Credit Management in Australia - March 2016 by AICM

Volume 23, No 3 March 2016

IN AUSTRALIA

The Publication for Credit and Financial Professionals

2016 â&#x20AC;&#x201C; hing e g Chasnmall t no ill w e? re b he isk W er th

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Volume 23, Number 3 – March 2016 Message From the President

Portfolio Update

By Greg Young

35 NSW Division: Pinnacle Awards – Joanne Mannah and Andrew Spring.

Credit Management

How Credit Management shook its boring tag

What’s in a name By Alan Harries

Are you collecting your money right By Adrian Hunter and Robyn Erskine

Three risks to monitor in 2016

38 Qld Division: Simon Dawson, Nick Combis, Arthur Tchetchenian and Bruce Patane.

By Maire Albert and Julien Marcilly

Change – no small thing By Barry Urquhart

ASIC releases report on debt management firms

Veda acquires EDX

19 20

Fraud and the impact on Trade Credit By Imelda Newton

42 SA Division: Amanda Campbell, AJ Jaramillo, Rod Sims, Trevor Goodwin and Judy Verhoeff.

Legal The obligation of the insolvency practitioner to act honourably and fairly in the administration of insolvent estates

By Keith Bennetts

Electronic contracts – what’s new? By Peter Mills

45 Vic/Tas Division: David Condello with Glenn Thomas.

7 Greg Young

16 Barry Urquhart

10 Alan Harries

12 Adrian Hunter

21 Keith Bennetts

Peter Mills

48 WA/NT Division: Lauren Marsh, Raffaele Di Renzo, Lauren O’Hearn.

Statutory Trustee sale – creditor wins By Chris Cook

What is the threshold for suing a debtor By Roger Mendelson

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

AICM Training news

Can we Help?

Unfair contracts

Around the States

N. Pilavidis MICM CCE Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065 PO Box 64, St Leonards NSW 1590 Tel: 1300 560 996, Fax: (02) 9906 5686 Email: nick@aicm.com.au

New South Wales

EDITOR/PUBLISHER

Western Australia/Northern Territory

Nick Pilavidis | Email: nick@aicm.com.au

New Members

35 38 42 45 48 51

2016 Conference Promotion

CONTRIBUTING EDITORS Arthur Tchetchenian NSW Stacey Woodward Qld Gail Crowder SA Warren Meyers WA Donna Smith Vic/Tas

Queensland South Australia Victoria/Tasmania

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ADVERTISING MANAGER John Field FICM, CCE, ACPM, Ph: 1300 560 996 Mob: 0412 732 831, Email: johnfield.aicmq@aicm.com.au 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 3, Suite 303, 1-9 Chandos Street, 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, 2015.

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Click Here EDITORIAL CONTRIBUTIONS SHOULD BE SENT TO: The Editor, Level 3, Suite 303, 1-9 Chandos Street, St Leonards NSW 2065 or email: nick@aicm.com.au CREDIT MANAGEMENT IN AUSTRALIA • March 2016

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From the President

Grant Morris CCE Australian President

ast year was an absolute cracker and this

dour financial position has seen the latter be one day

year will be even better.

FIFO meetings in Sydney. However our financial position

In 2015 we launched our Webinars and followed this through in February with the

has improved very solidly over the last 3 years and we are now able to improve board accessibility through the

first of the 2016 National Partners Webinar Series – An

holding of board meetings in each Division every second

Economic Update with Stephen Koukoulas. These are free

year. We met in Melbourne in February and took the

to members although you are required to register for the

opportunity to catch up with many Victorian members at

Webinar. We will then provide a copy to you immediately

the post golf day function. Their feedback was invaluable.

following the broadcast. The Economic Webinars are now held quarterly. We have been working on our website and in the last

At February’s Saturday Board meeting we continued our programme of openness, Divisional interaction, development and succession planning by inviting Lou

days of February released the long overdue and very

Caldararo from the Victorian Council and Roger Masamvu

substantial upgrade which you will find more informative

from the Queensland Council to join us for the day. Lou

and easier to use.

is the current Victorian President and Roger is a former

In late 2015 we released our animated video “Are you a credit professional?” and this month we are continuing our electronic campaign with our Ebook titled “10 signs an

Queensland Young Credit Professional of the Year Award winner and Queensland Councillor. Following 2015’s successful launch of WinC (Women

account is heading towards bad debt, and how to stop it”.

in credit) events we are continuing with this popular

A must read for all credit professionals and an important

programme and we are excited to announce that thanks to

addition to your library and training manuals.

the support of Veda (Premium Sponsor), NCI and Results

The CCE exam is being made more accessible and is being held across 2 weekends in March. Every competent Credit Professional should have no difficulty

Legal (Supporting Sponsors) the WinC events will now be held in all divisions in 2016. The National Conference is being held from October

in attaining this confirmation of their knowledge and

12 – 14 at the new Sea World Resort Conference and

skills and enhance their standing in our profession. If

Convention Facility adjacent to Sea World theme park

you do nothing else this year to develop and promote

on the Gold Coast. The programme is well advanced as

yourself simply set aside a few hours to complete your

we take the learnings from the Sydney conference and

CCE.

feedback from delegates and members to provide you

The first of our 2016 golf days was held in Victoria in February. It was a full house with 144 credit professionals attending at Southern Golf Club. This will be followed later this year with events in Sydney and on Queensland’s Gold Coast. The latter being in conjunction with the National Conference. We hold 9 of our monthly board meetings by teleconference and the remaining 3 are face to face. Our

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

with the best information, education and networking experience that can be packed into 3 days. Plan now to get yourself there zz Include it in your annual budgets when you complete them over the next few months zz Incorporate it as reward and recognition for achieving your KPI’s or targets zz Add it to your training and development programme

From the President

aicm

Use it as motivation and reward for your staff ie offer to

Grant’s Soapbox

send them along too, when they hit their targets.

We have received a lot of support of our proposed lobbying

The cost of the conference is far less than what

of the Attorney-General and ARITA for changes to legislation

good organisations spend on the development of their

and practices in

employees.

zz The period in which preference claims can be made ie the

On the legislative front the Treasury Legislation Amendment (Small Business and Unfair Contract

3 year “statute of limitations” on making preference claims is too long and should be shortened to a year or less.

Terms) Bill 2015 received Assent in November 2015

zz The recovery of preferential payments and those

and comes into force in November this year. It amends

Liquidator recovered funds not being paid in dividends

the Australian Securities and Investments Commission

to unsecured creditors or any class of creditor for that

Act 2001 and Competition and Consumer Act 2010

matter.

to extend the unfair contract term protection to

zz Unsecured creditors who are genuinely at arm’s length

businesses with less than 20 employees agreeing to standard form contracts valued at less than the prescribed threshold.

being subject to preference claims. zz Spurious and inflated preference claims from Liquidators ie claiming $700K and settling for $10K.

NSW Barrister Geoffrey McDonald and Rebecca

zz Fees charged by Administrators, Liquidators and

Ross from Gavin Parsons & Associates gave a great

Receivers & Managers ie specifically annual increases of

presentation in February at the annual “Developments

5 – 10% and more.

in Law for Credit Managers” symposium held in Sydney and spent some time on the small business and unfair

Many feel the preference claim time should be a year or less

terms changes. The changes to extend unfair contract

especially when you consider

terms to small business will be an interesting challenge

zz Administrators make a decision on the financial viability

for credit professionals and be the subject of a number

of the company within a month,

of AICM events around the country this year. Stay with

zz The speed of the electronic age

us and stay up to date.

zz The length of bankruptcies

Last month Jan Rann retired from the AICM’s Executive Office. Jan has been with us for 23 years and

The lobbying is now being actioned by James Neate and our

provided support and assistance to many of us in her

Legal Affairs portfolio with lobbying of the Attorney-General

own quiet but highly professional way. She is a true

to be our first action. James will provide an update on our

lady who is unflappable in all situations. I thank Jan for

action in the next issue of this magazine.

the tremendous assistance she has provided to myself and all members over such a long time and I especially

I hope we see you at an AICM event soon as you support the Institute which supports you.

thank her for the patience and kindness she has shown to this old duffer. I know I speak on behalf of the AICM

– Grant Morris

office team and all present and past members in

grant.morris@coateshire.com.au

wishing Jan a very long and happy retirement.

Ph: 0407 405 198

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Portfolio Update CCE and YCP As part of an occasional series, we profile each National Portfolio to better inform members of the role of the National Board, its policy objectives and the work undertaken for members’ benefit. CCE Portfolio The Certified Credit Executive program is designed to be the highest designation of recognition within the AICM. Members achieving this qualification demonstrate the knowledge and expertise required to manage the credit function at an executive level. The program is available to institute members only. It is AICM’s commitment to maintaining professional excellence in the field of credit management. Candidates are required to have attained a minimum professional and educational standard and this is demonstrated through the accumulation of the required number of CCE points. Candidates are to be proficient in the areas of credit and

Greg Young

collections skills, law, legislation, human resources, accounting principles and general management skills. Successful CCE candidates are required to re-certify every three years thus confirming the currency of their credit management skills. The CCE qualification is intended to improve a CCE’s credibility and stature amongst his/her peers and senior company management by confirming their credit management skills and knowledge and their ongoing commitment to the maintenance of those skills and knowledge in a changing business, financial and legal environment. It should also act as a catalyst for staff development by encouraging managers and potential managers to expand their knowledge beyond their particular areas of specialisation, whilst continuing to learn and grow in the marketplace. The CCE qualification aims to improve opportunities as it demonstrates to employers and other industry practitioners that a CCE is motived and accomplished, together with being up to date in knowledge and practice of credit management skills. The aim of the CCE program is to recognise and set standards for excellence and professionalism of individuals operating in the credit industry. The AICM has a CCE policy and procedure which establishes minimum standards and guidelines for those who both participate in and administer the CCE program.

YCP Portfolio The Young Credit Professional of the Year Award, has, since its inception, been held in the highest regard within the credit profession as a symbol of excellence. It has brought valuable career rewards to state and national winners as well as value adding to the organisations they work with. Credit Professionals under the age of 30 as at 30 June each year are eligible to enter. Note: membership is not a requirement to enter. The award is designed to honour young credit professionals who pursue and achieve excellence within the credit field. The award is an AICM initiative to seek out and recognise the best of Australia’s young credit management professionals. Each State division seeks applicants. From these nominees a shortlist is selected for formal judging. The winner is announced at the YCP Awards Dinner and goes on to represent their Division at the National Awards. As National Director for Queensland and Director of the CCE and YCP Portfolios, Greg Young, Partner of Forbes Dowling Lawyers, is always keen to engage with members regarding any issues concerning those portfolios. Feedback from members is vital to the ongoing management of and improvement of the CCE and YCP Portfolios. Greg welcomes any direct contact on 07 3025 3723 or at gyoung@forbesdowling.com.au.

The Young Credit Professional of the Year Award, has, since its inception, been held in the highest regard within the credit profession as a symbol of excellence.

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

Credit Management

How credit management shook off its ‘boring’ tag We’ll admit that a typical credit management job description from the past didn’t make for very exciting reading. Yesterday’s credit manager was heavily focused on mitigating risk by picking through high volumes of company data to decide the creditworthiness or otherwise of customers. The role was laborious and repetitive, otherwise known as boring. Then things started to change.

Working in harmony with other departments and spotting and exploiting opportunities means today’s credit manager is proactive rather than reactive.

Credit management function had to change. The modern credit manager is a new breed: part salesperson, part statistician, part accountant. This makes the position not only more diverse, but exciting too.

Thinking like a salesperson Risk monitoring is still vital to the function, but today’s credit manager also needs to spot opportunities to maximise revenue. They need to think like a salesperson and help the business grow by considering the right sale for each customer, exploiting opportunities without taking an unnecessary risk. This mindset is much more positive than a risk-focused stance that mostly considers the negatives of a customer: cash flow troubles, high debt and a troubled market. It makes for a more involved and enthusiastic credit manager.

Close collaborators The new approach also needs the finance team to work more closely with its peers in sales and marketing so the goals of each are aligned. Information on credit scoring should be fed to the sales team so they can focus their efforts on up-selling and cross-selling to the customer profile that offers the most return for their risk. The same data can also be used by the marketing team to help them put the company in the minds of the ideal customer. Working closely with these functions should see their

knowledge rub off on the credit manager, broadening their skills while adding variety to the role.

A proactive not reactive approach Working in harmony with other departments and spotting and exploiting opportunities means today’s credit manager is proactive rather than reactive. Easy access to tools such as big data, automated actions and analytics models all help them to take a predictive approach. Risks can be identified when there is time to react, and opportunities can be spotted further ahead. There is little sitting back to wait and see, as credit managers have what they need to be dynamic and hands-on.

A more valuable asset With a longer list of responsibilities and a greater importance placed on the role, credit managers are a far more valuable asset to a business than they were before. Some depend on them to advise on the stability of suppliers, while others count on their knowledge of customers and the valuable marketing insights this can offer. With business development also among their remit, a credit manager’s actions will be of interest to shareholders too. Greater job satisfaction is the outcome, as those in the role can be sure they are bringing greater value to the business. n Reproduced from Nick Drivers Blog at https://www.graydon.co.uk/

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

What’s in a name? Alan Harries* of the Institute of Mercantile Agents reviews changes in the language and tone of dealings between collections and individuals in debt.

AICM’s CEO Nick Pilavidis recently asked me to comment on the emerging trend in the UK away from the use of the term “debtor” to “customer” and whether there was any similar change underway in Australia. Responding to this request caused me to reflect that many in the Australian collections industry over recent years have been confused as to what is the appropriate contemporary term to use when referring to the party being followed up for payment of an outstanding account. Terms like “debtor” and “creditor” seem outdated now despite valid origins relating to how transactions have been described within accounting conventions. Accountants still use those terms but the wide adoption of business software applications such as

Terms like “debtor” and “creditor” seem outdated now despite valid origins relating to how transactions have been described within accounting conventions. MYOB and Xero has changed how others describe those transactions. Software developers keen to simplify terminologies for persons not trained as bookkeepers to understand transactions being recorded made some changes such that we have seen “Debtor” replaced by “Customer” and “Creditor” replaced by “Supplier” – similarly Accounts Payable” became “Pay Bills” whilst “Receive Payments” replaced “Accounts Receivable”.

Regulatory language

Alan Harries

A review of current regulations fails to reveal any change to descriptors being adopted by industry regulators.

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

Interestingly, the ACCC/ASIC Debt Collection Guideline1 which is the most important compliance document for collectors and creditors alike, in its Glossary of Terms defines “Debtor” as “a natural person obligated or allegedly obligated to pay a debt” but does not include any definition for either “Customer” or “Consumer”. Potentially, the introduction of the Australian Consumer Law in 2010 (the ACL) presented an opportunity to introduce a redirection for consistent descriptors to be used but I discovered its definition of “Consumer” within this legislative regime was not all embracing. The National Consumer Credit Protection Act 2009 includes a definition for “Consumer” as a “natural person or a strata corporation” but has no definition for “Customer”. The National Credit Code which is Schedule 1 of that Act defines “Debtor” as “a person (other than a guarantor) who is liable to pay for (or to repay) credit, and includes a prospective debtor”.

Trend away from “debtor” Despite the lack of change within legislation and regulations impacting on debt collections, there is nevertheless a trend in Australia away from using the term “debtor”. Such a trend however is not without some issue for those in the collections industry. For example, in moving away from using the descriptor “debtor’ a problem for contingent collectors acting as an agent for principal creditors is that the term “customer” from the collector’s own perspective refers to the party it is acting for. The adoption of the term “customer” within the collector’s operations and records when dealing with and referring to an individual or business debtor owing monies to its principal seems wrong and potentially

Credit Management

creates confusion as to which party is being referred to. In a recent UK article (by Sean Feast, Managing editor of the Chartered Institute of Credit Mangements Magazine) about the trend away from “debtor”, an observation was made that “a company being labelled as a debtor appears to be viewed as less confrontational than an individual being identified in the same way” – this has similar resonance in Australia. The trend in Australia over recent years has been away from using “debtor” and instead the term “consumer” rather than “customer” has increasingly been adopted whenever collectors and agents refer to individuals and businesses more traditionally known to them as debtors. This trend appears to be driven more by a change of attitude and expectations rather than just being a case of semantics. Some reasons for this change include: zz Banks and other financiers directing the use of the descriptor for their customers zz The introduction of the National Consumer Credit Protection Act 2009 A similar change has occurred in the

US where collectors now talk about “connecting with consumers to resolve accounts” rather than “chasing debtors to pay bills”.

Setting the tone Collectors understand their role today is all about communicating with consumers – this involves engaging effectively to understand what they want and need in order to resolve the specific outstanding debt. By itself changing the name or descriptor adopted when referring to the individual owing the account away from the traditional “debtor” will count for little unless the collector’s approach allows the individual to feel respected and to maintain dignity in discussions. An effective approach includes the collector being aware of the individual’s situation and offering where appropriate assistance and genuinely seeking an achievable and affordable solution for the individual The continuing challenge for collectors is how to best engage effectively whilst meeting the regulatory requirements of what to say and when to say it and at the same time avoiding the risk of misunderstandings which can arise when the parties to the conversation

can’t see the other’s body language. Another impediment to establishing effective engagement is often the strong negative views some in the community hold about the collections industry and processes. More than ever there is a need for collectors and agents to ensure the right tone is achieved for conversations so as to deliver effective outcomes – a change in the name or descriptor for the party being contacted to pay a debt or account to something which the individual sees as positive and respectful is a good and subtle step towards developing and maintaining respectful conversations. Compliance obligations and expectations of collectors mean it is not sufficient to communicate so as to be understood but increasingly to communicate in a manner so it is impossible to be misunderstood! Setting the right tone in conversations between collectors and consumers will assist to avoid unhelpful misunderstandings. n *Alan Harries is CEO of the Institute of Mercantile Agents and can be contacted at akh@imal.com.au FOOTNOTES: 1 ASIC Regulatory Guide 96: Debt collection guideline for collectors & creditors published 10 July 2015

You have what it takes to be the 2016 Young Credit Professional. Now it is your chance to be in the running for the 2016 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 2016 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. 2014 joint winners Rebecca Edmiston of Bendigo and Adelaide Bank and Anna Goulubeva of Hilti.

Each Division Winner wins their airfares, accommodation and registration costs to attend the AICM National Conference to be held at Sea World on the Gold Coast, on 12–14 October 2016 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 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

Are you collecting your money right? By Adrian Hunter and Robyn Erskine*

Robyn Erskine

New guidelines introduced in July 2015 by the Australian Competition and Consumer Commission (“ACCC”) and the Australian Securities and Investments Commission (“ASIC”) impact upon how creditors (or their agents) go about collecting debtor arrears. The Debt Collection Guide (Guide) is designed to help debt collectors or those who use external collection agencies to understand how the Commonwealth Consumer Protection Laws (“CCP Laws”) apply to them. It is important to understand that under the CCP Laws, a creditor may be responsible for their agent’s collection activities even if the agent acts in a way that is contrary to an agreement or understanding between the creditor and agent about how the collection is to be undertaken. A creditor may also remain liable for conduct regarding a debt despite having sold or assigned the debt. Whilst the Guide does not have legal force, both the ACCC and ASIC are encouraging businesses engaged in debt collection to follow the Guide and incorporate these into staff training.

What is in the Guide?

Adrian Hunter

The Guide provides 24 guidance areas for reference when a creditor or their agent is seeking to collect an outstanding debt. Various case studies or practical examples are provided to assist the reader in interpreting the Guide. The importance of this is that it gives strong guidance on what a creditor or their agent should and should not do if they wish to minimise the risk of breaching the CCP Laws.

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

These steps range from making contact with a debtor (including what constitutes ‘contact’) to the types and frequency of contact that can be made to repayment negotiations and complaints handling. An overview of the applicable CCP Laws is also provided in addition to other Statutory and Common Law obligations and remedies. Some of the key takeaways include: zz When making contact with a debtor, ensure you are dealing with the debtor and that you identify yourself (i.e. confirm their identity and do not misrepresent your identity). zz If the debtor advises they are unable to pay, you are entitled to make reasonable enquiries regarding their financial position, particularly if they are seeking to make repayments over time. zz Legal obligations under the Privacy Act 1988 attach to the information collected from or about a debtor. zz Do not disclose information about the debtor to third parties (e.g. if an individual this includes work colleagues or spouse). zz Avoid contacting the debtor via a method that they have specifically requested not be used. zz Contact with a debtor must be made during reasonable hours (e.g. 7:30am to 9pm). zz Excessive contact with a debtor may constitute undue harassment (e.g. more than 3 times per week). zz A debtor is entitled to respect and courtesy and contact is to be free of intimidation or humiliation.

Credit Management

zz The Guide considers face-to-face or “field” visits to be an option of last resort (particularly if seeking repayment from an individual at their workplace). zz Do not trespass. zz If a debtor has an authorised representative (e.g. financial advisor, solicitor or carer) then you should no longer contact the debtor directly. zz You should maintain accurate records of your dealings and communications with the debtor. zz Evidence of the debt being pursued should be provided on request. zz Care should be taken when making representations about the consequences of non-payment or the legal status of the debt.

Does this stop me getting my money back The short answer is No. The Guide does not impact upon the legal enforceability of debts that a debtor owes to a creditor. This Guide is mainly concerned with non-court debt recovery processes and informal collection activities before a court action is commenced or after a court judgment. The Guide does not limit any right creditors (or your client) may have to: zz take legal action to collect a debt; zz conduct legal repossession activities and other legal enforcement of legitimate security interests; zz seek and obtain pre-judgment remedies, e.g. orders to prevent the removal or transfer of property from the jurisdiction; zz enforce judgment through a court process – including examination hearings, instalment orders, orders for the seizure and sale of property, garnishment or attachment orders; or zz undertake all necessary procedures (e.g. for serving documents) associated with these actions.

There are statutory defences available that creditors need to consider in addition to conducting their own internal investigation into what they know regarding the debtor. However, the Guide does state that you must not threaten action (legal or otherwise) that you are not legally permitted to take, do not have instructions or authority to take, or you have no intention to take. How legal action is threatened or taken can, in certain circumstances, amount to misleading or deceptive conduct, unconscionable conduct or harassment. It also reinforces that when seeking to collect a debt a creditor also must not misrepresent their legal entitlement to seize goods. Outside of any contractual rights that may exist between a customer and supplier of goods on Retention of Title, the Personal Property Securities Act establishes the rights and obligations that suppliers of goods on Retention of Title must comply with in order to repossess the supplied goods in the event that the debtor does not pay.

What if a debtor doesn’t pay? If a debtor doesn’t make payment and you are looking to either have them made bankrupt or put into liquidation, please contact us as we may be willing to act for you and all creditors as either the bankruptcy trustee or court appointed liquidator.

What if the debtor collapses after I get paid? If a debt is recovered and then within six months of receipt of that payment the client either goes bankrupt or into liquidation, you may be forced to repay these funds as an unfair preference to the liquidator or bankruptcy trustee. Unfair preferences are payments or transfers of assets to a creditor that gives them a ‘preference’ or

advantage over other creditors. (i.e. they are paid instead or in preference to another creditor as a result of the action they took in attempting to recover their debt). The recipient of an unfair preference must have suspected or had reason to suspect that the debtor was insolvent at the time of when the payment to them is made. Often this knowledge accrues in the mind of the creditor as a result of the collection process they have undertaken and the information provided to them during this process by the debtor.

What happens if a liquidator demands I repay funds? One of the first actions you should take before corresponding with the liquidator or bankruptcy trustee is talk with an expert in this field. At Brooke Bird we have been working with creditors for over 50 years in assisting them to defend against the predations of liquidators and trustees. There are statutory defences available that creditors need to consider in addition to conducting their own internal investigation into what they know regarding the debtor. It is important to understand the strength of your defence before liaising with the liquidator or trustee. It may be that the demand you receive is an ambit claim hoping to elicit an uneducated payment from you. n * Both Robyn Erskine and Adrian Hunter are Official Liquidators within the practice of Brooke Bird – Restructuring, Turnaround and Insolvency Specialists. Ph: (03) 9882 6666 E: Info@brookebird.com.au www.brookebird.com.au

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

Three risks to monitor in 2016 Three risks to monitor in 2016: weak growth, political tensions and company debts in emerging economies l Advanced economies: many causes for concern, including financial market volatility, cheap oil and the Chinese slowdown l Emerging countries: in addition to sluggish growth, increasing indebtedness of companies l Increased political risks likely to affect business confidence in all regions By Maire Albert and Julien Marcilly A new year of political uncertainties A cautious approach to evolving country risks will be necessary in 2016. In an environment of soft global growth, forecast by Coface to be 2.7% (after 2.5% in 2015), the risks that emerged in 2015 are expected to remain this year. At the forefront are the political tensions gaining ground in both advanced and emerging countries. The elections in the United States and, above all, the risk of a “Brexit” by the United Kingdom (two advanced countries that outperformed the eurozone in 2015), are likely to weigh on business confidence. In the emerging world, uncertainties remain high in the Middle East. The risk of terrorism could lead to stronger nationalist movements. According to Coface’s political risk index1, Turkey and Brazil particularly stand out, due to their growing political instability between 2007 and 2015, following the significant deterioration of their economic situations. Brazil, whose political crisis and recession

are expected to continue in 2016, thus saw its country risk rating downgraded for the second time in less than a year, to C.

Advanced countries: recovery under pressure Overall, advanced countries will see moderate growth in 2016, estimated at 2% by Coface. The main concerns include their dependency on commodity prices, the Chinese slowdown and financial market volatility. The trend of low barrel prices should continue in 2016, due to the continued surplus of oil supply - in part attributable to Iran’s return to the market. Heavily affected by the drop in oil sector investment, resulting from the decline in its income, Canada has fallen from the best risk category and is now assessed A2. The continued decline in oil prices has, however, had a beneficial effect on households and businesses in certain advanced countries. With the exception of Japan and Italy, the fall in energy bills has helped to revive corporate investment,

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

particularly in Spain and the United Kingdom. Japan is also among the potential victims of the more-pronouncedthan-expected Chinese slowdown, given that 18% of its exports are destined for China. Weak growth (estimated at 0.9% for 2016), the persistent risk of deflation and the indispensability of fiscal consolidation, explain the placing of its A1 assessment under negative watch. Not surprisingly, the decrease in demand and in tourism from mainland China will continue affect activity in Hong Kong and Taiwan, also under negative watch. In the eurozone (with 1.7% growth expected in 2016), the situation of companies is gradually improving. This is evidenced by the insolvency statistics for France, Germany, Italy (a decrease of between -3.5% and -5% over the first nine months of 2015 compared with the same period in 2014) and especially Spain (-26%). Italian growth will be supported by domestic demand, which will benefit

Credit Management

CORPORATE DEFAULT PROBABILITY

Assessment either upgraded, or removed from negative watch list or placed under positive watch list

A1: VERY LOW

Country

Country risk previous

Country risk new

A2: LOW

Hungary

B 

Italy

B

B: SIGNIFICANT

Latvia

B

C: HIGH

Ivory Coast

C

A3: ACCEPTABLE A4: QUITE ACCEPTABLE

D: VERY HIGH

 Country under positive watch list  Country under negative watch list

Assessment either downgraded, or removed from positive watch list or placed under negative watch list Country

from the return of confidence and the progress in structural reforms. This has led Coface to place Italy’s B assessment under positive watch.

Excessive company indebtedness: a new malaise in emerging countries The situation for emerging countries, where growth has halved in five years (3.9% expected in 2016), is further complicated by the growing indebtedness of companies affected by both the drop in commodity prices and the highly expansionary monetary policies which followed the Lehman Brothers crisis. Only Central Europe remains unaffected at this stage. Hungary (whose assessment improved by one notch, to A4) and Latvia (B under positive watch) stand out for their solid growth, supported by household consumption, and for increased exports to European countries other rather than Russia. According to Coface’s economists, Chinese companies are among the most indebted. Their debt represents more than 160% of GDP and 60

Country risk previous

Country risk new

Hong Kong

A1

Japan

A1

Taiwan

A1

Canada

A1

Finland

A2

Namibia

A3

South Africa

A4

Algeria

A4

Bahrain

A4

Kazakhstan

B

Brazil

Gabon

B

Tanzania

B

Zambia

C

Madagascar

points more than in 2008. Following China are Turkey (+30 points), Brazil (+17 points), Russia (+14 points), and Malaysia (+11 points). Turkish companies, which have one-third of their debt denominated in US dollars, are proving to be among the most exposed to currency risks. The main glimmer of hope in the medium term concerns the gains in competitiveness resulting from recent depreciations of emerging currencies. In this context of increased risks for companies, Coface is issuing a one-notch downgrade of the assessments of several emerging countries that were already under negative watch. These include: zz Algeria (B) and Gabon (C), due to the low price of hydrocarbons

zz South Africa (B), negatively affected by sluggish growth and growing social tensions zz Tanzania (C) and Madagascar (D), where growth is constrained by political uncertainties n

Written by Coface Group Economists: – Maire Albert, Economist, Head of Country Risk – Julien Marcilly, Chief Economist FOOTNOTES: 1 Coface’s political risk index combines two types of indicators: pressures from changes (inflation, unemployment, corruption control, etc.) which measure the intensity of socio-political frustrations in a given country and instruments of change (education, social networks, proportion of youth, role of women, etc.), which capture the ability of these societies to transform frustrations into political action.

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

Change – no small thing By Barry Urquhart*

Change is a big deal, particularly in the current marketplace. Whether it is self-generated or imposed by external market forces, change demands attention, consideration, detailed analysis and the formulation, documentation and implementation of an integrity strategy. Incremental change and its consequences, dictate the need for respect. The scale of change differs little in importance from the frequency of that change. In many, if not most instances, all change is significant to consumers. Accordingly, marketing, communications, promotions, merchandising, selling and service initiatives need more than “tweaking”.

Success in the introduction of change is not difficult. It is a consequence of detailed planning and respect for the impact on and perception of existing, prospective and past clients. Sadly, there is a long history of negative and sub-optimal outcomes as a result of change – big and small.

Causal factors Clearly, a majority of unsuccessful change initiatives are derived from the management, and more disturbingly, marketing offices of companies, including manufacturers, distributors and retailers. Greater knowledge, better education, unbounded creativity, originality and a marketing degree do not guarantee success and market acceptance. Imposing and enforcing change on consumer perceptions, preferences and buying patterns is fraught with danger and difficulty. In such circumstances considerable time, money and resources need to be invested in the education and re-education of those in the primary, secondary and tertiary target markets. Instant success is a rarity, if not a myth.

Lessons to learn

Barry Urquhart

It is refreshing to learn (and reassuring to the owners, managers and marketers of small businesses) that major global corporations, brands and product managers are prone to falling short in successfully implementing change. The frequency of mistakes, shortcomings and

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

outright failures is high. The scale of the consequences appears to be a differentiating factor.

Cheers ...... to tears For some 15 years the largest selling beer brand in Australia was Victoria Bitter, “VB”. The brilliance of the advertising which featured the voice of the late John Meillon resonated with Australian drinkers and teetotallers alike. A national market share of between 12 and 14% was enjoyed for an extended period of time until someone decided to introduce a low-alcohol option. That weakened the presence and profile of the brand. VB has slipped the ladder of success to approximately 3-4% market share. The biggest selling beer brand in Australia is now XXXX, once a regional Queensland-based offering. For global consumers the labelling may imply that it targeted to illiterate consumers. Not so. Although it could be a strikingly adroit strategy to impact among the 60%+ of the world’s population who sign documents with an X!

King of the road For decades the Holden 6-cylinder Kingswood was Australia’s own family motor car. Annual sales regularly exceeded 150,000. Given the vagaries of oil supplies, and attendant price hikes, in the 1980s and beyond it was noted that a trend was emerging with the increasing popularity and sale of smaller, 4-cylinder European cars.

Credit Management

The decision was made – by whom I do not know – that the Holden Kingswood would be superseded by the Commodore, with the brand name Holden being removed or de-emphasised. Sales plummeted to around 80,000 per annum. It was a costly lesson. Most changes come with consequences, some larger than others. Holden never recovered and will cease production of motor vehicles in Australia by 2017.

Wrapped up Glad Wrap is a constant in many Australian kitchens. A recent change in the packaging and introduction of a new cutting device hurt sales and a number of customers. Revenue bled, so too consumers, who could not effectively use the innovative cutting device.

Appropriately, the new packaging was promptly withdrawn, to the delight (and well-being) of many consumers. The change to McDonald’s product range with the introduction of All-Day-Breakfast was hardly a resounding success. It seems consumers were happy to move on from breakfast mid-morning. McDonald’s franchisees found the extended hours of a breakfast offering was inefficient and impacting on profitability and productivity. In recent times, McDonald’s and the broader fast-food sector have been experiencing falling demand, sales and squeezed profits. The best change seems to be good rather than fast ... consumer driven rather than management rushed. The margins for effort, like profits, can be and are increasingly thin.

Change action plan fundamentals zz Identify, isolate and analyse the demand factors for change zz Ensure customer drive, and acceptance zz Differentiate wants from demands – the former can create fads zz Formulate, document and implement an integrated change strategy zz Recognise and respect that to consumers, all change is BIG n

*Barry Urquhart of Marketing Focus is a respected consumer behaviour analyst, business strategist and high impact conference keynote speaker. Mobile: 0419 835 555 Telephone: (08) 9257 1777 Email: Urquhart@marketingfocus.net.au Web: www.marketingfocus.net.au

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

ASIC releases report on debt management firms ASIC recently released a research report that aims to better understand the debt management industry in Australia and the consumer experience in using debt management firms. Debt management firms promise to help consumers in financial hardship or with listings of payment defaults on their credit reports. The report, Paying to get out of debt or clear your record: the promise of debt management firms (REP 465), was commissioned by ASIC’s Consumer Advisory Panel (CAP).

While an increasing number of consumers are being represented at EDR by debt management firms, this is not leading to more credit reporting related disputes being found in favour of consumers. 18

The research involved two phases: zz a qualitative analysis and mystery shop of debt management firms by BIS Shrapnel Pty Ltd. zz a survey on the involvement of debt management firms acting for consumers in Ombudsman schemes covering the financial services, telecommunications, energy and water sectors.

Findings – qualitative analysis and mystery shop: zz fees and costs were opaque making it difficult for consumers, often in significant financial hardship, to assess the cost relative to the purported value. zz fees were often ‘front loaded’ – that is, fees were payable before services were provided thereby increasing consumer commitment through sunk costs. zz some sales techniques create a high-pressure sales environment. zz little information was given about important risks. Some firms had a poor understanding of the relevant law and the consequences of particular strategies which may lead to unsuitable services for consumers.

Findings – Ombudsman survey data and analysis: zz a growing number of firms are representing consumers at external dispute resolution (EDR). This is concentrated among a few large players with an increasing number of small firms entering the market.

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

zz the disputes brought to EDR schemes by debt management firms relate almost exclusively to arguments about the removal of default listings on consumer credit reports (despite the breadth of other issues that can arise for indebted consumers). zz while an increasing number of consumers are being represented at EDR by debt management firms, this is not leading to more credit reported related disputes being found in favour of consumers. “Where consumers go to debt management firms, it is important they understand what they are getting and how much it will cost, so they can decide if it’s worth it,” said ASIC Deputy Chairman Peter Kell. "The promise is always more prominent than the price”, he said. “It is hard to find information about fees and they tend to be high, front loaded, and not refunded if the promise isn’t delivered. “It’s also important for consumers to understand that they have alternatives to the use of these firms that may be free of charge such as financial counselling services. “Many stakeholders have raised concerns with ASIC and other regulators about potential harms posed by firms that may provide unsuitable services, act in ways not in the best interests of clients, or at worst, engage in predatory conduct leaving the consumer worse off,” Mr Kell said.

Credit Management

Background Debt management firms promise to help consumers in financial hardship or with listings of payment defaults on their credit reports by: zz ‘cleaning’, ‘fixing’ ‘repairing’, ‘removing’ or ‘washing’ away default listings on credit reports zz developing and managing budgets zz negotiating with creditors, including lenders, telecommunications companies , utilities companies or debt collectors zz advising and arranging formal debt agreements under Part IX of the Bankruptcy Act, 1966. While the models are diverse, many debt management firms operate one-stop-shop models offering a combination of some or all of the above services. The debt management industry has grown despite the fact that consumers can freely access: zz their credit report and challenge an incorrect listing at no cost. zz help from financial counsellors or community legal services. zz independent ombudsman schemes to help resolve disputes with lenders, telcos and utilities providers. This suggests that there is a lack of consumer awareness about the potential benefits of alternatives to debt management firms. There is no uniform regulatory framework for debt management firms and barriers to entry are low or nonexistent. Consumers in financial hardship can be extremely vulnerable and behavioural research shows that financial stress can materially affect people’s ability to make good decisions.

Case studies The report includes case studies, which demonstrate that some consumers experience poor outcomes.

Tips for consumers in financial hardship or with credit or debt problems

 Talk to your lender, telco or utility first about your financial hardship or credit listing.

 Talk to the free ombudsman scheme for help before you pay a fee to a debt management firm.  Talk to a free and independent financial counsellor or community legal services for help.

Industry news Whilst the ink is yet to dry on the purchase of Veda by US credit bureau Equifax, Veda has announced the acquisition of EDX, the experts in Personal Property Securities across Australia and New Zealand on 22 February 2016. This acquisition strengthens Veda’s existing offering across Personal Property Securities registration and search. Established in New Zealand in 2006 and expanding into Australia following the introduction of the Personal Property Securities Act 2009 (Cth), EDX offers comprehensive registration, search, compliance, and remediation services. The EDX service includes ESIS, Electronic Securities Information System, a cloud based platform that hosts the Personal Property Securities Register (PPSR) and related details post-registration. This allows customers to effectively manage and maintain their registrations. In addition to this market-leading securities management system, EDX brings to Veda a network of independent brokers providing Personal Property Securities compliance review and advisory capabilities. Nerida Caesar, Veda’s CEO said, “The integration of Veda’s existing PPSR registration and search capability with the EDX hosted solution provides an even stronger offering for our customers. It can help them to protect their financial security interests in a more effective way.” The founders of the business, Kim Powell and Mary Bayne, have created the market leading platform and a successful business in Australia and New Zealand. Kim Powell said, “We are excited to take the business to the next level with Veda through extending our expert services to Veda customers and serving new customers with our combined capabilities.”

ASIC has information and guidance for consumers about trouble with debt and credit repair on its MoneySmart website. n Source ASIC Media Release 21 January 2016 http://asic.gov.au/aboutasic/media-centre/find-a-media-release/2016-releases/16-011mr-asicreleases-report-on-debt-management-firms/

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

Fraud and the impact on Trade Credit By Imelda Newton* Credit managers are experts at using various pieces of information to make sound credit decisions but is enough being done to detect fraud before goods are dispatched and bad debts are incurred; not to mention the costs of attempting to recover bad debts? With fraudsters becoming more sophisticated, it’s important for companies to protect themselves from fraud and loss. Identity takeover has grown 59%1 in the past two years which means it’s more important than ever to know who you’re doing business with and proactively manage the risk of fraud.

A recent fraud case Background We were recently made aware of a fraud case in the trade credit industry: zz The fraudster applied for a new account using a stolen identity. The applicant was posing as a sole trader. zz The credit limit requested was under the threshold for close due diligence to apply. In other words, it’s likely the fraudster had knowledge of commonplace thresholds. zz The application was approved. zz Building materials were immediately purchased and dispatched. zz The “sole trader” did not pay. zz The investigation revealed that a stolen identity had been used to secure the credit account and goods could not be recovered.

Three ways to prevent fraud Fraud detection methods used by major credit providers such as banks and asset financiers are now available for use by trade credit providers. The company in this case study

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

is currently implementing three different fraud prevention processes into its customer on-boarding framework to ensure they only deal with legitimate businesses, and you can too. Here’s how: 1. Identify the people you’re about to do business with Verifying the identity of directors and sole traders at the point of application (online or face-to-face) can help minimise risk by ensuring you are doing business with a real person, not a fraudster. Veda’s identity verification service performs an identity check in real time, in seconds, using up to 25 independent data sources to confirm the person is who they say they are. 2. Run a fraud assessment Take identity verification one step further by running a fraud assessment to determine the likelihood that an application is an attempt at fraud. The assessment can tell you if the person is using a stolen device, such as a laptop or mobile phone, and if they have a history of fraudulent behaviour. 3. Manage your own rules Develop your own fraud and identity verification rules under a risk-based approach whilst maximising your business objectives. n *Imelda Newton is General Manager, Fraud & ID at Veda. www.veda.com.au FOOTNOTES: 1 Veda 2015 Cybercrime and Fraud Report

With fraudsters becoming more sophisticated, it’s important for companies to protect themselves from fraud and loss.

Legal

The obligation of the insolvency practitioner to act honourably and fairly in the administration of insolvent estates By Keith Bennetts*

Introduction There is a fundamental principle arising in the administration of an insolvent estate. The insolvency administrator is obliged to demonstrate “right-mindedness” and “fairness” in the course of the insolvency process. For example, on occasions a payment received by the liquidator of a company or trustee in bankruptcy may have been made by mistake, such that the party making the payment in error may seek to have the funds restored. One option available to a claimant in these circumstances is to invoke the rule in Ex parte James. Under this rule the essential argument is that it is unreasonable and unfair for the insolvency administrator to take advantage of funds acquired in these circumstances, irrespective of the strict legal position. At this stage it will be useful to consider the nature and scope of the rule in Ex parte James.

The nature and scope of the rule in Ex parte James

Keith Bennetts

Generally stated, the rule in Ex parte James requires that a liquidator or trustee in bankruptcy avoid invoking strict legal rights where this would

result in outcomes contrary to ethical standards of commercial fairness. As the Court in Star v Silvia (No1) (1994) 12 ACLC 600 at 604 observed: “The principle should be applied to ensure that the liquidator does not hold property where there are claims of conscience against the property, without recognizing those claims of conscience.” The following cases provide examples of the operation of the rule while also generating useful case studies for trade credit professionals.

Application of the rule in Ex parte James in cases involving alleged unfair enrichment Re Paddington Town Hall Centre Ltd (in liquidation) (1979) 41 FLR 239, SC (NSW) At the date of winding up, the company had accounts with its banker with credit balances totaling $8,218 and loan accounts with a debit balance of some $70,000. Following his appointment the liquidator requested the bank to transfer the credit balances to the liquidation account. The bank complied with this request and then submitted a proof of debt in the sum of the debit accounts. Subsequently when the bank became aware that it possessed a right of

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

set off under the Corporations Act, the bank sought from the liquidator reimbursement of the sum of $8,218 in respect of which it claimed a set off, while reducing the $70,000 proof of debt by the amount recovered. In the first instance the liquidator took the position that the bank was estopped from claiming back the $8,218. Subsequently these proceedings were commenced by the liquidator seeking directions from the Court as to the appropriate disposition of the funds. In applying the rule in Ex parte James the Court reasoned that in view of the bank’s mistake as to its statutory right of set off, the liquidator was in substance possessed of funds belonging to someone else and so ought to set an example by restoring the funds to the bank which could then proceed to give effect to its right of set off. Barringtons Accounting Pty Ltd v Barringtons Your Business Advisors Pty Ltd (in liquidation) (2015) WASC 56, 11/2/2015 Recently the Supreme Court of Western Australia had occasion to

review the rule in Ex parte James with respect to payments made by debtors to the wrong creditor, being a company in liquidation. In the case the plaintiff had purchased a company’s business assets. Subsequently the company proceeded into liquidation. The essence of the plaintiff’s claim was that a number of its clients, who had previously been clients of the company, had mistakenly made payments in respect of services performed by the plaintiff into bank accounts in the name of the company in liquidation, intending that the payments be made to the plaintiff. The payments were made both before and after appointment of the liquidator in the amount of $268,646. The plaintiff sought leave of the Court to commence proceedings against the company in liquidation with a view to recovery of the funds. For reasons beyond the scope of this discussion the Court determined that the applicant did not have standing to bring proceedings against the company that technically involved the rights of the clients. Importantly, however, the Court

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

identified an alternative to action against the company, namely, the supervisory role of the court with the principles of the rule in Ex parte James in mind. In canvassing the relevance of the rule in Ex parte James, the Court concluded: “It is at least arguable that on being discovered that money has been mistakenly paid to a company in liquidation under the control of a liquidator appointed by the court, the court would act in the manner contemplated by the earlier authorities [applying the rule in Ex parte James] and direct that the money be repaid. As the principle is concerned with practical justice rather than legal entitlement, it is at least arguable that the court might make a direction for repayment without demanding an expensive and time consuming inquiry….” Clearly the Court envisaged that the most appropriate means of resolving the matter was an application to the court with a view to invoking the rule in Ex Parte James aimed at redressing the unfair enrichment of the company in liquidation.

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Does the rule in Ex parte James extend beyond cases involving recovery of mistaken payments? Cases involving the rule in Ex parte James have moved beyond mistaken payments, with potential to regulate a range of events arising out of the administration of insolvent estates. For example, in Re Associated Dominions Assurance Society Pty Ltd (1962) 109 CLR 516, an employee of a company in liquidation had a two year limitation period to bring a claim for payment in lieu of long service leave. The employee had relied upon the liquidator’s announced intention to seek directions from the court on the matter, and accordingly did not make an application in the ordinary way. When the liquidator eventually made the application for directions the two years had elapsed since the termination of employment, so as to prevent the employee from pursuing the claim in the winding up irrespective of the outcome of the directions application. The High Court held: “In those circumstances I do not think it would be proper to allow the claim to be defeated by the limitation…. And upon the principles enunciated in Ex parte James …. I propose to disregard the suggested limitation.” (para 5).

Cases where the rule in Ex parte James has not been applied On occasions the courts have been reluctant to apply the rule in Ex parte James, particularly if it can be shown that the insolvency practitioner has not personally been involved in

the transaction or decision under scrutiny. In this regard the following case provides important outcomes for trade credit professionals. In Re Alias Ayoub Ex parte: Brian Raymond Silvia (1983) FCA 112, unbeknown to the trustee in bankruptcy the undischarged bankrupt commenced operating a business. In the course of trading the bankrupt purchased stock and office equipment on credit. The suppliers were unaware of the bankruptcy when they extended unsecured credit to the bankrupt. Although the stock and equipment supplied became after-acquired property vesting in the trustee for the benefit of pre-bankruptcy creditors (section 116(1)(a) Bankruptcy Act), the suppliers’ claims arising after the date of bankruptcy were not provable in the bankruptcy (section 82(1) Bankruptcy Act). As a consequence the trustee sought directions from the Court as to whether the rule in Ex parte James justified the trustee paying these debts out of the assets available in the bankruptcy. In deciding that the case “does not amount to inequitable conduct of the kind that has hitherto been regarded as sufficient to invoke the rule in James’ case,” the Court was influenced by the fact that: zz There was no evidence as to what steps, if any, the creditors took to check the bankrupt’s credit worthiness before supplying him with goods zz The creditors ran the risk of doing business with the bankrupt zz The trustee was unaware of the transactions

zz It was not to the point that remedies available to the creditors to recover their debts against the bankrupt personally were likely to prove fruitless.

Summing up It is apparent that the enquiry undertaken by a court in applying the rule in Ex parte James will often be fraught with vagaries and uncertainty. Each case must be dealt with on its own facts and the court is free to act according to the judge’s opinion as to what would be just and fair in each case. Moreover the enquiry undertaken by the courts is not simply to determine if a legal right exists in the hands of the claimant. An enquiry premised on “fairness” extends beyond this into the realm of ethical propriety and commercial morality. As one Court observes: “When the authorities employ the phrase “just and fair” they are not using it in the sense of unconscionable as a matter of the settled principles of equity, but rather, just and fair in the mind of the person on the Bondi bus.” Notwithstanding the vagaries involved and the likelihood of questions raised becoming “the subject of honest difference among honest men”, the courts have not been deterred in their willingness to apply the rule in Ex parte James to ensure that the highest standards of fairness are achieved in the administration of insolvent estates. n

*Keith Bennetts is National Consultant for BRI Ferrier

Cases involving the rule in Ex parte James have moved beyond mistaken payments, with potential to regulate a range of events arising out of the administration of insolvent estates.

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

Electronic contracts – what’s new? By Peter Mills and Robert Gallagher

Peter Mills

Many rules which apply to “paper” contracts also apply to electronic contracts entered into by email, online or otherwise electronically. As many businesses and suppliers move to online and electronic credit applications, including with customers who are not in Australia, these rules are even more pertinent. Some of these rules were recently considered by a number of courts, including the Supreme Court of Queensland in Stellard Pty Ltd & Anor (“Stellard”) v North Queensland Fuel Pty Ltd (“NQF”) (“Stellard’s Case”) which considered the electronic signing by email of a contract which created an interest in land. Thomson Geer Lawyers acted for the successful party, Stellard. In a three part series, we will discuss certain issues concerning electronic transactions and how they might affect you: zz PART ONE: can an email be a “signature”? When do Credit Applications and their Terms and Conditions of Trade (called “T’s+C’s”) and guarantees need to be “signed” and are foreign laws relevant? zz PART TWO: who has sufficient authority to “sign” on behalf of a customer or guarantor and what happens if they do not have authority? zz PART THREE: when are the parties bound during negotiations, even when they say “subject to contract”?

Can an email be a signature? Robert Gallagher

Generally, if a contract (or a clause therein) creates an interest in land or

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

is a guarantee, the laws in Australia and elsewhere require that there must be a memorandum or note in writing signed by the relevant party or their agent. This is especially relevant for creditors who rely on charging clauses to lodge caveats over interests in land or on guarantees. In Stellard’s Case: zz Stellard wanted to buy land off NQF and after a trail of various emails sent NQF an email noting the amount the company was offering to pay and the general terms of the offer (“offer email”). zz No formal contract document had ever had a handwritten or electronically encrypted signature placed on them. zz An email (“the acceptance email”) was sent by NQF’s agent (being the director’s son “Drew”) accepting Stellard’s offer email, and containing the intentionally typed name “Drew” at its end. zz NQF agreed that the acceptance email was sent by Drew and that it was a “memorandum or note in writing”. zz NQF alleged that the acceptance email was not an enforceable contract for the land as it was not “signed”.

Was the acceptance email a “signed” memorandum or writing? Australia has a national scheme for electronic transactions laws. Similar laws also exist in other countries. In Stellard’s Case, the Court ruled that, given the trail of emails, the acceptance email contained a “signature” and so there was an enforceable contract for land as it was

Legal

a “memorandum or writing …signed” by the registered owner or its agent: In circumstances where parties have engaged in negotiation by email and in particular where an offer is made by email then it is open to the court to infer that consent [to the method of use being email] has been given by conduct of [the relevant party, being consent by the seller NQF]. Drew, in communicating negotiations via emails had implied consent on behalf of NQF to the method of signing by email. Which of the relevant electronic transaction laws apply to suppliers T’s+C’s will depend on their wording and whether a business uses an online system, emails or other electronic communications for credit applications and guarantees especially if there is no email trail. If done correctly, “signing” of documents may be possible by an electronic means other than emails, provided a supplier strictly complies with the relevant electronic transactions laws of Australia or elsewhere.

When do T’s+C’s and Guarantee’s generally need to be “signed” to be enforceable for certain rights? T+C’s and guarantees will normally contain express terms to secure any payments owed to their supplier. Common examples of these are: zz The supplier will retain ownership of its goods until they are paid for in full (called “a ROT clause”). This is a “security interest” under the Personal Property Securities Act (2009)(Australia) (called “the PPSA”) and the equivalent laws of other countries that suppliers might operate in. To be enforceable against the goods: —— Under the PPSA, the T’s+C’s may be either “signed” by the customer, or “adopted”

by an act or omission of the customer. —— Under the equivalent laws of other countries, the T’s+C’s must be “signed” by the customer and cannot be merely adopted. Failure to have the T’s+C’s “signed” will mean that there is no “security interest”. The ROT clause is not enforceable and the supplier is at best an unsecured creditor. zz A charge is granted to the supplier over any interest in land the customer may have either currently or in the future (called “a charging clause”). A charging clause entitles the supplier to lodge a caveat over any interest in land registered in the name of the customer. This is a powerful tool in debt recovery. To be able to lodge a caveat under Australian law the T’s+C’s (as in Stellard’s Case) must be “signed” by the customer. Most other countries have the same or similar requirement for their caveat lodgement systems. zz In guarantees, a charge is also often granted over any interest in real or personal property which the guarantor has, or is capable of granting an interest in (called “a general charging clause”): —— Under Australian law, a guarantee must be “signed” by the guarantor or its agent for its terms to be enforceable. It cannot be “adopted” and the PPSA does not override this requirement; —— The test of whether an email by a guarantor is a “signed” guarantee is similar to that discussed in Stellard’s Case; and —— The requirement for a guarantee to be “signed” is also common under the laws of most countries. Under the PPSA and equivalent foreign laws, registration on the relevant register is normally also required.

Takeaways In summary, as suppliers more commonly use online and other electronic transactions for account applications, guarantees and other documents, it should be ensured that their processes and documents comply with various laws for how a document can be “in writing” and lawfully “signed”. Whilst an email can be a signature, generally suppliers should: zz Identify the requirements of the PPSA and relevant equivalent foreign laws and whether their T’s+C’s need to be “signed” or need only be “adopted”. zz Ensure that guarantees are “signed” as required under the relevant Australian and foreign laws. zz Ensure that documents and processes comply with Australian and foreign electronic transactions laws and other laws to ensure that they can enforce their ROT clause, charging clause and/or general charging clause. zz Whether they use email, facsimile, hard copy, a web portal or other process, make sure that it satisfies the relevant requirements for the relevant document to be “signed”. This will depend on the facts, the relevant electronic transactions laws, supplier documents, processes & procedures and whether a foreign country’s laws are relevant. zz Consider the risk if they fail to have their T’s+C’s and/or guarantees “signed”, they may not be able to enforce various rights against the relevant assets, customer, guarantors or third parties, or lodge caveats. zz Ensure that they properly register under the PPSA and the equivalent foreign laws. n Written by: Peter Mills, Special Counsel pmills@tglaw.com.au T +61 7 3338 7921 Robert Gallagher, Partner rgallagher@tglaw.com.au T +61 7 3338 7920

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

Statutory Trustee sale – creditor wins But, co-owner bears the burden of skeletons in the closet By Chris Cook*

A lesser-known form of insolvency appointment that is very effective for creditors is a Statutory Trustee appointment of real property.

So, what is a Statutory Trustee appointment? A creditor applies to court to appoint a statutory trustee over real property. Once appointed, the statutory trustee secures and sells the property and distributes the proceeds in a manner ordered by the court. Typically mortgagees are paid first and then the creditor that made the application. By doing so, the creditor effectively makes themselves a priority secured creditor over the property (i.e. second only to any pre-existing mortgagee).

How does such an appointment occur?

Chris Cook

The creditor has a clause in the credit application signed by the debtor that says in the event of a default, they agree that the creditor has a charge over the debtor’s interest in any real property they own. When the default occurs, the creditor will secure their interest by placing a caveat over the property. They then have a three-month window to commence proceedings to enforce their charge. Normally, an application is made whereby the creditor demonstrates to the court that they have the relevant charging clause and due to the default they request an independent party to

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

be appointed as a statutory trustee. The more common orders made by the court will be as follows: 1. Statutory trustee be appointed to the real property in question 2. The statutory trustee secures and sells the property 3. The property’s sale proceeds be distributed in the following manner: a. All selling, conveyancing and statutory trustees court costs be paid. b. Any mortgages over the property be paid out in full. c. The applicant creditor’s debt be paid in full. d. Any remaining funds be returned to the owner of the property. Evidently, it is a very useful tool for creditors to gain a priority status and obtain some security over tangible assets. The debtor is given plenty of warning about the action and therefore should the statutory trustee be appointed it should come at no surprise to the owner(s) and therefore the appointment should be very straightforward... well that’s not always the case. Recently I was appointed as a statutory trustee to a property whereby the process outlined above had taken place. Although there was one major difference, the property was jointly owned by two people: Owner A and Owner B.

Legal

Owner A had no idea that Owner B had a charging clause over the property. In fact, the two owners had separated and were no longer in contact. This is where things got interesting. Upon our appointment we contacted both owners. Owner A was shocked to hear of our appointment and claimed to have had no knowledge of a court order requiring us to sell the property. Owner A disputes this position entirely and takes legal action in an attempt to terminate our appointment as statutory trustees. Through this process the following was revealed: zz Owner A and Owner B were in a defacto relationship and co-purchased the property. zz The two owners separate. zz The property is used as a rental property with an unrelated tenant occupying the premises for a period. zz Owner B operates their own business and as part of this process, signs a document whereby a charging clause is

included for Owner B’s interest in any property, allegedly without Owner A’s knowledge. zz Owner B’s business fails and as a result we are appointed as statutory trustee. After significant time and correspondence between all parties involved, the legal action is dismissed and our appointment as statutory trustees is acknowledged. At this time (after many months) we are finally able to perform our duties and proceed to sell the property. Once the property was sold, the expenses and mortgage was paid out and the net proceeds were split equally to each owner. From Owner B’s share the creditor and the application costs were paid resulting in Owner B receiving no return at all. Owner A was entitled to 50% interest in net proceeds. Unfortunately for Owner A, as a result of their legal action there were significant delays and increased costs incurred by the statutory trustees, their solicitors, as well as Owner A’s

own legal expenses. This resulted in significantly less being available for their interest in the property.

What could Owner A have done differently? Upon their separation, immediate action should have been taken to deal with the property, either by one owner buying out the other or with an outright sale to an external party. If the property had been sold or Owner A bought the property outright, Owner B would be removed from the legal title on the property, in which case, the creditor would be unable to lodge a caveat over the property and therefore no statutory trustee would have been appointed. Some stamp duty would likely be payable on any purchase between the parties and possibly some capital gains tax issues. However, by ignoring the issue and allowing the property to remain in joint names, Owner A received significantly less. Not only through the statutory trustee’s costs but also through sharing any appreciation in the property’s value with Owner B which would be a sole benefit had the property been purchased outright by Owner A. n *Chris Cook is a Partner at Worrells Brisbane Phone: (07) 3225 4386 - See more at: http://www.worrells.net.au/ eUpdateNewsletters/ViewArticleListing. aspx?ArticleId=5748#sthash.a1HnoRrX.dpuf

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Legal

What is the threshold for suing a debtor? By Roger Mendelson*

Roger Mendelson

Most credit managers take the view that legal action for debts below about $5000 is simply not worthwhile. This is usually because of their poor experiences with legal action. The result is that literally hundreds of millions or even billions of dollars are being written off annually, which are in fact quite collectable. In this article, I will start from the beginning and describe what an excellent collection system would provide for in terms of legal action. The first step is to ensure that the information collected from the customer is not only correct in terms of the exact name and the home address but importantly a mobile number and email address along with details of where the customer works. If the customer is a company, the default position is that directors’ guarantees must be obtained. Legal action against individuals will always produce a better outcome than against companies. Obtaining work information for debt granted to individuals is an essential step to being in a position to sue and successfully recover the debt, as I will get to further on. Your business must have proper trading terms in place and there must be a clause which provides that in

the event of default, the customer will be liable for all costs incurred by the creditor, including commission, interest and indemnity legal costs. By having this clause in place, the decision to sue becomes a much easier one because at that stage the commission payable to your collection agency can be added to the claim along with indemnity legal costs. The difference between “indemnity legal costs” and normal “party/party legal costs” granted by the court is usually about 40% more. Thus, if you have the correct clauses in place, when you sue, you will be adding all legal costs incurred by you. This will significantly bump up the amount of the claim and this alone will increase pressure on the debtor. When deciding to sue, you need to ensure that you have a correct address for service. However, if you don’t but you have a verified work address, it is possible to get an order for substituted service and to serve the documents at work. A final piece in the jigsaw is to look at the state in which the debtor lives. As the overwhelming percentage of consumer judgments will be enforced by Garnishee of wages, there are certain states which offer better and cheaper processes for this than others. Unfortunately, South Australia is

"Obtaining work information for debt granted to individuals is an essential step to being in a position to sue and successfully recover the debt..."

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

Legal

effectively a no go area for garnishees, whilst New South Wales and ACT provide cheap, quick and effective Garnishee Orders. All other states provide worthwhile processes. In all states, there will be an additional cost order granted against the debtor to cover the garnishee costs. In our experience, if all of the above boxes have been ticked, then it is commercially worthwhile suing on debts as low as $500. For company debts which exceed $2,000 and are undisputed, we would not sue but go straight to Statutory Demand. This is quicker, cheaper and more effective. In order to handle volume legal actions, you need a law firm which specializes in debt collection and

which provides fixed price fully inclusive legal action services for all Australia jurisdictions. If your policy has been to not sue on consumer debts, I suggest that you set aside ten or twenty files and carry out a test run. The results will not be immediate because garnishee processes tend to invariably involve payments over time but I am confident of an overall recovery of the net debt of 75-80%. If you do so, you will find that you are advantaged by the fact that most credit managers don’t sue. Accordingly, debtors will usually ignore threats because they are aware from experience that the threats made are hollow. It does no harm to you to be seen as being effective and tough in your collections processes. The

upside to this is that debtors will know that “they can’t mess with you”. The result is that next time around, you will get paid in preference to others, who will probably be ignored. n To ensure that you incorporate the correct wording in your trading terms, contact the Prushka Client Services Team on 1800 641 617 or go to www.prushka.com.au and obtain the complete wording, which is provided without charge. *Roger Mendelson is CEO of Prushka Fast Debt Recovery Pty Ltd and is principal of Mendelsons National Debt Collection Lawyers Pty Ltd. Prushka acts for in excess of 53,000 small to medium size businesses across Australia and operates on the basis of NO RECOVERY – NO CHARGE. The writer is also author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival, both published by New Holland Publishers in 2009. Mendelsons Lawyers Fixed Price Fully Inclusive legal action in all Australian jurisdictions.

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Training News Preparation guidelines for writing a written assessment/essay Introduction

3. Plan Your Writing

Every piece of written work tells a story. It has a beginning, middle and end. You may find it helpful to think of your written assessment as a discussion of the topic(s) to which you must respond. The introduction should clarify the terms that will be used to introduce the ideas/concepts to be considered and indicate your overall conclusion. The body of the written assessment is used to explore the idea and facts at hand and should inform the reader of your point of view. In the conclusion you should not raise new ideas, rather you should restate your case and support it by restating your strongest points so that the reader is convinced of your viewpoint.

It is a good idea to develop a plan or structure for your assessment before you begin. For example, you may be writing a 2000 word report in which you have to address four different ideas each containing five supporting points. In this case it would be a good idea to create a flow chart or a mind map or even a simple list of dot points stating your ideas and their supporting points. This way you can structure the assessment and ensure you have a logical and clear progression.

1. The Question What is the question actually asking me? Try breaking down the question substituting words and phrases with words and phrases of similar meaning to cement and confirm your understanding of what it is you are actually being asked to do. Write the question as a statement incorporating your understanding of the question. Next ask yourself what is the major idea(s) to be explored within this written assessment? Do I agree or disagree with this idea? From here you can begin to formulate a plan for your assessment.

2. Who is my audience? When writing anything ask yourself, who am I writing this for and for what purpose? It is here that you can decide on the best style of writing. In most workplaces the style will be a mix of academic and technical writing. Although this sounds quite difficult we actually read and write reports every day. You then need to decide is this explanatory writing i.e. it will explain something to the audience or is it responsive, that is responding to something already in progress. The best way to address these questions is to remember who has asked you to prepare this assessment and for what purpose? What is their understanding of this subject matter? What is their understanding of jargon and other specific terms? Why are they asking for it? Do they want your personal opinion or do they want you to evaluate (for example a process or a policy)? Are you required to come to any conclusion? Will one person be reading this report or will it be read by many? It is important in an assessment to write from the neutral third person. Rather than saying “I believe…” or “I feel…” you need to say “it is believed…” or “a common feeling…”

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

4. The Opening Statement This is called the thesis statement, in your thesis statement it is a good idea to restate your understanding of the question in a statement but also address your argument and the overall idea of the essay. It is important that you do not conclude (i.e. answer the question outright) in the opening statement but instead use gentler language so that the assessor will be encouraged to read on. For example, if asked “Do you agree that a company’s policies and procedures are of paramount importance during the collection process?” A good thesis statement would be “The importance of a company’s policies and procedures during the collection process must be recognised although there are other equally important factors”.

5. The Introduction When beginning a written assessment not only are you introducing a topic but you are introducing the work itself. After you have written your thesis statement it is a good idea to define or clarify any points or language that may have a specific meaning in the context of your work. It is important to do this as words or phrases may have alternate meanings and unless clarified your assessor could be confused. It is then a good idea to address the topics that you are going to discuss devoting a sentence to each topic, these are called topic sentences. For example if you are writing a 1000 word assessment you may wish to raise 3 separate ideas or topics. In the introduction you would have 3 separate sentences addressing each topic. This acts as kind of a road map so that after the assessor has seen your thesis statement they can understand the direction of the assessment.

aicm Training News 6. The Body Begin with the topic sentence, as this is the idea you will be discussing. Then for every supporting point within that idea it is recommended you follow this simple formula. Point What is my point? Example Where in the text or the workplace is this point demonstrated/supported? Effect How does this point support my initial idea? Link Why is this relevant to my assessment? For example a topic statement of “Another important factor in the collection process is the legislative framework that must be complied with.” You would then go on with your P.E.E.L. “Legislation directly affects the way that we interact with our customers and what information we may hold about them. One important piece of legislation is The Privacy Act 1988 (Cth) this affects the information we collect, who we can divulge that information too, how that information is stored and transmitted and who we may talk with during the collection process. This law is superior to company’s policies and procedures and must be adhered too at all times.” P State your point clearly and concisely. E Your example is where you have evidence of that point either in a text or in the workplace. Examples support the point you have made. They do not make the actual point. E An effect is what many people have trouble in demonstrating. To find the effect a simple question to ask is, how or why does this example support my point? and how or why have I chosen this point to explore my idea? L The link is a statement that actually ties together the information you have just written and relates it back to the initial question you are answering, it is where you show why it’s relevant within your assessment. Headings can be an important part of an assessment. Sometimes it may be beneficial that every time you begin a new topic or idea you place a heading above it such as a title. This heading does not take the place of a topic sentence it simply supplements it.

7. Conclusion Now that you have written your assessment it is vital that you actually then confirm your reader’s understanding of what you are saying by concluding rather than just ending. It’s recommended that you do not start a conclusion with the words “In conclusion…” or “Therefore…” just start with a sentence. A common way of starting a conclusion is by actually writing a paraphrased version of your initial thesis statement often with some of the extraneous information

cut out. Then you should go on to restate some (not all) of your strongest points. Your points are not your ideas or your topics but the facts that supported them. After you have restated these you must finish the essay/report with a strong concluding statement. By this, I mean you must actually answer the question. If you are being asked for a yes or a no answer then here is the time to give it. Integrate your yes or no response into a sentence that resembles your thesis statement or actually addresses the question. An example of a conclusion would be: “Although a company’s policies and procedures are of vital importance, they cannot be considered to be the sole paramount concern with the collection process. When you look at legislation like The Privacy Act 1988 (Cth) and the Uniform Consumer Credit Code, industry guidelines like the correct contact procedures and the ability to have repeat sales with an existing customer who we are collecting from, the importance of a company’s policies and procedures could not be considered of paramount importance during the collection process. At best they would be of equal importance.”

8. Quotations, Referencing, Bibliographies and Plagiarism Plagiarism; It is vital that your work is your own original work. Plagiarism is when you use somebody else’s words or ideas and present them as your own. Quotations; When quoting from a text use “quotation marks” then reference the author, the year of publication and the page number. Include your text in your bibliography. Bibliography; at the end of your assessment, under the heading bibliography, write a list of all the texts you have consulted. List their titles, their author and the year of publication.

Student Testimonial Commencing the Certificate III in Mercantile Agents meant a return to the books after a 10+ year absence which can be a little daunting when you balance work and family alongside. The flexible learning option allowed me to pace the course along with those commitments. It’s a great feeling to have completed the course and receive certified validation of my many years of credit on the job experience. I put my learning into practice every day and look forward to completing more courses in the near future. Regards Helen Dickson Collections Manager

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Training News Referencing; AICM uses the Harvard referencing system. This can be found easily on the internet by using the search terms “Harvard referencing”.

10. Common Terms Thesis Statement Topic Statement

9. Revision & Review It is of upmost importance that you review and revise your writing. After you have completed your essay report and completed the spell checks, you should then read through the essay and make sure that the sentences are complete; that the essay/report has a logical progression and that you are satisfied with your writing. It is also a good idea if you can to have a third party review your writing. This way they can give you their feedback and bring a fresh perspective allowing you the opportunity to revise before submitting.

Point

is the opening statement to any essay or report is an opening statement whenever you are addressing a new idea within your essay report is the point you are making that supports your topic/idea

Other Information on Assessment/Essay preparation, that you may find useful: https://student.unsw.edu.au/essay-writing-basics

2016 Face to Face Training Calendar MELBOURNE: 21st & 22nd March – Legal Compliance (C,D and 4) 14th April – Personal Insolvency (C,D) 13th April – Manage overdue accounts (C,4) 13th May – Manage and recover bad and doubtful debts (C,4) 17th & 18th May – Manage factoring and invoice discounting arrangements (E,D) 21st & 22nd June – Developing your credit policy and procedures (C,D)

11th March – Implement risk management strategies (C,4) 17th & 18th March – Legal Compliance (C,D and 4) 21st April – Personal Insolvency (C,D) 22nd April – Manage overdue accounts (C,4) 23rd May – Manage and recover bad and doubtful debts (C,4) 24th & 25th May – Manage factoring and invoice discounting arrangements (E,D) 27th & 28th June – Developing your credit policy and procedures (C,D)

BRISBANE: 6th April – Assess credit applications (C,4)

TABLE OF EXPLANATION:

7th April – Personal Insolvency (C,D)

E = Elective Unit

8th April – Manage overdue accounts (C,4)

D = Diploma

C= Core Unit

4 = Certificate IV

Recent Graduates Allison Parry Emma Hill Heather Pfitzner Kerrie Adams Rebecca Jane Hebbard Kirsty Gray Robyn English Meghan Gruber Jennifer Tucker Amelita Alfonso Angela Kane Stephanie Chisesi Phillippa Davie Lisa-Maree Monteith Ross Barclay Lisa Gram Alexandra Papas Helen Dickson IN-HOUSE Baiada Australia

9th May – Manage and recover bad and doubtful debts (C,4) 10th & 11th May – Manage factoring and invoice discounting arrangements (E,D) 8th & 9th June – Developing your credit policy and procedures (C,D)

SYDNEY: 9th March – Assess credit applications (C,4) 32

Important Information: You do not have to be a current AICM student undertaking a full qualification to attend any AICM face to face training. You may wish to undertake a program for your professional development, or enhance and update your current skills and knowledge. On the completion of the face to

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

face training, if you wish to receive a Nationally recognised Statement of Attainment you will be required to undertake the online assessment/s for the unit/s of competency. Please register your interest early, as there is a minimum requirement of 8 students to conduct face to face training.

aicm Can We Help? AICM receives questions from Credit Managers that it puts to a panel of lawyers, 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.

Unfair Contracts

zz Can you trust the sales team to negotiate the terms of trade with every new customer, so that your terms of trade contracts are not standard term contracts and therefore outside the new laws?

Question

zz Is the real problem is going to be with the clause which

A Sydney Credit Manager asked “The Unfair Contracts legislation being extended to small business seems to mean I just need two Credit Applications. One for small business and one for others.” Is it really that straight forward?

allows you to change the terms of trade by notice and publication on the internet? zz Is it going to be too hard to monitor the position of customers with the number of their employees and will it be too hard to have different terms for different sized

Answer

customers?

Rebecca Ross, solicitor from Gavin Parsons and Associates

zz The $300,000 contract limit is likely to apply to each and

(www.gpalaw.com.au) and Geoffrey McDonald, Barrister at

every order (viz. contract), such that customers with less

9th Floor Windeyer Chambers (www.9windeyer.com.au/

than 20 employees, but purchasing $millions each year

geoffrey_mcdonald.shtml) investigated this issue at the

through separate “small” orders under $300,000 will seem

recent Credit Symposium in NSW recently, the matter is definitely more complex.

to have the benefit of the new laws. zz The new law will apply as soon as a customer places

In the December edition of Credit Management in Australia (click here to view this issue) David Francis provided an

a new order and thereby enters into a new contract after 12 November 2016.

overview of the proposed laws and in our next edition Rebecca and Geoff will be writing an article based on the

A full outline of these issues will be in the May edition, the

discussions which took place during the session on “unfair

AICM will also provide further workshops and seminars on the

contract terms”. These discussions touched on topics such as;

changes throughout the year.

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

Want to progress your credit career? (or improve results from your credit staff)

de r a n i s n Co

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A qualification course can help you achieve your targets. Offered nation wide, you can study in your own time (24/7) with support available. RPL credits could fast-track your qualification: If you have industry experience or prior education, you may be eligible for Recognition of Prior Learning. Employer Grants: You may qualify for a training grant.

Find the qualification course that best suits your needs: Diploma of Credit Management

Certificate IV in Credit Management

Mercantile Agents Training

Key credit issues such as personal & corporate insolvency, developing credit policies & compliance.

Issues relating to credit applications & securitisation, compliance, managing bad & doubtful debt & customer service.

All aspects of enforcing payment obligations & obligations of mercantile agent & debt collection activities.

Or start small with a single unit: Each qualification is made up of a number of single units. You can start by completing one unit at a time, contributing to the relevant full qualification course, should you decide to complete all of the units in due course. Stop putting it off & take the frst step:

Enrol to propell your credit career (or staff) to the next level.

Call 02 9906 4563 or vist

aicm.com.au

New South Wales AROUND THE STATES

Pinnacle Awards.

National Conference: Grant Morris (National President) presenting the President’s Trophy to Arthur Tchetchenian.

Pinnacle Awards.

Andrew Spring (Jirsh Sutherland) and Gregg Odlum (Ecolab & NSW AICM Director).

President’s Report With this being my first President’s Report I want to start by saying a massive thank you to our President for the past couple of years, Colin Magee, who has stepped down due to personal reasons. Col has effectively led a passionate, engaged and dedicated NSW Council which led to NSW being awarded the 2015 President’s Trophy which was the first time in more than 10 years. On behalf of all NSW members and the NSW Council I’d like to thank Col for his commitment. In Col’s absence a new structure will get us through the rest of the year with myself standing in as President and assisted by a leadership team comprising Malcom Poslinksy (Treasurer), Pete Morgan (Membership), David Hunt (Events) and Andrew Smith (Awards) joining me in taking the lead and all other Councillors maintaining their existing portfolios which they perform so effectively already. It’s the start of a new year and already the calendar is filled with lots of events, so it’s a time to remind all our members about upcoming dates of interest; zz The next CCE exam is scheduled from the 11th – 14th March

and 18-21 March. I encourage everyone who has attained enough points and meet the criteria who are considering becoming a CCE to seriously sign up and do so. zz The networking breakfast on the 16th March discussing Practical Steps to Maximise Recoveries followed by the networking night on the 5th April. zz Let’s not forget the YCP Trivia Night on the 5th May and judging by how popular this event has been over the past couple of years I encourage everyone to get in and register early to avoid disappointment. It truly is such a fun night. zz The Women In Credit (WINC) Luncheon on the 20th May is another not to be missed event and such a positive initiative. I urge everyone who can to come along. I look forward to seeing you all at these coming events. In closing I would like to thank my council for all their help and support. These Councillors do some unbelievable work behind the scenes making all of our events so successful and ensuring we provide the professional development Credit Professionals need. I would also like to thank Nick and his head office staff for all of their support. – Arthur Tchetchenian, NSW President

2015 Masterclass The 2015 Masterclass was held prior to the Pinnacle Awards in December with over 50 attendees. The masterclass started with Anna Taylor from Results March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

New South Wales

Masterclass presenters Nicole Wales, Michael Brereton John Field and Anna Taylor.

Joanne Mannah (Force Legal) and Andrew Spring (Jirsh Sutherland).

Membership pin recipients 5, 10, 15 and 25 years.

Andrew Smith (ARMA) and Sev Indrele (Coates Hire).

2015 Pinnacle Awards sponsored by Dun & Bradstreet Martin Morris (D&B) and Daniel Grace (Go Electrical).

Legal taking us through PPSA and how it can help defend preference claims. Followed by Michael Brereton from ARITA who covered what to expect from Insolvency Practitioners. John Field then looked at criteria for a quality credit operation. Last but not least Nicole Wales from Human Tribe closed out the masterclass with some insights into EQ and emotional intelligence which really resonated for Credit Professionals and how they interact with team members, customers and internal stakeholders. These three speakers made an informative and enjoyable half day seminar. 36

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

After months of nominations and voting the Pinnacle Awards dinner was held at the Novotel Darling harbour. This was a glamorous event befitting the excellence of the finalists in this years awards. The night was a huge success with 140 guests in attendance. The event was completely sold out. Every section of the credit industry was represented with only the National Conference bringing more Credit Professionals together at the one time. A big congratulations goes out to all the finalists and the winners of the night. Our thanks to Dun and Bradstreet and all the individual award sponsors. The winners of the night include: Credit Manager of the Year, sponsored by AMPAC – Courtney Murphy from Vinidex

New South Wales

Senior Credit Officer, Sponsored by Austral Mercantile Cynthia Li from Graincorp Legal Representative of the Year, sponsored by Jirsch Sutherland – Joanne Mannah from Force Legal External Collections Agent of the Year, sponsored by Byron Thomas – Ken Torres from ARMA

AROUND THE STATES

Credit Supervisor of the Year, sponsored by Dun and Bradstreet – Daniel Grace from Go Electrical

Events Calendar

Tuesday 8th March 2016

Wine Tasting Night KPMG, SYDNEY

11th-14th March 2016 and 18th-21st March 2016

Online CCE Exams

Wednesday 16th March 2016

Networking Breakfast – Legal Preference Claims ASHURST OFFICE, MARTIN PLACE, SYDNEY

Recruitment Consultant of the Year Nuala Cummins from Dash Recruitment

Tuesday 5th April 2016

Networking Night – Data & Tech Consultant of the Year – Andrew Spring from Jirsch Sutherland

RYDGES PARRAMATTA – TBC

Thursday 5th May 2016

Young Credit Professional (YCP) Trivia Night

The High Five! Award, Sponsored by ARMA – Sev Indrele from Coates Hire

Friday 20th May 2016

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

KIRRIBILLI CLUB, MILSON POINT

Tuesday 14th June 2016

Networking Breakfast

National Partners

PARRAMATTA

Thursday 14th July 2016

YCPA Dinner KIRRIBILLI CLUB, MILSON POINT

Tuesday 9th August

City Networking Night

Divisional Partners

VENUE: TBC – CITY LOCATION

Friday 9th September

Golf Day OATLANDS GOLF COURSE

9th-12th September 2016

Online CCE Exam Professional Partner Friday 16th September

WINC High Tea Tuesday 11th October 2016

Official Division Supporting Sponsors

National Golf Day GOLD COAST

12th-14th October 2016 Our National, Divisional and Professional 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 2016 National Conference SEAWORLD, GOLD COAST

8th December 2016

Master Class & Pinnacle Awards

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

Queensland

End of Year: Men's team – Simon Dawson, Nick Combis as MC, Arthur Tchetchenian and Bruce Patane.

End of Year: Anniversary pins Simon Culotta and Carla Seirlis with Melinda Grob.

End of year: Event Guests Austin Bull and Jordan Bennie.

End of Year: Peter Mills presenting.

End of Year: Peter Mills, Maria Schandl and Julie McNamara.

End of year guests.

President’s Report Both the last event of 2015 and the first event of 2016 were executed brilliantly by all. With the AICM 2016 National Conference to be held in Queensland, and more “fun” being added to Queensland’s calendar of events, it promises to be an extremely busy year. The Queensland Councillors, members and other stakeholders are collaborating closely to make this another successful year. Firstly, the ongoing support in 2016 from our Partners, Veda, Dun & Bradstreet, Austral Mercantile, Vincents, Results Legal 38

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

and Randstad has already been felt and greatly appreciated. The engagement by their people make us all proud to be AICM members. It would be remiss of me if I do not mention the fantastic support that our members’ employers provide in allowing AICM members to organise functions and events, attend meetings and take AICM enquiries during their normal working day. As generous stakeholders, there is simply no way that most events or business could be organised if done only after work hours. Special mention this month goes out to employer Bruce

Queensland AROUND THE STATES

YCP: Austin Bull, Roger Masamvu and Felicity Ford.

YCP: Lucinda Bell and Decia Guttormsen.

YCP: Melinda Grob and Dominic Holland.

YCP: Stacey Woodward, Dominic Holland, Mark Moorhouse and Sheree Brittain.

Patane, of Patane Lawyers, and his fabulous team for providing their long standing support of their employees to undertake AICM business. Bruce even went the extra yard last year and “volunteered” himself to be part of a panel discussion at our 2015 Xmas function. After the success of the September 2015 WINC Luncheon, another WINC will be held this year but much earlier. Details will be published shortly. Our 2015 Xmas function was held at “Customs House” overlooking the beautiful Brisbane River. Two teams debated “Who did you say makes the better Credit Manager – Men or Women?”. (to be clear, if the topic sounds familiar, it was actually chosen by us well before the 2015 AICM National Conference’s last session debate). It was agreed that Bruce Patane’s use of electric lights, small boxes and other props, provided the valuable points required by his team to gain the audience vote. Well done to Julie McNamara for organising another wonderful event. A swag full of donated lucky door prizes were won. This included a golf bag from Thomson Geer Lawyers, golf shirts from Forbes Dowling, water bottles from Randstad and many other wonderful prizes. 2016 started off with a superb YCP networking night at “Social Sabotage” in Fortitude Valley. With a crowd of nearly 40 potential YCP candidates attending, we were fortunate

enough to hear from a fascinating guest speaker Dominic Holland. Dominic is the 2015 Brisbane Young Entrepreneur of the Year (Retail & Services) and is also managing director of the 2015 High Growth Business Start-up (Tow.com.au). Maria Schandl, Melinda Grob, Stacey Woodward and Roger Masamvu did a fantastic job. This is just the first of many YCP events to be held as part of our “fun” calendar, inspired by the great work of the other state councils. Thank you all again for your support of the Queensland council, and making the AICM informative and “fun” for its members. – Peter Mills MICM, President

The Great debate and end of year function Our end of year event held in November at stunning Customs House was a fantastic evening enjoyed by all who attended especially those that participated in The Great Debate with a ‘twist’. Two teams, Men Vs Women, putting their best argument forward for who would make a better credit manager, the twist, the Men argued Women would make better credit managers whereas the Women argued Men would make better credit March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

Queensland

Events Calendar

March 9th 2016

Credit Network Night – How PPSA can help you defend against a preference claim TATTERSALLS CLUB

11th-14th March 2016 and 18th-21st March 2016

Online CCE Exams 13th April 2016

Credit Network Night

CNN: Brian Mills and Ben Blake.

Engaging and Retaining Credit Professionals RANDSTAD OFFICES

20th April 2016

Credit Toolbox – Assessing Credit Apps RANDSTAD OFFICES

11th May 2016

Credit Network Night – Compliance and Security VENUE: TBC

13th May 2016

Credit Toolbox – Collect with Confidence RANDSTAD OFFICES

8th June 2016

Credit Network Night: Q&A – Time Management TATTERSALLS CLUB

13th July 2016

Personal Development Breakfast – Insolvency VINCENT’S OFFICES

20th July 2016

AICM AGM RYDGES SOUTH BANK

20th July 2016

Awards Dinner – Young Credit Professionals RYDGES SOUTH BANK

CNN: Roger Masamvu, Peter Mills and Andrew Milne.

Managers. Representing the Women were Carla Seirlis, Decia Guttormsen and Melinda Grob and for the Men, Simon Dawson, Bruce Patane and Arthur Tchetchenian with Nick Combis as MC for the evening. The result – Men made the better argument that of course Women make better Credit Managers. An evening of laughs and entertainment with great prizes on offer in our raffle draw, which raised $295 to support White Ribbon. We also handed out Anniversary pins to Simon Culotta and Carla Seirlis celebrating 20 years membership with the AICM. We look forward to this year’s end of year event!

August 2016

Personal Development Magistrates Court Visit & Procedures MAGISTRATES COURT

8th August 2016

Credit Toolbox RANDSTAD

9th September 2016

Women in Credit Luncheon CUSTOMS HOUSE

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

Welcome to 2016! AICM and YCP Social Night To kick start the New Year we had our first event at Sabotage Social in the Valley. We had the pleasure of listening to Dominic Holland speak of his success over the last few years and he gave us his insight into the world of business and what it means to be a young professional. Dominic won the 2015 Brisbane Young Entrepreneur of the Year (Retail & Services) Award and is also the managing director of the 2015 High Growth Business Start Up, Tow.com.au. It was encouraging to see so many young professionals attend and show an interest in YCP and the AICM.

Queensland AROUND THE STATES

CNN: Melinda Grob and Julie Mcnamara. CNN: Wayne Thomason, Toni Sawyer and Andrew Milne.

CNN: Andrew Milne (Suncorp) Presenting.

The Australian Institute of Credit Management welcomes our Partners for 2015. CNN: Decia Guttormsen, John Playfair and Jade.

National Partners

Remember to apply for this year’s Young Credit Professional Award before 31st May. A rewarding experience and a fun night to be had at the awards dinner taking place in July at Customs House.

CNN - 2016 Forecasts

Divisional Partners

Our first CNN event of the year kicked off February 10th held at the Tattersalls Club in Brisbane. Our speakers for the evening were both from Suncorp. Andrew Milne (Executive Manager Treasury Sales) and Wayne Thomason (Head of Debtor Finance) put together a fantastic and engaging presentation for the evening. Andrew focused on Business Forecast for 2016 for QLD, what we may expect, where to expect growth and what to watch out for Wayne focusing on Emerging Segments of the Debtor Finance Industry, how these products are fast becoming mainstream business finance and why. We look forward to our next event coming up on March 9th ‘How PPSA can help you defend against a preference claim’.

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.

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

South Australia

Amanda Campbell, AJ Jaramillo, Rod Sims, Trevor Goodwin and Judy Verhoeff.

Catherine Winter and Lyn McKell.

Kevin Hollister, kerry hammill, josh richards.

James Neate, Yulia Petrenko and Nick Cooper.

Debbie Foster, Merna Spain and Mike Hayes.

Steve Prescott, Diana Lee, Meagan Duerden and Gail Crowder.

President’s Report Adelaide is buzzing with the preparations for Clipsal 500 whilst the Adelaide Fringe Festival is keeping the streets alive with laughter and music till the wee hours of the night. What a way to start the year! The functions committee started with a ripper of an evening at the Elder Park Café. Warm, picturesque, great networking, paddle boats and a very enlightening interactive presentation from Jane Calleja on ‘work/life balancing’. Trust the attendees learnt a thing or two about the art of juggling these two very important components of life! This year we are focussing on quality events. In turn, we have increased our PD committee to help put together more educational symposiums. These have always been well received over the years and we look forward to hearing our members and credit professional’s feedback. Our first event is on March 17th – aptly titled St Pat’s Power Panel. Being emceed 42

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

by one of our finest local entities in the industry and boasting an array of credit professionals on the panel, you will have a chance to ask some curly questions – Ask an expert to be Sure. Introducing Women in Credit for the first time in SA is exciting for the committee. Preparations are on their way with a CBD venue already allocated. With national sponsorship from Veda, NCI and Results Legal, we will have the expertise and experience with us to ignite a new educational event. We look forward to seeing some new faces as we discuss the highlights and challenges for the female gender in the credit industry! I have no doubt the men will have some input! Watch out for this exciting event. We thank our wonderful sponsors for their continued support and hope you will take up the opportunities to attend the functions and gain maximum exposure throughout the year. We welcome any suggestions and comments from you all. So come along members and professionals. We want to

South Australia AROUND THE STATES

Montgomery Wolf, Neil Fennell, Stephen Flamer-Smith, Gail Crowder and Rebecca Edmiston.

Merna Spain, Susan Goodwin and Mary Jeffries.

AJ Jaramillo, Daniel Pjevac, Jane Calleja, Rod Sims, Julie Agostino, Trevor Goodwin.

Fun on the Paddle Boats.

see you at the events for 2016 and trust you will receive the educational benefits of being involved with the AICM in South Australia. Always supporting our members and colleagues!

music – we even saw some guests having a bit of a sing a long! The Functions committee, Gail and Trevor, thanked all in attendance and wished everyone a Happy and Safe Christmas. They highlighted the achievements of the year and encouraged everyone to stay involved next year. We are looking forward to a program that will be both “fresh and exciting”. The committee has already got a number of innovative events planned for 2016, starting with a social function at the Adelaide Rowing Club in early February. Members will be able to have a race on the paddle boats or just take advantage of the rowing club’s balcony whilst chatting away taking in the scenic views of the River Torrens and Adelaide Oval. We hope to see you there.

– Gail Crowder, SA Division President

SA Division Network Night Networking on the Balcony! What a perfect summer evening to have the South Australian Division’s final social function for 2015. The General Havelock Hotel offered the ideal setting for this event. Around 35 guests attended and made full use of the large balcony fitted out with various casual lounges and greenery which made for a very relaxing and pleasant atmosphere for all to enjoy. It was a fabulous end to the year with guests mingling and chatting to their colleagues and industry professionals. The variety of hot and cold cocktail food was most enjoyable. Entertainment was provided by local Adelaide musician, Jimmy Marin, whose easy listening and soulful voice was very well received by all. What a wonderful choice for background

Sundowner’s Networking Evening 4 February 2016 “SPECTACULAR” is the first word that comes to mind when describing the venue for SA’s first networking event of the year! The Elder Park Café proved to be the most picturesque, tranquil and scenic venue we have been to in Adelaide for some time. March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

South Australia

Events Calendar

11th-14th March 2016 and 18th-21st March 2016

Online CCE Exams 17th March 2016

Professional Development – St Pat’s Power Panel NAVAL MILITARY AIR FORCE CLUB

Wade Bekesi and Mary Jeffries.

7th April 2016

Networking Breakfast Date: TBC

Women in Credit Luncheon OLD LION HOTEL

12th May 2016

Networking YCPA CATHEDRAL HOTEL

26th May 2016

Credit Symposium 17th June 2016

George Vahaviolos, Leah Hanisch, Nancy Duong and Mark Draper.

Situated on the River Torrens, the evening warmed up boasting some wonderful sunshine so we could enjoy the daylight saving time to the maximum. After a chilly beginning to the week casting some doubt over this outdoor event we were very fortunate the weather turned out to be perfect! The food and cocktail service from the friendly staff were favourably received by the attendees. There was no shortage of cold and hot food and some healthy fruit to finish. It was good to see everyone have a wonderful time. As well as people chatting, enjoying the scrumptious food and soaking in the atmosphere. The well known Adelaide Paddle Boats glistening on the river with the sun going down over Adelaide Oval, provided extra fun. Fortunately no one fell into the water whilst chasing each other (tired legs/calves the next day) across the river… even though we were hoping to see a funny incident. Jane Calleja, Learning and Development Manager for NCI Trade Credit Solutions, presented on the Work Life Balance of day to day living. Jane had everyone participating by writing on a card “What they think is most important thing to find time to do in their busy lives”? It was not surprising that spending time with the family was number 1. Jane reminded us how this must be done to keep our lives healthy and happy. She certainly is a leading presenter in our State and we thank her for giving us her time. This was a super start to 2016! We look forward to your continued support and seeing you all at the next event. – Functions Committee Gail Crowder and Trevor Goodwin 44

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

Function – Quiz Night

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

Divisional Partners

Victoria/Tasmania

Australia Post big winners as David Condello takes out Credit Manager of the Year & Glenn Thomas accepts the High Five Award for Australia Post’s Legal Recovery Team.

A happy couple – Winner Credit Supervisor of the Year Nunzo Sentinelli (M&M Electrical) and his wife Noula Sentinelli (Telstra).

Stephen Maloney (AMPAC) and Rhys Buzza (Reece Pty Ltd).

President’s Report Welcome to all of our Vic/Tas members, let’s hope the new year brings exciting times. I would like to introduce you to the Vic/Tas Counselors and the portfolios they manage within our state divisions: Jeff Hurst State Director Lou Caldararo State President and Professional Development Charles Tims Vice President and Membership Alison Said State Treasurer Stacey Feaver Professional Development - Victoria Donna Smith Editorial and Magazine Frank Gambera Law and legislation Louie Tzakopoulos Young Credit Professional Rex Chang YCP committee Amaran Navaratnam TCP committee Patrick Barry 2015 YCP State Winner Tony Mackwell Corporate Sponsorship Suzanne Hughes Professional Development - Tasmania Sherif Hasan Certified Credit Executive CCE Neil Smith Pinnacle wards and Professional Development Victoria Country Robyn Erskine Finance committee

Our inaugural Pinnacle awards night was a great night and was incorporated into the end of year Christmas party. I will let the pictures tell the story. Congratulations to all the winners and look forward to seeing you all back again at the next pinnacle awards night. The Calendar of events for 2016 covers a variety of topics and events. Look forward to a seeing you at most if not all of the events this year. The Vic/Tas Golf Day held in February was another great success with plenty of golf played. No one managed to get a Hole in One on either of the two nominated holes and take away a New Volkswagen Golf or Diamond ring. Thank you to everyone who attended and especially to the all the Sponsors for helping make the day such a great event. We also had our First CCE event of the year in February and there was keen interest by many of the attendees to complete the CCE program. The first exam is in March and completion of the paper there after, good luck to all. Thank you to Sharp and Carter for their support of this event, including Stephen Carter who spoke on The Digital Evolution and it impacts on Credit Management. Stephen also had some great insights during the vigorous discussion and Q&A. I would like to take this opportunity to thank our 2016 National Partners Veda, Austral Mercantile and Dun & Bradstreet also our State Partners NMCL and AMPC for their March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

Vic/Tas Division Committee Members Lou Caldararo, Jeff Hurst, Charles Timms, Neil Smith with winner of the Consultant of the Year Award Shaun Odgers (CreditorWatch) (2nd from the right).

AROUND THE STATES

Victoria/Tasmania

Events Calendar

11th-14th March 2016 and 18th-21st March 2016

Online CCE Exams 17th March 2016

Network Event

Topic: Bankruptcy – The process explained Speaker: Ersilia Barbone (White Cleland Lawyers) Bankrupcty Specialist VENUE: PARKVIEW HOTEL

Ersilia Barbone (White Cleland Lawyers) and Amit Jaiswal (realestate.com.au).

30th March 2016

YCP Information Night

Learn all you need to know to enlist in the YCP Awards program VENUE: TBC

12th April 2016

Seminar/Workshop Topic: Basic 101 of Credit VENUE: TBC

21st April

Network Event Topic: Preference Payments – How to Avoid Them Speaker: Joseph Scarcella , Partner in the restructuring and insolvency group at Ashurst Law Firm VENUE: PARKVIEW HOTEL

Juliette Claridge (Hallmark) and Frank Gambera (McMahon Fearnley Laywers) – Winner of Legal Representation of the Year.

5th May 2016

Youth Networking Topic: Creating high performance work teams VENUE: TBC

19th May 2016

Network Event Topic: PPS Registration Made Easy VENUE: TBC

27th May 2016

WINC Luncheon

current and ongoing support. I would also like to announce a new State Partner, Shaper and Carter. Welcome and look forward to working together. National Collection Services leave us as a State Partner and we thank Dale and his team for their great support to the Vic/Tas division which we are sure will continue in other forms. We are always open to suggestions and feedback. If you have any ideas for topics that will help you become better credit professionals or if you have another idea of something fun or informative for a social night, please let us know. Please direct any ideas or queries to us on vic@aicm.com.au

VENUE: TBC

16th June 2016

Network Event Topic: Being Up Front- Presentation Skills VENUE: TBC

21st July 2016

Awards Dinner: Young Credit Professional Awards VENUE: TBC

18th August 2016

Network Event Topic: Time Management Skills

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

Vic/Tas Division 2015 Christmas Party and Inaugural Pinnacle Awards Approximately 90 members and guests attended the 2015 annual Christmas Party and Inaugural Pinnacle Awards for the Vic/Tas Division, held at Krimper in Guilford Lane. A good time was had by all with sustenance provided while members and guests eagerly awaited the announcement of the winners of the 2015 Pinnacle Awards. Importantly we would like to thank Dun & Bradstreet for sponsoring the event and for their continued support of the AICM in general. Without the support of suppliers like Dun & Bradstreet we would not be able to provide members which such value at these events. Our evening was hosted by Master of Ceremonies

Victoria/Tasmania

Darin Milner (Dunn & Bradstreet) Event Sponsor with David Condello (Australia Post) Winner Credit Manager of the Year and Lou Caldararo Vic/Tas Division President.

social events and support to the members of the AICM Vic/Tas Division. We hope that 2016 will be a successful year for all.

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.

The Australian Institute of Credit Management welcomes our Partners for 2015. John Fijalski (White Cleland Laywers) finalist Legal Representive of the Year and his lovely wife Susan.

Neil Smith (Transurban) Vic/Tas Committee Member and Functions Chair. Lou Caldararo Vic/Tas President made a brief presentation, thanking the event sponsors and members and guests for their attendance. Our congratulations go out to the nominees and the winners for their participation in this year’s Pinnacle Awards. Our winners were: Credit Manager of the Year- David Condello (Australia Post), Credit Supervisor of the Year- Nunzio Settinelli (MM Electrical), Senior Credit Officer- Mary Petreski (Baxters Foods), Legal Representation of the Year- Frank Gambera (McMahon Fearnley Lawyers), External Collections Agent of the Year- Dale Hannan (National Collection Services), Recruitment Consultant of the YearLauren Pengilly (Inter Staffing), Consultant of the Year- Shaun Odgers (CreditorWatch), The High Five! Award- Australia Post’s National Legal Recovery Team. Many members expressed their appreciation and enjoyment of the evening and complimented the AICM on the event. The committee would like to take this opportunity to thank the event organisers for their hard work in organizing such an event,. We all appreciate how challenging it is to come up with an event each year that will attract more participants. A big thank you to all members for their support in attending events during the 2015 year and to the Committee Members and Event presenters who volunteer their time to bring valuable education, interesting

National Partners

Divisional Partners

Professional Partners

Our National, Divisional and Professional 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.

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

Lauren Pengilly from Inter Staffing is presented her trophy for Recruitment Consultant of the Year by Lou Caldararo Vic/Tas Divisin President.

AROUND THE STATES

Western Australia/Northern Territory

2016 and the WA Credit Community

Christmas on the Bay 2015

Welcome back Class of 2016! I trust that you all enjoyed your Christmas & New Year festivities. The WA Credit Community has BIG plans for 2016. We are kicking off the year with something different. This year Barefoot Bowls has made its way into our lives. I hope that everyone will have a great time and learn a skill that by all accounts demonstrates team co-operation, strategy and endeavour. West Leederville will be the location for this year’s inaugural event and if it ‘gets feet’ it could be the start of something very exciting for us here in the West. We also have our first Breakfast Club Event booked and on its way. In March, Bankwest Economist, Alan Langford will ask the question “Is the WA Economy in Recession?” It has been sometime since WA presented an Economic Outlook. The venue will be at Matilda Bay, so get in early for this one. The big project for 2016 will be our search for the WA Young Credit Professional. I know we are getting in early but this is a quest for the best. We are hunting out great operators, with sound skills in collection, good judgement and a hint of personality to represent the WA Credit Community during the National Conference. Take a look around your credit department. If you have, or know someone that you think has something special in Credit, please encourage them to nominate! This is only the beginning for The West Australian Credit Community. We are determined to get back on track and lead from the front where we can. I encourage every one of our members and supporters to get involved with TEAM WA – it’s really going places.

The West Australian landscape never ceases to amaze me. Our Christmas on the Bay at South of Perth Yacht Club did not disappoint. The view across the water to the City of Perth was a great backdrop for our Credit Family to enjoy the start of the Festive Season. It was my first Christmas as President and it was very special. There were many new people to meet and plenty of supporters to thank. I believe we even had our first WA Credit Community Selfie. Roll on 2016, we can’t wait to meet you!

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

New Councilor Profile Damien Barr Position: Sales Manager at Austral Mercantile Collections I joined Austral Collections in 2015 as the WA Sales Manager and have recently been appointed as a WA Councillor. I’ve always lived in Perth and have a vast network across the state with a solid background in marketing and advertising. Since coming on board it’s been with great pleasure that I’ve gotten to know the AICM team in WA and really excited to work

Western Australia/NT

L-R Romina Stephan, Rae Vaisey, Tara Evitt, Donna Trezise, Mel Cooper, Karen Vogels, Lisa Marr MICM.

as a councillor to grow the WA division with Lisa and the team. I have a passion for meeting new people and always exploring ways to help their businesses with their internal processes and also provide opportunities for them to learn more about credit and our industry. 2016 is shaping up to be a fantastic year in WA as we explore ways to grow the AICM division and provide our members opportunities to learn more about the credit industry. I’m really looking forward to meeting existing members and welcoming new members as we move through the year with our great events planned for 2016.

The Young Credit Professional of the Year Award With the YCPA 2015 a distant memory it’s time to start looking for our next Credit Professional Superstars of 2016. The Young Credit Professional Award is looking for credit professionals under 30 that are ready to showcase their credit talent. If you are reading this and think….I‘m under 30, I’m a credit professional and I think it’s about time my talents are showcased or have a talented credit superstar in your team then read on!

AROUND THE STATES

Lauren Marsh, Raffaele Di Renzo, Lauren O’Hearn.

Byron Savage, Simon Williams, Paul Saunders, Tom Concannon and Kim Valenti.

The Candidates Over the years we have had Credit Controllers, Accounts Receivable Officers & Business owners all go through to the National Conference representing WA. What did they all have in common? They were passionate about Credit Management. They were looking for an opportunity to further their career. They were wanting to meet some of the most experienced and decorated members of the industry and had the desire to be awarded one of the highest honours in Credit Management in Australia. Are you always striving to deliver the best results in your position? Do you think outside the box or are you always on the lookout for different and innovative ways to manage your credit portfolio? Are you confident and up to date with legislative policy that impacts credit? These are just a few of the qualities that the YCPA Panel Judges are looking for in the next YCPA contender. Past winners for WA have said: “If you’re under 30 and work in the credit industry, you need to apply for this award. Just the experience of being a finalist is invaluable” – Tamera Russell YCPA WA Winner 2014 “Any young credit professionals that are thinking about involving themselves in the AICM or the YCPA should jump right in, it’s an amazing experience and one that you will remember forever” – David Brennan YCPA WA Winner 2015 The Process To be in the running to represent WA a short application is required with a resume, copies of any qualifications and/or awards and a letter from your employer/supervisor confirming your position. The application form can be downloaded from the AICM website. If you are selected as a WA Finalist you will be invited to attend an interview. The panel will assess each candidate on their individual merits within their own field of expertise. The questions will be designed to provide you the opportunity to demonstrate your knowledge, experience, ambitions and passion for the Credit Industry. As a WA Finalist you will receive a complimentary invitation to attend the WA YCPA function, where the Division winner will be announced. State winners will win travel, accommodation and registration to the 2016 AICM National Conference which is being held in SeaWorld QLD. The National YCPA winner receives a $1,000 cash prize and AICM Professional Development award to the value of $2,000. March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

Western Australia/NT The Panel The judging panel will consist of three members, two from the AICM Council and a D&B representative (as the YCPA Sponsor). All members have a long career in the credit industry but started out just like many YCPA candidates. The Opportunity Being part of the YCPA process gives you and your employer a great platform to showcase your talents to the wider Australian Credit Community. The judging panel and AICM Council provide great support and assistance throughout the process. If you are successful and go on to represent WA at the National Conference you will be rubbing shoulders with some of the most successful credit professionals in the country as well as hearing from highly respected and accomplished speakers in the credit and finance sectors.

WA AICM Members – Christmas on the Bay.

So what are you waiting for? Applications close on the 31st of March 2016. We are looking forward to hearing from you!

Events Calendar

11th-14th March 2016 and 18th-21st March 2016

Online CCE Exams April 2016

Credit Toolbox

WA AICM Members – Christmas on the Bay.

VENUE: QBE CONFERENCE ROOM

May 2016

Networking Breakfast

Caption

VENUE: MATILDA BAY RESTAURANT

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

June 2016

Credit Toolbox

VENUE: QBE CONFERENCE ROOM

July 2016

YCPA Dinner VENUE: THE CROWN

Divisional Partners August 2016

WINC VENUE: TBC

September 2016

Credit Toolbox VENUE: QBE CONFERENCE ROOM

October 2016

Sponsors Lunch VENUE: TBC

November 2016

Credit Toolbox VENUE: TBC

CREDIT MANAGEMENT IN AUSTRALIA • March 2016

New Members The Institute welcomes the following credit professionals who were recently admitted to membership in November, December 2015, January and February 2016

QUEENSLAND Christine Funnell Matthew Hudson Shireen Long

VICTORIA/TASMANIA Wholesale Rental Finance Pty Ltd SV Partners DSS Law Pty Ltd

NEW SOUTH WALES Richard Andjelkovic Apoorva Apoorva Aruni Ariyaratne Dale Austin Sheree Averillo Christopher Broad Luke Brothers Narsi Burju Charlene Cartes Carol Cassidy Amanda Consiglio Roslyn Dearnley Indri Dharma Anita Dominello Joseph D’Souza Patricia Eastcott Matthew Egan Biliana Entchev Aileen Faleono Margaret Gardiner Khush Grewal Bhavna Gupta Montana Hanley Jacqueline Hutson Dianne Isaac Catherine James Jessica Komolos Nancy Ling Gio Maniacop Bradley Morgan Can Ozdemir Rohan Pal Sharon Seaton Sofia Singh Bianca Tayler Ruth Thomason Miroslav Todorovic Lloma Vining Christopher Williams Samantha Wright

BOC Limited BOC Limited BOC Limited BOC Limited Brickworks Limited Vodafone Hutchinson Australia Pty Ltd BOC Limited Vodafone Hutchinson Australia Pty Ltd Brickworks Building Products Pty Ltd Vodafone Hutchinson Australia Pty Ltd Vodafone Hutchinson Australia Pty Ltd Atlas Copco Australia Pty Ltd BOC Limited LG Electronics Australia Pty Ltd Atlas Copco Australia Pty Ltd BOC Limited Vodafone Hutchinson Australia Pty Ltd BOC Limited BOC Limited Atlas Copco Australia Pty Ltd Viadux Pty Ltd BOC Limited BOC Limited BOC Limited BOC Limited Actron Engineering Pty Ltd Atlas Copco Australia Pty Ltd BOC Limited BOC Limited BOC Limited Atlas Copco Australia Pty Ltd BOC Limited Brickworks Building Products Pty Ltd Brickworks Building Products Pty Ltd Brickworks Building Products Pty Ltd Vodafone Hutchinson Australia Pty Ltd BOC Limited Atlas Copco Australia Pty Ltd Arrium Limited Brickworks Limited

Shonna Berthelsen Michelle Challis Lawrance Chen Joseph Collidge Meecah Cooper Margaret Herold Timothy Holden Kylie Jones Hollie Kane David Mackintosh Nicholas Mann Peter Millidonis Jan Palmer Margeaux Prinsloo Jeanine Purdie Lynn Ruddell Atul Sharma Nadine Sharp Matthew Smith Gillian Thomas Maxine Vallance Agatha Zaloumis

Brickworks Building Products Pty Ltd The Challis Group Cummins South Pacific Pty Ltd Vodafone Hutchinson Australia Pty Ltd Vodafone Hutchinson Australia Pty Ltd Cummins South Pacific Pty Ltd Foremans Business Services PFD Food Services Pty Ltd Rea Group Pty Ltd AG Coombs Servicing Caltex Australia Petroleum Pty Ltd Cummins South Pacific Pty Ltd CPA Australia Cummins South Pacific Pty Ltd Business Credit Solutions Pty Ltd B.J. Ball Pty Ltd Cummins South Pacific Pty Ltd Cummins South Pacific Pty Ltd Cummins South Pacific Pty Ltd UXC Keystone Ambulance Victoria BASF Australia Ltd

SOUTH AUSTRALIA Jacob Alexander Edith Chau Daniel Mackintosh Courtney McDonald Tate O’Connor Kerry Pearce Maxine Williams Kirsty Wright

Credit Solutions Pty Ltd National Credit Insurance (Brokers) Pty Ltd National Credit Insurance (Brokers) Pty Ltd Lynch Meyer Lawyers National Credit Management Limited Kemps Credit Solutions Kemps Credit Solutions Credit Solutions

WESTERN AUSTRALIA Chris Bond David Green Steven Lamb

Baycorp Australia Intertek Commodities Australasia Brickworks Building Products Pty Ltd

CORPORATE MEMBER Bartier Perry Pty Ltd

March 2016 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

NEW MEMBERS

See you at AICMâ&#x20AC;&#x2122;s

2016

NATIONAL Conference Venue:

Sea World 12 - 14 October 2016

Visit

aicm.com.au for details and earlybird registrations 2016 National Conference