The ANZ letter kicking off the process that led to his family losing its century-old sheep farm came a few weeks after Stephen Harley’s heart attack.
ANZ told Mr Harley and his wife Janine they were in default on their loans, after they were unable to sell their sheep and farmland in Western Australia to repay their debt.
They were later given six months – until March 2014 – to pay off the entire debt. If not, they had one day to be off the farm.
The Harleys were one of many former Landmark Financial Services customers who ended up in financial difficulties and in ANZ’s hands after its 2010 acquisition of the agribusiness loan book.
ANZ stands by its actions in the Harleys’ case, although executive Ben Steinberg says the bank tries to act with more empathy for its agribusiness customers nowadays.
The Harleys managed to sell five of their nine land lots and livestock to pay down $1.6 million of the $2.5 million debt before the March 2014 deadline.
But ANZ rejected a request for a nine-month extension so they could target the stronger spring sale period and it appointed an insolvency firm to sell the land.
Mr Steinberg stood by the decision at the banking royal commission, saying it came after years of trying to get the debt repaid.
“It is a difficult decision to make but at some point a line in the sand needs to be drawn,” ANZ’s head of lending services for corporate and commercial said on Tuesday.
But Mr Steinberg said his decision would be different today and the bank would be more likely to grant the extension or consider options such as debt restructuring.
The inquiry also heard elderly third-generation farmers Arthur and Rhonda Cheesman were left worn out and with “nothing at all” after their dealings with ANZ.
With their son Reuben and his wife Katrina, they had agreed to sell assets when they hit financial difficulties,
But ANZ rejected their repeated pleas to be allowed to keep their homes on the western Victorian farms or the equipment and machinery so they could earn a living.
An ANZ manager noted “we should be firm here”.
Mr Steinberg said the case made for difficult reading, and would be dealt with differently today.
“Looking back on it and the events that you’ve just described, I find it sad that that happened,” he said.
“I’m struggling with it.”
A review by the bank concluded its actions were legally reasonable and the loss of the family farm and home, while distressing for all, was an unavoidable result of the farm’s financial failure.
But ANZ recognised that a more commercial and compassionate assessment would have left the customer with funds to move forward, and paid the Cheesmans $270,000 in compensation.
ANZ paid another former Landmark customer $684,000 after a former High Court judge evaluated the Tasmanian farmers’ case.
The inquiry heard the bank placed “tough” obligations on the Tasmanian farmers in a deal that delayed enforcement action and it also increased the interest rate on their facilities when they were already under financial stress.
Commissioner Kenneth Hayne QC has dropped natural disaster insurance from the current two-week hearing to devote more time to farming finance.