Farmer billed for bank's legal costs

Cate RocchiCountryman

A farmer, in a long-running dispute with ANZ Bank, is upset the bank is continuing to deduct its own legal fees directly from his account.

Farmer Frank Bertola, who lives near the town of Gardiner, said he was dismayed ANZ was continuing to pay its own legal fees from his account.

Mr Bertola - who recently appeared in the Supreme Court in WA - has revealed receipts from the bank showing deductions of more than $66,000 from his bank account, from July 2012 to date.

Mr Bertola said the deductions from his account, which paid for ANZ Bank solicitors Herbert Smith Freehills, were extremely expensive and he never expected a bank would be legally entitled to charge him for its own fees, prior to a decision on the dispute being made in the courts.

He warned other farmers to be careful in signing banking documentation with regards to legal fees.

Ironically, while the ANZ deducted money from Mr Bertola's account to pay for one of the State's leading corporate law firms, Mr Bertola due to limited funds has largely been representing himself in court.

He and one other WA farmer have contacted Countryman, saying they are bitterly disappointed with some actions of the ANZ, after the bank took over their portfolios in 2010, from a scheme originally set up by an arm of the Australian Wheat Board (AWB) called Landmark Financial Services.

The farmers claim they were encouraged to take out big loans to grow their businesses under the scheme previously run by AWB's Landmark Financial Services.

Mr Bertola said a short time after ANZ took over those farm business portfolios, the bank quickly took a hard-line approach and, in some cases, revised loan repayment schedules.

The situation is further complicated by involvement in Mr Bertola's account by ANZ's trustee in this issue, Permanent Custodians, a subsidiary of BNY Mellon Australia Limited.

However, while the other unnamed farmer was also upset with loan conditions, he was too nervous to speak publicly about his situation for fear of being later penalised financially by the bank.

Several other South West farmers - some of whom have properties on the market - have contacted _Countryman _ complaining about different procedures of various banks, but they too would not speak on the record.

Generally they were complaining about higher interest rates paid for loans on country properties to those in the city.

In 2009, AWB announced the sale of Landmark Financial Services' $2.4 billion loan book and $300 million debenture book to ANZ.

At the time, AWB announced it had "in conjunction, with the sale of assets, Landmark Financial Services has entered into an exclusive referral arrangement with the ANZ".

Mr Bertola revealed documentation showing ANZ fees deducted for "enforcement expenses relating to the recovery of debt" to pay the bank's solicitors, Herbert Smith Freehills include: February 2013 ($3139.95); February 2013 ($5125); April 2013 ($9668.58); May 2013 ($831.28); July 2013 ($6142.21); July 2012 ($1392.60); July 2012 ($5534.90); September 2012 (6662.50); November 2012 ($18,491.21); December 2012 ($4323.55); and December 2012 ($5164.46).

So far the amount totals more than $66,000.

The Australian Banking Association said it had no information regarding the practices of banks involving legal disputes and legal fees.

With regards to Mr Bertola's case, an ABA spokeswoman said she was unable to comment.

One industry commentator, who would also not be named, said the original AWB Landmark scheme was basically a means of buying clientele to enlarge their client base.

Loans were provided for inputs such as fertilisers, chemicals and stock.

An ANZ spokeswoman disagreed with using the word "debited" in regards to monies being deducted from Mr Bertola's account for the bank's legal costs.

"I can confirm that money isn't being debited, instead there have been amounts charged to his account which are additional costs incurred in relation to his defaulting on his loan," she said.

"ANZ's standard terms and conditions, which Mr Bertola signed, clearly state that if a customer defaults on their account, they agree to cover ANZ's costs in recovering any outstanding monies (including legal costs)."

ANZ stated it had been working closely with Mr Bertola for some time, including mediation sessions to discuss his situation, and he agreed to repay debts in full more than 18 months ago but this had not happened.

Mr Bertola's next scheduled court appearance is on October 3.

Get the latest news from in your inbox.

Sign up for our emails