Sorry, there are a lot of ANZ Landmark customers who did not get their rural finance manager—a lot of them had abandoned the post.

I will take you back to page 16. It shows there was a different culture going on. It is evidenced here that Browning, up in Longreach, was given a loan and when they went to purchase the cattle the rural finance manager said, 'We can't come up with the working capital.' He said, 'How am I going to buy the cattle?' Conveniently enough, the rural financial manager created his own lending institution, called Cash Cow Trading Pty Ltd. When these growers defaulted—if you go three-quarters down the page—he was copping up to 20 per cent default interest. One would say this is not an ADI operation, and ask: does this particular individual—or this number of Landmark financial managers—actually have a lending licence?

Going to page 73, this was attached on the reverse of the document on the first notice: 'Frequently asked questions'—I know where they came from, because no-one knew about it. 'When will the changeover to ANZ occur? We anticipate that this will begin from early 2010 and completed transition to ANZ will take several months. Landmark and ANZ will be working together to keep you informed about any changes. Do I have to do anything now? You are not required to do anything now. Until early 2010, all your accounts, including chequebooks, will continue to work as they always have. If you have any questions, please speak to your Landmark rural financial manager. You can also call 1800 622015 or visit our website. We will be in touch with you in early 2010 to talk more about the changeover process.' That never happened. It never happened. When you rang 1800 you could not get through. 'Will any funds automatically transfer to ANZ?' Yes. They were basically just corralling us all in and pushing people in and saying, 'You now bank with the ANZ and you will accept these terms.' 'What happened to my lending facilities? Your lending facilities remain unchanged in the short term, although management will transfer to ANZ in early 2010. If you need any changes or additional financing, please continue to speak to your Landmark rural finance manager.' He had gone on a holiday. 'Will ANZ be competitive? Do I have to reapply for credit? All formal approvals remain in place and you will not need to reapply for credit.' Basically, we all had review dates. ANZ wanted to come into 12 monthly review dates—that is one area that we have to request in agriculture while we are doing twelve-month reviews. They need to be taken over 10 years—that is agriculture. You might have a dry year one year, but next year is a thumper.

Going to page 74, we get a different interpretation. It is dated 21 February 2010. 'Transitioning to ANZ. It is now two months since Landmark and ANZ announced an agreement'—it is an 'agreement' now, not a working arrangement—'that will see Landmark financial services lending and deposit portfolios become part of ANZ's regional commercial banking business. We are delighted that nearly'—nearly!—'all the Landmark financial services team will be joining ANZ.' There were none at Bunbury. They had completely abandoned ship. Both those notices came with the frequently asked questions on the back.

Then we come to Mark Hand. This is on 5 March. This is five days after they announced 1 March was—we call it the killing season—the transition to ANZ. Please refer to the opening of the letter. It says, 'Dear customer'. ANZ had corralled all these farmers into being their customer. No-one had signed letters of offer. No-one knew what was going on, particularly myself. It needs to be tabled at the Senate inquiry that there are a number—I am one of them—who never signed over to ANZ bank. They had created new bank accounts calling me a customer, and then they defaulted me on bank accounts that were foreign to my company or companies.

I find it a little bit odd, given the fact that I have put my life on hold spending two years compiling the documents. I will say a great McKenzie friend said to me, 'Rodney, you will only get two weeks out of caveat.' Well, we got two years, senators. It got to the point where we nearly became a vexatious litigant, but we actually had our first win as laymen in the court, and it got downgraded to a 'courtus interruptus'. We were very happy about that. But that is what gave us the flashlight to be able to navigate our way through and find out what we are dealing with. Through those, we kept having the bank produce extracts of documents, master trust deeds, supplemental deeds and the purchase agreement, because they were trying to firm up their validity. One of the annexures is the transcript which is was dated 13 November 2015, where ANZ—

Senator WILLIAMS: What page?

Mr Culleton : That was at page 64. If you can just bear with me, this is really important, because ANZ have certainly nailed their flag to the mast. We basically want to cut through everything and get through it and show that the supporting documents could not be further from the truth. That is our belief, and I hope the senators look very seriously at holding them in contempt, because once we get through this you will have a different view on it all. You asked a question, Senator Williams—

Senator WILLIAMS: Are you on page 64?

Mr Culleton : It is actually not numbered here.

Senator WILLIAMS: I am not finding it. Page 64 just has—

Mr Culleton : Page 65—

Senator WILLIAMS: It is hard for me to follow you when I do not know what page you are on.

CHAIR: The paper you are reading from is not the same as the book you have provided us.

Mr Culleton : No, it is in the annexure, sorry.

Senator WILLIAMS: Where is that?

Mr Culleton : That is those other documents that—

Mr RUDDOCK: With the loose pages. Is it appendix A? Which appendix?

Mr Culleton : It is appendix B.

Senator WILLIAMS: Appendix B, right. We are swimming in paper here.

Mr Culleton : I know.

Senator WILLIAMS: The greenies will have you!

CHAIR: We have the page now, Mr Culleton. Please proceed.

Mr Culleton : If we just step through it down to the second last paragraph, has that been highlighted, senators?

Senator WILLIAMS: Yes.

Mr Culleton : It was done in haste. In his opening, Mr Graham Hodges says:

… there are some cases where we should have done a better job of working with our customers. As well, there have been examples where we could have done a better job of ensuring that those who act as our agents—

They have got right. That is the receivers. When they are let off the chain, look out. He goes on:

or who are appointed by us—lawyers, receivers or others—behave in a way that is acceptable to the bank and to our customers.

I can tell you right now my experience with the receivers has not been a good one. They are totally unregulated. They are very rude. They do not care whether they throw people just out on the street. And they come out onto properties. With the help of 60 Minutes and the filming of my son in Bruce Dixon's kitchen—that was the only way that we could ever get people to accept that we were not on some conspiracy theory; we were nailing the truth. I did not know Mr Dixon. I had heard of Mr Dixon. He farms 60 kilometres from my farm. I am in Williams. He is Cuballing. But not only did we save Mr Dixon's farm that day—and he is still on it, I might add; we also saved his life. Mr Dixon is struggling. Had he not had support that day from me, fellow farmers and my son—and, yes, we cannot help receivers driving into a haystack. However, it was clear that those guys from RSM Bird Cameron were badgering him, while eating his Tim Tams, while drinking his tea, in his kitchen. If we were to remove us away from the other people—he is on his own. These people are behind the farm gate. They do not have a lot of visitors. These guys say that they came announced. I can tell you they came unannounced. But, most times, the first thing farmers will do is invite you in for a cup of tea. It is just the country way. They get in and say that they have booked a locksmith. I know of a person who works at RSM Bird Cameron, who has dug into me—but he or his secretary got a call that day. There is no locksmith in Narrogin. The locksmith needs to come out of Perth or Bunbury or Collie. So that was a complete lie to Mr Dixon. Also, what happened with Mr Dixon was that they were qualifying and quantifying his tangible assets. They were saying—there are parts of the video that have not been put on TV—'Mr Dixon, what is encumbered by the bank and what chattel mortgages do you have that may be encumbered by other financiers?' and 'Mr Dixon, what assets and equipment do you own in your own right?' When you look at farmers that have been on for 150 years, their asset POD is very, very lucrative—from milk separators to antiques. There are a number of assets that go left at the gate and a number that go right at the gate.

So we move on. Turn over the page.

CHAIR: Mr Culleton, how much longer do you think you will be with this opening section?

Mr Culleton : Another 10 minutes, if that is okay.

CHAIR: Okay. You have another 10 minutes.

Mr Culleton : I am trying to get it through as precisely and quickly as I can. I just want to go for the head of this thing. He said, 'I would have expected better from our bank.' This is on page 65. If we need to move along: Mr Hodges said—this is down the bottom of page 65:

At this stage the FOS applies to consumer customers and small to medium business customers up to a certain size.

He makes reference to small businesses up to the size of $10 million and $20 million. I would disagree with that. In a lot of cases, FOS has not stepped up to what it is meant to be. Senator Williams made a very classic remark: 'Maybe we need a shearer's view on what FOS would actually stand for.' But they have not come to the party with a lot of people, and there has been no real outcome in that sense.

But the one that really stands out and tells me was halfway down page 68:

Senator O'NEILL: Did the ANZ have any ownership or involvement with Landmark before the acquisition?

Mr Hodges: No.

If I take you to the big document now—we will refer to it as—

Senator WILLIAMS: Sorry, Mr Culleton: 68 is the letter from Levitt Robinson—that is what I have here. I cannot follow you. Are we back into the appendix?

Mr Culleton : No, annexure B.

Senator WILLIAMS: Annexure B? Good-o. Continue on.

Mr Culleton : Okay. So we come down to the deeds. Now, if we go to page 29—actually, we will start off with 26—

Senator WILLIAMS: Back in the start of the folder.

Mr Culleton : This is in your big document, page 26, at the right-hand corner. I also have that annexed—the full document—as appendix D, and I will hold that up. It would be better to hold that up. But it says ANZ had 261 subsidiary companies in the Australian Wheat Board. In 2005 it created a master trust deed. It previously had another master trust deed dated 2003, whereby Landmark Operations Ltd, Landmark Queensland and AWB Services were conducting a loan book, but in 2005 it was replaced, and Rabobank Australia had exited but Rabobank Ltd had stayed on as a hedge provider, and they created a new master trust deed dated 2005. In 2005, the manager of that master trust deed can be seen on page 34, and it is between Permanent Custodians Ltd and AWB Services Ltd. When we talk about AWB and Landmark or ANZ, are they talking about them generically? You know that, as a corporation, they spawned a lot of different entities. You can have AWB Ltd; that is not AWB Harvest Finance or AWB Commercial Funding. So we need to be very precise on what entities we are dealing with here.

Off that master trust deed, on 18 December 2006 you can see there that ANZ played a big part in the rural program. There were two trusts. One was securitised—that was the Commercial Paper Warehouse Trust, which is the one that you have seen. There was also the Rural Warehouse Trust No. 1. As you can see there, Aurora Securitisation was the initial subscriber. ANZ Capel Court were the banking agents. Rabobank Australia are in as the external facilitator, an interim funder and also an external funder. Landmark Operations Ltd is there, as is BNY Mellon. So there is a series of different entities. In other words, the corporate veil was lifted and the fingerprints of the ANZ are clearly all over the buttocks of the AWB.

So we move on. Senator Williams asked the question: do they provide a valuation to the farmers? Well, that is incorrect: they do not. What they do do is have it valued up, in the sense that they are not able to disclose it to any other party. That is annexed to my set of documents. But I have just been told I need to wind up. I think I have said enough. If there is anything more that you need or require, I am happy to provide it. Currently I am still before the court trying to be swatted, but we are still in the game. It is a bit like a Monty Python arena: it is only a flesh wound. We will hang it out, because we have to see the right done in this. Thank you.

CHAIR: Mr Culleton, thank you for your submission, as well as for this additional information. The response from the ANZ said that they had worked with you over a protracted period of time and given you multiple opportunities to get through what they deemed 'your financial difficulties'. Could you give us your side of that?

Mr Culleton : The company was never a distressed asset, but, no, we clearly wanted to exit the bank—

CHAIR: My understanding is, from your submission, that because of this issue of them creating new accounts without informing you, they put you into default because a payment had not been made, but in actual fact the money was there in your old accounts. Did I read that correctly?

Mr Culleton : We had a review prior—I think it was back in November. Our overdraft facility was set at 1.2 million. What then happened was that everything had gone south and there was no-one so we just continued on. We were well within our review period, we had just basically been through it. In the end, when things were looking unsatisfactory, we had to set up an interim facility with another bank to find out what was going on.

CHAIR: Can I take you back to that first point, though, because it is quite important to understand. From your initial submission it reads as though you had the finance available to make the payment—whether that was an overdraft or cash-in-bank—

Mr Culleton : Yes.

CHAIR: But because the ANZ had created a new account, there was somehow a mismatch between funding that you were sending to PCL from your old account and ANZ expectations. And because they did not receive a regular payment they defaulted you.

Mr Culleton : Well, the accounts were shut down. The accounts were closed. There were no accounts, they just did not exist anymore. It was either on a ANZ account or—

CHAIR: Had they advised you of the details of those new accounts?

Mr Culleton : Kim Marsden came down the road in about late July 2010 and said: 'ANZ has purchased you loan and as a formality it is just changing from green to blue and you need to sign this new letter of offer'. He said, 'One would be coming forward to you', and when it did arrive it was a completely different set of terms. One of things—which is evidenced in my booklet—was that they wanted all the present and future intellectual property rights over another company, which was the GrainKeg, over the patent rights. There was just no way I would give that up to a bank, considering in that clause it said they can call up a valuer—and we have just seen how the value operates—and do an evaluation. It could take that away like that overnight. As a director, that just would not be an option.

CHAIR: I understand you did not want to sign those new terms, particularly around the IP issue, but at any stage, were you in default? I know the company was viable, you obviously had the assets, but were you in monetary default with ANZ?

Mr Culleton : No.

CHAIR: You mentioned in your submission that on multiple occasions you sought to get a payout figure from both PCL and ANZ.

Mr Culleton : Yes.

CHAIR: Did they refuse to provide that or did they each just point to the other entity and in practice not provide you with that figure? Or did they give any other reasons, for example, there has been some discussions this morning about securitisation and how sometimes that can go beyond the term of the actual mortgage. Did they highlight that some of those issues lay behind their inability to give you a payout figure?

Mr Culleton : We contacted our lender—that is the other party that was on our loan document—and they said that they were unable to give payout figures, because ANZ bank had taken custodian ownership of all of the accounts. So they were not in a positon to assist us whatsoever.

CHAIR: And you asked ANZ for a payout figure.

Mr Culleton : We were told by PCL that they had a person—I think from memory, it was Sally Flower—who we contacted, and then they just sent us to the FO department of the ANZ, which is the distressed management section, and that is where all the problems started.

CHAIR: But did you ask them for a pay-out figure.

Mr Culleton : Yes.

CHAIR: And the ANZ would not provide one?

Mr Culleton : No, because they said they were experiencing delays in transferring the documents, or the trusts. It was not going as smoothly as expected. In fact, we actually engaged Senator Williams through Mr Cashell because we had signs—and at all material times we were trying to stay out of the court arena. We advanced up to $600,000 once we were satisfied that the ANZ bank had purchased the mortgage. Also, they took another $150,000. So at all times we were trying to stay out and work with them—because it is a beast—but it was just not going anywhere. The longer it went on, the uglier it actually got.

CHAIR: In terms of the fees that the ANZ charged through this whole process, whether that be penalty interest rates or fees for other transactions, how much do you estimate it cost your business?

Mr Culleton : It has been huge. I had to let one of my companies go into liquidation because I did not want to—

CHAIR: I am just trying to get an actual cash figure for fees that were charged.

Mr Culleton : I would hate to look at the account now, but it was very in excess—one that we would never have agreed to. It has worked out now that ANZ has admitted to a lot of overcharge, and it is giving a lot of that back. But it was exorbitant.

CHAIR: I have a final question for you before I go to Senator O'Neill. You mentioned something about being held at gunpoint. Was that just a figure of speech or were you literally—

Mr Culleton : That is reality. I had never experienced it. I must say that Landmark, in its lending policy, worked on the five 'Cs'. Obviously, one of those Cs is credibility. They look at a good businesses and how an individual stands in a rural community. Especially at Bruce Dixon's—and mine; eight to 10 came to my place that day—it was caught on TV. There were four police with their pistols on us. There were SWAT teams up in the bush. We were held at gunpoint that day. That was quite horrific, really.

CHAIR: Had you threatened or offered violence against the receivers or anyone for them to take that action?

Mr Culleton : No. We just went there to support Bruce Dixon. I am not a violent person. I will be honest: I have had to stand up and fight. There have been cases where cars have ended up on the top of roofs—and someone drives into a haystack. But, in a lot of the times, to take the power, take the sting out of it, because it is too confronting. That was the hardest thing I had to face in my life.

There is good that has come out of it—and Margaret is going to show you evidence; we got evidence. The police are trying to arrest me for stealing that motor car. We now have to go to trial. That may cost $60,000. They tried to take one of our prime movers. That has now gone to court for larceny because I took the key out of the tow truck because he had no court order. Of course, confrontation broke out and the key was lost. They say that I have taken the key and that that meant I was taking the truck. Now, I have to do a trial up in Armadale on that. It has come at a great expense. It has knocked my credibility around. But I stand on principle. I know what I have done, and I know what I have to do. We put everything on hold. We are better off to hold on to what we have than to try and go out and earn it. We had fantastic businesses. This bank shot the tail feathers clean out of us and got us flapping. We could not stay elevated. Then, when we were down, all the dogs attacked us. That is the truth of the matter.

Mr RUDDOCK: What was 'we'—you and one other? You and your posse? What was it?

Mr Culleton : No. Look, I have taken a bit of a leadership role, and I have gone around Australia and have actually interviewed a lot of these farmers.

Senator WILLIAMS: And who was 'we'? Answer the question.

Mr Culleton : 'We' is David Browning, Bruce Dixon, which was evidenced on 60 Minutes. We have a number of the growers. At Browning's there were choppers in the air and a SWAT team there, to get him off his property. He was held in the shed at gunpoint. It is just unacceptable. This is Australia we are talking about here, and we have witnessed it firsthand. It is past heavy tactics; it is serious tactics. And to the point, I am telling you that there may have been that mild approach to try to keep it under control, but if you do not do something—we have been able to stop the receivers on the farm. We have had violation of farmers' wives. We have had stud cattle sent off to sale for head value, worth $40 million today. Who do these people think they are? There is no commercial cap put on this to deal with it, and it is happening under your watch, Senators. We went to Terry Redman and we went to court, and we said, 'Our properties have been stolen.' Nothing: 'Oh, we can't give you any legal advice.' Well, I am not coming to you for legal advice; I want you to document—

Senator WILLIAMS: You say 'at gunpoint'. The police officers were carrying pistols. Is that what you are saying?

Mr Culleton : Yes.

Senator WILLIAMS: Were the pistols in their holsters, or did they actually have them pointing at you?

Mr Culleton : Well, I have—

Senator WILLIAMS: No, I just want a yes or explanation, because to me 'gunpoint' means that someone is pointing a pistol at you. If I walk down the street here in a minute and I talk to a police officer with a pistol, a Glock, in his holster—I do not see that as gunpoint. I want you to clarify whether the pistols were being pointed at you—yes or no.

Mr Culleton : Yes. I am a farmer. I know what pointing a gun is.

Senator WILLIAMS: So, they drew the pistols and they were pointing at you, you are saying.

Mr Culleton : Yes, absolutely.

Senator WILLIAMS: All right. I just wanted to clarify that.

Mr Culleton : Also to the point, I have evidence around Bruce Dixon where I said to the policeman, 'Come out from behind the tree'—because he had a gun on me—'so I can see you like a big roo.' It is evidenced in the document. And when he came out from behind that tree he put his pistol back in his holster but he still had the clip off it. He was ready to draw an arm. Not only that, but the SWAT team will drop up off the road, sit in the bush and put the bloody disco light on you. So it is serious. I do not know what is going on here, but we need to drill right—

CHAIR: Perhaps I could just come back to one more financial point. You said you were offering to pay out the bank. I think in your statement you said that you basically offered to write them a cheque for I think around $3.7 million. Did you have underwriting from another financier at that point?

Mr Culleton : No, we did not. Do you know why? Because we had it in stock. We were—

CHAIR: That is fine. I just wanted to establish the fact that you had a credible option to pay the ANZ back, as opposed to a promise or a hope. You had a credible option to pay them back, and they would not give you a payout figure.

Mr Culleton : Absolutely.

CHAIR: Thank you. Senator O'Neill?

Senator O'NEILL: Given that I have not had access to the documentation, because I am ringing in today, I will give my time to Senator Ketter and Ms Owens.

Senator KETTER: Mr Culleton, thank you very much for coming before us today, and I understand the frustration that you are feeling. I just want to come to one specific point, which goes to the default notice that is in contention here. In your submission you identify in your time line that that was on 15 November 2010.

Mr Culleton : Yes. That was the first default notice that was sent out on a different account. That was the first notice we got from ANZ.

Senator KETTER: Was the default notice to Elite Grains—

Mr Culleton : Correct.

Senator KETTER: from your ANZ bank manager?

Mr Culleton : I would not say it was my bank manager, but he was the lending—where distressed assets were—

Senator KETTER: I am just quoting from what I understand to be your submission.

Mr Culleton : I never had an ANZ bank manager, and it came out from their lending/distressed asset department, where a majority of the Landmark customers ended up in that area.

Senator KETTER: So you received that on 15 November 2010—is that correct?

Mr Culleton : I received it two days before I commenced harvest—correct.

Senator KETTER: And what correspondence did you have with the ANZ bank prior to that?

Mr Culleton : It was very difficult, because they were underresourced. We took our correspondence to Melbourne. We did not muck around at the low end; we went to the top end. And basically what we were told there was that things would happen, and they did not.

Senator KETTER: What was the date that your payment was supposed to have been made by?

Mr Culleton : The payments were all up to date. We had a working line, and as long as we worked in our overdraft facility it was all just coming out of the one account. So, everything was up to date.

Senator KETTER: I do not think there is a copy of the default notice in the material. Is that correct?

Mr Culleton : In the new bundle? Well, there is, yes. There is a copy in the new bundle.

Senator KETTER: Could you take us to that?

Mr Culleton : It is at page 105. And they default on 15 November—and I might say, I have had an interview with Bill Foreman, who has left the ANZ bank now, who at the time was assisting the toe cutter at Roland Davis, with absolute outcomes. So, he was grabbing all the farmers and trying to do a deal with the lending institution. He had left and gone out on his own, and he needs to be brought before the Senate inquiry. He adamantly, which I have on recording, said that at no time was Elite Grains ever a distressed asset; it was always sitting in the A grade loans.

Senator WILLIAMS: Was that $46,000 in arrears, as the letter says?

Mr Culleton : No. What has happened here is that they had an account that was foreign to us. We did not know what that account was. We were up to date.

Senator KETTER: This default notice says that you had until 13 December 2010 to—

Mr Culleton : I could have sent two road trains of grain into town and got the cash price and paid that out at any stage. They have defaulted me. They did not default me on the current balance of the overdraft, which was sitting at just over a million bucks, because that had a limit to 1.2.

Senator KETTER: What happened prior to 13 December 2010? Did you attempt to make that payment that you were in arrears for?

Mr Culleton : What we did do was make big advances. That was the $700,000. We just made big advances to try to—we were getting notices to say that they were suiting up to take me to court and to either enter an appearance or make suitable arrangements, which is why we—

Senator KETTER: I am not quite sure where court comes into this. You say you have sufficient—

Mr Culleton : It is an action process. Once they default, a red flag goes up and it is evidenced in his transcript that that is just the nature of the ANZ bank. They defend their position very strongly.

Senator KETTER: But you had until 13 December to pay, and you say you had the funds to pay. I am trying to understand why that—

Mr Culleton : We were getting legal advice at the time through a friend of mine. I felt that ANZ was trying to make an unsolicited offer, which is against the law under the ASIC Act 2001, I think it is 12DMA, we did not want to engage in any business with the ANZ bank. We set up funds so that we could deal with them and just get out of them, because they are not a good agribusiness bank, and this has proven that. They reckon they have 150 years of experience. Mate, I would like to see it. How has it been shown here?

Senator KETTER: I certainly appreciate your reticence to have dealings with the bank. I am just trying to understand in my mind, and please help me with this, why, if you paid the money—and you say you had sufficient funds available, and there does not seem to be anything on the face of this default notice that talks about any other requirements on you, other than the payment of the arrears—that did not occur.

Mr Culleton : I did not want to go with the ANZ bank. They were opening up bank accounts that I did not want to go with. I was not going to be corralled into them. So I set up an interim account and was putting it to one side. I did not want to engage in any way, shape or form to where they say that they have induced me. There were letters earlier saying that if you engage in such and such you accept the terms and conditions. I cannot run the business with that risk, Senator; I am sorry. So we put that to one side. That was a default notice that we believe did not refer to our banking arrangements. It had no reference to Landmark Operations Ltd.

CHAIR: Essentially, Mr Culleton, what I am hearing is that you objected to the takeover by Landmark of ANZ and the fact that you consequently became a customer of ANZ. You did not want to become a customer. You did not want to sign their letter of offer, particularly with the requirement to give up your IP. So, essentially, you did not meet their requirements, even if the bank saw that they were legally valid requirements. Am I hearing that correctly?

Mr Culleton : I never objected. They can do whatever they like. I, as a client or a customer, have the right to go elsewhere. I do not have to be compelled to go with ANZ Bank. It all hit us too hard. ANZ are an old-fashioned bank. They live on a very strict LVR, as we have seen. No way did I want to go with ANZ. We had invested in the key concept. You must get this, senators: in there is evidence where Landmark Operations Ltd wanted to do a joint venture with my company in June 2009. I bought another farm in March 2009. I settled in March 2009. They approved me for $1.7 million or $1.9 million, and then they are selling me up around August. It doesn't gel with me. The point is that I did not want to enter—

CHAIR: Senator Williams.

Senator WILLIAMS: Thanks, Chair.

Mr Culleton : Sorry?

Senator WILLIAMS: Mr Culleton, you knew in January 2010 that Landmark was selling out to ANZ?

Mr Culleton : To be honest, Senator, no. I was actually away. I did not really know until late February—

Senator WILLIAMS: It as in 2010 that ANZ bought Landmark?

Mr Culleton : Yes.

Senator WILLIAMS: You did not want to have anything to do with ANZ.

Mr Culleton : No, because—

Senator WILLIAMS: Hang on. You knew that in February 2010 that ANZ had bought Landmark. You wanted to have nothing to do with ANZ. Why didn't you get out of your loan book then? Why didn't you go and seek another loan, change banks, before you got this default notice in November 2010? Why didn't you swap?

Mr Culleton : You couldn't because you couldn't get what they would settle for. There were a lot of rumours—

Senator WILLIAMS: Hang on. You couldn't get what they would settle for. You owed Landmark some money. Right.

Mr Culleton : Yes.

Senator WILLIAMS: Let's call it X amount. ANZ took over that loan and you owed ANZ X amount.

Mr Culleton : Yes.

Senator WILLIAMS: Couldn't you have gone to another bank and refinanced, if you hated ANZ so much?

Mr Culleton : But who do you pay out?

Senator WILLIAMS: Hang on. If you disliked ANZ so much, why didn't you go and refinance with another bank for that X amount?

Mr Culleton : It is not as simple as that, is it? First of all, we had to get a clear understanding of what was actually going on. It was at the back of the GFC, so the appetite for banks then was a bit of a closed shop. It was about taking control—

Senator WILLIAMS: Fair enough. That is a good point you make.

Mr Culleton : Yes, control. Also, we farm in a very fortunate area. 2010 was a one-in-a-100-year drought. That did not affect us because we could tune it to the end-user market. The point is that, with everything going on and with the drought, it was very, very messy at that time. Everyone had abandoned their post. It was not simple. That is the truth of the matter. A lot of farmers could come here and give evidence to say the same.

CHAIR: The time being one o'clock, we are going to draw this to a close. I am conscious, Mrs Menzel, that you have been sitting there very patiently. Did you have something that you wished to speak to the committee about, before we close for lunch?

Mrs Menzel : Do you mean before lunch and then—

CHAIR: No. After lunch, we will be moving onto other witnesses.

Mrs Menzel : Okay. I understood there was going to be a screen and that I would be able to do a presentation, part of which is evidence which shows people being treated quite badly, without provocation. I have also got some other evidence about our own case, which I am happy to provide you with. I will get it redone on whatever. There are some issues which I believe the committee needs to be aware of and which have not been dealt with. Banking is not the only issue in all of this, and neither are the receivers and whatever. It is becoming such that a culture is developing or has developed, and it is affecting the police. Some police are very distressed by what is happening and other police appear to be taking things upon themselves—and I will give you an instance of this involving our own farm.

When the farm was still in our name, we were asked to send footage of our property down to our solicitor. I have a friend who has a movie camera. She and her husband live not far from the property, and they offered to go to the farm and take the movie. One of the buyers of the farm has given us considerable trouble over many years by coming onto our property. We have had all sorts of problems on that farm, with things happening to our gear. Anyway, he used to travel down when someone went down there, because he wanted the farm. He used to travel down after everybody who went down that end and tell them not to go onto the farm because it was his; it was not his at all. He confronted this couple—luckily, she had her husband with her at the time—as they were filming. He took out his iPhone and was walking towards their vehicle. He then told a young policeman that he had been hit by them, that they had gone towards him—fortunately, she had it on the movie camera exactly what he had done—and they were stopped. A lot of quite ugly things happened then. The police went round to their house and threatened to charge them and they would be in a lot of trouble.

The farm was in my name and I had not lodged any such complaint. I phoned the PoliceLink, because it was a Saturday afternoon. I could not get the Garoo police station. I actually get on quite well with them, through the sugar industry. I have a lot to do with the Garoo, Clare and Eyre police sergeants about safety issues in the industry. I am not known as a troublemaker with police, and neither is my family. If, as I put it to the young policeman, I had phoned his sergeant and said, 'I'm neighbours with your constable and I don't want his mates visiting him on the weekends because I am a neighbour and I think he should have who I want visiting and nobody else,' it would not make much sense. It would be illogical and irrational. I said the farm is mine and you are asking people, threatening people, basically, to not go on my property when I have given them an instruction to do so. And when they said it was my farm, he said, 'Well, she's going to have to come in and prove it is her farm.' Since when is the onus of proof on the owner of a property rather than on the complainant who goes to the police and causes this sort of trouble? As a rule, he causes this sort of trouble. This is not an isolated incident from him.

People were threatened, and I have got video evidence of it. One female police officer stood aside while two others had a fellow who was not struggling standing there, and he said, 'Lift your shirt. We're either going to taser him—,' and he said, 'Don't taser me.' He had been burnt. He was a volunteer firefighter and he had been badly burnt. He has got very severe scarring. He said, 'Don't taser me,' and the video shows him just standing there. They have got his hands. He cannot put them right behind, because of the scarring—and he has got them behind. The policewoman said, 'He's not struggling. We don't really need to do that.' The other fellow continued and said, 'Well, he's either going to be tasered or I'm going to smash his head to the concrete.' That hurts me. I raised my children to have the utmost respect for police. I have family in the force.

CHAIR: Mrs Menzel, if you have video evidence of that—

Mrs Menzel : I have got video evidence of that. It is from Western Australia.

CHAIR: did you present that to the relevant police force and their ethics and conduct authority?

Mrs Menzel : No, we have not.

CHAIR: Can I suggest, if that conduct has occurred and you have evidence, that you present it to the appropriate authority. If you have information you would like the committee to have, then please provide that in a written form. If you have some video you would like us to look at, then during the lunch break I am happy to have a look at that, and we would be happy to get further evidence from you. Thank you for appearing today. If you have been asked to take any questions on notice, please provide those back to the committee by 8 March.

Mr Culleton : We have a person who is standing in the crowd, a farmer that owned property between Proserpine and Bowen, who was victimised that much by receivers and police—if he stands up. He tipped 15 litres of petrol over his head and set fire to himself to put himself out because of what happened, and I can relate to that, senators. That is all I need to say.

CHAIR: The committee will suspend until 1.45 pm.

Proceedings suspended from 13:07 to 13:50