Mr Phillott was 87 when he was left his central-west Queensland station in 2014 — even though the grazier had never missed a mortgage payment deadline.
The banking giant made the decision after devaluing Mr Phillott’s Carisbrooke Station because of the drought plaguing the region, after it took over Landmark Financial Services in 2010.
Mr Phillott and his son, Charles Phillott Junior, eventually spoke to the media regarding their situation, and the bank later apologised for its actions and returned control of the property back to the Phillott family.
Today, ANZ head of lending services Benjamin Steinberg told the banking royal commission the bank had not behaved ethically in its dealings with Mr Phillott and in a number of other similar cases involving rural families.
He said the bank had not worked with clients to resolve their financial problems, which is required by the banking code of practice.
“I think the dealings were consistent but I think they weren’t fair and they weren’t reasonable,” he said.
When asked by commissioner Kenneth Hayne QC if the bank had acted ethically manner, Mr Steinberg’s reply, “I think’s it’s fair to say we didn’t”, was met with applause from the many of those in attendance.
The royal commission received 268 submissions regarding agricultural finance, and 32 of those relate to ANZ’s acquisition of Landmark and its 7124 loans worth $2.3 billion.
The commission also heard a case involving Arthur and Rhonda Cheesman, and their son Reuben and his wife Katrina, who ran a farm in western Victoria.
The farming family agreed to sell their assets after they encountered financial troubles, but the bank rejected their requests to keep their homes and farming equipment so they could continue to earn a livelihood, with a bank manager noting “we should be firm here”.
Mr Steinberg said the bank would behave with more empathy if it were dealing with the Cheesmans’ situation today, and that it would consider options which would allow the family to keep their home.
“Looking back on it and the events that you’ve just described, I find it sad that happened,” Mr Steinberg said.
“I’m struggling with it. If this was done today it would be dealt with in a different way.”
Earlier today, independent MP Bob Katter, who was seated in the gallery with a number of farmers, interrupted the proceedings to ask commissioner Kenneth Hayne QC whether the banking industry’s failures would be properly dealt with.
“Are we going to address why these things happen and what we can do about it to improve it in the future?” Mr Katter asked.
The colourful politician also told parliament today the current banking environment was “ugly and evil” and that consumers needed to be protected from risky behaviour.
BOB KATTER, interjecting from the #bankingRC audience.
HAYNE: “MR Katter, I’ve indicated the course I will follow.. all I will say to you is.. there’s a deal of work behind the scenes, before, during and after, ultimately the fruits of that will be in my report” #auspol
— Dan Ziffer (@danziffer) June 26, 2018
The hearing continues.
Prime Minister Malcolm Turnbull has called for a royal commission into misconduct by the financial industry, after the big four banks wrote a letter requesting the commission.