Credit Management in Australia - March 2015 by AICM

Volume 22, No 3 March 2015

2 015

The Publication for Credit and Financial Professionals

IN AUSTRALIA

What will 2015 bring? Be ready with:  International perspective  Legal updates & practical tips  Options for training you and your team Check our website ... www.aicm.com.au

DIRECTORS Australian President – G.L. Morris MICM CCE Australian VP, Legal Affairs – J.A. Neate MICM

38 Queensland Division: Christmas celebrations.

Professional Development – S.D. Mitchinson LICM YCPA & CCE – G.C. Young MICM CCE Member Services – J.G. Hurst FICM CCE Finance – G. Odlum MICM CCE CHIEF EXECUTIVE OFFICER N. Pilavidis MICM CCE Level 1, 619 Pacific Highway, St Leonards NSW 2065 Tel: (02) 9906 4563, Fax: (02) 9906 5686 Email: nick@aicm.com.au

41 NSW Division: Symposium speakers and panelists.

EDITOR/PUBLISHER Nick Pilavidis | Email: nick@aicm.com.au CONTRIBUTING EDITORS Colin Magee NSW Murray Ashford QLD Gail Crowder SA Warren Meyers WA Donna Smith VIC/TAS ADVERTISING MANAGER Tony Paul Association Media Tel: 0401 917 799 Email: tony@associationmedia.com.au

44 SA Division: Lisa Anderson and Mike Hayes (Lynch Meyer Lawyers).

EDITING & PRODUCTION Anthea Vandertouw Ferncliff Productions Tel: 0408 290 440 Email: ferncliff1@bigpond.com THE EDITOR reserves the right to alter or omit any article or advertisement submitted and requires idemnity from the advertisers and contributors against damages or liabilities that may arise from material published. CREDIT MANAGEMENT IN AUSTRALIA is published by the Australian Institute of Credit Management, Level 1, 619 Pacific Highway, St Leonards NSW 2065. The views expressed in CREDIT MANAGEMENT IN AUSTRALIA are not necessarily those of Australian Institute of Credit Management, which does not expect or invite any person to act or rely on any statement, opinion or advice contained herein (whether in the form of an advertisement or editorial) and neither the Institute or any of its employees, agents or contributors shall be liable for any opinion contained herein. © The Australian Institute of Credit Management, 2014.

EDITORIAL CONTRIBUTIONS SHOULD BE SENT TO: The Editor, Level 1, 619 Pacific Highway St Leonards NSW 2065 or Email: nick@aicm.com.au CREDIT MANAGEMENT IN AUSTRALIA • March 2015

47 VIC/TAS Division: Melanie Veld, Rosina Edgar (Mercedes Benz), Maureen Grant (Lindt) and Charles Tims (Tuftmaster Carpets).

50 WA Divisioin: Meet some of your councillors.

Volume 22, Number 3 – March 2015

Message From the President

Around the States

38 41 44 47 50 53

Queensland

Credit Management

New South Wales

Credit Management given Royal Seal of approval

Credit Management in Germany

5 steps to improve your Credit Management by not taking action

By Arnoud Visser, OnGuard

Debt Collectors: Custodian of your company’s purse strings and goodwill

South Australia Victoria/Tasmania Western Australia/Northern Territory New Members

Promotions

31 54

Young Credit Professional of the Year 2015 AICM Annual Conference

By Phylline Comia AIPA MICM

Legal PPSA Retention of Title Precedent Case – Debtor transfers to Related Entities and Lay-by Sales

By Daniel Turk

Statutory demands – eliminating the risk

By Karl Hill

The importance of timing

8 Arnoud Visser

9 Phylline Comia

Daniel Turk

By Kim Powell

AICM – Can We Help? Legal Fees Incurred by Insolvency Professionals Caveat Priority Costs of Defending Preference Claims Preference Claim Action Timing Electronic Service of Originating Process

23 24 25 26 27

Development Presentation Performance Techniques: Speaking up a Storm … Maker or Breaker

Manage Bad and Doubtful Debts Factoring and Invoice Discounting Manage Overdue Customer Accounts

Michael Hartman

ASSOCIATION MEDIA

32 33 34 35

in Credit Management In Australia

By Michael Hartman

COSL to CIO

Peter Buckley

For Advertising Opportunities

Privacy Default Listing and Credit Repair – some tips for two potentially troublesome areas

Kim Powell

By Peter Buckley

AICM Training News

CALL Tony Paul Phone: 0401 917 799 Email: tony@associationmedia.com.au

aicm from the president

elcome to the second ever edition

are real and compliance remains a central

of our soft copy magazine.

issue for credit providers be they consumer

It will allow us to ultimately bring

or commercial. The AICM will continue to run

you more editions of the magazine each year

events and workshops to keep you “current”.

and more timely editions without the long

Grant Morris CCE Australian President

Exposure Draft of the Insolvency Law Reform

lower thus more quickly restoring our financial

Bill 2014 and sought submissions by December

position and allowing us to better develop

19. The timing set by The Treasury was tight

other areas.

however your Board was able to review the

It is now more than 3 years since the

changes and provide a submission to the

Personal Property Security Act came into

Government expressing our concerns in some

play and whilst it is becoming second nature

areas and our support of others.

to most of us there are also some of us who

We were concerned that the objective of

are writing history with various legal battles

providing greater transparency and information

having recently been completed or underway.

to creditors by providing more information,

We will continue to bring these changes to you

more often, may cause an increase in costs to

and would draw your attention to an article by

the administration. The direct consequence of

Daniel Turk on page 14 of this issue.

increased costs to an Insolvency Practitioner

March brings the first birthday of the

is a reduction in any possible dividend

Privacy Amendment (Enhancing Privacy

to creditors. We urged these proposed

Protection) Act 2012 and the end of the

requirements be minimised to the degree

deferment of the requirement for commercial

possible.

credit providers to be a member of an External

We encouraged an IPR to simplify reports,

Dispute Resolution Scheme (EDRS). Just

status updates and details of costings. Perhaps

before this edition closed we were pleased to

containing an invitation for further enquiry or

learn from the Attorney-General that he has

ideally a link to the Practitioner’s website where

decided to retain the exemption indefinitely.

such further information may be available.

We anticipate his request to the Department

We also recommended and encouraged

should see revision of the EDRS Regulation

distribution of most materials electronically and

to reflect his decision accordingly. We were

requested attendance of creditors’ meetings by

pleased to work alongside our sponsors and

telephone or video conference be regulated.

members alike together with the Australian Finance Conference to achieve this result. We must give our thanks and gratitude

We especially supported the implementation of the entitlement for creditors to resolve to appoint for the external review

to our executive and Board who worked with

of administrator’s remuneration as per Section

Raj Venga and his team at the Credit and

90-27 of the IPR’s.

Investments Ombudsman (CIO – formerly

Many thanks to SA Director James Neate

COSL) to have available to all AICM members

and his Legal Affairs Team for completing

the opportunity to join their EDRS should

our submission in short time. It is very much

the exemption have lapsed in March. We

appreciated.

understand the CIO would still entertain

In November The Treasury issued an

lead times of old. The economic cost is much

We expect this year to be one of our best

applications from members who still wish to

as we work closely with Dun & Bradstreet

join an EDRS although this may not be at the

to improve the recognition of our more

fixed fee previously advised. We suggest you

youthful members and make the Young Credit

contact the CIO direct.

Professional Award the best ever. Bigger

The indefinite extension of the EDRS

events are planned for the award dinners

exemption does not mean Privacy is dead.

to showcase the talents and continue to

The changes in the Privacy Amendment Act

recognise outstanding performers like 2014’s

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

aicm f r oamn n t huea lp r e s p iodret n t

Bec Edmiston and Anna Golubeva. They are

place then have your Manager include it as

outstanding ladies and if you are yet to hit your

recognition and reward for your efforts and

thirties you should give serious thought to

results this year. The conference does not come

entering the competition. Even if you don’t win

to Sydney often and this year’s conference

the national title the recognition you receive

promises to be like the Sydney Olympic

within your business and state should not

Games – the best ever. The programme is

be underestimated. Win, lose or draw it is an

well underway with speakers from ASIC and

opportunity to raise your personal profile and

the ATO already confirmed . There has been

worth in many arenas.

an overwhelming response from sponsors and exhibitors indicating that this will be

The CCE exam will be held in a few weeks and all experienced members who have yet

another fantastic conference. Super Early Bird

to achieve their CCE should strive for this

Registration is already open, so I look forward

formal recognition. If you know your stuff,

to seeing you in October. Please take the time to read the various

and I think the vast majority do, then don’t be frightened to give it a go. Five members of

articles and sections in this magazine. Of

my team became CCE’s in 2014 and frankly

particular interest is the “AICM – Can We Help”

were excited to join the ranks, pleased to get

section which contains a number of answers

the internal acknowledgement within our

to matters affecting Credit Managers sourced

company (featured in our company magazine

from the experts in these area’s. Frankly this

and acknowledged by senior management)

is a free hit to obtain respected advice in any

and proud to have their professionalism

area of Credit Management including legal

recognised. Four more of our team sat the

and insolvency advice and if you are unsure of

exam in September and will shortly complete

your position or the action to take you would

their assignments and become CCE’s. As

be a mug not to write in and obtain real and

unemployment rates reach their highest levels

formal advice, to say nothing of helping and

in more than a decade the CCE designation

advancing fellow credit professionals. To help

is a way to show your value to your current

you the advice will be returned to you before

employer and stand out from the crowd with

the magazine goes to print. All Division calendars are set for the year and

prospective employers.

available on the website along with immediate

Later this year we will call for nominations for the Credit Team of the Year. An award

events featuring in the always popular “Around

sponsored and strongly supported by Veda.

the States” section of the magazine. The Swans are training hard on the track,

Wouldn’t you like to add your name to the list of past winners and join household names

Max is back from Fiji rested and firing as he

BOC, 20th Century Fox, Electrolux, Coates Hire,

aims to reduce DSO by 10 days this year, and

CHEP Australia, PFD Food Services and Reece

we on the Board, your Division Councils and

Plumbing as holders of the award. Do not under

the AICM office are aiming to make this our

estimate the calibre of companies which have

best year ever. Participate in some way to the advancement

nominated for this award nor the prestige both within their organisations and in the public

of your profession and I hope to see you at an

domain that finalists and winners have gained.

AICM event soon as you support the Institute

You should start on this journey now by giving

which supports you.

our CEO Nick or myself a call. Our biggest event this year will undoubtedly be the AICM National Conference in Sydney

– Grant Morris

in October. Make sure you include it in your

grant.morris@coateshire.com.au

budget now for yourself if you are a manager

I recently joined Twitter #GrantLMorris – if

and if you are not the Manager in your work

you’re not an OF join me there or on LinkedIn

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

Credit Management given the Royal Seal of Approval Following receiving a Royal Charter, as of 1 January 2015 the UK equivalent of the AICM, the Institute of Credit Management will be now known as the Chartered Institute of Credit Management. This is a significant milestone in the history of the 75 year old institution and a clear sign of the importance of Credit Management in todays business world. Philip King, Chief Executive of the CICM, says that credit managers are responsible for managing more than £4 trillion of trade debt each year, and their professional status and national recognition is growing: “The Royal Charter affirms the quality and integrity of our Institute, our qualifications, and our members, and the critical role they play in keeping the cash flowing,” he says. Already Europe’s largest association for the credit management profession, the ICM’s elevation to Chartered status was supported by the Department for Business, Innovation and Skills (BIS) with whom the Institute works closely on supporting business growth and for whom it manages the Prompt Payment Code (PPC). Other supporters included the Insolvency Service, the Institute of Chartered Accountants in England and Wales (ICAEW), and the Credit Services Association (CSA). As the Chartered Institute of Credit Management, the organisation will continue to promote the role of credit management and collections, and champion professional credit managers at every stage of their careers in supporting business growth across the whole spectrum of industries from the largest manufacturers to the smallest service providers in the UK and internationally. Royal Charters, Philip says, are granted rarely, and as such this is arguably the most significant achievement in the Institute’s 75-year history: “We had to demonstrate the tangible support that our members deliver, and the high level of qualification they are expected to achieve,” he says. u

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

Credit Management

Credit Management in Germany In January 2015 Ralf Daute, editor of the German Credit Management Association magazine called “Der CreditManager” was escaping the near zero temperatures in Germany and visiting family in Australia. During his stay he visited the AICM national offices. It was interesting to compare the credit industry and challenges in the two countries and below is a summary of Ralf’s point of view of Credit Management in Germany

Situation and challenges of credit management in Germany Our association, the Bundesverband Credit Management (BvCM) makes smalls steps towards our objective to establish credit management as a natural element of the business landscape. But, even though bigger companies use the advantages of a structured credit management process, in SMEs it is not as much as it should be regarded as an easy way to optimise the working capital.

This effect is fostered by the strong German economy which leads to a (in general) good payment behavior with only few payment defaults, e.g. today the German credit agency Bürgel reported for 2014 a historical low rate of insolvencies (a five year decline). 24,549 companies went bankrupt; this means a decline of 8.2% compared to the year before. Obviously this development is a consequence of well performing credit management which companies implemented in the years after the world financial crisis. But in fact, it turns out (at least partly), the better economical situation make companies think of downsising their credit management departments.

Economical situation As I pointed out before, the German economy is very strong and leads Europe. German banks are starting to punish customers with fees if they leave their money on their accounts – there’s too much money around.

But southern European countries, including France, are facing a lot of challenges. And right now the discussion about Greece leaving the Euro Zone (“Grexit”) is becoming more intense. In addition, the rising economies of Eastern Europe are shaken up also, a big dark shadow looms in Russia and its resource driven economy, which is badly affected by the oil price decline. So, to put it in a nutshell, the Germany economy shines still brightly but there are growing concerns how sustainable the situation is.

Payment behavior Our Credit Management Index (CMI), a monthly survey, shows a positive development in most areas. Disputed receivables are declining; the number of insolvencies is expected to decline further. DSOs are continuously improving. u Ralf Daute, Editor at Der CreditManager

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March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

5 steps

to improve your credit management by not taking action By Arnoud Visser, OnGuard Current circumstances in the business in which we operate ask for constant improvement in both efficiency and effectiveness. So with low risk: no action – and if the risk goes up? Take the right action by the right person at the right time! Start today! Consider not taking action more often and achieve more by dividing the energy and resources that you are investing into your credit management smarter:

 Assess your current approach How long ago did you implement your current dunning strategy? Is it still up-to-date? Taking a closer look at your processes and procedures regularly is bound to yield results. When are your actions planned, how many actions are planned? Are they planned at the right time and is the frequency and amount effective?

Arnoud Visser

 Plan intelligent actions

Adapt your actions to the size of your outstanding invoices. You should not spend too much of your time on chasing the small sums: an email is a quick and cost effective way to remind your customer of his outstanding invoice(s). For a larger amount you could consider sending a letter, this still does not take up much of your time is more formal and appropriate for the situation. If the sum of your outstanding invoices exceeds a certain point it might be wise to call your customer directly instead of mailing or emailing them. Investing your time to engage into a personal conversation will pay off in this case.

 Plan focused/targeted actions

Segment your customers into groups based on a combination of information and criteria: zz Internal information (historic payment behaviour and complied appointments) zz External information (credit information) zz Risk level (based on history, industry, country) zz Divide your clients into profiles and adapt your dunning strategy to this.

 Plan actions at the right level

Make sure to match a collector of the right level to the action that is required and the person that needs to be contacted. A combination of the invoice sum and clients profile helps to determine if a junior or senior collector should be responsible for collecting it.

 Use pro-active actions

Consider planning an action before the due date of your invoices. This may seem to cost you extra care but could save you time in the long run. It is an opportunity to detect possible questions or queries about a delivery or invoice that might otherwise cause a delay of the payment. Segmenting and profiling your customers and combining this with a risk assessment can save you time and money. A regular checkup of your processes will prevent you from investing your efforts in the wrong things. If you focus on taking the right action for the right person at the right time you might find yourself doing nothing more often. u

Contact or more information? Contact us via: contact@onguard.com, or follow @OnGuardGroup on Twitter to stay up to date.

“Adapt your actions to the size of your outstanding invoices. You should not spend too much of your time on chasing the small sums...”

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

Credit Management

Debt Collectors: Custodian of your company’s purse strings and goodwill By Phylline Comia AIPA MICM

When a business falls into debt, creditors will generally deal directly with debtors to resolve any outstanding debts.

While most companies would hope to never require the services of a debt collector, a business facing financial difficulty is unfortunately a reality for many. There are various reasons why a business will fall into debt. Recently, continuing uncertain economic conditions have been a major contributor, resulting in some negative impacts on business. While the recent cut in interest rates means money is expected to begin to flow more fluidly, factors such as fear over job security and reduced government benefits for families are currently contributing to low turnover for companies. When a business falls into debt, creditors will generally deal directly with debtors to resolve any outstanding debts. Sometimes, however, they

may engage the services of a debt collection agency to recover their money. The below provides a simple guide for businesses who may be dealing with debt collectors for the first time, or have queries about some of their processes.

Regulation In July 2014 the Australian Competition and Consumer Commission (ACCC) and the Australian Securities and Investments Commission (ASIC) updated their industry guidance, Debt Collection Guideline for Collectors and Creditors to reflect significant changes to the law, such as the introduction of the Australian Consumer Law in 2011 and changes to privacy laws in Australia in March 2014.

Phylline Comia AIPA MICM

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

Whilst this Guideline focuses on the responsibilities of creditors and collectors, both the ACCC and ASIC recognise that debtors have responsibilities too. Debtors are legally responsible for paying the debts they legitimately owe.

What should you consider when engaging a debt collector? Remember, you will be held liable for your agent’s actions. Accordingly it is of the utmost importance that you only engage the services of a reputable licensed professional agency. Business to Business (B2B) debts require a more sophisticated set of competencies to those required to recover Consumer Debts. You need to be sure to engage a company that is quality accredited and specialises in the fields you require. Choose a company that understands your specific needs and can provide customised solutions whilst maintaining an environment of strict compliance with all legislation.

What should you expect from your debt collector? Professional debt collectors are obliged to be fair and ethical in their approach to each debt. If you couple this with the fact you want debts collected without alienating your entire client base, you should expect a debt collector to strike up a professional working relationship with the debtor. The debtor is entitled, and it is a legitimate strategy, to negotiate a repayment arrangement their business can afford. This will ensure a realistic approach is adopted and the debt is cleared as soon as is reasonable, allowing all parties to move on as soon as possible. Setting clearly defined parameters and boundaries for your debt collectors’ authority to negotiate on your behalf will expedite a speedy and solid arrangement. Where a repayment plan has been renegotiated with your debtor, the debt collector will confirm the terms of the agreed arrangement in writing.

You need to be sure to engage a company that is quality accredited and specialises in the fields you require.

This will minimise any ambiguities or misunderstandings and will give your debtor the opportunity to contact the collection agency in case they disagree or are unclear about any aspect of the agreement.

Taking legal action Whilst the guide is mainly concerned with non-court debt recovery process and collection activities before a court action is commenced, or after a court judgement, you have the option to take legal action to collect a debt, conduct legal repossession activities, or enforce judgement through a court process. Once you have a judgment you can use the legal process to bring even the most recalcitrant debtor to their sense. If a debt collector is unable to negotiate a satisfactory repayment arrangement with your debtor, you will be asked to authorise proceeding with legal action. Most civil debt matters are quickly resolved. Upon being served with a summons, the majority of debtors simply pay the debt and the court scale legal cost being claimed. Those with cash flow problems will negotiate a satisfactory repayment arrangement. Very few, less than 2%, will file a defence. Professional debt collection agents employ highly skilled solicitors

ON AVERAGE 25% OF COMPANIES FAIL DUE TO UNPAID DEBTS Source: Coface in Australia 10

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

Credit Management

You should not ask debt collectors to threaten, harass or attempt to intimidate your debtors. Debtors have rights and those rights have provisions for penalties for contraventions... experienced in guiding proceedings to a favourable judgment in the shortest possible time. Debt collectors will not seek payment from a creditor until the debt is collected.

What a debt collector will expect from you Contact by debt collectors should only be for a reasonable purpose. When approached by a debt collector, your debtors need to be cooperative. They can expect to be treated in a

professional, courteous and ethical manner. You should not ask debt collectors to threaten, harass or attempt to intimidate your debtors. Debtors have rights and those rights have provisions for penalties for contraventions of the Commonwealth consumer protection laws to be imposed upon both you and your debt collector. In summary, debt collection does not have to be a stressful necessity in your business. Debt collectors

can be a very useful ally to help you regain and maintain control over your debtors’ ledgers and cash flow, and can help you grow by giving you more time to focus on your core business functions.

Don’t let debt capsize your enterprise – take the lead and take control so you can get back to doing what you do best! For more information, you can visit the ACCC website at: https://www.accc.gov.au/ publications/debt-collectionguideline-for-collectors-creditors. http://www.accc.gov.au/consumers/ debt-debt-collection u *Phylline Comia AIPA MICM is a Compliance Officer at Austral Mercantile Collections Pty Ltd.

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March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Opinion

Forward-looking intelligence offers insights for credit risk mitigation By Moses Samaha General Manager – Commercial Risk

ith uncertainty remaining for many sectors of the Australian economy, credit providers face a continuing challenge in assessing the future viability of business credit applicants, particularly in the SME and corporate mid-market. Through Veda Corporate Ratings, a division of data intelligence company Veda, credit providers can access corporate ratings and predictive analytics from an integrated data set, to identify early warning signs of companies heading into troubled waters.

Informed Credit Decisions Credit providers have dealt with a fair share of blows in recent years with shaky economic conditions making it challenging to see the early warning signs of collapse. The number of companies ASIC reported as having entered insolvency in Australia over the past two years was the highest in recorded history. Many providers have been caught off guard, with the collapse of the likes of Reed, Cosmopolitan Construction, Kell & Rigby, Swan Cleaning and Hastie Group, resulting in a series of reviews and government inquiries around insolvency. In this environment, and particularly in the corporate mid-market and SME sector, it’s critical for credit providers to make

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

better informed risk assessments and credit decisions. Increasingly, credit providers are seeking forward-looking analysis. Veda Corporate Ratings also acknowledges that credit providers have an obligation to know who they’re dealing with, but that it’s often difficult to wade through the sea of information to obtain the real intelligence and insight on the underlying fundamentals of a company. With more than 25 years’ experience, Veda Corporate Ratings is a credit ratings agency specialising in the Australian SME and corporate mid-market. The business provides an independent opinion of an entity’s continued future viability and financial capacity, making it an invaluable measure used to demonstrate the financial strength of an organisation to the market.

Gaining insight into SMEs Global ratings agencies have an established reputation in providing industry commentary, sector benchmarking and credit ratings for large corporates. Credit providers often supplement this information with other domestic industry sources to provide industry benchmarking and market analysis in their local market. The merits of using ratings to assess an entity’s future viability and capacity are clear, however, the penetration of global agencies in the Australian corporate mid-market is limited. Veda Corporate Ratings’ industry commentary and sector benchmarking in Australia goes beyond a sample of large, publicly listed entities to ensure market insights adequately reflect the underlying fundamentals of SMEs.

Further, its breadth of data and coverage of private financials provides thorough intelligence and insight into a sector of the market, and the market as a whole. Veda Corporate Ratings offers credit providers a data set on the SME and corporate mid-market that is unrivalled. Credit providers can use Veda Corporate Ratings to cost-effectively build a clear picture of the likely future viability of a credit applicant.

Early warning signs Ratings, provided by Veda Corporate Ratings, identified the Hastie Group, Cosmopolitan Construction, Kell & Rigby, Walton Construction and Swan Cleaning as being ‘highly vulnerable’ years prior to their collapse. Each of these entities were exhibiting early warning signs, ranging from margin erosion, operating losses, unsustainable growth, deteriorating cash flow, poor debt serviceability, depleted working capital, insufficient capital, overly leveraged, impaired assets, client concentration, and creditor, counterparty and segment exposure, all of which can be signs of future vulnerability. Veda ratings accurately identified these warning signs prior to their collapse. Therein lies the power of Veda Corporate Ratings’ predictive analytics for Australian credit providers servicing the SME and corporate mid-market. Accessing ratings intelligence and insight on the underlying fundamentals of a company makes for informed credit decisioning, supporting targeted growth across good quality credits while minimising loss and exposure to higher risk credits.

Sector insights Ratings are provided by Veda Corporate Ratings across all industry sectors, with a specialisation in the corporate and broader business market. Veda Corporate Ratings’ analysis of the corporate ratings and credit quality of the SME and mid-market segments shows a year-on-year improvement in 2013, however this has not been consistent across all sectors.

The six month results from December 2012 to June 2013 showed a slight improvement in the Corporate Ratings Index (CRI), with 35.7% of entities having an improved rating over that time. The CRI is an appraisal of the corporate credit quality of all mid-market and SMEs as assessed by Veda Corporate Ratings. In light of the release of financial statements, figures are available on a six monthly basis. Veda’s Commercial Credit Demand Index has shown overall business credit growth increase by +0.9%, a slight rise from -0.7% in the September quarter, supported by an increase in business loans of +5.2%. The Construction industry, despite a high level of defaults relative to other sectors, generally improved due to increases in profitability and liquidity, together with lower gearing levels. Insolvencies in this sector originated from those entities that had been assessed by Veda Corporate Ratings as having a very poor credit quality, with classifications of ‘vulnerable’ and ‘credit watch’. Mining, manufacturing and retail have deteriorated due to a variety of factors such as lower margins, higher gearing, poorer serviceability metrics and lower liquidity levels. Despite sectoral differences emanating from Australia’s multi-speed economy, overall performance will be influenced by global markets. Veda Corporate Ratings holds a stable credit outlook for Australian mid-market corporates and SMEs on the basis that global risk events do not derail the recovery process.

About Veda Corporate Ratings Veda Corporate Ratings has a deep penetration and wide coverage of the Australian corporate mid-market, SME market, private sector procurement, and is a leading advisor to all levels of Government. Customers benefit from invaluable sector intelligence and automated efficiencies through the integration of data sources and predictive analytics. Veda Corporate Ratings’ database contains more than 75,000 financial years’ worth of private entity information, and interfaces with Veda’s credit bureau which holds information on 2.5 million registered companies, 2.4 million registered business names and 16.4 million individuals.

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

PPSA Retention of Title Precedent Case – Debtor transfers to Related Entities and Lay-by Sales By Daniel Turk*

Summary

Background

The Supreme Court of Victoria on 17 December 2014 delivered judgment in Lewis and Templeton as liquidators of Warehouse Sales Pty Limited (in Liquidation) (“Warehouse Sales”) [2014] VSC 644 which is relevant to businesses which sell goods on retention of title terms. The Court found: zz A transfer of goods by a debtor to a related entity of the debtor was a transfer free of the retention

Warehouse Sales and WHS2 Pty Limited (in Liquidation) (“WHS2”) carried on the business of selling white and brown goods obtained from suppliers through a number of stores in Victoria. WHS2 is a related entity of Warehouse Sales and operated a store in Wodonga. The liquidators brought proceedings seeking judicial advice as to certain items of property held by Warehouse Sales and WHS2. A number of major suppliers were joined to the proceedings by the liquidators effectively as contradictors. The Department of Consumer Affairs Victoria also appeared.

... trade suppliers may better protect their retention of title rights ... by having a provision in their terms of trade prohibiting sales by their customers to related parties.

Daniel Turk

of title security interest of certain suppliers over the goods. zz The supplier’s retention of title security interests over stock has priority over a claim of lay by sale customers of the debtor. zz All other sales by a debtor, even part paid sales, were free of any retention of title security interest of a supplier. In light of this judgment, trade suppliers may better protect their retention of title rights over stock sold on credit terms by having a provision in their terms of trade prohibiting sales by their customers to related parties.

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

Matters in Issue The proceedings involved the following issues to be determined: 1. Was the sale of goods by Warehouse Sales to its subsidiary entity WHS2, a sale free of the retention of title security interest of the supplier of goods to Warehouse Sales? 2. Were lay-by customers of Warehouse Sales able to complete sales and take goods free of any retention of title security interest of the supplier to Warehouse Sales? 3. Are customers of Warehouse Sales who had part paid for goods (not on lay-by terms) and had not collected their goods, able to complete the sale and take the goods free of any retention of title security interest by the supplier to Warehouse Sales?

Legal

Transfer of goods to the subsidiary WHS2 Initially the liquidator’s conducted the liquidation on the basis that goods held by WHS2 were the property of Warehouse Sales. However on receipt of further legal advice, the liquidators came to the view that WHS2 may have obtained the goods from Warehouse Sales free of any security interest of suppliers to Warehouse Sales. Under the Personal Property Securities Act 2009 property transferred will be free of any security interest when it is a sale in the ordinary course of business of the seller (section 46); or the secured party authorised the disposal of the property giving rise to proceeds (section 32).

His Honour Judge Sifris said the critical question to be determined was whether the sales by Warehouse Sales to WHS2 were of the kind comprising the ordinary course of business of Warehouse Sales and therefore specifically authorised by the suppliers to Warehouse Sales. The features of the dealings between Warehouse Sales to WHS2 included: zz Both companies had the same two directors. zz Warehouse Sales owned 80% of shareholdings in WHS2. zz There was a running account between Warehouse Sales and WHS2 recording sales of goods and a monthly statement was issued to WHS2.

zz Goods were sold to WHS2 at cost value less rebates. zz WHS2 transferred cash amounts to Warehouse Sales daily which was noted in the running account. zz Goods at Wodonga were recorded in the books as owned by WHS2. zz WHS2 owed Warehouse Sales over $2m at the time of the appointment of the liquidators. Apart from one exception, the court found the sale of goods by Warehouse Sales to WHS2 was in the ordinary course of business of Warehouse Sales. The evidence was that the business of Warehouse Sales was not just selling to mum and dad customers at its stores but also through resellers such as WHS2.

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Legal

The court found the suppliers’ terms of trade with Warehouse Sales expressly or impliedly authorised a sale of goods of the kind conducted by Warehouse Sales with WHS2. The position for one of the suppliers, Panasonic, was different in that its terms of trade prohibited sales by Warehouse Sales to a reseller. Accordingly, Panasonic’s retention of title interest remained in goods held by WHS2 even though its goods sold to Warehouse Sales were on-sold to WHS2.

Lay-by sales The court held that suppliers with retention of title security interest were entitled to stock the subject of lay-by sales in priority to the lay-by customer. The main basis for this decision was because the lay-by sale

terms provided that ownership of the goods remained with Warehouse Sales until paid in full by the customer. The lay-by customers had not paid for the goods in full.

Part paid sales The court found that customers, who purchased goods that had not been collected, even if part paid, could complete the transaction and take the goods free of any security interest of a supplier. The court distinguished normal sales from lay-by sales, as there was no condition in normal sales that title remained with Warehouse Sales until paid in full. It should be noted that further proceeds paid by the customer to complete the sale would form part of the security interest of the supplier. Also, if the customer did not complete

Trade suppliers who sell on retention of title terms may lose their claim to stock when the debtor transfers the stock to a related entity.

the sale then the supplier’s retention of title claim applies.

Ramifications for trade credit suppliers The following can be drawn from this case: 1. Trade suppliers who sell on retention of title terms may lose their claim to stock when the debtor transfers the stock to a related entity. In this instance, the suppliers’ claim will be limited to any identifiable monies received by the debtor under the sale. 2. Trade suppliers can better protect their interest in stock by prohibiting sales by their customers to related entities in terms of trade. 3. Whether or not a suppliers retention of title interest has priority over a claim by a part paid customer of the debtor depends on the terms of the sale agreement between the debtor and customer. u *Daniel Turk is Partner at Turks Legal. T: (02) 8257 5727, M: 0408 667 220, E: daniel.turk@turkslegal.com.au, www.turkslegal.com.au

80% OF COMPANIES ARE FACING LATE PAYMENTS, THIS CAUSES 25% OF BANKRUPTCIES Source: Coface in Australia 16

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

Legal

Statutory demands – eliminating the risk By Karl Hill*

Serving a statutory demand has the effect of asserting significant pressure which often results in full payment of the outstanding debt.

Karl Hill

Introduction Statutory demands are one of the most effective legal recovery tools available to trade creditors. The consequences of not complying with a statutory demand, liquidation, could not be more serious. Serving a statutory demand has the effect of asserting significant pressure which often results in full payment of the outstanding debt. There are, however, significant consequences of improperly issuing a statutory demand. For this reason, it is important to be aware of the circumstances where a statutory demand is at risk of being set aside, to ensure that they are only issued in appropriate circumstances.

Genuine Dispute The court will set aside a statutory demand if there is a genuine dispute or offsetting claim in respect of the indebtedness. The threshold test for a debtor to apply to set aside a statutory demand on this ground is fairly low. It is not necessary for a debtor to establish that they have a defence which would succeed at trial. The issue to be determined is whether there is a “genuine dispute in respect of the indebtedness”. The courts have given the following judicial guidance as to how the term “genuine dispute” is to be determined. zz “A plausible contention requiring investigation.”1 zz “A serious question to be tried.”2 zz “... must establish that the dispute is a bona fide and truly exists in fact, and that the grounds

alleging the existence of the dispute are real and are not spurious, hypothetical, illusory or misconceived.”3 While the above judicial interpretations are useful, it is important to bear in mind that the concept is not a particularly difficult one. At a practical level, there are two considerations. 1. Is there a dispute? 2. If so, is the dispute genuine? If a genuine dispute is established, the court will make an order setting the statutory demand aside. In these circumstances, the court will almost always award (substantial) costs against the creditor who issued the statutory demand. At a practical level, it is important that care is taken to confirm that there are no genuine grounds for a dispute prior to issuing a statutory demand. If potential grounds for a dispute exist, it is important that they are brought to the attention of your solicitor when you provide instructions to issue the statutory demand. This will allow your solicitor to provide advice as to whether the alleged dispute is likely to meet the threshold requirement of “genuineness” and/ or give consideration to alternative strategy options for pursuing effective legal recovery action.

Partially disputed debts It may be possible to issue a statutory demand if a debt has been partially disputed. If a debt is partially disputed, the court will only make an order setting the statutory demand aside if the undisputed portion of the debt is less than $2,000.

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

The entitlement to issue a statutory demand for the undisputed portion of a debt was verified in the decision of Commonwealth Bank of Australia –v– Garuda Aviation Pty Ltd 4. In that case, the Commonwealth Bank claimed an amount of approximately $4.5 million from Garuda. Garuda raised offsetting claims and disputed a significant portion of the debt. Notwithstanding, even after those matters were taken into account, a balance of approximately $2 million remained outstanding. The court in this case verified that the Commonwealth Bank’s actions in issuing a statutory demand for the undisputed portion of approximately $2 million were both valid and appropriate. If a dispute or offsetting claim is raised by a debtor, it is important to consider whether it applies to the entire debt, or only a portion. If the dispute or offsetting claim only relates to a portion, an appropriate strategy option may be to issue a statutory demand for the undisputed balance of the debt. In these circumstances, your rights in respect of the disputed portion of the debt will remain unaffected and separate legal recovery action may still be pursued at the appropriate time.

Abuse of process It is an abuse of process to use statutory demands for an improper purpose. It has been held by the courts that it is an improper purpose to use statutory demands as a debt recovery tool to coerce someone into paying a disputed debt. A statutory demand which has been issued as an abuse of process, will be liable to be set aside. The abuse of process rule reinforces the importance of determining whether any grounds for dispute exist prior to issuing a statutory demand.

Technical defects There are significant consequences associated with issuing a statutory demand. In particular, when a debtor company fails to comply with a statutory demand, the onus of proof is reversed. This means that on the hearing of an application to wind up, the debtor company will be presumed to be insolvent unless it can prove otherwise. It is not, therefore, surprising that the court is conscious to ensure statutory demands are issued in the proper form and in accordance with the prescribed requirements of the Corporations Act. If there is a defect in the statutory demand which

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

may cause substantial injustice, the statutory demand will be set aside. The following is a series of examples where statutory demands have been set aside based upon technical defects. zz The statutory demand outlined a claim for a principal debt and a claim for interest. The amount of the claim for interest was not specified and the source of the interest was not particularised.5 zz The debt was owed to two creditors, but the demand was only signed by one of the creditors.6 zz The statutory demand specified one debt amount on page 1 and a different debt amount on page 2. The affidavit verifying the demand did not effectively verify either of the debt amounts.7 zz The statutory demand was issued in Australian Dollar amounts, whereas the original debt was quantified in a foreign currency. The statutory demand did not provide an explanation as to how the Australian currency amount was converted.8 Statutory demands are a very valuable legal recovery tool, but only if they are technically correct. If a statutory demand is set aside because of a technical defect, a costs order will

Legal

almost certainly be made against the creditor who issued the demand.

Conclusion Securing payment from a debtor is often about creating pressure. Where the debtor is a company, one of the most effective ways to apply pressure is through issuing a statutory demand. While statutory demands can be a very valuable tool for creditors, the consequences of getting it wrong and having a statutory demand set aside can be significant. Prior to issuing a statutory demand, it is important to conduct proper internal investigations to ensure that no grounds for a dispute exist. If a genuine dispute as to debt exists, the statutory demand will be set aside. If a debt has been partially disputed, it may still be possible to

issue a statutory demand. So long as the undisputed portion of the debt exceeds $2,000, creditors are still within their rights to issue a statutory demand for the undisputed portion of the debt and pursue an alternative form of legal action (such as issuing proceedings) to recover the disputed balance. Finally, it is important to remember that there can be significant consequences if there is a technical defect in the form or content of a statutory demand and/or affidavit in support. This risk is best managed by ensuring that the person entrusted with preparing and issuing statutory demands on your behalf is an appropriately qualified solicitor specialising in insolvency law. The statutory demand process can be a very valuable tool for trade creditors in pursuing their legal rights

to secure payment of outstanding debts. Ensuring that statutory demands are issued appropriately limits the risk of an adverse costs order, while allowing trade creditors to effectively adopt strategies which maximise their net return. u *Karl Hill is Managing Director of Results Legal. Ph: 07 3234 3200 www.resultslegal.com.au FOOTNOTES

1. Eyota Pty Ltd –v- Hanave Pty Ltd [1994] 12 ACSR 785 2. Eyota Pty Ltd –v- Hanave Pty Ltd [1994] 12 ACSR 785 3. Spencer Constructions Pty Ltd –v- G & M Aldridge Pty Ltd [1997] 76 FCR 452 at 464 4. [2013] WASCA 61 5. Topfelt Pty Ltd –v- State Bank of New South Wales Ltd [1993] 120 ALR 155 6. Gone Farming Pty Ltd –v- Long BC200105594 7. Sewmail (Aust) Pty Ltd –v- Booby Traps Pty Ltd [1997] 23 ACSR 339 8. MEC Import Sales Pty Ltd –v- Iozzelli SRL [1998] 29 ACSR 229

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March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

The importance of timing By Kim Powell*

As knowledge of the PPSA grows, most businesses are becoming aware of PMSI’s and the super priority that a supplier of goods may obtain if it registers within specified time limits.

What can be more frustrating than to register a security interest on the PPSR but still lose out? In the case of Doka Formwork Pty Ltd, the loss was in the region of $1 million. As credit professionals we need to understand how this happened and how to avoid the same fate. For those who want a very detailed explanation, we recommend you read the full judgement: Relux Commercial Pty Ltd (In liquidation) v Doka Formwork Pty Ltd. In this article we will give a simplified overview of the case and focus on the commercial implications of the judgement. The background facts are as follows: zz Doka is in the business of leasing formwork equipment and had an ongoing trading relationship with Relux. zz Most of the equipment in question was delivered into Relux’s possession before 1 January 2014. zz On 20 February 2014 Doka registered a security interest in its goods on the PPSR. zz There were two subsequent deliveries of equipment on 26 February 2014 and 31 March 2014. zz On 7 April 2014 Relux went into administration and 16 May 2014 was placed in liquidation.

Dates are critically important

Kim Powell

As knowledge of the PPSA grows, most businesses are becoming aware of PMSI’s and the super priority that a supplier of goods may obtain if it registers within specified time limits. But this case had nothing to do with PMSIs or even the PPSA itself. Doka was tripped up by the

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

Corporations Act 2001, which has been amended to harmonise with the new Act. The abridged version of section 588FL is as follows: zz if a secured creditor fails to register its interest on the PPSR within 20 business days of the security agreement being created, and zz the debtor company (grantor) has administrators or liquidators appointed, or enters into a DOCA within six months of registration on the PPSR, then zz the security interest will vest in the insolvent company and the secured creditor loses its goods.

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The appointment of administrators on 7 April 2014 was clearly within six months of the date on which Doka registered its security interest, so it was at risk. The cut-off date in the Doka case was 21 January 2014, being 20 business days before the registration of its security interest on 20 February 2014. Accordingly Doka lost all equipment provided prior to 21 January 2014 – which represented the bulk of equipment supplied. However, it was protected for the equipment delivered on 26 February and 31 March 2014.

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Caught out by something the law never intended This is an unintended consequence of the law and even the judgement notes that this is a “seemingly draconian result”, with Doka bearing the consequences. When the PPSA first came into effect it was accompanied by an explanatory memorandum that

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March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

explained the thinking behind the provisions of the Act and which included comment on the Corporations Act amendment. The intent of the amendment was to prevent companies with knowledge of actual or impending insolvency from granting security over assets to friendly parties. It was never intended to catch companies like Doka, but the law is very clear and there is no room for discretion. Even if we feel the law may be unfair, we need to accept it for what it is and take appropriate steps to protect our businesses. While every business is unique and circumstances will differ, there are three broad courses of action: zz Choose to take the ‘six month risk’, but register everything on the PPSR as soon as possible so the risk is contained and the clock starts ticking. Do not wait until you have concerns about the financial stability of a customer. zz If you have a single or primary transaction, such as in the case

of Doka, you can apply to the Court under section 588FM of the Corporations Act to have a later time fixed for registration so that you are no longer at risk. This is of course expensive and there is no certainty that the Court will allow a later date to be fixed, particularly if it may prejudice the rights of other creditors. zz For businesses with an ongoing trading relationship, such as suppliers of goods with retention of title, there is a third alternative. This is to update and re-issue PPS compliant terms of trade as a new security agreement to all customers and make sure that registration is completed within 20 business days. You will not be protected for past supplies but the future will be secure. If you believe your business is at risk and would like to discuss options for protecting your interest in goods or equipment supplied, please get in touch.

Even if we feel the law may be unfair, we need to accept it for what it is and take appropriate steps to protect our businesses.

Timing is everything. Make sure you understand the cut-off dates for goods registered on the PPSR. u Note: Doka was not a member of the AICM or a client of EDX at the time of this decision. *Kim Powell is co-founder of EDX, a national firm specialising in PPS registration and consulting. EDX has its roots in New Zealand where similar legislation was enacted in 2002. In his earlier career, Kim has been an insolvency practitioner, headed the commercial credit recovery division of a major bank, as well as a period as a business banker advancing funds on a secured basis. This background made the PPSA a natural area of interest. Kim moved to Australia in 2010 to lead EDX’s entry in to the local market and is based in Melbourne Contact Kim: kim.powell@edxppsr.com.au or phone 0410 475 100. To discuss your registration policy or any other PPS matter, call head office on: T: (03) 9866 4559, E:enquiries@edxppsr.com.au We will arrange for one of our consultants to contact you for an obligation free discussion about your business. DISCLAIMER: This article is provided for general guidance only and should not be construed as legal or professional advice. In particular, it should be noted that the Personal Property Securities Act 2009 (Cth) is relatively new law in Australia and as such has produced little case law precedent. The application of the Act will be subject to interpretation in the fullness of time and may well supersede or contradict the observations made herein. To the maximum extent permissible by law EDX Australia Pty Ltd, EDX Software Ltd and their respective officers, employees and agents, disclaim all liability in respect of the content to any reader or anyone else who comes to learn of its content. No person is entitled to rely upon or act on any comments made, but instead should seek appropriately qualified opinion prior to taking or refraining from taking any action.

Australia’s trade was worth nearly $670 billion in 2013-2014 Source: Coface in Australia 22

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

aicm Can We Help? AICM receives questions from Credit Managers that it puts to a panel of lawyer insolvency experts and credit professionals to answer. The brief is not only to answer the question but to look into the root cause of the problem and contribute strategic thought. All articles contain general information only. They are not legal advice. You should seek your own legal advice if faced with a similar situation.

Legal fees incurred by Insolvency Professionals Question Hardly a day goes by without receiving notification of the appointment of an Administrator, Liquidator or Receiver and Manager (ALRM) and then the reports flow through. I notice the reports always include a not insubstantial amount of fees paid to solicitors and wonder why this is so. Often the legal fees are equal to the ALRM’s fees. This is a substantial drain on funds and reduces or eliminates dividends to creditors. Why do ALRM’s find the need to seek such legal advice? Are they not knowledgeable in the handling of the appointments? Why do they use them to submit initial claims for alleged preferential payments as this would seem to double the cost ie the ALRM reviews the matter and then the Law Firm does the same? I can understand why they might be used to pursue payment by why doesn’t the ALRM make the initial claim? How do they select the Law Firm? Are there any commissions paid? Is this required to be reported? Why don’t they negotiate reductions in fees especially for the volumes of business they pass to them? I know the firms we use to assist us with collection action are very competitive and commercial. - National Credit Manager Sydney MICM CCE

and to understand the decision process if the issue is raised. Before authorising payment of disbursements, the ALRM must ensure that: zz the task has been properly performed; and zz the quantum of the professional service fee is as agreed or is reasonable. (Code clause 14.10.3A) So while the Code does not require an ALRM to negotiate reductions in fees, it does require the ALRM to act as a reasonable person incurring an expense on their own behalf and review the bill to ensure that it is as agreed and reasonable. In respect of commissions, the Code specifically provides that an ALRM must not accept any referral that contains, or is conditional upon: zz the giving or receiving of referral commissions, inducements or benefits; zz the giving or receiving of spotter’s fees; zz the giving or receiving of recurring commissions; zz understandings or requirements that work in the administration will be given to the referrer; or zz any other such arrangements that restrict the proper exercise of the ALRM’s judgement and duties. (Code clause 6.6). A copy of the Code is available on the ARITA website www.arita.com.au. - ARITA (Australian Restructuring Insolvency & Turnaround Association)

Response 1 ALRMs have the right to obtain legal advice, in the same manner as they may engage other services such as debt collection agencies, real estate agents and auctioneers; to assist with the efficient operation of an insolvency administration. Whether an ALRM chooses to use the services of a solicitor or not, and at what time those services are engaged is a matter of professional judgement for the ALRM and would be dependent on the particular circumstances of the administration. ARITA’s Code of Professional Practice (“Code”) provides guidance on the use of legal advisors and the incurring of disbursements (i.e. non remuneration expenses). Disbursements may only be claimed if they were necessary and properly incurred (Code clause 14.10). Legal fees are a disbursement in an insolvency administration. In incurring a disbursement, an ALRM must use their commercial judgment, adopting the perspective of, and acting with the same care as, a reasonable person exercising care and skill would act in incurring expenses on their own behalf. An ALRM may engage a solicitor without creditor approval, but only after exercising proper commercial consideration. An ALRM should consider issues of: zz expertise; zz quality; zz timeliness; and zz reasonable and appropriate cost. ALRMs must assess each engagement of a professional service provider in terms of the interest of creditors and their fiduciary responsibilities. Unless the disbursement is insignificant, the ALRM should document the decision making process, identifying why the work was necessary and why the particular firm or professional was engaged. While the approval of creditors is not required, creditors are entitled to be informed of

Response 2 Each insolvency administration brings different issues. Usually the insolvent company would have been party to many contracts that require a review by lawyers to advise on the company’s rights. Further, the PPSA has raised many new issues in its infancy which requires external administrators to seek legal assistance. The other matters which lawyers are often engaged include: zz preparing documents of sale zz examining voidable transactions zz enforcement of claims (eg debtors) zz assisting in assessing creditor claims (which must be assessed in a quasi-judicial basis) zz drafting Deeds of Company Arrangement zz responding to correspondence from solicitors for creditors It is not the case that insolvency administrators do not know their job, it is more the case that each job involves many legal issues that may impact on the return to creditors – usually insolvency practitioners select lawyers who are experts in insolvency who they know provide good advice and assistance. If there is some association as between an insolvency practitioner and the lawyer which is relevant to how the insolvency practitioner was appointed, that needs to be disclosed in a declaration of relevant relationships and indemnities completed by the insolvency administrator at the commencement of an appointment. Lawyers are not able to receive commissions – the methods of charge are regulated under the Legal Profession Act. It is often the case that insolvency practitioners (who are themselves often caught with limited funds) request their lawyers to undertake work at a discount for the benefit of the insolvent estate. - Joseph Scarcella, Partner at Ashurst – Australia

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Can We Help? Caveat Priority

registration. An equitable charge is actually created at the time

Scenario

can come much later. The date of the Guarantee in your favour

of signing the Credit Application or Guarantee and the caveat

Our Customer, BMS Pty Ltd, fell into arrears. We reviewed our

is earlier than supplier Z. It would appear that you would be

paperwork and noted we had personal guarantees from “X”

next in line after the bank to the surplus proceeds after sale.

and “Y” – the two owners/shareholders of BMS. We undertook

However, as with all general rules there are exceptions. In cases

a real property search and identified a dwelling owned by X &

like this the question of ‘Postponing Conduct’ by the earlier

Y. The search showed the property is subject to a mortgage in

interest holder may affect the priority of the equitable interests

favour of a bank and a caveat to “Z” – a well known supplier

in the property.

in our industry. We then also lodged a caveat over X & Y’s Postponing Conduct

property. My question is one of priority with respect to the caveats.

Postponing Conduct is some type of conduct or even

The owners are actively marketing the property and are likely

inaction, by the earlier in time interest holder that deprives

to easily clear their debt under the bank’s mortgage. It is not

them of their priority over later created interests. There

expected they will be able to clear both of the debts to “Z”

is no settled list of the types of conduct that constitutes

and us.

Postponing Conduct and the Courts have made it clear that

Who stands next in line after the bank and why?

it will always depend on the facts of each case. However,

The caveat position is as follows:

it has been held in numerous cases that an excessive delay

Caveator

Date Caveat Lodged

Date of Guarantee

1st July 2014

15th May 2013

“Us” ie poor hard 1st August 2014

10th April 2007

done by supplier

in lodging a caveat or a failure to lodge a caveat at all, may amount to Postponing Conduct. There is insufficient information in the current facts to determine whether there has been Postponing Conduct by the creditor. The seven year delay in lodging a caveat may

- National Credit Manager Sydney MICM CCE

Response Your question raises a good range of issues common to many credit managers across all industries. It is not unusual for Terms and Conditions of Trade and/or Guarantees to contain a Charging Clause in an attempt to obtain security for an account.

be considered Postponing Conduct especially if supplier Z can actually show they had relied upon there being no other competing interests registered on the property when they agreed to take their charge. Can you show that they did somehow have notice of the earlier interest? It is also important to note that the burden of proving Postponing Conduct rests with the holder of the later equitable charge, in this case, supplier Z. So it is for the later affected

Charging Clause The starting point is to ensure that the Guarantee contains an effective Charging Clause. Typically, a Charging Clause will provide the creditor (“chargee”) with security over the real property (land) of the guarantor (“chargor”) in the form of an equitable charge. In granting a charge, an “equitable interest in land” is being created in favour of the creditor. Depending on wording, the charge may be wide enough to charge all personal property (chattel) assets as well as real property (land) assets. That would require a Personal Property Securities Registration. We will presume for this account that the charge only relates to real property (land). Caveats How do caveats interact with equitable interests? Importantly, a caveat does not create an interest in real property (land) but is simply a registration system for notifying the world that an equitable interest exists. In this case, the caveats notify that both You and supplier Z have equitable charges over the property. You each have the same type of legal interest.

party to prove that the earlier equitable interest should be deferred because of Postponing Conduct. There is a lot of room for tactical negotiation in this area. What is best practice? To avoid a ‘priority’ dispute, in a perfect world you would register each and every charge when created, namely when the Credit Application or Guarantee is signed. This is unlikely to be cost effective or practical. To minimise your risk, you may consider regularly monitoring:zz your debtor accounts for any warning signs of financial stress. If concerns arise you should effect your registration against real property immediately; zz occasionally checking LTO title searches of the debtor/ guarantor’s real property to watch any registrations by other creditors. If there are, you ought register your interest by a caveat and give notice to the other caveators; zz do you ask in your Credit Application or Guarantee documents if any other charge interests have been granted? and

Priority Upon sale, who is first entitled to the surplus? Generally, where there are two competing interests of the same type, priority in time of creation has precedence rather than priority of

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

zz can you see from the PPSR searches, the other industry suppliers your client is dealing with and do you know if their terms involve charging clauses? Charging clauses are a unique “device” where an unsecured

aicm Can We Help? debt can become secured. They can lead to a safe, preference

prove to be of great strategic advantage upon insolvency. The

free recovery. They can be used for commercial leverage if

use of such a clause should always be subject to informed

the refusal to lift a caveat is stopping a sale. They can get

legal advice. In this case the creditor should argue “we have

complicated if you find that the charge has attached typically

the earlier created equitable interest” although creditor Z will

to a husband’s interest in land, where the property is jointly

counter with “you didn’t register for seven years and that’s

owned by the husband and wife. Imagine the complexities

Postponing Conduct!”

if the wife asserts a greater interest by virtue of her claims, possibly in the Family Court, against the husband. Perversely

My advice, get a lawyer who knows how to outfox the other lawyer!

that position can actually give you reasonable leverage.

- James Neate, Partner, Lynch Meyer Lawyers , AICM National Legal Affairs Director

Provided the clauses are drafted and used correctly, they also

Cost of defending preference claim

Most unfair preference claims settle, with the creditor able to prove for the balance of its debt in the winding up of the

Question

company. But what about the legal costs incurred in defending

We have been pursued for a preference claim and the claim

the claim? Here, we have a creditor who has settled a claim for

has varied between $75,000 and $800,000. This has included

$7,000 and incurred $10,000 in legal costs. Can the creditor

statements of claim etc. Although it is a nonsense claim it is

prove for $17,000 comprising the settlement amount and its legal

proving costly to defend so we have negotiated a settlement

costs?

of $7,000. To me that says it all, as regards the strength of

Unfortunately for the creditor, while it will likely be able to

the Liquidator’s claim, however it is too time consuming to

prove for the $7,000 settlement amount, it will not be able to

defend further – we have already spent $10,000 in legal costs.

prove for the $10,000 in legal costs it has incurred.

We will be adding the $7,000 preference payment to our

A creditor may prove for all ‘debts’ and ‘claims’ in the winding up of a company, including ‘contingent’ and ‘future’ debts and

proof of debt. My question is can I also include in our amended proof of

claims, as long as the circumstances giving rise to the debt or

debt the $10,000 in costs paid defending this spurious claim

claim occurred prior to the company entering administration or

albeit the costs were incurred after the date of Liquidation?

liquidation.1

Our agreed terms of trade with the company in liquidation

Where a creditor settles an unfair preference claim, the

allow for recovery of all costs etc i.e. “… any costs and expenses

creditor’s costs of defending the claim are not a ‘debt’ or

(including any commission payable to any commercial or

‘claim’ against the company because the creditor has no

mercantile agents and legal costs) incurred by Us in recovering

right against the company to recover the costs. If a court

any unpaid amounts under this Hire Agreement …”

were to make a costs order in the creditor’s favour, the

– National Credit Manager Sydney MICM CCE

creditor may be able to prove for the costs as long as the proceeding began before the company entered administration

Response 1

or liquidation.2 But that will not be the case in an unfair

Unfair preference claims are among the most common disputes

preference claim, which can only be made by a liquidator after

arising in the insolvency context. On its face, the law is clear: if

the company has entered liquidation.

an insolvent company pays an unsecured debt in the 6-month period leading up to administration or liquidation, the liquidator

A creditor may have a clause in its contract with the company to the effect that it may recover: “… any costs and expenses incurred in recovering unpaid

can claw back the payment.

amounts under this Agreement …”

However, this apparent simplicity hides a number of uncertainties. What is a ‘unsecured debt’? Does it include

Does this help? Unfortunately not. A liquidator considering

money paid pursuant to a Retention of Title clause, or a Bank

a proof of debt would likely reject the contention that the

Guarantee? Does the so-called ‘running account’ defence

costs of defending an unfair preference claim were ‘incurred

apply because the creditor supplied the company during the

in recovering unpaid amounts’. Instead, they are better

6-month period? Can the liquidator prove that the company

characterised as costs incurred in retaining paid amounts or in

was insolvent at the time of the payment? And, perhaps most

resolving the liquidator’s claim. More fundamentally, the costs

contentiously, can the creditor make out the defence that, at the

were still incurred after the company entered into liquidation.

time the payment was made, it had no reasonable grounds to

The creditor might argue that the ‘circumstances giving rise’ to the costs occurred when the company made the insolvent

suspect that the company was insolvent? These questions mean that unfair preference claims are rarely

payment and that it had a ‘contingent’ claim from that date. But

clear-cut. Nevertheless, liquidators will sometimes make claims

the case law does not support that position and the better view

against all creditors who might conceivably have received an

is that the creditor’s claim under the contract only arose once it

unfair preference from the company. Defending these claims will

incurred the costs, after the company entered administration or

often involve incurring legal costs.

liquidation.

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Can We Help? Readers faced with a similar situation would be well advised to ensure that any costs incurred in defending an

Preference Claim Action Timing

unfair preference claim are taken into account in the terms of

Question

settlement, such that the terms contemplate payment of costs

We have received a letter of demand for alleged preference

in addition to the settlement sum, or the settlement sum is

payments of approximately $200K from a small regional legal

reduced on account of the creditor’s costs.

firm and dated 3rd October 2014. This follows demands by

– Matthew McCarthy is a Managing Associate and Glyn Ayres is a Lawyer in the Corporate Insolvency and Restructuring practice group of Allens in Melbourne.

the Liquidator in September 2012. We attempted to discuss this matter with the law firm in the weeks after receiving their letter of demand. On Thursday 11th December 2014 we again discussed it with the law firm and offered to settle the matter

Response 2

for $2K. They advised they would consider our $2K settlement

The key principle in the consideration by a liquidator of any

offer but had to file their action against us the following day

proofs is that the debt must arise before the day on which the

as their opportunity was about to expire and the chances of

winding up of the company is made. Further, for there to be

acceptance of our offer were remote.

a debt owed by the company there needs to be a contractual liability by the company for the debt. In the present case, the creditor has spent money on its own

The Liquidators were appointed Administrators on 15th December 2011 and I understand there is a 3 year period in which to take action on a preference claim. When does the

lawyers to defend a preference recovery action commenced

clock start ticking and what is the minimum action which must

by the liquidator. There is clearly a debt owed by the company

be taken within the time constraints e.g. issue of demand, filing

to its lawyers for the legal advice and representation. Whether

of paperwork, service of paperwork etc?

the incurring of these legal costs by the creditor is also a

– National Credit Manager Sydney MICM CCE

debt enforceable against the company will be dependent on the contractual arrangements between the creditor and the company entered into pre-liquidation. The creditor is going to have multiple problems in persuading

Response Unfortunately for creditors (often trade suppliers), a liquidator

the liquidator to admit the proof of debt for the $10,000 costs,

has 3 long years from the relation-back day to make an

for the following reasons:

application to Court to recover a preferential payment.

The contractual arrangements between the creditor and the

The reality of the insolvency profession is that liquidators are

company, being the terms of the hire agreement, relate only to

often heavily burdened, so the less dynamic or less pressing files

costs and expenses incurred in recovering a debt under the hire

may be left inactive until slower times or when deadlines are

agreement. There is nothing in the contract to cover legal costs

looming.

incurred in the defence of a preference recovery action by a

For this reason alone creditors should not assume that because a questionable transaction was dealt with, on a

liquidator; The legal costs have all been incurred after the date of the

preliminary basis, and not pursued by a liquidator at first

winding up and therefore offend the basic principle that proofs

instance, the claim will not be revisited. Unfortunately, creditors

must relate to pre-liquidation debts;

cannot feel assured that, with each day ticking over, it is less

When the creditor decided to compromise the liquidator’s claim for the amount of $7,000, if it wanted to seek costs, then it should have sought to include a separate term in the settlement agreement for payment of costs. When faced with a weak claim for recovery of a preference,

likely that the transaction will be pursued. When is the last opportunity, for a liquidator to pursue a voidable transaction and what do they have to do? In short, liquidators will have 3 years from the relation-back day to take action to pursue a voidable transaction.

creditors will not be able to recover their costs unless they

The relation-back day is the day that the winding up of the

can broker an agreement with the liquidator to pay costs.

company is taken to have begun. A company can be wound up in

Most liquidators will be very unwilling to do this unless there

different ways, as set out in Division 1A of Part 5.6. Most commonly

is obvious evidence in the hands of the creditor to show that

the relation-back day will be the day on which either an order is

the liquidator’s claim will fail. In this example, if the creditor

made that the company be wound up and a liquidator appointed,

remained adamant to recover costs, it really had little choice

or the day on which the company resolves by special resolution

but to run the proceedings. If the creditor had won, costs

that it be wound up voluntarily. Where the company was under

would have been awarded and made recoverable against the

administration prior to being wound up, the relation-back day may

liquidator.

be deemed to be that earlier date on which the administration - Sam Pearlman, Partner, Curwoods Lawyers

FOOTNOTES

began. As a general rule of thumb for creditors, the relation-back day will be the day the liquidator was appointed. If the liquidator wishes to pursue a voidable transaction, the

1 Corporations Act 2001 (Cth) s 553.

minimum action he or she must take is to file an application

2 S ee Re Pasminco Limited [2002] FCA 231; (2002) 20 ACLC, [32]– [41]; Expile Pty Ltd v Jabb’s Excavations Pty Ltd [2004] NSWSC 284; (2004) 22 ACLC 667, [25].

with the Court before the expiration of 3 years from the

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

relation-back day. The normal rules as to service will apply to

aicm Can We Help? the application and accordingly service may take place some

v Civil Aviation Authority [1994] FCA 1571; Kazar (Liquidator) v

time later (e.g. under the Federal Court [Corporations] Rules

Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq)

2000, the time for service must be as soon as practicable after

[2011] FCAFC 136.

filing and at least 5 days before the hearing) or (e.g. under the

This part of the law (Division 1A of Part 5.6) is not easy.

Uniform Civil Procedure Rules 2005 (NSW), the time for service

If you are concerned that an application to the Court was

must be as soon as practicable after filing).

not filed on time, you should seek legal advice. In some

As a side note; liquidators are able to extend the period of

circumstances a liquidator may have a limited time to pursue

time to make that application to the Court for orders under

a voidable transaction, such as when the company was under

section 588FF, however this application for an extension of time

administration or a DOCA for a lengthy period of time and then

must be filed within the 3 year time period.

the DOCA failed and the company was liquidated.

Despite the fact that liquidators have 3 long years to

- Rebecca Ross and Geoff McDonald, Windeyer Chambers

investigate and pursue a preference, creditors should be proactive in addressing any demand they may receive during that period for the repayment of a preference. Silence on these issues is not golden. If the liquidator returns at the 11th hour and files an application with the Court for an order that the transaction is voidable and the money is to be repaid the liquidator may also seek an order for the payment of interest. In the ordinary case the Court will allow interest to run from the date a demand for the recovery of the preference was made;

Rebecca Ross, Solicitor, Gavin Parsons

Ferrier and Knight (As Liquidators of Compass Airlines Pty Ltd)

Geoff McDonald, Barrister at Law

As you will see, the proceedings have been listed for first directions at 9:30am on Wednesday, 11 February 2015.

Electronic Service of Originating Process Question Can a Statement of Claim be served electronically and if so on what basis ie must it be attached or can it be in a link? My case in point is I have received an email from a paralegal at a NSW law firm who are acting for a Liquidator who is claiming we received a preferential payment. The email says:

From: Para Legal [mailto:plegal@j&dlaw.com.au] Sent: Thursday, 18 December 2014 1:50 PM To: Hard Done By Creditor Pty Ltd Subject: In the matter of Not So Good Customer Pty Ltd (in liquidation), NSD1234/12

Would you please confirm you accept service of attached documents by return email. Please contact us if you wish to discuss this matter further. Regards Para Legal Senior Paralegal T (02) 1234 5678 j&dlaw.com.au Interestingly enough 5 minutes later we received the following email:

Dear Sir Johnno and Davo in their capacities as joint and several liquidators of Not So Good Customer Pty Ltd (in liquidation) v Poor Hard Done By Creditor Pty Ltd Federal Court of Australia, New South Wales registry, proceeding no. NSD1234/12

-----Original Message----From: Para Legal [mailto:plegal@j&dlaw.com.au] Sent: Thursday, 18 December 2014 1:55 PM To: Hard Done By Creditor Subject: Recall: In the matter of Not So Good Customer Pty Ltd (in liquidation), NSD1234/12

We attach by way of service: Originating Process filed 11 December 2014; Affidavit of Johnno sworn 28 November 2014; Exhibit J-1; Statement of Claim filed 11 December 2014; and Genuine Steps Statement filed 11 December 2014,

Para Legal would like to recall the message, “In the matter of Not So Good Customer Pty Ltd (in liquidation), NSD1234/12”. If the original email was effective service was this effective cancellation of that service? The second issue on this matter is that the Insolvency

contained in the following dropbox link: https://www.dropbox.com/sh/mwgg3j2mlaw94r3/AABpFugJl

Firm of Johnno & Davo were appointed Administrators 15th December 2011 and Liquidators 1st February 2012. I understand they have 3 years in which to instigate action for a preferential

Please let us know if you have any difficulty accessing the documents.

payment. When does the clock start ticking? What must they

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Can We Help? do within the 3 years? FYI in this case we have correspondence

The same thinking would apply to the use of cloud services.

from the Liquidator stating a Relationship Back Date of 15th

As mentioned above, some jurisdictions recognise informal

December 2011 and have had previous letters of demand and

or deemed service of documents by proof of service (not Qld

discussions with the law firm in the months prior to them

incidentally), which may allow a plaintiff to prove valid service

sending the above emails.

through electronic means even in the absence of an agreement

- National Credit Manager Sydney MICM CCE

specifically permitting service by electronic means. The final word on electronic service of documents should be

Response

in relation to email itself. In Austar Finance v Campbell [2007]

Documents which initiate court proceedings, including

NSWSC 1493, Austin J said that email cannot constitute service

statements of claim, (originating processes or OP), are required

unless either:

to be personally served in every Australian jurisdiction. Where

zz it is shown that the documents electronically transmitted

service upon an individual is concerned, personal service is effected by leaving a copy of the OP with the person to be served or, if it is not accepted, by putting the copy down in their presence, and telling them the nature of the OP. If the

have actually been received in a readable form by the person to be served; or zz the case falls within one of the special exceptions permitted by rules of court.

defendant is a company, an OP may be served by either leaving

Some jurisdictions have rules for when emails are taken

it or sending it via post to the registered office of that company,

to have been received, many others do not. In short, this is a

serving it personally on the director, or if the company is

complex and unsettled area of civil procedure which differs

liquidation, it may be served either by leaving it or sending it via

amongst jurisdictions. The take home message is to be familiar

post to the address of the office of the liquidator most recently

with the rules of court in your jurisdiction, and except in

notified to ASIC.

certain specific circumstances, the use of electronic means of

Personal service does not include electronic methods of service. One exception exists in Tasmania where the Registrar may approve certain bodies to allow them to serve documents electronically. However, OPs can be served electronically in certain circumstances: 1. Subject to a court order for substituted or presumptive service, such that service may be validly effected by various electronic means such as email or Facebook (all jurisdictions); 2. Where an express provision in an agreement between the parties provides for some form of electronic service (most jurisdictions); 3. Where an OP is communicated to a defendant electronically and its receipt is proven, or an answering document is filed in response to an OP received through electronic means (some jurisdictions only). In the example given, the original email requested consent to the method of service, which was chosen, namely the use of a Dropbox. In Conveyor & General Engineering Pty Ltd v Basetec Services Pty Ltd and Anor [2014] QSC 030, Basetec sent emails to CGE which directed them to documents contained in a Dropbox facility. McMurdo J had to firstly consider whether the emails containing the link to the Dropbox themselves constituted valid service of documents. In considering the definition of “electronic communication” under the Electronic Transactions (Queensland) Act 2001 (ETA), his Honour held that the emails from Basetec did not constitute valid service because “…the material within the Dropbox was not part of an electronic communication as defined.” Therefore, in the example, the email itself does not constitute service. Secondly, the relevant legislation, which is mirrored in many Australian Jurisdictions, required agreement between the parties to the use of the Dropbox for valid service to occur.

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

communication to serve OPs will be invalid. Time Limit on Actions for Preferential Payments Section 588FF(3) of the Corporations Act 2001 (Act) provides that an application by a company’s liquidator to set aside a voidable transaction, which includes a preference transaction, may only be made: “(a) during the period beginning on the relation-back day and ending: (i) 3 years after the relation-back day; or (ii) 12 months after the first appointment of a liquidator in relation to the winding up of the company; whichever is the later; or (b) within such longer period as the Court orders on an application under this paragraph made by the liquidator during the paragraph (a) period.” ‘Relation-back day’ has meaning depending on the circumstances from the interaction of Section 9 and Division 1A of Part 5.6 of the Act. In our example, Administrators were appointed to the company on 15 December 2011, and Liquidators were appointed on 1 February 2012. The appointment of Administrators for our example is significant. The relation-back day is the date when the Administrators were appointed, in this instance 15 December 2011. That means that the Liquidator had until 15 December 2014 to issue proceedings for the recovery of the preference, and unless the Liquidator had already applied to the Court within that timeframe for an order extending time, the Liquidator will be statute barred from bringing the preference claim. – Mark Wenn, Partner, Commercial Disputes & Insolvency, Mills Oakley Lawyers

Mark Wren

Development

Speaking up a storm ... maker or breaker By Peter Buckley*

Peter Buckely in action as MC at the 2012 National Conference on the Gold Goast.

If you’ve been to just one conference, function or event in the last 12 months then you’ve probably already seen it happen: The speaker who manages to destroy a perfectly good presentation. I like to think it’s the kind of thing you probably wouldn’t wish on your worst enemy, seeing someone squirming at the front of the room as they try to deliver a message or sell their product. It can be as embarrassing, difficult and disconcerting for the audience as it is for the presenter and, in some way, it would be good if you could help them through it. But, sadly, that can’t be the case as they steadily go down in flames. A few simple changes to the approach of making a presentation

can change the result completely and ensure you are not amongst the crash and burn fraternity.

You want me to speak … Hell No! Some people would rather feed their right arm to a crocodile – any crocodile, one of the late Steve Irwin’s mates if necessary, rather than stand up in front of a group of people and speak. And it doesn’t have to be a room full of powerful businesspeople that can make you want to run, screaming, from your predicament. It might be in front of a bunch of old school friends, your footy team end-of-season night, or a special family gathering like a birthday or wedding.

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

Development

My sister-in-law, who is an eloquent, intelligent woman and a former teacher, recently had to have a chat at the birthday of a long-time friend in front of a bunch of other lifelong friends. She says she’s never felt so violently ill in all her life as in the few hours before making the speech, and was sure she was going to be violently ill in the minutes beforehand. She remembered most of the things I’d suggested for making it easy on her and delivered a very good speech. Her friends thought it was terrific and still talk about it. She remains in a state of delight!! The fear for people is real and not to be discredited, but there are ways to overcome the nerves, maintain the focus and deliver, at worst, a passable product.

My knees were shaking... So, what are those fears? Usually “making a goose of yourself” is up there with the best of them, being “watched by everyone”, “under the microscope” or “under the spotlight”, having people “question what you’re saying” or “question what you look like” are all credible explanations as to why you might hate to have to be up on stage. The adrenal gland does some wonderful things to help us during times of distress. For instance, if you’re being chased by an animal that wants you for lunch you can run faster than normal, you can lift heavier things to get them out of your way, and your senses are

heightened. Likewise, for athletes, adrenalin pumping into their system just before the start of a race can give them that edge when the starter’s gun goes off. After a short while the adrenalin is dissipated in your system and the effect wears off. Yep, you’ve survived the advances of another raging bear or you have the winner’s gold medal happily bouncing on your chest during the victory lap. But those very same positive affects from those “nerves” can work similarly against you, particularly when you are locked into a situation of standing in front of a group of people you are about to speak to. Instead of delight, despair can be the result with a racing heartbeat, dry mouth, clammy hands and perspiring from places you’ve never perspired from before. You can end up with quick, radical, involuntary movements, a loss of focus from your brain and light-headedness. Have you heard people say “my nerves got to me”? They’re dead right!

Breathe to relieve... Breathing comes pretty-much naturally for us. It’s not even something you have to think about unless you’ve just sprinted for the last train and end up gasping for air as other passengers look at you as if you’re some kind of idiot. But it’s about the first thing we forget to do when we stand up in front of an audience. Making sure you

The adrenal gland does some wonderful things to help us during times of distress. For instance, if you’re being chased by an animal that wants you for lunch you can run faster than normal 30

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

breathe, steadily, and at the right time (this is what punctuation is for) does a number of wonderful things. It slows the process down, oxygenates your brain and gets your rib cage moving, which leads to a relaxation of muscles that either work comfortably for you or contribute to the speaking anxiety. Steady breathing also counters hyperventilating, the opposite of not breathing, both of which will see you fall down in a funny faint. Ideally this breathing process starts well before you get anywhere near the actual speaking. Also, countering the quick and radical movements needs to be done ahead of time as well. Former champion golfer, Gary Player says after his shower in the morning, before he played a competitive round of golf, he would dry himself moving the towel slowly and steadily instead of his usual rigorous drying method. Why? Because it meant he was keeping his system calm and slow so that, when he stood on the first tee, his first swing was steady and rhythmic instead of ballistic and sending the ball into the trees. Speaking is the same. It’s easier to speed up, if you need to, during the speech than it is to slow down near the start. If you have to get up from a chair or move to a central point to speak, move slowly. In fact, move and speak slower than you think you are in the early stages.

Happy faces… Happy places... We humans are generally comfort zone animals, especially when we’re under duress. When we’re short on time we’ll generally head to a car park in a shopping centre where we’ve been a number of times before because we’re comfortable with the area. When you’re speaking in front of a group of people you can do the same thing by finding some comfortable faces. Pick out a face on your left, one on the centre left, one on the centre right and one on your right hand side. In the

Development

Happily surviving the “nervous starter” phase, or getting through it only marginally scathed, and making speeches and presentations on a regular basis can be very uplifting.

some bad habits that impact on the result of the golf swing. Yet you feel comfortable. The same goes for speaking! Repetitive sayings, movements, inferences and tones can all negatively impact on your presentation, without you actually realising you’re doing it.

Aw... Shucks… Thanks... early stages just direct your speech to those people. As you get a little more comfortable in your delivery you can include other faces until the whole space is a happy place. One of the most regular questions I get asked is “what do I do with my hands?” Funny thing is it’s not something we usually think about, but when we get in front of people we become conscious of these things and wonder how to counter it. If you’re flapping your arms around more than normal it’s probably your own way of burning off the nervousness. Some people have to talk with their hands so the easiest thing is to remember to keep your elbows in and just use your hands. If you start making a heap

of wild gestures people might think you’re having some sort of seizure – the old “not waving, drowning” adage.

No worries… I present all the time... Happily surviving the “nervous starter” phase, or getting through it only marginally scathed, and making speeches and presentations on a regular basis can be very uplifting. It’s at this time we revisit what and how we’re doing it. Golf has some great parallels with public speaking. For example, the way you set yourself in front of the ball, before you hit it, can alter marginally every time you do it. After a while, without even recognising it, you can develop

Escaping the scene, even to the back of the room, I believe is greatly unfortunate. I’m not suggesting you should hang around sucking every last vestige of applause from the audience, but accepting applause and congratulations for delivering a speech is part of the finalisation of the process – a rounding off, so to speak. A well-delivered presentation, and the kudos from it, is extremely empowering, self-fulfilling and can put you on the leadership radar. Just ask my sister-in-law! u *Peter Buckley is a Speaker and Coach on Presentation Performance Techniques, and a Mentor in Management and Staff Development. Go to www.peterbuckley.com.au

You have what it takes to be the 2015 Young Credit Professional. 2014 saw our first joint winners Anna Goulubeva of Hilti and Rebecca Edmiston of Bendigo and Adelaide Bank. Now it is your chance to be in the running for the 2015 Young Credit Professional Award, sponsored by D&B, as nominations are now open. If you are under 30 years of age as at 30 June 2015 and work in any facet of the credit industry such as collections, customer service, factoring and invoice discounting, credit analysis, credit control, credit scoring, leasing and equipment hire, risk and/or loans, then you have what it takes to be this years Young Credit Professional. Each Division Winner wins their airfares, accommodation and registration costs to attend the AICM National Conference to be held at the Sofitel Sydney Wentworth, on 14–16 October 2015 The National Winner receives $1000 cash prize and Educational Scholarship from AICM (valued at $2,000). To register your interest and have an AICM representative contact you with further information and assistance go to www.aicm.com.au

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Training News Enrol with AICM Online and save, as from 1 March 2015 $$$ Legal

When you study with AICM, you’re online but never alone. Our online system and course resources have been developed with consultation of the Credit Industry. AICM online is available 24 hours a day, 7 days a week, and any questions you may have in relation to your studies is just an email away. AICM online offers students a holistic learning approach, with forums, trainer marked activities, assessments and resources all online. As from 1st March 2015, AICM will are able to pass on significant savings to our members without compromising on the quality or integrity of our online training delivery. AICM is currently the only Registered Training Organisation that focuses and delivers only Credit Management qualifications. This enables AICM to provide specialised industry led training to meet individual and organisational training requirements through our customised training delivery by our industry experienced facilitators. AICM is committed to provide cost effective, quality training that will enable the development of future leaders within Credit Management. Review the AICM Course Outlines to easily determine which qualifications/units you require, and which units do not currently meet your Professional Development needs. At AICM you can undertake a single unit of competency, there is no requirement that you must undertake a full qualification. For more information on why to study with AICM CLICK HERE For detailed course information and pricing CLICK HERE

Face to Face Training: Save these dates in 2015 to continue your learning journey. zz Manage bad and doubtful debts Build the skills of your credit team. This unit is beneficial to loans officers, collections and credit officers and credit team leaders. This course ensures candidates have the understanding and skills of best practice in the area of debt collection. zz Manage overdue customer accounts Credit is more available today than ever before with a variety of purposes and accessible from a range of organisations. This can be a personal or business loan from a bank, a home loan from a credit union, purchase and cash advanced on a credit card from credit card companies, or a car and/or other loans from specialist loan agencies. Also there is the important dimension to business credit also known as trade and/or commercial credit. zz Factoring and invoice discounting There has been substantial growth in the use of factoring and/or invoice discounting arrangements over the past few years. This course is relevant to people in all areas of business that provide factoring and/or invoice discounting arrangement. This course is also beneficial to businesses that may intend to undertake such arrangements. Melbourne 26th & 27th April – Manage factoring and invoice discounting arrangements 22nd April – Manage overdue customer accounts

TESTIMONIALS: The Diploma course has been a review of my experiences in credit and general management. The methods used throughout the course demonstrate how personal experience has great value within the learning process. Legal content and management models are discussed alongside practical examples. This makes the learning process very realistic and even personal. – Helen Raffin, NSW Member MY STUDY EXPERIENCE WITH AICM: My very first Face to Face lesson was a little daunting, as I had not studied for approximately 12 Years but Toni my Tutor was very comforting and thorough and she made me realise that I knew a lot more that what I thought I did. Each Assessment was challenging but completing this course has opened up my eyes to a whole new world of Credit and has made me see that Credit is not just about collecting monies. I can honestly say my experience with AICM has been fantastic and everyone there has been very helpful and always cheerful. – Cindy McDonald, Credit Controller – QLD, Australian Liquor Marketers

CREDIT MANAGEMENT IN AUSTRALIA • December AUSTRALIA • March 20152014

aicm Training News Brisbane

Please contact debby@aicm.com.au

13th & 14th May – Manage factoring

to register your interest in a unit to be

and invoice discounting arrangements

delivered face to face.

15th May – Manage bad and doubtful

Corporate Training:

debts

Did you know AICM Learning Services

18th August – Manage factoring and

also provides tailored solutions to suit

invoice discounting arrangements

the specific needs of an organisation?

Sydney

needs and to then develop and

20th May – Manage bad and doubtful debts

We are able to help identify training facilitate a targeted in-house training program to achieve the organisation’s identified outcomes. As AICM Learning

21st & 22nd May – Manage

Services is a Registered Training

factoring and invoice discounting

Organisation (RTO), we are able to

arrangements

offer National accreditation for the

18th June – Manage overdue customer accounts

Legal

Recent Graduates: Nicholas Samojenko Julie Cuskelly Cindy Mc Donald Jasmine Lynch Cassandra Erne Helen Raffin Daniel Camp Mark Beauchamp Michael Campbell Tea Sabanovic Antonette Elogious Patrick McCarthy Jessica Beikoff Joshua Della Maddalena

training undertaken. This provides motivation to the participants and is a valuable pathway for further learning

zz National Australia Bank

13th & 14th August – Manage

and qualifications. AICM have a busy

zz Baiada Poultry

factoring and invoice discounting

first quarter delivering in-house

zz Macquarie Bank

arrangements

training to the following organisations –

zz Bibby Financial

Manage bad and doubtful debts Build the skills of your credit team. This unit is beneficial to loans officers, collections and credit officers and credit team leaders.

l Understanding the difference

uncollectable debt. Preparing

debt

recommendation for write off.

l Methods for dealing with a

This course ensures candidates

customer’s excuses for not

have the understanding and skills

paying the outstanding amount

of best practice in the area of debt collection. The ability to identify and recover an overdue customer account is a core requirement of

Strategies for minimising

between a bad and a doubtful

l This unit will be offered face to face in Brisbane on the 9th

l Negotiating with the customer

February and Sydney on the

to recover the outstanding

18th February 2015. Register

payment

your interest early as these 1 day

l Monitoring and documenting the outcome of the recovery action

a credit professional.

public courses fill fast. Contact Debby Manners on 02-9906 4563 for further information.

Topics Covered: Outcomes are covered within

Negotiating the recovery process

this unit:

of an outstanding debt. The

and successfully complete

This course deals with the key

importance of the reporting

the assessment requirements

aspects of dealing with a debt that

function. Identify customer excuses

for FNSCRD403A Manage

has been categorised as bad or

and reasons and strategies to

bad and doubtful debts

doubtful including:

avoid payment. Commonly used

which is a Core unit from the

l The steps involved in reviewing

reports used in consumer and

FNSFNS40111 Certificate IV in

an account to determine if a

commercial credit. Identifying a

Credit Management will receive a

debt is likely to become bad or

bad and doubtful debt. Managing

nationally recognised Statement

doubtful

the outsourced recovery process.

of Attainment.

l Participants that undertake

December March 2014 • CREDIT 2015 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Training News Legal

Factoring and invoice discounting There has been substantial growth in the use of

Topics Covered:

factoring and/or invoice discounting arrangements over

The History of Factoring and Discounting,

the past few years. This course is relevant to people

Introduction to Factoring and Discounting, The

in all areas of business that provide factoring and/or

Approval Process, Verification, Securities, Risk

invoice discounting arrangements. This course is also

Monitoring and Maintenance, Why was the PPSA

beneficial to businesses that may intend to undertake

Introduced.

such arrangements. l This unit will be offered face to face in Sydney, The following outcomes are covered within this unit.

Brisbane and Melbourne quarterly in 2015. Register

l Differentiating between the types of factoring and

your interest early as these 2 day public courses

invoice discounting arrangements that may be

fill fast. Refer to the AICM website for dates, or

offered to prospective clients

contact Debby Manners on 02-9906 4563 for

l How to effectively communicate to clients the

further information.

different policies and procedures that the client would need to follow depending upon the type of product provided l Strategies to ensure that clients understand how

l Participants that undertake and successfully complete the assessment requirements for FNSCRD502A Manage factoring and invoice

legal assignment will vary depending on the type of

discounting arrangements which is an Elective unit

product

from the FNS51511 Diploma of Credit Management,

l What information should be provided to debtors when an arrangement has been entered into with a

will receive a nationally recognised Statement of Attainment.

client l The advice that should be given to debtors of the debt recovery process that will be followed as a result of the introduction of the factoring and/or invoice discounting arrangement l How to manage the relationship between the client and the factor and/or invoice discounter and establish ongoing monitoring procedures

CREDIT MANAGEMENT IN AUSTRALIA • December AUSTRALIA • March 20152014

AICM are proud to deliver this unit in collaboration with DIFA

aicm Training News

Legal

Manage overdue customer accounts Credit is more available today than ever before with

zz Monitor payment agreement to ensure the customer

a variety of purposes and accessible from a range

has adhered to the agreement – including reviewing

of organisations. This can be a personal or business

accounts regularly to check payments have been

loan from a bank, a home loan from a credit union,

received, dealing with breaches of the agreement

purchase and cash advanced on a credit card from

promptly and appropriately, and referring

credit card companies, or a car and/or other loans

outstanding payment matters to appropriate

from specialist loan agencies. Also there is the

personnel.

important dimension to business credit also known as trade &/or commercial credit.

Topics Covered:

With the wide availability of credit comes the

Making contact with the indebted customer, Customers

risk that the credit provided will not be returned and

at a special disadvantage, communication and rapport

promised payments will not be made. This course

building skills, getting the facts, attitude is everything,

explores the skills and knowledge needed to correctly

planning the call, making a successful call, dealing

initiate and complete the management of customer

with difficult situations, brain function during conflict,

accounts which have outstanding payments.

dealing with really angry customers, follow up actions

The ability to identify and recover an overdue customer account is a core requirement of a credit professional.

and documentation. zz This unit will be offered face to face in Melbourne on the 22nd April, Brisbane on the 15th May and Sydney on the 18th June 2015. Register your interest early

Outcomes are covered within this unit:

as these 1 day public courses fill fast. Contact Debby

This course deals with the key aspects of dealing with

Manners on 02-9906 4563 for further information.

overdue customer accounts zz Identify customers requiring collection activity –

zz Participants that undertake and successfully complete the assessment requirements for

including the need to monitor your organisation’s

FNSCRD405A Manage overdue customer accounts

overdue account reporting system, access and

which is a Core unit from the FNSFNS40111

retrieve relevant information and records, and

Certificate IV in Credit Management will receive a

review overdue debtors in accordance with

nationally recognised Statement of Attainment.

relevant policies zz Establish contact with a customer and attempt to resolve outstanding payment matters – including proposing appropriate communication with the customer and obtaining appropriate authorisation, making contact with the customer and building rapport, and advising relevant organisation(s) regarding the purpose of contact zz Negotiate resolution of outstanding payments with the customer – including advising debtors of the possibility of legal action for non-payment, using appropriate techniques to achieve resolution, confirming negotiation outcomes and diarising further actions;

Privacy

Default listing and credit repair – some tips for two potentially troublesome areas By Michael Hartman* The following is general comment and may not be appropriate to rely upon in any specific instance. We recommend if you have concerns about a specific situation that you seek independent legal advice.

Default listing has become increasingly complex under the Amended Privacy Act and Australia now has probably the world’s most complicated requirements for default listing including among many other things: –– requirements for multiple notifications; –– requirements for time periods between notices and from notices to listing events; and –– complexity regarding what information can be listed. “Credit Repair” is a new “industry” that is largely centred around default listing, in particular seeking to remove defaults from an individual’s credit file. Their practices are increasingly causing credit providers concerns, and this is likely to only get worse.

Relevant Definitions Part IIIA of the Privacy Act is heavily reliant on a set of complicated definitions to construct various constraints and permissions with regard to the use of personal information. They are used like building blocks. Three definitions are key in terms of default listings (known as Default Information); Credit Information, Consumer Credit and Default Information. zz Credit Information – defines and limits the inputs to an individual’s credit report. Under Section 6N (f) default Information is listed as one of things that can be included.

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

zz Consumer Credit – is defined as credit: a. for which an application has been made by an individual to a credit provider, or that has been provided to an individual by a credit provider, in the course of the provider carrying on a business or undertaking as a credit provider; and b. that is intended to be used wholly or primarily: i. for personal, family or household purposes; or ii. to acquire, maintain, renovate or improve residential property for investment purposes; or iii. to refinance consumer credit that has been provided wholly or primarily to acquire, maintain, renovate or improve residential property for investment purposes. zz Default Information – is limited to Consumer Credit and in relation to guarantees, only guarantees of Consumer Credit.

If the credit is ‘consumer credit’ are you allowed to list Default Information? Yes, subject to further requirements but as this article focuses on commercial credit, I won’t go into that detail here.

If the credit you grant is ‘commercial credit’ (defined as NOT consumer credit) are you allowed to list a commercial default? Yes, but as it is not within the definition of default information relative to Part IIIA, the rules in that section of the Act regarding ‘default information’ do not apply. If the information about the individual relates to commercial credit (such as someone who gave a personal guarantee), then only the more general rule about personal information under the APPs would apply. So – the 2 KEY QUESTIONS are: 1. What sort of credit is involved – CONSUMER OR COMMERCIAL? and 2. Are you seeking to list the default against a business or a person? Assuming that the credit is COMMERCIAL CREDIT: zz If you list against a business the Privacy Act does not

Privacy

apply, because a business is not a person so information about a business is not personal information. zz If you list against a person (such as someone who has given a ‘personal guarantee’), this information is personal information and the APPs would apply. The APPs are far less prescriptive and it would seem that so long as you notify the individual that their personal details could be used to list a default in relation to the COMMERCIAL credit you extended, then that would seem to meet your obligations. Note – there are also APP provisions about ensuring that information is kept up to date and if the debt has been subsequently paid, then that should be reflected in a timely manner, something that requires effective tracking to achieve. The Credit Reporting Bodies will likely have procedures and requirements in relation to both listing and updating COMMERCIAL defaults, whether they are listed against a business or an individual. It is important that you get a copy of these and follow them exactly and if you are not clear, ask your supplier to explain.

Credit Repair One of the tactics used in ‘Credit Repair’ is to accuse you of breaching sections of the Privacy Act (including Part IIIA and/or the Credit Reporting Code of Conduct) and to threaten to take the matter to an Ombudsman Service if you don’t remove the default. Based on the above, if they are referring to Part IIIA, and the credit involved is COMMERCIAL, you need to ensure your listing was placed on the correct file – the individual’s COMMERCIAL file and not their CONSUMER file. If the listing was placed on the wrong file, you will need to work with the Credit Reporting Business or multiple businesses that you reported the data to, and have the listing rectified. If the listing is on the correct file (or you had it on the wrong file but have now listed it properly on the commercial file), it is my understanding, as confirmed by

“Credit Repair” is a new “industry” that is largely centred around default listing, in particular seeking to remove defaults from an individual’s credit file. Their practices are increasingly causing credit providers concerns, and this is likely to only get worse. a Financial Ombudsman Service “FOS” representative, the listing must comply with the more general APP requirements and what is generally ‘fair’. What could that require? If you can show that you have given notice, have listed the correct type of default (being NOT a consumer default) and have followed updating procedures, it may be that FOS would uphold your listing and deny the request by the Credit Repairer to have it removed. Further, FOS has very recently issued a statement about the actions of credit repairers as it seems they think that some credit repair companies attempt to ‘abuse’ the system and bully you into removing a default listing. When this is determined, FOS will not charge their member for the case. You can find more detail here: http://www. fos.org.au/the-circular-20-home/fos-news/feechargingrepresentatives.jsp u *This briefing was prepared by Michael Hartman, one of the Principal Consultants at Inflexion Point Consulting. www.inflexionpoint.com.au You can contact Michael at mhartman@inflexionpoint.com.au or Debra at dkruse@inflexionpoint.com.au

Change of name: from COSL to CIO Credit Ombudsman Service Limited (COSL) has changed its name to ‘Credit and Investments Ombudsman Limited’. The EDR scheme that is operated by the company is now known as ‘Credit and Investments Ombudsman’ (CIO).The change of name is not part of a re-branding exercise or intended to signal a change in operations; rather, it is simply intended to more accurately reflect the composition of COSL’s existing membership, which has for some time also included financial advisers and managed investments schemes. All contact details including COSL email addresses will remain the same.

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

queensland

aicm around the states

Nick Combis and Toni Sawyer.

Julie McNamara, Patane Lawyers.

Trivial Pursuit winners.

恭喜发财 / 恭喜發財 Happiness and Prosperity for this Year of the Sheep 2015 I would like to welcome our National Partners Veda, D&B, Austral Mercantile and our Divisional Partners Results Legal, Randstad and Vincents, all of whom assist us in bringing you informative, best of breed presentations and events relating to the credit and accounting professional. This year is no exception, our first presentation was a breakfast session on 18 February at Vincent’s examining the PPSA and the finer details of perfection of PPSR. Our Credit Network Nights (CNN) kick off on Wednesday 11 March at Tattersall’s Club in Brisbane. This year we are trialling a number of other venues starting with Customs House, so keep an eye out for that one. On 20 March, we are hoping to provide a limited places event that includes a visit to the Federal Court in Brisbane for a Corporations Act wind-up proceeding and a bankruptcy public examination. You will need to register early for this one. Certified Credit Executive examinations are being held 13-16 March, please contact myself or Peter Ryan our CCE Qld Councillor. As you can see, we have some snapshots of 38

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

our 2014 function at The Regatta. This year I am pleased and excited to announce that we will be holding our end of year function at Customs House on 25 November and it promises to be a gala evening. The Queensland Council has seen a few changes, your councillors are an approachable lot, so please feel free to approach them at functions: Brian Kay FICM CCE President, Professional Development Toni Sawyer LICM CCE Mentor, PD, Events Advisor Greg Young CCE Queensland Director and CCE Chair Peter Mills Vice President and Law and Legislation Peter Ryan CCE, Young Credit Professional Roger Masamvu CCE, Young Credit Professional Julie McNamara Events, Professional Development Stacey Woodward Media Melinda Grob Membership and Events I would also like to thank Hannes Monaghan and Tarnya Lowe for their tireless assistance and efforts for 2014. Hannes has decided to travel afar and we wish him a safe journey. Tarnya, is having a short break and will hopefully be back with us later in the year. Enjoy the New Year and I look forward to seeing you at our functions, please come up and say Hi.

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around the states

Lisa Clement, NCS.

Dale Hannan, NCS.

Peter Mills, Thompson Geer Lawyers

Stacey Woodward

Julie Cuskelly, Australian Liquor Marketing.

Tarnya and Toni.

Introducing Queensland Councillor

Review of Christmas event The Regatta was the venue for our end of year celebrations and the lovely old lady on Coronation Drive did herself proud with a very warm welcome. We enjoyed either the air-conditioning in an upstairs room overlooking the river or braved the humidity and sat on the veranda, which also shares the same vista. As a networking activity we played ‘Trivial Pursuit’ for 3 rounds with prizes for the winners of each round being donated by our ever generous sponsors. Queensland Division wishes to acknowledge Dun & Bradstreet, Results Legal and Vincents Chartered Accountants for their contributions to a fun evening. We would also give acknowledgement and thanks to Patane Lawyers for the donation of the lucky door prize of an Apple TV, which was won by Roger Masamvu of JBS Swift Australia. Plenty of food and wine flowed throughout the evening and as the photographs contest; there were quite a few people who seemed to have had a very good time.

COUNCILLOR TONI SAWYER Grad Dip Financial Service, Cert IV Bookkeeping, CCE, LICM, JP Qual. Holding the portfolio of ‘Recorder and Mentor’ for the 2015 division council It seems that it is quite common for credit people to ‘fall into’ credit positions without any forward planning of a chosen career path and so it was in this instance with a position becoming vacant because of a resignation. Consequently at a young age Toni was thrust into the world of collections and credit with the nonchalant comment of ‘Surely you can ring the customer and remind him to pay his account on time’. So life in the fast lane began with Toni joining AICM as a student member in 1983 when studying the TAFE units of Credit I and II in the Diploma of Accounting unit. This was while working in the wholesaling industry for Seismic Supply a division of MacDonald Hamilton Pty Ltd as National Credit Manager. When this organisation moved to the west of the city, Toni moved to Haymans Electrical, as an Area Credit Controller March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

queensland

Events Calendar

11 March

Credit Network Night (CNN)

– Process Serving/Claiming back goods of value Speaker: Clive Rix and Pat Asange Venue: Tattersalls Club

13 – 16 March

CCE Exam 20 March

Federal Court Visit – Public Gallery

AM Session – Corporation Winding Up PM Session – Bankruptcy 15 April

Credit Tool Box – Collect with Confidence (Part 1 & 2) Part 1 and 2 each a Half Day Seminar Venue: Randstad

13 May

CNN – Privacy, Credit Reporting, EDR Schemes Speaker: COSL, Venue: TBA 10 June

CNN – Re-enactment of Enforcement Hearing Venue: TBA

8 July

CNN – Trivia Night, Venue: TBA 22 July

AGM & YCP Awards, Venue: TBA August

aicm around the states

and stayed for 8 years before being poached to join a new wholesaler in the market place. Consequently life at Ideal Electrical began in a small way and over the 12 years expanded from 3 outlets to 64 outlets across the eastern seaboard. In the last couple of years at Ideal, there were mergers and takeovers which resulted in a nice handshake and accepting the redundancy package. During these years at Ideal Toni completed the Certificate IV, Diploma and Graduate Diploma of Financial Services and also the TAA Trainer and Assessor qualification. It was also during this time, in 1998, that Toni became more involved with AICM and came onto council for Queensland. Since that time Toni has served on council in many capacities, being portfolio holder and becoming the President and a Director. After the move from Ideal Electrical and out in the world as a contractor for sick leave and holiday relief that Toni became more involved with AICM, becoming one of the trainers for Queensland in the delivery of the AICM Qualifications, both face to face and online. In 2004 Toni accepted the contact for State Executive Officer and was the Chief Organiser for activities held by the council. Toni is now a mentor to the new councillors, advising them on the requirements of their respective portfolios and our recorder (minute taker). Toni continues to work on contract and is expanding her horizons once again by becoming a BAS Agent and delving more into the bookkeeping/accounting side of business. During the years of Haymans and Ideal, Toni and her husband travelled extensively for culinary competitions with her husband competing twice in the Culinary Olympics and bringing home ‘Gold’. Relaxation is essential in the world of credit so gardening is a hobby along with occasions of great food, good wine and friends being a favourite activity.

Annual Golf Day 19 August

Credit Tool Box – Leadership & Management Skills (Part 3 & 4) Part 3 and 4 each a Half Day Seminar, Venue: TBA

The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners

8 September

CNN – Identity Theft & Fraud Speaker: Fraud Squad Qld Police 11 – 14 September

CCE Exam

Divisional Partners

16 September

Credit Tool Box – Insolvency Issues (Part 5) Venue: TBA

October

CNN – People in Credit, Challenges & case study Venue: TBA

14 - 16 October

National Conference – Sydney Venue: Sofitel Wentworth Hotel - Sydney

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

Our National and Divisional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.

aicm

new south wales

around the states

Geoff and the Panel in action at the NSW Symposium.

Craig Tinkler, Geoff McDonald, Aaron Lucas, Rebecca Ross and Jason Tony.

President’s Report

CCE Profile

Happy New Year to all. We would like to thank our National Partners Veda, D&B and Austral as well as our Divisional Partners Ampac, Randstad, OnGuard, NCML and Results Legal for their ongoing support and looking forward to working with them all again this year. Following on from a great 2014, which culminated in the Pinnacle Awards dinner in December, we have an exciting year in front of us with the 2015 National Conference being held in Sydney for the first time since 2009. The NSW council is extremely excited to be hosting a fantastic event for all of you. We have some fantastic events happening this year, which kicked off with the Credit Symposium on February 10th. We also have some fun Youth Network Nights planned as well as a wine tasting night. I urge all those eligible to sit the CCE Exam scheduled for the weekend of 13-16th March 2016. The CCE designation allows you to display your experience and knowledge of the Credit Profession and use of the post nominal helps promote our profession We have a committee working to design an event specifically targeted at Women In Credit. This will be a new addition to our calendar and thanks to some great feedback and support it is set to be a fantastic event, which will be designed with women in mind but open to all Our Golf Day will be held on the Tuesday preceding the conference and has attracted a lot of interest and support. Look forward to an even bigger and better event than last year’s sensational event at Oatlands Golf Course. We will again wrap up the year with the very popular Pinnacle Awards and Master Class. We have a lot of other events in between so get on the AICM website and check out what we have in stall. Look forward to seeing you all soon.

KEITH DEER

Group Credit Manager – Alto Group CCE since 2006 “I have worked in the credit industry for over 32 years, working with Alto Group for almost 23 years and I have been a CCE since 2006 doing the exam 9 years ago. This was the first exam I had sat in quite a few years and I found the process challenging however I received good support from my peers and other CCE’s who encouraged me to study and use my experience in Credit that I had picked up over the years. The examples set by past CCE’s like Ken Sheppard motivated me to become a CCE initially however what becoming a CCE has done for me is to give me greater development opportunities, professional benefits and knowledge and networking contacts, I highly recommend that other credit professionals consider becoming a CCE, not just for their own benefit but to also raise the profile of the industry and business process. The support I have received from the Institute and my other colleagues has been fantastic and invaluable and I would like to see others benefit like I have done over the years.”

NSW Symposium On 10 February the NSW division held the Annual Credit Symposium. 75 people attended to hear the latest March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

new south wales

aicm around the states

developments in law and legislation relating to Credit, Debt Collection and Insolvency from Geoffrey McDonald, Barrister and Chartered accountant. Geoff was joined by a panel of leading legal and insolvency professionals, who tackled numerous, tricky and sensitive questions, including why are liquidator’s fees so high. Thank you to Geoff and the panel who included: zz Rebecca Ross, Gavin Parsons zz Arron Lucas, Worrells zz Jason Tang, Cor Cordis zz Craig Tinkler, O’Brien Palmer

End of Year Awards Dinner Thanks to the naming sponsors Dun & Bradstreet and the individual award supporters, the NSW Division recently held the second “Pinnacle” awards to recognise leading performers in our industry. The awards were presented at the End of Year Awards dinner at the Pullman Hotel Sydney Hyde Park on Thursday 20th November 2014. The Pinnacle awards recognise outstanding achievements in the Credit Industry. The 2014 winners were: Legal Representative of the year was – Paul Hutchinson, Force Legal In his nomination Paul was described as: by far the coolest and calmest legal service provider in the Country. “Happy to provide unbilled legal advice to customers, to help their business.” He is always available to provide one-to-one legal advice to customers. He challenges the status quo on the enforcement of debt. 2014 Recruitment Consultant of the year was – Vanessa Alkon, Randstad In her nomination Vanessa was described as: Vanessa makes the effort to get to know the business of her customers and is reliable and professional in her dealings. She has a great personality to boot.

Andrew Smith, Sev Indrele and Max Maximillian (Check Max’s Linkedin Profile if you haven’t met him yet!)

climbing up the railing to jump in front of a train. Nathalie was quick to grab the lady, seek assistance and stop what could have been a very sad situation. Nathalie walked the lady to the platform, alerted station staff and accompanied her on the train to Wolli Creek Station where staff had been alerted and had paramedics on hand to address the situation. We were quite rightly proud of Nathalie and as her manager, Sev addressed the whole team. She told them on her way to work Nathalie had come across a lady attempting to commit suicide and she “had assisted her”. The whole office broke up in laughter thinking Nathalie had helped the woman jump. The 2014 Senior Credit Officer of the Year (Supported by Dun & Bradstreet) was – Imelda Quiros, Coates Hire In her nomination Imelda was described as: a quiet achiever of the team. In financial year 13 her D.S.O. averaged 53.3 days and in financial year 14 the average was 44.3. This is a

2014 External Collections/Mercantile agent of the year was – Andrew Smith of Australian Recoveries and Collections In the nomination ARC was described as follows: Andrew and his team deliver service and results, which are second to none. ARC have consistently been able to deliver great results and had a success rate of 90%. The 2014 High Five Award (Supported by Australian Recoveries and Collections) was awarded to Sev Indrele from Coates Hire The nomination of Sev shows why Sev is worthy of the high 5 award: One of Sev’s team, Nathalie, was on her way to work one morning and was crossing the railway bridge at Ingleburn on her way to the station, when she observed a lady in front of her place her handbag on the ground and commence 42

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

Imelda Quiros – 2014 Senior Credit Officer of the Year

aicm around the states

Events Calendar

4 March

“How to prepare for the CCE exam” Speaker: Arthur Tchetchenian Subject: Preparation for CCE Exam

9-day improvement in a department, which operates around the D&B national average, of 55 days. In addition, Imelda improved her 90-day debt from an average of 7.7% in financial year 13 to 3.4% in financial year 14 i.e. more than halving it. She has continued to improve with the September D.S.O. sub 44 and 90 days 1.2% further down to 2.2%. A great result from someone known as “Rowdy”.

Venue: NCI Boardroom. Lvl 1, 53 Berry St, North Sydney

10 March

Parramatta Networking Night

Speaker: Amanda Logan-Halaj Subject: Team Building around Credit Issues

Venue: Rydges Hotel, 116-118 James Ruse Drive, Rosehill

13 – 16 March

The 2014 Credit Supervisor of the Year (Supported by Onguard) is – Nicole Chesher from Ecolab In her nomination Nicole’s achievements included: Thanks to Nicole’s passion and drive with her team, DSO has been driven down by 4 days over the last 12 months and cash collections with customers overdue is lower than ever. Nicole has achieved all of this whilst training 3 new team members. Nicole also delivered a first for Ecolab by cross-training a whole team across receivables platforms. Now a customer can call the receivables team and deal with one team member for all receivable issues. She is well respected within Ecolab and delivers excellent results to ensure the receivables team is highly regarded and acknowledged within the Ecolab business. Congratulations Nicole.

CCE Online Exam 14 April

PPS Review Speaker: Bruce Whittaker, Subject: PPS update 23 April

City Networking Lunch

Speaker: Sam Pearlman Subject: Summary Judgment Applications Venue: Curwoods Board Room

12 May

Women in Credit Speaker: TBA, Venue: KPMG Board Room 21 May

City Youth Network Night – Trivia Venue: Windsor Hotel

9 June

Parramatta Networking Night

Speaker: Michael Witt, Subject: Economic Update Venue: Rydges Hotel, Parramatta

16 July

YCPA Awards Night, Venue: Sofitel 11 August

City Networking Night Speaker: to be confirmed, Subject Forecasting Cash Flow 11 – 14 September

CCE Exam 20 September

2014 Credit Manager of the Year Adam Clarke with Mark Logue.

The 2014 Credit Manager of the Year (Supported by AMPAC) was – Adam Clarke from Startrack In his nomination Adam was described as a great leader of teams spread across multiple States. He is a great new age Credit Manager always looking towards the future and what can be implemented for process improvements within the business. This year he implemented systems automation in many processing areas such as statement automation, payment allocation and reporting tools never available before. Exposure in 60 days has decreased from 5% to 2.5% in only 3 months. Due to Adam’s efforts the business has enjoyed benefits well beyond industry standard, which includes huge cost reductions and just as importantly the streamlining of processes and efficiencies. Congratulations to Adam Clarke.

City Networking Night – Wine tasting Venue: City Venue

8 October

City Youth Network Night – Barefoot Bowling Venue: Paddington

13 October

NSW/National Golf Day Venue: Oatlands Golf Course

13 October

Harbour Cruise Venue: Sydney Harbour

14 – 16 October

AICM 2015 National Conference

2015 Master Class/Credit Symposium and Pinnacle Venue: Sofitel

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

new south wales Save the date: 12th May 2015 – for our Inaugural Luncheon: “Women in Credit” “In recognition of the unique challenges and interests of our female members, the NSW AICM Division has formed a committee to help develop and encourage female Credit Professionals. This NSW Initiative has an overall Rachel Burford aim for AICM take a lead role in developing the needs of “Women in Credit” To ensure any activities developed meet the needs of “Women in Credit”, we asked our female members to complete a very brief survey. All participants were in the running for a Simon Johnson Hamper valued at over $70.00. Congratulations to Rachel Burford from Electrolux. Based on the survey results from our members, we will launch our “Women in Credit” Inaugural Luncheon on 12th May 2015. So save the date, details will be released shortly.

aicm around the states

The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners

Divisional Partners

- Sue Day, AICM NSW Councillor

aicm around the states

south australia President’s Report

Trevor Goodwin and Gail Crowder. 44

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

Welcome to 2015! Adelaide is ‘alive’ having just hosted the Tour Down Under and now preparing for the Clipsal 500, Adelaide Fringe Festival and Womadelaide. The weather is turning up the heat as March approaches and we expect the temperatures to soar to 41 degrees for another run of warm, sunny days in Adelaide. This brings me to the Functions team who have just held our first networking event at the beautifully refurbished Kent Town Hotel on a very warm and sultry evening. Our second event for the year was the well organised Credit Symposium held at Hahndorf in the Adelaide Hills on 20 February. With a high class list of speakers sought out by the PD team, it was a full day

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of education on all levels in credit, management and behaviour. The divisional Council is continually open to our member’s suggestions pertaining to events, speakers and all educational functions. We urge everyone to complete the online survey so the SA committee can continue to deliver to meet our member’s needs. These first couple of months of the year have been challenging but we are working well with Nick and the team in National Office with almost daily communication! With the loss of our EO, Kerry Hammill, we have had to pull together as a team to liaise and work as one to start the year rolling. At the end of year 2014 networking event we gave Kerry a warm and friendly send-off. It continued well into the night as we had a super turn out of senior and junior members who had to eat the never-ending scrumptious desserts before leaving! A sincere thank you to Kerry for all the years of support to the committee and the AICM. This year we are very proud to say we have another new Divisional Partner, Worrells and on a National level Austral Mercantile. Thank you to all of these wonderful strong supporters of the AICM. We trust that you will enjoy the events throughout the year, and your ongoing feedback and support is important to the Institute. Our Membership team continue waving the flag and we look forward to welcoming our Corporate Group from Bendigo and Adelaide Bank very soon. Whilst our National YCP winner, Rebecca Edmiston, is being very proactive attending committee meetings she is also encouraging her team members to become involved in the AICM. Well done Rebecca! A busy calendar year is ahead including the ever-popular Quiz Night with a different approach this year (!) and holding another educational day with relevant speakers for our members and associates. Look forward to seeing you all throughout the year! – Gail Crowder SA Division President

Gail Watt and Lisa Anderson.

Gail Crowder – always a straight shooter.

Lisa Anderson and Mike Hayes.

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

south australia

Eventsaicm Calendar around the states

12 March

Credit Focus – Collections by Telephone

Speaker: Mike Murphy Subject: Introduction to credit, Telephone techniques

Functions Report Our first social function for the year was a network night held at the “Jungle-themed” Kent Town Hotel in the Babble on Beer Garden, on Thursday 12th February. This unique and sporty

Venue: Education Development Centre, Hindmarsh

9 April

Credit Focus – The role of Mercantile Agents

venue boasts 5 levels of different entertainment and the room

Speaker: Gail Crowder/Wade Bekesi Subject: Collecting your debts

we were allocated was a perfect size for our event.

Venue: Education Development Centre, Hindmarsh

Although it was a very warm night those in attendance enjoyed the evening and had fun playing darts and 8-ball while mingling with other attendees. There was plenty of food served

13 – 16 April

CCE Online Exam 14 April

personally by the staff who had unique names like Sandra

PPS Review

Bullock and Sean Penn! What a quirky venue….

Speaker: Bruce Whittaker, Subject: PPS Update

Gail Crowder and Trevor Goodwin spoke about the coming year and how S.A. Divisional Councillors are already busy planning educational and social functions. Members who attended on the night were also thanked for their attendance on such a warm evening and their continuing support of the Institute. It was a good commencement to the year’s social calendar. The Functions Committee is keen to add variety and

16 April

Networking Evening, Venue: TBA 7 May

CCE lunch Speaker: to be confirmed, Venue: TBA 14 May

Credit Focus – Evening Session

“something different” to 2015. We are looking at venues and

Speakers: Josh Richards and Melanie Bird Subject: Mock Court Hearing, Venue: TBA

events that will be interesting and entertaining for members

5 June

and their colleagues.

Quiz Night, Venue: TBA

During the year we will be holding functions including the

11 June

network evenings and the Awards Night, as well as the Quiz

Credit Focus – Liquidation Case Study

Night and other functions requested by our members.

Venue: Education Development Centre, Hindmarsh

– Trevor Goodwin, Functions

9 July

Credit Focus – The basics of credit The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners

Speaker: Trevor Goodwin Subject: Processes – Risk analysing customers Venue: Education Development Centre, Hindmarsh

August

Awards Dinner 2015, Venue: TBA 13 August

Credit Focus – Trading trusts Subject: Credit approval, liability and recovery action Venue: Education Development Centre, Hindmarsh

Divisional Partners

10 September

Credit Focus – Bad debts and ways to avoid them Subject: Processes – Risk analysing customers

Venue: Education Development Centre, Hindmarsh

11 – 14 September

CCE Exam 8 October

Credit Focus Venue: Education Development Centre, Hindmarsh Our National and Divisional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

14 – 16 October

AICM 2015 National Conference Venue: Sofitel Sydney Wentworth

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November Networking Night.

November Networking Night – Tracey Rothwell.

November Networking Night.

November Networking Night An exceptional turnout to our November Network Night where Tracey Rothwell (Rothwell Laywers) provided a standout presentation on Section 60(3) of the Civil Procedure Act 2010. Tracey, a long time member and supporter of the AICM, now focuses services to clients reviewing and advising on credit applications, terms and conditions of trade and credit policy to ensure the best possible return for her clients in the event of a customer default. The presentation covered the burdens of proof the supplier has when issuing a claim against a debtor and gave key tips on how you can improve your terms and

conditions and processes to reduce the risk of your customer defending a claim against them. Tracey specifically explained Section 60(3) of the Act, which determines that the Court may strike out a defence that “has no real prospect of success”, how the Court of Appeal has interpreted this section and how it assists you so that you may avoid a full trial, save time and costs. Members and guests expressed that the network night was both enjoyable and extremely informative. A big thank you to Tracey and Rothwells for donating your time and energy to the AICM and providing information that will greatly benefit members. March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

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The boys enjoying the Christmas party.

Lou Caldararo, Vladimir Espinoza, Clara Caldararo, Ann Marie Gambera and Noula Setinelli.

Daniel Greenhoff, finalist YCP, Brooke Lawrence, Sophie Bouhalis and Amaran navaratnam, Winner Tony Mamone Award.

Melanie Veld, Rosina Edgar (Mercedes Benz), Maureen Grant (Lindt) and Charles Tims (Tuftmaster Carpets).

VIC/TAS Division 2014 Christmas Party @ Krimper (Guilford Lane) Approximately 80 members and guests attended the 2014 annual Christmas Party for the Vic/Tas Division, held at Krimper in Guilford Lane. A much more casual affair this year allowed people to mingle and talk to their hearts content. Steve on guitar provided background music and delighted event goers with a variety of popular tunes, which complimented the low-key style of the event. Lou Caldararo VIC/TAS President made a brief presentation, thanking the event sponsors and members and guests for their attendance. Many members expressed their appreciation and enjoyment of the evening, and complimented the AICM on the event. The committee would like to take this 48

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

opportunity to thank the event organisers for their hard work in organising such an event. We all appreciate how challenging it is to come up with something different each year that will attract more attendance, and to thank all the members for their support in attending events during the 2014 year.

Suggestion Box As a Credit Professional if there is a topic that we have not recently covered that you would like covered or a social event you would like us to try please email dsmith@relrec.com.au and we will raise it at the next committee meeting for consideration. Or click here to provide feedback on the 2015 calendar.

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Events Calendar

MELBOURNE NETWORK EVENTS

(1 CCE Point for each Network Evening)

19 March 2015

Bullying in the Work place

Speaker: Frank Gambera, Director McMahon Fearnley Lawyers Pty Ltd. 16 April 2015

The successful restructure of a distressed business Speaker: Robyn Erskine, Partner Brooke Bird 21 May 2015

PPSA made easy for Credit Managers (Breakfast Session) Speaker: Lionel Meehan, Partner at Ashurst Lawyers

Sophie Chatz

18 June 2015

How to make good staff better

Events

Speaker: Glenda Linscott, Director Performance with Confidence

Save the dates and mark your calendars 13 - 16 March 2015 – CCE Exam All members preparing for CCE Exam should be ready for the exam weekend 1st-2nd March 2015 19th March 2015 Bullying in the Work place Speaker: Frank Gambera, Director McMahon Fearnley Lawyers Pty Ltd. 16th April 2015 The successful restructure of a distressed business Speaker: Robyn Erskine, Partner Brooke Bird.

20 August 2015

What defines a good Leader? (Breakfast Session) Jason McCutcheon, Proprietor Biscom 19 November 2015, ABC of financials

YOUTH NETWORKING 5 March 2015, Youth Networking Event: Ten Pin Bowling 17 September 2015, Trivia Night HALF DAY SEMINARS (3 CCE points for each Seminar) 12 March 2015

The Australian Institute of Credit Management welcomes our Partners for 2015.

101 of Credit for New Credit Managers or Supervisors 10 August 2015, See you in Court! Speaker: Tracey Rothwell – Rothwell Lawyers

National Partners

CCE EVENTS (1 CCE Point for each CCE event) 14 May 2015: CCE Breakfast (7.15am – 9.00am) 26 November 2015: CCE Breakfast (7.15am – 9.00am) CCE EXAMS

Divisional Partners

13 – 16 March 2015 11 – 14 September 2015

DINNERS & FUNCTIONS 8 July 2015: YCPA Dinner 14 – 16 October 2015: Our National and Divisional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.

AICM National Conference Venue: Sofitel Sydney Wentworth

4 December 2015

Christmas Party River Cruise (Subject to numbers)

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

western australia/nt President’s Report Welcome to my first report for 2015. I would like to thank those members who made their way to South Perth Yacht Club for our 2014 Christmas Sundowner. It was a great night with lots of delicious food, cool refreshments and plenty of banter – a beautiful way to end a very busy year. It was also an opportunity for me to acknowledge a number of members with their membership milestone badges and to welcome our new 2015 National Partner of the AICM in Austral Mercantile Collections as well as thank our 2014 WA Partners for their support. I would now like to thank our 2015 WA Partners, Ferrier Hodgson, Price Sierakowski Lawyers, FTI Consulting, Nova Legal and our new sponsor, Jones Business Services, for their continuing support. It is very much appreciated. Last but not least I would like to acknowledge the 2015 WA Council. I am very lucky to have such an enthusiastic group of people who are all working hard for the benefit of the WA member base. I am particularly excited about some great events we have planned for 2015 starting with a Professional Development morning session on 18th March and our first in the breakfast club series later in March. In particular our ‘Twilight Credit Congress’ which will be an afternoon/evening event on the 20th May featuring some great speakers followed by a Key Note speaker addressing us over dinner. Our Functions and Events Chairpersons, Steve Thomas, Lisa Marr and Rowan McClarty are busily fine tuning the event details (including special guest presenters). This is a ‘Must’ event for all. Our events calendar is online and includes a series of ‘Breakfast Club’ professional development presentations throughout the year, networking opportunities, specialised training programs, CCE exams on the 13th to 16th March, the Gala dinner including the 2015 Young Credit Professional Awards in July, our ‘Women in Credit’ high tea later in the year and of course our Christmas on the Bay Celebration in December. I ask that each and every one of you make an effort to attend and enjoy all of our events. NOTE: They have been designed and are being run just for You! I look forward to catching up with you at our Twilight Credit event on the 18th March…it WILL be BIG!!

aicm around the states

selected for two years in Lae, New Guinea. Again another set of people skills required. In 1969 I was offered and accepted a junior trading room position with a Perth Stockbroker, however after two years and with the downturn in the mining industry I moved to a finance company. This industry had similar practices to banking but not so controlled and lending was the objective, risk came second. The organisation taught me skills in risk assessment and a tried method in collecting overdue arrears and even the non-conflict approach to repossessing vehicles from agitated borrowers. By 1972 I saw cracks appearing in the company’s future and decided that trade credit control was my next change. I applied and was accepted by Liquid Air as one of two credit controllers, reporting to a Credit Manager. This position was the start of my serious credit career and with a young financial accountant who was a ex banker, I was encouraged to expand my business knowledge and start a part time Credit Diploma course at Perth Technical College and to join the Institute of Credit Management. After two years in the position and feeling confident I had the skills and knowledge needed for a commercial Credit Managers role, I decided to apply for a Credit Managers job. I was successful in joining a small timber company, Whitakers Limited, and had a Credit Controller to assist me. This satisfied my career aspirations until 1980 and during this time I completed my Diploma Course and was invited to become a Councillor of the AICM WA. By 1980 I decided that I needed to move to a bigger position and was successful in being appointed State Credit Manager for the Readymix Group, with a staff of four. This was a very satisfying position with credit and business education encouraged and liaison with other credit people and professionals. In the late 1990’s the company went through a series of changes and I decided to leave in 2000 and start my own home-based business, Corporate Credit Services. The focus of this business was full credit control solutions and risk management for mainly SME’s. In March 2013 when my wife and I decided to retire and on closing the business we moved to a city apartment to enjoy another style of living.

– Colin Phillis, AICM President WA

William Walter 40 YEAR MEMBER The William (Bill) Walter credit profession journey: I was fortunate when I left school in 1960 to start a banking career (Westpac now) that not only shaped my business skills and work ethic but also grew my people skills. At that time bank employment usually meant moving around Western Australia every two years which meant I met a cross section of the town’s community and had to learn how to interact with all types of people. During my banking time I was privileged to be 50

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

My Association with AICM: I have thoroughly enjoyed my 40 years as a member and gratefully acknowledge it helped me through education and many business contacts grow as a credit professional, which in turn helped me advance my business career. In the 1970’s I was invited to be a Councillor of the WA branch and during this period I came to appreciate and realise the need to have an Association that could represent the industry and provide specialised training. This was so important for the dedicated credit career person as skills and knowledge were required in customer relations, accounting, commercial law and being a team of the organisation. The other key area was receiving recognition from employers for the credit role. I now look back with great satisfaction of what I helped the WA Council achieve in this dynamic period starting

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with <500 financial members, various new credit related education courses that were held after work and presented by experienced managers, the yearly 3 day weekend out of Perth, regular after work sundowners with guest speakers, the annual list of members booklet, the Privacy Seminar in 1982 that attracted over 200 people and was very profitable, the visit by the USA Credit Management president, The Institute’s National President being regularly quoted in the Financial Review on contentious credit matters, Student subscription for the Credit Magazine, the continuation of the Diploma of Credit Management at Perth TAFE, the Division was making a surplus and finally, the introduction of the Young Credit Professional of Year. Western Australia was the first state to introduce this and I think we created something that all members can now be proud of. I know when my proposal was presented to the meeting; I was so pleased the President and Committee immediately liked the concept. All felt there was merit in the idea and the Institute needed some type of recognition and encouragement for the young members starting their credit careers. The rest is history, which pleases me so much, and on a bragging note, three of my staff from Readymix were awarded this title over a period of time. Finally, the credit profession has given me financial security, enjoyment, job satisfaction, great business awareness, invites onto other committees and many business associates. – Bill Walter LMICM, Dip of Cr. Mgmt (WA)

when the time (and the wife) allows. I enjoy cooking and no, I don’t watch any reality cooking shows! Photography is a big passion, although finding the time to pursue it is proving difficult. Top of the list though would be travelling. I really enjoy visiting new places and exploring and experiencing the food and meeting people from different backgrounds and cultures. Contact details: Mobile is 0479 083 244. Tel: 08 9351 4761

TAMERA RUSSELL MICM Credit Manager at WesTrac – 1 year 3 months Qualifications: Diploma of Accounting Credit/Professional Background: When I finished my Diploma I started work in a Private Tax Firm, it almost took me a year to realise that tax certainly wasn’t for me! I ended up working in an AP/AR /Admin role and decided Credit was what I wanted to do. I then got my first credit job, working at Coventry’s. Since then I’ve moved around through a few different industries, Freight, Labour Hire, Industrial Services/Construction, Telematics, and Machinery. I did take a 6-month break from credit to complete secondment as a Contract Administrator to further my knowledge, but I’ve found that I enjoy Credit more! Portfolio: Assistant Chair YCP Portfolio

Meet your Councillors

Why I volunteered: In 2014 I won the YCP WA award, and joined the council. My aim is to get an increased number of younger people involved with the AICM and the benefits surrounding the institute.

ROWAN MCCLARTY Assistant Credit Manager at Automotive Holdings Group Limited – 3 Years Qualifications: Diploma in Human Resources – never worked in HR though! Diploma in Credit Management from the UK Institute of Credit Management. Credit/Professional background: I’ve always been involved in credit. I started work in Cape Town, South Africa in a department store way back in 1991 in the admin department. Got involved with credit and then moved to another retail chain (similar to Myer) as a credit supervisor. In 1998 I moved to London, essentially to travel and see a bit of the world, but ended up living there for nearly 15 years and worked in credit for various organisations. I did see a fair bit of the world, but there’s still plenty more to see and work sort of gets in the way! Then in 2011 we moved to Perth after having had enough of the cold and the wet! So far it’s been a great decision.

My passions: In my life outside credit I’m a Roller Figure Skating Coach. (Kind of makes sense as I spent about 20 years skating competitively myself, and competed at 9 World Championships). I still enjoy a bit of fitness, whether it’s rollerskating round the Swan River or going for a run or a stroll. I have a bit of a travel bug, (the list of travelled places is really quite long)…I enjoy travelling to new places and experiencing other cultures. I also love catching up with my friends for good food and drink (good quality whiskey of course)! Contact Details: tamera.russell@westrac.com.au

LISA MARR Credit Manager at Instant Waste Management – 3 Years+ Qualification: Bachelor of Arts, Certificate II Australian Sign Language

Why I volunteered: To help grow the credit community and the AICM, meet people and give something back to the profession that I have been involved with for the last 25 years, albeit in different countries.

Credit/Professional background: 1997 – Recoveries Officer – Main Roads Western Australia. 2001 – Accounts Receivable Clerk – Automotive Holdings Group (North City Holden). 2004 – Credit Controller – Boral Pty Ltd (Windows). 2012 – Credit Manager – Instant Waste.

My passions: Keeping fit by running and cycling. I play golf

Current Portfolio: Associate Chair – Events

Current Portfolio: To be determined – wherever required!

March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

western australia/nt Why I volunteered: Looking for new opportunity to develop credit connections and become involved at a grass roots level. My passions: Fitness of mind means fitness of body! I walk and or run every day. I have tried many different sporting activities since moving to WA in 1997. I’m rather competitive, so I have dabbled in: Dragon Boat racing/sailing/karate/golf/squash/darts and this year will be fencing. Around the house baking is my preferred option, as it’s nice to share the results out of the oven with friends & colleagues alike. Contact details: PH: 08 6270 4115

Membership

aicm Events Calendar around the states

13 - 16 March

CCE Online Exam 18 March

PD Event – Collect Debts, Telephone Collection Techniques, Half day seminar 20 March

This year is the best year to join the Professional Group in your industry. The Council are busy making changes and developing new ways to bring the industry to the members in theses challenging and changing times. We have a Linked In Group, Facebook Page and Credit Network all great opportunities to get involved and network for career and professional development. Also the personal networking at the functions is excellent to get up close and personal with other members in the great state of Western Australia and introduce yourself into the Credit family. I have been a member for many years and encourage all WA members to invite a work associate to come along to a function to take a look and or pass their details on so we may post out some information. Look forward to seeing you at our next function. – Warren Myers MICM, Membership Co-Chair

AICM Breakfast Club – PPS Workshop, Time: 7.15 am Venue: Matilda Bay Nedlands

20 May

Twilight Seminar – ‘Emerging Trends in Credit Management’ Venue: TBA

12 June

AICM Breakfast Club, Time: 7.15 am Venue: Matilda Bay Nedlands

8 July

PD Event – Risk Management, Half day seminar Venue: TBA

16 July

Annual Awards and Gala Dinner Venue: TBA

The Australian Institute of Credit Management welcomes our Partners for 2015. National Partners

12 August

AICM Breakfast Club, Time: 7.15 am Venue: Matilda Bay Nedlands

11 - 14 September

CCE Online Exam 17 September

Networking Credit Speed Date and quick chat speakers 7 October

Divisional Partners

PD Event – Risk Management- Insolvency Half Day Seminar 14 - 16 October

AICM 2015 National Conference Venue: Sofitel Sydney Wentworth Hotel

23 October

High Tea – Women in Credit Venue: TBA

20 November

AICM Breakfast Club, Time: 7.15 am Our National and Divisional Partners support and work with the AICM to promote the Institute’s activities, represent the Credit Industry and develop the careers of all Credit Professionals. As these organisations support your Institute and your Industry please consider them when you require assistance.

CREDIT MANAGEMENT IN AUSTRALIA • March 2015

Venue: Matilda Bay Nedlands

10 December

XMAS on the Bay Venue: South of Perth Yacht Club, Freshwater Bay

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NEW MEMBERS The Institute welcomes the following credit professionals who were recently admitted to membership in November, December 2014 and January 2015.

NEW SOUTH WALES

QUEENSLAND

Oltan Akdogan Val Baynes Nicole Bennett Lyndal Bowen Damien Brunell Aura Caecilia Xue Chen Stephanie Chisesi Robert Claggett Phylline Comia Matthew Davis Julia Fawcett Debbie Forrest Simon Fulford Jenny Fulton Alisa Gluhic Venn Grasso Rebecca Gray Martha Haddad Fareeda Hassan Charlie He John Hilton Cathy Howison Frosina Jovanova Colm Kiely Manoj Kumar Lashini Kuruppu Prashant Lal Rajesh Mahabir Phinren Nop Melinda O’Brien Stewart Packham Sudha Pannirselvan Deborah Pascoe Vicki Pereyra Christine Quinn Dilini Ratnayake Elaine Robinson Katrina Sanders Sarajane Scott Arun Lata Sethi Louisa Sijabat Jamila Subedhar Vishnu Subramaniam Laura Sullivan Terrence Topham Anitra Watkins

Anna Funnell Melinda Grob Julie Harper Catherine Hodgson

Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd Shield Mercantile Pty Ltd Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd C and C Cabcare Pty Ltd Goodman Fielder Limited Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd Breene & Breene Solicitors Southern Steel Group Pty Ltd Austral Mercantile Collections Pty Ltd Goodman Fielder Limited E-Credit Management Pty Ltd Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd Veda Sony DADC Australia Pty Ltd Austral Mercantile Collections Pty Ltd Goodman Fielder Limited The University of New South Wales Goodman Fielder Limited GrainCorp Operations Limited Austral Mercantile Collections Pty Ltd Goodman Fielder Hilti (Aust) Pty Ltd Ozforex Pty Limited Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd Sony DADC Australia Pty Ltd Goodman Fielder Limited Hilti (Aust) Pty Ltd Ruralco Holdings Pty Ltd Sony DADC Australia Pty Ltd Shield Mercantile Pty Ltd Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd GrainCorp Operations Limited Sony DADC Australia Pty Ltd Sony DADC Australia Pty Ltd Vincents Chartered Accountants Sydney Water Corporation GrainCorp Operations Limited Hilti (Aust) Pty Ltd Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd

McCarthy Durie Lawyers Randstad Acrow Formwork & Scaffold Pty Ltd Hume Doors & Timber (Qld) Pty Ltd

VICTORIA/TASMANIA Lynette Andrews Jay Bower Donna Brown Vanessa Corby Isa Darrage Sandy Duric Ahmad Durrani Abraham Erenbolm Adrian Hearne Brendan Lloyd Lynne McEwan Stephanie McGrath Amaran Navaratnam Timothy O’Donnell Ella Pekaric Browyn Richards Cheryl Richardson Zoran Trifunovic Valerie Walsh Melanie Yarnall

Techtronic Industries Australia PPG Industries Australia Pty Ltd Clublinks Pty Ltd Treasury Wine Estates Australia Ltd Austral Mercantile Collections Pty Ltd Hallmark Cards Australia Limited Treasury Wine Estates Australia Ltd Cash Gap Finance Treasury Wine Estates Australia Ltd Austral Mercantile Collections Pty Ltd Treasury Wine Estates Australia Ltd Robert James Lawyers Recoveries Corporation Ltd Austral Mercantile Collections Pty Ltd Recoveries Corporation Pty Ltd Treasury Wine Estates Australia Ltd Skilled Group Ltd Skilled Group Ltd Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd

SOUTH AUSTRALIA Kyla Breslauer Thuy Dinh Vu Danielle Hunter Asha Schuster Hayley Sobey David Vlahos

Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd Austral Mercantile Collections Pty Ltd Hudson Lawyers

WESTERN AUSTRALIA Emma Carbone Austral Mercantile Collections Pty Ltd Tara Connolly Valenti Lawyers Jeet Dhillon Austral Mercantile Collections Pty Ltd Hane Hane-Nou Austral Mercantile Collections Pty Ltd Stefanie Hessemann CGU Workers Compensation Matthew Noonan-Crowe Valenti Lawyers Philip O’Donnell Valenti Lawyers Adriana Ottervanger Austral Mercantile Collections Pty Ltd Ruth Sudheera Austral Mercantile Collections Pty Ltd Lacy Swan Valenti Lawyers Kim Valenti Valenti Lawyers Jane West Capricorn Society Ltd Mark Williams Valenti Lawyers Corrina Wright Austral Mercantile Collections Pty Ltd March 2015 • CREDIT MANAGEMENT IN AUSTRALIA

See you at AICMâ&#x20AC;&#x2122;s

2015 Sofitel Sydney Wentworth Hotel 14th - 16th October 2015

2015 National Conference